NOTE 15 – SEGMENTS

The Company and its subsidiaries are principally engaged in the international operation of membership shopping in 39 warehouse clubs located in 13 countries/territories that are located in Central America, the Caribbean and Colombia. In addition, the Company operates distribution centers and corporate offices in the United States. The Company has aggregated its warehouse clubs, distribution centers and corporate offices into reportable segments. The Company’s reportable segments are based on management’s organization of these locations into operating segments by general geographic location, used by management and the Company's chief operating decision maker in setting up management lines of responsibility, providing support services, and making operational decisions and assessments of financial performance. Segment amounts are presented after converting to U.S. dollars and consolidating eliminations. Certain revenues, operating costs and inter-company charges included in the United States segment are not allocated to the segments within this presentation, as it is impractical to do so, and they appear as reconciling items to reflect the amount eliminated on consolidation of intersegment transactions. From time to time, the Company revises the measurement of each segment's operating income and net income, including certain corporate overhead allocations, and other measures as determined by the information regularly reviewed by the Company's chief operating decision maker. When the Company does so, the previous period amounts and balances are reclassified to conform to the current period's presentation.

The following tables summarize by segment certain revenues, operating costs and balance sheet items (in thousands):



	United States Operations			Central American Operations		Caribbean Operations		Colombia Operations		Reconciling Items(1)		Total
Years Ended August 31, 2017
Revenue from external customers	$	34,244		$	1,789,889	$	827,920	$	344,575	$	—	$	2,996,628
Intersegment revenues		1,138,526			—		4,796		110		(1,143,432)		—
Depreciation and amortization		6,653			20,252		10,205		9,182		—		46,292
Operating income (loss)		10,436			134,826		47,190		4,932		(61,155)		136,229
Interest income from external sources		13			914		740		142		—		1,809
Interest income from intersegment sources		739			882		546		—		(2,167)		—
Interest expense from external sources		762			4,127		548		1,340		—		6,777
Interest expense from intersegment sources		42			1,106		990		34		(2,172)		—
Provision for income taxes		9,560			23,368		7,654		1,436		—		42,018
Net income (loss)		3,893			107,797		38,403		1,786		(61,155)		90,724
Long-lived assets (other than deferred tax assets)		70,353			296,915		122,616		126,206		—		616,090
Goodwill		—			31,118		4,524		—		—		35,642
Investment in unconsolidated affiliates		—			10,765		—		—		—		10,765
Total assets		147,650			544,683		303,234		181,947		—		1,177,514
Capital expenditures, net		56,229			50,977		26,586		3,232		—		137,024

Years Ended August 31, 2016
Revenue from external customers	$	33,885		$	1,758,853	$	840,648	$	271,790	$	—	$	2,905,176
Intersegment revenues		1,086,677			—		5,941		—		(1,092,618)		—
Depreciation and amortization		4,775			18,673		9,907		6,439		—		39,794
Operating income (loss)		10,970	(2)		135,232		51,450		(5,403)		(55,526)		136,723
Interest income from external sources		25			802		381		99		—		1,307
Interest income from intersegment sources		2,519			944		554		—		(4,017)		—
Interest expense from external sources		—			4,823		547		521		—		5,891
Interest expense from intersegment sources		61			2,059		1,854		49		(4,023)		—
Provision for income taxes		10,047			23,227		8,697		878		—		42,849
Net income (loss)		935	(2)		107,396		43,114		(7,196)		(55,526)		88,723
Long-lived assets (other than deferred tax assets)		19,222			271,039		108,426		137,599		—		536,286
Goodwill		—			31,091		4,546		—				35,637
Investment in unconsolidated affiliates		—			10,767		—		—		—		10,767
Total assets		100,744			515,478		287,088		193,425		—		1,096,735
Capital expenditures, net		8,617			29,375		11,402		30,300		—		79,694

Years Ended August 31, 2015
Revenue from external customers	$	33,320		$	1,625,567	$	821,047	$	322,669	$	—	$	2,802,603
Intersegment revenues		1,107,592			—		5,626		—		(1,113,218)		—
Depreciation and amortization		2,733			15,115		9,605		6,992		—		34,445
Operating income (loss)		28,789			129,555		48,856		(1,846)		(58,988)		146,366
Interest income from external sources		79			811		114		54		—		1,058
Interest income from intersegment sources		3,142			282		556		—		(3,980)		—
Interest expense from external sources		5			4,147		607		1,681		—		6,440
Interest expense from intersegment sources		126			1,204		1,966		684		(3,980)		—
Provision for income taxes		15,548			24,618		6,787		613		—		47,566
Net income (loss)		13,551			101,190		41,130		(7,759)		(58,988)		89,124
Long-lived assets (other than deferred tax assets)		15,391			255,576		107,746		105,290		—		484,003
Goodwill		—			31,211		4,660		—		—		35,871
Investment in unconsolidated affiliates		—			10,317		—		—		—		10,317
Total assets		89,133			491,155		239,272		171,664		—		991,224
Capital expenditures, net		1,655			54,735		10,619		24,172		—		91,181

(1) The reconciling items reflect the amount eliminated on consolidation of intersegment transactions.

(2)The decrease in operating income and net income for the United States Operations in fiscal year 2016 compared to fiscal year 2015 was primarily a result of the increase in operating expenses related to intercompany transactions with the Company’s Colombia subsidiary of approximately $10.9 million. This activity results in reductions to taxable income in the U.S. that lowered the provision for income taxes by approximately $3.9 million.