Note 16: Segment Information

Our reportable operating segments are the Upholstery segment, the Casegoods segment and the Retail segment.

Upholstery Segment. Our Upholstery reportable segment is our largest business segment and consists primarily of two operating segments: La-Z-Boy, our largest operating segment, and the operating segment for our England subsidiary. The Upholstery segment also includes our international wholesale businesses. These operating segments are aggregated into one reportable segment because they are economically similar and because they meet the other aggregation criteria for determining reportable segments. Our Upholstery segment manufactures and imports upholstered furniture such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas. The Upholstery segment sells directly to La-Z-Boy Furniture Galleries® stores, operators of La-Z-Boy Comfort Studio® locations and England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers.

Casegoods Segment. Our Casegoods segment consists of one operating segment, and sells furniture under three brands: American Drew, Hammary, and Kincaid. The Casegoods segment is an importer, marketer, and distributor of casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces, and also manufactures some coordinated upholstered furniture. The Casegoods segment sells directly to major dealers, as well as La-Z-Boy Furniture Galleries® stores, and a wide cross-section of other independent retailers.

Retail Segment. Our Retail segment consists of one operating segment, and includes our 146 company-owned La-Z-Boy Furniture Galleries® stores. During fiscal 2018, fiscal 2017, and fiscal 2016, we acquired La-Z-Boy Furniture Galleries® stores in various markets. All of these acquired stores were previously independently owned and operated (see Note 2 for more detail related to these acquisitions). The Retail segment primarily sells upholstered furniture, in addition to some casegoods and other accessories, to end consumers through these stores.

The accounting policies of the operating segments are the same as those described in Note 1. We account for intersegment revenue transactions between our segments consistent with independent third-party transactions, that is, at current market prices. As a result, the manufacturing profit related to sales to our Retail segment is included within the appropriate Upholstery or Casegoods segment. Operating income realized on intersegment revenue transactions is therefore generally consistent with the operating income realized on our revenue from independent third-party transactions. Segment operating income is based on profit or loss from operations before interest expense, interest income, other income (expense) and income taxes. Identifiable assets are cash and equivalents, notes and accounts receivable, net inventories, net property, plant and equipment, goodwill and other intangible assets. Our unallocated assets include deferred income taxes, corporate assets (including a portion of cash and equivalents), and various other assets. Sales are attributed to countries on the basis of the customer’s location.

	Fiscal Year Ended
(Amounts in thousands)	(52 weeks) 4/28/2018			(52 weeks) 4/29/2017			(53 weeks) 4/30/2016
Sales
Upholstery segment:
Sales to external customers	$	1,010,097		$	986,917		$	1,027,615
Intersegment sales	217,266			204,526			188,190

Upholstery segment sales	1,227,363			1,191,443			1,215,805


Casegoods segment:
Sales to external customers	95,919			87,181			92,601
Intersegment sales	15,474			13,047			9,939

Casegoods segment sales	111,393			100,228			102,540


Retail segment sales	474,613			443,238			402,479

Corporate and Other:
Sales to external customers	3,318			2,724			2,703
Intersegment sales	9,421			6,437			3,720

Corporate and Other sales	12,739			9,161			6,423


Eliminations	(242,161		)	(224,010		)	(201,849		)

Consolidated sales	$	1,583,947		$	1,520,060		$	1,525,398


Operating Income (Loss)
Upholstery segment	$	130,349		$	148,996		$	137,135
Casegoods segment	11,641			8,623			7,734
Retail segment	20,709			19,205			25,567
Corporate and Other	(33,330		)	(43,482		)	(45,105		)

Consolidated operating income	129,369			133,342			125,331
Interest expense	538			1,073			486
Interest income	1,709			981			827
Other income (expense), net	(1,650		)	(2,510		)	(629		)

Income before income taxes	$	128,890		$	130,740		$	125,043


Depreciation and Amortization
Upholstery segment	$	15,823		$	14,692		$	13,559
Casegoods segment	993			863			874
Retail segment	3,758			3,131			2,800
Corporate and Other	11,193			10,445			9,284

Consolidated depreciation and amortization	$	31,767		$	29,131		$	26,517


Capital Expenditures
Upholstery segment	$	30,049		$	13,193		$	14,744
Casegoods segment	711			786			562
Retail segment	3,377			2,831			3,245
Corporate and Other	2,200			3,494			6,133

Consolidated capital expenditures	$	36,337		$	20,304		$	24,684

(Amounts in thousands)	(52 weeks) 4/28/2018			(52 weeks) 4/29/2017			(53 weeks) 4/30/2016
Assets
Upholstery segment	$	363,864		$	357,889		$	323,411
Casegoods segment	57,312			53,064			51,165
Retail segment	177,853			172,601			146,963
Unallocated assets	293,938			305,301			278,490

Consolidated assets	$	892,967		$	888,855		$	800,029


Long-Lived Assets by Geographic Location
Domestic	$	251,778		$	239,198		$	211,021
International	23,671			23,791			7,443

Consolidated long-lived assets	$	275,449		$	262,989		$	218,464


Sales by Country
United States	87		%	88		%	89		%
Canada	7		%	7		%	7		%
Other	6		%	5		%	4		%

Total	100		%	100		%	100		%