EX-99.3 5 ex-993.htm EXHIBIT 99.3 Exhibit


Exhibit 99.3


Reported Consolidated Results
ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
December 31,
2018
 
December 31,
2017
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
651,058

 
$
352,095

Short-term investments
903,867

 
410,444

Accounts receivable, net
66,083

 
54,396

Inventory
162,829

 
—

Mortgage loans held for sale
35,409

 
 
Prepaid expenses and other current assets
61,067

 
24,590

Restricted cash
12,385

 
—

Total current assets
1,892,698

 
841,525

Contract cost assets
45,819

 
—

Property and equipment, net
135,172

 
112,271

Goodwill
1,984,907

 
1,931,076

Intangible assets, net
215,904

 
319,711

Other assets
16,616

 
25,934

Total assets
$
4,291,116

 
$
3,230,517

Liabilities and shareholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
7,471

 
$
3,587

Accrued expenses and other current liabilities
63,101

 
61,373

Accrued compensation and benefits
31,388

 
19,109

Revolving credit facility
116,700

 
—

Warehouse lines of credit
33,018

 
—

Deferred revenue
34,080

 
31,918

Deferred rent, current portion
1,740

 
2,400

Total current liabilities
287,498

 
118,387

Deferred rent, net of current portion
19,945

 
21,330

Long-term debt
699,020

 
385,416

Deferred tax liabilities and other long-term liabilities
17,474

 
44,561

Total liabilities
1,023,937

 
569,694

Shareholders’ equity:
 
 
 
Preferred stock
—

 
—

Class A common stock
6

 
6

Class B common stock
1

 
1

Class C capital stock
14

 
13

Additional paid-in capital
3,939,842

 
3,254,146

Accumulated other comprehensive loss
(905
)
 
(1,100
)
Accumulated deficit
(671,779
)
 
(592,243
)
Total shareholders’ equity
3,267,179

 
2,660,823

Total liabilities and shareholders’ equity
$
4,291,116

 
$
3,230,517



1


ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 
Three Months Ended
December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Revenue:
 
 
 
 
 
 
 
IMT
$
323,988

 
$
282,330

 
$
1,281,189

 
$
1,076,794

Homes
41,347

 
—

 
52,365

 
—

Total revenue
365,335

 
282,330

 
1,333,554

 
1,076,794

Cost of revenue (exclusive of amortization) (1)(2):

 

 

 

IMT
28,498

 
22,559

 
104,330

 
85,203

Homes
38,974

 
—

 
49,260

 
—

Total cost of revenue
67,472

 
22,559

 
153,590

 
85,203

Sales and marketing (2)
138,869

 
103,935

 
552,621

 
448,201

Technology and development (2)
111,195

 
85,187

 
410,818

 
319,985

General and administrative (2)
74,758

 
57,778

 
262,153

 
210,816

Impairment costs
69,000

 
174,000

 
79,000

 
174,000

Acquisition-related costs
268

 
97

 
2,332

 
463

Integration costs
1,492

 
—

 
2,015

 
—

Total costs and expenses
463,054

 
443,556

 
1,462,529

 
1,238,668

Loss from operations
(97,719
)
 
(161,226
)
 
(128,975
)
 
(161,874
)
Other income
5,962

 
1,415

 
19,270

 
5,385

Interest expense
(14,327
)
 
(6,991
)
 
(41,255
)
 
(27,517
)
Loss before income taxes
(106,084
)
 
(166,802
)
 
(150,960
)
 
(184,006
)
Income tax benefit (expense)
8,402

 
89,627

 
31,102

 
89,586

Net loss
$
(97,682
)
 
$
(77,175
)
 
$
(119,858
)
 
$
(94,420
)
Net loss per share — basic and diluted
$
(0.48
)
 
$
(0.41
)
 
$
(0.61
)
 
$
(0.51
)
Weighted-average shares outstanding — basic and diluted
203,561

 
189,439

 
197,944

 
186,453

 ____________________
(1) Amortization of website development costs and intangible assets included in technology and development
$
17,575

 
$
24,392

 
$
79,309

 
$
94,349

(2) Includes share-based compensation expense as follows:
 
 
 
 
 
 
 
Cost of revenue
$
947

 
$
942

 
$
4,127

 
$
3,884

Sales and marketing
5,529

 
5,041

 
22,942

 
22,735

Technology and development
15,753

 
10,609

 
56,673

 
39,938

General and administrative
15,489

 
12,817

 
65,342

 
47,014

Total
$
37,718

 
$
29,409

 
$
149,084

 
$
113,571

Other Financial Data:
 
 
 
 
 
 
 
Adjusted EBITDA (3)
$
32,357

 
$
70,859

 
$
200,832

 
$
236,315

(3) Adjusted EBITDA is a non-GAAP financial measure; it is not calculated or presented in accordance with U.S. generally accepted accounting principles, or GAAP. See Exhibit 99.1 for more information regarding our presentation of Adjusted EBITDA and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, for each of the periods presented.



2


ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
Year Ended December 31,
 
2018
 
2017
Operating activities
 
 
 
Net loss
$
(119,858
)
 
$
(94,420
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation and amortization
99,391

 
110,155

Share-based compensation expense
149,084

 
113,571

Amortization of contract cost assets
36,013

 
—

Amortization of discount and issuance costs on 2023 and 2021 Notes
26,672

 
18,012

Impairment costs
79,000

 
174,000

Deferred income taxes
(31,102
)
 
(89,586
)
Loss on disposal of property and equipment
3,617

 
5,678

Bad debt expense
869

 
7,349

Deferred rent
(2,045
)
 
7,085

Amortization (accretion) of bond premium (discount)
(4,313
)
 
431

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(12,556
)
 
(21,203
)
Inventory
(162,829
)
 
—

Mortgage loans held for sale
(1,161
)
 
—

Prepaid expenses and other assets
(34,068
)
 
10,807

Contract cost assets
(41,510
)
 
—

Accounts payable
1,311

 
(373
)
Accrued expenses and other current liabilities
1,920

 
19,000

Accrued compensation and benefits
11,291

 
(4,948
)
Deferred revenue
2,162

 
2,633

Other long-term liabilities
1,962

 
—

Net cash provided by operating activities
3,850

 
258,191

Investing activities
 
 
 
Proceeds from maturities of investments
399,228

 
259,227

Purchases of investments
(901,761
)
 
(407,032
)
Proceeds from sales of investments
13,567

 
—

Purchases of property and equipment
(66,054
)
 
(66,728
)
Purchases of intangible assets
(12,481
)
 
(11,907
)
Purchase of equity investment
—

 
(10,000
)
Proceeds from divestiture of a business
—

 
579

Cash paid for acquisition, net
(55,138
)
 
(11,533
)
Net cash used in investing activities
(622,639
)
 
(247,394
)
Financing activities
 
 
 
Proceeds from issuance of 2023 and 2021 Notes, net of issuance costs
364,020

 
—

Premiums paid for Capped Call Confirmations
(29,414
)
 
—

Proceeds from issuance of Class C Capital Stock, net of issuance costs
360,345

 
—

Proceeds from borrowing on revolving credit facility
116,700

 
—

Proceeds from borrowing on warehouse lines of credit
482

 
—

Proceeds from exercise of stock options
120,074

 
98,071

Value of equity awards withheld for tax liability
(70
)
 
(365
)
Cash paid for contingent merger consideration
(2,000
)
 
—

Net cash provided by financing activities
930,137

 
97,706

Net increase in cash, cash equivalents and restricted cash during period
311,348

 
108,503

Cash, cash equivalents and restricted cash at beginning of period
352,095

 
243,592

Cash, cash equivalents and restricted cash at end of period
$
663,443

 
$
352,095

Supplemental disclosures of cash flow information
 
 
 
Cash paid for interest
$
15,473

 
$
9,198

Noncash transactions:
 
 
 
Capitalized share-based compensation
$
8,590

 
$
11,236

Write-off of fully depreciated property and equipment
$
22,364

 
$
15,004

Write-off of fully amortized intangible assets
$
12,999

 
$
5,473


3




Non-GAAP Net Income per Share
Our presentation of non-GAAP net income per share excludes the impact of share-based compensation expense, impairment costs, acquisition-related costs and income taxes. This measure is not a key metric used by our management and board of directors to measure operating performance or otherwise manage the business. However, we provide non-GAAP net income per share as supplemental information to investors, as we believe the exclusion of share-based compensation expense, impairment costs, acquisition-related costs and income taxes facilitates investors’ operating performance comparisons on a period-to-period basis. You should not consider non-GAAP net income per share in isolation or as a substitute for analysis of our results as reported under GAAP.

The following table sets forth a reconciliation of net income, adjusted, to net loss, as reported on a GAAP basis, and the calculation of non-GAAP net income per share - basic and diluted, for each of the periods presented (in thousands, except per share data, unaudited):
 
Three Months Ended
December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Net loss, as reported
$
(97,682
)
 
$
(77,175
)
 
$
(119,858
)
 
$
(94,420
)
Share-based compensation expense
37,718

 
29,409

 
149,084

 
113,571

Impairment costs
69,000

 
174,000

 
79,000

 
174,000

Acquisition-related costs
268

 
97

 
2,332

 
463

Income tax benefit
(8,204
)
 
(89,627
)
 
(31,102
)
 
(89,586
)
Net income, adjusted
$
1,100

 
$
36,704

 
$
79,456

 
$
104,028

Non-GAAP net income per share — basic
$
0.01

 
$
0.19

 
$
0.40

 
$
0.56

Non-GAAP net income per share — diluted
$
0.01

 
$
0.19

 
$
0.39

 
$
0.53

Weighted-average shares outstanding — basic
203,561

 
189,439

 
197,944

 
186,453

Weighted-average shares outstanding — diluted
207,271

 
197,442

 
206,067

 
194,837


Non-GAAP net income per share - diluted for the periods presented is calculated using weighted-average shares outstanding - diluted, which includes potential shares of Class A common stock and Class C capital stock because their effect would have been dilutive. The potential shares of Class A common stock and Class C capital stock were excluded from the calculation of GAAP loss per share for the periods presented because their effect would have been antidilutive as a result of the GAAP net loss incurred in such periods. The following table reconciles the denominators used in the basic and diluted non-GAAP net income per share calculations (in thousands):
 
Three Months Ended
December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Denominator for basic calculation
203,561

 
189,439

 
197,944

 
186,453

Effect of dilutive securities:
 
 
 
 
 
 
 
     Option awards
3,370

 
6,468

 
6,967

 
7,332

     Unvested restricted stock units
340

 
1,100

 
1,156

 
1,052

Class A common stock issuable upon conversion of the 2020 Notes
—

 
435

 
—

 
—

          Denominator for dilutive calculation
207,271

 
197,442

 
206,067

 
194,837



4


Segment Results of Operations
The following tables present our segment results for the periods presented (in thousands, unaudited):
 
Three Months Ended
December 31, 2018
 
Three Months Ended
December 31, 2017
 
IMT
 
Homes
 
Consolidated
 
IMT
 
Homes
 
Consolidated
Revenue
$
323,988

 
$
41,347

 
$
365,335

 
$
282,330

 
$
—

 
$
282,330

Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
28,498

 
38,974

 
67,472

 
22,559

 
—

 
22,559

Sales and marketing
128,513

 
10,356

 
138,869

 
103,935

 
—

 
103,935

Technology and development
102,556

 
8,639

 
111,195

 
85,187

 
—

 
85,187

General and administrative
65,970

 
8,788

 
74,758

 
57,778

 
—

 
57,778

Impairment costs
69,000

 
—

 
69,000

 
174,000

 
—

 
174,000

Acquisition-related costs
268

 
—

 
268

 
97

 
—

 
97

Integration costs
1,492

 
—

 
1,492

 
—

 
—

 
—

Total costs and expenses
396,297

 
66,757

 
463,054

 
443,556

 
—

 
443,556

Loss from operations
(72,309
)
 
(25,410
)
 
(97,719
)
 
(161,226
)
 
—

 
(161,226
)
Other income
5,962

 
—

 
5,962

 
1,415

 
—

 
1,415

Interest expense
(12,582
)
 
(1,745
)
 
(14,327
)
 
(6,991
)
 
—

 
(6,991
)
Loss before income taxes
$
(78,929
)
 
$
(27,155
)
 
$
(106,084
)
 
$
(166,802
)
 
$
—

 
$
(166,802
)

 
Year Ended December 31, 2018
 
Year Ended December 31, 2017
 
IMT
 
Homes
 
Consolidated
 
IMT
 
Homes
 
Consolidated
Revenue
$
1,281,189

 
$
52,365

 
$
1,333,554

 
$
1,076,794

 
$
—

 
$
1,076,794

Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
104,330

 
49,260

 
153,590

 
85,203

 
—

 
85,203

Sales and marketing
534,038

 
18,583

 
552,621

 
448,201

 
—

 
448,201

Technology and development
389,539

 
21,279

 
410,818

 
319,985

 
—

 
319,985

General and administrative
238,727

 
23,426

 
262,153

 
210,816

 
—

 
210,816

Impairment costs
79,000

 
—

 
79,000

 
174,000

 
—

 
174,000

Acquisition-related costs
2,332

 
—

 
2,332

 
463

 
—

 
463

Integration costs
2,015

 
—

 
2,015

 
—

 
—

 
—

Total costs and expenses
1,349,981

 
112,548

 
1,462,529

 
1,238,668

 
—

 
1,238,668

Loss from operations
(68,792
)
 
(60,183
)
 
(128,975
)
 
(161,874
)
 
—

 
(161,874
)
Other income
19,270

 
—

 
19,270

 
5,385

 
—

 
5,385

Interest expense
(39,078
)
 
(2,177
)
 
(41,255
)
 
(27,517
)
 
—

 
(27,517
)
Loss before income taxes
$
(88,600
)
 
$
(62,360
)
 
$
(150,960
)
 
$
(184,006
)
 
$
—

 
$
(184,006
)

Key Metrics
The following table sets forth our key metrics for each of the periods presented:
 
Three Months Ended
December 31,
 
2017 to 2018
% Change
 
2018
 
2017
 
 
(in millions)
 
 
Average Monthly Unique Users (1)
157.2

 
151.6

 
4
%
Visits (2)
1,607.8

 
1,435.6

 
12
%
(1)
Zillow, StreetEasy, HotPads, Naked Apartments and RealEstate.com measure unique users with Google Analytics, and Trulia measures unique users with Adobe Analytics.
(2)
Visits includes visits to the Zillow, Trulia, StreetEasy and RealEstate.com mobile apps and websites. We measure Zillow, StreetEasy and RealEstate.com visits with Google Analytics and Trulia visits with Adobe Analytics.

Non-GAAP Return on Homes Sold After Interest
To provide investors with additional information regarding our Homes segment financial results, this Exhibit includes a calculation of Return on Homes Sold After Interest, which is a non-GAAP financial measure. We have provided a reconciliation of Return on Homes Sold After Interest to the most directly comparable GAAP financial measure, which is net loss before income taxes for the Homes segment.
We believe that Return on Homes Sold After Interest is a useful financial measure to investors in evaluating the performance of a subset of our assets, as it measures the return generated by Zillow specifically on homes sold during a given period. We also present this measure on a per home basis so investors are able to evaluate unit profitability across periods notwithstanding

5


variability in the number of homes sold during each period. This measure also assists Homes segment management in making strategic decisions regarding home offer pricing and other operational decisions.
We calculate Return on Homes Sold After Interest in total and on a per home basis as revenue associated with homes sold during the period less direct costs attributable to those homes. Specifically, direct costs include, with respect to each home sold during the period (1) home acquisition and renovation costs, which in turn include certain labor costs directly associated with these activities; (2) holding and selling costs; and (3) interest costs incurred.
Included in direct holding and interest expense amounts for the three months ended December 31, 2018 are holding and interest costs recorded as period expenses in prior periods associated with homes sold in the current period, which are not calculated in accordance with, or an alternative for, GAAP and should not be considered in isolation or as a substitute for results reported under GAAP. Excluded from certain of these direct cost amounts are costs recorded in the current period related to homes that remain in inventory at the end of the period, as shown in the tables below. We make these period adjustments because we believe presenting Return on Homes Sold After Interest in this manner provides a focused view on a subset of our assets - homes sold during the period - and reflecting costs associated with those homes sold from the time we acquire to the time we sell the home, which may be useful to investors.
Return on Homes Sold After Interest is intended to illustrate the performance of homes sold during the period and is not intended to be a segment or company performance metric. Return on Homes Sold After Interest is a supplemental measure of operating performance for a subset of assets and has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
•
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Return on Homes Sold After Interest does not reflect capital expenditure requirements for such replacements or for new capital expenditure requirements;
•
Return on Homes Sold After Interest does not consider the potentially dilutive impact of share-based compensation;
•
Return on Homes Sold After Interest does not include period costs that were not eligible for inventory capitalization associated with homes held in inventory at the end of the period;
•
Return on Homes Sold After Interest does not reflect indirect expenses included in cost of revenue, sales and marketing, technology and development, or general and administrative expenses, some of which are recurring cash expenditures necessary to operate the business; and
•
Return on Homes Sold After Interest does not reflect income taxes.

Because of these limitations, you should consider Return on Homes Sold After Interest alongside other financial performance measures, including various cash flow metrics, net loss before income taxes and our other GAAP results.
On a GAAP basis, per home loss before income taxes was $192,586 for the three months ended December 31, 2018 and $352,317 for the year ended December 31, 2018.
The following table presents the Return on Homes Sold After Interest for the period presented (in thousands, except per home amounts, unaudited):
 
 
 
Three Months Ended
December 31, 2018
 
 
 
Total
 
Per Home
Homes sold
 
 
141

 
 
Homes revenue
 
 
$
41,347

 
$
293,241

Operating costs:
 
 
 
 
 
Home acquisition costs (1)
 
 
37,243

 
264,134

Renovation costs (1)
 
 
1,286

 
9,121

Holding costs (1)(2)
 
 
365

 
2,589

Selling costs
 
 
1,839

 
13,043

Total operating costs
 
 
40,733

 
288,887

Interest expense (1)(2)
 
 
371

 
2,631

Return on Homes Sold After Interest
 
 
$
243

 
$
1,723

(1) Amount excludes expenses incurred during the period that are not related to homes sold during the period.
(2) Holding costs and interest expense include $0.1 million and $0.3 million, respectively, of costs incurred in prior quarters associated with homes sold in the fourth quarter of 2018.


6



Reconciliation of Non-GAAP Measure to Nearest GAAP Measure:
Three Months Ended
December 31, 2018
Loss before income taxes
$
(27,155
)
Homes sold
141

Per home loss before income taxes
$
(192,586
)
 
 
Loss before income taxes
$
(27,155
)
Depreciation and amortization
625

Share-based compensation expense
4,784

Costs incurred in prior periods associated with homes sold in the current period (1)
(437
)
Costs incurred in current period related to homes not sold in current period (2)
2,765

Indirect expenses included in cost of revenue (3)
56

Indirect marketing and advertising costs included in sales and marketing (4)
6,970

Indirect costs included in technology and development expense (5)
6,691

Indirect costs included in general and administrative expense (6)
5,944

Return on Homes Sold After Interest
$
243

Homes sold
141

Per home Return on Homes Sold After Interest
$
1,723

(1) Amount represents costs incurred in prior periods associated with homes sold in the current period that were not eligible for inventory capitalization and were therefore expensed as period costs.
(2) Amount represents costs ineligible for inventory capitalization that were expensed as period costs in the three months ended December 31, 2018 associated with homes that remain in inventory as of December 31, 2018.
(3) Includes allocated segment costs that were recorded to cost of revenue within the Homes segment during the three months ended December 31, 2018.
(4) Includes marketing and advertising expenses incurred in the three months ended December 31, 2018 not directly related to purchasing, renovating and selling homes.
(5) Includes technology and development expenses incurred in the three months ended December 31, 2018 not directly related to purchasing, renovating and selling homes.
(6) Includes general and administration expenses incurred in the three months ended December 31, 2018 not directly related to purchasing, renovating and selling homes.

The following table presents the Return on Homes Sold After Interest for the period presented (in thousands, except per home amounts, unaudited):
 
 
 
Year Ended
December 31, 2018
 
 
 
Total
 
Per Home
Homes sold
 
 
177

 
 
Homes revenue
 
 
$
52,365

 
$
295,847

Operating costs:
 
 
 
 
 
Home acquisition costs (1)
 
 
47,143

 
266,345

Renovation costs (1)
 
 
1,566

 
8,847

Holding costs (1)
 
 
446

 
2,520

Selling costs
 
 
2,347

 
13,260

Total operating costs
 
 
51,502

 
290,972

Interest expense (1)
 
 
423

 
2,389

Return on Homes Sold After Interest
 
 
$
440

 
$
2,486

(1) Amount excludes expenses incurred during the period that are not related to homes sold during the period.





7


Reconciliation of Non-GAAP Measure to Nearest GAAP Measure:
Year Ended
December 31, 2018
Loss before income taxes
$
(62,360
)
Homes sold
177

Per home loss before income taxes
$
(352,317
)
 
 
Loss before income taxes
$
(62,360
)
Depreciation and amortization
1,350

Share-based compensation expense
13,728

Costs incurred in current period related to homes not sold in current period (1)
3,518

Indirect expenses included in cost of revenue (2)
229

Indirect marketing and advertising costs included in sales and marketing (3)
12,992

Indirect costs included in technology and development expense (4)
16,287

Indirect costs included in general and administrative expense (5)
14,696

Return on Homes Sold After Interest
$
440

Homes sold
177

Per home Return on Homes Sold After Interest
$
2,486

(1) Amount represents costs ineligible for inventory capitalization and expensed as period costs during the year ended December 31, 2018 associated with homes that remain in inventory as of December 31, 2018.
(2) Includes allocated segment costs which were recorded to cost of revenue within the Homes segment during the year ended December 31, 2018.
(3) Includes marketing and advertising expenses incurred during the year ended December 31, 2018 not directly related to purchasing, renovating and selling homes.
(4) Includes technology and development expenses incurred during the year ended December 31, 2018 not directly related to purchasing, renovating and selling homes.
(5) Includes general and administration expenses incurred during the year ended December 31, 2018 not directly related to purchasing, renovating and selling homes.
Select Historical Segment Data
Beginning with the Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2019, Zillow Group expects to report financial results for three reportable segments: the IMT segment, the Homes segment and the Mortgages segment. The IMT segment will include the financial results for the Premier Agent, Rentals and new construction marketplaces, as well as dotloop, display and other advertising and business software solutions. The Homes segment will include the financial results from Zillow Group’s buying and selling of homes directly. The Mortgages segment will include the financial results for advertising sold to mortgage lenders and other mortgage professionals, mortgage originations through MLOA and the sale of mortgages on the secondary market, as well as Mortech mortgage software solutions.
For the purpose of providing comparisons to our 2019 outlook, the following table sets forth historical revenue and Adjusted EBITDA assuming we had three reportable segments for each of the periods presented (in thousands, unaudited):

8


 
Three Months Ended March 31, 2018
 
Year Ended December 31, 2018
Revenue:
 
 
 
IMT Segment:
 
 
 
Premier Agent
$
213,732

 
$
898,332

Rentals
29,063

 
134,587

Other
38,061

 
168,224

Total IMT segment revenue
280,856

 
1,201,143

Homes segment
—

 
52,365

Mortgages segment
19,023

 
80,046

Total revenue
$
299,879

 
$
1,333,554

Adjusted EBITDA (1):
 
 
 
IMT segment
$
46,683

 
$
240,026

Homes segment
(3,513
)
 
(48,461
)
Mortgages segment
3,140

 
9,267

Total Adjusted EBITDA
$
46,310

 
$
200,832

(1) See Exhibit 99.1 for more information regarding our presentation of Adjusted EBITDA. See below for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, which is net loss on a consolidated basis and loss before income taxes for each segment, for each of the periods presented.

For the purpose of providing comparisons to our 2019 outlook, the following table sets forth a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, which is net loss on a consolidated basis and loss before income taxes for each segment assuming we had three reportable segments, for each of the periods presented (in thousands, unaudited):
 
Three Months Ended
March 31, 2018
 
Year Ended
December 31, 2018
 
IMT
 
Homes
 
Mortgages
 
Consolidated
 
IMT
 
Homes
 
Mortgages
 
Consolidated
Reconciliation of Adjusted EBITDA to Net Loss and Loss Before Income Taxes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss (1)
N/A

 
N/A

 
N/A

 
$
(18,591
)
 
N/A

 
N/A

 
N/A

 
$
(119,858
)
Income tax (benefit) expense
N/A

 
N/A

 
N/A

 
2,600

 
N/A

 
N/A

 
N/A

 
(31,102
)
Loss before income taxes
$
(11,243
)
 
$
(4,390
)
 
$
(358
)
 
$
(15,991
)
 
$
(77,558
)
 
$
(59,691
)
 
$
(13,711
)
 
$
(150,960
)
Other income
(2,446
)
 
—

 
—

 
(2,446
)
 
(19,026
)
 
—

 
(244
)
 
(19,270
)
Depreciation and amortization expense
25,465

 
59

 
1,382

 
26,906

 
91,232

 
1,323

 
6,836

 
99,391

Share-based compensation expense
27,807

 
818

 
2,116

 
30,741

 
131,404

 
7,731

 
9,949

 
149,084

Impairment costs
—

 
—

 
—

 
—

 
75,000

 
—

 
4,000

 
79,000

Acquisition-related costs
27

 
—

 
—

 
27

 
27

 
—

 
2,305

 
2,332

Interest expense
7,073

 
—

 
—

 
7,073

 
38,946

 
2,177

 
132

 
41,255

Adjusted EBITDA
$
46,683

 
$
(3,513
)
 
$
3,140

 
$
46,310

 
$
240,025

 
$
(48,460
)
 
$
9,267

 
$
200,832

(1) We use loss before income taxes as our profitability measure in making operating decisions and assessing the performance of our segments, therefore, net loss is calculated and presented only on a consolidated basis within our financial statements.

9