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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
weighted analysis, and reflects a discount rate of 15% , which captures the risks associated with the obligation. The probability-weighted
analysis consists of the Company's multi-scenario forecasts of Twoo's earnings and the number of users of Twoo.com in accordance with the
contingent consideration arrangement through December 31, 2015, and the Company's estimate of the probability of each scenario occurring.
The discounted liability of the contingent consideration arrangement ranges from $34.2 million to $51.4 million in these scenarios at December
31, 2013. These multi-scenario forecasts and related probability assessments were based primarily on management's internal projections and
strategic plans, with limited additional consideration given to growth trends of similarly situated businesses. The fair value of the contingent
consideration arrangement is sensitive to changes in the discount rate and changes in the forecasts of earnings and website u2sers. The Company
remeasures the fair value of the contingent consideration arrangement each reporting period, and changes are recognized in “General and
administrative expense” in the accompanying consolidated statement of operations. The contingent consideration arrangement liability at
December 31, 2013 includes a current portion of $7.1 million and non-current portion of $36.5 million , which are included in “Accrued
expenses and other current liabilities” and “Other long-term liabilities,” respectively, in the accompanying consolidated balance sheet.
The contingent consideration arrangement in 2012 related to OkCupid, which was acquired in January 2011.
Financial instruments measured at fair value only for disclosure purposes
The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure
purposes:
The fair value of long-term debt, including current maturities, is estimated using market prices or indices for similar liabilities and taking
into consideration other factors such as credit quality and maturity, which are Level 3 inputs.
NOTE 10—LONG-TERM DEBT
The balance of long-term debt is comprised of:
On November 15, 2013, the Company issued $500 million aggregate principal amount of 4.875% Senior Notes due November 30, 2018.
equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium. Thereafter, we may redeem the
2013 Senior Notes at the redemption prices set forth below, together
December 31, 2013
December 31, 2012
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
(In thousands)
Current maturities of long-term debt
$
—
$
—
$
(
15,844
)
$
(15,875
)
Long-term debt, net of current maturities
(1,080,000
)
(1,058,396
)
(580,000
)
(581,994
)
December 31,
2013
2012
(In thousands)
7.00% Senior Notes due January 15, 2013 (the "2002 Senior Notes"); interest payable each January 15
and July 15, which commenced July 15, 2003
$
—
$
15,844
4.875% Senior Notes due November 30, 2018 (the "2013 Senior Notes"); interest payable each May 30
and November 30, which commences May 30, 2014
500,000
—
4.75% Senior Notes due December 15, 2022 (the "2012 Senior Notes"); interest payable each June 15
and December 15, which commenced June 15, 2013
500,000
500,000
5% New York City Industrial Development Agency Liberty Bonds due September 1, 2035 (the "Liberty
Bonds"); interest payable each March 1 and September 1, which commenced March 1, 2006
80,000
80,000
Total long-term debt
1,080,000
595,844
Less current maturities
—
(
15,844
)
Long-term debt, net of current maturities
$
1,080,000
$
580,000