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 | Smaller reporting company o | Emerging growth company o |
Common Stock | 77,986,305 | ||
Class B Common Stock | 5,789,499 | ||
Total | 83,775,804 |
Page Number | ||
• | our ability to continue to increase consumer acceptance and adoption of online dating products, particularly 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 brands; |
• | the breadth and depth of Match Group 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, the ever-evolving technological landscape and the ever-changing regulatory landscape (in particular, as it relates to the regulation of online platforms); |
• | 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 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, HomeAdvisor and Handy brands; |
• | our ability to consistently generate service requests and jobs 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, video tools and user experience; |
• | whether our SaaS subscription offering and live streaming accessories resonate with consumers; |
• | the continued ability of users 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 competitor brands; |
• | our ability to host and stream high-bandwidth video on a scalable platform; |
• | our ability to retain existing subscribers by continuing to provide a compelling value proposition and convert non-paying users into subscribers; and |
• | our ability to drive visitors to our platform through various forms of direct marketing. |
• | the Verywell family of brands, a leading online health publisher and resource where users can explore a full spectrum of health and wellness topics, from comprehensive information on medical conditions to advice on fitness, nutrition, mental health, pregnancy and more; |
• | the Spruce family of brands, a leading online lifestyle property covering home decor, home repair, recipes, cooking techniques, pets and crafts where users can find practical, real-life tips and inspiration to help them create their best home; |
• | the Balance family of brands, a leading online property covering personal finance, career and small business topics that makes personal finance easy to understand and where users can find clear, practical and straightforward personal financial advice; |
• | Investopedia, an online resource for investment and personal finance education and information; |
• | Lifewire, a leading online technology information property that provides expert-created, real-world technology content with informative visuals and straightforward instruction that helps users fix tech gadgets, learn how to perform specific tech tasks and find the best tech products; |
• | TripSavvy, a travel website written by real experts (not anonymous reviewers) where users can find useful travel advice and inspiration from destinations around the world; |
• | ThoughtCo, a leading online information and reference site with a focus on expert-created education content where users can find answers to questions and information regarding a broad range of disciplines, including science, technology and math, the humanities and the arts, music and recreation; and |
• | two recently acquired websites, Byrdie, a leading beauty website covering beauty tips, style, product reviews and makeup trends, and MyDomaine, a lifestyle website where users can find fresh recipes, smart career tips and insider travel guides that awaken a life well lived. |
• | the quality of the content and features on our websites, relative to those of our competitors; |
• | our ability to successfully create or acquire content (or the rights thereto) in a cost-effective manner; |
• | the relevance and authority of the content featured on our websites; and |
• | our ability to successfully drive visitors to our portfolio of digital brands in a cost-effective manner. |
• | our ability to maintain industry-leading monetization solutions for our desktop browser applications in response to technological changes and platform demands; |
• | the size and stability of our global base of installed desktop application products and our ability to grow this base; |
• | the continued creation of desktop browser applications that resonate with consumers, which depends upon our continued ability to bundle attractive features, content and services (some of which may be owned by third parties); |
• | our ability to differentiate our desktop browser applications from those of our competitors; and |
• | our ability to market and distribute our desktop browser applications through direct to consumer (primarily the Chrome Web Store) and third-party channels in a cost-effective manner. |
• | the continued growth of consumer adoption of free and paid mobile applications generally and related engagement levels; |
• | our ability to operate our mobile applications as a scalable platform; |
• | our ability to retain existing subscribers and acquire new subscribers in a cost-effective manner; |
• | our ability to continue to optimize our marketing and monetization strategies; |
• | the continued growth of smartphone adoption in certain regions of the world, particularly emerging markets; |
• | the continued strength of Mosaic Group brands; and |
• | our ability to introduce new and enhanced mobile applications in response to competitor offerings, consumer preferences, platform demands, social trends and evolving technological landscape. |
• | Ask Media Group, a collection of websites providing general search services and information; |
• | BlueCrew, an on-demand staffing platform that connects temporary workers with traditional blue-collar jobs in areas like warehouse, delivery and moving, data entry and customer service; |
• | The Daily Beast, a website dedicated to news, commentary, culture and entertainment that publishes original reporting and opinion from its roster of full-time journalists and contributors; |
• | College Humor Media, a provider of digital content, including its recently launched subscription only property, Dropout.tv; and |
• | IAC Films, a provider of production and producer services for feature films, primarily for initial sale and distribution through theatrical releases and video-on-demand services in the United States and internationally. |
• | 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; |
• | expose one or more of us to potential events of default, 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, Match Group and ANGI Homeservices to borrow under our respective revolving credit facilities, which will depend on, among other things, compliance with the covenants governing our indebtedness. |
• | properly value prospective acquisitions, especially those with limited operating histories; |
• | successfully integrate the operations, as well as the various functions and systems, of acquired businesses with our existing operations, functions 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 management, operations and financial resources. |
• | operational and compliance challenges caused by distance, language barriers and cultural differences; |
• | difficulties in staffing and managing international operations; |
• | differing levels (or lack) of social and technological acceptance of our products and services; |
• | slow or lagging growth in the commercial use and acceptance of the Internet (particularly via mobile devices); |
• | foreign currency fluctuations; |
• | restrictions on the transfer of funds among countries and back to the United States and related repatriation costs; |
• | differing and potentially adverse tax laws; |
• | compliance challenges; |
• | 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. |
Year Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
Statement of Operations Data:(a) | |||||||||||||||||||
Revenue | $ | 4,262,892 | $ | 3,307,239 | $ | 3,139,882 | $ | 3,230,933 | $ | 3,109,547 | |||||||||
Earnings (loss) from continuing operations | 757,747 | 358,008 | (16,151 | ) | 113,374 | 234,557 | |||||||||||||
Earnings from discontinued operations (b) | — | — | — | — | 174,673 | ||||||||||||||
Net (earnings) loss attributable to noncontrolling interests | (130,786 | ) | (53,084 | ) | (25,129 | ) | 6,098 | 5,643 | |||||||||||
Net earnings (loss) attributable to IAC shareholders | 626,961 | 304,924 | (41,280 | ) | 119,472 | 414,873 | |||||||||||||
Earnings (loss) per share from continuing operations attributable to IAC shareholders: | |||||||||||||||||||
Basic | $ | 7.52 | $ | 3.81 | $ | (0.52 | ) | $ | 1.44 | $ | 2.88 | ||||||||
Diluted | $ | 6.59 | $ | 3.18 | $ | (0.52 | ) | $ | 1.33 | $ | 2.71 | ||||||||
Dividends declared per share | $ | — | $ | — | $ | — | $ | 1.36 | $ | 1.16 | |||||||||
December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||
Total assets | $ | 6,874,585 | $ | 5,867,810 | $ | 4,645,873 | $ | 5,188,691 | $ | 4,241,421 | |||||||||
Long-term debt: | |||||||||||||||||||
Current portion of long-term debt | 13,750 | 13,750 | 20,000 | 40,000 | — | ||||||||||||||
Long-term debt, net | 2,245,548 | 1,979,469 | 1,582,484 | 1,726,954 | 1,064,536 |
(a) | We recognized items that affected the comparability of results for the years 2018, 2017 and 2016, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." |
(b) | There were no discontinued operations for the four years ended December 31, 2018. 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 ("MTCH") - is a leading provider of subscription dating products, operating a portfolio of dating brands, including Tinder, Match, PlentyOfFish and OkCupid. At December 31, 2018, IAC’s economic and voting interest in MTCH were 81.1% and 97.6%, respectively. |
• | ANGI Homeservices ("ANGI") - connects millions of homeowners to home service professionals through its portfolio of digital home service brands, including HomeAdvisor, Angie's List and Handy. At December 31, 2018, IAC’s economic and voting interest in ANGI were 83.9% and 98.1%, respectively. |
• | Vimeo - operates a global video platform for creative professionals, marketers and enterprises to connect with their audiences, customers and employees. |
• | Dotdash - is a portfolio of digital brands providing expert information and inspiration in select vertical content categories. |
• | Applications - consists of Desktop, which includes our direct-to-consumer downloadable desktop applications and the business-to-business partnership operations, and Mosaic Group (previously referred to as Mobile), which is a leading provider of global subscription mobile applications comprised of the following businesses that we own and operate: Apalon, iTranslate, TelTech and Daily Burn, transferred from the Emerging & Other segment effective April 1, 2018. |
• | Emerging & Other - consists of Ask Media Group, BlueCrew, The Daily Beast, College Humor Media, IAC Films and, for periods prior to its transfer to the Applications segment effective April 1, 2018, Daily Burn. It also includes CityGrid, Dictionary.com, Electus, The Princeton Review, ShoeBuy, ASKfm and PriceRunner for periods prior to the sales of these businesses (described below). |
• | 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 MTCH'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 ("ARPU") - is Direct Revenue from Subscribers in the relevant measurement period (whether in the form of subscription or à la carte revenue from Subscribers) 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 Revenue - includes revenue from the HomeAdvisor and Handy domestic marketplace services, including consumer connection revenue for consumer matches, membership subscription revenue from HomeAdvisor service professionals and revenue from completed jobs sourced through the Handy platform. It excludes revenue from Angie's List, mHelpDesk, HomeStars and Felix. |
• | Marketplace Service Requests - are fully completed and submitted domestic customer service requests to HomeAdvisor and completed jobs sourced through the Handy platform. |
• | Marketplace Paying Service Professionals ("Marketplace Paying SPs") - are the number of HomeAdvisor and Handy domestic service professionals that had an active subscription and/or paid for consumer matches or completed a job sourced through the Handy platform in the last month of the period. An active HomeAdvisor subscription is a subscription for which HomeAdvisor was recognizing revenue on the last day of the relevant period. |
• | Platform Revenue - primarily includes revenue from Software-as-a-Service ("SaaS") subscription fees and other related revenue from Vimeo subscribers. |
• | Hardware Revenue - includes sales of our live streaming accessories. |
• | Vimeo Ending Subscribers - is 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) the amortization of fees paid to Apple and Google related to the distribution and the facilitation of in-app purchases and (ii) payments made to partners who distribute our business-to-business 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 hosting fees, compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in data center operations and MTCH customer service functions, credit card processing fees, production costs related to IAC Films, College Humor Media and, prior to its sale, Electus, content costs, expenses associated with the operation of the Company's data centers and costs associated with publishing and distributing the Angie's List Magazine. For periods prior to the sale of The Princeton Review, cost of revenue also includes rent and cost for teachers and tutors. |
• | 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 direct-to-consumer downloadable desktop applications, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to the brands within our MTCH and ANGI segments, and compensation expense (including stock-based compensation expense) and other employee-related costs for ANGI's sales force and marketing personnel. |
• | General and administrative expense - consists primarily of compensation expense (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 MTCH which includes customer service costs within cost of revenue), fees for professional services (including transaction-related costs related to acquisitions and the Combination), facilities costs, bad debt expense, software license and maintenance costs and acquisition-related contingent consideration fair value adjustments (described below). The customer service function at ANGI includes personnel who provide support to its service professionals and consumers. |
• | Product development expense - consists primarily of compensation expense (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 and software license and maintenance costs. |
• | Acquisition-related contingent consideration fair value adjustments - relate to the portion of the purchase price of certain acquisitions that is contingent upon the future earnings performance and/or operating metrics of the acquired company. The fair value of the liability is estimated at the date of acquisition and adjusted each reporting period until |
• | MTCH Term Loan - due November 16, 2022. The outstanding balance of the MTCH Term Loan as of December 31, 2018 is $425.0 million. The MTCH Term Loan bears interest at LIBOR plus 2.50% and was 5.09% and 3.85% at December 31, 2018 and 2017, respectively. |
• | MTCH Credit Facility - On December 7, 2018, the MTCH $500 million revolving credit facility was amended and restated, and is due on December 7, 2023. The outstanding borrowings under the MTCH Credit Facility as of December 31, 2018 are $260.0 million and bear interest at LIBOR plus 1.50%, or approximately 4.00%. At December 31, 2017, there were no outstanding borrowings under the MTCH Credit Facility. |
• | 6.375% MTCH Senior Notes - MTCH's 6.375% Senior Notes due June 1, 2024, with interest payable each June 1 and December 1. The outstanding balance of the 6.375% MTCH Senior Notes as of December 31, 2018 is $400.0 million. |
• | 5.00% MTCH Senior Notes - MTCH's 5.00% Senior Notes due December 15, 2027, with interest payable each June 15 and December 15. The proceeds, along with cash on hand, were used to redeem the outstanding balance of the 6.75% MTCH Senior Notes. The outstanding balance of the 5.00% MTCH Senior Notes as of December 31, 2018 is $450.0 million. |
• | 5.625% MTCH Senior Notes - On February 15, 2019, MTCH completed a private offering of $350 million aggregate principal amount of its 5.625% Senior Notes due 2029. The proceeds were used to repay outstanding borrowings under the MTCH Credit Facility, to pay expenses associated with the offering, and for general corporate purposes. |
• | 6.75% MTCH Senior Notes - MTCH's 6.75% Senior Notes with an outstanding balance of $445.2 million were redeemed on December 17, 2017 with the proceeds from the 5.00% MTCH Senior Notes and cash on hand. |
• | ANGI Term Loan - On November 5, 2018, the ANGI Term Loan was amended and restated, and is now due on November 5, 2023. The outstanding balance of the ANGI Term Loan as of December 31, 2018 is $261.3 million. The ANGI Term Loan bears interest, payable quarterly, at LIBOR plus 1.50%, or approximately 4.00% at December 31, 2018, and has quarterly principal payments. The ANGI Term Loan bore interest at LIBOR plus 2.00%, or 3.38%, at December 31, 2017. |
• | ANGI Credit Facility - On November 5, 2018, ANGI entered into a five-year $250 million revolving credit facility. At December 31, 2018, there were no outstanding borrowings under the ANGI Credit Facility. |
• | 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. Interest is payable each April 1 and October 1. The outstanding balance of the Exchangeable Notes as of December 31, 2018 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. A portion of the proceeds were used to repay the outstanding balance of the 4.875% Senior Notes (described below). |
• | 4.75% Senior Notes - IAC's 4.75% Senior Notes due December 15, 2022, with interest payable each June 15 and December 15. The outstanding balance of the 4.75% Senior Notes as of December 31, 2018 is $34.5 million. |
• | 4.875% Senior Notes - IAC's 4.875% Senior Notes with an outstanding balance of $361.9 million were redeemed on November 30, 2017 with a portion of the proceeds from the Exchangeable Notes. |
• | IAC Credit Facility - On November 5, 2018, the IAC Credit Facility, under which IAC Group, LLC, a subsidiary of the Company is the borrower, was amended and restated, reducing the facility size from $300 million to $250 million, |
• | 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 and a reconciliation of net earnings (loss) attributable to IAC shareholders to operating income (loss) to consolidated Adjusted EBITDA for the years ended December 31, 2018, 2017, and 2016. |
• | IAC's revolving credit facility was amended and restated, reducing the facility size from $300 million to $250 million, and now expires November 5, 2023. |
• | ANGI entered into a five-year $250 million revolving credit facility and the ANGI Term Loan was amended and restated, and is now due on November 5, 2023. |
• | Revenue increased $955.7 million, or 29%, to $4.3 billion due primarily to growth from MTCH of $399.2 million, an increase from ANGI of $395.9 million due, in part, to the Combination (defined below), and increases of $59.7 million from Emerging & Other, $56.3 million from Vimeo and $40.1 million from Dotdash. |
• | Operating income increased $376.7 million, or 200%, to $565.1 million due primarily to an increase in Adjusted EBITDA of $413.5 million, a decrease of $26.2 million in stock-based compensation expense, and a change of $4.3 million in acquisition-related contingent consideration fair value adjustments, partially offset by increases of $66.3 million in amortization of intangibles and $1.1 million in depreciation. The decrease in stock-based compensation expense was due primarily to a decrease of $51.4 million in modification and acceleration charges related to the Combination ($70.6 million in 2018 compared to $122.1 million in 2017), partially offset by the modification of certain awards in 2018, due in part, to the sale of businesses during the fourth quarter of 2018 and the issuance of new equity awards since 2017. The increase in amortization of intangibles was due primarily to the Combination and the inclusion in 2018 of an impairment charge of $27.7 million at Applications related to a trade name at the Desktop business. |
• | Adjusted EBITDA increased $413.5 million, or 72%, to $988.8 million due primarily to growth of $209.6 million from ANGI, $185.0 million from MTCH, $24.1 million from Dotdash and $10.3 million from Emerging & Other, partially offset by a decrease of $4.9 million from Applications and increased losses of $6.3 million and $4.4 million from Corporate and Vimeo, respectively. |
(i) | the combination on September 29, 2017 of the businesses comprising the Company's former HomeAdvisor segment and Angie's List, Inc. ("Angie's List") under a new publicly traded company called ANGI Homeservices Inc. (the "Combination"), which comprises the Company's ANGI segment. Stock-based compensation expense related to the modification of previously issued HomeAdvisor equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination, is expected to be approximately $35 million in 2019 and $20 million in 2020; |
(ii) | the adoption of the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, on January 1, 2018. For the year ended December 31, 2018, the adoption of ASU No. 2014-09 increased consolidated operating income by $2.6 million, due primarily to a reduction in sales commissions expense of $4.9 million at ANGI due to the capitalization and amortization of certain sales commissions. For the year ended December 31, 2018, the effect of ASU No. 2014-09 decreased consolidated revenue by $0.5 million; |
(iii) | the adoption of FASB ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, on January 1, 2018. For the year ended December 31, 2018, the adoption of ASU No. 2016-01 |
(iv) | in addition to those listed under "2018 Developments" above, the acquisitions and dispositions of the following businesses: |
Acquisitions: | Reportable Segment: | Acquisition Date: | ||
BlueCrew - controlling interest | Emerging & Other | February 26, 2018 | ||
Hinge - controlling interest * | MTCH | Second quarter of 2018 | ||
iTranslate | Applications | March 15, 2018 | ||
HomeStars Inc. ("HomeStars") - controlling interest | ANGI | February 8, 2017 | ||
MyBuilder Limited ("MyBuilder") - controlling interest | ANGI | March 24, 2017 | ||
Livestream | Vimeo | October 18, 2017 | ||
My Hammer Holding AG ("MyHammer) - controlling interest | ANGI | November 3, 2016 |
Dispositions: | Reportable Segment: | Sale Date: | ||
The Princeton Review | Emerging & Other | March 31, 2017 | ||
PriceRunner | Emerging & Other | March 18, 2016 | ||
ASKfm | Emerging & Other | June 30, 2016 | ||
ShoeBuy | Emerging & Other | December 30, 2016 |
(v) | the transfer of Daily Burn from the Emerging & Other segment to the Applications segment effective April 1, 2018. |
(vi) | restructuring charges in 2016 of $14.5 million, $2.6 million and $1.1 million at Ask Media Group, Applications and Dotdash, respectively, to reduce costs in light of significant declines in revenue from the Google contract, which was effective April 1, 2016, as well as declines from certain other legacy businesses. |
Years Ended December 31, | |||||||||||||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Match Group | $ | 1,729,850 | $ | 399,189 | 30% | $ | 1,330,661 | $ | 212,551 | 19% | $ | 1,118,110 | |||||||||||
ANGI Homeservices | 1,132,241 | 395,855 | 54% | 736,386 | 237,496 | 48% | 498,890 | ||||||||||||||||
Vimeo | 159,641 | 56,309 | 54% | 103,332 | 24,527 | 31% | 78,805 | ||||||||||||||||
Dotdash | 130,991 | 40,101 | 44% | 90,890 | 12,977 | 17% | 77,913 | ||||||||||||||||
Applications | 582,287 | 4,289 | 1% | 577,998 | (26,142 | ) | (4)% | 604,140 | |||||||||||||||
Emerging & Other | 528,250 | 59,661 | 13% | 468,589 | (294,020 | ) | (39)% | 762,609 | |||||||||||||||
Inter-segment elimination | (368 | ) | 249 | 40% | (617 | ) | (32 | ) | (6)% | (585 | ) | ||||||||||||
Total | $ | 4,262,892 | $ | 955,653 | 29% | $ | 3,307,239 | $ | 167,357 | 5% | $ | 3,139,882 |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | $911,146 | $260,138 | 40% | $651,008 | $(104,722) | (14)% | $755,730 | ||||||
As a percentage of revenue | 21% | 20% | 24% |
• | The MTCH increase was due primarily to an increase of $123.8 million in in-app purchase fees as MTCH's revenues are increasingly sourced through mobile app stores. |
• | The Emerging & Other increase was due primarily to an increase of $143.2 million in traffic acquisition costs principally driven by higher revenue at Ask Media Group, primarily in international markets, and the expense from the inclusion of BlueCrew, which was acquired on February 26, 2018, partially offset by a decrease of $71.1 million in production costs, driven primarily by the sale of Electus in 2018 and lower revenue from IAC Films, the sale of The Princeton Review in 2017 and the transfer of Daily Burn to Applications. |
• | The ANGI increase was due primarily to increases of $7.2 million in traffic acquisition costs, $7.0 million in credit card processing fees, including $3.5 million from the inclusion of Angie's List, and higher Marketplace Revenue, $3.7 |
• | The Vimeo increase was due primarily to the expense from the inclusion of Livestream. |
• | The Emerging & Other decrease was due primarily to the sales of ShoeBuy and The Princeton Review, a reduction of $13.2 million in traffic acquisition costs and $8.4 million in rent expense due to vacating a data center in the fourth quarter of 2016 at Ask Media Group and lower production costs at College Humor Media, partially offset by 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 2017. |
• | The Applications decrease was due primarily to a reduction of $16.6 million in traffic acquisition costs driven by a decline in revenue at Desktop and a decrease of $2.9 million in compensation expense due, in part, to the reductions in workforce in 2016. |
• | The MTCH 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 ANGI 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 Vimeo increase was due primarily to the expense from the inclusion of Livestream and an increase of $2.6 million in hosting fees due to subscription growth. |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Selling and marketing expense | $1,519,440 | $138,219 | 10% | $1,381,221 | $134,124 | 11% | $1,247,097 | ||||||
As a percentage of revenue | 36% | 42% | 40% |
• | The ANGI increase was due primarily to increases in advertising expense of $53.7 million, reflecting the impact from the inclusion of Angie's List, compensation expense of $12.9 million and facilities costs of $5.1 million. The increase in advertising expense was due primarily to increased investments in online marketing and television spend. Compensation expense increased due primarily to growth in the sales force, partially offset by a decrease in stock-based compensation expense of $22.4 million and the inclusion of $7.4 million in severance and retention costs in 2017 related to the Combination. The decrease in stock-based compensation expense reflects decreases of $13.3 million in expense due to the modification of previously issued HomeAdvisor equity awards, which were converted into ANGI Homeservices' equity awards ($1.6 million in 2018 compared to $14.8 million in 2017), and $9.0 million in expense related to previously issued Angie's List equity awards, including the acceleration of certain converted equity awards resulting from the termination of Angie's List employees in connection with the Combination ($0.6 million in 2018 compared to $9.6 million in 2017). Compensation expense in 2018 also reflects a reduction in sales commissions expense of $4.9 million due to the adoption of ASU No. 2014-09. As a percentage of revenue, selling |
• | The MTCH increase was due primarily to higher advertising expense of $45.6 million due primarily to increased marketing expense as a result of marketing initiatives at Tinder, Pairs, PlentyOfFish, OkCupid and Meetic, and the inclusion of Hinge, acquired in 2018, partially offset by lower offline marketing spend at Match and Match Affinity brands. As a percentage of revenue, selling and marketing expense decreased due primarily to the ongoing shift towards brands with lower marketing spend. |
• | The Vimeo increase was due primarily to increased investment in marketing of $13.2 million, $8.8 million of expense from the inclusion of Livestream and an increase in compensation expense of $3.2 million, due, in part, to an increase in the sales force. |
• | The Emerging & Other decrease was due primarily to the transfer of Daily Burn to the Applications segment, the sale of The Princeton Review and a decrease in online marketing of $9.0 million at Ask Media Group, partially offset by higher compensation expense of $6.8 million at Electus and the expense from the inclusion of BlueCrew. Selling and marketing expense was further impacted by an increase of $2.2 million in compensation expense at The Daily Beast due, in part, to an increase in the sales force. |
• | The ANGI increase was due primarily to higher advertising expense 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 expense, 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 advertising expense was due primarily to increased investments in online marketing and 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 reflects $14.8 million of expense in 2017 due to the modification of previously issued HomeAdvisor equity awards, which were converted into ANGI Homeservices' equity awards and $9.6 million of expense in 2017 related to previously issued Angie's List equity awards, including the acceleration of certain converted equity awards resulting from the termination of Angie's List employees in connection with the Combination. |
• | The MTCH increase was due primarily to higher advertising expense of $15.3 million and an increase in compensation expense of $9.1 million. The increase in advertising expense was due primarily to an increase in strategic investments in certain international markets at Tinder and increased marketing related to the launch of a new brand by Meetic in Europe, partially offset by a reduction in marketing spend at MTCH's affinity brands. The increase in compensation expense was primarily related to an increase in headcount at Tinder and the employer portion of payroll taxes paid in connection with the exercise of MTCH 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 Vimeo increase was due primarily to increases in marketing expense of $10.6 million and $2.3 million of compensation expense. |
• | The Emerging & Other decrease was due primarily to the sales of ShoeBuy and The Princeton Review, decreases of $21.1 million and $4.5 million in online marketing and compensation expense, respectively, at Ask Media Group and a decrease of $3.5 million in offline marketing at Daily Burn, partially offset by increases in marketing expense at IAC Films of $6.5 million and compensation expense at Electus of $1.7 million. Online marketing and compensation expense at Ask Media Group decreased principally related to lower revenue resulting from changes in the Google contract and reductions in workforce that occurred in 2016, including $3.1 million in restructuring costs in 2016. |
• | The Applications decrease was due primarily to lower online marketing expense of $10.0 million at Desktop, partially offset by higher online marketing expense of $6.5 million at Mosaic Group. |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
General and administrative expense | $774,079 | $54,822 | 8% | $719,257 | $188,811 | 36% | $530,446 | ||||||
As a percentage of revenue | 18% | 22% | 17% |
• | The Corporate increase was due primarily to higher compensation costs, including an increase in stock-based compensation expense related to a mark-to-market adjustment. |
• | The ANGI increase was due primarily to an increase of $19.7 million in bad debt expense due, in part, to higher Marketplace Revenue, increases of $8.8 million in software license and maintenance costs and $2.9 million in facilities costs, both reflecting the impact from the inclusion of Angie's List, $2.4 million in compensation expense and an increase in customer service expense of $3.4 million, partially offset by a reduction in transaction and integration-related costs principally related to the Combination of $21.9 million. The increase in compensation expense was due primarily to an increase in headcount following the Combination and existing business growth as well as $3.8 million of expense from the inclusion of Handy, almost entirely offset by a decrease of $25.6 million in stock-based compensation expense and a decrease of $9.2 million in severance and retention costs related to the Combination ($2.7 million in 2018 compared to $11.8 million in 2017). The decrease in stock-based compensation expense reflects decreases of $12.9 million in expense due to the modification of previously issued HomeAdvisor equity awards, which were converted into ANGI Homeservices' equity awards ($52.9 million in 2018 compared to $65.7 million in 2017) and $9.6 million in expense related to previously issued Angie's List equity awards, including the acceleration of certain converted equity awards resulting from the termination of Angie's List employees in connection with the Combination ($8.1 million in 2018 compared to $17.7 million in 2017), and the inclusion in 2017 of a modification charge related to a HomeAdvisor equity award, partially offset by acceleration of expense related to certain equity awards in the fourth quarter of 2018 in connection with the chief executive officer transition and the issuance of new equity awards since 2017. |
• | The Vimeo increase was due primarily to $4.9 million of expense from the inclusion of Livestream and an increase in legal costs in 2018. |
• | The Emerging & Other decrease was due primarily to the sale of The Princeton Review, the transfer of Daily Burn to the Applications segment, a favorable legal settlement of $4.8 million in 2018, partially offset by $3.2 million of expense from the inclusion of BlueCrew. |
• | The ANGI increase was due primarily to higher compensation expense 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 expense 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 reflects $65.7 million of expense in 2017 due to the modification of previously issued HomeAdvisor equity awards, which were converted into ANGI Homeservices' equity awards, and $17.7 million of expense in 2017 related to previously issued Angie's List equity awards, including the acceleration of certain converted equity awards resulting from the termination of Angie's List employees in connection with the Combination as well as a modification charge |
• | The MTCH increase was due primarily to an increase of $20.6 million in compensation expense, a change of $14.5 million in acquisition-related contingent consideration fair value adjustments (expense of $5.3 million in 2017 compared to income of $9.2 million in 2016) and an increase of $6.8 million in professional fees. The increase in compensation expense 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 MTCH options and an increase in headcount from business growth. The increase in professional fees was due primarily to the settlement of the Tinder equity plan. |
• | 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 Emerging & Other decrease was due primarily to the sales of The Princeton Review, ShoeBuy and ASKfm, and the effect of the reductions in workforce in 2016, including $2.3 million in restructuring costs included in 2016 at Ask Media Group. |
• | 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. |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Product development expense | $309,329 | $58,450 | 23% | $250,879 | $38,114 | 18% | $212,765 | ||||||
As a percentage of revenue | 7% | 8% | 7% |
• | The MTCH increase was due primarily to an increase of $28.8 million in compensation expense, due primarily to higher headcount at Tinder. |
• | The ANGI increase was due primarily to increases of $4.9 million in compensation expense and $4.5 million in software license and maintenance costs, reflecting the impact from the inclusion of Angie's List. The increase in compensation expense was due primarily to increased headcount, partially offset by a decrease of $6.1 million in stock-based compensation expense resulting from a lower modification charge related to the Combination. |
• | The Vimeo increase was due primarily to $8.7 million of expense from the inclusion of Livestream. |
• | The Dotdash increase was due primarily to an increase of $5.7 million in compensation expense, due primarily to higher headcount. |
• | The ANGI increase was due primarily to an increase of $23.0 million in compensation expense, 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 expense was due to an increase of $14.5 million in stock-based compensation expense principally due to the modification charge related to the Combination and increased headcount. |
• | The MTCH increase was due primarily to an increase of $20.7 million in compensation expense 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 MTCH options, and an increase of $6.3 million in stock-based compensation expense due primarily to new grants issued since 2016. |
• | The Vimeo increase was due primarily to $2.2 million of expense from the inclusion of Livestream. |
• | The Emerging & Other decrease was due primarily to the sales of The Princeton Review and ASKfm and a decrease of $4.3 million in compensation expense due, in part, to reductions in workforce in 2016, including $1.2 million in restructuring costs in 2016 at Ask Media Group. |
• | The Applications decrease was due primarily to a decrease of $3.6 million in compensation expense due, in part, to a decrease in headcount related to reductions in workforce in 2016. |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Depreciation | $75,360 | $1,095 | 1% | $74,265 | $2,589 | 4% | $71,676 | ||||||
As a percentage of revenue | 2% | 2% | 2% |
Years Ended December 31, | |||||||||||||||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Match Group | $ | 553,294 | $ | 192,777 | 53 | % | $ | 360,517 | $ | 44,968 | 14 | % | $ | 315,549 | |||||||||||
ANGI Homeservices | 63,906 | 213,082 | NM | (149,176 | ) | (174,539 | ) | NM | 25,363 | ||||||||||||||||
Vimeo | (35,594 | ) | (8,266 | ) | (30 | )% | (27,328 | ) | (1,978 | ) | (8 | )% | (25,350 | ) | |||||||||||
Dotdash | 18,778 | 34,472 | NM | (15,694 | ) | 233,011 | 94 | % | (248,705 | ) | |||||||||||||||
Applications | 94,834 | (35,342 | ) | (27 | )% | 130,176 | 20,513 | 19 | % | 109,663 | |||||||||||||||
Emerging & Other | 29,964 | 12,552 | 72 | % | 17,412 | 117,108 | NM | (99,696 | ) | ||||||||||||||||
Corporate | (160,043 | ) | (32,602 | ) | (26 | )% | (127,441 | ) | (17,992 | ) | (16 | )% | (109,449 | ) | |||||||||||
Total | $ | 565,139 | $ | 376,673 | 200 | % | $ | 188,466 | $ | 221,091 | NM | $ | (32,625 | ) | |||||||||||
As a percentage of revenue | 13% | 6% | (1)% |
Years Ended December 31, | |||||||||||||||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Match Group | $ | 653,931 | $ | 184,990 | 39 | % | $ | 468,941 | $ | 65,561 | 16 | % | $ | 403,380 | |||||||||||
ANGI Homeservices | 247,506 | 209,648 | 554 | % | 37,858 | (7,993 | ) | (17 | )% | 45,851 | |||||||||||||||
Vimeo | (28,045 | ) | (4,438 | ) | (19 | )% | (23,607 | ) | (3,326 | ) | (16 | )% | (20,281 | ) | |||||||||||
Dotdash | 21,384 | 24,147 | NM | (2,763 | ) | 14,083 | 84 | % | (16,846 | ) | |||||||||||||||
Applications | 131,837 | (4,920 | ) | (4 | )% | 136,757 | 4,481 | 3 | % | 132,276 | |||||||||||||||
Emerging & Other | 36,178 | 10,316 | 40 | % | 25,862 | 15,751 | 156 | % | 10,111 | ||||||||||||||||
Corporate | (74,017 | ) | (6,262 | ) | (9 | )% | (67,755 | ) | (14,483 | ) | (27 | )% | (53,272 | ) | |||||||||||
Total | $ | 988,774 | $ | 413,481 | 72 | % | $ | 575,293 | $ | 74,074 | 15 | % | $ | 501,219 | |||||||||||
As a percentage of revenue | 23% | 17% | 16% |
Years Ended December 31, | |||||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||||
(Dollars in thousands) | |||||||||||||||
Interest expense | $109,327 | $4,032 | 4% | $ | 105,295 | $(3,815) | (3)% | 109,110 |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Other income (expense), net | $305,746 | $321,959 | NM | $(16,213) | $(76,863) | NM | $60,650 |
Years Ended December 31, | |||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||
(Dollars in thousands) | |||||||||||||
Income tax (provision) benefit | $(3,811) | NM | NM | $291,050 | $226,116 | 348% | $64,934 | ||||||
Effective income tax rate | 1% | NM | 80% |
Years Ended December 31, | |||||||||||||||||||
2018 | $ Change | % Change | 2017 | $ Change | % Change | 2016 | |||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net earnings attributable to noncontrolling interests | $ | 130,786 | $77,702 | 146% | $ | 53,084 | $27,955 | 111% | $ | 25,129 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(In thousands) | ||||||||||||
Net earnings (loss) attributable to IAC shareholders | $ | 626,961 | $ | 304,924 | $ | (41,280 | ) | |||||
Add back: | ||||||||||||
Net earnings attributable to noncontrolling interests | 130,786 | 53,084 | 25,129 | |||||||||
Income tax provision (benefit) | 3,811 | (291,050 | ) | (64,934 | ) | |||||||
Other (income) expense, net | (305,746 | ) | 16,213 | (60,650 | ) | |||||||
Interest expense | 109,327 | 105,295 | 109,110 | |||||||||
Operating income (loss) | 565,139 | 188,466 | (32,625 | ) | ||||||||
Stock-based compensation expense | 238,420 | 264,618 | 104,820 | |||||||||
Depreciation | 75,360 | 74,265 | 71,676 | |||||||||
Amortization of intangibles | 108,399 | 42,143 | 79,426 | |||||||||
Acquisition-related contingent consideration fair value adjustments | 1,456 | 5,801 | 2,555 | |||||||||
Goodwill impairment | — | — | — | 275,367 | ||||||||
Adjusted EBITDA | $ | 988,774 | $ | 575,293 | $ | 501,219 |
December 31, | ||||||||
2018 | 2017 | |||||||
(In thousands) | ||||||||
Cash and cash equivalents: | ||||||||
United States | $ | 1,971,282 | $ | 1,178,616 | ||||
All other countries(a) | 160,350 | 452,193 | ||||||
Total cash and cash equivalents | 2,131,632 | 1,630,809 | ||||||
Marketable securities (United States) | 123,665 | 4,995 | ||||||
Total cash and cash equivalents and marketable securities(b)(c) | $ | 2,255,297 | $ | 1,635,804 | ||||
MTCH Debt: | ||||||||
MTCH Term Loan | $ | 425,000 | $ | 425,000 | ||||
MTCH Credit Facility | 260,000 | — | ||||||
6.375% MTCH Senior Notes | 400,000 | 400,000 | ||||||
5.00% MTCH Senior Notes | 450,000 | 450,000 | ||||||
Total MTCH long-term debt | 1,535,000 | 1,275,000 | ||||||
Less: unamortized original issue discount | 7,352 | 8,668 | ||||||
Less: unamortized debt issuance costs | 11,737 | 13,636 | ||||||
Total MTCH debt, net | 1,515,911 | 1,252,696 | ||||||
ANGI Debt: | ||||||||
ANGI Term Loan | 261,250 | 275,000 | ||||||
Less: current portion of ANGI Term Loan | 13,750 | 13,750 | ||||||
Less: unamortized debt issuance costs | 2,529 | 2,938 | ||||||
Total ANGI debt, net | 244,971 | 258,312 | ||||||
IAC Debt: | ||||||||
Exchangeable Notes | 517,500 | 517,500 | ||||||
4.75% Senior Notes | 34,489 | 34,859 | ||||||
Total IAC long-term debt | 551,989 | 552,359 | ||||||
Less: unamortized original issue discount | 54,025 | 67,158 | ||||||
Less: unamortized debt issuance costs | 13,298 | 16,740 | ||||||
Total IAC debt, net | 484,666 | 468,461 | ||||||
Total long-term debt, net | $ | 2,245,548 | $ | 1,979,469 |
(a) | At December 31, 2018, all of the Company’s international cash can be repatriated without significant tax consequences. During the year ended December 31, 2018, international cash totaling $396.2 million was repatriated to the U.S. |
(b) | Cash and cash equivalents at December 31, 2018 and December 31, 2017 includes MTCH's domestic and international cash and cash equivalents of $83.9 million and $103.1 million; and $203.5 million and $69.2 million, respectively. MTCH 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, the Company cannot freely access the cash of MTCH and its subsidiaries. |
(c) | Cash and cash equivalents at December 31, 2018 and December 31, 2017 includes ANGI's domestic and international cash and cash equivalents of $328.8 million and $8.2 million; and $214.8 million and $6.7 million, respectively. Marketable securities at December 31, 2018 include $24.9 million at ANGI. ANGI held no marketable securities at December 31, 2017. ANGI 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, the Company cannot freely access the cash of ANGI and its subsidiaries. |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Net cash provided by (used in): | |||||||||||
Operating activities | $ | 988,128 | $ | 416,699 | $ | 344,238 | |||||
Investing activities | (173,440 | ) | 42,049 | 12,862 | |||||||
Financing activities | (312,798 | ) | (196,869 | ) | (492,140 | ) |
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) (c) | $ | 109,608 | $ | 224,974 | $ | 1,622,736 | $ | 952,750 | $ | 2,910,068 | |||||||||
Operating leases(d) | 38,770 | 87,438 | 64,633 | 255,563 | 446,404 | ||||||||||||||
Purchase obligations(e) | 40,428 | 23,897 | — | — | 64,325 | ||||||||||||||
Total contractual obligations | $ | 188,806 | $ | 336,309 | $ | 1,687,369 | $ | 1,208,313 | $ | 3,420,797 |
(a) | The Company has excluded $49.1 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, 2018 consists of $1.4 billion bearing interest at fixed rates and $0.9 billion bearing interest at variable rates. The variable rate instruments consist of a $425.0 million MTCH Term Loan, a $261.3 million ANGI Term Loan and $260.0 million of outstanding borrowings under the MTCH Credit Facility. The MTCH Term Loan bears interest at LIBOR plus 2.50%, or 5.09%, at December 31, 2018. The ANGI Term Loan bears interest at LIBOR plus 1.50%, or approximately 4.00% at December 31, 2018. The outstanding borrowings under the MTCH Credit Facility bear interest at LIBOR plus 1.50%, or approximately 4.00% at December 31, 2018. The amount of interest ultimately paid on the MTCH and ANGI term loans, and the MTCH Credit Facility may differ based on changes in interest rates. For additional information on long-term debt arrangements, see "Note 7—Long-term Debt" to the consolidated financial statements included in "Item 8—Consolidated Financial Statements and Supplementary Data." |
(c) | Subsequent to December 31, 2018, the outstanding borrowings under the MTCH Credit Facility were repaid in full with a portion of the net proceeds from the 5.625% MTCH Senior Notes issued on February 15, 2019. The principal and interest related to the 5.625% MTCH Senior Notes are not included in the table above. |
(d) | 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 certain lease agreements. These operating expenses are not included in the table above. For additional information on operating leases, see "Note 13—Commitments and Contingencies" to the consolidated financial statements included in "Item 8—Consolidated Financial Statements and Supplementary Data." |
(e) | The purchase obligations principally include web hosting commitments. |
Amount of Commitment Expiration Per Period | |||||||||||||||||||
Other Commercial Commitments(f) | Less Than 1 Year | 1–3 Years | 3–5 Years | More Than 5 Years | Total | ||||||||||||||
(In thousands) | |||||||||||||||||||
Letters of credit and surety bonds | $ | 449 | $ | — | $ | — | $ | 2,272 | $ | 2,721 |
(f) | Commercial commitments are funding commitments that could potentially require the Company to perform in the event of demands by third parties or contingent events. |
• | MTCH's October 1, 2018 market capitalization of $15.7 billion exceeded its carrying value by approximately $15.1 billion and MTCH's strong operating performance. |
• | ANGI's October 1, 2018 market capitalization of $10.7 billion exceeded its carrying value by approximately $9.6 billion and ANGI's strong operating performance. |
• | The Company performed valuations of the Vimeo, College Humor Media and BlueCrew reporting units during 2018. These valuations were prepared primarily in connection with the issuance and/or settlement of equity awards that are denominated in the equity of these businesses. The valuations were prepared time proximate to, however, not as of, October 1, 2018. The fair value of each of these businesses was in excess of its October 1, 2018 carrying value. |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands, except par value amounts) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 2,131,632 | $ | 1,630,809 | |||
Marketable securities | 123,665 | 4,995 | |||||
Accounts receivable, net of allowance and reserves of $18,860 and $11,489, respectively | 279,189 | 304,027 | |||||
Other current assets | 228,253 | 185,374 | |||||
Total current assets | 2,762,739 | 2,125,205 | |||||
Property and equipment, net of accumulated depreciation and amortization | 318,800 | 315,170 | |||||
Goodwill | 2,726,859 | 2,559,066 | |||||
Intangible assets, net of accumulated amortization | 631,422 | 663,737 | |||||
Long-term investments | 235,055 | 64,977 | |||||
Deferred income taxes | 64,786 | 66,321 | |||||
Other non-current assets | 134,924 | 73,334 | |||||
TOTAL ASSETS | $ | 6,874,585 | $ | 5,867,810 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
LIABILITIES: | |||||||
Current portion of long-term debt | $ | 13,750 | $ | 13,750 | |||
Accounts payable, trade | 74,907 | 76,571 | |||||
Deferred revenue | 360,015 | 342,483 | |||||
Accrued expenses and other current liabilities | 434,886 | 366,924 | |||||
Total current liabilities | 883,558 | 799,728 | |||||
Long-term debt, net | 2,245,548 | 1,979,469 | |||||
Income taxes payable | 37,584 | 25,624 | |||||
Deferred income taxes | 23,600 | 35,070 | |||||
Other long-term liabilities | 66,807 | 38,229 | |||||
Redeemable noncontrolling interests | 65,687 | 42,867 | |||||
Commitments and contingencies | |||||||
SHAREHOLDERS' EQUITY: | |||||||
Common stock $.001 par value; authorized 1,600,000 shares; issued 262,303 and 260,624 shares, respectively, and outstanding 77,963 and 76,829 shares, respectively | 262 | 261 | |||||
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 | 12,022,387 | 12,165,002 | |||||
Retained earnings | 1,258,794 | 595,038 | |||||
Accumulated other comprehensive loss | (128,722 | ) | (103,568 | ) | |||
Treasury stock 194,708 and 194,163 shares, respectively | (10,309,612 | ) | (10,226,721 | ) | |||
Total IAC shareholders' equity | 2,843,125 | 2,430,028 | |||||
Noncontrolling interests | 708,676 | 516,795 | |||||
Total shareholders' equity | 3,551,801 | 2,946,823 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 6,874,585 | $ | 5,867,810 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands, except per share data) | |||||||||||
Revenue | $ | 4,262,892 | $ | 3,307,239 | $ | 3,139,882 | |||||
Operating costs and expenses: | |||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 911,146 | 651,008 | 755,730 | ||||||||
Selling and marketing expense | 1,519,440 | 1,381,221 | 1,247,097 | ||||||||
General and administrative expense | 774,079 | 719,257 | 530,446 | ||||||||
Product development expense | 309,329 | 250,879 | 212,765 | ||||||||
Depreciation | 75,360 | 74,265 | 71,676 | ||||||||
Amortization of intangibles | 108,399 | 42,143 | 79,426 | ||||||||
Goodwill impairment | — | — | 275,367 | ||||||||
Total operating costs and expenses | 3,697,753 | 3,118,773 | 3,172,507 | ||||||||
Operating income (loss) | 565,139 | 188,466 | (32,625 | ) | |||||||
Interest expense | (109,327 | ) | (105,295 | ) | (109,110 | ) | |||||
Other income (expense), net | 305,746 | (16,213 | ) | 60,650 | |||||||
Earnings (loss) before income taxes | 761,558 | 66,958 | (81,085 | ) | |||||||
Income tax (provision) benefit | (3,811 | ) | 291,050 | 64,934 | |||||||
Net earnings (loss) | 757,747 | 358,008 | (16,151 | ) | |||||||
Net earnings attributable to noncontrolling interests | (130,786 | ) | (53,084 | ) | (25,129 | ) | |||||
Net earnings (loss) attributable to IAC shareholders | $ | 626,961 | $ | 304,924 | $ | (41,280 | ) | ||||
Per share information attributable to IAC shareholders: | |||||||||||
Basic earnings (loss) per share | $ | 7.52 | $ | 3.81 | $ | (0.52 | ) | ||||
Diluted earnings (loss) per share | $ | 6.59 | $ | 3.18 | $ | (0.52 | ) | ||||
Stock-based compensation expense by function: | |||||||||||
Cost of revenue | $ | 2,482 | $ | 1,881 | $ | 2,305 | |||||
Selling and marketing expense | 7,943 | 31,318 | 6,000 | ||||||||
General and administrative expense | 188,510 | 192,957 | 77,151 | ||||||||
Product development expense | 39,485 | 38,462 | 19,364 | ||||||||
Total stock-based compensation expense | $ | 238,420 | $ | 264,618 | $ | 104,820 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Net earnings (loss) | $ | 757,747 | $ | 358,008 | $ | (16,151 | ) | ||||
Other comprehensive (loss) income, net of tax: | |||||||||||
Change in foreign currency translation adjustment | (31,411 | ) | 80,269 | (43,126 | ) | ||||||
Change in unrealized gains and losses on available-for-sale securities (net of tax benefit of $3,846 and $884 in 2017 and 2016, respectively) | 5 | (4,026 | ) | 1,484 | |||||||
Total other comprehensive (loss) income | (31,406 | ) | 76,243 | (41,642 | ) | ||||||
Comprehensive income (loss), net of tax | 726,341 | 434,251 | (57,793 | ) | |||||||
Components of comprehensive (income) loss attributable to noncontrolling interests: | |||||||||||
Net earnings attributable to noncontrolling interests | (130,786 | ) | (53,084 | ) | (25,129 | ) | |||||
Change in foreign currency translation adjustment attributable to noncontrolling interests | 6,129 | (13,797 | ) | 6,033 | |||||||
Change in unrealized gain and losses of available-for-sale securities attributable to noncontrolling interests | (1 | ) | — | 458 | |||||||
Comprehensive income attributable to noncontrolling interests | (124,658 | ) | (66,881 | ) | (18,638 | ) | |||||
Comprehensive income (loss) attributable to IAC shareholders | $ | 601,683 | $ | 367,370 | $ | (76,431 | ) |
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, 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 | — | ||||||||||||||||||||||||||||||||
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 | — | — | — | — | — | — | — | — | — | — | — |
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) | ||||||||||||||||||||||||||||||||||||||||||||||
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 debt issuance, 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 | ||||||||||||||||||||||
Cumulative effect of adoption of ASU No. 2014-09 | — | — | — | — | — | — | 36,795 | — | — | 36,795 | 3,410 | 40,205 | ||||||||||||||||||||||||||||||||||
Net earnings | 33,897 | — | — | — | — | — | 626,961 | — | — | 626,961 | 96,889 | 723,850 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (702 | ) | — | — | — | — | — | — | (25,278 | ) | — | (25,278 | ) | (5,426 | ) | (30,704 | ) | |||||||||||||||||||||||||||||
Stock-based compensation expense | 1,138 | — | — | — | — | 75,311 | — | — | — | 75,311 | 161,971 | 237,282 | ||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock-based awards, net of withholding taxes | — | 1 | 1,679 | — | — | 21,785 | — | — | — | 21,786 | — | 21,786 | ||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | (82,891 | ) | (82,891 | ) | — | (82,891 | ) | |||||||||||||||||||||||||||||||
Purchase of noncontrolling interests | (8,350 | ) | — | — | — | — | — | — | — | — | — | (9,364 | ) | (9,364 | ) | |||||||||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to fair value | 4,098 | — | — | — | — | (4,098 | ) | — | — | — | (4,098 | ) | — | (4,098 | ) | |||||||||||||||||||||||||||||||
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes, and impact to noncontrolling interests in Match Group | — | — | — | — | — | (342,592 | ) | — | 135 | — | (342,457 | ) | 1,057 | (341,400 | ) | |||||||||||||||||||||||||||||||
Issuance of ANGI Homeservices common stock pursuant to an acquisition, stock-based awards, net of withholding taxes, and impact to noncontrolling interests in ANGI Homeservices | — | — | — | — | — | 106,215 | — | (11 | ) | — | 106,204 | 34,502 | 140,706 | |||||||||||||||||||||||||||||||||
Dividends paid to Match Group noncontrolling interests | — | — | — | — | — | — | — | — | — | — | (105,126 | ) | (105,126 | ) | ||||||||||||||||||||||||||||||||
Noncontrolling interests created in acquisitions | 2,261 | — | — | — | — | — | — | — | — | — | 14,307 | 14,307 | ||||||||||||||||||||||||||||||||||
Other | (9,522 | ) | — | — | — | — | 764 | — | — | — | 764 | (339 | ) | 425 | ||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | 65,687 | $ | 262 | 262,303 | $ | 16 | 16,157 | $ | 12,022,387 | $ | 1,258,794 | $ | (128,722 | ) | $ | (10,309,612 | ) | $ | 2,843,125 | $ | 708,676 | $ | 3,551,801 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings (loss) | $ | 757,747 | $ | 358,008 | $ | (16,151 | ) | ||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | |||||||||||
Stock-based compensation expense | 238,420 | 264,618 | 104,820 | ||||||||
Amortization of intangibles | 108,399 | 42,143 | 79,426 | ||||||||
Depreciation | 75,360 | 74,265 | 71,676 | ||||||||
Bad debt expense | 48,445 | 28,930 | 17,733 | ||||||||
Goodwill impairment | — | — | 275,367 | ||||||||
Deferred income taxes | (34,679 | ) | (285,278 | ) | (119,181 | ) | |||||
Unrealized gains on equity securities, net | (124,170 | ) | — | — | |||||||
Gains from the sale of businesses and investments, net | (147,829 | ) | (32,673 | ) | (50,965 | ) | |||||
Other adjustments, net | 15,763 | 61,647 | 596 | ||||||||
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | |||||||||||
Accounts receivable | (34,828 | ) | (115,169 | ) | 1,283 | ||||||
Other assets | (44,557 | ) | 5,688 | (12,808 | ) | ||||||
Accounts payable and other liabilities | 53,555 | (25,289 | ) | (52,359 | ) | ||||||
Income taxes payable and receivable | 27,034 | 655 | 8,998 | ||||||||
Deferred revenue | 49,468 | 39,154 | 35,803 | ||||||||
Net cash provided by operating activities | 988,128 | 416,699 | 344,238 | ||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions, net of cash acquired | (64,496 | ) | (146,553 | ) | (18,403 | ) | |||||
Capital expenditures | (85,634 | ) | (75,523 | ) | (78,039 | ) | |||||
Proceeds from maturities and sales of marketable debt securities | 333,600 | 114,350 | 252,369 | ||||||||
Purchases of marketable debt securities | (449,676 | ) | (29,891 | ) | (313,943 | ) | |||||
Investments in time deposits | — | — | (87,500 | ) | |||||||
Proceeds from maturities of time deposits | — | — | 87,500 | ||||||||
Net proceeds from the sale of businesses and investments | 136,719 | 185,778 | 172,228 | ||||||||
Purchases of investments | (52,980 | ) | (9,106 | ) | (12,565 | ) | |||||
Other, net | 9,027 | 2,994 | 11,215 | ||||||||
Net cash (used in) provided by investing activities | (173,440 | ) | 42,049 | 12,862 | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of IAC debt | — | 517,500 | — | ||||||||
Repurchases of IAC debt | (363 | ) | (393,464 | ) | (126,409 | ) | |||||
Proceeds from issuance of Match Group debt | 260,000 | 525,000 | 400,000 | ||||||||
Principal payments on Match Group debt | — | (445,172 | ) | (450,000 | ) | ||||||
Borrowing under ANGI Homeservices Term Loan | — | 275,000 | — | ||||||||
Principal payments on ANGI Homeservices Term Loan | (13,750 | ) | — | — | |||||||
Purchase of exchangeable note hedge | — | (74,365 | ) | — | |||||||
Proceeds from issuance of warrants | — | 23,650 | — | ||||||||
Debt issuance costs | (5,449 | ) | (33,744 | ) | (7,811 | ) | |||||
Purchase of IAC treasury stock | (82,891 | ) | (56,424 | ) | (308,948 | ) | |||||
Purchase of Match Group treasury stock | (133,455 | ) | — | — | |||||||
Proceeds from the exercise of IAC stock options | 41,700 | 82,397 | 25,821 | ||||||||
Proceeds from the exercise of Match Group and ANGI Homeservices stock options | 4,705 | 61,095 | 39,378 | ||||||||
Withholding taxes paid on behalf of IAC employees on net settled stock-based awards | (18,982 | ) | (93,832 | ) | (26,716 | ) | |||||
Withholding taxes paid on behalf of Match Group and ANGI Homeservices employees on net settled stock-based awards | (237,564 | ) | (264,323 | ) | (29,830 | ) | |||||
Purchase of Match Group stock-based awards | — | (272,459 | ) | — | |||||||
Dividends paid to Match Group noncontrolling interests | (105,126 | ) | — | — | |||||||
Purchase of noncontrolling interests | (16,063 | ) | (15,439 | ) | (2,740 | ) | |||||
Acquisition-related contingent consideration payments | (185 | ) | (27,289 | ) | (2,180 | ) | |||||
Other, net | (5,375 | ) | (5,000 | ) | (2,705 | ) | |||||
Net cash used in financing activities | (312,798 | ) | (196,869 | ) | (492,140 | ) | |||||
Total cash provided (used) | 501,890 | 261,879 | (135,040 | ) | |||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (1,887 | ) | 11,604 | (6,434 | ) | ||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 500,003 | 273,483 | (141,474 | ) | |||||||
Cash, cash equivalents, and restricted cash at beginning of period | 1,633,682 | 1,360,199 | 1,501,673 | ||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 2,133,685 | $ | 1,633,682 | $ | 1,360,199 |
• | the Match Group, ANGI Homeservices and Applications segments remain unchanged; |
• | Vimeo is now reported as its own segment (it was previously included in the Video segment, which has been eliminated); |
• | Dotdash is now reported as its own segment (it was previously included in the Publishing segment, which has been eliminated); and |
• | the Company's Other segment has been renamed, Emerging & Other, and the businesses previously included in the Video segment (other than Vimeo) and the Publishing segment (other than Dotdash) are now included in the Emerging & Other segment. |
• | Ask Media Group, a collection of websites providing general search services and information; |
• | BlueCrew, an on-demand staffing platform that connects temporary workers with traditional blue-collar jobs in areas like warehouse, delivery and moving, data entry and customer service; |
• | The Daily Beast, a website dedicated to news, commentary, culture and entertainment that publishes original reporting and opinion from its roster of full-time journalists and contributors; |
• | College Humor Media, a provider of digital content, including its recently launched subscription only property, Dropout.tv; and |
• | IAC Films, a provider of production and producer services for feature films, primarily for initial sale and distribution through theatrical releases and video-on-demand services in the United States and internationally. |
• | For periods prior to their sales: |
◦ | CityGrid, an advertising network that integrated local content and advertising for distribution to affiliated and third-party publishers across web and mobile platforms, sold December 31, 2018. |
◦ | Dictionary.com, an online and mobile dictionary and thesaurus service, sold November 13, 2018. |
◦ | Electus, including Notional, a provider of production and producer services for both unscripted and scripted television and digital content, primarily for initial sale and distribution in the United States, sold October 29, 2018. |
◦ | The Princeton Review, a provider of educational test preparation, academic tutoring and college counseling services, sold on March 31, 2017. |
◦ | ShoeBuy, an Internet retailer of footwear and related apparel and accessories, sold December 30, 2016. |
◦ | ASKfm, a questions and answers social network, sold June 30, 2016. |
◦ | PriceRunner, a shopping comparison website, sold March 18, 2016. |
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 |
• | MTCH's October 1, 2018 market capitalization of $15.7 billion exceeded its carrying value by approximately $15.1 billion and MTCH's strong operating performance. |
• | ANGI's October 1, 2018 market capitalization of $10.7 billion exceeded its carrying value by approximately $9.6 billion and ANGI's strong operating performance. |
• | The Company performed valuations of the Vimeo, College Humor Media and BlueCrew reporting units during 2018. 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, 2018. The fair value of each of these businesses was in excess of its October 1, 2018 carrying value. |
• | Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets. |
• | Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market 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 6—Financial Instruments" for a discussion of fair value measurements made using Level 3 inputs. |
• | Within ANGI, the effect of the adoption of ASU No. 2014-09 is that commissions paid to employees pursuant to certain sales incentive programs, which represent the incremental direct costs of obtaining a service professional contract, are now capitalized and amortized over the estimated life of a service professional (also referred to as the estimated customer relationship period). These costs were expensed as incurred prior to January 1, 2018. The cumulative effect of the adoption of ASU No. 2014-09 was the establishment of a current and non-current asset for capitalized sales commissions of $29.7 million and $4.2 million, respectively, and a related deferred tax liability of $8.0 million, resulting in a net increase to retained earnings of $25.9 million on January 1, 2018. |
• | Within Applications, the primary effect of the adoption of ASU No. 2014-09 is to accelerate the recognition of the portion of the revenue of certain desktop applications sold by SlimWare that qualifies as functional intellectual property ("functional IP") under ASU No. 2014-09. This revenue was previously deferred and recognized over the applicable subscription term. The cumulative effect of the adoption of ASU No. 2014-09 for SlimWare was a reduction in deferred revenue of $20.3 million and the establishment of a deferred tax liability of $4.9 million, resulting in a net increase to retained earnings of $15.5 million on January 1, 2018. |
Under ASC 606 (as reported) | Under ASC 605 | Effect of adoption of ASU No. 2014-09 | |||||||||
(In thousands) | |||||||||||
Revenue by segment: | |||||||||||
Match Group | $ | 1,729,850 | $ | 1,729,850 | $ | — | |||||
ANGI Homeservices | 1,132,241 | 1,132,241 | — | ||||||||
Vimeo | 159,641 | 160,931 | (1,290 | ) | |||||||
Dotdash | 130,991 | 130,991 | — | ||||||||
Applications | 582,287 | 581,492 | 795 | ||||||||
Emerging & Other | 528,250 | 528,250 | — | ||||||||
Inter-segment eliminations | (368 | ) | (368 | ) | — | ||||||
Total | $ | 4,262,892 | $ | 4,263,387 | $ | (495 | ) | ||||
Operating costs and expenses by segment: | |||||||||||
Match Group | $ | 1,176,556 | $ | 1,176,556 | $ | — | |||||
ANGI Homeservices | 1,068,335 | 1,073,275 | (4,940 | ) | |||||||
Vimeo | 195,235 | 196,212 | (977 | ) | |||||||
Dotdash | 112,213 | 112,213 | — | ||||||||
Applications | 487,453 | 484,644 | 2,809 | ||||||||
Emerging & Other | 498,286 | 498,286 | — | ||||||||
Corporate | 159,675 | 159,675 | — | ||||||||
Total | $ | 3,697,753 | $ | 3,700,861 | $ | (3,108 | ) | ||||
Operating income (loss) by segment: | |||||||||||
Match Group | $ | 553,294 | $ | 553,294 | $ | — | |||||
ANGI Homeservices | 63,906 | 58,966 | 4,940 | ||||||||
Vimeo | (35,594 | ) | (35,281 | ) | (313 | ) | |||||
Dotdash | 18,778 | 18,778 | — | ||||||||
Applications | 94,834 | 96,848 | (2,014 | ) | |||||||
Emerging & Other | 29,964 | 29,964 | — | ||||||||
Corporate | (160,043 | ) | (160,043 | ) | — | ||||||
Total | $ | 565,139 | $ | 562,526 | $ | 2,613 | |||||
Net earnings | $ | 757,747 | $ | 755,741 | $ | 2,006 |
December 31, 2018 | December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||||
(In thousands) | |||||||||||||||
Cash and cash equivalents | $ | 2,131,632 | $ | 1,630,809 | $ | 1,329,187 | $ | 1,481,447 | |||||||
Restricted cash included in other current assets | 1,633 | 2,873 | 20,464 | 126 | |||||||||||
Restricted cash included in other assets | 420 | — | 10,548 | 20,100 | |||||||||||
Total cash, cash equivalents and restricted cash as shown on the consolidated statement of cash flows | $ | 2,133,685 | $ | 1,633,682 | $ | 1,360,199 | $ | 1,501,673 |
• | the Company has selected a software solution to implement ASU No. 2016-02; |
• | the Company has input lease summaries into the software solution; |
• | 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 internal controls related to the new standard. |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
U.S. | $ | 630,417 | $ | (52,606 | ) | $ | (248,433 | ) | |||
Foreign | 131,141 | 119,564 | 167,348 | ||||||||
Total | $ | 761,558 | $ | 66,958 | $ | (81,085 | ) |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Current income tax provision (benefit): | |||||||||||
Federal | $ | (2,849 | ) | $ | (31,844 | ) | $ | 23,343 | |||
State | 2,569 | 1,964 | 3,662 | ||||||||
Foreign | 38,770 | 24,108 | 27,242 | ||||||||
Current income tax provision (benefit) | 38,490 | (5,772 | ) | 54,247 | |||||||
Deferred income tax provision (benefit): | |||||||||||
Federal | (21,792 | ) | (255,477 | ) | (100,798 | ) | |||||
State | 172 | (28,364 | ) | (9,518 | ) | ||||||
Foreign | (13,059 | ) | (1,437 | ) | (8,865 | ) | |||||
Deferred income tax benefit | (34,679 | ) | (285,278 | ) | (119,181 | ) | |||||
Income tax provision (benefit) | $ | 3,811 | $ | (291,050 | ) | $ | (64,934 | ) |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Income taxes receivable (payable): | |||||||
Other current assets | $ | 10,132 | $ | 33,239 | |||
Other non-current assets | 11,401 | 1,949 | |||||
Accrued expenses and other current liabilities | (12,745 | ) | (11,798 | ) | |||
Income taxes payable | (37,584 | ) | (25,624 | ) | |||
Net income taxes payable | $ | (28,796 | ) | $ | (2,234 | ) | |
Deferred tax assets (liabilities): | |||||||
Other non-current assets | $ | 64,786 | $ | 66,321 | |||
Deferred income taxes | (23,600 | ) | (35,070 | ) | |||
Net deferred tax assets | $ | 41,186 | $ | 31,251 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Accrued expenses | $ | 23,525 | $ | 22,234 | |||
NOL carryforwards | 291,639 | 292,812 | |||||
Tax credit carryforwards | 89,397 | 78,715 | |||||
Stock-based compensation | 82,698 | 77,976 | |||||
Other | 30,106 | 42,331 | |||||
Total deferred tax assets | 517,365 | 514,068 | |||||
Less valuation allowance | (115,853 | ) | (132,598 | ) | |||
Net deferred tax assets | 401,512 | 381,470 | |||||
Deferred tax liabilities: | |||||||
Investment in subsidiaries | (238,650 | ) | (247,167 | ) | |||
Intangibles | (77,669 | ) | (87,811 | ) | |||
Fair value investment | (22,927 | ) | — | ||||
Other | (21,080 | ) | (15,241 | ) | |||
Total deferred tax liabilities | (360,326 | ) | (350,219 | ) | |||
Net deferred tax assets | $ | 41,186 | $ | 31,251 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Income tax provision (benefit) at the federal statutory rate of 21% (35% for 2017 and 2016) | $ | 159,927 | $ | 23,435 | $ | (28,446 | ) | ||||
State income taxes, net of effect of federal tax benefit | 14,887 | 86 | (3,880 | ) | |||||||
Stock-based compensation | (129,654 | ) | (358,901 | ) | 3,998 | ||||||
Realization of certain deferred tax assets | (13,200 | ) | (3,133 | ) | — | ||||||
Transition tax | (9,190 | ) | 62,667 | — | |||||||
Deferred tax adjustment for enacted changes in tax laws and rates | (7,488 | ) | 705 | (4,594 | ) | ||||||
Research credit | (4,023 | ) | (5,304 | ) | (2,231 | ) | |||||
Foreign income taxed at a different statutory tax rate | (3,206 | ) | (14,725 | ) | (27,115 | ) | |||||
Non-taxable sale and non-deductible goodwill associated with ShoeBuy | — | — | (13,142 | ) | |||||||
Goodwill impairment of Dotdash and Emerging & Other | — | — | 10,649 | ||||||||
Non-deductible impairments for certain cost method investments | — | 2,669 | 3,489 | ||||||||
Other, net | (4,242 | ) | 1,451 | (3,662 | ) | ||||||
Income tax provision (benefit) | $ | 3,811 | $ | (291,050 | ) | $ | (64,934 | ) |
December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | 36,732 | $ | 38,372 | $ | 40,808 | |||||
Additions based on tax positions related to the current year | 10,334 | 2,050 | 2,033 | ||||||||
Additions for tax positions of prior years | 4,716 | 1,994 | 2,676 | ||||||||
Reductions for tax positions of prior years | (400 | ) | (3,761 | ) | (743 | ) | |||||
Settlements | — | — | (5,107 | ) | |||||||
Expiration of applicable statutes of limitations | (2,507 | ) | (1,923 | ) | (1,295 | ) | |||||
Balance at December 31 | $ | 48,875 | $ | 36,732 | $ | 38,372 |
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 |
Years Ended December 31, | |||||||
2017 | 2016 | ||||||
(In thousands, except per share data) | |||||||
Revenue | $ | 3,529,600 | $ | 3,429,105 | |||
Net earnings (loss) attributable to ANGI Homeservices Inc. shareholders | $ | 364,496 | $ | (143,133 | ) | ||
Basic earnings (loss) per share attributable to ANGI Homeservices Inc. shareholders | $ | 4.55 | $ | (1.79 | ) | ||
Diluted earnings (loss) per share attributable to ANGI Homeservices Inc. shareholders | $ | 4.27 | $ | (1.79 | ) |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Goodwill | $ | 2,726,859 | $ | 2,559,066 | |||
Intangible assets with indefinite lives | 458,104 | 459,143 | |||||
Intangible assets with definite lives, net of accumulated amortization | 173,318 | 204,594 | |||||
Total goodwill and intangible assets, net | $ | 3,358,281 | $ | 3,222,803 |
Balance at December 31, 2017 | Additions | (Deductions) | Transfers In/(Out) | Foreign Exchange Translation | Balance at December 31, 2018 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Match Group | $ | 1,247,899 | $ | 11,187 | $ | — | $ | — | $ | (14,073 | ) | $ | 1,245,013 | ||||||||||
ANGI Homeservices | 768,317 | 142,768 | (14,373 | ) | — | (3,912 | ) | 892,800 | |||||||||||||||
Vimeo | 77,303 | — | (151 | ) | — | — | 77,152 | ||||||||||||||||
Applications: | |||||||||||||||||||||||
Desktop | 265,146 | — | — | — | — | 265,146 | |||||||||||||||||
Mosaic Group | 182,096 | 50,784 | — | 7,323 | (457 | ) | 239,746 | ||||||||||||||||
Total Applications | 447,242 | 50,784 | — | 7,323 | (457 | ) | 504,892 | ||||||||||||||||
Emerging & Other | 18,305 | 3,684 | (7,664 | ) | (7,323 | ) | — | 7,002 | |||||||||||||||
Total | $ | 2,559,066 | $ | 208,423 | $ | (22,188 | ) | $ | — | $ | (18,442 | ) | $ | 2,726,859 |
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 | ||||||||||||||
Vimeo | 9,649 | 67,654 | — | — | 77,303 | ||||||||||||||
Applications: | |||||||||||||||||||
Desktop | 265,146 | — | — | — | 265,146 | ||||||||||||||
Mosaic Group | 182,096 | — | — | — | 182,096 | ||||||||||||||
Total Applications | 447,242 | — | — | — | 447,242 | ||||||||||||||
Emerging & Other | 90,012 | 2,715 | (74,430 | ) | 8 | 18,305 | |||||||||||||
Total | $ | 1,924,052 | $ | 661,396 | $ | (74,430 | ) | $ | 48,048 | $ | 2,559,066 |
December 31, 2018 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Weighted-Average Useful Life (Years) | ||||||||||
(In thousands) | |||||||||||||
Technology | $ | 143,303 | $ | (53,199 | ) | $ | 90,104 | 4.7 | |||||
Service professional and contractor relationships | 99,528 | (44,674 | ) | 54,854 | 2.9 | ||||||||
Customer lists and user base | 30,099 | (15,126 | ) | 14,973 | 2.9 | ||||||||
Memberships | 15,900 | (6,640 | ) | 9,260 | 3.0 | ||||||||
Trade names | 12,393 | (9,393 | ) | 3,000 | 3.3 | ||||||||
Other | 8,500 | (7,373 | ) | 1,127 | 4.8 | ||||||||
Total | $ | 309,723 | $ | (136,405 | ) | $ | 173,318 | 3.8 |
December 31, 2017 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Weighted-Average Useful Life (Years) | ||||||||||
(In thousands) | |||||||||||||
Technology | $ | 115,200 | $ | (37,357 | ) | $ | 77,843 | 4.8 | |||||
Service professional and contractor relationships | 99,497 | (11,452 | ) | 88,045 | 3.0 | ||||||||
Customer lists and user base | 23,468 | (5,401 | ) | 18,067 | 2.2 | ||||||||
Memberships | 15,900 | (1,340 | ) | 14,560 | 3.0 | ||||||||
Trade names | 16,986 | (13,634 | ) | 3,352 | 2.6 | ||||||||
Other | 8,500 | (5,773 | ) | 2,727 | 4.8 | ||||||||
Total | $ | 279,551 | $ | (74,957 | ) | $ | 204,594 | 3.7 |
Years Ending December 31, | (In thousands) | ||
2019 | $ | 71,155 | |
2020 | 51,916 | ||
2021 | 19,433 | ||
2022 | 16,310 | ||
2023 | 10,239 | ||
Thereafter | 4,265 | ||
Total | $ | 173,318 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Available-for-sale marketable debt securities | $ | 123,246 | $ | 4,995 | |||
Marketable equity security | 419 | — | |||||
Total marketable securities | $ | 123,665 | $ | 4,995 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Treasury discount notes | $ | 112,291 | $ | 3 | $ | (3 | ) | $ | 112,291 | ||||||
Commercial paper | 10,955 | — | — | 10,955 | |||||||||||
Total available-for-sale marketable debt securities | $ | 123,246 | $ | 3 | $ | (3 | ) | $ | 123,246 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Commercial paper | $ | 4,995 | $ | — | $ | — | $ | 4,995 | |||||||
Total available-for-sale marketable debt securities | $ | 4,995 | $ | — | $ | — | $ | 4,995 |
December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Proceeds from maturities and sales of available-for-sale marketable debt securities | $ | 333,600 | $ | 114,350 | $ | 279,485 | |||||
Gross realized gains | — | — | 3,556 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Equity securities without readily determinable fair values | $ | 235,055 | $ | — | |||
Equity method investments | — | 1,559 | |||||
Cost method investments | — | 63,418 | |||||
Total long-term investments | $ | 235,055 | $ | 64,977 |
Year Ended December 31, 2018 | ||||
(In thousands) | ||||
Upward adjustments (gross unrealized gains) | $ | 128,986 | ||
Downward adjustments including impairments (gross unrealized losses) | (4,931 | ) | ||
Total | $ | 124,055 |
Year Ended December 31, 2018 | ||||
(In thousands) | ||||
Realized gains, net, for equity securities sold | $ | 27,874 | ||
Unrealized gains, net, on equity securities held | 124,170 | |||
Total gains recognized, net, in other income (expense), net | $ | 152,044 |
December 31, 2018 | |||||||||||||||
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 | $ | 880,815 | $ | — | $ | — | $ | 880,815 | |||||||
Treasury discount notes | — | 561,733 | — | 561,733 | |||||||||||
Commercial paper | — | 162,417 | — | 162,417 | |||||||||||
Time deposits | — | 90,036 | — | 90,036 | |||||||||||
Marketable securities: | |||||||||||||||
Treasury discount notes | — | 112,291 | — | 112,291 | |||||||||||
Commercial paper | — | 10,955 | — | 10,955 | |||||||||||
Marketable equity security | 419 | — | — | 419 | |||||||||||
Total | $ | 881,234 | $ | 937,432 | $ | — | $ | 1,818,666 | |||||||
Liabilities: | |||||||||||||||
Contingent consideration arrangements | $ | — | $ | — | $ | (28,631 | ) | $ | (28,631 | ) |
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 | |||||||
Commercial paper | — | 215,325 | — | 215,325 | |||||||||||
Treasury discount notes | — | 100,457 | — | 100,457 | |||||||||||
Time deposits | — | 60,000 | — | 60,000 | |||||||||||
Certificates of deposit | — | 6,195 | — | 6,195 | |||||||||||
Marketable securities: | |||||||||||||||
Commercial paper | — | 4,995 | — | 4,995 | |||||||||||
Total | $ | 780,425 | $ | 386,972 | $ | — | $ | 1,167,397 | |||||||
Liabilities: | |||||||||||||||
Contingent consideration arrangements | $ | — | $ | — | $ | (2,647 | ) | $ | (2,647 | ) |
Contingent Consideration Arrangements | |||||||
Years Ended December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Balance at January 1 | $ | (2,647 | ) | $ | (33,871 | ) | |
Total net (losses) gains: | |||||||
Included in earnings: | |||||||
Fair value adjustments | (1,456 | ) | (5,801 | ) | |||
Included in other comprehensive income (loss) | 45 | (1,404 | ) | ||||
Fair value at date of acquisition | (25,521 | ) | — | ||||
Settlements | 948 | 38,429 | |||||
Balance at December 31 | $ | (28,631 | ) | $ | (2,647 | ) |
December 31, 2018 | December 31, 2017 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Current portion of long-term debt | $ | (13,750 | ) | $ | (12,753 | ) | $ | (13,750 | ) | $ | (13,802 | ) | |||
Long-term debt, net(a) | (2,245,548 | ) | (2,460,204 | ) | (1,979,469 | ) | (2,168,108 | ) |
(a) | At December 31, 2018 and 2017, the carrying value of long-term debt, net includes unamortized original issue discount and debt issuance costs of $88.9 million and $109.1 million, respectively. |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
MTCH Debt: | |||||||
MTCH Term Loan due November 16, 2022 | $ | 425,000 | $ | 425,000 | |||
MTCH Credit Facility due December 7, 2023 | 260,000 | — | |||||
6.375% Senior Notes due June 1, 2024 (the "6.375% MTCH Senior Notes"); interest payable each June 1 and December 1 | 400,000 | 400,000 | |||||
5.00% Senior Notes due December 15, 2027 (the "5.00% MTCH Senior Notes"); interest payable each June 15 and December 15 | 450,000 | 450,000 | |||||
Total MTCH long-term debt | 1,535,000 | 1,275,000 | |||||
Less: unamortized original issue discount | 7,352 | 8,668 | |||||
Less: unamortized debt issuance costs | 11,737 | 13,636 | |||||
Total MTCH debt, net | 1,515,911 | 1,252,696 | |||||
ANGI Debt: | |||||||
ANGI Term Loan due November 5, 2023 | 261,250 | 275,000 | |||||
Less: current portion of ANGI Term Loan | 13,750 | 13,750 | |||||
Less: unamortized debt issuance costs | 2,529 | 2,938 | |||||
Total ANGI debt, net | 244,971 | 258,312 | |||||
IAC Debt: | |||||||
0.875% Exchangeable Senior Notes due October 1, 2022 (the "Exchangeable Notes"); interest payable each April 1 and October 1 | 517,500 | 517,500 | |||||
4.75% Senior Notes due December 15, 2022 (the "4.75% Senior Notes"); interest payable each June 15 and December 15 | 34,489 | 34,859 | |||||
Total IAC long-term debt | 551,989 | 552,359 | |||||
Less: unamortized original issue discount | 54,025 | 67,158 | |||||
Less: unamortized debt issuance costs | 13,298 | 16,740 | |||||
Total IAC debt, net | 484,666 | 468,461 | |||||
Total long-term debt, net | $ | 2,245,548 | $ | 1,979,469 |
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 | % |
Year | Percentage | |
2018 | 101.583 | % |
2019 | 100.792 | % |
2020 and thereafter | 100.000 | % |
Years Ending December 31, | (In thousands) | ||
2019 | $ | 13,750 | |
2020 | 13,750 | ||
2021 | 13,750 | ||
2022 | 1,004,489 | ||
2023 | 452,500 | ||
2024 | 400,000 | ||
2027 | 450,000 | ||
Total | 2,348,239 | ||
Less: current portion of long-term debt | 13,750 | ||
Less: unamortized original issue discount | 61,377 | ||
Less: unamortized debt issuance costs | 27,564 | ||
Total long-term debt, net | $ | 2,245,548 |
Year Ended December 31, 2018 | |||||||||||
Foreign Currency Translation Adjustment | Unrealized Gains On Available-For-Sale Securities | Accumulated Other Comprehensive Loss | |||||||||
(In thousands) | |||||||||||
Balance at January 1 | $ | (103,568 | ) | $ | — | $ | (103,568 | ) | |||
Other comprehensive (loss) income before reclassifications | (25,106 | ) | 4 | (25,102 | ) | ||||||
Amounts reclassified to earnings | (52 | ) | — | (52 | ) | ||||||
Net current period other comprehensive (loss) income | (25,158 | ) | 4 | (25,154 | ) | ||||||
Balance at December 31 | $ | (128,726 | ) | $ | 4 | $ | (128,722 | ) |
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 | ) | (3,360 | ) | ||||||
Net current period other comprehensive income (loss) | 66,581 | (4,026 | ) | 62,555 | |||||||
Balance at December 31 | $ | (103,568 | ) | $ | — | $ | (103,568 | ) |
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 | ) | 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 | ) |
Years Ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | |||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net earnings (loss) | $ | 757,747 | $ | 757,747 | $ | 358,008 | $ | 358,008 | $ | (16,151 | ) | $ | (16,151 | ) | |||||||||
Net earnings attributable to noncontrolling interests | (130,786 | ) | (130,786 | ) | (53,084 | ) | (53,084 | ) | (25,129 | ) | (25,129 | ) | |||||||||||
Impact from public subsidiaries' dilutive securities (a)(b) | — | (25,228 | ) | — | (33,531 | ) | — | — | |||||||||||||||
Net earnings (loss) attributable to IAC shareholders | $ | 626,961 | $ | 601,733 | $ | 304,924 | $ | 271,393 | $ | (41,280 | ) | $ | (41,280 | ) | |||||||||
Denominator: | |||||||||||||||||||||||
Weighted average basic shares outstanding | 83,407 | 83,407 | 80,089 | 80,089 | 80,045 | 80,045 | |||||||||||||||||
Dilutive securities (a) (b) (c) (d) (e) (f) (g) | — | 7,915 | — | 5,221 | — | — | |||||||||||||||||
Denominator for earnings per share—weighted average shares(a) (b) (c) (d) (e) (f) (g) | 83,407 | 91,322 | 80,089 | 85,310 | 80,045 | 80,045 | |||||||||||||||||
Earnings (loss) per share attributable to IAC shareholders: | |||||||||||||||||||||||
Earnings (loss) per share | $ | 7.52 | $ | 6.59 | $ | 3.81 | $ | 3.18 | $ | (0.52 | ) | $ | (0.52 | ) |
(a) | For the year ended December 31, 2018, it is more dilutive for IAC to settle certain MTCH equity awards. For the years ended December 31, 2017 and 2016, it is more dilutive for MTCH to settle certain MTCH equity awards. |
(b) | For the years ended December 31, 2018 and 2017, it is more dilutive for IAC to settle certain ANGI equity awards. The impact on earnings of ANGI 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, exchange of the Company's Exchangeable Notes and vesting of restricted stock units ("RSUs"). For the years ended December 31, 2018 and 2017, 3.5 million and 6.9 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 both the years ended December 31, 2018 and 2017, 0.1 million shares 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; 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 year ended December 31, 2018, the average price of IAC common stock exceeded $152.18 and the dilutive impact of the Exchangeable Notes was 0.3 million shares. For the year ended December 31, 2017, the Exchangeable Notes were anti-dilutive. |
(g) | See "Note 11—Stock-based Compensation" for additional information on equity instruments denominated in the shares of certain subsidiaries. |
December 31, 2018 | ||||||||||||
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, 2018 | 6,586 | $ | 60.57 | |||||||||
Granted | 80 | 152.53 | ||||||||||
Exercised | (774 | ) | 52.56 | |||||||||
Forfeited | (72 | ) | 57.52 | |||||||||
Expired | (6 | ) | 19.51 | |||||||||
Options outstanding at December 31, 2018 | 5,814 | $ | 62.97 | 6.1 | $ | 698,128 | ||||||
Options exercisable | 3,592 | $ | 59.64 | 5.3 | $ | 443,293 |
Options Outstanding | Options Exercisable | ||||||||||||||||
Range of Exercise Prices | Outstanding at December 31, 2018 | Weighted- Average Remaining Contractual Life in Years | Weighted- Average Exercise Price | Exercisable at December 31, 2018 | Weighted- Average Remaining Contractual Life in Years | Weighted- Average Exercise Price | |||||||||||
(Shares in thousands) | |||||||||||||||||
$20.01 to $30.00 | 30 | 1.1 | $ | 21.60 | 30 | 1.1 | $ | 21.60 | |||||||||
$30.01 to $40.00 | 389 | 2.3 | 32.30 | 389 | 2.3 | 32.30 | |||||||||||
$40.01 to $50.00 | 1,541 | 5.8 | 43.35 | 961 | 5.0 | 44.26 | |||||||||||
$50.01 to $60.00 | 246 | 3.2 | 59.85 | 244 | 3.2 | 59.86 | |||||||||||
$60.01 to $70.00 | 1,173 | 6.3 | 65.27 | 767 | 6.0 | 65.62 | |||||||||||
$70.01 to $80.00 | 1,840 | 7.4 | 75.33 | 822 | 6.8 | 74.72 | |||||||||||
$80.01 to $90.00 | 500 | 6.3 | 84.31 | 375 | 6.3 | 84.31 | |||||||||||
Greater than $90.01 | 95 | 9.1 | 148.30 | 4 | 8.9 | 125.08 | |||||||||||
5,814 | 6.1 | 62.97 | 3,592 | 5.3 | 59.64 |
Years Ended December 31, | ||||||||
2018 | 2017 | 2016 | ||||||
Expected volatility | 27 | % | 29 | % | 29 | % | ||
Risk-free interest rate | 2.7 | % | 2.0 | % | 1.2 | % | ||
Expected term | 6.2 years | 5.2 years | 4.8 years | |||||
Dividend yield | — | % | — | % | — | % |
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, 2018 | 360 | $ | 80.81 | 130 | $ | 76.00 | |||||||
Granted | 153 | 183.33 | 30 | 152.53 | |||||||||
Vested | (49 | ) | 78.54 | — | — | ||||||||
Forfeited | (5 | ) | 98.81 | (17 | ) | 76.00 | |||||||
Unvested at December 31, 2018 | 459 | $ | 115.12 | 143 | $ | 92.02 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Revenue: | |||||||||||
Match Group | $ | 1,729,850 | $ | 1,330,661 | $ | 1,118,110 | |||||
ANGI Homeservices | 1,132,241 | 736,386 | 498,890 | ||||||||
Vimeo | 159,641 | 103,332 | 78,805 | ||||||||
Dotdash | 130,991 | 90,890 | 77,913 | ||||||||
Applications | 582,287 | 577,998 | 604,140 | ||||||||
Emerging & Other | 528,250 | 468,589 | 762,609 | ||||||||
Inter-segment elimination | (368 | ) | (617 | ) | (585 | ) | |||||
Total | $ | 4,262,892 | $ | 3,307,239 | $ | 3,139,882 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Match Group | |||||||||||
Direct revenue: | |||||||||||
North America | $ | 902,478 | $ | 741,334 | $ | 673,944 | |||||
International | 774,693 | 539,915 | 393,420 | ||||||||
Direct revenue | 1,677,171 | 1,281,249 | 1,067,364 | ||||||||
Indirect revenue (principally advertising revenue) | 52,679 | 49,412 | 50,746 | ||||||||
Total Match Group revenue | $ | 1,729,850 | $ | 1,330,661 | $ | 1,118,110 | |||||
Supplemental information on Direct revenue | |||||||||||
Tinder | $ | 805,316 | $ | 403,216 | $ | 168,522 | |||||
Other brands | 871,855 | 878,033 | 898,842 | ||||||||
Total Direct revenue | $ | 1,677,171 | $ | 1,281,249 | $ | 1,067,364 | |||||
ANGI Homeservices | |||||||||||
Marketplace: | |||||||||||
Consumer connection revenue | $ | 704,341 | $ | 521,481 | $ | 382,466 | |||||
Membership subscription revenue | 66,214 | 56,135 | 43,573 | ||||||||
Other revenue | 3,940 | 3,798 | 2,827 | ||||||||
Marketplace revenue | 774,495 | 581,414 | 428,866 | ||||||||
Advertising and other revenue | 287,676 | 97,483 | 32,981 | ||||||||
North America | 1,062,171 | 678,897 | 461,847 | ||||||||
Consumer connection revenue | 50,913 | 40,009 | 28,124 | ||||||||
Membership subscription revenue | 17,362 | 16,596 | 7,936 | ||||||||
Advertising and other revenue | 1,795 | 884 | 983 | ||||||||
Europe | 70,070 | 57,489 | 37,043 | ||||||||
Total ANGI Homeservices revenue | $ | 1,132,241 | $ | 736,386 | $ | 498,890 | |||||
Vimeo | |||||||||||
Platform revenue | $ | 146,665 | $ | 99,650 | $ | 78,805 | |||||
Hardware revenue | 12,976 | 3,682 | — |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Total Vimeo revenue | $ | 159,641 | $ | 103,332 | $ | 78,805 | |||||
Dotdash | |||||||||||
Advertising revenue | $ | 113,014 | $ | 81,948 | $ | 76,099 | |||||
Affiliate commerce commission revenue | 14,458 | 7,372 | 1,685 | ||||||||
Other revenue | 3,519 | 1,570 | 129 | ||||||||
Total Dotdash revenue | $ | 130,991 | $ | 90,890 | $ | 77,913 | |||||
Applications | |||||||||||
Desktop | |||||||||||
Advertising revenue: | |||||||||||
Google advertising revenue | $ | 426,964 | $ | 480,774 | $ | 523,335 | |||||
Other | 10,992 | 6,762 | 10,037 | ||||||||
Advertising revenue | 437,956 | 487,536 | 533,372 | ||||||||
Subscription and other revenue | 20,815 | 34,613 | 29,943 | ||||||||
Total Desktop | 458,771 | 522,149 | 563,315 | ||||||||
Mosaic Group | |||||||||||
Subscription and other revenue | 104,975 | 27,980 | 21,787 | ||||||||
Advertising revenue | 18,541 | 27,869 | 19,038 | ||||||||
Total Mosaic Group | 123,516 | 55,849 | 40,825 | ||||||||
Total Applications revenue | $ | 582,287 | $ | 577,998 | $ | 604,140 | |||||
Emerging & Other | |||||||||||
Advertising revenue: | |||||||||||
Google advertising revenue | $ | 357,752 | $ | 225,576 | $ | 269,192 | |||||
Other | 66,733 | 53,911 | 75,008 | ||||||||
Advertising revenue | 424,485 | 279,487 | 344,200 | ||||||||
Other revenue | 103,765 | 169,497 | 160,329 | ||||||||
Test preparation revenue | — | 19,605 | 86,517 | ||||||||
Product revenue | — | — | 171,563 | ||||||||
Total Emerging & Other revenue | $ | 528,250 | $ | 468,589 | $ | 762,609 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Revenue | |||||||||||
United States | $ | 2,824,928 | $ | 2,323,050 | $ | 2,318,976 | |||||
All other countries | 1,437,964 | 984,189 | 820,906 | ||||||||
Total | $ | 4,262,892 | $ | 3,307,239 | $ | 3,139,882 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Long-lived assets (excluding goodwill and intangible assets) | |||||||
United States | $ | 289,756 | $ | 286,541 | |||
All other countries | 29,044 | 28,629 | |||||
Total | $ | 318,800 | $ | 315,170 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Operating Income (Loss): | |||||||||||
Match Group | $ | 553,294 | $ | 360,517 | $ | 315,549 | |||||
ANGI Homeservices | 63,906 | (149,176 | ) | 25,363 | |||||||
Vimeo | (35,594 | ) | (27,328 | ) | (25,350 | ) | |||||
Dotdash | 18,778 | (15,694 | ) | (248,705 | ) | ||||||
Applications | 94,834 | 130,176 | 109,663 | ||||||||
Emerging & Other | 29,964 | 17,412 | (99,696 | ) | |||||||
Corporate | (160,043 | ) | (127,441 | ) | (109,449 | ) | |||||
Total | $ | 565,139 | $ | 188,466 | $ | (32,625 | ) |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Adjusted EBITDA:(a) | |||||||||||
Match Group | $ | 653,931 | $ | 468,941 | $ | 403,380 | |||||
ANGI Homeservices | $ | 247,506 | $ | 37,858 | $ | 45,851 | |||||
Vimeo | $ | (28,045 | ) | $ | (23,607 | ) | $ | (20,281 | ) | ||
Dotdash | $ | 21,384 | $ | (2,763 | ) | $ | (16,846 | ) | |||
Applications | $ | 131,837 | $ | 136,757 | $ | 132,276 | |||||
Emerging & Other | $ | 36,178 | $ | 25,862 | $ | 10,111 | |||||
Corporate | $ | (74,017 | ) | $ | (67,755 | ) | $ | (53,272 | ) |
Year Ended December 31, 2018 | |||||||||||||||||||||||
Operating Income (Loss) | Stock-Based Compensation Expense | Depreciation | Amortization of Intangibles | Acquisition-related Contingent Consideration Fair Value Adjustments | Adjusted EBITDA | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Match Group | $ | 553,294 | $ | 66,031 | $ | 32,968 | $ | 1,318 | $ | 320 | $ | 653,931 | |||||||||||
ANGI Homeservices | 63,906 | $ | 97,078 | $ | 24,310 | $ | 62,212 | $ | — | $ | 247,506 | ||||||||||||
Vimeo | (35,594 | ) | $ | — | $ | 1,200 | $ | 6,349 | $ | — | $ | (28,045 | ) | ||||||||||
Dotdash | 18,778 | $ | — | $ | 969 | $ | 1,637 | $ | — | $ | 21,384 | ||||||||||||
Applications | 94,834 | $ | — | $ | 2,601 | $ | 33,266 | $ | 1,136 | $ | 131,837 | ||||||||||||
Emerging & Other | 29,964 | $ | 919 | $ | 1,678 | $ | 3,617 | $ | — | $ | 36,178 | ||||||||||||
Corporate | (160,043 | ) | $ | 74,392 | $ | 11,634 | $ | — | $ | — | $ | (74,017 | ) | ||||||||||
Total | 565,139 | ||||||||||||||||||||||
Interest expense | (109,327 | ) | |||||||||||||||||||||
Other income, net | 305,746 | ||||||||||||||||||||||
Earnings before income taxes | 761,558 | ||||||||||||||||||||||
Income tax provision | (3,811 | ) | |||||||||||||||||||||
Net earnings | 757,747 | ||||||||||||||||||||||
Net earnings attributable to noncontrolling interests | (130,786 | ) | |||||||||||||||||||||
Net earnings attributable to IAC shareholders | $ | 626,961 |
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 | ||||||||||||
Vimeo | (27,328 | ) | $ | — | $ | 1,408 | $ | 2,313 | $ | — | $ | (23,607 | ) | |||||||||||
Dotdash | (15,694 | ) | $ | — | $ | 2,255 | $ | 10,676 | $ | — | $ | (2,763 | ) | |||||||||||
Applications | 130,176 | $ | — | $ | 3,863 | $ | 2,170 | 548 | — | $ | 136,757 | |||||||||||||
Emerging & Other | 17,412 | $ | 2,130 | $ | 4,065 | $ | 2,255 | $ | — | $ | 25,862 | |||||||||||||
Corporate | (127,441 | ) | $ | 44,168 | $ | 15,518 | $ | — | $ | — | $ | (67,755 | ) | |||||||||||
Total | 188,466 | |||||||||||||||||||||||
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 | ||||||||||||||
Vimeo | (25,350 | ) | $ | — | $ | 1,085 | $ | 4,176 | $ | (192 | ) | $ | — | $ | (20,281 | ) | |||||||||||
Dotdash | (248,705 | ) | $ | — | $ | 2,775 | $ | 30,754 | $ | — | $ | 198,330 | $ | (16,846 | ) | ||||||||||||
Applications | 109,663 | $ | — | $ | 5,095 | $ | 5,483 | $ | 12,035 | $ | — | $ | 132,276 | ||||||||||||||
Emerging & Other | (99,696 | ) | $ | 1,258 | $ | 12,675 | $ | 18,928 | $ | (91 | ) | $ | 77,037 | $ | 10,111 | ||||||||||||
Corporate | (109,449 | ) | $ | 42,276 | $ | 13,901 | $ | — | $ | — | $ | — | $ | (53,272 | ) | ||||||||||||
Total | (32,625 | ) | |||||||||||||||||||||||||
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 | ) |
December 31, 2018 | |||||||||||||||||||||||
Segment Assets (b) | Property and Equipment, Net | Goodwill | Indefinite-Lived Intangible Assets | Definite-Lived Intangible Assets, Net | Total Assets | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Match Group | $ | 377,965 | $ | 58,351 | $ | 1,245,013 | $ | 230,684 | $ | 6,956 | $ | 1,918,969 | |||||||||||
ANGI Homeservices | 497,327 | 70,859 | 892,800 | 171,486 | 132,809 | 1,765,281 | |||||||||||||||||
Vimeo | 33,568 | 1,014 | 77,152 | — | 9,442 | 121,176 | |||||||||||||||||
Dotdash | 39,276 | 3,229 | — | 13,500 | 1,514 | 57,519 | |||||||||||||||||
Applications | 153,781 | 4,867 | 504,892 | 39,463 | 22,447 | 725,450 | |||||||||||||||||
Emerging & Other | 95,858 | 1,638 | 7,002 | 2,971 | 150 | 107,619 | |||||||||||||||||
Corporate (c) | 1,934,943 | 178,842 | — | — | — | 2,113,785 | |||||||||||||||||
Total | $ | 3,132,718 | $ | 318,800 | $ | 2,726,859 | $ | 458,104 | $ | 173,318 | 6,809,799 | ||||||||||||
Add: Deferred tax assets (d) | 64,786 | ||||||||||||||||||||||
Total Assets | $ | 6,874,585 |
December 31, 2017 | |||||||||||||||||||||||
Segment Assets (b) | 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 | |||||||||||||||||
Vimeo | 30,507 | 1,972 | 77,303 | — | 15,655 | 125,437 | |||||||||||||||||
Dotdash | 27,190 | 4,077 | — | 6,000 | 3,152 | 40,419 | |||||||||||||||||
Applications | 345,532 | 7,004 | 447,242 | 60,600 | 847 | 861,225 | |||||||||||||||||
Emerging & Other | 255,107 | 2,377 | 18,305 | 10,800 | 7,767 | 294,356 | |||||||||||||||||
Corporate (c) | 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 (d) | 66,321 | ||||||||||||||||||||||
Total Assets | $ | 5,867,810 |
(c) | Corporate assets consist primarily of cash and cash equivalents, marketable securities and IAC's headquarters building. |
(d) | Total segment assets differ from total assets on a consolidated basis as a result of unallocated deferred tax assets. |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Capital expenditures: | |||||||||||
Match Group | $ | 30,954 | $ | 28,833 | $ | 46,098 | |||||
ANGI Homeservices | 46,976 | 26,837 | 16,660 | ||||||||
Vimeo | 209 | 109 | 1,959 | ||||||||
Dotdash | 102 | 825 | 1,671 | ||||||||
Applications | 111 | 227 | 1,196 | ||||||||
Emerging & Other | 1,119 | 852 | 6,683 | ||||||||
Corporate | 6,163 | 17,840 | 3,772 | ||||||||
Total | $ | 85,634 | $ | 75,523 | $ | 78,039 |
Years Ending December 31, | (In thousands) | |||
2019 | $ | 38,770 | ||
2020 | 46,440 | |||
2021 | 40,998 | |||
2022 | 34,066 | |||
2023 | 30,567 | |||
Thereafter | 255,563 | |||
Total | $ | 446,404 |
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 | $ | 40,428 | $ | 23,897 | $ | — | $ | — | $ | 64,325 | |||||||||
Letters of credit and surety bonds | 449 | — | — | 2,272 | 2,721 | ||||||||||||||
Total commercial commitments | $ | 40,877 | $ | 23,897 | $ | — | $ | 2,272 | $ | 67,046 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash paid (received) during the year for: | |||||||||||
Interest | $ | 90,485 | $ | 92,461 | $ | 107,360 | |||||
Income tax payments | 45,154 | 35,598 | 69,103 | ||||||||
Income tax refunds | (33,698 | ) | (42,025 | ) | (23,877 | ) |
• | A Master Transaction Agreement, under which MTCH 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 MTCH 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 MTCH common stock and (ii) anti-dilution rights with respect to MTCH common stock; |
• | An Employee Matters Agreement, which governs the respective rights, responsibilities and obligations of IAC and MTCH 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 MTCH 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 MTCH, 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 MTCH may agree, and MTCH agrees to provide IAC informational technology services and such other services as to which IAC and MTCH 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 prior to the Combination. Under the Contribution Agreement, ANGI agrees to indemnify IAC against any losses arising out of any breach by ANGI of the Contribution Agreement; |
• | An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of ANGI common stock owned by IAC; (ii) anti-dilution rights with respect to ANGI common stock; and (iii) specified board matters with respect to designation of ANGI directors; |
• | A Services Agreement, under which IAC has agreed to provide a range of services to ANGI, 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 |
• | A Tax Sharing Agreement, which governs the respective rights, responsibilities and obligations of IAC and ANGI with respect to tax matters, including taxes attributable to ANGI, 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 after the closing of the Combination with respect to a range of compensation and benefit issues. |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Other current assets: | |||||||
Capitalized costs to obtain a contract with a customer | $ | 69,817 | $ | — | |||
Prepaid expenses | 55,586 | 49,350 | |||||
Capitalized downloadable search toolbar costs, net | 33,365 | 31,588 | |||||
Income taxes receivable | 10,132 | 33,239 | |||||
Production costs | 2,260 | 18,570 | |||||
Other | 57,093 | 52,627 | |||||
Other current assets | $ | 228,253 | $ | 185,374 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Property and equipment, net of accumulated depreciation and amortization: | |||||||
Buildings and leasehold improvements | $ | 249,026 | $ | 246,038 | |||
Computer equipment and capitalized software | 229,083 | 218,529 | |||||
Furniture and other equipment | 86,694 | 88,930 | |||||
Projects in progress | 29,204 | 19,094 | |||||
Land | 11,591 | 14,390 | |||||
Property and equipment | 605,598 | 586,981 | |||||
Accumulated depreciation and amortization | (286,798 | ) | (271,811 | ) | |||
Property and equipment, net of accumulated depreciation and amortization | $ | 318,800 | $ | 315,170 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Accrued expenses and other current liabilities: | |||||||
Accrued employee compensation and benefits | $ | 137,583 | $ | 108,431 | |||
Accrued advertising expense | 105,520 | 96,445 | |||||
Other | 191,783 | 162,048 | |||||
Accrued expenses and other current liabilities | $ | 434,886 | $ | 366,924 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Revenue: | |||||||||||
Service revenue | $ | 4,249,227 | $ | 3,302,937 | $ | 2,967,474 | |||||
Product revenue | 13,665 | 4,302 | 172,408 | ||||||||
Revenue | $ | 4,262,892 | $ | 3,307,239 | $ | 3,139,882 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cost of revenue: | |||||||||||
Cost of service revenue | $ | 898,736 | $ | 647,226 | $ | 617,058 | |||||
Cost of product revenue | 12,410 | 3,782 | 138,672 | ||||||||
Cost of revenue | $ | 911,146 | $ | 651,008 | $ | 755,730 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Other income (expense), net | $ | 305,746 | $ | (16,213 | ) | $ | 60,650 |
Years Ended December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Transaction and integration related costs | $ | 3,584 | $ | 44,101 | |||
Stock-based compensation expense | 70,645 | 122,066 | |||||
Total | $ | 74,229 | $ | 166,167 |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Accrual as of January 1 | $ | 8,480 | $ | — | |||
Costs incurred | 3,584 | 44,101 | |||||
Payments made | (12,064 | ) | (35,621 | ) | |||
Accrual as of December 31 | $ | — | $ | 8,480 |
Year Ended December 31, 2018 | |||||||||||
Integration Related Costs | Stock-based Compensation Expense | Total | |||||||||
(In thousands) | |||||||||||
Cost of revenue | $ | — | $ | — | $ | — | |||||
Selling and marketing expense | — | 2,161 | 2,161 | ||||||||
General and administrative expense | 3,584 | 61,010 | 64,594 | ||||||||
Product development expense | — | 7,474 | 7,474 | ||||||||
Total | $ | 3,584 | $ | 70,645 | $ | 74,229 |
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 | $ | 1,018,082 | $ | — | $ | 1,113,550 | $ | — | $ | 2,131,632 | |||||||||
Marketable securities | 98,299 | — | 25,366 | — | 123,665 | ||||||||||||||
Accounts receivable, net of allowance and reserves | — | 99,970 | 179,219 | — | 279,189 | ||||||||||||||
Other current assets | 27,349 | 29,222 | 171,682 | — | 228,253 | ||||||||||||||
Intercompany receivables | — | 1,423,456 | — | (1,423,456 | ) | — | |||||||||||||
Property and equipment, net of accumulated depreciation and amortization | 6,526 | 163,281 | 148,993 | — | 318,800 | ||||||||||||||
Goodwill | — | 412,009 | 2,314,850 | — | 2,726,859 | ||||||||||||||
Intangible assets, net of accumulated amortization | — | 43,914 | 587,508 | — | 631,422 | ||||||||||||||
Investment in subsidiaries | 1,897,699 | 214,519 | — | (2,112,218 | ) | — | |||||||||||||
Other non-current assets | 274,789 | 94,290 | 251,315 | (185,629 | ) | 434,765 | |||||||||||||
Total assets | $ | 3,322,744 | $ | 2,480,661 | $ | 4,792,483 | $ | (3,721,303 | ) | $ | 6,874,585 | ||||||||
Current portion of long-term debt | $ | — | $ | — | $ | 13,750 | $ | — | $ | 13,750 | |||||||||
Accounts payable, trade | 1,304 | 36,293 | 37,310 | — | 74,907 | ||||||||||||||
Other current liabilities | 41,721 | 95,405 | 657,775 | — | 794,901 | ||||||||||||||
Long-term debt, net | 34,262 | — | 2,211,286 | — | 2,245,548 | ||||||||||||||
Income taxes payable | 15 | 1,707 | 35,862 | — | 37,584 | ||||||||||||||
Intercompany liabilities | 402,056 | — | 1,021,400 | (1,423,456 | ) | — | |||||||||||||
Other long-term liabilities | 261 | 18,181 | 257,594 | (185,629 | ) | 90,407 | |||||||||||||
Redeemable noncontrolling interests | — | — | 65,687 | — | 65,687 | ||||||||||||||
Shareholders' equity (deficit) | 2,843,125 | 2,329,075 | (216,857 | ) | (2,112,218 | ) | 2,843,125 | ||||||||||||
Noncontrolling interests | — | — | 708,676 | — | 708,676 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 3,322,744 | $ | 2,480,661 | $ | 4,792,483 | $ | (3,721,303 | ) | $ | 6,874,585 |
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 and reserves | 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 | 2,077,898 | 554,998 | — | (2,632,896 | ) | — | |||||||||||||
Other non-current assets | 170,073 | 87,306 | 79,688 | (132,435 | ) | 204,632 | |||||||||||||
Total assets | $ | 2,890,606 | $ | 2,114,868 | $ | 4,296,370 | $ | (3,434,034 | ) | $ | 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 | 390,827 | — | 277,876 | (668,703 | ) | — | |||||||||||||
Other long-term liabilities | 511 | 18,613 | 186,610 | (132,435 | ) | 73,299 | |||||||||||||
Redeemable noncontrolling interests | — | — | 42,867 | — | 42,867 | ||||||||||||||
Shareholders' equity | 2,430,028 | 1,976,131 | 656,765 | (2,632,896 | ) | 2,430,028 | |||||||||||||
Noncontrolling interests | — | — | 516,795 | — | 516,795 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 2,890,606 | $ | 2,114,868 | $ | 4,296,370 | $ | (3,434,034 | ) | $ | 5,867,810 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | — | $ | 850,475 | $ | 3,412,795 | $ | (378 | ) | $ | 4,262,892 | ||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 195 | 262,912 | 648,330 | (291 | ) | 911,146 | |||||||||||||
Selling and marketing expense | 977 | 313,769 | 1,204,844 | (150 | ) | 1,519,440 | |||||||||||||
General and administrative expense | 141,727 | 49,563 | 582,720 | 69 | 774,079 | ||||||||||||||
Product development expense | 2,003 | 56,431 | 250,901 | (6 | ) | 309,329 | |||||||||||||
Depreciation | 1,203 | 12,497 | 61,660 | — | 75,360 | ||||||||||||||
Amortization of intangibles | — | 29,437 | 78,962 | — | 108,399 | ||||||||||||||
Total operating costs and expenses | 146,105 | 724,609 | 2,827,417 | (378 | ) | 3,697,753 | |||||||||||||
Operating (loss) income | (146,105 | ) | 125,866 | 585,378 | — | 565,139 | |||||||||||||
Equity in earnings of unconsolidated affiliates | 731,834 | 20,083 | — | (751,917 | ) | — | |||||||||||||
Interest expense | (1,700 | ) | — | (107,627 | ) | — | (109,327 | ) | |||||||||||
Other (expense) income, net (a) | (18,834 | ) | 503,261 | 199,757 | (378,438 | ) | 305,746 | ||||||||||||
Earnings before income taxes | 565,195 | 649,210 | 677,508 | (1,130,355 | ) | 761,558 | |||||||||||||
Income tax benefit (provision) | 61,766 | (56,612 | ) | (8,965 | ) | — | (3,811 | ) | |||||||||||
Net earnings | 626,961 | 592,598 | 668,543 | (1,130,355 | ) | 757,747 | |||||||||||||
Net earnings attributable to noncontrolling interests | — | — | (130,786 | ) | — | (130,786 | ) | ||||||||||||
Net earnings attributable to IAC shareholders | $ | 626,961 | $ | 592,598 | $ | 537,757 | $ | (1,130,355 | ) | $ | 626,961 | ||||||||
Comprehensive income attributable to IAC shareholders | $ | 601,683 | $ | 601,232 | $ | 515,766 | $ | (1,116,998 | ) | $ | 601,683 |
(a) | During the year ended December 31, 2018, foreign cash of $396.2 million was repatriated to the U.S, of which $25.2 million was between non-guarantor subsidiaries. |
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 | 419,149 | 20,755 | — | (439,904 | ) | — | |||||||||||||
Interest expense | (20,339 | ) | — | (84,956 | ) | — | (105,295 | ) | |||||||||||
Other (expense) income, net | (30,787 | ) | 28,434 | (13,860 | ) | — | (16,213 | ) | |||||||||||
Earnings before income taxes | 262,391 | 140,920 | 103,551 | (439,904 | ) | 66,958 | |||||||||||||
Income tax benefit (provision) | 42,533 | (119,957 | ) | 368,474 | — | 291,050 | |||||||||||||
Net earnings | 304,924 | 20,963 | 472,025 | (439,904 | ) | 358,008 | |||||||||||||
Net earnings attributable to noncontrolling interests | — | — | (53,084 | ) | — | (53,084 | ) | ||||||||||||
Net earnings attributable to IAC shareholders | $ | 304,924 | $ | 20,963 | $ | 418,941 | $ | (439,904 | ) | $ | 304,924 | ||||||||
Comprehensive income attributable to IAC shareholders | $ | 367,370 | $ | 7,629 | $ | 498,032 | $ | (505,661 | ) | $ | 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) | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (38,737 | ) | $ | 583,498 | $ | 822,227 | $ | (378,860 | ) | $ | 988,128 | |||||||
Cash flows from investing activities: | |||||||||||||||||||
Acquisitions, net of cash acquired | (4,142 | ) | (50,530 | ) | (9,824 | ) | — | (64,496 | ) | ||||||||||
Capital expenditures | (5,274 | ) | (1,396 | ) | (78,964 | ) | — | (85,634 | ) | ||||||||||
Proceeds from maturities and sales of marketable debt securities | 298,600 | — | 35,000 | — | 333,600 | ||||||||||||||
Purchases of marketable debt securities | (390,005 | ) | — | (59,671 | ) | — | (449,676 | ) | |||||||||||
Net proceeds from the sale of businesses and investments | 408 | 87,254 | 49,057 | — | 136,719 | ||||||||||||||
Purchases of investments | (39,180 | ) | — | (13,800 | ) | — | (52,980 | ) | |||||||||||
Other, net | (5,000 | ) | 7,451 | 6,576 | — | 9,027 | |||||||||||||
Net cash (used in) provided by investing activities | (144,593 | ) | 42,779 | (71,626 | ) | — | (173,440 | ) | |||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Repurchases of IAC debt | (363 | ) | — | — | — | (363 | ) | ||||||||||||
Proceeds from issuance of Match Group debt | — | — | 260,000 | — | 260,000 | ||||||||||||||
Principal payments on ANGI Homeservices Term Loan | — | — | (13,750 | ) | — | (13,750 | ) | ||||||||||||
Debt issuance costs | — | — | (5,449 | ) | — | (5,449 | ) | ||||||||||||
Purchase of IAC treasury stock | (82,891 | ) | — | — | — | (82,891 | ) | ||||||||||||
Purchase of Match Group treasury stock | — | — | (133,455 | ) | — | (133,455 | ) | ||||||||||||
Proceeds from the exercise of IAC stock options | 41,700 | — | — | — | 41,700 | ||||||||||||||
Proceeds from the exercise of Match Group and ANGI Homeservices stock options | — | — | 4,705 | — | 4,705 | ||||||||||||||
Withholding taxes paid on behalf of IAC employees on net settled stock-based awards | (18,982 | ) | — | — | — | (18,982 | ) | ||||||||||||
Withholding taxes paid on behalf of Match Group and ANGI Homeservices employees on net settled stock-based awards | — | — | (237,564 | ) | — | (237,564 | ) | ||||||||||||
Dividends paid to Match Group noncontrolling interests | — | — | (105,126 | ) | — | (105,126 | ) | ||||||||||||
Purchase of noncontrolling interests | — | — | (16,063 | ) | — | (16,063 | ) | ||||||||||||
Acquisition-related contingent consideration payments | — | — | (185 | ) | — | (185 | ) | ||||||||||||
Intercompany | 673,308 | (625,338 | ) | (426,830 | ) | 378,860 | — | ||||||||||||
Other, net | 2,674 | (939 | ) | (7,110 | ) | — | (5,375 | ) | |||||||||||
Net cash provided by (used in) financing activities | 615,446 | (626,277 | ) | (680,827 | ) | 378,860 | (312,798 | ) | |||||||||||
Total cash provided | 432,116 | — | 69,774 | — | 501,890 | ||||||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 327 | — | (2,214 | ) | — | (1,887 | ) | ||||||||||||
Net increase in cash, cash equivalents, and restricted cash | 432,443 | — | 67,560 | — | 500,003 | ||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 585,639 | — | 1,048,043 | — | 1,633,682 | ||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 1,018,082 | $ | — | $ | 1,115,603 | $ | — | $ | 2,133,685 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | IAC Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (52,582 | ) | $ | 131,700 | $ | 337,581 | $ | 416,699 | ||||||
Cash flows from investing activities: | |||||||||||||||
Acquisitions, net of cash acquired | — | (2,550 | ) | (144,003 | ) | (146,553 | ) | ||||||||
Capital expenditures | (337 | ) | (1,169 | ) | (74,017 | ) | (75,523 | ) | |||||||
Proceeds from maturities and sales of marketable debt securities | 114,350 | — | — | 114,350 | |||||||||||
Purchases of marketable debt securities | (29,891 | ) | — | — | (29,891 | ) | |||||||||
Net proceeds from the sale of businesses and investments | 1,266 | — | 184,512 | 185,778 | |||||||||||
Purchases of investments | — | — | (9,106 | ) | (9,106 | ) | |||||||||
Other, net | — | 1,944 | 1,050 | 2,994 | |||||||||||
Net cash provided by (used in) investing activities | 85,388 | (1,775 | ) | (41,564 | ) | 42,049 | |||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from issuance of IAC debt | — | — | 517,500 | 517,500 | |||||||||||
Repurchases of 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 | |||||||||||
Proceeds from the exercise of Match Group and ANGI Homeservices stock options | — | — | 61,095 | 61,095 | |||||||||||
Withholding taxes paid on behalf of IAC employees on net settled stock-based awards | (93,832 | ) | — | — | (93,832 | ) | |||||||||
Withholding taxes paid on behalf of Match Group and ANGI Homeservices employees on net settled stock-based awards | — | — | (264,323 | ) | (264,323 | ) | |||||||||
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 | ) | |||||||||
Intercompany | 416,396 | (129,925 | ) | (286,471 | ) | — | |||||||||
Other, net | 251 | — | (5,251 | ) | (5,000 | ) | |||||||||
Net cash used in financing activities | (21,026 | ) | (129,925 | ) | (45,918 | ) | (196,869 | ) | |||||||
Total cash provided | 11,780 | — | 250,099 | 261,879 | |||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 75 | — | 11,529 | 11,604 | |||||||||||
Net increase in cash, cash equivalents, and restricted cash | 11,855 | — | 261,628 | 273,483 | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 573,784 | — | 786,415 | 1,360,199 | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 585,639 | $ | — | $ | 1,048,043 | $ | 1,633,682 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (62,686 | ) | $ | 128,503 | $ | 278,421 | $ | — | $ | 344,238 | ||||||||
Cash flows from investing activities: | |||||||||||||||||||
Acquisitions, net of cash acquired | — | — | (18,403 | ) | — | (18,403 | ) | ||||||||||||
Capital expenditures | (479 | ) | (5,792 | ) | (71,768 | ) | — | (78,039 | ) | ||||||||||
Proceeds from maturities and sales of marketable debt securities | 252,369 | — | — | — | 252,369 | ||||||||||||||
Purchases of marketable debt securities | (313,943 | ) | — | — | — | (313,943 | ) | ||||||||||||
Investments in time deposits | — | — | (87,500 | ) | — | (87,500 | ) | ||||||||||||
Proceeds from maturities of time deposits | — | — | 87,500 | — | 87,500 | ||||||||||||||
Net proceeds from the sale of businesses and investments | 73,843 | 1,779 | 96,606 | — | 172,228 | ||||||||||||||
Purchases of investments | — | — | (12,565 | ) | — | (12,565 | ) | ||||||||||||
Intercompany | (155,104 | ) | — | — | 155,104 | — | |||||||||||||
Other, net | 126 | 910 | 10,179 | — | 11,215 | ||||||||||||||
Net cash (used in) provided by investing activities | (143,188 | ) | (3,103 | ) | 4,049 | 155,104 | 12,862 | ||||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Repurchases of 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 | ||||||||||||||
Proceeds from the exercise of Match Group stock options | — | — | 39,378 | — | 39,378 | ||||||||||||||
Withholding taxes paid on behalf of IAC employees on net settled stock-based awards | (26,716 | ) | — | — | — | (26,716 | ) | ||||||||||||
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 | ) | |||||||||||
Intercompany | 122,965 | (122,965 | ) | 155,104 | (155,104 | ) | — | ||||||||||||
Other, net | (313 | ) | (2,084 | ) | (308 | ) | — | (2,705 | ) | ||||||||||
Net cash (used in) provided by financing activities | (315,000 | ) | (125,400 | ) | 103,364 | (155,104 | ) | (492,140 | ) | ||||||||||
Total cash (used) provided | (520,874 | ) | — | 385,834 | — | (135,040 | ) | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | — | — | (6,434 | ) | — | (6,434 | ) | ||||||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (520,874 | ) | — | 379,400 | — | (141,474 | ) | ||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 1,094,658 | — | 407,015 | — | 1,501,673 | ||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 573,784 | $ | — | $ | 786,415 | $ | — | $ | 1,360,199 |
Quarter Ended March 31 (a) | Quarter Ended June 30 (b) | Quarter Ended September 30 (c) | Quarter Ended December 31(d) | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||
Revenue | $ | 995,075 | $ | 1,059,122 | $ | 1,104,592 | $ | 1,104,103 | |||||||
Cost of revenue | 201,962 | 218,224 | 237,238 | 253,722 | |||||||||||
Operating income | 89,950 | 168,437 | 172,832 | 133,920 | |||||||||||
Net earnings | 87,839 | 280,854 | 171,577 | 217,477 | |||||||||||
Net earnings attributable to IAC shareholders | 71,082 | 218,353 | 145,774 | 191,752 | |||||||||||
Per share information attributable to IAC shareholders: | |||||||||||||||
Basic earnings per share(g) | $ | 0.86 | $ | 2.61 | $ | 1.75 | $ | 2.29 | |||||||
Diluted earnings per share(g) | $ | 0.71 | $ | 2.32 | $ | 1.49 | $ | 2.04 | |||||||
Quarter Ended March 31 | Quarter Ended June 30 | Quarter Ended September 30(e) | Quarter Ended December 31(f) | ||||||||||||
(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(g) | $ | 0.34 | $ | 0.84 | $ | 2.22 | $ | 0.40 | |||||||
Diluted earnings per share(g) | $ | 0.29 | $ | 0.70 | $ | 1.79 | $ | 0.37 |
(a) | The first quarter of 2018 includes after-tax stock-based compensation expense of $14.6 million related to the modification of previously issued HomeAdvisor equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination, and the acceleration of certain converted equity awards resulting from the termination of Angie's List employees in connection with the Combination, as well as after-tax costs of $4.1 million related to the Combination (including $2.8 million of deferred revenue write-offs). |
(b) | The second quarter of 2018 includes: |
i. | after-tax stock-based compensation expense of $12.8 million related to the modification of previously issued HomeAdvisor equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination, and the acceleration of certain converted equity awards resulting from the termination of Angie's List employees in connection with the Combination, as well as after-tax costs of $2.0 million related to the Combination (including $1.8 million of deferred revenue write-offs). |
ii. | after-tax realized and unrealized gains of $133.3 million related to the sale of a certain equity investment. |
(c) | The third quarter of 2018 includes after-tax stock-based compensation expense of $12.3 million related to the modification of previously issued HomeAdvisor equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination. |
(d) | The fourth quarter of 2018 includes: |
i. | after-tax stock-based compensation expense of $14.4 million related to the modification of previously issued HomeAdvisor equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination. |
ii. | combined after-tax gains of $92.5 million related to the sales of Dictionary.com, Electus, Felix and CityGrid. |
iii. | after-tax impairment charges related to indefinite-lived intangible assets of $21.3 million. |
(e) | The third quarter of 2017 includes: |
i. | after-tax stock-based compensation expense of $60.9 million related 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. |
ii. | 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. |
(f) | The fourth quarter of 2017 includes after-tax stock-based compensation expense of $15.8 million related 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). |
(g) | 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. | ||||
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. | ||||
3.5 | Certificate of Designations of Series D 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. | ||||
4.2 | 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. | ||||
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 for 6.375% Senior Notes, dated June 1, 2016, between Match Group, Inc. and Computershare Trust Company, N.A., as Trustee. | ||||
4.5 | Indenture for 5.00% Senior Notes, dated as of December 4, 2017, between Match Group, Inc. and Computershare Trust Company, N.A., as Trustee. | ||||
4.6 | 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 | ||||
10.1 | 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 2018 Stock and Annual Incentive Plan.(1) |
Form of Terms and Conditions for Stock Options granted under the IAC/InterActiveCorp 2018 Stock and Annual Incentive Plan.(1)(2) | |||||
Form of Terms and Conditions for Restricted Stock Units granted under the IAC/InterActiveCorp 2018 Stock and Annual Incentive Plan.(1)(2) | |||||
10.7 | IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan.(1) | ||||
10.8 | Form of Terms and Conditions for Stock Options granted under the IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan.(1) | ||||
10.9 | Form of Terms and Conditions for Restricted Stock Units granted under the IAC/InterActiveCorp 2013 Stock and Annual Incentive Plan.(1) | ||||
10.10 | IAC/InterActiveCorp 2008 Stock and Annual Incentive Plan.(1) | ||||
10.11 | Form of Terms and Conditions for Stock Options granted under the IAC/InterActiveCorp 2008 Stock and Annual Incentive Plan.(1) | ||||
10.12 | Form of Terms and Conditions for Restricted Stock Units granted under the IAC/InterActiveCorp 2008 Stock and Annual Incentive Plan.(1) | ||||
10.13 | IAC/InterActiveCorp 2005 Stock and Annual Incentive Plan.(1) | ||||
10.14 | Form of Terms and Conditions for Stock Options granted under the IAC/InterActiveCorp 2005 Stock and Annual Incentive Plan.(1) | ||||
10.15 | Summary of Non-Employee Director Compensation Arrangements.(1) | ||||
10.16 | 2011 IAC/InterActiveCorp Deferred Compensation Plan for Non-Employee Directors.(1) |
10.17 | Equity and Bonus Compensation Arrangement, dated as of August 24, 1995, between Barry Diller and the Registrant. | ||||
10.18 | Employment Agreement between Joseph Levin and the Registrant, dated as of November 21, 2017.(1) | ||||
10.19 | Second Amended and Restated Employment Agreement between Victor A. Kaufman and the Registrant, dated as of March 15, 2012.(1) | ||||
10.20 | Employment Agreement between Glenn H. Schiffman and the Registrant, dated as of April 7, 2016.(1) | ||||
10.21 | Employment Agreement between Mark Stein and the Registrant, dated as of June 28, 2018.(1) | ||||
10.22 | Employment Agreement between Gregg Winiarski and the Registrant, dated as of February 26, 2010.(1) | ||||
10.23 | Google Services Agreement, dated as of October 26, 2015, between the Registrant and Google Inc.(3) |
10.24 | Second Amended and Restated Credit Agreement, dated as of November 5, 2018, by and among IAC Group, LLC, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. | ||||
10.25 | 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. | ||||
10.26 | 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. | ||||
10.27 | 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. | ||||
10.28 | Amendment No. 5, dated as of December 7, 2018, 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 and as further amended August 14, 2017, among Match Group, Inc., as Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto. | ||||
10.29 | Amended and Restated Credit Agreement, dated as of November 5, 2018, by and among ANGI Homeservices Inc., the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. | ||||
10.30 | Master Transaction Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc.. | ||||
10.31 | Employee Matters Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.32 | Amendment No.1 to Employee Matters Agreement, dated as of April 13, 2016, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.33 | Investor Rights Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.34 | Tax Sharing Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.35 | Services Agreement, dated as of November 24, 2015, by and between IAC/InterActiveCorp and Match Group, Inc. | ||||
10.36 | Contribution Agreement, dated as of September 29, 2017, by and between IAC/InterActiveCorp and ANGI Homeservices Inc. | ||||
10.37 | Employee Matters Agreement, dated as of September 29, 2017, by and between IAC/InterActiveCorp and ANGI Homeservices Inc. |
10.38 | Investor Rights Agreement, dated as of September 29, 2017, by and between IAC/InterActiveCorp and ANGI Homeservices Inc. | ||||
10.39 | Tax Sharing Agreement, dated as of September 29, 2017, by and between IAC/InterActiveCorp and ANGI Homeservices Inc. | ||||
10.40 | 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, 2018.(2) | |||||
Consent of Ernst & Young LLP.(2) | |||||
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.(2) | |||||
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.(2) | |||||
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.(2) |
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 (2) | |||
101.SCH | XBRL Taxonomy Extension Schema (2) | |||
101.CAL | XBRL Taxonomy Extension Calculation (2) | |||
101.DEF | XBRL Taxonomy Extension Definition (2) | |||
101.LAB | XBRL Taxonomy Extension Labels (2) | |||
101.PRE | XBRL Taxonomy Extension Presentation (2) |
(1) | Reflects management contracts and management and director compensatory plans. |
(2) | Filed herewith. |
(3) | Certain portions of this document have been omitted pursuant to a confidential treatment request. |
(4) | Furnished herewith. |
March 1, 2019 | 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) | |||||||||||||||||||
2018 | |||||||||||||||||||
Allowance for doubtful accounts and revenue reserves | $ | 11,489 | $ | 48,445 | (a) | $ | (573 | ) | $ | (40,501 | ) | (d) | $ | 18,860 | |||||
Deferred tax valuation allowance | 132,598 | (20,746 | ) | (b) | 4,001 | (c) | — | 115,853 | |||||||||||
Other reserves | 2,544 | 7,734 | |||||||||||||||||
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 | (e) | 6,284 | (f) | — | 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 | ) | (g) | (1,475 | ) | (h) | — | 88,170 | ||||||||||
Other reserves | 2,801 | 2,822 |
(a) | Additions to the allowance for doubtful accounts are charged to expense. Additions to the revenue reserves are charged against revenue. |
(b) | Amount is primarily related to a decrease in foreign tax credits subject to a valuation allowance and the realization of previously unbenefited capital losses, partially offset by an increase in state net operating losses and foreign interest deduction carryforwards. |
(c) | Amount is primarily related to acquired federal and state NOLs, partially offset by currency translation adjustments on foreign NOLs. |
(d) | Write-off of fully reserved accounts receivable. |
(e) | Amount is due primarily to the establishment of foreign NOLs related to an acquisition. |
(f) | Amount is primarily related to acquired state NOLs, acquired foreign tax credits and currency translation adjustments on foreign NOLs. |
(g) | 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. |
(h) | 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. |
Entity | Jurisdiction of Formation | |
24apps GmbH | Austria | |
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 | |
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 | |
BlueCrew, Inc. | Delaware | |
BlueCrew, LLC | Delaware | |
Buzz Technologies, Inc. | Washington | |
CH Pacific, LLC | Delaware | |
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 | |
Diamond Dogs, LLC | Delaware | |
Epic Enterprises LLC | New Jersey | |
Eureka SG Pte. Ltd. | Singapore | |
Eureka Taiwan | Taiwan | |
Eureka, Inc. | Japan | |
Exec, Inc. | Delaware | |
Falcon Holdings II, LLC | Delaware |
Entity | Jurisdiction of Formation | |
Five Star Matchmaking Information Technology (Beijing) Co., Ltd. | People’s Republic of China | |
FriendScout24 GmbH | Germany | |
Good Hang, LLC | Delaware | |
HABC Assets, LLC | Delaware | |
Handy Inventory, LLC | Delaware | |
Handy Platform Limited | Ireland | |
Handy Technologies, Inc. | Delaware | |
HandyBook Canada ULC | British Columbia | |
Hinge, Inc. | 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 | |
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 | |
IAC FinanceCo, Inc. | Delaware | |
IAC Group, LLC | Delaware | |
IAC Publishing Holding Limited Partnership | Ireland | |
IAC Publishing, LLC | Delaware | |
IAC Search & Media (Canada) Inc. | Canada |
Entity | Jurisdiction of Formation | |
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 | |
Inflight Entertainment, 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 | |
iTranslate GmbH | Germany | |
Life123, Inc. | Delaware | |
Livestream Inc. | Delaware | |
Livestream Limited | England and Wales | |
Livestream LLC | New York | |
M8 Singlesnet LLC | Delaware | |
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 |
Entity | Jurisdiction of Formation | |
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 | |
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 |
Entity | Jurisdiction of Formation | |
MyHammer AG | Germany | |
MyHammer Holding AG | Germany | |
Neu.de GmbH | Germany | |
Nexus Dating Limited | England and Wales | |
NRelate LLC | Delaware | |
Oportuna I, 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 | |
Pronto, LLC | Delaware | |
Publishing Partner, LLC | Delaware | |
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 | |
SpeedDate.com, LLC | Delaware | |
Spotlight Studios, LLC | Delaware | |
Stage Four, LLC | Delaware | |
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 | |
TelTech Systems, Inc. | Delaware | |
The Daily Beast Company LLC | Delaware | |
The IAC Foundation, Inc. | Delaware | |
Tinder Development, LLC | Delaware | |
Tinder, LLC | Delaware |
Entity | Jurisdiction of Formation | |
TMC Realty, L.L.C. | Delaware | |
TPR/Tutor Holdings, LLC | Delaware | |
Travaux.com S.à r.l. | France | |
USA Video Distribution LLC | Delaware | |
USANi LLC | Delaware | |
USANi Sub LLC | Delaware | |
VHX Corporation | Delaware | |
Vimeo FinanceCo, LLC | Delaware | |
Vimeo Technologies Private Limited | India | |
Vimeo, Inc. | Delaware | |
Wanderspot LLC | Washington | |
We are Mop! Limited | England and Wales | |
Werkspot BV | Netherlands |
1. | I have reviewed this report on Form 10-K for the fiscal year ended December 31, 2018 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, 2019 | /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, 2018 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, 2019 | /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, 2018 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, 2019 | /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, 2018 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, 2019 | /s/ BARRY DILLER | |
Barry Diller Chairman and Senior Executive |
(1) | the Annual Report on Form 10-K for the fiscal year ended December 31, 2018 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, 2019 | /s/ JOSEPH LEVIN | |
Joseph Levin Chief Executive Officer |
(1) | the Annual Report on Form 10-K for the fiscal year ended December 31, 2018 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, 2019 | /s/ GLENN H. SCHIFFMAN | |
Glenn H. Schiffman Executive Vice President and Chief Financial Officer |
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Feb. 01, 2019 |
Jun. 30, 2018 |
|
Document Information [Line Items] | |||
Entity Registrant Name | IAC/INTERACTIVECORP | ||
Entity Central Index Key | 0000891103 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
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 | $ 11,833,394,558 | ||
Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 77,986,305 | ||
Class B Convertible Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 5,789,499 |
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Allowance and reserves of accounts receivable | $ 18,860 | $ 11,489 |
Treasury stock (shares) | 194,708,000 | 194,163,000 |
Common Stock | ||
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock authorized (shares) | 1,600,000,000 | 1,600,000,000 |
Common stock issued (shares) | 262,303,000 | 260,624,000 |
Common stock outstanding (shares) | 77,963,000 | 76,829,000 |
Class B Convertible Common Stock | ||
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock authorized (shares) | 400,000,000 | 400,000,000 |
Common stock issued (shares) | 16,157,000 | 16,157,000 |
Common stock outstanding (shares) | 5,789,000 | 5,789,000 |
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenue | $ 1,104,103 | $ 1,104,592 | $ 1,059,122 | $ 995,075 | $ 950,585 | $ 828,434 | $ 767,387 | $ 760,833 | $ 4,262,892 | $ 3,307,239 | $ 3,139,882 |
Operating costs and expenses: | |||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 253,722 | 237,238 | 218,224 | 201,962 | 199,727 | 166,290 | 139,033 | 145,958 | 911,146 | 651,008 | 755,730 |
Selling and marketing expense | 1,519,440 | 1,381,221 | 1,247,097 | ||||||||
General and administrative expense | 774,079 | 719,257 | 530,446 | ||||||||
Product development expense | 309,329 | 250,879 | 212,765 | ||||||||
Depreciation | 75,360 | 74,265 | 71,676 | ||||||||
Amortization of intangibles | 108,399 | 42,143 | 79,426 | ||||||||
Goodwill impairment | 0 | 0 | 275,367 | ||||||||
Total operating costs and expenses | 3,697,753 | 3,118,773 | 3,172,507 | ||||||||
Operating income (loss) | 133,920 | 172,832 | 168,437 | 89,950 | 94,360 | (18,589) | 75,635 | 37,060 | 565,139 | 188,466 | (32,625) |
Interest expense | (109,327) | (105,295) | (109,110) | ||||||||
Other income (expense), net | 305,746 | (16,213) | 60,650 | ||||||||
Earnings (loss) before income taxes | 761,558 | 66,958 | (81,085) | ||||||||
Income tax (provision) benefit | (257,000) | (3,811) | 291,050 | 64,934 | |||||||
Net earnings (loss) | 217,477 | 171,577 | 280,854 | 87,839 | 23,349 | 225,639 | 80,557 | 28,463 | 757,747 | 358,008 | (16,151) |
Net earnings attributable to noncontrolling interests | (130,786) | (53,084) | (25,129) | ||||||||
Net earnings (loss) attributable to IAC shareholders | $ 191,752 | $ 145,774 | $ 218,353 | $ 71,082 | $ 32,804 | $ 179,643 | $ 66,268 | $ 26,209 | $ 626,961 | $ 304,924 | $ (41,280) |
Per share information attributable to IAC shareholders: | |||||||||||
Basic earnings (loss) per share (USD per share) | $ 2.29 | $ 1.75 | $ 2.61 | $ 0.86 | $ 0.40 | $ 2.22 | $ 0.84 | $ 0.34 | $ 7.52 | $ 3.81 | $ (0.52) |
Diluted earnings (loss) per share (USD per share) | $ 2.04 | $ 1.49 | $ 2.32 | $ 0.71 | $ 0.37 | $ 1.79 | $ 0.70 | $ 0.29 | $ 6.59 | $ 3.18 | $ (0.52) |
Stock-based compensation expense by function: | |||||||||||
Stock-based compensation expense | $ 238,420 | $ 264,618 | $ 104,820 | ||||||||
Cost of revenue | |||||||||||
Stock-based compensation expense by function: | |||||||||||
Stock-based compensation expense | 2,482 | 1,881 | 2,305 | ||||||||
Selling and marketing expense | |||||||||||
Stock-based compensation expense by function: | |||||||||||
Stock-based compensation expense | 7,943 | 31,318 | 6,000 | ||||||||
General and administrative expense | |||||||||||
Stock-based compensation expense by function: | |||||||||||
Stock-based compensation expense | 188,510 | 192,957 | 77,151 | ||||||||
Product development expense | |||||||||||
Stock-based compensation expense by function: | |||||||||||
Stock-based compensation expense | $ 39,485 | $ 38,462 | $ 19,364 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Change in unrealized gains and losses on available-for-sale securities, tax provision (benefit) | $ 0 | $ (3,846) | $ (884) |
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Common Stock | |||
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 | |
Class B Convertible Common Stock | |||
Common stock, par value (USD per share) | 0.001 | 0.001 | |
Common Stock | Common Stock | |||
Common stock, par value (USD per share) | 1.000 | 1.000 | $ 1.000 |
Common Stock | Class B Convertible Common Stock | |||
Common stock, par value (USD per share) | $ 1.000 | $ 1.000 | $ 1.000 |
ORGANIZATION |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION | ORGANIZATION IAC has majority ownership of both Match Group, which includes Tinder, Match, PlentyOfFish and OkCupid, and ANGI Homeservices, which includes HomeAdvisor, Angie’s List and Handy, and also operates Vimeo, Dotdash and The Daily Beast, among many other online businesses. As used herein, "IAC," the "Company," "we," "our" or "us" and similar terms refer to IAC/InterActiveCorp and its subsidiaries (unless the context requires otherwise). During the fourth quarter of 2018, the Company realigned its reportable segments as follows:
Match Group Our Match Group segment consists of the businesses and operations of Match Group, Inc. ("Match Group" or "MTCH"). MTCH completed its initial public offering ("IPO") on November 24, 2015. At December 31, 2018, IAC’s economic and voting interest in MTCH were 81.1% and 97.6%, respectively. MTCH is a leading provider of dating products available in over 40 languages to our users all over the world through applications and websites that we own and operate. MTCH operates a portfolio of dating brands, including Tinder, Match, PlentyOfFish, Meetic, OkCupid, OurTime, Pairs and Hinge, as well as a number of other brands, each designed to increase users likelihood of finding a meaningful connection. Through our portfolio of trusted brands, we provide tailored products to meet the varying preferences of our users. ANGI Homeservices Our ANGI Homeservices segment includes the North American (United States and Canada) and European businesses and operations of ANGI Homeservices Inc. ("ANGI"). On September 29, 2017, the Company's HomeAdvisor business and Angie's List Inc. ("Angie's List") combined under a new publicly traded company called ANGI Homeservices Inc. (the "Combination"). At December 31, 2018, IAC’s economic and voting interest in ANGI were 83.9% and 98.1%, respectively. ANGI connects millions of homeowners to home service professionals through its portfolio of digital home service brands, including HomeAdvisor®, Angie’s List® and Handy Technologies, Inc. ("Handy"). Combined, these leading marketplaces have collected more than 15 million reviews over the course of 20 years, allowing homeowners to research, match and connect on-demand to the largest network of service professionals online, through our mobile apps or by voice assistants. On October 19, 2018, ANGI acquired Handy, a leading platform in the United States for connecting people looking for household services (primarily cleaning and handyman services) with top-quality, pre-screened independent service professionals. ANGI also owns and operates mHelpDesk, a provider of cloud-based field service software for small to mid-size businesses, primarily sold today to HomeAdvisor service professionals, and CraftJack. Prior to its sale on December 31, 2018, ANGI also operated Felix, a pay-per-call advertising service business. In addition to its market-leading U.S. operations, ANGI owns leading home services online marketplaces in France (Travaux), Germany (MyHammer), Netherlands (Werkspot), United Kingdom (MyBuilder Limited or "MyBuilder," acquired a controlling interest on March 24, 2017), Canada (HomeStars Inc. or "HomeStars," acquired a controlling interest on February 8, 2017) and Italy (Instapro), as well as operations in Austria (MyHammer). Vimeo Vimeo operates a global video platform for creative professionals, marketers and enterprises to connect with their audiences, customers and employees. Vimeo provides cloud-based software products to stream, host, distribute and monetize videos online and across devices, as well as premium video tools on a subscription basis. Vimeo also sells live streaming accessories. Dotdash Dotdash is a portfolio of digital brands providing expert information and inspiration in select vertical content categories. Applications Our Applications segment consists of our Desktop business and Mosaic Group (previously referred to as Mobile), our mobile business. Through these businesses, we are a leading provider of global, advertising-driven desktop and subscription-based mobile applications. Through our Desktop business, we own and operate a portfolio of desktop browser applications that provide users with access to a wide variety of online content, tools and services. We provide users who download our desktop browser applications with new tab search services, as well as the option of default browser search services. We distribute our desktop browser applications to consumers free of charge on an opt-in basis directly through direct to consumer (primarily Chrome Web Store) and partnership distribution channels. Through Mosaic Group, we are a leading provider of global subscription mobile applications. Mosaic Group consists of the following businesses that we own and operate: Apalon, iTranslate, acquired in March 2018, TelTech, acquired in October 2018, and Daily Burn, transferred from the Emerging & Other segment effective April 1, 2018. Apalon is a leading mobile development company with one of the largest and most popular application portfolios worldwide. iTranslate develops and distributes applications that enable users to read, write, speak and learn foreign languages anywhere in the world. TelTech develops and distributes unique and innovative mobile communications applications that help protect consumer privacy. 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). Emerging & Other Our Emerging & Other segment primarily includes:
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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 and Consolidation The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"). 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. Accounting for Investments and Equity Securities 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 and are included in "Long-term investments" in the accompanying consolidated balance sheet. At December 31, 2018, the Company did not have any investments accounted for using the equity method. Investments in equity securities, other than those of our consolidated subsidiaries and those accounted for under the equity method, are accounted for at fair value or under the measurement alternative of Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, following its adoption on January 1, 2018, with any changes to fair value recognized within other income (expense), net each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer; value is generally determined based on a market approach as of the transaction date. An investment will be considered identical or similar if it has identical or similar rights to the equity investments held by the Company. The Company reviews its equity securities for impairment each reporting period when there are qualitative factors or events that indicate possible impairment. Factors we consider in making this determination include negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors. When indicators of impairment exist, the Company prepares quantitative assessments of the fair value of our equity securities, which require judgment and the use of estimates. When our assessment indicates that the fair value of the security is below the carrying value, the Company writes down the security to its fair value and records the corresponding charge within other income (expense), net. See "Accounting Pronouncements adopted by the Company" below for further information. 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 debt securities and equity securities without readily determinable fair values; 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; unrecognized tax benefits; 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 adopted the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, effective January 1, 2018 using the modified retrospective transition method for open contracts as of the date of initial application. See "Accounting Pronouncements adopted by the Company" below for further information. The Company accounts for a contract with a customer when it has approval and commitment from all parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised services or goods is transferred to our customers, and in an amount that reflects the consideration the Company is contractually due in exchange for those services or goods. Transaction Price The objective of determining the transaction price is to estimate the amount of consideration the Company is due in exchange for its services or goods, including amounts that are variable. The Company determines the total transaction price, including an estimate of any variable consideration, at contract inception and reassesses this estimate each reporting period. The Company excludes from the measurement of transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts are not included as a component of revenue or cost of revenue. For contracts that have an original duration of one year or less, the Company uses the practical expedient available under ASU No. 2014-09 applicable to such contracts and does not consider the time value of money. Arrangements with Multiple Performance Obligations The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers, which are directly observable or based on an estimate if not directly observable. For our multiple performance obligation arrangements that include functional intellectual property ("IP"), which comprise the downloadable apps and software of the Applications segment, the Company uses a residual approach to determine standalone selling prices for the functional IP. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company has determined that certain costs, primarily commissions paid to employees pursuant to certain sales incentive programs and mobile app store fees, meet the requirements to be capitalized as a cost of obtaining a contract. Commissions paid to employees pursuant to certain sales incentive programs are amortized over the estimated customer relationship period. The Company calculates the estimated customer relationship period as the average customer life, which is based on historical data. When customer renewals are expected and the renewal commission is not commensurate with the initial commission, the average customer life includes renewal periods. For sales incentive programs where the customer relationship period is one year or less, the Company has elected the practical expedient to expense the costs as incurred. The Company generally capitalizes and amortizes mobile app store fees over the term of the applicable subscription. During the year ended December 31, 2018, the Company recognized expense of $355.3 million related to the amortization of these costs. The current and non-current contract asset balances at December 31, 2018 are $69.8 million and $4.5 million, respectively. The current and non-current contract assets are included in "Other current assets" and "Other non-current assets," respectively, in the accompanying consolidated balance sheet. Performance Obligations As permitted under the practical expedient available under ASU No. 2014-09, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed. Match Group Match Group 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 credit card or through mobile app stores, and, subject to certain conditions identified in our terms and conditions, generally all purchases are final and nonrefundable. Revenue is initially deferred and is recognized using the straight-line method over the term of the applicable subscription period, which generally ranges from one to six months. Revenue is also earned from online advertising, the purchase of à la carte features and offline events. Online advertising revenue is recognized when an advertisement is displayed. Revenue from the purchase of à la carte features is recognized based on usage. Revenue associated with offline events is recognized when each event occurs. ANGI Homeservices ANGI revenue is primarily derived from (i) consumer connection revenue, which comprises fees paid by HomeAdvisor service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service) and booking fees from completed jobs sourced through the Handy platform, and (ii) membership subscription fees paid by HomeAdvisor service professionals. Consumer connection revenue varies based upon several factors, including the service requested, product experience offered and geographic location of service. The Company’s consumer connection revenue is generated and recognized when an in-network service professional is delivered a consumer match or when a job sourced through the Handy platform is completed. Membership subscription revenue from service professionals is initially deferred and is recognized using the straight-line method over the applicable subscription period, which is typically one year. Consumer connection revenue is generally billed one week following a consumer match, with payment due upon receipt of invoice or collected when a consumer schedules a job through the Handy platform. The Company maintains revenue reserves for potential credits for services provided by Handy service professionals to consumers. ANGI revenue is also derived from Angie's List (i) sales of time-based website, mobile and call center advertising to service professionals and (ii) membership subscription fees from consumers. 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. Angie's List website, mobile and call center advertising revenue is recognized ratably over the contract term. Revenue from the sale of advertising in the Angie’s List Magazine is recognized in the period in which the publication is distributed. Angie's List prepaid consumer membership subscription fees are recognized as revenue using the straight-line method over the term of the applicable subscription period, which is typically one year. Vimeo Vimeo revenue is derived primarily from annual and monthly SaaS subscription fees paid by creators for premium capabilities and, to a lesser extent, sales of live streaming hardware, software and professional services. Subscription revenue is recognized over the terms of the applicable subscription period, which are typically one month or one year. Dotdash Dotdash revenue consists principally of digital advertising revenue and affiliate commerce commission revenue. Digital advertising revenue is generated primarily through digital display advertisements sold directly and through programmatic advertising networks. Affiliate commerce commission revenue is generated when Dotdash refers users to commerce partner websites resulting in a purchase or transaction. Applications Desktop revenue largely 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 Desktop businesses is supplied to us by Google Inc. ("Google") pursuant to our services agreement with Google. Pursuant to this agreement, those of our Desktop 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 Desktop 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. The Company recognizes 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 lesser extent, Desktop revenue also includes fees related to subscription downloadable desktop applications as well as display advertisements. Fees related to subscription downloadable desktop applications are generally recognized over the term of the applicable subscription period, which is primarily one or two years. Fees related to display advertisements are recognized when an advertisement is displayed. Mosaic Group revenue consists primarily of fees related to subscription downloadable mobile applications distributed through the Apple App and Google Play stores, as well as display advertisements. Fees related to subscription downloadable mobile applications are generally recognized at the time of the sale when the software license is delivered. To the extent updates or maintenance is required or expected, revenue is recognized over the term of the applicable subscription period, which is primarily one or two years. Fees related to display advertisements are recognized when an advertisement is displayed. Emerging & Other Revenue of Ask Media Group consists principally of advertising revenue, which is generated primarily through the display of paid listings in response to search queries and display advertisements (sold directly and through programmatic ad sales). The majority of the paid listings displayed are supplied to us by Google in the manner, and pursuant to the services agreement with Google, described above under "Applications." The Daily Beast revenue consists of advertising revenue, which is generated primarily through display advertisements (sold directly and through programmatic ad sales). BlueCrew revenue consists of service revenue, which is generated through staffing temporary workers and recognized as control of the promised services is transferred to our customers. Revenue of College Humor Media and IAC Films is generated primarily through media production and distribution and advertising. Production revenue is recognized when control is transferred to the customer to broadcast or exhibit, and advertising revenue is recognized when an advertisement is displayed or over the advertising period. Accounts Receivables, Net of Allowance for Doubtful Accounts and Revenue Reserves Accounts receivable include amounts billed and currently due from customers. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of accounts receivable that will not be collected. The allowance for doubtful accounts is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history and the specific customer’s ability to pay its obligation. The time between the Company issuance of an invoice and payment due date is not significant; customer payments that are not collected in advance of the transfer of promised services or goods are generally due no later than 30 days from invoice date. The Company also maintains allowances to reserve for potential credits issued to consumers or other revenue adjustments. The amounts of these reserves are based primarily upon historical experience. Deferred Revenue Deferred revenue consists of advance payments that are received or are contractually due in advance of the Company's performance. The Company’s deferred revenue is reported on a contract by contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the term of the applicable subscription period or expected completion of our performance obligation is one year or less. The deferred revenue balance at January 1, 2018 is $332.2 million. During the year ended December 31, 2018, the Company recognized $330.2 million of revenue that was included in the deferred revenue balance as of January 1, 2018. The current and non-current deferred revenue balances at December 31, 2018 are $360.0 million and $1.7 million, respectively. Non-current deferred revenue is included in "Other long-term liabilities" in the accompanying consolidated balance sheet. 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, treasury discount notes, commercial paper rated A1/P1 or better, time deposits and certificates of deposit. Internationally, cash equivalents primarily consist of AAA rated government money market funds and time deposits. Investments in Debt Securities 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. Marketable debt securities are adjusted to fair value each quarter, and the unrealized gains and losses, net of tax, are included in accumulated other comprehensive income (loss) as a separate component of shareholders' equity. The specific-identification method is used to determine the cost of debt securities sold and the amount of unrealized gains and losses reclassified out of accumulated other comprehensive income (loss) into earnings. The Company also invests in non-marketable debt securities as part of its investment strategy. We review our debt securities for impairment each reporting period. The Company recognizes an unrealized loss on debt securities in net earnings when the impairment is determined to be other-than-temporary. Factors we consider in making such determination include the duration, severity and reason for the decline in value and the potential recovery and our intent to sell the debt security. We also consider whether we will be required to sell the security before recovery of its amortized cost basis and whether the amortized cost basis cannot be recovered because of credit losses. If an impairment is considered to be other-than-temporary, the debt security will be written down to its fair value and the loss will be recognized within other income (expense), net. At December 31, 2018, marketable debt securities consist of treasury discount notes and commercial paper rated A1/P1 or better. 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 Inc. ("Google"). For the years ended December 31, 2018, 2017 and 2016, consolidated revenue earned from Google was $825.2 million, $740.7 million and $824.4 million, representing 19%, 22% and 26%, respectively, of the Company's consolidated revenue. A meaningful portion of this revenue is attributable to the service agreement with Google and earned by the Desktop business within the Applications segment and the Ask Media Group within the Emerging & Other segment. For the years ended December 31, 2018, 2017 and 2016, revenue earned from Google represents 73%, 83% and 87% of Applications revenue and 94%, 96% and 96% of Ask Media Group revenue (and 68%, 48% and 35% of Emerging & Other revenue), respectively. Accounts receivable related to revenue earned from Google totaled $69.1 million and $72.4 million at December 31, 2018 and 2017, respectively. The services agreement became effective on April 1, 2016, following the expiration of the previous services agreement, and expires on March 31, 2020. 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. Google’s policy changes related to its Chrome browser became effective on September 12, 2018 and negatively impacted the distribution of our business-to-consumer ("B2C") desktop products. The impact of these changes on revenue and profits in 2018 were modest as the Company optimized marketing spend in anticipation of the changes. However, we expect these changes to reduce revenue and profits of the Desktop business in the future, which among other reasons led to a $27.7 million impairment of the related indefinite-lived intangible asset in the fourth quarter of 2018. See "Note 21—Subsequent Events (Unaudited)" for a discussion of the Company's amended services agreement with Google entered into on February 11, 2019. 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. 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 $58.1 million and $46.4 million at December 31, 2018 and 2017, 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 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 is 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 6—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 equal to the excess is recorded. For the Company's annual goodwill test at October 1, 2018, a qualitative assessment of the MTCH, ANGI, Vimeo, College Humor Media and BlueCrew 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 are described below:
The Company tests goodwill for impairment when it concludes that it is more likely than not that there may be an impairment. For the Company's annual goodwill test at October 1, 2018, the Company quantitatively tested the Desktop and Mosaic Group reporting units (included in the Applications segment). The Company's quantitative test indicated that the fair value of these reporting units are in excess of their respective carrying values; therefore, the goodwill of these reporting units are not impaired. The Company's Dotdash, Ask Media Group and The Daily Beast reporting units have no goodwill. The aggregate goodwill balance for the reporting units for which the most recent estimate of fair value is less than 110% of their carrying values is approximately $265.1 million. The fair value of the Company's reporting units (except for MTCH and ANGI described above) 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 non-public 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 the quantitative test for determining the fair value of the Company's reporting units ranged from 12.5% to 15% in 2018 and 12.5% to 17.5% in 2017. 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. The Company determines the fair value of indefinite-lived intangible assets using an avoided royalty DCF valuation analysis. Significant judgments inherent in this analysis 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 are intended to 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 10.5% to 35% in 2018 and 11% to 16% 2017, and the royalty rates used ranged from 0.75% to 8.0% in 2018 and 2% to 7% in 2017. The aggregate indefinite-lived intangible asset balance for which the most recent estimate of fair value is less than 110% of their carrying values is approximately $131.3 million. The 2018 annual assessment of goodwill did not identify any impairments. The 2018 annual assessment of indefinite-lived intangible assets identified impairment charges of $27.7 million and $1.1 million related to certain Desktop and College Humor Media indefinite-lived trade names, respectively. The indefinite-lived intangible asset impairment charge at Desktop was due to Google’s policy changes related to its Chrome browser which became effective on September 12, 2018 and have negatively impacted the distribution of our B2C downloadable desktop products. The impairment charge related to the B2C trade name was identified in our annual impairment assessment as of October 1, 2018 and reflects the projected reduction in profits and revenues and the resultant reduction in the assumed royalty rate from these policy changes. The impairment charges are included in "Amortization of intangibles" in the accompanying consolidated statement of operations. The 2017 annual assessments 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 an impairment charge equal to the entire $275.4 million at IAC Publishing. In connection with the Company's realignment of its reportable segments in the fourth quarter of 2018, $198.3 million and $77.0 million was allocated to the Dotdash and the Emerging & Other reportable segments, respectively, based upon their relative fair values as of October 1, 2018. In addition, amortization of intangibles was further impacted by the inclusion of impairment charges in 2016 of $9.0 million and $2.6 million related to certain Dictionary.com and Dotdash indefinite-lived trade names, respectively. The goodwill impairment charges at IAC Publishing was driven by the impact from the 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 IAC 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 IAC 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 IAC Publishing reporting unit. To determine a peer group of companies for IAC 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 charges 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. The Company’s operating segments are MTCH, ANGI, Vimeo, Dotdash and Applications, which are also reportable segments, and within its Emerging & Other reportable segment, Ask Media Group, BlueCrew, The Daily Beast, College Humor Media and IAC Films. The Company’s reporting units are consistent with its operating segments, with the exception of Desktop and Mosaic Group, which are separate reporting units within the Applications operating segment. Goodwill is tested for impairment at the reporting unit level. See "Note 12—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 are adjusted to fair value only when an impairment is recognized. The Company's financial assets, comprising equity securities without readily determinable fair values, are adjusted to fair value when observable price changes are identified or an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs. Traffic Acquisition Costs Traffic acquisition costs consist of (i) the amortization of fees paid to Apple and Google related to the distribution and the facilitation of in-app purchases and (ii) payments made to partners who distribute our business-to-business customized browser-based applications and who integrate our paid listings into their websites. 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 B2C downloadable applications, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to the brands within our MTCH and ANGI segments. Advertising expense is $1.2 billion, $1.1 billion and $1.0 billion for the years ended December 31, 2018, 2017 and 2016, 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 direct-to 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 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 FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity may 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 elects 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 income (expense), net. See "Note 17—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 losses totaled $0.1 million and gains totaled $0.7 million and $9.9 million during the years ended December 31, 2018, 2017 and 2016, respectively, and were included in "Other income (expense), 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 11—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. Two of these arrangements were exercised during both the years ended December 31, 2018 and 2017 and one of these arrangements was exercised during the year ended December 31, 2016. 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, 2018, 2017 and 2016, the Company recorded adjustments of $4.1 million, $6.3 million and $7.9 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 adopted by the Company ASU No. 2014-09, Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, which superseded nearly all previous revenue recognition guidance. The Company adopted ASU No. 2014-09 effective January 1, 2018 using the modified retrospective transition method for open contracts as of the date of initial application. The cumulative effect to the Company's retained earnings at January 1, 2018 was an increase of $40.2 million, of which $3.4 million was related to the noncontrolling interest in ANGI; the adjustment to retained earnings was principally related to the Company’s ANGI and Applications segments.
The Company's disaggregated revenue disclosures are presented in "Note 12—Segment Information." The following table presents the impact of the adoption of ASU No. 2014-09 by segment under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, as reported, and ASC 605, Revenue Recognition, for the year ended December 31, 2018.
ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU No. 2016-01, which updates certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Under ASU No. 2016-01, equity securities, other than those of our consolidated subsidiaries and those accounted for under the equity method, will be measured at fair value with changes in fair value recognized in the statement of operations each reporting period. ASU No. 2016-01 is effective for reporting periods beginning after December 15, 2017. There was no cumulative impact to the Company's consolidated financial statements upon adoption of ASU No. 2016-01 on January 1, 2018. The adoption of ASU No. 2016-01 increases the volatility of the Company's other income (expense), net as a result of the remeasurement of these instruments. For the year ended December 31, 2018, other income (expense), net includes net unrealized gains related to certain equity securities that were adjusted to fair value in the second quarter of 2018 in accordance with ASU No. 2016-01 of $126.4 million. See "Note 6—Financial Instruments" for additional information. ASU No. 2016-18, Restricted Cash In November 2016, the FASB issued ASU No. 2016-18, which requires companies to explain the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. Therefore, amounts generally described as restricted cash or restricted cash equivalents are combined with unrestricted cash and cash equivalents when reconciling the beginning and end of period balances on the statement of cash flows. ASU No. 2016-18 also requires companies to disclose the nature of their restricted cash and restricted cash equivalents balances. Additionally, when cash, cash equivalents, restricted cash, and restricted cash equivalents are presented within different captions on the balance sheet, a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet is required. ASU No. 2016-18 is effective for reporting periods beginning after December 15, 2017. The Company's adoption of ASU No. 2016-18 effective January 1, 2018, on a retrospective basis, did not have a material effect on its consolidated financial statements. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet to the total amounts shown in the consolidated statement of cash flows:
Restricted cash at December 31, 2018 primarily consists of a cash collateralized letter of credit and a deposit related to corporate credit cards. Restricted cash at December 31, 2017 primarily supports a letter of credit to a supplier, which was released to the Company in the second quarter of 2018. Restricted cash at December 31, 2016 primarily included funds held in escrow for the redemption and repurchase of IAC Senior Notes and the MyHammer tender offer. In the first quarter of 2017, the Senior Notes were redeemed and repurchased and the funds held in escrow for the MyHammer tender offer were returned to the Company. Restricted cash at December 31, 2015 primarily includes the repurchase of IAC Senior Notes. ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU No. 2018-15, which clarifies the accounting for implementation costs in a cloud computing arrangement that is a services contract to follow the internal-use software guidance of ASC 350-40, Intangibles - Goodwill and Other, Internal-use Software. The provisions of ASU No. 2018-15 are effective for reporting periods beginning after December 15, 2019, including interim periods and early adoption is permitted, including adoption in any interim period. The provisions of ASU No. 2018-15 may be adopted prospectively to all implementation costs incurred after the date of adoption or retrospectively. The Company early adopted the provisions of ASU No. 2018-15 on October 1, 2018 prospectively and the adoption of this standard did not have material impact on its consolidated financial statements. ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU No. 2018-07, which largely aligns the measurement and classification guidance for share-based payments granted to non-employees with the guidance for share-based payments granted to employees. The new guidance supersedes Subtopic 505-50, Equity - Equity-Based payments to Nonemployees. ASU No. 2018-07 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU No. 2018-07 effective April 1, 2018 and its adoption did not have a material effect on its consolidated financial statements. The effect of the adoption of ASU No. 2018-07 will be to minimize the volatility of expense related to stock-based awards to non-employees in the future. Accounting Pronouncement not yet adopted by the Company ASU No. 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU No. 2016-02, which supersedes existing guidance on accounting for leases 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. The Company will adopt the new lease guidance effective January 1, 2019. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to implement the transition method option provided by ASU No. 2018-11. The Company is not a lessor, 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 the adoption of 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 lease 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 agreements governing the outstanding debt of the Company or its MTCH and ANGI subsidiaries, or our credit agreement or the credit agreement of MTCH and ANGI because, in each circumstance, the leverage calculations are not affected by the lease 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:
Development of the selected software solution by the third-party vendor is ongoing. While significant progress has been made, certain key deliverables remain, which the Company expects to be delivered in March 2019. The Company's ability to adopt ASU No. 2016-02 in an efficient and effective manner is contingent upon the delivery and testing of these remaining deliverables. The Company has been able to develop a preliminary estimate of the impact of the adoption of ASU No. 2016-02 through the use of the third-party software solution, supplemented by our user acceptance testing. This preliminary estimate is that a $160 million right of use asset and related lease liability will be recognized on the Company's consolidated balance sheet upon adoption. The Company does not expect a material impact on its results of operations or cash flows. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
INCOME TAXES |
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INCOME TAXES | INCOME TAXES U.S. and foreign earnings (loss) before income taxes and noncontrolling interests are as follows:
The components of the income tax provision (benefit) are as follows:
The tax provision for the year ended December 31, 2018 includes a $143.3 million benefit for excess tax deductions attributable to stock-based compensation. Of this amount, $142.2 million reduced income taxes payable and $1.1 million increased the deferred tax asset for net operating losses ("NOLs"). The deferred tax asset for 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 for the year ended December 31, 2016 for excess tax deductions attributable to stock-based compensation. For the year ended December 31, 2016, 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, 2018 and 2017:
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, 2018, the Company has federal and state NOLs of $856.0 million and $698.7 million, respectively. If not utilized, $13.9 million of federal NOLs can be carried forward indefinitely, and the remainder will expire at various times primarily between 2023 and 2037, and the state NOLs, if not utilized, will expire at various times between 2019 and 2038. Federal and state NOLs of $569.9 million and $350.4 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, 2018, the Company has foreign NOLs of $383.4 million available to offset future income. Of these foreign NOLs, $352.0 million can be carried forward indefinitely and $31.4 million will expire at various times between 2019 and 2038. During 2018, the Company recognized tax benefits related to NOLs of $9.5 million. At December 31, 2018, the Company has tax credit carryforwards of $105.4 million. Of this amount, $53.2 million relates to credits for foreign taxes, $48.3 million relates to credits for research activities and $3.9 million relates to various other credits. Of these credit carryforwards, $24.2 million can be carried forward indefinitely and $81.2 million will expire between 2019 and 2038. 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. During 2018, the Company's valuation allowance decreased by $16.7 million primarily due to a decrease in foreign tax credits subject to valuation allowance and the realization of previously unbenefited capital losses. At December 31, 2018, the Company has a valuation allowance of $115.9 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 provision (benefit) 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, 2018, 2017 and 2016 is a $0.3 million expense, $0.1 million benefit and $0.4 million expense, respectively, net of related deferred taxes of $0.1 million, less than $0.1 million and $0.2 million, respectively, for interest on unrecognized tax benefits. At December 31, 2018 and 2017, the Company has accrued $3.4 million and $3.0 million, respectively, for the payment of interest. At December 31, 2018 and 2017, the Company has accrued $1.4 million and $1.7 million, respectively, 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 ("IRS") is currently auditing the Company’s federal income tax returns for the years ended December 31, 2010 through 2016. The statute of limitations for the years 2010 through 2015 has been extended to December 31, 2019. Various other jurisdictions are open to examination for tax years beginning with 2009. Income taxes payable include unrecognized tax benefits 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 not accurately anticipate actual outcomes and, therefore, may require periodic adjustment. Although management currently believes changes in unrecognized tax benefits 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, 2018 and 2017, unrecognized tax benefits, including interest and penalties, were $52.3 million and $39.7 million, respectively. If unrecognized tax benefits at December 31, 2018 are subsequently recognized, $49.1 million, net of related deferred tax assets and interest, would reduce income tax expense. The comparable amount as of December 31, 2017 was $37.2 million. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $21.6 million by December 31, 2019, due to expirations of statutes of limitations or other settlements; $21.6 million of which would reduce the income tax provision. On December 22, 2017, the U.S. enacted the Tax Act. The Tax Act subjected to U.S. taxation certain previously deferred earnings of foreign subsidiaries as of December 31, 2017 ("Transition Tax") and implemented a number of changes that took 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 was able to make a reasonable estimate of the Transition Tax and recorded a provisional tax expense in the fourth quarter of 2017. In the third quarter of 2018, the Company finalized this calculation, which resulted in a $9.2 million reduction in the Transition Tax. The net reduction in the Transition Tax was due primarily to the utilization of additional foreign tax credits and a reduction in state taxes, partially offset by additional taxable earnings and profits of our foreign subsidiaries based on recently issued IRS guidance. The adjustment of the Company’s provisional tax expense was recorded as a change in estimate in accordance with Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, which is also included in the FASB issued ASU No. 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 ("SAB 118"), which was issued and adopted by the Company in March 2018. Despite the completion of the Company’s accounting for the Tax Act under SAB 118, many aspects of the law remain unclear and we expect ongoing guidance to be issued at both the federal and state levels. We will continue to monitor and assess the impact of any new developments. At December 31, 2018, all of the Company’s international cash can be repatriated without significant tax consequences. The Company has not provided for approximately $1.0 million of foreign deferred taxes for the $103.1 million of the foreign cash earnings that is indefinitely reinvested outside the U.S. The Company reassesses 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 intention. |
BUSINESS COMBINATION |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS COMBINATION | BUSINESS COMBINATION Through the Combination, ANGI acquired 100% of the common stock of Angie's List on September 29, 2017 for a total purchase price valued at $781.4 million. 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. Unaudited 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 $77.1 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 equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination, and the acceleration of certain converted equity awards resulting from the termination of Angie's List employees 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 During the years ended December 31, 2018 and 2017, the Company incurred $3.6 million and $44.1 million, respectively, in costs related to the Combination (including severance, retention, transaction and integration related costs), as well as deferred revenue write-offs of $5.5 million and $7.8 million, respectively. During the years ended December 31, 2018 and 2017, the Company also incurred $70.6 million and $122.1 million, respectively, in stock-based compensation expense related to the modification of previously issued HomeAdvisor equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination, and the acceleration of certain converted equity awards resulting from the termination of Angie's List 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 is presented below.
The costs are allocated as follows in the accompanying consolidated statement of operations:
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GOODWILL AND INTANGIBLE ASSETS |
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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, 2018:
Additions primarily relate to the acquisitions of Handy (included in the ANGI Homeservices segment), TelTech and iTranslate (included in the Applications segment), Hinge (included in the Match Group segment), and BlueCrew (included in the Emerging & Other segment). Deductions relate to the sales of Felix (included in the ANGI Homeservices segment) and Electus (included in the Emerging & 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, 2017:
Additions primarily relate to the acquisitions of Angie's List, MyBuilder and HomeStars (included in the ANGI Homeservices segment), and Livestream (included in the Vimeo segment). Deductions relate to the sale of The Princeton Review (included in the Emerging & Other segment). Prior to the fourth quarter of 2018, IAC Publishing was a reportable segment consisting of one operating segment and one reporting unit. In the fourth quarter of 2018, IAC Publishing was split into the Dotdash and the Emerging & Other segments (related to the remaining businesses previously included in the IAC Publishing segment). The accumulated goodwill impairment of IAC Publishing was allocated to these businesses based upon their relative fair values as of October 1, 2018. The December 31, 2018 and 2017 goodwill balance reflects accumulated impairment losses of $529.1 million, $399.7 million, $198.3 million and $11.6 million at Applications, the businesses previously included in the IAC Publishing segment, excluding Dotdash (included in the Emerging & Other segment), Dotdash and College Humor Media (included in the Emerging & Other segment), respectively. Intangible assets with indefinite lives are trade names and trademarks acquired in various acquisitions. At December 31, 2018 and 2017, intangible assets with definite lives are as follows:
At December 31, 2018, 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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FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Marketable Securities At December 31, 2018 and 2017, the fair value of marketable securities are as follows:
At December 31, 2018, current available-for-sale marketable debt securities are as follows:
The contractual maturities of debt securities classified as current available-for-sale at December 31, 2018 are within one year. 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, 2018. At December 31, 2017, current available-for-sale marketable debt securities are as follows:
The following table presents the proceeds from maturities and sales of available-for-sale marketable debt securities and the related gross realized gains:
Gross realized gains from the maturities and sales of available-for-sale marketable debt securities for the year ended December 31, 2016 are included in "Other income (expense), net" in the accompanying consolidated statement of operations. There were no gross realized losses from the maturities and sales of available-for-sale marketable debt securities for the years ended December 31, 2018, 2017, and 2016. Long-term investments Long-term investments consist of:
Equity securities without readily determinable fair values The following table presents a summary of realized and unrealized gains and losses recorded in other income (expense), net, as adjustments to the carrying value of equity securities without readily determinable fair values held as of December 31, 2018. The gross unrealized gains principally relate to the Company's remaining investments in an investee following the sale of a portion of the Company's investment during the second quarter of 2018.
Realized and unrealized gains and losses for the Company's marketable equity security and investments without readily determinable fair values for the year ended December 31, 2018 are as follows:
Equity method investments In 2018 and 2017, the Company recorded other-than-temporary impairment charges on certain of its investments of $0.6 million and $2.7 million, respectively. These charges are included in "Other income (expense), net" in the accompanying consolidated statement of operations. Cost method investments (prior to the adoption of ASU No. 2016-01) In 2017 and 2016, the Company recorded $9.5 million and $10.0 million, respectively, of other-than-temporary impairment charges for certain of its investments as a result of our assessment of the near-term prospects and financial condition of the investees. These charges are included in "Other income (expense), 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 income (expense), net" in the accompanying consolidated statement of operations. Fair Value Measurements The following tables present the Company's financial instruments that are measured at fair value on a recurring basis:
The Company's financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are its contingent consideration arrangements.
Contingent consideration arrangements At December 31, 2018, the Company has two contingent consideration arrangements outstanding related to business acquisitions. One arrangement has a $2.0 million maximum contingent payment that has been earned and will be paid by the Company in the first quarter of 2019. The second arrangement has a total maximum contingent payment of $45.0 million. At December 31, 2018, the gross fair value of this arrangement, before unamortized discount, is $44.0 million. The contingent consideration arrangements are based upon earnings performance and/or operating metrics. The Company generally determines 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 December 31, 2018 reflect discount rates ranging from 12% to 25%. The fair values of the contingent consideration arrangements at December 31, 2017 reflect discount rates of 12%. The fair value of 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, 2018 and 2017 includes a current portion of $2.0 million and $0.6 million, respectively, and non-current portion of $26.6 million and $2.0 million at December 31, 2018 and 2017, 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:
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Excluding the MTCH Credit Facility, the fair value of long-term debt, including the current portion, is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs. The Company considers the outstanding borrowings under the MTCH Credit Facility, which has a variable interest rate, to have a fair value equal to its carrying value. |
LONG-TERM DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consists of:
MTCH Senior Notes The 6.375% MTCH Senior Notes were issued on June 1, 2016. The proceeds of $400 million were used to prepay a portion of indebtedness outstanding under the MTCH 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 set forth in the indenture governing the notes. 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, MTCH issued $450 million aggregate principal amount of its 5.00% Senior Notes. The proceeds from these notes, along with cash on hand, were used to redeem the $445.2 million outstanding balance of the 6.75% MTCH Senior Notes, which were due on December 15, 2022, and pay the related call premium. At any time prior to December 15, 2022, the 5.00% MTCH 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 set forth in the indenture governing the notes. 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 6.375% and 5.00% MTCH Senior Notes (i) contain covenants that would limit MTCH's ability to pay dividends, make distributions or repurchase MTCH stock in the event a default has occurred or MTCH's consolidated leverage ratio (as defined in the indentures) exceeds 5.0 to 1.0 and (ii) are ranked equally with each other. At December 31, 2018, there were no limitations pursuant thereto. There are additional covenants that limit MTCH's ability and the ability of its subsidiaries to, among other things, (i) incur indebtedness, make investments, or sell assets in the event MTCH is not in compliance with certain ratios set forth in the indentures, and (ii) incur liens, enter into agreements restricting MTCH subsidiaries' ability to pay dividends, enter into transactions with affiliates and consolidate, merge or sell substantially all of their assets. MTCH Term Loan and MTCH Credit Facility At both December 31, 2018 and 2017, the outstanding balance on the MTCH Term Loan was $425 million. The MTCH Term Loan bears interest at LIBOR plus 2.50% and was 5.09% and 3.85% at December 31, 2018 and 2017, respectively. The MTCH Term Loan provides for 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 credit agreement. Interest payments are due at least quarterly through the term of the loan. On December 7, 2018, the MTCH $500 million revolving credit facility (the "MTCH Credit Facility") was amended and restated, and is due on December 7, 2023. At December 31, 2018, the outstanding borrowings under the MTCH Credit Facility were $260.0 million which bear interest at LIBOR plus 1.50%, or approximately 4.00%. At December 31, 2017, there were no outstanding borrowings under the MTCH Credit Facility. The annual commitment fee on undrawn funds based on the current consolidated net leverage ratio is 25 basis points and 30 basis points at December 31, 2018 and 2017, respectively. Borrowings under the MTCH Credit Facility bear interest, at MTCH'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 MTCH's consolidated net leverage ratio. The terms of the MTCH Credit Facility require MTCH 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 2.0 to 1.0 (in each case as defined in the agreement). The MTCH Term Loan and MTCH Credit Facility contain covenants that would limit MTCH’s ability to pay dividends, make distributions or repurchase MTCH stock in the event MTCH’s secured net leverage ratio exceeds 2.0 to 1.0, while the MTCH Term Loan remains outstanding and, thereafter, if the consolidated net leverage ratio exceeds 4.0 to 1.0, or in the event a default has occurred. There are additional covenants under these MTCH debt agreements that limit the ability of MTCH and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions. Obligations under the MTCH Credit Facility and MTCH Term Loan are unconditionally guaranteed by certain MTCH wholly-owned domestic subsidiaries, and are also secured by the stock of certain MTCH domestic and foreign subsidiaries. The MTCH Term Loan and outstanding borrowings, if any, under the MTCH Credit Facility rank equally with each other, and have priority over the 6.375% and 5.00% MTCH Senior Notes to the extent of the value of the assets securing the borrowings under the MTCH credit agreement. ANGI Term Loan and ANGI Credit Facility On November 1, 2017, ANGI borrowed $275 million under a five-year term loan facility ("ANGI Term Loan"). On November 5, 2018, the ANGI Term Loan was amended and restated, and is now due on November 5, 2023. 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 from the amendment date, 2.50% in the fourth year and 3.75% in the fifth year are required. The ANGI Term Loan bears interest at LIBOR plus 1.50%, or approximately 4.00% at December 31, 2018, which is subject to change in future periods based on ANGI's consolidated net leverage ratio. The ANGI Term Loan bore interest at LIBOR plus 2.00%, or 3.38%, at December 31, 2017. The terms of the ANGI Term Loan require ANGI to maintain a consolidated net leverage ratio of not more than 4.5 to 1.0 and a minimum interest coverage ratio of not less than 2.0 to 1.0 (in each case as defined in the credit agreement). The ANGI Term Loan also contains covenants that would limit ANGI’s ability to pay dividends, make distributions or repurchase ANGI stock in the event a default has occurred or ANGI’s consolidated net leverage ratio exceeds 4.25 to 1.0. There are additional covenants under the ANGI Term Loan that limit the ability of ANGI and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions. On November 5, 2018, ANGI entered into a five-year $250 million revolving credit facility (the "ANGI Credit Facility"). At December 31, 2018, there were no outstanding borrowings under the ANGI Credit Facility. The annual commitment fee on undrawn funds is currently 25 basis points, and is based on the consolidated net leverage ratio most recently reported. Borrowings under the ANGI Credit Facility bear interest, at ANGI's option, at either a base rate or LIBOR, in each case plus an applicable margin, which is determined by reference to a pricing grid based on ANGI's consolidated net leverage ratio. The financial and other covenants are the same as those for the ANGI Term Loan. The ANGI Term Loan and ANGI Credit Facility are guaranteed by ANGI's wholly-owned material domestic subsidiaries and are secured by substantially all assets of ANGI and the guarantors, subject to certain exceptions. IAC Exchangeable Notes On October 2, 2017, IAC FinanceCo, Inc., a direct, wholly-owned subsidiary of the Company, issued $517.5 million aggregate principal amount of its 0.875% Exchangeable Senior Notes (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 exchange, the Company has the right to settle the 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 (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, which occurred in the third quarter of 2018; (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 governing the Exchangeable Notes. On or after July 1, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may exchange all or any portion of their Exchangeable Notes regardless of the foregoing conditions. A portion of the net proceeds from the sale of the Exchangeable Notes of $499.5 million, after deducting fees and expenses, was used to pay the net premium of $50.7 million on the Exchangeable Note Hedge and Warrants (defined below). 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 "Warrants"). The if-converted value of the Exchangeable Notes exceeds its principal amount by $105.0 million based on the Company's stock price on December 31, 2018. The Exchangeable Note Hedge is expected to reduce the potential dilutive effect on 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 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 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. For the years ended December 31, 2018 and 2017, the Company incurred interest expense of $21.2 million and $5.2 million, which includes amortization of original issue discount of $13.1 million and $3.2 million, and debt issuance costs of $3.5 million and $0.9 million, respectively. As of December 31, 2018 and 2017, the unamortized discount is $54.0 million and $67.2 million, resulting in a net carrying value of the liability component of $463.5 million and $450.3 million, respectively. IAC Senior Notes The 4.75% Senior Notes were issued by IAC on December 21, 2012. These Notes are unconditionally guaranteed by certain of our wholly-owned domestic subsidiaries, which are designated as guarantor subsidiaries. See "Note 19—Guarantor and Non-Guarantor Financial Information" for financial information relating to guarantor and non-guarantor subsidiaries. The 4.75% Senior Notes may be redeemed at 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:
IAC Credit Facility On November 5, 2018, the IAC Credit Facility, under which IAC Group, LLC, a direct, wholly-owned subsidiary of the Company is the borrower, was amended and restated, reducing the facility size from $300 million to $250 million, and now expires on November 5, 2023. At December 31, 2018 and 2017, there were no outstanding borrowings under the IAC Credit Facility. The annual commitment fee on undrawn funds is based on the consolidated net leverage ratio (as defined in the agreement) most recently reported, and is 20 basis points and 25 basis points at December 31, 2018 and 2017, respectively. 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 consolidated net leverage ratio. The terms of the IAC Credit Facility require that the Company maintains a consolidated net leverage ratio of not more than 3.25 to 1.0 before the date on which the Company no longer holds majority of the outstanding voting stock of each of ANGI and MTCH ("Trigger Date") and no greater than 2.75 to 1.0 on or after the Trigger Date. The terms of the IAC Credit Facility also restrict our ability to incur additional indebtedness. Borrowings under the IAC Credit Facility are unconditionally guaranteed by substantially 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, which includes MTCH and ANGI. The 4.75% Senior Notes are subordinate to the outstanding borrowings under the IAC Credit Facility to the extent of the value of the assets securing such borrowings. Long-term debt maturities:
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SHAREHOLDERS' EQUITY |
12 Months Ended |
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Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Description of Common Stock and Class B Convertible Common Stock Except as described herein, shares of IAC common stock and IAC Class B common stock are identical. 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. 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 therefor. 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, 28.0 million shares of IAC common stock are reserved at December 31, 2018. Warrants and Exchangeable Notes At December 31, 2018 and 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 on October 2, 2017 for aggregate proceeds of $23.6 million. During the years ended December 31, 2018 and 2017, no warrants were exercised and no Exchangeable Notes were exchanged. See "Note 7—Long-term Debt" for additional information on the Exchangeable Notes. Common Stock Repurchases During the years ended December 31, 2018, 2017 and 2016, the Company repurchased 0.5 million, 0.7 million and 6.3 million shares of IAC common stock for aggregate consideration, on a trade date basis, of $82.9 million, $50.1 million and $315.3 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, 2018, the Company has approximately 8.0 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:
The amounts reclassified out of foreign currency translation adjustment into earnings for the years ended December 31, 2018, 2017 and 2016 relate to the liquidation of international subsidiaries. The amounts reclassified out of unrealized gains on available-for-sale securities into earnings for the years ended December 31, 2017 and 2016, include a tax benefit of $3.8 million and a tax provision of $0.2 million, respectively. |
EARNINGS (LOSS) PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 and PSUs, 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, 2018, there are 11.5 million shares available for grant under the plans. The plans were adopted in 2013 and 2018, 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, 2018, there is $326.0 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 2.3 years. The total income tax benefit recognized in the accompanying consolidated statement of operations for the years ended December 31, 2018, 2017 and 2016 related to all stock-based compensation is $189.0 million, $423.0 million and $34.8 million, respectively. The increase in total income tax benefit recognized in the consolidated statement of operations during 2017 relative to 2016 is due to the adoption of ASU 2016-09, effective January 1, 2017, which required the recognition of excess tax benefits attributable to stock-based compensation to be included as a component of the provision for income taxes rather than recognized in equity. The aggregate income tax benefit recognized related solely to stock options for the years ended December 31, 2018, 2017 and 2016, including the portion recognized as a component of equity in 2016 is $169.0 million, $411.6 million, and $63.4 million, respectively. As the Company is currently in an NOL position, there will be some delay in the timing of the realization of the cash benefit of the income tax deductions related to stock-based compensation because it will be dependent upon the amount and timing of future taxable income and the timing of estimated income tax payments. IAC Stock Options Stock options outstanding at December 31, 2018 and changes during the year ended December 31, 2018 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 2018 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, 2018. The total intrinsic value of stock options exercised during the years ended December 31, 2018, 2017 and 2016 is $83.7 million, $164.6 million and $17.1 million, respectively. The following table summarizes the information about stock options outstanding and exercisable at December 31, 2018:
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 2018, 2017 and 2016, 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 2018, the Company granted market-based stock options that 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 the fourth quarter of 2018. The service requirement provides that this award vests in two installments, the first 50% in 2021 and the second 50% in 2022. The grant date fair value of the 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 this award included an expected volatility of 29%, risk-free interest rate of 2.8% and a zero-dividend yield. The expected term of 1.8 years for this award was derived from the output of the option valuation model. Expense is recognized over the longer of the vesting period of each of the two installments or the expected term. Approximately less than 0.1 million, 1.2 million and 1.7 million stock options were granted by the Company during the years ended December 31, 2018, 2017 and 2016, respectively. The weighted average fair value of stock options granted during the years ended December 31, 2018, 2017 and 2016 are $53.94, $22.94 and $12.34, respectively. Cash received from stock option exercises for the years ended December 31, 2018, 2017 and 2016 was $41.7 million, $82.4 million and $25.8 million, respectively. The Company has historically settled its stock options on a gross basis. Assuming all stock options outstanding on December 31, 2018 were net settled on that date, the Company would have remitted $349.1 million (of which $221.6 million is related to vested stock options and $127.4 million is related to unvested stock options) in cash for withholding taxes (assuming a 50% withholding rate). 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, 2018 and changes during the year ended December 31, 2018 are as follows:
The weighted average fair value of RSUs and PSUs granted during the years ended December 31, 2018, 2017 and 2016 based on market prices of IAC's common stock on the grant date was $178.29, $90.04 and $46.92, respectively. The total fair value of RSUs and PSUs that vested during the years ended December 31, 2018, 2017 and 2016 was $8.9 million, $32.5 million and $13.5 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, MTCH and ANGI. MTCH and ANGI stock-based awards are issued pursuant to their respective stock incentive plans. The Company has granted 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 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 fair value of these interest is generally determined by negotiation or arbitration, when settled; which will occur at various dates through 2025. These equity awards are settled on a net basis, with the award holder entitled to receive a payment in IAC common 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 IAC common shares ultimately needed to settle these awards may vary significantly from the estimated number 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, 2018 is 0.1 million shares. Withholding taxes, which will be paid by the Company on behalf of the employees upon exercise, would have been $16.0 million at December 31, 2018, assuming a 50% withholding rate. MTCH MTCH currently settles substantially all equity awards on a net basis. Assuming all MTCH equity awards outstanding on December 31, 2018 were net settled on that date, MTCH would have issued 9.7 million common shares (of which 1.7 million is related to vested shares and 8.0 million is related to unvested shares) and would have remitted $416.2 million (of which $75.0 million is related to vested shares and $341.2 million is related to unvested shares) in cash for withholding taxes (assuming a 50% withholding rate). If MTCH decided to issue a sufficient number of shares to cover the $416.2 million employee withholding tax obligation, 9.7 million additional shares would be issued by MTCH. Following the completion of the MTCH IPO, equity awards that related to certain subsidiaries (principally Tinder, Inc.) of MTCH were settleable, at IAC's election, in shares of IAC common stock or MTCH common stock. Pursuant to the Employee Matters Agreement between IAC and MTCH, to the extent shares of IAC common stock are issued in settlement of these awards, MTCH reimburses IAC for the cost of those shares in cash or by issuing IAC shares of MTCH common stock. In July 2017, Tinder was merged into MTCH and as a result, all Tinder denominated equity awards were converted into MTCH tandem stock options ("Tandem Awards"). All of the MTCH Tandem Awards exercised during 2018 and 2017 were exercised on a net basis and were settled in IAC common shares; the Company issued 0.7 million and 2.0 million shares, respectively, of its common stock to settle these awards and MTCH issued 2.5 million and 11.3 million shares, respectively, of its common stock to IAC as reimbursement. Assuming all vested and unvested Tandem Awards outstanding on December 31, 2018 were exercised on that date and settled using IAC stock, 0.3 million IAC common shares would have been issued in settlement and MTCH would have issued 1.4 million shares, which is included in the amount above, to IAC as reimbursement. During 2017, MTCH also purchased certain fully vested Tandem Awards, and 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. During 2016, the Company granted a nominal amount of IAC denominated market-based awards to certain MTCH employees. The number of awards that ultimately vest is dependent upon MTCH'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 MTCH'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 In connection with the Combination, previously issued stock appreciation rights related to the common stock of HomeAdvisor (US) were converted into ANGI stock appreciation rights that are settleable, at ANGI's option, on a net basis with ANGI remitting withholding taxes on behalf of the employee or on a gross basis with ANGI issuing a sufficient number of Class A shares to cover the withholding taxes. In addition, at IAC's option, these awards can be settled in either Class A shares of ANGI or shares of IAC common stock. If settled in IAC common stock, ANGI reimburses IAC in either cash or through the issuance of Class A shares to IAC. Assuming all of the stock appreciation rights outstanding on December 31, 2018 were net settled on that date using IAC stock, 1.1 million IAC common shares would have been issued in settlement and IAC would have been issued 12.8 million shares of ANGI Class A stock and ANGI would have remitted $205.9 million in cash for withholding taxes (assuming a 50% withholding rate). If ANGI decided to issue a sufficient number of shares to cover the $205.9 million employee withholding tax obligation, 12.8 million additional Class A shares would be issued by ANGI. ANGI's cash withholding obligation on all other ANGI net settled awards outstanding on December 31, 2018 is $36.5 million (assuming a 50% withholding rate), which is the equivalent of 2.3 million shares. Prior to the Combination in 2017, the Company issued a number of IAC denominated PSUs to certain ANGI employees. Vesting of the PSUs is contingent upon ANGI's performance. Assuming all of the PSUs outstanding on December 31, 2018 were net settled on that date using IAC stock, 0.1 million IAC common shares would have been issued in settlement and IAC would have been issued 0.6 million shares of ANGI Class A stock and ANGI would have remitted $10.4 million in cash for withholding taxes (assuming a 50% withholding rate). Modification of awards During 2018, the Company modified certain equity awards and recognized modification charges of $7.9 million. In addition, in connection with the ANGI chief executive officer transition during the fourth quarter of 2018, ANGI accelerated $3.9 million of expense into 2018 from 2019. In connection with the Combination, the previously issued HomeAdvisor (US) stock appreciation rights were converted into ANGI equity awards resulting in a modification charge of $217.7 million of which $56.9 million and $93.4 million were recognized as stock-based compensation expense in the years ended December 31, 2018 and 2017, respectively, 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 HomeAdvisor (US) 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 $0.1 million, $0.7 million and $6.3 million were recognized as stock-based compensation in the years ended December 31, 2018, 2017 and 2016, respectively. 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, MTCH settled the vested portion of the award for cash of $13.4 million. In the third quarter of 2017, the award was modified and MTCH 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 Emerging & Other reportable segment, do not meet the quantitative thresholds that require presentation as separate reportable segments. The following table presents revenue by reportable segment:
The following table presents the revenue of the Company's segments disaggregated by type of service:
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 present operating income (loss) and Adjusted EBITDA by reportable segment:
_______________________________________________________________________________ (a) 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 businesses, and this measure is one of the primary metrics on 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. Adjusted EBITDA has certain limitations in that it does not take into account the impact to IAC's statement of operations of certain expenses. The following tables reconcile operating income (loss) for the Company's reportable segments and net earnings attributable to IAC shareholders to Adjusted EBITDA:
The following tables reconcile segment assets to total assets by reportable segment:
_____________________________________ (b) 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.
The following table presents capital expenditures by reportable segment:
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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 certain lease agreements. 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 $42.0 million, $37.9 million and $50.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. The Company's three most significant operating leases are for IAC's headquarters in New York City that expires in 2081, ANGI's call center in New York that expires in 2028 and ANGI's headquarters in Denver, Colorado that expires in 2029, which collectively approximate 61% 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 primarily 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. On August 14, 2018, ten then-current and former employees of Match Group, LLC or Tinder, Inc. ("Tinder"), an operating business of Match Group, filed a lawsuit in New York state court against IAC and Match Group. See Sean Rad et al. v. IAC/InterActiveCorp and Match Group, Inc., No. 654038/2018 (Supreme Court, New York County). The complaint alleges that in 2017, the defendants: (i) wrongfully interfered with a contractually established process for the independent valuation of Tinder by certain investment banks, resulting in a substantial undervaluation of Tinder and a consequent underpayment to the plaintiffs upon exercise of their Tinder stock options, and (ii) then wrongfully merged Tinder into Match Group, thereby depriving one of the plaintiffs (Mr. Rad) of his contractual right to later valuations of Tinder on a stand-alone basis. The complaint asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, interference with contractual relations (as against Match Group only), and interference with prospective economic advantage, and seeks compensatory damages in the amount of at least $2 billion, as well as punitive damages. On August 31, 2018, four plaintiffs who were still employed by Match Group filed a notice of discontinuance of their claims without prejudice, leaving the six former employees as the remaining plaintiffs. On October 9, 2018, the defendants filed a motion to dismiss the complaint on various grounds, including that the 2017 valuation of Tinder by the investment banks was an expert determination any challenge to which is both time-barred under applicable law and available only on narrow substantive grounds that the plaintiffs have not pleaded in their complaint. On December 17, 2018, plaintiffs filed their opposition to the motion to dismiss. On January 15, 2019, the defendants filed their reply brief. A hearing on the motion is scheduled for March 6, 2019, and discovery in the case is proceeding. IAC and Match Group believe that the allegations in this lawsuit are without merit and will continue to defend vigorously against it. |
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 $25.5 million and $0.2 million during the years ended December 31, 2018 and 2016, respectively, in connection with various acquisitions. There were no acquisition-related contingent consideration liabilities recorded for the year ended December 31, 2017. See "Note 6—Financial Instruments" for additional information on contingent consideration arrangements. On October 19, 2018, ANGI issued 8.6 million shares of its Class A common stock valued at $165.8 million in connection with the acquisition of Handy. On September 29, 2017, ANGI issued 61.3 million shares of its Class A common stock valued at $763.7 million in connection with the Combination. Supplemental Disclosure of Cash Flow Information:
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RELATED PARTY TRANSACTIONS |
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RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS IAC and MTCH: IAC and MTCH, in connection with MTCH's IPO, entered into the following agreements:
During the years ended December 31, 2018, 2017 and 2016, 3.0 million, 11.9 million and 1.0 million shares, respectively, of MTCH common stock were issued to IAC pursuant to the employee matters agreement; 2.5 million, 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 MTCH tandem stock options and equity awards denominated in shares of a subsidiary of MTCH, respectively; and 0.5 million, 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 MTCH employees. For the years ended December 31, 2018, 2017 and 2016, MTCH was charged $7.6 million, $9.9 million and $11.8 million, respectively, by the Company for services rendered pursuant to a services agreement. Included in these amounts are $5.2 million, $5.1 million and $4.3 million, respectively, for leasing of office space for certain of MTCH's businesses at properties owned by IAC. These amounts were paid in full by MTCH at December 31, 2018, 2017 and 2016, respectively. At December 31, 2017, MTCH had a tax receivable of $7.3 million due from the Company pursuant to the tax sharing agreement. Refunds made by the Company during 2018 and 2017 pursuant to this agreement were $7.0 million and $10.9 million, respectively. There were no outstanding receivables or payables pursuant to the tax sharing agreement as of December 31, 2018. In December 2017, certain international subsidiaries of MTCH agreed to sell NOLs that were not expected to be utilized to an IAC subsidiary for $0.9 million. IAC and ANGI: IAC and ANGI, in connection with the Combination, entered into the following agreements:
Additionally, on September 29, 2017, the Company and ANGI entered into two intercompany notes (collectively referred to as "Intercompany Notes") to ANGI 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 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 Term Loan that were received on the same date. For the years ended December 31, 2018 and for the period subsequent to the Combination through December 31, 2017, 0.9 million and 0.4 million shares, respectively, of ANGI Class B 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 employees. On October 10, 2018, IAC was issued 5.1 million shares of Class B common stock of ANGI pursuant to the post-closing adjustment provision of the Angie's List merger agreement. For the years ended December 31, 2018 and for the period subsequent to the Combination through December 31, 2017, ANGI was charged $5.7 million and $1.7 million, respectively, by the Company for services rendered pursuant to the services agreement. At December 31, 2018 and 2017, the Company had a $0.1 million outstanding payable to ANGI and a $0.4 million receivable from ANGI, respectively, pursuant to the services agreement. In addition, ANGI had 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, which was paid in full during the first quarter of 2018. There were no comparable costs in 2018. At December 31, 2018, ANGI had taxes payable of $12.1 million due to the Company pursuant to the tax sharing agreement. No payments were made to the Company during 2018 pursuant to this agreement. IAC and Expedia: Each of IAC and Expedia has a 50% ownership interest in two aircrafts that may be used by both companies. The Company and Expedia purchased an aircraft during the second quarter of 2017 to replace a previously owned aircraft, which was subsequently sold on February 13, 2018. The Company paid $17.4 million (50% of the total purchase price and refurbish costs) for its interest in the new aircraft. 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, 2018, 2017 and 2016, 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, 2018, 2017 and 2016 are $12.9 million, $11.1 million and $10.0 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 2018 and 2017 are due primarily to an increase in participation in the Plan due to increases in headcount from the Combination and continued corporate growth at ANGI, MTCH, Vimeo and Dotdash. 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, 2018, 2017 and 2016 are $3.4 million, $2.5 million and $2.1 million, respectively. The increase in contributions in 2018 and 2017 were due, in part, to an increase in participation in the international plans due to an increase in headcount at MTCH and ANGI as a result of continued business growth. |
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 income, net in 2018 includes: $124.2 million of net unrealized gains related to certain equity investments that were adjusted to fair value in accordance with ASU No. 2016-01, which was adopted on January 1, 2018; $120.6 million in gains related to the sales of Dictionary.com, Electus, Felix and CityGrid; $30.4 million of interest income; $27.9 million in realized gains related to the sale of certain equity investments; and $5.3 million in net foreign currency exchange gains due primarily to the strengthening of the dollar relative to the British Pound. 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; $15.4 million expense related to the extinguishment of the 6.75% MTCH Senior Notes and repricing of the MTCH Term Loan; $13.0 million mark-to-market charge principally 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; $1.2 million expense related to the write-off of deferred financing costs associated with the repayment of the 4.875% Senior Notes; $34.9 million in realized gains related to the sale of certain investments; and $11.4 million of interest income. Other income, net in 2016 includes: $37.5 million and $12.0 million in realized gains related to the sales of ShoeBuy and PriceRunner, respectively; $34.4 million in net foreign currency exchange gains due primarily to the strengthening of the dollar relative to the British Pound and Euro; $5.1 million of interest income; $3.6 million gain related to the sale of certain equity investments; $12.1 million non-cash charge 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 MTCH Term Loan; $10.7 million in other-than-temporary impairment charges related to certain investments; $3.8 million loss related to the sale of ASKfm; $3.6 million loss on the 4.75% and 4.875% Senior Note redemptions and repurchases; and $2.5 million mark-to-market charge principally pertaining to a subsidiary denominated equity award held by a non-employee. |
TRANSACTION AND INTEGRATION RELATED COSTS IN CONNECTION WITH THE COMBINATION |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TRANSACTION AND INTEGRATION RELATED COSTS IN CONNECTION WITH THE COMBINATION | BUSINESS COMBINATION Through the Combination, ANGI acquired 100% of the common stock of Angie's List on September 29, 2017 for a total purchase price valued at $781.4 million. 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. Unaudited 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 $77.1 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 equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination, and the acceleration of certain converted equity awards resulting from the termination of Angie's List employees 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 During the years ended December 31, 2018 and 2017, the Company incurred $3.6 million and $44.1 million, respectively, in costs related to the Combination (including severance, retention, transaction and integration related costs), as well as deferred revenue write-offs of $5.5 million and $7.8 million, respectively. During the years ended December 31, 2018 and 2017, the Company also incurred $70.6 million and $122.1 million, respectively, in stock-based compensation expense related to the modification of previously issued HomeAdvisor equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination, and the acceleration of certain converted equity awards resulting from the termination of Angie's List 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 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 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, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016 for: IAC, on a standalone 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, 2018:
Balance sheet at December 31, 2017:
Statement of operations for the year ended December 31, 2018:
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Statement of operations for the year ended December 31, 2017:
Statement of operations for the year ended December 31, 2016:
Statement of cash flows for the year ended December 31, 2018:
Statement of cash flows for the year ended December 31, 2017:
Statement of cash flows for the year ended December 31, 2016:
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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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SUBSEQUENT EVENTS (UNAUDITED) |
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Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS (UNAUDITED) | SUBSEQUENT EVENTS (UNAUDITED) On February 11, 2019, the Company and Google amended the services agreement, effective as of April 1, 2020. The amendment extends the expiration date of the agreement to March 31, 2023; provided that beginning September 2020 and each September thereafter, either party may, after discussion with the other party, terminate the services agreement, effective on September 30 of the year following the year such notice is given. The Company believes that the amended agreement, taken as a whole, is comparable to the Company’s previously existing agreement with Google. On February 15, 2019, MTCH completed a private offering of $350 million aggregate principal amount of its 5.625% Senior Notes due 2029. A portion of the proceeds from these notes were used to repay outstanding borrowings under the MTCH Credit Facility and to pay expenses associated with the offering; the remaining proceeds will be used for general corporate purposes. |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | 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 and Equity Securities | 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. Accounting for Investments and Equity Securities 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 and are included in "Long-term investments" in the accompanying consolidated balance sheet. At December 31, 2018, the Company did not have any investments accounted for using the equity method. Investments in equity securities, other than those of our consolidated subsidiaries and those accounted for under the equity method, are accounted for at fair value or under the measurement alternative of Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, following its adoption on January 1, 2018, with any changes to fair value recognized within other income (expense), net each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer; value is generally determined based on a market approach as of the transaction date. An investment will be considered identical or similar if it has identical or similar rights to the equity investments held by the Company. The Company reviews its equity securities for impairment each reporting period when there are qualitative factors or events that indicate possible impairment. Factors we consider in making this determination include negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors. When indicators of impairment exist, the Company prepares quantitative assessments of the fair value of our equity securities, which require judgment and the use of estimates. When our assessment indicates that the fair value of the security is below the carrying value, the Company writes down the security to its fair value and records the corresponding charge within other income (expense), net. See "Accounting Pronouncements adopted by the Company" below for further information. |
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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 debt securities and equity securities without readily determinable fair values; 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; unrecognized tax benefits; 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 adopted the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, effective January 1, 2018 using the modified retrospective transition method for open contracts as of the date of initial application. See "Accounting Pronouncements adopted by the Company" below for further information. The Company accounts for a contract with a customer when it has approval and commitment from all parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the promised services or goods is transferred to our customers, and in an amount that reflects the consideration the Company is contractually due in exchange for those services or goods. Transaction Price The objective of determining the transaction price is to estimate the amount of consideration the Company is due in exchange for its services or goods, including amounts that are variable. The Company determines the total transaction price, including an estimate of any variable consideration, at contract inception and reassesses this estimate each reporting period. The Company excludes from the measurement of transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts are not included as a component of revenue or cost of revenue. For contracts that have an original duration of one year or less, the Company uses the practical expedient available under ASU No. 2014-09 applicable to such contracts and does not consider the time value of money. Arrangements with Multiple Performance Obligations The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers, which are directly observable or based on an estimate if not directly observable. For our multiple performance obligation arrangements that include functional intellectual property ("IP"), which comprise the downloadable apps and software of the Applications segment, the Company uses a residual approach to determine standalone selling prices for the functional IP. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company has determined that certain costs, primarily commissions paid to employees pursuant to certain sales incentive programs and mobile app store fees, meet the requirements to be capitalized as a cost of obtaining a contract. Commissions paid to employees pursuant to certain sales incentive programs are amortized over the estimated customer relationship period. The Company calculates the estimated customer relationship period as the average customer life, which is based on historical data. When customer renewals are expected and the renewal commission is not commensurate with the initial commission, the average customer life includes renewal periods. For sales incentive programs where the customer relationship period is one year or less, the Company has elected the practical expedient to expense the costs as incurred. The Company generally capitalizes and amortizes mobile app store fees over the term of the applicable subscription. During the year ended December 31, 2018, the Company recognized expense of $355.3 million related to the amortization of these costs. The current and non-current contract asset balances at December 31, 2018 are $69.8 million and $4.5 million, respectively. The current and non-current contract assets are included in "Other current assets" and "Other non-current assets," respectively, in the accompanying consolidated balance sheet. Performance Obligations As permitted under the practical expedient available under ASU No. 2014-09, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed. Match Group Match Group 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 credit card or through mobile app stores, and, subject to certain conditions identified in our terms and conditions, generally all purchases are final and nonrefundable. Revenue is initially deferred and is recognized using the straight-line method over the term of the applicable subscription period, which generally ranges from one to six months. Revenue is also earned from online advertising, the purchase of à la carte features and offline events. Online advertising revenue is recognized when an advertisement is displayed. Revenue from the purchase of à la carte features is recognized based on usage. Revenue associated with offline events is recognized when each event occurs. ANGI Homeservices ANGI revenue is primarily derived from (i) consumer connection revenue, which comprises fees paid by HomeAdvisor service professionals for consumer matches (regardless of whether the service professional ultimately provides the requested service) and booking fees from completed jobs sourced through the Handy platform, and (ii) membership subscription fees paid by HomeAdvisor service professionals. Consumer connection revenue varies based upon several factors, including the service requested, product experience offered and geographic location of service. The Company’s consumer connection revenue is generated and recognized when an in-network service professional is delivered a consumer match or when a job sourced through the Handy platform is completed. Membership subscription revenue from service professionals is initially deferred and is recognized using the straight-line method over the applicable subscription period, which is typically one year. Consumer connection revenue is generally billed one week following a consumer match, with payment due upon receipt of invoice or collected when a consumer schedules a job through the Handy platform. The Company maintains revenue reserves for potential credits for services provided by Handy service professionals to consumers. ANGI revenue is also derived from Angie's List (i) sales of time-based website, mobile and call center advertising to service professionals and (ii) membership subscription fees from consumers. 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. Angie's List website, mobile and call center advertising revenue is recognized ratably over the contract term. Revenue from the sale of advertising in the Angie’s List Magazine is recognized in the period in which the publication is distributed. Angie's List prepaid consumer membership subscription fees are recognized as revenue using the straight-line method over the term of the applicable subscription period, which is typically one year. Vimeo Vimeo revenue is derived primarily from annual and monthly SaaS subscription fees paid by creators for premium capabilities and, to a lesser extent, sales of live streaming hardware, software and professional services. Subscription revenue is recognized over the terms of the applicable subscription period, which are typically one month or one year. Dotdash Dotdash revenue consists principally of digital advertising revenue and affiliate commerce commission revenue. Digital advertising revenue is generated primarily through digital display advertisements sold directly and through programmatic advertising networks. Affiliate commerce commission revenue is generated when Dotdash refers users to commerce partner websites resulting in a purchase or transaction. Applications Desktop revenue largely 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 Desktop businesses is supplied to us by Google Inc. ("Google") pursuant to our services agreement with Google. Pursuant to this agreement, those of our Desktop 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 Desktop 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. The Company recognizes 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 lesser extent, Desktop revenue also includes fees related to subscription downloadable desktop applications as well as display advertisements. Fees related to subscription downloadable desktop applications are generally recognized over the term of the applicable subscription period, which is primarily one or two years. Fees related to display advertisements are recognized when an advertisement is displayed. Mosaic Group revenue consists primarily of fees related to subscription downloadable mobile applications distributed through the Apple App and Google Play stores, as well as display advertisements. Fees related to subscription downloadable mobile applications are generally recognized at the time of the sale when the software license is delivered. To the extent updates or maintenance is required or expected, revenue is recognized over the term of the applicable subscription period, which is primarily one or two years. Fees related to display advertisements are recognized when an advertisement is displayed. Emerging & Other Revenue of Ask Media Group consists principally of advertising revenue, which is generated primarily through the display of paid listings in response to search queries and display advertisements (sold directly and through programmatic ad sales). The majority of the paid listings displayed are supplied to us by Google in the manner, and pursuant to the services agreement with Google, described above under "Applications." The Daily Beast revenue consists of advertising revenue, which is generated primarily through display advertisements (sold directly and through programmatic ad sales). BlueCrew revenue consists of service revenue, which is generated through staffing temporary workers and recognized as control of the promised services is transferred to our customers. Revenue of College Humor Media and IAC Films is generated primarily through media production and distribution and advertising. Production revenue is recognized when control is transferred to the customer to broadcast or exhibit, and advertising revenue is recognized when an advertisement is displayed or over the advertising period. Accounts Receivables, Net of Allowance for Doubtful Accounts and Revenue Reserves Accounts receivable include amounts billed and currently due from customers. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of accounts receivable that will not be collected. The allowance for doubtful accounts is based upon a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history and the specific customer’s ability to pay its obligation. The time between the Company issuance of an invoice and payment due date is not significant; customer payments that are not collected in advance of the transfer of promised services or goods are generally due no later than 30 days from invoice date. The Company also maintains allowances to reserve for potential credits issued to consumers or other revenue adjustments. The amounts of these reserves are based primarily upon historical experience. Deferred Revenue Deferred revenue consists of advance payments that are received or are contractually due in advance of the Company's performance. The Company’s deferred revenue is reported on a contract by contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the term of the applicable subscription period or expected completion of our performance obligation is one year or less. The deferred revenue balance at January 1, 2018 is $332.2 million. During the year ended December 31, 2018, the Company recognized $330.2 million of revenue that was included in the deferred revenue balance as of January 1, 2018. The current and non-current deferred revenue balances at December 31, 2018 are $360.0 million and $1.7 million, respectively. Non-current deferred revenue is included in "Other long-term liabilities" in the accompanying consolidated balance sheet. |
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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, treasury discount notes, commercial paper rated A1/P1 or better, time deposits and certificates of deposit. Internationally, cash equivalents primarily consist of AAA rated government money market funds and time deposits. |
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Investments in Debt Securities | Investments in Debt Securities 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. Marketable debt securities are adjusted to fair value each quarter, and the unrealized gains and losses, net of tax, are included in accumulated other comprehensive income (loss) as a separate component of shareholders' equity. The specific-identification method is used to determine the cost of debt securities sold and the amount of unrealized gains and losses reclassified out of accumulated other comprehensive income (loss) into earnings. The Company also invests in non-marketable debt securities as part of its investment strategy. We review our debt securities for impairment each reporting period. The Company recognizes an unrealized loss on debt securities in net earnings when the impairment is determined to be other-than-temporary. Factors we consider in making such determination include the duration, severity and reason for the decline in value and the potential recovery and our intent to sell the debt security. We also consider whether we will be required to sell the security before recovery of its amortized cost basis and whether the amortized cost basis cannot be recovered because of credit losses. If an impairment is considered to be other-than-temporary, the debt security will be written down to its fair value and the loss will be recognized within other income (expense), net. At December 31, 2018, marketable debt securities consist of treasury discount notes and commercial paper rated A1/P1 or better. |
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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 Inc. ("Google"). For the years ended December 31, 2018, 2017 and 2016, consolidated revenue earned from Google was $825.2 million, $740.7 million and $824.4 million, representing 19%, 22% and 26%, respectively, of the Company's consolidated revenue. A meaningful portion of this revenue is attributable to the service agreement with Google and earned by the Desktop business within the Applications segment and the Ask Media Group within the Emerging & Other segment. For the years ended December 31, 2018, 2017 and 2016, revenue earned from Google represents 73%, 83% and 87% of Applications revenue and 94%, 96% and 96% of Ask Media Group revenue (and 68%, 48% and 35% of Emerging & Other revenue), respectively. Accounts receivable related to revenue earned from Google totaled $69.1 million and $72.4 million at December 31, 2018 and 2017, respectively. The services agreement became effective on April 1, 2016, following the expiration of the previous services agreement, and expires on March 31, 2020. 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. Google’s policy changes related to its Chrome browser became effective on September 12, 2018 and negatively impacted the distribution of our business-to-consumer ("B2C") desktop products. The impact of these changes on revenue and profits in 2018 were modest as the Company optimized marketing spend in anticipation of the changes. However, we expect these changes to reduce revenue and profits of the Desktop business in the future, which among other reasons led to a $27.7 million impairment of the related indefinite-lived intangible asset in the fourth quarter of 2018. See "Note 21—Subsequent Events (Unaudited)" for a discussion of the Company's amended services agreement with Google entered into on February 11, 2019. 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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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 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 is 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 equal to the excess is recorded. For the Company's annual goodwill test at October 1, 2018, a qualitative assessment of the MTCH, ANGI, Vimeo, College Humor Media and BlueCrew 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 are described below:
The Company tests goodwill for impairment when it concludes that it is more likely than not that there may be an impairment. For the Company's annual goodwill test at October 1, 2018, the Company quantitatively tested the Desktop and Mosaic Group reporting units (included in the Applications segment). The Company's quantitative test indicated that the fair value of these reporting units are in excess of their respective carrying values; therefore, the goodwill of these reporting units are not impaired. The Company's Dotdash, Ask Media Group and The Daily Beast reporting units have no goodwill. The aggregate goodwill balance for the reporting units for which the most recent estimate of fair value is less than 110% of their carrying values is approximately $265.1 million. The fair value of the Company's reporting units (except for MTCH and ANGI described above) 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 non-public 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 the quantitative test for determining the fair value of the Company's reporting units ranged from 12.5% to 15% in 2018 and 12.5% to 17.5% in 2017. 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. The Company determines the fair value of indefinite-lived intangible assets using an avoided royalty DCF valuation analysis. Significant judgments inherent in this analysis 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 are intended to 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 10.5% to 35% in 2018 and 11% to 16% 2017, and the royalty rates used ranged from 0.75% to 8.0% in 2018 and 2% to 7% in 2017. The aggregate indefinite-lived intangible asset balance for which the most recent estimate of fair value is less than 110% of their carrying values is approximately $131.3 million. The 2018 annual assessment of goodwill did not identify any impairments. The 2018 annual assessment of indefinite-lived intangible assets identified impairment charges of $27.7 million and $1.1 million related to certain Desktop and College Humor Media indefinite-lived trade names, respectively. The indefinite-lived intangible asset impairment charge at Desktop was due to Google’s policy changes related to its Chrome browser which became effective on September 12, 2018 and have negatively impacted the distribution of our B2C downloadable desktop products. The impairment charge related to the B2C trade name was identified in our annual impairment assessment as of October 1, 2018 and reflects the projected reduction in profits and revenues and the resultant reduction in the assumed royalty rate from these policy changes. The impairment charges are included in "Amortization of intangibles" in the accompanying consolidated statement of operations. The 2017 annual assessments 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 an impairment charge equal to the entire $275.4 million at IAC Publishing. In connection with the Company's realignment of its reportable segments in the fourth quarter of 2018, $198.3 million and $77.0 million was allocated to the Dotdash and the Emerging & Other reportable segments, respectively, based upon their relative fair values as of October 1, 2018. In addition, amortization of intangibles was further impacted by the inclusion of impairment charges in 2016 of $9.0 million and $2.6 million related to certain Dictionary.com and Dotdash indefinite-lived trade names, respectively. The goodwill impairment charges at IAC Publishing was driven by the impact from the 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 IAC 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 IAC 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 IAC Publishing reporting unit. To determine a peer group of companies for IAC 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 charges 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. The Company’s operating segments are MTCH, ANGI, Vimeo, Dotdash and Applications, which are also reportable segments, and within its Emerging & Other reportable segment, Ask Media Group, BlueCrew, The Daily Beast, College Humor Media and IAC Films. The Company’s reporting units are consistent with its operating segments, with the exception of Desktop and Mosaic Group, which are separate reporting units within the Applications operating segment. 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 are adjusted to fair value only when an impairment is recognized. The Company's financial assets, comprising equity securities without readily determinable fair values, are adjusted to fair value when observable price changes are identified or an impairment 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) the amortization of fees paid to Apple and Google related to the distribution and the facilitation of in-app purchases and (ii) payments made to partners who distribute our business-to-business customized browser-based applications and who integrate our paid listings into their websites. 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 B2C downloadable applications, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to the brands within our MTCH and ANGI segments. Advertising expense is $1.2 billion, $1.1 billion and $1.0 billion for the years ended December 31, 2018, 2017 and 2016, 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 direct-to 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 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 FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity may 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 elects to recognize the tax on GILTI as a period expense in the period the tax is incurred. |
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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 income (expense), net. See "Note 17—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. Two of these arrangements were exercised during both the years ended December 31, 2018 and 2017 and one of these arrangements was exercised during the year ended December 31, 2016. 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, 2018, 2017 and 2016, the Company recorded adjustments of $4.1 million, $6.3 million and $7.9 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 adopted by the Company ASU No. 2014-09, Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, which superseded nearly all previous revenue recognition guidance. The Company adopted ASU No. 2014-09 effective January 1, 2018 using the modified retrospective transition method for open contracts as of the date of initial application. The cumulative effect to the Company's retained earnings at January 1, 2018 was an increase of $40.2 million, of which $3.4 million was related to the noncontrolling interest in ANGI; the adjustment to retained earnings was principally related to the Company’s ANGI and Applications segments.
The Company's disaggregated revenue disclosures are presented in "Note 12—Segment Information." The following table presents the impact of the adoption of ASU No. 2014-09 by segment under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, as reported, and ASC 605, Revenue Recognition, for the year ended December 31, 2018.
ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU No. 2016-01, which updates certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Under ASU No. 2016-01, equity securities, other than those of our consolidated subsidiaries and those accounted for under the equity method, will be measured at fair value with changes in fair value recognized in the statement of operations each reporting period. ASU No. 2016-01 is effective for reporting periods beginning after December 15, 2017. There was no cumulative impact to the Company's consolidated financial statements upon adoption of ASU No. 2016-01 on January 1, 2018. The adoption of ASU No. 2016-01 increases the volatility of the Company's other income (expense), net as a result of the remeasurement of these instruments. For the year ended December 31, 2018, other income (expense), net includes net unrealized gains related to certain equity securities that were adjusted to fair value in the second quarter of 2018 in accordance with ASU No. 2016-01 of $126.4 million. See "Note 6—Financial Instruments" for additional information. ASU No. 2016-18, Restricted Cash In November 2016, the FASB issued ASU No. 2016-18, which requires companies to explain the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. Therefore, amounts generally described as restricted cash or restricted cash equivalents are combined with unrestricted cash and cash equivalents when reconciling the beginning and end of period balances on the statement of cash flows. ASU No. 2016-18 also requires companies to disclose the nature of their restricted cash and restricted cash equivalents balances. Additionally, when cash, cash equivalents, restricted cash, and restricted cash equivalents are presented within different captions on the balance sheet, a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet is required. ASU No. 2016-18 is effective for reporting periods beginning after December 15, 2017. The Company's adoption of ASU No. 2016-18 effective January 1, 2018, on a retrospective basis, did not have a material effect on its consolidated financial statements. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet to the total amounts shown in the consolidated statement of cash flows:
Restricted cash at December 31, 2018 primarily consists of a cash collateralized letter of credit and a deposit related to corporate credit cards. Restricted cash at December 31, 2017 primarily supports a letter of credit to a supplier, which was released to the Company in the second quarter of 2018. Restricted cash at December 31, 2016 primarily included funds held in escrow for the redemption and repurchase of IAC Senior Notes and the MyHammer tender offer. In the first quarter of 2017, the Senior Notes were redeemed and repurchased and the funds held in escrow for the MyHammer tender offer were returned to the Company. Restricted cash at December 31, 2015 primarily includes the repurchase of IAC Senior Notes. ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU No. 2018-15, which clarifies the accounting for implementation costs in a cloud computing arrangement that is a services contract to follow the internal-use software guidance of ASC 350-40, Intangibles - Goodwill and Other, Internal-use Software. The provisions of ASU No. 2018-15 are effective for reporting periods beginning after December 15, 2019, including interim periods and early adoption is permitted, including adoption in any interim period. The provisions of ASU No. 2018-15 may be adopted prospectively to all implementation costs incurred after the date of adoption or retrospectively. The Company early adopted the provisions of ASU No. 2018-15 on October 1, 2018 prospectively and the adoption of this standard did not have material impact on its consolidated financial statements. ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU No. 2018-07, which largely aligns the measurement and classification guidance for share-based payments granted to non-employees with the guidance for share-based payments granted to employees. The new guidance supersedes Subtopic 505-50, Equity - Equity-Based payments to Nonemployees. ASU No. 2018-07 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU No. 2018-07 effective April 1, 2018 and its adoption did not have a material effect on its consolidated financial statements. The effect of the adoption of ASU No. 2018-07 will be to minimize the volatility of expense related to stock-based awards to non-employees in the future. Accounting Pronouncement not yet adopted by the Company ASU No. 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU No. 2016-02, which supersedes existing guidance on accounting for leases 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. The Company will adopt the new lease guidance effective January 1, 2019. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to implement the transition method option provided by ASU No. 2018-11. The Company is not a lessor, 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 the adoption of 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 lease 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 agreements governing the outstanding debt of the Company or its MTCH and ANGI subsidiaries, or our credit agreement or the credit agreement of MTCH and ANGI because, in each circumstance, the leverage calculations are not affected by the lease 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:
Development of the selected software solution by the third-party vendor is ongoing. While significant progress has been made, certain key deliverables remain, which the Company expects to be delivered in March 2019. The Company's ability to adopt ASU No. 2016-02 in an efficient and effective manner is contingent upon the delivery and testing of these remaining deliverables. The Company has been able to develop a preliminary estimate of the impact of the adoption of ASU No. 2016-02 through the use of the third-party software solution, supplemented by our user acceptance testing. This preliminary estimate is that a $160 million right of use asset and related lease liability will be recognized on the Company's consolidated balance sheet upon adoption. The Company does not expect a material impact on its results of operations or cash flows. |
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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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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Estimated Useful Lives of Property and Equipment |
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Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table presents the impact of the adoption of ASU No. 2014-09 by segment under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, as reported, and ASC 605, Revenue Recognition, for the year ended December 31, 2018.
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Schedule of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet to the total amounts shown in the consolidated statement of cash flows:
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Schedule of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet to the total amounts shown in the consolidated statement of cash flows:
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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 income tax provision (benefit) 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, 2018 and 2017:
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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 provision (benefit) 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, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 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, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2018:
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:
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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. At December 31, 2018 and 2017, intangible assets with definite lives are as follows:
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Schedule of Expected Amortization of Intangible Assets | At December 31, 2018, 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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FINANCIAL INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Marketable Securities | At December 31, 2018 and 2017, the fair value of marketable securities are as follows:
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Schedule of Current Available-for-sale Marketable Securities | At December 31, 2017, current available-for-sale marketable debt securities are as follows:
At December 31, 2018, current available-for-sale marketable debt 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 debt securities and the related gross realized gains:
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Schedule of Long-term Investments | Long-term investments consist of:
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Schedule of Realized and Unrealized Gains (Losses) on Investments | The following table presents a summary of realized and unrealized gains and losses recorded in other income (expense), net, as adjustments to the carrying value of equity securities without readily determinable fair values held as of December 31, 2018. The gross unrealized gains principally relate to the Company's remaining investments in an investee following the sale of a portion of the Company's investment during the second quarter of 2018.
Realized and unrealized gains and losses for the Company's marketable equity security and investments without readily determinable fair values for the year ended December 31, 2018 are as follows:
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Schedule of Financial Instruments Measured at Fair Value on 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 Unobservable Inputs in Fair Value Measurement | The Company's financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are its contingent consideration arrangements.
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Schedule of Carrying Value and the Fair Value of 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:
_________________
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LONG-TERM DEBT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Long-term debt maturities:
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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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EARNINGS (LOSS) PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Outstanding Stock Options | Stock options outstanding at December 31, 2018 and changes during the year ended December 31, 2018 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, 2018:
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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, 2018 and changes during the year ended December 31, 2018 are as follows:
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SEGMENT INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information |
The following table presents the revenue of the Company's segments disaggregated by type of service:
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Schedule of Revenue by Geographic Areas |
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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 present operating income (loss) and Adjusted EBITDA by reportable segment:
_______________________________________________________________________________ (a) 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 businesses, and this measure is one of the primary metrics on 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. Adjusted EBITDA has certain limitations in that it does not take into account the impact to IAC's statement of operations of certain expenses. The following tables reconcile operating income (loss) for the Company's reportable segments and net earnings 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 by reportable segment:
_____________________________________ (b) 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.
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Schedule of Capital Expenditures by Segment | The following table presents capital expenditures by reportable segment:
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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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) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 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) |
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Guarantor and Nonguarantor Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Balance Sheet | Balance sheet at December 31, 2018:
Balance sheet at December 31, 2017:
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Schedule of Condensed Statement of Operations | Statement of operations for the year ended December 31, 2018:
____________________
Statement of operations for the year ended December 31, 2017:
Statement of operations for the year ended December 31, 2016:
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Schedule of Condensed Statement of Cash Flows | Statement of cash flows for the year ended December 31, 2018:
Statement of cash flows for the year ended December 31, 2017:
Statement of cash flows for the year ended December 31, 2016:
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QUARTERLY RESULTS (UNAUDITED) (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Results |
_______________________________________________________________________________
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ORGANIZATION - NARRATIVE (Details) |
Dec. 31, 2018 |
---|---|
Match Group | |
Noncontrolling Interest [Line Items] | |
Ownership interest (as a percent) | 81.10% |
Voting interest (as a percent) | 97.60% |
ANGI Homeservices | |
Noncontrolling Interest [Line Items] | |
Ownership interest (as a percent) | 83.90% |
Voting interest (as a percent) | 98.10% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 2,131,632 | $ 1,630,809 | $ 1,329,187 | $ 1,481,447 |
Restricted cash included in other current assets | 1,633 | 2,873 | 20,464 | 126 |
Restricted cash included in other assets | 420 | 0 | 10,548 | 20,100 |
Total cash, cash equivalents and restricted cash as shown on the consolidated statement of cash flows | $ 2,133,685 | $ 1,633,682 | $ 1,360,199 | $ 1,501,673 |
INCOME TAXES - Income before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
U.S. | $ 630,417 | $ (52,606) | $ (248,433) |
Foreign | 131,141 | 119,564 | 167,348 |
Earnings (loss) before income taxes | $ 761,558 | $ 66,958 | $ (81,085) |
INCOME TAXES - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Current income tax provision (benefit): | ||||
Federal | $ (2,849) | $ (31,844) | $ 23,343 | |
State | 2,569 | 1,964 | 3,662 | |
Foreign | 38,770 | 24,108 | 27,242 | |
Current income tax provision (benefit) | 38,490 | (5,772) | 54,247 | |
Deferred income tax provision (benefit): | ||||
Federal | (21,792) | (255,477) | (100,798) | |
State | 172 | (28,364) | (9,518) | |
Foreign | (13,059) | (1,437) | (8,865) | |
Deferred income tax benefit | (34,679) | (285,278) | (119,181) | |
Income tax provision (benefit) | $ 257,000 | $ 3,811 | $ (291,050) | $ (64,934) |
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred tax assets: | ||
Accrued expenses | $ 23,525 | $ 22,234 |
NOL carryforwards | 291,639 | 292,812 |
Tax credit carryforwards | 89,397 | 78,715 |
Stock-based compensation | 82,698 | 77,976 |
Other | 30,106 | 42,331 |
Total deferred tax assets | 517,365 | 514,068 |
Less valuation allowance | (115,853) | (132,598) |
Net deferred tax assets | 401,512 | 381,470 |
Deferred tax liabilities: | ||
Investment in subsidiaries | (238,650) | (247,167) |
Intangibles | (77,669) | (87,811) |
Fair value investment | (22,927) | |
Other | (21,080) | (15,241) |
Total deferred tax liabilities | (360,326) | (350,219) |
Net deferred tax assets | $ 41,186 | $ 31,251 |
INCOME TAXES - Income Tax Contingencies (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Balance at beginning of the period | $ 36,732 | $ 38,372 | $ 40,808 |
Additions based on tax positions related to the current year | 10,334 | 2,050 | 2,033 |
Additions for tax positions of prior years | 4,716 | 1,994 | 2,676 |
Reductions for tax positions of prior years | (400) | (3,761) | (743) |
Settlements | 0 | 0 | (5,107) |
Expiration of applicable statutes of limitations | (2,507) | (1,923) | (1,295) |
Balance at end of the period | $ 48,875 | $ 36,732 | $ 38,372 |
BUSINESS COMBINATION - Preliminary Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Sep. 29, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,726,859 | $ 2,559,066 | $ 1,924,052 | |
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 - Pro-Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
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 ANGI Homeservices Inc. shareholders | $ 364,496 | $ (143,133) |
Basic earnings (loss) per share attributable to ANGI Homeservices Inc. shareholders (USD per share) | $ 4.55 | $ (1.79) |
Diluted earnings (loss) per share attributable to ANGI Homeservices Inc. shareholders (USD per share) | $ 4.27 | $ (1.79) |
GOODWILL AND INTANGIBLE ASSETS - Summary (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 2,726,859 | $ 2,559,066 | $ 1,924,052 |
Intangible assets with indefinite lives | 458,104 | 459,143 | |
Intangible assets with definite lives, net of accumulated amortization | 173,318 | 204,594 | |
Total goodwill and intangible assets, net | $ 3,358,281 | $ 3,222,803 |
GOODWILL AND INTANGIBLE ASSETS - Expected Amortization of Intangible Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 71,155 | |
2020 | 51,916 | |
2021 | 19,433 | |
2022 | 16,310 | |
2023 | 10,239 | |
Thereafter | 4,265 | |
Total | $ 173,318 | $ 204,594 |
FINANCIAL INSTRUMENTS - Fair Value of Marketable Securities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Available-for-sale marketable debt securities | $ 123,246 | $ 4,995 |
Marketable equity security | 419 | 0 |
Total marketable securities | $ 123,665 | $ 4,995 |
FINANCIAL INSTRUMENTS - Current Available-for-Sale Marketable Securities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 123,246 | $ 4,995 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | (3) | 0 |
Fair Value | 123,246 | 4,995 |
Treasury discount notes | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 112,291 | |
Gross Unrealized Gains | 3 | |
Gross Unrealized Losses | (3) | |
Fair Value | 112,291 | |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,955 | 4,995 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 10,955 | $ 4,995 |
FINANCIAL INSTRUMENTS - Proceeds from Maturities and Sales of Current Available-for-Sale Marketable Securities (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Fair Value Disclosures [Abstract] | |||
Proceeds from maturities and sales of available-for-sale marketable debt securities | $ 333,600 | $ 114,350 | $ 279,485 |
Gross realized gains | $ 0 | $ 0 | $ 3,556 |
FINANCIAL INSTRUMENTS - Long-Term Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Equity securities without readily determinable fair values | $ 235,055 | $ 0 |
Equity method investments | 0 | 1,559 |
Cost method investments | 0 | 63,418 |
Total long-term investments | $ 235,055 | $ 64,977 |
FINANCIAL INSTRUMENTS - Realized and Unrealized Gains and Losses (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Adjustments to Carrying Value of Equity Securities without Readily Determinable Fair Value [Abstract] | |
Upward adjustments (gross unrealized gains) | $ 128,986 |
Downward adjustments including impairments (gross unrealized losses) | (4,931) |
Total | 124,055 |
Adjustments to Carrying Value of Non-Marketable Equity Securities [Abstract] | |
Realized gains, net, for equity securities sold | 27,874 |
Unrealized gains, net, on equity securities held | 124,170 |
Total gains recognized, net, in other income (expense), net | $ 152,044 |
FINANCIAL INSTRUMENTS - Unobservable Inputs of Fair Value Measurements (Details) - Contingent Consideration Arrangements - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Contingent Consideration Arrangement [Roll Forward] | ||
Balance at January 1 | $ (2,647) | $ (33,871) |
Fair value adjustments | (1,456) | (5,801) |
Included in other comprehensive income (loss) | 45 | (1,404) |
Fair value at date of acquisition | (25,521) | 0 |
Settlements | 948 | 38,429 |
Balance at December 31 | $ (28,631) | $ (2,647) |
FINANCIAL INSTRUMENTS - Carrying Value and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Current portion of long-term debt | $ (13,750) | $ (13,750) |
Long-term debt, net | (2,245,548) | (1,979,469) |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Current portion of long-term debt | (13,750) | (13,750) |
Long-term debt, net | (2,245,548) | (1,979,469) |
Unamortized original issue discount and debt issuance costs | (88,900) | (109,100) |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Current portion of long-term debt | (12,753) | (13,802) |
Long-term debt, net | $ (2,460,204) | $ (2,168,108) |
LONG-TERM DEBT - Aggregate Contractual Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
2019 | $ 13,750 | |
2020 | 13,750 | |
2021 | 13,750 | |
2022 | 1,004,489 | |
2023 | 452,500 | |
2024 | 400,000 | |
2027 | 450,000 | |
Total long-term debt | 2,348,239 | |
Less: Current portion of long-term debt | 13,750 | $ 13,750 |
Less: unamortized original issue discount | 61,377 | |
Less: unamortized debt issuance costs | 27,564 | |
Long-term debt, net | $ 2,245,548 | $ 1,979,469 |
ACCUMULATED OTHER COMPREHENSIVE LOSS - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Equity [Abstract] | ||
Tax (benefit) provision related to unrealized gains/losses on available-for-sale securities | $ 3.8 | $ 0.2 |
STOCK-BASED COMPENSATION - Weighted-Average Assumptions (Details) - Stock Options |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expected volatility (as a percent) | 27.00% | 29.00% | 29.00% |
Risk-free interest rate (as a percent) | 2.70% | 2.00% | 1.20% |
Expected term | 6 years 2 months 12 days | 5 years 2 months 18 days | 4 years 9 months 18 days |
Dividend yield (as a percent) | 0.00% |
SEGMENT INFORMATION - Revenue and Long-Lived Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenue and Long-lived Assets by Geography | |||
Revenue | $ 4,262,892 | $ 3,307,239 | $ 3,139,882 |
Long-lived assets (excluding goodwill and intangible assets) | 318,800 | 315,170 | |
United States | |||
Revenue and Long-lived Assets by Geography | |||
Revenue | 2,824,928 | 2,323,050 | 2,318,976 |
Long-lived assets (excluding goodwill and intangible assets) | 289,756 | 286,541 | |
All other countries | |||
Revenue and Long-lived Assets by Geography | |||
Revenue | 1,437,964 | 984,189 | $ 820,906 |
Long-lived assets (excluding goodwill and intangible assets) | $ 29,044 | $ 28,629 |
COMMITMENTS AND CONTINGENCIES - Future Minimum Payments under Operation Lease Agreements (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Future Minimum Payments Under Operating Lease Agreements | |||
2019 | $ 38,770 | ||
2020 | 46,440 | ||
2021 | 40,998 | ||
2022 | 34,066 | ||
2023 | 30,567 | ||
Thereafter | 255,563 | ||
Total | 446,404 | ||
Expenses charged to operations under operating lease agreements | $ 42,000 | $ 37,900 | $ 50,800 |
Proportion of most significant operating leases (as a percent) | 61.00% |
COMMITMENTS AND CONTINGENCIES - Commercial Commitments Outstanding (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Other Commitments | |
Less Than 1 Year | $ 40,877 |
1-3 Years | 23,897 |
3-5 Years | 0 |
More Than 5 Years | 2,272 |
Total Amounts Committed | 67,046 |
Purchase obligations | |
Other Commitments | |
Less Than 1 Year | 40,428 |
1-3 Years | 23,897 |
3-5 Years | 0 |
More Than 5 Years | 0 |
Total Amounts Committed | 64,325 |
Letters of credit and surety bonds | |
Other Commitments | |
Less Than 1 Year | 449 |
1-3 Years | 0 |
3-5 Years | 0 |
More Than 5 Years | 2,272 |
Total Amounts Committed | $ 2,721 |
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - Tinder Optionholder Litigation $ in Billions |
Aug. 31, 2018
plaintiff
|
Aug. 14, 2018
USD ($)
plaintiff
|
---|---|---|
Loss Contingencies [Line Items] | ||
Number of plaintiffs | 6 | 10 |
Number of plaintiffs who filed a discontinuance of claims | 4 | |
Pending Litigation | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ | $ 2 |
SUPPLEMENTAL CASH FLOW INFORMATION - Summary (Details) - USD ($) shares in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Oct. 19, 2018 |
Sep. 29, 2017 |
|
Debt Instrument | |||||
Fair value of contingent consideration liabilities | $ 25,500,000 | $ 0 | $ 200,000 | ||
Cash paid (received) during the year for: | |||||
Interest | 90,485,000 | 92,461,000 | 107,360,000 | ||
Income tax payments | 45,154,000 | 35,598,000 | 69,103,000 | ||
Income tax refunds | $ (33,698,000) | $ (42,025,000) | $ (23,877,000) | ||
Common Stock | |||||
Debt Instrument | |||||
Common stock issued (shares) | 262,303 | 260,624 | |||
Common stock | $ 262,000 | $ 261,000 | |||
ANGI Homeservices | |||||
Debt Instrument | |||||
Common stock issued (shares) | 12,800 | ||||
ANGI Homeservices | Common Stock | |||||
Debt Instrument | |||||
Common stock issued (shares) | 8,600 | 61,300 | |||
Common stock | $ 165,800,000 | $ 763,700,000 |
BENEFIT PLANS - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
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 | $ 12.9 | $ 11.1 | $ 10.0 |
All Other Countries | |||
Defined Contribution Plan Disclosure | |||
Defined contribution plan contributions | $ 3.4 | $ 2.5 | $ 2.1 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Other current assets: | ||
Capitalized costs to obtain a contract with a customer | $ 69,817 | $ 0 |
Prepaid expenses | 55,586 | 49,350 |
Capitalized downloadable search toolbar costs, net | 33,365 | 31,588 |
Income taxes receivable | 10,132 | 33,239 |
Production costs | 2,260 | 18,570 |
Other | 57,093 | 52,627 |
Other current assets | $ 228,253 | $ 185,374 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Accrued expenses and other current liabilities: | ||
Accrued employee compensation and benefits | $ 137,583 | $ 108,431 |
Accrued advertising expense | 105,520 | 96,445 |
Other | 191,783 | 162,048 |
Accrued expenses and other current liabilities | $ 434,886 | $ 366,924 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 1,104,103 | $ 1,104,592 | $ 1,059,122 | $ 995,075 | $ 950,585 | $ 828,434 | $ 767,387 | $ 760,833 | $ 4,262,892 | $ 3,307,239 | $ 3,139,882 |
Service revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 4,249,227 | 3,302,937 | 2,967,474 | ||||||||
Product revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 13,665 | $ 4,302 | $ 172,408 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Cost of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Cost of revenue: | |||||||||||
Cost of service revenue | $ 898,736 | $ 647,226 | $ 617,058 | ||||||||
Cost of product revenue | 12,410 | 3,782 | 138,672 | ||||||||
Cost of revenue | $ 253,722 | $ 237,238 | $ 218,224 | $ 201,962 | $ 199,727 | $ 166,290 | $ 139,033 | $ 145,958 | $ 911,146 | $ 651,008 | $ 755,730 |
CONSOLIDATED FINANCIAL STATEMENT DETAILS - Other (Expense) Income, Net (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Other income (expense), net: | |||
Other income (expense), net | $ 305,746 | $ (16,213) | $ 60,650 |
TRANSACTION AND INTEGRATION RELATED COSTS IN CONNECTION WITH THE COMBINATION - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Business Acquisition [Line Items] | |||
Stock-based compensation expense | $ 238,420 | $ 264,618 | $ 104,820 |
ANGI Homeservices | |||
Business Acquisition [Line Items] | |||
Transaction and integration related costs | 3,584 | 44,101 | |
Write-off due to deferred revenue | 5,500 | 7,800 | |
Stock-based compensation expense | $ 70,645 | $ 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, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Condensed Financial Statements, Captions [Line Items] | |||
Stated interest rate (as a percent) | 4.75% | 4.875% | 4.875% |
Proportion of voting interests acquired (as a percent) | 100.00% |
QUARTERLY RESULTS (UNAUDITED) - Summary (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Quarterly Financial Data [Abstract] | |||||||||||
Revenue | $ 1,104,103 | $ 1,104,592 | $ 1,059,122 | $ 995,075 | $ 950,585 | $ 828,434 | $ 767,387 | $ 760,833 | $ 4,262,892 | $ 3,307,239 | $ 3,139,882 |
Cost of revenue | 253,722 | 237,238 | 218,224 | 201,962 | 199,727 | 166,290 | 139,033 | 145,958 | 911,146 | 651,008 | 755,730 |
Operating income | 133,920 | 172,832 | 168,437 | 89,950 | 94,360 | (18,589) | 75,635 | 37,060 | 565,139 | 188,466 | (32,625) |
Net earnings | 217,477 | 171,577 | 280,854 | 87,839 | 23,349 | 225,639 | 80,557 | 28,463 | 757,747 | 358,008 | (16,151) |
Net earnings attributable to IAC shareholders | $ 191,752 | $ 145,774 | $ 218,353 | $ 71,082 | $ 32,804 | $ 179,643 | $ 66,268 | $ 26,209 | $ 626,961 | $ 304,924 | $ (41,280) |
Per share information attributable to IAC shareholders: | |||||||||||
Basic earnings per share (USD per share) | $ 2.29 | $ 1.75 | $ 2.61 | $ 0.86 | $ 0.40 | $ 2.22 | $ 0.84 | $ 0.34 | $ 7.52 | $ 3.81 | $ (0.52) |
Diluted earnings per share (USD per share) | $ 2.04 | $ 1.49 | $ 2.32 | $ 0.71 | $ 0.37 | $ 1.79 | $ 0.70 | $ 0.29 | $ 6.59 | $ 3.18 | $ (0.52) |
Stock-based compensation expense | $ 238,420 | $ 264,618 | $ 104,820 | ||||||||
Gain (loss) on sale of equity investments | $ 133,300 | ||||||||||
Impairment of intangible assets | $ 21,300 | ||||||||||
Income tax expense (benefit) | $ 257,000 | $ 3,811 | (291,050) | $ (64,934) | |||||||
Dictionary.com, Electus, Felix, and CityGrid | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||||||
Per share information attributable to IAC shareholders: | |||||||||||
Gain on sale of business | 92,500 | ||||||||||
HomeAdvisor | |||||||||||
Per share information attributable to IAC shareholders: | |||||||||||
Stock-based compensation expense | $ 14,400 | $ 12,300 | 12,800 | $ 14,600 | $ 15,800 | 60,900 | |||||
Angie's List | |||||||||||
Per share information attributable to IAC shareholders: | |||||||||||
After-tax costs | 2,000 | 4,100 | 13,900 | $ 17,400 | $ 13,900 | ||||||
Write-off due to deferred revenue | $ 1,800 | $ 2,800 | $ 7,600 |
SUBSEQUENT EVENTS (UNAUDITED) - Narrative (Details) - Senior Notes - Match Group Senior Notes due 2029 - Match Group - Subsequent Event $ in Millions |
Feb. 15, 2019
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Face amount of debt instrument | $ 350 |
Stated interest rate (as a percent) | 5.625% |
Label | Element | Value |
---|---|---|
Noncontrolling Interest [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 3,410,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 36,795,000 |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 36,795,000 |
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