26. Business Segment Information

The Company has three reportable segments. Operations and revenues for each segment are described below:

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The Polyester Segment manufactures Chip, POY, textured, dyed, twisted, beamed and draw wound yarns, both virgin and recycled, with sales primarily to other yarn manufacturers and knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive upholstery, home furnishings, industrial and other end-use markets. The Polyester Segment consists of sales and manufacturing operations in the U.S. and El Salvador.

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The Nylon Segment manufactures textured nylon yarns and spandex covered yarns, with sales to knitters and weavers that produce fabric primarily for the apparel and hosiery markets. The Nylon Segment consists of sales and manufacturing operations in the U.S. and Colombia.

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The International Segment’s products primarily include textured polyester and various types of resale yarns and staple fiber, both virgin and recycled. The International Segment sells its yarns and staple fiber to knitters and weavers that produce fabric for the apparel, automotive upholstery, home furnishings, industrial and other end-use markets primarily in the South American and Asian regions. The International Segment includes a manufacturing location and sales offices in Brazil and a sales office in China.

In addition to its reportable segments, the Company’s selected financial information includes an All Other category. All Other consists primarily of Renewables (an operating segment that does not meet quantitative thresholds for reporting), for-hire transportation services and consulting services. Revenue for Renewables is primarily derived from (i) facilitating the use of miscanthus grass as bio-fuel through service agreements and (ii) delivering harvested miscanthus grass to poultry producers for animal bedding. For-hire transportation services revenues are derived from performing common carrier services utilizing the Company’s fleet of transportation equipment. Revenues for consulting services are derived from providing process improvement and change management consulting services to entities across various industries.

The operations within All Other (i) are not subject to review by the chief operating decision maker at a level consistent with the Company’s other operations, (ii) are not regularly evaluated using the same metrics applied to the Company’s other operations and (iii) do not qualify for aggregation with an existing reportable segment. Therefore, such operations are excluded from reportable segments. Any comparative amounts relating to the All Other category in fiscal 2014 are insignificant.

The Company evaluates the operating performance of its segments based upon Segment Profit, which represents segment gross profit plus segment depreciation expense. This measurement of segment profit or loss best aligns segment reporting with the current assessments and evaluations performed by, and information provided to, the chief operating decision maker.

In fiscal 2015 and 2014, the Company evaluated the operating performance of its segments based upon a different metric, referred to as Segment Adjusted Profit, which was defined as segment gross profit, plus segment depreciation and amortization, less segment SG&A expenses, plus segment other adjustments. SG&A expenses and other adjustments are no longer significant to the segment evaluations performed by the chief operating decision maker. The Company is providing current and comparative selected financial information below under the current method of evaluating segment profitability.

The accounting policies for the segments are consistent with the Company’s accounting policies. Intersegment sales are omitted from the below financial information, as they are (i) insignificant to the Company’s segments and consolidated operations and (ii) excluded from segment evaluations performed by the chief operating decision maker.

As of the fourth quarter of fiscal 2016, the Company updated the composition of its Polyester and Nylon Segments for both the current and comparative prior periods, intending to better reflect downstream sales for the respective product lines.

Selected financial information is presented below:

	For the Fiscal Year Ended June 26, 2016
	Polyester		Nylon		International		All Other			Total
Net sales	$	383,167	$	131,715	$	122,554	$	6,201		$	643,637
Cost of sales		333,638		113,906		95,666		6,795			550,005
Gross profit (loss)		49,529		17,809		26,888		(594	)		93,632
Depreciation expense		11,188		1,899		885		820			14,792
Segment Profit	$	60,717	$	19,708	$	27,773	$	226		$	108,424

	For the Fiscal Year Ended June 28, 2015
	Polyester		Nylon		International		All Other			Total
Net sales	$	396,239	$	149,612	$	134,992	$	6,278		$	687,121
Cost of sales		345,462		130,644		113,556		6,754			596,416
Gross profit (loss)		50,777		18,968		21,436		(476	)		90,705
Depreciation expense		10,579		1,798		1,997		473			14,847
Segment Profit (Loss)	$	61,356	$	20,766	$	23,433	$	(3	)	$	105,552

	For the Fiscal Year Ended June 29, 2014
	Polyester		Nylon		International		Total
Net sales	$	403,699	$	149,297	$	134,906	$	687,902
Cost of sales		356,076		129,966		118,598		604,640
Gross profit		47,623		19,331		16,308		83,262
Depreciation expense		9,247		2,022		3,032		14,301
Segment Profit	$	56,870	$	21,353	$	19,340	$	97,563

The reconciliations of segment gross profit (loss) to consolidated income before income taxes are as follows:

	For the Fiscal Year Ended
	June 26, 2016			June 28, 2015			June 29, 2014
Polyester	$	49,529		$	50,777		$	47,623
Nylon		17,809			18,968			19,331
International		26,888			21,436			16,308
All Other		(594	)		(476	)		—
Total segment gross profit		93,632			90,705			83,262
SG&A expenses		47,502			49,672			46,203
Provision for bad debts		1,684			947			287
Other operating expense, net		2,248			1,600			5,289
Operating income		42,198			38,486			31,483
Interest income		(610	)		(916	)		(1,790	)
Interest expense		3,528			4,025			4,329
Loss on extinguishment of debt		—			1,040			—
Other non-operating expense		—			—			126
Equity in earnings of unconsolidated affiliates		(8,963	)		(19,475	)		(19,063	)
Income before income taxes	$	48,243		$	53,812		$	47,881

The reconciliations of segment depreciation and amortization expense to consolidated depreciation and amortization expense are as follows:

	For the Fiscal Year Ended
	June 26, 2016		June 28, 2015		June 29, 2014
Polyester	$	11,188	$	10,579	$	9,247
Nylon		1,899		1,798		2,022
International		885		1,997		3,032
Segment depreciation expense		13,972		14,374		14,301
All Other		820		473		—
Other depreciation and amortization expense		2,736		3,196		3,595
Depreciation and amortization expense	$	17,528	$	18,043	$	17,896

The reconciliations of segment capital expenditures to consolidated capital expenditures are as follows:

	For the Fiscal Year Ended
	June 26, 2016		June 28, 2015		June 29, 2014
Polyester	$	44,517	$	21,267	$	14,701
Nylon		2,548		2,392		2,284
International		2,755		1,468		1,637
Segment capital expenditures		49,820		25,127		18,622
Other capital expenditures		2,517		839		469
Capital expenditures	$	52,337	$	25,966	$	19,091

The reconciliations of segment total assets to consolidated total assets are as follows:

	June 26, 2016		June 28, 2015		June 29, 2014
Polyester	$	243,295	$	208,416	$	197,242
Nylon		63,141		66,490		70,852
International		73,650		63,031		81,604
Segment total assets		380,086		337,937		349,698
Other current assets		6,674		4,687		2,164
Other PP&E		16,597		13,544		12,250
Other non-current assets		6,094		6,303		5,341
Investments in unconsolidated affiliates		117,412		113,901		99,229
Total assets	$	526,863	$	476,372	$	468,682

Geographic Data:

Geographic information is set forth below, beginning with net sales. Brazil is reported separately from other foreign countries because its net sales exceeds 10% of consolidated net sales in fiscal 2016, 2015 and 2014, while its total assets exceeds 10% of consolidated total assets for fiscal 2015 and 2014.

	For the Fiscal Year Ended
	June 26, 2016		June 28, 2015		June 29, 2014
U.S.	$	472,287	$	509,490	$	512,496
Brazil		83,087		101,912		113,448
Remaining Foreign		88,263		75,719		61,958
Total	$	643,637	$	687,121	$	687,902

Export sales from the Company’s U.S. operations to external customers	$	113,725	$	119,548	$	100,546

The information for net sales is based on the operating locations from where the items were produced or distributed.

Geographic information for long-lived assets is as follows:

	June 26, 2016		June 28, 2015		June 29, 2014
U.S.	$	294,275	$	242,042	$	215,910
Brazil		9,714		8,207		12,188
Remaining Foreign		8,595		9,237		7,413
Total	$	312,584	$	259,486	$	235,511

Long-lived assets are comprised of property, plant and equipment, net; intangible assets, net; investments in unconsolidated affiliates; and other non-current assets.

Geographic information for total assets is as follows:

	June 26, 2016		June 28, 2015		June 29, 2014
U.S.	$	429,100	$	388,766	$	362,125
Brazil		53,993		50,300		70,581
Remaining Foreign		43,770		37,306		35,976
Total	$	526,863	$	476,372	$	468,682