SEGMENT AND GEOGRAPHIC INFORMATION

Effective July 1, 2017, the Company completed a number of changes to its organizational structure that resulted in a change in how the Company manages its businesses, allocates resources and measures performance. As a result, the Company has revised its reportable segments to reflect how management currently reviews financial information and makes operating decisions. All Canadian and Mexican subsidiaries are now grouped under the Service Center Based Distribution segment. All prior-period amounts have been adjusted to reflect the reportable segment change.

The accounting policies of the Company’s reportable segments are generally the same as those used to prepare the condensed consolidated financial statements. Intercompany sales primarily from the Fluid Power Businesses segment to the Service Center Based Distribution segment of $5,664 and $5,264, in the three months ended December 31, 2017 and 2016, respectively, and $11,755 and $10,528 in the six months ended December 31, 2017 and 2016, respectively, have been eliminated in the Segment Financial Information tables below.



Three Months Ended	Service Center Based Distribution		Fluid Power Businesses		Total
December 31, 2017
Net sales	$	555,607	$	111,580	$	667,187
Operating income for reportable segments	30,006		13,824		43,830
Depreciation and amortization of property	3,802		279		4,081
Capital expenditures	4,822		302		5,124

December 31, 2016
Net sales	$	514,334	$	93,789	$	608,123
Operating income for reportable segments	22,087		9,700		31,787
Depreciation and amortization of property	3,608		229		3,837
Capital expenditures	3,344		367		3,711



Six Months Ended	Service Center Based Distribution		Fluid Power Businesses		Total
December 31, 2017
Net sales	$	1,124,520	$	223,368	$	1,347,888
Operating income for reportable segments	63,728		27,114		90,842
Assets used in business	1,199,704		206,178		1,405,882
Depreciation and amortization of property	7,471		537		8,008
Capital expenditures	10,370		1,090		11,460

December 31, 2016
Net sales	$	1,043,564	$	189,407	$	1,232,971
Operating income for reportable segments	49,083		20,178		69,261
Assets used in business	1,146,232		148,284		1,294,516
Depreciation and amortization of property	7,024		463		7,487
Capital expenditures	6,268		442		6,710

A reconciliation of operating income for reportable segments to the condensed consolidated income before income taxes is as follows:



	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2017			2016			2017			2016
Operating income for reportable segments	$	43,830		$	31,787		$	90,842		$	69,261
Adjustment for:
Intangible amortization—Service Center Based Distribution	4,425			4,752			8,937			9,598
Intangible amortization—Fluid Power Businesses	1,270			1,342			2,589			2,733
Corporate and other income, net	(8,580		)	(12,163		)	(19,236		)	(24,345		)
Total operating income	46,715			37,856			98,552			81,275
Interest expense, net	2,139			2,100			4,305			4,246
Other income, net	(20		)	(11		)	(731		)	(208		)
Income before income taxes	$	44,596		$	35,767		$	94,978		$	77,237

The change in corporate and other income, net is due to changes in the amounts and levels of certain supplier support benefits as well as expenses being allocated to the segments. The expenses being allocated include corporate charges for working capital, logistics support and other items.

Net sales are presented in geographic areas based on the location of the facility shipping the product and are as follows:



	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Geographic Areas:
United States	$	557,031	$	508,542	$	1,124,576	$	1,031,909
Canada	67,479		62,204		134,296		124,785
Other countries	42,677		37,377		89,016		76,277
Total	$	667,187	$	608,123	$	1,347,888	$	1,232,971

Other countries consist of Mexico, Australia, New Zealand, and Singapore.