SEGMENT INFORMATION

The Company has two operating segments, North America and Europe, which are also the Company’s reportable segments. Each segment manager reports to the Company’s chief operating decision maker. The chief operating decision maker allocates resources and assesses performance at the segment level.



	Years Ended December 31,
	2017		2016		2015
	(In thousands)
Revenue:
North America	$	678,897	$	461,847	$	329,867
Europe	57,489		37,043		31,334
Total	$	736,386	$	498,890	$	361,201



	Years Ended December 31,
	2017			2016			2015
	(In thousands)
Operating (Loss) Income:
North America	$	(128,483	)	$	32,464		$	2,311
Europe	(19,388		)	(8,406		)	(3,879		)
Total	$	(147,871	)	$	24,058		$	(1,568	)



	Years Ended December 31,
	2017			2016			2015
	(In thousands)
Adjusted EBITDA^(a):
North America	$	50,182		$	50,088		$	18,184
Europe	(11,019		)	(5,542		)	(1,471		)
Total	$	39,163		$	44,546		$	16,713



	December 31,
	2017		2016
	(In thousands)
Segment Assets:^(b)
North America	$	253,582	$	24,630
Europe	10,868		50,249
Total	$	264,450	$	74,879



	Years Ended December 31,
	2017		2016		2015
	(In thousands)
Capital expenditures:
North America	$	24,214	$	14,672	$	9,933
Europe	2,623		1,988		237
Total	$	26,837	$	16,660	$	10,170

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^(a)

The Company’s primary financial measure is Adjusted EBITDA, which is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments, and this measure is one of the primary metrics by which our internal budgets are based and by which management is compensated. The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, and we believe that by excluding these items, Adjusted EBITDA corresponds more closely to the cash operating income generated from our business, from which capital investments are made and long-term related party debt is serviced. Adjusted EBITDA has certain limitations in that it does not take into account the impact to ANGI Homeservices Inc.'s statement of operations of certain expenses.


^(b)	Consistent with the Company's primary metric (described in (a) above), the Company excludes, if applicable, property and equipment, goodwill and intangible assets from the measure of segment assets presented above.

The following table presents revenue disaggregated by service for the Company's reportable segments:



	Years Ended December 31,
	2017		2016		2015
	(In thousands)
Marketplace:
Consumer connection revenue^(c)	$	521,481	$	382,466	$	269,309
Membership subscription revenue	56,135		43,573		24,164
Other revenue	3,798		2,827		3,423
Marketplace revenue	581,414		428,866		296,896
Advertising & Other revenue^(d)	97,483		32,981		32,971
North America	678,897		461,847		329,867
Consumer connection revenue^(c)	40,009		28,124		23,298
Membership subscription revenue	16,596		7,936		6,921
Advertising and other revenue	884		983		1,115
Europe	57,489		37,043		31,334
Revenue	$	736,386	$	498,890	$	361,201

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^(c)	Fees paid by service professionals for consumer matches.


^(d)	Includes Angie's List revenue from service professionals under contract for advertising and Angie's List membership subscription fees from consumers, as well as revenue from mHelpDesk, HomeStars and Felix.

Geographic information about revenue and long-lived assets is presented below. Revenue by geography is based on where the customer is located.



	Years Ended December 31,
	2017		2016		2015
	(In thousands)
Revenue
United States	$	672,159	$	461,372	$	329,117
All other countries	64,227		37,518		32,084
Total	$	736,386	$	498,890	$	361,201

The United States is the only country whose revenue is greater than 10% of total revenue of the Company for the years ended December 31, 2017, 2016 and 2015.



	December 31,
	2017		2016
	(In thousands)
Long-lived assets (excluding goodwill and intangible assets)
United States	$	49,356	$	21,775
All other countries	3,936		1,870
Total	$	53,292	$	23,645

The following tables reconcile operating (loss) income for the Company’s reportable segments and net (loss) earnings attributable to ANGI Homeservices Inc. shareholders to Adjusted EBITDA:



	Year Ended December 31, 2017
	Operating loss			Stock-based compensation		Depreciation		Amortization of intangibles		Adjusted EBITDA
	(In thousands)
North America	$	(128,483	)	$	147,574	$	13,243	$	17,848	$	50,182
Europe	(19,388		)	1,656		1,300		5,413		(11,019		)
Total	(147,871		)	$	149,230	$	14,543	$	23,261	$	39,163
Interest expense—third party	(1,765		)
Interest expense—related party	(5,971		)
Other income, net	1,974
Loss before income taxes	(153,633		)
Income tax benefit	49,106
Net loss	(104,527		)
Net loss attributable to noncontrolling interests	1,409
Net loss attributable to ANGI Homeservices Inc. shareholders	$	(103,118	)



	Year Ended December 31, 2016
	Operating income (loss)			Stock-based compensation		Depreciation		Amortization of intangibles		Adjusted EBITDA
	(In thousands)
North America	$	32,464		$	7,126	$	7,996	$	2,502	$	50,088
Europe	(8,406		)	1,790		423		651		(5,542		)
Total	24,058			$	8,916	$	8,419	$	3,153	$	44,546
Interest expense—third party	—
Interest expense—related party	(894		)
Other expense, net	(699		)
Earnings before income taxes	22,465
Income tax provision	(11,834		)
Net earnings	10,631
Net loss attributable to noncontrolling interests	2,497
Net earnings attributable to ANGI Homeservices Inc. shareholders	$	13,128



	Year Ended December 31, 2015
	Operating income (loss)			Stock-based compensation		Depreciation		Amortization of intangibles		Adjusted EBITDA
	(In thousands)
North America	$	2,311		$	6,758	$	5,768	$	3,347	$	18,184
Europe	(3,879		)	1,095		825		488		(1,471		)
Total	(1,568		)	$	7,853	$	6,593	$	3,835	$	16,713
Interest expense—third party	—
Interest expense—related party	(272		)
Other expense, net	(398		)
Loss before income taxes	(2,238		)
Income tax provision	(1,758		)
Net loss	(3,996		)
Net loss attributable to noncontrolling interests	2,671
Net loss attributable to ANGI Homeservices Inc. shareholders	$	(1,325	)

The following tables reconcile segment assets to total assets:



	December 31, 2017
	Segment assets		Property and equipment, net		Goodwill		Indefinite-lived intangible assets		Definite-lived intangible assets, net		Total assets
	(In thousands)
North America	$	253,582	$	49,487	$	696,291	$	140,034	$	169,054	$	1,308,448
Europe	10,868		3,805		73,935		13,413		6,070		108,091
Total	$	264,450	$	53,292	$	770,226	$	153,447	$	175,124	$	1,416,539
Add: Deferred tax assets ^(e)											50,723
Total assets											$	1,467,262



	December 31, 2016
	Segment assets		Property and equipment, net		Goodwill		Indefinite-lived intangible assets		Definite-lived intangible assets, net		Total assets
	(In thousands)
North America	$	24,630	$	21,775	$	140,930	$	600	$	2,454	$	190,389
Europe	50,249		1,870		30,060		4,284		3,454		89,917
Total	$	74,879	$	23,645	$	170,990	$	4,884	$	5,908	$	280,306
Add: Deferred tax assets ^(e)											15,211
Total assets											$	295,517

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^(e)	Total segment assets differ from total assets on a consolidated basis as a result of unallocated deferred tax assets.