SEGMENT INFORMATION

In the first quarter of fiscal 2019, the Company performed a review of its management reporting structure and implemented changes to align with how the Company measures performance. As a result, the Company has revised its reportable segments to reflect how management currently reviews financial information and makes operating decisions. Certain supplier support benefits are now included within the Service Center Based Distribution segment operating income. Previously, these benefits were included in Corporate and other expense, net. All prior-period amounts have been adjusted to reflect the reportable segment change.

The accounting policies of the Company’s reportable segments are generally the same as those used to prepare the condensed consolidated financial statements. LIFO expense of $3,650 and $7,997 is recorded in cost of sales in the condensed statements of income for the three and nine months ended March 31, 2019, respectively, and is included in operating income for the Service Center Based Distribution segment. The corresponding amounts for the prior year periods were not material to the Company's condensed consolidated financial statements. The Company allocates LIFO expense between the segments in the fourth quarter of its fiscal year. Intercompany sales, primarily from the Fluid Power & Flow Control segment to the Service Center Based Distribution segment, of $7,328 and $6,706, in the three months ended March 31, 2019 and 2018, respectively, and $21,013 and $18,461 in the nine months ended March 31, 2019 and 2018, respectively, have been eliminated in the Segment Financial Information tables below.



Three Months Ended	Service Center Based Distribution		Fluid Power & Flow Control		Total
March 31, 2019
Net sales	$	630,438	$	255,005	$	885,443
Operating income for reportable segments	64,763		25,837		90,600
Depreciation and amortization of property	3,969		1,057		5,026
Capital expenditures	4,024		591		4,615

March 31, 2018
Net sales	$	601,214	$	226,451	$	827,665
Operating income for reportable segments	61,076		26,514		87,590
Depreciation and amortization of property	3,885		828		4,713
Capital expenditures	4,385		2,054		6,439



Nine Months Ended	Service Center Based Distribution		Fluid Power & Flow Control		Total
March 31, 2019
Net sales	$	1,823,785	$	766,211	$	2,589,996
Operating income for reportable segments	185,889		85,960		271,849
Assets used in business	1,252,161		1,070,649		2,322,810
Depreciation and amortization of property	11,791		3,254		15,045
Capital expenditures	9,724		1,987		11,711

March 31, 2018
Net sales	$	1,725,734	$	449,819	$	2,175,553
Operating income for reportable segments	172,965		53,482		226,447
Assets used in business	1,202,593		1,069,730		2,272,323
Depreciation and amortization of property	11,356		1,365		12,721
Capital expenditures	14,754		3,144		17,898

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



	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Operating income for reportable segments	$	90,600		$	87,590		$	271,849		$	226,447
Adjustment for:
Intangible amortization—Service Center Based Distribution	2,794			4,311			10,785			13,248
Intangible amortization—Fluid Power & Flow Control	7,117			5,489			21,038			8,078
Intangible Impairment—Service Center Based Distribution	31,594			—			31,594			—
Corporate and other expense, net	14,586			21,346			46,619			50,125
Total operating income	34,509			56,444			161,813			154,996
Interest expense, net	9,947			8,216			30,001			12,521
Other income, net	(1,256		)	(1,291		)	(549		)	(2,022		)
Income before income taxes	$	25,818		$	49,519		$	132,361		$	144,497

The change in corporate and other expense, net is due to changes in corporate expenses, as well as in the amounts and levels of certain expenses being allocated to the segments. The expenses being allocated include corporate charges for working capital, logistics support and other items.