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Segment Reporting | 12 Months Ended
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Jan. 28, 2018
Segment Reporting | Note K: Segment Reporting We have two reportable segments, e-commerce and retail. The e-commerce segment has the following merchandise strategies: Williams Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams Sonoma Home, Rejuvenation and Mark and Graham, which sell our products through our e-commerce websites and direct-mail catalogs. Our e-commerce merchandise strategies are operating segments, which have been aggregated into one reportable segment, e-commerce. The retail segment, which includes our franchise operations, has the following merchandise strategies: Williams Sonoma, Pottery Barn, Pottery Barn Kids, West Elm and Rejuvenation, which sell our products through our retail stores. Our retail merchandise strategies are operating segments, which have been aggregated into one reportable segment, retail. Management’s expectation is that the overall economic characteristics of each of our operating segments will be similar over time based on management’s judgment that the operating segments have had similar historical economic characteristics and are expected to have similar long-term financial performance in the future. These reportable segments are strategic business units that offer similar products for the home. They are managed separately because the business units utilize two distinct distribution and marketing strategies. Based on management’s best estimate, our operating segments include allocations of certain expenses, including advertising and employment costs, to the extent they have been determined to benefit both channels. These operating segments are aggregated at the channel level for reporting purposes due to the fact that our brands are interdependent for economies of scale and we do not maintain fully allocated income statements at the brand level. As a result, material financial decisions related to the brands are made at the channel level. Furthermore, it is not practicable for us to report revenue by product group. We use operating income to evaluate segment profitability. Operating income is defined as earnings (loss) before net interest income (expense) and income taxes. Unallocated costs before interest and income taxes include corporate employee-related costs, occupancy expenses (including depreciation expense), administrative costs and third-party service costs, primarily in our corporate administrative and systems departments. Unallocated assets include corporate cash and cash equivalents, prepaid expenses, the net book value of corporate facilities and related information systems, deferred income taxes and other corporate long-lived assets. Income taxes are calculated at an entity level and are not allocated to our reportable segments. Segment Information
In thousands |  | E-commerce |  |  | Retail |  |  | Unallocated |  |  | Total |
Fiscal 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net revenues1 |  |  | $ 2,778,457 |  |  |  | $ 2,513,902 |  |  |  | $ — |  |  |  | $ 5,292,359 |
Depreciation and amortization expense |  |  | 28,977 |  |  |  | 90,625 |  |  |  | 63,475 |  |  |  | 183,077 |
Operating income (loss) 2,3 |  |  | 599,491 |  |  |  | 224,608 |  |  |  | (370,288 | ) |  |  | 453,811 |
Assets4 |  |  | 776,569 |  |  |  | 1,114,726 |  |  |  | 894,454 |  |  |  | 2,785,749 |
Capital expenditures |  |  | 39,273 |  |  |  | 83,750 |  |  |  | 66,689 |  |  |  | 189,712 |
Fiscal 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net revenues1 |  |  | $ 2,633,602 |  |  |  | $ 2,450,210 |  |  |  | $ — |  |  |  | $ 5,083,812 |
Depreciation and amortization expense |  |  | 31,135 |  |  |  | 86,228 |  |  |  | 55,832 |  |  |  | 173,195 |
Operating income (loss)2 |  |  | 606,286 |  |  |  | 231,929 |  |  |  | (365,616 | ) |  |  | 472,599 |
Assets4 |  |  | 614,213 |  |  |  | 1,077,593 |  |  |  | 785,073 |  |  |  | 2,476,879 |
Capital expenditures |  |  | 21,479 |  |  |  | 102,859 |  |  |  | 73,076 |  |  |  | 197,414 |
Fiscal 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net revenues1 |  |  | $ 2,522,580 |  |  |  | $ 2,453,510 |  |  |  | $ — |  |  |  | $ 4,976,090 |
Depreciation and amortization expense |  |  | 32,056 |  |  |  | 83,027 |  |  |  | 52,677 |  |  |  | 167,760 |
Operating income (loss) |  |  | 562,081 |  |  |  | 239,288 |  |  |  | (312,735 | ) |  |  | 488,634 |
Assets4 |  |  | 625,951 |  |  |  | 1,049,892 |  |  |  | 741,584 |  |  |  | 2,417,427 |
Capital expenditures |  |  | 22,293 |  |  |  | 102,717 |  |  |  | 77,925 |  |  |  | 202,935 |
1 | Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately $328.2 million, $321.2 million and $298.9 million in fiscal 2017, fiscal 2016 and fiscal 2015, respectively.
2 | Includes approximately $8.6 million in fiscal 2017 and $14.4 million in fiscal 2016 for severance-related reorganization charges, primarily in our corporate functions, which is recorded in selling, general and administrative expenses within the unallocated segment.
3 | Includes approximately $6.2 million in fiscal 2017 for costs related to the acquisition of Outward and its ongoing operations, which is primarily recorded in selling, general and administrative expenses.
4 | Includes long-term assets related to our international operations of approximately $63.4 million, $59.2 million and $61.7 million in fiscal 2017, fiscal 2016 and fiscal 2015, respectively.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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