EX-99.4 5 a15-21676_1ex99d4.htm EX-99.4

Exhibit 99.4

 

MATCH GROUP, INC. UNAUDITED HISTORICAL COMBINED FINANCIAL STATEMENTS

 

Match Group, Inc. (“Match Group”) historical combined financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of IAC/InterActiveCorp (“IAC”). The combined financial statements reflect the historical financial position, results of operations and cash flows of the Match Group businesses since their respective dates of acquisition by IAC and the allocation to Match Group of certain IAC corporate expenses relating to Match Group based on the historical financial statements and accounting records of IAC. For the purpose of these financial statements, income taxes have been computed for Match Group on an as if stand-alone, separate tax return basis.

 

All intercompany transactions and balances between and among Match Group, its subsidiaries and the entities comprising Match Group have been eliminated. All intercompany transactions between Match Group and IAC and its subsidiaries, with the exception of notes payable due to IAC subsidiaries, are considered to be effectively settled for cash at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the combined statement of cash flows as a financing activity and in the combined balance sheet as “Invested capital.” The notes payable due to IAC subsidiaries are included in “Long-term debt—related party” in the accompanying combined balance sheet.

 

In the opinion of Match Group’s management, the assumptions underlying the historical combined financial statements of Match Group, including the basis on which the expenses have been allocated from IAC, are reasonable. However, the allocations may not reflect the expenses that Match Group may have incurred as an independent, stand-alone company for the periods presented.

 

The accompanying unaudited combined financial statements have been prepared in accordance with GAAP for interim financial information and with the rules and regulations of the SEC. In the opinion of Match Group’s management, the accompanying unaudited combined financial statements include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. Interim results are not necessarily indicative of the results that may be expected for the full year.

 

A-1



 

Match Group, Inc. and Subsidiaries

Combined balance sheet

(Unaudited)

 

 

 

December 31,
2014

 

September 30,
2015

 

 

 

(In thousands)

 

ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

127,630

 

$

282,543

 

Accounts receivable, net of allowance and reserves of $1,133 and $1,293, respectively

 

33,735

 

59,212

 

Other current assets

 

33,737

 

45,041

 

Total current assets

 

195,102

 

386,796

 

Property and equipment, net of accumulated depreciation and amortization of $58,159 and $70,901, respectively

 

42,997

 

42,586

 

Goodwill

 

793,763

 

805,969

 

Intangible assets, net of accumulated amortization of $17,824 and $18,364, respectively

 

207,613

 

200,516

 

Long-term investments

 

62,979

 

65,156

 

Other non-current assets

 

5,580

 

14,024

 

TOTAL ASSETS

 

$

1,308,034

 

$

1,515,047

 

LIABILITIES AND SHAREHOLDER EQUITY

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

Accounts payable

 

$

11,797

 

$

20,348

 

Deferred revenue

 

134,790

 

156,225

 

Accrued expenses and other current liabilities

 

94,719

 

93,221

 

Total current liabilities

 

241,306

 

269,794

 

Long-term debt—related party

 

190,586

 

185,429

 

Income taxes payable

 

11,442

 

9,836

 

Deferred income taxes

 

47,800

 

41,528

 

Other long-term liabilities

 

13,446

 

39,400

 

Redeemable noncontrolling interests

 

3,678

 

6,914

 

Commitments and contingencies

 

 

 

 

 

SHAREHOLDER EQUITY:

 

 

 

 

 

Invested capital

 

877,635

 

1,091,346

 

Accumulated other comprehensive loss

 

(78,048

)

(129,200

)

Total Match Group, Inc. shareholder equity

 

799,587

 

962,146

 

Noncontrolling interests

 

189

 

 

Total shareholder equity

 

799,776

 

962,146

 

TOTAL LIABILITIES AND SHAREHOLDER EQUITY

 

$

1,308,034

 

$

1,515,047

 

 

A-2



 

Match Group, Inc. and Subsidiaries

Combined statement of operations

(Unaudited)

 

 

 

Nine months ended
September 30,

 

 

 

2014

 

2015

 

 

 

(In thousands)

 

Revenue

 

$

649,272

 

$

752,857

 

Operating costs and expenses:

 

 

 

 

 

Cost of revenue (exclusive of depreciation shown separately below)

 

82,079

 

131,118

 

Selling and marketing expense

 

271,236

 

289,844

 

General and administrative expense

 

74,351

 

121,303

 

Product development expense

 

36,614

 

50,740

 

Depreciation

 

17,122

 

19,804

 

Amortization of intangibles

 

6,841

 

14,130

 

Total operating costs and expenses

 

488,243

 

626,939

 

Operating income

 

161,029

 

125,918

 

Interest expenserelated party

 

(23,214

)

(6,879

)

Other income, net

 

8,628

 

8,341

 

Earnings before income taxes

 

146,443

 

127,380

 

Income tax provision

 

(46,434

)

(42,632

)

Net earnings

 

100,009

 

84,748

 

Net (earnings) loss attributable to noncontrolling interests

 

(522

)

42

 

Net earnings attributable to Match Group, Inc.’s shareholder

 

$

99,487

 

$

84,790

 

Stock-based compensation expense by function:

 

 

 

 

 

Cost of revenue

 

$

465

 

$

342

 

Selling and marketing expense

 

255

 

4,883

 

General and administrative expense

 

13,476

 

22,076

 

Product development expense

 

2,414

 

3,681

 

Total stock-based compensation expense

 

$

16,610

 

$

30,982

 

 

A-3



 

Match Group, Inc. and Subsidiaries

Combined statement of cash flows

(Unaudited)

 

 

 

Nine months ended
September 30,

 

 

 

2014

 

2015

 

 

 

(In thousands)

 

Cash flows from operating activities:

 

 

 

 

 

Net earnings

 

$

100,009

 

$

84,748

 

Adjustments to reconcile earnings to net cash provided by operating activities:

 

 

 

 

 

Stock-based compensation expense

 

16,610

 

30,982

 

Depreciation

 

17,122

 

19,804

 

Amortization of intangibles

 

6,841

 

14,130

 

Excess tax benefits from stock-based awards

 

(5,283

)

(31,285

)

Deferred income taxes

 

2,453

 

(8,646

)

Acquisition-related contingent consideration fair value adjustments

 

(13,581

)

(11,479

)

Other adjustments, net

 

(5,445

)

(11,274

)

Changes in assets and liabilities, net of effects of acquisitions:

 

 

 

 

 

Accounts receivable

 

(5,624

)

(25,116

)

Other current assets

 

(4,511

)

(7,447

)

Accounts payable and accrued expenses and other current liabilities

 

(6,178

)

20,834

 

Income taxes payable

 

5,329

 

26,993

 

Deferred revenue

 

21,482

 

23,997

 

Net cash provided by operating activities

 

129,224

 

126,241

 

Cash flows from investing activities:

 

 

 

 

 

Acquisitions, net of cash acquired

 

(113,871

)

(40,712

)

Capital expenditures

 

(14,583

)

(19,916

)

Purchases of long-term investments

 

(4,536

)

 

Other, net

 

180

 

(8,402

)

Net cash used in investing activities

 

(132,810

)

(69,030

)

Cash flows from financing activities:

 

 

 

 

 

Funds returned from escrow related to Meetic tender offer

 

12,354

 

 

Purchase of noncontrolling interests

 

(30,328

)

(557

)

Transfers to IAC/InterActiveCorp

 

(80,767

)

75,945

 

Proceeds from the issuance of related party debt

 

119,101

 

 

Acquisition-related contingent consideration payments

 

(7,373

)

(5,510

)

Excess tax benefits from stock-based awards

 

5,283

 

31,285

 

Net cash provided by financing activities

 

18,270

 

101,163

 

Effect of exchange rate changes on cash and cash equivalents

 

(5,113

)

(3,461

)

Net increase in cash and cash equivalents

 

9,571

 

154,913

 

Cash and cash equivalents at beginning of period

 

125,226

 

127,630

 

Cash and cash equivalents at end of period

 

$

134,797

 

$

282,543

 

 

A-4