SEGMENT AND GEOGRAPHIC REGION INFORMATION

The Company manages business through its reporting segments: Office, Studio, and Coverings. All unallocated expenses are included within Corporate.

The Office segment includes a complete range of workplace products that address diverse workplace planning paradigms. These products include: systems furniture, seating, storage, tables, desks and KnollExtra® accessories as well as the international sales of North American Office products.

The Studio segment includes KnollStudio®, HOLLY HUNT®, Knoll Europe and DatesWeiser. KnollStudio products, include iconic seating, lounge furniture, side, cafe and dining chairs as well as conference, training and dining and occasional tables. HOLLY HUNT® is known for high quality residential furniture, lighting, rugs, textiles and leathers. HOLLY HUNT® includes the Vladimir Kagan Design Group, a renowned collection of modern luxury furnishings. Knoll Europe, which markets and sells both KnollStudio and Knoll Office products, manufactures and sells products to customers primarily in Europe. DatesWeiser, known for its sophisticated meeting and conference tables and credenzas, sets a standard for design, quality and technology integration.

The Coverings segment includes KnollTextiles®, Spinneybeck® (including Filzfelt®), and Edelman® Leather. These businesses provide a wide range of customers with high-quality fabrics, felt, leather and related architectural products.

Corporate costs represent the accumulation of unallocated costs relating to shared services and general corporate activities including, but not limited to, legal expenses, acquisition expenses, certain finance, human resources, administrative and executive expenses and other expenses that are not directly attributable to an operating segment. Dedicated, direct selling, general and administrative expenses of the segments are included within segment operating profit. Management regularly reviews the costs included in the Corporate function, and believes disclosing such information provides more visibility and transparency of how the chief operating decision maker reviews the results for the Company.

The tables below present the Company’s segment information (in thousands):



	2017			2016			2015
SALES
Office	$	682,936		$	731,327		$	686,943
Studio	340,995			323,431			303,838
Coverings	108,961			109,534			113,661
Corporate	—			—			—
Knoll, Inc.	$	1,132,892		$	1,164,292		$	1,104,442
INTERSEGMENT SALES ⁽¹⁾
Office	$	1,331		$	1,877		$	1,640
Studio	5,572			5,788			6,184
Coverings	5,369			8,350			8,358
Corporate	—			—			—
Knoll, Inc.	$	12,272		$	16,015		$	16,182
DEPRECIATION AND AMORTIZATION
Office	$	19,177		$	16,284		$	14,945
Studio	6,776			5,936			5,565
Coverings	750			805			769
Corporate	—			—			—
Knoll, Inc.	$	26,703		$	23,025		$	21,279
OPERATING PROFIT
Office⁽²⁾	$	25,894		$	73,871		$	55,823
Studio	51,136			53,413			47,952
Coverings	24,623			25,953			17,273
Corporate	(13,684		)	(16,929		)	(19,938		)
Knoll, Inc.⁽³⁾	$	87,969		$	136,308		$	101,110
CAPITAL EXPENDITURES
Office	$	32,413		$	35,072		$	27,058
Studio	7,061			6,819			4,241
Coverings	203			804			648
Corporate	—			—			—
Knoll, Inc.	$	39,677		$	42,695		$	31,947

_______________________________________________________________________________

(1) Intersegment sales are presented on a cost-plus basis which takes into consideration the effect of transfer prices between legal entities.

(2) Knoll recorded a $16.3 million write-off of property, plant, and equipment, a $2.2 million pension settlement charge and a $2.2 million restructuring charge within the Office segment during 2017.

(3) The Company does not allocate interest expense or other (income) expense, net to the reportable segments.

Many of the Company's facilities manufacture products for all three reporting segments. Therefore, it is impractical to disclose asset information on a segment basis.

The Company's net sales by product category were as follows (in thousands):



	Year Ended December 31,
	2017		2016		2015
Office Systems	$	390,396	$	461,743	$	432,655
Seating	109,051		114,135		117,799
Files and Storage	90,328		85,696		86,099
Studio	340,995		323,431		303,838
Coverings	108,961		109,534		113,661
Other	93,161		69,753		50,390
Total	$	1,132,892	$	1,164,292	$	1,104,442

The Company markets its products in the United States and internationally, with its principal international markets being Canada and Europe. The table below contains information about the geographical areas in which the Company operates. Sales are attributed to the geographic areas based on the origin of sale, and property, plant, and equipment, net is based on the geographic area in which the asset resides (in thousands):



	United States		Canada		Europe		Mexico		Consolidated
2017
Sales	$	977,669	$	52,894	$	100,233	$	2,096	$	1,132,892
Property, plant, and equipment, net	157,805		29,307		13,518		—		200,630
2016
Sales	$	1,031,920	$	36,813	$	93,420	$	2,139	$	1,164,292
Property, plant, and equipment, net	157,856		26,452		12,776		—		197,084
2015
Sales	$	979,221	$	36,163	$	89,058	$	—	$	1,104,442
Property, plant, and equipment, net	137,863		20,919		13,360		—		172,142