SEGMENT INFORMATION

In accordance with the “Segment Reporting” topic of the FASB ASC, 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 U.S. revenue from the Company's wholesale business. Included in The Children's Place International segment are the Company's Canadian based stores, revenue from the Company's Canada 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 from external customers are derived from merchandise sales and the Company has no major customers that account for more than 10% of its net sales.

The following tables provide segment level financial information for Fiscal 2017, Fiscal 2016, and Fiscal 2015:



	Fiscal Year Ended
	February 3, 2018		January 28, 2017		January 30, 2016
	(In thousands)
Net sales:
The Children’s Place U.S.	$	1,650,620	$	1,567,556	$	1,518,117
The Children’s Place International⁽¹⁾	219,655		217,760		207,660
Total net sales	$	1,870,275	$	1,785,316	$	1,725,777
Operating income:
The Children’s Place U.S.	$	132,152	$	113,376	$	65,221
The Children’s Place International	29,358		34,032		24,859
Total operating income⁽²⁾	$	161,510	$	147,408	$	90,080



Operating income as a percent of net sales:
The Children’s Place U.S.	8.0		%	7.2		%	4.3		%
The Children’s Place International	13.4		%	15.6		%	12.0		%
Total operating income	8.6		%	8.3		%	5.2		%
Depreciation and amortization:
The Children’s Place U.S.	$	60,732		$	58,626		$	55,937
The Children’s Place International	7,427			7,108			6,748
Total depreciation and amortization	$	68,159		$	65,734		$	62,685
Capital expenditures:
The Children’s Place U.S.	$	57,360		$	33,447		$	41,304
The Children’s Place International	1,297			1,237			841
Total capital expenditures	$	58,657		$	34,684		$	42,145


(1)	Net sales from The Children's Place International are primarily derived from revenues from Canadian operations. Our foreign subsidiaries, primarily in Canada, have operating results based in foreign currencies and are thus subject to the fluctuations of the corresponding translation rates into U.S. dollars.

(2)

Includes costs incurred related to a provision for a legal settlement, asset impairment charges, costs related to foreign exchange control penalties, a sales and use tax audit settlement, and costs arising out of the restructuring of certain store and corporate operations totaling approximately $17.4 million for Fiscal 2017. Includes costs incurred related to asset impairment charges, foreign exchange control penalties, legal settlements and costs arising out of the restructuring of certain store and corporate operations, of approximately $4.3 million for Fiscal 2016. Includes costs incurred related to asset impairment charges, proxy contest costs, legal settlements and costs arising out of the restructuring of certain store and corporate operations, of approximately $20.7 million for Fiscal 2015.



	February 3, 2018		January 28, 2017
	(In thousands)
Total assets:
The Children’s Place U.S.	$	750,670	$	735,953
The Children’s Place International	189,558		174,546
Total assets	$	940,228	$	910,499

Geographic Information

The Company's long-lived assets are located in the following countries:



	February 3, 2018		January 28, 2017
	(In thousands)
Long-lived assets⁽¹⁾:
United States	$	258,660	$	253,940
Canada	11,119		14,385
Asia	1,247		1,277
Total long-lived assets	$	271,026	$	269,602

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(1)	The Company's long-lived assets are comprised of net property and equipment and other assets.