LendingTree, Inc.
Oct 30, 2009

Tree.com Reports Q309 Results and Adds New Warehouse Line

CHARLOTTE, N.C., Oct 30, 2009 (GlobeNewswire via COMTEX News Network) -- Tree.com, Inc. (Nasdaq:TREE) today announced that it has added a new $75 million warehouse line as well as its financial results for its third quarter ended September 30, 2009. Tree's Q309 revenue was $50.7 million, which was a slight improvement over Q308 revenue of $50.3 million. Tree reported a GAAP loss of $0.68 per share on a net loss of $7.4 million, both improved over the Q308 levels of a $2.41 loss per share and a $22.6 million net loss. Q309 Adjusted EBITDA was a loss of $3.5 million, which was a $4.8 million improvement year-over-year, from a Q308 Adjusted EBITDA loss of $8.3 million.

Doug Lebda, Chairman and CEO of Tree.com, stated, "We are very pleased to announce that we added a new $75 million warehouse line at LendingTree Loans, giving that business financial stability and even more capacity to expand our business. We remain enthusiastic about executing our long-term strategy. As you will see in our results, we are beginning to see real traction in our Education and Home Services verticals. We are encouraged that demand from our Network lenders is improving, meaning we can obtain a higher number of multiple offers for each consumer and our new tools and services on the site are getting great reception."

Tree.com CFO Matt Packey added, "Overall, we are pleased with our Q3 operating results, even as two unanticipated items negatively impacted our bottom line. As we stated previously, we expected the surge in refinance activity from earlier this year to subside and our Adjusted EBITDA to return to break-even levels for Q3 and Q4. However, continued high levels of loan loss settlement requests prompted us to increase our provision for loan losses by $4.2 million in the quarter and our legal fees were approximately $1.0 million higher than expected, principally because of the Mortech lawsuit."



 ----------------------------------------------------------------------
                   Tree.com Summary Financial Results
               $s in millions (except per share amounts)
 ----------------------------------------------------------------------

                                     Q3     Q2    Q/Q %    Q3    Y/Y %
                                    2009   2009   Change  2008   Change
                                   ------  -----  -----  ------  ------
 Revenue                           $ 50.7  $61.0  (17%)  $ 50.3     1%

 Net Income/(Loss)                 $ (7.4) $ 0.7    NM   $(22.6)   67%

 EBITDA *                          $ (4.7) $ 4.3    NM   $(18.5)   75%
 Adjusted EBITDA *                 $ (3.5) $ 8.2    NM   $ (8.3)   57%

 Net Income/(Loss) Per Share       $(0.68) $0.07    NM   $(2.41)   72%
 Diluted Net Income/(Loss)
  Per Share                        $(0.68) $0.07    NM   $(2.41)   72%
 ----------------------------------------------------------------------
 NM = Not Meaningful
 * See separate reconciliation of Adjusted EBITDA and EBITDA to
   Operating Income/Loss.

Information Regarding Q3 Results



 * Q309 revenue increased 1% from Q308 and decreased 17% from Q209.
   The year-over-year increase was driven by solid improvements in
   the number of funded units at LendingTree Loans and the
   expansion of our Exchanges offerings into Education and Home
   Services in the quarter.  The quarter-over-quarter decline in
   revenue was primarily driven by the rapid rise in interest rates
   from historical lows, as seen in the chart below, causing fewer
   closings than the prior quarter.  This impact was offset
   somewhat by the revenue earned by the recently acquired
   education lead generation business.

 * Adjusted EBITDA improved $4.8 million year-over-year, primarily
   from higher margins at LendingTree Loans and lower operating
   expenses across three of our four operating segments.  Q309
   Adjusted EBITDA decreased $11.7 million quarter-over-quarter as
   consumer request-to-conversion rates and our advertising
   spending returned to normal levels from the Q209 levels that
   were supported by historically low interest rates.

A chart describing average 30-year fixed mortgage rate recent trends is available at http://media.globenewswire.com/cache/10613/file/7527.pdf

Business Unit Discussion

LENDINGTREE LOANS SEGMENT



 ----------------------------------------------------------------------
                      LendingTree Loans Segment Results
                               $s in millions
 ----------------------------------------------------------------------
                                     Q3     Q2    Q/Q %    Q3    Y/Y %
                                    2009   2009   Change  2008   Change
                                   ------ ------  -----  ------  ------
 Revenue - Direct Lending
  Origination and Sale of Loans    $ 22.5 $ 34.4   (35%) $ 17.9    26%
  Other                            $  1.6 $  1.9   (16%) $  2.1   (24%)
                                   ------ ------  -----  ------  ------
 Total Revenue - Direct Lending    $ 24.1 $ 36.3   (34%) $ 20.0    21%

 Cost of Revenue *                 $ 11.2 $ 14.0   (20%)  $ 9.2    22%

 Operating Expenses*               $ 11.2 $ 10.1    11%  $ 11.5    (3%)
                                   ------ ------  -----  ------  ------

 EBITDA                            $  1.7 $ 13.2   (87%) $ (3.0)    NM
 Adjusted EBITDA                   $  1.7 $ 12.2   (86%) $ (0.7)    NM

 Metrics - Direct Lending
  Purchased loan requests (000s)     63.0   66.5    (5%)   86.3   (27%)
  Closed - units (000s)               2.8    4.0   (30%)    2.4    17%
  Closed - units (dollars)         $620.2 $898.0   (31%) $637.6    (3%)
 ----------------------------------------------------------------------
 * Does not include non-cash compensation, depreciation, gain/loss on
   disposal of assets, restructuring, amortization or impairment. See
   separate reconciliation of Adjusted EBITDA and EBITDA to Operating
   Income/Loss.

LendingTree Loans

Continuing to show indications of a potential recovery in the mortgage market, Q309 revenue from the origination and sale of loans increased 26% from the same period last year on a 17% increase in funded units.

Following a period of unusually low interest rates and significant media attention on refinancing in Q1 and Q2, LendingTree Loans revenue decreased 34% in Q309 compared to Q209 on 30% fewer funded units, which was partially offset by a 25% decrease in provision for loan losses quarter-over-quarter.

Operating expenses decreased $0.3 million year-over-year on lower lead acquisition costs and increased $1.1 million quarter-over-quarter as advertising spend was returned to normal levels following the reduced spend in Q2.

EXCHANGES SEGMENT



 ----------------------------------------------------------------------
                         Exchanges Segment Results
                               $s in millions
 ----------------------------------------------------------------------
                               Q3        Q2      Q/Q %    Q3      Y/Y %
                              2009      2009    Change   2008    Change
                            --------  --------  -----  --------  ------
 Revenue - Exchanges
  Match Fees                $   12.4  $    9.9   26%   $   12.1    3%
  Closed Loan Fees          $    5.3  $    6.4  (17%)  $    8.2  (35%)
  Inter-segment Revenue     $    5.3  $    3.7   44%   $    4.8   12%
  Other                     $    0.9  $    0.6   53%   $    0.5   98%
                            --------  --------  -----  --------  ------
 Total Revenue - Exchanges  $   23.9  $   20.6   16%   $   25.6   (7%)

 Cost of Revenue *          $    1.9  $    2.0   (3%)  $    2.5  (22%)

 Operating Expenses*        $   18.3  $   15.3   19%   $   23.3  (21%)
                            --------  --------  -----  --------  ------

 EBITDA                     $    3.6  $    2.7   36%   $   (1.4)   NM
 Adjusted EBITDA            $    3.7  $    3.3   13%   $   (0.2)   NM

 Metrics - Exchanges
  Matched requests (000s)      340.7     333.2    2%      390.1  (13%)
  Closing - units (000s)        10.5      13.1  (20%)      21.1  (50%)
  Closing - units (dollars) $1,851.3  $2,613.1  (29%)  $2,862.2  (35%)
 ----------------------------------------------------------------------
 NM = Not Meaningful
 * Does not include non-cash compensation, depreciation, gain/loss on
   disposal of assets, restructuring, amortization or impairment. See
   separate reconciliation of Adjusted EBITDA and EBITDA to Operating
   Income/Loss.

Exchanges

Exchanges revenue in Q309 increased 16% compared to Q209 and decreased 7% compared to the same period in 2008. On a quarter-over-quarter basis, Exchanges revenue improved largely due to match fees earned through our new education vertical and increases in transfer fees to LendingTree Loans. The decrease in revenue year-over-year continues to reflect the weaker closing revenue due to continued tight consumer credit markets, making it difficult for many consumers to qualify for a loan.

Operating expenses increased $3.0 million quarter-over-quarter and decreased $5.0 million year-over-year. The increase quarter-over-quarter was largely due to variable marketing expense, which was up 25%, reflecting the uptick in spend to drive traffic since Q2 when very low rates and high levels of media attention were prompting consumers to refinance. On a year-over-year basis we've continued to trim operating costs back and increase the efficiencies of our marketing spend.

REAL ESTATE SEGMENT



 ----------------------------------------------------------------------
                       Real Estate Segment Results
                              $s in millions
 ----------------------------------------------------------------------
                               Q3        Q2     Q/Q %     Q3     Y/Y %
                              2009      2009    Change   2008    Change
                            --------  --------  -----  --------  ------
 Total Revenue -
  Real Estate               $    8.0  $    7.8    3%   $    9.8   (18%)

 Cost of Revenue *          $    5.0  $    4.8    3%   $    5.8   (15%)

 Operating Expenses*        $    3.6  $    3.7   (2%)  $    4.8   (26%)
                            --------  --------  -----  --------  ------

 EBITDA                     $   (0.8) $   (4.6)  83%   $   (3.5)   78%
 Adjusted EBITDA            $   (0.6) $   (0.7)   4%   $   (0.8)   19%

 Metrics - Real Estate
  Closing - units (000s)         1.4       1.5   (5%)       2.1   (30%)
  Closing - units (dollars) $  330.4  $  332.4   (1%)  $  516.1   (36%)
  Agents - RealEstate.com,
   REALTORS(R)                 1,304     1,365   (4%)     1,070    22%
 Markets - RealEstate.com,
   REALTORS(R)                    20        20    0%         14    43%
 ----------------------------------------------------------------------
 * Does not include non-cash compensation, depreciation, gain/loss on
   disposal of assets, restructuring, amortization or impairment. See
   separate reconciliation of Adjusted EBITDA and EBITDA to Operating
   Income/Loss.

Real Estate

Q309 Real Estate revenue increased $0.2 million or 3% from Q209 and decreased $1.8 million or 18% from Q308. The year-over-year decrease in Real Estate revenue is attributed to declines in our referral networks, which experienced decreases in closings and transaction values year-over-year from persistent negative market conditions.

Operating expenses decreased $0.1 million quarter-over-quarter and decreased $1.2 million year-over-year. The decreases in operating expense were primarily due to decreases in marketing expenses related to the continued progress in marketing efficiency driven by ongoing innovation on the RealEstate.com Web site, as well as general and administrative reductions reflecting our prior cost cutting initiatives.

CORPORATE



 ---------------------------------------------------------------------
             Unallocated Corporate Costs and Eliminations
                              $s in millions
 ---------------------------------------------------------------------
                              Q3       Q2     Q/Q %     Q3     Y/Y %
                             2009     2009    Change   2008    Change
                            ------   ------   ----   -------   -----
 Inter-segment Revenue -
  elimination               $ (5.2)  $ (3.7)   42%   $  (5.1)    2%

 Cost of Revenue *          $  0.5   $  0.5    10%   $   0.5     1%

 Inter-segment Marketing -
  elimination               $ (5.2)  $ (3.7)   42%   $  (4.8)   10%

 Operating Expenses*        $  7.8   $  6.1    27%   $   5.8    36%
                            ------   ------   ----   -------   -----

 EBITDA                     $ (9.2)  $ (7.0)  (31%)  $ (10.6)   13%
 Adjusted EBITDA            $ (8.3)  $ (6.6)  (25%)  $  (6.6)  (25%)
 ---------------------------------------------------------------------
 * Does not include non-cash compensation, depreciation, gain/loss on
   disposal of assets, restructuring, amortization or impairment. See
   separate reconciliation of Adjusted EBITDA and EBITDA to Operating
   Income/Loss.

Corporate

The eliminations both in revenue and in marketing were primarily associated with the inter-segment transfer pricing charged from Exchanges to LendingTree Loans for leads. Operating expenses increased $1.7 million quarter-over-quarter and $2.0 million year-over-year. The quarter-over-quarter and year-over-year increases in operating expense were primarily related to increases in professional fees, including legal for the Mortech lawsuit, and various corporate matters and public company costs.

Liquidity and Capital Resources

As of September 30, 2009, Tree.com had $86.9 million in unrestricted cash and cash equivalents, compared to $83.7 million as of June 30, 2009. The increase in cash was driven by a $7.5 million net cash inflow related to timing of the origination and sale of loans and warehouse line activity and $5.1 million of net working capital changes. These increases were offset by $5.5 million of cash used for acquisitions and capital expenditures, an Adjusted EBITDA loss of $3.5 million for the quarter and $0.4 million cash paid for taxes on equity compensation instruments that vested in the period.

The loans held for sale and warehouse lines of credit balances as of September 30, 2009 were $81.9 million and $67.1 million, respectively. As separately announced, we have also entered into an agreement with a new lender for a $75 million warehouse line with a term through October 29, 2010.

Conference Call

Tree.com will audio cast its conference call with investors and analysts discussing the Company's third quarter financial results on Friday, October 30, 2009 at 11:00 a.m. Eastern Time (ET). This call will include the disclosure of certain information, including forward-looking information, which may be material to an investor's understanding of Tree.com's business. The live audio cast is open to the public at http://investor-relations.tree.com/.

QUARTERLY FINANCIALS



                     TREE.COM, INC. AND SUBSIDIARIES

                  CONSOLIDATED STATEMENTS OF OPERATIONS
                              (Unaudited)


                                Three Months Ended   Six Months Ended
                                   September 30,       September 30,
                                ------------------  ------------------
                                  2009      2008      2009      2008
                                --------------------------------------
                               (In thousands, except per share amounts)
 Revenue
   LendingTree Loans            $ 24,109  $ 19,993  $ 94,738  $ 76,049
   Exchanges and other            18,610    20,484    52,662    76,007
   Real Estate                     7,997     9,781    21,549    28,378
                                --------  --------  --------  --------
  Total revenue                   50,716    50,258   168,949   180,434
 Cost of revenue
   LendingTree Loans              11,245     9,194    37,104    32,407
   Exchanges and other             2,389     3,425     7,387    11,497
   Real Estate                     5,056     5,954    13,712    16,731
                                --------  --------  --------  --------
  Total cost of revenue
  (exclusive of depreciation
  shown separately below)         18,690    18,573    58,203    60,635
                                --------  --------  --------  --------
  Gross margin                    32,026    31,685   110,746   119,799
 Operating expenses
  Selling and marketing
   expense                        17,435    23,282    45,149    81,028
  General and administrative
   expense                        17,529    22,672    51,335    58,358
  Product development              1,673     1,797     4,842     5,349
  Restructuring expense               78     2,394      (158)    4,557
  Amortization of intangibles      1,055     2,204     3,636     9,532
  Depreciation                     1,698     1,791     5,049     5,337
  Asset impairments                   --        --     3,903   164,335
                                --------  --------  --------  --------
   Total operating expenses       39,468    54,140   113,756   328,496
                                --------  --------  --------  --------
   Operating loss                 (7,442)  (22,455)   (3,010) (208,697)
 Other income (expense)
   Interest income                     9         2        84        13
   Interest expense                 (149)     (169)     (451)     (497)
   Other                              --        (2)       --        (4)
                                --------  --------  --------  --------
 Total other income
  (expense), net                    (140)     (169)     (367)     (488)
                                --------  --------  --------  --------
 Loss before income taxes         (7,582)  (22,624)   (3,377) (209,185)
 Income tax (provision) benefit      182        73      (121)   13,915
                                --------  --------  --------  --------
 Net loss                       ($ 7,400) ($22,551) ($ 3,498)($195,270)
                                ========  ========  ========  ========
 Weighted average common
  shares outstanding              10,844     9,367    10,413     9,367
                                ========  ========  ========  ========
 Weighted average diluted
  shares outstanding              10,844     9,367    10,413     9,367
                                ========  ========  ========  ========
 Net loss per share available
  to common shareholders
  Basic                         ($  0.68) ($  2.41) ($  0.34) ($ 20.85)
                                ========  ========  ========  ========
  Diluted                       ($  0.68) ($  2.41) ($  0.34) ($ 20.85)
                                ========  ========  ========  ========


                         TREE.COM, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                                Sept. 30,    Dec. 31,
                                                  2009         2008
                                               ----------   ----------
                                               (unaudited)

                                                   (In thousands,
                                                except share amounts)

 ASSETS:
 Cash and cash equivalents                     $   86,859   $   73,643
 Restricted cash and cash equivalents              12,826       15,204
 Accounts receivable, net of allowance of
  $418 and $367, respectively                       8,114        7,234
 Loans held for sale ($80,116 and $85,638
  measured at fair value, respectively)            81,931       87,835
 Prepaid and other current assets                  10,298        8,960
                                               ----------   ----------
  Total current assets                            200,028      192,876
 Property and equipment, net                       13,320       17,057
 Goodwill                                          13,185        9,285
 Intangible assets, net                            60,148       64,663
 Other non-current assets                             495          202
                                               ----------   ----------
  Total assets                                 $  287,176   $  284,083
                                               ==========   ==========

 LIABILITIES:
 Warehouse lines of credit                     $   67,129   $   76,186
 Accounts payable, trade                            5,431        3,541
 Deferred revenue                                   1,633        1,231
 Deferred income taxes                              1,199        2,290
 Accrued expenses and other current
  liabilities                                      42,042       37,146
                                               ----------   ----------
  Total current liabilities                       117,434      120,394
 Income taxes payable                                 470          862
 Other long-term liabilities                       11,042        9,016
 Deferred income taxes                             17,167       15,683
                                               ----------   ----------
  Total liabilities                               146,113      145,955

 SHAREHOLDERS' EQUITY:
 Preferred stock $.01 par value; authorized
  5,000,000 shares; none issued or outstanding         --           --
 Common stock $.01 par value; authorized
  50,000,000 shares; issued and outstanding
  10,892,405 and 9,369,381 shares,
  respectively                                        109           94
 Additional paid-in capital                       900,995      894,577
 Accumulated deficit                             (760,041)    (756,543)
                                               ----------   ----------
  Total shareholders' equity                      141,063      138,128
                                               ----------   ----------
  Total liabilities and shareholders' equity   $  287,176   $  284,083
                                               ==========   ==========


                         TREE.COM, INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENT OF CASH FLOWS

                                   (Unaudited)

                                                 Nine Months Ended
                                                    September 30,
                                               -----------------------
                                                  2009         2008
                                               ----------   ----------
                                                   (In thousands)

 Cash flows from operating activities:
 Net loss                                      $   (3,498)  $ (195,270)
 Adjustments to reconcile loss to net cash
  provided by (used in) operating activities:
  Loss on disposal of assets                          949           --
  Amortization of intangibles                       3,636        9,532
  Depreciation                                      5,049        5,337
  Intangible impairment                             3,903       33,378
  Goodwill impairment                                  --      130,957
  Non-cash compensation expense                     3,060       10,024
  Non-cash restructuring expense                      161        1,092
  Deferred income taxes                               393      (13,916)
  Gain on origination and sale of loans           (89,701)     (68,739)
  Loss on impaired loans not sold                     564          265
  Loss on sale of real estate acquired in
   satisfaction of loans                               51          202
  Bad debt expense                                    325          577
  Non-cash interest expense                            --           76
 Changes in current assets and liabilities:
  Accounts receivable                              (1,208)       2,812
  Origination of loans                         (2,232,380)  (1,728,458)
  Proceeds from sales of loans                  2,335,100    1,816,273
  Principal payments received on loans                781          697
  Payments to investors for loan losses and
   early payoff obligations                        (5,641)      (3,780)
  Prepaid and other current assets                 (1,149)       2,988
  Accounts payable and other current
   liabilities                                      3,580      (17,842)
  Income taxes payable                               (551)       2,376
  Deferred revenue                                   (130)        (309)
 Other, net                                         1,154         (118)
                                               ----------   ----------
 Net cash provided by (used in) operating
  activities                                       24,448      (11,846)
                                               ----------   ----------
 Cash flows from investing activities:
  Contingent acquisition consideration                 --      (14,487)
  Acquisitions                                     (5,726)          --
  Capital expenditures                             (2,200)      (3,322)
  Other, net                                        3,253         (142)
                                               ----------   ----------
 Net cash (used in) investing activities           (4,673)     (17,951)
                                               ----------   ----------
 Cash flows from financing activities:
  Borrowing under warehouse lines of credit     1,964,237    1,586,413
  Repayments of warehouse lines of credit      (1,973,294)  (1,609,036)
  Principal payments on long-term obligations          --      (20,045)
  Capital contributions from IAC                       --      109,417
  Issuance of common stock                          3,373           --
  Excess tax benefits from stock?based awards          --          393
  Increase in restricted cash                        (875)        (872)
                                               ----------   ----------
 Net cash (used in) provided by financing
  activities                                       (6,559)      66,270
                                               ----------   ----------
 Net increase in cash and cash equivalents         13,216       36,473
 Cash and cash equivalents at beginning
  of period                                        73,643       45,940
                                               ----------   ----------
 Cash and cash equivalents at end of period    $   86,859   $   82,413
                                               ==========   ==========




 TREE.COM'S RECONCILIATION OF SEGMENT RESULTS TO GAAP ($s in thousands)

                     For the Three Months Ended September 30, 2009:
                 -----------------------------------------------------
                LendingTree              Real   Unallocated--
                   Loans    Exchanges   Estate    Corporate    Total
                 ---------  ---------  ---------  ---------  ---------
 Revenue          $ 24,109   $ 23,854   $  7,997   ($ 5,244)  $ 50,716
 Cost of revenue
  (exclusive of
  depreciation
  shown
  separately
  below)            11,245      1,849      5,056        540     18,690
                 ---------  ---------  ---------  ---------  ---------
   Gross Margin     12,864     22,005      2,941     (5,784)    32,026
 Operating
  Expenses:
   Selling and
    marketing
    expense          5,820     15,637      1,221     (5,243)    17,435
   General and
    administ-
    rative
    expense          5,276      1,934      2,075      8,244     17,529
   Product
    development        165        762        363        383      1,673
   Restructuring
    expense            (54)        50         53         29         78
   Amortization
    of
    intangibles         70        337        641          7      1,055
   Depreciation        741        246        302        409      1,698
                 ---------  ---------  ---------  ---------  ---------
   Total
    operating
    expenses        12,018     18,966      4,655      3,829     39,468
                 ---------  ---------  ---------  ---------  ---------
 Operating
  income (loss)        846      3,039     (1,714)    (9,613)    (7,442)
 Adjustments to
  reconcile to
  EBITDA and
  Adjusted
  EBITDA:
   Amortization
    of
    intangibles         70        337        641          7      1,055
   Depreciation        741        246        302        409      1,698
 EBITDA              1,657      3,622       (771)    (9,197)    (4,689)
   Restructuring
    expense            (54)        50         53         29         78
   Non-cash
    compensation        63         48         79        877      1,067
                 ---------  ---------  ---------  ---------  ---------
 Adjusted
  EBITDA          $  1,666   $  3,720   ($   639)  ($ 8,291)  ($ 3,544)
                 =========  =========  =========  =========  =========


                     For the Three Months Ended September 30, 2008:
                 -----------------------------------------------------
                LendingTree              Real   Unallocated--
                   Loans    Exchanges   Estate    Corporate    Total
                 ---------  ---------  ---------  ---------  ---------
 Revenue          $ 19,993   $ 25,625   $  9,781   ($ 5,141)  $ 50,258
 Cost of
  revenue
  (exclusive of
  depreciation
  shown
  separately
  below)             9,194      2,896      5,954        529     18,573
                 ---------  ---------  ---------  ---------  ---------
   Gross Margin     10,799     22,729      3,827     (5,670)    31,685
 Operating
  Expenses:
   Selling and
    marketing
    expense          5,022     21,218      1,803     (4,761)    23,282
   General
    and
    adminis-
    trative
    expense          6,304      1,858      5,035      9,475     22,672
   Product
    development        171      1,009        493        124      1,797
   Restructuring
    expense          2,336         22        (28)        64      2,394
   Amortization
    of
    intangibles         70      1,046      1,088         --      2,204
   Depreciation        894        197        248        452      1,791
                 ---------  ---------  ---------  ---------  ---------
   Total
    operating
    expenses        14,797     25,350      8,639      5,354     54,140
                 ---------  ---------  ---------  ---------  ---------
 Operating loss     (3,998)    (2,621)    (4,812)   (11,024)   (22,455)
 Adjustments
  to reconcile
  to EBITDA and
  Adjusted
   EBITDA:
   Amortization
    of
    intangibles         70      1,046      1,088         --      2,204
   Depreciation        894        197        248        452      1,791
                 ---------  ---------  ---------  ---------  ---------
 EBITDA             (3,034)    (1,378)    (3,476)   (10,572)   (18,460)
   Restructuring
    expense          2,336         22        (28)        64      2,394
   Non-cash
    compensation        --      1,189      2,715      3,901      7,805
                 ---------  ---------  ---------  ---------  ---------
 Adjusted
  EBITDA         $   (698)  $    (167) $    (789) $  (6,607) $  (8,261)
                 =========  =========  =========  =========  =========



                    For the Nine Months Ended September 30, 2009:
                 -----------------------------------------------------
                LendingTree              Real   Unallocated--
                   Loans    Exchanges   Estate    Corporate    Total
                 ---------  ---------  ---------  ---------  ---------
 Revenue         $  94,738  $  63,551  $  21,549  $(10,889)  $ 168,949
 Cost of revenue
  (exclusive of
  depreciation
  shown
  separately
  below)            37,104      5,760     13,712      1,627     58,203
                 ---------  ---------  ---------  ---------  ---------
   Gross Margin     57,634     57,791      7,837    (12,516)   110,746
 Operating
  Expenses:
   Selling and
    marketing
    expense         12,032     40,079      3,919    (10,881)    45,149
   General and
    adminis-
    trative
    expense         16,524      7,390      7,130     20,291     51,335
   Product
    development        412      2,201      1,244        985      4,842
   Restructuring
    expense         (1,246)       108        792        188       (158)
   Amortization
    of
    intangibles        210        493      2,926          7      3,636
   Depreciation      2,287        643        849      1,270      5,049
   Asset
    impairments         --         --      3,903         --      3,903
                 ---------  ---------  ---------  ---------  ---------
   Total
    operating
    expenses        30,219     50,914     20,763     11,860    113,756
                 ---------  ---------  ---------  ---------  ---------
 Operating
  income
  (loss)            27,415      6,877    (12,926)   (24,376)    (3,010)
 Adjustments to
  reconcile to
  EBITDA and
  Adjusted
  EBITDA:
   Amortization
    of
    intangibles        210        493      2,926          7      3,636
   Depreciation      2,287        643        849      1,270      5,049
                 ---------  ---------  ---------  ---------  ---------
 EBITDA             29,912      8,013     (9,151)   (23,099)     5,675
   Restructuring
    expense         (1,246)       108        792        188       (158)
   Asset
    impairments         --         --      3,903         --      3,903
   Loss on
    disposal of
    assets              --        949         --         --        949
   Non-cash
    compensation       199        467        210      2,184      3,060
                 ---------  ---------  ---------  ---------  ---------
 Adjusted
  EBITDA         $  28,865  $   9,537  $  (4,246) $ (20,727) $  13,429
                 =========  =========  =========  =========  =========


                     For the Nine Months Ended September 30, 2008:
                 -----------------------------------------------------
                LendingTree              Real   Unallocated--
                   Loans    Exchanges   Estate    Corporate    Total
                 ---------  ---------  ---------  ---------  ---------
 Revenue         $  76,049  $  92,813  $  28,378  $ (16,806) $ 180,434
 Cost of revenue
  (exclusive of
  depreciation
  shown
  separately
  below)            32,407      9,864     16,731      1,633     60,635
                 ---------  ---------  ---------  ---------  ---------
   Gross Margin     43,642     82,949     11,647    (18,439)   119,799
 Operating
  Expenses:
   Selling and
    marketing
    expense         16,661     73,981      6,217    (15,831)    81,028
   General and
    adminis-
    trative
    expense         19,023      5,750     11,973     21,612     58,358
   Product
    development        575      2,852      1,759        163      5,349
   Restructuring
    expense          3,142        173        485        757      4,557
   Amortization
    of
    intangibles        210      6,038      3,284         --      9,532
   Depreciation      2,544        577        702      1,514      5,337
   Asset
    impairments        898    102,630     60,807         --    164,335
                 ---------  ---------  ---------  ---------  ---------
   Total
    operating
    expenses        43,053    192,001     85,227      8,215    328,496
                 ---------  ---------  ---------  ---------  ---------
 Operating
  income (loss)        589   (109,052)   (73,580)   (26,654)  (208,697)
 Adjustments to
  reconcile to
  EBITDA and
  Adjusted
  EBITDA:
   Amortization
    of
    intangibles        210      6,038      3,284         --      9,532
   Depreciation      2,544        577        702      1,514      5,337
                 ---------  ---------  ---------  ---------  ---------
 EBITDA              3,343   (102,437)   (69,594)   (25,140)  (193,828)
   Restructuring
    expense          3,142        173        485        757      4,557
   Asset
    impairments        898    102,630     60,807         --    164,335
   Non-cash
    compensation        --      1,519      3,432      5,073     10,024
                 ---------  ---------  ---------  ---------  ---------
 Adjusted EBITDA $   7,383  $   1,885  $  (4,870) $ (19,310) $ (14,912)
                 =========  =========  =========  =========  =========



About Tree.com, Inc.

Tree.com, Inc. (Nasdaq:TREE) is the parent of several brands and businesses in the financial services and real estate industries including LendingTree(R), LendingTree Loans(SM), GetSmart(R), Home Loan Center, RealEstate.com, iNest(R), and RealEstate.com, REALTORS(R). Together, they serve as an ally for consumers who are looking to comparison shop loans, real estate and other financial products from multiple businesses and professionals who compete for their business.

Tree.com, Inc. is headquartered in Charlotte, N.C. and maintains operations solely in the United States. For more information, please visit www.tree.com.

The Tree.com, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5367

Segment Information

The overall concept that Tree.com employs in determining its reportable segments and related financial information is to present them in a manner consistent with how the chief operating decision maker and executive management view the businesses, how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered or the target market.

Following the spin-off from IAC, the new chief operating decision maker began to realign the Tree.com businesses into new operating segments. In the first quarter of 2009, management completed its realignment of staffing and direct revenue and costs for each new segment and created reporting structures to enable the chief operating decision maker and management to evaluate the results of operations for each of these new segments on a comparative basis with prior periods. In prior periods, the segments "Lending" and "Real Estate" were presented, which have been changed to "LendingTree Loans", "Exchanges", and "Real Estate" segments. Additionally, certain shared indirect costs that are described below are reported as "Unallocated - Corporate". All items of segment information for prior periods have been restated to conform to the new reportable segment presentation.

The expenses presented for each of the business segments include an allocation of certain corporate expenses that are identifiable and directly benefit those segments. The unallocated expenses are those corporate overhead expenses that are not directly attributable to a segment and include: corporate expenses such as finance, legal, executive, technology support, and human resources, as well as elimination of inter-segment revenue and costs.



 LendingTree Loans
 The LendingTree Loans segment originates, processes, approves and
 funds various residential real estate loans through Home Loan
 Center, Inc. ("HLC") (d/b/a LendingTree Loans).  The HLC and
 LendingTree Loans brand names are collectively referred to as
 "LendingTree Loans."

 Exchanges
 The Exchanges segment consists of online lead generation networks
 and call centers (principally LendingTree.com and GetSmart.com)
 that connect consumers and service providers principally in the
 lending and higher education marketplaces.

 Real Estate
 Real Estate consists of a proprietary full service real estate
 brokerage (RealEstate.com, REALTORS(R)) that operates in 20 U.S.
 markets, as well as an online lead generation network accessed at
 www.RealEstate.com, that connects consumers with real estate
 brokerages around the country.

Definition of Tree.com's Non-GAAP Measures

Tree.com reports Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), and adjusted for certain items discussed below ("Adjusted EBITDA"), as supplemental measures to GAAP. These measures are two of the primary metrics by which Tree.com evaluates the performance of its businesses, on which its internal budgets are based and by which management is compensated. Tree.com believes that investors should have access to the same set of tools that it uses in analyzing its results. These non-GAAP measures 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. Tree.com provides and encourages investors to examine the reconciling adjustments between the GAAP and non-GAAP measure which are discussed below.

Adjusted EBITDA is defined as EBITDA excluding (1) non-cash compensation expense, (2) non-cash intangible asset impairment charges, (3) gain/loss on disposal of assets, (4) restructuring expenses, (5) proceeds from litigation settlements, (6) pro forma adjustments for significant acquisitions, and (7) one-time items. Tree.com believes this measure is useful to investors because it represents the operating results from Tree.com's segments, but excludes the effects of any other non-cash expenses. Adjusted EBITDA has certain limitations in that it does not take into account the impact to Tree.com's statement of operations of certain expenses, including depreciation, non-cash compensation and acquisition related accounting. Tree.com endeavors to compensate for the limitations of the non-GAAP measure presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure.

Pro Forma Results

Tree.com will only present EBITDA and Adjusted EBITDA on a pro forma basis if it views a particular transaction as significant in size or transformational in nature. For the periods presented in this release, there are no transactions that Tree.com has included on a pro forma basis.

One-Time Items

EBITDA and Adjusted EBITDA are presented before one-time items, if applicable. These items are truly one-time in nature and 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 release, there are no one-time items.

Non-Cash Expenses That Are Excluded From Tree.com's Non-GAAP Measures

Non-cash compensation expense consists principally of expense associated with the grants of restricted stock units and stock options. These expenses are not paid in cash, and Tree.com will include the related shares in its future calculations of fully diluted shares outstanding. Upon vesting of restricted stock units and the exercise of certain stock options, the awards will be settled, at Tree.com's discretion, on a net basis, with Tree.com remitting the required tax withholding amount from its current funds.

Amortization and impairment of intangibles are non-cash expenses relating primarily to 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.

Reconciliation of EBITDA and Adjusted EBITDA

For a reconciliation of EBITDA and Adjusted EBITDA to operating income (loss) for Tree.com's operating segments for the three and nine months ended September 30, 2009 and 2008, see the table above.

Interest Rate Risk

Tree.com's exposure to market rate risk for changes in interest rates relates primarily to its interest rate lock commitments, loans held for sale, and LendingTree Loans' lines of credit.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

The matters contained in the discussion above may be considered to be "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. Those statements include statements regarding the intent, belief or current expectations or anticipations of the Company and members of our management team. Factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: our ability to operate effectively as a separate public entity following our spin-off from IAC in August 2008; additional costs associated with operating as an independent company; volatility in our stock price and trading volume; our ability to obtain financing on acceptable terms; limitations on our ability to enter into transactions due to spin-related restrictions; adverse conditions in the primary and secondary mortgage markets and in the economy; adverse conditions in our industries; adverse conditions in the credit markets and the inability to renew or replace warehouse lines of credit; seasonality in our businesses; potential liabilities to secondary market purchasers; changes in our relationships with network lenders, real estate professionals, credit providers and secondary market purchasers; breaches of our network security or the misappropriation or misuse of personal consumer information; our failure to provide competitive service; our failure to maintain brand recognition; our ability to attract and retain customers in a cost-effective manner; our ability to develop new products and services and enhance existing ones; competition from our network lenders and affiliated real estate professionals; our failure to comply with existing or changing laws, rules or regulations, or to obtain and maintain required licenses; failure of our network lenders or other affiliated parties to comply with regulatory requirements; failure to maintain the integrity of our systems and infrastructure; liabilities as a result of privacy regulations; failure to adequately protect our intellectual property rights or allegations of infringement of intellectual property rights; changes in our management; and deficiencies in our disclosure controls and procedures and internal control over financial reporting. These and additional factors to be considered are set forth under "Risk Factors" in our Annual Report on Form 10-K for the period ended December 31, 2008, our Quarterly Reports on Form 10-Q for the periods ended March 31, 2009 and June 30, 2009, and in our other filings with the Securities and Exchange Commission. 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.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Tree.com, Inc.

CONTACT:  Investor Relations
877-640-4856
tree.com-investor.relations@tree.com

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