16.

Segment Information:

The Company follows the accounting guidance that requires the utilization of a “management approach” to define and report the financial results of operating segments. The management approach defines operating segments along the lines used by the Company’s chief operating decision maker (CODM) to assess performance and make operating and resource allocation decisions. Our CODM evaluates performance and allocates resources based primarily on operating income. Our operating segments are based primarily on internal management reporting.

The Company operates in

three

reportable segments; carbon flat products, specialty metals flat products, and tubular and pipe products. The flat products segments’ assets and resources are shared by the carbon and specialty metals segments and both segments’ products are stored in the shared facilities and, in some locations, processed on shared equipment. As such, total assets and capital expenditures are reported in the aggregate for the flat products segments. Due to the shared assets and resources, certain of the flat products segment expenses are allocated between the carbon flat products segment and the specialty metals flat products segment based upon an established allocation methodology. Through its carbon flat products segment, the Company sells and distributes large volumes of processed carbon and coated flat-rolled sheet, coil and plate products. Through its specialty metals flat products segment, the Company sells and distributes processed aluminum and stainless flat-rolled sheet and coil products, flat bar products and fabricated parts. Through its acquisition of Berlin Metals on

April 2, 2018,

the specialty metals flat products segment expanded its product offerings to include prime tin mill products. Through its tubular and pipe products segment, the Company distributes metal tubing, pipe, bar, valve and fittings and fabricates pressure parts supplied to various industrial markets.

Corporate expenses are reported as a separate line item for segment reporting purposes. Corporate expenses include the unallocated expenses related to managing the entire Company (i.e., all

three

segments), including compensation for certain personnel, expenses related to being a publicly traded entity such as board of directors’ expenses, audit expenses, and various other professional fees.

The following table provides financial information by segment and reconciles the Company’s operating income by segment to the consolidated income before income taxes for the years ended

December 31, 2018,

2017

and

2016.

	For the Year Ended December 31,
(in thousands)	2018			2017			2016
Net sales
Carbon flat products	$	1,073,292		$	869,628		$	670,983
Specialty metals flat products		343,479			227,200			189,930
Tubular and pipe products		298,310			233,868			194,203
Total net sales	$	1,715,081		$	1,330,696		$	1,055,116

Depreciation and amortization
Carbon flat products	$	10,621		$	10,906		$	11,690
Specialty metals flat products		1,251			811			797
Tubular and pipe products		5,601			5,659			5,896
Corporate		135			102			102
Total depreciation and amortization	$	17,608		$	17,478		$	18,485

Operating income
Carbon flat products	$	44,354		$	17,886		$	(4,371	)
Specialty metals flat products		15,248			11,240			9,841
Tubular and pipe products		11,520			4,568			7,713
Corporate		(14,070	)		(9,708	)		(7,435	)
Total operating income	$	57,052		$	23,986		$	5,748
Other loss, net		(307	)		(118	)		(55	)
Income before interest and income taxes		56,745			23,868			5,693
Interest and other expense on debt		10,681			7,518			5,273
Income before income taxes	$	46,064		$	16,350		$	420

	For the Year Ended December 31,
(in thousands)	2018		2017		2016
Capital expenditures
Flat products	$	19,985	$	7,325	$	5,105
Tubular and pipe products		5,242		2,833		1,719
Corporate		488		2		-
Total capital expenditures	$	25,715	$	10,160	$	6,824

Assets
Flat products	$	560,116	$	409,116
Tubular and pipe products		200,016		194,787
Corporate		608		255
Total assets	$	760,740	$	604,158

There were

material revenue transactions between the carbon flat products, specialty metals flat products and tubular and pipe products segments for the years ended

December 31, 2018,

2017

and

2016.

The Company sells certain products internationally, primarily in Canada and Mexico. International sales are immaterial to the consolidated financial results and to the individual segments’ results.