GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

The 2013 and 2012 Senior Notes are unconditionally guaranteed, jointly and severally, by certain domestic subsidiaries that are 100% owned by the Company. The following tables present condensed consolidating financial information at June 30, 2015 and December 31, 2014 and for the three and six months ended June 30, 2015 and 2014 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 June 30, 2015:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Total Eliminations			IAC Consolidated
	(In thousands)
Cash and cash equivalents	$	431,731	$	4,121	$	220,557	$	—		$	656,409
Marketable securities	232,917		—		606		—			233,523
Accounts receivable, net	4		132,223		90,879		—			223,106
Other current assets	47,233		97,670		69,692		(4,871		)	209,724
Intercompany receivables	—		1,635,189		942,583		(2,577,772		)	—
Property and equipment, net	4,867		228,061		64,230		—			297,158
Goodwill	—		1,250,801		528,029		—			1,778,830
Intangible assets, net	—		313,275		158,807		—			472,082
Investment in subsidiaries	4,971,322		932,210		—		(5,903,532		)	—
Other non-current assets	69,644		20,715		115,405		(1,538		)	204,226
Total assets	$	5,757,718	$	4,614,265	$	2,190,788	$	(8,487,713	)	$	4,075,058

Current portion of long-term debt	$	—	$	80,000	$	—	$	—		$	80,000
Accounts payable, trade	3,078		57,265		19,091		—			79,434
Other current liabilities	32,661		320,261		203,239		(738		)	555,423
Long-term debt, net of current portion	1,000,000		—		—		—			1,000,000
Income taxes payable	892		4,829		19,047		—			24,768
Intercompany liabilities	2,577,772		—		—		(2,577,772		)	—
Other long-term liabilities	327,929		100,370		69,242		(5,671		)	491,870
Redeemable noncontrolling interests	—		—		28,177		—			28,177
IAC shareholders' equity	1,815,386		4,051,540		1,851,992		(5,903,532		)	1,815,386
Total liabilities and shareholders' equity	$	5,757,718	$	4,614,265	$	2,190,788	$	(8,487,713	)	$	4,075,058

Balance sheet at December 31, 2014:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Total 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

Statement of operations for the three months ended June 30, 2015:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	586,067		$	188,460		$	(3,395	)	$	771,132
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	294			117,383			65,792			(193		)	183,276
Selling and marketing expense	1,010			264,647			56,949			(3,209		)	319,397
General and administrative expense	33,942			66,336			29,064			7			129,349
Product development expense	2,330			30,996			13,104			—			46,430
Depreciation	426			11,110			3,964			—			15,500
Amortization of intangibles	—			6,226			8,185			—			14,411
Total operating costs and expenses	38,002			496,698			177,058			(3,395		)	708,363
Operating (loss) income	(38,002		)	89,369			11,402			—			62,769
Equity in earnings of unconsolidated affiliates	70,523			13,353			—			(83,876		)	—
Interest expense	(12,992		)	(2,211		)	(11		)	—			(15,214		)
Other (expense) income, net	(7,506		)	17,787			(11,919		)	—			(1,638		)
Earnings (loss) from continuing operations before income taxes	12,023			118,298			(528		)	(83,876		)	45,917
Income tax benefit (provision)	47,435			(40,470		)	5,003			—			11,968
Earnings from continuing operations	59,458			77,828			4,475			(83,876		)	57,885
(Loss) earnings from discontinued operations, net of tax	(153		)	—			3			(3		)	(153		)
Net earnings	59,305			77,828			4,478			(83,879		)	57,732
Net loss attributable to noncontrolling interests	—			—			1,573			—			1,573
Net earnings attributable to IAC shareholders	$	59,305		$	77,828		$	6,051		$	(83,879	)	$	59,305
Comprehensive income attributable to IAC shareholders	$	72,283		$	79,129		$	15,106		$	(94,235	)	$	72,283

Statement of operations for the three months ended June 30, 2014:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	556,162		$	203,497		$	(3,344	)	$	756,315
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	383			126,162			84,872			(687		)	210,730
Selling and marketing expense	619			220,152			54,158			(2,439		)	272,490
General and administrative expense	26,609			48,459			34,816			13			109,897
Product development expense	1,705			26,305			11,066			(231		)	38,845
Depreciation	312			9,224			5,721			—			15,257
Amortization of intangibles	—			9,659			3,747			—			13,406
Total operating costs and expenses	29,628			439,961			194,380			(3,344		)	660,625
Operating (loss) income	(29,628		)	116,201			9,117			—			95,690
Equity in earnings of unconsolidated affiliates	8,264			5,297			—			(13,561		)	—
Interest expense	(12,985		)	(1,052		)	(9		)	—			(14,046		)
Other income (expense), net	6,537			(13,834		)	(62,453		)	—			(69,750		)
(Loss) earnings from continuing operations before income taxes	(27,812		)	106,612			(53,345		)	(13,561		)	11,894
Income tax benefit (provision)	10,684			(39,785		)	(788		)	—			(29,889		)
(Loss) earnings from continuing operations	(17,128		)	66,827			(54,133		)	(13,561		)	(17,995		)
Loss from discontinued operations, net of tax	(868		)	—			(27		)	27			(868		)
Net (loss) earnings	(17,996		)	66,827			(54,160		)	(13,534		)	(18,863		)
Net loss attributable to noncontrolling interests	—			—			867			—			867
Net (loss) earnings attributable to IAC shareholders	$	(17,996	)	$	66,827		$	(53,293	)	$	(13,534	)	$	(17,996	)
Comprehensive (loss) income attributable to IAC shareholders	$	(20,205	)	$	66,163		$	(55,879	)	$	(10,284	)	$	(20,205	)

Statement of operations for the six months ended June 30, 2015:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	1,180,868		$	368,820		$	(6,044	)	$	1,543,644
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	539			237,124			137,556			(390		)	374,829
Selling and marketing expense	2,065			553,272			127,345			(5,619		)	677,063
General and administrative expense	58,006			132,089			54,083			(35		)	244,143
Product development expense	4,507			62,130			25,050			—			91,687
Depreciation	827			22,690			7,551			—			31,068
Amortization of intangibles	—			12,496			14,470			—			26,966
Total operating costs and expenses	65,944			1,019,801			366,055			(6,044		)	1,445,756
Operating (loss) income	(65,944		)	161,067			2,765			—			97,888
Equity in earnings of unconsolidated affiliates	124,647			17,049			—			(141,696		)	—
Interest expense	(25,982		)	(3,257		)	(39		)	—			(29,278		)
Other (expense) income, net	(16,859		)	29,179			(6,970		)	—			5,350
Earnings (loss) from continuing operations before income taxes	15,862			204,038			(4,244		)	(141,696		)	73,960
Income tax benefit (provision)	69,876			(72,266		)	8,178			—			5,788
Earnings from continuing operations	85,738			131,772			3,934			(141,696		)	79,748
(Loss) earnings from discontinued operations, net of tax	(28		)	—			3			(3		)	(28		)
Net earnings	85,710			131,772			3,937			(141,699		)	79,720
Net loss attributable to noncontrolling interests	—			—			5,990			—			5,990
Net earnings attributable to IAC shareholders	$	85,710		$	131,772		$	9,927		$	(141,699	)	$	85,710
Comprehensive income (loss) attributable to IAC shareholders	$	43,115		$	127,288		$	(37,762	)	$	(89,526	)	$	43,115

Statement of operations for the six months ended June 30, 2014:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	1,102,488		$	400,404		$	(6,330	)	$	1,496,562
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	355			255,463			165,793			(1,647		)	419,964
Selling and marketing expense	811			456,493			117,922			(4,137		)	571,089
General and administrative expense	49,055			94,134			61,771			26			204,986
Product development expense	3,176			53,401			21,656			(572		)	77,661
Depreciation	641			18,785			10,649			—			30,075
Amortization of intangibles	—			18,660			6,725			—			25,385
Total operating costs and expenses	54,038			896,936			384,516			(6,330		)	1,329,160
Operating (loss) income	(54,038		)	205,552			15,888			—			167,402
Equity in earnings of unconsolidated affiliates	62,561			5,541			—			(68,102		)	—
Interest expense	(25,970		)	(2,094		)	(46		)	—			(28,110		)
Other income (expense), net	16,222			(24,361		)	(63,569		)	—			(71,708		)
(Loss) earnings from continuing operations before income taxes	(1,225		)	184,638			(47,727		)	(68,102		)	67,584
Income tax benefit (provision)	20,796			(69,729		)	(2,341		)	—			(51,274		)
Earnings (loss) from continuing operations	19,571			114,909			(50,068		)	(68,102		)	16,310
Loss from discontinued operations, net of tax	(1,682		)	—			(40		)	40			(1,682		)
Net earnings (loss)	17,889			114,909			(50,108		)	(68,062		)	14,628
Net loss attributable to noncontrolling interests	—			—			3,261			—			3,261
Net earnings (loss) attributable to IAC shareholders	$	17,889		$	114,909		$	(46,847	)	$	(68,062	)	$	17,889
Comprehensive income (loss) attributable to IAC shareholders	$	21,029		$	114,629		$	(45,764	)	$	(68,865	)	$	21,029

Statement of cash flows for the six months ended June 30, 2015:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(124,420	)	$	232,853		$	(22,654	)	$	85,779
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(3,675		)	(39,611		)	(43,286		)
Capital expenditures	(988		)	(18,242		)	(7,586		)	(26,816		)
Proceeds from maturities and sales of marketable debt securities	14,613			—			—			14,613
Purchases of marketable debt securities	(93,134		)	—			—			(93,134		)
Purchases of long-term investments	—			—			(12,840		)	(12,840		)
Other, net	3,613			(1,086		)	6,072			8,599
Net cash used in investing activities attributable to continuing operations	(75,896		)	(23,003		)	(53,965		)	(152,864		)
Cash flows from financing activities attributable to continuing operations:
Purchase of treasury stock	(200,000		)	—			—			(200,000		)
Dividends	(56,729		)	—			—			(56,729		)
Issuance of common stock, net of withholding taxes	(20,656		)	—			—			(20,656		)
Excess tax benefits from stock-based awards	36,334			—			131			36,465
Purchase of noncontrolling interests	—			—			(15,338		)	(15,338		)
Acquisition-related contingent consideration payments	—			(195		)	(5,510		)	(5,705		)
Intercompany	107,102			(206,557		)	99,455			—
Other, net	166			—			264			430
Net cash (used in) provided by financing activities attributable to continuing operations	(133,783		)	(206,752		)	79,002			(261,533		)
Total cash (used in) provided by continuing operations	(334,099		)	3,098			2,383			(328,618		)
Total cash (used in) provided by discontinued operations	(246		)	—			3			(243		)
Effect of exchange rate changes on cash and cash equivalents	—			2			(5,137		)	(5,135		)
Net (decrease) increase in cash and cash equivalents	(334,345		)	3,100			(2,751		)	(333,996		)
Cash and cash equivalents at beginning of period	766,076			1,021			223,308			990,405
Cash and cash equivalents at end of period	$	431,731		$	4,121		$	220,557		$	656,409

Statement of cash flows for the six months ended June 30, 2014:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(38,576	)	$	193,388		$	(6,041	)	$	148,771
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(88,205		)	(15,175		)	(103,380		)
Capital expenditures	(2,390		)	(16,477		)	(7,690		)	(26,557		)
Proceeds from maturities and sales of marketable debt securities	998			—			—			998
Purchases of marketable debt securities	(78,380		)	—			—			(78,380		)
Purchases of long-term investments	(3,000		)	(6,761		)	(4,940		)	(14,701		)
Other, net	—			11			2,176			2,187
Net cash used in investing activities attributable to continuing operations	(82,772		)	(111,432		)	(25,629		)	(219,833		)
Cash flows from financing activities attributable to continuing operations:
Dividends	(40,086		)	—			—			(40,086		)
Issuance of common stock, net of withholding taxes	(13,823		)	—			—			(13,823		)
Excess tax benefits from stock-based awards	22,116			—			10,773			32,889
Purchase of noncontrolling interests	—			(30,000		)	—			(30,000		)
Funds returned from escrow for Meetic tender offer	—			—			12,354			12,354
Acquisition-related contingent consideration payments	—			(257		)	(7,373		)	(7,630		)
Intercompany	104,410			(51,723		)	(52,687		)	—
Other, net	(383		)	—			242			(141		)
Net cash provided by (used in) financing activities attributable to continuing operations	72,234			(81,980		)	(36,691		)	(46,437		)
Total cash used in continuing operations	(49,114		)	(24		)	(68,361		)	(117,499		)
Total cash used in discontinued operations	(116		)	—			(41		)	(157		)
Effect of exchange rate changes on cash and cash equivalents	—			24			4,514			4,538
Net decrease in cash and cash equivalents	(49,230		)	—			(63,888		)	(113,118		)
Cash and cash equivalents at beginning of period	782,022			—			318,422			1,100,444
Cash and cash equivalents at end of period	$	732,792		$	—		$	254,534		$	987,326