SEGMENT AND GEOGRAPHIC INFORMATION

Effective July 1, 2017, the Company completed a number of changes to its organizational structure that resulted in a change in how the Company manages its businesses, allocates resources and measures performance. As a result, the Company has revised its reportable segments to reflect how management currently reviews financial information and makes operating decisions. All Canadian and Mexican subsidiaries are now grouped under the Service Center Based Distribution segment. All prior-period amounts have been adjusted to reflect the reportable segment change.

The Company's reportable segments are: Service Center Based Distribution and Fluid Power & Flow Control. These reportable segments contain the Company's various operating segments which have been aggregated based upon similar economic and operating characteristics. The Service Center Based Distribution segment provides customers with solutions to their maintenance, repair and original equipment manufacturing needs through the distribution of industrial products including bearings, power transmission components, fluid power components and systems, industrial rubber products, linear motion products, tools, safety products, and other industrial and maintenance supplies. The Fluid Power & Flow Control segment distributes engineered fluid power components and specialty flow control solutions and operates shops that assemble fluid power systems and components, performs equipment repair, and offers technical advice to customers.

The accounting policies of the Company’s reportable segments are generally the same as those described in note 1. Intercompany sales, primarily from the Fluid Power & Flow Control segment to the Service Center Based Distribution segment of $25,556, $22,719, and $20,261, in 2018, 2017, and 2016, respectively, have been eliminated in the following table.

Segment Financial Information



	Service Center Based Distribution		Fluid Power & Flow Control		Total
Year Ended June 30, 2018
Net sales	$	2,346,418	$	726,856	$	3,073,274
Operating income for reportable segments	136,718		83,194		219,912
Assets used in the business	1,198,296		1,087,445		2,285,741
Depreciation and amortization of property	15,336		2,462		17,798
Capital expenditures	18,492		4,738		23,230
Year Ended June 30, 2017
Net sales	$	2,180,358	$	413,388	$	2,593,746
Operating income for reportable segments	115,794		46,569		162,363
Assets used in the business	1,187,054		200,541		1,387,595
Depreciation and amortization of property	14,375		931		15,306
Capital expenditures	14,566		2,479		17,045
Year Ended June 30, 2016
Net sales	$	2,150,478	$	368,950	$	2,519,428
Operating income for reportable segments	113,111		37,174		150,285
Assets used in the business	1,132,222		179,803		1,312,025
Depreciation and amortization of property	15,049		917		15,966
Capital expenditures	12,500		630		13,130

ERP related assets are included in assets used in the business and capital expenditures within the Service Center Based Distribution segment. Within the geographic disclosures, these assets are included in the United States. Expenses associated with the ERP are included in the Corporate and other income, net, line in the reconciliation of operating income for reportable segments to the consolidated income before income taxes table below.

A reconciliation of operating income for reportable segments to the consolidated income before income taxes
is as follows:



Year Ended June 30,	2018			2017			2016
Operating income for reportable segments	$	219,912		$	162,363		$	150,285
Adjustments for:
Intangible amortization — Service Center Based Distribution	17,375			18,954			19,913
Intangible amortization — Fluid Power & Flow Control	14,690			5,417			5,667
Goodwill Impairment — Service Center Based Distribution	—			—			64,794
Corporate and other income, net	(37,980		)	(37,394		)	(29,871		)
Total operating income	225,827			175,386			89,782
Interest expense, net	23,485			8,541			8,763
Other (income) expense, net	(2,376		)	(121		)	2,041
Income before income taxes	$	204,718		$	166,966		$	78,978

Fluctuations in corporate and other income, net, are due to changes in corporate expenses, as well as in the amounts and levels of certain supplier support benefits and expenses being allocated to the segments. The expenses being allocated include corporate charges for working capital, logistics support and other items.

Product Category

Net sales by product category are as follows:



Year Ended June 30,	2018		2017		2016
Industrial	$	2,085,571	$	1,855,437	$	1,836,484
Fluid power & flow control	987,703		738,309		682,944
Net sales	$	3,073,274	$	2,593,746	$	2,519,428

The fluid power & flow control product category includes sales of hydraulic, pneumatic, lubrication, filtration, and flow control components and systems, and repair services through the Company’s Fluid Power & Flow Control segment as well as the Service Center Based Distribution segment.

Geographic Information

Net sales are presented in geographic areas based on the location of the facility shipping the product. Long-lived assets are based on physical locations and are comprised of the net book value of property and intangible assets. Information by geographic area is as follows:



Year Ended June 30,	2018		2017		2016
Net Sales:
United States	$	2,615,041	$	2,182,552	$	2,117,485
Canada	273,622		251,999		257,797
Other Countries	184,611		159,195		144,146
Total	$	3,073,274	$	2,593,746	$	2,519,428



June 30,	2018		2017		2016
Long-Lived Assets:
United States	$	501,373	$	207,126	$	225,538
Canada	50,261		57,947		66,304
Other Countries	5,656		6,558		7,163
Total	$	557,290	$	271,631	$	299,005

Other countries consist of Mexico, Australia, New Zealand, and Singapore.