Segment information

Financial information for each of Signet’s reportable segments is presented in the tables below. Signet’s chief operating decision maker utilizes sales and operating income, after the elimination of any inter-segment transactions, to determine resource allocations and performance assessment measures. Signet’s sales are derived from the retailing of jewelry, watches, other products and services as generated through the management of its five reportable segments: the Sterling Jewelers division, the Zale division, which consists of the Zale Jewelry and Piercing Pagoda segments, the UK Jewelry division and Other.

The Sterling Jewelers division operates in all 50 US states. Its stores operate nationally in malls and off-mall locations principally as Kay (Kay Jewelers and Kay Jewelers Outlet) and Jared (Jared The Galleria Of Jewelry and Jared Vault). The division also operates a variety of mall-based regional brands and the JamesAllen.com website, which was acquired in the R2Net acquisition. The results for the Sterling Jewelers division include R2Net results for the period since September 12, 2017, the date of acquisition. See Note 4 for additional information.

The Zale division operates jewelry stores (Zale Jewelry) and kiosks (Piercing Pagoda), located primarily in shopping malls throughout the US and Canada. Zale Jewelry includes the US store brand Zales (Zales Jewelers and Zales Outlet), which operates in all 50 US states, and the Canadian store brand Peoples Jewellers, which operates in nine provinces. The division also operates regional brands Gordon’s Jewelers and Mappins. Piercing Pagoda operates through mall-based kiosks.

The UK Jewelry division operates stores in the UK, Republic of Ireland and Channel Islands. Its stores operate in shopping malls and off-mall locations (i.e. high street) principally as H.Samuel and Ernest Jones.

The Other reportable segment consists of all non-reportable segments, including subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones, that are below the quantifiable threshold for separate disclosure as a reportable segment and unallocated corporate administrative functions.

During the first quarter of Fiscal 2019, the Company realigned its organizational structure. The new structure will allow for further integration of operational and product development processes and support growth strategies. In accordance with this organizational change, beginning with quarterly reporting for the 13 weeks ended May 5, 2018, the Company will report three reportable segments as follows: North America, International, and Other.



(in millions)	Fiscal 2018			Fiscal 2017			Fiscal 2016
Sales:
Sterling Jewelers	$	3,820.5		$	3,930.4		$	3,988.7
Zale Jewelry⁽¹⁾	1,516.2			1,549.7			1,568.2
Piercing Pagoda	278.5			263.1			243.2
UK Jewelry	616.7			647.1			737.6
Other	21.1			18.1			12.5
Total sales	$	6,253.0		$	6,408.4		$	6,550.2

Operating income (loss):
Sterling Jewelers⁽²⁾	$	576.0		$	715.8		$	718.6
Zale Jewelry	66.7			62.2			44.3
Piercing Pagoda	13.4			11.2			7.8
UK Jewelry	33.1			45.6			61.5
Other⁽³⁾	(109.3		)	(71.6		)	(128.5		)
Total operating income	$	579.9		$	763.2		$	703.7

Depreciation and amortization:
Sterling Jewelers	$	121.8		$	112.7		$	106.2
Zale Jewelry	55.3			49.1			44.8
Piercing Pagoda	6.4			4.6			3.3
UK Jewelry	19.1			21.6			20.1
Other	0.8			0.8			0.9
Total depreciation and amortization	$	203.4		$	188.8		$	175.3

Capital additions:
Sterling Jewelers	$	134.8		$	154.5		$	141.6
Zale Jewelry	76.3			85.0			47.7
Piercing Pagoda	8.6			12.7			10.2
UK Jewelry	17.6			25.7			26.4
Other	0.1			0.1			0.6
Total capital additions	$	237.4		$	278.0		$	226.5


⁽¹⁾	Includes sales of $235.1 million, $234.6 million and $248.7 million generated by Canadian operations in Fiscal 2018, Fiscal 2017 and Fiscal 2016, respectively.


⁽²⁾	For Fiscal 2018, amount includes $20.7 million gain related to the reversal of the allowance for credit losses for the in-house receivables sold, as well as the $10.2 million gain upon recognition of beneficial interest in connection with the sale of the prime portion of in-house receivables. See Note 3 for additional information.

⁽³⁾

For Fiscal 2018, Other includes $29.6 million of transaction costs related to the credit transaction, $8.6 million of R2Net acquisition costs, and $3.4 million of CEO transition costs. See Note 3 and Note 4 for additional information regarding credit transaction and acquisition of R2Net, respectively. For Fiscal 2017, Other includes $28.4 million of integration costs for consulting expenses associated with IT implementations, severance related to organizational changes and expenses associated with the settlement of miscellaneous legal matters pending as of the date of the Zale acquisition. For Fiscal 2016, Other includes $78.9 million of transaction and integration costs primarily attributable to the impact of the appraisal rights legal settlement discussed in Note 26 and expenses associated with legal, tax, accounting, IT implementations and consulting services, as well as severance costs.



(in millions)	February 3, 2018		January 28, 2017
Total assets:
Sterling Jewelers	$	3,279.4	$	4,015.4
Zale Jewelry	1,879.4		1,940.7
Piercing Pagoda	150.2		141.6
UK Jewelry	420.3		372.6
Other	110.3		127.5
Total assets	$	5,839.6	$	6,597.8

Total long-lived assets:
Sterling Jewelers	$	956.3	$	567.3
Zale Jewelry	1,075.6		1,050.1
Piercing Pagoda	63.6		61.4
UK Jewelry	78.3		70.7
Other	7.3		8.0
Total long-lived assets	$	2,181.1	$	1,757.5

Total liabilities:
Sterling Jewelers	$	1,482.4	$	2,061.4
Zale Jewelry	439.9		524.3
Piercing Pagoda	28.8		28.2
UK Jewelry	98.9		110.6
Other	676.2		771.2
Total liabilities	$	2,726.2	$	3,495.7



(in millions)	Fiscal 2018		Fiscal 2017		Fiscal 2016
Sales by product:
Diamonds and diamond jewelry	$	3,742.8	$	3,853.7	$	3,918.1
Gold, silver jewelry, other products and services	2,067.2		2,090.0		2,116.4
Watches	443.0		464.7		515.7
Total sales	$	6,253.0	$	6,408.4	$	6,550.2