SEGMENT INFORMATION

The Company manages its business through its reportable segments: Office and Lifestyle.

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

The Lifestyle segment includes KnollStudio®, HOLLY HUNT®, DatesWeiser, Muuto, KnollTextiles®, Spinneybeck® (including Filzfelt®), and Edelman® Leather. KnollStudio products, which are distributed in North America and Europe, 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. In addition, HOLLY HUNT® also includes Vladimir Kagan Design Group, a renowned collection of modern luxury furnishings. DatesWeiser, known for its sophisticated meeting and conference tables and credenzas, sets a standard for design, quality and technology integration. The KnollTextiles®, Spinneybeck® (including Filzfelt®), and Edelman® Leather businesses provide a wide range of customers with high-quality fabrics, felt, leather and related architectural products. The acquisition of Muuto rounds out the Lifestyle segment with its ancillary products and affordable luxury furnishings to make the Lifestyle segment an all encompassing “resimercial”, high performance workplace, from uber-luxury living spaces to affordable luxury residential living.

In 2018, the Company revised its segment presentation by aggregating the former Studio and Coverings segments with Muuto to create the Lifestyle segment. Additionally, the Office segment now includes the office business in Europe which was historically reported in Studio. The Company believes this revised presentation better aligns the segments with how management views and operates the Company. As a result of this change in segment reporting, the Company retrospectively revised prior period results, by segment, to conform to current period presentation.

Corporate costs include unallocated costs relating to shared services and general corporate activities such as 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 with Corporate costs excluded from reporting segment results. Prior year amounts have been recast to conform to the current presentation (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
SALES
Office	$	190,747		$	162,599		$	372,365		$	320,597
Lifestyle	132,604			106,095			247,545			204,917
Knoll, Inc.	$	323,351		$	268,694		$	619,910		$	525,514
INTERSEGMENT SALES ⁽¹⁾
Office	$	497		$	450		$	1,009		$	724
Lifestyle	3,050			2,142			5,404			5,191
Knoll, Inc.	$	3,547		$	2,592		$	6,413		$	5,915
OPERATING PROFIT
Office ⁽²⁾	$	10,316		$	4,812		$	19,182		$	13,639
Lifestyle	20,965			20,584			41,141			38,996
Corporate ⁽³⁾	(6,469		)	(5,564		)	(13,051		)	(12,167		)
Knoll, Inc.⁽⁴⁾	$	24,812		$	19,832		$	47,272		$	40,468

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(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 restructuring charges of $0.8 million and $1.4 million during the three and six months ended June 30, 2018 and $2.2 million of restructuring charges for the three and six months ended June 30, 2017 within the Office segment related to an organizational realignment that will result in greater operating efficiency and control in 2018 and related to headcount rationalization and modernization of equipment in the Office segment in 2017.

(3) Knoll recorded acquisition costs of $0.5 million and $1.5 million related to the acquisition of Muuto within the Corporate segment during the three and six months ended June 30, 2018.

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