EARNINGS PER SHARE

The following tables set forth the computation of basic and diluted earnings per share attributable to IAC shareholders:



	Three Months Ended September 30,
	2018						2017
	Basic			Diluted			Basic			Diluted
	(In thousands, except per share data)
Numerator:
Net earnings	$	171,577		$	171,577		$	225,639		$	225,639
Net earnings attributable to noncontrolling interests	(25,803		)	(25,803		)	(45,996		)	(45,996		)
Impact from public subsidiaries' dilutive securities ^(a)	—			(8,336		)	—			(23,749		)
Net earnings attributable to IAC shareholders	$	145,774		$	137,438		$	179,643		$	155,894

Denominator:
Weighted average basic shares outstanding	83,433			83,433			80,817			80,817
Dilutive securities ^{(a) (b) (c) (d)}	—			8,542			—			6,379
Denominator for earnings per share—weighted average shares^{(a) (b) (c) (d)}	83,433			91,975			80,817			87,196

Earnings per share attributable to IAC shareholders:
Earnings per share	$	1.75		$	1.49		$	2.22		$	1.79



	Nine Months Ended September 30,
	2018						2017
	Basic			Diluted			Basic			Diluted
	(In thousands, except per share data)
Numerator:
Net earnings	$	540,270		$	540,270		$	334,659		$	334,659
Net earnings attributable to noncontrolling interests	(105,061		)	(105,061		)	(62,539		)	(62,539		)
Impact from public subsidiaries' dilutive securities ^(a)	—			(19,490		)	—			(34,104		)
Net earnings attributable to IAC shareholders	$	435,209		$	415,719		$	272,120		$	238,016

Denominator:
Weighted average basic shares outstanding	83,342			83,342			79,369			79,369
Dilutive securities ^{(a) (b) (c) (d)}	—			8,076			—			5,133
Denominator for earnings per share—weighted average shares^{(a) (b) (c) (d)}	83,342			91,418			79,369			84,502

Earnings per share attributable to IAC shareholders:
Earnings per share	$	5.22		$	4.55		$	3.43		$	2.82

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^(a)

For the three months ended September 30, 2018, it is more dilutive for IAC to settle certain ANGI equity awards and MTCH to settle certain MTCH equity awards. For the nine months ended September 30, 2018, it is more dilutive for IAC to settle certain MTCH and ANGI equity awards. For the three and nine months ended September 30, 2017, it is more dilutive for IAC to settle certain ANGI equity awards and MTCH to settle certain MTCH equity awards.

^(b)

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, exchange of the Company's Exchangeable Notes and vesting of restricted stock units ("RSUs"). For both the three and nine months ended September 30, 2018, 3.4 million potentially dilutive securities are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three months ended September 30, 2017, there were no potentially dilutive securities excluded from the calculation of diluted earnings per share. For the nine months ended September 30, 2017 less than 0.1 million potentially dilutive securities are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

^(c)

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 both the three and nine months ended September 30, 2018 and 2017, 0.2 million and 0.3 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.

^(d)

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; therefore, the Exchangeable Notes are only dilutive for periods during which the average price of IAC common stock exceeds the approximate $152.18 per share exchange price per $1,000 principal amount of the Exchangeable Notes. For the three and nine months ended September 30, 2018, the average price of IAC common stock exceeded $152.18 and the dilutive impact of the Exchangeable Notes was 0.6 million and 0.2 million shares, respectively.