SEGMENT AND GEOGRAPHIC REGION INFORMATION

12 Months Ended

Dec. 31, 2012

SEGMENT AND GEOGRAPHIC REGION INFORMATION

SEGMENT AND GEOGRAPHIC REGION INFORMATION

18. 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 entity's allocation of resources. Based on this guidance, the Company reports its segment results based on the following reportable segments: (i) Office; (ii) Studio; and (iii) 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®, Knoll Europe which sells primarily KnollStudio® products, and Richard Schultz® Design. The KnollStudio® portfolio includes a range of lounge seating; side, café and dining chairs; barstools; and conference, dining and occasional tables. Richard Schultz® Design provides high quality outdoor furniture. The Coverings segment includes, KnollTextiles®, Spinneybeck®, Edelman®Leather and Filzfelt^TM. 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, 2012, 2011, and 2010 (in thousands)

	2012		2011		2010
SALES
Office	$	633,321	$	664,132	$	562,304
Studio		147,550		152,724		151,917
Coverings		106,628		105,344		95,246
Knoll, Inc.	$	887,499	$	922,200	$	809,467
INTERSEGMENT SALES(1)
Office	$	1,727	$	2,148	$	2,113
Studio		5,299		5,953		5,845
Coverings		9,591		9,780		9,775
Knoll, Inc.	$	16,617	$	17,881	$	17,733
DEPRECIATION AND AMORTIZATION
Office	$	13,409	$	14,259	$	15,995
Studio		2,055		2,124		1,897
Coverings		1,083		1,355		1,569
Knoll, Inc.	$	16,547	$	17,738	$	19,461
OPERATING PROFIT
Office	$	48,639	$	46,614	$	32,628
Studio		21,786		23,022		20,880
Coverings		17,476		22,686		18,381
Subtotal		87,901		92,322		71,889
Restructuring and other charges—primarily Office		—		696		7,565
Curtailment benefit		—		5,445		338
Knoll, Inc.(2)	$	87,901	$	97,071	$	64,662
CAPITAL EXPENDITURES, NET
Office	$	14,251	$	14,142	$	7,072
Studio		1,871		1,009		958
Coverings		423		24		282
Knoll, Inc.		16,545		15,175		8,312

(1)

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

(2)

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,
	2012		2011		2010
	(in thousands)
Office Systems	$	424,405	$	440,395	$	353,536
Seating		102,523		112,098		112,305
Files and Storage		77,695		85,404		72,475
Studio		147,550		152,724		151,917
Coverings		106,628		105,344		95,246
Other		28,698		26,235		23,988
Total	$	887,499	$	922,200	$	809,467

        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)
2012
Sales to clients	$	774,654	$	40,669	$	72,176	$	887,499
Property, plant, and equipment, net		80,953		29,064		14,821		124,838
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

        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 $143.7 million in 2012, $180.1 million in 2011, and $189.5 million in 2010.