Delaware (State or other jurisdiction of incorporation or organization) | 59-2712887 (I.R.S. Employer Identification No.) | |
555 West 18th Street, New York, New York (Address of Registrant's principal executive offices) | 10011 (Zip Code) |
Title of each class | Name of exchange on which registered | |
Common Stock, par value $0.001 | The Nasdaq Stock Market LLC (Nasdaq Global Select Market) |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o(Do not check if a smaller reporting company) | Smaller reporting company o | Emerging growth company o |
Common Stock | 76,869,350 | ||
Class B Common Stock | 5,789,499 | ||
Total | 82,658,849 |
Page Number | ||
• | our ability to continue to increase consumer acceptance and adoption of online dating products, including in emerging markets and other parts of the world where the stigma is only beginning to erode; |
• | continued growth in Internet access and smart phone adoption in certain regions of the world, particularly emerging markets; |
• | the continued strength of Match Group’s brands; |
• | the breadth and depth of Match Group’s active user communities relative to those of its competitors; |
• | our ability to evolve our dating products in response to competitor offerings, user requirements, social trends and the technological landscape; |
• | our ability to efficiently acquire new users for our dating products; |
• | our ability to continue to optimize our monetization strategies; and |
• | the design and functionality of our dating products. |
• | the size, quality, diversity and stability of our network of Marketplace service professionals and the breadth of our online directory listings; |
• | the functionality of our websites and mobile applications and the attractiveness of their features and our products and services generally to consumers and service professionals, as well as our continued ability to introduce new products and services that resonate with consumers and service professionals generally; |
• | our ability to continue to build and maintain awareness of, and trust in and loyalty to, our various brands, particularly our Angie’s List and HomeAdvisor brands; |
• | our ability to consistently generate service requests through the Marketplace and leads through our online directories that convert into revenue for our service professionals in a cost-effective manner; and |
• | the quality and consistency of our service professional pre-screening processes and ongoing quality control efforts, as well as the reliability, depth and timeliness of customer ratings and reviews. |
• | the quality of our technology platform, premium offerings, live streaming tools and services and user (creator and viewer) experience; |
• | whether our premium offerings and live streaming tools and services resonate with creators; |
• | the ability of creators to distribute Vimeo-hosted content across third party platforms and the prominence and visibility of such content within search engine results and social media platforms; |
• | the recognition and strength of the Vimeo brand relative to those of our competitors; and |
• | our ability to drive new subscribers to our platform through various forms of direct marketing. |
• | the quality and diversity of our content relative to that of our competitors and the third parties to whom we license our content, as well as the quality of the services provided by licensees of our content; |
• | our continued ability to create new content that resonates with licensees and viewers; and |
• | our ability to sell integration and sponsorship opportunities for our content. |
• | the quality and diversity of our films relative to those of our competitors; |
• | our continued ability to retain the services of quality actors, directors, producers and other creative and technical personnel, as well as production financing; and |
• | our continued ability to create new films that resonate with viewers and distribute them to a broad viewing audience through theaters and video-on-demand channels. |
• | Consumer, which develops and distributes downloadable desktop and mobile applications and includes Apalon, which houses our mobile applications, and SlimWare; and |
• | Partnerships, which includes our business-to-business partnership operations. |
• | create browser extensions and other applications that resonate with consumers (which requires that we continue to bundle attractive features, content and services, some of which may be owned by third parties, with quality search services); |
• | maintain industry-leading monetization solutions for our applications; |
• | differentiate our browser extensions and other applications from those of our competitors (primarily through providing customized browser tab pages and access to multiple search and other services through our browser extensions); |
• | secure cost-effective distribution arrangements with third parties; and |
• | market and distribute our browser extensions and other applications directly to consumers in a cost-effective manner. |
• | our Premium Brands business, which includes Dotdash (formerly About.com), Dictionary.com, Investopedia and The Daily Beast; and |
• | our Ask & Other business, which primarily includes Ask Media Group, CityGrid and, for periods prior to its sale on June 30, 2016, ASKfm. |
• | Dotdash, which operates a network of digital brands that provide reliable information and inspiration in select vertical categories, including The Spruce (Home), The Balance (Money), Verywell (Health), Lifewire (Tech), TripSavvy (Travel) and ThoughtCo (Lifelong Learning); |
• | Dictionary.com, which primarily provides online and mobile dictionary, thesaurus and reference services; |
• | Investopedia, a resource for investment and personal finance education and information, as well as online courses through Investopedia Academy for a fee; and |
• | The Daily Beast, a website dedicated to news, commentary, culture and entertainment that curates and publishes existing and original online content from its own roster of contributors in the United States. |
• | Ask Media Group, a collection of websites (including Ask.com) that provide general search services and information; and |
• | CityGrid, an advertising network that integrates local content and advertising for distribution to affiliated and third party publishers across web and mobile platforms. |
• | the quality of the content and features on our various Publishing platforms (websites and mobile applications), and the attractiveness of the services provided by these platforms generally, relative to those of our competitors; |
• | our ability to successfully generate and acquire content (or the rights thereto) in a cost-effective manner; |
• | the relevance and authority of the content and search results featured on our various Publishing platforms; and |
• | our ability to successfully market the content and search services offered by our Publishing businesses in a cost-effective manner. |
• | limit our respective abilities to obtain additional financing to fund working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes; |
• | limit our respective abilities to use operating cash flow in other areas of our respective businesses because we must dedicate a substantial portion of these funds to service indebtedness; |
• | limit our respective abilities to compete with other companies who are not as highly leveraged; |
• | restrict any one or more of us from making strategic acquisitions, developing properties or exploiting business opportunities; |
• | restrict the way in which one or more of us conducts business because of financial and operating covenants in the agreements governing our indebtedness; |
• | expose one or more of us to potential events of default under financial and operating covenants contained in our respective debt instruments, which if not cured or waived, could have a material adverse effect on our business, financial condition and operating results; |
• | increase our respective vulnerabilities to a downturn in general economic conditions or in pricing of our various products and services; and |
• | limit our respective abilities to react to changing market conditions in the various industries in which we do business. |
• | our respective future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control; and |
• | the future ability of IAC and Match Group to borrow under our respective revolving credit agreements, as well as the future ability of ANGI Homeservices to add one or more incremental term loans or revolving facilities under its credit agreement, the availability of which will depend on, among other things, compliance with the covenants in the agreements governing such indebtedness. |
• | properly value prospective acquisitions, especially those with limited operating histories; |
• | successfully integrate the operations, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with our existing operations and systems; |
• | successfully identify and realize potential synergies among acquired and existing businesses; |
• | retain or hire senior management and other key personnel at acquired businesses; and |
• | successfully manage acquisition‑related strain on the management, operations and financial resources of IAC and its businesses and/or acquired businesses. |
• | operational and compliance challenges caused by distance, language and cultural differences; |
• | difficulties in staffing and managing international operations; |
• | differing levels of social and technological acceptance of our products and services or lack of acceptance of them generally; |
• | foreign currency fluctuations; |
• | restrictions on the transfer of funds among countries and back to the United States and costs associated with repatriating funds to the United States; |
• | differing and potentially adverse tax laws; |
• | multiple, conflicting and changing laws, rules and regulations, and difficulties understanding and ensuring compliance with those laws by both our employees and our business partners, over whom we exert no control; |
• | competitive environments that favor local businesses; |
• | limitations on the level of intellectual property protection; and |
• | trade sanctions, political unrest, terrorism, war and epidemics or the threat of any of these events. |
High | Low | ||||||
Year Ended December 31, 2017 | |||||||
Fourth Quarter | $ | 137.86 | $ | 116.59 | |||
Third Quarter | 119.53 | 98.91 | |||||
Second Quarter | 107.98 | 72.84 | |||||
First Quarter | 77.46 | 64.69 | |||||
Year Ended December 31, 2016 | |||||||
Fourth Quarter | $ | 68.75 | $ | 60.39 | |||
Third Quarter | 64.00 | 55.41 | |||||
Second Quarter | 57.14 | 45.37 | |||||
First Quarter | 60.56 | 38.82 |
Year Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
Statement of Operations Data:(a) | |||||||||||||||||||
Revenue | $ | 3,307,239 | $ | 3,139,882 | $ | 3,230,933 | $ | 3,109,547 | $ | 3,022,987 | |||||||||
Earnings (loss) from continuing operations | 358,008 | (16,151 | ) | 113,374 | 234,557 | 281,799 | |||||||||||||
Earnings from discontinued operations (b) | — | — | — | 174,673 | 1,926 | ||||||||||||||
Net (earnings) loss attributable to noncontrolling interests | (53,084 | ) | (25,129 | ) | 6,098 | 5,643 | 2,059 | ||||||||||||
Net earnings (loss) attributable to IAC shareholders | 304,924 | (41,280 | ) | 119,472 | 414,873 | 285,784 | |||||||||||||
Earnings (loss) per share from continuing operations attributable to IAC shareholders: | |||||||||||||||||||
Basic | $ | 3.81 | $ | (0.52 | ) | $ | 1.44 | $ | 2.88 | $ | 3.40 | ||||||||
Diluted | $ | 3.18 | $ | (0.52 | ) | $ | 1.33 | $ | 2.71 | $ | 3.27 | ||||||||
Dividends declared per share | $ | — | $ | — | $ | 1.36 | $ | 1.16 | $ | 0.96 | |||||||||
December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||
Total assets | $ | 5,867,810 | $ | 4,645,873 | $ | 5,188,691 | $ | 4,241,421 | $ | 4,183,810 | |||||||||
Long-term debt: | |||||||||||||||||||
Current portion of long-term debt | 13,750 | 20,000 | 40,000 | — | — | ||||||||||||||
Long-term debt, net | 1,979,469 | 1,582,484 | 1,726,954 | 1,064,536 | 1,062,446 |
(a) | We recognized items that affected the comparability of results for the years 2017, 2016 and 2015, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." |
(b) | There were no discontinued operations for the three years ended December 31, 2017. For the year ended December 31, 2014, earnings from discontinued operations were due to the release of tax reserves related to the expiration of the statutes of limitations for federal income taxes for the years 2001 through 2009. |
• | Match Group - is the world's leading provider of dating products, operating a portfolio of brands, including Tinder, Match, PlentyOfFish and OkCupid. |
• | ANGI Homeservices - is the world's largest digital marketplace for home services, connecting millions of homeowners across the globe with home service professionals, and operates leading brands in eight countries, including HomeAdvisor and Angie's List. |
• | Video - consists of Vimeo, Electus, IAC Films and Daily Burn. |
• | Applications - consists of Consumer, which includes our direct-to-consumer downloadable desktop applications, Apalon, which houses our mobile operations, and SlimWare, which houses our downloadable desktop software and service operations; and Partnerships, which includes our business-to-business partnership operations. |
• | Publishing - consists of Premium Brands, which includes Dotdash, Dictionary.com, Investopedia and The Daily Beast; and Ask & Other, which primarily includes Ask Media Group, CityGrid and, for periods prior to its sale on June 30, 2016, ASKfm. |
• | Other - consists of The Princeton Review, ShoeBuy and PriceRunner, for periods prior to their sales on March 31, 2017, December 30, 2016 and March 18, 2016, respectively. |
• | North America - consists of the financial results and metrics associated with users located in the United States and Canada. |
• | International - consists of the financial results and metrics associated with users located outside of the United States and Canada. |
• | Direct Revenue - is revenue that is received directly from end users of its products and includes both subscription and à la carte revenue. |
• | Subscribers - are users who purchase a subscription to one of Match Group's products. Users who purchase only à la carte features are not included in Subscribers. |
• | Average Subscribers - is the number of Subscribers at the end of each day in the relevant measurement period divided by the number of calendar days in that period. |
• | Average Revenue per Subscriber (or "ARPU") - is Direct Revenue from Subscribers in the relevant measurement period (whether in the form of subscription or à la carte) divided by the Average Subscribers in such period and further divided by the number of calendar days in such period. Direct Revenue from users who are not Subscribers and have purchased only à la carte features is not included in ARPU. |
• | Marketplace (formerly HomeAdvisor Domestic) Revenue - reflects revenue from the HomeAdvisor domestic marketplace service, including consumer connection revenue for consumer matches and membership subscription revenue from service professionals. It excludes other North America operating subsidiaries within the segment. |
• | Marketplace (formerly HomeAdvisor Domestic) Service Requests - are fully completed and submitted domestic customer service requests on HomeAdvisor. |
• | Marketplace (formerly HomeAdvisor Domestic) Paying Service Professionals (or "Marketplace Paying SPs") - are the number of HomeAdvisor domestic service professionals that had an active membership and/or paid for consumer matches in the last month of the period. |
• | Vimeo ending subscribers - are the number of subscribers to Vimeo's SaaS video tools at the end of the period. |
• | Cost of revenue - consists primarily of traffic acquisition costs and includes (i) fees paid to Apple and Google related to the distribution and the facilitation of in-app purchases of product features and (ii) payments made to partners who distribute our Partnerships customized browser-based applications and who integrate our paid listings into their websites. These payments include amounts based on revenue share and other arrangements. Cost of revenue also includes production costs related to media produced by Electus and other businesses within our Video segment, hosting fees, compensation (including stock-based compensation expense) and other employee-related costs for personnel engaged in data center operations and Match Group customer service functions, credit card processing fees, content costs, and expenses associated with the operation of the Company's data centers. For periods prior to the sale of The Princeton Review and ShoeBuy, cost of revenue also includes rent and cost for teachers and tutors and cost of products sold, including shipping and handling costs, respectively. |
• | Selling and marketing expense - consists primarily of advertising expenditures, which include online marketing, including fees paid to search engines, social media sites and third parties that distribute our Consumer downloadable desktop applications, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to the Match Group and ANGI Homeservices brands, and compensation (including stock-based compensation expense) and other employee-related costs for personnel engaged in selling and marketing and sales support. |
• | General and administrative expense - consists primarily of compensation (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources, and customer service functions (except for Match Group which includes customer service costs within cost of revenue), fees for professional services, facilities costs, bad debt expense, software license and maintenance costs and acquisition-related contingent consideration fair value adjustments (described below). |
• | Product development expense - consists primarily of compensation (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology. |
• | Acquisition-related contingent consideration fair value adjustments - relate to the portion of the purchase price of certain acquisitions that is contingent upon the future operating performance of the acquired company. The amounts ultimately paid are generally dependent upon earnings performance and/or operating metrics as stipulated in the relevant purchase agreements. The fair value of the liability is estimated at the date of acquisition and adjusted each reporting period until the liability is settled. If the payment date of the liability is longer than one year, the amount is initially recorded net of a discount, which is amortized as an expense each period. In a period where the acquired company is expected to perform better than the previous estimate, the liability will be increased resulting in additional expense; and in a period when the acquired company is expected to perform worse than the previous estimate, the liability will be decreased resulting in income. The year-over-year impact can be significant, for example, if there is income in one period and expense in the other period. |
• | Exchangeable Notes - On October 2, 2017, a finance subsidiary of the Company issued $517.5 million aggregate principal of 0.875% Exchangeable Senior Notes due October 1, 2022, which notes are guaranteed by the Company and are exchangeable into shares of the Company's common stock. A portion of the proceeds were used to repay the outstanding balance of the 4.875% Senior Notes (described below). Interest is payable each April 1 and October 1, which commences on April 1, 2018. The outstanding balance of the Exchangeable Notes as of December 31, 2017 is $517.5 million. Each $1,000 of principal of the Exchangeable Notes is exchangeable for 6.5713 shares of the Company's common stock, which is equivalent to an exchange price of approximately $152.18 per share, subject to adjustment upon the occurrence of specified events. |
• | 4.75% Senior Notes - IAC's 4.75% Senior Notes due December 15, 2022, with interest payable each June 15 and December 15, a portion of which were exchanged for the Match Group 6.75% Senior Notes (described below) on November 16, 2015. The outstanding balance of the 4.75% Senior Notes as of December 31, 2017 is $34.9 million. |
• | 4.875% Senior Notes - The outstanding balance of $361.9 million was redeemed on November 30, 2017, using a portion of the proceeds from the Exchangeable Notes. |
• | Match Exchange Offer - Match Group exchanged $445 million of Match Group 6.75% Senior Notes for a substantially like amount of 4.75% Senior Notes on November 16, 2015. |
• | Match Group 6.75% Senior Notes - Match Group's 6.75% Senior Notes due December 15, 2022, with interest payable each June 15 and December 15. Match Group's 6.75% Senior Notes were issued in exchange for the 4.75% Senior Notes on November 16, 2015. The outstanding balance of $445.2 million was redeemed on December 17, 2017 with the proceeds from the Match Group 5.00% Senior Notes (described below) and cash on hand. |
• | Match Group Term Loan - a seven-year term loan entered into by Match Group on November 16, 2015 in the original amount of $800 million. During 2016, Match Group made $450 million of principal payments, $400 million of which was funded from proceeds of the 6.375% Senior Notes (described below). On August 14, 2017, the Match Group Term Loan was increased by $75 million to $425 million, repriced the outstanding balance at LIBOR plus 2.50% and reduced the LIBOR floor to 0.00%. The outstanding balance of the Match Group Term Loan as of December 31, 2017 is $425 million. The interest rate on the Match Group Term Loan at December 31, 2017 is 3.85%. |
• | Match Group 6.375% Senior Notes - Match Group's 6.375% Senior Notes due June 1, 2024, with interest payable each June 1 and December 1. The outstanding balance of the Match Group 6.375% Senior Notes as of December 31, 2017 is $400 million. |
• | Match Group 5.00% Senior Notes - Match Group's 5.00% Senior Notes due December 15, 2027, with interest payable each June 15 and December 15, which commences on June 15, 2018. The proceeds, along with cash on hand, were used to redeem the outstanding balance of the Match Group 6.75% Senior Notes. The outstanding balance of the Match Group 5.00% Senior Notes as of December 31, 2017 is $450 million. |
• | ANGI Homeservices Term Loan - a five-year term loan entered into by ANGI Homeservices on November 1, 2017 in the amount of $275 million. The ANGI Homeservices Term Loan currently bears interest at LIBOR plus 2.00%. The outstanding balance of the ANGI Homeservices Term Loan as of December 31, 2017 is $275 million. The interest rate on the ANGI Homeservices Term Loan at December 31, 2017 is 3.38%. |
• | Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") - is a non-GAAP financial measure. See "Principles of Financial Reporting" for the definition of Adjusted EBITDA. |
(i) | the sale of ASKfm on June 30, 2016 (reflected in the Publishing segment) |
(ii) | acquisitions in 2016 and 2015: |
• | MyHammer Holding AG ("MyHammer") on November 3, 2016 (reflected in the ANGI Homeservices segment) |
• | PlentyOfFish on October 28, 2015 (reflected in the Match Group segment); and |
• | Pairs (also known as Eureka) on April 24, 2015 (reflected in the Match Group segment). |
(iii) | costs of $4.9 million and $16.8 million in 2016 and 2015, respectively, related to the consolidation and streamlining of technology systems and European operations at the Match Group segment. This project was complete as of December 31, 2016. |
(iv) | restructuring charges in 2016 of $15.6 million and $2.6 million at the Publishing and Applications segments, respectively, to reduce costs in light of significant declines in revenue from the new Google contract, which was effective April 1, 2016, as well as declines from certain other legacy businesses. |
Years Ended December 31, | |||||||||||||||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Match Group | $ | 1,330,661 | $ | 212,551 | 19 | % | $ | 1,118,110 | $ | 208,405 | 23 | % | $ | 909,705 | |||||||||||
ANGI Homeservices | 736,386 | 237,496 | 48 | % | 498,890 | 137,689 | 38 | % | 361,201 | ||||||||||||||||
Video | 276,994 | 48,345 | 21 | % | 228,649 | 15,332 | 7 | % | 213,317 | ||||||||||||||||
Applications | 577,998 | (26,142 | ) | (4 | )% | 604,140 | (156,608 | ) | (21 | )% | 760,748 | ||||||||||||||
Publishing | 361,837 | (45,476 | ) | (11 | )% | 407,313 | (284,373 | ) | (41 | )% | 691,686 | ||||||||||||||
Other* | 23,980 | (259,385 | ) | (92 | )% | 283,365 | (11,456 | ) | (4 | )% | 294,821 | ||||||||||||||
Inter-segment elimination | (617 | ) | (32 | ) | (6 | )% | (585 | ) | (40 | ) | (7 | )% | (545 | ) | |||||||||||
Total | $ | 3,307,239 | $ | 167,357 | 5 | % | $ | 3,139,882 | $ | (91,051 | ) | (3 | )% | $ | 3,230,933 |
Years Ended December 31, | |||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||
(Dollars in thousands) | |||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | $651,008 | $(104,722) | (14)% | $755,730 | $(22,431) | (3)% | $778,161 | ||||||
As a percentage of revenue | 20% | 24% | 24% |
• | The Other decrease was due to the sales of ShoeBuy and The Princeton Review. |
• | The Publishing decrease was due primarily to reductions of $15.2 million in traffic acquisition costs driven by a decline in revenue at Ask & Other, $8.4 million in rent expense due to vacating a data center in the fourth quarter of 2016 and $6.5 million in content costs due primarily to Dotdash due, in part, to its vertical brand strategy which launched in the second quarter of 2016. |
• | The Applications decrease was due primarily to a reduction of $16.6 million in traffic acquisition costs driven by a decline in revenue at Partnerships and a decrease of $2.9 million in compensation due, in part, to the reductions in workforce in 2016. |
• | The Match Group increase was due primarily to increases of $75.4 million in in-app purchase fees and $5.9 million in hosting fees. The increases were due primarily to the growth at Tinder. |
• | The Video increase was due primarily to an increase in production costs at IAC Films related to the sales of The Meyerowitz Stories (New and Selected) and The Legacy of a Whitetail Deer Hunter and the release of Lady Bird in the current year period, the contribution from Livestream, which was acquired on October 18, 2017, and an increase of $2.6 million in hosting fees at Vimeo due to subscription growth, partially offset by lower production costs at Electus. |
• | The ANGI Homeservices increase was due primarily to the inclusion of expense of $3.7 million from Angie's List resulting from the Combination, an increase of $2.8 million in credit card processing fees due to higher revenue and an increase of $1.6 million in hosting fees, partially offset by a reduction in traffic acquisition costs of $0.4 million. |
• | The Applications decrease was due primarily to a reduction of $52.0 million in traffic acquisition costs driven by a decline in revenue at Partnerships. |
• | The Publishing decrease was due primarily to reductions of $40.0 million in traffic acquisition costs and $4.6 million in content costs driven by a decline in revenue at Ask & Other, partially offset by $9.2 million in restructuring charges in 2016 related to vacating a data center facility and severance costs in connection with a reduction in workforce. |
• | The Match Group increase was due primarily to a significant increase in in-app purchase fees across multiple brands, including Tinder, and the 2015 acquisitions of PlentyOfFish and Pairs. |
• | The Video increase was due primarily to a net increase in production costs at our media and video businesses and an increase in hosting fees related to Vimeo's subscription growth, increased video plays and expanded On Demand catalog. These increases were partially offset by a reduction in investment in content costs at Vimeo in 2016. |
• | The Other increase was due primarily to an increase in cost of products sold at ShoeBuy due to increased sales, partially offset by a mix shift to higher margin online products from in-person courses at The Princeton Review and the sale of PriceRunner. |
• | The ANGI Homeservices increase was due primarily to an increase of $1.9 million in credit card processing fees due to higher revenue and an increase of $0.6 million in traffic acquisition costs. |
Years Ended December 31, | |||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||
(Dollars in thousands) | |||||||||||||
Selling and marketing expense | $1,381,221 | $134,124 | 11% | $1,247,097 | $(101,196) | (8)% | $1,348,293 | ||||||
As a percentage of revenue | 42% | 40% | 42% |
• | The ANGI Homeservices increase was due primarily to higher online and offline marketing of $78.2 million, of which $5.3 million was from the inclusion of Angie's List, an increase of $64.9 million in compensation, of which $24.4 million was from the inclusion of Angie's List, and $9.5 million of expense from acquisitions made prior to the Combination. The increase in marketing is due primarily to increased organic investment including television spend. Compensation increased due primarily to an increase of $24.9 million in stock-based compensation expense, of which $9.8 million was from the inclusion of Angie's List, an increase in the sales force and the inclusion of $7.4 million in severance and retention costs related to the Combination. The increase in stock-based compensation expense was due |
• | The Match Group increase was due primarily to higher offline and online marketing of $15.3 million and an increase in compensation of $9.1 million. The increase in marketing is due primarily to an increase in strategic investments in certain international markets at the Tinder business and increased marketing related to the launch of a new brand in Europe, partially offset by a reduction in marketing spend at Match Group's affinity brands. The increase in compensation is primarily related to an increase in headcount at Tinder and the employer portion of payroll taxes paid in connection with the exercise of Match Group options. As a percentage of revenue, selling and marketing expense decreased due primarily to a continued shift towards brands with lower marketing spend and reductions in marketing spend at the affinity brands. |
• | The Video increase was due primarily to increases in both online and offline marketing at Vimeo and IAC Films of $10.6 million and $6.5 million, respectively, and compensation at Vimeo and Electus of $2.4 million and $1.7 million, respectively, partially offset by a decrease of $3.5 million in offline marketing at Daily Burn. |
• | The Publishing decrease was due primarily to a reduction of $26.6 million in online marketing, principally related to lower Ask & Other revenue resulting from changes in the Google contract, and a decrease of $8.0 million in compensation due, in part, to reductions in workforce that occurred in 2016 including $3.1 million in restructuring costs in 2016. |
• | The Other decrease was due to the sales of ShoeBuy and The Princeton Review. |
• | The Publishing decrease was due primarily to a reduction of $132.6 million in online marketing, resulting from a decline in revenue, partially offset by $3.1 million in restructuring charges in 2016 related to severance costs in connection with a reduction in workforce. |
• | The Applications decrease was due primarily to a decline of $37.5 million in online marketing, principally related to lower anticipated search revenue from our downloadable desktop applications at Consumer. |
• | The Video decrease was due primarily to a reduction of $8.9 million in online marketing driven primarily by Vimeo. |
• | The ANGI Homeservices increase was due primarily to higher online and offline marketing of $51.2 million and an increase of $27.8 million in compensation due primarily to an increase in the sales force. |
Years Ended December 31, | |||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||
(Dollars in thousands) | |||||||||||||
General and administrative expense | $719,257 | $188,811 | 36% | $530,446 | $18,391 | 4% | $512,055 | ||||||
As a percentage of revenue | 22% | 17% | 16% |
• | The ANGI Homeservices increase was due primarily to higher compensation of $130.7 million, of which $38.4 million was from the inclusion of Angie's List, and $24.3 million in costs related to the Combination including transaction related costs of $14.3 million and integration related costs of $10.0 million. The increase in compensation was due primarily to an increase of $100.5 million in stock-based compensation expense, of which $18.0 million was from the inclusion of Angie's List, an increase in headcount from business growth and the inclusion of $11.8 million in severance and retention costs in 2017 related to the Combination. The increase in stock-based compensation expense was due principally to the modification of previously issued HomeAdvisor vested and unvested equity awards, which were converted into ANGI Homeservices' equity awards, the expense related to previously issued Angie's List equity awards and the acceleration of certain Angie's List equity awards resulting from the termination of employees in connection with the Combination as well as a modification charge related to a HomeAdvisor equity award in 2017. General and administrative expense also includes increases of $9.2 million in bad debt expense due, in part, to higher Marketplace Revenue, $3.9 million in outsourced customer service expense and $3.2 million in software license and maintenance costs, as well as $9.8 million of expense from acquisitions made prior to the Combination. |
• | The Match Group increase was due primarily to an increase of $20.6 million in compensation, a change of $14.5 million in acquisition-related contingent consideration fair value adjustments (expense of $5.3 million in 2017 versus income of $9.2 million in 2016) and an increase of $6.8 million in professional fees. The increase in compensation was due to an increase of $9.1 million in stock-based compensation expense due primarily to an increase in expense related to a subsidiary denominated equity award held by a non-employee, which award was settled in the third quarter of 2017, the employer portion of payroll taxes paid in connection with the exercise of Match Group options and an increase in headcount from business growth. The increase in professional fees was due primarily to the Tinder Equity Plan Settlement. |
• | The Corporate increase was due primarily to higher compensation costs in 2017, including an increase in stock-based compensation expense due primarily to the issuance of new equity awards since 2016 and higher professional fees. |
• | The Other decrease was due primarily to the sales of The Princeton Review and ShoeBuy. |
• | The Applications decrease was due primarily to the inclusion in 2016 of $12.0 million in expense related to an acquisition-related contingent consideration fair value adjustment and a $2.9 million favorable legal settlement in 2017. |
• | The Publishing decrease was due primarily to the effect of the reductions in workforce in 2016, $2.3 million in restructuring costs included in 2016 and the sale of ASKfm on June 30, 2016. |
• | The ANGI Homeservices increase was due primarily to higher compensation of $10.8 million due, in part, to increased headcount, an increase in bad debt expense due to higher Marketplace Revenue, an increase in software license and maintenance costs and $2.1 million in transaction-related costs in 2016. |
• | The Match Group increase was due primarily to an increase of $7.5 million in compensation, an increase of $4.0 million in rent due to growth in the business and a decrease in income of $1.9 million in acquisition-related contingent consideration fair value adjustments. The increase in compensation was due to an increase in headcount from both acquisitions and existing business growth, partially offset by a decrease of $2.1 million in stock-based compensation expense due primarily to the inclusion in 2015 of a modification charge related to certain equity awards, partially offset by the issuance of new equity awards since 2015. |
• | The Applications increase was due primarily to a change of $13.8 million in acquisition-related contingent consideration fair value adjustments, which was due to expense of $12.0 million in 2016 versus income of $1.8 million in 2015, partially offset by a decrease in compensation due, in part, to a decrease in headcount related to a reduction in workforce that took place in the first half of 2016. |
• | The Publishing decrease was due primarily to the sale of ASKfm and a decrease in bad debt expense, partially offset by $2.3 million in restructuring charges in 2016 primarily related to severance costs in connection with a reduction in workforce. |
• | The Other decrease was due primarily to decreases in consulting expenses and non-income tax related items at The Princeton Review. |
• | The Corporate decrease was due primarily to a decrease in stock-based compensation expense resulting from the inclusion in 2015 of a modification charge and a greater number of awards being forfeited in 2016 compared to 2015, partially offset by the issuance of new equity awards in 2016. |
Years Ended December 31, | |||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||
(Dollars in thousands) | |||||||||||||
Product development expense | $250,879 | $38,114 | 18% | $212,765 | $16,142 | 8% | $196,623 | ||||||
As a percentage of revenue | 8% | 7% | 6% |
• | The ANGI Homeservices increase was due primarily to an increase of $23.0 million in compensation, of which $6.8 million was from the inclusion of Angie's List, and $2.9 million of expense from acquisitions made prior to the Combination. The increase in compensation was due principally to an increase of $14.5 million in stock-based compensation expense due to the modification of previously issued HomeAdvisor vested and unvested equity awards, which were converted into ANGI Homeservices' equity awards in connection with the Combination and increased headcount. |
• | The Match Group increase was due primarily to an increase of $20.7 million in compensation driven by an increase of $14.4 million related to increased headcount and the employer portion of payroll taxes paid in connection with the exercise of Match Group options, and an increase of $6.3 million in stock-based compensation expense due primarily to new grants issued since 2016. |
• | The Video increase was due primarily to the acquisition of Livestream. |
• | The Publishing decrease was due primarily to lower compensation and other employee-related costs of $3.8 million due, in part, to reductions in workforce in 2016 including $1.2 million in restructuring costs in 2016 and the sale of ASKfm. |
• | The Other decrease was due primarily to the sale of The Princeton Review. |
• | The Applications decrease was due primarily to a decrease of $3.6 million in compensation due, in part, to a decrease in headcount related to reductions in workforce in 2016. |
• | The Match Group increase was primarily related to an increase of $7.4 million in stock-based compensation expense, increased headcount at Tinder, and the 2015 acquisitions of PlentyOfFish and Pairs. The increase in stock-based compensation expense was due primarily to the issuance of new equity awards and a net increase in expense associated with the modification of certain equity awards since 2015. |
• | The ANGI Homeservices increase was due primarily to an increase of $2.5 million in compensation and other employee-related costs due primarily to an increase in headcount. |
• | The Video increase was due primarily to an increase in compensation at Vimeo due, in part, to increased headcount. |
• | The Publishing increase was due primarily to $1.2 million in restructuring charges related to severance costs in connection with a reduction in workforce. |
• | The Applications decrease was due primarily to a decrease of $4.4 million in compensation due, in part, to a decrease in headcount related to a reduction in workforce that took place in the first half of 2016. |
Years Ended December 31, | |||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||
(Dollars in thousands) | |||||||||||||
Depreciation | $74,265 | $2,589 | 4% | $71,676 | $9,471 | 15% | $62,205 | ||||||
As a percentage of revenue | 2% | 2% | 2% |
Years Ended December 31, | |||||||||||||||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Match Group | $ | 360,517 | $ | 44,968 | 14 | % | $ | 315,549 | $ | 102,568 | 48 | % | $ | 212,981 | |||||||||||
ANGI Homeservices | (149,176 | ) | (174,539 | ) | NM | 25,363 | 26,931 | NM | (1,568 | ) | |||||||||||||||
Video | (35,659 | ) | (8,003 | ) | (29 | )% | (27,656 | ) | 11,100 | 29 | % | (38,756 | ) | ||||||||||||
Applications | 130,176 | 20,513 | 19 | % | 109,663 | (65,482 | ) | (37 | )% | 175,145 | |||||||||||||||
Publishing | 15,670 | 350,087 | NM | (334,417 | ) | (307,725 | ) | (1153 | )% | (26,692 | ) | ||||||||||||||
Other | (5,621 | ) | 6,057 | 52 | % | (11,678 | ) | 16,933 | 59 | % | (28,611 | ) | |||||||||||||
Corporate | (127,441 | ) | (17,992 | ) | (16 | )% | (109,449 | ) | 3,462 | 3 | % | (112,911 | ) | ||||||||||||
Total | $ | 188,466 | $ | 221,091 | NM | $ | (32,625 | ) | $ | (212,213 | ) | NM | $ | 179,588 | |||||||||||
As a percentage of revenue | 6% | (1)% | 6% |
Years Ended December 31, | |||||||||||||||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Match Group | $ | 468,941 | $ | 65,561 | 16 | % | $ | 403,380 | $ | 118,826 | 42 | % | $ | 284,554 | |||||||||||
ANGI Homeservices | 37,858 | (7,993 | ) | (17 | )% | 45,851 | 29,138 | 174 | % | 16,713 | |||||||||||||||
Video | (30,446 | ) | (9,199 | ) | (43 | )% | (21,247 | ) | 17,137 | 45 | % | (38,384 | ) | ||||||||||||
Applications | 136,757 | 4,481 | 3 | % | 132,276 | (51,982 | ) | (28 | )% | 184,258 | |||||||||||||||
Publishing | 31,470 | 39,041 | NM | (7,571 | ) | (95,359 | ) | NM | 87,788 | ||||||||||||||||
Other | (1,532 | ) | (3,334 | ) | NM | 1,802 | (2,932 | ) | (62 | )% | 4,734 | ||||||||||||||
Corporate | (67,755 | ) | (14,483 | ) | (27 | )% | (53,272 | ) | 601 | 1 | % | (53,873 | ) | ||||||||||||
Total | $ | 575,293 | $ | 74,074 | 15 | % | $ | 501,219 | $ | 15,429 | 3 | % | $ | 485,790 | |||||||||||
As a percentage of revenue | 17% | 16% | 15% |
Years Ended December 31, | |||||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||||
(Dollars in thousands) | |||||||||||||||
Interest expense | $105,295 | $(3,815) | (3)% | $ | 109,110 | $35,474 | 48% | 73,636 |
Years Ended December 31, | |||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||
(Dollars in thousands) | |||||||||||||
Other (expense) income, net | $(16,213) | $(76,863) | (127)% | $60,650 | $23,712 | 64% | $36,938 |
Years Ended December 31, | |||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||
(Dollars in thousands) | |||||||||||||
Income tax benefit (provision) | $291,050 | NM | NM | $64,934 | NM | NM | $(29,516) | ||||||
Effective income tax rate | NM | 80% | 21% |
Years Ended December 31, | |||||||||||||
2017 | $ Change | % Change | 2016 | $ Change | % Change | 2015 | |||||||
(Dollars in thousands) | |||||||||||||
Net (earnings) loss attributable to noncontrolling interests | $(53,084) | $(27,955) | 111% | $(25,129) | $(31,227) | NM | $6,098 |
December 31, | ||||||||
2017 | 2016 | |||||||
(In thousands) | ||||||||
Cash and cash equivalents: | ||||||||
United States(a) | $ | 1,178,616 | $ | 815,588 | ||||
All other countries(b) | 452,193 | 513,599 | ||||||
Total cash and cash equivalents | 1,630,809 | 1,329,187 | ||||||
Marketable securities (United States)(c) | 4,995 | 89,342 | ||||||
Total cash and cash equivalents and marketable securities(d)(e) | $ | 1,635,804 | $ | 1,418,529 | ||||
Match Group Debt: | ||||||||
Match Group Term Loan | $ | 425,000 | $ | 350,000 | ||||
Match Group 6.75% Senior Notes | — | 445,172 | ||||||
Match Group 6.375% Senior Notes | 400,000 | 400,000 | ||||||
Match Group 5.00% Senior Notes | 450,000 | — | ||||||
Total Match Group long-term debt | 1,275,000 | 1,195,172 | ||||||
Less: unamortized original issue discount and original issue premium, net | 8,668 | 5,245 | ||||||
Less: unamortized debt issuance costs | 13,636 | 13,434 | ||||||
Total Match Group debt, net | 1,252,696 | 1,176,493 | ||||||
ANGI Homeservices Debt: | ||||||||
ANGI Homeservices Term Loan | 275,000 | — | ||||||
Less: current portion of ANGI Homeservices long-term debt | 13,750 | — | ||||||
Less: unamortized debt issuance costs | 2,938 | — | ||||||
Total ANGI Homeservices debt, net | 258,312 | — | ||||||
IAC Debt: | ||||||||
Exchangeable Notes | 517,500 | — | ||||||
4.75% Senior Notes | 34,859 | 38,109 | ||||||
4.875% Senior Notes | — | 390,214 | ||||||
Total IAC long-term debt | 552,359 | 428,323 | ||||||
Less: current portion of IAC long-term debt | — | 20,000 | ||||||
Less: unamortized original issue discount | 67,158 | — | ||||||
Less: unamortized debt issuance costs | 16,740 | 2,332 | ||||||
Total IAC debt, net | 468,461 | 405,991 | ||||||
Total long-term debt, net | $ | 1,979,469 | $ | 1,582,484 |
(a) | Domestically, cash equivalents primarily consist of AAA rated government money market funds and commercial paper rated A1/P1 or better with maturities less than 91 days from the date of purchase, and treasury discount notes. |
(b) | Internationally, cash equivalents primarily consist of AAA rated government money market funds and time deposits with maturities of less than 91 days. Approximately $420 million of the Company’s international cash can be repatriated without any significant tax consequences as it has been substantially subjected to U.S. income taxes due to the Transition Tax imposed by the Tax Act. If needed for our U.S. operations, the remaining cash and cash equivalents held by the Company's foreign subsidiaries could be repatriated, however, under current law, would be subject to foreign, federal and state income taxes of approximately $8 million. We have not provided for any such tax because the Company currently does not anticipate a need to repatriate these funds to finance our U.S. operations and it is the Company's intent to indefinitely reinvest these funds outside of the U.S. |
(c) | At December 31, 2017, marketable securities consist of commercial paper rated A1+/P1 with an initial maturity of more than 91 days. At December 31, 2016, marketable securities consist of commercial paper rated A1/P1, treasury discount notes, and short-to-medium-term debt securities issued by investment grade corporate issuers. The Company invests in marketable debt securities with active secondary or resale markets to ensure portfolio liquidity to fund current operations or satisfy other cash requirements as needed. The Company also may invest in equity securities as part of its investment strategy. |
(d) | At December 31, 2017 and 2016, cash and cash equivalents include Match Group's domestic and international cash and cash equivalents of $203.5 million and $69.2 million; and $114.0 million and $139.6 million, respectively. Match Group is a separate and distinct legal entity with its own public shareholders and board of directors and has no obligation to provide the Company with funds. As a result, we cannot freely access the cash of Match Group and its subsidiaries. Match Group generated $321.1 million and $259.6 million of operating cash flows for the years ended December 31, 2017 and 2016, respectively. In addition, agreements governing Match Group’s indebtedness limit the payment of dividends or distributions, loans or advances to stockholders, including the Company, in the event a default has occurred or Match Group's leverage ratio (as defined in the indentures) exceeds 5.0 to 1.0. |
(e) | At December 31, 2017, cash and cash equivalents include ANGI Homeservices' domestic and international cash and cash equivalents of $214.8 million and $6.7 million, respectively. At December 31, 2016, all of ANGI Homeservices' cash and cash equivalents of $36.4 million was held internationally. ANGI Homeservices is a separate and distinct legal entity with its own public shareholders and board of directors and has no obligation to provide the Company with funds. As a result, we cannot freely access the cash of ANGI Homeservices and its subsidiaries. ANGI Homeservices generated $41.8 million and $47.9 million of operating cash flows for the years ended December 31, 2017 and 2016, respectively. In addition, the agreement governing ANGI Homeservices’ Term Loan limits the payment of dividends or distributions in the event a default has occurred or ANGI Homeservices’ leverage ratio (as defined in the indentures) exceeds 4.0 to 1.0. |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Net cash provided by (used in): | |||||||||||
Operating activities | $ | 416,690 | $ | 344,141 | $ | 405,671 | |||||
Investing activities | 39,508 | 12,862 | (582,721 | ) | |||||||
Financing activities | (166,124 | ) | (502,829 | ) | 678,390 |
Payments Due by Period | |||||||||||||||||||
Contractual Obligations(a) | Less Than 1 Year | 1–3 Years | 3–5 Years | More Than 5 Years | Total | ||||||||||||||
(In thousands) | |||||||||||||||||||
Long-term debt(b) | $ | 95,023 | $ | 190,758 | $ | 1,372,671 | $ | 1,000,750 | $ | 2,659,202 | |||||||||
Operating leases(c) | 38,339 | 67,590 | 42,941 | 211,649 | 360,519 | ||||||||||||||
Purchase obligations(d) | 21,994 | 10,816 | — | — | 32,810 | ||||||||||||||
Total contractual obligations | $ | 155,356 | $ | 269,164 | $ | 1,415,612 | $ | 1,212,399 | $ | 3,052,531 |
(a) | The Company has excluded $37.2 million in unrecognized tax benefits and related interest from the table above as we are unable to make a reasonably reliable estimate of the period in which these liabilities might be paid. For additional information on income taxes, see "Note 3—Income Taxes" to the consolidated financial statements included in "Item 8—Consolidated Financial Statements and Supplementary Data." |
(b) | Represents contractual amounts due including interest on both fixed and variable rate instruments. Long-term debt at December 31, 2017 consists of $1.4 billion, bearing interest at fixed rates and a $425.0 million Match Group Term Loan and a $275.0 million ANGI Homeservices Term Loan bearing interest at variable rates. The Match Group Term Loan bears interest at LIBOR plus 2.50%, or 3.85%, at December 31, 2017. The ANGI Homeservices Term Loan bears interest at LIBOR plus 2.00%, or 3.38% at December 31, 2017. The amount of interest ultimately paid on the Match Group and ANGI Homeservices term loans may differ based on changes in interest rates. For additional information on long-term debt arrangements, see "Note 9—Long-term Debt" to the consolidated financial statements included in "Item 8—Consolidated Financial Statements and Supplementary Data." |
(c) | The Company leases land, office space, data center facilities and equipment used in connection with operations under various operating leases, many of which contain escalation clauses. The Company is also committed to pay a portion of the related operating expenses under a data center lease agreement. These operating expenses are not included in the table above. For additional information on operating leases, see "Note 15—Commitments and Contingencies" to the consolidated financial statements included in "Item 8—Consolidated Financial Statements and Supplementary Data." |
(d) | The purchase obligations principally include web hosting commitments. |
Amount of Commitment Expiration Per Period | |||||||||||||||||||
Other Commercial Commitments(e) | Less Than 1 Year | 1–3 Years | 3–5 Years | More Than 5 Years | Total | ||||||||||||||
(In thousands) | |||||||||||||||||||
Letters of credit and surety bonds | $ | 576 | $ | 71 | $ | — | $ | 1,939 | $ | 2,586 |
(e) | Commercial commitments are funding commitments that could potentially require registrant performance in the event of demands by third parties or contingent events. |
• | Match Group's October 1, 2017 market capitalization of $6.3 billion exceeded its carrying value by more than 1100% and Match Group's strong operating performance. |
• | ANGI Homeservices' October 1, 2017 market capitalization of $5.9 billion exceeded its carrying value by more than 450% and ANGI Homeservices' strong operating performance. |
• | The Company performed valuations of the Vimeo and Applications reporting units during 2017. These valuations were prepared primarily in connection with the issuance and/or settlement of equity grants that are denominated in the equity of these businesses. The valuations were prepared time proximate to, however, not as of, October 1, 2017. The fair value of each of these businesses was in excess of its October 1, 2017 carrying value. |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands, except par value amounts) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 1,630,809 | $ | 1,329,187 | |||
Marketable securities | 4,995 | 89,342 | |||||
Accounts receivable, net of allowance of $11,489 and $16,405, respectively | 304,027 | 220,138 | |||||
Other current assets | 185,374 | 204,068 | |||||
Total current assets | 2,125,205 | 1,842,735 | |||||
Property and equipment, net of accumulated depreciation and amortization | 315,170 | 306,248 | |||||
Goodwill | 2,559,066 | 1,924,052 | |||||
Intangible assets, net of accumulated amortization | 663,737 | 355,451 | |||||
Long-term investments | 64,977 | 122,810 | |||||
Deferred income taxes | 66,321 | 2,511 | |||||
Other non-current assets | 73,334 | 92,066 | |||||
TOTAL ASSETS | $ | 5,867,810 | $ | 4,645,873 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
LIABILITIES: | |||||||
Current portion of long-term debt | $ | 13,750 | $ | 20,000 | |||
Accounts payable, trade | 76,571 | 62,863 | |||||
Deferred revenue | 342,483 | 285,615 | |||||
Accrued expenses and other current liabilities | 366,924 | 344,910 | |||||
Total current liabilities | 799,728 | 713,388 | |||||
Long-term debt, net | 1,979,469 | 1,582,484 | |||||
Income taxes payable | 25,624 | 33,528 | |||||
Deferred income taxes | 35,070 | 228,798 | |||||
Other long-term liabilities | 38,229 | 44,178 | |||||
Redeemable noncontrolling interests | 42,867 | 32,827 | |||||
Commitments and contingencies | |||||||
SHAREHOLDERS' EQUITY: | |||||||
Common stock $.001 par value; authorized 1,600,000 shares; issued 260,624 and 255,672 shares, respectively, and outstanding 76,829 and 72,595 shares, respectively | 261 | 256 | |||||
Class B convertible common stock $.001 par value; authorized 400,000 shares; issued 16,157 shares and outstanding 5,789 shares | 16 | 16 | |||||
Additional paid-in capital | 12,165,002 | 11,921,559 | |||||
Retained earnings | 595,038 | 290,114 | |||||
Accumulated other comprehensive loss | (103,568 | ) | (166,123 | ) | |||
Treasury stock 194,163 and 193,445 shares, respectively | (10,226,721 | ) | (10,176,600 | ) | |||
Total IAC shareholders' equity | 2,430,028 | 1,869,222 | |||||
Noncontrolling interests | 516,795 | 141,448 | |||||
Total shareholders' equity | 2,946,823 | 2,010,670 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 5,867,810 | $ | 4,645,873 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands, except per share data) | |||||||||||
Revenue | $ | 3,307,239 | $ | 3,139,882 | $ | 3,230,933 | |||||
Operating costs and expenses: | |||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 651,008 | 755,730 | 778,161 | ||||||||
Selling and marketing expense | 1,381,221 | 1,247,097 | 1,348,293 | ||||||||
General and administrative expense | 719,257 | 530,446 | 512,055 | ||||||||
Product development expense | 250,879 | 212,765 | 196,623 | ||||||||
Depreciation | 74,265 | 71,676 | 62,205 | ||||||||
Amortization of intangibles | 42,143 | 79,426 | 139,952 | ||||||||
Goodwill impairment | — | 275,367 | 14,056 | ||||||||
Total operating costs and expenses | 3,118,773 | 3,172,507 | 3,051,345 | ||||||||
Operating income (loss) | 188,466 | (32,625 | ) | 179,588 | |||||||
Interest expense | (105,295 | ) | (109,110 | ) | (73,636 | ) | |||||
Other (expense) income, net | (16,213 | ) | 60,650 | 36,938 | |||||||
Earnings (loss) before income taxes | 66,958 | (81,085 | ) | 142,890 | |||||||
Income tax benefit (provision) | 291,050 | 64,934 | (29,516 | ) | |||||||
Net earnings (loss) | 358,008 | (16,151 | ) | 113,374 | |||||||
Net (earnings) loss attributable to noncontrolling interests | (53,084 | ) | (25,129 | ) | 6,098 | ||||||
Net earnings (loss) attributable to IAC shareholders | $ | 304,924 | $ | (41,280 | ) | $ | 119,472 | ||||
Per share information attributable to IAC shareholders: | |||||||||||
Basic earnings (loss) per share | $ | 3.81 | $ | (0.52 | ) | $ | 1.44 | ||||
Diluted earnings (loss) per share | $ | 3.18 | $ | (0.52 | ) | $ | 1.33 | ||||
Dividends declared per share | $ | — | $ | — | $ | 1.36 | |||||
Stock-based compensation expense by function: | |||||||||||
Cost of revenue | $ | 1,881 | $ | 2,305 | $ | 1,210 | |||||
Selling and marketing expense | 31,318 | 6,000 | 10,186 | ||||||||
General and administrative expense | 192,957 | 77,151 | 82,798 | ||||||||
Product development expense | 38,462 | 19,364 | 11,256 | ||||||||
Total stock-based compensation expense | $ | 264,618 | $ | 104,820 | $ | 105,450 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Net earnings (loss) | $ | 358,008 | $ | (16,151 | ) | $ | 113,374 | ||||
Other comprehensive income (loss), net of tax: | |||||||||||
Change in foreign currency translation adjustment | 80,269 | (43,126 | ) | (68,844 | ) | ||||||
Change in unrealized gains and losses of available-for-sale securities (net of tax benefits of $3,846 and $884 in 2017 and 2016, respectively, and tax provision of $576 in 2015) | (4,026 | ) | 1,484 | 3,140 | |||||||
Total other comprehensive income (loss) | 76,243 | (41,642 | ) | (65,704 | ) | ||||||
Comprehensive income (loss), net of tax | 434,251 | (57,793 | ) | 47,670 | |||||||
Components of comprehensive (income) loss attributable to noncontrolling interests: | |||||||||||
Net (earnings) loss attributable to noncontrolling interests | (53,084 | ) | (25,129 | ) | 6,098 | ||||||
Change in foreign currency translation adjustment attributable to noncontrolling interests | (13,797 | ) | 6,033 | 1,047 | |||||||
Change in unrealized gain and losses of available-for-sale securities attributable to noncontrolling interests | — | 458 | 254 | ||||||||
Comprehensive (income) loss attributable to noncontrolling interests | (66,881 | ) | (18,638 | ) | 7,399 | ||||||
Comprehensive income (loss) attributable to IAC shareholders | $ | 367,370 | $ | (76,431 | ) | $ | 55,069 |
IAC Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock $.001 Par Value | Class B Convertible Common Stock $.001 Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interests | $ | Shares | $ | Shares | Retained Earnings | Total IAC Shareholders' Equity | Noncontrolling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2014 | $ | 40,427 | $ | 252 | 252,170 | $ | 16 | 16,157 | $ | 11,415,617 | $ | 325,118 | $ | (87,700 | ) | $ | (9,661,350 | ) | $ | 1,991,953 | $ | 1,189 | $ | 1,993,142 | ||||||||||||||||||||||
Net (loss) earnings | (7,737 | ) | — | — | — | — | — | 119,472 | — | — | 119,472 | 1,639 | 121,111 | |||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (1,301 | ) | — | — | — | — | — | — | (64,403 | ) | — | (64,403 | ) | — | (64,403 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation expense | 6,725 | — | — | — | — | 87,685 | — | — | — | 87,685 | 4,808 | 92,493 | ||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock-based awards, net of withholding taxes | — | 2 | 1,845 | — | — | (37,733 | ) | — | — | — | (37,731 | ) | — | (37,731 | ) | |||||||||||||||||||||||||||||||
Income tax benefit related to stock-based awards | — | — | — | — | — | 44,577 | — | — | — | 44,577 | — | 44,577 | ||||||||||||||||||||||||||||||||||
Dividends | — | — | — | — | — | — | (113,196 | ) | — | — | (113,196 | ) | — | (113,196 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | (200,000 | ) | (200,000 | ) | — | (200,000 | ) | |||||||||||||||||||||||||||||||
Purchase of redeemable noncontrolling interests | (32,207 | ) | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to fair value | 23,155 | — | — | — | — | (23,155 | ) | — | — | — | (23,155 | ) | — | (23,155 | ) | |||||||||||||||||||||||||||||||
Noncontrolling interests related to Match Group IPO, net of fees and expenses | — | — | — | — | — | — | — | — | — | — | 428,283 | 428,283 | ||||||||||||||||||||||||||||||||||
Purchase of Match Group stock-based awards | — | — | — | — | — | — | — | — | — | — | (23,431 | ) | (23,431 | ) | ||||||||||||||||||||||||||||||||
Transfer from noncontrolling interests to redeemable noncontrolling interests | 1,189 | — | — | — | — | — | — | — | — | — | (1,189 | ) | (1,189 | ) | ||||||||||||||||||||||||||||||||
Other | 140 | — | — | — | — | (676 | ) | — | — | — | (676 | ) | — | (676 | ) | |||||||||||||||||||||||||||||||
Balance as of December 31, 2015 | $ | 30,391 | $ | 254 | 254,015 | $ | 16 | 16,157 | $ | 11,486,315 | $ | 331,394 | $ | (152,103 | ) | $ | (9,861,350 | ) | $ | 1,804,526 | $ | 411,299 | $ | 2,215,825 | ||||||||||||||||||||||
Net (loss) earnings | (3,849 | ) | — | — | — | — | — | (41,280 | ) | — | — | (41,280 | ) | 28,978 | (12,302 | ) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | 385 | — | — | — | — | — | — | (35,151 | ) | — | (35,151 | ) | (6,876 | ) | (42,027 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation expense | 1,632 | — | — | — | — | 50,201 | — | — | — | 50,201 | 44,523 | 94,724 | ||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock-based awards, net of withholding taxes | — | 2 | 1,657 | — | — | (772 | ) | — | — | — | (770 | ) | — | (770 | ) | |||||||||||||||||||||||||||||||
Income tax benefit related to stock-based awards | — | — | — | — | — | 49,406 | — | — | — | 49,406 | — | 49,406 | ||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | (315,250 | ) | (315,250 | ) | — | (315,250 | ) | |||||||||||||||||||||||||||||||
Purchase of redeemable noncontrolling interests | (2,529 | ) | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to fair value | 7,921 | — | — | — | — | (7,560 | ) | — | — | — | (7,560 | ) | — | (7,560 | ) | |||||||||||||||||||||||||||||||
Purchase of noncontrolling interests | — | — | — | — | — | — | — | — | — | — | (211 | ) | (211 | ) | ||||||||||||||||||||||||||||||||
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes | — | — | — | — | — | — | — | — | — | — | 10,224 | 10,224 | ||||||||||||||||||||||||||||||||||
Reallocation of shareholders' equity balances related to the noncontrolling interests created in the Match Group IPO | — | — | — | — | — | 342,507 | — | 21,131 | — | 363,638 | (363,638 | ) | — | |||||||||||||||||||||||||||||||||
Changes in noncontrolling interests of Match Group due to the issuance of its common stock | — | — | — | — | — | (7,691 | ) | — | — | — | (7,691 | ) | 7,691 | — |
IAC Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock $.001 Par Value | Class B Convertible Common Stock $.001 Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interests | $ | Shares | $ | Shares | Retained Earnings | Total IAC Shareholders' Equity | Noncontrolling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests created in an acquisition | — | — | — | — | — | 12,222 | — | — | — | 12,222 | 9,811 | 22,033 | ||||||||||||||||||||||||||||||||||
Other | (1,124 | ) | — | — | — | — | (3,069 | ) | — | — | — | (3,069 | ) | (353 | ) | (3,422 | ) | |||||||||||||||||||||||||||||
Balance as of December 31, 2016 | $ | 32,827 | $ | 256 | 255,672 | $ | 16 | 16,157 | $ | 11,921,559 | $ | 290,114 | $ | (166,123 | ) | $ | (10,176,600 | ) | $ | 1,869,222 | $ | 141,448 | $ | 2,010,670 | ||||||||||||||||||||||
Net earnings | 3,620 | — | — | — | — | — | 304,924 | — | — | 304,924 | 49,464 | 354,388 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 1,291 | — | — | — | — | — | — | 62,446 | — | 62,446 | 12,506 | 74,952 | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 2,017 | — | — | — | — | 66,333 | — | — | — | 66,333 | 180,055 | 246,388 | ||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock-based awards, net of withholding taxes | — | 5 | 4,952 | — | — | (10,509 | ) | — | — | — | (10,504 | ) | — | (10,504 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | (50,121 | ) | (50,121 | ) | — | (50,121 | ) | |||||||||||||||||||||||||||||||
Purchase of redeemable noncontrolling interests | (14,641 | ) | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Purchase of noncontrolling interests | — | — | — | — | — | — | — | — | — | — | (848 | ) | (848 | ) | ||||||||||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to fair value | 6,341 | — | — | — | — | (6,341 | ) | — | — | — | (6,341 | ) | — | (6,341 | ) | |||||||||||||||||||||||||||||||
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes, and impact to noncontrolling interests in Match Group | — | — | — | — | — | (460,890 | ) | — | 116 | — | (460,774 | ) | (3,435 | ) | (464,209 | ) | ||||||||||||||||||||||||||||||
Acquisition of Angie's List and creation of noncontrolling interests in ANGI Homeservices | — | — | — | — | — | 645,475 | — | — | — | 645,475 | 133,996 | 779,471 | ||||||||||||||||||||||||||||||||||
Noncontrolling interests created in acquisitions | 17,758 | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of ANGI Homeservices common stock pursuant to stock-based awards, net of withholding taxes, and impact to noncontrolling interests in ANGI Homeservices | — | — | — | — | — | (11,216 | ) | — | (7 | ) | — | (11,223 | ) | 2,730 | (8,493 | ) | ||||||||||||||||||||||||||||||
Purchase of exchangeable note hedge | — | — | — | — | — | (74,365 | ) | — | — | — | (74,365 | ) | — | (74,365 | ) | |||||||||||||||||||||||||||||||
Equity component of Exchangeable Notes, net of deferred financing costs and deferred tax asset | — | — | — | — | — | 71,158 | — | — | — | 71,158 | — | 71,158 | ||||||||||||||||||||||||||||||||||
Issuance of warrants | — | — | — | — | — | 23,650 | — | — | — | 23,650 | — | 23,650 | ||||||||||||||||||||||||||||||||||
Other | (6,346 | ) | — | — | — | — | 148 | — | — | — | 148 | 879 | 1,027 | |||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | 42,867 | $ | 261 | 260,624 | $ | 16 | 16,157 | $ | 12,165,002 | $ | 595,038 | $ | (103,568 | ) | $ | (10,226,721 | ) | $ | 2,430,028 | $ | 516,795 | $ | 2,946,823 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings (loss) | $ | 358,008 | $ | (16,151 | ) | $ | 113,374 | ||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | |||||||||||
Stock-based compensation expense | 264,618 | 104,820 | 105,450 | ||||||||
Depreciation | 74,265 | 71,676 | 62,205 | ||||||||
Amortization of intangibles | 42,143 | 79,426 | 139,952 | ||||||||
Goodwill impairment | — | 275,367 | 14,056 | ||||||||
Deferred income taxes | (285,278 | ) | (119,181 | ) | (59,786 | ) | |||||
Acquisition-related contingent consideration fair value adjustments | 5,801 | 2,555 | (15,461 | ) | |||||||
Gain from the sale of businesses and investments, net | (32,673 | ) | (50,965 | ) | (1,005 | ) | |||||
Impairment of long-term investments | 12,214 | 10,680 | 6,689 | ||||||||
Acquisition-related contingent consideration payment | (11,140 | ) | — | — | |||||||
Bad debt expense | 28,930 | 17,733 | 16,648 | ||||||||
Gain on real estate transaction | — | — | (34,341 | ) | |||||||
Other adjustments, net | 43,633 | (12,639 | ) | 8,907 | |||||||
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | |||||||||||
Accounts receivable | (115,169 | ) | 1,283 | (29,680 | ) | ||||||
Other assets | 5,671 | (12,905 | ) | (21,174 | ) | ||||||
Accounts payable and other current liabilities | (14,142 | ) | (52,359 | ) | 8,756 | ||||||
Income taxes payable and receivable | 655 | 8,998 | 24,167 | ||||||||
Deferred revenue | 39,154 | 35,803 | 66,914 | ||||||||
Net cash provided by operating activities | 416,690 | 344,141 | 405,671 | ||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions, net of cash acquired | (149,094 | ) | (18,403 | ) | (617,402 | ) | |||||
Capital expenditures | (75,523 | ) | (78,039 | ) | (62,049 | ) | |||||
Investments in time deposits | — | (87,500 | ) | — | |||||||
Proceeds from maturities of time deposits | — | 87,500 | — | ||||||||
Proceeds from maturities and sales of marketable debt securities | 114,350 | 252,369 | 218,462 | ||||||||
Purchases of marketable debt securities | (29,891 | ) | (313,943 | ) | (93,134 | ) | |||||
Purchases of investments | (9,106 | ) | (12,565 | ) | (34,470 | ) | |||||
Net proceeds from the sale of businesses and investments | 185,778 | 172,228 | 9,413 | ||||||||
Other, net | 2,994 | 11,215 | (3,541 | ) | |||||||
Net cash provided by (used in) investing activities | 39,508 | 12,862 | (582,721 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of IAC debt | 517,500 | — | — | ||||||||
Principal payments on IAC debt | (393,464 | ) | (126,409 | ) | (80,000 | ) | |||||
Proceeds from issuance of Match Group debt | 525,000 | 400,000 | 788,000 | ||||||||
Principal payments on Match Group debt | (445,172 | ) | (450,000 | ) | — | ||||||
Borrowing under ANGI Homeservices Term Loan | 275,000 | — | — | ||||||||
Purchase of exchangeable note hedge | (74,365 | ) | — | — | |||||||
Proceeds from issuance of warrants | 23,650 | — | — | ||||||||
Debt issuance costs | (33,744 | ) | (7,811 | ) | (19,050 | ) | |||||
Fees and expenses related to note exchange | — | — | (6,954 | ) | |||||||
Proceeds from Match Group initial public offering, net of fees and expenses | — | — | 428,789 | ||||||||
Purchase of IAC treasury stock | (56,424 | ) | (308,948 | ) | (200,000 | ) | |||||
Dividends | — | — | (113,196 | ) | |||||||
Proceeds from the exercise of IAC stock options | 82,397 | 25,821 | 27,325 | ||||||||
Withholding taxes paid on behalf of IAC employees on net settled stock-based awards | (93,832 | ) | (26,716 | ) | (65,743 | ) | |||||
Proceeds from the exercise of Match Group stock options | 59,442 | 39,378 | — | ||||||||
Withholding taxes paid on behalf of Match Group employees on net settled stock-based awards | (254,210 | ) | (29,830 | ) | — | ||||||
Proceeds from the exercise of ANGI Homeservices stock options | 1,653 | — | — | ||||||||
Withholding taxes paid on behalf of ANGI Homeservices employees on net settled stock-based awards | (10,113 | ) | — | — | |||||||
Purchase of Match Group stock-based awards | (272,459 | ) | — | (23,431 | ) | ||||||
Purchase of noncontrolling interests | (15,439 | ) | (2,740 | ) | (32,207 | ) | |||||
Acquisition-related contingent consideration payments | (27,289 | ) | (2,180 | ) | (5,750 | ) | |||||
Funds returned from (held in) escrow for MyHammer tender offer | 10,604 | (10,548 | ) | — | |||||||
Decrease (increase) in restricted cash related to bond redemptions | 20,141 | (141 | ) | (20,000 | ) | ||||||
Other, net | (5,000 | ) | (2,705 | ) | 607 | ||||||
Net cash (used in) provided by financing activities | (166,124 | ) | (502,829 | ) | 678,390 | ||||||
Total cash provided (used) | 290,074 | (145,826 | ) | 501,340 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 11,548 | (6,434 | ) | (10,298 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 301,622 | (152,260 | ) | 491,042 | |||||||
Cash and cash equivalents at beginning of period | 1,329,187 | 1,481,447 | 990,405 | ||||||||
Cash and cash equivalents at end of period | $ | 1,630,809 | $ | 1,329,187 | $ | 1,481,447 |
• | Dotdash, a network of digital brands providing reliable information and inspiration in select vertical categories, including The Spruce (home), The Balance (money), Verywell (health), Lifewire (tech), TripSavvy (travel) and ThoughtCo (lifelong learning); |
• | Dictionary.com, which primarily provides online and mobile dictionary, thesaurus and reference services; |
• | Investopedia, a resource for investment and personal finance education and information, as well as online courses through Investopedia Academy for a fee; and |
• | The Daily Beast, a website dedicated to news, commentary, culture and entertainment that curates and publishes existing and original online content from its own roster of contributors in the United States. |
• | Ask Media Group, a collection of websites providing general search services and information; |
• | CityGrid, an advertising network that integrates local content and advertising for distribution to affiliated and third party publishers across web and mobile platforms; and |
• | For periods prior to its sale on June 30, 2016, ASKfm, a questions and answers social network. |
Asset Category | Estimated Useful Lives |
Buildings and leasehold improvements | 3 to 39 Years |
Computer equipment and capitalized software | 2 to 3 Years |
Furniture and other equipment | 3 to 12 Years |
• | Match Group's October 1, 2017 market capitalization of $6.3 billion exceeded its carrying value by more than 1100% and Match Group's strong operating performance. |
• | ANGI Homeservices' October 1, 2017 market capitalization of $5.9 billion exceeded its carrying value by more than 450% and ANGI Homeservices' strong operating performance. |
• | The Company performed valuations of the Vimeo and Applications reporting units during 2017. These valuations were prepared primarily in connection with the issuance and/or settlement of equity grants that are denominated in the equity of these businesses. The valuations were prepared time proximate to, however, not as of October 1, 2017. The fair value of each of these businesses was in excess of its October 1, 2017 carrying value. |
• | Level 1: Observable inputs obtained from independent sources, such as quoted prices for identical assets and liabilities in active markets. |
• | Level 2: Other inputs, which are observable directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company's Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used. |
• | Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities. See "Note 8—Fair Value Measurements and Financial Instruments" for a discussion of fair value measurements made using Level 3 inputs. |
• | The Company has adopted ASU No. 2014-09 using the modified retrospective approach effective January 1, 2018. Therefore, the cumulative effect of adoption will be reflected as an adjustment to beginning retained earnings in the Form 10-Q for the period ending March 31, 2018. |
• | Within ANGI Homeservices, the effect of the adoption of ASU No. 2014-09 on HomeAdvisor will be that sales commissions, which represent the incremental direct costs of obtaining a service professional contract, will be capitalized and amortized over the average life of a service professional. These costs were expensed as incurred prior to January 1, 2018. Prior to the Combination, Angie's List capitalized sales commissions and amortized the cost over the term of the applicable advertising contract. Following the Combination, Angie's List accounting policies were conformed to the HomeAdvisor's accounting policies and these costs are expensed as incurred. Following the adoption of ASU No. 2014-09, these costs will be capitalized and amortized over the average life of a service professional. |
• | Within Applications, the primary effect of the adoption of ASU No. 2014-09 will be to accelerate the recognition of the portion of the revenue of certain desktop applications sold by SlimWare that qualify as functional intellectual property under ASU No. 2014-09. This revenue is currently deferred and recognized over the applicable subscription term. |
• | the Company has selected a software package to assist in the determination of the right of use asset and related liability as of January 1, 2019 and to provide the required information following the adoption; |
• | the Company has prepared summaries of its leases for input into the software package; |
• | the Company is assessing the other inputs required in connection with the adoption of ASU No. 2016-02; and |
• | the Company is developing its accounting policy, procedures and controls related to the new standard. |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
U.S. | $ | (52,606 | ) | $ | (248,433 | ) | $ | 79,656 | |||
Foreign | 119,564 | 167,348 | 63,234 | ||||||||
Total | $ | 66,958 | $ | (81,085 | ) | $ | 142,890 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Current income tax (benefit) provision: | |||||||||||
Federal | $ | (31,844 | ) | $ | 23,343 | $ | 67,505 | ||||
State | 1,964 | 3,662 | 7,785 | ||||||||
Foreign | 24,108 | 27,242 | 14,012 | ||||||||
Current income tax (benefit) provision | (5,772 | ) | 54,247 | 89,302 | |||||||
Deferred income tax (benefit) provision: | |||||||||||
Federal | (255,477 | ) | (100,798 | ) | (50,254 | ) | |||||
State | (28,364 | ) | (9,518 | ) | (3,727 | ) | |||||
Foreign | (1,437 | ) | (8,865 | ) | (5,805 | ) | |||||
Deferred income tax (benefit) provision | (285,278 | ) | (119,181 | ) | (59,786 | ) | |||||
Income tax (benefit) provision | $ | (291,050 | ) | $ | (64,934 | ) | $ | 29,516 |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Income taxes receivable (payable): | |||||||
Other current assets | $ | 33,239 | $ | 41,352 | |||
Other non-current assets | 1,949 | 1,615 | |||||
Accrued expenses and other current liabilities | (11,798 | ) | (5,788 | ) | |||
Income taxes payable | (25,624 | ) | (33,528 | ) | |||
Net income taxes (payable) receivable | $ | (2,234 | ) | $ | 3,651 | ||
Deferred tax assets (liabilities): | |||||||
Other non-current assets | $ | 66,321 | $ | 2,511 | |||
Deferred income taxes | (35,070 | ) | (228,798 | ) | |||
Net deferred tax assets (liabilities) | $ | 31,251 | $ | (226,287 | ) |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Accrued expenses | $ | 22,234 | $ | 40,273 | |||
NOL carryforwards | 292,812 | 63,948 | |||||
Tax credit carryforwards | 78,715 | 11,570 | |||||
Stock-based compensation | 77,976 | 87,914 | |||||
Equity method investments | 12,066 | 17,455 | |||||
Intangible and other assets | — | 13,708 | |||||
Other | 30,265 | 30,044 | |||||
Total deferred tax assets | 514,068 | 264,912 | |||||
Less valuation allowance | (132,598 | ) | (88,170 | ) | |||
Net deferred tax assets | 381,470 | 176,742 | |||||
Deferred tax liabilities: | |||||||
Investment in subsidiaries | (247,167 | ) | (385,474 | ) | |||
Intangible and other assets | (87,811 | ) | — | ||||
Other | (15,241 | ) | (17,555 | ) | |||
Total deferred tax liabilities | (350,219 | ) | (403,029 | ) | |||
Net deferred tax assets (liabilities) | $ | 31,251 | $ | (226,287 | ) |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Income tax (benefit) provision at the federal statutory rate of 35% | $ | 23,435 | $ | (28,446 | ) | $ | 50,006 | ||||
Transition tax | 62,667 | — | — | ||||||||
Stock-based compensation | (358,901 | ) | 3,998 | 1,787 | |||||||
Foreign income taxed at a different statutory tax rate | (14,725 | ) | (27,115 | ) | (10,382 | ) | |||||
State income taxes, net of effect of federal tax benefit | 86 | (3,880 | ) | 2,208 | |||||||
Realization of certain deferred tax assets | (3,133 | ) | — | (22,440 | ) | ||||||
Non-taxable sale and non-deductible goodwill associated with ShoeBuy | — | (13,142 | ) | 4,920 | |||||||
Goodwill impairment of Publishing | — | 10,649 | — | ||||||||
Research credit | (5,304 | ) | (2,231 | ) | (2,354 | ) | |||||
Non-deductible impairments for certain cost method investments | 2,669 | 3,489 | 2,341 | ||||||||
Deferred tax adjustment for enacted changes in tax laws and rates | 705 | (4,594 | ) | — | |||||||
Other, net | 1,451 | (3,662 | ) | 3,430 | |||||||
Income tax (benefit) provision | $ | (291,050 | ) | $ | (64,934 | ) | $ | 29,516 |
December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | 38,372 | $ | 40,808 | $ | 30,386 | |||||
Additions based on tax positions related to the current year | 2,050 | 2,033 | 4,227 | ||||||||
Additions for tax positions of prior years | 1,994 | 2,676 | 14,467 | ||||||||
Reductions for tax positions of prior years | (3,761 | ) | (743 | ) | (1,556 | ) | |||||
Settlements | — | (5,107 | ) | — | |||||||
Expiration of applicable statutes of limitations | (1,923 | ) | (1,295 | ) | (6,716 | ) | |||||
Balance at December 31 | $ | 36,732 | $ | 38,372 | $ | 40,808 |
Angie's List | |||
(In thousands) | |||
Class A common stock | $ | 763,684 | |
Cash consideration for holders who elected to receive $8.50 in cash per share of Angie's List common stock | 1,913 | ||
Fair value of vested and pro rata portion of unvested stock options attributable to pre-combination services | 11,749 | ||
Fair value of the pro rata portion of unvested restricted stock units attributable to pre-combination services | 4,038 | ||
Total purchase price | $ | 781,384 |
Angie's List | |||
(In thousands) | |||
Cash and cash equivalents | $ | 44,270 | |
Other current assets | 11,280 | ||
Property and equipment | 16,341 | ||
Goodwill | 543,674 | ||
Intangible assets | 317,300 | ||
Total assets | 932,865 | ||
Deferred revenue | (32,595 | ) | |
Other current liabilities | (46,150 | ) | |
Long-term debt—related party | (61,498 | ) | |
Deferred income taxes | (9,833 | ) | |
Other long-term liabilities | (1,405 | ) | |
Net assets acquired | $ | 781,384 |
Angie's List | |||||
(In thousands) | Weighted-average useful life (years) | ||||
Indefinite-lived trade name and trademarks | $ | 137,000 | Indefinite | ||
Service professionals | 90,500 | 3 | |||
Developed technology | 63,900 | 6 | |||
Memberships | 15,900 | 3 | |||
User base | 10,000 | 1 | |||
Total identifiable intangible assets acquired | $ | 317,300 |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Revenue | $ | 3,529,600 | $ | 3,429,105 | |||
Net earnings (loss) attributable to IAC shareholders | $ | 364,496 | $ | (143,133 | ) | ||
Basic earnings (loss) per share attributable to IAC shareholders | $ | 4.55 | $ | (1.79 | ) | ||
Diluted earnings (loss) per share attributable to IAC shareholders | $ | 4.27 | $ | (1.79 | ) |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Goodwill | $ | 2,559,066 | $ | 1,924,052 | |||
Intangible assets with indefinite lives | 459,143 | 320,645 | |||||
Intangible assets with definite lives, net of accumulated amortization | 204,594 | 34,806 | |||||
Total goodwill and intangible assets, net | $ | 3,222,803 | $ | 2,279,503 |
Balance at December 31, 2016 | Additions | (Deductions) | Foreign Exchange Translation | Balance at December 31, 2017 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Match Group | $ | 1,206,538 | $ | 255 | $ | — | $ | 41,106 | $ | 1,247,899 | |||||||||
ANGI Homeservices | 170,611 | 590,772 | — | 6,934 | 768,317 | ||||||||||||||
Video | 25,239 | 70,369 | — | — | 95,608 | ||||||||||||||
Applications | 447,242 | — | — | — | 447,242 | ||||||||||||||
Other | 74,422 | — | (74,430 | ) | 8 | — | |||||||||||||
Total | $ | 1,924,052 | $ | 661,396 | $ | (74,430 | ) | $ | 48,048 | $ | 2,559,066 |
Balance at December 31, 2015 | Additions | Deductions | Impairment | Foreign Exchange Translation | Balance at December 31, 2016 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Match Group | $ | 1,218,607 | $ | 603 | $ | (2,983 | ) | $ | — | $ | (9,689 | ) | $ | 1,206,538 | |||||||||
ANGI Homeservices | 150,251 | 21,985 | — | — | (1,625 | ) | 170,611 | ||||||||||||||||
Video | 15,590 | 9,649 | — | — | — | 25,239 | |||||||||||||||||
Applications | 447,242 | — | — | — | — | 447,242 | |||||||||||||||||
Publishing | 277,192 | — | (1,968 | ) | (275,367 | ) | 143 | — | |||||||||||||||
Other | 136,482 | — | (62,860 | ) | — | 800 | 74,422 | ||||||||||||||||
Total | $ | 2,245,364 | $ | 32,237 | $ | (67,811 | ) | $ | (275,367 | ) | $ | (10,371 | ) | $ | 1,924,052 |
December 31, 2017 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Weighted-Average Useful Life (Years) | ||||||||||
(In thousands) | |||||||||||||
Contractor and service professional relationships and other | $ | 102,997 | $ | (13,252 | ) | $ | 89,745 | 3.0 | |||||
Technology | 115,200 | (37,357 | ) | 77,843 | 4.8 | ||||||||
Customer lists and user base | 23,468 | (5,401 | ) | 18,067 | 2.2 | ||||||||
Content | 5,000 | (3,973 | ) | 1,027 | 5.0 | ||||||||
Trade names | 16,986 | (13,634 | ) | 3,352 | 2.6 | ||||||||
Memberships | 15,900 | (1,340 | ) | 14,560 | 3.0 | ||||||||
Total | $ | 279,551 | $ | (74,957 | ) | $ | 204,594 | 3.7 |
December 31, 2016 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Weighted-Average Useful Life (Years) | ||||||||||
(In thousands) | |||||||||||||
Contractor relationships and other | $ | 7,230 | $ | (2,612 | ) | $ | 4,618 | 4.5 | |||||
Technology | 38,602 | (27,667 | ) | 10,935 | 3.4 | ||||||||
Customer lists and user base | 12,485 | (9,997 | ) | 2,488 | 3.7 | ||||||||
Content | 14,802 | (8,965 | ) | 5,837 | 4.3 | ||||||||
Trade names | 63,855 | (52,927 | ) | 10,928 | 1.8 | ||||||||
Total | $ | 136,974 | $ | (102,168 | ) | $ | 34,806 | 2.8 |
Years Ending December 31, | (In thousands) | ||
2018 | $ | 72,395 | |
2019 | 56,624 | ||
2020 | 44,438 | ||
2021 | 12,529 | ||
2022 | 10,650 | ||
Thereafter | 7,958 | ||
Total | $ | 204,594 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Commercial paper | $ | 4,995 | $ | — | $ | — | $ | 4,995 | |||||||
Total marketable securities | $ | 4,995 | $ | — | $ | — | $ | 4,995 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Commercial paper | $ | 49,797 | $ | — | $ | — | $ | 49,797 | |||||||
Treasury discount notes | 34,978 | — | (4 | ) | 34,974 | ||||||||||
Corporate debt securities | 4,575 | 2 | (6 | ) | 4,571 | ||||||||||
Total marketable securities | $ | 89,350 | $ | 2 | $ | (10 | ) | $ | 89,342 |
December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Proceeds from maturities and sales of available-for-sale marketable securities | $ | 114,350 | $ | 279,485 | $ | 218,976 | |||||
Gross realized gains | — | 3,556 | 443 |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Cost method investments | $ | 63,418 | $ | 116,133 | |||
Equity method investments | 1,559 | 6,677 | |||||
Total long-term investments | $ | 64,977 | $ | 122,810 |
December 31, 2017 | |||||||||||||||
Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value Measurements | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 780,425 | $ | — | $ | — | $ | 780,425 | |||||||
Time deposits | — | 60,000 | — | 60,000 | |||||||||||
Treasury discount notes | 100,457 | — | — | 100,457 | |||||||||||
Commercial paper | — | 215,325 | — | 215,325 | |||||||||||
Certificates of deposit | — | 6,195 | — | 6,195 | |||||||||||
Marketable securities: | |||||||||||||||
Commercial paper | — | 4,995 | — | 4,995 | |||||||||||
Total | $ | 880,882 | $ | 286,515 | $ | — | $ | 1,167,397 | |||||||
Liabilities: | |||||||||||||||
Contingent consideration arrangements | $ | — | $ | — | $ | (2,647 | ) | $ | (2,647 | ) |
December 31, 2016 | |||||||||||||||
Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value Measurements | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 667,662 | $ | — | $ | — | $ | 667,662 | |||||||
Time deposits | — | 79,000 | — | 79,000 | |||||||||||
Treasury discount notes | 24,991 | — | — | 24,991 | |||||||||||
Commercial paper | — | 123,640 | 123,640 | ||||||||||||
Marketable securities: | |||||||||||||||
Commercial paper | — | 49,797 | 49,797 | ||||||||||||
Treasury discount notes | 34,974 | — | — | 34,974 | |||||||||||
Corporate debt securities | — | 4,571 | — | 4,571 | |||||||||||
Total | $ | 727,627 | $ | 257,008 | $ | — | $ | 984,635 | |||||||
Liabilities: | |||||||||||||||
Contingent consideration arrangements | $ | — | $ | — | $ | (33,871 | ) | $ | (33,871 | ) |
For the Year Ended December 31, | |||||||||||
2017 | 2016 | ||||||||||
Contingent Consideration Arrangements | Auction Rate Security | Contingent Consideration Arrangements | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | (33,871 | ) | $ | 4,050 | $ | (33,873 | ) | |||
Total net (losses) gains: | |||||||||||
Included in earnings: | |||||||||||
Fair value adjustments | (5,801 | ) | — | (2,555 | ) | ||||||
Included in other comprehensive (loss) income | (1,404 | ) | 5,950 | (1,571 | ) | ||||||
Fair value at date of acquisition | — | — | (185 | ) | |||||||
Settlements | 38,429 | — | 2,180 | ||||||||
Proceeds from sale | — | (10,000 | ) | — | |||||||
Other | — | — | 2,133 | ||||||||
Balance at December 31 | $ | (2,647 | ) | $ | — | $ | (33,871 | ) |
December 31, 2017 | December 31, 2016 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Current portion of long-term debt | $ | (13,750 | ) | $ | (13,802 | ) | $ | (20,000 | ) | $ | (20,311 | ) | |||
Long-term debt, net | (1,979,469 | ) | (2,168,108 | ) | (1,582,484 | ) | (1,657,861 | ) |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Match Group Debt: | |||||||
Match Group Term Loan due November 16, 2022 | $ | 425,000 | $ | 350,000 | |||
6.75% Senior Notes due December 15, 2022 (the "Match Group 6.75% Senior Notes"); interest payable each June 15 and December 15 | — | 445,172 | |||||
6.375% Senior Notes due June 1, 2024 (the "Match Group 6.375% Senior Notes"); interest payable each June 1 and December 1 | 400,000 | 400,000 | |||||
5.00% Senior Notes due December 15, 2027 (the "Match Group 5.00% Senior Notes"); interest payable each June 15 and December 15, which commences on June 15, 2018 | 450,000 | — | |||||
Total Match Group long-term debt | 1,275,000 | 1,195,172 | |||||
Less: unamortized original issue discount and original issue premium, net | 8,668 | 5,245 | |||||
Less: unamortized debt issuance costs | 13,636 | 13,434 | |||||
Total Match Group debt, net | 1,252,696 | 1,176,493 | |||||
ANGI Homeservices Debt: | |||||||
ANGI Homeservices Term Loan due November 1, 2022 | 275,000 | — | |||||
Less: current portion of ANGI Homeservices long-term debt | 13,750 | — | |||||
Less: unamortized debt issuance costs | 2,938 | — | |||||
Total ANGI Homeservices debt | 258,312 | — | |||||
IAC Debt: | |||||||
0.875% Exchangeable Senior Notes due October 1, 2022 (the "Exchangeable Notes"); interest payable each April 1 and October 1, which commences on April 1, 2018 | 517,500 | — | |||||
4.75% Senior Notes due December 15, 2022 (the "4.75% Senior Notes"); interest payable each June 15 and December 15 | 34,859 | 38,109 | |||||
4.875% Senior Notes due November 30, 2018 (the "4.875% Senior Notes"); interest payable each May 30 and November 30 | — | 390,214 | |||||
Total IAC long-term debt | 552,359 | 428,323 | |||||
Less: current portion of IAC long-term debt | — | 20,000 | |||||
Less: unamortized original issue discount | 67,158 | — | |||||
Less: unamortized debt issuance costs | 16,740 | 2,332 | |||||
Total IAC debt, net | 468,461 | 405,991 | |||||
Total long-term debt, net | $ | 1,979,469 | $ | 1,582,484 |
Year | Percentage | |
2019 | 104.781 | % |
2020 | 103.188 | % |
2021 | 101.594 | % |
2022 and thereafter | 100.000 | % |
Year | Percentage | |
2022 | 102.500 | % |
2023 | 101.667 | % |
2024 | 100.833 | % |
2025 and thereafter | 100.000 | % |
• | used to pay the net premium of $50.7 million on the Exchangeable Note Hedge and Warrant (defined below); and |
• | loaned to IAC, which repaid the outstanding balance of the 4.875% Senior Notes of $361.9 million, plus accrued interest of $8.8 million. The 4.875% Senior Notes were redeemed on November 30, 2017. |
Year | Percentage | |
2018 | 101.583 | % |
2019 | 100.792 | % |
2020 and thereafter | 100.000 | % |
Years Ending December 31, | (In thousands) | ||
2018 | $ | 13,750 | |
2019 | 13,750 | ||
2020 | 13,750 | ||
2021 | 27,500 | ||
2022 | 1,183,609 | ||
2024 | 400,000 | ||
2027 | 450,000 | ||
Total | 2,102,359 | ||
Less: current portion of long-term debt | 13,750 | ||
Less: unamortized original issue discount | 75,826 | ||
Less: unamortized debt issuance costs | 33,314 | ||
Total long-term debt, net | $ | 1,979,469 |
Year Ended December 31, 2017 | |||||||||||
Foreign Currency Translation Adjustment | Unrealized Gains On Available-For-Sale Securities | Accumulated Other Comprehensive (Loss) Income | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | (170,149 | ) | $ | 4,026 | $ | (166,123 | ) | |||
Other comprehensive income before reclassifications | 65,908 | 7 | 65,915 | ||||||||
Amounts reclassified to earnings | 673 | (4,033 | ) | (a) | (3,360 | ) | |||||
Net current period other comprehensive income (loss) | 66,581 | (4,026 | ) | 62,555 | |||||||
Balance at December 31 | $ | (103,568 | ) | $ | — | $ | (103,568 | ) |
(a) | Amount includes a tax benefit of $3.8 million. |
Year Ended December 31, 2016 | |||||||||||
Foreign Currency Translation Adjustment | Unrealized Gains On Available-For-Sale Securities | Accumulated Other Comprehensive (Loss) Income | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | (154,645 | ) | $ | 2,542 | $ | (152,103 | ) | |||
Other comprehensive (loss) income before reclassifications, net of tax benefit of $0.7 million related to unrealized losses on available-for-sale securities | (46,943 | ) | 4,855 | (42,088 | ) | ||||||
Amounts reclassified to earnings | 9,850 | (2,913 | ) | (b) | 6,937 | ||||||
Net current period other comprehensive (loss) income | (37,093 | ) | 1,942 | (35,151 | ) | ||||||
Reallocation of accumulated other comprehensive loss (income) related to the noncontrolling interests created in the Match Group IPO | 21,589 | (458 | ) | 21,131 | |||||||
Balance at December 31 | $ | (170,149 | ) | $ | 4,026 | $ | (166,123 | ) |
Year Ended December 31, 2015 | |||||||||||
Foreign Currency Translation Adjustment | Unrealized (Losses) Gain On Available-For-Sale Securities | Accumulated Other Comprehensive Loss | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | (86,848 | ) | $ | (852 | ) | $ | (87,700 | ) | ||
Other comprehensive (loss) income before reclassifications, net of tax provision of $0.6 million related to unrealized gains on available-for-sale securities | (65,606 | ) | 3,537 | (62,069 | ) | ||||||
Amounts reclassified to earnings | (2,191 | ) | (143 | ) | (c) | (2,334 | ) | ||||
Net current period other comprehensive (loss) income | (67,797 | ) | 3,394 | (64,403 | ) | ||||||
Balance at December 31 | $ | (154,645 | ) | $ | 2,542 | $ | (152,103 | ) |
Years Ended December 31, | |||||||||||||||||||||||
2017 | 2016 | 2015 | |||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net earnings (loss) | $ | 358,008 | $ | 358,008 | $ | (16,151 | ) | $ | (16,151 | ) | $ | 113,374 | $ | 113,374 | |||||||||
Net (earnings) loss attributable to noncontrolling interests | (53,084 | ) | (53,084 | ) | (25,129 | ) | (25,129 | ) | 6,098 | 6,098 | |||||||||||||
Impact from public subsidiaries' dilutive securities (a) | — | (33,531 | ) | — | — | — | (1,799 | ) | |||||||||||||||
Net earnings (loss) attributable to IAC shareholders | $ | 304,924 | $ | 271,393 | $ | (41,280 | ) | $ | (41,280 | ) | $ | 119,472 | $ | 117,673 | |||||||||
Denominator: | |||||||||||||||||||||||
Weighted average basic shares outstanding | 80,089 | 80,089 | 80,045 | 80,045 | 82,944 | 82,944 | |||||||||||||||||
Dilutive securities (b) (c) (d) (e) (f) (g) | — | 5,221 | — | — | — | 5,323 | |||||||||||||||||
Denominator for earnings per share—weighted average shares(b) (c) (d) (e) (f) (g) | 80,089 | 85,310 | 80,045 | 80,045 | 82,944 | 88,267 | |||||||||||||||||
Earnings (loss) per share attributable to IAC shareholders: | |||||||||||||||||||||||
Earnings (loss) per share | $ | 3.81 | $ | 3.18 | $ | (0.52 | ) | $ | (0.52 | ) | $ | 1.44 | $ | 1.33 |
(a) | The amount for the years ended December 31, 2017 and 2015 reflects the reduction in Match Group's earnings (after its IPO on November 24, 2015) attributable to IAC from the assumed exercise of Match Group dilutive securities under the if-converted method. For the year ended December 31, 2016, the impact on earnings related to Match Group's dilutive securities under the if-converted method is excluded because it would have been anti-dilutive due to the Company's net loss. |
(b) | Dilutive securities for the year ended December 31, 2017, include the impact from the assumed exercise of ANGI Homeservices dilutive securities under the if-converted method, as it is more dilutive for IAC to settle certain ANGI Homeservices equity awards. The impact on earnings of ANGI Homeservices dilutive securities is not applicable for periods prior to the Combination. |
(c) | If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options, warrants and subsidiary denominated equity, conversion of the Company's Exchangeable Notes and vesting of restricted stock units ("RSUs"). For the years ended December 31, 2017 and 2015, 6.9 million and 1.2 million potentially dilutive securities, respectively, are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. |
(d) | For the year ended December 31, 2016, the Company had a loss from operations; therefore, approximately 11.3 million potentially dilutive securities were excluded from computing dilutive earnings per share because the impact would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute all earnings per share amounts. |
(e) | Market-based awards and performance-based stock units (“PSUs”) are considered contingently issuable shares. Shares issuable upon exercise or vesting of market-based awards and PSUs are included in the denominator for earnings per share if (i) the applicable market or performance condition(s) has been met and (ii) the inclusion of the market-based awards and PSUs is dilutive for the respective reporting periods. For the years ended December 31, 2017 and 2015, 0.1 million and 0.6 million shares, respectively, underlying market-based awards and PSUs were excluded from the calculation of diluted earnings per share because the market or performance conditions had not been met. |
(f) | It is the Company's intention to settle the Exchangeable Notes through a combination of cash, equal to the face amount of the notes, and shares; the Exchangeable Notes will only become dilutive once the price of IAC common stock exceeds the approximate $152.18 per share exchange price of the Exchangeable Notes. |
(g) | See "Note 13—Stock-based Compensation" for additional information on equity instruments denominated in the shares of certain subsidiaries. |
December 31, 2017 | ||||||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||
(Shares and intrinsic value in thousands) | ||||||||||||
Options outstanding at January 1, 2017 | 8,058 | $ | 52.41 | |||||||||
Granted | 1,153 | 76.62 | ||||||||||
Exercised | (2,443 | ) | 41.30 | |||||||||
Forfeited | (179 | ) | 59.34 | |||||||||
Expired | (3 | ) | 56.31 | |||||||||
Options outstanding at December 31, 2017 | 6,586 | $ | 60.57 | 7.0 | $ | 406,527 | ||||||
Options exercisable | 2,920 | $ | 55.28 | 5.6 | $ | 195,677 |
Options Outstanding | Options Exercisable | |||||||||||||||||
Range of Exercise Prices | Outstanding at December 31, 2017 | Weighted- Average Remaining Contractual Life in Years | Weighted- Average Exercise Price | Exercisable at December 31, 2017 | Weighted- Average Remaining Contractual Life in Years | Weighted- Average Exercise Price | ||||||||||||
(Shares in thousands) | ||||||||||||||||||
$10.01 to $20.00 | 38 | 0.9 | $ | 16.67 | 38 | 0.9 | $ | 16.67 | ||||||||||
$20.01 to $30.00 | 66 | 1.5 | 21.15 | 66 | 1.5 | 21.15 | ||||||||||||
$30.01 to $40.00 | 415 | 3.3 | 32.31 | 415 | 3.3 | 32.31 | ||||||||||||
$40.01 to $50.00 | 1,862 | 6.8 | 43.42 | 870 | 5.3 | 44.86 | ||||||||||||
$50.01 to $60.00 | 263 | 4.0 | 59.47 | 259 | 4.0 | 59.48 | ||||||||||||
$60.01 to $70.00 | 1,474 | 7.2 | 65.00 | 615 | 6.9 | 65.49 | ||||||||||||
$70.01 to $80.00 | 1,952 | 8.4 | 75.30 | 407 | 7.3 | 74.16 | ||||||||||||
$80.01 to $90.00 | 500 | 7.3 | 84.31 | 250 | 7.3 | 84.31 | ||||||||||||
Greater than $90.01 | 16 | 9.9 | 125.06 | — | — | — | ||||||||||||
6,586 | 7.0 | $ | 60.57 | 2,920 | 5.6 | $ | 55.28 |
Years Ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
Expected volatility | 29 | % | 29 | % | 28 | % | ||
Risk-free interest rate | 2.0 | % | 1.2 | % | 1.6 | % | ||
Expected term | 5.2 years | 4.8 years | 5.3 years | |||||
Dividend yield | — | % | — | % | 2.0 | % |
RSUs | PSUs | ||||||||||||
Number of shares | Weighted Average Grant Date Fair Value | Number of shares | Weighted Average Grant Date Fair Value | ||||||||||
(Shares in thousands) | |||||||||||||
Unvested at January 1, 2017 | 526 | $ | 57.41 | — | $ | — | |||||||
Granted | 174 | 100.54 | 130 | 76.00 | |||||||||
Vested | (340 | ) | 54.66 | — | — | ||||||||
Forfeited | — | — | — | — | |||||||||
Unvested at December 31, 2017 | 360 | $ | 80.81 | 130 | $ | 76.00 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Revenue: | |||||||||||
Match Group | $ | 1,330,661 | $ | 1,118,110 | $ | 909,705 | |||||
ANGI Homeservices | 736,386 | 498,890 | 361,201 | ||||||||
Video | 276,994 | 228,649 | 213,317 | ||||||||
Applications | 577,998 | 604,140 | 760,748 | ||||||||
Publishing | 361,837 | 407,313 | 691,686 | ||||||||
Other(a) | 23,980 | 283,365 | 294,821 | ||||||||
Inter-segment elimination | (617 | ) | (585 | ) | (545 | ) | |||||
Total | $ | 3,307,239 | $ | 3,139,882 | $ | 3,230,933 |
(a) | The Other segment consists of the results of PriceRunner, ShoeBuy and The Princeton Review for periods prior to the sales of these businesses, which occurred on March 18, 2016, December 30, 2016 and March 31, 2017, respectively. Beginning in the second quarter of 2017, as a result of the sales of these businesses, the Other segment does not include any financial results. |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Operating Income (Loss): | |||||||||||
Match Group | $ | 360,517 | $ | 315,549 | $ | 212,981 | |||||
ANGI Homeservices | (149,176 | ) | 25,363 | (1,568 | ) | ||||||
Video | (35,659 | ) | (27,656 | ) | (38,756 | ) | |||||
Applications | 130,176 | 109,663 | 175,145 | ||||||||
Publishing | 15,670 | (334,417 | ) | (26,692 | ) | ||||||
Other | (5,621 | ) | (11,678 | ) | (28,611 | ) | |||||
Corporate | (127,441 | ) | (109,449 | ) | (112,911 | ) | |||||
Total | $ | 188,466 | $ | (32,625 | ) | $ | 179,588 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Adjusted EBITDA:(b) | |||||||||||
Match Group | $ | 468,941 | $ | 403,380 | $ | 284,554 | |||||
ANGI Homeservices | 37,858 | 45,851 | 16,713 | ||||||||
Video | (30,446 | ) | (21,247 | ) | (38,384 | ) | |||||
Applications | 136,757 | 132,276 | 184,258 | ||||||||
Publishing | 31,470 | (7,571 | ) | 87,788 | |||||||
Other | (1,532 | ) | 1,802 | 4,734 | |||||||
Corporate | (67,755 | ) | (53,272 | ) | (53,873 | ) | |||||
Total | $ | 575,293 | $ | 501,219 | $ | 485,790 |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Segment Assets:(c) | |||||||
Match Group | $ | 467,338 | $ | 422,509 | |||
ANGI Homeservices | 264,450 | 74,106 | |||||
Video | 129,855 | 225,519 | |||||
Applications | 345,532 | 98,460 | |||||
Publishing | 182,949 | 398,958 | |||||
Other | — | 15,372 | |||||
Corporate | 873,392 | 822,687 | |||||
Total | $ | 2,263,516 | $ | 2,057,611 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Capital expenditures: | |||||||||||
Match Group | $ | 28,833 | $ | 46,098 | $ | 25,246 | |||||
ANGI Homeservices | 26,837 | 16,660 | 10,170 | ||||||||
Video | 400 | 2,508 | 2,466 | ||||||||
Applications | 227 | 1,196 | 4,681 | ||||||||
Publishing | 850 | 2,093 | 6,283 | ||||||||
Other | 536 | 5,712 | 7,085 | ||||||||
Corporate | 17,840 | 3,772 | 6,118 | ||||||||
Total | $ | 75,523 | $ | 78,039 | $ | 62,049 |
(b) | The Company's primary financial measure is Adjusted EBITDA, which is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of (i) amortization of intangible assets and impairments of goodwill and intangible assets, if applicable, and (ii) gains and losses recognized on changes in the fair value of contingent consideration arrangements. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments, and this measure is one of the primary metrics by which our internal budgets are based and by which management is compensated. The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, and we believe that by excluding these items, Adjusted EBITDA corresponds more closely to the cash operating income generated from our business, from which capital investments are made and debt is serviced. Adjusted EBITDA has certain limitations in that it does not take into account the impact to IAC's statement of operations of certain expenses. |
(c) | Consistent with the Company's primary metric (described in (a) above), the Company excludes, if applicable, property and equipment, goodwill and intangible assets from the measure of segment assets presented above. |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Match Group | |||||||||||
Direct revenue | $ | 1,281,249 | $ | 1,067,364 | $ | 866,583 | |||||
Indirect revenue (principally advertising revenue) | 49,412 | 50,746 | 43,122 | ||||||||
Total Match Group revenue | $ | 1,330,661 | $ | 1,118,110 | $ | 909,705 | |||||
ANGI Homeservices | |||||||||||
Marketplace: | |||||||||||
Consumer connection revenue (d) | $ | 521,481 | $ | 382,466 | $ | 269,309 | |||||
Membership subscription revenue | 56,135 | 43,573 | 24,164 | ||||||||
Other revenue | 3,798 | 2,827 | 3,423 | ||||||||
Marketplace revenue | 581,414 | 428,866 | 296,896 | ||||||||
Advertising & Other revenue (e) | 97,483 | 32,981 | 32,971 | ||||||||
North America | 678,897 | 461,847 | 329,867 | ||||||||
Consumer connection revenue (d) | 40,009 | 28,124 | 23,298 | ||||||||
Membership subscription revenue | 16,596 | 7,936 | 6,921 | ||||||||
Advertising and other revenue | 884 | 983 | 1,115 | ||||||||
Europe | 57,489 | 37,043 | 31,334 | ||||||||
Total ANGI Homeservices revenue | $ | 736,386 | $ | 498,890 | $ | 361,201 | |||||
Applications | |||||||||||
Advertising | $ | 515,405 | $ | 552,410 | $ | 728,501 | |||||
Subscription (including downloadable app fees) and Other | 62,593 | 51,730 | 32,247 | ||||||||
Total Applications revenue | $ | 577,998 | $ | 604,140 | $ | 760,748 | |||||
Publishing | |||||||||||
Advertising | $ | 358,472 | $ | 405,031 | $ | 685,440 | |||||
Other | 3,365 | 2,282 | 6,246 | ||||||||
Total Publishing revenue | $ | 361,837 | $ | 407,313 | $ | 691,686 |
(d) | Fees paid by service professionals for consumer matches. |
(e) | Includes Angie's List revenue from service professionals under contract for advertising and Angie's List membership subscription fees from consumers, as well as revenue from mHelpDesk, HomeStars and Felix. |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Revenue | |||||||||||
United States | $ | 2,323,050 | $ | 2,318,976 | $ | 2,376,035 | |||||
All other countries | 984,189 | 820,906 | 854,898 | ||||||||
Total | $ | 3,307,239 | $ | 3,139,882 | $ | 3,230,933 |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Long-lived assets (excluding goodwill and intangible assets) | |||||||
United States | $ | 286,541 | $ | 281,725 | |||
All other countries | 28,629 | 24,523 | |||||
Total | $ | 315,170 | $ | 306,248 |
Year Ended December 31, 2017 | |||||||||||||||||||||||
Operating Income (Loss) | Stock-Based Compensation Expense | Depreciation | Amortization of Intangibles | Acquisition-related Contingent Consideration Fair Value Adjustments | Adjusted EBITDA | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Match Group | $ | 360,517 | $ | 69,090 | $ | 32,613 | $ | 1,468 | $ | 5,253 | $ | 468,941 | |||||||||||
ANGI Homeservices | (149,176 | ) | 149,230 | 14,543 | 23,261 | — | 37,858 | ||||||||||||||||
Video | (35,659 | ) | 401 | 2,167 | 2,645 | — | (30,446 | ) | |||||||||||||||
Applications | 130,176 | — | 3,863 | 2,170 | 548 | 136,757 | |||||||||||||||||
Publishing | 15,670 | — | 4,725 | 11,075 | — | 31,470 | |||||||||||||||||
Other | (5,621 | ) | 1,729 | 836 | 1,524 | — | (1,532 | ) | |||||||||||||||
Corporate | (127,441 | ) | 44,168 | 15,518 | — | — | (67,755 | ) | |||||||||||||||
Total | $ | 188,466 | $ | 264,618 | $ | 74,265 | $ | 42,143 | $ | 5,801 | $ | 575,293 | |||||||||||
Interest expense | (105,295 | ) | |||||||||||||||||||||
Other expense, net | (16,213 | ) | |||||||||||||||||||||
Earnings before income taxes | 66,958 | ||||||||||||||||||||||
Income tax benefit | 291,050 | ||||||||||||||||||||||
Net earnings | 358,008 | ||||||||||||||||||||||
Net earnings attributable to noncontrolling interests | (53,084 | ) | |||||||||||||||||||||
Net earnings attributable to IAC shareholders | $ | 304,924 |
Year Ended December 31, 2016 | |||||||||||||||||||||||||||
Operating Income (Loss) | Stock-Based Compensation Expense | Depreciation | Amortization of Intangibles | Acquisition-related Contingent Consideration Fair Value Adjustments | Goodwill Impairment | Adjusted EBITDA | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Match Group | $ | 315,549 | $ | 52,370 | $ | 27,726 | $ | 16,932 | $ | (9,197 | ) | $ | — | $ | 403,380 | ||||||||||||
ANGI Homeservices | 25,363 | 8,916 | 8,419 | 3,153 | — | — | 45,851 | ||||||||||||||||||||
Video | (27,656 | ) | 640 | 1,785 | 4,176 | (192 | ) | — | (21,247 | ) | |||||||||||||||||
Applications | 109,663 | — | 5,095 | 5,483 | 12,035 | — | 132,276 | ||||||||||||||||||||
Publishing | (334,417 | ) | — | 8,531 | 42,948 | — | 275,367 | (7,571 | ) | ||||||||||||||||||
Other | (11,678 | ) | 618 | 6,219 | 6,734 | (91 | ) | — | 1,802 | ||||||||||||||||||
Corporate | (109,449 | ) | 42,276 | 13,901 | — | — | — | (53,272 | ) | ||||||||||||||||||
Total | (32,625 | ) | $ | 104,820 | $ | 71,676 | $ | 79,426 | $ | 2,555 | $ | 275,367 | $ | 501,219 | |||||||||||||
Interest expense | (109,110 | ) | |||||||||||||||||||||||||
Other income, net | 60,650 | ||||||||||||||||||||||||||
Loss before income taxes | (81,085 | ) | |||||||||||||||||||||||||
Income tax benefit | 64,934 | ||||||||||||||||||||||||||
Net loss | (16,151 | ) | |||||||||||||||||||||||||
Net earnings attributable to noncontrolling interests | (25,129 | ) | |||||||||||||||||||||||||
Net loss attributable to IAC shareholders | $ | (41,280 | ) |
Year Ended December 31, 2015 | |||||||||||||||||||||||||||
Operating Income (Loss) | Stock-Based Compensation Expense | Depreciation | Amortization of Intangibles | Acquisition-related Contingent Consideration Fair Value Adjustments | Goodwill Impairment | Adjusted EBITDA | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Match Group | $ | 212,981 | $ | 49,401 | $ | 19,791 | $ | 13,437 | $ | (11,056 | ) | $ | — | $ | 284,554 | ||||||||||||
ANGI Homeservices | (1,568 | ) | 7,853 | 6,593 | 3,835 | — | — | 16,713 | |||||||||||||||||||
Video | (38,756 | ) | 360 | 1,091 | 1,558 | (2,637 | ) | — | (38,384 | ) | |||||||||||||||||
Applications | 175,145 | — | 4,617 | 6,264 | (1,768 | ) | — | 184,258 | |||||||||||||||||||
Publishing | (26,692 | ) | — | 9,577 | 104,903 | — | — | 87,788 | |||||||||||||||||||
Other | (28,611 | ) | 682 | 8,652 | 9,955 | — | 14,056 | 4,734 | |||||||||||||||||||
Corporate | (112,911 | ) | 47,154 | 11,884 | — | — | — | (53,873 | ) | ||||||||||||||||||
Total | 179,588 | $ | 105,450 | $ | 62,205 | $ | 139,952 | $ | (15,461 | ) | $ | 14,056 | $ | 485,790 | |||||||||||||
Interest expense | (73,636 | ) | |||||||||||||||||||||||||
Other income, net | 36,938 | ||||||||||||||||||||||||||
Earnings before income taxes | 142,890 | ||||||||||||||||||||||||||
Income tax provision | (29,516 | ) | |||||||||||||||||||||||||
Net earnings | 113,374 | ||||||||||||||||||||||||||
Net loss attributable to noncontrolling interests | 6,098 | ||||||||||||||||||||||||||
Net earnings attributable to IAC shareholders | $ | 119,472 |
December 31, 2017 | |||||||||||||||||||||||
Segment Assets | Property and Equipment, Net | Goodwill | Indefinite-Lived Intangible Assets | Definite-Lived Intangible Assets, Net | Total Assets | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Match Group | $ | 467,338 | $ | 61,620 | $ | 1,247,899 | $ | 228,296 | $ | 2,049 | $ | 2,007,202 | |||||||||||
ANGI Homeservices | 264,450 | 53,292 | 768,317 | 153,447 | 175,124 | 1,414,630 | |||||||||||||||||
Video | 129,855 | 3,076 | 95,608 | 1,800 | 23,322 | 253,661 | |||||||||||||||||
Applications | 345,532 | 7,004 | 447,242 | 60,600 | 847 | 861,225 | |||||||||||||||||
Publishing | 182,949 | 5,350 | — | 15,000 | 3,252 | 206,551 | |||||||||||||||||
Other | — | — | — | — | — | — | |||||||||||||||||
Corporate (f) | 873,392 | 184,828 | — | — | — | 1,058,220 | |||||||||||||||||
Total | $ | 2,263,516 | $ | 315,170 | $ | 2,559,066 | $ | 459,143 | $ | 204,594 | 5,801,489 | ||||||||||||
Add: Deferred tax assets (g) | 66,321 | ||||||||||||||||||||||
Total Assets | $ | 5,867,810 |
December 31, 2016 | |||||||||||||||||||||||
Segment Assets | Property and Equipment, Net | Goodwill | Indefinite-Lived Intangible Assets | Definite-Lived Intangible Assets, Net | Total Assets | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Match Group | $ | 422,509 | $ | 62,954 | $ | 1,206,538 | $ | 214,461 | $ | 3,221 | $ | 1,909,683 | |||||||||||
ANGI Homeservices | 74,106 | 23,645 | 170,611 | 4,884 | 5,908 | 279,154 | |||||||||||||||||
Video | 225,519 | 4,750 | 25,239 | 1,800 | 4,167 | 261,475 | |||||||||||||||||
Applications | 98,460 | 10,559 | 447,242 | 60,600 | 2,481 | 619,342 | |||||||||||||||||
Publishing | 398,958 | 10,696 | — | 15,000 | 11,441 | 436,095 | |||||||||||||||||
Other | 15,372 | 6,774 | 74,422 | 23,900 | 7,588 | 128,056 | |||||||||||||||||
Corporate (f) | 822,687 | 186,870 | — | — | — | 1,009,557 | |||||||||||||||||
Total | $ | 2,057,611 | $ | 306,248 | $ | 1,924,052 | $ | 320,645 | $ | 34,806 | 4,643,362 | ||||||||||||
Add: Deferred tax assets (g) | 2,511 | ||||||||||||||||||||||
Total Assets | $ | 4,645,873 |
(f) | Corporate assets consist primarily of cash and cash equivalents, marketable securities and IAC's headquarters building. |
(g) | Total segment assets differ from total assets on a consolidated basis as a result of unallocated deferred tax assets. |
Years Ending December 31, | (In thousands) | ||
2018 | $ | 38,339 | |
2019 | 36,996 | ||
2020 | 30,594 | ||
2021 | 23,253 | ||
2022 | 19,688 | ||
Thereafter | 211,649 | ||
Total | $ | 360,519 |
Amount of Commitment Expiration Per Period | |||||||||||||||||||
Less Than 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | Total Amounts Committed | |||||||||||||||
(In thousands) | |||||||||||||||||||
Purchase obligations | $ | 21,994 | $ | 10,816 | $ | — | $ | — | $ | 32,810 | |||||||||
Letters of credit and surety bonds | 576 | 71 | — | 1,939 | 2,586 | ||||||||||||||
Total commercial commitments | $ | 22,570 | $ | 10,887 | $ | — | $ | 1,939 | $ | 35,396 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Cash paid (received) during the year for: | |||||||||||
Interest | $ | 92,461 | $ | 107,360 | $ | 51,666 | |||||
Income tax payments | 35,598 | 69,103 | 70,762 | ||||||||
Income tax refunds | (42,025 | ) | (23,877 | ) | (5,619 | ) |
• | A Master Transaction Agreement, under which Match Group agrees to assume all of the assets and liabilities related to its business and agrees to indemnify IAC against any losses arising out of any breach by Match Group of the Master Transaction Agreement or other IPO related agreements; |
• | An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of Match Group's common stock and (ii) anti-dilution rights with respect to Match Group's common stock; |
• | An Employee Matters Agreement, which governs the respective rights, responsibilities and obligations of IAC and Match Group after the IPO with respect to a range of compensation and benefit issues; |
• | A Tax Sharing Agreement, which governs the respective rights, responsibilities and obligations of IAC and Match Group with respect to tax liabilities and benefits, entitlement to refunds, preparation of tax returns, tax contests and other tax matters regarding U.S. federal, state, local and foreign income taxes; and |
• | A Services Agreement, under which IAC has agreed to provide a range of services to Match Group, including, among others, (i) assistance with certain legal, finance, internal audit, treasury, information technology support, insurance and tax affairs, including assistance with certain public company reporting obligations; (ii) payroll processing services; (iii) tax compliance services; and (iv) such other services as to which IAC and Match Group may agree, and Match Group agrees to provide IAC informational technology services and such other services as to which IAC and Match Group may agree. |
• | A Contribution Agreement under which the Company separated its HomeAdvisor business from its other businesses and caused the HomeAdvisor business to be transferred to ANGI Homeservices prior to the Combination. Under the Contribution Agreement, ANGI Homeservices agrees to indemnify IAC against any losses arising out of any breach by ANGI Homeservices of the Contribution Agreement; |
• | An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of ANGI Homeservices' common stock owned by IAC; (ii) anti-dilution rights with respect to ANGI Homeservices' common stock; and (iii) specified board matters with respect to designation of ANGI Homeservices directors; |
• | A Services Agreement, under which IAC has agreed to provide a range of services to ANGI Homeservices, including, among others, (i) assistance with certain legal, M&A, human resources, finance, risk management, internal audit and treasury functions, health and wellness, information security services and insurance and tax affairs, including assistance with certain public company and unclaimed property reporting obligations; (ii) accounting, controllership and payroll processing services; (iii) investor relations services; (iv) tax compliance services; and (iv) such other services as to which IAC and ANGI Homeservices may agree. |
• | A Tax Sharing Agreement, which governs the respective rights, responsibilities and obligations of IAC and ANGI Homeservices with respect to tax matters, including taxes attributable to ANGI Homeservices, entitlement to refunds, allocation of tax attributes, preparation of tax returns, certain tax elections, control of tax contests and other tax matters regarding U.S. federal, state, local and foreign income taxes; and |
• | An Employee Matters Agreement, which governs the respective rights, responsibilities and obligations of IAC and ANGI Homeservices after the closing of the Combination with respect to a range of compensation and benefit issues. |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Other current assets: | |||||||
Prepaid expenses | $ | 49,350 | $ | 37,665 | |||
Income taxes receivable | 33,239 | 41,352 | |||||
Capitalized downloadable search toolbar costs, net | 31,588 | 28,737 | |||||
Production costs | 18,570 | 39,763 | |||||
Other | 52,627 | 56,551 | |||||
Other current assets | $ | 185,374 | $ | 204,068 |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Property and equipment, net of accumulated depreciation and amortization: | |||||||
Buildings and leasehold improvements | $ | 252,511 | $ | 247,563 | |||
Computer equipment and capitalized software | 218,529 | 275,455 | |||||
Furniture and other equipment | 88,930 | 94,555 | |||||
Projects in progress | 19,094 | 13,048 | |||||
Land | 7,917 | 5,117 | |||||
586,981 | 635,738 | ||||||
Accumulated depreciation and amortization | (271,811 | ) | (329,490 | ) | |||
Property and equipment, net of accumulated depreciation and amortization | $ | 315,170 | $ | 306,248 |
December 31, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Accrued expenses and other current liabilities: | |||||||
Accrued employee compensation and benefits | $ | 108,431 | $ | 106,301 | |||
Accrued advertising expense | 96,445 | 68,916 | |||||
Other | 162,048 | 169,693 | |||||
Accrued expenses and other current liabilities | $ | 366,924 | $ | 344,910 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Revenue: | |||||||||||
Service revenue | $ | 3,302,937 | $ | 2,967,474 | $ | 3,077,080 | |||||
Product revenue | 4,302 | 172,408 | 153,853 | ||||||||
Revenue | $ | 3,307,239 | $ | 3,139,882 | $ | 3,230,933 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Cost of revenue: | |||||||||||
Cost of service revenue | $ | 647,226 | $ | 617,058 | $ | 652,137 | |||||
Cost of product revenue | 3,782 | 138,672 | 126,024 | ||||||||
Cost of revenue | $ | 651,008 | $ | 755,730 | $ | 778,161 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Other (expense) income, net | $ | (16,213 | ) | $ | 60,650 | $ | 36,938 |
Year Ended December 31, 2017 | |||
(In thousands) | |||
Transaction and integration related costs | $ | 44,101 | |
Stock-based compensation expense | 122,066 | ||
Total | $ | 166,167 |
December 31, 2017 | |||
(In thousands) | |||
Charges incurred | $ | 44,101 | |
Payments made | (35,621 | ) | |
Accrual as of December 31 | $ | 8,480 |
Year Ended December 31, 2017 | |||||||||||
Transaction and Integration Related Costs | Stock-based Compensation Expense | Total | |||||||||
(In thousands) | |||||||||||
Cost of revenue | $ | — | $ | — | $ | — | |||||
Selling and marketing expense | 7,430 | 24,416 | 31,846 | ||||||||
General and administrative expense | 36,120 | 83,420 | 119,540 | ||||||||
Product development expense | 551 | 14,230 | 14,781 | ||||||||
Total | $ | 44,101 | $ | 122,066 | $ | 166,167 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 585,639 | $ | — | $ | 1,045,170 | $ | — | $ | 1,630,809 | |||||||||
Marketable securities | 4,995 | — | — | — | 4,995 | ||||||||||||||
Accounts receivable, net of allowance | 31 | 109,289 | 194,707 | — | 304,027 | ||||||||||||||
Other current assets | 49,159 | 33,387 | 102,828 | — | 185,374 | ||||||||||||||
Intercompany receivables | — | 668,703 | — | (668,703 | ) | — | |||||||||||||
Property and equipment, net of accumulated depreciation and amortization | 2,811 | 174,323 | 138,036 | — | 315,170 | ||||||||||||||
Goodwill | — | 412,010 | 2,147,056 | — | 2,559,066 | ||||||||||||||
Intangible assets, net of accumulated amortization | — | 74,852 | 588,885 | — | 663,737 | ||||||||||||||
Investment in subsidiaries | 2,076,004 | 554,998 | — | (2,631,002 | ) | — | |||||||||||||
Other non-current assets | 170,073 | 87,306 | 79,688 | (132,435 | ) | 204,632 | |||||||||||||
Total assets | $ | 2,888,712 | $ | 2,114,868 | $ | 4,296,370 | $ | (3,432,140 | ) | $ | 5,867,810 | ||||||||
Current portion of long-term debt | $ | — | $ | — | $ | 13,750 | $ | — | $ | 13,750 | |||||||||
Accounts payable, trade | 5,163 | 30,469 | 40,939 | — | 76,571 | ||||||||||||||
Other current liabilities | 29,489 | 88,050 | 591,868 | — | 709,407 | ||||||||||||||
Long-term debt, net | 34,572 | — | 1,944,897 | — | 1,979,469 | ||||||||||||||
Income taxes payable | 16 | 1,605 | 24,003 | — | 25,624 | ||||||||||||||
Intercompany liabilities | 388,933 | — | 279,770 | (668,703 | ) | — | |||||||||||||
Other long-term liabilities | 511 | 18,613 | 186,610 | (132,435 | ) | 73,299 | |||||||||||||
Redeemable noncontrolling interests | — | — | 42,867 | — | 42,867 | ||||||||||||||
IAC shareholders' equity | 2,430,028 | 1,976,131 | 654,871 | (2,631,002 | ) | 2,430,028 | |||||||||||||
Noncontrolling interests | — | — | 516,795 | — | 516,795 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 2,888,712 | $ | 2,114,868 | $ | 4,296,370 | $ | (3,432,140 | ) | $ | 5,867,810 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 553,643 | $ | — | $ | 775,544 | $ | — | $ | 1,329,187 | |||||||||
Marketable securities | 89,342 | — | — | — | 89,342 | ||||||||||||||
Accounts receivable, net of allowance | — | 77,335 | 142,803 | — | 220,138 | ||||||||||||||
Other current assets | 71,152 | 48,349 | 84,567 | — | 204,068 | ||||||||||||||
Intercompany receivables | — | 565,013 | 1,209,788 | (1,774,801 | ) | — | |||||||||||||
Property and equipment, net of accumulated depreciation and amortization | 4,350 | 199,343 | 102,555 | — | 306,248 | ||||||||||||||
Goodwill | — | 412,010 | 1,512,042 | — | 1,924,052 | ||||||||||||||
Intangible assets, net of accumulated amortization | — | 83,179 | 272,272 | — | 355,451 | ||||||||||||||
Investment in subsidiaries | 3,659,570 | 498,054 | — | (4,157,624 | ) | — | |||||||||||||
Other non-current assets | 52,228 | 118,624 | 162,008 | (115,473 | ) | 217,387 | |||||||||||||
Total assets | $ | 4,430,285 | $ | 2,001,907 | $ | 4,261,579 | $ | (6,047,898 | ) | $ | 4,645,873 | ||||||||
Current portion of long-term debt | $ | 20,000 | $ | — | $ | — | $ | — | $ | 20,000 | |||||||||
Accounts payable, trade | 2,697 | 29,867 | 30,299 | — | 62,863 | ||||||||||||||
Other current liabilities | 42,160 | 84,827 | 503,538 | — | 630,525 | ||||||||||||||
Long-term debt, net | 405,991 | — | 1,176,493 | — | 1,582,484 | ||||||||||||||
Income taxes payable | — | 3,470 | 30,274 | (216 | ) | 33,528 | |||||||||||||
Intercompany liabilities | 1,774,801 | — | — | (1,774,801 | ) | — | |||||||||||||
Other long-term liabilities | 315,414 | 21,002 | 51,817 | (115,257 | ) | 272,976 | |||||||||||||
Redeemable noncontrolling interests | — | — | 32,827 | — | 32,827 | ||||||||||||||
IAC shareholders' equity | 1,869,222 | 1,862,741 | 2,294,883 | (4,157,624 | ) | 1,869,222 | |||||||||||||
Noncontrolling interests | — | — | 141,448 | — | 141,448 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 4,430,285 | $ | 2,001,907 | $ | 4,261,579 | $ | (6,047,898 | ) | $ | 4,645,873 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | — | $ | 753,858 | $ | 2,553,998 | $ | (617 | ) | $ | 3,307,239 | ||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 160 | 159,488 | 491,865 | (505 | ) | 651,008 | |||||||||||||
Selling and marketing expense | 1,250 | 353,186 | 1,027,304 | (519 | ) | 1,381,221 | |||||||||||||
General and administrative expense | 100,237 | 62,340 | 556,273 | 407 | 719,257 | ||||||||||||||
Product development expense | 2,421 | 55,232 | 193,226 | — | 250,879 | ||||||||||||||
Depreciation | 1,564 | 20,668 | 52,033 | — | 74,265 | ||||||||||||||
Amortization of intangibles | — | 11,213 | 30,930 | — | 42,143 | ||||||||||||||
Total operating costs and expenses | 105,632 | 662,127 | 2,351,631 | (617 | ) | 3,118,773 | |||||||||||||
Operating (loss) income | (105,632 | ) | 91,731 | 202,367 | — | 188,466 | |||||||||||||
Equity in earnings of unconsolidated affiliates | 425,675 | 20,755 | — | (446,430 | ) | — | |||||||||||||
Interest expense | (20,339 | ) | — | (84,956 | ) | — | (105,295 | ) | |||||||||||
Other (expense) income, net | (39,207 | ) | 28,434 | (5,440 | ) | — | (16,213 | ) | |||||||||||
Earnings before income taxes | 260,497 | 140,920 | 111,971 | (446,430 | ) | 66,958 | |||||||||||||
Income tax benefit (provision) | 44,427 | (119,957 | ) | 366,580 | — | 291,050 | |||||||||||||
Net earnings | 304,924 | 20,963 | 478,551 | (446,430 | ) | 358,008 | |||||||||||||
Net earnings attributable to noncontrolling interests | — | — | (53,084 | ) | — | (53,084 | ) | ||||||||||||
Net earnings attributable to IAC shareholders | $ | 304,924 | $ | 20,963 | $ | 425,467 | $ | (446,430 | ) | $ | 304,924 | ||||||||
Comprehensive income attributable to IAC shareholders | $ | 367,370 | $ | 7,629 | $ | 504,558 | $ | (512,187 | ) | $ | 367,370 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | — | $ | 960,000 | $ | 2,180,487 | $ | (605 | ) | $ | 3,139,882 | ||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 859 | 297,712 | 457,571 | (412 | ) | 755,730 | |||||||||||||
Selling and marketing expense | 2,353 | 417,051 | 828,016 | (323 | ) | 1,247,097 | |||||||||||||
General and administrative expense | 89,583 | 83,636 | 357,097 | 130 | 530,446 | ||||||||||||||
Product development expense | 4,807 | 69,778 | 138,180 | — | 212,765 | ||||||||||||||
Depreciation | 1,610 | 26,514 | 43,552 | — | 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 | 1,189,093 | 1,884,807 | (605 | ) | 3,172,507 | |||||||||||||
Operating (loss) income | (99,212 | ) | (229,093 | ) | 295,680 | — | (32,625 | ) | |||||||||||
Equity in earnings of unconsolidated affiliates | 49,545 | 6,774 | — | (56,319 | ) | — | |||||||||||||
Interest expense | (26,876 | ) | — | (82,234 | ) | — | (109,110 | ) | |||||||||||
Other (expense) income, net | (1,879 | ) | 10,209 | 52,320 | — | 60,650 | |||||||||||||
(Loss) earnings before income taxes | (78,422 | ) | (212,110 | ) | 265,766 | (56,319 | ) | (81,085 | ) | ||||||||||
Income tax benefit (provision) | 37,142 | 77,851 | (50,059 | ) | — | 64,934 | |||||||||||||
Net (loss) earnings | (41,280 | ) | (134,259 | ) | 215,707 | (56,319 | ) | (16,151 | ) | ||||||||||
Net earnings attributable to noncontrolling interests | — | — | (25,129 | ) | — | (25,129 | ) | ||||||||||||
Net (loss) earnings attributable to IAC shareholders | $ | (41,280 | ) | $ | (134,259 | ) | $ | 190,578 | $ | (56,319 | ) | $ | (41,280 | ) | |||||
Comprehensive (loss) income attributable to IAC shareholders | $ | (76,431 | ) | $ | (142,494 | ) | $ | 145,039 | $ | (2,545 | ) | $ | (76,431 | ) |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | — | $ | 1,355,222 | $ | 1,876,305 | $ | (594 | ) | $ | 3,230,933 | ||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 720 | 341,351 | 436,649 | (559 | ) | 778,161 | |||||||||||||
Selling and marketing expense | 3,210 | 624,979 | 720,172 | (68 | ) | 1,348,293 | |||||||||||||
General and administrative expense | 93,090 | 94,896 | 324,036 | 33 | 512,055 | ||||||||||||||
Product development expense | 4,311 | 73,500 | 118,812 | — | 196,623 | ||||||||||||||
Depreciation | 1,918 | 23,912 | 36,375 | — | 62,205 | ||||||||||||||
Amortization of intangibles | — | 102,622 | 37,330 | — | 139,952 | ||||||||||||||
Goodwill impairment | — | 14,056 | — | — | 14,056 | ||||||||||||||
Total operating costs and expenses | 103,249 | 1,275,316 | 1,673,374 | (594 | ) | 3,051,345 | |||||||||||||
Operating (loss) income | (103,249 | ) | 79,906 | 202,931 | — | 179,588 | |||||||||||||
Equity in earnings of unconsolidated affiliates | 215,080 | 17,353 | — | (232,433 | ) | — | |||||||||||||
Interest expense | (49,405 | ) | (6,130 | ) | (18,101 | ) | — | (73,636 | ) | ||||||||||
Other (expense) income, net | (3,172 | ) | 27,810 | 12,300 | — | 36,938 | |||||||||||||
Earnings before income taxes | 59,254 | 118,939 | 197,130 | (232,433 | ) | 142,890 | |||||||||||||
Income tax benefit (provision) | 60,218 | (42,072 | ) | (47,662 | ) | — | (29,516 | ) | |||||||||||
Net earnings | 119,472 | 76,867 | 149,468 | (232,433 | ) | 113,374 | |||||||||||||
Net loss attributable to noncontrolling interests | — | — | 6,098 | — | 6,098 | ||||||||||||||
Net earnings attributable to IAC shareholders | $ | 119,472 | $ | 76,867 | $ | 155,566 | $ | (232,433 | ) | $ | 119,472 | ||||||||
Comprehensive income attributable to IAC shareholders | $ | 55,069 | $ | 73,970 | $ | 89,158 | $ | (163,128 | ) | $ | 55,069 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | IAC Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (61,002 | ) | $ | 131,581 | $ | 346,111 | $ | 416,690 | ||||||
Cash flows from investing activities: | |||||||||||||||
Acquisitions, net of cash acquired | — | (2,550 | ) | (146,544 | ) | (149,094 | ) | ||||||||
Capital expenditures | (337 | ) | (1,050 | ) | (74,136 | ) | (75,523 | ) | |||||||
Proceeds from maturities and sales of marketable debt securities | 114,350 | — | — | 114,350 | |||||||||||
Purchases of marketable debt securities | (29,891 | ) | — | — | (29,891 | ) | |||||||||
Purchases of investments | — | — | (9,106 | ) | (9,106 | ) | |||||||||
Net proceeds from the sale of businesses and investments | 1,266 | — | 184,512 | 185,778 | |||||||||||
Other, net | — | 1,944 | 1,050 | 2,994 | |||||||||||
Net cash provided by (used in) investing activities | 85,388 | (1,656 | ) | (44,224 | ) | 39,508 | |||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from issuance of IAC debt | — | — | 517,500 | 517,500 | |||||||||||
Principal payments on IAC debt | (393,464 | ) | — | — | (393,464 | ) | |||||||||
Proceeds from issuance of Match Group debt | — | — | 525,000 | 525,000 | |||||||||||
Principal payments on Match Group debt | — | — | (445,172 | ) | (445,172 | ) | |||||||||
Borrowing under ANGI Homeservices Term Loan | — | — | 275,000 | 275,000 | |||||||||||
Purchase of exchangeable note hedge | — | — | (74,365 | ) | (74,365 | ) | |||||||||
Proceeds from issuance of warrants | 23,650 | — | — | 23,650 | |||||||||||
Debt issuance costs | — | — | (33,744 | ) | (33,744 | ) | |||||||||
Purchase of IAC treasury stock | (56,424 | ) | — | — | (56,424 | ) | |||||||||
Proceeds from the exercise of IAC stock options | 82,397 | — | — | 82,397 | |||||||||||
Withholding taxes paid on behalf of IAC employees on net settled stock-based awards | (93,832 | ) | — | — | (93,832 | ) | |||||||||
Proceeds from the exercise of Match Group stock options | — | — | 59,442 | 59,442 | |||||||||||
Withholding taxes paid on behalf of Match Group employees on net settled stock-based awards | — | — | (254,210 | ) | (254,210 | ) | |||||||||
Proceeds from the exercise of ANGI Homeservices stock options | — | — | 1,653 | 1,653 | |||||||||||
Withholding taxes paid on behalf of ANGI employees on net settled stock-based awards | — | — | (10,113 | ) | (10,113 | ) | |||||||||
Purchase of Match Group stock-based awards | — | — | (272,459 | ) | (272,459 | ) | |||||||||
Purchase of noncontrolling interests | — | — | (15,439 | ) | (15,439 | ) | |||||||||
Acquisition-related contingent consideration payments | — | — | (27,289 | ) | (27,289 | ) | |||||||||
Funds returned from escrow for MyHammer tender offer | — | — | 10,604 | 10,604 | |||||||||||
Decrease in restricted cash related to bond redemptions | 20,141 | — | — | 20,141 | |||||||||||
Intercompany | 424,816 | (129,925 | ) | (294,891 | ) | — | |||||||||
Other, net | 251 | — | (5,251 | ) | (5,000 | ) | |||||||||
Net cash provided by (used in) financing activities | 7,535 | (129,925 | ) | (43,734 | ) | (166,124 | ) | ||||||||
Total cash provided | 31,921 | — | 258,153 | 290,074 | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | 75 | — | 11,473 | 11,548 | |||||||||||
Net increase in cash and cash equivalents | 31,996 | — | 269,626 | 301,622 | |||||||||||
Cash and cash equivalents at beginning of period | 553,643 | — | 775,544 | 1,329,187 | |||||||||||
Cash and cash equivalents at end of period | $ | 585,639 | $ | — | $ | 1,045,170 | $ | 1,630,809 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (62,686 | ) | $ | 128,473 | $ | 278,354 | $ | — | $ | 344,141 | ||||||||
Cash flows from investing activities: | |||||||||||||||||||
Acquisitions, net of cash acquired | — | — | (18,403 | ) | — | (18,403 | ) | ||||||||||||
Capital expenditures | (479 | ) | (5,762 | ) | (71,798 | ) | — | (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 | (155,104 | ) | — | — | 155,104 | — | |||||||||||||
Other, net | 126 | 910 | 10,179 | — | 11,215 | ||||||||||||||
Net cash (used in) provided by investing activities | (143,188 | ) | (3,073 | ) | 4,019 | 155,104 | 12,862 | ||||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Principal payments on IAC debt | (126,409 | ) | — | — | — | (126,409 | ) | ||||||||||||
Proceeds from issuance of Match Group debt | — | — | 400,000 | — | 400,000 | ||||||||||||||
Principal payments on Match Group debt | — | — | (450,000 | ) | — | (450,000 | ) | ||||||||||||
Debt issuance costs | — | — | (7,811 | ) | — | (7,811 | ) | ||||||||||||
Purchase of IAC treasury stock | (308,948 | ) | — | — | — | (308,948 | ) | ||||||||||||
Proceeds from the exercise of IAC stock options | 25,821 | — | — | — | 25,821 | ||||||||||||||
Withholding taxes paid on behalf of IAC employees on net settled stock-based awards | (26,716 | ) | — | — | — | (26,716 | ) | ||||||||||||
Proceeds from the exercise of Match Group stock options | — | — | 39,378 | — | 39,378 | ||||||||||||||
Withholding taxes paid on behalf of Match Group employees on net settled stock-based awards | — | — | (29,830 | ) | — | (29,830 | ) | ||||||||||||
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 | 122,965 | (122,965 | ) | 155,104 | (155,104 | ) | — | ||||||||||||
Increase in restricted cash related to bond redemptions | (141 | ) | — | — | — | (141 | ) | ||||||||||||
Other, net | (313 | ) | (2,084 | ) | (308 | ) | — | (2,705 | ) | ||||||||||
Net cash (used in) provided by financing activities | (315,141 | ) | (125,400 | ) | 92,816 | (155,104 | ) | (502,829 | ) | ||||||||||
Total cash (used) provided | (521,015 | ) | — | 375,189 | — | (145,826 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (6,434 | ) | — | (6,434 | ) | ||||||||||||
Net (decrease) increase in cash and cash equivalents | (521,015 | ) | — | 368,755 | — | (152,260 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | 1,074,658 | — | 406,789 | — | 1,481,447 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 553,643 | $ | — | $ | 775,544 | $ | — | $ | 1,329,187 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | IAC Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (121,331 | ) | $ | 242,554 | $ | 284,448 | $ | 405,671 | ||||||
Cash flows from investing activities: | |||||||||||||||
Acquisitions, net of cash acquired | — | (6,078 | ) | (611,324 | ) | (617,402 | ) | ||||||||
Capital expenditures | (1,332 | ) | (13,198 | ) | (47,519 | ) | (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 businesses and investments | 1,277 | — | 8,136 | 9,413 | |||||||||||
Other, net | 3,613 | 385 | (7,539 | ) | (3,541 | ) | |||||||||
Net cash provided by (used in) investing activities | 121,908 | (18,891 | ) | (685,738 | ) | (582,721 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||||
Principal payment on IAC debt | — | (80,000 | ) | — | (80,000 | ) | |||||||||
Proceeds from issuance of Match Group debt | — | — | 788,000 | 788,000 | |||||||||||
Debt issuance costs | (1,876 | ) | — | (17,174 | ) | (19,050 | ) | ||||||||
Fees and expenses related to note exchange | — | — | (6,954 | ) | (6,954 | ) | |||||||||
Proceeds from Match Group initial public offering, net of fees and expenses | — | — | 428,789 | 428,789 | |||||||||||
Purchase of IAC treasury stock | (200,000 | ) | — | — | (200,000 | ) | |||||||||
Dividends | (113,196 | ) | — | — | (113,196 | ) | |||||||||
Proceeds from the exercise of IAC stock options | 27,325 | — | — | 27,325 | |||||||||||
Withholding taxes paid on behalf of IAC employees on net settled stock-based awards | (65,743 | ) | — | — | (65,743 | ) | |||||||||
Purchase of Match Group 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 | ) | ||||||||
Increase in restricted cash related to bond redemptions | (20,000 | ) | — | — | (20,000 | ) | |||||||||
Intercompany | 684,716 | (143,423 | ) | (541,293 | ) | — | |||||||||
Other, net | 166 | — | 441 | 607 | |||||||||||
Net cash provided by (used in) financing activities | 311,392 | (223,663 | ) | 590,661 | 678,390 | ||||||||||
Total cash provided | 311,969 | — | 189,371 | 501,340 | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (10,298 | ) | (10,298 | ) | |||||||||
Net increase in cash and cash equivalents | 311,969 | — | 179,073 | 491,042 | |||||||||||
Cash and cash equivalents at beginning of period | 762,689 | — | 227,716 | 990,405 | |||||||||||
Cash and cash equivalents at end of period | $ | 1,074,658 | $ | — | $ | 406,789 | $ | 1,481,447 |
Quarter Ended March 31 | Quarter Ended June 30 | Quarter Ended September 30(a) (c) | Quarter Ended December 31(b) | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||
Revenue | $ | 760,833 | $ | 767,387 | $ | 828,434 | $ | 950,585 | |||||||
Cost of revenue | 145,958 | 139,033 | 166,290 | 199,727 | |||||||||||
Operating income (loss) | 37,060 | 75,635 | (18,589 | ) | 94,360 | ||||||||||
Net earnings | 28,463 | 80,557 | 225,639 | 23,349 | |||||||||||
Net earnings attributable to IAC shareholders | 26,209 | 66,268 | 179,643 | 32,804 | |||||||||||
Per share information attributable to IAC shareholders: | |||||||||||||||
Basic earnings per share(e) | $ | 0.34 | $ | 0.84 | $ | 2.22 | $ | 0.40 | |||||||
Diluted earnings per share(e) | $ | 0.29 | $ | 0.70 | $ | 1.79 | $ | 0.37 | |||||||
Quarter Ended March 31(d) | Quarter Ended June 30(e) | Quarter Ended September 30 | Quarter Ended December 31(d) | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Year Ended December 31, 2016 | |||||||||||||||
Revenue | $ | 819,179 | $ | 745,439 | $ | 764,102 | $ | 811,162 | |||||||
Cost of revenue | 193,734 | 170,397 | 179,131 | 212,468 | |||||||||||
Operating income (loss) | 21,417 | (252,446 | ) | 85,584 | 112,820 | ||||||||||
Net earnings (loss) | 7,934 | (190,542 | ) | 52,340 | 114,117 | ||||||||||
Net earnings (loss) attributable to IAC shareholders | 8,282 | (194,775 | ) | 43,162 | 102,051 | ||||||||||
Per share information attributable to IAC shareholders: | |||||||||||||||
Basic earnings (loss) per share(e) | $ | 0.10 | $ | (2.45 | ) | $ | 0.54 | $ | 1.29 | ||||||
Diluted earnings (loss) per share(e) | $ | 0.09 | $ | (2.45 | ) | $ | 0.49 | $ | 1.18 |
(a) | The third quarter of 2017 includes after-tax stock-based compensation expense of $60.9 million related primarily to the modification of previously issued HomeAdvisor vested awards, which were converted into ANGI Homeservices equity awards, and the acceleration of certain Angie’s List equity awards in connection with the Combination, as well as after-tax costs of $17.4 million related to the Combination. |
(b) | The fourth quarter of 2017 includes after-tax stock-based compensation expense of $15.8 million related primarily to the modification of previously issued HomeAdvisor unvested awards, which were converted into ANGI Homeservices equity awards, the expense related to previously issued Angie's List equity awards and the acceleration of certain Angie's List equity awards resulting from the termination of employees in connection with the Combination, as well as after-tax costs of $13.9 million related to the Combination (including $7.6 million of deferred revenue write-offs). |
(c) | The third quarter of 2017 includes a reduction to the income tax provision of $257.0 million related to excess tax benefits generated by the exercise, purchase and settlement of stock-based awards. |
(d) | The first quarter and fourth quarter of 2016 include after-tax gains of $11.9 million and $37.5 million related to the sale of PriceRunner and ShoeBuy, respectively. |
(e) | The second quarter of 2016 includes after-tax impairment charges related to goodwill and indefinite-lived intangible assets of $183.5 million and $7.2 million, respectively. |
(f) | Quarterly per share amounts may not add to the related annual per share amount because of differences in the average common shares outstanding during each period. |
Schedule Number | ||
II | Valuation and Qualifying Accounts. |
Exhibit No. | Description | Location | |||
2.1 | Agreement and Plan of Merger, dated as of May 1, 2017, as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of August 26, 2017, by and among Angie’s List, Inc., IAC/InterActiveCorp, ANGI Homeservices Inc. and Casa Merger Sub, Inc. | ||||
2.2 | Stock Purchase Agreement, dated as of July 13, 2015, by and among Match.com Inc., Plentyoffish Media Inc., Markus Frind, Markus Frind Family Trust No. 2 and Frind Enterprises Ltd. | ||||
3.1 | Restated Certificate of Incorporation of IAC/InterActiveCorp. | ||||
3.2 | Certificate of Amendment of the Restated Certificate of Incorporation of IAC/InterActiveCorp (dated as of August 20, 2008). | ||||
3.3 | Amended and Restated By-laws of IAC/InterActiveCorp (amended and restated as of December 1, 2010). | ||||
3.4 | Certificate of Designations of Series C Cumulative Preferred Stock. | ||||
4.1 | Indenture for 4.75% Senior Notes due 2022, dated as of December 21, 2012, among IAC/InterActiveCorp, the Guarantors named therein and Computershare Trust Company, N.A., as Trustee. | ||||
Supplemental Indenture for 4.75% Senior Notes due 2022, dated as of May 30, 2013, among IAC/InterActiveCorp, the Guarantors named therein and Computershare Trust Company, N.A., as Trustee, with a schedule of subsequent Guarantors.(1) | |||||
4.3 | Indenture for 0.875% Senior Exchangeable Notes due 2022, dated as of October 2, 2017, among IAC FinanceCo, Inc., IAC/InterActiveCorp and Computershare Trust Company, N.A., as Trustee. | ||||
4.4 | Indenture, dated June 1, 2016, between Match Group, Inc. and Computershare Trust Company, N.A., as Trustee. | ||||
4.5 | Indenture, dated as of December 4, 2017, between Match Group, Inc. and Computershare Trust Company, N.A., as Trustee. | ||||
10.1 | Amended and Restated Governance Agreement, dated as of August 9, 2005, among the Registrant, Liberty Media Corporation and Barry Diller. | ||||
10.2 | Letter Agreement, dated as of December 1, 2010, by and among the Registrant, Liberty Media Corporation, Liberty USA Holdings, LLC and Barry Diller. | ||||
10.3 | Letter Agreement, dated as of December 1, 2010, by and between the Registrant and Barry Diller. | ||||
10.4 | IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan.(2) | ||||
10.5 | Form of Terms and Conditions for Stock Options granted under the IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan.(2) |
10.6 | Form of Terms and Conditions for Restricted Stock Units granted under the IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan.(2) | ||||
10.7 | IAC/InterActiveCorp 2008 Stock and Annual Incentive Plan.(2) | ||||
10.8 | Form of Terms and Conditions for Stock Options granted under the IAC/InterActiveCorp 2008 Stock and Annual Incentive Plan.(2) | ||||
10.9 | Form of Terms and Conditions for Restricted Stock Units granted under the IAC/InterActiveCorp 2008 Stock and Annual Incentive Plan.(2) | ||||
10.10 | IAC/InterActiveCorp 2005 Stock and Annual Incentive Plan.(2) | ||||
10.11 | Form of Terms and Conditions for Stock Options granted under the IAC/InterActiveCorp 2005 Stock and Annual Incentive Plan.(2) | ||||
10.12 | Summary of Non-Employee Director Compensation Arrangements.(2) | ||||
10.13 | 2011 IAC/InterActiveCorp Deferred Compensation Plan for Non-Employee Directors.(2) |
10.14 | Employment Agreement between Joseph Levin and the Registrant, dated as of November 21, 2017.(2) | ||||
10.15 | Second Amended and Restated Employment Agreement between Victor A. Kaufman and the Registrant, dated as of March 15, 2012.(2) | ||||
10.16 | Employment Agreement between Glenn H. Schiffman and the Registrant, dated as of April 7, 2016.(2) | ||||
10.17 | Employment Agreement between Gregg Winiarski and the Registrant, dated as of February 26, 2010.(2) | ||||
10.18 | Google Services Agreement, dated as of October 26, 2015, between the Registrant and Google Inc.(3) | ||||
10.19 | Amended and Restated Credit Agreement, dated as of October 7, 2015, among IAC/InterActiveCorp, as Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto. | ||||
10.20 | Amendment No. 2, dated as of September 25, 2017, to the Credit Agreement dated as of December 21, 2012, as amended and restated as of October 7, 2015, among IAC/InterActiveCorp, as Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, and the other parties thereto. | ||||
10.21 | Joinder and Reaffirmation Agreement, dated as of October 2, 2107, among IAC/InterActiveCorp, IAC Group, LLC, each of the parties listed on Schedule 1 thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. | ||||
10.22 | Amended and Restated Credit Agreement, dated as of November 16, 2015, among Match Group, Inc., as Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto. |
10.23 | Amendment No. 3, dated as of December 8, 2016, to the Credit Agreement dated as of October 7, 2015, as amended and restated as of November 16, 2015, as further amended as of December 16, 2015, among Match Group, Inc., as Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto. | ||||
10.24 | Amendment No. 4, dated as of August 14, 2017, to the Credit Agreement dated as of October 7, 2015, as amended and restated as of November 16, 2015, as further amended as of December 16, 2015, as further amended December 8, 2016, among Match Group, Inc., as Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto. | ||||
10.25 | Credit Agreement, dated as of November 1, 2017, among ANGI Homeservices Inc., as Borrower, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent. | ||||
10.26 | Registration Rights Agreement, dated as of October 2, 2017, among IAC/InterActiveCorp, IAC FinanceCo, Inc., J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC | ||||
10.27 | Master Transaction Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc.. | ||||
10.28 | Employee Matters Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.29 | Amendment No.1 to Employee Matters Agreement, dated as of April 13, 2016, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.30 | Investor Rights Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.31 | Tax Sharing Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.32 | Services Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.33 | Contribution Agreement, dated as of September 29, 2017, by and between IAC/InterActiveCorp and ANGI Homeservices Inc. | ||||
10.34 | Employee Matters Agreement, dated as of September 29, 2017, by and between IAC/InterActiveCorp and ANGI Homeservices Inc. | ||||
10.35 | Investor Rights Agreement, dated as of September 29, 2017, by and between IAC/InterActiveCorp and ANGI Homeservices Inc. | ||||
10.36 | Tax Sharing Agreement, dated as of September 29, 2017, by and between IAC/InterActiveCorp and ANGI Homeservices Inc. | ||||
10.37 | Services Agreement, dated as of September 29, 2017, by and between IAC/InterActiveCorp and ANGI Homeservices Inc. | ||||
Subsidiaries of the Registrant as of December 31, 2017.(1) | |||||
Consent of Ernst & Young LLP.(1) |
Certification of the Chairman and Senior Executive pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1) | |||||
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1) | |||||
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1) |
Certification of the Chairman and Senior Executive pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(4) | ||||
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(4) | ||||
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(4) | ||||
101.INS | XBRL Instance (1) | |||
101.SCH | XBRL Taxonomy Extension Schema (1) | |||
101.CAL | XBRL Taxonomy Extension Calculation (1) | |||
101.DEF | XBRL Taxonomy Extension Definition (1) | |||
101.LAB | XBRL Taxonomy Extension Labels (1) | |||
101.PRE | XBRL Taxonomy Extension Presentation (1) |
(1) | Filed herewith. |
(2) | Reflects management contracts and management and director compensatory plans. |
(3) | Certain portions of this document have been omitted pursuant to a confidential treatment request. |
(4) | Furnished herewith. |
March 1, 2018 | IAC/INTERACTIVECORP | |||
By: | /s/ GLENN H. SCHIFFMAN | |||
Glenn H. Schiffman | ||||
Executive Vice President and Chief Financial Officer |
Signature | Title | |
/s/ BARRY DILLER | Chairman of the Board, Senior Executive and Director | |
Barry Diller | ||
/s/ JOSEPH LEVIN | Chief Executive Officer and Director | |
Joseph Levin | ||
/s/ VICTOR A. KAUFMAN | Vice Chairman and Director | |
Victor A. Kaufman | ||
/s/ GLENN H. SCHIFFMAN | Executive Vice President and Chief Financial Officer | |
Glenn H. Schiffman | ||
/s/ MICHAEL H. SCHWERDTMAN | Senior Vice President and Controller (Chief Accounting Officer) | |
Michael H. Schwerdtman | ||
/s/ EDGAR BRONFMAN, JR. | Director | |
Edgar Bronfman, Jr. | ||
/s/ CHELSEA CLINTON | Director | |
Chelsea Clinton | ||
/s/ MICHAEL D. EISNER | Director | |
Michael D. Eisner | ||
/s/ BONNIE S. HAMMER | Director | |
Bonnie S. Hammer | ||
/s/ BRYAN LOURD | Director | |
Bryan Lourd | ||
/s/ DAVID S. ROSENBLATT | Director | |
David S. Rosenblatt | ||
/s/ ALAN G. SPOON | Director | |
Alan G. Spoon | ||
/s/ ALEXANDER VON FURSTENBERG | Director | |
Alexander von Furstenberg | ||
/s/ RICHARD F. ZANNINO | Director | |
Richard F. Zannino |
Description | Balance at Beginning of Period | Charges to Earnings | Charges to Other Accounts | Deductions | Balance at End of Period | ||||||||||||||
(In thousands) | |||||||||||||||||||
2017 | |||||||||||||||||||
Allowance for doubtful accounts and revenue reserves | $ | 16,405 | $ | 28,930 | (a) | $ | (1,006 | ) | $ | (32,840 | ) | (d) | $ | 11,489 | |||||
Sales returns accrual | 80 | — | (80 | ) | — | — | |||||||||||||
Deferred tax valuation allowance | 88,170 | 38,144 | (b) | 6,284 | (c) | — | 132,598 | ||||||||||||
Other reserves | 2,822 | 2,544 | |||||||||||||||||
2016 | |||||||||||||||||||
Allowance for doubtful accounts and revenue reserves | $ | 16,528 | $ | 17,733 | (a) | $ | (695 | ) | $ | (17,161 | ) | (d) | $ | 16,405 | |||||
Sales returns accrual | 828 | 14,998 | (962 | ) | (14,784 | ) | 80 | ||||||||||||
Deferred tax valuation allowance | 90,482 | (837 | ) | (e) | (1,475 | ) | (f) | — | 88,170 | ||||||||||
Other reserves | 2,801 | 2,822 | |||||||||||||||||
2015 | |||||||||||||||||||
Allowance for doubtful accounts and revenue reserves | $ | 12,437 | $ | 16,648 | (a) | $ | (536 | ) | $ | (12,021 | ) | (d) | $ | 16,528 | |||||
Sales returns accrual | 1,119 | 17,569 | — | (17,860 | ) | 828 | |||||||||||||
Deferred tax valuation allowance | 98,350 | (6,072 | ) | (g) | (1,796 | ) | (h) | — | 90,482 | ||||||||||
Other reserves | 2,204 | 2,801 |
(a) | Additions to the allowance for doubtful accounts are charged to expense. Additions to the revenue reserves are charged against revenue. |
(b) | Amount is due primarily to the establishment of foreign NOLs related to a recent acquisition. |
(c) | Amount is primarily related to acquired state NOLs, acquired foreign tax credits and currency translation adjustments on foreign NOLs. |
(d) | Write-off of fully reserved accounts receivable. |
(e) | Amount is primarily related to other-than-temporary impairment charges for certain cost method investments and an increase in federal capital and NOLs, partially offset by a decrease in state NOLs, foreign tax credits, and foreign NOLs. |
(f) | Amount is primarily related to the realization of previously unbenefited unrealized losses on available-for-sale marketable equity securities included in accumulated other comprehensive income and currency translation adjustments on foreign NOLs. |
(g) | Amount is primarily related to the release of a valuation allowance on the other-than-temporary impairment charges for certain cost method investments, partially offset by an increase in federal, foreign and state net operating and capital losses. |
(h) | Amount is primarily related to a net reduction in unbenefited unrealized losses on available-for-sale marketable equity securities included in accumulated other comprehensive income and currency translation adjustments on foreign NOLs. |
1. | IAC Falcon Holdings, LLC executed this Supplemental Indenture on 5/30/13 |
2. | Consumersearch, Inc. executed this Supplemental Indenture on 3/12/14 |
3. | Daily Burn Holdings, Inc. executed this Supplemental Indenture on 5/1/14 |
4. | IAC Search & Media Brands, Inc. executed this Supplemental Indenture on 5/15/14 |
5. | Investopedia LLC executed this Supplemental Indenture on 5/15/14 |
6. | IAC Publishing, LLC executed this Supplemental Indenture on 5/11/16 |
7. | InterActiveCorp Films, LLC executed this Supplemental Indenture on 9/21/17 |
Entity | Jurisdiction of Formation | |
15Films, LLC | Delaware | |
8831-8833 Sunset, LLC | Delaware | |
About Information Technology (Beijing) Co., Ltd. | People’s Republic of China | |
About International | Cayman Islands | |
About, Inc. | Delaware | |
Affinity Apps LLC | Delaware | |
AL Real Estate Holdings, LLC | Indiana | |
Amsel, LLC | Delaware | |
ANGI Homeservices Inc. | Delaware | |
Angie’s List, Inc. | Delaware | |
Apalon Apps LLC | Republic of Belarus | |
APN, LLC | Delaware | |
Applications Partner, LLC | Delaware | |
Ask Applications, Inc. | Delaware | |
Big Breakfast, LLC | Delaware | |
Buzz Technologies, Inc. | Washington | |
CH Pacific, LLC | Delaware | |
CityGrid Media, LLC | Delaware | |
CollegeHumor Press LLC | Maryland | |
Comedy News Ventures, Inc. | Delaware | |
Connect, LLC | Delaware | |
Connected Ventures, LLC | Delaware | |
ConsumerSearch, Inc. | Delaware | |
CraftJack Inc. | Illinois | |
CV Acquisition Corp. | Delaware | |
Daily Burn Holdings, LLC | Delaware | |
Daily Burn, Inc. | Delaware | |
DatingDirect.com Limited | England and Wales | |
Delightful.com, LLC | Delaware | |
Diamant Production Services, LLC | Delaware | |
Diamond Dogs, LLC | Delaware | |
Dictionary.com, LLC | California | |
ECS Sports Fulfillment LLC | Delaware | |
Electus Productions, LLC | California |
Entity | Jurisdiction of Formation | |
Electus, LLC | Delaware | |
ES1 Productions, LLC | Delaware | |
ES2 Productions, LLC | Delaware | |
Eureka SG Pte. Ltd. | Singapore | |
Eureka Taiwan | Taiwan | |
Eureka, Inc. | Japan | |
Failure to Appear Productions, LLC | Delaware | |
Falcon Holdings II, LLC | Delaware | |
Felix Calls, LLC | Delaware | |
Five Star Matchmaking Information Technology (Beijing) Co., Ltd. | People’s Republic of China | |
Flaked Productions, LLC | Delaware | |
FriendScout24 GmbH | Germany | |
Good Hang, LLC | Delaware | |
HLVP Follow On Fund GP, LLC | Delaware | |
HLVP Follow On Fund, L.P. | Delaware | |
HLVP I GP, LLC | Delaware | |
HLVP I, L.P. | Delaware | |
HLVP II GP, LLC | Delaware | |
HLVP II Token, LLC | Delaware | |
HLVP II, L.P. | Delaware | |
HLVP III GP, LLC | Delaware | |
HLVP III, L.P. | Delaware | |
Home Advisor Limited | England and Wales | |
Home Industry Leadership Board | Colorado | |
HomeAdvisor Finance Co. | Cayman Islands | |
HomeAdvisor GmbH | Germany | |
HomeAdvisor International, LLC | Delaware | |
HomeAdvisor, Inc. | Delaware | |
HomeStars, Inc. | Canada | |
HowAboutWe, LLC | Delaware | |
HSN Capital LLC | Delaware | |
HSN, LLC | Delaware | |
HTRF Ventures, LLC | Delaware | |
Humor Rainbow, Inc. | New York | |
IAC 19th St. Holdings, LLC | Delaware | |
IAC Applications Holding Limited Partnership | Ireland | |
IAC Applications, LLC | Delaware | |
IAC Falcon Holdings, LLC | Delaware | |
IAC Family Foundation, Inc. | Delaware |
Entity | Jurisdiction of Formation | |
IAC FinanceCo, Inc. | Delaware | |
IAC Group, LLC | Delaware | |
IAC Publishing Holding Limited Partnership | Ireland | |
IAC Publishing, LLC | Delaware | |
IAC Search & Media (Canada) Inc. | Canada | |
IAC Search & Media B.V. | Netherlands | |
IAC Search & Media Brands, Inc. | California | |
IAC Search & Media Europe Limited | Ireland | |
IAC Search & Media Finance Co. | Cayman Islands | |
IAC Search & Media Hong Kong, Limited | Hong Kong | |
IAC Search & Media International, Inc. | Delaware | |
IAC Search & Media Massachusetts, Inc. | Massachusetts | |
IAC Search & Media Technologies FinanceCo II | Cayman Islands | |
IAC Search & Media Technologies Limited | Ireland | |
IAC Search & Media UK Limited | United Kingdom | |
IAC Search & Media Washington, LLC | Washington | |
IAC Search & Media, Inc. | Delaware | |
IAC Search, LLC | Delaware | |
IAC Shopping International, Inc. | Delaware | |
IAC/Expedia Global, LLC | Delaware | |
IACF Developments LLC | Delaware | |
ImproveNet, Inc. | Delaware | |
Indigo Intermediate, LLC | Delaware | |
INKD LLC | Delaware | |
Insider Pages, Inc. | Delaware | |
InstantAction, LLC | Delaware | |
InterActiveCorp Films, Inc. | Delaware | |
InterActiveCorp Films, LLC | Delaware | |
InterCaptiveCorp, Ltd. | Bermuda | |
Internet Shopping Network LLC | Delaware | |
Investopedia Canada, Inc. | Canada | |
Investopedia LLC | Delaware | |
Konnett KK | Japan | |
Life123, Inc. | Delaware | |
Livestream Inc. | Delaware | |
Livestream Limited | England and Wales | |
Livestream LLC | New York | |
Livestream Technologies Private Limited | India | |
Lucky Morning Productions, LLC | Delaware |
Entity | Jurisdiction of Formation | |
M8 Singlesnet LLC | Delaware | |
Maker Shack, LLC | California | |
Mash Dating, LLC | Delaware | |
Massive Media Europe NV | Belgium | |
Massive Media Limited | England and Wales | |
Massive Media Match NV | Belgium | |
Match Group Europe Limited | England and Wales | |
Match Group, Inc. | Delaware | |
Match Group, LLC | Delaware | |
Match Internet Financial Services Designated Activity Company | Ireland | |
Match ProfilePro, LLC | Delaware | |
Match.com Europe Limited | England and Wales | |
Match.com Events LLC | Delaware | |
Match.com Foreign Holdings II Limited | England and Wales | |
Match.com Foreign Holdings III Limited | England and Wales | |
Match.com Foreign Holdings Limited | England and Wales | |
Match.com Global Investments S.à r.l. | Luxembourg | |
Match.com Global Services Limited | England and Wales | |
Match.com HK Limited | Hong Kong | |
Match.com International Holdings, Inc. | Delaware | |
Match.com International II Limited | England and Wales | |
Match.com International Limited | England and Wales | |
Match.com Investments, Inc. | Cayman Island | |
Match.com Japan KK | Japan | |
Match.com Japan Networks GK | Japan | |
Match.com LatAm Limited | England and Wales | |
Match.com Luxembourg S.à r.l. | Luxembourg | |
Match.com Nordic AB | Sweden | |
Match.com Offshore Holdings, Ltd | Mauritius | |
Match.com Pegasus Limited | England and Wales | |
Matchcom Mexico, S. de R.L., de C.V. | Mexico | |
Meetic Espana, SLU | Spain | |
Meetic Italia SRL | Italy | |
Meetic Netherlands BV | Netherlands | |
Meetic SAS | France | |
MG France Services SAS | France | |
MG Korea Services Limited | South Korea | |
MG Services Alpha, LLC | Delaware | |
MG Services Beta, LLC | Delaware |
Entity | Jurisdiction of Formation | |
Mhelpdesk, Inc. | Delaware | |
Mile High Insights, LLC | Delaware | |
Mindspark Interactive Network, Inc. | Delaware | |
MM LatAm, LLC | Delaware | |
Mojo Acquisition Corp. | Delaware | |
Mojo Finance Co. | Cayman Islands | |
MTCH Technology Services Ltd. | Ireland | |
MyBuilder Limited | England and Wales | |
MyHammer AG | Germany | |
MyHammer Holding AG | Germany | |
Neu.de GmbH | Germany | |
Newsweek Philippines Inc. | Philippines | |
Nexus Limited | England and Wales | |
Nice Little Day, LLC | Delaware | |
Notional, LLC | Delaware | |
NRelate LLC | Delaware | |
Out to Lunch Productions, LLC | Delaware | |
Parperfeito Comunicacao SA | Brazil | |
People Media, Inc. | Delaware | |
People Media, LLC | Arizona | |
Plentyoffish Media ULC | British Columbia | |
Plentyoffish Media, LLC | Delaware | |
Pretty Fun Therapy SAS | France | |
Principato-Young Management, Inc. | California | |
Prize Matters, LLC | Delaware | |
Pronto, LLC | Delaware | |
Publishing Partner, LLC | Delaware | |
Rebel Entertainment, Inc. | Delaware | |
Rio Bravo Productions, LLC | Delaware | |
Riviere Productions | California | |
Search Floor, Inc. | California | |
ServiceMagic Canada Inc. | Canada | |
ServiceMagic Europe S.à r.l. | Luxembourg | |
ServiceMagic GmbH | Germany | |
ServiceMagic International S.à r.l. | Luxembourg | |
ServiceMagic IP Ireland Limited | Ireland | |
Shanghai Huike Network Technology Co., Ltd. | People’s Republic of China | |
Shoptouch, Inc. | Delaware | |
Slimware Utilities Holdings, Inc. | Delaware |
Entity | Jurisdiction of Formation | |
SpeedDate.com, LLC | Delaware | |
Spotlight Studios, LLC | Delaware | |
Stage Four, LLC | Delaware | |
Starnet Interactive Ltd. | Israel | |
Starnet Interactive, Inc. | Delaware | |
Stream Team, LLC | Delaware | |
Styleclick Chicago, Inc. | Delaware | |
Styleclick, Inc. | Delaware | |
Styleclick.com Enterprises Inc. | California | |
Targeted Media Solutions LLC | Delaware | |
TDB Holdings, Inc. | Delaware | |
The Daily Beast Company LLC | Delaware | |
The IAC Foundation, Inc. | Delaware | |
Tinder Development, LLC | Delaware | |
Tinder, LLC | Delaware | |
TMC Realty, L.L.C. | Delaware | |
TPR/Tutor Holdings, LLC | Delaware | |
Travaux.com | France | |
USA Electronic Commerce Solutions LLC | Delaware | |
USA Video Distribution LLC | Delaware | |
USANi LLC | Delaware | |
USANi Sub LLC | Delaware | |
VHX Corporation | Delaware | |
Vimeo FinanceCo, LLC | Delaware | |
Vimeo, Inc. | Delaware | |
Wanderspot LLC | Washington | |
Werkspot BV | Netherlands |
1. | I have reviewed this report on Form 10-K for the fiscal year ended December 31, 2017 of IAC/InterActiveCorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | March 1, 2018 | /s/ BARRY DILLER | |
Barry Diller Chairman and Senior Executive |
1. | I have reviewed this report on Form 10-K for the fiscal year ended December 31, 2017 of IAC/InterActiveCorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | March 1, 2018 | /s/ JOSEPH LEVIN | |
Joseph Levin Chief Executive Officer |
1. | I have reviewed this report on Form 10-K for the fiscal year ended December 31, 2017 of IAC/InterActiveCorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
Dated: | March 1, 2018 | /s/ GLENN H. SCHIFFMAN | |
Glenn H. Schiffman Executive Vice President and Chief Financial Officer |
(1) | the Annual Report on Form 10-K for the fiscal year ended December 31, 2017 of IAC/InterActiveCorp (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of IAC/InterActiveCorp. |
Dated: | March 1, 2018 | /s/ BARRY DILLER | |
Barry Diller Chairman and Senior Executive |
(1) | the Annual Report on Form 10-K for the fiscal year ended December 31, 2017 of IAC/InterActiveCorp (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of IAC/InterActiveCorp. |
Dated: | March 1, 2018 | /s/ JOSEPH LEVIN | |
Joseph Levin Chief Executive Officer |
(1) | the Annual Report on Form 10-K for the fiscal year ended December 31, 2017 of IAC/InterActiveCorp (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of IAC/InterActiveCorp. |
Dated: | March 1, 2018 | /s/ GLENN H. SCHIFFMAN | |
Glenn H. Schiffman Executive Vice President and Chief Financial Officer |
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Feb. 02, 2018 |
Jun. 30, 2017 |
|
Entity Registrant Name | IAC/INTERACTIVECORP | ||
Entity Central Index Key | 0000891103 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 7,528,899,120 | ||
Common Stock | |||
Entity Common Stock, Shares Outstanding (shares) | 76,869,350 | ||
Class B Convertible Common Stock | |||
Entity Common Stock, Shares Outstanding (shares) | 5,789,499 |
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Accounts receivable allowance | $ 11,489 | $ 16,405 |
Treasury stock, shares (in shares) | 194,163,000 | 193,445,000 |
Common Stock | ||
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares (in shares) | 1,600,000,000 | 1,600,000,000 |
Common stock, issued shares (in shares) | 260,624,000 | 255,672,000 |
Common stock, outstanding shares (in shares) | 76,829,000 | 72,595,000 |
Class B Convertible Common Stock | ||
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares (in shares) | 400,000,000 | 400,000,000 |
Common stock, issued shares (in shares) | 16,157,000 | 16,157,000 |
Common stock, outstanding shares (in shares) | 5,789,000 | 5,789,000 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | |||
Change in unrealized gains and losses of available-for-sale securities, tax provision (benefits) | $ 3,846 | $ 884 | $ (576) |
ORGANIZATION |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||
ORGANIZATION | ORGANIZATION IAC is a leading media and Internet company composed of widely known consumer brands, such as Match, Tinder, PlentyOfFish and OkCupid, which are part of Match Group's online dating portfolio, HomeAdvisor and Angie's List, which are operated by ANGI Homeservices, as well as Vimeo, Dotdash, Dictionary.com, The Daily Beast and Investopedia. All references to "IAC," the "Company," "we," "our" or "us" in this report are to IAC/InterActiveCorp. The Company has six reportable segments, which are described below. Match Group Our Match Group segment consists of the businesses and operations of Match Group, Inc. (“Match Group”). Match Group completed its initial public offering ("IPO") on November 24, 2015. As of December 31, 2017, IAC’s economic and voting interest in Match Group were 81.2% and 97.6%, respectively. Through Match Group, we operate a dating business that consists of a portfolio of brands, available in 42 languages across more than 190 countries, including the following key brands: Tinder, Match, PlentyOfFish, Meetic, OkCupid, OurTime, Pairs as well as a number of other brands. Through the portfolio of brands within Match Group, we are a leading provider of subscription dating products servicing North America, Western Europe, Asia and many other regions around the world. We provide these services through websites and applications that we own and operate. ANGI Homeservices Our ANGI Homeservices segment includes the North America and European businesses of ANGI Homeservices Inc. On September 29, 2017, the Company completed the combination (the "Combination") of the businesses in the Company's HomeAdvisor segment and Angie's List, Inc. ("Angie's List") under a new publicly traded company called ANGI Homeservices. As of December 31, 2017, IAC’s economic and voting interest in ANGI Homeservices were 86.9% and 98.5%, respectively. In connection with the transaction, the Company changed the name of the HomeAdvisor segment to ANGI Homeservices and year-over-year comparisons for financial results for this segment are to the historical results of the HomeAdvisor segment (adjusted to reflect corporate allocations from IAC). ANGI Homeservices is the world's largest digital marketplace for home services, connecting millions of homeowners across the globe with home service professionals. ANGI Homeservices operates leading brands in eight countries, including HomeAdvisor® and Angie's List® (United States), HomeStars (Canada), Travaux.com (France), MyHammer (Germany and Austria), MyBuilder (UK), Werkspot (Netherlands) and Instapro (Italy). HomeAdvisor acquired controlling interests in MyBuilder Limited ("MyBuilder") on March 24, 2017, and HomeStars Inc. ("HomeStars") on February 8, 2017, leading home services platforms in the United Kingdom and Canada, respectively. Video Our Video segment consists of Vimeo, Electus, IAC Films and Daily Burn. Vimeo operates a global video sharing platform for creators and their audiences. We provide creators with professional tools to host, manage, review, distribute and monetize videos online, while offering audiences a high quality, ad-free viewing experience across devices. On October 18, 2017, Vimeo acquired Livestream, a leading live video solution that powers millions of events a year. Electus provides production and producer services for both unscripted and scripted television and digital content, primarily for initial sale and distribution in the United States and internationally. Our content is distributed on a wide range of platforms, including broadcast television, premium and basic cable television, subscription-based and ad-supported video-on-demand services and other outlets. Electus also operates Electus Digital, which consists of the following websites and properties: CollegeHumor.com, Dorkly.com and Drawfee.com; YouTube channels WatchLOUD, Nuevon and Hungry; and Big Breakfast (a production company). Through Electus, we also operate Notional. IAC Films provides production and producer services for feature films, primarily for initial sale and distribution in the United States and internationally. Our content is distributed through theatrical releases and video-on-demand services. Daily Burn is a health and fitness property that provides streaming fitness and workout videos across a variety of platforms, including iOS, Android, Roku and other Internet-enabled television platforms. Applications Our Applications segment includes Consumer, which develops and distributes downloadable desktop and mobile applications, including Apalon, which houses our mobile applications operations, and SlimWare, which houses our downloadable desktop software and service operations; and Partnerships, which includes our business-to-business partnership operations. Through our Consumer business, we develop, market and distribute a variety of applications, primarily browser extensions, which consist of a browser tab page and related technology that together enable users to run search queries directly from their web browsers. Apalon is a mobile development company with one of the largest and most popular portfolios of mobile applications worldwide. SlimWare is a provider of community-powered software and services that clean, repair, update, secure and optimize computers, mobile phones and digital devices. Through our Partnerships business, we work closely with partners in the software, media and other industries to design and develop customized browser-based search applications to be bundled and distributed with these partners’ products and services. Publishing The Publishing segment includes our Premium Brands business, which is composed of Dotdash, Dictionary.com, Investopedia and The Daily Beast; and our Ask & Other business, which primarily includes Ask Media Group, CityGrid and, for periods prior to its sale on June 30, 2016, ASKfm. Premium Brands Our Premium Brands business primarily consists of the following destination websites:
Ask & Other Our Ask & Other business primarily includes:
Other The Other segment consists of the results of The Princeton Review, ShoeBuy and PriceRunner for periods prior to the sales of these businesses, which occurred on March 31, 2017, December 30, 2016 and March 18, 2016, respectively. The Princeton Review provided a variety of educational test preparation, academic tutoring and college counseling services; ShoeBuy was an Internet retailer of footwear and related apparel and accessories; and PriceRunner was a shopping comparison website. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"). Basis of Consolidation and Accounting for Investments The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. Intercompany transactions and accounts have been eliminated. Investments in the common stock or in-substance common stock of entities in which the Company has the ability to exercise significant influence over the operating and financial matters of the investee, but does not have a controlling financial interest, are accounted for using the equity method. Investments in the common stock or in-substance common stock of entities in which the Company does not have the ability to exercise significant influence over the operating and financial matters of the investee are accounted for using the cost method. Investments in companies that IAC does not control, which are not in the form of common stock or in-substance common stock, are also accounted for using the cost method. The Company evaluates each cost and equity method investment for impairment on a quarterly basis and recognizes an impairment loss if a decline in value is determined to be other-than-temporary. Such impairment evaluations include, but are not limited to: the current business environment, including competition; going concern considerations such as financial condition, the rate at which the investee utilizes cash and the investee's ability to obtain additional financing to achieve its business plan; the need for changes to the investee's existing business model due to changing business and regulatory environments and its ability to successfully implement necessary changes; and comparable valuations. If the Company has not identified events or changes in circumstances that may have a significant adverse effect on the fair value of a cost method investment, then the fair value of such cost method investment is not estimated, as it is impracticable to do so. Accounting Estimates Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments and assumptions impact the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. On an ongoing basis, the Company evaluates its estimates and judgments including those related to: the recoverability of goodwill and indefinite-lived intangible assets; the useful lives and recoverability of definite-lived intangible assets and property and equipment; the fair values of marketable securities and long-term investments; the carrying value of accounts receivable, including the determination of the allowance for doubtful accounts; the determination of revenue reserves; the fair value of acquisition-related contingent consideration arrangements; the liabilities for uncertain tax positions; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets and other factors that the Company considers relevant. Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, services are rendered or merchandise is delivered to customers, the fee or price charged is fixed or determinable and collectability is reasonably assured. Deferred revenue is recorded when payments are received, or contractually due, in advance of the Company's rendering of services, availability of media content (films, television, or digital content) for broadcast or exhibition or delivery of merchandise. Match Group Match Group's revenue is primarily derived directly from users in the form of recurring subscriptions. Subscription revenue is presented net of credits and credit card chargebacks. Subscribers pay in advance, primarily by using a credit card or through mobile app stores, and, subject to certain conditions identified in our terms and conditions, all purchases are final and nonrefundable. Fees collected, or contractually due, in advance for subscriptions are deferred and recognized using the straight-line method over the terms of the applicable subscription period, which primarily range from one to six months, and corresponding mobile app store fees incurred on such transactions, if any, are deferred and expensed over the same period. Deferred revenue at Match Group is $198.3 million and $161.1 million at December 31, 2017 and 2016, respectively. Revenue is also earned from online advertising, the purchase of à la carte features and offline events. Online advertising revenue is recognized every time an advertisement is displayed. Revenue from the purchase of à la carte features is recognized based on usage. Revenue and the related expenses associated with offline events are recognized when each event occurs. ANGI Homeservices ANGI Homeservices revenue is primarily derived from (i) consumer connection revenue, which comprises fees paid by service professionals for consumer matches (regardless of whether the professional ultimately provides the requested service), and (ii) membership subscriptions fees paid by service professionals. Consumer connection revenue varies based upon certain factors including the service requested, type of match (such as Instant Booking, Instant Connect, same day service or next day service) and geographic location of service. Effective with the Combination, revenue is also derived from Angie's List (i) sales of time-based advertising to service professionals and (ii) membership subscription fees from consumers. ANGI Homeservices consumer connection revenue is generated and recognized when an in‑network service professional is delivered a consumer match. Membership subscription revenue is generated through subscription sales to service professionals and is deferred and recognized over the term of the applicable membership. Membership agreements can be one month, three months, or one year. Angie's List service professionals generally pay for advertisements in advance on a monthly or annual basis at the option of the service professional, with the average advertising contract term being approximately one year. These contracts include an early termination penalty. Angie's List revenue from the sale of website, mobile and call center advertising is recognized ratably over the period during which the advertisements run. Revenue from the sale of advertising in the Angie’s List Magazine is recognized in the period in which the publication is published and distributed. Angie's List prepaid consumer membership subscription fees are recognized as revenue ratably over the term of the associated subscription, which is typically one year. Deferred revenue at ANGI Homeservices is $64.1 million and $18.8 million at December 31, 2017 and 2016, respectively. The balance at December 31, 2017 includes Angie's List deferred revenue of $37.7 million. Video Revenue of businesses included in this segment is generated primarily through subscriptions, media production and distribution, and advertising. Production revenue is recognized when the production is available for the customer to broadcast or exhibit, subscription fee revenue is recognized over the terms of the applicable subscriptions, which are one month or one year, and advertising revenue is recognized when an ad is displayed or over the period earned. Deferred revenue at Vimeo is $49.4 million and $36.7 million at December 31, 2017 and 2016, respectively. Deferred revenue at Electus totals $12.8 million and $23.1 million at December 31, 2017 and 2016, respectively. Applications Substantially all of Applications' revenue consists of advertising revenue generated principally through the display of paid listings in response to search queries. The substantial majority of the paid listings displayed by our Applications businesses are supplied to us by Google Inc. ("Google") pursuant to our services agreement with Google. Pursuant to this agreement, those of our Applications businesses that provide search services transmit search queries to Google, which in turn transmits a set of relevant and responsive paid listings back to these businesses for display in search results. This ad-serving process occurs independently of, but concurrently with, the generation of algorithmic search results for the same search queries. Google paid listings are displayed separately from algorithmic search results and are identified as sponsored listings on search results pages. Paid listings are priced on a price per click basis and when a user submits a search query through one of our Applications businesses and then clicks on a Google paid listing displayed in response to the query, Google bills the advertiser that purchased the paid listing directly and shares a portion of the fee charged to the advertiser with us. We recognize paid listing revenue from Google when it delivers the user's click. In cases where the user’s click is generated due to the efforts of a third party distributor, we recognize the amount due from Google as revenue and record a revenue share or other payment obligation to the third party distributor as traffic acquisition costs. To a significantly lesser extent, Applications' revenue also consists of fees related to subscription downloadable applications, which are recognized over the terms of the applicable subscriptions, primarily one to two years, and fees related to paid mobile downloadable applications and display advertisements, which are recognized at the time of the sale and when the ad is displayed, respectively. Deferred revenue at Applications is $23.6 million and $26.1 million at December 31, 2017 and 2016, respectively. Publishing Publishing's revenue consists principally of advertising revenue, which is generated primarily through the display of paid listings in response to search queries, display advertisements (sold directly and through programmatic ad sales) and fees related to paid mobile downloadable applications. The substantial majority of the paid listings that our Publishing businesses display are supplied to us by Google in the manner and pursuant to the services agreement with Google, which is described above under "Applications." Other The Princeton Review's revenue consisted primarily of fees received directly from students for in-person and online test preparation classes, access to online test preparation materials and individual tutoring services. Fees from classes and access to online materials were recognized over the period of the course and the period of the online access, respectively. Tutoring fees were recognized based on usage. ShoeBuy's revenue consisted of merchandise sales, reduced by incentive discounts and sales returns, and was recognized when delivery to the customer had occurred. Delivery was considered to have occurred when the customer took title and assumed the risks and rewards of ownership, which was on the date of shipment. Accruals for returned merchandise were based on historical experience. Shipping and handling fees billed to customers was recorded as revenue. The costs associated with shipping goods to customers were recorded as cost of revenue. PriceRunner's revenue consisted principally of advertising revenue that, depending on the terms of the arrangement, was recognized when a user clicked on an ad, or when a user clicked-through on the ad and took a specified action on the destination site. Cash and Cash Equivalents Cash and cash equivalents include cash and short-term investments, with maturities of less than 91 days from the date of purchase. Domestically, cash equivalents primarily consist of AAA rated government money market funds, commercial paper rated A1/P1 or better and treasury discount notes. Internationally, cash equivalents primarily consist of AAA rated government money market funds and time deposits. Marketable Securities At December 31, 2017, marketable securities consist of commercial paper rated A1+/P1. The Company invests in marketable debt securities with active secondary or resale markets to ensure portfolio liquidity to fund current operations or satisfy other cash requirements as needed. The Company also invests in marketable equity securities as part of its investment strategy. All marketable securities are classified as available-for-sale and are reported at fair value. The unrealized gains and losses on marketable securities, net of tax, are included in accumulated other comprehensive income as a separate component of shareholders' equity. The specific-identification method is used to determine the cost of securities sold and the amount of unrealized gains and losses reclassified out of accumulated other comprehensive income into earnings. The Company employs a methodology that considers available evidence in evaluating potential other-than-temporary impairments of its investments. Investments are considered to be impaired when a decline in fair value below the amortized cost basis is determined to be other-than-temporary. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the amortized cost basis, the financial condition and near-term prospects of the issuer, and whether it is not more likely than not that the Company will be required to sell the security before the recovery of the amortized cost basis, which may be maturity. If a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded in current earnings and a new cost basis in the investment is established. Certain Risks and Concentrations A meaningful portion of the Company's revenue is derived from online advertising, the market for which is highly competitive and rapidly changing. Significant changes in this industry or changes in advertising spending behavior or in customer buying behavior could adversely affect our operating results. Most of the Company's online advertising revenue is attributable to a services agreement with Google. For the years ended December 31, 2017, 2016 and 2015, revenue from Google represents 22%, 26% and 40% respectively, of the Company's consolidated revenue. The services agreement became effective on April 1, 2016, following the expiration of the previous services agreement, and expires on March 31, 2020; however, the Company may choose to terminate the agreement effective March 31, 2019. The services agreement requires that the Company comply with certain guidelines promulgated by Google. Google may generally unilaterally update its policies and guidelines without advance notice, which could in turn require modifications to, or prohibit and/or render obsolete certain of our products, services and/or business practices, which could be costly to address or otherwise have an adverse effect on our business, financial condition and results of operations. For the years ended December 31, 2017, 2016 and 2015, revenue earned from Google was $740.7 million, $824.4 million and $1.3 billion, respectively. This revenue is earned by the businesses comprising the Applications and Publishing segments. For the years ended December 31, 2017, 2016 and 2015, revenue earned from Google represents 83%, 87% and 94% of Applications revenue and 71%, 73% and 83% of Publishing revenue, respectively. Accounts receivable related to revenue earned from Google totaled $72.4 million and $65.8 million at December 31, 2017 and 2016, respectively. The Company's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud. Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents and marketable securities. Cash and cash equivalents are maintained with financial institutions and are in excess of Federal Deposit Insurance Corporation insurance limits. Accounts Receivable, net of allowance for doubtful accounts and revenue reserves Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts and revenue reserves. Accounts receivable outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, the Company's previous loss history, the specific customer's ability to pay its obligation to the Company and the condition of the general economy and the customer's industry. The Company writes off accounts receivable when they become uncollectible. The Company also maintains allowances to reserve for potential credits issued to customers or other revenue adjustments. The amounts of these reserves are based, in part, on historical experience. Property and Equipment Property and equipment, including significant improvements, are recorded at cost. Repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, or, in the case of leasehold improvements, the lease term, if shorter.
The Company capitalizes certain internal use software costs including external direct costs utilized in developing or obtaining the software and compensation for personnel directly associated with the development of the software. Capitalization of such costs begins when the preliminary project stage is complete and ceases when the project is substantially complete and ready for its intended purpose. The net book value of capitalized internal use software is $46.4 million and $46.9 million at December 31, 2017 and 2016, respectively. Business Combinations The purchase price of each acquisition is attributed to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets that either arise from a contractual or legal right or are separable from goodwill. The fair value of these intangible assets is based on detailed valuations that use information and assumptions provided by management. The excess purchase price over the net tangible and identifiable intangible assets is recorded as goodwill and is assigned to the reporting unit(s) that is expected to benefit from the combination as of the acquisition date. In connection with certain business combinations, the Company has entered into contingent consideration arrangements that are determined to be part of the purchase price. Each of these arrangements are initially recorded at its fair value at the time of the acquisition and reflected at current fair value for each subsequent reporting period thereafter until settled. The contingent consideration arrangements are generally based upon earnings performance and/or operating metrics. The Company determines the fair value of the contingent consideration arrangements using probability-weighted analyses to determine the amounts of the gross liability, and, if the arrangement is long-term in nature, applying a discount rate that appropriately captures the risk associated with the obligation to determine the net amount reflected in the consolidated financial statements. Significant changes in forecasted earnings or operating metrics would result in a significantly higher or lower fair value measurement. The changes in the remeasured fair value of the contingent consideration arrangements during each reporting period, including the accretion of the discount, if applicable, are recognized in “General and administrative expense” in the accompanying consolidated statement of operations. See "Note 8—Fair Value Measurements and Financial Instruments" for a discussion of contingent consideration arrangements. Goodwill and Indefinite-Lived Intangible Assets The Company assesses goodwill and indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or the fair value of an indefinite-lived intangible asset below its carrying value. When the Company elects to perform a qualitative assessment and concludes it is not more likely than not that the fair value of the reporting unit is less than its carrying value, no further assessment of that reporting unit's goodwill is necessary; otherwise, a quantitative assessment is performed and the fair value of the reporting unit is determined. If the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the excess is recorded. For the Company's annual goodwill test at October 1, 2017, a qualitative assessment of the Match Group, ANGI Homeservices, Vimeo and Applications reporting units' goodwill was performed because the Company concluded it was more likely than not that the fair value of these reporting units was in excess of their respective carrying values. The primary factors that the Company considered in its qualitative assessment for each of these reporting units is described below:
For the Company's annual goodwill test at October 1, 2017, the Company quantitatively tested the Daily Burn and Electus reporting units. The Company's quantitative test indicated that the fair value of each of these reporting units is in excess of its respective carrying value; therefore, the goodwill of these reporting units is not impaired. The Company's Publishing reporting unit has no goodwill. The aggregate goodwill balance for the reporting units for which the most recent estimate of fair value is less than 120% of their carrying values is approximately $450 million. The fair value of the Company's reporting units is determined using both an income approach based on discounted cash flows ("DCF") and a market approach when it tests goodwill for impairment, either on an interim basis or annual basis as of October 1 each year. The Company uses the same approach in determining the fair value of its businesses in connection with its subsidiary denominated stock based compensation plans, which can be a significant factor in the decision to apply the qualitative screen. Determining fair value using a DCF analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates. The expected cash flows used in the DCF analyses are based on the Company's most recent forecast and budget and, for years beyond the budget, the Company's estimates, which are based, in part, on forecasted growth rates. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows of the respective reporting units. Assumptions used in the DCF analyses, including the discount rate, are assessed based on each reporting unit's current results and forecasted future performance, as well as macroeconomic and industry specific factors. The discount rates used in determining the fair value of the Company's reporting units ranged from 12.5% to 17.5% in 2017 and 10% to 17.5% in 2016. Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple is determined which is applied to financial metrics to estimate the fair value of a reporting unit. To determine a peer group of companies for our respective reporting units, we considered companies relevant in terms of consumer use, monetization model, margin and growth characteristics, and brand strength operating in their respective sectors. While a primary driver in the determination of the fair values of the Company's reporting units is the estimate of future revenue and profitability, the determination of fair value is based, in part, upon the Company's assessment of macroeconomic factors, industry and competitive dynamics and the strategies of its businesses in response to these factors. While the Company has the option to qualitatively assess whether it is more likely than not that the fair values of its indefinite-lived intangible assets are less than their carrying values, the Company's policy is to determine the fair value of each of its indefinite-lived intangible assets annually as of October 1. In 2017, the Company did not quantitatively assess the Angie's List indefinite-lived intangible assets acquired through the Combination given the proximity of the September 29, 2017 transaction date to the October 1, 2017 annual test date. The Company determines the fair values of its indefinite-lived intangible assets using avoided royalty DCF analyses. Significant judgments inherent in these analyses include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows. The discount rates used in the DCF analyses reflect the risks inherent in the expected future cash flows generated by the respective intangible assets. The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the Company's trade names and trademarks. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors. The discount rates used in the Company's annual indefinite-lived impairment assessment ranged from 11% to 16% in both 2017 and 2016, and the royalty rates used ranged from 2% and 7% in both 2017 and 2016. The 2017 annual assessment of goodwill and indefinite-lived intangible assets did not identify any impairments. While the 2016 annual assessment did not identify any material impairments, during the second quarter of 2016 the Company recorded impairment charges related to the entire $275.4 million balance of the Publishing reporting unit goodwill and $11.6 million related to certain Publishing indefinite-lived intangible assets. The goodwill impairment charge at Publishing was driven by the impact from the new Google contract, traffic trends and monetization challenges and the corresponding impact on the then estimate of fair value. The expected cash flows used in the Publishing DCF analysis were based on the Company's most recent forecast for the second half of 2016 and each of the years in the forecast period, which were updated to include the effects of the Google contract, traffic trends and monetization challenges and the cost savings from our restructuring efforts. For years beyond the forecast period, the Company's estimated cash flows were based on forecasted growth rates. The discount rate used in the DCF analysis reflected the risks inherent in the expected future cash flows of the Publishing reporting unit. Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple was determined which was applied to financial metrics to estimate the fair value of the Publishing reporting unit. To determine a peer group of companies for Publishing, we considered companies relevant in terms of business model, revenue profile, margin and growth characteristics and brand strength. The indefinite-lived intangible asset impairment charge related to certain trade names and trademarks and were due to reduced level of revenue and profits, which, in turn, also led to a reduction in the assumed royalty rates for these assets. The royalty rates used to value the trade names that were impaired ranged from 2% to 6% and the discount rate that was used reflected the risks inherent in the expected future cash flows of the trade names and trademarks. The impairment charge is included in "Amortization of intangibles" in the accompanying consolidated statement of operations. In 2015, the Company identified and recorded impairment charges of $88.0 million related to certain indefinite-lived intangible assets at the Publishing segment and $14.1 million at the Other segment related to goodwill at ShoeBuy. The indefinite-lived intangible asset impairment charge at Publishing related to certain trade names of certain Ask & Other direct marketing brands, including Ask Media Group. The impairment charge reflected the impact of Google ecosystem changes that impacted our ability to market, the effect of the reduced revenue share on mobile under the terms of the services agreement with Google, and the shift in focus to higher margin businesses in Publishing's Premium Brands. The combined impact of these factors reduced the forecasted revenue and profits for these brands and the impairment charge reflected the resultant reduction in fair value. The goodwill impairment charge at ShoeBuy was due to increased investment and the seasonal effect of high inventory levels as of October 1, 2015. The Company's reporting units are consistent with its determination of its operating segments. Goodwill is tested for impairment at the reporting unit level. See "Note 14—Segment Information" for additional information regarding the Company's method of determining operating and reportable segments. Long-Lived Assets and Intangible Assets with Definite Lives Long-lived assets, which consist of property and equipment and intangible assets with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value. Amortization of definite-lived intangible assets is computed either on a straight-line basis or based on the pattern in which the economic benefits of the asset will be realized. Fair Value Measurements The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:
The Company's non-financial assets, such as goodwill, intangible assets and property and equipment, as well as cost and equity method investments, are adjusted to fair value only when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs. Traffic Acquisition Costs Traffic acquisition costs consist of (i) payments made to partners who distribute our Partnerships customized browser-based applications and who integrate our paid listings into their websites and (ii) fees related to the distribution and facilitation of in-app purchase of product features. These payments include amounts based on revenue share and other arrangements. The Company expenses these payments in the period incurred as a component of cost of revenue. Advertising Costs Advertising costs are expensed in the period incurred (when the advertisement first runs for production costs that are initially capitalized) and represent online marketing, including fees paid to search engines, social media sites and third parties that distribute our Consumer downloadable applications, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to the Match Group brands. Advertising expense is $1.1 billion, $1.0 billion and $1.2 billion for the years ended December 31, 2017, 2016 and 2015, respectively. The Company capitalizes and amortizes the costs associated with certain distribution arrangements that require it to pay a fee per access point delivered. These access points are generally in the form of downloadable applications associated with our Consumer operations. These fees are amortized over the estimated useful lives of the access points to the extent the Company can reasonably estimate a probable future economic benefit and the period over which such benefit will be realized (generally 18 months). Otherwise, the fees are charged to expense as incurred. Legal Costs Legal costs are expensed as incurred. Income Taxes The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. The Company records interest, net of any applicable related income tax benefit, on potential income tax contingencies as a component of income tax expense. The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. De-recognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act imposes a new minimum tax on global intangible low-taxed income (“GILTI”) earned by foreign subsidiaries beginning in 2018. The Financial Accounting Standards Board ("FASB") Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The Company intends to elect to recognize the tax on GILTI as a period expense in the period the tax is incurred. Earnings Per Share Basic earnings per share is computed by dividing net earnings attributable to IAC shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vested resulting in the issuance of common stock that could share in the earnings of the Company. Foreign Currency Translation and Transaction Gains and Losses The financial position and operating results of foreign entities whose primary economic environment is based on their local currency are consolidated using the local currency as the functional currency. These local currency assets and liabilities are translated at the rates of exchange as of the balance sheet date, and local currency revenue and expenses of these operations are translated at average rates of exchange during the period. Translation gains and losses are included in accumulated other comprehensive income as a component of shareholders' equity. Transaction gains and losses resulting from assets and liabilities denominated in a currency other than the functional currency are included in the consolidated statement of operations as a component of other (expense) income, net. See "Note 19—Consolidated Financial Statement Details" for additional information regarding foreign currency exchange gains and losses. Translation gains and losses relating to foreign entities that are liquidated or substantially liquidated are reclassified out of accumulated other comprehensive income (loss) into earnings. Such gains totaled $0.7 million, $9.9 million and $2.2 million, respectively, during the years ended December 31, 2017, 2016 and 2015, and was included in "Other (expense) income, net" in the accompanying consolidated statement of operations. Stock-Based Compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is generally expensed over the requisite service period. See "Note 13—Stock-based Compensation" for a discussion of the Company's stock-based compensation plans. Redeemable Noncontrolling Interests Noncontrolling interests in the consolidated subsidiaries of the Company are ordinarily reported on the consolidated balance sheet within shareholders' equity, separately from the Company's equity. However, securities that are redeemable at the option of the holder and not solely within the control of the issuer must be classified outside of shareholders' equity. Accordingly, all noncontrolling interests that are redeemable at the option of the holder are presented outside of shareholders' equity in the accompanying consolidated balance sheet. In connection with the acquisition of certain subsidiaries, management of these businesses has retained an ownership interest. The Company is party to fair value put and call arrangements with respect to these interests. These put and call arrangements allow management of these businesses to require the Company to purchase their interests or allow the Company to acquire such interests at fair value, respectively. The put arrangements do not meet the definition of a derivative instrument as the put agreements do not provide for net settlement. These put and call arrangements become exercisable by the Company and the counter-party at various dates in the future. During the years ended December 31, 2017, 2016 and 2015, two, one and two of these arrangements, respectively, were exercised. These put arrangements are exercisable by the counter-party outside the control of the Company. Accordingly, to the extent that the fair value of these interests exceeds the value determined by normal noncontrolling interest accounting, the value of such interests is adjusted to fair value with a corresponding adjustment to additional paid-in capital. During the years ended December 31, 2017, 2016 and 2015, the Company recorded adjustments of $6.3 million, $7.9 million and $23.2 million, respectively, to increase these interests to fair value. Fair value determinations require high levels of judgment and are based on various valuation techniques, including market comparables and discounted cash flow projections. Recent Accounting Pronouncements Accounting Pronouncements not yet adopted by the Company In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which clarifies the principles for recognizing revenue and develops a common standard for all industries. ASU No. 2014-09 was subsequently amended during 2015, 2016 and 2017; these amendments provide further revenue recognition guidance related to principal versus agent considerations, performance obligations and licensing, narrow-scope improvements and practical expedients. ASU No. 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP. The new standard provides a single principles-based, five-step model to be applied to all contracts with customers. This five-step model includes (1) identifying the contract(s) with the customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when each performance obligation is satisfied. More specifically, revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. ASU No. 2014-09 is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016. Upon adoption, ASU No. 2014-09 may either be applied retrospectively to each prior period presented or using the modified retrospective approach with the cumulative effect recognized as of the date of initial application. The Company’s evaluation of the impact of the adoption of ASU No. 2014-09 on its consolidated financial statements is substantially complete. The principal remaining work is a confirmation of the calculation of the cumulative effect of ASU No. 2014-09 as of January 1, 2018, which will be completed during the financial close process for the first quarter of 2018. The adoption of ASU No. 2014-09 is not expected to have a material effect on the Company's consolidated financial statements. The Company has reached the following determinations.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments, which updates certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Under ASU No. 2016-01, certain equity investments will be measured at fair value with changes recognized in net income. ASU No. 2016-01 is effective for reporting periods beginning after December 15, 2017. The Company will adopt ASU No. 2016-01 effective January 1, 2018 and its adoption will not have a material effect on the consolidated financial statements upon adoption. The adoption of ASU No. 2016-01 may increase the volatility of our results of operations as a result of the remeasurement of our cost method investments. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in "Leases (Topic 840)" and generally requires all leases to be recognized in the statement of financial position. The provisions of ASU No. 2016-02 are effective for reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU No. 2016-02 are to be applied using a modified retrospective approach. The Company will adopt ASU No. 2016-02 effective January 1, 2019. The Company is not a lessor and has no capitalized leases and does not expect to enter into any capitalized leases prior to the adoption of ASU No. 2016-02. Accordingly, the Company does not expect the amount or classification of rent expense in its statement of operations to be affected by ASU No. 2016-02. The primary effect of the adoption of ASU No. 2016-02 will be the recognition of a right of use asset and related liability to reflect the Company's rights and obligations under its operating leases. The Company will also be required to provide the additional disclosures stipulated in ASU No. 2016-02. The adoption of ASU No. 2016-02 will not have an impact on the leverage calculation set forth in any of the Company's outstanding debt, or the debt of our Match Group and ANGI Homeservices subsidiaries, or our credit agreement or the credit agreement of Match Group because, in each circumstance, the leverage calculations are not affected by the liability that will be recorded upon adoption of the new standard. While the Company's evaluation of the impact of the adoption of ASU No. 2016-02 on its consolidated financial statements continues, outlined below is a summary of the status of the Company's progress:
The Company does not expect to have a preliminary estimate of the right of use asset and related liability as of the adoption date until the third quarter of 2018. Accounting Pronouncements adopted by the Company In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about the changes to the terms and conditions of a share-based payment award that require an entity to apply modification accounting in "Stock Compensation (Topic 718)." The provisions of ASU No. 2017-09 are effective for reporting periods beginning after December 15, 2017; early adoption is permitted. The provisions of ASU No. 2017-09 are to be applied prospectively to an award modified on or after the adoption date. The Company early adopted the provisions of ASU No. 2017-09 during the third quarter of 2017 and the adoption of this standard update did not have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies how cash receipts and cash payments in certain transactions are presented and classified on the statement of cash flows. The provisions of ASU No. 2016-15 are effective for reporting periods beginning after December 15, 2017, including interim periods, and will require adoption on a retrospective basis unless it is impracticable to apply, in which case we would be required to apply the amendments prospectively as of the earliest date practicable; early adoption is permitted. Upon adoption, cash payments made soon after the acquisition date of a business to settle a contingent consideration liability are classified as cash outflows for investing activities. Cash payments which are not made soon after the acquisition date of a business to settle a contingent consideration liability are separated and classified as cash outflows for financing activities up to the amount of the contingent consideration liability recognized at the acquisition date and as cash outflows from operating activities for any excess. The Company early adopted the provisions of ASU No. 2016-15 on January 1, 2017. As a result, $11.1 million of an acquisition-related contingent consideration payment of $15.0 million, which was in excess of the liability initially recognized at the acquisition date, has been classified as a cash outflow within net cash provided by operating activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2017. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The Company adopted the provisions of ASU No. 2016-09 on January 1, 2017. Excess tax benefits or deficiencies related to equity awards to employees upon the exercise of stock options and the vesting of restricted stock units after January 1, 2017 are (i) reflected in the consolidated statement of operations as a component of the provision for income taxes, rather than recognized in equity (adopted on a prospective basis), and (ii) reflected as operating, rather than financing, cash flows in our consolidated statement of cash flows (adopted on a retrospective basis). Upon adoption, the calculation of fully diluted shares excludes excess tax benefits from the assumed proceeds in applying the treasury stock method; previously such benefits were included in the calculation. This change increased fully diluted shares by approximately 2.4 million shares for the year ended December 31, 2017. The Company continues to account for forfeitures using an estimated forfeiture rate. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which is intended to simplify the accounting for goodwill impairment. The guidance eliminates the requirement to calculate the implied fair value of goodwill under the two-step impairment test to measure a goodwill impairment charge. The Company early adopted the provisions of ASU No. 2017-04 on January 1, 2017 and the adoption of this standard update did not have a material impact on its consolidated financial statements. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES U.S. and foreign earnings (loss) before income taxes and noncontrolling interests are as follows:
The components of the (benefit) provision for income taxes are as follows:
The deferred tax asset for net operating losses ("NOLs") was increased by $361.8 million for the year ended December 31, 2017 for excess tax deductions attributable to stock-based compensation. The related income tax benefit was recorded as a component of the deferred income tax benefit. The current income tax payable was reduced by $51.8 million and $56.4 million for the years ended December 31, 2016 and 2015, respectively, for excess tax deductions attributable to stock-based compensation. For the years ended December 31, 2016 and 2015, the related income tax benefits were recorded as increases to additional paid-in capital. Income taxes receivable (payable) and deferred tax assets (liabilities) are included in the following captions in the accompanying consolidated balance sheet at December 31, 2017 and 2016:
The tax effects of cumulative temporary differences that give rise to significant deferred tax assets and deferred tax liabilities are presented below. The valuation allowance relates to deferred tax assets for which it is more likely than not that the tax benefit will not be realized.
At December 31, 2017, the Company has federal and state NOLs of $850.2 million and $859.4 million, respectively. The federal NOLs, if not utilized, will expire at various times between 2023 and 2037, and the state NOLs, if not utilized, will expire at various times between 2018 and 2037. Federal and state NOLs of $586.8 million and $496.0 million, respectively, can be used against future taxable income without restriction and the remaining NOLs will be subject to limitations under Section 382 of the Internal Revenue Code, separate return limitations, and applicable state law. At December 31, 2017, the Company has foreign NOLs of $378.2 million available to offset future income. Of these foreign NOLs, $355.4 million can be carried forward indefinitely and $22.8 million will expire at various times between 2018 and 2037. During 2017, the Company recognized tax benefits related to NOLs of $257.7 million. Included in this amount is $79.2 million of tax benefits of acquired attributes which was recorded as a reduction in goodwill. At December 31, 2017, the Company has federal and state capital losses of $11.3 million and $30.9 million, respectively. If not utilized, the capital losses will expire between 2020 and 2021. Utilization of capital losses will be limited to the Company's ability to generate future capital gains. At December 31, 2017, the Company has tax credit carryforwards of $87.6 million. Of this amount, $49.3 million relates to credits for foreign taxes, of which $41.8 million was generated from the provisional Transition Tax calculation (described below), $31.1 million relates to credits for research activities and $7.2 million relates to various other credits. Of these credit carryforwards, $15.2 million can be carried forward indefinitely and $72.4 million will expire between 2018 and 2037. The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, the duration of statutory carryforward periods, available tax planning and historical experience. As of December 31, 2017, the Company has a gross deferred tax asset of $130.0 million that the Company expects to fully utilize on a more likely than not basis. During 2017, the Company's valuation allowance increased by $44.4 million primarily due to the establishment of foreign NOLs related to a recent acquisition. At December 31, 2017, the Company has a valuation allowance of $132.6 million related to the portion of tax loss carryforwards, foreign tax credits and other items for which it is more likely than not that the tax benefit will not be realized. A reconciliation of the income tax (benefit) provision to the amounts computed by applying the statutory federal income tax rate to earnings before income taxes is shown as follows:
A reconciliation of the beginning and ending amount of unrecognized tax benefits, including penalties but excluding interest, is as follows:
The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. Included in the income tax provision for the years ended December 31, 2017, 2016 and 2015 is a $0.1 million benefit, $0.4 million expense and $0.1 million expense, respectively, net of related deferred taxes of less than $0.1 million, $0.2 million and less than $0.1 million, respectively, for interest on unrecognized tax benefits. At December 31, 2017 and 2016, the Company has accrued $3.0 million and $2.6 million, respectively, for the payment of interest. At both December 31, 2017 and 2016, the Company has accrued $1.7 million for penalties. The Company is routinely under audit by federal, state, local and foreign authorities in the area of income tax. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service is currently auditing the Company’s federal income tax returns for the years ended December 31, 2010 through 2012. The statute of limitations for the years 2010 through 2012 has been extended to June 30, 2019, and the statute of limitations for the year 2013 has been extended to June 30, 2018. Various other jurisdictions are open to examination for tax years beginning with 2009. Income taxes payable include reserves considered sufficient to pay assessments that may result from examination of prior year tax returns. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. Although management currently believes changes to reserves from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. At December 31, 2017 and 2016, unrecognized tax benefits, including interest and penalties, were $39.7 million and $41.0 million, respectively. If unrecognized tax benefits at December 31, 2017 are subsequently recognized, $37.2 million, net of related deferred tax assets and interest, would reduce income tax expense. The comparable amount as of December 31, 2016 was $37.7 million. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $13.2 million by December 31, 2018, due to expirations of statutes of limitations; $12.9 million of which would reduce the income tax provision. On December 22, 2017, the U.S. enacted the Tax Act. The Tax Act subjects to U.S. taxation certain previously deferred earnings of foreign subsidiaries as of December 31, 2017 (“Transition Tax”) and implements a number of changes that take effect on January 1, 2018, including but not limited to, a reduction of the U.S. federal corporate tax rate from 35% to 21% and a new minimum tax on GILTI earned by foreign subsidiaries. The Company’s income tax provision for the year ended December 31, 2017 includes an expense of $63.8 million related to the Tax Act, of which, $62.7 million relates to the Transition Tax and $1.1 million relates to the remeasurement of U.S. net deferred tax assets due to the reduction in the corporate income tax rate. The Company has sufficient current year NOLs to offset the taxable income resulting from the Transition Tax and, therefore, will not be required to pay the one-time Transition Tax. The Transition Tax on deemed repatriated foreign earnings is a tax on previously untaxed accumulated and current earnings and profits ("E&P") of the Company's foreign subsidiaries. To determine the amount of the Transition Tax, the Company must determine, among other factors, the amount of post-1986 E&P of its foreign subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. The Company was able to make a reasonable estimate of the Transition Tax and has recorded a provisional Transition Tax expense of $62.7 million. Any adjustment of the Company's provisional tax expense will be reflected as a change in estimate in its results in the period in which the change in estimate is made in accordance with Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. The Company is continuing to gather additional information to more precisely compute the amount of the Transition Tax and expects to finalize its calculation prior to the filing of its U.S. federal tax return, which is due on October 15, 2018. The additional information includes, but is not limited to, the allocation and sourcing of income and deductions in 2017 for purposes of calculating the utilization of foreign tax credits. In addition, our estimates may also be impacted and adjusted as the law is clarified and additional guidance is issued at the federal and state levels. As of December 31, 2017, the Company has $452.2 million in foreign cash of which approximately $420.2 million can be repatriated without any significant tax consequences as it has been substantially subjected to U.S. income tax under the Transition Tax imposed by the Tax Act. The Company has not provided for approximately $7.9 million of deferred taxes for the $101.2 million of the foreign cash earnings that is indefinitely reinvested outside the U.S. The Company reassess its intention to remit or permanently reinvest these cash earnings each reporting period; any required adjustment to the income tax provision would be reflected in the period that the Company changes this judgment. |
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BUSINESS COMBINATION | BUSINESS COMBINATION On September 29, 2017, the Company completed the combination of the businesses in the Company's HomeAdvisor segment and Angie's List under a new publicly traded company called ANGI Homeservices. Through the Combination, ANGI Homeservices acquired 100% of the common stock of Angie's List on September 29, 2017 for a total purchase price valued at $781.4 million. Angie’s List is a nationwide marketplace for local services where consumers can research, hire, rate and review the providers of these services. Ratings and reviews assist members in identifying and hiring a provider for their local service needs. Angie’s List's services are provided in markets located across the continental United States. The purchase price of $781.4 million was determined based on the sum of (i) the fair value of the 61.3 million shares of Angie's List common stock outstanding immediately prior to the Combination based on the closing stock price of Angie's List common stock on the NASDAQ on September 29, 2017 of $12.46 per share; (ii) the cash consideration of $1.9 million paid to holders of Angie's List common stock who elected to receive $8.50 in cash per share; and (iii) the fair value of vested equity awards (including the pro rata portion of unvested awards attributable to pre-combination services) outstanding under Angie's List stock plans on September 29, 2017. Each stock option to purchase shares of Angie's List common stock that was outstanding immediately prior to the effective time of the Combination was, as of the effective time of the Combination, converted into an option to purchase (i) that number of Class A shares of ANGI Homeservices equal to the total number of shares of Angie's List common stock subject to such Angie's List option immediately prior to the effective time of the Combination, (ii) at a per-share exercise price equal to the exercise price per share of Angie's List common stock at which such Angie's List option was exercisable immediately prior to the effective time of the Combination. Each award of Angie's List restricted stock units that was outstanding immediately prior to the effective time of the Combination was, as of the effective time of the Combination, converted into an ANGI Homeservices restricted stock unit award with respect to a number of Class A shares of ANGI Homeservices equal to the total number of shares of Angie's List common stock subject to such Angie's List restricted stock unit award immediately prior to the effective time of the Combination. The table below summarizes the purchase price:
The financial results of Angie's List are included in the Company's consolidated financial statements, within the ANGI Homeservices segment, beginning September 29, 2017. For the year ended December 31, 2017, the Company included $58.9 million of revenue and $21.8 million of net loss in its consolidated statement of operations related to Angie's List. The net loss of Angie's List reflects $28.7 million in stock-based compensation expense related to (i) the acceleration of previously issued Angie's List equity awards held by employees terminated in connection with the Combination and (ii) the expense related to previously issued Angie's List equity awards, severance and retention costs of $19.8 million related to the Combination and a reduction in revenue of $7.8 million due to the write-off of deferred revenue related to the Combination. The table below summarizes the fair values of the assets acquired and liabilities assumed at the date of combination:
The purchase price was based on the expected financial performance of Angie's List, not on the value of the net identifiable assets at the time of combination. This resulted in a significant portion of the purchase price being attributed to goodwill because Angie's List is complementary and synergistic to the other North America businesses of ANGI Homeservices. The fair values of the identifiable intangible assets acquired at the date of combination are as follows:
Other current assets, current liabilities and other long-term liabilities of Angie's List were reviewed and adjusted to their fair values at the date of combination, as necessary. The fair value of deferred revenue was determined using an income approach that utilized a cost to fulfill analysis. The fair value of the trade name and trademarks was determined using an income approach that utilized the relief from royalty methodology. The fair values of developed technology and user base were determined using a cost approach that utilized the cost to replace methodology. The fair values of the service professionals and memberships were determined using an income approach that utilized the excess earnings methodology. The valuations of deferred revenue and intangible assets incorporate significant unobservable inputs and require significant judgment and estimates, including the amount and timing of future cash flows, cost and profit margins related to deferred revenue and the determination of royalty and discount rates. The amount attributed to goodwill is not tax deductible. Pro forma financial information The unaudited pro forma financial information in the table below presents the combined results of the Company and Angie's List as if the Combination had occurred on January 1, 2016. The unaudited pro forma financial information includes adjustments required under the acquisition method of accounting and is presented for informational purposes only and is not necessarily indicative of the results that would have been achieved had the Combination actually occurred on January 1, 2016. For the year ended December 31, 2017, pro forma adjustments include (i) reductions in stock-based compensation expense of $78.0 million and transaction related costs of $34.1 million because they are one-time in nature and will not have a continuing impact on operations; and (ii) an increase in amortization of intangibles of $31.9 million. The stock-based compensation expense is related to the modification of previously issued HomeAdvisor vested equity awards, which were converted into ANGI Homeservices' equity awards, and the acceleration of previously issued Angie's List equity awards held by employees terminated in connection with the Combination. The transaction related costs include severance and retention costs of $19.8 million related to the Combination. For the year ended December 31, 2016, pro forma adjustments include a reduction in revenue of $34.1 million due to the write-off of deferred revenue at the assumed date of acquisition as well as increases in stock-based compensation expense of $81.4 million and amortization of intangibles of $56.1 million.
TRANSACTION AND INTEGRATION RELATED COSTS IN CONNECTION WITH THE COMBINATION ANGI Homeservices segment During the year ended December 31, 2017, the Company incurred $44.1 million in costs related to the Combination (including severance, retention, transaction and integration related costs) as well as deferred revenue write-offs of $7.8 million. The Company also incurred $122.1 million in stock-based compensation expense during 2017 related to the modification of previously issued HomeAdvisor vested and unvested equity awards, which were converted into ANGI Homeservices' equity awards, the expense related to previously issued Angie's List equity awards and the acceleration of certain Angie's List equity awards resulting from the termination of employees in connection with the Combination. See "Note 4—Business Combination" for additional information on the Combination. A summary of the costs incurred, payments made and the related accrual for ANGI Homeservices at December 31, 2017 is presented below.
The costs are allocated as follows in the accompanying consolidated statement of operations:
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets, net are as follows:
The following table presents the balance of goodwill by reportable segment, including the changes in the carrying value of goodwill, for the year ended December 31, 2017:
The additions primarily relate to the acquisitions of Angie's List, MyBuilder and HomeStars (included in the ANGI Homeservices segment), and Livestream (included in the Video segment). The deductions relate to the sale of The Princeton Review (included in the Other segment). The following table presents the balance of goodwill by reportable segment, including the changes in the carrying value of goodwill, for the year ended December 31, 2016:
The additions primarily relate to the acquisitions of MyHammer Holding AG (included in the ANGI Homeservices segment) and VHX (included in the Video segment). The deductions primarily relate to the sales of PriceRunner and ShoeBuy (both included in the Other segment). During the second quarter of 2016, the Company recorded impairment charges related to the entire $275.4 million balance of the Publishing reporting unit goodwill. The goodwill impairment charge at Publishing was driven by the impact from the new Google contract, traffic trends and monetization challenges and the corresponding impact on the then estimated fair value. The December 31, 2017 and 2016 goodwill balance reflects accumulated impairment losses of $598.0 million, $529.1 million and $11.6 million at Publishing, Applications and Electus (included in the Video segment), respectively. Intangible assets with indefinite lives are trade names and trademarks acquired in various acquisitions. During the second quarter of 2016, the Company changed the classification of certain intangibles from indefinite-lived to definite-lived at Publishing. At December 31, 2017 and 2016, intangible assets with definite lives are as follows:
At December 31, 2017, amortization of intangible assets with definite lives for each of the next five years and thereafter is estimated to be as follows:
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MARKETABLE SECURITIES |
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Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES | MARKETABLE SECURITIES At December 31, 2017, current available-for-sale marketable securities are as follows:
The contractual maturities of debt securities classified as current available-for-sale at December 31, 2017 are due within one year. There are no investments in available-for-sale marketable debt securities that are in an unrealized loss position as of December 31, 2017. At December 31, 2016, current available-for-sale marketable securities are as follows:
The aggregate fair value of available-for-sale marketable debt securities with unrealized losses is $37.0 million as of December 31, 2016. There are no investments in available-for-sale marketable debt securities that have been in a continuous unrealized loss position for longer than twelve months as of December 31, 2016. The unrealized gains and losses in the above table at December 31, 2016 are included in "Accumulated other comprehensive loss" in the accompanying consolidated balance sheet. The following table presents the proceeds from maturities and sales of available-for-sale marketable securities and the related gross realized gains:
Gross realized gains from the maturities and sales of available-for-sale marketable securities are included in "Other (expense) income, net" in the accompanying consolidated statement of operations. There were no gross realized losses from the maturities and sales of available-for-sale marketable securities for the years ended December 31, 2017, 2016 and 2015. However, during the second quarter of 2015, the Company recognized $0.3 million in losses that were deemed to be other-than-temporary related to various corporate debt securities that were expected to be sold by the Company, in part, to fund its cash needs related to Match Group's acquisition of PlentyOfFish for $575 million. |
LONG-TERM INVESTMENTS |
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Long-term Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM INVESTMENTS | LONG-TERM INVESTMENTS Long-term investments consist of:
Cost method investments In 2017, 2016 and 2015, the Company recorded $9.5 million, $10.0 million and $4.5 million, respectively, of other-than-temporary impairment charges for certain cost method investments as a result of our assessment of the near-term prospects and financial condition of the investees. These charges are included in "Other (expense) income, net" in the accompanying consolidated statement of operations. On October 23, 2017, Match Group sold a cost method investment for net proceeds of $60.2 million. The gain on sale of $9.1 million is included in "Other (expense) income, net" in the accompanying consolidated statement of operations. Equity method investments In 2017 and 2016, the Company recorded other-than-temporary impairment charges on certain of its investments of $2.7 million and $0.6 million, respectively. These charges are included in "Other (expense) income, net" in the accompanying consolidated statement of operations. |
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS | FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS The following tables present the Company's financial instruments that are measured at fair value on a recurring basis:
The following table presents the changes in the Company's financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
Contingent consideration arrangements As of December 31, 2017, there are three contingent consideration arrangements related to business acquisitions. Two of the contingent consideration arrangements have limits as to the maximum amount that can be paid. The maximum contingent payments related to these arrangements is $33.0 million and the gross fair value of these arrangements, before the unamortized discount, at December 31, 2017 is $3.0 million. No payment is expected for the one contingent consideration arrangement without a limit on the maximum earnout. The contingent consideration arrangements are based upon earnings performance and/or operating metrics. The Company generally determined the fair value of the contingent consideration arrangements by using probability-weighted analyses to determine the amounts of the gross liability, and, because the arrangements were initially long-term in nature, applying a discount rate that appropriately captures the risks associated with the obligation to determine the net amount reflected in the consolidated financial statements. The fair values of the contingent consideration arrangements at both December 31, 2017 and 2016 reflect discount rates of 12%. The fair value of the contingent consideration arrangements is sensitive to changes in the forecasts of earnings and/or the relevant operating metrics and changes in discount rates. The Company remeasures the fair value of the contingent consideration arrangements each reporting period, including the accretion of the discount, if applicable, and changes are recognized in “General and administrative expense” in the accompanying consolidated statement of operations. The contingent consideration arrangement liability at December 31, 2017 and 2016 includes a current portion of $0.6 million and $33.4 million, respectively, and non-current portion of $2.0 million and $0.4 million, respectively, which are included in “Accrued expenses and other current liabilities” and “Other long-term liabilities,” respectively, in the accompanying consolidated balance sheet. 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 the current portion, is estimated using market prices or indices for similar liabilities and takes into consideration other factors such as credit quality and maturity, which are Level 3 inputs. |
LONG-TERM DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consists of:
Match Group Senior Notes: The outstanding balance of the Match Group 6.75% Senior Notes of $445.2 million was redeemed on December 17, 2017 with the proceeds from the issuance of the Match Group 5.00% Senior Notes and cash on hand. The Match Group 6.375% Senior Notes were issued on June 1, 2016. The proceeds of $400 million were used to prepay a portion of indebtedness outstanding under the Match Group Term Loan. At any time prior to June 1, 2019, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium. Thereafter, these notes may be redeemed at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on June 1 of the years indicated below:
On December 4, 2017, Match Group completed a private offering of $450 million aggregate principal amount of its 5.00% Senior Notes due December 15, 2027. The proceeds from these notes, along with cash on hand, were used to redeem the outstanding balance of the Match Group 6.75% Senior Notes. At any time prior to December 15, 2022, the Match Group 5.00% Senior Notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium. Thereafter, these notes may be redeemed at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on December 15 of the years indicated below:
The indentures governing the Match Group 6.375% and 5.00% Senior Notes (i) contain covenants that would limit Match Group's ability to pay dividends or to make distributions and repurchase or redeem Match Group stock in the event a default has occurred or Match Group's leverage ratio (as defined in the indentures) exceeds 5.0 to 1.0 and (ii) are ranked equally with each other. At December 31, 2017, there were no limitations pursuant thereto. There are additional covenants that limit Match Group's ability and the ability of its subsidiaries to, among other things, (i) incur indebtedness, make investments, or sell assets in the event Match Group is not in compliance with certain ratios set forth in the indenture, and (ii) incur liens, enter into agreements restricting Match Group subsidiaries' ability to pay dividends, enter into transactions with affiliates and consolidate, merge or sell substantially all of their assets. Match Group Term Loan and Match Group Credit Facility: On November 16, 2015, under a credit agreement (the "Match Group Credit Agreement"), Match Group borrowed $800 million in the form of a term loan (the "Match Group Term Loan"). During 2016, Match Group made $450 million of principal payments, $400 million of which was funded from proceeds of the 6.375% Senior Notes (described above). On August 14, 2017, Match Group increased its Term Loan by $75 million to $425 million, repriced the outstanding balance at LIBOR plus 2.50% and reduced the LIBOR floor to 0.00%. The Match Group Term Loan provides for additional annual principal payments as part of an excess cash flow sweep provision, the amount of which, if any, is governed by the secured net leverage ratio contained in the Match Group Credit Agreement. The interest rate on the Match Group Term Loan at December 31, 2017 is 3.85%. Interest payments are due at least quarterly through the term of the loan. Match Group has a $500 million revolving credit facility (the "Match Group Credit Facility") that expires on October 7, 2020. At December 31, 2017 and 2016, there were no outstanding borrowings under the Match Group Credit Facility. The annual commitment fee on undrawn funds based on the current leverage ratio is 30 basis points. Borrowings under the Match Group Credit Facility bear interest, at Match Group's option, at a base rate or LIBOR, in each case plus an applicable margin, which is determined by reference to a pricing grid based on Match Group's consolidated net leverage ratio. The terms of the Match Group Credit Facility require Match Group to maintain a consolidated net leverage ratio of not more than 5.0 to 1.0 and a minimum interest coverage ratio of not less than 2.5 to 1.0 (in each case as defined in the agreement). There are additional covenants under the Match Group Credit Facility and the Match Group Term Loan that limit the ability of Match Group and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions. While the Match Group Term Loan remains outstanding, these same covenants under the Match Group Credit Agreement are more restrictive than the covenants that are applicable to the Match Group Credit Facility. Obligations under the Match Group Credit Facility and Match Group Term Loan are unconditionally guaranteed by certain Match Group wholly-owned domestic subsidiaries, and are also secured by the stock of certain Match Group domestic and foreign subsidiaries. The Match Group Term Loan and outstanding borrowings, if any, under the Match Group Credit Facility rank equally with each other, and have priority over the Match Group 6.375% and 5.00% Senior Notes to the extent of the value of the assets securing the borrowings under the Match Group Credit Agreement. ANGI Homeservices Term Loan: On November 1, 2017, ANGI Homeservices borrowed $275 million under a five-year term loan facility ("ANGI Homeservices Term Loan"). The ANGI Homeservices Term Loan is guaranteed by ANGI Homeservices' wholly-owned material domestic subsidiaries and is secured by substantially all assets of ANGI Homeservices and the guarantors, subject to certain exceptions. The ANGI Homeservices Term Loan currently bears interest at LIBOR plus 2.00%, or 3.38% at December 31, 2017, which is subject to change based on ANGI Homeservices' consolidated net leverage ratio. Interest payments are due at least quarterly through the term of the loan and quarterly principal payments of 1.25% of the original principal amount in the first three years, 2.5% in the fourth year and 3.75% in the fifth year are required. A portion of the proceeds of the loan were used to repay two intercompany notes outstanding to IAC and its subsidiaries and the remaining proceeds will be used for general corporate purposes. See "Note 17—Related Party Transactions" for further information on the intercompany notes. There are additional covenants under the ANGI Homeservices Term Loan that limit the ability of ANGI Homeservices and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions. Obligations under the ANGI Homeservices Term Loan are unconditionally guaranteed by certain ANGI Homeservices wholly-owned domestic subsidiaries, and are also secured by the stock of certain ANGI Homeservices domestic and foreign subsidiaries. IAC Exchangeable Notes: On October 2, 2017, IAC FinanceCo, Inc., a direct, wholly-owned subsidiary of the Company, completed a private offering of $517.5 million aggregate principal amount of its 0.875% Exchangeable Senior Notes due October 1, 2022 (the “Exchangeable Notes”). The Exchangeable Notes are guaranteed by the Company. Each $1,000 of principal of the Exchangeable Notes is exchangeable for 6.5713 shares of the Company's common stock, which is equivalent to an exchange price of approximately $152.18 per share, subject to adjustment upon the occurrence of specified events. Upon conversion, the Company has the right to settle the conversion of each $1,000 principal amount of Exchangeable Notes with any of the three following alternatives: (1) shares of our common stock, (2) cash or (3) a combination of cash and shares of our common stock. The Exchangeable Notes are exchangeable at any time prior to the close of business on the business day immediately preceding July 1, 2022 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2017 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days during the period of 30 consecutive trading days during the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the exchange rate on each such trading day; (3) if the issuer calls the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events as further described under the Indenture. The net proceeds from the sale of the Exchangeable Notes were approximately $499.5 million, after deducting fees and expenses. The net proceeds from the offering were:
We separately account for the debt and the equity components of the Exchangeable Notes. Accordingly, the Company recorded a debt discount and corresponding increase to additional paid-in capital of $70.4 million, which is the fair value attributed to the exchange feature or equity component of the debt, on the date of issuance. The Company is amortizing the debt discount utilizing the effective interest method over the life of the Exchangeable Notes which increases the effective interest rate from its coupon rate of 0.875% to 3.88%. Transaction costs of $18.0 million were allocated between the liability and equity components. In connection with the debt offering, the Company purchased call options allowing the Company to purchase initially (subject to adjustment upon the occurrence of specified events) the entire 3.4 million shares that would be issuable upon the exchange of the Exchangeable Notes at approximately $152.18 per share (the "Exchangeable Note Hedge"), and sold warrants allowing the holder to purchase initially (subject to adjustment upon the occurrence of specified events) 3.4 million shares at $229.70 per share (the "Warrant"). The Exchangeable Note Hedge is expected to reduce the potential dilutive effect of the Company's common stock upon any exchange of notes and/or offset any cash payment IAC FinanceCo, Inc. is required to make in excess of the principal amount of the exchanged notes. The Warrants would separately have a dilutive effect on the Company's common stock to the extent that the market price per share of the Company common stock exceeds the applicable strike price of the Warrants. The cost of the Exchangeable Note Hedge was $74.4 million, which was recorded as a reduction to additional paid-in capital. The aggregate proceeds from the issuance of the Warrant were $23.6 million, which was recorded as an increase to additional paid-in capital. The Company incurred cash and non-cash interest expense of $4.3 million in 2017 for the Exchangeable Notes. As of December 31, 2017, the unamortized discount amount totaled $67.2 million resulting in a net carrying value of the liability component of $450.3 million. IAC Senior Notes: The 4.75% Senior Notes were issued by IAC on December 21, 2012. These Notes are unconditionally guaranteed by certain wholly-owned domestic subsidiaries, which are designated as guarantor subsidiaries. See "Note 21—Guarantor and Non-Guarantor Financial Information" for financial information relating to guarantors and non-guarantors. The indenture governing the 4.75% Senior Notes was amended to eliminate substantially all of the restrictive covenants contained therein in connection with the Match Exchange Offer. We may redeem the 4.75% Senior Notes at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date, if redeemed twelve-month period beginning on December 15 of the years indicated below:
IAC Credit Facility: IAC has a $300 million revolving credit facility (the "IAC Credit Facility") that expires October 7, 2020. At December 31, 2017 and 2016, there were no outstanding borrowings under the IAC Credit Facility. The annual commitment fee on undrawn funds is currently 25 basis points, and is based on the leverage ratio (as defined in the agreement) most recently reported. Borrowings under the IAC Credit Facility bear interest, at the Company's option, at a base rate or LIBOR, in each case, plus an applicable margin, which is determined by reference to a pricing grid based on the Company's leverage ratio. The terms of the IAC Credit Facility require that the Company maintains a leverage ratio of not more than 3.25 to 1.0 and restrict our ability to incur additional indebtedness. Borrowings under the IAC Credit Facility are unconditionally guaranteed by the same domestic subsidiaries that guarantee the 4.75% Senior Notes and are also secured by the stock of certain of our domestic and foreign subsidiaries. The 4.75% Senior Notes are subordinate to the outstanding borrowings under the IAC Credit Facility to extent of the value of the assets securing such borrowings. On October 2, 2017, IAC Group, LLC ("IAC Group"), a wholly-owned subsidiary of the Company, entered into a joinder agreement by and among IAC Group, the Company, and each of the other loan parties party to the IAC Credit Facility. Pursuant to the joinder agreement, IAC Group became the successor borrower under the IAC Credit Facility and IAC's obligations under the credit agreement were terminated. Borrowings under the IAC Credit Facility are still unconditionally guaranteed by the same domestic subsidiaries that guarantee the 4.75% Senior Notes and is still secured by the stock of certain of our domestic and foreign subsidiaries. Long-term debt maturities:
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SHAREHOLDERS' EQUITY |
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Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Description of Common Stock and Class B Convertible Common Stock Each holder of shares of IAC common stock and IAC Class B common stock vote together as a single class with respect to matters that may be submitted to a vote or for the consent of IAC's shareholders generally, including the election of directors. In connection with any such vote, each holder of IAC common stock is entitled to one vote for each share of IAC common stock held and each holder of IAC Class B common stock is entitled to ten votes for each share of IAC Class B common stock held. Notwithstanding the foregoing, the holders of shares of IAC common stock, acting as a single class, are entitled to elect 25% of the total number of IAC's directors, and, in the event that 25% of the total number of directors shall result in a fraction of a director, then the holders of shares of IAC common stock, acting as a single class, are entitled to elect the next higher whole number of IAC's directors. In addition, Delaware law requires that certain matters be approved by the holders of shares of IAC common stock or holders of IAC Class B common stock voting as a separate class. Shares of IAC Class B common stock are convertible into shares of IAC common stock at the option of the holder thereof, at any time, on a share-for-share basis. Such conversion ratio will in all events be equitably preserved in the event of any recapitalization of IAC by means of a stock dividend on, or a stock split or combination of, outstanding shares of IAC common stock or IAC Class B common stock, or in the event of any merger, consolidation or other reorganization of IAC with another corporation. Upon the conversion of shares of IAC Class B common stock into shares of IAC common stock, those shares of IAC Class B common stock will be retired and will not be subject to reissue. Shares of IAC common stock are not convertible into shares of IAC Class B common stock. Except as described herein, shares of IAC common stock and IAC Class B common stock are identical. The holders of shares of IAC common stock and the holders of shares of IAC Class B common stock are entitled to receive, share for share, such dividends as may be declared by IAC's Board of Directors out of funds legally available therefore. In the event of a liquidation, dissolution, distribution of assets or winding-up of IAC, the holders of shares of IAC common stock and the holders of shares of IAC Class B common stock are entitled to receive, share for share, all the assets of IAC available for distribution to its stockholders, after the rights of the holders of any IAC preferred stock have been satisfied. Reserved Common Shares In connection with equity compensation plans, the Exchangeable Notes and warrants, 19.1 million shares of IAC common stock are reserved at December 31, 2017. Warrants At December 31, 2017, warrants to acquire initially (subject to adjustment upon the occurrence of specified events) 3.4 million shares of IAC common stock at $229.70 per share were outstanding. The warrants were issued in connection with the issuance of the Exchangeable Notes. During the year ended December 31, 2017 there were no warrants exercised. No warrants were outstanding at December 31, 2016 and 2015. See "Note 9—Long-term Debt" for additional information on the Company's Exchangeable Notes. Common Stock Repurchases During 2017, 2016 and 2015, the Company repurchased 0.7 million, 6.3 million and 3.0 million shares of IAC common stock for aggregate consideration, on a trade date basis, of $50.1 million, $315.3 million and $200.0 million, respectively. On May 3, 2016, IAC's Board of Directors authorized the repurchase of an additional 10.0 million shares of IAC common stock. At December 31, 2017, the Company has approximately 8.6 million shares remaining in its share repurchase authorization. |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables present the components of accumulated other comprehensive (loss) income and items reclassified out of accumulated other comprehensive loss into earnings:
At December 31, 2017, there was no tax benefit or provision on the accumulated other comprehensive loss.
(b) Amount is net of a tax provision of $0.2 million.
(c) Amount is net of a tax provision of $0.1 million. |
EARNINGS (LOSS) PER SHARE |
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EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE The following table sets forth the computation of basic and diluted earnings (loss) per share attributable to IAC shareholders:
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STOCK-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION IAC currently has two active plans under which awards have been granted. These plans cover stock options to acquire shares of IAC common stock, RSUs, PSUs and restricted stock, as well as provide for the future grant of these and other equity awards. These plans authorize the Company to grant awards to its employees, officers, directors and consultants. At December 31, 2017, there are 2.5 million shares available for grant under the plans. The plans were adopted in 2008 and 2013, have a stated term of ten years, and provide that the exercise price of stock options granted will not be less than the market price of the Company's common stock on the grant date. The plans do not specify grant dates or vesting schedules of awards as those determinations have been delegated to the Compensation and Human Resources Committee of IAC's Board of Directors (the "Committee"). Each grant agreement reflects the vesting schedule for that particular grant as determined by the Committee. Broad-based stock option awards issued to date have generally vested in equal annual installments over a four-year period and RSU awards currently outstanding generally vest in three 33% installments over a three-year period, in each case, from the grant date. PSU awards currently outstanding cliff-vest after a three-year period from the date of grant. The amount of stock-based compensation expense recognized in the consolidated statement of operations is net of estimated forfeitures, as the expense recorded is based on awards that are ultimately expected to vest. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods if actual forfeitures differ from the estimated rate. At December 31, 2017, there is $423.2 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.5 years. The total income tax benefit recognized in the accompanying consolidated statement of operations for the years ended December 31, 2017, 2016 and 2015 related to stock-based compensation is $423.0 million, $34.8 million and $36.6 million, respectively. The increase in total income tax benefit recognized during 2017 is due to the adoption of ASU 2019-06 and the recognition of excess tax benefits attributable to stock-based compensation included as a component of the current year provision for income taxes rather than recognized in equity. The Company will recognize a corporate income tax deduction based on the intrinsic value of the stock options exercised in 2017, however, there will be some delay in the timing of the realization of the cash benefit of the income tax deduction because it will be dependent upon the amount and timing of future taxable income and the timing of estimated income tax payments. The income tax benefit to be realized on stock option deductions, including those net settled, for the year ended December 31, 2017, is $411.6 million. The income tax benefit realized on stock option deductions, including those net settled, for the years ended December 31, 2016 and 2015 are $63.4 million and $69.3 million, respectively. IAC Stock Options Stock options outstanding at December 31, 2017 and changes during the year ended December 31, 2017 are as follows:
The aggregate intrinsic value in the table above represents the difference between IAC's closing stock price on the last trading day of 2017 and the exercise price, multiplied by the number of in-the-money options that would have been exercised had all option holders exercised their options on December 31, 2017. The total intrinsic value of stock options exercised during the years ended December 31, 2017, 2016 and 2015 is $164.6 million, $17.1 million and $53.0 million, respectively. The following table summarizes the information about stock options outstanding and exercisable at December 31, 2017:
The fair value of stock option awards, with the exception of market-based awards, is estimated on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions, including expected volatility and expected term. During 2017, 2016 and 2015, expected stock price volatilities were estimated based on the Company's historical volatility. The risk-free interest rates are based on U.S. Treasuries with comparable terms as the awards, in effect at the grant date. Expected term is based upon the historical exercise behavior of our employees and the dividend yields are based on IAC's historical dividend payments. The following are the weighted average assumptions used in the Black-Scholes option pricing model:
During 2015, the Company granted market-based stock options to certain employees. These awards only vest if the price of IAC common stock exceeds the relevant price threshold for a twenty-day consecutive period and the service requirement is met. The market-based vesting condition was achieved in 2017. The service requirement provides that these awards vest in four equal annual installments beginning on the first anniversary of the grant date. The grant date fair value of each market-based award was estimated using a lattice model that incorporates a Monte Carlo simulation of IAC's stock price. The inputs used to fair value these awards included a weighted average expected volatility of 27%, risk-free interest rate of 2.3% and a 1.8% dividend yield. The expected term of these awards was derived from the output of the option valuation model. Expense is recognized over the longer of the vesting period of each of the four installments or the expected term. The weighted average expected term of these awards is 4 years. Approximately 1.2 million, 1.7 million and 2.5 million stock options were granted by the Company during the years ended December 31, 2017, 2016 and 2015, respectively. The weighted average fair value of stock options granted during the years ended December 31, 2017, 2016 and 2015 with exercise prices equal to the market prices of IAC's common stock on the date of grant are $22.94, $12.34 and $15.24, respectively. During the year ended December 31, 2015, the weighted average exercise price and weighted average fair value of stock options granted with exercise prices greater than the market value of IAC's common stock on the date of grant are $84.31 and $12.00, respectively. Cash received from stock option exercises for the years ended December 31, 2017, 2016 and 2015 are $82.4 million, $25.8 million and $27.3 million, respectively. IAC Restricted Stock Units and Performance-based Stock Units RSUs and PSUs are awards in the form of phantom shares or units denominated in a hypothetical equivalent number of shares of IAC common stock and with the value of each RSU and PSU equal to the fair value of IAC common stock at the date of grant. Each RSU and PSU grant is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. PSUs also include performance-based vesting, where certain performance targets set at the time of grant must be achieved before an award vests. For RSU grants, the expense is measured at the grant date as the fair value of IAC common stock and expensed as stock-based compensation over the vesting term. For PSU grants, the expense is measured at the grant date as the fair value of IAC common stock and expensed as stock-based compensation over the vesting term if the performance targets are considered probable of being achieved. Unvested RSUs and PSUs outstanding at December 31, 2017 and changes during the year ended December 31, 2017 are as follows:
The weighted average fair value of RSUs and PSUs granted during the years ended December 31, 2017, 2016 and 2015 based on market prices of IAC's common stock on the grant date was $90.04, $46.92 and $67.71, respectively. The total fair value of RSUs and PSUs that vested during the years ended December 31, 2017, 2016 and 2015 was $32.5 million, $13.5 million and $16.8 million, respectively. Equity Instruments Denominated in the Shares of Certain Subsidiaries Non-publicly-traded Subsidiaries The following description excludes awards denominated in the shares of the Company's publicly-traded subsidiaries, Match Group and ANGI Homeservices. Match Group and ANGI Homeservices stock-based awards are issued pursuant to their respective stock incentive plans. IAC has granted stock options and stock settled stock appreciation rights denominated in the equity of certain non-publicly traded subsidiaries to employees and management of those subsidiaries. These equity awards vest over a period of years or upon the occurrence of certain prescribed events. The value of the stock options and stock settled stock appreciation rights is tied to the value of the common stock of these subsidiaries. Accordingly, these interests only have value to the extent the relevant business appreciates in value above the initial value utilized to determine the exercise price. These interests can have significant value in the event of significant appreciation. The interests are ultimately settled in IAC common stock with fair market value generally determined by negotiation or arbitration, at various dates through 2027. These equity awards are settled on a net basis, with the award holder entitled to receive a payment in shares equal to the intrinsic value of the award at exercise less an amount equal to the required cash tax withholding payment. The number of shares ultimately needed to settle these awards may vary significantly from the estimated numbers below as a result of both movements in our stock price and a determination of fair value of the relevant subsidiary that is different than our estimate. The expense associated with these equity awards is initially measured at fair value at the grant date and is expensed as stock-based compensation over the vesting term. The number of IAC common shares that would be required to settle these interests at current estimated fair values, including vested and unvested interests, at December 31, 2017 is 0.1 million shares. Withholding taxes, which will be paid by the Company on behalf of the employees upon exercise, would have been $15.2 million at December 31, 2017, assuming a 50% withholding rate. Match Group Following the completion of the Match Group IPO, equity awards that related to certain subsidiaries (principally Tinder, Inc.) of Match Group were settleable, at IAC's election, in shares of IAC common stock or Match Group common stock. Pursuant to the Employee Matters Agreement between IAC and Match Group, to the extent shares of IAC common stock are issued in settlement of these awards, Match Group reimburses IAC for the cost of those shares in cash or by issuing IAC shares of Match Group common stock. In July 2017, Tinder was merged into Match Group and as a result, all Tinder denominated equity awards were converted into Match Group tandem stock options ("Tandem Awards"). All of the Match Group Tandem Awards exercised during 2017 were exercised on a net basis and were settled in IAC common shares; the Company issued 2.0 million shares of its common stock to settle these awards and Match Group issued 11.3 million shares of its common stock to IAC as reimbursement. During 2017, Match Group also purchased certain fully vested Tandem Awards. During 2017, Match Group made cash payments of approximately $520 million to cover both the withholding taxes paid on behalf of employees exercising these converted awards and the purchase of certain fully vested awards. Assuming all vested and unvested Match Group Tandem Awards outstanding on December 31, 2017 were exercised on a net basis on that date and settled with IAC stock, 0.8 million IAC common shares would have been issued in settlement. Match Group would have remitted $102.4 million in cash in withholding taxes (assuming a 50% withholding rate) on behalf of the employees and issued 3.3 million of its common shares to IAC as reimbursement. During 2016 and 2015, the Company granted a nominal amount of IAC denominated market-based awards to certain Match Group employees. The number of awards that ultimately vest is dependent upon Match Group's stock price. The grant date fair value of each market-based award is estimated using a lattice model that incorporates a Monte Carlo simulation of Match Group's stock price. Each market-based award is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. Some of the market-based awards contain performance targets set at the time of grant that must be achieved before an award vests. ANGI Homeservices In connection with the Combination, previously issued stock appreciation rights that related to the common stock of HomeAdvisor (US) were converted into stock appreciation rights that are exercisable for Class A shares of ANGI Homeservices. IAC has the right to settle these awards using shares of IAC common stock. To the extent shares of IAC common stock are issued in settlement of these awards, ANGI Homeservices will reimburse IAC by issuing to IAC additional Class A shares of ANGI Homeservices common stock pursuant to the Employee Matters Agreement between IAC and ANGI Homeservices. These equity awards are settled on a net basis, with the award holder entitled to receive a payment in shares equal to the intrinsic value of the award at exercise less an amount equal to the required cash tax withholding payment. Assuming all vested and unvested stock appreciation rights outstanding on December 31, 2017 were exercised on a net basis and settled using IAC stock, 1.4 million IAC common shares would have been issued in settlement. ANGI Homeservices would have remitted $171.3 million in cash in withholding taxes (assuming a 50% withholding rate) on behalf of the employees and issued 16.4 million of its common shares to IAC as reimbursement. Modification of awards In connection with the Combination, the previously issued HomeAdvisor (US) stock appreciation rights were converted into ANGI Homeservices' equity awards resulting in a modification charge of $217.7 million of which $93.4 million was recognized as stock-based compensation expense in the year ended December 31, 2017 and the remaining charge will be recognized over the vesting period of the modified awards. During the second quarter of 2017, the Company modified certain subsidiary denominated equity awards and recognized a modification charge of $6.6 million. During 2016, the Company modified certain subsidiary denominated equity awards resulting in a modification charge of $7.3 million (subsequently reduced to $7.1 million due to forfeitures) of which $0.7 million and $6.3 million were recognized as stock-based compensation in the years ended December 31, 2017 and 2016, respectively, and $0.1 million will be recognized over the remaining vesting period of the modified awards. During the first quarter of 2015, the Company modified certain subsidiary denominated equity awards resulting in a modification charge of $5.8 million of which $0.2 million, $0.6 million and $3.5 million was recognized in 2017, 2016 and 2015, respectively, and the remaining charge will be recognized over the remaining vesting period of the modified awards. During the third quarter of 2015, the Company modified certain subsidiary denominated vested equity awards and recognized a modification charge of $6.8 million. During the fourth quarter of 2015, the Company repurchased certain subsidiary denominated vested equity awards in exchange for $23.4 million in cash and fully vested modified equity awards and recognized a modification charge of $7.7 million. These modification charges are included in stock-based compensation in the year ended December 31, 2015. During 2014, the Company granted an equity award denominated in shares of a subsidiary of the Company to a non-employee, which was marked to market each reporting period. In the third quarter of 2016, Match Group settled the vested portion of the award for cash of $13.4 million. In the third quarter of 2017, the award was modified and Match Group settled the remaining portion of the award for cash of $33.9 million. |
SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION. The overall concept that IAC employs in determining its operating segments is to present the financial information in a manner consistent with: how the chief operating decision maker views the businesses; how the businesses are organized as to segment management; and the focus of the businesses with regards to the types of services or products offered or the target market. Operating segments are combined for reporting purposes if they meet certain aggregation criteria, which principally relate to the similarity of their economic characteristics or, in the case of the Other reportable segment, do not meet the quantitative thresholds that require presentation as separate reportable segments.
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The following table presents the revenue of the Company's principal segments disaggregated by type of service:
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Revenue by geography is based on where the customer is located. Geographic information about revenue and long-lived assets is presented below:
The following tables reconcile operating income (loss) for the Company's reportable segments and net earnings (loss) attributable to IAC shareholders to Adjusted EBITDA:
The following tables reconcile segment assets to total assets:
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments The Company leases land, office space, data center facilities and equipment used in connection with its operations under various operating leases, many of which contain escalation clauses. The Company is also committed to pay a portion of the related operating expenses under a data center lease agreement. These operating expenses are not included in the table below. Future minimum payments under operating lease agreements are as follows:
Expenses charged to operations under these agreements are $37.9 million, $50.8 million and $39.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. The Company's most significant operating lease is a seventy-seven-year land lease for IAC's headquarters building in New York City and approximates 48% of the future minimum payments due under all operating lease agreements in the table above. The Company also has funding commitments that could potentially require its performance in the event of demands by third parties or contingent events as follows:
The purchase obligations principally include web hosting commitments. The letters of credit support the Company's casualty insurance program. Contingencies In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management's view of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See "Note 3—Income Taxes" for additional information related to income tax contingencies. |
SUPPLEMENTAL CASH FLOW INFORMATION |
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Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Supplemental Disclosure of Non-Cash Transactions: The Company recorded acquisition-related contingent consideration liabilities of $0.2 million and $27.4 million during the years ended December 31, 2016 and 2015, respectively, in connection with various acquisitions. There were no acquisition-related contingent consideration liabilities recorded for the year ended December 31, 2017. See "Note 8—Fair Value Measurements and Financial Instruments" for additional information on contingent consideration arrangements. On September 29, 2017, ANGI Homeservices issued 61.3 million shares of Class A common stock valued at $763.7 million in connection with the Combination. On November 16, 2015, Match Group exchanged $445.3 million of 4.75% Senior Notes for $445.2 million of Match Group 6.75% Senior Notes. Supplemental Disclosure of Cash Flow Information:
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RELATED PARTY TRANSACTIONS |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS IAC and Match Group: IAC and Match Group, in connection with Match Group's IPO, entered into the following agreements:
During the years ended December 31, 2017 and 2016, 11.9 million and 1.0 million shares, respectively, of Match Group common stock were issued to IAC pursuant to the employee matters agreement; 11.3 million and 0.5 million, respectively, of which were issued as reimbursement for shares of IAC common stock issued in connection with the exercise and settlement of Match Group tandem stock options and equity awards denominated in shares of a subsidiary of Match Group, respectively; and 0.6 million and 0.4 million, respectively, of which were issued as reimbursement for shares of IAC common stock issued in connection with the exercise and vesting of IAC equity awards held by Match Group employees. For the years ended December 31, 2017 and 2016, and for the period from the date of the IPO through December 31, 2015, Match Group was charged $9.9 million, $11.8 million and $0.7 million, respectively, by the Company for services rendered pursuant to a services agreement. Included in these amounts are $5.1 million, $4.3 million and $0.3 million, respectively, for leasing of office space for certain of Match Group's businesses at properties owned by IAC. These amounts were paid in full by Match Group at December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, Match Group had a tax receivable of $7.3 million and $9.0 million, respectively, due from the Company pursuant to the tax sharing agreement. Refunds made by the Company during 2017 pursuant to this agreement were $10.9 million and payments made to the Company during 2016 were $19.9 million. In December 2017, international subsidiaries of Match Group agreed to sell NOLs that were not expected to be utilized to an IAC subsidiary for $0.9 million. IAC and ANGI Homeservices: IAC and ANGI Homeservices, in connection with the Combination, entered into the following agreements:
Additionally, on September 29, 2017, the Company and ANGI Homeservices entered into two intercompany notes (collectively referred to as "Intercompany Notes") to ANGI Homeservices as follows: (i) a Payoff Intercompany Note, which provided the funds necessary to repay the outstanding balance under Angie's List's previously existing credit agreement, totaling $61.5 million; and (ii) a Working Capital Intercompany Note, which provided ANGI Homeservices with $15 million for working capital purposes. These Intercompany Notes were repaid on November 1, 2017, with a portion of the proceeds from the ANGI Homeservices Term Loan that were received on the same date. See "Note 9—Long-term Debt" for further information. For the period subsequent to the Combination through December 31, 2017, 0.4 million shares of ANGI Homeservices common stock were issued to IAC pursuant to the employee matters agreement as reimbursement for shares of IAC common stock issued in connection with the exercise and vesting of IAC equity awards held by ANGI Homeservices employees. For the period subsequent to the Combination through December 31, 2017, ANGI Homeservices was charged $1.7 million by the Company for services rendered pursuant to the services agreement. The amount outstanding at December 31, 2017 to IAC pursuant to the services agreement is $0.4 million. In addition, the Company has an outstanding payable due to IAC of $2.0 million at December 31, 2017 related primarily to transaction related costs incurred in connection with the Combination. IAC and Expedia: Each of IAC and Expedia has a 50% ownership interest in three aircrafts that may be used by both companies. The Company and Expedia purchased the third of these three aircrafts during the second quarter of 2017 to replace the older of the existing aircrafts, which was sold on February 13, 2018. The Company paid $17.4 million (50% of the total purchase price and refurbish costs) for its interest. Members of the aircrafts' flight crews are employed by an entity in which each of the Company and Expedia has a 50% ownership interest. The Company and Expedia have agreed to share costs relating to flight crew compensation and benefits pro-rata according to each company's respective usage of the aircraft, for which they are separately billed by the entity described above. The Company and Expedia are related parties since they are under common control, given that Mr. Diller serves as Chairman and Senior Executive of both IAC and Expedia. For the years ended December 31, 2017, 2016 and 2015, total payments made to this entity by the Company were not material. |
BENEFIT PLANS |
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Retirement Benefits [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS IAC has a retirement savings plan in the United States that qualifies under Section 401(k) of the Internal Revenue Code. Under the IAC/InterActiveCorp Retirement Savings Plan ("the Plan"), participating employees may contribute up to 50% of their pre-tax earnings, but not more than statutory limits. IAC contributes fifty cents for each dollar a participant contributes in this plan, with a maximum contribution of 3% of a participant's eligible earnings. Matching contributions for the Plan for the years ended December 31, 2017, 2016 and 2015 are $11.1 million, $10.0 million and $9.1 million, respectively. Matching contributions are invested in the same manner as each participant's voluntary contributions in the investment options provided under the Plan. An investment option in the Plan is IAC common stock, but neither participant nor matching contributions are required to be invested in IAC common stock. The increase in matching contributions in 2017 and 2016 are due primarily to an increase in participation in the Plan due to an increase in headcount at Match Group and ANGI Homeservices as a result of continued business growth. IAC also has or participates in various benefit plans, principally defined contribution plans, for its international employees. IAC's contributions for these plans for the years ended December 31, 2017, 2016 and 2015 are $2.5 million, $2.1 million and $2.5 million, respectively. The increase in contributions in 2017 was due, in part, to an increase in participation in the international plans due to an increase in headcount at Match Group and ANGI Homeservices as a result of business growth and acquisitions. The decrease in contributions in 2016 was due, in part, to the sale of PriceRunner. |
CONSOLIDATED FINANCIAL STATEMENT DETAILS |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED FINANCIAL STATEMENT DETAILS | CONSOLIDATED FINANCIAL STATEMENT DETAILS
Other expense, net in 2017 includes $16.8 million in net foreign currency exchange losses due primarily to the weakening of the dollar relative to the British Pound, expense of $15.4 million related to the extinguishment of the Match Group 6.75% Senior Notes and repricing of the Match Group Term Loan, expense of $13.0 million related to a mark-to-market adjustment pertaining to a subsidiary denominated equity award held by a non-employee, $12.2 million in other-than-temporary impairment charges related to certain investments and expense of $1.2 million related to the write-off of deferred financing costs associated with the repayment of the 4.875% Senior Notes, partially offset by $34.9 million in gains related to the sales of certain investments and interest income of $11.4 million. Other income, net in 2016 includes gains of $37.5 million and $12.0 million related to the sale of ShoeBuy and PriceRunner, respectively, $34.4 million in net foreign currency exchange gains due to strengthening of the dollar relative to the British Pound and Euro, interest income of $5.1 million and a $3.6 million gain related to the sale of marketable equity securities, partially offset by a non-cash charge of $12.1 million related to the write-off of a proportionate share of original issue discount and deferred financing costs associated with the repayment of $440 million of the Match Group Term Loan, $10.7 million in other-than-temporary impairment charges related to certain investments, a loss of $3.8 million related to the sale of ASKfm, a $3.6 million loss on the 4.75% and 4.875% Senior Note redemptions and repurchases and an expense of $2.5 million related to a mark-to-market adjustment pertaining to a subsidiary denominated equity award held by a non-employee. Other income, net in 2015 included a gain of $34.3 million from a real estate transaction, $5.4 million in net foreign currency exchange gains due to the strengthening of the dollar relative to the Euro and $4.3 million in interest income, partially offset by $6.7 million in other-than-temporary impairment charges related to certain investments and an expense of $2.3 million related to a mark-to-market adjustment pertaining to a subsidiary denominated equity award held by a non-employee. |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TRANSACTION AND INTEGRATION RELATED COSTS IN CONNECTION WITH THE COMBINATION | BUSINESS COMBINATION On September 29, 2017, the Company completed the combination of the businesses in the Company's HomeAdvisor segment and Angie's List under a new publicly traded company called ANGI Homeservices. Through the Combination, ANGI Homeservices acquired 100% of the common stock of Angie's List on September 29, 2017 for a total purchase price valued at $781.4 million. Angie’s List is a nationwide marketplace for local services where consumers can research, hire, rate and review the providers of these services. Ratings and reviews assist members in identifying and hiring a provider for their local service needs. Angie’s List's services are provided in markets located across the continental United States. The purchase price of $781.4 million was determined based on the sum of (i) the fair value of the 61.3 million shares of Angie's List common stock outstanding immediately prior to the Combination based on the closing stock price of Angie's List common stock on the NASDAQ on September 29, 2017 of $12.46 per share; (ii) the cash consideration of $1.9 million paid to holders of Angie's List common stock who elected to receive $8.50 in cash per share; and (iii) the fair value of vested equity awards (including the pro rata portion of unvested awards attributable to pre-combination services) outstanding under Angie's List stock plans on September 29, 2017. Each stock option to purchase shares of Angie's List common stock that was outstanding immediately prior to the effective time of the Combination was, as of the effective time of the Combination, converted into an option to purchase (i) that number of Class A shares of ANGI Homeservices equal to the total number of shares of Angie's List common stock subject to such Angie's List option immediately prior to the effective time of the Combination, (ii) at a per-share exercise price equal to the exercise price per share of Angie's List common stock at which such Angie's List option was exercisable immediately prior to the effective time of the Combination. Each award of Angie's List restricted stock units that was outstanding immediately prior to the effective time of the Combination was, as of the effective time of the Combination, converted into an ANGI Homeservices restricted stock unit award with respect to a number of Class A shares of ANGI Homeservices equal to the total number of shares of Angie's List common stock subject to such Angie's List restricted stock unit award immediately prior to the effective time of the Combination. The table below summarizes the purchase price:
The financial results of Angie's List are included in the Company's consolidated financial statements, within the ANGI Homeservices segment, beginning September 29, 2017. For the year ended December 31, 2017, the Company included $58.9 million of revenue and $21.8 million of net loss in its consolidated statement of operations related to Angie's List. The net loss of Angie's List reflects $28.7 million in stock-based compensation expense related to (i) the acceleration of previously issued Angie's List equity awards held by employees terminated in connection with the Combination and (ii) the expense related to previously issued Angie's List equity awards, severance and retention costs of $19.8 million related to the Combination and a reduction in revenue of $7.8 million due to the write-off of deferred revenue related to the Combination. The table below summarizes the fair values of the assets acquired and liabilities assumed at the date of combination:
The purchase price was based on the expected financial performance of Angie's List, not on the value of the net identifiable assets at the time of combination. This resulted in a significant portion of the purchase price being attributed to goodwill because Angie's List is complementary and synergistic to the other North America businesses of ANGI Homeservices. The fair values of the identifiable intangible assets acquired at the date of combination are as follows:
Other current assets, current liabilities and other long-term liabilities of Angie's List were reviewed and adjusted to their fair values at the date of combination, as necessary. The fair value of deferred revenue was determined using an income approach that utilized a cost to fulfill analysis. The fair value of the trade name and trademarks was determined using an income approach that utilized the relief from royalty methodology. The fair values of developed technology and user base were determined using a cost approach that utilized the cost to replace methodology. The fair values of the service professionals and memberships were determined using an income approach that utilized the excess earnings methodology. The valuations of deferred revenue and intangible assets incorporate significant unobservable inputs and require significant judgment and estimates, including the amount and timing of future cash flows, cost and profit margins related to deferred revenue and the determination of royalty and discount rates. The amount attributed to goodwill is not tax deductible. Pro forma financial information The unaudited pro forma financial information in the table below presents the combined results of the Company and Angie's List as if the Combination had occurred on January 1, 2016. The unaudited pro forma financial information includes adjustments required under the acquisition method of accounting and is presented for informational purposes only and is not necessarily indicative of the results that would have been achieved had the Combination actually occurred on January 1, 2016. For the year ended December 31, 2017, pro forma adjustments include (i) reductions in stock-based compensation expense of $78.0 million and transaction related costs of $34.1 million because they are one-time in nature and will not have a continuing impact on operations; and (ii) an increase in amortization of intangibles of $31.9 million. The stock-based compensation expense is related to the modification of previously issued HomeAdvisor vested equity awards, which were converted into ANGI Homeservices' equity awards, and the acceleration of previously issued Angie's List equity awards held by employees terminated in connection with the Combination. The transaction related costs include severance and retention costs of $19.8 million related to the Combination. For the year ended December 31, 2016, pro forma adjustments include a reduction in revenue of $34.1 million due to the write-off of deferred revenue at the assumed date of acquisition as well as increases in stock-based compensation expense of $81.4 million and amortization of intangibles of $56.1 million.
TRANSACTION AND INTEGRATION RELATED COSTS IN CONNECTION WITH THE COMBINATION ANGI Homeservices segment During the year ended December 31, 2017, the Company incurred $44.1 million in costs related to the Combination (including severance, retention, transaction and integration related costs) as well as deferred revenue write-offs of $7.8 million. The Company also incurred $122.1 million in stock-based compensation expense during 2017 related to the modification of previously issued HomeAdvisor vested and unvested equity awards, which were converted into ANGI Homeservices' equity awards, the expense related to previously issued Angie's List equity awards and the acceleration of certain Angie's List equity awards resulting from the termination of employees in connection with the Combination. See "Note 4—Business Combination" for additional information on the Combination. A summary of the costs incurred, payments made and the related accrual for ANGI Homeservices at December 31, 2017 is presented below.
The costs are allocated as follows in the accompanying consolidated statement of operations:
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GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION |
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Guarantor and Nonguarantor Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION The 4.75% 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, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 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, 2017:
Balance sheet at December 31, 2016:
Statement of operations for the year ended December 31, 2017:
Statement of operations for the year ended December 31, 2016:
Statement of operations for the year ended December 31, 2015:
Statement of cash flows for the year ended December 31, 2017:
Statement of cash flows for the year ended December 31, 2016:
Statement of cash flows for the year ended December 31, 2015:
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QUARTERLY RESULTS (UNAUDITED) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
QUARTERLY RESULTS (UNAUDITED) | QUARTERLY RESULTS (UNAUDITED)
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"). |
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Basis of Consolidation and Accounting for Investments | Basis of Consolidation and Accounting for Investments The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. Intercompany transactions and accounts have been eliminated. Investments in the common stock or in-substance common stock of entities in which the Company has the ability to exercise significant influence over the operating and financial matters of the investee, but does not have a controlling financial interest, are accounted for using the equity method. Investments in the common stock or in-substance common stock of entities in which the Company does not have the ability to exercise significant influence over the operating and financial matters of the investee are accounted for using the cost method. Investments in companies that IAC does not control, which are not in the form of common stock or in-substance common stock, are also accounted for using the cost method. The Company evaluates each cost and equity method investment for impairment on a quarterly basis and recognizes an impairment loss if a decline in value is determined to be other-than-temporary. Such impairment evaluations include, but are not limited to: the current business environment, including competition; going concern considerations such as financial condition, the rate at which the investee utilizes cash and the investee's ability to obtain additional financing to achieve its business plan; the need for changes to the investee's existing business model due to changing business and regulatory environments and its ability to successfully implement necessary changes; and comparable valuations. If the Company has not identified events or changes in circumstances that may have a significant adverse effect on the fair value of a cost method investment, then the fair value of such cost method investment is not estimated, as it is impracticable to do so. |
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Accounting Estimates | Accounting Estimates Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments and assumptions impact the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. On an ongoing basis, the Company evaluates its estimates and judgments including those related to: the recoverability of goodwill and indefinite-lived intangible assets; the useful lives and recoverability of definite-lived intangible assets and property and equipment; the fair values of marketable securities and long-term investments; the carrying value of accounts receivable, including the determination of the allowance for doubtful accounts; the determination of revenue reserves; the fair value of acquisition-related contingent consideration arrangements; the liabilities for uncertain tax positions; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets and other factors that the Company considers relevant. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, services are rendered or merchandise is delivered to customers, the fee or price charged is fixed or determinable and collectability is reasonably assured. Deferred revenue is recorded when payments are received, or contractually due, in advance of the Company's rendering of services, availability of media content (films, television, or digital content) for broadcast or exhibition or delivery of merchandise. Match Group Match Group's revenue is primarily derived directly from users in the form of recurring subscriptions. Subscription revenue is presented net of credits and credit card chargebacks. Subscribers pay in advance, primarily by using a credit card or through mobile app stores, and, subject to certain conditions identified in our terms and conditions, all purchases are final and nonrefundable. Fees collected, or contractually due, in advance for subscriptions are deferred and recognized using the straight-line method over the terms of the applicable subscription period, which primarily range from one to six months, and corresponding mobile app store fees incurred on such transactions, if any, are deferred and expensed over the same period. Deferred revenue at Match Group is $198.3 million and $161.1 million at December 31, 2017 and 2016, respectively. Revenue is also earned from online advertising, the purchase of à la carte features and offline events. Online advertising revenue is recognized every time an advertisement is displayed. Revenue from the purchase of à la carte features is recognized based on usage. Revenue and the related expenses associated with offline events are recognized when each event occurs. ANGI Homeservices ANGI Homeservices revenue is primarily derived from (i) consumer connection revenue, which comprises fees paid by service professionals for consumer matches (regardless of whether the professional ultimately provides the requested service), and (ii) membership subscriptions fees paid by service professionals. Consumer connection revenue varies based upon certain factors including the service requested, type of match (such as Instant Booking, Instant Connect, same day service or next day service) and geographic location of service. Effective with the Combination, revenue is also derived from Angie's List (i) sales of time-based advertising to service professionals and (ii) membership subscription fees from consumers. ANGI Homeservices consumer connection revenue is generated and recognized when an in‑network service professional is delivered a consumer match. Membership subscription revenue is generated through subscription sales to service professionals and is deferred and recognized over the term of the applicable membership. Membership agreements can be one month, three months, or one year. Angie's List service professionals generally pay for advertisements in advance on a monthly or annual basis at the option of the service professional, with the average advertising contract term being approximately one year. These contracts include an early termination penalty. Angie's List revenue from the sale of website, mobile and call center advertising is recognized ratably over the period during which the advertisements run. Revenue from the sale of advertising in the Angie’s List Magazine is recognized in the period in which the publication is published and distributed. Angie's List prepaid consumer membership subscription fees are recognized as revenue ratably over the term of the associated subscription, which is typically one year. Deferred revenue at ANGI Homeservices is $64.1 million and $18.8 million at December 31, 2017 and 2016, respectively. The balance at December 31, 2017 includes Angie's List deferred revenue of $37.7 million. Video Revenue of businesses included in this segment is generated primarily through subscriptions, media production and distribution, and advertising. Production revenue is recognized when the production is available for the customer to broadcast or exhibit, subscription fee revenue is recognized over the terms of the applicable subscriptions, which are one month or one year, and advertising revenue is recognized when an ad is displayed or over the period earned. Deferred revenue at Vimeo is $49.4 million and $36.7 million at December 31, 2017 and 2016, respectively. Deferred revenue at Electus totals $12.8 million and $23.1 million at December 31, 2017 and 2016, respectively. Applications Substantially all of Applications' revenue consists of advertising revenue generated principally through the display of paid listings in response to search queries. The substantial majority of the paid listings displayed by our Applications businesses are supplied to us by Google Inc. ("Google") pursuant to our services agreement with Google. Pursuant to this agreement, those of our Applications businesses that provide search services transmit search queries to Google, which in turn transmits a set of relevant and responsive paid listings back to these businesses for display in search results. This ad-serving process occurs independently of, but concurrently with, the generation of algorithmic search results for the same search queries. Google paid listings are displayed separately from algorithmic search results and are identified as sponsored listings on search results pages. Paid listings are priced on a price per click basis and when a user submits a search query through one of our Applications businesses and then clicks on a Google paid listing displayed in response to the query, Google bills the advertiser that purchased the paid listing directly and shares a portion of the fee charged to the advertiser with us. We recognize paid listing revenue from Google when it delivers the user's click. In cases where the user’s click is generated due to the efforts of a third party distributor, we recognize the amount due from Google as revenue and record a revenue share or other payment obligation to the third party distributor as traffic acquisition costs. To a significantly lesser extent, Applications' revenue also consists of fees related to subscription downloadable applications, which are recognized over the terms of the applicable subscriptions, primarily one to two years, and fees related to paid mobile downloadable applications and display advertisements, which are recognized at the time of the sale and when the ad is displayed, respectively. Deferred revenue at Applications is $23.6 million and $26.1 million at December 31, 2017 and 2016, respectively. Publishing Publishing's revenue consists principally of advertising revenue, which is generated primarily through the display of paid listings in response to search queries, display advertisements (sold directly and through programmatic ad sales) and fees related to paid mobile downloadable applications. The substantial majority of the paid listings that our Publishing businesses display are supplied to us by Google in the manner and pursuant to the services agreement with Google, which is described above under "Applications." Other The Princeton Review's revenue consisted primarily of fees received directly from students for in-person and online test preparation classes, access to online test preparation materials and individual tutoring services. Fees from classes and access to online materials were recognized over the period of the course and the period of the online access, respectively. Tutoring fees were recognized based on usage. ShoeBuy's revenue consisted of merchandise sales, reduced by incentive discounts and sales returns, and was recognized when delivery to the customer had occurred. Delivery was considered to have occurred when the customer took title and assumed the risks and rewards of ownership, which was on the date of shipment. Accruals for returned merchandise were based on historical experience. Shipping and handling fees billed to customers was recorded as revenue. The costs associated with shipping goods to customers were recorded as cost of revenue. PriceRunner's revenue consisted principally of advertising revenue that, depending on the terms of the arrangement, was recognized when a user clicked on an ad, or when a user clicked-through on the ad and took a specified action on the destination site. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and short-term investments, with maturities of less than 91 days from the date of purchase. Domestically, cash equivalents primarily consist of AAA rated government money market funds, commercial paper rated A1/P1 or better and treasury discount notes. Internationally, cash equivalents primarily consist of AAA rated government money market funds and time deposits. |
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Marketable Securities | Marketable Securities At December 31, 2017, marketable securities consist of commercial paper rated A1+/P1. The Company invests in marketable debt securities with active secondary or resale markets to ensure portfolio liquidity to fund current operations or satisfy other cash requirements as needed. The Company also invests in marketable equity securities as part of its investment strategy. All marketable securities are classified as available-for-sale and are reported at fair value. The unrealized gains and losses on marketable securities, net of tax, are included in accumulated other comprehensive income as a separate component of shareholders' equity. The specific-identification method is used to determine the cost of securities sold and the amount of unrealized gains and losses reclassified out of accumulated other comprehensive income into earnings. The Company employs a methodology that considers available evidence in evaluating potential other-than-temporary impairments of its investments. Investments are considered to be impaired when a decline in fair value below the amortized cost basis is determined to be other-than-temporary. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the amortized cost basis, the financial condition and near-term prospects of the issuer, and whether it is not more likely than not that the Company will be required to sell the security before the recovery of the amortized cost basis, which may be maturity. If a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded in current earnings and a new cost basis in the investment is established. |
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Certain Risks and Concentrations | Certain Risks and Concentrations A meaningful portion of the Company's revenue is derived from online advertising, the market for which is highly competitive and rapidly changing. Significant changes in this industry or changes in advertising spending behavior or in customer buying behavior could adversely affect our operating results. Most of the Company's online advertising revenue is attributable to a services agreement with Google. For the years ended December 31, 2017, 2016 and 2015, revenue from Google represents 22%, 26% and 40% respectively, of the Company's consolidated revenue. The services agreement became effective on April 1, 2016, following the expiration of the previous services agreement, and expires on March 31, 2020; however, the Company may choose to terminate the agreement effective March 31, 2019. The services agreement requires that the Company comply with certain guidelines promulgated by Google. Google may generally unilaterally update its policies and guidelines without advance notice, which could in turn require modifications to, or prohibit and/or render obsolete certain of our products, services and/or business practices, which could be costly to address or otherwise have an adverse effect on our business, financial condition and results of operations. For the years ended December 31, 2017, 2016 and 2015, revenue earned from Google was $740.7 million, $824.4 million and $1.3 billion, respectively. This revenue is earned by the businesses comprising the Applications and Publishing segments. For the years ended December 31, 2017, 2016 and 2015, revenue earned from Google represents 83%, 87% and 94% of Applications revenue and 71%, 73% and 83% of Publishing revenue, respectively. Accounts receivable related to revenue earned from Google totaled $72.4 million and $65.8 million at December 31, 2017 and 2016, respectively. The Company's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud. Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents and marketable securities. Cash and cash equivalents are maintained with financial institutions and are in excess of Federal Deposit Insurance Corporation insurance limits. |
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Accounts Receivable, net of allowance for doubtful accounts and revenue reserves | Accounts Receivable, net of allowance for doubtful accounts and revenue reserves Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts and revenue reserves. Accounts receivable outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, the Company's previous loss history, the specific customer's ability to pay its obligation to the Company and the condition of the general economy and the customer's industry. The Company writes off accounts receivable when they become uncollectible. The Company also maintains allowances to reserve for potential credits issued to customers or other revenue adjustments. The amounts of these reserves are based, in part, on historical experience. |
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Property and Equipment | The Company capitalizes certain internal use software costs including external direct costs utilized in developing or obtaining the software and compensation for personnel directly associated with the development of the software. Capitalization of such costs begins when the preliminary project stage is complete and ceases when the project is substantially complete and ready for its intended purpose. Property and Equipment Property and equipment, including significant improvements, are recorded at cost. Repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, or, in the case of leasehold improvements, the lease term, if shorter. |
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Business Combinations | Business Combinations The purchase price of each acquisition is attributed to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets that either arise from a contractual or legal right or are separable from goodwill. The fair value of these intangible assets is based on detailed valuations that use information and assumptions provided by management. The excess purchase price over the net tangible and identifiable intangible assets is recorded as goodwill and is assigned to the reporting unit(s) that is expected to benefit from the combination as of the acquisition date. In connection with certain business combinations, the Company has entered into contingent consideration arrangements that are determined to be part of the purchase price. Each of these arrangements are initially recorded at its fair value at the time of the acquisition and reflected at current fair value for each subsequent reporting period thereafter until settled. The contingent consideration arrangements are generally based upon earnings performance and/or operating metrics. The Company determines the fair value of the contingent consideration arrangements using probability-weighted analyses to determine the amounts of the gross liability, and, if the arrangement is long-term in nature, applying a discount rate that appropriately captures the risk associated with the obligation to determine the net amount reflected in the consolidated financial statements. Significant changes in forecasted earnings or operating metrics would result in a significantly higher or lower fair value measurement. The changes in the remeasured fair value of the contingent consideration arrangements during each reporting period, including the accretion of the discount, if applicable, are recognized in “General and administrative expense” in the accompanying consolidated statement of operations. |
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Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets The Company assesses goodwill and indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or the fair value of an indefinite-lived intangible asset below its carrying value. When the Company elects to perform a qualitative assessment and concludes it is not more likely than not that the fair value of the reporting unit is less than its carrying value, no further assessment of that reporting unit's goodwill is necessary; otherwise, a quantitative assessment is performed and the fair value of the reporting unit is determined. If the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the excess is recorded. For the Company's annual goodwill test at October 1, 2017, a qualitative assessment of the Match Group, ANGI Homeservices, Vimeo and Applications reporting units' goodwill was performed because the Company concluded it was more likely than not that the fair value of these reporting units was in excess of their respective carrying values. The primary factors that the Company considered in its qualitative assessment for each of these reporting units is described below:
For the Company's annual goodwill test at October 1, 2017, the Company quantitatively tested the Daily Burn and Electus reporting units. The Company's quantitative test indicated that the fair value of each of these reporting units is in excess of its respective carrying value; therefore, the goodwill of these reporting units is not impaired. The Company's Publishing reporting unit has no goodwill. The aggregate goodwill balance for the reporting units for which the most recent estimate of fair value is less than 120% of their carrying values is approximately $450 million. The fair value of the Company's reporting units is determined using both an income approach based on discounted cash flows ("DCF") and a market approach when it tests goodwill for impairment, either on an interim basis or annual basis as of October 1 each year. The Company uses the same approach in determining the fair value of its businesses in connection with its subsidiary denominated stock based compensation plans, which can be a significant factor in the decision to apply the qualitative screen. Determining fair value using a DCF analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates. The expected cash flows used in the DCF analyses are based on the Company's most recent forecast and budget and, for years beyond the budget, the Company's estimates, which are based, in part, on forecasted growth rates. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the expected future cash flows of the respective reporting units. Assumptions used in the DCF analyses, including the discount rate, are assessed based on each reporting unit's current results and forecasted future performance, as well as macroeconomic and industry specific factors. The discount rates used in determining the fair value of the Company's reporting units ranged from 12.5% to 17.5% in 2017 and 10% to 17.5% in 2016. Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple is determined which is applied to financial metrics to estimate the fair value of a reporting unit. To determine a peer group of companies for our respective reporting units, we considered companies relevant in terms of consumer use, monetization model, margin and growth characteristics, and brand strength operating in their respective sectors. While a primary driver in the determination of the fair values of the Company's reporting units is the estimate of future revenue and profitability, the determination of fair value is based, in part, upon the Company's assessment of macroeconomic factors, industry and competitive dynamics and the strategies of its businesses in response to these factors. While the Company has the option to qualitatively assess whether it is more likely than not that the fair values of its indefinite-lived intangible assets are less than their carrying values, the Company's policy is to determine the fair value of each of its indefinite-lived intangible assets annually as of October 1. In 2017, the Company did not quantitatively assess the Angie's List indefinite-lived intangible assets acquired through the Combination given the proximity of the September 29, 2017 transaction date to the October 1, 2017 annual test date. The Company determines the fair values of its indefinite-lived intangible assets using avoided royalty DCF analyses. Significant judgments inherent in these analyses include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows. The discount rates used in the DCF analyses reflect the risks inherent in the expected future cash flows generated by the respective intangible assets. The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the Company's trade names and trademarks. Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors. The discount rates used in the Company's annual indefinite-lived impairment assessment ranged from 11% to 16% in both 2017 and 2016, and the royalty rates used ranged from 2% and 7% in both 2017 and 2016. The 2017 annual assessment of goodwill and indefinite-lived intangible assets did not identify any impairments. While the 2016 annual assessment did not identify any material impairments, during the second quarter of 2016 the Company recorded impairment charges related to the entire $275.4 million balance of the Publishing reporting unit goodwill and $11.6 million related to certain Publishing indefinite-lived intangible assets. The goodwill impairment charge at Publishing was driven by the impact from the new Google contract, traffic trends and monetization challenges and the corresponding impact on the then estimate of fair value. The expected cash flows used in the Publishing DCF analysis were based on the Company's most recent forecast for the second half of 2016 and each of the years in the forecast period, which were updated to include the effects of the Google contract, traffic trends and monetization challenges and the cost savings from our restructuring efforts. For years beyond the forecast period, the Company's estimated cash flows were based on forecasted growth rates. The discount rate used in the DCF analysis reflected the risks inherent in the expected future cash flows of the Publishing reporting unit. Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple was determined which was applied to financial metrics to estimate the fair value of the Publishing reporting unit. To determine a peer group of companies for Publishing, we considered companies relevant in terms of business model, revenue profile, margin and growth characteristics and brand strength. The indefinite-lived intangible asset impairment charge related to certain trade names and trademarks and were due to reduced level of revenue and profits, which, in turn, also led to a reduction in the assumed royalty rates for these assets. The royalty rates used to value the trade names that were impaired ranged from 2% to 6% and the discount rate that was used reflected the risks inherent in the expected future cash flows of the trade names and trademarks. The impairment charge is included in "Amortization of intangibles" in the accompanying consolidated statement of operations. In 2015, the Company identified and recorded impairment charges of $88.0 million related to certain indefinite-lived intangible assets at the Publishing segment and $14.1 million at the Other segment related to goodwill at ShoeBuy. The indefinite-lived intangible asset impairment charge at Publishing related to certain trade names of certain Ask & Other direct marketing brands, including Ask Media Group. The impairment charge reflected the impact of Google ecosystem changes that impacted our ability to market, the effect of the reduced revenue share on mobile under the terms of the services agreement with Google, and the shift in focus to higher margin businesses in Publishing's Premium Brands. The combined impact of these factors reduced the forecasted revenue and profits for these brands and the impairment charge reflected the resultant reduction in fair value. The goodwill impairment charge at ShoeBuy was due to increased investment and the seasonal effect of high inventory levels as of October 1, 2015. The Company's reporting units are consistent with its determination of its operating segments. Goodwill is tested for impairment at the reporting unit level. |
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Long-Lived Assets and Intangible Assets with Definite Lives | Long-Lived Assets and Intangible Assets with Definite Lives Long-lived assets, which consist of property and equipment and intangible assets with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value. Amortization of definite-lived intangible assets is computed either on a straight-line basis or based on the pattern in which the economic benefits of the asset will be realized. |
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Fair Value Measurements | Fair Value Measurements The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:
The Company's non-financial assets, such as goodwill, intangible assets and property and equipment, as well as cost and equity method investments, are adjusted to fair value only when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs. |
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Traffic Acquisition Costs | Traffic Acquisition Costs Traffic acquisition costs consist of (i) payments made to partners who distribute our Partnerships customized browser-based applications and who integrate our paid listings into their websites and (ii) fees related to the distribution and facilitation of in-app purchase of product features. These payments include amounts based on revenue share and other arrangements. The Company expenses these payments in the period incurred as a component of cost of revenue. |
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Advertising Costs | Advertising Costs Advertising costs are expensed in the period incurred (when the advertisement first runs for production costs that are initially capitalized) and represent online marketing, including fees paid to search engines, social media sites and third parties that distribute our Consumer downloadable applications, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to the Match Group brands. Advertising expense is $1.1 billion, $1.0 billion and $1.2 billion for the years ended December 31, 2017, 2016 and 2015, respectively. The Company capitalizes and amortizes the costs associated with certain distribution arrangements that require it to pay a fee per access point delivered. These access points are generally in the form of downloadable applications associated with our Consumer operations. These fees are amortized over the estimated useful lives of the access points to the extent the Company can reasonably estimate a probable future economic benefit and the period over which such benefit will be realized (generally 18 months). Otherwise, the fees are charged to expense as incurred. |
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Legal Costs | Legal Costs Legal costs are expensed as incurred. |
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Income Taxes | Income Taxes The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. The Company records interest, net of any applicable related income tax benefit, on potential income tax contingencies as a component of income tax expense. The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement |
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Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net earnings attributable to IAC shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vested resulting in the issuance of common stock that could share in the earnings of the Company. |
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Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses The financial position and operating results of foreign entities whose primary economic environment is based on their local currency are consolidated using the local currency as the functional currency. These local currency assets and liabilities are translated at the rates of exchange as of the balance sheet date, and local currency revenue and expenses of these operations are translated at average rates of exchange during the period. Translation gains and losses are included in accumulated other comprehensive income as a component of shareholders' equity. Transaction gains and losses resulting from assets and liabilities denominated in a currency other than the functional currency are included in the consolidated statement of operations as a component of other (expense) income, net. See "Note 19—Consolidated Financial Statement Details" for additional information regarding foreign currency exchange gains and losses. Translation gains and losses relating to foreign entities that are liquidated or substantially liquidated are reclassified out of accumulated other comprehensive income (loss) into earnings. |
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Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is generally expensed over the requisite service period. |
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Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests Noncontrolling interests in the consolidated subsidiaries of the Company are ordinarily reported on the consolidated balance sheet within shareholders' equity, separately from the Company's equity. However, securities that are redeemable at the option of the holder and not solely within the control of the issuer must be classified outside of shareholders' equity. Accordingly, all noncontrolling interests that are redeemable at the option of the holder are presented outside of shareholders' equity in the accompanying consolidated balance sheet. In connection with the acquisition of certain subsidiaries, management of these businesses has retained an ownership interest. The Company is party to fair value put and call arrangements with respect to these interests. These put and call arrangements allow management of these businesses to require the Company to purchase their interests or allow the Company to acquire such interests at fair value, respectively. The put arrangements do not meet the definition of a derivative instrument as the put agreements do not provide for net settlement. These put and call arrangements become exercisable by the Company and the counter-party at various dates in the future. During the years ended December 31, 2017, 2016 and 2015, two, one and two of these arrangements, respectively, were exercised. These put arrangements are exercisable by the counter-party outside the control of the Company. Accordingly, to the extent that the fair value of these interests exceeds the value determined by normal noncontrolling interest accounting, the value of such interests is adjusted to fair value with a corresponding adjustment to additional paid-in capital. During the years ended December 31, 2017, 2016 and 2015, the Company recorded adjustments of $6.3 million, $7.9 million and $23.2 million, respectively, to increase these interests to fair value. Fair value determinations require high levels of judgment and are based on various valuation techniques, including market comparables and discounted cash flow projections. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements not yet adopted by the Company In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which clarifies the principles for recognizing revenue and develops a common standard for all industries. ASU No. 2014-09 was subsequently amended during 2015, 2016 and 2017; these amendments provide further revenue recognition guidance related to principal versus agent considerations, performance obligations and licensing, narrow-scope improvements and practical expedients. ASU No. 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP. The new standard provides a single principles-based, five-step model to be applied to all contracts with customers. This five-step model includes (1) identifying the contract(s) with the customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when each performance obligation is satisfied. More specifically, revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. ASU No. 2014-09 is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016. Upon adoption, ASU No. 2014-09 may either be applied retrospectively to each prior period presented or using the modified retrospective approach with the cumulative effect recognized as of the date of initial application. The Company’s evaluation of the impact of the adoption of ASU No. 2014-09 on its consolidated financial statements is substantially complete. The principal remaining work is a confirmation of the calculation of the cumulative effect of ASU No. 2014-09 as of January 1, 2018, which will be completed during the financial close process for the first quarter of 2018. The adoption of ASU No. 2014-09 is not expected to have a material effect on the Company's consolidated financial statements. The Company has reached the following determinations.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments, which updates certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Under ASU No. 2016-01, certain equity investments will be measured at fair value with changes recognized in net income. ASU No. 2016-01 is effective for reporting periods beginning after December 15, 2017. The Company will adopt ASU No. 2016-01 effective January 1, 2018 and its adoption will not have a material effect on the consolidated financial statements upon adoption. The adoption of ASU No. 2016-01 may increase the volatility of our results of operations as a result of the remeasurement of our cost method investments. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in "Leases (Topic 840)" and generally requires all leases to be recognized in the statement of financial position. The provisions of ASU No. 2016-02 are effective for reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU No. 2016-02 are to be applied using a modified retrospective approach. The Company will adopt ASU No. 2016-02 effective January 1, 2019. The Company is not a lessor and has no capitalized leases and does not expect to enter into any capitalized leases prior to the adoption of ASU No. 2016-02. Accordingly, the Company does not expect the amount or classification of rent expense in its statement of operations to be affected by ASU No. 2016-02. The primary effect of the adoption of ASU No. 2016-02 will be the recognition of a right of use asset and related liability to reflect the Company's rights and obligations under its operating leases. The Company will also be required to provide the additional disclosures stipulated in ASU No. 2016-02. The adoption of ASU No. 2016-02 will not have an impact on the leverage calculation set forth in any of the Company's outstanding debt, or the debt of our Match Group and ANGI Homeservices subsidiaries, or our credit agreement or the credit agreement of Match Group because, in each circumstance, the leverage calculations are not affected by the liability that will be recorded upon adoption of the new standard. While the Company's evaluation of the impact of the adoption of ASU No. 2016-02 on its consolidated financial statements continues, outlined below is a summary of the status of the Company's progress:
The Company does not expect to have a preliminary estimate of the right of use asset and related liability as of the adoption date until the third quarter of 2018. Accounting Pronouncements adopted by the Company In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about the changes to the terms and conditions of a share-based payment award that require an entity to apply modification accounting in "Stock Compensation (Topic 718)." The provisions of ASU No. 2017-09 are effective for reporting periods beginning after December 15, 2017; early adoption is permitted. The provisions of ASU No. 2017-09 are to be applied prospectively to an award modified on or after the adoption date. The Company early adopted the provisions of ASU No. 2017-09 during the third quarter of 2017 and the adoption of this standard update did not have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies how cash receipts and cash payments in certain transactions are presented and classified on the statement of cash flows. The provisions of ASU No. 2016-15 are effective for reporting periods beginning after December 15, 2017, including interim periods, and will require adoption on a retrospective basis unless it is impracticable to apply, in which case we would be required to apply the amendments prospectively as of the earliest date practicable; early adoption is permitted. Upon adoption, cash payments made soon after the acquisition date of a business to settle a contingent consideration liability are classified as cash outflows for investing activities. Cash payments which are not made soon after the acquisition date of a business to settle a contingent consideration liability are separated and classified as cash outflows for financing activities up to the amount of the contingent consideration liability recognized at the acquisition date and as cash outflows from operating activities for any excess. The Company early adopted the provisions of ASU No. 2016-15 on January 1, 2017. As a result, $11.1 million of an acquisition-related contingent consideration payment of $15.0 million, which was in excess of the liability initially recognized at the acquisition date, has been classified as a cash outflow within net cash provided by operating activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2017. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The Company adopted the provisions of ASU No. 2016-09 on January 1, 2017. Excess tax benefits or deficiencies related to equity awards to employees upon the exercise of stock options and the vesting of restricted stock units after January 1, 2017 are (i) reflected in the consolidated statement of operations as a component of the provision for income taxes, rather than recognized in equity (adopted on a prospective basis), and (ii) reflected as operating, rather than financing, cash flows in our consolidated statement of cash flows (adopted on a retrospective basis). Upon adoption, the calculation of fully diluted shares excludes excess tax benefits from the assumed proceeds in applying the treasury stock method; previously such benefits were included in the calculation. This change increased fully diluted shares by approximately 2.4 million shares for the year ended December 31, 2017. The Company continues to account for forfeitures using an estimated forfeiture rate. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which is intended to simplify the accounting for goodwill impairment. The guidance eliminates the requirement to calculate the implied fair value of goodwill under the two-step impairment test to measure a goodwill impairment charge. The Company early adopted the provisions of ASU No. 2017-04 on January 1, 2017 and the adoption of this standard update did not have a material impact on its consolidated financial statements. |
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Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Schedule of Estimated Useful Lives of Property and Equipment |
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INCOME TAXES (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Before Income Taxes | U.S. and foreign earnings (loss) before income taxes and noncontrolling interests are as follows:
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Schedule of Components of Income Tax Expense (Benefit) | The components of the (benefit) provision for income taxes are as follows:
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Schedule of Income Taxes (Payable) Receivable and Deferred Tax (Liabilities) Assets | Income taxes receivable (payable) and deferred tax assets (liabilities) are included in the following captions in the accompanying consolidated balance sheet at December 31, 2017 and 2016:
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of cumulative temporary differences that give rise to significant deferred tax assets and deferred tax liabilities are presented below. The valuation allowance relates to deferred tax assets for which it is more likely than not that the tax benefit will not be realized.
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Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the income tax (benefit) provision to the amounts computed by applying the statutory federal income tax rate to earnings before income taxes is shown as follows:
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Schedule of Income Tax Contingencies | A reconciliation of the beginning and ending amount of unrecognized tax benefits, including penalties but excluding interest, is as follows:
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BUSINESS COMBINATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price | The table below summarizes the purchase price:
A summary of the costs incurred, payments made and the related accrual for ANGI Homeservices at December 31, 2017 is presented below.
The costs are allocated as follows in the accompanying consolidated statement of operations:
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Schedule of Preliminary Estimated Fair Value of Assets Acquired and Liabilities Assumed | The table below summarizes the fair values of the assets acquired and liabilities assumed at the date of combination:
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Schedule of Preliminary Estimated Fair Value of Intangible Assets Acquired | The fair values of the identifiable intangible assets acquired at the date of combination are as follows:
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Schedule of Pro Forma Financial Information |
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill and Intangible Assets, Net | Goodwill and intangible assets, net are as follows:
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Schedule of Goodwill by Reporting Unit | The following table presents the balance of goodwill by reportable segment, including the changes in the carrying value of goodwill, for the year ended December 31, 2017:
The following table presents the balance of goodwill by reportable segment, including the changes in the carrying value of goodwill, for the year ended December 31, 2016:
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Schedule of Intangible Assets with Definite Lives | Intangible assets with indefinite lives are trade names and trademarks acquired in various acquisitions. During the second quarter of 2016, the Company changed the classification of certain intangibles from indefinite-lived to definite-lived at Publishing. At December 31, 2017 and 2016, intangible assets with definite lives are as follows:
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Schedule of Expected Amortization of Intangible Assets | At December 31, 2017, amortization of intangible assets with definite lives for each of the next five years and thereafter is estimated to be as follows:
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MARKETABLE SECURITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Current Available-for-sale Marketable Securities | At December 31, 2017, current available-for-sale marketable securities are as follows:
At December 31, 2016, current available-for-sale marketable securities are as follows:
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Schedule of Proceeds from Maturities and Sales of Current Available-for-sale Marketable Securities | The following table presents the proceeds from maturities and sales of available-for-sale marketable securities and the related gross realized gains:
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LONG-TERM INVESTMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Investments | Long-term investments consist of:
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FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present the Company's financial instruments that are measured at fair value on a recurring basis:
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Schedule of Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the changes in the Company's financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
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Schedule of Carrying Value and Fair Value of Financial Instruments | The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes:
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LONG-TERM DEBT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt consists of:
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Schedule of Debt Instrument Redemption | Thereafter, these notes may be redeemed at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on December 15 of the years indicated below:
Thereafter, these notes may be redeemed at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on June 1 of the years indicated below:
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Schedule of Aggregate Contractual Maturities of Long-term Debt | We may redeem the 4.75% Senior Notes at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date, if redeemed twelve-month period beginning on December 15 of the years indicated below:
Long-term debt maturities:
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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | The following tables present the components of accumulated other comprehensive (loss) income and items reclassified out of accumulated other comprehensive loss into earnings:
At December 31, 2017, there was no tax benefit or provision on the accumulated other comprehensive loss.
(b) Amount is net of a tax provision of $0.2 million.
(c) Amount is net of a tax provision of $0.1 million. |
EARNINGS (LOSS) PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings (loss) per share attributable to IAC shareholders:
__________________________________________________________________
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STOCK-BASED COMPENSATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Outstanding Stock Options | Stock options outstanding at December 31, 2017 and changes during the year ended December 31, 2017 are as follows:
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Schedule of Information for Stock Options Outstanding and Exercisable | The following table summarizes the information about stock options outstanding and exercisable at December 31, 2017:
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Schedule of Weighted Average Assumptions | The following are the weighted average assumptions used in the Black-Scholes option pricing model:
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Schedule of Outstanding Unvested RSUs and PSUs | Unvested RSUs and PSUs outstanding at December 31, 2017 and changes during the year ended December 31, 2017 are as follows:
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SEGMENT INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information |
_______________________________________________________________________________
The following table presents the revenue of the Company's principal segments disaggregated by type of service:
_______________________________________________________________________________
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Schedule of Revenue by Geographic Areas | Revenue by geography is based on where the customer is located. Geographic information about revenue and long-lived assets is presented below:
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Schedule of Long-lived Assets by Geographic Areas |
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Schedule of Reconciliation of Adjusted EBITDA to Operating Income (Loss) | The following tables reconcile operating income (loss) for the Company's reportable segments and net earnings (loss) attributable to IAC shareholders to Adjusted EBITDA:
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Schedule of Reconciliation of Segment Assets to Total Assets | The following tables reconcile segment assets to total assets:
_____________________________________
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Payments under Operating Lease Agreements | Future minimum payments under operating lease agreements are as follows:
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Schedule of Commercial Commitments Outstanding | The Company also has funding commitments that could potentially require its performance in the event of demands by third parties or contingent events as follows:
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SUPPLEMENTAL CASH FLOW INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Disclosure of Cash Flow Information | Supplemental Disclosure of Cash Flow Information:
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CONSOLIDATED FINANCIAL STATEMENT DETAILS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Assets |
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Schedule of Property and Equipment, Net |
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Schedule of Accrued Expenses and Other Current Liabilities |
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Schedule of Revenue |
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Schedule of Cost of Revenue |
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Schedule of Other (Expense) Income, Net |
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TRANSACTION AND INTEGRATION RELATED COSTS IN CONNECTION WITH THE COMBINATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price | The table below summarizes the purchase price:
A summary of the costs incurred, payments made and the related accrual for ANGI Homeservices at December 31, 2017 is presented below.
The costs are allocated as follows in the accompanying consolidated statement of operations:
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GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantor and Nonguarantor Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Balance Sheet | Balance sheet at December 31, 2017:
Balance sheet at December 31, 2016:
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Schedule of Condensed Statement of Operations | Statement of operations for the year ended December 31, 2017:
Statement of operations for the year ended December 31, 2016:
Statement of operations for the year ended December 31, 2015:
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Schedule of Condensed Statement of Cash Flows | Statement of cash flows for the year ended December 31, 2017:
Statement of cash flows for the year ended December 31, 2016:
Statement of cash flows for the year ended December 31, 2015:
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QUARTERLY RESULTS (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Results |
_______________________________________________________________________________
|
ORGANIZATION - NARRATIVE (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 6 |
Match Group, Inc. | |
Noncontrolling Interest [Line Items] | |
Ownership interest (as a percent) | 81.20% |
Voting interest (as a percent) | 97.60% |
ANGI Homeservices | |
Noncontrolling Interest [Line Items] | |
Ownership interest (as a percent) | 86.90% |
Voting interest (as a percent) | 98.50% |
INCOME TAXES - SCHEDULE OF INCOME BEFORE INCOME TAXES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
U.S. | $ (52,606) | $ (248,433) | $ 79,656 |
Foreign | 119,564 | 167,348 | 63,234 |
Earnings (loss) before income taxes | $ 66,958 | $ (81,085) | $ 142,890 |
INCOME TAXES - SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Current income tax (benefit) provision: | ||||
Federal | $ (31,844) | $ 23,343 | $ 67,505 | |
State | 1,964 | 3,662 | 7,785 | |
Foreign | 24,108 | 27,242 | 14,012 | |
Current income tax (benefit) provision | (5,772) | 54,247 | 89,302 | |
Deferred income tax (benefit) provision: | ||||
Federal | (255,477) | (100,798) | (50,254) | |
State | (28,364) | (9,518) | (3,727) | |
Foreign | (1,437) | (8,865) | (5,805) | |
Deferred income tax (benefit) provision | (285,278) | (119,181) | (59,786) | |
Income tax (benefit) provision | $ 257,000 | (291,050) | (64,934) | 29,516 |
Excess tax benefit, amount | $ 361,800 | |||
Excess tax benefits from stock-based awards | $ 51,800 | $ 56,400 |
INCOME TAXES - SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Deferred tax assets: | ||
Accrued expenses | $ 22,234 | $ 40,273 |
NOL carryforwards | 292,812 | 63,948 |
Tax credit carryforwards | 78,715 | 11,570 |
Stock-based compensation | 77,976 | 87,914 |
Equity method investments | 12,066 | 17,455 |
Intangible and other assets | 0 | 13,708 |
Other | 30,265 | 30,044 |
Total deferred tax assets | 514,068 | 264,912 |
Less valuation allowance | (132,598) | (88,170) |
Net deferred tax assets | 381,470 | 176,742 |
Deferred tax liabilities: | ||
Investment in subsidiaries | (247,167) | (385,474) |
Intangible and other assets | (87,811) | |
Other | (15,241) | (17,555) |
Total deferred tax liabilities | (350,219) | (403,029) |
Net deferred tax assets | $ 31,251 | |
Net deferred tax assets (liabilities) | $ (226,287) |
BUSINESS COMBINATION - PRELIMINARY ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Sep. 29, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,559,066 | $ 1,924,052 | $ 2,245,364 | |
Angie's List | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 44,270 | |||
Other current assets | 11,280 | |||
Property and equipment | 16,341 | |||
Goodwill | 543,674 | |||
Intangible assets | 317,300 | |||
Total assets | 932,865 | |||
Deferred revenue | (32,595) | |||
Other current liabilities | (46,150) | |||
Long-term debt—related party | (61,498) | |||
Deferred income taxes | (9,833) | |||
Other long-term liabilities | (1,405) | |||
Net assets acquired | $ 781,384 |
BUSINESS COMBINATION - SCHEDULE OF PRO FORMA FINANCIAL INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Business Acquisition, Pro Forma Information [Abstract] | ||
Revenue | $ 3,529,600 | $ 3,429,105 |
Net earnings (loss) attributable to IAC shareholders | $ 364,496 | $ (143,133) |
Basic earnings (loss) per share attributable to IAC shareholders (in dollars per share) | $ 4.55 | $ (1.79) |
Diluted earnings (loss) per share attributable to IAC shareholders (in dollars per share) | $ 4.27 | $ (1.79) |
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 2,559,066 | $ 1,924,052 | $ 2,245,364 |
Intangible assets with indefinite lives | 459,143 | 320,645 | |
Intangible assets with definite lives, net of accumulated amortization | 204,594 | 34,806 | |
Total goodwill and intangible assets, net | $ 3,222,803 | $ 2,279,503 |
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF EXPECTED AMORTIZATION OF INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2018 | $ 72,395 | |
2019 | 56,624 | |
2020 | 44,438 | |
2021 | 12,529 | |
2022 | 10,650 | |
Thereafter | 7,958 | |
Total | $ 204,594 | $ 34,806 |
MARKETABLE SECURITIES - SCHEDULE OF CURRENT AVAILABLE-FOR-SALE MARKETABLE SECURITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Schedule of Available-for-sale Marketable Securities | ||
Amortized Cost | $ 4,995 | $ 89,350 |
Gross Unrealized Gains | 0 | 2 |
Gross Unrealized Losses | 0 | (10) |
Fair Value | 4,995 | 89,342 |
Commercial paper | ||
Schedule of Available-for-sale Marketable Securities | ||
Amortized Cost | 4,995 | 49,797 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 4,995 | 49,797 |
Treasury discount notes | ||
Schedule of Available-for-sale Marketable Securities | ||
Amortized Cost | 34,978 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (4) | |
Fair Value | 34,974 | |
Corporate debt securities | ||
Schedule of Available-for-sale Marketable Securities | ||
Amortized Cost | 4,575 | |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (6) | |
Fair Value | $ 4,571 |
MARKETABLE SECURITIES - SCHEDULE OF PROCEEDS FROM MATURITIES AND SALES OF CURRENT AVAILABLE-FOR-SALE MARKETABLE SECURITIES (Details 2) - USD ($) |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2015 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Marketable Securities [Abstract] | ||||
Gross unrealized loss | $ 37,000,000 | |||
Proceeds from maturities and sales of available-for-sale marketable securities | $ 114,350,000 | 279,485,000 | $ 218,976,000 | |
Gross realized gains | 0 | 3,556,000 | 443,000 | |
Gross realized losses | $ 300,000 | $ 0 | $ 0 | $ 0 |
Match Group | PlentyOfFish | ||||
Business Acquisition [Line Items] | ||||
Cash acquisition price | $ 575,000,000 |
LONG-TERM INVESTMENTS - NARRATIVE (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Oct. 23, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Cost method investments | ||||
Long-term investments | ||||
After tax other-than-temporary impairment charge | $ 9.5 | $ 10.0 | $ 4.5 | |
Equity method investments | ||||
Long-term investments | ||||
After tax other-than-temporary impairment charge | $ 2.7 | $ 0.6 | ||
Match Group | ||||
Long-term investments | ||||
Proceeds from sale of cost method investment | $ 60.2 | |||
Gain on sale of investments | $ 9.1 |
LONG-TERM INVESTMENTS - SCHEDULE OF LONG-TERM INVESTMENTS (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Components of long-term investments | ||
Total long-term investments | $ 64,977 | $ 122,810 |
Cost method investments | ||
Components of long-term investments | ||
Total long-term investments | 63,418 | 116,133 |
Equity method investments | ||
Components of long-term investments | ||
Total long-term investments | $ 1,559 | $ 6,677 |
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS - NARRATIVE (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2017
USD ($)
arrangement
|
|
Contingent Consideration Arrangments | ||
Discount rate | 12.00% | |
Current portion of contingent consideration | $ 33.4 | $ 0.6 |
Noncurrent portion of contingent consideration | $ 0.4 | $ 2.0 |
Contingent Consideration Arrangements | ||
Contingent Consideration Arrangments | ||
Number of contingent consideration arrangements related to business acquisitions | arrangement | 3 | |
Maximum amount of contingent consideration | $ 33.0 | |
Fair value of contingent consideration | $ 3.0 |
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS - SCHEDULE OF CHANGES IN LEVEL 3 ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Auction Rate Security | ||
Other | $ 0 | |
Contingent Consideration Arrangements | ||
Other | $ 0 | 2,133 |
Contingent Consideration Arrangements | ||
Contingent Consideration Arrangements | ||
Balance at beginning of period | (33,871) | (33,873) |
Fair value adjustments | (5,801) | (2,555) |
Included in other comprehensive (loss) income | (1,404) | (1,571) |
Fair value at date of acquisition | 0 | (185) |
Settlements | 38,429 | 2,180 |
Proceeds from sale | 0 | 0 |
Balance at end of period | (2,647) | (33,871) |
Auction Rate Security | ||
Auction Rate Security | ||
Balance at beginning of period | $ 0 | 4,050 |
Fair value adjustments | 0 | |
Included in other comprehensive (loss) income | 5,950 | |
Fair value at date of acquisition | 0 | |
Settlements | 0 | |
Proceeds from sale | (10,000) | |
Balance at end of period | $ 0 |
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS - CARRYING VALUE AND FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Current portion of long-term debt | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ (13,750) | $ (20,000) |
Current portion of long-term debt | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | (13,802) | (20,311) |
Long-term debt, net | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | (1,979,469) | (1,582,484) |
Long-term debt, net | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ (2,168,108) | $ (1,657,861) |
LONG-TERM DEBT - SCHEDULE OF AGGREGATE CONTRACTUAL MATURITIES OF LONG-TERM DEBT (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Disclosure [Abstract] | ||
2018 | $ 13,750 | |
2019 | 13,750 | |
2020 | 13,750 | |
2021 | 27,500 | |
2022 | 1,183,609 | |
2024 | 400,000 | |
2027 | 450,000 | |
Total long-term debt | 2,102,359 | |
Less: Current portion of long-term debt | 13,750 | $ 20,000 |
Less: unamortized original issue discount and original issue premium, net | 75,826 | |
Less: unamortized debt issuance costs | 33,314 | |
Long-term debt, net | $ 1,979,469 | $ 1,582,484 |
STOCK-BASED COMPENSATION - SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS (Details) - Stock Options |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expected volatility | 29.00% | 29.00% | 28.00% |
Risk-free interest rate | 2.00% | 1.20% | 1.60% |
Expected term (in years) | 5 years 2 months 18 days | 4 years 9 months 18 days | 5 years 3 months 18 days |
Dividend yield | 0.00% | 2.00% |
SEGMENT INFORMATION - SCHEDULE OF SEGMENT REPORTING INFORMATION (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 950,585 | $ 828,434 | $ 767,387 | $ 760,833 | $ 811,162 | $ 764,102 | $ 745,439 | $ 819,179 | $ 3,307,239 | $ 3,139,882 | $ 3,230,933 |
Operating income (loss) | 94,360 | $ (18,589) | $ 75,635 | $ 37,060 | 112,820 | $ 85,584 | $ (252,446) | $ 21,417 | 188,466 | (32,625) | 179,588 |
Adjusted EBITDA | 575,293 | 501,219 | 485,790 | ||||||||
Segment Assets | 2,263,516 | 2,057,611 | 2,263,516 | 2,057,611 | |||||||
Capital expenditures | 75,523 | 78,039 | 62,049 | ||||||||
Operating Segments | Match Group, Inc. | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating income (loss) | 360,517 | 315,549 | 212,981 | ||||||||
Adjusted EBITDA | 468,941 | 403,380 | 284,554 | ||||||||
Segment Assets | 467,338 | 422,509 | 467,338 | 422,509 | |||||||
Capital expenditures | 28,833 | 46,098 | 25,246 | ||||||||
Operating Segments | ANGI Homeservices | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 736,386 | 498,890 | 361,201 | ||||||||
Operating income (loss) | (149,176) | 25,363 | (1,568) | ||||||||
Adjusted EBITDA | 37,858 | 45,851 | 16,713 | ||||||||
Segment Assets | 264,450 | 74,106 | 264,450 | 74,106 | |||||||
Capital expenditures | 26,837 | 16,660 | 10,170 | ||||||||
Operating Segments | Video | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 276,994 | 228,649 | 213,317 | ||||||||
Operating income (loss) | (35,659) | (27,656) | (38,756) | ||||||||
Adjusted EBITDA | (30,446) | (21,247) | (38,384) | ||||||||
Segment Assets | 129,855 | 225,519 | 129,855 | 225,519 | |||||||
Capital expenditures | 400 | 2,508 | 2,466 | ||||||||
Operating Segments | Applications | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 577,998 | 604,140 | 760,748 | ||||||||
Operating income (loss) | 130,176 | 109,663 | 175,145 | ||||||||
Adjusted EBITDA | 136,757 | 132,276 | 184,258 | ||||||||
Segment Assets | 345,532 | 98,460 | 345,532 | 98,460 | |||||||
Capital expenditures | 227 | 1,196 | 4,681 | ||||||||
Operating Segments | Publishing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 361,837 | 407,313 | 691,686 | ||||||||
Operating income (loss) | 15,670 | (334,417) | (26,692) | ||||||||
Adjusted EBITDA | 31,470 | (7,571) | 87,788 | ||||||||
Segment Assets | 182,949 | 398,958 | 182,949 | 398,958 | |||||||
Capital expenditures | 850 | 2,093 | 6,283 | ||||||||
Operating Segments | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 23,980 | 283,365 | 294,821 | ||||||||
Operating income (loss) | (5,621) | (11,678) | (28,611) | ||||||||
Adjusted EBITDA | (1,532) | 1,802 | 4,734 | ||||||||
Segment Assets | 0 | 15,372 | 0 | 15,372 | |||||||
Capital expenditures | 536 | 5,712 | 7,085 | ||||||||
Inter-segment elimination | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | (617) | (585) | (545) | ||||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating income (loss) | (127,441) | (109,449) | (112,911) | ||||||||
Adjusted EBITDA | (67,755) | (53,272) | (53,873) | ||||||||
Segment Assets | $ 873,392 | $ 822,687 | 873,392 | 822,687 | |||||||
Capital expenditures | $ 17,840 | $ 3,772 | $ 6,118 |
SEGMENT INFORMATION - SCHEDULE OF REVENUE AND LONG-LIVED ASSETS (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Revenue and Long-lived Assets by Geography | |||||||||||
Revenue | $ 950,585 | $ 828,434 | $ 767,387 | $ 760,833 | $ 811,162 | $ 764,102 | $ 745,439 | $ 819,179 | $ 3,307,239 | $ 3,139,882 | $ 3,230,933 |
Long-lived assets (excluding goodwill and intangible assets) | 315,170 | 306,248 | 315,170 | 306,248 | |||||||
United States | |||||||||||
Revenue and Long-lived Assets by Geography | |||||||||||
Revenue | 2,323,050 | 2,318,976 | 2,376,035 | ||||||||
Long-lived assets (excluding goodwill and intangible assets) | 286,541 | 281,725 | 286,541 | 281,725 | |||||||
All Other Countries | |||||||||||
Revenue and Long-lived Assets by Geography | |||||||||||
Revenue | 984,189 | 820,906 | $ 854,898 | ||||||||
Long-lived assets (excluding goodwill and intangible assets) | $ 28,629 | $ 24,523 | $ 28,629 | $ 24,523 |
COMMITMENTS AND CONTINGENCIES - SCHEDULE OF FUTURE MINIMUM PAYMENTS UNDER OPERATING LEASE AGREEMENTS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Future Minimum Payments Under Operating Lease Agreements | |||
2018 | $ 38,339 | ||
2019 | 36,996 | ||
2020 | 30,594 | ||
2021 | 23,253 | ||
2022 | 19,688 | ||
Thereafter | 211,649 | ||
Total | 360,519 | ||
Expenses charged to operations under operating lease agreements | $ 37,900 | $ 50,800 | $ 39,400 |
Period of most significant operating leases (in years) | 77 years | ||
Percentage of most significant operating leases | 48.00% |
COMMITMENTS AND CONTINGENCIES - SCHEDULE OF COMMERCIAL COMMITMENTS OUTSTANDING (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Other Commitments | |
Less Than 1 Year | $ 22,570 |
1-3 Years | 10,887 |
3-5 Years | 0 |
More Than 5 Years | 1,939 |
Total Amounts Committed | 35,396 |
Purchase obligations | |
Other Commitments | |
Less Than 1 Year | 21,994 |
1-3 Years | 10,816 |
3-5 Years | 0 |
More Than 5 Years | 0 |
Total Amounts Committed | 32,810 |
Letters of credit and surety bonds | |
Other Commitments | |
Less Than 1 Year | 576 |
1-3 Years | 71 |
3-5 Years | 0 |
More Than 5 Years | 1,939 |
Total Amounts Committed | $ 2,586 |
BENEFIT PLANS - NARRATIVE (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Retirement Benefits [Abstract] | |||
Employee contribution limit per calendar year (up to) (as a percent of pre-tax earnings) | 50.00% | ||
Employer contribution limit per calendar year (as a percent of compensation) | 3.00% | ||
Employer contribution per dollar employee contributes up to contribution limit | 50.00% | ||
United States | |||
Defined Contribution Plan Disclosure | |||
Defined contribution plan contributions | $ 11.1 | $ 10.0 | $ 9.1 |
All Other Countries | |||
Defined Contribution Plan Disclosure | |||
Defined contribution plan contributions | $ 2.5 | $ 2.1 | $ 2.5 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - SCHEDULE OF OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Other current assets: | ||
Prepaid expenses | $ 49,350 | $ 37,665 |
Income taxes receivable | 33,239 | 41,352 |
Capitalized downloadable search toolbar costs, net | 31,588 | 28,737 |
Production costs | 18,570 | 39,763 |
Other | 52,627 | 56,551 |
Other current assets | $ 185,374 | $ 204,068 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Accrued expenses and other current liabilities: | ||
Accrued employee compensation and benefits | $ 108,431 | $ 106,301 |
Accrued advertising expense | 96,445 | 68,916 |
Other | 162,048 | 169,693 |
Accrued expenses and other current liabilities | $ 366,924 | $ 344,910 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - SCHEDULE OF REVENUE (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Revenue: | |||||||||||
Service revenue | $ 3,302,937 | $ 2,967,474 | $ 3,077,080 | ||||||||
Product revenue | 4,302 | 172,408 | 153,853 | ||||||||
Revenue | $ 950,585 | $ 828,434 | $ 767,387 | $ 760,833 | $ 811,162 | $ 764,102 | $ 745,439 | $ 819,179 | $ 3,307,239 | $ 3,139,882 | $ 3,230,933 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - SCHEDULE OF COST OF REVENUE (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Cost of revenue: | |||||||||||
Cost of service revenue | $ 647,226 | $ 617,058 | $ 652,137 | ||||||||
Cost of product revenue | 3,782 | 138,672 | 126,024 | ||||||||
Cost of revenue | $ 199,727 | $ 166,290 | $ 139,033 | $ 145,958 | $ 212,468 | $ 179,131 | $ 170,397 | $ 193,734 | $ 651,008 | $ 755,730 | $ 778,161 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - SCHEDULE OF OTHER (EXPENSE) INCOME, NET (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Other income (expense), net: | |||
Other (expense) income, net | $ (16,213) | $ 60,650 | $ 36,938 |
TRANSACTION AND INTEGRATION RELATED COSTS IN CONNECTION WITH THE COMBINATION - NARRATIVE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | |||
Stock-based compensation expense | $ 264,618 | $ 104,820 | $ 105,450 |
ANGI Homeservices | |||
Business Acquisition [Line Items] | |||
Transaction and integration related costs | 44,101 | ||
Write-off due to deferred revenue | 7,800 | ||
Stock-based compensation expense | $ 122,066 |
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - NARRATIVE (Details) - Senior Notes - 4.875% Senior Notes due November 30, 2018 (the 4.875% Senior Notes); interest payable each May 30 and November 30 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Condensed Financial Statements, Captions [Line Items] | ||
Stated interest rate (as a percent) | 4.75% | 4.75% |
Percentage of voting interests acquired | 100.00% |
QUARTERLY RESULTS (UNAUDITED) - SUMMARY (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Quarterly Financial Data [Abstract] | |||||||||||
Revenue | $ 950,585 | $ 828,434 | $ 767,387 | $ 760,833 | $ 811,162 | $ 764,102 | $ 745,439 | $ 819,179 | $ 3,307,239 | $ 3,139,882 | $ 3,230,933 |
Cost of revenue | 199,727 | 166,290 | 139,033 | 145,958 | 212,468 | 179,131 | 170,397 | 193,734 | 651,008 | 755,730 | 778,161 |
Operating income (loss) | 94,360 | (18,589) | 75,635 | 37,060 | 112,820 | 85,584 | (252,446) | 21,417 | 188,466 | (32,625) | 179,588 |
Net earnings | 23,349 | 225,639 | 80,557 | 28,463 | 114,117 | 52,340 | (190,542) | 7,934 | 358,008 | (16,151) | 113,374 |
Net earnings attributable to IAC shareholders | $ 32,804 | $ 179,643 | $ 66,268 | $ 26,209 | $ 102,051 | $ 43,162 | $ (194,775) | $ 8,282 | $ 304,924 | $ (41,280) | $ 119,472 |
Per share information attributable to IAC shareholders: | |||||||||||
Basic (loss) earnings per share (USD per share) | $ 0.40 | $ 2.22 | $ 0.84 | $ 0.34 | $ 1.29 | $ 0.54 | $ (2.45) | $ 0.10 | $ 3.81 | $ (0.52) | $ 1.44 |
Diluted (loss) earnings per share (USD per share) | $ 0.37 | $ 1.79 | $ 0.70 | $ 0.29 | $ 1.18 | $ 0.49 | $ (2.45) | $ 0.09 | $ 3.18 | $ (0.52) | $ 1.33 |
Stock-based compensation expense | $ 264,618 | $ 104,820 | $ 105,450 | ||||||||
Income tax expense (benefit) | $ 257,000 | (291,050) | $ (64,934) | $ 29,516 | |||||||
Impairment loss on goodwill | $ 183,500 | ||||||||||
Impairment of intangible assets | $ 7,200 | ||||||||||
HomeAdvisor | |||||||||||
Per share information attributable to IAC shareholders: | |||||||||||
Stock-based compensation expense | $ 15,800 | 60,900 | |||||||||
Angie's List | |||||||||||
Per share information attributable to IAC shareholders: | |||||||||||
After-tax costs | 13,900 | $ 17,400 | $ 13,900 | ||||||||
Write-off due to deferred revenue | $ 7,600 | ||||||||||
PriceRunner | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||||||
Per share information attributable to IAC shareholders: | |||||||||||
Gain on sale of business | $ 11,900 | ||||||||||
ShoeBuy | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||||||
Per share information attributable to IAC shareholders: | |||||||||||
Gain on sale of business | $ 37,500 |
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