GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

The 2013 and 2012 Senior Notes are unconditionally guaranteed, jointly and severally, by certain domestic subsidiaries which are 100% owned by the Company. The following tables present condensed consolidating financial information at March 31, 2014 and December 31, 2013 and for the three months ended March 31, 2014 and 2013 for: IAC, on a stand-alone basis; the combined guarantor subsidiaries of IAC; the combined non-guarantor subsidiaries of IAC; and IAC on a consolidated basis.

Balance sheet at March 31, 2014:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Total Eliminations			IAC Consolidated
	(In thousands)
Cash and cash equivalents	$	670,607	$	—	$	332,704	$	—		$	1,003,311
Marketable securities	33,961		—		5,582		—			39,543
Accounts receivable, net	30		148,753		92,234		—			241,017
Other current assets	63,187		75,085		49,977		(1,044		)	187,205
Intercompany receivables	—		524,844		830,023		(1,354,867		)	—
Property and equipment, net	5,108		218,643		67,360		—			291,111
Goodwill	—		1,185,760		529,841		—			1,715,601
Intangible assets, net	—		293,311		178,926		—			472,237
Investment in subsidiaries	3,857,408		825,826		—		(4,683,234		)	—
Other non-current assets	85,073		19,132		175,914		(6,088		)	274,031
Total assets	$	4,715,374	$	3,291,354	$	2,262,561	$	(6,045,233	)	$	4,224,056

Accounts payable, trade	$	5,023	$	33,202	$	29,291	$	—		$	67,516
Other current liabilities	40,684		269,022		223,421		—			533,127
Long-term debt	1,000,000		80,000		—		—			1,080,000
Income taxes payable	386,168		7,785		26,303		—			420,256
Intercompany liabilities	1,354,867		—		—		(1,354,867		)	—
Other long-term liabilities	219,138		94,941		79,101		(7,132		)	386,048
Redeemable noncontrolling interests	—		—		25,885		—			25,885
IAC shareholders' equity	1,709,494		2,806,404		1,876,830		(4,683,234		)	1,709,494
Noncontrolling interests	—		—		1,730		—			1,730
Total liabilities and shareholders' equity	$	4,715,374	$	3,291,354	$	2,262,561	$	(6,045,233	)	$	4,224,056

Balance sheet at December 31, 2013:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Total Eliminations			IAC Consolidated
	(In thousands)
Cash and cash equivalents	$	782,022	$	—	$	318,422	$	—		$	1,100,444
Marketable securities	1,007		—		4,997		—			6,004
Accounts receivable, net	38		134,307		73,063		—			207,408
Other current assets	45,111		73,487		43,746		(814		)	161,530
Intercompany receivables	—		564,999		851,454		(1,416,453		)	—
Property and equipment, net	5,316		220,756		67,892		—			293,964
Goodwill	—		1,180,159		495,164		—			1,675,323
Intangible assets, net	—		301,513		143,823		—			445,336
Investment in subsidiaries	3,833,751		782,840		—		(4,616,591		)	—
Other non-current assets	83,207		15,485		252,612		(6,629		)	344,675
Total assets	$	4,750,452	$	3,273,546	$	2,251,173	$	(6,040,487	)	$	4,234,684

Accounts payable, trade	$	4,310	$	51,302	$	22,041	$	—		$	77,653
Other current liabilities	41,623		254,882		212,739		—			509,244
Long-term debt	1,000,000		80,000		—		—			1,080,000
Income taxes payable	383,926		6,768		25,690		—			416,384
Intercompany liabilities	1,416,453		—		—		(1,416,453		)	—
Other long-term liabilities	217,404		96,091		73,089		(7,443		)	379,141
Redeemable noncontrolling interests	—		—		42,861		—			42,861
IAC shareholders' equity	1,686,736		2,784,503		1,832,088		(4,616,591		)	1,686,736
Noncontrolling interests	—		—		42,665		—			42,665
Total liabilities and shareholders' equity	$	4,750,452	$	3,273,546	$	2,251,173	$	(6,040,487	)	$	4,234,684

Statement of operations for the three months ended March 31, 2014:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	518,264		$	223,587		$	(1,604	)	$	740,247
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	(28		)	116,751			93,431			(960		)	209,194
Selling and marketing expense	192			226,801			72,035			(316		)	298,712
General and administrative expense	22,446			40,991			31,366			13			94,816
Product development expense	1,471			25,969			11,917			(341		)	39,016
Depreciation	329			9,293			5,196			—			14,818
Amortization of intangibles	—			8,277			3,702			—			11,979
Total operating costs and expenses	24,410			428,082			217,647			(1,604		)	668,535
Operating (loss) income	(24,410		)	90,182			5,940			—			71,712
Equity in earnings (losses) of unconsolidated affiliates	54,259			8,422			(27		)	(64,589		)	(1,935		)
Interest expense	(12,985		)	(1,042		)	(37		)	—			(14,064		)
Other income (expense), net	9,699			(8,751		)	(971		)	—			(23		)
Earnings from continuing operations before income taxes	26,563			88,811			4,905			(64,589		)	55,690
Income tax benefit (provision)	10,136			(30,161		)	(1,360		)	—			(21,385		)
Earnings from continuing operations	36,699			58,650			3,545			(64,589		)	34,305
Loss from discontinued operations, net of tax	(814		)	—			(13		)	13			(814		)
Net earnings	35,885			58,650			3,532			(64,576		)	33,491
Net loss attributable to noncontrolling interests	—			—			2,394			—			2,394
Net earnings attributable to IAC shareholders	$	35,885		$	58,650		$	5,926		$	(64,576	)	$	35,885
Comprehensive income attributable to IAC shareholders	$	41,234		$	59,032		$	9,622		$	(68,654	)	$	41,234

Statement of operations for the three months ended March 31, 2013:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	528,644		$	214,642		$	(1,037	)	$	742,249
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	677			153,800			102,151			(779		)	255,849
Selling and marketing expense	431			182,743			59,997			(257		)	242,914
General and administrative expense	22,245			40,273			33,207			(1		)	95,724
Product development expense	899			23,042			11,176			—			35,117
Depreciation	367			9,249			4,400			—			14,016
Amortization of intangibles	—			8,962			5,116			—			14,078
Total operating costs and expenses	24,619			418,069			216,047			(1,037		)	657,698
Operating (loss) income	(24,619		)	110,575			(1,405		)	—			84,551
Equity in earnings (losses) of unconsolidated affiliates	114,550			2,396			(91		)	(116,946		)	(91		)
Interest expense	(6,557		)	(1,065		)	(41		)	—			(7,663		)
Other (expense) income, net	(55,448		)	(18,138		)	75,244			—			1,658
Earnings from continuing operations before income taxes	27,926			93,768			73,707			(116,946		)	78,455
Income tax benefit (provision)	26,655			(33,806		)	(18,595		)	—			(25,746		)
Earnings from continuing operations	54,581			59,962			55,112			(116,946		)	52,709
(Loss) earnings from discontinued operations, net of tax	(944		)	—			7			(7		)	(944		)
Net earnings	53,637			59,962			55,119			(116,953		)	51,765
Net loss attributable to noncontrolling interests	—			8			1,864			—			1,872
Net earnings attributable to IAC shareholders	$	53,637		$	59,970		$	56,983		$	(116,953	)	$	53,637
Comprehensive income attributable to IAC shareholders	$	41,710		$	59,895		$	40,890		$	(100,785	)	$	41,710

Statement of cash flows for the three months ended March 31, 2014:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations		IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(29,250	)	$	73,160		$	(1,206	)	$	—	$	42,704
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(51,263		)	(26,718		)	—		(77,981		)
Capital expenditures	(985		)	(5,661		)	(3,075		)	—		(9,721		)
Purchases of marketable debt securities	(32,848		)	—			—			—		(32,848		)
Purchases of long-term investments	(3,000		)	(3,286		)	(1,575		)	—		(7,861		)
Other, net	2			—			(159		)	—		(157		)
Net cash used in investing activities attributable to continuing operations	(36,831		)	(60,210		)	(31,527		)	—		(128,568		)
Cash flows from financing activities attributable to continuing operations:
Dividends	(20,004		)	—			—			—		(20,004		)
Issuance of common stock, net of withholding taxes	920			—			—			—		920
Excess tax benefits from stock-based awards	15,610			—			8,593			—		24,203
Purchase of noncontrolling interests	—			(30,000		)	—			—		(30,000		)
Funds returned from escrow for Meetic tender offer	—			—			12,354			—		12,354
Intercompany	(41,436		)	17,051			24,385			—		—
Other, net	(374		)	—			79			—		(295		)
Net cash (used in) provided by financing activities attributable to continuing operations	(45,284		)	(12,949		)	45,411			—		(12,822		)
Total cash (used in) provided by continuing operations	(111,365		)	1			12,678			—		(98,686		)
Total cash used in discontinued operations	(50		)	—			(13		)	—		(63		)
Effect of exchange rate changes on cash and cash equivalents	—			(1		)	1,617			—		1,616
Net (decrease) increase in cash and cash equivalents	(111,415		)	—			14,282			—		(97,133		)
Cash and cash equivalents at beginning of period	782,022			—			318,422			—		1,100,444
Cash and cash equivalents at end of period	$	670,607		$	—		$	332,704		$	—	$	1,003,311

Statement of cash flows for the three months ended March 31, 2013:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations		IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(1,106	)	$	106,037		$	(12,569	)	$	—	$	92,362
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(6,060		)	(23,134		)	—		(29,194		)
Capital expenditures	(78		)	(28,920		)	(4,640		)	—		(33,638		)
Proceeds from maturities and sales of marketable debt securities	12,500			—			—			—		12,500
Purchases of long-term investments	—			—			(975		)	—		(975		)
Other, net	(55		)	—			(782		)	—		(837		)
Net cash provided by (used in) investing activities attributable to continuing operations	12,367			(34,980		)	(29,531		)	—		(52,144		)
Cash flows from financing activities attributable to continuing operations:
Principal payments on long-term debt	(15,844		)	—			—			—		(15,844		)
Purchase of treasury stock	(88,605		)	—			—			—		(88,605		)
Dividends	(21,429		)	—			—			—		(21,429		)
Issuance of common stock, net of withholding taxes	552			—			—			—		552
Excess tax benefits from stock-based awards	12,530			—			—			—		12,530
Intercompany	29,317			(71,056		)	41,739			—		—
Other, net	(927		)	(29		)	(145		)	—		(1,101		)
Net cash (used in) provided by financing activities attributable to continuing operations	(84,406		)	(71,085		)	41,594			—		(113,897		)
Total cash used in continuing operations	(73,145		)	(28		)	(506		)	—		(73,679		)
Total cash provided by (used in) discontinued operations	2,426			—			(1		)	—		2,425
Effect of exchange rate changes on cash and cash equivalents	—			28			(4,994		)	—		(4,966		)
Net decrease in cash and cash equivalents	(70,719		)	—			(5,501		)	—		(76,220		)
Cash and cash equivalents at beginning of period	501,075			—			248,902			—		749,977
Cash and cash equivalents at end of period	$	430,356		$	—		$	243,401		$	—	$	673,757