(LOSS) EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2023

The Company treats its common stock and Class B common stock as one class of stock for net earnings (loss) per share ("EPS") purposes as both classes of stock participate in earnings, dividends and other distributions on the same basis. The restricted stock award granted to our Chief Executive Officer ("CEO") on November 5, 2020 is a participating security and the Company calculates basic EPS using the two-class method since those restricted shares are unvested and have a non-forfeitable dividend right in the event the Company declares a cash dividend on common shares and participate in all other distributions of the Company in the same manner as all other IAC common shares. Diluted EPS is calculated, on the most dilutive basis, which excludes awards that would be anti-dilutive, including the restricted stock award granted to our CEO.

Undistributed earnings allocated to the participating security is subtracted from earnings in determining earnings attributable to holders of IAC common stock and Class B common stock for basic EPS. Basic EPS is computed by dividing net earnings (loss) attributable to holders of IAC common stock and Class B common stock by the weighted-average number of shares of common stock and Class B common stock outstanding during the period.

For the calculation of diluted EPS, net earnings (loss) attributable to holders of IAC common stock and Class B common stock is adjusted for the impact from our public subsidiary's dilutive securities, if applicable, and the reallocation of undistributed earnings allocated to the participating security by the weighted-average number of common stock and Class B common stock outstanding plus dilutive securities during the period.

The numerator and denominator of basic and diluted EPS computations for the Company’s common stock and Class B common stock are calculated as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands, except per share data)
Basic EPS:
Numerator:
Net (loss) earnings	$	(91,630)	$	(875,399)	$	323,689	$	(1,116,292)
Net loss attributable to noncontrolling interests	2,585		6,269		5,041		11,364
Net earnings attributed to unvested participating security	—		—		(11,296)		—
Net (loss) earnings attributable to IAC common stock and Class B common stock shareholders	$	(89,045)	$	(869,130)	$	317,434	$	(1,104,928)

Denominator:
Weighted average basic IAC common stock and Class B common stock shares outstanding(a)	83,081		86,748		84,301		86,766

(Loss) earnings per share attributable to IAC common stock and Class B common stock shareholders:
(Loss) earnings per share	$	(1.07)	$	(10.02)	$	3.77	$	(12.73)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands, except per share data)
Diluted EPS:
Numerator:
Net (loss) earnings	$	(91,630)	$	(875,399)	$	323,689	$	(1,116,292)
Net loss attributable to noncontrolling interests	2,585		6,269		5,041		11,364
Net earnings attributed to unvested participating security	—		—		(10,935)		—
Impact from public subsidiaries' dilutive securities(b)	—		—		—		—
Net (loss) earnings attributable to IAC common stock and Class B common stock shareholders	$	(89,045)	$	(869,130)	$	317,795	$	(1,104,928)

Denominator:
Weighted average basic IAC common stock and Class B common stock shares outstanding(a)	83,081		86,748		84,301		86,766
Dilutive securities(b)(c)(d)	—		—		2,889		—
Denominator for earnings per share—weighted average shares(b)(c)(d)	83,081		86,748		87,190		86,766

(Loss) earnings per share attributable to IAC common stock and Class B common stock shareholders:
(Loss) earnings per share	$	(1.07)	$	(10.02)	$	3.64	$	(12.73)

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(a) On November 5, 2020, IAC's CEO was granted a stock-based award in the form of 3.0 million shares of restricted common stock. The number of shares that ultimately vests is subject to the satisfaction of growth targets in IAC's stock price over the 10-year service condition of the award. These restricted shares have a non-forfeitable dividend right in the event the Company declares a cash dividend on its common shares and participate in all other distributions of the Company in the same manner as all other IAC common shares. Accordingly, the two-class method of calculating EPS is used. While the restricted shares are presented as outstanding shares in the balance sheet, these shares are excluded from the weighted average shares outstanding in calculating basic EPS and the allocable portion of net earnings are also excluded. Fully diluted EPS reflects the impact on earnings and fully diluted shares in the manner that is most dilutive.

(b) IAC has the option to settle certain Angi Inc. stock-based awards in its shares. The impact on net earnings relates to the settlement of Angi Inc.'s dilutive securities in IAC common shares. For the three and six months ended June 30, 2023 and 2022, these Angi Inc. equity awards were anti-dilutive.

(c) If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and subsidiary denominated equity and vesting of restricted common stock and restricted stock units ("RSUs"). For the six months ended June 30, 2023, 3.3 million potentially dilutive securities were excluded from computing diluted EPS because the impact would have been anti-dilutive.

(d) For the three months ended June 30, 2023 and for the three and six months ended June 30, 2022, the Company had a loss from operations and, as a result, approximately 8.0 million and 8.1 million potentially dilutive securities, respectively, were excluded from computing diluted EPS because the impact would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute the EPS amounts for the three months ended June 30, 2023 and for the three and six months ended June 30, 2022.