SEGMENT AND GEOGRAPHIC REGION INFORMATION

12 Months Ended

Dec. 31, 2011

SEGMENT AND GEOGRAPHIC REGION INFORMATION

SEGMENT AND GEOGRAPHIC REGION INFORMATION

17. SEGMENT AND GEOGRAPHIC REGION INFORMATION

        Accounting Standards Codification 280, "Segment Reporting", defines that a segment for reporting purposes is based on the financial performance measures that are regularly reviewed by the Chief Operating Decision Maker to assess segment performance and to make decisions about a public entities allocation of resources. During the fourth quarter of 2011, the Company realigned its financial reporting structure to provide the Company's Chief Operating Decision Maker the necessary results to assess the performance of the Company. Based on this guidance, the Company reports its segment results based on the following reportable segments; Office, Studio and Coverings. The Office segment serves corporate, government, healthcare, retail and other customers in the United States and Canada providing a portfolio of office furnishing solutions including systems, seating, storage, and KnollExtra ergonomic accessories, and other products. The Studio segment includes KnollStudio and the Company's European subsidiaries which primarily sell KnollStudio products. The KnollStudio portfolio includes a range of lounge seating; side, café and dining chairs; barstools; and conference, dining and occasional tables. The Coverings segment includes, KnollTextiles, Spinneybeck, and Edelman Leather. These businesses serve a wide range of customers offering high quality textiles, felt, and leather.

        The following information below categorizes certain financial information into the above noted segments for the years ended December 31, 2011, 2010, and 2009

	2011		2010		2009
NET SALES
Office	$	664,132	$	562,304	$	552,333
Studio		152,724		151,917		135,191
Coverings		105,344		95,246		92,509
Knoll, Inc.	$	922,200	$	809,467	$	780,033
NET INTERSEGMENT SALES
Office	$	2,148	$	2,113	$	1,669
Studio		5,953		5,845		5,308
Coverings		9,780		9,775		8,359
Knoll, Inc.	$	17,881	$	17,733	$	15,336
DEPRECIATION AND AMORTIZATION
Office	$	14,259	$	15,995	$	17,187
Studio		2,124		1,897		1,778
Coverings		1,355		1,569		1,614
Knoll, Inc.	$	17,738	$	19,461	$	20,579
OPERATING INCOME
Office	$	46,614	$	32,628	$	42,707
Studio		23,022		20,880		15,454
Coverings		22,686		18,381		16,224
Subtotal	$	92,322	$	71,889	$	74,385
Restructuring and other charges—primarily Office		696		7,565		11,959
Curtailment benefit		5,445		338		1,063
Knoll, Inc.(1)	$	97,071	$	64,662	$	63,489
CAPITAL EXPENDITURES
Office	$	14,142	$	7,072	$	10,643
Studio		1,009		958		1,922
Coverings		24		282		1,141
Knoll, Inc.	$	15,175	$	8,312	$	13,706

(1)

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:

	Year Ended December 31,
	2011		2010		2009
	(in thousands)
Office Systems	$	440,395	$	353,536	$	377,601
Seating		112,098		112,305		86,966
Files and Storage		85,404		72,475		62,153
Studio		152,724		151,917		135,191
Coverings		105,344		95,246		92,509
Other		26,235		23,988		25,613
	$	922,200	$	809,467	$	780,033

        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 to clients are attributed to the geographic areas based on the origin of sale.

	United States		Canada		Europe		Consolidated
	(in thousands)
2011
Sales to clients	$	797,834	$	44,225	$	80,141	$	922,200
Property, plant, and equipment, net		77,230		29,110		15,452		121,792
2010
Sales to clients	$	688,914	$	34,267	$	86,286	$	809,467
Property, plant, and equipment, net		75,228		31,435		15,556		122,219
2009
Sales to clients	$	688,664	$	26,831	$	64,538	$	780,033
Property, plant, and equipment, net		83,291		33,112		18,642		135,045

        A number of U.S., state and local governmental agencies purchase the Company's products, primarily from the Office segment. Sales to these entities and agencies amounted to approximately $180.1 million in 2011, $189.5 million in 2010, and $191.8 million.