OPERATING SEGMENTS

Operating segments are defined as components of an enterprise that engage in business activities and by which discrete financial information is available and is evaluated on a regular basis by the chief operating decision maker to make decisions regarding the allocation of resources to the segment and assess the performance of the segment. On February 22, 2018, the Company announced changes to NCI’s reportable business segments, effective January 28, 2018, starting with the first quarter of fiscal 2018, to align with changes in how the Company manages its business, reviews operating performance and allocates resources. We have revised our segment reporting to represent how we now manage our business, recasting prior periods to conform to the current segment presentation.

We have four operating segments: Engineered Building Systems; Metal Components; Insulated Metal Panels; and Metal Coil Coating. All operating segments operate primarily in the nonresidential construction market. Sales and earnings are influenced by general economic conditions, the level of nonresidential construction activity, metal roof repair and retrofit demand and the availability and terms of financing available for construction. Products of our operating segments use similar basic raw materials enabling us to leverage our supply chain. The Metal Coil Coating segment consists of cleaning, treating, painting and slitting continuous steel coils before the steel is fabricated for use by construction and industrial users. The Metal Components segment products include metal roof and wall panels, doors, metal partitions, metal trim, and other related accessories. The Insulated Metal Panels segment produces panels consisting of rigid foam encased between two sheets of coated metal in a variety of modules, lengths and reveal combinations which are used in architectural, commercial, industrial and cold storage market applications. The Engineered Building Systems segment manufactures custom designed and engineered products such as structural frames, Long Bay® Systems, metal roofing and wall systems, and the related value-added engineering and drafting, to provide customers a complete building envelope solution. The operating segments follow the same accounting policies used for our consolidated financial statements.

We evaluate a segment’s performance based primarily upon operating income before corporate expenses. Intersegment sales are recorded based on standard material costs plus a standard markup to cover labor and overhead and consist of (i) structural framing provided by the Engineered Building Systems segment to the Metal Components segment; (ii) building components provided by the Metal Components and Insulated Metal Panels segments to the Engineered Building Systems segment; and (iii) hot-rolled, light gauge painted and slit material and other services provided by the Metal Coil Coating segment to the Engineered Building Systems, Metal Components and Insulated Metal Panels segments.

Corporate assets consist primarily of cash, investments, prepaid expenses, current and deferred taxes, and property, plant and equipment associated with our headquarters in Houston, Texas. These items (and income and expenses related to these items) are not allocated to the operating segments. Corporate unallocated expenses include share-based compensation expenses, and executive, legal, finance, tax, treasury, human resources, information technology, strategic sourcing, marketing and corporate travel expenses. Additional unallocated amounts primarily include interest income, interest expense, loss on extinguishment of debt and other (expense) income.

The following table represents summary financial data attributable to these operating segments for the periods indicated (in thousands):



	Fiscal Year Ended
	October 28, 2018			October 29, 2017			October 30, 2016
Total sales:
Engineered Building Systems	$	798,299		$	693,980		$	672,235
Metal Components	689,344			636,661			586,690
Insulated Metal Panels	504,413			441,404			396,327
Metal Coil Coating	417,296			368,880			346,348
Intersegment sales	(408,775		)	(370,647		)	(316,672		)
Total net sales	$	2,000,577		$	1,770,278		$	1,684,928
External sales:
Engineered Building Systems	$	755,353		$	659,863		$	652,471
Metal Components	612,645			544,669			495,020
Insulated Metal Panels	424,762			372,304			347,771
Metal Coil Coating	207,817			193,442			189,666
Total net sales	$	2,000,577		$	1,770,278		$	1,684,928
Operating income (loss):
Engineered Building Systems	$	66,689		$	41,388		$	62,046
Metal Components	87,593			78,768			70,742
Insulated Metal Panels	47,495			47,932			24,620
Metal Coil Coating	28,588			21,459			32,422
Corporate	(104,445		)	(79,767		)	(81,051		)
Total operating income	$	125,920		$	109,780		$	108,779
Unallocated other expense	(42,825		)	(26,642		)	(29,815		)
Income before income taxes	$	83,095		$	83,138		$	78,964
Depreciation and amortization:
Engineered Building Systems	$	8,627		$	9,014		$	9,767
Metal Components	5,817			5,324			4,944
Insulated Metal Panels	17,604			17,907			17,862
Metal Coil Coating	8,488			8,243			8,284
Corporate	1,789			830			1,067
Total depreciation and amortization expense	$	42,325		$	41,318		$	41,924



	Fiscal Year Ended
	October 28, 2018		October 29, 2017		October 30, 2016
Capital expenditures:
Engineered Building Systems	$	12,433	$	5,533	$	7,571
Metal Components	9,507		5,708		3,245
Insulated Metal Panels	5,975		5,731		4,744
Metal Coil Coating	9,028		3,376		2,949
Corporate	10,884		1,726		2,515
Total capital expenditures	$	47,827	$	22,074	$	21,024
Property, plant and equipment, net:
Engineered Building Systems	$	53,907	$	46,620	$	50,862
Metal Components	52,119		49,016		49,654
Insulated Metal Panels	57,415		70,853		76,899
Metal Coil Coating	53,819		50,855		54,407
Corporate	18,980		9,651		10,390
Total property, plant and equipment, net	$	236,240	$	226,995	$	242,212
Total assets:
Engineered Building Systems	$	225,304	$	195,426	$	194,190
Metal Components	226,083		186,369		172,048
Insulated Metal Panels	376,488		380,308		388,183
Metal Coil Coating	196,558		175,046		181,497
Corporate	85,942		93,963		89,478
	$	1,110,375	$	1,031,112	$	1,025,396

The following table represents summary financial data attributable to various geographic regions for the periods indicated (in thousands):



	Fiscal Year Ended
	October 28, 2018		October 29, 2017		October 30, 2016
Total sales:
United States of America	$	1,874,129	$	1,666,645	$	1,589,479
Canada	99,306		73,090		61,781
China	4		8,923		6,733
Mexico	2,460		4,910		4,060
All other	24,678		16,710		22,875
Total net sales	$	2,000,577	$	1,770,278	$	1,684,928
Long-lived assets:
United States of America	$	494,425	$	493,203	$	523,134
Canada	7,041		8,180		9,247
China	—		448		170
Mexico	10,594		10,603		10,701
Total long-lived assets	$	512,060	$	512,434	$	543,252

Sales are determined based on customers’ requested shipment location.