What changed in this filing

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Item 1. Financial Statements

2022-11-04 compared with 2022-08-01 · 197 added, 144 removed, 727 unchanged (32% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

18 unchanged sentences

(Loss) income before income taxes ( 22,773 ) ( 4,407 ) ( 43,588 ) 24,251

Income tax benefit 2,337 9,092 1,954 454

Income tax (expense) benefit ( 135,910 ) 1 ( 133,956 ) 455

Net (loss) income from continuing operations ( 158,683 ) ( 4,406 ) ( 177,544 ) 24,706

17 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2022 December 31,

12 unchanged sentences

Deferred income tax assets — 87,581

Equity investment 174,580 158,140

Equity investments 174,580 158,140

Other non-current assets 6,308 6,942

30 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the Nine Months Ended September 30, 2022

Common Stock Treasury Stock

5 unchanged sentences

Balance as of December 31, 2021 $ 447,992 16,071 $ 161 $ 1,242,794 $ ( 571,794 ) 2,976 $ ( 223,169 )

Net income and comprehensive income ( 10,826 ) — — — ( 10,826 ) — —

Net loss and comprehensive loss ( 10,826 ) — — — ( 10,826 ) — —

Non-cash compensation 15,080 — — 15,080 — — —

6 unchanged sentences

Issuance of common stock for stock options, employee stock purchase plan, restricted stock awards and restricted stock units, net of withholding taxes 341 21 — 341 — — —

Other — — — — — — —

Balance as of June 30, 2022 $ 350,486 16,141 $ 161 $ 1,162,714 $ ( 546,211 ) 3,355 $ ( 266,178 )

Net loss and comprehensive loss ( 158,684 ) — — — ( 158,684 ) — —

Non-cash compensation 15,575 — — 15,575 — — —

Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes and cancellations ( 880 ) ( 1 ) — ( 880 ) — — —

Balance as of September 30, 2022 $ 206,497 16,140 $ 161 $ 1,177,409 $ ( 704,895 ) 3,355 $ ( 266,178 )

LENDINGTREE, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the Nine Months Ended September 30, 2021

Common Stock Treasury Stock

14 unchanged sentences

Balance as of June 30, 2021 $ 420,368 15,956 $ 160 $ 1,218,628 $ ( 615,259 ) 2,641 $ ( 183,161 )

Net loss and comprehensive loss ( 4,460 ) — — — ( 4,460 ) — —

Non-cash compensation 17,074 — — 17,074 — — —

Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes ( 1,894 ) 13 — ( 1,894 ) — — —

Other ( 6 ) — — ( 6 ) — — —

Balance as of September 30, 2021 $ 431,082 15,969 $ 160 $ 1,233,802 $ ( 619,719 ) 2,641 $ ( 183,161 )

The accompanying notes to consolidated financial statements are an integral part of these statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

13 unchanged sentences

Amortization of debt issuance costs 5,443 3,756

Write-off of previously-capitalized debt issuance costs — 1,066

Amortization of debt discount 1,475 22,297

9 unchanged sentences

Capital expenditures ( 8,970 ) ( 30,515 )

Equity investment ( 16,440 ) ( 1,180 )

Equity investments ( 16,440 ) ( 1,180 )

Net cash used in investing activities attributable to continuing operations ( 25,410 ) ( 31,695 )

1 unchanged sentence

Proceeds from term loan 250,000 —

Repayment of term loan ( 625 ) —

Repayment of 0.625 % Convertible Senior Notes

3 unchanged sentences

Payment of debt issuance costs ( 4 ) ( 5,995 )

Payment of original issue discount on undrawn term loan — ( 2,500 )

Other financing activities — ( 31 )

30 unchanged sentences

Basis of Presentation

The accompanying unaudited interim consolidated financial statements as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S.

The accompanying unaudited interim consolidated financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

In the opinion of management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company's financial position for the periods presented.

The results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or any other period.

The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or any other period.

The accompanying consolidated balance sheet as of December 31, 2021 was derived from audited financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”).

4 unchanged sentences

Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with GAAP.

These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements.

They also impact the reported amount of net earnings during any period.

Actual results could differ from those estimates.

These estimates and assumptions impact the reported amount of assets and liabilities and

LENDINGTREE, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

disclosures of contingent assets and liabilities as of the date of the consolidated financial statements.

They also impact the reported amount of net earnings during any period.

Actual results could differ from those estimates.

Significant estimates underlying the accompanying consolidated financial statements, including discontinued operations, include:

13 unchanged sentences

LendingTree's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud.

Financial instruments, which potentially subject the Company to concentration of credit risk at June 30, 2022, consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet.

Financial instruments, which potentially subject the Company to concentration of credit risk at September 30, 2022, consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet.

Cash and cash equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial institutions of high credit.

15 unchanged sentences

An entity may adopt the amendments through either a modified retrospective method of transition or a fully retrospective method of transition.

The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective transition approach and recognized the cumulative effect of initially applying ASU 2020-06 as a $ 44.4 million adjustment to the opening balance of accumulated deficit, comprised of $ 60.8 million for the interest adjustment, net of $ 16.4 million for the related tax impacts.

The recombination of the equity conversion component of our convertible debt remaining outstanding caused a reduction in

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

additional paid-in capital and an increase in deferred income tax assets.

The recombination of the equity conversion component of our convertible debt remaining outstanding caused a reduction in additional paid-in capital and an increase in deferred income tax assets.

The removal of the remaining debt discounts recorded for this previous separation had the effect of increasing our net debt balance.

17 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

10 unchanged sentences

The Company's services are generally transferred to the customer at a point in time.

Revenue from Home products is primarily generated from upfront match fees paid by mortgage Network Partners that receive a loan request, and in some cases upfront fees for clicks or call transfers.

Match fees and upfront fees for clicks and call transfers are earned through the delivery of loan requests that originated through the Company's websites or affiliates.

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Company recognizes revenue at the time a loan request is delivered to the customer, provided that no significant obligations remain.

Revenue from Home products is primarily generated from upfront match fees paid by mortgage Network Partners that receive a loan request, and in some cases upfront fees for clicks or call transfers.

Match fees and upfront fees for clicks and call transfers are earned through the delivery of loan requests that originated through the Company's websites or affiliates.

The Company recognizes revenue at the time a loan request is delivered to the customer, provided that no significant obligations remain.

The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a loan request to the customer.

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The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a consumer request to the customer.

The contract asset recorded within prepaid and other current assets on the consolidated balance sheets related to estimated variable consideration was $ 11.7 million and $ 9.1 million at June 30, 2022 and December 31, 2021, respectively.

The contract liability recorded within accrued expenses and other current liabilities on the consolidated balance sheets related to upfront fees paid by consumers was $ 0.9 million and $ 0.8 million at June 30, 2022 and December 31, 2021, respectively.

During the second quarter and first six months of 2022, the Company recognized revenue of $ 0.1 million and $ 0.8 million, respectively, that was included in the contract liability balance at December 31, 2021.

During the second quarter and first six months of 2021, the Company recognized revenue of $ 0.1 million and $ 0.7 million, respectively, that was included in the contract liability balance at December 31, 2020.

The contract asset recorded within prepaid and other current assets on the consolidated balance sheets related to estimated variable consideration was $ 12.2 million and $ 9.1 million at September 30, 2022 and December 31, 2021, respectively.

During the first nine months of 2022, the Company recognized revenue of $ 0.8 million that was included in the contract liability balance at December 31, 2021.

During the first nine months of 2021, the Company recognized revenue of $ 0.7 million that was included in the contract liability balance at December 31, 2020.

Revenue recognized in any reporting period includes estimated variable consideration for which the Company has satisfied the related performance obligations but are still pending the occurrence or non-occurrence of a future event outside the Company's control (such as lenders providing loans to consumers or credit card approvals of consumers) before the Company has a contractual right to payment.

The Company recognized increases to such revenue from prior periods.

This increase was no t material in the second quarter of 2022, and was $ 0.1 million in the second quarter of 2021.

This increase was $ 0.1 million in the third quarter of 2022, and was $ 0.4 million in the third quarter of 2021.

NOTE 4— CASH AND RESTRICTED CASH

Total cash, cash equivalents, restricted cash and restricted cash equivalents consist of the following (in thousands) :

September 30,

2022 December 31,

2 unchanged sentences

Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 285,665 $ 251,342

NOTE 5— ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts.

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5— ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts.

The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time accounts receivable are past due, previous loss history, current and expected economic conditions and the specific customer's current and expected ability to pay its obligation.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

The balance of goodwill, net and intangible assets, net is as follows (in thousands) :

September 30,

2022 December 31,

6 unchanged sentences

Goodwill and Indefinite-Lived Intangible Assets

The Company's goodwill at each of June 30, 2022 and December 31, 2021 consists of $ 59.3 million associated with the Home segment, $ 166.1 million associated with the Consumer segment, and $ 194.7 million associated with the Insurance segment.

The Company's goodwill at each of September 30, 2022 and December 31, 2021 consists of $ 59.3 million associated with the Home segment, $ 166.1 million associated with the Consumer segment, and $ 194.7 million associated with the Insurance segment.

At June 30, 2022, the Company assessed the qualitative factors in its impairment testing of goodwill and determined that the effects of the challenging interest rate environment, consumer price inflation, and the decline in the Company's market capitalization required a quantitative impairment test be performed.

14 unchanged sentences

Trademarks and tradenames 10,700 ( 8,497 ) 2,203

Balance at June 30, 2022 $ 172,500 $ ( 111,870 ) $ 60,630

Balance at September 30, 2022 $ 162,900 $ ( 108,853 ) $ 54,047

Cost Accumulated

5 unchanged sentences

Balance at December 31, 2021 $ 202,800 $ ( 127,179 ) $ 75,621

Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of June 30, 2022, future amortization is estimated to be as follows (in thousands) :

Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of September 30, 2022, future amortization is estimated to be as follows (in thousands) :

Amortization Expense

6 unchanged sentences

Total intangible assets with definite lives, net $ 54,047

NOTE 7— EQUITY INVESTMENT

NOTE 7— EQUITY INVESTMENTS

In January 2022, the Company acquired an equity interest in EarnUp Inc.

3 unchanged sentences

(“Stash”) for $ 80.0 million.

On January 6, 2021, the Company acquired additional equity interest for $ 1.2 million.

On January 6, 2021, the Company acquired an additional equity interest for $ 1.2 million.

On October 18, 2021, the Company entered into a stock transfer agreement with third parties to sell a portion of its Stash equity securities for $ 46.3 million.

5 unchanged sentences

The equity securities will be carried at cost less impairment, if any, and subsequently measured to fair value upon observable price changes in an orderly transaction for the identical or similar investments with any gains or losses recorded to the consolidated statement of operations and comprehensive income.

In 2021, the Company recorded a net unrealized gain on the investment in Stash of $ 95.4 million as a result of an adjustment to the fair value of the Stash equity securities based on observable price changes, which is included within other income on the consolidated statement of operations and comprehensive income.

In 2021, the Company recorded a net unrealized gain on the investment in Stash of $ 95.4 million as a result of an adjustment to the fair

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of June 30, 2022, there have been no impairments to the acquisition cost of the equity securities.

value of the Stash equity securities based on observable price changes, which is included within other income on the consolidated statement of operations and comprehensive income.

As of September 30, 2022, there have been no impairments to the acquisition cost of the equity securities.

NOTE 8— ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands) :

September 30,

2022 December 31,

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

Weighted average diluted common shares 12,758 13,268 12,794 13,797

For the second quarter and first six months of 2022, the Company had losses from continuing operations and, as a result, no potentially dilutive securities were included in the denominator for computing diluted loss per share, because the impact would have been anti-dilutive.

For the third quarter and first nine months of 2022, the Company had losses from continuing operations and, as a result, no potentially dilutive securities were included in the denominator for computing diluted loss per share, because the impact would have been anti-dilutive.

Accordingly, the weighted average basic shares outstanding was used to compute loss per share.

Approximately 0.2 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the second quarter and first six months of 2022 because their inclusion would have been anti-dilutive.

For the second quarter of 2022, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.0 million shares of common stock and 0.5 million restricted stock units.

For the first six months of 2022, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.0 million shares of common stock and 0.4 million restricted stock units.

For the second quarter of 2021, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 0.9 million shares of common stock and 0.2 million restricted stock units.

For the first six months of 2021, the weighted average shares that were anti-dilutive included options to purchase 0.4 million shares of common stock.

Approximately 0.1 million and 0.2 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the third quarter and first nine months of 2022 respectively, because their inclusion would have been anti-dilutive.

Approximately 0.4 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the third quarter of 2021.

For the third quarter of 2022, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.0 million shares of common stock and 0.5 million restricted stock units.

For the first nine months of 2022, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 1.0 million shares of common stock and 0.4 million restricted stock units.

For the third quarter of 2021, the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 0.9 million shares of common stock and 0.2 million restricted stock units.

For the first nine months of 2021, the weighted average shares that were anti-dilutive included options to purchase 0.4 million shares of common stock and 0.1 million restricted stock units.

The convertible notes and the warrants issued by the Company could be converted into the Company’s common stock, subject to certain contingencies.

2 unchanged sentences

Following the adoption, the if-converted method is used for diluted net income per share calculation of our convertible notes.

Prior to the adoption of ASU 2020-06 the dilutive impact of the convertible notes was calculated using the treasury stock method.

See Note 2—Significant Accounting Policies for additional information.

Approximately 2.1 million shares related to the potentially dilutive shares of the Company's common stock associated with the 0.50 % Convertible Senior Notes due July 15, 2025 and the 0.625 % Convertible Senior Notes due June 1, 2022 were

Prior to the adoption of ASU 2020-06 the dilutive impact of the

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

excluded from the calculation of diluted loss per share for the second quarter and first six months of 2022 because their inclusion would have been anti-dilutive.

Shares of the Company's stock associated with the warrants issued by the Company in 2017 and 2020 were excluded from the calculation of diluted loss per share for the second quarter and first six months of 2022 and 2021 as they were anti-dilutive since the strike price of the warrants was greater than the average market price of the Company's common stock during the relevant periods.

Shares of the Company's common stock associated with the 0.50 % Convertible Senior Notes due July 15, 2025 were excluded from the calculation of diluted income per share for the second quarter and first six months of 2021 as they were anti-dilutive since the conversion price of the notes was greater than the average market price of the Company's common stock during the relevant periods.

convertible notes was calculated using the treasury stock method.

See Note 2—Significant Accounting Policies for additional information.

Approximately 1.2 million shares and 2.1 million shares related to the potentially dilutive shares of the Company's common stock associated with the 0.50 % Convertible Senior Notes due July 15, 2025 and the 0.625 % Convertible Senior Notes due June 1, 2022 were excluded from the calculation of diluted loss per share for the third quarter and first nine months of 2022, respectively, because their inclusion would have been anti-dilutive.

Shares of the Company's stock associated with the warrants issued by the Company in 2017 and 2020 were excluded from the calculation of diluted loss per share for the third quarter and first nine months of 2022 and 2021 as they were anti-dilutive since the strike price of the warrants was greater than the average market price of the Company's common stock during the relevant periods.

Shares of the Company's common stock associated with the 0.50 % Convertible Senior Notes due July 15, 2025 were excluded from the calculation of diluted income per share for the third quarter and first nine months of 2021 and shares of the Company's common stock associated with the 0.625 % Convertible Senior Notes due June 1, 2022 were excluded in the third quarter of 2021 as they were anti-dilutive since the conversion price of the notes was greater than the average market price of the Company's common stock during the relevant periods.

The employee stock purchase plan did not have a material impact to the calculation of diluted shares.

1 unchanged sentence

In each of February 2018 and February 2019, the board of directors authorized and the Company announced the repurchase of up to $ 100.0 million and $ 150.0 million, respectively, of LendingTree's common stock.

During the six months ended June 30, 2022, the Company purchased 379,895 shares of its common stock pursuant to this stock repurchase program.

At June 30, 2022, approximately $ 96.7 million of the previous authorizations to repurchase common stock remain available.

During the nine months ended September 30, 2022, the Company purchased 379,895 shares of its common stock pursuant to this stock repurchase program.

At September 30, 2022, approximately $ 96.7 million of the previous authorizations to repurchase common stock remain available.

NOTE 10— STOCK-BASED COMPENSATION

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

Total non-cash compensation $ 15,575 $ 17,074 $ 47,990 $ 51,804

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock Options

9 unchanged sentences

Expired ( 6,475 ) 256.11

Options outstanding at June 30, 2022 819,397 156.14 5.73 $ 4,612

Options exercisable at June 30, 2022 494,026 $ 127.28 3.62 $ 4,612

(a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $ 43.82 on the last trading day of the quarter ended June 30, 2022 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

option holder exercised these options on June 30, 2022.

Options outstanding at September 30, 2022 807,361 155.20 5.47 $ 3

Options exercisable at September 30, 2022 489,581 $ 126.08 3.39 $ 3

(a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $ 23.86 on the last trading day of the quarter ended September 30, 2022 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on September 30, 2022.

The intrinsic value changes based on the market value of the Company's common stock.

(b) During the six months ended June 30, 2022, the Company granted stock options to certain employees with a weighted average grant date fair value per share of $ 53.75 , calculated using the Black-Scholes option pricing model, which vesting periods include (1) immediate vesting on grant date (b) earlier of one year from grant date and the Company's annual meeting of stockholders for 2023 and (c) three years from grant date.

(b) During the nine months ended September 30, 2022, the Company granted stock options to certain employees with a weighted average grant date fair value per share of $ 53.21 , calculated using the Black-Scholes option pricing model, which vesting periods include (1) immediate vesting on grant date (b) earlier of one year from grant date and the Company's annual meeting of stockholders for 2023 and (c) three years from grant date.

For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions.

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Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock Options with Market Conditions

5 unchanged sentences

Options outstanding at January 1, 2022 700,209 $ 236.01

Granted 47,639 195.10

Exercised — —

1 unchanged sentence

Expired ( 13,163 ) 378.95

Options outstanding at June 30, 2022 687,046 233.27 6.26 $ —

Options exercisable at June 30, 2022 — $ — 0.00 $ —

Options outstanding at September 30, 2022 734,685 230.79 5.94 $ —

Options exercisable at September 30, 2022 481,669 $ 195.10 4.85 $ —

The intrinsic value changes based on the market value of the Company's common stock.

A maximum of 1,147,367 shares may be earned for achieving superior performance up to 167 % of the target number of shares.

As of June 30, 2022, performance-based nonqualified stock options with a market condition of 481,669 had been earned, which have a vest date of September 30, 2022.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of September 30, 2022, a maximum of 422,537 shares may be earned for achieving superior performance up to 167 % of the remaining unvested target number of shares.

As of September 30, 2022, no additional performance-based nonqualified stock options with a market condition had been earned.

Restricted Stock Units

5 unchanged sentences

Forfeited ( 79,112 ) 167.83

Nonvested at June 30, 2022 536,536 $ 143.02

Nonvested at September 30, 2022 505,955 $ 131.60

Restricted Stock Units with Performance Conditions

5 unchanged sentences

Forfeited — —

Nonvested at June 30, 2022 16,000 $ 83.25

Nonvested at September 30, 2022 16,000 $ 83.25

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A maximum of 24,000 shares may be earned for achieving superior performance up to 150 % of the target number of shares.

4 unchanged sentences

Nonvested at January 1, 2022 26,674 $ 340.25

Granted 2,927 340.25

Vested ( 29,601 ) 340.25

Forfeited — —

Nonvested at June 30, 2022 26,674 $ 340.25

A maximum of 44,545 shares may be earned for achieving superior performance up to 167 % of the target number of shares.

As of June 30, 2022, performance-based restricted stock awards with a market condition of 29,601 had been earned, which have a vest date of September 30, 2022.

Nonvested at September 30, 2022 — $ —

Employee Stock Purchase Plan

In 2021, the Company implemented an employee stock purchase plan (“ESPP”), under which a total of 262,731 shares of the Company's common stock were reserved for issuance.

As of June 30, 2022, 243,929 shares of common stock were available for issuance under the ESPP.

As of September 30, 2022, 243,929 shares of common stock were available for issuance under the ESPP.

The ESPP is a tax-qualified plan under Section 423 of the Internal Revenue Code.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

terms of the ESPP, eligible employees are granted options to purchase shares of the Company's common stock at 85 % of the lesser of (1) the fair market value at time of grant or (2) the fair market value at time of exercise.

Under the terms of the ESPP, eligible employees are granted options to purchase shares of the Company's common stock at 85 % of the lesser of (1) the fair market value at time of grant or (2) the fair market value at time of exercise.

The offering periods and purchase periods are typically six-month periods ending on June 30 and December 31 of each year.

During the six months ended June 30, 2022, 13,259 shares were issued under the ESPP.

During the six months ended June 30, 2022, the Company granted employee stock purchase rights to certain employees with a grant date fair value per share of $ 35.43 , calculated using the Black-Scholes option pricing model.

During the nine months ended September 30, 2022, 13,259 shares were issued under the ESPP.

During the nine months ended September 30, 2022, the Company granted employee stock purchase rights to certain employees with a grant date fair value per share of $ 20.96 , calculated using the Black-Scholes option pricing model.

For purposes of determining stock-based compensation expense, the grant date fair value per share estimated using the Black-Scholes option pricing model required the use of the following key assumptions:

3 unchanged sentences

Risk-free interest rate (4)

0.19 - 2.51 %

(1) The expected term was calculated using the time period between the grant date and the purchase date.

4 unchanged sentences

Treasury yields for notes with comparable expected terms as the employee stock purchase rights, in effect at the grant date.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11— INCOME TAXES

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(in thousands, except percentages)

Income tax benefit $ 2,337 $ 9,092 $ 1,954 $ 454

Income tax (expense) benefit $ ( 135,910 ) $ 1 $ ( 133,956 ) $ 455

Effective tax rate ( 596.8 ) % — % ( 307.3 ) % ( 1.9 ) %

For the second quarter and first six months of 2022, the effective tax rate varied from the federal statutory rate of 21 % primarily due to excess tax expense of $ 0.4 million and $ 2.9 million, respectively, resulting from vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes.

For the second quarter and first six months of 2021, the effective tax rate varied from the federal statutory rate of 21 % in part due to a tax benefit of $ 8.3 million recognized for excess tax benefits resulting from employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes.

For the third quarter and first nine months of 2022, the effective tax rate varied from the federal statutory rate of 21 % primarily due to expense of $ 139.7 million to record a full valuation allowance against our net deferred tax assets, excess tax expense of $ 1.8 million and $ 4.7 million, respectively, resulting from vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes.

For the third quarter and first nine months of 2021, the effective tax rate varied from the federal statutory rate of 21 % in part due to an excess tax expense of $ 0.9 million and an excess tax benefit of $ 7.4 million, respectively, resulting from employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes.

During the third quarter of 2022, the Company recorded tax expense of $ 139.7 million to establish a full valuation allowance against its net deferred tax assets due to historical cumulative pre-tax losses and continued pre-tax losses in the quarter.

Management regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences, and tax planning strategies.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

In determining the amount of the valuation allowance, the Company considered the scheduled reversal of deferred tax liabilities.

The Company will maintain a full valuation allowance on net deferred tax assets until there is sufficient evidence to support the reversal of some or all of the allowance.

Should there be a change in the valuation allowance in the future, the income tax provision would increase or decrease in the period in which the allowance is changed.

The indefinite carryforward period for certain deferred tax assets means that indefinite-lived deferred tax liabilities can be considered as support for realization of such deferred tax assets including post December 31, 2017 net operating loss carryovers, which can affect the need to record or maintain a valuation allowance for deferred tax assets.

At September 30, 2022 the Company maintains a valuation allowance of $ 146 million against its net deferred tax assets.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(in thousands)

Income tax benefit (expense) - excluding excess tax benefit on stock compensation $ 2,775 $ 831 $ 4,860 $ ( 7,839 )

Income tax benefit (expense) - excluding excess tax expense from valuation allowance and excess tax (expense) benefit on stock compensation $ 5,512 $ 939 $ 10,372 $ ( 6,900 )

Income tax expense from valuation allowance ( 139,670 ) — ( 139,670 ) —

Excess tax (expense) benefit on stock compensation ( 1,752 ) ( 938 ) ( 4,658 ) 7,355

Income tax benefit $ 2,337 $ 9,092 $ 1,954 $ 454

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Income tax (expense) benefit $ ( 135,910 ) $ 1 $ ( 133,956 ) $ 455

NOTE 12— DEBT

4 unchanged sentences

The 2025 Notes will mature on July 15, 2025, unless earlier repurchased, redeemed or converted.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The initial conversion rate of the 2025 Notes is 2.1683 shares of the Company's common stock per $1,000 principal amount of 2025 Notes (which is equivalent to an initial conversion price of approximately $ 461.19 per share).

12 unchanged sentences

• upon the occurrence of specified corporate events including but not limited to a fundamental change.

Holders of the 2025 Notes were not entitled to convert the 2025 Notes during the calendar quarter ended June 30, 2022 as the last reported sale price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on March 31, 2022, was not greater than or equal to 130 % of the conversion price of the 2025 Notes on each applicable trading day.

Holders of the 2025 Notes are not entitled to convert the 2025 Notes during the calendar quarter ended September 30, 2022 as the last reported sale price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on June 30, 2022, was not greater than or equal to 130 % of the conversion price of the 2025 Notes on each applicable trading day.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Holders of the 2025 Notes were not entitled to convert the 2025 Notes during the calendar quarter ended September 30, 2022 as the last reported sale price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on June 30, 2022, was not greater than or equal to 130 % of the conversion price of the 2025 Notes on each applicable trading day.

Holders of the 2025 Notes are not entitled to convert the 2025 Notes during the calendar quarter ended December 31, 2022 as the last reported sale price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on September 30, 2022, was not greater than or equal to 130 % of the conversion price of the 2025 Notes on each applicable trading day.

On or after March 13, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2025 Notes, holders of the 2025 Notes may convert all or a portion of their 2025 Notes regardless of the foregoing conditions.

1 unchanged sentence

On or after July 20, 2023 and before the 41 st scheduled trading day immediately before the maturity date, the Company may redeem for cash all or a portion of the 2025 Notes, at its option, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period (and including the last trading day of such period) ending on, and including the last trading day immediately preceding the date of notice of redemption is greater than or equal to 130 % of the conversion price on each applicable trading day.

The redemption price will be equal to 100 % of the principal amount of the 2025 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.

The redemption price will be equal to 100 % of the principal amount of the 2025 Notes to be

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.

No sinking fund is provided for the 2025 Notes.

12 unchanged sentences

Financing costs related to the issuance of the 2025 Notes were approximately $ 15.1 million, of which $ 12.0 million were allocated to the liability component and are being amortized to interest expense over the term of the debt and $ 3.1 million were allocated to the equity component.

In the first six months of 2022, the Company recorded interest expense on the 2025 Notes of $ 3.0 million which consisted of $ 1.5 million associated with the 0.50 % coupon rate and $ 1.5 million associated with the amortization of the debt issuance costs.

In the first six months of 2021, the Company recorded interest expense on the 2025 Notes of $ 13.5 million which consisted of $ 1.4 million associated with the 0.50 % coupon rate, $ 11.0 million associated with the accretion of the debt discount, and $ 1.1 million associated with the amortization of the debt issuance costs.

As of June 30, 2022, the fair value of the 2025 Notes is estimated to be approximately $ 391.0 million using the Level 1 observable input of the last quoted market price on June 30, 2022.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of the gross carrying amount, unamortized debt cost, debt issuance costs, and net carrying value of the liability component of the 2025 Notes, all of which is recorded as a non-current liability in the June 30, 2022 consolidated balance sheet, are as follows (in thousands) :

In the first nine months of 2022, the Company recorded interest expense on the 2025 Notes of $ 4.4 million which consisted of $ 2.1 million associated with the 0.50 % coupon rate and $ 2.3 million associated with the amortization of the debt issuance costs.

In the first nine months of 2021, the Company recorded interest expense on the 2025 Notes of $ 20.3 million which consisted of $ 2.2 million associated with the 0.50 % coupon rate, $ 16.4 million associated with the accretion of the debt discount, and $ 1.7 million associated with the amortization of the debt issuance costs.

As of September 30, 2022, the fair value of the 2025 Notes is estimated to be approximately $ 411.8 million using the Level 1 observable input of the last quoted market price on September 30, 2022.

A summary of the gross carrying amount, unamortized debt cost, debt issuance costs, and net carrying value of the liability component of the 2025 Notes, all of which is recorded as a non-current liability in the September 30, 2022 consolidated balance sheet, are as follows (in thousands) :

September 30,

2022 December 31,

5 unchanged sentences

The Company settled the outstanding balance of the 2022 Notes of $ 169.7 million in cash on June 1, 2022.

The initial conversion rate of the 2022 Notes was 4.8163 shares of the Company's common stock per $1,000 principal amount of 2022 Notes (which is equivalent to an initial conversion price of approximately $ 207.63 per share).

The initial conversion rate of the 2022 Notes was 4.8163 shares of the Company's

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

common stock per $1,000 principal amount of 2022 Notes (which is equivalent to an initial conversion price of approximately $ 207.63 per share).

Accounting for the Notes After Adoption of ASU 2020-06

11 unchanged sentences

The Company recognized a loss on debt extinguishment of $ 7.8 million in the third quarter of 2020, which is included in interest expense, net in the consolidated statements of operations and comprehensive income.

In the first six months of 2022, the Company recorded interest expense on the 2022 Notes of $ 0.8 million which consisted of $ 0.4 million associated with the 0.625 % coupon rate and $ 0.4 million associated with the amortization of the debt issuance costs.

In the first six months of 2021, the Company recorded interest expense on the 2022 Notes of $ 4.7 million which consisted of $ 0.5 million associated with the 0.625 % coupon rate, $ 3.8 million associated with the accretion of the debt discount, and $ 0.4 million associated with the amortization of the debt issuance costs.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In the first nine months of 2022, the Company recorded interest expense on the 2022 Notes of $ 0.8 million which consisted of $ 0.4 million associated with the 0.625 % coupon rate and $ 0.4 million associated with the amortization of the debt issuance costs.

In the first nine months of 2021, the Company recorded interest expense on the 2022 Notes of $ 7.1 million which consisted of $ 0.8 million associated with the 0.625 % coupon rate, $ 5.6 million associated with the accretion of the debt discount, and $ 0.7 million associated with the amortization of the debt issuance costs.

A summary of the gross carrying amount, unamortized debt cost, debt issuance costs and net carrying value of the liability component of the 2022 Notes, are as follows (in thousands) :

September 30,

2022 December 31,

9 unchanged sentences

The 2020 Hedge transactions cover 1.2 million shares of the Company’s common stock, the same number of shares initially underlying the 2025 Notes, and are exercisable upon any conversion of the 2025 Notes.

The 2020 Hedge transactions are expected generally to reduce the potential dilution to the Company's common stock upon conversion of the 2025 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2025 Notes, as the case may be, in the event that the market price per share of common stock, as measured under the terms of the 2020 Hedge transactions, is greater than the strike price of the 2020 Hedge transactions, which initially corresponds to the initial conversion price of the 2025 Notes, or approximately $ 461.19 per share of common stock.

The 2020 Hedge transactions are expected generally to

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

reduce the potential dilution to the Company's common stock upon conversion of the 2025 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2025 Notes, as the case may be, in the event that the market price per share of common stock, as measured under the terms of the 2020 Hedge transactions, is greater than the strike price of the 2020 Hedge transactions, which initially corresponds to the initial conversion price of the 2025 Notes, or approximately $ 461.19 per share of common stock.

The 2020 Hedge transactions will expire upon the maturity of the Notes.

10 unchanged sentences

The 2017 Hedge transactions expired on June 1, 2022 upon the maturity of the Notes.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On May 31, 2017, the Company sold to the counterparties, warrants (the “2017 Warrants”) to acquire 1.4 million shares of the Company's common stock at an initial strike price of $ 266.39 per share, which represents a premium of 70 % over the last reported sale price of the common stock of $ 156.70 on May 24, 2017.

1 unchanged sentence

If the market price per share of the common stock, as measured under the terms of the 2017 Warrants, exceeds the strike price of the 2017 Warrants, the 2017 Warrants could have a dilutive effect, unless the Company elects, subject to certain conditions, to settle the 2017 Warrants in cash.

As of June 30, 2022, there were 0.8 million warrants outstanding.

As of September 30, 2022, there were 0.8 million warrants outstanding.

The warrants expire ratably from October 14, 2022 through December 12, 2022.

3 unchanged sentences

The net $ 15.6 million was recorded as an increase to additional paid-in capital in the consolidated statement of shareholders’ equity.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Credit Facility

4 unchanged sentences

The Credit Facility replaces the Company's $ 500.0 million five-year senior secured revolving credit facility (the “Amended Revolving Credit Facility”) which was entered into on December 10, 2019.

As of June 30, 2022, the Company had $ 250.0 million of borrowings outstanding under the Term Loan Facility bearing interest at the LIBO option rate of 5.42 % and had no borrowings under the Revolving Facility.

As of September 30, 2022, the Company had $ 249.4 million of borrowings outstanding under the Term Loan Facility bearing interest at the LIBO option rate of 6.87 % and had no borrowings under the Revolving Facility.

As of December 31, 2021, the Company had no borrowings outstanding under the Credit Facility.

As of June 30, 2022, borrowings of $ 2.5 million under the Term Loan Facility are recorded as current portion of long-term debt on the consolidated balance sheet.

As of September 30, 2022, borrowings of $ 2.5 million under the Term Loan Facility are recorded as current portion of long-term debt on the consolidated balance sheet.

The full amount of the Revolving Facility will be available on a same-day basis, with respect to base rate loans and upon advance notice with respect to LIBO rate loans, subject to customary terms and conditions.

1 unchanged sentence

Additionally, up to $ 20.0 million of the Revolving Facility will be available for the issuance of letters of credit.

At each of June 30, 2022 and December 31, 2021, the Company had outstanding one letter of credit issued in the amount of $ 0.2 million.

At each of September 30, 2022 and December 31, 2021, the Company had outstanding one letter of credit issued in the amount of $ 0.2 million.

The Company’s borrowings under the Credit Facility bear interest at annual rates that, at the Company’s option, will be either:

1 unchanged sentence

• a LIBO rate generally defined as the sum of (i) the rate for Eurodollar deposits for the applicable interest period and (ii) an applicable percentage of 2.25 % to 2.75 % for loans under the Revolving Facility and 3.75 % to 4.00 % for loans under the Term Loan Facility, in each case, based on a first lien net leverage ratio.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Interest on the Company’s borrowings is payable quarterly in arrears for base rate loans and on the last day of each interest rate period (but not less often than three months) for LIBO rate loans.

6 unchanged sentences

The Company has the right to prepay its term loans under the Credit Agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0 % soft call premium applicable during the first six months following the closing date.

The Company was in compliance with all covenants at June 30, 2022.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company was in compliance with all covenants at September 30, 2022.

The Credit Facility requires the Company and certain of its subsidiaries to pledge as collateral, subject to certain customary exclusions, substantially all of its assets, including 100 % of the equity in certain domestic subsidiaries and 65 % of the voting equity, and 100 % of the non-voting equity, in certain foreign subsidiaries.

9 unchanged sentences

These deferred costs are included in prepaid and other current assets and other non-current assets in the Company's consolidated balance sheet.

In the first six months of 2022, the Company recorded interest expense related to its Revolving Facility of $ 0.7 million which consisted of $ 0.2 million in unused commitment fees, and $ 0.5 million associated with the amortization of the debt issuance costs.

In the first six months of 2022, the Company recorded interest expense related to the Term Loan Facility of $ 9.6 million which consisted of $ 1.0 million associated with borrowings bearing interest at the LIBO rate, $ 5.1 million in unused commitment fees, $ 2.0 million associated with the amortization of the debt issuance costs, and $ 1.5 million associated with the amortization of the original issue discount.

In the first six months of 2021, the Company recorded interest expense related to its revolving credit facilities of $ 2.3 million which consisted of $ 1.3 million in unused commitment fees, and $ 1.0 million associated with the amortization of the debt issuance costs.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In the first nine months of 2022, the Company recorded interest expense related to its Revolving Facility of $ 1.1 million which consisted of $ 0.4 million in unused commitment fees, and $ 0.7 million associated with the amortization of the debt issuance costs.

In the first nine months of 2022, the Company recorded interest expense related to the Term Loan Facility of $ 13.5 million which consisted of $ 4.9 million associated with borrowings bearing interest at the LIBO rate, $ 5.1 million in unused commitment fees, $ 2.0 million associated with the amortization of the debt issuance costs, and $ 1.5 million associated with the amortization of the original issue discount.

In the first nine months of 2021, the Company recorded interest expense related to its revolving credit facilities of $ 3.0 million which consisted of $ 1.8 million in unused commitment fees, and $ 1.2 million associated with the amortization of the debt issuance costs.

In the first nine months of 2021, the Company recorded interest expense related to the Term Loan Facility of $ 0.7 million which consisted of $ 0.4 million in unused commitment fees, $ 0.2 million associated with the amortization of the debt issuance costs, and $ 0.1 million associated with the amortization of the original issue discount.

NOTE 13— CONTINGENCIES

2 unchanged sentences

With respect to the matters disclosed in this Note 13, unless otherwise indicated, the Company is unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies.

As of June 30, 2022 and December 31, 2021, the Company had litigation settlement accruals of $ 0.1 million in continuing operations.

As of September 30, 2022 and December 31, 2021, the Company had litigation settlement accruals of $ 0.1 million in continuing operations.

The litigation settlement accruals relate to litigation matters that were either settled or a firm offer for settlement was extended, thereby establishing an accrual amount that is both probable and reasonably estimable.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14— FAIR VALUE MEASUREMENTS

Other than the convertible notes and warrants, as well as the equity interests, the carrying amounts of the Company's financial instruments are equal to fair value at June 30, 2022.

See Note 12—Debt for additional information on the convertible notes and warrants, and see Note 7—Equity Investment for additional information on the equity interests in Stash and EarnUp.

Other than the convertible notes and warrants, as well as the equity interests, the carrying amounts of the Company's financial instruments are equal to fair value at September 30, 2022.

See Note 12—Debt for additional information on the convertible notes and warrants, and see Note 7—Equity Investments for additional information on the equity interests in Stash and EarnUp.

In 2018, the Company acquired all of the outstanding equity interests of QuoteWizard.com, LLC (“QuoteWizard”).

In the second quarter and first six months of 2021, the company recorded $ 0.9 million and $ 0.8 million, respectively, of income for the change in fair value of the contingent consideration related to the QuoteWizard acquisition.

In the third quarter and first nine months of 2021, the company recorded $ 0.2 million and $ 8.2 million, respectively, of income for the change in fair value of the contingent consideration related to the QuoteWizard acquisition.

The earnout was completed in 2021 and there were no earnout payments related to the acquisition in 2021.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Contingent consideration, beginning of period $ 196 $ 8,249

10 unchanged sentences

The Home segment includes the following products:

purchase mortgage, refinance mortgage, home equity loans and lines of credit, reverse mortgage loans, and real estate.

purchase mortgage, refinance mortgage, home equity loans and lines of credit, and reverse mortgage loans.

The Consumer segment includes the following products:

8 unchanged sentences

This measure excludes overhead, fixed costs and personnel-related expenses.

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Home Consumer Insurance Other Total

9 unchanged sentences

Amortization of intangibles 6,582

Severance 135

Restructuring and severance —

Litigation settlements and contingencies ( 7 )

3 unchanged sentences

Loss before income taxes and discontinued operations $ ( 22,773 )

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Home Consumer Insurance Other Total

2 unchanged sentences

Segment marketing expense 70,905 55,295 58,227 83 184,510

Segment profit (loss) 39,017 33,394 33,238 ( 49 ) 105,600

Segment profit 41,517 44,716 26,610 97 112,940

Cost of revenue 15,020

5 unchanged sentences

Change in fair value of contingent consideration ( 196 )

Restructuring and severance 47

Litigation settlements and contingencies 22

Operating loss 10,548

Operating income 7,419

Interest expense, net ( 11,826 )

Income before income taxes and discontinued operations $ 708

Loss before income taxes and discontinued operations $ ( 4,407 )

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Home Consumer Insurance Other Total

9 unchanged sentences

Amortization of intangibles 21,574

Severance 3,760

Restructuring and severance 3,760

Litigation settlements and contingencies ( 41 )

3 unchanged sentences

Loss before income taxes and discontinued operations $ ( 43,588 )

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Home Consumer Insurance Other Total

10 unchanged sentences

Change in fair value of contingent consideration ( 8,249 )

Restructuring and severance 47

Litigation settlements and contingencies 360

Operating loss 8,641

Operating income 16,060

Interest expense, net ( 31,881 )

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

All employee separation costs are expected to be paid by the first quarter of 2023.

Accrued Balance at December 31, 2021 Income Statement Impact Payments Non-Cash Accrued Balance at June 30, 2022

Accrued Balance at December 31, 2021 Income Statement Impact Payments Non-Cash Accrued Balance at September 30, 2022

Employee separation payments $ — $ 2,677 $ ( 2,518 ) $ — $ 159

2 unchanged sentences

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-Q

Item 1. Financial Statements