UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 20192020
Oror 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                 
Commission File No. 001-34063 
 
 
ltlogogradient.jpg
LendingTree, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 26-2414818
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
 11115 Rushmore Drive, Charlotte, North Carolina 28277
(Address of principal executive offices)(Zip Code)
(704541-5351
(Registrant's telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value per share TREE The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes    No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
  Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No   
As of July 19, 2019,29, 2020, there were 12,988,99713,115,157 shares of the registrant's common stock, par value $.01 per share, outstanding, excluding treasury shares.
 





TABLE OF CONTENTS


  
Page
Number
   
   

2


PART I—FINANCIAL INFORMATION


Item 1.  Financial Statements 

LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited) 
Three Months Ended 
 June 30,

Six Months Ended 
 June 30,
Three Months Ended
June 30,

Six Months Ended
June 30,
2019
2018
2019
20182020
2019
2020
2019
(in thousands, except per share amounts)(in thousands, except per share amounts)
Revenue$278,421

$184,101

$540,811

$365,136
$184,326

$278,421

$467,410

$540,811
Costs and expenses: 

 

 

 
 

 

 

 
Cost of revenue (exclusive of depreciation and amortization shown separately below)
16,310

6,043

33,980

11,739
13,464

16,310

27,716

33,980
Selling and marketing expense191,629

123,946

366,520

249,990
113,921

191,629

309,459

366,520
General and administrative expense27,951

24,759

59,068

47,573
28,489

27,951

60,571

59,068
Product development10,175

5,967

20,341

12,227
10,812

10,175

21,775

20,341
Depreciation2,559

1,633

5,041

3,304
3,550

2,559

6,928

5,041
Amortization of intangibles14,280

3,964

27,707

7,927
13,756

14,280

27,513

27,707
Change in fair value of contingent consideration2,790

(167)
17,382

(908)9,175

2,790

1,053

17,382
Severance403

3

457

3
32

403

190

457
Litigation settlements and contingencies8

(170)
(199)
(192)(1,325)
8

(996)
(199)
Total costs and expenses266,105

165,978

530,297

331,663
191,874

266,105

454,209

530,297
Operating income12,316

18,123

10,514

33,473
Operating (loss) income(7,548)
12,316

13,201

10,514
Other (expense) income, net: 

 

 

 
 

 

 

 
Interest expense, net(5,095)
(2,924)
(10,563)
(5,912)(4,955)
(5,095)
(9,789)
(10,563)
Other income (expense)71

(71)
139
 (37)
Income before income taxes7,292

15,128

90

27,524
Other income7

71

7
 139
(Loss) income before income taxes(12,496)
7,292

3,419

90
Income tax benefit5,689

29,721

13,441

53,182
3,880

5,689

6,941

13,441
Net income from continuing operations12,981

44,849

13,531

80,706
Net (loss) income from continuing operations(8,616)
12,981

10,360

13,531
Loss from discontinued operations, net of tax(763)
(2,302)
(1,825)
(6,635)(21,141)
(763)
(25,716)
(1,825)
Net income and comprehensive income$12,218

$42,547

$11,706

$74,071
Net (loss) income and comprehensive (loss) income$(29,757)
$12,218

$(15,356)
$11,706

Weighted average shares outstanding:





















Basic12,805

12,416

12,762

12,254
12,984

12,805

12,971

12,762
Diluted14,908

14,147

14,622

14,527
12,984

14,908

13,954

14,622
Income per share from continuing operations: 

 

 

 
(Loss) income per share from continuing operations: 

 

 

 
Basic$1.01

$3.61

$1.06

$6.59
$(0.66)
$1.01

$0.80

$1.06
Diluted$0.87

$3.17

$0.93

$5.56
$(0.66)
$0.87

$0.74

$0.93
Loss per share from discontinued operations: 

 

 

 
 

 

 

 
Basic$(0.06)
$(0.19)
$(0.14)
$(0.54)$(1.63)
$(0.06)
$(1.98)
$(0.14)
Diluted$(0.05)
$(0.16)
$(0.12)
$(0.46)$(1.63)
$(0.05)
$(1.84)
$(0.12)
Net income per share: 

 

 

 
Net (loss) income per share: 

 

 

 
Basic$0.95

$3.43

$0.92

$6.04
$(2.29)
$0.95

$(1.18)
$0.92
Diluted$0.82

$3.01

$0.80

$5.10
$(2.29)
$0.82

$(1.10)
$0.80
 
The accompanying notes to consolidated financial statements are an integral part of these statements.

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Table of Contents

LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 (Unaudited) 
June 30,
2019

December 31,
2018
June 30,
2020

December 31,
2019
(in thousands, except par value and share amounts)(in thousands, except par value and share amounts)
ASSETS: 

 
 

 
Cash and cash equivalents$51,332

$105,102
$101,764

$60,243
Restricted cash and cash equivalents58

56
94

96
Accounts receivable (net of allowance of $1,676 and $1,143, respectively)139,778

91,072
Accounts receivable (net of allowance of $1,756 and $1,466, respectively)77,037

113,487
Prepaid and other current assets12,440

16,428
25,654

15,516
Assets held for sale (Note 6)
 21,328
Current assets of discontinued operations (Note 17)2,227

185
Current assets of discontinued operations84

84
Total current assets205,835

234,171
204,633

189,426
Property and equipment (net of accumulated depreciation of $14,449 and $13,887 respectively)28,874

23,175
Property and equipment (net of accumulated depreciation of $20,971 and $17,979, respectively)34,735

31,363
Operating lease right-of-use assets87,892
 25,519
Goodwill419,984

348,347
420,139

420,139
Intangible assets, net209,592

205,699
154,067

181,580
Deferred income tax assets93,014

79,289
84,160

87,664
Equity investment (Note 7)80,000
 
Other non-current assets20,033

2,168
5,192

4,330
Non-current assets of discontinued operations3,266

3,266
16,759

7,948
Total assets$980,598

$896,115
$1,087,577

$947,969






   
LIABILITIES: 

 
 

 
Revolving credit facility$115,000
 $125,000
$130,000
 $75,000
Accounts payable, trade17,447

15,074
8,792

2,873
Accrued expenses and other current liabilities130,323

93,190
88,569

112,755
Current contingent consideration29,548

11,080
19,029

9,028
Current liabilities of discontinued operations (Note 17)15,809

17,609
Current liabilities of discontinued operations63,006

31,050
Total current liabilities308,127

261,953
309,396

230,706
Long-term debt257,582
 250,943
271,378
 264,391
Operating lease liabilities86,649
 21,358
Non-current contingent consideration20,671

27,757
9,488

24,436
Deferred income tax liabilities711
 894
Other non-current liabilities19,620
 8,360
4,689
 4,752
Total liabilities606,711

549,907
681,600

545,643
Commitments and contingencies (Note 14)





Commitments and contingencies (Note 15)





SHAREHOLDERS' EQUITY: 

 
 

 
Preferred stock $.01 par value; 5,000,000 shares authorized; none issued or outstanding





Common stock $.01 par value; 50,000,000 shares authorized; 15,603,806 and 15,428,351 shares issued, respectively, and 12,967,718 and 12,809,764 shares outstanding, respectively156

154
Common stock $.01 par value; 50,000,000 shares authorized; 15,730,643 and 15,676,819 shares issued, respectively, and 13,089,325 and 13,035,501 shares outstanding, respectively157

157
Additional paid-in capital1,154,174

1,134,227
1,196,990

1,177,984
Accumulated deficit(598,776)
(610,482)(608,009)
(592,654)
Treasury stock; 2,636,088 and 2,618,587 shares, respectively(181,667)
(177,691)
Treasury stock; 2,641,318 shares(183,161)
(183,161)
Total shareholders' equity373,887

346,208
405,977

402,326
Total liabilities and shareholders' equity$980,598

$896,115
$1,087,577

$947,969
 
The accompanying notes to consolidated financial statements are an integral part of these statements.

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Table of Contents

LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 (Unaudited)
 
   Common Stock     Treasury Stock
 Total 
Number
of Shares
 Amount 
Additional
Paid-in
Capital
 
Accumulated
Deficit
 
Number
of Shares
 Amount
 (in thousands)
Balance as of December 31, 2018$346,208
 15,428
 $154
 $1,134,227
 $(610,482) 2,618
 $(177,691)
Net loss and comprehensive loss(512) 
 
 
 (512) 
 
Non-cash compensation14,053
 
 
 14,053
 
 
 
Purchase of treasury stock(3,976) 
 
 
 
 18
 (3,976)
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(3,585) 87
 1
 (3,586) 
 
 
Balance as of March 31, 2019$352,188
 15,515
 $155
 $1,144,694
 $(610,994) 2,636
 $(181,667)
Net income and comprehensive income12,218
 
 
 
 12,218
 
 
Non-cash compensation15,982
 
 
 15,982
 
 
 
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(6,501) 89
 1
 (6,502) 
 
 
Balance as of June 30, 2019$373,887
 15,604
 $156
 $1,154,174
 $(598,776) 2,636
 $(181,667)

   Common Stock     Treasury Stock
 Total 
Number
of Shares
 Amount 
Additional
Paid-in
Capital
 
Accumulated
Deficit
 
Number
of Shares
 Amount
 (in thousands)
Balance as of December 31, 2019$402,326
 15,677
 $157
 $1,177,984
 $(592,654) 2,641
 $(183,161)
Net income and comprehensive income14,401
 
 
 
 14,401
 
 
Non-cash compensation11,917
 
 
 11,917
 
 
 
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(5,087) 27
 
 (5,087) 
 
 
Other
 
 
 (1) 1
 
 
Balance as of March 31, 2020$423,557
 15,704
 $157
 $1,184,813
 $(578,252) 2,641
 $(183,161)
Net loss and comprehensive loss(29,757) 
 
 
 (29,757) 
 
Non-cash compensation13,158
 
 
 13,158
 
 
 
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(981) 27
 
 (981) 
 
 
Balance as of June 30, 2020$405,977
 15,731
 $157
 $1,196,990
 $(608,009) 2,641
 $(183,161)

  Common Stock     Treasury Stock   Common Stock     Treasury Stock
Total 
Number
of Shares
 Amount 
Additional
Paid-in
Capital
 
Accumulated
Deficit
 
Number
of Shares
 AmountNoncontrolling InterestTotal 
Number
of Shares
 Amount 
Additional
Paid-in
Capital
 
Accumulated
Deficit
 
Number
of Shares
 Amount
(in thousands) (in thousands)
Balance as of December 31, 2017$294,874
 14,218
 $142
 $1,087,582
 $(708,354) 2,239
 $(85,085)$589
Net income and comprehensive income31,524
 
 
 
 31,524
 
 

Balance as of December 31, 2018$346,208
 15,428
 $154
 $1,134,227
 $(610,482) 2,618
 $(177,691)
Net loss and comprehensive loss(512) 
 
 
 (512) 
 
Non-cash compensation11,109
 
 
 11,109
 
 
 

14,053
 
 
 14,053
 
 
 
Purchase of treasury stock(11,000) 
 
 
 
 30
 (11,000)
(3,976) 
 
 
 
 18
 (3,976)
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes2,057
 473
 5
 2,052
 
 
 

(3,585) 87
 1
 (3,586) 
 
 
Cumulative effect adjustment due to ASU 2014-091,373
 
 
 
 1,373
 
 

Noncontrolling interest(34) 
 
 
 
 
 
(34)
Balance as of March 31, 2018$329,903
 14,691
 $147
 $1,100,743
 $(675,457) 2,269
 $(96,085)$555
Balance as of March 31, 2019$352,188
 15,515
 $155
 $1,144,694
 $(610,994) 2,636
 $(181,667)
Net income and comprehensive income42,547
 
 
 
 42,547
 
 

12,218
 
 
 
 12,218
 
 
Non-cash compensation11,178
 
 
 11,178
 
 
 

15,982
 
 
 15,982
 
 
 
Purchase of treasury stock(35,003) 
 
 
 
 127
 (35,003)
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes(1,225) 447
 4
 (1,229) 
 
 

(6,501) 89
 1
 (6,502) 
 
 
Issuance of 0.625% Convertible Senior Notes, net(4) 
 
 (4) 
 
 

Noncontrolling interest32
 
 
 
 
 
 
32
Balance as of June 30, 2018$347,428
 15,138
 $151
 $1,110,688
 $(632,910) 2,396
 $(131,088)$587
Balance as of June 30, 2019$373,887
 15,604
 $156
 $1,154,174
 $(598,776) 2,636
 $(181,667)
 
The accompanying notes to consolidated financial statements are an integral part of these statements.

5

Table of Contents

LENDINGTREE, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
Six Months Ended June 30,Six Months Ended
June 30,
2019 20182020 2019
(in thousands)(in thousands)
Cash flows from operating activities attributable to continuing operations: 
  
 
  
Net income and comprehensive income$11,706
 $74,071
Net (loss) income and comprehensive (loss) income$(15,356) $11,706
Less: Loss from discontinued operations, net of tax1,825
 6,635
25,716
 1,825
Income from continuing operations13,531
 80,706
10,360
 13,531
Adjustments to reconcile income from continuing operations to net cash provided by operating activities attributable to continuing operations: 
  
   
(Gain) loss on impairments and disposal of assets(1,729) 1,889
Loss (gain) on impairments and disposal of assets552
 (1,729)
Amortization of intangibles27,707
 7,927
27,513
 27,707
Depreciation5,041
 3,304
6,928
 5,041
Rental amortization of intangibles and depreciation
 396
Non-cash compensation expense30,035
 22,287
25,075
 30,035
Deferred income taxes(13,624) (56,197)(7,000) (13,624)
Change in fair value of contingent consideration17,382
 (908)1,053
 17,382
Bad debt expense1,282
 513
949
 1,282
Amortization of debt issuance costs970
 865
1,158
 970
Amortization of convertible debt discount5,929
 5,623
6,250
 5,929
Reduction in carrying amount of ROU asset, offset by change in operating lease liabilities1,956
 184
Changes in current assets and liabilities:

     
Accounts receivable(48,396) (26,841)35,501
 (48,396)
Prepaid and other current assets(190) (787)1,369
 (190)
Accounts payable, accrued expenses and other current liabilities28,192
 (3,970)(19,134) 28,105
Current contingent consideration(3,000) (21,900)(2,670) (3,000)
Income taxes receivable4,388
 2,522
63
 4,388
Other, net357
 (165)(2,007) 260
Net cash provided by operating activities attributable to continuing operations67,875
 15,264
87,916

67,875
Cash flows from investing activities attributable to continuing operations: 
  
   
Capital expenditures(9,769) (6,747)(9,108) (9,769)
Proceeds from sale of fixed assets24,062
 

 24,062
Equity investment(80,000) 
Acquisition of ValuePenguin, net of cash acquired(105,578) 

 (105,578)
Acquisition of QuoteWizard, net of cash acquired447
 

 447
Acquisition of Ovation, net of cash acquired
 (11,683)
Acquisition of SnapCap
 (10)
Other investing activities
 (1)
Net cash used in investing activities attributable to continuing operations(90,838) (18,441)(89,108)
(90,838)
Cash flows from financing activities attributable to continuing operations: 
  
   
Payments related to net-share settlement of stock-based compensation, net of proceeds from exercise of stock options(7,646) 895
(6,068) (7,646)
Contingent consideration payments(3,000) (25,600)(3,330) (3,000)
Net repayment of revolving credit facility(10,000) 
Net proceeds from (repayment of) revolving credit facility55,000
 (10,000)
Payment of debt issuance costs(31) (84)(306) (31)
Purchase of treasury stock(3,976) (47,101)
 (3,976)
Net cash used in financing activities attributable to continuing operations(24,653) (71,890)
Total cash used in continuing operations(47,616) (75,067)
Other financing activities(14) 
Net cash provided by (used in) financing activities attributable to continuing operations45,282

(24,653)
Total cash provided by (used in) continuing operations44,090
 (47,616)
Discontinued operations:      
Net cash used in operating activities attributable to discontinued operations(6,152) (4,224)(2,571) (6,152)
Total cash used in discontinued operations(6,152) (4,224)(2,571) (6,152)
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents(53,768) (79,291)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents41,519
 (53,768)
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period105,158
 372,641
60,339
 105,158
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period$51,390
 $293,350
$101,858
 $51,390
      
Non-cash investing activities:      
Capital additions from tenant improvement allowance$1,111
 $
$
 $1,111
 

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

6

Table of Contents

LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




NOTE 1—ORGANIZATION
Company Overview
LendingTree, Inc. ("LendingTree" or the "Company"), is currently the parent of LendingTree, LLC and several companies owned by LendingTree, LLC.LLC (collectively, "LendingTree" or the "Company").

LendingTree operates what it believes to be the leading online consumer platform that connects consumers with the choices they need to be confident in their financial decisions. The Company offers consumers tools and resources, including free credit scores, that facilitate comparison-shopping for mortgage loans, home equity loans and lines of credit, reverse mortgage loans, auto loans, credit cards, deposit accounts, personal loans, student loans, small business loans, insurance quotes and other related offerings. The Company primarily seeks to match in-market consumers with multiple providers on its marketplace who can provide them with competing quotes for loans, deposit products, insurance or other related offerings they are seeking. The Company also serves as a valued partner to lenders and other providers seeking an efficient, scalable and flexible source of customer acquisition with directly measurable benefits, by matching the consumer inquiries it generates with these providers.

The consolidated financial statements include the accounts of LendingTree and all its wholly-owned entities.entities, except Home Loan Center, Inc. ("HLC") subsequent to its bankruptcy filing on July 21, 2019 which resulted in the Company's loss of a controlling interest in HLC under applicable accounting standards. Intercompany transactions and accounts have been eliminated.
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 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. See Note 1718Discontinued Operations and Note 18Subsequent Event for additional information.
Basis of Presentation
The accompanying unaudited interim consolidated financial statements as of June 30, 20192020 and for the three and six months ended June 30, 20192020 and 20182019, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). In the opinion of management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company's financial position for the periods presented. The results for the three and six months ended June 30, 20192020 are not necessarily indicative of the results to be expected for the year ending December 31, 2019,2020, or any other period. The accompanying consolidated balance sheet as of December 31, 20182019 was derived from audited financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 20182019 (the "2018"2019 Annual Report"). The accompanying consolidated financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto included in the 20182019 Annual Report. 
NOTE 2—SIGNIFICANT ACCOUNTING POLICIES
Accounting Estimates
Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. 
Significant estimates underlying the accompanying consolidated financial statements, including discontinued operations, include: loan loss obligations; the recoverability of long-lived assets, goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; fair value of assets acquired in a business combination; contingent consideration related to business combinations; litigation accruals; HLC ownership related claims; contract assets; various other allowances, reserves and accruals; and assumptions related to the determination of stock-based compensation. 

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Table of Contents

LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


allowances, reserves and accruals; assumptions related to the determination of stock-based compensation; and the determination of the right-of-use assets and lease liabilities. 
The Company considered the impact of COVID-19 on the assumptions and estimates used when preparing its quarterly financial statements including, but not limited to, our 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 COVID-19 do not recover as currently estimated by management, such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity.
Certain Risks and Concentrations
LendingTree's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud.
Financial instruments, which potentially subject the Company to concentration of credit risk at June 30, 2019,2020, consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet. Cash and cash equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial institutions of high credit. The Company generally requires certain network partnersNetwork Partners to maintain security deposits with the Company, which in the event of non-payment, would be applied against any accounts receivable outstanding.
Due to the nature of the mortgage lending industry, interest rate fluctuations may negatively impact future revenue from the Company's marketplace.
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. These lenders and lead purchasers can also offer their products online, either directly to prospective borrowers, through one or more online competitors, or both. If a significant number of potential consumers are able to obtain loans and other products from network partnersNetwork Partners without utilizing the Company's services, the Company's ability to generate revenue may be limited. Because the Company does not have exclusive relationships with the network partnersNetwork Partners whose loans and other financial products are offered on its online marketplace, consumers may obtain offers from these network partnersNetwork Partners without using its services.
Other than a support services office in India, the Company's operations are geographically limited to and dependent upon the economic condition of the United States.
Litigation Settlements and Contingencies
Litigation settlements and contingencies consists of expenses related to actual or anticipated litigation settlements.
RecentRecently Adopted Accounting Pronouncements
In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. Early adoption is permitted, including adoption in any interim period. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is evaluatingadopted ASU 2018-15 in the impactfirst quarter of 2020 using the prospective approach. Subsequent to the adoption of this ASU, willcapitalizable 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 expense related to these capitalized implementation costs are included within general and administrative expense on the consolidated statement of operations and comprehensive income. The adoption of ASU 2018-15 did not have a material impact on itsthe consolidated financial statements as of June 30, 2020 and whether to early adopt.for the three and six months ended June 30, 2020.
In August 2018, the FASB issued ASU 2018-13, which removes, modifies and adds certain disclosure requirements in Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurement. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. Entities are permitted to adopt any removed or modified disclosures and delay adoption of the additional disclosures until the effective date of the ASU.2019. Certain amendments must be applied prospectively while others are to be applied on a retrospective basis to all periods presented. The Company is evaluatingadopted ASU 2018-13 in the impact this ASU will have on its consolidated financial statements and whether to early adopt.first quarter of 2020. See Note 16—Fair Value Measurements.

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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. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company is evaluatingadopted ASU 2017-04 in the impact this ASU will have on its consolidated financial statements and whether to early adopt.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
In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes, and clarifies certain aspects of the current guidance to improve consistency among reporting entities. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019.2020. Early adoption is permitted, beginning after December 15, 2018, including adoption in interim periods. The guidanceEntities electing early adoption must adopt all amendments in the same period. Most amendments must be adopted

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usingapplied prospectively while others are to be applied on a retrospective basis for all periods presented or a modified retrospective transition.basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt.
In February 2016, the FASB issued ASU 2016-02 related to lease accounting guidance. This ASU introduces ASC Topic 842, Leases, which supersedes ASC Topic 840, Leases. In 2018 and 2019, the FASB issued final amendments clarifying certain narrow aspects of implementing ASU 2016-02, including clarifications related to the rate implicit in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate, transition disclosures and certain other transition matters. The clarification ASUs also provided an optional transition method that allows entities to initially apply the lease accounting transition requirements at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption without restating comparative prior periods presented. The clarification ASUs must be adopted concurrently with the adoption of ASU 2016-02 (collectively, "ASC Topic 842").
The Company has adopted ASC Topic 842 as of January 1, 2019 using the optional transition method to apply the new requirements at the adoption date without restating comparative prior periods presented. The adoption resulted in the increase in total assets and total liabilities of $8.8 million as of January 1, 2019 related to operating leases greater than one year in duration for which the Company is the lessee, with no cumulative effect adjustment to the opening balance of accumulated deficit. As part of the transition, the Company has elected the package of practical expedients which allows the Company to not reassess whether expired or existing contracts contain leases, lease classification for expired or existing leases, and initial direct costs for existing leases. Additionally, the Company has elected an accounting policy to not record short-term leases, which are leases with an initial term of twelve months or fewer, on the balance sheet.
NOTE 3—REVENUE
Revenue is as follows (in thousands):
Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
Three Months Ended
June 30,
 Six Months Ended
June 30,
2019 2018 2019 20182020 2019 2020 2019
Revenue:       
Mortgage products$54,618
 $66,948
 $100,602
 $140,410
Non-mortgage products       
Home$74,123
 $71,756
 $153,297
 $135,193
Credit cards56,045
 38,747
 110,551
 84,879
7,194
 56,045
 58,780
 110,551
Personal loans41,109
 36,210
 73,640
 62,175
8,827
 41,109
 40,336
 73,640
Other Consumer21,097
 31,809
 57,926
 65,501
Total Consumer37,118
 128,963
 157,042
 249,692
Insurance71,941
 13
 139,033
 26
72,919
 71,941
 155,656
 139,033
Other54,708
 42,183
 116,985
 77,646
166
 5,761
 1,415
 16,893
Total non-mortgage products223,803
 117,153
 440,209
 224,726
Total revenue$278,421
 $184,101
 $540,811
 $365,136
$184,326
 $278,421
 $467,410
 $540,811

The Company derives its revenue primarily from match fees and closing fees. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied and promised services have transferred to the customer. The Company's services are generally transferred to the customer at a point in time.
Revenue within the mortgage product categoryfrom Home products is primarily generated from upfront match fees paid by mortgage Network Partners that receive a loan request, and in some cases upfront fees for clicks or call transfers. Match fees and upfront fees for clicks and call transfers are earned through the delivery of loan requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a loan request is delivered to the customer, provided that no significant obligations remain. The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a loan request to the customer.
In addition toRevenue from Consumer products is generated by match and other upfront fees revenue within the non-mortgage product category is also generatedfor clicks or call transfers, as well as from closing fees, approval fees and approvalupfront service and subscription fees. Closing fees are derived from lenders on certain auto loans, business loans, personal loans and student loans when the lender funds a loan with the consumer. Approval fees are derived from credit card issuers when the credit card consumer receives card approval from the credit card issuer. The Company recognizes revenue on closingUpfront service fees and approval fees

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


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.
The Company recognizes revenue on closing fees and approval fees at the point when a loan request or a credit card consumer is delivered to the customer. The Company's contractual right to closing fees and approval fees is not contemporaneous with the satisfaction of the performance obligation to deliver a loan request or a credit card consumer to the customer. As such, the Company records a contract asset at each reporting period-end related to the estimated variable consideration on closing fees and approval fees for which the Company has satisfied the related performance obligation, but are still pending the loan closing or credit card approval before the Company has a contractual right to payment. This estimate is based on the Company's historical closing rates and historical time between when a consumer request for a loan or credit card is delivered to the lender or card issuer and when the loan is closed by the lender or approved by the card issuer.
Revenue from the Company's insurance businessInsurance products is primarily generated from upfront match fees, and upfront fees for website clicks or fees for calls. Match fees and upfront fees for clicks and call transfers are earned through the delivery of consumer requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a consumer request is delivered to the customer, provided that no significant obligations remain. The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a consumer request to the customer.
Upfront fees and subscription fees are derived from consumers in the Company's credit services business. 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.
The contract asset recorded within prepaid and other current assets on the consolidated balance sheets related to estimated variable consideration was $5.3$6.5 million and $4.8 million onat each of June 30, 20192020 and December 31, 2018, respectively.2019.
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 credit servicesConsumer business was $0.8$0.9 million and $0.4$0.6 million at June 30, 20192020 and December 31, 2018,2019, respectively. During the second quarter and first six months of 2020, the Company recognized revenue of $0.1 million and $0.6 million, respectively, that was included in the contract liability balance at December 31, 2019. During the second quarter and first six months of 2019, the Company recognized revenue of $0.1 million and $0.4 million, respectively, that was included in the contract liability balance at December 31, 2018.
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 an increaseincreases to such revenue from prior periods of $0.5$0.3 million and $0.2$0.5 million in the second quarters of 20192020 and 2018,2019, respectively.
NOTE 4—CASH AND RESTRICTED CASH
Total cash, cash equivalents, restricted cash and restricted cash equivalents consist of the following (in thousands):
June 30,
2019
 December 31,
2018
June 30,
2020
 December 31,
2019
Cash and cash equivalents$51,332
 $105,102
$101,764
 $60,243
Restricted cash and cash equivalents58
 56
94
 96
Total cash, cash equivalents, restricted cash and restricted cash equivalents$51,390
 $105,158
$101,858
 $60,339

NOTE 5—ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts.
The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time accounts receivable are past due, previous loss history, current and expected economic conditions and the specific customer's current and expected ability to pay its obligation. Accounts receivable are considered past due when they are outstanding longer than the contractual payment terms. Accounts receivable are written off when management deems them uncollectible.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


A reconciliation of the beginning and ending balances of the allowance for doubtful accounts is as follows (in thousands):
 Three Months Ended June 30, Six Months Ended
June 30,
 2020 2019 2020 2019
Balance, beginning of the period$2,021
 $1,370
 $1,466
 $1,143
Charges to earnings69
 772
 949
 1,282
Write-off of uncollectible accounts receivable(337) (473) (669) (761)
Recoveries collected3
 7
 10
 12
Balance, end of the period$1,756
 $1,676
 $1,756
 $1,676

NOTE 5—6—GOODWILL AND INTANGIBLE ASSETS
The balance of goodwill and intangible assets, net is as follows (in thousands):
 Goodwill Accumulated Impairment Loss Net Goodwill
Balance at December 31, 2018$831,435
 $(483,088) $348,347
Acquisition of Ovation20
 
 20
Acquisition of QuoteWizard173
 
 173
Acquisition of ValuePenguin71,444
 
 71,444
Balance at June 30, 2019$903,072
 $(483,088) $419,984

The balance of intangible assets, net is as follows (in thousands)
June 30,
2020
 December 31,
2019
Goodwill$903,227
 $903,227
Accumulated impairment losses(483,088) (483,088)
Net goodwill$420,139
 $420,139
June 30,
2019
 December 31,
2018
   
Intangible assets with indefinite lives$10,142
 $10,142
$10,142
 $10,142
Intangible assets with definite lives, net199,450
 195,557
143,925
 171,438
Total intangible assets, net$209,592
 $205,699
$154,067
 $181,580

Goodwill and Indefinite-Lived Intangible Assets
The Company's goodwill isat each of June 30, 2020 and December 31, 2019 consists of $59.3 million associated with its one reportablethe Home segment, $166.1 million associated with the Consumer segment, and $194.7 million associated with the Insurance segment.
Intangible assets with indefinite lives relate to the Company's trademarks.
Intangible Assets with Definite Lives
Intangible assets with definite lives relate to the following (in thousands):
 Cost 
Accumulated
Amortization
 Net
Technology$116,600
 $(35,149) $81,451
Customer lists80,200
 (11,800) 68,400
Trademarks and tradenames18,042
 (5,479) 12,563
Website content51,000
 (13,967) 37,033
Other256
 (253) 3
Balance at June 30, 2019$266,098
 $(66,648) $199,450
 Cost 
Accumulated
Amortization
 Net
Technology$112,400
 $(21,022) $91,378
Customer lists80,200
 (7,746) 72,454
Trademarks and tradenames16,742
 (3,730) 13,012
Website content24,900
 (6,192) 18,708
Other256
 (251) 5
Balance at December 31, 2018$234,498
 $(38,941) $195,557


See Note 6—Assets Held for Sale for tenant leases classified as held for sale during 2018, which were sold to an unrelated third party in the second quarter of 2019.
 Cost 
Accumulated
Amortization
 Net
Technology$116,200
 $(63,126) $53,074
Customer lists77,300
 (15,506) 61,794
Trademarks and tradenames17,200
 (8,177) 9,023
Website content51,000
 (30,967) 20,033
Other5
 (4) 1
Balance at June 30, 2020$261,705
 $(117,780) $143,925

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 Cost 
Accumulated
Amortization
 Net
Technology$116,200
 $(48,938) $67,262
Customer lists77,300
 (12,452) 64,848
Trademarks and tradenames17,200
 (6,407) 10,793
Website content51,000
 (22,467) 28,533
Other5
 (3) 2
Balance at December 31, 2019$261,705
 $(90,267) $171,438

Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of June 30, 20192020, future amortization is estimated to be as follows (in thousands):
Amortization ExpenseAmortization Expense
Remainder of current year$27,564
$25,565
Year ending December 31, 202053,179
Year ending December 31, 202142,839
42,738
Year ending December 31, 202225,356
25,256
Year ending December 31, 20238,702
8,602
Year ending December 31, 20246,747
Thereafter41,810
35,017
Total intangible assets with definite lives, net$199,450
$143,925
 
NOTE 6—ASSETS HELD FOR SALE7—EQUITY INVESTMENT
In December 2016,On February 28, 2020, the Company acquired two office buildingsan equity interest in Charlotte, North CarolinaStash Financial, Inc. (“Stash”) for $23.5 million in cash, which included $0.1 million in acquisition-related costs which were capitalized. $80.0 million. Stash is a consumer investing and banking platform. Stash brings together banking, investing, and 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.
The buildings were acquired with the intent to use such buildings as the Company's corporate headquartersStash equity securities do not have a readily determinable fair value and, rent any unused space.
In November 2018, the Company's Board of Directors approved a plan to sell the two office buildings. The properties were classified as current assets held for sale in the consolidated balance sheet for December 31, 2018. In February 2019,upon acquisition, the Company agreedelected the measurement alternative to sell these buildingsvalue its securities. The Stash equity securities will be carried at cost and subsequently marked to an unrelated third party, which agreement was amendedmarket upon observable market events with any gains or losses recorded in March 2019. The sale was finalized in the second quarter of 2019 for a sale price of $24.4 million, and the Company incurred closing fees of $0.3 million. The Company recognized a gain of $2.7 million on the sale within general and administrative expenseoperating income in the consolidated statement of operations and comprehensive income. The properties were associated with the Company's one reportable segment.
Property and equipment classified as held for sale at December 31, 2018 is as follows (in thousands):
 Amount
Land$5,818
Building14,984
Site improvements950
Computer equipment and capitalized software166
Furniture and other equipment145
Total gross property and equipment22,063
Accumulated depreciation(1,278)
Total property and equipment, net$20,785
Intangible assets classified as held for sale at December 31, 2018 is as follows (in thousands):
 Amount
Tenant leases$961
Total gross intangible assets961
Accumulated amortization(468)
Total intangible assets, net$493


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NOTE 7—BUSINESS ACQUISITIONS
2019 Acquisition
ValuePenguin
On January 10, 2019, the Company acquired Value Holding, Inc., the parent company of ValuePenguin Inc. ("ValuePenguin"), a personal finance website that offers consumers objective analysis on a variety of financial topics from insurance to credit cards. The Company made an upfront cash payment of $106.1 million at the closing of the transaction, funded through $90.0 million drawn on the Company's Revolving Credit Facility and the balance using cash on hand. The purchase price of $106.2 million is comprised of the upfront cash payment of $106.1 million and a $0.1 million post-closing payment for working capital settlement.
The acquisition has been accounted for as a business combination. The preliminary allocation of purchase price to the assets acquired and liabilities assumed is as follows (in thousands):
 Preliminary Fair Value
Net working capital$2,796
Fixed assets68
Intangible assets31,600
Goodwill71,444
Net noncurrent assets324
Total purchase price$106,232

The Company primarily used the income approach for the valuation as appropriate, and used valuation inputs in these models and analyses that were based on market participant assumptions. Market participants are buyers and sellers unrelated to the Company and fair value is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction at the measurement date.
The acquired intangible assets are definite-lived assets consisting of developed technology, content and trademarks and tradenames. The estimated fair values of the developed technology were determined using cost replacement analysis, the content was determined using excess earnings analysis, and the trademarks and tradenames were determined using relief from royalty analysis. The fair value of the intangible assets with definite lives are as follows (dollars in thousands):
 Preliminary Fair Value
Weighted Average
Amortization Life
Technology$4,200
3 years
Content26,100
3 years
Trademarks and tradenames1,300
5 years
Total intangible assets$31,600
3.1 years

operations. As of June 30, 2019,2020, there have been no observable market events that would result in upward or downward adjustments in the fair value and there have been no impairments to the original cost of $80.0 million.
NOTE 8—BUSINESS ACQUISITIONS
Changes in Contingent Consideration
In 2018, the Company has not completed its determinationacquired all of the final allocationoutstanding equity interests of QuoteWizard.com, LLC (“QuoteWizard”) and Ovation Credit Services, Inc. (“Ovation”).
In 2017, the Company acquired certain assets of Snap Capital LLC, which does business under the name SnapCap (“SnapCap”) and all of the purchase price toassets of Deposits Online, LLC, which does business under the assets and liabilities of the acquisition. The final allocation of purchase price is expected to be finalized in 2019. Any adjustment to the assets and liabilities assumed with the acquisition will adjust goodwill.name DepositAccounts.com (“DepositAccounts”).
The Company recorded preliminary goodwillwill make an earnout payment of $71.4$4.4 million which representsbased on the excessachievement of certain defined operating metrics for Ovation, and payments ranging from 0 to $46.8 million based on the purchase price over the estimated fair valueachievement of tangible and intangible assets acquired, net of the liabilities assumed. The goodwill is primarily attributable to ValuePenguin as a going concern, which represents the ability ofcertain defined performance targets for QuoteWizard. During 2020, the Company to earn a higher return onmade the collection of assets and business of ValuePenguin than if those assets and business were to be acquired and managed separately. The benefit of accessfinal earnout payments related to the workforce is an additional elementachievement of goodwill. The goodwill is recorded in the Company’s one reportable segment. For income tax purposes, the Company preliminarily accountedcertain defined earnings targets for the acquisition as an asset purchase which would indicate the goodwill will be tax deductible. As of June 30, 2019, the Company has completed the assessment of this election to treat the acquisition as an asset purchase and the election will be timely filed.SnapCap.

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Subsequent to the acquisition date, the Company’s consolidated results of operations include the results of the acquired ValuePenguin business. In the second quarter and first six months of 2019, the Company’s consolidated results of operations include revenue of $5.5 million and $10.9 million, respectively, and net income from continuing operations of $1.2 million and $3.1 million, respectively. Acquisition-related costs were $0.1 millionChanges in the first six months of 2019 and are included in general and administrative expense on the consolidated statement of operations and comprehensive income.
2018 Acquisitions
QuoteWizard
On October 31, 2018, the Company acquired QuoteWizard.com, LLC ("QuoteWizard"), one of the largest insurance comparison marketplaces in the growing online insurance advertising market. QuoteWizard services clients by driving consumers to insurance companies’ websites, providing leads to agents and carriers, as well as phone transfers of consumers into carrier call centers.
The Company paid $299.9 million in initial cash consideration, funded through $174.9 million of cash on hand and $125.0 million drawn on the Revolving Credit Facility, and could make up to three additional earnout payments, each ranging from zero to $23.4 million, based on certain defined operating results during the earnout periods November 1, 2018 through October 31, 2019, November 1, 2019 through October 31, 2020, and November 1, 2020 through October 31, 2021. These additional payments, to the extent earned, will be payable in cash. The purchase price of $313.4 million is comprised of the upfront cash payment of $299.9 million, $13.9 million for the estimated fair value of the earnout payments, and a $0.4 million post-closing receipt for working capital settlement.contingent consideration is summarized as follows (in thousands):
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2020 2019 2020 2019
QuoteWizard$8,058
 $2,534
 $(204) $16,893
Ovation1,039
 634
 1,180
 (14)
SnapCap78
 (142) 77
 1,450
DepositAccounts
 (236) 
 (947)
Total changes in fair value of contingent consideration$9,175
 $2,790
 $1,053
 $17,382

As of June 30, 2019,2020, the estimated fair value of the contingent consideration for the QuoteWizard acquisition totaled $37.6$24.2 million, of which $22.4$14.7 million is included in current contingent consideration and $15.2$9.5 million is included in non-current contingent consideration in the accompanying consolidated balance sheet. The estimated fair value of the contingent consideration payments is determined using an option pricing model. The estimated value of the contingent consideration is based upon available information and certain assumptions, known at the time of this report, which management believes are reasonable.
As of June 30, 2020, the estimated fair value of the contingent consideration for the Ovation acquisition totaled $4.3 million, which is included in current contingent consideration in the accompanying consolidated balance sheet. The estimated fair value of the contingent consideration payment is based on the $4.4 million achieved target discounted from the payment due date to June 30, 2020.
As of June 30, 2020, 0 liability remains outstanding for the DepositAccounts acquisition in the accompanying consolidated balance sheet for the final contingent consideration payment based on Federal Funds interest rates and the earnout is complete.
Any differences in the actual contingent consideration payments will be recorded in operating income in the consolidated statements of operations and comprehensive income. During the second quarter and first six months of 2019, the Company recorded $2.5 million and $16.9 million, respectively, of contingent consideration expense in the consolidated statements of operations and comprehensive income due to the change in estimated fair value of the contingent consideration.
The acquisition has been accounted for as a business combination. The preliminary allocation of purchase price to the assets acquired and liabilities assumed is as follows (in thousands):
 Preliminary Fair Value
Net working capital$8,381
Fixed assets1,509
Intangible assets120,400
Goodwill183,036
Other noncurrent assets29
Total purchase price$313,355

The Company primarily used the income approach for the valuation as appropriate, and used valuation inputs in these models and analyses that were based on market participant assumptions. Market participants are buyers and sellers unrelated to the Company and fair value is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction at the measurement date.

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The acquired intangible assets are definite-lived assets consisting of developed technology, customer relationships, content and trademarks and tradenames. The estimated fair values of the developed technology were determined using excess earnings analysis, the customer relationships were determined using the distributor method, the content was determined using cost replacement analysis, and the trademarks and tradenames were determined using relief from royalty analysis. The fair value of the intangible assets with definite lives are as follows (dollars in thousands):
 Preliminary Fair Value
Weighted Average
Amortization Life
Technology$68,900
4 years
Customer lists42,700
14.7 years
Content1,000
3 years
Trademarks and tradenames7,800
5 years
Total intangible assets$120,400
7.9 years

As of June 30, 2019, the Company has not completed its determination of the final allocation of the purchase price to the assets and liabilities of the acquisition. The final allocation of purchase price is expected to be finalized in the third quarter of 2019. Any adjustment to the assets and liabilities assumed with the acquisition will adjust goodwill.
The Company recorded preliminary goodwill of $183.0 million, which represents the excess of the purchase price over the estimated fair value of tangible and intangible assets acquired, net of the liabilities assumed. The goodwill is primarily attributable to QuoteWizard as a going concern, which represents the ability of the Company to earn a higher return on the collection of assets and business of QuoteWizard than if those assets and business were to be acquired and managed separately. The benefit of access to the workforce is an additional element of goodwill. The goodwill is recorded in the Company’s one reportable segment. For income tax purposes, the acquisition was an asset purchase and the goodwill will be tax deductible.
The unaudited pro forma financial results for the second quarter and first six months of 2018 below combine the consolidated results of the Company and QuoteWizard, giving effect to the acquisition as if it had been completed on January 1, 2017. This unaudited pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of January 1, 2017, or any other date.
The unaudited pro forma financial results include adjustments for additional amortization expense based on the fair value of the intangible assets with definite lives and their estimated useful lives, as well as changes in depreciation expense associated with the change in fair value of the property, plant and equipment recorded in relation to the acquisition. Interest expense was adjusted to eliminate historical interest associated with QuoteWizard's revolving credit facility and notes payable that were not assumed with the acquisition, as well as reflect incremental interest expense associated with debt issued to finance the acquisition. The provision for income taxes from continuing operations has also been adjusted to reflect taxes on the historical results of operations of QuoteWizard. QuoteWizard did not pay taxes at the entity level as it was a limited liability company whose members elected for it to be taxed as a partnership.
 
Three Months Ended
June 30, 2018
 
Six Months Ended
June 30, 2018
 (in thousands)
Pro forma revenue$221,839
 $440,596
Pro forma net income from continuing operations$42,813
 $78,413

Acquisition-related costs incurred by the Company and QuoteWizard that are directly attributable to the acquisition, and which will not have an ongoing impact, have been eliminated from the unaudited pro forma net income from continuing operations for the second quarter and first six months of 2018.
Ovation
On June 11, 2018, the Company acquired Ovation Credit Services, Inc., a leading provider of credit services with a strong customer service reputation. Ovation utilizes a proprietary software application that facilitates the credit repair process and is integrated directly with certain credit bureaus while educating consumers on credit improvement via ongoing outreach with Ovation case advisors. The proprietary software application offers consumers a simple, streamlined process to identify, dispute, and correct inaccuracies within their credit reports.

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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


The Company paid $12.2 million in initial cash consideration and could make up to two additional earnout payments, each ranging from zero to $4.375 million, based on certain defined operating metrics during the earnout periods July 1, 2018 through June 30, 2019 and July 1, 2019 through June 30, 2020. These additional payments, to the extent earned, will be payable in cash. The purchase price of $17.9 million is comprised of the upfront cash payment of $12.2 million, $5.8 million for the estimated fair value of the earnout payments, and a $0.1 million post-closing receipt for working capital settlement.
As of June 30, 2019, the estimated fair value of the contingent consideration totaled $7.4 million, of which $4.3 million is included in current contingent consideration and $3.1 million is included in non-current contingent consideration in the accompanying consolidated balance sheet. The estimated fair value of the contingent consideration payments is determined using an option pricing model. The estimated value of the contingent consideration is based upon available information and certain assumptions, known at the time of this report, which management believes are reasonable. Any differences in the actual contingent consideration payments will be recorded in operating income in the consolidated statements of operations and comprehensive income. During the second quarter of 2019, the Company recorded contingent consideration expense of $0.6 million in the consolidated statement of operations and comprehensive income due to the change in estimated fair value of the contingent consideration.
The acquisition has been accounted for as a business combination. In the second quarter of 2019, the Company completed the determination of the final allocation of purchase price to the assets acquired and liabilities assumed as follows (in thousands):
 Fair Value
Net working capital$303
Fixed assets76
Intangible assets8,900
Goodwill11,280
Net deferred tax liabilities(2,688)
Total purchase price$17,871

The Company primarily used the income approach for the valuation as appropriate, and used valuation inputs in these models and analyses that were based on market participant assumptions. Market participants are buyers and sellers unrelated to the Company and fair value is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction at the measurement date.
The acquired intangible assets are definite-lived assets consisting of developed technology, customer relationships and trademarks and tradenames. The estimated fair values of the developed technology were determined using excess earnings analysis, the customer relationships were determined using cost savings analysis and the trademarks and tradenames were determined using relief from royalty analysis. The fair value of the intangible assets with definite lives are as follows (dollars in thousands):
 Fair Value
Weighted Average
Amortization Life
Technology$6,000
7 years
Customer lists1,900
1 year
Trademarks and tradenames1,000
4 years
Total intangible assets$8,900
5.4 years

The Company recorded goodwill of $11.3 million, which represents the excess of the purchase price over the estimated fair value of tangible and intangible assets acquired, net of the liabilities assumed. The goodwill is primarily attributable to Ovation as a going concern, which represents the ability of the Company to earn a higher return on the collection of assets and business of Ovation than if those assets and business were to be acquired and managed separately. The benefit of access to the workforce is an additional element of goodwill. The goodwill is recorded in the Company’s one reportable segment. For income tax purposes, the acquisition was an equity purchase and the goodwill will not be tax deductible.

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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Changes in Contingent Consideration
SnapCap
On September 19, 2017, the Company acquired certain assets of Snap Capital LLC, which does business under the name SnapCap (“SnapCap”). SnapCap, a tech-enabled online platform, connects business owners with lenders offering small business loans, lines of credit and merchant cash advance products through a concierge-based sales approach.
The Company paid $11.9 million of initial cash consideration and could make up to three additional contingent consideration payments, each ranging from zero to $3.0 million, based on certain defined operating results during the periods of October 1, 2017 through September 30, 2018, October 1, 2018 through September 30, 2019 and October 1, 2019 through March 31, 2020. These additional payments, to the extent earned, will be payable in cash.
In the first quarter of 2019, the Company paid $3.0 million related to the earnout payment for the period of October 1, 2017 through September 30, 2018, which is included within cash flows from financing activities on the consolidated statement of cash flows.
As of June 30, 2019, the estimated fair value of the contingent consideration totaled $5.2 million, of which $2.9 million is included in current contingent consideration and $2.3 million is included in non-current contingent consideration in the accompanying consolidated balance sheet. The estimated fair value of the contingent consideration payments is determined using an option pricing model. The estimated value of the contingent consideration is based upon available information and certain assumptions, known at the time of this report, which management believes are reasonable. Any differences in the actual contingent consideration payments will be recorded in operating income in the consolidated statements of operations and comprehensive income. During the second quarter and first six months of 2019, the Company recorded a gain of $0.1 million and contingent consideration expense of $1.5 million, respectively, in the consolidated statements of operations and comprehensive income due to the change in estimated fair value of the contingent consideration.
DepositAccounts
On June 14, 2017, the Company acquired substantially all of the assets of Deposits Online, LLC, which does business under the name DepositAccounts.com (“DepositAccounts”). DepositAccounts is a leading consumer-facing media property in the depository industry and is one of the most comprehensive sources of depository deals and analysis on the Internet, covering all major deposit product categories through editorial content, programmatic rate tables and user-generated content.
The Company paid $24.0 million of initial cash consideration and could make additional contingent consideration payments of up to $9.0 million. The potential contingent consideration payments are comprised of (i) up to seven payments of $1.0 million each based on specified increases in Federal Funds interest rates during the period commencing on the closing date and ending on June 30, 2020 and (ii) a one-time performance payment of up to $2.0 million based on the net revenue of deposit products during the period of January 1, 2018 through December 31, 2018. These additional payments, to the extent earned, will be payable in cash.
In the third quarter of 2017, the Company made a payment of $1.0 million associated with a specified increase in the Federal Funds rate in June 2017. In each of the four quarters of 2018, the Company paid $1.0 million associated with specified increases in the Federal Funds rate in December 2017, March 2018, June 2018 and September 2018, respectively. In the first quarter of 2019, the Company paid $1.0 million associated with a specified increase in the Federal Funds rate in December 2018. In the second quarter of 2019, the Company paid $2.0 million associated with the one-time performance payment based on the net revenue of deposit products during the period of January 1, 2018 through December 31, 2018. The contingent consideration paid in the first six months of 2019 is included within cash flows from operating activities on the consolidated statement of cash flows.
The estimated fair value of the portion of the contingent consideration payments based on increases in interest rates is determined using a scenario approach based on the interest rate forecasts of Federal Open Market Committee participants. The estimated value of the contingent consideration is based upon available information and certain assumptions, known at the time of this report, which management believes are reasonable. Any differences in the actual contingent consideration payments will be recorded in operating income in the consolidated statements of operations and comprehensive income. As of June 30, 2019, no liability has been recorded in the accompanying consolidated balance sheet for the remaining contingent consideration payment based on Federal Funds interest rates. Accordingly, during the second quarter and first six months of 2019, the Company recorded gains of $0.2 million and $1.0 million, respectively, in the consolidated statements of operations and comprehensive income due to the change in estimated fair value of the contingent consideration.

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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Pro forma Financial Results
The unaudited pro forma financial results for the first six months of 2019 and the second quarter and first six months of 2018 combine the consolidated results of the Company and Ovation, Student Loan Hero, Inc. (“Student Loan Hero”), QuoteWizard and ValuePenguin, giving effect to the acquisitions as if the Ovation, Student Loan Hero and QuoteWizard acquisitions had been completed on January 1, 2017, and as if the ValuePenguin acquisition had been completed on January 1, 2018. This unaudited pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisitions been completed as of January 1, 2017 or 2018, or any other date.
The unaudited pro forma financial results include adjustments for additional amortization expense based on the fair value of the intangible assets with definite lives and their estimated useful lives. Depreciation expense and interest expense was adjusted for the impact of the QuoteWizard acquisition, as described above. Interest expense was also adjusted to reflect incremental interest associated with debt issued to finance the ValuePenguin acquisition. The provision for income taxes from continuing operations has been adjusted to reflect taxes on the historical results of operations of QuoteWizard. QuoteWizard did not pay taxes at the entity level as it was a limited liability company whose members elected for it to be taxed as a partnership.
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 2018 2019 2018
 (in thousands)
Pro forma revenue$234,264
 $541,326
 $464,148
Pro forma net income from continuing operations$44,314
 $13,250
 $79,902

The unaudited pro forma net income from continuing operations in the first six months of 2019 includes the aggregate after tax contingent consideration expense associated with the DepositAccounts, SnapCap, Ovation and QuoteWizard earnouts of $12.6 million. The unaudited pro forma net income from continuing operations in the second quarter and first six months of 2018 includes the aggregate after tax contingent consideration gain associated with the DepositAccounts and SnapCap earnouts of $0.3 million and $1.1 million, respectively.
The unaudited pro forma net income from continuing operations for the first six months of 2018 has been adjusted to include acquisition-related costs of $0.6 million incurred by the Company that are directly attributable to the ValuePenguin acquisition, and which will not have an ongoing impact. Accordingly, such acquisition-related costs have been eliminated from the unaudited pro forma net income from continuing operations for the first six months of 2019. Acquisition-related costs incurred by the Company, Student Loan Hero and QuoteWizard that are directly attributable to the Ovation, Student Loan Hero and QuoteWizard acquisitions, and which will not have an ongoing impact, have been eliminated from the unaudited pro forma net income from continuing operations for the second quarter and first six months of 2018.
NOTE 8—9—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
June 30,
2019
 December 31,
2018
June 30,
2020
 December 31,
2019
Accrued advertising expense$77,692
 $60,268
$46,114
 $65,836
Accrued compensation and benefits14,074
 6,381
10,068
 10,540
Accrued professional fees1,619
 2,549
2,188
 1,560
Customer deposits and escrows7,029
 6,913
8,768
 6,920
Contribution to LendingTree Foundation3,333
 3,333
3,333
 3,333
Current lease liabilities5,447
 
5,923
 6,885
Other21,129
 13,746
12,175
 17,681
Total accrued expenses and other current liabilities$130,323
 $93,190
$88,569
 $112,755


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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 9—10—LEASES
The Company is a lessee to leases of corporate offices and certain office equipment. The majority of leases for corporate offices include one1 or more options to renew, with renewal terms ranging from onetwo to five years. These renewal options have not been included in the calculation of right-of-use assets and lease liabilities, as the Company is not reasonably certain of the exercise of these renewal options. The Company used its incremental borrowing rate to calculate the right-of-use asset and lease liability for each lease.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


As of June 30, 2019, right-of use2020, right-of-use assets totaling $17.9totaled $87.9 million are included in other non-current assets and lease liabilities, totaling $20.6 million arethe current portion of which is included in accrued expenses and other current liabilities and other non-current liabilities in the accompanying balance sheet.

sheet, totaled $92.6 million. At December 31, 2019, right-of-use assets totaled $25.5 million and lease liabilities totaled $28.2 million. During the second quarter of 2019,2020 the Company recognized an impairment lossright-of-use assets and lease liabilities increased $65.7 million due to commencement of $0.5 million within general and administrative expense on the consolidated statements of operations and comprehensive income,lease, as defined under ASC Topic 842, Leases, for the right-of-use asset related to an office lease. The Company vacated the office spaceCompany’s new principal executive offices currently under construction in Charlotte, North Carolina, occurring during the second quarter of 2019 and adjusted the right-of-use asset to its fair value based on estimated sublease income.quarter.
Lease expense, which is included in general and administrative expense on the accompanying consolidated statements of operations and comprehensive income, consists of the following (in thousands):
Three Months Ended
June 30,
 Six Months Ended
June 30,
Three Months Ended
June 30, 2019
 
Six Months Ended
June 30, 2019
2020 2019 2020 2019
Operating lease cost$1,467
 $2,730
$2,140
 $1,467
 $3,994
 $2,730
Short-term lease cost9
 48
17
 9
 38
 48
Total lease cost$1,476
 $2,778
$2,157
 $1,476
 $4,032
 $2,778

Weighted average remaining lease term and discount rate for operating leases are as follows:
June 30, 2019
Weighted average remaining lease term4.2 years
Weighted average discount rate5.0%
 June 30, 2020 December 31, 2019
Weighted average remaining lease term14.0 years
 5.0 years
Weighted average discount rate5.0% 4.7%


Supplemental cash flow information related to leases is as follows (in thousands):
Six Months Ended
June 30,
Six Months Ended
June 30, 2019
2020 2019
Cash paid for amounts included in the measurement of lease liabilities:    
Operating cash flows from operating leases$2,581
$4,056
 $2,581
Right-of-use assets obtained in exchange for new operating lease liabilities$11,398
$65,740
 $11,398

Maturities of lease liabilities as of June 30, 2019 is2020 are as follows (in thousands):
Operating LeasesOperating Leases
Remainder of current year$3,159
$4,052
Year ending December 31, 20206,152
Year ending December 31, 20214,249
8,595
Year ending December 31, 20223,912
12,530
Year ending December 31, 20233,560
12,409
Year ending December 31, 202410,885
Thereafter1,944
105,398
Total lease payments22,976
153,869
Less: Interest2,416
47,219
Less: Tenant improvement allowances14,078
Present value of lease liabilities$20,560
$92,572

Rental income of $0.1 million and $0.3 million in the second quarter and first six months of 2019, respectively, is included in other income on the accompanying consolidated statements of operations and comprehensive income.

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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Future minimum payments as of December 31, 2018 under operating lease agreements having an initial or remaining non-cancelable lease term in excess of one year are as follows (in thousands):
 Amount
Year ending December 31, 2019$4,406
Year ending December 31, 20203,188
Year ending December 31, 20211,094
Year ending December 31, 2022736
Year ending December 31, 2023228
Total$9,652

The Company operated as a lessor in connection with the office buildings in Charlotte, North Carolina acquired in December 2016. The properties were sold in the second quarter of 2019 to an unrelated third party. See Note 6—Assets Held for Sale for further information.
Rental income of $0.1 million and $0.3 million in the second quarter and first six months of 2019, respectively, and $0.3 million and $0.5 million in the second quarter and first six months of 2018, respectively, is included in other income on the accompanying consolidated statements of operations and comprehensive income.
NOTE 10—11—SHAREHOLDERS' EQUITY 
Basic and diluted income per share was determined based on the following share data (in thousands):
Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
Three Months Ended
June 30,
 Six Months Ended
June 30,
2019 2018 2019 20182020 2019 2020 2019
Weighted average basic common shares12,805
 12,416
 12,762
 12,254
12,984
 12,805
 12,971
 12,762
Effect of stock options810
 1,176
 777
 1,363

 810
 592
 777
Effect of dilutive share awards194
 135
 191
 177

 194
 91
 191
Effect of Convertible Senior Notes and warrants1,099
 420
 892
 733

 1,099
 300
 892
Weighted average diluted common shares14,908
 14,147
 14,622
 14,527
12,984
 14,908
 13,954
 14,622

For the three months ended June 30, 2020, 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. Accordingly, the weighted average basic shares outstanding was used to compute loss per share. Approximately 0.8 million shares related to potentially dilutive securities were excluded from the calculation of diluted loss per share for the three months ended June 30, 2020, because their inclusion would have been anti-dilutive. For the three months ended June 30, 2020, the weighted average shares that were anti-dilutive included options to purchase 0.7 million shares of common stock and 0.1 million restricted stock units. For the six months ended June 30, 2020, the weighted average shares that were anti-dilutive included options to purchase 0.2 million shares of common stock.
For each of the three and six months ended June 30, 2019, the weighted average shares that were anti-dilutive included options to purchase 0.1 million shares of common stock.
The convertible notes and thereforethe warrants issued by the Company could be converted into the Company’s common stock, subject to certain contingencies. See Note 14—Debt and Note 19—Subsequent Events for additional information. Shares of the Company's common stock associated with the warrants were excluded from the calculation of diluted income per share included options to purchase 0.1 million shares of common stock. For each offor the three and six months ended June 30, 2018, the weighted average shares that2020 as they were anti-dilutive and therefore excluded fromsince the calculationstrike price of diluted income per share, included options to purchase 0.4 million shares of common stock.
The 0.625% Convertible Senior Notes due June 1, 2022 and the warrants issued bywas greater than the Company in 2017 could be converted intoaverage market price of the Company’sCompany's common stock induring the future, subject to certain contingencies. See Note 13—Debt for additional information.period.
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 first six months of 2019, and 2018, the Company purchased 17,501 and 156,731 shares respectively, of its common stock for aggregate consideration of $4.0 million and $46.0 million, respectively.million. At June 30, 2019,2020, approximately $181.2$179.7 million of the previous authorizations to repurchase common stock remain available.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 11—12—STOCK-BASED COMPENSATION
Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive income (in thousands):
Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
Three Months Ended
June 30,
 Six Months Ended
June 30,
2019 2018 2019 20182020 2019 2020 2019
Cost of revenue$197

$79
 $350
 $137
$333

$197
 $575
 $350
Selling and marketing expense2,283

1,433
 4,032
 2,934
1,597

2,283
 2,753
 4,032
General and administrative expense11,686

8,490
 21,907
 17,229
9,729

11,686
 18,852
 21,907
Product development1,816

1,176
 3,746
 1,987
1,499

1,816
 2,895
 3,746
Total non-cash compensation$15,982
 $11,178
 $30,035
 $22,287
$13,158
 $15,982
 $25,075
 $30,035


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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Stock Options
A summary of changes in outstanding stock options is as follows:
Number of Options 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value(a)
Number of Options 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value(a)
  (per option) (in years) (in thousands)  (per option) (in years) (in thousands)
Options outstanding at January 1, 2019940,533
 $65.12
    
Options outstanding at January 1, 2020777,871
 $69.87
  
Granted (b)
42,017
 322.17
    
73,737
 276.38
  
Exercised(108,418) 41.36
    
(20,141) 73.09
  
Forfeited(25,270) 334.52
    
(503) 297.63
  
Expired
 
    
(1,974) 352.10
  
Options outstanding at June 30, 2019848,862
 72.86
 4.82 $294,700
Options exercisable at June 30, 2019701,319
 $35.97
 3.99 $269,348
Options outstanding at June 30, 2020828,990
 87.36
 4.23 $169,184
Options exercisable at June 30, 2020670,266
 $45.85
 3.16 $164,215
(a)The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $420.03$289.53 on the last trading day of the quarter ended June 30, 20192020 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on June 30, 2019.2020. The intrinsic value changes based on the market value of the Company's common stock.
(b)During the six months ended June 30, 2019,2020, the Company granted stock options to certain employees and members of the board of directors with a weighted average grant date fair value per share of $166.39,$138.75, calculated using the Black-Scholes option pricing model, which vesting periods include (a) immediate vesting on grant date (b) 1 year from grant date (c) three years from grant date and (d) four years from grant date.
For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions. The weighted average assumptions used are as follows:
Expected term (1)
5.00 - 6.25 years
Expected dividend (2)

Expected volatility (3)
5152 - 55%60%
Risk-free interest rate (4)
1.88%0.33 - 2.55%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. This method was utilized for the stock options due to a lack of historical exercise behavior by the Company's employees.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


(2)For all stock options granted in 2019, no2020, 0 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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LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Stock Options with PerformanceMarket Conditions
A summary of changes in outstanding stock options with performancemarket conditions at target is as follows:
Number of Options with Performance Conditions 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value(a)
Number of Options with Market Conditions 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value(a)
  (per option) (in years) (in thousands)  (per option) (in years) (in thousands)
Options outstanding at January 1, 201937,877
 $308.90
    
Options outstanding at January 1, 2020463,440
 $204.31
    
Granted(b)
 
    
19,126
 275.82
    
Exercised
 
    

 
    
Forfeited
 
    

 
    
Expired(11,876) 308.90
    

 
    
Options outstanding at June 30, 201926,001
 308.90
 1.08 $2,889
Options exercisable at June 30, 2019
 $
 0.00 $
Options outstanding at June 30, 2020482,566
 207.14
 7.27 $42,839
Options exercisable at June 30, 2020
 $
 0.00 $
(a)The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $420.03$289.53 on the last trading day of the quarter ended June 30, 20192020 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on June 30, 2019.2020. The intrinsic value changes based on the market value of the Company's common stock.
Stock Options with Market Conditions
A summary of changes in outstanding stock options with market conditions at target is as follows:
 Number of Options with Market Conditions 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value(a)
   (per option) (in years) (in thousands)
Options outstanding at January 1, 2019447,193
 $200.51
    
Granted (b)
16,247
 308.96
    
Exercised
 
    
Forfeited
 
    
Expired
 
    
Options outstanding at June 30, 2019463,440
 204.31
 8.17 $99,974
Options exercisable at June 30, 2019
 $
 0.00 $
(a)The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $420.03 on the last trading day of the quarter ended June 30, 2019 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on June 30, 2019. The intrinsic value changes based on the market value of the Company's common stock.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


(b)During the six months ended June 30, 2019,2020, the Company granted stock options with a grant date fair value per share of $230.81,$196.07, calculated using the Monte Carlo simulation model, which has a vesting date of March 31, 2023.2024.
For purposes of determining stock-based compensation expense, the grant date fair value per share of the stock options was estimated using the Monte Carlo simulation model, which requires the use of various key assumptions. The assumptions used are as follows:
Expected term (1)
7.00 years
Expected dividend (2)

Expected volatility (3)
51%
Risk-free interest rate (4)
2.54%1.03%
(1)The expected term of stock options with a market condition granted was calculated using the midpoint between the time of vesting and the end of the contractual term.
(2)For all stock options with a market condition granted in 2019, no2020, 0 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.
A maximum of 773,945805,885 shares may be earned for achieving superior performance up to 167% of the target number of shares. As of June 30, 2019,2020, performance-based nonqualified stock options with a market condition of 481,669 had been earned, which have a vest date of September 30, 2022.
Restricted Stock Units
A summary of changes in outstanding nonvested restricted stock units ("RSUs") is as follows:
 RSUs
 Number of Units Weighted Average Grant Date Fair Value
   (per unit)
Nonvested at January 1, 2019201,568
 $225.48
Granted53,696
 314.85
Vested(66,751) 190.73
Forfeited(21,905) 292.43
Nonvested at June 30, 2019166,608
 $259.40

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Restricted Stock Units
A summary of changes in outstanding nonvested restricted stock units ("RSUs") is as follows:
 RSUs
 Number of Units Weighted Average Grant Date Fair Value
   (per unit)
Nonvested at January 1, 2020144,939
 $267.85
Granted105,178
 275.27
Vested(56,019) 238.08
Forfeited(7,637) 275.24
Nonvested at June 30, 2020186,461
 $280.71
Restricted Stock Units with Performance Conditions
A summary of changes in outstanding nonvested RSUs with performance conditions is as follows:
RSUs with Performance ConditionsRSUs with Performance Conditions
Number of Units Weighted Average Grant Date Fair ValueNumber of Units Weighted Average Grant Date Fair Value
  (per unit)  (per unit)
Nonvested at January 1, 201992,481
 $182.28
Nonvested at January 1, 202014,647
 $210.55
Granted
 

 
Vested(40,458) 204.78
(1,992) 125.75
Forfeited(30,956) 212.35

 
Nonvested at June 30, 201921,067
 $214.19
Nonvested at June 30, 202012,655
 $223.90

Restricted Stock Awards with Performance Conditions
A summary of changes in outstanding nonvested restricted stock awards ("RSAs") with performance conditions is as follows:
RSAs with Performance ConditionsRSAs with Performance Conditions
Number of Awards Weighted Average Grant Date Fair ValueNumber of Awards Weighted Average Grant Date Fair Value
  (per unit)  (per unit)
Nonvested at January 1, 201971,412
 $340.25
Nonvested at January 1, 202047,608
 $340.25
Granted
 

 
Vested(11,902) 340.25
(11,902) 340.25
Forfeited
 

 
Nonvested at June 30, 201959,510
 $340.25
Nonvested at June 30, 202035,706
 $340.25
 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


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 ConditionsRSAs with Market Conditions
Number of Awards Weighted Average Grant Date Fair ValueNumber of Awards Weighted Average Grant Date Fair Value
  (per unit)  (per unit)
Nonvested at January 1, 201926,674
 $340.25
Nonvested at January 1, 202026,674
 $340.25
Granted
 

 
Vested
 

 
Forfeited
 

 
Nonvested at June 30, 201926,674
 $340.25
Nonvested at June 30, 202026,674
 $340.25
 

A maximum of 44,545 shares may be earned for achieving superior performance up to 167% of the target number of shares. As of June 30, 2019,2020, performance-based restricted stock awards with a market condition of 29,601 had been earned, which have a vest date of September 30, 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 12—13—INCOME TAXES
Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
Three Months Ended
June 30,
 Six Months Ended
June 30,
2019 2018 2019 20182020 2019 2020 2019
(in thousands, except percentages)(in thousands, except percentages)
Income tax benefit$5,689
 $29,721
 $13,441
 $53,182
$3,880
 $5,689
 $6,941
 $13,441
Effective tax rate(78.0)% (196.5)% N/A
 (193.2)%31.0% (78.0)% (203.0)% N/A

For the second quarter and first six months of 2020, the effective tax rate varied from the federal statutory rate of 21% in part due to a tax benefit of $0.8 million and $1.8 million, respectively, recognized for excess tax benefits resulting from employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes. The effective tax rate for the first six months of 2020 was also impacted by a tax benefit of $6.1 million for the impact of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, as described below.
On March 27, 2020, President Trump signed into law the CARES Act. This legislation is an economic relief package in response to the public health and economic impacts of COVID-19 and includes various provisions that impact the Company, including, but not limited to, modifications for net operating losses, accelerated timeframe for refunds associated with prior minimum taxes and modifications of the limitation on business interest.
The Company revalued deferred tax assets related to net operating losses in light of the changes in the CARES Act, and recorded a net tax benefit of $6.1 million during the first six months of 2020. These deferred tax assets are being revalued, as they will be carried back to 2016 and 2017, which are tax periods prior to the Tax Cuts and Jobs Act ("TCJA") when the federal statutory tax rate was 35% versus the 21% federal statutory tax rate in effect after the enactment of the TCJA.
For the second quarter and first six months of 2019, the effective tax rate varied from the federal statutory rate of 21% primarily due to a tax benefit of $7.7 million and $13.7 million, respectively, recognized for excess tax benefits due toresulting from employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes.
For the second quarter and first six months
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Table of 2018, the effective tax rate varied from the federal statutory rate of 21% primarily due to a tax benefit of $33.7 million and $60.9 million, respectively, recognized for excess tax benefits due to employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes.Contents

LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
Three Months Ended
June 30,
 Six Months Ended
June 30,
2019 2018 2019 20182020 2019 2020 2019
(in thousands)(in thousands)
Income tax expense - excluding excess tax benefit on stock compensation$(2,034) $(3,946) $(284) $(7,688)
Income tax benefit (expense) - excluding excess tax benefit on stock compensation and CARES Act$3,127
 $(2,034) $(970) $(284)
Excess tax benefit on stock compensation7,723
 33,667
 13,725
 60,870
753
 7,723
 1,807
 13,725
Income tax benefit from CARES Act
 
 6,104
 
Income tax benefit$5,689
 $29,721
 $13,441
 $53,182
$3,880
 $5,689
 $6,941
 $13,441

NOTE 13—14—DEBT
Convertible Senior Notes
On May 31, 2017, the Company issued $300.0 million aggregate principal amount of its 0.625% Convertible Senior Notes due June 1, 2022 (the “Notes”“2022 Notes”) in a private placement. The 2022 Notes bear interest at a rate of 0.625% per year, payable semi-annually on June 1 and December 1 of each year, beginning on December 1, 2017. The 2022 Notes will mature on June 1, 2022, unless earlier repurchased or converted.
The initial conversion rate of the 2022 Notes is 4.8163 shares of Common Stock per $1,000 principal amount of 2022 Notes (which is equivalent to an initial conversion price of approximately $207.63 per share). The conversion rate will be 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 fundamental change prior to the maturity of the 2022 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 2022 Notes in connection with such fundamental change. Upon conversion, the 2022 Notes will settle for cash, shares of the Company’s stock, or a combination thereof, at the Company’s option. It is the intent of the Company to settle the principal amount of the 2022 Notes in cash and any conversion premium in shares of its common stock.
The 2022 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 2022 Notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness, including borrowings under the senior secured Revolving Credit Facility,revolving credit facility, described below, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.
Prior to the close of business on the business day immediately preceding February 1, 2022, the 2022 Notes will be convertible at the option of the holders thereof only under the following circumstances:
during any calendar quarter commencing after the calendar quarter ending on September 30, 2017 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


during the 30 consecutive trading day period ending on, and including the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
during the five5 business day period after any five5 consecutive trading day period in which, for each trading day of that period, the trading price (as defined in the 2022 Notes) per $1,000 principal amount of 2022 Notes for such trading day was less than 98% of the product of the last reported sale price of the Common Stock and the conversion rate on each such trading day; or
upon the occurrence of specified corporate events including but not limited to a fundamental change.
Holders of the 2022 Notes becamewere not entitled to convert the 2022 Notes on January 1, 2018, based on the last reported sales 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, 2017, being greater than or equal to 130% of the conversion price of the Notes on each applicable trading day. Holders of the Notes continued to have such right untilcalendar quarter ended June 30, 2018, based on2020 as the last reported sales price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on March 31, 2018, being2020, was not greater than or equal to 130% of the conversion price of the 2022 Notes on each applicable trading day. Holders of the 2022 Notes wereare not entitled to convert the 2022 Notes from July 1, 2018 to March 31, 2019. Holders ofduring the Notes became entitled to convert the Notes on April 1, 2019, based oncalendar quarter ended September 30, 2020 as the last reported sales price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period

20

Table of 30 consecutive trading days ending on March 31, 2019, being greater than or equal to 130% of the conversion price of the Notes on each applicable trading day. Holders of the Notes will continue to have such right until September 30, 2019, based on the last reported sales price of the Company's common stock, for at least 20 trading Contents

LENDINGTREE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


days (whether or not consecutive) during the period of 30 consecutive trading days ending on June 30, 2019, being2020, was not greater than or equal to 130% of the conversion price of the 2022 Notes on each applicable trading day.
On or after February 1, 2022, until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2022 Notes, holders of the 2022 Notes may convert all or a portion of their 2022 Notes regardless of the foregoing conditions.
The Company may not redeem the 2022 Notes prior to the maturity date and no sinking fund is provided for the 2022 Notes. Upon the occurrence of a fundamental change prior to the maturity date of the 2022 Notes, holders of the 2022 Notes may require the Company to repurchase all or a portion of the 2022 Notes for cash at a price equal to 100% of the principal amount of the 2022 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
If the market price per share of the Common Stock, as measured under the terms of the 2022 Notes, exceeds the conversion price of the 2022 Notes, the 2022 Notes could have a dilutive effect, unless the Company elects, subject to certain conditions, to settle the principal amount of the 2022 Notes and any conversion premium in cash.
The initial measurement of convertible debt instruments that may be settled in cash areis separated into a debt and an equity component whereby the debt component is based on the fair value of a similar instrument that does not contain an equity conversion option. The separate components of debt and equity of the Company’s 2022 Notes were determined using an interest rate of 5.36%, which reflects the nonconvertible debt borrowing rate of the Company at the date of issuance. As a result, the initial components of debt and equity were $238.4 million and $61.6 million, respectively.
Financing costs related to the issuance of the 2022 Notes were approximately $9.3 million of which $7.4 million were allocated to the liability component and are being amortized to interest expense over the term of the debt and $1.9 million were allocated to the equity component.
In the first six months of 2020, the Company recorded interest expense on the 2022 Notes of $7.9 million which consisted of $0.9 million associated with the 0.625% coupon rate, $6.3 million associated with the accretion of the debt discount, and $0.7 million associated with the amortization of the debt issuance costs. In the first six months of 2019, the Company recorded interest expense on the 2022 Notes of $7.5 million which consisted of $0.9 million associated with the 0.625% coupon rate, $5.9 million associated with the accretion of the debt discount, and $0.7 million associated with the amortization of the debt issuance costs. In the first six months of 2018, the Company recorded interest expense on the Notes of $7.2 million which consisted of $0.9 million associated with the 0.625% coupon rate, $5.6 million associated with the accretion of the debt discount, and $0.7 million associated with the amortization of the debt issuance costs. The debt discount is being amortized over the term of the debt.
As of June 30, 2019,2020, the fair value of the 2022 Notes is estimated to be approximately $628.3$430.5 million using the Level 1 observable input of the last quoted market price onfor the quarter ended June 28, 2019.30, 2020.
A summary of the gross carrying amount, unamortized debt cost, debt issuance costs and net carrying value of the liability component of the 2022 Notes are as follows (in thousands):
 June 30,
2020
 December 31,
2019
Gross carrying amount$299,977
 $299,991
Unamortized debt discount25,537
 31,789
Debt issuance costs3,062
 3,811
Net carrying amount$271,378
 $264,391

On July 24, 2020, the Company repurchased approximately $130.3 million principal amount of the 2022 Notes through separate and individually-negotiated transactions with certain holders of the 2022 Notes. See Note 19—Subsequent Events for additional information.
Convertible Note Hedge and Warrant Transactions
On May 31, 2017, in connection with the issuance of the 2022 Notes, the Company entered into Convertible Note Hedge (the “2017 Hedge”) and Warrant transactions with respect to the Company’s common stock. The Company used approximately $18.1 million of the net proceeds from the 2022 Notes to pay for the cost of the 2017 Hedge, after such cost was partially offset by the proceeds from the 2017 Warrants transactions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


 June 30,
2019
 December 31,
2018
Gross carrying amount$300,000
 $300,000
Unamortized debt discount37,877
 43,805
Debt issuance costs4,541
 5,252
Net carrying amount$257,582
 $250,943

Convertible Note Hedge and Warrant Transactions
On May 31, 2017, in connection with the issuance of the Notes, the Company entered into Convertible Note Hedge (the “Hedge”) and Warrant transactions with respect to the Company’s common stock. The Company used approximately $18.1 million of the net proceeds from the Notes to pay for the cost of the Hedge, after such cost was partially offset by the proceeds from the Warrant transactions.
On May 31, 2017, the Company paid $61.5 million to the counterparties for the 2017 Hedge transactions. The 2017 Hedge transactions cover approximately 1.4 million shares of the Company’s common stock, the same number of shares initially underlying the 2022 Notes, and are exercisable upon any conversion of the 2022 Notes. The 2017 Hedge Transactionstransactions are expected generally to reduce the potential dilution to the Common Stock upon conversion of the 2022 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2022 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 2017 Hedge transactions, is greater than the strike price of the 2017 Hedge transactions, which initially corresponds to the initial conversion price of the 2022 Notes, or approximately $207.63 per share of Common Stock. The 2017 Hedge transactions will expire upon the maturity of the Notes.
On May 31, 2017, the Company sold to the counterparties, warrants (the "Warrants"“2017 Warrants”) to acquire 1.4 million shares of Common Stock at an initial strike price of $266.39 per share, which represents a premium of 70% over the reported sale price of the Common Stock of $156.70 on May 24, 2017. On May 31, 2017, the Company received aggregate proceeds of approximately $43.4 million from the sale of the 2017 Warrants.
If the market price per share of the Common Stock, as measured under the terms of the 2017 Warrants, exceeds the strike price of the 2017 Warrants, the 2017 Warrants could have a dilutive effect, unless the Company elects, subject to certain conditions, to settle the 2017 Warrants in cash.
The 2017 Hedge and Warrant2017 Warrants transactions are indexed to, and potentially settled in, the Company's common stock and the net cost of $18.1 million has been recorded as a reduction to additional paid-in capital in the consolidated statement of shareholders’ equity.
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 the existing call spread transactions effective July 24, 2020 in notional amounts corresponding to the principal amount of the 2022 Notes repurchased. See Note 19—Subsequent Events for additional information.
Senior Secured Revolving Credit Facility
On November 21, 2017,December 10, 2019, the Company's wholly-owned subsidiary, LendingTree, LLC, entered into an amended and restated $250.0$500.0 million five-year senior secured revolving credit facility (the "Amended Revolving Credit Facility") which matures on November 21, 2022amended and restated the Company's previous $350.0 million five-year senior secured revolving credit facility (the “Revolving“2017 Revolving Credit Facility”). Under certain conditions, the Company will be permitted to add one or more term loans and/or increase revolving commitments under theThe Amended Revolving Credit Facility by an additional $100.0 million or a greater amount provided that a total consolidated senior secured debt to EBITDA ratio does not exceed 2.50 to 1.00. On October 26, 2018, the Company amended the Revolving Credit Facility to increase the borrowing capacity by $100.0 million to $350.0 million. Pricing and other terms and conditions of the Revolving Credit Facility remain unchanged.matures on December 10, 2024. Borrowings under the Amended Revolving Credit Facility can be used to finance working capital needs, capital expenditures and general corporate purposes, including to finance permitted acquisitions. As of June 30, 2020, the Company had a $130.0 million, 30-day borrowing outstanding under the Amended Revolving Credit Facility bearing interest at the LIBO rate option of 1.44%. As of December 31, 2019, the Company had $115.0$75.0 million in borrowings outstanding under the Amended Revolving Credit Facility at the LIBO rate option with a weighted average interest rate of 3.91%3.01%, consisting of a $65.0$50.0 million 31-day borrowing and a $50.0$25.0 million 31-day borrowing. As of December 31, 2018,
See Note 19—Subsequent Events for activity related to the Company had a $125.0 million, 31-day borrowing outstanding under theAmended Revolving Credit Facility bearing interest at the LIBO rate option of 4.02%.in July 2020.
Up to $10.0 million of the Amended Revolving Credit Facility will be available for short-term loans, referred to as swingline loans. Under certain conditions, the Company will be permitted to add one or more term loans and/or increase revolving commitments under the Amended Revolving Credit Facility by an additional amount equal to the greater of $185.0 million or 100% of Consolidated EBITDA as defined, or a greater amount provided that a total consolidated senior secured debt to EBITDA ratio does not exceed 2.50 to 1.00. Additionally, up to $10.0 million of the Amended Revolving Credit Facility will be available for the issuance of letters of credit.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


June 30, 2020 and December 31, 2019, the Company had outstanding one letter of credit issued in the amount of $0.2 million.
The Company’s borrowings under the Amended Revolving 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 SunTrustTruist 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 0.25% to 1.0% based on a total consolidated debt to EBITDA ratio; or
a LIBO rate generally defined as the sum of (i) the rate for Eurodollar deposits in the applicable currency and (ii) an applicable percentage of 1.25% to 2.0% based on a total consolidated debt to EBITDA ratio.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


All swingline loans bear interest at the base rate defined above. Interest on the Company’s borrowings are 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.
The Amended Revolving Credit Facility contains a restrictive financial covenant, which initially limits the total consolidated debt to EBITDA ratio to 4.5, with step downs to 4.0 over time, except that this may increase by 0.5 for the four fiscal quarters following a material acquisition. In addition, the Amended Revolving Credit Facility contains customary affirmative and negative covenants in addition to events of default for a transaction of this type that, among other things, restrict additional indebtedness, liens, mergers or certain fundamental changes, asset dispositions, dividends, stock repurchases and other restricted payments, transactions with affiliates, sale-leaseback transactions, hedging transactions, loans and investments and other matters customarily restricted in such agreements. The Company was in compliance with all covenants at June 30, 2019.2020.
The Amended Revolving Credit Facility requires LendingTree, LLC to pledge as collateral, subject to certain customary exclusions, substantially all of its assets, including 100% of its equity in all of its domestic subsidiaries and 66% of the voting equity, and 100% of the non-voting equity, in all of its material foreign subsidiaries (of which there are currently none). The obligations under this facility are unconditionally guaranteed on a senior basis by LendingTree, Inc. and material domestic subsidiaries of LendingTree, LLC, which guaranties are secured by a pledge as collateral, subject to certain customary exclusions, of 100% of each such guarantor's assets, including 100% of each such guarantor’s equity in all of its domestic subsidiaries and 66% of the voting equity, and 100% of the non-voting equity, in all of its material foreign subsidiaries (of which there are currently none).
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 Amended Revolving Credit Facility equal to an applicable percentage of 0.25% to 0.45% per annum based on a total consolidated debt to EBITDA ratio. The Company is required to pay a letter of credit participation fee and a letter of credit fronting fee quarterly in arrears. The letter of credit participation fee is based upon the aggregate face amount of outstanding letters of credit at an applicable percentage of 1.25% to 2.0% based on a total consolidated debt to EBITDA ratio. The letter of credit fronting fee is 0.125% per annum on the face amount of each letter of credit.
In addition to the remaining unamortized debt issuance costs associated with the original revolving credit facility entered into on October 22, 2015 and the Revolving Credit Facility, debt issuance costs of $0.5$2.8 million related to the October 2018 amendmentAmended Revolving Credit Facility entered into on December 10, 2019 are being amortized to interest expense over the life of the Amended Revolving Credit Facility, and are included in prepaid and other current assets and other non-current assets in the Company's consolidated balance sheet.
In the first six months of 2020, the Company recorded interest expense related to the Amended Revolving Credit Facility of $2.1 million which consisted of $1.1 million associated with borrowings bearing interest at the LIBO rate, $0.5 million in unused commitment fees, and $0.5 million associated with the amortization of the debt issuance costs. In the first six months of 2019, the Company recorded interest expense related to the Revolving Credit Facilityrevolving credit facility of $3.8 million which consisted of $3.2 million associated with borrowings bearing interest at the LIBO rate, $0.3 million in unused commitment fees, and $0.3 million associated with the amortization of the debt issuance costs. In the first six months of 2018, the Company recorded interest expense related to the Revolving Credit Facility of $0.4 million in unused commitment fees and $0.2 million associated with the amortization of the debt issuance costs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 14—15—CONTINGENCIES
Overview
LendingTree is involved in legal proceedings on an ongoing basis. In assessing the materiality of a legal proceeding, the Company evaluates, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require it to change its business practices in a manner that could have a material and adverse impact on the Company's business. With respect to the matters disclosed in this Note 14,15, unless otherwise indicated, the Company is unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies.
As of June 30, 2019,2020, the Company had litigation settlement accruals of $0.1 million and $8.0$62.3 million in continuing operations and discontinued operations, respectively. As of December 31, 2018,2019, the Company had litigation settlement accruals of $0.2 million and $8.0$31.0 million in continuing operations and discontinued operations, 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. See Note 18—Discontinued Operations for additional information.
Specific Matters
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 16—FAIR VALUE MEASUREMENTS
Other than the convertible notes and warrants, as well as the equity interest in Stash, the carrying amounts of the Company's financial instruments are equal to fair value at June 30, 2020. See Note 14—Debt and Note 19—Subsequent Events for additional information on the convertible notes and warrants, and see Note7—Equity Investment for additional information on the equity interest in Stash.
Contingent consideration payments related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs. The changes in the fair value of the Company's Level 3 liabilities are as follows (in thousands):
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2020 2019 2020 2019
Contingent consideration, beginning of period$22,342
 $49,429
 $33,464
 $38,837
Transfers into Level 3
 
 
 
Transfers out of Level 3
 
 
 
Total net losses (gains) included in earnings (realized and unrealized)9,175
 2,790
 1,053
 17,382
Purchases, sales and settlements:       
Additions
 
 
 
Payments(3,000) (2,000) (6,000) (6,000)
Contingent consideration, end of period$28,517
 $50,219
 $28,517
 $50,219

The contingent consideration liability at June 30, 2020 is the estimated fair value of the earnout payments of the Ovation and QuoteWizard acquisitions.
The Company will make an earnout payment of $4.4 million based on the achievement of certain defined operating metrics for Ovation, and payments ranging from 0 to $46.8 million based on the achievement of certain defined performance targets for QuoteWizard. See Note 8—Business Acquisitions for additional information on the contingent consideration for each of these respective acquisitions.
The significant unobservable inputs used to calculate the fair value of the contingent consideration are estimated future cash flows for the acquisitions and the discount rate. Actual results will differ from the projected results and could have a significant impact on the estimated fair value of the contingent considerations. Additionally, as the liability is stated at present value, the passage of time alone will increase the estimated fair value of the liability each reporting period. Any changes in fair value will be recorded in operating income in the consolidated statements of operations and comprehensive income.
The following table provides quantitative information about Level 3 fair value measurements.
 
Fair Value at
June 30, 2020
Valuation TechniqueUnobservable Input
Range (Weighted Average)(a)
 (in thousands)   
Contingent consideration$28,517
Option pricing modelOperating results growth rate20.7% - 28.4% (24.6%)
   Discount rate8.1%
(a) Discount rates were weighted by the relative undiscounted value of expected earnout payments. Other unobservable inputs were weighted by the relative maximum potential earnout payments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 17—SEGMENT INFORMATION
The Company manages its business and reports its financial results through the following 3 operating and reportable segments: Home, Consumer and Insurance. 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 chief operating decision maker for the purpose of assessing performance and allocating resources. The Company changed its reportable segments in the fourth quarter of 2019 and previously reported segment results have been revised to conform to the Company's reportable segments at June 30, 2020.
The Home segment includes the following products: purchase mortgage, refinance mortgage, home equity loans and lines of credit, reverse mortgage loans, and real estate. The Consumer segment includes the following products: 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 Insurance segment consists of insurance quote products. Revenue from the resale of online advertising space to third parties and revenue from home improvement referrals, 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. Segment cost of revenue and marketing expense represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related expenses, that are directly attributable to the segments' products. 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.
 Three Months Ended June 30, 2020
 HomeConsumerInsuranceOtherTotal
 (in thousands)
Revenue$74,123
$37,118
$72,919
$166
$184,326
Segment marketing expense35,397
17,716
42,797
85
95,995
Segment profit (loss)38,726
19,402
30,122
81
88,331
Cost of revenue    13,464
Brand and other marketing expense    17,926
General and administrative expense    28,489
Product development    10,812
Depreciation    3,550
Amortization of intangibles    13,756
Change in fair value of contingent consideration    9,175
Severance    32
Litigation settlements and contingencies    (1,325)
Operating loss    (7,548)
Interest expense, net    (4,955)
Other income    7
Loss before income taxes and discontinued operations    $(12,496)


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


 Three Months Ended June 30, 2019
 HomeConsumerInsuranceOtherTotal
 (in thousands)
Revenue$71,756
$128,963
$71,941
$5,761
$278,421
Segment cost of revenue and marketing expense47,546
78,192
43,135
5,416
174,289
Segment profit24,210
50,771
28,806
345
104,132
Cost of revenue (exclusive of cost of advertising re-sold to third parties included above)    11,257
Brand and other marketing expense    22,393
General and administrative expense    27,951
Product development    10,175
Depreciation    2,559
Amortization of intangibles    14,280
Change in fair value of contingent consideration    2,790
Severance    403
Litigation settlements and contingencies    8
Operating income    12,316
Interest expense, net    (5,095)
Other income    71
Income before income taxes and discontinued operations    $7,292

 Six Months Ended June 30, 2020
 HomeConsumerInsuranceOtherTotal
 (in thousands)
Revenue$153,297
$157,042
$155,656
$1,415
$467,410
Segment cost of revenue and marketing expense78,660
94,541
95,001
1,662
269,864
Segment profit (loss)74,637
62,501
60,655
(247)197,546
Cost of revenue (exclusive of cost of advertising re-sold to third parties included above)    26,630
Brand and other marketing expense    40,681
General and administrative expense    60,571
Product development    21,775
Depreciation    6,928
Amortization of intangibles    27,513
Change in fair value of contingent consideration    1,053
Severance    190
Litigation settlements and contingencies    (996)
Operating income    13,201
Interest expense, net    (9,789)
Other income    7
Income before income taxes and discontinued operations    $3,419


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


 Six Months Ended June 30, 2019
 HomeConsumerInsuranceOtherTotal
 (in thousands)
Revenue$135,193
$249,692
$139,033
$16,893
$540,811
Segment cost of revenue and marketing expense87,062
144,947
82,363
15,789
330,161
Segment profit48,131
104,745
56,670
1,104
210,650
Cost of revenue (exclusive of cost of advertising re-sold to third parties included above)    21,591
Brand and other marketing expense    48,748
General and administrative expense    59,068
Product development    20,341
Depreciation    5,041
Amortization of intangibles    27,707
Change in fair value of contingent consideration    17,382
Severance    457
Litigation settlements and contingencies    (199)
Operating income    10,514
Interest expense, net    (10,563)
Other income    139
Income before income taxes and discontinued operations    $90

NOTE 18—DISCONTINUED OPERATIONS
The LendingTree Loans Business is presented as discontinued operations in the accompanying financial statements. The LendingTree Loans Business originated various consumer mortgage loans through HLC. On June 6, 2012, the Company sold substantially all of the operating assets of HLC, including the LendingTree Loans Business, for $55.9 million in cash to a wholly-owned subsidiary of Discover Financial Services ("Discover"). Discover generally did not assume liabilities of HLC that arose before the closing date, except for certain liabilities directly related to assets Discover acquired. Of the purchase price received, a portion was deposited in escrow in accordance with the purchase agreement with Discover for certain loan loss obligations that remained with HLC following the sale. During 2018, the remaining funds in escrow were released to HLC in accordance with the terms of the purchase agreement with Discover.
Upon closing of the sale of substantially all of the operating assets of HLC on June 6, 2012, HLC ceased to originate consumer loans. Certain liability for losses on previously sold loans remains with HLC.
Litigation settlements and contingencies and legal fees associated with ongoing related bankruptcy and legal proceedings against the Company are included in discontinued operations in the accompanying financial statements.
Home Loan Center, Inc. Bankruptcy Filing
On June 21, 2019, the U.S. District Court of Minnesota entered judgment in ResCap Liquidating Trust v. Home Loan Center, Inc., against HLC for $68.5 million, see Litigation Related to Discontinued Operations below. The judgment against HLC exceeded the assets of HLC, which were $11.2 million at July 21, 2019, including cash of $5.9 million. On July 19, 2019, HLC appealed the judgment to the United States Court of Appeals for the Eighth Circuit.
On July 21, 2019, at the direction of the sole independent director of HLC, HLC voluntarily filed a petition under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) with the U.S. Bankruptcy Court in the Northern District of California in San Jose, California (the “Bankruptcy Court”) in order to preserve assets for the benefit of all creditors of HLC. On September 16, 2019, the Bankruptcy Court converted the bankruptcy to Chapter 7 of the Bankruptcy Code and appointed a Trustee to liquidate HLC's assets.
HLC’s filing under the Bankruptcy Code creates an automatic stay of enforcement of the judgment entered against HLC by the Minnesota court in ResCap Liquidating Trust v. Home Loan Center, Inc. described above and in Litigation Related to Discontinued Operations below. As a result of the voluntary petition, LendingTree, LLC was, as of the initial July 21, 2019

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


bankruptcy petition filing date, no longer deemed to have a controlling interest in HLC under applicable accounting standards. As a result, HLC and its consolidated subsidiary were deconsolidated from the Company’s consolidated financial statements as of July 21, 2019. The effect of such deconsolidation was the elimination of the consolidated assets and liabilities of HLC (and its consolidated subsidiary) from the Company’s consolidated balance sheets. Upon deconsolidation, in the third quarter of 2019 the Company recognized a loss of $5.5 million which includes a net gain of $4.5 million related to the removal of HLC's (and its consolidated subsidiary's) assets and liabilities and the recognition of a liability of $10.0 million related to LendingTree LLC's ownership in HLC. No consideration was received by the Company as a result of the deconsolidation.
HLC has indicated that it believes that it has 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. The Company is obligated to advance any expenses to the officers and directors related to these claims and to indemnify them to the maximum extent permitted by law. LendingTree, LLC believes the declaration of the dividend was proper, that the amounts paid to LendingTree, LLC following such declaration are not subject to recovery by HLC and that any claims by HLC relating to such dividend declaration are without merit. During the second quarter of 2020, LendingTree, LLC and HLC entered into a settlement agreement, subject to the approval of the bankruptcy court in the HLC Bankruptcy, 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 held a hearing on July 16, 2020 on the motion to approve the settlement to which no objections were made, and approved the settlement the same day. A liability of $36.0 million is included in the accompanying consolidated balance sheet as of June 30, 2020 related to LendingTree LLC's ownership in HLC. The $36.0 million settlement payment was made in July 2020. HLC’s voluntary petition under the Bankruptcy Code does not represent an event of default under LendingTree, LLC’s Second Amended and Restated Credit Agreement dated as of December 10, 2019 or the Company’s indenture dated May 31, 2017 with respect to the Company’s 0.625% Convertible Senior Notes due 2022.
Litigation Related to Discontinued Operations
Residential Funding Company
ResCap Liquidating Trust v. Home Loan Center, Inc., Case No. 14-cv-1716 (U.S. Dist. Ct., Minn.), successor to Residential Funding Company, LLC v Home Loan Center, Inc., No. 13-cv-3451 (U.S. Dist. Ct., Minn.). On or about December 16, 2013, Home Loan Center, Inc. was served in the original captioned matter, which involves claims of Residential Funding Company, LLC ("RFC") for damages for breach of contract and indemnification for certain residential mortgage loans as well as residential mortgage-backed securitizations ("RMBS") containing mortgage loans. RFC assertsasserted that, beginning in 2008, RFC faced massive repurchase demands and lawsuits from purchasers or insurers of the loans and RMBS that RFC had sold. RFC filed for bankruptcy protection in May 2012. Plaintiff allegesalleged that, after RFC filed for Chapter 11 protection, hundreds of proofs of claim were filed, many of which mirrored the litigation filed against RFC prior to its bankruptcy.
In December 2013, the United States Bankruptcy Court for the Southern District of New York entered an Order confirming the Second Amended Joint Chapter 11 Plan Proposed by Residential Capital, LLC et al. and the Official Committee of Unsecured Creditors. Plaintiff then began filing substantially similar complaints against approximately 80 of the loan originators from whom RFC had purchased loans, including HLC, in federal and state courts in Minnesota and New York. In each case, Plaintiff claimsplaintiff claimed that the defendant is liable for a portion of the global settlement in RFC’s bankruptcy.
Plaintiff asserted two2 claims against HLC: (1) breach of contract based on HLC’s alleged breach of representations and warranties concerning the quality and characteristics of the mortgage loans it sold to RFC; and (2) contractual indemnification for alleged liabilities, losses, and damages incurred by RFC arising out of purported defects in loans that RFC purchased from HLC and sold to third parties. Plaintiff alleged that the “types of defects” contained in the loans it purchased from HLC included “income misrepresentation, employment misrepresentation, appraisal misrepresentations or inaccuracies, undisclosed debt, and missing or inaccurate documents.” Plaintiff sought damages of up to $61.0 million plus attorney's fees and prejudgment interest.
HLC denied the material allegations of the complaint and asserted numerous defenses thereto. The matter went to trial in the fourth quarter of 2018 and the jury returned a verdict of $28.7 million in favor of Plaintiff.plaintiff. On June 21, 2019, the U.S. District Court in Minnesota entered judgment against HLC for $68.5 million. The judgment is comprised of: (i) $28.7 million in damages awarded by the jury; (ii) $14.1 million in pre-verdict interest; (iii) $23.1 million in attorneys' fees and costs, and (iv) $2.6 million in post-verdict, prejudgment interest. On July 21, 2019, at the direction of HLC’s sole independent director, HLC voluntarily filed a petition under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”), with the U.S. Bankruptcy Court in the Northern District of California in San Jose, California, in order to preserve assets for the benefit of all creditors of HLC. The filing does not include as debtors LendingTree, Inc., LendingTree, LLC or any of their respective subsidiaries engaged in continuing operations. HLC’s filing under the Bankruptcy Code creates an automatic stay of enforcement of the judgment entered against HLC by the U.S. District Court in Minnesota. HLC has filed a motion for relief from stay to appeal that judgement and has asserted that it has strong grounds for such appeal. See Note 18—Subsequent Event to the consolidated financial statements included elsewhere in this report for further information on the bankruptcy filing by HLC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


HLC’s filing under the Bankruptcy Code discussed above in Home Loan Center, Inc. Bankruptcy Filing creates an automatic stay of enforcement of the judgment entered against HLC by the U.S. District Court in Minnesota. On August 27, 2019, plaintiff filed a lawsuit captioned ResCap Liquidating Trust v. LendingTree, LLC, et al., Case No. 19-cv-2360 (U.S. Dist. Ct., Minn.), seeking to hold the Company liable for the judgment against HLC, under assumption of liability, agency and alter ego theories. The Company estimatesbelieves that these claims lack merit. On October 17, 2019, the range of HLC’s potential lossesCompany filed a motion to dismiss the liability and agency claims, and oral arguments with respect to such motion were held on January 10, 2020. On March 20, 2020, the court denied the Company's motion to dismiss, or in the RFC matteralternative, to be $0.0compel arbitration, and on April 3, 2020, the Company appealed the court's findings with respect to the Company's request to compel arbitration of the first count of the lawsuit. On June 17, 2020, the Company entered into a settlement agreement with ResCap, pursuant to which, the Company agreed to, among other things, pay ResCap $58.5 million, to $68.5 million. An estimated liability of $7.0 million for this matter is includedless any amounts ResCap receives in the accompanying consolidated balance sheet asHLC bankruptcy, in exchange for, among other things, ResCap releasing any and all claims against the Company, and the Company’s directors and officers, including any claims asserted in ResCap v. LendingTree. Pursuant to the settlement agreement, the Company will be responsible for the difference of June 30, 2019.$58.5 million minus the amount that ResCap receives through the HLC Bankruptcy. In July 2020, the Company made a $26.5 million payment to the ResCap Liquidating Trust.
Lehman Brothers Holdings, Inc.
Lehman Brothers Holdings Inc. v. 1st Advantage Mortgage, LLC et al., Case No. 08-13555 (SCC), Adversary Proceeding No. 16-01342 (SCC) (Bankr. S.D.N.Y.). In February 2016, Lehman Brothers Holdings, Inc. (“LBHI”) filed an Adversary Complaint against HLC and approximately 149 other defendants (the "Complaint"). In December 2018, LBHI amended its complaint against HLC. The amended complaint references approximately 370 allegedly defective mortgage loans sold by HLC with purported "Claim Amounts" totaling $40.2 million. LBHI alleges it settled all such claims and is seeking indemnification from HLC for LBHI’s purported losses and liabilities associated with such settlements, plus prejudgment interest, attorneys’ fees, litigation costs and other expenses. The amended complaint does not specify the amount of LBHI’s purported damages. On December 4, 2019, LBHI filed a $44.7 million proof of claim in HLC’s bankruptcy seeking recovery for the claims asserted in the lawsuit. The Company believes that these claims lack merit and understands that HLC intends to defend this action vigorously.
HLC’s filing under the Bankruptcy Code discussed above in Home Loan Center, Inc. Bankruptcy Filing creates an automatic stay of this proceeding. On June 11, 2020, LBHI filed a lawsuit captioned Lehman Brothers Holdings Inc. v. LendingTree, LLC, et al., Case No. 20-cv-01351 (U.S. Dist. Ct., Minn.), seeking to hold the Company liable for their allowed bankruptcy claim of $13.3 million, under assumption of liability, agency and alter ego theories. The Company believes that these claims lack merit and intends to defend this action vigorously. An estimated liability
Financial Information of $1.0 million for this matter is includedDiscontinued Operations
The components of net loss reported as discontinued operations in the accompanying consolidated balance sheet asstatements of June 30, 2019.
NOTE 15—FAIR VALUE MEASUREMENTS
Other than the 0.625% Convertible Senior Notesoperations and the Warrants, the carrying amounts of the Company's financial instruments are equal to fair value at June 30, 2019. See Note 13—Debt for additional information on the 0.625% Convertible Senior Notes and the Warrants.
Contingent consideration payments related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs. The changes in the fair value of the Company's Level 3 liabilities during the second quarters and first six months of 2019 and 2018comprehensive income are as follows (in thousands):
 Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Contingent consideration, beginning of period$49,429
 $33,108
 $38,837
 $57,349
Transfers into Level 3
 
 
 
Transfers out of Level 3
 
 
 
Total net losses (gains) included in earnings (realized and unrealized)2,790
 (167) 17,382
 (908)
Purchases, sales and settlements:       
Additions
 5,800
 
 5,800
Payments(2,000) (23,500) (6,000) (47,000)
Contingent consideration, end of period$50,219
 $15,241
 $50,219
 $15,241
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2020 2019 2020 2019
Revenue$
 $
 $
 $
        
Loss before income taxes(28,424) (966) (34,526) (2,310)
Income tax benefit7,283
 203
 8,810
 485
Net loss$(21,141) $(763) $(25,716) $(1,825)

The contingent consideration liability at June 30, 2019 is the estimated fair valueLosses from discontinued operations included all activity of the earnout payments of the DepositAccounts, SnapCap, OvationHLC prior to bankruptcy, including litigation settlements, contingencies and QuoteWizard acquisitions.
The Company will make payments ranging from zero to $1.0 million based on the achievement of defined milestone targets for DepositAccounts, payments ranging from zero to $6.0 million based on the achievement of certain defined earnings targets for SnapCap, payments ranging from $4.4 million to $8.8 million based on the achievement of certain defined operating metrics for Ovation, and payments ranging from zero to $70.2 million based on the achievement of certain defined performance targets for QuoteWizard. See Note 7—Business Acquisitions for additional information on the contingent consideration for each of these respective acquisitions.legal fees associated with legal proceedings.
The significant unobservable inputs usedresults of discontinued operations also include litigation settlements and contingencies and legal fees associated with ongoing legal proceedings against LendingTree Inc. or LendingTree LLC that arose due to calculate the fair value ofLendingTree Loans Business or the contingent consideration are estimated future cash flows for the acquisitions, estimated customer growth rates, estimated date and likelihood of an increase in interest rates and the discount rate. Actual results will differ from the projected results and could have a significant impact on the estimated fair value of the contingent considerations. Additionally, as the liability is stated at present value, the passage of time alone will increase the estimated fair value of the liability each reporting period. Any changes in fair value will be recorded in operating income in the consolidated statements of operations and comprehensive income.HLC bankruptcy filing.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 16—SEGMENT INFORMATION19—SUBSEQUENT EVENTS
The Company has one reportable segment.
Mortgage and non-mortgage product revenue is as follows (in thousands)
 Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Mortgage products$54,618

$66,948

$100,602

$140,410
Non-mortgage products223,803

117,153

440,209

224,726
Total revenue$278,421

$184,101

$540,811

$365,136

NOTE 17—DISCONTINUED OPERATIONS
The revenue and net loss reported as discontinued operations in the accompanying consolidated statements of operations and comprehensive income are as follows (in thousands):
 Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Revenue$
 $
 $
 $
        
Loss before income taxes$(966) $(2,914) $(2,310) $(8,399)
Income tax benefit203
 612
 485
 1,764
Net loss$(763) $(2,302) $(1,825) $(6,635)

During the second quarters and first six months of 2019 and 2018, loss from discontinued operations was primarily due to litigation settlements and contingencies and legal fees associated with ongoing legal proceedings.
LendingTree Loans
On June 6, 2012, the Company sold substantially all of the operating assets of its LendingTree Loans business for $55.9 million in cash to a wholly-owned subsidiary of Discover Financial Services ("Discover"). Discover generally did not assume liabilities of the LendingTree Loans business that arose before the closing date, except for certain liabilities directly related to assets Discover acquired. Of the purchase price received, a portion was deposited in escrow in accordance with the agreement with Discover for certain loan loss obligations that remain with the Company following the sale. During the second quarter of 2018, the remaining funds in escrow were released to the Company in accordance with the terms of the agreement with Discover.
Significant Assets and Liabilities of LendingTree Loans
Upon closing of the sale of substantially all of the operating assets of the LendingTree Loans business on June 6, 2012, LendingTree Loans ceased to originate consumer loans. Liability for losses on previously sold loans will remain with LendingTree Loans and are discussed below.
Loan Loss Obligations
LendingTree Loans sold loans it originated to investors on a servicing-released basis, so the risk of loss or default by the borrower was generally transferred to the investor. However, LendingTree Loans was required by these investors to make certain representations and warranties relating to credit information, loan documentation and collateral. These representations and warranties may extend through the contractual life of the loan. Subsequent to the loan sale, if underwriting deficiencies, borrower fraud or documentation defects are discovered in individual loans, LendingTree Loans may be obligated to repurchase the respective loan or indemnify the investors for any losses from borrower defaults if such deficiency or defect cannot be cured within the specified period following discovery.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


HLC, a subsidiary of the Company, continues to be liable for these indemnification obligations, repurchase obligations and premium repayment obligations following the sale of substantially all of the operating assets of its LendingTree Loans business in the second quarter of 2012.
The following table represents the aggregate loans sold, subsequent settlements and remaining unsettled loans.
 Number of Loans Original Issue Balance
 (in thousands) (in billions)
Loans sold by HLC234
 $38.9
Subsequent settlements(172) (28.8)
Remaining unsettled balance as of June 30, 201962
 $10.1

During the fourth quarter of 2015, LendingTree Loans completed a settlement agreement for $0.6 million with one of the investors to which it had sold loans. This investor accounted for approximately 10% of the total number of loans sold and 12% of the original issue balance. This settlement related to all existing and future losses on loans sold to this investor.
During the fourth quarter of 2014, LendingTree Loans completed a settlement agreement for $5.4 million with the largest investor to which it had sold loans. This investor accounted for approximately 40% of both the total number of loans sold and the original issue balance. This settlement related to all existing and future losses on loans sold to this investor.
In the second quarter of 2014, LendingTree Loans completed settlements with two buyers of previously purchased loans.
The Company has been negotiating with certain of the remaining secondary market purchasers to settle any existing and future contingent liabilities, but it may not be able to complete such negotiations on acceptable terms, or at all. Because LendingTree Loans does not service the loans it sold, it does not maintain nor generally have access to the current balances and loan performance data with respect to the individual loans previously sold to investors. Accordingly, LendingTree Loans is unable to determine, with precision, its maximum exposure for breaches of the representations and warranties it made to the investors that purchased such loans.
The Company uses a settlement discount framework for evaluating the adequacy of the reserve for loan losses. This model estimates lifetime losses on the population of remaining loans originated and sold by LendingTree Loans using actual defaults for loans with similar characteristics and projected future defaults. It also considers the likelihood of claims expected due to alleged breaches of representations and warranties made by LendingTree Loans and the percentage of those claims investors estimate LendingTree Loans may agree to repurchase. A settlement discount factor is then applied to the result of the foregoing to reflect publicly-announced bulk settlements for similar loan types and vintages, the Company's own settlement experience, as well as LendingTree Loans' non-operating status, in order to estimate a range of potential obligation.
The estimated range of remaining loan losses using this settlement discount framework was determined to be $4.3 million to $7.9 million at June 30, 2019. The reserve balance recorded as of June 30, 2019 was $7.6 million. Management has considered both objective and subjective factors in the estimation process, but given current general industry trends in mortgage loans as well as housing prices and market expectations, actual losses related to LendingTree Loans' obligations could vary significantly from the obligation recorded as of the balance sheet date or the range estimated above.
Additionally, LendingTree has guaranteed certain loans sold to two investors in the event that LendingTree Loans is unable to satisfy its repurchase and warranty obligations related to such loans.
Based on historical experience, it is anticipated that LendingTree Loans will continue to receive repurchase requests and incur losses on loans sold in prior years.
The activity related to loss reserves on previously sold loans is as follows (in thousands):
 Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
 2019 2018 2019 2018
Loan loss reserve, beginning of period$7,554
 $7,554
 $7,554
 $7,554
Provisions
 
 
 
Charge-offs to reserves
 
 
 
Loan loss reserve, end of period$7,554
 $7,554
 $7,554
 $7,554


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


The liability for losses on previously sold loans is presented as current liabilities of discontinued operations in the accompanying consolidated balance sheets as of June 30, 2019 and December 31, 2018.
See Note 18Subsequent Event for additional information.
NOTE 18—SUBSEQUENT EVENTSenior Secured Revolving Credit Facility
On July 21, 2019, at2020, the directionCompany executed a temporary amendment to its Amended Revolving Credit Facility to provide for certain covenant relief, primarily to facilitate the issuance of convertible notes outlined below, the repurchase of a portion of the sole independent director of2022 Notes, and to pay down existing borrowings under the Company’s Home Loan Center, Inc. (“HLC”) subsidiary, HLC voluntarily filedcredit facility.
The amendment amends the existing credit agreement to, among other things: (i) temporarily replace the total consolidated debt to EBITDA ratio covenant with a petition under Chapter 11 ofconsolidated liquidity covenant requiring the Company to maintain unrestricted cash and cash equivalents in the United States Bankruptcy Codeplus amounts available and permitted to be drawn under the Amended Revolving Credit Facility to be no less than $200.0 million; (ii) impose additional limitations on certain restricted payments during such temporary period; and (iii) increase the applicable margins to (x) 2.25% for loans based on the LIBO rate and (y) 1.25% for loans based on the base rate, subject to a 0.75% floor, and unused commitment fees to 0.50% under the Amended Revolving Credit Facility during the temporary period. These amendments shall apply from the effective date through the fiscal quarter ending June 30, 2021, unless terminated in advance by the Company.
During July 2020, the Company made net repayments of $130.0 million on its Amended Revolving Credit Facility, which represented the outstanding balance.
Convertible Senior Notes
On July 24, 2020, the Company issued $575.0 million aggregate principal amount of its 0.50% Convertible Senior Notes due July 15, 2025 (the “Bankruptcy Code”“2025 Notes”), in a private placement, for estimated net proceeds of approximately $559.8 million. The 2025 Notes bear interest at a rate of 0.50% per year, payable semi-annually on January 15 and July 15 of each year, beginning on January 15, 2021. The 2025 Notes will mature on July 15, 2025, unless earlier repurchased, redeemed or converted. The initial conversion rate of the 2025 Notes is 2.1683 shares of Common Stock per $1,000 principal amount of 2025 Notes (which is equivalent to an initial conversion price of approximately $461.19 per share).
On July 24, 2020, the Company used approximately $234.0 million of the net proceeds from the issuance of the 2025 Notes to repurchase approximately $130.3 million principal amount of the 2022 Notes through separate and individually-negotiated transactions with certain holders of the 2022 Notes.
On July 24, 2020, in connection with the U.S. Bankruptcy Court in the Northern District of California in San Jose, California (the “Bankruptcy Court”), in order to preserve assets for the benefit of all creditors of HLC.
On June 21, 2019, the U.S. District Court of Minnesota entered judgment in ResCap Liquidating Trust v. Home Loan Center, Inc., against HLC for $68.5 million, see Note 14—Contingencies. The judgment against HLC exceeded the assets of HLC, which were approximately $11.4 million at July 21, 2019, including cash of approximately $5.9 million, which approximate the assets of HLC as of June 30, 2019.
The bankruptcy filing does not include as debtors LendingTree, Inc., LendingTree, LLC or any of their respective subsidiaries engaged in continuing operations. HLC’s filing under the Bankruptcy Code creates an automatic stay of enforcementissuance of the judgment entered against HLC by the Minnesota court in ResCap Liquidating Trust v. Home Loan Center, Inc. described in Note 14—Contingencies. HLC’s independent director has advised2025 Notes, the Company that HLC, as debtor-in-possession in bankruptcy, intends to pursue an appeal of the judgment entered in ResCap Liquidating Trust v. Home Loan Center, Inc.
As a result of the voluntary petition, the Company was, as of the July 21, 2019 bankruptcy petition filing date, no longer deemed to have a controlling interest in HLC under applicable accounting standards. As a result, HLCinto Convertible Note Hedge (the “2020 Hedge”) and its consolidated subsidiary will be deconsolidated from the Company’s consolidated financial statements beginning with the consolidated financial statements for the third quarter of 2019. The effect of such deconsolidation will be elimination of the consolidated assets and liabilities of HLC (and its consolidated subsidiary) from the Company’s consolidated balance sheets and could result in a gain or loss in the third quarter of 2019. Additionally, any successful claims asserted against LendingTree Inc. or LendingTree LLC, such as the claim described below, could also affect any resulting gain or loss upon deconsolidation.
In its filings with the Bankruptcy Court, HLC has indicated that it believes that it has claims against HLC’s sole shareholder, the Company’s operating subsidiary LendingTree, LLC, and its former sole directorWarrant (the Company’s Chairman and Chief Executive Officer), relating to the declaration of a dividend by HLC in January 2016 of $40.0 million. The Company is obligated to advance any expenses to HLC’s former sole director related to these claims and to indemnify such former sole director to the maximum extent permitted by law. The Company believes the declaration of the dividend was proper, that the amounts paid to LendingTree, LLC following such declaration are not subject to recovery by HLC and that any claims by HLC relating to such dividend declaration are without merit. The Company has commenced settlement talks with HLC, and if the Company is not able to settle HLC’s claims relating to such dividend declaration on terms the Company deems acceptable, the Company intends to vigorously contest such claims. Any settlement agreement with HLC that the Company might enter into would be subject to approval by the Bankruptcy Court.
HLC’s voluntary petition under the Bankruptcy Code does not represent an event of default under LendingTree, LLC’s Amended and Restated Credit Agreement dated as of November 21, 2017 or the Company’s indenture dated May 31, 2017“2020 Warrants”) transactions with respect to the Company’s 0.625% Convertible Seniorcommon stock. The Company used approximately $63.0 million of the net proceeds from the 2025 Notes due 2022.to pay for the cost of the 2020 Hedge, after such cost was partially offset by the proceeds from the 2020 Warrants transactions. The 2020 Warrants have a strike price of $709.52 per share, which represents a premium of 100% over the reported sale price of the Common Stock of $354.76 on July 21, 2020.
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 the existing call spread transactions effective July 24, 2020 in notional amounts corresponding to the principal amount of the 2022 Notes repurchased. The Company received approximately $15.6 million as a result of terminating such portions of the 2017 Hedge and 2017 Warrants.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 
Cautionary Statement Regarding Forward-Looking Information
This report contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements related to our anticipated financial performance, business prospects and strategy; anticipated trends and prospects in the various industries in which our businesses operate; new products, services and related strategies; and other similar matters. These forward-looking statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. The use of words such as "anticipates," "estimates," "expects," "projects," "intends," "plans" and "believes," among others, generally identifyidentifies forward-looking statements. 
Actual results could differ materially from those contained in the forward-looking statements. Factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include those matters discussed or referenced in Part II, Item 1A. Risk Factors included elsewhere in this quarterly report and Part I, Item 1A. Risk Factors of the 20182019 Annual Report.
Other unknown or unpredictable factors that could also adversely affect our business, financial condition and results of operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of LendingTree, Inc.'s management as of the date of this report. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations, except as required by law. 
Company Overview
LendingTree, Inc., is the parent of LendingTree, LLC and several companies owned by LendingTree, LLC.
LendingTree operatesWe operate what we believe to be the leading online consumer platform that connects consumers with the choices they need to be confident in their financial decisions. Our online consumer platform provides consumers with access to product offerings from our Network Partners, including mortgage loans, home equity loans and lines of credit, reverse mortgage loans, auto loans, credit cards, deposit accounts, personal loans, student loans, small business loans, insurance quotes and other related offerings. In addition, we offer tools and resources, including free credit scores, that facilitate comparison shopping for loans, deposit products, insurance and other offerings. We seek to match consumers with multiple providers, who can offer them competing quotes for the product, or products, they are seeking. We also serve as a valued partner to lenders and other providers seeking an efficient, scalable and flexible source of customer acquisition with directly measurable benefits, by matching the consumer inquiries we generate with these partners.Network Partners.
Our My LendingTree platform offers a personalized loan comparison-shopping experience by providing free credit scores and credit score analysis. This platform enables us to observe consumers' credit profiles and then identify and alert them to loans and other offerings on our marketplace that may be more favorable than the terms they may have at a given point in time. This is designed to provide consumers with measurable savings opportunities over their lifetimes.
 Three Months Ended June 30,  
My LendingTree20202019 % Change
Cumulative Sign-ups as of quarter-end (in millions)
15.2
12.1
 26 %
     
Revenue Contribution (in thousands)
$9,139
$20,246
 (55)%
% of total revenue4.9%7.3%  
We are focused on developing new product offerings and enhancements to improve the experiences that consumers and Network Partners have as they interact with us. By expanding our portfolio of financial services offerings, we are growing and diversifying our business and sources of revenue. We intend to capitalize on our expertise in performance marketing, product development and technology, and to leverage the widespread recognition of the LendingTree brand to effect this strategy.

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We believe the consumer and small business financial services industry is still in the early stages of a fundamental shift to online product offerings, similar to the shift that started in retail and travel many years ago and is now well established. We believe that like retail and travel, as consumers continue to move towardtowards online shopping and transactions for financial services, suppliers will increasingly shift their product offerings and advertising budgets toward the online channel. We believe the strength of our brands and of our partner network place us in a strong position to continue to benefit from this market shift.
The LendingTree Loans business is presented as discontinued operations in the accompanying consolidated balance sheets, consolidated statements of operations and comprehensive income and consolidated cash flows for all periods presented. Except for the discussion under the heading "Discontinued Operations," the analysis within Management's Discussion and Analysis of Financial Condition and Results of Operations reflects our continuing operations.

Economic Conditions
34

TableDuring March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of Contents
a novel strain of coronavirus ("COVID-19"). The pandemic has significantly impacted the economic conditions in the U.S., as federal, state and local governments react to the public health crisis, creating significant uncertainties in the U.S. economy. The downstream impact of social distancing and related economic pullback are affecting our business and marketplace participants to varying degrees. We are continuously monitoring the impacts of the current economic conditions related to the COVID-19 pandemic and the effect on our business, financial condition and results of operations. Of our three reportable segments, the Consumer segment has been and is expected to be most impacted as unsecured credit and the flow of capital in certain areas of the market have contracted. Within our Consumer segment we have seen reductions of over 70% in near-term lender demand for our services reflecting those lenders' uncertainty over the length and depth of the economic recession. The impact to our Home and Insurance segments has been and is anticipated to be much less substantial. Most of our selling and marketing expenses are variable costs that we adjust dynamically in relation to revenue opportunities to profitably meet demand. Thus, as our revenue is negatively impacted during the recession, we anticipate our marketing expenses will continue to generally decrease in line with revenue.

Segment Reporting
We have three reportable segments: Home, Consumer and Insurance. We changed our reportable segments in the fourth quarter of 2019, and prior period results have been reclassified to conform with this change in reportable segments.
Recent Business Acquisitions
On January 10, 2019, we acquired Value Holding Inc., the parent company of ValuePenguin Inc. ("ValuePenguin"(“ValuePenguin”), a personal finance website that offers consumers objective analysis on a variety of financial topics from insurance to credit cards for $106.2 million. We believe that combiningCombining ValuePenguin’s high-quality content and search engine optimization capability with recently acquired proprietary technology and insurance carrier network from QuoteWizard.com, LLC ("QuoteWizard")QuoteWizard enables us to provide immense value to carriers and agents. This strategic acquisition positions us to achieve further scale in the insurance space as well as the broader financial services industry.
On October 31, 2018,February 28, 2020, we acquired QuoteWizard, one of the largest insurance comparison marketplacesan equity interest in the growing online insurance advertising market, for $299.5 million in cash and potential contingent consideration payments of up to $70.2 million through October 2021, subject to achieving specific targets. QuoteWizard services clients by driving consumers to insurance companies’ websites, providing leads to agents and carriers, as well as phone transfers of consumers into carrier call centers. This acquisition has established LendingTree as a leading player in the online insurance advertising industry, while continuing our ongoing diversification within the financial services category.
On July 23, 2018, we acquired Student Loan Hero,Stash Financial, Inc. (“Student Loan Hero”Stash”) for $62.7 million in cash,$80.0 million. Stash is a consumer investing and banking platform. Stash brings together banking, investing, and education into one seamless experience offering a full-suite of which $2.3 million was recognized as severance expense in our consolidated statements of operationspersonal investment accounts, Traditional and comprehensive income. Student Loan Hero, a personal finance website dedicated to helping student loan borrowers manage their student debt, offers currentRoth IRAs, custodial investment accounts, and former students in-depth financial comparison tools, educational resources,banking services, including checking accounts and unbiased, personalized advice. This strategic transaction allows us to scale our student loan business and provide consumers with the tools and resources to better understand their personal finances and make smarter financial decisions.
On June 11, 2018, we acquired Ovation Credit Services, Inc. (“Ovation”), a leading provider of credit servicesdebit cards with a strong customer service reputation for $12.1 million in cash and potential contingent consideration payments of up to $8.75 million through June 2020, subject to achieving specified targets. Ovation utilizes a proprietary software application that facilitates the credit repair process and is integrated directly with certain credit bureaus while educating consumers on credit improvement via ongoing outreach with Ovation case advisors. The proprietary software application offers consumers a simple, streamlined process to identify, dispute, and correct inaccuracies within their credit reports. Ovation's experienced management team, strong credit bureau relationships and customized software platform enable us to help more consumers achieve their original financial goals through the LendingTree platform.
These acquisitions continue our diversification strategy.Stock-Back® rewards program.
North Carolina Office Properties
In December 2016, we completed the acquisition of two office buildings in Charlotte, North Carolina, for $23.5 million in cash. The buildings were acquired with the intent to use such buildings as our corporate headquarters and rent any unused space. In November 2018, the office buildings were classified as held for sale. In FebruaryMay 2019, the Company agreed to sellwe sold these buildings to an unrelated third party which agreement was amended in March 2019. The sale was finalized in the second quarter of 2019 for a sale price of $24.4 million, and the Company incurred closing fees of $0.3 million. For additional information, see Note 6—Assets Held for Sale in the notes to the consolidated financial statements included elsewhere in this report.
With our expansion in North Carolina, in December 2016, we received a grant from the state that provides up to $4.9 million in reimbursements over 12 years beginning in 2017 for investing in real estate and infrastructure in addition to increasing jobs in North Carolina at specific targeted levels through 2020, and maintaining the jobs thereafter. Additionally, the city of Charlotte and the county of Mecklenburg provided a grant that will be paid over five years and is based on a percentage of new property tax we pay on the development of a corporate headquarters. In December 2018, we received an additional grant from the state that provides up to $8.4 million in reimbursements over 12 years beginning in 2020 for increasing jobs in North Carolina at specific targeted levels through 2023, and maintaining the jobs thereafter.
Seasonality
Revenue in our lending business is subject to cyclical and seasonal trends. Home sales (and purchase mortgages) typically rise during the spring and summer months and decline during the fall and winter months, while refinancing and home equity activity is principally driven by mortgage interest rates as well as real estate values. However, in certain historical periods additional factors affecting the mortgage and real estate markets, such as the 2008-2009 financial crisis and ensuing recession have impacted customary seasonal trends.

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We anticipate revenue in our newer products to be cyclical as well; however, we have limited historical data to predict the nature and magnitude of this cyclicality. Based on industry data, we anticipate as our personal loan product matures we will experience less consumer demand during the fourth and first quarters of each year. We also anticipate less consumer demand for credit cards in the fourth quarter of each year and we anticipate higher consumer demand for deposit accounts in the first quarter of each year. The majority of consumer demand for in-school student loan products occurs in the third quarter coinciding with collegiate enrollment in late summer. Other factors affecting our business include macro factors such as credit availability in the market, interest rates, the strength of the economy and employment.
Recent Mortgage Interest Rate Trends
Interest rate and market risks can be substantial in the mortgage lead generation business. Short-term fluctuations in mortgage interest rates primarily affect consumer demand for mortgage refinancings, while long-term fluctuations in mortgage interest rates, coupled with the U.S. real estate market, affect consumer demand for new mortgages. Consumer demand, in turn, affects lender demand for mortgage leads from third-party sources, as well as our own ability to attract online consumers to our website.
Typically, when interest rates decline, we see increased consumer demand for mortgage refinancing, which in turn leads to increased traffic to our website and decreased selling and marketing efforts associated with that traffic. At the same time, lender demand for leads from third-party sources typically decreases, as there are more consumers in the marketplace seeking refinancings and, accordingly, lenders receive more organic mortgage lead volume. Due to lower lender demand, our revenue earned per consumer typically decreases, but with correspondingly lower selling and marketing costs.
Conversely, when interest rates increase, we typically see decreased consumer demand for mortgage refinancing, leading to decreased traffic to our website and higher associated selling and marketing efforts associated with that traffic. At the same time, lender demand for leads from third-party sources typically increases, as there are fewer consumers in the marketplace and, accordingly, the supply of organic mortgage lead volume decreases. Due to high lender demand, we typically see an increase in the amount lenders will pay per matched lead, which often leads to higher revenue earned per consumer. However, increases in the amount lenders will pay per matched lead in this situation is limited by the overall cost models of our lenders, and our revenue earned per consumer can be adversely affected by the overall reduced demand for refinancing in a rising rate environment. These factors combined to cause lower revenue earned per consumer for mortgage products in the second quarter of 2019 compared to the prior year quarter.
We dynamically adjust selling and marketing expenditures in all interest rate environments to optimize our results against these variables.
According to Freddie Mac, 30-year mortgage interest rates have decreased steadilydeclined during 20192020 to a monthly average of 3.80%3.16% in June 2019.2020. On a quarterly basis, 30-year mortgage interest rates in the second quarter of 20192020 averaged 4.00%3.23%, as compared to 4.54%4.00% in the second quarter of 20182019 and 4.37%3.51% in the first quarter of 2019.2020.
mdaq2historicalmixchart2019.jpg

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mdaq22020historicalmixchart.jpg
Typically, as mortgage interest rates decline, there are more consumers in the marketplace seeking refinancings and, accordingly, the mix of mortgage origination dollars moveswill move towards refinance mortgages. According to Mortgage Bankers Association ("MBA") data, total refinance origination dollars remained relatively consistent at 29%increased to 63% of total mortgage origination dollars in the second quarter of 20192020 compared to 30%54% in the first quarter of 2019, while2020. In the second quarter of 2020, total purchaserefinance origination dollars was 71%increased 297% to $580 million from the second quarter of total2019 and 90% from the first quarter of 2020. Industry-wide mortgage origination dollarsvolume in the second quarter of 2019 compared to 70% in the first quarter of 2019. In the second quarter of 2019, total refinance origination dollars increased 24%2020 was up 85% from the second quarter of 2018 and 51% from2019.
In July 2020, the first quarter of 2019.
Looking forward, MBA is projectingprojected 30-year mortgage interest rates to remain relatively consistent through the end of the year. According to MBA projections, refinance origination dollars is projected to increase to 33% of total mortgage origination dollars in the third quarter of 2019. The refinance share of total mortgage origination dollars is projected to represent approximately 30%54% for 2019, compared to 28% for 2018.2020.

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The U.S. Real Estate Market
The health of the U.S. real estate market and interest rate levels are the primary drivers of consumer demand for new mortgages. Consumer demand, in turn, affects lender demand for purchase mortgage leads from third-party sources. Typically, a strong real estate market will lead to reduced lender demand for leads, as there are more consumers in the marketplace seeking financing and, accordingly, lenders receive more organic lead volume. Conversely, a weaker real estate market will typically lead to an increase in lender demand, as there are fewer consumers in the marketplace seeking mortgages. 
According to the National Association of Realtors ("NAR"), falling interest rates contributedexisting-home sales rebounded at the end of the second quarter of 2020 after three straight months of sales decline caused by the ongoing COVID-19 pandemic. Existing-home sales decreased 21% in the second quarter of 2020 compared to an increase in home sales inthe first quarter of 2020, and decreased 18% compared to the second quarter of 2019. The NAR expects a minimalcontinued increase in existing homeexisting-home sales as long as mortgage rates remain low and job gains continue, but predicts an overall decrease of 3% in 2019 from 2018.2020 compared to 2019.
Results of Operations for the Three and Six Months ended June 30, 20192020 and 20182019
Three Months Ended June 30, Six Months Ended June 30,Three Months Ended June 30, Six Months Ended June 30,
20192018
$
Change
%
Change
 20192018
$
Change
%
Change
20202019
$
Change
%
Change
 20202019$
Change
%
Change
(Dollars in thousands)(Dollars in thousands)
Mortgage products$54,618
$66,948
$(12,330)(18)% $100,602
$140,410
$(39,808)(28)%
Non-mortgage products223,803
117,153
106,650
91 % 440,209
224,726
215,483
96 %
Home$74,123
$71,756
$2,367
3 % $153,297
$135,193
$18,104
13 %
Consumer37,118
128,963
(91,845)(71)% 157,042
249,692
(92,650)(37)%
Insurance72,919
71,941
978
1 % 155,656
139,033
16,623
12 %
Other166
5,761
(5,595)(97)% 1,415
16,893
(15,478)(92)%
Revenue278,421
184,101
94,320
51 % 540,811
365,136
175,675
48 %184,326
278,421
(94,095)(34)% 467,410
540,811
(73,401)(14)%
Costs and expenses: 
 
 
 
  
 
 
 
     
Cost of revenue (exclusive of depreciation and amortization shown separately below)
16,310
6,043
10,267
170 % 33,980
11,739
22,241
189 %13,464
16,310
(2,846)(17)% 27,716
33,980
(6,264)(18)%
Selling and marketing expense191,629
123,946
67,683
55 % 366,520
249,990
116,530
47 %113,921
191,629
(77,708)(41)% 309,459
366,520
(57,061)(16)%
General and administrative expense27,951
24,759
3,192
13 % 59,068
47,573
11,495
24 %28,489
27,951
538
2 % 60,571
59,068
1,503
3 %
Product development10,175
5,967
4,208
71 % 20,341
12,227
8,114
66 %10,812
10,175
637
6 % 21,775
20,341
1,434
7 %
Depreciation2,559
1,633
926
57 % 5,041
3,304
1,737
53 %3,550
2,559
991
39 % 6,928
5,041
1,887
37 %
Amortization of intangibles14,280
3,964
10,316
260 % 27,707
7,927
19,780
250 %13,756
14,280
(524)(4)% 27,513
27,707
(194)(1)%
Change in fair value of contingent consideration2,790
(167)2,957
1,771 % 17,382
(908)18,290
2,014 %9,175
2,790
6,385
229 % 1,053
17,382
(16,329)(94)%
Severance403
3
400
13,333 % 457
3
454
15,133 %32
403
(371)(92)% 190
457
(267)(58)%
Litigation settlements and contingencies8
(170)178
105 % (199)(192)(7)(4)%(1,325)8
(1,333)N/A
 (996)(199)(797)(401)%
Total costs and expenses266,105
165,978
100,127
60 % 530,297
331,663
198,634
60 %191,874
266,105
(74,231)(28)% 454,209
530,297
(76,088)(14)%
Operating income12,316
18,123
(5,807)(32)% 10,514
33,473
(22,959)(69)%
Operating (loss) income(7,548)12,316
(19,864)(161)% 13,201
10,514
2,687
26 %
Other (expense) income, net: 
 
 
 
  
 
 
 
     
Interest expense, net(5,095)(2,924)2,171
74 % (10,563)(5,912)4,651
79 %(4,955)(5,095)(140)(3)% (9,789)(10,563)(774)(7)%
Other income (expense)71
(71)(142)(200)% 139
(37)(176)(476)%
Income before income taxes7,292
15,128
(7,836)(52)% 90
27,524
(27,434)(100)%
Other income7
71
(64)(90)% 7
139
(132)(95)%
(Loss) income before income taxes(12,496)7,292
(19,788)(271)% 3,419
90
3,329
3,699 %
Income tax benefit5,689
29,721
(24,032)(81)% 13,441
53,182
(39,741)(75)%3,880
5,689
(1,809)(32)% 6,941
13,441
(6,500)(48)%
Net income from continuing operations12,981
44,849
(31,868)(71)% 13,531
80,706
(67,175)(83)%
Net (loss) income from continuing operations(8,616)12,981
(21,597)(166)% 10,360
13,531
(3,171)(23)%
Loss from discontinued operations, net of tax(763)(2,302)(1,539)(67)% (1,825)(6,635)(4,810)(72)%(21,141)(763)20,378
2,671 % (25,716)(1,825)23,891
1,309 %
Net income and comprehensive income$12,218
$42,547
$(30,329)(71)% $11,706
$74,071
$(62,365)(84)%
Net (loss) income and comprehensive (loss) income$(29,757)$12,218
$(41,975)(344)% $(15,356)$11,706
$(27,062)(231)%
Revenue
Revenue decreased in the second quarter and first six months of 2020 compared to the second quarter and first six months of 2019 due to decreases in our Consumer segment and Other category, partially offset by increases in our Home and Insurance segments.

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Revenue
Revenue increased inOur Consumer segment includes the second quarter and first six months of 2019 compared to the second quarter and first six months of 2018 due to increases in our non-mortgage products of $106.7 million and $215.5 million, respectively, partially offset by decreases in our mortgage products of $12.3 million and $39.8 million, respectively.
Our non-mortgage products include the following non-mortgage lending products: credit cards, personal loans, home equity loans and lines of credit, small business loans, student loans, reverse mortgageauto loans, and auto loans. Our non-mortgage products also include insurance quotes, deposit accounts, home improvement referrals and other credit products such as credit repair and debt settlement. Revenue earned through resale of online advertising space to third parties is also included in non-mortgage products. Many of our non-mortgageConsumer segment products are not individually significant to revenue. The increase in revenueRevenue from our non-mortgage productsConsumer segment decreased in the second quarter and first six months of 20192020 from the second quarter and first six months of 2018 is2019, primarily due to increasesdecreases in our insurance, credit cards, personal loans, credit services, student loans and small business loans products, as well as resold advertising space.
Revenue from our insurance product increased to $71.9 million in the second quarter of 2019 and $139.0 million in the first six months of 2019 from immaterial amounts in the second quarter and first six months of 2018, due to the acquisition of QuoteWizard in the fourth quarter of 2018.student loans products.
Revenue from our credit cards product increased $17.3decreased $48.8 million to $7.2 million in the second quarter of 2020 from $56.0 million in the second quarter of 2019, from $38.7or 87%, and decreased $51.8 million to $58.8 million in the second quarterfirst six months of 2018, or 45%, and increased $25.7 million to2020 from $110.6 million in the first six months of 2019, from $84.9 million in the first six months of 2018, or 30%47%, primarily due to increasesthe impact of economic conditions related to the COVID-19 pandemic that caused a decrease in the number of approvals and an increasea decrease in revenue earned per approval.
Revenue from our personal loans product increased $4.9decreased $32.3 million to $8.8 million in the second quarter of 2020 from $41.1 million in the second quarter of 2019, from $36.2or 79%, and decreased $33.3 million to $40.3 million in the second quarterfirst six months of 2018, or 14%, and increased $11.4 million to2020 from $73.6 million in the first six months of 2019, from $62.2 millionor 45%, primarily due to the impact of economic conditions related to the COVID-19 pandemic that caused a contraction in the first six monthsflow of 2018, or 18%, due to an increased number of consumers completing request forms as a result of increased lender demandcapital and corresponding increases in selling and marketing efforts, partially offset by a decrease in revenue earned per consumer.
For the periods presented, no other non-mortgage productproducts in our Consumer segment represented more than 10% of revenue,revenue; however, certain other non-mortgageConsumer products experienced notable increases.changes primarily due to the impact of economic conditions related to the COVID-19 pandemic. Revenue from the resale of online advertising space to third parties increased by $5.0our small business loans product decreased $8.5 million in the second quarter of 20192020 compared to the second quarter of 20182019 and $13.4decreased $4.1 million in the first six months of 20192020 compared to the first six months of 2018.2019, due to a contraction in the flow of capital and a decrease in revenue earned per consumer. Revenue from our credit servicesstudent loans product increased by $4.4decreased $2.3 million in the second quarter of 20192020 compared to the second quarter of 20182019 and increased by $9.6decreased $5.6 million in the first six months of 20192020 compared to the first six months of 2018, primarily2019, due to the acquisition of Ovation in June 2018. Revenue from our student loans product increased by $3.0 million in the second quarter of 2019 compared to the second quarter of 2018 and increased by $8.2 million in the first six months of 2019 compared to the first six months of 2018, due to increased consumers and increased revenue earned per consumer, primarily due to the acquisition of Student Loan Hero in July 2018. Revenue from our small business loans product increased by $4.3 million in the second quarter of 2019 compared to the second quarter of 2018 and increased by $9.4 million in the first six months of 2019 compared to the first six months of 2018, due to increasesa decrease in the number of consumers on our marketplace seeking business loans and increasesstudent loans.
The ongoing COVID-19 pandemic is anticipated to significantly impact our Consumer product revenues in selling and marketing efforts, partially offset by a decrease in revenue earned per consumer.
We believe the market for our non-mortgage products remains under-penetrated and we believe long-term growth prospects are strong for non-mortgage products. Anear-term due to the significant industry-wide contraction in the availability of capital for non-mortgage products would likely adversely affect our non-mortgage product revenues.in the Consumer segment, specifically credit cards, small business loans and personal loans, as discussed above.
Our Home segment includes the following products: purchase mortgage, refinance mortgage, home equity loans and lines of credit, reverse mortgage loans, and real estate. Revenue from our mortgage products decreasedHome segment increased $2.4 million in the second quarter of 2020 from the second quarter of 2019, or 3%, and increased $18.1 million in the first six months of 2020 from the first six months of 2019, or 13%, primarily due to an increase in revenue from our refinance mortgage product, partially offset by decreases in our purchase mortgage and home equity loans and lines of credit products. Revenue from our refinance mortgage product increased $22.3 million in the second quarter of 2020 compared to the second quarter of 20182019, and increased $48.2 million in the first six months of 20192020 compared to the first six months of 20182019, primarily due to decreases in revenue from both our refinance and purchase products. Revenue from our refinance product decreased $2.5 million in the second quarter of 2019 compared to the second quarter of 2018 due to a decrease in revenue earned per consumer and decreased $23.0 million in the first six months of 2019 compared to the first six months of 2018 due to a decreasean increase in the number of consumers completing request forms as well asresulting from increased refinancing activity in a declining interest rate environment, partially offset by a decrease in revenue earned per consumer. Revenue from our purchase mortgage product decreased $9.8$10.3 million in the second quarter of 2020 compared to the second quarter of 2019 and decreased $15.2 million in the first six months of 2020 compared to the first six months of 2019. Revenue from our home equity loans and lines of credit product decreased $8.6 million in the second quarter of 2020 compared to the second quarter of 2019 and decreased $13.2 million in the first six months of 2020 compared to the first six months of 2019. Revenue from our purchase mortgage and home equity loans and lines of credit products decreased due to a shift in lender focus toward refinance products as well as decreases in revenue earned per consumer.
Revenue from our Insurance segment increased $1.0 million to $72.9 million in the second quarter of 2020 from $71.9 million in the second quarter of 2019, comparedor 1%, and increased $16.6 million to $155.7 million in the second quarterfirst six months of 2018 and decreased $16.82020 from $139.0 million in the first six months of 2019, compared to the first six months of 2018or 12%, due to a decreaseincreases in the number of consumers completing request forms, as well asseeking insurance coverage, partially offset by a decrease in revenue earned per consumer.
Our Other category primarily includes revenue from the resale of online advertising space to third parties and revenue from home improvement referrals. Revenue in the Other category decreased $5.6 million in the second quarter of 2020 compared to the second quarter of 2019, and decreased $15.5 million in the first six months of 2020 compared to the first six months of 2019, as we ceased offering home improvement referrals during the first quarter of 2019 and ceased reselling online advertising space during the first quarter of 2020.

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Cost of revenue
Cost of revenue consists primarily of costs associated with compensation and other employee-related costs (including stock-based compensation) relating to internally-operated customer call centers, third-party customer call center fees, costs for online advertising resold to third parties, credit scoring fees, credit card fees, website network hosting and server fees.
Cost of revenue increaseddecreased in the second quarter of 20192020 from the second quarter of 2018,2019, primarily due to a $5.1 million decrease for the cost of resold advertising space. We ceased reselling online advertising space during the first quarter of 2020. This was partially offset by a $1.1 million increase in website network hosting and server fees and a $0.7 million increase in compensation and benefits as a result of increases in headcount. Cost of revenue decreased in the first six months of 20192020 from the first six months of 2018,2019, primarily due to increases in compensation and benefits from increased headcounta $11.3 million decrease for the cost of $3.3 million and $6.4 million, respectively, andresold advertising space, partially offset by increases in website network hosting and server fees, compensation and benefits, and credit card fees of $0.9$2.0 million, $1.8 million and $1.4$1.0 million, respectively. Cost of revenue in the second quarter and first six months of 2019 also includes $5.1 million and $12.4 million for the cost of resold advertising space. Online advertising space resold to third parties in the second quarter and first six months of 2018 was not significant.
Cost of revenue as a percentage of revenue increased to 7% in the second quarter of 2020 compared to 6% in the second quarter of 2019, and remained consistent at 6% in each of the first six months of 2019 compared to 3% in the second quarter2020 and first six months of 2018, due to the items above.2019.
Selling and marketing expense
Selling and marketing expense consists primarily of advertising and promotional expenditures and compensation and other employee-related costs (including stock-based compensation) for personnel engaged in sales or marketing functions. Advertising and promotional expenditures primarily include online marketing, as well as television, print and radio spending. Advertising production costs are expensed in the period the related ad is first run.
The increases in sellingSelling and marketing expense decreased in the second quarter and first six months of 20192020 compared to the second quarter and first six months of 2018 were2019 primarily due to increasesdecreases in advertising and promotional expense of $63.2$77.7 million and $107.7$56.5 million, respectively, as discussed below. Selling and marketing expense also increased in the second quarter and first six months of 2019 compared to the second quarter and first six months of 2018 due to increases in compensation and benefits of $4.5 million and $8.8 million, respectively, as a result of increases in headcount.
Advertising and promotional expense is the largest component of selling and marketing expense, and is comprised of the following:
Three Months Ended June 30, Six Months Ended June 30,Three Months Ended June 30, Six Months Ended June 30,
2019 2018 
$
Change
 
%
Change
 2019 2018 
$
Change
 
%
Change
20202019$
Change
%
Change
 20202019$
Change
%
Change
(Dollars in thousands)(Dollars in thousands)
Online$169,779
 $113,289
 $56,490
 50% $318,718
 $224,709
 $94,009
 42%$96,416
$169,779
$(73,363)(43)% $269,497
$318,718
$(49,221)(15)%
Broadcast6,398
 195
 6,203
 3,181% 16,933
 3,435
 13,498
 393%3,154
6,398
(3,244)(51)% 9,478
16,933
(7,455)(44)%
Other3,373
 2,891
 482
 17% 6,485
 6,259
 226
 4%2,259
3,373
(1,114)(33)% 6,621
6,485
136
2 %
Total advertising expense$179,550
 $116,375
 $63,175
 54% $342,136
 $234,403
 $107,733
 46%$101,829
$179,550
$(77,721)(43)% $285,596
$342,136
$(56,540)(17)%
Revenue is primarily driven by Network Partner demand for our products, which is matched to corresponding consumer requests. We adjust our selling and marketing expenditures dynamically in relation to anticipated revenue opportunities in order to ensure sufficient consumer inquiries to profitably meet such demand. An increase in a product’s revenue is generally met by a corresponding increase in marketing spend, and conversely a decrease in a product’s revenue is generally met by a corresponding decrease in marketing spend. This relationship exists for both mortgageour Home, Consumer and non-mortgage products.Insurance segments.
We increaseddecreased our advertising expenditures in the second quarter and first six months of 20192020 compared to the second quarter and first six months of 20182019 in orderresponse to generate additional consumer inquiries to meet the increasedchanges in Network Partner demand of Network Partners on our marketplace.marketplace as a result of the ongoing COVID-19 pandemic discussed above. We will continue to adjust selling and marketing expenditures dynamically in relation to this and in response to anticipated revenue opportunities.
General and administrative expense
General and administrative expense consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in finance, legal, tax, corporate information technology, human resources and executive management functions, as well as facilities and infrastructure costs and fees for professional services. 

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General and administrative expense increased in the second quarter of 2019 from the second quarter of 2018, and in the first six months of 2019 from the first six months of 2018, primarily due to increases in compensation and benefits of $2.6 million and $5.9 million, respectively, as a result of increases in headcount. General and administrative expense also increased in the second quarter of 2019 from the second quarter of 2018, and in the first six months of 2019 from the first six months of 2018, due to increases in facilities expense of $1.2 million and $2.1 million, respectively, and increases in technology expense of $1.3 million and $2.2 million, respectively. General and administrative expenseremained relatively consistent in the second quarter and first six months of 2018 includes a charge of $1.6 million due to the write-off of certain fixed assets. The increases in general and administrative expense in the second quarter and first six months of 20192020 compared to the second quarter and first six months of 2018 is partially offset by2019. The second quarter and first six months of 2019 benefited from a $2.7 million gain on the sale of two office buildings. Additionally, travel and entertainment expense decreased $1.5 million in the second quarter of 2020 compared to the second quarter of 2019. General and administrative expenses decreased in the first six months of 2020 compared to the first six months of 2019 due to decreases in compensation and benefits, travel and entertainment expense and other taxes of $3.4 million, $1.8 million and $1.4 million, respectively. In addition to the change in general and administrative expenses due to the gain on the sale of the office buildings in Charlotte, North Carolina.2019, general and administrative expenses increased in the first six months of 2020 compared to the first six months of 2019 due to increases in professional fees, technology expense and facilities expense of $3.2 million, $1.6 million and $1.2 million, respectively.
General and administrative expense as a percentage of revenue decreasedincreased to 16% and 13% in the second quarter and first six months of 2020, respectively, compared to 10% and 11% in the second quarter and first six months of 2019, respectively, compared to 13% in the second quarter and first six months of 2018.respectively.
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. 
Product development expense increased in the second quarter and first six months of 20192020 compared to the second quarter and first six months of 2018,2019 as we continued to invest in internal development of new and enhanced features, functionality and business opportunities that we believe will enable us to better and more fully serve consumers and lenders.Network Partners.
Depreciation
The increase in depreciation expense in the second quarter and first six months of 20192020 compared to the second quarter and first six months of 20182019 was primarily the result of higher investment in internally developed software in recent years, to support the growth of our business.
Amortization of intangiblesContingent consideration
Amortization of intangibles increased inDuring the second quarter and first six months of 2019 compared2020, we recorded aggregate contingent consideration expense of $9.2 million and $1.1 million, respectively, due to adjustments in the estimated fair value of the earnout payments related to our recent acquisitions. For the second quarter of 2020, the contingent consideration expense for the QuoteWizard, Ovation and SnapCap acquisitions was $8.1 million, $1.0 million and $0.1 million, respectively. For the first six months of 2018 primarily due to intangible assets associated with our business2020, the contingent consideration expense for the Ovation and SnapCap acquisitions in 2018was $1.2 million and 2019.
Contingent$0.1 million, respectively, partially offset by a contingent consideration gain for the QuoteWizard acquisition of $0.2 million.
During the second quarter and first six months of 2019, we recorded aggregate contingent consideration expense of $2.8 million and $17.4 million, respectively, due to adjustments in the estimated fair value of the earnout payments related to our recent acquisitions. For the second quarter of 2019, the contingent consideration expense for the QuoteWizard and Ovation acquisitions was $2.5 million and $0.6 million, respectively. This was partially offset by contingent consideration gains recorded for the SnapCap and DepositAccounts acquisitions of $0.1 million and $0.2 million, respectively. For the first six months of 2019, the contingent consideration expense for the QuoteWizard and SnapCap acquisitions was $16.9 million and $1.5 million, respectively. This was partially offset by a contingent consideration gain recorded for the DepositAccounts acquisition of $1.0$0.9 million.
DuringIncome tax expense
For the second quarter and first six months of 2018, we recorded aggregate gains2020, the effective tax rate varied from the federal statutory rate of $0.221% in part due to a tax benefit of $0.8 million and $0.9$1.8 million, respectively, primarily due to adjustmentsrecognized for excess tax benefits resulting from employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the estimated fair valueeffect of the earnout payments related to our recent acquisitions. For the second quarter of 2018, we recorded a $0.8 million gainstate taxes. The effective tax rate for the SnapCap acquisition. This was partially offset by contingent consideration expense for the CompareCards and DepositAccounts acquisitions of $0.2 million and $0.4 million, respectively. For the first six months of 2018, we2020 was also impacted by a tax benefit of $6.1 million for the impact of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, as described below.
On March 27, 2020, President Trump signed into law the CARES Act. This legislation is an economic relief package in response to the public health and economic impacts of COVID-19 and includes various provisions that impact us, including, but not limited to, modifications for net operating losses, accelerated timeframe for refunds associated with prior minimum taxes and modifications of the limitation on business interest.

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We revalued deferred tax assets related to net operating losses in light of the changes in the CARES Act, and recorded a $2.9net tax benefit of $6.1 million gain forduring the SnapCap acquisition. Thisfirst six months of 2020. These deferred tax assets are being revalued, as they will be carried back to 2016 and 2017, which are tax periods prior to the Tax Cuts and Jobs Act ("TCJA") when the federal statutory tax rate was partially offset by contingent consideration expense for35% versus the CompareCards and DepositAccounts acquisitions21% federal statutory tax rate in effect after the enactment of $0.7 million and $1.3 million, respectively.
Income tax expensethe TCJA.
For the second quarter and first six months of 2019, the effective tax rate varied from the federal statutory rate of 21% primarily due to a tax benefit of $7.7 million and $13.7 million, respectively, recognized for excess tax benefits due toresulting from employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes.

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For the second quarter and first six months of 2018, the effective tax rate varied from the federal statutory rate of 21% primarily due to a tax benefit of $33.7 million and $60.9 million, respectively, recognized for excess tax benefits due to employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes.
There have been no changes to our valuation allowance assessment for the second quarter of 2019.
Discontinued operations
Losses fromThe results of discontinued operations are attributable to losses associated withinclude the results of the LendingTree Loans business formerly operated by our wholly-owned subsidiary, Home Loan Center, Inc., or HLC, subsidiary.HLC. The sale of substantially all of the assets of HLC, including the LendingTree Loans business, was completed on June 6, 2012. LossesHLC filed a petition under Chapter 11 of the United States Bankruptcy Code on July 21, 2019, which was converted to Chapter 7 of the United States Bankruptcy Code on September 16, 2019.
As a result of the voluntary bankruptcy petition, as of the initial July 21, 2019 bankruptcy petition filing date, HLC and its consolidated subsidiary were deconsolidated from discontinued operationsLendingTree’s consolidated financial statements. The effect of such deconsolidation was the elimination of the consolidated assets and liabilities of HLC (and its consolidated subsidiary) from LendingTree’s consolidated balance sheets.
Prior to the bankruptcy filing, losses from the LendingTree Loans business were primarily due to litigation settlements and contingencies and legal fees associated with ongoing legal proceedings.
The results of discontinued operations include litigation settlements and contingencies and legal fees associated with ongoing legal proceedings against LendingTree Inc. or LendingTree LLC that arose due to the LendingTree Loans business or the HLC bankruptcy filing.
See Note 18—Subsequent EventDiscontinued Operations to the consolidated financial statements included elsewhere in this report for a discussion of the filing under Chapter 11 of the United States Bankruptcy Code by HLC on July 21, 2019,more information, including the anticipated accounting effect of HLC’s bankruptcy filing on our future consolidated financial statements.
Segment Profit
 Three Months Ended June 30, Six Months Ended June 30,
 20202019$
Change
%
Change
 20202019$
Change
%
Change
 (Dollars in thousands)
Home$38,726
$24,210
$14,516
60 % $74,637
$48,131
$26,506
55 %
Consumer19,402
50,771
(31,369)(62)% 62,501
104,745
(42,244)(40)%
Insurance30,122
28,806
1,316
5 % 60,655
56,670
3,985
7 %
Other81
345
(264)(77)% (247)1,104
(1,351)(122)%
Segment profit$88,331
$104,132
$(15,801)(15)% $197,546
$210,650
$(13,104)(6)%
See also Part II, Item 1A.Segment profit is our primary segment operating metric. Segment profit is calculated as segment revenue less segment selling and marketing expenses attributed to variable costs paid for advertising, direct marketing and related expenses that are directly attributable to the segments' products. Risk FactorsSee belowNote 17—Segment Information in the notes to the consolidated financial statements for furtheradditional information on risks associatedsegments and a reconciliation of segment profit to pre-tax income from continuing operations.
Consumer segment profit decreased $31.4 million in the second quarter of 2020 from the second quarter of 2019, and decreased $42.2 million in the first six months of 2020 from the first six months of 2019, primarily due to decreases in revenue, partially offset by corresponding decreases in selling and marketing expense. The biggest challenge facing many of our consumer Network Partners, and in turn our own business, is a lack of visibility into the true health of consumer balance sheets. Credit performance across consumer lenders of varying shapes and sizes has seemingly fared better than expected, and unemployment has begun to improve after peaking at nearly 15% in April. But questions remain as to the impact on these trends from government stimulus, forbearance and deferment programs offered by the lenders, and ultimately, our country's ability to re-open safely.

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Credit card issuers and personal loan lenders appetite for risk is temporarily diminished until there is further evidence of economic stabilization. We do believe the revenue opportunity in our Consumer segment has hit the trough as many of our consumer Network Partners who initially paused entirely are beginning to return to the platform. In most cases, those consumer Network Partners are returning to reach narrower bands of consumers, with HLC’s bankruptcy filing.much stricter credit standards, smaller budgets, and less aggressive bids.
Home segment profit increased $14.5 million in the second quarter of 2020 from the second quarter of 2019, and increased $26.5 million in the first six months of 2020 from the first six months of 2019, due to increases in revenue and decreases in selling and marketing expense. Historically, as explained, in periods similar to those experienced in the second quarter of 2020 with sharp declines in interest rates and increased consumer interest, our mortgage Network Partners become inundated with more organic volume than they can process and their demand for our services diminishes for a period of time. While that dynamic has remained very relevant for us in the second quarter, our improved ability to withstand it is evident. We've developed differentiated offerings and price points for mortgage Network Partners to better serve a wider array of their needs. Our Home segment has benefited from a decrease in unit marketing costs during the COVID-19 pandemic. With heightened interest in refinancing and home-buying activity, we managed to meet the demand of our Network Partners in an optimized and cost-efficient way. We expect Home unit marketing costs in the third quarter of 2020 to return to levels experienced prior to the second quarter of 2020.
Insurance segment profit increased $1.3 million in the second quarter of 2020 from the second quarter of 2019 due to an increase in revenue and a decrease in selling and marketing expense, and increased $4.0 million in the first six months of 2020 from the first six months of 2019 due to an increase in revenue, partially offset by corresponding increases in selling and marketing expense. At the end of the first quarter of 2020, we noted a slowdown in consumers searching for auto insurance which we attributed to slumping car sales amid the pandemic. While those trends have steadily begun to recover since early April, reduced search engine traffic has continued to present a modest headwind to achieving the levels of growth in the Insurance segment that we've historically experienced and we have taken on several initiatives to combat these trends. We've seen demonstrable traffic growth through several non-search channels and the agent portion of the Insurance segment is achieving record-highs as agents find increasing value in our services in a remote work environment.
Adjusted EBITDA
We report Adjusted EBITDA as a supplemental measure to GAAP. This measure is the primary metric by which we evaluate the performance of our businesses, on which our marketing expenditures and internal budgets are based and by which management and many employees are compensated. We believe that investors should have access to the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. We provide and encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures discussed below.
Definition of Adjusted EBITDA
We report Adjusted EBITDA as net income from continuing operations adjusted to exclude interest, income tax, amortization of intangibles and depreciation, and to further exclude (1) non-cash compensation expense, (2) non-cash impairment charges, (3) gain/loss on disposal of assets, (4) restructuring and severance expenses, (5) litigation settlements and contingencies, (6) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent consideration), and (7) one-time items. Adjusted EBITDA has certain limitations in that it does not take into account the impact to our statement of operations of certain expenses, including depreciation, non-cash compensation and acquisition-related accounting. We endeavor to compensate for the limitations of the non-GAAP measures presented by also providing the comparable GAAP measures with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. These non-GAAP measures may not be comparable to similarly titled measures used by other companies. 
One-Time Items
Adjusted EBITDA is adjusted for one-time items, if applicable. Items are considered one-time in nature if they are non-recurring, infrequent or unusual and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with SEC rules. For the periods presented in this report,below, there are no adjustments for one-time items.

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Non-Cash Expenses that are Excluded from Adjusted EBITDA
Non-cash compensation expense consists principally of expense associated with grants of restricted stock, restricted stock units and stock options, some of which awards have performance-based vesting conditions. These expenses are not paid in cash, and we include the related shares in our calculations of fully diluted shares outstanding. Upon settlement of restricted stock units, exercise of certain stock options or vesting of restricted stock awards, the awards may be settled, on a net basis, with us remitting the required tax withholding amount from our current funds.
Amortization of intangibles are non-cash expenses relating primarily to intangible assets acquired through acquisitions. At the time of an acquisition, the intangible assets of the acquired company, such as purchase agreements, technology and customer relationships, are valued and amortized over their estimated lives.

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The following table is a reconciliation of net income from continuing operations to Adjusted EBITDA (in thousands).
Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
Three Months Ended
June 30,
 Six Months Ended
June 30,
2019 2018 2019 20182020 2019 2020 2019
Net income from continuing operations$12,981
 $44,849
 $13,531
 $80,706
Net (loss) income from continuing operations$(8,616) $12,981
 $10,360
 $13,531
Adjustments to reconcile to Adjusted EBITDA: 
  
     
  
    
Amortization of intangibles14,280
 3,964
 27,707
 7,927
13,756
 14,280
 27,513
 27,707
Depreciation2,559
 1,633
 5,041
 3,304
3,550
 2,559
 6,928
 5,041
Severance403
 3
 457
 3
32
 403
 190
 457
(Gain) loss on impairments and disposal of assets(2,196) 1,797
 (1,978) 1,889
Loss (gain) on impairments and disposal of assets22
 (2,196) 552
 (1,978)
Non-cash compensation expense15,982
 11,178
 30,035
 22,287
13,158
 15,982
 25,075
 30,035
Change in fair value of contingent consideration2,790
 (167) 17,382
 (908)9,175
 2,790
 1,053
 17,382
Acquisition expense60
 625
 179
 687
20
 60
 2,200
 179
Litigation settlements and contingencies8
 (170) (199) (192)(1,325) 8
 (996) (199)
Interest expense, net5,095
 2,924
 10,563
 5,912
4,955
 5,095
 9,789
 10,563
Rental amortization of intangibles and depreciation
 194
 
 396
Income tax benefit(5,689) (29,721) (13,441) (53,182)(3,880) (5,689) (6,941) (13,441)
Adjusted EBITDA$46,273
 $37,109
 $89,277
 $68,829
$30,847
 $46,273
 $75,723
 $89,277
Financial Position, Liquidity and Capital Resources
General
As of June 30, 2019,2020, we had $51.3$101.8 million of cash and cash equivalents, compared to $105.1$60.2 million of cash and cash equivalents as of December 31, 2018.2019.
In the first six months of 2019, we purchased an aggregate of 17,501 shares of our common stock pursuant to a stock repurchase program for $4.0 million.
In May 2019, we completed the sale of two office buildings in Charlotte, North Carolina to an unrelated third party for a sale price of $24.4 million. We received proceeds of $24.1 million, net of closing fees of $0.3 million.
In January 2019,February 2020, we acquired ValuePenguinan equity interest in Stash for $106.2 million in cash.$80.0 million. The acquisitioninvestment was funded through $90.0$80.0 million drawn on our Amended Revolving Credit Facility andFacility. See Note 7—Equity Investment to the balance using cash on hand.consolidated financial statements included elsewhere in this report for more information.
During the first six months of 2019,2020, we paid down $100.0$25.0 million on our Amended Revolving Credit Facility. We made net repayments of $130.0 million on our Amended Revolving Credit Facility in July 2020.
During the first six months of 2019,2020, we made atwo contingent consideration paymentpayments of $3.0 million each, related to the prior acquisition of SnapCap and total contingent consideration payments of $3.0 million related to the prior acquisition of DepositAccounts.
SnapCap. We could make additional potential contingent consideration payments of up to $1.0 million for DepositAccounts, $6.0 million for SnapCap, $8.8$4.4 million for Ovation and $70.2$46.8 million for QuoteWizard.
In July 2020, we made litigation settlement payments of $26.5 million to the ResCap Liquidating Trust and $36.0 million to the HLC bankruptcy Trustee for the matters noted in Note 18—Discontinued Operations.

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In July 2020, we issued $575.0 million of our 0.50% Convertible Senior Notes due July 15, 2025 (the “2025 Notes”) for estimated net proceeds of approximately $559.8 million. We used approximately $63.0 million of the net proceeds to enter into Convertible Note Hedge and Warrant transactions. Further, we used approximately $234.0 million of the net proceeds to repurchase approximately $130.3 million principal amount of our 0.625% Convertible Senior Notes due June 1, 2022 (the “2022 Notes”). To the extent of the repurchases of the 2022 Notes, we received approximately $15.6 million as a result of terminating a corresponding portion of the Convertible Note Hedge and Warrant transactions entered into on May 31, 2017. See Note 19—Subsequent Events for additional information.
We expect our cash and cash equivalents and cash flows from operations to be sufficient to fund our operating needs for the next twelve months and beyond. Our amended and restated revolving credit facility described below is an additional potential source of liquidity. We will continue to monitor the impact of the ongoing COVID-19 pandemic on our liquidity and capital resources. We expect our cashflow from operating activities to be negatively impacted by the economic recession.
Senior Secured Revolving Credit Facility
On October 26, 2018,December 10, 2019, we entered into an amended ourand restated $500.0 million five-year senior secured revolving credit facility, which matures on November 21, 2022December 10, 2024 (the “Revolving“Amended Revolving Credit Facility”) to increase its borrowing capacity by $100.0 million to $350.0 million.. Borrowings under the Amended Revolving Credit Facility can be used to finance working capital needs, capital expenditures and general corporate purposes, including to finance permitted acquisitions. AsIn July 2020, we executed a temporary amendment to the Amended Revolving Credit Facility to provide for certain covenant relief, primarily to facilitate the issuance of July 26, 2019, we have $100.0 millionthe 2025 Notes, the repurchase of a portion of the 2022 Notes, and to pay down existing borrowings under the credit facility.
As of August 4, 2020, we have a $0.2 million letter of credit under the Amended Revolving Credit Facility.

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The remaining borrowing capacity at August 4, 2020 is $499.8 million.
Cash Flows from Continuing Operations
Our cash flows attributable to continuing operations are as follows:
Six Months Ended June 30,Six Months Ended
June 30,
2019 20182020 2019
(in thousands)(in thousands)
Net cash provided by operating activities$67,875
 $15,264
$87,916
 $67,875
Net cash used in investing activities(90,838) (18,441)(89,108) (90,838)
Net cash used in financing activities(24,653) (71,890)
Net cash provided by (used in) financing activities45,282
 (24,653)
Cash Flows from Operating Activities
Our largest source of cash provided by our operating activities is revenues generated by our mortgage and non-mortgage products. Our primary uses of cash from our operating activities include advertising and promotional payments. In addition, our uses of cash from operating activities include compensation and other employee-related costs, other general corporate expenditures, litigation settlements and contingencies, certain contingent consideration payments, and income taxes.
Net cash provided by operating activities attributable to continuing operations increased in the first six months of 20192020 from the first six months of 20182019 primarily due primarily to an increasechanges in revenue,accounts receivable, partially offset by an increase in selling and marketing expense and cost of revenue. Additionally, cash from changes in working capital increased primarily as a result of changes in accounts payable, accrued expenses and other current liabilities,liabilities. The first six months of 2020 also experienced a decrease in revenue, partially offset by changesa corresponding decrease in accounts receivable. selling and marketing expense, compared to the first six months of 2019.
Cash flowsFlows from operatingInvesting Activities
Net cash used in investing activities attributable to continuing operations in the first six months of 2018 also included the $21.92020 of $89.1 million portionconsisted of the CompareCards earnout payment madepurchase of an $80.0 million equity interest in the second quarterStash and capital expenditures of 2018 in excess of the contingent consideration liability recognized at the acquisition date.
Cash Flows from Investing Activities$9.1 million primarily related to internally developed software.
Net cash used in investing activities attributable to continuing operations in the first six months of 2019 of $90.8 million consisted primarily of the acquisition of ValuePenguin for $105.6 million, net of cash acquired, and capital expenditures of $9.8

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million primarily related to internally developed software. This was partially offset by proceeds of $24.1 million on the sale of two office buildings, net of closing expenses.
Cash Flows from Financing Activities
Net cash used in investingprovided by financing activities attributable to continuing operations in the first six months of 20182020 of $18.4$45.3 million consisted primarily of the acquisition$55.0 million of Ovation for $11.7net proceeds from our Amended Revolving Credit Facility, partially offset by $6.1 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of cash acquired,proceeds from the exercise of stock options, and capital expenditures of $6.7$3.3 million primarily related to internally developed software.
Cash Flows from Financing Activitiescontingent consideration payments for SnapCap.
Net cash used in financing activities attributable to continuing operations in the first six months of 2019 of $24.7 million consisted primarily of $10.0 million of net repayments on our 2017 Revolving Credit Facility, $4.0 million for the repurchase of our common stock, $7.6 million in withholding taxes paid upon surrender of shares to satisfy obligations on equity awards, net of proceeds from the exercise of stock options, and a $3.0 million of contingent consideration paymentspayment for SnapCap.
Net cash used in financing activities attributable to continuing operations in the first six months of 2018 of $71.9 million consisted primarily of $25.6 million of contingent consideration payments for CompareCards, DepositAccounts and SimpleTuition and $47.1 million for the repurchase of our stock.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements other than a letter of credit and our funding commitments pursuant to our surety bonds, none of which have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
New Accounting Pronouncements
For information regarding new accounting pronouncements, see Note 2Significant Accounting Policies, in Part I, Item 1 Financial Statements.

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Item 3.  Quantitative and Qualitative Disclosures about Market Risk
Other than our Amended Revolving Credit Facility, we do not have any financial instruments that are exposed to significant market risk. We maintain our cash and cash equivalents in bank deposits and short-term, highly liquid money market investments. A hypothetical 100-basis point increase or decrease in market interest rates would not have a material impact on the fair value of our cash equivalents securities, or our earnings on such cash equivalents, but would have an effect on the interest paid on borrowings under the Amended Revolving Credit Facility, if any. As of July 26, 2019,August 4, 2020, there was $100.0 million borrowedwere no borrowings under the Amended Revolving Credit Facility. If the LIBO rate increased by 100-basis points, our annual interest expense would increase by approximately $1.0 million. Increases in the Federal Funds interest rates may also affect potential contingent consideration payments to DepositAccounts. See Note 7—Business Acquisitions—Changes in Contingent Consideration—DepositAccounts in Part I, Item 1. Financial Statements.

Fluctuations in interest rates affect consumer demand for new mortgages and the level of refinancing activity which, in turn, affects lender demand for mortgage leads. Typically, when interest rates decline, we see increased consumer demand for mortgage refinancing, which in turn leads to increased traffic to our website and decreased selling and marketing efforts associated with that traffic.  At the same time, lender demand for leads from third-party sources typically decreases, as there are more consumers in the marketplace seeking refinancings and, accordingly, lenders receive more organic lead volume.  Due to lower lender demand, our revenue earned per consumer typically decreases but with correspondingly lower selling and marketing costs. Conversely, when interest rates increase, we typically see decreased consumer demand for mortgage refinancing, leading to decreased traffic to our website and higher associated selling and marketing efforts associated with that traffic.  At the same time, lender demand for leads from third-party sources typically increases, as there are fewer consumers in the marketplace and, accordingly, the supply of organic mortgage lead volume decreases.  Due to high lender demand, we typically see an increase in the amount lenders will pay per matched lead, which often leads to higher revenue earned per consumer. However, increases in the amount lenders will pay per matched lead in this situation is limited by the overall cost models of our lenders, and our revenue earned per consumer can be adversely affected by the overall reduced demand for refinancing in a rising rate environment. See also the risk factor "Adverse conditions in the primary and secondary mortgage markets, as well as the general economy, could materially and adversely affect our business, financial condition and results of operations," in Part I, Item 1A (Risk Factors) in our 2018 Annual Report.
Item 4.  Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), management, with the participation of our principal executive officer (our Chief Executive Officer) and principal financial officer (our Chief Financial Officer), evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures

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as defined in Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective, as of June 30, 2019,2020, to reasonably ensure that information required to be disclosed and filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified, and that management will be timely alerted to material information required to be included in our periodic reports filed with the Securities and Exchange Commission.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the quarter ended June 30, 20192020 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.


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PART II—OTHER INFORMATION
Item 1.  Legal Proceedings
In the ordinary course of business, we are party to litigation involving property, contract, intellectual property and a variety of other claims. The amounts that may be recovered in such matters may be subject to insurance coverage. We have provided information about certain legal proceedings in which we are involved in Part I, Item 3. Legal Proceedings of our 20182019 Annual Report and updated that information in Note 1415—Contingencies and Note 18—Discontinued Operations to the consolidated financial statements included elsewhere in this report.
Item 1A.  Risk Factors
Other than the risk factor set forth below, there have been no material changes to the risk factors included in Part I, Item 1A. Risk Factors of our 20182019 Annual Report.

We are subject to risks relating to the bankruptcy ofThe COVID-19 pandemic has impacted our Home Loan Center, Inc. subsidiary, including risks of claims against us and our operating subsidiaries
Our subsidiary Home Loan Center, Inc., or HLC, filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, which we refer to as the Bankruptcy Code, in order to preserve assets for the benefit of all creditors of HLC. We refer to HLC’s filingbusiness, and the subsequent process under the Bankruptcy Code as the HLC bankruptcy.
In its filings with the Bankruptcy Court, HLC has indicated that it believes it has claims against HLC’s sole shareholder, our operating subsidiary LendingTree, LLC, and its former sole director (our Chairman and Chief Executive Officer), relating to the declaration of a dividend by HLC in January 2016 of $40.0 million. We believe the declaration of the dividend was proper, that the amounts paid to LendingTree, LLC following such declaration are not subject to recovery by HLC and that any claims by HLC relating to the dividend declaration are without merit. We have commenced settlement talks with HLC, and if we are not able to settle HLC’s claims relating to such dividend declaration on terms we deem acceptable, we intend to vigorously contest such claims. Any settlement agreement with HLC we might enter into would be subject to approval by the Bankruptcy Court, which may not be obtained. See Note 18—Subsequent Event to the consolidated financial statements included elsewhere in this report for a discussion of the anticipated accounting effect of HLC’s bankruptcy filing on our future consolidated financial statements.
It is possible that the HLC bankruptcy will lead other creditors of HLC to assert claims directly against our company or one or more of our wholly-owned subsidiaries not included as debtors in the HLC bankruptcy, which we refer to as non-debtor parties, on various legal theories. While we are not aware of a basis for any material claims of this nature, any such assertions of claims by HLC creditors may require significant effort (including management time), resources and money to defend and could result in losses to us. Moreover, our management may be required to spend a significant amount of time and effort dealing with the HLC bankruptcy, which could have an adverseultimate impact on our abilitybusiness, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities in response to executethe pandemic.
The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets, and increased unemployment levels. In addition, the pandemic has resulted in temporary closures of many businesses and the institution of social distancing and sheltering in place requirements in many states and communities. As a result, the demand for our products, in particular in our Consumer segment, has been and may continue to be significantly impacted. Within our Consumer segment we have seen reductions of over 70% in near-term lender demand for our services reflecting those lenders' uncertainty over the length and depth of the economic recession. Our business operations may also be disrupted if significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, or other restrictions in connection with the pandemic. The extent to which the COVID-19 pandemic impacts our business, planfinancial condition and operations.results of operations, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
In each of February 2018 and February 2019, the board of directors authorized and we announced a stock repurchase program which allowed for the repurchase of up to $100.0 million and $150.0 million, respectively, of our common stock. Under this program, we can repurchase stock in the open market or through privately-negotiated transactions. We have used available cash to finance these repurchases. We will determine the timing and amount of any additional repurchases based on our evaluation of market conditions, applicable SEC guidelines and regulations, and other factors. This program may be suspended or discontinued at any time at the discretion of our board of directors. NoDuring the quarter ended June 30, 2020, no shares of common stock were repurchased under the stock repurchase program during the quarter ended June 30, 2019.program. As of July 19, 201929, 2020, approximately $181.2$179.7 million remains authorized for share repurchase.

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Additionally, the LendingTree Sixth Amended and Restated 2008 Stock and Award Incentive Plan and the LendingTree 2017 Inducement Grant Plan allow employees to forfeit shares of our common stock to satisfy federal and state withholding obligations upon the exercise of stock options, the settlement of restricted stock unit awards and the vesting of restricted stock awards granted to those individuals under the plans. During the quarter ended June 30, 2019, 7,7412020, 7,724 shares were purchased related to these obligations under the LendingTree Sixth Amended and Restated 2008 Stock and Award Incentive Plan and 14,998711 shares were purchased related to these obligations under the LendingTree 2017 Inducement Grant Plan. The withholding of those shares does not affect the dollar amount or number of shares that may be purchased under the stock repurchase program described above.

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The following table provides information about the company's purchases of equity securities during the quarter ended June 30, 2019.2020.
Period 
Total Number of
Shares Purchased (1)
 
Average Price
Paid per Share
 
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (2)
 
Approximate
Dollar Value of Shares
that May Yet be
Purchased Under the
Plans or Programs
        (in thousands)
4/1/19 - 4/30/19 1,715
 $367.69
 
 $181,167
5/1/19 - 5/31/19 2,026
 $379.52
 
 $181,167
6/1/19 - 6/30/19 18,998
 $412.13
 
 $181,167
Total 22,739
 $405.88
 
 $181,167
Period 
Total Number of
Shares Purchased (1)
 
Average Price
Paid per Share
 
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (2)
 
Approximate
Dollar Value of Shares
that May Yet Be
Purchased Under the
Plans or Programs
        (in thousands)
4/1/20 - 4/30/20 480
 $195.19
 
 $179,673
5/1/20 - 5/31/20 870
 $245.33
 
 $179,673
6/1/20 - 6/30/20 7,085
 $279.74
 
 $179,673
Total 8,435
 $271.38
 
 $179,673
(1)During April 2019,2020, May 20192020 and June 2019, 1,7152020, 480 shares, 2,026870 shares and 18,9987,085 shares, respectively (totaling 22,7398,435 shares), were purchased to satisfy federal and state withholding obligations of our employees upon the settlement of restricted stock units and restricted stock awards, all in accordance with our Sixth Amended and Restated 2008 Stock and Award Incentive Plan and 2017 Inducement Grant Plan, as described above.
(2)See the narrative disclosure above the table for further description of our publicly announced stock repurchase program.
Item 5.    Other Information

None.

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Item 6.  Exhibits
Exhibit Description Location
     
3.1
  Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed August 25, 2008
3.2
  Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed November 15, 2017
10.1
  Exhibit 10.1
10.2
10.3
10.4
31.1
  
31.2
  
32.1
  ††
32.2
  ††
101.INS
 
XBRL Instance Document  The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
 †††
101.SCH
 XBRL Taxonomy Extension Schema Document †††
101.CAL
 XBRL Taxonomy Extension Calculation Linkbase Document †††
101.DEF
 XBRL Taxonomy Extension Definition Linkbase Document †††
101.LAB
 XBRL Taxonomy Extension Label Linkbase Document †††
101.PRE
 XBRL Taxonomy Extension Presentation Linkbase Document †††
104
Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101)†††

† Filed herewithherewith.
†† Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
††† Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.


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SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Date: July 26, 2019August 4, 2020
 
 LENDINGTREE, INC.
   
 By:/s/ J.D. MORIARTY
  J.D. Moriarty
  Chief Financial Officer
  (principal financial officer and duly authorized officer)


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