The Company operates in two reportable segments:

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Trex Residential manufactures wood-alternative decking and residential railing and related products marketed under the brand name Trex

. Trex Residential products are sold to distributors and home centers for final resale primarily to the residential market, which includes replacement, remodeling and new construction related to outdoor living products.

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Trex Commercial designs, engineers, and markets modular and architectural railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. Trex Commercial products are marketed to architects, specifiers, contractors, and others doing business within the commercial and multi-family market.

The Company’s reportable segments have been determined in accordance with its internal management structure, which is organized based on residential and commercial sales activities. The Company evaluates performance of each segment primarily based on net sales and earnings before interest, taxes, depreciation and amortization (EBITDA). The Company uses net sales to assess performance and allocate resources as this measure represents the amount of business the segment engaged in during a given period of time, is an indicator of market growth and acceptance of segment products, and represents the segment’s customers’ spending habits along with the amount of product the segment sells relative to its competitors. The Company uses EBITDA to assess performance and allocate resources because it believes that EBITDA facilitates performance comparison between the segments by eliminating interest, taxes, and depreciation and amortization charges to income. The below segment data for the three months ended March 31, 2020 and 2019 includes data for Trex Residential and Trex Commercial (in thousands):

Segment Data:


	Three Months Ended March 31, 2020						Three Months Ended March 31, 2019
	Trex Residential		Trex Commercial		Total		Trex Residential		Trex Commercial		Total
Net sales	$	186,874	$	13,521	$	200,395	$	165,479	$	14,092	$	179,571
Net income	$	41,020	$	1,382	$	42,402	$	31,255	$	300	$	31,555
EBITDA	$	56,950	$	2,036	$	58,986	$	42,067	$	526	$	42,593
Depreciation and amortization	$	3,664	$	187	$	3,851	$	3,268	$	126	$	3,394
Income tax expense	$	12,788	$	467	$	13,255	$	7,600	$	100	$	7,700
Capital expenditures	$	22,416	$	317	$	22,733	$	7,694	$	953	$	8,647
Total assets	$	539,352	$	91,504	$	630,856	$	448,303	$	87,342	$	535,645

Reconciliation of Net Income to EBITDA:


	Three Months Ended March 31, 2020								Three Months Ended March 31, 2019
	Trex Residential			Trex Commercial		Total			Trex Residential			Trex Commercial		Total
Net income	$	41,020		$	1,382	$	42,402		$	31,255		$	300	$	31,555
Interest income, net		(522	)		—		(522	)		(56	)		—		(56	)
Income tax expense		12,788			467		13,255			7,600			100		7,700
Depreciation and amortization		3,664			187		3,851			3,268			126		3,394

EBITDA	$	56,950		$	2,036	$	58,986		$	42,067		$	526	$	42,593