SEGMENT INFORMATION

In accordance with FASB ASC 280---Segment Reporting, the Company reports segment data based on geography: The Children’s Place U.S. and The Children’s Place International. Each segment includes an e-commerce business located at www.childrensplace.com. Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico-based stores and revenue from the Company's U.S.-based wholesale business. Included in The Children's Place International segment are the Company's Canadian-based stores, revenue from the Company's Canadian wholesale business and revenue from international franchisees. The Company measures its segment profitability based on operating income, defined as income before interest and taxes. Net sales and direct costs are recorded by each segment. Certain inventory procurement functions such as production and design as well as corporate overhead, including executive management, finance, real estate, human resources, legal, and information technology services are managed by The Children’s Place U.S. segment. Expenses related to these functions, including depreciation and amortization, are allocated to The Children’s Place International segment based primarily on net sales. The assets related to these functions are not allocated. The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances. Net sales to external customers are derived from merchandise sales and the Company has no major customers that account for more than 10% of its net sales. As of October 28, 2017, The Children’s Place U.S. operated 898 stores and The Children’s Place International operated 129 stores. As of October 29, 2016, The Children’s Place U.S. operated 930 stores and The Children’s Place International operated 131 stores.

The following tables provide segment level financial information:



	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
	(In thousands)
Net sales:
The Children’s Place U.S.	$	427,603		$	412,380		$	1,149,741		$	1,106,676
The Children’s Place International ⁽¹⁾	62,423			61,397			150,562			157,868
Total net sales	$	490,026		$	473,777		$	1,300,303		$	1,264,544
Operating income:
The Children’s Place U.S.	$	51,751		$	48,997		$	89,567		$	74,535
The Children’s Place International	12,398			13,083			20,085			24,215
Total operating income ⁽²⁾	$	64,149		$	62,080		$	109,652		$	98,750
Operating income as a percent of net sales:
The Children’s Place U.S.	12.1		%	11.9		%	7.8		%	6.7		%
The Children’s Place International	19.9		%	21.3		%	13.3		%	15.3		%
Total operating income	13.1		%	13.1		%	8.4		%	7.8		%
Depreciation and amortization:
The Children’s Place U.S.	$	14,921		$	14,073		$	43,155		$	43,605
The Children’s Place International	1,868			2,513			5,305			5,333
Total depreciation and amortization	$	16,789		$	16,586		$	48,460		$	48,938
Capital expenditures:
The Children’s Place U.S.	$	14,415		$	10,160		$	37,291		$	24,989
The Children’s Place International	311			287			591			1,494
Total capital expenditures	$	14,726		$	10,447		$	37,882		$	26,483

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⁽¹⁾	Net sales from The Children's Place International are primarily derived from revenues from Canadian operations.


⁽²⁾	Includes costs incurred related to asset impairment charges and costs arising out of the restructuring of certain store and corporate operations totaling approximately $4.2 million for the Third Quarter 2017.

Includes costs incurred related to a provision for a legal settlement, asset impairment charges, costs related to foreign exchange control penalties, and a sales and use tax audit settlement, and costs arising out of the restructuring of certain store and corporate operations totaling approximately $12.2 million during Year-To-Date 2017.

Includes costs incurred related to asset impairment charges and costs arising out of the restructuring of certain store and corporate operations, of approximately $0.4 million and $3.0 million for the Third Quarter 2016 and Year-To-Date 2016, respectively.



	October 28, 2017		January 28, 2017		October 29, 2016
Total assets:	(In thousands)
The Children’s Place U.S.	$	825,969	$	716,377	$	799,908
The Children’s Place International	187,455		174,546		164,176
Total assets	$	1,013,424	$	890,923	$	964,084