Segment and Geographic Information

The Company identifies its operating segments based primarily on the way the Chief Operating Decision Maker (“CODM”) evaluates performance and makes decisions. From the perspective of the CODM, the Company is engaged primarily in the business of distributing packaged consumer products to convenience retail stores in the U.S. and Canada, which consists of customers that have similar characteristics. Therefore, the Company has determined that it has two operating segments, U.S. and Canada that aggregate to one reportable segment. Additionally, the Company presents its segment reporting information based on business operations for each of the two geographic areas in which it operates and also by major product category.

Information about the Company’s business operations based on geographic areas is as follows (in millions):



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Net sales:
United States	$	3,445.2		$	3,307.1		$	6,635.3		$	6,043.3
Canada	347.5			373.1			650.6			642.5
Corporate ⁽¹⁾	8.0			7.2			19.0			12.9
Total	$	3,800.7		$	3,687.4		$	7,304.9		$	6,698.7

Income (loss) before income taxes:
United States	$	12.6		$	29.4		$	15.6		$	34.3
Canada	2.4			1.3			4.1			1.1
Corporate ⁽²⁾	(3.8		)	(4.3		)	(7.6		)	0.2
Total	$	11.2		$	26.4		$	12.1		$	35.6

Interest expense:
United States	$	10.6		$	10.2		$	21.5		$	19.8
Canada	0.2			0.2			0.5			0.5
Corporate ⁽³⁾	(8.8		)	(9.4		)	(18.0		)	(18.5		)
Total	$	2.0		$	1.0		$	4.0		$	1.8

Depreciation and amortization:
United States	$	8.7		$	7.4		$	17.4		$	14.8
Canada	0.6			0.7			1.2			1.2
Corporate ⁽⁴⁾	2.9			2.1			5.7			3.8
Total	$	12.2		$	10.2		$	24.3		$	19.8

Capital expenditures:
United States	$	16.5		$	13.3		$	29.9		$	21.8
Canada	0.6			0.7			0.9			1.0
Total	$	17.1		$	14.0		$	30.8		$	22.8

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(1)	Consists primarily of external sales made by the Company’s consolidating warehouses, management service fee revenue, allowance for sales returns and certain other sales adjustments.


(2)	Consists primarily of expenses and other income, such as corporate incentives and salaries, LIFO expense, health care costs, insurance and workers’ compensation adjustments, elimination of overhead allocations and foreign exchange gains or losses.


(3)	Consists primarily of intercompany eliminations for interest.


(4)	Consists primarily of depreciation for the consolidation centers and amortization of intangible assets.

Identifiable assets by geographic area are as follows (in millions):



	June 30, 2017		December 31, 2016
Identifiable assets:
United States	$	1,366.6	$	1,312.5
Canada	119.3		179.7
Total	$	1,485.9	$	1,492.2

The net sales mix for the Company’s primary product categories is as follows (in millions):



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2017			2016		2017			2016
Product Category	Net Sales			Net Sales		Net Sales			Net Sales
Cigarettes	$	2,666.2		$	2,631.1	$	5,152.9		$	4,745.7
Food ⁽¹⁾	363.3			357.0		698.3			659.6
Fresh ⁽¹⁾	102.5			97.2		200.1			182.9
Candy	199.5			159.6		352.2			300.3
Other tobacco products	303.2			285.0		581.9			522.5
Health, beauty & general	118.0			106.8		236.1			202.5
Beverages	48.4			49.5		83.9			83.8
Equipment/other	(0.4		)	1.2		(0.5		)	1.4
Total food/non-food products	1,134.5			1,056.3		2,152.0			1,953.0
Total net sales	$	3,800.7		$	3,687.4	$	7,304.9		$	6,698.7

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(1)	In the third quarter of 2016, Fresh as a category was separated from the Food category to better highlight the growth in the Fresh category. The 2016 presentation has been restated to reflect these changes.