We manage our business by our four reporting segments: Bone Growth Therapies, Spinal Implants, Biologics, and Orthofix Extremities. These reporting segments represent the operating segments for which our Chief Executive Officer, who is also Chief Operating Decision Maker (the “CODM”), reviews financial information and makes resource allocation decisions among businesses. The primary metric used by the CODM in managing the Company is non-GAAP net margin, an internal metric that the Company defines as gross profit less sales and marketing expense. The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information. Accordingly, our reporting segment information has been prepared based on our four reporting segments.

The Bone Growth Therapies reporting segment manufactures, distributes, and provides support services of market leading bone growth stimulator devices that enhance bone fusion. These Class III medical devices are indicated as an adjunctive, noninvasive treatment to improve fusion success rates in cervical and lumbar spine as well as a therapeutic treatment for non-spine fractures that have not healed (non-unions). This reporting segment uses distributors and sales representatives to sell its devices to hospitals, healthcare providers, and patients, primarily in the U.S.

The Spinal Implants reporting segment designs, develops and markets a broad portfolio of motion preservation and implant products used in surgical procedures of the spine. Spinal Implants distributes its products through a network of distributors and sales representatives to sell spine products to hospitals and healthcare providers, globally.

The Biologics reporting segment provides a portfolio of regenerative products and tissue forms that allow physicians to successfully treat a variety of spinal and orthopedic conditions. This reporting segment specializes in the marketing of the Company’s exclusive regeneration tissue forms and distributes its tissues to hospitals and healthcare providers, primarily in the U.S., through a network of employed and independent sales representatives. Our partnership with MTF allows us to exclusively market the Trinity Evolution and Trinity ELITE tissue forms for musculoskeletal defects to enhance bony fusion.

The Orthofix Extremities reporting segment offers products and solutions that allow physicians to successfully treat a variety of orthopedic conditions unrelated to the spine. This reporting segment specializes in the design, development, and marketing of the Company’s orthopedic products used in fracture repair, deformity correction and bone reconstruction procedures. Orthofix Extremities distributes its products through a network of distributors and sales representatives to sell orthopedic products to hospitals, and healthcare providers, globally.

Corporate activities are comprised of the operating expenses and activities of the Company not necessarily identifiable within the four reporting segments.

	Year Ended December 31,
	2018					2017					2016
(U.S. Dollars, in thousands)	Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales
Bone Growth Therapies	$	195,252		43.1	%	$	185,900		42.9	%	$	176,561		43.1	%
Spinal Implants		91,658		20.2	%		81,957		18.9	%		72,632		17.7	%
Biologics		59,684		13.2	%		62,724		14.4	%		57,912		14.1	%
Orthofix Extremities		106,448		23.5	%		103,242		23.8	%		102,683		25.1	%
Net sales	$	453,042		100.0	%	$	433,823		100.0	%	$	409,788		100.0	%

The following table presents Non-GAAP net margin, and internal metric that the Company defines as gross profit less sales and marketing expense, by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2018			2017			2016
Bone Growth Therapies	$	86,252		$	77,369		$	75,469
Spinal Implants		7,628			8,730			8,650
Biologics		26,298			25,692			26,891
Orthofix Extremities		31,391			31,071			30,526
Corporate		(682	)		(446	)		(888	)
Non-GAAP net margin	$	150,887		$	142,416		$	140,648
General and administrative		84,506			71,905			76,409
Research and development		33,218			29,700			28,803
Changes in fair value of contingent consideration		3,069			—			—
Charges related to U.S. Government resolutions		—			—			14,369
Operating income	$	30,094		$	40,811		$	21,067
Interest income (expense), net		(828	)		(416	)		763
Other expense, net		(6,381	)		(4,004	)		(2,806	)
Income before income taxes	$	22,885		$	36,391		$	19,024

The following table presents depreciation and amortization by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2018		2017		2016
Bone Growth Therapies	$	1,770	$	2,133	$	2,754
Spinal Implants		7,294		6,949		8,118
Biologics		448		752		1,011
Orthofix Extremities		5,342		6,040		5,742
Corporate		3,805		4,250		3,216
Total	$	18,659	$	20,124	$	20,841

(U.S. Dollars, in thousands)	2018		2017		2016
U.S.	$	355,353	$	345,145	$	316,873
Italy		19,331		17,059		16,664
Germany		11,606		7,063		6,448
United Kingdom		8,731		8,725		10,362
Brazil		7,120		10,356		11,334
Others		50,901		45,475		48,107
Net sales	$	453,042	$	433,823	$	409,788

The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:

(U.S. Dollars, in thousands)	2018		2017		2016
Bone Growth Therapies
U.S.	$	195,189	$	185,853	$	176,510
International		63		47		51
Total Bone Growth Therapies		195,252		185,900		176,561

Spinal Implants
U.S.		72,137		69,704		57,772
International		19,521		12,253		14,860
Total Spinal Implants		91,658		81,957		72,632

Biologics
U.S.		59,668		62,670		57,574
International		16		54		338
Total Biologics		59,684		62,724		57,912

Orthofix Extremities
U.S.		28,359		26,918		25,017
International		78,089		76,324		77,666
Total Orthofix Extremities		106,448		103,242		102,683

Consolidated
U.S.		355,353		345,145		316,873
International		97,689		88,678		92,915
Net sales	$	453,042	$	433,823	$	409,788

(U.S. Dollars, in thousands)	2018		2017
U.S.	$	31,344	$	34,008
Italy		7,732		7,658
Germany		861		933
United Kingdom		896		382
Brazil		191		475
Others		1,811		1,683
Total	$	42,835	$	45,139