9. Business Segments

The Company currently operates in three global businesses: Executive Search, Advisory and RPO & Professional Search. The Executive Search segment focuses on recruiting Board of Director and C-level positions, in addition to research-based interviewing and onboarding solutions, for clients predominantly in the consumer, financial services, industrial, life sciences/healthcare and technology industries. Advisory assists clients synchronize strategy and talent by addressing four fundamental needs: Organizational Strategy, Assessment and Succession, Leadership Development, and Rewards and Benefits, all underpinned by a comprehensive array of world-leading intellectual property, products and tools. RPO & Professional Search is a global industry leader in high-impact talent acquisition solutions. Its portfolio of services includes global and regional RPO, project recruitment, individual professional search and consulting. The Executive Search business segment is managed by geographic regional leaders and Advisory and RPO & Professional Search worldwide operations are managed by their Chief Executive Officers. The Executive Search geographic regional leaders and the Chief Executive Officers of Advisory and RPO & Professional Search report directly to the Chief Executive Officer of the Company. The Company also operates a Corporate segment to record global expenses of the Company.

The Company evaluates performance and allocates resources based on the Company’s chief operating decision maker’s review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies, except the items described above are excluded from EBITDA to arrive at Adjusted EBITDA.

Financial highlights by business segment are as follows:

	Three Months Ended July 31, 2018
	Executive Search
	North America		EMEA		Asia Pacific		Latin America		Subtotal		Advisory			RPO & Professional Search		Corporate			Consolidated
	(in thousands)
Fee revenue	$	112,097	$	46,654	$	26,295	$	7,878	$	192,924	$	195,375		$	77,269	$	—		$	465,568
Total revenue	$	115,757	$	47,749	$	26,625	$	7,903	$	198,034	$	200,147		$	80,181	$	—		$	478,362

Net loss attributable to Korn/Ferry International																			$	(38,611	)
Net income attributable to noncontrolling interest																				19
Other income, net																				(4,491	)
Interest expense, net																				4,103
Equity in earnings of unconsolidated subsidiaries, net																				(29	)
Income tax benefit																				(16,110	)
Operating income (loss)	$	26,514	$	6,969	$	6,641	$	754	$	40,878	$	(83,079	)	$	11,645	$	(24,563	)		(55,119	)
Depreciation and amortization		979		370		370		107		1,826		7,431			761		1,713			11,731
Other income (loss), net		3,472		340		175		37		4,024		570			105		(208	)		4,491
Equity in earnings of unconsolidated subsidiaries, net		29		—		—		—		29		—			—		—			29
EBITDA		30,994		7,679		7,186		898		46,757		(75,078	)		12,511		(23,058	)		(38,868	)
Integration/acquisition costs		—		—		—		—		—		3,027			—		80			3,107
Tradename write-offs		—		—		—		—		—		106,555			—		—			106,555
Adjusted EBITDA	$	30,994	$	7,679	$	7,186	$	898	$	46,757	$	34,504		$	12,511	$	(22,978	)	$	70,794

	Three Months Ended July 31, 2017
	Executive Search
	North America		EMEA		Asia Pacific		Latin America		Subtotal		Advisory		RPO & Professional Search		Corporate			Consolidated
	(in thousands)
Fee revenue	$	91,833	$	40,121	$	21,578	$	7,659	$	161,191	$	179,453	$	60,610	$	—		$	401,254
Total revenue	$	95,205	$	41,058	$	21,880	$	7,664	$	165,807	$	183,296	$	65,814	$	—		$	414,917

Net income attributable to Korn/Ferry International																		$	29,041
Net income attributable to noncontrolling interest																			388
Other income, net																			(3,354	)
Interest expense, net																			3,680
Equity in earnings of unconsolidated subsidiaries, net																			(30	)
Income tax provision																			12,210
Operating income (loss)	$	22,070	$	6,675	$	3,141	$	1,026	$	32,912	$	19,055	$	8,245	$	(18,277	)		41,935
Depreciation and amortization		949		428		320		107		1,804		8,085		796		1,524			12,209
Other income, net		282		56		105		20		463		431		8		2,452			3,354
Equity in earnings of unconsolidated subsidiaries, net		30		—		—		—		30		—		—		—			30
EBITDA		23,331		7,159		3,566		1,153		35,209		27,571		9,049		(14,301	)		57,528
Restructuring charges, net		—		—		40		—		40		240		—		—			280
Integration/acquisition costs		—		—		—		—		—		2,549		—		39			2,588
Adjusted EBITDA	$	23,331	$	7,159	$	3,606	$	1,153	$	35,249	$	30,360	$	9,049	$	(14,262	)	$	60,396