EFTA01377996.pdf

Years ended December 31, September 30, 2012 2013 2014 2014 2015 (In thousands) Combined statement of operations information: Revenue $ 713,449 $ 803,089 $ 888.268 $ 649,272 $ 752.857 Operating costs and expenses: Cost of revenue (exclusive of depreciation)(1) 72.794 85.945 120,024 82.079 131.118 Selling and marketing expense(1) 304,597 321,870 335,107 271,236 289.844 General and administrative expense(1) 76,711 93.641 117,890 74.351 121.303 Product development expense(1) 38.921 42,973 49,738 36,614 50,740 Depreciabon 16,341 20.202 25.547 17.122 19.804 Amortization of intangibles 17.455 17,125 11,395 6.841 14,130 Total operating costs and expenses 526,819 581,756 659,701 488,243 626,939 Operating income 186,630 221,333 228.567 161,029 125,916 Interest expense—related party (29.489) (34.307) (25.541) (23.214) (6.879) Other (expense) income, net (7.428) 217 12,610 8.628 8.341 Earnings before income taxes 149,713 187,243 215,636 146,443 127,380 Income tax provision (59,432) (60.616) (67,277) (46,434) (42,632) Net earnings 90.281 126,627 148,359 100,009 84.748 Net (earnings) loss attributable to nonoontrolling interests (4,606) (1,624) (595) (522) 42 Net earnings attributable to Match Group, Inc.'s shareholder $ 85,675 $ 125,003 $ 147,764 $ 99,487 $ 84.790 Other combined financial information: Adjusted EBITDA(2) $ 236,490 $ 271,231 $ 273,448 $ 188.021 $ 179.355 (1) Includes stock-based compensation expense as follows. Nine months ended Years ended December 31, September 301, 2012 2013 2014 2014 2015 (In Moments) Cost of revers* S 1.975 $ 1,012 S 396 5 465 $ 342 Sea rg and marketing expense 823 562 194 255 4,883 General and adinnatratoe expense 10,368 8,520 17,326 13.476 22,076 Procke development expense 2.898 2134 2,935 2414 3,681 Total stock.bssed compensation expense 16.064 • 12228 $ 20851 $ 16.610 S 30982 (2) In ccnsidenng Ire financial performance of the business, management and our chief operating decision maker analyze the pimary financaal performance measure of Actuated EBITDA Adjusted EBITDA is defined as operating income excluding (1) stock•based canpensabon expense (2) depreciation, and (3) acgursitcn-related items consisting of (i) am ortuabon of utangble assets and impairments of goodwill and intangible assets and (i) gains and losses recogrxzed on changes in the fair value of contingent consideration arrangements 48 Table of Contents We believe Actuated EBITDA is useful for analysts and investors a the measure ado...senora meanngful cormanson between our performance and that of ow convertors Moreover, ow management uses the measure rtenay to evaluate the performarce of our business as a Mete We exclude the above items from Adjusted EBITDA because Mese items are non.cash in nature and we bekeve that by excluding these items Adjusted EBITDA corresponds more closetty to the cash operating income generated from our business. from which capital investments are made and debt *serviced. Actuated EBITDA has limitations as an analytical tool It * not a presentation made in accordance with GAAP Adjusted EBITDA is rot a measure of financial oxidtion or hiudry and should not be considered as an alternative to operating income or net income determined in accoreaute with GAAP Adjusted EBITDA is not necessarily congeratie to stream/ titled measures used by other companies M a result, you should not consider Masted EBITDA in eolaton from oi as a autarkie analysis for, ow results of operations as determined in accordance with GAAP See 'Management's discussion and analysts of financial condition and results of operabons-Princoles of frorcial reporting" The following tale reconoles Adjusted EBITDA to operating income for the periods presented Nine menthe ended Yen motet December 31, September 30, 2012 2013 2014 2014 2015 (In Moments) Operating income $186,630 $ 221.333 5228.567 5 161.029 5 125918 Stock.based compensabon expense 16,054 12228 20851 16.610 30.982 Depreciation 18,341 24202 25,547 17,122 19,804 Amortization of intangibles 17,455 17,125 11,396 6.841 14.130 Acquisron-rnsted contrgent considere - arn fir value adjustrrents — 3'O (12,912) (13581) (11,479) Adjusted EBITDA $ 23440 $ 271.231 $273.448 5 188.021 S 179.355 As of December 31, As of 2013 2014 September 30, 2015 (In thousands) Combined balance sheet Information: Cash and cash equivalents $ 125,226 5 127.630 $ 282.543 Total current assets 174,966 195,102 386.796 Total assets 1,292,122 1.308.034 1,515.047 hdpiNvedwAcc.gov %Waves edger datal SIS039000I0474691500843412226458n-I I ,972016 9:27:17 A211 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0075156 CONFIDENTIAL SDNY_GM_00221340 EFTA01377996