NOTE U— SEGMENT REPORTING

Our business is organized into two reportable segments, Oil & Gas Proppants and Industrial & Specialty Products, based on end markets. The reportable segments are consistent with how management views the markets that we serve and the financial information reviewed by the chief operating decision maker. We manage our Oil & Gas Proppants and Industrial & Specialty Products businesses as components of an enterprise for which separate information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance.

In the Oil & Gas Proppants segment, we serve the oil and gas recovery market primarily by providing and delivering fracturing sand, or “frac sand,” which is pumped down oil and natural gas wells to prop open rock fissures and increase the flow rate of oil and natural gas from the wells.

The Industrial & Specialty Products segment consists of over 400 products and materials used in a variety of industries, including container glass, fiberglass, specialty glass, flat glass, building products, fillers and extenders, foundry products, chemicals, recreation products and filtration products.

An operating segment’s performance is primarily evaluated based on segment contribution margin, which excludes certain corporate costs not associated with the operations of the segment. These corporate costs are separately stated below and include costs that are related to functional areas such as operations management, corporate purchasing, accounting, treasury, information technology, legal and human resources. We believe that segment contribution margin, as defined above, is an appropriate measure for evaluating the operating performance of our segments. However, this measure should be considered in addition to, not a substitute for, or superior to, net income (loss) or other measures of financial performance prepared in accordance with generally accepted accounting principles. The other accounting policies of each of the two reporting segments are the same as those in Note A - Summary of Significant Accounting Policies to these Financial Statements.

The following table presents sales and segment contribution margin (in thousands) for the reporting segments and other operating results not allocated to the reported segments for the three and six months ended June 30, 2018 and 2017:



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Sales:
Oil & Gas Proppants	$	324,063		$	235,018		$	636,993		$	427,976
Industrial & Specialty Products	103,370			55,447			159,753			107,286
Total sales	427,433			290,465			796,746			535,262
Segment contribution margin:
Oil & Gas Proppants	114,607			71,222			214,041			110,062
Industrial & Specialty Products	41,301			23,267			61,831			43,484
Total segment contribution margin	155,908			94,489			275,872			153,546
Operating activities excluded from segment cost of sales	(21,320		)	(988		)	(32,881		)	(2,436		)
Selling, general and administrative	(42,232		)	(25,839		)	(76,823		)	(47,978		)
Depreciation, depletion and amortization	(36,563		)	(23,626		)	(65,155		)	(45,225		)
Asset impairment	(16,184		)	—			(16,184		)	—
Interest expense	(20,214		)	(8,105		)	(27,284		)	(15,751		)
Other income (expense), net, including interest income	1,081			638			1,746			(4,779		)
Income tax expense	(2,832		)	(7,110		)	(10,353		)	(5,396		)
Net income	$	17,644		$	29,459		$	48,938		$	31,981

Asset information, including capital expenditures and depreciation, depletion, and amortization, by segment is not included in reports used by management in its monitoring of performance and, therefore, is not reported by segment. At June 30, 2018, goodwill of $414.3 million has been allocated to these segments with $250.3 million assigned to Oil & Gas Proppants and $164.0 million to Industrial & Specialty Products. At December 31, 2017, goodwill of $272.1 million had been allocated to these segments with $247.5 million assigned to Oil & Gas Proppants and $24.6 million to Industrial & Specialty Products.