17. SEGMENT INFORMATION The Company has three operating and reportable segments, (i) Monster Energy Drinks segment, which is primarily comprised of the Companys Monster Energy drinks, (ii) Strategic Brands segment, which is comprised of the various energy drink brands acquired from TCCC in 2015, and (iii) Other segment, which is comprised of certain products sold by American Fruits &amp; Flavors LLC, a wholly-owned subsidiary of the Company, to independent third-party customers. The Companys Monster Energy Drinks segment primarily generates net operating revenues by selling ready-to-drink packaged drinks primarily to bottlers and full service beverage distributors. In some cases, the Company sells directly to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers and the military. The Companys Strategic Brands segment primarily generates net operating revenues by selling concentrates and/or beverage bases to authorized bottling and canning operations. Such bottlers generally combine the concentrates and/or beverage bases with sweeteners, water and other ingredients to produce ready-to-drink packaged energy drinks. The ready-to-drink packaged energy drinks are then sold to other bottlers, full service distributors or retailers, including, retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, drug stores and the military. To a lesser extent, the Companys Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to bottlers and full service beverage distributors. Generally, the Monster Energy Drinks segment generates higher per case net operating revenues, but lower per case gross profit margin percentages than the Strategic Brands segment. Corporate and unallocated amounts that do not relate to a reportable segment have been allocated to Corporate &amp; Unallocated. No asset information, other than goodwill and other intangible assets, has been provided in the Companys reportable segments, as management does not measure or allocate such assets on a segment basis. The net revenues derived from the Companys reportable segments and other financial information related thereto for the three- and nine-months ended September 30, 2018 and 2017 are as follows: Three-Months Ended Nine-Months Ended September 30, September 30, 2018 2017 2018 2017 Net sales: Monster Energy Drinks (1) $ 935,146 $ 827,690 $ 2,645,089 $ 2,311,521 Strategic Brands 74,441 76,586 220,011 230,255 Other 6,573 5,200 17,853 16,914 Corporate and unallocated - - - - $ 1,016,160 $ 909,476 $ 2,882,953 $ 2,558,690 Three-Months Ended Nine-Months Ended September 30, September 30, 2018 2017 2018 2017 Operating Income: Monster Energy Drinks (1) (2) $ 359,090 $ 333,210 $ 1,033,895 $ 968,864 Strategic Brands 41,661 42,663 135,054 137,945 Other 1,742 1,451 4,539 4,585 Corporate and unallocated (62,920) (59,952) (196,380) (179,719) $ 339,573 $ 317,372 $ 977,108 $ 931,675 Three-Months Ended Nine-Months Ended September 30, September 30, 2018 2017 2018 2017 Income before tax: Monster Energy Drinks (1) (2) $ 359,216 $ 333,065 $ 1,034,521 $ 968,716 Strategic Brands 41,659 42,663 135,075 137,931 Other 1,742 1,451 4,539 4,585 Corporate and unallocated (60,056) (55,811) (191,758) (177,454) $ 342,561 $ 321,368 $ 982,377 $ 933,778 (1) Includes $11.1 million and $11.4 million for the three-months ended September 30, 2018 and 2017, respectively, related to the recognition of deferred revenue. Includes $33.3 million and $31.6 million for the nine-months ended September 30, 2018 and 2017, respectively, related to the recognition of deferred revenue. (2) Includes $14.1 million and $15.9 million for the three-months ended September 30, 2018 and 2017, respectively, related to distributor termination costs. Includes $26.6 million and $35.9 million for the nine-months ended September 30, 2018 and 2017, respectively, related to distributor termination costs. Three-Months Ended Nine-Months Ended September 30, September 30, 2018 2017 2018 2017 Depreciation and amortization: Monster Energy Drinks $ 9,157 $ 7,546 $ 26,926 $ 20,959 Strategic Brands 1,947 1,836 5,819 5,474 Other 1,167 1,152 3,493 3,458 Corporate and unallocated 2,014 1,795 6,231 5,213 $ 14,285 $ 12,329 $ 42,469 $ 35,104 Corporate and unallocated expenses for the three-months ended September 30, 2018 include $42.1 million of payroll costs, of which $14.0 million was attributable to stock-based compensation expenses (see Note 14, Stock-Based Compensation), as well as $12.3 million attributable to professional service expenses, including accounting and legal costs, and $8.5 million of other operating expenses. Corporate and unallocated expenses for the three-months ended September 30, 2017 include $37.9 million of payroll costs, of which $13.3 million was attributable to stock-based compensation expenses (see Note 14, Stock-Based Compensation), as well as $11.9 million attributable to professional service expenses, including accounting and legal costs, and $10.1 million of other operating expenses. Corporate and unallocated expenses for the nine-months ended September 30, 2018 include $129.9 million of payroll costs, of which $42.4 million was attributable to stock-based compensation expenses (see Note 14, Stock-Based Compensation), as well as $36.5 million attributable to professional service expenses, including accounting and legal costs, and $30.0 million of other operating expenses. Corporate and unallocated expenses for the nine-months ended September 30, 2017 include $114.0 million of payroll costs, of which $39.3 million was attributable to stock-based compensation expenses (see Note 14, Stock-Based Compensation), as well as $38.3 million attributable to professional service expenses, including accounting and legal costs, and $27.5 million of other operating expenses. TCCC, through the TCCC Subsidiaries, accounted for approximately 4% and 14% of the Companys net sales for the three-months ended September 30, 2018 and 2017, respectively. TCCC, through the TCCC Subsidiaries, accounted for approximately 4% and 21% of the Companys net sales for the nine-months ended September 30, 2018 and 2017, respectively. As part of TCCCs North America Refranchising initiative (the North America Refranchising), the territories of certain TCCC Subsidiaries have been transitioned to certain independent TCCC bottlers/distributors and/or TCCC Related Parties. Accordingly, the Companys percentage of net sales classified as sales to the TCCC Subsidiaries significantly decreased for three- and nine-months ended September 30, 2018. CCBCC Operations, LLC accounted for approximately 14% of the Companys net sales for both the three-months ended September 30, 2018 and 2017. CCBCC Operations, LLC accounted for approximately 14% and 13% of the Companys net sales for the nine-months ended September 30, 2018 and 2017, respectively. Reyes Coca-Cola Bottling accounted for approximately 13% and 5% of the Companys net sales for the three-months ended September 30, 2018 and 2017, respectively. Reyes Coca-Cola Bottling accounted for approximately 13% and 5% of the Companys net sales for the nine-months ended September 30, 2018 and 2017, respectively. Coca-Cola European Partners accounted for approximately 9% and 10% of the Companys net sales for the three-months ended September 30, 2018 and 2017, respectively. Coca-Cola European Partners accounted for approximately 9% of the Companys net sales for both the nine-months ended September 30, 2018 and 2017. Net sales to customers outside the United States amounted to $283.0 million and $260.1 million for the three-months ended September 30, 2018 and 2017, respectively. Net sales to customers outside the United States amounted to $818.8 million and $698.9 million for the nine-months ended September 30, 2018 and 2017, respectively. Goodwill and other intangible assets for the Companys reportable segments as of September 30, 2018 and December 31, 2017 are as follows: September 30, December 31, 2018 2017 Goodwill and other intangible assets: Monster Energy Drinks $ 1,362,448 $ 1,346,648 Strategic Brands 991,352 995,582 Other 20,091 23,498 Corporate and unallocated - - $ 2,373,891 $ 2,365,728