| SEGMENT INFORMATION |
SEGMENT INFORMATION The overall concept that IAC employs in determining its operating segments is to present the financial information in a manner consistent with how the chief operating decision maker views the businesses, how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of services or products offered or the target market. Operating segments are combined for reporting purposes if they meet certain aggregation criteria, which principally relate to the similarity of their economic characteristics or, in the case of the eCommerce reportable segment, do not meet the quantitative thresholds that require presentation as separate operating segments. | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | 2015 | | 2014 | | 2015 | | 2014 | | (In thousands) | Revenue: | | | | | | | | Search & Applications | $ | 351,366 |
| | $ | 395,716 |
| | $ | 734,264 |
| | $ | 793,751 |
| The Match Group | 254,690 |
| | 214,314 |
| | 493,901 |
| | 425,501 |
| Media | 36,210 |
| | 36,656 |
| | 79,822 |
| | 73,011 |
| eCommerce | 128,986 |
| | 109,949 |
| | 235,996 |
| | 204,791 |
| Inter-segment eliminations | (120 | ) | | (320 | ) | | (339 | ) | | (492 | ) | Total | $ | 771,132 |
| | $ | 756,315 |
| | $ | 1,543,644 |
| | $ | 1,496,562 |
|
| | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | 2015 | | 2014 | | 2015 | | 2014 | | (In thousands) | Operating Income (Loss): | | | | | | | | Search & Applications | $ | 68,592 |
| | $ | 77,771 |
| | $ | 132,892 |
| | $ | 148,108 |
| The Match Group | 51,441 |
| | 61,198 |
| | 76,753 |
| | 101,001 |
| Media | (13,775 | ) | | (9,794 | ) | | (29,127 | ) | | (18,360 | ) | eCommerce | (1,004 | ) | | 8 |
| | (7,858 | ) | | (1,553 | ) | Corporate | (42,485 | ) | | (33,493 | ) | | (74,772 | ) | | (61,794 | ) | Total | $ | 62,769 |
| | $ | 95,690 |
| | $ | 97,888 |
| | $ | 167,402 |
|
| | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | 2015 | | 2014 | | 2015 | | 2014 | | (In thousands) | Adjusted EBITDA: | | | | | | | | Search & Applications | $ | 72,910 |
| | $ | 91,258 |
| | $ | 151,811 |
| | $ | 173,329 |
| The Match Group | 64,822 |
| | 69,368 |
| | 90,678 |
| | 116,798 |
| Media | (15,452 | ) | | (8,911 | ) | | (30,035 | ) | | (16,775 | ) | eCommerce | 2,681 |
| | 4,523 |
| | (456 | ) | | 7,327 |
| Corporate | (16,282 | ) | | (14,806 | ) | | (28,162 | ) | | (31,152 | ) | Total | $ | 108,679 |
| | $ | 141,432 |
| | $ | 183,836 |
| | $ | 249,527 |
|
Revenue by geography is based on where the customer is located. Geographic information about revenue and long-lived assets is presented below: | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | 2015 | | 2014 | | 2015 | | 2014 | | (In thousands) | Revenue: | | | | | | | | United States | $ | 566,224 |
| | $ | 511,862 |
| | $ | 1,136,237 |
| | $ | 1,016,265 |
| All other countries | 204,908 |
| | 244,453 |
| | 407,407 |
| | 480,297 |
| Total | $ | 771,132 |
| | $ | 756,315 |
| | $ | 1,543,644 |
| | $ | 1,496,562 |
|
| | | | | | | | | | June 30,
2015 | | December 31,
2014 | | (In thousands) | Long-lived assets (excluding goodwill and intangible assets): | | | | United States | $ | 278,004 |
| | $ | 281,879 |
| All other countries | 19,154 |
| | 20,580 |
| Total | $ | 297,158 |
| | $ | 302,459 |
|
The Company's primary financial measure is Adjusted EBITDA, which is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of (i) amortization of intangible assets and impairments of goodwill and intangible assets and (ii) gains and losses recognized on changes in the fair value of contingent consideration arrangements. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments. The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, and we believe that by excluding these items, Adjusted EBITDA corresponds more closely to the cash operating income generated from our business, from which capital investments are made and debt is serviced. Adjusted EBITDA has certain limitations in that it does not take into account the impact to IAC's statement of operations of certain expenses. The following tables reconcile Adjusted EBITDA to operating income (loss) for the Company's reportable segments: | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2015 | |
Adjusted EBITDA | | Stock-Based Compensation Expense | | Depreciation | | Amortization of Intangibles | | Acquisition-related Contingent Consideration Fair Value Adjustments | | Operating Income (Loss) | | (In thousands) | Search & Applications | $ | 72,910 |
| | $ | — |
| | $ | (3,685 | ) | | $ | (6,930 | ) | | $ | 6,297 |
| | $ | 68,592 |
| The Match Group | 64,822 |
| | (2,056 | ) | | (6,647 | ) | | (5,901 | ) | | 1,223 |
| | 51,441 |
| Media | (15,452 | ) | | (147 | ) | | (228 | ) | | (378 | ) | | 2,430 |
| | (13,775 | ) | eCommerce | 2,681 |
| | (420 | ) | | (2,063 | ) | | (1,202 | ) | | — |
| | (1,004 | ) | Corporate | (16,282 | ) | | (23,326 | ) | | (2,877 | ) | | — |
| | — |
| | (42,485 | ) | Total | $ | 108,679 |
| | $ | (25,949 | ) | | $ | (15,500 | ) | | $ | (14,411 | ) | | $ | 9,950 |
| | $ | 62,769 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2014 | |
Adjusted EBITDA | | Stock-Based Compensation Expense | | Depreciation | | Amortization of Intangibles | | Acquisition-related Contingent Consideration Fair Value Adjustments | | Operating Income (Loss) | | (In thousands) | Search & Applications | $ | 91,258 |
| | $ | — |
| | $ | (5,082 | ) | | $ | (8,405 | ) | | $ | — |
| | $ | 77,771 |
| The Match Group | 69,368 |
| | (170 | ) | | (5,589 | ) | | (1,684 | ) | | (727 | ) | | 61,198 |
| Media | (8,911 | ) | | (161 | ) | | (224 | ) | | (698 | ) | | 200 |
| | (9,794 | ) | eCommerce | 4,523 |
| | — |
| | (1,896 | ) | | (2,619 | ) | | — |
| | 8 |
| Corporate | (14,806 | ) | | (16,221 | ) | | (2,466 | ) | | — |
| | — |
| | (33,493 | ) | Total | $ | 141,432 |
| | $ | (16,552 | ) | | $ | (15,257 | ) | | $ | (13,406 | ) | | $ | (527 | ) | | $ | 95,690 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2015 | |
Adjusted EBITDA | | Stock-Based Compensation Expense | | Depreciation | | Amortization of Intangibles | | Acquisition-related Contingent Consideration Fair Value Adjustments | | Operating Income (Loss) | | (In thousands) | Search & Applications | $ | 151,811 |
| | $ | — |
| | $ | (7,301 | ) | | $ | (13,895 | ) | | $ | 2,277 |
| | $ | 132,892 |
| The Match Group | 90,678 |
| | (2,669 | ) | | (13,712 | ) | | (9,778 | ) | | 12,234 |
| | 76,753 |
| Media | (30,035 | ) | | (294 | ) | | (432 | ) | | (801 | ) | | 2,435 |
| | (29,127 | ) | eCommerce | (456 | ) | | (840 | ) | | (4,070 | ) | | (2,492 | ) | | — |
| | (7,858 | ) | Corporate | (28,162 | ) | | (41,057 | ) | | (5,553 | ) | | — |
| | — |
| | (74,772 | ) | Total | $ | 183,836 |
| | $ | (44,860 | ) | | $ | (31,068 | ) | | $ | (26,966 | ) | | $ | 16,946 |
| | $ | 97,888 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2014 | |
Adjusted EBITDA | | Stock-Based Compensation Expense | | Depreciation | | Amortization of Intangibles | | Acquisition-related Contingent Consideration Fair Value Adjustments | | Operating Income (Loss) | | (In thousands) | Search & Applications | $ | 173,329 |
| | $ | — |
| | $ | (9,547 | ) | | $ | (15,674 | ) | | $ | — |
| | $ | 148,108 |
| The Match Group | 116,798 |
| | (187 | ) | | (11,389 | ) | | (3,521 | ) | | (700 | ) | | 101,001 |
| Media | (16,775 | ) | | (325 | ) | | (506 | ) | | (954 | ) | | 200 |
| | (18,360 | ) | eCommerce | 7,327 |
| | — |
| | (3,644 | ) | | (5,236 | ) | | — |
| | (1,553 | ) | Corporate | (31,152 | ) | | (25,653 | ) | | (4,989 | ) | | — |
| | — |
| | (61,794 | ) | Total | $ | 249,527 |
| | $ | (26,165 | ) | | $ | (30,075 | ) | | $ | (25,385 | ) | | $ | (500 | ) | | $ | 167,402 |
|
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