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Item 9A. Controls and Procedures

2021-02-16 compared with 2020-02-28 · 79 added, 55 removed, 162 unchanged (45% of the section changed)

26 unchanged sentences

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2019 and 2018 , and the related consolidated and combined statements of operations, comprehensive operations, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2019 , and the related notes and the financial statement schedule listed in the Index at Item 15(a), and our report dated February 27, 2020 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2020 and 2019, and the related consolidated statements of operations, comprehensive operations, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the financial statement schedule listed in the Index at Item 15(a), and our report dated February 16, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

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Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

16 unchanged sentences

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information regarding ownership of our Class A common stock and Class B common stock required by Item 403 of Regulation S-K and securities authorized for issuance under our equity compensation plans required by Item 201(d) of Regulation S-K is set forth in the sections entitled "Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information," respectively, in the 2020 Proxy Statement and is incorporated herein by reference.

The information regarding ownership of the Company’s Class A common stock and Class B common stock required by Item 403 of Regulation S-K and securities authorized for issuance under our equity compensation plans required by Item 201(d) of Regulation S-K is set forth in the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information,” respectively, in the 2021 Proxy Statement and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence

1 unchanged sentence

Principal Accounting Fees and Services

Information required by Item 9(e) of Schedule 14A regarding the fees and services of our independent registered public accounting firm and the pre-approval policies and procedures applicable to services provided to us by such firm is set forth in the sections entitled "Fees Paid to Our Independent Registered Public Accounting Firm" and "Audit and Non-Audit Services Pre-Approval Policy," respectively, in the 2020 Proxy Statement and is incorporated herein by reference.

Information required by Item 9(e) of Schedule 14A regarding the fees and services of the Company’s independent registered public accounting firm and the pre-approval policies and procedures applicable to services provided to the Company by such firm is set forth in the sections entitled “Fees Paid to Our Independent Registered Public Accounting Firm” and “Audit and Non-Audit Services Pre-Approval Policy,” respectively, in the 2021 Proxy Statement and is incorporated herein by reference.

Exhibits, Financial Statement Schedules

(a) List of documents filed as part of this Report:

(1) Consolidated and Combined Financial Statements of ANGI Homeservices

(1) Consolidated Financial Statements of ANGI Homeservices

Report of Independent Registered Public Accounting Firm:

1 unchanged sentence

Consolidated Balance Sheet as of December 31, 2020 and 2019.

Consolidated and Combined Statement of Operations for the Years Ended December 31, 2019, 2018 and 2017.

Consolidated and Combined Statement of Comprehensive Operations for the Years Ended December 31, 2019, 2018 and 2017.

Consolidated and Combined Statement of Shareholders' Equity for the Years Ended December 31, 2019, 2018 and 2017.

Consolidated and Combined Statement of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017.

Notes to Consolidated and Combined Financial Statements.

(2) Consolidated and Combined Financial Statement Schedule of ANGI Homeservices

Valuation and Qualifying Accounts.

All other financial statements and schedules not listed have been omitted since the required information is either included in the Consolidated and Combined Financial Statements or the notes thereto, is not applicable or is not required.

Consolidated Statement of Operations for the Years Ended December 31, 2020, 2019 and 2018.

Consolidated Statement of Comprehensive Operations for the Years Ended December 31, 2020, 2019 and 2018.

Consolidated Statement of Shareholders’ Equity for the Years Ended December 31, 2020, 2019 and 2018.

Consolidated Statement of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018.

Notes to Consolidated Financial Statements.

(2) Consolidated Financial Statement Schedule of ANGI Homeservices

II Valuation and Qualifying Accounts.

All other financial statements and schedules not listed have been omitted since the required information is either included in the Consolidated Financial Statements or the notes thereto, is not applicable or is not required.

The documents set forth below, numbered in accordance with Item 601 of Regulation S-K, are filed herewith, incorporated by reference herein by reference to the location indicated or furnished herewith.

Exhibit Number

Exhibit Number Description Location

2.1 Agreement and Plan of Merger, dated as of May 1, 2017, as amended by Amendment No.

15 unchanged sentences

333-227932), filed on October 22, 2018.

4.4 Indenture, dated as of August 20, 2020, among ANGI Group, LLC, the guarantors party thereto and Computershare Trust Company, N.A., as trustee.

Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on August 20, 2020.

10.1 Contribution Agreement, dated as of September 29, 2017, by and between ANGI Homeservices Inc.

44 unchanged sentences

Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on November 9, 2018.

10.17 Amendment No.

1, dated as of August 12, 2020, among ANGI Homeservices Inc., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.

Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on August 12, 2020.

10.18 Joinder and Reaffirmation Agreement, dated as of August 12, 2020, among ANGI Homeservices Inc., ANGI Group, LLC, each of the parties listed on Schedule 1 thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.

Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed on August 12, 2020.

10.19 Advisory Agreement, dated September 8, 2020, between ANGI Homeservices Inc.

and Craig Smith.

Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on September 11, 2020.

Subsidiaries of the Registrant as of December 31, 2020.

6 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Pursuant to the requirements of Section 13 or 15(d) 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.

February 27, 2020

ANGI Homeservices Inc.

/s/ JAMIE COHEN

Chief Financial Officer

February 16, 2021 ANGI Homeservices Inc.

Interim Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 16, 2021:

Signature Title

/s/ WILLIAM B.

Chief Executive Officer and Director

/s/ JAMIE COHEN

Chief Financial Officer

/s/ CRAIG SMITH

President and Director

/s/ MICHAEL H.

Vice President, Principal Accounting Officer

/s/ JOSEPH LEVIN

Chairman of the Board and Director

RIDENOUR Chief Executive Officer and Director

SCHIFFMAN Interim Chief Financial Officer and Director

/s/ CHRISTOPHER W.

BOHNERT Senior Vice President, Principal Accounting Officer

Christopher W.

/s/ JOSEPH LEVIN Chairman of the Board and Director

/s/ THOMAS R.

EVANS Director

/s/ ALESIA J.

HAAS Director

/s/ KENDALL HANDLER Director

Kendall Handler

/s/ ANGELA R.

/s/ MARK STEIN

/s/ SUZY WELCH

/s/ GREGG WINIARSKI

HICKS BOWMAN Director

/s/ MARK STEIN Director

/s/ SUZY WELCH Director

/s/ GREGG WINIARSKI Director

Gregg Winiarski

/s/ YILU ZHAO

/s/ YILU ZHAO Director

ANGI HOMESERVICES INC.

1 unchanged sentence

VALUATION AND QUALIFYING ACCOUNTS

Other Accounts

Description Balance at

of Period Charges to

Earnings Charges to

Other Accounts Deductions Balance at

End of Period

(In thousands)

Allowance for doubtful accounts and revenue reserves

Deferred tax valuation allowance

Credit loss reserves $ 19,066 $ 78,229 (a)

$ ( 152 ) $ ( 71,097 ) (c)

Revenue reserves 1,227 103,627 (b)

— ( 103,061 ) (d)

Deferred tax valuation allowance 71,472 ( 235 ) (e)

Other reserves 5,057 7,495

Allowance for doubtful accounts and revenue reserves

Deferred tax valuation allowance

Credit loss reserves $ 15,622 $ 64,278 (a)

$ ( 46 ) $ ( 60,788 ) (c)

Revenue reserves 981 111,069 (b)

( 2 ) ( 110,821 ) (d)

Deferred tax valuation allowance 58,903 14,083 (g)

( 1,514 ) (f)

Other reserves 3,919 5,057

Allowance for doubtful accounts and revenue reserves

Deferred tax valuation allowance

Credit loss reserves $ 8,375 $ 47,242 (a)

$ ( 501 ) $ ( 39,494 ) (c)

Revenue reserves 888 86,901 (b)

( 5 ) ( 86,803 ) (d)

Deferred tax valuation allowance 61,563 ( 599 ) (h)

( 2,061 ) (f)

Other reserves — 3,919

_________________________________________________________

Additions to the allowance for doubtful accounts are charged to expense.

Write-off of fully reserved accounts receivable.

The Company writes off accounts receivable when they are deemed uncollectible, primarily once 180 days past due.

Amount is primarily related to foreign and state NOLs.

Amount is related to currency translation adjustments on foreign NOLs.

Amount is primarily related to state NOLs.

Amount is due primarily to the establishment of foreign NOLs related to an acquisition.

Amount is related to acquired state NOLs and currency translation adjustments on foreign NOLs.

(a) Additions to the credit loss reserve are charged to expense.

(b) Additions to the revenue reserves are charged against revenue.

(d) Write-off of revenue reserve as credits are granted to service professionals

(e) Amount is primarily related to an increase in foreign NOLs largely offset by a decrease in state NOLs.

(f) Amount is primarily related to currency translation adjustments on foreign NOLs.

(g) Amount is primarily related to foreign and state NOLs.

(h) Amount is primarily related to state NOLs.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures