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Traditional Corporate Segment Information Telecom Optics And other (1) Total - ------------------- ------- ------ ------------- ----- Revenues (2) 2002 $ 8,339,467 4,167,115 -- $ 12,506,582 2001 $ 21,076,466 5,066,690 -- $ 26,143,156 2000 $ 1,497,911 768,353 -- $ 2,266,264 Segment operating loss (3) 2002 $ (11,705,885) (4,006,492) (35,869,368) $(51,581,745) 2001 $ (7,201,837) 73,162 (55,997,603) $(63,126,278) 2000 $ (7,540,317) (365,316) (8,292,289) $(16,197,922) Depreciation and amortization 2002 $ 8,147,870 2,534,427 240,234 $ 10,922,531 2001 $ 13,450,705 2,617,060 194,024 $ 16,261,789 2000 $ 2,468,543 558,205 63,574 $ 3,090,322 Capital expenditures for segment assets 2002 $ 1,649,634 401,379 706,515 $ 2,757,528 2001 $ 5,500,656 1,146,402 583,636 $ 7,230,694 2000 $ 2,768,108 2,255,552 124,778 $ 5,148,438 Total assets 2002 $ 16,733,907 5,283,454 14,959,867 $ 36,977,228 2001 $ 40,307,590 12,899,691 31,083,127 $ 84,290,408 Other Foreign Geographic Countries Information United States Canada (over 15) Total - ----------- ------------- ------ --------- ----- Revenues (4) 2002 $ 10,810,964 371,539 1,324,079 $ 12,506,582 2001 $ 22,236,329 1,678,633 2,228,194 $ 26,143,156 2000 $ 1,749,974 -- 516,290 $ 2,266,264 - ---------- (1) Corporate functions include certain members of executive management, the corporate accounting and finance function and other typical administrative functions which are not allocated to segments. |
We believe that our ability to attract new users to our brands will depend primarily upon the following factors: •our ability to continue to increase consumer acceptance and adoption of dating products, particularly in emerging markets and other parts of the world where the associated stigma is only beginning to erode; •continued growth in internet access and smart phone adoption in certain regions of the world, particularly emerging markets; •the continued strength of our established brands and the growth of our newer brands; •the breadth and depth of our active communities of users; •our brands’ reputation for trust and safety; •our ability to evolve our products to keep up with user requirements, social trends, and the ever-evolving technological landscape; •our products’ ability to keep up with the constantly changing regulatory landscape, in particular, as it relates to the regulation of consumer digital media platforms; •our ability to efficiently acquire new users for our products; •our ability to continue to optimize our monetization strategies; and •the design and functionality of our products. |
Other Agreements The Transaction Agreement provides that each of Match Group and IAC has agreed to indemnify, defend and hold harmless the other party from and against any liabilities arising out of: (i) any asset or liability allocated to such party or the other members of such party's group under the Transaction Agreement or the businesses of such party's group after the closing of the Separation; (ii) any breach of, or failure to perform or comply with, any covenant, undertaking or obligation of a member of such party's group contained in the Transaction Agreement that survives the closing of the Separation or is contained in any ancillary agreement; and (iii) any untrue or misleading statement or alleged untrue or misleading statement of a material fact or omission, with respect to information contained in or incorporated into the Form S-4 Registration Statement (the “Form S-4”) filed with the Securities and Exchange Commission (the “SEC”) by IAC and Former IAC in connection with the Separation or the joint proxy statement/prospectus filed by Former IAC and Former Match Group with the SEC pursuant to the Form S-4. |
Delaware corporate law and our certificate of incorporation and bylaws contain provisions that could discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous, including provisions which: •authorize the issuance of “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares and to discourage a takeover attempt; •establish a classified board of directors, as a result of which our board is divided into three classes, with each class serving for staggered three-year terms, which prevents stockholders from electing an entirely new board of directors at an annual meeting; •prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders; •eliminate the ability of our stockholders to call special meetings of stockholders; •provide that certain litigation against us can be brought only in Delaware (subject to certain exceptions); and •provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws. |
The Exchangeable Notes are exchangeable under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days during the period of 30 consecutive trading days during the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price on each applicable trading day; (2) during the five-business day period after any five-consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the exchange rate on each such trading day; (3) if the issuer calls the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events as further described under the indentures governing the respective Exchangeable Notes. |
Other Agreements The Transaction Agreement provides that each of Match Group and IAC has agreed to indemnify, defend and hold harmless the other party from and against any liabilities arising out of: (i) any asset or liability allocated to such party or the other members of such party's group under the Transaction Agreement or the businesses of such party's group after the closing of the Separation; (ii) any breach of, or failure to perform or comply with, any covenant, undertaking or obligation of a member of such party's group contained in the Transaction Agreement that survives the closing of the Separation or is contained in any ancillary agreement; and (iii) any untrue or misleading statement or alleged untrue or misleading statement of a material fact or omission, with respect to information contained in or incorporated into the Form S-4 Registration Statement (the “Form S-4”) filed with the Securities and Exchange Commission (the “SEC”) by IAC and Former IAC in connection with the Separation or the joint proxy statement/prospectus filed by Former IAC and Former Match Group with the SEC pursuant to the Form S-4. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 25, 2021: Signature Title /s/ JOSEPH LEVIN Executive Chairman of the Board Joseph Levin /s/ SHARMISTHA DUBEY Chief Executive Officer and Director (Principal Executive Officer) Sharmistha Dubey /s/ GARY SWIDLER Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) Gary Swidler /s/ PHILIP D. EIGENMANN Chief Accounting Officer (Principal Accounting Officer) Philip D. Eigenmann /s/ STEPHEN BAILEYDirector Stephen Bailey /s/ MELISSA BRENNERDirector Melissa Brenner /s/ ANN L. McDANIEL Director Ann L. McDaniel /s/ THOMAS J. McINERNEY Director Thomas J. McInerney /s/ WENDI MURDOCHDirector Wendi Murdoch /s/ RYAN REYNOLDSDirector Ryan Reynolds /s/ GLENN H. SCHIFFMANDirector Glenn H. Schiffman /s/ PAMELA S. SEYMONDirector Pamela S. Seymon /s/ ALAN G. SPOONDirector Alan G. Spoon Schedule II MATCH GROUP, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS ______________________ (a)Additions to the allowance for credit losses and doubtful accounts are charged to expense, net of the recovery of previous year expenses. |
We believe that our ability to compete successfully in the case of our dating business will depend primarily upon the following factors: • our ability to continue to increase consumer acceptance and adoption of dating products, particularly in emerging markets and other parts of the world where the stigma is beginning to erode; • continued growth in Internet access and smart phone adoption in certain regions of the world, particularly emerging markets; • the continued strength of Match Group brands; • the breadth and depth of Match Group active user communities relative to those of its competitors; • our ability to evolve our dating products and develop new products in response to competitor offerings, user requirements, social trends, the ever-evolving technological landscape and the ever-changing regulatory landscape (in particular, as it relates to the regulation of consumer digital media platforms); • our ability to efficiently acquire new users for our dating products; •our ability to continue to optimize our monetization strategies; and •the design and functionality of our dating products. |
We believe that our ability to compete successfully will depend primarily upon the following factors: • the size, quality, diversity and stability of our network of service professionals and the breadth of our online directory listings; • our ability to consistently generate service requests and jobs through the Marketplace and leads through our online directories that convert into revenue for service professionals in a cost-effective manner; • our ability to increasingly engage with consumers directly through our platforms, including our various mobile applications (rather than through search engine marketing or via free search engine referrals); • the functionality of our websites and mobile applications and the attractiveness of their features and our products and services generally to consumers and service professionals, as well as our continued ability to introduce new products and services that resonate with consumers and service professionals generally; • our ability to continue to build and maintain awareness of, and trust in and loyalty to, our various brands, particularly our Angie’s List, HomeAdvisor and Handy brands; and • the quality and consistency of the service professional pre-screening processes and ongoing quality control efforts, as well as the reliability, depth and timeliness of customer ratings and reviews. |
Content As of the date of this report, our Dotdash business consisted of the following brands: • the Verywell family of brands, providing information and resources through which users can explore a full spectrum of health and wellness topics, from comprehensive information on medical conditions to advice on fitness, nutrition, mental health, pregnancy and more; • the Spruce family of brands, providing information and resources relating to home decor, home repair, recipes, cooking techniques, pets and crafts, as well as practical, real-life tips and inspiration to help users create their best home; • the Balance family of brands, providing information and resources relating to personal finance, career and small business topics that makes personal finance easy to understand and where users can find clear, practical, and straightforward personal financial advice; • Investopedia, an online resource that provides investment and personal finance education, information and resources; • Lifewire, a leading online technology information property that provides expert-created, real-world technology information, resources and content with informative visuals and straightforward instruction that help users fix tech gadgets, learn how to perform specific tech tasks, and find the best tech products; • TripSavvy, a travel website written by real experts (not anonymous reviewers) where users can find useful travel advice and inspiration from destinations around the world; • Byrdie and MyDomaine, beauty and lifestyle websites where users can find beauty and style advice and curated home-design inspiration, fresh recipes and healthy relationship; • Brides, a leading online resource that inspires and guides users as they make decisions from pre-engagement to honeymoon and is committed to bringing its users an inclusive look at the world of weddings with every type of couple, every type of wedding and every type of celebration; • Liquor.com, a lifestyle website featuring award-winning articles, hand-selected recipes, bar guides and more; • TreeHugger.com, a leading online resource for news and information related to sustainability, as well as green news, solutions, and product information; • Mother Nature Network, a leading online resource for news and information related to the environment and responsible living; and • ThoughtCo, a leading online information and reference site with a focus on expert-created education content where users can find answers to questions and information regarding a broad range of disciplines, including science, technology and math, languages, and the humanities and the arts; Through these brands, we provide original and engaging digital content in a variety of formats, including articles, illustrations, videos, and images. |
Operating abroad, particularly in jurisdictions where we have limited experience, exposes us to additional risks, including: •operational and compliance challenges caused by distance, language barriers and cultural differences; •difficulties in staffing and managing international operations; •differing levels (or lack) of social and technological acceptance of our products and services; •slow or lagging growth in the commercial use and acceptance of the Internet; •foreign currency fluctuations; •restrictions on the transfer of funds among countries and back to the United States and related repatriation costs; •differing and potentially adverse tax laws; • compliance challenges due to differences in laws and regulatory environments, particularly in the case of privacy, data security and intermediary liability laws, rules and regulations; •competitive environments that favor local businesses; •limitations on the level of intellectual property protection; and •trade sanctions, political unrest, terrorism, war and epidemics or the threat of any of these events. |
The terms of the indebtedness of IAC, Match Group and ANGI Homeservices could: • limit our respective abilities to obtain additional financing to fund working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes; • limit our respective abilities to use operating cash flow in other areas of our respective businesses because we must dedicate a substantial portion of these funds to service indebtedness; • limit our respective abilities to compete with other companies who are not as highly leveraged; • restrict any one or more of us from making strategic acquisitions, developing properties or exploiting business opportunities; • restrict the way in which one or more of us conducts business; • expose one or more of us to potential events of default, which if not cured or waived, could have a material adverse effect on our business, financial condition and operating results; • increase our respective vulnerabilities to a downturn in general economic conditions or in pricing of our various products and services; and •limit our respective abilities to react to changing market conditions in the various industries in which we do business. |
To preserve the tax-free treatment of certain aspects of the Separation, the tax matters agreement will, during the two-year period following the Separation, impose certain restrictions on New IAC and New Match (except in specific circumstances): (i) ceasing to actively conduct certain of their respective businesses; (2) entering into certain transactions or a series of transactions pursuant to which all or a portion of their outstanding capital stock would be acquired, whether by merger or otherwise; (iii) liquidating or merging or consolidating with any other person; (iv) issuing equity securities beyond certain thresholds; (v) repurchasing shares of their outstanding capital stock (other than in certain open-market transactions); or (vi) taking any other action that (or failing to take any other action, the failure of which) would certain aspects of the Separation, together with certain related transactions, to fail to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code. |
Net cash provided by financing activities includes $1.2 billion in proceeds from the issuance of the 2026 and 2030 Exchangeable Notes, $350.0 million in proceeds from the 5.625% MTCH Senior Notes, $40.0 million in borrowings under the MTCH Credit Facility, and $10.7 million in proceeds from the exercise of IAC stock options, partially offset by $300.0 million to repay the outstanding borrowings under the MTCH Credit Facility, $216.4 million for the repurchase of 3.1 million shares of MTCH common stock, on a settlement date basis, at an average price of $70.02 per share, $203.2 million and $35.3 million for withholding taxes paid on behalf of MTCH and ANGI employees, respectively, for stock-based awards that were net settled, $136.9 million used to pay the net premium on the exchangeable note hedge and warrant transactions, $93.1 million for withholding taxes paid on behalf of IAC employees for stock-based awards that were net settled, $56.9 million for the repurchase of 7.2 million shares of ANGI common stock, on a settlement date basis, at an average price of $7.90 per share, $35.0 million for repurchases of IAC debt, $29.2 million for distributions to and purchases of noncontrolling interests, $27.8 million of debt issuance costs, and $13.8 million in principal payments on ANGI debt. |
Emerging & Other Our Emerging & Other segment primarily includes: • Ask Media Group, a collection of websites providing general search services, and to a lesser extent, content that help users find the information they need; • Bluecrew, a technology driven staffing platform exclusively for flexible W-2 work, which we acquired a controlling interest in on February 26, 2018; • NurseFly, a platform to efficiently connect temporary healthcare professionals with job opportunities, which we acquired a controlling interest in on June 26, 2019; • The Daily Beast, a website dedicated to news, commentary, culture and entertainment that publishes original reporting and opinion from its roster of full-time journalists and contributors; • College Humor Media, a provider of digital content, including its subscription only property, Dropout.tv; IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) • IAC Films, a provider of production and producer services for feature films, primarily for initial sale and distribution through theatrical releases and video-on-demand services in the United States and internationally; and • For periods prior to their sales: ◦ CityGrid, an advertising network that integrated local content and advertising for distribution to affiliated and third-party publishers across web and mobile platforms, sold December 31, 2018. |
The Exchangeable Notes are exchangeable under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days during the period of 30 consecutive trading days during the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the exchange rate on each such trading day; (3) if the issuer calls the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events as further described under the indenture governing the Exchangeable Notes. |
IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 15-RELATED PARTY TRANSACTIONS IAC and MTCH: IAC and MTCH, in connection with MTCH's IPO, entered into the following agreements: • A Master Transaction Agreement, under which MTCH agrees to assume all of the assets and liabilities related to its business and agrees to indemnify IAC against any losses arising out of any breach by MTCH of the Master Transaction Agreement or other IPO related agreements; • An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of MTCH common stock and (ii) anti-dilution rights with respect to MTCH common stock; • An Employee Matters Agreement, which governs the respective rights, responsibilities and obligations of IAC and MTCH after the IPO with respect to a range of compensation (including stock-based compensation) and benefit issues; • A Tax Sharing Agreement, which governs the respective rights, responsibilities and obligations of IAC and MTCH with respect to tax liabilities and benefits, entitlement to refunds, preparation of tax returns, tax contests and other tax matters regarding U.S. federal, state, local and foreign income taxes; and • A Services Agreement, under which IAC has agreed to provide a range of services to MTCH, including, among others, (i) assistance with certain legal, finance, internal audit, treasury, information technology support, insurance and tax affairs, including assistance with certain public company reporting obligations; (ii) payroll processing services; (iii) tax compliance services; and (iv) such other services as to which IAC and MTCH may agree, and MTCH agrees to provide IAC informational technology services and such other services as to which IAC and MTCH may agree. |
Under the Contribution IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Agreement, ANGI agrees to indemnify IAC against any losses arising out of any breach by ANGI of the Contribution Agreement; • An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of ANGI common stock owned by IAC; (ii) anti-dilution rights with respect to ANGI common stock; and (iii) specified board matters with respect to designation of ANGI directors; • A Services Agreement, under which IAC has agreed to provide a range of services to ANGI, including, among others, (i) assistance with certain legal, M&A, human resources, finance, risk management, internal audit and treasury functions, health and wellness, information security services and insurance and tax affairs, including assistance with certain public company and unclaimed property reporting obligations; (ii) accounting, controllership and payroll processing services; (iii) investor relations services; (iv) tax compliance services; and (v) such other services as to which IAC and ANGI may agree. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 27, 2020: Signature Title /s/ BARRY DILLER Chairman of the Board, Senior Executive and Director Barry Diller /s/ JOSEPH LEVIN Chief Executive Officer and Director Joseph Levin /s/ VICTOR A. KAUFMAN Vice Chairman and Director Victor A. Kaufman /s/ GLENN H. SCHIFFMAN Executive Vice President and Chief Financial Officer Glenn H. Schiffman /s/ MICHAEL H. SCHWERDTMAN Senior Vice President and Controller (Chief Accounting Officer) Michael H. Schwerdtman /s/ CHELSEA CLINTON Director Chelsea Clinton /s/ MICHAEL D. EISNER Director Michael D. Eisner /s/ BONNIE S. HAMMER Director Bonnie S. Hammer /s/ BRYAN LOURD Director Bryan Lourd /s/ DAVID S. ROSENBLATT Director David S. Rosenblatt /s/ ALAN G. SPOON Director Alan G. Spoon /s/ ALEXANDER VON FURSTENBERG Director Alexander von Furstenberg /s/ RICHARD F. ZANNINO Director Richard F. Zannino Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS _________________________________________________________ (a) Additions to the allowance for doubtful accounts are charged to expense. |
We believe that our ability to compete successfully in the case of our dating business will depend primarily upon the following factors: • our ability to continue to increase consumer acceptance and adoption of online dating products, particularly in emerging markets and other parts of the world where the stigma is only beginning to erode; • continued growth in Internet access and smart phone adoption in certain regions of the world, particularly emerging markets; • the continued strength of Match Group brands; • the breadth and depth of Match Group active user communities relative to those of its competitors; • our ability to evolve our dating products in response to competitor offerings, user requirements, social trends, the ever-evolving technological landscape and the ever-changing regulatory landscape (in particular, as it relates to the regulation of online platforms); • our ability to efficiently acquire new users for our dating products; • our ability to continue to optimize our monetization strategies; and • the design and functionality of our dating products. |
We believe that our ability to compete successfully will depend primarily upon the following factors: • the size, quality, diversity and stability of our network of service professionals and the breadth of our online directory listings; • the functionality of our websites and mobile applications and the attractiveness of their features and our products and services generally to consumers and service professionals, as well as our continued ability to introduce new products and services that resonate with consumers and service professionals generally; • our ability to continue to build and maintain awareness of, and trust in and loyalty to, our various brands, particularly our Angie’s List, HomeAdvisor and Handy brands; • our ability to consistently generate service requests and jobs through the Marketplace and leads through our online directories that convert into revenue for our service professionals in a cost-effective manner; and • the quality and consistency of our service professional pre-screening processes and ongoing quality control efforts, as well as the reliability, depth and timeliness of customer ratings and reviews. |
Content As of the date of this report, our Dotdash business consist of the following brands: • the Verywell family of brands, a leading online health publisher and resource where users can explore a full spectrum of health and wellness topics, from comprehensive information on medical conditions to advice on fitness, nutrition, mental health, pregnancy and more; • the Spruce family of brands, a leading online lifestyle property covering home decor, home repair, recipes, cooking techniques, pets and crafts where users can find practical, real-life tips and inspiration to help them create their best home; • the Balance family of brands, a leading online property covering personal finance, career and small business topics that makes personal finance easy to understand and where users can find clear, practical and straightforward personal financial advice; • Investopedia, an online resource for investment and personal finance education and information; • Lifewire, a leading online technology information property that provides expert-created, real-world technology content with informative visuals and straightforward instruction that helps users fix tech gadgets, learn how to perform specific tech tasks and find the best tech products; • TripSavvy, a travel website written by real experts (not anonymous reviewers) where users can find useful travel advice and inspiration from destinations around the world; • ThoughtCo, a leading online information and reference site with a focus on expert-created education content where users can find answers to questions and information regarding a broad range of disciplines, including science, technology and math, the humanities and the arts, music and recreation; and • two recently acquired websites, Byrdie, a leading beauty website covering beauty tips, style, product reviews and makeup trends, and MyDomaine, a lifestyle website where users can find fresh recipes, smart career tips and insider travel guides that awaken a life well lived. |
The terms of the indebtedness of IAC, Match Group and ANGI Homeservices could: • limit our respective abilities to obtain additional financing to fund working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes; • limit our respective abilities to use operating cash flow in other areas of our respective businesses because we must dedicate a substantial portion of these funds to service indebtedness; • limit our respective abilities to compete with other companies who are not as highly leveraged; • restrict any one or more of us from making strategic acquisitions, developing properties or exploiting business opportunities; • restrict the way in which one or more of us conducts business; • expose one or more of us to potential events of default, which if not cured or waived, could have a material adverse effect on our business, financial condition and operating results; • increase our respective vulnerabilities to a downturn in general economic conditions or in pricing of our various products and services; and • limit our respective abilities to react to changing market conditions in the various industries in which we do business. |
Net cash used in financing activities includes principal payments made on MTCH and IAC debt of $445.2 million and $393.5 million, respectively, the payment of $272.5 million for the purchase of certain fully vested stock-based awards, the payment of $254.2 million, $93.8 million and $10.1 million for withholding taxes paid on behalf of MTCH, IAC and ANGI employees, respectively, for stock-based awards that were net settled, $74.4 million for the Exchangeable Notes hedge, $56.4 million for the repurchase of 0.8 million shares, on a settlement date basis, of IAC common stock at an average price of $69.24 per share, $33.7 million of debt issuance costs primarily related to the Exchangeable Notes and the 5.00% MTCH Senior Notes, $27.3 million in acquisition-related contingent consideration payments (included in operating activities is $11.1 million for an acquisition-related contingent consideration payment made in excess of the amount initially recognized at the time of acquisition) and $15.4 million for the purchase of noncontrolling interests, partially offset by $525.0 million in proceeds from the issuance of MTCH debt, $517.5 million in proceeds from the issuance of the Exchangeable Notes, $275.0 million in proceeds from the ANGI Term Loan, $82.4 million, $59.4 million and $1.7 million in proceeds from the exercise of IAC, MTCH and ANGI stock options, respectively, and $23.7 million in proceeds from the issuance of warrants. |
IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Exchangeable Notes are exchangeable at any time prior to the close of business on the business day immediately preceding July 1, 2022 only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days during the period of 30 consecutive trading days during the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price on each applicable trading day, which occurred in the third quarter of 2018; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the exchange rate on each such trading day; (3) if the issuer calls the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events as further described under the indenture governing the Exchangeable Notes. |
Supplemental Disclosure of Cash Flow Information: NOTE 15-RELATED PARTY TRANSACTIONS IAC and MTCH: IAC and MTCH, in connection with MTCH's IPO, entered into the following agreements: • A Master Transaction Agreement, under which MTCH agrees to assume all of the assets and liabilities related to its business and agrees to indemnify IAC against any losses arising out of any breach by MTCH of the Master Transaction Agreement or other IPO related agreements; IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) • An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of MTCH common stock and (ii) anti-dilution rights with respect to MTCH common stock; • An Employee Matters Agreement, which governs the respective rights, responsibilities and obligations of IAC and MTCH after the IPO with respect to a range of compensation and benefit issues; • A Tax Sharing Agreement, which governs the respective rights, responsibilities and obligations of IAC and MTCH with respect to tax liabilities and benefits, entitlement to refunds, preparation of tax returns, tax contests and other tax matters regarding U.S. federal, state, local and foreign income taxes; and • A Services Agreement, under which IAC has agreed to provide a range of services to MTCH, including, among others, (i) assistance with certain legal, finance, internal audit, treasury, information technology support, insurance and tax affairs, including assistance with certain public company reporting obligations; (ii) payroll processing services; (iii) tax compliance services; and (iv) such other services as to which IAC and MTCH may agree, and MTCH agrees to provide IAC informational technology services and such other services as to which IAC and MTCH may agree. |
Under the Contribution Agreement, ANGI agrees to indemnify IAC against any losses arising out of any breach by ANGI of the Contribution Agreement; • An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of ANGI common stock owned by IAC; (ii) anti-dilution rights with respect to ANGI common stock; and (iii) specified board matters with respect to designation of ANGI directors; • A Services Agreement, under which IAC has agreed to provide a range of services to ANGI, including, among others, (i) assistance with certain legal, M&A, human resources, finance, risk management, internal audit and treasury functions, health and wellness, information security services and insurance and tax affairs, including assistance with certain public company and unclaimed property reporting obligations; (ii) accounting, controllership and payroll IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) processing services; (iii) investor relations services; (iv) tax compliance services; and (iv) such other services as to which IAC and ANGI may agree. |
IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2017: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2016: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2018: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2017: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2016: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 20-QUARTERLY RESULTS (UNAUDITED) _______________________________________________________________________________ (a) The first quarter of 2018 includes after-tax stock-based compensation expense of $14.6 million related to the modification of previously issued HomeAdvisor equity awards and previously issued Angie's List equity awards, both of which were converted into ANGI Homeservices' equity awards in the Combination, and the acceleration of certain converted equity awards resulting from the termination of Angie's List employees in connection with the Combination, as well as after-tax costs of $4.1 million related to the Combination (including $2.8 million of deferred revenue write-offs). |
March 1, 2019 IAC/INTERACTIVECORP By: /s/ GLENN H. SCHIFFMAN Glenn H. Schiffman Executive Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 1, 2019: Signature Title /s/ BARRY DILLER Chairman of the Board, Senior Executive and Director Barry Diller /s/ JOSEPH LEVIN Chief Executive Officer and Director Joseph Levin /s/ VICTOR A. KAUFMAN Vice Chairman and Director Victor A. Kaufman /s/ GLENN H. SCHIFFMAN Executive Vice President and Chief Financial Officer Glenn H. Schiffman /s/ MICHAEL H. SCHWERDTMAN Senior Vice President and Controller (Chief Accounting Officer) Michael H. Schwerdtman /s/ EDGAR BRONFMAN, JR. Director Edgar Bronfman, Jr. /s/ CHELSEA CLINTON Director Chelsea Clinton /s/ MICHAEL D. EISNER Director Michael D. Eisner /s/ BONNIE S. HAMMER Director Bonnie S. Hammer /s/ BRYAN LOURD Director Bryan Lourd /s/ DAVID S. ROSENBLATT Director David S. Rosenblatt /s/ ALAN G. SPOON Director Alan G. Spoon /s/ ALEXANDER VON FURSTENBERG Director Alexander von Furstenberg /s/ RICHARD F. ZANNINO Director Richard F. Zannino Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS _________________________________________________________ (a) Additions to the allowance for doubtful accounts are charged to expense. |
We believe that our ability to compete successfully will depend primarily upon the following factors: • the size, quality, diversity and stability of our network of Marketplace service professionals and the breadth of our online directory listings; • the functionality of our websites and mobile applications and the attractiveness of their features and our products and services generally to consumers and service professionals, as well as our continued ability to introduce new products and services that resonate with consumers and service professionals generally; • our ability to continue to build and maintain awareness of, and trust in and loyalty to, our various brands, particularly our Angie’s List and HomeAdvisor brands; • our ability to consistently generate service requests through the Marketplace and leads through our online directories that convert into revenue for our service professionals in a cost-effective manner; and • the quality and consistency of our service professional pre-screening processes and ongoing quality control efforts, as well as the reliability, depth and timeliness of customer ratings and reviews. |
The terms of the indebtedness of IAC, Match Group and ANGI Homeservices could: • limit our respective abilities to obtain additional financing to fund working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes; • limit our respective abilities to use operating cash flow in other areas of our respective businesses because we must dedicate a substantial portion of these funds to service indebtedness; • limit our respective abilities to compete with other companies who are not as highly leveraged; • restrict any one or more of us from making strategic acquisitions, developing properties or exploiting business opportunities; • restrict the way in which one or more of us conducts business because of financial and operating covenants in the agreements governing our indebtedness; • expose one or more of us to potential events of default under financial and operating covenants contained in our respective debt instruments, which if not cured or waived, could have a material adverse effect on our business, financial condition and operating results; • increase our respective vulnerabilities to a downturn in general economic conditions or in pricing of our various products and services; and • limit our respective abilities to react to changing market conditions in the various industries in which we do business. |
Operating abroad, particularly in jurisdictions where we have limited experience, exposes us to additional risks, including among others: • operational and compliance challenges caused by distance, language and cultural differences; • difficulties in staffing and managing international operations; • differing levels of social and technological acceptance of our products and services or lack of acceptance of them generally; • foreign currency fluctuations; • restrictions on the transfer of funds among countries and back to the United States and costs associated with repatriating funds to the United States; • differing and potentially adverse tax laws; • multiple, conflicting and changing laws, rules and regulations, and difficulties understanding and ensuring compliance with those laws by both our employees and our business partners, over whom we exert no control; • competitive environments that favor local businesses; • limitations on the level of intellectual property protection; and • trade sanctions, political unrest, terrorism, war and epidemics or the threat of any of these events. |
Net cash used in financing activities includes principal payments made on Match Group and IAC debt of $445.2 million and $393.5 million, respectively, the payment of $272.5 million for the purchase of certain fully vested stock-based awards, the payment of $254.2 million, $93.8 million and $10.1 million for withholding taxes paid on behalf of Match Group, IAC and ANGI Homeservices employees, respectively, on net settled stock-based awards, $74.4 million for the Exchangeable Notes hedge, $56.4 million for the repurchase of 0.8 million shares of IAC common stock at an average price of $69.24 per share, $33.7 million of debt issuance costs primarily related to the Exchangeable Notes and the 5.00% Match Group Senior Notes, $27.3 million in acquisition-related contingent consideration payments (included in operating activities is $11.1 million for an acquisition-related contingent consideration payment made in excess of the amount initially recognized at the time of acquisition) and $15.4 million for the purchase of noncontrolling interests, partially offset by $525.0 million in proceeds from the issuance of Match Group debt, $517.5 million in proceeds from the issuance of the Exchangeable Notes, $275.0 million in proceeds from the ANGI Homeservices Term Loan, $82.4 million and $59.4 million in proceeds from the issuance of IAC and Match Group common stock, respectively, pursuant to stock-based awards, $23.7 million in proceeds from the issuance of warrants, a $20.1 million decrease in restricted cash that relates to settled IAC bond redemptions and $10.6 million of funds returned from escrow for the MyHammer tender offer. |
The Exchangeable Notes are exchangeable at any time prior to the close of business on the business day immediately preceding July 1, 2022 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2017 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days during the period of 30 consecutive trading days during the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the exchange rate on each such trading day; (3) if the issuer calls the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events as further described under the Indenture. |
Supplemental Disclosure of Cash Flow Information: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 17-RELATED PARTY TRANSACTIONS IAC and Match Group: IAC and Match Group, in connection with Match Group's IPO, entered into the following agreements: • A Master Transaction Agreement, under which Match Group agrees to assume all of the assets and liabilities related to its business and agrees to indemnify IAC against any losses arising out of any breach by Match Group of the Master Transaction Agreement or other IPO related agreements; • An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of Match Group's common stock and (ii) anti-dilution rights with respect to Match Group's common stock; • An Employee Matters Agreement, which governs the respective rights, responsibilities and obligations of IAC and Match Group after the IPO with respect to a range of compensation and benefit issues; • A Tax Sharing Agreement, which governs the respective rights, responsibilities and obligations of IAC and Match Group with respect to tax liabilities and benefits, entitlement to refunds, preparation of tax returns, tax contests and other tax matters regarding U.S. federal, state, local and foreign income taxes; and • A Services Agreement, under which IAC has agreed to provide a range of services to Match Group, including, among others, (i) assistance with certain legal, finance, internal audit, treasury, information technology support, insurance and tax affairs, including assistance with certain public company reporting obligations; (ii) payroll processing services; (iii) tax compliance services; and (iv) such other services as to which IAC and Match Group may agree, and Match Group agrees to provide IAC informational technology services and such other services as to which IAC and Match Group may agree. |
Under the Contribution Agreement, ANGI Homeservices agrees to indemnify IAC against any losses arising out of any breach by ANGI Homeservices of the Contribution Agreement; IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) • An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of ANGI Homeservices' common stock owned by IAC; (ii) anti-dilution rights with respect to ANGI Homeservices' common stock; and (iii) specified board matters with respect to designation of ANGI Homeservices directors; • A Services Agreement, under which IAC has agreed to provide a range of services to ANGI Homeservices, including, among others, (i) assistance with certain legal, M&A, human resources, finance, risk management, internal audit and treasury functions, health and wellness, information security services and insurance and tax affairs, including assistance with certain public company and unclaimed property reporting obligations; (ii) accounting, controllership and payroll processing services; (iii) investor relations services; (iv) tax compliance services; and (iv) such other services as to which IAC and ANGI Homeservices may agree. |
IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Balance sheet at December 31, 2017: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Balance sheet at December 31, 2016: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2017: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2016: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2015: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2017: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2016: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2015: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 22-QUARTERLY RESULTS (UNAUDITED) _______________________________________________________________________________ (a) The third quarter of 2017 includes after-tax stock-based compensation expense of $60.9 million related primarily to the modification of previously issued HomeAdvisor vested awards, which were converted into ANGI Homeservices equity awards, and the acceleration of certain Angie’s List equity awards in connection with the Combination, as well as after-tax costs of $17.4 million related to the Combination. |
March 1, 2018 IAC/INTERACTIVECORP By: /s/ GLENN H. SCHIFFMAN Glenn H. Schiffman Executive Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 1, 2018: Signature Title /s/ BARRY DILLER Chairman of the Board, Senior Executive and Director Barry Diller /s/ JOSEPH LEVIN Chief Executive Officer and Director Joseph Levin /s/ VICTOR A. KAUFMAN Vice Chairman and Director Victor A. Kaufman /s/ GLENN H. SCHIFFMAN Executive Vice President and Chief Financial Officer Glenn H. Schiffman /s/ MICHAEL H. SCHWERDTMAN Senior Vice President and Controller (Chief Accounting Officer) Michael H. Schwerdtman /s/ EDGAR BRONFMAN, JR. Director Edgar Bronfman, Jr. /s/ CHELSEA CLINTON Director Chelsea Clinton /s/ MICHAEL D. EISNER Director Michael D. Eisner /s/ BONNIE S. HAMMER Director Bonnie S. Hammer /s/ BRYAN LOURD Director Bryan Lourd /s/ DAVID S. ROSENBLATT Director David S. Rosenblatt /s/ ALAN G. SPOON Director Alan G. Spoon /s/ ALEXANDER VON FURSTENBERG Director Alexander von Furstenberg /s/ RICHARD F. ZANNINO Director Richard F. Zannino Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS _________________________________________________________ (a) Additions to the allowance for doubtful accounts are charged to expense. |
Our indebtedness and Match Group's indebtedness could have important consequences, such as: • limiting our respective abilities to obtain additional financing to fund working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes; • limiting our respective abilities to use operating cash flow in other areas of our respective businesses because we must dedicate a substantial portion of these funds to service debt; • limiting our respective abilities to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions; • restricting us from making strategic acquisitions, developing properties or exploiting business opportunities; • restricting the way in which we conduct business because of financial and operating covenants in the agreements governing our respective existing and future indebtedness; • exposing us to potential events of default (if not cured or waived) under financial and operating covenants contained in our or our respective subsidiaries’ debt instruments that could have a material adverse effect on our business, financial condition and operating results; • increasing our vulnerability to a downturn in general economic conditions or in pricing of our products and services; and • limiting our respective abilities to react to changing market conditions in the various industries in which we do business. |
Supplemental Disclosure of Cash Flow Information: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 18-RELATED PARTY TRANSACTIONS IAC and Match Group: IAC and Match Group, in connection with Match Group's IPO, entered into the following agreements: • A Master Transaction Agreement, under which Match Group agrees to assume all of the assets and liabilities related to its business and agrees to indemnify IAC against any losses arising out of any breach by Match Group of the Master Transaction Agreement or other IPO related agreements; • An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of Match Group's common stock and (ii) anti-dilution rights with respect to Match Group's common stock; • An Employee Matters Agreement, which governs the respective rights, responsibilities and obligations of IAC and Match Group after the IPO with respect to a range of compensation and benefit issues; • A Tax Sharing Agreement, which governs the respective rights, responsibilities and obligations of IAC and Match Group with respect to tax liabilities and benefits, entitlement to refunds, preparation of tax returns, tax contests and other tax matters regarding U.S. federal, state, local and foreign income taxes; and • A Services Agreement, under which IAC has agreed to provide a range of services to Match Group, including, among others, (i) assistance with certain legal, finance, internal audit, treasury, information technology support, insurance and tax affairs, including assistance with certain public company reporting obligations; (ii) payroll processing services; (iii) tax compliance services; and (iv) such other services as to which IAC and Match Group may agree, and Match Group agrees to provide IAC informational technology services and such other services as to which IAC and Match Group may agree. |
NOTE 20-CONSOLIDATED FINANCIAL STATEMENT DETAILS IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Other income, net in 2016(a) includes gains of $37.5 million and $12.0 million related to the sale of ShoeBuy and PriceRunner, respectively, $34.3 million in net foreign currency exchange gains due to strengthening of the dollar relative to the British Pound and Euro, interest income of $5.1 million and a $3.6 million gain related to the sale of marketable equity securities, partially offset by a non-cash charge of $12.1 million related to the write-off of a proportionate share of original issue discount and deferred financing costs associated with the repayment of $440 million of the Match Group Term Loan, $10.0 million in other-than-temporary impairment charges related to certain cost method investments as a result of our assessment of the near-term prospects and financial condition of the investees, a loss of $3.8 million related to the sale of ASKfm and a $3.6 million loss on the 2012 and 2013 Senior Note redemptions and repurchases. |
Balance sheet at December 31, 2016: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Balance sheet at December 31, 2015: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2016: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2015: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2014: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2016: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2015: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2014: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 23-QUARTERLY RESULTS (UNAUDITED) _______________________________________________________________________________ (a) The first quarter and fourth quarter of 2016 include after-tax gains of $11.9 million and $37.5 million related to the sale of PriceRunner and ShoeBuy, respectively. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 28, 2017: Signature Title /s/ BARRY DILLER Chairman of the Board, Senior Executive and Director Barry Diller /s/ JOSEPH LEVIN Chief Executive Officer and Director Joseph Levin Vice Chairman and Director Victor A. Kaufman /s/ GLENN H. SCHIFFMAN Executive Vice President and Chief Financial Officer Glenn H. Schiffman /s/ MICHAEL H. SCHWERDTMAN Senior Vice President and Controller (Chief Accounting Officer) Michael H. Schwerdtman /s/ EDGAR BRONFMAN, JR. Director Edgar Bronfman, Jr. /s/ CHELSEA CLINTON Director Chelsea Clinton /s/ MICHAEL D. EISNER Director Michael D. Eisner /s/ BONNIE S. HAMMER Director Bonnie S. Hammer /s/ BRYAN LOURD Director Bryan Lourd /s/ DAVID S. ROSENBLATT Director David S. Rosenblatt /s/ ALAN G. SPOON Director Alan G. Spoon /s/ ALEXANDER VON FURSTENBERG Director Alexander von Furstenberg /s/ RICHARD F. ZANNINO Director Richard F. Zannino Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS _________________________________________________________ (a) Additions to the allowance for doubtful accounts are charged to expense. |
Our indebtedness and Match Group's indebtedness could have important consequences, such as: • limiting our respective abilities to obtain additional financing to fund working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes; • limiting our respective abilities to use operating cash flow in other areas of our respective businesses because we must dedicate a substantial portion of these funds to service debt; • limiting our respective abilities to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions; • restricting us from making strategic acquisitions, developing properties or exploiting business opportunities; • restricting the way in which we conduct business because of financial and operating covenants in the agreements governing our respective existing and future indebtedness; • exposing us to potential events of default (if not cured or waived) under financial and operating covenants contained in our or our respective subsidiaries’ debt instruments that could have a material adverse effect on our business, financial condition and operating results; • increasing our vulnerability to a downturn in general economic conditions or in pricing of our products and services; and • limiting our respective abilities to react to changing market conditions in the various industries in which we do business. |
Other events affecting year-over-year comparability include: (i) foreign exchange effects, which negatively impacted Dating revenue 6% (reflected in the Match Group segment); (ii) the acquisitions of Eureka, on April 24, 2015, and PlentyOfFish, on October 28, 2015 (both reflected in the Match Group segment); (iii) $16.8 million of costs in 2015 related to the ongoing consolidation and streamlining of technology systems and European operations at the Dating businesses (reflected in the Match Group segment); (iv) acquisitions in 2014 of: • the ValueClick O&O website businesses on January 10, 2014 (reflected in the Publishing segment except for PriceRunner which is reflected in the Other segment), •SlimWare on April 1, 2014 (reflected in the Applications segment), •The Princeton Review on August 1, 2014 (reflected in the Match Group segment), •FriendScout24 on August 31, 2014 (reflected in the Match Group segment), and •Apalon on November 3, 2014 (reflected in the Applications segment); (v) the sale of the Rezbook assets in July 2013, which resulted in a gain of $8.4 million (reflected in the Other segment); (vi) the move of CityGrid from the Other segment to the Publishing segment, effective July 1, 2013, following its reorganization; and (vii) $4.2 million in employee termination costs associated with the CityGrid restructuring in 2013 (reflected in the Other segment). |
Supplemental Disclosure of Cash Flow Information: NOTE 17-RELATED PARTY TRANSACTIONS IAC and Match Group, in connection with Match Group's IPO, entered into the following agreements: • A Master Transaction Agreement, under which Match Group agrees to assume all of the assets and liabilities related to its business and agrees to indemnify IAC against any losses arising out of any breach by Match Group of the Master Transaction Agreement or other IPO related agreements; • An Investor Rights Agreement that provides IAC with (i) specified registration and other rights relating to shares of Match Group's common stock and (ii) anti-dilution rights with respect to Match Group's common stock; • An Employee Matters Agreement, which governs the respective rights, responsibilities and obligations of IAC and Match Group after the IPO with respect to a range of compensation and benefit issues; • A Tax Sharing Agreement, which governs the respective rights, responsibilities and obligations of IAC and Match Group with respect to tax liabilities and benefits, entitlement to refunds, preparation of tax returns, tax contests and other tax matters regarding U.S. federal, state, local and foreign income taxes; and • A Services Agreement, under which IAC has agreed to provide a range of services to Match Group, including, among others, (i) assistance with certain legal, finance, internal audit, treasury, information technology support, insurance and tax affairs, including assistance with certain public company reporting obligations; (ii) payroll processing services; (iii) tax compliance services; and (iv) such other services as to which IAC and Match Group may agree, and Match Group agrees to provide IAC informational technology services and such other services as to which IAC and Match Group may agree. |
Balance sheet at December 31, 2015: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Balance sheet at December 31, 2014: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2015: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2014: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2013: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2015: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2014: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2013: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 21-QUARTERLY RESULTS (UNAUDITED) _______________________________________________________________________________ (a) During the fourth quarter of 2015, certain expenses were reclassified between cost of revenue and selling and marketing expense. |
February 29, 2016 IAC/INTERACTIVECORP By: /s/ GREGG WINIARSKI Gregg Winiarski Executive Vice President, General Counsel & Secretary (Acting Principal Financial Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 29, 2016: Signature Title /s/ BARRY DILLER Chairman of the Board, Senior Executive and Director Barry Diller /s/ JOSEPH LEVIN Chief Executive Officer and Director Joseph Levin /s/ VICTOR A. KAUFMAN Vice Chairman and Director Victor A. Kaufman /s/ GREGG WINIARSKI Executive Vice President, General Counsel & Secretary (Acting Principal Financial Officer) Gregg Winiarski /s/ MICHAEL H. SCHWERDTMAN Senior Vice President and Controller (Chief Accounting Officer) Michael H. Schwerdtman /s/ EDGAR BRONFMAN, JR. Director Edgar Bronfman, Jr. /s/ CHELSEA CLINTON Director Chelsea Clinton /s/ MICHAEL D. EISNER Director Michael D. Eisner /s/ BONNIE HAMMER Director Bonnie Hammer /s/ BRYAN LOURD Director Bryan Lourd /s/ DAVID S. ROSENBLATT Director David S. Rosenblatt /s/ ALAN G. SPOON Director Alan G. Spoon /s/ ALEXANDER VON FURSTENBERG Director Alexander von Furstenberg /s/ RICHARD F. ZANNINO Director Richard F. Zannino Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS _________________________________________________________ (1) Additions to the allowance for doubtful accounts are charged to expense. |
IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Balance sheet at December 31, 2014: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Balance sheet at December 31, 2013: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2014: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2013: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2012: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2014: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2013: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2012: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 21-QUARTERLY RESULTS (UNAUDITED) _______________________________________________________________________________ (a) During the fourth quarter of 2014, certain expenses were reclassified between cost of revenue, selling and marketing expense, general and administrative expense and product development expense. |
Balance sheet at December 31, 2013: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Balance sheet at December 31, 2012: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2013: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2012: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of operations for the year ended December 31, 2011: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2013: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2012: IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of cash flows for the year ended December 31, 2011: Item 9. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 1, 2013: Signature Title /s/ BARRY DILLER Chairman of the Board, Senior Executive and Director Barry Diller /s/ GREGORY R. BLATT Chief Executive Officer and Director Gregory R. Blatt /s/ VICTOR A. KAUFMAN Vice Chairman and Director Victor A. Kaufman /s/ JEFFREY W. KIP Executive Vice President and Chief Financial Officer Jeffrey W. Kip /s/ MICHAEL H. SCHWERDTMAN Senior Vice President and Controller (Chief Accounting Officer) Michael H. Schwerdtman /s/ EDGAR BRONFMAN, JR. Director Edgar Bronfman, Jr. /s/ CHELSEA CLINTON Director Chelsea Clinton /s/ SONALI DE RYCKER Director Sonali De Rycker /s/ MICHAEL D. EISNER Director Michael D. Eisner /s/ DONALD R. KEOUGH Director Donald R. Keough /s/ BRYAN LOURD Director Bryan Lourd /s/ ARTHUR C. MARTINEZ Director Arthur C. Martinez /s/ DAVID S. ROSENBLATT Director David S. Rosenblatt /s/ ALAN G. SPOON Director David S. Rosenblatt /s/ ALEXANDER VON FURSTENBERG Director Alexander von Furstenberg /s/ RICHARD F. ZANNINO Director Richard F. Zannino Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS _________________________________________________________ (1) Additions to the allowance for doubtful accounts are charged to expense. |
IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS Other current assets Property and equipment, net Other non-current assets IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS (Continued) Accrued expenses and other current liabilities Redeemable noncontrolling interests IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS (Continued) Accumulated other comprehensive (loss) income Revenue Cost of revenue Other income (expense), net IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 4-INCOME TAXES U.S. and foreign earnings (loss) from continuing operations before income taxes are as follows: The components of the (benefit) provision for income taxes attributable to continuing operations are as follows: The current income tax payable was reduced by $18.0 million, $5.2 million and $0.8 million for the years ended December 31, 2011, 2010 and 2009, respectively, for excess tax deductions attributable to stock-based compensation. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 29, 2012: Signature Title /s/ BARRY DILLER Barry Diller Chairman of the Board, Senior Executive and Director /s/ GREGORY R. BLATT Gregory R. Blatt Chief Executive Officer and Director /s/ VICTOR A. KAUFMAN Victor A. Kaufman Vice Chairman and Director /s/ THOMAS J. MCINERNEY Thomas J. McInerney Executive Vice President and Chief Financial Officer /s/ MICHAEL H. SCHWERDTMAN Michael H. Schwerdtman Senior Vice President and Controller (Chief Accounting Officer) /s/ EDGAR BRONFMAN, JR. Edgar Bronfman, Jr. Director /s/ CHELSEA CLINTON Chelsea Clinton Director /s/ SONALI DE RYCKER Sonali De Rycker Director Signature Title /s/ MICHAEL D. EISNER Michael D. Eisner Director /s/ DONALD R. KEOUGH Donald R. Keough Director /s/ BRYAN LOURD Bryan Lourd Director /s/ ARTHUR C. MARTINEZ Arthur C. Martinez Director /s/ DAVID S. ROSENBLATT David S. Rosenblatt Director /s/ ALAN G. SPOON Alan G. Spoon Director /s/ ALEXANDER VON FURSTENBERG Alexander von Furstenberg Director /s/ RICHARD F. ZANNINO Richard F. Zannino Director Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (1)Additions to the allowance for doubtful accounts is charged to expense. |
NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS Other current assets IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS (Continued) Property and equipment, net Other non-current assets Accrued expenses and other current liabilities IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS (Continued) Redeemable noncontrolling interests Accumulated other comprehensive income Revenue IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS (Continued) Cost of revenue Other (expense) income, net NOTE 4-INCOME TAXES U.S. and foreign earnings (loss) from continuing operations before income taxes are as follows (in thousands): IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 4-INCOME TAXES (Continued) The components of the provision (benefit) for income taxes attributable to continuing operations are as follows (in thousands): In 2008, the Company recorded a tax benefit of $30.7 million from continuing operations. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 1, 2011: Signature Title /s/ BARRY DILLER Barry Diller Chairman of the Board, Senior Executive and Director /s/ GREGORY R. BLATT Gregory R. Blatt Chief Executive Officer and Director /s/ VICTOR A. KAUFMAN Victor A. Kaufman Vice Chairman and Director /s/ THOMAS J. MCINERNEY Thomas J. McInerney Executive Vice President and Chief Financial Officer /s/ MICHAEL H. SCHWERDTMAN Michael H. Schwerdtman Senior Vice President and Controller (Chief Accounting Officer) /s/ EDGAR BRONFMAN, JR. Edgar Bronfman, Jr. Director /s/ DONALD R. KEOUGH Donald R. Keough Director Signature Title /s/ BRYAN LOURD Bryan Lourd Director /s/ ARTHUR C. MARTINEZ Arthur C. Martinez Director /s/ DAVID S. ROSENBLATT David S. Rosenblatt Director /s/ ALAN G. SPOON Alan G. Spoon Director /s/ ALEXANDER VON FURSTENBERG Alexander von Furstenberg Director /s/ RICHARD F. ZANNINO Richard F. Zannino Director /s/ MICHAEL P. ZEISSER Michael P. Zeisser Director Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (1)Additions to the allowance for doubtful accounts are charged to expense. |
NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS Other current assets The balance of other current assets is as follows (in thousands): IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS (Continued) Property and equipment, net The balance of property and equipment, net is as follows (in thousands): Other non-current assets The balance of other non-current assets is as follows (in thousands): Accrued expenses and other current liabilities The balance of accrued expenses and other current liabilities is as follows (in thousands): IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS (Continued) Redeemable noncontrolling interests The following table presents the changes in redeemable noncontrolling interests (in thousands): Accumulated other comprehensive income Accumulated other comprehensive income, net of tax, is comprised of (in thousands): Revenue Revenue is comprised of (in thousands): IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS (Continued) Cost of revenue Cost of revenue is comprised of (in thousands): Other income (expense) Other income (expense) is comprised of (in thousands): NOTE 4-INCOME TAXES U.S. and foreign (loss) earnings from continuing operations before income taxes are as follows (in thousands): IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 4-INCOME TAXES (Continued) The components of the provision (benefit) for income taxes attributable to continuing operations are as follows (in thousands): In 2008, the Company recorded a tax benefit of $37.7 million from continuing operations. |
Upon a termination of employment by IAC without "cause" (and other than by reason of death or disability), the executive's resignation for "good reason" or the timely delivery of a non-renewal notice by IAC (a "Qualifying Termination"), subject to the execution and non-revocation of a release (and, in the case of Mr. Winiarski, compliance with the restrictive covenants set forth below), (i) all IAC equity awards (including any cliff vesting awards, which shall be pro-rated as though such awards had an annual vesting schedule) held by the executive that would have otherwise vested during the one-year period following such Qualifying Termination shall vest as of the date of such Qualifying Termination and (ii) all vested and outstanding IAC stock options held by the executive as of the date of such Qualifying Termination (including any stock options that vested pursuant to the acceleration rights described above), shall remain outstanding and exercisable for eighteen (18) months from the date of such Qualifying Termination. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 26, 2010: Signature Title /s/ BARRY DILLER Barry Diller Chairman of the Board, Chief Executive Officer and Director /s/ VICTOR A. KAUFMAN Victor A. Kaufman Vice Chairman and Director /s/ THOMAS J. MCINERNEY Thomas J. McInerney Executive Vice President and Chief Financial Officer /s/ MICHAEL H. SCHWERDTMAN Michael H. Schwerdtman Senior Vice President and Controller (Chief Accounting Officer) /s/ EDGAR BRONFMAN, JR. Edgar Bronfman, Jr. Director /s/ DONALD R. KEOUGH Donald R. Keough Director /s/ BRYAN LOURD Bryan Lourd Director Signature Title /s/ JOHN C. MALONE John C. Malone Director /s/ ARTHUR C. MARTINEZ Arthur C. Martinez Director /s/ DAVID S. ROSENBLATT David S. Rosenblatt Director /s/ ALAN G. SPOON Alan G. Spoon Director /s/ ALEXANDER VON FURSTENBERG Alexander von Furstenberg Director /s/ RICHARD F. ZANNINO Richard F. Zannino Director /s/ MICHAEL P. ZEISSER Michael P. Zeisser Director Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (1)Additions to the allowance for doubtful accounts are charged to expense. |
NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS Prepaid expenses and other current assets The balance of prepaid expenses and other current assets is as follows (in thousands): Property and equipment, net The balance of property and equipment, net is as follows (in thousands): IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3-CONSOLIDATED FINANCIAL STATEMENT DETAILS (Continued) Other non-current assets The balance of other non-current assets is as follows (in thousands): Accrued expenses and other current liabilities The balance of accrued expenses and other current liabilities is as follows (in thousands): Accumulated other comprehensive income Accumulated other comprehensive income, net of tax, is comprised of (in thousands): NOTE 4-INCOME TAXES U.S. and foreign earnings (loss) from continuing operations before income taxes and minority interest are as follows (in thousands): IAC/INTERACTIVECORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 4-INCOME TAXES (Continued) The components of the (benefit) provision for income taxes attributable to continuing operations are as follows (in thousands): In 2008, the Company recorded a tax benefit of $37.7 million from continuing operations. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 27, 2009: Signature Title /s/ BARRY DILLER Barry Diller Chairman of the Board, Chief Executive Officer and Director /s/ VICTOR A. KAUFMAN Victor A. Kaufman Vice Chairman and Director /s/ THOMAS J. MCINERNEY Thomas J. McInerney Executive Vice President and Chief Financial Officer /s/ MICHAEL H. SCHWERDTMAN Michael H. Schwerdtman Senior Vice President and Controller (Chief Accounting Officer) /s/ EDGAR BRONFMAN, JR. Edgar Bronfman, Jr. Director /s/ DONALD R. KEOUGH Donald R. Keough Director /s/ BRYAN LOURD Bryan Lourd Director /s/ JOHN C. MALONE John C. Malone Director /s/ ARTHUR C. MARTINEZ Arthur C. Martinez Director Signature Title /s/ DAVID S. ROSENBLATT David S. Rosenblatt Director /s/ ALAN G. SPOON Alan G. Spoon Director /s/ ALEXANDER VON FURSTENBERG Alexander von Furstenberg Director /s/ MICHAEL P. ZEISSER Michael P. Zeisser Director Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (1)Additions to the allowance for doubtful accounts are charged to expense. |
On November 5, 2007, the Company announced that its Board of Directors approved a plan to separate IAC into five publicly traded companies: •IAC, which is expected to include: •the businesses currently comprising the Media & Advertising sector; •the Match, ServiceMagic and Entertainment segments; •Shoebuy and ReserveAmerica, which are currently included in the Retailing and Ticketmaster segments, respectively; •the businesses currently comprising the Emerging Businesses group; and •certain investments in unconsolidated affiliates; •HSN, which is expected to include HSN TV, HSN.com, and the Cornerstone Brands, Inc. portfolio of catalogs, websites and retail locations; •Ticketmaster, which is expected to include its primary domestic and international operations, as well as certain investments in unconsolidated affiliates; •Interval International, which is expected to include the businesses currently comprising the Interval segment; and •LendingTree, which is expected to include the businesses currently comprising the LendingTree and Real Estate segments. |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 29, 2008: Signature Title /s/ BARRY DILLER Barry Diller Chairman of the Board, Chief Executive Officer and Director /s/ VICTOR A. KAUFMAN Victor A. Kaufman Vice Chairman and Director /s/ THOMAS J. MCINERNEY Thomas J. McInerney Executive Vice President and Chief Financial Officer /s/ MICHAEL H. SCHWERDTMAN Michael H. Schwerdtman Senior Vice President and Controller (Chief Accounting Officer) William H. Berkman Director /s/ EDGAR BRONFMAN, JR. Edgar Bronfman, Jr. Director /s/ DONALD R. KEOUGH Donald R. Keough Director Bryan Lourd Director John C. Malone Director /s/ ARTHUR C. MARTINEZ Arthur C. Martinez Director /s/ STEVEN RATTNER Steven Rattner Director /s/ GEN. H. NORMAN SCHWARZKOPF Gen. H. Norman Schwarzkopf Director /s/ ALAN G. SPOON Alan G. Spoon Director /s/ DIANE VON FURSTENBERG Diane Von Furstenberg Director Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (1)Amount is primarily related to IAC, IAC Search & Media and LendingTree state net operating losses which impacted the income tax provision. |
March 1, 2007 IAC/INTERACTIVECORP By: /s/ BARRY DILLER Barry Diller Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 1, 2007: Signature Title /s/ BARRY DILLER Barry Diller Chairman of the Board, Chief Executive Officer and Director /s/ VICTOR A. KAUFMAN Victor A. Kaufman Vice Chairman and Director /s/ THOMAS J. MCINERNEY Thomas J. McInerney Executive Vice President and Chief Financial Officer /s/ MICHAEL H. SCHWERDTMAN Michael H. Schwerdtman Senior Vice President and Controller (Chief Accounting Officer) /s/ WILLIAM H. BERKMAN William H. Berkman Director /s/ EDGAR BRONFMAN, JR. Edgar Bronfman, Jr. Director /s/ DONALD R. KEOUGH Donald R. Keough Director /s/ BRYAN LOURD Bryan Lourd Director /s/ JOHN C. MALONE John C. Malone Director /s/ ARTHUR C. MARTINEZ Arthur C. Martinez Director /s/ STEVEN RATTNER Steven Rattner Director /s/ GEN. H. NORMAN SCHWARZKOPF Gen. H. Norman Schwarzkopf Director /s/ ALAN G. SPOON Alan G. Spoon Director /s/ DIANE VON FURSTENBERG Diane Von Furstenberg Director Schedule II IAC/INTERACTIVECORP AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (1)Amount is primarily related to IAC and LendingTree state net operating losses which impacted the income tax provision. |
At December 31, 2004, intangibles with definite lives relate principally to the following: At December 31, 2003, intangible assets with definite lives related principally to the following: Amortization of intangibles is computed on a straight-line basis and based on December 31, 2004 balances for the next five years and thereafter is estimated to be as follows (in thousands): The following table presents the balance of goodwill by segment, including the changes in carrying amount of goodwill for the year ended December 31, 2004 (in thousands): Deductions principally relate to (1) the income tax benefit realized pursuant to the exercise of stock options assumed in business acquisitions that were vested at the transaction date and are treated as a reduction in purchase price when the deductions are realized, (2) adjustments to the carrying value of goodwill based upon the finalization of the valuation of intangible assets and their related deferred tax impacts and (3) the elimination of valuation allowances recorded against purchased net operating losses. |
In connection with the VUE Transaction, IAC and its subsidiaries received the following at the closing: (i) approximately $1.62 billion in cash, debt-financed by VUE, subject to tax-deferred treatment for a 15-year period; (ii) a $750 million face value Class A preferred interest in VUE, with a 5% annual paid-in-kind dividend and a 20-year term, to be settled in cash at its then face value at maturity; (iii) a $1.75 billion face value Class B preferred interest in VUE, with a 1.4% annual paid-in-kind dividend, a 3.6% annual cash dividend, callable and puttable after 20 years, to be settled by Vivendi at its then accreted face value with a maximum of approximately 56.6 million IAC common shares, provided that Vivendi may substitute cash in lieu of shares of IAC common stock (but not IAC Class B common stock), at its election; (iv) a 5.44% common interest in VUE, generally callable by Universal after five years and puttable by IAC after eight years, which may be settled in either Vivendi stock or cash, at Universal's election; and (v) a cancellation of Universal's USANi LLC interests that were exchangeable into IAC common shares, including USANi LLC interests obtained from Liberty in connection with a related transaction. |
Factors and risks that could adversely affect the business, financial condition and results of operations of IAC and its various businesses in the future, which could cause actual results to differ from those contained in the forward-looking statements included in this Annual Report on Form 10-K and other filings with, and submissions to, the SEC and oral statements made from time to time by IAC's directors, executive officers and employees to the investor and analyst communities, media representatives and others, are as follows: •material adverse changes in economic conditions generally or in any of the markets or industries in which IAC's various businesses operate; •acts of terrorism, war or political instability; •IAC's dependence upon the continued contributions of its senior corporate management, particularly Mr. Diller, IAC's Chairman and Chief Executive Officer, as well as those of senior management at its various businesses; •the ability of IAC to maintain and develop its existing brands and distribution channels, as well as to make the requisite expenditures in connection with these initiatives in a cost-effective manner; •adverse changes to, or interruptions in, IAC's relationships with its partners, suppliers and other parties with whom it has significant relationships; •the promotion and sale of products and services by IAC's partners, suppliers and other parties through their own websites and other direct distribution channels, which may offer advantages, such as lower transaction fees, frequent flyer miles, bonus structures and other consumer loyalty initiatives; •the continued growth of the Internet, the e-commerce industry and broadband access, as well as the related rate of online migration in the various markets and industries in which IAC's businesses operate; •the continued ability of IAC to maintain, upgrade and adapt its technology and infrastructure in response to changes in consumer preferences, increased demand for its products and services and changes in industry standards and practices, as well as its ability to ensure the security and privacy of personal information transmitted through its websites and other distribution channels; •the ability of IAC to expand the reach of its various businesses into international markets, particularly in Europe, as well as to successfully integrate, operate and manage its existing and future international operations, which are subject to a number of risks, including, but not limited to, the following: •competition from local businesses, which may have a better understanding of, and ability to focus on, local consumers and their preferences, as well as more established local brand recognition and better access to local financial and strategic resources; •difficulty in developing, managing and staffing international operations as a result of distance, language and cultural differences; and •fluctuations in foreign exchange rates, which could cause results of international operations, when translated, to materially differ from expectations. |
In connection with the VUE Transaction, IAC and its subsidiaries received the following at the closing: (i) approximately $1.62 billion in cash, debt-financed by VUE, subject to tax-deferred treatment for a 15-year period, (ii) a $750 million face value Class A preferred interest in VUE, with a 5% annual paid-in-kind dividend and a 20-year term, to be settled in cash at its then face value at maturity; (iii) a $1.75 billion face value Class B preferred interest in VUE, with a 1.4% annual paid-in-kind dividend, a 3.6% annual cash dividend, callable and puttable after 20 years, to be settled by Vivendi at its then accreted face value with a maximum of approximately 56.6 million IAC common shares, provided that Vivendi may substitute cash in lieu of shares of IAC common stock (but not IAC Class B common stock), at its election; (iv) a 5.44% common interest in VUE, generally callable by Universal after five years and puttable by IAC after eight years, which may be settled in either Vivendi stock or cash, at Universal's election, and (v) a cancellation of Universal's USANi LLC interests that were exchangeable into IAC common shares, including USANi LLC interests obtained from Liberty in connection with a related transaction. |
As part of the transaction, USA and its subsidiaries received the following: (i) approximately $1.62 billion in cash, debt-financed by the joint venture, subject to tax-deferred treatment for a 15-year period; (ii) a $750 million face value Class A preferred interest in the joint venture, with a 5% annual paid-in-kind dividend and a 20-year term, to be settled in cash at its then face value at maturity; (iii) a $1.75 billion face value Class B preferred interest in the joint venture, with a 1.4% annual paid-in-kind dividend, a 3.6% annual cash dividend, callable and puttable after 20 years, to be settled by Vivendi at its then face value with a maximum of approximately 43.2 million shares of USA common stock and 13.4 million shares of USA Class B common stock (for a total of 56.6 million USA common shares), provided that Vivendi may substitute cash in lieu of shares of USA common stock (but not USA Class B common stock), at its election; (iv) the 5.44% common interest referenced above, generally callable by Universal after five years and puttable by USA after eight years, which may be settled in either Vivendi stock or cash, at Universal's election; and (v) cancellation of all of Vivendi's USANi LLC interests that had been exchangeable into USA common shares, including USANi LLC interests obtained from Liberty in a related transaction (see immediately below). |
In connection with the VUE Transaction, USA and its subsidiaries received the following at closing in May 2002: (i) approximately $1.62 billion in cash, debt-financed by VUE, subject to tax-deferred treatment for a 15-year period, (ii) a $750 million face value Class A preferred interest in VUE, with a 5% annual paid-in-kind dividend and a 20-year term, to be settled in cash at its then face value at maturity; (iii) a $1.75 billion face value Class B preferred interest in VUE, with a 1.4% annual paid-in-kind dividend, a 3.6% annual cash dividend, callable and puttable after 20 years, to be settled by Vivendi at its then face value with a maximum of approximately 56.6 million USA common shares, provided that Vivendi may substitute cash in lieu of shares of USA common stock (but not USA Class B common stock), at its election; (iv) a 5.44% common interest in VUE, generally callable by Universal after five years and puttable by USA after eight years, which may be settled in either Vivendi stock or cash, at Universal's election, and (v) a cancellation of Universal's USANi LLC interests that had been exchangeable into USA common shares including USANi LLC interests obtained from Liberty in connection with the transaction. |
Performance Based Measurements Definitions of Measurements that USA will Use •Adjusted EBITA (Earnings before Interest, Taxes, Amortization of Intangibles, Non-cash compensation and non-cash marketing, other income and expense, and non-recurring items, including restructuring reserves) •Adjusted Net Income (Amounts that have been, or ultimately will be, settled in cash and the measure will be computed as net income plus (1) amortization of intangibles, non-cash distribution and marketing expense and non-cash compensation expense, (2) equity gains/losses on the VUE partnership interest, and (3) non-recurring or unusual items, including the cumulative effect of accounting changes, that have not or are not reasonably likely to recur within two years, all on an after-tax basis) •Adjusted EPS (Adjusted Net Income divided by fully diluted shares outstanding, including restricted stock issued without using the treasury method convention, as the denominator) Going forward, Adjusted EBITA, Adjusted Net Income and Adjusted EPS are the primary measures of USA executive management to review the operating performance of the business units. |
In connection with the VUE Transaction, USA and its subsidiaries received the following at the closing: (i) approximately $1.62 billion in cash, debt-financed by VUE, subject to tax-deferred treatment for a 15-year period, (ii) a $750 million face value Class A preferred interest in VUE, with a 5% annual paid-in-kind dividend and a 20-year term, to be settled in cash at its then face value at maturity; (iii) a $1.75 billion face value Class B preferred interest in VUE, with a 1.4% annual paid-in-kind dividend, a 3.6% annual cash dividend, callable and puttable after 20 years, to be settled by Vivendi at its then accreted face value with a maximum of approximately 56.6 million USA common shares, provided that Vivendi may substitute cash in lieu of shares of USA common stock (but not USA Class B common stock), at its election; (iv) a 5.44% common interest in VUE, generally callable by Universal after five years and puttable by USA after eight years, which may be settled in either Vivendi stock or cash, at Universal's election, and (v) a cancellation of Universal's USANi LLC interests that were exchangeable into USA common shares, including USANi LLC interests obtained from Liberty in connection with a related transaction. |
Severance Vice President and Controller (Chief Accounting Officer) /s/ RICHARD BARTON Richard Barton Director /s/ ROBERT R. BENNETT Robert R. Bennett Director /s/ EDGAR BRONFMAN, JR. Edgar Bronfman, Jr. Director /s/ ANNE M. BUSQUET Anne M. Busquet Director /s/ JEAN-RENÉ FOURTOU Jean-René Fourtou Director /s/ DONALD R. KEOUGH Donald R. Keough Director /s/ MARIE-JOSEÉ KRAVIS Marie-Joseé Kravis Director /s/ JOHN C. MALONE John C. Malone Director /s/ H. NORMAN SCHWARZKOPF H. Norman Schwarzkopf Director /s/ ALAN SPOON Alan Spoon Director /s/ DIANE VON FURSTENBERG Diane Von Furstenberg Director I, Barry Diller, Chairman and Chief Executive Officer of USA Interactive, certify that: 1.I have reviewed this annual report on Form 10-K of USA Interactive; 2.Based on my knowledge, this annual 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 annual report; 3.Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report; 4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a)designed such disclosure controls and procedures 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 annual report is being prepared; b)evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c)presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a)all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6.The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
Date: March 28, 2003 /s/ BARRY DILLER Barry Diller Chairman and Chief Executive Officer I, Dara Khosrowshahi, Executive Vice President and Chief Financial Officer of USA Interactive, certify that: 1.I have reviewed this annual report on Form 10-K of USA Interactive; 2.Based on my knowledge, this annual 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 annual report; 3.Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report; 4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a)designed such disclosure controls and procedures 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 annual report is being prepared; b)evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c)presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a)all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6.The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
Stockholders present or in person by proxy, representing 2,415,945 shares of Class B Common Stock and 6,118,028 shares of Common Stock, voted on the following matters: The stockholders of both the Common Stock and the Class B Common Stock voting as a single class approved the Savoy Merger: The stockholders of both the Common Stock and the Class B Common Stock voting as a single class approved the Home Shopping Merger: The stockholders of the Common Stock and the Class B Common Stock voting as separate classes approved increases in the authorized capital stock of the Company: COMMON STOCK CLASS B COMMON STOCK The stockholders of the Common Stock and the Class B Common Stock voting as separate classes approved the change in the name of the Company: COMMON STOCK CLASS B COMMON STOCK The stockholders of the Common Stock and the Class B Common Stock voting as separate classes approved the change in voting of the Company by classes: COMMON STOCK CLASS B COMMON STOCK The stockholders elected the following six directors of the Company to hold office until the next annual meeting of stockholders or until their successors have been duly elected: Elected by holders of Common Stock voting as a separate class: Elected by holders of Common Stock and Class B Common Stock voting as a single class: The stockholders of both the Common Stock and Class B Common Stock voting as a single class approved the adoption of the Company's 1995 Stock Incentive Plan and the Company's Directors' Stock Option Plan as follows: 1995 STOCK OPTION PLAN DIRECTORS' STOCK OPTION PLAN The stockholders of both the Common Stock and the Class B Common Stock voting as a single class ratified the appointment of Ernst & Young LLP as the Company's Independent Auditors: PART II ITEM 5. |
Our recent and any future acquisitions involve a number of risks, including: • our inability to integrate the acquired business, including their information technology systems; • our inability to manage acquired businesses or control integration and other costs relating to acquisitions; • our lack of experience with a particular business should we invest in a new product line; • diversion of management attention; • our failure to achieve projected synergies or cost savings; • impairment of goodwill affecting our reported net income; • our inability to retain the management or other key employees of the acquired business; • our inability to establish uniform standards, controls, procedures and policies; • our inability to retain customers of our acquired companies; • risks associated with the internal controls of acquired companies; • exposure to legal claims for activities of the acquired business prior to the acquisition; • our due diligence procedures could fail to detect material issues related to the acquired business; • unforeseen management and operational difficulties, particularly if we acquire assets or businesses in new foreign jurisdictions where we have little or no operational experience; • damage to our reputation as a result of performance or customer satisfaction problems relating to any acquired business; • the performance of any acquired business could be lower than we anticipated; and • our inability to enforce indemnifications and non-compete agreements. |
Financial Statements and Supplementary Data INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm Consolidated Statements of Comprehensive Income Consolidated Balance Sheets Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements Supplemental Unaudited Quarterly Financial Information Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Masonite International Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Masonite International Corporation (the Company) as of December 29, 2019 and December 30, 2018, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the three fiscal years in the period ended December 29, 2019, and the related notes (collectively referred to as the “consolidated financial statements”). |
Our recent and any future acquisitions involve a number of risks, including: • our inability to integrate the acquired business, including their information technology systems; • our inability to manage acquired businesses or control integration and other costs relating to acquisitions; • our lack of experience with a particular business should we invest in a new product line; • diversion of management attention; • our failure to achieve projected synergies or cost savings; • impairment of goodwill affecting our reported net income; • our inability to retain the management or other key employees of the acquired business; • our inability to establish uniform standards, controls, procedures and policies; • our inability to retain customers of our acquired companies; • risks associated with the internal controls of acquired companies; • exposure to legal claims for activities of the acquired business prior to the acquisition; • our due diligence procedures could fail to detect material issues related to the acquired business; • unforeseen management and operational difficulties, particularly if we acquire assets or businesses in new foreign jurisdictions where we have little or no operational experience; • damage to our reputation as a result of performance or customer satisfaction problems relating to an acquired businesses; • the performance of any acquired business could be lower than we anticipated; and • our inability to enforce indemnifications and non-compete agreements. |
Financial Statements and Supplementary Data INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm Report of Independent Registered Public Accounting Firm Consolidated Statements of Comprehensive Income Consolidated Balance Sheets Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements Supplemental Unaudited Quarterly Financial Information Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Masonite International Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Masonite International Corporation and subsidiaries (the Company) as of December 30, 2018 and December 31, 2017, and the related consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for each of the two fiscal years in the periods ended December 30, 2018, and the related notes (collectively referred to as the “consolidated financial statements”). |
Our molded panel product line is subdivided into four distinct product groups: our original Molded Panel series is a combination of classic styling, durable construction, and variety of design preferred by our customers when price sensitivity is a critical component in the product selection; our Palazzo® series is comprised of three distinct patented designs that accentuate the beauty and flexibility of molding wood fiber to replicate high end, historically labor intensive door designs; the four doors within our Anniversary Collection® embody themed, period, and architectural style specific designs; the West EndTM Collection, strengthens our tradition of design innovation by introducing the clean and simple aesthetics found in modern linear designs to the molded panel interior door category; and our newest introduction to the molded panel line, the Heritage® Series, which features recessed, flat panels and sharp, Shaker-style profiles which speak to a clean, modern aesthetic while retaining comfortable familiarity found in today’s interiors. |
Our recent and any future acquisitions involve a number of risks, including: • our inability to integrate the acquired business; • our inability to manage acquired businesses or control integration and other costs relating to acquisitions; • our lack of experience with a particular business should we invest in a new product line; • diversion of management attention; • our failure to achieve projected synergies or cost savings; • impairment of goodwill affecting our reported net income; • our inability to retain the management or other key employees of the acquired business; • our inability to establish uniform standards, controls, procedures and policies; • our inability to retain customers of our acquired companies; • risks associated with the internal controls of acquired companies; • exposure to legal claims for activities of the acquired business prior to the acquisition; • our due diligence procedures could fail to detect material issues related to the acquired business; • unforeseen management and operational difficulties, particularly if we acquire assets or businesses in new foreign jurisdictions where we have little or no operational experience; • damage to our reputation as a result of performance or customer satisfaction problems relating to an acquired businesses; • the performance of any acquired business could be lower than we anticipated; and • our inability to enforce indemnifications and non-compete agreements. |
Our molded panel product line is subdivided into four distinct product groups: our original Molded Panel series is a combination of classic styling, durable construction, and variety of design preferred by our customers when price sensitivity is a critical component in the product selection; our Palazzo® series is comprised of three distinct patented designs that accentuate the beauty and flexibility of molding wood fiber to replicate high end, historically labor intensive door designs; the four doors within our Anniversary Collection® embody themed, period, and architectural style specific designs; the West EndTM Collection, strengthens our tradition of design innovation by introducing the clean and simple aesthetics found in modern linear designs to the molded panel interior door category; and our newest introduction to the molded panel line, the Heritage® Series, which features recessed, flat panels and sharp, Shaker-style profiles which speak to a clean, modern aesthetic while retaining comfortable familiarity found in today’s interiors. |
Our recent and any future acquisitions involve a number of risks, including: • our inability to integrate the acquired business; • our inability to manage acquired businesses or control integration and other costs relating to acquisitions; • our lack of experience with a particular business should we invest in a new product line; • diversion of management attention; • our failure to achieve projected synergies or cost savings; • impairment of goodwill affecting our reported net income; • our inability to retain the management or other key employees of the acquired business; • our inability to establish uniform standards, controls, procedures and policies; • our inability to retain customers of our acquired companies; • risks associated with the internal controls of acquired companies; • exposure to legal claims for activities of the acquired business prior to the acquisition; • our due diligence procedures could fail to detect material issues related to the acquired business; • unforeseen management and operational difficulties, particularly if we acquire assets or businesses in new foreign jurisdictions where we have little or no operational experience; • damage to our reputation as a result of performance or customer satisfaction problems relating to an acquired businesses; • the performance of any acquired business could be lower than we anticipated; and • our inability to enforce indemnifications and non-compete agreements. |
Our recent and any future acquisitions involve a number of risks, including: • our inability to integrate the acquired business; • our inability to manage acquired businesses or control integration and other costs relating to acquisitions; • our lack of experience with a particular business should we invest in a new product line; • diversion of management attention; • our failure to achieve projected synergies or cost savings; • impairment of goodwill affecting our reported net income; • our inability to retain the management or other key employees of the acquired business; • our inability to establish uniform standards, controls, procedures and policies; • our inability to retain customers of our acquired companies; • risks associated with the internal controls of acquired companies; • exposure to legal claims for activities of the acquired business prior to the acquisition; • our due diligence procedures could fail to detect material issues related to the acquired business; • unforeseen management and operational difficulties, particularly if we acquire assets or businesses in new foreign jurisdictions where we have little or no operational experience; • damage to our reputation as a result of performance or customer satisfaction problems relating to an acquired businesses; • the performance of any acquired business could be lower than we anticipated; and • our inability to enforce indemnifications and non-compete agreements. |
4 to Licensing Agreement, dated June 4, 2021 (the “SI Fourth Amendment”), and Side Letter, dated as of June 4, 2021 (the “SI Side Letter” and, together with the Initial Licensing Agreement, SI First Amendment, the SI Second Amendment, the SI Third Amendment, and the SI Fourth Amendment, the “Sports Illustrated Licensing Agreement”) with ABG-SI LLC (“ABG”), a Delaware limited liability company and indirect wholly-owned subsidiary of Authentic Brands Group, pursuant to which we have the exclusive right and license in the United States, Canada, Mexico, United Kingdom, Republic of Ireland, Australia, and New Zealand to operate the Sports Illustrated (“Sports Illustrated”) media business (in the English and Spanish languages), including to (i) operate the digital and print editions of Sports Illustrated (including all special interest issues and the swimsuit issue) and Sports Illustrated for Kids, (ii) develop new digital media channels under the Sports Illustrated brands, and (iii) operate certain related businesses, including without limitation, special interest publications, video channels, bookazines, and the licensing and/or syndication of certain products and content under the Sports Illustrated brand (collectively, the “Sports Illustrated Licensed Brands”). |
A number of factors could negatively affect user retention, growth, and engagement, including if: ● users increasingly engage with competing platforms instead of ours; ● we fail to introduce new and exciting products and services, or such products and services do not achieve a high level of market acceptance; ● we fail to accurately anticipate consumer needs, or we fail to innovate and develop new software and products that meet these needs; ● we fail to price our products competitively; ● we do not provide a compelling user experience because of the decisions we make regarding the type and frequency of advertisements that we display; ● we are unable to combat spam, bugs, malwares, viruses, hacking, or other hostile or inappropriate usage on our products; ● there are changes in user sentiment about the quality or usefulness of our existing products in the short-term, long-term, or both; ● there are increased user concerns related to privacy and information sharing, safety, or security; ● there are adverse changes in our products or services that are mandated by legislation, regulatory authorities, or legal proceedings; ● technical or other problems frustrate the user experience, particularly if those problems prevent us from delivering our products in a fast and reliable manner; ● we, our Publisher Partners, or other companies in our industry are the subject of adverse media reports or other negative publicity, some of which may be inaccurate or include confidential information that we are unable to correct or retract; or ● we fail to maintain our brand image or our reputation is damaged. |
Our cash flows during the years ended December 31, 2020 and 2019 consisted of the following: For the year ended December 31, 2020, net cash used in operating activities was approximately $32.3 million, consisting primarily of: approximately $116.0 million of cash received from customers (including payments received in advance of performance obligations); less (i) approximately $148.3 million of cash paid (a) to employees, Publisher Partners, Expert Contributors, suppliers, and vendors, and (b) for revenue share arrangements and professional services; and (ii) approximately $0.6 million of cash paid for interest; as compared to the year ended December 31, 2019, where net cash used in operating activities was approximately $57.0 million, consisting primarily of: approximately $47.4 million of cash received from customers (including payments received in advance of performance obligations); less (y) approximately $104.4 million of cash paid (a) to employees, Publisher Partners, suppliers, and vendors, and (b) for revenue share arrangements, advance of royalty fees and professional services; and (z) approximately $2.9 million of cash paid for interest. |
For the year ended December 31, 2020, net cash provided by financing activities was approximately $37.3 million, consisting primarily of: (i) approximately $20.6 million in net proceeds from the issuance of Series H Convertible Preferred Stock (the “Series H Preferred Stock”), Series J Convertible Preferred Stock (“Series J Preferred Stock”), and Series K Convertible Preferred Stock (“Series K Preferred Stock”); (ii) approximately $7.2 million in borrowings under our line of credit; (iii) approximately $11.1 million in net proceeds from long-term debt consisting of the 15% delayed draw term note (the “Term Note”) and the Paycheck Protection Program Loan issued under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”); less (iv) approximately $1.1 million in repayments under the 12% senior secured subordinated convertible debentures (referred to herein as the “12% convertible debentures”) (for additional information, see Note 18, Convertible Debt, in our accompanying consolidated financial statements); and (v) approximately $0.5 million in payments for tax withholdings on the net settlement of share awards; as compared to the year ended December 31, 2019, where net cash provided by financing activities was approximately $82.9 million, consisting primarily of: (i) approximately $36.1 million in net proceeds from the issuance of Series I Convertible Preferred Stock (“Series I Preferred Stock”) and Series J Preferred Stock; (ii) approximately $2.0 million in gross proceeds from the sale of the 12% convertible debentures; and (iii) approximately $46.5 million in net proceeds from the issuance of long-term debt (the “12% Amended Senior Secured Notes”), less repayments of other long-term debt; offset by (x) approximately $0.3 million in payments for tax withholdings on the net settlement of share awards; (y) approximately $1.0 million in repayments under our line of credit; and (z) approximately $0.4 million in the repayment of officer promissory notes. |
In particular, our plan for the: (1) 2021 cash flow forecast, considered the use of our working capital line with FastPay (as described in Note 19, Long-term Debt, in our accompanying consolidated financial statements) to fund changes in working capital, under which we have available credit of approximately $8.5 million as of the issuance date of these consolidated financial statements for the year ended December 31, 2020, and that we do not anticipate the need for any further borrowings that are subject to the approval of the holders of the Term Note (as described in Note 19, Long-term Debt, in our accompanying consolidated financial statements), under which we may be permitted to borrow up to an additional $5 million; and (2) 2021 operating budget, considered that approximately fifty-eight percent of our revenue is from recurring subscriptions, generally paid in advance, and that digital subscription revenue, that accounts for approximately thirty percent of subscription revenue, grew approximately thirty percent in 2020 demonstrating the strength of our premium brand, and the plan to continue to grow our subscription revenue from our acquisition of TheStreet in 2019 (as described in Note 3, Acquisitions, in our accompanying consolidated financial statements) and to grow premium digital subscriptions from our Sports Illustrated Licensed Brands (as described in Note 3, Acquisitions, in our accompanying consolidated financial statements), which were launched in February 2021. |
The fair value measurement of equity awards and grants used for stock-based compensation is as follows: (1) restricted stock awards and restricted stock units which are time-vested are determined using the quoted market price of the Company’s common stock at the grant date; (2) stock option grants which are time-vested and performance-vested are determined utilizing the Black-Scholes option-pricing model at the grant date; (3) restricted stock awards which provide for performance-vesting and a true-up provision are determined through consultants with our independent valuation firm using the binomial pricing model at the grant date; (4) stock option grants which provide for market-based vesting with a time-vesting overlay are determined through consultants with our independent valuation firm using the Monte Carlo model at the grant date; (5) Publisher Partner Warrants are determined utilizing the Black-Scholes option-pricing model; and (6) ABG Warrants are determined utilizing the Monte Carlo model (as further described in Note 22, Stock-Based Compensation, in our accompanying consolidated financial statements). |
The warrants provide for the following: (1) 40% of the Forty-Two Cents Warrants and 40% of the Eighty-Four Cents Warrants will vest in equal monthly increments over a period of two years beginning on the one-year anniversary of the date of issuance of the warrants (any unvested portion of such warrants to be forfeited by ABG upon certain terminations by us of the Sports Illustrated Licensing Agreement); (2) 60% of the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants will vest based on the achievement of certain performance goals for the Sports Illustrated Licensed Brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain circumstances we may require ABG to exercise all (and not less than all) of the warrants, in which case all of the warrants will be vested; (4) all of the warrants will automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of us; and (5) ABG will have the right to participate, on a pro-rata basis (including vested and unvested warrants, exercised or unexercised), in any of our future equity issuances (subject to customary exceptions). |
In particular, the Company’s plan for the: (1) 2021 cash flow forecast, considered the use of its working capital line with FastPay (as described in Note 14) to fund changes in working capital, under which the Company has available credit of approximately $8.5 million as of the issuance date of these consolidated financial statements for the year ended December 31, 2020, and that the Company does not anticipate the need for any further borrowings that are subject to the approval of the holders of the Term Note (as described in Note 19) under which the Company may be permitted to borrow up to an additional $5.0 million; and (2) 2021 operating budget, considered that approximately fifty-eight percent of the Company’s revenue is from recurring subscriptions, generally paid in advance, and that digital subscription revenue, that accounts for approximately thirty percent of subscription revenue, grew approximately thirty percent in 2020 demonstrating the strength of its premium brand, and the plan to continue to grow its subscription revenue from its acquisition of TheStreet in 2019 (as described in Note 3) and to grow premium digital subscriptions from its Sports Illustrated Licensed Brands (as described in Note 3), in which were launched in February 2021. |
The fair value measurement of equity awards and grants used for stock-based compensation is as follows: (1) restricted stock awards and restricted stock units which are time-vested, are determined using the quoted market price of the Company’s common stock at the grant date; (2) stock option grants which are time-vested and performance-vested, are determined utilizing the Black-Scholes option-pricing model at the grant date; (3) restricted stock awards which provide for performance-vesting and a true-up provision, are determined through consultants with the Company’s independent valuation firm using the binomial pricing model at the grant date; (4) stock option grants which provide for market-based vesting with a time-vesting overlay, are determined through consultants with the Company’s independent valuation firm using the Monte Carlo model at the grant date; (5) Publisher Partner Warrants are determined utilizing the Black-Scholes option-pricing model; and (6) ABG warrants are determined utilizing the Monte Carlo model (further details are provided in Note 22). |
Licensing Agreement with ABG-SI LLC - On June 14, 2019, the Company and ABG, a Delaware limited liability company and indirect wholly owned subsidiary of Authentic Brands Group, entered into the Sports Illustrated Licensing Agreement, pursuant to which the Company has the exclusive right and license in the United States, Canada, Mexico, United Kingdom, Republic of Ireland, Australia, and New Zealand to operate the Sports Illustrated media business (in the English and Spanish languages), including to (i) operate the digital and print editions of Sports Illustrated (including all special interest issues and the swimsuit issue) and Sports Illustrated for Kids, (ii) develop new digital media channels under the Sports Illustrated brands, and (iii) operate certain related businesses, including without limitation, special interest publications, video channels, bookazines and the licensing and/or syndication of certain products and content under the Sports Illustrated brand (collectively, the “Sports Illustrated Licensed Brands”). |
Fundamental Transaction - Fundamental Transaction, in general, means: (a) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation; (b) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions; (c) any, direct or indirect, purchase offer, tender offer or exchange offer is completed pursuant to which the Company common stock holders are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the Company’s outstanding common stock; (d) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Company’s common stock or any compulsory share exchange pursuant to which the common stock is effectively converted into or exchanged for other securities, cash or property, or (e) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination whereby such transaction results in an acquisition of more than 50% of the outstanding shares of the Company’s common stock, subject to certain other conditions. |
Interest Expense The following table represents interest expense: 20.Preferred Stock The Company has the authority to issue 1,000,000 shares of preferred stock, $0.01 par value per share, consisting of authorized and/or outstanding shares as of December 31, 2020 as follows: ● 2,000 authorized shares designated as “Series F Convertible Preferred Stock,” none of which are outstanding; ● 1,800 authorized shares designated as “Series G Convertible Preferred Stock” (as further described below), of which 168.496 shares are outstanding; ● 23,000 authorized shares designated as “Series H Convertible Preferred Stock” (as further described below), of which 19,597 shares are outstanding; ● 25,800 authorized shares designated as “Series I Convertible Preferred Stock” on June 27, 2019, none of which are outstanding (as further described below); ● 35,000 authorized shares designated as “Series J Convertible Preferred Stock” on October 4, 2019, none of which are outstanding (as further described below); and ● 20,000 authorized shares designated as “Series K Convertible Preferred Stock” on October 22, 2020, none of which are outstanding (as further described below) Series G Preferred Stock On May 30, 2000, the Company sold 1,800 shares of its Series G Convertible Preferred Stock (the “Series G Preferred Stock”), of which 1,631.504 were converted prior to November 2001 and 168.496 shares continue to be outstanding, at a stated value of $1,000 per share, convertible into 188,791 shares of the Company’s common stock. |
The warrants provide for the following: (1) 40% of the Forty-Two Cents Warrants and 40% of the Eighty-Four Cents Warrants vest in equal monthly increments over a period of two years beginning on the one year anniversary of the date of issuance of the warrants (any unvested portion of such warrants to be forfeited by ABG upon certain terminations by the Company of the Sports Illustrated Licensing Agreement); (2) 60% of the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants vest based on the achievement of certain performance goals for the licensed brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain circumstances the Company may require ABG to exercise all (and not less than all) of the warrants, in which case all of the warrants will be vested; (4) all of the warrants automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of the Company; and (5) ABG has the right to participate, on a pro-rata basis (including vested and unvested warrants, exercised or unexercised), in any future equity issuance of the Company (subject to customary exceptions). |
If the Company fails for any reason to satisfy the current public information requirement at any time during the period commencing from the twelve (12) month anniversary of the date the Company becomes current in its filing obligations and ending at such time that all of the common stock may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to such purchaser’s other available remedies, the Company shall pay to a purchaser, in cash, as partial liquidated damages and not as a penalty, an amount in cash equal to one percent (1.0%) of the aggregate subscription amount of the purchaser’s shares then held by the purchaser on the day of a Public Information Failure and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured up to a maximum of five (5) 30-day periods and (b) such time that such public information is no longer required for the purchasers to transfer the shares pursuant to Rule 144. |
3 to Licensing Agreement, dated July 28, 2020 (the “Third Amendment” and, together with the Initial Licensing Agreement, First Amendment, and the Second Amendment, the “Sports Illustrated Licensing Agreement”) with ABG-SI LLC (“ABG”), a Delaware limited liability company and indirect wholly-owned subsidiary of Authentic Brands Group, pursuant to which we have the exclusive right and license in the United States, Canada, Mexico, United Kingdom, Republic of Ireland, Australia, and New Zealand to operate the Sports Illustrated (“Sports Illustrated”) media business (in the English and Spanish languages), including to (i) operate the digital and print editions of Sports Illustrated (including all special interest issues and the swimsuit issue) and Sports Illustrated for Kids, (ii) develop new digital media channels under the Sports Illustrated brands, and (iii) operate certain related businesses, including without limitation, special interest publications, video channels, bookazines, and the licensing and/or syndication of certain products and content under the Sports Illustrated brand (collectively, the “Sports Illustrated Licensed Brands”). |
A number of factors could negatively affect user retention, growth, and engagement, including if: ● users increasingly engage with competing platforms instead of ours; ● we fail to introduce new and exciting products and services, or such products and services do not achieve a high level of market acceptance; ● we fail to accurately anticipate consumer needs, or we fail to innovate and develop new software and products that meet these needs; ● we fail to price our products competitively; ● we do not provide a compelling user experience because of the decisions we make regarding the type and frequency of advertisements that we display; ● we are unable to combat spam, bugs, malwares, viruses, hacking, or other hostile or inappropriate usage on our products; ● there are changes in user sentiment about the quality or usefulness of our existing products in the short-term, long-term, or both; ● there are increased user concerns related to privacy and information sharing, safety, or security; ● there are adverse changes in our products or services that are mandated by legislation, regulatory authorities, or legal proceedings; ● technical or other problems frustrate the user experience, particularly if those problems prevent us from delivering our products in a fast and reliable manner; ● we, our Channel Partners, or other companies in our industry are the subject of adverse media reports or other negative publicity, some of which may be inaccurate or include confidential information that we are unable to correct or retract; or ● we fail to maintain our brand image or our reputation is damaged. |
For the year ended December 31, 2019, net cash provided by financing activities was approximately $82.9 million, consisting of: (i) approximately $36.1 million in net proceeds from the issuance of Series I Convertible Preferred Stock (“Series I Preferred Stock”) and Series J Convertible Preferred Stock (“Series J Preferred Stock”) (for additional information see below); (ii) $2.0 million in gross proceeds from 12% senior secured subordinated convertible debentures (referred to herein as the “12% convertible debentures”) (for additional information, see Note 17, Convertible Debt, in our accompanying consolidated financial statements); and (iii) $44.9 million in net debt financings, consisting of (x) $46.5 million in net proceeds from issuance of 12% senior secured notes, less repayments of long-term debt and debt issuance costs; offset by (y) approximately $0.4 million in repayment of officer promissory notes; (y) approximately $0.3 million in payments for taxes relating to repurchase of restricted shares; and (z) approximately $1.0 million in repayments of our line of credit. |
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