GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

The 2012 Senior Notes are unconditionally guaranteed, jointly and severally, by certain domestic subsidiaries which are 100% owned by the Company. The following tables present condensed consolidating financial information at March 31, 2013 and December 31, 2012 and for the three months ended March 31, 2013 and 2012 for: IAC, on a stand-alone basis; the combined guarantor subsidiaries of IAC; the combined non-guarantor subsidiaries of IAC; and IAC on a consolidated basis.

Balance sheet at March 31, 2013:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Total Eliminations			IAC Consolidated
	(In thousands)
Cash and cash equivalents	$	430,356	$	—	$	243,401		$	—		$	673,757
Marketable securities	5,814		—		—			—			5,814
Accounts receivable, net	35		148,666		86,480			—			235,181
Other current assets	26,558		60,849		55,106			(1,583		)	140,930
Intercompany receivables	—		536,367		1,790,850			(2,327,217		)	—
Property and equipment, net	4,053		178,444		110,785			—			293,282
Goodwill	—		1,189,864		484,356			—			1,674,220
Intangible assets, net	—		331,408		147,376			—			478,784
Investment in subsidiaries	4,463,712		674,547		—			(5,138,259		)	—
Other non-current assets	322,411		16,895		111,812			(172,840		)	278,278
Total assets	$	5,252,939	$	3,137,040	$	3,030,166		$	(7,639,899	)	$	3,780,246

Accounts payable, trade	$	3,983	$	42,672	$	31,513		$	—		$	78,168
Other current liabilities	33,262		245,294		236,232			(1,517		)	513,271
Long-term debt, net of current maturities	500,000		80,000		—			—			580,000
Income taxes payable	439,991		25,554		12,407			3,956			481,908
Intercompany liabilities	2,638,794		—		(311,577		)	(2,327,217		)	—
Other long-term liabilities	390		90,425		467,202			(176,862		)	381,155
Redeemable noncontrolling interests	—		1,379		57,875			—			59,254
IAC shareholders' equity	1,636,519		2,651,716		2,486,543			(5,138,259		)	1,636,519
Noncontrolling interests	—		—		49,971			—			49,971
Total liabilities and shareholders' equity	$	5,252,939	$	3,137,040	$	3,030,166		$	(7,639,899	)	$	3,780,246

Balance sheet at December 31, 2012:



	IAC		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Total Eliminations			IAC Consolidated
	(In thousands)
Cash and cash equivalents	$	501,075	$	—	$	248,902	$	—		$	749,977
Marketable securities	20,604		—		—		—			20,604
Accounts receivable, net	43		142,627		87,160		—			229,830
Other current assets	58,441		53,611		45,324		(1,037		)	156,339
Intercompany receivables	—		501,933		10,638,870		(11,140,803		)	—
Property and equipment, net	4,116		179,582		86,814		—			270,512
Goodwill	—		1,190,199		425,955		—			1,616,154
Intangible assets, net	—		340,631		142,273		—			482,904
Investment in subsidiaries	12,913,747		611,869		—		(13,525,616		)	—
Other non-current assets	320,586		16,509		109,912		(167,499		)	279,508
Total assets	$	13,818,612	$	3,036,961	$	11,785,210	$	(24,834,955	)	$	3,805,828

Accounts payable, trade	$	4,366	$	64,888	$	29,060	$	—		$	98,314
Other current liabilities	74,230		215,884		238,113		(1,652		)	526,575
Long-term debt, net of current maturities	500,000		80,000		—		—			580,000
Income taxes payable	440,110		25,428		14,407		—			479,945
Intercompany liabilities	11,140,803		—		—		(11,140,803		)	—
Other long-term liabilities	3,375		89,595		429,147		(166,884		)	355,233
Redeemable noncontrolling interests	—		1,388		56,738		—			58,126
IAC shareholders' equity	1,655,728		2,559,778		10,965,838		(13,525,616		)	1,655,728
Noncontrolling interests	—		—		51,907		—			51,907
Total liabilities and shareholders' equity	$	13,818,612	$	3,036,961	$	11,785,210	$	(24,834,955	)	$	3,805,828

Statement of operations for the three months ended March 31, 2013:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	515,784		$	227,502		$	(1,037	)	$	742,249
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	677			152,905			102,279			(779		)	255,082
Selling and marketing expense	431			170,667			72,073			(257		)	242,914
General and administrative expense	22,245			41,147			34,635			(1		)	98,026
Product development expense	899			21,279			11,404			—			33,582
Depreciation	367			8,624			5,025			—			14,016
Amortization of intangibles	—			8,910			5,168			—			14,078
Total costs and expenses	24,619			403,532			230,584			(1,037		)	657,698
Operating (loss) income	(24,619		)	112,252			(3,082		)	—			84,551
Equity in earnings (losses) of unconsolidated affiliates	113,783			2,771			(91		)	(116,554		)	(91		)
Interest expense	(6,557		)	(1,065		)	(41		)	—			(7,663		)
Other (expense) income, net	(55,448		)	(18,730		)	75,836			—			1,658
Earnings from continuing operations before income taxes	27,159			95,228			72,622			(116,554		)	78,455
Income tax benefit (provision)	27,422			(33,332		)	(19,836		)	—			(25,746		)
Earnings from continuing operations	54,581			61,896			52,786			(116,554		)	52,709
(Loss) earnings from discontinued operations, net of tax	(944		)	—			7			(7		)	(944		)
Net earnings	53,637			61,896			52,793			(116,561		)	51,765
Net loss attributable to noncontrolling interests	—			8			1,864			—			1,872
Net earnings attributable to IAC shareholders	$	53,637		$	61,904		$	54,657		$	(116,561	)	$	53,637
Comprehensive income attributable to IAC shareholders	$	41,710		$	61,829		$	49,313		$	(111,142	)	$	41,710

Statement of operations for the three months ended March 31, 2012:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations			IAC Consolidated
	(In thousands)
Revenue	$	—		$	458,812		$	182,252		$	(464	)	$	640,600
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	1,394			144,207			78,080			(110		)	223,571
Selling and marketing expense	903			157,575			61,725			(365		)	219,838
General and administrative expense	29,339			37,356			25,082			11			91,788
Product development expense	1,376			16,942			5,164			—			23,482
Depreciation	147			8,586			3,382			—			12,115
Amortization of intangibles	—			630			6,411			—			7,041
Total costs and expenses	33,159			365,296			179,844			(464		)	577,835
Operating (loss) income	(33,159		)	93,516			2,408			—			62,765
Equity in earnings (losses) of unconsolidated affiliates	96,239			4,161			(4,053		)	(102,248		)	(5,901		)
Interest expense	(278		)	(1,065		)	(4		)	—			(1,347		)
Other (expense) income, net	(104,487		)	1,281			105,962			—			2,756
(Loss) earnings from continuing operations before income taxes	(41,685		)	97,893			104,313			(102,248		)	58,273
Income tax benefit (provision)	72,479			(36,827		)	(62,772		)	—			(27,120		)
Earnings from continuing operations	30,794			61,066			41,541			(102,248		)	31,153
Earnings (loss) from discontinued operations, net of tax	3,684			—			(460		)	460			3,684
Net earnings	34,478			61,066			41,081			(101,788		)	34,837
Net loss (earnings) attributable to noncontrolling interests	—			16			(375		)	—			(359		)
Net earnings attributable to IAC shareholders	$	34,478		$	61,082		$	40,706		$	(101,788	)	$	34,478
Comprehensive income attributable to IAC shareholders	$	65,374		$	61,106		$	46,861		$	(107,967	)	$	65,374

Statement of cash flows for the three months ended March 31, 2013:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations		IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(1,106	)	$	105,567		$	(12,099	)	$	—	$	92,362
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(6,060		)	(23,134		)	—		(29,194		)
Capital expenditures	(78		)	(5,059		)	(28,501		)	—		(33,638		)
Proceeds from maturities and sales of marketable debt securities	12,500			—			—			—		12,500
Proceeds from sales of long-term investments	—			—			214			—		214
Purchases of long-term investments	—			—			(975		)	—		(975		)
Other, net	(55		)	—			(996		)	—		(1,051		)
Net cash provided by (used in) investing activities attributable to continuing operations	12,367			(11,119		)	(53,392		)	—		(52,144		)
Cash flows from financing activities attributable to continuing operations:
Purchase of treasury stock	(88,605		)	—			—			—		(88,605		)
Issuance of common stock, net of withholding taxes	552			—			—			—		552
Dividends	(21,429		)	—			—			—		(21,429		)
Excess tax benefits from stock-based awards	12,530			—			—			—		12,530
Principal payments on long-term debt	(15,844		)	—			—			—		(15,844		)
Intercompany	29,317			(94,447		)	65,130			—		—
Other, net	(927		)	(29		)	(145		)	—		(1,101		)
Net cash (used in) provided by financing activities attributable to continuing operations	(84,406		)	(94,476		)	64,985			—		(113,897		)
Total cash used in continuing operations	(73,145		)	(28		)	(506		)	—		(73,679		)
Total cash provided by (used in) discontinued operations	2,426			—			(1		)	—		2,425
Effect of exchange rate changes on cash and cash equivalents	—			28			(4,994		)	—		(4,966		)
Net decrease in cash and cash equivalents	(70,719		)	—			(5,501		)	—		(76,220		)
Cash and cash equivalents at beginning of period	501,075			—			248,902			—		749,977
Cash and cash equivalents at end of period	$	430,356		$	—		$	243,401		$	—	$	673,757

Statement of cash flows for the three months ended March 31, 2012:



	IAC			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Total Eliminations		IAC Consolidated
	(In thousands)
Net cash (used in) provided by operating activities attributable to continuing operations	$	(19,544	)	$	82,531		$	(3,937	)	$	—	$	59,050
Cash flows from investing activities attributable to continuing operations:
Acquisitions, net of cash acquired	—			(10,267		)	—			—		(10,267		)
Capital expenditures	(31		)	(6,182		)	(3,420		)	—		(9,633		)
Proceeds from maturities and sales of marketable debt securities	18,343			—			—			—		18,343
Purchases of marketable debt securities	(10,012		)	—			—			—		(10,012		)
Proceeds from sales of long-term investments	8,058			—			—			—		8,058
Purchases of long-term investments	—			(20		)	(450		)	—		(470		)
Other, net	(350		)	(299		)	(7,604		)	—		(8,253		)
Net cash provided by (used in) investing activities attributable to continuing operations	16,008			(16,768		)	(11,474		)	—		(12,234		)
Cash flows from financing activities attributable to continuing operations:
Purchase of treasury stock	(222,863		)	—			—			—		(222,863		)
Issuance of common stock, net of withholding taxes	99,212			—			—			—		99,212
Dividends	(10,573		)	—			—			—		(10,573		)
Excess tax benefits from stock-based awards	6,477			—			—			—		6,477
Intercompany	33,687			(65,755		)	32,068			—		—
Other, net	—			—			22			—		22
Net cash (used in) provided by financing activities attributable to continuing operations	(94,060		)	(65,755		)	32,090			—		(127,725		)
Total cash (used in) provided by continuing operations	(97,596		)	8			16,679			—		(80,909		)
Total cash used in discontinued operations	(333		)	—			(35		)	—		(368		)
Effect of exchange rate changes on cash and cash equivalents	—			(8		)	1,228			—		1,220
Net (decrease) increase in cash and cash equivalents	(97,929		)	—			17,872			—		(80,057		)
Cash and cash equivalents at beginning of period	545,222			—			158,931			—		704,153
Cash and cash equivalents at end of period	$	447,293		$	—		$	176,803		$	—	$	624,096