Exhibit 99.1

IAC REPORTS Q3 RESULTS

NEW YORK— October 29, 2013—IAC (Nasdaq: IACI) released third quarter 2013 results today.

SUMMARY RESULTS

$ in millions (except per share amounts)

	Q3 2013		Q3 2012		Growth
Revenue	$	756.9	$	714.5	6	%

Operating Income Before Amortization	150.0		106.6		41	%
Adjusted Net Income	111.4		67.4		65	%
Adjusted EPS	1.29		0.71		82	%

Operating Income	122.0		78.0		56	%
Net Income	96.9		40.7		138	%
GAAP Diluted EPS	1.13		0.43		162	%

See reconciliations of GAAP to non-GAAP measures beginning on page 9.

· 41% Operating Income Before Amortization growth, the 18th consecutive quarter of double-digit growth

· 82% Adjusted EPS growth

· $324.3 million in cash flow from operating activities attributable to continuing operations

· Quarterly cash dividend of $0.24 per share declared, payable on December 1, 2013 to IAC stockholders of record as of the close of business on November 15, 2013

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

DISCUSSION OF FINANCIAL AND OPERATING RESULTS

	Q3 2013			Q3 2012			Growth
	$ in millions
Revenue
Search & Applications	$	407.3		$	370.2		10	%
Match	201.1			178.2			13	%
Local	62.8			84.3			-26	%
Media	51.0			52.7			-3	%
Other	35.1			29.1			21	%
Intercompany Elimination	(0.4		)	(0.1		)	-482	%
	$	756.9		$	714.5		6	%
Operating Income Before Amortization
Search & Applications	$	94.6		$	69.2		37	%
Match	68.4			60.0			14	%
Local	12.4			7.8			59	%
Media	(8.0		)	(12.2		)	35	%
Other	(1.9		)	(2.3		)	17	%
Corporate	(15.6		)	(15.9		)	2	%
	$	150.0		$	106.6		41	%
Operating Income (Loss)
Search & Applications	$	87.8		$	69.0		27	%
Match	64.8			56.1			16	%
Local	9.9			7.3			34	%
Media	(8.5		)	(13.2		)	36	%
Other	(2.5		)	(2.7		)	6	%
Corporate	(29.4		)	(38.6		)	24	%
	$	122.0		$	78.0		56	%

Search & Applications

Websites revenue increased primarily due to the contribution from About.com (acquired September 24, 2012) and CityGrid Media (moved from Local to Search & Applications effective July 1, 2013). Applications revenue increased modestly versus the prior year period. Profits increased primarily due to lower cost of acquisition as a percentage of revenue and the contribution from About.com. Operating income in the current year period reflects an increase of $6.7 million in amortization of intangibles primarily related to the acquisition of About.com.

Match

Core, Meetic and Developing revenues grew 7%, 11% and 58% to $118.8 million, $56.3 million and $26.0 million, respectively. Core and Meetic revenue growth was driven by increased subscribers. Developing revenue growth was driven by increased subscribers and the contribution of Twoo, which was not in the prior year period. Operating Income Before Amortization grew in line with revenues.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

OPERATING METRICS

	Q3 2013		Q3 2012		Growth

SEARCH & APPLICATIONS (in millions)
Revenue
Websites (a)	$	214.9	$	183.0	17	%
Applications (b)	192.4		187.2		3	%
Total Revenue	$	407.3	$	370.2	10	%

Queries
Websites (c)	3,707		2,801		32	%
Applications (d)	5,348		4,926		9	%
Total Queries	9,055		7,726		17	%

MATCH (in thousands)
Paid Subscribers
Core (e)	1,953		1,792		9	%
Meetic (f)	841		768		9	%
Developing (g)	514		259		99	%
Total Paid Subscribers	3,308		2,818		17	%

HOMEADVISOR (in thousands)
Domestic Service Requests (h)	1,630		1,710		-5	%
Domestic Accepts (i)	1,895		2,141		-12	%

International Service Requests (h)	257		208		23	%
International Accepts (i)	308		247		24	%

(a) Websites revenue includes Ask.com, About.com, CityGrid Media and Dictionary.com, excluding downloadable applications related revenue.

(b) Applications revenue includes B2C and B2B, as well as downloadable applications related revenue from Ask.com and Dictionary.com.

(c) Websites queries include Ask.com, but exclude Ask.com’s downloadable applications, About.com, CityGrid Media and Dictionary.com.

(d) Applications queries include B2C and B2B, as well as downloadable applications queries from Ask.com.

(e) Core consists of Match.com in the United States, Chemistry and People Media.

(f) Meetic consists of the publicly traded personals company Meetic S.A., excluding Twoo.

(g) Developing includes OkCupid, DateHookup, Twoo and Match’s international operations, excluding Meetic S.A.

(h) Fully completed and submitted customer service requests on HomeAdvisor.

(i) The number of times service requests are accepted by service professionals. A service request can be transmitted to and accepted by more than one service professional.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

DILUTIVE SECURITIES

IAC has various tranches of dilutive securities. The table below details these securities as well as potential dilution at various stock prices (shares in millions; rounding differences may occur).

		Avg.
		Exercise		As of
	Shares	Price		10/25/13			Dilution at:

Share Price				$	56.29		$	60.00		$	65.00		$	70.00		$	75.00

Absolute Shares as of 10/25/13	83.3			83.3			83.3			83.3			83.3			83.3

RSUs and Other	1.8			1.8			1.8			1.7			1.6			1.6
Options	9.1	$	35.28	3.4			3.8			4.2			4.5			4.8

Total Dilution				5.3			5.5			5.9			6.2			6.4
% Dilution				5.9		%	6.2		%	6.6		%	6.9		%	7.2		%
Total Diluted Shares Outstanding				88.5			88.8			89.2			89.5			89.7

CONFERENCE CALL

IAC will audiocast its conference call with investors and analysts discussing the Company’s Q3 financial results on Tuesday, October 29, 2013, at 4:30 p.m. Eastern Time (ET). This call will include the disclosure of certain information, including forward-looking information, which may be material to an investor’s understanding of IAC’s business. The live audiocast is open to the public at www.iac.com/investors.htm.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

GAAP FINANCIAL STATEMENTS

IAC CONSOLIDATED STATEMENT OF OPERATIONS

($ in thousands; except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012

Revenue	$	756,872		$	714,470		$	2,298,532		$	2,035,682
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	248,856			262,275			777,527			722,879
Selling and marketing expense	248,282			235,130			738,349			665,168
General and administrative expense	75,977			93,074			275,216			271,185
Product development expense	35,232			27,596			104,401			82,628
Depreciation	13,489			13,150			44,541			37,490
Amortization of intangibles	13,032			5,212			45,247			18,058
Total costs and expenses	634,868			636,437			1,985,281			1,797,408

Operating income	122,004			78,033			313,251			238,274

Equity in losses of unconsolidated affiliates	(3,253		)	(3,298		)	(4,422		)	(28,208		)
Interest expense	(7,623		)	(1,391		)	(22,944		)	(4,102		)
Other income, net	16,719			447			18,373			2,835
Earnings from continuing operations before income taxes	127,847			73,791			304,258			208,799
Income tax provision	(36,126		)	(27,606		)	(101,288		)	(83,360		)
Earnings from continuing operations	91,721			46,185			202,970			125,439
Earnings (loss) from discontinued operations, net of tax	3,914			(5,624		)	1,902			(6,581		)
Net earnings	95,635			40,561			204,872			118,858
Net loss (earnings) attributable to noncontrolling interests	1,305			156			3,995			(331		)
Net earnings attributable to IAC shareholders	$	96,940		$	40,717		$	208,867		$	118,527

Per share information attributable to IAC shareholders:
Basic earnings per share from continuing operations	$	1.12		$	0.52		$	2.47		$	1.46
Diluted earnings per share from continuing operations	$	1.08		$	0.49		$	2.39		$	1.35

Basic earnings per share	$	1.17		$	0.46		$	2.50		$	1.38
Diluted earnings per share	$	1.13		$	0.43		$	2.41		$	1.28

Dividends declared per common share	$	0.24		$	0.24		$	0.72		$	0.48

Non-cash compensation expense by function:
Cost of revenue	$	700		$	1,550		$	2,001		$	4,775
Selling and marketing expense	820			1,386			2,000			3,512
General and administrative expense	11,478			18,850			31,685			52,378
Product development expense	1,367			1,565			3,162			4,593
Total non-cash compensation expense	$	14,365		$	23,351		$	38,848		$	65,258

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

IAC CONSOLIDATED BALANCE SHEET

($ in thousands)

	September 30,			December 31,
	2013			2012
ASSETS

Cash and cash equivalents	$	741,652		$	749,977
Marketable securities	26,340			20,604
Accounts receivable, net	209,949			229,830
Other current assets	151,980			156,339
Total current assets	1,129,921			1,156,750

Property and equipment, net	290,470			270,512
Goodwill	1,672,705			1,616,154
Intangible assets, net	458,371			482,904
Long-term investments	164,170			161,278
Other non-current assets	89,145			118,230
TOTAL ASSETS	$	3,804,782		$	3,805,828

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Current maturities of long-term debt	$	—		$	15,844
Accounts payable, trade	72,966			98,314
Deferred revenue	161,950			155,499
Accrued expenses and other current liabilities	366,635			355,232
Total current liabilities	601,551			624,889

Long-term debt, net of current maturities	580,000			580,000
Income taxes payable	411,172			479,945
Deferred income taxes	326,109			323,403
Other long-term liabilities	65,175			31,830

Redeemable noncontrolling interests	32,779			58,126

Commitments and contingencies

SHAREHOLDERS’ EQUITY
Common stock	251			251
Class B convertible common stock	16			16
Additional paid-in capital	11,585,545			11,607,367
Accumulated deficit	(109,652		)	(318,519		)
Accumulated other comprehensive loss	(6,625		)	(32,169		)
Treasury stock	(9,734,479		)	(9,601,218		)
Total IAC shareholders’ equity	1,735,056			1,655,728
Noncontrolling interests	52,940			51,907
Total shareholders’ equity	1,787,996			1,707,635
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	3,804,782		$	3,805,828

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

IAC CONSOLIDATED STATEMENT OF CASH FLOWS

($ in thousands)

	Nine Months Ended September 30,
	2013			2012

Cash flows from operating activities attributable to continuing operations:
Net earnings	$	204,872		$	118,858
Less: earnings (loss) from discontinued operations, net of tax	1,902			(6,581		)
Earnings from continuing operations	202,970			125,439
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities attributable to continuing operations:
Non-cash compensation expense	38,848			65,258
Depreciation	44,541			37,490
Amortization of intangibles	45,247			18,058
Excess tax benefits from stock-based awards	(26,430		)	(23,486		)
Deferred income taxes	(5,939		)	5,410
Equity in losses of unconsolidated affiliates	4,422			28,208
Acquisition-related contingent consideration fair value adjustment	6,339			—
Gain on sales of long-term investments	(18,141		)	(1,876		)
Gain on sales of assets	(14,755		)	—
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	10,810			(16,443		)
Other current assets	(19,916		)	(9,749		)
Accounts payable and other current liabilities	(6,159		)	18,700
Income taxes payable	48,136			52,965
Deferred revenue	(1,406		)	10,575
Other, net	15,763			13,058
Net cash provided by operating activities attributable to continuing operations	324,330			323,607
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	(39,457		)	(377,123		)
Capital expenditures	(64,114		)	(32,363		)
Proceeds from maturities and sales of marketable debt securities	12,502			79,353
Purchases of marketable debt securities	—			(47,902		)
Proceeds from sales of long-term investments	42,286			12,744
Purchases of long-term investments	(26,605		)	(10,031		)
Other, net	8,904			(12,264		)
Net cash used in investing activities attributable to continuing operations	(66,484		)	(387,586		)
Cash flows from financing activities attributable to continuing operations:
Purchase of treasury stock	(168,376		)	(434,041		)
Net proceeds from stock-based award activities	6,456			320,070
Dividends	(58,882		)	(43,695		)
Excess tax benefits from stock-based awards	26,430			23,486
Purchase of noncontrolling interests	(55,561		)	(4,891		)
Principal payments on long-term debt	(15,844		)	—
Other, net	(3,386		)	195
Net cash used in financing activities attributable to continuing operations	(269,163		)	(138,876		)
Total cash used in continuing operations	(11,317		)	(202,855		)
Total cash provided by (used in) discontinued operations	2,257			(1,866		)
Effect of exchange rate changes on cash and cash equivalents	735			2,347
Net decrease in cash and cash equivalents	(8,325		)	(202,374		)
Cash and cash equivalents at beginning of period	749,977			704,153
Cash and cash equivalents at end of period	$	741,652		$	501,779

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

IAC RECONCILIATION OF OPERATING CASH FLOW FROM CONTINUING OPERATIONS TO FREE CASH FLOW

($ in millions; rounding differences may occur)

	Nine Months Ended September 30,
	2013			2012
Net cash provided by operating activities attributable to continuing operations	$	324.3		$	323.6
Capital expenditures	(64.1		)	(32.4		)
Tax refunds related to sales of a business and an investment	(0.6		)	(1.9		)
Free Cash Flow	$	259.6		$	289.3

For the nine months ended September 30, 2013, consolidated Free Cash Flow decreased $29.7 million from the prior year period due to higher capital expenditures.

IAC RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

(in thousands except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net earnings attributable to IAC shareholders	$	96,940		$	40,717		$	208,867		$	118,527
Non-cash compensation expense	14,365			23,351			38,848			65,258
Amortization of intangibles	13,032			5,212			45,247			18,058
Acquisition-related contingent consideration fair value adjustment	632			—			6,339			—
News_Beast re-measurement loss	—			3,000			—			21,629
Gain on sale of VUE interests and related effects	1,015			1,044			3,032			2,579
Discontinued operations, net of tax	(3,914		)	5,624			(1,902		)	6,581
Impact of income taxes and noncontrolling interests	(10,629		)	(11,499		)	(33,377		)	(35,767		)
Adjusted Net Income	$	111,441		$	67,449		$	267,054		$	196,865

GAAP Basic weighted average shares outstanding	83,094			88,296			83,636			85,766
Options, warrants and RSUs, treasury method	2,978			6,394			3,032			7,026
GAAP Diluted weighted average shares outstanding	86,072			94,690			86,668			92,792
Impact of RSUs	530			867			442			2,430
Adjusted EPS shares outstanding	86,602			95,557			87,110			95,222

Diluted earnings per share	$	1.13		$	0.43		$	2.41		$	1.28

Adjusted EPS	$	1.29		$	0.71		$	3.07		$	2.07

For Adjusted EPS purposes, the impact of RSUs on shares outstanding is based on the weighted average number of RSUs outstanding, including performance-based RSUs outstanding that the Company believes are probable of vesting. For GAAP diluted EPS purposes, RSUs, including performance-based RSUs for which the performance criteria have been met, are included on a treasury method basis.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

IAC RECONCILIATION OF SEGMENT NON-GAAP MEASURE TO GAAP MEASURE

($ in millions; rounding differences may occur)

	For the three months ended September 30, 2013
	Operating Income Before Amortization			Non-cash compensation expense			Amortization of intangibles			Acquisition- related contingent consideration fair value adjustment			Operating income (loss)
Search & Applications (a)	$	94.6		$	—		$	(6.9	)	$	—		$	87.8
Match	68.4			(0.3		)	(2.7		)	(0.6		)	64.8
Local	12.4			—			(2.6		)	—			9.9
Media	(8.0		)	(0.2		)	(0.3		)	—			(8.5		)
Other	(1.9		)	—			(0.6		)	—			(2.5		)
Corporate	(15.6		)	(13.8		)	—			—			(29.4		)
Total	$	150.0		$	(14.4	)	$	(13.0	)	$	(0.6	)	$	122.0

(a) Includes the results of The About Group
The About Group	$	12.1		$	—		$	(6.5	)	$	—		$	5.6

Supplemental: Depreciation
Search & Applications	$	3.9
Match	5.0
Local	1.3
Media	0.5
Other	0.4
Corporate	2.4
Total depreciation	$	13.5

	For the three months ended September 30, 2012
	Operating Income Before Amortization			Non-cash compensation expense			Amortization of intangibles			Operating income (loss)
Search & Applications	$	69.2		$	—		$	(0.1	)	$	69.0
Match	60.0			(0.6		)	(3.3		)	56.1
Local	7.8			—			(0.5		)	7.3
Media	(12.2		)	(0.1		)	(0.9		)	(13.2		)
Other	(2.3		)	(0.1		)	(0.4		)	(2.7		)
Corporate	(15.9		)	(22.7		)	—			(38.6		)
Total	$	106.6		$	(23.4	)	$	(5.2	)	$	78.0

Supplemental: Depreciation
Search & Applications	$	3.3
Match	4.5
Local	2.5
Media	0.4
Other	0.3
Corporate	2.1
Total depreciation	$	13.1

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

IAC RECONCILIATION OF SEGMENT NON-GAAP MEASURE TO GAAP MEASURE

($ in millions; rounding differences may occur)

	For the nine months ended September 30, 2013
	Operating Income Before Amortization			Non-cash compensation expense			Amortization of intangibles			Acquisition- related contingent consideration fair value adjustment			Operating income (loss)
Search & Applications (b)	$	284.3		$	—		$	(20.2	)	$	—		$	264.1
Match	182.4			(0.5		)	(11.3		)	(6.3		)	164.2
Local	13.4			—			(10.9		)	—			2.5
Media	(19.9		)	(0.6		)	(0.8		)	—			(21.3		)
Other	(7.8		)	—			(2.0		)	—			(9.8		)
Corporate	(48.7		)	(37.6		)	—			—			(86.3		)
Total	$	403.7		$	(38.8	)	$	(45.2	)	$	(6.3	)	$	313.3

(b) Includes the results of The About Group
The About Group	$	40.5		$	—		$	(19.4	)	$	—		$	21.1

Supplemental: Depreciation
Search & Applications	$	14.1
Match	14.4
Local	6.4
Media	1.6
Other	1.0
Corporate	7.0
Total depreciation	$	44.5

	For the nine months ended September 30, 2012
	Operating Income Before Amortization			Non-cash compensation expense			Amortization of intangibles			Operating income (loss)
Search & Applications	$	216.8		$	—		$	(0.2	)	$	216.6
Match	160.0			(2.0		)	(14.8		)	143.1
Local	23.6			—			(0.8		)	22.8
Media	(25.4		)	(0.6		)	(1.2		)	(27.2		)
Other	(5.4		)	(0.1		)	(1.1		)	(6.6		)
Corporate	(47.9		)	(62.6		)	—			(110.5		)
Total	$	321.6		$	(65.3	)	$	(18.1	)	$	238.3

Supplemental: Depreciation
Search & Applications	$	10.0
Match	11.8
Local	7.7
Media	0.9
Other	0.8
Corporate	6.3
Total depreciation	$	37.5

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

IAC’S PRINCIPLES OF FINANCIAL REPORTING

IAC reports Operating Income Before Amortization, Adjusted Net Income, Adjusted EPS and Free Cash Flow, all of which are supplemental measures to GAAP. These measures are among the primary metrics by which we evaluate the performance of our businesses, on which our internal budgets are based and by which management is compensated. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. IAC endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measures with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures, which are included in this release. Interim results are not necessarily indicative of the results that may be expected for a full year.

Definitions of Non-GAAP Measures

Operating Income Before Amortization is defined as operating income excluding, if applicable: (1) non-cash compensation expense, (2) amortization and impairment of intangibles, (3) goodwill impairment, (4) acquisition-related contingent consideration fair value adjustments and (5) one-time items. We believe this measure is useful to investors because it represents the consolidated operating results from IAC’s segments, taking into account depreciation, which we believe is an ongoing cost of doing business, but excluding the effects of any other non-cash expenses. Operating Income Before Amortization has certain limitations in that it does not take into account the impact to IAC’s statement of operations of certain expenses, including non-cash compensation and acquisition-related accounting.

Adjusted Net Income generally captures all items on the statement of operations that have been, or ultimately will be, settled in cash and is defined as net earnings attributable to IAC shareholders excluding, net of tax effects and noncontrolling interests, if applicable: (1) non-cash compensation expense, (2) amortization and impairment of intangibles, (3) goodwill impairment, (4) acquisition-related contingent consideration fair value adjustments, (5) income or loss effects related to IAC’s former passive ownership in VUE, (6) the re-measurement loss recorded upon acquiring control of News_Beast, (7) one-time items and (8) discontinued operations. We believe Adjusted Net Income is useful to investors because it represents IAC’s consolidated results, taking into account depreciation, which we believe is an ongoing cost of doing business, as well as other charges that are not allocated to the operating businesses such as interest expense, income taxes and noncontrolling interests, but excluding the effects of any other non-cash expenses.

Adjusted EPS is defined as Adjusted Net Income divided by fully diluted weighted average shares outstanding for Adjusted EPS purposes. We include dilution from options and warrants in accordance with the treasury stock method and include all restricted stock units (“RSUs”) in shares outstanding for Adjusted EPS, with performance-based RSUs included based on the number of shares that the Company believes are probable of vesting. This differs from the GAAP method for including RSUs, which are treated on a treasury method, and performance-based RSUs, which are included for GAAP purposes only to the extent the performance criteria have been met (assuming the end of the reporting period is the end of the contingency period). Shares outstanding for Adjusted EPS purposes are therefore higher than shares outstanding for GAAP EPS purposes. We believe Adjusted EPS is useful to investors because it represents, on a per share basis, IAC’s consolidated results, taking into account depreciation, which we believe is an ongoing cost of doing business, as well as other charges which are not allocated to the operating businesses such as interest expense, income taxes and noncontrolling interests, but excluding the effects of any other non-cash expenses. Adjusted Net Income and Adjusted EPS have the same limitations as Operating Income Before Amortization, and in addition Adjusted Net Income and Adjusted EPS do not account for IAC’s former passive ownership in VUE. Therefore, we think it is important to evaluate these measures along with our consolidated statement of operations.

Free Cash Flow is defined as net cash provided by operating activities, less capital expenditures. In addition, Free Cash Flow excludes, if applicable, tax payments and refunds related to the sales of certain businesses and investments, including IAC’s interests in VUE, an internal restructuring and dividends received that represent a return of capital due to the exclusion of the proceeds from these sales and dividends from cash provided by operating activities. We believe Free Cash Flow is useful to investors because it represents the cash that our operating businesses generate, before taking into account non-operational cash movements. Free Cash Flow has certain limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent the residual cash flow for discretionary expenditures. For example, it does not take into account stock repurchases. Therefore, we think it is important to evaluate Free Cash Flow along with our consolidated statement of cash flows.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT

IAC’S PRINCIPLES OF FINANCIAL REPORTING - continued

One-Time Items

Operating Income Before Amortization and Adjusted Net Income are presented before one-time items, if applicable. These items are truly one-time in nature and non-recurring, infrequent or unusual, and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with SEC rules. GAAP results include one-time items. For the periods presented in this release, there are no adjustments for one-time items.

Non-Cash Expenses That Are Excluded From Our Non-GAAP Measures

Non-cash compensation expense consists principally of expense associated with the grants, including unvested grants assumed in acquisitions, of stock options, restricted stock units and performance-based RSUs. These expenses are not paid in cash, and we include the related shares in our fully diluted shares outstanding which, for stock options and restricted stock units are included on a treasury method basis, and for performance-based RSUs are included on a treasury method basis once the performance conditions are met. We view the true cost of our restricted stock units and performance-based RSUs as the dilution to our share base, and such units are included in our shares outstanding for Adjusted EPS purposes as described above under the definition of Adjusted EPS. Upon the exercise of certain stock options and vesting of restricted stock units and performance-based RSUs, the awards are settled, at the Company’s discretion, on a net basis, with the Company remitting the required tax-withholding amount from its current funds.

Amortization of intangibles (including impairment of intangibles, if applicable) and goodwill impairment (if applicable) are non-cash expenses relating primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as content, technology, customer lists, advertiser and supplier relationships, are valued and amortized over their estimated lives. Value is also assigned to acquired indefinite-lived intangible assets, which comprise trade names and trademarks, and goodwill that are not subject to amortization. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. While it is likely that we will have significant intangible amortization expense as we continue to acquire companies, we believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairment charges of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.

Acquisition-related contingent consideration fair value adjustments are accounting adjustments to report contingent consideration liabilities at fair value. These adjustments can be highly variable and are excluded from our assessment of performance because they are considered non-operational in nature and, therefore, are not indicative of current or future performance or ongoing costs of doing business.

Income or loss effects related to IAC’s former passive ownership in VUE are excluded from Adjusted Net Income and Adjusted EPS because IAC had no operating control over VUE, which was sold for a gain in 2005, had no way to forecast this business, and did not consider the results of VUE in evaluating the performance of IAC’s businesses.

Free Cash Flow

We look at Free Cash Flow as a measure of the strength and performance of our businesses, not for valuation purposes. In our view, applying “multiples” to Free Cash Flow is inappropriate because it is subject to timing, seasonality and one-time events. We manage our business for cash and we think it is of utmost importance to maximize cash — but our primary valuation metrics are Operating Income Before Amortization and Adjusted EPS.

SEE IMPORTANT NOTES AT END OF THIS DOCUMENT