15.

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. Certain of 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 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, 2017,

2016

and

2015.

	For the Year Ended December 31,
(in thousands )	201 7			201 6			201 5
Net sale s
Carbon flat product s	$	869,628		$	670,983		$	765,400
Specialty metals flat products		227,200			189,930			192,516
Tubular and pipe product s		233,868			194,203			217,627
Total net sale s	$	1,330,696		$	1,055,116		$	1,175,543

Depreciation and amortizatio n
Carbon flat product s	$	10,906		$	11,690		$	12,200
Specialty metals flat product s		811			797			698
Tubular and pipe product s		5,659			5,896			6,036
Corporat e		102			102			102
Total depreciation and amortizatio n	$	17,478		$	18,485		$	19,036

Operating incom e
Carbon flat product s	$	17,886		$	(4,371	)	$	(7,217	)
Specialty metals flat product s		11,240			9,841			(1,074	)
Tubular and pipe product s		4,568			7,713			12,583
Corporat e		(9,708	)		(7,435	)		(7,120	)
Goodwill and intangible asset impairment (a )		-			-			(24,951	)
Total operating income (loss )	$	23,986		$	5,748		$	(27,779	)
Other loss, ne t		(118	)		(55	)		(125	)
Income (loss) before interest and income taxe s		23,868			5,693			(27,904	)
Interest and other expense on deb t		7,518			5,273			5,690
Income (loss) before income taxe s	$	16,350		$	420		$	(33,594	)

(a)	$24,451 of the goodwill and intangible asset impairment in 2015 related to the tubular and pipe products segment, $500 related to the specialty metals flat products segment.

	For the Year Ended December 31 ,
(in thousands )	201 7		201 6		201 5
Capital expenditure s
Flat product s	$	7,325	$	5,105	$	4,295
Tubular and pipe product s		2,833		1,719		3,022
Corporate		2		-		-
Total capital expenditure s	$	10,160	$	6,824	$	7,317

Asset s
Flat product s	$	409,116	$	363,626
Tubular and pipe product s		194,787		192,088
Corporat e		255		354
Total asset s	$	604,158	$	556,068

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, 2017,

2016

and

2015.

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

’ results.