~~Table~~UNITED ~~of Contents~~STATES

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~Washington, ~~AND~~D.C. ~~EXCHANGE COMMISSION~~ 20549

~~Washington,~~FORM ~~D.C. 20549~~10-K

~~Form 10-K~~(Mark One)

~~(Mark~~x ~~One~~ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

xFor ~~ANNUAL~~the ~~REPORT~~fiscal ~~PURSUANT~~year TOended ~~SECTION~~December 31, 132015 ~~OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For the fiscal year ended December 31, 2014~~ OR

Oro TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨For ~~TRANSITION~~the ~~REPORT~~transition ~~PURSUANT~~period ~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~from to

~~For~~Commission ~~the~~File ~~transition~~Number: ~~period from to~~ 333-189129-16

~~Commission~~Ancestry.com ~~file number: 333-189129-16~~LLC

~~Ancestry.com LLC~~(Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)




Delaware		37-1708583
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

360 West 4800 North Provo, Utah		84604
(Address of principal executive offices)		(Zip Code)

Delaware		37-1708583
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
360 West 4800 North Provo, UT		84604
(Address of principal executive offices)		(Zip Code)

(801) 705-7000

(Registrant’s telephone number, including area code~~: (801~~) ~~705-7000~~

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes xý No ¨

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x ý

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes xý No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨o Accelerated filer ¨o Non-accelerated filer xý (Do not check if a smaller reporting company) Smaller reporting company ¨o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨o No x ý

As of February 19, ~~2015~~2016, 100% of the registrant’s common interests outstanding (all of which are privately owned and are not traded on any public market) were owned by a sole member.

DOCUMENTS INCORPORATED BY REFERENCE

None

~~Table~~Ancestry.com ~~of Contents~~LLC

~~Ancestry.com~~TABLE ~~LLC~~OF CONTENTS

TABLE OF CONTENTS



	Page
PART I
Forward Looking Statements	3
Terminology	4
Item 1. Business	4
Item 1A. Risk Factors	11
Item 1B. Unresolved Staff Comments	32
Item 2. Properties	32
Item 3. Legal Proceedings	32
Item 4. Mine Safety Disclosures	34

PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	35
Item 6. Selected Financial Data	36
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 7A. Quantitative and Qualitative Disclosures about Market Risk	61
Item 8. Financial Statements and Supplementary Data	61
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	62
Item 9A. Controls and Procedures	62
Item 9B. Other Information	62

PART III
Item 10. Directors, Executive Officers and Corporate Governance	63
Item 11. Executive Compensation	66
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	72
Item 13. Certain Relationships and Related Transactions, and Director Independence	74
Item 14. Principal Accountant Fees and Services	75

PART IV
Item 15. Exhibits, Financial Statement Schedules	76

	Page
PART I
Forward Looking Statements		3
Terminology		4
Item 1. Business		4
Item 1A. Risk Factors		9
Item 1B. Unresolved Staff Comments		26
Item 2. Properties		26
Item 3. Legal Proceedings		27
Item 4. Mine Safety Disclosures		27
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		28
Item 6. Selected Financial Data		29
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		33
Item 7A. Quantitative and Qualitative Disclosures about Market Risk		50
Item 8. Financial Statements and Supplementary Data		51
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		51
Item 9A. Controls and Procedures		51
Item 9B. Other Information		51
PART III
Item 10. Directors, Executive Officers and Corporate Governance		52
Item 11. Executive Compensation		55
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		60
Item 13. Certain Relationships and Related Transactions, and Director Independence		61
Item 14. Principal Accountant Fees and Services		62
PART IV
Item 15. Exhibits, Financial Statement Schedules		63

2Table of Contents

~~Table~~PART ~~of Contents~~I

~~PART~~Forward-Looking I Statements

This Annual Report on Form 10-K (the “Annual Report”), including the sections entitled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements relating to future events and future performance. All statements other than those that are purely historical may be forward-looking statements. We may, in some cases, use words such as “project,” “believe,” “anticipate,” “continue,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “potentially,” “will” or “may,” or other words that convey uncertainty of future events or outcomes, to identify these forward-looking statements. Forward-~~Looking~~looking ~~Statements~~statements in this Annual Report include statements about:

~~This~~• ~~Annual~~our ~~Report~~future onfinancial ~~Form 10-K (the “Annual Report”)~~performance, including ~~the~~our ~~sections entitled “Business~~revenues,” ~~“Risk~~cost ~~Factors” and “Management’s Discussion and Analysis~~ of ~~Financial~~revenues ~~Condition~~ and ~~Results~~operating ~~of Operations~~expenses,” ~~contains~~and ~~forward-looking~~our ~~statements~~ability ~~relating~~ to ~~future~~sustain ~~events~~profitability and ~~future~~achieve ~~performance. All statements other than those that are purely historical may be forward~~long-~~looking~~term statements. We may, in some cases, use words such as “project,” “believe,” “anticipate,” “continue,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “potentially,” “will” or “may,” or other words that convey uncertainty of future events or outcomes, to identify these forward-looking statements. Forward-looking statements in this Annual Report include statements about: growth;

• our ~~future financial performance, including our revenues, cost of revenues and operating expenses, and our~~ ability to ~~sustain~~generate ~~profitability~~additional ~~and~~revenues ~~achieve~~on ~~long~~a cost-~~term~~effective ~~growth~~basis;

• our ability to ~~generate~~attract ~~additional~~and ~~revenues~~retain ~~on a cost-effective basis~~customers;

• ~~our~~the ~~ability~~size toof ~~attract~~our ~~and~~total ~~retain~~addressable ~~subscribers~~market;

• ~~the~~our ~~size~~high degree of leverage and our ~~total~~ability ~~addressable~~to ~~market~~service our debt;

• our ~~high~~intention ~~degree~~to ofmake ~~leverage~~payments ~~and~~to our ~~ability~~parent, including those related to ~~service~~the ~~our~~PIK ~~debt~~Notes;

• our ~~intention~~ability toor ~~pay distributions to~~ our parent’s ~~related~~ability to ~~the~~take ~~PIK~~on ~~Notes~~additional debt;

• ~~our~~risks ~~ability~~related orto ~~our~~the ~~parent’s~~“Notes” ~~ability~~and to ~~take~~high onyield ~~additional~~ debt securities generally;

• ~~risks~~the ~~related~~potential toimpact ~~the~~of ~~“Notes”~~debt ~~and~~covenant torestrictions ~~high~~on ~~yield~~our ~~debt~~flexibility ~~securities~~in ~~generally~~operating our business;

• ~~the~~our ~~potential~~ability ~~impact~~to ofmonetize ~~debt~~and ~~covenant~~to ~~restrictions~~create ona ~~our~~meaningful ~~flexibility~~mobile inexperience ~~operating~~for our ~~business~~customers;

• our ability to ~~monetize~~develop ~~and~~new services or technologies that will appeal to ~~create~~our acustomers ~~meaningful~~and ~~mobile~~drive ~~experience~~growth ~~for~~in our ~~subscribers~~business;

• our ~~ability~~competitive ~~to develop new products or technologies that will appeal to our subscribers and drive growth in our business~~position;


•	our pricing and subscription package mix;

• our ability to ~~acquire~~protect ~~content~~users’ data and ~~make~~privacy itconcerns ~~available~~and ~~online~~to comply with privacy and security standards and laws, including data related to our AncestryDNA and AncestryHealth services;

• our ability to ~~attract~~acquire content and ~~retain~~make ~~highly-qualified~~it ~~personnel~~available online;

• our ~~continued~~ability ~~investment~~to inattract and ~~expansion~~retain ofhighly ~~our~~qualified ~~international operations, including our international launch of AncestryDNA~~personnel;

• our ~~competitive~~continued ~~position~~investment in and expansion of our international operations, including our international expansion of AncestryDNA;


•	our ability to manage costs and control margins and trends;

• ~~our~~the ~~liquidity~~impact ~~and~~of ~~working~~current ~~capital~~and ~~requirements~~potential legislation and ~~the~~regulatory ~~availability~~changes ofon ~~cash~~privacy, ~~and~~subscription ~~credit~~renewal, DNA or other aspects of our business;

• our ~~ability~~liquidity toand ~~protect~~working ~~users’~~capital ~~data~~requirements and ~~privacy~~the ~~concerns~~availability ~~and~~of tocash ~~comply with privacy~~ and ~~security~~credit; ~~standards~~ and ~~laws, including data related to our Ancestry DNA service;~~

• the impact of ~~external~~claims ~~market~~or ~~forces, including changes in the macroeconomic environment, interest rates and foreign currency exchange rates;~~litigation.

•Although we believe that the ~~impact~~assumptions underlying the forward-looking statements are reasonable, we cannot guarantee future results, level of ~~claims~~activity, performance or ~~litigation;~~achievements. There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. These important factors include those that we discuss in this Annual Report under the caption “Risk Factors” and elsewhere. You should read these factors and the other cautionary statements made in this Annual Report as being applicable to all related forward-looking statements wherever they appear in this Annual Report.

~~• the impact of current and potential legislation and regulatory changes on privacy, subscription renewal, DNA or other aspects of our business.~~3

3Table of Contents

~~Table~~If one or more of ~~Contents~~these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. All subsequent written or spoken forward-looking statements attributable to our company or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this Annual Report are made only as of the date of this Annual Report, and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

~~Although~~As weused ~~believe~~herein, ~~that the assumptions underlying the forward-looking statements are reasonable~~“Ancestry.com,” “we ~~cannot guarantee future results~~,” level of activity, performance or achievements. There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. These important factors include those that we discuss in this Annual Report under the caption “~~Risk Factors~~our” and ~~elsewhere.~~similar ~~You~~terms ~~should~~include ~~read~~Ancestry.com ~~these~~LLC ~~factors~~ and ~~the~~its ~~other cautionary statements made in this Annual Report as being applicable to all related forward~~wholly-~~looking~~owned ~~statements~~subsidiaries, ~~wherever~~unless ~~they~~the ~~appear~~context inindicates ~~this Annual Report~~otherwise.

If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. All subsequent written or spoken forward-looking statements attributable to our company or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this Annual Report are made only as of the date of this Annual Report, and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Terminology

AsIn ~~used~~this ~~herein,~~Annual ~~“Ancestry.com”~~Report, “we”, ~~“our”~~use ~~and~~the ~~similar~~ terms ~~include~~core Ancestry~~.com~~ ~~LLC~~websites, ~~and~~subscriber, ~~its wholly-owned subsidiaries~~customer, ~~unless~~user ~~the~~and ~~context indicates otherwise~~record.

~~Terminology~~Our operations consist primarily of our flagship site, www.ancestry.com, and its affiliated international websites including Ancestry.co.uk, Ancestry.com.au and Ancestry.ca, among others. We refer to these websites collectively as our core Ancestry websites. A subscriber is an individual who pays for renewable access or redeems a gift subscription to one of our core Ancestry websites. A customer is an individual who pays for any of our services, such as our AncestryDNA service, and includes subscribers. A user is a person who interacts with any of our websites or services and includes subscribers and customers.

InWe ~~this~~use ~~Annual~~the ~~Report,~~term we“record” ~~use~~in different ways depending on the ~~terms~~content ~~core~~source. ~~Ancestry~~When ~~websites~~referring to the number of records in certain of our company-acquired content collections, ~~subscriber~~such as a census record, ~~registered~~we ~~user~~mean ~~and~~information about each specific person. For example, a draft card will typically be counted as one record, as will each line in a census, because each contains information about a specific individual. When referring to unstructured data, such as a newspaper, we define each page in those data sources as a record.

~~Our~~Item ~~operations consist primarily of our flagship site, www~~1.~~ancestry.com,~~ and its affiliated international websites including, Ancestry.co.uk, Ancestry.com.au and Ancestry.ca, among others. We refer to these websites collectively as our core Ancestry websites. A subscriber is an individual who pays for renewable access or redeems a gift subscription to one of our core Ancestry websites, and a registered user is a person who has registered on one of our core Ancestry websites or mobile apps, and includes subscribers. Business

We use the term “record” in different ways depending on the content source. When referring to a number of records in certain of our company-acquired content collections, such as a census record, we mean information about each specific person. For example, a draft card will typically be counted as one record, as will each line in a census, because each contains information about a specific individual. When referring to unstructured data, such as a newspaper, we define each page in those data sources as a record. Overview

~~Item~~Ancestry.com 1is the world’s largest provider of family history and personal DNA testing services, harnessing the information found in family trees, historical records and genetics to help people gain a new level of understanding about their lives. ~~Business~~We believe most people have a fundamental desire to understand who they are and from where they came. By leveraging the latest technology and science, we help people discover, preserve and share their family history.

~~Overview~~Our core Ancestry websites have over 2.2 million paying subscribers around the world and an extensive collection of more than 17 billion historical records that we have digitized and indexed as of December 31, 2015. These digital records and documents, combined with our proprietary online search technologies and tools, enable our subscribers to research their family history, build their family trees, upload their own records and make meaningful discoveries about the lives of their ancestors. In 2015, approximately 1.5 billion records were attached to family trees. Subscription revenues from our core Ancestry websites accounted for approximately 78% of total revenues for the year ended December 31, 2015.

~~Ancestry.com~~Our isAncestryDNA ~~the world’s largest online family history resource~~service, with approximately 2.1 .4 million ~~paying~~DNA ~~subscribers~~samples ~~around~~in ~~the world to~~ its ~~core~~database ~~Ancestry websites~~ as of December 31, ~~2014.~~2015, Weenables ~~believe~~customers ~~that~~to ~~most~~uncover ~~people~~their ~~have~~ethnic amix, ~~fundamental~~discover ~~desire~~distant tocousins ~~understand~~and ~~who~~identify ~~they are~~shared ~~and~~common ~~from~~ancestors. ~~where~~AncestryDNA ~~they~~leverages ~~came.~~its ~~Our~~growing ~~mission~~DNA isdatabase totogether ~~help~~with ~~everyone~~proprietary ~~discover,~~algorithms ~~preserve~~to ~~and~~help ~~share~~customers identify their unique family history.

~~The foundation of our service is an extensive collection of more than 15 billion historical records that we have digitized, indexed and added to our core Ancestry websites.~~ We ~~have~~also ~~developed~~offer ~~and~~other ~~acquired~~subscription-based ~~efficient~~ and proprietary systems for digitizing handwritten historical documents, and we have established relationships with national, state and local government archives, historical societies, religious institutions and private collectors of historical content around the world. These digital records and documents, combined with our proprietary online search technologies and tools, enable our subscribers to research their family history, ~~build~~research ~~their family trees~~services, ~~upload~~such ~~their~~as ~~own records and make meaningful discoveries about the lives of their ancestors~~Archives.com ~~Increasingly~~(“Archives”), ~~subscriber~~Fold3.com ~~discoveries are driven by our proprietary technology that provides~~ (“~~hints~~Fold3”), ~~of possible record matches to our subscribers~~Newspapers.com Inand ~~2014~~AncestryProGenealogists, ~~approximately~~which ~~1.2~~extend ~~billion~~and ~~hints~~complement ~~were~~our ~~accepted~~core byAncestry ~~our subscribers~~websites. ~~We believe~~Subscriptions ~~we provide ongoing value~~ to ~~our~~Fold3 ~~subscribers~~and byNewspapers.com ~~regularly~~are ~~adding~~often ~~new~~sold ~~historical~~in ~~content,~~conjunction ~~by enhancing our services and platforms~~ with ~~new~~one ~~tools~~of ~~and features, by improving the integration between~~ our ~~products~~core ~~and~~Ancestry bywebsite ~~enabling greater collaboration among our users through the growth of our global community~~subscriptions.

~~Subscription~~Our ~~revenues~~services ~~from~~provide ~~our~~people ~~core~~with ~~Ancestry~~multiple ~~websites~~paths ~~accounted for~~to ~~approximately~~discovering ~~83%~~their offamily ~~total~~history. ~~revenues~~We ~~for~~believe ~~the~~we ~~year~~provide ~~ended~~ongoing ~~December 31,~~value ~~2014.~~to Weour ~~generally~~subscribers ~~offer~~by ~~each~~regularly ~~registered~~adding ~~user~~new ahistorical ~~14-day~~content, ~~free~~by ~~trial,~~enhancing ~~after~~our ~~which,~~services ~~unless~~and ~~cancelled~~platforms, weby ~~charge~~utilizing the ~~full~~latest ~~subscription~~technology ~~amount.~~and ~~Subscriptions~~science ~~automatically~~and ~~renew into~~by ~~the~~enabling ~~existing~~greater ~~package~~collaboration ~~and~~among ~~duration~~our ~~selected, unless cancelled~~users.

WeIn ~~also operate a suite of family history products~~2015, ~~which~~we ~~complement our~~delivered ~~core~~strong ~~Ancestry~~financial ~~websites.~~results ~~Our~~and ~~AncestryDNA~~continued ~~service allows customers~~ to ~~not~~position ~~only~~the ~~discover~~company ~~their~~for ~~genetic~~long-term ~~ethnicity~~growth ~~but,~~through inexecution ~~combination~~of ~~with a subscription to a core Ancestry website, to also find relatives with a common ancestral match from amongst~~ our ~~global~~business ~~user base~~strategy. WeOur ~~also~~key ~~offer~~business ~~other~~highlights ~~subscription-based~~during ~~services,~~the ~~such~~year asinclude ~~Archives.com,~~the ~~Fold3.com and Newspapers.com. These products and services contribute toward acquiring new subscribers by allowing us to reach consumers with varying family history interests.~~ following:

4• total subscribers to our core Ancestry websites as of December 31, 2015 increased approximately 7% compared to December 31, 2014;

~~Table of Contents~~4

~~Business~~Table ~~Strategy~~of Contents

~~Our~~• ~~goal~~AncestryDNA issold toapproximately ~~remain~~one ~~the~~million ~~leading~~DNA ~~online~~kits ~~resource~~ for ~~family~~the ~~history~~year ~~and~~ended toDecember ~~grow~~31, ~~our~~2015, ~~worldwide~~an ~~subscriber~~increase ~~base~~of byover ~~offering~~93% ain ~~superior~~comparison ~~value proposition~~ to ~~anyone~~the ~~interested~~year inended ~~learning~~December ~~more about their family history. In pursuit of our goal~~31, ~~we will continue to focus on the following objectives:~~ 2014;

• ~~Strengthen~~we completed our ~~premium~~upgrade ~~brand~~to the core Ancestry websites, a broad redesign that allow users to build family stories in a narrative format;

• ~~Further~~we ~~enhance~~launched ~~our~~new ~~product~~features ~~and~~to ~~user~~existing services including New Ancestor Discoveries—an experience using the latest genetic technology to discover new ancestors without the customer having to search records or build a family tree;

• ~~Regularly~~we ~~add~~added ~~new~~more than 1.7 billion records of content to our core Ancestry websites, including an extensive collection of probate and will records from across all 50 states; and

• ~~Continue~~we tointroduced ~~expand~~new services, such as our ~~products~~beta ~~and~~launch ~~services~~of ~~globally~~Ancestry Health.

WeBusiness believe that continued focus on growing, expanding and enhancing our suite of family history brands and continued investments in television media and consumer marketing will allow us to strengthen our premium brand, increase awareness of the family history category and enhance our ability to acquire new subscribers. We also believe that investments in our product platform can make family history research easier, more enjoyable and more accessible by leveraging the latest technologies to transform the way people discover their family history. We also expect to continue to acquire new and relevant historical content and to promote the growth of user-generated content. Additionally, we expect to expand globally by growing our existing family history brands and product lines into new international markets. Strategy

Our ~~Products~~goal is to remain the leading provider of family history and personal DNA testing. In pursuit of our goal, we will continue to focus on the following objectives:

We• ~~offer~~Further aenhance ~~host~~our ~~of family history products and~~ services ~~that~~by ~~enable~~investing ~~people~~in ~~to discover~~technology, ~~preserve~~content and ~~share~~user their family history in a personalized way, ranging from searching family history records on our subscription-based websites to helping people discover their detailed genetic ethnicity through advanced DNA testing services. experiences;

~~Core~~• ~~Ancestry~~Diversify ~~Websites. Our core Ancestry websites consist of our flagship site, www.ancestry.com,~~ and ~~its~~grow affiliated international websites including, Ancestry.co.uk, Ancestry.com.au and Ancestry.ca, among others. Each core Ancestry website offers various subscription packages to collections of digitized historical records and user generated content, including family trees. Subscribers can efficiently search through our ~~extensive~~revenue and growing collection of global and specialized records covering a wide range of historical and cultural subject areas, including birth, marriage and death records, census records, immigration documents, photographs, maps, military records, personal narratives and newspapers and can then attach relevant records to individuals in their family trees. Subscribers can also communicate and collaborate with other members of the subscriber network. streams;

~~AncestryDNA.~~• ~~AncestryDNA~~Continue ~~is an advanced DNA testing service that helps people discover their ethnic origins and~~ to ~~find~~expand ~~family connections. AncestryDNA, in conjunction with a subscription to one of~~ our ~~core~~services ~~Ancestry~~globally; websites, connects users whose DNA suggests they have ancestors in common. Subscribers are then able to view the family trees associated with the users to whom they are connected, which enables new discoveries and ~~collaboration between members.~~

~~Archives.com.~~• ~~Archives.com is~~Strengthen aour ~~family~~premium ~~history website that makes discovering family history simple and affordable~~brand. Archives.com offers a differentiated service to a complementary segment of the family history market and access to approximately 4.5 billion historical records, including birth records, obituaries, immigration and passenger lists, historical newspapers and U.S. and U.K. censuses.

~~Fold3.com. Fold3.com~~We isbelieve that our ~~website~~investments ~~specializing~~in the latest technologies and sciences and our investments in ~~military~~acquiring ~~records~~new and relevant historical content, including the ~~stories~~growth and promotion of user-generated content, ~~photos~~enhance our services and ~~personal~~make ~~documents~~family ofhistory ~~the~~research ~~men~~easier, ~~and~~more ~~women~~enjoyable ~~who~~and ~~served~~more accessible. ~~Users~~We also believe that our ongoing efforts to invest and grow our AncestryDNA service as well as our other subscription-based and family history research services are ~~able~~diversifying our revenue streams and providing additional growth opportunities for our business. We seek to ~~discover~~do that, in part, by cross-promoting our services or up-selling premium services to our current customers. In addition, we expect to expand globally by growing our existing brands and ~~share~~service lines into new international markets. Furthermore, we believe that these ~~records~~efforts as well as our continued investments in television media and, ~~combined~~consumer ~~with~~marketing ~~their~~will ~~own~~allow ~~documents~~us to strengthen our premium brand, ~~create~~increase ~~an online~~awareness ~~memorial~~of ~~for~~the ~~someone~~family ~~who~~history ~~served~~category and enhance our ability to acquire new customers.

~~AncestryProGenealogists.~~Our AncestryProGenealogists is our provider of professional genealogy services that offers customers dedicated, personal support for their family history research. These services range from record searches to the preparation of comprehensive family histories. Clients typically pay a per-hour rate for these services. In addition, AncestryProGenealogists conducts research that supports Ancestry’s marketing and public relations initiatives. Services

~~Newspapers.com.~~We ~~Newspapers.com~~offer isa ~~our~~wide ~~website~~array ~~specializing~~of family history services that enable people to uncover their family history in ~~historical~~a ~~newspaper~~personalized way, ranging from searching family history records ~~with~~on ~~over~~our ~~86 million~~subscription-based ~~pages~~websites ~~of historical~~to ~~newspapers~~helping ~~from~~people ~~across~~discover ~~the~~their ~~United~~detailed ~~States~~genetic ~~and~~ethnicity ~~beyond~~through advanced DNA testing services. ~~Newspapers~~In ~~provide~~addition ato ~~unique~~offering ~~view~~each of ~~the~~our ~~past~~services ~~and~~individually, ~~help~~our ~~users~~premium ~~understand~~services ~~and~~may ~~connect~~include ~~with~~a ~~the~~bundled ~~people~~offering of multiple service lines, ~~events~~such ~~and~~as ~~attitudes~~our ofall-access ansubscription, ~~earlier~~which ~~time~~includes a subscription to a core Ancestry website, Fold3, a Newspapers.com basic subscription and Ancestry Academy.

~~Family~~Core ~~Tree~~Ancestry ~~Maker~~Websites. ~~Family~~Our ~~Tree~~core ~~Maker~~Ancestry iswebsites consist of our flagship site, www.ancestry.com, and its affiliated international websites including Ancestry.co.uk, Ancestry.com.au and Ancestry.ca, among others. Each core Ancestry website offers various subscription packages to access collections of digitized historical records and user-generated content, including family ~~history~~trees. ~~desktop~~Subscribers ~~software~~can efficiently search through our extensive and growing collection of global and specialized records, ~~which~~attach ~~allows~~relevant ~~users~~records to ~~synchronize~~individuals in their family trees ~~between~~ and build a narrative of their ~~desktop,~~family ~~our~~history ~~core~~that ~~Ancestry~~can ~~websites~~be shared with family members and ~~mobile~~other ~~devices~~members of the subscriber network. ~~Certain~~Using ~~Family~~proprietary ~~Tree~~algorithms, ~~Maker~~Ancestry ~~versions~~also ~~include~~offers ahints ~~complimentary~~to ~~subscription~~subscribers to aenhance ~~core~~their ~~Ancestry~~discovery ~~website~~of ~~for~~new arecords ~~limited~~and ~~duration~~family connections. ~~Family~~Ancestry's ~~Tree~~content ~~Maker~~covers isa ~~sold~~wide onrange ~~Ancestry.com~~of historical and cultural subject areas, ~~other~~including ~~retail websites~~birth, marriage and indeath ~~retail~~records, ~~stores.~~census records, immigration documents, photographs, maps, military records, personal narratives and newspapers.

5AncestryDNA. AncestryDNA is an advanced DNA testing service that helps people discover their ethnic origins and find family connections. AncestryDNA identifies potential ancestors to add to a customer's family tree and connects customers whose DNA suggests they have common ancestors. Customers, who also have a subscription to a core Ancestry website, are then able to view additional content associated with these DNA matches, which further enables new discoveries and collaboration between members. As our DNA database grows, our ability to provide improved ethnicity results to our customers also increases. Additionally, we continue to provide our customers with new hints and content regarding these potential DNA matches as our DNA database grows.

~~Table of Contents~~5

~~Find~~Table ~~A Grave. Find A Grave is a free website for finding and researching the final resting places~~ of famous individuals, family members and friends. The Find A Grave website provides a significant collection of burial information and images with more than 126 million grave records and 106 million photos. Contents

~~Marketing~~Archives. Archives is a family history website that makes discovering family history simple and ~~Advertising~~affordable. Archives offers a differentiated service to a complementary segment of the family history market and access to approximately 4.3 billion historical records, including birth records, obituaries, immigration and passenger lists, historical newspapers and U.S. and U.K. censuses.

~~Our~~Fold3. ~~marketing efforts~~Fold3 ~~are~~is ~~focused~~our onwebsite ~~three~~specializing ~~primary~~in ~~goals:~~military ~~promoting~~records, ~~our~~including ~~brand~~the ~~and~~stories, ~~acquiring~~photos ~~new~~and ~~customers;~~personal ~~retaining~~documents ~~existing~~of ~~customers;~~the men and ~~converting~~women ~~registered~~who ~~users~~served. Users are able to ~~paying~~discover ~~customers~~and share these records and, combined with their own documents, create an online memorial for someone who served.

~~Brand~~Newspapers.com. ~~Marketing~~Newspapers.com ~~and~~is ~~Customer~~our ~~Acquisition.~~website Wespecializing ~~pursue~~in ahistorical ~~multi-channel~~newspaper ~~marketing~~records ~~and~~with ~~customer~~over ~~acquisition~~120 ~~program~~million ~~that~~pages ~~includes~~of ~~television and~~historical ~~radio~~newspapers ~~advertising,~~from ~~paid~~across ~~and~~the ~~organic~~United ~~search~~States ~~marketing,~~and ~~online~~beyond. ~~display~~Newspapers.com ~~advertising,~~collaborates ~~content~~with ~~marketing,~~various ~~promotions,~~newspaper ~~sponsorships~~publishers and ~~affiliate~~archives ~~programs.~~worldwide ~~Through~~to ~~our~~obtain ~~advertising~~new content, weincluding ~~seek~~a tocollaboration ~~increase~~with Gannett Co., ~~brand~~Inc. ~~and~~to ~~category~~digitize ~~awareness~~more ~~while~~than ~~attracting~~80 ~~new customers~~daily U.S. Wenewspapers. ~~actively~~Newspapers ~~manage~~provide ~~our~~a ~~media~~unique ~~mix~~view ~~with~~of athe ~~goal~~past ofand ~~maximizing~~help ~~the~~users ~~efficiency~~understand ofand ~~our~~connect ~~marketing~~with ~~investment~~the ~~while~~people, ~~effectively~~events ~~driving~~and ~~new~~attitudes ~~customer~~of ~~growth~~an earlier time.

~~Retention Marketing~~AncestryProGenealogists. ~~Our~~AncestryProGenealogists ~~retention marketing~~ is ~~focused~~our onprovider ~~establishing~~of ~~and~~professional ~~maintaining~~family ~~long-term~~history ~~relationships~~services ~~with~~that ~~our~~offers customers ~~through~~ ~~personalized direct marketing~~dedicated, ~~including~~personal ~~on-site~~support ~~messaging~~for ~~and~~their ~~email~~family ~~and~~history ~~through our customer support~~research. WeThese ~~seek~~services torange ~~maximize~~from ~~retention~~record ~~and~~searches ~~encourage customers~~ to ~~purchase~~the ~~additional~~preparation ~~products~~of orcomprehensive ~~services~~family ~~and~~histories. toClients ~~upgrade~~typically topay ~~premium products or services by delivering~~ a ~~superior~~per-hour ~~customer~~rate ~~experience~~for ~~and~~these ~~demonstrating ongoing value~~services. WeIn ~~monitor~~addition, ~~subscription~~AncestryProGenealogists ~~package~~conducts ~~and~~family ~~duration~~history ~~mix~~research onthat ~~our~~supports ~~various~~Ancestry’s ~~websites,~~marketing ~~payment processing, cancellation reasons, customer engagement~~ and ~~overall~~public ~~customer satisfaction.~~relations initiatives.

~~Conversion~~Find ~~Marketing~~A Grave. ~~Our~~Find ~~conversion~~A ~~marketing~~Grave ~~efforts~~is ~~are~~a ~~focused~~free onwebsite ~~converting~~for ~~our~~finding ~~registered users~~ and ~~site visitors~~researching ~~into~~the ~~paying~~final ~~customers~~resting ~~through~~places ~~on-site~~of ~~messaging~~famous individuals, ~~price~~family ~~optimization,~~members ~~email,~~and ~~targeted~~friends. ~~offers~~The ~~and~~Find ~~compelling~~A ~~product~~Grave ~~features~~website ~~like~~provides ~~record~~a ~~hinting~~significant oncollection ~~new~~of burial information and ~~existing~~images ~~content~~with ~~collections~~more ~~and~~than ~~matches~~141 tomillion ~~other~~grave ~~users’~~records ~~family~~and ~~trees.~~122 million photos.

~~Product~~Ancestry Academy. Ancestry Academy is a new educational resource that offers high-quality video instruction from family history and ~~Technologies~~genealogy experts. Ancestry Academy covers a wide range of topics of interest in family history research, including Native American ancestry, online US census research and DNA testing.

WeAncestryHealth. ~~have~~AncestryHealth ~~applied substantial~~is ~~resources to develop and maintain proprietary technologies designed to provide~~ a ~~rewarding~~free ~~experience~~beta ~~and~~website ~~compelling~~that ~~value~~we ~~proposition~~launched toduring ~~our~~2015 ~~subscribers.~~that Wehelps ~~believe~~users ~~our~~trace ~~investments~~medical inconditions ~~these~~along ~~areas~~family ~~provide~~lines ~~us with a significant competitive advantage,~~ and wegain ~~intend~~insights to ~~continue~~their ~~developing and enhancing these proprietary technologies~~health. ~~Total~~We ~~technology~~are ~~and~~in ~~development~~the ~~expenses~~early ~~were~~stages ~~$94.2~~of ~~million~~investing ~~and~~in ~~$85.7~~AncestryHealth ~~million for the years ended December 31, 2014~~ and ~~2013, respectively,~~expect ~~$0.6 million for the period from December 29, 2012~~ to ~~December 31,~~invest ~~2012~~in ~~and~~additional ~~$77.5~~health ~~million~~initiatives ~~for~~in ~~the period from January 1, 2012 to December 28, 2012~~2016.

~~Vertical~~Marketing ~~Search Engine. Historical documents can be difficult to search effectively using traditional search engines because of variations in names, changes in geographic boundaries~~ and other factors. Our proprietary vertical search engine provides an innovative, technology-driven solution to the challenges created by the inherent difficulty of searching historical content. Our search solution focuses on structured and semi-structured records rather than free text search, automatically corrects for incomplete information and incorporates name, date and location proximity algorithms to make searching easier for our subscribers. Advertising

~~Hinting.~~ Our ~~proprietary~~marketing ~~record~~efforts ~~hinting~~are ~~technology~~focused ~~performs~~on anthree ~~algorithmic~~primary ~~analysis~~goals: ofpromoting ~~users’~~our ~~family~~brand ~~trees~~ and ~~then~~ ~~suggests~~acquiring new ~~records~~customers; toretaining ~~help~~existing ~~subscribers~~customers; ~~discover~~and ~~more~~winning ~~information~~back ~~about~~former ~~their ancestors~~customers. ~~We believe that these personalized hints can accelerate our subscribers’ research, thereby making them more successful and their experience more rewarding.~~

~~DNA.~~Brand ~~Our~~Marketing ~~AncestryDNA~~and ~~service~~Customer ~~uses~~Acquisition. We pursue a ~~microarray~~multi-~~based~~channel ~~autosomal~~marketing ~~DNA~~and ~~test~~customer acquisition program that includes television and sponsorship advertising, ~~which~~paid ~~surveys~~and aorganic ~~person’s~~search ~~entire~~marketing, ~~genome~~online ~~at over~~display ~~700~~advertising,~~000~~ ~~regions~~content ofmarketing, ~~their~~promotions ~~genetic~~and ~~code~~affiliate ~~using~~programs. ~~DNA~~Through ~~extracted~~our ~~from~~advertising, awe ~~saliva~~seek ~~sample~~to increase brand and category awareness while attracting new customers. We ~~then~~actively ~~leverage~~manage ~~proprietary~~our ~~algorithms~~media ~~and~~mix ~~DNA~~with ~~reference~~a ~~samples~~goal ~~from~~of ~~around~~maximizing the ~~world~~efficiency toof ~~predict~~our amarketing ~~user’s~~investment ~~ethnic~~while ~~origins~~effectively driving new customer growth. ~~Our~~We ~~DNA~~focus ~~technology~~on ~~also~~improving ~~enables users~~conversion tothrough ~~connect~~all ~~with~~stages ~~groups~~of the acquisition process, from contemplation of ~~other~~visiting ~~users~~one ~~with~~of ~~whom~~our ~~they~~sites ~~share~~to ~~DNA~~purchasing a service. As part of this process, we continuously test and ~~with~~optimize ~~whom~~messaging ~~they~~flows, ~~share~~pricing aand ~~common~~packaging. ~~ancestor~~Once an individual is in ~~their~~our ~~family~~contact ~~tree.~~database, we engage them through on-going targeted communications and offers.

~~Mobile~~Retention Marketing. WeOur ~~believe~~retention ~~that~~marketing ~~mobile~~is ~~technology~~focused ison ~~well~~establishing and maintaining long-~~suited~~term torelationships ~~provide~~with aour ~~simple~~customers ~~and~~through ~~convenient~~personalized ~~way~~direct ~~for~~marketing, ~~new~~including ~~users~~on-site toand ~~get~~off-site ~~started~~messaging inand ~~family history~~email and tothrough ~~provide~~our ~~greater~~customer ~~accessibility~~support. We seek to ~~existing~~increase ~~subscribers.~~engagement Asand ~~such,~~maximize weretention ~~offer~~by ~~mobile~~delivering ~~apps~~a ~~for~~superior ~~both~~customer ~~iOS~~experience and ~~Android~~demonstrating onongoing ~~which~~value. ~~registered~~We ~~users~~also ~~may~~cross ~~create~~promote ~~family~~additional ~~trees~~services ~~for~~or ~~free~~up-sell orpremium ~~purchase~~services, ~~monthly~~such ~~subscriptions~~as ~~for~~our all-access package, to ~~varying~~our ~~content sets.~~current ~~Additionally,~~customers ~~subscribers~~in ~~may~~order ~~access~~to ~~their~~increase ~~existing~~our ~~family~~revenue ~~trees,~~per ~~receive~~customer. We monitor subscription package and ~~evaluate~~duration ~~hints~~mix on our various websites, ~~upload~~payment ~~photos~~processing, ~~and~~cancellation ~~collaborate~~reasons, ~~with~~customer ~~other~~engagement ~~members~~and ofoverall ~~our~~customer ~~community~~satisfaction.

~~Content~~Win-Back ~~Process~~Marketing. We attract, or “win back,” a significant number of lapsed or former customers who return to their family history research after a period of inactivity. We seek to win back these customers through personalized direct marketing, on-site and ~~Technologies~~off-site messaging, targeted offers and compelling features like record hinting on new and existing content collections and matches to other users’ family trees. We also may market a different service offering from what was originally purchased, such as AncestryDNA to a former subscriber, to reignite their interest in family history.

Our extensive content offering includes a global collection of birth, marriage and death records, census records, immigration documents, photographs, maps, military records, personal narratives, newspapers and other collections that are accumulated on our websites. We regularly add new historical content so that our subscribers are able to continue making new discoveries in their family history research. In 2014, we added more than three billion records to our content collections, including over one billion new birth, marriage, death, census and church records from 67 different countries through our collaboration with FamilySearch. We primarily acquire content through the following methods: 6

6Table of Contents

~~Table of Contents~~Technology

~~Institutional~~We ~~Content~~have applied substantial resources to develop and maintain proprietary technologies designed to provide a rewarding experience and compelling value proposition to our customers. ~~Institutional~~For ~~content~~example, ~~represents~~in ~~content~~2015, we completed a broad redesign of our core Ancestry websites to provide subscribers the features and tools to better build their family stories in a narrative format that weis ~~have~~more ~~acquired, digitized~~engaging and ~~indexed,~~easier ~~including~~to ~~content~~share with family and friends. We believe our investments in these areas provide us with a competitive advantage, and we ~~have~~intend ~~acquired~~to ~~through~~continue ~~business~~developing ~~acquisitions~~and enhancing these proprietary technologies. Total technology and development expenses were $97.1 million, $94.2 million and $85.7 million for the years ended December 31, 2015, 2014 and 2013, respectively.

~~• Acquisition~~Search. WeHistorical ~~acquire~~documents ~~the~~can ~~rights~~be difficult to ~~historical~~search ~~records~~effectively ~~from~~using ~~national,~~general ~~state~~search ~~and~~engines ~~local~~because ~~government~~of ~~archives,~~variations ~~historical~~in ~~societies~~names, ~~religious~~changes ~~institutions~~in ~~and~~geographic ~~private~~boundaries ~~collectors~~and ofother ~~historical~~factors. ~~content~~Our ~~around~~proprietary ~~the~~search ~~world.~~engine Weprovides ~~have~~an ~~built~~innovative, ~~long~~technology-~~term~~driven ~~relationships~~solution ~~with~~to ~~these~~the ~~content~~challenges ~~partners,~~created ~~such~~by as the ~~United~~inherent ~~States~~difficulty ~~National Archives and Records Administration, The National Archives~~ of ~~the~~searching ~~United~~historical ~~Kingdom~~content. ~~and~~Our ~~FamilySearch.~~search Wesolution ~~seek~~focuses toon ~~maintain~~structured and ~~extend~~semi-structured ~~our~~records ~~existing~~in ~~strategic~~addition ~~relationships with these partners and~~ to ~~find~~free ~~new~~text ~~sources~~search, ofautomatically ~~unique~~corrects ~~family~~for ~~history~~incomplete ~~content~~information ~~throughout the world. We believe our content collections~~ and ~~relationships~~incorporates ~~provide~~name, usdate ~~with a significant competitive advantage. We plan to continue to acquire new content~~ and ~~build~~location ~~new~~proximity ~~relationships~~algorithms ~~on an ongoing basis~~ to ~~offer~~make ~~our~~searching ~~users~~easier ~~additional historical records~~ for ~~their research. We own most of the images in~~ our ~~databases, in most cases on a non-exclusive basis, though we generally do not own the underlying original historical documents~~subscribers.

~~• Digitization~~Hints. ~~Working~~Our ~~with~~proprietary ~~historical~~record ~~documents~~hinting istechnology ~~challenging~~performs ~~because~~an ~~many~~algorithmic ~~source~~analysis ~~documents~~of ~~are~~users’ ~~handwritten~~family ortrees ~~damaged,~~ and ~~many~~then ~~microfilm~~suggests ~~images~~new ~~are~~records ofto ~~poor~~help ~~quality.~~subscribers Wediscover ~~have~~more ~~developed~~information ~~proprietary~~about ~~technologies~~their ~~and~~ancestors. ~~processes~~We believe that ~~have~~these ~~allowed~~personalized ushints tocan ~~efficiently~~accelerate ~~handle~~our ~~and~~subscribers’ ~~digitize~~research, ~~hundreds~~thereby ofmaking ~~millions~~them ofmore ~~documents~~successful ~~that~~and ~~vary~~their ~~significantly~~experience inmore ~~format~~rewarding. ~~and~~In ~~quality.~~2015, Weapproximately ~~digitize~~1.2 ~~content~~billion inhints ~~our~~were ~~headquarters~~accepted inby ~~Provo,~~our ~~Utah,~~subscribers. inWe ~~the~~plan ~~Washington,~~to ~~D.C.~~continue ~~area,~~to inmake ~~London,~~improvements ~~England~~to ~~and~~our inhinting ~~multiple~~functionality ~~distributed~~to ~~locations~~help ~~around~~make ~~the~~discoveries ~~world~~even easier.

~~• Indexing~~DNA. WeOur ~~have~~AncestryDNA ~~invested~~service ~~significant~~uses ~~resources~~a inmicroarray-based ~~the~~autosomal ~~indexing~~DNA oftest, ~~records~~which tosurveys ~~make~~a ~~our~~person’s ~~content~~entire ~~collection~~genome ~~accessible~~at ~~and~~over ~~searchable~~700,000 ~~for~~regions ~~our~~of ~~subscribers.~~their Wegenetic ~~outsource~~code ausing ~~significant~~DNA ~~portion~~extracted offrom ~~our~~a ~~indexing~~saliva ~~projects~~sample. toWe ~~vendors~~then toleverage ~~transcribe~~proprietary ~~handwritten~~algorithms ~~documents~~and toDNA ~~create~~reference ~~indexes.~~samples Wefrom ~~generally~~around ~~own~~ the ~~indexes~~world ~~that~~to ~~our~~estimate ~~vendors~~a ~~create~~user’s ethnic origins. WeOur ~~have~~DNA technology also ~~developed~~identifies ~~proprietary~~potential ~~algorithmic~~ancestors ~~technologies~~and ~~that~~enables ~~allow~~users us to ~~efficiently~~connect ~~create~~with ~~fielded~~groups ~~and~~of ~~searchable~~other ~~indexes~~users ~~for~~with ~~printed~~whom ~~record~~they ~~sources,~~share ~~such~~DNA asand ~~directories~~with ~~and~~whom ~~electoral~~they ~~rolls~~share a common ancestor in their family tree.

~~User-Generated Content~~Mobile. ~~Our~~We ~~registered users~~continue ~~are~~to ainvest ~~meaningful~~in ~~source~~mobile oftechnology ~~content,~~and ~~principally~~believe byour ~~creating~~mobile ~~family~~apps ~~trees~~and ~~through~~mobile ~~their~~web ~~research.~~experience Asare ofwell-suited ~~December 31,~~to ~~2014,~~provide wea ~~have~~simple ~~more~~and ~~than~~convenient ~~60 million~~way ~~family~~for ~~trees~~new ~~containing~~users ~~more~~to ~~than~~get 7started ~~billion~~in ~~profiles~~family onhistory ~~our~~and ~~websites.~~to ~~Individuals often~~provide ~~have~~greater ~~significant~~accessibility ~~family~~to ~~records,~~existing ~~photographs~~customers. ~~and~~We ~~stories~~recently ~~that~~enhanced ~~are~~our ofmobile ~~interest~~web toexperience ~~others~~ with ~~common~~improved ~~family~~responsive ~~history.~~design ~~Uploading~~capabilities ~~these~~as ~~records~~part ~~not~~of ~~only~~the ~~preserves~~upgrade ~~them~~of ~~from~~our ~~damage~~core orAncestry ~~destruction,~~websites. ~~but~~Our ~~also~~mobile ~~makes~~Ancestry ~~them~~apps ~~sharable~~for ~~and~~both ~~accessible globally~~iOS toand ~~other~~Android ~~subscribers~~have ofbeen ~~our~~downloaded ~~core~~more ~~Ancestry~~than ~~websites.~~13 ~~The~~million ~~publicly-shared~~times ~~family~~and ~~trees~~offer ona ~~our~~near-complete ~~website~~Ancestry ~~can~~experience, ~~offer~~including ~~many~~the ~~subscribers~~ability ato ~~head~~create ~~start in their~~ family ~~history~~trees, ~~research.~~access Astheir ofexisting ~~December 31,~~family ~~2014~~trees, ~~users~~receive ~~have~~and ~~uploaded~~evaluate ~~over 272 million~~hints, ~~pieces~~search offor ~~content~~records, ~~such~~upload asphotos ~~photographs,~~and ~~written~~collaborate ~~stories~~with ~~and~~other ~~scanned~~members ~~documents.~~of our community.

~~Other~~Big ~~Content Sources~~Tree. We ~~also scan,~~refer orto ~~crawl,~~our ~~searchable~~ability ~~external~~to ~~online~~aggregate ~~resources~~records ~~for~~and ~~additional~~calculate ~~content~~relationship ~~that~~paths isto ~~then~~other ~~made~~users ~~accessible~~and onpotential ~~our~~ancestors ~~websites.~~as ~~Crawling~~the ~~content~~Big inTree. Through this ~~manner~~technology, ~~allows~~we ~~our~~have ~~core~~stitched ~~Ancestry~~together ~~websites~~8 tobillion ~~function~~profiles asfrom aover ~~genealogical~~78 ~~search~~million ~~engine, providing users access to the full range of~~ family ~~history~~trees ~~content~~from ~~on the web with the functionality of~~ our core Ancestry websites~~’ proprietary tools and features~~. The ~~source~~Big ofTree ~~the~~enables ~~crawled~~us ~~content is attributed~~ to ~~the~~more ~~third~~quickly ~~parties~~onboard ~~from~~customers ~~which~~into ~~the~~a ~~content~~subscription ~~is derived~~ and ~~can~~make ~~provide~~improvements ~~a valuable source of traffic~~ to ~~the~~our ~~websites~~search ofresults ~~small archives, libraries,~~ and ~~family~~hints ~~history~~provided ~~societies~~to ~~around~~these ~~the world~~subscribers. ~~Additionally, certain content collections from the FamilySearch website are available directly on our core Ancestry websites.~~

~~Operations~~Content Process and Technologies

~~Substantially~~We ~~all~~believe the foundation of our ~~communications,~~services ~~network~~is ~~and~~our ~~computer~~extensive ~~hardware~~content ~~used~~offering. toIn ~~operate~~2015, ~~our~~we ~~websites~~added ~~are~~more ~~co-located~~than in1.7 abillion ~~third-party~~records ~~facility~~to ~~in Salt~~our ~~Lake~~core ~~City,~~Ancestry ~~Utah.~~websites' Incontent ~~addition~~collections, weincluding ~~utilize~~over a150 ~~combination~~million images of ~~third-party,~~U.S. ~~Internet-based~~probate orand ~~“cloud”~~will ~~computing~~records ~~services~~from ~~and~~across ~~off-site~~all ~~backup~~50 ~~services~~states, in200 ~~connection~~million ~~with~~Mexican ~~our~~Civil ~~business~~Registration ~~operations~~records and ~~our~~70 ~~disaster~~million ~~recovery~~German ~~systems~~records. WeIn ~~have designed~~addition, our ~~websites~~DNA todatabase behas ~~highly~~approximately ~~available,~~1.4 ~~secure~~million ~~and~~samples ~~cost-effective~~as ~~using a variety~~ of ~~proprietary software~~December 31, ~~third-party~~2015. ~~services~~Our ~~and~~vast ~~freely~~family ~~available~~tree and ~~commercially~~DNA ~~supported~~data ~~tools.~~not Weonly ~~can~~allow ~~scale~~us to ~~accommodate~~better ~~increasing~~hint ~~numbers~~new ofcontent ~~registered users~~discoveries byto ~~adding~~our ~~relatively~~customers ~~inexpensive~~but ~~industry-standard~~also ~~hardware.~~has Wecreated ~~use~~a ~~encryption~~database ~~technologies~~resource ~~and certificates~~ for ~~secure~~private ~~transmission~~third-party ~~of personal information between users and our websites~~research. ~~Maintaining~~We ~~the~~regularly ~~integrity~~add ~~and~~new ~~security~~content ofso that our ~~websites is~~customers ~~critical,~~are ~~and~~able weto ~~have~~continue amaking ~~dedicated~~new ~~security~~discoveries ~~team~~in ~~that~~their ~~promotes~~family ~~industry~~history ~~best~~research. ~~practices~~We ~~and~~acquire ~~drives~~content ~~compliance~~primarily ~~with~~through ~~data~~the ~~security~~following ~~standards.~~ methods:

~~Competition~~Institutional Content. Institutional content represents content that we have acquired, digitized and/or indexed, including content we have acquired through business acquisitions. These records include birth, marriage and death records, census records, immigration documents, maps, military records, newspapers, among others.

We face competition from a variety of sources including profit and non-profit entities, government agencies, genealogical societies and DNA testing providers. We expect our competition to grow through industry consolidation and the emergence of new participants in our existing markets. We generally compete on the basis of content, technology, ease of use, brand recognition, quality and breadth of products, service and support, price and the number of network users with whom other users can collaborate. Many external factors, including the cost of marketing, content acquisition, technology and our current and future competitors’ pricing and marketing strategies, can significantly affect our competitive strategies, including pricing. We believe that we compete favorably with respect to these factors, and that none of our competitors offers as broad an array of products and services or as compelling a value proposition to consumers interested in online family history research. 7

~~Our~~Table ~~competitors~~of may have greater resources, more well-established brand recognition or more sophisticated technologies, such as search algorithms, than we do. Additionally, our competitors may more easily obtain relevant records in domestic and international Contents

7• Acquisition. We acquire the rights to historical records from national, state and local government archives, historical societies, religious institutions and private collectors of historical content around the world. We have built long-term relationships with these content partners, such as the United States National Archives and Records Administration, The National Archives of the United Kingdom and FamilySearch. We seek to maintain and extend our existing strategic relationships with these partners and to find new sources of unique family history content throughout the world. We believe our content collections and relationships provide us with a competitive advantage. We plan to continue to acquire new content and build new relationships on an ongoing basis to offer our users additional historical records for their research. We own most of the images in our databases though we generally do not own the underlying original historical documents.

~~Table~~• Digitization. Working with historical documents is challenging because many source documents are handwritten or damaged, and many microfilm images are of ~~Contents~~poor quality. We have developed proprietary technologies and processes that have allowed us to efficiently handle and digitize hundreds of millions of documents that vary significantly in format and quality. We digitize content in our headquarters in Provo, Utah and in multiple locations around the world.

~~markets~~• orIndexing. ~~offer~~We ~~new~~have ~~categories~~invested ofsignificant ~~content,~~resources ~~products~~in orcreating ~~services~~indexes ~~before~~of werecords ~~do,~~to ormake atour ~~lower~~content ~~prices,~~collection ~~which~~accessible ~~may~~and ~~give~~searchable ~~them~~for aour ~~competitive~~subscribers. ~~advantage~~We inoutsource ~~attracting~~a ~~subscribers.~~significant ~~Many~~portion of our ~~competitors, such~~indexing asprojects ~~FamilySearch,~~to ~~provide~~vendors ~~genealogical~~that ~~records~~create ~~free~~these ofindexes ~~charge~~from handwritten documents. InWe ~~addition~~generally toown ~~competition~~the ~~from~~indexes ~~outside~~that ~~sources,~~our ~~certain~~vendors ofcreate. ~~our~~We ~~products,~~have ~~such~~also asdeveloped ~~Archives.com,~~proprietary ~~may~~algorithmic ~~compete~~technologies ~~with~~that ~~our~~allow ~~core~~us ~~Ancestry~~to ~~websites~~efficiently create fielded and searchable indexes for ~~subscribers.~~printed record sources, such as directories and electoral rolls.

~~For~~User-Generated ~~further~~Content. ~~discussion~~Our ~~refer~~users toare ~~Item~~a meaningful source of content, principally by creating family trees through their research. As of December 1A31, 2015, we have more than 78 million family trees containing more than 8 billion profiles on our core Ancestry websites. ~~“Risk~~Additionally, ~~Factors~~our –Find-A-Grave ~~Risks~~website ~~Related~~has more than 141 million grave records and 122 million photos that were contributed to ~~Our~~the ~~Business~~site ~~–We~~by ~~face~~users. ~~competition~~Individuals ~~from~~often ahave ~~number of~~significant ~~different~~family ~~sources~~records, ~~some~~photographs and stories that are of ~~which~~interest ~~offer~~to ~~free~~others ~~content~~with common family history. Uploading these records not only preserves them from damage or destruction, but also makes them sharable and ~~our~~accessible ~~failure~~globally to ~~compete~~other ~~effectively~~subscribers. ~~could~~The ~~materially~~publicly-shared ~~impact~~family trees on our ~~revenues~~website can offer many subscribers a head start in their family history research. As of December 31, ~~results~~2015, users with publicly-shared family trees have uploaded over 176 million pieces of ~~operations~~content, such as photographs, written stories and ~~financial~~scanned ~~condition~~documents to our core Ancestry websites.”

~~Intellectual~~DNA ~~Property~~Content. Our growing DNA database forms a genetic network that is expanding rapidly and can be leveraged to provide deeper insights. Our DNA network, in combination with our 78 million family trees, allows users to receive content hints regarding distant living cousins and potential ancestors. As our DNA database grows, our ability to provide customers with additional family history discoveries also increases. In addition, our DNA database is a resource for private third-party research.

WeOther ~~regard protection~~Content ofSources. ~~our~~We ~~intellectual~~also ~~property~~scan, ~~including~~or ~~content~~crawl, assearchable anexternal ~~important~~online ~~factor~~resources tofor ~~our~~additional ~~success. To protect our proprietary~~ content ~~and~~that ~~intellectual~~is ~~property,~~then wemade ~~rely~~accessible on ~~trademark,~~our ~~copyright,~~websites. ~~patent~~Crawling ~~and~~content ~~trade~~in ~~secret~~this ~~protection~~manner ~~laws~~allows ~~and~~our ~~on contractual~~core ~~agreements~~Ancestry ~~with~~websites ~~third~~to ~~parties.~~function Weas ~~rely~~a ~~primarily~~genealogical onsearch ~~trade~~engine, ~~secret~~providing ~~and~~users ~~similar~~access ~~intellectual property laws~~ to ~~protect~~a ~~our~~broader ~~search~~range ~~technology,~~of ~~software~~family ~~products~~history ~~and~~content ~~digitization~~on ~~and~~the ~~indexing~~web ~~processes.~~with In the ~~United~~functionality ~~States, we currently have several patents issued, including for digitization, indexing, storage, correlation, display~~ of ~~content~~our ~~and~~core ~~related~~Ancestry towebsites’ ~~our~~proprietary ~~AncestryDNA~~tools ~~product,~~ and ~~we have additional patents pending~~features. WeThe ~~own~~source ~~numerous~~of ~~trademark registrations for~~ the ~~trademarks~~crawled ~~for~~content ~~our products~~is ~~and~~attributed ~~services~~to in the ~~U.S.~~third ~~and~~parties ~~internationally.~~from ~~Some~~which ofthe ~~our~~content ~~trademarks~~is ~~contain~~derived ~~words or terms having an arguably common usage~~ and, ascan provide a ~~result,~~valuable ~~may~~source ~~not be protectable under applicable law. Because~~ of ~~this~~traffic ~~concern, we have elected not~~ to ~~file applications~~the ~~with~~websites ~~respect to certain~~ of ~~our~~small ~~trademarks~~archives, libraries, and ~~some~~family ofhistory ~~our~~societies ~~trademarks~~around ~~for~~the ~~which we have filed applications have encountered and may encounter obstacles~~world.

~~While~~We wealso ~~possess~~produce ~~intellectual~~instructional ~~property~~videos ~~rights~~on invarious ~~aspects~~topics of ~~our~~interest ~~digital~~in ~~content~~family ~~databases,~~history ~~these content databases are not protected by any registered copyrights or other registered intellectual property or statutory rights~~research. ~~Our~~In ~~content databases are protected by user agreements that limit access to and use of our data. However~~addition, ~~compliance~~we ~~with~~have ~~use~~created ~~restrictions~~narratives isaround ~~difficult~~historical ~~to monitor~~events, ~~and~~ ~~our~~such ~~proprietary~~as ~~rights~~the inRevolutionary ~~these~~War ~~content~~or ~~databases~~the ~~may~~Irish bepotato ~~more~~famine, ~~difficult~~ to ~~enforce~~help orour ~~protect~~customers ~~than~~discover ~~other~~the ~~forms~~stories ofbehind ~~intellectual~~their ~~property~~family ~~rights~~trees.

~~For further discussion refer to Item 1A. “Risk Factors – Risks Related to Intellectual Property.”~~ Operations

~~Employees~~Substantially all of our communications, network and computer hardware used to operate our websites are co-located in a third-party facility in Salt Lake City, Utah. We also store certain data in a third-party facility in Ireland. In addition, we utilize a combination of third-party, Internet-based or “cloud” computing services and off-site backup services in connection with our business operations and our disaster recovery systems. We have designed our websites to be highly available, secure and cost-effective using a variety of proprietary software, third-party services and freely available and commercially supported tools. We can scale to accommodate increasing numbers of users by adding relatively inexpensive industry-standard hardware. We use encryption technologies and certificates for secure transmission of personal information between users and our websites, and we employ additional security controls in regards to DNA and personal identifiable information. Maintaining the integrity and security of our websites and data is critical, and we have a dedicated security team that drives compliance with data security standards.

At December 31, 2014, we had 1,385 employees of whom 1,149 were employed full-time. None of our employees is covered by a collective bargaining agreement, except to the extent required by the laws of certain foreign jurisdictions. We have not experienced employment-related work stoppages, and we consider our employee relations to be good. 8

~~Financial~~Table ~~Information~~of ~~about Segments and Geographic Areas~~ Contents

~~We are organized as, and operate in, a single segment.~~ For ~~financial~~further ~~information~~discussion ~~about our segment and our geographic areas,~~ refer to ~~Note~~the ~~12 to~~following ~~the~~risk ~~Consolidated~~factors ~~Financial~~within ~~Statements~~Item 1A. ~~included~~Risk inFactors ~~this~~– ~~Annual~~Risks ~~Report.~~Related to Our Business:

~~Other~~• ~~Information~~Cyber-attacks, continued service outages or significant disruptions in service on our websites or in our computer systems, which are currently hosted primarily by a single third party, could damage our reputation and result in a loss of customers, which would harm our business and operating results; and

• Our ~~corporate~~possession ~~headquarters~~and ~~are~~use ~~located~~of atpersonal ~~360~~information ~~West~~presents ~~4800~~risks ~~North, Provo, UT 84604, and our telephone number at~~ that ~~address~~could ~~is (801) 705-7000.~~harm ~~Our corporate website address is http://corporate.ancestry.com, and~~ our ~~investor relations website is http://ir~~business.~~ancestry.com.~~ ~~The~~Unauthorized ~~following~~disclosure ~~filings~~or ~~are~~use ~~available for download free~~ of ~~charge~~such ~~through our investor relations website after we file them with the SEC: Annual Reports on Form 10-K~~data, ~~Quarterly~~whether ~~Reports~~through onbreach ~~Form 10-Q, Current Reports on Form 8-K and all amendments to those reports. The contents~~ of our ~~websites~~network ~~are~~security ~~not~~or ~~incorporated in~~otherwise, orcould ~~otherwise~~expose us to ~~be regarded~~significant asliability ~~part~~and ~~of,~~damage ~~this~~our ~~Annual Report~~reputation.

All of our public filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports and other ownership-related filings are available on the SEC’s website at www.sec.gov. Competition

~~Our~~We ~~primary~~face ~~operating~~competition ~~subsidiary~~from a variety of sources including profit and non-profit entities, ~~Ancestry~~government agencies, genealogical societies and DNA testing providers.~~com~~ ~~Operations~~We ~~Inc~~expect our competition to grow primarily through the emergence of new participants in our existing markets. We generally compete on the basis of content, ~~was~~technology, ~~originally~~ease ~~incorporated~~of inuse, ~~Utah~~brand inrecognition, ~~1983~~quality and ~~reincorporated~~breadth inof ~~Delaware~~our ~~in 1998~~products, service and support, price, genotype database size and the number of network users with whom other users can collaborate. Many external factors, including the cost of marketing, third-party services, content acquisition, technology, regulatory requirements and approval and our current and future competitors’ pricing and marketing strategies, can significantly affect our competitive strategies, including pricing. We believe that we compete favorably with respect to these factors, and that none of our competitors offers as broad an array of services or as compelling a value proposition to consumers interested in online or genetic family history research.

~~Ancestry~~Our competitors may have greater resources, more well-established brand recognition or more sophisticated technologies, such as search algorithms or DNA or health technologies, than we do.~~com~~ ~~LLC~~Additionally, isour competitors may more easily provide products and services in domestic and international markets or offer new categories of content, products or services before we do, or at lower prices, which may give them a ~~holding~~competitive ~~company~~advantage in attracting customers. The markets for Internet-based services, health information, and ~~substantially~~genetic ~~all~~services ofevolve at a very rapid pace, and our ~~operations~~competitors may offer products and services that are ~~conducted~~superior byto ~~wholly-owned~~any ~~subsidiaries~~of our products and services or may release new products and services sooner than we can. In addition to competition from outside sources, certain of our services may compete with our core Ancestry websites for subscribers.

8For further discussion refer to Item 1A. “Risk Factors – Risks Related to Our Business – We face competition from a number of different sources, some of which offer products or services at lower prices than we do, and our failure to compete effectively could materially impact our revenues, results of operations and financial condition.”

~~Table~~Intellectual ~~of Contents~~Property

~~Item~~We 1Aregard protection of our intellectual property, including content, as an important factor to our success. ~~Risk~~To ~~Factors~~protect our proprietary content and intellectual property, we rely on trademark, copyright, patent and trade secret protection laws and on contractual agreements with third parties. We rely primarily on trade secret and similar intellectual property laws to protect our search technology, software products and digitization and indexing processes. In the United States, we currently have several patents issued, including for digitization, indexing, storage, correlation, display of content and related to our AncestryDNA service, and we have additional patents pending. We own numerous trademark registrations for the trademarks for our services in the U.S. and internationally. Some of our trademarks contain words or terms having an arguably common usage and, as a result, may not be protectable under applicable law. Because of this concern, we have elected not to file applications with respect to certain of our trademarks, and some of our trademarks for which we have filed applications have encountered and may encounter obstacles.

AWhile ~~wide~~we ~~range~~possess ofintellectual ~~factors~~property ~~could~~rights ~~materially~~in ~~affect~~aspects of our ~~performance.~~digital ~~The~~content ~~following~~databases, ~~factors~~these ~~and~~content ~~other~~databases ~~information~~are ~~included~~not inprotected ~~this~~by ~~Annual~~any ~~Report should~~registered becopyrights ~~carefully~~or ~~considered.~~other ~~Although~~registered ~~the~~intellectual ~~risk~~property ~~factors~~or ~~described~~statutory ~~below~~rights. Our content databases are ~~the~~protected ~~ones~~by ~~management~~user ~~deems~~agreements ~~significant,~~that ~~additional~~limit ~~risks~~access to and ~~uncertainties~~use ~~not~~of ~~presently~~our ~~known~~data. toHowever, uscompliance orwith ~~that~~use werestrictions ~~presently~~is ~~deem~~difficult ~~less~~to ~~significant~~monitor, ~~may~~and ~~also~~our ~~impair~~proprietary ~~our~~rights ~~business operations.~~in Ifthese ~~any~~content ofdatabases ~~the~~may ~~following~~be ~~events~~more ~~actually~~difficult ~~occur,~~to ~~our~~enforce ~~business,~~or ~~financial~~protect ~~condition~~than ~~and~~other ~~results~~forms of ~~operations~~intellectual ~~could~~property ~~be adversely affected~~rights.

WeFor ~~may~~further ~~have~~discussion ~~already~~refer ~~engaged~~to ~~as subscribers substantially all of the total addressable market for family history services~~Item 1A. If“Risk ~~our~~Factors ~~efforts~~– toRisks ~~retain existing~~Related ~~and~~ to ~~attract~~Intellectual ~~new subscribers do not succeed, our number of subscribers could decline and our revenues may be materially adversely affected~~Property. ”

We generate substantially all of our revenues from subscriptions to our services, and we expect that we will continue to depend upon subscription revenues for substantially all of our revenues in the foreseeable future. We must continue to retain existing and to attract new subscribers both to grow our business and to replace subscribers who choose to cancel their subscriptions. We seek to do this in part by investing in existing and new product platforms, services and technologies, such as AncestryDNA, Archives.com and mobile, and by expanding to new markets. If consumers do not perceive our services to be reliable, valuable and of high quality, if we fail to sufficiently invest in our product platform, if we fail to regularly introduce new and improved services and more content, if we introduce new services that are not favorably received by the market, if we fail to adequately address public concern regarding privacy and data security, if consumer interest in online family history services declines, or if we find that we have already engaged as subscribers substantially all of the total addressable market for family history services, we may not be able to retain existing or to attract new subscribers and our revenues could be materially adversely affected. Subscribers choose to cancel their subscriptions for many personal reasons, including a desire to reduce discretionary spending, a perception that they do not have sufficient time to use the service or otherwise do not use the service sufficiently or customer service issues are not satisfactorily resolved. Employees

~~The~~At ~~relative~~December 31, ~~service levels~~2015, ~~pricing~~we ~~and~~had ~~related~~1,342 ~~features~~employees of ~~competitors~~whom ~~to our products and services~~1,176 ~~and~~were ~~the~~employed ~~size of the family history market are some additional factors that may adversely impact our ability to retain existing subscribers and to attract new subscribers~~full-time. ~~Some~~None of our ~~current~~employees ~~competitors~~is ~~provide~~covered ~~genealogical~~by ~~records~~a ~~free~~collective ofbargaining ~~charge. Some governments or private organizations may make historical records available online at no cost to consumers~~agreement, ~~and~~except ~~some commercial entities could choose~~ to ~~make~~the ~~such~~extent ~~records~~required ~~available~~by onthe anlaws ~~advertising-supported~~of ~~basis rather than a subscription basis. In addition to competition from outside services,~~ certain offoreign ~~our products, such as Archives~~jurisdictions.~~com,~~ ~~may~~We ~~compete~~have ~~with~~not ~~our~~experienced ~~core~~employment-related ~~Ancestry~~work ~~websites for subscribers. If consumers are able to satisfy their family history research needs at no or lower cost~~stoppages, ~~they may not perceive value in our higher priced products~~ and ~~services.~~we ~~Further,~~consider our ~~number~~employee ofrelations ~~subscribers~~to ~~may~~be ~~decrease as a result of a full penetration of the total addressable market for, or a declining interest in, family history research~~good.

Any of these factors could cause our number of subscribers to fall, which could materially adversely impact our business, financial condition and results of operations. For example, our number of total subscribers decreased as of December 31, 2014 compared to December 31, 2013. Our total number of subscribers may continue to decline in future periods. If we are unable to effectively retain existing subscribers and to attract new subscribers or our number of subscribers further declines, our business, financial condition and results of operations could be materially adversely affected. 9

~~Our~~Table ~~business may not grow or may contract, which could negatively affect our financial condition and results~~ of ~~operations.~~ Contents

~~While~~Financial weInformation ~~have~~about ~~experienced~~Segments ~~periods of rapid growth in the past, our total number of subscribers decreased as of December 31, 2014 compared to December 31, 2013,~~ and weGeographic do not expect rapid growth rates in future periods. As such, you should not rely on the growth of any prior year or other period as an indication of our future performance. If our business does not grow while we continue to devote substantial resources and funds to improving our existing or new technologies and product offerings, to continue acquiring new and relevant content and also to expanding awareness of our brand and category through marketing, our margins in the near term may be reduced. If our revenue growth rate were to further decline or become negative, it could materially adversely affect our financial condition and results of operations. Areas

~~Our~~We ~~business~~are ~~strategy~~organized as, and ~~projections~~operate ~~rely~~in, on a ~~number~~single ~~of assumptions, some or all of which may be incorrect~~segment. For ~~example,~~financial itinformation isabout ~~difficult to predict the acceptance by the market of~~ our ~~products~~segment and ~~services.~~our ~~Also~~geographic areas, werefer ~~believe that consumers will be willing~~ to ~~pay~~Note ~~for~~12 ~~subscriptions~~ to ~~our online family history resources, notwithstanding~~ the ~~fact~~Consolidated ~~that~~Financial ~~some~~Statements ofincluded ~~our current and future competitors may provide such resources free of charge. We cannot accurately predict whether our products and services will achieve significant acceptance by potential users~~ in ~~larger~~this ~~numbers~~Annual ~~than at present as we may have already engaged substantially all of the total addressable market for family history research~~Report. ~~You should therefore not rely on our historic growth rates as an indication of future growth.~~

9Other Information

~~Table~~Our corporate headquarters are located at 360 West 4800 North, Provo, UT 84604, and our telephone number at that address is (801) 705-7000. Our corporate website address is http://corporate.ancestry.com, and our investor relations website is http://ir.ancestry.com. The following filings are available for download free of ~~Contents~~charge through our investor relations website after we file them with the SEC: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports. The contents of our websites are not incorporated in, or otherwise to be regarded as part of, this Annual Report.

~~Consumers~~All of ~~internet-based~~our ~~services~~public ~~are increasingly converting to mobile platforms~~filings, ~~and~~including weAnnual ~~have~~Reports ~~faced challenges~~on inForm ~~our~~10-K, ~~efforts~~Quarterly toReports ~~provide~~on ~~users~~Form ~~with~~10-Q, aCurrent ~~mobile~~Reports ~~experience~~on ~~that~~Form 8-K, ~~converts~~all ~~them~~amendments to ~~subscribers. If~~those wereports are ~~unable~~available toon ~~provide our mobile users with access to~~ the ~~full~~SEC’s ~~range~~website ofat ~~our services, or adapt our products to other technological changes and subscriber needs for mobile platforms, we may not remain competitive and our business may decline~~www. sec.gov.

~~As consumers of web services increasingly rely exclusively on mobile devices, our mobile app and the mobile web are becoming important ways for users to engage with our service~~Ancestry.com ~~Despite~~LLC ~~our~~is ~~efforts~~a toholding ~~date~~company, ~~we have not been able to meaningfully monetize mobile users of our services,~~ and wesubstantially ~~may~~all ~~not be able to monetize the engagement~~ of our ~~mobile~~operations ~~users~~are inconducted ~~the~~by ~~future~~wholly-owned subsidiaries. IfAncestry.com ~~our~~LLC ~~mobile app or mobile web experience~~ is ~~slow,~~a ~~subject~~limited toliability ~~intermittent~~company ~~failures,~~organized ~~difficult~~in to2012 ~~use~~under ~~or does not contain~~ the ~~same~~laws ~~important functionality~~of ~~available~~Delaware. onOur ~~our~~primary ~~desktop~~operating ~~experience~~subsidiary, itAncestry.com ~~may~~Operations ~~not meet the user’s expectations and as a result could damage our reputation~~Inc., ~~prevent~~was usoriginally ~~from~~incorporated ~~retaining~~in ~~existing~~Utah orin ~~acquiring~~1983 ~~new subscribers~~ and ~~may~~reincorporated ~~have~~in aDelaware ~~material~~in ~~adverse effect on our business and results of operations~~1998.

Most mobile apps are downloaded from various service providers that charge us commissions on in-app sales of our services, but do not currently charge us fees or commissions for distribution of our mobile apps. If one or more of these service providers were to modify their terms of service or other policies to increase their commission fee on in-app purchases, begin to impose fees or commissions upon us in connection with their distribution of our mobile apps or prohibit us from distributing our mobile apps on their platforms, we may be unable to attract on a cost-effective basis a similar number of new registered users that we can convert to subscribers, which could materially affect our financial condition and results of operations. 10

~~Products~~Table orof ~~technologies we invest in or develop could be costly, may not be well received by the market and may not ultimately drive growth in our business.~~ Contents

AsItem ~~part of our business strategy, we have made and will continue to make significant investments in the development or acquisition of new products and technologies, such as our AncestryDNA service~~1A. ~~There~~Risk isFactors no assurance that new products or technologies will positively contribute to our results of operations in the future. Our existing subscribers may not find the products that we offer as a result of these investments to be attractive, or they may not succeed in enticing new subscribers. Acquiring or launching new products and technologies may demand a disproportionate amount of management’s attention, and distract them from their focus on our existing offerings. If acquisitions or new product launches, such as AncestryDNA or a health website, are unsuccessful, our brand and reputation, our results of operations, financial condition and key metrics, such as net subscriber additions, may be materially adversely affected. We may not be successful in addressing these risks or any other problems encountered in connection with our investments.

~~The~~A ~~technologies~~wide ~~that~~range weof ~~use~~factors incould ~~our~~materially ~~business~~affect ~~are~~our ~~rapidly changing~~performance. ToThe ~~remain~~following ~~competitive,~~factors weand ~~must~~other ~~continue~~information toincluded ~~provide~~in ~~relevant~~this ~~content~~Annual ~~and enhance~~Report ~~and~~should ~~improve~~be ~~the~~carefully ~~functionality~~considered. ~~and~~Although ~~features~~the ofrisk ~~our~~factors ~~products~~described ~~and~~below ~~services.~~are ~~For~~the ~~example,~~ones wemanagement ~~are~~deems ~~making~~ significant, ~~improvements~~additional torisks ~~our existing website~~ and ~~certain~~uncertainties ~~other~~not ~~changes~~presently known to ~~our~~us ~~core~~or ~~service. Existing subscribers~~ that ~~have~~we ~~become accustomed~~presently todeem ~~the~~less ~~current~~significant ~~experience on our website~~ may ~~not~~also ~~agree~~impair ~~that~~our ~~the~~business ~~planned~~operations. ~~changes~~If ~~are~~any ~~improvements~~of ~~and may prefer~~ the ~~current~~following ~~experience~~events ~~and~~actually ~~as such~~occur, ~~may~~our ~~cancel their subscription. However~~business, iffinancial wecondition ~~fail to improve our services~~ and ~~technologies~~ inresults ~~step with the evolution~~ of ~~technology,~~operations orcould ifbe ~~competitors~~adversely ~~introduce new solutions embodying new technologies, our existing products and services may become obsolete~~affected. ~~Our future success will depend on, among other things, our ability to:~~

•Risks ~~anticipate~~Related ~~demand~~to ~~for~~Our ~~new~~Business ~~products and services;~~

•We ~~enhance~~may have already engaged as subscribers substantially all of the total addressable market for family history services. If our efforts to retain existing ~~solutions,~~and ~~cross-platform~~to ~~compatibility~~attract new subscribers do not succeed, ~~systems~~our ~~capacity~~number ~~and~~of ~~processing~~subscribers ~~speed;~~could decline and our revenues may be materially adversely affected.

•We ~~respond~~generate a large majority of our revenues from subscriptions to ~~technological~~our ~~advances~~services, onand awe ~~cost-effective~~expect that we will continue to depend upon subscription revenues as the primary source of our revenues in the foreseeable future. We must continue to retain existing and ~~timely~~to ~~basis~~attract new subscribers both to grow our business and to replace subscribers who choose to cancel their subscriptions. We seek to do this in part by investing in product platforms, services and technologies, such as AncestryDNA, Newspapers.com, and mobile, and by expanding to new markets and by offering new services, such as AncestryHealth. If consumers do not perceive our services to be reliable, valuable and of high quality, if we fail to sufficiently invest in our product platform, if we fail to regularly introduce new and improved services and more content, if we introduce new services that are not favorably received by the market, if we fail to adequately address public concern regarding privacy and data security, if consumer interest in online family history services declines, or if we find that we have already engaged as subscribers substantially all of the total addressable market for family history services, we may not be able to retain existing or to attract new subscribers and our revenues could be materially adversely affected. Subscribers choose to cancel their subscriptions for many personal reasons, including a desire to reduce discretionary spending, a perception that they do not have sufficient time to use the service or otherwise do not use the service sufficiently or customer service issues are not satisfactorily resolved.

~~Developing~~The ~~or acquiring~~relative service levels, pricing and related features of competitors to our services, and the ~~technologies~~size ~~for~~of the family history market are some additional factors that may adversely impact our ~~products~~ability ~~entails~~to ~~significant~~retain ~~technical~~existing subscribers and ~~business~~to ~~risks~~attract new subscribers. WeSome ~~may~~of ~~use~~our ~~new~~current orcompetitors ~~acquired~~provide ~~technologies~~genealogical ~~ineffectively,~~records free of charge. Some governments or weprivate organizations may ~~fail~~make tohistorical ~~adapt~~records ~~our~~available ~~products~~online at no cost to consumers, and ~~services~~some commercial entities could choose to ~~the~~make ~~demands~~such records available on an advertising-supported basis rather than a subscription basis. In addition to competition from outside services, certain of our services may compete with our core Ancestry websites for subscribers. If weconsumers ~~face material~~are ~~delays~~able into ~~introducing~~satisfy ~~new~~their family history research needs at no or ~~enhanced~~lower ~~solutions~~cost, they may not perceive value in our ~~subscribers~~higher ~~may~~priced ~~forego~~services. ~~the~~Further, ~~use~~our number of ~~our~~subscribers ~~solutions~~may indecrease ~~favor~~as a result of ~~those~~a full penetration of ~~our~~the ~~competitors.~~total addressable market for, or a declining interest in, family history research.

~~Our~~Any ~~operating~~of ~~results~~these ~~fluctuate~~factors ~~from~~could ~~period~~cause toour ~~period~~number ~~and~~of ~~may~~subscribers ~~not~~to ~~immediately~~fall, ~~reflect~~which ~~downturns~~could ormaterially ~~upturns~~adversely inimpact ~~subscriptions~~our business, ~~which~~financial ~~could~~condition ~~make~~and ~~our operating~~ results ~~difficult~~of operations. If we are unable to ~~predict~~effectively retain existing subscribers and ~~affect~~to ~~future~~attract ~~operating~~new subscribers or our number of subscribers declines, our business, financial condition and results. of operations could be materially adversely affected.

Our ~~quarterly~~business ~~and annual operating results are tied to certain financial and operational metrics that have fluctuated in the past and~~ may ~~fluctuate significantly in the future. As a result, you should~~ not ~~rely~~grow ~~upon~~or ~~our~~may ~~past operating results as indicators of future performance. Our operating results depend on numerous factors~~contract, ~~many of~~ which ~~are~~could ~~outside~~negatively ofaffect our ~~control.~~financial ~~For~~condition ~~the reasons set forth in this Risk Factors section or other reasons, the results of any prior quarterly or annual periods should not be relied upon as indicators of our future performance,~~ and ~~our revenues and operating~~ results ~~in the future may differ materially from the expectations~~ of ~~management or investors~~operations.

WeWhile ~~recognize~~we ~~revenues~~have ~~from~~experienced ~~subscribers~~growth ~~ratably~~in ~~over~~the past, our business may not grow or may contract in the ~~term~~future. Additionally, a large portion of ~~their~~our ~~subscriptions~~revenue growth in 2015 was driven by our AncestryDNA service. ~~Since~~The ~~the~~rapid ~~majority~~growth of our ~~subscription~~AncestryDNA ~~durations~~service ~~have historically~~may ~~been~~not ~~greater~~continue ~~than~~and ~~six~~may ~~months~~even decline. As such, ayou ~~large~~should ~~portion~~not rely on the growth of any prior year or other period as an indication of our ~~revenues~~future ~~for~~performance. ~~each~~If ~~quarter~~our ~~has~~business ~~reflected~~does ~~deferred~~not ~~revenues~~grow ~~from~~while ~~subscriptions~~we ~~entered~~continue ~~into~~to ~~during~~devote ~~previous~~substantial ~~quarters.~~resources ~~Consequently,~~and afunds ~~decline~~to inimproving ~~new~~our existing or ~~renewed~~to ~~subscriptions~~developing innew ~~any~~technologies ~~one quarter~~and ~~will~~service ~~not~~offerings, ~~necessarily~~to becontinue ~~fully~~acquiring ~~reflected~~new inand ~~revenues~~relevant incontent ~~that~~and ~~quarter~~also ~~but~~to ~~will~~expanding ~~negatively~~awareness ~~affect~~of our ~~revenues~~brand and category through marketing, our margins in ~~future~~the ~~quarters~~near term may be reduced. ~~Accordingly~~In addition, ~~the~~if ~~effect~~growth of ~~significant~~lower ~~downturns~~margin orservices, ~~upturns~~such inas ~~subscriptions~~our orAncestryDNA ~~market~~service, ~~acceptance~~outpace growth of higher margin services, such as our ~~service~~subscription services, or ~~changes~~key infinancial ~~subscriber~~metrics ~~cancellation~~including adjusted EBITDA may slow or decline. If our growth rates were to decline or become negative, ~~may~~it ~~not~~could ~~fully~~materially ~~impact~~adversely affect our ~~results~~financial ofcondition ~~operations~~and ~~until~~results ~~future~~of ~~periods~~operations.

10 11

Table of Contents

InOur ~~addition,~~business ~~the~~strategy ~~largely~~and ~~long-term~~projections ~~commitments~~rely on a number of ~~our~~assumptions, ~~subscribers~~some ~~historically~~or ~~have~~all ~~enhanced~~of ~~our near-term~~which ~~visibility~~may onbe ~~our~~incorrect. ~~revenues~~For example, ~~which~~it is difficult to predict the acceptance by the market of our services. Also, we believe ~~has~~that ~~enabled~~consumers uswill be willing to ~~more~~pay ~~effectively~~for ~~manage~~subscriptions to our ~~business~~online family history resources, notwithstanding the fact that some of our current and future competitors may provide ~~working~~such ~~capital~~resources ~~benefits~~free of charge. AsWe ~~the~~cannot ~~mix~~accurately ofpredict whether our ~~subscriptions~~services ~~changes~~will ~~from~~achieve ~~longer~~significant toacceptance ~~shorter~~by ~~durations,~~potential ~~our~~users ~~near-term~~in ~~visibility~~larger ~~on our~~numbers ~~revenues~~than ~~decreases.~~at Ifpresent ~~this~~as ~~trend~~we ~~continues,~~may ithave ~~could~~already ~~become~~engaged ~~more~~substantially ~~difficult~~all toof ~~manage~~the total addressable market for family history research. You should, therefore, not rely on our ~~business~~historic ~~and~~growth ~~effectively~~rates ~~budget~~as ~~future~~an ~~working~~indication ~~capital~~of ~~requirements.~~future growth.

WeAn ~~continuously~~increasing ~~attempt~~number toof ~~attract~~our ~~subscribers~~users ~~through~~are ~~marketing~~engaging with our services utilizing mobile devices. If we are unable to provide our ~~marketing~~mobile ~~efforts~~users dowith ~~not~~the ~~attract~~same ~~additional~~important ~~subscribers~~functionality available on aour ~~cost-effective basis,~~websites or ~~if we~~ are unable to ~~manage~~adapt our ~~marketing~~mobile services to technological changes and ~~advertising~~user ~~expenses~~expectations, itwe ~~could~~may ~~materially~~not ~~harm~~remain competitive, and our ~~results~~business ofmay ~~operations~~decline.

~~Our~~An ~~future~~increasing ~~profitability,~~number ~~as well as the maintenance and enhancement~~ of our ~~brands,~~users ~~will~~are ~~depend~~engaging inwith ~~large part on the effectiveness and efficiency of~~ our ~~marketing~~services ~~and~~utilizing ~~advertising~~mobile ~~expenditures, which are significant~~devices. WeDespite ~~use~~our aefforts ~~diverse mix of marketing and advertising programs~~ to ~~promote our products and services~~date, ~~and~~ we ~~periodically~~have ~~adjust~~not ~~our~~been ~~mix~~able ofto ~~these~~meaningfully ~~programs.~~monetize ~~Significant increases~~users ~~in the pricing~~ of ~~one or more of~~ our ~~marketing~~mobile apps and ~~advertising~~mobile ~~channels~~website, ~~could increase our marketing~~ and ~~advertising~~we ~~expense~~may ornot ~~cause~~be usable to ~~choose~~monetize ~~less~~the ~~effective~~engagement ~~marketing and advertising channels. We have experienced price increases in some~~ of our ~~marketing~~mobile ~~and~~users ~~advertising~~in ~~channels~~the future. ~~Television~~Our ~~advertising~~mobile ~~comprises~~web aexperience ~~large~~may ~~percentage~~not ofbe ~~our~~fully ~~marketing~~optimized ~~and~~or ~~advertising expense, which~~ may ~~have~~be ~~significantly~~more ~~higher~~difficult ~~costs~~to use than ~~other channels and which could materially adversely affect~~ our ~~profitability~~website. ~~Further~~Additionally, weour ~~may~~mobile ~~over~~apps ~~time~~do ~~become~~not ~~disproportionately~~contain ~~reliant~~the onfull ~~one~~functionality ~~channel~~of ~~or partner, which could increase~~ our ~~operating~~web ~~expenses.~~experiences ~~Because~~and wemay ~~recognize~~not ~~revenues~~be ~~ratably~~as ~~over~~compelling ~~the~~to ~~subscription~~users. As ~~period,~~new wedevices ~~have incurred~~ and ~~may~~platforms ~~in the~~are ~~future~~released ~~incur marketing~~ and ~~advertising~~mobile ~~expenses~~technology ~~significantly~~changes, ~~in advance of the time~~ we ~~anticipate~~may ~~recognizing~~encounter ~~revenues~~difficulties ~~associated~~in ~~with~~adapting ~~such expenses, and~~ our ~~marketing~~mobile ~~and advertising expenditures may not result in increased revenues~~experience. If ~~we are unable to maintain~~ our ~~marketing~~mobile ~~and~~app ~~advertising channels on cost-effective terms~~ or ~~replace~~mobile ~~existing~~web ~~marketing~~experience ~~and~~is ~~advertising~~slow, ~~channels~~subject ~~with~~to ~~similarly~~intermittent ~~effective channels~~failures, ~~our~~difficult ~~marketing~~to ~~and~~use ~~advertising~~or ~~expenses~~does ~~could~~not ~~increase~~contain ~~substantially,~~the ~~our subscriber~~same ~~levels~~important ~~could~~functionality beavailable ~~affected~~on ~~adversely, and~~ our ~~business~~website, ~~financial~~it ~~condition and results of operations~~ may ~~suffer.~~not Inmeet ~~addition,~~the weuser’s ~~may~~expectations ~~be required to incur significantly higher marketing~~ and ~~advertising~~as ~~expenses~~a ~~than~~result wecould ~~currently~~damage ~~anticipate if~~our ~~excessive~~reputation, ~~numbers~~prevent ofus ~~subscribers~~from ~~cancel~~retaining ~~our~~existing ~~services~~ or ~~for~~acquiring ~~other~~new ~~reasons.~~customers ~~Our~~and ~~expanded marketing efforts~~ may ~~increase our subscriber acquisition cost, as additional expenses may not result in sufficient subscriber growth to offset cost, which would~~ have ana material adverse effect on our business, ~~financial condition~~ and results of operations.

WeServices ~~have~~or ~~purchased~~technologies ~~and~~we ~~intend~~invest ~~to continue to purchase product integration~~ in ~~and~~or ~~television~~develop ~~advertising~~could ~~associated~~be ~~with television shows relevant to family history research~~costly, ~~which~~may ~~have aired in the United States and other countries in past years. Television shows that focus on family history research have caused increased interest in our core business. If we do~~ not ~~receive benefits from family history research related television shows or if such shows do not continue to~~ be well received orby ~~are canceled,~~ the ~~visibility~~market ~~of our core business~~ and ~~our~~may ~~brand~~not ~~may~~ultimately bedrive ~~reduced~~growth ~~and~~in our ~~results of operations, financial condition and key metrics, such as net subscriber additions, may be materially adversely affected~~business.

WeAs ~~face~~part ~~competition~~of ~~from~~our abusiness ~~number~~strategy, we have made and will continue to make significant investments in the development or acquisition of ~~different~~new ~~sources~~services and technologies, ~~some~~such as our planned investment in AncestryHealth in 2016. There is no assurance that new services or technologies will positively contribute to our results of ~~which~~operations in the future. Our existing customers may not be attracted to or may react negatively to the services that we offer ~~free~~as ~~content,~~a result of these investments. These services or businesses may not succeed in enticing new customers or may face regulatory obstacles. Acquiring or launching new services and technologies may demand a disproportionate amount of management’s attention and distract them from their focus on our ~~failure~~existing toofferings. ~~compete~~If ~~effectively~~acquisitions, ~~could~~new ~~materially~~businesses, ~~impact~~ new services, or major service feature releases, are unsuccessful or cause negative reactions with our ~~revenues~~existing customers, our brand and reputation, our results of operations, ~~and~~ financial condition and key metrics, such as net subscriber additions, may be materially adversely affected. We may not be successful in addressing these risks or any other problems encountered in connection with our investments.

WeThe ~~face~~technologies ~~competition~~that we use in our business ~~from~~are arapidly ~~variety~~changing. ofTo ~~organizations~~remain competitive, ~~some~~ ofwe ~~which~~must continue to provide ~~genealogical~~relevant ~~records~~content, ~~free~~invest ofin ~~charge.~~robust ~~Many~~technologies ~~external~~and ~~factors,~~sciences ~~including~~and enhance and improve the ~~cost~~functionality and features of ~~marketing~~our services. For example, ~~content~~we ~~acquisition~~recently ~~and~~made ~~technology~~significant ~~and~~improvements to our ~~current~~core ~~and~~Ancestry ~~future~~websites. ~~competitors’~~Existing ~~pricing~~subscribers ~~and~~that ~~marketing~~have ~~strategies~~become ~~can~~accustomed ~~significantly affect~~to the prior experience on our ~~competitive~~website ~~strategies~~may not agree that the changes are improvements and may prefer the prior experience and as such, ~~including~~may ~~pricing~~cancel their subscription. IfHowever, if we fail to ~~meet~~improve our ~~subscribers’~~services ~~expectations,~~and wetechnologies ~~could~~in ~~fail~~step towith ~~retain~~the ~~existing~~evolution of technology, or ~~attract~~if ~~new~~competitors ~~subscribers,~~introduce ~~either~~new ofsolutions ~~which~~embodying ~~could~~new ~~harm~~technologies, our ~~business~~existing ~~and~~services ~~results~~may ofbecome ~~operations~~obsolete. Our future success will depend on, among other things, our ability to:

~~Our~~• ~~core~~anticipate ~~Ancestry~~demand ~~websites~~for ~~and~~new ~~our other products and~~ services ~~face competition from:~~ ;

• ~~FamilySearch,~~enhance ~~and~~our ~~its~~existing ~~website FamilySearch.org~~solutions, asystems ~~genealogy~~capacity ~~organization that is part of The Church of Jesus Christ of Latter-day Saints. FamilySearch has an extensive collection of paper~~ and ~~microfilm~~processing ~~records.~~speed; ~~FamilySearch has digitized a large quantity of these records~~ and has published them online at FamilySearch.org, where it makes them available to the public for free and through thousands of family history centers located throughout the world. FamilySearch is a well-funded organization and is undertaking a large-scale digitization project to make its collection available online. While we have engaged, and continue to engage, in certain collaborative efforts with FamilySearch to digitize and make historical records available online, FamilySearch has partnered and may in the future partner with other commercial entities to broaden the distribution of its records.

• ~~Commercial~~respond ~~entities, including online genealogical research services, library content distributors, search engines and portals, retailers of books and software related~~ to ~~genealogical~~technological ~~research~~advances ~~and~~on ~~family~~a ~~tree~~cost-effective ~~creation~~ and ~~family~~timely ~~history oriented social networking websites~~basis.

•Developing ~~Non-profit~~or ~~entities~~acquiring ~~and~~the ~~organizations,~~technologies ~~genealogical~~for ~~societies,~~our ~~governments~~services entails significant technical and ~~agencies~~business ~~that~~risks. We may ~~make~~use ~~vital~~new ~~statistics~~or acquired technologies ineffectively, or ~~other~~we ~~records~~may ~~available~~fail to adapt our services to the ~~public~~demands ~~for~~of ~~free~~our customers. If we face material delays in introducing new or ~~that~~enhanced ~~partner~~technology, ~~with~~our ~~commercial~~subscribers ~~entities~~may toforego ~~make~~the ~~their~~use ~~records~~of ~~widely~~our ~~available~~services in favor of those of our competitors.

We expect our competition to grow both through industry consolidation and the emergence of new participants in our existing markets. We will also face competitors in new markets that we enter. For example, we face competition from other companies, such as 23andme, in providing family history DNA services. Our future competitors may include other Internet-based businesses, governments, religious organizations, not-for-profit entities and other entities. The market for Internet-based services evolves at a very rapid pace, and 12

11Table of Contents

~~Table~~Our ofoperating ~~Contents~~results fluctuate from period to period and may not immediately reflect downturns or upturns in certain financial and operational metrics, which could make our operating results difficult to predict and affect future operating results.

~~our~~Our ~~competitors~~quarterly ~~may offer products~~ and ~~services~~annual ~~that~~operating results are ~~superior~~tied to ~~any~~certain offinancial ~~our products~~ and ~~services.~~operational Inmetrics ~~addition,~~that ~~Internet~~have ~~business~~fluctuated ~~models~~in ~~are~~the ~~constantly~~past ~~changing.~~and ~~The~~may ~~online~~fluctuate ~~family~~significantly ~~history market~~in ~~could~~the ~~move~~future. toAs ana ~~advertising-supported~~result, ~~model~~you toshould ~~the~~not ~~detriment~~rely ofupon our ~~subscription-based~~past ~~model.~~operating ~~Our~~results ~~competitors~~as ~~may~~indicators ~~have~~of ~~greater~~future ~~resources,~~performance. ~~more~~Our ~~well-established~~operating ~~brand~~results ~~recognition~~depend oron ~~more~~numerous ~~sophisticated technologies~~factors, ~~such~~many asof ~~search~~which ~~algorithms, than~~are weoutside ~~do.~~of ~~Our~~our ~~competitors~~control. ~~may~~For ~~more~~the ~~easily~~reasons ~~obtain~~set ~~relevant~~forth ~~records~~ in ~~domestic~~this ~~and~~Risk ~~international~~Factors ~~markets~~section or ~~offer~~other ~~new categories of content~~reasons, ~~products~~the orresults ~~services~~of ~~before~~any weprior ~~do,~~quarterly or atannual ~~lower~~periods ~~prices,~~should ~~which~~not ~~may~~be ~~give~~relied ~~them~~upon aas ~~competitive~~indicators ~~advantage~~of ~~in attracting~~our ~~subscribers.~~future Inperformance, ~~addition~~and toour ~~competition~~revenues ~~from~~and ~~outside~~operating ~~sources,~~results ~~certain~~in ofthe ~~our~~future ~~products, such as Archives.com,~~ may ~~compete~~differ ~~with~~materially ~~our~~from ~~core~~the ~~Ancestry~~expectations ~~websites~~of ~~for~~management ~~subscribers.~~or investors.

ToWe ~~compete~~recognize ~~effectively,~~revenues wefrom ~~may~~subscribers ~~need~~ratably toover ~~expend~~the ~~significant~~term ~~resources~~of ontheir ~~content~~subscriptions. ~~acquisition,~~Since ~~technology~~the ormajority ~~marketing~~of ~~and~~our ~~advertising~~subscription durations have historically been greater than six months, ~~which could~~a ~~reduce~~large portion of our ~~margins~~revenues ~~and~~for ~~have~~each aquarter ~~material~~has ~~adverse~~reflected ~~effect~~deferred onrevenues from subscriptions entered into during previous quarters. Sales from our ~~business,~~DNA ~~financial~~testing ~~condition~~services ~~and~~are ~~results~~recognized ofas ~~operations.~~revenues Ifwhen wethe doDNA ~~not~~results ~~compete~~are ~~effectively~~delivered, ~~our~~which ~~ability~~is contingent upon when a customer submits his or her DNA sample to ~~retain~~us. ~~and~~Historically, ~~expand~~most of our ~~subscriber~~customers ~~base~~have returned their DNA samples within six months of the order date. Consequently, ~~and~~a decline in amounts billed to customers in any one quarter will not necessarily be fully reflected in revenues in that quarter but will negatively affect our revenues in future quarters. Accordingly, ~~results~~the effect of ~~operations~~ ~~and~~significant ~~financial~~downturns ~~condition,~~or ~~could~~upturns bein ~~materially~~amounts ~~adversely~~billed ~~affected.~~to ~~See~~customers ~~Item 1~~or market acceptance of our service, ~~“Business~~or –changes ~~Competition.”~~in cancellation rates, may not fully impact our results of operations until future periods.

~~Changes~~We ~~that we~~continuously ~~make~~attempt to ~~the~~attract ~~prices~~customers ~~and~~through ~~the~~marketing. ~~types~~If ofour ~~subscriptions~~marketing ~~that~~efforts wedo ~~offer~~not ~~may~~attract ~~affect~~additional ~~our~~customers ~~subscriber~~on ~~mix~~a ~~and~~cost-effective ~~cancellation rates~~basis, ~~which~~or ~~could~~if ~~have~~we aare ~~significant~~unable ~~negative~~to ~~impact~~manage on our ~~revenues~~marketing and ~~number~~advertising ofexpenses, ~~total~~it ~~subscribers.~~could materially harm our results of operations.

WeOur ~~continually~~future ~~evaluate~~profitability, ~~and~~as ~~test~~well as the ~~types~~maintenance and enhancement of ~~subscriptions~~our ~~that~~brands, wewill ~~offer.~~depend ~~Based~~in large part on the ~~results~~effectiveness ofand ~~any~~efficiency ~~product~~of orour ~~price~~marketing ~~testing~~and ~~conducted~~advertising expenditures, ~~we may~~which ~~change~~are ~~the~~significant. ~~price~~We ~~and~~use ~~subscription~~a ~~packages~~diverse wemix ~~offer~~of marketing and ~~market.~~advertising ~~Our~~programs ~~pricing~~to ~~and~~promote ~~subscription~~our ~~packaging~~services, ~~strategy~~and ~~may~~we ~~influence~~periodically ~~subscribers~~adjust toour ~~choose~~mix aof ~~certain~~these ~~subscription~~programs. orSignificant ~~duration.~~increases Ifin ~~our~~the pricing ~~and~~of ~~subscription~~one ~~packaging~~or ~~strategy~~more ~~fails,~~of ~~we may~~our ~~experience~~marketing ~~higher~~and ~~cancellation~~advertising ~~volumes~~channels ~~and~~could beincrease ~~unable~~our tomarketing ~~attract~~and ~~new~~advertising ~~subscribers,~~expense ~~which~~or ~~may~~cause ~~result~~us into ~~decreased~~choose ~~immediate~~less ~~and~~effective ~~long-term~~marketing ~~revenues~~ and aadvertising ~~loss~~channels. inWe ~~the~~have ~~number~~experienced ofprice ~~total~~increases ~~subscribers.~~in Insome ~~the~~of ~~future,~~our wemarketing ~~may~~and ~~continue~~advertising tochannels. ~~perform~~Television ~~product~~advertising ~~and price~~comprises ~~tests~~a ~~involving~~large percentage of our ~~users~~marketing and toadvertising ~~make~~expense, ~~changes~~which tomay ~~our~~have ~~products~~significantly ~~and~~higher ~~prices,~~costs ~~the~~than ~~results~~other ofchannels and which could materially adversely affect our ~~number~~profitability. orFurther, ~~mix~~we ~~of subscribers and~~ may ~~have~~over atime ~~material~~become ~~adverse~~disproportionately ~~impact~~reliant on ~~our~~one ~~results~~channel ofor ~~operations and key operating metrics~~partner, ~~including~~ ~~the~~which ~~number~~could ofincrease ~~total~~our ~~subscribers~~operating expenses.

If we are unable to maintain our marketing and advertising channels on cost-effective terms or replace existing marketing and advertising channels with similarly effective channels, our marketing and advertising expenses could increase substantially, our revenues could be affected adversely, and our business, financial condition and results of operations may suffer. In addition, we may be required to incur significantly higher marketing and advertising expenses than we currently anticipate if ~~regulators~~we orare ~~third~~unable to acquire customers through cost-~~party~~effective ~~businesses~~channels ~~imposed~~or ~~new~~for ~~requirements~~other ~~regarding charging~~reasons. Our expanded marketing efforts may increase our ~~subscribers~~customer ~~recurring~~acquisition ~~subscription~~cost, ~~fees~~as additional expenses may not result in sufficient growth in customers to offset cost, ~~such~~which ~~new~~would ~~regulations~~have ~~could~~an ~~materially~~adverse ~~adversely~~effect ~~affect~~on our ~~revenues~~business, financial condition and results of operations.

~~Challenges~~We have purchased and intend to continue to purchase product integration in ~~acquiring~~and ~~historical~~television ~~content~~advertising associated with television shows relevant to family history research, which have aired in the United States and ~~making~~other itcountries ~~available~~in ~~online~~past ~~could~~years. ~~materially~~Television ~~adversely~~shows ~~affect~~that focus on family history research have caused increased interest in our ~~ability~~core business. If we do not receive benefits from family history research related television shows or if such shows do not continue to ~~retain~~be ~~and~~well ~~expand~~received ~~our subscriber~~or ~~base~~are canceled, the visibility of our core business and ~~therefore~~our ~~could~~brand ~~materially~~may ~~affect~~be reduced and our ~~business~~results of operations, financial condition and ~~results~~key ofmetrics, ~~operations.~~such as net subscriber additions, may be materially adversely affected.

InWe ~~order~~face ~~to retain~~competition ~~and~~from ~~expand~~a ~~our~~number ~~subscriber~~of ~~base,~~different ~~both domestically and internationally~~sources, wesome ~~must~~of ~~continue~~which tooffer ~~expend~~products ~~significant~~or ~~resources~~services toat ~~acquire~~lower ~~significant~~prices ~~amounts~~than ofwe ~~additional historical content~~do, ~~digitize it~~ and ~~make~~our itfailure ~~available~~ to ~~our~~compete ~~subscribers online.~~effectively Wecould ~~face~~materially ~~legal,~~impact ~~logistical,~~our ~~cultural and commercial challenges in acquiring new content. Relevant governmental records may be widely dispersed and held at a national~~revenues, ~~state~~results orof ~~local~~operations ~~level. Religious~~ and ~~private~~financial ~~records are even more widely dispersed~~condition.

~~These~~We ~~problems~~face ~~often pose particular challenges in acquiring content internationally. Desirable content may not be available to us on favorable terms, or at all, due to~~ competition ~~for a particular collection, privacy concerns relative to information contained~~ in ~~a given collection or~~ our ~~lack~~business offrom ~~negotiating leverage with~~ a ~~certain~~variety ~~content~~of ~~provider. For example~~organizations, some of ~~our~~ ~~most~~which ~~popular~~provide ~~databases~~products ~~include~~or ~~“vital~~services ~~records”~~at ~~content—namely,~~lower ~~historical~~prices ~~birth,~~than ~~marriage~~we ~~and~~do, ~~death~~including ~~records—made~~for ~~available by certain governmental agencies~~free. ToMany ~~help~~external ~~prevent identity theft~~factors, orincluding ~~other malicious activities, governments may attempt to restrict~~ the ~~release~~cost of ~~or increase the difficulty of accessing all or substantial portions of their vital records content~~marketing, ~~and~~third-party ~~particularly birth records~~services, tocontent ~~third parties. If these efforts are successful~~acquisition, ~~it may limit~~technology, ~~increase~~ ~~the~~regulatory ~~cost~~requirements ofand orapproval ~~altogether~~and ~~prevent~~our uscurrent ~~from~~and ~~acquiring~~future ~~these~~competitors’ ~~types~~pricing ofand ~~vital~~marketing ~~record~~strategies ~~content~~can orsignificantly ~~continuing~~affect toour ~~make~~competitive ~~them~~strategies, ~~available~~including ~~online~~pricing. InIf ~~some cases,~~ we ~~have~~fail ~~had~~ to ~~lobby~~meet ~~for~~our ~~legislation~~customers' toexpectations, bewe ~~changed~~could orfail ~~otherwise work~~ to ~~surmount administrative~~retain existing or ~~other~~attract ~~bureaucratic~~new ~~hurdles~~customers toeither ~~enable~~of ~~government~~which orcould ~~other~~harm ~~bodies~~our tobusiness ~~grant~~and usresults ~~access~~of ~~to records~~operations.

While we own or license most of the images in our database, we generally do not own the underlying historical documents. If owners of content have sold or licensed the rights to digitize that content, even on a non-exclusive basis, they may elect not to sell or license it for digitization purposes to any other person. Therefore, if one of our competitors acquires rights to digitize a set of content, even on a non-exclusive basis, we may be unable to acquire rights to digitize that content. Conversely, the owners of historical records may allow more than one party to digitize those records and our competitors may digitize and make available the same content that we offer. In some cases, acquisition of content involves competitive bidding, and we may choose not to bid or may not successfully bid to acquire content rights. In addition, a number of governmental bodies and other organizations are interested in making historical content available for free and owners of historical records may license or sell their records to such governmental bodies and organizations in addition to or instead of licensing or selling their content to us. Our inability to offer certain vital records or other valuable content as part of our family history research databases or the widespread availability of such content elsewhere at lower cost or for free could result in our subscription services becoming less valuable to consumers, which could have a material adverse impact on our number of subscribers, and therefore on our business, financial condition and results of operations. 13

12Table of Contents

~~Table~~Our ofcore ~~Contents~~Ancestry websites and our other services face competition from:

We• ~~depend~~FamilySearch, inand its website FamilySearch.org, a genealogy organization that is part ~~upon~~of ~~third-party~~The ~~licenses~~Church ~~for~~of ~~some~~Jesus Christ of ~~our~~Latter-day ~~historical~~Saints. ~~content,~~FamilySearch has an extensive collection of paper and microfilm records. FamilySearch has digitized a ~~loss~~large quantity of these ~~licenses,~~ orrecords ~~disputes~~and ~~regarding~~has ~~royalties~~published ~~under~~them ~~these~~online ~~licenses~~at FamilySearch.org, ~~could~~where ~~adversely~~it ~~affect~~makes ~~our~~them ~~ability~~available to ~~retain~~the public for free and ~~expand~~through ~~our~~thousands ~~subscriber~~of ~~base~~family history centers located throughout the world. FamilySearch is a well-funded organization and is undertaking a large-scale digitization project to make its collection available online. While we have engaged, and ~~therefore~~continue ~~could~~to ~~materially~~engage, ~~affect~~in ~~our~~certain ~~revenues~~collaborative efforts with FamilySearch to digitize and make historical records available online, ~~financial~~FamilySearch ~~condition~~has partnered and ~~results~~may in the future partner with other commercial entities to broaden the distribution of ~~operations~~its records.

We• ~~acquire~~Commercial aentities, ~~portion~~including ofonline ~~our~~genealogical ~~content~~research ~~pursuant to ongoing license agreements. Some of these agreements have finite terms~~services, ~~and~~genetic wetesting ~~may not be able to renew the agreements on terms that are advantageous to us or at all. For example~~services, welibrary ~~license a significant amount of our United Kingdom~~ content ~~from The National Archives of the United Kingdom under several license agreements that generally have ten-year terms~~distributors, ~~with~~search ~~varying~~engines ~~automatic extension periods. The agreements are generally terminable by either party for breach by the other party~~ and byportals, ~~The~~retailers ~~National Archives~~ of ~~the~~books ~~United~~and ~~Kingdom~~software ~~upon~~related ~~our~~to ~~insolvency~~genealogical orresearch ~~bankruptcy.~~and ~~Some of~~family ~~these~~tree ~~agreements~~creation ~~also~~and ~~contain~~family ~~change~~history inoriented ~~control~~social ~~provisions~~networking ~~that may permit The National Archives of the United Kingdom to terminate these licenses~~websites.

If• aNon-profit ~~current~~entities orand ~~future~~organizations, ~~license~~genealogical ~~for~~societies, agovernments ~~significant~~and ~~content~~agencies ~~collection~~that ~~were to be terminated, we~~ may ~~not~~make bevital ~~able~~statistics ~~to obtain a new license on terms advantageous to us~~ or atother ~~all,~~records ~~and~~available ~~we could be required~~ to ~~remove~~ the ~~relevant~~public ~~content~~for ~~from~~free ~~our websites, either immediately~~ or ~~after some period of time. If a content provider were to license or sell us content in violation of~~ that ~~content provider’s~~partner ~~agreements~~ with ~~other~~commercial ~~parties~~entities ~~or if we misused any of the licensed content, we could be required~~ to ~~remove~~make ~~that~~their ~~content~~records ~~from~~widely ~~our websites and potentially face liability~~available. If we were required to remove a material amount of content from our websites, as a result of the termination of one or more licenses or otherwise, it could adversely affect our business and results of operations. Some of these license agreements restrict the manner in which we use the applicable content, which could limit our ability to leverage that content for new uses as we expand our business.

~~Digitizing~~We ~~and~~expect ~~indexing~~our ~~new~~competition ~~content~~to ~~can~~grow ~~take~~primarily athrough ~~significant amount~~the emergence of ~~time~~new ~~and~~participants ~~expense~~in our existing markets. We will also face competitors, and ~~can~~potentially ~~expose~~greater uscompetition, toin ~~risks~~new ~~associated~~markets ~~with~~that ~~the~~we ~~loss~~have entered or ~~damage~~will ofenter ~~historical~~into ~~documents~~in the future, such as the competition we face in our AncestryDNA and AncestryHealth businesses. Our ~~inability~~current toand ~~maintain~~future competitors may include other Internet-based businesses, genetic companies or ~~acquire~~health service providers, governments, religious organizations, not-for-profit entities and other entities. The markets for high technology services, health information and genetic services evolve at a very rapid pace, and our competitors may offer content, products and services that are superior to any of our content, products and services or ~~make~~may release new content, ~~available~~products and services sooner than we can. In addition, Internet business models are constantly changing. The online infamily ahistory ~~timely~~market ~~and~~could ~~cost~~move to an advertising-~~effective~~supported ~~manner,~~model orto ~~liability for~~the ~~loss~~detriment of ~~historical~~our ~~documents~~subscription-based model, or the consumer genetic testing market could ~~have~~move to a ~~material~~research-supported ~~adverse~~model. ~~effect~~Our oncompetitors ~~our~~may ~~business~~have greater resources, ~~financial~~more ~~condition~~well-established brand recognition or more sophisticated technologies, such as search algorithms or DNA or health technologies, than we do. Our competitors may more easily provide products and ~~results~~services in domestic and international markets or offer new categories of ~~operations~~services before we do, or at lower prices, which may give them a competitive advantage in attracting customers. In addition to competition from outside sources, certain of our services may compete with our core Ancestry websites for subscribers.

~~Digitizing~~To ~~and~~compete ~~indexing~~effectively, ~~new~~we ~~historical~~may ~~content~~need ~~can~~to ~~take~~expend a significant ~~amount~~resources ofon ~~time~~content ~~and expense~~acquisition, ~~and~~technology weor ~~generally~~marketing ~~incur~~and ~~the~~advertising, ~~expenses~~or ~~related to~~lower ~~such content significantly in advance of~~ the ~~time~~prices we ~~can~~charge ~~make it available~~ to ~~our subscribers. We have made significant investments to acquire~~customers, ~~digitize~~which ~~and~~could ~~index~~reduce ~~content,~~our ~~including~~margins ~~content acquired through business acquisitions,~~ and wehave ~~expect~~a ~~to continue~~material toadverse ~~spend~~effect ~~significant resources~~ on ~~content.~~our ~~Increases~~business, infinancial ~~the~~condition ~~cost or time required to digitize~~ and ~~index new content could harm our financial~~ results. ~~We do not have long-term contracts with any~~ of ~~our transcription vendors~~operations. If we ~~were~~do ~~to transition~~not ~~away~~compete ~~from one of our larger transcription vendors for any reason~~effectively, ~~we may be required to provide extensive training to the other vendors, which could delay~~ our ability to ~~make~~retain ~~our~~and ~~new~~expand ~~content available to~~ our ~~subscribers,~~customer base and our ~~relationships~~ ~~with~~revenues, ~~the~~results ~~other~~of ~~transcription~~operations ~~vendors may be on financial or other terms less favorable to us than our existing arrangements. Our inability to maintain or acquire content or to make new content available online in a timely~~ and ~~cost-effective~~ ~~manner would have a material adverse effect on our business,~~ financial condition ~~and~~could ~~results~~be ofmaterially ~~operations.~~adversely affected.

~~While~~Changes wethat ~~are digitizing content,~~ we ~~may~~make beto inthe ~~possession~~prices ~~of valuable~~ and ~~irreplaceable~~the ~~original~~types ~~historical~~of ~~documents.~~subscriptions ~~While~~that we ~~maintain~~offer ~~insurance~~may ~~with~~affect ~~respect~~our tosubscriber ~~such~~mix ~~documents,~~and ~~any~~cancellation ~~loss or damage to such documents~~rates, ~~while~~which ~~in our possession,~~ could ~~cause us significant expense and could~~ have a ~~material~~significant ~~adverse~~negative ~~effect~~impact on our ~~reputation~~revenues and ~~the~~number ~~potential willingness~~ of ~~content~~total ~~owners to license or lend their content to us~~subscribers.

~~Our~~We ~~failure~~continually toevaluate ~~attract~~and test the types of subscriptions that we offer. Based on the results of any product or price testing conducted, ~~integrate~~we may change the price and ~~retain~~subscription ~~highly~~packages ~~qualified~~we ~~key~~offer ~~personnel~~and ~~could~~market. ~~harm~~Our pricing and subscription packaging strategy may influence subscribers to choose a certain subscription or duration. If our ~~business,~~pricing and ifsubscription packaging strategy fails, we ~~are~~may experience higher cancellation volumes and be unable to ~~integrate~~attract ~~appropriate personnel~~new subscribers, which may result in decreased immediate and long-term revenues and a loss in the number of total subscribers. In the future, we may ~~not~~continue beto ~~able~~perform product and price tests involving our users and to ~~successfully~~make ~~implement~~changes to our ~~business~~products ~~plan.~~and prices, the results of which could affect our number or mix of subscribers and may have a material adverse impact on our results of operations and key operating metrics, including the number of total subscribers.

To execute our business plan, we must attract and retain highly-qualified personnel. Competition for these employees is intense, particularly for skilled engineers, and we may not be successful in attracting and retaining qualified personnel. We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have. In addition, inif ~~making~~regulators ~~employment~~or ~~decisions, particularly in the Internet and high~~third-~~technology~~party ~~industries,~~businesses ~~job~~imposed ~~candidates~~new ~~often~~requirements ~~consider~~regarding ~~the~~charging ~~value~~our ofsubscribers ~~the~~recurring ~~stock-based~~subscription ~~awards~~fees ~~they may receive in connection with their employment~~ and ~~may~~how ~~be concerned about the value and liquidity of the stock-based awards~~ we ~~offer.~~market ~~When adding staff, we may not make optimal hiring decisions or may not integrate personnel effectively. Additions~~ to ~~personnel may increase~~ our ~~cost base~~customers, ~~which~~such ~~could make it more difficult to decrease expenses in the short term. If we fail to attract and effectively integrate~~ new ~~personnel,~~regulations or ~~fail~~requirements tocould ~~retain~~materially ~~and~~adversely ~~motivate~~affect our ~~current personnel~~revenues, ~~our~~financial ~~business~~condition and ~~future~~results ~~prospects~~of ~~could be materially adversely affected~~operations.

We depend on the continued service and performance of our key personnel, including Timothy Sullivan, our President and Chief Executive Officer. We do not maintain key man insurance on any of our officers or key employees. We also do not have long-term employment agreements with our officers or key employees. In addition, much of our key technology and systems are custom-made for our business by our personnel. The loss of key personnel, including key members of our management team, as well as certain of our key marketing, product development or technology personnel could disrupt our operations and have an adverse effect on our ability to operate our business. 14

13Table of Contents

~~Table~~Our possession and use of ~~Contents~~personal information presents risks that could harm our business. Unauthorized disclosure or use of such data, whether through breach of our network security or otherwise, could expose us to significant liability and damage our reputation.

WeMaintaining ~~currently~~the ~~outsource~~security ~~some~~ of our information technology and network systems infrastructure, including the cloud computing services that we use, is of critical importance because we handle confidential customer, ~~service~~user, ~~product~~employee ~~development~~and ~~activities~~other sensitive data, such as names, addresses, credit card numbers and ~~DNA~~genetic ~~testing services~~and other personal information. In addition, our online systems include the content that our users upload onto our websites, such as family records and photos. This content is often personally meaningful, and our users may rely on our online system to ~~third~~store ~~parties~~digital copies of such content. If we were to lose such content, ~~which~~if ~~exposes~~our ususers’ private content were to ~~significant~~become ~~risks~~publicly available, if ~~these~~third parties ~~fail~~were able to ~~perform~~gain ~~under~~unauthorized access to such content or if we were to disclose data about our ~~agreements~~members ~~with~~in a manner that was objectionable to them, we may face liability and harm to our brand and reputation.

~~Because~~We weand ~~currently~~our ~~outsource~~vendors ~~some~~use ofcommercially ~~our~~available ~~customer~~encryption ~~service,~~technology ~~product~~to ~~development~~transmit ~~activities~~personal ~~and~~information ~~DNA~~when ~~testing~~taking ~~services~~orders. toWe ~~third~~use ~~parties,~~security weand ~~have less~~business ~~control~~controls ~~over~~to ~~the~~limit ~~work~~access ~~produced~~and byuse ~~these~~of ~~providers~~personal ~~than~~information, ~~over~~including our ~~own~~users’ ~~employees~~uploaded content. IfHowever, ~~customer~~third ~~service~~parties ormay ~~DNA~~be ~~testing~~able ~~personnel~~to ~~fail~~circumvent tothese ~~perform~~security inand ~~accordance~~business ~~with~~measures, ~~the~~including ~~terms~~by ofdeveloping ~~our~~and ~~agreements~~deploying viruses, weworms ~~may~~and ~~fail~~other tomalicious ~~meet~~software ~~customer~~programs ~~expectations.~~that ~~If third-party~~are ~~developers~~designed ~~fail~~ to ~~adequately~~attack ~~protect~~ or ~~transfer~~attempt ~~our~~to ~~intellectual~~infiltrate ~~property~~our ~~rights~~systems inand ~~our~~networks. ~~products~~In addition, ~~our~~employee ~~intellectual~~error, ~~property~~vendor ~~portfolio~~error, ~~could~~malfeasance beor ~~damaged.~~other ~~These~~errors ~~outcomes~~in ~~could~~the ~~result~~storage, inuse ~~negative~~or ~~publicity,~~transmission ~~damage~~of ~~our~~personal ~~reputation~~information ~~and~~could ~~brands and~~result ~~have~~in adata ~~material~~loss, ~~adverse~~theft ~~effect~~of onsubscriber ~~our~~information ~~business~~or ~~and~~a ~~results~~breach of ~~operations~~user or employee privacy.

WeThere ~~use~~can abe ~~single-source~~no ~~laboratory~~assurances ~~for~~that we will be able to continue to operate our ~~DNA~~facilities ~~testing~~and customer service and sales operations in accordance with industry practices, such as Payment Card Industry Data Security Standards. Even if we remain compliant with those standards, we may not be able to prevent security breaches involving customer data. If we experience a ~~single-source~~ ~~manufacturing~~security ~~facility~~breach ~~for~~or ~~producing~~other lapse in the handling of confidential information, the incident could give rise to risks including data loss, litigation and liability, and could harm our ~~DNA~~reputation ~~kits~~or disrupt our operations, any of which could materially ~~harm~~adversely affect our business. byIn ~~adversely~~addition, ~~affecting~~various states and countries have differing laws regarding protection of customer privacy and confidential information, including notification requirements in the ~~availability~~event of certain breaches or losses of information. Privacy laws continue to become more far-reaching, ~~quality~~particularly in Europe, and ~~cost~~consumer privacy has also become an area of enhanced focus in the United States. The impact of expanded laws and regulatory action is still uncertain, and we may be required to adapt quickly to changes in the regulatory landscape. Efforts to comply with these laws and regulations increase our ~~DNA~~costs ~~services~~of doing business, and failure to achieve compliance could result in substantial liability to our business and harm our reputation. In the event of a security breach or loss of confidential information, we could be subject to fines, penalties, damages and other remedies under applicable laws, any of which could have a material adverse impact on our reputation, business, operating results and financial condition.

WeIf third parties improperly obtain and use athe ~~single-source~~personal ~~laboratory~~information ~~for~~of our ~~DNA~~users ~~testing~~or ~~and~~employees, awe ~~single-source~~may ~~manufacturing~~be ~~facility~~required ~~for~~to ~~producing~~expend ~~our~~significant ~~DNA~~resources ~~kits.~~in Ifefforts ~~testing~~to ~~or production~~address isthese ~~delayed~~problems. orA ~~curtailed~~major bybreach ~~such~~of ~~sources~~our network security and systems, including the cloud computing services that we ~~may~~use, ~~not~~could behave ~~able~~serious tonegative ~~meet~~consequences for our ~~customers’~~businesses, ~~expectations~~including ~~with~~possible ~~respect~~fines, topenalties ~~timing~~and damages, ~~quality~~reduced ~~and~~demand ~~price.~~for ~~Even~~our ifservices, wean ~~were~~unwillingness ~~able~~of customers to ~~locate~~provide ~~alternative~~us ~~laboratories~~with their credit card or ~~manufacturing~~payment ~~facilities~~information, ~~qualification~~ an unwillingness of anusers ~~alternative~~to ~~supplier~~upload family records or photos onto our websites, ~~obtaining~~an ~~the~~unwillingness ~~appropriate~~for ~~technology~~customers ~~and~~to ~~establishment~~allow ofus ~~reliable~~to ~~services~~analyze ~~could~~their ~~result~~DNA inor ~~delays~~health information, harm to our reputation and abrand ~~possible~~and loss of ~~sales,~~our ~~which~~ability ~~could~~to ~~materially~~accept ~~harm~~and ~~our~~process ~~operating~~customer ~~results. We~~credit ~~may~~card ~~also~~orders. beSimilarly, ~~unable to~~if ~~locate~~a anwell-publicized ~~alternative~~breach ~~supplier~~of ~~that~~data ~~can~~security ~~provide~~at ~~the~~any ~~necessary~~other ~~services~~major ~~and~~consumer ~~technology~~website atwere ~~comparable~~to ~~prices~~occur, ~~which~~there could ~~result~~be ina angeneral ~~increase~~public loss of confidence in the ~~cost~~use of the Internet for commercial transactions. Any of these events could have material adverse effects on our ~~DNA~~business, ~~services~~financial condition and results of operations. In addition, we may have inadequate insurance coverage to compensate for any related losses.

Reliance on single-source suppliers subjects us to a risk of delays, as well as a risk of increased cost and/or reduced quality of our DNA services. In addition, faulty analyses from our DNA testing provider could harm our reputation and may adversely affect our future DNA revenues and the success of our DNA testing services. 15

~~Cyber-attacks,~~Table continued service outages or significant disruptions in service on our websites or in our computer systems, which are currently hosted primarily by a single third party, could damage our reputation and result in a loss of ~~subscribers, which would harm our business and operating results.~~ Contents

~~Our~~Privacy ~~brand,~~concerns ~~reputation~~could ~~and~~require ~~ability~~us to ~~attract,~~incur ~~retain~~significant ~~and~~expense ~~serve our subscribers depend upon the reliable performance of our websites, network infrastructure, content delivery processes~~ and ~~payment~~modify ~~systems. We have experienced interruptions in these systems in the past, including server failures and electronic attacks that temporarily slowed down~~ our ~~websites’~~operations ~~performance and users’ access to content,~~ or ~~made our websites inaccessible, and we may experience network security breaches or other interruptions in the~~ future. Weplans ~~have experienced “distributed-denial-of-service” and other attacks~~ in ~~the~~a ~~past~~manner that ~~have~~ ~~caused~~could ~~our systems to respond slowly or be inaccessible. Our efforts to fix these disruptions may redirect resources from product development or other business initiatives and may not~~ result in ~~lasting~~restrictions ~~benefits. Rapid advances in technology may prevent us from anticipating all potential security threats or promptly identifying all security breaches,~~ and ~~the~~prohibitions ~~limits~~on ~~and~~our ~~costs~~use of ~~technology,~~certain ~~skills and manpower could prevent us from adequately addressing these threats. Interruptions in these systems~~information, ~~whether due to system failures, computer viruses, worms, malicious software programs or physical or electronic attacks or break-ins, could affect the security or availability of our websites~~ and ~~prevent~~therefore ~~our subscribers from accessing our data and using our products and services. Problems with the reliability or security of our systems may cause shutdowns or service disruptions,~~ harm our ~~reputation~~business, ~~result~~regardless ~~in regulatory penalties or litigation, impair our ability to attract new subscribers and cause subscribers to cancel, and the cost~~ of ~~remedying~~whether ~~these problems and improving cyber defense systems could negatively affect~~ our ~~business,~~activities ~~financial~~violate ~~condition~~any ~~and~~law ~~results~~or ~~of operations~~regulation.

~~Substantially~~As ~~all~~part of our ~~communications~~business, ~~network~~we ~~and~~make ~~computer~~biographical ~~hardware~~and ~~used~~historical todata ~~operate~~available through our websites, ~~are~~we ~~co-located~~use inusers’ apersonal ~~third-party~~data ~~facility in~~for ~~Salt~~internal ~~Lake~~purposes ~~City,~~and ~~Utah.~~we Wehost dowebsites ~~not~~and ~~own~~message orboards, ~~control~~among ~~the~~other ~~operation~~things, ofthat ~~this~~contain ~~facility.~~content Wesupplied ~~also~~by ~~store~~third ~~certain~~parties. ~~data~~In inaddition, awe ~~third-party~~collect ~~facility~~biological information in ~~Ireland.~~the Weform ~~also~~of ~~use~~DNA ~~third-party~~samples ~~off-site~~in ~~backup~~connection ~~services,~~with ~~and~~our weAncestryDNA ~~have~~service ~~disaster~~and ~~recovery~~other ~~plans~~health information in ~~place~~connection with our Ancestryhealth service. ~~Our disaster~~The ~~recovery~~foregoing ~~plans~~data and information are ~~not~~also ~~fully~~used ~~redundant~~for toresearch ~~our~~purposes. ~~facility~~For inprivacy ~~Utah.~~or ~~Our~~security ~~systems~~reasons, privacy groups, governmental agencies and ~~operations~~individuals ~~are~~may ~~vulnerable~~seek to ~~damage~~restrict or ~~interruption~~prevent ~~from~~our ~~fire~~use, ~~flood~~sale, ~~power~~license ~~loss,~~or ~~telecommunications~~publication ~~failure,~~of ~~terrorist~~certain ~~attacks,~~biological ~~acts~~or ofhistorical ~~war,~~information ~~electronic~~pertaining ~~and physical~~to ~~break-ins~~individuals, ~~computer~~particularly ~~viruses,~~living ~~earthquakes~~persons. ~~and~~Even ~~similar~~if ~~events.~~our ~~The~~use ~~occurrence~~ of information does not violate any oflaw ~~the~~or ~~foregoing~~regulation, ~~events~~privacy atgroups ~~one~~may orseek ~~more~~to ~~facilities~~harm ~~could~~our ~~result~~reputation inand ~~reduced~~customer ~~functionality~~relationships orby ~~interruption~~questioning our use of ~~our~~personal ~~websites,~~data. ~~damage~~Because toall of our ~~systems~~genetic ~~and~~testing ~~hardware or~~of ~~could~~DNA ~~cause~~samples ~~them~~is outsourced to ~~fail~~third-party ~~completely~~service providers, we have less control over privacy and ~~our~~security ~~insurance~~measures. ~~may~~If ~~not~~our ~~cover~~third-party ~~such~~DNA ~~events~~testing or ~~may~~research beproviders ~~insufficient~~fail to ~~compensate~~comply uswith ~~for~~privacy ~~losses~~and ~~that~~security ~~may~~standards, ~~occur.~~as Arequired ~~network~~pursuant orto ~~communications~~the ~~failure~~terms ~~or interruption~~ of our ~~system~~agreements with such providers, this could ~~also~~have ~~result~~a inmaterial ~~our customers~~adverse ~~losing~~effect ~~access~~on toour orbusiness, ~~experiencing~~financial ~~reduced~~condition ~~functionality~~and results of ~~our websites~~operations.

InWe ~~addition,~~also face additional privacy issues as we ~~utilize~~expand ~~third-party~~into ~~Internet-based~~other ~~or “cloud”~~international ~~computing~~markets, ~~services~~as inmany ~~connection~~nations ~~with~~have ~~our~~privacy ~~business~~protection ~~operations,~~laws ~~including~~more ~~with~~stringent ~~our~~than ~~DNA~~those ~~testing~~in ~~services~~the United States, ~~our~~particularly ~~credit~~in ~~card~~Europe ~~processing~~where ~~and~~privacy ~~our~~laws ~~disaster~~continue ~~recovery~~to ~~systems~~become more expansive. ~~Cloud~~For ~~computing~~example, ~~services~~in ~~are~~October ~~vulnerable~~2015, tothe Court of Justice for the ~~same~~European ~~disruptions, attacks~~Union and ~~break-ins~~the asArticle ~~our~~29 ~~co-located~~Working ~~systems~~Group ~~and~~recently ~~facilities,~~declared ~~but~~the weU.S. ~~may~~Safe ~~have~~Harbor ~~reduced~~Agreement ~~visibility~~under of the ~~potential~~Data ~~vulnerabilities~~Protective ofDirective ~~cloud~~from ~~computing~~the ~~services.~~European ~~Disruptions~~Union ofas ~~the~~invalid. ~~cloud~~The ~~computing~~European ~~services~~Commission weand ~~use~~the ~~may~~United ~~result~~States inrecently ~~customers~~announced ~~losing~~an ~~access or~~agreement inon ~~reduced~~a ~~functionality~~new offramework ~~our~~for ~~websites.~~transferring ~~Problems~~personal ~~faced~~data byfrom ~~our~~the ~~third-party~~European ~~web~~Union ~~hosting~~to ~~provider,~~the ~~with~~United ~~telecommunications~~States, ~~network~~but ~~providers~~the orlanguage ~~with~~of the ~~systems~~“EU-US byPrivacy ~~which~~Shield” ~~these~~has ~~providers~~not ~~allocate~~been ~~capacity~~publicly ~~among~~disclosed ~~their~~and ~~customers,~~thus ~~including~~uncertainty ~~us,~~remains ~~could adversely~~around ~~affect~~such ~~the~~transfers. ~~experience~~The protection of ~~our~~consumer ~~subscribers.~~privacy ~~Our~~has ~~third-party~~also ~~web~~increasingly ~~hosting~~become ~~providers,~~a ~~including~~focus ~~our~~of ~~co-located~~U.S. ~~facilities~~regulators, and the ~~cloud~~impact ~~computing~~of ~~services~~recent ~~that~~and wepotential ~~use,~~future ~~could~~enhanced ~~decide~~privacy toprotections ~~stop~~in ~~providing~~the ~~services~~United toStates usis ~~without adequate notice~~uncertain. ~~In addition,~~For ~~any financial difficulties~~example, ~~such~~we asrecently ~~bankruptcy~~received ~~reorganization,~~an ~~faced~~initial byinquiry ~~our~~from ~~third-party~~the ~~web~~Office ~~hosting~~of ~~providers~~the orAttorney ~~any~~General ~~other~~of ~~service~~the ~~providers~~State ~~may~~of ~~have~~New ~~negative~~York ~~effects~~requesting oninformation ~~our~~regarding ~~business,~~AncestryDNA's ~~the~~privacy ~~nature~~policies and ~~extent~~procedures. ofWe ~~which~~have ~~are~~incurred, ~~difficult~~and will continue to ~~predict.~~ ~~Additionally~~incur, ifexpenses ~~our~~to ~~third-party~~comply ~~web~~with ~~hosting~~privacy ~~providers~~and ~~are~~security ~~unable~~standards toand ~~keep~~protocols upimposed ~~with~~by ~~our~~law, ~~growing~~regulation, ~~needs~~industry ~~for~~standards ~~capacity,~~or ~~this~~contractual ~~could~~obligations. ~~have~~Increased adomestic ~~material~~or ~~adverse~~international ~~effect~~regulation onof ~~our~~data ~~business.~~utilization ~~Any~~and ~~errors~~distribution practices, ~~defects~~including self-regulation, ~~disruptions~~could orrequire ~~other~~us ~~performance~~to ~~problems~~modify ~~with~~ our ~~services~~operations ~~could~~and ~~harm~~incur ~~our~~significant ~~reputation~~expense, ~~and~~which could have a material adverse effect on our business, financial condition and results of operations. If our users’ private content were to become publicly available or, if third parties were able to gain unauthorized access to such content, in particular the DNA testing information, we may face liability and harm to our brand and reputation.

14If our reputation or brand were to be harmed, we could lose customers or fail to increase our number of customers, which could have a material adverse effect on our revenues, results of operations and financial condition.

~~Table~~We believe that maintaining and enhancing our Ancestry brand and other brands is critical to our success. We plan to continue to promote our brands, both domestically and internationally, but there is no guarantee that our selected strategies will maintain or increase the favorable recognition of ~~Contents~~our brands. Some of our existing and potential competitors, including search engines, media companies and government and religious institutions have well-established brands with greater brand recognition than we have.

WeAdditionally, ~~face~~from ~~many~~time ~~risks~~to ~~associated~~time, our customers express dissatisfaction with our ~~plans~~service, toincluding, ~~continue~~among toother ~~expand~~things, dissatisfaction with our ~~international~~auto-renewal ~~offerings~~and other billing policies, our handling of personal data, even if such handling is compliant with all existing laws and ~~marketing~~ regulations, and ~~advertising~~the way our services operate. To the extent that dissatisfaction with our service or our handling of personal data is widespread or not adequately addressed, our brand may be adversely impacted. If our efforts to promote and maintain our brand are not successful, our operating results and our ability to attract and retain customers may be adversely affected. Many individuals are passionate about family history research and participate in blogs and social media on this topic both on our websites and elsewhere. If actions we take or changes we make to our services or performance, such as redesigning our website, upset these individuals, their blogging and contributions to social media could negatively affect our brand and reputation, which could have a material adverse effect on our ~~business~~revenues, ~~financial condition and~~ results of operations. and financial condition.

As of December 31, 2014, approximately 30% of subscribers to our core Ancestry websites were from locations outside the United States. We are subject to many of the risks of doing business internationally, including the following: 16

•Table ~~exposure~~of ~~to foreign currency exchange rate fluctuations;~~Contents

•Challenges ~~compliance~~in ~~with~~acquiring ~~foreign~~historical ~~laws~~content and ~~the~~making ~~interpretation~~it ofavailable ~~those~~online ~~laws,~~could ~~including~~materially ~~tax,~~adversely ~~employment,~~affect our ability to retain and ~~anti-bribery~~expand ~~laws~~our subscriber base, and ~~regulations~~therefore ~~pertaining~~could tomaterially ~~the~~affect ~~sale~~our business, financial condition and ~~use~~results of ~~genetic information;~~operations.

•In ~~compliance~~order ~~with~~to ~~changing~~retain and ~~conflicting~~expand our subscriber base, both domestically and internationally, we must continue to expend significant resources to acquire significant amounts of additional historical content, digitize it and make it available to our subscribers online. We face legal, logistical, cultural and ~~regulatory~~commercial ~~regimes;~~challenges in acquiring new content. Relevant governmental records may be widely dispersed and held at a national, state or local level. Religious and private records are even more widely dispersed.

•These ~~compliance~~problems often pose particular challenges in acquiring content internationally. Desirable content may not be available to us on favorable terms, or at all, due to competition for a particular collection, privacy concerns relative to information contained in a given collection or our lack of negotiating leverage with Ua certain content provider.S For example, some of our most popular databases include “vital records” content—namely, historical birth, marriage and death records—made available by certain governmental agencies. ~~laws~~To ~~affecting~~help ~~operations~~prevent ~~outside~~identity theft, or other malicious activities, governments may attempt to restrict the release of or increase the ~~United~~difficulty ~~States~~of accessing all or substantial portions of their vital records content, ~~including~~and particularly birth records, to third parties. If these efforts are successful, it may limit, increase the ~~Foreign~~cost ~~Corrupt~~of ~~Practices~~or ~~Act;~~altogether prevent us from acquiring these types of vital record content or continuing to make them available online. In some cases, we have had to lobby for legislation to be changed or otherwise work to surmount administrative or other bureaucratic hurdles to enable government or other bodies to grant us access to records.

•While ~~compliance~~we ~~with~~own ~~varying~~or license most of the images in our databases, we generally do not own the underlying historical documents. If owners of content have sold or licensed the rights to digitize that content, even on a non-exclusive basis, they may elect not to sell or license it for digitization purposes to any other person. Therefore, if one of our competitors acquires rights to digitize a set of content, even on a non-exclusive basis, we may be unable to acquire rights to digitize that content. Conversely, the owners of historical records may allow more than one party to digitize those records and ~~conflicting~~our ~~intellectual~~competitors ~~property~~may ~~laws;~~digitize and make available the same content that we offer. In some cases, acquisition of content involves competitive bidding, and we may choose not to bid or may not successfully bid to acquire content rights. In addition, a number of governmental bodies and other organizations are interested in making historical content available for free and owners of historical records may license or sell their records to such governmental bodies and organizations in addition to or instead of licensing or selling their content to us. Our inability to offer certain vital records or other valuable content as part of our family history research databases or the widespread availability of such content elsewhere at lower cost or for free could result in our subscription services becoming less valuable to consumers, which could have a material adverse impact on our number of subscribers, and therefore on our business, financial condition and results of operations.

•We ~~difficulties~~depend in ~~staffing~~part upon third-party licenses for some of our historical content, and ~~managing~~a ~~international~~loss of these licenses, or disputes regarding any royalties or other terms under these licenses, could adversely affect our ability to retain and expand our subscriber base, and therefore could materially affect our revenues, financial condition and results of operations;.

•We ~~prevention~~acquire a portion of ~~business~~our content pursuant to ongoing license agreements. Some of these agreements have finite terms, and we may not be able to renew the agreements on terms that are advantageous to us or ~~user~~at ~~fraud;~~all. For example, we license content from The National Archives of the United Kingdom and FamilySearch under several license agreements that generally have ten-year terms, with varying automatic extension periods. The agreements are generally terminable by either party for breach by the other party or upon our insolvency or bankruptcy. Some of these agreements also contain change in control provisions that may permit the party to terminate these licenses.

•If ~~implementation~~a current or future license for a significant content collection were to be terminated or there were disputes regarding any royalties or other terms under these licenses, we may not be able to obtain a new license on terms advantageous to us or at all, and ~~maintenance~~we could be required to remove the relevant content from our websites, either immediately or after some period of ~~effective~~time. ~~internal~~If ~~controls~~a ~~and~~content ~~processes~~provider ~~across~~were ~~diverse~~to ~~operations~~license or sell us content in violation of that content provider’s agreements with other parties or if we misused any of the licensed content, we could be required to remove that content from our websites and potentially face liability. If we were required to remove a ~~dispersed~~material ~~employee~~amount ~~base~~of content from our websites, as a result of the termination of one or more licenses or otherwise, it could adversely affect our business and results of operations. Some of these license agreements restrict the manner in which we use the applicable content, which could limit our ability to leverage that content for new uses as we expand our business.

We anticipate that our continuing international expansion, including the international launch of AncestryDNA in 2015, will entail increased marketing and advertising of our products, services and brands, the development of localized websites and products throughout our geographical markets and increased costs associated with the compliance with the varying regulatory environments in the international markets that we have and may expand into. We may not succeed in these efforts or achieve our subscriber acquisition or other goals. For some international markets, customer preferences and buying behaviors may be different than those in our current markets, and we may use business models that are different from our traditional subscription models. Our revenues from new foreign markets may not exceed the costs of acquiring, establishing, marketing and maintaining international offerings, and therefore may not be profitable on a sustained basis, if at all. The risks of international expansion include: 17

•Table ~~difficulties in developing and marketing our offerings and brands as a result~~ of ~~distance, language and cultural differences;~~Contents

•Acquiring, ~~more~~digitizing ~~stringent~~and ~~consumer~~indexing new content can take a significant amount of time and expense, ~~data~~can expose us to risks associated with the loss or damage of historical documents, and ~~privacy~~our ~~protection~~costs ~~laws;~~to do so may exceed the realized benefits. Our inability to maintain or acquire content or make new content available online in a timely and cost-effective manner, or liability for loss of historical documents, could have a material adverse effect on our business, financial condition and results of operations.

•Digitizing ~~inability~~and indexing new historical content can take a significant amount of time and expense, and we generally incur the expenses related to ~~effectively~~such ~~deal~~content ~~with~~significantly ~~local~~in ~~socio-economic~~advance of the time we can make it available to our subscribers. We have made significant investments to acquire, digitize and ~~political~~index ~~conditions;~~content, including content acquired through business acquisitions, and we expect to continue to spend significant resources on content. If the costs incurred to acquire, digitize, or index content exceeds the realized benefit, it could harm our financial results.

•We ~~technical~~do ~~difficulties~~not have long-term contracts with any of our transcription vendors. If we were to transition away from one of our larger transcription vendors for any reason, we may be required to provide extensive training to the other vendors, which could delay our ability to make our new content available to our subscribers, and ~~costs~~our ~~associated~~relationships with the ~~localization~~other oftranscription vendors may be on financial or other terms less favorable to us than our ~~service~~existing ~~offerings;~~arrangements. Our inability to maintain or acquire content or to make new content available online in a timely and cost-effective manner would have a material adverse effect on our business, financial condition and results of operations.

•While ~~strong~~we ~~local~~are ~~competitors;~~digitizing content, we may be in possession of valuable and irreplaceable original historical documents. While we maintain insurance with respect to such documents, any loss or damage to such documents, while in our possession, could cause us significant expense and could have a material adverse effect on our reputation and the potential willingness of content owners to license or lend their content to us.

•Our ~~lack~~failure ofto ~~experience~~attract, inintegrate ~~certain~~and ~~geographical~~retain ~~markets~~highly qualified key personnel could harm our business, and if we are unable to integrate appropriate personnel, we may not be able to successfully implement our business plan.

~~One~~To orexecute ~~more~~our ofbusiness plan, we must attract and retain highly-qualified personnel. Competition for these ~~factors~~employees ~~could~~is intense, particularly for skilled engineers, and we may not be successful in attracting and retaining qualified personnel. We have ~~a material~~experienced ~~adverse~~and ~~effect~~we onexpect ~~our~~to ~~business~~continue to experience in the future, ~~financial~~difficulty ~~condition~~in hiring and ~~results~~retaining highly skilled employees with appropriate qualifications. Many of ~~operations~~the companies with which we compete for experienced personnel have greater resources than we have. In addition, in making employment decisions, particularly in high-technology industries, job candidates often consider the value of the stock-based awards they may receive in connection with their employment and may be concerned about the value and liquidity of the stock-based awards we offer. When adding staff, we may not make optimal hiring decisions or may not integrate personnel effectively. Additions to personnel may increase our cost base, which could make it more difficult to decrease expenses in the short term. If we fail to attract and effectively integrate new personnel, or fail to retain and motivate our current personnel, our business and future prospects could be materially adversely affected.

IfWe wedepend ~~are~~on ~~unable~~the tocontinued ~~improve~~service ~~market~~and ~~recognition~~performance of our key personnel, including Timothy Sullivan, our President and ~~loyalty~~ toChief Executive Officer. We do not maintain key man insurance on any of our ~~brands,~~officers or ifkey employees. We also do not have long-term employment agreements with our ~~reputation~~officers ~~were~~or tokey beemployees. ~~harmed~~In addition, wemuch ~~could~~of ~~lose~~our ~~subscribers~~key ortechnology ~~fail~~and tosystems ~~increase~~are ~~the~~custom-made ~~number~~for our business by our personnel. The loss of ~~subscribers~~key personnel, ~~which~~including ~~could~~key ~~have~~members aof ~~material~~our ~~adverse~~management ~~effect~~team, onas well as certain of our ~~revenues~~key marketing, ~~results~~product ofdevelopment or technology personnel could disrupt our operations and ~~financial~~have ~~condition~~an adverse effect on our ability to operate our business.

We ~~believe~~use ~~that~~a ~~maintaining~~single-source ~~and~~laboratory ~~enhancing~~for our ~~Ancestry~~DNA ~~brand~~testing and ~~other~~a ~~brands~~single-source ismanufacturer ~~critical~~for toproducing our ~~success.~~DNA Wekits, ~~believe~~which ~~that~~could ~~the importance~~materially ofharm ~~brand recognition and loyalty will only increase in light of increasing competition in~~ our ~~markets.~~business Weby ~~plan~~adversely toaffecting ~~continue~~the ~~to promote our brands~~availability, ~~both~~quality ~~domestically~~ and ~~internationally,~~cost ~~but there is no guarantee that our selected strategies will increase the favorable recognition~~ of our ~~brands.~~DNA Some of our existing and potential competitors, including search engines, media companies and government and religious institutions have well-established brands with greater brand recognition than we haveservices.

~~Additionally,~~We ~~from~~use ~~time~~a tosingle-source ~~time,~~laboratory ~~our~~for ~~subscribers express dissatisfaction with~~ our ~~service,~~DNA ~~including,~~testing ~~among other~~and ~~things,~~a ~~dissatisfaction with our auto~~single-~~renewal~~source ~~and~~manufacturer ~~other~~for ~~billing~~producing ~~policies,~~ our ~~handling~~DNA ~~of personal data and the way our services operate~~kits. ToIf ~~the~~testing ~~extent~~or ~~that~~production ~~dissatisfaction with our service~~ is ~~widespread~~delayed or ~~not~~curtailed ~~adequately~~by ~~addressed~~such sources, ~~our~~we ~~brand~~ may not be ~~adversely~~able ~~impacted.~~to Ifmeet our ~~efforts~~customers’ toexpectations ~~promote~~with ~~and~~respect ~~maintain~~to ~~our~~timing, ~~brand~~quality ~~are~~and ~~not~~price. ~~successful~~In addition, our ~~operating~~AncestryDNA ~~results~~business ~~and~~has ~~our~~grown ~~ability~~rapidly. toIf ~~attract~~such ~~and~~growth ~~retain~~were ~~subscribers~~to ~~may be adversely affected. In addition~~continue, ~~even if~~ our ~~brand~~single-source ~~recognition~~providers ~~and loyalty increase, this~~ may not ~~result~~have inthe ~~increased~~capacity ~~use~~to ofmeet our ~~products and services or higher revenues~~demands. ~~Many~~Even ~~individuals~~if ~~are~~we ~~passionate~~were ~~about~~able ~~family~~to ~~history~~locate ~~research~~alternative ~~and~~laboratories ~~participate~~or inmanufacturing ~~blogs~~facilities, ~~and~~qualification ~~social~~of ~~media~~an onalternative ~~this~~supplier, ~~topic~~obtaining ~~both~~the onappropriate ~~our~~technology ~~websites~~ and ~~elsewhere. If~~establishment ~~actions~~of wereliable ~~take~~services orcould ~~changes~~result wein ~~make~~delays toand ~~our~~a ~~products,~~possible ~~services~~loss orof ~~performance~~sales, ~~such~~which ascould ~~redesigning~~materially harm our ~~website,~~operating ~~upset~~results. We ~~these~~may ~~individuals,~~also ~~their~~be ~~blogging~~unable ~~and~~to ~~contributions~~locate toan ~~social~~alternative ~~media~~supplier ~~could~~that ~~negatively~~can ~~affect~~provide ~~our~~the ~~brand~~necessary services and ~~reputation~~technology at comparable prices, which could ~~have~~ aresult ~~material~~in ~~adverse~~an ~~effect~~increase onin ~~our~~the ~~revenues,~~cost ~~results~~ of ~~operations~~our ~~and~~DNA ~~financial condition~~services.

15Reliance on single-source suppliers subjects us to a risk of delays, as well as a risk of increased cost and/or reduced quality of our DNA services. In addition, faulty analyses from our DNA testing provider could harm our reputation and may adversely affect our future DNA revenues and the success of our DNA testing services.

~~Table of Contents~~18

~~Acquisitions,~~Table ~~if any, may not be completed within the expected timeframe or at all, and could prove difficult to integrate, disrupt our ongoing business or have a material adverse effect on our results~~ of ~~operations.~~ Contents

AsWe ~~part~~currently ~~of our~~outsource ~~business~~some ~~strategy, we have engaged and may in the future engage in acquisitions~~ of ~~businesses to augment~~ our ~~organic~~customer ~~or internal growth. While we have engaged in acquisitions in the past~~service, ~~our~~development ~~experience~~activities ~~with integrating~~ and ~~managing~~DNA ~~acquired businesses~~testing isservices ~~still~~to ~~limited.~~third ~~Acquisitions involve challenges and risks in negotiation~~parties, ~~execution,~~which ~~valuation~~exposes ~~and~~us ~~integration. Moreover, we may not be able~~ to ~~find~~significant ~~suitable acquisition opportunities on terms that are acceptable to us or if we do, we may be delayed or unsuccessful in completing the transaction. We could assume the economic~~ risks ~~of such failed or unsuccessful acquisitions. Even~~ if successfully negotiated, closed and integrated, certain acquisitions may not advance our business strategy, may fall short of expected return-on-investment targets or may fail. In addition, we may be exposed to unknown or unanticipated costs and liabilities, including litigation, against the companies we acquire. Any future acquisition could involve the aforementioned or numerous other risks and we may not be successful in addressing these ~~risks~~parties ~~or any other problems encountered in connection with any attempted acquisitions. Our failure to address these risks or other problems could cause us to~~ fail to ~~realize~~perform ~~the~~under ~~anticipated benefits of such acquisitions and could have a material adverse effect on~~ our ~~business,~~agreements ~~financial~~with ~~condition and results of operations~~them.

~~Undetected~~Because ~~product~~we orcurrently outsource some of our customer service, ~~errors~~development activities and DNA testing services to third parties, we have less control over the work produced by these providers than over our own employees. If customer service or ~~defects~~DNA ~~could~~testing ~~result~~personnel fail to perform in accordance with the ~~loss~~terms of ~~revenues~~our agreements, ~~delayed~~we ~~market~~may ~~acceptance~~fail ofto ~~our~~meet ~~products~~customer expectations. If third-party developers fail to adequately protect or transfer our intellectual property rights in our services, orour ~~claims against~~intellectual usproperty portfolio could be damaged. These outcomes could result in negative publicity, damage our reputation and brands and have a material adverse effect on our business and results of operations.

~~We offer a variety of Internet~~Cyber-~~based services and software products~~attacks, ~~which~~continued ~~are~~service ~~complex~~outages ~~and~~or ~~frequently~~significant ~~upgraded.~~disruptions ~~Our Internet-based~~in ~~services~~service ~~and~~on ~~software~~our ~~products~~websites ~~may~~or ~~contain~~in ~~undetected~~our ~~errors,~~computer ~~defects~~systems, ~~failures~~which orare ~~viruses,~~currently ~~especially~~hosted ~~when~~primarily ~~first~~by ~~introduced~~a orsingle ~~when~~third ~~new~~party, ~~versions~~could ordamage ~~enhancements are released. Despite product testing,~~ our ~~products,~~reputation orand ~~third-party products~~result ~~that~~in wea ~~incorporate~~loss ~~into~~of ~~our products~~customers, ~~may~~which ~~contain~~would ~~undetected~~harm ~~errors,~~our ~~defects~~business orand ~~viruses~~operating ~~that could, among other things:~~ results.

•Our ~~require~~brand, usreputation and ability to ~~make~~attract, ~~extensive~~retain ~~changes~~and serve our customers depend upon the reliable performance of our websites, network infrastructure, content delivery processes and payment systems. We have experienced interruptions in these systems in the past, including server failures and electronic attacks that temporarily slowed down our websites’ performance and users’ access to content, or made our ~~subscription~~websites ~~services~~inaccessible, and we may experience network security breaches or other interruptions in the future. We have experienced “distributed-denial-of-service” and other attacks in the past that have caused our systems to respond slowly or be inaccessible. Our efforts to fix these disruptions may redirect resources from development or other business initiatives and may not result in lasting benefits. Rapid advances in technology may prevent us from anticipating all potential security threats or promptly identifying all security breaches, and the limits and costs of technology, skills and manpower could prevent us from adequately addressing these threats. Interruptions in these systems, whether due to system failures, computer viruses, worms, malicious software ~~products~~programs or physical or electronic attacks or break-ins, ~~which~~could ~~would~~affect ~~increase~~the security or availability of our ~~expenses;~~websites and prevent our subscribers from accessing our data and using our services. Problems with the reliability or security of our systems may cause shutdowns or service disruptions, harm our reputation, result in regulatory penalties or litigation, impair our ability to attract new subscribers and cause subscribers to cancel, and the cost of remedying these problems and improving cyber-defense systems could negatively affect our business, financial condition and results of operations.

•Substantially ~~expose~~all usof our communications, network and computer hardware used to ~~claims~~operate our websites are co-located in a third-party facility in Salt Lake City, Utah. We do not own or control the operation of this facility. We also store certain data in a third-party facility in Ireland. We also use third-party off-site cloud-based backup resources, and we have disaster recovery plans in place. Our disaster recovery plans are not fully redundant to our facility in Utah. Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, terrorist attacks, acts of war, electronic and physical break-ins, computer viruses, earthquakes and similar events. The occurrence of any of the foregoing events at one or more facilities could result in reduced functionality or interruption of our websites, damage to our systems and hardware or could cause them to fail completely, and our insurance may not cover such events or may be insufficient to compensate us for ~~damages;~~losses that may occur. A network or communications failure or interruption of our system could also result in our customers losing access to or experiencing reduced functionality of our websites.

•In ~~require~~addition, we utilize third-party Internet-based or “cloud” computing services in connection with our business operations, including with our DNA testing services, our credit card processing and our disaster recovery systems. Cloud computing services are vulnerable to the same disruptions, attacks and break-ins as our co-located systems and facilities, but we may have reduced visibility of the potential vulnerabilities of cloud computing services. Disruptions of the cloud computing services we use may result in customers losing access or in reduced functionality of our websites. Problems faced by our third-party web hosting provider, with telecommunications network providers or with the systems by which these providers allocate capacity among their customers, including us, could adversely affect the experience of our subscribers. Our third-party web hosting providers, including our co-located facilities and the cloud computing services that we use, could decide to ~~incur~~stop ~~additional~~providing ~~technical~~services ~~support~~to ~~costs;~~us without adequate notice. In addition, any financial difficulties, such as bankruptcy reorganization, faced by our third-party web-hosting providers or any other service providers may have negative effects on our business, the nature and extent of which are difficult to predict. Additionally, if our third-party web-hosting providers are unable to keep up with our growing needs for capacity, this could have a material adverse effect on our business. Any errors, defects, disruptions or other performance problems with our services could harm our reputation and have a material adverse effect on our business, financial condition and results of operations.

~~• cause a negative registered user reaction that could reduce future sales;~~19

•Table ~~generate~~of ~~negative publicity regarding us and our subscription services and software products; or~~Contents

•We ~~result~~face inmany ~~subscribers~~risks ~~delaying~~associated ~~their~~with ~~subscription~~our orplans ~~software~~to ~~purchase~~continue orto ~~electing~~expand ~~not~~our tointernational ~~renew~~offerings ~~their~~and ~~subscriptions~~marketing and advertising efforts, which could have a material adverse effect on our business, financial condition and results of operations.

~~Any~~For the year ended December 31, 2015, approximately 20% of ~~these~~revenues ~~occurrences~~were ~~could~~from ~~have~~customers alocated ~~material~~outside ~~adverse~~the ~~effect~~United ~~upon~~States. ~~our~~We ~~business,~~are ~~financial~~subject ~~condition~~to ~~and~~many ~~results~~of the risks of ~~operations.~~doing business internationally, including the following:

~~Privacy~~• ~~concerns~~exposure ~~could require us~~ to ~~incur~~foreign ~~significant~~currency ~~expense~~exchange ~~and~~rate ~~modify our operations or future plans in a manner that could result in restrictions and prohibitions on our use of certain information, and therefore harm our business.~~ fluctuations;

As• ~~part~~compliance of our business, we make biographical and historical data available through our websites, we use registered users’ personal data for internal purposes and we host websites and message boards, among other things, that contain content supplied by third parties. In addition, in connection with ~~our~~foreign ~~AncestryDNA~~laws ~~testing services, we obtain biological DNA samples used for genetic testing. For privacy or security reasons, privacy groups, governmental agencies~~ and individuals may seek to restrict or prevent our use or publication of certain biological or historical information pertaining to individuals, particularly living persons. Because most of our genetic testing of DNA samples is outsourced to third-party service providers, we have less control over privacy and security measures. If our third-party DNA testing providers fail to comply with privacy and security standards, as required pursuant to the ~~terms~~interpretation of our agreements with such providers, this could have a material adverse effect on our business, financial condition and results of operations. We also face additional privacy issues as we expand into other international markets, as many nations have privacy protections more stringent than those ~~in the United States, particularly in Europe where privacy~~ laws ~~continue to become more expansive. The protection of consumer privacy has also increasingly become a focus of U.S. regulators~~, ~~and~~including ~~the impact of recent and potential future enhanced privacy protections in the United States is uncertain. We have incurred~~tax, ~~and will continue to incur~~employment, ~~expenses to comply with privacy~~ and security standards and protocols imposed by law, regulation, industry standards or contractual obligations. Increased domestic or international regulation of data utilization and distribution practices, including selfanti-~~regulation,~~bribery ~~could~~laws ~~require us to modify our operations~~ and ~~incur~~regulations ~~significant~~pertaining ~~expense, which could have a material adverse effect on our business, financial condition and results of operations. If our users’ private content were~~ to ~~become publicly available or, if third parties were able to gain unauthorized access to such content, in particular~~ the ~~new~~sale ~~DNA testing information, we may face liability~~ and ~~harm~~use toof ~~our~~genetic ~~brand and reputation.~~ information;

~~Our~~• ~~possession~~compliance ~~and~~with ~~use~~changing ofand ~~personal~~conflicting ~~information~~legal ~~presents risks that could harm our business. Unauthorized disclosure or use of such data, whether through breach of our network security or otherwise, could expose us to significant liability~~ and ~~damage~~regulatory ~~our reputation.~~ regimes;

~~Maintaining~~• ~~the~~compliance ~~security~~with of our information technology and network systems infrastructure, including the cloud computing services that we use, is of critical importance because we handle confidential subscriber, registered user, employee and other sensitive data, such as names, addresses, credit card numbers and genetic and other personal informationU. ~~In addition, our online systems include the content that our registered users upload onto our websites, such as family records and photos~~S. ~~This~~laws ~~content~~affecting isoperations ~~often~~outside ~~personally meaningful, and our registered users may rely on our online system to store digital copies~~ of ~~such~~the ~~content. If~~United ~~we were to lose such content~~States, ifincluding ~~our~~the ~~users’~~Foreign ~~private~~Corrupt ~~content~~Practices ~~were to become publicly available or if third parties were able to gain unauthorized access to such content, we may face liability and harm to our brand and reputation.~~ Act;

16• compliance with varying and conflicting intellectual property laws;

~~Table~~• ofdifficulties ~~Contents~~in staffing and managing international operations;

~~Almost~~• ~~all~~prevention of ~~our~~business ~~subscribers use credit and debit cards to purchase our products and services. If we~~ or ~~our~~user ~~processing~~fraud; ~~vendors were to have problems with our billing systems, it could have an adverse effect on our subscriber satisfaction~~ and could cause one or more of the major credit card companies to disallow our continued use of their payment services. In addition, if our billing system fails to work properly and, as a result, we do not charge our subscribers’ credit cards on a timely basis or at all, our business, financial condition, cash flows and results of operations could be materially affected.

We• ~~and~~implementation ~~our vendors use commercially available encryption technology to transmit personal information when taking orders. We use security~~ and ~~business~~maintenance ~~controls to limit access and use~~ of ~~personal~~effective ~~information,~~internal ~~including~~controls ~~registered users’ uploaded content. However, third parties may be able to circumvent these security~~ and ~~business~~processes ~~measures,~~across ~~including by~~diverse ~~developing~~operations and deploying viruses, worms and other malicious software programs that are designed to attack or attempt to infiltrate our systems and networks. In addition, employee error, vendor error, malfeasance or other errors in the storage, use or transmission of personal information could result in data loss, theft of subscriber information or a ~~breach~~dispersed ~~of registered user or~~ employee ~~privacy~~base.

~~There~~We ~~can~~anticipate ~~be no assurances~~ that ~~we will be able to continue to operate~~ our ~~facilities~~continuing ~~and~~international ~~customer service and sales operations in accordance with industry practices~~expansion, ~~such~~including as Payment Card Industry Data Security Standards. Even if we remain compliant with those standards, we may not be able to prevent security breaches involving customer data. If we experience a security breach or other lapse in the ~~handling~~continued expansion of ~~confidential~~AncestryDNA ~~information~~internationally, ~~the~~will ~~incident~~entail ~~could~~increased ~~give~~marketing ~~rise to risks including data loss, litigation~~ and ~~liability,~~advertising ~~and~~of ~~could harm~~ our ~~reputation~~services orand ~~disrupt our operations~~brands, ~~any~~the development of ~~which~~localized ~~could~~websites ~~materially~~and ~~adversely~~services ~~affect~~throughout our ~~business.~~ Ingeographical ~~addition,~~markets ~~various states~~ and ~~countries~~increased ~~have~~costs ~~differing~~associated ~~laws~~with ~~regarding~~the ~~protection~~compliance ofwith ~~customer~~the ~~privacy~~varying ~~and~~regulatory ~~confidential~~environments ~~information, including notification requirements~~ in the ~~event~~international ofmarkets ~~certain~~that ~~breaches~~we orhave ~~losses~~and ofmay ~~information~~expand into. ~~Privacy laws~~We ~~continue~~may tonot ~~become~~succeed ~~more far-reaching, particularly~~ in ~~Europe,~~these ~~and~~efforts ~~consumer~~or ~~privacy~~achieve ~~has~~our ~~also~~customer ~~become~~acquisition anor ~~area~~other ~~of enhanced focus in the United States~~goals. ~~The~~For ~~impact~~some ofinternational ~~expanded~~markets, ~~laws~~customer ~~and~~preferences ~~regulatory action is still uncertain~~ and webuying behaviors may be ~~required~~different ~~to adapt~~than ~~quickly~~those ~~to changes~~ in ~~the regulatory landscape. Efforts to comply with these laws and regulations increase~~ our ~~costs~~current ~~of doing business~~markets, and ~~failure~~we tomay ~~achieve~~use ~~compliance~~business ~~could~~models ~~result~~that inare ~~substantial~~different ~~liability~~from to our ~~business~~traditional ~~and~~subscription ~~harm our reputation~~models. InOur ~~the~~revenues ~~event~~from ofnew aforeign ~~security~~markets ~~breach~~may ornot ~~loss~~exceed ofthe ~~confidential~~costs ~~information,~~of ~~we could be subject to fines~~acquiring, ~~penalties~~establishing, ~~damages~~marketing and ~~other~~maintaining ~~remedies~~international ~~under~~offerings, ~~applicable~~and ~~laws,~~therefore ~~any~~may ofnot ~~which~~be ~~could~~profitable ~~have~~on a ~~material~~sustained ~~adverse~~basis, ~~impact~~if onat ~~our~~all. ~~reputation, business,~~The ~~operating~~risks ~~results~~of ~~and~~international ~~financial~~expansion ~~condition.~~ include:

If• ~~third~~difficulties ~~parties improperly obtain and use the personal information of our registered users or employees, we may be required to expend significant resources~~ in ~~efforts~~developing ~~to address these problems. A major breach of our network security~~ and ~~systems,~~marketing ~~including the cloud computing services that we use, could have serious negative consequences for~~ our ~~businesses,~~offerings ~~including possible fines, penalties~~ and ~~damages,~~brands ~~reduced~~as demand for our products and services, an unwillingness of subscribers to provide us with their credit card or payment information, an unwillingness of registered users to upload family records or photos onto our websites, harm to our reputation and brand and loss of our ability to accept and process subscriber credit card orders. Similarly, if a ~~well-publicized~~result ~~breach~~ of ~~data security at any other major consumer website were to occur~~distance, ~~there~~language ~~could be a general public loss of confidence in the use of the Internet for commercial transactions. Any of these events could have material adverse effects on our business, financial condition~~ and ~~results of~~cultural ~~operations. In addition, we may have inadequate insurance coverage to compensate for any related losses.~~ differences;

~~Any~~• ~~claims~~more ~~related~~stringent toconsumer, ~~activities~~data ~~of registered users~~ and ~~the~~privacy ~~content~~protection ~~they upload could result in expenses that could harm our results of operations and financial condition.~~ laws;

~~Our~~• ~~registered~~inability ~~users often upload their own content onto our websites. The terms of use of such content are set forth in the terms and conditions of our websites and a submission agreement~~ to ~~which~~effectively ~~registered~~deal users must agree when they upload their content. Disputes or negative publicity about the use of such content could make users more reluctant to upload personal content or harm our reputation. We do not review or monitor content uploaded by our registered users, and could face claims arising from or liability for making any such content available on our websites. In addition, our collaboration tools and other features of our site allow subscribers to contact each other. While subscribers can choose to remain anonymous in such communications, subscribers may choose to engage with ~~one~~local ~~another~~socio-economic ~~without anonymity. If any such contact were to lead to fraud or other harm, we may face claims against us~~ and ~~negative~~political publicity. Litigation to defend these claims or efforts to counter any negative publicity could be costly and any other liabilities we incur in connection with any such claims may have a material adverse effect on our business, financial condition and results of operations. conditions;

~~Increases~~• intechnical ~~credit~~difficulties ~~card processing fees would increase our operating expenses~~ and ~~materially~~costs ~~adversely~~associated ~~affect~~with ~~our results of operations, and~~ the ~~termination~~localization of our ~~relationship~~service ~~with any major credit card company could have a severe, negative impact on our ability to collect revenues from subscribers.~~ offerings;

~~The~~• ~~majority~~strong oflocal ~~our~~competitors; ~~subscribers pay for our products~~ and services using credit cards. From time to time, the major credit card companies or the issuing banks may increase the fees that they charge for each transaction using their cards. An increase in those fees would require us to increase the prices we charge for our products and services or negatively impact our profitability, either of which could materially affect our business, financial condition and results of operations.

In• ~~addition,~~lack ~~our credit~~of ~~card~~experience ~~fees~~in ~~may be increased by credit card companies if our chargeback rate or the refund rate exceeds~~ certain ~~thresholds.~~geographical ~~If we are unable to maintain our chargeback rate at acceptable levels, our credit card fees for chargeback transactions, or for~~ markets.

17One or more of these factors could have a material adverse effect on our business, financial condition and results of operations.

~~Table~~Undetected service errors or defects could result in the loss of ~~Contents~~revenues, delayed market acceptance of our services or claims against us.

~~all~~We ~~credit~~offer ~~card~~a ~~transactions,~~variety ~~may~~of ~~be increased~~services, ~~and,~~many ifof ~~the~~which ~~problem~~are ~~significantly~~complex ~~worsens,~~and ~~credit~~frequently ~~card~~upgraded. ~~companies~~Our services may ~~further~~contain ~~increase~~undetected ~~our~~errors, ~~fees~~defects, failures or ~~terminate~~viruses, ~~their~~especially ~~relationships~~when ~~with~~first ~~us.~~introduced ~~Any increases~~or inwhen ~~our~~enhancements ~~credit~~are ~~card~~released. ~~fees~~Despite ~~could~~testing, ~~adversely affect~~ our ~~results of operations~~services, ~~particularly~~or ifthird-party weproducts ~~elect~~or ~~not~~services tothat ~~raise~~we ~~our~~incorporate ~~subscription~~into ~~rates to offset the increase. The termination of~~ our ~~ability~~services, tomay ~~process~~contain ~~payments~~undetected onerrors, ~~any~~defects ~~major credit~~ or ~~debit card~~viruses ~~would~~that ~~significantly~~could, ~~impair~~among ~~our~~other ~~ability to collect revenues from subscribers.~~ things:

If• ~~government~~require ~~regulation~~us ofto ~~the~~make ~~Internet~~extensive ~~or other areas of our business~~ changes, ~~we may need~~ to ~~change the way we conduct~~ our ~~business~~subscription ~~in a manner that is less profitable~~ or ~~incur~~other ~~greater operating expenses~~services, which ~~could~~would ~~harm~~increase our ~~results of operations.~~ expenses;

~~The~~• ~~adoption,~~expose modification or interpretation of laws or regulations relating to the Internet or other areas of our business could adversely affect the manner in which we conduct our business or the overall popularity or growth in use of the Internet. Such laws and regulations may cover automatic subscription renewal, credit card processing procedures, sales and other procedures, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts, consumer protection, net neutrality, broadband residential Internet access and the characteristics and quality of services. In foreign countries, such as countries in Europe and Asia, such laws may be more restrictive than in the United States. It is not clear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the Internet. If we are required to comply with new regulations or legislation or new interpretations of existing regulations or legislation, this compliance could cause us to ~~incur~~claims ~~additional~~for expenses, make it more difficult to renew subscriptions automatically, make it more difficult to attract new subscribers or otherwise alter our business model. Any of these outcomes could have a material adverse effect on our business, financial condition or results of operations. damages;

~~Our~~• ~~revenues~~require ~~may~~us ~~be materially adversely affected if we are required~~ to ~~charge~~incur ~~sales taxes in~~ additional ~~jurisdictions~~technical ~~and/or~~support ~~other taxes for our products and services.~~ costs;

We• ~~collect~~cause ora ~~have~~negative ~~imposed~~user ~~upon~~reaction us sales or other taxes related to the products and services we sell in certain states and other jurisdictions. Additional states or one or more countries or other jurisdictions may seek to impose sales or other tax collection obligations on us in the future or states or jurisdictions in which we already collect tax may increase the amount of taxes we are required to collect. A successful assertion by any country, state or other jurisdiction in which we do business that ~~we should be collecting sales or other taxes on the sale of our products and services~~ could~~, among~~ ~~other~~reduce ~~things,~~future ~~result in substantial tax liabilities for past~~ sales, create significant administrative burdens for us, discourage registered users from purchasing from us or otherwise substantially harm our business and results of operations. Further, if additional sales or other taxes were imposed in jurisdictions where we do business, we may be unable to fully pass these costs on to our subscribers, which may also harm our business and results of operations. ;

~~Our~~• ~~Revolving~~generate ~~Facility~~negative ~~may~~publicity ~~not~~regarding ~~be sufficient for our needs, and we may require additional capital for business opportunities, acquisitions or unforeseen circumstances. If such sources are not available to~~ us, ~~or are not available on acceptable terms, we may not be able to expand~~ and our ~~business~~services; ~~and/~~or ~~our operating results and financial condition may be materially harmed.~~

We intend to continue to make investments to support our business growth and may require additional funds to respond to business opportunities, including developing new features and products or enhancing our existing solutions, improving our operating infrastructure or acquiring complementary businesses and technologies. Our Revolving Facility, which provides for $50.0 million of borrowings, may not be sufficient for our needs. Accordingly, we and/or our parent entities (“the Ancestry Group”) may engage in debt financing to secure additional funds; however, we may not be able to obtain additional financing on terms favorable to us, if at all. For example, our Second Amended Credit Facility, and the indentures governing the Notes and the PIK Notes contain restrictive covenants relating to capital-raising activities by us and our direct parent, Ancestry.com Holdings LLC (“Holdings LLC”), and other financial and operational matters, and any debt financing obtained by us or our parent entities in the Ancestry Group in the future could involve further restrictive covenants, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to grow our business and to respond to business challenges could be significantly impaired, and our business may be materially harmed. 20

WeTable ~~face~~of ~~risks associated with currency exchange rate fluctuations, which could adversely affect our revenues and operating results.~~ Contents

~~For~~• the year ended December 31, 2014, approximately 20% of our total revenues earned and approximately 6% of our total expenses incurred were in currencies other than the United States dollar, such as the British pound sterling, the Australian dollar, the Canadian dollar and the Euro. As a result, we are at risk for exchange rate fluctuations between such foreign currencies and the United States dollar, which could affect our revenues and results of operations. If the U.S. dollar strengthens against foreign currencies, the translation of these foreign currency denominated transactions will result in ~~decreased~~subscribers ~~revenues,~~delaying ~~operating~~their ~~expenses and net income. We may not be able to offset adverse foreign currency impact with increased~~ subscription ~~pricing~~ or ~~volume.~~software ~~We attempt~~purchase toor ~~limit~~electing ~~our exposure by paying our operating expenses incurred in foreign jurisdictions with revenues received in the applicable currency, but if we do~~ not ~~have enough local currency~~ to ~~pay~~renew all our expenses in that currency, we are exposed to currency exchange rate risk with respect to those expenses. Even if we were to implement hedging strategies to mitigate foreign currency risk, these strategies might not eliminate our exposure to foreign exchange rate fluctuations and would involve costs and risks of their ~~own, such as ongoing management time and expertise, external costs to implement the strategies and potential accounting implications~~subscriptions.

~~Our~~Any ~~business~~of ~~may~~these beoccurrences ~~significantly~~could ~~impacted~~have by a ~~change~~material inadverse ~~the~~effect ~~economy,~~upon ~~including~~our ~~any~~business, ~~resulting~~financial ~~effect~~condition onand ~~consumer~~results ~~spending.~~of operations.

~~Our~~Any ~~business~~claims ~~may~~related beto ~~affected~~activities byof ~~changes~~our inusers and the ~~economy~~content ~~generally,~~they ~~including~~upload ~~any~~could ~~resulting~~result ~~effect~~in onexpenses ~~consumer~~that ~~spending~~could ~~specifically.~~harm ~~Our products~~our ~~and~~results ~~services~~of ~~are~~operations ~~discretionary purchases,~~ and ~~consumers~~financial ~~may reduce their discretionary spending on our~~ condition.

18Our users often upload their own content onto our websites. The terms of use of such content are set forth in the terms and conditions of our websites and a submission agreement to which users must agree when they upload their content. Disputes or negative publicity about the use of such content could make users more reluctant to upload personal content or harm our reputation. We do not review or monitor content uploaded by our users and could face claims arising from or liability for making any such content available on our websites. In addition, our collaboration tools and other features of many of our sites allow customers to contact each other. While customers can choose to remain anonymous in such communications, customers may choose to engage with one another without anonymity. If any such contact were to lead to fraud or other harm, we may face claims against us and negative publicity. Litigation to defend these claims or efforts to counter any negative publicity could be costly and any other liabilities we incur in connection with any such claims may have a material adverse effect on our business, financial condition and results of operations.

~~Table~~If government regulation of ~~Contents~~our business changes, we may need to change the way we conduct our current business in a manner that is less profitable or incur greater operating expenses, which could harm our results of operations.

~~products~~The ~~and~~adoption, ~~services~~modification ~~during~~or aninterpretation ~~economic~~of ~~downturn.~~laws ~~Although~~or weregulations ~~did~~relating ~~not~~our ~~experience~~business acould ~~material~~adversely ~~increase~~affect the manner in ~~subscription~~which ~~cancellations~~we orconduct aour ~~material~~current ~~reduction~~business. inSuch laws and regulations may cover automatic subscription ~~renewals~~renewal, ~~during~~credit ~~the economic~~card ~~downturn~~processing procedures, wesales ~~may~~and ~~yet~~other beprocedures, ~~impacted~~tariffs, ifuser ~~employment~~privacy, ~~and~~data ~~personal~~protection, ~~income~~pricing, docontent, ~~not~~copyrights, ~~continue~~distribution, toelectronic ~~improve~~contracts, orconsumer ifprotection, ~~global~~net ~~economic~~neutrality, ~~conditions~~broadband ~~deteriorate~~residential Internet access and the characteristics and quality of services. ~~Conversely~~In foreign countries, ~~consumers~~such as countries in Europe and Asia, such laws may ~~spend~~be more ~~time~~restrictive ~~using~~than in the ~~Internet~~United ~~during~~States. anIt ~~economic~~is ~~downturn~~not ~~and~~clear ~~may have~~how ~~less~~existing ~~time~~laws ~~for~~governing ~~our~~issues ~~products~~such as property ownership, sales and ~~services~~other intaxes, alibel ~~period~~and ofpersonal ~~economic~~privacy ~~growth~~apply to the Internet. InFor ~~addition~~example, ~~media~~the ~~prices,~~Court ~~including~~of ~~television~~Justice ~~advertising,~~for ~~are~~the ~~unpredictable~~European Union and ~~prices~~the ~~may~~Article ~~increase~~29 ifWorking Group recently declared the ~~economy~~U.S. ~~continues~~Safe toHarbor ~~recover~~Agreement orunder ~~grows,~~the ~~which~~Data ~~could significantly~~Protective ~~increase~~Directive ~~our~~from ~~already~~the ~~substantial~~European ~~marketing~~Union ~~and~~as ~~advertising~~invalid ~~expenses~~causing uncertainty around transfers of personal data outside of the European Union. AsAlthough aother ~~result,~~legally-recognized ~~our~~methods ~~business,~~to ~~financial~~enable ~~condition~~data ~~and~~transfers ~~results~~currently remain valid, the reasoning of ~~operations~~the ~~may~~Court beof ~~significantly~~Justice ~~impacted~~for bythe ~~changes~~European inUnion striking down the ~~global~~safe ~~economy~~harbor ~~generally~~framework could be used to challenge those methods in future complaints.

WeAlso, ~~have~~as ~~made~~we ~~significant~~develop ~~estimates~~new services, we may become subject to additional laws and ~~judgments~~regulations. inIf ~~calculating~~we are required to comply with new or additional regulations or legislation or new interpretations of existing regulations or legislation, this compliance could cause us to incur additional expenses, make it more difficult to renew subscriptions automatically, make it more difficult to attract new subscribers, make it more difficult to use our ~~income~~current ~~tax~~service ~~provision~~providers (data processors) or otherwise alter our business model. New laws and ~~other~~regulations, ~~tax~~and ~~assets~~the interpretation thereof, are often complex and ~~liabilities~~subject to interpretation. IfWe ~~these~~may ~~estimates~~misinterpret, or ~~judgments~~ ~~are~~not ~~incorrect,~~properly ~~our~~comply ~~operating~~with ~~results~~all ~~and~~aspects ~~financial~~of ~~condition~~the regulation or may be ~~materially~~unable ~~affected~~to implement any changes required by any date proscribed. Any of these outcomes could have a material adverse effect on our business, financial condition or results of operations.

We ~~are~~may ~~subject~~develop toproducts ~~regular review and audit by both domestic and foreign tax authorities. Any adverse outcome of such a review~~ or ~~audit~~services ~~could~~that ~~have~~may abe ~~negative~~regulated ~~effect~~by onthe ~~our~~Food ~~operating results~~ and ~~financial~~Drug ~~condition.~~Administration ~~In addition, the determination of our provision for income taxes~~ and other ~~tax~~state ~~assets~~or ~~and~~foreign ~~liabilities~~governmental ~~requires~~agencies. ~~significant~~Obtaining ~~judgment,~~clearance and ~~there~~maintaining ~~are~~ongoing ~~many~~compliance ~~transactions~~for ~~and~~such ~~calculations~~products ~~where the ultimate tax determination is uncertain at the present time. Although we believe our estimates~~ and ~~judgments are reasonable~~services, ~~the~~if ~~ultimate~~applicable, ~~tax~~could ~~outcome~~be ~~may~~time ~~differ~~consuming ~~from the amounts recorded in our financial statements~~ and ~~may have a material effect on our operating results and financial condition~~costly.

WeOur ~~earn~~current aAncestryDNA ~~significant~~service ~~amount~~is ofnot ~~our~~regulated ~~operating~~by ~~income~~the ~~from~~Food ~~outside~~and Drug Administration (FDA). However, if we invest in health-related DNA testing or other health products or services, those products could be considered a medical device by the ~~United~~FDA ~~States~~or other applicable state or foreign governmental agencies, and ~~there~~those ~~have~~products ~~been~~and ~~proposals~~services tomay ~~change~~be ~~U.S.~~subject ~~tax~~to ~~laws that~~regulations ~~would~~imposed ~~significantly~~by ~~impact~~the ~~how~~FDA weand ~~are~~various ~~taxed~~state onand foreign ~~earnings~~governmental and regulatory agencies. Obtaining ~~Although~~FDA weclearance ~~cannot~~in ~~predict~~such ~~whether~~case could take months or years, and generally requires extensive reporting and testing and require extensive financial, managerial and other resources. With respect to foreign markets, approval procedures vary among countries and, in ~~what~~addition ~~form~~to ~~any~~the ~~proposed~~aforementioned ~~legislation~~risks, ~~may~~can ~~pass~~involve additional product testing and administrative review periods. In addition to the time and expense in attempting to secure clearance, our efforts, if ~~enacted~~necessary, itmay ~~could~~fail ~~have~~to aresult ~~material~~in ~~adverse~~FDA clearance or result in limited clearance for uses we believe are not commercially attractive or result in clearance that contains requirements for potentially costly post-marketing follow-up studies. Such regulation could impact, onrestrict ~~our~~or ~~future~~make ~~tax~~untenable ~~expense~~product ~~and~~development, ~~cash~~production, ~~flow~~use and marketing.

~~Expenses or liabilities resulting from litigation could materially adversely affect our results of operations and financial condition.~~ 21

WeTable ~~have and may become party to various legal proceedings and other claims that arise in the ordinary course~~ of business, or otherwise in the future. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. In addition, any such claims or litigation may be time-consuming and costly, divert management resources, require us to change our products and services, require us to accept returns of software products or have other adverse effects on our business. While we cannot assure the ultimate outcome of any legal proceeding or contingency in which we are or may become involved, we do not believe that any pending legal claim or proceeding arising in the ordinary course will be resolved in a manner that would have a material adverse effect on our business. However, if one or more of these legal matters resulted in an adverse monetary judgment against us, such a judgment could have a material adverse effect on our results of operations and financial condition. See also the risk factor “Intellectual property claims against us could be costly and result in the loss of significant rights related to, among other things, our websites, content indexes, and marketing and advertising activities” below. Please refer to Item 3 of Part I for more information about the Company’s current legal proceedings. Contents

AsEven anif ~~“emerging~~we ~~growth~~do ~~company”~~ultimately ~~under~~receive ~~the~~FDA ~~JOBS~~approval ~~Act~~for any of our products, wethese ~~are~~products ~~permitted~~will be subject to extensive ongoing regulation, ~~and~~including ~~intend~~regulations togoverning manufacturing, ~~rely~~labeling, onpackaging, ~~exemptions~~testing, ~~from~~record ~~certain~~keeping, ~~disclosure requirements~~reporting, handling and shipment. Failure to obtain and maintain required registrations or to comply with any applicable regulations could further delay or preclude development and commercialization of our products and subject us to enforcement action.

AsThe ancost ~~“emerging growth company” under the Jumpstart Our Business Startups Act~~ of ~~2012~~attempting ~~(the~~to ~~“JOBS Act”),~~clear wesuch ~~are permitted to~~regulations, and ~~intend to, rely on exemptions from certain disclosure requirements. We are an emerging growth company until~~ the ~~earliest~~ongoing ~~of:~~cost ~~(i) the last day~~ of ~~the~~complying ~~fiscal~~with ~~year~~such ~~during which we had total annual gross revenues of $1 billion or more~~regulations, ~~(ii) the~~could ~~last~~adversely ~~day~~impact ~~of the fiscal year following the fifth anniversary of the date of the first sale of~~ our common stock pursuant to an effective registration statement, (iii) the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt or (iv) the date on which we are deemed a “large accelerated issuer” as defined under the federal securities lawsbusiness. ~~For so long as we remain an emerging growth company, we will not be required to:~~

•Our ~~have~~revenues anmay ~~auditor~~be ~~report~~materially onadversely ~~our~~affected ~~internal~~if ~~control~~we ~~over~~are ~~financial~~required ~~reporting~~to ~~pursuant~~charge tosales ~~Section~~taxes ~~404(b)~~in ofadditional ~~the~~jurisdictions ~~Sarbanes-Oxley~~and/or ~~Act~~other oftaxes ~~2002,~~for asour ~~amended;~~products and services.

•We ~~comply~~collect ~~with~~or ~~any~~have ~~requirement~~imposed ~~that~~upon ~~may~~us besales ~~adopted~~or byother taxes related to the ~~Public~~products ~~Company~~and ~~Accounting~~services ~~Oversight~~we ~~Board~~sell ~~(“PCAOB”)~~in ~~regarding~~certain ~~mandatory~~states ~~audit~~and ~~firm~~other ~~rotation~~jurisdictions. Additional states or aone ~~supplement~~or more countries or other jurisdictions may seek to impose sales or other tax collection obligations on us in the ~~auditor’s~~future ~~report~~or ~~providing~~states ~~additional~~or ~~information~~jurisdictions ~~about~~in which we already collect tax may increase the ~~audit~~amount ~~and~~of taxes we are required to collect. A successful assertion by any country, state or other jurisdiction in which we do business that we should be collecting sales or other taxes on the ~~financial~~sale ~~statements~~of ~~(auditor~~our ~~discussion~~products and ~~analysis);~~services could, among other things, result in substantial tax liabilities for past sales, create significant administrative burdens for us, discourage registered users from purchasing from us or otherwise substantially harm our business and results of operations. Further, if additional sales or other taxes were imposed in jurisdictions where we do business, we may be unable to fully pass these costs on to our subscribers, which may also harm our business and results of operations.

•Our ~~submit~~revolving ~~certain~~facility ~~executive~~may ~~compensation~~not ~~matters~~be tosufficient ~~shareholders~~for ~~advisory~~our ~~votes~~needs, ~~pursuant~~and towe ~~the~~may ~~“say~~require onadditional ~~frequency”~~capital ~~and~~for ~~“say~~business onopportunities, ~~pay”~~acquisitions ~~provisions~~or ~~(requiring~~unforeseen acircumstances. ~~non-binding~~If ~~shareholder~~such ~~vote~~sources toare ~~approve~~not ~~compensation~~available ofto ~~certain~~us, ~~executive~~or ~~officers)~~are ~~and~~not ~~the~~available ~~“say~~ on ~~golden~~acceptable ~~parachute”~~terms, ~~provisions~~we ~~(requiring~~may anot ~~non-binding~~be ~~shareholder~~able ~~vote~~ to ~~approve~~expand ~~golden parachute arrangements for certain executive officers in connection with mergers~~ and ~~certain~~our ~~other~~ business ~~combinations)~~and/or ofour ~~the~~operating ~~Dodd-Frank~~results ~~Wall Street Reform~~ and ~~Consumer~~financial ~~Protection~~condition ~~Act~~may ofbe ~~2010;~~materially ~~and~~harmed.

•We ~~include~~intend ~~detailed~~to ~~compensation~~continue ~~discussion~~to make investments to support our business growth and ~~analysis~~may inrequire additional funds to respond to business opportunities, including developing new features and services or enhancing our ~~filings~~existing ~~under~~solutions, improving our operating infrastructure or acquiring complementary businesses and technologies. Our revolving facility, which provides for $80.0 million of borrowings (the ~~Exchange~~“Revolving ~~Act~~Facility”), may not be sufficient for our needs. Accordingly, we and/or ~~instead~~our parent entities (“the Ancestry Group”) may ~~provide~~engage in debt financing to secure additional funds; however, we may not be able to obtain additional financing on terms favorable to us, if at all. For example, our new credit facilities, which consists of a ~~reduced~~$733.2 ~~level~~million term loan facility and the Revolving Facility (the “New Credit Facilities”), and the indentures governing the 11% senior notes due 2020 (the “Notes”) and the senior unsecured payment-in-kind toggle notes due 2018 (the “PIK Notes”) contain restrictive covenants relating to capital-raising activities by us and our direct parent, Ancestry.com Holdings LLC (“Holdings LLC”), and other financial and operational matters. Any debt financing obtained by us or our parent entities in the Ancestry Group in the future could involve further restrictive covenants, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to grow our business and to respond to business challenges could be significantly impaired, and our business may be materially harmed. Please refer to Item 7, Liquidity and Capital Resources, of ~~disclosure~~Part ~~concerning~~II ~~executive~~for ~~compensation~~further information.

~~Although~~We weface ~~intend~~risks toassociated ~~rely~~with oncurrency ~~the~~exchange ~~exemptions~~rate ~~provided~~fluctuations inor ~~the~~other ~~JOBS~~changes ~~Act,~~in the ~~exact~~global ~~implications~~economy, ofwhich ~~the~~could ~~JOBS~~adversely ~~Act~~affect ~~for us are still subject to interpretations and guidance by the SEC and other regulatory agencies. In addition, as~~ our ~~business~~revenues ~~grows, we may no longer satisfy the conditions of an emerging growth company. We are currently evaluating~~ and ~~monitoring~~operating ~~developments with respect to these new rules, and we cannot assure you that we will be able to take advantage of all of the benefits from the JOBS Act~~results.

19For the year ended December 31, 2015, approximately 18% of our total revenues earned and approximately 6% of our total expenses incurred were in currencies other than the United States dollar, such as the British pound sterling, the Australian dollar, the Canadian dollar and the Euro. As a result, we are at risk for exchange rate fluctuations between such foreign currencies and the United States dollar, which could affect our revenues and results of operations. If the U.S. dollar strengthens against foreign currencies, the translation of these foreign currency denominated transactions will result in decreased revenues, operating expenses and net income. We may not be able to offset adverse foreign currency impact with increased subscription pricing or volume. We attempt to limit our exposure by paying our operating expenses incurred in foreign jurisdictions with revenues received in the applicable currency, but if we do not have enough local currency to pay all our expenses in that currency, we are exposed to currency exchange rate risk with respect to those expenses. Even if we were to implement hedging strategies to mitigate foreign currency risk, these strategies might not eliminate our exposure to foreign exchange rate fluctuations and would involve costs and risks of their own, such as ongoing management time and expertise, external costs to implement the strategies and potential accounting implications.

~~Table of Contents~~22

InTable ~~addition, as an “emerging growth company,” we have elected under the JOBS Act to delay adoption~~ of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Therefore, our financial statements may not be comparable to those of companies that comply with standards that are otherwise applicable to public companies. Contents

~~Risks~~In ~~Related~~addition, toour business may be affected by changes in the economy generally, including any resulting effect on consumer spending specifically. Our ~~Indebtedness~~services are discretionary purchases, and consumers may reduce their discretionary spending on our services during an economic downturn. As a result, our business, financial condition and results of operations may be significantly impacted by changes in the global economy generally.

We have amade ~~substantial~~significant ~~amount~~estimates ofand ~~debt,~~judgments ~~which~~in ~~exposes~~calculating usour toincome ~~various~~tax ~~risks~~provision and other tax assets and liabilities. If these estimates or judgments are incorrect, our operating results and financial condition may be materially affected.

We ~~have~~are ~~substantial~~subject ~~debt,~~to ~~totaling~~regular ~~approximately~~review ~~$884.5~~and ~~million~~audit asby ofboth ~~December 31,~~domestic ~~2014,~~and ~~consisting~~foreign tax authorities. Any adverse outcome of ~~approximately~~such ~~$584.5~~a ~~million~~review ~~under our~~or ~~Second~~audit ~~Amended~~could ~~Credit~~have ~~Facility~~a ~~which~~negative ~~matures~~effect inon ~~2018~~our operating results and ~~$300~~financial ~~million~~condition. inIn ~~Notes~~addition, ~~which~~the ~~mature~~determination inof ~~2020,~~our provision for income taxes and asother atax ~~result,~~assets weand ~~have~~liabilities requires significant ~~debt~~judgment, ~~service~~and ~~obligations.~~there Weare ~~also~~many ~~have~~transactions ~~the~~and ~~ability~~calculations towhere ~~borrow~~the upultimate totax ~~$50.0~~determination ~~million~~is ~~under~~uncertain at the ~~Revolving Facility~~present time. ~~Our~~Although ~~substantial~~we ~~level~~believe ofour ~~debt~~estimates and ~~debt~~judgments ~~service~~are ~~obligations~~reasonable, asthe ~~well~~ultimate astax ~~our~~outcome ~~intention~~may todiffer ~~pay~~from ~~distributions~~the toamounts recorded in our ~~parent~~financial ~~related~~statements toand ~~the~~may ~~PIK~~have ~~Notes~~a ~~could~~material ~~have~~effect ~~important~~on ~~consequences~~our ~~including:~~operating results and financial condition.

•We ~~making~~earn ita ~~more~~significant ~~difficult~~amount ~~for~~of usour tooperating ~~satisfy~~income ~~our~~from ~~obligations~~outside ~~with~~the ~~respect~~United States, and there have been proposals to ~~our~~change ~~debt,~~U.S. ~~which~~and ~~could~~foreign ~~result~~tax inlaws anthat ~~event~~would ofsignificantly ~~default~~impact ~~under~~how ~~the~~we ~~indenture~~are ~~governing~~taxed ~~the~~on ~~Notes~~foreign ~~and~~earnings. ~~the~~Although ~~agreements~~we ~~governing~~cannot ~~our~~predict ~~other~~whether ~~debt~~or in what form any proposed legislation may pass, ~~including~~if ~~the~~enacted ~~Second~~it ~~Amended~~could ~~Credit~~have ~~Facility;~~a material adverse impact on our future tax expense and cash flow.

•Expenses ~~limiting~~or ~~our~~liabilities ~~ability~~resulting tofrom ~~obtain~~litigation ~~additional~~could ~~financing~~materially onadversely ~~satisfactory~~affect ~~terms to fund~~ our ~~working~~results ~~capital~~of ~~requirements,~~operations ~~capital expenditures, acquisitions, investments, debt service requirements~~ and ~~other~~financial ~~general corporate requirements;~~condition.

•We ~~increasing~~have ~~our~~and ~~vulnerability~~may become party to ~~general~~various ~~economic~~legal ~~downturns~~proceedings and ~~industry~~other ~~conditions~~claims that arise in the ordinary course of business, ~~which~~or ~~could~~otherwise ~~place~~in usthe atfuture. aSuch ~~disadvantage~~matters ~~compared~~are subject to ~~our~~many ~~competitors~~uncertainties ~~that~~and outcomes are ~~less~~not ~~leveraged~~predictable with assurance. In addition, any such claims or litigation may be time-consuming and ~~can~~costly, ~~therefore~~divert ~~take~~management ~~advantage~~resources, require us to change our services or have other adverse effects on our business. While we cannot assure the ultimate outcome of ~~opportunities~~any legal proceeding or contingency in which we are or may become involved, we do not believe that any pending legal claim or proceeding arising in the ordinary course will be resolved in a manner that would have a material adverse effect on our ~~leverage~~business. ~~prevents~~However, if one or more of these legal matters resulted in an adverse monetary judgment against us, ~~from~~such ~~pursuing;~~a judgment could have a material adverse effect on our results of operations and financial condition. See also the risk factor “Intellectual property claims against us could be costly and result in the loss of significant rights related to, among other things, our websites, content indexes, and marketing and advertising activities” below. Please refer to Item 3 of Part I for more information about our current legal proceedings.

•Acquisitions, ~~potentially~~if ~~allowing~~any, ~~increases~~may innot ~~floating~~be ~~interest~~completed ~~rates~~within the expected timeframe or at all, and could prove difficult to ~~negatively~~integrate, ~~impact~~disrupt our ~~cash~~ongoing ~~flows;~~business or have a material adverse effect on our results of operations.

•As ~~having~~part of our ~~financing~~business ~~documents~~strategy, ~~place~~we ~~restrictions~~have onengaged and may in the ~~manner~~future engage in ~~which~~acquisitions of businesses to augment our organic or internal growth. While we ~~conduct~~have engaged in acquisitions in the past, our ~~business~~experience with integrating and managing acquired businesses is still limited. Acquisitions involve challenges and risks in negotiation, ~~including~~execution, ~~restrictions~~valuation and integration. Moreover, we may not be able to find suitable acquisition opportunities on terms that are acceptable to us or if we do, we may be delayed or unsuccessful in completing the transaction. We could assume the economic risks of such failed or unsuccessful acquisitions. Even if successfully negotiated, closed and integrated, certain acquisitions may not advance our ~~ability~~business strategy, may fall short of expected return-on-investment targets or may fail. In addition, we may be exposed to ~~pay~~unknown ~~dividends~~or unanticipated costs and liabilities, ~~make~~including ~~investments~~litigation, ~~incur~~against ~~additional~~the ~~debt~~companies we acquire. Any future acquisition could involve the aforementioned or numerous other risks and ~~sell~~we ~~assets;~~may not be successful in addressing these risks or any other problems encountered in connection with any attempted acquisitions. Our failure to address these risks or other problems could cause us to fail to realize the anticipated benefits of such acquisitions and could have a material adverse effect on our business, financial condition and results of operations.

• reducing the amount of our cash flows available to fund working capital requirements, capital expenditures, acquisitions, investments, other debt obligations and other general corporate requirements, because we will be required to use a substantial portion of our cash flows to service debt obligations.23

~~The~~Table ~~occurrence~~ of ~~any one of these events could have a material adverse effect on our business, financial condition, results of operations, prospects and ability to satisfy our obligations under our debt.~~ Contents

~~Our~~As ~~direct~~an ~~parent,~~“emerging ~~Holdings~~growth ~~LLC,~~company” ~~has~~under ~~issued~~the ~~$400.0~~JOBS ~~million~~Act, inwe ~~senior~~are ~~unsecured~~permitted ~~PIK Notes. In addition~~ to ~~servicing our debt~~, weand intend to ~~pay distributions to Holdings LLC related to the PIK Notes~~, ~~which~~rely ~~may~~on ~~exacerbate~~exemptions ~~the~~from ~~risks~~certain ~~associated~~disclosure ~~with our debt under the Second Amended Credit Facility and the Notes~~requirements.

~~Our~~As ~~direct~~an ~~parent,~~“emerging ~~Holdings~~growth ~~LLC,~~company” ~~has~~under ~~issued~~the aJumpstart ~~total~~Our ofBusiness ~~$400.0~~Startups ~~million~~Act of ~~9.625%/10.375%~~2012 ~~senior~~(the ~~unsecured~~“JOBS ~~PIK Notes~~Act”), ~~which~~we ~~mature~~are ~~on October 15~~permitted to, ~~2018.~~and ~~Holdings~~intend ~~LLC~~to, isrely aon ~~holding~~exemptions ~~company~~from ~~with~~certain nodisclosure ~~material~~requirements. ~~operations~~We ~~and~~are ~~limited~~an ~~assets~~emerging ~~other~~growth ~~than~~company ~~its~~until ~~ownership~~the earliest of: (i) the ~~membership~~last ~~interests~~day of ~~Ancestry.com~~the ~~LLC.~~fiscal ~~While~~year ~~covenants~~during inwhich ~~our~~we ~~Second~~had ~~Amended~~total ~~Credit~~annual ~~Facility~~gross ~~and~~revenues ~~the~~of ~~indenture governing~~$1 ~~the~~billion ~~Notes~~or ~~limit~~more, (ii) the ~~amount~~last day of ~~cash~~the ~~that~~fiscal weyear ~~are~~following ~~able~~the tofifth ~~distribute~~anniversary toof ~~our~~the ~~parent~~date ~~companies,~~of to the ~~extent~~first ~~cash~~sale isof ~~available,~~our wecommon ~~intend~~stock topursuant ~~pay distributions~~ to ~~Holdings~~an ~~LLC~~effective ~~related~~registration tostatement, (iii) the ~~PIK~~date ~~Notes.~~on ~~Paying~~which ~~cash~~we ~~distributions~~have, toduring ~~our~~the ~~parent will~~previous ~~reduce~~three-year ~~the~~period, ~~amount~~issued ofmore ~~cash~~than ~~available~~$1 tobillion ~~pay~~in ~~our~~non-convertible debt ~~obligations.~~or ~~Paying cash distributions to our parent could also compound~~ (iv) the ~~consequences~~date ~~and~~on ~~risks~~which ofwe ~~our~~are ~~debt~~deemed ~~and could have~~ a ~~material~~“large ~~adverse~~accelerated ~~effect~~issuer” onas ~~our~~defined ~~business,~~under ~~financial~~the ~~condition, results~~federal ofsecurities ~~operations,~~laws. ~~prospects~~For ~~and~~so ~~ability~~long toas ~~satisfy~~we ~~our~~remain ~~obligations~~an ~~under~~emerging ~~the~~growth ~~Second~~company, ~~Amended~~we ~~Credit~~will ~~Facility~~not ~~and~~be ~~the~~required ~~Notes.~~ to:

~~Despite~~• ~~current debt~~have ~~levels,~~an weauditor ~~and/or~~report ~~other~~on ~~members~~our ofinternal ~~the~~control ~~Ancestry~~over ~~Group~~financial ~~may~~reporting ~~still~~pursuant ~~be able~~ to ~~incur~~Section ~~substantially~~404(b) ~~more~~of ~~debt. This could further exacerbate~~ the ~~risks~~Sarbanes-Oxley ~~associated~~Act ~~with~~of ~~our~~2002, ~~substantial~~as ~~leverage.~~amended; and

We• ~~and/or~~comply ~~other~~with ~~members~~any ofrequirement ~~the~~that ~~Ancestry Group~~ may be ~~able~~adopted ~~to,~~by ~~and may, incur substantial additional debt, including secured debt, in~~ the ~~future.~~ ~~Although~~Public ~~our~~Company ~~Second~~Accounting ~~Amended~~Oversight ~~Credit~~Board ~~Facility~~(“PCAOB”) ~~and~~regarding ~~the~~mandatory ~~indentures~~audit ~~governing~~firm ~~the~~rotation ~~Notes~~or ~~and~~a ~~the~~supplement ~~PIK~~to ~~Notes contain restrictions on~~ the ~~incurrence~~auditor’s ofreport providing additional ~~debt~~information ~~and~~about the ~~ability~~audit ~~to make payments to related entities to fund their debt obligations, these restrictions are subject to a number of significant qualifications~~ and ~~exceptions, and any debt we incur in compliance with these restrictions could be substantial. If we incur additional debt on top of our current debt levels, this would exacerbate~~ the ~~risks~~financial ~~related~~statements to(auditor ~~our~~discussion ~~substantial debt levels. Furthermore, as we increase our debt level~~ and~~/or~~ ~~incur~~analysis); ~~indebtedness that is contractually or structurally subordinated to our other indebtedness, we may be required to pay higher interest rates on additional debt, which would increase our cost of capital~~ and ~~could have a material adverse effect on our financial condition and results of operations.~~

~~Our~~• ~~debt~~submit ~~agreements~~certain ~~include~~executive ~~covenants~~compensation ~~that~~matters ~~restrict~~to ~~our~~shareholders ~~ability~~advisory votes pursuant to ~~operate~~the ~~our business,~~“say on frequency” and ~~this~~“say ~~may~~on ~~impede~~pay” ~~our~~provisions ~~ability~~(requiring a non-binding shareholder vote to ~~respond~~approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a non-binding shareholder vote to ~~changes~~approve golden parachute arrangements for certain executive officers in ~~our~~connection with mergers and certain other business orcombinations) toof ~~take~~the ~~certain~~Dodd-Frank ~~important~~Wall ~~actions.~~Street Reform and Consumer Protection Act of 2010; and

~~Our~~• ~~Second Amended~~include ~~Credit~~detailed ~~Facility~~compensation ~~and~~discussion ~~the indentures governing the Notes~~ and ~~PIK~~analysis ~~Notes~~in ~~each~~our ~~contain,~~filings ~~and~~under the ~~terms~~Exchange ~~of any of our future debt would likely contain~~Act, ~~a number of restrictive covenants that impose significant operating~~ and ~~financial~~instead ~~restrictions, including restrictions on our ability to engage in acts that~~ may beprovide ina ~~our~~reduced ~~best~~level ~~long-term~~of ~~interests.~~disclosure ~~For~~concerning ~~example,~~executive ~~the credit agreement governing our Second Amended Credit Facility and the indentures governing the Notes and PIK Notes restrict our and our subsidiaries’ ability to:~~ compensation.

•Although ~~incur~~we ~~additional~~intend ~~debt;~~to rely on the exemptions provided in the JOBS Act, the exact implications of the JOBS Act for us are still subject to interpretations and guidance by the SEC and other regulatory agencies. In addition, as our business grows, we may no longer satisfy the conditions of an emerging growth company. We are currently evaluating and monitoring developments with respect to these new rules, and we cannot assure you that we will be able to take advantage of all of the benefits from the JOBS Act.

20In addition, as an “emerging growth company,” we have elected under the JOBS Act to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Therefore, our financial statements may not be comparable to those of companies that comply with standards that are otherwise applicable to public companies.

~~Table~~Risks ofRelated ~~Contents~~to Our Indebtedness

•We ~~pay~~have ~~dividends~~a onsubstantial ~~our~~amount ~~capital~~of ~~stock~~debt, ~~and~~which ~~make~~exposes ~~other~~us ~~restricted~~to ~~payments;~~various risks.

•We ~~make~~have ~~investments~~substantial debt, totaling approximately $1.0 billion as of December 31, 2015, consisting of approximately $733.2 million under our New Credit Facilities and ~~acquisitions;~~$300.0 million in Notes and as a result, we have significant debt service obligations. We also have the ability to borrow up to $80.0 million under the Revolving Facility. Our substantial level of debt and debt service obligations as well as our intention to pay distributions to our parent related to the PIK Notes could have important consequences including:

• ~~engage~~making init ~~transactions~~more difficult for us to satisfy our obligations with respect to our ~~affiliates~~debt, which could result in an event of default under the indenture governing the Notes and the agreements governing our other debt, including the New Credit Facilities;

• ~~sell~~limiting ~~assets~~our ability to obtain additional financing on satisfactory terms to fund our working capital requirements, capital expenditures, acquisitions, investments, debt service requirements and other general corporate requirements;

• ~~make~~increasing ~~acquisitions~~our orvulnerability ~~merge;~~to general economic downturns and industry conditions, which could place us at a disadvantage compared to our competitors that are less leveraged and can therefore take advantage of opportunities that our leverage prevents us from pursuing;

• ~~create~~potentially ~~liens.~~allowing increases in floating interest rates to negatively impact our cash flows;

In• ~~addition,~~having our ~~Second~~financing ~~Amended~~documents ~~Credit~~place ~~Facility~~restrictions ~~requires~~on ~~us to comply with a total net secured leverage covenant tested both quarterly and upon drawdown when~~ the ~~outstanding~~manner ~~loans~~in ~~and~~which ~~letters~~we ofconduct ~~credit under~~ our ~~Revolving~~business, ~~Facility~~including ~~exceed $15.0 million. These~~ restrictions ~~could~~on ~~limit~~ our ability to ~~obtain~~pay ~~future financings~~dividends, make ~~needed capital expenditures~~investments, ~~respond~~incur toadditional debt and ~~withstand~~sell ~~future~~assets; downturns in our business or the economy in general or otherwise conduct corporate activities that may be necessary or desirable. We may also be prevented from taking advantage of business opportunities that arise because of limitations imposed on us by these restrictive covenants. In addition, it may be costly or time-consuming for us to obtain any necessary waiver or amendment of these covenants, or we may not be able to obtain a waiver or amendment on any terms. and

A breach of any of these covenants could result in a default under our Second Amended Credit Facility or the Notes, as the case may be, that would allow lenders or noteholders to declare our outstanding debt immediately due and payable. If we are unable to pay those amounts because we do not have sufficient cash on hand or are unable to obtain alternative financing on acceptable terms, the lenders or noteholders could initiate a bankruptcy proceeding or, in the case of our Second Amended Credit Facility, proceed against any assets that serve as collateral to secure such debt. 24

WeTable ~~will require a significant amount~~ of ~~cash to service our debt, and our ability to generate cash depends on many factors beyond our control.~~ Contents

~~Our~~• ~~ability~~reducing tothe ~~satisfy~~amount ~~our~~of ~~debt obligations will primarily depend upon~~ our ~~future~~cash ~~operating~~flows ~~performance~~available ~~and decisions we make with regards~~ to ~~operating~~fund ~~our~~working ~~business.~~capital Asrequirements, acapital ~~result~~expenditures, ~~prevailing~~acquisitions, ~~economic~~investments, ~~conditions~~other ~~and~~debt ~~financial,~~obligations ~~business~~ and other ~~factors,~~general ~~many~~corporate ofrequirements, ~~which~~because ~~are~~we ~~beyond~~will ~~our~~be ~~control,~~required ~~will~~to ~~affect~~use ~~our~~a ~~ability~~substantial toportion ~~make~~of ~~these~~our ~~payments~~cash flows to ~~satisfy~~service ~~our~~ debt obligations.

IfThe weoccurrence doof ~~not~~any ~~generate~~one ~~cash~~of ~~flow~~these ~~from~~events ~~operations~~could ~~sufficient to pay our debt service obligations, we may~~ have toa ~~undertake~~material ~~alternative~~adverse ~~financing plans,~~effect ~~such~~on ~~as refinancing or restructuring~~ our ~~debt~~business, selling assets, reducing or delaying capital investments or seeking to raise additional capital. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition ~~at that time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants~~, ~~which~~results ~~could further restrict our business operations. The terms~~ of ~~existing or future debt instruments may restrict us from adopting some of these alternatives~~operations, ~~which~~prospects inand ~~turn~~ability ~~could exacerbate the effects of any failure~~ to ~~generate sufficient cash flow to~~ satisfy our ~~debt service~~ obligations. Inunder ~~addition, any failure to make payments of interest and principal on~~ our ~~outstanding~~ debt on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional debt on acceptable terms and may materially adversely affect the price of the Notes. Furthermore, there currently is not a well-established secondary market for our assets. The lack of a secondary market may make the sale of our assets challenging, and the sale of assets should not be viewed as a significant source of funding.

Our ~~inability~~direct toparent, ~~generate~~Holdings ~~sufficient~~LLC, ~~cash~~has ~~flow~~outstanding to$390.2 ~~satisfy~~million ~~our~~in ~~debt~~senior ~~service~~unsecured ~~obligations~~PIK orNotes. In addition to ~~refinance~~servicing our ~~obligations on~~debt, ~~commercially~~we ~~reasonable~~intend ~~terms~~to ormake atpayments ~~all,~~to ~~would~~Holdings ~~have~~LLC arelated ~~material~~to ~~adverse~~the ~~effect~~PIK ~~on our business~~Notes, ~~financial~~which ~~condition and results of operations and~~ may ~~restrict~~exacerbate ~~our~~the ~~current~~risks ~~and~~associated ~~future~~with ~~operations, particularly~~ our ~~ability~~debt tounder ~~respond~~the toNew ~~business changes~~Credit orFacilities toand ~~take~~the ~~certain actions, as well as on our ability to satisfy our obligations~~Notes.

~~Variable~~Our ~~rate~~direct ~~indebtedness~~parent, ~~subjects~~Holdings usLLC, tohas ~~interest~~outstanding ~~rate risk~~a total of $390.2 million of 9.625%/10.375% senior unsecured PIK Notes, which mature on October 15, 2018. Holdings LLC is a holding company with no material operations and limited assets other than its ownership of the membership interests of Ancestry.com LLC. While covenants in our New Credit Facilities and the indenture governing the Notes limit the amount of cash that we are able to distribute to our parent companies, to the extent cash is available, we intend to make payments to Holdings LLC related to the PIK Notes. Paying cash to our parent for the PIK Notes will reduce the amount of cash available to pay our debt obligations and could ~~cause~~also compound the consequences and risks of our debt ~~service~~and ~~obligations~~could have a material adverse effect on our business, financial condition, results of operations, prospects and ability to ~~increase~~satisfy ~~significantly~~our obligations under the New Credit Facilities and the Notes.

~~Certain~~Despite ofcurrent ~~our~~debt ~~borrowings~~levels, ~~primarily~~we ~~borrowings under~~and/or ~~our~~other ~~Second~~members ~~Amended Credit Facility, will be at variable rates~~ of ~~interest and expose us to interest rate risk. As such, our cash flows are sensitive to movements in interest rates. There are many economic factors outside our control that have in~~ the ~~past,~~Ancestry ~~and~~Group may instill ~~the~~be ~~future,~~able ~~impact rates of interest, including publicly announced indices that underlie the interest obligations related~~ to aincur ~~certain~~substantially ~~portion~~more ~~of our~~ debt. ~~The~~This ~~condition~~could offurther ~~the~~exacerbate ~~financial markets and prevailing interest rates have fluctuated in~~ the ~~past~~risks ~~and~~associated ~~are~~with likely to fluctuate in the future. Factors that impact interest rates include domestic or international governmental monetary policies, inflation, recession, changes in unemployment, the money supply, international disorder and instability in domestic and foreign financial markets. If interest rates increase, our ~~debt~~substantial ~~service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our cash flows would decrease~~leverage. ~~Such increases in interest rates could have a material adverse effect on our financial condition and results of operations.~~

21We and/or other members of the Ancestry Group may be able to, and may, incur substantial additional debt, including secured debt, in the future. Although our New Credit Facilities and the indentures governing the Notes and the PIK Notes contain restrictions on the incurrence of additional debt and the ability to make payments to related entities to fund their debt obligations, these restrictions are subject to a number of significant qualifications and exceptions, and any debt we incur in compliance with these restrictions could be substantial. If we incur additional debt on top of our current debt levels, this would exacerbate the risks related to our substantial debt levels. Furthermore, as we increase our debt level and/or incur indebtedness that is contractually or structurally subordinated to our other indebtedness, we may be required to pay higher interest rates on additional debt, which would increase our cost of capital and could have a material adverse effect on our financial condition and results of operations.

~~Table~~Our ofdebt ~~Contents~~agreements include covenants that restrict our ability to operate our business, and this may impede our ability to respond to changes in our business or to take certain important actions.

~~The~~Our ~~Notes~~New ~~are~~Credit ~~not~~Facilities ~~secured~~and bythe ~~our~~indentures ~~assets,~~governing ~~which~~the ~~means~~Notes and PIK Notes each contain, and the ~~lenders~~terms ~~under~~of any of our ~~secured~~future debt would likely contain, a number of restrictive covenants that impose significant operating and financial restrictions, including restrictions on our ~~Second~~ability ~~Amended~~to ~~Credit~~engage ~~Facility,~~in ~~will~~acts ~~have~~that ~~priority~~may ~~over~~be ~~holders~~in ofour ~~the~~best ~~Notes~~long-term tointerests. For example, the ~~extent~~credit ofagreement governing our New Credit Facilities and the ~~value~~indentures ofgoverning the ~~assets~~Notes ~~securing~~and ~~that~~PIK ~~debt.~~Notes restrict our and our subsidiaries’ ability to:

~~The~~• Notes and the related guarantees are unsecured. This means they are effectively subordinated in right of payment to all of our and the guarantors’ secured debt, including our Second Amended Credit Facility, to the extent of the value of the assets securing that debt. Loans under our Second Amended Credit Facility are secured by substantially all of our and the guarantors’ assets (subject to certain exceptions). As of December 31, 2014, we had approximately $452.5 million and $132.0 million outstanding under the Amended Term B-1 Loan and Amended Term B-2 Loan, respectively; and $50.0 million of availability under the Revolving Facility. Furthermore, the indenture governing the Notes allows us to incur additional ~~secured~~ debt. See Note 7 in our Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facility” for a further description of the terms of the Second Amended Credit Facility. ;

If• wepay ~~become~~dividends ~~insolvent~~on ~~or are liquidated, or if payment under~~ our ~~Second~~capital ~~Amended~~stock ~~Credit Facility or any other secured debt is accelerated, the lenders under our Second Amended Credit Facility~~ and ~~holders~~make of other ~~secured~~restricted debt will be entitled to exercise the remedies available to secured lenders under applicable law (in addition to any remedies that may be available under documents pertaining to our Second Amended Credit Facility or other senior debt). For example, the secured lenders could foreclose upon and sell assets in which they have been granted a security interest to the exclusion of the holders of the Notes, even if an event of default exists under the indenture governing the Notes at that time. Any funds generated by the sale of those assets would be used first to pay amounts owing under secured debt, and any remaining funds, whether from those assets or any unsecured assets, may be insufficient to pay obligations owing under the Notes. payments;

~~The~~• ~~Notes~~make ~~are~~investments ~~structurally subordinated to the debt~~ and ~~other liabilities of our non-guarantor subsidiaries, including certain of our foreign subsidiaries.~~ acquisitions;

~~Certain~~• ofengage our existing or future foreign subsidiaries do not guarantee the Notes, and only the Company and all of the Company’s direct and indirect existing and future restricted subsidiaries (except excluded subsidiaries) that guarantee any indebtedness of Ancestry.com Inc. or any guarantor, or incur indebtedness under a credit facility, in ~~each~~transactions ~~case,~~with ~~subject to certain exceptions, guarantee the Notes. This means the Notes are structurally subordinated to the debt and other liabilities of these non-guarantor subsidiaries. As of December 31, 2014,~~ our non-guarantor subsidiaries had no debt outstanding (excluding intercompany debt). Our non-guarantor subsidiaries may, in the future, incur substantial additional liabilities, including debt. Furthermore, we may, under certain circumstances described in the indenture governing the Notes, designate subsidiaries to be unrestricted subsidiaries, and any subsidiary that is designated as unrestricted will not guarantee the Notes. In the event of our non-guarantor subsidiaries’ bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding, the assets of those non-guarantor subsidiaries will not be available to pay obligations on the Notes until after all of the liabilities (including trade payables) of those non-guarantor subsidiaries have been paid in full. affiliates;

We• ~~may~~sell ~~not have the ability to raise the funds necessary to finance the change of control offer required by the indenture governing the Notes.~~ assets;

~~Upon~~• the occurrence of certain change of control events, we will be required to offer to repurchase all of the Notes. A change of control would also give the holders of the Notes the right to require us to repurchase those Notes. Our Second Amended Credit Facility provides that certain change of control events (including a change of control as defined in the indenture governing the Notes) constitute a default. Any future credit agreement or other debt agreement would likely contain similar provisions. If we experience a change of control that triggers a default under our Second Amended Credit Facility, we could seek a waiver of that default or seek to refinance those facilities. In the event we do not obtain a waiver or complete a refinancing, the default could result in amounts outstanding under those facilities being declared immediately due and payable. In the event we experience a change of control that requires us to repurchase the Notes, we may not have sufficient financial resources to satisfy all of our obligations under our Second Amended Credit Facility and the Notes. A failure to make aacquisitions ~~required change of control offer~~ or tomerge; ~~pay a change of control purchase price when due would result in a default under the indenture governing the Notes.~~ and

In• ~~addition,~~create the change of control and other covenants in the indenture governing the Notes do not cover all corporate reorganizations, mergers or similar transactions and may not provide holders with protection in a transaction, including one that would substantially increase our leverageliens.

~~The~~In ~~ability~~addition, ofour ~~holders~~New ofCredit ~~the~~Facilities ~~Notes to~~ require us to ~~repurchase~~comply with a financial covenant prohibiting the ~~Notes~~total asnet afirst ~~result~~lien leverage ratio from being greater than 4.00, which will be tested quarterly when the principal amount of aall ~~disposition~~revolving loans, swingline loans, and letter of ~~“substantially~~credit ~~all”~~(in excess of $10.0 million) exceeds 30% of total commitments under the Revolving Facility. These restrictions could limit our ~~assets~~ability ~~or a~~to ~~change~~obtain future financings, make needed capital expenditures, respond to and withstand future downturns in our business or the ~~composition~~economy in general or otherwise conduct corporate activities that may be necessary or desirable. We may also be prevented from taking advantage of ~~our~~business ~~Operating~~opportunities ~~Committee~~that isarise ~~uncertain~~because of limitations imposed on us by these restrictive covenants. In addition, it may be costly or time-consuming for us to obtain any necessary waiver or amendment of these covenants, or we may not be able to obtain a waiver or amendment on any terms.

The definition of change of control in the indenture governing the Notes includes the sale, assignment, lease, conveyance or other disposition of “substantially all” of our and our subsidiaries’ assets, taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase. Accordingly, the ability of a holder of the Notes to require us to repurchase such Notes as a result of a sale, assignment, lease, conveyance or other disposition of less than all of our and our subsidiaries’ assets, taken as a whole, to another person or group is uncertain. In addition, a recent Delaware Chancery Court decision raised questions about the enforceability of provisions that are similar to those in the indenture governing the Notes, related to the triggering of a change of control as a result of a change in the composition of a board of directors or similar governing body. Accordingly, the ability of a holder of Notes to require us to repurchase Notes as a result of a change in the composition of the members of our Operating Committee is uncertain. 25

22Table of Contents

~~Table~~A breach of ~~Contents~~any of these covenants could result in a default under our New Credit Facilities or the Notes, as the case may be, that would allow lenders or noteholders to declare our outstanding debt immediately due and payable. If we are unable to pay those amounts because we do not have sufficient cash on hand or are unable to obtain alternative financing on acceptable terms, the lenders or noteholders could initiate a bankruptcy proceeding or, in the case of our New Credit Facilities, proceed against any assets that serve as collateral to secure such debt.

~~Federal~~We ~~and~~will ~~state~~require ~~statutes~~a ~~allow~~significant ~~courts,~~amount ~~under~~of ~~specific~~cash ~~circumstances,~~ to ~~void~~service ~~guarantees~~our ~~of the Notes. In such event~~debt, ~~holders~~and ofour ~~Notes~~ability ~~would be structurally subordinated~~ to ~~creditors~~generate ofcash ~~the~~depends ~~issuer~~on ofmany ~~the~~factors ~~voided~~beyond ~~guarantee.~~our control.

~~Federal~~Our ~~and state~~ability ~~statutes allow courts, under specific circumstances,~~ to ~~void~~satisfy ~~guarantees,~~our ~~subordinate~~debt ~~claims~~obligations ~~under~~will ~~the~~primarily ~~guarantees~~depend toupon ~~the~~our ~~guarantor’s~~future ~~other~~operating ~~debt~~performance orand ~~take~~decisions ~~other~~we ~~action~~make ~~detrimental~~with regards to ~~holders~~operating ofour ~~the~~business. ~~guarantees~~As ofa ~~the~~result, ~~Notes.~~prevailing ~~Under~~economic ~~the~~conditions ~~federal bankruptcy law~~ and ~~comparable~~financial, ~~provisions~~business ofand ~~state~~other ~~fraudulent transfer laws~~factors, ~~the~~many ~~guarantees~~of ~~made~~which byare ~~the~~beyond ~~guarantors~~our ~~could~~control, bewill ~~voided~~affect orour ~~subordinated~~ability to ~~other~~make ~~debt~~these ~~if,~~payments ~~among~~to ~~other~~satisfy ~~things:~~our debt obligations.

•If ~~any~~we ~~guarantor~~do ~~issued~~not ~~the~~generate ~~guarantee~~cash flows from operations sufficient to ~~delay~~pay our debt service obligations, ~~hinder~~we may have to undertake alternative financing plans, such as refinancing or ~~defraud~~restructuring ~~present~~our debt, selling assets, reducing or ~~future~~delaying ~~creditors;~~capital investments or seeking to raise additional capital. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at that time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. For example, as a part of the restructuring of our term loans in August 2015, the interest rates under our New Credit Facilities increased. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives, which in turn could exacerbate the effects of any failure to generate sufficient cash flow to satisfy our debt service obligations. In addition, any failure to make payments of interest and principal on our outstanding debt on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional debt on acceptable terms and may materially adversely affect the price of the Notes. Furthermore, there currently is not a well-established secondary market for our assets. The lack of a secondary market may make the sale of our assets challenging, and the sale of assets should not be viewed as a significant source of funding.

•Our ~~any~~inability ~~guarantor~~to ~~received~~generate ~~less~~sufficient ~~than~~cash ~~reasonably~~flow ~~equivalent~~to ~~value~~satisfy our debt service obligations or ~~fair~~to ~~consideration~~refinance ~~for~~our ~~issuing~~obligations ~~such~~on ~~guarantee~~commercially reasonable terms or at all, would have a material adverse effect on our business, financial condition and results of operations and may restrict our current and future operations, atparticularly ~~the~~our ~~time~~ability itto ~~issued~~respond ~~its~~to ~~guarantee~~business changes or to take certain actions, ~~any~~as ~~guarantor:~~well as on our ability to satisfy our obligations.

•Variable-rate ~~was~~indebtedness ~~insolvent~~subjects orus ~~rendered~~to ~~insolvent~~interest byrate ~~reason~~risk, ofwhich ~~such~~could ~~incurrence;~~cause our debt service obligations to increase significantly.

•Certain ~~was~~of ~~engaged~~our borrowings, primarily borrowings under our New Credit Facilities, will be at variable rates of interest and expose us to interest rate risk. As such, our cash flows are sensitive to movements in interest rates. There are many economic factors outside our control that have in the past, and may in the future, impact rates of interest, including publicly announced indices that underlie the interest obligations related to a ~~business~~certain portion of our debt. The condition of the financial markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future. Factors that impact interest rates include domestic or ~~transaction~~international ~~for~~governmental ~~which~~monetary ~~such~~policies, ~~guarantor’s~~inflation, ~~remaining~~recession, ~~unencumbered~~changes ~~assets~~in ~~constituted~~unemployment, ~~unreasonably~~the ~~small~~money ~~capital;~~supply, international disorder and instability in domestic and foreign financial markets. If interest rates increase, our debt service obligations on the variable-rate indebtedness would increase even though the amount borrowed remained the same, and our cash flows would decrease. Such increases in interest rates could have a material adverse effect on our financial condition and results of operations.

•The ~~intended~~Notes toare ~~incur~~not secured by our assets, orwhich ~~believed~~means ~~that~~the itlenders ~~would~~under ~~incur~~any of our secured debt, ~~debts~~including ~~beyond~~our ~~its~~New ~~ability~~Credit Facilities, will have priority over holders of the Notes to ~~pay~~the ~~such~~extent ~~debts~~of asthe ~~they~~value ~~mature;~~of orthe assets securing that debt.

•The ~~was~~Notes aand ~~defendant~~the related guarantees are unsecured. This means they are effectively subordinated in anright ~~action~~of ~~for~~payment ~~money~~to ~~damages~~all of our and the guarantors’ secured debt, orincluding our New Credit Facilities, to the extent of the value of the assets securing that debt. Loans under our New Credit Facilities are secured by substantially all of our and the guarantors’ assets (subject to certain exceptions). As of December 31, 2015, we had aapproximately ~~judgment~~$733.2 ~~for~~million ~~money~~outstanding ~~damages~~under ~~docketed~~the ~~against~~New itTerm ifLoan and $80.0 million of availability under the Revolving Facility. Furthermore, the indenture governing the Notes allows us to incur additional secured debt. See Note 8 in ~~either~~our ~~case,~~Consolidated ~~after~~Financial ~~final~~Statements ~~judgment,~~and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facility” for a further description of the ~~judgment~~terms isof ~~unsatisfied~~the New Credit Facilities.

Among other things, a legal challenge of a guarantee on fraudulent conveyance grounds may focus on the benefits, if any, realized by the guarantor as a result of our issuance of the Notes. The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if, at the time it incurred the debt, 26

•Table ~~the sum~~ of ~~its debts is greater than the fair value of all of its assets;~~Contents

•If we become insolvent or are liquidated, or if payment under our New Credit Facilities or any other secured debt is accelerated, the ~~present~~lenders ~~fair~~under ~~saleable~~our ~~value~~New Credit Facilities and holders of ~~its~~other ~~assets~~secured ~~was~~debt ~~less~~will ~~than~~be entitled to exercise the ~~amount~~remedies available to secured lenders under applicable law (in addition to any remedies that ~~would~~may be ~~required~~available inunder ~~order~~documents pertaining to ~~pay~~our ~~its~~New ~~probable~~Credit ~~liability~~Facilities onor ~~its~~other ~~existing~~senior ~~debts~~debt). ~~and~~For ~~liabilities~~example, ~~including~~the ~~contingent~~secured ~~liabilities,~~lenders ascould foreclose upon and sell assets in which they ~~become~~have ~~absolute~~been granted a security interest to the exclusion of the holders of the Notes, even if an event of default exists under the indenture governing the Notes at that time. Any funds generated by the sale of those assets would be used first to pay amounts owing under secured debt, and ~~mature;~~any remaining funds, whether from those assets or any unsecured assets, may be insufficient to pay obligations owing under the Notes.

•The itNotes ~~could~~are ~~not~~structurally ~~pay~~subordinated orto isthe ~~generally~~debt ~~not~~and ~~paying~~other ~~its~~liabilities ~~debts~~of asour ~~they~~non-guarantor ~~become~~subsidiaries, ~~due~~including certain of our foreign subsidiaries.

~~There~~Certain isof noour ~~way~~existing ~~to predict~~or ~~with~~future ~~certainty~~foreign ~~what~~subsidiaries ~~standards~~do anot ~~court~~guarantee ~~would~~the ~~apply~~Notes, toand ~~determine~~only ~~whether a guarantor was solvent at the relevant time~~Ancestry.com ItLLC isand ~~possible~~all ~~that~~its adirect ~~court~~and ~~could~~indirect ~~view~~existing ~~the~~and ~~issuance~~future ofrestricted ~~guarantees~~subsidiaries as(except aexcluded ~~fraudulent~~subsidiaries) ~~conveyance. To the extent~~ that a guarantee ~~were~~ toany beindebtedness ~~voided~~of asAncestry.com aInc. ~~fraudulent conveyance~~ or ~~were to be held unenforceable for~~ any ~~other reason~~guarantor, ~~holders~~or ofincur ~~the~~indebtedness ~~Notes~~under ~~would~~a ~~cease~~credit tofacility, ~~have any claim~~ in ~~respect~~each ofcase, ~~the~~subject ~~guarantor~~to ~~and~~certain ~~would~~exceptions, beguarantee ~~creditors solely of ours and of~~ the ~~guarantors whose guarantees had not been avoided or held unenforceable~~Notes. InThis ~~this~~means ~~event,~~ the ~~claims of the holders of the~~ Notes ~~against~~are ~~the~~structurally ~~issuer~~subordinated ~~of an invalid guarantee would be subject~~ to the ~~prior~~debt ~~payment~~and ~~in full of all~~ other liabilities of ~~the~~these non-guarantor ~~thereunder~~ subsidiaries. ~~After~~As ~~providing~~of ~~for~~December 31, ~~all prior claims~~2015, ~~there~~our ~~may~~non-guarantor ~~not~~subsidiaries behad ~~sufficient~~no ~~assets~~debt tooutstanding ~~satisfy~~(excluding ~~the~~intercompany ~~claims~~debt). ofOur ~~the~~non-guarantor ~~holders~~subsidiaries ofmay, ~~the~~in ~~Notes relating to~~ the ~~voided~~future, ~~guarantees.~~incur ~~Although~~substantial ~~each~~additional ~~guarantee~~liabilities, ~~entered~~including ~~into~~debt. byFurthermore, awe ~~guarantor~~may, ~~will~~under ~~contain~~certain acircumstances ~~provision intended~~described toin ~~limit that guarantor’s liability to~~ the ~~maximum~~indenture ~~amount~~governing ~~that it could incur without causing~~ the ~~incurrence~~Notes, ofdesignate ~~obligations~~subsidiaries ~~under its guarantee~~ to be aunrestricted ~~fraudulent transfer~~subsidiaries, ~~this~~and ~~provision~~any ~~may~~subsidiary ~~not be effective to protect those guarantees from being voided under fraudulent transfer law, or may reduce~~ that ~~guarantor’s~~is ~~obligation~~designated toas anunrestricted ~~amount~~will ~~that~~not ~~effectively makes its~~ guarantee ~~worthless~~the Notes. In athe ~~Florida~~event ~~bankruptcy case, this kind~~ of ~~provision~~our ~~was~~non-guarantor ~~found~~subsidiaries’ tobankruptcy, ~~be unenforceable~~insolvency, ~~and~~liquidation, ~~as a result~~dissolution, ~~the~~reorganization ~~subsidiary~~or ~~guarantees~~similar inproceeding, ~~that~~the ~~case~~assets ~~were~~of ~~found~~those tonon-guarantor besubsidiaries ~~fraudulent~~will ~~conveyances. We do~~ not ~~know if that case will~~ be ~~followed~~available ifto ~~there~~pay isobligations ~~litigation~~ on ~~this point under~~ the ~~indenture for the~~ Notes. ~~However,~~until ifafter itall ~~is followed,~~of the ~~risk~~liabilities ~~that~~(including ~~the~~trade ~~guarantees~~payables) ~~will~~of bethose ~~found~~non-guarantor tosubsidiaries behave ~~fraudulent~~been ~~conveyances~~paid ~~will~~in ~~be significantly increased~~full.

We ~~are~~may ~~owned~~not ~~and~~have ~~controlled~~the ~~by funds~~ability ~~advised~~to byraise ~~Permira, and~~ the funds’ ~~interests~~necessary asto ~~equity~~finance ~~holders~~the ~~may~~change ~~conflict~~of ~~with~~control offer required by the ~~interests~~indenture ofgoverning ~~note~~the ~~holders~~Notes.

WeUpon ~~are indirectly~~the ~~controlled~~occurrence byof ~~funds~~certain ~~advised~~change byof ~~Permira~~control events, ~~who~~we ~~have~~will ~~the~~be ~~ability~~required to ~~control~~offer ~~our~~to ~~policies~~repurchase ~~and~~all ~~operations~~of the Notes. ~~The~~A ~~interests~~change of ~~the~~control ~~funds~~would ~~may~~also ~~not~~give inthe ~~all~~holders ~~cases~~of bethe ~~aligned~~Notes ~~with~~ the ~~interests~~right ofto ~~note~~require ~~holders.~~us ~~For~~to ~~example,~~repurchase ifthose weNotes. ~~encounter~~Our ~~financial difficulties~~New orCredit ~~are~~Facilities ~~unable~~provides tothat ~~pay~~certain ~~our~~change ~~debts~~of ascontrol ~~they~~events ~~mature,~~(including ~~the~~a ~~interests~~change of ~~our~~control ~~equity~~as ~~holders~~defined ~~might~~in ~~conflict~~the ~~with~~indenture governing the ~~interests~~Notes) ofconstitute ~~note~~a ~~holders~~default. InAny ~~addition,~~future ~~our~~credit ~~equity~~agreement ~~holders~~or ~~may~~other ~~have~~debt anagreement ~~interest~~would inlikely ~~pursuing~~contain ~~acquisitions,~~similar ~~divestitures, financings~~provisions. orIf ~~other~~we ~~transactions~~experience a change of control that, intriggers ~~their~~a ~~judgment,~~default ~~could~~under ~~enhance~~our ~~their~~New ~~equity~~Credit ~~investments~~Facilities, ~~even~~we ~~when~~could ~~those~~seek ~~transactions~~a ~~involve~~waiver ~~risks~~of that default or seek to ~~holders~~refinance ofthose facilities. In the ~~Notes.~~event ~~Furthermore,~~we ~~funds~~do ~~advised~~not byobtain ~~Permira~~a ~~may~~waiver inor complete a refinancing, the ~~future~~default ~~own~~could ~~businesses~~result ~~that directly~~in oramounts ~~indirectly~~outstanding ~~compete~~under ~~with~~those usfacilities being declared immediately due and payable. ~~Funds~~In ~~advised~~the byevent ~~Permira~~we ~~also~~experience ~~may~~a ~~pursue~~change ~~acquisition~~of ~~opportunities~~control that requires us to repurchase the Notes, we may benot ~~complementary~~have sufficient financial resources to satisfy all of our ~~business,~~obligations under our New Credit Facilities and asthe Notes. A failure to make a required change of control offer or to pay a change of control purchase price when due would result, ~~those~~in ~~acquisition~~a ~~opportunities~~default ~~may~~under ~~not~~the beindenture ~~available~~governing tothe usNotes.

23In addition, the change of control and other covenants in the indenture governing the Notes do not cover all corporate reorganizations, mergers or similar transactions and may not provide holders with protection in a transaction, including one that would substantially increase our leverage.

~~Table~~The ability of ~~Contents~~holders of the Notes to require us to repurchase the Notes as a result of a disposition of “substantially all” of our assets or a change in the composition of our Operating Committee is uncertain.

AThe ~~lowering~~definition of change of control in the indenture governing the Notes includes the sale, assignment, lease, conveyance or ~~withdrawal~~other disposition of “substantially all” of our and our subsidiaries’ assets, taken as a whole. Although there is a limited body of case law interpreting the ~~ratings~~phrase ~~assigned~~“substantially all,” there is no precise established definition of the phrase. Accordingly, the ability of a holder of the Notes to ~~our~~require ~~debt~~us ~~securities~~to byrepurchase ~~rating~~such ~~agencies~~Notes ~~may~~as ~~impair~~a result of a sale, assignment, lease, conveyance or other disposition of less than all of our ~~ability~~ and our subsidiaries’ assets, taken as a whole, to ~~obtain~~another ~~future~~person ~~borrowings~~or atgroup is uncertain. In addition, a recent Delaware Chancery Court decision raised questions about the enforceability of provisions that are similar ~~costs~~to ~~and~~those ~~reduce~~in ~~our~~the ~~access~~indenture governing the Notes, related to ~~capital~~the triggering of a change of control as a result of a change in the composition of a board of directors or similar governing body. Accordingly, the ability of a holder of Notes to require us to repurchase Notes as a result of a change in the composition of the members of our Operating Committee is uncertain.

The Notes currently have a non-investment grade rating. In the future, any ratings agency may lower a given rating, if that rating agency judges that our business, the economic environment or other future circumstances so warrant, and a ratings downgrade would likely materially adversely affect the price of the Notes. A ratings agency may also decide to withdraw its rating of the Notes entirely, which would impede their liquidity and materially adversely affect their price. 27

~~During~~Table ~~any~~of ~~period in which the Notes are rated investment grade, certain covenants contained in the indenture will not be applicable; however, there is no assurance that the Notes will be rated investment grade.~~ Contents

~~The~~Federal ~~indenture governing the Notes provides that certain covenants will not apply to us during any period in which the Notes are rated investment grade from each of Standard & Poor’s~~ and ~~Moody’s~~state ~~and~~statutes noallow ~~default~~courts, ~~has otherwise occurred and is continuing~~ under ~~the~~specific ~~indenture. The covenants that would be suspended include~~circumstances, ~~among others, limitations on our restricted subsidiaries’ ability~~ to ~~pay~~void ~~dividends,~~guarantees ~~incur~~of ~~indebtedness, sell certain assets and enter into certain other transactions. Any actions that we take while these covenants are not in force will be permitted even if~~ the Notes. ~~are~~In ~~subsequently downgraded below investment grade and~~ such ~~covenants~~event, ~~are~~holders ~~subsequently~~of ~~reinstated.~~Notes ~~Investors~~would ~~should~~ be ~~aware~~structurally ~~that~~subordinated ~~the~~to ~~Notes~~creditors ~~may~~of ~~never become rated investment grade and we do not expect~~ the ~~Notes~~ toissuer ~~become~~of ~~investment grade. If they do become rated investment grade,~~ the ~~Notes~~voided ~~may not maintain those ratings~~guarantee.

~~The~~Federal ~~Notes~~and ~~are~~state ~~only~~statutes ~~guaranteed by~~allow ~~entities~~courts, ~~that~~under ~~also~~specific ~~guarantee~~circumstances, ~~our~~to ~~Second~~void ~~Amended Credit Facility. Therefore~~guarantees, ~~certain~~subordinate ~~current~~claims ~~and~~under ~~future~~the ~~subsidiaries~~guarantees ofto the ~~Company~~guarantor’s ~~that~~other ~~are~~debt ~~considered~~or ~~controlled~~take ~~foreign~~other ~~corporations~~action ~~and~~detrimental ~~certain~~to ~~other~~holders ~~subsidiaries~~of ~~that~~the ~~are~~guarantees ~~not~~of ~~required~~the ~~to guarantee~~Notes. Under the ~~Second~~federal ~~Amended~~bankruptcy ~~Credit~~law ~~Facility~~and ~~will~~comparable ~~not~~provisions ~~provide~~of state fraudulent transfer laws, the guarantees ofmade by the ~~Second~~guarantors ~~Amended~~could ~~Credit~~be ~~Facility~~voided ~~and~~or ~~will~~subordinated ~~not~~to ~~guarantee~~other ~~the~~debt ~~Notes.~~if, among other things:

~~Certain~~• ~~current~~any ~~and~~guarantor ~~future~~issued ~~U.S. and non-U.S. indirect subsidiaries of~~ the ~~Company~~guarantee ~~are considered~~ to ~~be controlled foreign corporations. These subsidiaries will not provide guarantees of the Second Amended Credit Facility and~~delay, ~~therefore,~~hinder ~~will~~or ~~not~~defraud ~~provide~~present guarantees of the Notes. Furthermore, certain other subsidiaries of the Company will not be required to provide guarantees of the Second Amended Credit Facility and, unless they guarantee other indebtedness of ours or ~~the~~future ~~guarantors,~~creditors; ~~will not guarantee the Notes.~~ or

A• ~~substantial portion~~any ofguarantor ~~our~~received ~~assets~~less ~~are~~than ~~owned,~~reasonably ~~and~~equivalent avalue ~~substantial~~or ~~portion~~fair ofconsideration ~~our~~for ~~revenue~~issuing issuch ~~generated~~guarantee and, byat ~~guarantors organized outside~~ the ~~United~~time ~~States.~~it ~~Foreign~~issued ~~laws~~its ~~applicable~~guarantee, toany ~~such guarantors might not be as favorable to note holders as analogous United States federal and state laws.~~ guarantor:

A• substantial portion of our assets are owned by non-U.S. guarantors. As a result of their jurisdiction of organization, laws other than United States federal and state law may apply to such entities in connection with, among other things, their liquidation or dissolution and the validity and enforceability of their guarantees of the Notes. We can give no assurance of which jurisdiction’s insolvency law will be applied in the event of the bankruptcy or insolvency of a foreign guarantor of the Notes. The procedural and substantive provisions of foreign insolvency laws are different from and, in certain jurisdictions, may be less favorable to holders of the Notes than comparable provisions of U.S. insolvency law. Further, pursuant to foreign insolvency law, a foreign guarantor’s liability under its guarantee may rank junior to certain debts entitled to priority under applicable law, which would not be entitled to a similar priority under U.S. insolvency law. Such debts could include, among others, amounts owed to foreign governments, amounts owed to employees such as wages, salary and holiday remuneration, amounts owed in respect of pension scheme contributions, social security contributions or contracts of insurance, and payments pursuant to applicable workers’ compensation laws. As a result, there can be no assurance that, in the event of a liquidation or insolvency of a foreign guarantor of the Notes, note holders will be able to realize upon the guarantee of such foreign guarantor to the same extent as if such foreign guarantor was ~~organized~~insolvent ~~under the laws of a U.S. jurisdiction. The laws of such foreign jurisdictions might also be applied to hold the guarantee of a foreign guarantor void and unenforceable in connection with a liquidation~~ or ~~otherwise.~~rendered ~~Such foreign~~insolvent ~~laws~~by ~~may~~reason ~~also be used to hold a payment made under a guarantee to be void and refundable. Accordingly, the guarantee~~ of a foreign guarantor could be held void and unenforceable under applicable foreign law in a situation in which, if foreign law did not apply, the same guarantee would be enforceable under applicable U.S. federal and state law. The guarantees of the foreign guarantors may also be held void under certain foreign laws if it is determined that the company issuing the guarantee does not receive sufficient commercial benefit for doing so. If there is insufficient commercial benefit, the beneficiary of the guarantee may not be able to rely on the authority of the directors of that company to grant the guarantee, and accordingly a court may set aside the guarantee at the request of, among others, the company’s shareholders or a liquidator. Although we believe that the guarantee of each foreign guarantor is enforceable and that each guarantor has received sufficient commercial benefit from issuing its guarantee, we cannot assure you that a foreign court would agree with our conclusion and not hold such ~~guarantee to be void under applicable foreign law.~~ incurrence;

~~The~~• ~~Issuer~~was isengaged in a ~~holding~~business ~~company,~~or ~~and~~transaction ~~its~~for ~~ability~~which tosuch ~~make~~guarantor’s ~~any~~remaining ~~required~~unencumbered ~~payment on~~assets ~~the~~constituted ~~Notes~~unreasonably issmall ~~dependent on the operations of, and the distribution of funds from, its and Parent’s subsidiaries.~~ capital;

~~The Issuer’s~~• ~~and~~intended Parent’s subsidiaries conduct substantially all of our operations and own all of our operating assets. Therefore, the Issuer depends on dividends and other distributions from its and Parent’s subsidiaries to ~~generate the funds necessary to meet its obligations~~incur, ~~including~~or ~~its~~believed ~~required~~that ~~obligations~~it ~~under~~would ~~the Notes. Moreover~~incur, ~~each~~debts ofbeyond ~~our~~its ~~subsidiaries~~ability ~~is a legally distinct entity and, other than those of our subsidiaries that are guarantors of the Notes, have no obligation~~ to pay ~~amounts~~such ~~due~~debts ~~pursuant~~as tothey ~~the~~mature; ~~Notes~~ or ~~to make any of their funds or other assets available for these payments. Although the indenture governing the Notes limits the ability of the~~

24• was a defendant in an action for money damages, or had a judgment for money damages docketed against it if, in either case, after final judgment, the judgment is unsatisfied.

~~Table~~Among other things, a legal challenge of ~~Contents~~a guarantee on fraudulent conveyance grounds may focus on the benefits, if any, realized by the guarantor as a result of our issuance of the Notes. The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if, at the time it incurred the debt,

~~restricted~~• ~~subsidiaries~~the tosum ~~enter into consensual restrictions on their ability to pay dividends and make other payments, these limitations have a number~~ of ~~significant~~its ~~qualifications~~debts ~~and exceptions,~~is ~~including~~greater ~~provisions~~than ~~contained in~~ the ~~indenture~~fair ~~governing~~value ~~the Notes and the Second Amended Credit Facility that restrict the ability~~ of ~~the~~all ~~restricted subsidiaries to make dividends and distributions or otherwise transfer any~~ of ~~their assets~~its ~~to the Issuer.~~ assets;

~~The~~• ~~Notes~~the ~~may~~present ~~trade~~fair atsaleable avalue ~~discount~~of ~~from~~its ~~par.~~assets was less than the amount that would be required in order to pay its probable liability on its existing debts and liabilities, including contingent liabilities, as they become absolute and mature; or

~~The~~• ~~Notes~~it ~~may~~could ~~trade at a discount from their initial offering price due to a number of potential factors, including~~ not ~~only~~pay ~~our~~or ~~financial condition,~~is ~~performance~~generally ~~and prospects, but also many that are~~ not ~~directly~~paying ~~related~~its todebts ~~us, such~~ as athey ~~lack~~become ~~of liquidity in trading of the Notes, prevailing interest rates, the market for similar securities, general economic conditions and prospects for companies in our industry generally~~due. In addition, the liquidity of the trading market in the Notes and the market prices quoted for the Notes may be materially adversely affected by changes in the overall market for high-yield securities.

~~Risks~~There ~~Related~~is no way to ~~Intellectual~~predict ~~Property~~with certainty what standards a court would apply to determine whether a guarantor was solvent at the relevant time. It is possible that a court could view the issuance of guarantees as a fraudulent conveyance. To the extent that a guarantee were to be voided as a fraudulent conveyance or were to be held unenforceable for any other reason, holders of the Notes would cease to have any claim in respect of the guarantor and would be creditors solely of ours and of the guarantors whose guarantees had not been avoided or held unenforceable. In this event, the claims of the holders of the Notes against the issuer of an invalid guarantee would be subject to the prior payment in full of all other liabilities of the guarantor thereunder. After providing for all prior claims, there may not be sufficient assets to satisfy the claims of the holders of the Notes relating to the voided guarantees. Although each guarantee entered into by a guarantor will contain a provision intended to limit that guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer, this provision may not be effective to protect those guarantees from being voided under fraudulent transfer law, or may reduce that guarantor’s obligation to an amount that effectively makes its guarantee worthless. In a Florida bankruptcy case, this kind of provision was found to be unenforceable and, as a result, the subsidiary guarantees in that case were found to be fraudulent conveyances. We do not know if that case will be followed if there is litigation on this point under the indenture for the Notes. However, if it is followed, the risk that the guarantees will be found to be fraudulent conveyances will be significantly increased.

IfWe ~~our intellectual~~are ~~property~~owned and ~~technologies~~controlled ~~are~~by ~~not~~funds ~~adequately~~advised ~~protected to prevent use or appropriation~~ by ~~our competitors~~Permira, and the ~~value~~funds’ ofinterests ~~our~~as ~~brand~~equity ~~and~~holders ~~other intangible assets~~ may beconflict ~~diminished,~~with ~~and~~the ~~our~~interests ~~business~~of ~~may~~note ~~be materially affected~~holders.

~~Our~~We ~~future~~are ~~success~~indirectly ~~and~~controlled ~~competitive~~by ~~position~~funds ~~depend~~advised inby ~~part~~Permira, onwho ~~our~~have the ability to ~~protect~~control our ~~proprietary~~policies ~~technologies~~ and ~~intellectual property~~operations. ~~We rely~~The ~~and~~interests ~~expect~~of tothe ~~continue~~funds tomay ~~rely~~not onin aall ~~combination~~cases ofbe ~~confidentiality~~aligned ~~and license agreements~~ with ~~our~~the ~~employees,~~interests ~~consultants~~of ~~and~~note ~~third~~holders. ~~parties~~For ~~with~~example, ~~whom~~if we ~~have~~encounter ~~relationships,~~financial asdifficulties ~~well~~or asare onunable ~~the protections afforded by trademark, copyright, patent and trade secret law,~~ to ~~protect~~pay our ~~proprietary~~debts ~~technologies~~as ~~and~~they ~~intellectual~~mature, ~~property.~~the ~~Because~~interests ~~certain~~ of our ~~trademarks~~equity ~~contain~~holders ~~words~~might orconflict ~~terms~~with ~~that~~the ~~have~~interests anof ~~arguably~~note ~~common~~holders. ~~usage~~In addition, weour equity holders may have ~~difficulty~~an ~~registering~~interest ~~them~~ in ~~certain~~pursuing ~~jurisdictions. Although we possess intellectual property rights in some aspects of our digital content~~acquisitions, ~~search technology~~divestitures, ~~software~~financings ~~products and digitization and indexing processes, our digital content is not protected by any registered copyrights~~ or other ~~registered~~ ~~intellectual~~transactions ~~property~~that, orin ~~statutory~~their ~~rights. Rather~~judgment, ~~our~~could ~~digital~~enhance ~~content~~their isequity ~~protected~~investments, byeven ~~user~~when ~~agreements~~those ~~that~~transactions ~~limit~~involve ~~access~~risks to ~~and~~holders ~~use~~ of ~~our~~the ~~data~~Notes. Furthermore, asfunds ~~well~~advised as by ~~certain~~Permira ~~proprietary~~may ~~and~~in ~~non-proprietary technology and software. However, compliance with~~ the ~~use~~future ~~restrictions~~own isbusinesses ~~difficult~~that todirectly ~~monitor,~~or ~~and~~indirectly ~~any~~compete ~~technology~~with orus. ~~software~~Funds ~~that~~advised weby ~~deploy~~Permira toalso ~~protect~~may ~~our~~pursue ~~digital~~acquisition ~~content~~opportunities that may ~~prove to~~ be ~~inadequate~~complementary ~~for~~to ~~such~~our ~~purpose. In addition~~business, ~~our~~and ~~proprietary~~as ~~rights~~a inresult, ~~our~~those ~~digital~~acquisition ~~content databases~~opportunities may not be ~~more~~available ~~difficult~~ to ~~enforce than other forms of intellectual property rights~~us.

There can be no assurance that the steps we take will be adequate to protect our technologies and intellectual property, that our patent and trademark applications will lead to issued patents and registered trademarks in all instances, that others will not develop or patent similar or superior technologies, products or services, or that our patents, trademarks and other intellectual property will not be challenged, invalidated or circumvented by others. Furthermore, the intellectual property laws of other countries at which our websites are or may in the future be directed, may not protect our products and intellectual property rights to the same extent as the laws of the United States. The legal standards relating to the validity, enforceability and scope of protection of intellectual property rights in Internet-related industries are uncertain and still evolving, both in the United States and in other countries. In addition, third parties may knowingly or unknowingly infringe our patents, trademarks and other intellectual property rights, and litigation may be necessary to protect and enforce our intellectual property rights. Any such litigation could be very costly and could divert management attention and resources. If the protection of our technologies and intellectual property is inadequate to prevent use or appropriation by third parties, the value of our brand and other intangible assets may be diminished and competitors may be able to more effectively mimic our subscription services and methods of operations. Any of these events would have a material adverse effect on our business, financial condition and results of operations. 28

WeTable ~~also~~of expect that the more successful we are, the more likely it will become that competitors will try to develop products that are similar to ours, which may infringe on our proprietary rights. It may also be more likely that competitors will claim that our products and services infringe on their proprietary rights. If we are unable to protect our proprietary rights or if third parties independently develop or gain access to our or similar technologies, our business, revenues, reputation and competitive position could be harmed. Contents

~~Confidentiality~~A ~~agreements~~lowering ~~with~~or ~~employees~~withdrawal ~~and others may not adequately prevent disclosure~~ of ~~trade~~the ~~secrets~~ratings ~~and~~assigned ~~other proprietary information. Failure~~ to ~~protect~~ our ~~proprietary~~debt ~~information~~securities ~~could~~by ~~make~~rating itagencies ~~easier~~may ~~for~~impair ~~third~~our ~~parties~~ability to ~~compete~~obtain ~~with~~future ~~our~~borrowings ~~products~~at similar costs and ~~harm~~reduce our ~~business.~~access to capital.

AThe ~~substantial~~Notes ~~amount~~currently ofhave ~~our~~a ~~tools~~non-investment ~~and~~grade ~~technologies are protected by trade secret laws~~rating. In ~~order~~the ~~to protect our proprietary technologies and processes~~future, weany ~~rely~~ratings inagency ~~part~~may onlower ~~security~~a ~~measures~~given rating, asif ~~well~~that asrating ~~confidentiality~~agency ~~agreements~~judges ~~with~~that our ~~employees~~business, ~~licensees,~~the ~~independent~~economic ~~contractors~~environment ~~and~~or other ~~advisors.~~future ~~These~~circumstances ~~measures~~so ~~and agreements may not effectively prevent disclosure of confidential information~~warrant, ~~including trade secrets,~~ and ~~may~~a ~~not~~ratings ~~provide~~downgrade anwould ~~adequate~~likely ~~remedy~~materially inadversely affect the ~~event~~price of ~~unauthorized~~the ~~disclosure of confidential information~~Notes. WeA ~~could~~ratings ~~lose~~agency ~~future trade secret protection if any unauthorized disclosure of such information occurs. In addition, others~~ may ~~independently~~also ~~discover~~decide our trade secrets and proprietary information, and in such cases, we could not assert any trade secret rights against such parties. Laws regarding trade secret rights in certain markets in which we operate may afford little or no protection to ~~our~~withdraw ~~trade~~its ~~secrets.~~rating ~~The loss~~ of ~~trade~~the ~~secret~~Notes ~~protection could make it easier for third parties to compete with our products by copying functionality. In addition~~entirely, ~~any changes in or unexpected interpretations of the trade secret and other intellectual property laws in any country in~~ which wewould ~~operate~~impede ~~may~~their ~~compromise~~liquidity ~~our ability to enforce our trade secret~~ and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could materially adversely affect ~~our~~their ~~business, revenues, reputation and competitive position~~price.

25During any period in which the Notes are rated investment grade, certain covenants contained in the indenture will not be applicable; however, there is no assurance that the Notes will be rated investment grade.

~~Table~~The indenture governing the Notes provides that certain covenants will not apply to us during any period in which the Notes are rated investment grade from each of ~~Contents~~Standard & Poor’s and Moody’s and no default has otherwise occurred and is continuing under the indenture. The covenants that would be suspended include, among others, limitations on our restricted subsidiaries’ ability to pay dividends, incur indebtedness, sell certain assets and enter into certain other transactions. Any actions that we take while these covenants are not in force will be permitted even if the Notes are subsequently downgraded below investment grade and such covenants are subsequently reinstated. Investors should be aware that the Notes may never become rated investment grade and we do not expect the Notes to become investment grade. If they do become rated investment grade, the Notes may not maintain those ratings.

~~Intellectual~~The ~~property~~Notes ~~claims~~are ~~against~~only usguaranteed ~~could~~by beentities ~~costly~~that ~~and~~also ~~result~~guarantee inour ~~the~~New ~~loss~~Credit Facilities. Therefore, certain current and future subsidiaries of ~~significant~~Ancestry.com ~~rights related~~LLC ~~to,~~that ~~among~~are considered controlled foreign corporations and certain other ~~things,~~subsidiaries ~~our~~that ~~websites,~~are ~~content~~not ~~indexes,~~required ~~and~~to ~~marketing~~guarantee the New Credit Facilities will not provide guarantees of the New Credit Facilities and ~~advertising~~will ~~activities.~~not guarantee the Notes.

~~Trademark,~~Certain ~~copyright, patent~~current and ~~other~~future ~~intellectual property rights are important to us and other companies~~U. ~~Our intellectual property rights extend to our technologies, business processes and the content on our websites~~S. ~~We use intellectual property licensed from third parties in merchandising our products~~ and ~~marketing and advertising our services~~non-U. ~~From time to time, third parties may allege that we have violated their intellectual property rights~~S. Ifindirect ~~there~~subsidiaries ~~is a valid claim against us for infringement, misappropriation, misuse or other violation~~ of ~~third-party~~Ancestry.com ~~intellectual~~LLC ~~property rights, and we~~ are ~~unable~~considered to ~~obtain sufficient rights or develop non-infringing intellectual property or otherwise alter our business practices on a timely basis, our business and competitive position may~~ be ~~adversely~~controlled ~~affected.~~foreign ~~Many companies are devoting significant resources to obtaining patents that could affect many aspects of our business~~corporations. ~~There~~These ~~are~~subsidiaries ~~numerous~~will ~~patents~~not ~~that~~provide ~~broadly~~guarantees ~~claim means and methods~~ of ~~conducting~~ ~~business on~~ the ~~Internet.~~New WeCredit ~~have~~Facilities ~~not exhaustively searched patents relevant to our technologies~~ and ~~business. If we are forced to defend ourselves against intellectual property infringement claims~~, ~~whether they are with or without merit or are determined in our favor~~therefore, wewill ~~may~~not ~~face~~provide ~~costly~~guarantees ~~litigation, diversion~~ of ~~technical~~the ~~and~~Notes. ~~management personnel~~Furthermore, ~~limitations~~certain onother ~~our~~of ~~ability to use~~ our ~~current~~subsidiaries ~~websites~~will ornot ~~inability~~be required to ~~market or~~ provide ~~our~~guarantees ~~products or services. As a result~~ of ~~any such~~the ~~dispute,~~New weCredit ~~may~~Facilities ~~have to develop non-infringing technology~~and, ~~pay~~unless ~~damages,~~they ~~enter~~guarantee ~~into~~other ~~royalty~~indebtedness orof ~~licensing~~ours ~~agreements, cease providing certain products~~ or ~~services, adjust our merchandizing or marketing and advertising activities or take other actions to resolve~~ the ~~claims. These actions~~guarantors, ifwill ~~required,~~not ~~may~~guarantee be costly or unavailable on terms acceptable to us. In addition, many of our co-branding, distribution and other partnering agreements require us to indemnify our partners for third-party intellectual property infringement claims, which could increase the ~~cost to us of an adverse ruling in such an action~~Notes.

~~In addition,~~A assubstantial aportion ~~publisher~~ of ~~online~~our ~~content,~~assets weare ~~face~~owned, ~~potential~~and ~~liability~~a ~~for~~substantial ~~negligence,~~portion ~~copyright,~~of ~~patent~~our orrevenue ~~trademark~~is ~~infringement~~generated, orby ~~other~~guarantors ~~claims~~organized ~~based~~outside on the ~~nature~~United ~~and content of data and materials that we publish or distribute~~States. ~~These~~Foreign ~~claims could~~laws ~~arise~~applicable ~~with respect~~ to ~~both~~such ~~institutional~~guarantors ~~and~~might ~~user-generated~~not ~~content. Litigation to defend these claims could~~ be ~~costly~~as ~~and~~favorable ~~any~~to ~~other~~note ~~liabilities~~holders weas ~~incur~~analogous inUnited ~~connection~~States ~~with~~federal ~~the claims may have a material adverse effect on our business, financial condition~~ and ~~results~~state ~~of operations~~laws.

IfA wesubstantial portion of our assets are ~~unable~~owned by non-U.S. guarantors. As a result of their jurisdiction of organization, laws other than United States federal and state law may apply to ~~protect~~such ~~our~~entities ~~domain~~in ~~names~~connection with, ~~our~~among ~~reputation~~other things, their liquidation or dissolution and ~~brand~~the validity and enforceability of their guarantees of the Notes. We can give no assurance of which jurisdiction’s insolvency law will be applied in the event of the bankruptcy or insolvency of a foreign guarantor of the Notes. The procedural and substantive provisions of foreign insolvency laws are different from and, in certain jurisdictions, may be less favorable to holders of the Notes than comparable provisions of U.S. insolvency law. Further, pursuant to foreign insolvency law, a foreign guarantor’s liability under its guarantee may rank junior to certain debts entitled to priority under applicable law, which would not be entitled to a similar priority under U.S. insolvency law. Such debts could include, among others, amounts owed to foreign governments, amounts owed to employees such as wages, salary and holiday remuneration, amounts owed in respect of pension scheme contributions, social security contributions or contracts of insurance, and payments pursuant to applicable workers’ compensation laws. As a result, there can be ~~affected~~no ~~adversely~~assurance that, in the event of a liquidation or insolvency of a foreign guarantor of the Notes, note holders will be able to realize upon the guarantee of such foreign guarantor to the same extent as if such foreign guarantor was organized under the laws of a U.S. jurisdiction. The laws of such foreign jurisdictions might also be applied to hold the guarantee of a foreign guarantor void and unenforceable in connection with a liquidation or otherwise. Such foreign laws may also be used to hold a payment made under a guarantee to be void and refundable. Accordingly, the guarantee of a foreign guarantor could be held void and unenforceable under applicable foreign law in a situation in which, if foreign law did not apply, the same guarantee would be enforceable under applicable U.S. federal and state law. The guarantees of the foreign guarantors may ~~negatively~~also ~~impact~~be ~~our~~held ~~ability~~void under certain foreign laws if it is determined that the company issuing the guarantee does not receive sufficient commercial benefit for doing so. If there is insufficient commercial benefit, the beneficiary of the guarantee may not be able to ~~compete~~rely on the authority of the directors of that company to grant the guarantee, and accordingly a court may set aside the guarantee at the request of, among others, the company’s shareholders or a liquidator. Although we believe that the guarantee of each foreign guarantor is enforceable and that each guarantor has received sufficient commercial benefit from issuing its guarantee, we cannot assure you that a foreign court would agree with our conclusion and not hold such guarantee to be void under applicable foreign law.

We have registered domain names for website destinations that we use in our business, such as Ancestry.com, Ancestry.co.uk, Archives.com and Fold3.com. However, if we are unable to maintain our rights in these domain names, our competitors could capitalize on our brand recognition by using these domain names for their own benefit. In addition, our competitors could capitalize on our brand recognition by using domain names similar to ours. Domain names similar to ours have been registered in the United States and elsewhere, and in many countries the top-level domain names “ancestry,” “archives” or “genealogy” are owned by other parties. Although we own the “ancestry.co.uk” domain name in the United Kingdom, we might not be able to, or may choose not to, acquire or maintain other country-specific versions of the “ancestry,” “archives” and “genealogy” domain names. Further, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights varies from jurisdiction to jurisdiction and is unclear in some jurisdictions. We may be unable to prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of, our brand or our trademarks or service marks. Protecting and enforcing our rights in our domain names and determining the rights of others may require litigation, which could result in substantial costs and divert management attention. We may not prevail if any such litigation is initiated. 29

~~Item~~Table ~~1B.~~of ~~Unresolved Staff Comments~~Contents

~~None~~Ancestry.com Inc. (the “Issuer”) is a holding company, and its ability to make any required payment on the Notes is dependent on the operations of, and the distribution of funds from, its and Ancestry.com LLC's (the “Parent”) subsidiaries.

~~Item~~The 2Issuer’s and Parent’s subsidiaries conduct substantially all of our operations and own all of our operating assets. ~~Properties~~Therefore, the Issuer depends on dividends and other distributions from its and Parent’s subsidiaries to generate the funds necessary to meet its obligations, including its required obligations under the Notes. Moreover, each of our subsidiaries is a legally distinct entity and, other than those of our subsidiaries that are guarantors of the Notes, have no obligation to pay amounts due pursuant to the Notes or to make any of their funds or other assets available for these payments. Although the indenture governing the Notes limits the ability of the restricted subsidiaries to enter into consensual restrictions on their ability to pay dividends and make other payments, these limitations have a number of significant qualifications and exceptions, including provisions contained in the indenture governing the Notes and the New Credit Facilities that restrict the ability of the restricted subsidiaries to make dividends and distributions or otherwise transfer any of their assets to the Issuer.

~~Our corporate headquarters are located in Provo, Utah, where we lease approximately 120,000 square feet of space.~~ The ~~term of~~Notes ~~this~~may ~~lease~~trade ~~expires~~at ~~in May 2016. In 2012, we began to occupy office space of approximately 57,000 square feet in San Francisco, California under~~ a ~~lease~~discount ~~that expires in 2019. We also maintain smaller offices in other U.S. locations and internationally in Ireland, the United Kingdom and in other countries under leases that expire at varying times~~ from ~~2015 through 2022~~par.

InThe ~~January~~Notes ~~2015,~~may wetrade ~~entered~~at ~~into~~a andiscount ~~operating~~from ~~lease~~their ~~agreement~~initial ~~for~~offering ~~our~~price ~~new~~due ~~corporate headquarters~~ to bea ~~constructed~~number inof ~~Lehi~~potential factors, ~~Utah.~~including ~~We anticipate~~not ~~leasing~~only ~~approximately~~our ~~135~~financial condition,~~000~~ ~~square~~performance ~~feet~~and prospects, ~~with~~but ~~the~~also ~~right~~many that are not directly related to ~~expand~~us, such as a lack of liquidity in ~~the~~trading ~~same~~of ~~buildings.~~the WeNotes, ~~expect~~prevailing tointerest ~~occupy~~rates, the ~~premises~~market ~~beginning~~for insimilar ~~mid-2016.~~securities, ~~The~~general ~~lease~~economic ~~has~~conditions aand ~~ten-year~~prospects ~~initial~~for ~~term~~companies in our industry generally. In addition, ~~with~~the liquidity of the ~~right~~trading tomarket ~~extend~~in the ~~lease~~Notes and the market prices quoted for upthe toNotes ~~two additional~~may ~~five~~be materially adversely affected by changes in the overall market for high-~~year~~yield ~~terms~~securities.

~~Our~~Risks ~~Ancestry.com~~Related websites are hosted on hardware and software co-located at a third-party facility in Salt Lake City, Utah. We believe that our contracted space for our hardware and software at this facility is both suitable and adequate for our current development plans and our anticipated growth. Our Salt Lake City contract expires at the end of 2015. We are transitioning our disaster recovery resources at a third-party facility in Denver, Colorado to ~~the~~Intellectual ~~cloud.~~ Property

26If our intellectual property and technologies are not adequately protected to prevent use or appropriation by our competitors, the value of our brand and other intangible assets may be diminished, and our business may be materially affected.

~~Table~~Our future success and competitive position depend in part on our ability to protect our proprietary technologies and intellectual property. We rely and expect to continue to rely on a combination of ~~Contents~~confidentiality and license agreements with our employees, consultants and third parties with whom we have relationships, as well as on the protections afforded by trademark, copyright, patent and trade secret law, to protect our proprietary technologies and intellectual property. Because certain of our trademarks contain words or terms that have an arguably common usage, we may have difficulty registering them in certain jurisdictions. Although we possess intellectual property rights in some aspects of our digital content, search technology and digitization and indexing processes, our digital content is not protected by any registered copyrights or other registered intellectual property or statutory rights. Rather, our digital content is protected by user agreements that limit access to and use of our data, as well as by certain proprietary and non-proprietary technology and software. However, compliance with the use restrictions is difficult to monitor, and any technology or software that we deploy to protect our digital content may prove to be inadequate for such purpose. In addition, our proprietary rights in our digital content databases may be more difficult to enforce than other forms of intellectual property rights.

~~Item~~There 3can be no assurance that the steps we take will be adequate to protect our technologies and intellectual property, that our patent and trademark applications will lead to issued patents and registered trademarks in all instances, that others will not develop or patent similar or superior technologies, products or services, or that our patents, trademarks and other intellectual property will not be challenged, invalidated or circumvented by others. ~~Legal~~Furthermore, ~~Proceedings~~the intellectual property laws of other countries at which our websites are or may in the future be directed, may not protect our products and intellectual property rights to the same extent as the laws of the United States. The legal standards relating to the validity, enforceability and scope of protection of intellectual property rights in Internet-related industries are uncertain and still evolving, both in the United States and in other countries. In addition, third parties may knowingly or unknowingly infringe our patents, trademarks and other intellectual property rights, and litigation may be necessary to protect and enforce our intellectual property rights. Any such litigation could be very costly and could divert management attention and resources. If the protection of our technologies and intellectual property is inadequate to prevent use or appropriation by third parties, the value of our brand and other intangible assets may be diminished and competitors may be able to more effectively mimic our subscription services and methods of operations. Any of these events would have a material adverse effect on our business, financial condition and results of operations.

~~Appraisal~~We ~~Litigation~~also ~~(In~~expect ~~re:~~that ~~Appraisal~~the ofmore ~~Ancestry~~successful we are, the more likely it will become that competitors will try to develop services that are similar to ours, which may infringe on our proprietary rights.~~com~~ ~~Inc~~It may also be more likely that competitors will claim that our products and services infringe on their proprietary rights.) If we are unable to protect our proprietary rights or if third parties independently develop or gain access to our or similar technologies, our business, revenues, reputation and competitive position could be harmed.

On October 21, 2012, the Predecessor entered into a definitive merger agreement with Global Generations Merger Sub Inc. and its parent company, Ancestry US Holdings Inc. (“Holdings”), to acquire the Predecessor for $32.00 per share of common stock (the “Merger”). 30

~~Following~~Table ~~the consummation~~ of the Merger, three former shareholders, who, combined, owned approximately 1.4 million shares of our Predecessor’s common stock, instituted two separate appraisal proceedings in the Court of Chancery of the State of Delaware pursuant to Del. C. § 262: Merion Capital, L.P. v. Ancestry.com, Inc. (C.A. No. 8173) and Merlin Partners LP et al. v. Ancestry.com Inc. (C.A. No. 8175). The two appraisal petitions alleged that the $32 per share price paid to our Predecessor’s shareholders in the Merger did not represent the fair value of the Company on the date the Merger was consummated. On June 24, 2013, the Court consolidated the two pending appraisal proceedings as In re: Appraisal of Ancestry.com Inc. On February 9, 2015, the Court issued an order directing us to pay the fair value of $32 per share plus interest from the closing of the Merger through the date of payment. Therefore, on February 9, 2015, we paid a total of $51.1 million which included releasing $45.3 million of restricted cash for the fair value of $32 per share plus $5.8 million for accrued interest. Contents

~~General~~Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information. Failure to protect our proprietary information could make it easier for third parties to compete with our services and harm our business.

AsA ~~part~~substantial amount of ~~the~~our ~~acquisition~~tools ofand ~~Archives.com~~technologies ~~from~~are ~~Inflection~~protected ~~LLC,~~by ~~completed~~trade insecret ~~August~~laws. ~~2012,~~In aorder ~~Marketing~~to ~~Agreement~~protect ~~between~~our ~~Inflection~~proprietary ~~LLC~~technologies and ~~Z-CORP~~ ~~dba~~processes, ~~OneGreatFamily.com~~we ~~(“OGF”)~~rely ~~was~~in ~~assigned~~part toon ~~Ancestry.com~~security ~~Operations~~measures, ~~Inc.~~as Onwell oras ~~about~~confidentiality ~~October 10~~agreements with our employees, ~~2014~~licensees, ~~OGF~~independent ~~initiated~~contractors aand ~~proceeding~~other inadvisors. ~~the~~These ~~Fourth~~measures ~~Judicial~~and ~~District~~agreements ~~Court~~may ofnot ~~the~~effectively ~~State~~prevent disclosure of ~~Utah~~confidential ~~against~~information, ~~Ancestry.com~~including ~~Inc.~~trade secrets, and ~~Ancestry.com~~ ~~Operations~~may ~~Inc.,~~not ~~which~~provide isan ~~captioned~~adequate ~~Z-CORP~~remedy etin ~~al.~~the v.event ~~Ancestry.com~~of ~~Inc.~~unauthorized etdisclosure ~~al.~~of ~~(Civil~~confidential Noinformation. ~~140401466).~~ InWe ~~regards~~could tolose ~~the~~future ~~assigned~~trade ~~Marketing~~secret ~~Agreement,~~protection ~~the~~if ~~complaint~~any ~~alleges~~unauthorized ~~breach~~disclosure of ~~contract,~~such ~~breach~~information ofoccurs. ~~implied~~In ~~covenant~~addition, ~~of good~~others ~~faith~~may ~~and~~independently ~~fair~~discover ~~dealing,~~our ~~conversion~~trade secrets and ~~intentional~~proprietary ~~interference~~information, ~~with~~and ~~prospective~~in ~~economic~~such ~~relations~~cases, ~~with~~we ~~alleged~~could ~~damages~~not ~~totaling~~assert ~~over~~any ~~$30~~trade ~~million~~secret ~~and~~rights ~~punitive~~against ~~damages~~such parties. WeLaws ~~believe~~regarding ~~that~~trade wesecret ~~have~~rights ~~substantial~~in ~~defenses~~certain tomarkets ~~the~~in ~~claims~~which ~~asserted~~we byoperate ~~OGF, and~~may onafford little or ~~about~~no ~~November 13,~~protection ~~2014~~to ~~Ancestry~~our trade secrets.~~com~~ ~~filed~~The aloss ~~motion~~of totrade ~~dismiss~~secret ~~the~~protection ~~complaint~~could inmake ~~its~~it ~~entirety,~~easier for ~~failing~~third parties to ~~state~~compete ~~claims~~with ~~upon~~our ~~which~~services ~~relief~~by ~~may~~copying ~~be granted~~functionality. ~~The~~In ~~motion~~addition, ~~has~~any ~~been~~changes ~~fully~~in ~~briefed,~~or ~~and~~unexpected ~~oral~~interpretations ~~argument~~of on the ~~motion~~trade ~~has~~secret ~~been requested.~~and ~~The~~other ~~Court~~intellectual ~~will~~property ~~hear~~laws ~~oral~~in ~~arguments~~any oncountry ~~the~~in ~~motion~~which we operate may compromise our ability to ~~dismiss~~enforce onour ~~March 9,~~trade ~~2015~~secret and intellectual property rights. ~~Based~~Costly onand ~~our~~time-consuming ~~current~~litigation ~~knowledge,~~could webe donecessary ~~not~~to ~~believe~~enforce ~~that~~and adetermine ~~loss,~~the ifscope ~~any~~of our proprietary rights, ~~arising~~and ~~from~~failure ~~this~~to ~~matter~~obtain ~~should~~or ~~have~~maintain atrade ~~material~~secret ~~adverse~~protection ~~effect~~could onmaterially affect our ~~consolidated financial~~business, revenues, reputation and competitive position.

We have and may become party to various other legal proceedings and other claims that arise in the ordinary course of business or otherwise in the future. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. While we cannot assure the ultimate outcome of any legal proceeding or contingency in which we are or may become involved, we do not believe that any pending legal claim or proceeding arising in the ordinary course will be resolved in a manner that would have a material adverse effect on our business. Although we consider the likelihood of such an outcome to be remote, if one or more of these legal matters resulted in an adverse money judgment against the Company, such a judgment could have a material adverse effect on our operating results and financial conditions and may result in us being required to pay significant monetary damages. See the risk factors “Expenses or liabilities resulting from litigation could materially adversely affect our results of operations and financial condition” and “Intellectual property claims against us could be costly and result in the loss of significant rights related to, among other things, our websites, content indexes, and marketing and advertising activities~~,” under the heading “Risk Factors~~.”

Trademark, copyright, patent and other intellectual property rights are important to us and other companies. Our intellectual property rights extend to our technologies, business processes and the content on our websites. We use intellectual property licensed from third parties in merchandising our services and marketing and advertising our services. From time to time, third parties may allege that we have violated their intellectual property rights. For example, we are currently in litigation with Genotek; refer to Item 43, Legal Proceedings, of Part I for further information. ~~Mine~~If ~~Safety~~there ~~Disclosures~~is a valid claim against us for infringement, misappropriation, misuse or other violation of third-party intellectual property rights, and we are unable to obtain sufficient rights or develop non-infringing intellectual property or otherwise alter our business practices on a timely basis, our business and competitive position may be adversely affected. Many companies are devoting significant resources to obtaining patents that could affect many aspects of our business. There are numerous patents that broadly claim means and methods of conducting business on the Internet. We have not exhaustively searched patents relevant to our technologies and business. If we are forced to defend ourselves against intellectual property infringement claims, whether they are with or without merit or are determined in our favor, we may face costly litigation, diversion of technical and management personnel, limitations on our ability to use our current websites or inability to market or provide our services. As a result of any such dispute, we may have to develop non-infringing technology, pay damages, enter into royalty or licensing agreements, cease providing certain services, adjust our merchandising or marketing and advertising activities or take other actions to resolve the claims. These actions, if required, may be costly or unavailable on terms acceptable to us. In addition, many of our co-branding, distribution and other partnering agreements require us to indemnify our partners for third-party intellectual property infringement claims, which could increase the cost to us of an adverse ruling in such an action.

~~Not~~In ~~applicable~~addition, as a publisher of online content, we face potential liability for negligence, copyright, patent or trademark infringement or other claims based on the nature and content of data and materials that we publish or distribute. These claims could arise with respect to both institutional and user-generated content. Litigation to defend these claims could be costly and any other liabilities we incur in connection with the claims may have a material adverse effect on our business, financial condition and results of operations.

27 31

Table of Contents

~~PART~~If IIwe are unable to protect our domain names, our reputation and brand could be affected adversely, which may negatively impact our ability to compete.

~~Item~~We 5have registered domain names for website destinations that we use in our business, such as Ancestry.com, ~~Market~~Ancestry.co.uk, Archives.com and Fold3.com. However, if we are unable to maintain our rights in these domain names, our competitors could capitalize on our brand recognition by using these domain names for ~~Registrant’s~~their ~~Common~~own ~~Equity~~benefit. In addition, ~~Related~~our ~~Stockholder~~competitors ~~Matters~~could capitalize on our brand recognition by using domain names similar to ours. Domain names similar to ours have been registered in the United States and ~~Issuer~~elsewhere, ~~Purchases~~and in many countries the top-level domain names “ancestry,” “archives” or “genealogy” are owned by other parties. Although we own the “ancestry.co.uk” domain name in the United Kingdom, we might not be able to, or may choose not to, acquire or maintain other country-specific versions of ~~Equity~~the ~~Securities~~“ancestry,” “archives” and “genealogy” domain names. Further, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights varies from jurisdiction to jurisdiction and is unclear in some jurisdictions. We may be unable to prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of, our brand or our trademarks or service marks. Protecting and enforcing our rights in our domain names and determining the rights of others may require litigation, which could result in substantial costs and divert management attention. We may not prevail if any such litigation is initiated.

~~Market~~Item 1B. ~~Information~~Unresolved Staff Comments

~~Our common interests are privately held; as such there is no established public trading market for our common interests.~~ None

~~Holders~~Item 2. Properties

AsOur ofcorporate ~~February 19~~headquarters are located in Provo, ~~2015~~Utah, ~~all~~where we lease approximately 120,000 square feet of ~~the~~space. ~~common~~The ~~interests~~term of ~~Ancestry~~this lease expires in May 2016.~~com~~ ~~LLC~~In ~~were~~2012, ~~owned~~we bybegan ~~our~~to ~~parent~~occupy ~~company~~office space of approximately 57,000 ~~Ancestry.com~~square ~~Holdings~~feet ~~LLC (“Holdings~~in ~~LLC”).~~San ~~Holdings~~Francisco, ~~LLC~~California isunder a ~~holding~~lease ~~company~~that ~~with~~expires noin ~~material~~2019. ~~operations~~We ~~and~~also ~~limited~~maintain ~~assets~~offices in other ~~than~~U.S. ~~its~~locations ~~ownership~~and ofinternationally in Ireland, the ~~membership~~United ~~interests~~Kingdom ofand ~~Ancestry.com~~in ~~LLC.~~other countries under leases that expire at varying times from 2016 through 2023.

~~Dividends~~In 2015, we entered into an operating lease agreement for 200,000 square feet for our new corporate headquarters in Lehi, Utah. We expect to occupy the premises beginning in mid-2016. The lease has a ten-year initial term, with the right to extend the lease for up to two additional five-year terms.

InOur ~~2014,~~Ancestry.com wewebsites ~~declared~~are hosted on hardware and ~~paid our~~software ~~parent,~~co-located ~~Holdings~~at ~~LLC,~~a ~~return~~third-~~of-capital~~party ~~distributions~~facility ofin ~~$37~~Salt Lake City, Utah.6 ~~million~~We tobelieve ~~pay~~that ~~accumulated~~our ~~interest~~contracted onspace ~~$400~~for our hardware and software at this facility is both suitable and adequate for our current development plans and our anticipated growth.0 ~~million~~Our ofSalt ~~senior~~Lake ~~unsecured~~City ~~payment~~contract is currently on a month-into-~~kind~~month ~~toggle~~basis; ~~notes~~however, ~~due~~a ~~October 15,~~long-term ~~2018~~contract ~~(the~~is ~~“PIK~~expected ~~Notes”).~~to be finalized in 2016.

~~Interest~~Item ~~on the PIK Notes is payable semi-annually in arrears on April 15 and October 15 each year through maturity~~3. ~~Subject~~Legal to cash availability and restricted payment capacity, Holdings LLC will be entitled to pay all or a portion of the interest payment by increasing the principal amount of the notes or issuing new notes in an amount equal to the interest payment for the applicable interest period (“PIK Interest”). Cash interest on the PIK Notes will accrue at the rate of 9.625% per annum; PIK Interest will accrue at the rate of 10.375% per annum.Proceedings

The PIK Notes are senior unsecured obligations of Holdings LLC and are structurally subordinated to all our existing and future indebtedness. Additionally, we did not guarantee the PIK Notes, nor were any of our assets pledged as collateral for the PIK Notes. As we are not an obligor or a guarantor on the PIK Notes, the debt is recorded only in the financial statements of Holdings LLC and is not reflected in the Consolidated Financial Statements of Ancestry.com LLC. General

~~Covenants~~On ~~contained~~May 4, 2015, DNA Genotek Inc. (“Genotek”) filed a complaint against Ancestry.com DNA, LLC (“Ancestry DNA”) in the ~~Second~~United ~~Amended~~States ~~Credit~~District ~~Facility and~~Court for the ~~indenture~~District ~~governing~~of ~~the~~Delaware ~~Notes~~(Case ~~restrict~~No. 1:15-cv-00355-SLR). Genotek later filed an amended complaint on July 24, 2015 that asserts causes of action for (1) infringement of U.S. Patent No. 8,221,381; (2) breach of contract for allegedly breaching the ~~payment~~Terms and Conditions that governed Ancestry DNA’s purchase of ~~cash~~Genotek ~~dividends~~Saliva orCollection ~~distributions~~Products; (3) conversion; (4) trespass to chattel; and (5) action to quiet title. Ancestry ~~While~~DNA ~~not~~filed ~~required~~a motion to dismiss Genotek’s willful infringement, weconversion, ~~intend~~trespass to ~~make~~chattel, ~~future~~and ~~distributions~~action to ~~Holdings~~quiet ~~LLC~~title ~~related~~claims on August 10, 2015. Genotek responded to the ~~PIK~~motion ~~Notes~~to dismiss on September 3, ~~provided~~2015, ~~that~~and ~~such~~Ancestry ~~distributions~~DNA ~~are~~filed ~~permitted~~its ~~under the~~reply ~~covenants~~brief on September 18, 2015. As of February 19, 2016, the ~~Second~~Court ~~Amended~~has ~~Credit~~not ~~Facility~~yet ~~and~~ruled ~~the~~on ~~Notes~~this motion. On ~~See~~January ~~“Management~~22, 2016, Genotek filed a second amended complaint that adds a false advertising and a false designation of origin claim. Ancestry DNA’s ~~Discussion~~response to the second amended complaint is due on February 19, 2016. Genotek seeks preliminary and ~~Analysis~~permanent injunctive relief, unspecified monetary damages, an award of ~~Financial~~Ancestry’s ~~Condition~~profits, and ~~Results~~an award of ~~Operations—Liquidity~~Genotek’s costs and ~~Capital~~attorneys’ ~~Resources—Credit~~fees ~~Facility”~~incurred in connection with this action. On October 20, 2015, AncestryDNA filed an Inter Partes Review Petition (IPR2016-00060) with the United States Patent and ~~Note~~Trademark ~~7 “Debt”~~Office, inchallenging the ~~Notes~~validity of claims 1-20, 39-41, 43-47, and 49 of U.S. Patent No. 8,221,381. Ancestry DNA intends to defend the ~~Consolidated~~litigation ~~Financial~~vigorously. ~~Statements~~While ~~included~~no inassurances can be given as to outcomes or liability, if any, we do not believe that this ~~Annual~~litigation ~~Report.~~will be resolved in a manner that would have a material adverse effect on our financial statements.

28 32

Table of Contents

~~Item~~On 6July 30, 2015 DNA Genotek, Inc. ~~Selected~~(“Genotek”) ~~Financial~~filed ~~Data~~a complaint in the United States District Court for the District of Delaware against Spectrum DNA, Spectrum Solutions L.L.C., and Spectrum Packaging L.L.C. (collectively “Spectrum”) (Case No. 1:15-cv-00661-SLR). The complaint alleges that Spectrum’s sale of the saliva collection device created by Ancestry DNA.com, LLC constitutes infringement of U.S. Patent No. 8,221,381. On January 22, 2016, Genotek filed a first amended complaint that added causes of action for false advertising and false designation of origin. While Ancestry is not a party to this lawsuit, Ancestry has agreed to indemnify Spectrum against Genotek’s patent infringement claims. On August 24, 2015, Genotek filed a preliminary injunction motion seeking to enjoin Spectrum’s sales of saliva collection devices to parties other than Ancestry DNA.com, LLC. On September 4, 2015, Spectrum filed a motion to dismiss for lack of personal jurisdiction. On February 4, 2016, the Court issued an order denying both motions without prejudice and authorizing Genotek to pursue jurisdictional discovery. Ancestry DNA intends to defend the litigation vigorously. While no assurances can be given as to outcomes or liability, if any, we do not believe that this litigation will be resolved in a manner that would have a material adverse effect on our financial statements. The outcome of either of these Genotek matters is uncertain and cannot be predicted with any certainty.

WeOn ~~operated~~November as16, 2015, Ancestry.com Operations Inc. and Ancestry.com DNA, LLC (~~the~~collectively “~~Predecessor~~Ancestry”) ~~until~~filed ~~December 28, 2012 when~~ a ~~company~~complaint ~~controlled~~against byDNA ~~Permira~~Diagnostic ~~funds~~Center, ~~and co-investors~~Inc. (~~the~~ “~~Sponsors~~DDC”) ~~acquired~~in the ~~Predecessor~~United (States District Court for the ~~“Transaction”).~~Southern AsDistrict aof ~~result~~Ohio for trademark infringement, ~~our~~unfair ~~fiscal~~competition, ~~year~~false ~~2012~~advertising, isand ~~divided~~breach ~~into~~of acontract ~~Successor~~(Case ~~period~~No. ~~from~~1:15-cv-00737-SSB-SKB). Ancestry’s ~~December 29,~~claims ~~2012~~relate to ~~December 31,~~DDC’s ~~2012~~unauthorized ~~and~~use aof ~~Predecessor~~Ancestry’s ~~period~~registered ~~from January 1,~~Ancestry ~~2012~~and toAncestryDNA ~~December 28,~~trademarks ~~2012.~~in ~~The~~its ~~following~~advertisements ~~tables~~for ~~summarize~~a ~~selected~~competing ~~consolidated~~product ~~historical~~and ~~financial~~its ~~and~~use ~~operating~~of ~~data~~close ~~for~~variations ~~the~~of ~~periods~~Ancestry’s ~~indicated.~~registered ~~The~~trademarks, ~~summarized~~which ~~Consolidated~~Ancestry ~~Balance~~contends ~~Sheet~~has ~~data~~created isconsumer ~~presented~~confusion. Ancestry’s ~~for~~claims ~~the~~are ~~Successor periods~~also asbased upon DDC’s breach of ~~December 31,~~a ~~2014,~~prior ~~2013~~agreement ~~and~~with ~~2012~~Ancestry ~~and~~that ~~the~~it ~~Predecessor~~would ~~periods~~cease asthe ofallegedly ~~December 31,~~infringing ~~2011~~conduct and ~~2010~~false advertising. On ~~The~~January ~~summarized~~19, ~~Consolidated~~2016, ~~Statements~~DDC offiled ~~Operations~~its ~~data~~Answer ~~presented~~to ~~below~~Ancestry’s ~~for~~Complaint ~~the~~and ~~Successor~~filed ~~years~~several ~~ended~~Counterclaims, ~~December 31~~including Counterclaims for trademark infringement, ~~2014~~unfair ~~and 2013~~competition, ~~the~~and ~~Successor~~for ~~period~~cancellation ~~from~~of ~~December 29,~~Ancestry’s ~~2012~~registered toAncestryDNA ~~December 31,~~trademark. ~~2012,~~DDC’s ~~the~~Counterclaims ~~Predecessor~~are ~~period~~based ~~from~~upon ~~January 1,~~its ~~2012~~use toand ~~December 28~~registration of the mark AncestryByDNA, ~~2012~~notwithstanding ~~and~~Ancestry’s prior use of the ~~Predecessor~~Ancestry ~~years~~trademark ~~ended~~since ~~December 31,~~1983. Ancestry ~~2011and~~has ~~2010~~also ~~have~~filed ~~been~~a ~~derived~~motion ~~from~~for ~~our Consolidated~~a ~~Financial~~preliminary ~~Statements~~injunction on its claims, ~~which~~the ~~have~~preliminary ~~been~~injunction ~~audited~~hearing bywas ~~Ernst &~~held ~~Young~~on ~~LLP~~January 29, an2016, ~~independent~~and ~~registered~~DDC ~~public~~has ~~accounting~~filed ~~firm.~~an ~~Due~~opposition to the ~~Transaction~~motion. On February 16, the ~~results~~Magistrate ofJudge ~~the~~granted ~~Successor~~Ancestry’s ~~are~~motion ~~not~~in ~~comparable~~part, ~~with~~enjoining ~~the~~DDC ~~results~~from ofusing the ~~Predecessor~~trademarks “Ancestry,” “Ancestry DNA” and/or “DNA Ancestry. ~~You~~” ~~should~~Both ~~read~~parties have the ~~selected~~right ~~consolidated~~to ~~financial~~appeal ~~data~~the ~~presented~~decision onto the ~~following~~District ~~pages~~Judge. inWhile ~~conjunction~~we ~~with~~cannot ~~our~~assure ~~Consolidated~~the ~~Financial~~ultimate ~~Statements~~outcome ~~and~~of ~~related~~this ~~Notes~~litigation, ~~and~~we ~~“Management’s~~do ~~Discussion~~not ~~and~~believe ~~Analysis~~it ofwill ~~Financial~~be ~~Condition~~resolved ~~and Results~~in ofa ~~Operations.”~~manner that would have a material adverse effect on our business.

	Successor						Predecessor (1)
	As of December 31,
	2014		2013		2012		2011		2010
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	108,494	$	86,554	$	35,651	$	48,998	$	65,519
Total assets		1,752,471		1,904,742		2,077,454		493,849		522,186
Deferred revenues		145,010		137,864		116,953		108,654		89,301
Long-term obligations(2)		872,237		906,380		943,312		10,429		498
Total liabilities		1,256,744		1,364,045		1,468,108		183,340		158,319
Total member’s interests/stockholders’ equity(3)		495,727		540,697		609,346		310,509		363,867

As part of the acquisition of Archives.com from Inflection LLC, completed in August 2012, a Marketing Agreement between Inflection LLC and Z-CORP dba OneGreatFamily.com (“OGF”) was assigned to Ancestry.com Operations Inc. In 2014, OGF expressed concerns it was owed monies and demanded an accounting, which the Company offered. After refusing the Company’s offer to provide an accounting under the Marketing Agreement, on or about October 10, 2014, OGF initiated a lawsuit in the Fourth Judicial District Court of the State of Utah against Ancestry.com Inc. and Ancestry.com Operations Inc. The suit is captioned Z-CORP et al. v. Ancestry.com Inc. et al. (Civil No. 140401466), claiming alleged breach of contract, breach of implied covenant of good faith and fair dealing, conversion and intentional interference with prospective economic relations. OGF alleged damages totaling over $30 million, plus punitive damages in an unspecified amount. On or about November 13, 2014 Ancestry.com filed a motion to dismiss the complaint in its entirety for failing to state claims upon which relief may be granted. The Court heard oral arguments on the motion to dismiss on March 9, 2015. At the hearing, OGF conceded the law had changed regarding its intentional interference claim and it was dismissed without prejudice by consent of both parties. On April 1, 2015, the court issued a ruling granting the motion to dismiss as to the remaining claims, with prejudice and on the merits. On May 13, 2015, OGF appealed the court’s ruling to the Utah Supreme Court, which subsequently assigned the appeal to the Utah Court of Appeals. OGF submitted their initial brief on September 4, 2015, and we filed our initial brief seeking to affirm the trial court on November 6, 2015. OGF filed a reply brief on January 8, 2016. OGF is appealing only the trial court’s dismissal of OGF’s claims for breach of contract, breach of implied covenant of good faith and fair dealing, and punitive damages. The Utah Court of Appeals has not ruled on the appeal, but oral arguments have been scheduled for May 31, 2016. While we cannot assure the ultimate outcome of this matter, we do not believe that it will be resolved in a manner that would have a material adverse effect on our business

(1) We operated as the Predecessor until December 28, 2012 when a company controlled by the Sponsors acquired the Predecessor. As a result of the Transaction, the balance sheet data presented is not comparable between the Predecessor and Successor periods.33

~~(2)~~Table ~~Long-term obligations includes the current and long-term portions~~ of debt outstanding in the years presented, and the amounts payable under capital lease obligations as of December 31, 2012, 2011 and 2010. Long-term obligations does not include $400 million in senior unsecured PIK Notes issued by our parent company, Holdings LLC. While not required, Ancestry.com LLC intends to make distributions to its parent related to the PIK Notes.Contents

~~(3)~~We Inhave ~~connection~~and may become party to various other legal proceedings and other claims that arise in the ordinary course of business or otherwise in the future. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. While we cannot assure the ~~Transaction~~ultimate outcome of any legal proceeding or contingency in which we are or may become involved, we ~~were~~do ~~recapitalized.~~not Asbelieve that any pending legal claim or proceeding arising in the ordinary course will be resolved in a ~~result,~~manner that would have a material adverse effect on our business. Although we consider the ~~capital~~likelihood ~~structure~~of such an outcome to be remote, if one or more of these legal matters resulted in an adverse money judgment against us, such a judgment could have a material adverse effect on our ~~Predecessor~~operating isresults ~~not~~and ~~comparable~~financial conditions and may result in us being required to ~~that~~pay significant monetary damages. See the risk factors “Expenses or liabilities resulting from litigation could materially adversely affect our results of operations and financial condition” and “Intellectual property claims against us could be costly and result in the ~~Successor~~loss of significant rights related to, among other things, our websites, content indexes, and marketing and advertising activities,” under the heading “Risk Factors.”

	Successor									Predecessor (1)
	Year Ended December 31,(2)						Period from			Period from		Year Ended December 31,
	2014			2013			Dec. 29, 2012to Dec. 31, 2012			Jan. 1, 2012to Dec. 28, 2012		2011		2010
	(in thousands)
Operations Data:
Subscription revenues	$	553,810		$	499,557		$	3,194		$	451,744	$	377,364	$	281,670
Product and other revenues		65,734			40,834			264			31,883		22,297		19,261
Total revenues		619,544			540,391			3,458			483,627		399,661		300,931
Total cost of revenues		139,553			115,442			823			85,903		66,508		52,107
Total operating expenses		471,409			471,710			105,904			285,235		237,687		188,218
Income (loss) from operations		8,582			(46,761	)		(103,269	)		112,489		95,466		60,606
Net income (loss)		(18,728	)		(79,700	)		(72,675	)		70,789		62,895		36,845

Appraisal Litigation (In re: Appraisal of Ancestry.com Inc.)

On October 21, 2012, the our predecessor entered into a definitive merger agreement with Global Generations Merger Sub Inc. and our parent company, Ancestry US Holdings Inc., to acquire our predecessor entity for $32 per share of common stock (1the “Merger”). WeFollowing ~~operated~~the asconsummation of the ~~Predecessor~~Merger ~~until~~on December 28, 2012, ~~when~~three aformer ~~company~~shareholders, ~~controlled~~who, bycombined, owned approximately 1.4 million shares of the ~~Sponsors~~predecessor ~~acquired~~entity’s common stock, instituted two separate appraisal proceedings against Ancestry.com Inc. in the ~~Predecessor~~Court of Chancery of the State of Delaware pursuant to Del. AsC. a§ ~~result~~262: Merion Capital, L.P. v. Ancestry.com, Inc. (C.A. No. 8173) and Merlin Partners LP et al. v. Ancestry.com Inc. (C.A. No. 8175). The two appraisal petitions alleged that the $32 per share price paid to the predecessor entity’s shareholders in the Merger did not represent our ~~fiscal~~fair ~~year~~value ~~2012~~on isthe ~~divided~~date ~~into~~the aMerger ~~Successor~~was ~~period~~consummated. ~~from~~On ~~December~~June 24, 292013, ~~2012~~the toCourt ~~December~~consolidated 31the two pending appraisal proceedings as In re: Appraisal of Ancestry.com Inc. On February 9, ~~2012~~2015, ~~and~~the aCourt ~~Predecessor~~issued ~~period~~an order directing us to pay the fair value of $32 per share plus interest from ~~January~~the 1closing of the Merger through the date of payment. Therefore, ~~2012~~on toFebruary ~~December~~9, 282015, ~~2012~~we paid a total of $51.1 ~~Operational~~million, ~~data~~which ~~presented~~included releasing $45.3 million of restricted cash for the ~~Successor~~fair ~~and~~value ~~Predecessor~~of ~~periods~~$32 isper ~~not~~share ~~necessarily~~plus ~~comparable~~$5.8 ~~due~~million tofor ~~the~~accrued ~~Transaction~~interest.

~~(2) Income from operations and net loss for the year ended December 31, 2014 include $10~~Item 4.6 ~~million~~Mine ofSafety accrued interest to be paid on restricted cash held pending resolution of the shareholder appraisal litigation, professional service fees related to litigation and costs associated with the return-of-capital distribution paid in February 2014 by our parent company, Holdings LLC. Loss from operations and net loss for the year ended December 31, 2013 include $5.6 million of professional services related to litigation, reorganizing our corporate structure, registering the Notes with the SEC, costs associated with the return-of-capital distribution paid in September 2013 by our parent company, Holdings LLC, and costs related to the settlement of litigation.Disclosures

29Not applicable.

~~Table of Contents~~34

	Successor						Predecessor(1)
	Year Ended December 31,				Period from		Period from		Year Ended December 31,
	2014		2013		Dec. 29, 2012to Dec. 31, 2012		Jan. 1, 2012to Dec. 28, 2012		2011		2010
	(in thousands)
Other Financial Data:
Non-GAAP revenues (2)	$	619,544	$	561,506	$	4,008	$	483,627	$	399,661	$	300,931
Adjusted EBITDA(3)		214,839		211,583		1,233		177,592		144,807		100,974
Free cash flow(4)		93,668		132,920		1,233		104,754		106,355		60,359

Table of Contents

~~(1)~~PART We operated as the Predecessor until December 28, 2012 when a company controlled by the Sponsors acquired the Predecessor. As a result, our fiscal year 2012 is divided into a Successor period from December 29, 2012 to December 31, 2012 and a Predecessor period from January 1, 2012 to December 28, 2012. Operational data presented for the Successor and Predecessor periods is not necessarily comparable due to the Transaction.II

~~(2) Non-GAAP revenues~~Item 5. WeMarket ~~define~~for ~~non-GAAP~~Registrant’s ~~revenues~~Common ~~as the revenues that would have been recognized~~Equity, ~~except~~Related ~~for~~Stockholder ~~the~~Matters ~~write-down~~and ofIssuer ~~deferred~~Purchases ~~revenue to fair value as a result~~ of ~~the~~Equity ~~application of purchase accounting for the Transaction. Non-GAAP revenues is calculated as total revenues plus the effects of non-cash adjustments to revenue from purchase accounting.~~Securities

~~(3)~~Market Adjusted EBITDA. We define adjusted EBITDA as net income (loss) plus non-cash adjustments to revenue from purchase accounting, interest expense, net; other (income) expense, net; income tax expense (benefit); non-cash charges including depreciation, amortization and stock-based compensation expense; and expenses associated with the Transaction.Information

~~(4)~~Our ~~Free~~common ~~cash~~interests ~~flow.~~are Weprivately ~~define~~held; ~~free cash flow~~ as ~~net~~such ~~income~~there ~~(loss)~~is ~~plus~~no ~~non-cash~~established ~~adjustments~~public totrading ~~revenue~~market from purchase accounting, interest expense, net; other (income) expense, net; income tax expense (benefit); non-cash charges including depreciation, amortization and stock-based compensation expense; and expenses associated with the Transaction; and minus capitalization of content databases, purchases of property and equipment and cash received (paid) for ~~income~~our ~~taxes~~common ~~and interest~~interests.

We believe non-GAAP revenues, adjusted EBITDA and free cash flow are useful to investors as supplemental measures to evaluate the overall operating performance of the Company. Non-GAAP revenues, adjusted EBITDA and free cash flow are financial data that are not calculated in accordance with accounting principles generally accepted in the United States (“GAAP”). The tables below provide a reconciliation of these non-GAAP financial measures to total revenues or net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP. We prepare non-GAAP revenues, adjusted EBITDA and free cash flow to eliminate the impact of items that we do not consider indicative of our core operating performance. We encourage you to evaluate these adjustments and the reasons we consider them appropriate, as well as the material limitations of non-GAAP measures. Holders

~~Our~~As ~~management uses non-GAAP revenues, adjusted EBITDA and free cash flow as measures~~ of ~~operating performance~~February 19, ~~for planning purposes~~2016, ~~including~~all ~~the preparation~~ of ~~our annual operating budget, to allocate resources to enhance~~ the ~~financial~~common ~~performance~~interests of ~~our~~Ancestry.com ~~business,~~LLC towere ~~evaluate~~owned ~~the~~by ~~effectiveness of~~ our ~~business~~ ~~strategies~~parent ~~and~~company, inAncestry.com ~~communications~~Holdings ~~with~~LLC ~~our~~(“Holdings ~~Operating Committee concerning our financial performance~~LLC”). ~~Adjusted~~Holdings ~~EBITDA~~LLC ~~together~~is ~~with non-GAAP revenues has also been used as~~ a ~~financial~~holding ~~performance~~company objective in determining the bonus pool under our recent performance incentive programs. Management believes that the use of non-GAAP revenues, adjusted EBITDA and free cash flow provides consistency and comparability with ~~our~~no ~~past~~material ~~financial performance, facilitates period-to-period comparisons of~~ operations and ~~also~~limited ~~facilitates~~assets ~~comparisons with~~ other ~~peer~~than ~~companies,~~its ~~many~~ownership of ~~which~~the ~~use~~membership ~~similar~~interests ~~non-GAAP~~of ~~financial~~Ancestry.com ~~measures to supplement their GAAP results~~LLC. ~~Management~~Holdings ~~believes~~LLC ~~that~~has itno ismaterial ~~useful~~liabilities outstanding to ~~exclude~~third ~~non-cash~~parties ~~charges~~other ~~such~~than asthe ~~purchase accounting~~senior ~~adjustments,~~unsecured ~~depreciation, amortization and stock~~payment-~~based compensation from non~~in-~~GAAP~~kind ~~revenues,~~toggle ~~adjusted~~notes ~~EBITDA and free cash flow because~~ (i) the ~~amount~~“PIK ~~of such non-cash expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii~~Notes”) ~~such~~ ~~expenses can vary significantly between periods~~ as adiscussed ~~result~~further ofwithin ~~new~~Note ~~acquisitions,~~8 ~~full amortization~~ of ~~previously acquired tangible and intangible assets or~~ the ~~timing~~Consolidated ~~of stock-based~~Financial ~~awards,~~Statements ~~as the case may be~~herein. Management also believes it is useful to exclude Transaction-related expenses from adjusted EBITDA and free cash flow because such expenses do not correlate to the underlying performance of our business and are non-recurring.

Although non-GAAP revenues, adjusted EBITDA and free cash flow are frequently used by investors and securities analysts in their evaluations of companies, non-GAAP revenues, adjusted EBITDA and free cash flow each have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Dividends

~~Some~~In 2015, we declared and paid our parent, Holdings LLC, return-of-capital ~~these~~distributions ~~limitations~~of ~~are:~~$254.4 million of which $216.0 million was paid to its indirect parent entity's shareholders and vested stock-based award holders and of which $38.4 million was used to pay accumulated interest on the PIK Notes due October 15, 2018. In 2014, we declared and paid Holdings LLC return-of-capital distributions of $37.6 million to pay accumulated interest on the PIK Notes.

•Interest ~~non~~on the PIK Notes is payable semi-~~GAAP~~annually ~~revenues~~in ~~does~~arrears ~~not~~on ~~include~~April ~~the~~15 ~~impact~~and ofOctober ~~purchase~~15 ~~accounting~~each ~~adjustments~~year through maturity. Subject to cash availability and restricted payment capacity, ~~which~~Holdings ~~are~~LLC ~~intended~~will be entitled to ~~reflect~~pay all or a portion of the ~~fair~~interest ~~value~~payment by increasing the principal amount of the ~~recognized~~notes ~~deferred~~or ~~revenue~~issuing new notes in an amount equal to the interest payment for the applicable interest period (“PIK Interest”). Cash interest on the PIK Notes will accrue at the ~~date~~rate of ~~the~~9.625% per ~~Transaction~~annum; PIK Interest will accrue at the rate of 10.375% per annum.

•The ~~adjusted~~PIK ~~EBITDA~~Notes are senior unsecured obligations of Holdings LLC and ~~free~~are ~~cash~~structurally ~~flow~~subordinated doto all our existing and future indebtedness. Additionally, we did not ~~reflect~~guarantee the PIK Notes, nor were any of our ~~future~~assets ~~requirements~~pledged as collateral for ~~contractual~~the ~~commitments;~~PIK Notes. As we are not an obligor or a guarantor on the PIK Notes, the debt is recorded only in the financial statements of Holdings LLC and is not reflected in the Consolidated Financial Statements of Ancestry.com LLC. While not required, we intend to make future payments to Holdings LLC in order to fund payments related to the PIK Notes, provided that such payments are permitted under the covenants of our credit facilities and our 11% senior notes due in December 2020 (the “Notes”). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facility” and Note 8 ,“Debt,” in the Notes to the Consolidated Financial Statements included in this Annual Report.

~~• adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures;~~35

•Table ~~adjusted~~of ~~EBITDA and free cash flow do not reflect changes in, or cash requirements for, our working capital;~~Contents

30Item 6. Selected Financial Data

~~Table~~We operated as Ancestry.com Inc. (the “Predecessor”) until December 28, 2012 when a company controlled by Permira funds and co-investors (the “Sponsors”) acquired the Predecessor (the “Transaction”). As a result, our fiscal year 2012 is divided into a Successor period from December 29, 2012 to December 31, 2012 and a Predecessor period from January 1, 2012 to December 28, 2012. The following tables summarize selected consolidated historical financial and operating data for the periods indicated. The summarized Consolidated Balance Sheet data is presented for the Successor periods as of ~~Contents~~December 31, 2015, 2014, 2013 and 2012 and the Predecessor period as of December 31, 2011. The summarized Consolidated Statements of Operations data presented below for the Successor years ended December 31, 2015, 2014 and 2013, the Successor period from December 29, 2012 to December 31, 2012, the Predecessor period from January 1, 2012 to December 28, 2012 and the Predecessor year ended December 31, 2011 have been derived from our Consolidated Financial Statements, which have been audited by Ernst & Young LLP, an independent registered public accounting firm. Due to the Transaction, the results of the Successor are not comparable with the results of the Predecessor. You should read the selected consolidated financial data presented on the following pages in conjunction with our Consolidated Financial Statements and related Notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Additionally certain prior period amounts have been reclassified to conform to the current year presentation of the financial statements. See Note 1 in the Consolidated Financial Statements for further description.

• adjusted EBITDA does not reflect interest income or interest expense;



	Successor								Predecessor⁽¹⁾
	As of December 31,
	2015		2014		2013		2012		2011
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	128,157	$	108,494	$	86,554	$	35,651	$	48,998
Total assets	1,621,760		1,720,897		1,852,828		2,039,455		489,770
Deferred revenues	171,822		145,010		137,864		116,953		108,654
Long-term obligations⁽²⁾	996,343		845,940		874,816		905,313		10,429
Total liabilities	1,340,842		1,225,170		1,312,131		1,430,109		179,261
Total member’s interests/stockholders’ equity⁽³⁾	280,918		495,727		540,697		609,346		310,509

•(1) ~~adjusted~~We ~~EBITDA~~operated ~~does~~as the Predecessor until December 28, 2012 when a company controlled by the Sponsors acquired the Predecessor. As a result of the Transaction, the balance sheet data presented is not ~~reflect~~comparable ~~cash~~between ~~requirements~~the ~~for~~Predecessor ~~income~~and ~~taxes;~~Successor periods.

•(2) ~~adjusted~~Long-term ~~EBITDA~~obligations includes the current and ~~free~~long-term ~~cash~~portions ~~flow~~of dodebt ~~not~~outstanding ~~reflect~~in the ~~non-cash~~years ~~component~~presented, net of ~~employee~~unamortized ~~compensation;~~discount and deferred financing costs, and the amounts payable under capital lease obligations as of December 31, 2012 and 2011. Long-term obligations does not include $390.2 million in senior unsecured PIK Notes issued by our parent company, Holdings LLC. While not required, Ancestry.com LLC has made and intends to pay future distributions or loans to its parent related to the PIK Notes.

•(3) ~~although~~In ~~depreciation~~connection ~~and~~with ~~amortization~~the ~~are non-cash charges~~Transaction, ~~the~~we ~~assets~~were ~~being~~recapitalized. ~~depreciated~~As ora ~~amortized~~result, ~~will often have to be replaced in~~ the ~~future,~~capital ~~and~~structure ~~adjusted~~of ~~EBITDA~~our ~~does~~Predecessor is not ~~reflect~~comparable ~~any~~to ~~cash~~that ~~requirements~~of ~~for~~the ~~these replacements; and~~Successor.

~~• other companies in our industry may calculate adjusted EBITDA or free cash flow or similarly titled measures differently than we do, limiting their usefulness as comparative measures.~~36

~~The~~Table ~~following table presents a reconciliation~~ of ~~non-GAAP revenues to total revenues, the most comparable GAAP measure, for each of the periods identified.~~ Contents

	Successor	~~Successor~~											Predecessor(1)
		Year Ended December 31,						Period from					Period from		Year Ended December 31,
	Year Ended December 31,(2)									Period From Dec. 29, 2012to Dec. 31, 2012			Period From Jan. 1, 2012to Dec. 28, 2012		Year Ended December 31,
		2014			2013			Dec. 29, 2012 to Dec. 31, 2012					Jan. 1, 2012 to Dec. 28, 2012		2011		2010
	2015			2014			2013								2011
	(in thousands)	~~(in thousands)~~
Reconciliation of Non-GAAP revenues to total revenues
Operations Data:
Total revenues		$	619,544		$	540,391		$	3,458				$	483,627	$	399,661	$	300,931
Subscription revenues	$	584,075		$	553,810		$	499,557		$	3,194		$	451,744	$	377,364
Non-cash revenue adjustment (2)			—			21,115			550					—		—		—
Service and other revenues	99,030			65,734			40,834			264			31,883		22,297
Non-GAAP revenues		$	619,544		$	561,506		$	4,008				$	483,627	$	399,661	$	300,931
Total revenues	683,105			619,544			540,391			3,458			483,627		399,661
Total cost of revenues	163,719			139,553			115,442			823			85,903		66,508
Total operating expenses	431,944			471,409			471,710			105,904			285,235		237,687
Income (loss) from operations	87,442			8,582			(46,761		)	(103,269		)	112,489		95,466
Net income (loss)	29,418			(18,728		)	(79,700		)	(72,675		)	70,789		62,895

⁽¹⁾

We operated as the Predecessor until December 28, 2012 when a company controlled by the Sponsors acquired the Predecessor. As a result, our fiscal year 2012 is divided into a Successor period from December 29, 2012 to December 31, 2012 and a Predecessor period from January 1, 2012 to December 28, 2012. Operational data presented for the Successor and Predecessor periods is not necessarily comparable due to the Transaction.

(2) ~~Represents~~Income (loss) from operations and net income (loss) for the years ended December 31, 2015, 2014 and 2013 include $4.4 million, $10.6 million, and $5.6 million of non-~~cash~~recurring ~~adjustments~~costs, respectively. For the year end December 31, 2015, income from operations and net income include $4.4 million of professional service fees related primarily to ~~revenue~~litigation, orreimbursement for certain legal and accounting costs incurred by one of our Sponsors and costs associated with a return-of-capital distribution declared in August 2015 to our parent company, Ancestry.com Holdings LLC. For the ~~revenues~~year ~~that~~end ~~would~~December ~~have~~31, ~~been~~2014, ~~recognized~~income from operations and net loss include $10.6 million of accrued interest paid on restricted cash held pending resolution of the shareholder appraisal litigation, ~~except~~professional ~~for~~service fees related to litigation and costs associated with the ~~write~~return-~~down~~of-capital distribution paid in February 2014 by Holdings LLC. Loss from operations and net loss for the year ended December 31, 2013 include $5.6 million of ~~deferred~~professional ~~revenue~~services related to ~~fair~~litigation, ~~value~~reorganizing asour acorporate ~~result~~structure, ofregistering the ~~application~~Notes with the SEC, costs associated with the return-of-capital ~~purchase~~distribution ~~accounting~~paid ~~for~~in September 2013 by Holdings LLC, and costs related to the ~~Transaction~~settlement of litigation.

31 37

Table of Contents

The following table presents a reconciliation of our adjusted EBITDA and free cash flow to net income (loss), the most comparable GAAP measure, for each of the periods identified.



	Successor								Predecessor⁽¹⁾
	Year Ended December 31,						Period from Dec. 29, 2012 to Dec. 31, 2012		Period from Jan. 1, 2012 to Dec. 28, 2012		Year Ended December 31,
	2015		2014		2013		Period from Dec. 29, 2012 to Dec. 31, 2012		Period from Jan. 1, 2012 to Dec. 28, 2012		2011
	(in thousands)
Other Financial Data:
Non-GAAP revenues⁽²⁾	$	683,105	$	619,544	$	561,506	$	4,008	$	483,627	$	399,661
Adjusted EBITDA⁽³⁾	258,595		214,839		211,583		1,233		177,592		144,807
Free cash flow⁽⁴⁾	124,800		93,668		132,920		1,233		104,754		106,355

	Successor									Predecessor(1)
	Year Ended December 31,(2)						Period from			Period from			Year Ended December 31,
	2014			2013			Dec. 29, 2012 to Dec. 31, 2012			Jan. 1, 2012 to Dec. 28, 2012			2011			2010
										(in thousands)
Reconciliation of adjusted EBITDA and free cash flow to net income (loss):
Net income (loss)	$	(18,728	)	$	(79,700	)	$	(72,675	)	$	70,789		$	62,895		$	36,845
Non-cash revenue adjustment (3)		—			21,115			550			—			—			—
Interest expense, net		69,680			97,837			730			1,065			589			4,697
Other (income) expense, net		368			655			—			(742	)		637			(439	)
Income tax expense (benefit)		(42,738	)		(65,553	)		(31,324	)		41,377			31,345			19,503
Depreciation		21,498			16,931			—			14,699			13,450			11,773
Amortization		176,755			211,974			1,688			27,879			25,916			23,526
Stock-based compensation expense		8,004			8,324			—			15,421			9,975			5,069
Transaction-related expenses (4)		—			—			102,264			7,104			—			—
Adjusted EBITDA	$	214,839		$	211,583		$	1,233		$	177,592		$	144,807		$	100,974
Capitalization of content databases		(37,566	)		(22,239	)		—			(23,538	)		(20,408	)		(13,874	)
Purchases of property and equipment		(21,821	)		(26,714	)		—			(20,776	)		(13,895	)		(12,968	)
Cash paid for interest		(60,450	)		(70,311	)		—			(1,368	)		(466	)		(2,645	)
Cash received (paid) for income taxes		(1,334	)		40,601			—			(27,156	)		(3,683	)		(11,128	)
Free cash flow (5)	$	93,668		$	132,920		$	1,233		$	104,754		$	106,355		$	60,359

⁽¹⁾

(12) WeNon-GAAP ~~operated~~revenues. asWe ~~the~~define ~~Predecessor~~non-GAAP ~~until~~revenues ~~December~~as ~~28, 2012 when a company controlled by~~ the ~~Sponsors~~revenues ~~acquired~~that ~~the~~would ~~Predecessor.~~have Asbeen ~~a result~~recognized, ~~our~~except ~~fiscal~~for ~~year~~the ~~2012~~write-down isof ~~divided~~deferred ~~into~~revenue ~~a Successor period from December 29, 2012~~ to ~~December~~fair ~~31,~~value ~~2012~~as ~~and~~ a ~~Predecessor~~result ~~period~~of ~~from~~the ~~January~~application 1,of ~~2012~~purchase toaccounting ~~December~~for ~~28,~~the ~~2012~~Transaction. ~~Operational~~Non-GAAP ~~data~~revenues ~~presented~~is ~~for~~calculated ~~the~~as ~~Successor~~total ~~and~~revenues ~~Predecessor~~plus ~~periods~~the iseffects ~~not~~of ~~necessarily~~non-cash ~~comparable~~adjustments ~~due~~ to ~~the~~revenue ~~Transaction~~from purchase accounting.

(23) ~~Net~~Adjusted ~~loss~~EBITDA. ~~and~~We ~~therefore~~define adjusted EBITDA ~~and~~as ~~free~~net ~~cash~~income ~~flow~~(loss) ~~for~~plus ~~the twelve months ended December 31, 2014 include $10.6 million of accrued interest to be paid on restricted~~ non-cash ~~held~~adjustments ~~pending resolution of the shareholder appraisal litigation, professional service fees related~~ to ~~litigation~~revenue ~~and~~from ~~costs~~purchase ~~associated with the return-of-capital distribution paid in February 2014 by our parent company~~accounting, ~~Holdings~~interest ~~LLC. Net loss and therefore adjusted EBITDA and free cash flow for the twelve months ended December 31~~expense, ~~2013~~net; ~~include~~other ~~$5.6~~(income) ~~million of professional services related to litigation~~expense, ~~reorganizing~~net; ~~our~~income ~~corporate~~tax ~~structure,~~expense ~~registering~~(benefit); ~~our~~and ~~existing Notes with the SEC, costs associated with the return~~non-~~of-capital~~cash ~~distribution~~charges ~~paid~~including ~~in September 2013 by our parent company~~depreciation, ~~Holdings LLC~~amortization, and ~~costs~~stock-based ~~related~~compensation ~~to the settlement of litigation~~expense.

(34) ~~Represents~~Free cash flow. We define free cash flow as net income (loss) plus non-cash adjustments to revenue orfrom ~~the~~purchase ~~revenues~~accounting, ~~that~~interest ~~would~~expense, ~~have~~net; ~~been~~other ~~recognized~~(income) expense, ~~except~~net; ~~for~~income ~~the~~tax ~~write~~expense (benefit); and non-~~down~~cash ofcharges ~~deferred~~including ~~revenue~~depreciation, toamortization, ~~fair~~and ~~value~~stock-based ascompensation aexpense; ~~result~~minus capitalization of ~~the~~content ~~application~~databases, purchases of ~~purchase~~property ~~accounting~~and equipment and cash received (paid) for ~~the~~income ~~Transaction~~taxes and interest.

~~(4)~~We ~~Transaction~~believe non-~~related~~GAAP ~~expenses~~revenues, ~~for~~adjusted ~~the~~EBITDA ~~period~~and ~~from~~free ~~December~~cash ~~29,~~flow ~~2012~~are useful to ~~December~~investors 31as supplemental measures to evaluate our overall operating performance. Non-GAAP revenues, ~~2012~~adjusted ~~include~~EBITDA ~~$53~~and free cash flow are financial data that are not calculated in accordance with accounting standards generally accepted in the United States of America (“GAAP”).1 ~~million~~The tables below provide a reconciliation of ~~stock~~these non-~~based~~GAAP ~~compensation~~financial ~~expense~~measures ~~due~~ to total revenues or net income (loss), the ~~acceleration~~most ofdirectly ~~vesting~~comparable ~~for~~financial ~~outstanding~~measure ~~Predecessor~~calculated ~~stock~~and presented in accordance with GAAP. We prepare non-~~based~~GAAP ~~awards~~revenues, ~~upon~~adjusted ~~closing~~EBITDA and free cash flow to eliminate the impact of items that we do not consider indicative of our core operating performance. We encourage you to evaluate these adjustments and the ~~Transaction~~reasons we consider them appropriate, as well as the material limitations of non-GAAP measures.

~~(5)~~Our ~~Free~~management uses non-GAAP revenues, adjusted EBITDA and free cash flow as measures of operating performance, for planning purposes, including the ~~twelve~~preparation ~~months~~of ~~ended~~our ~~December~~annual 31operating budget, ~~2014~~to ~~does~~allocate ~~not~~resources ~~include~~to ~~$37.6~~enhance ~~million~~the ~~for~~financial ~~distributions~~performance ~~paid~~of our business, to evaluate the effectiveness of our ~~parent~~business ~~company~~strategies and in communications with our Operating Committee concerning our financial performance. Adjusted EBITDA together with non-GAAP revenues has also been used as a financial performance objective in determining the bonus pool under our recent performance incentive programs. Management believes that the use of non-GAAP revenues, ~~Holdings~~adjusted ~~LLC~~EBITDA and free cash flow provides consistency and comparability with our past financial performance, facilitates period-to-period ~~pay~~comparisons ~~accumulated~~of ~~interest~~operations onand ~~its~~also ~~PIK~~facilitates ~~Notes~~comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. Management believes that it is useful to exclude non-cash charges such as purchase accounting adjustments, depreciation, amortization and stock-based compensation from non-GAAP revenues, adjusted EBITDA and free cash flow because (i) the amount of such non-cash expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions, full amortization of previously acquired tangible and intangible assets or the timing of stock-based awards, as the case may be.

32Although non-GAAP revenues, adjusted EBITDA and free cash flow are frequently used by investors and securities analysts in their evaluations of companies, non-GAAP revenues adjusted EBITDA and free cash flow each have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP.

~~Table~~Some of ~~Contents~~these limitations are:

~~Item~~• 7.non-GAAP ~~Management’s~~revenues ~~Discussion~~does ~~and~~not ~~Analysis~~include the impact of ~~Financial~~purchase ~~Condition~~accounting ~~and~~adjustments, ~~Results~~which are intended to reflect the fair value of ~~Operations~~recognized deferred revenue at the date of the Transaction;

~~Overview~~• adjusted EBITDA and free cash flow do not reflect our future requirements for contractual commitments;

You should read the following discussion together with Item 6 “Selected Financial Data” and our Consolidated Financial Statements and the related Notes included elsewhere in this Annual Report of Ancestry.com LLC and its consolidated subsidiaries (“Ancestry.com LLC”, “Ancestry.com”, “we”, “us”, “Parent” or the “Successor”). This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under “Risk Factors” and elsewhere in this Annual Report. See “Forward-Looking Statements.” 38

~~Company~~Table ~~Overview~~of Contents

~~Ancestry.com~~• isadjusted ~~the~~EBITDA ~~world’s~~does ~~largest~~not ~~online~~reflect ~~family~~our ~~history~~cash ~~resource,~~expenditures ~~with~~or ~~approximately~~future ~~2.1 million~~requirements ~~paying~~for ~~subscribers~~capital around the world to its core Ancestry websites, including its flagship site www.ancestry.com and its Ancestry international websites, as of December 31, 2014. We believe that most people have a fundamental desire to understand who they are and from where they came. Our mission is to help everyone discover, preserve and share their family history. expenditures;

~~The~~• ~~foundation~~adjusted ofEBITDA ~~our~~and ~~service~~free ~~is an~~cash ~~extensive~~flow ~~collection~~do ofnot ~~more~~reflect ~~than~~changes ~~15 billion historical records that we have digitized~~in, ~~indexed~~or ~~and~~cash ~~added~~requirements ~~to our core Ancestry websites. We have developed and acquired efficient and proprietary systems~~ for ~~digitizing handwritten historical documents~~, and we have established relationships with national, state and local government archives, historical societies, religious institutions and private collectors of historical content around the world. These digital records and documents, combined with our ~~proprietary~~working online search technologies and tools, enable our subscribers to research their family history, build their family trees, upload their own records and make meaningful discoveries about the lives of their ancestors. Increasingly, subscriber discoveries are driven by our proprietary technology that provides “hints” of possible record matches to our subscribers. In 2014, approximately 1.2 billion hints were accepted by our subscribers. We believe we provide ongoing value to our subscribers by regularly adding new historical content, by enhancing our services and platforms with new tools and features, by improving the integration between our products and by enabling greater collaboration among our users through the growth of our global community. capital;

~~Subscription~~• ~~revenues~~adjusted ~~from~~EBITDA ~~our~~does ~~core~~not ~~Ancestry~~reflect ~~websites~~interest ~~accounted~~income ~~for~~or ~~approximately 83%~~interest of total revenues for the year-ended December 31, 2014. We generally offer each registered user a 14-day free trial, after which, unless cancelled, we charge the full subscription amount. Subscriptions automatically renew into the existing package and duration selected, unless cancelled. expense;

We• ~~also~~adjusted ~~operate~~EBITDA adoes ~~suite of family history products, which complement our core Ancestry websites. Our AncestryDNA service allows customers to~~ not ~~only~~reflect ~~discover~~cash ~~their~~requirements ~~genetic~~for ~~ethnicity~~income but, in combination with a subscription to a core Ancestry website, to also find relatives with a common ancestral match from amongst our global user base. We also offer other subscription-based services, such as Archives.com, Fold3.com and Newspapers.com. These products and services contribute toward acquiring new subscribers by allowing us to reach consumers with varying family history interests. taxes;

~~Recent~~• ~~Developments~~adjusted EBITDA and free cash flow do not reflect the non-cash component of employee compensation;

~~Appraisal Litigation~~• ~~(In~~although ~~re:~~depreciation ~~Appraisal~~and ofamortization ~~Ancestry.com~~are ~~Inc.)~~non-cash charges, the assets being depreciated or amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for these replacements; and

On• ~~January 5,~~other ~~2015,~~companies ~~the~~in ~~Court~~our ~~issued~~industry anmay ~~Order~~calculate ~~denying~~adjusted ~~our~~EBITDA ~~motion~~or ~~for~~free ~~summary judgment~~cash inflow ~~the~~or ~~litigation~~similarly titled Inmeasures ~~re:~~differently ~~Appraisal~~than ofwe ~~Ancestry.com~~do, ~~Inc.~~limiting Ontheir ~~February 9,~~usefulness ~~2015,~~as ~~the~~comparative ~~Court issued an order directing us to pay the fair value of $32 per share plus interest at the legal rate~~measures. ~~Therefore, on February 9, 2015, we paid a total of $51.1 million which included releasing $45.3 million of restricted cash for the fair value of $32 per share plus $5.8 million for accrued interest.~~

The following table presents a reconciliation of non-GAAP revenues to total revenues, the most comparable GAAP measure, for each of the periods identified.

Key Business Metrics



	Successor								Predecessor⁽¹⁾
	Year Ended December 31,						Period from Dec. 29, 2012 to Dec. 31, 2012		Period from Jan. 1, 2012 to Dec. 28, 2012		Year Ended December 31,
	2015		2014		2013		Period from Dec. 29, 2012 to Dec. 31, 2012		Period from Jan. 1, 2012 to Dec. 28, 2012		2011
			(in thousands)
Reconciliation of Non-GAAP revenues to total revenues
Total revenues	$	683,105	$	619,544	$	540,391	$	3,458	$	483,627	$	399,661
Non-cash revenue adjustment⁽²⁾	—		—		21,115		550		—		—
Non-GAAP revenues	$	683,105	$	619,544	$	561,506	$	4,008	$	483,627	$	399,661

~~Our~~(1) ~~management regularly~~We ~~reviews~~operated aas ~~number~~the ofPredecessor ~~financial~~until ~~and~~December ~~operating metrics~~28, ~~including~~2012 when a company controlled by the ~~following~~Sponsors ~~key~~acquired ~~operating~~the ~~metrics~~Predecessor. toAs ~~evaluate~~a result, our ~~business,~~fiscal ~~determine~~year ~~the~~2012 ~~allocation~~is ofdivided ~~resources~~into a Successor period from December 29, ~~make~~2012 ~~decisions~~to ~~regarding~~December ~~corporate~~31, ~~strategies~~2012 and ~~evaluate~~a ~~forward-looking projections. The~~Predecessor ~~following~~period ~~key~~from ~~operating~~January ~~metrics~~1, ~~reflect~~2012 ~~data~~to ~~with~~December ~~respect~~28, to2012. ~~our~~Operational ~~core~~data ~~Ancestry~~presented ~~websites~~for ~~and~~the ~~exclude~~Successor ~~our~~and ~~other~~Predecessor ~~subscription-based~~periods ~~websites,~~is ~~such~~not asnecessarily ~~Archives.com,~~comparable ~~Fold3.com~~due ~~and~~to ~~Newspapers.com.~~the Transaction.

•(2) ~~Total~~Represents ~~Subscribers.~~non-cash Aadjustments ~~subscriber~~to isrevenue anor ~~individual~~the ~~who~~revenues ~~pays~~that ~~for~~would ~~renewable~~have ~~access~~been orrecognized, ~~redeems~~except afor ~~gift~~the ~~subscription~~write-down ~~to one~~ of ~~our~~deferred ~~core~~revenue ~~Ancestry~~to ~~websites.~~fair ~~Total~~value ~~subscribers~~as isa ~~defined~~result asof the ~~number~~application of ~~subscribers~~purchase ataccounting ~~the~~for ~~end of~~ the ~~period~~Transaction.

• Net Subscriber Additions. Net subscriber additions is the total number of new customers who purchase a subscription or redeem a gift subscription to one of our core Ancestry websites less the total number of subscribers who choose not to renew a completed subscription in the period.39

33Table of Contents

~~Table~~The following table presents a reconciliation of ~~Contents~~our adjusted EBITDA and free cash flow to net income (loss), the most comparable GAAP measure, for the periods presented.

Our key business metrics are presented for the years ended December 31, 2014, 2013 and 2012 as follows (in thousands):



	Successor												Predecessor⁽¹⁾
	Year Ended December 31,									Period from Dec. 29, 2012 to Dec. 31, 2012			Period from Jan. 1, 2012 to Dec. 28, 2012			Year Ended December 31,
	2015			2014			2013			Period from Dec. 29, 2012 to Dec. 31, 2012			Period from Jan. 1, 2012 to Dec. 28, 2012			2011
	(in thousands)
Reconciliation of adjusted EBITDA and free cash flow to net income (loss)⁽²⁾:
Net income (loss)	$	29,418		$	(18,728	)	$	(79,700	)	$	(72,675	)	$	70,789		$	62,895
Non-cash revenue adjustment ⁽³⁾	—			—			21,115			550			—			—
Interest expense, net	81,056			69,680			97,837			730			1,065			589
Other expense (income), net	334			368			655			—			(742		)	637
Income tax expense (benefit)	(23,366		)	(42,738		)	(65,553		)	(31,324		)	41,377			31,345
Depreciation	21,823			21,498			16,931			—			14,699			13,450
Amortization	141,647			176,755			211,974			1,688			27,879			25,916
Stock-based compensation expense	7,683			8,004			8,324			—			15,421			9,975
Transaction-related expense ⁽⁴⁾	—			—			—			102,264			7,104			—
Adjusted EBITDA	$	258,595		$	214,839		$	211,583		$	1,233		$	177,592		$	144,807
Capitalization of content databases	(32,514		)	(37,566		)	(22,239		)	—			(23,538		)	(20,408		)
Purchases of property and equipment	(15,117		)	(21,821		)	(26,714		)	—			(20,776		)	(13,895		)
Cash paid for interest ⁽⁵⁾	(62,831		)	(60,450		)	(70,311		)	—			(1,368		)	(466		)
Cash received (paid) for income taxes	(23,333		)	(1,334		)	40,601			—			(27,156		)	(3,683		)
Free cash flow	$	124,800		$	93,668		$	132,920		$	1,233		$	104,754		$	106,355

	Year Ended December 31,
	2014			2013		2012
Total subscribers		2,115			2,140		2,016
Net subscriber additions		(25	)		124		313

⁽¹⁾

~~The~~(2) ~~following~~Net ~~table~~income ~~presents~~(loss) and therefore adjusted EBITDA and free cash flow for the ~~percentage~~years ended December 31, 2015, 2014 and 2013 include $4.4 million, $10.6 million, and $5.6 million of ~~total~~non-recurring ~~subscribers~~costs. For the year end December 31, 2015, net income and therefore adjusted EBITDA and free cash flow include $4.4 million of professional service fees related primarily to litigation, reimbursement for certain legal and accounting costs incurred by ~~subscription~~one ~~duration~~of asour Sponsors and costs associated with a return-of -capital distribution declared in August 2015 to our parent company, Ancestry.com Holdings LLC. For the year end December 31, 2014, net loss, adjusted EBITDA, and free cash flow include $10.6 million of accrued interest paid on restricted cash held pending resolution of the shareholder appraisal litigation, professional service fees related to litigation and costs associated with the return-of-capital distribution paid in February 2014 by Holdings LLC. Net loss, adjusted EBITDA, and free cash flow for the year ended December 31, 2013 include $5.6 million of professional services related to litigation, reorganizing our corporate structure, registering the Notes with the SEC, costs associated with the return-of-capital distribution paid in September 2013 by Holdings LLC, and ~~2012:~~costs related to the settlement of litigation.

	2014			2013			2012
Annual		40	%		42	%		47	%
Semi-annual		22			23			24
Quarterly		2			3			4
Monthly		36			32			25
Total		100	%		100	%		100	%


⁽³⁾	Represents non-cash adjustments to revenue or the revenues that would have been recognized, except for the write-down of deferred revenue to fair value as a result of the application of purchase accounting for the Transaction.

~~Components~~(4) Transaction-related expenses for the period from December 29, 2012 to December 31, 2012 include $53.1 million of ~~Consolidated~~stock-based ~~Statements~~compensation expense due to the acceleration of ~~Operations~~vesting for outstanding Predecessor stock-based awards upon closing of the Transaction.

~~Revenues~~(5) Cash paid for interest for the years ended December 31, 2015 and 2014 does not include $38.4 million and $37.6 million of payments made to our parent related to the interest obligations on its senior unsecured PIK notes.

Subscription revenues. We derive subscription revenues primarily from providing access to our core Ancestry websites, and we recognize subscription revenues, net of estimated cancellations, ratably over the subscription period. We offer a 14-day free trial to our core Ancestry websites, after which, unless cancelled, we charge the full period subscription amount. No revenue is recognized or allocated to the 14-day free trial period. Amounts received from subscribers for which the performance obligations have not been fulfilled are recorded in deferred revenue. We have established an allowance for sales returns based on historical subscription cancellations. Actual customer subscription cancellations are charged against the allowance or deferred revenues to the extent that revenue has not yet been recognized. 40

~~Subscription~~Table ~~revenues from our core Ancestry websites accounted for approximately 92%~~ of the total subscription revenues for the year-ended December 31, 2014. Total subscription revenues also include subscriptions to our other websites, such as Archives.com, Fold3.com and Newspapers.com. We attribute subscription revenues by country based on the billing address of the subscriber, regardless of the website to which the person subscribes. The following table presents subscription revenue by geographic region (in thousands): Contents

	Successor						Predecessor
	Year ended				Period from		Period from
	December 31,2014		December 31,2013		Dec. 29, 2012to Dec. 31, 2012		Jan. 1, 2012 to Dec. 28, 2012
United States	$	422,770	$	380,008	$	2,407	$	340,448
United Kingdom		65,656		56,810		381		53,893
All other countries		65,384		62,739		406		57,403
Total subscription revenues	$	553,810	$	499,557	$	3,194	$	451,744

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Product and other revenues. Product and other revenues include sales of our AncestryDNA services, Family Tree Maker desktop software, genealogical research services, shipping revenue and other products and services. Revenues related to these products or services are recognized upon shipment of the product or completion of the services, as applicable. Overview

~~Expenses~~You should read the following discussion together with Item 6 “Selected Financial Data” and our Consolidated Financial Statements and the related Notes included elsewhere in this Annual Report of Ancestry.com LLC and its consolidated subsidiaries (“Ancestry.com LLC,” “Ancestry.com,” “we,” “us” or“Parent”). This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under “Risk Factors” and elsewhere in this Annual Report. See “Forward-Looking Statements.”

~~Personnel-related~~Company ~~costs for each category of cost of revenues and operating expenses include salaries, employee benefit costs, employer payroll taxes, bonuses and stock-based compensation.~~ Overview

~~Cost~~Ancestry.com is the world’s largest provider of ~~Revenues~~family history and personal DNA testing services, harnessing the information found in family trees, historical records and genetics to help people gain a new level of understanding about their lives.

~~Cost~~Our ofcore ~~subscription~~Ancestry ~~revenues~~websites have over 2.2 ~~Cost~~million ofpaying ~~subscription~~subscribers ~~revenues~~around ~~consists~~the ~~primarily~~world ofand ~~amortization~~an extensive collection of ~~content~~more ~~databases~~than 17 billion historical records that we have digitized and indexed as of December 31, ~~web~~2015. ~~server operating~~These ~~costs~~digital records and documents, ~~personnel-related~~combined ~~costs~~with ofour ~~web~~proprietary ~~support~~online search technologies and ~~customer~~tools, ~~services~~enable ~~employees~~our subscribers to research their family history, ~~credit~~build ~~card~~their ~~processing~~family ~~fees~~trees, upload their own records and ~~outside~~make ~~service~~meaningful ~~costs~~discoveries ~~for~~about ~~customer~~the ~~services~~lives of their ancestors. ~~Web~~In ~~server~~2015, ~~operating~~approximately ~~costs~~1.5 ~~include~~billion ~~depreciation,~~records ~~software~~were ~~licensing~~attached onto ~~web~~family ~~servers and~~trees. ~~related~~Subscription ~~equipment~~revenues ~~and~~from ~~web~~our ~~hosting~~core ~~costs~~Ancestry websites accounted for approximately 78% of total revenues for the year ended December 31, 2015.

~~Cost~~Our ofAncestryDNA ~~product~~service, ~~and~~with ~~other~~approximately ~~revenues~~1.4 ~~Cost~~million ofDNA ~~product~~samples ~~and~~in ~~other~~its ~~revenues~~database ~~consist~~as of ~~AncestryDNA~~ ~~service~~December ~~costs~~31, ~~personnel-related~~2015, ~~costs~~enables ofcustomers ~~customer~~to ~~service~~uncover ~~and~~their ~~other~~ethnic ~~product~~mix, ~~fulfillment~~discover ~~employees~~distant cousins, ~~direct~~and ~~costs~~identify ofshared ~~products~~common ~~sold,~~ancestors. ~~shipping~~AncestryDNA ~~costs~~leverages ~~and~~its ~~credit~~growing ~~card~~DNA ~~processing~~database ~~fees.~~together with proprietary algorithms to help customers identify their unique family history.

34We also offer other subscription-based and family history research services, such as Archives.com (“Archives”), Fold3.com (“Fold3”), Newspapers.com and AncestryProGenealogists, which extend and complement our core Ancestry websites. Subscriptions to Fold3 and Newspapers.com are often sold in conjunction with one of our core Ancestry website subscriptions.

~~Table~~Key ofBusiness ~~Contents~~Metrics

~~Operating~~Our ~~Expenses~~management regularly reviews a number of financial and operating metrics, including the following key operating metrics to evaluate our business, determine the allocation of resources, make decisions regarding corporate strategies and evaluate forward-looking projections. The following key operating metrics reflect data with respect to our Ancestry.com websites and exclude our other subscription-based websites, such as Archives, Fold3 and Newspapers.com.

~~Technology~~• ~~and~~Total ~~development~~Subscribers. ~~Technology~~A ~~and~~subscriber ~~development~~is ~~expenses~~an ~~consist~~individual ~~primarily~~who ofpays ~~personnel-related~~for ~~costs~~renewable ~~and~~access ~~outside~~or ~~service~~redeems ~~costs. Technology~~a ~~and~~gift ~~development~~subscription ~~personnel-related~~to ~~costs~~one ~~include the personnel costs~~ of ~~developing~~our ~~new~~core ~~products~~Ancestry ~~and tools and maintaining and testing our~~ websites. ~~Our~~Total ~~development~~subscribers ~~personnel~~is ~~are~~defined ~~primarily~~as ~~based in~~ the ~~United~~number ~~States~~of ~~and~~subscribers ~~are~~at ~~focused~~the ~~on creating~~end ~~accessibility~~of tothe ~~content and tools for individuals to do family history research~~period. ~~Outside service costs are primarily incurred for third-party product development and quality assurance services.~~

~~Marketing~~• ~~and~~Net ~~advertising~~Subscriber Additions. ~~Marketing~~Net ~~and~~subscriber ~~advertising~~additions ~~expenses~~is ~~consist~~the ~~primarily~~total number of ~~external~~new ~~marketing~~customers ~~expenses,~~who ~~such~~purchase asa ~~television, search~~subscription ~~and~~or ~~display~~redeem ~~advertising,~~a ~~and~~gift ~~personnel-related~~subscription ~~costs.~~to ~~Marketing~~our ~~and~~core ~~advertising~~Ancestry ~~costs~~websites ~~are~~less ~~principally~~the ~~incurred~~total innumber ~~the~~of ~~United~~subscribers ~~States,~~who ~~the~~choose ~~United~~not ~~Kingdom,~~to ~~Australia~~renew ~~and~~a ~~Canada~~completed subscription in the period.

~~General~~Our ~~and~~key ~~administrative.~~business ~~General~~metrics ~~and~~are ~~administrative~~presented ~~expenses~~for ~~consist~~the ~~principally~~years ofended ~~personnel-related and outside service expenses related to our executive~~December 31, ~~finance~~2015, 2014 ~~legal, human resources~~ and ~~other~~2013 ~~administrative~~as ~~functions.~~follows (in thousands):

Amortization of acquired intangible assets. Amortization of acquired intangible assets is the amortization expense associated with subscriber relationships and contracts, technologies, trademarks and tradenames and other acquired intangible assets.



	Year Ended December 31,
	2015	2014		2013
Total subscribers	2,264	2,115		2,140
Net subscriber additions	149	(25	)	124

Transaction-related expenses. Transaction-related expenses consist of one-time costs associated with the Transaction. Transaction-related expenses consist primarily of investment banking, legal, accounting, consulting and other expenses related to the Transaction. Transaction-related expenses for the Successor period also includes stock-based compensation expense due to the acceleration of vesting for outstanding Predecessor stock-based awards upon closing of the Transaction. 41

~~Interest~~Table ~~Expense,~~of ~~Net, Other Income (Expense), Net and Income Tax Benefit (Expense)~~ Contents

~~Interest~~The ~~expense,~~following ~~net.~~table ~~Interest~~presents ~~expense, net includes interest expense associated with our debt, amortization of deferred financing costs and original issue discount associated with~~ the ~~issuance~~percentage of ~~our~~total ~~debt,~~subscribers ~~including~~by ~~accelerated~~subscription ~~amortization~~duration ~~of costs as a result of any debt repricings, and interest income earned on cash and cash equivalents. Our interest expense varies based on the level of debt outstanding and changes in interest rates.~~ type:

Other income (expense), net. Other income (expense), net primarily includes foreign currency transaction and remeasurement gains and losses, which vary based on changes in foreign currency exchange rates.



	December 31, 2015		December 31, 2014		December 31, 2013
Annual	35	%	40	%	42	%
Semi-annual	27		22		23
Quarterly	2		2		3
Monthly	36		36		32
Total	100	%	100	%	100	%

~~Income~~Components ~~tax~~of ~~benefit~~Consolidated ~~(expense).~~Statements ~~Income tax benefit (expense) consists~~ of ~~federal and state income taxes in the United States and income taxes in certain foreign jurisdictions.~~ Operations

~~Critical Accounting Estimates~~ Revenues

~~Our~~We ~~Consolidated~~attribute Financial Statements are prepared in conformity with GAAP. The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, ~~costs~~by ~~and~~country ~~expenses and related disclosures. These estimates and assumptions are often~~ based on ~~historical~~the ~~experience,~~billing ~~judgments~~address ~~and other~~of ~~factors that we believe to be reasonable under~~ the ~~circumstances at the time made, but all such estimates and assumptions are inherently uncertain and unpredictable~~customer. ~~Actual~~The ~~results~~following ~~may~~table ~~differ~~presents ~~from~~total ~~those~~revenues ~~estimates~~by ~~and~~geographic ~~assumptions,~~region ~~and it is possible that other professionals, applying their own judgment to the same facts and circumstances, could develop and support alternative estimates and assumptions that would result~~ (in ~~material changes to our operating results and financial condition. We evaluate our estimates and assumptions on an ongoing basis.~~ thousands):

We consider the estimates and assumptions associated with the testing of goodwill for impairment, recoverability of long-lived assets, income taxes, determination of the fair value of stock options included in stock-based compensation expense, timing for recognition of AncestryDNA revenues and determination of the fair value of acquired intangible assets and goodwill to be our critical accounting estimates. For further information on our significant accounting policies, see Note 1 of the accompanying Notes to our Consolidated Financial Statements.



	Year Ended December 31,
	2015		2014		2013
United States	$	548,981	$	485,488	$	417,221
United Kingdom	70,008		67,800		59,447
All other countries	64,116		66,256		63,723
Total revenues	$	683,105	$	619,544	$	540,391

~~Goodwill~~Subscription ~~Impairment~~revenues. We derive subscription revenues by providing access to our content and technologies on our various websites. Subscription revenues from our core Ancestry websites accounted for approximately 78%, 83% and 90% of total revenues for the years ended December 31, 2015, 2014 and 2013, respectively. Subscription revenues also includes subscriptions to our other websites, such as Archives, Fold3 and Newspapers.com. We recognize subscription revenues, net of estimated cancellations, ratably over the subscription period. No revenue is recognized or allocated to any free-trial period we may provide. Amounts received from subscribers for which the performance obligations have not been fulfilled are recorded in deferred revenue. We have established an allowance for sales returns based on historical subscription cancellations. Actual customer subscription cancellations are charged against the allowance or deferred revenues to the extent that revenue has not yet been recognized.

WeService ~~review goodwill~~and ~~for~~other ~~impairment~~revenues. atService ~~least~~and ~~annually~~other orrevenues ~~more~~include ~~frequently~~sales ifof ~~indicators~~our ofAncestryDNA ~~impairment~~services, ~~exist.~~family Wehistory ~~perform~~research ~~our~~services ~~annual~~and ~~goodwill~~other ~~impairment~~products ~~test~~and asservices. We recognize revenue from sales of ~~November 30th~~our ~~based~~AncestryDNA onservices awhen ~~single~~the ~~reporting unit.~~DNA ~~Our~~results ~~goodwill~~are ~~impairment~~delivered ~~test~~to ~~may~~the ~~require~~customer or when the ~~use~~likelihood of ~~qualitative~~the ~~judgments~~DNA ~~and~~kit ~~fair-value~~being ~~techniques,~~submitted ~~which~~by ~~are~~the ~~inherently~~customer ~~subjective.~~for ~~Impairment~~testing ~~loss,~~is ~~if any~~remote, isas ~~recorded~~determined ~~when~~based ~~the~~on ~~fair~~historical ~~value~~submission patterns of ~~goodwill~~DNA iskits ~~less~~by ~~than~~our ~~its~~customers. ~~carrying~~Revenues ~~value.~~from family history research services are recognized upon completion of service.

In assessing goodwill for impairment, we initially evaluate qualitative factors, such as macroeconomic conditions, industry and market conditions, key financial metrics, third-party valuations of our indirect parent entity and our overall financial performance, to Expenses

35Personnel-related costs for each category of cost of revenues and operating expenses include salaries, bonuses, stock-based compensation, employee benefit costs and employer payroll taxes.

~~Table~~Cost of ~~Contents~~Revenues

~~determine~~Cost ifof itsubscription isrevenues. ~~more~~Cost ~~likely~~of ~~than~~subscription ~~not~~revenues ~~that~~consists ~~the~~primarily ~~fair value~~ of ~~our~~amortization ~~reporting unit is less than its carrying amount. If indicators~~ of ~~impairment~~content ~~exist~~databases, ~~we then utilize a two~~web-~~step~~server ~~process~~operating ~~to test goodwill for impairment. First~~costs, acredit ~~comparison~~card ofprocessing ~~the fair value of the reporting unit with the aggregate carrying value~~fees, ~~including goodwill, is~~personnel-related ~~performed.~~costs ~~If the carrying amount~~ of aweb ~~reporting~~support ~~unit~~and ~~exceeds~~customer ~~the~~service ~~reporting unit’s~~employees and ~~fair~~outside ~~value,~~service wecosts ~~perform~~for ~~the~~customer ~~second step of the goodwill impairment test to determine the amount of impairment loss~~services. ~~The~~Web-server ~~second~~operating ~~step~~costs ~~includes~~include ~~comparing~~depreciation, ~~the~~software ~~implied~~licensing ~~fair~~on ~~value~~web ofservers ~~the~~and ~~reporting~~related ~~unit’s goodwill with the~~equipment ~~carrying~~and ~~value~~web-hosting ~~of that goodwill~~costs.

~~Based~~Cost ~~on the qualitative results~~ of ~~our~~service ~~annual~~and ~~goodwill~~other ~~impairment testing for the years ended December~~revenues. ~~31,~~Cost ~~2014~~of ~~and~~service ~~2013~~ and ~~the~~other ~~periods~~revenues ~~from~~consists ~~December 29,~~of ~~2012~~AncestryDNA todirect ~~December 31~~costs, ~~2012~~personnel-related ~~and~~costs ~~from January 1, 2012 to December 28, 2012, we concluded that it was not more likely than not that the fair value~~ of ~~our~~customer ~~reporting unit~~service ~~was~~and ~~less~~other ~~than~~fulfillment ~~its~~employees, ~~carrying~~shipping ~~amount~~costs and nocredit ~~impairment~~card ~~losses~~processing ~~were recorded~~fees.

~~Recoverability of Long-Lived Assets~~ 42

WeTable ~~review content databases, property and equipment and intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount~~ of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or asset group to future undiscounted cash flows that the asset or asset group is expected to generate. If assets are determined to be impaired, the impairment loss to be recognized equals the amount by which the carrying value of the asset or group of assets exceeds its fair value. Significant estimates include but are not limited to future expected cash flows, replacement cost of technology assets, and discount rates. Impairment losses recognized for the years ended December 31, 2014 and 2013, the period from December 29, 2012 to December 31, 2012, and the period from January 1, 2012 to December 28, 2012 were immaterial. Contents

~~Income~~Operating ~~Taxes~~ Expenses

WeTechnology ~~are subject to income taxes in the United States~~ and ~~several foreign jurisdictions~~development. ~~Significant~~Technology ~~judgment~~and isdevelopment ~~required~~expenses inconsist ~~evaluating~~primarily ~~our uncertain~~of ~~tax~~personnel-related ~~positions~~costs and ~~determining~~outside ~~our~~service ~~provision for income taxes~~costs. WeTechnology ~~evaluate~~and ~~each~~development ~~tax~~personnel-related ~~position~~costs ~~for~~include ~~recognition~~the inpersonnel ~~accordance~~costs ~~with~~of ~~GAAP~~developing bynew ~~determining~~services ifand ~~the~~tools ~~weight~~and ofmaintaining ~~available~~and ~~evidence~~testing ~~indicates~~our ~~that~~websites. itOur isdevelopment ~~more~~personnel ~~likely~~are ~~than~~primarily ~~not~~based ~~that~~in the ~~position~~ ~~will~~United beStates ~~sustained~~and are focused on ~~audit.~~creating ~~This~~accessibility ~~includes~~to ~~consideration~~content ofand ~~any~~tools ~~resolutions~~for ofindividuals ~~related~~to ~~appeals~~do orfamily ~~litigation~~history ~~processes~~research. ~~The~~Outside ~~tax~~service ~~benefit~~costs isare ~~then~~primarily ~~measured~~incurred asfor ~~the~~third-party ~~largest~~development ~~amount~~and ~~that~~quality isassurance ~~more likely than not of being realized upon settlement~~services.

~~Although~~Marketing weand ~~believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different~~advertising. WeMarketing ~~adjust~~and ~~these~~advertising ~~reserves~~expenses inconsist ~~light~~primarily of ~~changing~~external ~~facts~~marketing ~~and circumstances~~expenses, such as ~~the~~television, ~~closing~~search ofand adisplay ~~tax~~advertising ~~audit~~and orpersonnel-related ~~changes in tax laws~~costs. ToMarketing ~~the~~and ~~extent~~advertising ~~that~~costs ~~the~~are ~~final~~principally ~~tax~~incurred ~~outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes~~ in the ~~period~~United inStates, ~~which such determination is made. The provision for income taxes includes~~ the ~~impact~~United ~~of reserve provisions and changes to reserves that are considered appropriate~~Kingdom, asAustralia ~~well as the related net interest~~ and ~~penalties~~Canada.

InGeneral ~~evaluating~~and ~~our~~administrative. ~~ability~~General ~~to recover our deferred tax assets, in full or in part, we consider all available positive~~ and ~~negative~~administrative ~~evidence,~~expenses ~~including~~consist ~~our~~principally ~~past operating results, our forecast~~ of ~~future~~personnel-related ~~market growth, forecasted earnings, future taxable income~~ and ~~prudent~~outside ~~and~~service ~~feasible~~expenses ~~tax~~related ~~planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates we use~~ to ~~manage the underlying businesses. We believe it is more likely than not that the deferred tax assets recorded on~~ our ~~balance sheet~~executive, ~~net of our existing valuation allowance~~finance, ~~will ultimately be realized. In the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future~~legal, anhuman ~~adjustment~~resources ~~to the~~and ~~deferred~~other ~~tax~~administrative ~~assets would be charged to earnings in the period in which we make such determination~~functions.

~~Stock-Based~~Amortization ~~Compensation~~of ~~Expense~~ acquired intangible assets. Amortization of acquired intangible assets is the amortization expense associated with subscriber relationships and contracts, technologies, trademarks and trade names and other acquired intangible assets.

~~Our~~Interest ~~stock-based~~Expense, ~~compensation plan allows (and our Predecessor’s stock-based compensation plan allowed) for the issuance of stock-based awards~~Net, ~~including~~Other ~~stock options and restricted share units (“RSUs”) to employees~~Expense, ~~officers~~Net and ~~directors.~~Income AsTax of December 31, 2014, outstanding stock-based awards are in an indirect parent entity of Ancestry.com LLC. Each award represents a contingent right to receive an equivalent investor interest upon exercise of the option or vesting of an RSU. The Predecessor’s awards represented a contingent right to one share of the Predecessor’s common stock. Benefit

~~Stock-based~~Interest ~~compensation~~ expense, ~~is recorded by amortizing the fair value of each stock-based award expected to vest over the requisite service or performance period~~net. ~~The~~Interest ~~fair value of each stock option award is calculated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes model requires various assumptions~~expense, ~~including~~net ~~fair~~includes ~~value of the underlying investor’s~~ interest orexpense ~~stock,~~associated ~~volatility,~~with ~~expected~~our ~~option life~~debt, ~~risk-free~~amortization ~~interest rate and expected dividends. The fair value~~ of ~~the~~deferred ~~underlying~~financing ~~investor~~costs ~~interest~~and ~~was~~original ~~based~~issue ondiscount ~~the~~costs ~~fair~~associated ~~value~~with on the ~~grant~~issuance ~~date. The fair value~~ of ~~the Predecessor’s~~our ~~common~~debt, ~~stock~~including ~~was~~accelerated ~~determined~~amortization ~~based~~of oncosts ~~the~~as ~~closing~~a ~~price~~result of ~~the~~any ~~Predecessor’s~~debt ~~common~~restructuring ~~stock~~or onprepayments, ~~the~~and ~~stock~~interest ~~option~~income ~~grant~~earned ~~date. The expected term was based~~ on ~~the~~cash ~~remaining contractual term of the options~~ and ~~the~~cash ~~expected~~equivalents ~~exercise behavior~~or ofrelated-party ~~employees.~~notes ~~Expected volatility was calculated based on the volatilities of a peer group of companies~~receivable. ~~The~~Our ~~risk-free~~ interest ~~rate~~expense ofvaries ~~the option is~~ based on the ~~U.S.~~level ~~Treasury rate for the expected term~~ of ~~the~~debt ~~option.~~outstanding ~~The~~and ~~fair~~changes ~~value~~in ~~of RSUs is based on the value of the investor’s~~ interest ~~or the closing price of the Predecessor’s common stock on the date of grant~~rates.

36Other expense, net. Other expense, net primarily includes foreign currency transaction and remeasurement gains and losses, which vary based on changes in foreign currency exchange rates.

~~Table~~Income tax benefit. Income tax benefit consists of ~~Contents~~federal and state income taxes in the United States and income taxes in certain foreign jurisdictions.

In addition, assumptions are made regarding the rate of forfeiture of stock-based awards prior to vesting. We estimate forfeiture rates based on historical forfeitures of stock options and RSUs. To the extent the actual forfeiture rate is different from the estimate, stock-based compensation expense is adjusted accordingly. If any of the assumptions used in estimating the fair value of awards change significantly or the actual forfeiture rate is different than the estimate, stock-based compensation expense may differ materially in the future from that recorded in the current period. 43

~~Because~~Table ~~our indirect parent entity is privately held and there is no public market for its equity, the fair value~~ of an investor interest is determined by our Operating Committee, which considered numerous objective and subjective factors to determine the fair value of our investor interests at each meeting at which awards were approved. The factors included, but were not limited to: (i) estimates of fair value completed by third-party valuation firms; (ii) our actual operating and financial results; (iii) current business conditions and projections; and (iv) the lack of marketability. Contents

~~Investor~~Results ~~interests for RSUs are issued on their respective vesting dates, generally, net~~ of ~~the minimum statutory tax withholding requirements. As a result, the actual number of investor interests issued will generally be fewer than the actual number of RSUs outstanding.~~ Operations

~~Revenue~~The ~~Recognition~~following table sets forth our Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013. The information in the table below and throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been derived from our audited Consolidated Financial Statements. You should read this table in conjunction with our Consolidated Financial Statements and the related Notes in this Annual Report.

We recognize revenue from sales of our AncestryDNA testing services when (i) the DNA results are delivered to the customer or (ii) the likelihood of the DNA kit being submitted by the customer for testing is remote (“breakage”). We determine the breakage amount based on historical return patterns and classify it as product and other revenues in our Consolidated Statement of Operations. We review our breakage policy at least annually to ensure our estimates are reasonable; however, any future revisions to the estimated breakage period may result in a change in the amount of breakage revenue recognized in future periods.



	Year Ended December 31,
	2015			2014			2013
	(in thousands)
Revenues:
Subscription revenues	$	584,075		$	553,810		$	499,557
Service and other revenues	99,030			65,734			40,834
Total revenues	683,105			619,544			540,391
Costs of revenues:
Cost of subscription revenues	103,051			95,899			86,889
Cost of service and other revenues	60,668			43,654			28,553
Total cost of revenues	163,719			139,553			115,442
Gross profit	519,386			479,991			424,949
Operating expenses:
Technology and development	97,105			94,221			85,723
Marketing and advertising	171,094			168,536			145,103
General and administrative	54,427			60,971			55,691
Amortization of acquired intangible assets	109,318			147,681			185,193
Total operating expenses	431,944			471,409			471,710
Income (loss) from operations	87,442			8,582			(46,761		)
Interest expense, net	(81,056		)	(69,680		)	(97,837		)
Other expense, net	(334		)	(368		)	(655		)
Income (loss) before income taxes	6,052			(61,466		)	(145,253		)
Income tax benefit	23,366			42,738			65,553
Net income (loss)	$

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