What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2023-02-24 compared with 2022-02-24 · 268 added, 423 removed, 1314 unchanged (34% of the section changed)

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The rate used would be agreed to between the administrative agent and Match Group and may be based upon a secured overnight financing rate at the Federal Reserve Bank of New York.

Additional information about the benchmark replacement can be found Amendment No.

Additional information about the benchmark replacement can be found in Amendment No.

6 to the Credit Agreement.

Foreign Currency Exchange Risk

The Company conducts business in certain foreign markets, primarily in various jurisdictions within the European Union (“EU”) and Asia.

We are exposed to foreign exchange risk for primarily the Euro and British Pound (“GBP”).

The Company conducts business in certain foreign markets, primarily in various jurisdictions in Europe and Asia.

As a result, we are exposed to foreign exchange risk related to certain currencies, primarily the Euro, British Pound (“GBP”), Japanese Yen (“JPY”), and Turkish Lira (“TRY”).

For the years ended December 31, 2022, 2021 and 2020, international revenue accounted for 55%, 54% and 53%, respectively, of our consolidated revenue.

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dollars affects year-over-year comparability of operating results.

The average GBP and Euro exchange rates strengthened against the U.S.

The average Euro, GBP, JPY, and TRY exchange rates weakened against the U.S.

Dollar by 11%, 11%, 17%, and 46%, respectively, in 2022 compared to 2021.

Foreign currency exchange rate changes during the years ended December 31, 2021 and 2020 positively impacted revenue by $35.2 million and negatively impacted revenue by $6.4 million, respectively, or 1% and less than 1% of total revenue, respectively.

Foreign currency exchange rate changes during the years ended December 31, 2022 and 2021 negatively impacted revenue by $207.9 million and positively impacted revenue by $35.2 million, respectively, or 7% and 1% of total revenue for each respective year.

See “Non-GAAP Financial Measures” in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the definition of Revenue excluding foreign exchange effects and a reconciliation of Revenue to Revenue excluding foreign exchange effects.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquisition of Hyperconnect, Inc.

- Valuation of Acquired Intangible Assets

Description of the Matter On June 17, 2021, the Company completed its acquisition of Hyperconnect, Inc.

for net consideration of $1.75 billion, as disclosed in Note 5 to the consolidated financial statements.

The transaction was accounted for as a business combination.

Auditing the Company's accounting for its acquisition of Hyperconnect, Inc.

was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of identified intangible assets of $612 million, which principally consisted of trade names and associated trademarks and user bases.

The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the acquired business.

The Company used a discounted cash flow model to measure the intangible assets.

The significant assumptions used to estimate the value of the intangible assets included discount rates, revenue growth rates, royalty rates and the projected cash flow terminal growth rates.

These significant assumptions are forward looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its accounting for the business combination.

For example, we tested controls over management's review of the valuation models and the significant assumptions described above used to develop such estimates.

To test the estimated fair value of the trade names and associated trademarks and user bases, we performed audit procedures that included, among others, evaluating the Company’s selection of the valuation methodologies, evaluating the methods and significant assumptions used by the Company’s valuation specialist, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

For example, we compared the significant assumptions to the historical results of the acquired business as well as to current industry, market, and economic trends and to the Company’s budgets and forecasts.

We performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the identifiable intangible assets resulting from changes in the assumptions.

We involved our valuation specialists to assist with our evaluation of the methodologies used by the Company and significant assumptions used in the fair value estimates.

Recoverability of Indefinite-Lived Intangible Assets

Description of the Matter As of December 31, 2021, the Company’s indefinite-lived intangible asset balance, excluding goodwill, was $576.7 million and consisted of trade names and trademarks.

As disclosed in Note 2 to the consolidated financial statements, indefinite-lived intangible assets are assessed annually for impairment as of October 1, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of an indefinite-lived intangible asset below its carrying value.

Auditing management’s annual impairment tests for certain indefinite-lived intangible assets was complex and highly judgmental due to the significant estimation uncertainty required to determine the fair value of the indefinite-lived intangible assets.

In particular, the Company’s fair value estimates for indefinite-lived intangible assets were sensitive to significant assumptions, such as discount rates, revenue growth rates, royalty rates and projected cash flow terminal growth rates, which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its indefinite-lived intangible assets impairment review process.

For example, we tested controls over the Company’s forecasting and budgeting process as well as controls over management’s review of the significant assumptions used to estimate the fair values of the indefinite-lived intangible assets.

To test the estimated fair value of certain indefinite-lived intangible assets, we performed audit procedures that included, among others, assessing the methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Recoverability of Intangible Assets

Description of the Matter As of December 31, 2022, the Company’s intangible asset balance, excluding goodwill and net of amortization, was $357.7 million and consisted of trade names and associated trademarks, customer lists, patents and technology.

As disclosed in Note 5 to the consolidated financial statements, during the year ended December 31, 2022, the Company recognized impairment charges of $270.1 million related to Hyperconnect indefinite- and definite-lived intangible assets related to a decline in long-term projections for the business and the use of higher discount rates to value the assets.

Additionally, the Company recognized $49.4 million of impairment during the year ended December 31, 2022 related to certain trade names including the Meetic and Match brands in Europe primarily due to declining projections.

Auditing management’s impairment tests for certain of the Hyperconnect indefinite- and definite-lived intangible assets and the Meetic and Match trade name intangible asset in Europe was complex and judgmental due to the estimation uncertainty involved in determining the fair value of the intangible assets.

The Company used an avoided royalty discounted cash flow model to estimate the fair value of the intangible assets.

In particular, the Company’s fair value estimates for intangible assets were sensitive to significant assumptions, such as discount rates and revenue growth rates, which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its intangible assets impairment review process.

To test the estimated fair value, and resulting impairment charges, for certain of the Hyperconnect indefinite- and definite-lived intangible assets and the Meetic and Match trade name intangible asset in Europe, we performed audit procedures that included, among others, assessing the methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.

We compared the significant assumptions used by management to current industry and economic trends and to other guideline public companies and evaluated whether changes to the company’s business model would affect the significant assumptions.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the indefinite-lived intangible assets that would result from changes in the assumptions.

For example, we evaluated management’s forecasted revenue to identify, understand and evaluate changes as compared to historical results.

For example, we evaluated management’s forecasted revenue to evaluate changes as compared to historical results, in consideration of identified risks and opportunities.

In addition, we involved an internal valuation specialist to assist in evaluating management’s methodologies and significant assumptions applied in developing the fair value estimates.

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authorized 1,600,000,000 shares;

283,470,334 and 267,329,284 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively

286,817,375 and 283,470,334 shares issued;

and 279,625,364 and 283,470,334 outstanding at December 31, 2022 and December 31, 2021, respectively

Additional paid-in capital 8,273,637 8,164,216

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Accumulated other comprehensive loss ( 369,182 ) ( 223,754 )

Treasury stock;

7,192,011 and 0 shares, respectively

( 482,049 ) —

Total Match Group, Inc.

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Depreciation 43,594 41,402 41,271

Amortization of intangibles 28,559 7,525 8,727

Impairment and amortization of intangibles 366,257 28,559 7,525

Total operating costs and expenses 2,673,838 2,131,598 1,645,554

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Interest expense ( 145,547 ) ( 130,493 ) ( 130,624 )

Other (expense) income, net

Other income (expense), net

8,033 ( 465,038 ) 15,861

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377,491 256,148 630,952

Income tax benefit (provision)

Income tax (provision) benefit

( 15,361 ) 19,897 ( 43,273 )

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362,130 276,045 587,679

Earnings (loss) from discontinued operations, net of tax

(Loss) earnings from discontinued operations, net of tax

( 2,211 ) 509 ( 366,070 )

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Change in unrealized losses on available-for-sale securities

— ( 1 ) ( 5 )

Total other comprehensive (loss) income ( 146,361 ) ( 142,608 ) 39,414

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Change in foreign currency translation adjustment attributable to noncontrolling interests 933 308 1,072

Change in unrealized losses of available-for-sale debt securities attributable to noncontrolling interests — — 1

Comprehensive loss (income) attributable to noncontrolling interests 2,960 1,477 ( 58,208 )

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Balance as of December 31, 2019 $ 44,527 $ — — $ 263 263,230 $ 16 16,157 $ 11,378,160 $ 1,725,046 $ ( 136,349 ) $ ( 10,309,612 ) $ 2,657,524 $ 970,276 $ 3,627,800

Net earnings for the year ended December 31, 2019 2,835 — — — — — — — 453,838 — — 453,838 109,854 563,692

Other comprehensive income (loss), net of tax 39 — — — — — — — — ( 7,942 ) — ( 7,942 ) ( 2,063 ) ( 10,005 )

Stock-based compensation expense 148 — — — — — — 82,619 — — — 82,619 155,457 238,076

Issuance of Former IAC common stock pursuant to stock-based awards, net of withholding taxes

— — — 1 927 — — ( 82,463 ) — — — ( 82,462 ) — ( 82,462 )

Issuance of Former Match Group and ANGI Homeservices common stock pursuant to stock-based awards, net of withholding taxes

— — — — — — — ( 236,897 ) — 315 — ( 236,582 ) ( 1,794 ) ( 238,376 )

Purchase of redeemable noncontrolling interests ( 40,432 ) — — — — — — — — — — — — —

Adjustment of redeemable noncontrolling interests to fair value

11,554 — — — — — — ( 11,554 ) — — — ( 11,554 ) — ( 11,554 )

Noncontrolling interests created in acquisitions 4,781 — — — — — — — — — — — — —

Purchase of exchangeable note hedges, net of deferred tax assets — — — — — — — ( 234,563 ) — — — ( 234,563 ) — ( 234,563 )

Issuance of warrants — — — — — — — 166,520 — — — 166,520 — 166,520

Purchase of Match Group and ANGI treasury stock — — — — — — — ( 274,302 ) — — — ( 274,302 ) — ( 274,302 )

Other ( 85 ) — — — — — — ( 81 ) — — — ( 81 ) 146 65

Balance as of December 31, 2019 44,527 — — 263 263,230 16 16,157 11,378,160 1,725,046 ( 136,349 ) ( 10,309,612 ) 2,657,524 970,276 3,627,800

Net (loss) earnings for the year ended December 31, 2020 ( 3,136 ) — — — — — — — 162,329 — — 162,329 62,416 224,745

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Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes — 8 8,373 — — — — 155,285 — — — 155,293 — 155,293

— 8 8,373 — — — — 155,285 — — — 155,293 — 155,293

Issuance of Former IAC common stock pursuant to stock-based awards, net of withholding taxes

— — — 1 453 — — ( 34,518 ) — — — ( 34,517 ) — ( 34,517 )

Issuance of Former Match Group and ANGI Homeservices common stock pursuant to stock-based awards, net of withholding taxes

— — — — — — — ( 212,270 ) — 628 — ( 211,642 ) ( 11,405 ) ( 223,047 )

Purchase of redeemable noncontrolling interests ( 3,165 ) — — — — — — — — — — — — —

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Exchange Common stock and Class B for Class M common stock and spin off IAC ( 43,583 ) 184 183,749 ( 80 ) ( 79,343 ) ( 6 ) ( 5,789 ) ( 4,745,323 ) — 13,781 — ( 4,731,444 ) ( 498,792 ) ( 5,230,236 )

Acquire Former Match Group noncontrolling interest — 58 57,868 — — — — 608,110 — — — 608,168 ( 608,168 ) —

Acquisition of Former Match Group noncontrolling interest — 58 57,868 — — — — 608,110 — — — 608,168 ( 608,168 ) —

Issuance of common stock — 17 17,339 — — — — ( 17 ) — — — — — —

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Comprehensive

Loss Treasury Stock Total

Match Group, Inc.

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Net (loss) earnings for the year ended December 31, 2021 ( 2,047 ) — — — 277,723 — — 277,723 878 278,601

( 2,047 ) — — — 277,723 — 277,723 878 278,601

Other comprehensive loss, net of tax — — — — — ( 142,300 ) — ( 142,300 ) ( 308 ) ( 142,608 )

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Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes

— 5 4,678 42,709 — — — 42,714 — 42,714

Issuance of common stock for the acquisition of Hyperconnect — 6 5,929 890,845 — — — 890,851 — 890,851

Adjustment of redeemable noncontrolling interests to fair value

Adjustment of noncontrolling interests to fair value — ( 1,835 ) — — ( 1,835 ) 1,835 —

2,667 — — ( 2,667 ) — — — ( 2,667 ) — ( 2,667 )

Adjustment to noncontrolling interests related to business acquisition — ( 1,835 ) — — — ( 1,835 ) 1,835 —

Purchase of noncontrolling interest — — — 943 — — — 943 ( 2,571 ) ( 1,628 )

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Balance as of December 31, 2021 $ 1,260 $ 283 283,470 $ 8,164,216 $ ( 8,144,514 ) $ ( 223,754 ) $ — $ ( 203,769 ) $ 7,927 $ ( 195,842 )

Net (loss) earnings for the year ended December 31, 2022

( 2,661 ) — — — 361,946 — — 361,946 634 362,580

Other comprehensive loss, net of tax — — — — — ( 145,428 ) — ( 145,428 ) ( 933 ) ( 146,361 )

Stock-based compensation expense — — — 214,437 — — — 214,437 — 214,437

Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes — 4 3,347 ( 88,774 ) — — — ( 88,770 ) — ( 88,770 )

Purchase of treasury stock — — — — — — ( 482,049 ) ( 482,049 ) — ( 482,049 )

Adjustment of redeemable noncontrolling interests to fair value 1,401 ( 1,401 ) — — — ( 1,401 ) — ( 1,401 )

Adjustment of noncontrolling interests to fair value — ( 16,215 ) — — — ( 16,215 ) 16,215 —

Purchase of noncontrolling interest — 6,791 — — — 6,791 ( 23,693 ) ( 16,902 )

Noncontrolling interest created by the exercise of subsidiary denominated equity award — — — ( 844 ) — — — ( 844 ) 844 —

Settlement and exercises of note hedges and warrants — — — ( 7,116 ) — — — ( 7,116 ) — ( 7,116 )

Other — — — 2,543 — — — 2,543 — 2,543

Balance as of December 31, 2022 $ — $ 287 286,817 $ 8,273,637 $ ( 7,782,568 ) $ ( 369,182 ) $ ( 482,049 ) $ ( 359,875 ) $ 994 $ ( 358,881 )

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

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Net earnings $ 359,919 $ 276,554 $ 221,609

(earnings) loss from discontinued operations, net of tax ( 509 ) 366,070 ( 49,187 )

loss (earnings) from discontinued operations, net of tax 2,211 ( 509 ) 366,070

Net earnings from continuing operations 362,130 276,045 587,679

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Depreciation 43,594 41,402 41,271

Amortization of intangibles 28,559 7,525 8,727

Impairment and amortization of intangibles 366,257 28,559 7,525

Deferred income taxes ( 29,953 ) ( 57,969 ) 15,384

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Cash flows from investing activities attributable to continuing operations:

Acquisitions, net of cash ( 859,905 ) — ( 3,759 )

Cash used in business combinations, net of cash acquired ( 25,681 ) ( 859,905 ) —

Capital expenditures ( 49,125 ) ( 79,971 ) ( 42,376 )

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Proceeds from Senior Notes offerings — 500,000 1,000,000

Proceeds from Exchangeable Senior Notes offerings — — 1,150,000

Principal payment on Senior Notes — — ( 400,000 )

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( 176,310 ) ( 630,658 ) —

Purchase of exchangeable note hedges — — ( 303,428 )

Proceeds from issuance of warrants — — 166,520

Proceeds from the settlement of exchangeable note hedges

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Withholding taxes paid on behalf of employees on net settled stock-based awards ( 109,256 ) ( 15,726 ) ( 211,958 )

Purchase of treasury stock ( 482,049 ) — —

Purchase of noncontrolling interests ( 10,554 ) ( 1,473 ) ( 15,827 )

Other, net 129 258 ( 15,187 )

Net cash provided by financing activities attributable to continuing operations

111,106 1,787,846 654,024

Total cash provided by (used in) continuing operations 83,780 ( 1,345,733 ) 1,260,283

MATCH GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

Years Ended December 31,

Net cash (used in) provided by financing activities attributable to continuing operations

( 689,173 ) 111,106 1,787,846

(In thousands)

Total cash (used in) provided by continuing operations ( 235,187 ) 83,780 ( 1,345,733 )

Net cash provided by operating activities attributable to discontinued operations — — 13,630

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Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 7,809 ) ( 7,570 ) 5,426

Net increase (decrease) in cash, cash equivalents, and restricted cash 76,210 ( 2,401,056 ) 1,006,673

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 242,996 ) 76,210 ( 2,401,056 )

Cash, cash equivalents, and restricted cash at beginning of period 815,512 739,302 3,140,358

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Match Group, Inc., through its portfolio companies, is a leading provider of digital technologies designed to help people make meaningful connections.

Our global portfolio of brands includes Tinder ® , Match ® , Hinge ® , Meetic ® , OkCupid ® , Pairs™, PlentyOfFish ® , OurTime ® , Azar ® , Hakuna Live™, and more, each built to increase our users’ likelihood of connecting with others.

Our global portfolio of brands includes Tinder ® , Hinge ® , Match ® , Meetic ® , OkCupid ® , Pairs™, Plenty Of Fish ® , Azar ® , Hakuna®, and more, each built to increase our users’ likelihood of connecting with others.

Through our trusted brands, we provide tailored services to meet the varying preferences of our users.

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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.

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When indicators of impairment exist, the Company prepares quantitative assessments of the fair value of our investments in equity securities, which require judgment and the use of estimates.

When our 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 (expense) income, net.

Accounting Estimates

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The Company classifies deferred revenue as current when the term of the applicable subscription period or expected completion of our performance obligation is one year or less.

The deferred revenue balances are $ 262.1 million, $ 239.1 million, and $ 218.8 million at December 31, 2021 and 2020, and 2019, respectively.

The deferred revenue balances are $ 252.7 million, $ 262.1 million, and $ 239.1 million at December 31, 2022, 2021, and 2020, respectively.

During the years ended December 31, 2022 and 2021, the Company recognized $ 262.1 million and $ 239.1 million of revenue that was included in the deferred revenue balance as of December 31, 2021 and 2020, respectively.

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Tinder $ 1,794,467 $ 1,649,757 $ 1,355,400

Hinge 283,668 196,538 90,145

Other brands 1,052,086 1,076,576 899,179

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The purchase price of each acquisition is attributed to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets that either arise from a contractual or legal right or are separable from goodwill.

The Company typically engages outside valuation experts to assist in the allocation of purchase price to the identifiable intangible assets acquired, but management has ultimate responsibility for the valuation methods, models, and inputs used and the resulting purchase price allocation.

The excess purchase price over the net tangible and identifiable intangible assets is

MATCH GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recorded as goodwill and assigned to the reporting unit that is expected to benefit from the combination as of the acquisition date.

purchase price allocation.

The excess purchase price over the net tangible and identifiable intangible assets is recorded as goodwill and assigned to the reporting unit that is expected to benefit from the combination as of the acquisition date.

Goodwill and Indefinite-Lived Intangible Assets

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If the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the excess is recorded.

As a result of the Separation in 2020, the Company had a negative carrying value for the Company’s annual goodwill test at both October 1, 2020 and 2021.

The Company had a negative carrying value for the Company’s annual goodwill test at both October 1, 2021 and 2022.

Additionally, an impairment test of goodwill was not necessary because there were no factors identified that would indicate an impairment loss.

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If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss equal to the excess is recorded.

While the Company has the option to qualitatively assess whether it is more likely than not that the fair values of its indefinite-lived intangible assets are less than their carrying values, the Company’s policy is to determine the fair value of each of its indefinite-lived intangible assets annually as of October 1, in part, because the level of effort required to perform the quantitative and qualitative assessments is essentially equivalent.

Due to the recent acquisition of Hyperconnect and the process to allocate the purchase price as of the purchase date, the intangible assets of Hyperconnect were considered qualitatively as of October 1, 2021.

For assets in which a quantitative assessment was performed, the Company determines the fair value of its indefinite-lived intangible assets using an avoided royalty discounted cash flow (“DCF”) valuation analysis.

The Company has the option to qualitatively assess whether it is more likely than not that the fair values of its indefinite-lived intangible assets are less than their carrying values.

For certain indefinite-lived intangible assets, for which the fair value as of the most recent assessment date significantly exceeded the carrying value, the Company performed a qualitative impairment assessment as of October 1, 2022 and concluded that it was more likely than not that the fair values of those indefinite-lived intangible assets continued to exceed the carrying values.

For assets in which a quantitative assessment is performed, the Company determines the fair value of its indefinite-lived intangible assets using an avoided royalty discounted cash flow (“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 are 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 are based upon an estimate of the royalty rates that a market participant would pay to license the Company’s trade names and trademarks.

The future cash flows are based on the Company’s most recent forecast and budget and, for years beyond the budget, the Company’s estimates, which are based, in part, on forecasted growth rates.

Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors.

The discount rates used in the Company’s annual indefinite-lived impairment assessment ranged from 10 % to 16 % in 2021 and 10 % to 23 % in 2020, and the royalty rates used ranged from 5 % to 8 % in both 2021 and 2020.

During the year ended December 31, 2020, the Company recognized an impairment charge related to the Match brand in the UK and the Meetic brand in Europe of $ 4.6 million, which is included within amortization.

During the year ended December 31, 2019, the Company recognized an impairment charge on the Match brand in the UK of $ 6.6 million, which is included within amortization.

At December 31, 2021 and 2020, no indefinite-lived intangible asset balance had an estimated fair value less than 110% of carrying value.

Long-Lived Assets and Intangible Assets with Definite Lives

Long-lived assets, which consist of ROU assets, property and equipment, and intangible assets with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

The carrying value of a long-lived asset is not recoverable if it exceeds the

The royalty rates used in the DCF analyses are based upon an estimate of the royalty rates that a market participant would pay to license the specific trade names and trademarks.

The future cash flows are based on the Company’s most recent forecast and budget and, for years beyond the budget, the Company’s estimates are based, in part, on forecasted growth rates.

Assumptions used in the avoided royalty DCF analyses, including the discount rate and royalty rate, are assessed at least annually based on the actual and projected cash flows related to the asset, as well as macroeconomic and industry specific factors.

The discount rates used in the Company’s quantitative assessments as part of the annual indefinite-lived impairment assessment ranged from 12 % to 16 % in 2022 and 10 % to 16 % in 2021, and the royalty rates used ranged from 3 % to 8 % in 2022 and 5 % to 8 % in 2021.

If the carrying value of an indefinite-lived intangible asset exceeds its estimated fair value, an impairment equal to the excess is recorded.

During the year ended December 31, 2022, the Company recognized impairment charges of $ 244.3 million related to the Azar and Hakuna brands at Hyperconnect, $ 43.9 million related to the Meetic and Match brands in Europe, and $ 5.5 million related to certain affinity brands in the U.S., all of which are included within “impairment and amortization of intangibles” in the consolidated statement of operations.

At December 31, 2022, the aggregate indefinite-lived intangible asset balance for which the estimate of fair value was less than 110% of carrying values was approximately $ 84.3 million.

At December 31, 2021, no indefinite-lived intangible asset balance had an estimated fair value that was less than 110% of carrying value.

MATCH GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

In connection with the annual impairment assessment, the Company reviews the useful lives for intangible assets and whether events or changes in circumstances indicate that an indefinite life may no longer be appropriate.

As of October 1, 2022, the Company reclassified certain indefinite-lived intangible assets with a carrying value of $ 49.9 million to the definite-lived intangible asset category because these assets were no longer considered to have an indefinite life.

Long-Lived Assets and Intangible Assets with Definite Lives

The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value.

Amortization of definite-lived intangible assets is computed either on a straight-line basis or based on the pattern in which the economic benefits of the asset will be realized.

During the year ended December 31, 2022, the Company recognized an impairment charge related to Hyperconnect intangible assets with definite lives of $ 25.8 million, which is included within “ impairment and amortization of intangibles ” in the consolidated statement of operations.

Fair Value Measurements

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Legal costs are expensed as incurred.

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We are subject to income taxes in the United States and numerous foreign jurisdictions.

Significant judgement is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.

Significant judgment is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.

The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial reporting amounts of existing assets and liabilities and their respective tax bases.

3 unchanged sentences

Such tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Company records interest and penalties related to uncertain tax positions as a component of income tax expense.

The Company records interest and penalties related to uncertain tax positions as a component of income tax expense.

Earnings Per Share

Basic earnings per share is computed by dividing net earnings attributable to Match Group shareholders by the weighted average number of common shares outstanding during the period.

Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock using the treasury stock or the as if converted methods, as applicable.

Diluted earnings per share reflects the potential dilution that could occur from stock options and other commitments to issue common stock using the treasury stock or the as if converted methods, as applicable.

See “Note 10—Earnings per Share” for additional information on dilutive securities.

5 unchanged sentences

Translation gains and losses relating to foreign entities that are liquidated or substantially liquidated are reclassified out of accumulated other comprehensive loss into earnings.

A loss of $ 0.2 million during the year ended December 31, 2020 is included in “other (expense) income, net” in the accompanying consolidated statement of operations.

A loss of $ 0.2 million during the year ended December 31, 2020 is included in “other income (expense), net” in the accompanying consolidated statement of operations.

There were no such gains or losses for the years ended December 31, 2022 and 2021.

6 unchanged sentences

Accordingly, all noncontrolling interests that are redeemable at the option of the holder are presented outside of shareholders’ equity in the accompanying consolidated balance sheet.

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In connection with the acquisition of certain subsidiaries, management of these businesses has retained an ownership interest.

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These put and call arrangements become exercisable by the Company and the counterparty at various future dates.

One of these arrangements was exercised during each of the years ended December 31, 2020 and 2019.

These put arrangements are exercisable by the counter-party outside the control of the Company.

One of these arrangements was exercised during the year ended December 31, 2020.

These put arrangements are exercisable by the counterparty outside the control of the Company.

Accordingly, to the extent that the fair value of these interests exceeds the value determined by normal noncontrolling interest accounting, the value of such interests is adjusted to fair value with a corresponding adjustment to additional paid-in capital.

During the years ended December 31, 2022, 2021, and 2020, the Company recorded adjustments of $ 1.4 million, $ 2.7 million, and $ 6.7 million, respectively, to increase these interests to fair value.

Fair value determinations require high levels of judgment and are based on various valuation techniques, including market comparables and discounted cash flow projections.

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair value determinations, which are level 3 assessments, require high levels of judgment and are based on various valuation techniques, including market comparables and discounted cash flow projections.

Certain Risks and Concentrations

4 unchanged sentences

Accounting pronouncements adopted by the Company

In August 2020, the FASB issued ASU No.

2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity.

Among other changes, ASU 2020-06 removes from U.S.

GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt.

Similarly, the discount resulting from the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument.

Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging , or (2) a convertible debt instrument was issued at a substantial premium.

ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, which results in increased dilutive securities as the assumption of cash settlement of the notes is not available for the purpose of calculating earnings per share.

The provisions of ASU 2020-06 are effective for reporting periods beginning after December 15, 2021, with early adoption permitted for reporting periods beginning after December 15, 2020, and can be adopted on either a fully retrospective or modified retrospective basis.

The Company early adopted ASU No.

2020-06 as of January 1, 2021 on a fully retrospective basis.

The impact of adopting ASU No.

2020-06 is as follows:

Year Ended December 31, 2020 Year Ended December 31, 2019

Prior to the adoption of ASU No.

2020-06 After adoption of ASU No.

2020-06 Effect of adoption of ASU No.

2020-06 Prior to the adoption of ASU No.

2020-06 After adoption of ASU No.

2020-06 Effect of adoption of ASU No.

(In thousands, except per share data)

Statement of operations impacts

Interest expense $ 174,791 $ 130,624 $ ( 44,167 ) $ 140,570 $ 111,008 $ ( 29,562 )

Income tax provision $ 32,874 $ 43,273 $ 10,399 $ 8,225 $ 15,080 $ 6,855

Net earnings from continuing operations $ 553,911 $ 587,679 $ 33,768 $ 494,633 $ 517,340 $ 22,707

Net earnings per share from continuing operations:

Basic $ 2.21 $ 2.36 $ 0.15 $ 2.15 $ 2.28 $ 0.13

Diluted $ 2.00 $ 2.09 $ 0.09 $ 1.88 $ 1.95 $ 0.07

Weighted average dilutive shares outstanding

242,464 256,020 13,556 194,349 201,782 7,433

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Prior to the adoption of ASU No.

2020-06 After adoption of ASU No.

2020-06 Effect of adoption of ASU No.

(In thousands)

Balance sheet impacts at December 31, 2020:

Non-current deferred tax asset $ 224,013 $ 293,487 $ 69,474

Long-term debt, net $ 3,534,706 $ 3,840,930 $ 306,224

Additional paid-in capital $ 7,394,646 $ 7,089,007 $ ( 305,639 )

Retained deficit $ ( 8,491,126 ) $ ( 8,422,237 ) $ 68,889

The impact of the adoption of ASU No.

2020-06 at December 31, 2018 resulted in an increase to retained earnings of $ 12.4 million and a decrease in additional paid-in capital of $ 53.5 million.

As the adoption of ASU No.

2020-06 did not impact cash, the operating cash flows from continuing operations were not impacted.

Certain reconciliation line items to net earnings from continuing operations were adjusted to reflect the impact of the adoption of ASU No.

Accounting pronouncements not yet adopted by the Company

In October 2021, the FASB issued ASU No.

2021-08, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers .

2021-08, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers .

The update will generally result in an entity recognizing contract assets and contract liabilities as if the acquirer had originated the contracts, which, for the most part, results in no change to the value of deferred revenue when measured in purchase accounting.

The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted.

The adoption of the new standard is not expected to have a material impact on our operating results, financial position, or cash flows.

We adopted the new standard in the third quarter of 2022 effective January 1, 2022 and applied its provisions to our acquisition in 2022.

The adoption of the new standard did not have a material impact on our operating results, financial position, or cash flows.

Reclassifications

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NOTE 3—INCOME TAXES

and foreign earnings before income taxes are as follows:

and foreign earnings (loss) from continuing operations before income taxes are as follows:

Years Ended December 31,

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Current income tax provision 45,314 38,072 27,889

Deferred income tax provision (benefit):

Deferred income tax (benefit) provision:

Federal 76,185 ( 32,723 ) 31,025

2 unchanged sentences

Deferred income tax (benefit) provision ( 29,953 ) ( 57,969 ) 15,384

Income tax (benefit) provision $ ( 19,897 ) $ 43,273 $ 15,080

Income tax provision (benefit) $ 15,361 $ ( 19,897 ) $ 43,273

The tax effects of cumulative temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below.

6 unchanged sentences

Disallowed interest carryforwards 64,463 52,104

Capitalized research expenses 49,113 —

Stock-based compensation 20,653 15,491

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Net deferred tax assets $ 244,316 $ 204,676

The Company’s tax group for federal and consolidated state income tax purposes includes Former IAC up to and including the Separation date.

As a result of the Separation, the Company’s net deferred tax asset was adjusted via additional paid-in capital for tax attributes allocated to Match Group from our consolidated federal and state income tax returns.

A preliminary allocation was recorded as of June 30, 2020.

The final adjustment

MATCH GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recorded in 2021 as a result of filing the 2020 consolidated federal and state income tax returns was not significant.

Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when the taxes are paid or recovered.

Pursuant to the Tax Cuts and Jobs Act of 2017, beginning in 2022, the Company is required to capitalize and amortize research expenses for income tax purposes.

At December 31, 2022, the Company has federal and state net operating losses (“NOLs”) of $ 11.5 million and $ 213.0 million, respectively.

1 unchanged sentence

Of the state NOLs, $ 3.1 million can be carried forward indefinitely and $ 209.9 million will expire at various times between 2024 and 2042.

Federal and state NOLs of $ 142.6 million and $ 252.1 million, respectively, can be used against future taxable income without restriction and the remaining NOLs will be subject to limitations under Section 382 of the Internal Revenue Code, separate return limitations, federal taxable income limitations, and applicable state law.

Federal and state NOLs of $ 4.3 million and $ 182.8 million, respectively, can be used against future taxable income without restriction and the remaining NOLs are subject to limitations under Section 382 of the Internal Revenue Code, separate return limitations, and applicable state law.

At December 31, 2022, the Company has foreign NOLs of $ 185.1 million available to offset future income.

3 unchanged sentences

At December 31, 2022, the Company has tax credit carryforwards of $ 164.0 million.

Of this amount, $ 125.1 million relates to federal and state tax credits for research activities, of which $ 80.8 million will expire at various times between 2033 and 2041.

Of this amount, $ 127.4 million relates to federal, state, and foreign tax credits for research activities, of which $ 76.6 million will expire at various times between 2030 and 2042.

Our credit carryforwards also include $ 34.3 million of foreign tax credits, of which $ 31.8 million will expire primarily in 2027.

The Company regularly assesses the realizability of deferred tax assets considering all available evidence, including, to the extent applicable, the nature, frequency, and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, the duration of statutory carryforward periods, available tax planning and historical experience.

During the year ended December 31, 2021, we recorded an increase to the valuation allowance of $ 15.0 million primarily related to foreign losses for which we do not believe a tax benefit is more likely than not to be realized.

During the year ended December 31, 2022, we recorded a $ 14.9 million net decrease to the valuation allowance primarily related to a reversal of $ 22.6 million of valuation allowances on certain foreign deferred tax assets due to the refinancing of various intercompany loans which are expected to generate interest income.

The reversal was partially offset by $ 7.7 million of additional valuation allowances.

At December 31, 2022, the Company had a valuation allowance of $ 71.1 million related to the portion of credits, NOLs, and other deferred tax assets for which it is more likely than not that the tax benefit will not be realized.

8 unchanged sentences

Research credits ( 12,611 ) ( 25,830 ) ( 21,306 )

Foreign-derived intangible income deduction ( 12,646 ) — —

Change in valuation allowance ( 22,621 ) 8,523 29,787

3 unchanged sentences

Other, net 3,329 ( 3,077 ) 3,645

Income tax (benefit) provision $ ( 19,897 ) $ 43,273 $ 15,080

Income tax provision (benefit) $ 15,361 $ ( 19,897 ) $ 43,273

MATCH GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The 2022 income tax provision benefited primarily from (a) the release of a valuation allowance on certain foreign deferred tax assets as we expect to be able to use those deferred tax assets in the foreseeable future, (b) favorable outcomes of tax audits, and (c) a lower tax rate on U.S.

income derived from foreign sources.

The benefits were partially offset by higher state income taxes due to higher taxable income in the U.S.

The 2021 and 2020 income tax provisions benefited primarily from (a) excess tax benefits generated by the exercise and vesting of stock-based awards and (b) research credits.

In 2020, this benefit was partially offset by an increase in valuation allowances on foreign tax credits.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, including penalties but excluding interest, is as follows:

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The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision.

Our income tax provision, for the years ended December 31, 2021, 2020, and 2019, includes a (decrease) or increase of interest and penalties of $( 0.3 ) million, $( 1.7 ) million, and $ 0.1 million, respectively.

Our income tax provision for the years ended December 31, 2022, 2021, and 2020, includes a decrease of interest and penalties of $ 0.3 million, $ 0.3 million, and $ 1.7 million, respectively.

At December 31, 2022 and 2021, noncurrent income taxes payable include accrued interest and penalties of $ 1.2 million and $ 1.5 million, respectively.

1 unchanged sentence

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 the Company’s federal income tax returns for the years ended December 31, 2013 through 2017 and has begun its audit of the years ended December 31, 2018 and 2019.

The Internal Revenue Service (“IRS”) has substantially completed its audit of the Company’s federal income tax returns for years through December 31, 2019.

The statute of limitations for years 2013 through 2019 has been extended to December 31, 2023.

We are no longer subject to U.S.

federal income tax examinations for years prior to 2013.

Returns filed in various other jurisdictions are open to examination for tax years beginning with 2014.

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Generally, our ability to distribute the $ 172.7 million cash and cash equivalents held by our foreign subsidiaries at December 31, 2022 is limited to that subsidiary’s distributable reserves and after considering other corporate legal restrictions.

Our earnings in foreign jurisdictions are generally available for distribution to the U.S.

without significant tax consequences.

The remaining excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries is indefinitely reinvested, and the determination of any deferred tax liability on this amount is not practicable.

MATCH GROUP, INC.

2 unchanged sentences

NOTE 4—DISCONTINUED OPERATIONS

As part of the Separation described in “Note 1—Organization,” the operations of Former IAC businesses other than Match Group are presented as discontinued operations.

The key components of earnings (loss) from discontinued operations for the years ended December 31, 2021, 2020, and 2019 consist of the following:

As part of the Separation described in “Note 2—Summary of Significant Accounting Policies,” the operations of Former IAC businesses other than Match Group are presented as discontinued operations.

The key components of (loss) earnings from discontinued operations for the years ended December 31, 2022, 2021, and 2020 consist of the following:

Years Ended December 31,

5 unchanged sentences

Interest expense — — ( 3,772 )

Other (expense) income — ( 2,503 ) 68,767

Income tax benefit 509 69,898 57,534

Earnings (loss) from discontinued operations $ 509 $ ( 366,070 ) $ 49,187

Other expense, net — — ( 2,503 )

Income tax (provision) benefit ( 2,211 ) 509 69,898

(Loss) earnings from discontinued operations $ ( 2,211 ) $ 509 $ ( 366,070 )

NOTE 5—GOODWILL AND INTANGIBLE ASSETS

5 unchanged sentences

Total goodwill and intangible assets, net $ 2,706,113 $ 3,183,693

For the year ended December 31, 2019, the Company recognized an impairment charge on the Match ® brand in the UK of $ 6.6 million.

During the year ended December 31, 2020, the Company recognized additional impairment charges totaling $ 4.6 million related to the Match brand in the UK and the Meetic brand in Europe as the outbreak of COVID-19 placed additional pressure on projected 2020 revenues at these brands.

These charges are included within amortization expense in the consolidated statement of operations for the years then ended.

The following table presents the balance of goodwill, including the changes in the carrying value of goodwill, for the years ended December 31, 2022 and 2021:

3 unchanged sentences

Foreign Exchange Translation ( 90,716 ) ( 101,599 )

Other — ( 255 )

Balance at December 31 $ 2,348,366 $ 2,411,996

On July 11, 2022, Match Group completed the acquisition of all outstanding capital stock of The League App, Inc., a dating app provider focused on career-oriented individuals.

The purchase price, net of cash received, was $ 29.9 million, of which $ 25.7 million was paid in cash on the acquisition date and $ 4.2 million was deferred cash consideration that remains payable at December 31, 2022.

The purchase price was primarily allocated to goodwill and intangible assets.

On June 17, 2021, Match Group completed the acquisition of all capital stock of Hyperconnect, Inc., a leading social discovery and video technology company based in Seoul, South Korea.

The acquisition increased our presence in certain Asian markets and enhanced the real-time video capabilities of Match Group.

MATCH GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On June 17, 2021, Match Group completed the acquisition of all capital stock of Hyperconnect, Inc.

(“Hyperconnect”), a leading social discovery and video technology company based in Seoul, South Korea.

The acquisition increases our presence in certain Asian markets and enhances the real-time video capabilities of Match Group.

The accounting purchase price was $ 1.75 billion, which consisted of $ 859.9 million of cash, net of cash acquired, and 5.9 million shares of Match Group common stock at a basis of the closing market price on the acquisition date.

The purchase price has been preliminarily allocated to goodwill of $ 1.2 billion that is not deductible for tax purposes;

intangible assets of $ 612.0 million primarily consisting of tradenames and associated trademarks, both of which are indefinite life intangible assets, with a related deferred tax liability of $ 134.7 million;

accounting purchase price was $ 1.75 billion, which consisted of $ 859.9 million of cash, net of cash acquired, and 5.9 million shares of Match Group common stock at a basis of the closing market price on the acquisition date.

The purchase price was allocated to goodwill of $ 1.2 billion that is not deductible for tax purposes;

intangible assets of $ 612.0 million primarily consisting of trade names and associated trademarks, both of which are indefinite life intangible assets, with a related deferred tax liability of $ 134.7 million;

and $ 30.4 million of other net assets.

The allocation of the accounting purchase price, which is based on Level 3 inputs, is substantially complete and will be finalized within the allowable measurement period.

The allocation of the accounting purchase price, which is based on Level 3 inputs, is final.

During the year ended December 31, 2022, the Company recognized impairment charges of $ 270.1 million related to Hyperconnect indefinite- and definite-lived intangible assets related to a decline in long-term projections for the business since the acquisition in June 2021, including adverse foreign currency impacts in certain of Hyperconnect’s key markets, and the use of higher discount rates to value the assets.

Additionally, the Company recognized $ 49.4 million of impairment during the year ended December 31, 2022 related to certain trade names including the Meetic and Match brands in Europe and certain affinity brands in the U.S., primarily due to declining projections at such brands.

These charges are included within impairment and amortization of intangibles in the consolidated statement of operations.

Intangible assets with indefinite lives are trade names and trademarks acquired in various acquisitions.

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For both the years ended December 31, 2022 and 2021, there were no adjustments to the carrying value of equity securities without readily determinable fair values.

For the year ended December 31, 2019, we recognized an impairment charge of $ 4.0 million which is included in “Other (expense) income, net” in the accompanying consolidated statement of operations.

Fair Value Measurements

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Time deposits — 36,831 36,831

Short-term investments:

Time deposits — 11,818 11,818

Total $ 260,582 $ 48,649 $ 309,231

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______________________

(a) The carrying value excludes the $ 15.6 million aggregate principal amount of the exchanged 2022 Exchangeable Notes as that amount is carried at fair value as described below.

(a) At December 31, 2021, the carrying value excludes the $ 15.6 million aggregate principal amount of the exchanged 2022 Exchangeable Notes as that amount is carried at fair value as described below.

(b) At December 31, 2021, the carrying value of current maturities of long-term debt, net includes unamortized debt issuance costs of $ 0.6 million.

At December 31, 2022 and 2021, the carrying value of long-term debt, net includes unamortized original issue discount and debt issuance costs of $ 39.3 million and $ 45.6 million, respectively.

(c) At December 31, 2021, the fair value of the outstanding 2022 Exchangeable Notes, 2026 Exchangeable Notes, and 2030 Exchangeable Notes is $ 302.2 million, $ 932.6 million, and $ 1,017.7 million, respectively.

(c) At December 31, 2022, the fair value of the outstanding 2026 Exchangeable Notes and 2030 Exchangeable Notes is $ 514.4 million and $ 499.7 million, respectively.

At December 31, 2021, the fair value of the outstanding 2022 Exchangeable Notes, 2026 Exchangeable Notes, and 2030 Exchangeable Notes is $ 302.2 million, $ 932.6 million, and $ 1,017.7 million, respectively.

6 unchanged sentences

At September 30, 2021, under the terms of the agreements, the number of shares to be issued became fixed at 5.5 million.

The corresponding loss of $ 14.5 million, related to the change in the fair value of the embedded derivative, which was driven by an increase in our stock price from September 22, 2021 to October 4, 2021, the settlement date of the transaction, was recorded within “other (expense) income, net” in the accompanying consolidated statement of operations.

During the year ended December 31, 2021, $ 18.6 million aggregate principal amount of the 2022 Exchangeable Notes were presented for exchange prior to maturity at the option of the noteholder, $ 3.0 million of which was settled during the year ended December 31, 2021 and $ 15.6 million of which will be settled in January 2022.

In accordance with the 2022 Exchangeable Notes Indenture, the Company elected to settle these exchanges entirely in cash with the settlement amount determined by the volume weighted average price of Match Group common stock over a 40-day measurement period.

The corresponding loss of $ 14.5 million, related to the change in the fair value of the embedded derivative, which was driven by an increase in our stock price from September 22, 2021 to October 4, 2021, the settlement date of the transaction, was recorded within “other income (expense), net” in the accompanying consolidated statement of operations.

During the year ended December 31, 2021, $ 18.6 million aggregate principal amount of the 2022 Exchangeable Notes were presented for exchange prior to maturity at the option of the noteholders, $ 3.0 million of which was settled during that year and $ 15.6 million of which was settled in January 2022.

In accordance with the indenture governing the 2022 Exchangeable Notes, the Company elected to settle these exchanges entirely in cash with the settlement amount determined by the volume-weighted average price of Match Group common stock over a 40-day measurement period.

At the time that the Company elected cash settlement, the embedded derivative for the conversion option of the 2022 Exchangeable Notes no longer qualified for the derivative scope exception for contracts indexed to an entity’s own equity.

We recognized an obligation of $ 48.5 million in “accrued expenses and other current liabilities” to settle the conversion option as of the date of the exchanges, with an offset to paid-in capital.

Subsequently, we recognized $ 9.7 million in gains, which is included in “other (expense) income, net” within the accompanying consolidated statement of

Subsequently, we recognized $ 9.7 million in gains, which is included in “other (expense) income, net” within the accompanying consolidated statement of operations for the year ended December 31, 2021, related to the change in the fair value of the embedded derivative between the date we

MATCH GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

operations for the year ended December 31, 2021 related to the change in the fair value of the embedded derivative between the date we elected to settle in cash and the end of the 40-day measurement period, or December 31, 2021, if the measurement period extended past year-end.

For the exchanged 2022 Exchangeable Notes that were still outstanding at December 31, 2021 and were settled in January 2022, the following items were outstanding on the consolidated balance sheet at December 31, 2021:

elected to settle in cash and the end of the 40-day measurement period, or December 31, 2021, if the measurement period extended past year-end.

For the 2022 Exchangeable Notes that were presented for exchange and which were still outstanding at December 31, 2021 and were settled in January 2022, the following items were outstanding on the consolidated balance sheet at December 31, 2021:

• The fair value of the outstanding embedded derivative of $ 7.4 million, which is included as an asset within “other current assets;”

• the aggregate principal amount of $ 15.6 million for 2022 Exchangeable Notes presented for exchange, which is presented within “current maturities of long-term debt, net;” and

• the aggregate principal amount of $ 15.6 million for such 2022 Exchangeable Notes, which is presented within “current maturities of long-term debt, net;” and

• an incremental $ 39.5 million liability recorded on the date of exchange, which is presented within “accrued expenses and other current liabilities.“

Additionally, when the Company elected to settle the exchanged 2022 Exchangeable Notes entirely in cash, a proportionate amount of note hedges were also exercised and were settled in cash based on the same 40-day measurement period to determine the settlement value.

Additionally, when the Company elected to settle the 2022 Exchangeable Notes presented for exchange entirely in cash, a proportionate amount of note hedges was also exercised and settled in cash based on the same 40-day measurement period to determine the settlement value.

Similar to the exchanged 2022 Exchangeable Notes, the derivative scope exception for contracts indexed to an entity’s own equity no longer applied to the exercised note hedges as a result of the requirement to settle the securities in cash.

We recognized an asset of $ 48.5 million related to the settlement of these note hedges, with an offset to paid-in capital.

Subsequently, we recognized a loss of $ 9.7 million, which is included in “other (expense) income, net” in the accompanying consolidated statement of operations for the year ended December 31, 2021 related to the change in the related derivative fair value between the date we elected to settle in cash and the end of the 40-day measurement period, or December 31, 2021, if the measurement period extended past year-end.

For the exercised note hedges that were settled in January 2022, the fair value of the outstanding note hedges at December 31, 2021 is $ 32.1 million, which is included as an asset within “other current assets” on the consolidated balance sheet.

At December 31, 2021, the net position of the various assets and liabilities associated with the unsettled exchanged 2022 Exchangeable Notes and the note hedges, described above, is a $ 15.6 million liability, representing the principal amount of the exchanged 2022 Exchangeable Notes, which was settled in January 2022.

Subsequently, we recognized a loss of $ 9.7 million, which is included in “ other (expense) income, net ” in the accompanying consolidated statement of operations for the year ended December 31, 2021, related to the change in the corresponding derivative fair value between the date we elected to settle in cash and the end of the 40-day measurement period, or December 31, 2021, if the measurement period extended past year-end.

For the note hedges that were settled in January 2022, the fair value of the outstanding note hedges at December 31, 2021 is $ 32.1 million, which is included as an asset within “other current assets” on the consolidated balance sheet.

At December 31, 2021, the net position of the various assets and liabilities associated with the unsettled 2022 Exchangeable Notes presented for exchange and the related note hedges is a $ 15.6 million liability, representing the principal amount of such 2022 Exchangeable Notes, which were settled in January 2022.

MATCH GROUP, INC.

21 unchanged sentences

interest payable each April 1 and October 1 commencing on April 1, 2022

500,000 500,000

0.875 % Exchangeable Senior Notes due October 1, 2022 (the “2022 Exchangeable Notes”);

interest payable each April 1 and October 1

100,500 517,500

0.875 % Exchangeable Senior Notes due June 15, 2026 (the “2026 Exchangeable Notes”);

9 unchanged sentences

Total long-term debt, net $ 3,835,726 $ 3,829,421

The following diagram illustrates where debt is held in our corporate structure as of December 31, 2022.

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Credit Facility and Term Loan

Our wholly-owned subsidiary, Match Group Holdings II, LLC (“MG Holdings II”) is the borrower under a credit agreement (as amended, the “Credit Agreement”) that provides for the Credit Facility and the Term Loan.

MG Holdings II is the borrower under a credit agreement (as amended, the “Credit Agreement”) that provides for the Credit Facility and the Term Loan.

The Credit Agreement provides for a benchmark replacement should the LIBOR rate not be available in the future.

3 unchanged sentences

The Credit Facility has a borrowing capacity of $ 750 million and matures on February 13, 2025.

At both December 31, 2021 and 2020, there were no outstanding borrowings under the Credit Facility.

At December 31, 2021, there was $ 0.4 million in outstanding letters of credit and $ 749.6 million of availability under the Credit Facility.

At December 31, 2020, there was $ 0.2 million in outstanding letters of credit and $ 749.8 million of availability under the Credit Facility.

At both December 31, 2022 and 2021, there were no outstanding borrowings, $ 0.4 million in outstanding letters of credit, and $ 749.6 million of availability under the Credit Facility.

The annual commitment fee on undrawn funds, which is based on MG Holdings II’s consolidated net leverage ratio, was 25 basis points as of December 31, 2022.

2 unchanged sentences

At both December 31, 2022 and 2021, the outstanding balance on the Term Loan was $ 425 million.

The Term Loan bears interest at LIBOR plus 1.75 %, which was 1.91 % and 1.96 % at December 31, 2021 and 2020,

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

respectively.

The Term Loan bears interest at LIBOR plus 1.75 %, which was 6.49 % and 1.91 % at December 31, 2022 and 2021, respectively.

The Term Loan matures on February 13, 2027.

1 unchanged sentence

The Term Loan provides for annual principal payments as part of an excess cash flow sweep provision, the amount of which, if any, is governed by the secured net leverage ratio set forth in the Credit Agreement.

On March 26, 2021, MG Holdings II entered into an amendment of the Credit Agreement to provide for a $ 400 million Delayed Draw Term Loan, the proceeds of which could have been used only to finance a portion of the consideration for the acquisition of Hyperconnect.

The Delayed Draw Term Loan was terminated effective June 18, 2021, in accordance with its terms.

The Credit Agreement includes covenants that would limit the ability of MG Holdings II to pay dividends, make distributions, or repurchase MG Holdings II’s stock in the event MG Holdings II’s secured net leverage ratio exceeds 2.0 to 1.0, while the Term Loan remains outstanding and, thereafter, if MG Holdings II’s consolidated net leverage ratio exceeds 4.0 to 1.0, or if an event of default has occurred.

12 unchanged sentences

The 4.625 % Senior Notes were issued on May 19, 2020.

The proceeds from these notes were used to redeem the outstanding 6.375 % Senior Notes, to pay expenses associated with the offering, and for general corporate purposes.

The proceeds from these notes were used to redeem then outstanding senior notes, to pay expenses associated with the offering, and for general corporate purposes.

At any time prior to June 1, 2023, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes.

Thereafter, these notes may be redeemed at the redemption prices set forth below, together with accrued and unpaid interest to the applicable redemption date:

Thereafter, these notes may be redeemed at the redemption prices set forth

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

below, together with accrued and unpaid interest to the applicable redemption date:

Beginning June 1, Percentage

2 unchanged sentences

2025 and thereafter 100.000 %

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The 4.125 % Senior Notes were issued on February 11, 2020.

16 unchanged sentences

2027 and thereafter 100.000 %

The 5.00 % Senior Notes were issued on December 4, 2017.

The 5.00 % Senior Notes were issued on December 4, 2017, and are currently redeemable.

The proceeds, along with cash on hand, were used to redeem then outstanding senior notes and pay the related call premium.

At any time prior to December 15, 2022, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes.

Thereafter, these notes may be redeemed at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date:

These notes may be redeemed at the redemption prices set forth below, together with accrued and unpaid interest thereon to the applicable redemption date:

Beginning December 15, Percentage

3 unchanged sentences

2025 and thereafter 100.000 %

The 6.375 % Senior Notes were redeemed on June 11, 2020 with proceeds from the 4.625 % Senior Notes.

The related call premium of $ 12.8 million and $ 2.9 million of unamortized original issue discount and debt issuance costs related to the 6.375 % Senior Notes are included in “Other (expense) income, net” in the consolidated statement of operations for the year ended December 31, 2020.

The indenture governing the 5.00 % Senior Notes contains covenants that would limit MG Holdings II’s ability to pay dividends or to make distributions and repurchase or redeem MG Holdings II’s stock in the event a default has occurred or MG Holdings II’s consolidated leverage ratio (as defined in the indenture) exceeds 5.0 to 1.0.

At December 31, 2022, there were no limitations pursuant thereto.

There are additional covenants in the 5.00 % Senior Notes indenture that limit the ability of MG Holdings II and its subsidiaries to, among other things, (i) incur indebtedness, make investments, or sell assets in the event MG Holdings II is not in compliance with specified financial ratios, and (ii) incur liens, enter into agreements restricting their ability to pay dividends, enter into transactions with affiliates, or consolidate, merge or sell substantially all of their assets.

The indentures

MATCH GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

governing the 3.625 % , 4.125 %, 4.625 %, and 5.625 % Senior Notes are less restrictive than the indentures governing the 5.00 % Senior Notes and generally only limit MG Holdings II’s and its subsidiaries’ ability to, among other things, create liens on assets, or consolidate, merge, sell or otherwise dispose of all or substantially all of their assets.

into transactions with affiliates, or consolidate, merge, or sell substantially all of their assets.

The indentures governing the 3.625 % , 4.125 %, 4.625 %, and 5.625 % Senior Notes are less restrictive than the indentures governing the 5.00 % Senior Notes and generally only limit MG Holdings II’s and its subsidiaries’ ability to, among other things, create liens on assets, or consolidate, merge, sell, or otherwise dispose of all or substantially all of their assets.

The Senior Notes all rank equally in right of payment.

1 unchanged sentence

During 2017, Match Group FinanceCo, Inc., a direct, wholly-owned subsidiary of the Company, issued $ 517.5 million aggregate principal amount of its 2022 Exchangeable Notes.

During the years ended December 31, 2022 and 2021 all the outstanding 2022 Exchangeable Notes were redeemed or presented for exchange.

See “Redemption and exchanges of 2022 Exchangeable Notes and related note hedges and warrants” below for details.

During 2019, Match Group FinanceCo 2, Inc.

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The 2026 and 2030 Exchangeable Notes (collectively the “Exchangeable Notes”) are guaranteed by the Company but are not guaranteed by MG Holdings II or any of its subsidiaries.

The following table presents details of the exchangeable features:

The following table presents details of the outstanding exchangeable features:

Number of shares of the Company’s Common Stock into which each $1,000 of Principal of the Exchangeable Notes is Exchangeable (a)

1 unchanged sentence

Exchangeable Date

2022 Exchangeable Notes 22.7331 $ 43.99 July 1, 2022

2026 Exchangeable Notes 11.4259 $ 87.52 March 15, 2026

9 unchanged sentences

Upon exchange, the issuer, in its sole discretion, has the option to settle the Exchangeable Notes with any of the three following alternatives:

(1) shares of the Company’s common stock, (2) cash or (3) a combination of cash and shares of the Company's common stock.

It is the Company’s intention to settle the Exchangeable Notes with cash equal to the face amount of the notes upon exchange.

Any dilution arising from the 2022, 2026, and 2030 Exchangeable Notes would be mitigated by the 2022, 2026, and 2030 Exchangeable Notes Hedges (defined below), respectively.

(1) shares of the Company’s common stock, (2) cash, or (3) a combination of cash and shares of the Company's

MATCH GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s 2022, 2026, and 2030 Exchangeable Notes were all exchangeable as of December 31, 2021.

During the year ended December 31, 2021, a portion of the 2022 Exchangeable Notes were presented for exchange, see “Redemption and exchange of 2022 Exchangeable Notes and related note hedges and warrants” below for details.

No other Exchangeable Notes were presented for exchange during the year ended December 31, 2021.

None of the Exchangeable Notes were exchanged, or presented for exchange, during the year ended December 31, 2020.

common stock.

It is the Company’s intention to settle the Exchangeable Notes with cash equal to the face amount of the notes upon exchange.

Any dilution arising from the 2026 and 2030 Exchangeable Notes would be mitigated by the 2026 and 2030 Exchangeable Notes Hedges (defined below), respectively.

There were not any 2026 or 2030 Exchangeable Notes presented for exchange during the years ended December 31, 2022 and 2021.

Neither of the 2026 and 2030 Exchangeable Notes were exchangeable as of December 31, 2022.

The following table presents the if-converted value that exceeded the principal of each Exchangeable Note outstanding as of December 31, 2022 and 2021 based on the Company’s stock price on December 31, 2022 and 2021, respectively.

1 unchanged sentence

(In millions)

2022 Exchangeable Notes $ 170.4 $ 1,261.2

2022 Exchangeable Notes N/A $ 170.4

2026 Exchangeable Notes $ — $ 293.9

3 unchanged sentences

December 31, 2022 December 31, 2021

2022 Exchangeable Notes 2026 Exchangeable Notes 2030 Exchangeable Notes 2022 Exchangeable Notes 2026 Exchangeable Notes 2030 Exchangeable Notes

2026 Exchangeable Notes 2030 Exchangeable Notes 2022 Exchangeable Notes 2026 Exchangeable Notes 2030 Exchangeable Notes

(In thousands)

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Total interest expense recognized $ 8,174 $ 6,564 $ 12,450

Prior to maturity, the effective interest rate for the 2022 Exchangeable Notes was 1.6 %.

The effective interest rates for the 2026 and 2030 Exchangeable Notes are 1.2 % and 2.2 %, respectively.

Exchangeable Notes Hedges and Warrants

In connection with the Exchangeable Notes offerings, the Company purchased call options allowing the Company to purchase initially (subject to adjustment upon the occurrence of specified events) the same number of shares that would be issuable upon the exchange of the applicable Exchangeable Notes at the price per share set forth below (the “Exchangeable Notes Hedge”), and sold warrants allowing the counterparty to purchase (subject to adjustment upon the occurrence of specified events) shares at the per share price set forth below (the “Exchangeable Notes Warrants”).

The Exchangeable Notes Hedges are expected to reduce the potential dilutive effect on the Company’s common stock upon any exchange of notes and/or offset any cash payment Match Group FinanceCo, Inc., Match Group FinanceCo 2, Inc.

In connection with the Exchangeable Notes offerings, the Company purchased call options allowing the Company to purchase initially (subject to adjustment upon the occurrence of specified events) the same number of shares that would be issuable upon the exchange of the applicable Exchangeable Notes at the price per share set forth below (the “Exchangeable Notes Hedges”), and sold warrants allowing the counterparty to purchase (subject to adjustment upon the occurrence of specified events) shares at the per share price set forth below (the “Exchangeable Notes Warrants”).

or Match Group FinanceCo 3, Inc.

is required to make in excess of the principal amount of the exchanged notes.

The Exchangeable Notes Warrants have a dilutive effect on the Company’s common stock to the extent that the market price per share of the Company common stock exceeds their respective strike prices.

The Exchangeable Notes Warrants have a dilutive effect on the Company’s common stock to the extent that the market price per share of the Company’s common stock exceeds their respective strike prices.

MATCH GROUP, INC.

5 unchanged sentences

(Shares in millions)

2022 Exchangeable Notes Hedge 1.9 $ 43.99

2026 Exchangeable Notes Hedge 6.6 $ 87.52

2030 Exchangeable Notes Hedge 6.8 $ 84.22

2026 Exchangeable Notes Hedges 6.6 $ 87.52

2030 Exchangeable Notes Hedges 6.8 $ 84.22

Number of Shares (a)

1 unchanged sentence

(Shares in millions)

2022 Exchangeable Notes Warrants 2.4 $ 68.22

2022 Exchangeable Notes Warrants (b)

2026 Exchangeable Notes Warrants 6.6 $ 134.76

2 unchanged sentences

(a) Subject to adjustment upon the occurrence of specified events.

(b) The outstanding 2022 Exchangeable Notes Warrants at December 31, 2022 will be exercised ratably over 80 trading days commencing on the first trading day following the expiration date through April 27, 2023.

Redemption and exchanges of 2022 Exchangeable Notes and related note hedges and warrants

During the year ended December 31, 2021, $ 18.6 million aggregate principal amount of the 2022 Exchangeable Notes were presented for exchange, of which $ 15.6 million aggregate principal amount was not settled as of December 31, 2021.

The principal amount of this remaining $ 15.6 million is classified as “current maturities of long-term debt, net” and the fair value in excess of the principal value on the date of exchange is recorded as a current liability within “accrued expenses and other current liabilities.” These obligations were settled in January 2022.

See “Note 6—Financial Instruments” for additional information.

In connection with the 2022 Exchangeable Notes presented for exchange during the year ended December 31, 2021, we exercised 0.4 million underlying shares of the related 2022 Exchangeable Notes Hedges, which were valued based on the volume weighted average price of Match Group common stock over a 40-day measurement period.

During the year ended December 31, 2021, the Company received $ 6.6 million in cash related to these hedge settlements and a $ 32.1 million derivative asset is included in other current assets at December 31, 2021 with respect to the hedges that were still subject to the 40-day measurement period as of year-end.

On October 4, 2021, we repurchased $ 414.0 million aggregate principal amount of our outstanding 2022 Exchangeable Notes, pursuant to privately negotiated agreements executed on September 22, 2021, for approximately $ 1.5 billion, including accrued and unpaid interest on the repurchased notes, funded with (i) net proceeds of $ 879.0 million from a registered direct offering to the holders of the 2022 Exchangeable Notes being repurchased of 5,534,098 shares of our common stock at a price of $ 158.83 per share, (ii) approximately $ 420 million of net proceeds from the 3.625 % Senior Notes offering;

1 unchanged sentence

See “Note 6—Financial Instruments” for additional information.

Separately, during the years ended December 31, 2022 and 2021, $ 40.6 million and $ 18.6 million aggregate principal amount of the 2022 Exchangeable Notes, respectively, were presented for exchange prior to maturity.

Of the total $ 59.2 million aggregate principal amount presented for exchange prior to maturity, $ 56.2 million and $ 3.0 million were settled during the years ended December 31, 2022 and 2021, respectively.

The remaining 2022 Exchangeable Notes outstanding immediately prior to maturity on October 1, 2022, totaling $ 44.3 million aggregate principal amount, were presented by holders for exchange on or before September 30, 2022 with settlement occurring entirely in cash in October 2022, in accordance with their terms.

In connection with the 2022 Exchangeable Notes presented for exchange during the years ended December 31, 2022 and 2021, we exercised 1.9 million and 0.4 million underlying shares of the related 2022 Exchangeable Notes Hedges, respectively, which were valued based on the volume-weighted average price of Match Group common stock over a 40-day measurement period.

During the years ended December 31, 2022 and 2021, the Company received $ 75.9 million and $ 6.6 million, respectively, in cash related to these hedge settlements.

During the year ended December 31, 2022, we paid $ 7.5 million to settle 0.4 million underlying shares of the 2022 Exchangeable Notes Warrants.

MATCH GROUP, INC.

6 unchanged sentences

Total 3,875,000

Current maturities of long-term debt 100,500

Unamortized original issue discount 4,366

10 unchanged sentences

On June 30, 2020, prior to the Separation, Former IAC retired all Former IAC common stock and Class B common stock then held in treasury.

There are no shares of common stock held in treasury at December 31, 2021 and 2020.

Common Stock Repurchases

In May 2022, our Board of Directors authorized the repurchase of 12.5 million shares of our common stock.

At December 31, 2022, we have approximately 5.3 million shares remaining in our share repurchase authorization.

During the year ended December 31, 2022, we repurchased 7.2 million shares of our common stock for aggregate consideration, on a trade date basis, of $ 482.0 million.

No repurchases were made during 2021 or 2020.

Preferred Stock

4 unchanged sentences

and (ii) 2.1584 shares of Match Group common stock, par value $ 0.001 per share.

Upon the consummation of the Separation, holders of Former IAC Class B common stock exchanged each share of Class B common stock for (i) one share of Series 2 Mandatorily Exchangeable Preferred Stock, which was immediately exchanged for one share of IAC Class B common stock and then retired;

and (ii) 2.1584 shares of Match Group common stock, par value $ 0.001 per share.

MATCH GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

immediately exchanged for one share of IAC Class B common stock and then retired;

and (ii) 2.1584 shares of Match Group common stock, par value $ 0.001 per share.

Issuance of Common Stock

4 unchanged sentences

See “Note 7—Long-term Debt, net” for additional information on the redemption of a portion of the 2022 Exchangeable Notes.

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9—ACCUMULATED OTHER COMPREHENSIVE LOSS

7 unchanged sentences

Year Ended December 31, 2021

Foreign Currency Translation Adjustment Accumulated Other Comprehensive Loss

(In thousands)

Balance at January 1 $ ( 81,454 ) $ ( 81,454 )

Other comprehensive loss ( 142,300 ) ( 142,300 )

Balance at December 31 $ ( 223,754 ) $ ( 223,754 )

Year Ended December 31, 2020

Foreign Currency Translation Adjustment Unrealized (Loss) Gain on Available-For-Sale Security Accumulated Other Comprehensive (Loss) Income

2 unchanged sentences

Other comprehensive income (loss) before reclassifications

40,655 ( 1 ) 40,654

Amounts reclassified into earnings ( 168 ) — ( 168 )

3 unchanged sentences

Balance at December 31 $ ( 81,454 ) $ — $ ( 81,454 )

Year Ended December 31, 2019

Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Available-For-Sale Security Accumulated Other Comprehensive (Loss) Income

(In thousands)

Balance at January 1 $ ( 128,726 ) $ 4 $ ( 128,722 )

Other comprehensive loss ( 7,938 ) ( 4 ) ( 7,942 )

Net period other comprehensive loss ( 7,938 ) ( 4 ) ( 7,942 )

Allocation of accumulated other comprehensive loss related to the noncontrolling interests 315 — 315

Balance at December 31 $ ( 136,349 ) $ — $ ( 136,349 )

At December 31, 2022, 2021, and 2020, there was no tax benefit or provision on the accumulated other comprehensive loss.

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10—EARNINGS PER SHARE

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— ( 222 ) — ( 993 ) — ( 9,999 )

Interest on dilutive Exchangeable

Notes, net of income tax (b)

Interest on dilutive Exchangeable Notes, net of income tax (b)

— 4,151 — 6,616 — 16,300

1 unchanged sentence

$ 364,157 $ 368,086 $ 277,214 $ 282,837 $ 528,080 $ 534,381

Earnings (loss) from discontinued operations, net of tax

(Loss) earnings from discontinued operations, net of tax

$ ( 2,211 ) $ ( 2,211 ) $ 509 $ 509 $ ( 366,070 ) $ ( 366,070 )

Net earnings (loss) attributable to noncontrolling interests of discontinued operations

Net loss attributable to noncontrolling interests of discontinued operations

— — — — 319 319

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— — — — — ( 240 )

Net earnings (loss) from discontinued operations attributable to shareholders

Net (loss) earnings from discontinued operations attributable to shareholders

( 2,211 ) ( 2,211 ) 509 509 ( 365,751 ) ( 365,991 )

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and for discontinued operations it was more dilutive for ANGI to settle certain ANGI equity awards.

For the year ended December 31, 2019, for continuing operations it was more dilutive for Former Match Group to settle certain Former Match Group equity awards;

and for discontinued operations, it was more dilutive for Former IAC to settle certain ANGI equity awards.

(b) The Company uses the if-converted method for calculating the dilutive impact of the outstanding Exchangeable Notes.

For the year ended December 31, 2021, the Company adjusted net earnings from continuing operations attributable to Match Group, Inc.

shareholders for the cash interest expense, net of income taxes, incurred on the 2022 and 2026 Exchangeable Notes and dilutive shares were included for the same set of notes at the Match Group exchange rates.

For the year ended December 31, 2021 the 2030 Exchangeable Notes were not more dilutive under the if-converted method and therefore the weighted average 6.8 million shares related to the 2030 Exchangeable Notes are excluded from dilutive securities.

For the years ended December 31, 2022 and 2021, the Company adjusted net earnings from continuing operations attributable to Match Group, Inc.

shareholders for the cash interest expense, net of income taxes, incurred on the 2022 and 2026 Exchangeable Notes and dilutive shares were included for the same set of notes.

For the years ended December 31, 2022 and 2021, the 2030 Exchangeable Notes were not more dilutive under the if-converted method and therefore the weighted average 6.8 million shares related to the 2030 Exchangeable Notes are excluded from dilutive securities for both years.

For the year ended December 31, 2020, the Company adjusted net earnings from continuing operations attributable to Match Group, Inc.

shareholders for the cash interest expense, net of income taxes, incurred on the 2022, 2026, and 2030 Exchangeable Notes and dilutive shares were included for the same set of notes at the Match Group exchange rates.

For the year ended December 31, 2019, the Company adjusted net earnings from continuing operations attributable to Match Group, Inc.

For the year ended December 31, 2019 the 2030 Exchangeable Notes were not more dilutive under the if-converted method and therefore the weighted average 2.5 million shares related to the 2030 Exchangeable Notes are excluded from dilutive securities.

(c) If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options, warrants, and subsidiary denominated equity and vesting of restricted stock units.

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two Former Match Group plans were assumed as part of the Separation (the 2015 and 2017 plans) and another plan was approved by shareholders on June 25, 2020 (the 2020 plan).

The 2015 and 2017 plans cover stock options to acquire shares of Match Group common stock, RSUs, and stock settled stock appreciation rights denominated in the equity of certain of our subsidiaries, in each case with respect to awards previously granted by Former Match Group prior to the Separation, as well as provide for the future grant of equity awards by the Company.

The 2015 and 2017 plans (i) cover stock options to acquire shares of Match Group common stock, restricted stock units (“RSUs”), PSUs, and stock settled stock appreciation rights denominated in the equity of certain of our subsidiaries, in each case with respect to awards granted by the Company as well as awards previously granted by Former Match Group prior to the Separation, and (ii) provide for the future grant of equity awards by the Company.

The 2015 and 2017 plans authorize the Company to grant awards to its employees, officers, directors and consultants.

1 unchanged sentence

The 2020 plan covers options previously granted by Former IAC that converted into Match Group options as a result of the Separation.

no additional grants can be made from this plan.

No additional grants can be made from the 2020 plan.

The 2015 and 2017 plans have a stated term of ten years and provide that the exercise price of stock options granted will not be less than the market price of the Company’s common stock on the grant date.

3 unchanged sentences

RSUs outstanding generally vest over a three - or four-year period.

Market-based awards outstanding generally vest over a two - to four-year period.

Stock-based compensation expense recognized in the consolidated statement of operations includes expense related to the Company’s stock options and RSUs, market-based RSUs and PSUs for which vesting is considered probable, and equity instruments denominated in shares of subsidiaries.

Market-based awards and PSUs outstanding generally vest over a two - to four-year period.

Stock-based compensation expense recognized in the consolidated statement of operations includes expense related to the Company’s stock options, RSUs, market-based awards, PSUs for which vesting is considered probable, and equity instruments denominated in shares of subsidiaries.

The amount of stock-based compensation expense recognized is net of estimated forfeitures, as the expense recorded is based on awards that are ultimately expected to vest.

3 unchanged sentences

The aggregate income tax benefit recognized related to the exercise of stock options for the years ended December 31, 2022, 2021, and 2020 is $ 53.5 million, $ 53.8 million, and $ 105.5 million, respectively.

As the Company is currently in a NOL position there will be some delay in the timing of the realization of cash benefit of income tax deductions related to stock-based compensation because it will be dependent upon the amount and timing of future taxable income and the timing of estimated income tax payments.

MATCH GROUP, INC.

9 unchanged sentences

Outstanding at January 1, 2022 4,468 $ 20.58

Converted sub-equity options 3 37.49

Increase due to acquisition 267 30.30

Exercised ( 729 ) 17.60

5 unchanged sentences

The aggregate intrinsic value in the table above represents the difference between Match Group’s closing stock price on the last trading day of 2022 and the exercise price, multiplied by the number of in-the-money options that would have been exercised had option holders exercised their options on December 31, 2022.

The total intrinsic value of stock options exercised during the year ended December 31, 2021 is $ 406.1 million.

The total intrinsic value of stock options exercised during the period from the Separation on July 1, 2020 to December 31, 2020 is $ 737.9 million.

The total intrinsic value of stock options exercised during the years ended December 31, 2022 and 2021 is $ 54.5 million and $ 406.1 million, respectively.

The following table summarizes the information about stock options outstanding and exercisable at December 31, 2022:

16 unchanged sentences

3,711 4.0 $ 21.13 3,679 3.9 $ 21.31

Cash received from Match Group stock option exercises for the years ended December 31, 2021 and 2020 was $ 58.4 million and $ 155.4 million, respectively.

No cash was received from stock option exercises for the year ended December 31, 2019.

Cash received from Match Group stock option exercises for the years ended December 31, 2022, 2021, and 2020 was $ 20.5 million, $ 58.4 million, and $ 155.4 million, respectively.

MATCH GROUP, INC.

2 unchanged sentences

Restricted Stock Units, Performance-Based Stock Units, and Market-Based Awards

RSUs, PSUs, and market-based awards are awards in the form of phantom shares or units denominated in a hypothetical equivalent number of shares of Match Group common stock and with the value of each RSU and PSU equal to the fair value of Match Group common stock at the date of grant.

RSUs, PSUs, and market-based awards are awards in the form of phantom shares or units denominated in a hypothetical equivalent number of shares of Match Group common stock, with the value of each RSU and PSU equal to the fair value of Match Group common stock at the date of grant.

For market-based awards, the grant date fair value was estimated using a lattice model that incorporates a Monte Carlo simulation of the valuation of a wholly-owned business.

1 unchanged sentence

PSUs also include performance-based vesting conditions where certain performance targets set at the time of grant must be achieved before an award vests.

The number of market-based awards that ultimately vest is based on a valuation of a wholly-owned business.

The number of market-based awards that ultimately vest is based on a valuation of a wholly-owned business or the Company’s market performance relative to certain other publicly-traded companies.

For RSU grants, the expense is measured at the grant date as the fair value of Match Group common stock and expensed as stock-based compensation over the vesting term.

10 unchanged sentences

Forfeited ( 717 ) 117.96 ( 189 ) 109.57 ( 72 ) 149.87

Expired — — — — ( 30 ) 20.84

Unvested at December 31, 2022 4,657 $ 101.69 152 $ 138.96 1,406 $ 145.32

3 unchanged sentences

The total fair value of RSUs that vested during the years ended December 31, 2022 and 2021 was $ 129.0 million and $ 67.5 million, respectively.

No PSUs vested during the years ended December 31, 2021 and 2020.

There were 0.8 million market-based awards granted during the year ended December 31, 2021.

The vesting of the awards granted in the current period are dependent upon the Company’s total shareholder return relative to the Nasdaq 100 Total Return Index over the performance period.

There were no market-based awards granted during the year ended December 31, 2020.

The total fair value of PSUs that vested during the year ended December 31, 2022 was $ 16.3 million.

No PSUs vested during the year ended December 31, 2021.

There were 0.8 million market-based awards granted during both the years ended December 31, 2022 and 2021.

The vesting of the awards granted in 2022 and 2021 are dependent upon the Company’s total shareholder return relative to the Nasdaq 100 Total Return Index over the various performance periods.

The total fair value of market-based awards that vested during the years ended December 31, 2022 and 2021 was $ 1.9 million and $ 11.1 million, respectively.

6 unchanged sentences

The fair value of the common stock of these subsidiaries is generally determined through a third-party valuation pursuant to the terms of the respective subsidiary equity plan.

These equity awards are settled on a net basis, with the award

These equity awards are settled on a net basis, with the award holder entitled to receive a payment in shares of Match Group common stock with a total value equal to the

MATCH GROUP, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

holder entitled to receive a payment in shares of Match Group common stock with a total value equal to the intrinsic value of the award at exercise.

intrinsic value of the award at exercise.

The number of shares of Match Group common stock ultimately needed to settle these awards may vary significantly from the estimated number below as a result of movements in our stock price and/or a determination of fair value of the relevant subsidiary that differs from our estimate.

6 unchanged sentences

2021 Global Employee Stock Purchase Plan (the "ESPP") was approved by the Company’s shareholders on June 15, 2021.

Under the ESPP, eligible employees may purchase the Company’s common stock at a 15 % discount of the stock price at the lower of the market price of our common stock on the date of commencement of the applicable offering period or on the last day of each six-month purchase period, subject to certain purchase limits.

Under the ESPP, employees purchased less than 0.1 million shares at an average price per share of $ 126.16 during the year ended December 31, 2021.

Under the ESPP, eligible employees may purchase the Company’s common stock at a 15 % discount of the lower of the market price of our common stock on the date of commencement of the applicable offering period or on the last day of the applicable six-month purchase period, subject to certain purchase limits.

Under the ESPP, employees purchased 0.1 million shares at a weighted average price per share of $ 55.67 during the year ended December 31, 2022.

At December 31, 2022, there were 2.5 million shares available for future issuance under the ESPP.

1 unchanged sentence

Capitalization of Stock-Based Compensation

For the years ended December 31, 2021 and 2020, $ 6.4 million and $ 5.1 million, respectively, of stock-based compensation was capitalized related to internal use software development.

No amounts were capitalized for the year ended December 31, 2019.

For the years ended December 31, 2022, 2021 and 2020, $ 10.6 million, $ 6.4 million, and $ 5.1 million, respectively, of stock-based compensation was capitalized related to the development of internal use software.

Modifications of awards

During the years ended December 31, 2021, 2020 and 2019, the Company modified certain equity awards and recognized modification charges in continuing operations of $ 10.2 million, $ 21.2 million and $ 7.1 million, respectively.

During the years ended December 31, 2022, 2021, and 2020, the Company modified certain equity awards and recognized modification charges in continuing operations of $ 14.6 million, $ 10.2 million, and $ 21.2 million, respectively, impacting fewer than 30 employees in any given year.

MATCH GROUP, INC.

14 unchanged sentences

United States $ 142,297 $ 133,513

South Korea 18,854 12,879

All other countries 14,985 16,864

Total $ 176,136 $ 163,256

The United States is the only country from which long-lived assets (excluding goodwill and intangible assets) is greater than 10 percent of total long-lived assets (excluding goodwill and intangible assets).

MATCH GROUP, INC.

3 unchanged sentences

The Company leases office space, data center facilities, and equipment used in connection with its operations under various operating leases, many of which contain escalation clauses.

Through June 2021, one of these lease agreements related to a property owned by IAC.

See “Note 15—Related Party Transactions” for additional information on the intercompany lease agreement.

ROU assets represent the Company’s right to use the underlying assets for the lease term and lease liabilities represent the present value of the Company’s obligation to make payments arising from leases.

27 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Maturities of lease liabilities as of December 31, 2021:

Maturities of lease liabilities as of December 31, 2022 (b) :

(In thousands)

5 unchanged sentences

Present value of lease liabilities $ 111,905

______________________

(b) Operating lease payments exclude $ 8.9 million of legally binding minimum lease payments for leases signed but not yet commenced.

The following are the weighted average assumptions used for lease term and discount rate:

9 unchanged sentences

The Company has funding commitments in the form of purchase obligations and surety bonds.

The purchase obligations due in less than one year are $ 56.0 million, the purchase obligations due between one and three years are $ 15.5 million, and purchase obligations due between three and five years are $ 23.5 million, for a total of $ 95.0 million in purchase obligations.

The purchase obligations primarily relate to web hosting services.

The purchase obligations due in less than one year are $ 83.4 million, the purchase obligations due between one and three years are $ 184.6 million, and no purchase obligations are due between three and five years, for a total of $ 268.0 million in purchase obligations.

The purchase obligations primarily relate to web hosting service commitments.

Letters of credit and surety bonds totaling $ 0.5 million are currently outstanding as of December 31, 2022.

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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 one 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 3—Income Taxes” for additional information related to income tax contingencies.

Pursuant to the Transaction Agreement, we have agreed to indemnify IAC for matters relating to any business of Former Match Group, including indemnifying IAC for costs related to the matters described below.

It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a

MATCH GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

material impact on the liquidity, results of operations, or financial condition of the Company.

See “Note 3—Income Taxes” for additional information related to income tax contingencies.

The official names of legal proceedings in the descriptions below (shown in italics) reflect the original names of the parties when the proceedings were filed as opposed to the current names of the parties following the separation of Match Group and IAC.

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Trial commenced on November 8, 2021.

On December 1, 2021, the parties entered into a Binding Global Settlement Agreement Term Sheet, pursuant to which we will pay $ 441 million in 2022 to settle all claims in trial and in arbitration.

In accordance with the parties’ agreement in December 2021, we paid $ 441 million to settle all claims in trial and in arbitration in June 2022.

FTC Lawsuit Against Former Match Group

On September 25, 2019, the FTC filed a lawsuit in federal district court in Texas against Former Match Group.

On September 25, 2019, the United States Federal Trade Commission (the “FTC”) filed a lawsuit in federal district court in Texas against Former Match Group.

Match Group, Inc.

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The complaint seeks among other things permanent injunctive relief, civil penalties, restitution, disgorgement, and costs of suit.

On October 9, 2020, the court granted the Company’s motion to stay the case until the United States Supreme Court issues a decision in the consolidated appeal of Federal Trade Commission v.

Credit Bureau Center, LLC and AMG Capital Management, LLC v.

On March 24, 2022, the court granted our motion to dismiss with prejudice on Claims I and II of the complaint relating to communication notifications and granted our motion to dismiss with respect to all requests for monetary damages on Claims III and IV relating to the guarantee offer and chargeback policy.

On July 19, 2022, the FTC filed an amended complaint adding Match Group, LLC as a defendant.

We believe that the FTC’s claims regarding Match.com’s practices, policies, and procedures are without merit and will defend vigorously against them.

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a tax matters agreement;

a transition services agreement;

and an employee matters agreement.

The IPO Agreements that were not superseded were terminated at closing of the Separation.

In addition to the agreements entered into at the time of the Separation, Match Group leases office space to IAC in a building owned by the Company in Los Angeles.

Match Group also leased office space from IAC in New York City through June 2021.

For the year ended December 31, 2021, the Company received less than

MATCH GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

$ 0.1 million from IAC pursuant to the Los Angeles lease and the Company paid $ 0.3 million to IAC pursuant to the New York City lease.

Match Group has a receivable balance of $ 0.2 million due from IAC at December 31, 2021, excluding items discussed in the “Tax Matters Agreement” section below.

transition services agreement;

and an employee matters agreement.

The IPO Agreements that were not superseded were terminated at closing of the Separation.

In addition to the agreements entered into at the time of the Separation, Match Group leased office space to IAC in a building owned by the Company in Los Angeles through November 2022.

For the year ended December 31, 2022, the Company received $ 0.1 million from IAC pursuant to the Los Angeles lease.

Match Group has a payable balance of less than $ 0.1 million due to IAC at December 31, 2022, excluding items discussed in the “Tax Matters Agreement” section below.

In July 2020, in connection with the Separation, the sale of 17.3 million newly issued shares of Match Group common stock was completed by IAC.

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Transition Services Agreement

Pursuant to the transition services agreement, IAC continues to provide minimal services to Match Group that Former IAC had historically provided to Former Match Group.

Match Group also provides certain services to IAC that Former Match Group previously provided to Former IAC.

The transition services agreement also provides that Match Group and IAC will make efforts to replace, amend, or divide certain joint contracts with third-parties relating to services or products used by both Match Group and IAC.

Pursuant to the transition services agreement, Match Group provides certain services to IAC that Former Match Group previously provided to Former IAC.

Match Group and IAC also agreed to continue sharing certain services provided pursuant to certain third-party vendor contracts that were not replaced, amended, or divided prior to closing of the Separation.

For the year ended December 31, 2021, the Company paid IAC less than $ 0.1 million related to services provided by IAC under the transition services agreement.

Additionally, the Company received $ 7.6 million from IAC for services provided under the transition services agreement.

For the year ended December 31, 2022, the Company received $ 20.6 million from IAC for services provided under the transition services agreement.

Employee Matters Agreement

Pursuant to the amended and restated employee matters agreement, Match Group will reimburse IAC for the cost of any IAC equity awards held by the Company’s employees and former employees upon exercise or vesting.

In addition, Match Group employees continued to participate in IAC’s U.S.

health and welfare plans, 401(k) plan and flexible benefits plan through December 31, 2020 and Match Group reimbursed IAC for the costs of such participation pursuant to the amended and restated employee matters agreement.

Match Group established its own employee benefit plans effective January 1, 2021.

For the year ended December 31, 2022, the Company paid IAC $ 0.1 million for the cost of IAC equity awards held by the Company’s employees upon vesting.

At December 31, 2022, the Company has accrued $ 0.3 million as the estimated cost due to IAC for IAC equity awards held by Match Group employees.

MATCH GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2021, the Company paid IAC $ 0.1 million for the cost of IAC equity awards held by the Company’s employees upon vesting.

At December 31, 2020, the Company has accrued $ 1.3 million as the estimated cost due to IAC for IAC equity awards held by Match Group employees.

Other Agreements

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and (iii) any untrue or misleading statement or alleged untrue or misleading statement of a material fact or omission, with respect to information contained in or incorporated into the Form S-4 Registration Statement (the “Form S-4”) filed with the Securities and Exchange Commission (the “SEC”) by IAC and Former IAC in connection with the Separation or the joint proxy statement/prospectus filed by Former IAC and Former Match Group with the SEC pursuant to the Form S-4.

At December 31, 2022, IAC is no longer considered a related party.

NOTE 16—BENEFIT PLANS

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The employer match under the IAC plan was 100 % of the first 10 % of a participant’s eligible earnings.

Prior to July 2019, the employer match under the IAC Plan was fifty cents for each dollar a participant contributed in the Plan, with a maximum contribution of 3 % of a participant’s eligible earnings.

Matching contributions under the plans for the years ended December 31, 2022, 2021, and 2020 were $ 13.5 million, $ 10.9 million and $ 8.6 million, respectively.

The increase in matching contributions from 2019 to 2020 is primarily due to the aforementioned change of the Company’s matching contribution in the second half of 2019.

The increase in matching contributions is primarily due to increased headcount.

Matching contributions are invested in the same manner that each participant’s voluntary contributions are invested under the respective plans.

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(In thousands)

Other (expense) income, net $ ( 465,038 ) $ 15,861 $ ( 2,026 )

Other expense, net, in 2021 includes a $ 441.0 million loss related to the former Tinder employee litigation settlement, a $ 14.6 million loss related to the changes in fair value of an embedded derivative arising from the repurchase of a portion of the 2022 Exchangeable Notes, a $ 5.2 million inducement expense arising from the repurchased 2022 Exchangeable Notes, and $ 1.8 million in net foreign currency losses, partially offset by $ 2.4 million of gains on the net settlement of the note hedges and warrants.

Other income (expense), net $ 8,033 $ ( 465,038 ) $ 15,861

Other income, net, in 2022 includes interest income of $ 4.4 million, gains of $ 3.5 million related to finalization of a legal settlement, and gains of $ 2.7 million related to mark-to-market adjustments pertaining to liability classified equity instruments;

partially offset by $ 2.0 million in net foreign currency losses.

MATCH GROUP, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

repurchased 2022 Exchangeable Notes, and $ 1.8 million in net foreign currency losses;

partially offset by $ 2.4 million of gains on the net settlement of the note hedges and warrants.

Other income, net in 2020 includes a legal settlement of $ 35.0 million and interest income of $ 2.7 million, partially offset by a loss on redemption of bonds of $ 16.5 million, expense of $ 3.4 million related to a mark-to-market adjustment pertaining to a liability classified equity instrument, and $ 0.6 million in net foreign currency losses.

Other expense, net, in 2019 includes a $ 4.0 million impairment of an equity investment, expense of $ 1.7 million related to a mark-to-market adjustment pertaining to a liability classified equity instrument, and $ 0.9 million in net foreign currency losses, partially offset by interest income of $ 4.4 million.

Cash and Cash Equivalents and Restricted Cash

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Noncash issuance of common stock for the acquisition of Hyperconnect $ — $ 890,851 $ —

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 18—QUARTERLY RESULTS (UNAUDITED)

Quarter Ended

March 31 Quarter Ended

June 30 Quarter Ended

Quarter Ended

(In thousands, except per share data)

Year Ended December 31, 2021

Revenue $ 667,612 $ 707,760 $ 801,835 $ 806,070

Cost of revenue 179,455 193,099 232,211 234,543

Operating income 189,258 209,914 220,590 231,917

Earnings (loss) from continuing operations (b)

173,848 140,020 130,901 ( 168,724 )

Earnings from discontinued operations — 509 — —

Net earnings (loss) attributable to Match Group, Inc.

shareholders (d)

174,250 140,895 131,210 ( 168,632 )

Per share information from continuing operations attributable to the Match Group, Inc.

shareholders:

$ 0.65 $ 0.52 $ 0.47 $ ( 0.60 )

$ 0.57 $ 0.46 $ 0.43 $ ( 0.60 )

Per share information attributable to the Match Group, Inc.

shareholders:

$ 0.65 $ 0.52 $ 0.47 $ ( 0.60 )

$ 0.57 $ 0.46 $ 0.43 $ ( 0.60 )

Year Ended December 31, 2020

Revenue $ 544,642 $ 555,450 $ 639,770 $ 651,407

Cost of revenue 143,894 148,853 169,823 173,263

Operating income 137,372 195,594 200,167 212,582

Earnings from continuing operations (d)

157,534 141,397 140,113 148,635

(Loss) earnings from discontinued operations (c)

( 331,967 ) ( 34,611 ) 508 —

Net (loss) earnings attributable to Match Group, Inc.

shareholders (c)(d)

( 202,830 ) 74,917 141,207 149,035

Per share information from continuing operations attributable to the Match Group, Inc.

shareholders:

$ 0.69 $ 0.61 $ 0.54 $ 0.56

Diluted (a)(d)

$ 0.61 $ 0.54 $ 0.47 $ 0.50

Per share information attributable to the Match Group, Inc.

shareholders:

$ ( 1.11 ) $ 0.41 $ 0.54 $ 0.56

Diluted (a)(c)

$ ( 1.00 ) $ 0.36 $ 0.47 $ 0.50

______________________

(a) Quarterly per share amounts may not add to the related annual per share amount because of differences in the average common shares outstanding during each period.

(b) Loss from continuing operations for the fourth quarter ended December 31, 2021 includes $ 441 million related to the former Tinder employee litigation settlement.

(c) The operations of Former IAC business other than Match Group are presented as discontinued operations as part of the Separation described in “Note 1—Organization.”

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(d) The Company early adopted ASU No.

2020-06 as of January 1, 2021 on a fully retrospective basis.

The impact of adopting ASU No.

2020-06 on the quarter ended December 31, 2020 is as follows:

Quarter Ended December 31, 2020

Prior to the adoption of ASU No.

2020-06 After adoption of ASU No.

2020-06 Effect of adoption of ASU No.

(In thousands, except per share data)

Statement of operations impacts

Interest expense $ 43,306 $ 31,970 $ ( 11,336 )

Income tax provision $ ( 25,617 ) $ ( 28,497 ) $ ( 2,880 )

Net earnings from continuing operations $ 140,179 $ 148,635 $ 8,456

Net earnings per share from continuing operations:

Basic $ 0.53 $ 0.56 $ 0.03

Diluted $ 0.48 $ 0.50 $ 0.02

Weighted average dilutive shares outstanding

294,975 307,582 12,607

MATCH GROUP, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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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 7A. Quantitative and Qualitative Disclosures About Market Risk