NOTE 17—SEGMENT INFORMATION

Our operating segments reflect the manner in which our business is managed, resources are allocated, and internal performance is assessed. Our chief operating decision maker is the Chief Executive Officer.

We offer a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel and other items and services. Our business is classified into two reportable segments: Wholesale and Retail. These reportable segments are two distinct businesses, each with a different customer base, marketing strategy and management structure. Reportable segments are reviewed on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

The Wholesale reportable segment derives revenues from wholesale distribution and services to retail food stores and other customers (collectively referred to as “Wholesale customers”). The Retail reportable segment derives revenues from the sale of groceries and other products at retail locations operated by us. Substantially all of our operations are domestic.

We offer a wide variety of nationally advertised brand name and private-label products, primarily including grocery (both perishable and nonperishable), general merchandise and health and beauty care, pharmacy and fuel, which are sold through our Wholesale segment to Wholesale customers and through our Retail segment in owned and franchised retail stores to shoppers. The following table provides additional detail on the amounts and percentages of Net sales for each group of similar products sold in our Wholesale and Retail segments, and service agreement revenue in Corporate:



	2018				2017				2016
Wholesale:
Nonperishable grocery products⁽¹⁾	$	7,634	54	%	$	5,579	52	%	$	5,753	51	%
Perishable grocery products⁽²⁾	3,241		23		1,969		18		2,025		18
Services to Wholesale customers and other	179		1		157		1		157		1
	11,054		78	%	7,705		71	%	7,935		70	%
Retail:
Nonperishable grocery products⁽¹⁾	$	1,612	12	%	$	1,663	15	%	$	1,731	15	%
Perishable grocery products⁽²⁾	1,002		7		1,026		9		1,072		10
Pharmacy products	302		2		312		3		316		3
Other	27		—		27		—		26		—
	2,943		21	%	3,028		27	%	3,145		28	%
Corporate:
Services agreement revenue	$	160	1	%	$	179	2	%	$	203	2	%
Net sales	$	14,157	100	%	$	10,912	100	%	$	11,283	100	%


(1)	Includes such items as dry goods, dairy, frozen foods, beverages, general merchandise, home, health and beauty care and candy


(2)	Includes such items as meat, produce, deli and bakery

Segment operating earnings include revenues and costs attributable to each of the respective business segments and allocated corporate overhead, based on the segment’s estimated consumption of corporately managed resources. Variances to planned corporate overhead allocated to business segments remain in Corporate because allocated corporate overhead affecting segment operating profit is centrally managed. Reported segment information is presented on the same basis as it is reviewed by executive management.

The presentation of identifiable assets by reportable segment includes allocations from Wholesale to Retail of shared assets based on estimated usage. The presentation of capital expenditures by reportable segment includes allocations of corporate expenditures for information technology and other investments from Corporate to Wholesale and Retail based on estimated usage.

Summary operating results by reportable segment consisted of the following:



	2018
	Wholesale		Retail			Corporate			Total
Net sales	$	11,054	$	2,943		$	160		$	14,157
Cost of sales	10,591		2,115			—			12,706
Gross profit	463		828			160			1,451
Selling and administrative expenses	237		841			180			1,258
Operating earnings (loss)	$	226	$	(13	)	$	(20	)	$	193
Interest expense, net									132
Equity in earnings of unconsolidated affiliates									(16		)
Earnings from continuing operations before income taxes									$	77
Depreciation and amortization	$	84	$	100		$	13		$	197
Capital expenditures	$	207	$	70		$	—		$	277
Identifiable assets	$	3,343	$	823		$	7		$	4,173



	2017
	Wholesale		Retail			Corporate			Total
Net sales	$	7,705	$	3,028		$	179		$	10,912
Cost of sales	7,350		2,167			—			9,517
Gross profit	355		861			179			1,395
Selling and administrative expenses	130		851			206			1,187
Goodwill impairment charge	—		13			—			13
Operating earnings (loss)	$	225	$	(3	)	$	(27	)	$	195
Interest expense, net									180
Equity in earnings of unconsolidated affiliates									(5		)
Earnings from continuing operations before income taxes									$	20
Depreciation and amortization	$	54	$	108		$	11		$	173
Capital expenditures	$	85	$	83		$	—		$	168
Identifiable assets	$	2,182	$	829		$	297		$	3,308



	2016
	Wholesale		Retail		Corporate			Total
Net sales	$	7,935	$	3,145	$	203		$	11,283
Cost of sales	7,564		2,248		—			9,812
Gross profit	371		897		203			1,471
Selling and administrative expenses	147		831		246			1,224
Intangible asset impairment charge	6		—		—			6
Operating earnings (loss)	$	218	$	66	$	(43	)	$	241
Interest expense, net								193
Equity in earnings of unconsolidated affiliates								(5		)
Earnings from continuing operations before income taxes								$	53
Depreciation and amortization	$	49	$	114	$	12		$	175
Capital expenditures	$	88	$	74	$	—		$	162
Identifiable assets	$	2,203	$	874	$	9		$	3,086