NOTE 9 – SEGMENTS

The Company and its subsidiaries are principally engaged in the international operation of membership shopping in 41 warehouse clubs located in 12 countries and one U.S. territory 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 (1)		Colombia Operations		Reconciling Items(2)		Total
Three Months Ended November 30, 2018
Revenue from external customers	$	17,339	$	439,806	$	225,009	$	97,483	$	—	$	779,637
Intersegment revenues		350,719		437		1,093		278		(352,527)		—
Depreciation, Property and equipment		1,960		5,870		3,191		2,103		—		13,124
Amortization, Intangibles		599		—		—		—		—		599
Operating income (loss)		(1,050)		28,792		12,027		3,416		(18,515)		24,670
Net income (loss) attributable to PriceSmart, Inc. (3)		(3,825)		24,185		9,985		2,815		(18,548)		14,612
Long-lived assets (other than deferred tax assets)		90,061		320,136		149,823		110,969		—		670,989
Intangibles, net		14,381		—		—		—		—		14,381
Goodwill		11,230		24,726		10,292		—		—		46,248
Total assets		158,591		592,114		346,397		180,141		—		1,277,243
Capital expenditures, net		1,686		22,771		10,495		1,387		—		36,339

Three Months Ended November 30, 2017
Revenue from external customers	$	8,147	$	452,166	$	214,642	$	92,117	$	—	$	767,072
Intersegment revenues		340,128		—		1,207		198		(341,533)		—
Depreciation and amortization		1,744		5,523		2,677		2,293		—		12,237
Operating income		3,739		31,942		11,470		2,145		(16,130)		33,166
Net income		82		26,796		10,317		1,425		(16,130)		22,490
Capital expenditures, net		1,004		11,370		10,297		832		—		23,503
Long-lived assets (other than deferred tax assets)		70,352		304,434		130,896		121,629		—		627,311
Goodwill		—		31,014		4,564		—		—		35,578
Total assets		121,674		580,523		334,279		186,352		—		1,222,828

As of August 31, 2018
Long-lived assets (other than deferred tax assets)		67,650		320,612		150,516		118,284		—		657,062
Intangibles, net		14,980		—		—		—		—		14,980
Goodwill		11,230		30,646		4,453		—		—		46,329
Total assets		186,174		536,756		310,411		183,051		—		1,216,392

⁽¹⁾

Management considers its club in the U.S. Virgin Islands to be part of its Caribbean operations.

⁽²⁾

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

⁽³⁾

In March 2018, the Company acquired Aeropost, Inc. During the three months ended November 30, 2018, the consolidated net income attributable to PriceSmart Inc. contained approximately $3.9 million costs associated with Aeropost and omni-channel development initiatives.