Off-Balance Sheet Arrangements and Other Commitments, Contingencies and Contractual Obligations

Except as indicated below, we do not utilize or employ any off-balance sheet arrangements, including special-purpose entities, in operating our business. As such, we do not maintain any (i) retained or contingent interests, (ii) derivative instruments, or (iii) variable interests which could serve as a source of potential risk to our future liquidity, capital resources and results of operations.

We may, from time to time in the ordinary course of business, provide guarantees on behalf of selected affiliated entities or become contractually obligated to perform in accordance with the terms and conditions of certain business agreements. The nature and extent of these guarantees and obligations may vary based on our underlying relationship with the benefiting party and the business purpose for which the guarantee or obligation is being provided. The only such program in place at both June 30, ~~2013~~2016 and June 30, 2015 was for our consumer credit ~~program.~~program described below.

Ethan Allen Consumer Credit Program

The terms and conditions of our consumer credit program, which is financed and administered by a third-party financial institution on a non-recourse basis to Ethan Allen, are set forth in an agreement between the Company and that financial service provider (the “Program Agreement”). which was last amended effective January 2014. Any independent retailer choosing to participate in the consumer credit program is required to enter into a separate agreement with that same third-party financial institution which sets forth the terms and conditions under which the retailer is to perform in connection with its offering of consumer credit to its customers (the “Retailer Agreement”). We have obligated ourselves on behalf of any independent retailer choosing to participate in our consumer credit program by agreeing, in the event of default, breach, or failure of the independent retailer to perform under such Retailer Agreement, to take on certain responsibilities of the independent retailer, including, but not limited to, delivery of goods and reimbursement of customer deposits. Customer receivables originated by independent retailers remain non-recourse to Ethan Allen. ~~Our obligation remains in effect for the term of the~~The Program Agreement ~~that expires in~~will terminate on July ~~2014. We expect to renew or replace the current program with~~31, 2019, but includes a ~~similar program during fiscal 2014.~~provision for automatic one-year renewals unless either party gives notice of termination. While the maximum potential amount of future payments (undiscounted) that we could be required to make under this obligation is indeterminable, recourse provisions exist that would enable us to recover, from the independent retailer, any amount paid or incurred by us related to our performance. Based on the underlying creditworthiness of our independent retailers, including their historical ability to satisfactorily perform in connection with the terms of our consumer credit program, we believe this obligation will expire without requiring funding by us. To ensure funding for delivery of products sold, the terms of ~~this agreement~~the Program Agreement also contain a right for the ~~credit card issuer~~financial services provider to demand from the Company collateral at a variable rate based on the volume of ~~up to $12 million~~program sales if the Company does not meet certain covenants. ~~As of~~At June 30 ~~2013,~~of 2016 and 2015, no collateral was required under the ~~Company had established a restricted cash and investment collateral account of $6 million to satisfy the current requirement under this demand.~~Program Agreement.

~~Product Warranties~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Product Warranties

Our products, including our case goods, upholstery and home accents, generally carry explicit product warranties that extend from three to seven years and are provided based on terms that are generally accepted in the industry. All of our domestic independent retailers are required to enter into, and perform in accordance with the terms and conditions of, a warranty service agreement. We record provisions for estimated warranty and other related costs at time of sale based on historical warranty loss experience and make periodic adjustments to those provisions to reflect actual experience. On rare occasion, certain warranty and other related claims involve matters of dispute that ultimately are resolved by negotiation, arbitration or litigation. In certain cases, a material warranty issue may arise which is beyond the scope of our historical experience. We provide for such warranty issues as they become known and are deemed to be both probable and estimable. It is reasonably possible that, from time to time, additional warranty and other related claims could arise from disputes or other matters beyond the scope of our historical experience. As of June 30, ~~2013,~~2016 and 2015, the Company’s product warranty liability totaled ~~$0.8 million.~~$1.2 million and $1.0 million, respectively.

Impact of Inflation

We believe inflation had an impact on our business the last three fiscal years but we have generally been able to create operational efficiencies, seek lower cost alternatives, or raise selling prices in order to offset increases in product and operating costs. It is possible in the future that we will not be successful in our efforts to offset the impacts from inflation.

Business Outlook

We continue to strengthen our vertically integrated structure from concept of idea, to engineering, to manufacturing, to retail and logistics. On the manufacturing side, our objective is to maintain strong manufacturing capabilities in North America, which we believe is a long-term competitive advantage that will allow us to advance our objectives of maintaining short order times, exceptional quality and improving capacity to ship custom made to order items more quickly, which in turn will allow us to grow our business. In September 2015, the Company announced the planned doubling of its upholstery manufacturing facility in Mexico. The ~~home furnishings industry remains~~expansion has begun and is expected to be completed within the next two years.

Beginning in fiscal 2014, we have been undergoing a ~~slow recovery period following~~major transformation of our product offerings, which is intended to refresh over 70% of our products with the ~~’Great Recession’. Many macroeconomic factors~~completion of the most current phase during the summer through fall of 2016. We believe that we are well positioned to leverage all the actions we have improved including unemployment, consumer confidence, and housing related market indicators in the U.S. However, the U.S. home furnishings industry remains highly competitive and promotional. We remain cautiously optimistic about our performance due to the many strong programs already in place and others we currently plan to introduce in the coming months.taken.

We expect the home furnishings industry to remain extremely competitive with respect to both the sourcing of products and the wholesale and retail sale of those products for the foreseeable future. Domestic manufacturers continue to face pricing pressures because of the lower manufacturing costs in some other countries, particularly within Asia. While we ~~have~~ also ~~turned to~~utilize overseas sourcing ~~to remain competitive,~~for approximately one quarter of our products, we choose to differentiate ourselves by maintaining a substantial North American manufacturing base, where we can leverage our vertically integrated structure to our advantage. We continue to believe that a balanced approach to product sourcing, which includes ~~the domestic manufacture~~our own North American manufacturing of ~~certain~~about 75% of our product offerings coupled with the import of other selected products, provides the greatest degree of flexibility and is the most effective approach to ensuring that acceptable levels of quality, service and value are attained.

We therefore remain cautiously optimistic about our performance due to the many strong programs already in place and others we currently plan to introduce in the coming months. Our retail strategy involves (i) a continued focus on providing new product introductions, a wide array of product solutions, and superior interior design solutions through our large staff of interior design professionals, (ii) continuing strong advertising and marketing campaigns to get our message across and to continue ~~to broaden~~broadening our customer base, (iii) the opening of new or relocated design centers in more prominent locations, ~~while~~and encouraging independent retailers to do the same, (iv) leveraging the use of technology and personal service within our retail network and online through www.ethanallen.com, and (v) further expansion internationally. We believe this strategy provides an opportunity to grow our business.

Further discussion of the home furnishings industry has been included underItem 1 of this Annual Report.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Where You Can Find Other Information

Our website iswww.ethanallen.com. Information contained on our website is not part of this Annual Report on Form 10-K. Information that we furnish or file with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to, or exhibits included in, these reports are available for download, free of charge, on our website soon after such reports are filed with or furnished to the SEC. Our SEC filings, including exhibits filed therewith, are also available on the SEC’s website at www.sec.gov. You may obtain and copy any document we furnish or file with the SEC at the SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the SEC’s public reference facilities by calling the SEC at 1-800-SEC-0330. You may request copies of these documents, upon payment of a duplicating fee, by writing to the SEC at its principal office at 100 F Street, NE, Room 1580, Washington, D.C. 20549.

Recent Accounting Pronouncements

See Note 1 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

~~In February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-02,~~~~“Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”~~. This ASU requires items reclassified in their entirety to net income from accumulated other comprehensive income in the same reporting period to be reported separately from other amounts in other comprehensive income, either on the face of the financial statements or in the notes to the financial statements. We adopted this ASU in the fourth quarter of fiscal 2013 and it had no material impact on our consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks relating to fluctuations in interest rates and foreign currency exchange rates.

Interest rate risk exists primarily through our borrowing activities. We utilize United States dollar denominated borrowings to fund substantially all our working capital and investment needs. Short-term debt, if required, is used to meet working capital requirements and long-term debt is generally used to finance long-term investments. There is inherent rollover risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements.

For floating-rate obligations, interest rate changes do not affect the fair value of the underlying financial instrument but would impact future earnings and cash flows, assuming other factors are held constant. Conversely, for fixed-rate obligations, interest rate changes affect the fair value of the underlying financial instrument but would not impact earnings or cash flows. At June 30, ~~2013,~~2016, we had no$41.2 million of floating-rate debt obligations ~~outstanding. As~~outstanding under our Facility. We currently do not engage in any interest rate hedging activity and we have no intention of ~~that same date, our fixed-rate debt obligations primarily consisted~~doing so in the foreseeable future. Based on the average interest rate of the ~~Senior Notes issued on September 27, 2005. The estimated fair value of~~loans under the ~~Senior Notes as of~~Facility during the quarter ended June 30, ~~2013 was $133.9 million as compared~~2016, and to the extent that borrowings were outstanding, a ~~carrying value~~10% change in the interest rate would not have a material effect on our consolidated results of ~~$129.2 million.~~operations and financial condition.

Foreign currency exchange risk is primarily limited to our operation of ~~five~~ Ethan Allen operated retail design centers located in Canada, ~~two~~one distribution center in Belgium, and our plants in Mexico and Honduras, as substantially all purchases of imported parts and finished goods are denominated in United States dollars. As such, gains or losses resulting from market changes in the value of foreign currencies have not had, nor are they expected to have, a material effect on our consolidated results of operations. A decrease in the value of foreign currencies (in particular Asian) relative to the United States dollar may affect the profitability of our vendors but as we employ a balanced sourcing strategy, we believe any impact would be moderate relative to peers in the industry.

Item 8. Financial Statements and Supplementary Data

Our Consolidated Financial Statements and Supplementary Data are listed in Item 15 of this Annual Report.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Ethan Allen Interiors Inc.:

We have audited the accompanying consolidated balance sheets of Ethan Allen Interiors Inc. and subsidiaries (the Company) as of June 30, ~~2013~~2016 and ~~2012,~~2015, and the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, ~~2013.~~2016. We also have audited the Company’s internal control over financial reporting as of June 30, ~~2013,~~2016, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ethan Allen Interiors Inc. and subsidiaries as of June 30, ~~2013~~2016 and ~~2012,~~2015, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, ~~2013,~~2016, in conformity with U.S. generally accepted accounting principles. Also in our opinion, Ethan Allen Interiors Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of June 30, ~~2013,~~2016, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway ~~Commission.~~Commission (COSO).

/s/ KPMG LLP

~~Stamford, Connecticut~~
August ~~16, 2013~~8, 2016

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

~~Consolidated Balance Sheets~~

~~June 30, 2013 and 2012~~
Consolidated Balance Sheets
~~(In thousands, except share data)~~

2013

2012

ASSETS

Current assets:

Cash and cash equivalents
$ 72,601 $ 79,721
Marketable securities
15,529 9,005
Accounts receivable, less allowance for doubtful accounts of $1,230 at June 30, 2013 and $1,250 at June 30, 2012
12,277 14,919
Inventories
137,256 155,739
Prepaid expenses and other current assets
22,907 23,408
Total current assets
260,570 282,792
Property, plant and equipment, net
291,672 295,695
Goodwill and other intangible assets
45,128 45,128
Restricted cash and investments
15,433 15,416
Other assets
4,482 5,757
Total assets
$ 617,285 $ 644,788
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Current maturities of long-term debt
$ 480 $ 250
Customer deposits
59,098 65,465
Accounts payable
22,995 27,315
Accrued compensation and benefits
27,205 30,534
Accrued expenses and other current liabilities
23,161 27,513
Total current liabilities
132,939 151,077
Long-term debt
130,809 154,250
Other long-term liabilities
19,180 17,593
Total liabilities
282,928 322,920
Shareholders' equity:

Class A common stock, par value $0.01; 150,000,000 shares authorized; 48,557,973 shares issued at June 30, 2013 and 48,485,704 shares issued at June 30, 2012
486 485
Class B common stock, par value $0.01; 600,000 shares authorized; none issued
- -
Preferred stock, par value $0.01; 1,055,000 shares authorized; none issued
- -
Additional paid-in-capital
363,938 361,165

Less: Treasury stock (at cost), 19,650,385 shares at June 30, 2013 and 19,650,385 shares at June 30, 2012
(584,041 ) (584,041 )
Retained earnings
553,083 542,918
Accumulated other comprehensive income
684 1,141
Total Ethan Allen Interiors Inc. shareholders' equity
334,150 321,668
Noncontrolling interests
207 200
Total shareholders equity
334,357 321,868
Total liabilities and shareholders' equity
$ 617,285 $ 644,788
~~See accompanying notes to consolidated financial statements.~~
June 30, 2016 and 2015
(In thousands, except share data)

	2016			2015
ASSETS
Current assets:
Cash and cash equivalents	$	52,659		$	76,182
Marketable securities		-			2,198
Accounts receivable, less allowance for doubtful accounts of $1,639 at June 30, 2016 and $1,386 at June 30, 2015		9,467			12,547
Inventories		162,323			151,916
Prepaid expenses and other current assets		23,755			27,831
Total current assets		248,204			270,674
Property, plant and equipment, net		273,615			277,035
Goodwill and other intangible assets		45,128			45,128
Restricted cash and investments		7,820			8,010
Other assets		2,642			5,130
Total assets	$	577,409		$	605,977
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt	$	3,001		$	3,034
Customer deposits		60,958			67,970
Accounts payable		15,437			18,946
Accrued compensation and benefits		22,067			26,896
Accrued expenses and other current liabilities		21,884			23,816
Total current liabilities		123,347			140,662
Long-term debt		38,837			73,203
Other long-term liabilities		23,023			21,577
Total liabilities		185,207			235,442
Shareholders' equity:
Class A common stock, par value $0.01; 150,000,000 shares authorized; 48,921,544 shares issued at June 30, 2016 and 48,884,5866 shares issued at June 30, 2015		489			489
Class B common stock, par value $0.01; 600,000 shares authorized; none issued		-			-
Additional paid-in-capital		374,972			370,914
Less: Treasury stock (at cost), 21,175,416 shares at June 30, 2016 and 20,477,617 shares at June 30, 2015		(624,932	)		(605,586	)
Retained earnings		646,315			607,079
Accumulated other comprehensive income		(4,846	)		(2,638	)
Total Ethan Allen Interiors Inc. shareholders' equity		391,998			370,258
Noncontrolling interests		204			277
Total shareholders' equity		392,202			370,535
Total liabilities and shareholders' equity	$	577,409		$	605,977

~~For Years Ended June 30, 2013, 2012, and 2011~~

~~(In thousands, except share data)~~

2013

2012

2011

Net sales
$ 729,083 $ 729,373 $ 678,960
Cost of sales
330,734 339,085 329,500
Gross profit
398,349 390,288 349,460
Selling, general and administrative expenses
337,912 340,591 317,527
Operating income
60,437 49,697 31,933
Interest and other income (expense)
(1,485 ) 562 5,564
Interest and other related financing costs
8,778 9,020 11,126
Income before income taxes
50,174 41,239 26,371
Income tax expense (benefit)
17,696 (8,455 ) (2,879 )
Net income
$ 32,478 $ 49,694 $ 29,250

Per share data:

Net income per basic share
$ 1.13 $ 1.72 $ 1.02
Basic weighted average common shares
28,864 28,824 28,758
Net income per diluted share
$ 1.11 $ 1.71 $ 1.01
Diluted weighted average common shares
29,239 29,109 28,966
Dividends declared per common share
$ 0.77 $ 0.30 $ 0.22

Comprehensive income:

Net income
$ 32,478 $ 49,694 $ 29,250
Other comprehensive income

Curency translation adjustment
(506 ) (1,154 ) 917
Other
56 (38 ) 97
Other comprehensive income (loss) net of tax
(450 ) (1,192 ) 1,014
Comprehensive income
$ 32,028 $ 48,502 $ 30,264

See accompanying notes to consolidated financial statements.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

~~Consolidated Statements of Cash Flows~~

~~For Years Ended June 30, 2013, 2012, and 2011~~

~~(In thousands)~~
Consolidated Statements of Comprehensive Income
For Years Ended June 30, 2016, 2015, and 2014
(In thousands, except share data)

2013

2012

2011

Operating activities:

Net income
$ 32,478 $ 49,694 $ 29,250
Adjustments to reconcile net income to netcash provided by operating activities:

Depreciation and amortization
18,008 18,581 20,816
Compensation expense related to share-based payment awards
1,401 1,702 931
Provision (benefit) for deferred income taxes
2,767 (19,522 ) (63 )
Loss on disposal of property, plant and equipment
3,717 1,648 325
Other
1,824 (42 ) (132 )

Change in operating assets and liabilities, net ofeffects of acquired businesses:

Accounts receivable
1,922 (456 ) 187
Inventories
18,569 (12,531 ) (5,278 )
Prepaid and other current assets
1,070 (755 ) 4,407
Customer deposits
(6,951 ) 2,331 7,861
Accounts payable
(4,320 ) 357 5,595
Accrued expenses and other current liabilities
(7,839 ) (2,125 ) (884 )
Other assets and liabilities
(1,345 ) (1,181 ) 147
Net cash provided by operating activities
61,301 37,701 63,162

Investing activities:

Proceeds from the disposal of property, plant & equipment
3,283 1,873 3,196
Change in restricted cash and investments
(17 ) 975 927
Capital expenditures
(19,005 ) (22,884 ) (9,094 )
Acquisitions
(770 ) (520 ) (2,957 )
Purchases of marketable securities
(18,247 ) (3,647 ) (9,466 )
Sales of marketable securities
11,165 7,230 7,319
Other investing activities
1,990 816 432
Net cash used in investing activities
(21,601 ) (16,157 ) (9,643 )

Financing activities:

Payments on long-term debt and capital lease obligations
(26,104 ) (12,204 ) (37,887 )
Purchases and retirements of company stock
- (1,350 ) (5,377 )
Payment of cash dividends
(22,220 ) (8,062 ) (5,754 )
Other financing activities
1,758 738 (61 )
Net cash used in financing activities
(46,566 ) (20,878 ) (49,079 )
Effect of exchange rate changes on cash
(254 ) 536 227
Net increase (decrease) in cash & cash equivalents
(7,120 ) 1,202 4,667
Cash & cash equivalents - beginning of year
79,721 78,519 73,852
Cash & cash equivalents - end of year
$ 72,601 $ 79,721 $ 78,519

Supplemental cash flow information:

Income taxes paid (received)
$ 19,046 $ 14,731 $ (8,595 )
Interest paid
$ 8,626 $ 8,693 $ 10,838
Non-cash capital lease obligations incurred
$ 927 $ 1,590 $ -

	2016			2015			2014
Net sales	$	794,202		$	754,600		$	746,659
Cost of sales		351,966			343,437			340,163
Gross profit		442,236			411,163			406,496
Selling, general and administrative expenses		353,057			345,229			336,860
Operating income		89,179			65,934			69,636
Interest and other income (expense)		395			(3,333	)		276
Interest and other related financing costs		1,618			5,918			7,510
Income before income taxes		87,956			56,683			62,402
Income tax expense		31,319			19,541			19,471
Net income	$	56,637		$	37,142		$	42,931

Per share data:
Net income per basic share	$	2.02		$	1.29		$	1.48
Basic weighted average common shares		28,072			28,874			28,918
Net income per diluted share	$	2.00		$	1.27		$	1.47
Diluted weighted average common shares		28,324			29,182			29,276
Dividends declared per common share	$	0.62		$	0.50		$	0.40

Comprehensive income:
Net income	$	56,637		$	37,142		$	42,931
Other comprehensive income
Curency translation adjustment		(2,208	)		(3,308	)		(77	)
Other		27			78			105
Other comprehensive income (loss) net of tax		(2,181	)		(3,230	)		28
Comprehensive income	$	54,456		$	33,912		$	42,959

See accompanying notes to consolidated financial statements.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

~~Consolidated Statements of Shareholders' Equity~~

~~For Years Ended June 30, 2013, 2012, and 2011~~

~~(In thousands, except share data)~~
Consolidated Statements of Cash Flows
For Years Ended June 30, 2016, 2015, and 2014
(In thousands)

Common
Stock

Additional
Paid-in
Capital

Treasury
Stock

Other
Comprehensive
Income

Retained
Earnings

Non-
Controlling
Interests

Total

Balance at June 30, 2010
483 358,722 (581,331 ) 1,244 479,341 - 258,459
Stock issued on share-based awards
1 75 - - - - 76
Compensation expense associated with share-based awards
- 931 - - - - 931
Purchase/retirement shares of company stock
- - (2,787 ) - - - (2,787 )
Issuance of treasury shares for 401k match
- - 1,427 - (345 ) - 1,082
Dividends declared on common stock
- - - - (6,338 ) - (6,338 )
Comprehensive income
- - - 1,014 29,250 - 30,264
Balance at June 30, 2011
484 359,728 (582,691 ) 2,258 501,908 - 281,687
Stock issued on share-based awards
1 224 - - - - 225
Compensation expense associated with share-based awards
- 1,702 - - - - 1,702
Tax benefit associated with exercise of share based awards
- (489 ) - - - - (489 )
Purchase/retirement of company stock
- - (1,350 ) - - - (1,350 )
Dividends declared on common stock
- - - - (8,684 ) - (8,684 )
Increase from business combination
275 275
Comprehensive income (loss)
- - - (1,117 ) 49,694 (75 ) 48,502
Balance at June 30, 2012
485 361,165 (584,041 ) 1,141 542,918 200 321,868
Stock issued on share-based awards
1 1,398 - - - - 1,399
Compensation expense associated with share-based awards
- 1,401 - - - - 1,401
Tax benefit associated with exercise of share based awards
- (26 ) - - - - (26 )
Dividends declared on common stock
- - - - (22,313 ) - (22,313 )
Comprehensive income (loss)
- - - (457 ) 32,478 7 32,028
Balance at June 30, 2013
$ 486 $ 363,938 $ (584,041 ) $ 684 $ 553,083 $ 207 $ 334,357

	2016			2015			2014
Operating activities:
Net income	$	56,637		$	37,142		$	42,931
Adjustments to reconcile net income to netcash provided by operating activities:
Depreciation and amortization		19,353			19,142			17,930
Compensation expense related to share-based payment awards		2,356			1,236			1,325
Provision (benefit) for deferred income taxes		671			3,923			(3,032	)
Restructuring and impairment charge		-			784			-
Loss (gain) on disposal of property, plant and equipment		(2,267	)		4,180			2,093
Other		(1,295	)		3,606			415

Change in operating assets and liabilities, net ofeffects of acquired businesses:
Accounts receivable		2,926			(559	)		(149	)
Inventories		(9,982	)		(5,036	)		(9,019	)
Prepaid and other current assets		5,113			(9,628	)		4,269
Customer deposits		(7,275	)		7,517			586
Accounts payable		(3,509	)		(5,349	)		1,300
Accrued expenses and other current liabilities		(6,550	)		(2,113	)		969
Other assets and liabilities		2,191			261			271
Net cash provided by operating activities		58,369			55,106			59,889

Investing activities:
Proceeds from the disposal of property, plant & equipment		8,073			9,103			3,381
Change in restricted cash and investments		190			497			6,926
Capital expenditures		(22,967	)		(19,787	)		(19,305	)
Acquisitions		(165	)		(1,991	)		-
Purchases of marketable securities		-			-			(18,268	)
Sales of marketable securities		2,150			15,430			14,883
Other investing activities		193			176			325
Net cash provided by (used in) investing activities		(12,526	)		3,428			(12,058	)

Financing activities:
Borrowings from revolving credit and term loan facilities		-			75,000			-
Payments on long-term debt and capital lease obligations		(34,840	)		(133,710	)		(480	)
Purchases and retirements of company stock		(19,346	)		(17,552	)		-
Payment of cash dividends		(16,646	)		(13,348	)		(11,297	)
Other financing activities		1,718			(1,353	)		525
Net cash used in financing activities		(69,114	)		(90,963	)		(11,252	)
Effect of exchange rate changes on cash		(252	)		(565	)		(4	)
Net increase (decrease) in cash & cash equivalents		(23,523	)		(32,994	)		36,575
Cash & cash equivalents - beginning of year		76,182			109,176			72,601
Cash & cash equivalents - end of year	$	52,659		$	76,182		$	109,176

Supplemental cash flow information:
Income taxes paid	$	29,003		$	18,250		$	20,928
Interest paid	$	1,352		$	7,181		$	7,085
Non-cash capital lease obligations incurred	$	-		$	1,700		$	-

See accompanying notes to consolidated financial statements.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity

For Years Ended June 30, 2016, 2015, and 2014

(In thousands, except share data)

									Accumulated
			Additional						Other						Non-
	Common		Paid-in			Treasury			Comprehensive			Retained			Controlling
	Stock		Capital			Stock			Income			Earnings			Interests			Total
Balance at June 30, 2013		486		363,938			(584,041	)		684			553,083			207			334,357

Stock issued on share-based awards		-		357			-			-			-			-			357
Compensation expense associated with share-based awards		-		1,325			-			-			-			-			1,325
Tax benefit associated with exercise of share based awards		-		113			-			-			-			-			113
Dividends declared on common stock		-		-			-			-			(11,619	)		-			(11,619	)
Capital distribution		-		-			-			-			-			(25	)		(25	)
Comprehensive income (loss)		-		-			-			(42	)		42,931			70			42,959
Balance at June 30, 2014		486		365,733			(584,041	)		642			584,395			252			367,467

Stock issued on share-based awards		3		4,117			-			-			-			-			4,120
Compensation expense associated with share-based awards		-		1,236			-			-			-			-			1,236
Tax benefit associated with exercise of share based awards		-		(172	)		-			-			-			-			(172	)
Purchase/retirement of company stock		-		-			(21,545	)		-			-			-			(21,545	)
Dividends declared on common stock		-		-			-			-			(14,458	)		-			(14,458	)
Capital distribution		-		-			-			-			-			(25	)		(25	)
Comprehensive income (loss)		-		-			-			(3,280	)		37,142			50			33,912
Balance at June 30, 2015		489		370,914			(605,586	)		(2,638	)		607,079			277			370,535

Stock issued on share-based awards		-		734			-			-			-			-			734
Compensation expense associated with share-based awards		-		2,356			-			-			-			-			2,356
Tax benefit associated with exercise of share based awards		-		968			-			-			-			-			968
Purchase/retirement of company stock		-		-			(19,346	)		-			-			-			(19,346	)
Dividends declared on common stock		-		-			-			-			(17,401	)		-			(17,401	)
Capital distribution		-		-			-			-			-			(100	)		(100	)
Comprehensive income (loss)		-		-			-			(2,208	)		56,637			27			54,456
Balance at June 30, 2016	$	489	$	374,972		$	(624,932	)	$	(4,846	)	$	646,315		$	204		$	392,202

See accompanying notes to consolidated financial statements.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, ~~2013, 2012~~2016, 2015 and ~~2011~~2014

(1) Summary of Significant Accounting Policies

Basis of Presentation

The following is a summary of significant accounting policies of Ethan Allen Interiors Inc. ~~("Interiors") is a Delaware corporation incorporated on May 25, 1989. The consolidated financial statements include the accounts of Interiors,~~, and its wholly-owned ~~subsidiary Ethan Allen Global, Inc. ("Global"), and Global’s~~ subsidiaries (collectively "We," "Us," "Our," "Ethan Allen" or the "Company"). All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements. ~~All~~Our consolidated financial statements also include the accounts of ~~Global’s capital stock is owned by Interiors,~~an entity in which ~~has no~~we are a majority shareholder with the power to direct the activites that most significantly impact the entity’s performance. Noncontrolling interest amounts in the entity are immaterial and included in the Consolidated Statement of Comprehensive Income within interest and other income, net.

On April 7, 2015 the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The new standard classifies debt issuance costs as a deduction from the debt liability, consistent with debt discounts. Prior to the issuance of ASU 2015-03, these costs were classified as assets. We adopted the provisions of ASU 2015-03 beginning in July 2015 and prior period amounts have been reclassified to conform to the current period presentation. As of June 30, 2015, $0.3 million of debt issuance costs were reclassified in the consolidated balance sheet from other noncurrent assets to current portion of long-term debt and $1.0 million was reclassified from other noncurrent assets to long-term debt, less current portion. The adoption of ASU 2015-03 did not impact our consolidated statements of comprehensive income, or ~~operating results other than those associated with its investment in Global.~~our consolidated statements of cash flows.

Nature of Operations

We are a leading manufacturer and retailer of quality home furnishings and ~~accessories,~~accents, offering complimentary interior design service to our clients and sell a full ~~complement~~range of ~~home decorating~~furniture products and ~~design solutions.~~decorative accents. We sell our products through one of the country’s largest home furnishing retail networks ~~with~~and at June 30, 2016 there were a total of ~~295~~296 retail design centers, of which ~~147~~143 are Company operated and ~~148~~153 are independently operated. Nearly all of our Company operated retail design centers are located in the United States, with the remaining Company operated design centers located in ~~Canada and Belgium.~~Canada. The majority of the independently operated design centers are in Asia, with the remaining independently operated design centers located throughout the United States, ~~Canada and~~ the Middle ~~East.~~East and Europe. We have ~~eight~~nine manufacturing facilities, one of which includes a separate sawmill operation, located throughout the United States, and one plant each in Mexico and ~~one in~~ Honduras.

Use of Estimates

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. ~~Due to~~Because of the inherent uncertainty involved in making those estimates, actual results could differ from those estimates. Areas in which significant estimates have been made include, but are not limited to, revenue recognition, the allowance for doubtful accounts receivable, inventory obsolescence, tax valuation allowances, useful lives for property, plant and equipment and definite lived intangible assets, goodwill and indefinite lived intangible asset impairment analyses, the evaluation of uncertain tax positions and the fair value of assets acquired and liabilities assumed in business combinations.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Reclassifications

Certain reclassifications have been made to prior years’ financial statements in order to conform to the current year’s presentation. These changes were made for disclosure purposes only and did not have any impact on previously reported results.

Cash Equivalents

Cash and short-term, ~~highly-liquid~~highly liquid investments with original maturities of three months or less are considered cash and cash equivalents. We invest excess cash in money market accounts, short-term commercial paper, and U.S. Treasury Bills.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market. Cost is determined based solely on those charges incurred in the acquisition and production of the related inventory (i.e. material, labor and manufacturing overhead costs).

Marketable Securities

The Company’s investments are classified at the time of purchase as either available-for-sale or held-to-maturity, and reassessed as of each balance sheet date. Our marketable securities consist of available-for-sale securities, and are marked-to-market based on prices provided by our investment advisors, with unrealized gains and temporary unrealized losses reported as a component of other comprehensive income net of tax, until realized. When realized, the Company recognizes gains and losses on the sales of the securities on a specific identification method and includes the realized gains or losses in other income, net, in the consolidated statements of operations. The Company includes interest, dividends, and amortization of premium or discount on securities classified as available-for-sale in other income, net in the consolidated statements of operations. We also evaluate our available-for-sale securities to determine whether a decline in fair value of a security below the amortized cost basis is other than temporary. Should the decline be considered other than temporary, we write down the cost of the security and include the loss in earnings. In making this determination we consider such factors as the reason for and significance of the decline, current economic conditions, the length of time for which there has been an unrealized loss, the time to maturity, and other relevant information. Available-for-sale securities are classified as either short-term or long-term based on management’s intention of when to sell the securities.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation of plant and equipment is provided over the estimated useful lives of the respective assets on a straight-line basis. Estimated useful lives of the respective assets typically range from twenty to forty years for buildings and improvements and from three to twenty years for machinery and equipment. Leasehold improvements are amortized based on the underlying lease term, or the asset’s estimated useful life, whichever is shorter.

Operating Leases

We record expense for operating leases by recognizing the minimum lease payments on a straight-line basis, beginning on the date that the lessee takes possession or control of the property. A number of our operating lease agreements contain provisions for tenant improvement allowances, rent holidays, rent concessions, and/or rent escalations.

Incentive payments received from landlords are recorded as deferred lease incentives and are amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. When the terms of an operating lease provide for periods of free rent, rent concessions, and/or rent escalations, we establish a deferred rent liability for the difference between the scheduled rent payment and the straight-line rent expense recognized. This deferred rent liability is also amortized over the underlying lease term on a straight-line basis as a reduction of rent expense.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Retail Design Center Acquisitions

We account for the acquisition of retail design centers and related assets with the purchase method. Accounting for these transactions as purchase business combinations requires the allocation of purchase price paid to the assets acquired and liabilities assumed based on their fair values as of the date of the acquisition. The amount paid in excess of the fair value of net assets acquired is accounted for as goodwill.

Goodwill and Other Intangible Assets

Our intangible assets are comprised primarily of goodwill, which represents the excess of cost over the fair value of net assets acquired, and trademarks. We determined these assets have indefinite useful lives, and are therefore not amortized.

Impairment of Long-Lived Assets and Goodwill

Goodwill and other indefinite-lived intangible assets are evaluated for impairment on an annual basis during the fourth quarter of each fiscal year, and between annual tests whenever events or circumstances indicate that the carrying value of the goodwill or other intangible asset may exceed its fair value. When testing goodwill for impairment, we may assess qualitative factors for some or all of our reporting units to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, we may bypass this qualitative assessment for some or all of our reporting units and determine whether the carrying value exceeds the fair value using a quantitative assessment as described below.

The recoverability of long-lived assets are evaluated for impairment by determining whether the carrying value will be recovered through the expected undiscounted future cash flows resulting from the use of the asset. In the event the sum of the expected undiscounted future cash flows is less than the carrying value of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. The long-term nature of these assets requires the estimation of cash inflows and outflows several years into the future and only takes into consideration technological advances known at the time of the impairment test.

To evaluate goodwill using a quantitative assessment, the Company determines the current fair value of the reporting units using a combination of “Market” and “Income” approaches. In the Market approach, the “Guideline Company” method is used, which focuses on comparing the Company’s risk profile and growth prospects to reasonably similar publicly traded companies. Key assumptions used for the Guideline Company method are total invested capital (“TIC”) multiples for revenues and operating cash flows, as well as consideration of control premiums. The TIC multiples are determined based on public furniture companies within our peer group, and if appropriate, recent comparable transactions are considered. Control premiums are determined using recent comparable transactions in the open market. Under the Income approach, a discounted cash flow method is used, which includes a terminal value, and is based on external analyst financial projection estimates, as well as internal financial projection estimates prepared by management. The long-term terminal growth rate assumptions reflect our current long-term view of the market in which we compete. Discount rates use the weighted average cost of capital for companies within our peer group, adjusted for specific company risk premium factors.

The fair value of our trade name, which is the Company’s only indefinite-lived intangible asset other than goodwill, is valued using the relief-from-royalty method. Significant factors used in trade name valuation are rates for royalties, future growth, and a discount factor. Royalty rates are determined using an average of recent comparable values. Future growth rates are based on the Company’s perception of the long-term values in the market in which we compete, and the discount rate is determined using the weighted average cost of capital for companies within our peer group, adjusted for specific company risk premium factors.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Financial Instruments

~~Due to~~Because of their short-term nature, the carrying value of our cash and cash equivalents, receivables and payables, short-term debt and customer deposit liabilities approximates fair value. Substantially all of our long-term debt at both June 30, 2016 and 2015 consists of our ~~Senior Notes, the~~term loan and revolving credit facility. The estimated fair value ~~of which~~ is ~~$133.9 million at June 30, 2013 and $155.3 million at June 30, 2012, as compared~~equal to athe carrying value on those ~~dates of $129.2 million and $153.0 million, respectively.~~dates.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the 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 carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance must be established for deferred tax assets when it is more likely than not that the assets will not be realized. During fiscal 2012, we released all of United States federal and Canadian valuation allowance against net deferred tax assets established during the fourth quarter of fiscal 2010. We recorded a tax benefit of $21.6 million for the reversal of the valuation allowance against those assets, with a non-cash benefit to earnings in the quarter ended March 31, 2012. We retained a valuation allowance against various foreign, state and local deferred tax assets in our retail segment. At June 30, 2013 this valuation allowance was approximately $2.9 million.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Most of the unrecognized tax benefits, if recognized, would be recorded as a benefit to income tax expense.

The liability associated with an unrecognized tax benefit is classified as a long-term liability except for the amount for which a cash payment is expected to be made or tax positions settled within one year. We recognize interest and penalties related to income tax matters as a component of income tax expense.

Revenue Recognition

Revenue is recognized when all of the following have occurred: persuasive evidence of a sales arrangement exists (e.g. a wholesale purchase order or retail sales invoice); the sales arrangement specifies a fixed or determinable sales price; title and risk of ownership has passed to the customer; no specific performance obligations remain; product is shipped or services are provided to the ~~customer or a fixed schedule of delivery is agreed upon and in place;~~customer; collectability is reasonably assured. As such, revenue recognition generally occurs upon the shipment of goods to independent retailers or, in the case of Ethan Allen operated retail design centers, upon delivery to the customer. If shipping is billed to customers, this is included in revenue. Recorded sales provide for estimated returns and allowances. We permit our customers to return defective products and incorrect shipments, and terms we offer are standard for the industry.

Shipping and Handling Costs

Our practice has been to sell our products at the same delivered cost to all retailers nationwide, regardless of shipping point. Costs incurred by the Company to deliver finished goods are expensed and recorded in selling, general and administrative expenses. Shipping and handling costs amounted to ~~$60.6~~$71.7 million in fiscal ~~years 2013 and 2012 and $58.2~~year 2016, $67.3 million for fiscal ~~year 2011.~~2015 and $67.1 million in fiscal 2014.

Advertising Costs

Advertising costs are expensed when first aired or distributed. Our total advertising costs were ~~$29.8 million in fiscal years 2013 and 2012 and $28.2~~$31.5 million in fiscal year ~~2011.~~2016, $30.2 million in fiscal year 2015 and $29.5 million in fiscal year 2014. These amounts ~~are presented~~include advertising media expenses, outside and inside agency expenses, certain website related fees and photo and video production net of proceeds received by us under our agreement with the third-party financial institution responsible for administering our consumer finance programs. Prepaid advertising costs at June 30, ~~2013~~2016 totaled ~~$1.6~~$2.0 million compared to ~~$1.4~~$1.8 million at June 30, ~~2012.~~2015.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Earnings Per Share

We compute basic earnings per share by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated similarly, except that the weighted average outstanding shares are adjusted to include the effects of converting all potentially dilutive share-based awards issued under our employee stock plans (see Notes 9 and 10). Certain unvested share-based payment awards are participating securities because they contain rights to receive non-forfeitable dividends (if paid)~~, and are included in~~. The earnings available to participating securities under the two-class method of computing earnings per ~~share.~~share is insignificant.

Share-Based Compensation

We estimate, as of the date of grant, the fair value of stock options awarded using the Black-Scholes ~~option-pricing~~option pricing model. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs, including anticipated changes in the underlying stock price (i.e. expected volatility) and option exercise activity (i.e. expected life). Expected volatility is based on the historical volatility of our stock and other contributing factors. The expected life of options granted, which represents the period of time that the options are expected to be outstanding, is based, primarily, on historical data. We estimate, as of the date of grant, the fair value of restricted stock units awarded using a discounted cash flow model which requires management to make certain assumptions with respect to model inputs including anticipated future dividends not paid during the restriction period, and a discount for lack of marketability for a one-year holding period after vesting.

Share-based compensation expense is included in the Consolidated Statements of Operations within selling, general and administrative expenses. Tax benefits associated with our share-based compensation arrangements are included in the Consolidated Statements of Operations within income tax expense.

All shares of our common stock received in connection with the exercise of share-based awards have been recorded as treasury stock and result in a reduction in shareholders’ equity.

Foreign Currency Translation

The functional currency of each Company operated foreign location is the respective local currency. Assets and liabilities are translated into United States dollars using the current period-end exchange rate and income and expense amounts are translated using the average exchange rate for the period in which the transaction occurred. Resulting translation adjustments are reported as a component of accumulated other comprehensive income within shareholders’ equity.

Recent Accounting Pronouncements

In ~~February 2013,~~May 2014, the Financial Accounting Standards Board ~~(“FASB”~~(the “FASB”) issued ASU ~~2013-02,~~2014-09,~~“Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”~~Revenue from Contracts with Customers. This ASU ~~requires items~~provides a framework for revenue recognition that replaces most existing GAAP revenue recognition guidance when it becomes effective. We have an option to use either a retrospective approach or a cumulative effect adjustment approach to implement the guidance. The new standard is effective for us on July 1, 2018, with early adoption permitted in 2017. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption, and have not yet selected a transition approach.

In April 2015 the FASB issued ASU 2015-03,Simplifying the Presentation of Debt Issuance Costs. The new standard classifies debt issuance costs as a deduction from the debt liability, consistent with debt discounts. Prior to the issuance of ASU 2015-03, these costs were classified as assets. We adopted the provisions of ASU 2015-03 beginning in July 2015 and prior period amounts have been reclassified to conform to the current period presentation. As of June 30, 2015, $0.3 million of debt issuance costs were reclassified in ~~their entirety~~the consolidated balance sheets from other noncurrent assets to ~~net income~~current portion of long-term debt and $1.0 million was reclassified from ~~accumulated~~ other noncurrent assets to long-term debt, less current portion. The adoption of ASU 2015-03 did not impact our consolidated statements of comprehensive income, inor our consolidated statements of cash flows.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

In November 2015, the ~~same reporting period~~FASB issued ASU 2015-17,Balance Sheet Classification of Deferred Taxes, which requires the Company to ~~be reported separately from other amounts in other comprehensive income, either~~present all deferred tax assets and liabilities as noncurrent. This pronouncement is effective for the Company on ~~the face of the financial statements or in the notes to the financial statements. We adopted this ASU in the fourth quarter of fiscal 2013~~July 1, 2017, and ~~it had no material~~early adoption is permitted. The Company is currently evaluating the impact on our consolidated financial ~~statements.~~statements and the timing of adoption.

In February 2016, the FASB issued ASU 2016-02,Leases, which is intended to improve financial reporting about leasing transactions. The ASU will require lessees that lease assets with lease terms of more than twelve months to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Lessors will remain largely unchanged from current GAAP. In addition, the ASU will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. This pronouncement is effective for the Company on July 1, 2019, and early adoption is permitted. The Company is currently evaluating the impact on our consolidated financial statements and the timing of adoption.

In March 2016, the FASB issued Accounting Standards 2016-09,Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Stock Compensation. The objective of this amendment is part of the FASB’s Simplification Initiative as it applies to several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This pronouncement is effective for the Company on July 1, 2017, and allows for prospective, retrospective or modified retrospective adoption, depending on the area covered in the update, with early adoption permitted. The Company is currently evaluating the impact on our consolidated financial statements and the timing of adoption.

In July 2015, the FASB issued ASU No. 2015-11,“Inventory (Topic 330): Simplifying the Measurement of Inventory,” which states that inventory should be measured at the lower of cost and net realizable value. Net realizable value is defined as estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The new guidance is effective for the Company on July 1, 2017. The new guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact on our consolidated financial statements and the timing of adoption.

(2) Business Acquisitions

From time to time the Company acquires design centers from its independent retailers in arms length transactions. There were no material acquisitions completed during the three fiscal years ended June 30, ~~2013, 2012~~2016, 2015 and ~~2011~~2014 respectively.

(3) Inventories

Inventories at June 30 are summarized as follows (in thousands):

	2016			2015

Finished goods	$	129,627		$	118,537
Work in process		9,497			10,537
Raw materials		27,554			25,943
Valuation allowance		(4,355	)		(3,101	)
Inventories	$	162,323		$	151,916

2013

2012

Finished goods
$ 107,508 $ 119,978
Work in process
6,961 8,638
Raw materials
22,787 27,123
$ 137,256 $ 155,739

~~Inventories are presented net of a related valuation allowance of $2.7 million at both June 30, 2013 and June 30, 2012.~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

(4) Property, Plant and Equipment

Property, plant and equipment at June 30 are summarized as follows (in thousands):

	2013			2012			2016			2015

Land and improvements	$	89,091		$	89,963		$	80,002		$	82,806
Building and improvements		388,628			383,801			392,196			385,439
Machinery and equipment		116,666			113,604			126,066			126,667
		594,385			587,368
Property, plant and equipment, gross								598,264			594,912
Less: accumulated depreciation and amortization		(302,713	)		(291,673	)		(324,649	)		(317,877	)
	$	291,672		$	295,695
Property, plant and equipment, net							$	273,615		$	277,035

(5) Goodwill and Other Intangible Assets

At both June 30, ~~2013~~2016 and ~~2012,~~2015, we had $25.4 million of goodwill, and $19.7 million of other indefinite-lived intangible assets consisting of Ethan Allen trade names, all of which is in our wholesale segment. ~~Our retail segment had $48.4 million of goodwill which was fully impaired in fiscal 2009.~~

In the fourth quarter of fiscal years ~~2013~~2016, 2015, and ~~2012,~~2014, the Company performed qualitative assessments of the fair value of the wholesale reporting unit and concluded that the fair value of its goodwill exceeded its carrying value. In fiscal year 2011 the Company performed a quantitative assessment and determined the fair value of its wholesale reporting unit exceeded its carrying value by a substantial margin. The fair value of the trade name exceeded its carrying value by a substantial margin in fiscal years ~~2013, 2012~~2016, 2015 and ~~2011.To~~2014.To calculate fair value of these assets, management relies on estimates and assumptions which by their nature have varying degrees of uncertainty. ~~Wherever possible, management~~Management therefore looks for third party transactions to provide the best possible support for the assumptions incorporated. Management considers several factors to be significant when estimating fair value including expected financial outlook of the business, changes in the Company’s stock price, the impact of changing market conditions on financial performance and expected future cash flows, and other factors. Deterioration in any of these factors may result in a lower fair value assessment, which could lead to impairment of the long-lived assets and goodwill of the Company.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

(6) Borrowings

Total debt obligations at June 30 consist of the following (in thousands):

	2016		2015

Term loan	$	16,167	$	35,000
Revolver		25,000		40,000
Capital leases and other		671		1,237
Total debt		41,838		76,237
Less curent maturities		3,001		3,034
Total long-term debt	$	38,837	$	73,203

2013

2012

5.375% Senior Notes due 2015
$ 129,152 $ 152,986
Capital leases and other
2,137 1,514
Total debt
131,289 154,500
Less curent maturities
480 250
Total long-term debt
$ 130,809 $ 154,250

~~Senior Notes~~

OnIn September ~~27,~~ 2005, we ~~completed a private offering of $200.0~~issued $200 million ofin ten-year senior unsecured notes due October 1, 2015 (the "Senior Notes"). The Senior Notes were offered by Global and have an annual coupon rate of 5.375% with interest payable semi-annually in arrears on April 1 and October 1 of each year. Proceeds received in connection with the issuance of the Senior Notes, net ofCompany entered into a ~~related discount of $1.6~~five year, $150 million totaled $198.4 million. We used the net proceeds from the offering to expand our retail network, invest in our manufacturing and logistics operations, and for other general corporate purposes. As of June 30, 2013, outstanding borrowings related to this transaction have been included in the Consolidated Balance Sheets within long-term debt. The discount on the Senior Notes is being amortized to interest expense over the life of the related debt as is debt issuance costs of $2.0 million primarily for banking, legal, accounting, rating agency, and printing services and $0.8 million of losses on settled forward contracts entered in conjunction with this debt issuance. During fiscal 2013, the Company repurchased $24.0 million of the Senior Notes in a single unsolicited transaction. During fiscal 2012, the Company repurchased $12.0 million of the Senior Notes in several unsolicited transactions.

The Senior Notes may be redeemed in whole or in part, at Global’s option at any time at the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes to be redeemed, discounted to the date of redemption on a semi-annual basis at the applicable treasury rate plus 20 basis points, plus, in each case, accrued and unpaid interest to the redemption date. In the event of default, the trustee or the holders of 25% of the outstanding principal amount of the Senior Notes may accelerate payment of principal, premium, if any, and accrued and unpaid interest. Events of default include failure to pay in accordance with the terms of the indenture, including failure, under certain circumstances, to pay indebtedness other than the Senior Notes. As of June 30, 2013, we are in compliance with the terms and conditions and all covenants of the Senior Notes.

~~Revolving Credit Facility~~

~~The Company has a~~ senior secured ~~asset-based,~~ revolving credit and term loan facility on October 21, 2014, as amended (the “Facility”). The Facility, which expires on October 21, 2019, provides ~~revolving credit financing~~a term loan of up to ~~$50~~$35 million and a revolving credit line of up to $115 million, subject to borrowing base ~~availability,~~availability. During March 2015, we utilized $35 million of the term loan and ~~includes a right for~~$40 million of the ~~Company~~revolving credit line, along with our available cash to ~~increase~~fully redeem our Senior Notes. We incurred financing costs of $1.5 million under the ~~total facility to $100 million either with existing or additional lenders subject to certain conditions. The~~ Facility, ~~expires March 25, 2016, or June 26, 2015 if~~which are being amortized by the ~~Company’s Senior Notes have not been refinanced.~~ interest method, over the remaining life of the Facility.

At the Company’s option, revolving loans under the Facility bear interest, based on the average availability, at an annual rate of ~~either:~~either (a) the London Interbank Offered rate (“LIBOR”) plus 1.5% to 1.75%, or (b) the higher of (i) the prime rate, (ii) the federal funds effective rate plus 0.50%, or (iii) LIBOR plus 1.0% plus in each case 0.5% to 0.75%. At June 30, 2016 the annual interest rate in effect on the revolving loan was 2.0%.

~~(a)~~
~~London Interbank Offered rate (“LIBOR”) plus 2.0% to 2.5%, based on the average availability, or~~
~~(b)~~
~~The higher of (i) a prime rate, (ii) the federal funds effective rate plus 0.50%, or (iii) LIBOR plus 1.0% plus, in each case, an additional 1.0% to 1.5%, based on average availability.~~
At the Company’s option, term loans under the Facility bear interest, based on the Company’s rent adjusted leverage ratio, at an annual rate of either (a) LIBOR plus 1.75% to 2.25%, or (b) the higher of (i) the prime rate, (ii) the federal funds effective rate plus 0.50%, or (iii) LIBOR plus 1.0% plus in each case 0.75% to 1.25%. At June 30, 2016 the annual interest rate in effect on the term loan was 2.25%.

The ~~Companypays~~Company pays a commitment fee of 0.15% to 0.25% per annum on the unused portion of the Facility, and ~~participation~~ fees on issued letters of credit at an annual rate of ~~1.0%~~1.5% to ~~2.5%,~~1.75% based on the average availability and the letter of credit type. If the average monthly availability is less than the greater of (i) 12.5% of the aggregate commitment and (ii) $6.3 million, the Company’s fixed charge coverage ratio may not be less than 1 to 1 for any period of four consecutive fiscal quarters.availability. Certain payments are restricted if the availability ofunder the ~~collateral supporting the facility~~revolving credit line falls below ~~$10 million or~~ 20% of the ~~facility size.~~total revolving credit line, and the Company is subject to pro forma compliance with the fixed charge coverage ratio if applicable.

Quarterly installments of principal on the term loan are payable based on a straight line 15-year amortization period, with the balance due at maturity. The Company does not expect to repay the revolving credit line portion of the Facility within the next year.

The Facility is secured by all property owned, leased or operated by the Company in the United States ~~excluding any~~and includes certain real property owned by the Company and contains customary covenants which may limit the Company’s ability to incur debt; engage in mergers and consolidations; make restricted payments (including ~~dividends)~~dividends and share repurchases); sell certain assets; and make investments.

The Company must maintain a minimum fixed charge coverage ratio of 1.1 to 1.0 at all times. If the outstanding term loans are less than $17.5 million and the fixed charge coverage ratio equals or exceeds 1.25 to 1.0, the fixed charge coverage ratio ceases to apply and thereafter is only triggered if average monthly availability is less than 15% of the amount of the revolving credit line.During November 2015, we made a $16.5 million prepayment on the term loan, bringing the outstanding term loan to $17.3 million, and the fixed charge coverage ratio ceased to apply.Our subsequent average availability exceeded 65.0%, such that the fixed charge coverage ratio did not apply.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

The Company intends to use the Facility for working capital and general corporate purposes, including dividend payments and share repurchases, in addition to the refinancing of our Senior Notes which occurred in March 2015. At both June 30, ~~2013, we had no revolving loans~~2016 and ~~$0.6~~June 30, 2015, there was $0.2 million of standby ~~and trade~~ letters of credit outstanding under the Facility. ~~Remaining~~Total availability under the ~~facility totaled $49.4~~Facility was $89.8 million ~~subject to limitations set forth in the agreement and as a result, the coverage charge ratio, and other restricted payment limitations did not apply. As of~~at June 30, ~~2013,~~2016 and $74.8 million at June 30, 2015. The increase was due to $15.0 million payments we ~~are~~made on the revolving loan during fiscal 2016.

At both June 30, 2016 and June 30, 2015, we were in compliance with all ~~the~~ covenants of the ~~Facility.~~Senior Notes and the credit facilities.

~~For fiscal years ended June 30, 2013, 2012 and 2011, the~~The weighted-average interest ~~rates~~rate applicable under our outstanding debt obligations for each ~~year was approximately 5.5%.~~ of the last three fiscal years were as follows:

	Fiscal Year Ended June 30,
	2016			2015			2014
Weighted-average interest rate		2.0	%		4.8	%		5.5	%

Aggregate scheduled maturities of our debt obligations for each of the five fiscal years subsequent to June 30, ~~2013,~~2016, and thereafter are as follows (in thousands):

Fiscal Year Ended June 30
2017		3,303
2018		2,815
2019		2,396
2020		34,213
2021		-
Subsequent to 2021		-
Total scheduled debt payments	$	42,727

Fiscal Year Ended June 30

2013

2014
$ 480
2015
501
2016
129,675
2017
474
2018
159
Subsequent to 2018
-
Total scheduled debt payments
$ 131,289

(7) Leases

We lease real property and equipment under various operating lease agreements expiring at various times through ~~2034.~~2039. Leases covering retail design center locations and equipment may require, in addition to stated minimums, contingent rentals based on retail sales or equipment usage. Generally, the leases provide for renewal for various periods at stipulated rates. Future minimum lease payments under non-cancelable operating leases for each of the five fiscal years subsequent to June 30, ~~2013,~~2016, and thereafter are shown in the table following. Also shown are minimum future rentals from subleases, which will partially offset lease payments in the aggregate (in thousands):

Fiscal Year Ended June 30, 2013

Minimum
Future
Lease
Payments

Minimum
Future
Sublease
Rentals

2014
$ 30,485 $ 2,683
2015
27,780 2,264
2016
24,156 1,408
2017
21,082 1,262
2018
19,229 1,161
Subsequent to 2018
79,799 2,630
Total
$ 202,531 $ 11,408

Fiscal Year Ended June 30
	Minimum		Minimum
	Future		Future
	Lease		Sublease
	Payments		Rentals
2017	$	33,895	$	1,990
2018		32,197		2,009
2019		28,517		1,460
2020		24,439		956
2021		22,081		767
Subsequent to 2021		74,291		766
Total	$	215,420	$	7,948

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Total rent expense for each of the past three fiscal years ended June 30 was as follows (in thousands):

	2013			2012			2011			2016			2015			2014
Basic rentals under operating leases	$	29,897		$	30,895		$	30,834		$	31,692		$	31,220		$	31,168
Contingent rentals under operating leases		75			109			135			180			160			215
		29,972			31,004			30,969
Basic and contingent rentals											31,872			31,380			31,383
Less: sublease rent		(2,034	)		(1,656	)		(1,621	)		(1,964	)		(3,062	)		(2,494	)
Total rent expense	$	27,938		$	29,348		$	29,348		$	29,908		$	28,318		$	28,889

~~As of June 30, 2013 and 2012, deferred~~Deferred rent credits ~~totaling $11.9 million and $11.6 million, respectively,~~ and deferred lease incentives ~~totaling $1.9 million and $2.3 million, respectively,~~ are reflected in the Consolidated Balance ~~Sheets. These amounts~~Sheets and are amortized over the respective underlying lease terms on a straight-line basis as a reduction of rent expense. The amounts for the past two fiscal years are as follows:

	2016		2015
Deferred rent credits	$	13,003	$	12,362
Deferred lease incentives	$	4,538	$	3,762

(8) Shareholders' Equity

Our authorized capital stock consists of (a) 150,000,000 shares of Class A Common Stock, par value $.01 per share, (b) 600,000 shares of Class B Common Stock, par value $.01 per share, and (c) 1,055,000 shares of Preferred Stock, par value $.01 per share, of which (i) 30,000 shares have been designated Series A Redeemable Convertible Preferred Stock, (ii) 30,000 shares have been designated Series B Redeemable Convertible Preferred Stock, (iii) 155,010 shares have been designated as Series C Junior Participating Preferred Stock, and (iv) the remaining 839,990 shares may be designated by the Board of Directors with such rights and preferences as they determine (all such preferred stock, collectively, the "Preferred Stock"). Shares of Class B Common Stock are convertible to shares of our Common Stock upon the occurrence of certain events or other specified conditions being met. As of June 30, ~~2013~~2016 and ~~2012,~~2015, there were no shares of Preferred Stock or Class B Common Stock issued or outstanding.

Share Repurchase Program

On November 21, 2002, ~~the Company’s~~our Board of Directors approved a share repurchase program authorizing us to repurchase up to ~~2.0 million~~2,000,000 shares of our common stock, from time to time, either directly or through agents, in the open market at prices and on terms satisfactory to us. Subsequent to that date, the Board of Directors increased the ~~then remaining share~~aggregate authorization under the repurchase ~~authorization~~program on ~~seven~~several separate occasions, the last of which was on ~~November~~April 13, ~~2007. As~~2015 when the Board of Directors increased the aggregate authorization to approximately 3,000,000 shares. There is no expiration date on the repurchase authorization and the amount and timing of future share repurchases, if any, will be determined as market and business conditions warrant.As of June 30, ~~2013~~2016 we had a remaining Board authorization to repurchase ~~1.1~~1.8 million shares.

During the past three fiscal years, we repurchased ~~and/or retired~~ the following shares of our common stock (trade date basis):

	2013		2012		2011		2016		2015		2014
Common shares repurchased		-		79,293		204,286		697,799		645,831		-
Cost to repurchase common shares	$	-	$	1,349,557	$	2,787,777	$	19,346,104	$	16,469,725	$	-
Average price per share	$	-	$	17.02	$	13.65	$	27.72	$	25.50	$	-

For the fiscal years presented above, we funded our purchases of treasury stock with existing cash on hand and cash generated through current period operations. All of our common stock repurchases ~~and retirements~~ are recorded as treasury stock and result in a reduction of shareholders’ equity.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

(9) Earnings per Share

The following table sets forth the calculation of weighted average shares for the fiscal years ended June 30 (in thousands):

	2016		2015		2014
Weighted average shares of common stockoutstanding for basic calculation		28,072		28,874		28,918

Effect of dilutive stock options and othershare-based awards		252		308		358

Weighted average shares of common stockoutstanding adjusted for dilution calculation		28,324		29,182		29,276

2013

2012

2011

Weighted average common shares outstanding for basic calculation
28,864 28,824 28,758
Effect of dilutive stock options and other share-based awards
375 285 208
Weighted average common shares outstanding adjusted for dilution calculation
29,239 29,109 28,966

Certain restricted stock awards and the potential exercise of certain stock options were excluded from the respective diluted earnings per share calculation because their impact is anti-dilutive. In ~~2013, 2012~~2016, 2015 and ~~2011,~~2014, stock options and share based awards of ~~877,100, 1,641,500~~460,155, 591,058 and ~~1,657,932,~~724,292, respectively, have been excluded.

(10) Share-Based Compensation

For the twelve months ended June 30, ~~2013, 2012,~~2016, 2015, and ~~2011,~~2014, share-based compensation expense totaled ~~$1.4~~$2.4 million, ~~$1.7~~$1.2 million, and ~~$0.9~~$1.3 million respectively. These amounts have been included in the Consolidated Statements of ~~Operations~~Comprehensive Income within selling, general and administrative expenses. During the twelve months ended June 30, ~~2013, 2012,~~2016, 2015, and ~~2011,~~2014, we recognized related tax benefits associated with our share-based compensation arrangements totaling $0.8 million, $0.5 million ~~$0.6 million~~ and ~~$0.3~~$0.5 million, respectively (before valuation allowances). Such amounts have been included in the Consolidated Statements of ~~Operations~~Comprehensive Income within income tax expense.

At June 30, 2016, we had 1,341,207 shares of common stock available for future issuance pursuant to the 1992 Stock Option Plan (the “Plan”). The maximum number of shares of common stock reserved for issuance under the Plan is 6,487,867 shares. The Plan provides for the grant of non-compensatory stock options to eligible employees and non-employee directors. Stock options unde the Plan are non-qualified under section 422 of the Internal Revenue Code and allow for the purchase of shares of our common stock. The Plan also provides for the issuance of stock appreciation rights ("SARs") on issued options, however no SARs have been issued to date. The awarding of such options is determined by the Compensation Committee of the Board of Directors after consideration of recommendations proposed by the Chief Executive Officer. Options are generally granted with an exercise price equal to the market price of our common stock at the date of grant, vest ratably over a specified service period, and have a contractual term of 10 years. Equity awards can also include performance vesting conditions. Company policy further requires an additional one year holding period beyond the service vest date for certain executives. Beginning January 31, 2014, grants to employees included both company performance and service vesting conditions (as further described below). Grants to independent directors had a 3 year service vest condition. Following is a description of grants made under the Plan.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Stock Option Awards

We estimate, as of the date of grant, the fair value of stock options awarded using the Black-Scholes ~~option-pricing~~option pricing model. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs, including anticipated changes in the underlying stock price (i.e. expected volatility) and option exercise activity (i.e. expected life). Expected volatility is based on the historical volatility of our stock. The risk-free rate of return is based on the U.S. Treasury bill rate ~~for~~extrapolated to the term ~~closest~~ matching the expected life of the grant. The dividend yield is based on the annualized dividend rate at the grant date relative to the grant date stock price. The expected life of options granted, which represents the period of time that the options are expected to be outstanding, is based, primarily, on historical data. The weighted average assumptions used for fiscal years ended June 30 are noted in the following table:

	2013			2012			2011			2016			2015			2014
Volatility		56.5	%		45.1	%		59.5	%		48.1	%		52.9	%		56.3	%
Risk-free rate of return		0.80	%		1.92	%		0.61	%		1.93	%		2.03	%		1.52	%
Dividend yield		1.64	%		2.00	%		1.16	%		1.95	%		2.09	%		1.55	%
Expected average life (in years)	5.8			9.6			1.8
Expected average life (years)											6.3			6.7			5.2

Options granted to employees beginning January 1, 2014 vest provided certain performance and service conditions are met (“Performance Options”). The performance conditions allow the potential vesting in three equal tranches, provided attainment of a minimum annual 5% growth in operating income (as defined in the agreement) for each of the ensuing three fiscal years. If the minimum annual growth is not achieved in any fiscal year, that tranche is forfeited, except that if a cumulative compound growth rate of 5% is achieved at the end of the three fiscal years, performance conditions for all three tranches will have been met. Service conditions require an additional period after performance conditions are met. Consequently, assuming both performance and service conditions are met, shares become exercisable between 3 and 5 years from grant date. At June 30, ~~2013, we had 1,067,407 shares of common stock available for future issuance pursuant to~~2016, 196,000 Performance Options achieved the 1992 Stock Option Plan (the “Plan”). The maximum number of shares of common stock reserved for issuance under the Plan is 6,487,867 shares. Following is a description of grants made under the Plan.

~~Stock Option Awards~~

~~The Plan provides for the grant of non-compensatory stock options to eligible employees~~performance conditions, and non-employee directors. Stock options granted under the Plan are non-qualified under Section 422 of the Internal Revenue code and allow for the purchase of shares of our common stock. The Plan also provides for the issuance of stock appreciation rights ("SARs") on issued options, however, no SARs have been issued as of June 30, 2013. The awarding of such options is determined by the Compensation Committee of the Board of Directors after consideration of recommendations proposed by the Chief Executive Officer. Option awards are generally granted with an exercise price equal to the market price of our common stock at the date of grant,consequently will vest ratably ~~over a specified service period (4 years for awards to employees; 2 years for awards to independent directors), and have a contractual term of 10 years.~~

Effective October 1, 2011, the Company and M. Farooq Kathwari, our President and Chief Executive Officer, entered into a new employment agreement (the "Agreement"). Pursuant to the terms of the Agreement, Mr. Kathwari was awarded on October 1, 2011, (i) options to purchase 300,000 shares of our common stock at an exercise price of $13.61 which vest ratably over a 5-year period on each June 30, unless earlier vested, in certain circumstances, in accordance with the terms of the Agreement. During fiscal 2013, the Company awarded options to purchase an aggregate of 74,082 shares of our common stock to certain employees other than Mr. Kathwari, which vest in fourthree equal ~~annual installments~~tranches on the grant date ~~anniversary.~~

anniversary in years three, four and five provided service conditions are also met. The Company considers the remaining 130,000 Performance Options to be probable of achieving the respective performance conditions so they are being amortized to expense over their respective service periods. The Performance Options are reflected in the options tables presented below. All options were issued at the closing stock price on each grant date, and have a contractual term of 10 years. A summary of stock option activity occurring during the fiscal year ended June 30, ~~2013~~2016 is presented ~~below:~~below.

															Weighted
													Weighted		Average
													Average		Remaining
													Exercise		Contractual		Aggregate
Options	Shares			Exercise Price		Weighted Average Remaining Contractual Term (yrs)		Aggregate Intrinsic Value		Shares			Price		Term (yrs)		Intrinsic Value
Outstanding - June 30, 2012		2,270,708		$	27.58
Outstanding - June 30, 2015											994,888		$	24.33
Granted		74,082			22.42						24,367			28.73
Exercised		(73,071	)		19.14						(36,958	)		19.87
Canceled (forfeited/expired)		(635,225	)		30.65						(75,224	)		30.85
Outstanding - June 30, 2013		1,636,494			26.54		4.0	$	9,616,619
Exercisable - June 30, 2013		1,333,287		$	28.92		3.1	$	5,754,148
Outstanding - June 30, 2016											907,073			24.08		5.1	$	8,308,141
Exercisable - June 30, 2016											553,371		$	22.93		3.1	$	5,778,995

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

All options granted during fiscal 2016 were to non-employee independent directors of the Company as compensation for their services. The weighted average grant-date fair value of options granted during fiscal ~~2013, 2012,~~2016, 2015 and ~~2011~~2014 was ~~$9.96, $5.98~~$11.53, $11.30 and ~~$1.70~~$11.42 respectively. The total intrinsic value of options exercised during ~~2013, 2012~~2016, 2015 and ~~2011~~2014 was ~~$0.8~~$0.3 million, ~~$0.1~~$4.5 million, and ~~$0.0~~$0.2 million, respectively. As of June 30, ~~2013,~~2016, there was ~~$1.7~~$2.0 million of total unrecognized compensation cost related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted average period of ~~2.8~~2.6 years. A summary of the nonvested shares as of June 30, ~~2013~~2016 and changes during the year then ended is presented ~~below:~~below.

									Weighted Average
									Grant Date
Options	Shares			Weighted Average Grant Date Fair Value		Shares			Fair Value
Nonvested June 30, 2012		377,742			$ 5.65
Nonvested June 30, 2015							454,574		$	10.49
Granted		74,082			9.96		24,367			11.53
Vested		(139,282	)		5.15		(96,191	)		7.59
Canceled (forfeited/expired)		(9,335	)		6.61		(29,048	)		11.33
Nonvested at June 30, 2013		303,207			$ 6.90
Nonvested at June 30, 2016							353,702		$	11.28

Restricted Stock Awards

On July 26, 2011, as a result of the Company’s performance, the Compensation Committee of the Company’s board of directors awarded Mr. Kathwari 30,000 service-based restricted shares, which vest in three equal annual installments on the grant date anniversary. Effective October 1, 2011, pursuant to the terms of the Agreement, Mr. Kathwari was awarded 105,000 shares ofNo new restricted stock ~~which vest ratably over a 5-year period on each June 30, unless earlier vested, in certain circumstances, in accordance with the terms of the Agreement.~~

awards were granted during fiscal 2016. A summary of nonvested restricted share activity occurring during the fiscal year ended June 30, ~~2013~~2016 is presented below.

				Average
				Grant Date
Restricted Awards	Shares			Fair Value
Nonvested - June 30, 2015		21,000		$	13.61
Granted		-
Vested		(21,000	)	$	13.61
Canceled (forfeited/expired)		-
Nonvested - June 30, 2016		-		$	-

Restricted Awards

Shares

Weighted Average
Grant Date
Fair Value

Nonvested - June 30, 2012
142,066 $ 15.12
Granted
-
Vested
(54,686 ) 15.18
Canceled (forfeited/expired)
(568 ) 14.45
Nonvested - June 30, 2013
86,812 $ 15.09

As of June 30, ~~2013,~~2016, there was ~~$1.1 million of total~~no unrecognized compensation cost related to restricted shares granted under the Plan. ~~That cost is expected to be recognized over a weighted average period of 2.5 years.~~ The total fair value of restricted shares vested during the fiscal years ending June 30, ~~2013~~2016 and ~~2012~~2015 was ~~$1.4~~$0.7 million and ~~$1.4~~$0.8 million respectively.

Stock Unit Awards

~~In connection with previous employment agreements, Mr. Kathwari was deemed~~

We account for stock unit awards as equity-based awards because upon vesting, they will be settled in common shares. These awards, which contain time and other vesting conditions, may also contain performance conditions providing recipients a contingent right to ~~have earned 126,000 stock units. In the event of the termination of his employment, regardless of the reason for termination, Mr. Kathwari will~~ receive shares of the Company's common stock ~~equal~~("Performance Units"), conditioned upon the Company's achievement of certain performance targets and goals, and subject to the ~~number~~terms of the agreements. For Performance Units, we expense as compensation cost the fair value of the shares as of the grant date, and amortize expense ratably over the total performance and time vest period, taking into account the probability that we will satisfy the performance goals. We estimate, as of the date of grant, the fair value of Performance Units with a discounted cash flow model, using as model inputs the risk-free rate of return as the discount rate, dividend yield for dividends not paid during the restriction period, and a discount for lack of marketability for a one-year post-vest holding period. The lack of marketability discount used is the present value of a future put option using Monte-Carlo and Black-Scholes pricing models. The weighted average assumptions used for the fiscal year ended June 30 is noted in the table following. No Performance based restricted stock ~~units earned.~~unit awards were granted under the Plan prior to December 1, 2015.

	2016
Volatility		33.3	%
Risk-free rate of return		0.77	%
Dividend yield		1.99	%
Expected average life (years)		1.75

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

For each grant of Performance Units, the amount of the grant that will be earned and paid will be determined by reference to the achievement of certain performance goals for each of two initial fiscal years (on a cumulative basis) and the three fiscal years (on a cumulative basis) applicable to such grant.

A summary of stock unit activity occurring during the fiscal year ended June 30, 2016 is presented below.

			Weighted
			Average
			Grant Date
	Units		Fair Value
Non-vested units at June 30, 2015		126,000	$	24.67
Granted		92,050		24.34
Vested		-		-
Canceled (forfeited/expired)		-		-
Non-vested units at June 30, 2016		218,050		24.53

As of June 30, 2016, there was $1.4 million of total unrecognized compensation cost related to nonvested units granted under the Plan based on our probability estimates. That cost is expected to be recognized over a weighted average period of 1.3 years.

(11) Income Taxes

Income tax expense (benefit) attributable to income from operations consists of the following for the fiscal years ended June 30 (in thousands):

	2016			2015		2014
Current:
Federal	$	27,660		$	15,064	$	20,693
State		2,898			489		1,900
Foreign		88			55		60
Total current		30,646			15,608		22,653
Deferred:
Federal		(237	)		2,979		(941	)
State		207			759		(1,921	)
Foreign		703			195		(320	)
Total deferred		673			3,933		(3,182	)
Income Tax Expense (Benefit)	$	31,319		$	19,541	$	19,471

2013

2012

2011

Current:

Federal
$ 13,305 $ 13,086 $ (4,428 )
State
1,822 (1,433 ) 1,505
Foreign
125 57 107
Total current
15,252 11,710 (2,816 )
Deferred:

Federal
1,798 (20,896 ) (1,432 )
State
669 591 1,369
Foreign
(23 ) 140 -
Total deferred
2,444 (20,165 ) (63 )
Income tax expense (benefit)
$ 17,696 $ (8,455 ) $ (2,879 )

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

The following is a reconciliation of expected income tax expense (benefit) (computed by applying the federal statutory income tax rate to income before taxes) to actual income tax expense (benefit) (in thousands):

Expected income tax expense
$ 17,561 35.0 % $ 14,434 35.0 % $ 9,228 35.0 %
State income taxes, net of federal income tax
1,467 2.9 % 1,038 2.5 % 750 2.8 %
Valuation allowance
631 1.3 % (21,237 ) -51.5 % (12,672 ) -48.1 %
Section 199 Qualified Production Activities deduction
(1,157 ) -2.3 % (1,001 ) -2.4 % (705 ) -2.7 %
Unrecognized tax expense (benefit)
30 0.1 % (1,483 ) -3.6 % 490 1.9 %
Other, net
(836 ) -1.7 % (206 ) -0.5 % 30 0.1 %
Actual income tax expense (benefit)
$ 17,696 35.3 % $ (8,455 ) -20.5 % $ (2,879 ) -10.9 %

	2016					2015					2014

Expected Income Tax Expense	$	30,785		35.0	%	$	19,839		35.0	%	$	21,841		35.0	%
State income taxes, net of federal income tax		2,514		2.9	%		1,597		2.8	%		2,209		3.5	%
Valuation allowance		339		0.4	%		409		0.7	%		(1,540	)	-2.5	%
Section 199 Qualified Production Activities deduction		(1,513	)	-1.7	%		(998	)	-1.8	%		(1,342	)	-2.2	%
Unrecognized tax expense (benefit)		(479	)	-0.5	%		(641	)	-1.1	%		(904	)	-1.4	%
Other, net		(327	)	-0.4	%		(665	)	-1.2	%		(793	)	-1.3	%
Actual income tax expense (benefit)	$	31,319		35.6	%	$	19,541		34.5	%	$	19,471		31.2	%

The deferred income tax asset and liability balances at June 30 (in thousands) include:

	2016			2015
Deferred tax assets:
Employee compensation accruals		4,343			4,555
Stock based compensation		2,665			2,639
Deferred rent credits		6,705			5,943
Net operating loss carryforwards		3,375			4,059
Goodwill		1,729			2,748
Other, net		2,659			3,241
Total deferred tax assets		21,476			23,185
Less: Valuation allowance		(2,155	)		(1,816	)
Net deferred tax assets	$	19,321		$	21,369

2013

2012

Deferred tax assets:

Accounts receivable
$ 463 $ 470
Employee compensation accruals
5,057 6,321
Stock based compensation
2,342 2,617
Deferred rent credits
5,071 5,283
Restructuring charges
622 526
Net operating loss carryforwards
3,592 3,066
Goodwill
5,020 6,251
Other, net
3,053 3,829
Total deferred tax assets
25,220 28,363
Less: Valuation allowance
(2,948 ) (2,317 )
Net deferred tax assets
22,272 26,046

	2016		2015
Deferred tax liabilities:
Property, plant and equipment		654		1,358
Intangible assets other than goodwill		14,260		14,261
Commissions		3,478		3,999
Other, net		-		149
Total deferred tax liability		18,392		19,767
Total net deferred tax asset	$	929	$	1,602

Deferred tax liabilities:

Inventories
775 2,068
Property, plant and equipment
1,121 536
Intangible assets other than goodwill
14,264 14,264
Commissions
3,590 3,880
Other, net
20 22
Total deferred tax liability
19,770 20,770
Net deferred tax asset
$ 2,502 $ 5,276

The deferred tax balances are classified in the Consolidated Balance Sheets as follows at June 30 (in thousands):

	2016		2015
Current assets	$	3,174	$	2,301
Non-current assets		3,001		3,932
Current liabilities		-		-
Non-current liabilities		5,246		4,631
Total net deferred tax asset	$	929	$	1,602

2013

2012

Current assets
$ 2,876 $ 2,147
Non-current assets
251 3,129
Current liabilities
- -
Non-current liabilities
625 -
Total net deferred tax asset
$ 2,502 $ 5,276

~~Note:~~ Current deferred tax assets and liabilities and non-current deferred tax assets and liabilities have been presented net in the Consolidated Balance Sheets.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

We evaluate our deferred taxes to determine if the “more likely than not” standard of evidence has not been met thereby supporting the need for a valuation allowance.

A valuation allowance must be established for deferred tax assets when it is ~~more~~less than 50% likely ~~than not~~ that ~~the~~ assets will ~~not~~ be realized. During fiscal 2012, we released all of United States federal and Canadian valuation allowance against net deferred tax assets established during the fourth quarter of fiscal 2010. We recorded a tax benefit of $21.6 million for the reversal of the valuation allowance against those assets, with a non-cash benefit to earnings in the quarter ended March 31, 2012. We retained a valuation allowance against various foreign, state and local deferred tax assets in our retail segment. At June 30 ~~2013~~of 2016 and 2015, such an allowance was in place against the Belgian foreign tax assets, and at June 30, 2016 this valuation allowance was approximately ~~$2.9~~$2.2 million.

The Company’s deferred income tax assets at June 30, ~~2013~~2016 with respect to the net operating losses expire as follows (in thousands):

Deferred
Income
Tax Assets

Net Operating
Loss
Carryforwards

United States (State), expiring between 2013 and 2032
$ 2,398 $ 51,808
Foreign, Expiring between 2029 and 2030
1,194 3,880

	Deferred		Net Operating
	Income		Loss
	Tax Assets		Carryforwards
United States (State), expiring between 2017 and 2032	$	1,086	$	24,130
Foreign, Expiring in 2034		2,289		6,809

Deferred U.S. federal income taxes are not provided for unremitted foreign earnings of our foreign subsidiaries because we expect those earnings will be permanently reinvested.

Uncertain Tax Positions

We recognize interest and penalties related to income tax matters as a component of income tax expense. If the ~~$6.8~~$2.2 million of unrecognized tax benefits and related interest and penalties as of June 30, ~~2013~~2016 were recognized, approximately ~~$4.2~~$1.4 million would be recorded as a benefit to income tax expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits including related interest and penalties as of June 30, ~~2013~~2016 and ~~2012~~2015 is as follows (in thousands):

	2013			2012			2016			2015
Beginning balance	$	7,369		$	11,027		$	3,117		$	4,699
Additions for tax positions taken		1,227			1,074			776			568
Reductions for tax positions of prior years		(1,351	)		(3,543	)
Reductions for tax positions taken in prior years								(1,530	)		(1,555	)
Settlements		(402	)		(1,189	)		(193	)		(596	)
Ending balance	$	6,843		$	7,369		$	2,170		$	3,117

It is reasonably possible that various issues relating to approximately ~~$3.2~~$0.4 million of the total gross unrecognized tax benefits as of June 30, ~~2013~~2016 will be resolved within the next twelve months as exams are completed or statutes expire. If recognized, approximately ~~$2.0~~$0.3 million of unrecognized tax benefits would reduce our tax expense in the period realized. However, actual results could differ from those currently anticipated.

The Company conducts business globally and, as a result, the Company or one or more of its subsidiaries files income tax returns in the U.S., various state, and foreign jurisdictions. In the normal course of business, the Company is subject to examination by the taxing authorities in such major jurisdictions as the U.S. Canada, Mexico, Belgium and Honduras. As of June 30, ~~2013,~~2016, the Company and certain subsidiaries are currently under audit from ~~2006~~2010 through ~~2010~~2015 in the U.S. While the amount of uncertain tax benefits with respect to the entities and years under audit may change within the next twelve months, it is not anticipated that any of the changes will be significant.

(12) Employee Retirement Programs

The Ethan Allen Retirement Savings Plan

The Ethan Allen Retirement Savings Plan (the "Savings Plan") is a defined contribution plan, which is offered to substantially all of our employees who have completed three consecutive months of service regardless of hours worked. We may, at our discretion, make a matching contribution to the 401(k) portion of the Savings Plan on behalf of each participant. Total 401(k) Company match expense amounted to ~~$2.9~~$3.4 million in ~~2013, $2.6~~2016, $3.3 million in ~~2012,~~2015, and ~~$2.5~~$2.8 million in ~~2011.~~2014. The contribution was made entirely in cash in ~~2013,~~2016, 2015 and ~~2012 and half in cash and half in shares of the Company’s common stock in 2011.~~2014.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Other Retirement Plans and Benefits

Ethan Allen provides additional benefits to selected members of senior and middle management in the form of previously entered deferred compensation arrangements and a management cash bonus and other incentive programs. The total cost of these benefits was ~~$3.4~~$3.6 million, ~~$2.7~~$3.7 million, and ~~$1.1~~$3.5 million in ~~2013, 2012~~2016, 2015 and ~~2011,~~2014, respectively.

(13) Litigation

~~Environmental Matters~~

We and our subsidiaries are subject to various environmental laws and regulations. Under these laws, we and/or our subsidiaries are, or may be, required to remove or mitigate the effects on the environment of the disposal or release of certain hazardous materials. We believe our currently anticipated capital expenditures for environmental control facility matters are not material.

We are routinely party to various legal proceedings, including investigations or as a defendant in litigation, in the ordinary course of business. We are also subject to ~~other~~various federal, state and local environmental protection laws and regulations and are involved, from time to time, in investigations and proceedings regarding environmental matters. Such investigations and proceedings typically concern air emissions, water discharges, and/or management of solid and hazardous wastes. ~~We believe that~~Under these laws, we and/or our ~~facilities~~subsidiaries are, ~~in material compliance with all applicable environmental laws and regulations.~~or may be, required to remove or mitigate the effects on the environment of the disposal or release of certain hazardous materials.

~~Federal and state regulations provided~~Regulations issued under the ~~initiative for us~~Clean Air Act Amendments of 1990 required the industry to reformulate certain furniture finishes or institute process changes to reduce emissions of volatile organic compounds. Compliance with many of these requirements has been facilitated through the introduction of high solids coating technology and alternative formulations. In addition, we have instituted a variety of technical and procedural controls, including reformulation of finishing materials to reduce toxicity, implementation of high velocity low pressure spray systems, development of storm water protection plans and controls, and further development of related inspection/audit teams, all of which have served to reduce emissions per unit of production. We remain committed to implementing new waste minimization programs and/or enhancing existing programs with the objective of (i) reducing the total volume of waste, (ii) limiting the liability associated with waste disposal, and (iii) continuously improving environmental and job safety programs on the factory floor which serve to minimize emissions and safety risks for employees. ~~We will continue to evaluate the most appropriate, cost effective, control technologies for finishing operations and design production methods~~In order to reduce the use of hazardous materials in the manufacturing ~~process.~~process, we will continue to evaluate the most appropriate, cost-effective control technologies for finishing operations and production methods. We believe that our facilities are in material compliance with all such applicable laws and regulations. Our currently anticipated capital expenditures for environmental control facility matters are not material.

On a quarterly basis, we review our litigation activities and determine if an unfavorable outcome to us is considered “remote”, “reasonably possible” or “probable” as defined by U.S. GAAP. Where we determine an unfavorable outcome is probable and is reasonably estimable, we accrue for potential litigation losses. The liability we may ultimately incur with respect to such litigation matters, in the event of a negative outcome, may be in excess of amounts currently accrued, if any; however, we do not expect that the reasonably possible outcome of these litigation matters would, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows. Where we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for any potential litigation loss.

Although the outcome of the various claims and proceedings against us cannot be predicted with certainty, management believes that the likelihood is remote that any existing claims or proceedings, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

(14) Accumulated Other Comprehensive Income

The following table sets forth the activity in accumulated other comprehensive income for the fiscal year ended June 30, ~~2013~~2016 (in thousands):

		Foreign currency translation adjustments			Derivative instruments			Unrealized gains and losses on investments			Total			Foreign
Balance June30, 2012		$	1,253		$	(119	)	$	7		$	1,141
														currency
														translation
														adjustments
Balance June 30, 2015														$	(2,638	)
Changes before reclassifications	Changes before reclassifications	$	(506	)	$	-		$	(1	)	$	(507	)		(2,208	)
Amounts reclassified from accumulatedother comprehensive income	Amounts reclassified from accumulatedother comprehensive income	$	-		$	50		$	-		$	50			-
Current period other comprehensive income	Current period other comprehensive income	$	(506	)	$	50		$	(1	)	$	(457	)		(2,208	)
Balance June30, 2013		$	747		$	(69	)	$	6		$	684
Balance June 30, 2016														$	(4,846	)

Foreign currency translation adjustments are the result of changes in foreign currency exchange rates related to our operations in Canada, Belgium, Honduras and Mexico, and exclude income taxes given that the earnings of non-U.S. subsidiaries are deemed to be reinvested for an indefinite period of time. ~~The derivative instruments are reclassified to interest expense in our consolidated statements of operations.~~

(15) Segment Information

Our operations are classified into two operating segments: wholesale and retail. These operating segments represent strategic business areas which, although they operate separately and provide their own distinctive services, enable us to more effectively offer our complete line of home furnishings and ~~accessories.~~accents.

The wholesale segment is principally involved in the development of the Ethan Allen brand, which encompasses the design, manufacture, domestic and offshore sourcing, sale and distribution of a full range of home furnishings and ~~accessories~~accents to a network of independently operated and Ethan Allen operated design centers as well as related marketing and brand awareness efforts. Wholesale revenue is generated upon the wholesale sale and shipment of our product to all retail design centers, including those operated by Ethan Allen. Wholesale profitability includes (i) the wholesale gross margin, which represents the difference between the wholesale sales price and the cost associated with manufacturing and/or sourcing the related product, and (ii) other operating costs associated with wholesale segment activities.

The retail segment sells home furnishings and ~~accessories~~accents to consumers through a network of Company operated design centers. Retail revenue is generated upon the retail sale and delivery of our product to our customers. Retail profitability includes (i) the retail gross margin, which represents the difference between the retail sales price and the cost of goods purchased from the wholesale segment, and (ii) other operating costs associated with retail segment activities.

Inter-segment eliminations result, primarily, from the wholesale sale of inventory to the retail segment, including the related profit margin.

We evaluate performance of the respective segments based upon revenues and operating income. While the manner in which our home furnishings and ~~accessories~~accents are marketed and sold is consistent, the nature of the underlying recorded sales (i.e. wholesale versus retail) and the specific services that each operating segment provides (i.e. wholesale manufacturing, sourcing, and distribution versus retail selling) are different. Within ~~the wholesale~~each segment, we maintain revenue information according to each respective product line (i.e. case goods, upholstery, or home ~~accessories~~accents and other)~~. The allocation of retail sales by product line generally follows that of the wholesale segment (see the product line table below)~~. A breakdown of wholesale sales by product line for each of the last three fiscal years ended June 30 is provided below:

	Fiscal Year Ended June 30,									Fiscal Year Ended June 30,
	2013			2012			2011			2016			2015			2014
Case Goods		37	%		38	%		39	%		32	%		34	%		36	%
Upholstered Products		48	%		44	%		46	%		51	%		48	%		48	%
Home Accessories and Other		15	%		18	%		15	%		17	%		18	%		16	%
		100	%		100	%		100	%		100	%		100	%		100	%

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

A breakdown of retail sales by product line for each of the last three fiscal years ended June 30 is provided below:

	Fiscal Year Ended June 30,
	2016			2015			2014
Case Goods		30	%		32	%		33	%
Upholstered Products		48	%		45	%		45	%
Home Accents and Other		22	%		23	%		22	%
		100	%		100	%		100	%

Information for each of the last three fiscal years ended June 30 is provided below (in thousands):

	2016			2015			2014
Net sales:
Wholesale segment	$	491,467		$	469,384		$	453,607
Retail segment		626,511			579,713			580,739
Elimination of inter-company sales		(323,776	)		(294,497	)		(287,687	)
Consolidated Total	$	794,202		$	754,600		$	746,659

Operating income (loss):
Wholesale segment	$	74,412		$	66,988		$	57,816
Retail segment		16,450			1,726			10,515
Adjustment of inter-company profit (1)		(1,683	)		(2,780	)		1,305
Consolidated Total	$	89,179		$	65,934		$	69,636

Depreciation & Amortization:
Wholesale segment	$	7,587		$	8,044		$	7,887
Retail segment		11,766			11,098			10,043
Consolidated Total	$	19,353		$	19,142		$	17,930

Capital expenditures:
Wholesale segment	$	12,446		$	9,427		$	11,013
Retail segment		10,521			10,360			8,292
Acquisitions		165			1,991			-
Consolidated Total	$	23,132		$	21,778		$	19,305

2013

2012

2011

Net sales:

Wholesale segment
$ 434,439 $ 456,915 $ 422,946
Retail segment
578,284 559,417 505,910
Elimination of inter-company sales
(283,640 ) (286,959 ) (249,896 )
Consolidated Total
$ 729,083 $ 729,373 $ 678,960

Operating income (loss):

Wholesale segment
$ 50,843 $ 64,436 $ 49,898
Retail segment
8,016 (11,522 ) (15,344 )
Adjustment of inter-company profit (1)
1,578 (3,217 ) (2,621 )
Consolidated Total
$ 60,437 $ 49,697 $ 31,933

Depreciation & Amortization:

Wholesale segment
$ 8,166 $ 7,525 $ 9,199
Retail segment
9,842 11,056 11,617
Consolidated Total
$ 18,008 $ 18,581 $ 20,816

Capital expenditures:

Wholesale segment
$ 7,024 $ 12,168 $ 6,604
Retail segment
11,981 10,716 2,490
Acquisitions
770 520 2,957
Consolidated Total
$ 19,775 $ 23,404 $ 12,051

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

	June 30			June 30			June 30
	2016			2015			2014
Total Assets:
Wholesale segment	$	271,116		$	295,949		$	339,271
Retail segment		339,942			341,886			344,025
Inventory profit elimination (2)		(33,649	)		(31,858	)		(28,862	)
Consolidated Total	$	577,409		$	605,977		$	654,434

June 30
2013

June 30
2012

June 30
2011

Total Assets:

Wholesale segment
$ 291,942 $ 309,573 $ 309,081
Retail segment
355,233 366,594 347,044
Inventory profit elimination (2)
(29,890 ) (31,379 ) (27,800 )
Consolidated Total
$ 617,285 $ 644,788 $ 628,325

(1) Represents the change in wholesale profit contained in Ethan Allen design center inventory at the end of the period.
(2)
~~(2)~~ The wholesale profit contained in the retail segment inventory that has not yet been realized. These profits are realized when the related inventory is sold.

Our international net sales are comprised of our wholesale segment sales to independent retailers and our retail segment ~~inventory that has not yet been realized. These profits are realized when~~sales to consumers through the ~~related inventory is sold.~~

Company operated design centers. The number of ~~independent retail~~international design centers, ~~located outside the United States,~~ and the related net sales ~~to these foreign independent retailers~~ as a percent of our consolidated net sales is shown in the following table.

	Fiscal Year Ended June 30,
	2016			2015			2014
Independent design centers		103			97			91
Company operated design centers		6			7			8
Total international design centers		109			104			99

Percentage of consolidated net sales		9.2	%		11.6	%		10.6	%

Fiscal Year Ended June 30,

2013

2012

2011

Design centers
86 87 70
Net sales percentage
5.1 % 6.6 % 6.3 %

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

(16) Selected Quarterly Financial Data (Unaudited)

Tabulated below is selected financial data for each quarter of the fiscal years ended June 30, ~~2013, 2012,~~2016, 2015, and ~~2011~~2014 (in thousands, except per share data):

	Quarter Ended
	September 30		December 31		March 31		June 30
Fiscal 2016:
Net Sales	$	190,391	$	207,535	$	190,583	$	205,693
Gross profit		104,673		116,058		105,717		115,788
Net income		13,147		16,534		10,178		16,778
Earnings per basic share		0.46		0.58		0.37		0.60
Earnings per diluted share		0.46		0.58		0.36		0.60
Dividends declared per common share		0.14		0.14		0.17		0.17

Fiscal 2015:
Net Sales	$	190,706	$	197,067	$	173,259	$	193,568
Gross profit		104,803		106,074		94,110		106,176
Net income		11,879		10,038		2,536		12,689
Earnings per basic share		0.41		0.35		0.09		0.44
Earnings per diluted share		0.41		0.34		0.09		0.44
Dividends declared per common share		0.12		0.12		0.12		0.14

Fiscal 2014:
Net Sales	$	181,659	$	193,104	$	173,061	$	198,835
Gross profit		98,743		105,999		93,130		108,624
Net income		9,034		11,555		5,258		17,084
Earnings per basic share		0.31		0.40		0.18		0.59
Earnings per diluted share		0.31		0.39		0.18		0.58
Dividends declared per common share		0.10		0.10		0.10		0.10

Quarter Ended

September 30

December 31

March 31

June 30

Fiscal 2013:

Net Sales
$ 187,437 $ 191,251 $ 168,144 $ 182,251
Gross profit
104,253 103,967 91,785 98,344
Net income
10,064 9,846 4,374 8,194
Earnings per basic share
0.35 0.34 0.15 0.28
Earnings per diluted share
0.35 0.34 0.15 0.28
Dividends declared per common share
0.09 0.50 0.09 0.09

Fiscal 2012:

Net Sales
$ 184,921 $ 183,275 $ 175,861 $ 185,316
Gross profit
97,885 98,219 94,275 99,909
Net income
6,770 8,077 27,548 7,299
Earnings per basic share
0.24 0.28 0.95 0.25
Earnings per diluted share
0.23 0.28 0.94 0.25
Dividends declared per common share
0.07 0.07 0.07 0.09

Fiscal 2011:

Net Sales
$ 164,841 $ 173,345 $ 162,822 $ 177,952
Gross profit
82,381 89,861 83,069 94,149
Net income
3,813 14,744 3,518 7,175
Earnings per basic share
0.13 0.51 0.12 0.25
Earnings per diluted share
0.13 0.51 0.12 0.25
Dividends declared per common share
0.05 0.05 0.05 0.07

(17) Financial Instruments

We determine fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the Company. In addition, the fair value of liabilities includes consideration of non-performance risk including our own credit risk. Each fair value measurement is reported in one of the three levels, determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

● Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

● Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

The following section describes the valuation methodologies we use to measure different financial assets and liabilities at fair value.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis at June 30, ~~2013~~2016 and June 30, ~~2012 (in~~2015

(in thousands):

	June 30, 2013
June 30, 2016									June 30, 2016
	Level 1		Level 2		Level 3		Balance			Level 1		Level 2		Level 3		Balance
Cash equivalents	$	88,034	$	-	$	-	$	88,034		$	60,479	$	-	$	-	$	60,479
Available-for-sale securities		-		15,529		-		15,529			-		-		-		-
Total	$	88,034	$	15,529	$	-	$	103,563		$	60,479	$	-	$	-	$	60,479

	June 30, 2012
June 30, 2015									June 30, 2015
	Level 1		Level 2		Level 3		Balance			Level 1		Level 2		Level 3		Balance
Cash equivalents	$	95,137	$	-	$	-	$	95,137		$	84,192	$	-	$	-	$	84,192
Available-for-sale securities		-		9,005		-		9,005			-		2,198		-		2,198
Total	$	95,137	$	9,005	$	-	$	104,142		$	84,192	$	2,198	$	-	$	86,390

Cash equivalents consist of money market accounts, and mutual funds in U.S. government and agency fixed income securities. We use quoted prices in active markets for identical assets or liabilities to determine fair value. There were no transfers between level 1 and level 2 during fiscal years ~~2013~~2016 or ~~2012.~~2015. At June 30, ~~of 2013~~2016 and ~~2012, $15.4~~2015, $7.8 million and $8.0 million, respectively, of cash equivalents were restricted and classified as a long-term asset.

~~At June 30, 2013~~We did not hold any available-for-sale securities ~~consist of $14.0 million of U.S. municipal bonds and $1.5 million of corporate bonds, and~~ at June 30, ~~2012,~~2016 as all municipal bonds matured and the proceeds were transferred to our operating cash accounts. As of June 30, 2015, available for sale securities consisted of ~~$7.5~~$2.2 million in U.S. municipal bonds, ~~and $1.5 million of corporate bonds. All securities in both years have~~with maturities of less than two years, and ~~are~~were rated A/A2 or better by S&P/Moody’s respectively. There were no material gross unrealized gains or losses on available-for-sale securities at June 30, ~~2013~~2016 or June 30, ~~2012.~~

~~Additional information on available-for-sale securities balances at June 30 are provided in the following table (in thousands).~~

Amortized
Cost Basis

Fair
Value

2013
$ 15,314 $ 15,529
2012
$ 8,862 $ 9,005
2015.

The contractual maturities of our available-for-sale investments as of June 30, ~~2013 and 2012~~2015 were as follows (in thousands):

June 30, 2013
June 30, 2015					June 30, 2015
								Amortized		Estimated
	Cost		Estimated Fair Value			Cost		Cost		Fair Value
Due in one year or less	$	13,213	$	13,067		$	2,296	$	2,155	$	2,198
Due after one year through five years	$	2,463	$	2,462		$	-			$	-

June 30, 2012

Cost

Estimated
Fair Value

Due in one year or less
$ 6,999 $ 6,862
Due after one year through five years
$ 2,130 $ 2,143

~~Proceeds~~There were no proceeds from sales of investments available for sale ~~were $11.2 million~~ in fiscal ~~2013~~2016 and ~~$7.2~~$15.4 million during fiscal ~~2012,~~2015, resulting in no material gain or loss in either period. There were no investments that have been in a continuous loss position for more than one year, and there have been no other-than-temporary impairments recognized.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

We measure certain assets, including our cost and equity method investments, at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the year ended June 30, ~~2013,~~2015, we ~~did not record any other-than-temporary impairments on those~~determined that certain long-lived assets ~~required to be measured~~of our retail design centers in Belgium were impaired, and an impairment charge of $0.8 million was recorded at ~~fair value on a nonrecurring basis. See also Note 18, “Restricted Cash and Investments”.~~that time.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

(18)Restricted Cash and Investments

At ~~both~~ June 30, ~~2013~~2016 and ~~2012~~2015 we held ~~$15.4~~$7.8 million and $8.0 million, respectively, of cash and investments in lieu of providing letters of credit for the benefit of the provider of our workmen’s compensation and other insurance ~~liabilities, and for the benefit of the issuer of our private label credit cards to ensure funding for delivery of products sold.~~liabilities. These restricted funds, which can be invested by us in money market mutual funds, and U.S. Treasuries and U.S. Government agency fixed income instruments with maturities of two years or less, cannot be withdrawn from our account without the prior written consent of the secured parties. These restricted funds are classified as long-term assets because they are not expected to be used within one year to fund operations. See also Note 17, “Financial Instruments”.

(19) Subsequent Events

None.

~~(20) Financial Information About the Parent, the Issuer and the Guarantors~~

~~On September 27, 2005, Global (the “Issuer”) issued $200 million aggregate principal amount of Senior Notes which have been guaranteed on a senior basis by Interiors (the “Parent”),~~

(20) Valuation and other wholly owned domestic subsidiaries of the Issuer and the Parent, including Ethan Allen Retail, Inc., Ethan Allen Operations, Inc., Ethan Allen Realty, LLC, Lake Avenue Associates, Inc. and Manor House, Inc. The subsidiary guarantors (other than the Parent) are collectively called the “Guarantors”. The guarantees of the Guarantors are unsecured. All of the guarantees are full, unconditional and joint and several and the Issuer and each of the Guarantors are 100% owned by the Parent. Our other subsidiaries which are not guarantors are called the “Non-Guarantors”.

The following tables set forth the condensed consolidating balance sheets as of June 30, 2013 and June 30, 2012, the condensed consolidating statements of operations for the twelve months ended June 30, 2013, 2012 and 2011, and the condensed consolidating statements of cash flows for the twelve months ended June 30, 2013, 2012 and 2011 of the Parent, the Issuer, the Guarantors and the Non-Guarantors.

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~Qualifying Accounts

~~CONDENSED CONSOLIDATING BALANCE SHEET~~

~~(In thousands)~~

~~June 30, 2013~~

Parent

Issuer

Guarantors

Non-Guarantors

Eliminations

Consolidated

Assets

Current assets:

Cash and cash equivalents
$ - $ 57,307 $ 12,463 $ 2,831 $ - �� $ 72,601
Marketable securities
- 15,529 - - - 15,529
Accounts receivable, net
- 12,061 212 4 - 12,277
Inventories
- - 161,683 5,463 (29,890 ) 137,256
Prepaid expenses and other current assets
- 9,882 11,275 1,750 - 22,907
Intercompany receivables
- 831,238 302,577 (3,726 ) (1,130,089 ) -
Total current assets
- 926,017 488,210 6,322 (1,159,979 ) 260,570
Property, plant and equipment, net
- 9,432 265,698 16,542 - 291,672
Goodwill and other intangible assets
- 37,905 7,223 - - 45,128
Restricted cash and investments
- 15,433 - - - 15,433
Other assets
- 2,188 1,488 806 - 4,482
Investment in affiliated companies
686,451 (111,647 ) - - (574,804 ) -
Total assets
$ 686,451 $ 879,328 $ 762,619 $ 23,670 $ (1,734,783 ) $ 617,285
Liabilities and Shareholders’ Equity

Current liabilities:

Current maturities of long-term debt
$ - $ - $ 480 $ - $ - $ 480
Customer deposits
- - 56,030 3,068 - 59,098
Accounts payable
- 7,390 15,097 508 - 22,995
Accrued expenses and other current liabilities
2,720 29,710 16,683 1,253 - 50,366
Intercompany payables
349,374 (7,460 ) 766,039 22,136 (1,130,089 ) -
Total current liabilities
352,094 29,640 854,329 26,965 (1,130,089 ) 132,939
Long-term debt
- 129,152 1,657 - - 130,809
Other long-term liabilities
- 4,492 14,355 333 - 19,180
Total liabilities
352,094 163,284 870,341 27,298 (1,130,089 ) 282,928
Shareholders’ equity
334,357 716,044 (107,722 ) (3,628 ) (604,694 ) 334,357
Total liabilities and shareholders’ equity
$ 686,451 $ 879,328 $ 762,619 $ 23,670 $
(1,734,783
) $ 617,285

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATING BALANCE SHEET~~

~~(In thousands)~~

~~June 30, 2012~~

Parent

Issuer

Guarantors

Non-Guarantors

Eliminations

Consolidated

Assets

Current assets:

Cash and cash equivalents
$ - $ 64,946 $ 12,276 $ 2,499 $ - $ 79,721
Marketable securities
- 9,005 - - - 9,005
Accounts receivable, net
- 14,648 263 8 - 14,919
Inventories
- - 182,382 4,736 (31,379 ) 155,739
Prepaid expenses and other current assets
- 6,191 14,689 2,528 - 23,408
Intercompany receivables
- 829,913 273,536 (8,515 ) (1,094,934 ) -
Total current assets
- 924,703 483,146 1,256 (1,126,313 ) 282,792
Property, plant and equipment, net
- 9,078 272,228 14,389 - 295,695
Goodwill and other intangible assets
- 37,905 7,223 - - 45,128
Restricted cash and investments
- 15,416 - - - 15,416
Other assets
- 4,948 809 - - 5,757
Investment in affiliated companies
652,868 (108,864 ) - - (544,004 ) -
Total assets
$ 652,868 $ 883,186 $ 763,406 $ 15,645 $ (1,670,317 ) $ 644,788
Liabilities and Shareholders’ Equity

Current liabilities:

Current maturities of long-term debt
$ - $ - $ 250 $ - $ - $ 250
Customer deposits
- - 62,479 2,986 - 65,465
Accounts payable
- 7,126 19,695 494 - 27,315
Accrued expenses and other current liabilities
2,713 35,752 18,537 1,045 - 58,047
Intercompany payables
328,287 327 756,513 9,807 (1,094,934 ) -
Total current liabilities
331,000 43,205 857,474 14,332 (1,094,934 ) 151,077
Long-term debt
- 152,986 1,264 - - 154,250
Other long-term liabilities
- 3,641 13,874 78 - 17,593
Total liabilities
331,000 199,832 872,612 14,410 (1,094,934 ) 322,920
Shareholders’ equity
321,868 683,354 (109,206 ) 1,235 (575,383 ) 321,868
Total liabilities and shareholders’ equity
$ 652,868 $ 883,186 $ 763,406 $ 15,645 $ (1,670,317 ) $ 644,788

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~(In thousands)~~

~~Year Ended June 30, 2013~~

Parent

Issuer

Guarantors

Non-Guarantors

Eliminations

Consolidated

Net sales
$ - $ 434,741 $ 796,194 $ 38,181 $ (540,033 ) $ 729,083
Cost of sales
- 327,723 520,570 23,963 (541,522 ) 330,734
Gross profit
- 107,018 275,624 14,218 1,489 398,349

Selling, general and administrative expenses
180 46,620 272,794 18,318 - 337,912
Operating income (loss)
(180 ) 60,398 2,830 (4,100 ) 1,489 60,437

Interest and other miscellaneous income, net
32,658 (4,229 ) 38 (75 ) (29,877 ) (1,485 )
Interest and other related financing costs
- 8,709 69 - - 8,778
Income before income tax expense
32,478 47,460 2,799 (4,175 ) (28,388 ) 50,174
Income tax expense (benefit)
- 16,291 1,320 85 - 17,696

Net income/(loss)
$ 32,478 $ 31,169 $ 1,479 $ (4,260 ) $ (28,388 ) $ 32,478

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~(In thousands)~~

~~Year Ended June 30, 2012~~

Parent

Issuer

Guarantors

Non-Guarantors

Eliminations

Consolidated

Net sales
$ - $ 456,895 $ 787,295 $ 33,417 $ (548,234 ) $ 729,373
Cost of sales
- 341,365 523,064 19,311 (544,655 ) 339,085
Gross profit
- 115,530 264,231 14,106 (3,579 ) 390,288

Selling, general and administrative expenses
180 45,690 280,480 14,241 - 340,591
Operating income (loss)
(180 ) 69,840 (16,249 ) (135 ) (3,579 ) 49,697

Interest and other miscellaneous income, net
49,874 (15,403 ) 216 17 (34,142 ) 562
Interest and other related financing costs
- 8,997 23 - - 9,020
Income before income tax expense
49,694 45,440 (16,056 ) (118 ) (37,721 ) 41,239
Income tax expense (benefit)
- (8,013 ) (523 ) 81 - (8,455 )

Net income/(loss)
$ 49,694 $ 53,453 $ (15,533 ) $ (199 ) $ (37,721 ) $ 49,694

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~(In thousands)~~

~~Year Ended June 30, 2011~~

Parent

Issuer

Guarantors

Non-Guarantors

Eliminations

Consolidated

Net sales
$ - $ 423,458 $ 718,660 $ 29,861 $ (493,019 ) $ 678,960
Cost of sales
- 321,706 481,814 16,198 (490,218 ) 329,500
Gross profit
- 101,752 236,846 13,663 (2,801 ) 349,460

Selling, general and administrative expenses
180 43,791 260,665 12,891 - 317,527
Operating income (loss)
(180 ) 57,961 (23,819 ) 772 (2,801 ) 31,933

Interest and other miscellaneous income, net
29,430 (17,842 ) 232 5 (6,261 ) 5,564
Interest and other related financing costs
- 10,847 279 - - 11,126
Income before income tax expense
29,250 29,272 (23,866 ) 777 (9,062 ) 26,371
Income tax expense (benefit)
- (2,959 ) - 80 - (2,879 )

Net income/(loss)
$ 29,250 $ 32,231 $ (23,866 ) $ 697 $ (9,062 ) $ 29,250

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~(In thousands)~~

~~Year Ended June 30, 2013~~

Parent

Issuer

Guarantors

Non-Guarantors

Eliminations

Consolidated

Net cash provided by operating activities
$ 20,821 $ 24,720 $ 12,336 $ 3,424 $ - $ 61,301
Cash flows from investing activities:

Capital expenditures
- (1,320 ) (14,847 ) (2,838 ) - (19,005 )
Acquisitions
- - (770 ) - - (770 )
Proceeds from the disposal of property, plant andequipment
- 61 3,222 - - 3,283
Change in restricted cash and investments
- (17 ) - - - (17 )
Purchase of marketable securities
- (18,247 ) - - - (18,247 )
Proceeds from the sale of marketable securities
- 11,165 - - - 11,165
Other
- 1,440 550 - - 1,990
Net cash used in investing activities
- (6,918 ) (11,845 ) (2,838 ) - (21,601 )

Cash flows from financing activities:

Payments on long-term debt
- (25,800 ) (304 ) - - (26,104 )
Purchases and other retirements of company stock
- - - - - -
Dividends paid
(22,220 ) - - - - (22,220 )
Other
1,399 359 - - - 1,758
Net cash used in financing activities
(20,821 ) (25,441 ) (304 ) - - (46,566 )

Effect of exchange rate changes on cash
- - - (254 ) - (254 )

Net increase (decrease) in cash and cash equivalents
- (7,639 ) 187 332 - (7,120 )

Cash and cash equivalents – beginning of period
- 64,946 12,276 2,499 - 79,721

Cash and cash equivalents – end of period
$ - $ 57,307 $ 12,463 $ 2,831 $ - $ 72,601

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~(In thousands)~~

~~Year Ended June 30, 2012~~

Parent

Issuer

Guarantors

Non-Guarantors

Eliminations

Consolidated

Net cash provided by operating activities
$ 9,187 $ 3,939 $ 18,441 $ 6,134 $ - $ 37,701
Cash flows from investing activities:

Capital expenditures
- (1,952 ) (15,721 ) (5,211 ) - (22,884 )
Acquisitions
- - (520 ) - - (520 )
Proceeds from the disposal of property, plant andequipment
- 12 1,861 - - 1,873
Change in restricted cash and investments
- 975 - - - 975
Purchase of marketable securities
- (3,647 ) - - - (3,647 )
Proceeds from the sale of marketable securities
- 7,230 - - - 7,230
Other
- 305 511 - - 816
Net cash provided by (used in) investing activities
- 2,923 (13,869 ) (5,211 ) - (16,157 )

Cash flows from financing activities:

Payments on long-term debt
- (11,917 ) (287 ) - - (12,204 )
Purchases and other retirements of company stock
(1,350 ) - - - - (1,350 )
Dividends paid
(8,062 ) - - - - (8,062 )
Other
225 238 275 - - 738
Net cash used in financing activities
(9,187 ) (11,679 ) (12 ) - - (20,878 )

Effect of exchange rate changes on cash
- - - 536 - 536

Net increase (decrease) in cash and cash equivalents
- (4,817 ) 4,560 1,459 - 1,202

Cash and cash equivalents – beginning of period
- 69,763 7,716 1,040 - 78,519

Cash and cash equivalents – end of period
$ - $ 64,946 $ 12,276 $ 2,499 $ - $ 79,721

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~(In thousands)~~

~~Year Ended June 30, 2011~~

Parent

Issuer

Guarantors

Non-Guarantors

Eliminations

Consolidated

Net cash provided by operating activities
$ 11,055 $ 38,590 $ 10,672 $ 2,845 $ - $ 63,162
Cash flows from investing activities:

Capital expenditures
- (1,182 ) (5,017 ) (2,895 ) - (9,094 )
Acquisitions
- - (2,957 ) - - (2,957 )
Proceeds from the disposal of property, plant andequipment
- - 3,196 - - 3,196
Change in restricted cash and investments
- 927 - - - 927
Purchase of marketable securities
- (9,466 ) - - - (9,466 )
Proceeds from the sale of marketable securities
- 7,319 - - - 7,319
Other
- 432 - - - 432
Net cash used in investing activities
- (1,970 ) (4,778 ) (2,895 ) - (9,643 )

Cash flows from financing activities:

Payments on long-term debt
- (33,989 ) (3,898 ) - - (37,887 )
Purchases and other retirements of company stock
(5,377 ) - - - - (5,377 )
Dividends paid
(5,754 ) - - - - (5,754 )
Other
76 (137 ) - - - (61 )
Net cash used in financing actvities
(11,055 ) (34,126 ) (3,898 ) - - (49,079 )

Effect of exchange rate changes on cash
- - - 227 �� - 227

Net increase in cash and cash equivalents
- 2,494 1,996 177 - 4,667

Cash and cash equivalents – beginning of period
- 67,269 5,720 863 - 73,852

Cash and cash equivalents – end of period
$ - $ 69,763 $ 7,716 $ 1,040 $ - $ 78,519

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

~~(21) VALUATION AND QUALIFYING ACCOUNTS~~

The following table provides information regarding the Company’s sales discounts, sales returns and allowance for doubtful accounts ~~and inventory valuation allowances~~ (in thousands):

Balance at
Beginning
of Period

Additions
(Reductions)
Charged to
Income

Adjustments
and/or
Deductions

Balance at
End of
Period

Accounts Receivable:

Sales discounts, sales returns andallowance for doubtful accounts:

June 30, 2013
$ 1,250 $ (20 ) $ - $ 1,230
June 30, 2012
$ 1,171 $ 9 $ 70 $ 1,250
June 30, 2011
$ 1,160 $ 11 $ - $ 1,171

Inventory:

Inventory valuation allowance:

June 30, 2013
$ 2,651 $ 61 $ - $ 2,712
June 30, 2012
$ 1,716 $ 935 $ - $ 2,651
June 30, 2011
$ 2,072 $ (356 ) $ - $ 1,716

Additions

Balance at

(Reductions)

Adjustments

Balance at

Beginning

Charged to

and/or

End of

of Period

Income

Deductions

Period

Accounts Receivable:

Sales discounts, sales returns andallowance for doubtful accounts:

June 30, 2016
$ 1,386 $ 253 $ - $ 1,639
June 30, 2015
1,442 (56 ) - 1,386
June 30, 2014
$ 1,230 $ 212 $ - $ 1,442

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

~~No changes in, or disagreements with, accountants as a result of accounting or financial disclosure matters, occurred during fiscal years 2013, 2012 or 2011.~~None.

Item 9A. Controls and Procedures

~~Management's Report on~~ Disclosure Controls and Procedures

~~Our~~We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including ~~the Chairman of the Board and~~our Chief Executive Officer ("CEO") and ~~the Vice President-Finance ("VPF"~~Chief Financial Officer("CFO"), ~~conducted~~as appropriate, to allow timely decisions regarding required financial disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including the CEO and the CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the CEO and ~~VPF~~CFO have concluded that, as of June 30, ~~2013,~~2016, our disclosure controls and procedures were effective in ensuring that material information relating to us (including our consolidated subsidiaries), which is required to be disclosed by us in our periodic reports filed or submitted ~~under~~to the ~~Exchange Act~~SEC is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including the CEO and ~~VPF,~~CFO, as appropriate, to allow timely decisions regarding required disclosure.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as(as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f)). ~~Under~~Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the ~~supervision~~reliability of financial reporting and the preparation of financial statements for external purposes in accordance with ~~the participation of management, including the CEO~~U.S. GAAP.

Our internal control over financial reporting includes those policies and ~~VPF, we conducted an evaluation~~procedures that:

•	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

•	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.

Management has assessed the effectiveness of our internal control over financial reporting based on the framework inInternal Control - Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission ~~(1992 framework~~)(2013 framework). Based on that evaluation, management concluded that our internal control over financial reporting was effective as of June 30, ~~2013.~~

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~2016 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with U.S. GAAP.

KPMG LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of June 30, ~~2013,~~2016, as stated in their report included under Item 8 of this Annual Report.

Changes in Internal Control over Financial Reporting

~~There have been no~~During fiscal 2016, we adopted the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 Internal Control–Integrated Framework to review, document and test our internal control over financial reporting. We may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business. These efforts may lead to various changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal quarter ended June 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Except as set forth below, the information required by Items 10, 11, 12, 13 and 14 ~~will appear in the~~is incorporated by reference to Ethan Allen Interiors Inc. proxy statement for the Annual Meeting of Shareholders scheduled to be held on November ~~19, 2013~~16, 2016 (the "Proxy Statement")~~. The Proxy Statement, which will~~ to be filed with the SEC pursuant to Regulation 14A ~~under~~within 120 days after the ~~Securities Exchange Act~~end of 1934, is incorporated by reference in this Annual Report pursuant to General Instruction G(3) of Form 10-K (other than the portions thereof not deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934). In addition, the information set forth below is provided as required by Item 10 and the listing standards of the New York Stock Exchange ("NYSE").our 2016 fiscal year.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Item 10. Directors, Executive Officers and Corporate Governance

Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our code of ethics can be accessed via our website ~~atwww.Ethanallen.com/~~at www.ethanallen.com/governance.

We intend to disclose any amendment of our Code of Ethics, or any waiver of any provision thereof, applicable to our principal executive officer and/or principal financial officer, or persons performing similar functions, directors and other executive officers on our website within 4 days of the date of such amendment or waiver. In the case of a waiver, the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver will also be disclosed.

Information contained on, or connected to, our website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report that we file with, or furnish to, the SEC.

Identification of Executive Officers
The information set forth under the heading “Executive Officers of the Registrant” in Part I, Item 1 of this form 10-K is also incorporated by reference in this section.
Audit Committee Financial Expert
Our Board of Directors has determined that we have four "audit committee financial experts", as defined under Item 407(d)(5)(ii) of Regulation S-K of the Securities Exchange Act of 1934, currently serving on our Audit Committee. Those members of our Audit Committee who are deemed to be audit committee financial experts are as follows:
James B. Carlson
Clinton A. Clark
~~Kristin Gamble~~Domenick J. Esposito
~~Dr.~~ James W. Schmotter
~~Don M. Wilson, III~~

All persons identified as audit committee financial experts are independent from management as defined by the applicable listing standards of the New York Stock Exchange.

The remaining information required by this Item will be included in and is incorporated herein by reference from our definitive proxy statement for our 2016 Annual Meeting of Shareholders to be filed with the SEC pursuant to Regulation 14A within 120 days after the end of our 2016 fiscal year, or our 2016 Proxy Statement.

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~Item 11. Executive Compensation

The information required by this Item will be included in and is incorporated herein by reference from our 2016 Proxy Statement.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related ~~Stockholder~~Shareholder Matters
~~NYSE Certification~~
~~Mr. Kathwari, Chief Executive Officer and President, has certified~~
The information required by this Item is incorporated by reference to the ~~NYSE, pursuant to Section 303A.12~~sections entitled ["Equity Compensation Plan Information"] and ["Security Ownership of Common Stock of Certain Owners and Management"] in the ~~NYSE’s Listing Company Manual, that he is unaware of any violation by the Company of the NYSE’s corporate governance listing standards.~~2016 Proxy Statement.

~~PART IV~~Item 13.Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated by reference to the section entitled ["Certain Relationships and Related Party Transactions"] and ["Corporate Governance —Director Independence "] in the 2016 Proxy Statement.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Item 14.Principal Accounting Fees and Services

The information required by this item is incorporated by reference to the sections entitled ["Audit Fees"]and ["Audit and Non-Audit Engagement Pre-Approval Policy "] in the 2016 Proxy Statement.
PART IV
Item 15. Exhibits and Financial Statement Schedules

~~I.               Listing of Documents~~

(a)(1)
Financial ~~Statements~~.Statements. Our Consolidated Financial Statements, included under Item 8 hereof, as required at June 30, ~~2013~~2016 and ~~2012,~~2015, and for the years ended June 30, ~~2013, 2012~~2016, 2015 and ~~2011~~2014 consist of the following:
~~Consolidated Balance Sheets~~
~~Consolidated Statements of Operations~~
~~Consolidated Statements of Cash Flows~~
~~Consolidated Statements of Shareholders' Equity~~
~~Notes to Consolidated Financial Statements~~
~~(2)~~
~~Financial Statement Schedule.~~ The financial statement schedules listed in Rule 5.04 of Regulation S-X have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

~~(3)~~ Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Consolidated Statements of Shareholders' Equity
Notes to Consolidated Financial Statements
(a)(2) Financial Statement Schedules. None.
(b) The following Exhibits are filed as part of this report on Form 10-K:


Exhibit
Number
Exhibit

3 (a)
Restated Certificate of Incorporation of the Company ~~(incorporated by reference to Exhibit 3(c) to the Registration Statement on Form S-1~~dated as of ~~the Company filed with the SEC on~~ March ~~16, 1993)~~
~~3 (a)-1~~
23, 1993, Certificate of Amendment to Restated Certificate of Incorporation dated as of August 5, 1997, Second Certificate of Amendment to Restated Certificate of Incorporation dated as of March 27, 1998, Third Certificate of Amendment to Restated Certificate of Incorporation dated as of April 28, 1999, Fourth Amendment to Restated Certificate of Incorporation dated as of December 5, 2013, Fifth Amendment to Restated Certificate of Incorporation dated as of December 11, 2015 (incorporated by reference ~~to Exhibit 3(c)-2~~ to the Quarterly Report on Form 10-Q of the Company filed with the SEC on ~~May 13, 1999)~~January 27, 2016)

~~3 (a)-2~~
Second Certificate of Amendment to Restated Certificate of Incorporation as of March 27, 1998 (incorporated by reference to Exhibit 3(c)-3 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 13, 1999)
~~3 (a)-3~~
Third Certificate of Amendment to Restated Certificate of Incorporation as of April 28, 1999 (incorporated by reference to Exhibit 3(c)-4 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 13, 1999)

3 (b)
Certificate of ~~Designation~~Designations relating to the New Convertible Preferred Stock ~~(incorporated~~dated as of March 23, 1993(incorporated by reference to Exhibit 3(b) to the ~~Registration Statement~~Annual Report on Form ~~S-1~~10‐K of ~~the Company~~theCompany filed with the SEC on ~~March 16, 1993)~~August 8, 2012)

3 (c)
Certificate of ~~Designation relating to the~~Designations of Series C Junior Participating Preferred Stock dated as of July 3, 1996, and Certificate of Amendment of Certificate of Designations of Series C Junior Participating Preferred Stock dated as of December 27, 2004 (incorporated by reference to Exhibit 13(c) to the Annual Report on Form ~~8-A~~10‐K of the Company filed with the SEC on ~~July 3, 1996)~~August 8, 2012)

~~3 (c)-1~~
Certificate of Amendment of Certificate of Designation of Series C Junior Participating Preferred Stock (incorporated by reference to Exhibit 3(c)-1 to the Annual Report on Form 10-K of the Company filed with the SEC on September 13, 2005

3 (d)
Amended and Restated By-laws of the Company (incorporated by reference to Exhibit 3(d) to the Registration Statement on Form S-1 of the Company filed with the SEC on March 16, 1993)

3 (e)
Certificate of Incorporation of Ethan Allen Global, Inc. (incorporated by reference to Exhibit 3(e) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

3 (f)
By-laws of Ethan Allen Global, Inc. (incorporated by reference to Exhibit 3(f) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

3 (g)
Restated Certificate of Incorporation of Ethan Allen Inc. (now known as, Ethan Allen Retail, Inc.) (incorporated by reference to Exhibit 3(g) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (g)-1
Certificate of Amendment of Restated Certificate of Incorporation of Ethan Allen Inc. (now known as Ethan Allen Retail, Inc.) as of June 29, 2005 (incorporated by reference to Exhibit 3(g)-1 to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (h)
Amended and Restated By-laws of Ethan Allen Inc. (now known as Ethan Allen Retail, Inc.) (incorporated by reference to Exhibit 3(h) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (i)
Certificate of Incorporation of Ethan Allen Manufacturing Corporation (now known as Ethan Allen Operations, Inc.) (incorporated by reference to Exhibit 3(i) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (i)-1
Certificate of Amendment of Certificate of Incorporation of Ethan Allen Manufacturing Corporation (now known as, Ethan Allen Operations, Inc.) as of June 29, 2005 (incorporated by reference to Exhibit 3(i)-1 to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (j)
By-laws of Ethan Allen Manufacturing Corporation (now known as, Ethan Allen Operations, Inc.) (incorporated by reference to Exhibit 3(j) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (k)
Certificate of Formation of Ethan Allen Realty, LLC (incorporated by reference to Exhibit 3(k) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (l)
Limited Liability Company Operating Agreement of Ethan Allen Realty, LLC (incorporated by reference to Exhibit 3(l) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (l)-1
Amendment No. 1 to Operating Agreement of Ethan Allen Realty, LLC as of June 30, 2005 (incorporated by reference to Exhibit 3(l)-1 to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (m)
Certificate of Incorporation of Lake Avenue Associates, Inc. (incorporated by reference to Exhibit 3(m) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (n)
By-laws of Lake Avenue Associates, Inc. (incorporated by reference to Exhibit 3(n) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (o)
Certificate of Incorporation of Manor House, Inc. (incorporated by reference to Exhibit 3(o) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

3 (p)
Restated By-laws of Manor House, Inc. (incorporated by reference to Exhibit 3(p) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)
~~4 (a)~~

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Form of outstanding 5.375% Senior Note due 2015 pursuant to Rule 144A of the Securities Act (incorporated by reference to Exhibit A to Exhibit 10.2 to the Current Report on Form 8-K of the Company filed with the SEC on September 30, 2005)
~~4 (b)~~
Indenture dated September 27, 2005, by and among Ethan Allen Global, Inc., the Guarantors named therein, and the Initial Purchaser named therein, relating to the Notes (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Ethan Allen Interiors Inc. filed with the SEC on September 30, 2005)
~~4 (c)~~
~~Form of Exchange Note (incorporated by reference to Exhibit 4(d) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)~~

10 (a)
Restated Directors Indemnification Agreement dated March 1993, among the Company and Ethan Allen and their Directors (incorporated by reference to Exhibit 10(c) to the Registration Statement on Form S-1 of the Company filed with the SEC on March 16, 1993)

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

10 (b)
The Ethan Allen Retirement Savings Plan as Amended and Restated, effective January 1, 2006 (incorporated by reference to Exhibit 10(b)-7 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 5, 2007

10 (c)
Sales Finance Agreement, dated June 25, 1999, between the Company and MBNA America Bank, N.A. (incorporated by reference to Exhibit 10(j) to the Annual Report on Form 10-K of the Company filed with the SEC on September 13, 2000)

10 (d)
Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of July 23, 2007, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference to Exhibit 10(e)-3 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 5, 2007)(confidential treatment granted under Rule 24b-2 as to certain portions which are omitted and filed separately with the ~~SEC.)~~SEC)

10 (d)-1
First Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of July 25, 2008, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference as Exhibit 10(e)-1 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 10, 2010)

10 (d)-2
Second Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of February 16, 2010, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference as Exhibit 10(e)-2 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 10, 2010) (confidential treatment granted under Rule 24b-2 as to certain portions which are omitted and filed separately with the SEC).

10 (d)-3
Third Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of June 30, 2011, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference to Exhibit 10(e)-3 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 3, 2010) ~~(Confidential~~(confidential treatment under Rule 24b-2 requested as to certain portions which are omitted and filed separately with the SEC).
10 (d)-4
Fourth Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement dated as of January 1, 2014, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc., and GE Capital Retail Bank (incorporated by reference to Exhibit 10(d)-4 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on January 31, 2014) (confidential treatment requested under Rule 24b-2 as to certain portions which are omitted and filed separately with the SEC)
10 (d)-5
Fifth Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement effective as of July 1, 2015, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc., and Synchrony Bank (incorporated by reference to Exhibit 10.(D)‐5 to the Annual Report on Form 10‐K of the Company filed with the SEC on August 12, 2015)

10 (e)
Employment Agreement ~~dated as of September 30, 2011, by and among Ethan Allen Interiors Inc., Ethan Allen Global Inc.~~between the Company and M. Farooq Kathwari ~~(incorporated herein by reference to Exhibit 10(I) to the Current Report on Form 8-K of the Company filed with the SEC on~~dated October ~~6, 2011).~~
~~10(e)-1~~
~~Amendment, dated as of March 14, 2013, to Employment Agreement, dated as of September 30, 2011, by and among Ethan Allen Interiors Inc., Ethan Allen Global Inc. and M. Farooq Kathwari~~1, 2015 (incorporated ~~herein~~ by reference to Exhibit 10.1 to the Company’s Current ~~Report~~Repot on Form 8-K ~~of the Company~~ filed with the SEC on ~~March 14, 2013).~~October 2, 2015)

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
10 (e)-1
Form of Performance-Based Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Repot on Form 8-K filed with the SEC on October 2, 2015)
10 (e)-2
Change in Control Severance Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Repot on Form 8-K filed with the SEC on October 2, 2015)

10 (f)-1
Credit Agreement, dated as of May 29, 2009, among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P. Morgan Chase Bank, N.A., and Capital One Leverage Finance Corp (confidential treatment requested as to certain ~~portions. Incorporated~~portions (Incorporated by reference to Exhibit 10(g)-2 to the Annual Report on Form 10-K of the Company filed with the SEC on August 24, 2009)

10 (f)-2
Amendment No. 1, dated as of October 23, 2009 to the Credit Agreement dated May 29, 2009, among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P.Morgan Chase Bank, N.A., and the lenders thereunder (incorporated by reference to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 9, 2009).

10 (f)-3
Amendment No. 2, dated as of March 25, 2011, to the Credit Agreement dated May 29, 2009, among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P.Morgan Chase Bank, N.A., and Wells Fargo Bank, National Association (incorporated by reference to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 5, 2011)
10 (f)-4
Amended and Restated Credit Agreement, dated October 21, 2014, among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P. Morgan Chase Bank, N.A., and Capital One, National Association (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed with the SEC on October 22, 2014)
10 (f)-5
Amendment No. 2 Dated as of September 10, 2015 to Amended and restated credit agreement dated as of October 21, 2014 among Ethan Allen Global, Inc., and J.P. Morgan Chase Bank, N.A. as Administrative Agent and Syndication Agent, and Capital One, National Association as Documention Agent dated as of October 21, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s QuarterlyRepot on Form 10-Q filed with the SEC on September 11, 2015)
10 (f)-6
Amendment No. 3, dated as of January 22, 2016, to the Amended and Restated Credit Agreement dated as of October 21, 2014 among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P.Morgan Chase Bank, N.A. and Capital One, National Association (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on January 27, 2016).

10 (g)
Amended and Restated 1992 Stock Option Plan (incorporated by reference to Exhibit 10(f) to the Current Report on Form 8-K of the Company filed with the SEC on November 19, 2007)

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

10 (g)-1
Form of Option Agreement for Grants to Independent Directors (incorporated by reference to Exhibit 10(h)-4 to the Annual Report on Form 10-K of the Company filed with the SEC on September 13, ~~2005~~2005)

10 (g)-2
Form of Option Agreement for Grants to Employees (incorporated by reference to Exhibit 10(h)-5 to the Annual Report on Form 10-K of the Company filed with the SEC on September 13, 2005

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

10 (g)-3
Form of Restricted Stock Agreement for Executives (incorporated by reference to Exhibit 10(f)-1 to the Current Report on Form ~~10-8~~8-K of the Company filed with the SEC on November 19, ~~2007~~2007)

10 (g)-4
Form of Restricted Stock Agreement for Directors (incorporated by reference to Exhibit 10(f)-2 to the Current Report on Form 8-K of the Company filed with the SEC on November 19, ~~2007~~2007)

10 ~~(h)~~(g)-5
~~Purchase Agreement dated September 22, 2005, by and between Ethan Allen Global, Inc., the Guarantors named therein, and the Initial Purchaser named therein, relating to the Initial Notes~~Form of performance condition option agreement for employees (incorporated by reference to Exhibit ~~10.1~~10(g)-5 to the ~~Current~~Quarterly Report on Form ~~8-K~~10-Q of the Company filed with the SEC on ~~September 30, 2005)~~May 1, 2014)

~~10 (i)~~
Registration Rights Agreement dated September 27, 2005, by and among Ethan Allen Global, Inc., the Guarantors named therein, and the Initial Purchaser named therein, relating to the Notes (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Ethan Allen Interiors Inc. filed with the SEC on September 30, 2005)
*
~~12 (a)~~
~~Computation of Ratio of Earnings to Fixed Charges~~
*
21
List of wholly-owned subsidiaries of the Company
*
23
Consent of KPMG LLP
*
31.1
~~Rule 13a-14(a)~~ Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*
31.2
~~Rule 13a-14(a)~~ Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*
32.1
~~Section 1350~~ Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*
32.2
~~Section 1350~~ Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**
101.INS
XBRL Instance Document
**
101.SCH
XBRL Taxonomy Extension Schema
**
101.CAL
XBRL Taxonomy Extension Calculation Linkbase
**
101.DEF
XBRL Taxonomy Extension Definition Linkbase
**
101.LAB
XBRL Taxonomy Extension Labels Linkbase
**
101.PRE
XBRL Taxonomy Extension Presentation Linkbase
* ~~Filed~~Furnished herewith.
** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.



ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements ~~of Section~~ofSection 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

ETHAN ALLEN INTERIORS INC.
(Registrant)

~~By/~~By/s/M. Farooq Kathwari
DATE: August 8, 2016
(M. Farooq Kathwari)
Chairman, President and Chief Executive Officer
(Principal Executive Officer)

~~By/~~By/s/ Corey Whitely                                                     ~~David R. Callen~~
DATE: August 8, 2016
(~~David R. Callen)~~Corey Whitely)
Executive Vice President, ~~Finance~~Administration,
        Chief Financial Officer and Treasurer
(Principal Financial ~~Officer and~~
~~Principal Accounting~~ Officer)
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below hereby constitutes and appoints M. Farooq Kathwari and Corey Whitely, and each of them individually, his or her true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to (i) act on, sign and file with the Securities and Exchange Commission any and all amendments to this Report together with all schedules and exhibits thereto, (ii) act on, sign and file with the Securities and Exchange Commission any and all exhibits to this Report and any and all exhibits and schedules thereto, (iii) act on, sign and file any and all such certificates, notices, communications, reports, instruments, agreements and other documents as may be necessary or appropriate in connection therewith and (iv) take any and all such actions which may be necessary or appropriate in connection therewith, granting unto such agents, proxies and attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing necessary or appropriate to be done, as fully for all intents and purposes as he or she might or could do in person, and hereby approving, ratifying and confirming all that such agents, proxies and attorneys-in-fact, any of them or any of his, her or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

/s/ M. Farooq Kathwari
Chairman, President and Chief Executive Officer
(M. Farooq Kathwari)
(Principal Executive Officer)
/s/ ~~David R. Callen~~                                                      Corey Whitely
Executive Vice President, Administration,
(Corey Whitely)
Chief Financial Officer and Treasurer
(Principal Financial Officer)
/s/ John S. Bedford
Vice President, ~~Finance and Treasurer~~Corporate Controller
(~~David R. Callen)~~John S. Bedford)
(~~Principal Financial Officer and~~
Principal Accounting Officer)

/s/ James B. Carlson
Director
(James B. Carlson)

/s/ Clinton A. Clark
Director
(Clinton A. Clark)



/s/ John J. Dooner Jr.
Director
(John Dooner)

/s/ ~~Kristin Gamble~~                                                       Domenick J. Esposito
Director
(~~Kristin Gamble)~~Dominick Esposito)

/s/ Mary Garrett
Director
(Mary Garrett)
/s/ James W. Schmotter
Director
(James W. Schmotter)

/s/ ~~Don M. Wilson, III~~                                               Tara I. Stacom
Director
(~~Don M. Wilson, III)~~Tara I. Stacom)

~~/s/ Frank G. Wisner~~
~~Director~~
~~(Frank G. Wisner)~~

Date: August ~~16, 2013~~8, 2016

74
71

Delaware		06-1275288
~~(State~~(State or other jurisdiction of incorporation or organization)	~~(I.R.S.~~	(I.R.S. Employer Identification No.)

Ethan Allen Drive, Danbury, CT	~~0681~~	06811
(Address of principal executive offices)		(Zip Code)

~~Securities registered pursuant to Section 12(b) of the Act:~~

Title of Each Class	Name of Each Exchange On Which Registered
	Common Stock, $.01 par value	New York Stock Exchange, Inc.

Large accelerated ~~filer[ ]~~filer	[X]	Accelerated ~~filer[X]~~filer	[ ]
Non-accelerated ~~filer[~~filer	[ ]	Smaller reporting ~~company[~~company	[ ]

	Market Price				Dividends
	High		Low		Per Share
Fiscal 2016
First Quarter	$	31.87	$	25.76		0.14
Second Quarter		29.65		25.30		0.14
Third Quarter		32.10		22.46		0.17
Fourth Quarter		35.31		29.39		0.17

Fiscal 2015
First Quarter	$	26.84	$	22.06	$	0.12
Second Quarter		31.24		22.58		0.12
Third Quarter		32.63		25.31		0.12
Fourth Quarter		28.25		23.33		0.14

Item	Page			Page

PART I
			PART I

1.	Business	3	Business	3

1A.	Risk Factors	11	Risk Factors	12

1B.	Unresolved Staff Comments	16	Unresolved Staff Comments	18

2.	Properties	16	Properties	18

3.	Legal Proceedings	17	Legal Proceedings	19

4.	Mine Safety Disclosures	17	Mine Safety Disclosures	19

PART II
			PART II

5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20

6.	Selected Financial Data	19	Selected Financial Data	22

7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21	Management's Discussion and Analysis of Financial Condition and Results of Operation	23

7A.	Quantitative and Qualitative Disclosures About Market Risk	33	Quantitative and Qualitative Disclosures About Market Risk	37

8.	Financial Statements and Supplementary Data	33	Financial Statements and Supplementary Data	37

9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	65	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	65

9A.	Controls and Procedures	65	Controls and Procedures	65

9B.	Other Information	66	Other Information	66

PART III
			PART III

10.	Directors, Executive Officers and Corporate Governance	66	Directors, Executive Officers and Corporate Governance	67

11.	Executive Compensation	66	Executive Compensation	67

12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	66	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	67

13.	Certain Relationships and Related Transactions, and Director Independence	66	Certain Relationships and Related Transactions, and Director Independence	67

14.	Principal Accountant Fees and Services	66	Principal Accountant Fees and Services	68

PART IV
			PART IV

15.	Exhibits and Financial Statement Schedules	67	Exhibits and Financial Statement Schedules	68

	Signatures	71	Signatures	73

	Year-to-date Fiscal 2016									Year-to-date Fiscal 2015
	Independent retailers			Company- operated			Total			Independent retailers			Company- operated			Total
Retail Design Center location activity:
Balance at beginning of period		155			144			299			152			143			295
New locations		15			10			25			22			4			26
Closures		(16	)		(12	)		(28	)		(17	)		(5	)		(22	)
Transfers		(1	)		1			-			(2	)		2			-
Balance at end of period		153			143			296			155			144			299
Relocations (in new and closures)		2			6			8			7			2			9

Retail Design Center geographic locations:
United States		50			137			187			58			137			195
Canada		-			6			6			2			6			8
Asia		94			-			94			87			-			87
Europe		2			-			2			1			1			2
Middle East		7			-			7			7			-			7
Total		153			143			296			155			144			299

	Retail Design Center Category
	Company Operated		Independently Operated
United States		139		62
Canada		6		3
Asia		-		79
Europe		2		-
Middle East		-		4
Total		147		148

	Fiscal years ended June 30,
	2016		%			2015		%			2014		%
Net sales	$	794.2		100.0	%	$	754.6		100.0	%	$	746.7		100.0	%
Gross profit	$	442.2		55.7	%	$	411.2		54.5	%	$	406.5		54.4	%
SG&A	$	353.1		44.5	%	$	345.2		45.7	%	$	336.9		45.1	%
Operating income		89.2		11.2	%		65.9		8.7	%		69.6		9.3	%
Net income		56.6		7.1	%		37.1		4.9	%		42.9		5.7	%
Earnings per diluted share	$	2.00				$	1.27				$	1.47
Net cash provided by operating activities	$	58.4				$	55.1				$	59.9

Revolving Credit Facility due 10/21/2019	$	25.0
Term Loan due 10/21/2019	$	16.2
Capital leases	$	1.5
Unamortized debt issuance costs	$	(0.9	)
Total debt	$	41.8
Less current maturities	$	3.0
Total long-term	$	38.8

			Less						More
			than 1		1-3		4-5		than 5
	Total		Year		Years		Years		Years
Long-term debt obligations:
Debt maturities	$	41.8	$	3.0	$	4.7	$	34.1	$	-
Contractual interest		2.7		0.9		1.6		0.2		-
Operating lease obligations		215.4		33.9		60.7		46.5		74.3
Letters of credit		0.2		0.2		-		-		-
Purchase obligations (1)		-		-		-		-		-
Other long-term liabilities		0.2		-		-		0.0		0.2
Total contractual obligations	$	260.3	$	37.9	$	67.0	$	80.9	$	74.5

	Total		Less than 1 Year		1-3 Years		4-5 Years		More than 5 Years
Long-term debt obligations:
Debt maturities	$	131,289	$	480	$	130,176	$	633	$	-
Contractual interest		15,847		7,036		8,792		19		-
Operating lease obligations		202,531		30,485		51,936		40,311		79,799
Letters of credit		586		586		-		-		-
Purchase obligations (1)		-		-		-		-		-
Other long-term liabilities		230		2		5		45		178
Total contractual obligations	$	350,483	$	38,589	$	190,909	$	41,008	$	79,977

	Common Stock		Additional Paid-in Capital			Treasury Stock			Other Comprehensive Income			Retained Earnings			Non- Controlling Interests			Total
Balance at June 30, 2010		483		358,722			(581,331	)		1,244			479,341			-			258,459
Stock issued on share-based awards		1		75			-			-			-			-			76
Compensation expense associated with share-based awards		-		931			-			-			-			-			931
Purchase/retirement shares of company stock		-		-			(2,787	)		-			-			-			(2,787	)
Issuance of treasury shares for 401k match		-		-			1,427			-			(345	)		-			1,082
Dividends declared on common stock		-		-			-			-			(6,338	)		-			(6,338	)
Comprehensive income		-		-			-			1,014			29,250			-			30,264
Balance at June 30, 2011		484		359,728			(582,691	)		2,258			501,908			-			281,687
Stock issued on share-based awards		1		224			-			-			-			-			225
Compensation expense associated with share-based awards		-		1,702			-			-			-			-			1,702
Tax benefit associated with exercise of share based awards		-		(489	)		-			-			-			-			(489	)
Purchase/retirement of company stock		-		-			(1,350	)		-			-			-			(1,350	)
Dividends declared on common stock		-		-			-			-			(8,684	)		-			(8,684	)
Increase from business combination																275			275
Comprehensive income (loss)		-		-			-			(1,117	)		49,694			(75	)		48,502
Balance at June 30, 2012		485		361,165			(584,041	)		1,141			542,918			200			321,868
Stock issued on share-based awards		1		1,398			-			-			-			-			1,399
Compensation expense associated with share-based awards		-		1,401			-			-			-			-			1,401
Tax benefit associated with exercise of share based awards		-		(26	)		-			-			-			-			(26	)
Dividends declared on common stock		-		-			-			-			(22,313	)		-			(22,313	)
Comprehensive income (loss)		-		-			-			(457	)		32,478			7			32,028
Balance at June 30, 2013	$	486	$	363,938		$	(584,041	)	$	684		$	553,083		$	207		$	334,357

	2013		2012

5.375% Senior Notes due 2015	$	129,152	$	152,986
Capital leases and other		2,137		1,514
Total debt		131,289		154,500
Less curent maturities		480		250
Total long-term debt	$	130,809	$	154,250

Fiscal Year Ended June 30, 2013
	Minimum Future Lease Payments		Minimum Future Sublease Rentals
2014	$	30,485	$	2,683
2015		27,780		2,264
2016		24,156		1,408
2017		21,082		1,262
2018		19,229		1,161
Subsequent to 2018		79,799		2,630
Total	$	202,531	$	11,408

Expected income tax expense	$	17,561		35.0	%	$	14,434		35.0	%	$	9,228		35.0	%
State income taxes, net of federal income tax		1,467		2.9	%		1,038		2.5	%		750		2.8	%
Valuation allowance		631		1.3	%		(21,237	)	-51.5	%		(12,672	)	-48.1	%
Section 199 Qualified Production Activities deduction		(1,157	)	-2.3	%		(1,001	)	-2.4	%		(705	)	-2.7	%
Unrecognized tax expense (benefit)		30		0.1	%		(1,483	)	-3.6	%		490		1.9	%
Other, net		(836	)	-1.7	%		(206	)	-0.5	%		30		0.1	%
Actual income tax expense (benefit)	$	17,696		35.3	%	$	(8,455	)	-20.5	%	$	(2,879	)	-10.9	%


Deferred tax liabilities:
Inventories		775		2,068
Property, plant and equipment		1,121		536
Intangible assets other than goodwill		14,264		14,264
Commissions		3,590		3,880
Other, net		20		22
Total deferred tax liability		19,770		20,770
Net deferred tax asset	$	2,502	$	5,276

	June 30 2013			June 30 2012			June 30 2011
Total Assets:
Wholesale segment	$	291,942		$	309,573		$	309,081
Retail segment		355,233			366,594			347,044
Inventory profit elimination (2)		(29,890	)		(31,379	)		(27,800	)
Consolidated Total	$	617,285		$	644,788		$	628,325

	(1)	Represents the change in wholesale profit contained in Ethan Allen design center inventory at the end of the period.

	(2)	~~(2)~~ The wholesale profit contained in the retail segment inventory that has not yet been realized. These profits are realized when the related inventory is sold.

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations				Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	57,307		$	12,463		$	2,831		$	-		��	$	72,601
Marketable securities		-		15,529			-			-			-				15,529
Accounts receivable, net		-		12,061			212			4			-				12,277
Inventories		-		-			161,683			5,463			(29,890	)			137,256
Prepaid expenses and other current assets		-		9,882			11,275			1,750			-				22,907
Intercompany receivables		-		831,238			302,577			(3,726	)		(1,130,089	)			-
Total current assets		-		926,017			488,210			6,322			(1,159,979	)			260,570
Property, plant and equipment, net		-		9,432			265,698			16,542			-				291,672
Goodwill and other intangible assets		-		37,905			7,223			-			-				45,128
Restricted cash and investments		-		15,433			-			-			-				15,433
Other assets		-		2,188			1,488			806			-				4,482
Investment in affiliated companies		686,451		(111,647	)		-			-			(574,804	)			-
Total assets	$	686,451	$	879,328		$	762,619		$	23,670		$	(1,734,783	)		$	617,285
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	-	$	-		$	480		$	-		$	-			$	480
Customer deposits		-		-			56,030			3,068			-				59,098
Accounts payable		-		7,390			15,097			508			-				22,995
Accrued expenses and other current liabilities		2,720		29,710			16,683			1,253			-				50,366
Intercompany payables		349,374		(7,460	)		766,039			22,136			(1,130,089	)			-
Total current liabilities		352,094		29,640			854,329			26,965			(1,130,089	)			132,939
Long-term debt		-		129,152			1,657			-			-				130,809
Other long-term liabilities		-		4,492			14,355			333			-				19,180
Total liabilities		352,094		163,284			870,341			27,298			(1,130,089	)			282,928
Shareholders’ equity		334,357		716,044			(107,722	)		(3,628	)		(604,694	)			334,357
Total liabilities and shareholders’ equity	$	686,451	$	879,328		$	762,619		$	23,670		$	(1,734,783	)		$	617,285

	Balance at Beginning of Period		Additions (Reductions) Charged to Income			Adjustments and/or Deductions		Balance at End of Period
Accounts Receivable:
Sales discounts, sales returns andallowance for doubtful accounts:

June 30, 2013	$	1,250	$	(20	)	$	-	$	1,230
June 30, 2012	$	1,171	$	9		$	70	$	1,250
June 30, 2011	$	1,160	$	11		$	-	$	1,171

Inventory:
Inventory valuation allowance:

June 30, 2013	$	2,651	$	61		$	-	$	2,712
June 30, 2012	$	1,716	$	935		$	-	$	2,651
June 30, 2011	$	2,072	$	(356	)	$	-	$	1,716

			Additions
	Balance at		(Reductions)			Adjustments		Balance at
	Beginning		Charged to			and/or		End of
	of Period		Income			Deductions		Period
Accounts Receivable:
Sales discounts, sales returns andallowance for doubtful accounts:
June 30, 2016	$	1,386	$	253		$	-	$	1,639
June 30, 2015		1,442		(56	)		-		1,386
June 30, 2014	$	1,230	$	212		$	-	$	1,442

	~~(2)~~	~~Financial Statement Schedule.~~ The financial statement schedules listed in Rule 5.04 of Regulation S-X have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

	~~(3)~~	Consolidated Balance Sheets

		Consolidated Statements of Operations

		Consolidated Statements of Cash Flows

		Consolidated Statements of Shareholders' Equity

		Notes to Consolidated Financial Statements

	(a)(2)	Financial Statement Schedules. None.


	(b)	The following Exhibits are filed as part of this report on Form 10-K:

	Exhibit Number	Exhibit

	3 (a)	Restated Certificate of Incorporation of the Company ~~(incorporated by reference to Exhibit 3(c) to the Registration Statement on Form S-1~~dated as of ~~the Company filed with the SEC on~~ March ~~16, 1993)~~
	~~3 (a)-1~~	23, 1993, Certificate of Amendment to Restated Certificate of Incorporation dated as of August 5, 1997, Second Certificate of Amendment to Restated Certificate of Incorporation dated as of March 27, 1998, Third Certificate of Amendment to Restated Certificate of Incorporation dated as of April 28, 1999, Fourth Amendment to Restated Certificate of Incorporation dated as of December 5, 2013, Fifth Amendment to Restated Certificate of Incorporation dated as of December 11, 2015 (incorporated by reference ~~to Exhibit 3(c)-2~~ to the Quarterly Report on Form 10-Q of the Company filed with the SEC on ~~May 13, 1999)~~January 27, 2016)
	~~3 (a)-2~~	Second Certificate of Amendment to Restated Certificate of Incorporation as of March 27, 1998 (incorporated by reference to Exhibit 3(c)-3 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 13, 1999)
	~~3 (a)-3~~	Third Certificate of Amendment to Restated Certificate of Incorporation as of April 28, 1999 (incorporated by reference to Exhibit 3(c)-4 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 13, 1999)
	3 (b)	Certificate of ~~Designation~~Designations relating to the New Convertible Preferred Stock ~~(incorporated~~dated as of March 23, 1993(incorporated by reference to Exhibit 3(b) to the ~~Registration Statement~~Annual Report on Form ~~S-1~~10‐K of ~~the Company~~theCompany filed with the SEC on ~~March 16, 1993)~~August 8, 2012)

	3 (c)	Certificate of ~~Designation relating to the~~Designations of Series C Junior Participating Preferred Stock dated as of July 3, 1996, and Certificate of Amendment of Certificate of Designations of Series C Junior Participating Preferred Stock dated as of December 27, 2004 (incorporated by reference to Exhibit 13(c) to the Annual Report on Form ~~8-A~~10‐K of the Company filed with the SEC on ~~July 3, 1996)~~August 8, 2012)
	~~3 (c)-1~~	Certificate of Amendment of Certificate of Designation of Series C Junior Participating Preferred Stock (incorporated by reference to Exhibit 3(c)-1 to the Annual Report on Form 10-K of the Company filed with the SEC on September 13, 2005
	3 (d)	Amended and Restated By-laws of the Company (incorporated by reference to Exhibit 3(d) to the Registration Statement on Form S-1 of the Company filed with the SEC on March 16, 1993)

	3 (e)	Certificate of Incorporation of Ethan Allen Global, Inc. (incorporated by reference to Exhibit 3(e) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)


	3 (f)	By-laws of Ethan Allen Global, Inc. (incorporated by reference to Exhibit 3(f) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (g)	Restated Certificate of Incorporation of Ethan Allen Inc. (now known as, Ethan Allen Retail, Inc.) (incorporated by reference to Exhibit 3(g) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (g)-1	Certificate of Amendment of Restated Certificate of Incorporation of Ethan Allen Inc. (now known as Ethan Allen Retail, Inc.) as of June 29, 2005 (incorporated by reference to Exhibit 3(g)-1 to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (h)	Amended and Restated By-laws of Ethan Allen Inc. (now known as Ethan Allen Retail, Inc.) (incorporated by reference to Exhibit 3(h) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (i)	Certificate of Incorporation of Ethan Allen Manufacturing Corporation (now known as Ethan Allen Operations, Inc.) (incorporated by reference to Exhibit 3(i) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (i)-1	Certificate of Amendment of Certificate of Incorporation of Ethan Allen Manufacturing Corporation (now known as, Ethan Allen Operations, Inc.) as of June 29, 2005 (incorporated by reference to Exhibit 3(i)-1 to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (j)	By-laws of Ethan Allen Manufacturing Corporation (now known as, Ethan Allen Operations, Inc.) (incorporated by reference to Exhibit 3(j) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (k)	Certificate of Formation of Ethan Allen Realty, LLC (incorporated by reference to Exhibit 3(k) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (l)	Limited Liability Company Operating Agreement of Ethan Allen Realty, LLC (incorporated by reference to Exhibit 3(l) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (l)-1	Amendment No. 1 to Operating Agreement of Ethan Allen Realty, LLC as of June 30, 2005 (incorporated by reference to Exhibit 3(l)-1 to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (m)	Certificate of Incorporation of Lake Avenue Associates, Inc. (incorporated by reference to Exhibit 3(m) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (n)	By-laws of Lake Avenue Associates, Inc. (incorporated by reference to Exhibit 3(n) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (o)	Certificate of Incorporation of Manor House, Inc. (incorporated by reference to Exhibit 3(o) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (p)	Restated By-laws of Manor House, Inc. (incorporated by reference to Exhibit 3(p) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)
	~~4 (a)~~


	10 (b)	The Ethan Allen Retirement Savings Plan as Amended and Restated, effective January 1, 2006 (incorporated by reference to Exhibit 10(b)-7 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 5, 2007

	10 (c)	Sales Finance Agreement, dated June 25, 1999, between the Company and MBNA America Bank, N.A. (incorporated by reference to Exhibit 10(j) to the Annual Report on Form 10-K of the Company filed with the SEC on September 13, 2000)

	10 (d)	Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of July 23, 2007, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference to Exhibit 10(e)-3 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 5, 2007)(confidential treatment granted under Rule 24b-2 as to certain portions which are omitted and filed separately with the ~~SEC.)~~SEC)

	10 (d)-1	First Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of July 25, 2008, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference as Exhibit 10(e)-1 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 10, 2010)

	10 (d)-2	Second Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of February 16, 2010, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference as Exhibit 10(e)-2 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 10, 2010) (confidential treatment granted under Rule 24b-2 as to certain portions which are omitted and filed separately with the SEC).

	10 (d)-3	Third Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of June 30, 2011, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference to Exhibit 10(e)-3 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 3, 2010) ~~(Confidential~~(confidential treatment under Rule 24b-2 requested as to certain portions which are omitted and filed separately with the SEC).

	10 (d)-4	Fourth Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement dated as of January 1, 2014, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc., and GE Capital Retail Bank (incorporated by reference to Exhibit 10(d)-4 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on January 31, 2014) (confidential treatment requested under Rule 24b-2 as to certain portions which are omitted and filed separately with the SEC)

	10 (d)-5	Fifth Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement effective as of July 1, 2015, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc., and Synchrony Bank (incorporated by reference to Exhibit 10.(D)‐5 to the Annual Report on Form 10‐K of the Company filed with the SEC on August 12, 2015)

	10 (e)	Employment Agreement ~~dated as of September 30, 2011, by and among Ethan Allen Interiors Inc., Ethan Allen Global Inc.~~between the Company and M. Farooq Kathwari ~~(incorporated herein by reference to Exhibit 10(I) to the Current Report on Form 8-K of the Company filed with the SEC on~~dated October ~~6, 2011).~~
	~~10(e)-1~~	~~Amendment, dated as of March 14, 2013, to Employment Agreement, dated as of September 30, 2011, by and among Ethan Allen Interiors Inc., Ethan Allen Global Inc. and M. Farooq Kathwari~~1, 2015 (incorporated ~~herein~~ by reference to Exhibit 10.1 to the Company’s Current ~~Report~~Repot on Form 8-K ~~of the Company~~ filed with the SEC on ~~March 14, 2013).~~October 2, 2015)

	10 (e)-1	Form of Performance-Based Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Repot on Form 8-K filed with the SEC on October 2, 2015)

	10 (e)-2	Change in Control Severance Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Repot on Form 8-K filed with the SEC on October 2, 2015)

	10 (f)-1	Credit Agreement, dated as of May 29, 2009, among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P. Morgan Chase Bank, N.A., and Capital One Leverage Finance Corp (confidential treatment requested as to certain ~~portions. Incorporated~~portions (Incorporated by reference to Exhibit 10(g)-2 to the Annual Report on Form 10-K of the Company filed with the SEC on August 24, 2009)

	10 (f)-2	Amendment No. 1, dated as of October 23, 2009 to the Credit Agreement dated May 29, 2009, among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P.Morgan Chase Bank, N.A., and the lenders thereunder (incorporated by reference to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 9, 2009).

	10 (f)-3	Amendment No. 2, dated as of March 25, 2011, to the Credit Agreement dated May 29, 2009, among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P.Morgan Chase Bank, N.A., and Wells Fargo Bank, National Association (incorporated by reference to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 5, 2011)

	10 (f)-4	Amended and Restated Credit Agreement, dated October 21, 2014, among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P. Morgan Chase Bank, N.A., and Capital One, National Association (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed with the SEC on October 22, 2014)

	10 (f)-5	Amendment No. 2 Dated as of September 10, 2015 to Amended and restated credit agreement dated as of October 21, 2014 among Ethan Allen Global, Inc., and J.P. Morgan Chase Bank, N.A. as Administrative Agent and Syndication Agent, and Capital One, National Association as Documention Agent dated as of October 21, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s QuarterlyRepot on Form 10-Q filed with the SEC on September 11, 2015)

	10 (f)-6	Amendment No. 3, dated as of January 22, 2016, to the Amended and Restated Credit Agreement dated as of October 21, 2014 among Ethan Allen Global, Inc., Ethan Allen Interiors Inc., J.P.Morgan Chase Bank, N.A. and Capital One, National Association (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on January 27, 2016).


	10 (g)-1	Form of Option Agreement for Grants to Independent Directors (incorporated by reference to Exhibit 10(h)-4 to the Annual Report on Form 10-K of the Company filed with the SEC on September 13, ~~2005~~2005)

	10 (g)-2	Form of Option Agreement for Grants to Employees (incorporated by reference to Exhibit 10(h)-5 to the Annual Report on Form 10-K of the Company filed with the SEC on September 13, 2005

	10 (g)-3	Form of Restricted Stock Agreement for Executives (incorporated by reference to Exhibit 10(f)-1 to the Current Report on Form ~~10-8~~8-K of the Company filed with the SEC on November 19, ~~2007~~2007)

	10 (g)-4	Form of Restricted Stock Agreement for Directors (incorporated by reference to Exhibit 10(f)-2 to the Current Report on Form 8-K of the Company filed with the SEC on November 19, ~~2007~~2007)

	10 ~~(h)~~(g)-5	~~Purchase Agreement dated September 22, 2005, by and between Ethan Allen Global, Inc., the Guarantors named therein, and the Initial Purchaser named therein, relating to the Initial Notes~~Form of performance condition option agreement for employees (incorporated by reference to Exhibit ~~10.1~~10(g)-5 to the ~~Current~~Quarterly Report on Form ~~8-K~~10-Q of the Company filed with the SEC on ~~September 30, 2005)~~May 1, 2014)
	~~10 (i)~~	Registration Rights Agreement dated September 27, 2005, by and among Ethan Allen Global, Inc., the Guarantors named therein, and the Initial Purchaser named therein, relating to the Notes (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Ethan Allen Interiors Inc. filed with the SEC on September 30, 2005)
*	~~12 (a)~~	~~Computation of Ratio of Earnings to Fixed Charges~~
*	21	List of wholly-owned subsidiaries of the Company
*
	23	Consent of KPMG LLP
*
	31.1	~~Rule 13a-14(a)~~ Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*
	31.2	~~Rule 13a-14(a)~~ Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*	32.1	~~Section 1350~~ Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	32.2	~~Section 1350~~ Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**
	101.INS	XBRL Instance Document
**
	101.SCH	XBRL Taxonomy Extension Schema
**
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase
**
	101.DEF	XBRL Taxonomy Extension Definition Linkbase
**
	101.LAB	XBRL Taxonomy Extension Labels Linkbase
**
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase


~~By/~~By/s/M. Farooq Kathwari
DATE: August 8, 2016	(M. Farooq Kathwari)
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

	~~By/~~By/s/ Corey Whitely ~~David R. Callen~~
DATE: August 8, 2016	(~~David R. Callen)~~Corey Whitely)
	Executive Vice President, ~~Finance~~Administration, Chief Financial Officer and Treasurer
	(Principal Financial ~~Officer and~~ ~~Principal Accounting~~ Officer)

/s/ M. Farooq Kathwari	Chairman, President and Chief Executive Officer
(M. Farooq Kathwari)	(Principal Executive Officer)