We define reportable and operating segments on the same basis that we use to evaluate performance internally by the Chief Operating Decision Maker (the “CODM”), which we have determined is our Chief Executive Officer. We have two operating segments: RH Segment and Waterworks. The two operating segments include all sales channels accessed by our customers, including sales through catalogs, websites, stores, and the commercial channel.

Our two operating segments are strategic business units that offer products for the home furnishings customer. While RH Segment and Waterworks have a shared management team and customer base, we have determined that their results cannot be aggregated as they do not share similar economic characteristics, as well as due to other quantitative factors.

We use operating income (loss) to evaluate segment profitability. Operating income (loss) is defined as net income (loss) before interest expense—net, tradename impairment and income tax expense (benefit).

The following table presents the statements of operations metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280—Segment Reporting (in thousands):

The following table presents the balance sheet metrics as required under ASC 280—Segment Reporting (in thousands):

(1)	The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, with $17.4 million and $33.7 million impairment recorded in fiscal 2018 and fiscal 2017, respectively.

(2)

The Waterworks reporting unit tradename is presented net of an impairment charge of $35.1 million, with $20.5 million recorded in the three months ended May 2, 2020 and $14.6 million recorded in fiscal 2018. Refer to “Waterworks Tradename Impairment” within Note 4—Goodwill, Trademarks, Trademarks and Domain Names.

We use segment operating income to evaluate segment performance and allocate resources. Segment operating income excludes (i) asset impairments and change in useful lives, (ii) severance costs associated with reorganizations and (iii) product recall accruals and adjustments. These items are excluded from segment operating income in order to provide better transparency of segment operating results. Accordingly, these items are not presented by segment because they are excluded from the segment profitability measure that the CODM and management review.

The following table presents segment operating income (loss) and income (loss) before income taxes (in thousands):


	Three Months Ended
	May 2,		May 4,
	2020		2019
Operating income (loss):
RH Segment	$	49,517	$	69,400
Waterworks		(1,450)		1,094
Asset impairments and change in useful lives		(8,471)		(3,476)
Reorganization related costs		(4,143)		—
Recall accrual		—		1,615
Income from operations		35,453		68,633
Interest expense—net		19,629		21,118
Tradename impairment		20,459		—
Income (loss) before income taxes	$	(4,635)	$	47,515

We classify our sales into furniture and non-furniture product lines. Furniture includes both indoor and outdoor furniture. Non-furniture includes lighting, textiles, fittings, fixtures, surfaces, accessories and home décor, as well as hospitality. Net revenues in each category were as follows (in thousands):


	Three Months Ended
	May 2,		May 4,
	2020		2019
Furniture	$	316,779	$	396,698
Non-furniture		166,116		201,723
Total net revenues	$	482,895	$	598,421

We are domiciled in the United States and primarily operate our retail and outlet stores in the United States. As of May 2, 2020, we operate 4 retail and 2 outlet stores in Canada and 1 retail store in the U.K. Revenues from Canadian and U.K. operations, and the long-lived assets in Canada and the U.K., are not material. Canada and U.K. geographic revenues are based upon revenues recognized at the retail store locations in the respective country.

No single customer accounted for more than 10% of our revenues in the three months ended May 2, 2020 or May 4, 2019.