Segment Information

3 Months Ended

Mar. 31, 2016

SEGMENT INFORMATION

The Company organizes its operations into three segments: North America, EMEA and Rest of World. Segment operating results reflect earnings before stock-based compensation, acquisition-related expense (benefit), net, other income (expense), net and provision (benefit) for income taxes. Segment information reported in the tables below represents the operating segments of the Company organized in a manner consistent with which separate information is available and for which segment results are evaluated regularly by the Company's chief operating decision-maker in assessing performance and allocating resources.

Revenue and profit or loss information by reportable segment reconciled to consolidated net income (loss) for the three months ended March 31, 2016 and 2015 were as follows (in thousands):



	Three Months Ended March 31,
	2016			2015
North America
Revenue ⁽¹⁾	$	500,813		$	479,882
Segment cost of revenue and operating expenses ^{(3) (4)}	512,261			455,216
Segment operating income (loss) ⁽³⁾	(11,448		)	24,666
EMEA
Revenue ⁽¹⁾	188,970			216,220
Segment cost of revenue and operating expenses ^{(3) (4)}	183,054			196,568
Segment operating income (loss) ⁽³⁾	5,916			19,652
Rest of World
Revenue	42,188			54,254
Segment cost of revenue and operating expenses ^{(3) (4)}	49,974			58,402
Segment operating income (loss) ⁽³⁾	(7,786		)	(4,148		)
Consolidated
Revenue	731,971			750,356
Segment cost of revenue and operating expenses ^{(3) (4)}	745,289			710,186
Segment operating income (loss) ⁽³⁾	(13,318		)	40,170
Stock-based compensation ⁽²⁾	30,551			35,144
Acquisition-related expense (benefit), net	3,464			(269		)
Income (loss) from operations	(47,333		)	5,295
Other income (expense), net	3,486			(19,927		)
Income (loss) from continuing operations before provision (benefit) for income taxes	(43,847		)	(14,632		)
Provision (benefit) for income taxes	1,749			2,107
Income (loss) from continuing operations	(45,596		)	(16,739		)
Income (loss) from discontinued operations, net of tax	—			6,284
Net income (loss)	$	(45,596	)	$	(10,455	)

(1)

North America includes revenue from the United States of $492.6 million and $473.1 million for the three months ended March 31, 2016 and 2015, respectively. EMEA includes revenue from Switzerland of $113.3 million and $117.5 million for the three months ended March 31, 2016 and 2015, respectively. There were no other individual countries that represented more than 10% of consolidated total revenue for the three months ended March 31, 2016 and 2015.


(2)	Includes stock-based compensation classified within cost of revenue, marketing expense, selling, general and administrative expense and restructuring charges. Other income (expense), net, includes $0.2 million of additional stock-based compensation for the three months ended March 31, 2016.

(3)

Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related (benefit) expense, net. This presentation corresponds to the measure of segment profit or loss that the Company's chief operating decision-maker uses in assessing segment performance and making resource allocation decisions. The following table summarizes the Company's stock-based compensation expense and acquisition-related expense (benefit), net by reportable segment for the three months ended March 31, 2016 and 2015 (in thousands):



	Three Months Ended March 31,
	2016				2015
	Stock-based compensation		Acquisition-related		Stock-based compensation		Acquisition-related
North America	$	27,023	$	3,464	$	31,252	$	(269	)
EMEA	2,120		—		2,647		—
Rest of World	1,613		—		1,245		—
Consolidated	$	30,756	$	3,464	$	35,144	$	(269	)


(4)	Segment cost of revenue and operating expenses for the three months ended March 31, 2016 includes restructuring charges of $2.9 million in North America (which excludes $2.6 million of stock-based compensation), $3.5 million in EMEA and $3.4 million in Rest of World. See Note 9, "Restructuring," for additional information.

The following table summarizes the Company's total assets by reportable segment as of March 31, 2016 and December 31, 2015 (in thousands):



	March 31, 2016		December 31, 2015
North America ⁽¹⁾	$	911,882	$	1,063,595
EMEA	486,928		508,353
Rest of World	219,870		224,316
Consolidated total assets	$	1,618,680	$	1,796,264


(1)	North America contains assets from the United States of $874.3 million and $1,018.2 million as of March 31, 2016 and December 31, 2015, respectively. There were no other individual countries that represented more than 10% of consolidated total assets as of March 31, 2016 and December 31, 2015.

Category Information

The Company offers goods and services through its online local commerce marketplaces in three primary categories: Local Deals ("Local"), Groupon Goods ("Goods") and Groupon Getaways ("Travel"). Collectively, Local and Travel comprise the Company's "Services" deal offerings and Goods, which it also refers to as "Shopping," reflects its product offerings. The Company also earns advertising revenue, payment processing revenue and commission revenue. Revenue and gross profit from these other sources, which are primarily generated through the Company's relationships with local and national merchants, are included within the Local category in the tables below.

The following table summarizes the Company's third party and other and direct revenue from continuing operations by category for its three reportable segments for the three months ended March 31, 2016 and 2015 (in thousands):



	North America				EMEA				Rest of World				Consolidated
	Three Months Ended March 31,				Three Months Ended March 31,				Three Months Ended March 31,				Three Months Ended March 31,
	2016		2015		2016		2015		2016		2015		2016		2015
Local ⁽¹⁾:
Third party and other	$	192,153	$	180,864	$	61,886	$	82,536	$	22,082	$	30,281	$	276,121	$	293,681

Travel:
Third party	20,914		19,989		11,178		14,717		5,049		6,495		37,141		41,201
Total services	213,067		200,853		73,064		97,253		27,131		36,776		313,262		334,882

Goods:
Third party	1,990		648		10,686		11,978		8,630		12,613		21,306		25,239
Direct	285,756		278,381		105,220		106,989		6,427		4,865		397,403		390,235
Total	287,746		279,029		115,906		118,967		15,057		17,478		418,709		415,474

Total revenue	$	500,813	$	479,882	$	188,970	$	216,220	$	42,188	$	54,254	$	731,971	$	750,356


(1)	Includes revenue from deals with local and national merchants and through local events.

The following table summarizes the Company's gross profit from continuing operations by category for its three reportable segments for the three months ended March 31, 2016 and 2015 (in thousands):



	North America				EMEA				Rest of World				Consolidated
	Three Months Ended March 31,				Three Months Ended March 31,				Three Months Ended March 31,				Three Months Ended March 31,
	2016		2015		2016		2015		2016		2015		2016		2015
Local ⁽¹⁾:
Third party and other	$	164,018	$	154,776	$	58,263	$	77,356	$	18,771	$	26,161	$	241,052	$	258,293

Travel:
Third party	15,712		15,791		10,215		12,400		3,997		4,906		29,924		33,097
Total services	179,730		170,567		68,478		89,756		22,768		31,067		270,976		291,390

Goods:
Third party	1,673		434		9,445		10,193		5,693		6,407		16,811		17,034
Direct	34,540		23,489		16,967		15,288		34		205		51,541		38,982
Total	36,213		23,923		26,412		25,481		5,727		6,612		68,352		56,016

Total gross profit	$	215,943	$	194,490	$	94,890	$	115,237	$	28,495	$	37,679	$	339,328	$	347,406


(1)	Includes gross profit from deals with local and national merchants and through local events.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8906-108599

+ Details