Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Apr. 28, 2018	Jun. 12, 2018	Oct. 28, 2017
Document and Entity Information
Entity Registrant Name	LA-Z-BOY INC
Entity Central Index Key	0000057131
Current Fiscal Year End Date	--04-28
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,316.9
Entity Common Stock, Shares Outstanding		46,638,907
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Apr. 28, 2018

CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Apr. 28, 2018	Apr. 29, 2017	Apr. 30, 2016
CONSOLIDATED STATEMENT OF INCOME
Sales	$ 1,583,947	$ 1,520,060	$ 1,525,398
Cost of sales	961,200	910,757	940,420
Gross profit	622,747	609,303	584,978
Selling, general and administrative expense	493,378	475,961	459,647
Operating income	129,369	133,342	125,331
Interest expense	538	1,073	486
Interest income	1,709	981	827
Other income (expense), net	(1,650)	(2,510)	(629)
Income before income taxes	128,890	130,740	125,043
Income tax expense	47,295	43,756	44,080
Net income	81,595	86,984	80,963
Net income attributable to noncontrolling interests	(729)	(1,062)	(1,711)
Net income attributable to La-Z-Boy Incorporated	$ 80,866	$ 85,922	$ 79,252
Basic weighted average common shares (in shares)	47,621	48,963	50,194
Basic net income attributable to La-Z-Boy Incorporated per share (in dollars per share)	$ 1.69	$ 1.75	$ 1.57
Diluted weighted average common shares (in shares)	48,135	49,470	50,765
Diluted net income attributable to La-Z-Boy Incorporated per share (in dollars per share)	$ 1.67	$ 1.73	$ 1.55
Dividends declared per share (in dollars per share)	$ 0.46	$ 0.42	$ 0.36

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Apr. 28, 2018	Apr. 29, 2017	Apr. 30, 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net income	$ 81,595	$ 86,984	$ 80,963
Other comprehensive income (loss)
Currency translation adjustment	4,435	(428)	(2,557)
Change in fair value of cash flow hedges, net of tax	80	360	274
Net unrealized gains (losses) on marketable securities, net of tax	(376)	694	(547)
Net pension amortization and actuarial gain, net of tax	4,665	545	374
Total other comprehensive income (loss)	8,804	1,171	(2,456)
Total comprehensive income before noncontrolling interests	90,399	88,155	78,507
Comprehensive income attributable to noncontrolling interests	(1,849)	(1,116)	(1,116)
Comprehensive income attributable to La-Z-Boy Incorporated	$ 88,550	$ 87,039	$ 77,391

CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands	Apr. 28, 2018	Apr. 29, 2017
Current assets
Cash and equivalents	$ 134,515	$ 141,860
Restricted cash	2,356	8,999
Receivables, net of allowance of $1,956 at 4/28/18 and $2,563 at 4/29/17	154,055	150,846
Inventories, net	184,841	175,114
Other current assets	42,451	40,603
Total current assets	518,218	517,422
Property, plant and equipment, net	180,882	169,132
Goodwill	75,254	74,245
Other intangible assets, net	18,190	18,489
Deferred income taxes - long-term	21,265	40,131
Other long-term assets, net	79,158	69,436
Total assets	892,967	888,855
Current liabilities
Current portion of long-term debt	223	219
Accounts payable	62,403	51,282
Accrued expenses and other current liabilities	118,721	147,175
Total current liabilities	181,347	198,676
Long-term debt	199	296
Other long-term liabilities	86,205	88,778
Contingencies and commitments
Shareholders' equity
Preferred shares - 5,000 authorized; none issued
Common shares, $1 par value - 150,000 authorized; 46,788 outstanding at 4/28/18 and 48,472 outstanding at 4/29/17	46,788	48,472
Capital in excess of par value	298,948	289,632
Retained earnings	291,644	284,698
Accumulated other comprehensive loss	(25,199)	(32,883)
Total La-Z-Boy Incorporated shareholders' equity	612,181	589,919
Noncontrolling interests	13,035	11,186
Total equity	625,216	601,105
Total liabilities and equity	$ 892,967	$ 888,855

CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Apr. 28, 2018	Apr. 29, 2017
Current assets
Receivables, allowance (in dollars)	$ 1,956	$ 2,563
Shareholders' equity
Preferred shares, authorized (in shares)	5,000	5,000
Preferred shares, issued (in shares)	0	0
Common shares, par value (in dollars per share)	$ 1	$ 1
Common shares, authorized (in shares)	150,000	150,000
Common shares, outstanding (in shares)	46,788	48,472

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Apr. 28, 2018	Apr. 29, 2017	Apr. 30, 2016
Cash flows from operating activities
Net income	$ 81,595	$ 86,984	$ 80,963
Adjustments to reconcile net income to cash provided by operating activities
(Gain) loss on disposal of assets	(2,108)	(224)	384
Gain on conversion of investment	(2,204)
Gain on sale of investments	(770)	(471)	(436)
Change in deferred taxes	17,261	569	4,581
Change in provision for doubtful accounts	276	(291)	(660)
Depreciation and amortization	31,767	29,131	26,517
Stock-based compensation expense	9,474	8,864	8,292
Pension plan contributions	(2,000)	(2,300)	(7,000)
Change in receivables	(2,801)	(7,850)	10,730
Change in inventories	(8,009)	12,517	(14,621)
Change in other assets	(3,245)	(1,211)	4,148
Change in accounts payable	6,602	4,541	(1,007)
Change in other liabilities	(10,088)	17,731	2,618
Net cash provided by operating activities	115,750	147,990	114,509
Cash flows from investing activities
Proceeds from disposals of assets	1,440	761	3,054
Proceeds from property insurance	2,087
Capital expenditures	(36,337)	(20,304)	(24,684)
Purchases of investments	(28,593)	(29,763)	(21,009)
Proceeds from sales of investments	22,674	19,954	28,721
Acquisitions, net of cash acquired	(16,495)	(35,878)	(23,311)
Net cash used for investing activities	(55,224)	(65,230)	(37,229)
Cash flows from financing activities
Payments on debt	(262)	(288)	(508)
Payments for debt issuance costs	(231)
Stock issued for stock and employee benefit plans, net of shares withheld for taxes	2,977	1,749	(1,728)
Excess tax benefit on stock option exercises		1,737	1,264
Purchases of common stock	(56,730)	(35,957)	(44,082)
Dividends paid	(22,009)	(20,655)	(18,141)
Net cash used for financing activities	(76,255)	(53,414)	(63,195)
Effect of exchange rate changes on cash and equivalents	1,741	178	(688)
Change in cash, cash equivalents and restricted cash	(13,988)	29,524	13,397
Cash, cash equivalents and restricted cash at beginning of period	150,859	121,335	107,938
Cash, cash equivalents and restricted cash at end of period	136,871	150,859	$ 121,335
Supplemental disclosure of non-cash investing activities
Capital expenditures included in accounts payable	$ 5,667	$ 1,795

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands	Common Shares	Capital in Excess of Par Value	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-Controlling Interests	Total
Balance at Apr. 25, 2015	$ 50,747	$ 270,032	$ 235,506	$ (32,139)	$ 8,954	$ 533,100
Increase (Decrease) in Stockholders' Equity
Net income			79,252		1,711	80,963
Other comprehensive income (loss)				(1,861)	(595)	(2,456)
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax	243	97	(2,068)			(1,728)
Purchases of 1,659 shares, 1,363 shares and 1,995 shares of common stock for the year ended April 30, 2016, April 29, 2017 and April 28, 2018, respectively	(1,659)	(346)	(42,077)			(44,082)
Stock option and restricted stock expense		8,292				8,292
Tax benefit from exercise of options		1,264				1,264
Dividends paid			(18,141)			(18,141)
Balance at Apr. 30, 2016	49,331	279,339	252,472	(34,000)	10,070	557,212
Increase (Decrease) in Stockholders' Equity
Net income			85,922		1,062	86,984
Other comprehensive income (loss)				1,117	54	1,171
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax	504	2,992	(1,747)			1,749
Purchases of 1,659 shares, 1,363 shares and 1,995 shares of common stock for the year ended April 30, 2016, April 29, 2017 and April 28, 2018, respectively	(1,363)	(3,300)	(31,294)			(35,957)
Stock option and restricted stock expense		8,864				8,864
Tax benefit from exercise of options		1,737				1,737
Dividends paid			(20,655)			(20,655)
Balance at Apr. 29, 2017	48,472	289,632	284,698	(32,883)	11,186	601,105
Increase (Decrease) in Stockholders' Equity
Net income			80,866		729	81,595
Other comprehensive income (loss)				7,684	1,120	8,804
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax	311	4,046	(1,380)			2,977
Purchases of 1,659 shares, 1,363 shares and 1,995 shares of common stock for the year ended April 30, 2016, April 29, 2017 and April 28, 2018, respectively	(1,995)	(4,204)	(50,531)			(56,730)
Stock option and restricted stock expense		9,474				9,474
Dividends paid			(22,009)			(22,009)
Balance at Apr. 28, 2018	$ 46,788	$ 298,948	$ 291,644	$ (25,199)	$ 13,035	$ 625,216

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Parenthetical) - shares shares in Thousands	12 Months Ended
	Apr. 28, 2018	Apr. 29, 2017	Apr. 30, 2016
Common Shares
Shares purchased	1,995	1,363	1,659

Accounting Policies	12 Months Ended
Accounting Policies	Apr. 28, 2018
Accounting Policies
Accounting Policies	Note 1: Accounting Policies The following is a summary of significant accounting policies followed in the preparation of La-Z-Boy Incorporated and its subsidiaries’ (individually and collectively, “we,” “our,” or the “Company”) consolidated financial statements. It is important to note that our fiscal year 2018 and fiscal year 2017 included 52 weeks, whereas fiscal year 2016 included 53 weeks. The additional week in fiscal year 2016 was included in our fourth quarter. Principles of Consolidation The accompanying consolidated financial statements include the consolidated accounts of La-Z-Boy Incorporated and our majority-owned subsidiaries. The portion of less than wholly-owned subsidiaries is included as non-controlling interest. All intercompany transactions have been eliminated, including any related profit on intercompany sales. At April 28, 2018, we owned preferred shares of two privately-held companies, and a warrant to purchase common shares of one of the companies, both of which are variable interest entities. We have not consolidated their results in our financial statements because we do not have the power to direct those activities that most significantly impact their economic performance and, therefore, are not the primary beneficiary. Use of Estimates The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect the reported amounts or disclosures of assets, liabilities (including contingent assets and liabilities), sales, and expenses at the date of the financial statements. Actual results could differ from those estimates. Cash and Equivalents For purposes of the consolidated balance sheet and statement of cash flows, we consider all highly liquid debt instruments purchased with initial maturities of three months or less to be cash equivalents. Restricted Cash We have cash on deposit with a bank as collateral for certain letters of credit. Inventories Inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out (“LIFO”) basis for approximately 64% and 63% of our inventories at April 28, 2018, and April 29, 2017, respectively. Cost is determined for all other inventories on a first-in, first-out (“FIFO”) basis. The LIFO method of accounting is used for our La-Z-Boy U.S. wholesale business inventory and the imported finished goods inventory owned by our Casegoods Segment, while the FIFO method is used for the remainder of our inventory. Property, Plant and Equipment Items capitalized, including significant betterments to existing facilities, are recorded at cost. Capitalized computer software costs include internal and external costs incurred during the software’s development stage. Internal costs relate primarily to employee activities related to coding and testing the software under development. Computer software costs are depreciated over three to ten years. All maintenance and repair costs are expensed when incurred. Depreciation is computed principally using straight-line methods over the estimated useful lives of the assets. Disposal and Impairment of Long-Lived Assets Retirement or dispositions of long-lived assets are recorded based on carrying value and proceeds received. Any resulting gains or losses are recorded as a component of selling, general and administrative expenses. We review the carrying value of our long-lived assets for impairment annually or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Our assessment of recoverability is based on our best estimates using either quoted market prices or an analysis of the undiscounted projected future cash flows by asset groups in order to determine if there is any indicator of impairment requiring us to further assess the fair value of our long-lived assets. Our asset groups consist of our operating segments in our Upholstery reportable segment, our Casegoods segment, each of our retail stores, and other corporate assets. Indefinite-Lived Intangible Assets and Goodwill We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Indefinite-lived intangible assets include our American Drew trade name, and the reacquired right to own and operate La-Z-Boy Furniture Galleries® stores we have acquired. The reacquired right to own and operate La-Z-Boy Furniture Galleries® stores are indefinite-lived because our Retailer Agreements are perpetual agreements that have no specific expiration date and no renewal options. A Retailer Agreement remains in effect as long as the independent retailer is not in default under the terms of the agreement. We establish the fair value of our trade name and reacquired rights based upon the relief from royalty method. Our goodwill relates to the acquisition of La-Z-Boy Furniture Galleries® stores and the acquisition of the La-Z-Boy wholesale business in the United Kingdom and Ireland. The reporting unit for goodwill arising from retail store acquisitions is our Retail operating segment. We have three geographic regions which are considered components of our Retail operating segment. These three geographic regions are aggregated into one reporting unit for goodwill because they are economically similar, they operate in a consistent manner across the regions, and each store supports and benefits from common research and development projects. Additionally, the goodwill is recoverable from each of the geographic regions working in concert because we can change the composition of the regions to strategically rebalance management and distribution capacity as needed. The reporting unit for goodwill arising from the acquisition of the La-Z-Boy wholesale business in the United Kingdom and Ireland is that business. The estimated fair value for the reporting unit is determined based upon discounted cash flows. In situations where the fair value is less than the carrying value, indicating a potential impairment, a second comparison is performed using a calculation of implied fair value of goodwill to measure any such impairment. Amortizable Intangible Assets We test amortizable intangible assets for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the assets might be impaired. We have amortizable intangible assets related to the acquisition of the La-Z-Boy wholesale business in the United Kingdom and Ireland, which primarily include acquired customer relationships. These intangible assets will be amortized between one and 15 years on a straight-line basis. We established the fair value of these amortizable intangible assets based on the multi-period excess earnings method, a variant of the income approach, and also using the relief from royalty method. Investments Available-for-sale securities are recorded at fair value with the net unrealized gains and losses (that are deemed to be temporary) reported as a component of other comprehensive income/(loss). Realized gains and losses and charges for other-than-temporary impairments are included in determining net income, with related purchase costs based on the first-in, first-out method. We evaluate our available-for-sale investments for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length of time, an investment’s fair value has been below our cost basis, the issuer’s financial condition, and our ability and intent to hold the investment for sufficient time for its market value to recover. For impairments that are other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value of the investment then becomes the new amortized cost basis of the investment and it is not adjusted for subsequent recoveries in fair value. Life Insurance Life insurance policies are recorded at the amount that could be realized under the insurance contract as of the date of our consolidated balance sheet. These assets are classified as other long-term assets on our consolidated balance sheet. The change in cash surrender or contract value is recorded as income or expense during each period. Customer Deposits We collect a deposit on a portion of the total merchandise price at the time a customer order is placed in one of our company-owned Retail stores, and on la-z-boy.com. We record this as a customer deposit, which is included in our accrued expenses and other current liabilities on our consolidated balance sheet. The balance of the order is paid in full prior to delivery of the product. Revenue Recognition and Related Allowances for Credit Losses Substantially all of our shipping agreements with third-party carriers transfer the risk of loss to our customers upon shipment. Accordingly, our shipments using third-party carriers are generally recognized as revenue when product is shipped. In all cases, for product shipped on our company-owned trucks, we recognize revenue when the product is delivered. This revenue includes amounts we billed to customers for shipping. At the time we recognize revenue, we make provisions for estimated product returns and warranties, as well as other incentives that we may offer to customers. We also recognize revenue for amounts we receive from our customers in connection with our shared advertising cost arrangement. We import certain products from foreign ports, some of which are shipped directly to our domestic customers. In this case, revenue is not recognized until title is assumed by our customer, which is normally after the goods pass through U.S. Customs. Incentives offered to customers include cash discounts and other sales incentive programs. Estimated cash discounts and other sales incentives are recorded as a reduction of revenues when the revenue is recognized. Trade accounts receivable arise from the sale of products on trade credit terms. On a quarterly basis, our management team reviews all significant accounts as to their past due balances, as well as collectability of the outstanding trade accounts receivable for possible write off. It is our policy to write off the accounts receivable against the allowance account when we deem the receivable to be uncollectible. Additionally, we review orders from dealers that are significantly past due, and we ship product only when our ability to collect payment for the new sales is reasonably assured. Our allowances for credit losses reflect our best estimate of probable losses inherent in the trade accounts receivable balance. We determine the allowance based on known troubled accounts, historic experience, and other currently available evidence. We had no gross notes receivable amounts outstanding and no corresponding allowance for credit losses on notes receivable at April 28, 2018, or at April 29, 2017. Cost of Sales Our cost of sales consists primarily of the cost to manufacture or purchase our merchandise, inspection costs, internal transfer costs, in-bound freight costs, outbound shipping costs, as well as warehousing costs, occupancy costs, and depreciation expense related to our manufacturing facilities and equipment. During fiscal 2017 and fiscal 2016, we recorded a benefit related to legal settlements as part of cost of sales. Gross margin benefited 0.2 percentage points and 0.3 percentage points for fiscal 2017 and fiscal 2016, respectively, as a result of legal settlements. Selling, General and Administrative Expenses SG&A expenses include the costs of selling our products and other general and administrative costs. Selling expenses are primarily composed of commissions, advertising, warranty, bad debt expense, and compensation and benefits of employees performing various sales functions. Additionally, the occupancy costs of our retail facilities and the warehousing costs of our regional distribution centers are included as a component of SG&A. Other general and administrative expenses included in SG&A are composed primarily of compensation and benefit costs for administration employees and other administrative costs. Other Income (Expense), Net Other income (expense), net, is made up primarily of foreign currency exchange net gain/(loss), gain/(loss) on the sale of investments, and all components of pension costs other than service costs. Research and Development Costs Research and development costs are charged to expense in the periods incurred. Expenditures for research and development costs were $7.9 million, $8.0 million, and $6.3 million for the fiscal years ended April 28, 2018, April 29, 2017, and April 30, 2016, respectively, and are included as a component of SG&A. Advertising Expenses Production costs of commercials, programming and costs of other advertising, promotion and marketing programs are charged to expense in the period in which the commercial or advertisement is first aired or released. Gross advertising expenses were $88.3 million, $82.1 million, and $70.8 million for the fiscal years ended April 28, 2018, April 29, 2017, and April 30, 2016, respectively. A portion of our advertising program is a national advertising campaign. This campaign is a shared advertising program with our dealers’ La-Z-Boy Furniture Galleries® stores, which reimburse us for about 30% of the cost of the program (excluding company-owned stores). Because of this shared cost arrangement, the advertising expense is reported as a component of SG&A, while the dealers’ reimbursement portion is reported as a component of sales. Operating Leases We record rent expense related to operating leases on a straight-line basis for minimum lease payments starting with the beginning of the lease term based on the date that we have the right to control the leased property. Our minimum lease payments may incorporate step rent provisions or rent escalations. We also record rental income from subleases on a straight-line basis for minimum lease payments. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. In periods when deferred tax assets are recorded, we are required to estimate whether recoverability is more likely than not (i.e. a likelihood of more than 50%), based on, among other things, forecasts of taxable earnings in the related tax jurisdiction. We consider historical and projected future operating results, the eligible carry-forward period, tax law changes, tax planning opportunities, and other relevant considerations when making judgments about realizing the value of our deferred tax assets. We recognize in our consolidated financial statements the benefit of a position taken or expected to be taken in a tax return when it is more likely than not that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is more likely than not to be realized upon settlement. Changes in judgment that result in subsequent recognition, derecognition or change in a measurement date of a tax position taken in a prior annual period (including any related interest and penalties) are recognized as a discrete item in the interim period in which the change occurs. Foreign Currency Translation The functional currency of our wholesale Canadian and Mexico subsidiaries is the U.S. Dollar. Transaction gains and losses associated with translating our wholesale Canadian and Mexico subsidiaries’ assets and liabilities, which are non-U.S. Dollar denominated, are recorded in other income (expense), net in our consolidated statement of income. The functional currency of each of our other foreign subsidiaries is its respective local currency. Assets and liabilities of those subsidiaries whose functional currency is their local currency are translated at the year-end exchange rates, and revenues and expenses are translated at average exchange rates for the period, with the corresponding translation effect included as a component of other comprehensive income. In connection with our Mexico subsidiary we have entered into foreign currency forward contracts, designated as cash flow hedges, to hedge certain forecasted expenses. Accounting for Stock-Based Compensation We estimate the fair value of equity-based awards, including option awards and stock-based awards that vest based on market conditions, on the date of grant using option-pricing models. The value of the portion of the equity-based awards that are ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statement of income using a straight-line single-option method. We measure stock-based compensation cost for liability-based awards based on the fair value of the award on the grant date, and recognize it as expense over the vesting period. The liability for these awards is remeasured and adjusted to its fair value at the end of each reporting period until paid. We record compensation cost for stock-based awards that vest based on performance conditions ratably over the vesting periods when the vesting of such awards become probable. Commitments and Contingencies We establish an accrued liability for legal matters when those matters present loss contingencies that are both probable and estimable. As a litigation matter develops and in conjunction with any outside counsel handling the matter, we evaluate on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. When a loss contingency is not both probable and estimable, we do not establish an accrued liability. If, at the time of evaluation, the loss contingency related to a litigation matter is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable. Once the loss contingency related to a litigation matter is deemed to be both probable and estimable, we will establish an accrued liability with respect to such loss contingency and record a corresponding amount of litigation-related expense. We continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Insurance/Self-Insurance We use a combination of insurance and self-insurance for a number of risks, including workers’ compensation, general liability, vehicle liability and the company-funded portion of employee-related health care benefits. Liabilities associated with these risks are estimated in part by considering historic claims experience, demographic factors, severity factors and other assumptions. Our workers’ compensation reserve is an undiscounted liability. We have various excess loss coverages for employee-related health care benefits, vehicle liability, product liability, and workers’ compensation liabilities. Our deductibles generally do not exceed $1.5 million. Recent Accounting Pronouncements Accounting pronouncements adopted in fiscal 2018 In March 2016, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard focused on simplifying the accounting for share-based payments, including accounting for income taxes, estimating forfeitures, and classifying certain share-based transactions in the consolidated statement of cash flows. We adopted this standard in the first quarter of fiscal 2018. Our adoption of this standard did not have a material impact on our consolidated financial statements. We did not record a cumulative-effect adjustment as we had no unrecognized excess tax benefits as of the end of fiscal 2017. We elected to continue estimating forfeiture rates on our share-based awards. We adjusted the consolidated statement of cash flows for fiscal 2017 and fiscal 2016 to conform to the current fiscal year presentation by reclassifying $1.8 million and $2.1 million, respectively, of cash paid related to shares swapped for taxes from a financing activity to an operating activity. In August 2016, the FASB issued a new accounting standard that provides guidance on the classification of eight cash receipts and cash payments issues on the statement of cash flows. The intent of this standard was to help reduce diversity in practice regarding cash flow presentation. We early adopted this standard in fiscal 2018. Adoption of this standard did not have a material impact on our consolidated statement of cash flows and although the guidance requires retrospective treatment, we did not have any cash receipts or payments during the prior year that needed to be reclassified. In November 2016, the FASB issued a new accounting standard that requires the statement of cash flows to explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash. Amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We early adopted this standard in fiscal 2018 with retrospective application. For fiscal 2017, this change resulted in a $9.0 million increase in cash, cash equivalents and restricted cash at both the beginning and end of the period on our consolidated statement of cash flows. In addition, removing the change in restricted cash from the consolidated statement of cash flows resulted in a decrease of less than $0.1 million in our net cash used for investing activities for fiscal 2017. For fiscal 2016, this change resulted in a $9.6 million increase in cash, cash equivalents and restricted cash at the beginning of the period and a $9.0 million increase in cash, cash equivalents and restricted cash at the end of the period on our consolidated statement of cash flows. In addition, removing the change in restricted cash from the consolidated statement of cash flows resulted in an increase of $0.7 million in our net cash used for investing activities for fiscal 2016. In March 2017, the FASB issued a new accounting standard that changed the presentation of pension costs in our consolidated statement of income. We elected to early adopt this standard in fiscal 2018, and it requires retrospective application. All components of pension costs other than service costs will now be presented in other income (expense), net rather than operating income in our consolidated statement of income. Adoption of this standard did not have a material impact on our consolidated statement of income for any periods presented. For fiscal 2017 and fiscal 2016, we reclassified pension costs of $2.8 million and $2.9 million, respectively, from operating income to other income (expense), net to conform to the current-year presentation. Accounting pronouncements not yet adopted In May 2014, the FASB issued a new accounting standard that requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new standard supersedes virtually all existing authoritative accounting guidance on revenue recognition and requires additional disclosures and greater use of estimates and judgments. During July 2015, the FASB deferred the effective date of the revenue recognition standard by one year, thus making the new accounting standard effective beginning with our fiscal 2019. We will apply the modified retrospective approach when we implement the new standard in fiscal 2019. We have reviewed substantially all of our contracts and other revenue streams and determined that while the application of the new standard will not have a material change in the amount of or timing for recognizing revenue, we anticipate that it will have a significant impact on our financial statement disclosures related to disaggregated revenue, customer deposits and contract assets and liabilities, as well as the presentation of contract assets and liabilities on our consolidated balance sheet. In January 2016, the FASB issued a new accounting standard that requires equity investments to be measured at fair value with the fair value changes to be recognized through net income. This standard does not apply to investments that are accounted for using the equity method of accounting, or that result in consolidation of the invested entity. We currently hold equity investments that we measure at fair value at the end of each reporting period, and we recognize changes in fair value through other comprehensive income (loss) as unrealized gains (losses). We are required to adopt this standard for our fiscal 2019 financial statements. Based on the fair value of our net unrealized gain as of April 28, 2018, adopting this standard would be immaterial to our consolidated financial statements. When we adopt this standard, we will reclassify our current net unrealized gains from accumulated other comprehensive income to retained earnings and record a cumulative-effect adjustment which, based on current fair value, will be immaterial to our consolidated financial statements. See Note 7 for additional information on our current investments. In February 2016, the FASB issued a new accounting standard requiring all operating leases that a lessee enters into to be recorded on its balance sheet. Under this standard, the lessee is required to record an asset for the right to use the underlying asset for the lease term and a corresponding liability for the contractual lease payments. This standard will be effective beginning with our fiscal 2020. We are currently reviewing our leases and gathering the necessary information to adopt this standard when it becomes effective. We anticipate that adoption of this standard will have a material impact on our consolidated balance sheet as we have a significant number of operating leases. See Note 10 for additional information on our current operating leases. In June 2016, the FASB issued a new accounting standard that amends current guidance on other-than-temporary impairments of available-for-sale debt securities. This amended standard requires the use of an allowance to record estimated credit losses on these assets when the fair value is below the amortized cost of the asset. This standard also removes the evaluation of the length of time that a security has been in a loss position to avoid recording a credit loss. We are required to adopt this standard for our fiscal 2021 and apply it through a cumulative-effect adjustment to retained earnings. We are still assessing the impact this standard will have on our consolidated financial statements and related disclosures. In October 2016, the FASB issued a new accounting standard that requires entities to recognize the income tax consequences of an intra-entity transfer of assets other than inventory when the transfer occurs. This standard will be applicable beginning with our fiscal 2019. Our current assessment is that this standard will have no impact on our current practices because intra-entity transfers, as the standard defines them, are unlikely to occur. In January 2017, the FASB issued a new accounting standard clarifying the definition of a business with the objective of adding guidance to entities evaluating whether a transaction should be accounted for as an acquisition. This standard will be applicable for our fiscal 2019. Our current assessment is that this standard will not affect our accounting for past or future acquisitions. In January 2017, the FASB issued a new accounting standard simplifying the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. An entity should now perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This standard permits early adoption with the requirement to adopt by our fiscal 2021.We plan to early adopt this standard in fiscal 2019. We do not believe that adoption of this standard will have a material impact on our consolidated financial statements or disclosures. In August 2017, the FASB issued a new accounting standard designed to improve and simplify the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. This standard is intended to better align the recognition and presentation of the effects of hedging instruments with the hedged item in the financial statements, and requires additional disclosures on hedging instruments. This standard will be effective for our fiscal 2020. Based on our current hedging activity, we do not expect this standard to have a material impact on our consolidated financial statements or disclosures. In February 2018, the FASB issued a new accounting standard that allows entities to reclass stranded income tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) from accumulated other comprehensive income to retained earnings in their consolidated financial statements. Under the Tax Act, deferred taxes were adjusted to reflect the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate which left the tax effects on items within accumulated other comprehensive income stranded at the historical tax rate. This standard may be early adopted in any interim period and should be applied either in the period of adoption or retrospectively to each period that was affected by the change in the federal corporate tax rate under the Tax Act. This standard will be effective for our fiscal 2020. We are still assessing the impact this standard will have on our consolidated financial statements and related disclosures.

Acquisitions

12 Months Ended

Apr. 28, 2018

Acquisitions

Acquisitions

Note 2: Acquisitions

Upholstery segment acquisitions

In fiscal 2017, we acquired the La-Z-Boy wholesale business in the United Kingdom and Ireland. Per the terms of the purchase agreement, payment for the business was due 90 business days following the date of acquisition, and accordingly, we recorded a purchase price liability of $16.9 million, which included $1.0 million of contingent consideration at April 29, 2017, related to this acquisition, based on exchange rates at that date. The $15.9 million payment for the business was made in the first quarter of fiscal 2018.

At April 29, 2017, based on exchange rates at that date, we had $4.1 million of intangible assets ($3.6 million of which related to acquired customer relationships) recorded, which will be amortized between one and 15 years on a straight-line basis, and $12.2 million of goodwill, which primarily relates to the expected synergies resulting from the integration of the acquired wholesale business with our domestic wholesale business and the anticipated future benefits of these synergies. The intangible assets, excluding the acquired customer relationships will be amortized and deducted for income tax purposes between one and two years. We recorded the acquisition in our Upholstery segment.

Retail segment acquisitions

During fiscal 2018, we acquired the assets of an independent operator of one La-Z-Boy Furniture Galleries® store in Grand Rapids, Michigan for $0.6 million of cash.

During fiscal 2017, we acquired the assets of four independent operators of 14 La-Z-Boy Furniture Galleries® stores in Nevada, Canada, Pennsylvania, New York and New Jersey for $38.7 million, including $0.2 million of contingent consideration, $35.9 million of cash and $2.6 million of forgiveness of accounts receivable owed by these dealers.

During fiscal 2016, we acquired the assets of four independent operators of 11 La-Z-Boy Furniture Galleries® stores in Colorado, Wisconsin, North and South Carolina, and Ohio for $26.3 million, composed of $23.3 million of cash and $3.0 million of forgiveness of certain of these dealers’ accounts receivable and prepaid expenses.

In both the fiscal 2017 and fiscal 2016 acquisitions above, we agreed to forgive the dealers’ accounts and notes receivable as part of the negotiation of the purchase price with the dealers.

Prior to our retail acquisitions, we licensed the exclusive right to own and operate La-Z-Boy Furniture Galleries® stores (and to use the associated trademarks and trade name) in those markets to the dealers whose assets we acquired, and we reacquired these rights when we purchased the dealers’ other assets. The reacquired rights are indefinite-lived because our Retailer Agreements are perpetual agreements that have no specific expiration date and no renewal options. A Retailer Agreement remains in effect as long as the independent retailer is not in default under the terms of the agreement. The effective settlement of these arrangements resulted in no settlement gain or loss as the contractual terms were at market. We recorded an indefinite-lived intangible asset of $0.3 million, $5.9 million, and $3.1 million in fiscal 2018, fiscal 2017, and fiscal 2016, respectively, related to these reacquired rights. We also recognized $24.9 million and $22.0 million of goodwill in fiscal 2017 and fiscal 2016, respectively, which primarily relates to the expected synergies resulting from the integration of the acquired stores and the anticipated future benefits of these synergies. All of the indefinite-lived intangible assets and goodwill assets for stores acquired in the United States will be amortized and deducted for federal income tax purposes over 15 years. A portion of the indefinite-lived intangible assets and goodwill assets for stores acquired in Canada will be amortized and deducted for income tax purposes on a declining balance until fully amortized.

We based the purchase price allocations on fair values at the dates of acquisition, and summarize them in the following table:

(Amounts in thousands)	Fiscal 2018 Acquisitions			Fiscal 2017 Acquisitions
Current assets	$	595		$	12,175
Goodwill and other intangible assets	255			46,921
Property, plant and equipment	—			1,106

Total assets acquired	850			60,202

Current liabilities acquired	(234		)	(4,023		)
Purchase price liability	—			(15,103		)
Contingent consideration liability	—			(1,204		)

Total liabilities	(234		)	(20,330		)


Total purchase price	$	616		$	39,872

All acquired stores were included in our Retail segment results upon acquisition. None of the above acquisitions were material to our financial position or our results of operations, and, therefore, pro-forma financial information is not presented.

Restricted Cash

12 Months Ended

Apr. 28, 2018

Restricted Cash

Restricted Cash

Note 3: Restricted Cash

We have cash on deposit with a bank as collateral for certain letters of credit. All of our letters of credit have maturity dates within the next twelve months, but we expect to renew some of these letters of credit when they mature.

(Unaudited, amounts in thousands)	4/28/2018		4/29/2017
Cash and cash equivalents	$	134,515	$	141,860
Restricted cash	2,356		8,999

Total cash, cash equivalents and restricted cash	$	136,871	$	150,859

Inventories

12 Months Ended

Apr. 28, 2018

Inventories

Inventories

Note 4: Inventories

(Amounts in thousands)	4/28/2018			4/29/2017
Raw materials	$	86,214		$	83,371
Work in process	12,254			11,320
Finished goods	109,183			101,444

FIFO inventories	207,651			196,135
Excess of FIFO over LIFO	(22,810		)	(21,021		)

Total inventories	$	184,841		$	175,114

Property, Plant and Equipment

12 Months Ended

Apr. 28, 2018

Property, Plant and Equipment

Property, Plant and Equipment

Note 5: Property, Plant and Equipment

(Amounts in thousands)	Estimated Useful Lives	4/28/2018			4/29/2017
Buildings and building fixtures	3 - 40 years	$	200,370		$	196,817
Machinery and equipment	3 - 15 years	147,542			141,071
Information systems and software	3 - 10 years	84,881			76,684
Land	—	14,626			14,565
Land improvements	3 - 30 years	15,362			15,178
Transportation equipment	3 - 10 years	13,929			14,905
Furniture and fixtures	3 - 15 years	20,812			20,390
Construction in progress		23,250			11,247

		520,772			490,857
Accumulated depreciation		(339,890		)	(321,725		)

Net property, plant and equipment		$	180,882		$	169,132

Depreciation expense for the fiscal years ended April 28, 2018, April 29, 2017, and April 30, 2016, was $27.5 million, $25.4 million, and $23.3 million, respectively.

Goodwill and Other Intangible Assets

12 Months Ended

Apr. 28, 2018

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Note 6: Goodwill and Other Intangible Assets

Our goodwill, reacquired rights, and other intangible assets on our consolidated balance sheet relate to our acquisitions of La-Z-Boy Furniture Galleries® stores and our acquisition of the La-Z-Boy wholesale business in the United Kingdom and Ireland. Details about our recent acquisitions can be found in Note 2. Our other intangible assets also include the American Drew trade name.

Our Upholstery reportable segment includes reporting units for La-Z-Boy, our England subsidiary, and our international wholesale business in the United Kingdom and Ireland, our Casegoods segment includes one reporting unit and our Retail segment includes one reporting unit. See Note 1 for additional information on our reporting units for goodwill. We test goodwill annually for impairment, using a qualitative approach for some items of goodwill if possible, and use a quantitative two-step approach for the rest. The key assumptions used in the two-step assessment of our goodwill at April 28, 2018, were a discount rate of 8.9%, a tax rate of 24.5% and a terminal growth rate of 2.0%. The relative fair value of our reporting units significantly exceeds the carrying value of our goodwill as of April 28, 2018. As of April 28, 2018, $62.3 million of our goodwill relates to our Retail segment, and we recorded the remainder in our Upholstery reportable segment as part of our international wholesale business in the United Kingdom and Ireland. We did not have any goodwill impairment in fiscal 2018, fiscal 2017, or fiscal 2016.

The following is a roll-forward of goodwill for the fiscal years ended April 28, 2018, and April 29, 2017:

(Amounts in thousands)	Goodwill
Balance at April 30, 2016	$	37,193
Acquisitions	36,584
Translation adjustment	468

Balance at April 29, 2017	74,245
Acquisitions	—
Translation adjustment	1,009

Balance at April 28, 2018	$	75,254

The following is a roll-forward of our other intangible assets for the fiscal years ended April 28, 2018, and April 29, 2017:

(Amounts in thousands)	Trade Names			Indefinite- Lived Reacquired Rights			Amortizable Reacquired Rights			Other Intangible Assets			Total Other Intangible Assets
Balance at April 30, 2016	$	1,195		$	7,363		$	—		$	—		$	8,558
Acquisitions	—			5,978			829			3,530			10,337
Impairment charges	(40		)	—			—			—			(40		)
Amortization	—			—			(336		)	(127		)	(463		)
Translation adjustment	—			(118		)	31			184			97

Balance at April 29, 2017	1,155			13,223			524			3,587			18,489
Acquisitions	—			255			—			—			255
Impairment charges	—			—			—			—			—
Amortization	—			—			(542		)	(417		)	(959		)
Translation adjustment	—			167			18			220			405

Balance at April 28, 2018	$	1,155		$	13,645		$	—		$	3,390		$	18,190

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Investments

12 Months Ended

Apr. 28, 2018

Investments

Investments

Note 7: Investments

We have current and long-term investments intended to enhance returns on our cash as well as to fund future obligations of our non-qualified defined benefit retirement plan, our executive deferred compensation plan, and our performance compensation retirement plan. We also hold other investments consisting of cost-basis preferred shares of two privately-held companies. Our short-term investments are included in other current assets and our long-term investments are included in other long-term assets on our consolidated balance sheet. The following summarizes our investments at April 28, 2018, and April 29, 2017:

(Amounts in thousands)	4/28/2018		4/29/2017
Short-term investments:
Available-for-sale investments	$	12,832	$	15,040
Trading securities	94		6
Held-to-maturity investments	3,340		1,867

Total short-term investments	16,266		16,913

Long-term investments:
Available-for-sale investments	32,134		31,264
Cost basis investments	10,954		5,500

Total long-term investments	43,088		36,764


Total investments	$	59,354	$	53,677


Investments to enhance returns on cash	$	34,359	$	33,087
Investments to fund compensation/retirement plans	$	14,041	$	13,690
Other investments	$	10,954	$	6,900

The following is a summary of the unrealized gains, unrealized losses, and fair value by investment type at April 28, 2018, and April 29, 2017:

Fiscal 2018

(Amounts in thousands)	Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Equity securities	$	2,142	$	(39	)	$	18,671
Fixed income	29		(418		)	36,312
Mutual funds	—		—			94
Other	72		—			4,277

Total securities	$	2,243	$	(457	)	$	59,354

Fiscal 2017

(Amounts in thousands)	Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Equity securities	$	1,796	$	(83	)	$	13,610
Fixed income	729		(72		)	37,580
Mutual funds	—		—			6
Other	1		(8		)	2,481

Total securities	$	2,526	$	(163	)	$	53,677

The following table summarizes sales of available-for-sale securities (for the fiscal years ended):

	(52 weeks)			(52 weeks)			(53 weeks)
(Amounts in thousands)	4/28/2018			4/29/2017			4/30/2016
Proceeds from sales	$	22,674		$	19,954		$	28,721
Gross realized gains	1,302			926			997
Gross realized losses	(532		)	(455		)	(561		)

At April 28, 2018, the fair value of fixed income available-for-sale securities by contractual maturity was $12.9 million within one year, $21.0 million within two to five years, $1.4 million within six to ten years and $1.0 million thereafter.

Accrued Expenses and Other Current Liabilities

12 Months Ended

Apr. 28, 2018

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Note 8: Accrued Expenses and Other Current Liabilities

(Amounts in thousands)	4/28/2018		4/29/2017
Payroll and other compensation	$	40,467	$	45,229
Accrued product warranty, current portion	12,687		13,191
Customer deposits	31,282		26,595
Other current liabilities	34,285		62,160

Accrued expenses and other current liabilities	$	118,721	$	147,175

The decrease in other current liabilities of $27.9 million is primarily due to the $15.9 million payment for the acquisition of the La-Z-Boy wholesale business in the United Kingdom and Ireland (see Note 2). Per the terms of the purchase agreement, payment for the business was due 90 business days following the date of acquisition, and accordingly, the payment was made in the first quarter of fiscal 2018. In addition, other current liabilities decreased $8.4 million due to payment of a legal settlement (see Note 13 for additional information).

Debt

12 Months Ended

Apr. 28, 2018

Debt

Debt

Note 9: Debt

(Amounts in thousands)	4/28/2018			4/29/2017
Capital leases	$	422		$	515
Less: current portion	(223		)	(219		)

Long-term debt	$	199		$	296

We maintain a revolving credit facility secured primarily by all of our accounts receivable, inventory, and cash deposit and securities accounts. Availability under the agreement fluctuates according to a borrowing base calculated on eligible accounts receivable and inventory. We amended this agreement on December 19, 2017, extending its maturity date to December 19, 2022. The credit agreement includes affirmative and negative covenants that apply under certain circumstances, including a fixed-charge coverage ratio requirement that applies when excess availability under the line is less than certain thresholds. At April 28, 2018, and at April 29, 2017, we were not subject to the fixed-charge coverage ratio requirement, had no borrowings outstanding under the agreement, and had excess availability of $148.1 million of the $150.0 million credit commitment.

Capital leases consist primarily of long-term commitments for the purchase of information technology equipment and have maturities ranging from fiscal 2019 to fiscal 2021. Interest rates range from 2.6% to 7.6%.

Maturities of long-term capital leases, subsequent to April 28, 2018, are $0.2 million in fiscal 2020 and less than $0.1 million in fiscal 2021.

Cash paid for interest during fiscal years 2018, 2017 and 2016 was $0.4 million, $0.5 million, and $0.5 million, respectively.

Operating Leases

12 Months Ended

Apr. 28, 2018

Operating Leases

Operating Leases

Note 10: Operating Leases

We have operating leases for numerous retail facilities, one manufacturing facility, executive and sales offices, warehouses and showrooms, as well as for transportation equipment, information technology, and other equipment. The operating leases expire at various dates through fiscal 2033. We have certain retail facilities which we sublease to outside parties. The total rent liability included in other long-term liabilities as of April 28, 2018, and April 29, 2017, was $13.2 million and $14.0 million, respectively.

The future minimum rentals for all non-cancelable operating leases and future rental income from subleases are as follows (for the fiscal years):

(Amounts in thousands)	Future Minimum Rentals		Future Minimum Income
2019	$	68,108	$	3,200
2020	61,777		3,216
2021	57,237		2,566
2022	46,195		883
2023	35,719		457
2024 and beyond	91,315		912

Total	$	360,351	$	11,234

Rental expense and rental income for operating leases were as follows (for the fiscal years ended):

(Amounts in thousands)	(52 weeks) 4/28/2018		(52 weeks) 4/29/2017		(53 weeks) 4/30/2016
Rental expense	$	71,022	$	68,452	$	62,953
Rental income	3,039		3,604		4,650

Both our rental expense and rental income are included in selling, general, and administrative expense and cost of sales in our consolidated statement of income.

Retirement and Welfare Plans

12 Months Ended

Apr. 28, 2018

Retirement and Welfare Plans

Retirement and Welfare Plans

Note 11: Retirement and Welfare Plans

Voluntary 401(k) retirement plans are offered to eligible employees within certain U.S. operating units. For most operating units, we make matching contributions based on specific formulas. We also make supplemental contributions to this plan for eligible employees based on achievement of operating performance targets.

A performance compensation retirement plan (“PCRP”) is maintained for eligible highly compensated employees. The company contributions to this plan are based on achievement of performance targets. As of April 28, 2018, and April 29, 2017, we had $0.2 million and $0.1 million, respectively, of obligations for this plan included in other current liabilities and $9.5 million and $8.3 million, respectively, included in other long-term liabilities.

We also maintain an executive deferred compensation plan for eligible highly compensated employees. An element of this plan allows contributions for eligible highly compensated employees. As of April 28, 2018, and April 29, 2017, we had $23.2 million and $20.3 million, respectively, of obligations for this plan included in other long-term liabilities. We had life insurance contracts related to this plan and the PCRP at April 28, 2018, and at April 29, 2017, with cash surrender values of $31.6 million and $27.8 million, respectively, which are included in other long-term assets. Mutual funds related to this plan are considered trading securities and are included in other current assets. This plan had $0.1 million in mutual funds at April 28, 2018, and less than $0.1 million in mutual funds at April 29, 2017.

We maintain a non-qualified defined benefit retirement plan for certain former salaried employees. Included in other long-term liabilities were plan obligations of $15.5 million and $16.7 million at April 28, 2018, and April 29, 2017, respectively, which represented the unfunded projected benefit obligation of this plan. During fiscal 2018 and fiscal 2017, the total cost recognized for this plan was $0.8 million and $0.9 million, respectively, which primarily related to interest cost. The actuarial loss recognized in accumulated other comprehensive loss was $0.2 million and the benefit payments during the year were $1.1 million for both fiscal 2018 and fiscal 2017. Benefit payments are scheduled to be approximately $1.1 million annually for the next ten years. The discount rate used to determine the obligations under this plan as of the end of fiscal 2018 and fiscal 2017 was 4.1% and 3.9%, respectively. This plan is not funded and is excluded from the obligation charts and disclosures that follow. We hold available-for-sale marketable securities to fund future obligations of this plan in a Rabbi trust (see Notes 7 and 19 for additional information on these investments). We are not required to fund the non-qualified defined benefit retirement plan in fiscal 2019; however, we have the discretion to make contributions to the Rabbi trust.

We also maintain a defined benefit pension plan for eligible factory hourly employees at our La-Z-Boy operating unit. This plan is closed to new participants, but active participants continue to earn service credit. The measurement dates for the pension plan assets and benefit obligations were April 28, 2018, and April 29, 2017, in fiscal 2018 and fiscal 2017, respectively.

The changes in plan assets and benefit obligations were recognized in accumulated other comprehensive loss as follows (pre-tax) (for the fiscal years ended):

(Amounts in thousands)	4/28/2018			4/29/2017
Beginning of year net actuarial loss	$	36,397		$	36,850
Net current year actuarial (gain) loss	(2,546		)	2,605
Amortization of actuarial loss	(3,120		)	(3,058		)

End of year net actuarial loss	$	30,731		$	36,397

In fiscal 2019, we expect to amortize $2.6 million of unrecognized actuarial losses as a component of pension expense.

The combined net periodic pension cost and retirement costs for retirement plans were as follows (for the fiscal years ended):

	(52 weeks)			(52 weeks)			(53 weeks)
(Amounts in thousands)	4/28/2018			4/29/2017			4/30/2016
Service cost	$	1,316		$	1,278		$	1,358
Interest cost	4,587			4,681			4,938
Expected return on plan assets	(4,818		)	(4,978		)	(4,997		)
Net amortization and deferral	3,120			3,058			3,001

Net periodic pension cost (hourly plan)	4,205			4,039			4,300
401(k)*	7,093			7,124			6,657
PCRP*	1,347			1,488			3,088
Other*	360			51			318

Total retirement costs (excluding non-qualified defined benefit retirement plan)	$	13,005		$	12,702		$	14,363

*Not determined by an actuary

The funded status of the defined benefit pension plan for eligible factory hourly employees was as follows:

(Amounts in thousands)	4/28/2018			4/29/2017
Change in benefit obligation
Benefit obligation at beginning of year	$	114,185		$	116,371
Service cost	1,316			1,278
Interest cost	4,587			4,681
Actuarial (gain) loss	(5,154		)	14
Benefits paid	(5,694		)	(7,728		)
Administrative expenses	(455		)	(431		)

Benefit obligation at end of year	108,785			114,185

Change in plan assets
Fair value of plan assets at beginning of year	109,012			112,484
Actual return on plan assets	2,211			2,387
Employer contributions	2,000			2,300
Benefits paid	(5,694		)	(7,728		)
Administrative expenses	(455		)	(431		)

Fair value of plan assets at end of year	107,074			109,012


Funded status	$	(1,711	)	$	(5,173	)

Amounts included on the consolidated balance sheet related to the defined benefit pension plan for eligible factory hourly employees consist of:

(Amounts in thousands)		4/28/2018			4/29/2017
Other long-term liabilities		$	(1,711	)	$	(5,173	)

The actuarial assumptions for the defined benefit pension plan for eligible factory hourly employees were as follows (for the fiscal years ended):

	4/28/2018		4/29/2017		4/30/2016
Discount rate used to determine benefit obligations	4.2	%	4.1	%	4.1	%
Discount rate used to determine net benefit cost	4.1	%	4.1	%	4.2	%
Long-term rate of return	4.5	%	4.5	%	4.3	%

Consistent with prior years, the discount rate is calculated by matching a pool of high quality bond payments to the plan’s expected future benefit payments as determined by our actuary. The long-term rate of return was determined based on the average rate of earnings expected on the funds invested or to be invested to provide the benefits of these plans. This included considering the trust’s asset allocation, investment strategy, and the expected returns likely to be earned over the life of the plans. This is based on our goal of earning the highest rate of return while maintaining acceptable levels of risk. We strive to have assets within the plan that are diversified so that unexpected or adverse results from one asset class will not have a significant negative impact on the entire portfolio.

Our investment objective is to minimize the volatility of the value of our pension assets relative to pension liabilities and to ensure assets are sufficient to pay plan benefits by matching the characteristics of our assets relative to our liabilities. At the end of fiscal 2018, over 85% of the plan’s assets were invested in fixed rate investments with a duration that approximates the duration of its liabilities, and the remainder of the assets was invested in equity investments.

The investment strategy and policy for the pension plan reflects a balance of risk-reducing and return-seeking considerations. The objective of minimizing the volatility of assets relative to liabilities is addressed primarily through asset-liability matching and asset diversification. The fixed income target asset allocation matches the bond-like and long-dated nature of the pension liabilities. Assets are broadly diversified within all asset classes to achieve adequate risk-adjusted returns while reducing the sensitivity of the pension plan funding status to market interest rates and equity return volatility, and maintaining liquidity sufficient to meet our defined benefit pension plan obligations.

Investments are reviewed at least quarterly and rebalanced as needed. The overall expected long-term rate of return is determined by using long-term historical returns for equity and debt securities in proportion to their weight in the investment portfolio.

The following table presents the fair value of the assets in our defined benefit pension plan for eligible factory hourly employees at April 28, 2018, and April 29, 2017. The various levels of the fair value hierarchy are described in Note 19.

Fiscal 2018

(Amounts in thousands)	Level 1 (a)		Level 2 (a)		Level 3
Cash and equivalents	$	57	$	3,272	$	—
Equity funds	1,449		119		—
Debt funds	—		92,839		—

Total	$	1,506	$	96,230	$	—

(a)There were no transfers between Level 1 and Level 2 during fiscal 2018.

Fiscal 2017

(Amounts in thousands)	Level 1 (b)		Level 2 (b)		Level 3
Cash and equivalents	$	44	$	3,730	$	—
Equity funds	1,517		181		—
Debt funds	—		93,949		—

Total	$	1,561	$	97,860	$	—

(b)There were no transfers between Level 1 and Level 2 during fiscal 2017.

Level 1 retirement plan assets include U.S. currency held by a designated trustee and equity funds of common and preferred securities issued by U.S. and non-U.S. corporations. These equity funds are traded actively on exchanges and price quotes for these shares are readily available.

Cash and equivalents of commingled funds generally valued using observable market data are categorized as Level 2 assets. Equity funds categorized as Level 2 include foreign issued equities that are valued using a bid evaluation. Debt funds categorized as Level 2 consist of corporate fixed income securities issued by U.S. and non-U.S. corporations and fixed income securities issued directly by the U.S. Treasury or by government-sponsored enterprises which are valued using a bid evaluation process with bid data provided by independent pricing sources using observable market data.

We hold common trust funds composed of shares or units in open ended funds with active issuances and redemptions. The value of these funds is determined based on the net asset value of the funds, the underlying assets of which are publicly traded on exchanges. In accordance with recently issued accounting standards, we no longer include these investments in our asset leveling using the fair value hierarchy. The fair value of the investments measured using net asset value at April 28, 2018 and April 29, 2017 was $9.3 million and $9.6 million, respectively.

Our funding policy is to contribute to our defined benefit pension plan amounts sufficient to meet the minimum funding requirement as defined by employee benefit and tax laws, plus additional amounts which we determine to be appropriate. During both fiscal 2018 and fiscal 2017, we voluntarily contributed $2.0 million and $2.3 million, respectively, to our defined benefit pension plan. We currently expect to voluntarily contribute approximately $7 million to our defined benefit pension plan during fiscal 2019.

The expected benefit payments by our defined benefit pension plan for eligible factory hourly employees for each of the next five fiscal years and for periods thereafter are presented in the following table:

(Amounts in thousands)	Benefit Payments
2019	$	6,620
2020	6,723
2021	6,830
2022	6,926