SEGMENT INFORMATION

The Company reports segment information based upon a "management approach." The management approach refers to the internal reporting that is used by management for making operating decisions and assessing the performance of the Company's reportable segments. The Company reports its corporate expenses separately as they are not included in the internal measures of segment operating performance used by the Company to measure the underlying performance of its reportable segments.

Segment results include the direct costs of each segment and all other costs are allocated based upon detailed estimates and analysis of actual time and expenses incurred to support the operations of each segment or units produced or sourced to support each segment's revenue. Certain costs, including incentive compensation for certain employees, and various other general corporate costs that are not specifically allocable to segments, are included in corporate expenses below. Intersegment sales and transfers are recorded at cost and are treated as a transfer of inventory. The accounting policies of the segments are the same as those described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements.

At the beginning of fiscal 2017, the Company combined its Carter's Retail and OshKosh Retail operating segments into a single U.S. Retail operating segment, and its Carter's Wholesale and OshKosh Wholesale operating segments into a single U.S. Wholesale operating segment, in order to reflect the sales-channel approach the Company's executive management now uses to evaluate its business performance and manage operations in the United States. The Company's International operating segment was not affected by these changes. The Company's operating and reportable segments are now U.S. Retail, U.S. Wholesale, and International.

Prior periods have been conformed to reflect the Company's current segment structure by adding together Carter's Retail and OshKosh Retail as U.S. Retail and Carter's Wholesale and OshKosh Wholesale as U.S. Wholesale. Prior results for the International segment and Corporate expenses were not impacted.

The table below presents certain segment information for the periods indicated



	For the fiscal year ended
(dollars in thousands)	December 29, 2018			% of Total		December 30, 2017			% of Total		December 31, 2016			% of Total
Net sales:
U.S. Retail	$	1,851,193		53.5	%	$	1,775,378		52.2	%	$	1,655,784		51.8	%
U.S. Wholesale	1,180,687			34.1	%	1,209,663			35.6	%	1,178,034			36.8	%
International	430,389			12.4	%	415,463			12.2	%	364,725			11.4	%
Total net sales	$	3,462,269		100.0	%	$	3,400,504		100.0	%	$	3,198,543		100.0	%
Operating income:				% of segment net sales					% of segment net sales					% of segment net sales
U.S. Retail^(1)(2)(4)	$	224,784		12.1	%	$	215,640		12.1	%	$	211,951		12.8	%
U.S. Wholesale⁽³⁾⁽⁴⁾	224,194			19.0	%	252,090			20.8	%	260,953			22.2	%
International⁽⁴⁾⁽⁵⁾	39,253			9.1	%	46,426			11.2	%	59,194			16.2	%
Corporate expenses⁽⁶⁾⁽⁷⁾	(96,798		)			(94,549		)			(106,170		)
Total operating income	$	391,433		11.3	%	$	419,607		12.3	%	$	425,928		13.3	%


(1)	Fiscal 2018 includes insurance recovery of approximately $0.4 million associated with unusual storm-related store closures in 2017.


(2)	Fiscal 2017 includes approximately $2.7 million of expenses related to store restructuring and approximately $12.7 million for provisions for special employee compensation.


(3)	Includes approximately $12.8 million of charges, partially offset by a $1.9 million recovery claim settlement, related to a customer bankruptcy for fiscal 2018. Fiscal 2017 includes approximately $3.3 million for provisions for special employee compensation.


(4)	Includes $1.2 million of certain costs related to inventory acquired from Skip Hop in operating income between U.S. Wholesale, U.S. Retail, and International for fiscal 2017.


(5)	Includes international licensing income. Fiscal 2018 includes approximately $5.3 million in costs associated with changes to the Company's business model in China, which includes inventory and severance charges. Fiscal 2017 includes approximately $2.3 million for provisions for special employee compensation.


(6)	Includes expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, building occupancy, information technology, certain legal fees, consulting, and audit fees.

(7)Includes the following charges for fiscal 2017 and fiscal 2016:



	For the fiscal year ended
(dollars in millions)	December 30, 2017			December 31, 2016
Provisions for special employee compensation	$	2.9		$	—
Amortization of H.W. Carter and Sons tradenames	$	—		$	1.7
Adjustment to Skip Hop contingent consideration	$	(3.6	)	$	—
Direct sourcing initiative	$	0.3		$	0.7
Acquisition-related costs	$	3.4		$	2.4

Additional Data by Segment

Inventory

The table below represents inventory by segment:



	For the fiscal year ended
(dollars in thousands)	December 29, 2018		December 30, 2017
U.S. Wholesale^(*)	$	414,174	$	389,484
U.S. Retail	96,241		93,404
International	63,811		65,834
Total	$	574,226	$	548,722


(*)	U.S. Wholesale inventories also include inventory produced and warehoused for the U.S. Retail segment.

The table below represents consolidated net sales by product:



	For the fiscal year ended
(dollars in thousands)	December 29, 2018		December 30, 2017		December 31, 2016
Baby	$	1,239,009	$	1,294,404	$	1,241,452
Playclothes	1,303,610		1,239,546		1,214,995
Sleepwear	431,961		426,703		407,078
Other(*)	487,689		439,851		335,018
Total net sales	$	3,462,269	$	3,400,504	$	3,198,543


(*)	Other product offerings include bedding, outwear, swimwear, shoes, socks, diaper bags, gift sets, toys, and hair accessories.

Geographical Data

Revenue

The Company's international sales principally represent sales to customers in Canada. Such sales were 64.2% and 64.9% of total international sales in fiscal 2018 and 2017, respectively.

Long-Lived Assets

The following represents property, plant, and equipment, net, by geographic area:



	For the fiscal year ended
(dollars in thousands)	December 29, 2018		December 30, 2017
United States	$	314,679	$	337,369
International	35,758		40,555
Total	$	350,437	$	377,924

Long-lived assets in the international segment relate principally to Canada. Long-lived assets in Canada were 87.4% and 87.6% of total international long-lived assets at the end of fiscal 2018 and 2017, respectively.