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, 2016 and 2015 and for the years ended December 31, 2016, 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 December 31, 2016:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			IAC Consolidated
	(In thousands)
Cash and cash equivalents	$	552,699	$	—	$	776,488	$	—		$	1,329,187
Marketable securities	89,342		—		—		—			89,342
Accounts receivable, net	—		90,807		129,331		—			220,138
Other current assets	71,152		30,515		102,401		—			204,068
Intercompany receivables	—		735,108		1,047,757		(1,782,865		)	—
Property and equipment, net	4,350		178,806		123,092		—			306,248
Goodwill	—		521,740		1,402,312		—			1,924,052
Intangible assets, net	—		83,179		272,272		—			355,451
Investment in subsidiaries	3,659,570		557,802		—		(4,217,372		)	—
Other non-current assets	52,228		111,037		169,595		(115,473		)	217,387
Total assets	$	4,429,341	$	2,308,994	$	4,023,248	$	(6,115,710	)	$	4,645,873

Current portion of long-term debt	$	20,000	$	—	$	—	$	—		$	20,000
Accounts payable, trade	2,697		38,283		21,883		—			62,863
Other current liabilities	42,159		120,279		468,087		—			630,525
Long-term debt, net of current portion	405,991		—		1,176,493		—			1,582,484
Income taxes payable	—		3,470		30,274		(216		)	33,528
Intercompany liabilities	1,782,865		—		—		(1,782,865		)	—
Other long-term liabilities	306,407		22,714		59,112		(115,257		)	272,976
Redeemable noncontrolling interests	—		—		32,827		—			32,827
IAC shareholders' equity	1,869,222		2,124,248		2,093,124		(4,217,372		)	1,869,222
Noncontrolling interests	—		—		141,448		—			141,448
Total liabilities and shareholders' equity	$	4,429,341	$	2,308,994	$	4,023,248	$	(6,115,710	)	$	4,645,873

Balance sheet at December 31, 2015:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			IAC Consolidated
	(In thousands)
Cash and cash equivalents	$	1,073,053	$	—	$	408,394	$	—		$	1,481,447
Marketable securities	27,578		—		11,622		—			39,200
Accounts receivable, net	33		115,280		134,764		—			250,077
Other current assets	30,813		46,128		97,345		—			174,286
Intercompany receivables	—		637,324		963,146		(1,600,470		)	—
Property and equipment, net	4,432		198,890		99,495		—			302,817
Goodwill	—		776,569		1,468,795		—			2,245,364
Intangible assets, net	—		135,817		305,011		—			440,828
Investment in subsidiaries	3,128,765		466,601		—		(3,595,366		)	—
Other non-current assets	84,368		11,258		174,038		(14,992		)	254,672
Total assets	$	4,349,042	$	2,387,867	$	3,662,610	$	(5,210,828	)	$	5,188,691

Current portion of long-term debt	$	—	$	—	$	40,000	$	—		$	40,000
Accounts payable, trade	4,711		42,104		40,068		—			86,883
Other current liabilities	62,833		140,077		438,753		—			641,663
Long-term debt, net of current portion	550,083		—		1,176,871		—			1,726,954
Income taxes payable	152		3,435		30,105		—			33,692
Intercompany liabilities	1,600,470		—		—		(1,600,470		)	—
Other long-term liabilities	326,267		18,160		83,848		(14,992		)	413,283
Redeemable noncontrolling interests	—		—		30,391		—			30,391
IAC shareholders' equity	1,804,526		2,184,091		1,411,275		(3,595,366		)	1,804,526
Noncontrolling interests	—		—		411,299		—			411,299
Total liabilities and shareholders' equity	$	4,349,042	$	2,387,867	$	3,662,610	$	(5,210,828	)	$	5,188,691

Statement of operations for the year ended December 31, 2016:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	1,381,525		$	1,771,568		$	(13,211	)	$	3,139,882
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	859			302,293			452,990			(412		)	755,730
Selling and marketing expense	2,353			692,953			564,720			(12,929		)	1,247,097
General and administrative expense	89,583			158,781			281,952			130			530,446
Product development expense	4,807			83,585			124,373			—			212,765
Depreciation	1,610			31,366			38,700			—			71,676
Amortization of intangibles	—			41,157			38,269			—			79,426
Goodwill impairment	—			253,245			22,122			—			275,367
Total operating costs and expenses	99,212			1,563,380			1,523,126			(13,211		)	3,172,507
Operating (loss) income	(99,212		)	(181,855		)	248,442			—			(32,625		)
Equity in earnings (losses) of unconsolidated affiliates	49,536			(23,573		)	—			(25,963		)	—
Interest expense	(26,876		)	—			(82,234		)	—			(109,110		)
Other (expense) income, net	(2,059		)	10,040			52,480			—			60,461
(Loss) earnings from continuing operations before income taxes	(78,611		)	(195,388		)	218,688			(25,963		)	(81,274		)
Income tax benefit (provision)	37,142			60,504			(32,712		)	—			64,934
(Loss) earnings from continuing operations	(41,469		)	(134,884		)	185,976			(25,963		)	(16,340		)
Earnings from discontinued operations, net of tax	189			—			9			(9		)	189
Net (loss) earnings	(41,280		)	(134,884		)	185,985			(25,972		)	(16,151		)
Net earnings attributable to noncontrolling interests	—			—			(25,129		)	—			(25,129		)
Net (loss) earnings attributable to IAC shareholders	$	(41,280	)	$	(134,884	)	$	160,856		$	(25,972	)	$	(41,280	)
Comprehensive (loss) income attributable to IAC shareholders	$	(76,431	)	$	(115,899	)	$	114,376		$	1,523		$	(76,431	)

Statement of operations for the year ended December 31, 2015:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	1,635,345		$	1,605,597		$	(10,009	)	$	3,230,933
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	720			334,931			443,700			(1,190		)	778,161
Selling and marketing expense	3,210			823,722			530,221			(8,860		)	1,348,293
General and administrative expense	93,090			151,282			267,642			41			512,055
Product development expense	4,311			86,945			105,367			—			196,623
Depreciation	1,918			27,276			33,011			—			62,205
Amortization of intangibles	—			102,622			37,330			—			139,952
Goodwill impairment	—			14,056			—			—			14,056
Total operating costs and expenses	103,249			1,540,834			1,417,271			(10,009		)	3,051,345
Operating (loss) income	(103,249		)	94,511			188,326			—			179,588
Equity in earnings of unconsolidated affiliates	215,092			18,137			—			(233,229		)	—
Interest expense	(49,405		)	(6,130		)	(18,101		)	—			(73,636		)
Other (expense) income, net	(3,201		)	27,903			12,219			—			36,921
Earnings from continuing operations before income taxes	59,237			134,421			182,444			(233,229		)	142,873
Income tax benefit (provision)	60,218			(47,280		)	(42,454		)	—			(29,516		)
Earnings from continuing operations	119,455			87,141			139,990			(233,229		)	113,357
Earnings (loss) from discontinued operations, net of tax	17			—			(12		)	12			17
Net earnings	119,472			87,141			139,978			(233,217		)	113,374
Net loss attributable to noncontrolling interests	—			—			6,098			—			6,098
Net earnings attributable to IAC shareholders	$	119,472		$	87,141		$	146,076		$	(233,217	)	$	119,472
Comprehensive income attributable to IAC shareholders	$	55,069		$	83,664		$	80,248		$	(163,912	)	$	55,069

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



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	1,637,345		$	1,484,041		$	(11,839	)	$	3,109,547
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	998			414,255			447,704			(2,753		)	860,204
Selling and marketing expense	2,138			698,689			457,081			(8,303		)	1,149,605
General and administrative expense	105,221			123,596			204,507			45			433,369
Product development expense	6,496			77,492			85,400			(828		)	168,560
Depreciation	1,426			25,670			34,060			—			61,156
Amortization of intangibles	—			31,863			26,063			—			57,926
Total operating costs and expenses	116,279			1,371,565			1,254,815			(11,839		)	2,730,820
Operating (loss) income	(116,279		)	265,780			229,226			—			378,727
Equity in earnings of unconsolidated affiliates	257,714			3,369			—			(261,083		)	—
Interest expense	(51,988		)	(4,187		)	(139		)	—			(56,314		)
Other (expense) income, net	(1,444		)	6,381			(57,421		)	—			(52,484		)
Earnings from continuing operations before income taxes	88,003			271,343			171,666			(261,083		)	269,929
Income tax benefit (provision)	152,197			(104,606		)	(82,963		)	—			(35,372		)
Earnings from continuing operations	240,200			166,737			88,703			(261,083		)	234,557
Earnings from discontinued operations, net of tax	174,673			—			570			(570		)	174,673
Net earnings	414,873			166,737			89,273			(261,653		)	409,230
Net loss attributable to noncontrolling interests	—			—			5,643			—			5,643
Net earnings attributable to IAC shareholders	$	414,873		$	166,737		$	94,916		$	(261,653	)	$	414,873
Comprehensive income attributable to IAC shareholders	$	340,219		$	158,538		$	23,409		$	(181,947	)	$	340,219

Statement of cash flows for the year ended December 31, 2016:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(62,686	)	$	203,563		$	203,264		$	—		$	344,141
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			—			(18,403		)	—			(18,403		)
Capital expenditures	(479		)	(19,317		)	(58,243		)	—			(78,039		)
Investments in time deposits	—			—			(87,500		)	—			(87,500		)
Proceeds from maturities of time deposits	—			—			87,500			—			87,500
Proceeds from maturities and sales of marketable debt securities	252,369			—			—			—			252,369
Purchases of marketable debt securities	(313,943		)	—			—			—			(313,943		)
Purchases of investments	—			—			(12,565		)	—			(12,565		)
Net proceeds from the sale of businesses and investments	73,843			1,779			96,606			—			172,228
Intercompany	(215,711		)	—			—			215,711			—
Other, net	126			643			10,446			—			11,215
Net cash (used in) provided by investing activities attributable to continuing operations	(203,795		)	(16,895		)	17,841			215,711			12,862
Cash flows from financing activities attributable to continuing operations:
Principal payments on Match Group Term Loan	—			—			(450,000		)	—			(450,000		)
Proceeds from Match Group 2016 Senior Notes offering	—			—			400,000			—			400,000
Principal payments on IAC debt, including redemptions and repurchases of Senior Notes	(126,409		)	—			—			—			(126,409		)
Debt issuance costs	—			—			(7,811		)	—			(7,811		)
Purchase of treasury stock	(308,948		)	—			—			—			(308,948		)
Issuance of IAC common stock pursuant to stock-based awards, net of withholding taxes	(895		)	—			—			—			(895		)
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes	—			—			9,548			—			9,548
Purchase of noncontrolling interests	(1,400		)	—			(1,340		)	—			(2,740		)
Acquisition-related contingent consideration payments	—			(351		)	(1,829		)	—			(2,180		)
Funds held in escrow for MyHammer tender offer	—			—			(10,548		)	—			(10,548		)
Intercompany	184,233			(184,233		)	215,711			(215,711		)	—
Other, net	(454		)	(2,084		)	(308		)	—			(2,846		)
Net cash (used in) provided by financing activities attributable to continuing operations	(253,873		)	(186,668		)	153,423			(215,711		)	(502,829		)
Total cash (used in) provided by continuing operations	(520,354		)	—			374,528			—			(145,826		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(6,434		)	—			(6,434		)
Net (decrease) increase in cash and cash equivalents	(520,354		)	—			368,094			—			(152,260		)
Cash and cash equivalents at beginning of period	1,073,053			—			408,394			—			1,481,447
Cash and cash equivalents at end of period	$	552,699		$	—		$	776,488		$	—		$	1,329,187

Statement of cash flows for the year ended December 31, 2015:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(121,193	)	$	258,582		$	268,434		$	405,823
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(6,078		)	(611,324		)	(617,402		)
Capital expenditures	(1,332		)	(21,905		)	(38,812		)	(62,049		)
Proceeds from maturities and sales of marketable debt securities	218,462			—			—			218,462
Purchases of marketable debt securities	(93,134		)	—			—			(93,134		)
Purchases of investments	(6,978		)	—			(27,492		)	(34,470		)
Net proceeds from the sale of investments and business	1,277			—			8,136			9,413
Other, net	3,613			385			(7,539		)	(3,541		)
Net cash provided by (used in) investing activities attributable to continuing operations	121,908			(27,598		)	(677,031		)	(582,721		)
Cash flows from financing activities attributable to continuing operations:
Borrowings under Match Group Term Loan	—			—			788,000			788,000
Principal payment on Liberty Bond	—			(80,000		)	—			(80,000		)
Debt issuance costs	(1,876		)	—			(17,174		)	(19,050		)
Fees and expenses related to note exchange	—			—			(6,954		)	(6,954		)
Proceeds from Match Group IPO, net of fees and expenses	—			—			428,789			428,789
Purchase of treasury stock	(200,000		)	—			—			(200,000		)
Dividends	(113,196		)	—			—			(113,196		)
Issuance of IAC common stock pursuant to stock-based awards, net of withholding taxes	(38,418		)	—			—			(38,418		)
Repurchase of stock-based awards	—			—			(23,431		)	(23,431		)
Purchase of noncontrolling interests	—			—			(32,207		)	(32,207		)
Acquisition-related contingent consideration payments	—			(240		)	(5,510		)	(5,750		)
Intercompany	683,571			(150,744		)	(532,827		)	—
Other, net	(19,834		)	—			441			(19,393		)
Net cash provided by (used in) financing activities attributable to continuing operations	310,247			(230,984		)	599,127			678,390
Total cash provided by continuing operations	310,962			—			190,530			501,492
Total cash used in discontinued operations	(140		)	—			(12		)	(152		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(10,298		)	(10,298		)
Net increase in cash and cash equivalents	310,822			—			180,220			491,042
Cash and cash equivalents at beginning of period	762,231			—			228,174			990,405
Cash and cash equivalents at end of period	$	1,073,053		$	—		$	408,394		$	1,481,447

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	$	(80,559	)	$	329,671		$	219,893		$	469,005
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(97,463		)	(161,928		)	(259,391		)
Capital expenditures	(1,843		)	(26,640		)	(28,750		)	(57,233		)
Proceeds from maturities and sales of marketable debt securities	21,644			—			—			21,644
Purchases of marketable debt securities	(175,826		)	—			—			(175,826		)
Purchases of investments	(4,800		)	(2,087		)	(17,447		)	(24,334		)
Net proceeds from the sale of investments and assets	—			—			58,388			58,388
Other, net	(2,000		)	11			(1,053		)	(3,042		)
Net cash used in investing activities attributable to continuing operations	(162,825		)	(126,179		)	(150,790		)	(439,794		)
Cash flows from financing activities attributable to continuing operations:
Debt issuance costs	(383		)	—			—			(383		)
Dividends	(97,338		)	—			—			(97,338		)
Issuance of IAC common stock pursuant to stock-based awards, net of withholding taxes	1,609			—			—			1,609
Purchase of noncontrolling interests	—			—			(33,165		)	(33,165		)
Acquisition-related contingent consideration payments	—			(406		)	(7,703		)	(8,109		)
Intercompany	321,192			(201,802		)	(119,390		)	—
Other, net	—			(1,310		)	12,759			11,449
Net cash provided by (used in) financing activities attributable to continuing operations	225,080			(203,518		)	(147,499		)	(125,937		)
Total cash used in continuing operations	(18,304		)	(26		)	(78,396		)	(96,726		)
Total cash used in discontinued operations	(116		)	—			(29		)	(145		)
Effect of exchange rate changes on cash and cash equivalents	—			26			(13,194		)	(13,168		)
Net decrease in cash and cash equivalents	(18,420		)	—			(91,619		)	(110,039		)
Cash and cash equivalents at beginning of period	780,651			—			319,793			1,100,444
Cash and cash equivalents at end of period	$	762,231		$	—		$	228,174		$	990,405