Document
false--12-31Q12020000180022702414800028075000P7YP2YP4YP5Y0.250.1500.011000100010000.01518710000019830000014900000212600000000.00250.00200.00250.00200 0001800227 2020-01-01 2020-03-31 0001800227 2020-03-31 0001800227 2019-12-31 0001800227 us-gaap:CostOfSalesMember 2019-01-01 2019-03-31 0001800227 2019-01-01 2019-03-31 0001800227 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-03-31 0001800227 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-03-31 0001800227 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-03-31 0001800227 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-03-31 0001800227 us-gaap:CostOfSalesMember 2020-01-01 2020-03-31 0001800227 us-gaap:SellingAndMarketingExpenseMember 2020-01-01 2020-03-31 0001800227 us-gaap:SellingAndMarketingExpenseMember 2019-01-01 2019-03-31 0001800227 us-gaap:ParentMember 2020-01-01 2020-03-31 0001800227 iac:InvestedCapitalMember 2020-01-01 2020-03-31 0001800227 us-gaap:ParentMember 2019-12-31 0001800227 iac:RedeemableNoncontrollingInterestsMember 2019-12-31 0001800227 iac:InvestedCapitalMember 2020-03-31 0001800227 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0001800227 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001800227 iac:RedeemableNoncontrollingInterestsMember 2020-01-01 2020-03-31 0001800227 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001800227 us-gaap:NoncontrollingInterestMember 2020-03-31 0001800227 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001800227 iac:RedeemableNoncontrollingInterestsMember 2020-03-31 0001800227 us-gaap:NoncontrollingInterestMember 2019-12-31 0001800227 us-gaap:ParentMember 2020-03-31 0001800227 iac:InvestedCapitalMember 2019-12-31 0001800227 us-gaap:ParentMember 2018-12-31 0001800227 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0001800227 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001800227 iac:InvestedCapitalMember 2019-01-01 2019-03-31 0001800227 us-gaap:ParentMember 2019-01-01 2019-03-31 0001800227 2019-03-31 0001800227 iac:RedeemableNoncontrollingInterestsMember 2019-03-31 0001800227 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001800227 us-gaap:NoncontrollingInterestMember 2019-03-31 0001800227 iac:RedeemableNoncontrollingInterestsMember 2019-01-01 2019-03-31 0001800227 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001800227 iac:InvestedCapitalMember 2019-03-31 0001800227 us-gaap:ParentMember 2019-03-31 0001800227 us-gaap:NoncontrollingInterestMember 2018-12-31 0001800227 iac:RedeemableNoncontrollingInterestsMember 2018-12-31 0001800227 2018-12-31 0001800227 iac:InvestedCapitalMember 2018-12-31 0001800227 iac:ANGIHomeservicesMember 2020-03-31 0001800227 iac:GoogleIncMember us-gaap:SalesRevenueSegmentMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-03-31 0001800227 iac:GoogleIncMember us-gaap:SalesRevenueSegmentMember us-gaap:CustomerConcentrationRiskMember iac:EmergingOtherMember 2019-01-01 2019-03-31 0001800227 iac:GoogleIncMember us-gaap:SalesRevenueSegmentMember us-gaap:CustomerConcentrationRiskMember iac:ApplicationsMember 2020-01-01 2020-03-31 0001800227 iac:ApplicationsMember iac:DesktopMember 2020-01-01 2020-03-31 0001800227 iac:RevenueChangeMember iac:HandyTechnologiesInc.Member 2020-01-01 2020-03-31 0001800227 iac:IACHoldingsInc.Member 2020-01-01 2020-03-31 0001800227 iac:GoogleIncMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2019-12-31 0001800227 iac:GoogleIncMember us-gaap:SalesRevenueSegmentMember us-gaap:CustomerConcentrationRiskMember iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 iac:GoogleIncMember us-gaap:SalesRevenueSegmentMember us-gaap:CustomerConcentrationRiskMember iac:ApplicationsMember 2019-01-01 2019-03-31 0001800227 iac:GoogleIncMember us-gaap:SalesRevenueSegmentMember us-gaap:CustomerConcentrationRiskMember 2020-01-01 2020-03-31 0001800227 iac:GoogleIncMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2020-03-31 0001800227 iac:Care.comMember 2020-02-11 0001800227 iac:Care.comMember 2020-02-11 2020-02-11 0001800227 iac:DeferredRevenueWriteOffAdjustmentMember 2020-01-01 2020-03-31 0001800227 us-gaap:AcquisitionRelatedCostsMember 2020-01-01 2020-03-31 0001800227 iac:Care.comMember 2020-01-01 2020-03-31 0001800227 iac:DeferredRevenueWriteOffAdjustmentMember 2019-01-01 2019-03-31 0001800227 iac:AmortizationAdjustmentMember 2019-01-01 2019-03-31 0001800227 iac:Care.comMember iac:ProviderRelationshipsMember 2020-02-11 2020-02-11 0001800227 iac:Care.comMember us-gaap:CustomerRelationshipsMember 2020-02-11 2020-02-11 0001800227 iac:Care.comMember us-gaap:TrademarksAndTradeNamesMember 2020-02-11 2020-02-11 0001800227 iac:Care.comMember us-gaap:DevelopedTechnologyRightsMember 2020-02-11 2020-02-11 0001800227 srt:MaximumMember iac:Care.comMember us-gaap:CustomerRelationshipsMember 2020-02-11 2020-02-11 0001800227 srt:MinimumMember iac:Care.comMember us-gaap:CustomerRelationshipsMember 2020-02-11 2020-02-11 0001800227 iac:ContractorandServiceProfessionalRelationshipsandOtherMember 2019-12-31 0001800227 us-gaap:MediaContentMember 2019-12-31 0001800227 us-gaap:TechnologyBasedIntangibleAssetsMember 2019-12-31 0001800227 us-gaap:TradeNamesMember 2019-01-01 2019-12-31 0001800227 iac:ContractorandServiceProfessionalRelationshipsandOtherMember 2019-01-01 2019-12-31 0001800227 us-gaap:CustomerListsMember 2019-12-31 0001800227 us-gaap:CustomerListsMember 2019-01-01 2019-12-31 0001800227 us-gaap:TradeNamesMember 2019-12-31 0001800227 iac:MembershipsMember 2019-01-01 2019-12-31 0001800227 us-gaap:TechnologyBasedIntangibleAssetsMember 2019-01-01 2019-12-31 0001800227 iac:MembershipsMember 2019-12-31 0001800227 us-gaap:MediaContentMember 2019-01-01 2019-12-31 0001800227 2019-01-01 2019-12-31 0001800227 iac:DotdashMember 2020-03-31 0001800227 srt:MaximumMember us-gaap:TradeNamesMember us-gaap:MeasurementInputDiscountRateMember 2020-03-31 0001800227 iac:ApplicationsMember 2020-03-31 0001800227 srt:MinimumMember us-gaap:TradeNamesMember iac:MeasurementInputRoyaltyRateMember 2020-03-31 0001800227 iac:EmergingOtherMember iac:CollegeHumorMediaMember 2020-03-31 0001800227 iac:PublishingMember 2020-03-31 0001800227 iac:ApplicationsMember iac:MosaicGroupMember 2020-03-31 0001800227 iac:AskMediaGroupMember 2020-03-31 0001800227 iac:EmergingOtherMember iac:CollegeHumorMediaMember 2019-10-01 2019-12-31 0001800227 iac:ApplicationsMember 2019-12-31 0001800227 us-gaap:MeasurementInputDiscountRateMember iac:ApplicationsMember iac:DesktopMember 2020-03-31 0001800227 iac:ApplicationsMember iac:DesktopMember 2020-03-31 0001800227 iac:VideoMember 2019-01-01 2019-12-31 0001800227 iac:ApplicationsMember 2019-01-01 2019-12-31 0001800227 iac:VideoMember 2018-12-31 0001800227 iac:ANGIHomeservicesMember 2019-01-01 2019-12-31 0001800227 iac:ApplicationsMember iac:MosaicGroupMember 2019-01-01 2019-12-31 0001800227 iac:EmergingOtherMember 2019-01-01 2019-12-31 0001800227 iac:EmergingOtherMember 2019-12-31 0001800227 iac:ApplicationsMember iac:DesktopMember 2019-12-31 0001800227 iac:ApplicationsMember iac:DesktopMember 2019-01-01 2019-12-31 0001800227 iac:VideoMember 2019-12-31 0001800227 iac:EmergingOtherMember 2018-12-31 0001800227 iac:ApplicationsMember iac:DesktopMember 2018-12-31 0001800227 iac:ANGIHomeservicesMember 2018-12-31 0001800227 iac:ApplicationsMember iac:MosaicGroupMember 2018-12-31 0001800227 iac:ANGIHomeservicesMember 2019-12-31 0001800227 iac:ApplicationsMember 2018-12-31 0001800227 iac:ApplicationsMember iac:MosaicGroupMember 2019-12-31 0001800227 us-gaap:MediaContentMember 2020-03-31 0001800227 us-gaap:TradeNamesMember 2020-01-01 2020-03-31 0001800227 us-gaap:CustomerListsMember 2020-01-01 2020-03-31 0001800227 us-gaap:TechnologyBasedIntangibleAssetsMember 2020-03-31 0001800227 us-gaap:TradeNamesMember 2020-03-31 0001800227 iac:MembershipsMember 2020-03-31 0001800227 us-gaap:TechnologyBasedIntangibleAssetsMember 2020-01-01 2020-03-31 0001800227 us-gaap:CustomerListsMember 2020-03-31 0001800227 iac:ContractorandServiceProfessionalRelationshipsandOtherMember 2020-03-31 0001800227 iac:MembershipsMember 2020-01-01 2020-03-31 0001800227 us-gaap:MediaContentMember 2020-01-01 2020-03-31 0001800227 iac:ContractorandServiceProfessionalRelationshipsandOtherMember 2020-01-01 2020-03-31 0001800227 iac:ApplicationsMember 2020-01-01 2020-03-31 0001800227 iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 iac:VideoMember 2020-01-01 2020-03-31 0001800227 iac:ANGIHomeservicesMember 2020-03-31 0001800227 iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 iac:ApplicationsMember iac:MosaicGroupMember 2020-01-01 2020-03-31 0001800227 iac:VideoMember 2020-03-31 0001800227 iac:EmergingOtherMember iac:CollegeHumorMediaMember 2020-01-01 2020-03-31 0001800227 iac:EmergingOtherMember 2020-03-31 0001800227 us-gaap:MeasurementInputDiscountRateMember iac:ApplicationsMember iac:MosaicGroupMember 2020-03-31 0001800227 iac:AskMediaGroupMember 2019-12-31 0001800227 iac:EmergingOtherMember iac:CollegeHumorMediaMember 2019-12-31 0001800227 iac:DotdashMember 2019-12-31 0001800227 iac:PublishingMember 2019-12-31 0001800227 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-03-31 0001800227 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001800227 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0001800227 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-03-31 0001800227 iac:ContingentConsiderationArrangementMember us-gaap:MeasurementInputDiscountRateMember 2020-03-31 0001800227 iac:ContingentConsiderationArrangementMember 2020-01-01 2020-03-31 0001800227 us-gaap:USTreasurySecuritiesMember 2020-03-31 0001800227 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member 2020-03-31 0001800227 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel2Member 2020-03-31 0001800227 us-gaap:USTreasurySecuritiesMember 2020-03-31 0001800227 us-gaap:ShortTermInvestmentsMember us-gaap:FairValueInputsLevel2Member 2020-03-31 0001800227 us-gaap:MoneyMarketFundsMember 2020-03-31 0001800227 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel1Member 2020-03-31 0001800227 us-gaap:WarrantMember us-gaap:FairValueInputsLevel2Member 2020-03-31 0001800227 us-gaap:WarrantMember us-gaap:FairValueInputsLevel3Member 2020-03-31 0001800227 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel3Member 2020-03-31 0001800227 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member 2020-03-31 0001800227 us-gaap:WarrantMember 2020-03-31 0001800227 us-gaap:ShortTermInvestmentsMember us-gaap:FairValueInputsLevel1Member 2020-03-31 0001800227 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel1Member 2020-03-31 0001800227 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel3Member 2020-03-31 0001800227 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member 2020-03-31 0001800227 us-gaap:BankTimeDepositsMember 2020-03-31 0001800227 us-gaap:ShortTermInvestmentsMember 2020-03-31 0001800227 us-gaap:WarrantMember us-gaap:FairValueInputsLevel1Member 2020-03-31 0001800227 us-gaap:FairValueInputsLevel2Member 2020-03-31 0001800227 us-gaap:FairValueInputsLevel3Member 2020-03-31 0001800227 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member 2020-03-31 0001800227 us-gaap:FairValueInputsLevel1Member 2020-03-31 0001800227 us-gaap:ShortTermInvestmentsMember us-gaap:FairValueInputsLevel3Member 2020-03-31 0001800227 us-gaap:WarrantMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001800227 us-gaap:FairValueInputsLevel1Member 2019-12-31 0001800227 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001800227 us-gaap:WarrantMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001800227 us-gaap:MoneyMarketFundsMember 2019-12-31 0001800227 us-gaap:FairValueInputsLevel2Member 2019-12-31 0001800227 us-gaap:FairValueInputsLevel3Member 2019-12-31 0001800227 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001800227 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001800227 us-gaap:BankTimeDepositsMember 2019-12-31 0001800227 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001800227 us-gaap:WarrantMember 2019-12-31 0001800227 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001800227 us-gaap:WarrantMember us-gaap:FairValueInputsLevel3Member 2019-12-31 0001800227 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001800227 iac:ContingentConsiderationArrangementMember 2020-03-31 0001800227 us-gaap:WarrantMember 2020-01-01 2020-03-31 0001800227 iac:ContingentConsiderationArrangementMember 2019-01-01 2019-03-31 0001800227 iac:ContingentConsiderationArrangementMember 2019-03-31 0001800227 iac:ContingentConsiderationArrangementMember 2018-12-31 0001800227 iac:ContingentConsiderationArrangementMember 2019-12-31 0001800227 iac:ContingentConsiderationArrangementMember us-gaap:MeasurementInputDiscountRateMember 2019-12-31 0001800227 iac:ANGIHomeservicesMember 2019-12-31 0001800227 iac:ANGIHomeservicesMember 2020-03-31 0001800227 iac:ANGIHomeservicesMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember 2019-12-31 0001800227 iac:ANGIHomeservicesMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember 2020-03-31 0001800227 iac:IACGroupLLCMember us-gaap:RevolvingCreditFacilityMember iac:IACGroupCreditFacilityMember 2020-03-31 0001800227 iac:ANGIHomeservicesMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember 2020-01-01 2020-03-31 0001800227 iac:ANGIHomeservicesMember us-gaap:RevolvingCreditFacilityMember iac:ANGIHomeservicesCreditFacilityMember 2020-03-31 0001800227 iac:ANGIHomeservicesMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember 2019-01-01 2019-12-31 0001800227 iac:IACGroupLLCMember us-gaap:RevolvingCreditFacilityMember iac:IACGroupCreditFacilityMember 2020-01-01 2020-03-31 0001800227 iac:ANGIHomeservicesMember us-gaap:RevolvingCreditFacilityMember iac:ANGIHomeservicesCreditFacilityMember 2018-11-05 0001800227 iac:ANGIHomeservicesMember srt:ScenarioForecastMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember 2019-04-01 2021-11-05 0001800227 iac:ANGIHomeservicesMember srt:ScenarioForecastMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember 2023-11-05 0001800227 iac:ANGIHomeservicesMember srt:ScenarioForecastMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember 2022-11-06 2023-11-05 0001800227 iac:ANGIHomeservicesMember srt:ScenarioForecastMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember 2021-11-06 2022-11-05 0001800227 iac:ANGIHomeservicesMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember us-gaap:LondonInterbankOfferedRateLIBORMember 2020-01-01 2020-03-31 0001800227 iac:ANGIHomeservicesMember us-gaap:RevolvingCreditFacilityMember iac:ANGIHomeservicesCreditFacilityMember 2019-01-01 2019-12-31 0001800227 iac:IACGroupLLCMember us-gaap:RevolvingCreditFacilityMember iac:IACGroupCreditFacilityMember 2019-01-01 2019-12-31 0001800227 iac:ANGIHomeservicesMember us-gaap:RevolvingCreditFacilityMember iac:ANGIHomeservicesCreditFacilityMember 2020-01-01 2020-03-31 0001800227 iac:ANGIHomeservicesMember us-gaap:RevolvingCreditFacilityMember iac:ANGIHomeservicesCreditFacilityMember 2019-12-31 0001800227 iac:ANGIHomeservicesMember iac:ANGITermLoandueNovember052023Member us-gaap:LoansPayableMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001800227 iac:IACGroupLLCMember us-gaap:RevolvingCreditFacilityMember iac:IACGroupCreditFacilityMember 2019-12-31 0001800227 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-12-31 0001800227 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0001800227 us-gaap:AccumulatedTranslationAdjustmentMember 2019-03-31 0001800227 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0001800227 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0001800227 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-03-31 0001800227 us-gaap:AccumulatedForeignCurrencyAdjustmentAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0001800227 us-gaap:AociAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0001800227 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0001800227 us-gaap:AccumulatedNetInvestmentGainLossAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0001800227 us-gaap:AccumulatedForeignCurrencyAdjustmentAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0001800227 us-gaap:AccumulatedTranslationAdjustmentMember 2019-12-31 0001800227 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-12-31 0001800227 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-03-31 0001800227 us-gaap:AccumulatedNetInvestmentGainLossIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0001800227 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0001800227 us-gaap:AociAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0001800227 us-gaap:AccumulatedTranslationAdjustmentMember 2020-03-31 0001800227 us-gaap:AccumulatedNetInvestmentGainLossAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0001800227 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0001800227 us-gaap:CorporateNonSegmentMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ApplicationsMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AskMediaGroupMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:EmergingOtherMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DotdashMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:VimeoMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AskMediaGroupMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ApplicationsMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 us-gaap:CorporateNonSegmentMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DotdashMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:VimeoMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember srt:EuropeMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceMember iac:EmergingOtherMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopMember iac:ApplicationsMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceServiceOtherMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MediaProductionandDistributionMember iac:EmergingOtherMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceMember iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingandServiceOtherMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ServiceSubscriptionMember iac:EmergingOtherMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceMembershipSubscriptionMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:AdvertisingMember iac:DotdashMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:ProductAndServiceOtherMember iac:AskMediaGroupMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:AdvertisingMember iac:ApplicationsMember iac:MosaicGroupMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ProductHardwareMember iac:VimeoMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:AdvertisingMember iac:DotdashMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopAdvertisingServiceOtherMember iac:ApplicationsMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:AdvertisingMember iac:ApplicationsMember iac:MosaicGroupMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MembershipSubscriptionMember srt:EuropeMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ConsumerConnectionMember srt:EuropeMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:AdvertisingMember iac:EmergingOtherMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingOtherMember iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopSubscriptionandServiceOtherMember iac:ApplicationsMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MediaProductionandDistributionMember iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingGoogleMember iac:AskMediaGroupMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ApplicationsMember iac:MosaicGroupMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopAdvertisingMember iac:ApplicationsMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ServiceAffiliateCommerceCommissionMember iac:DotdashMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:AdvertisingMember iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopAdvertisingMember iac:ApplicationsMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ServiceSubscriptionMember iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceServiceOtherMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MembershipSubscriptionMember srt:EuropeMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopAdvertisingServiceOtherMember iac:ApplicationsMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingandServiceOtherMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceMembershipSubscriptionMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:ProductAndServiceOtherMember iac:AskMediaGroupMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopAdvertisingGoogleMember iac:ApplicationsMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingandServiceOtherMember srt:EuropeMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ServiceSubscriptionandOtherMember iac:ApplicationsMember iac:MosaicGroupMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingOtherMember iac:AskMediaGroupMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingGoogleMember iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ServicePlatformMember iac:VimeoMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingOtherMember iac:AskMediaGroupMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ServicePlatformMember iac:VimeoMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingandServiceOtherMember srt:EuropeMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopSubscriptionandServiceOtherMember iac:ApplicationsMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopAdvertisingGoogleMember iac:ApplicationsMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:AdvertisingMember iac:AskMediaGroupMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:AdvertisingMember iac:AskMediaGroupMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ServiceAffiliateCommerceCommissionMember iac:DotdashMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:ProductAndServiceOtherMember iac:EmergingOtherMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceConsumerConnectionMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:DesktopMember iac:ApplicationsMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ApplicationsMember iac:MosaicGroupMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:MarketplaceConsumerConnectionMember srt:NorthAmericaMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingGoogleMember iac:AskMediaGroupMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ProductHardwareMember iac:VimeoMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ConsumerConnectionMember srt:EuropeMember iac:ANGIHomeservicesMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingGoogleMember iac:EmergingOtherMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:ServiceSubscriptionandOtherMember iac:ApplicationsMember iac:MosaicGroupMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember us-gaap:ProductAndServiceOtherMember iac:EmergingOtherMember 2020-01-01 2020-03-31 0001800227 us-gaap:OperatingSegmentsMember srt:EuropeMember iac:ANGIHomeservicesMember 2019-01-01 2019-03-31 0001800227 us-gaap:OperatingSegmentsMember iac:AdvertisingOtherMember iac:EmergingOtherMember 2019-01-01 2019-03-31 0001800227 us-gaap:IntersegmentEliminationMember 2020-01-01 2020-03-31 0001800227 us-gaap:IntersegmentEliminationMember 2019-01-01 2019-03-31 0001800227 us-gaap:NonUsMember 2019-12-31 0001800227 country:US 2020-03-31 0001800227 us-gaap:NonUsMember 2020-03-31 0001800227 country:US 2019-12-31 0001800227 us-gaap:NonUsMember 2019-01-01 2019-03-31 0001800227 us-gaap:NonUsMember 2020-01-01 2020-03-31 0001800227 country:US 2020-01-01 2020-03-31 0001800227 country:US 2019-01-01 2019-03-31 0001800227 iac:TinderOptionholderLitigationMember 2019-06-13 2019-06-13 0001800227 iac:TinderOptionholderLitigationMember 2018-08-31 2018-08-31 0001800227 iac:TinderOptionholderLitigationMember us-gaap:PendingLitigationMember 2018-08-14 2018-08-14 0001800227 iac:TinderOptionholderLitigationMember 2018-08-14 2018-08-14 0001800227 iac:SeniorNotes4.75DueDecember152022Member us-gaap:SeniorNotesMember 2019-08-23 0001800227 iac:LeasedOfficeSpaceMember us-gaap:SubsidiaryOfCommonParentMember 2020-01-01 2020-03-31 0001800227 iac:SeniorNotes4.75DueDecember152022Member us-gaap:SeniorNotesMember 2012-12-21 0001800227 srt:AffiliatedEntityMember 2020-01-01 2020-03-31 0001800227 iac:CorporateAircraftPurchaseMember us-gaap:OtherAffiliatesMember 2020-01-01 2020-03-31 0001800227 iac:SoldOfficeSpaceMember us-gaap:SubsidiaryOfCommonParentMember us-gaap:CommonClassAMember 2020-01-01 2020-03-31 0001800227 iac:CorporateAircraftPurchaseMember us-gaap:OtherAffiliatesMember 2019-01-01 2019-12-31 0001800227 iac:ANGIHomeservicesMember iac:EmployeeMattersAgreementMember us-gaap:SubsidiaryOfCommonParentMember us-gaap:CommonClassBMember 2019-01-01 2019-03-31 0001800227 iac:ANGIHomeservicesMember us-gaap:ServiceAgreementsMember us-gaap:LimitedLiabilityCompanyMember 2020-01-01 2020-03-31 0001800227 iac:CorporateAircraftPurchaseMember us-gaap:OtherAffiliatesMember 2017-04-01 2017-06-30 0001800227 iac:CorporateAircraftPurchaseMember us-gaap:OtherAffiliatesMember 2020-03-31 0001800227 us-gaap:ServiceAgreementsMember us-gaap:SubsidiaryOfCommonParentMember 2020-03-31 0001800227 srt:AffiliatedEntityMember 2019-01-01 2019-03-31 0001800227 iac:ANGIHomeservicesMember iac:EmployeeMattersAgreementMember us-gaap:SubsidiaryOfCommonParentMember us-gaap:CommonClassBMember 2020-01-01 2020-03-31 0001800227 iac:ANGIHomeservicesMember us-gaap:ServiceAgreementsMember us-gaap:LimitedLiabilityCompanyMember 2019-01-01 2019-03-31 0001800227 iac:SoldOfficeSpaceMember us-gaap:SubsidiaryOfCommonParentMember 2020-01-31 2020-01-31 0001800227 srt:AffiliatedEntityMember 2018-12-31 0001800227 srt:AffiliatedEntityMember 2020-03-31 0001800227 iac:SoldOfficeSpaceMember us-gaap:SubsidiaryOfCommonParentMember 2020-01-01 2020-03-31 0001800227 iac:LeasedOfficeSpaceMember us-gaap:SubsidiaryOfCommonParentMember 2019-01-01 2019-03-31 0001800227 srt:AffiliatedEntityMember 2018-12-14 0001800227 us-gaap:ServiceAgreementsMember us-gaap:SubsidiaryOfCommonParentMember 2019-12-31 0001800227 iac:IACHoldingsInc.Member us-gaap:RetainedEarningsMember 2020-03-31 0001800227 iac:IACHoldingsInc.Member us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001800227 iac:IACHoldingsInc.Member us-gaap:CommonStockMember 2020-03-31 0001800227 iac:IACHoldingsInc.Member us-gaap:RetainedEarningsMember 2019-12-31 0001800227 iac:IACHoldingsInc.Member us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001800227 iac:IACHoldingsInc.Member 2020-03-31 0001800227 iac:IACHoldingsInc.Member us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001800227 iac:IACHoldingsInc.Member 2019-12-31 0001800227 iac:IACHoldingsInc.Member us-gaap:CommonStockMember 2019-12-31 0001800227 iac:IACHoldingsInc.Member us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001800227 iac:IACHoldingsInc.Member us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001800227 iac:IACHoldingsInc.Member us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001800227 iac:IACHoldingsInc.Member us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001800227 iac:CommonClassMMember us-gaap:SubsequentEventMember 2020-05-06 iso4217:USD xbrli:pure iac:service_professional xbrli:shares iac:project iac:service_category iac:aircraft iac:plaintiff iso4217:USD xbrli:shares iac:lawsuit iac:office_building
As filed with the Securities and Exchange Commission on June 3, 2020

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2020
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________                            
Commission File No. 333-236420-01
 

IAC HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
84-3727412
 (State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
555 West 18th Street, New York, New York 10011
(Address of registrant's principal executive offices)
(212314-7300
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol
 
Name of exchange on which registered

 
None.
 


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No 




TABLE OF CONTENTS
 
 
Page
Number
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




PART I
FINANCIAL INFORMATION
Item 1.    Combined Financial Statements
IAC HOLDINGS, INC. AND SUBSIDIARIES
COMBINED BALANCE SHEET
(Unaudited)
 
March 31, 2020
 
December 31, 2019
 
(In thousands)
ASSETS
 
 
 
Cash and cash equivalents
$
2,029,071

 
$
839,796

Short-term investments
20,000

 

Marketable securities
49,912

 

Accounts receivable, net of allowance and reserves of $28,075 and $24,148, respectively
207,581

 
181,875

Note receivable—related party
27,172

 
55,251

Other current assets
147,714

 
152,334

Total current assets
2,481,450

 
1,229,256

 
 
 
 
Property, capitalized software and equipment, net of accumulated depreciation and amortization
271,477

 
305,414

Goodwill
1,816,723

 
1,616,867

Intangible assets, net of accumulated amortization
452,096

 
350,150

Long-term investments
296,491

 
347,975

Other non-current assets
273,009

 
247,746

TOTAL ASSETS
$
5,591,246

 
$
4,097,408

 
 
 
 
LIABILITIES AND PARENT'S EQUITY
 
 
 
LIABILITIES:
 
 
 
Current portion of long-term debt
$
13,750

 
$
13,750

Accounts payable, trade
90,983

 
72,452

Deferred revenue
215,671

 
178,647

Accrued expenses and other current liabilities
342,875

 
320,473

Total current liabilities
663,279

 
585,322

 
 
 
 
Long-term debt, net
228,643

 
231,946

Income taxes payable
6,076

 
6,410

Deferred income taxes
64,697

 
44,459

Other long-term liabilities
189,547

 
180,307

 
 
 
 
Redeemable noncontrolling interests
42,152

 
43,818

 
 
 
 
Commitments and contingencies

 

 
 
 
 
PARENT'S EQUITY:
 
 
 
Invested capital
3,935,166

 
2,547,251

Accumulated other comprehensive loss
(17,926
)
 
(12,226
)
IAC/InterActiveCorp equity in IAC Holdings, Inc. and subsidiaries
3,917,240

 
2,535,025

Noncontrolling interests
479,612

 
470,121

Total parent's equity
4,396,852

 
3,005,146

TOTAL LIABILITIES AND PARENT'S EQUITY
$
5,591,246

 
$
4,097,408


The accompanying Notes to Combined Financial Statements are an integral part of these statements.

3



IAC HOLDINGS, INC. AND SUBSIDIARIES
COMBINED STATEMENT OF OPERATIONS
(Unaudited)
 
Three Months Ended March 31,
 
2020
 
2019
 
(In thousands)
Revenue
$
684,124

 
$
641,220

Operating costs and expenses:
 
 
 
Cost of revenue (exclusive of depreciation shown separately below)
179,327

 
139,848

Selling and marketing expense
308,207

 
303,198

General and administrative expense
173,741

 
154,451

Product development expense
61,963

 
44,425

Depreciation
15,492

 
11,140

Amortization of intangibles
45,759

 
22,341

Goodwill impairment
211,973

 

Total operating costs and expenses
996,462

 
675,403

Operating loss
(312,338
)
 
(34,183
)
Interest expense
(2,217
)
 
(3,267
)
Other expense, net
(57,448
)
 
(5,417
)
Loss before income taxes
(372,003
)
 
(42,867
)
Income tax benefit
41,432

 
29,194

Net loss
(330,571
)
 
(13,673
)
Net loss (earnings) attributable to noncontrolling interests
2,372

 
(574
)
Net loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.
$
(328,199
)
 
$
(14,247
)
 
 
 
 
 
 
 
 
Stock-based compensation expense by function:
 
 
 
Cost of revenue
$
18

 
$
24

Selling and marketing expense
1,276

 
1,321

General and administrative expense
33,646

 
30,467

Product development expense
2,241

 
2,863

Total stock-based compensation expense
$
37,181

 
$
34,675

The accompanying Notes to Combined Financial Statements are an integral part of these statements.

4



IAC HOLDINGS, INC. AND SUBSIDIARIES
COMBINED STATEMENT OF COMPREHENSIVE OPERATIONS
(Unaudited)
 
Three Months Ended March 31,
 
2020
 
2019
 
(In thousands)
Net loss
$
(330,571
)
 
$
(13,673
)
Other comprehensive (loss) income, net of income taxes:
 
 
 
Change in foreign currency translation adjustment
(6,630
)
 
2,088

Change in unrealized gains and losses on available-for-sale marketable debt securities
(12
)
 
(3
)
Total other comprehensive (loss) income, net of income taxes
(6,642
)
 
2,085

Comprehensive loss, net of income taxes
(337,213
)
 
(11,588
)
Components of comprehensive loss (income) attributable to noncontrolling interests:
 
 
 
Net loss (earnings) attributable to noncontrolling interests
2,372

 
(574
)
Change in foreign currency translation adjustment attributable to noncontrolling interests
979

 
(463
)
Change in unrealized gains and losses of available-for-sale marketable debt securities attributable to noncontrolling interests

 
(1
)
Comprehensive loss (income) attributable to noncontrolling interests
3,351

 
(1,038
)
Comprehensive loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.
$
(333,862
)
 
$
(12,626
)



The accompanying Notes to Combined Financial Statements are an integral part of these statements.

5



IAC HOLDINGS, INC. AND SUBSIDIARIES
COMBINED STATEMENT OF PARENT'S EQUITY
Three Months Ended March 31, 2020 and 2019
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
IAC/InterActiveCorp Equity in
 
 
 
 
 
 
 
 
IAC Holdings, Inc. 
 
 
 
 
 
 
 
 
 
 
Accumulated
Other
Comprehensive
(Loss) Income
 
Total IAC/
InterActiveCorp
Equity in IAC
Holdings, Inc.
 
 
 
 
 
Redeemable
Noncontrolling
Interests
 
 
Invested Capital
 
 
Noncontrolling
Interests
 
Total
Parent's
Equity
 
 
 
 
(in thousands)
 
 
Balance as of December 31, 2019
$
43,818

 
 
$
2,547,251

 
$
(12,226
)
 
$
2,535,025

 
$
470,121

 
$
3,005,146

Net loss
(1,032
)
 
 
(328,199
)
 

 
(328,199
)
 
(1,340
)
 
(329,539
)
Other comprehensive income (loss), net of income taxes
99

 
 

 
(5,663
)
 
(5,663
)
 
(1,078
)
 
(6,741
)
Stock-based compensation expense
15

 
 
11,389

 

 
11,389

 
22,211

 
33,600

Purchase of redeemable noncontrolling interests
(3,165
)
 
 

 

 

 

 

Adjustment of redeemable noncontrolling interests to fair value
2,418

 
 
(2,418
)
 

 
(2,418
)
 

 
(2,418
)
Issuance of ANGI Homeservices common stock pursuant to stock-based awards, net of withholding taxes

 
 
6,996

 
(37
)
 
6,959

 
(10,302
)
 
(3,343
)
Purchase of ANGI Homeservices treasury stock

 
 
(38,971
)
 

 
(38,971
)
 

 
(38,971
)
Net increase in IAC/InterActiveCorp's investment in IAC Holdings, Inc.

 
 
1,739,118

 

 
1,739,118

 

 
1,739,118

Other
(1
)
 
 

 

 

 

 

Balance as of March 31, 2020
$
42,152

 
 
$
3,935,166

 
$
(17,926
)
 
$
3,917,240

 
$
479,612

 
$
4,396,852

 
 
 
 
 
 
 
Balance as of December 31, 2018
$
65,687

 
 
$
2,296,583

 
$
(12,541
)
 
$
2,284,042

 
$
400,358

 
$
2,684,400

Net (loss) earnings
(1,051
)
 
 
(14,247
)
 

 
(14,247
)
 
1,625

 
(12,622
)
Other comprehensive income, net of income taxes
186

 
 

 
1,621

 
1,621

 
278

 
1,899

Stock-based compensation expense
42

 
 
15,393

 

 
15,393

 
19,240

 
34,633

Purchase of redeemable noncontrolling interests
(3,182
)
 
 

 

 

 

 

Adjustment of redeemable noncontrolling interests to fair value
10,242

 
 
(10,242
)
 

 
(10,242
)
 

 
(10,242
)
Issuance of ANGI Homeservices common stock pursuant to stock-based awards, net of withholding taxes

 
 
(25,097
)
 
7

 
(25,090
)
 
9,108

 
(15,982
)
Net decrease in IAC/InterActiveCorp's investment in IAC Holdings, Inc.

 
 
(21,213
)
 

 
(21,213
)
 

 
(21,213
)
Other
(10
)
 
 

 

 

 

 

Balance as of March 31, 2019
$
71,914

 
 
$
2,241,177

 
$
(10,913
)
 
$
2,230,264

 
$
430,609

 
$
2,660,873


The accompanying Notes to Combined Financial Statements are an integral part of these statements.




6



IAC HOLDINGS, INC. AND SUBSIDIARIES
COMBINED STATEMENT OF CASH FLOWS
(Unaudited)
 
Three Months Ended March 31,
 
2020
 
2019
 
(In thousands)
Cash flows from operating activities:
 
 
 
Net loss
$
(330,571
)
 
$
(13,673
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Stock-based compensation expense
37,181

 
34,675

Amortization of intangibles
45,759

 
22,341

Depreciation
15,492

 
11,140

Bad debt expense
19,929

 
15,009

Goodwill impairment
211,973

 

Deferred income taxes
(13,759
)
 
(29,945
)
Losses on equity securities, net
51,473

 
240

Other adjustments, net
10,354

 
12,105

Changes in assets and liabilities, net of effects of acquisitions and dispositions:


 
 
Accounts receivable
(27,216
)
 
(40,270
)
Other assets
310

 
4,682

Accounts payable and other liabilities
(7,971
)
 
(31,821
)
Income taxes payable and receivable
1,564

 
1,107

Deferred revenue
24,653

 
17,004

Net cash provided by operating activities
39,171

 
2,594

Cash flows from investing activities:
 
 
 
Acquisitions, net of cash acquired
(532,857
)
 
(21,555
)
Capital expenditures
(14,810
)
 
(15,924
)
Proceeds from maturities of marketable debt securities

 
25,000

Net proceeds from the sale of businesses and investments
1,476

 
20,276

Decrease in notes receivable—related party
27,691

 

Other, net
(110
)
 
(2,137
)
Net cash (used in) provided by investing activities
(518,610
)
 
5,660

Cash flows from financing activities:
 
 
 
Principal payments on ANGI Homeservices Term Loan
(3,438
)
 
(3,438
)
Principal payments on related-party debt

 
(2,500
)
Purchase of ANGI Homeservices treasury stock
(38,512
)
 

Proceeds from the exercise of ANGI Homeservices stock options

 
573

Withholding taxes paid on behalf of ANGI Homeservices employees on net settled stock-based awards
(3,222
)
 
(16,544
)
Purchase of noncontrolling interests
(3,165
)
 
(3,182
)
Transfers from (to) IAC/InterActiveCorp
1,720,618

 
(38,856
)
Other, net
(465
)
 

Net cash provided by (used in) financing activities
1,671,816

 
(63,947
)
Total cash provided (used)
1,192,377

 
(55,693
)
Effect of exchange rate changes on cash and cash equivalents and restricted cash
(2,897
)
 
325

Net increase (decrease) in cash and cash equivalents and restricted cash
1,189,480

 
(55,368
)
Cash and cash equivalents and restricted cash at beginning of period
840,732

 
886,836

Cash and cash equivalents and restricted cash at end of period
$
2,030,212

 
$
831,468


The accompanying Notes to Combined Financial Statements are an integral part of these statements.

7

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Unaudited)


NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Separation
On December 19, 2019, IAC/InterActiveCorp ("IAC") entered into a Transaction Agreement (as amended as of April 28, 2020, the "Transaction Agreement") with Match Group, Inc. ("MTCH"), IAC Holdings, Inc., a direct wholly owned subsidiary of IAC ("New IAC" or the "Company"), and Valentine Merger Sub LLC, an indirect wholly owned subsidiary of IAC. Subject to the terms and conditions set forth in the Transaction Agreement, if the transactions contemplated by the Transaction Agreement are consummated, the businesses of MTCH will be separated from the remaining businesses of IAC through a series of transactions that will result in the pre-transaction stockholders of IAC owning shares in two, separate public companies—(1) IAC, which will be renamed Match Group, Inc. ("New Match") and which will own the businesses of MTCH and certain IAC financing subsidiaries, and (2) New IAC, which will be renamed IAC/InterActiveCorp and which will own IAC's other businesses—and the pre-transaction stockholders of MTCH (other than IAC) owning shares in New Match. Completion of the separation, which is expected to occur in the second quarter of 2020, is subject to a number of conditions, including approval by a majority of the disinterested shareholders of MTCH, approval of IAC’s shareholders and other customary conditions and approvals. This transaction is referred to as the "Separation".
Basis of Presentation and Combination
In connection with the Separation, IAC Holdings, Inc. was incorporated as a Delaware corporation in November 2019. IAC Holdings, Inc. does not engage in any business or other activities other than in connection with the Separation. In contemplation of the Separation: (1) effective January 1, 2020, all employees of the IAC/InterActiveCorp legal entity became employees of the IAC Holdings, Inc. legal entity and (2) during the first quarter of 2020, IAC contributed $1.1 billion in cash to IAC Holdings, Inc. in connection with the transfer of the centrally-managed U.S. treasury function from January 1, 2020 to IAC Holdings, Inc. The legal entity financial statements of IAC Holdings, Inc. are included in "Note 12 - IAC Holdings, Inc. Legal Entity Financial Statements".
The historical combined financial statements of IAC Holdings, Inc. and the businesses comprising New IAC have been derived from the consolidated financial statements and accounting records of IAC. The combined financial statements reflect the historical financial position, results of operations and cash flows of IAC Holdings, Inc. and the businesses comprising New IAC since their respective dates of acquisition by IAC and the allocation to New IAC of certain IAC corporate expenses relating to New IAC based on the historical financial statements and accounting records of IAC. For the purpose of these financial statements, income taxes have been computed as if the entities comprising New IAC filed tax returns on a standalone, separate basis. The financial statements have been prepared on a combined, rather than consolidated, basis as the final steps of the legal reorganization, which will result in the contribution of all the entities that will comprise New IAC as of the date of the Separation, are not yet complete.
As used herein, ‘‘New IAC,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘our’’ or ‘‘us’’ and similar terms in these historical combined financial statements refer to IAC Holdings, Inc. and the businesses comprising New IAC (unless the context requires otherwise).
The Company prepares its combined financial statements in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’).
All intercompany transactions and balances between and among the Company and the entities comprising the Company have been eliminated. All intercompany transactions between (i) New IAC and (ii) IAC and its subsidiaries are considered to be effectively settled for cash at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the combined statement of cash flows as a financing activity and in the combined balance sheet as ‘‘Invested capital.’’
In management’s opinion, the assumptions underlying the historical combined financial statements of the Company, including the basis on which the expenses have been allocated from IAC, are reasonable. However, the allocations may not reflect the expenses that we may have incurred as an independent, stand-alone company for the periods presented.

8

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

The accompanying unaudited combined financial statements have been prepared in accordance with GAAP for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited combined financial statements include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. Interim results are not necessarily indicative of the results that may be expected for the full year. The accompanying unaudited interim combined financial statements should be read in conjunction with the annual audited combined financial statements of the Company and notes thereto for the year ended December 31, 2019.
COVID-19 Update
The Company's business could be materially and adversely affected by the outbreak of COVID-19, which has been declared a "pandemic" by the World Health Organization.
Through March 31, 2020, the Company's ANGI Homeservices business has experienced a decline in demand for home services requests, driven primarily by decreases in demand in certain categories of jobs (particularly non-essential projects) and decreases in demand in regions most affected by the COVID-19 outbreak, which the Company attributes both to the unwillingness of consumers to interact with service professionals face-to-face or have service professionals in their homes, and to lower levels of consumer confidence and discretionary income generally. In addition, with respect to the Company's ad-supported businesses, the Company has experienced a meaningful decrease in advertising rates across the Company's various properties (as much as 30% year over year).
In connection with the first quarter close of its books, the Company determined that the effects of COVID-19 were an indicator of possible impairment for certain of its assets. The Company determined, as of March 31, 2020, the fair value for those assets for which COVID-19 was deemed to be an indicator of possible impairment and identified the following impairments:
a $212.0 million impairment related to the goodwill of the Desktop reporting unit;
a $21.4 million impairment related to certain indefinite-lived intangible assets of the Desktop reporting unit;
a $51.5 million impairment of certain equity securities without readily determinable fair values; and
a $7.5 million impairment of a note receivable and a warrant related to certain investees.
The extent to which developments related to the COVID-19 outbreak and measures designed to curb its spread continue to impact the Company’s business, financial condition and results of operations will depend on future developments, all of which are highly uncertain and many of which are beyond the Company’s control, including the speed of contagion, the development and implementation of effective preventative measures and possible treatments, the scope of governmental and other restrictions on travel, non-essential services and other activity, and public reactions to these developments. For example, these developments and measures have resulted in rapid and adverse changes to the operating environment in which we do business, as well as significant uncertainty concerning the near and long term economic ramifications of the COVID-19 outbreak, which have adversely impacted our ability to forecast our results and respond in a timely and effective manner to trends related to the COVID-19 outbreak. The longer the global outbreak and measures designed to curb the spread of the virus continue to adversely affect levels of consumer confidence, discretionary spending and the willingness of consumers to interact with other consumers, vendors and service providers face-to-face (and in turn, adversely affect demand for the Company’s various products and services), the greater the adverse impact is likely to be on the Company’s business, financial condition and results of operations and the more limited will be the Company’s ability to try and make up for delayed or lost revenues.
Nature of Operations
The Company operates Vimeo, Dotdash and Care.com, among many other online businesses, and has majority ownership of ANGI Homeservices, which includes HomeAdvisor, Angie’s List and Handy.

9

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

ANGI Homeservices
Our ANGI Homeservices segment includes the North American (United States and Canada) and European businesses and operations of ANGI Homeservices Inc. (‘‘ANGI’’). On September 29, 2017, the Company’s HomeAdvisor business and Angie’s List Inc. (‘‘Angie’s List’’) combined under a new publicly traded company called ANGI Homeservices Inc. (the ‘‘Combination’’). At March 31, 2020, the Company’s economic interest and voting interest in ANGI were 84.9% and 98.3%, respectively.
ANGI Homeservices Inc. connects quality home service professionals across 500 different categories, from repairing and remodeling to cleaning and landscaping, with consumers. Approximately 250,000 domestic service professionals find work through ANGI and consumers turn to at least one of our brands to find a professional for more than 25 million projects each year. ANGI has established category-transforming products with brands such as HomeAdvisor, Angie’s List, Handy and Fixd Repair.
On January 25, 2019, ANGI completed the acquisition of Fixd Repair, a home warranty and service company. ANGI also owns and operates Handy, a leading platform in the United States for connecting individuals looking for household services (primarily cleaning and handyman services) with top-quality, pre-screened independent service professionals, and mHelpDesk, a provider of cloud-based field service software for small to mid-size businesses. In addition to its market-leading U.S. operations, ANGI owns leading home services online marketplaces in France (Travaux), Germany (MyHammer), Netherlands (Werkspot), United Kingdom (MyBuilder Limited or ‘‘MyBuilder,’’ which we acquired a controlling interest in on March 24, 2017), Canada (HomeStars Inc. or ‘‘HomeStars,’’ which we acquired a controlling interest in on February 8, 2017) and Italy (Instapro), as well as operations in Austria (MyHammer).
Vimeo
Vimeo operates a global video platform for creative professionals, small and medium businesses (‘‘SMBs’’), organizations and enterprises to connect with their audiences, customers and employees. Vimeo provides cloud-based Software-as-a-Service (‘‘SaaS’’) offerings that allow customers to create, host, stream, monetize, analyze and distribute videos online and across devices. Vimeo also sold live streaming accessories through its hardware business, which was sold on March 29, 2019.
On May 28, 2019, Vimeo completed the acquisition of Magisto, a video creation service enabling consumers and businesses to create short-form videos.
Dotdash
Dotdash is a portfolio of digital publishing brands providing expert information and inspiration in select vertical content categories.
Applications
Our Applications segment consists of our Desktop business and Mosaic Group, our mobile business. Through these businesses, we are a leading provider of global, advertising-driven desktop and subscription-based mobile applications.
Through our Desktop business, we own and operate a portfolio of desktop browser applications that provide users with access to a wide variety of online content, tools and services. We provide users who download our desktop browser applications with new tab search services, as well as the option of default browser search services. We distribute our desktop browser applications to consumers free of charge on an opt-in basis directly through direct to consumer (primarily Chrome Web Store) and partnership distribution channels.
Through Mosaic Group, we are a leading provider of global subscription mobile applications through Apalon, iTranslate and TelTech. Apalon is a leading mobile development company with one of the largest and most popular application portfolios worldwide. iTranslate develops and distributes some of the world’s most downloaded mobile translation applications, enabling users to read, write, speak and learn foreign languages anywhere in the world. TelTech develops and distributes unique and innovative mobile communications applications that help protect consumer privacy.

10

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Ask Media Group
Ask Media Group is a collection of websites providing general search services, and to a lesser extent, content that help users find the information they need.
Emerging & Other
Our Emerging & Other segment primarily includes:
Care.com, a leading global platform for finding and managing family care, designed to meet the evolving needs of today’s families and caregivers, and provider of household payroll and tax services and customized corporate benefits packages covering the care needs of working families, which was acquired on February 11, 2020;
Bluecrew, a technology driven staffing platform exclusively for flexible W-2 work;
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, for periods prior to its sale on March 16, 2020; and
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.
Accounting Estimates
Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its combined financial statements in accordance with GAAP. These estimates, judgments and assumptions impact the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates.
On an ongoing basis, the Company evaluates its estimates and judgments, including those related to: the fair values of cash equivalents and marketable debt securities; the carrying value of accounts receivable, including the determination of the allowance for doubtful accounts; the determination of revenue reserves; the carrying value of right-of-use assets ("ROU assets"); the useful lives and recoverability of definite-lived intangible assets and property, capitalized software and equipment; the recoverability of goodwill and indefinite-lived intangible assets; the fair value of equity securities without readily determinable fair values; contingencies; the fair value of acquisition-related contingent consideration arrangements; unrecognized tax benefits; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets and other factors that the Company considers relevant.

11

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Accounting for Investments in Equity Securities
Investments in equity securities, other than those of the Company's combined subsidiaries and those accounted for under the equity method, if applicable, are accounted for at fair value or under the measurement alternative of Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, with any changes to fair value recognized within other income (expense), net each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar securities of the same issuer; value is generally determined based on a market approach as of the transaction date. A security will be considered identical or similar if it has identical or similar rights to the equity securities held by the Company. The Company reviews its investments in equity securities without readily determinable fair values for impairment each reporting period when there are qualitative factors or events that indicate possible impairment. Factors the Company considers in making this determination include negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors. When indicators of impairment exist, the Company prepares quantitative assessments of the fair value of its investments in equity securities, which require judgment and the use of estimates. When the Company's assessment indicates that the fair value of the investment is below its carrying value, the Company writes down the investment to its fair value and records the corresponding charge within other income (expense), net. See "Note 5 - Financial Instruments and Fair Value Measurements" for additional information on the impairments of certain equity securities without readily determinable fair values recorded in the quarter ended March 31, 2020.
In the event the Company has investments in the common stock or in-substance common stock of entities in which the Company has the ability to exercise significant influence over the operating and financial matters of the investee, but does not have a controlling financial interest, are accounted for using the equity method and are included in "Long-term investments" in the accompanying combined balance sheet. At March 31, 2020 and December 31, 2019, the Company did not have any investments accounted for using the equity method.
General Revenue Recognition
Revenue is recognized when control of the promised services or goods is transferred to the Company's customers and in the amount that reflects the consideration the Company expects to be entitled to in exchange for those services or goods.
The Company's disaggregated revenue disclosures are presented in "Note 8—Segment Information."
Prior to January 1, 2020, ANGI's Handy business recorded revenue on a net basis. Effective January 1, 2020, the Company modified the Handy terms and conditions so that Handy, rather than the service professional, has the contractual relationship with the consumer to deliver the service and Handy, rather than the consumer, has the contractual relationship with the service professional. Consumers request services and pay for such services directly through the Handy platform and then Handy fulfills the request with independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services. This change in contractual terms requires gross revenue accounting treatment effective January 1, 2020. Also, in the case of certain tasks, HomeAdvisor provides a pre-priced product offering, pursuant to which consumers can request services through a HomeAdvisor platform and pay HomeAdvisor for the services directly. HomeAdvisor then fulfills the request with independently established home services providers engaged in a trade, occupation and/or business that customarily provides such services. Revenue from HomeAdvisor’s pre-priced product offering is also recorded on a gross basis effective January 1, 2020. In addition to changing the presentation of revenue to gross from net, the timing of revenue recognition will change for pre-priced jobs and will be later than the timing of existing consumer connection revenue for HomeAdvisor because the Company will not be able to record revenue, generally, until the service professional completes the job on the Company's behalf. The change to gross revenue reporting for Handy and HomeAdvisor’s pre-priced product offering, effective January 1, 2020, resulted in an increase in revenue of $15.2 million during the three months ended March 31, 2020.

12

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Deferred Revenue
Deferred revenue consists of advance payments that are received or are contractually due in advance of the Company's performance. The Company’s deferred revenue is reported on a contract by contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the term of the applicable subscription period or expected completion of the Company's performance obligation is one year or less. The current and non-current deferred revenue balances at December 31, 2019 are $178.6 million and $1.3 million, respectively. During the three months ended March 31, 2020, the Company recognized $90.9 million of revenue that was included in the deferred revenue balance as of December 31, 2019. During the three months ended March 31, 2019, the Company recognized $76.0 million of revenue that was included in the deferred revenue balance as of December 31, 2018. The current and non-current deferred revenue balances at March 31, 2020 are $215.7 million and $1.3 million, respectively. Non-current deferred revenue is included in “Other long-term liabilities” in the accompanying combined balance sheet.
Practical Expedients and Exemptions
As permitted under the practical expedient available under ASU No. 2014-09, Revenue from Contracts with Customers, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which the Company has the right to invoice for services performed.
For sales incentive programs where the customer relationship period is one year or less, the Company has elected the practical expedient to expense the costs as incurred. The amount of capitalized sales commissions where the customer relationship period is greater than one year is $47.5 million and $42.4 million at March 31, 2020 and December 31, 2019, respectively.
Allowance for Doubtful Accounts and Revenue Reserve
The following table presents the changes in the allowance for doubtful accounts for three months ended March 31, 2020:
 
Three Months Ended March 31, 2020
 
(In thousands)
Balance at January 1
$
20,257

Current period provision of bad debt
19,193

Write-offs charged against the allowance
(16,528
)
Recoveries collected
736

Balance at March 31
$
23,658


The revenue reserve was $4.4 million and $3.9 million at March 31, 2020 and December 31, 2019, respectively. The total allowance for doubtful accounts and revenue reserve was $28.1 million and $24.1 million as of March 31, 2020 and December 31, 2019, respectively.
Certain Risks and Concentrations—Services Agreement with Google
IAC and Google are party to a services agreement (the "Services Agreement"). If the Separation is consummated, IAC shall assign the Services Agreement to the Company. A meaningful portion of the Company's revenue is attributable to the Services Agreement. In addition, the Company earns certain other advertising revenue from Google that is not attributable to the Services Agreement. For the three months ended March 31, 2020 and 2019, total revenue earned from Google was $138.9 million and $195.8 million, representing 20% and 31%, respectively, of the Company's combined revenue. Accounts receivable related to revenue earned from Google totaled $48.7 million and $53.0 million at March 31, 2020 and December 31, 2019, respectively.

13

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Revenue attributable to the Services Agreement is earned by the Desktop business within the Applications segment and by the Ask Media Group segment. For the three months ended March 31, 2020 and 2019, revenue earned from the Services Agreement was $46.1 million and $88.1 million, respectively, within the Applications segment and $80.5 million and $94.8 million, respectively, within the Ask Media Group segment.
The current Services Agreement was scheduled to expire on March 31, 2020. On February 11, 2019, IAC and Google amended the Services Agreement, effective as of April 1, 2020. The amendment extends the expiration date of the agreement to March 31, 2023; provided that during September 2020 and during each September thereafter, either party may, after discussion with the other party, terminate the Services Agreement, effective on September 30 of the year following the year such notice is given. IAC believes that the amended agreement, taken as a whole, is comparable to the pre-amendment agreement with Google. The Services Agreement requires that the Company comply with certain guidelines promulgated by Google. Google may generally unilaterally update its policies and guidelines without advance notice. These updates may be specific to the Services Agreement or could be more general and thereby impact the Company as well as other companies. These policy and guideline updates could in turn require modifications to, or prohibit and/or render obsolete certain of the Company's products, services and/or business practices, which could be costly to address or otherwise have an adverse effect on the Company's combined financial condition and results of operations, particularly the Desktop business and Ask Media Group. From time to time, Google has made changes to the policies under the Services Agreement and has also made industry-wide changes that have negatively impacted the Desktop business and Google may do so in the future.
Adoption of New Accounting Pronouncements
Adoption of ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
The Company adopted ASU No. 2016-13 effective January 1, 2020. The standard significantly changes how entities measure credit losses for most financial assets, including accounts receivable. ASU No. 2016-13 replaces the “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. The Company adopted ASU No. 2016-13 using the modified retrospective approach and there was no cumulative effect arising from the adoption. The adoption of ASU No. 2016-13 did not have a material impact on the Company's combined financial statements.
Adoption of ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
The Company adopted ASU No. 2019-12 effective January 1, 2020, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. Most amendments within ASU No. 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted ASU No. 2019-12 on January 1, 2020 using the modified retrospective basis for those amendments that are not applied on a prospective basis. The adoption of ASU No. 2019-12 did not have a material impact on the Company's combined financial statements.
NOTE 2—INCOME TAXES
The Company is included within IAC’s tax group for purposes of federal and consolidated state income tax return filings. In all periods presented, current and deferred income tax benefit/provision have been computed for the entities comprising the Company on an as if standalone, separate return basis and payments to and refunds from IAC for the Company’s share of IAC’s consolidated federal and state tax return liabilities/receivables calculated on this basis have been reflected within cash flows from operating activities in the accompanying combined statements of cash flows.
At the end of each interim period, the Company estimates the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which they occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs.

14

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of the realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the Company's tax environment changes. To the extent that the expected annual effective income tax rate changes during a quarter, the effect of the change on prior quarters is included in income tax provision in the quarter in which the change occurs.
We have calculated the provision for income taxes during the March 31, 2020 period by applying an estimate of the annual effective tax rate for the full fiscal year to ordinary loss (pretax loss excluding unusual or infrequently occurring discrete items) for the reporting period. We have used a discrete effective tax rate method to calculate domestic taxes for the three months ended March 31, 2019. We determined that since small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the three months ended March 31, 2019.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act provides opportunities for additional liquidity, loan guarantees, and other government programs to support companies affected by the COVID-19 pandemic and their employees. Based on the Company's preliminary analysis of the CARES Act, New IAC expects to avail itself of the following:
a refund of federal income taxes due to a five-year carryback of net operating loss incurred in 2019;
accelerated depreciation deductions; and
a deferral of 2020 employer social security payroll taxes.
The Company continues to review and consider worldwide government programs related to the COVID-19 pandemic; however, the Company does not expect the impact of these programs to be material.
For the three months ended March 31, 2020, the Company recorded an income tax benefit of $41.4 million which represents an effective income tax rate of 11%. The effective income tax rate is lower than the statutory rate of 21% due primarily to the non-deductible portion of Desktop goodwill impairment charge and unbenefited losses related to other investments, partially offset by a revaluation of net operating loss deferred taxes due to the CARES Act. For the three months ended March 31, 2019, the Company recorded an income tax benefit of $29.2 million which represents an effective income tax rate of 68%. The effective income tax rate is higher than the statutory rate of 21% due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards.
Upon the Separation, the Company will be allocated a portion of tax attributes related to the IAC consolidated federal and state tax filings pursuant to the Internal Revenue Code and applicable state law. This allocation will require that the Company’s net deferred tax liability (computed on an as if standalone, separate return basis) be adjusted as of the Separation date with a corresponding adjustment to additional paid-in capital. The final allocation of tax attributes and resulting adjustment to the Company’s deferred taxes will be impacted by multiple factors, including, but not limited to, the ultimate date of the Separation and the amount of taxable income or loss generated by the IAC consolidated tax group in the year of the Separation.
The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. Accruals for interest and penalties are not material.

15

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

The Company is routinely under audit by federal, state, local and foreign authorities in the area of income tax as a result of previously filed separate company and consolidated tax returns with IAC. These audits include questioning the timing and the amount of income and deductions and the allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service ("IRS") has substantially completed its audit of IAC’s federal income tax returns for the years ended December 31, 2010 through 2016, which includes the operations of the Company, resulting in reductions to the research credits claimed. The IRS is expected to begin an audit of the year ended December 31, 2017 in the second quarter of 2020. The statute of limitations for the years 2010 through 2012 has been extended to November 30, 2020 and the statute of limitations for the years 2013 through 2016 has been extended to March 31, 2021. Returns filed in various other jurisdictions are open to examination for tax years beginning with 2009. Income taxes payable include unrecognized tax benefits considered sufficient to pay assessments that may result from examination of prior year tax returns. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may not accurately anticipate actual outcomes and, therefore, may require periodic adjustment. Although management currently believes changes in unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.
At March 31, 2020 and December 31, 2019, unrecognized tax benefits, including interest and penalties, are $16.7 million and $20.3 million, respectively. Unrecognized tax benefits, including interest and penalties, at March 31, 2020 decreased by $3.6 million due primarily to the effective settlement of certain prior year tax positions with the IRS relating to research credits. If unrecognized tax benefits at March 31, 2020 are subsequently recognized, $15.3 million, net of related deferred tax assets and interest, would reduce income tax expense. The comparable amount as of December 31, 2019 was $18.9 million. The Company believes it is reasonably possible that its unrecognized tax benefits could decrease by $6.4 million by March 31, 2021, due primarily to expirations of statutes of limitations and other settlements, $6.2 million of which would reduce the income tax provision.
NOTE 3—BUSINESS COMBINATION
Care.com
On February 11, 2020, IAC acquired 100% of Care.com, a leading global platform for finding and managing family care, for a total purchase price of $627.5 million, which includes cash consideration of $587.0 million paid by the Company and the settlement of all outstanding vested employee equity awards for $40.5 million paid by Care.com prior to the completion of the acquisition. The Company's purchase accounting is not yet complete, including the determination of purchase price and the allocation of purchase price to the fair value of assets acquired and liabilities assumed. These preliminary values are subject to revision and are not expected to be finalized until the fourth quarter of 2020.
The financial results of Care.com are included in the Company's combined financial statements, within the Emerging & Other segment, beginning February 11, 2020. For the three months ended March 31, 2020, the Company included $18.5 million of revenue and $12.3 million of net loss in its combined statement of operations related to Care.com. The net loss of Care.com reflects a reduction in revenue of $8.7 million due to the write-off of deferred revenue related to the acquisition and $4.8 million in transaction-related costs, including severance.
The table below summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

16

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

 
Care.com
 
(In thousands)
Cash and cash equivalents
$
57,873

Short-term investments
20,000

Accounts receivable
20,292

Other current assets
5,678

Property and equipment
2,894

Goodwill
416,869

Intangible assets
145,300

Other non-current assets
26,852

Total assets
695,758

Deferred revenue
(13,422
)
Other current liabilities
(36,400
)
Deferred income taxes
(33,960
)
Other non-current liabilities
(25,001
)
Net assets acquired
$
586,975


IAC acquired Care.com because it is complementary to other marketplace businesses of New IAC. The purchase price was based on the expected financial performance of Care.com, not on the value of the net identifiable assets at the time of acquisition. This resulted in a significant portion of the purchase price being attributed to goodwill.
The preliminary estimated fair values of the identifiable intangible assets acquired at the date of acquisition are as follows:
 
Care.com
 
(In thousands)
 
Useful Life
(Years)
Indefinite-lived trade name and trademarks
$
59,400

 
Indefinite
Developed technology
49,700

 
5
Customer relationships
35,400

 
2 - 7
Provider relationships
800

 
4
    Total identifiable intangible assets acquired
$
145,300

 


Other current assets, other non-current assets, other current liabilities and other non-current liabilities of Care.com were reviewed and adjusted to their fair values at the date of acquisition, as necessary. The fair values of the trade name and developed technology were determined using an income approach that utilized the relief from royalty methodology. The fair values of customer relationships and provider relationships were determined using an income approach that utilized the excess earnings methodology. The valuations of the intangible assets incorporate significant unobservable inputs and require significant judgment and estimates, including the amount and timing of future cash flows and the determination of royalty and discount rates. The amount attributed to goodwill is not tax deductible.

17

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Unaudited pro forma financial information
The unaudited pro forma financial information in the table below presents the combined results of the Company and Care.com as if this acquisition had occurred on January 1, 2019. The unaudited pro forma financial information includes adjustments required under the acquisition method of accounting and is presented for informational purposes only and is not necessarily indicative of the results that would have been achieved had the acquisition actually occurred on January 1, 2019. For the three months ended March 31, 2020, pro forma adjustments include a reduction in transaction related costs (including stock-based compensation expense related to the acceleration of vesting of outstanding employee equity awards) of $60.9 million because they are one-time in nature and will not have a continuing impact on operations and an increase in revenue of $8.7 million related to deferred revenue written off as a part of the acquisition. For the three months ended March 31, 2019, pro forma adjustments include an increase in amortization of intangibles of $4.0 million and a decrease of $7.7 million related to the deferred revenue written off as a part of the acquisition.
 
Three Months Ended March 31,
 
2020
 
2019
 
(In thousands)
Revenue
$
718,763

 
$
686,904

Net loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.
$
(320,955
)
 
$
(24,705
)

NOTE 4—GOODWILL AND INTANGIBLE ASSETS
Goodwill and intangible assets, net are as follows:
 
March 31,
 
December 31,
 
2020
 
2019
 
(In thousands)
Goodwill
$
1,816,723

 
$
1,616,867

Intangible assets with indefinite lives
259,254

 
225,296

Intangible assets with definite lives, net of accumulated amortization
192,842

 
124,854

Total goodwill and intangible assets, net
$
2,268,819

 
$
1,967,017


The following table presents the balance of goodwill by reportable segment, including the changes in the carrying value of goodwill, for the three months ended March 31, 2020:
 
Balance at
December 31, 2019
 
Additions
 
(Deductions)
 
Impairment
 
Foreign
Exchange
Translation
 
Balance at
March 31, 2020
 
(In thousands)
ANGI Homeservices
$
884,296

 
$

 
$

 
$

 
$
(4,868
)
 
$
879,428

Vimeo
219,374

 

 
(38
)
 

 

 
219,336

Applications:
 
 
 
 
 
 
 
 
 
 
 
     Desktop
265,146

 

 

 
(211,973
)
 

 
53,173

     Mosaic Group
239,602

 

 

 

 
(134
)
 
239,468

Total Applications
504,748

 

 

 
(211,973
)
 
(134
)
 
292,641

Emerging & Other
8,449

 
416,869

 

 

 

 
425,318

Total
$
1,616,867

 
$
416,869

 
$
(38
)
 
$
(211,973
)
 
$
(5,002
)
 
$
1,816,723


Additions are related to the acquisition of Care.com (included in Emerging & Other Segment).

18

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

In connection with the first quarter close of its books, the Company determined that the effects of COVID-19 were an indicator of possible impairment for certain of its reporting units and indefinite-lived intangible assets. The Company determined the fair value of these reporting units and indefinite-lived intangible assets as of March 31, 2020 and identified the following impairments:
a $212.0 million impairment related to the goodwill of the Desktop reporting unit and
a $21.4 million impairment related to certain indefinite-lived intangible assets of the Desktop reporting unit.
In addition, the updated valuation of the Mosaic Group reporting unit indicates that the fair value of this reporting unit approximates its carrying value. The goodwill of the Desktop and Mosaic Group reporting units is $53.2 million and $239.5 million, respectively, as of March 31, 2020. To the extent there is a decline in the fair value of these reporting units, a goodwill impairment would be recorded to the extent the carrying value exceeds the fair value.
The fair value of the Desktop and Mosaic Group reporting units was determined using both an income approach based on discounted cash flows ("DCF") and a market approach. Determining fair value using a DCF analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates. The expected cash flows used in the DCF analyses were based on the most recent forecasts for Desktop and Mosaic Group for 2020 and each of the years in the forecast period, which were updated in light of COVID-19. For years beyond the forecast period, Desktop and Mosaic Group estimates were based, in part, on forecasted growth rates. The discount rates used in the DCF analyses were intended to reflect the risks inherent in the expected future cash flows of the Desktop and Mosaic Group reporting units. The discount rate used for determining the fair value of both the Desktop and Mosaic Group reporting units was 15.0%. Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple is determined, which is applied to financial metrics to estimate the fair value of the Desktop and Mosaic Group reporting units. To determine a peer group of companies for Desktop and Mosaic Group, the Company considered companies relevant in terms of consumer use, monetization model, margin and growth characteristics, and brand strength operating in their respective sectors. The aggregate carrying value of goodwill for which the most recent estimate of the excess of fair value over carrying value is less than 20% is approximately $709.4 million.
The following table presents the balance of goodwill by reportable segment, including the changes in the carrying value of goodwill, for the year ended December 31, 2019:
 
Balance at
December 31, 2018
 
Additions
 
(Deductions)
 
Impairment
 
Foreign
Exchange
Translation
 
Balance at
December 31, 2019
 
(In thousands)
ANGI Homeservices
$
895,071

 
$
18,326

 
(29,293
)
 
$

 
$
192

 
$
884,296

Vimeo
77,152

 
142,222

 

 

 

 
219,374

Applications:
 
 
 
 
 
 
 
 
 
 
 
     Desktop
265,146

 

 

 

 

 
265,146

     Mosaic Group
239,746

 

 

 

 
(144
)
 
239,602

Total Applications
504,892

 

 

 

 
(144
)
 
504,748

Emerging & Other
7,002

 
4,765

 

 
(3,318
)
 

 
8,449

Total
$
1,484,117

 
$
165,313

 
$
(29,293
)
 
$
(3,318
)
 
$
48

 
$
1,616,867


Additions primarily relate to the acquisitions of Magisto (included in the Vimeo segment) and Fixd Repair (included in the ANGI Homeservices segment). Deductions primarily relate to tax benefits of acquired attributes related to the acquisition of Handy (included in the ANGI Homeservices segment). During the fourth quarter of 2019, the Company recorded an impairment charge of $3.3 million related to the goodwill of the College Humor Media business (included in the Emerging & Other Segment).

19

IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

The March 31, 2020 and December 31, 2019 goodwill balances reflect accumulated impairment losses of $741.1 million and $529.1 million, respectively, at Applications. The March 31, 2020 and December 31, 2019 goodwill balances also reflect accumulated impairment losses of $212.6 million, $198.3 million, $187.1 million and $14.9 million at the businesses previously included in the IAC Publishing segment (excluding Dotdash and Ask Media Group, included in the Emerging & Other segment), Dotdash, Ask Media Group and College Humor Media (included in the Emerging & Other segment), respectively.
As described above, since the effects of COVID-19 were an indicator of impairment, the Company updated its calculations of the fair value of its indefinite-lived intangible assets as of March 31, 2020. The Company recorded impairment charges of $21.4 million at Desktop, related to indefinite-lived trade names. The impairment of indefinite-lived intangible assets is included in “Amortization of intangibles” in the accompanying combined statement of operations. The Company determines the fair value of indefinite-lived intangible assets using an avoided royalty DCF valuation analysis. Significant judgments inherent in this analysis include the selection of appropriate royalty and discount rates and estimating the amount and timing of expected future cash flows. The discount rates used in the DCF analyses were intended to reflect the risks inherent in the expected future cash flows generated by the respective intangible assets. The royalty rates used in the DCF analyses were based upon an estimate of the royalty rates that a market participant would pay to license the Company's trade names and trademarks. The discount rate used to value the trade names that were impaired in the first quarter of 2020 was 15.0% and the royalty rate was 1.0%. The aggregate carrying value of indefinite-lived intangible assets for which the most recent estimate of the excess of fair value over carrying value is less than 20% is approximately $70.2 million.
At March 31, 2020 and December 31, 2019, intangible assets with definite lives are as follows:
 
March 31, 2020
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Weighted-Average
Useful Life
(Years)
 
(In thousands)
 
 
Technology
$
193,005

 
$
(81,350
)
 
$
111,655

 
4.7
Service professional relationships
99,850

 
(83,560
)
 
16,290

 
3.0
Customer lists and user base
79,510

 
(26,548
)
 
52,962

 
4.0
Trade names
17,279

 
(10,955
)
 
6,324

 
2.8
Memberships
15,900

 
(13,264
)
 
2,636

 
3.0
Other
11,099

 
(8,124
)
 
2,975

 
3.4
Total
$
416,643

 
$
(223,801
)
 
$
192,842

 
4.0

 
December 31, 2019
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Weighted-Average
Useful Life
(Years)
 
(In thousands)
 
 
Technology
$
143,255

 
$
(73,483
)
 
$
69,772

 
4.5
Service professional relationships
99,651

 
(76,445
)
 
23,206

 
2.9
Customer lists and user base
44,286

 
(24,226
)
 
20,060

 
3.3
Trade names
12,777

 
(8,082
)
 
4,695

 
3.5
Memberships
15,900

 
(11,940
)
 
3,960

 
3.0
Other
10,439

 
(7,278
)
 
3,161

 
3.4
Total
$
32