Table of Contents
As filed with the Securities and Exchange Commission on June 3, 2020

May 7, 2021
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, 20202021
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
001-39356

iaci-20210331_g1.jpg
IAC HOLDINGS, INC.IAC/INTERACTIVECORP
(Exact name of registrant as specified in its charter)
Delaware84-3727412
 (State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)
555 West 18th Street,, New York,, New York10011
(Address of registrant's principal executive offices)
(212) (212) 314-7300
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered

Common stock, par value $0.001		None.IAC
The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:
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 ☐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 ☒
As of April 30, 2021, the following shares of the registrant's common stock were outstanding:
Common Stock83,347,548 
Class B common stock5,789,499 
Total89,137,047 
☒




TABLE OF CONTENTS
Page
Number
Page
NumberPART I
3
Combined Financial Statements
3
3
Consolidated and Combined Statement of Operations
4
5
6
67
78
89
14
1615
18
Note 5—Financial Instruments and Fair Value Measurements
2116
2522
2723
24
2725
3230
3432
3533
3734
Note 13—Subsequent Event
39
4035
6257
6358
PART II
6459
6561
6664
6765
6766


Table of Contents

PART I
FINANCIAL INFORMATION
Item 1.    Consolidated and Combined Financial Statements
IAC HOLDINGS, INC.IAC/INTERACTIVECORP AND SUBSIDIARIES
COMBINEDCONSOLIDATED BALANCE SHEET
(Unaudited)
March 31, 2021December 31, 2020
(In thousands, except par value amounts)
ASSETS  
Cash and cash equivalents$3,915,548 $3,476,188 
Marketable debt securities0 224,979 
Accounts receivable, net293,350 270,453 
Other current assets175,937 147,630 
Total current assets4,384,835 4,119,250 
Building, capitalized software, leasehold improvements and equipment, net279,501 278,251 
Goodwill1,853,513 1,879,438 
Intangible assets, net387,781 405,840 
Investment in MGM Resorts International2,242,698 1,860,158 
Long-term investments306,198 297,643 
Other non-current assets281,753 294,860 
TOTAL ASSETS$9,736,279 $9,135,440 
LIABILITIES AND SHAREHOLDERS' EQUITY  
LIABILITIES:  
Accounts payable, trade$93,377 $92,173 
Deferred revenue297,580 275,093 
Accrued expenses and other current liabilities385,987 383,562 
Total current liabilities776,944 750,828 
Long-term debt, net705,987 712,277 
Income taxes payable6,590 6,444 
Deferred income taxes76,758 52,593 
Other long-term liabilities221,139 230,378 
Redeemable noncontrolling interests702,841 231,992 
Commitments and contingencies00
SHAREHOLDERS' EQUITY: 
Common Stock, $0.001 par value; authorized 1,600,000 shares; 83,342 and 82,976 shares issued and outstanding, respectively83 83 
Class B common stock, $0.001 par value; authorized 400,000 shares; 5,789 shares issued and outstanding6 6 
Additional paid-in-capital5,660,730 5,909,614 
Retained earnings1,023,170 694,042 
Accumulated other comprehensive income (loss)4,149 (6,170)
Total IAC shareholders' equity6,688,138 6,597,575 
Noncontrolling interests557,882 553,353 
Total shareholders' equity7,246,020 7,150,928 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$9,736,279 $9,135,440 
 March 31, 2020 December 31, 2019
 (In thousands)
ASSETS   
Cash and cash equivalents$2,029,071
 $839,796
Short-term investments20,000
 —
Marketable securities49,912
 —
Accounts receivable, net of allowance and reserves of $28,075 and $24,148, respectively207,581
 181,875
Note receivable—related party27,172
 55,251
Other current assets147,714
 152,334
Total current assets2,481,450
 1,229,256
    
Property, capitalized software and equipment, net of accumulated depreciation and amortization271,477
 305,414
Goodwill1,816,723
 1,616,867
Intangible assets, net of accumulated amortization452,096
 350,150
Long-term investments296,491
 347,975
Other non-current assets273,009
 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, trade90,983
 72,452
Deferred revenue215,671
 178,647
Accrued expenses and other current liabilities342,875
 320,473
Total current liabilities663,279
 585,322
    
Long-term debt, net228,643
 231,946
Income taxes payable6,076
 6,410
Deferred income taxes64,697
 44,459
Other long-term liabilities189,547
 180,307
    
Redeemable noncontrolling interests42,152
 43,818
    
Commitments and contingencies

 

    
PARENT'S EQUITY:   
Invested capital3,935,166
 2,547,251
Accumulated other comprehensive loss(17,926) (12,226)
IAC/InterActiveCorp equity in IAC Holdings, Inc. and subsidiaries3,917,240
 2,535,025
Noncontrolling interests479,612
 470,121
Total parent's equity4,396,852
 3,005,146
TOTAL LIABILITIES AND PARENT'S EQUITY$5,591,246
 $4,097,408

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

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IAC HOLDINGS, INC.IAC/INTERACTIVECORP AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended March 31,Three Months Ended March 31,
2020 2019 20212020
(In thousands) (In thousands, except per share data)
Revenue$684,124
 $641,220
Revenue$875,988 $684,124 
Operating costs and expenses:   Operating costs and expenses: 
Cost of revenue (exclusive of depreciation shown separately below)179,327
 139,848
Cost of revenue (exclusive of depreciation shown separately below)245,681 179,327 
Selling and marketing expense308,207
 303,198
Selling and marketing expense344,266 308,207 
General and administrative expense173,741
 154,451
General and administrative expense177,431 173,741 
Product development expense61,963
 44,425
Product development expense82,410 61,963 
Depreciation15,492
 11,140
Depreciation19,301 15,492 
Amortization of intangibles45,759
 22,341
Amortization of intangibles18,726 45,759 
Goodwill impairment211,973
 —
Goodwill impairment0 211,973 
Total operating costs and expenses996,462
 675,403
Total operating costs and expenses887,815 996,462 
Operating loss(312,338) (34,183)Operating loss(11,827)(312,338)
Interest expense(2,217) (3,267)Interest expense(6,680)(2,217)
Other expense, net(57,448) (5,417)
Loss before income taxes(372,003) (42,867)
Income tax benefit41,432
 29,194
Net loss(330,571) (13,673)
Net loss (earnings) attributable to noncontrolling interests2,372
 (574)
Net loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.$(328,199) $(14,247)
Unrealized gain on investment in MGM Resorts InternationalUnrealized gain on investment in MGM Resorts International382,540 0 
Other income (expense), netOther income (expense), net13,650 (57,448)
Earnings (loss) before income taxesEarnings (loss) before income taxes377,683 (372,003)
Income tax (provision) benefitIncome tax (provision) benefit(48,782)41,432 
Net earnings (loss)Net earnings (loss)328,901 (330,571)
Net loss attributable to noncontrolling interestsNet loss attributable to noncontrolling interests227 2,372 
Net earnings (loss) attributable to IAC shareholdersNet earnings (loss) attributable to IAC shareholders$329,128 $(328,199)
   
Per share information attributable to IAC Common Stock and Class B common stock shareholders:Per share information attributable to IAC Common Stock and Class B common stock shareholders:
Basic earnings (loss) per shareBasic earnings (loss) per share$3.70 $(3.86)
Diluted earnings (loss) per shareDiluted earnings (loss) per share$3.46 $(3.86)
   
Stock-based compensation expense by function:   Stock-based compensation expense by function:  
Cost of revenue$18
 $24
Cost of revenue$32 $18 
Selling and marketing expense1,276
 1,321
Selling and marketing expense1,538 1,276 
General and administrative expense33,646
 30,467
General and administrative expense18,068 33,646 
Product development expense2,241
 2,863
Product development expense3,064 2,241 
Total stock-based compensation expense$37,181
 $34,675
Total stock-based compensation expense$22,702 $37,181 
The accompanying Notes to Consolidated and Combined Financial Statements are an integral part of these statements.

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IAC HOLDINGS, INC.IAC/INTERACTIVECORP AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENT OF COMPREHENSIVE OPERATIONS
(Unaudited)
Three Months Ended March 31,
 20212020
 (In thousands)
Net earnings (loss)$328,901 $(330,571)
Other comprehensive income (loss), net of income taxes:
Change in foreign currency translation adjustment11,017 (6,630)
Change in unrealized gains and losses on available-for-sale marketable debt securities(2)(12)
Total other comprehensive income (loss), net of income taxes11,015 (6,642)
Comprehensive income (loss), net of income taxes339,916 (337,213)
Components of comprehensive (income) loss attributable to noncontrolling interests:
Net loss attributable to noncontrolling interests227 2,372 
Change in foreign currency translation adjustment attributable to noncontrolling interests(691)979 
Comprehensive (income) loss attributable to noncontrolling interests(464)3,351 
Comprehensive income (loss) attributable to IAC shareholders$339,452 $(333,862)
 Three Months Ended March 31,
 2020 2019
 (In thousands)
Net loss$(330,571) $(13,673)
Other comprehensive (loss) income, net of income taxes:   
Change in foreign currency translation adjustment(6,630) 2,088
Change in unrealized gains and losses on available-for-sale marketable debt securities(12) (3)
Total other comprehensive (loss) income, net of income taxes(6,642) 2,085
Comprehensive loss, net of income taxes(337,213) (11,588)
Components of comprehensive loss (income) attributable to noncontrolling interests:   
Net loss (earnings) attributable to noncontrolling interests2,372
 (574)
Change in foreign currency translation adjustment attributable to noncontrolling interests979
 (463)
Change in unrealized gains and losses of available-for-sale marketable debt securities attributable to noncontrolling interests—
 (1)
Comprehensive loss (income) attributable to noncontrolling interests3,351
 (1,038)
Comprehensive loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.$(333,862) $(12,626)



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

5
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IAC/INTERACTIVECORP AND SUBSIDIARIES
IAC HOLDINGS, INC.CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Three months ended March 31, 2021
(Unaudited)
  IAC Shareholders' Equity  
 Redeemable
Noncontrolling
Interests		Common Stock, $0.001 par valueClass B common stock, $0.001 par valueAdditional Paid-in-CapitalRetained EarningsAccumulated
Other
Comprehensive
(Loss) Income		Total IAC
Shareholders' Equity		Noncontrolling
Interests		Total Shareholders' Equity
 $Shares$Shares
  (In thousands) 
Balance as of December 31, 2020$231,992 $83 82,976$6 5,789 $5,909,614 $694,042 $(6,170)$6,597,575 $553,353 $7,150,928 
Net (loss) earnings(673)— ——— — 329,128 — 329,128 446 329,574 
Other comprehensive income, net of income taxes580 — ——— — — 10,324 10,324 111 10,435 
Stock-based compensation expense— — ——— 20,668 — — 20,668 2,542 23,210 
Issuance of common stock pursuant to stock-based awards, net of withholding taxes— — 366—— (21,135)— — (21,135)— (21,135)
Issuance of Angi Inc. common stock pursuant to stock-based awards, net of withholding taxes— — ——— (49,476)— (5)(49,481)1,430 (48,051)
Purchase of Angi Inc. treasury stock— — ——— (4,916)— — (4,916)— (4,916)
Issuance of Vimeo common stock and creation of noncontrolling interest, net of fees40,785 — ——— 258,965 — — 258,965 — 258,965 
Purchase of noncontrolling interests(22,938)— ——— — — — — — — 
Adjustment of noncontrolling interests to fair value453,099 — — — — (453,099)— — (453,099)— (453,099)
Other(4)— — — — 109 — — 109 — 109 
Balance as of March 31, 2021$702,841 $83 83,342 $6 5,789 $5,660,730 $1,023,170 $4,149 $6,688,138 $557,882 $7,246,020 


The accompanying Notes to Consolidated and Combined Financial Statements are an integral part of these statements.
6
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IAC/INTERACTIVECORP AND SUBSIDIARIES
COMBINED STATEMENT OF PARENT'S EQUITY
Three Months Ended March 31, 2020 and 2019
(Unaudited)
  Old IAC Equity in  
  IAC/InterActiveCorp  
   Accumulated
Other
Comprehensive
Loss		Total Old IAC
Equity in IAC/InterActiveCorp		  
 Redeemable
Noncontrolling
Interests		Invested CapitalNoncontrolling
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 taxes99 — (5,663)(5,663)(1,078)(6,741)
Stock-based compensation expense15 11,389 — 11,389 22,211 33,600 
Purchase of redeemable noncontrolling interests(3,165)— — — — — 
Adjustment of redeemable noncontrolling interests to fair value2,418 (2,418)— (2,418)— (2,418)
Issuance of Angi Inc. common stock pursuant to stock-based awards, net of withholding taxes— 6,996 (37)6,959 (10,302)(3,343)
Purchase of Angi Inc. treasury stock— (38,971)— (38,971)— (38,971)
Net increase in Old IAC's investment in IAC Holdings, Inc.— 1,739,118 — 1,739,118 — 1,739,118 
Other(1)0 — 0 0 0 
Balance as of March 31, 2020$42,152 $3,935,166 $(17,926)$3,917,240 $479,612 $4,396,852 
(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 taxes99
  —
 (5,663) (5,663) (1,078) (6,741)
Stock-based compensation expense15
  11,389
 —
 11,389
 22,211
 33,600
Purchase of redeemable noncontrolling interests(3,165)  —
 —
 —
 —
 —
Adjustment of redeemable noncontrolling interests to fair value2,418
  (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 taxes186
  —
 1,621
 1,621
 278
 1,899
Stock-based compensation expense42
  15,393
 —
 15,393
 19,240
 34,633
Purchase of redeemable noncontrolling interests(3,182)  —
 —
 —
 —
 —
Adjustment of redeemable noncontrolling interests to fair value10,242
  (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 Consolidated and Combined Financial Statements are an integral part of these statements.




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IAC HOLDINGS, INC.IAC/INTERACTIVECORP AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,Three Months Ended March 31,
2020 2019 20212020
(In thousands) (In thousands)
Cash flows from operating activities:   Cash flows from operating activities:  
Net loss$(330,571) $(13,673)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Net earnings (loss)Net earnings (loss)$328,901 $(330,571)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: 
Stock-based compensation expense37,181
 34,675
Stock-based compensation expense22,702 37,181 
Amortization of intangibles45,759
 22,341
Amortization of intangibles18,726 45,759 
Depreciation15,492
 11,140
Depreciation19,301 15,492 
Bad debt expense19,929
 15,009
Provision for credit lossesProvision for credit losses19,391 19,929 
Goodwill impairment211,973
 —
Goodwill impairment0 211,973 
Deferred income taxes(13,759) (29,945)Deferred income taxes47,196 (13,759)
Losses on equity securities, net51,473
 240
Unrealized gain on investment in MGM Resorts InternationalUnrealized gain on investment in MGM Resorts International(382,540)0 
(Gains) losses on long-term investments in equity securities, net(Gains) losses on long-term investments in equity securities, net(1,457)51,473 
Other adjustments, net10,354
 12,105
Other adjustments, net(6,189)10,354 
Changes in assets and liabilities, net of effects of acquisitions and dispositions:

  Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable(27,216) (40,270)Accounts receivable(42,789)(27,216)
Other assets310
 4,682
Other assets11,679 310 
Accounts payable and other liabilities(7,971) (31,821)Accounts payable and other liabilities(8,462)(7,971)
Income taxes payable and receivable1,564
 1,107
Income taxes payable and receivable(929)1,564 
Deferred revenue24,653
 17,004
Deferred revenue28,342 24,653 
Net cash provided by operating activities39,171
 2,594
Net cash provided by operating activities53,872 39,171 
Cash flows from investing activities:   Cash flows from investing activities:
Acquisitions, net of cash acquired(532,857) (21,555)Acquisitions, net of cash acquired0 (532,857)
Capital expenditures(14,810) (15,924)Capital expenditures(20,352)(14,810)
Proceeds from maturities of marketable debt securities—
 25,000
Proceeds from maturities of marketable debt securities225,000 0 
Net proceeds from the sale of businesses and investments1,476
 20,276
Purchases of investmentsPurchases of investments(7,180)0 
Decrease in notes receivable—related party27,691
 —
Decrease in notes receivable—related party0 27,691 
Other, net(110) (2,137)Other, net7,551 1,366 
Net cash (used in) provided by investing activities(518,610) 5,660
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities205,019 (518,610)
Cash flows from financing activities:   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)
Principal payments on ANGI Group Term LoanPrincipal payments on ANGI Group Term Loan(6,875)(3,438)
Proceeds from issuance of Vimeo common stock, net of feesProceeds from issuance of Vimeo common stock, net of fees299,750 0 
Debt issuance costsDebt issuance costs(1,440)0 
Purchase of Angi Inc. treasury stockPurchase of Angi Inc. treasury stock(4,916)(38,512)
Proceeds from the exercise of IAC stock optionsProceeds from the exercise of IAC stock options1,471 0 
Withholding taxes paid on behalf of IAC employees on net settled stock-based awardsWithholding taxes paid on behalf of IAC employees on net settled stock-based awards(22,997)0 
Withholding taxes paid on behalf of Angi Inc. employees on net settled stock-based awardsWithholding taxes paid on behalf of Angi Inc. employees on net settled stock-based awards(48,168)(3,222)
Purchase of noncontrolling interests(3,165) (3,182)Purchase of noncontrolling interests(22,938)(3,165)
Transfers from (to) IAC/InterActiveCorp1,720,618
 (38,856)
Transfers from Old IAC for periods prior to the MTCH SeparationTransfers from Old IAC for periods prior to the MTCH Separation0 1,720,618 
Other, net(465) —
Other, net526 (465)
Net cash provided by (used in) financing activities1,671,816
 (63,947)
Total cash provided (used)1,192,377
 (55,693)
Net cash provided by financing activitiesNet cash provided by financing activities194,413 1,671,816 
Total cash providedTotal cash provided453,304 1,192,377 
Effect of exchange rate changes on cash and cash equivalents and restricted cash(2,897) 325
Effect of exchange rate changes on cash and cash equivalents and restricted cash(93)(2,897)
Net increase (decrease) in cash and cash equivalents and restricted cash1,189,480
 (55,368)
Net increase in cash and cash equivalents and restricted cashNet increase in cash and cash equivalents and restricted cash453,211 1,189,480 
Cash and cash equivalents and restricted cash at beginning of period840,732
 886,836
Cash and cash equivalents and restricted cash at beginning of period3,477,110 840,732 
Cash and cash equivalents and restricted cash at end of period$2,030,212
 $831,468
Cash and cash equivalents and restricted cash at end of period$3,930,321 $2,030,212 

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

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IAC HOLDINGS, INC.IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED & COMBINED FINANCIAL STATEMENTS
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NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SeparationMTCH Separation:
On December 19, 2019, IAC/InterActiveCorp ("Old IAC") entered into a Transaction Agreement (as amended, as of April 28, 2020, the "Transaction Agreement") with Match Group, Inc. ("Old MTCH"), IAC Holdings, Inc., a direct wholly owned subsidiary of IAC ("New IAC" or the "Company"), a direct wholly-owned subsidiary of Old IAC, and Valentine Merger Sub LLC, an indirect wholly ownedwholly-owned subsidiary of Old IAC. Subject to the terms and conditions set forth in the Transaction Agreement, if the transactions contemplated by the Transaction Agreement are consummated,On June 30, 2020, the businesses of Old MTCH were separated from the remaining businesses of Old IAC through a series of transactions that resulted in the pre-transaction stockholders of Old IAC owning shares in two, separate public companies—(1) Old IAC, which was renamed Match Group, Inc. ("New Match") and which owns the businesses of Old MTCH and certain Old IAC financing subsidiaries, and (2) New IAC, which was renamed IAC/InterActiveCorp, and which owns Old IAC's other businesses—and the pre-transaction stockholders of Old MTCH (other than Old IAC) owning shares in New Match. This transaction is referred to as the "MTCH Separation."
Spin-off:
On December 22, 2020, IAC announced that its Board of Directors approved a plan to spin-off its full stake in Vimeo to IAC shareholders. IAC's Vimeo business will be separated from the remaining businesses of IAC through a series of transactions (which we refer to as the "Spin-off") that, if completed in their entirety, will result in the pre-transaction stockholderstransfer of IAC's Vimeo business to Vimeo Holdings, Inc. ("SpinCo"), a wholly-owned subsidiary of IAC, owning shares in two, separatewith SpinCo becoming an independent, separately traded public companies—(1)company through a spin-off from IAC, whichand Vimeo, Inc., the IAC subsidiary that currently holds the Vimeo business, becoming a wholly-owned subsidiary of SpinCo. In connection with the foregoing, SpinCo will be renamed Match Group,as Vimeo, Inc. ("New Match") and which will own the businesses of MTCH and certain IAC financing subsidiaries, and (2) New IAC, whichVimeo 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,as Vimeo.com, Inc. The proposed transaction is subject to a number of conditions including final approval by a majorityIAC's Board of Directors, approval of the disinterested shareholders of MTCH, approval of IAC’s shareholdersseparation proposal by IAC stockholders, and other customary conditions and approvals. This transactionapprovals and is referredexpected to as the "Separation".close pre-market on May 25, 2021.
Nature of Operations
The Company operates Vimeo, Dotdash and Care.com, among many others, and has majority ownership of Angi Inc. (formerly ANGI Homeservices Inc.), which includes HomeAdvisor, Angi (formerly Angie's List) and Handy.
Basis of Presentation
As used herein, "IAC," the "Company," "we," "our" or "us" and Combinationsimilar terms refer to IAC/InterActiveCorp and its subsidiaries (unless the context requires otherwise).
In connectionThe Company prepares its consolidated and combined financial statements (collectively referred to herein as "financial statements") in accordance with U.S. generally accepted accounting principles ("GAAP").
The Company's financial statements were prepared on a consolidated basis beginning June 30, 2020 and on a combined basis for periods prior thereto. The difference in presentation is due to 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 withfact that the Separation. In contemplationfinal steps of the Separation: (1) effective January 1, 2020,legal reorganization, including the contribution to New IAC of all employeesthe entities that comprise the Company following the MTCH Separation, were not completed until June 30, 2020. The preparation 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".on a combined basis for periods prior to June 30, 2020 allows for the financial statements to be presented on a consistent basis for all periods presented.
The historical combined financial statements of IAC Holdings, Inc. and the businesses comprising New IACCompany have been derived from the consolidated financial statements andhistorical accounting records of Old IAC. The combined financial statements reflect the historical financial position, results of operations and cash flows of IAC Holdings, Inc. and the businessesentities comprising New IACthe Company since their respective dates of acquisition by Old IAC and the allocation to New IACthe Company of certain Old IAC corporate expenses relating to New IAC based on the historical financial statements and accounting records of IAC.Old IAC through June 30, 2020. The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. For the purpose of thesethe combined financial statements, income taxes have been computed as if the entities comprising New IACthe Company filed tax returns on a standalone, separate basis. The financial statements have been prepared on a combined, rather than consolidated, basis asfor periods prior to the final stepsMTCH Separation.
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Table 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.Contents
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).IAC/INTERACTIVECORP AND SUBSIDIARIES
The Company prepares its combined financial statements in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’).NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
All intercompany transactions and balances between and among the Company and the entities comprising the Companyits subsidiaries have been eliminated. All intercompany transactions between (i) New IACthe Company and (ii) Old IAC and its subsidiaries for periods prior to the MTCH Separation 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 sheetstatement of parent's equity as ‘‘Invested capital.’’"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 Old IAC, are reasonable. However, the allocations may not reflect the expenses that we maythe Company would have incurred as an independent, stand-alone company for the periods presented.

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NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
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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.Commission ("SEC"). Accordingly, they do not include all of the information and notes required by GAAP for complete annual 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 included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.2020.
COVID-19 Update and Impairments
The Company's business could be materially and adversely affected byimpact on the Company from the COVID-19 outbreak, of COVID-19, which has been declared a "pandemic" by the World Health Organization.
Through March 31, 2020, the Company's ANGI Homeservices businessOrganization, 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)been varied 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.
volatile. 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 speedcontinuing spread of contagion,COVID-19, the development and implementation of effective preventative measures (including the global distribution of vaccines) and possible treatments, the scope of governmental and other restrictions on travel, non-essentialdiscretionary 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,for certain of our businesses, as well as significant uncertainty concerning the nearnear- and long termlong-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.
NatureWhen COVID-19 first impacted the businesses in IAC's Angi Inc. segment in March 2020, these businesses experienced a decline in demand for service requests, driven primarily by decreases in demand in certain categories of Operationsjobs (particularly discretionary indoor projects). During the second quarter of 2020, these businesses experienced a rebound in service requests, exceeding pre-COVID-19 growth levels, driven by increased demand from homeowners who spent more time at home due to measures taken to reduce the spread of COVID-19. These businesses continued to experience strong demand for home services in the second half of 2020 and the first quarter of 2021. However, many service professionals' businesses have been adversely impacted by labor and material constraints and many service professionals have limited capacity to take on new business, which has negatively impacted the ability of these businesses to monetize this increased level of service requests. Vimeo has seen strong revenue growth as the demand for communication via video has increased due to the pandemic. The Search segment has experienced an increase in revenue in the first quarter of 2021 compared to the prior year due, in part, to lower advertising rates in 2020 due to the impact of COVID-19. COVID-19 impacted our businesses in varied ways in the year ended December 31, 2020. Accordingly, the volatile nature of our operating results in 2020 will impact the comparability of our year-over-year results 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.

There were 0 impairments identified during the quarter ended March 31, 2021.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
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ANGI Homeservices
Our ANGI Homeservices segment includesIn 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’’). Atquarter ended March 31, 2020, the Company’s economic interestCompany determined that the effects of COVID-19 were an indicator of possible impairment for certain of its assets and voting interestidentified the following impairments:
•a $212.0 million impairment related to the goodwill of the Desktop reporting unit (included in ANGI were 84.9%the Search segment);
•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 98.3%, respectively.
ANGI Homeservices Inc. connects quality home service professionals across 500 different categories, from repairing•a $7.5 million impairment of a note receivable and remodelinga warrant related 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.certain investees.
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 inIn addition, 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 onerepresents 80% of the largest and most popular application portfolios worldwide. iTranslate develops and distributes someCompany's revenue for the three months ended March 31, 2021 experienced another resurgence of the world’s most downloaded mobile translation applications, enabling users to read, write, speakCOVID-19 virus. Europe, which is the second largest market for the Company's products and learn foreign languages anywhereservices, has also seen a resurgence in COVID-19. This resurgence of COVID-19 and the world. TelTech develops and distributes unique and innovative mobile communications applications that help protect consumer privacy.

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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,measures designed to meet the evolving needscurb COVID-19's spread could materially and adversely affect our business, financial condition and results 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.operations.
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, judgments and judgments,assumptions, including those related to: the fair values of cash equivalents and marketable debt and equity securities; the carrying value of accounts receivable, including the determination of the allowance for doubtful accounts;credit losses and the determination of revenue reserves; the determination of the customer relationship period for certain costs to obtain a contract with a customer; the carrying value of right-of-use assets ("ROU assets"); the useful lives and recoverability of building, capitalized software, leasehold improvements and equipment and definite-lived intangible assets and property, capitalized software and equipment;assets; 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, judgments and judgmentsassumptions on historical experience, its forecasts and budgets and other factors that the Company considers relevant.

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NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Accounting for Investments in Equity Securities
Investments in equity securities, other than those of the Company's combinedconsolidated 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 - 4—Financial Instruments and Fair Value Measurements" for additional information on the impairments of certain equity securities without readily determinable fair values recorded induring the quarterthree months ended March 31, 2020.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
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, 20202021 and December 31, 2019,2020, the Company did not have any investmentshas 1 investment 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.

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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 contractcontract-by-contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the remaining term of the applicable subscription period or expected completion of the Company'sits performance obligation is one year or less. The current and non-current deferred revenue balances are $275.1 million and $1.5 million, respectively, at December 31, 2019 are2020, and $178.6 million and $1.3 million, respectively.respectively, at December 31, 2019. During the three months ended March 31, 2021, the Company recognized $131.8 million of revenue that was included in the deferred revenue balance as of December 31, 2020. 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 are $297.6 million and $1.6 million, at March 31, 2020 are $215.7 million and $1.3 million,2021, respectively. Non-current deferred revenue is included in “Other"Other long-term liabilities”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 Companyit has the right to invoice for services performed.
Assets Recognized from the Costs to Obtain a Contract with a Customer
The Company has determined that certain costs, primarily commissions paid to employees pursuant to certain sales incentive programs and mobile app store fees, meet the requirements to be capitalized as a cost of obtaining a contract. Commissions paid to employees pursuant to certain sales incentive programs are amortized over the estimated customer relationship period. The Company calculates the estimated customer relationship period as the average customer life, which is based on historical data. When customer renewals are expected and the renewal commission is not commensurate with the initial commission, the average customer life includes renewal periods. 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 amountCompany generally capitalizes and amortizes mobile app store fees over the term of the applicable subscription.
The current and non-current capitalized sales commissions wherecosts to obtain a contract with a customer are included in "Other current assets" and "Other non-current assets" in the customer relationship period is greater than one year is $47.5accompanying balance sheet and are $61.6 million and $42.4$10.0 million, and $61.5 million and $9.3 million, at March 31, 20202021 and December 31, 2019,2020, 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 debt19,193
Write-offs charged against the allowance(16,528)
Recoveries collected736
Balance at March 31$23,658
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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.IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
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 (and a substantial portion of IAC's net cash from operations that it can freely access) 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, 20202021 and 2019,2020, total revenue earned from Google was $138.9$171.8 million and $195.8$138.9 million, respectively, representing 20% of the Company's revenue for both periods. The related accounts receivable totaled $66.2 million and 31%$61.9 million at March 31, 2021 and December 31, 2020, respectively.
The total revenue earned from the Services Agreement for the three months ended March 31, 2021 and 2020 was $152.5 million and $126.6 million, respectively, representing 17% and 19%, respectively, of the Company's combinedtotal revenue. Accounts receivable related to
The revenue earned from Google totaled $48.7 million and $53.0 million at March 31, 2020 and December 31, 2019, respectively.

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NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
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Revenue attributable to the Services Agreement is earned by the Desktop business within the Applications segment and by the Ask Media Group, both within the Search segment. For the three months ended March 31, 20202021 and 2019,2020, revenue earned from the Services Agreement was $46.1$31.0 million and $88.1$46.1 million, respectively, within the Applications segmentDesktop business and $121.4 million and $80.5 million, and $94.8 million, respectively, within the Ask Media Group segment.Group.
The current Services Agreement was scheduled to expireexpires 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 comparableNeither party gave notice to the pre-amendment agreement with Google.other party to terminate the Services Agreement pursuant to this provision in September 2020. 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 have in the past and could in turnthe future require modifications to, or prohibit and/or render obsolete certain of the Company'sour products, services and/or business practices, which have been and could be costly to address and have had or otherwise could have an adverse effect on the Company's combinedour financial condition and results of operations, particularly the Desktop business and Ask Media Group. From time to time,operations. As described below, 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 Googleit may do so in the future.
AdoptionCertain industry-wide policy changes became effective on August 27, 2020. These industry-wide changes, combined with increased enforcement of Newpolicies under the Services Agreement, have had a negative impact on the results of operations of Desktop's business-to-consumer ("B2C") business. In addition, at multiple times during the fourth quarter of 2020, Google suspended services with respect to some of Desktop's B2C products and may do so in the future. As a result, the Desktop B2C business elected to modify certain marketing strategies in early January 2021. Subsequently, Google informed us of another policy change in the first quarter of 2021 that is scheduled to go into effect on May 10, 2021. This Google policy change may eliminate our ability to successfully introduce and market new products that would be profitable at scale. Therefore, the Desktop B2C business substantially reduced marketing in early March 2021 and effectively eliminated all marketing of its B2C products by the end of the first quarter of 2021. This reduction in marketing will positively impact profitability in 2021 but will substantially reduce revenue in 2021. Beyond 2021, the revenue from the installed base of products will decline precipitously. In response, we have undertaken cost reduction measures to maintain a very modest level of profitability.
The reduction in revenue and profitability during the three months ended March 31, 2020 due, in part, to Google policy changes implemented in the second half of 2019 was the primary factor in the goodwill and indefinite-lived intangible asset impairments related to the Desktop business recorded in the three months ended March 31, 2020 of $212.0 million and $21.4 million, respectively. The impact of COVID-19 was an additional factor.
Recent Accounting Pronouncements
Adoption of ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
The CompanyThere are no recently issued accounting pronouncements that have not yet been adopted ASU No. 2016-13effective 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 onthat are 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 notto have a material impacteffect on the Company's combinedresults of operations, 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 aspectscondition or cash flows of the Company.
Reclassifications
Certain prior year amounts have been reclassified to conform to 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 adoptionyear presentation.
13
Table of ASU No. 2019-12 did not have a material impact on the Company's combined financial statements.Contents
IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 2—INCOME TAXES
The Company iswas included within Old IAC’s tax group for purposes of federal and consolidated state income tax return filings. In allfilings through June 30, 2020, the date of the MTCH Separation. For periods presented, current and deferredprior thereto, the income tax benefit/provision have beenwere computed for the entities comprising the Company on an as if standalone, separate return basis and payments to and refunds from Old IAC for the Company’s share of Old 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 statementsstatement 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.

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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 forFor the three months ended March 31, 2019. We determined that since small changes in estimated ordinary2021, the Company recorded an 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 programsprovision of $48.8 million, due primarily to support companies affectedexcess tax benefits generated by the COVID-19 pandemicexercise and their employees. Based on the Company's preliminary analysisvesting 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 payrollstock-based awards, partially offset by state 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.awards, partially offset by the non-deductible portion of the Desktop goodwill impairment.
UponAs a result of the MTCH Separation, the Company will be allocated a portion ofCompany's net deferred tax liability was adjusted via invested capital for tax attributes relatedallocated to the IACit from Old IAC's 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.filings. The final allocation of tax attributes and resultingthat was recorded as of June 30, 2020 was preliminary. Any subsequent adjustment to the Company’sallocated tax attributes will be recorded as an adjustment to deferred taxes willand additional paid-in capital. This adjustment is expected to 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 groupmade in the fourth quarter of 2021 following the filing of income tax returns for the year of the Separation.ended December 31, 2020.
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.

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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.Old IAC and will be under audit for its tax returns filed on a standalone basis following the MTCH Separation. 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 Old IAC’s federal income tax returns for the years ended December 31, 2010 through 2016,2017, 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.Company. 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 has2017 have been extended to MarchMay 31, 2021.2021 and June 30, 2022, respectively. 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 the 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.
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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
At March 31, 20202021 and December 31, 2019,2020, unrecognized tax benefits, including interest and penalties, are $16.7$23.4 million and $20.3$22.1 million, respectively. Unrecognized tax benefits, including interest and penalties, at March 31, 2020 decreased2021 increased by $3.6$1.3 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, 20202021 are subsequently recognized, $15.3$21.4 million, net of related deferred tax assets and interest, would reduce income tax expense. The comparable amount as of December 31, 20192020 was $18.9$20.4 million. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $6.4$6.3 million by March 31, 2021,2022, due primarily to expirations of statutes of limitations andor other settlements, $6.2settlements; $6.0 million of which would reduce the income tax provision.
NOTE 3—BUSINESS COMBINATION
Care.com
On February 11, 2020, IACthe Company acquired 100% of Care.com, athe leading global platformonline destination for finding and managing family care,families to easily connect with caregivers, for a total purchase price of $627.5$626.9 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$40.0 million paid by Care.com prior to the completion of the acquisition. The Company'sDuring the first quarter of 2021, the Company completed the purchase accounting is not yet complete, includingfor 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 includedacquisition, which resulted 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 revenuegoodwill of $8.7 million due to the write-off of deferred revenue$21.7 million. The primary adjustment was related to the acquisition and $4.8 million in transaction-related costs, including severance.completion of the assessment of acquired tax attributes.
The table below summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

Care.com
(In thousands)
Cash and cash equivalents$57,702 
Short-term investments20,000 
Accounts receivable20,202 
Other current assets7,479 
Property and equipment2,894 
Goodwill382,587 
Intangible assets116,800 
Deferred income taxes28,394 
Other non-current assets30,444 
Total assets666,502 
Deferred revenue(13,422)
Other current liabilities(39,894)
Other non-current liabilities(26,212)
Net assets acquired$586,974 
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IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

 Care.com
 (In thousands)
Cash and cash equivalents$57,873
Short-term investments20,000
Accounts receivable20,292
Other current assets5,678
Property and equipment2,894
Goodwill416,869
Intangible assets145,300
Other non-current assets26,852
Total assets695,758
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

IACThe Company 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$59,300 Indefinite
Developed technology21,200 2
Customer relationships35,500 2 - 5
Provider relationships800 4
    Total identifiable intangible assets acquired$116,800 
 Care.com
 (In thousands) Useful Life
(Years)
Indefinite-lived trade name and trademarks$59,400
 Indefinite
Developed technology49,700
 5
Customer relationships35,400
 2 - 7
Provider relationships800
 4
    Total identifiable intangible assets acquired$145,300
 
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OtherIAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Accounts receivable, 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 value of deferred revenue was determined using an income approach that utilized a cost to fulfill analysis. 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.

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TableThe financial results of Contents
IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Care.com are included in the Company's 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 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 due to purchase accounting fair value adjustments and $4.8 million in transaction-related costs, including severance.
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)

Three Months Ended March 31,
2020
(In thousands except per share data)
Revenue$718,763 
Net loss attributable to IAC shareholders$(320,955)
Basic and diluted loss per share attributable to IAC shareholders$(3.77)
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 lives259,254
 225,296
Intangible assets with definite lives, net of accumulated amortization192,842
 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
Vimeo219,374
 —
 (38) —
 —
 219,336
Applications:           
     Desktop265,146
 —
 —
 (211,973) —
 53,173
     Mosaic Group239,602
 —
 —
 —
 (134) 239,468
Total Applications504,748
 —
 —
 (211,973) (134) 292,641
Emerging & Other8,449
 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).

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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
Vimeo77,152
 142,222
 —
 —
 —
 219,374
Applications:           
     Desktop265,146
 —
 —
 —
 —
 265,146
     Mosaic Group239,746
 —
 —
 —
 (144) 239,602
Total Applications504,892
 —
 —
 —
 (144) 504,748
Emerging & Other7,002
 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).

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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 relationships99,850
 (83,560) 16,290
 3.0
Customer lists and user base79,510
 (26,548) 52,962
 4.0
Trade names17,279
 (10,955) 6,324
 2.8
Memberships15,900
 (13,264) 2,636
 3.0
Other11,099
 (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 relationships99,651
 (76,445) 23,206
 2.9
Customer lists and user base44,286
 (24,226) 20,060
 3.3
Trade names12,777
 (8,082) 4,695
 3.5
Memberships15,900
 (11,940) 3,960
 3.0
Other10,439
 (7,278) 3,161
 3.4
Total$326,308
 $(201,454) $124,854
 3.7

At March 31, 2020, amortization of intangible assets with definite lives is estimated to be as follows:

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

 (In thousands)
Remainder of 2020$59,436
202144,154
202239,141
202329,555
202415,391
Thereafter5,165
Total$192,842


NOTE 5—FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Marketable Debt Securities
At March 31, 2020, the fair value of marketable securities are as follows:
 March 31, 2020
 (In thousands)
Available-for-sale marketable debt securities$49,912
     Total marketable securities$49,912

The Company did 0tnot hold any marketable debt securities at DecemberMarch 31, 2019.2021.
At MarchDecember 31, 2020, current available-for-sale marketable debt securities are as follows:
 Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Fair Value
 (In thousands)
Treasury discount notes$49,924
 $—
 $(12) $49,912
Total available-for-sale marketable debt securities$49,924
 $—
 $(12) $49,912

Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
 (In thousands)
Treasury discount notes$224,976 $3 $0 $224,979 
Total available-for-sale marketable debt securities$224,976 $3 $0 $224,979 
The contractual maturities of debt securities classified as current available-for-sale at MarchDecember 31, 2020 arewere within one year. There arewere 0 investments in available-for-sale marketable debt securities that havehad been in a continuous unrealized loss position for longer than twelve months as of MarchDecember 31, 2020.
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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Investment in MGM Resorts International
 March 31, 2021December 31, 2020
 (In thousands)
Investment in MGM Resorts International ("MGM")$2,242,698 $1,860,158 
During the second and third quarters of 2020, the Company purchased a total of 59.0 million shares of MGM. The fair value of the investment in MGM is remeasured each reporting period based upon MGM's closing stock price on the New York Stock Exchange on the last trading day in the reporting period and any unrealized gains or losses are included in the accompanying statement of operations. For the three months ended March 31, 2021, the Company recognized an unrealized gain of $382.5 million on its investment in MGM.
Long-term Investments
Long-term investments consists of:
March 31, 2021December 31, 2020
(In thousands)
Equity securities without readily determinable fair values$303,083 $296,491 
Equity method investment3,115 1,152 
Total long-term investments$306,198 $297,643 
Equity Securities Withoutwithout Readily Determinable Fair Values
At March 31, 2020The following table presents a summary of unrealized gains and December 31, 2019,losses recorded in "Other income (expense), net," as adjustments to the carrying valuesvalue of the Company's investments in equity securities without readily determinable fair values totaled $296.5 millionheld as of March 31, 2021 and $348.0 million, respectively, and are included in "Long-term investments" in the accompanying combined balance sheet. 2020.
Three Months Ended March 31,
20212020
(In thousands)
Upward adjustments (gross unrealized gains)$1,376 $0 
Downward adjustments including impairments (gross unrealized losses)0 (51,484)
Total$1,376 $(51,484)
During the first quarter of 2020, the Company recorded unrealized impairments of $51.5 million related to certain equity securities without readily determinable fair values due to the impact of COVID-19. All gains and losses on equity securities without readily determinable fair values, realized and unrealized, are recognized in "Other expense,income (expense), net" in the accompanying combined statement of operations.
The following table presents a summary of unrealized gains and losses recorded in "Other expense, net," as adjustments to the carrying value of equity securities without readily determinable fair values held as of March 31, 2020 and 2019.

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

 Three Months Ended March 31,
 2020 2019
 (In thousands)
Upward adjustments (gross unrealized gains)$—
 $—
Downward adjustments including impairment (gross unrealized losses)(51,484) (150)
Total$(51,484) $(150)

The cumulative upward and downward adjustments (including impairments) to the carrying value of equity securities without readily determinable fair values held at March 31, 20202021 were $19.7$21.1 million and $52.0$43.5 million, respectively.
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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Realized and unrealized gains and losses for the Company's marketable equity securities and investments without readily determinable fair values for the three months ended March 31, 20202021 and 20192020 are as follows:
Three Months Ended March 31,
20212020
(In thousands)
Realized gains net, for equity securities sold$81 $12 
Unrealized gains (losses), net, on equity securities held1,376 (51,484)
Total gains (losses), net recognized$1,457 $(51,472)
 Three Months Ended March 31,
 2020 2019
 (In thousands)
Realized gains (losses), net, for equity securities sold$12
 $(118)
Unrealized losses, net, on equity securities held(51,484) (122)
Total losses, net recognized in other expense, net$(51,472) $(240)
Equity Method Investment

During the fourth quarter of 2020 and first quarter of 2021, the Company acquired 0.3 million and 0.5 million common shares, respectively, of Turo Inc. ("Turo"), a peer-to-peer car sharing marketplace, for approximately $1.1 million and $2.0 million, respectively. This investment is accounted for under the equity method of accounting on a one quarter lag, given the Company's preexisting ownership interest of approximately 27.1% on a fully diluted basis in the form of preferred shares, which are not common stock equivalents.
Fair Value Measurements
The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:
•Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets.
•Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company's Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.
•Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities.
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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following tables present the Company's financial instruments that are measured at fair value on a recurring basis:
 March 31, 2021
 Quoted Market
Prices for
Identical Assets in Active
Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
Fair Value
Measurements
 (In thousands)
Assets:    
Cash equivalents:    
Money market funds$3,233,953 $0 $0 $3,233,953 
Treasury discount notes0 274,999 0 274,999 
Time deposits0 1,723 0 1,723 
Investment in MGM2,242,698 0 0 2,242,698 
Other non-current assets:
Warrant0 0 18,051 18,051 
Total$5,476,651 $276,722 $18,051 $5,771,424 
Liabilities:
Contingent consideration arrangement$0 $0 

22
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IAC HOLDINGS, INC.IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

 March 31, 2020
 
Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Fair Value
Measurements
 (In thousands)
Assets:       
Cash equivalents:       
Money market funds$1,597,511
 $—
 $—
 $1,597,511
Treasury discount notes—
 99,882
 —
 99,882
Time deposits—
 42,809
 —
 42,809
Short-term investments—
 20,000
 —
 20,000
Marketable securities:       
Treasury discount notes—
 49,912
 —
 49,912
Other non-current assets:       
Warrant—
 —
 6,489
 6,489
Total$1,597,511
 $212,603
 $6,489
 $1,816,603
        
Liabilities:       
Contingent consideration arrangement$—
 $—
 $(636) $(636)
 December 31, 2019
 
Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Fair Value
Measurements
 (In thousands)
Assets:       
Cash equivalents:       
Money market funds$699,589
 $—
 $—
 $699,589
Time deposits—
 23,075
 —
 23,075
Other non-current assets:       
Warrant—
 —
 8,495
 8,495
Total$699,589
 $23,075
 $8,495
 $731,159
        
Liabilities:       
Contingent consideration arrangement$—
 $—
 $(6,918) $(6,918)

 December 31, 2020
 Quoted Market
Prices for
Identical Assets in Active Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
Fair Value
Measurements
 (In thousands)
Assets:    
Cash equivalents:    
Money market funds$1,874,091 $0 $0 $1,874,091 
Treasury discount notes0 1,224,966 0 1,224,966 
Time deposits0 3,265 0 3,265 
Marketable debt securities:
Treasury discount notes0 224,979 0 224,979 
Investment in MGM1,860,158 0 0 1,860,158 
Other non-current assets:
Warrant0 0 5,276 5,276 
Total$3,734,249 $1,453,210 $5,276 $5,192,735 
Liabilities:
Contingent consideration arrangement$0 $0 
The following table presents the changes in the Company's financial instruments that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

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

 Three Months Ended March 31,
 2020 2019
 Warrant Contingent
Consideration
Arrangements		 Contingent
Consideration
Arrangement
 (In thousands)
Balance at January 1$8,495
 $(6,918) $(26,657)
Total net (losses) gains:     
Included in earnings:     
Fair value adjustments(2,006) 6,282
 (1,529)
Fair value at date of acquisition—
 (1,000) —
Settlements—
 1,000
 —
Balance at March 31$6,489
 $(636) $(28,186)

 Three Months Ended March 31,
 20212020
WarrantWarrantContingent
Consideration
Arrangements
 (In thousands)
Balance at January 1$5,276 $8,495 $(6,918)
Fair value at date of acquisition0 0 (1,000)
Total net gains (losses):
Included in earnings:
Fair value adjustments12,775 (2,006)6,282 
Settlements0 0 1,000 
Balance at March 31$18,051 $6,489 $(636)
Warrant
As part of the Company's investment in Turo a peer-to-peer car sharing marketplace,preferred shares, the Company received a warrant that is net settleable at the Company's option and is recorded at fair value each reporting period with any change included in "Other expense,income (expense), net" in the accompanying combined statement of operations. The warrant is measured using significant unobservable inputs and is classified in the fair value hierarchy table as Level 3. The warrant is included in "Other non-current assets" in the accompanying combined balance sheet.
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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Contingent Consideration ArrangementsArrangement
At March 31, 2020,2021, the Company has one outstanding contingent consideration arrangement related to a business acquisition. The arrangement has a remaining total maximum contingent paymentpayments related to this arrangement for periods subsequent to December 31, 2020, which is the end of $30.0the most recent measurement period, is $15.0 million. At March 31, 2020,2021, the gross fair value ofCompany does not expect to make any payments related to this arrangement, before unamortized discount, is $1.3 million.contingent consideration arrangement. In connection with the Care.com acquisition on February 11, 2020, the Company assumed a contingent consideration arrangement liability of $1.0 million, which was subsequently paid and settled during the first quarter of 2020.
Generally, our contingent consideration arrangements are based upon financial performance and/or operating metric targets and the Company generally determines the fair value of the contingent consideration arrangements by using probability-weighted analyses to determine the amounts of the gross liability, and, if the arrangements are initially long-term in nature, applying a discount rate that appropriately captures the risks associated with the obligations to determine the net amount reflected in the combined financial statements. The fair values of the contingent consideration arrangement at March 31, 2020 and December 31, 2019 reflect a discount rate of 25%.
The fair value of contingent consideration arrangements is sensitive to changes in the expected achievement of the applicable targets and changes in discount rates. The Company remeasures the fair value of the contingent consideration arrangements each reporting period, including the accretion of the discount, if applicable, and changes are recognized in "General and administrative expense" in the accompanying combined statement of operations. The contingent consideration arrangement liability atAt both March 31, 20202021 and December 31, 2019 includes a non-current portion of $0.6 million and $6.9 million, respectively. The non-current portion of the2020, there is 0 contingent consideration liability is included in “Other long-term liabilities” in the accompanying combined balance sheet.outstanding.
Assets measured at fair value on a nonrecurring basis
The Company's non-financial assets, such as goodwill, intangible assets, ROU assets and property,building, capitalized software, leasehold improvements and equipment, are adjusted to fair value only when an impairment is recognized. The Company's financial assets, comprising equity securities without readily determinable fair values, are adjusted to fair value when observable price changes are identified or an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs. See "Note 4—Goodwill and Intangible Assets" for a detailed description of the Desktop goodwill and indefinite-lived intangible asset impairments recorded in the quarter ended March 31, 2020.

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

Financial instruments measured at fair value only for disclosure purposes
The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes:
 March 31, 2020 December 31, 2019
 Carrying
Value		 Fair
Value		 Carrying
Value		 Fair
Value
 (In thousands)
Notes receivable—related party, current$27,172
 $27,172
 $55,251
 $55,251
Current portion of long-term debt$(13,750) $(13,750) $(13,750) $(13,681)
Long-term debt, net(a)
$(228,643) $(230,313) $(231,946) $(232,581)

 March 31, 2021December 31, 2020
 Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
 (In thousands)
Long-term debt, net(a)
$(705,987)$(710,692)$(712,277)$(725,700)
_____________________
(a)
At March 31, 2020 and December 31, 2019, the carrying value of long-term debt, net includes unamortized debt issuance costs of $1.7 million and $1.8
(a)At March 31, 2021 and December 31, 2020, the carrying value of long-term debt, net includes unamortized debt issuance costs of $7.1 million and $7.7 million, respectively.
At March 31, 20202021 and December 31, 2019,2020, the fair value of long-term debt including the current portion, is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs.
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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 6—5—LONG-TERM DEBT
Long-term debt consists of:
 March 31, 2020
December 31, 2019
 (In thousands)






ANGI Term Loan due November 5, 2023$244,063

$247,500
Less: current portion of ANGI Term Loan13,750

13,750
Less: unamortized debt issuance costs1,670

1,804
Total long-term debt, net$228,643

$231,946

 March 31, 2021December 31, 2020
 (In thousands)
3.875% ANGI Group Senior Notes due August 15, 2028 ("ANGI Group Senior Notes"); interest payable each February 15 and August 15, commencing February 15, 2021$500,000 $500,000 
ANGI Group Term Loan due November 5, 2023 ("ANGI Group Term Loan")213,125 220,000 
Total long-term debt713,125 720,000 
Less: unamortized debt issuance costs7,138 7,723 
Total long-term debt, net$705,987 $712,277 
ANGI Group Senior Notes
The ANGI Group Senior Notes were issued on August 20, 2020. At any time prior to August 15, 2023, these notes may be redeemed at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest and a make-whole premium. Thereafter, these notes may be redeemed at the redemption prices set forth in the indenture governing the notes, plus accrued and unpaid interest thereon, if any, to the applicable redemption date.
The indenture governing the ANGI Group Senior Notes contains a covenant that would limit ANGI Group’s ability to incur liens for borrowed money in the event a default has occurred or the ANGI Group’s secured leverage ratio (as defined in the indenture) exceeds 3.75 to 1.0. At March 31, 2021 there were no limitations pursuant thereto.
ANGI Group Term Loan and ANGI CreditGroup Revolving Facility
The outstanding balance of the loan ("ANGI Group Term Loan")Loan was $244.1$213.1 million and $247.5$220.0 million at March 31, 20202021 and December 31, 2019,2020, respectively. There are quarterly principal payments of $3.4 million through DecemberDuring the three months ended March 31, 2021, ANGI Group prepaid $6.9 million forthat was otherwise due in the one-year period ending December 31,first quarter of 2022 and, $10.3 million through maturityas of May 6, 2021, the loan when the final amount of $161.6 million is due. Additionally, interest payments are due at least quarterly through the term of the loan. At both March 31, 2020 and December 31, 2019, theoutstanding balance was repaid in its entirety. The ANGI Group Term Loan bore interest at LIBOR plus 1.50%2.00%, or 2.28%2.10% and 3.25%2.16%, at March 31, 2021 and December 31, 2020, respectively. The spread over LIBOR is subject to change in future periods based on ANGI's consolidated net leverage ratio.
The terms of the ANGI Term Loan requireGroup Credit Agreement requires ANGI Group to maintain a consolidated net leverage ratio of not more than 4.5 to 1.0 and a minimum interest coverage ratio of not less than 2.0 to 1.0 (in each case as defined in the credit agreement).1.0. The ANGI Term LoanGroup Credit Agreement also contains covenants that would limit ANGI'sANGI Group's ability to pay dividends or make distributions or repurchase its stock in the event a default has occurred or ANGI'sANGI Group's consolidated net leverage ratio exceeds 4.25 to 1.0. At March 31, 2020,2021, there were no limitations pursuant thereto. There are additional covenants under the ANGI Term Loan that limit the ability of ANGI and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions.

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

The $250 million revolving credit facility (the "ANGI Credit Facility")ANGI Group Revolving Facility expires on November 5, 2023. At March 31, 20202021 and December 31, 2019,2020, there were 0 outstanding borrowings under the ANGI CreditGroup Revolving Facility. The annual commitment fee, on undrawn fundswhich is based on theANGI Group's consolidated net leverage ratio most recently reported and the average daily dollar amount of the available revolving commitments, was 2535 basis points at both March 31, 20202021 and December 31, 2019. Borrowings2020. Any future borrowings under the ANGI CreditGroup Revolving Facility would bear interest, at ANGI'sANGI Group's option, at either a base rate or LIBOR, in each case plus an applicable margin, which is based on ANGI'sANGI Group's consolidated net leverage ratio. The financial and other covenants are the same as those for the ANGI Group Term Loan.
The ANGI Term LoanGroup Senior Notes and the ANGI Group Credit Agreement are guaranteed by certain of ANGI Group's wholly-owned material domestic subsidiaries and ANGI Group’s obligations under the ANGI Group Credit Agreement are secured by substantially all assets of ANGI Group and the guarantors, subject to certain exceptions. Outstanding borrowings under the ANGI Group Revolving Facility have priority over the ANGI Group Senior Notes to the extent of the value of the assets securing the borrowings under the ANGI Group Credit Agreement.
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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Vimeo Credit Facility
On February 12, 2021, Vimeo entered into a $100 million revolving credit facility (the "Vimeo Credit Facility"), which expires on February 12, 2026. Any borrowings under the Vimeo Credit Facility are guaranteed by ANGI'sVimeo's wholly-owned material domestic subsidiaries, if any, and are secured by substantially all assets of ANGIVimeo and theany guarantors, subject to certain exceptions.
IAC Group Credit Facility
IAC Group, LLC ("IAC Group") is the borrower under the IAC Credit Facility. IAC Group is included within these combined financial statements and will become a subsidiary of New IAC upon consummation of the Separation.
At March 31, 2020, IAC Group has a $250 million revolving credit facility (the "IAC Group Credit Facility"), that expires on November 5, 2023. At March 31, 2020 and December 31, 2019, there were 0 outstanding borrowings under the IAC Group Credit Facility. The annual commitment fee, on undrawn fundswhich is based on the consolidated net leverage ratio (as defined in the agreement) most recently reported and the average daily dollar amount of the available revolving commitment, was 20 basis points at both March 31, 2020 and December 31, 2019. Borrowings2021. Any borrowings under the IAC GroupVimeo Credit Facility would bear interest, at IAC Group'sVimeo's option, at either a base rate or LIBOR, in each case plus an applicable margin, which is determined by reference to a pricing grid based on IAC Group'sVimeo’s consolidated net leverage ratio. The termsfinancial covenants require Vimeo to maintain a minimum liquidity of not less than $50.0 million until December 31, 2022, and, thereafter, at the IAC Group Credit Facility require that IAC Group maintainsend of each quarterly test period, a consolidated net leverage ratio (as defined in the agreement) of not more than 3.255.5 to 1.0 before the date on which IAC Group no longer holds majority of the outstanding voting stock of ANGI (the "Trigger Date") and no greater than 2.75 to 1.0 on or after the Trigger Date.1.0. The terms of the IAC GroupVimeo Credit Facility also restrict IAC Group'scontains customary affirmative and negative covenants, including covenants that would limit Vimeo’s ability to incur additional indebtedness. Borrowingspay dividends or make distributions on or repurchase certain equity interests in the event a default has occurred or Vimeo’s consolidated net leverage ratio exceeds 4.0 to 1.0. At March 31, 2021, there were 0 outstanding borrowings under the IAC Group Credit Facility are unconditionally guaranteed by certain of our wholly-owned domestic subsidiaries and are also secured by the stock of certain of our domestic and foreign subsidiaries, including the shares of Match Group and ANGI owned by IAC Group. Following the Separation, Match Group shares will no longer be pledged as collateral to secure the IAC GroupVimeo Credit Facility.
Long-term Debt Maturities
Long-term debt maturities as of March 31, 20202021 are summarized in the table below:
 (In thousands)
Remainder of 2020$10,313
202113,750
202227,500
2023192,500
Total244,063
Less: current portion of long-term debt13,750
Less: unamortized debt issuance costs1,670
Total long-term debt, net$228,643

Years Ending December 31,(In thousands)
2022$20,625 
2023192,500 
2028500,000 
Total713,125 
Less: unamortized debt issuance costs7,138 
Total long-term debt, net$705,987 

NOTE 6—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table presents the components of accumulated other comprehensive income (loss):
Three Months Ended March 31, 2021Three Months Ended March 31, 2020
Foreign Currency Translation AdjustmentUnrealized Gains (Losses) On Available-For-Sale Marketable Debt SecuritiesAccumulated Other Comprehensive (Loss) IncomeForeign Currency Translation AdjustmentUnrealized Losses On Available-For-Sale Marketable Debt SecuritiesAccumulated Other Comprehensive Loss
(In thousands)
Balance at of January 1$(6,172)$2 $(6,170)$(12,226)$0 $(12,226)
Other comprehensive income (loss) before reclassifications294 (2)292 (5,651)(12)(5,663)
Amounts reclassified to earnings10,032 0 10,032 0 0 0 
Net current period other comprehensive income (loss)10,326 (2)10,324 (5,651)(12)(5,663)
Accumulated other comprehensive income allocated to noncontrolling interests during the period(5)0 (5)(37)0 (37)
Balance at of March 31$4,149 $0 $4,149 $(17,914)$(12)$(17,926)
The amount reclassified out of foreign currency translation adjustment into earnings for the three months ended March 31, 2021 relate to the substantial liquidation of certain international subsidiaries.
26
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IAC HOLDINGS, INC.IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

NOTE 7—ACCUMULATED OTHER COMPREHENSIVE LOSS
The following tables present the components of accumulated other comprehensive (loss) income and items reclassified out of accumulated other comprehensive loss into earnings:
 Three Months Ended March 31, 2020
 Foreign Currency Translation Adjustment Unrealized Losses On Available-For-Sale Debt Securities Accumulated Other Comprehensive Loss
 (In thousands)
Balance as of January 1$(12,226) $—
 $(12,226)
Other comprehensive loss(5,651) (12) (5,663)
Allocation of accumulated other comprehensive loss related to noncontrolling interests(37) —
 (37)
Balance as of March 31$(17,914) $(12) $(17,926)

 Three Months Ended March 31, 2019
 Foreign Currency Translation Adjustment Unrealized Gains On Available-For-Sale Debt Securities Accumulated Other Comprehensive (Loss) Income
 (In thousands)
Balance as of January 1$(12,543) $2
 $(12,541)
Other comprehensive income (loss)1,625
 (4) 1,621
Allocation of accumulated other comprehensive income related to noncontrolling interests7
 —
 7
Balance as of March 31$(10,911) $(2) $(10,913)
At both March 31, 20202021 and 2019,2020, there was 0 income tax benefit or provision on the accumulated other comprehensive loss.income (loss).
NOTE 7—EARNINGS (LOSS) PER SHARE
The Company treats its common stock and Class B common stock as one class of stock for earnings 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 EPS using the two-class method since those shares are unvested and have a non-forfeitable dividend right in the event the Company declares a cash dividend to common shareholders and participates in all other distributions of the Company in the same manner as all other IAC common shareholders.
Undistributed earnings allocated to the participating security is subtracted from net income in determining net income attributable to IAC common stock and Class B common stock shareholders for basic EPS. Basic EPS is computed by dividing net income attributable to IAC common stock and Class B common stock shareholders 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 income attributable to IAC common stock and Class B common stock shareholders is adjusted for the impact from public subsidiaries’ 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 March 31,
20212020
(In thousands, except per share data)
Basic EPS:
Numerator:
Net earnings (loss) attributable to IAC shareholders$329,128 $(328,199)
Net earnings attributed to unvested participating security (a)
(11,107)0 
Net earnings (loss) attributable to IAC common stock and Class B common stock shareholders$318,021 $(328,199)
Denominator:
Weighted average basic IAC common stock and Class B common stock shares outstanding(a)(b)
85,899 85,132 
Basic EPS$3.70 $(3.86)
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Three Months Ended March 31,
20212020
(In thousands, except per share data)
Diluted EPS:
Numerator:
Net earnings (loss) attributable to IAC common stock and Class B common stock shareholders$318,021 $(328,199)
Net earnings attributed to unvested participating security (a)
11,107 0 
Impact from public subsidiary dilutive securities(c)
(18)0 
Reallocation of net earnings attributable to unvested participating security(10,378)0 
Net earnings (loss) attributable to IAC common stock and Class B common stock shareholders for diluted EPS computation$318,732 $(328,199)
Denominator:
Weighted average basic IAC common stock and Class B common stock shares outstanding used for basic EPS computation(a)(b)
85,899 85,132 
Dilutive securities(c)(d)
6,239 0 
Number of shares used for diluted EPS computation(b)
92,138 85,132 
Diluted EPS$3.46 $(3.86)
_____________________
(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 vest 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 to common shareholders and participates in all other distributions of the Company in the same manner as all other IAC common shareholders. Accordingly, the two-class method of calculating earnings per share is used. While the restricted shares are presented as outstanding shares in the consolidated balance sheet, these shares are excluded from the weighted average shares outstanding in calculating basic earnings per share and the allocable portion of net earnings are also excluded. Fully diluted earnings per share reflects the impact on earnings and fully diluted shares in the manner that is most dilutive.
(b)    The Company computed basic and diluted earnings per share for periods prior to the MTCH Separation using the shares issued on June 30, 2020 in connection with the MTCH Separation.
(c)    IAC has the option to settle certain Angi Inc. stock-based awards in its shares. For the three months ended March 31, 2021, it is more dilutive for IAC to settle these Angi Inc. equity awards. The impact on earnings relates to the settlement of Angi Inc.'s dilutive securities in IAC common shares.
(d)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, vesting of restricted common stock, restricted stock units ("RSUs") and market-based awards ("MSUs"). For the three months ended March 31, 2021, 3.0 million potentially dilutive securities were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.
NOTE 8—SEGMENT INFORMATION
The overall concept that the Company employs in determining its operating segments is to present the financial information in a manner consistent with:with how the chief operating decision maker views the businesses;businesses. In addition, we consider how the businesses are organized as to segment management;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, which is the case for the Desktop and Ask Media Group operating segments in the Search reportable segment, or, in the case of the Emerging & Other reportable segment, do not meet the quantitative thresholds that require presentation as separate reportable segments.
The following table presents revenue by reportable segment:

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

 Three Months Ended March 31,
 2020 2019
 (In thousands)
Revenue:   
ANGI Homeservices$343,650
 $303,443
Vimeo56,968
 43,581
Dotdash44,120
 33,961
Applications104,148
 143,549
Ask Media Group100,948
 100,057
Emerging & Other34,357
 16,691
Inter-segment eliminations(67) (62)
Total$684,124
 $641,220

Three Months Ended March 31,
 20212020
 (In thousands)
Revenue  
Angi Inc.$387,029 $343,650 
Vimeo89,422 56,968 
Dotdash65,421 44,120 
Search181,034 154,419 
Emerging & Other153,156 85,042 
Inter-segment eliminations(74)(75)
Total$875,988 $684,124 
The following table presents the revenue of the Company's segments disaggregated by type of service:
 Three Months Ended March 31,
 2020 2019
 (In thousands)
    
ANGI Homeservices   
Marketplace:   
Consumer connection revenue$239,830
 $201,582
Service professional membership subscription revenue14,115
 16,517
Other revenue4,831
 2,401
Total Marketplace revenue258,776
 220,500
Advertising and other revenue65,356
 61,494
Total North America revenue324,132
 281,994
Consumer connection revenue15,689
 17,123
Service professional membership subscription revenue3,299
 3,742
Advertising and other revenue530
 584
Total Europe revenue19,518
 21,449
 Total ANGI Homeservices revenue$343,650
 $303,443
    
Vimeo   
Platform revenue$56,968
 $41,302
Hardware revenue—
 2,279
 Total Vimeo revenue$56,968
 $43,581
    
Dotdash   
Display advertising revenue$29,889
 $26,008
Performance marketing revenue14,231
 7,953
 Total Dotdash revenue$44,120
 $33,961
    
Applications   
Desktop:   
Advertising revenue:   
Google advertising revenue$46,091
 $88,050
Non-Google advertising revenue3,223
 3,348
26


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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Three Months Ended March 31,
 20212020
 (In thousands)
Angi Inc.
Marketplace:
Consumer connection revenue(a)
$272,353 $239,830 
Service professional membership subscription revenue11,952 13,777 
Other revenue6,745 5,169 
Total Marketplace revenue291,050 258,776 
Advertising and other revenue(b)
69,991 65,356 
Total North America revenue361,041 324,132 
Consumer connection revenue(c)
22,351 15,689 
Service professional membership subscription revenue3,328 3,299 
Advertising and other revenue309 530 
Total Europe revenue25,988 19,518 
 Total Angi Inc. revenue$387,029 $343,650 
(a) Includes fees paid by service professionals for consumer matches and revenue from Angi Services sourced through marketplace platforms.
(b) Includes Angi revenue from service professionals under contract for advertising and Angi membership subscription fees from consumers, as well as revenue from HomeStars.
(c) Includes fees paid by service professionals for consumer matches.
Vimeo
Platform revenue$89,422 $56,968 
Dotdash
Display advertising revenue$37,171 $29,889 
Performance marketing revenue28,250 14,231 
 Total Dotdash revenue$65,421 $44,120 
Search
Advertising revenue
Google advertising revenue:$155,418 $126,797 
Non-Google advertising revenue21,534 23,376 
Total advertising revenue176,952 150,173 
Other revenue4,082 4,246 
 Total Search revenue$181,034 $154,419 
Emerging & Other
Subscription revenue$83,566 $60,671 
Marketplace revenue56,271 17,696 
Media production and distribution revenue7,788 1,386 
Advertising revenue:
Non-Google advertising revenue3,393 3,713 
Google advertising revenue571 834 
Total advertising revenue3,964 4,547 
Service and other revenue1,567 742 
 Total Emerging & Other revenue$153,156 $85,042 
 Three Months Ended March 31,
 2020 2019
 (In thousands)
Total advertising revenue49,314
 91,398
Subscription and other revenue4,157
 4,588
 Total Desktop revenue53,471
 95,986
Mosaic Group:   
Subscription and other revenue49,071
 45,148
Advertising revenue1,606
 2,415
 Total Mosaic Group revenue50,677
 47,563
 Total Applications revenue$104,148
 $143,549
    
Ask Media Group   
Advertising revenue   
Google advertising revenue:$80,707
 $95,329
Non-Google advertising revenue20,153
 4,678
Total advertising revenue100,860
 100,007
Other revenue88
 50
Total Ask Media Group revenue$100,948
 $100,057
    
Emerging & Other   
Subscription revenue$19,496
 $569
Marketplace revenue9,471
 8,780
Advertising revenue:   
Non-Google advertising revenue2,108
 2,497
Google advertising revenue1,261
 944
Total advertising revenue3,369
 3,441
Media production and distribution revenue1,386
 3,489
Other revenue635
 412
 Total Emerging & Other revenue$34,357
 $16,691
27

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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
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 March 31,
 20212020
 (In thousands)
Revenue:  
United States$703,172 $537,343 
All other countries172,816 146,781 
Total$875,988 $684,124 
 Three Months Ended March 31,
 2020 2019
 (In thousands)
Revenue:   
United States$537,343
 $485,682
All other countries146,781
 155,538
Total$684,124
 $641,220


March 31,
2021		December 31,
2020
 (In thousands)
Long-lived assets (excluding goodwill, intangible assets and ROU assets):  
United States$268,216 $266,169 
All other countries11,285 12,082 
   Total$279,501 $278,251 
The following tables present operating income (loss) and Adjusted EBITDA by reportable segment:
Three Months Ended March 31,
 20212020
 (In thousands)
Operating income (loss):  
Angi Inc.$109 $(16,296)
Vimeo(206)(14,589)
Dotdash18,127 2,411 
Search18,386 (220,563)
Emerging & Other994 (17,870)
Corporate(49,237)(45,431)
Total$(11,827)$(312,338)


Three Months Ended March 31,
 20212020
 (In thousands)
Adjusted EBITDA(d):
  
Angi Inc.$23,186 $34,397 
Vimeo$1,796 $(11,408)
Dotdash$19,922 $7,011 
Search$18,386 $13,130 
Emerging & Other$11,964 $(19,959)
Corporate$(26,352)$(31,386)
_____________________
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

 March 31,
2020		 December 31,
2019
 (In thousands)
Long-lived assets (excluding goodwill, intangible assets and ROU assets):   
United States$262,784
 $297,433
All other countries8,693
 7,981
   Total$271,477
 $305,414

(d) 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, if applicable, 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 the Company's performance and that of its competitors. The above items are excluded from the Company's Adjusted EBITDA measure because these items are non-cash in nature. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.
The following tables presentreconcile operating income (loss) incomefor the Company's reportable segments and net earnings (loss) attributable to IAC shareholders to Adjusted EBTIDA by reportable segment:EBITDA:
 Three Months Ended March 31, 2021
 Operating
Income (Loss)		Stock-based
Compensation
Expense		DepreciationAmortization
of Intangibles		Adjusted
EBITDA
 (In thousands)
Angi Inc.$109 $2,034 $15,969 $5,074 $23,186 
Vimeo(206)$0 $115 $1,887 $1,796 
Dotdash18,127 $0 $549 $1,246 $19,922 
Search18,386 $0 $— $0 $18,386 
Emerging & Other994 $25 $426 $10,519 $11,964 
Corporate(49,237)$20,643 $2,242 $0 $(26,352)
Total(11,827)
Interest expense(6,680)
Unrealized gain on investment in MGM Resorts International382,540 
Other income, net13,650 
Earnings before income taxes377,683 
Income tax provision(48,782)
Net earnings328,901 
Net loss attributable to noncontrolling interests227 
Net earnings attributable to IAC shareholders$329,128 
 Three Months Ended March 31,
 2020 2019
 (In thousands)
Operating (loss) income:   
ANGI Homeservices$(16,296) $(3,641)
Vimeo(14,589) (17,784)
Dotdash2,411
 3,047
Applications(218,588) 25,356
Ask Media Group6,729
 10,830
Emerging & Other(26,574) (13,350)
Corporate(45,431) (38,641)
Total$(312,338) $(34,183)
29

 Three Months Ended March 31,
 2020 2019
 (In thousands)
Adjusted EBITDA (a):
   
ANGI Homeservices$34,397
 $37,179
Vimeo$(11,408) $(16,200)
Dotdash$7,011
 $7,150
Applications$10,151
 $29,688
Ask Media Group$6,831
 $10,975
Emerging & Other$(23,811) $(13,070)
Corporate$(31,386) $(20,220)

_____________________
(a)
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, if applicable, 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 the Company's performance and that of its competitors. The above items are excluded from the Company's Adjusted EBITDA measure because these items are non-cash in nature. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.

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

 Three Months Ended March 31, 2020
 Operating
(Loss) Income		Stock-based
Compensation
Expense		DepreciationAmortization
of Intangibles		Acquisition-related Contingent Consideration Fair Value ArrangementsGoodwill ImpairmentAdjusted
EBITDA
 (In thousands)
Angi Inc.$(16,296)$25,575 $12,138 $12,980 $0 $0 $34,397 
Vimeo(14,589)$0 $58 $3,123 $0 $0 $(11,408)
Dotdash2,411 $0 $210 $4,390 $0 $0 $7,011 
Search(220,563)$0 $320 $21,400 $0 $211,973 $13,130 
Emerging & Other(17,870)$25 $302 $3,866 $(6,282)$0 $(19,959)
Corporate(45,431)$11,581 $2,464 $0 $0 $0 $(31,386)
Total(312,338)
Interest expense(2,217)
Other expense, net(57,448)
Loss before income taxes(372,003)
Income tax benefit41,432 
Net loss(330,571)
Net loss attributable to noncontrolling interests2,372 
Net loss attributable to IAC shareholders$(328,199)
The following tables reconcile operating (loss) income for the Company's reportable segments and net loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc. to Adjusted EBITDA:
 Three Months Ended March 31, 2020
 
Operating
(Loss)
Income
 
Stock-Based
Compensation
Expense
 Depreciation 
Amortization
of Intangibles
 Acquisition-related Contingent Consideration Fair Value Adjustments 
Goodwill
Impairment
 

Adjusted
EBITDA
 (In thousands)
ANGI Homeservices$(16,296) $25,575
 $12,138
 $12,980
 $—
 $—
 $34,397
Vimeo(14,589) $—
 $58
 $3,123
 $—
 $—
 $(11,408)
Dotdash2,411
 $—
 $210
 $4,390
 $—
 $—
 $7,011
Applications(218,588) $—
 $237
 $22,811
 $(6,282) $211,973
 $10,151
Ask Media Group6,729
 $—
 $102
 $—
 $—
 $—
 $6,831
Emerging & Other(26,574) $25
 $283
 $2,455
 $—
 $—
 $(23,811)
Corporate(45,431) $11,581
 $2,464
 $—
 $—
 $—
 $(31,386)
Total(312,338)            
Interest expense(2,217)            
Other expense, net(57,448)            
Loss before income taxes(372,003)            
Income tax benefit41,432
            
Net loss(330,571)            
Net loss attributable to noncontrolling interests2,372
            
Net loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.$(328,199)            

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

 Three Months Ended March 31, 2019
 
Operating
(Loss)
Income
 
Stock-Based
Compensation
Expense
 Depreciation 
Amortization
of Intangibles
 Acquisition-related Contingent Consideration Fair Value Adjustments 

Adjusted
EBITDA
 (In thousands)
ANGI Homeservices$(3,641) $19,282
 $6,999
 $14,539
 $—
 $37,179
Vimeo(17,784) $—
 $193
 $1,391
 $—
 $(16,200)
Dotdash3,047
 $—
 $226
 $3,877
 $—
 $7,150
Applications25,356
 $—
 $419
 $2,384
 $1,529
 $29,688
Ask Media Group10,830
 $—
 $145
 $—
 $—
 $10,975
Emerging & Other(13,350) $—
 $130
 $150
 $—
 $(13,070)
Corporate(38,641) $15,393
 $3,028
 $—
 $—
 $(20,220)
Total(34,183)          
Interest expense(3,267)          
Other expense, net(5,417)          
Loss before income taxes(42,867)          
Income tax benefit29,194
          
Net loss(13,673)          
Net earnings attributable to noncontrolling interests(574)          
Net loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.$(14,247)          


NOTE 9—COMBINED FINANCIAL STATEMENT DETAILS
Cash and Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the combinedaccompanying balance sheet to the total amounts shown in the combinedaccompanying statement of cash flows:
 March 31, 2020 December 31, 2019 March 31, 2019 December 31, 2018
 (In thousands)
Cash and cash equivalents$2,029,071
 $839,796
 $829,608
 $884,975
Restricted cash included in other current assets743
 527
 1,443
 1,441
Restricted cash included in other non-current assets398
 409
 417
 420
Total cash and cash equivalents and restricted cash as shown on the combined statement of cash flows$2,030,212
 $840,732
 $831,468
 $886,836

March 31, 2021December 31, 2020March 31, 2020December 31, 2019
(In thousands)
Cash and cash equivalents$3,915,548 $3,476,188 $2,029,071 $839,796 
Restricted cash included in other current assets14,340 473 743 527 
Restricted cash included in other non-current assets433 449 398 409 
Total cash and cash equivalents and restricted cash as shown on the statement of cash flows$3,930,321 $3,477,110 $2,030,212 $840,732 
Restricted cash included in other current assets at March 31, 2021 primarily consists of cash received from customers at Care.com’s payment solutions business, representing funds collected for payroll and related taxes, which were not remitted as of the period end.
Restricted cash included in other current assets at December 31, 2020 primarily consists of cash received from customers at Angi Inc. through their Handy platform, representing funds collected for payments to service providers, which were not settled as of the period end.
Restricted cash included in other current assets at March 31, 2020 and December 31, 2019 primarily consists of a deposit related to corporate credit cards.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Restricted cash included in other non-current assets for all periods presented consists of deposits related to leases.
Credit Losses and Revenue Reserve
The following tables present the changes in the allowance for credit losses for the three months ended March 31, 2021 and 2020, respectively:
20212020
(In thousands)
Balance at January 1$27,654 $20,257 
Current period provision for credit losses19,550 19,929 
Write-offs charged against the allowance(20,981)(17,264)
Recoveries collected758 736 
Balance at March 31$26,981 $23,658 
The revenue reserve was $3.8 million and $2.1 million at March 31, 20192021 and December 31, 2018 primarily consists2020, respectively. The total allowance for credit losses and revenue reserve was $30.8 million and $29.7 million as of a cash collateralized letter of creditMarch 31, 2021 and a deposit related to corporate credit cards.December 31, 2020, respectively.
Accumulated Amortization and Depreciation
The following table provides the accumulated amortization and depreciation within the combinedconsolidated balance sheet:
Asset CategoryMarch 31, 2020 December 31, 2019
 (In thousands)
Right-of-use assets included in other non-current assets$43,925
 $35,775
Property, capitalized software and equipment$189,401
 $201,798
Intangible assets$223,801
 $201,454

Asset CategoryMarch 31, 2021December 31, 2020
 (In thousands)
Right-of-use assets included in other non-current assets$87,942 $78,226 
Building, capitalized software, leasehold improvements and equipment$193,120 $208,112 
Intangible assets$277,639 $278,639 
Other expense,income (expense), net
Three Months Ended March 31,
 20212020
 (In thousands)
Unrealized increase in the estimated fair value of a warrant$12,775 $0 
Realized gain related to Vimeo's retained interest in its former hardware business10,217 0 
Foreign exchange losses, net (a)
(11,782)(1,725)
Impairments related to impact of COVID-19 (b)
0 (59,001)
Interest income456 4,470 
Other1,984 (1,192)
Other income (expense), net$13,650 $(57,448)
 Three Months Ended March 31,
 2020 2019
 (In thousands)
Other expense, net$57,448
 $5,417
_____________________

(a)     Includes $10.0 million in foreign exchange losses primarily related to the substantial liquidation of certain foreign subsidiaries in the three months ended March 31, 2021.
Other expense, net(b)     Includes $51.5 million in 2020 includes: $51.5 million in impairments (downward adjustments) related to investments in equity securities without readily determinable fair values and $7.5$7.5 million in impairments of a note receivable and a warrant related to certain investees due toin the impact of COVID-19; and $4.4 million of interest income.
Other expense, net in 2019 includes: $8.1 million in a realized loss related to the sale of a business; and $4.3 million of interest income.

three months ended March 31, 2020.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

NOTE 10—CONTINGENCIES
In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where the Company believes an unfavorable outcome is not probable and, therefore, 0 reserve is established. Although management currently believes that resolving claims against the Company, including claims where an unfavorable outcome is reasonably possible, 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. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of 1 or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See "Note 2—Income Taxes" for additional information related to income tax contingencies.
Tinder Optionholder Litigation against IAC and Match GroupMTCH
OnIn August 14, 2018, 10 then-current and former employees of Match Group, LLC orGroup’s Tinder Inc. ("Tinder"), an operating business of Match Group, filed a lawsuit in New York state court against IAC and Match Group. See Sean Rad et al. v. IAC/InterActiveCorp and Match Group, Inc., No. 654038/2018 (Supreme Court, New York County). The complaint alleges that in 2017, the defendants: (i) wrongfully interfered with a contractually established process for the independent valuation of Tinder by certain2 investment banks, resulting in a substantial undervaluation of Tinder and a consequent underpayment to the plaintiffs upon exercise of their Tinder stock options, and (ii) then wrongfully merged Tinder into Match Group, thereby depriving certain of the plaintiffs of their contractual right to later valuations of Tinder on a stand-alonestand‑alone basis. The complaint asserts inter alia claims for breach of contract breach of the implied covenant of good faith and fair dealing, unjust enrichment, interference with contractual relations (as against Match Group only), and interference with prospective economic advantage and seeks compensatory damages in the amount of at least $2 billion, as well as punitive damages. On August 31, 2018,Shortly after filing suit, 4 plaintiffs who were still employed by Match Group filed a notice of discontinuance of their claims without prejudice, leaving the 6 former employees as the remaining plaintiffs.
OnIn October 9, 2018, the defendants filed a motion to dismiss the complaint on various grounds, including that the 2017 valuation of Tinder by the investment banks was an expert determination any challenge to which is both time-barred under applicable law and available only on narrow substantive grounds that the plaintiffs have not pleaded in their complaint; the plaintiffs opposed the motion. Onlaw. In June 13, 2019, the court issued a decision and order (i) granting the motion to dismissin part but leaving the plaintiffs’ principal claims for breach of the implied covenant of good faith and fair dealing and for unjust enrichment, (ii) granting the motion to dismiss the merger-related claim for breach of contract as to 2 of the remaining 6 plaintiffs, and (iii) otherwise denying the motion to dismiss. On June 21, 2019, theintact. The defendants filed a notice of appealappealed from the trial court’s partial denial of their motion to dismiss, and the parties thereafter briefed the appeal. Onin October 29, 2019, the Appellate Division, First Department, issued an order affirmingaffirmed the lower court’s decision. On November 22, 2019,After additional appellate motion practice, in May 2020, the Appellate Division reaffirmed the lower court’s decision on different grounds. In June 2020, the defendants filed a motion for reargument or, in the alternative, leave to appeal the Appellate Division's order to the New York Court of Appeals; the plaintiffs opposed the motion. On May 21, 2020, the Appellate Division issued an order (i) granting the defendants’ motion for reargument, vacating its prior decision, and replacing it with a new decision that affirmed the lower court’s decision on different grounds, and (ii) denying the defendants’ motion for leave to appeal the initial (and now vacated) decision to the Court of Appeals, without prejudice toAppeals; the defendants’ filing aAppellate Division denied the motion for leave to appeal the new decision to the Court of Appeals.in July 2020.
OnIn June 3, 2019, the defendants filed a second motion to dismiss or for other relief based upon certain provisions of the plaintiffs'plaintiffs’ agreement with a litigation funding firm; the plaintiffs opposed theparties are currently supplementing their briefing on that motion, which remains pending. Document discovery inFrom July to November 2019, the case is substantially complete; deposition discovery has begun but is currently in hiatus in lightdefendants filed counterclaims against former Tinder CEO Sean Rad for breach of the COVID-19 pandemic. Oncontract and unjust enrichment based upon his alleged misappropriation and unauthorized destruction of confidential company information, unauthorized recording of conversations with company employees, and breach of his non-solicitation obligations. In January 30, 2020, the parties participated in a mediation that did not result in the resolution of the matter. Fact discovery in the case is substantially complete, and expert discovery is under way.
In July 2020, the 4 individuals who earlier had discontinued their claims in the lawsuit commenced arbitration proceedings against IAC and Match Group believebefore the American Arbitration Association in California, asserting the same claims and seeking the same relief as the 6 remaining plaintiffs in the lawsuit. In September 2020, the defendants filed a motion to stay the trial in the New York lawsuit in favor of the California arbitration; in November 2020, the court denied the motion. In December 2020, the claimants in the California arbitration filed a motion to stay those proceedings in favor of the New York action, in which a trial has been provisionally scheduled for November 2021; in January 2021, the arbitrator denied the motion and provisionally scheduled a hearing on the merits for February 2022. In April 2021, the respondents in the California arbitration filed a motion for summary judgment dismissing the claimants' merger-related claims.
IAC believes that the allegations against themit in thisthe New York lawsuit and the California arbitration are without merit and will continue to defend vigorously against it.them.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Pursuant to the Transaction Agreement (as defined in Note 1—The Company and Summary of Significant Accounting Policies-MTCH Separation ), Match Group has agreed to indemnify the Company for matters relating to any business of Match Group, including indemnifying the Company for costs related to the matter described above.

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

NOTE 11—RELATED PARTY TRANSACTIONS
Relationship with Old IAC prior to the MTCH Separation
New IAC’s combinedThe Company’s statement of operations includes allocations of costs, including stock-based compensation expense, related to Old IAC’s accounting, treasury, legal, tax, corporate support and internal audit functions. Tofunctions prior to the extent applicable,MTCH Separation for the three months ended March 31, 2020. Old IAC has historically allocated costs related to its accounting, treasury, legal, tax, corporate support and internal audit functions that arewere incurred at the IAC/InterActiveCorpOld IAC legal entity level to its publicly traded subsidiaries, Match GroupOld MTCH and ANGI Homeservices, based upon time spent or other cost drivers, such as revenue, number of legal entities or transaction volume, in their standalone financial statements. For periods subsequent to the Match Group IPO in November 2015 and the Combination in September 2017, IAC billed Match Group and ANGI HomeservicesAngi Inc. for any services provided under the applicable services agreements. The remaining unallocated expenses of IAC/InterActiveCorpOld IAC related to its accounting, treasury, legal, tax, corporate support and internal audit functions were allocated to Newthe Company. Old IAC based upon time spent or other cost drivers, such as revenue, number of legal entities or transaction volume. Allocatedallocated costs to the Company, inclusive of stock-based compensation expense, were $24.0 million, and $35.5which totaled $24.0 million for the three months ended March 31, 2020 and 2019, respectively.2020. It is not practicable to determine the actual expenses that would have been incurred for these services had New IACthe Company operated as a standalone entity during the periods presented. Management considers the allocation method to be reasonable.
The portion of interest income reflected in the combined statement of operations that is related party in nature was less than $0.1$0.1 million for the three months ended March 31, 2020 and is included in ‘‘Interest"Interest income, net’’net" in the table below.
The following table summarizes the components of the net (increase) decreaseincrease in Old IAC’s investment in IAC Holdings, Inc.the Company for the three months ended March 31, 2020 and 2019:2020:
 Three Months Ended March 31,
 2020 2019
 (In thousands)
Cash transfers (from) to IAC related to its centrally managed U.S. treasury management function, acquisitions and cash expenses paid by IAC on behalf of IAC Holdings, Inc., net$(1,786,559) $48,709
Transfer of buildings to Match Group34,973
 —
Taxes25,048
 (7,367)
Allocation of costs from IAC(12,652) (20,129)
Interest income, net72
 —
Net (increase) decrease in IAC's investment in IAC Holdings, Inc.$(1,739,118) $21,213

Three Months Ended March 31, 2020
(In thousands)
Cash transfers from Old IAC related to its centrally managed U.S. treasury management function, acquisitions and cash expenses paid by Old IAC on behalf of the Company, net$(1,786,559)
Contribution of buildings to Match Group34,973 
Taxes25,048 
Allocation of costs from Old IAC(12,652)
Interest income, net72 
Net increase in Old IAC's investment in the Company$(1,739,118)
Notes Receivable—Related Party
During 2019, New IAC,the Company, through two domestic subsidiaries, entered into loan agreements with Old IAC for cash transfers to Old IAC under its centrally managed U.S. treasury function. During the first quarter of 2020, the outstanding balance, which was $55.3 million at December 31, 2019, was repaid.
On February 11, 2020, New IAC,the Company, through a domestic subsidiary, entered into a loan agreement with Old IAC for cash transfers to Old IAC under its centrally managed U.S. treasury function. TheDuring the second quarter of 2020, the outstanding receivable at March 31, 2020 isbalance, which was $27.2 million and bears interest at a rate per annum equal to the Monthly Short-Term Applicable Federal Rate and is due on demand. The interest rate at March 31, 2020, was 1.49%.
Long-term Debt—Related Party
On December 14, 2018, New IAC, through a domestic subsidiary, entered into a loan agreement with IAC for an amount not to exceed $15.0 million for general working capital purposes in the ordinary course of business. During the first quarter of 2019, the outstanding balance, which was $2.5 million at December 31, 2018, was repaid.

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

Guarantee of IAC Senior Notes
On December 21, 2012, IAC issued $500.0 million aggregate principal amount of 4.75% Senior Notes due December 15, 2022 (‘‘4.75% Senior Notes’’). On August 23, 2019, IAC redeemed the 4.75% Senior Notes and repaid the outstanding balance of $34.5 million. The 4.75% Senior Notes were unconditionally guaranteed by certain of New IAC’s domestic subsidiaries. New IAC did not pay any amount (or record any liability) as a result of our guarantee of IAC’s Senior Notes.
Relationship with IAC/New Match following the Separation
If the Separation is consummated, New IAC shall enter into certain agreements with IAC/New Match to govern the relationship between New IAC and IAC following the Separation. These agreements will include: a tax sharing agreement; a services agreement; and an employee matters agreement.
New IAC and ANGI
IAC and ANGI,Angi Inc.
Old IAC and Angi Inc., in connection with the Combination,transaction resulting in formation of Angi Inc., entered into a contribution agreement; an investor rights agreement; a services agreement; a tax sharing agreement; and an employee matters agreement. IfUpon the MTCH Separation, is consummated,Old IAC shall assignassigned these agreements to New IAC.the Company.
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IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)
For the three months ended March 31, 2021 and 2020, and 2019, 0.20.1 million and 0.30.2 million shares, respectively, of ANGIAngi Inc. Class B common stock were issued to IACa subsidiary of the Company pursuant to the employee matters agreement as reimbursement for shares of IAC common stock, issued for periods after the MTCH Separation, and Old IAC common stock, issued for periods prior to the MTCH Separation, in connection with the exercise and vesting of IAC and Old IAC equity awards held by ANGIAngi Inc. employees. For the three months ended March 31, 2021, 2.6 million shares of Angi Inc. Class A common stock were issued to a subsidiary of the Company pursuant to the employee matters agreement as reimbursement for IAC common stock, issued in connection with the exercise and settlement of certain Angi Inc. stock appreciation rights. There were 0 shares of Angi Inc. Class A common stock issued to IAC during the three months ended March 31, 2020.
For the three months ended March 31, 2021 and 2020, and 2019, ANGIAngi Inc. was charged $1.2$1.1 million and $1.4$1.2 million, respectively, by IAC and Old IAC, respectively, for services rendered pursuant to the services agreement. At March 31, 2021, Angi Inc. had outstanding payables of less than $0.1 million due to the Company, pursuant to the services agreement. There were 0 outstanding receivables or payables pursuant to the services agreement as of December 31, 2020.
At both March 31, 2020 or2021 and December 31, 2019.2020, Angi Inc. had outstanding payables of $0.9 million due to the Company pursuant to the tax sharing agreement. There were 0 payments to or refunds from Angi Inc. pursuant to this agreement during the three months ended March 31, 2021 and 2020.
New Additionally, the Company subleases office space from Angi Inc. and was charged $0.4 million of rent for both the three months ended March 31, 2021 and 2020. At March 31, 2021 there were 0 outstanding payables due to Angi Inc. pursuant to the sublease agreements. At December 31, 2020, there was an outstanding payable of less than $0.1 million due to Angi Inc. pursuant to sublease agreements, which was subsequently paid in full in the first quarter of 2021.
IAC and Match GroupOld MTCH
ForPrior to the MTCH Separation, for the three months ended March 31, 2020, and 2019, Match GroupOld MTCH incurred rent expense of $0.8 million and $1.4 million, respectively, for the leasing of office space for certain of its businesses at properties owned by New IAC.the Company. The respective amounts wereamount was paid in full by Match GroupOld MTCH at March 31, 2020. After June 30, 2020, and December 31, 2019, respectively.the date of the MTCH Separation, Match Group is no longer a related party.
On January 31, 2020, Old IAC contributed 2 office buildings in Los Angeles to Match Group,Old MTCH, which are primarily occupied and were previously leased from New IACthe Company by Tinder. In connection with this contribution, the contribution, New IACCompany entered into a lease with Match GroupOld MTCH for office space, which New IACthe Company currently occupies, in one of the buildings and for the three months ended March 31, 2020, New IACthe Company paid Match GroupOld MTCH less than $0.1 million under the lease. Match GroupOld MTCH issued 1.4 million shares of Match GroupOld MTCH common stock to Old IAC for the buildings.
New IAC and Expedia
Each of New IACThe Company and Expedia haseach have a 50% ownership interest in 2 aircraft that may be used by both companies. New IAC and Expedia purchased an aircraft duringIn 2019, the second quarter of 2017 to replace a previously owned aircraft, which was subsequently sold on February 13, 2018. New IAC paid $17.4 million (50% of the total purchase price and refurbish costs) for its interest in the new aircraft. In addition, in 2019, New IACCompany and Expedia entered into an agreement to jointly acquire a new corporate aircraft for a total expected cost of $72.3$72.7 million (including purchase price and related costs), with each company to bear 50% of such expected cost. New IACThe Company paid approximately $23 million in 2019 in connection with our joint entry into the purchase agreement, and the respective share of the balance is due upon delivery of the new aircraft, which is expected to occur in the secondthird quarter of 2021. Members of the aircraft flight crews are employed by an entity in which each of New IACthe Company and Expedia haseach have a 50% ownership interest. New IACThe Company and Expedia have agreed to share costs relating to flight crew compensation and benefits pro-rata according to each company’s respective usage of the aircraft, for which they are separately billed by the entity described above. IACThe Company and Expedia are related parties since they are under common control, given thatbecause Mr. Diller serves as Chairman and Senior Executive of both IAC and Expedia and subsequent to the Separation will serve as Chairman and Senior Executive of New IAC.Expedia. For the three months ended March 31, 20202021 and 2019,2020, total payments made to this entity by New IACthe Company were not material.

NOTE 12—SUBSEQUENT EVENTS
As of May 6, 2021, the outstanding balance of the ANGI Group Term Loan of $213.1 million was repaid in its entirety.
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IAC HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
(Unaudited)

NOTE 12—IAC HOLDINGS, INC. LEGAL ENTITY FINANCIAL STATEMENTS
In connection with the Separation, IAC Holdings, Inc. was incorporated as a Delaware corporation in November 2019 and as of December 31, 2019 did not hold any material assets or liabilities. 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 assets and liabilities of IAC Holdings. Inc. as of March 31, 2020 and the results of operations for the three months then ended are included within the New IAC combined financial statements.
The following tables present IAC Holdings, Inc. legal entity financial statements at March 31, 2020 and for the three months ended March 31, 2020:
IAC HOLDINGS, INC. BALANCE SHEET (UNAUDITED)
 March 31, 2020
 (In thousands, except par value and share data)
ASSETS 
Cash and cash equivalents$1,171,264
Marketable securities49,912
Prepaid expenses23
Other current assets100
Total current assets1,221,299
  
Other non-current assets111
TOTAL ASSETS$1,221,410
  
LIABILITIES AND SHAREHOLDER EQUITY 
LIABILITIES: 
Accrued expenses$16,604
Total current liabilities16,604
  
Other long-term liabilities111
  
SHAREHOLDER EQUITY: 
Common stock, par value $0.01; authorized, issued and outstanding 1,000 shares—
Additional paid-in capital1,222,344
Accumulated deficit(17,637)
Accumulated other comprehensive loss(12)
Total shareholder equity1,204,695
TOTAL LIABILITIES AND SHAREHOLDER EQUITY$1,221,410


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

IAC HOLDINGS, INC. STATEMENT OF OPERATIONS (UNAUDITED)
 Three Months Ending March 31,
 2020
 (in thousands)
Revenue$—
Operating costs and expenses: 
General and administrative expense19,224
Total operating costs and expenses19,224
Operating loss(19,224)
Other income1,587
Loss before income taxes(17,637)
Income tax benefit—
Net loss$(17,637)


IAC HOLDINGS, INC. STATEMENT OF COMPREHENSIVE LOSS (UNAUDITED)
 Three Months Ended March 31,
 2020
 (In thousands)
Net loss$(17,637)
Other comprehensive loss: 
Change in unrealized losses on available-for-sale marketable debt securities(12)
Total other comprehensive loss(12)
Comprehensive loss$(17,649)



IAC HOLDINGS, INC. STATEMENT OF SHAREHOLDER EQUITY (UNAUDITED)
  Three Months Ending March 31, 2020
  Common Stock, $.01 Par Value Additional Paid-in Capital Accumulated
Deficit		 Accumulated Other Comprehensive Loss Total Shareholder Equity
  
 $ Shares
  (in thousands, except par value and share data)
Balance as of December 31, 2019 $—
 1,000
 $—
 $—
 $—
 $—
Net loss —
 —
 —
 (17,637) —
 (17,637)
Other comprehensive loss —
 —
 —
 —
 (12) (12)
Stock-based compensation expense —
 —
 5,949
 —
 —
 5,949
IAC's contribution of assets and liabilities in connection with the transfer of employees and the centrally-managed U.S. treasury function to IAC Holdings, Inc. —
 —
 1,216,395
 —
 —
 1,216,395
Balance as of March 31, 2020 $—
 1,000
 $1,222,344
 $(17,637) $(12) $1,204,695







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

IAC HOLDINGS, INC. STATEMENT OF CASH FLOWS (UNAUDITED)
 Three Months Ended March 31,
 2020
 (In thousands)
Cash flows from operating activities: 
Net loss$(17,637)
Adjustments to reconcile net loss to net cash provided by operating activities: 
Stock-based compensation expense5,949
Accretion of marketable securities(66)
Changes in assets and liabilities: 
Other assets104
Accounts payable and other liabilities(10,640)
Net cash used in operating activities(22,290)
Cash flows from financing activities: 
IAC's contribution of assets and liabilities in connection with the transfer of the centrally-managed U.S. treasury function to IAC Holdings, Inc.1,193,554
Net cash provided by financing activities1,193,554
Net increase in cash and cash equivalents1,171,264
Cash and cash equivalents at beginning of period—
Cash and cash equivalents at end of period$1,171,264


NOTE 13—SUBSEQUENT EVENT
On May 6, 2020, IAC filed a registration statement on Form S-3 for an offering to sell from time to time up to $1.5 billion worth of shares of IAC Class M common stock (or New Match common stock). The net proceeds New Match receives pursuant to such sales, if any, will be transferred to New IAC following the closing of the offering (which closing would occur contemporaneously with the consummation of the Separation) and the number of shares of New Match to be received by IAC stockholders will be reduced to reflect the number of New Match shares sold in this offering.

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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

GENERAL

MTCH Separation:
Management Overview
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.
On December 19, 2019, IAC/InterActiveCorp ("Old IAC") entered into a Transaction Agreement (as amended, as of April 28, 2020, the "Transaction Agreement") with Match Group, Inc. ("Old MTCH"), IAC Holdings, Inc. ("New IAC" or the "Company"), a direct wholly ownedwholly-owned subsidiary of Old IAC, ("New IAC"), and Valentine Merger Sub LLC, an indirect wholly ownedwholly-owned subsidiary of Old IAC. Subject to the terms and conditions set forth in the Transaction Agreement, if the transactions contemplated by the Transaction Agreement are consummated,On June 30, 2020, the businesses of Old MTCH were separated from the remaining businesses of Old IAC through a series of transactions that resulted in the pre-transaction stockholders of Old IAC owning shares in two, separate public companies—(1) Old IAC, which was renamed Match Group, Inc. ("New Match") and which owns the businesses of Old MTCH and certain Old IAC financing subsidiaries, and (2) New IAC, which was renamed IAC/InterActiveCorp, and which owns Old IAC's other businesses—and the pre-transaction stockholders of Old MTCH (other than Old IAC) owning shares in New Match. This transaction is referred to as the "MTCH Separation."
Spin-off:
On December 22, 2020, IAC announced that its Board of Directors approved a plan to spin-off its full stake in Vimeo to IAC shareholders. IAC's Vimeo business will be separated from the remaining businesses of IAC through a series of transactions (which we refer to as the "Spin-off") that, if completed in their entirety, will result in the pre-transaction stockholderstransfer of IAC's Vimeo business to Vimeo Holdings, Inc. ("SpinCo"), a wholly-owned subsidiary of IAC, owning shares in two, separatewith SpinCo becoming an independent, separately traded public companies—(1)company through a spin-off from IAC, whichand Vimeo, Inc., the IAC subsidiary that currently holds the Vimeo business, becoming a wholly-owned subsidiary of SpinCo. In connection with the foregoing, SpinCo will be renamed Match Group,as Vimeo, Inc. ("New Match") and which will own the businesses of MTCH and certain IAC financing subsidiaries, and (2) New IAC, whichVimeo 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,as Vimeo.com, Inc. The proposed transaction is subject to a number of conditions including final approval by a majorityIAC's Board of Directors, approval of the disinterested shareholders of MTCH, approval of IAC’s shareholdersseparation proposal by IAC stockholders, and other customary conditions and approvals. We referapprovals and is expected to this transaction as the "Separation."close pre-market on May 25, 2021.
Management Overview
The Company operates Vimeo, Dotdash and Care.com, among many others, and has majority ownership of Angi Inc. (formerly ANGI Homeservices Inc.), which includes HomeAdvisor, Angi (formerly Angie's List) and Handy.
As used herein, "New IAC,"IAC," the "Company," "we," "our" or "us" and similar terms refer to IAC Holdings, Inc.IAC/InterActiveCorp and the businesses comprising New IACits subsidiaries (unless the context requires otherwise).
Key Terms:
WhenFor a more detailed description of the following terms appear in this report, they haveCompany's operating businesses, see the meanings indicated below:
Reportable Segments (Company's Annual Report on Form 10-K for additional information see "Note 8—Segment Information" to the combined financial statements included in "Item 1—Combined Financial Statements"):year ended December 31, 2020.
•
ANGI Homeservices ("ANGI") - connects quality home service professionals across 500 different categories, from repairing and remodeling to cleaning and landscaping, with consumers through category-transforming products under brands such as HomeAdvisor, Angie’s List, Handy and Fixd Repair. At March 31, 2020, New IAC’s economic interest and voting interest in ANGI were 84.9% and 98.3%, respectively.
•
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.
•
Dotdash - is a portfolio of digital brands providing expert information and inspiration in select vertical content categories.
•
Applications - consists of Desktop, which includes our direct-to-consumer downloadable desktop applications and the business-to-business partnership operations, and Mosaic Group, which is a leading provider of global subscription mobile applications through Apalon, iTranslate and TelTech.
•
Ask Media Group - is a collection of websites providing general search services and information.
•
Emerging & Other - consists of Care.com, a leading global platform for finding and managing family care, which was acquired on February 11, 2020, Bluecrew, NurseFly, a temporary healthcare staffing platform acquired on June 26, 2019, The Daily Beast, College Humor Media, for periods prior to its sale on March 16, 2020, and IAC Films.
Defined Terms and Operating Metrics:

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Unless otherwise indicated or as the context requires otherwise, requires certain terms used in this quarterly report, which include the principal operating metrics we use in managing our business, used in this quarterly report are defined below:
Reportable Segments (for additional information see "Note 8—Segment Information" to the financial statements included in "Item 1—Consolidated and Combined Financial Statements"):
•Angi Inc. - connects quality home service professionals with consumers across 500 different categories, from repairing and remodeling to cleaning and landscaping. At March 31, 2021, the Company’s economic interest and voting interest in Angi Inc. were 84.2% and 98.2%, respectively.
•Vimeo, Inc. ("Vimeo") - is the world’s leading all-in-one video software solution, providing the full breadth of video tools through a software-as-a-service model. Vimeo’s comprehensive and cloud-based tools empower its users to create, collaborate and communicate with video on a single, turnkey platform. At March 31, 2021, the Company's economic interest and voting interest in Vimeo were approximately 88.0% and 81.0%, respectively.
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•Dotdash - is a portfolio of digital publishing brands that collectively provide expert information and inspiration in select vertical content categories. Through its brands, Dotdash provides original and engaging digital content in a variety of formats, including articles, illustrations, videos and images.
•Search - consists of Ask Media Group, a collection of websites providing general search services and information and Desktop, which includes our direct-to-consumer downloadable desktop applications and our business-to-business partnership operations.
•Emerging & Other - consists of Care.com, which acquired Lifecare, a leading provider of family care benefits, on October 27, 2020, Mosaic Group, Bluecrew, Vivian Health (formerly NurseFly), The Daily Beast, IAC Films and, for periods prior to its sale on March 16, 2020, College Humor Media.
ANGI HomeservicesInc.
•
Marketplace Revenue - includes revenue from the HomeAdvisor, Handy and Fixd Repair domestic marketplace, including consumer connection revenue for consumer matches, revenue from pre-priced jobs sourced through the HomeAdvisor, Handy and Fixd Repair platforms, and service professional membership subscription revenue. It excludes revenue from Angie's List, mHelpDesk and HomeStars. Effective January 1, 2020, Fixd Repair has been moved to Marketplace from Advertising & Other and prior year amounts have been reclassified to conform to the current year presentation.
•
Advertising & OtherRevenue - includes Angie’s List revenue (revenue from service professionals under contract for advertising and membership subscription fees from consumers) as well as revenue from mHelpDesk and HomeStars.
•
Marketplace Service Requests - are fully completed and submitted domestic customer service requests to HomeAdvisor and jobs sourced through the HomeAdvisor, Handy and Fixd Repair platforms.
•
Marketplace Monetized Transactions - are fully completed and submitted domestic customer service requests to HomeAdvisor that were matched to and paid for by a service professional and jobs sourced through the HomeAdvisor, Handy and Fixd Repair platforms during
•Marketplace Revenue - primarily reflects domestic marketplace revenues, including consumer connection revenue for consumer matches, revenue from Angi Services (pre-priced) offerings sourced through marketplace platforms, and membership subscription revenue from service professionals.
•Advertising and OtherRevenue - primarily includes revenue from service professionals under contract for advertising and membership subscription fees from consumers.
•Marketplace Service Requests - are fully completed and submitted domestic customer service requests and includes Angi Services requests sourced through marketplace platforms in the period.
•Marketplace Monetized Transactions - are fully completed and submitted domestic customer service requests that were matched to and paid for by a service professional and includes completed and in-process Angi Services jobs sourced through the marketplace platforms in the period.
•Marketplace Transacting Service Professionals ("Marketplace Transacting SPs") - are the number of marketplace service professionals that paid for consumer matches or performed an Angi Services job sourced through the marketplace platforms in the quarter.
•Advertising Service Professionals ("Advertising SPs") - are the total number of service professionals under contract for advertising at the end of the period.
•
Marketplace Transacting Service Professionals ("Marketplace Transacting SPs") - are the number of HomeAdvisor, Handy and Fixd Repair domestic service professionals that paid for consumer matches or performed a job sourced through the HomeAdvisor, Handy and Fixd Repair platforms during the quarter.
Vimeo
•
Platform Revenue - primarily includes revenue from Software-as-a-Service ("SaaS") subscription fees and other related revenue from
•Subscribers - is the number of users who have an active subscription to one of Vimeo's paid plans measured at the end of the relevant period. Vimeo counts each account with a subscription plan as a subscriber. In the case of enterprise customers who maintain multiple accounts across Vimeo's platforms as part of a single enterprise subscription plan, Vimeo counts only one subscriber. Vimeo does not count team members who have access to a subscriber’s account as additional subscribers.
•Average Subscribers - is the sum of the number of Subscribers at the beginning and at the end of the relevant measurement period divided by two.
•Average Revenue per User ("ARPU") -is the annualized revenue for the relevant period divided by Average Subscribers. For periods that are less than a full year, annualized revenue is calculated by dividing the revenue for that particular period by the number of calendar days in the period and multiplying this value by the number of days in that year.
•
Hardware Revenue - includes sales of our live streaming accessories. Vimeo sold its hardware business on March 29, 2019.
•
Vimeo Ending Subscribers - is the number of subscribers to Vimeo's SaaS video tools at the end of the period (including the addition of subscribers from Magisto, a video creation service enabling consumers and businesses to create short-form videos acquired on May 28, 2019).
Dotdash
•
•Display Advertising Revenue - primarily includes revenue generated from display advertisements sold both directly through our sales team and via programmatic exchanges.
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•- primarily includes revenue generated from display advertisements sold both directly through our sales team and via programmatic exchanges.
•
Performance Marketing Revenue - primarily includes affiliate commerce and performance marketing commissions generated when consumers are directed from our properties to third-party service providers. Affiliate commerce commissions are generated when a consumer completes a transaction. Performance marketing commissions are generated on a cost-per-click or cost-per-new account basis.

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Operating Costs and Expenses:
•
•Cost of revenue - consists primarily of traffic acquisition costs, which includes (i) payments made to partners who direct traffic to our Ask Media Group websites, who distribute our business-to-business customized browser-based applications and who integrate our paid listings into their websites and (ii) the amortization of fees paid to Apple and Google related to the distribution of apps and the facilitation of in-app purchases of product features. Traffic acquisition costs include payment of amounts based on revenue share and other arrangements. Cost of revenue also includes payments made to independent service professionals who perform work contracted under pre-priced arrangements through the Angi Inc. marketplace platforms, compensation expense (including stock-based compensation expense) and other employee-related costs for Vimeo and Care.com customer care and support functions, payments made to workers staffed by Bluecrew, hosting fees, credit card processing fees, content costs, and production costs related to IAC Films and College Humor, for periods prior to its sale on March 16, 2020.
•Selling and marketing expense - consists primarily of advertising expenditures, which include online marketing, including through search engines and social media sites, fees paid to third parties that distribute our direct-to-consumer downloadable desktop applications, offline marketing, which is primarily television advertising, partner-related payments to those who direct traffic to the brands within our Angi Inc. segment, and compensation expense (including stock-based compensation expense) and other employee-related costs for Angi Inc.'s and Vimeo's sales force and marketing personnel.
•General and administrative expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources and customer service functions (except for Vimeo and Care.com, which include customer service costs within cost of revenue), fees for professional services (including transaction-related costs related to the MTCH Separation, the Spin-off and acquisitions), rent expense, facilities costs, provision for credit losses, software license and maintenance costs and acquisition-related contingent consideration fair value adjustments (described below). The customer service function at Angi Inc. includes personnel who provide support to its service professionals and consumers.
•Product development expense -consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs and third-party contractors that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology and software license and maintenance costs.
•consists primarily of traffic acquisition costs, which includes (i) payments made to partners who direct traffic to our Ask Media Group websites, who distribute our business-to-business customized browser-based applications and who integrate our paid listings into their websites and (ii) the amortization of fees paid to Apple and Google related to the distribution of apps and the facilitation of in-app purchases. Traffic acquisition costs include payment of amounts based on revenue share and other arrangements. Cost of revenue also includes hosting fees, compensation expense (including stock-based compensation expense) and other employee-related costs for Vimeo and Care.com customer care and support functions, employees at Fixd Repair for service work performed, payments made to workers staffed by Bluecrew, and payments made to independent service professionals who perform work contracted under pre-priced arrangements through the HomeAdvisor and Handy platforms, credit card processing fees, production costs related to IAC Films and for periods prior to its sale on March 16, 2020, College Humor Media, and content costs.
•
Selling and marketing expense - consists primarily of advertising expenditures, which include online marketing, including fees paid to search engines, social media sites and third parties that distribute our direct-to-consumer downloadable desktop applications, offline marketing, which is primarily television advertising, and partner-related payments to those who direct traffic to the brands within our ANGI segment, and compensation expense (including stock-based compensation expense) and other employee-related costs for ANGI's sales force and marketing personnel.
•
General and administrative expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources and customer service functions (except for Vimeo and Care.com which includes customer service costs within cost of revenue), fees for professional services (including transaction-related costs related to the Separation and acquisitions), rent expense, facilities costs, bad debt expense, software license and maintenance costs and acquisition-related contingent consideration fair value adjustments (described below). The customer service function at ANGI includes personnel who provide support to its service professionals and consumers.
•
Product development expense -consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology and software license and maintenance costs.
•
Acquisition-related contingent consideration fair value adjustments - relate to the portion of the purchase price of certain acquisitions that is contingent upon the financial performance and/or operating metric targets of the acquired company. The fair value of the liability is estimated at the date of acquisition and adjusted each reporting period until the liability is settled. Significant changes in financial performance and/or operating metrics will result in a significantly higher or lower fair value measurement. The changes in the estimated fair value of the contingent consideration arrangements during each reporting period, including the accretion of the discount if the arrangement is longer than one year, are recognized in "General and administrative expense" in the accompanying combined statement of operations.
Long-term debt (for additional information see "Note 6—5—Long-term Debt" to the combined financial statements included in "Item 1—Consolidated and Combined Financial Statements"):
•
•ANGI Group Senior Notes - On August 20, 2020, ANGI Group, LLC ("ANGI Group"), a direct wholly-owned subsidiary of Angi Inc., issued $500 million of its 3.875% Senior Notes due August 15, 2028, with interest payable February 15 and August 15 of each year, commencing February 15, 2021.
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•ANGI Group Term Loan - due November 5, 2023. The outstanding balance of the ANGI Group Term Loan as of March 31, 2021 is $213.1 million and bore interest at LIBOR plus 2.00%, or 2.10% and 2.16%, at March 31, 2021 and December 31, 2020, respectively. As of May 6, 2021, the outstanding balance of the ANGI Group Term Loan was repaid in its entirety.
•ANGI Group Revolving Facility - The ANGI Group $250 million revolving credit facility expires on November 5, 2023. At March 31, 2021 and December 31, 2020, is $244.1 million. At both March 31, 2020 and December 31, 2019, the ANGI Term Loan bore interest at LIBOR plus 1.50% and has quarterly principal payments. The interest rate was 2.28% and 3.25% at March 31, 2020 and December 31, 2019, respectively.
•
ANGI Credit Facility - The ANGI $250 million revolving credit facility expires on November 5, 2023. At March 31, 2020 and December 31, 2019, there were no outstanding borrowings under the ANGI Group Revolving Facility. The ANGI Group Revolving Facility and ANGI Group Term Loan are collectively referred to as the ANGI Group Credit Agreement.
•Vimeo Credit Facility - On February 12, 2021, Vimeo, Inc. entered into $100 million revolving credit facility that expires on February 12, 2026. At March 31, 2021, there were no outstanding borrowings under the Vimeo Credit Facility.
•
IAC Group Credit Facility - The IAC Group $250 million revolving credit facility expires on November 5, 2023. At March 31, 2020 and December 31, 2019, there were no outstanding borrowings under the IAC Group Credit Facility.

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Non-GAAP financial measure:
•
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") - is a non-GAAP financial measure. See "Principles of Financial Reporting" for the definition of Adjusted EBITDA and a reconciliation of net loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc. to operating loss to combined Adjusted EBITDA for the three months ended March 31, 2020 and 2019.Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") - is a non-GAAP financial measure. See "Principles of Financial Reporting" for the definition of Adjusted EBITDA and a reconciliation of net earnings (loss) attributable to IAC shareholders to operating loss to Adjusted EBITDA for the three months ended March 31, 2021 and 2020.
Angi Inc.'s Brand Integration Initiative
On March 17, 2021, Angi Inc. updated one of its leading websites and brands, Angie’s List, to Angi, and began the process of consolidating under a single brand. Going forward Angi Inc. will concentrate its marketing investment in the Angi brand in order to focus its marketing, sales and branding efforts on a single brand.
Angi Inc. relies heavily on free and paid search engine marketing efforts to drive traffic to its properties, which has been adversely affected by this initiative. Specifically, the brand initiative has adversely affected the placement and ranking of Angi Inc. websites, particularly Angi.com, in organic search results as Angi does not have the same domain history as Angie’s List. In addition, Angi Inc. shifted marketing to support Angi, away from HomeAdvisor, which has negatively affected the efficiency of its search engine marketing efforts.
These efforts have had a pronounced negative impact on Marketplace Service Requests from organic search results, and reduced monetization via its mobile applications, which in turn has resulted in relatively more Marketplace Service Requests from paid search engine marketing. The combined effect has reduced revenue and increased marketing spend, which Angi Inc. expects to result in lower profits in the quarter ending June 30, 2021. Angi Inc. expects this trend to continue until such time as the new brand establishes search engine optimization ranking and consumer awareness is established. Angi Inc. expects the reduction in revenue, increased marketing expense, and lower profits to continue for the remainder of 2021 and potentially into 2022, with the most significant impact in the second quarter of 2021. Angi Inc. has also increased its investment in Angi Services, its pre-priced product offering, which will reduce profits more than planned during 2021.
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 New IAC.
A meaningful portion of the Company's revenue (and a substantial portion of IAC's net cash from operations that it can freely access) 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, 2021 and 2020, total revenue earned from Google was $171.8 million and 2019, combined$138.9 million, respectively, representing 20% of the Company's revenue for both periods. The related accounts receivable totaled $66.2 million and $61.9 million at March 31, 2021 and December 31, 2020, respectively.
The total revenue earned from Googlethe Services Agreement for the three months ended March 31, 2021 and 2020 was $138.9$152.5 million and $195.8$126.6 million, respectively, representing 20%17% and 31%19%, respectively, of the Company's combinedtotal revenue. Accounts receivable related to
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The revenue earned from Google totaled $48.7 million and $53.0 million at March 31, 2020 and December 31, 2019, respectively.
Revenue attributable to the Services Agreement is earned by the Desktop business within the Applications segment and by the Ask Media Group, both within the Search segment. For the three months ended March 31, 20202021 and 2019,2020, revenue earned from the Services Agreement was $46.1$31.0 million and $88.1$46.1 million, respectively, within the Applications segmentDesktop business and $121.4 million and $80.5 million, and $94.8 million, respectively, within the Ask Media Group segment.Group.
The Services Agreement was scheduled to expireexpires 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 comparableNeither party gave notice to the pre-amendment agreement with Google.other party to terminate the Services Agreement pursuant to this provision in September 2020. 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 have in the past and could in turnthe future require modifications to, or prohibit and/or render obsolete certain of our products, services and/or business practices, which have been and could be costly to address and have had or otherwise could have an adverse effect on our combined financial condition and results of operations, particularly our Desktop business and Ask Media Group.operations. As described below, 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 Googleit may do so in the future.
On May 31, 2019, Google announcedCertain industry-wide policy changes which became effective on July 1, 2019, related to all extensions distributed through the Chrome Web Store.August 27, 2020. These industry-wide changes, combined with other changes to policesincreased enforcement of policies under the Services Agreement, during the second half of 2019, have had a negative impact on the historical and expected future results of operations of Desktop's business-to-consumer ("B2C") business. In addition, at multiple times during the fourth quarter of 2020, Google suspended services with respect to some of Desktop's B2C products and may do so in the future. As a result, the Desktop business.B2C business elected to modify certain marketing strategies in early January 2021. Subsequently, Google informed us of another policy change in the first quarter of 2021 that is scheduled to go into effect on May 10, 2021. This Google policy change may eliminate our ability to successfully introduce and market new products that would be profitable at scale. Therefore, the Desktop B2C business substantially reduced marketing in early March 2021 and effectively eliminated all marketing of its B2C products by the end of the first quarter of 2021. This reduction in marketing will positively impact profitability in 2021 but will substantially reduce revenue in 2021. Beyond 2021, the revenue from the installed base of products will decline precipitously. In response, we have undertaken cost reduction measures to maintain a very modest level of profitability.

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Overview—Combined Results
 Three Months Ended March 31,
 2020 $ Change % Change 2019
 (Dollars in thousands)
Revenue:       
ANGI Homeservices$343,650
 $40,207
 13 % $303,443
Vimeo56,968
 13,387
 31 % 43,581
Dotdash44,120
 10,159
 30 % 33,961
Applications104,148
 (39,401) (27)% 143,549
Ask Media Group100,948
 891
 1 % 100,057
Emerging & Other34,357
 17,666
 106 % 16,691
Inter-segment eliminations(67) (5) (8)% (62)
Total$684,124
 $42,904
 7 % $641,220
        
Operating (Loss) Income: 
      
ANGI Homeservices$(16,296) $(12,655) (348)% $(3,641)
Vimeo(14,589) 3,195
 18 % (17,784)
Dotdash2,411
 (636) (21)% 3,047
Applications(218,588) (243,944) NM
 25,356
Ask Media Group6,729
 (4,101) (38)% 10,830
Emerging & Other(26,574) (13,224) (98)% (13,350)
Corporate(45,431) (6,790) (18)% (38,641)
Total$(312,338) $(278,155) (814)% $(34,183)
        
Adjusted EBITDA:       
ANGI Homeservices$34,397
 $(2,782) (7)% $37,179
Vimeo(11,408) 4,792
 30 % (16,200)
Dotdash7,011
 (139) (2)% 7,150
Applications10,151
 (19,537) (66)% 29,688
Ask Media Group6,831
 (4,144) (38)% 10,975
Emerging & Other(23,811) (10,741) (81)% (13,070)
Corporate(31,386) (11,166) (55)% (20,220)
Total$(8,215) $(43,717) NM
 $35,502
        
_____________________
NM = Not meaningful.
Revenue increased $42.9 million, or 7%,2019 was the primary factor in the goodwill and indefinite-lived intangible asset impairments related to $684.1 million, due to growth from ANGI of $40.2 million, increases of $17.7 million from Emerging & Other, $13.4 million from Vimeo and $10.2 million from Dotdash, partially offset by a decrease of $39.4 million from Applications.

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Operating loss increased $278.2 million to a loss of $312.3 million due primarily to a goodwill impairmentthe Desktop business recorded in the three months ended March 31, 2020 of $212.0 million and $21.4 million, in indefinite-lived intangible asset impairments, which is reflected in amortization of intangibles, at Applications related to the Desktop business, a decrease in Adjusted EBITDA of $43.7 million, described below, and increases of $4.4 million in depreciation and $2.5 million in stock-based compensation expense, partially offset by a change of $7.8 million in acquisition-related contingent consideration fair value adjustments (income of $6.3 million in 2020 compared to expense of $1.5 million in 2019). respectively.The overall increase in amortization of intangibles of $23.4 million was due principally to the inclusion in 2020 of indefinite-lived intangible asset impairments of $21.4 million related to the Desktop business noted above. The goodwill and the indefinite-lived intangible asset impairments were driven by the impact of COVID-19. The increase in depreciationCOVID-19 was due primarily to the development of capitalized software to support ANGI's products and services, as well as leasehold improvements related toan additional office space at ANGI. The increase in stock-based compensation expense was due primarily to the issuance of new equity awards since the prior year period and a net increase in modification charges, partially offset by the vesting of awards.
Adjusted EBITDA decreased $43.7 million to a loss of $8.2 million due primarily to decreases of $19.5 million from Applications, $4.1 million from Ask Media Group and $2.8 million from ANGI, and increased losses of $11.2 million and $10.7 million from Corporate and Emerging & Other, respectively, partially offset by reduced losses of $4.8 million from Vimeo.
Acquisitions and dispositions affecting year-over-year comparability include:
Acquisitions:Reportable Segment:Acquisition Date:
FixdANGIJanuary 25, 2019
MagistoVimeoMay 28, 2019
NurseFly - controlling interestEmerging & OtherJune 26, 2019
Care.comEmerging & OtherFebruary 11, 2020
Dispositions:Reportable Segment:Sale Date:
Vimeo's hardware businessVimeoMarch 29, 2019
College Humor MediaEmerging & OtherMarch 16, 2020
factor.
COVID-19 Update and Impairments
The Company's business could be materially and adversely affected byimpact on the Company from the COVID-19 outbreak, of COVID-19, which has been declared a "pandemic" by the World Health Organization.
Through March 31, 2020, the Company's ANGI Homeservices businessOrganization, 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)been varied 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 our ad-supported businesses, the Company has experienced a meaningful decrease in advertising rates across our 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.

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volatile. 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 speedcontinuing spread of contagion,COVID-19, the development and implementation of effective preventative measures (including the global distribution of vaccines) and possible treatments, the scope of governmental and other restrictions on travel, non-essentialdiscretionary 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,for certain of our businesses, as well as significant uncertainty concerning the nearnear- and long termlong-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.

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When COVID-19 first impacted the businesses in IAC's Angi Inc. segment in March 2020, these businesses experienced a decline in demand for service requests, driven primarily by decreases in demand in certain categories of jobs (particularly discretionary indoor projects). During the second quarter of 2020, these businesses experienced a rebound in service requests, exceeding pre-COVID-19 growth levels, driven by increased demand from homeowners who spent more time at home due to measures taken to reduce the spread of COVID-19. These businesses continued to experience strong demand for home services in the second half of 2020 and the first quarter of 2021. However, many service professionals' businesses have been adversely impacted by labor and material constraints and many service professionals have limited capacity to take on new business, which has negatively impacted the ability of these businesses to monetize this increased level of service requests. Vimeo has seen strong revenue growth as the demand for communication via video has increased due to the pandemic. The Search segment has experienced an increase in revenue in the first quarter of 2021 compared to the prior year due, in part, to lower advertising rates in 2020 due to the impact of COVID-19. COVID-19 impacted our businesses in varied ways in the year ended December 31, 2020. Accordingly, the volatile nature of our operating results in 2020 will impact the comparability of our year-over-year results of operations.
There were no impairments identified during the quarter ended March 31, 2021.
In the quarter ended March 31, 2020, the Company determined that the effects of COVID-19 were an indicator of possible impairment for certain of its assets 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 $7.5 million impairment of a note receivable and a warrant related to certain investees.
In addition, the United States, which represents 80% of the Company's revenue for the three months ended March 31, 2021, experienced another resurgence of the COVID-19 virus. Europe, which is the second largest market for the Company's products and services, has also seen a resurgence in COVID-19. This resurgence of COVID-19 and the measures designed to curb COVID-19's spread could materially and adversely affect our business, financial condition and results of operations.
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Results of Operations for the three months ended March 31, 20202021 compared to the three months ended March 31, 20192020
Revenue
 Three Months Ended March 31,
 2021$ Change% Change2020
 (Dollars in thousands)
Angi Inc.$387,029 $43,379 13%$343,650 
Vimeo89,422 32,454 57%56,968 
Dotdash65,421 21,301 48%44,120 
Search181,034 26,615 17%154,419 
Emerging & Other153,156 68,114 80%85,042 
Inter-segment eliminations(74)1 3%(75)
Total$875,988 $191,864 28%$684,124 
 Three Months Ended March 31,
 2020 $ Change % Change 2019
 (Dollars in thousands)
ANGI Homeservices$343,650
 $40,207
 13% $303,443
Vimeo56,968
 13,387
 31% 43,581
Dotdash44,120
 10,159
 30% 33,961
Applications104,148
 (39,401) (27)% 143,549
Ask Media Group100,948
 891
 1% 100,057
Emerging & Other34,357
 17,666
 106% 16,691
Inter-segment eliminations(67) (5) (8)% (62)
Total$684,124
 $42,904
 7% $641,220
ANGI•Angi Inc. revenue increased 13% to $343.7$387.0 million driven by Marketplace Revenue growth of $38.3 $32.3 million, or 17%12%, growth of $6.5 million, or 33%, at the European businesses and an increase of $3.9$4.6 million, or 6%7%, in Advertising &and Other Revenue, partially offset by a decline of $1.9 million, or 9%, at the European businesses. Revenue. The increase in Marketplace Revenue was due primarily to increasesan increase of 2% 29% in Marketplace Service Requests to 5.97.7 million and 5%, resulting in a 17% increase in Marketplace Transacting SPs Monetized Transactions to 191,000, and, to a lesser extent, an increase in revenue of $15.2 million due to the change to gross revenue reporting for Handy and HomeAdvisor’s pre-priced product offering, effective January 1, 2020. Advertising & Other Revenue increased due primarily to an increase in Angie's List revenue. 4.2 million. The revenue declineincrease at the European businesses was due primarily to the impact of COVID-19, lower monetization from transitioning the Travaux.com businessstrong growth across its markets due to Werkspot's technology platform in early February 2020increased consumer demand and the unfavorablefavorable impact of the strengtheningweakening of the U.S. dollar relative to the Euro and British Pound.Advertising and Other Revenue increased due primarily to an increase in Angi revenue driven by an 6% increase in Advertising SPs to 40 thousand.
•Vimeo revenue grew 31%57% to $57.0$89.4 million driven primarily by a 25% increase in Average Subscribers to 1.6 million and a 27% increase in ARPU to $233. The growth in Average Subscribers is due to Platform Revenue growth of $15.7 million, or 38%. Platform Revenue growth was driven by a 6%an increase in average revenue per subscriberself-serve and a 31% increase in Vimeo Ending Subscribers to 1.3 million (including the contribution from Magisto, acquired May 28, 2019)enterprise customers as enterprisesindividuals, businesses and organizations moveaccelerated their adoption of video to deliver their products and communicate with their customers more digitallyand employees due, in part, to the effects of COVID-19. RevenueARPU increased as a greater percentage of both new and existing self-serve subscribers purchased, on average, higher-priced offerings that include features, such as additional storage and bandwidth, video creation and editing tools and live streaming capability. The growth in 2019 included $2.3 million from the hardware business, which was sold in the first quarter of 2019.enterprise customers, whose average annual contract values are much greater, also contributed to ARPU growth.
•Dotdash revenue increased 30%48% to $44.1$65.4 million due to growth of 79%of $14.0 million, or 99%, in Performance Marketing Revenue and 15%$7.3 million, or 24%, higher Display Advertising Revenue.Revenue. The growth in Performance Marketing Revenue was due primarily to growth in both affiliate commerce commission revenue and performance marketing commission revenue.revenue due to increased online sales and new performance marketing products. The increase in Display Advertising Revenue was driven by an increase in advertising sold through our sales team.
Applications•Search revenue decreased 27%increased 17% to $104.1$181.0 million due to a decreasean increase of $42.5$42.9 million, or 44%43%, at Desktop,from Ask Media Group, partially offset by an increase a decrease of $3.1$16.3 million, or 7%30%, at Mosaic Group.from Desktop. The increase in Ask Media Group revenue was due to growth in paid traffic. The decrease in Desktop revenue was driven by lower queriesincreasing challenges in monetization and monetization challenges following prior year the reduced marketing of its B2C products in the first quarter of 2021 due to browser policy changes and a decrease in advertising rates due to the impact of COVID-19 as well as continued business-to-business partnership declines.implemented by Google.
Ask Media Group revenue increased 1% to $100.9 million due primarily to growth in paid traffic partially offset by a decrease in advertising rates due to the impact of COVID-19.
•Emerging & Other revenue increased 106%80% to $34.4$153.2 million due primarily to the contributions fromfull quarter contribution of Care.com, acquired February 11, 2020, the addition of Lifecare, acquired by Care.com in October 2020, and Nursefly, acquired June 26, 2019, as well as growth at The Daily Beast, partially offset by loweran increase in revenue atfrom IAC Films.

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Cost of revenue (exclusive of depreciation shown separately below)
Three Months Ended March 31, Three Months Ended March 31,
2020 $ Change % Change 2019 2021$ Change% Change2020
(Dollars in thousands) (Dollars in thousands)
Cost of revenue (exclusive of depreciation shown separately below)$179,327 $39,479 28% $139,848Cost of revenue (exclusive of depreciation shown separately below)$245,681$66,354 37%$179,327
As a percentage of revenue26%   22%As a percentage of revenue28% 26%
Cost of revenue in 20202021 increased from 20192020 due to increases of $23.2$24.8 million from ANGI, $10.8Search, $20.6 million from Ask Media Group and $6.9Angi Inc., $11.6 million from Emerging & Other partially offset by a decrease of $5.0and $6.6 million from Applications.Vimeo.
•The ANGISearch increase was primarily due to an increase of $26.5 million in traffic acquisition costs at Ask Media Group resulting from the increase in revenue.
•The Angi Inc. increase was due primarily to the change from net to gross revenue reporting for Handy and HomeAdvisorgrowth of Angi Services (the pre-priced product offering, effective January 1, 2020.offerings), which has lower margins than other sources of revenue.
•The Ask Media Group increaseEmerging & Other increase was due primarily to an increase of $10.8 million in traffic acquisition costs driven by higher revenue sourced through partners.
The Emerging & Other increase was due primarily to $9.4$10.2 million of expense from the inclusion of Care.com for a full quarter and from the acquisition of Lifecare.
•The Vimeo increase was due primarily to increases of $3.6 million in hosting fees and $2.4 million in credit card processing fees and in-app purchase fees. The increase in hosting fees was due to the increase in Average Subscribers, partially offset by cost optimization initiatives. The increase in credit card processing fees and in-app purchase fees was due primarily to an increase in Average Subscribers and growth in on-demand content transactions.
Selling and marketing expense
 Three Months Ended March 31,
 2021$ Change% Change2020
 (Dollars in thousands)
Selling and marketing expense$344,266$36,05912%$308,207
As a percentage of revenue39% 45%
Selling and marketing expense in 2021 increased from 2020 due to increases of $15.9 million from Angi Inc., $12.0 million from Emerging & Other, $6.8 million from Vimeo and $3.6 million from Dotdash, partially offset by a decrease of $2.1 million at College Humor Media due to its sale during the first quarter of 2020.
The Applications decrease was due primarily to a decrease of $4.5 million in traffic acquisition costs related to business-to-business partnership revenue declines at Desktop.
Selling and marketing expense
 Three Months Ended March 31,
 2020 $ Change % Change 2019
 (Dollars in thousands)
Selling and marketing expense$308,207 $5,009 2% $303,198
As a percentage of revenue45%     47%
Selling and marketing expense in 2020 increased from 2019 due to increases of $14.7$2.5 million from ANGI, $9.6 million from Emerging & Other, $2.3 million from Vimeo and $1.8 million from Dotdash, partially offset by decreases of $16.9 million from Applications and $6.5 million from Ask Media Group.Search.
•The ANGIAngi Inc. increase was due primarily to increases in compensation expense of $7.7$8.5 million, and advertising expense of $4.4$5.9 million and outsourced personnel and consulting costs of $2.6 million. The increase in compensation expense was due primarily to growthincreased commission expense and an increase in sales force headcount, partially offset by lower compensation expense in France due to headcount reductions in the sales force.third quarter of 2020. The increase in advertising expense was due primarily to an increase in online marketing, partially offset by a decrease in television spend. Beginning mid-way through 2019, the proportion of service requests through Google free traffic declined while service requests through Google paid traffic increased. In addition, paid service requests became considerably more expensive on average than in the first half of 2019. In response to this continuing trend, we implemented new processes in the second half of 2019 that are increasingly more focused on profitability targets of our paid customer acquisition than the cost of each service request. We expect the year-over-yearThe increase in paid trafficoutsourced personnel and consulting costs was due primarily to be more modest in the back half of 2020.various sales initiatives at Angi Services.
•The Emerging & Other increase was due primarily to $9.9$10.3 million ofexpense from the inclusion of Care.com partially offset byfor a decreasefull quarter and from the acquisition of $0.9 million in compensation at College Humor Media due to its sale during the first quarter of 2020.Lifecare.
•The Vimeo increase was due primarily to increases in compensation expense of $3.5$3.4 million due,and advertising costs of $2.9 million. The increase in part,compensation expense was primarily due to growth in the enterprise sales force and software license and maintenance costs of $0.6 million, partially offset by lower marketing of $2.3 million due to a brand campaign in 2019.force.

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The Dotdash increase was due primarily to anincreases in compensation expense of $1.9 million and online advertising expense of $1.8 million. The increase in compensation expense was primarily due to higher headcount.
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Table of $1.6 million, due, in part, to growth in the sales force.Contents

•The Applications decrease was due primarily to lower online marketing of $15.4 million principally at Desktop as we continue to mitigate the negative impact on revenue from prior year browser policy changes, and a decrease of $0.8 million in compensation expense.
The Ask Media GroupSearch decrease was due primarily to a decrease in marketing of $6.2$15.2 million driven byat Desktop as we substantially reduced marketing of its B2C products in early March 2021 as a result of Google policy changes, which will become effective on May 10, 2021, partially offset by an increase of $11.0 million in our ability to acquire traffic.online marketing at Ask Media Group.
General and administrative expense
 Three Months Ended March 31,
 2021$ Change% Change2020
 (Dollars in thousands)
General and administrative expense$177,431$3,6902%$173,741
As a percentage of revenue20% 25%
 Three Months Ended March 31,
 2020 $ Change % Change 2019
 (Dollars in thousands)
General and administrative expense$173,741 $19,290 12% $154,451
As a percentage of revenue25%     24%
General and administrative expense in 20202021 increased from 20192020 due to increases of $10.1$9.5 million from ANGI, $8.0 million from Corporate, $6.6 million from Emerging & Other and $2.1$2.0 million from Dotdash,Corporate, partially offset by a decrease of $7.5$6.4 million from Applications.Angi Inc.
The ANGI increase was due primarily to an increase of $6.2 million in compensation expense and $3.5 million in bad debt expense due to higher Marketplace Revenue and the impact from COVID-19 on expected credit losses. The increase in compensation expense was due primarily to an increase of $4.4 million in stock-based compensation expense due primarily to the issuance of new equity awards since 2019 and an increase of $2.5 million in expense due to the modification charge related to the combination of the HomeAdvisor business and Angie's List ($10.4 million in 2020 compared to $7.9 million in 2019).
The Corporate increase was due primarily to higher professional fees, including $7.6 million in costs related to the Separation, partially offset by a decrease in stock-based compensation expense due primarily to the vesting of awards, partially offset by a net increase in modification charges.
•The Emerging & Other increase was due primarily to $6.7$8.2 million of expense from the inclusion of Care.com.
The Dotdash increase was due primarily to an increaseCare.com for a full quarter and from the acquisition of Lifecare and the inclusion in bad debt expense due, in part, to the impact2020 of COVID-19 on expected credit losses.
The Applications change was due primarily to a decreaseincome of $7.8$6.3 million in acquisition-related contingent consideration fair value adjustments (income of $6.3 million in 2020 compared to expense of $1.5 million in 2019).
Product development expense
 Three Months Ended March 31,
 2020 $ Change % Change 2019
 (Dollars in thousands)
Product development expense$61,963 $17,538 39% $44,425
As a percentage of revenue9%     7%
Product development expense in 2020 increased from 2019 due to increasesthe decrease in the expected amount of $5.6 million from Vimeo, $5.3 million from Emerging & Other, $3.8 million from Dotdash and $1.7 million from Applications.contingent consideration to be paid out in connection with a previous Mosaic Group acquisition.
•The VimeoCorporate increase was due primarily to an increase of $4.5$7.3 million in stock-based compensation expense due to the issuance of new grants since 2020, partially offset by a decrease in transaction-related costs ($7.6 million related to the MTCH Separation in 2020 compared to $4.1 million in connection with the Spin-off in 2021).
•The Angi Inc. decrease was due primarily to a decrease of $14.0 million in compensation expense, partially offset by increases in professional fees of $3.6 million and $1.3 million in the provision for credit losses. The decrease in compensation expense was due primarily to a decrease in stock-based compensation expense of $22.9 million, partially offset by a $6.0 million charge related to the acquisition of an additional 21% interest in MyBuilder at a premium to fair value and an increase of $2.8 million in wage related expenses resulting primarily from annual wage increases. The decrease in stock-based compensation expense was due primarily to $11.9 million in stock appreciation rights expense recognized in the inclusionfirst quarter of Magisto2020 which was not incurred in 2021 as the awards became fully vested in 2020 and a net decrease of $7.7 million due to the reversal of previously recognized expense related to unvested awards that were forfeited due to management departures in the first quarter of 2021. The increase in professional fees was due primarily to an increase in outsourced personnel costs and legal fees. The increase in outsourced personnel costs was due primarily to an increase in call volume related to Angi Inc.'s customer service function. The increase in provision for credit losses was driven by higher headcount.Marketplace Revenue.

Product development expense
 Three Months Ended March 31,
 2021$ Change% Change2020
 (Dollars in thousands)
Product development expense$82,410$20,44733%$61,963
As a percentage of revenue9% 9%
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TableProduct development expense in 2021 increased from 2020 due to increases of Contents$9.4 million from Emerging & Other, $4.9 million from Vimeo and $3.7 million from Dotdash.


•The Emerging & Other increase was due primarily to $4.9$7.0 million of expense from the inclusion of Care.com.Care.com for a full quarter and from the acquisition of Lifecare
•The Vimeo increase was due primarily to increased investment in products, which resulted in increases of $3.7 million in compensation expense due primarily to increased headcount, $0.7 million in consulting costs and $0.6 million in software license and maintenance costs.
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•The Dotdash increase was due primarily to an increase of $3.6$3.5 million in compensation expense due primarily to higher headcount and an increase in expense for contractors engaged in improving the user's experience.headcount.
The Applications increase was due primarily to an increase of $2.1 million in compensation expense due primarily to higher headcount at Mosaic.Depreciation
Depreciation
Three Months Ended March 31, Three Months Ended March 31,
2020 $ Change % Change 2019 2021$ Change% Change2020
(Dollars in thousands) (Dollars in thousands)
Depreciation$15,492 $4,352 39% $11,140Depreciation$19,301$3,80925%$15,492
As a percentage of revenue2%   2%As a percentage of revenue2% 2%
Depreciation in 20202021 increased from 20192020 due primarily to the development ofinvestments in Angi Inc. capitalized software to support ANGI's products and services, as well as leasehold improvements related to additional office space at ANGI.software.
Operating income (loss)
 Three Months Ended March 31,
 2021$ Change% Change2020
 (Dollars in thousands)
Angi Inc.$109 $16,405 NM$(16,296)
Vimeo(206)14,383 99%(14,589)
Dotdash18,127 15,716 652%2,411 
Search18,386 238,949 NM(220,563)
Emerging & Other994 18,864 NM(17,870)
Corporate(49,237)(3,806)(8)%(45,431)
Total$(11,827)$300,511 96%$(312,338)
As a percentage of revenue(1)%(46)%
Operating (loss) income
 Three Months Ended March 31,
 2020 $ Change % Change 2019
 (Dollars in thousands)
ANGI Homeservices$(16,296) $(12,655) (348)% $(3,641)
Vimeo(14,589) 3,195
 18% (17,784)
Dotdash2,411
 (636) (21)% 3,047
Applications(218,588) (243,944) NM 25,356
Ask Media Group6,729
 (4,101) (38)% 10,830
Emerging & Other(26,574) (13,224) (98)% (13,350)
Corporate(45,431) (6,790) (18)% (38,641)
Total$(312,338) $(278,155) (814)% $(34,183)
        
As a percentage of revenue(46)%     (5)%
Operating loss increased $278.2decreased $300.5 million to a loss of $312.3$11.8 million due primarily to the inclusion in 2020 of a goodwill impairment of $212.0 million and $21.4 million in indefinite-lived intangible asset impairments which is reflected in amortization of intangibles, at ApplicationsSearch related to the Desktop business, a decreasean increase in Adjusted EBITDA of $43.7$57.1 million, described below, and increasesdecreases of $4.4 million in depreciation and $2.5$14.5 million in stock-based compensation expense, partially offset by a change$5.6 million in amortization of $7.8intangibles, excluding the Desktop impairment noted above, and the inclusion in 2020 of $6.3 million of income in acquisition-related contingent consideration fair value adjustments, (incomepartially offset by an increase of $6.3$3.8 million in 2020 compareddepreciation. The goodwill and the indefinite-lived intangible asset impairments are described above in "Certain Risks and Concentrations—Services Agreement with Google (the "Services Agreement")." The decrease in stock-based compensation expense was due primarily to factors described above in the general and administrative expense of $1.5 million in 2019).discussion. The overall increasedecrease in amortization of intangibles of $23.4$27.0 million was due principally to the inclusion in 2020 of indefinite-lived intangible asset impairments of $21.4 million related to the Desktop business noted above. The goodwillabove and the indefinite-livedcertain intangible asset impairments were drivenassets becoming fully amortized during 2020, partially offset by the impact of COVID-19.an increase in amortization related to recent acquisitions (Care.com and Lifecare). The increase in depreciation was due primarily to the development ofinvestments in capitalized software to support ANGI'sAngi Inc.'s products and services, as well as leasehold improvements related to additional office space at ANGI. The increase in stock-based compensation expense was due primarily to the issuance of new equity awards since the prior year period and a net increase in modification charges, partially offset by the vesting of awards.
See "services.Note 4—Goodwill and Intangible Assets" to the combined financial statements included in "Item 1. Combined Financial Statements" for a detailed description of the Desktop goodwill and indefinite-lived intangible asset impairments.
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 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.

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At March 31, 2020,2021, there was $161.1$441.4 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.35.8 years.
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Adjusted EBITDA
Three Months Ended March 31,
Three Months Ended March 31, 2021$ Change% Change2020
2020 $ Change % Change 2019 (Dollars in thousands)
(Dollars in thousands)
ANGI Homeservices$34,397
 $(2,782) (7)% $37,179
Angi Inc.Angi Inc.$23,186 $(11,211)(33)%$34,397 
Vimeo(11,408) 4,792
 30% (16,200)Vimeo1,796 13,204 NM(11,408)
Dotdash7,011
 (139) (2)% 7,150
Dotdash19,922 12,911 184%7,011 
Applications10,151
 (19,537) (66)% 29,688
Ask Media Group6,831
 (4,144) (38)% 10,975
SearchSearch18,386 5,256 40%13,130 
Emerging & Other(23,811) (10,741) (81)% (13,070)Emerging & Other11,964 31,923 NM(19,959)
Corporate(31,386) (11,166) (55)% (20,220)Corporate(26,352)5,034 16%(31,386)
Total$(8,215) $(43,717) NM $35,502
Total$48,902 $57,117 NM$(8,215)
     
As a percentage of revenue(1)%   6%As a percentage of revenue6%(1)%
For a reconciliation of net lossearnings (loss) attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.shareholders to operating loss to combined Adjusted EBITDA, see "Principles of Financial Reporting." For a reconciliation of operating income (loss) income to Adjusted EBITDA for the Company's reportable segments, see "Note 8—Segment Information" to the combined financial statements included in "Item 1—Consolidated and Combined Financial Statements."
•ANGIAngi Inc. Adjusted EBITDA decreased 7%33% to $34.4$23.2 million, despite higher revenue, due primarily to an increase in cost of revenue, an increase in compensation expense due to increased European losses commission expense and headcount, a $6.0 million charge related to the acquisition of an additional 21% interest in MyBuilder at a premium to fair value, $4.0 million in expense related to impairments at the Fixd Services business and from management changes in the first quarter of 2021, and an increase of $3.5$1.3 million in bad debt expenseprovision for credit losses due to higher Marketplace Revenue and the impact from COVID-19 on expected credit losses.Revenue.
•Vimeo Adjusted EBITDA improved $13.2 million to $1.8 million from a loss decreased 30% toof $11.4 million due primarily to higher revenue, and lower marketing expense, partially offset by higher compensation expense due primarily to an increase in headcount and an increase in professional fees, including its sales force, and a charge of $0.7 millioncosts related to the termination of a lease.Spin-off, and higher advertising costs.
•Dotdash Adjusted EBITDA decreased 2%increased 184% to $7.0$19.9 million despite higher revenue, due primarily to higher revenue and a decrease in the provision for credit losses which had had been established in the first quarter of 2020 in response to COVID-19, partially offset by increases in compensation expense, an increase in expense for third-party contractors engaged in improving the user's experience and an increase in bad debtadvertising expense due, in part, to the impact of COVID-19 on expected credit losses..
•ApplicationsSearch Adjusted EBITDA decreased 66%increased 40% to $10.2 million due primarily to a decrease in revenue.
•Ask Media Group Adjusted EBITDA decreased 38% to $6.8$18.4 million due to an increase in traffic acquisition costs, partially offset by lowerAsk Media Group revenue and the decrease of $15.2 million in marketing at Desktop as wellwe substantially reduced marketing of its B2C products in early March 2021 as from the impacta result of COVID-19.Google policy changes.
•Emerging & Other Adjusted EBITDA loss increased $10.7$31.9 million to $23.8$12.0 million from a loss of $20.0 million due primarily to increased revenue at Care.com, $13.5 million in transaction-related items in 2020 from the Care.com acquisition (including $8.7$8.7 million in deferred revenue write-offs and $4.8 million in transaction-related costs), increased losses at Bluecrew and losseshigher profits at IAC Films and Nursefly, partially offset by lower losses at College Humor Media.Films.
•Corporate Adjusted EBITDA loss increased 55%decreased 16% to $31.4$26.4 million due primarily to higher professional fees, including $7.6the inclusion in 2020 of $7.6 million in costs related to the Separation.MTCH Separation, partially offset by an increase of $4.1 million in costs related to the Spin-off.

Interest expense
 Three Months Ended March 31,
 2021$ Change% Change2020
 (Dollars in thousands)
Interest expense$6,680$4,463201%$2,217
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Interest expense
 Three Months Ended March 31,
 2020 $ Change % Change 2019
 (Dollars in thousands)
Interest expense$2,217 $(1,050) (32)% $3,267
Interest expense in 2020 decreased2021 increased from 20192020 due primarily to the issuance of the ANGI Group Senior Notes in August 2020, partially offset by a decrease in interest expense on the ANGI Group Term Loan due to lower interest rates and the decrease in the average outstanding balance of the ANGI Term Loan compared to the prior year period.
Unrealized gain on investment in MGM Resorts International
 Three Months Ended March 31,
 2021$ Change% Change2020
 (Dollars in thousands)
Unrealized gain on investment in MGM Resorts International$382,540$382,540NM$—
The Company recognized an unrealized gain of $382.5 million on its investment in MGM Resorts International ("MGM") during the first quarter of 2021. During the second and third quarters of 2020, the Company purchased a total of 59.0 million shares of MGM.
Other expense,income (expense), net
 Three Months Ended March 31,
 2020 $ Change % Change 2019
 (Dollars in thousands)
Other expense, net$57,448 $52,031 961% $5,417
 Three Months Ended March 31,
 2021$ Change% Change2020
 (Dollars in thousands)
Other income (expense), net$13,650$71,098NM$(57,448)
Other income, net in 2021 includes: an unrealized increase of $12.8 million in the estimated fair value of a warrant; a gain of $10.2 million related to the sale of Vimeo’s retained interest in its former hardware business; and $11.8 million of foreign exchange losses primarily relating to the substantial liquidation of certain foreign subsidiaries.
Other expense, net in 2020 includes: $51.5 million in impairments (downward adjustments) related to investments in equity securities without readily determinable fair values and $7.5 million in impairments of a note receivable and a warrant related to certain investees due to the impact of COVID-19; and $4.4 million of interest income.
Other expense, net in 2019 includes: $8.1 million in a realized loss related to the sale of a business; and $4.3$4.5 million of interest income.
Income tax (provision) benefit
Three Months Ended March 31,
Three Months Ended March 31, 2021$ Change% Change2020
2020 $ Change % Change 2019 (Dollars in thousands)
(Dollars in thousands)
Income tax benefit$41,432 $12,238 42% $29,194
Income tax (provision) benefitIncome tax (provision) benefit$(48,782)$(90,214)NM$41,432
Effective income tax rate11% 68%Effective income tax rate13%11%
For further details of income tax matters, see "Note 2—Income Taxes" to the combined financial statements included in "Item 1. Consolidated and Combined Financial Statements."
In 2021, the income tax provision represented an effective tax rate of 13%. The effective income tax rate was lower than the statutory rate of 21% due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards, partially offset by state taxes.
In 2020, the Company recorded an income tax benefit of $41.4 million, which represented an effective tax rate of 11%. The effective income tax rate was lower than the statutory rate of 21% due primarily to the non-deductible portion of the Desktop goodwill impairment charge and unbenefited losses related to other investment impairments, partially offset by a revaluation of net operating loss deferred taxes due to the CARESCoronavirus Aid, Relief, and Economic Security Act.
In 2019, the Company recorded an income tax benefit
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Table of $29.2 million, which represented an effective tax rate of 68%. The effective income tax rate was higher than the statutory rate of 21% due primarily to excess tax benefits generated by the exercise and vesting of stock-based awards.Contents

Net (loss) earningsloss attributable to noncontrolling interests
Noncontrolling interests represent the noncontrolling holders’ percentage share of earnings or losses from the subsidiaries in which the Company holds a majority, but less than 100%, ownership interest and the results of which are included in our combined financial statements.
 Three Months Ended March 31,
 2020 $ Change % Change 2019
 (Dollars in thousands)
Net (loss) earnings attributable to noncontrolling interests$(2,372) $(2,946) NM $574

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 Three Months Ended March 31,
 2021$ Change% Change2020
 (Dollars in thousands)
Net loss attributable to noncontrolling interests$(227)$2,145(90)%$(2,372)
Net (loss) earningsloss attributable to noncontrolling interests in 20202021 and 20192020 primarily represents the publicly-held interest in ANGI'sAngi Inc.'s earnings.

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PRINCIPLES OF FINANCIAL REPORTING
The Company reports Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles ("GAAP"). This measure is one of the primary metrics by which we evaluate the performance of our businesses, on which our internal budgets are based and by which management is compensated. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The Company endeavors to compensate for the limitations of the non-GAAP measure presented by providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measure, which we discuss below.
Definition of Non-GAAP Measure
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") 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, if applicable, and (ii) gains and losses recognized on changes in the fair value of contingent consideration arrangements. We believe this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature. Adjusted EBITDA has certain limitations because it excludes the impact of these expenses.
The following table reconciles net lossearnings (loss) attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.shareholders to operating loss to combined Adjusted EBITDA:
Three Months Ended March 31,
Three Months Ended March 31, 20212020
2020 2019 (In thousands)
(In thousands)
Net loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.$(328,199) $(14,247)
Net earnings (loss) attributable to IAC shareholdersNet earnings (loss) attributable to IAC shareholders$329,128 $(328,199)
Add back:   Add back:
Net (loss) earnings attributable to noncontrolling interests(2,372) 574
Income tax benefit(41,432) (29,194)
Other expense, net57,448
 5,417
Net loss attributable to noncontrolling interestsNet loss attributable to noncontrolling interests(227)(2,372)
Income tax provision (benefit)Income tax provision (benefit)48,782 (41,432)
Other (income) expense, netOther (income) expense, net(13,650)57,448 
Unrealized gain on investment in MGM Resorts InternationalUnrealized gain on investment in MGM Resorts International(382,540)— 
Interest expense2,217
 3,267
Interest expense6,680 2,217 
Operating loss(312,338) (34,183)Operating loss(11,827)(312,338)
Add back:Add back:
Stock-based compensation expense37,181
 34,675
Stock-based compensation expense22,702 37,181 
Depreciation15,492
 11,140
Depreciation19,301 15,492 
Amortization of intangibles45,759
 22,341
Amortization of intangibles18,726 45,759 
Acquisition-related contingent consideration fair value adjustments(6,282) 1,529
Acquisition-related contingent consideration fair value adjustments— (6,282)
Goodwill impairment211,973
 —
Goodwill impairment— 211,973 
Adjusted EBITDA$(8,215) $35,502
Adjusted EBITDA$48,902 $(8,215)
For a reconciliation of operating (loss) income to Adjusted EBITDA for the Company's reportable segments, see "Note 8—Segment Information" to the combined financial statements included in "Item 1—Consolidated and Combined Financial Statements."
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Non-Cash Expenses That Are Excluded From Our Non-GAAP Measure
Stock-based compensation expense consists principally of expense associated with awards issued by certain of the combined subsidiaries of New IAC and an allocation of expense from IAC related to awards issued to New IAC employees that were granted under various IAC stock and annual incentive plans.plans and expense related to awards issued by certain subsidiaries of the Company. These expenses are not paid in cash.cash and we view the economic costs of stock-based awards to be the dilution to our share base; we also include the related shares in our fully diluted shares outstanding for GAAP earnings per share using the treasury stock method. The Company is currently settling all stock-based awards on a net basis; IAC remits the required tax-withholding amounts for net-settled awards from its current funds.
Depreciation is a non-cash expense relating to our property,building, capitalized software, leasehold improvements and equipment and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.

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Amortization of intangible assets and impairments of goodwill and intangible assets are non-cash expenses related primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as technology, service professional relationships, customer lists and user base, memberships, trade names and content, are valued and amortized over their estimated lives. Value is also assigned to acquired indefinite-lived intangible assets, which comprise trade names and trademarks, and goodwill that are not subject to amortization. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairments of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.
Gains and losses recognized on changes in the fair value of contingent consideration arrangements are accounting adjustments to report contingent consideration liabilities at fair value. These adjustments can be highly variable and are excluded from our assessment of performance because they are considered non-operational in nature and, therefore, are not indicative of current or future performance or the ongoing cost of doing business.

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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Financial Position
 March 31, 2020 December 31, 2019
 (In thousands)
ANGI cash and cash equivalents:   
United States$370,711
 $377,648
All other countries13,519
 12,917
Total ANGI cash and cash equivalents384,230
 390,565
    
New IAC (excluding ANGI) cash and cash equivalents, short-term investments and marketable securities:   
United States1,588,101
 392,521
All other countries56,740
 56,710
Total cash and cash equivalents1,644,841
 449,231
Short-term investments (United States)20,000
 —
Marketable securities (United States)49,912
 —
Total New IAC (excluding ANGI) cash and cash equivalents, short-term investments and marketable securities1,714,753
 449,231
    
Total cash and cash equivalents, short-term investments and marketable securities$2,098,983
 $839,796
March 31, 2021December 31, 2020
(In thousands)
Angi Inc. cash and cash equivalents and marketable debt securities:
United States$756,860 $793,679 
All other countries20,181 19,026 
      Total cash and cash equivalents777,041 812,705 
Marketable debt securities (United States)— 49,995 
Total Angi Inc. cash and cash equivalents and marketable debt securities777,041 862,700 
Vimeo cash and cash equivalents:
United States313,433 107,018 
All other countries2,872 2,993 
Total Vimeo cash and cash equivalents316,305 110,011 
IAC (excluding Angi Inc. and Vimeo) cash and cash equivalents and marketable debt securities:
United States2,751,169 2,466,404 
All other countries71,033 87,068 
Total cash and cash equivalents2,822,202 2,553,472 
Marketable debt securities (United States)— 174,984 
Total IAC (excluding Angi Inc. and Vimeo) cash and cash equivalents and marketable debt securities2,822,202 2,728,456 
Total cash and cash equivalents and marketable debt securities$3,915,548 $3,701,167 
Long-term debt:   Long-term debt:
ANGI Term Loan$244,063
 $247,500
Less: current portion of ANGI Term Loan13,750
 13,750
ANGI Group Senior NotesANGI Group Senior Notes$500,000 $500,000 
ANGI Group Term LoanANGI Group Term Loan213,125 220,000 
Total long-term debtTotal long-term debt713,125 720,000 
Less: unamortized debt issuance costs1,670
 1,804
Less: unamortized debt issuance costs7,138 7,723 
Total long-term debt, net$228,643
 $231,946
Total long-term debt, net$705,987 $712,277 
New IAC and ANGI Long-term DebtThe Company's international cash can be repatriated without significant tax consequences.
For a detailed description of long-term debt, see "Note 6—5—Long-term Debt" to the combined financial statements included in "Item 1. Consolidated and Combined Financial Statements."As of May 6, 2021, the outstanding balance of the ANGI Group Term Loan of $213.1 million was repaid in its entirety.
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Cash Flow Information
In summary, New IAC's cash flows are as follows:
Three Months Ended March 31, Three Months Ended March 31,
2020 2019 20212020
(In thousands)(In thousands)
Net cash provided by (used in)   Net cash provided by (used in)
Operating activities$39,171
 $2,594
 Operating activities$53,872 $39,171 
Investing activities$(518,610) $5,660
 Investing activities$205,019 $(518,610)
Financing activities$1,671,816
 $(63,947) Financing activities$194,413 $1,671,816 
Net cash provided by operating activities consists of earnings adjusted for non-cash items, the effect of changes in working capital and acquisition-related contingent consideration payments (to the extent greater than the liability initially recognized at the time of acquisition). Non-cash adjustments include the unrealized gain on the investment in MGM, goodwill impairments,impairment, net (gains) losses on equity securities, deferred income taxes, amortization of intangibles, stock-based compensation expense, provision for credit losses, and depreciation.
2021
Adjustments to earnings consist primarily of $382.5 million of unrealized gain on the investment in MGM, partially offset by $47.2 million of deferred income taxes, bad$22.7 million of stock-based compensation expense, $19.4 million of provision for credit losses, $19.3 million of depreciation, and $18.7 million of amortization of intangibles. The decrease from changes in working capital primarily consists of an increase in accounts receivable of $42.8 million and a decrease in accounts payable and other liabilities of $8.5 million, partially offset by an increase in deferred revenue of $28.3 million and a decrease in other assets of $11.7 million. The increase in accounts receivable is due primarily to revenue growth at Angi Inc. and the timing of cash receipts at Mosaic. The decrease in accounts payable and other liabilities is due, in part, to a decrease in accrued employee compensation related to the payment of 2020 cash bonuses in 2021 and payment of commissions, partially offset by an increase in accrued advertising and related payables at Angi Inc. The increase in deferred revenue is due primarily to growth in subscription sales at Care.com and Vimeo. The decrease in other assets is due primarily to decreases in capitalized downloadable search toolbar costs at Search and prepaid hosting services at Corporate and Angi Inc.
Net cash provided by investing activities includes maturities of marketable debt expense,securities of $225.0 million, partially offset by capital expenditures of $20.4 million, primarily related to investments in capitalized software at Angi Inc. to support its products and depreciation.services, and purchases of long-term investments of $7.2 million, primarily related to Turo.

Net cash provided by financing activities includes $299.8 million of net proceeds from the issuance of 9.0 million shares of Vimeo Class A voting stock, partially offset by $48.2 million for withholding taxes paid on behalf of Angi Inc. employees for stock-based awards that were net settled, $23.0 million for withholding taxes paid on behalf of IAC employees for stock-based awards that were net settled, $22.9 million for the purchase of redeemable noncontrolling interests, $6.9 million for the prepayment of the ANGI Group Term Loan required quarterly payment that was otherwise due in the first quarter of 2022, $4.9 million for the repurchase of 0.4 million shares of Angi Inc. Class A common stock, on a settlement date basis, at an average price of $11.85 per share, and $1.4 million of debt issuance costs related to the Vimeo Credit Facility.
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2020
Adjustments to earnings consist primarily of a $212.0 million goodwill impairment, $51.5 million of impairments of certain equity securities without readily determinable fair values, $45.8 million of amortization of intangibles, including impairments of $21.4 million, $37.2 million of stock-based compensation expense, $19.9 million of bad debt expense,provision for credit losses, and $15.5 million of depreciation, partially offset by $13.8 million of deferred income taxes. The deferred income tax benefit primarily relates to the net operating loss created in the first quarter, the tax benefit on intangible and goodwill impairments, and an adjustment to deferred taxes resulting from a true-up of thea state tax rate, partially offset by adjustments pursuant to the Coronavirus Aid, Relief, and Economic Security Act. The decrease from changes in working capital primarily consists of an increase in accounts receivable of $27.2 million, and a decrease in accounts payable and other liabilities of $8.0 million, partially offset by an increase in deferred revenue of $24.7 million. The increase in accounts receivable is primarily due to revenue growth at ANGI.Angi Inc. The decrease in accounts payable and other liabilities is due, in part, to a decrease in accrued employee compensation mainly related to the payment of 2019 cash bonuses in 2020, partially offset by an increase in accrued advertising and related payables at ANGI.Angi Inc. The increase in deferred revenue is due primarily to growth in subscription sales at Vimeo and Care.com.
Net cash used in investing activities includes cash used for acquisitions and investments of $532.9 million, principally related to the Care.com acquisition, and capital expenditures of $14.8 million, primarily related to investments at ANGIAngi Inc. in the development of capitalized software to support theirits products and services, and leasehold improvements, partially offset by a decrease in notes receivable—related party of $27.7 million.
Net cash provided by financing activities includes cash transfers of $1.7 billion from IAC pursuant to IAC's centrally managed U.S. treasury function, partially offset by $38.5 million for the repurchase of 5.2 million shares of ANGIAngi Inc. common stock, on a settlement date basis, at an average price of $7.43 per share, $3.4 million in principal payments on the ANGI debt,Group Term Loan, and $3.2 million for withholding taxes paid on behalf of ANGIAngi Inc. employees for stock-based awards that were net settled.
2019
Adjustments to earnings consist primarily of $34.7 million of stock-based compensation expense, $22.3 million of amortization of intangibles, $15.0 million of bad debt expense, and $11.1 million of depreciation, partially offset by $29.9 million of deferred income taxes. The deferred income tax benefit primarily relates to the net operating loss created by the exercise and vesting of stock-based awards. The decrease from changes in working capital primarily consists of an increase in accounts receivable of $40.3 million, a decrease in accounts payable and other liabilities of $31.8 million, partially offset by an increase in deferred revenue of $17.0 million. The increase in accounts receivable is primarily due to revenue growth at ANGI and timing of cash receipts at ANGI and Applications, including cash received in the fourth quarter of 2018 rather than in the first quarter of 2019. The decrease in accounts payable and other liabilities is primarily due to a decrease in accrued employee compensation mainly related to the payment of 2018 cash bonuses in 2019. The increase in deferred revenue is due primarily to growth in subscription sales at Vimeo and Applications.
Net cash provided by investing activities includes proceeds from maturities of marketable debt securities of $25.0 million, net proceeds from the sale of businesses and investments of $20.3 million, principally related to the December 31, 2018 sale of Felix, partially offset by cash used for acquisitions of $21.6 million, principally related to the Fixd Repair acquisition, and capital expenditures of $15.9 million, primarily related to investments in the development of capitalized software at ANGI to support their products and services.
Net cash used by financing activities includes cash transfers of $38.9 million to IAC pursuant to IAC's centrally managed U.S. treasury function, $16.5 million for withholding taxes paid on behalf of ANGI employees for stock-based awards that were net settled and $3.4 million in principal payments on ANGI debt.

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Liquidity and Capital Resources
During the first quarter of 2020, IAC contributed $1.1 billion in cash to New IAC in connection with the transferFinancing Arrangements
The outstanding balance of the centrally-managed U.S. treasury function from January 1, 2020 to New IAC. Prior to the Separation, New IAC's principal sourcesANGI Group Term Loan as of liquidity are our cash and cash equivalents, including the funding we received from IAC, short-term investments and marketable securities, and available borrowings under the IAC Group Credit Facility. New IAC's combined cash and cash equivalents, short-term investments and marketable securities at March 31, 2020 were $2.1 billion,2021 was $213.1 million and bore interest at LIBOR plus 2.00%, or 2.10%. As of which $384.2 million was held by ANGI. New IAC generated $39.2 millionMay 6, 2021, the outstanding balance of operating cash flows for three months ended March 31, 2020, of which $55.9 million was generated by ANGI. ANGI is a separate and distinct legal entity with its own public shareholders and board of directors and has no obligation to provide New IAC with funds. As a result, New IAC cannot freely access the cash of ANGI and its subsidiaries. In addition, certain agreements governing ANGI indebtedness limit the payment of dividends or distributions and loans or advances to stockholders, including New IAC, in the event a default has occurred or in the case of ANGI, its consolidated net leverage ratio (as defined in the ANGI Group Term Loan) exceeds 4.5 to 1.0. There were no such limitations at March 31, 2020.Loan was repaid its entirety.
The IACANGI Group CreditRevolving Facility of $250 million and the ANGI Credit Facility of $250 million expireexpires on November 5, 2023. At March 31, 2021 and December 31, 2020, there were no outstanding borrowings under these credit facilities.the ANGI Group Revolving Facility. The annual commitment fee, on undrawn fundswhich is based on theANGI Group's consolidated net leverage ratio (as defined in each agreement) most recently reported and the average daily dollar amount of the available revolving commitments, was 2035 basis points and 25 basis points for the IAC Group Credit Facility andat March 31, 2021. Borrowings under the ANGI CreditGroup Revolving Facility respectively. Borrowings under these credit facilities bear interest, at each respective company'sANGI Group's option, at either a base rate or LIBOR, in each case plus an applicable margin, which is determined based on each company'sANGI Group's consolidated net leverage ratio.
New IAC anticipatesThe ANGI Group Credit Agreement contains covenants that it will needwould limit ANGI Group's ability to pay dividends or make capitaldistributions in the event a default has occurred or if ANGI Group's consolidated net leverage ratio (as defined in the ANGI Group Credit Agreement) exceeds 4.25 to 1.0. There were no such limitations at March 31, 2021. Any borrowings under the ANGI Group Credit Agreement are guaranteed by ANGI Group's wholly-owned material domestic subsidiaries and other expenditures in connection withare secured by substantially all assets of ANGI Group and the developmentguarantors, subject to certain exceptions.
On February 12, 2021, Vimeo entered into a $100 million revolving credit facility, which expires on February 12, 2026. Any borrowings under the Vimeo Credit Facility are guaranteed by Vimeo's wholly-owned material domestic subsidiaries, if any, and expansionare secured by substantially all assets of its operations. New IAC's 2020 capital expenditures are expectedVimeo and any guarantors, subject to be lower than 2019 capital expenditures of $97.9 million by approximately 35% to 40%, driven by lower capital expenditures at Corporate due to timing of payments related tocertain exceptions. The commitment fee, which is based on the purchase of a 50% interest in an aircraftconsolidated net leverage ratio most recently reported and lower leasehold improvements at ANGI. The remaining payment of $13.1 million related to the purchaseaverage daily dollar amount of the 50%available revolving commitment, was 20 basis points at March 31, 2021. Any borrowings under the Vimeo Credit Facility would bear interest, at Vimeo's option, at either a base rate or LIBOR, in each case plus an aircraftapplicable margin, which is expecteddetermined by reference to be madea pricing grid based on Vimeo's consolidated net leverage ratio. At March 31, 2021, there were no outstanding borrowings under the Vimeo Credit Facility.
Share Repurchase Authorizations and Activity
At March 31, 2021 IAC has 8.0 million shares remaining in the second quarterits share repurchase authorization.
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During the three months ended March 31, 2020, ANGI2021, Angi Inc. repurchased 5.10.4 million shares of its Class A common stock, on a trade date basis, of its common stock at an average price of $7.40$11.85 per share, or $37.5$4.9 million in aggregate. From April 1, 2020 through May 5, 2020, ANGI repurchased an additional 2.5 million shares at an average price of $6.18 per share, or $15.4 million in aggregate. ANGIAngi Inc. has 20.118.9 million shares remaining in its share repurchase authorization as of May 5, 2020.March 31, 2021.
ANGIIAC and Angi Inc. may purchase their shares over an indefinite period of time on the open market and in privately negotiated transactions, depending on those factors management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.
Historically, Outstanding Stock-based Awards
IAC has grantedand Angi Inc. may settle stock options, stock settled stock appreciation rights, to employeesrestricted stock units ("RSUs") and management of those subsidiariesrestricted stock on a gross or a net basis based upon factors deemed relevant at the time.To the extent that are denominated in the equity of certain of the non-publicly traded subsidiaries comprising New IAC. Prior to the Separation, these equity awards have been and will beare settled on a net basis, the holders of the awards receive shares of IAC or Angi Inc., as applicable, with a value equal to the fair value of the award holder entitled to receive IAC shareson the vest date for RSUs and restricted stock and with a value equal to the intrinsic value of the award upon settlementexercise for stock options or stock settled appreciation rights less, an amount equal to the required cash tax withholding payment, which has been and will be paid by IAC. Subsequent to the Separation, these equity awards will continue to be settled on a net basis, with the award holder entitled to receive New IAC shares rather than IAC shares equal to the intrinsic value of the award upon settlement lessin each case, an amount equal to the required cash tax withholding payment, which will be paid by New IAC. IAC or Angi Inc., as applicable, on the employee's behalf.All awards are being settled currently on a net basis.
Certain previously issued Angi Inc. stock appreciation rights are settleable in either shares of Angi Inc. common stock or shares of IAC common stock at IAC's option.If settled in IAC common stock, Angi Inc. reimburses IAC in shares of Angi Inc.'s common stock.
The following table summarizes (i) the aggregate intrinsic value of these awardsIAC options, Angi Inc. options, Angi Inc. stock settled stock appreciation rights, IAC and Angi Inc. non-publicly traded subsidiary denominated stock settled stock appreciation rights and (ii) the aggregate fair value (based on stock prices as of April 30, 2021) of IAC and Angi Inc. RSUs and IAC restricted stock outstanding at May 1, 2020 is $42.1 million;as of that date; assuming these awards were net settled on May 1, 2020,that date, the withholding taxes that would be paid by the Company on behalf of employees upon exercise or vesting that would be payable (assuming these equity awards are $21.1 million, assumingnet settled with a 50% withholding rate,tax rate), and IACthe shares that would have been issued 0.1 million common shares. To the extent these awards are settled subsequent to the Separation, theas follows:
Aggregate intrinsic value / fair value of awards outstandingEstimated withholding taxes payable on vested shares and shares that will vest by March 31, 2022Estimated withholding taxes payable on shares that will vest after March 31, 2022Estimated IAC shares to be issued
(In thousands)
IAC
Stock settled appreciation rights denominated in shares of certain non-publicly traded IAC subsidiaries other than Angi Inc. subsidiaries(a)(b)
$38,887 $13,185 $6,259 77 
IAC denominated stock options(c)
889,777 444,889 — 1,755 
IAC RSUs(d)
325,703 26,549 127,374 678 
IAC restricted stock(e)
643,491 — 321,745 1,269 
Total IAC outstanding employee stock-based awards1,897,858 484,623 455,378 3,779 
Angi Inc.
Angi Inc. stock appreciation rights15,283 7,642 — See footnote (g) below
Other Angi Inc. equity awards(a)(f)
167,304 20,424 62,008 See footnote (g) below
Total Angi Inc. outstanding employee stock-based awards182,587 28,066 62,008 
Total outstanding employee stock-based awards$2,080,445 $512,689 $517,386 
_______________
(a)    The number of New IAC shares ultimately needed to settle these awards and the cash withholding tax obligation may vary significantly as a result of the determination of the fair value of the relevant subsidiary.subsidiary at the time of exercise. In addition, the number of New IAC shares required to settle these awards will be impacted by movement in New IAC'sthe stock price.price of IAC.
Certain equity
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(b)Excludes the aggregate intrinsic value/fair value of Vimeo stock settled stock appreciation rights and RSUs. The aggregate intrinsic value/fair value of Vimeo outstanding awards issued prioras of April 30, 2021, assuming a per share price of $35.35, which is equal to the Combinationper share price of Vimeo based upon a $5.7 billion pre-money valuation, is $453.7 million. Of this amount, $154.3 million is attributable to employeescurrently vested awards. After the Spin-off, these awards will be settled in shares of ANGI and denominated inSpinCo common stock. Vimeo management currently plans to require individual award holders to pay his or her share of the withholding tax obligation, which he or she will generally be able to do by selling SpinCo common shares (including a portion of the shares of those subsidiaries may be settled using IAC shares at IAC's election. Subsequent to the Separation, these awards may be settled using New IAC shares at New IAC's election.

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ANGI currently settles all equity awards on a net basis. Inreceived in connection with the Combination, previously issued stock appreciation rights relatedapplicable exercise).
(c)    The Company has the discretion to settle these awards net of withholding tax and exercise price (which is represented in the common stock of HomeAdvisor (US) were converted into ANGI stock appreciation rights that are settleable, at ANGI's option, on a net basis with ANGI remitting withholding taxes on behalf of the employeetable above) or settle on a gross basis with ANGI issuingand require the award holder to pay its share of the withholding tax, which he or she may do so by selling IAC common shares. Assuming all IAC stock options outstanding on April 30, 2021 were settled on a sufficientgross basis, i.e., through the issuance of a number of Class AIAC common shares equal to cover the withholding taxes. While these awards can be settlednumber of stock options exercised, the Company would have issued 3.8 million common shares and would have received $80.9 million in either Class A sharescash proceeds.
Upon completion of ANGI orthe Spin-off, each option to purchase shares of IAC common stock at IAC'swill convert into one option these awards are currently being settled into purchase shares of ANGI. The aggregate intrinsicIAC common stock and a number of options to purchase shares of SpinCo common stock equal to the spin-off ratio, with the option exercise prices based on (i) the value of these awardsIAC common stock prior to the Spin-off and (ii) the value of IAC common stock and the value of SpinCo common stock after giving effect to the Spin-off. Based upon (i) the number of IAC options outstanding on April 30, 2021; (ii) the closing stock price of IAC on April 30, 2021 of $253.47 per share; and (iii) the per share price of Vimeo common stock of $35.35 per share (from the equity raise in January 2021 at May 1, 2020the $5.7 billion pre-money valuation), approximately $100 million of this withholding obligation would relate to SpinCo options that will be issued in the transaction. This estimate is $71.4 million, assuming these awards were net settled on May 1, 2020preliminary and will ultimately depend upon (i) the number of IAC options outstanding immediately prior to the Spin-off; (ii) the value of IAC common stock prior to the Spin-off; and (iii) the value of IAC common stock and the value of SpinCo common stock after giving effect to the Spin-off.
(d),    Approximately 85% of the estimated withholding taxes payable on shares that would be payablewill vest after March 31, 2022 is related to awards that are scheduled to cliff vest on the $35.7 millionfive-year anniversary of the grant date in 2025.
, assuming a 50% withholding rate, and ANGI would have issued 5.3 million(e)    Class A shares. The aggregate intrinsic valueOn November 5, 2020, the Company granted 3.0 million shares of all other ANGI equity awards, includingIAC restricted common stock to its CEO, that cliff vest on the ten-year anniversary of the grant date based on satisfaction of IAC's stock price targets and continued employment through the vesting date.
(f)    Includes stock options, RSUs and subsidiary denominated equity at May 1, 2020 is $82.5 million; assuming these awards were net settled on May 1, 2020, the withholding taxes that would be payable are $41.3 million, assuming a 50% withholding rate, and ANGI would have issued 6.1 million Class A shares.equity.
IAC has granted stock options to employees of New IAC. At May 1, 2020, the aggregate intrinsic value, calculated as the difference between IAC's closing stock price on May 1, 2020(g)    and the exercise price, multiplied by the number of in-the-money awards that would have been exercised had all award holders exercised their awards, is $698.7 million. In connection with the Separation, IAC denominated stock options that are outstanding as of December 19, 2019, and immediately priorPursuant to the completionemployee matters agreement between IAC and Angi Inc., certain stock appreciation rights of the Transaction, willAngi, Inc. and equity awards denominated in shares of Angi Inc.'s subsidiaries may be converted intosettled in either shares of Angi Inc. common stock options to purchase Newor IAC common stock and stock options to purchase New Match common stock in a manner that preservesstock. To the spread value of the stock options immediately before and immediately after the adjustment, with the allocation between the two stock options based on the value of a share of New IAC common stock relative to the value of a share of New Match common stock multiplied by the Reclassification Exchange Ratio. IAC denominated stock options that are granted on or after December 20, 2019 and outstanding immediately prior to the completion of the Transactions, will be converted into stock options to purchase New IAC common stock on the same terms and conditions applicable to the existing equity award, with equitable adjustments to the number of shares of New IAC common stock covered by the option and the applicable option exercise price. Assuming all stock options outstanding on May 1, 2020 were net settled on that date, withholding taxes, which will be paid by IAC for periods prior to the Separation and by New IAC and New Match for periods subsequent to the Separation on behalf of the employees upon exercise, would have been $349.4 million in aggregate (of which $316.6 million is related to vested stock options and $32.7 million is related to unvested stock options) assuming a 50% withholding rate.
IAC's RSUs are awards in the form of phantom shares or units denominated in a hypothetical equivalent number ofextent shares of IAC common stock. These awardsstock are settled on a net basis. The numberissued in settlement of IAC common shares that would be required to net settle these awards, Angi Inc. is obligated to reimburse IAC for the cost of those shares by issuing shares of Angi Inc. common stock.
Capital Expenditures
The Company anticipates that it will need to make capital expenditures in connection with the development and expansion of its operations. The Company's 2021 capital expenditures are expected to be higher than 2020 capital expenditures of $61.6 million by approximately 60% to 70%, due primarily to increased investments in capitalized software to support the development of products and services at May 1, 2020 is 0.1 million shares. In addition, withholding taxes, which will be paid by IAC on behalfAngi Inc. and payments related to the purchase of the employees upon vest, would have been $23.9 million at May 1, 2020, assuming a 50% withholding rate. Subsequent tointerest in an aircraft at Corporate, the Separation, these equity awards will continuefinal payment for which is expected to be settled on a net basis, withmade in the award holder entitled to receive New IAC shares rather than IAC shares and the required cash tax withholding payment, paid by New IAC.third quarter of 2021.
Liquidity Assessment
As of March 31, 2020, New IAC's economic interest2021, the Company's consolidated cash and voting interestcash equivalents was $3.9 billion, of which $777.0 million and $316.3 million was held by Angi Inc. and Vimeo, respectively. The cash and cash equivalents held at Vimeo will be included in the Spin-off and IAC will not retain any portion thereof. The Company's outstanding debt of $713.1 million is a liability of Angi Inc., of which $213.1 million, representing the full outstanding balance of the ANGI is 84.9% and 98.3%, respectively. New IAC intends to take steps if necessary to maintain an economic interestGroup Term Loan, was repaid in ANGIits entirety as of at least 80%.
AtMay 6, 2021. The Company generated $53.9 million of operating cash flows for the three months ended March 31, 2020, New IAC’s international2021, of which $15.3 million and $0.9 million was generated by Angi Inc. and Vimeo, respectively. Angi Inc. is a separate and distinct legal entity with its own public shareholders and board of directors and has no obligation to provide the Company with funds. As a result, the Company cannot freely access the cash can be repatriated without significant tax consequences.of Angi Inc. and its subsidiaries.
New IACThe Company believes its existing cash and cash equivalents short-term investments, marketable securities, available borrowings under the IAC Group Credit Facility and expected positive cash flows generated from operations along with the cash that will be contributed to New IAC prior to the Separation, including the $685 million in proceeds from the Match loan (described below), will be sufficient to fund its normal operating requirements, including capital expenditures, debt service, the payment of withholding taxes paid on behalf of employees for net-settled stock-based awards, and investing and other commitments for the foreseeable future. New IAC's
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The Company's liquidity could be negatively affected by a decrease in demand for itsour products and services due to COVID-19 or other factors. As described in the "COVID-19 Update"Update and Impairments" section above, to date, the COVID-19 outbreak and measures designed to curb its spread have adversely impactedhad an adverse impact on certain of New IACthe Company's businesses. The longer the global outbreak and measures designed to curb the spread of the COVID-19 outbreak have adverse impacts on economic conditions generally, the greater the adverse impact is likely to be on New IAC'sthe Company's business, financial condition and results of operations. New IAC’s indebtednessThe Company's capital structure could limit its ability to: (i) obtain additional financing to fund working capital needs, acquisitions, capital expenditures, debt service or other requirements; and (ii) use operating cash flow to make acquisitions or capital expenditures, or invest in other areas, such as developing business opportunities. New IAC'sThe Company's ability to obtain additional financing could also be impacted by any disruptions in the financial markets caused by COVID-19 or otherwise. New IACThe Company may need to raise additional capital through future debt or equity financing to make additional acquisitions and investments. Additional financing may not be available on terms favorable to New IACthe Company or at all.

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CONTRACTUAL OBLIGATIONS
DuringAS OF MARCH 31, 2021

 Payments Due by Period
Contractual Obligations(a)
Less Than
1 Year		1–3
Years		3–5
Years		More Than
5 Years		Total
 (In thousands)
Long-term debt(b)
$23,461 $259,233 $38,750 $548,438 $869,882 
Operating leases(c)
39,321 75,548 60,528 220,792 396,189 
Purchase obligations(d)
85,314 46,339 — — 131,653 
Total contractual obligations$148,096 $381,120 $99,278 $769,230 $1,397,724 

(a)The Company has excluded $21.4 million in unrecognized tax benefits and related interest from the first quartertable above as we are unable to make a reasonably reliable estimate of 2020, IAC contributed $1.1 billionthe period in which these liabilities might be paid. For additional information on income taxes, see "Note 2—Income Taxes" to New IACthe financial statements included in "Item 1—Consolidated and Combined Financial Statements."
(b)Long-term debt at March 31, 2021 consists of $500.0 million of ANGI Group Senior Notes, which bear interest at a fixed rate of 3.875%, and $213.1 million of the ANGI Group Term Loan, which bears interest at a variable rate. The ANGI Group Term Loan bore interest at LIBOR plus 2.00%, or 2.10%, at March 31, 2021. The amount of interest ultimately paid on the variable rate debt may differ based on changes in interest rates. As of May 6, 2021, the outstanding balance of the ANGI Group Term Loan was repaid in its entirety. For additional information on long-term debt, see "Note 5—Long-term Debt" to the financial statements included in "Item 1—Consolidated and Combined Financial Statements."
(c)The Company leases land, office space, data center facilities and equipment used in connection with operations under various operating leases, the transfermajority of which contain escalation clauses. The Company is also committed to pay a portion of the centrally-managed U.S. treasury functionrelated operating expenses under certain lease agreements. These operating expenses are not included in the table above.
(d)The purchase obligations primarily consist of payments for cloud computing arrangements, a remaining payment of $13.1 million related to New IAC. If the Separation is consummated:
MTCH will make a loan to IAC50% interest in an aggregate principal amount equal to the product of (i) $3.00a corporate aircraft, and (ii) the number of shares of MTCH capital stock outstanding immediately prior to the effective time of the Separation (the ‘‘Match loan’’). As part of the Separation, all MTCH stockholders, other than IAC, in respect of each share of MTCH common stock held, may elect to receive either $3.00 in cash or an additional $3.00 worth of New Match common stock. IAC will contribute the proceeds of the Match loan, less an amount equal to the product of $3.00 multiplied by the aggregate number of shares of MTCH capital stock in respect of which MTCH stockholders have made a valid cash election, to New IAC. Based on shares outstanding on March 31, 2020, New IAC will receive a contribution of approximately $685 million, assuming all non-IAC MTCH shareholders elect to receive $3.00 in cash and an additional amount of approximately $167 million if all non-IAC MTCH shareholders elect to receive additional MTCH shares. Following the Separation, the Match loan will remain as the obligation of New Match payable to MTCH; New IAC will not have any obligations with regards to the Match loan.
New IAC’s debt immediately following the consummation of the Separation will relate solely to the ANGI Term Loan, which was $244.1 million as of March 31, 2020.
On May 6, 2020, IAC filed a registration statement on Form S-3 for an offering to sell from time to time up to $1.5 billion worth of shares of IAC Class M common stock (or New Match common stock). The net proceeds New Match receives pursuant to such sales, if any, will be transferred to New IAC following the closing of the offering (which closing would occur contemporaneously with the consummation of the Separation) and the number of shares of New Match to be received by IAC stockholders will be reduced to reflect the number of New Match shares sold in this offering.

advertising commitments.
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CONTRACTUAL OBLIGATIONS
 Payments Due by Period
Contractual Obligations(a)
Less Than
1 Year
 
1–3
Years
 
3–5
Years
 
More Than
5 Years
 Total
 (In thousands)
Long-term debt(b)
$19,575
 $60,925
 $186,243
 $—
 $266,743
Operating leases(c)
40,305
 74,275
 65,436
 239,714
 419,730
Purchase obligations(d)
82,452
 42,915
 —
 —
 125,367
Total contractual obligations$142,332
 $178,115
 $251,679
 $239,714
 $811,840

(a)
The Company has excluded $15.3 million in unrecognized tax benefits and related interest from the table above as we are unable to make a reasonably reliable estimate of the period in which these liabilities might be paid. For additional information on income taxes, see "Note 2—Income Taxes" to the combined financial statements included in "Item 1. Combined Financial Statements."
(b)
Represents contractual amounts due including interest on a variable rate instrument. Long-term debt at March 31, 2020 consists of the $244.1 million ANGI Term Loan, bearing interest at LIBOR plus 1.50%, or 2.28% at March 31, 2020. The amount of interest ultimately paid on the variable rate debt may differ based on changes in interest rates. For additional information on long-term debt, see "Note 6—Long-term Debt" to the combined financial statements included in "Item 1. Combined Financial Statements."
(c)
The Company leases land, office space, data center facilities and equipment used in connection with operations under various operating leases, the majority of which contain escalation clauses. Operating lease obligations include legally binding minimum lease payments for leases signed but not yet commenced. The Company is also committed to pay a portion of the related operating expenses under certain lease agreements. These operating expenses are not included in the table above.
(d)
The purchase obligations primarily consist of payments for cloud computing arrangements, advertising commitments, and a remaining payment of $13.1 million related to a 50% interest in a corporate aircraft.


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Item 3. Quantitative and Qualitative Disclosures about Market Risk
Interest Rate Risk
TheAt March 31, 2021, there have been no material changes to the Company's exposureinstruments or positions that are sensitive to market risk since the disclosure for changesthe year ended December 31, 2020 included in interest rates relates primarily toour Annual Report on Form 10-K, other than the Company's long-term debt, including current maturities.investment in MGM described below.
At March 31,Equity Price Risk
During the second and third quarters of 2020, the $244.1Company purchased a total of 59.0 million outstanding balanceshares of MGM. The Company's results of operations and financial condition can be materially impacted by increases or decreases in the price of MGM common shares, which are traded on the ANGI Term Loan bore interest at LIBOR plus 1.50%. As of March 31, 2020, the rate in effect was 2.28%. If LIBOR were to increase or decrease by 100 basis points, then the annual interest expenseNew York Stock Exchange on the ANGI Term Loan would increase or decrease by $2.5 million.
Foreign Currency Exchange Risk
The Company conducts businesslast trading day in certain foreign markets, primarily in various jurisdictions within the European Union, and, as a result, is exposed to foreign exchange risk for both the Euro and British Pound ("GBP").
For the three months ended March 31, 2020 and 2019, international revenue accounted for 21% and 24%, respectively, of our combined revenue. The Company has exposure to foreign currency exchange risk related to investments in foreign subsidiaries that transact business in a functional currency other than the U.S. dollar. As a result, as foreign currency exchange rates fluctuate, the translation of the statement of operations of the Company's international businesses into U.S. dollars affects year-over-year comparability of operating results.
The Company is also exposed to foreign currency transaction gains and losses to the extent it or its subsidiaries conduct transactions in and/or have assets and/or liabilities that are denominated in a currency other than the entity's functional currency.reporting period. The Company recorded foreign exchange lossesan unrealized pre-tax gain of $1.7$382.5 million and $0.1 million for the three months ended March 31, 2021. The carrying value of the Company's investment in MGM was $2.2 billion and $1.9 billion at March 31, 2021 and December 31, 2020, respectively, which are approximately 23% and 2019, respectively.
Foreign currency exchange gains or losses historically have not been material to the Company. As a result, historically, the Company has not hedged foreign currency exposures. The continued growth and expansion20% of our international operations increases our exposure to foreign exchange rate fluctuations. Significant foreign exchange rate fluctuations, in the case of one currency or collectively with other currencies, could have a significant impact on our future results of operations.

IAC's consolidated total assets.
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Item 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company monitors and evaluates on an ongoing basis its disclosure controls and procedures and internal control over financial reporting in order to improve their overall effectiveness. In the course of these evaluations, the Company modifies and refines its internal processes as conditions warrant.
Changes in Internal Control Over Financial Reporting
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), New IACthe Company’s management, including our principal executive and principal financial officers, or persons performing similar functions, evaluated the effectiveness of the Company's disclosure controls and procedures as defined by Rule 13a-15(e) under the Exchange Act. Based on this evaluation, management has concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report in providing reasonable assurance that information we are required to disclose in our filings with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.report.
There were no changes to the Company'sour internal control over financial reporting during the period covered by this reportquarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Overview
On December 19, 2019, the Company entered into a Transaction Agreement (as amended as of April 28, 2020, the "Transaction Agreement") with IAC/InterActiveCorp ("IAC"), Match Group, Inc. ("MTCH") 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. We refer to this transaction as the "Separation."
As used herein, "New IAC," the "Company," "we," "our" or "us" and similar terms refer to IAC Holdings, Inc. and its subsidiaries (unless the context requires otherwise).
In the ordinary course of business, New IAC and its subsidiaries may become parties to litigation involving property, personal injury, contract, intellectual property and other claims, as well as stockholder derivative actions, class action lawsuits and other matters. The amounts that may be recovered in such matters may be subject to insurance coverage. The litigation mattermatters described below (in which New IAC will be a defendant following the completion of the Separation) involvesinvolve issues or claims that may be of particular interest to New IAC's stockholders, following the completion of the Separation, regardless of whether any of these matters may be material to New IAC's financial position or operations based upon the standard set forth in the rules of the Securities and Exchange Commission.
Tinder Optionholder Litigation against IAC and MTCH
On August 14, 2018, ten then-current and former employees of Match Group, LLC or Tinder, Inc. ("Tinder"), an operating business of Match Group, filed a lawsuit in New York state court against IAC and MTCH.Match Group. See Sean Rad et al. v. IAC/InterActiveCorp and Match Group, Inc., No. 654038/2018 (Supreme Court, New York County). The complaint alleges that in 2017, the defendants: (i) wrongfully interfered with a contractually established process for the independent valuation of Tinder by certaintwo investment banks, resulting in a substantial undervaluation of Tinder and a consequent underpayment to the plaintiffs upon exercise of their Tinder stock options, and (ii) then wrongfully merged Tinder into MTCH,Match Group, thereby depriving the plaintiffs of their contractual right to later valuations of Tinder on a stand‑alonestand-alone basis. The complaint asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, interference with contractual relations (as against MTCHMatch Group only), and interference with prospective economic advantage, and seeks compensatory damages in the amount of at least $2 billion, as well as punitive damages. On August 31, 2018, four plaintiffs who were still employed by MTCHMatch Group filed a notice of discontinuance of their claims without prejudice, leaving the six former employees as the remaining plaintiffs.
On October 9, 2018, the defendants filed a motion to dismiss the complaint on various grounds, including that the 2017 valuation of Tinder by the investment banks was an expert determination any challenge to which is both time‑barredtime-barred under applicable law and available only on narrow substantive grounds that the plaintiffs have not pleaded in their complaint; the plaintiffs opposed the motion. On June 13, 2019, the court issued a decision and order: (i) granting the motion to dismiss the claims for breach of the implied covenant of good faith and fair dealing and for unjust enrichment, (ii) granting the motion to dismiss the merger-related claim for breach of contract as to two of the remaining six plaintiffs, and (iii) otherwise denying the motion to dismiss. On June 21, 2019, the defendants filed a notice of appeal from the trial court’scourt's partial denial of their motion to dismiss, and the parties thereafter briefed the appeal. On October 29, 2019, the Appellate Division, First Department, issued an order affirming the lower court’scourt's decision. On November 22, 2019, the defendants filed a motion for reargument or, in the alternative, leave to appeal the Appellate Division’sDivision's order to the New York Court of Appeals; the plaintiffs opposed the motion. On May 21, 2020, the Appellate Division issued an order: (i) granting the defendants’defendants' motion for reargument, vacating its prior decision, and replacing it with a new decision that affirmed the lower court’scourt's decision on different grounds, and (ii) denying the defendants’defendants' motion for leave to appeal the initial (and now vacated) decision to the Court of Appeals, without prejudice to the defendants’defendants' filing a motion for leave to appeal the new decision to the Court of Appeals.

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Appeals; the plaintiffs opposed the motion. On July 24, 2020, the Appellate Division issued an order denying the motion.
On June 3, 2019, the defendants filed a second motion to dismiss and for other relief based upon certain provisions of the plaintiffs’ agreement with a litigation funding firm; the plaintiffs opposed the motion and, on April 14, 2021, filed a supplemental opposition to the motion. The parties are currently supplementing their briefing on that motion, which remains pending.
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On July 15, 2019, the defendants filed an answer denying the material allegations of the complaint, as well as counterclaims against former Tinder CEO Sean Rad for breach of contract and unjust enrichment based upon his alleged misappropriation of confidential company information. On September 13, 2019, the defendants filed an amended answer and counterclaims, adding claims based on Rad's alleged unauthorized recording of conversations with company employees. On November 21, 2019, the defendants filed a second amended answer and counterclaims, adding claims based on Rad’sRad's alleged unauthorized destruction of company information and breach of his non-solicitation obligations.
Document discovery in the case is substantially complete; deposition discovery has begun but is currently in hiatus in light of the COVID-19 pandemic. On January 30, 2020, the parties participated in a mediation that did not result in the resolution of the matter. Fact discovery in the case is substantially complete and expert discovery is under way.
On July 12, 2020, the four individuals who earlier had discontinued their claims in the lawsuit commenced separate arbitration proceedings against IAC and MTCH believeMatch Group before the American Arbitration Association in California, asserting the same claims and seeking the same relief as the six remaining plaintiffs in the lawsuit. On September 14, 2020, the defendants filed a motion to stay the trial in the New York action in favor of the California arbitration; the plaintiffs opposed the motion. On November 16, 2020, the court denied the motion. The court has provisionally scheduled the New York action for trial commencing on November 8, 2021.
In the California arbitration, on December 8, 2020, the claimants filed a motion to stay the proceedings in favor of the New York lawsuit; the respondents opposed the motion. On December 22, 2020, the respondents requested permission to file a motion for summary judgment on the claims arising out of the merger of Tinder into Match Group; the claimants opposed the request. On January 28, 2021, the arbitrator issued a decision and order: (i) denying the claimants' motion to stay the proceedings, (ii) granting the respondents' request to file a motion for summary judgment on the merger claims, provided that the motion await the close of fact discovery in the New York lawsuit, and (iii) setting a provisional hearing date of February 7, 2022. On April 30, 2021, the respondents filed a motion for summary judgment dismissing the claimants' merger claims.
IAC believes that the allegations against themit in thisthe New York lawsuit and the California arbitration are without merit and will continue to defend vigorously against it.them.
Pursuant to the Transaction Agreement (as defined in Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations-General-Separation), Match Group has agreed to indemnify the Company for matters relating to any business of Match Group, including indemnifying the Company for costs related to the matter described above.
Shareholder Litigation Arising Out of the MTCH Separation
On June 24, 2020, a shareholder class action and derivative lawsuit was filed in Delaware state court against then IAC/InterActiveCorp (now Match Group, Inc.), then IAC Holdings, Inc. (now IAC/InterActiveCorp), IAC's Chairman and Senior Executive, Barry Diller, former Match Group (as a nominal defendant only), and the ten members of former Match Group's Board of Directors at the time of the MTCH Separation, challenging, on behalf of a putative class of then Match Group public shareholders, the agreed-upon terms of the MTCH Separation. See David Newman v. IAC/InterActiveCorp et al., No. 2020-0505 (Delaware Chancery Court). The gravamen of the complaint is that the terms of the MTCH Separation are unfair to former Match Group and unduly beneficial to IAC as a result of undue influence by IAC and Mr. Diller over the then Match Group directors who unanimously approved the transaction. The complaint asserts direct and derivative claims for: (i) breach of fiduciary duty against IAC and Mr. Diller as former controlling shareholders of Match Group, (ii) breach of fiduciary duty against the Match Group directors who unanimously approved the MTCH Separation, (iii) breach of contract (i.e., a provision of former Match Group's charter), (iv) breach of the implied covenant of good faith and fair dealing, and (v) tortious interference with contract against IAC. The complaint seeks various declarations and damages in an unspecified amount. On September 24, 2020, the defendants filed motions to dismiss the complaint.
On January 8, 2021, instead of responding to the motions to dismiss, the plaintiff, joined by another plaintiff, Boilermakers National Annuity Trust, filed an amended complaint. In addition, on January 7, 2021, another complaint challenging the MTCH Separation was filed against substantially the same defendants in the same court. See Construction Industry & Laborers Joint Pension Trust for Southern Nevada Plan A v. IAC/InterActiveCorp et al. (Delaware Chancery Court). The two cases have been consolidated under the caption In re Match Group, Inc. Derivative Litigation, No. 2020-0505. On March 15, 2021, the court issued an order appointing Construction Industry and Laborers Joint Pension Trust for Southern Nevada Plan A as lead plaintiff in the litigation and directing it to file a consolidated complaint by April 14, 2021, and on that date the lead plaintiff filed the consolidated complaint.
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IAC believes that the allegations in this litigation are without merit and will continue to defend vigorously against them.
Shareholder Litigation Regarding the Spin-off
On January 22, 2021, a putative shareholder class action was filed in New York state court against IAC and the members of IAC's board of directors. See Dean Drulias v. Joseph Levin et al., No. 650504/2021 (Supreme Court, New York County). The gravamen of the complaint is that IAC’s proposed Spin-off is being driven by IAC's controlling shareholder, Chairman and Senior Executive, Barry Diller, allegedly in order to: (i) generate additional cash for IAC to invest in the gaming industry, (ii) decrease IAC's stock price to facilitate additional share purchases by Mr. Diller and (iii) generate additional cash for Mr. Diller without diluting his controlling interest in IAC. The complaint asserts claims under Delaware law against IAC's board of directors for breach of fiduciary duty on account of its approval of the Spin-off and against IAC and its board of directors for their respective failures to include certain allegedly material information in the Company's proxy materials related to the proposed transaction. The complaint seeks damages in an unspecified amount, as well as an order requiring the Company to include additional disclosures in the proxy materials related to the proposed transaction. On March 22, 2021, the defendants filed a motion to dismiss the complaint and to stay discovery pending resolution of the motion.
On April 13, 2021, the plaintiff filed an amended complaint. On April 15, 2021, the plaintiff filed a motion for a preliminary injunction to stop the IAC stockholder vote on the Spin-off from taking place as scheduled; the defendants opposed the motion. On April 23, 2021, the court issued a decision and order denying the motion.
IAC believes that the allegations in this lawsuit are without merit and will defend vigorously against them.
Item 1A.    Risk Factors
Cautionary Statement Regarding Forward-Looking Information
This quarterly report on Form 10-Q contains “forward‑"forward‑looking statements”statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as “anticipates,” “estimates,” “expects,” “plans”"anticipates," "estimates," "expects," "plans" and “believes,”"believes," among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: New IAC’sIAC's future financial performance, New IAC’sIAC's business prospects and strategy, including the separation of MTCH from IAC, anticipated trends and prospects in the industries in which New IAC’sIAC's businesses operate and other similar matters. These forward-looking statements are based on New IAC management’smanagement's expectations and assumptions about future events as of the date of this quarterly report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
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Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others: (i) the risks inherentour ability to market our products and services in separating MTCH from IAC (including uncertainties related to, among other things: the costsa successful and expected benefits of the proposed transaction, the expected tax treatment of the transaction and any litigation arising out of or relating to the transaction and the impact of the transaction on the businesses of New IAC,cost-effective manner, (ii) the impactdisplay of the COVID-19 outbreak onlinks to websites offering our businesses,products and services in a prominent manner in search results, (iii) changes in our relationship with (or policies implemented by) Google, (iv) our continued ability to market, distribute and monetize our products and services through search engines, digital app stores and social media platforms, (iv) our ability to market our products and services in a successful and cost-effective manner, (v) the continued display of links to websites offering our products and services in a prominent manner in search results, (vi) changes in our relationship with (or policies implemented by) Google, (vii) our ability to compete, (viii) the failure or delay of the markets and industries in which our businesses operate to migrate online and the continued growth and acceptance of online products and services as effective alternatives to traditional products and services, (vi) our continued ability to develop and monetize versions of our products and services for mobile and other digital devices, (vii) our ability to establish and maintain relationships with quality and trustworthy service professionals and caregivers, (viii) the ability of Angi Inc. to successfully implement its brand integration initiative (which could involve substantial costs, including as a result of a continued negative impact on its organic search placement) and expand Angi Services (its pre-priced offering), (ix) our ability to engage directly with users, subscribers, consumers, service professionals and caregivers directly on a timely basis, (x) our ability to access, collect and use personal data about our users and subscribers, (xi) the ability of our Chairman and Senior Executive, certain members of his family and our Chief Executive Officer to exercise significant influence over the composition of our board of directors, matters subject to stockholder approval and our operations, (xii) our inability to freely access the cash of Angi Inc. and its subsidiaries, (xiii) dilution with respect to our investment in Angi Inc., (xiv) certain risks relating to our Vimeo business (its total addressable market may be smaller than expected, it may not have the right product/market fit, its ability to convert free users into subscribers, its ability to scale its business effectively, service interruptions and increased hosting and delivery costs), (xv) our ability to compete, (xvi) adverse economic events or trends (particularly those that adversely impact advertising spending levels and consumer confidence and spending behavior), either generally and/or in any of the markets in which our businesses operate, (x)(xvii) our ability to build, maintain and/or enhance our various brands, (xi)(xviii) the impact of the COVID-19 outbreak on our ability to develop and monetize versions of our products and services for mobile and other digital devices, (xii) our ability to establish and maintain relationships with quality service professionals and caregivers, (xiii) our continued ability to communicate with users and consumers via e-mail (or other sufficient means), (xiv) our ability to access, collect and use personal data about our users and subscribers, (xv) our ability to successfully offset increasing digital app store fees, (xvi)businesses, (xix) our ability to protect our systems, technology and infrastructure from cyberattacks and to protect personal and confidential user information, (xvii)as well as cyberattacks experienced by third parties, (xx) the occurrence of data security breaches fraud and/or additional regulation involving or impacting credit card payments, (xviii)fraud, (xxi) increased liabilities and costs related to the processing, storage, use and disclosure of personal and confidential user information, (xxii) the integrity, quality, scalabilityefficiency and redundancyscalability of our systems, technology and infrastructure (and those of third parties with whom we do business), (xix)(xxiii) changes in key personnel (xx) our abilityand (xxiv) certain risks related to service our outstanding indebtedness and interest rate risk, (xxi) dilution with respect to our investment in ANGI Homeservices, (xxii) foreign exchange currency rate fluctuations, (xxiii) operational and financial risks relating to acquisitions and our continued ability to identify suitable acquisition candidates, (xxiv) our ability to operate in (and expand into) international markets successfully, (xxv) regulatory changes, (xxvi) our ability to adequately protect our intellectual property rights andthe Spin-off (the market price of IAC securities could decline if the Spin-off is not infringecompleted, some or all of the intellectual property rights of third parties, (xxvii)expected benefits from the possibility that our historical combined resultsSpin-off may not be indicative of our future results and (xxviii) the possibility that substantial sales of New IAC common stockachieved, increased vulnerability to changing market conditions as a smaller, less diversified company following the Separation (orcompletion of the perception that such sales may occur), could depressSpin-off, the failure of the Spin-off to qualify as a transaction generally tax-free for U.S. federal income tax purposes, certain conflicts of interest, the value of IAC and Vimeo securities following the Spin-off might be less than the value of IAC securities before the completion of the Spin-off and decreases in the market price of New IAC common stock.

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the Spin-off for a variety of reasons, among other risks).
Certain of these and other risks and uncertainties are discussed in our filings with the SEC, including under the captions "Risks Relating to IAC Securities and SpinCo Securities Following the Separation" andSpin-off," "Risks Relating to New IAC's Business Following the Separation"Spin-off," "General Risk Factors" and "Risks Related to SpinCo and the Vimeo Business Following the Spin-off" in ourthe Registration Statement on Form S-4 (Registration No. 333-236420)333-251656), as amended.amended, and Part I-Item 1A-Risk Factors of our Annual Report on 10-K for the fiscal year ended December 31, 2020. Other unknown or unpredictable factors that could also adversely affect New IAC's business, financial condition and operating results may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this quarterly report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of New IAC management as of the date of this quarterly report. New IAC does not undertake to update these forward-looking statements.
Risk Factors
In addition to the risk factors below and the other information set forth in this quarterly report on Form 10-Q,, you should carefully consider the risk factors discussed under the captions "Risk Relating to the Separation" and "Risks Relating to NewIAC Securities and SpinCo Securities Following the Spin-off," "Risks Relating to IAC's Business Following the Separation"Spin-off," "General Risk Factors" and "Risks Related to SpinCo and the Vimeo Business Following the Spin-off" in ourthe Registration Statement on Form S-4 (Registration No. 333-236420)333-251656), as amended, and Part I-Item 1A-Risk Factors of our Annual Report on 10-K for the fiscal year ended December 31, 2020, which could materially and adversely affect New IAC's business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect New IAC's business, financial condition and/or operating results.
Items 2-5.    Not applicable.

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Certain of our businesses depend upon arrangements with Google.
A meaningful portion of our consolidated revenue (and a substantial portion of our net cash from operations that we can freely access) is attributable to a services agreement with Google. Pursuant to this agreement, we display and syndicate paid listings provided by Google in response to search queries generated through the businesses within our Search segment. In exchange for making our search traffic available to Google, we receive a share of the revenue generated by the paid listings supplied to us, as well as certain other search related services. Our agreement with Google expires on March 31, 2023; provided, however, that only in September of each year, we or Google 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. In addition, we earn certain other advertising revenue from Google that is not attributable to the services agreement.
The amount of revenue we receive from Google depends on a number of factors outside of our control, including the amount Google charges for advertisements, the efficiency of Google’s system in attracting advertisers and serving up paid listings in response to search queries and parameters established by Google regarding the number and placement of paid listings displayed in response to search queries. In addition, Google makes judgments about the relative attractiveness (to advertisers) of clicks on paid listings from searches performed on our properties and these judgments factor into the amount of revenue we receive. Google also makes judgments about the relative attractiveness (to users) of paid listings from searches performed on our properties and these judgments factor into the number of advertisements that we can purchase. Changes to the amount Google charges advertisers, the efficiency of Google’s paid listings network, Google’s judgment about the relative attractiveness to advertisers of clicks on paid listings from our properties or to the parameters applicable to the display of paid listings generally could result in a decrease in the amount of revenue we receive from Google and could adversely affect our business, financial condition and results of operations. Such changes could come about for a number of reasons, including general market conditions, competition or policy and operating decisions made by Google.
Our services agreement with Google also requires that we comply with certain guidelines for the use of Google brands and services, including the Chrome browser and Chrome Web Store. These guidelines govern which of our products and applications may access Google services or be distributed through its Chrome Web Store, and the manner in which Google’s paid listings are displayed within search results across various third-party platforms and products (including our properties). Our services agreement also requires that we establish guidelines to govern certain activities of third parties to whom we syndicate paid listings, including the manner in which these parties drive search traffic to their websites and display paid listings. Google may generally unilaterally update its policies and guidelines without advance notice, whether under the services agreement or otherwise, which could in turn require modifications to, or prohibit and/or render obsolete certain of our products, services and/or business practices, which could be costly to address or otherwise adversely affect our business, financial condition and results of operations. Noncompliance with Google’s guidelines by us or the third parties to whom we are permitted to syndicate paid listings or through which we secure distribution arrangements for the businesses within our Search segment could result in the suspension of some or all Google services to us (and/or the websites of our third-party partners) and/or the termination of our services agreement by Google. Google has, in the past, made policy changes generally and under the services agreement, which had a negative impact on the results of operations of our Desktop business-to-consumer ("B2C") business, and may do so in the future. In addition, in the last quarter of 2020, Google suspended services with respect to some of our Desktop B2C products and may take continued or further action with respect to our products and businesses in the future. As a result, our Desktop B2C business elected to modify certain marketing strategies in early January 2021. Subsequently, Google informed us of another policy change in the first quarter of 2021 that is scheduled to go into effect on May 10, 2021. This Google policy change may eliminate our ability to successfully introduce and market new Desktop B2C products that would be profitable at scale. Therefore, our Desktop B2C business substantially reduced marketing in early March 2021 and effectively eliminated all marketing of its products by the end of the first quarter of 2021. This reduction in marketing will positively impact the profitability of (but will substantially reduce revenue attributable to) our Desktop B2C business in 2021. Beyond 2021, revenue attributable to the installed base of Desktop B2C products will decline precipitously. In response, our Desktop B2C business has undertaken cost reduction measures to maintain a very modest level of profitability.
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The termination of our services agreement by Google, the further curtailment of our rights under the services agreement (including the failure to allow our products to access Google services, whether pursuant to the terms thereof or otherwise), the failure of Google to perform its obligations under the agreement and/or additional policy changes implemented by Google under the services agreement or otherwise would have an adverse effect on our business, financial condition and results of operations. If any of these events were to occur, we may not be able to find another suitable alternate provider of paid listings (or if an alternate provider were found, the economic and other terms of the agreement and the quality of paid listings may be inferior relative to our arrangements with (and the paid listings supplied by) Google) or otherwise replace the lost revenues.
Angi Inc.'s brand integration initiative may involve substantial costs, including as a result of a continued negative impact on its organic search placement, and may not be favorably received by customers and service professionals.
On March 17, 2021, Angi Inc. updated one of its leading websites and brands, Angie’s List, to Angi, and began concentrating its marketing investment in the Angi brand in order to focus its marketing, sales and branding efforts on a single brand. Angi Inc. (and in turn, IAC) may incur substantial costs as a result of this brand integration initiative and may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition and status previously enjoyed by Angie’s List, and customers and service professionals may be confused as Angi Inc. transitions and focuses on the Angi brand as against its other brands. Angi Inc. relies heavily on free and paid search engine marketing efforts to drive traffic to its properties, which has been adversely affected by this initiative. Specifically, the brand initiative has adversely affected the placement and ranking of Angi Inc. websites, particularly Angi.com, in organic search results as Angi does not have the same domain history as Angie’s List. In addition, Angi Inc. shifted marketing to support Angi, away from HomeAdvisor, which has negatively affected the efficiency of Angi Inc.'s search engine marketing efforts, and which in turn reduced revenue and increased marketing spend that is expected to result in lower profits for the quarter ending June 30, 2021. This trend is expected to continue for the remainder of 2021 (and potentially into 2022), with the most significant impact expected in the second quarter of 2021. Any or all of these impacts could continue to increase marketing costs (particularly if free traffic is replaced with paid traffic) and adversely affect the effectiveness of Angi Inc.'s marketing efforts overall (and in turn, those of IAC). Finally, as Angi Inc. aligns and focuses its organization around a single brand, Angi Inc. could experience financial and operational challenges, including a distracted salesforce and reduced service professional participation across its various product lines. Depending on market acceptance, the brand integration initiative could adversely affect the ability of Angi Inc. to attract and retain customers and service professionals, which could cause Angi Inc. (and in turn, IAC) not to realize some or all of the anticipated benefits contemplated by the brand integration initiative.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
The Company did not issue or sell any shares of its common stock or any other equity securities pursuant to unregistered transactions during the quarter ended March 31, 2021.
Issuer Purchases of Equity Securities
The Company did not purchase any shares of its common stock during the quarter ended March 31, 2021. As of that date, 8,036,226 shares of IAC common stock remained available for repurchase under the Company's previously announced June 2020 repurchase authorization. The Company may repurchase shares pursuant to this repurchase authorization over an indefinite period of time in the open market and in privately negotiated transactions, depending on those factors IAC management deems relevant at any particular time, including, without limitation, market conditions, share price and future outlook.
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Item 6.    Exhibits
The documents set forth below, numbered in accordance with Item 601 of Regulation S-K, are filed herewith, incorporated by reference to the location indicated or furnished herewith.
Exhibit

Number
DescriptionLocation
2.13.1Transaction Agreement, dated asRestated Certificate of December 19, 2019, by and among IAC/InterActiveCorp, IAC Holdings, Inc., Valentine Merger Sub LLC and Match Group, Inc.Incorporation of the Registrant.
2.23.2Amendment, dated April 28, 2020, to the Transaction Agreement, dated as of December 19, 2019, by and among IAC/InterActiveCorp, IAC Holdings, Inc., Valentine Merger Sub LLC and Match Group, Inc.
Exhibit 2.1 to IAC/InterActiveCorp's Form 8-K, filed on April 28, 2020.
3.1Certificate of IncorporationDesignations of IAC Holdings, Inc., dated asSeries A Cumulative Preferred Stock of November 19, 2019.the Registrant.
3.2By-Laws of IAC Holdings, Inc, dated as of November 19, 2019.
Exhibit 3.2 to the Registrant's Registration Statement on Form S-4,8-K, filed on February 13,July 2, 2020.
3.3Amended and Restated By-Laws of the Registrant.
31.1
Certification of the Chairman and Senior Executive pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. (1)
31.2
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. (1)
31.3
31.2
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. (1)
32.1
Certification of the Chairman and Senior Executive pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act. (2)
32.2
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act. (2)
32.3
32.2
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act. (2)
101.INSInline XBRL Instance (1)The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema (1)
101.CALInline XBRL Taxonomy Extension Calculation (1)
101.DEFInline XBRL Taxonomy Extension Definition (1)
101.LABInline XBRL Taxonomy Extension Labels (1)
101.PREInline XBRL Taxonomy Extension Presentation (1)
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

(1)Filed herewith.
(2)Furnished herewith.
(1)Filed herewith.

(2)Furnished herewith.
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SIGNATURES


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Table of Contents

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:May 7, 2021
IAC/INTERACTIVECORP
Dated:June 3, 2020By:
IAC HOLDINGS, INC.
By:/s/ GLENN H. SCHIFFMAN
Glenn H. Schiffman
Executive Vice President and Chief Financial Officer




SignatureTitleDate
SignatureTitleDate
/s/ GLENN H. SCHIFFMAN
Executive Vice President and

 Chief Financial Officer
June 3, 2020May 7, 2021
Glenn H. Schiffman


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