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 December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 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 December 31, 2014:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			IAC Consolidated
	(In thousands)
Cash and cash equivalents	$	766,076	$	1,021	$	223,308	$	—		$	990,405
Marketable securities	159,197		—		1,451		—			160,648
Accounts receivable, net	13		155,262		80,811		—			236,086
Other current assets	23,923		91,105		57,487		(5,773		)	166,742
Intercompany receivables	—		1,688,403		970,810		(2,659,213		)	—
Property and equipment, net	4,950		232,819		64,690		—			302,459
Goodwill	—		1,249,807		505,119		—			1,754,926
Intangible assets, net	—		325,771		166,165		—			491,936
Investment in subsidiaries	5,035,304		930,443		—		(5,965,747		)	—
Other non-current assets	44,610		20,682		109,372		(2,988		)	171,676
Total assets	$	6,034,073	$	4,695,313	$	2,179,213	$	(8,633,721	)	$	4,274,878

Accounts payable, trade	$	3,059	$	55,320	$	22,784	$	—		$	81,163
Other current liabilities	73,491		328,920		191,197		(817		)	592,791
Long-term debt	1,000,000		80,000		—		—			1,080,000
Income taxes payable	2,240		4,771		25,624		—			32,635
Intercompany liabilities	2,659,213		—		—		(2,659,213		)	—
Other long-term liabilities	304,117		104,219		54,328		(7,944		)	454,720
Redeemable noncontrolling interests	—		—		40,427		—			40,427
IAC shareholders' equity	1,991,953		4,122,083		1,843,664		(5,965,747		)	1,991,953
Noncontrolling interests	—		—		1,189		—			1,189
Total liabilities and shareholders' equity	$	6,034,073	$	4,695,313	$	2,179,213	$	(8,633,721	)	$	4,274,878

Balance sheet at December 31, 2013:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		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		135,651		71,719		—			207,408
Other current assets	45,111		76,572		40,661		(814		)	161,530
Intercompany receivables	—		569,030		847,423		(1,416,453		)	—
Property and equipment, net	5,316		221,386		67,262		—			293,964
Goodwill	—		1,180,159		495,164		—			1,675,323
Intangible assets, net	—		302,082		143,254		—			445,336
Investment in subsidiaries	3,833,751		782,840		—		(4,616,591		)	—
Other non-current assets	83,207		15,521		252,576		(6,629		)	344,675
Total assets	$	4,750,452	$	3,283,241	$	2,241,478	$	(6,040,487	)	$	4,234,684

Accounts payable, trade	$	4,310	$	51,525	$	21,818	$	—		$	77,653
Other current liabilities	41,623		280,549		187,072		—			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		96,239		72,941		(7,443		)	379,141
Redeemable noncontrolling interests	—		—		42,861		—			42,861
IAC shareholders' equity	1,686,736		2,768,160		1,848,431		(4,616,591		)	1,686,736
Noncontrolling interests	—		—		42,665		—			42,665
Total liabilities and shareholders' equity	$	4,750,452	$	3,283,241	$	2,241,478	$	(6,040,487	)	$	4,234,684

Statement of operations for the year ended December 31, 2014:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	2,286,621		$	834,765		$	(11,839	)	$	3,109,547
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	998			525,185			359,746			(2,753		)	883,176
Selling and marketing expense	2,138			904,221			226,381			(8,303		)	1,124,437
General and administrative expense	105,221			211,293			127,051			45			443,610
Product development expense	6,496			110,375			44,472			(828		)	160,515
Depreciation	1,426			40,645			19,085			—			61,156
Amortization of intangibles	—			37,661			20,265			—			57,926
Total operating costs and expenses	116,279			1,829,380			797,000			(11,839		)	2,730,820
Operating (loss) income	(116,279		)	457,241			37,765			—			378,727
Equity in earnings (losses) of unconsolidated affiliates	253,582			34,613			452			(298,344		)	(9,697		)
Interest expense	(51,988		)	(4,246		)	(80		)	—			(56,314		)
Other income (expense), net	2,688			(3,315		)	(42,160		)	—			(42,787		)
Earnings (loss) from continuing operations before income taxes	88,003			484,293			(4,023		)	(298,344		)	269,929
Income tax benefit (provision)	152,197			(172,128		)	(15,441		)	—			(35,372		)
Earnings (loss) from continuing operations	240,200			312,165			(19,464		)	(298,344		)	234,557
Earnings from discontinued operations, net of tax	174,673			—			570			(570		)	174,673
Net earnings (loss)	414,873			312,165			(18,894		)	(298,914		)	409,230
Net loss attributable to noncontrolling interests	—			—			5,643			—			5,643
Net earnings (loss) attributable to IAC shareholders	$	414,873		$	312,165		$	(13,251	)	$	(298,914	)	$	414,873
Comprehensive income (loss)attributable to IAC shareholders	$	340,219		$	303,976		$	(84,767	)	$	(219,209	)	$	340,219

Statement of operations for the year ended December 31, 2013:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	2,183,969		$	843,133		$	(4,115	)	$	3,022,987
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	2,456			600,511			403,614			(2,860		)	1,003,721
Selling and marketing expense	2,563			769,115			185,865			(1,133		)	956,410
General and administrative expense	97,025			164,173			117,066			(122		)	378,142
Product development expense	4,685			100,350			34,724			—			139,759
Depreciation	1,386			38,938			18,585			—			58,909
Amortization of intangibles	—			40,277			19,566			—			59,843
Total operating costs and expenses	108,115			1,713,364			779,420			(4,115		)	2,596,784
Operating (loss) income	(108,115		)	470,605			63,713			—			426,203
Equity in earnings (losses) of unconsolidated affiliates	439,925			62,402			(303		)	(508,639		)	(6,615		)
Interest expense	(29,417		)	(3,979		)	(200		)	—			(33,596		)
Other (expense) income, net	(35,331		)	(35,040		)	100,680			—			30,309
Earnings from continuing operations before income taxes	267,062			493,988			163,890			(508,639		)	416,301
Income tax benefit (provision)	16,796			(156,170		)	4,872			—			(134,502		)
Earnings from continuing operations	283,858			337,818			168,762			(508,639		)	281,799
Earnings (losses) from discontinued operations, net of tax	1,926			—			(39		)	39			1,926
Net earnings	285,784			337,818			168,723			(508,600		)	283,725
Net loss attributable to noncontrolling interests	—			—			2,059			—			2,059
Net earnings attributable to IAC shareholders	$	285,784		$	337,818		$	170,782		$	(508,600	)	$	285,784
Comprehensive income attributable to IAC shareholders	$	304,907		$	338,683		$	181,481		$	(520,164	)	$	304,907

Statement of operations for the year ended December 31, 2012:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	1,986,527		$	820,759		$	(6,353	)	$	2,800,933
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	5,194			597,588			393,811			(4,905		)	991,688
Selling and marketing expense	4,081			669,448			222,374			(1,465		)	894,438
General and administrative expense	121,919			152,166			112,359			17			386,461
Product development expense	5,611			83,008			27,907			—			116,526
Depreciation	832			35,544			16,105			—			52,481
Amortization of intangibles	—			10,958			24,813			—			35,771
Total operating costs and expenses	137,637			1,548,712			797,369			(6,353		)	2,477,365
Operating (loss) income	(137,637		)	437,815			23,390			—			323,568
Equity in earnings (losses) of unconsolidated affiliates	309,639			37,866			(22,548		)	(350,302		)	(25,345		)
Interest expense	(1,835		)	(4,174		)	(140		)	—			(6,149		)
Other (expense) income, net	(82,900		)	(3,733		)	83,621			—			(3,012		)
Earnings from continuing operations before income taxes	87,267			467,774			84,323			(350,302		)	289,062
Income tax benefit (provision)	81,050			(146,333		)	(53,932		)	—			(119,215		)
Earnings from continuing operations	168,317			321,441			30,391			(350,302		)	169,847
(Loss) earnings from discontinued operations, net of tax	(9,051		)	—			842			(842		)	(9,051		)
Net earnings	159,266			321,441			31,233			(351,144		)	160,796
Net earnings attributable to noncontrolling interests	—			—			(1,530		)	—			(1,530		)
Net earnings attributable to IAC shareholders	$	159,266		$	321,441		$	29,703		$	(351,144	)	$	159,266
Comprehensive income attributable to IAC shareholders	$	139,540		$	322,212		$	29,828		$	(352,040	)	$	139,540

Statement of cash flows for the year ended December 31, 2014:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(114,773	)	$	543,087		$	(4,266	)	$	424,048
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(191,238		)	(68,153		)	(259,391		)
Capital expenditures	(1,843		)	(40,422		)	(14,968		)	(57,233		)
Proceeds from maturities and sales of marketable debt securities	21,644			—			—			21,644
Purchases of marketable debt securities	(175,826		)	—			—			(175,826		)
Proceeds from sales of long-term investments and a business	—			—			58,388			58,388
Purchases of long-term investments	(4,800		)	(7,043		)	(12,491		)	(24,334		)
Other, net	(2,000		)	11			(1,053		)	(3,042		)
Net cash used in investing activities attributable to continuing operations	(162,825		)	(238,692		)	(38,277		)	(439,794		)
Cash flows from financing activities attributable to continuing operations:
Dividends	(97,338		)	—			—			(97,338		)
Issuance of common stock, net of withholding taxes	1,609			—			—			1,609
Excess tax benefits from stock-based awards	34,214			—			10,743			44,957
Purchase of noncontrolling interests	—			(30,000		)	(3,165		)	(33,165		)
Funds returned from escrow for Meetic tender offer	—			—			12,354			12,354
Acquisition-related contingent consideration payments	—			(736		)	(7,373		)	(8,109		)
Debt issuance costs	(383		)	—			—			(383		)
Intercompany	323,666			(271,309		)	(52,357		)	—
Other, net	—			(1,365		)	460			(905		)
Net cash provided by (used in) financing activities attributable to continuing operations	261,768			(303,410		)	(39,338		)	(80,980		)
Total cash (used in) provided by continuing operations	(15,830		)	985			(81,881		)	(96,726		)
Total cash used in discontinued operations	(116		)	—			(29		)	(145		)
Effect of exchange rate changes on cash and cash equivalents	—			36			(13,204		)	(13,168		)
Net (decrease) increase in cash and cash equivalents	(15,946		)	1,021			(95,114		)	(110,039		)
Cash and cash equivalents at beginning of period	782,022			—			318,422			1,100,444
Cash and cash equivalents at end of period	$	766,076		$	1,021		$	223,308		$	990,405

Statement of cash flows for the year ended December 31, 2013:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(95,081	)	$	537,116		$	(31,074	)	$	410,961
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(6,382		)	(34,052		)	(40,434		)
Capital expenditures	(1,387		)	(63,931		)	(14,993		)	(80,311		)
Proceeds from maturities and sales of marketable debt securities	12,502			—			—			12,502
Proceeds from sales of long-term investments and assets	7,839			50,850			24,402			83,091
Purchases of long-term investments	(17,814		)	—			(33,266		)	(51,080		)
Other, net	—			(1,725		)	(1,804		)	(3,529		)
Net cash provided by (used in) investing activities attributable to continuing operations	1,140			(21,188		)	(59,713		)	(79,761		)
Cash flows from financing activities attributable to continuing operations:
Proceeds from issuance of long-term debt	500,000			—			—			500,000
Principal payments on long-term debt	(15,844		)	—			—			(15,844		)
Purchase of treasury stock	(264,214		)	—			—			(264,214		)
Dividends	(79,189		)	—			—			(79,189		)
Issuance of common stock, net of withholding taxes	(5,077		)	—			—			(5,077		)
Excess tax benefits from stock-based awards	32,081			—			810			32,891
Purchase of noncontrolling interests	—			—			(67,947		)	(67,947		)
Funds transferred to escrow for Meetic tender offer	—			—			(71,512		)	(71,512		)
Acquisition-related contingent consideration payment	—			(256		)	—			(256		)
Debt issuance costs	(7,399		)	—			—			(7,399		)
Intercompany	216,359			(514,464		)	298,105			—
Other, net	—			(1,225		)	(2,562		)	(3,787		)
Net cash provided by (used in) financing activities attributable to continuing operations	376,717			(515,945		)	156,894			17,666
Total cash provided by (used in) continuing operations	282,776			(17		)	66,107			348,866
Total cash used in discontinued operations	(1,829		)	—			(48		)	(1,877		)
Effect of exchange rate changes on cash and cash equivalents	—			17			3,461			3,478
Net increase in cash and cash equivalents	280,947			—			69,520			350,467
Cash and cash equivalents at beginning of period	501,075			—			248,902			749,977
Cash and cash equivalents at end of period	$	782,022		$	—		$	318,422		$	1,100,444

Statement of cash flows for the year ended December 31, 2012:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(116,353	)	$	453,692		$	17,188		$	354,527
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	(35,159		)	(331,182		)	(33,913		)	(400,254		)
Capital expenditures	(3,969		)	(29,550		)	(17,682		)	(51,201		)
Proceeds from maturities and sales of marketable debt securities	195,501			—			—			195,501
Purchases of marketable debt securities	(53,952		)	—			—			(53,952		)
Proceeds from sales of long-term investments and a business	14,194			272			150			14,616
Purchases of long-term investments	(27,187		)	(724		)	(8,183		)	(36,094		)
Other, net	(351		)	(155		)	(9,417		)	(9,923		)
Net cash provided by (used in) investing activities attributable to continuing operations	89,077			(361,339		)	(69,045		)	(341,307		)
Cash flows from financing activities attributable to continuing operations:
Proceeds from issuance of long-term debt	500,000			—			—			500,000
Purchase of treasury stock	(691,830		)	—			—			(691,830		)
Dividends	(68,163		)	—			—			(68,163		)
Issuance of common stock, net of withholding taxes	262,841			—			—			262,841
Excess tax benefits from stock-based awards	52,209			4,892			—			57,101
Purchase of noncontrolling interests	(1,936		)	—			(2,955		)	(4,891		)
Acquisition-related contingent consideration payments	—			(10,781		)	—			(10,781		)
Debt issuance costs	(11,001		)	—			—			(11,001		)
Intercompany	(55,020		)	(86,446		)	141,466			—
Other, net	—			—			244			244
Net cash (used in) provided by financing activities attributable to continuing operations	(12,900		)	(92,335		)	138,755			33,520
Total cash (used in) provided by continuing operations	(40,176		)	18			86,898			46,740
Total cash (used in) provided by discontinued operations	(3,971		)	—			499			(3,472		)
Effect of exchange rate changes on cash and cash equivalents	—			(18		)	2,574			2,556
Net (decrease) increase in cash and cash equivalents	(44,147		)	—			89,971			45,824
Cash and cash equivalents at beginning of period	545,222			—			158,931			704,153
Cash and cash equivalents at end of period	$	501,075		$	—		$	248,902		$	749,977