EX-99.6 27 a2187113zex-99_6.htm EXHIBIT 99.6

Exhibit 99.6

 

Tree.com, Inc. and Subsidiaries

 

Consolidated 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

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

Revenue

 

$

 109,999

 

$

 110,639

 

$

 74,953

 

$

 50,787

 

Cost of revenue (exclusive of depreciation shown separately below)

 

20,496

 

20,942

 

18,279

 

13,397

 

Gross margin

 

89,503

 

89,697

 

56,674

 

37,390

 

Selling and marketing expense

 

56,478

 

56,852

 

43,755

 

30,527

 

General and administrative expense

 

30,046

 

27,514

 

23,166

 

18,518

 

Product development

 

4,270

 

3,896

 

3,844

 

2,981

 

Proceeds from a legal settlement

 

 

 

(15,000

)

 

Amortization of intangibles

 

4,274

 

6,013

 

3,993

 

20,189

 

Restructuring expense

 

 

4,598

 

6,401

 

11,868

 

Depreciation

 

2,839

 

2,580

 

2,431

 

2,208

 

Goodwill impairment

 

 

 

 

459,463

 

Operating loss

 

(8,404

)

(11,756

)

(11,916

)

(508,364

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

70

 

207

 

368

 

526

 

Interest expense

 

(280

)

(241

)

(236

)

(229

)

Other income

 

1

 

 

13

 

 

Total other (expense) income, net

 

(209

)

(34

)

145

 

297

 

Loss before income taxes

 

(8,613

)

(11,790

)

(11,771

)

(508,067

)

Income tax benefit (provision)

 

3,490

 

4,298

 

5,478

 

(23,427

)

Net loss

 

$

(5,123

)

$

(7,492

)

$

(6,293

)

$

(531,494

)

 

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

 

Cost of revenue

 

$

79

 

$

97

 

$

85

 

$

(13

)

Selling and marketing expense

 

85

 

107

 

93

 

(13

)

General and administrative expense

 

956

 

1,153

 

295

 

(1

)

Product development

 

1

 

1

 

 

 

Total non-cash compensation expense

 

$

1,121

 

$

1,358

 

$

473

 

$

(27

)

 



 

Tree.com, Inc. and Subsidiaries

 

Consolidated 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

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(audited)

 

Revenue

 

$

109,999

 

$

220,638

 

$

295,591

 

$

346,378

 

Cost of revenue (exclusive of depreciation shown separately below)

 

20,496

 

41,438

 

59,717

 

73,114

 

Gross margin

 

89,503

 

179,200

 

235,874

 

273,264

 

Selling and marketing expense

 

56,478

 

113,330

 

157,085

 

187,612

 

General and administrative expense

 

30,046

 

57,560

 

80,726

 

99,244

 

Product development

 

4,270

 

8,166

 

12,010

 

14,991

 

Proceeds from a legal settlement

 

 

 

(15,000

)

(15,000

)

Amortization of intangibles

 

4,274

 

10,287

 

14,280

 

34,469

 

Restructuring expense

 

 

4,598

 

10,999

 

22,867

 

Depreciation

 

2,839

 

5,419

 

7,850

 

10,058

 

Goodwill impairment

 

 

 

 

459,463

 

Operating loss

 

(8,404

)

(20,160

)

(32,076

)

(540,440

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

70

 

277

 

645

 

1,171

 

Interest expense

 

(280

)

(521

)

(757

)

(986

)

Other income

 

1

 

1

 

14

 

14

 

Total other expense, net

 

(209

)

(243

)

(98

)

199

 

Loss before income taxes

 

(8,613

)

(20,403

)

(32,174

)

(540,241

)

Income tax benefit (provision)

 

3,490

 

7,788

 

13,266

 

(10,161

)

Net loss

 

$

(5,123

)

$

(12,615

)

$

(18,908

)

$

(550,402

)

 

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

 

Cost of revenue

 

$

79

 

$

176

 

$

261

 

$

248

 

Selling and marketing expense

 

85

 

192

 

285

 

272

 

General and administrative expense

 

956

 

2,109

 

2,404

 

2,403

 

Product development

 

1

 

2

 

2

 

2

 

Total non-cash compensation expense

 

$

1,121

 

$

2,479

 

$

2,952

 

$

2,925

 

 

2



 

Tree.com, Inc. and Subsidiaries

 

Consolidated 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

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

Revenue

 

$

122,658

 

$

120,747

 

$

120,230

 

$

112,843

 

Cost of revenue (exclusive of depreciation shown separately below)

 

17,909

 

18,837

 

19,386

 

17,085

 

Gross margin

 

104,749

 

101,910

 

100,844

 

95,758

 

Selling and marketing expense

 

60,293

 

58,094

 

52,473

 

48,050

 

General and administrative expense

 

28,920

 

28,711

 

30,560

 

31,093

 

Product development

 

3,890

 

3,547

 

3,879

 

3,852

 

Amortization of intangibles

 

7,266

 

7,284

 

5,157

 

4,311

 

Depreciation

 

3,458

 

2,819

 

2,964

 

2,469

 

Operating income

 

922

 

1,455

 

5,811

 

5,983

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

107

 

89

 

136

 

975

 

Interest expense

 

(419

)

(388

)

(378

)

(371

)

Other income (expense)

 

 

9

 

(212

)

(4

)

Total other (expense) income, net

 

(312

)

(290

)

(454

)

600

 

Earnings before income taxes

 

610

 

1,165

 

5,357

 

6,583

 

Income tax provision

 

(224

)

(419

)

(2,117

)

(2,262

)

Net income

 

$

386

 

$

746

 

$

3,240

 

$

4,321

 

 

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

 

Cost of revenue

 

$

54

 

$

71

 

$

72

 

$

66

 

Selling and marketing expense

 

59

 

79

 

78

 

73

 

General and administrative expense

 

(1,059

)

741

 

989

 

932

 

Product development

 

20

 

 

1

 

1

 

Total non-cash compensation expense

 

$

(926

)

$

891

 

$

1,140

 

$

1,072

 

 

3



 

Tree.com, Inc. and Subsidiaries

 

Consolidated 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

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(audited)

 

Revenue

 

$

122,658

 

$

243,405

 

$

363,635

 

$

476,478

 

Cost of revenue (exclusive of depreciation shown separately below)

 

17,909

 

36,746

 

56,132

 

73,217

 

Gross margin

 

104,749

 

206,659

 

307,503

 

403,261

 

Selling and marketing expense

 

60,293

 

118,387

 

170,860

 

218,910

 

General and administrative expense

 

28,920

 

57,631

 

88,191

 

119,284

 

Product development

 

3,890

 

7,437

 

11,316

 

15,168

 

Amortization of intangibles

 

7,266

 

14,550

 

19,707

 

24,018

 

Depreciation

 

3,458

 

6,277

 

9,241

 

11,710

 

Operating income

 

922

 

2,377

 

8,188

 

14,171

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

107

 

196

 

332

 

1,307

 

Interest expense

 

(419

)

(807

)

(1,185

)

(1,556

)

Other income (expense)

 

 

9

 

(203

)

(207

)

Total other expense, net

 

(312

)

(602

)

(1,056

)

(456

)

Earnings before income taxes

 

610

 

1,775

 

7,132

 

13,715

 

Income tax provision

 

(224

)

(643

)

(2,760

)

(5,022

)

Net income

 

$

386

 

$

1,132

 

$

4,372

 

$

8,693

 

 

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

 

Cost of revenue

 

$

54

 

$

125

 

$

197

 

$

263

 

Selling and marketing expense

 

59

 

138

 

216

 

289

 

General and administrative expense

 

(1,059

)

(318

)

671

 

1,603

 

Product development

 

20

 

20

 

21

 

22

 

Total non-cash compensation expense

 

$

(926

)

$

(35

)

$

1,105

 

$

2,177

 

 

4