Segments

ASC 280, Segment Reporting, defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance.

The Company’s operating segments consist of the Mid-Atlantic, Southeast, Texas, Intermountain and Western divisions. The CODM reviews aggregate information to allocate resources and assess performance. Based on the CODM’s review, as well as the similar economic characteristics, nature of products, distribution methods and customers of the divisions, the Company has aggregated its operating segments into one reportable segment, “Geographic divisions.”

In addition to the Company’s reportable segment, the Company’s consolidated results include “Other reconciling items.” Other reconciling items comprises the Company’s corporate activities and other income and expenses not allocated to the operating segments.

The following tables present Net Sales, Adjusted EBITDA and certain other measures for the reportable segment and total Company operations for the three and nine months ended September 30, 2018 and 2017. Adjusted EBITDA is used as a performance metric by the CODM in determining how to allocate resources and assess performance.



	Three Months Ended September 30, 2018
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	990,264	$	241,303	$	16,106	$	92,698
Other reconciling items	—		—		520		(18,330		)
	$	990,264	$	241,303	$	16,626



	Three Months Ended September 30, 2017
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	881,012	$	209,545	$	16,996	$	70,158
Other reconciling items	—		—		629		(10,861		)
	$	881,012	$	209,545	$	17,625



	Nine Months Ended September 30, 2018
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	2,822,927	$	679,986	$	47,079	$	252,873
Other reconciling items	—		—		1,481		(52,496		)
	$	2,822,927	$	679,986	$	48,560



	Nine Months Ended September 30, 2017
(in thousands)	Net Sales		Gross Profit		Depreciation & Amortization		Adjusted EBITDA
Geographic divisions	$	2,525,087	$	599,429	$	50,167	$	188,882
Other reconciling items	—		—		1,829		(36,445		)
	$	2,525,087	$	599,429	$	51,996

Reconciliation to consolidated financial statements:



	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	2018			2017		2018			2017
Income before income taxes	$	46,818		$	27,996	$	119,451		$	59,689
Interest expense	5,926			6,377		17,916			18,960
Interest income	(117		)	—		(117		)	—
Depreciation and amortization	16,626			17,625		48,560			51,996
Merger and integration costs	1,459			2,574		3,627			13,339
Non-cash stock compensation expense	3,310			1,366		8,226			4,751
Acquisition costs	—			—		267			317
Other items (a)	346			3,359		2,447			3,385
Adjusted EBITDA of other reconciling items	18,330			10,861		52,496			36,445
Adjusted EBITDA of geographic divisions reportable segment	$	92,698		$	70,158	$	252,873		$	188,882

(a) For the three and nine months ended September 30, 2018, the amounts represent costs incurred in connection with the departure of the Company’s former chief executive officer and the search for and appointment of his permanent replacement. For the three and nine months ended September 30, 2017, the amounts represent asset impairment charges related to real estate held for sale and expense incurred related to pending litigation.