Note 10: Variable Interest Entities

Our financial statements include the accounts of certain entities in which we held a controlling interest based on exposure to economic risks and potential rewards (variable interests) for the periods in which we were the primary beneficiary. Accounting guidance requires that a variable interest entity (“VIE”) be consolidated if the company has both (a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. During the third quarter of fiscal 2012, we deconsolidated our last VIE for which we were the primary beneficiary due to the expiration of the operating agreement that previously caused us to be considered its primary beneficiary.

The table below shows the assets and liabilities of the single remaining VIE included in our consolidated balance sheet at April 30, 2011:

(Unaudited, amounts in thousands)	4/30/11
Cash and equivalents	$	1,642
Receivables, net		20
Inventories, net		2,719
Other current assets		79
Property, plant and equipment, net		374
Other long-term assets, net		188
Total assets	$	5,022

Accounts payable	$	278
Accrued expenses and other current liabilities		2,198
Other long-term liabilities		339
Total liabilities	$	2,815

We have significant interests in three independent La-Z-Boy Furniture Galleries® dealers for which we are not the primary beneficiary. Our total exposure related to these dealers at January 28, 2012, and April 30, 2011, was $3.6 million and $5.0 million, respectively, consisting primarily of past due accounts receivable as well as notes receivable, net of reserves and collateral on inventory and real estate. We have not provided additional financial or other support to these dealers during fiscal 2012 and have no obligations or commitments to provide further support.