NOTE 18 – SEGMENT AND GEOGRAPHICAL REPORTING

The Company’s reportable business segments are: Service Centers, Innovative Pumping Solutions and Supply Chain Services. The Service Centers segment is engaged in providing maintenance, MRO products and equipment, including logistics capabilities, to industrial customers. The Service Centers segment provides a wide range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products and safety services categories. The Innovative Pumping Solutions segment fabricates and assembles custom-made pump packages, remanufactures pumps and manufactures branded private label pumps. The Supply Chain Services segment manages all or part of a customer's MRO products supply chain, including warehouse and inventory management.

The high degree of integration of the Company’s operations necessitates the use of a substantial number of allocations and apportionments in the determination of business segment information. Sales are shown net of intersegment eliminations.

Business Segmented Financial Information

The following table sets out financial information relating the Company’s segments (in thousands):

Years Ended December 31,	Service Centers		Innovative Pumping Solutions		Supply Chain Services		Total
2017
Sales	$	641,275	$	204,030	$	161,477	$	1,006,782
Operating income for reportable segments, excluding amortization		63,250		11,423		15,451		90,124
Identifiable assets at year end		385,744		172,538		59,942		618,224
Capital expenditures		1,076		1,488		82		2,646
Depreciation		5,162		4,198		103		9,463
Amortization		8,989		7,194		1,083		17,266
Interest expense		9,712		5,352		1,990		17,054

2016
Sales	$	621,007		$	187,124		$	153,961	$	962,092
Operating income for reportable segments, excluding impairment expense		47,634			9,867			15,449		72,950
Identifiable assets at year end		370,261			175,198			44,796		590,255
Capital expenditures		447			3,827			129		4,403
Proceeds from sale of fixed assets		(1,038	)		(168	)		-		(1,206	)
Depreciation		6,520			3,834			126		10,480
Amortization		9,152			7,826			1,083		18,061
Interest expense		9,290			4,422			1,852		15,564

2015
Sales	$	826,588	$	254,829	$	165,626	$	1,247,043
Operating income for reportable segments, excluding impairment expense		78,170		21,584		14,213		113,967
Identifiable assets at year end		451,333		159,365		50,012		660,710
Capital expenditures		3,185		8,383		604		12,172
Depreciation		7,734		2,930		227		10,891
Amortization		10,334		8,406		1,881		20,621
Interest expense		2,967		6,881		1,084		10,932
Impairment expense by segment		15,842		52,893		-		68,735

	Years Ended December 31,

	2017			2016			2015
Operating income for reportable segments, excluding impairment expense	$	90,124		$	72,950		$	113,967
Adjustments for:
B27 settlement		-			-			7,348
Impairment expense		-			-			68,735
Amortization of intangibles		17,266			18,061			20,621
Corporate and other expense, net		39,368			35,557			45,179
Total operating income (loss)		33,490			19,332			(27,916	)
Interest expense		17,054			15,564			10,932
Other expenses (income), net		(456	)		(5,906	)		72
Income (loss) before income taxes	$	16,892		$	9,674		$	(38,920	)

The Company had capital expenditures at Corporate of $0.2 million, $0.5 million, and $1.8 million for the years ended December 31, 2017, 2016, and 2015, respectively. The Company had identifiable assets at Corporate of $19.4 million, $18.3 million, and $23.3 million as of December 31, 2017, 2016, and 2015, respectively. Corporate depreciation was $1.8 million, $1.4 million, and $1.7 million for the years ended December 31, 2017, 2016, and 2015, respectively.

Geographical Information

Revenues are presented in geographic area based on location of the facility shipping products or providing services. Long-lived assets are based on physical locations and are comprised of the net book value of property.

The Company’s revenues and property and equipment by geographical location are as follows (in thousands):

	Years Ended December 31,
	2017		2016		2015
Revenues
United States	$	902,636	$	873,926	$	1,119,210
Canada		104,146		88,166		127,833
Total	$	1,006,782	$	962,092	$	1,247,043

	As of December 31,
	2017		2016
Property and Equipment, net
United States	$	42,683	$	48,635
Canada		10,654		12,172
Total	$	53,337	$	60,807