LendingTree, Inc.
Jul 29, 2010

Tree.com Reports Second Quarter 2010 Results

CHARLOTTE, N.C., July 29, 2010 /PRNewswire via COMTEX News Network/ -- Tree.com, Inc. (Nasdaq: TREE) today announced second quarter 2010 Adjusted EBITDA of $3.4 million, an improvement of $2.6 million over the prior quarter and a $4.8 million decrease from the second quarter 2009. Tree's second quarter 2010 revenue was $45.8 million, down from $48.0 million in the first quarter 2010. Tree reported a GAAP loss of $0.07 per share on a net loss of $0.8 million, an improvement over the $0.56 GAAP loss per share in the prior quarter on a net loss of $6.1 million.

Doug Lebda, Chairman and CEO of Tree.com stated, "Overall, I am pleased with our performance in the second quarter. Both the Exchanges and the LendingTree Loans segments each reported another quarter of positive Adjusted EBITDA. In addition, our real estate segment was virtually breakeven after posting Adjusted EBITDA losses in the last two quarters. While clearly our results in Q2 were strong, we expect the second half of 2010 will be more challenging as we face the likelihood of rising interest rates in the latter part of the year."

Tree.com SVP Tamara Kotronis added, "We continue to focus on disciplined spending throughout the enterprise, and this along with the unanticipated drop in interest rates contributed to our solid results. Given the impact of an anticipated increase in interest rates by late 2010, coupled with a normal seasonal downturn in Q4, we expect our Adjusted EBITDA to be between breakeven and $4.0 million in the second half of 2010."

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


                                                               Q/Q
                                        Q2 2010   Q1 2010   % Change
                                        -------   -------   --------
    Revenue                                $45.8     $48.0        (5%)

    Cost of Revenue *                      $13.2     $14.0        (6%)

    Operating Expenses*                    $29.2     $33.2       (12%)
                                           -----     -----

    Adjusted EBITDA **                      $3.4      $0.8        309%
    EBITDA **                               $2.0     $(2.9)        NM

    Restructuring                           $0.4      $2.6       (83%)

    Net Income/(Loss)                      $(0.8)    $(6.1)        87%

    Net Income/(Loss) Per Share           $(0.07)   $(0.56)        88%
    Diluted Net Income/(Loss) Per Share   $(0.07)   $(0.56)        88%





                                                               Y/Y
                                             Q2 2009        % Change
                                             -------        --------
    Revenue                                     $61.0            (25%)

    Cost of Revenue *                           $21.3            (38%)

    Operating Expenses*                         $31.4             (7%)
                                                -----

    Adjusted EBITDA **                           $8.2            (58%)
    EBITDA **                                    $4.3            (53%)

    Restructuring                               $(1.1)             NM

    Net Income/(Loss)                            $0.7              NM

    Net Income/(Loss) Per Share                 $0.07              NM
    Diluted Net Income/(Loss) Per Share         $0.07              NM




    NM = Not Meaningful
    * Does not include non-cash compensation, depreciation, gain/loss
    on disposal of assets, restructuring, amortization, impairment, or
    litigation settlements and contingencies.
    ** See separate reconciliation of Adjusted EBITDA and EBITDA to GAAP
    Net Income/Loss.

Information Regarding Q2 Results

(Photo: http://www.newscom.com/cgi-bin/prnh/20100729/CL42418 )

(Photo: http://photos.prnewswire.com/prnh/20100729/CL42418 )

Source: Freddie Mac: Primary Mortgage Market Survey

Freddie Mac's Primary Mortgage Market Survey consists of the average of 125 lenders' rates who contributed rates to Freddie Mac. The rates are based on 30-year fixed rate mortgage with 20% down and 80% finance over the life of the loan.

Business Unit Discussion

LENDINGTREE LOANS SEGMENT

     LendingTree Loans Segment Results
                                       $s in millions


                                                               Q/Q
                               Q2 2010       Q1 2010        % Change
                               -------       -------        --------
    Revenue - Direct Lending
      Origination and Sale of
       Loans                      $24.0         $23.4               3%
      Other                        $2.6          $2.3              10%
                                   ----          ----
    Total Revenue -Direct
     Lending                      $26.6         $25.7               4%

    Cost of Revenue *              $9.3         $10.2             (8%)

    Operating Expenses*           $12.7         $12.7             (1%)
                                  -----         -----

    Adjusted EBITDA **             $4.6          $2.8              67%
    EBITDA **                      $4.5          $2.6              73%

    Operating Income(Loss)         $4.1          $2.1              92%

    Metrics - Direct Lending
      Purchased loan requests
       (000s)                      67.1          59.2              13%
      Closed - units (000s)         2.8           2.7               4%
      Closed -units (dollars)    $610.4        $608.5               0%






                                                  Y/Y
                                Q2 2009        % Change
                                -------        --------
    Revenue - Direct Lending
      Origination and Sale of
       Loans                       $34.4            (30%)
      Other                         $1.9              33%
                                    ----
    Total Revenue -Direct
     Lending                       $36.3            (26%)

    Cost of Revenue *              $14.0            (33%)

    Operating Expenses*            $10.1              25%
                                   -----

    Adjusted EBITDA **             $12.2            (62%)
    EBITDA **                      $13.2            (66%)

    Operating Income(Loss)         $12.4            (67%)

    Metrics - Direct Lending
      Purchased loan requests
       (000s)                       66.5               1%
      Closed - units (000s)          4.0            (30%)
      Closed -units (dollars)     $898.0            (32%)




    NM = Not Meaningful
    * Does not include non-cash compensation, depreciation, gain/loss
    on disposal of assets, restructuring, amortization, impairment, or
    litigation settlements and contingencies.
    ** See separate reconciliation of Adjusted EBITDA and EBITDA to GAAP
    Net Income/Loss.

LendingTree Loans

Second quarter 2010 revenue increased 4% quarter-over-quarter on slightly higher closed units. Second quarter revenue decreased 26% from the same period last year on 30% fewer closed units. This year-over-year decline was expected as the second quarter of 2009 was highlighted by extraordinary levels of refinance loan activity that was not anticipated to repeat in 2010.

Operating expenses were virtually flat quarter-over-quarter and $2.7 million higher year-over-year largely driven by increased marketing spend. The increase in marketing over second quarter 2009 is the result of greater lead volume and a higher transfer price for leads purchased from the Exchanges. The increase in Purchased Loan Requests, both quarter-over-quarter and year-over-year, was the result of a greater portion of Exchanges volume being sent to LendingTree Loans. Also contributing to this increase was a late-quarter spike in refinance volume as interest rates continued to decline to record lows as seen in the rate chart above.

EXCHANGES SEGMENT

     Exchanges Segment Results
                               $s in millions


                                                    Q/Q
                                Q2 2010  Q1 2010  % Change
                                -------  -------  --------
    Revenue - Exchanges
      Match Fees                   $11.7    $14.2      (18%)
      Closed Loan Fees              $2.0     $3.3      (39%)
      Inter-segment Revenue         $7.5     $7.7       (3%)
      Other                         $0.7     $0.9      (16%)
                                    ----     ----
    Total Revenue - Exchanges      $21.9    $26.1      (16%)

    Cost of Revenue *               $0.9     $1.1      (16%)

    Operating Expenses*            $18.0    $21.3      (15%)
                                   -----    -----

    Adjusted EBITDA **              $3.0     $3.7      (19%)
    EBITDA **                       $2.8     $3.2      (14%)
    Operating Income(Loss)          $2.0     $2.6      (24%)

    Metrics - Exchanges
      Matched requests (000s)      271.1    337.1      (20%)
      Closing - units (000s)         8.4      9.1       (8%)
      Closing - units (dollars)  1,481.2  1,663.4      (11%)






                                                          Y/Y
                                        Q2 2009         % Change
                                        -------         --------
    Revenue - Exchanges
      Match Fees                            $9.9               18%
      Closed Loan Fees                      $6.4             (69%)
      Inter-segment Revenue                 $3.7              102%
      Other                                 $0.6               26%
                                            ----
    Total Revenue - Exchanges              $20.6                6%

    Cost of Revenue *                       $2.0             (53%)

    Operating Expenses*                    $15.3               17%
                                           -----

    Adjusted EBITDA **                      $3.3              (8%)
    EBITDA **                               $2.7                4%
    Operating Income(Loss)                  $2.4             (16%)

    Metrics - Exchanges
      Matched requests (000s)              333.2             (19%)
      Closing - units (000s)                13.6             (38%)
      Closing - units (dollars)          2,750.5             (46%)




    NM = Not Meaningful
    * Does not include non-cash compensation, depreciation, gain/loss
    on disposal of assets, restructuring, amortization, impairment, or
    litigation settlements and contingencies.
    ** See separate reconciliation of Adjusted EBITDA and EBITDA to GAAP
    Net Income/Loss.

Exchanges

Exchanges revenue in second quarter 2010 declined 16% quarter-over-quarter and increased 6% year-over-year. Match fee revenue declined 18% quarter-over-quarter but grew 18% year-over-year. The quarter-over-quarter decline is largely due to fewer matched loan requests on the lending exchanges. While there was a spike in consumer demand late in the second quarter, driven by reductions in interest rates, those same low rates caused lower lender demand for leads. The Exchanges also saw quarter-over-quarter reductions in matched consumer requests in our non-mortgage verticals. This decline is partially due to a reduction in marketing spend on our Home Services vertical and fewer transmitted leads in the Education vertical. The quarter-over-quarter decline in Education transmits was due to in part to normal seasonality and increased competition in the marketplace; however, we expect this volume to grow as we test new avenues for lead volume.

The year-over-year increase in match fees reflect pricing action taken in late 2009, which increased the emphasis on match revenue by increasing match fees and decreasing the average closed loan fee paid by lenders. Consequently, both the quarter-over-quarter and year-over-year decline in closed loan revenue is due primarily to the same pricing action. Despite lower revenue quarter-over-quarter, our non-mortgage verticals continue to be an important part of the company's diversification strategy. For the second consecutive quarter, non-mortgage consumer services such as Education, Auto and Home Services accounted for more than 50% of our total matched consumer requests. Inter-segment revenue increased significantly year-over-year reflecting higher volume sold and a higher transfer price (cost plus margin) charged to LendingTree Loans.

Operating expenses decreased $3.3 million quarter-over-quarter and increased $2.7 million year-over-year. The quarter-over-quarter decrease is primarily the result of lower marketing expense on both the lending exchanges and the non-mortgage verticals. On a year-over-year basis, the higher operating expense reflects higher marketing spend when compared to the very low levels in second quarter 2009 as a result of the market-driven surge in refinance activity. Also year-over-year, the latest quarter reflects operating expenses in the new non-mortgage verticals that did not exist in second quarter 2009.

REAL ESTATE SEGMENT

     Real Estate Segment Results
                                 $s in millions


                                                                    Q/Q
                            Q2 2010             Q1 2010           % Change
                            -------             -------           --------
    Total Revenue -
     Real Estate                  $4.7                $3.9               21%

    Cost of Revenue *             $2.8                $2.5               13%

    Operating
     Expenses*                    $1.9                $2.3             (17%)
                                  ----                ----

    Adjusted EBITDA **            $0.0               $(0.9)              98%
    EBITDA **                    $(0.4)              $(1.0)              56%
    Operating
     Income(Loss)                $(1.3)              $(1.9)              30%

    Metrics -Real
     Estate
      Closing -units
       (000s)                      1.0                 0.8               23%
      Closing -units
       (dollars)                $200.0              $164.6               22%
      Agents -
       RealEstate.com,
        REALTORS(R)                804                 910             (12%)
      Markets -
       RealEstate.com,
        REALTORS(R)                 20                  20                0%






                                                Y/Y
                            Q2 2009           % Change
                            -------           --------
    Total Revenue -
     Real Estate                  $7.8             (40%)

    Cost of Revenue *             $4.8             (42%)

    Operating
     Expenses*                    $3.7             (47%)
                                  ----

    Adjusted EBITDA **           $(0.7)              98%
    EBITDA **                    $(4.6)              91%
    Operating
     Income(Loss)                $(6.0)              78%

    Metrics -Real
     Estate
      Closing -units
       (000s)                      1.5             (32%)
      Closing -units
       (dollars)                $332.4             (40%)
      Agents -
       RealEstate.com,
        REALTORS(R)              1,365             (41%)
      Markets -
       RealEstate.com,
        REALTORS(R)                 20                0%




    NM = Not Meaningful
    * Does not include non-cash compensation, depreciation, gain/loss
    on disposal of assets, restructuring, amortization, impairment, or
    litigation settlements and contingencies.
    ** See separate reconciliation of Adjusted EBITDA and EBITDA to GAAP
    Net Income/Loss.

Real Estate

Second quarter 2010 Real Estate revenue increased $0.8 million, or 21%, quarter-over-quarter on 23% more closed units. This is a reflection of an anticipated seasonal increase in the number of closed transactions, and is a welcome change to what had been several quarters of decline in both closed units and average home prices. Despite the second quarter uptick, Real Estate revenue was down $3.1 million, or 40%, year-over-year, primarily due to continued declines in the number of total real estate transactions, down 32% year-over-year, and lower average home prices, down 11% year-over-year. Additionally, second quarter 2010 ended with 12% fewer agents quarter-over-quarter and 41% fewer agents year-over-year. Recruiting and retaining quality agents is a priority. This reduction in gross agent count is primarily due to field managers' focus on retaining agents best able to take advantage of our warm transferred internet leads, online lead management, training, and transaction systems.

Adjusted EBITDA improved $0.9 million quarter-over-quarter and $0.7 million year-over-year. The quarter-over-quarter improvement was driven by the higher revenue in the period. The primary driver of the year-over-year improvement in Adjusted EBITDA, despite lower revenue, is lower operating expense which decreased $1.7 million year-over-year. The reductions in operating expense were across marketing, as well as general and administrative, reflecting prior cost cutting initiatives.

CORPORATE

     Unallocated Corporate Costs and Eliminations
                                                  $s in millions


                                                         Q/Q
                        Q2 2010        Q1 2010        % Change
                        -------        -------        --------
    Inter-segment
     Revenue -
     elimination           $(7.5)         $(7.7)              3%

    Cost of Revenue *       $0.1           $0.3            (63%)

    Inter-segment
     Marketing -
     elimination           $(7.4)         $(7.6)              3%

    Operating
     Expenses*              $4.0           $4.3             (7%)
                            ----           ----

    Adjusted EBITDA
     **                    $(4.2)         $(4.7)             11%
    EBITDA **              $(4.9)         $(7.8)             37%

    Restructuring           $0.1           $2.5            (95%)

    Operating
     Income(Loss)          $(5.2)         $(8.2)             36%






                                          Y/Y
                        Q2 2009         % Change
                        -------         --------
    Inter-segment
     Revenue -
     elimination           $(3.7)           (102%)

    Cost of Revenue *       $0.5             (76%)

    Inter-segment
     Marketing -
     elimination           $(3.7)           (101%)

    Operating
     Expenses*              $6.1               34%
                            ----

    Adjusted EBITDA
     **                    $(6.6)              37%
    EBITDA **              $(7.0)              31%

    Restructuring             $-               NM

    Operating
     Income(Loss)          $(7.5)              31%




    NM = Not Meaningful
    * Does not include non-cash compensation, depreciation, gain/loss
    on disposal of assets, restructuring, amortization, impairment, or
    litigation settlements and contingencies.
    ** See separate reconciliation of Adjusted EBITDA and EBITDA to GAAP
    Net Income/Loss.

Corporate

The eliminations both in revenue and in marketing principally represent the elimination of inter-segment transfer pricing charged from Exchanges to LendingTree Loans for leads. Operating expenses decreased $0.3 million quarter-over-quarter and decreased $2.1 million year-over-year. The quarter-over-quarter decrease was largely due to lower employee costs and lower professional fees in the quarter. The year-over-year decreases in operating expense were primarily driven by lower employee costs reflecting prior cost-cutting initiatives.

Liquidity and Capital Resources

As of June 30, 2010, Tree.com had $62.9 million in unrestricted cash and cash equivalents, compared to $73.1 million as of March 31, 2010. During the second quarter under the previously announced $10 million share repurchase program which began in February, the Company repurchased 408,568 shares at an average price of $6.86 in open market transactions. Through June 30, 2010, the Company has repurchased a total of 487,358 shares at an average price of $7.12 and has approximately $6.5 million of repurchase authorization remaining.

As of June 30, 2010, LendingTree Loans had two committed lines of credit totaling $125 million of borrowing capacity. Borrowings under these lines of credit are used to fund, and are secured by, consumer residential loans that are held for sale. Loans under these lines of credit are repaid from proceeds from the sales of loans held for sale by LendingTree Loans. The loans held for sale and warehouse lines of credit balances as of June 30, 2010, were $111.9 million and $91.1 million, respectively. Per our recent filings, LendingTree Loans renewed its warehouse line agreement with Bank of America, with a term running through June 29, 2011. As part of the renewal, the tangible net worth requirement was reduced from $44 million to $25 million. Additionally, on July 22, 2010, LendingTree Loans amended the existing warehouse line agreement with JPMorgan Chase Bank, NA, to lower the tangible net worth requirement to $25 million.

Conference Call

Tree.com will audio cast its conference call with investors and analysts discussing the Company's second quarter financial results on Thursday, July 29, 2010 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          Six Months
                                 Ended June        Ended June
                                     30,                 30,
                                 -----------        -----------
                                2010      2009      2010     2009
                                ----      ----      ----     ----
                                   (In thousands, except
                                     per share amounts)
    Revenue
        LendingTree Loans    $26,649   $36,257   $52,387  $70,629
        Exchanges and other   14,435    16,923    32,809   34,052
        Real Estate            4,713     7,793     8,612   13,552
                               -----     -----     -----   ------
      Total revenue           45,797    60,973    93,808  118,233
    Cost of revenue
        LendingTree Loans      9,348    14,003    19,502   25,859
        Exchanges and other    1,057     2,531     2,509    4,998
        Real Estate            2,783     4,792     5,238    8,656
                               -----     -----     -----    -----
      Total cost of
       revenue (exclusive
       of depreciation
       shown separately
       below)                 13,188    21,326    27,249   39,513
                              ------    ------    ------   ------
      Gross margin            32,609    39,647    66,559   78,720
    Operating expenses
      Selling and
       marketing expense      17,059    13,892    37,205   27,714
      General and
       administrative
       expense                12,526    17,115    25,228   33,414
      Product development        585     1,561     1,951    3,169
      Litigation
       settlements and
       contingencies              26        (3)       42      392
      Restructuring
       expense                   432    (1,078)    3,042     (236)
      Amortization of
       intangibles               943     1,318     1,886    2,581
      Depreciation             1,507     1,687     3,016    3,351
      Asset impairments            -     3,903         -    3,903
                                 ---     -----       ---    -----
        Total operating
         expenses             33,078    38,395    72,370   74,288
                              ------    ------    ------   ------
        Operating (loss)
         income                 (469)    1,252    (5,811)   4,432
    Other income
     (expense)
      Interest income              -        27         7       75
      Interest expense          (167)     (151)     (333)    (302)
                                ----      ----      ----     ----
    Total other
     (expense), net             (167)     (124)     (326)    (227)
                                ----      ----      ----     ----
    (Loss) income before
     income taxes               (636)    1,128    (6,137)   4,205
    Income tax provision        (163)     (386)     (808)    (303)
                                ----      ----      ----     ----
    Net (loss) income          $(799)     $742   $(6,945)  $3,902
                               =====      ====   =======   ======
    Weighted average
     common shares
     outstanding              11,240    10,706    11,039   10,194
                              ======    ======    ======   ======
    Weighted average
     diluted shares
     outstanding              11,240    11,034    11,039   10,354
                              ======    ======    ======   ======
    Net (loss) income
     per share available
     to common
     shareholders
      Basic                   $(0.07)    $0.07    $(0.63)   $0.38
                              ======     =====    ======    =====
      Diluted                 $(0.07)    $0.07    $(0.63)   $0.38
                              ======     =====    ======    =====


         TREE.COM, INC. AND SUBSIDIARIES
           CONSOLIDATED BALANCE SHEETS


                                      June       December
                                       30,           31,
                                       2010         2009
                                     -----       ---------
                                   (unaudited)
                                       (In thousands,
                                         except par
                                          value and
                                       share amounts)
    ASSETS:
    Cash and cash equivalents          $62,877     $86,093
    Restricted cash and cash
     equivalents                        10,202      12,019
    Accounts receivable, net of
     allowance of $528 and
     $518, respectively                  7,073       6,835
    Loans held for sale
     ($110,427 and $92,236
     measured at fair value,
     respectively)                     111,910      93,596
    Prepaid and other current
     assets                             14,117      10,758
                                        ------      ------
      Total current assets             206,179     209,301
    Property and equipment, net         12,721      12,257
    Goodwill                            12,152      12,152
    Intangible assets, net              55,740      57,626
    Other non-current assets               654         496
                                           ---         ---
      Total assets                     287,446    $291,832
                                       =======    ========
    LIABILITIES:
    Warehouse lines of credit          $91,067     $78,481
    Accounts payable, trade              8,534       5,905
    Deferred revenue                     1,714       1,731
    Deferred income taxes                2,033       2,211
    Accrued expenses and other
     current liabilities                38,852      54,694
                                        ------      ------
      Total current liabilities        142,200     143,022
    Income taxes payable                   561         510
    Other long-term liabilities         16,254      12,010
    Deferred income taxes               16,216      15,380
                                        ------      ------
      Total liabilities                175,231     170,922

    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
     11,321,775 and 10,904,330             113         109
    shares, respectively, and
     outstanding 10,834,417 and
    10,904,330 shares,
     respectively
    Additional paid-in capital         903,495     901,818
    Accumulated deficit               (787,962)   (781,017)
    Treasury stock 487,358 and
     -0-shares, respectively            (3,431)          -
                                        ------         ---
      Total shareholders' equity       112,215     120,910
                                       -------     -------
      Total liabilities and
       shareholders' equity           $287,446    $291,832
                                      ========    ========


         TREE.COM, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   (Unaudited)


                                             Six Months
                                               Ended
                                             June 30,
                                             --------
                                            2010          2009
                                            ----          ----
                                                (In
                                             thousands)
    Cash flows from operating
     activities:
    Net (loss) income                    $(6,945)       $3,902
    Adjustments to reconcile net
     (loss) income to net cash
     used in operating
     activities:
      Loss on disposal of fixed
       assets                                  9           949
      Amortization of intangibles          1,886         2,581
      Depreciation                         3,016         3,351
      Intangible impairment                    -         3,903
      Non-cash compensation
       expense                             2,062         1,993
      Non-cash restructuring
       expense                               181           161
      Deferred income taxes                  658             -
      Gain on origination and sale
       of loans                          (47,441)      (67,206)
      Loss on impaired loans not
       sold                                    -           290
      Loss on sale of real estate
       acquired in satisfaction of
       loans                                 377            77
      Bad debt expense                        92           243
    Changes in current assets
     and liabilities:
      Accounts receivable                   (331)          864
      Origination of loans            (1,218,901)   (1,612,556)
      Proceeds from sales of loans     1,252,103     1,658,128
      Principal payments received
       on loans                              530           627
      Payments to investors for
       loan repurchases and early
       payoff obligations                 (4,685)       (4,141)
      Prepaid and other current
       assets                                 82          (623)
      Accounts payable and other
       current liabilities               (17,276)       (1,888)
      Income taxes payable                    84           123
      Deferred revenue                      (134)          236
      Other, net                           4,360         1,003
                                           -----         -----
    Net cash used in operating
     activities                          (30,273)       (7,983)
                                         -------        ------
    Cash flows from investing
     activities:
      Acquisitions                             -        (1,000)
      Capital expenditures                (3,534)       (1,404)
      Other, net                           1,667           581
                                           -----           ---
    Net cash used in investing
     activities                           (1,867)       (1,823)
                                          ------        ------
    Cash flows from financing
     activities:
      Borrowing under warehouse
       lines of credit                   950,007     1,402,823
      Repayments of warehouse
       lines of credit                  (937,421)   (1,385,887)
      Issuance of common stock,
       net of withholding taxes             (381)        3,807
      Purchase of treasury stock          (3,431)            -
      Increase in restricted cash            150          (875)
                                             ---          ----
    Net cash provided by
     financing activities                  8,924        19,868
                                           -----        ------
    Net (decrease) increase in
     cash and cash equivalents           (23,216)       10,062
    Cash and cash equivalents at
     beginning of period                  86,093        73,643
                                          ------        ------
    Cash and cash equivalents at
     end of period                       $62,877       $83,705
                                         =======       =======


              TREE.COM, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF OPERATIONS - BY SEGMENT
                        (Unaudited)


                                     For the Three Months
                                     Ended June 30, 2010:
                                        --------------------
                       LendingTree Exchanges    Real    Unallocated-   Total
                          Loans    ---------   Estate     Corporate    -----
                          -----                ------     ---------
                                         (In thousands)
    Revenue                $26,649   $21,906    $4,713       $(7,471) $45,797
    Cost of revenue
     (exclusive of
     depreciation
     shown
     separately
     below)                  9,348       941     2,783           116   13,188
                             -----       ---     -----           ---   ------
      Gross margin          17,301    20,965     1,930        (7,587)  32,609
    Operating
     expenses:
      Selling and
       marketing
       expense               7,974    16,116       394        (7,425)  17,059
      General and
       administrative
       expense               4,916     1,471     1,557         4,582   12,526
      Product
       development            (132)      674        34             9      585
      Litigation loss
       contingencies
       and settlements          25         -         -             1       26
      Restructuring
       expense                   -       (58)      364           126      432
      Amortization of
       intangibles               -       295       635            13      943
      Depreciation             425       495       293           294    1,507
                               ---       ---       ---           ---    -----
      Total operating
       expenses             13,208    18,993     3,277        (2,400)  33,078
                            ------    ------     -----        ------   ------
    Operating income
     (loss)                  4,093     1,972    (1,347)       (5,187)    (469)
    Adjustments to
     reconcile to
     EBITDA and
     Adjusted
     EBITDA:
      Amortization of
       intangibles               -       295       635            13      943
      Depreciation             425       495       293           294    1,507
                               ---       ---       ---           ---    -----
    EBITDA                   4,518     2,762      (419)       (4,880)   1,981
      Restructuring
       expense                   -       (58)      364           126      432
      Loss on disposal
       of assets                 -         -         5             -        5
      Non-cash
       compensation             74       297        35           562      968
      Litigation loss
       contingencies
       and settlements          25         -         -             1       26
                               ---       ---       ---           ---      ---
    Adjusted EBITDA         $4,617    $3,001      $(15)      $(4,191)  $3,412
                            ======    ======      ====       =======   ======
    Reconciliation
     to net loss in
     total:
    Operating loss
     per above                                                          $(469)
    Other expense,
     net                                                                 (167)
                                                                         ----
    Loss before
     income taxes                                                        (636)
    Income tax
     provision                                                           (163)
                                                                         ----
    Net loss                                                            $(799)
                                                                        =====


About Tree.com, Inc.

Tree.com, Inc. (Nasdaq: TREE) is the parent of several brands and businesses that provide information, tools, advice, products and services for critical transactions in our customers' lives. Our family of brands includes: LendingTree.com(R), GetSmart.com(R), RealEstate.com(R), DegreeTree.com(SM), HealthTree.com(SM), LendingTreeAutos.com, DoneRight.com(R), and InsuranceTree.com(SM). Together, these brands serve as an ally for consumers who are looking to comparison shop for loans, real estate and other services from multiple businesses and professionals who will compete for their business.

Tree.com, Inc. is the parent company of wholly owned operating subsidiaries: LendingTree, LLC and Home Loan Center, Inc.

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.

TREE.COM'S PRINCIPLES OF FINANCIAL REPORTING

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.

Definition of Tree.com's Non-GAAP Measures

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) litigation loss contingencies and settlements, (6) pro forma adjustments for significant acquisitions, and (7) one-time items. 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 report, 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 report, 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.

Other

REALTORS(R)--a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS(R) and subscribes to its strict Code of Ethics.

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, 2009, our Quarterly Report on Form 10-Q for the period ended March 31, 2010, 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.



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



SOURCE Tree.com, Inc.

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