What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-02-28 · 327 added, 401 removed, 1146 unchanged (39% of the section changed)

5 unchanged sentences

CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Shareholders' Equity

9 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for convertible debt in 2022.

Basis for Opinions

19 unchanged sentences

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Interim Goodwill Impairment Assessment – Insurance Reporting Unit

As described in Notes 2 and 7 to the consolidated financial statements, the Company’s consolidated goodwill balance was $420.1 million as of December 31, 2022, and total goodwill associated with the Insurance reporting unit was $194.7 million.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) 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.

Interim Goodwill Impairment Assessment – Home and Insurance Reporting Units

As described in Notes 2 and 7 to the consolidated financial statements, the Company’s consolidated goodwill balance was $381.5 million as of December 31, 2023, and the goodwill associated with the Home and Insurance reporting units was $59.3 million and $156.1 million, respectively.

Goodwill is tested annually for impairment as of October 1, or more frequently upon the occurrence of certain events or substantive changes in circumstances.

Management may elect to assess qualitative factors as a basis for determining whether it is necessary to perform the traditional quantitative impairment testing.

At June 30, 2022, management determined that the effects of the challenging interest rate environment, consumer price inflation, and the decline in the Company's market capitalization required an interim quantitative impairment test be performed.

At September 29, 2023, the Company’s market capitalization was below the Company’s book value.

In addition, considering the effects of the challenging interest rate environment, low for-sale home inventories and the rise in home prices in the Home reporting unit and consumer price inflation negatively impacting carrier underwriting in the Insurance reporting unit, management concluded that a triggering event had occurred and an interim quantitative impairment test was performed as of September 30, 2023.

The quantitative impairment test for goodwill involves a comparison of the fair value of a reporting unit with its carrying amount, including goodwill.

The quantitative interim goodwill impairment test found that the fair value of the Insurance reporting unit exceeded its carrying amount, indicating no goodwill impairment.

Upon completing the quantitative interim goodwill impairment test, management concluded that the carrying value of the Insurance reporting unit exceeded its fair value, which resulted in a goodwill impairment charge of $38.6 million, and that the fair value of the Home reporting unit exceeded its carrying amount, indicating no goodwill impairment.

Management determines the fair value of the Company’s reporting units by using a market approach and a discounted cash flow analysis.

Determining the fair value using a discounted cash flow analysis and market analysis requires the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates, including revenue, the amount and timing of expected future cash flows, and market multiples.

The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessment of the Insurance reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Insurance reporting unit;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, discount rate, and market multiples;

Determining the fair value using a discounted cash flow analysis and market analysis requires the exercise of significant judgments, including judgments about appropriate discount rates, revenue growth rates, marketing spend, direct operating expenses, the amount and timing of expected future cash flows, and market multiples.

The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessment of the Home and Insurance reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Home and Insurance reporting units;

(ii) a high degree of auditor judgment , subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, marketing spend, direct operating expenses, the discount rate, and market multiples;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Company’s Insurance reporting unit.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Insurance reporting unit;

(ii) evaluating the appropriateness of the discounted cash flow model and market approach;

(iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow model and market approach;

and (iv) evaluating the reasonableness of significant assumptions used by management related to revenue growth rates, discount rate, and market multiples.

Evaluating management’s assumptions related to revenue growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Insurance reporting unit;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s discounted cash flow model and market approach and (ii) the reasonableness of the significant assumptions related to the discount rate and market multiples.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Home and Insurance reporting units.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Home and Insurance reporting units;

(ii) evaluating the appropriateness of the discounted cash flow analysis and market approach used by management;

(iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow analysis and market approach;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, marketing spend, direct operating expenses, the discount rate, and market multiples.

Evaluating management’s assumptions related to revenue growth rates, marketing spend, and direct operating expenses involved considering (i) the current and past performance of the Home and Insurance reporting units and (ii) whether the assumptions were consistent with evidence obtained in other areas of the audit, and for revenue growth rates (iii) the consistency with external market and industry data.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow analysis and market approach and (ii) the reasonableness of the assumptions related to the discount rate and market multiples.

Equity Investment Impairment Assessment – Stash Investment

As described in Notes 2 and 8 to the consolidated financial statements, in the third quarter of 2023, management determined there was an impairment indicator related to the Company’s Stash investment and performed a valuation of the investment, which resulted in an impairment charge of $113.1 million.

The equity investments do not have a readily determinable fair value and, upon acquisition, the Company elected the measurement alternative to value its investments.

The equity investments are 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.

Additionally, if a qualitative assessment identifies impairment indicators, then the equity investments must be evaluated for impairment and written down to its fair value, if it is determined that the fair value is less than the carrying value.

Management determined the fair value by using a market approach and a discounted cash

flow analysis.

Determining the fair value using a discounted cash flow analysis and market analysis requires the exercise of significant judgments, including judgments about the appropriate discount rate, perpetual growth rates, including short-term revenue and EBITDA, the amount and timing of expected future cash flows, and the revenue exit multiple.

The principal considerations for our determination that performing procedures relating to the equity investment impairment assessment of the Stash investment is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Stash investment;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to short-term revenue and EBITDA growth rates, the discount rate, and the revenue exit multiple;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s equity investment impairment assessment, including controls over the valuation of the Stash investment.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Stash investment;

(ii) evaluating the appropriateness of the discounted cash flow analysis and market approach used by management;

(iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow analysis and market approach;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to short-term revenue and EBITDA growth rates, the discount rate, and the revenue exit multiple.

Evaluating management’s assumptions related to short-term revenue and EBITDA growth rates involved considering (i) the current and past performance of the Stash investment and (ii) the consistency with market data.

/s/ PricewaterhouseCoopers LLP

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Year Ended December 31,

2022 2021 2020

(in thousands, except per share amounts)

Revenue $ 984,992 $ 1,098,499 $ 909,990

Costs and expenses:

Cost of revenue (exclusive of depreciation and amortization shown separately below)

57,769 57,297 54,494

Selling and marketing expense 702,238 773,990 617,404

General and administrative expense 152,377 153,472 129,101

Product development 55,553 52,865 43,636

Depreciation 20,095 17,910 14,201

Amortization of intangibles 25,306 42,738 53,078

Change in fair value of contingent consideration — ( 8,249 ) 5,327

Restructuring and severance 4,428 53 295

Litigation settlements and contingencies ( 18 ) 392 ( 943 )

Total costs and expenses 1,017,748 1,090,468 916,593

Operating (loss) income ( 32,756 ) 8,031 ( 6,603 )

Other (expense) income, net:

Interest expense, net ( 26,014 ) ( 46,867 ) ( 36,300 )

Other income 3,843 123,272 376

(Loss) income before income taxes ( 54,927 ) 84,436 ( 42,527 )

Income tax (expense) benefit ( 133,019 ) ( 11,298 ) 19,961

Net (loss) income from continuing operations ( 187,946 ) 73,138 ( 22,566 )

Loss from discontinued operations, net of tax ( 6 ) ( 4,023 ) ( 25,689 )

Net (loss) income and comprehensive (loss) income $ ( 187,952 ) $ 69,115 $ ( 48,255 )

Weighted average shares outstanding:

Basic 12,793 13,199 13,007

Diluted 12,793 13,695 13,007

(Loss) income per share from continuing operations:

Basic $ ( 14.69 ) $ 5.54 $ ( 1.73 )

Diluted $ ( 14.69 ) $ 5.34 $ ( 1.73 )

Loss per share from discontinued operations:

Basic $ — $ ( 0.30 ) $ ( 1.98 )

Diluted $ — $ ( 0.29 ) $ ( 1.98 )

Net (loss) income per share:

Basic $ ( 14.69 ) $ 5.24 $ ( 3.71 )

Diluted $ ( 14.69 ) $ 5.05 $ ( 3.71 )

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

LENDINGTREE, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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Intangible assets, net 50,620 58,315

Deferred income tax assets — 87,581

Equity investment (Note 8)

Equity investments (Note 8)

60,076 174,580

Other non-current assets 6,339 6,101

Non-current assets of discontinued operations — 16,589

Total assets $ 802,759 $ 1,199,313

2 unchanged sentences

Accrued expenses and other current liabilities 70,544 75,095

Current liabilities of discontinued operations — 1

Liabilities held for sale (Note 9)

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Year Ended December 31,

2023 2022 2021

(in thousands, except per share amounts)

Revenue $ 672,502 $ 984,992 $ 1,098,499

Costs and expenses:

Cost of revenue (exclusive of depreciation and amortization shown separately below)

38,758 57,769 57,297

Selling and marketing expense 433,588 702,238 773,990

General and administrative expense 117,700 152,383 153,472

Product development 47,197 55,553 52,865

Depreciation 19,070 20,095 17,910

Amortization of intangibles 7,694 25,306 42,738

Goodwill impairment 38,600 — —

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

Restructuring and severance 10,118 4,428 53

Litigation settlements and contingencies 388 ( 18 ) 392

Total costs and expenses 713,113 1,017,754 1,090,468

Operating (loss) income ( 40,611 ) ( 32,762 ) 8,031

Other (expense) income, net:

Interest income (expense), net 21,685 ( 26,014 ) ( 46,867 )

Other (expense) income ( 105,993 ) 3,843 123,272

(Loss) income before income taxes ( 124,919 ) ( 54,933 ) 84,436

Income tax benefit (expense) 2,515 ( 133,019 ) ( 11,298 )

Net (loss) income from continuing operations ( 122,404 ) ( 187,952 ) 73,138

Loss from discontinued operations, net of tax — — ( 4,023 )

Net (loss) income and comprehensive (loss) income $ ( 122,404 ) $ ( 187,952 ) $ 69,115

Weighted average shares outstanding:

Basic 12,941 12,793 13,199

Diluted 12,941 12,793 13,695

(Loss) income per share from continuing operations:

Basic $ ( 9.46 ) $ ( 14.69 ) $ 5.54

Diluted $ ( 9.46 ) $ ( 14.69 ) $ 5.34

Loss per share from discontinued operations:

Basic $ — $ — $ ( 0.30 )

Diluted $ — $ — $ ( 0.29 )

Net (loss) income per share:

Basic $ ( 9.46 ) $ ( 14.69 ) $ 5.24

Diluted $ ( 9.46 ) $ ( 14.69 ) $ 5.05

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

LENDINGTREE, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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Balance as of December 31, 2020 $ 364,761 15,766 $ 158 $ 1,188,673 $ ( 640,909 ) 2,641 $ ( 183,161 )

Net loss and comprehensive loss ( 48,255 ) — — — ( 48,255 ) — —

Net income and comprehensive income 69,115 — — — 69,115 — —

Non-cash compensation 68,555 — — 68,555 — — —

Purchase of treasury stock ( 40,008 ) — — — — 335 ( 40,008 )

Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes ( 14,423 ) 305 3 ( 14,426 ) — — —

Issuance of 0.50 % Convertible Senior Notes, net

116,300 — — 116,300 — — —

Repurchase of 0.625 % Convertible Senior Notes, net

( 107,882 ) — — ( 107,882 ) — — —

Convertible note hedge transactions ( 14,379 ) — — ( 14,379 ) — — —

Warrant transactions ( 33,171 ) — — ( 33,171 ) — — —

Other ( 8 ) — — ( 8 ) — — —

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 69,115 — — — 69,115 — —

Net loss and comprehensive loss ( 187,952 ) — — — ( 187,952 ) — —

Non-cash compensation 59,624 — — 59,624 — — —

1 unchanged sentence

Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes ( 3,412 ) 96 1 ( 3,413 ) — — —

Other ( 8 ) — — ( 8 ) — — —

Cumulative effect adjustment due to ASU 2020-06 ( 65,303 ) — — ( 109,750 ) 44,447 — —

Balance as of December 31, 2022 $ 207,940 16,167 $ 162 $ 1,189,255 $ ( 715,299 ) 3,355 $ ( 266,178 )

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Non-cash compensation 39,682 — — 39,682 — — —

Purchase of treasury stock ( 43,009 ) — — — — 379 ( 43,009 )

Issuance of common stock for stock options, employee stock purchase plan, restricted stock awards and restricted stock units, net of withholding taxes ( 1,087 ) 230 2 ( 1,089 ) — — —

Cumulative effect adjustment due to ASU 2020-06 ( 65,303 ) — — ( 109,750 ) 44,447 — —

Other 1 — — 1 — — —

Balance as of December 31, 2023 $ 124,132 16,397 $ 164 $ 1,227,849 $ ( 837,703 ) 3,355 $ ( 266,178 )

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

Gain on investments — ( 123,272 ) —

Bad debt expense 1,752 4,101 2,472

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Amortization of debt discount — 1,475 30,695

Loss on extinguishment of debt — — 7,768

Reduction in carrying amount of ROU asset, offset by change in operating lease liabilities ( 4,404 ) ( 1,547 ) 12,807

Gain on settlement of convertible debt ( 48,562 ) — —

Loss (gain) on investments 114,504 — ( 123,272 )

Loss on impairment of goodwill 38,600 — —

Changes in current assets and liabilities:

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Accounts payable, accrued expenses and other current liabilities ( 5,541 ) ( 28,418 ) ( 1,537 )

Current contingent consideration — — ( 25,787 )

Income taxes receivable ( 140 ) 214 10,680

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Repayment of term loan ( 1,875 ) ( 1,250 ) —

Proceeds from the issuance of 0.50 % Convertible Senior Notes

Repayment of 0.625 % Convertible Senior Notes

( 169,659 ) — ( 233,862 )

Payment of convertible note hedge on the 0.50 % Convertible Senior Notes

Repurchases of 0.50 % Convertible Senior Notes

( 237,464 ) — —

Termination of convertible note hedge on the 0.625 % Convertible Senior Notes

Proceeds from the sale of warrants related to the 0.50 % Convertible Senior Notes

Termination of warrants related to the 0.625 % Convertible Senior Notes

Repayment of 0.625 % Convertible Senior Notes

— ( 169,659 ) —

Net repayment of revolving credit facility — — ( 75,000 )

Payment of debt issuance costs ( 1,580 ) ( 135 ) ( 6,385 )

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

Contingent consideration payments — — ( 4,755 )

Other financing activities 1 — ( 31 )

Net cash provided by (used in) financing activities attributable to continuing operations 32,536 ( 63,347 ) 193,290

Total cash provided by continuing operations 47,634 77,976 182,440

Net cash (used in) provided by financing activities attributable to continuing operations ( 242,006 ) 32,536 ( 63,347 )

Total cash (used in) provided by continuing operations ( 186,913 ) 47,627 77,976

Discontinued operations:

Net cash (used in) provided by operating activities attributable to discontinued operations ( 7 ) 3,317 ( 72,730 )

Total cash (used in) provided by discontinued operations ( 7 ) 3,317 ( 72,730 )

Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents 47,627 81,293 109,710

Net cash provided by operating activities attributable to discontinued operations — — 3,317

Total cash provided by discontinued operations — — 3,317

Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents ( 186,913 ) 47,627 81,293

Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period 298,969 251,342 170,049

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Discontinued Operations

The LendingTree Loans business, which consisted of originating various consumer mortgage loans through HLC (the “LendingTree Loans Business”), is presented as discontinued operations in the accompanying consolidated balance sheets, consolidated statements of operations and comprehensive income (loss) and consolidated cash flows for all periods presented.

The notes accompanying these consolidated financial statements reflect the Company's continuing operations and, unless otherwise noted, exclude information related to the discontinued operations.

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Approval fees are derived from credit card issuers when the credit card consumer receives card approval from the credit card issuer.

Upfront service fees and subscription fees are derived from consumers in the Company's credit services product.

Upfront fees paid by consumers are recognized as revenue over the estimated time the consumer will remain a customer and receive services.

Subscription fees are recognized over the period a consumer is receiving services.

Upfront service fees and subscription fees were derived from consumers in the Company's credit services product.

Upfront fees paid by consumers were recognized as revenue over the estimated time the consumer was expected to remain a customer and receive services.

Subscription fees were recognized over the period a consumer was receiving services.

As of the second quarter of 2023, the Company discontinued providing its credit services product to consumers and no longer receives upfront fees and subscription fees.

Under ASC Topic 606, the timing of recognizing revenue for closing fees and approval fees is accelerated to the point when a loan request or a credit card consumer is delivered to the customer, as opposed to when the consumer loan is closed by the lender or credit card approval is made by the issuer.

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Assets held for sale (Note 9)

371 ( 371 ) —

Balance, end of the period $ 2,222 $ 2,317 $ 1,456

13 unchanged sentences

Furniture and other equipment 7 years

Aircraft and automobile 5 to 10 years

Aircraft 10 years

Hosting Arrangement that is a Service Contract

19 unchanged sentences

The Company determines the fair value of its reporting units by using a market approach and a discounted cash flow (“DCF”) analysis.

Determining fair value using a DCF analysis and market analysis requires the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates, including revenue, the amount and timing of expected future cash flows, and market multiples.

Determining fair value using a DCF analysis and market analysis requires the exercise of significant judgments, including judgments about appropriate discount rates, revenue growth rates, marketing spend, direct operating expenses, the amount and timing of expected future cash flows, and market multiples.

If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired.

4 unchanged sentences

Significant judgments inherent in this analysis include the determination of royalty rates, discount rates, perpetual growth rates and the amount and timing of future revenues.

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.

The quantitative goodwill impairment test found that the fair value of each reporting unit exceeded its carrying amount, indicating no goodwill impairment.

Results of the October 1, 2023, 2022 and 2021 qualitative annual impairment tests indicated that it is not more likely than not that the fair value of the goodwill and the indefinite-lived intangible assets were each less than their respective carrying values.

Accordingly, no further testing was required.

At December 31, 2023, the Company performed its quarterly review of impairment triggering events for goodwill and determined that a triggering event had not occurred.

Long-Lived Assets and Intangible Assets with Definite Lives

22 unchanged sentences

Equity Investments

The equity securities do not have a readily determinable fair value and, upon acquisition, the Company elected the measurement alternative to value its securities.

Accordingly, 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.

The equity investments do not have a readily determinable fair value and, upon acquisition, the Company elected the measurement alternative to value its investments.

Accordingly, the equity investments 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.

Any gains or losses are included within other (expense) income in the consolidated statement of operations and comprehensive income.

Fair Value Measurements

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Cost of revenue consists primarily of expenses associated with compensation and other employee-related costs (including stock-based compensation) related to internally-operated customer call centers, third-party customer call center fees, credit scoring fees, credit card fees, website network hosting and server fees.

Product Development

Product development expense consists primarily of compensation and other employee-related costs (including stock-based compensation) and third-party labor costs that are not capitalized, for employees and consultants engaged in the design, development, testing and enhancement of technology.

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Product Development

Product development expense consists primarily of compensation and other employee-related costs (including stock-based compensation), as well as third-party labor costs that are not capitalized, for employees and consultants engaged in the design, development, testing and enhancement of technology.

Advertising and Promotional Expense

6 unchanged sentences

Interest is recorded on potential tax contingencies as a component of income tax expense and recorded net of any applicable related income tax benefit.

For the years ended December 31, 2022, 2021 and 2020, the Company followed the incremental or “with” and “without” approach to intraperiod tax allocation for determination of the amount of tax benefit to allocate to continuing operations as prescribed in ASC 740-20-45-7.

For the year ended December 31, 2021, the Company followed the incremental or “with” and “without” approach to intraperiod tax allocation for determination of the amount of tax benefit to allocate to continuing operations as prescribed in ASC 740-20-45-7.

In accordance with the accounting standard for uncertainty in income taxes, liabilities for uncertain tax positions are recognized based on the two-step process prescribed by the accounting standards.

17 unchanged sentences

Non-cash compensation expense for single cliff-vesting grants with a market condition are recognized on a straight-line basis, while graded-vesting grants with a market condition use graded vesting expense attribution.

Excess tax benefits and deficiencies that arise due to the difference in the measure of stock compensation and the amount deductible for tax purposes are recorded in income tax expense within the consolidated statement of operations and comprehensive income (loss), and are classified as a component of operating cash flows within the consolidated statements of cash flows.

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Litigation Settlements and Contingencies

21 unchanged sentences

and the determination of right-of-use assets and lease liabilities.

The Company considered the impact of the COVID-19 pandemic on the assumptions and estimates used when preparing its consolidated financial statements including, but not limited to, the allowance for doubtful accounts, valuation allowances, contract asset and contingent consideration.

These assumptions and estimates may change as new events occur and additional information is obtained.

If economic conditions caused by the COVID-19 pandemic worsen, such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity.

Certain Risks and Concentrations

4 unchanged sentences

Due to the nature of the mortgage lending industry, interest rate fluctuations may negatively impact future revenue from the Company's marketplace.

For the years ended December 31, 2022 and December 31, 2021, there were no network partners accounting for more than 10% of total revenue.

For the year ended December 31, 2020, one network partner accounted for 15 % of total consolidated revenue, all of which was recorded within the Insurance segment.

For the years ended December 31, 2023 and December 31, 2022, and December 31, 2021 there were no network partners accounting for more than 10% of total revenue.

Lenders and lead purchasers participating on the Company's marketplace can offer their products directly to consumers through brokers, mass marketing campaigns or through other traditional methods of credit distribution.

47 unchanged sentences

The amendments applicable to the Company required prospective application, and do not have material impacts to its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).

This ASU is effective for annual and interim reporting periods beginning after December 15, 2019.

The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.

The Company adopted ASU 2018-15 in the first quarter of 2020 using the prospective approach.

Subsequent to the adoption of this ASU, capitalizable implementation costs incurred in a hosting arrangement that is a service contract are recorded within prepaid and other current assets and other non-current assets on the consolidated balance sheet.

The amortization expense associated with these capitalized implementation costs is included within general and administrative expense on the consolidated statement of operations and comprehensive income (loss).

The adoption of ASU 2018-15 did not have a material impact on the consolidated financial statements as of and for the year ended December 31, 2020.

See Note 6—Hosting Arrangements.

In August 2018, the FASB issued ASU 2018-13, which removes, modifies and adds certain disclosure requirements in ASC Topic 820, Fair Value Measurement.

This ASU is effective for annual and interim reporting periods beginning after December 15, 2019.

Certain amendments must be applied prospectively while others are to be applied on a retrospective basis to all periods presented.

The Company adopted ASU 2018-13 in the first quarter of 2020.

See Note 19—Fair Value Measurements.

In January 2017, the FASB issued ASU 2017-04, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (Step 2 of the goodwill impairment test).

Instead, an impairment charge will be based on the excess of the carrying amount over the fair value.

This ASU is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019.

The Company adopted ASU 2017-04 in the first quarter of 2020.

In June 2016, the FASB issued ASU 2016-13, which requires entities to measure expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

This ASU introduces ASC Topic 326, Financial Instruments—Credit Losses, which replaces the existing incurred loss model and is applicable to financial assets measured at amortized cost, including trade receivables and certain other financial assets that have the contractual right to receive cash.

ASC Topic 326 is effective for annual and interim reporting periods beginning after December 15, 2019.

The guidance must be adopted using a modified retrospective transition.

The Company adopted ASC Topic 326 as of January 1, 2020, which did not result in any cumulative effect adjustment to the opening balance of accumulated deficit in the period of adoption.

Recently Issued Accounting Pronouncements

The Company has considered the applicability of recently issued accounting pronouncements by the Financial Accounting Standards Board and have determined that they are not applicable or are not expected to have a material impact on our consolidated financial statements.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In November 2023, the FASB issued ASU 2023-07 which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

This ASU is effective for annual periods beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024.

Early adoption is permitted, including adoption in interim periods.

An entity should adopt the guidance as of the beginning of the earliest period presented.

The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt.

In December 2023, the FASB issued ASU 2023-09 which expands annual disclosure requirements for income taxes, primarily through disclosure about disaggregated information about an entity's effective tax rate reconciliation and information on income taxes paid.

This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The guidance will be applied on a prospective basis with the option to adopt the guidance retrospectively.

The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt.

NOTE 3— REVENUE

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The contract asset recorded within prepaid and other current assets on the consolidated balance sheets related to estimated variable consideration was $ 13.7 million and $ 12.2 million on December 31, 2023 and 2022, respectively.

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

As the contract liability was in the Ovation business that was closed during 2023, there is no contract liability at December 31, 2023.

During 2023, the Company recognized revenue of $ 0.9 million that was included in the contract liability balance at December 31, 2022.

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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 of $ 0.5 million, $ 0.7 million and $ 0.3 million in 2022, 2021 and 2020, respectively.

The Company recognizes increases or decreases to such revenue from prior periods.

The Company recognized an immaterial increase to such revenue from prior periods in 2023, and increases to such revenue from prior periods of $ 0.5 million and $ 0.7 million in 2022 and 2021, respectively.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4— CASH AND RESTRICTED CASH

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Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 112,056 $ 298,969

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5— PROPERTY AND EQUIPMENT

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Furniture and other equipment 8,853 9,635

Aircraft and automobile 2,598 2,621

Aircraft 2,598 2,598

Projects in progress 3,934 4,292

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Capitalized software development depreciation expense was $ 13.4 million, $ 14.1 million and $ 13.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Long-lived assets located outside the United States, the Company's country of domicile, were immaterial at December 31, 2022 and $ 0.1 million at December 31, 2021.

See Note 9—Assets and Liabilities Held for Sale for property and equipment classified as held for sale during 2022.

Long-lived assets located outside the United States, the Company's country of domicile, were immaterial at December 31, 2023 and December 31, 2022.

NOTE 6— HOSTING ARRANGEMENTS

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Total net $ 2,401 $ 4,091 $ 2,229 $ 2,803

Amortization expense included within general and administrative expense on the consolidated statement of operations and comprehensive income (loss) associated with these capitalized implementation costs was $ 2.5 million and $ 1.1 million for the years ended December 31, 2022 and 2021, respectively.

Amortization expense included within general and administrative expense on the consolidated statement of operations and comprehensive income (loss) associated with these capitalized implementation costs was $ 3.5 million, $ 2.5 million and $ 1.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

LENDINGTREE, INC.

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Goodwill and Indefinite-Lived Intangible Assets

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

Results of the annual impairment test as of October 1, 2022 indicated that no impairment had occurred.

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 our market capitalization required a quantitative impairment test be performed.

The quantitative goodwill impairment test found that the fair value of each reporting unit exceeded its carrying amount, indicating no goodwill impairment.

The Company will monitor the recovery of the Insurance reporting unit and the Mortgage reporting unit.

The property and casualty auto insurance is experiencing challenges caused by inflation, supply chain challenges, and the rising severity and frequency of claims.

Additionally, the significant increase in mortgage interest rates have had a negative impact on the Mortgage reporting unit.

Changes in the timing of the recovery compared to current expectations could cause an impairment to the Insurance or Mortgage reporting units.

The Company's goodwill at December 31, 2023 consists of $ 59.3 million associated with the Home reporting unit, $ 166.1 million associated with the Consumer reporting unit, and $ 156.1 million associated with the Insurance reporting unit.

During the third quarter of 2023, the Company’s market capitalization declined significantly compared to the second quarter of 2023.

The closing stock price on September 29, 2023 was $ 15.50 reflecting a market capitalization below the Company's book value.

In addition, the effects of the challenging interest rate environment, low for-sale home inventories and the rise in home prices in the Home reporting unit and consumer price inflation negatively impacting carrier underwriting in the Insurance reporting unit continued to provide revenue headwinds.

Based on these factors, it was concluded that a triggering event had occurred and an interim quantitative impairment test was performed as of September 30, 2023.

Upon completing the quantitative goodwill impairment test, the Company concluded that the carrying value of the Insurance reporting unit exceeded its fair value which resulted in a goodwill impairment charge of $ 38.6 million.

The fair value of the Home and Consumer reporting units exceeded their carrying amounts, indicating no goodwill impairment.

The fair values of each reporting unit were determined using a combination of the income approach and the market approach valuation methodologies.

Intangible assets with indefinite lives relate to the Company's trademarks.

Results of the annual impairment test as of October 1, 2022 indicated that no impairment had occurred.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets with Definite Lives

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Amortization Net

Technology 4.3 years $ 87,700 $ ( 69,369 ) $ 18,331

Customer lists 13.2 years 77,300 ( 30,775 ) 46,525

Trademarks and tradenames 4.9 years 10,100 ( 8,452 ) 1,648

Website content 3.0 years 26,100 ( 25,375 ) 725

Balance at December 31, 2022 $ 87,400 $ ( 39,227 ) $ 48,173

The decrease in cost and accumulated amortization in 2022 compared to 2021 is primarily due to certain technology and website content intangible assets becoming fully amortized and written off in 2022.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During 2023 certain trademarks and tradenames and customer list intangible assets became fully amortized, reducing the cost and accumulated amortization in the table above.

Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of December 31, 2023, future amortization is estimated to be as follows (in thousands) :

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Total intangible assets with definite lives, net $ 40,478

See Note 9—Assets and Liabilities Held for Sale for intangible assets with definite lives classified as held for sale during 2022.

NOTE 8— EQUITY INVESTMENT

NOTE 8— EQUITY INVESTMENTS

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

(“EarnUp”) for $ 15.0 million.

The company is a consumer-first mortgage payment platform that intelligently automates loan payment scheduling and helps consumers better manage their money and improve their financial well-being.

EarnUp is a consumer-first mortgage payment platform that intelligently automates loan payment scheduling and helps consumers better manage their money and improve their financial well-being.

On February 28, 2020, the Company acquired an equity interest in Stash Financial, Inc.

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Stash brings together banking, investing, and financial services education into one seamless experience offering a full suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back® rewards program.

In the third quarter of 2023, the Company determined there was an impairment indicator related to its Stash investment and performed a valuation of the investment.

Based on the valuation, the Company determined the estimated fair value was below the carrying value of the investment and recorded an impairment charge of $ 113.1 million.

The Company determined the fair value by using a market approach and a DCF analysis.

Determining the fair value using a DCF analysis and a market analysis requires the exercise of significant judgments, including judgments about the appropriate discount rate, perpetual growth rates, including short-term revenue and EBITDA, the amount and timing of expected future cash flows, and the revenue exit multiple.

In the second quarter of 2023, the Company recorded an impairment charge of $ 1.4 million on one of its investment in equity securities.

These impairments are included within other income on the consolidated statement of operations and comprehensive income.

As of December 31, 2022, there had been no impairments to the acquisition cost of the equity securities.

NOTE 9— ASSETS AND LIABILITIES HELD FOR SALE

In the fourth quarter of 2022, the Company approved a plan to sell an asset group associated with the Company's Consumer segment.

The asset group was expected to be sold in 2023 to an unrelated third party and is classified, at its carrying value, as current assets held for sale and current liabilities held for sale in the consolidated balance sheet as of December 31, 2022.

In the first quarter of 2023, the third party withdrew the letter of intent to purchase the asset group held for sale.

The Company made the decision to close the Ovation credit services business.

As a result, the Company recorded asset impairment

LENDINGTREE, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The equity securities do not have a readily determinable fair value and, upon acquisition, the Company elected the measurement alternative to value its securities.

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 market events, which is included within other income on the consolidated statement of operations and comprehensive income.

As of December 31, 2022, there have been no impairments to the acquisition cost of the equity securities.

NOTE 9— ASSETS AND LIABILITIES HELD FOR SALE

In the fourth quarter of 2022, the Company approved a plan to sell an asset group associated with the Company's Consumer segment.

The asset group is expected to be sold in 2023 to an unrelated third party and is classified, at its carrying value, as current assets held for sale and current liabilities held for sale in the consolidated balance sheet as of December 31, 2022.

charges of $ 4.2 million, of which $ 2.1 million related to intangible assets, $ 1.7 million related to property and equipment, and $ 0.4 million related to an operating lease right-of-use asset.

Ovation was closed in mid-2023.

The following table presents information related to the major classes of assets and liabilities that were classified as held for sale (in thousands) :

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Total liabilities held for sale $ 2,909

NOTE 10— BUSINESS ACQUISITIONS

Changes in Contingent Consideration

In 2018, the Company acquired all of the outstanding equity interests of QuoteWizard.com, LLC, which does business under the name QuoteWizard (“QuoteWizard”).

The Company made no earnout payments related to the QuoteWizard acquisition during 2022 or 2021, and this earnout period ended October 31, 2021.

In 2020, the Company paid $ 20.2 million related to the earnout payment for the period of November 1, 2019 through October 31, 2020, which is included within cash flows from operating activities on the consolidated statement of cash flows.

In 2018, the Company acquired all of the outstanding equity interests of Ovation Credit Services, Inc., which does business under the name Ovation (“Ovation”).

The Company made no earnout payments related to the Ovation acquisition during 2022 or 2021, as this earnout was completed in 2020.

In 2020, the Company paid $ 4.4 million related to the earnout payment for the period of July 1, 2019 through June 30, 2020, of which $ 1.4 million is included within cash flows from financing activities and $ 3.0 million is included within cash flows from operating activities on the consolidated statement of cash flows.

In 2017, the Company acquired certain assets of Snap Capital LLC, which does business under the name SnapCap (“SnapCap”).

During 2020, the Company made the final earnout payments related to the achievement of certain defined earnings targets for SnapCap.

Of the total earnout payments of $ 6.0 million in 2020, $ 3.3 million is included within cash flows from financing activities and $ 2.7 million is included within cash flows from operating activities on the consolidated statement of cash flows.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in the fair value of contingent consideration is summarized as follows (in thousands) :

Year Ended December 31,

QuoteWizard $ ( 8,249 ) $ 3,980

Ovation — 1,270

Total changes in fair value of contingent consideration $ ( 8,249 ) $ 5,327

NOTE 10— ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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Total accrued expenses and other current liabilities $ 70,544 $ 75,095

See Note 9—Assets and Liabilities Held for Sale for accrued expenses and other current liabilities classified as held for sale during 2022.

NOTE 11— LEASES

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At December 31, 2022, right-of-use assets totaled $ 67.1 million and lease liabilities totaled $ 96.7 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease expense, which is included in general and administrative expense on the accompanying consolidated statements of operations and comprehensive income (loss), consists of the following (in thousands) :

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Weighted average discount rate 5.0 % 5.0 % 5.0 %

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information related to leases is as follows (in thousands) :

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Present value of lease liabilities $ 82,410

See Note 9—Assets and Liabilities Held for Sale for leases classified as held for sale during 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12— SHAREHOLDERS' EQUITY

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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 year ended December 31, 2022 because their inclusion would have been anti-dilutive.

An immaterial amount of shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the year ended December 31, 2023 because their inclusion would have been anti-dilutive.

For the year ended December 31, 2023 the weighted average shares that were anti-dilutive included options to purchase 1.2 million shares of common stock and 0.5 million restricted stock units.

For the year ended December 31, 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 0.1 million restricted stock units.

For the year ended December 31, 2022, the Company had a loss 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.

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For the year ended December 31, 2020 the weighted average shares that were anti-dilutive included options to purchase 0.2 million shares of common stock.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2022 the weighted average shares that were anti-dilutive included options to purchase 1.0 million shares of common stock and 0.4 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.

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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 excluded from the calculation of diluted loss per share for the years ended December 31, 2022 and 2020 because their inclusion would have been anti-dilutive and were excluded from diluted income per share for the year ended December 31, 2021 since the conversion price of the Notes was greater than the average market price of the Company's common stock during the period.

Approximately 1.2 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 were excluded from the calculation of diluted loss per share for the year ended December 31, 2023 because their inclusion would have been anti-dilutive.

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 excluded from the calculation of diluted loss per share for the year ended December 31, 2022 because their inclusion would have been anti-dilutive and were excluded from diluted income per share for the year ended December 31, 2021 since the conversion price of the Notes was greater than the average market price of the Company's common stock during the period.

Shares of the Company's stock associated with warrants issued by the Company in 2017 and 2020 were excluded from the calculation of diluted (loss) income per share for the years ended December 31, 2023 and 2022 because their inclusion would have been anti-dilutive and were excluded for the year ended December 31, 2021 since the strike price of the warrants was greater than the average market price of the Company's common stock during the relevant periods.

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See Note 13—Stock-Based Compensation for a full description of outstanding equity awards.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common Stock Repurchases

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 years ended December 31, 2022 and 2021, the Company purchased 379,895 and 334,253 shares, respectively, of its common stock for aggregate consideration of $ 43.0 million and $ 40.0 million, respectively.

The Company has a plan authorized for the repurchase of LendingTree's common stock.

The Company did no t purchase shares of its common stock during the year ended December 31, 2023.

At December 31, 2023, $ 96.7 million remains authorized for share repurchase.

NOTE 13— STOCK-BASED COMPENSATION

The Company currently has one active plan, the Seventh Amended and Restated LendingTree 2008 Stock Plan (the “Equity Award Plan”), under which future awards may be granted, which currently covers outstanding stock options to acquire shares of the Company's common stock, restricted stock, restricted stock with performance conditions, RSUs and RSUs with performance conditions, and provides for the future grants of these and other equity awards.

Under the Equity Award Plan, the Company is authorized to grant stock options, restricted stock, RSUs, and other equity-based awards for up to 6.7 million shares of LendingTree common stock to employees, and to non-employee consultants and directors.

The Equity Award Plan has a stated term of ten years and provides that the exercise price of stock options granted will not be less than the market price of the common stock on the grant date.

The Equity Award Plan does not specify grant dates or vesting schedules, as those determinations are delegated to the Compensation Committee of the board of directors.

The Company currently has two active plans;

the LendingTree 2023 Stock Plan (the “Equity Award Plan”) and the LendingTree 2023 Inducement Grant Plan (the "Inducement Plan"), under which future awards may be granted.

The Equity Award Plan currently covers outstanding stock options to acquire shares of the Company's common stock, restricted stock, restricted stock with performance conditions, RSUs and RSUs with performance conditions, and provides for the future grants of these and other equity awards.

Under the Equity Award Plan and the Inducement Plan, the Company is authorized to grant stock options, restricted stock, RSUs, and other equity-based awards for up to 1.6 million and 0.1 million, respectively, of LendingTree shares of common stock to employees, and, under the Equity Plan only, to non-employee consultants and directors.

The Equity Award Plan and Inducement Plan each have a stated term of ten years and provides that the exercise price of stock options granted will not be less than the market price of the common stock on the grant date.

The Equity Award Plan and Inducement Plan do not specify grant dates or vesting schedules, as those determinations are delegated to the Compensation Committee of the board of directors.

Each grant agreement reflects the vesting schedule for that particular grant, as determined by the Compensation Committee.

The Compensation Committee has the authority to modify the vesting provisions of an award.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive income (loss) (in thousands) :

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For the years ended December 31, 2023, 2022, and 2021, the Company recognized $ 7.4 million, $ 12.0 million, and $ 14.1 million, respectively, of income tax benefit, including state taxes, related to non-cash compensation.

Additionally, for the year ended December 31, 2022, the Company recognized excess tax expense of $ 5.1 million, and for the years ended December 31, 2021, and 2020, the Company recognized excess tax benefit of $ 11.7 million, and $ 2.5 million, respectively, including state taxes, in income tax expense.

Additionally, for the year ended December 31, 2023 and 2022, the Company recognized excess tax expense of $ 7.8 million and $ 5.1 million, respectively, and for the year ended December 31, 2021, the Company recognized excess tax benefit of $ 11.7 million, including state taxes, in income tax expense.

See Note 2—Significant Accounting Policies, for additional information regarding excess tax benefits and deficiencies.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

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Outstanding at December 31, 2022 805,079 $ 155.10

Granted 157,632 103.54

Exercised — —

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Upon exercise, the intrinsic value represents the pre-tax difference between the Company's closing stock price on the exercise date and the exercise price, multiplied by the number of stock options exercised.

During the year ended December 31, 2022, there were no stock options exercised.

During the years ended December 31, 2021 and 2020, the total intrinsic value of stock options that were exercised was $ 51.4 million and $ 6.8 million, respectively.

During the years ended December 31, 2023 and 2022, there were no stock options exercised.

During the year ended December 31, 2021, the total intrinsic value of stock options that were exercised was $ 51.4 million.

As there were no options exercised for the year ended December 31, 2023, no cash was received from stock option exercises.

During the year ended December 31, 2023, there were no stock options granted.

During the years ended December 31, 2022 and 2021, the Company granted stock options with a weighted average grant date fair value per share of $ 53.21 and $ 128.86 , respectively, of which the vesting periods include (a) immediately upon grant, (b) earlier of one year from grant date and the Company's annual meeting of stockholders for 2023, (c) 33 % over a period of three years from the grant date, (d) 25 % over a period of four years from the grant date, and (e) certain grants to executive officers that vest over periods of up to six years .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options, except the December 2020 grant to the Chairman and Chief Executive Officer described below, was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions.

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.

The weighted average assumptions used are as follows:

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5.00 - 6.00 years

5.00 - 6.25 years

Expected dividend (2)

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0.59 % - 1.15 %

0.33 % - 0.96 %

(1) The expected term of stock options granted was calculated using the 'Simplified Method', which utilizes the midpoint between the weighted average time of vesting and the end of the contractual term.

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(3) The expected volatility rate is based on the historical volatility of the Company's common stock.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4) The risk-free interest rate is specific to the date of grant.

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

In December 2020, the Company granted time-based stock options to its Chairman and Chief Executive Officer at a premium exercise price of $ 300 , representing an approximate 25 % premium over the closing market price of LendingTree's common stock on the date of grant.

The net after-tax shares acquired through exercise of these stock options are subject to a two-year post-exercise holding requirement.

For purposes of determining stock-based compensation expense, the grant date fair value per share of these time-based stock options was estimated using the Monte Carlo simulation model.

The key assumptions used in the valuation are as follows:

(1) An average expected term of 6.90 years based on the midpoint between the first day that the stock options are both vested and in-the-money and the end of the contractual term.

(2) A zero expected dividend rate as no dividends are expected to be paid over the contractual term of the stock options.

(3) An expected volatility rate of 52 % based on the historical volatility of the Company's common stock.

(4) A risk-free interest rate of 0.92 % based on U.S.

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

(5) An 8.8 % discount for the post-exercise holding requirement, calculated using the cost-of-carry method, the Chaffe protective put method, and the Finnerty model.

During the years ended December 31, 2023, 2022 and 2021, the total grant date fair value of options vested was $ 11.9 million, $ 9.2 million and $ 10.8 million, respectively.

LENDINGTREE, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options with Market Conditions

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Outstanding at December 31, 2022 734,685 $ 230.79

47,639 195.10

Exercised — —

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For graded-vesting stock options with market conditions, the fair value will be recognized using graded vesting expense attribution, whether or not any of the total shareholder return targets are met.

No stock options with market conditions were granted in 2021.

No stock options with market conditions were granted in 2021, 2022 or 2023.

During the year ended December 31, 2020, the Company granted stock options with a weighted-average grant date fair value per share of $ 142.54 .

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The graded-vesting stock options granted during the year ended December 31, 2020 have a vesting schedule with vesting dates of December 31, 2024, December 31, 2025 and December 31, 2026.

For purposes of determining stock-based compensation expense, the weighted-average grant date fair value per share of the stock options with a market condition was estimated using the Monte Carlo simulation model, which requires the use of various key assumptions.

The weighted-average assumptions used for single cliff-vesting stock options with a market condition are as follows:

December 31, 2020

Expected term (1)

Expected dividend (2)

Expected volatility (3)

Risk-free interest rate (4)

(1) The expected term of stock options with a market condition granted was calculated using the midpoint between the weighted average time of vesting and the end of the contractual term.

(2) For all stock options with a market condition granted during the years ended December 31, 2020, no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate.

(3) The expected volatility rate is based on the historical volatility of the Company's common stock.

(4) The risk-free interest rate is specific to the date of grant.

The risk-free interest rate is based on U.S.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In December 2020, the Company granted graded-vesting stock options with a market condition to its Chairman and Chief Executive Officer at a premium exercise price of $ 300 , representing an approximate 25 % premium over the closing market price of LendingTree's common stock on the date of grant.

The net after-tax shares acquired through exercise of these stock options are subject to a two-year post-exercise holding requirement.

The key assumptions used in the Monte Carlo simulation model to determine the grant date fair value per share of these graded-vesting stock options with a market condition are as follows:

(1) An average expected term of 7.54 years based on the midpoint between vesting and the end of the contractual term.

(2) A zero expected dividend rate as no dividends are expected to be paid over the contractual term of the stock options.

(3) An expected volatility rate of 52 % based on the historical volatility of the Company's common stock.

(4) A risk-free interest rate of 0.92 % based on U.S.

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

(5) An 8.8 % discount for the post-exercise holding requirement, calculated using the cost-of-carry method, the Chaffe protective put method, and the Finnerty model.

The single cliff-vesting stock options with a market condition granted in 2020 have a target number of shares that vest upon achieving a targeted total shareholder return performance of 81 % stock price appreciation and a maximum of 31,940 shares for achieving superior performance.

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The performance measurement period ends on March 31, 2025.

The stock options with a market condition granted in 2019 have a target number of shares that vest upon achieving a targeted total shareholder return performance of 81 % stock price appreciation and a maximum of 27,132 shares for achieving superior performance.

No shares will vest unless 41 % of the targeted performance is achieved.

The performance measurement period ends on March 31, 2023.

The performance measurement period for the stock options with market conditions granted in conjunction with the 2017 Chairman and Chief Executive Officer grants ended on September 30, 2022.

The grants had a target number of shares of 434,030 that would vest upon achieving a targeted total shareholder return performance of 110 % stock price appreciation and a maximum of 724,831 shares for achieving superior performance.

No shares would vest unless 70 % of the targeted performance is achieved.

At September 30, 2022, an additional 47,639 shares were granted to reflect the actual total shareholder return performance above the target, as reflected in the table above.

The performance measurement period for stock options with a market condition granted in 2019 ended on March 31, 2023.

The grant had a target number of shares of 16,247 that would vest upon achieving a targeted total shareholder return performance of 81 % stock price appreciation and a maximum of 27,132 shares for achieving superior performance.

No shares would vest unless 41 % of the targeted performance was achieved.

At March 31, 2022, the target number of shares expired due to the actual total shareholder return performance not meeting the 41 % of the targeted performance measure, as reflected in the table above.

For all stock options with market conditions, time-based service vesting conditions would also have to be satisfied in order for shares to become fully vested and no longer subject to forfeiture.

As of December 31, 2022, a maximum of 422,537 may be earned for achieving superior performance up to 167 % of the remaining unvested target number of shares.

As of December 31, 2022, no additional performance-based nonqualified stock options with a market condition had been earned.

No shares will vest unless 41 % of the targeted performance is achieved.

At March 31, 2023, the target number of shares expired due to the

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

actual total shareholder return performance not meeting the 41 % of the targeted performance measure, as reflected in the table above.

For all stock options with market conditions, time-based service vesting conditions would also have to be satisfied in order for shares to become fully vested and no longer subject to forfeiture.

As of December 31, 2023, a maximum of 395,404 may be earned for achieving superior performance up to 167 % of the remaining unvested target number of shares.

As of December 31, 2023, no additional performance-based nonqualified stock options with a market condition had been earned.

Restricted Stock Units

15 unchanged sentences

Nonvested at December 31, 2022 16,000 $ 83.25

Granted 16,000 83.25

Forfeited ( 16,000 ) 83.25

2 unchanged sentences

As of December 31, 2023, there was no unrecognized compensation cost related to RSUs with performance conditions.

The total fair value of RSUs with performance conditions that vested during the years ended December 31, 2021, and 2020 was $ 0.9 million and $ 2.6 million, respectively.

The total fair value of RSUs with performance conditions that vested during the year ended December 31, 2021 was $ 0.9 million.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Awards with Performance Conditions

2 unchanged sentences

The terms of this award were fixed in compensation agreements in July 2017 with a total grant date fair value of $ 21.9 million.

The performance condition was tied to the Company's operating results during the first six months of 2018, and has been met.

The total fair value of RSAs with performance conditions that vested during the years ended December 31, 2021 and 2020 was $ 4.1 million and $ 6.2 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The performance condition was tied to the Company's operating results during the first six months of 2018, and was met.

The total fair value of RSAs with performance conditions that vested during the year ended December 31, 2021 was $ 4.1 million.

Restricted Stock Awards with Market Conditions

A summary of changes in outstanding nonvested RSAs with market conditions at target is as follows:

RSAs with Market Conditions

Number of Awards Weighted Average Grant Date Fair Value

Nonvested at December 31, 2021 26,674 $ 340.25

Granted 2,927 340.25

Vested ( 29,601 ) 340.25

Forfeited — —

Nonvested at December 31, 2022 — $ —

No RSAs with market conditions were granted in 2023, 2022 or 2021.

1 unchanged sentence

The performance measurement period ended on September 30, 2022, and 29,601 shares were earned.

The performance measurement period for restricted stock awards with market conditions granted in 2018 ended on September 30, 2022.

The grant had a target number of shares of 26,674 that would vest upon achieving a targeted total shareholder return performance of 110 % stock price appreciation and a maximum of 44,545 shares for achieving superior performance.

No shares would vest unless 70 % of the targeted performance was achieved.

At September 30, 2022, an additional 2,927 were granted to reflect the actual total shareholder return performance above the target, as reflected in the table above.

As of December 31, 2022, there was no unrecognized compensation cost related to RSAs with market conditions.

The total fair value of RSAs with market conditions that vested during the year ended December 31, 2022 was $ 0.7 million.

As of December 31, 2023, there was no unrecognized compensation cost related to RSAs with market conditions.

Employee Stock Purchase Plan

15 unchanged sentences

4.76 % - 5.50 %

0.19 % - 2.51 %

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(2) No dividends are expected to be paid, resulting in a zero expected dividend rate.

3 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

NOTE 14— INCOME TAXES

3 unchanged sentences

2023 2022 2021

Current income tax expense (benefit):

Current income tax expense:

Federal $ 1,155 $ — $ 128

State 1,022 353 262

Current income tax expense (benefit) 353 390 ( 10,333 )

Deferred income tax provision (benefit):

Current income tax expense 2,177 353 390

Deferred income tax (benefit) expense:

Federal ( 3,383 ) 98,772 9,912

State ( 1,309 ) 33,894 996

Deferred income tax provision (benefit) 132,666 10,908 ( 9,628 )

Income tax expense (benefit) $ 133,019 $ 11,298 $ ( 19,961 )

Deferred income tax (benefit) expense ( 4,692 ) 132,666 10,908

Income tax (benefit) expense $ ( 2,515 ) $ 133,019 $ 11,298

A reconciliation of the income tax expense (benefit) to the amounts computed by applying the statutory federal income tax rate to income (loss) from continuing operations before income taxes is shown as follows (in thousands) :

4 unchanged sentences

Excess tax deductions on non-cash compensation 6,373 4,117 ( 9,401 )

Impact of the Coronavirus Aid, Relief, and Economic Security Act — — ( 6,104 )

Research and experimentation tax credit ( 1,512 ) ( 2,906 ) ( 3,207 )

1 unchanged sentence

Increase (decrease) in valuation allowance 17,087 139,374 595

Uncertain tax positions 405 435 458

Nondeductible meals & entertainment 267 239 99

Other, net 1,811 915 1,253

Income tax expense (benefit) $ 133,019 $ 11,298 $ ( 19,961 )

Income tax (benefit) expense $ ( 2,515 ) $ 133,019 $ 11,298

LENDINGTREE, INC.

12 unchanged sentences

Interest 21,295 30,054

Equity Investment 4,561 —

Tax credits 15,385 16,174

Other 104 1,079

Total gross deferred tax assets 181,131 192,638

10 unchanged sentences

(a) At December 31, 2023, the Company had pre-tax consolidated federal net operating losses (“NOLs”) of $ 139.0 million.

The federal NOLs no longer expire under the new TCJA.

The federal NOLs no longer expire under the Tax Cuts and Jobs Act.

The Company's NOLs will be available to offset taxable income, subject to the Internal Revenue Code Section 382 annual limitation.

3 unchanged sentences

Deferred income tax assets $ — $ —

Non-current assets of discontinued operations — 16,589

Deferred income tax liabilities ( 2,091 ) ( 6,783 )

6 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During 2022, the Company recorded tax expense of $ 139.4 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.

During 2023, the Company continued to maintain a full valuation allowance against its net deferred tax assets due to historical cumulative pre-tax losses and continued pre-tax losses.

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.

3 unchanged sentences

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.

At December 31, 2021 and 2020, the Company recorded a partial valuation allowance of $ 6.0 million and $ 5.8 million, respectively, primarily related to state net operating losses, which the Company does not expect to be able to utilize prior to expiration.

At December 31, 2023 and 2022, the Company recorded a full valuation allowance of $ 162.5 million and $ 145.4 million, respectively.

A reconciliation of the beginning and ending balances of the deferred tax valuation allowance is as follows (in thousands) :

12 unchanged sentences

Interest and, if applicable, penalties are recognized related to unrecognized tax benefits in income tax expense.

Interest and penalties on unrecognized tax benefits included in income tax expense for each of the years ended December 31, 2022, 2021 and 2020 is not required to be recorded, as there have been no tax attributes included in income tax returns filed to date to require consideration of interest expense.

Interest and penalties on unrecognized tax benefits included in income tax expense of an immaterial amount has been recognized for the tax year ended December 31, 2022.

For the years ended December 31, 2023 and 2021 interest is not currently required to be recorded, as there have been no tax attributes included in income tax returns filed for those tax periods to require consideration of interest expense.

As of December 31, 2023 and 2022, the accrual for unrecognized tax benefits, including interest, was $ 3.4 million and $ 3.3 million, respectively, which would benefit the effective tax rate if recognized.

15 unchanged sentences

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

On March 8, 2023, the Company repurchased approximately $ 190.6 million in principal amount of its 2025 Notes, through individual privately-negotiated transactions with certain holders of the 2025 Notes, for $ 156.3 million in cash plus accrued and unpaid interest of approximately $ 0.1 million.

On December 7, 2023, the Company repurchased approximately $ 100.2 million in principal amount of its 2025 Notes, through individual privately-negotiated transactions with certain holders of the 2025 Notes, for $ 81.2 million in cash plus accrued and unpaid interest of approximately $ 0.2 million.

During the year ended December 31, 2023, the Company recognized a gain on the extinguishment of debt of $ 53.3 million, a loss on the write-off of unamortized debt issuance costs of $ 3.2 million and incurred debt repayment costs of $ 1.6 million, all of which are included in interest income/expense, net in the consolidated statements of operations and comprehensive income.

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).

The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest.

The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest.

In addition, upon the occurrence of a make-whole fundamental change prior to the maturity of the 2025 Notes or if the Company issues a notice of redemption for the 2025 Notes, the Company will, in certain circumstances, increase the conversion rate by a specified number of additional shares for a holder that elects to convert the 2025 Notes in connection with such make-whole fundamental change or to convert its 2025 Notes called for redemption, as the case may be.

1 unchanged sentence

It is the intent of the Company to settle the principal amount of the 2025 Notes in cash and any conversion premium in shares of its common stock.

The 2025 Notes are the Company’s senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2025 Notes;

The 2025 Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2025 Notes;

equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated;

7 unchanged sentences

Holders of the 2025 Notes were not entitled to convert the 2025 Notes during the calendar quarter ended December 31, 2023 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, 2023, 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 March 31, 2023 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 December 31, 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.

Holders of the 2025 Notes are not entitled to convert the

LENDINGTREE, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company may not redeem the 2025 Notes prior to July 20, 2023.

2025 Notes during the calendar quarter ended March 31, 2024 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 December 31, 2023, was not greater than or equal to 130 % of the conversion price of the 2025 Notes on each applicable trading day.

The Company could not redeem the remaining 2025 Notes prior to July 20, 2023.

On or after July 20, 2023 and before the 41st 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.

13 unchanged sentences

As a result, the initial components of debt and equity were $ 455.6 million and $ 119.4 million, respectively.

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.

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 were being amortized to interest expense over the term of the debt and $ 3.1 million were allocated to the equity component.

During 2023, the Company recorded interest expense on the 2025 Notes of $ 4.3 million which consisted of $ 2.1 million associated with the 0.50 % coupon rate and $ 2.2 million associated with the amortization of the debt issuance costs.

During 2021, the Company recorded interest expense on the 2025 Notes of $ 27.2 million which consisted of $ 2.9 million associated with the 0.50 % coupon rate, $ 22.1 million associated with the accretion of the debt discount, and $ 2.2 million associated with the amortization of the debt issuance costs.

During 2022, the Company recorded interest expense on the 2025 Notes of $ 5.9 million which consisted of $ 2.9 million associated with the 0.50 % coupon rate and $ 3.0 million associated with the amortization of the debt issuance costs.

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 December 31, 2022 consolidated balance sheet, are as follows (in thousands) :

A summary of the gross carrying amount, 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 December 31, 2023 consolidated balance sheet, are as follows (in thousands) :

2023 December 31,

Gross carrying amount $ 284,188 $ 575,000

Unamortized debt discount — 87,994

Debt issuance costs 2,321 7,734

15 unchanged sentences

Of the consideration paid, $ 126.0 million was allocated to the extinguishment of the liability component of the notes, while the remaining $ 107.9 million was allocated to the reacquisition of the equity component and recorded as a reduction to additional paid-in capital in the consolidated statement of shareholders’ equity.

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.

The Company recognized a loss on debt extinguishment of $ 7.8 million in the third quarter of 2020.

During 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.

During 2021, the Company recorded interest expense on the 2022 Notes of $ 9.5 million which consisted of $ 1.1 million associated with the 0.625 % coupon rate, $ 7.5 million associated with the accretion of the debt discount, and $ 0.9 million associated with the amortization of the debt issuance costs.

During 2020, the Company recorded interest expense on the 2022 Notes of $ 13.0 million which consisted of $ 1.5 million associated with the 0.625 % coupon rate, $ 10.3 million associated with the accretion of the debt discount, and $ 1.2 million associated with the amortization of the debt issuance costs.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, all of which was recorded as a current liability in the December 31, 2021 consolidated balance sheet, are as follows (in thousands) :

Gross carrying amount $ 169,659

Unamortized debt discount 3,260

Debt issuance costs 391

Net carrying amount $ 166,008

Convertible Note Hedge and Warrant Transactions

3 unchanged sentences

On July 24, 2020, the Company paid $ 124.2 million to the counterparties for the 2020 Hedge transactions.

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 cover 1.2 million shares of the Company’s common stock, the same number of shares initially underlying the 2025

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

3 unchanged sentences

If the market price per share of the common stock, as measured under the terms of the 2020 Warrants, exceeds the strike price of the 2020 Warrants, the 2020 Warrants could have a dilutive effect, unless the Company elects, subject to certain conditions, to settle the 2020 Warrants in cash.

In connection with the December 7, 2023 and the March 8, 2023 repurchases of the 2025 Notes noted above, the Company entered into agreements with the counterparties for the 2020 Hedge and 2020 Warrants transactions to terminate a portion of these call spread transactions effective December 7, 2023 and March 8, 2023, respectively, in notional amounts corresponding to the principal amount of the 2025 Notes repurchased.

Subsequent to such terminations, the outstanding portion of the 2020 Hedge covers 0.6 million shares of the Company's common stock and the 2020 Warrants to acquire 0.6 million shares of the Company's common stock remain outstanding.

The 2020 Hedge and 2020 Warrants transactions are indexed to, and potentially settled in, the Company's common stock and the net cost of $ 63.0 million has been recorded as a reduction to additional paid-in capital in the consolidated statement of shareholders’ equity.

7 unchanged sentences

The warrants expired on December 12, 2022.

To the extent of the repurchases of the 2022 Notes noted above, the Company entered into agreements with the counterparties for the 2017 Hedge and 2017 Warrants transactions to terminate a portion of these call spread transactions

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

effective July 24, 2020 in notional amounts corresponding to the principal amount of the 2022 Notes repurchased.

The Company received $ 109.9 million and paid $ 94.3 million as a result of terminating such portions of the 2017 Hedge and 2017 Warrants, respectively.

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

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 December 31, 2022, the Company had $ 248.8 million borrowings outstanding under the Term Loan Facility bearing interest at the LIBO option rate of 8.14 % 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 December 31, 2023, the Company had $ 246.9 million borrowings outstanding under the Term Loan Facility bearing interest at the SOFR option rate of 9.21 % and had no borrowings under the Revolving Facility.

As of December 31, 2022, the Company had $ 248.8 million borrowings outstanding under the Term Loan Facility and had no borrowings under the Revolving Facility.

As of December 31, 2023, borrowings of $ 3.1 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.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 SOFR rate loans, subject to customary terms and conditions.

Under certain conditions, the Company will be permitted to add one or more term loans and/or increase revolving or term loan commitments under the Credit Facility by an amount set at the greater of $ 116.0 million and 100% of consolidated EBITDA (subject to adjustments for certain prepayments), plus an unlimited amount provided that the first lien net leverage ratio does not exceed 3.00 to 1.00.

2 unchanged sentences

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

• a base rate generally defined as the sum of (i) the greater of (a) the prime rate of Truist Bank, (b) the federal funds effective rate plus 0.5 % and (c) the LIBO rate (defined below) on a daily basis applicable for an interest period of one month plus 1.0 % and (ii) an applicable percentage of 1.25 % to 1.75 % for loans under the Revolving Facility and 2.75 % to 3.00 % for loans under the Term Loan Facility, in each case, based on a first lien net leverage ratio;

• a LIBO rate generally defined as the sum of (i) the rate for Eurodollar dollar 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 % and 4.00 % for loans under the Term Loan Facility, in each case, based on a first lien net leverage ratio.

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.

• a base rate generally defined as the sum of (i) the greater of (a) the prime rate of Truist Bank, (b) the federal funds effective rate plus 0.5 % and (c) the Benchmark rate (defined below) on a daily basis applicable for an interest period of one month plus 1.0 % and (ii) an applicable percentage of 1.25 % to 1.75 % for loans under the Revolving Facility and 2.75 % to 3.00 % for loans under the Term Loan Facility, in each case, based on a first lien net leverage ratio;

• a Benchmark rate generally defined as the sum of (i) (a) Term SOFR and (b) the related Benchmark replacement adjustment and (ii) an applicable percentage of 2.25 % to 2.75 % for loans under the Revolving Facility and 3.75 % and 4.00 % for loans under the Term Loan Facility, in each case, based on a first lien net leverage ratio.

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 SOFR rate loans.

The Credit Facility contains a restrictive financial covenant, which is set at a first lien net leverage ratio of 2.50 to 1.00, except that this may increase by 0.50 :1.00 for the four fiscal quarters following a material acquisition.

4 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.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company was in compliance with all covenants at December 31, 2023.

5 unchanged sentences

The letter of credit fronting fee is 0 .125 % per annum on the face amount of each letter of credit.

With respect to the Term Loan Facility, the Company is required to pay an unused commitment fee quarterly in arrears on the difference between committed amounts and amounts actually borrowed under the Term Loan Facility equal to an applicable LIBO rate plus an applicable percentage of 3.75 % to 4.00 % per annum based on a first lien net leverage ratio.

With respect to the Term Loan Facility, the Company is required to pay an unused commitment fee quarterly in arrears on the difference between committed amounts and amounts actually borrowed under the Term Loan Facility equal to an applicable SOFR rate plus an applicable percentage of 3.75 % to 4.00 % per annum based on a first lien net leverage ratio.

The Company recognized $ 1.1 million in additional interest expense in the third quarter of 2021 due to the write-off of certain unamortized debt issuance costs associated with the Amended Revolving Credit Facility.

In addition to the remaining unamortized debt issuance costs associated with the Amended Revolving Credit Facility, debt issuance costs of $ 2.8 million related to the Revolving Facility are being amortized to interest expense over the life of the Revolving Facility.

In addition to the remaining unamortized debt issuance costs associated with the Amended Revolving Credit Facility, debt issuance costs of $ 2.8 million

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

related to the Revolving Facility are being amortized to interest expense over the life of the Revolving Facility.

Debt issuance costs of $ 3.5 million related to the Term Loan Facility and the original issue discount $ 2.5 million paid on the undrawn term loan facility were amortized to interest expense over the delayed draw access period.

1 unchanged sentence

During 2023, the Company recorded interest expense related to its Revolving Facility of $ 1.5 million which consisted of $ 0.6 million in unused commitment fees and $ 0.9 million associated with the amortization of the debt issuance costs.

During 2023, the Company recorded interest expense related to the Term Loan Facility of $ 22.2 million associated with borrowings bearing interest at the LIBO rate during the first six months of 2023 and the SOFR option rate during the last six months of 2023.

During 2022, the Company recorded interest expense related to its Revolving Facility of $ 1.5 million which consisted of $ 0.6 million in unused commitment fees and $ 0.9 million associated with the amortization of the debt issuance costs.

During 2022, the Company recorded interest expense related to the Term Loan Facility of $ 18.2 million which consisted of $ 9.6 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.

During 2021, the Company recorded interest expense related to its revolving credit facilities of $ 3.4 million which consisted of $ 2.0 million in unused commitment fees and $ 1.4 million associated with the amortization of the debt issuance costs.

During 2021, the Company recorded interest expense related to the Term Loan Facility of $ 5.9 million which consisted of $ 3.5 million in unused commitment fees, $ 1.4 million associated with the amortization of the debt issuance costs, and $ 1.0 million associated with the amortization of the original issue discount.

During 2020, the Company recorded interest expense related to the Amended Revolving Credit Facility of $ 4.3 million which consisted of $ 1.3 million associated with borrowings bearing interest at the base rate and the LIBO rate, $ 1.7 million in unused commitment fees, and $ 1.3 million associated with the amortization of the debt issuance costs.

During 2021, the Company recorded interest expense related to its revolving facilities of $ 3.4 million which consisted of $ 2.0 million in unused commitment fees and $ 1.4 million associated with the amortization of the debt issuance costs.

NOTE 16— COMMITMENTS

7 unchanged sentences

Mortgage brokering activity is generally defined to include, among other things, receiving valuable consideration for offering assistance to a buyer in obtaining a residential mortgage or soliciting financial and mortgage information from the public and providing that information to an originator of residential mortgage loans.

All states require that the Company maintain surety bonds for potential claims.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Commitments

The Company has certain other commitments through 2023, where the aggregate commitments for these contracts range from $ 0.2 million to $ 2.4 million throughout the remaining life of the contract.

The Company maintains surety bonds in all states requiring them in the event of a claim.

NOTE 17— CONTINGENCIES

2 unchanged sentences

With respect to the matters disclosed in this Note 17, 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 December 31, 2022 and 2021, the Company had litigation settlement accruals of $ 0.1 million in continuing operations.

As of December 31, 2023 and 2022, the Company had litigation settlement accruals of $ 0.6 million and $ 0.1 million, respectively.

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.

1 unchanged sentence

NOTE 18— FAIR VALUE MEASUREMENTS

Other than the convertible notes and warrants, as well as the equity interest in Stash and EarnUp, the carrying amounts of the Company's financial instruments are equal to fair value at December 31, 2022.

See Note 16—Debt for additional information on the convertible notes and warrants, and see Note 8—Equity Investment in the notes to the consolidated financial statements included elsewhere in this report for additional information on the equity interest in Stash and EarnUp.

Other than the convertible notes and warrants, and the equity investments, the carrying amounts of the Company's financial instruments are equal to fair value at December 31, 2023.

See Note 15—Debt for additional information on the convertible

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

notes and warrants, and see Note 8—Equity Investments in the notes to the consolidated financial statements included elsewhere in this report for additional information on the equity investments.

Contingent consideration payments related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs.

There were no changes in the fair value of the Company's Level 3 liabilities during the year ended December 31, 2022 and the changes for the years ended December 31, 2021 and 2020 are as follows (in thousands) :

There were no changes in the fair value of the Company's Level 3 liabilities during the years ended December 31, 2023 and 2022 and the changes for the year ended December 31, 2021 are as follows (in thousands) :

Year Ended December 31,

4 unchanged sentences

Purchases, sales and settlements:

Additions — —

Payments — ( 30,542 )

Contingent consideration, end of period $ —

There was no contingent consideration liability at December 31, 2023 or 2022 because the final earnout period for the QuoteWizard acquisition ended on October 31, 2021.

The contingent consideration liability at December 31, 2020 consisted of the estimated fair value of the remaining earnout payment for the QuoteWizard acquisition.

NOTE 19— RELATED PARTY TRANSACTIONS

3 unchanged sentences

Officers of the Company serve as officers of the LendingTree Foundation.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20— BENEFIT PLANS

15 unchanged sentences

Litigation settlements and contingencies and legal fees associated with related bankruptcy and legal proceedings against the Company are included in discontinued operations in the accompanying consolidated financial statements.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Home Loan Center, Inc.

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During its bankruptcy, HLC indicated that it believed that it had claims against HLC’s sole shareholder, LendingTree, LLC, and certain of its officers and directors, relating to the declaration of a dividend by HLC in January 2016 of $ 40.0 million.

During the second quarter of 2020, LendingTree, LLC and HLC entered into a settlement agreement in the amount of $ 36.0 million for the release of any and all claims against the Company defendants by HLC, including the dividend claim.

In 2020, LendingTree, LLC and HLC entered into a settlement agreement in the amount of $ 36.0 million for the release of any and all claims against the Company defendants by HLC, including the dividend claim.

The Bankruptcy Court approved the settlement on July 16, 2020.

3 unchanged sentences

After all distributions to creditors were made and HLC’s Chapter 7 bankruptcy estate was fully administered, the HLC bankruptcy case was closed on July 14, 2021.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Litigation Related to Discontinued Operations

9 unchanged sentences

It filed substantially similar complaints against approximately 80 of the loan originators from whom RFC had purchased loans, including HLC.

Judgment was entered against HLC, see Home Loan Center, Inc.

In 2019, the U.S.

District Court of Minnesota entered a judgment against HLC.

S ee Home Loan Center, Inc.

Bankruptcy Filing above.

15 unchanged sentences

(“LBHI”) filed an Adversary Complaint against HLC and approximately 149 other defendants (the “Complaint”).

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

HLC’s filing under the Bankruptcy Code discussed above in Home Loan Center, Inc.

8 unchanged sentences

Year Ended December 31,

2022 2021 2020

Revenue $ — $ — $ —

Other operating expenses ( 4,719 )

7 unchanged sentences

Home, Consumer, and Insurance.

Characteristics which were relied upon in making the determination of the

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reportable segments include the nature of the products, the organization's internal structure, and the information that is regularly reviewed by the CODM for the purpose of assessing performance and allocating resources.

Characteristics which were relied upon in making the determination of the reportable segments include the nature of the products, the organization's internal structure, and the information that is regularly reviewed by the CODM for the purpose of assessing performance and allocating resources.

The Home segment includes the following products:

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

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

We ceased offering reverse mortgage loans in the fourth quarter of 2022.

1 unchanged sentence

credit cards, personal loans, small business loans, student loans, auto loans, deposit accounts, and other credit products such as credit repair and debt settlement.

The credit repair business was closed at the end of the second quarter of 2023.

The Insurance segment consists of insurance quote products and sales of insurance policies in our agency businesses.

Revenue from the resale of online advertising space to third parties, and the related variable marketing and advertising expenses, are included within the Other category.

The following tables are a reconciliation of segment profit, which is the Company's primary segment profitability measure, to income before income taxes and discontinued operations.

1 unchanged sentence

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

For the Other category, segment cost of revenue and marketing expense also includes the portion of cost of revenue attributable to costs paid for advertising re-sold to third parties.

The Company ceased reselling online advertising space during the first quarter of 2020.

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31, 2023

10 unchanged sentences

Amortization of intangibles 7,694

Goodwill impairment 38,600

Restructuring and severance 10,118

1 unchanged sentence

Operating loss ( 40,611 )

Interest expense, net ( 26,014 )

Other income 3,843

Loss before income taxes and discontinued operations $ ( 54,927 )

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Interest income, net 21,685

Other expense ( 105,993 )

Loss before income taxes $ ( 124,919 )

Year Ended December 31, 2022

3 unchanged sentences

Segment cost of revenue and marketing expense 186,299 221,531 207,239 982 616,051

Segment profit 153,352 143,497 113,464 53 410,366

Segment profit (loss) 103,084 174,578 91,834 ( 555 ) 368,941

Cost of revenue 57,769

4 unchanged sentences

Amortization of intangibles 25,306

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

Restructuring and severance 4,428

Litigation settlements and contingencies ( 18 )

Operating income 8,031

Operating loss ( 32,762 )

Interest expense, net ( 26,014 )

Other income 3,843

Income before income taxes and discontinued operations $ 84,436

Loss before income taxes $ ( 54,933 )

LENDINGTREE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31, 2021

3 unchanged sentences

Segment cost of revenue and marketing expense 288,386 186,448 212,689 610 688,133

Segment profit (loss) 132,123 106,890 131,142 ( 682 ) 369,473

Cost of revenue (exclusive of cost of advertising re-sold to third parties included above) 53,408

Segment profit 153,352 143,497 113,464 53 410,366

Cost of revenue 57,297

Brand and other marketing expense 85,857

6 unchanged sentences

Litigation settlements and contingencies 392

Operating loss ( 6,603 )

Operating income 8,031

Interest expense, net ( 46,867 )

Other expense 376

Loss before income taxes and discontinued operations $ ( 42,527 )

Other income 123,272

Income before income taxes and discontinued operations $ 84,436

The CODM does not review information on segment assets and as such, no segment asset information is reported herein.

3 unchanged sentences

NOTE 23— RESTRUCTURING ACTIVITIES

During September 2023, the Company initiated workforce reductions of 14 employees.

The Company incurred approximately $ 0.9 million in severance charges in connection with the workforce reductions, consisting of cash expenditures for employee separation costs of approximately $ 0.7 million and non-cash charges for the accelerated vesting of certain equity awards of approximately $ 0.2 million.

The cash payments are expected to be substantially completed by the third quarter of 2024.

On April 6, 2023, the Company made the decision to close the Ovation credit services business ( the "Ovation Closure".) The Ovation Closure includes the elimination of approximately 197 employees, or 18 %, of the Company's current workforce.

As a result of the Ovation Closure, the Company incurred $ 2.1 million in restructuring expense in connection with cash expenditures for employee separation costs.

The Ovation Closure, including cash payments, is expected to be completed by the first quarter of 2024.

On March 24, 2023, the Company committed to a workforce reduction plan (the “Reduction Plan”), to reduce operating costs.

The Reduction Plan includes the elimination of approximately 162 employees, or 13 %, of the Company’s current workforce.

As a result of the Reduction Plan, the Company incurred approximately $ 5.3 million in severance charges in connection with the workforce reduction, consisting of cash expenditures for employee separation costs of approximately $ 4.3 million and non-cash charges for the accelerated vesting of certain equity awards of approximately $ 1.0 million.

The Reduction Plan, including cash payments, is expected to be substantially completed by the end of the second quarter of 2024.

During 2022, the Company completed workforce reductions in each of the first, second, and fourth quarters of approximately 75 employees, 25 employees, and 50 employees, respectively.

The Company incurred total expense of $ 4.4 million consisting of employee separation costs of $ 3.3 million and non-cash compensation expense of $ 1.1 million due to the accelerated vesting of certain equity awards.

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

The Company incurred total expense in 2022 of $ 4.4 million consisting of employee separation costs of $ 3.3 million and non-cash compensation expense of $ 1.1 million due to the accelerated vesting of certain equity awards.

All employee separation costs for 2022 actions were paid by the end of 2023.

Accrued Balance at December 31, 2022

Income Statement Impact Payments Non-Cash Accrued Balance at December 31, 2023

Q3 2023 action

Employee separation payments — 683 ( 429 ) — 254

Non-cash compensation — 205 — ( 205 ) —

Q2 2023 action

Employee separation payments — 2,063 ( 2,029 ) — 34

Q1 2023 action

Employee separation payments — 4,253 ( 3,832 ) — 421

Non-cash compensation — 1,066 — ( 1,066 ) —

Employee separation payments 304 13 ( 317 ) — —

$ 304 $ 8,283 $ ( 6,607 ) $ ( 1,271 ) $ 709

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

5 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-K

Item 8. Financial Statements and Supplementary Data