ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2015 | |
Or | |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from__________to__________ |
Delaware (State or other jurisdiction of incorporation or organization) | 59-2712887 (I.R.S. Employer Identification No.) | |
555 West 18th Street, New York, New York 10011 (Address of registrant's principal executive offices) | ||
(212) 314-7300 (Registrant's telephone number, including area code) |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Common Stock | 77,196,951 | |
Class B Common Stock | 5,789,499 | |
Total outstanding Common Stock | 82,986,450 |
Page Number | ||
September 30, 2015 | December 31, 2014 | ||||||
(In thousands, except share data) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 766,448 | $ | 990,405 | |||
Marketable securities | 53,937 | 160,648 | |||||
Accounts receivable, net of allowance of $16,202 and $12,437, respectively | 246,978 | 236,086 | |||||
Other current assets | 178,883 | 166,742 | |||||
Total current assets | 1,246,246 | 1,553,881 | |||||
Property and equipment, net of accumulated depreciation and amortization of $305,226 and $279,534, respectively | 299,078 | 302,459 | |||||
Goodwill | 1,769,141 | 1,754,926 | |||||
Intangible assets, net of accumulated amortization of $122,653 and $98,937 respectively | 459,921 | 491,936 | |||||
Long-term investments | 138,825 | 114,983 | |||||
Other non-current assets | 114,107 | 56,693 | |||||
TOTAL ASSETS | $ | 4,027,318 | $ | 4,274,878 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
LIABILITIES: | |||||||
Accounts payable, trade | $ | 68,448 | $ | 81,163 | |||
Deferred revenue | 237,947 | 194,988 | |||||
Accrued expenses and other current liabilities | 347,062 | 397,803 | |||||
Total current liabilities | 653,457 | 673,954 | |||||
Long-term debt | 1,000,000 | 1,080,000 | |||||
Income taxes payable | 23,641 | 32,635 | |||||
Deferred income taxes | 417,326 | 409,529 | |||||
Other long-term liabilities | 62,476 | 45,191 | |||||
Redeemable noncontrolling interests | 25,227 | 40,427 | |||||
Commitments and contingencies | |||||||
SHAREHOLDERS' EQUITY: | |||||||
Common stock $.001 par value; authorized 1,600,000,000 shares; issued 253,957,313 and 252,170,058 shares, respectively and outstanding 77,188,046 and 78,356,057 shares, respectively | 254 | 252 | |||||
Class B convertible common stock $.001 par value; authorized 400,000,000 shares; issued 16,157,499 shares and outstanding 5,789,499 shares | 16 | 16 | |||||
Additional paid-in capital | 11,459,267 | 11,415,617 | |||||
Retained earnings | 391,492 | 325,118 | |||||
Accumulated other comprehensive loss | (144,488 | ) | (87,700 | ) | |||
Treasury stock 187,137,267 and 184,182,001 shares, respectively | (9,861,350 | ) | (9,661,350 | ) | |||
Total IAC shareholders' equity | 1,845,191 | 1,991,953 | |||||
Noncontrolling interests | — | 1,189 | |||||
Total shareholders' equity | 1,845,191 | 1,993,142 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 4,027,318 | $ | 4,274,878 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Revenue | $ | 838,561 | $ | 782,231 | $ | 2,382,205 | $ | 2,278,793 | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 205,261 | 224,695 | 580,090 | 644,659 | |||||||||||
Selling and marketing expense | 337,226 | 278,321 | 1,014,289 | 849,410 | |||||||||||
General and administrative expense | 134,122 | 106,987 | 378,265 | 311,973 | |||||||||||
Product development expense | 46,859 | 40,691 | 138,546 | 118,352 | |||||||||||
Depreciation | 15,625 | 14,133 | 46,693 | 44,208 | |||||||||||
Amortization of intangibles | 12,338 | 16,451 | 39,304 | 41,836 | |||||||||||
Total operating costs and expenses | 751,431 | 681,278 | 2,197,187 | 2,010,438 | |||||||||||
Operating income | 87,130 | 100,953 | 185,018 | 268,355 | |||||||||||
Equity in earnings (losses) of unconsolidated affiliates | 398 | (612 | ) | (78 | ) | (9,397 | ) | ||||||||
Interest expense | (15,992 | ) | (14,009 | ) | (45,270 | ) | (42,119 | ) | |||||||
Other income (expense), net | 34,000 | 4,113 | 39,826 | (58,810 | ) | ||||||||||
Earnings from continuing operations before income taxes | 105,536 | 90,445 | 179,496 | 158,029 | |||||||||||
Income tax (provision) benefit | (40,510 | ) | 59,816 | (34,722 | ) | 8,542 | |||||||||
Earnings from continuing operations | 65,026 | 150,261 | 144,774 | 166,571 | |||||||||||
Earnings (loss) from discontinued operations, net of tax | 17 | 175,730 | (11 | ) | 174,048 | ||||||||||
Net earnings | 65,043 | 325,991 | 144,763 | 340,619 | |||||||||||
Net loss attributable to noncontrolling interests | 568 | 821 | 6,558 | 4,082 | |||||||||||
Net earnings attributable to IAC shareholders | $ | 65,611 | $ | 326,812 | $ | 151,321 | $ | 344,701 | |||||||
Per share information attributable to IAC shareholders: | |||||||||||||||
Basic earnings per share from continuing operations | $ | 0.79 | $ | 1.81 | $ | 1.82 | $ | 2.05 | |||||||
Diluted earnings per share from continuing operations | $ | 0.74 | $ | 1.70 | $ | 1.71 | $ | 1.93 | |||||||
Basic earnings per share | $ | 0.79 | $ | 3.91 | $ | 1.82 | $ | 4.15 | |||||||
Diluted earnings per share | $ | 0.74 | $ | 3.68 | $ | 1.71 | $ | 3.91 | |||||||
Dividends declared per share | $ | 0.34 | $ | 0.34 | $ | 1.02 | $ | 0.82 | |||||||
Stock-based compensation expense by function: | |||||||||||||||
Cost of revenue | $ | 307 | $ | 453 | $ | 846 | $ | 904 | |||||||
Selling and marketing expense | 2,442 | 775 | 7,284 | 1,628 | |||||||||||
General and administrative expense | 21,683 | 14,094 | 56,320 | 35,753 | |||||||||||
Product development expense | 2,577 | 2,010 | 7,419 | 5,212 | |||||||||||
Total stock-based compensation expense | $ | 27,009 | $ | 17,332 | $ | 71,869 | $ | 43,497 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In thousands) | |||||||||||||||
Net earnings | $ | 65,043 | $ | 325,991 | $ | 144,763 | $ | 340,619 | |||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||
Change in foreign currency translation adjustment | (10,603 | ) | (36,759 | ) | (58,604 | ) | (31,569 | ) | |||||||
Change in unrealized gains and losses of available-for-sale securities (net of tax benefits of $277 and $95 for the three and nine months ended September 30, 2015, respectively, and net of tax benefits of $245 and $1,683 for the three and nine months ended September 30, 2014, respectively) | (3,617 | ) | (389 | ) | 632 | (2,639 | ) | ||||||||
Total other comprehensive loss, net of tax | (14,220 | ) | (37,148 | ) | (57,972 | ) | (34,208 | ) | |||||||
Comprehensive income | 50,823 | 288,843 | 86,791 | 306,411 | |||||||||||
Comprehensive loss attributable to noncontrolling interests | 595 | 1,107 | 7,742 | 4,568 | |||||||||||
Comprehensive income attributable to IAC shareholders | $ | 51,418 | $ | 289,950 | $ | 94,533 | $ | 310,979 |
IAC Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Class B Convertible Common Stock $.001 Par Value | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock $.001 Par Value | ||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Total IAC Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interests | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Noncontrolling Interests | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||
$ | Shares | $ | Shares | |||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2014 | $ | 40,427 | $ | 252 | 252,170 | $ | 16 | 16,157 | $ | 11,415,617 | $ | 325,118 | $ | (87,700 | ) | $ | (9,661,350 | ) | $ | 1,991,953 | $ | 1,189 | $ | 1,993,142 | ||||||||||||||||||||||
Net (loss) earnings for the nine months ended September 30, 2015 | (6,558 | ) | — | — | — | — | — | 151,321 | — | — | 151,321 | — | 151,321 | |||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (1,184 | ) | — | — | — | — | — | — | (56,788 | ) | — | (56,788 | ) | — | (56,788 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation expense | 5,066 | — | — | — | — | 62,611 | — | — | — | 62,611 | — | 62,611 | ||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to stock-based awards, net of withholding taxes | — | 2 | 1,787 | — | — | (39,512 | ) | — | — | — | (39,510 | ) | — | (39,510 | ) | |||||||||||||||||||||||||||||||
Income tax benefit related to stock-based awards | — | — | — | — | — | 37,298 | — | — | — | 37,298 | — | 37,298 | ||||||||||||||||||||||||||||||||||
Dividends | — | — | — | — | — | — | (84,947 | ) | — | — | (84,947 | ) | — | (84,947 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | (200,000 | ) | (200,000 | ) | — | (200,000 | ) | |||||||||||||||||||||||||||||||
Purchase of redeemable noncontrolling interests | (29,899 | ) | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to fair value | 15,903 | — | — | — | — | (15,903 | ) | — | — | — | (15,903 | ) | — | (15,903 | ) | |||||||||||||||||||||||||||||||
Transfer from noncontrolling interests to redeemable noncontrolling interests | 1,189 | — | — | — | — | — | — | — | — | — | (1,189 | ) | (1,189 | ) | ||||||||||||||||||||||||||||||||
Other | 283 | — | — | — | — | (844 | ) | — | — | — | (844 | ) | — | (844 | ) | |||||||||||||||||||||||||||||||
Balance as of September 30, 2015 | $ | 25,227 | $ | 254 | 253,957 | $ | 16 | 16,157 | $ | 11,459,267 | $ | 391,492 | $ | (144,488 | ) | $ | (9,861,350 | ) | $ | 1,845,191 | $ | — | $ | 1,845,191 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
(In thousands) | |||||||
Cash flows from operating activities attributable to continuing operations: | |||||||
Net earnings | $ | 144,763 | $ | 340,619 | |||
Less: (loss) earnings from discontinued operations, net of tax | (11 | ) | 174,048 | ||||
Earnings from continuing operations | 144,774 | 166,571 | |||||
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities attributable to continuing operations: | |||||||
Stock-based compensation expense | 71,869 | 43,497 | |||||
Depreciation | 46,693 | 44,208 | |||||
Amortization of intangibles | 39,304 | 41,836 | |||||
Impairment of long-term investments | 1,304 | 64,281 | |||||
Excess tax benefits from stock-based awards | (49,147 | ) | (41,320 | ) | |||
Deferred income taxes | (7,851 | ) | 88,739 | ||||
Equity in losses of unconsolidated affiliates | 78 | 9,397 | |||||
Acquisition-related contingent consideration fair value adjustments | (17,906 | ) | (13,781 | ) | |||
Gain on real estate transaction | (33,586 | ) | — | ||||
Other adjustments, net | 13,852 | 10,080 | |||||
Changes in assets and liabilities, net of effects of acquisitions: | |||||||
Accounts receivable | (25,822 | ) | (12,779 | ) | |||
Other assets | (13,746 | ) | (8,735 | ) | |||
Accounts payable and other current liabilities | (17,453 | ) | (24,183 | ) | |||
Income taxes payable | (13,748 | ) | (114,584 | ) | |||
Deferred revenue | 45,674 | 41,667 | |||||
Other changes in assets and liabilities, net | (182 | ) | (233 | ) | |||
Net cash provided by operating activities attributable to continuing operations | 184,107 | 294,661 | |||||
Cash flows from investing activities attributable to continuing operations: | |||||||
Acquisitions, net of cash acquired | (43,286 | ) | (244,196 | ) | |||
Capital expenditures | (44,558 | ) | (39,033 | ) | |||
Proceeds from maturities and sales of marketable debt securities | 192,928 | 998 | |||||
Purchases of marketable debt securities | (93,134 | ) | (110,886 | ) | |||
Purchases of long-term investments | (25,073 | ) | (17,703 | ) | |||
Other, net | 4,456 | 11,924 | |||||
Net cash used in investing activities attributable to continuing operations | (8,667 | ) | (398,896 | ) | |||
Cash flows from financing activities attributable to continuing operations: | |||||||
Purchase of treasury stock | (200,000 | ) | — | ||||
Dividends | (84,947 | ) | (68,505 | ) | |||
Principal payment on long-term debt | (80,000 | ) | — | ||||
Issuance of common stock, net of withholding taxes | (40,197 | ) | (4,823 | ) | |||
Excess tax benefits from stock-based awards | 49,147 | 41,320 | |||||
Purchase of noncontrolling interests | (29,899 | ) | (30,328 | ) | |||
Funds returned from escrow for Meetic tender offer | — | 12,354 | |||||
Acquisition-related contingent consideration payments | (5,712 | ) | (7,659 | ) | |||
Other, net | 512 | (1,397 | ) | ||||
Net cash used in financing activities attributable to continuing operations | (391,096 | ) | (59,038 | ) | |||
Total cash used in continuing operations | (215,656 | ) | (163,273 | ) | |||
Total cash used in discontinued operations | (190 | ) | (171 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (8,111 | ) | (5,288 | ) | |||
Net decrease in cash and cash equivalents | (223,957 | ) | (168,732 | ) | |||
Cash and cash equivalents at beginning of period | 990,405 | 1,100,444 | |||||
Cash and cash equivalents at end of period | $ | 766,448 | $ | 931,712 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Corporate debt securities | $ | 53,600 | $ | 7 | $ | (129 | ) | $ | 53,478 | ||||||
Equity security | 98 | 361 | — | 459 | |||||||||||
Total marketable securities | $ | 53,698 | $ | 368 | $ | (129 | ) | $ | 53,937 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Corporate debt securities | $ | 159,418 | $ | 34 | $ | (255 | ) | $ | 159,197 | ||||||
Equity security | 98 | 1,353 | — | 1,451 | |||||||||||
Total marketable securities | $ | 159,516 | $ | 1,387 | $ | (255 | ) | $ | 160,648 |
Amortized Cost | Fair Value | ||||||
(In thousands) | |||||||
Due in one year or less | $ | 4,374 | $ | 4,370 | |||
Due after one year through five years | 49,226 | 49,108 | |||||
Total | $ | 53,600 | $ | 53,478 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In thousands) | |||||||||||||||
Proceeds from maturities and sales of available-for-sale marketable securities | $ | 178,315 | $ | 1,114 | $ | 192,928 | $ | 4,576 | |||||||
Gross realized gains | 17 | 1,063 | 22 | 3,362 |
• | Level 1: Observable inputs obtained from independent sources, such as quoted prices for identical assets and liabilities in active markets. |
• | Level 2: Other inputs, which are observable directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company's Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used. |
• | Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities. See below for a discussion of fair value measurements made using Level 3 inputs. |
September 30, 2015 | |||||||||||||||
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 | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 375,094 | $ | — | $ | — | $ | 375,094 | |||||||
Time deposits | — | 45,005 | — | 45,005 | |||||||||||
Commercial paper | — | 8,999 | — | 8,999 | |||||||||||
Marketable securities: | |||||||||||||||
Corporate debt securities | — | 53,478 | — | 53,478 | |||||||||||
Equity security | 459 | — | — | 459 | |||||||||||
Long-term investments: | |||||||||||||||
Auction rate security | — | — | 5,010 | 5,010 | |||||||||||
Marketable equity security | 9,594 | — | — | 9,594 | |||||||||||
Total | $ | 385,147 | $ | 107,482 | $ | 5,010 | $ | 497,639 | |||||||
Liabilities: | |||||||||||||||
Contingent consideration arrangements | $ | — | $ | — | $ | (31,470 | ) | $ | (31,470 | ) |
December 31, 2014 | |||||||||||||||
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 | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 174,720 | $ | — | $ | — | $ | 174,720 | |||||||
Time deposits | — | 42,914 | — | 42,914 | |||||||||||
Commercial paper | — | 388,801 | — | 388,801 | |||||||||||
Marketable securities: | |||||||||||||||
Corporate debt securities | — | 159,197 | — | 159,197 | |||||||||||
Equity security | 1,451 | — | — | 1,451 | |||||||||||
Long-term investments: | |||||||||||||||
Auction rate security | — | — | 6,070 | 6,070 | |||||||||||
Marketable equity security | 7,410 | — | — | 7,410 | |||||||||||
Total | $ | 183,581 | $ | 590,912 | $ | 6,070 | $ | 780,563 | |||||||
Liabilities: | |||||||||||||||
Contingent consideration arrangements | $ | — | $ | — | $ | (30,140 | ) | $ | (30,140 | ) |
Three Months Ended September 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||
Auction Rate Security | Contingent Consideration Arrangements | Auction Rate Security | Contingent Consideration Arrangements | ||||||||||||
(In thousands) | |||||||||||||||
Balance at July 1 | $ | 6,630 | $ | (31,858 | ) | $ | 9,250 | $ | (41,397 | ) | |||||
Total net gains (losses): | |||||||||||||||
Included in earnings: | |||||||||||||||
Fair value adjustments | — | 960 | — | 14,281 | |||||||||||
Included in other comprehensive (loss) income | (1,620 | ) | (579 | ) | (670 | ) | 1,918 | ||||||||
Settlements | — | 7 | — | 29 | |||||||||||
Balance at September 30 | $ | 5,010 | $ | (31,470 | ) | $ | 8,580 | $ | (25,169 | ) |
Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||
Auction Rate Security | Contingent Consideration Arrangements | Auction Rate Security | Contingent Consideration Arrangements | ||||||||||||
(In thousands) | |||||||||||||||
Balance at January 1 | $ | 6,070 | $ | (30,140 | ) | $ | 8,920 | $ | (45,828 | ) | |||||
Total net gains (losses): | |||||||||||||||
Included in earnings: | |||||||||||||||
Fair value adjustments | — | 17,906 | — | 13,781 | |||||||||||
Foreign currency exchange gains | — | 626 | — | — | |||||||||||
Included in other comprehensive (loss) income | (1,060 | ) | 1,538 | (340 | ) | 2,054 | |||||||||
Fair value at date of acquisition | — | (27,112 | ) | — | (2,835 | ) | |||||||||
Settlements | — | 5,712 | — | 7,659 | |||||||||||
Balance at September 30 | $ | 5,010 | $ | (31,470 | ) | $ | 8,580 | $ | (25,169 | ) |
September 30, 2015 | December 31, 2014 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Long-term debt | $ | (1,000,000 | ) | $ | (990,050 | ) | $ | (1,080,000 | ) | $ | (1,099,813 | ) |
September 30, 2015 | December 31, 2014 | ||||||
(In thousands) | |||||||
4.875% Senior Notes due November 30, 2018 (the "2013 Senior Notes"); interest payable each May 30 and November 30, which commenced May 30, 2014 | $ | 500,000 | $ | 500,000 | |||
4.75% Senior Notes due December 15, 2022 (the "2012 Senior Notes"); interest payable each June 15 and December 15, which commenced June 15, 2013 | 500,000 | 500,000 | |||||
5% New York City Industrial Development Agency Liberty Bonds due September 1, 2035 (the "Liberty Bonds"); interest payable each March 1 and September 1, which commenced March 1, 2006 | — | 80,000 | |||||
Total long-term debt | $ | 1,000,000 | $ | 1,080,000 |
Three Months Ended September 30, 2015 | |||||||||||
Foreign Currency Translation Adjustment | Unrealized Gains On Available-For-Sale Securities | Accumulated Other Comprehensive Loss | |||||||||
(In thousands) | |||||||||||
Balance as of July 1 | $ | (133,895 | ) | $ | 3,600 | $ | (130,295 | ) | |||
Other comprehensive loss, net of tax benefit of $0.1 million related to unrealized losses on available-for-sale securities | (8,420 | ) | (3,501 | ) | (11,921 | ) | |||||
Amounts reclassified to earnings | (2,191 | ) | (81 | ) | (a) | (2,272 | ) | ||||
Net current period other comprehensive loss | (10,611 | ) | (3,582 | ) | (14,193 | ) | |||||
Balance as of September 30 | $ | (144,506 | ) | $ | 18 | $ | (144,488 | ) |
Three Months Ended September 30, 2014 | |||||||||||
Foreign Currency Translation Adjustment | Unrealized Gains On Available-For-Sale Securities | Accumulated Other Comprehensive Loss | |||||||||
(In thousands) | |||||||||||
Balance as of July 1 | $ | (15,282 | ) | $ | 5,376 | $ | (9,906 | ) | |||
Other comprehensive (loss) income before reclassifications, net of tax provision of $0.2 million related to unrealized losses on available-for-sale securities | (36,428 | ) | 231 | (36,197 | ) | ||||||
Amounts reclassified to earnings related to unrealized gains on available-for-sale securities, net of tax provision of $0.4 million | — | (665 | ) | (665 | ) | ||||||
Net current period other comprehensive loss | (36,428 | ) | (434 | ) | (36,862 | ) | |||||
Balance as of September 30 | $ | (51,710 | ) | $ | 4,942 | $ | (46,768 | ) |
Nine Months Ended September 30, 2015 | |||||||||||
Foreign Currency Translation Adjustment | Unrealized (Losses) Gains On Available-For-Sale Securities | Accumulated Other Comprehensive Loss | |||||||||
(In thousands) | |||||||||||
Balance as of January 1 | $ | (86,848 | ) | $ | (852 | ) | $ | (87,700 | ) | ||
Other comprehensive (loss) income, net of tax benefit of $0.3 million related to unrealized losses on available-for-sale securities | (55,467 | ) | 788 | (54,679 | ) | ||||||
Amounts reclassified to earnings | (2,191 | ) | 82 | (b) | (2,109 | ) | |||||
Net current period other comprehensive (loss) income | (57,658 | ) | 870 | (56,788 | ) | ||||||
Balance as of September 30 | $ | (144,506 | ) | $ | 18 | $ | (144,488 | ) |
Nine Months Ended September 30, 2014 | |||||||||||
Foreign Currency Translation Adjustment | Unrealized Gains On Available-For-Sale Securities | Accumulated Other Comprehensive Loss | |||||||||
(In thousands) | |||||||||||
Balance as of January 1 | $ | (20,352 | ) | $ | 7,306 | $ | (13,046 | ) | |||
Other comprehensive loss before reclassifications, net of tax benefit of $0.5 million related to unrealized losses on available-for-sale securities | (31,358 | ) | (439 | ) | (31,797 | ) | |||||
Amounts reclassified to earnings related to unrealized gains on available-for-sale securities, net of tax provision of $1.2 million | — | (1,925 | ) | (1,925 | ) | ||||||
Net current period other comprehensive loss | (31,358 | ) | (2,364 | ) | (33,722 | ) | |||||
Balance as of September 30 | $ | (51,710 | ) | $ | 4,942 | $ | (46,768 | ) |
Three Months Ended September 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||
Basic | Diluted | Basic | Diluted | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Numerator: | |||||||||||||||
Earnings from continuing operations | $ | 65,026 | $ | 65,026 | $ | 150,261 | $ | 150,261 | |||||||
Net loss attributable to noncontrolling interests | 568 | 568 | 821 | 821 | |||||||||||
Earnings from continuing operations attributable to IAC shareholders | 65,594 | 65,594 | 151,082 | 151,082 | |||||||||||
Earnings from discontinued operations attributable to IAC shareholders | 17 | 17 | 175,730 | 175,730 | |||||||||||
Net earnings attributable to IAC shareholders | $ | 65,611 | $ | 65,611 | $ | 326,812 | $ | 326,812 | |||||||
Denominator: | |||||||||||||||
Weighted average basic shares outstanding | 82,910 | 82,910 | 83,591 | 83,591 | |||||||||||
Dilutive securities including stock options and RSUs(a)(b) | — | 5,990 | — | 5,199 | |||||||||||
Denominator for earnings per share—weighted average shares(a)(b) | 82,910 | 88,900 | 83,591 | 88,790 | |||||||||||
Earnings per share attributable to IAC shareholders: | |||||||||||||||
Earnings per share from continuing operations | $ | 0.79 | $ | 0.74 | $ | 1.81 | $ | 1.70 | |||||||
Discontinued operations | — | — | 2.10 | 1.98 | |||||||||||
Earnings per share | $ | 0.79 | $ | 0.74 | $ | 3.91 | $ | 3.68 |
Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||
Basic | Diluted | Basic | Diluted | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Numerator: | |||||||||||||||
Earnings from continuing operations | $ | 144,774 | $ | 144,774 | $ | 166,571 | $ | 166,571 | |||||||
Net loss attributable to noncontrolling interests | 6,558 | 6,558 | 4,082 | 4,082 | |||||||||||
Earnings from continuing operations attributable to IAC shareholders | 151,332 | 151,332 | 170,653 | 170,653 | |||||||||||
(Loss) earnings from discontinued operations attributable to IAC shareholders | (11 | ) | (11 | ) | 174,048 | 174,048 | |||||||||
Net earnings attributable to IAC shareholders | $ | 151,321 | $ | 151,321 | $ | 344,701 | $ | 344,701 | |||||||
Denominator: | |||||||||||||||
Weighted average basic shares outstanding | 82,924 | 82,924 | 83,088 | 83,088 | |||||||||||
Dilutive securities including stock options and RSUs(a)(b) | — | 5,323 | — | 5,167 | |||||||||||
Denominator for earnings per share—weighted average shares(a)(b) | 82,924 | 88,247 | 83,088 | 88,255 | |||||||||||
Earnings per share attributable to IAC shareholders: | |||||||||||||||
Earnings per share from continuing operations | $ | 1.82 | $ | 1.71 | $ | 2.05 | $ | 1.93 | |||||||
Discontinued operations | — | — | 2.10 | 1.98 | |||||||||||
Earnings per share | $ | 1.82 | $ | 1.71 | $ | 4.15 | $ | 3.91 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In thousands) | |||||||||||||||
Revenue: | |||||||||||||||
Search & Applications | $ | 377,142 | $ | 394,659 | $ | 1,111,406 | $ | 1,188,410 | |||||||
The Match Group | 274,231 | 230,198 | 768,132 | 655,699 | |||||||||||
Media | 57,278 | 49,895 | 137,100 | 122,906 | |||||||||||
eCommerce | 130,031 | 107,825 | 366,027 | 312,616 | |||||||||||
Inter-segment eliminations | (121 | ) | (346 | ) | (460 | ) | (838 | ) | |||||||
Total | $ | 838,561 | $ | 782,231 | $ | 2,382,205 | $ | 2,278,793 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In thousands) | |||||||||||||||
Operating Income (Loss): | |||||||||||||||
Search & Applications | $ | 65,391 | $ | 80,384 | $ | 198,283 | $ | 228,492 | |||||||
The Match Group | 71,912 | 66,393 | 148,665 | 167,394 | |||||||||||
Media | (8,252 | ) | (8,723 | ) | (37,379 | ) | (27,083 | ) | |||||||
eCommerce | 4,243 | (1,585 | ) | (3,615 | ) | (3,138 | ) | ||||||||
Corporate | (46,164 | ) | (35,516 | ) | (120,936 | ) | (97,310 | ) | |||||||
Total | $ | 87,130 | $ | 100,953 | $ | 185,018 | $ | 268,355 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In thousands) | |||||||||||||||
Adjusted EBITDA: | |||||||||||||||
Search & Applications | $ | 74,391 | $ | 93,127 | $ | 226,202 | $ | 266,456 | |||||||
The Match Group | 84,339 | 61,371 | 175,017 | 178,169 | |||||||||||
Media | (7,746 | ) | (7,702 | ) | (37,781 | ) | (24,477 | ) | |||||||
eCommerce | 7,713 | 3,865 | 7,257 | 11,192 | |||||||||||
Corporate | (17,555 | ) | (16,073 | ) | (45,717 | ) | (47,225 | ) | |||||||
Total | $ | 141,142 | $ | 134,588 | $ | 324,978 | $ | 384,115 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In thousands) | |||||||||||||||
Revenue: | |||||||||||||||
United States | $ | 619,297 | $ | 544,486 | $ | 1,755,534 | $ | 1,560,751 | |||||||
All other countries | 219,264 | 237,745 | 626,671 | 718,042 | |||||||||||
Total | $ | 838,561 | $ | 782,231 | $ | 2,382,205 | $ | 2,278,793 |
September 30, 2015 | December 31, 2014 | ||||||
(In thousands) | |||||||
Long-lived assets (excluding goodwill and intangible assets): | |||||||
United States | $ | 278,970 | $ | 281,879 | |||
All other countries | 20,108 | 20,580 | |||||
Total | $ | 299,078 | $ | 302,459 |
Three Months Ended September 30, 2015 | |||||||||||||||||||||||
Adjusted EBITDA | Stock-Based Compensation Expense | Depreciation | Amortization of Intangibles | Acquisition-related Contingent Consideration Fair Value Adjustments | Operating Income (Loss) | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Search & Applications | $ | 74,391 | $ | — | $ | (3,777 | ) | $ | (6,736 | ) | $ | 1,513 | $ | 65,391 | |||||||||
The Match Group | 84,339 | (1,147 | ) | (6,173 | ) | (4,352 | ) | (755 | ) | 71,912 | |||||||||||||
Media | (7,746 | ) | (50 | ) | (280 | ) | (378 | ) | 202 | (8,252 | ) | ||||||||||||
eCommerce | 7,713 | (410 | ) | (2,188 | ) | (872 | ) | — | 4,243 | ||||||||||||||
Corporate | (17,555 | ) | (25,402 | ) | (3,207 | ) | — | — | (46,164 | ) | |||||||||||||
Total | $ | 141,142 | $ | (27,009 | ) | $ | (15,625 | ) | $ | (12,338 | ) | $ | 960 | $ | 87,130 |
Three Months Ended September 30, 2014 | |||||||||||||||||||||||
Adjusted EBITDA | Stock-Based Compensation Expense | Depreciation | Amortization of Intangibles | Acquisition-related Contingent Consideration Fair Value Adjustments | Operating Income (Loss) | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Search & Applications | $ | 93,127 | $ | — | $ | (3,596 | ) | $ | (9,147 | ) | $ | — | $ | 80,384 | |||||||||
The Match Group | 61,371 | (145 | ) | (5,794 | ) | (3,320 | ) | 14,281 | 66,393 | ||||||||||||||
Media | (7,702 | ) | (161 | ) | (225 | ) | (635 | ) | — | (8,723 | ) | ||||||||||||
eCommerce | 3,865 | (138 | ) | (1,963 | ) | (3,349 | ) | — | (1,585 | ) | |||||||||||||
Corporate | (16,073 | ) | (16,888 | ) | (2,555 | ) | — | — | (35,516 | ) | |||||||||||||
Total | $ | 134,588 | $ | (17,332 | ) | $ | (14,133 | ) | $ | (16,451 | ) | $ | 14,281 | $ | 100,953 |
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||
Adjusted EBITDA | Stock-Based Compensation Expense | Depreciation | Amortization of Intangibles | Acquisition-related Contingent Consideration Fair Value Adjustments | Operating Income (Loss) | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Search & Applications | $ | 226,202 | $ | — | $ | (11,078 | ) | $ | (20,631 | ) | $ | 3,790 | $ | 198,283 | |||||||||
The Match Group | 175,017 | (3,816 | ) | (19,885 | ) | (14,130 | ) | 11,479 | 148,665 | ||||||||||||||
Media | (37,781 | ) | (344 | ) | (712 | ) | (1,179 | ) | 2,637 | (37,379 | ) | ||||||||||||
eCommerce | 7,257 | (1,250 | ) | (6,258 | ) | (3,364 | ) | — | (3,615 | ) | |||||||||||||
Corporate | (45,717 | ) | (66,459 | ) | (8,760 | ) | — | — | (120,936 | ) | |||||||||||||
Total | $ | 324,978 | $ | (71,869 | ) | $ | (46,693 | ) | $ | (39,304 | ) | $ | 17,906 | $ | 185,018 |
Nine Months Ended September 30, 2014 | |||||||||||||||||||||||
Adjusted EBITDA | Stock-Based Compensation Expense | Depreciation | Amortization of Intangibles | Acquisition-related Contingent Consideration Fair Value Adjustments | Operating Income (Loss) | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Search & Applications | $ | 266,456 | $ | — | $ | (13,143 | ) | $ | (24,821 | ) | $ | — | $ | 228,492 | |||||||||
The Match Group | 178,169 | (332 | ) | (17,183 | ) | (6,841 | ) | 13,581 | 167,394 | ||||||||||||||
Media | (24,477 | ) | (486 | ) | (731 | ) | (1,589 | ) | 200 | (27,083 | ) | ||||||||||||
eCommerce | 11,192 | (138 | ) | (5,607 | ) | (8,585 | ) | — | (3,138 | ) | |||||||||||||
Corporate | (47,225 | ) | (42,541 | ) | (7,544 | ) | — | — | (97,310 | ) | |||||||||||||
Total | $ | 384,115 | $ | (43,497 | ) | $ | (44,208 | ) | $ | (41,836 | ) | $ | 13,781 | $ | 268,355 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In thousands) | |||||||||||||||
Gain on real estate transaction | $ | 33,586 | $ | — | $ | 33,586 | $ | — | |||||||
Impairment of long-term investments | (804 | ) | — | (1,304 | ) | (64,281 | ) | ||||||||
Foreign currency exchange gains (losses) | 308 | 2,210 | 4,838 | (612 | ) | ||||||||||
Other | 910 | 1,903 | 2,706 | 6,083 | |||||||||||
Total | $ | 34,000 | $ | 4,113 | $ | 39,826 | $ | (58,810 | ) |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Total Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 360,009 | $ | — | $ | 406,439 | $ | — | $ | 766,448 | |||||||||
Marketable securities | 53,477 | — | 460 | — | 53,937 | ||||||||||||||
Accounts receivable, net | 9 | 147,175 | 99,794 | — | 246,978 | ||||||||||||||
Other current assets | 7,261 | 93,121 | 82,236 | (3,735 | ) | 178,883 | |||||||||||||
Intercompany receivables | — | 1,557,881 | 779,941 | (2,337,822 | ) | — | |||||||||||||
Property and equipment, net | 4,574 | 228,159 | 66,345 | — | 299,078 | ||||||||||||||
Goodwill | — | 1,247,038 | 522,103 | — | 1,769,141 | ||||||||||||||
Intangible assets, net | — | 307,079 | 152,842 | — | 459,921 | ||||||||||||||
Investment in subsidiaries | 5,033,588 | 957,866 | — | (5,991,454 | ) | — | |||||||||||||
Other non-current assets | 92,132 | 28,897 | 139,963 | (8,060 | ) | 252,932 | |||||||||||||
Total assets | $ | 5,551,050 | $ | 4,567,216 | $ | 2,250,123 | $ | (8,341,071 | ) | $ | 4,027,318 | ||||||||
Accounts payable, trade | $ | 2,865 | $ | 34,991 | $ | 30,592 | $ | — | $ | 68,448 | |||||||||
Other current liabilities | 54,163 | 326,379 | 204,453 | 14 | 585,009 | ||||||||||||||
Long-term debt | 1,000,000 | — | — | — | 1,000,000 | ||||||||||||||
Income taxes payable | 858 | 4,531 | 18,252 | — | 23,641 | ||||||||||||||
Intercompany liabilities | 2,337,822 | — | — | (2,337,822 | ) | — | |||||||||||||
Other long-term liabilities | 310,151 | 105,074 | 76,386 | (11,809 | ) | 479,802 | |||||||||||||
Redeemable noncontrolling interests | — | — | 25,227 | — | 25,227 | ||||||||||||||
IAC shareholders' equity | 1,845,191 | 4,096,241 | 1,895,213 | (5,991,454 | ) | 1,845,191 | |||||||||||||
Total liabilities and shareholders' equity | $ | 5,551,050 | $ | 4,567,216 | $ | 2,250,123 | $ | (8,341,071 | ) | $ | 4,027,318 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Total Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 766,076 | $ | 1,021 | $ | 223,308 | $ | — | $ | 990,405 | |||||||||
Marketable securities | 159,197 | — | 1,451 | — | 160,648 | ||||||||||||||
Accounts receivable, net | 13 | 155,262 | 80,811 | — | 236,086 | ||||||||||||||
Other current assets | 23,923 | 91,105 | 57,487 | (5,773 | ) | 166,742 | |||||||||||||
Intercompany receivables | — | 1,688,403 | 970,810 | (2,659,213 | ) | — | |||||||||||||
Property and equipment, net | 4,950 | 232,819 | 64,690 | — | 302,459 | ||||||||||||||
Goodwill | — | 1,249,807 | 505,119 | — | 1,754,926 | ||||||||||||||
Intangible assets, net | — | 325,771 | 166,165 | — | 491,936 | ||||||||||||||
Investment in subsidiaries | 5,035,304 | 930,443 | — | (5,965,747 | ) | — | |||||||||||||
Other non-current assets | 44,610 | 20,682 | 109,372 | (2,988 | ) | 171,676 | |||||||||||||
Total assets | $ | 6,034,073 | $ | 4,695,313 | $ | 2,179,213 | $ | (8,633,721 | ) | $ | 4,274,878 | ||||||||
Accounts payable, trade | $ | 3,059 | $ | 55,320 | $ | 22,784 | $ | — | $ | 81,163 | |||||||||
Other current liabilities | 73,491 | 328,920 | 191,197 | (817 | ) | 592,791 | |||||||||||||
Long-term debt | 1,000,000 | 80,000 | — | — | 1,080,000 | ||||||||||||||
Income taxes payable | 2,240 | 4,771 | 25,624 | — | 32,635 | ||||||||||||||
Intercompany liabilities | 2,659,213 | — | — | (2,659,213 | ) | — | |||||||||||||
Other long-term liabilities | 304,117 | 104,219 | 54,328 | (7,944 | ) | 454,720 | |||||||||||||
Redeemable noncontrolling interests | — | — | 40,427 | — | 40,427 | ||||||||||||||
IAC shareholders' equity | 1,991,953 | 4,122,083 | 1,843,664 | (5,965,747 | ) | 1,991,953 | |||||||||||||
Noncontrolling interests | — | — | 1,189 | — | 1,189 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 6,034,073 | $ | 4,695,313 | $ | 2,179,213 | $ | (8,633,721 | ) | $ | 4,274,878 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Total Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | — | $ | 606,269 | $ | 235,352 | $ | (3,060 | ) | $ | 838,561 | ||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 307 | 117,292 | 87,922 | (260 | ) | 205,261 | |||||||||||||
Selling and marketing expense | 1,250 | 276,036 | 62,741 | (2,801 | ) | 337,226 | |||||||||||||
General and administrative expense | 37,186 | 70,225 | 26,710 | 1 | 134,122 | ||||||||||||||
Product development expense | 2,408 | 31,945 | 12,506 | — | 46,859 | ||||||||||||||
Depreciation | 613 | 10,799 | 4,213 | — | 15,625 | ||||||||||||||
Amortization of intangibles | — | 6,246 | 6,092 | — | 12,338 | ||||||||||||||
Total operating costs and expenses | 41,764 | 512,543 | 200,184 | (3,060 | ) | 751,431 | |||||||||||||
Operating (loss) income | (41,764 | ) | 93,726 | 35,168 | — | 87,130 | |||||||||||||
Equity in earnings of unconsolidated affiliates | 96,076 | 19,940 | 541 | (116,159 | ) | 398 | |||||||||||||
Interest expense | (12,995 | ) | (2,963 | ) | (34 | ) | — | (15,992 | ) | ||||||||||
Other income, net | 24,678 | 2,911 | 6,411 | — | 34,000 | ||||||||||||||
Earnings from continuing operations before income taxes | 65,995 | 113,614 | 42,086 | (116,159 | ) | 105,536 | |||||||||||||
Income tax provision | (401 | ) | (35,131 | ) | (4,978 | ) | — | (40,510 | ) | ||||||||||
Earnings from continuing operations | 65,594 | 78,483 | 37,108 | (116,159 | ) | 65,026 | |||||||||||||
Earnings (loss) from discontinued operations, net of tax | 17 | — | (1 | ) | 1 | 17 | |||||||||||||
Net earnings | 65,611 | 78,483 | 37,107 | (116,158 | ) | 65,043 | |||||||||||||
Net loss attributable to noncontrolling interests | — | — | 568 | — | 568 | ||||||||||||||
Net earnings attributable to IAC shareholders | $ | 65,611 | $ | 78,483 | $ | 37,675 | $ | (116,158 | ) | $ | 65,611 | ||||||||
Comprehensive income attributable to IAC shareholders | $ | 51,418 | $ | 80,157 | $ | 26,935 | $ | (107,092 | ) | $ | 51,418 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Total Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | — | $ | 570,101 | $ | 215,132 | $ | (3,002 | ) | $ | 782,231 | ||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 387 | 128,968 | 96,028 | (688 | ) | 224,695 | |||||||||||||
Selling and marketing expense | 723 | 220,780 | 59,091 | (2,273 | ) | 278,321 | |||||||||||||
General and administrative expense | 28,046 | 56,955 | 21,976 | 10 | 106,987 | ||||||||||||||
Product development expense | 1,935 | 28,131 | 10,676 | (51 | ) | 40,691 | |||||||||||||
Depreciation | 402 | 9,434 | 4,297 | — | 14,133 | ||||||||||||||
Amortization of intangibles | — | 10,784 | 5,667 | — | 16,451 | ||||||||||||||
Total operating costs and expenses | 31,493 | 455,052 | 197,735 | (3,002 | ) | 681,278 | |||||||||||||
Operating (loss) income | (31,493 | ) | 115,049 | 17,397 | — | 100,953 | |||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | 89,209 | 17,246 | 95 | (107,162 | ) | (612 | ) | ||||||||||||
Interest expense | (12,948 | ) | (1,050 | ) | (11 | ) | — | (14,009 | ) | ||||||||||
Other (expense) income, net | (8,311 | ) | 8,771 | 3,653 | — | 4,113 | |||||||||||||
Earnings from continuing operations before income taxes | 36,457 | 140,016 | 21,134 | (107,162 | ) | 90,445 | |||||||||||||
Income tax benefit (provision) | 114,625 | (46,133 | ) | (8,676 | ) | — | 59,816 | ||||||||||||
Earnings from continuing operations | 151,082 | 93,883 | 12,458 | (107,162 | ) | 150,261 | |||||||||||||
Earnings from discontinued operations, net of tax | 175,730 | — | 5 | (5 | ) | 175,730 | |||||||||||||
Net earnings | 326,812 | 93,883 | 12,463 | (107,167 | ) | 325,991 | |||||||||||||
Net loss attributable to noncontrolling interests | — | — | 821 | — | 821 | ||||||||||||||
Net earnings attributable to IAC shareholders | $ | 326,812 | $ | 93,883 | $ | 13,284 | $ | (107,167 | ) | $ | 326,812 | ||||||||
Comprehensive income (loss) attributable to IAC shareholders | $ | 289,950 | $ | 90,988 | $ | (23,904 | ) | $ | (67,084 | ) | $ | 289,950 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Total Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | — | $ | 1,787,137 | $ | 604,172 | $ | (9,104 | ) | $ | 2,382,205 | ||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 846 | 354,416 | 225,478 | (650 | ) | 580,090 | |||||||||||||
Selling and marketing expense | 3,315 | 829,308 | 190,086 | (8,420 | ) | 1,014,289 | |||||||||||||
General and administrative expense | 95,192 | 202,314 | 80,793 | (34 | ) | 378,265 | |||||||||||||
Product development expense | 6,915 | 94,075 | 37,556 | — | 138,546 | ||||||||||||||
Depreciation | 1,440 | 33,489 | 11,764 | — | 46,693 | ||||||||||||||
Amortization of intangibles | — | 18,742 | 20,562 | — | 39,304 | ||||||||||||||
Total operating costs and expenses | 107,708 | 1,532,344 | 566,239 | (9,104 | ) | 2,197,187 | |||||||||||||
Operating (loss) income | (107,708 | ) | 254,793 | 37,933 | — | 185,018 | |||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | 220,971 | 36,312 | 494 | (257,855 | ) | (78 | ) | ||||||||||||
Interest expense | (38,977 | ) | (6,220 | ) | (73 | ) | — | (45,270 | ) | ||||||||||
Other income (expense), net | 7,571 | 32,767 | (512 | ) | — | 39,826 | |||||||||||||
Earnings from continuing operations before income taxes | 81,857 | 317,652 | 37,842 | (257,855 | ) | 179,496 | |||||||||||||
Income tax benefit (provision) | 69,475 | (107,397 | ) | 3,200 | — | (34,722 | ) | ||||||||||||
Earnings from continuing operations | 151,332 | 210,255 | 41,042 | (257,855 | ) | 144,774 | |||||||||||||
(Loss) earnings from discontinued operations, net of tax | (11 | ) | — | 2 | (2 | ) | (11 | ) | |||||||||||
Net earnings | 151,321 | 210,255 | 41,044 | (257,857 | ) | 144,763 | |||||||||||||
Net loss attributable to noncontrolling interests | — | — | 6,558 | — | 6,558 | ||||||||||||||
Net earnings attributable to IAC shareholders | $ | 151,321 | $ | 210,255 | $ | 47,602 | $ | (257,857 | ) | $ | 151,321 | ||||||||
Comprehensive income (loss) attributable to IAC shareholders | $ | 94,533 | $ | 207,445 | $ | (10,827 | ) | $ | (196,618 | ) | $ | 94,533 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Total Eliminations | IAC Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||||
Revenue | $ | — | $ | 1,672,589 | $ | 615,536 | $ | (9,332 | ) | $ | 2,278,793 | ||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of revenue (exclusive of depreciation shown separately below) | 742 | 384,431 | 261,821 | (2,335 | ) | 644,659 | |||||||||||||
Selling and marketing expense | 1,534 | 677,273 | 177,013 | (6,410 | ) | 849,410 | |||||||||||||
General and administrative expense | 77,101 | 151,089 | 83,747 | 36 | 311,973 | ||||||||||||||
Product development expense | 5,111 | 81,532 | 32,332 | (623 | ) | 118,352 | |||||||||||||
Depreciation | 1,043 | 28,219 | 14,946 | — | 44,208 | ||||||||||||||
Amortization of intangibles | — | 29,444 | 12,392 | — | 41,836 | ||||||||||||||
Total operating costs and expenses | 85,531 | 1,351,988 | 582,251 | (9,332 | ) | 2,010,438 | |||||||||||||
Operating (loss) income | (85,531 | ) | 320,601 | 33,285 | — | 268,355 | |||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | 148,604 | 20,593 | 131 | (178,725 | ) | (9,397 | ) | ||||||||||||
Interest expense | (38,918 | ) | (3,144 | ) | (57 | ) | — | (42,119 | ) | ||||||||||
Other income (expense), net | 11,077 | (9,935 | ) | (59,952 | ) | — | (58,810 | ) | |||||||||||
Earnings (loss) from continuing operations before income taxes | 35,232 | 328,115 | (26,593 | ) | (178,725 | ) | 158,029 | ||||||||||||
Income tax benefit (provision) | 135,421 | (115,862 | ) | (11,017 | ) | — | 8,542 | ||||||||||||
Earnings (loss) from continuing operations | 170,653 | 212,253 | (37,610 | ) | (178,725 | ) | 166,571 | ||||||||||||
Earnings (loss) from discontinued operations, net of tax | 174,048 | — | (35 | ) | 35 | 174,048 | |||||||||||||
Net earnings (loss) | 344,701 | 212,253 | (37,645 | ) | (178,690 | ) | 340,619 | ||||||||||||
Net loss attributable to noncontrolling interests | — | — | 4,082 | — | 4,082 | ||||||||||||||
Net earnings (loss) attributable to IAC shareholders | $ | 344,701 | $ | 212,253 | $ | (33,563 | ) | $ | (178,690 | ) | $ | 344,701 | |||||||
Comprehensive income (loss) attributable to IAC shareholders | $ | 310,979 | $ | 209,078 | $ | (69,668 | ) | $ | (139,410 | ) | $ | 310,979 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | IAC Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Net cash (used in) provided by operating activities attributable to continuing operations | $ | (145,714 | ) | $ | 310,471 | $ | 19,350 | $ | 184,107 | ||||||
Cash flows from investing activities attributable to continuing operations: | |||||||||||||||
Acquisitions, net of cash acquired | — | (3,675 | ) | (39,611 | ) | (43,286 | ) | ||||||||
Capital expenditures | (1,051 | ) | (30,647 | ) | (12,860 | ) | (44,558 | ) | |||||||
Proceeds from maturities and sales of marketable debt securities | 192,928 | — | — | 192,928 | |||||||||||
Purchases of marketable debt securities | (93,134 | ) | — | — | (93,134 | ) | |||||||||
Purchases of long-term investments | — | — | (25,073 | ) | (25,073 | ) | |||||||||
Other, net | 4,890 | (1,097 | ) | 663 | 4,456 | ||||||||||
Net cash provided by (used in) investing activities attributable to continuing operations | 103,633 | (35,419 | ) | (76,881 | ) | (8,667 | ) | ||||||||
Cash flows from financing activities attributable to continuing operations: | |||||||||||||||
Purchase of treasury stock | (200,000 | ) | — | — | (200,000 | ) | |||||||||
Dividends | (84,947 | ) | — | — | (84,947 | ) | |||||||||
Principal payment on long-term debt | — | (80,000 | ) | — | (80,000 | ) | |||||||||
Issuance of common stock, net of withholding taxes | (40,197 | ) | — | — | (40,197 | ) | |||||||||
Excess tax benefits from stock-based awards | 49,016 | — | 131 | 49,147 | |||||||||||
Purchase of noncontrolling interests | — | — | (29,899 | ) | (29,899 | ) | |||||||||
Acquisition-related contingent consideration payments | — | (202 | ) | (5,510 | ) | (5,712 | ) | ||||||||
Intercompany | (87,832 | ) | (195,884 | ) | 283,716 | — | |||||||||
Other, net | 166 | — | 346 | 512 | |||||||||||
Net cash (used in) provided by financing activities attributable to continuing operations | (363,794 | ) | (276,086 | ) | 248,784 | (391,096 | ) | ||||||||
Total cash (used in) provided by continuing operations | (405,875 | ) | (1,034 | ) | 191,253 | (215,656 | ) | ||||||||
Total cash (used in) provided by discontinued operations | (192 | ) | — | 2 | (190 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | — | 13 | (8,124 | ) | (8,111 | ) | |||||||||
Net (decrease) increase in cash and cash equivalents | (406,067 | ) | (1,021 | ) | 183,131 | (223,957 | ) | ||||||||
Cash and cash equivalents at beginning of period | 766,076 | 1,021 | 223,308 | 990,405 | |||||||||||
Cash and cash equivalents at end of period | $ | 360,009 | $ | — | $ | 406,439 | $ | 766,448 |
IAC | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | IAC Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Net cash (used in) provided by operating activities attributable to continuing operations | $ | (50,458 | ) | $ | 350,889 | $ | (5,770 | ) | $ | 294,661 | |||||
Cash flows from investing activities attributable to continuing operations: | |||||||||||||||
Acquisitions, net of cash acquired | — | (191,223 | ) | (52,973 | ) | (244,196 | ) | ||||||||
Capital expenditures | (2,375 | ) | (25,866 | ) | (10,792 | ) | (39,033 | ) | |||||||
Proceeds from maturities and sales of marketable debt securities | 998 | — | — | 998 | |||||||||||
Purchases of marketable debt securities | (110,886 | ) | — | — | (110,886 | ) | |||||||||
Purchases of long-term investments | (3,000 | ) | (7,043 | ) | (7,660 | ) | (17,703 | ) | |||||||
Other, net | — | 10 | 11,914 | 11,924 | |||||||||||
Net cash used in investing activities attributable to continuing operations | (115,263 | ) | (224,122 | ) | (59,511 | ) | (398,896 | ) | |||||||
Cash flows from financing activities attributable to continuing operations: | |||||||||||||||
Dividends | (68,505 | ) | — | — | (68,505 | ) | |||||||||
Issuance of common stock, net of withholding taxes | (4,823 | ) | — | — | (4,823 | ) | |||||||||
Excess tax benefits from stock-based awards | 31,041 | — | 10,279 | 41,320 | |||||||||||
Purchase of noncontrolling interests | — | (30,000 | ) | (328 | ) | (30,328 | ) | ||||||||
Funds returned from escrow for Meetic tender offer | — | — | 12,354 | 12,354 | |||||||||||
Acquisition-related contingent consideration payments | — | (286 | ) | (7,373 | ) | (7,659 | ) | ||||||||
Intercompany | 106,215 | (90,996 | ) | (15,219 | ) | — | |||||||||
Other, net | (382 | ) | (1,343 | ) | 328 | (1,397 | ) | ||||||||
Net cash provided by (used in) financing activities attributable to continuing operations | 63,546 | (122,625 | ) | 41 | (59,038 | ) | |||||||||
Total cash (used in) provided by continuing operations | (102,175 | ) | 4,142 | (65,240 | ) | (163,273 | ) | ||||||||
Total cash used in discontinued operations | (136 | ) | — | (35 | ) | (171 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | — | 131 | (5,419 | ) | (5,288 | ) | |||||||||
Net (decrease) increase in cash and cash equivalents | (102,311 | ) | 4,273 | (70,694 | ) | (168,732 | ) | ||||||||
Cash and cash equivalents at beginning of period | 782,022 | — | 318,422 | 1,100,444 | |||||||||||
Cash and cash equivalents at end of period | $ | 679,711 | $ | 4,273 | $ | 247,728 | $ | 931,712 |
• | Websites - is principally composed of Ask.com, About.com, CityGrid, Dictionary.com, Investopedia, PriceRunner and Ask.fm. |
• | Applications - includes our direct-to-consumer downloadable desktop search and mobile applications operations ("B2C"), including SlimWare and Apalon, and our partnership operations ("B2B"). |
• | Dating North America - includes Match, Chemistry, People Media, OkCupid, Tinder and other dating businesses operating within the United States and Canada. |
• | Dating International - includes Meetic, Tinder's international operations and all dating businesses operating outside of the United States and Canada. |
• | Non-dating - includes The Princeton Review, Tutor.com and DailyBurn. |
• | Cost of revenue - consists primarily of traffic acquisition costs and includes payments made to partners who distribute our B2B customized browser-based applications, integrate our paid listings into their websites or direct traffic to our websites and fees related to distribution and the facilitating of in-app purchase of product features. These payments include amounts based on revenue share and other arrangements. Cost of revenue also includes ShoeBuy's cost of products sold and shipping and handling costs, production costs related to media produced by Electus and other businesses within our Media segment, content acquisition costs, expenses associated with the operation of the Company's data centers, including compensation (including stock-based compensation) and other employee-related costs for personnel engaged in data center functions, rent, energy and hosting fees. |
• | Selling and marketing expense - consists primarily of advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel engaged in sales, sales support and customer service functions. Advertising expenditures include online marketing, including fees paid to search engines and third parties that distribute our B2C downloadable applications, and offline marketing, which is primarily television advertising. |
• | General and administrative expense - consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in executive management, finance, legal, tax and human resources, facilities costs and fees for professional services. |
• | Product development expense - consists primarily of compensation (including stock-based compensation) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology. |
• | 2013 Senior Notes - IAC's 4.875% Senior Notes due November 30, 2018, with interest payable each May 30 and November 30, which commenced May 30, 2014. |
• | 2012 Senior Notes - IAC's 4.75% Senior Notes due December 21, 2022, with interest payable each June 15 and December 15, which commenced June 15, 2013. |
• | Liberty Bonds - 5% New York City Industrial Development Agency Liberty Bonds due September 1, 2035, with interest payable each March 1 and September 1, which commenced March 1, 2006. The Liberty Bonds were redeemed on September 1, 2015. |
• | Match Group, Inc. - is the company undertaking the proposed initial public offering which includes IAC's The Match Group segment, excluding DailyBurn. |
• | Match Group, Inc. commenced a private exchange offer to eligible holders to exchange any and all of the 2012 Senior Notes for up to $500 million aggregate principal amount of new 6.75% Senior Notes due 2022 (the "Match Notes") to be issued by Match Group, Inc. ("Match Exchange Offer"). |
• | The Company expects to exchange $443.5 million of the 2012 Senior Notes for $443.5 million of the Match Notes pursuant to the Match Exchange Offer. Based on the results of the Match Exchange Offer, IAC does not expect to accept any 2013 Senior Notes for payment in the cash tender offer, which commenced on October 16, 2015. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2015 | $ Change | % Change | 2014 | 2015 | $ Change | % Change | 2014 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Search & Applications | $ | 377,142 | $ | (17,517 | ) | (4)% | $ | 394,659 | $ | 1,111,406 | $ | (77,004 | ) | (6)% | $ | 1,188,410 | |||||||||||
The Match Group | 274,231 | 44,033 | 19% | 230,198 | 768,132 | 112,433 | 17% | 655,699 | |||||||||||||||||||
Media | 57,278 | 7,383 | 15% | 49,895 | 137,100 | 14,194 | 12% | 122,906 | |||||||||||||||||||
eCommerce | 130,031 | 22,206 | 21% | 107,825 | 366,027 | 53,411 | 17% | 312,616 | |||||||||||||||||||
Inter-segment eliminations | (121 | ) | 225 | 65% | (346 | ) | (460 | ) | 378 | 45% | (838 | ) | |||||||||||||||
Total | $ | 838,561 | $ | 56,330 | 7% | $ | 782,231 | $ | 2,382,205 | $ | 103,412 | 5% | $ | 2,278,793 |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Cost of revenue (exclusive of depreciation shown separately below) | $205,261 | $(19,434) | (9)% | $224,695 | |||
As a percentage of revenue | 24% | 29% |
• | The Search & Applications decrease was primarily due to a reduction of $40.2 million in traffic acquisition costs driven by a decline in revenue at Ask.com and B2B. |
• | The Match Group increase was primarily due to a significant increase in in-app purchase fees given that our native mobile apps were largely introduced in the second quarter of 2014 and the full quarter contribution from the acquisition of The Princeton Review. |
• | The Media increase was primarily due to increases in hosting fees and content costs related to Vimeo's expanded On Demand catalog and production costs at IAC Films. |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Cost of revenue (exclusive of depreciation shown separately below) | $580,090 | $(64,569) | (10)% | $644,659 | |||
As a percentage of revenue | 24% | 28% |
• | The Search & Applications decrease is primarily due to the factors described above in the three month discussion. |
• | The Match Group increase is primarily due to the factors described above in the three month discussion, as well as higher hosting fees driven by growth in users and product features. The full year contribution from the acquisition of The Princeton Review was an increase of $20.8 million. |
• | The Media increase is primarily due to the factors described above in the three month discussion, partially offset by decreased production costs at Electus due, in part, to the timing of certain projects. |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Selling and marketing expense | $337,226 | $58,905 | 21% | $278,321 | |||
As a percentage of revenue | 40% | 36% |
• | The Search & Applications increase was primarily due to an increase of $38.9 million in online marketing, which was primarily related to a significant increase in new B2C downloadable applications and About.com. |
• | The eCommerce increase was primarily due to increases of $10.9 million in offline and online marketing related to HomeAdvisor and $3.6 million in compensation due, in part, to increased headcount at HomeAdvisor. |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Selling and marketing expense | $1,014,289 | $164,879 | 19% | $849,410 | |||
As a percentage of revenue | 43% | 37% |
• | The increases from Search & Applications and eCommerce are primarily due to the factors described above in the three month discussion. |
• | The Match Group increase was primarily due to an increase in online marketing at Dating and DailyBurn, the acquisition of The Princeton Review and an increase in compensation. |
• | The Media increase was primarily due to an increase of $12.2 million in online marketing at Vimeo. |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
General and administrative expense | $134,122 | $27,135 | 25% | $106,987 | |||
As a percentage of revenue | 16% | 14% |
• | The Match Group increase was primarily due to the favorable impact in the prior year of a $14.3 million acquisition-related contingent consideration fair value adjustment, as well the full quarter contribution from the acquisition of The Princeton Review. |
• | The Corporate increase was primarily due to higher compensation costs driven by an increase in stock-based compensation expense as a result of the modification of certain equity awards in the current year period, and certain transaction related costs. |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
General and administrative expense | $378,265 | $66,292 | 21% | $311,973 | |||
As a percentage of revenue | 16% | 14% |
• | The Match Group increase was primarily due to an increase of $26.5 million from the acquisition of The Princeton Review, an increase of $5.9 million in severance expense and costs in the current year related to our ongoing consolidation and streamlining of technology systems and European operations at our Dating businesses and a favorable increase of $2.1 million in acquisition-related contingent consideration fair value adjustments, partially offset by a $3.9 million benefit in the prior year related to the expiration of the statute of limitations for a non-income tax matter. |
• | The Corporate increase was primarily due to an increase in stock-based compensation expense as a result of the modification of certain equity awards in the current year period, a higher number of forfeited awards in the prior year and the issuance of equity awards since the prior year. General and administrative expense was further impacted by certain transaction related costs. |
• | The eCommerce increase was primarily due to increases in employee-related costs and compensation as a result of increased headcount and an increase in bad debt expense at HomeAdvisor. |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Product development expense | $46,859 | $6,168 | 15% | $40,691 | |||
As a percentage of revenue | 6% | 5% |
• | The Match Group increase is primarily related to an increase in compensation due, in part, to an increase in headcount at our growth stage businesses. |
• | The eCommerce increase is primarily related to an increase in compensation at HomeAdvisor due, in part, to increased headcount. |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Product development expense | $138,546 | $20,194 | 17% | $118,352 | |||
As a percentage of revenue | 6% | 5% |
• | The Match Group increase was due to $4.0 million in severance expense in the current year, primarily incurred in the first half of 2015, related to our ongoing consolidation and streamlining of technology systems and European operations at our Dating businesses, $3.2 million related to acquisitions and an increase in compensation due, in part, to an increase in headcount at our existing Dating businesses. |
• | The eCommerce increase is primarily due to the factor described above in the three month discussion. |
• | The Media increase is due to an increase in headcount at Vimeo. |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Depreciation | $15,625 | $1,492 | 11% | $14,133 | |||
As a percentage of revenue | 2% | 2% |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Depreciation | $46,693 | $2,485 | 6% | $44,208 | |||
As a percentage of revenue | 2% | 2% |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2015 | $ Change | % Change | 2014 | 2015 | $ Change | % Change | 2014 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Search & Applications | $ | 74,391 | $ | (18,736 | ) | (20)% | $ | 93,127 | $ | 226,202 | $ | (40,254 | ) | (15)% | $ | 266,456 | |||||||||||
The Match Group | 84,339 | 22,968 | 37% | 61,371 | 175,017 | (3,152 | ) | (2)% | 178,169 | ||||||||||||||||||
Media | (7,746 | ) | (44 | ) | (1)% | (7,702 | ) | (37,781 | ) | (13,304 | ) | (54)% | (24,477 | ) | |||||||||||||
eCommerce | 7,713 | 3,848 | 100% | 3,865 | 7,257 | (3,935 | ) | (35)% | 11,192 | ||||||||||||||||||
Corporate | (17,555 | ) | (1,482 | ) | (9)% | (16,073 | ) | (45,717 | ) | 1,508 | 3% | (47,225 | ) | ||||||||||||||
Total | $ | 141,142 | $ | 6,554 | 5% | $ | 134,588 | $ | 324,978 | $ | (59,137 | ) | (15)% | $ | 384,115 | ||||||||||||
As a percentage of revenue | 17% | 17% | 14% | 17% |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2015 | $ Change | % Change | 2014 | 2015 | $ Change | % Change | 2014 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Search & Applications | $ | 65,391 | $ | (14,993 | ) | (19)% | $ | 80,384 | $ | 198,283 | $ | (30,209 | ) | (13)% | $ | 228,492 | |||||||||||
The Match Group | 71,912 | 5,519 | 8% | 66,393 | 148,665 | (18,729 | ) | (11)% | 167,394 | ||||||||||||||||||
Media | (8,252 | ) | 471 | 5% | (8,723 | ) | (37,379 | ) | (10,296 | ) | (38)% | (27,083 | ) | ||||||||||||||
eCommerce | 4,243 | 5,828 | NM | (1,585 | ) | (3,615 | ) | (477 | ) | (15)% | (3,138 | ) | |||||||||||||||
Corporate | (46,164 | ) | (10,648 | ) | (30)% | (35,516 | ) | (120,936 | ) | (23,626 | ) | (24)% | (97,310 | ) | |||||||||||||
Total | $ | 87,130 | $ | (13,823 | ) | (14)% | $ | 100,953 | $ | 185,018 | $ | (83,337 | ) | (31)% | $ | 268,355 | |||||||||||
As a percentage of revenue | 10% | 13% | 8% | 12% |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Equity in earnings (losses) of unconsolidated affiliates | $398 | $1,010 | NM | $(612) |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Equity in losses of unconsolidated affiliates | $(78) | $9,319 | 99% | $(9,397) |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Interest expense | $(15,992) | $(1,983) | (14)% | $(14,009) |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Interest expense | $(45,270) | $(3,151) | (7)% | $(42,119) |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Other income, net | $34,000 | $29,887 | 727% | $4,113 |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Other income (expense), net | $39,826 | $98,636 | NM | $(58,810) |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Income tax (provision) benefit | $(40,510) | NM | NM | $59,816 | |||
Effective income tax rate | 38% | NM |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Income tax benefit (provision) | $(34,722) | NM | NM | $8,542 | |||
Effective income tax rate | 19% | NM |
Three Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
Earnings from discontinued operations, net of tax | $17 | NM | NM | $175,730 |
Nine Months Ended September 30, | |||||||
2015 | $ Change | % Change | 2014 | ||||
(Dollars in thousands) | |||||||
(Loss) earnings from discontinued operations, net of tax | $(11) | NM | NM | $174,048 |
September 30, 2015 | December 31, 2014 | |||||||
(In thousands) | ||||||||
Cash and cash equivalents: | ||||||||
United States (1) | $ | 361,575 | $ | 770,050 | ||||
All other countries (2) | 404,873 | 220,355 | ||||||
Marketable securities (United States) (3) | 53,937 | 160,648 | ||||||
Total cash and cash equivalents and marketable securities | $ | 820,385 | $ | 1,151,053 | ||||
Long-term debt: | ||||||||
2013 Senior Notes due November 30, 2018 | $ | 500,000 | $ | 500,000 | ||||
2012 Senior Notes due December 15, 2022 | 500,000 | 500,000 | ||||||
Liberty Bonds due September 1, 2035 | — | 80,000 | ||||||
Total long-term debt | $ | 1,000,000 | $ | 1,080,000 |
Nine Months Ended September 30, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Net cash provided by operating activities | $ | 184,107 | $ | 294,661 | ||||
Net cash used in investing activities | (8,667 | ) | (398,896 | ) | ||||
Net cash used in financing activities | (391,096 | ) | (59,038 | ) |
Payments Due by Period | |||||||||||||||||||
Contractual Obligations(a) | Less Than 1 Year | 1–3 Years | 3–5 Years | More Than 5 Years | Total | ||||||||||||||
(In thousands) | |||||||||||||||||||
Long-term debt(b) | $ | 48,125 | $ | 96,250 | $ | 559,688 | $ | 559,375 | $ | 1,263,438 | |||||||||
Operating leases(c) | 34,323 | 55,570 | 30,069 | 184,310 | 304,272 | ||||||||||||||
Purchase obligations(d) | 3,081 | 346 | 8 | — | 3,435 | ||||||||||||||
Total contractual cash obligations | $ | 85,529 | $ | 152,166 | $ | 589,765 | $ | 743,685 | $ | 1,571,145 |
(a) | The Company has excluded $23.0 million in unrecognized tax benefits and related interest from the table above as we are unable to make a reasonably reliable estimate of the period in which these liabilities might be paid. For additional information on income taxes, see Note 2 to the consolidated financial statements. |
(b) | Represents contractual amounts due including interest. |
(c) | The Company leases land, office space, data center facilities and equipment used in connection with operations under various operating leases, many of which contain escalation clauses. The Company is also committed to pay a portion of the related operating expenses under a data center lease agreement. These operating expenses are not included in the table above. |
(d) | The purchase obligations primarily include advertising commitments, which commitments are reducible or terminable such that these commitments can never exceed associated revenue by a meaningful amount. |
Exhibit Number | Description | Location | |
3.1 | Restated Certificate of Incorporation of IAC/InterActiveCorp. | Exhibit 3.1 to the Registrant's Registration Statement on Form 8-A/A, filed on August 12, 2005. | |
3.2 | Certificate of Amendment of the Restated Certificate of Incorporation of IAC/InterActiveCorp. | Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on August 22, 2008. | |
3.3 | Amended and Restated By-Laws of IAC/InterActiveCorp. | Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on December 6, 2010. | |
10.1 | Stock Purchase Agreement, dated as of July 13, 2015, by and among Match.com Inc., Plentyoffish Media Inc., Markus Frind, Markus Family Trust No. 2, and Frind Enterprises Ltd. | Exhibit 2.1 to the Registrant's Current Report on Form 8-K, filed on July 17, 2015. | |
31.1 | Certification of the Chairman and Senior Executive pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.(1) | ||
31.2 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.(1) | ||
31.3 | Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.(1) | ||
32.1 | Certification of the Chairman and Senior Executive pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.(2) | ||
32.2 | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.(2) | ||
32.3 | Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.(2) | ||
101.INS | XBRL Instance | ||
101.SCH | XBRL Taxonomy Extension Schema | ||
101.CAL | XBRL Taxonomy Extension Calculation | ||
101.DEF | XBRL Taxonomy Extension Definition | ||
101.LAB | XBRL Taxonomy Extension Labels | ||
101.PRE | XBRL Taxonomy Extension Presentation |
(1) | Filed herewith. |
(2) | Furnished herewith. |
Dated: | November 9, 2015 | |||
IAC/INTERACTIVECORP | ||||
By: | /s/ GREGG WINIARSKI | |||
Gregg Winiarski | ||||
Executive Vice President, General Counsel & Secretary (acting Principal Financial Officer) |
Signature | Title | Date | |
/s/ GREGG WINIARSKI | Executive Vice President, General Counsel & Secretary (acting Principal Financial Officer) | November 9, 2015 | |
Gregg Winiarski |
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2015 of IAC/InterActiveCorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | November 9, 2015 | /s/ BARRY DILLER | |
Barry Diller Chairman and Senior Executive |
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2015 of IAC/InterActiveCorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | November 9, 2015 | /s/ JOSEPH LEVIN | |
Joseph Levin Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2015 of IAC/InterActiveCorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | November 9, 2015 | /s/ GREGG WINIARSKI | |
Gregg Winiarski Executive Vice President, General Counsel & Secretary (acting Principal Financial Officer) |
(1) | the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2015 of IAC/InterActiveCorp (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of IAC/InterActiveCorp. |
Dated: | November 9, 2015 | /s/ BARRY DILLER | |
Barry Diller Chairman and Senior Executive |
(1) | the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2015 of IAC/InterActiveCorp (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of IAC/InterActiveCorp. |
Dated: | November 9, 2015 | /s/ JOSEPH LEVIN | |
Joseph Levin Chief Executive Officer |
(1) | the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2015 of IAC/InterActiveCorp (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of IAC/InterActiveCorp. |
Dated: | November 9, 2015 | /s/ GREGG WINIARSKI | |
Gregg Winiarski Executive Vice President, General Counsel & Secretary (acting Principal Financial Officer) |
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