NOTE 16SEGMENT REPORTING The Company defines reportable and operating segments on the same basis that it uses to evaluate performance internally by the Chief Operating Decision Maker (the CODM). The Company has determined that the Chief Executive Officer is its CODM. As of May 4, 2019, the Company had two operating segments: RH Segment and Waterworks. The two operating segments include all sales channels accessed by the Companys customers, including sales through catalogs, sales through the Companys websites, sales through stores, and sales through the commercial channel . The Companys 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, the Company has determined that their results cannot be aggregated as they do not share similar economic characteristics, as well as due to other quantitative factors. The Company uses operating income to evaluate segment profitability. Operating income is defined as net income before interest expensenet and income tax expense. Segment Information The following table presents the statements of income metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280 Segment Reporting ( in thousands ): Three Months Ended May 4, May 5, 2019 2018 RH Segment Waterworks Total RH Segment Waterworks Total Net revenues $ 563,706 $ 34,715 $ 598,421 $ 526,007 $ 31,399 $ 557,406 Gross profit 217,943 14,871 232,814 195,706 13,627 209,333 Depreciation and amortization 26,004 1,185 27,189 21,633 1,112 22,745 The following table presents the balance sheet metrics as required under ASC 280 Segment Reporting ( in thousands ): May 4, February 2, 2019 2019 RH Segment Waterworks Total RH Segment Waterworks Total Goodwill (1) $ 124,349 $  $ 124,349 $ 124,379 $  $ 124,379 Tradenames, trademarks and domain names (2) 48,563 37,459 86,022 48,563 37,459 86,022 Total assets 2,397,748 148,084 2,545,832 2,273,951 149,067 2,423,018 (1) The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of February 2, 2019, 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 $14.6 million recorded in fiscal 2018. The Company uses segment operating income to evaluate segment performance and allocate resources. Segment operating income excludes (i) asset impairments and change in useful lives, (ii) product recall accruals and adjustments, (iii) reversal of an estimated loss on disposal of asset, (iv) non-cash amortization of the inventory fair value adjustment recorded in connection with the acquisition of Waterworks and (v) costs incurred in connection with a legal settlement. 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 management reviews. The following table presents segment operating income and income before income taxes ( in thousands ): Three Months Ended May 4, May 5, 2019 2018 Operating income: RH Segment $ 69,400 $ 49,048 Waterworks 1,094 110 Asset impairments and change in useful lives (3,476)  Recall accrual 1,615 254 Loss on asset disposal reversal  840 Impact of inventory step-up  (190) Legal costs  (1,915) Income from operations 68,633 48,147 Interest expensenet 21,118 15,098 Income before income taxes $ 47,515 $ 33,049 The Company classifies its 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 decor. Net revenues in each category were as follows ( in thousands ): Three Months Ended May 4, May 5, 2019 2018 Furniture $ 396,698 $ 352,646 Non-furniture 201,723 204,760 Total net revenues $ 598,421 $ 557,406 The Company is domiciled in the United States and primarily operates its retail and outlet stores in the United States. As of May 4, 2019, the Company operates 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 to the Company. 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 the Companys revenues in the three months ended May 4, 2019 or May 5, 2018.