DISCONTINUED OPERATIONS (Tables)

9 Months Ended

Sep. 30, 2012

RealEstate.com

DISCONTINUED OPERATIONS

Schedule of revenue and net income (loss) of the discontinued operations

The revenue and net loss for the Real Estate businesses that are reported as discontinued operations for the applicable periods were as follows (in thousands):

	Three Months Ended September 30,
	2012			2011
Revenue	$	2		$	515
Loss before income taxes	$	(282	)	$	(637	)
Income tax provision	—			—
Gain from sale of discontinued operations	—			7,752
Net income (loss)	$	(282	)	$	7,115

	Nine Months Ended September 30,
	2012			2011
Revenue	$	77		$	3,633
Loss before income taxes	$	(442	)	$	(16,936	)
Income tax provision	—			—
Gain from sale of discontinued operations	—			7,752
Net loss	$	(442	)	$	(9,184	)

Schedule of assets and liabilities of the discontinued operations

The assets and liabilities of Real Estate that are reported as discontinued operations as of September 30, 2012 and December 31, 2011 were as follows (in thousands):

	September 30, 2012			December 31, 2011
Current assets	$	—		$	33
Current liabilities	390			702
Non-current liabilities	—			54
Net liabilities	$	(390	)	$	(723	)

LendingTree Loans

DISCONTINUED OPERATIONS

Schedule of revenue and net income (loss) of the discontinued operations

The revenue and net income (loss) for LendingTree Loans that are reported as discontinued operations for the applicable periods were as follows (in thousands):

	Three Months Ended September 30,
	2012			2011
Revenue	$	5,943		$	37,094
Income before income taxes	$	4,470		$	9,606
Income tax provision	(76		)	—
Net income	$	4,394		$	9,606

	Nine Months Ended September 30,
	2012			2011
Revenue	$	87,338		$	81,726
Income (loss) before income taxes	$	27,660		$	(6,893	)
Income tax provision	(2,473		)	—
Gain from sale of discontinued operations, net of tax of $1,267 and $-0-	24,313			—
Net income (loss)	$	49,500		$	(6,893	)

Schedule of assets and liabilities of the discontinued operations

The assets and liabilities of LendingTree Loans that are reported as discontinued operations as of September 30, 2012 and December 31, 2011 were as follows (in thousands):

	September 30, 2012			December 31, 2011
Loans held for sale	$	—		$	217,467
Other current assets	479			14,925
Current assets	479			232,392
Property and equipment	—			4,181
Goodwill	—			5,579
Other non-current assets	236			1,187
Non-current assets	236			10,947
Warehouse lines of credit	—			197,659
Other current liabilities	31,394			56,383
Current liabilities	31,394			254,042
Non-current liabilities	331			978
Net liabilities	$	(31,010	)	$	(11,681	)

Schedule of loans held for sale by type of loan

The following table represents the loans held for sale by type of loan as of September 30, 2012 and December 31, 2011 ($ amounts in thousands):

	September 30, 2012				December 31, 2011
	Amount		%		Amount		%
Conforming	$	—	—	%	$	171,375	79	%
FHA	—		—	%	40,433		18	%
Jumbo	—		—	%	5,659		3	%
Total	$	—	—	%	$	217,467	100	%

Schedule of difference between the aggregate principal balance of loans on nonaccrual status for which the fair value option has been elected and for loans measured at lower of cost or market valuation

The following presents the difference between the aggregate principal balance of loans on nonaccrual status for which the fair value option has been elected and for loans measured at lower of cost or market valuation as of September 30, 2012 and December 31, 2011 (in thousands):

	As of September 30, 2012
	Loans on Nonaccrual— Measured at Fair Value			Loans on Nonaccrual— Measured at LOCOM		Total Loans on Nonaccrual
Aggregate unpaid principal balance	$	412		$	—	$	412
Difference between fair value and aggregate unpaid principal balance	(412		)	—		(412		)
Loans on nonaccrual	$	—		$	—	$	—

	As of December 31, 2011
	Loans on Nonaccrual— Measured at Fair Value			Loans on Nonaccrual— Measured at LOCOM		Total Loans on Nonaccrual
Aggregate unpaid principal balance	$	539		$	—	$	539
Difference between fair value and aggregate unpaid principal balance	(244		)	—		(244		)
Loans on nonaccrual	$	295		$	—	$	295

Schedule of assets and liabilities that are measured at fair value on a recurring basis

The following presents our assets and liabilities that are measured at fair value on a recurring basis at September 30, 2012 and December 31, 2011 (in thousands):

	As of September 30, 2012
	Recurring Fair Value Measurements Using
	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
Loans held for sale	$	—	$	—	$	—	$	—
Forward delivery contracts	—		—		—		—
Total	$	—	$	—	$	—	$	—

	As of December 31, 2011
	Recurring Fair Value Measurements Using
	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
Loans held for sale	$	—	$	217,172		$	295	$	217,467
Interest rate lock commitments (“IRLCs”)	—		—			9,122		9,122
Forward delivery contracts	—		(4,107		)	19		(4,088		)
Total	$	—	$	213,065		$	9,436	$	222,501

Schedule of changes in assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

The following presents the changes in our assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30, 2012
	Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale
Balance at July 1, 2012	$	—	$	—	$	167
Transfers into Level 3	—		—		124
Transfers out of Level 3	—		—		—
Total net gains (losses) included in earnings (realized and unrealized)	—		—		(380		)
Purchases, sales, and settlements
Purchases	—		—		—
Sales	—		—		90
Settlements	—		—		(1		)
Transfers of IRLCs to closed loans	—		—		—
Balance at September 30, 2012	$	—	$	—	$	—

	Nine Months Ended September 30, 2012
	Interest Rate Lock Commitments			Forward Delivery Contracts			Loans Held for Sale
Balance at January 1, 2012	$	9,122		$	19		$	295
Transfers into Level 3	—			—			564
Transfers out of Level 3	—			(845		)	—
Total net gains (losses) included in earnings (realized and unrealized)	73,378			846			(147		)
Purchases, sales, and settlements
Purchases	—			—			—
Sales	(5,640		)	(20		)	(491		)
Settlements	(3,401		)	—			(221		)
Transfers of IRLCs to closed loans	(73,459		)	—			—
Balance at September 30, 2012	$	—		$	—		$	—

	Three Months Ended September 30, 2011
	Interest Rate Lock Commitments			Forward Delivery Contracts			Loans Held for Sale
Balance at July 1, 2011	$	6,278		$	220		$	861
Transfers into Level 3	—			—			72
Transfers out of Level 3	—			(257		)	—
Total net gains (losses) included in earnings (realized and unrealized)	40,680			69			(83		)
Purchases, sales, and settlements
Purchases	—			—			—
Sales	—			—			(538		)
Settlements	(2,255		)	—			(4		)
Transfers of IRLCs to closed loans	(31,956		)	—			—
Balance at September 30, 2011	$	12,747		$	32		$	308

	Nine Months Ended September 30, 2011
	Interest Rate Lock Commitments			Forward Delivery Contracts			Loans Held for Sale
Balance at January 1, 2011	$	5,986		$	3		$	884
Transfers into Level 3	—			—			732
Transfers out of Level 3	—			(215		)	—
Total net gains (losses) included in earnings (realized and unrealized)	81,847			302			(86		)
Purchases, sales, and settlements
Purchases(a)	970			(58		)	—
Sales	—			—			(1,041		)
Settlements	(8,252		)	—			(181		)
Transfers of IRLCs to closed loans	(67,804		)	—			—
Balance at September 30, 2011	$	12,747		$	32		$	308

(a)Purchased in conjunction with the acquisition of certain assets of SurePoint.

Schedule of gains (losses) included in earnings relating to assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

The following presents the gains (losses) included in earnings for the three and nine months ended September 30, 2012 and 2011 relating to our assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):

	Three Months EndedSeptember 30, 2012							Nine Months EndedSeptember 30, 2012
	Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale			Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale
Total net gains (losses) included in earnings, which are included in discontinued operations	$	—	$	—	$	(380	)	$	73,378	$	846	$	(147	)
Change in unrealized losses relating to assets and liabilities still held at September 30, 2012, which are included in discontinued operations	$	—	$	—	$	(412	)	$	—	$	—	$	(412	)

	Three Months EndedSeptember 30, 2011							Nine Months EndedSeptember 30, 2011
	Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale			Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale
Total net gains (losses) included in earnings, which are included in discontinued operations	$	40,680	$	69	$	(83	)	$	81,847	$	302	$	(86	)
Change in unrealized gains (losses) relating to assets and liabilities still held at September 30, 2011, which are included in discontinued operations	$	12,747	$	32	$	—		$	12,747	$	32	$	(44	)

Summary of derivative instruments not designated as hedging instruments

The following table summarizes our derivative instruments not designated as hedging instruments as of September 30, 2012 and December 31, 2011 (in thousands):

	September 30, 2012			December 31, 2011
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest Rate Lock Commitments	Current assets of discontinued operations	$	—	Current assets of discontinued operations	$	9,282
Forward Delivery Contracts	Current assets of discontinued operations	—		Current assets of discontinued operations	480
Interest Rate Lock Commitments	Current liabilities of discontinued operations	—		Current liabilities of discontinued operations	(160		)
Forward Delivery Contracts	Current liabilities of discontinued operations	—		Current liabilities of discontinued operations	(4,568		)
Total Derivatives		$	—		$	5,034

Schedule of gain/(loss) recognized in the consolidated statements of operations for derivatives

The gain (loss) recognized in the consolidated statements of operations for derivatives for the three and nine months ended September 30, 2012 and 2011 was as follows (in thousands):

	Location of Gain/(Loss)	Three Months Ended					Nine Months Ended
	Recognized in Income on Derivative	September 30, 2012		September 30, 2011			September 30, 2012		September 30, 2011
Interest Rate Lock Commitments	Discontinued operations	$	—	$	40,680		$	73,378	$	81,847
Forward Delivery Contracts	Discontinued operations	2,193		(3,262		)	4,244		(3,818		)
Total		$	2,193	$	37,418		$	77,622	$	78,029

Schedule of difference between the aggregate principal balance of loans held for sale for which the fair value option has been elected and for loans measured at LOCOM

The following presents the difference between the aggregate principal balance of loans held for sale for which the fair value option has been elected and for loans measured at LOCOM as of September 30, 2012 and December 31, 2011 (in thousands):

	As of September 30, 2012
	Loans Held for Sale— Measured at Fair Value			Loans Held for Sale— Measured at LOCOM		Total Loans Held For Sale
Aggregate unpaid principal balance	$	412		$	—	$	412
Difference between fair value and aggregate unpaid principal balance	(412		)	—		(412		)
Loans held for sale	$	—		$	—	$	—

	As of December 31, 2011
	Loans Held for Sale— Measured at Fair Value		Loans Held for Sale— Measured at LOCOM		Total Loans Held For Sale
Aggregate unpaid principal balance	$	208,918	$	—	$	208,918
Difference between fair value and aggregate unpaid principal balance	8,549		—		8,549
Loans held for sale	$	217,467	$	—	$	217,467

Schedule of loans sold for the period and the aggregate loan losses

	As of September 30, 2012
Period of Loan Sales	Number of loans sold	Original principal balance		Number of loans with losses	Original principal balance of loans with losses		Amount of aggregate losses
		(in billions)			(in millions)		(in millions)
Nine months ended September 30, 2012	9,200	$	1.9	—	$	—	$	—
2011	12,500	2.7		1	0.3		0.1
2010	12,400	2.8		4	1.1		0.1
2009	12,800	2.8		4	0.9		0.1
2008	11,000	2.2		33	6.9		2.2
2007	36,300	6.1		160	22.1		8.2
2006	55,000	7.9		207	24.5		13.4
2005 and prior years	86,700	13.0		89	12.3		5.0
Total	235,900	$	39.4	498	$	68.1	$	29.1

Schedule of activity related to loss reserves on previously sold loans

The activity related to loss reserves on previously sold loans for the three and nine months ended September 30, 2012 and 2011, is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Balance, beginning of period	$	33,096		$	24,317		$	31,512		$	16,984
Provisions (recoveries)	(6,493		)	3,488			(109		)	11,050
Charge-offs to reserves	(14		)	(785		)	(4,814		)	(1,014		)
Balance, end of period	$	26,589		$	27,020		$	26,589		$	27,020