Segment and Geographic Information

The Company identifies its operating segments based primarily on the methods used by the Chief Operating Decision Maker (“CODM”) to evaluate performance and make 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						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net sales:
United States	$	3,904.6		$	3,591.0		$	10,539.9		$	9,634.3
Canada	394.5			387.7			1,045.1			1,030.2
Corporate ⁽¹⁾	11.6			15.2			30.6			28.1
Total	$	4,310.7		$	3,993.9		$	11,615.6		$	10,692.6

Income (loss) before income taxes:
United States	$	27.2		$	24.8		$	42.8		$	59.1
Canada	2.2			2.3			6.3			3.4
Corporate ⁽²⁾	(7.6		)	(6.9		)	(15.2		)	(6.7		)
Total	$	21.8		$	20.2		$	33.9		$	55.8

Interest expense:
United States	$	13.1		$	9.9		$	34.6		$	29.7
Canada	0.1			0.2			0.6			0.7
Corporate ⁽³⁾	(9.3		)	(8.6		)	(27.3		)	(27.1		)
Total	$	3.9		$	1.5		$	7.9		$	3.3

Depreciation and amortization:
United States	$	10.3		$	7.7		$	27.7		$	22.5
Canada	0.6			0.7			1.8			1.9
Corporate ⁽⁴⁾	4.4			3.0			10.1			6.8
Total	$	15.3		$	11.4		$	39.6		$	31.2

Capital expenditures:
United States	$	12.7		$	21.1		$	42.6		$	42.9
Canada	0.5			0.6			1.4			1.6
Total	$	13.2		$	21.7		$	44.0		$	44.5

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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):



	September 30, 2017		December 31, 2016
Identifiable assets:
United States	$	1,588.3	$	1,312.5
Canada	120.7		179.7
Total	$	1,709.0	$	1,492.2

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



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Product Category	Net Sales		Net Sales		Net Sales		Net Sales
Cigarettes	$	2,958.6	$	2,855.3	$	8,111.5	$	7,601.0
Food	447.2		387.5		1,145.5		1,047.2
Fresh	122.4		106.4		322.5		289.2
Candy	249.1		165.6		601.3		465.9
Other tobacco products	343.8		306.7		925.7		829.2
Health, beauty & general	131.7		118.0		367.8		320.5
Beverages	56.9		53.3		140.8		137.1
Equipment/other	1.0		1.1		0.5		2.5
Total food/non-food products	1,352.1		1,138.6		3,504.1		3,091.6
Total net sales	$	4,310.7	$	3,993.9	$	11,615.6	$	10,692.6