EX-99.3 9 a08-22119_1ex99d3.htm EX-99.3

EXHIBIT 99.3

 

IAC/INTERACTIVECORP AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

 

Year Ending December 31, 2008

(In thousands)

 

 

 

Quarter Ended
March 31

 

Quarter Ended
June 30

 

Six Months
Ended
June 30

 

Product sales

 

$

25,912

 

$

30,051

 

$

55,963

 

Service revenue

 

344,744

 

324,113

 

668,857

 

Net revenue

 

370,656

 

354,164

 

724,820

 

Cost of sales—product sales (exclusive of depreciation shown separately below)

 

18,302

 

19,257

 

37,559

 

Cost of sales—service revenue (exclusive of depreciation shown separately below)

 

123,339

 

103,064

 

226,403

 

Gross profit

 

229,015

 

231,843

 

460,858

 

Selling and marketing expense

 

117,117

 

108,021

 

225,138

 

General and administrative expense

 

77,808

 

89,535

 

167,343

 

Other operating expense

 

17,081

 

12,512

 

29,593

 

Amortization of non-cash marketing

 

2,796

 

3,071

 

5,867

 

Amortization of intangibles

 

8,062

 

7,679

 

15,741

 

Depreciation

 

17,259

 

17,459

 

34,718

 

Operating loss

 

(11,108

)

(6,434

)

(17,542

)

Other income (expense):

 

 

 

 

 

 

 

Interest income

 

8,073

 

5,703

 

13,776

 

Interest expense

 

(11,978

)

(13,886

)

(25,864

)

Equity in income of unconsolidated affiliates

 

5,779

 

6,448

 

12,227

 

Other income (expense)

 

9,817

 

(98,741

)

(88,924

)

Total other income (expense), net

 

11,691

 

(100,476

)

(88,785

)

Earnings (loss) from continuing operations before income taxes and minority interest

 

583

 

(106,910

)

(106,327

)

Income tax (provision) benefit

 

(4,036

)

22,274

 

18,238

 

Minority interest in losses of consolidated subsidiaries

 

330

 

484

 

814

 

Loss from continuing operations

 

$

(3,123

)

$

(84,152

)

$

(87,275

)

 

Non-cash compensation expense is included in the following line items in the condensed combined statements of operations:

 

Cost of sales

 

$

1,462

 

$

1,436

 

$

2,898

 

Selling and marketing expense

 

1,599

 

1,574

 

3,173

 

General and administrative expense

 

15,779

 

15,556

 

31,335

 

Other operating expense

 

46

 

45

 

91

 

Total non-cash compensation expense

 

$

18,886

 

$

18,611

 

$

37,497

 

 

1



 

IAC/INTERACTIVECORP AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

 

Year Ended December 31, 2007

(In thousands)

 

 

 

Quarter Ended
March 31

 

Quarter Ended
June 30

 

Quarter Ended
September 30

 

Quarter Ended
December 31

 

Product sales

 

$

19,377

 

$

21,547

 

$

22,399

 

$

30,067

 

Service revenue

 

280,391

 

297,026

 

312,962

 

348,813

 

Net revenue

 

299,768

 

318,573

 

335,361

 

378,880

 

Cost of sales—product sales (exclusive of depreciation shown separately below)

 

13,682

 

15,343

 

15,379

 

20,503

 

Cost of sales—service revenue (exclusive of depreciation shown separately below)

 

107,019

 

112,363

 

125,265

 

144,767

 

Gross profit

 

179,067

 

190,867

 

194,717

 

213,610

 

Selling and marketing expense

 

100,738

 

100,652

 

81,639

 

108,493

 

General and administrative expense

 

63,626

 

60,906

 

64,910

 

84,109

 

Other operating expense

 

11,047

 

10,101

 

12,029

 

13,251

 

Amortization of non-cash marketing

 

507

 

23,501

 

9,072

 

16,590

 

Amortization of intangibles

 

8,027

 

8,010

 

10,267

 

9,429

 

Depreciation

 

14,169

 

14,678

 

15,107

 

15,907

 

Operating (loss) income

 

(19,047

)

(26,981

)

1,693

 

(34,169

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

17,235

 

17,109

 

13,644

 

10,943

 

Interest expense

 

(14,529

)

(15,228

)

(14,919

)

(14,378

)

Gain on sale of VUE interests

 

 

 

 

16,669

 

Equity in income of unconsolidated affiliates

 

6,982

 

5,676

 

3,885

 

5,809

 

Other income

 

818

 

8,061

 

10,295

 

16,342

 

Total other income, net

 

10,506

 

15,618

 

12,905

 

35,385

 

(Loss) earnings from continuing operations before income taxes and minority interest

 

(8,541

)

(11,363

)

14,598

 

1,216

 

Income tax benefit (provision)

 

2,709

 

5,058

 

(11,132

)

1,044

 

Minority interest in (income) losses of consolidated subsidiaries

 

(127

)

165

 

1,452

 

524

 

(Loss) earnings from continuing operations

 

$

(5,959

)

$

(6,140

)

$

4,918

 

$

2,784

 

 

Non-cash compensation expense is included in the following line items in the condensed combined statements of operations:

 

Cost of sales

 

$

1,343

 

$

1,390

 

$

1,285

 

$

1,634

 

Selling and marketing expense

 

1,471

 

1,521

 

1,405

 

1,789

 

General and administrative expense

 

14,891

 

15,019

 

13,902

 

17,754

 

Other operating expense

 

45

 

45

 

43

 

48

 

Total non-cash compensation expense

 

$

17,750

 

$

17,975

 

$

16,635

 

$

21,225

 

 

2



 

IAC/INTERACTIVECORP AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS (Continued)

 

Year Ended December 31, 2007

(In thousands)

 

 

 

Quarter Ended
March 31

 

Six Months
Ended
June 30

 

Nine Months
Ended
September 30

 

Year Ended
December 31

 

Product sales

 

$

19,377

 

$

40,924

 

$

63,323

 

$

93,390

 

Service revenue

 

280,391

 

577,417

 

890,379

 

1,239,192

 

Net revenue

 

299,768

 

618,341

 

953,702

 

1,332,582

 

Cost of sales—product sales (exclusive of depreciation shown separately below)

 

13,682

 

29,025

 

44,404

 

64,907

 

Cost of sales—service revenue (exclusive of depreciation shown separately below)

 

107,019

 

219,382

 

344,647

 

489,414

 

Gross profit

 

179,067

 

369,934

 

564,651

 

778,261

 

Selling and marketing expense

 

100,738

 

201,390

 

283,029

 

391,522

 

General and administrative expense

 

63,626

 

124,532

 

189,442

 

273,551

 

Other operating expense

 

11,047

 

21,148

 

33,177

 

46,428

 

Amortization of non-cash marketing

 

507

 

24,008

 

33,080

 

49,670

 

Amortization of intangibles

 

8,027

 

16,037

 

26,304

 

35,733

 

Depreciation

 

14,169

 

28,847

 

43,954

 

59,861

 

Operating loss

 

(19,047

)

(46,028

)

(44,335

)

(78,504

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

17,235

 

34,344

 

47,988

 

58,931

 

Interest expense

 

(14,529

)

(29,757

)

(44,676

)

(59,054

)

Gain on sale of VUE interests

 

 

 

 

16,669

 

Equity in income of unconsolidated affiliates

 

6,982

 

12,658

 

16,543

 

22,352

 

Other income

 

818

 

8,879

 

19,174

 

35,516

 

Total other income, net

 

10,506

 

26,124

 

39,029

 

74,414

 

Loss from continuing operations before income taxes and minority interest

 

(8,541

)

(19,904

)

(5,306

)

(4,090

)

Income tax benefit (provision)

 

2,709

 

7,767

 

(3,365

)

(2,321

)

Minority interest in (income) losses of consolidated subsidiaries

 

(127

)

38

 

1,490

 

2,014

 

Loss from continuing operations

 

$

(5,959

)

$

(12,099

)

$

(7,181

)

$

(4,397

)

 

Non-cash compensation expense is included in the following line items in the condensed combined statements of operations:

 

Cost of sales

 

$

1,343

 

$

2,733

 

$

4,018

 

$

5,652

 

Selling and marketing expense

 

1,471

 

2,992

 

4,397

 

6,186

 

General and administrative expense

 

14,891

 

29,910

 

43,812

 

61,566

 

Other operating expense

 

45

 

90

 

133

 

181

 

Total non-cash compensation expense

 

$

17,750

 

$

35,725

 

$

52,360

 

$

73,585

 

 

3



 

IAC/INTERACTIVECORP AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

 

Year Ended December 31, 2006

(In thousands)

 

 

 

Quarter Ended
March 31

 

Quarter Ended
June 30

 

Quarter Ended
September 30

 

Quarter Ended
December 31

 

Product sales

 

$

7,543

 

$

13,599

 

$

14,370

 

$

20,509

 

Service revenue

 

209,392

 

232,720

 

240,709

 

261,751

 

Net revenue

 

216,935

 

246,319

 

255,079

 

282,260

 

Cost of sales—product sales (exclusive of depreciation shown separately below)

 

5,796

 

10,222

 

10,629

 

14,887

 

Cost of sales—service revenue (exclusive of depreciation shown separately below)

 

73,500

 

80,795

 

80,007

 

93,244

 

Gross profit

 

137,639

 

155,302

 

164,443

 

174,129

 

Selling and marketing expense

 

82,389

 

83,926

 

71,386

 

84,819

 

General and administrative expense

 

58,909

 

64,788

 

60,352

 

66,306

 

Other operating expense

 

8,089

 

8,531

 

10,806

 

10,261

 

Amortization of non-cash marketing

 

8,464

 

9,532

 

14,629

 

4,500

 

Amortization of intangibles

 

14,578

 

14,827

 

5,054

 

7,769

 

Depreciation

 

12,962

 

12,711

 

14,046

 

13,185

 

Operating loss

 

(47,752

)

(39,013

)

(11,830

)

(12,711

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

16,856

 

17,364

 

13,966

 

15,566

 

Interest expense

 

(14,523

)

(15,181

)

(14,230

)

(13,943

)

Equity in income of unconsolidated affiliates

 

8,297

 

7,491

 

7,487

 

8,052

 

Other (expense) income

 

(4,572

)

6,235

 

4,656

 

(8,075

)

Total other income, net

 

6,058

 

15,909

 

11,879

 

1,600

 

(Loss) earnings from continuing operations before income taxes and minority interest

 

(41,694

)

(23,104

)

49

 

(11,111

)

Income tax benefit

 

3,640

 

577

 

4,037

 

40,207

 

Minority interest in losses (income) of consolidated subsidiaries

 

35

 

876

 

98

 

(242

)

(Loss) earnings from continuing operations

 

$

(38,019

)

$

(21,651

)

$

4,184

 

$

28,854

 

 

Non-cash compensation expense is included in the following line items in the condensed combined statements of operations:

 

Cost of sales

 

$

1,541

 

$

1,620

 

$

801

 

$

1,109

 

Selling and marketing expense

 

1,503

 

1,772

 

877

 

1,212

 

General and administrative expense

 

15,454

 

18,455

 

9,818

 

13,086

 

Other operating expense

 

17

 

36

 

26

 

34

 

Total non-cash compensation expense

 

$

18,515

 

$

21,883

 

$

11,522

 

$

15,441

 

 

4



 

IAC/INTERACTIVECORP AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS (Continued)

 

Year Ended December 31, 2006

(In thousands)

 

 

 

Quarter Ended
March 31

 

Six Months
Ended
June 30

 

Nine Months
Ended
September 30

 

Year Ended
December 31

 

Product sales

 

$

7,543

 

$

21,142

 

$

35,512

 

$

56,021

 

Service revenue

 

209,392

 

442,112

 

682,821

 

944,572

 

Net revenue

 

216,935

 

463,254

 

718,333

 

1,000,593

 

Cost of sales—product sales (exclusive of depreciation shown separately below)

 

5,796

 

16,018

 

26,647

 

41,534

 

Cost of sales—service revenue (exclusive of depreciation shown separately below)

 

73,500

 

154,295

 

234,302

 

327,546

 

Gross profit

 

137,639

 

292,941

 

457,384

 

631,513

 

Selling and marketing expense

 

82,389

 

166,315

 

237,701

 

322,520

 

General and administrative expense

 

58,909

 

123,697

 

184,049

 

250,355

 

Other operating expense

 

8,089

 

16,620

 

27,426

 

37,687

 

Amortization of non-cash marketing

 

8,464

 

17,996

 

32,625

 

37,125

 

Amortization of intangibles

 

14,578

 

29,405

 

34,459

 

42,228

 

Depreciation

 

12,962

 

25,673

 

39,719

 

52,904

 

Operating loss

 

(47,752

)

(86,765

)

(98,595

)

(111,306

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

16,856

 

34,220

 

48,186

 

63,752

 

Interest expense

 

(14,523

)

(29,704

)

(43,934

)

(57,877

)

Equity in income of unconsolidated affiliates

 

8,297

 

15,788

 

23,275

 

31,327

 

Other (expense) income

 

(4,572

)

1,663

 

6,319

 

(1,756

)

Total other income, net

 

6,058

 

21,967

 

33,846

 

35,446

 

Loss from continuing operations before income taxes and minority interest

 

(41,694

)

(64,798

)

(64,749

)

(75,860

)

Income tax benefit

 

3,640

 

4,217

 

8,254

 

48,461

 

Minority interest in losses of consolidated subsidiaries

 

35

 

911

 

1,009

 

767

 

Loss from continuing operations

 

$

(38,019

)

$

(59,670

)

$

(55,486

)

$

(26,632

)

 

Non-cash compensation expense is included in the following line items in the condensed combined statements of operations:

 

Cost of sales

 

$

1,541

 

$

3,161

 

$

3,962

 

$

5,071

 

Selling and marketing expense

 

1,503

 

3,275

 

4,152

 

5,364

 

General and administrative expense

 

15,454

 

33,909

 

43,727

 

56,813

 

Other operating expenses

 

17

 

53

 

79

 

113

 

Total non-cash compensation expense

 

$

18,515

 

$

40,398

 

$

51,920

 

$

67,361

 

 

5