What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-07-26 compared with 2021-07-27 · 811 added, 618 removed, 1056 unchanged (58% of the section changed)

Item 8 Financial Statements and Supplementary Data

Herman Miller, Inc.

MillerKnoll, Inc.

Consolidated Statements of Comprehensive Income

(In millions, except per share data) May 29, 2021 May 30, 2020 June 1, 2019

(In millions, except per share data) May 28, 2022 May 29, 2021 May 30, 2020

Net sales $ 3,946.0 $ 2,465.1 $ 2,486.6

13 unchanged sentences

Interest and other investment income ( 1.6 ) ( 2.1 ) ( 2.3 )

Other (income) expense, net ( 7.6 ) 1.0 ( 1.6 )

Earnings (loss) before income taxes and equity income 226.4 ( 13.4 ) 195.1

Other expense (income), net 12.2 ( 7.6 ) 1.0

(Loss) earnings before income taxes and equity income ( 8.6 ) 228.3 ( 12.9 )

Income tax expense 11.1 48.3 6.1

Equity earnings from nonconsolidated affiliates, net of tax

Net earnings (loss) 178.8 ( 14.4 ) 160.5

Net (loss) earnings ( 19.7 ) 180.3 ( 14.0 )

Net earnings (loss) attributable to redeemable noncontrolling interests 7.4 5.7 ( 5.3 )

Net earnings (loss) attributable to Herman Miller, Inc.

Net (loss) earnings attributable to MillerKnoll, Inc.

$ ( 27.1 ) $ 174.6 $ ( 8.7 )

Earnings (loss) per share — basic $ 2.94 $ ( 0.15 ) $ 2.72

Earnings (loss) per share — diluted $ 2.92 $ ( 0.15 ) $ 2.70

Other comprehensive income (loss), net of tax:

(Loss) earnings per share — basic $ ( 0.37 ) $ 2.96 $ ( 0.15 )

(Loss) earnings per share — diluted ( 0.37 ) 2.94 ( 0.15 )

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments ( 90.0 ) 52.1 ( 7.7 )

2 unchanged sentences

Unrealized holding (losses) gains on securities — ( 0.1 ) 0.1

Total other comprehensive income (loss), net of tax 68.9 ( 39.8 ) ( 34.3 )

Comprehensive income (loss) 247.7 ( 54.2 ) 126.2

Total other comprehensive (loss) income, net of tax ( 42.0 ) 68.9 ( 39.8 )

Comprehensive (loss) income ( 61.7 ) 249.2 ( 53.8 )

Comprehensive income (loss) attributable to redeemable noncontrolling interests 4.4 5.7 ( 5.3 )

Comprehensive income (loss) attributable to Herman Miller, Inc.

Comprehensive (loss) income attributable to MillerKnoll, Inc.

$ ( 66.1 ) $ 243.5 $ ( 48.5 )

47 2021 Annual Report

Herman Miller, Inc.

MillerKnoll, Inc.

Consolidated Balance Sheets

21 unchanged sentences

Accrued compensation and benefits 128.6 90.2

Short-term lease liability 79.9 44.8

Accrued warranty 18.8 14.5

16 unchanged sentences

Deferred compensation plan

( 0.2 ) ( 0.3 )

Herman Miller, Inc.

Stockholders' Equity 849.6 643.0

Total Stockholders' Equity 1,427.1 860.5

Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity $ 4,514.0 $ 2,076.8

Herman Miller, Inc.

and Subsidiaries 48

Herman Miller, Inc.

MillerKnoll, Inc.

Consolidated Statements of Stockholders' Equity

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Deferred Compensation Plan Herman Miller, Inc.

Stockholders' Equity Noncontrolling Interests Total Stockholders' Equity

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Deferred Compensation Plan MillerKnoll, Inc.

Stockholders' Equity

(In millions, except share and per share data) Shares Amount

June 1, 2019 58,794,148 $ 11.7 $ 89.8 $ 721.7 $ ( 94.2 ) $ ( 0.8 ) $ 728.2

Net earnings — — — 160.5 — — 160.5 — 160.5

Other comprehensive loss, net of tax — — — — ( 34.3 ) — ( 34.3 ) — ( 34.3 )

Net loss — — — ( 8.7 ) — — ( 8.7 )

Other comprehensive loss — — — — ( 39.8 ) — ( 39.8 )

Stock-based compensation expense — — 2.7 — — — 2.7

8 unchanged sentences

Cumulative effect of accounting changes — — — 17.8 — — 17.8

June 1, 2019 58,794,148 $ 11.7 $ 89.8 $ 712.7 $( 94.2 ) $( 0.8 ) $ 719.2 $ — $ 719.2

Net loss — — — ( 9.1 ) — — ( 9.1 ) — ( 9.1 )

Other comprehensive loss — — — — ( 39.8 ) — ( 39.8 ) — ( 39.8 )

May 30, 2020 58,793,275 $ 11.8 $ 81.6 $ 693.3 $ ( 134.0 ) $ ( 0.3 ) $ 652.4

Net earnings — — — 174.6 — — 174.6

Other comprehensive income — — — — 68.9 — 68.9

Stock-based compensation expense — — 9.0 — — — 9.0

8 unchanged sentences

Redemption value adjustment — — — ( 15.0 ) — — ( 15.0 )

Other — — — ( 0.2 ) — — ( 0.2 )

May 29, 2021 59,029,165 $ 11.8 $ 94.7 $ 819.3 $ ( 65.1 ) $ ( 0.2 ) $ 860.5

Net earnings — — — 173.1 — — 173.1 — 173.1

Other comprehensive income — — — — 68.9 — 68.9 — 68.9

Net loss — — — ( 27.1 ) — — ( 27.1 )

Other comprehensive loss — — — — ( 42.0 ) — ( 42.0 )

Stock-based compensation expense — — 31.4 — — — 31.4

Restricted stock issuance 611,452 0.1 ( 0.1 ) — — — —

Exercise of stock options 116,178 0.1 3.3 — — — 3.4

2 unchanged sentences

Repurchase and retirement of common stock ( 390,979 ) ( 0.1 ) ( 16.1 ) — — — ( 16.2 )

Directors' fees 3,013 — 0.1 — — — 0.1 — 0.1

Directors' fees direct issuance 23,255 — 0.9 — — — 0.9

Director's fees deferred restricted stock units — — 0.6 — — — 0.6

Deferred compensation plan — — — — — 0.2 0.2

Shares issued for the Acquisition of Knoll 15,843,921 3.2 685.1 — — — 688.3

Pre-combination expense from Knoll rollover — — 22.4 — — — 22.4

NCI Adjustment — — 0.5 — — — 0.5

NCI Valuation — — — ( 41.6 ) — — ( 41.6 )

Restricted stock units dividend reinvestment — — 0.3 ( 0.3 ) — — —

Dividends declared ($ 0.75 per share)

— — — ( 57.0 ) — — ( 57.0 )

Redemption value adjustment — — — ( 15.0 ) — — ( 15.0 ) — ( 15.0 )

Other — — — ( 0.2 ) — — ( 0.2 ) — ( 0.2 )

May 28, 2022 75,824,241 $ 15.2 $ 825.7 $ 693.3 $ ( 107.1 ) $ — $ 1,427.1

49 2021 Annual Report

Herman Miller, Inc.

MillerKnoll, Inc.

Consolidated Statements of Cash Flows

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Cash Flows from Operating Activities:

Net earnings (loss) $ 178.8 $( 14.4 ) $ 160.5

Net (loss) earnings $ ( 19.7 ) $ 180.3 $ ( 14.0 )

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:

1 unchanged sentence

Amortization expense 78.6 15.2 11.4

Earnings from nonconsolidated affiliates net of dividends received ( 0.4 ) ( 4.8 ) ( 2.1 )

Investment fair value adjustment — — ( 2.1 )

Earnings (loss) from nonconsolidated affiliates net of dividends received 0.8 ( 0.4 ) ( 4.8 )

Gain on consolidation of equity method investments — — ( 36.2 )

(Gain) loss on sales of property and dealers ( 1.0 ) — —

Deferred taxes ( 21.7 ) 7.1 ( 25.1 )

2 unchanged sentences

Impairment charges 15.5 — 205.4

Loss on extinguishment of debt 13.4 — —

Restructuring expenses — 2.7 26.4

3 unchanged sentences

Changes in current assets and liabilities:

Increase (decrease) in accounts receivable & unbilled accounts receivable ( 14.8 ) 68.6 ( 24.8 )

Increase (decrease) in inventories ( 8.5 ) 6.0 ( 31.9 )

Decrease (increase) in accounts receivable & unbilled accounts receivable ( 92.4 ) ( 14.8 ) 68.6

Decrease (increase) in inventories ( 166.4 ) ( 10.4 ) 5.5

Increase in prepaid expenses and other ( 39.6 ) ( 3.9 ) ( 2.2 )

2 unchanged sentences

Other, net ( 8.7 ) 2.4 5.7

Net Cash Provided by Operating Activities 332.3 221.8 216.4

Net Cash (Used in) Provided by Operating Activities ( 11.9 ) 332.3 221.8

Cash Flows from Investing Activities:

3 unchanged sentences

Proceeds from sales of property and dealers 2.8 14.0 0.2

Purchase of HAY licensing agreement — — ( 4.8 )

Acquisitions, net of cash received ( 1,088.5 ) — ( 111.2 )

3 unchanged sentences

Cash Flows from Financing Activities:

Borrowings of long-term debt — 50.0 —

Proceeds from issuance of debt, net of discounts 1,007.0 — 50.0

Payments of deferred financing costs ( 9.3 ) — —

Repayments of long-term debt ( 63.1 ) ( 50.0 ) —

1 unchanged sentence

Repayments of credit facility ( 838.5 ) ( 265.0 ) —

Payment of make whole premium on debt ( 13.4 ) — —

Dividends paid ( 54.5 ) ( 34.5 ) ( 36.4 )

1 unchanged sentence

Common stock repurchased and retired ( 16.2 ) ( 0.9 ) ( 26.6 )

Distribution to noncontrolling interest ( 6.8 ) — —

Purchase of redeemable noncontrolling interests — — ( 20.3 )

Other, net 0.7 ( 2.3 ) ( 3.3 )

Net Cash (Used in) Provided by Financing Activities ( 347.7 ) 244.0 ( 91.9 )

Net Cash Provided by (Used in) Financing Activities 1,039.9 ( 347.7 ) 244.0

Effect of exchange rate changes on cash and cash equivalents ( 21.7 ) 17.7 ( 2.9 )

5 unchanged sentences

Income taxes paid, net of cash received $ 36.9 $ 15.8 $ 39.6

Herman Miller, Inc.

and Subsidiaries 50

Notes to the Consolidated Financial Statements

17 unchanged sentences

Note 18 Quarterly Financial Data (Unaudited)

51 2021 Annual Report

Significant Accounting and Reporting Policies

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Principles of Consolidation

The Consolidated Financial Statements include the accounts of Herman Miller, Inc.

The Consolidated Financial Statements include the accounts of MillerKnoll, Inc.

and its controlled domestic and foreign subsidiaries.

2 unchanged sentences

The Company researches, designs, manufactures, sells and distributes interior furnishings for use in various environments including office, healthcare, educational and residential settings and provides related services that support companies all over the world.

The Company's products are sold primarily through independent contract office furniture dealers as well as the following channels:

owned contract office furniture dealership, direct customer sales, independent retailers, owned retail studios, direct-mail catalogs and the Company's eCommerce platforms.

The Company's products are sold primarily through independent contract office furniture dealers, retail studios, the Company's eCommerce platforms, direct-mail catalogs, as well as direct customer sales and independent retailers.

On July 19, 2021 the Company acquired Knoll, Inc.

("Knoll") (See Note 3.

"Acquisitions and Divestitures").

Knoll is a leading global manufacturer of commercial and residential furniture, accessories, lighting, and coverings.

The Company has included the financial results of Knoll in the consolidated financial statements from the date of acquisition.

On October 11, 2021, the Company's shareholders approved an amendment to our Restated Articles of Incorporation to change our corporate name from Herman Miller, Inc.

to MillerKnoll, Inc.

On November 1, 2021, the change in corporate name and ticker symbol to MLKN became effective.

MillerKnoll is a collective of dynamic brands that comes together to design the world we live in.

A global leader in design, MillerKnoll includes Herman Miller® and Knoll®, as well as Colebrook Bosson Saunders®, DatesWeiser®, Design Within Reach®, Edelman® Leather, Fully®, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, Maars® Living Walls, Maharam®, Muuto®, naughtone®, and Spinneybeck®|FilzFelt®.

Combined, MillerKnoll represents over 100 years of design research and exploration in service of humanity.

The Company is united by a belief in design as a tool to create positive impact and shape a more sustainable, caring, and beautiful future for all people and the planet.

The Company's fiscal year ends on the Saturday closest to May 31.

The fiscal years ended May 29, 2021, May 30, 2020, and June 1, 2019 contained 52 weeks .

The fiscal years ended May 28, 2022, May 29, 2021, and May 30, 2020 contained 52 weeks .

Foreign Currency Translation

1 unchanged sentence

The cumulative effects of translating the balance sheet accounts from the functional currency into the United States dollar using fiscal year-end exchange rates and translating revenue and expense accounts using average exchange rates for the period are reflected as a component of Accumulated other comprehensive loss in the Consolidated Balance Sheets.

The financial statement impact of gains and losses resulting from remeasuring foreign currency transactions into the appropriate functional currency resulted in a net gain of $ 0.8 million, net loss of $ 1.1 million, and a net gain of $ 0.3 million for the fiscal years ended May 29, 2021, May 30, 2020, and June 1, 2019, respectively.

These amounts are included in “ Other (income) expense, net ” in the Consolidated Statements of Comprehensive Income.

The financial statement impact of gains and losses resulting from remeasuring foreign currency transactions into the appropriate functional currency resulted in a net loss of $ 3.3 million, net gain of $ 0.8 million, and a net loss of $ 1.1 million for the fiscal years ended May 28, 2022, May 29, 2021, and May 30, 2020, respectively.

These amounts are included in Other expense (income), net in the Consolidated Statements of Comprehensive Income.

Cash Equivalents

4 unchanged sentences

Marketable Securities

The Company maintains a portfolio of marketable securities primarily comprised of mutual funds.

These mutual funds are comprised of both equity and fixed income funds.

These investments are held by the Company's wholly owned insurance captive and have been recorded at fair value based on quoted market prices.

Net unrealized holding gains or losses related to the equity mutual funds are recorded through net income while net unrealized holding gains or losses related to the fixed income mutual funds are recorded through other comprehensive income.

All marketable security transactions are recognized on the trade date.

Realized gains and losses are included in “Interest and other investment income” in the Consolidated Statements of Comprehensive Income.

See Note 12 of the Consolidated Financial Statements for additional disclosures of marketable securities.

The Company previously maintained a portfolio of marketable securities primarily comprised of mutual funds.

These investments were liquidated during the year resulting in a cash in-flow of approximately $ 7.7 million.

Allowances for Credit Losses

Allowances for credit losses related to accounts are managed at a level considered by management to be adequate to absorb an estimate of probable future losses existing at the balance sheet date.

Herman Miller, Inc.

and Subsidiaries 52

In estimating probable losses, we review accounts based on known customer exposures, historical credit experience, and specific identification of other potentially uncollectible accounts.

1 unchanged sentence

Accounts that are considered to have higher credit risk are reviewed using information available about the debtor, such as financial statements, news reports and published credit ratings.

General information regarding industry trends, the economic environment is used as well.

General information regarding industry trends, the economic environment is also used.

We arrive at an estimated loss for specific concerns and estimate an additional amount for the remainder of trade balances based on historical trends and other factors previously referenced.

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Whether from dealers or customers, the Company's trade credit exposures are not concentrated with any particular entity.

Inventories are valued at the lower of cost or market and include material, labor and overhead.

Inventory cost is determined using the last-in, first-out (LIFO) method at manufacturing facilities in Michigan, whereas inventories of the Company's other locations are valued using the first-in, first-out (FIFO) method.

Prior to the fourth quarter of 2022, certain inventories within the United States were recorded at cost (not in excess of net realizable value) as determined by the last-in, first-out method (“LIFO”).

Inventory valued under the LIFO method represented approximately 9 % of consolidated inventories.

During the fourth quarter of 2022, we changed our method of costing for these inventories from LIFO to the first-in, first-out (“FIFO”) method.

This change in accounting principle is preferable because FIFO more closely resembles the physical flow of inventory being used in production and the change conforms all of the Company's consolidated inventory to be on either the FIFO or weighted average methods of accounting, including the newly acquired Knoll, Inc.

The cumulative effect of the change was recorded in the opening June 1, 2019 retained earnings, which resulted in a net increase to total stockholders’ equity of $ 9.0 million.

It also increased May 29, 2021 inventories, tax payable and deferred tax liabilities by $ 15.0 million, $ 1.1 million, and $ 3.0 million, respectively.

The impact of this change in accounting principle on the Consolidated Financial Statements for each period presented is further explained in the Change in Accounting Principle section below.

Inventories are valued at the lower of cost or net realizable value and include material, labor and overhead.

The Company establishes reserves for excess and obsolete inventory based on prevailing circumstances and judgment for consideration of current events, such as economic conditions, that may affect inventory.

The reserve required to record inventory at lower of cost or net realizable value may be adjusted in response to changing conditions.

The reserve required to record inventory at lower of cost or net realizable value may be adjusted in response to changing conditions, however inventory cannot be subsequently written back up, since the reserve establishes a new (lower) cost basis.

Further information on the Company's recorded inventory balances can be found in Note 4 of the Consolidated Financial Statements.

Goodwill and Indefinite-lived Intangible Assets

Goodwill and other indefinite-lived assets included in the Consolidated Balance Sheets consist of the following:

(In millions) Goodwill Indefinite-lived Intangible Assets Total Goodwill and Indefinite-lived Intangible Assets

Balance, June 2, 2019 $ 303.8 $ 78.1 $ 381.9

The changes in the carrying amount of goodwill, by reporting segment, are as follows:

(In millions) Americas Contract International Contract Global Retail Knoll Total

Balance as of May 30, 2020

Goodwill $ 193.2 $ 31.6 $ 79.0 $ — $ 303.8

Acquisition of HAY and naughtone 35.0 53.6 80.0 — 168.6

Foreign currency translation adjustments — ( 0.7 ) ( 0.2 ) — ( 0.9 )

Acquisition of HAY 111.1 60.0 171.1

Acquisition of naughtone 57.5 8.5 66.0

Impairment charges ( 125.5 ) ( 53.3 ) ( 178.8 )

Balance, May 30, 2020 $ 346.0 $ 92.8 $ 438.8

Impairment loss ( 36.7 ) — ( 88.8 ) — ( 125.5 )

Net goodwill as of May 30, 2020 $ 191.5 $ 84.5 $ 70.0 $ — $ 346.0

Balance as of May 29, 2021

Goodwill $ 228.2 $ 84.5 $ 158.8 $ — $ 471.5

Foreign currency translation adjustments 5.7 6.8 5.7 — 18.2

Balance, May 29, 2021 $ 364.2 $ 97.6 $ 461.8

Accumulated impairment losses ( 36.7 ) — ( 88.8 ) — ( 125.5 )

Net goodwill as of May 29, 2021 $ 197.2 $ 91.3 $ 75.7 $ — $ 364.2

Balance as of May 28, 2022

Goodwill $ 233.9 $ 91.3 $ 164.5 $ — $ 489.7

Sale of owned dealer ( 0.3 ) — — — ( 0.3 )

Acquisition of Knoll — — — 903.5 903.5

Foreign currency translation adjustments ( 5.2 ) ( 8.8 ) ( 7.3 ) ( 19.9 ) ( 41.2 )

Accumulated impairment losses ( 36.7 ) — ( 88.8 ) — ( 125.5 )

Balance as of May 28, 2022 $ 191.7 $ 82.5 $ 68.4 $ 883.6 $ 1,226.2

Other indefinite-lived assets included in the Consolidated Balance Sheets consist of the following:

(In millions) Indefinite-lived Intangible Assets

Balance at May 30, 2020 $ 92.8

Foreign currency translation adjustments 4.8

Balance at May 29, 2021 $ 97.6

Foreign currency translation adjustments ( 14.6 )

Acquisition of Knoll 418.0

Balance at May 28, 2022 $ 501.0

Goodwill is tested for impairment at the reporting unit level annually, or more frequently, when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value.

3 unchanged sentences

If the quantitative testing indicates that goodwill is impaired, the carrying value of goodwill is written down to fair value.

Each of the reporting units were reviewed for impairment using a quantitative assessment as of March 31, 2021.

53 2021 Annual Report

To estimate the fair value of each reporting unit when performing quantitative testing, the Company utilizes a weighting of the income approach and the market method.

These approaches are based on a discounted cash flow analysis and observable comparable company information that use several inputs, including:

• actual and forecasted revenue growth rates and operating margins,

• discount rates based on the reporting unit's weighted average cost of capital, and

• revenue and EBITDA of comparable companies

The Company corroborates the reasonableness of the inputs and outcomes of our discounted cash flow analysis through a market capitalization reconciliation to determine whether the implied control premium is reasonable.

The Company completed its annual goodwill impairment test in the fourth quarter of the year, as of March 31 st .

In fiscal 2021, the Company elected to perform quantitative impairment tests for all goodwill reporting units and other indefinite-lived intangible assets.

In performing the quantitative impairment test, the Company determined that the fair value of the reporting units exceeded the carrying amount and, as such, the reporting units were not impaired and the second step of the impairment test was not necessary.

In completing our annual goodwill impairment test, the respective fair values were estimated using an income approach with market participant discount rates ranging from 12.0 % to 14.0 % developed using a weighted average cost of capital analysis and long-term growth rates ranging from 2.5 % to 3.0 %.

Each of the reporting units were reviewed for impairment using a qualitative assessment as of March 31, 2022.

The Company elected to test each reporting unit qualitatively, as is permitted under ASU 2011-08, Intangibles-Goodwill and Other (Topic 350):

Testing Goodwill for Impairment, as the Company concluded it to be more likely than not that their estimated fair values are greater than their respective carrying values.

The test for impairment requires the Company to make several estimates about fair value, most of which are based on projected future cash flows and market valuation multiples.

We estimated the fair value of the reporting units using a discounted cash flow analysis and reconciled the sum of the fair values of the reporting units to total market capitalization of the Company, plus a control premium.

The control premium represents an estimate associated with obtaining control of the Company in an acquisition.

The discounted cash flow analysis used the present value of projected cash flows and a residual value.

The Company employs a market-based approach in selecting the discount rates used in our analysis.

The discount rates selected represent market rates of return equal to what the Company believes a reasonable investor would expect to achieve on investments of similar size to the Company's reporting units.

The Company believes the discount rates selected in the

quantitative assessment are appropriate in that, in all cases, they meet or exceed the estimated weighted average cost of capital for our business as a whole.

The results of the impairment test are sensitive to changes in the discount rates and changes in the discount rate may result in future impairment.

Intangible assets with indefinite useful lives are not subject to amortization and are evaluated annually for impairment, or more frequently, when events or changes in circumstances indicate that the fair value of an intangible asset may not be recoverable.

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The Company measures and records an impairment loss for the excess of the carrying value of the asset over its fair value.

In fiscal 2021, the Company performed quantitative assessments in testing indefinite-lived intangible assets for impairment.

In fiscal 2022, the Company performed qualitative assessments in testing indefinite-lived intangible assets for impairment for all assets except the HAY trade name for which a quantitative assessment was performed.

The carrying value of the Company's HAY trade name indefinite-lived intangible asset was $ 38.9 million as of March 31, 2022.

The calculated fair value of the HAY trade name was $ 54.8 million which represents an excess fair value of $ 15.9 million or 41.0 %.

If the residual cash flow related to this trade name were to decline in future periods, the Company may need to record an impairment charge.

In completing our annual indefinite-lived trade name impairment test, the respective fair values were estimated using a relief-from-royalty approach, applying market participant discount rates ranging from 12.0 % to 14.0 % developed using a weighted average cost of capital analysis, royalty rates ranging from 2.0 % to 3.0 % and long-term growth rates ranging from 2.5 % to 3.0 %.

Based on the assessments performed, the Company concluded it to be more likely than not that that the estimated fair values for indefinite-lived intangibles are greater than their respective carrying values.

In completing our annual indef inite-lived trade name impairment test, the HAY fair value was estimated using a relief-from-royalty approach, applying mar ket participant discount rate of 16.5 % developed using a weighted average cost of capital analysis, a royalty rate of 2.5 % and a long-term growth rate of 3.0 %.

The table below summarizes the carrying values as of May 28, 2022, for each of the Company’s indefinite-lived trade names:

3 unchanged sentences

naughtone 5.8

Knoll Product 173.0

Knoll Channel 99.0

Holly Hunt 26.0

Spinneybeck 23.0

Total $ 501.0

During fiscal 2020, the Company recognized $ 205.4 million of impairment charges related to goodwill, indefinite-lived intangible assets and long-lived assets.

1 unchanged sentence

Property, Equipment and Depreciation

Herman Miller, Inc.

and Subsidiaries 54

Property and equipment are stated at cost.

21 unchanged sentences

Refer to the following table for the combined gross carrying value and accumulated amortization for these amortizable intangibles.

(In millions) Patent and Trademarks Customer Relationships Other Total

(In millions) Patent and Trademarks Customer Relationships Designs and Patterns Backlog Other Total

Gross carrying value $ 57.9 $ 355.8 $ 42.0 $ 29.8 $ 11.6 $ 497.1

1 unchanged sentence

Net $ 33.2 $ 289.8 $ 36.1 $ — $ 3.3 $ 362.4

Patent and Trademarks Customer Relationships Other Total

Patent and Trademarks Customer Relationships Designs and Patterns Backlog Other Total

Gross carrying value $ 45.5 $ 113.0 $ 3.10 $ 2.80 $ 9.4 $ 173.8

1 unchanged sentence

Net $ 26.6 $ 73.4 $ — $ — $ 5.2 $ 105.2

The Company amortizes these assets over their remaining useful lives using the straight-line method over periods ranging from 5 years to 20 years, or on an accelerated basis, to reflect the expected realization of the economic benefits.

The Company amortizes these assets over their remaining useful lives using the straight-line method over periods ranging from less than 1 year to 20 years, or on an accelerated basis, to reflect the expected realization of the economic benefits.

It is estimated that the weighted-average remaining useful life of the patents and trademarks is approximately 6.7 and the weighted-average remaining useful life of the customer relationships is 10.5 years .

Estimated amortization expense on existing amortizable intangible assets as of May 28, 2022, for each of the succeeding five fiscal years, is as follows:

55 2021 Annual Report

(In millions)

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Health benefit $ 0.50

The Company accrues for its self-insurance arrangements, as well as reserves for health, prescription drugs, and dental benefit exposures based on actuarially-determined estimates, which are recorded in “Other liabilities” in the Consolidated Balance Sheets.

The Company accrues for its self-insurance arrangements, as well as reserves for health, prescription drugs, and dental benefit exposures based on actuarial estimates, which are recorded in Other liabilities in the Consolidated Balance Sheets.

The value of the liability as of May 28, 2022 and May 29, 2021 was $ 14.7 million and $ 12.3 million, respectively.

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Programs such as rebates and discounts are adjustments to the selling price and are therefore characterized as a reduction to net sales.

Herman Miller, Inc.

and Subsidiaries 56

Revenue Recognition

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Revenue for the sale of products is recognized at the point in time when control transfers, generally upon transfer of title and risk of loss to the customer.

Revenue for services, including the installation of products by the Company's owned dealers, is recognized over time as the services are provided.

Revenue for services is recognized over time as the services are provided.

The method of revenue recognition may vary, depending on the type of contract with the customer, as noted in the section "Disaggregated Revenue" in Note 2 of the Consolidated Financial Statements.

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The Company has not adjusted the amount of consideration to be received for any significant financing components as the Company’s contracts have a duration of one year or less.

The Company adopted ASC 842 - Leases at the beginning of fiscal year 2020.

The new standard required the Company to recognize most leases on the balance sheet as right of use (ROU) assets with corresponding lease liabilities.

All necessary changes required by the new standard, including those to the Company’s accounting policies, business processes, systems, controls and disclosures, were implemented as of the first quarter of fiscal year 2020.

See Note 7 of the Consolidated Financial Statements for further information regarding the Company's lease accounting policies.

The Company accounts for leases in accordance with ASC Topic 842, Leases, (“ASC 842”).

For any new or modified lease, the Company, at the inception of the contract, determines whether a contract is or contains a lease.

A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration.

The Company records right-of use ("ROU") assets and lease obligations for its finance and operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease.

As the rate implicit in the Company's leases is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.

As none of the Company’s leases provide an implicit discount rate, the Company uses an estimated incremental borrowing rate at the lease commencement date in determining the present value of the lease payments.

Relevant information used in determining the Company’s incremental borrowing rate includes the duration of the lease, location of the lease, and the Company’s credit risk relative to risk-free market rates.

Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option.

Leases, and any leasehold improvements, are depreciated over the expected lease term.

Additionally, certain leases include renewal or termination options, which can be exercised at the Company’s discretion.

Lease terms include the noncancelable portion of the underlying leases along with any reasonably certain lease periods associated with available renewal periods.

The Company’s leases do not contain any residual value guarantees or material restrictive covenants.

Variable lease costs associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs.

Variable lease costs are presented as Operating expenses in the Company’s Consolidated Statements of Comprehensive Income in the same line item as the expense arising from fixed lease payments for operating leases.

The Company determines if an arrangement is a lease at contract inception.

Arrangements that are leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

If leased assets have leasehold improvements, the depreciable life of those leasehold improvements are limited by the expected lease term.

ROU assets for operating leases are subject to the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment.

The Company monitors for events or changes in circumstances that require a reassessment of a lease.

When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero.

In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss.

Cost of Sales

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Included in these expenses are items such as compensation expense, rental expense, warranty expense and travel and entertainment expense.

57 2021 Annual Report

Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse.

Deferred tax assets and

liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse.

The Company's annual effective tax rate is based on income, statutory tax rates and tax planning strategies available in the various jurisdictions the Company operates.

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See Note 12 of the Consolidated Financial Statements for the required fair value disclosures.

Herman Miller, Inc.

and Subsidiaries 58

59 2021 Annual Report

Derivatives and Hedging

2 unchanged sentences

The fair values of all derivatives are recognized as assets or liabilities at the balance sheet date.

Changes in the fair value of these instruments are reported within "Other (income) expense, net" in the Consolidated Statements of Comprehensive Income, or "Accumulated other comprehensive loss" within the Consolidated Balance Sheets, depending on the use of the derivative and whether it qualifies for hedge accounting treatment.

Changes in the fair value of these instruments are reported within Other expense (income), net in the Consolidated Statements of Comprehensive Income, or Accumulated other comprehensive loss within the Consolidated Balance Sheets, depending on the use of the derivative and whether it qualifies for hedge accounting treatment.

Gains and losses on derivatives that are designated and qualify as cash flow hedging instruments are recorded in Accumulated Other Comprehensive Loss, to the extent the hedges are effective, until the underlying transactions are recognized in the Consolidated Statements of Comprehensive Income.

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Recently Adopted Accounting Standards

On March 1, 2020, the Company adopted Accounting Standards Update ("ASU") No.

2017-04, "Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment" using the prospective method.

This update simplifies how an entity assesses goodwill for impairment by eliminating Step 2 from the goodwill impairment test.

As amended, the goodwill impairment test consists of one step comparing the fair value of a reporting unit with its carrying amount.

An entity then recognizes a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

The adoption was utilized in the Company's current year goodwill impairment testing.

Refer above to the "Goodwill and Indefinite-lived Intangible Assets" section for further information.

On May 30, 2021, the Company adopted ASU No.

2016-13, "Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments" using the modified retrospective method.

This update replaces the existing incurred loss impairment model with an expected loss model and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates including customer credit quality, historical write-off trends and general information regarding industry trends and the macroeconomic environment.

The adoption did not have a material impact on the Company's financial statements, accounting policies or methods utilized to determine the allowance for doubtful accounts.

On May 31, 2020, the Company adopted ASU No.

2018-13, "Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" using the prospective method.

This update modifies certain disclosure requirements for fair value measurements.

The adoption did not have a material impact on the Company's financial statements.

Herman Miller, Inc.

and Subsidiaries 60

2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20):

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." This update eliminates, adds and clarifies certain disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans.

The eliminated disclosures include (a) the amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits.

Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period.

The adoption of this guidance did not have a material effect on our consolidated financial statements.

On May 30, 2021, the Company adopted ASU 2019-12, "Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes." This update removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods.

The update also adds guidance to reduce complexity in certain areas.

The adoption of this guidance did not have a material impact on the Company's financial statements.

Recently Issued Accounting Standards Not Yet Adopted

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Standard Description Effective Date

2018-14 Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20):

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans This update eliminates, adds and clarifies certain disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans.

Early adoption is permitted.

The Company does not expect the adoption of this standard to have a material impact on its financial statements.

2019-12 Income Taxes (Topic 740):

Simplifying the

Accounting for Income Taxes

This update removes certain exceptions for

recognizing deferred taxes for investments,

performing intraperiod allocation and

calculating income taxes in interim periods.

The update also adds guidance to reduce

complexity in certain areas, including

recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group.

2021-10 Government Assistance This update requires disclosures to increase the transparency of transactions with governments accounted for by applying a grant or contribution accounting model by analogy, including the (1) types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity's financial statements.

Early adoption is permitted.

We are currently evaluating the effect the adoption of this ASU may have on our disclosures.

All other issued and not yet effective accounting standards are not relevant to the Company.

Change in Accounting Principle

As described above, in the fourth quarter of 2022, we elected to change our method of accounting for certain inventories within the United States from LIFO to FIFO.

The tables below summarize the fiscal year 2022 financial results as if we had stayed on LIFO for the current year.

We have retrospectively adjusted the Consolidated Financial Statements for all periods presented to reflect this change.

As a result of the retrospective adjustment for the change in accounting principle, certain amounts in our Consolidated Statements of Comprehensive Income for the years ended May 28, 2022, May 29, 2021 and May 30, 2020 were adjusted as follows:

(In millions, except per share data) May 28, 2022

If Reported using LIFO Impact of change to FIFO As Reported using FIFO

Cost of sales $ 2,603.9 $ ( 10.6 ) $ 2,593.3

(Loss) earnings before income taxes ( 19.2 ) 10.6 ( 8.6 )

Income tax expense 8.9 2.2 11.1

Net (loss) earnings ( 28.1 ) 8.4 ( 19.7 )

Net (loss) earnings attributable to MillerKnoll, Inc.

( 35.5 ) 8.4 ( 27.1 )

(Loss) earnings per share - basic ( 0.49 ) 0.12 ( 0.37 )

(Loss) earnings per share - diluted ( 0.49 ) 0.12 ( 0.37 )

(In millions, except per share data) May 29, 2021 May 30, 2020

As Reported Impact of change to FIFO As Adjusted As Reported Impact of change to FIFO As Adjusted

Cost of sales $ 1,515.9 $ ( 1.9 ) $ 1,514.0 $ 1,575.9 $ ( 0.5 ) $ 1,575.4

Earnings (loss) before income taxes 226.4 1.9 228.3 ( 13.4 ) 0.5 ( 12.9 )

Income tax expense 47.9 0.4 48.3 6.0 0.1 6.1

Net earnings (loss) 178.8 1.5 180.3 ( 14.4 ) 0.4 ( 14.0 )

Net earnings (loss) attributable to MillerKnoll, Inc.

173.1 1.5 174.6 ( 9.1 ) 0.4 ( 8.7 )

Earnings (loss) per share - basic 2.94 0.02 2.96 ( 0.15 ) — ( 0.15 )

Earnings (loss) per share - diluted 2.92 0.02 2.94 ( 0.15 ) — ( 0.15 )

The Consolidated Balance Sheets as of May 28, 2022 and May 29, 2021 were adjusted as follows:

(In millions) May 28, 2022 May 29, 2021

If Reported using LIFO Impact of change to FIFO As Reported using FIFO As Reported Impact of change to FIFO As Adjusted

Inventories, net $ 561.7 $ 25.6 $ 587.3 $ 213.6 $ 15.0 $ 228.6

Other liabilities 293.9 6.3 300.2 128.2 4.1 132.3

Retained earnings 674.0 19.3 693.3 808.4 10.9 819.3

The Consolidated Statements of Cash Flows for the years ended May 28, 2022, May 29, 2021 and May 30, 2020 were adjusted as follows:

(In millions) May 28, 2022

If Reported using LIFO Impact of change to FIFO As Reported using FIFO

Net (loss) earnings $ ( 28.1 ) $ 8.4 $ ( 19.7 )

Adjustments to reconcile net earnings to net cash provided by operating activities:

Deferred taxes ( 23.9 ) 2.2 ( 21.7 )

Changes in current assets and liabilities:

(Decrease) increase in inventories ( 177.0 ) 10.6 ( 166.4 )

(In millions) May 29, 2021 May 30, 2020

As Reported Impact of change to FIFO As Adjusted As Reported Impact of change to FIFO As Adjusted

Net earnings (loss) $ 178.8 $ 1.5 $ 180.3 $ ( 14.4 ) $ 0.4 $ ( 14.0 )

Adjustments to reconcile net earnings to net cash provided by operating activities:

Deferred taxes 6.7 0.4 7.1 ( 25.2 ) 0.1 ( 25.1 )

Changes in current assets and liabilities:

(Decrease) increase in inventories ( 8.5 ) ( 1.9 ) ( 10.4 ) 6.0 ( 0.5 ) 5.5

Immaterial Correction of Error

The Company’s previously issued financial statements have been revised to reclassify certain lease liabilities that were inappropriately presented within the Consolidated Balance Sheet as of May 29, 2021.

As a result, $ 24.2 million was reclassified from Short-term lease liability to Lease liabilities on the Consolidated Balance Sheet as of May 29, 2021.

The error had no impact on the Company's Consolidated Statements of Comprehensive Income (Loss), Cash Flows or Stockholders’ Equity.

Management has evaluated the error and has determined, based on quantitative and qualitative factors, that it is not material to the May 29, 2021 Consolidated Balance Sheet.

Revenue from Contracts with Customers

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Below, descriptions have been provided that summarize the Company’s different types of contracts and how revenue is recognized for each.

• Single Performance Obligation - these contracts are transacted with customers and include only the product performance obligation.

Most commonly, these contracts represent master agreements with independent third-party dealers in which a purchase order represents the customer contract, point of sale transactions through the Retail segment, as well as customer purchase orders for the Maharam subsidiary within the North America Contract segment.

• Single Performance Obligations - these contracts are transacted with customers and include only the product performance obligation.

Most commonly, these contracts represent master agreements with independent third party dealers in which a purchase order represents the customer contract, point of sale transactions through the Retail segment, as well as customer purchase orders within the Americas Contract and Knoll segments.

For contracts that include a single performance obligation, the Company records revenue at the point in time when title and risk of loss has transferred to the customer.

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In certain instances, entities owned by the Company, rather than independent third-party dealers, perform installation and other services.

In these cases, Service revenue is generated by the Company’s entities that provide installation services, which include owned dealers, and is recognized by the Company over time as the services are provided.

In these cases, Service revenue is generated by the Company’s entities that provide installation services, and is recognized by the Company over time as the services are provided.

For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on relative standalone selling prices.

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Revenue from alliance contracts are recorded at the point in time in which the sale is made by other furniture sellers through the Company’s sales channel.

61 2021 Annual Report

Revenue disaggregated by contract type has been provided in the table below:

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Total $ 3,946.0 $ 2,465.1

The Company internally reports and evaluates products based on the categories Workplace, Performance Seating, Lifestyle, and Other.

A description of these categories is included below.

The Workplace category includes products centered on creating highly functional and productive settings for both groups and individuals.

This category focuses on the development of products, beyond seating, that define boundaries, support work, and enable productivity.

The Performance Seating category includes products centered on seating ergonomics, productivity, and function across an evolving and diverse range of settings.

This category focuses on the development of ergonomic seating solutions for specific use cases requiring more than basic utility.

The Lifestyle category includes products focused on bringing spaces to life through beautiful yet functional products.

This category focuses on the development of products that support a way of living, in thoughtful yet elevated ways.

The products in this category help create emotive and visually appealing spaces via a portfolio that offers diversity in aesthetics, price, and performance.

Revenue disaggregated by product type and segment has been provided in the table below:

(In millions) May 28, 2022 May 29, 2021

North America Contract:

Americas Contract:

Workplace $ 797.9 $ 738.3

1 unchanged sentence

Lifestyle 154.8 127.2

Other 115.0 147.6

Total North America Contract $ 1,194.0 $ 1,598.2

Total Americas Contract $ 1,444.9 $ 1,301.3

International Contract:

2 unchanged sentences

Lifestyle 108.2 82.4

Other 19.8 18.9

Total International Contract $ 483.2 $ 399.5

Global Retail:

Workplace $ 13.1 $ 10.5

1 unchanged sentence

Lifestyle 598.8 486.6

Total Retail $ 602.1 $ 385.6

Total Global Retail $ 856.8 $ 764.3

Workplace $ 547.2 $ —

Performance Seating 94.7 —

Lifestyle 452.2 —

Total Knoll $ 1,188.5 $ —

Intersegment Sales Elimination $ ( 27.4 ) —

Total $ 3,946.0 $ 2,465.1

In the current year, certain products were reclassified primarily within the Performance Seating and Lifestyle categories based on management’s internal reporting of the performance of these product lines.

The prior year period has been restated to reflect these changes.

(1) "Other" primarily consists of uncategorized product sales and service sales.

Refer to Note 14 of the Consolidated Financial Statements for further information related to our segments.

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Contract assets include certain receivables from customers that are unconditional as all performance obligations with respect to the contract with the customer have been completed.

These amounts represent trade receivables and they are recorded within the caption “Accounts receivable, net” in the Consolidated Balance Sheets.

These amounts represent trade receivables and they are recorded within Accounts receivable, net in the Consolidated Balance Sheets.

Contract assets also include amounts that are conditional because certain performance obligations in contracts with customers are incomplete as of the balance sheet date.

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For these contracts, the Company recognizes revenue upon satisfaction of the product performance obligation.

These contract assets are included in the caption "Unbilled accounts receivable" in the Consolidated Balance Sheets until all performance obligations in the contract with the customer have been satisfied.

Herman Miller, Inc.

and Subsidiaries 62

These contract assets are included in Unbilled accounts receivable in the Consolidated Balance Sheets until all performance obligations in the contract with the customer have been satisfied.

Contract liabilities represent deposits made by customers before the satisfaction of performance obligation and recognition of revenue.

Upon completion of the performance obligation(s) that the Company has with the customer based on the terms of the contract, the liability for the customer deposit is relieved and revenue is recognized.

These customer deposits are included within the caption “Customer deposits” in the Consolidated Balance Sheets.

During the year ended May 29, 2021, the Company recognized Net sale s of $ 28.9 million relate d to customer deposits that were included in the balance sheet as of May 30, 2020.

These customer deposits are included within Customer deposits in the Consolidated Balance Sheets.

During the twelve months ended May 28, 2022, the Company

recognized net sales of $ 89.5 million rel ate d to customer deposits that were included in the balance sheet as of May 29, 2021.

The Company assumed a contract liability of $ 55.5 million related to the acquisition of Knoll, Inc on July 19, 2021.

Acquisitions and Divestitures

Maars Holding B.V.

On August 31, 2018, the Company acquired 48.2 % of the outstanding equity of Global Holdings Netherlands B.V., which owns 100% of Maars Holding B.V.

("Maars”), a Harderwijk, Netherlands-based worldwide leader in the design and manufacturing of interior wall solutions.

The Company acquired its 48.2 % ownership interest in Maars for approximately $ 6.1 million in cash.

The entity is accounted for using the equity method of accounting as the Company has significant influence, but not control, over the entity.

For the Maars equity method investment, the fair values assigned to the assets acquired were based on best estimates and assumptions as of August 31, 2018, and the valuation analysis was completed in the fourth quarter of fiscal 2019.

On July 19, 2021, the Company completed its previously announced acquisition of Knoll, a leader in the design, manufacture, marketing, and sale of high-end furniture products and accessories for workplace and residential markets.

The Company has included the financial results of Knoll in the consolidated financial statements from the date of acquisition.

The transaction costs associated with the acquisition, which included financial advisory, legal, proxy filing, regulatory and financing fees, were approximately $ 30.0 million for the twelve months ended May 28, 2022 and were recorded in general and administrative expenses.

Under the terms of the Agreement and Plan of Merger, each issued and outstanding share of Knoll common stock (excluding shares exercising dissenters rights, shares owned by Knoll as treasury stock, shares owned by the deal parties or their subsidiaries, or shares subject to Knoll restricted stock awards) was converted into a right to receive 0.32 shares of Herman Miller, Inc.

(now MillerKnoll, Inc.) common stock and $ 11.00 in cash, without interest.

The acquisition date fair value of the consideration transferred for Knoll was approximately $ 1,887.3 million, which consisted of the following (in millions, except share amounts):

Knoll Shares Herman Miller, Inc (now MillerKnoll, Inc.) Shares Exchanged Fair Value

Cash Consideration:

Shares of Knoll Common Stock issued and outstanding at July 19, 2021 49,444,825 $ 543.9

Knoll equivalent shares for outstanding option awards, outstanding awards of restricted common stock held by non-employee directors and outstanding awards of performance units held by individuals who are former employees of Knoll and remain eligible to vest at July 19, 2021 184,857 1.4

Total number of Knoll shares for cash consideration 49,629,682

Shares of Knoll Preferred Stock issued and outstanding at July 19, 2021 169,165 254.4

Consideration for payment to settle Knoll's outstanding debt 376.9

Share Consideration:

Shares of Knoll Common Stock issued and outstanding at July 19, 2021 49,444,825

Knoll equivalent shares for outstanding awards of restricted common stock held by non-employee directors and outstanding awards of performance units held by individuals who are former employees of Knoll and remain eligible to vest at July 19, 2021 74,857

Total number of Knoll shares for share consideration 49,519,682 15,843,921 688.3

Replacement Share-Based Awards:

Outstanding awards of Knoll Restricted Stock and Performance units relating to Knoll Common Stock at July 19, 2021 22.4

Total acquisition date fair value of consideration transferred $ 1,887.3

The aggregate cash paid in connection with the Knoll acquisition was $ 1,176.6 million.

MillerKnoll funded the acquisition through cash on-hand and debt proceeds, as described in Note 6.

Short-Term Borrowings and Long-Term Debt.

Outstanding unvested restricted stock awards, performance stock awards, performance stock units, and restricted stock units with a preliminary estimated fair value of $ 53.4 million automatically converted into Company awards.

Of the total fair value, $ 22.4 million was allocated to purchase consideration and $ 31.0 million was allocated to future services and will be expensed over the remaining service periods on a straight-line basis.

Per the terms of the converted awards any qualifying termination within the twelve months subsequent to the acquisition will result in accelerated vesting and related recognition of expense.

The transaction was accounted for as a business combination which requires that assets and liabilities assumed be recognized at their fair value as of the acquisition date.

The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition:

(In millions) Fair Value

Accounts receivable 82.3

Inventories 219.9

Other current assets 29.2

Property and equipment 296.5

Right-of-use assets 202.7

Intangible assets 756.6

Goodwill 903.5

Other noncurrent assets 25.1

Total assets acquired $ 2,603.8

Accounts payable 144.0

Other current liabilities 153.1

Lease liabilities 177.8

Other liabilities 241.6

Total liabilities assumed 716.5

Net Assets Acquired $ 1,887.3

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill.

Goodwill is primarily attributed to the assembled workforce of Knoll and anticipated operational synergies.

Goodwill related to the acquisition was recorded within the Knoll segment at $ 903.5 million.

Goodwill arising from the acquisition is not expected to be deductible for tax reporting purposes.

Certain measurement period adjustments were made during the twelve months ended May 28, 2022 to the preliminary fair values resulting in a net decrease to goodwill of $ 22.4 million primarily related to adjustments to the value of certain liabilities acquired and the fair value of intangible assets acquired.

The allocation of purchase price was completed in the fourth quarter of fiscal year 2022.

The following table summarizes the acquired identified intangible assets, valuation method employed, useful lives and fair value, as determined by the Company as of the acquisition date:

(In millions) Valuation Method Useful Life (years) Fair Value

Backlog Multi-Period Excess Earnings Less than 1 Year

Trade name - indefinite lived Relief from Royalty Indefinite 418.0

Trade name - amortizing Relief from Royalty 5 - 10 Years

Designs Relief from Royalty 9 - 15 years

Customer Relationships Multi-Period Excess Earnings 2 - 15 years

Total $ 756.6

Revenue and Net Loss of Knoll included in the Company's Consolidated Statements of Comprehensive Income (Loss) from the acquisition date of July 19, 2021 through May 28, 2022 are as follows (in millions):

Total Revenue $ 1,188.5

Net Loss $ ( 53.5 )

Unaudited Pro Forma Results of Operations

The results of Knoll's operations have been included in the Consolidated Financial Statements beginning on July 19, 2021.

The following table provides pro forma results of operations for the twelve months ended May 28, 2022 and May 29, 2021, as if Knoll had been acquired as of May 31, 2020.

The pro forma results include certain purchase accounting adjustments such as the estimated change in depreciation and amortization expense on the acquired tangible and intangible assets.The pro forma results also include the impact of incremental interest expense incurred to finance the merger.

Transaction related costs, including debt extinguishment costs related to the transaction, have been eliminated from the pro forma amounts presented in both periods.

Pro forma results do not include any anticipated cost savings from the integration of this acquisition.

Accordingly, such amounts are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the date indicated or that may result in the future.

Twelve Months Ended

(In millions) May 28, 2022 May 29, 2021

Net sales $ 4,100.2 $ 3,586.6

Net earnings attributable to MillerKnoll, Inc.

$ 12.9 $ 115.8

On October 25, 2019 (“naughtone Acquisition Date”), the Company purchased the remaining 47.5 % equity voting interest in naughtone (Holdings) Limited and naughtone Manufacturing Ltd.

(together “naughtone”).

naughtone is an upscale, contemporary furniture manufacturer based in Harrogate, North Yorkshire, UK.

The acquisition is intended to allow the Company to further promote growth and development of naughtone's ancillary product lines, and continue to support product innovation and sales growth.

The Company previously accounted for its ownership interest in naughtone as an equity method investment.

Upon increasing its ownership to 100 % on the naughtone Acquisition Date, the Company obtained a controlling financial interest and consolidated the operations of naughtone.

Total consideration paid for naughtone on the naughtone Acquisition Date was $ 45.9 million, exclusive of naughtone cash on hand.

The Company funded the acquisition with cash and cash equivalents.

The allocation of the purchase price was finalized during the fourth quarter of fiscal 2020.

The following table presents the allocation of purchase price related to acquired tangible assets:

(In millions)

Working capital, net of cash and inventory step-up 1.3

Net property and equipment 0.8

Net assets acquired $ 7.2

The purchase of the remaining equity interest in naughtone was considered to be an acquisition achieved in stages, whereby the previously held equity interest was remeasured as of the naughtone Acquisition Date.

The Company considered multiple factors in determining the fair value of the previously held equity method investment, including the price negotiated with the selling shareholder for the 47.5 % equity interest in naughtone, an income valuation model (discounted cash flow) and current trading multiples for comparable companies.

Based on this analysis, the Company recognized a non-taxable gain of approximately $ 30.0 million on the remeasurement of the previously held equity method investment of $ 20.5 million in fiscal 2020.

The net gain has been recognized in Gain on consolidation of equity method investments within the Consolidated Statements of Comprehensive Income.

The following table summarizes the acquired identified intangible assets, valuation method employed, useful lives and fair value, as determined by the Company at the naughtone Acquisition Date:

(In millions) Valuation Method Useful Life (years) Fair Value

Inventory Step-up Comparative Sales Approach 0.3 $ 0.2

Backlog Multi-Period Excess Earnings 0.3 0.8

Tradename Relief from Royalty Indefinite 8.5

Customer Relationships Multi-Period Excess Earnings 9.0 29.4

Goodwill related to the acquisition was recorded within the America's Contract and International Contract segments for $ 35.0 million and $ 22.5 million, respectively.

Subsequent to the acquisition, the Company recognized an impairment charge of

$ 2.5 million on the naughtone tradename in the fourth quarter of fiscal 2020 based on the results of the Company's annual indefinite-lived trade name impairment test.

Nine United Denmark A/S

3 unchanged sentences

In the fiscal periods leading up to December 2, 2019 (“HAY Acquisition Date”), the date when the Company purchased an additional 34 % equity voting interest in HAY, this licensing agreement was recorded as a definite life intangible asset and was being amortized over its 15-year useful life.

This asset was also recorded within Other amortizable intangibles, net within the Condensed Consolidated Balance Sheets as of June 1, 2019.

This asset was also recorded within Other amortizable intangibles, net within the Consolidated Balance Sheets as of May 30, 2020.

On December 2, 2019, the Company obtained a controlling financial interest in HAY through the purchase of an additional 34 % equity voting interest.

The completion of the acquisition will allow the Company to further promote growth and development of HAY's ancillary product lines and continue to support product innovation and sales growth.

The completion of the acquisition was intended to allow the Company to further promote growth and development of HAY's ancillary product lines and continue to support product innovation and sales growth.

The Company previously accounted for its ownership interest in HAY as an equity method investment, but upon increasing its ownership to 67 % on the HAY Acquisition Date, the Company consolidated the operations of HAY.

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As a result of the business combination, the Company recorded this arrangement at its HAY Acquisition Date fair value, which resulted in an increase in goodwill of $ 10.0 million and a net gain of $ 5.9 million, which was recorded within Gain on consolidation of equity method investments within the Consolidated Statements of Comprehensive Income.

The goodwill was recorded within the Company’s Retail segment.

The goodwill was recorded within the Company’s Global Retail segment.

The Company is a party to options, that if exercised, would require it to purchase the remaining 33 % of the equity in HAY, at fair market value.

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The following table presents the allocation of purchase price related to acquired tangible assets:

Herman Miller, Inc.

and Subsidiaries 63

(In millions)

17 unchanged sentences

Total $ 118.9

Goodwill related to the acquisition was recorded within the International Contract segment for $ 101.1 million and the Retail segment for $ 10.0 million.

Subsequent to the acquisition, the goodwill recorded to the Retail segment was fully impaired in the fourth quarter of fiscal 2020 based on the results of the Company's annual goodwill impairment assessment.

Goodwill related to the acquisition was recorded within the International Contract segment for $ 101.1 million and the Global Retail segment for $ 10.0 million.

Subsequent to the acquisition, the goodwill recorded to the Global Retail segment was fully impaired in the fourth quarter of fiscal 2020 based on the results of the Company's annual goodwill impairment assessment.

Additionally, the Company recognized an impairment charge of $ 20.7 million on the HAY tradename in the fourth quarter of fiscal 2020 based on the results of the Company's annual indefinite-lived trade name impairment test.

On October 25, 2019 (“naughtone Acquisition Date”), the Company purchased the remaining 47.5 % equity voting interest in naughtone (Holdings) Limited and naughtone Manufacturing Ltd.

(together “naughtone”).

naughtone is an upscale, contemporary furniture manufacturer based in Harrogate, North Yorkshire, UK.

The acquisition is intended to allow the Company to further promote growth and development of naughtone's ancillary product lines, and continue to support product innovation and sales growth.

The Company previously accounted for its ownership interest in naughtone as an equity method investment.

Upon increasing its ownership to 100% on the naughtone Acquisition Date, the Company obtained a controlling financial interest and consolidated the operations of naughtone.

Total consideration paid for naughtone on the naughtone Acquisition Date was $ 45.9 million, exclusive of naughtone cash on hand.

The Company funded the acquisition with cash and cash equivalents.

The allocation of the purchase price was finalized during the fourth quarter of fiscal 2020.

The following table presents the allocation of purchase price related to acquired tangible assets:

Herman Miller, Inc.

and Subsidiaries 64

(In millions)

Working capital, net of cash and inventory step-up 1.3

Net property and equipment 0.8

Net assets acquired $ 7.2

Based on this analysis, the Company recognized a non-taxable gain of approximately $ 30.0 million on the remeasurement of the previously held equity method investment of $ 20.5 million.

The net gain has been recognized in “Gain on consolidation of equity method investments" within the Consolidated Statements of Comprehensive Income.

The following table summarizes the acquired identified intangible assets, valuation method employed, useful lives and fair value, as determined by the Company at the naughtone Acquisition Date:

(In millions) Valuation Method Useful Life (years) Fair Value

Inventory Step-up Comparative Sales Approach 0.3 $ 0.2

Backlog Multi-Period Excess Earnings 0.3 0.8

Tradename Relief from Royalty Indefinite 8.5

Customer Relationships Multi-Period Excess Earnings 9.0 29.4

Goodwill related to the acquisition was recorded within the North America Contract and International Contract segments for $ 35.0 million and $ 22.5 million, respectively.

Subsequent to the acquisition, the Company recognized an impairment charge of $ 2.5 million on the naughtone tradename in the fourth quarter of fiscal 2020 based on the results of the Company's annual indefinite-lived trade name impairment test.

Pro Forma Results of Operations

The results of naughtone and HAY’s operations have been included in the Consolidated Financial Statements beginning on October 25, 2019 and December 2, 2019 respectively.

The following table provides pro forma results of operations for the years ended May 30, 2020 and June 1, 2019, as if naughtone and HAY had been acquired as of June 3, 2018.

The pro forma results include certain purchase accounting adjustments such as the estimated change in depreciation and amortization expense on the acquired tangible and intangible assets.

Pro forma results do not include any anticipated cost savings from the planned integration of these acquisitions, or the gain on the consolidation of the HAY and naughtone equity method investments of approximately $ 36.2 million.

Accordingly, such amounts are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the dates indicated or that may result in the future.

(In millions) May 30, 2020 June 1, 2019

Net sales $ 2,580.6 $ 2,757.3

Net (loss) earnings attributable to Herman Miller, Inc.

$ ( 46.3 ) $ 163.7

Contract Furniture Dealership Divestiture

On January 31, 2022, the Company completed the sale of a wholly-owned contract furniture dealership in Toronto, Canada for cash consideration of $ 2.8 million.

A pre-tax gain of $ 2.0 million was recognized as a result of the sale within Selling, general and administrative within the Consolidated Statements of Comprehensive Income.

(In millions) May 28, 2022 May 29, 2021

2 unchanged sentences

Total $ 587.3 $ 228.6

65 2021 Annual Report

Inventories valued using LIFO amounted to $ 21.8 million and $ 24.9 million as of May 29, 2021 and May 30, 2020, respectively.

If all inventories had been valued using the first-in first-out method, inventories would have been $ 230.2 million and $ 210.8 million at May 29, 2021 and May 30, 2020, respectively.

Inventories are primarily valued using the first-in first-out method.

See Note 1, Significant Accounting and Reporting Policies for the impact a retrospective change in the method of valuing inventories made on the Consolidated Balance Sheets for the periods presented.

Investments in Nonconsolidated Affiliates

4 unchanged sentences

Investments in nonconsolidated affiliates $ 9.9 $ 11.7

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Equity earnings from nonconsolidated affiliates, net of tax $ — $ 0.3 $ 5.0

2 unchanged sentences

Ownership Interest May 28, 2022 May 29, 2021

Kvadrat Maharam Arabia DMCC — % 50.0 %

Kvadrat Maharam Pty Limited 50.0 % 50.0 %

Kvadrat Maharam Turkey JSC — % 50.0 %

Danskina B.V.

Global Holdings Netherlands B.V.

1 unchanged sentence

Kvadrat Maharam

The Kvadrat Maharam nonconsolidated affiliates are distribution entities that are engaged in selling decorative upholstery, drapery and wall covering products.

At May 29, 2021 and May 30, 2020, the Company's investment value in Kvadrat Maharam Pty was approximately equal to and $ 1.7 million more than the Company's proportionate share of the underlying net assets, respectively.

This difference was driven by a step-up in fair value of the investment in Kvadrat Maharam Pty, stemming from the Maharam business combination.

This amount is considered to be a permanent basis difference.

The Kvadrat Maharam Pty Limited nonconsolidated affiliate is a distribution entity engaged in selling decorative upholstery, drapery and wall covering products.

In fiscal 2020 the Company agreed to fully divest its interest in Kvadrat Maharam Arabia DMCC, Kvadrat Maharam Turkey JSC and Danskina B.V for approximately $ 3 million.

7 unchanged sentences

Of this difference, $ 2.7 million is being amortized over the remaining useful lives of the assets, while $ 0.4 million is considered a permanent difference.

Herman Miller, Inc.

and Subsidiaries 66

At May 28, 2022, the Company's investment value in Maars is $ 2.2 million more than the Company's proportionate share of the underlying net assets, of which $ 1.8 million is being amortized over the remaining useful lives of the assets, while $ 0.4 million was considered a permanent basis difference.

1 unchanged sentence

Sales to and purchases from nonconsolidated affiliates were as follows for the periods presented below:

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Sales to nonconsolidated affiliates $ 0.7 $ 1.0 $ 3.6

7 unchanged sentences

(In millions) May 28, 2022 May 29, 2021

Debt securities, 6.0 %, due March 1, 2021

Debt securities, 4.95 %, due May 20, 2030

Syndicated revolving line of credit, due August 2024 — 225.0

Syndicated revolving line of credit, due July 2026

Term Loan A, 2.5000 %, due July 2026

Term Loan B, 2.7500 % due July 2028

Supplier financing program 3.1 2.2

Total debt $ 1,427.9 $ 277.1

Unamortized discount and issuance costs ( 19.4 ) —

Current debt ( 29.3 ) ( 2.2 )

Long-term debt $ 1,379.2 $ 274.9

The Company's syndicated revolving line of credit provides the Company with up to $ 500 million in revolving variable interest borrowing capacity and included an "accordion feature" allowing the Company to increase, at its option and subject to the approval of the participating banks, the aggregate borrowing capacity of the facility by up to $ 250 million.

Outstanding borrowings bear interest at rates based on the prime rate, federal funds rate, LIBOR or negotiated rates as outlined in the agreement.

Interest is payable periodically throughout the period if borrowings are outstanding.

In connection with the acquisition of Knoll, in July 2021, the Company entered into a credit agreement that provided for a syndicated revolving line of credit and two term loans.

The revolving line of credit provides the Company with up to $ 725 million in revolving variable interest borrowing capacity that matures in July 2026, replacing the previous $ 500 million syndicated revolving line of credit.

The term loans consist of a five-year senior secured term loan "A" facility with an aggregate principal amount of $ 400 million and a seven-year senior secured loan "B" facility with an aggregate principal amount of $ 625 million, the proceeds of which were used to finance a portion of the cash consideration for the acquisition of Knoll, for the repayment of certain debt of Knoll, and to pay fees, costs, and expenses related thereto.

Both term loans have a LIBOR-based floating interest rate plus applicable margin.

The credit agreement provides for the transition from LIBOR to SOFR, the

recommended risk-free reference rate of the Federal Reserve Board and Alternative Reference Rates Committee, as of the LIBOR Transition Date, as defined within the credit agreement.

The credit agreement includes accommodations regarding the transition to SOFR.

T he Company also repaid $ 64 million of private placement notes due May 20, 2030.

A loss on extinguishment of debt of approximately $ 13.4 million was recognized as part of the repayment of the private placement notes, which represented the premium on early redemption.

The Company made principal payments on term loan "A" and "B" during the year ended May 28, 2022 in the amount of $ 10.0 million and $ 3.1 million, respectively.

Prior to July 2021, the Company's syndicated revolving line of credit provided the Company with up t o $ 500 million in revolving variable interest borrowing capacity and included an "accordion feature" allowing the Company to increase , at its option and subject to the approval of the participating banks, the aggregate borrowing capacity of the facility by up to $ 250 million.

Outstanding borrowings would bear interest at rates based on the prime rate, federal funds rate, LIBOR or negotiated rates as outlined in the agreement.

Interest was payable periodically throughout the period if borrowings were outstanding.

The Company paid off the outstanding balance due on the syndicated revolving line of credit during the first quarter of 2022.

In June 2020, the Company repaid the $ 265 million draw on its syndicated revolving line of credit that was taken as a precautionary measure in March 2020 to provide additional near-term liquidity given the uncertainty related to COVID-19.

7 unchanged sentences

$ 296.6 $ 265.2

The unsecured senior revolving credit facility restricts, without prior consent, the Company's borrowings, capital leases and the sale of certain assets.

In addition, the Company has agreed to maintain certain financial performance ratios, which include a maximum leverage ratio covenant, which is measured by the ratio of debt to trailing four quarter adjusted EBITDA (as defined in the credit agreement) and is required to be less than 3.5 :1, except that the Company may elect, under certain conditions, to increase the maximum Leverage Ratio to 4 :1 for four consecutive fiscal quarter

67 2021 Annual Report

The covenants also require a minimum interest coverage ratio, which is measured by the ratio of trailing four quarter EBITDA to trailing four quarter interest expense (as defined in the credit agreement) and is required to be greater than 3.5 :1.

The senior secured revolving credit facility restricts, without prior consent, the Company's borrowings, capital leases, investments, liens, mergers, consolidations, restricted payments, and the sale of certain assets.

In addition, for the credit facility and Term Loan A, the Company has agreed to maintain a financial performance ratio, a maximum first lien secured net leverage ratio covenant which is measured by the ratio of first lien debt (less unrestricted cash) to trailing four quarter adjusted consolidated EBITDA (as defined in the credit agreement) and is required to be less than 4.25 :1 for the trailing four quarter periods ending November 21, 2021, and the three immediately succeeding fiscal quarters, then 4.00 :1 for the next four fiscal quarters, and 3.75 :1 at the end of each fiscal quarter thereafter, except that the Company may elect, under certain conditions, a step-up in the covenant level of 0.25 or 0.50 for the four subsequent trailing four quarter periods.

Adjusted EBITDA is generally defined in the credit agreement as EBITDA adjusted by certain items which include non-cash share-based compensation, non-recurring restructuring costs and extraordinary items.

At May 29, 2021 and May 30, 2020, the Company was in compliance with all of these restrictions and performance ratios.

At May 28, 2022 the Company was in compliance with these restrictions and performance ratios.

On May 20, 2020, the Company entered into a third amendment to its existing Private Shelf Agreement, dated December 14, 2010, as amended (together with the third amendment, the "Agreement"), between the Company and PGIM, Inc.

(formerly known as Prudential Investment Management, Inc.) and certain of its affiliates (collectively, “Prudential”).

The Agreement provides for a $ 150.0 million revolving facility, which includes $ 50.0 million of unsecured senior notes that were repaid on March 1, 2021 (the "Existing Notes") and an additional $ 50.0 million aggregate principal amount of unsecured senior notes issued on May 20, 2020 (the "2020 Notes").

The 2020 Notes are due on May 20, 2030 and bear interest at a fixed annual coupon rate of 4.95 %.

The Company intends to use the proceeds of the 2020 Notes for general corporate purposes and/or to refinance existing indebtedness, including the Existing Notes.

The Agreement also establishes an uncommitted shelf facility (the “Facility”), under which Prudential will consider one or more requests from the Company to purchase up to an additional $ 50.0 million in aggregate amount of the Company’s senior unsecured notes from time to time.

The interest rate on any future notes issued under the Facility will be based on the benchmark Treasury rate corresponding to the weighted average life of the notes, plus a spread as determined by Prudential.

The Facility will expire on May 20, 2023.

The Agreement provided for a $ 150.0 million revolving facility, which included $ 50.0 million of unsecured senior notes that were repaid on March 1, 2021 (the "Existing Notes") and an additional $ 50.0 million aggregate principal amount of unsecured senior notes issued on May 20, 2020 (the "2020 Notes").

The Notes and facility were paid off with the new revolver and term loans entered in connection with the acquisition of Knoll in July 2021.

Annual maturities of debt for the five fiscal years subsequent to May 28, 2022 are as shown in the table below.

1 unchanged sentence

Thereafter 590.5

Herman Miller, Inc.

and Subsidiaries 68

Total $ 1,427.9

Supplier Financing Program

2 unchanged sentences

The Company has lengthened the payment terms for certain suppliers that have chosen to participate in the program.

As a result, certain amounts due to suppliers have payment terms that are longer than standard industry practice and as such, these amounts have been excluded from the caption “Accounts payable” in the Condensed Consolidated Balance Sheets as the amounts have been accounted for by the Company as a current debt obligation.

Accordingly, $ 2.2 million and $ 1.4 million have been recorded within the caption “Short-term borrowings and current portion of long-term debt” for the periods ended May 29, 2021 and May 30, 2020, respectively.

Construction-Type Lease

During fiscal 2015, the Company entered into a lease agreement for the occupancy of a new studio facility in Palo Alto, California which runs through fiscal 2026.

In fiscal 2017, the Company became the deemed owner of the leased building for accounting purposes as a result of the Company's involvement during the construction phase of the project.

The lease was therefore accounted for as a financing lease and the building and related financing liability were initially recorded at fair value in the Consolidated Balance Sheets within Construction in progress and Other accrued liabilities.

During the first quarter of fiscal 2019, the construction was substantially completed, and the property was placed in service.

As a result, the Company began depreciating the assets over their estimated useful lives.

The Company also reclassified the related financing liability to Long-term debt.

The carrying value of the building was $ 6.7 million and the related financing liability was $ 6.9 million at June 1, 2 019.

A s a result of the adoption of ASC 842 in the first quarter of fiscal 2020, the Company derecognized its construction-type lease asset and financing liability and there was no related cumulative adjustment to retained earnings.

Accounting Policies

As a result, certain amounts due to suppliers have payment terms that are longer than standard industry practice and as such, these amounts have been excluded from Accounts payable in the Consolidated Balance Sheets as the amounts have been accounted for by the Company as a current debt, within Short-term borrowings and current portion of long-term debt.

The Company has leases for retail studios, showrooms, manufacturing facilities, warehouses and vehicles, which expire at various dates through 2042.

Certain lease agreements include contingent rental payments based on per unit usage over a contractual amount and others include rental payments adjusted periodically for inflationary indexes.

For any new or modified lease, the Company, at the inception of the contract, determines whether a contract is or contains a lease.

Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option.

Leases, and any leasehold improvements, are depreciated over the expected lease term.

The Company’s leases do not contain any residual value guarantees or material restrictive covenants.

The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less.

The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Variable lease costs associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs.

Variable lease costs are presented as operating expenses in the Company’s Consolidated Statements of Operations and Comprehensive Income in the same line item as the expense arising from fixed lease payments for operating leases.

69 2021 Annual Report

Additionally, certain leases include renewal or termination options, which can be exercised at the Company’s discretion.

Lease terms include the noncancelable portion of the underlying leases along with any reasonably certain lease periods associated with available renewal periods.

The Company’s leases do not contain any residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is a lease at contract inception.

If leased assets have leasehold improvements, the depreciable life of those leasehold improvements are limited by the expected lease term.

The Company's lease costs recognized in the Consolidated Statement of Income consist of the following:

5 unchanged sentences

Total $ 110.1 $ 61.8

*Not included in the table above for the year ended May 29, 2021 are variable lease costs of approximately $ 84.5 million for raw material purchases under certain supply arrangements that the Company has determined to meet the definition of a lease.

Included in the Company's Right-of-use assets and Lease liabilities are variable lease costs, not included in the table above, for raw material purchases under certain supply arrangements that the Company has determined to meet the definition of a lease:

Year Ended Year Ended

May 28, 2022 May 29, 2021

Variable lease costs $ 95.6 $ 84.5

During the fourth quarter of fiscal 2020, the Company determined it was more likely than not that the fair value of certain right of use assets were below their carrying values and assessed these assets for impairment.

7 unchanged sentences

Present value of lease liabilities $ 478.1

*Lease payments exclude $ 20.9 million of legally binding minimum lease payments for leases signed but not yet commenced, primarily related to a new DWR corporate office in Stamford, CT expected to be occupied in fiscal 2022.

The long-term portion of the lease liabilities included in the amounts above is $ 196.9 million and the remainder of the lease liabilities are included in Other accrued liabilities in the Condensed Consolidated Balance Sheets.

As of May 29, 2021 and May 30, 2020, the weighted average remaining lease term for all operating leases was 7 years.

The weighted average discount rate for operating leases as of May 29, 2021 and May 30, 2021 was 2.8 %, and 3.1 %, respectively.

Herman Miller, Inc.

and Subsidiaries 70

During the years ended May 29, 2021 and May 30, 2020, the cash paid for leases included in the measurement of the liabilities and the operating cash flows was $ 45.3 million and $ 49.2 million, respectively.

Right of use assets obtained in exchange for new liabilities was $ 58.1 million and $ 13.4 million for the years ended May 29, 2021 and May 30, 2020, respectively.

*Lease payments exclude $ 9.8 million of legally binding minimum lease payments for leases signed but not yet commenced.

Supplemental cash flow and other lease information as of and for periods indicated, includes (dollars in millions):

Year Ended Year Ended

May 28, 2022 May 29, 2021

Weighted-average remaining lease term (in years)

Operating leases 7.1 7

Weighted-average discount rate

Operating leases 1.9 % 2.8 %

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flow from operating leases $ 85.7 $ 45.3

ROU assets obtained in exchange for new operating lease liabilities

Operating leases $ 89.1 $ 58.1

Employee Benefit Plans

The Company maintains retirement benefit plans for substantially all of its employees.

One of the Company's wholly owned foreign subsidiaries has a defined-benefit pension plan based upon an average final pay benefit calculation.

The measurement date for this plan is the last day of the fiscal year and the plan is frozen to new participants.

The Company acquired Knoll during fiscal year 2022.

The Knoll subsidiary has one domestic defined-benefit pension plan covering eligible U.S.

nonunion employees.

The measurement date for this plan is the last day of the fiscal year and the plan is frozen to new participants.

Benefit Obligations and Funded Status

The following table presents, for the fiscal years noted, a summary of the changes in the projected benefit obligation, plan assets and funded status of the Company's pension plan:

Pension Benefit

The following table presents, for the fiscal years noted, a summary of the changes in the projected benefit obligation, plan assets and funded status of the Company's pension plans:

Pension Benefits

(In millions) 2022 2021

Domestic International Domestic International

Change in benefit obligation:

Benefit obligation at beginning of year $ — $ 140.9 $ — $ 126.5

$ 126.5 $ 109.1

Acquisition of Knoll 189.8 — — —

Interest cost 3.9 2.4 — 2.2

Plan Amendments

Expected Administrative Expenses 0.5 — — —

Loss related to settlement 1.0 — — —

Foreign exchange impact — ( 14.1 ) — 18.6

Actuarial (gain) loss (1)

Benefits paid

( 28.0 ) ( 21.9 ) — ( 2.9 )

Administrative expenses paid ( 0.5 ) — — —

Benefits paid ( 4.2 ) ( 2.8 ) — ( 3.5 )

Benefits paid related to settlement ( 9.9 ) — — —

Benefit obligation at end of year $ 152.6 $ 104.5 $ — $ 140.9

$ 140.9 $ 126.5

Change in plan assets:

Fair value of plan assets at beginning of year $ — $ 109.9 $ — $ 88.1

$ 88.1 $ 88.2

Acquisition of Knoll 175.4 — — —

Actual return on plan assets ( 16.8 ) ( 6.9 ) — 6.6

1 unchanged sentence

Employer contributions — 5.0 — 5.0

Actual expenses paid ( 0.5 ) — — —

Benefits paid ( 14.1 ) ( 2.7 ) — ( 3.5 )

( 3.5 ) ( 3.1 )

Fair value of plan assets at end of year $ 144.0 $ 93.5 $ — $ 109.9

$ 109.9 $ 88.1

Funded status:

Under-funded status at end of year $ ( 8.6 ) $ ( 11.0 ) $ — $ ( 31.0 )

$ ( 31.0 ) $ ( 38.4 )

Components of the amounts recognized in the Consolidated Balance Sheets:

1 unchanged sentence

Non-current liabilities $ ( 8.6 ) $ ( 10.9 ) $ — $ ( 30.9 )

$ ( 30.9 ) $ ( 38.3 )

Components of the amounts recognized in Accumulated other comprehensive loss before the effect of income taxes:

Prior service cost $ — $ 0.5 $ — $ 0.7

Unrecognized net actuarial loss (gain)

$ 61.8 $ 63.2

Accumulated other comprehensive loss

$ 62.5 $ 63.9

Unrecognized net actuarial (gain) loss ( 2.8 ) 41.4 — 61.8

Accumulated other comprehensive (gain) loss $ ( 2.8 ) $ 41.9 $ — $ 62.5

(1) In fiscal 2022 and 2021, the net actuarial (gain) loss includes amounts resulting from changes in actuarial assumptions utilized to calculate our benefit plan obligations such as the weighted-average discount rate.

The accumulated benefit obligation for the Company's pension plan tota led $ 135.5 million and $ 123.9 million as of fiscal 2021 and fiscal 2020, respectively.

The following table is a summary of the annual cost of the Company's pension plan:

71 2021 Annual Report

The accumulated benefit obligation for the Company's pension plans tota led $ 250.1 million and $ 135.5 million as of fiscal 2022 and fiscal 2021, respectively.

The following table is a summary of the annual cost of the Company's pension plans:

Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income (Loss):

(In millions) 2022 2021 2020

Domestic International Domestic International Domestic International

Interest cost $ 3.9 $ 2.4 $ — $ 2.2 $ — $ 2.4

1 unchanged sentence

Amortization of prior service costs — 0.1 — 0.1 — 0.1

Expected Administrative Expenses 0.5 — — — — —

Settlement & Curtailment ( 0.1 ) — — — — —

Amortization of net (gain)/loss — 4.5 — 5.3 — 3.2

Net periodic benefit cost $ 3.0 $ 1.3 $ 1.0

Net periodic benefit (income) cost $ ( 3.0 ) $ 1.9 $ — $ 3.0 $ — $ 1.3

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss):

(In millions) 2022 2021

Domestic International Domestic International

Net actuarial (gain) loss $ ( 2.9 ) $ ( 10.0 ) $ — $ ( 4.9 )

1 unchanged sentence

Total recognized in other comprehensive loss $ ( 2.8 ) $ ( 20.6 ) $ — $ ( 1.4 )

The net actuarial loss, incl uded in accumulated other comprehensive loss (pretax), expected to be recognized in net periodic benefit cost during fiscal 2022 is $ 4.8 million.

Actuarial Assumptions

The weighted-average actuarial assumptions used to determine the benefit obligation amounts and the net periodic benefit cost for the Company's pension plan are as follows:

The weighted-average actuarial assumptions used to determine the benefit obligation amounts and the net periodic benefit cost for the Company's pension plans are as follows:

Weighted-average assumptions used in the determination of net periodic benefit cost:

(Percentages) 2022 2021 2020

Domestic International Domestic International Domestic International

Discount rate (1)

1.66 2.39 2.87

Compensation increase rate 2.75 3.20 3.10

varies 1.99 — 1.66 — 2.39

Compensation increase rate N/A 3.20 — 2.75 — 3.20

Expected return on plan assets 5.10 4.80 — 4.80 — 4.80

(1) Due to settlement activity during FYE 2022 in the domestic plan, there were four remeasurements as of 8/21/2021, 11/27/2021, 2/26/2022, and 5/28/2022.

The discount rate for the benefit obligation at the beginning of each period is 2.90 %, 2.89 %, 3.00 %, and 3.52 %, respectively.

The discount rate for the interest cost for each period is 2.27 %, 2.28 %, 2.48 %, and 3.10 %, respectively.

Weighted-average assumptions used in the determination of the projected benefit obligations:

1 unchanged sentence

4.40 3.33 — 1.99 — 1.66

Compensation increase rate 3.20 2.75 3.20

Compensation increase rate N/A 4.45 — 3.20 — 2.75

The Company uses a full yield curve approach to estimate the interest component of net periodic benefit cost for pension benefits.

1 unchanged sentence

Plan Assets and Investment Strategies

The Company's employee benefit plan assets consist mainly of listed fixed income obligations and common/collective trusts.

The assets of the Company's employee benefit plans consist mainly of listed fixed income obligations and common/collective trusts.

The Company's primary objective for invested pension plan assets is to provide for sufficient long-term growth and liquidity to satisfy all of its benefit obligations over time.

5 unchanged sentences

The Company utilizes independent investment managers to assist with investment decisions within the overall guidelines of the investment strategy.

The target asset allocation at the end of fiscal 2021 and asset categories for the Company's pension plan for fiscal 2021 and 2020 are as follows:

Herman Miller, Inc.

and Subsidiaries 72

Asset Category Targeted Asset Allocation Percentage Percentage of Plan Assets at Year End

2021 2020 2021 2020

The target asset allocation at the end of fiscal 2022 and asset categories for the Company's pension plans for fiscal 2022 and 2021 are as follows:

Targeted Asset Allocation Percentage

Asset Category 2022 2021

Domestic International Domestic International

Fixed income 46 % 33 % — % 31 %

1 unchanged sentence

Total 100 % 100 % — % 100 %

Percentage of Plan Assets at Year End

Domestic International Domestic International

Fixed income 45 % 36 % — % 32 %

Common collective trusts 55 % 64 % — % 68 %

Total 100 % 100 % — % 100 %

(In millions) May 28, 2022

1 unchanged sentence

Cash and cash equivalents $ 2.4 $ — $ 2.4

Foreign government obligations — 34.2 34.2

government securities — 10.3 10.3

Corporate bonds — 51.8 51.8

Common collective trusts-balanced — 79.5 79.5

Total $ 2.4 $ 141.6 $ 144.0

International

(In millions) May 28, 2022

Asset Category Level 1 Level 2 Total

Cash and cash equivalents $ 4.5 $ — $ 4.5

Foreign government obligations — 29.3 29.3

1 unchanged sentence

Total $ 4.5 $ 89.0 $ 93.5

73 2021 Annual Report

(In millions) Domestic

Asset Category Level 1 Level 2 Total

Cash and cash equivalents $ — $ — $ —

Foreign government obligations — — —

Common collective trusts-balanced — — —

Total $ — $ — $ —

(In millions) International

Asset Category Level 1 Level 2 Total

Cash and cash equivalents $ 0.7 $ — $ 0.7

Foreign government obligations — 34.2 34.2

Common collective trusts-balanced — 75.0 75.0

Total $ 0.7 $ 109.2 $ 109.9

The Company reviews pension funding requirements to determine the contribution to be made in the next year.

Actual contributions will be dependent upon investment returns, changes in pension obligations and other economic and regulatory factors.

During fiscal 2021 and fiscal 2020, the Company made total cash contributions of $ 5.4 million to its benefit plans.

The Company expects to contribute approximately $ 5.8 million to our benefit plans in fiscal 2022.

During fiscal 2022 and fiscal 2021, the Company made total cash contributions of $ 5.0 million and $ 5.4 million, respectively, to its pension plans.

The Company expects to contribute approximately $ 11.9 million to its pension plans in fiscal 2023.

The following represents a summary of the benefits expected to be paid by the plans in future fiscal years.

1 unchanged sentence

(In millions) Pension Benefits

Domestic International

2023 $ 11.1 $ 2.7

Profit Sharing, 401(k) Plan, and Core Contribution

Substantially all of the Company’s domestic employees are eligible to participate in a defined contribution retirement plan, primarily the Herman Miller, Inc.

profit sharing and 401(k) plan (the "plan").

2024 $ 11.2 $ 2.8

2025 $ 11.3 $ 2.9

2026 $ 11.5 $ 2.9

2027 $ 11.3 $ 3.0

2028-2032 $ 50.4 $ 16.4

401(k) Plan and Core Contribution

Substantially all of the Company’s domestic employees are eligible to participate in a defined contribution retirement plan, primarily the MillerKnoll Retirement Plan and the Knoll Retirement Savings Plan.

Employees under the plan are eligible to begin participating on their date of hire.

Effective June 2017, the Company matches 100 percent of employee contributions to their 401(k) accounts up to 3 percent of their pay which was subsequently increased to 4 percent in September 2017 for all eligible employees.

A core contribution of 4 percent is also included for most participants of the plan.

There was an additional 1 percent contribution added to the quarterly Core Contribution for the quarter prior to the increased Employer Matching Contribution effective September 3, 2017.

The Company contributes to the plans as matching contributions a certain percentage of the participant’s salary deferral, subject to certain limitations defined in the plan documents.

A core contribution based on a set percentage of wages is also included for most participants of the plans.

The Company’s other defined contribution retirement plans may provide for matching contributions, non-elective contributions and discretionary contributions as declared by management.

During the fourth quarter of fiscal 2020, the Company elected to temporarily suspend the Company's core contribution and 401(k) matches in order to reduce costs and preserve liquidity.

The Company reinstated the previously suspended employer-paid retirement plan contributions in the fourth quarter of fiscal 2021, and has also elected to make a catch-up contribution for the employer-paid retirement plan contributions that were suspended for a majority of fiscal 2020.

There were no Herman Miller, Inc.

profit sharing contributions made in fiscal 2021, fiscal 2020 or fiscal 2019.

The expense recorded for the Company's 401(k) matching and core contributions was $ 23.7 million, $ 22.2 million and $ 25.4 million in fiscal years 2021, 2020 and 2019, respectively.

The Company reinstated the previously suspended employer-paid retirement plan contributions in the fourth quarter of fiscal 2021, and elected to make a catch-up contribution for the employer-paid retirement plan contributions that were suspended for a majority of fiscal 2020.

The expense recorded for the Company's 401(k) matching and core contributions wa s $ 36.3 million, $ 23.7 million and $ 22.2 million in fiscal years 2022, 2021 and 2020, respectively.

Common Stock and Per Share Information

1 unchanged sentence

(In millions, except shares) 2022 2021 2020

Numerator for both basic and diluted EPS, Net earnings (loss) attributable to Herman Miller, Inc.

Numerator for both basic and diluted EPS, Net (loss) earnings attributable to MillerKnoll, Inc.

$ ( 27.1 ) $ 174.6 $ ( 8.7 )

2 unchanged sentences

Denominator for diluted EPS 73,160,212 59,389,598 58,920,653

Herman Miller, Inc.

and Subsidiaries 74

Equity awar ds of 207,365 shares, 142,224 shares and 218,037 shares of common stock were excluded from the denominator for the computation of diluted earnings per share for the fiscal years ended May 29, 2021, May 30, 2020 and June 1, 2019, respectively, because they were anti-dilutive.

Equity awar ds of 1,245,988 shares, 207,365 sha res and 360,462 shares of common stock were excluded from the denominator for the computation of diluted earnings per share for the fiscal years ended May 28, 2022, May 29, 2021 and May 30, 2020, respectively, because they were anti-dilutive.

The Company has a share repurchase plan authorized by the Board of Directors on January 16, 2019, which provides a share repurchase authorization of $ 250.0 million with no specified expiration date.

The approximate dollar value of shares available for purchase under the plan at May 28, 2022 was $ 220.5 million.

During fiscal year 2021, 2020, and 2019, shares repurchased and retired under the current and past repurchase plans total ed 38,931 , 641,192 , and 1,326,023 shares respectively.

During fiscal year 2022, 2021, and 2020, shares repurchased under the repurchase plan totaled 390,010 , 38,931 , and 641,192 shares respectively.

Stock-Based Compensation

The Company utilizes equity-based compensation incentives as a component of its employee and non-employee director and officer compensation philosophy.

Currently, these incentives consist principally of stock options, restricted stock, restricted stock units and performance share units.

The Company issues shares in connection with its share-based compensation plans from authorized, but unissued, shares.

At May 29, 2021 there were 7,182,670 shares authorized under the various stock-based compensation plans.The Company also offers a stock purchase plan for its domestic and certain international employees.

The Company utilizes stock-based compensation incentives as a component of its employee and non-employee director and officer compensation philosophy.

Currently, these incentives consist principally of stock options, restricted stock units, performance stock units, deferred stock units, and restricted shares.

At May 28, 2022, there were 8,164,945 shares authorized for issuance under active long-term incentive compensation plans:

7,182,670 shares authorized under the MillerKnoll, Inc.

2020 Long Term Incentive Plan (the "LTIP") and 982,275 shares authorized under the Knoll, Inc.

2021 Stock Incentive Plan, as amended.

In addition, under the terms of the MillerKnoll, Inc.

Employee Stock Purchase Plan (the "ESPP"), the Company has reserved 4 million shares for purchase by its domestic and certain international employees.

For all stock-based compensation plans, the Company issues authorized but unissued shares to fulfill plan terms.

Valuation and Expense Information

The Company measures the cost of employee services received in exchange for an award of equity instruments based on their grant-date fair market value.

This cost is recognized over the requisite service period.

Certain of the Company's equity-based compensation awards contain provisions that allow for continued vesting into retirement.

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the date of grant.

This compensation expense is recognized over the requisite service period, which includes any applicable performance period.

Certain Company stock-based compensation awards contain provisions that allow for continued vesting into retirement.

Stock-based awards are considered fully vested for expense attribution purposes when the employee's retention of the award is no longer contingent on providing subsequent service.

The Company classifies pre-tax stock-based compensation expense primarily within Operating expenses in the Consolidated Statements of Comprehensive Income.

Pre-tax compensation expense and the related income tax benefit for all types of stock-based programs were as follows for the periods indicated:

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

Excluding fully vested and non-forfeitable deferred stock units described under "Deferred Compensation Plan" below, pre-tax compensation expense and the related income tax benefit for all types of stock-based programs were as follows for the periods indicated:

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Employee stock purchase program $ 0.5 $ 0.4 $ 0.3

Stock option plans 3.7 0.6 ( 0.4 )

Stock options 3.6 3.7 0.6

Restricted stock units 15.3 4.1 3.9

Performance share units 2.8 0.8 ( 2.1 )

Restricted stock awards 9.2 — —

Total $ 31.4 $ 9.0 $ 2.7

1 unchanged sentence

As of May 28, 2022, total pre-tax stock-based compensation cost not yet recognized related to non-vested awards was approximately $ 19.5 million.

The weighted-average period over which this amount is expected to be recognized is 1.5 years.

The weighted-average period over which this amount is expected to be recognized is 1.0 year.

General terms, activity, and valuation methodology for each of the Company's stock-based compensation plans are as follows:

Employee Stock Purchase Program

Under the terms of the Company's Employee Stock Purchase Plan, 4 million shares of authorized common stock were reserved for purchase by plan participants at 85 percent of the market price.

Shares of common stock purchased under the employee stock purchase plan were 71,468 , 70,145 , and 62,957 for the fiscal years ended 2021, 2020 and 2019 respectively.

Pursuant to the terms of the ESPP, eligible employees are permitted to purchase shares of our common stock at a price equal to 85 % of the closing price on the date of purchase, which coincides with the last trading day of each fiscal quarter.

The ESPP is considered a liability award with estimated expense recognized over the three-month offering period which is subsequently adjusted to actual expense based on the fair value as of the date of purchase.

Shares of common stock purchased under the ESPP were 87,562 , 71,468 , and 70,145 during the fiscal years ended 2022, 2021 and 2020 respectively.

Stock Options

The Company grants options to purchase the Company's stock to certain key employees and non-employee directors under its Long-Term Incentive Plan, as amended (the "LTIP") at a price not less than the market price of the Company's common stock on the date of grant.

Under the current award program, all options become exercisable between one

75 2021 Annual Report

year and three years from date of grant and expire ten years from date of grant.

Most options are subject to graded vesting with the related compensation expense recognized on a straight-line basis over the requisite service period.

The Company grants options to purchase the Company's stock to certain key employees and non-employee directors under its LTIP.

Under the current award program, all options become exercisable between one year and three years from the date of grant and expire ten years from the date of grant.

Most options are subject to graded vesting, and the related compensation expense is based on the fair value of the stock options on the date of grant using the Black-Scholes model and is recognized on a straight-line basis over the requisite service period.

In fiscal 2022, there were two stock option valuation dates.

In fiscal 2021, there was one stock option valuation date, but two valuations.

In fiscal 2020 were no stock option grants awarded to employees or non-employee directors.

In fiscal 2019 there were two separate stock option valuation dates.

Therefore, the table below has been presented with the assumptions relevant to each valuation date.

In fiscal 2020, there were no stock option grants awarded to employees or non-employee directors.

The Company estimated the fair value of employee stock options on the date of grant using the Black-Scholes model.

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Risk-free interest rates (1)

2.30-2.47% N/A 2.65-2.70%

0.47 % 0.23 %- 0.25 %

Expected term of options (2)

3.8-4.1 years N/A 4.4 years

3.3 years 3.8 - 4.1 years

Expected volatility (3)

43-44% N/A 27 %

49.03 % 43 % - 44 %

Dividend yield (4)

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Weighted-average grant-date fair value of stock options:

Granted with exercise prices equal to the fair market value of the stock on the date of grant $ 6.10 N/A $ 8.05

Granted with exercise prices equal to the fair market value of the stock on the date of grant $ 13.87 -$ 14.36

Granted with exercise prices greater than the fair market value of the stock on the date of grant N/A $ 5.62 N/A

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(3) The blended volatility approach was used.

90% term-matched historical volatility from daily stock prices and 10% percent weighted average implied volatility from the 90 days preceding the grant date.

(4) Represents the quarterly dividend divided by the three-month average stock price as of February 28, 2020.

The following is a summary of the transactions under the Company's stock option plan:

90 % term-matched historical volatility from daily stock prices and 10 % weighted average implied volatility from the 90 days preceding the grant date.

(4) Represents the quarterly dividend divided by the three-month average stock price as of July 9, 2021 and February 28, 2020, for 2022 and 2021, respectively.

The following is a summary of stock option activity during fiscal 2022:

Shares Under Option Weighted-Average Exercise Prices Aggregate Intrinsic Value

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Outstanding at May 29, 2021 1,673,372 $ 24.63 $ 38.8 8.6

Granted at market 1,409,792 $ 22.9

Granted 189,179 45.71

Exercised ( 116,178 ) 26.91

1 unchanged sentence

Outstanding at May 28, 2022 1,716,593 26.83 10.4 7.69

Ending vested + expected to vest 1,673,372 $ 24.63 $ 38.8 8.56

Exercisable at end of period 624,606 $ 26.80 $ 3.4 6.90

4 unchanged sentences

Restricted Stock Units

The Company grants restricted stock units to certain key employees under its LTIP.

This program provides that the actual number of restricted stock units awarded is based on the value of a portion of the participant's long-term incentive compensation divided by the fair value of the Company's stock on the date of grant.

The awards generally cliff-vest after a three-year service period, with prorated vesting under certain circumstances and full or partial accelerated vesting upon retirement.

Awards granted in fiscal 2021 had a graded vesting schedule of 25 % after the first year, 25 % after the second year, and the remaining 50 % after the third year.

Each restricted stock unit represents one equivalent share of the Company's common stock to be awarded, free of restrictions, after the vesting period.

Compensation expense related to these awards is recognized over the requisite service period, which includes any

Herman Miller, Inc.

and Subsidiaries 76

applicable performance period.

Dividend equivalent awards are credited quarterly.

The units do not entitle participants to the rights of stockholders of common stock, such as voting rights, until shares are issued after vesting.

77 2021 Annual Report

The following is a summary of restricted stock unit transactions for the fiscal years indicated:

The Company grants time-based restricted stock units to certain key employees under its LTIP.

Currently outstanding awards generally cliff-vest or vest ratably over a three-year service period.

Prorated vesting occurs under certain circumstances and full or partial accelerated vesting occurs upon retirement.

Awards granted in fiscal 2022 had a graded vesting schedule of 25 %, 25 %, and 50 % after the first, second, and third year, respectively.

Each restricted stock unit represents one equivalent share of the Company's common stock to be issued, free of restrictions, after the vesting period.

Compensation expense is based on the grant-date fair value and recognized on a straight-line basis over the requisite service period.

Dividend reinvestment units are credited on the dividend payable date and vest with the underlying shares.

The units do not entitle participants to the rights of holders of common stock, such as voting rights, until shares are issued after vesting.

In conjunction with the acquisition of Knoll, Inc.

on July 19, 2021, outstanding restricted stock unit awards previously granted under a Knoll stock compensation plan were automatically converted into MillerKnoll awards at the identified equity award exchange ratio, with each converted unit representing one equivalent share of the Company's common stock to be issued, free

of restrictions, after the vesting period.

The awards generally cliff-vest after a three-year service period from the original date of grant.

The converted units do not entitle participants to the rights of holders of common stock, such as voting rights, until shares are issued after vesting.

Restricted stock units awarded under a Knoll stock compensation plan are entitled to dividend rights, and dividend equivalents are accrued on the dividend record date.

Upon vesting of the underlying shares, accrued dividend equivalents are paid in cash.

The following is a summary of restricted stock unit activity during fiscal 2022:

Weighted Average

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Outstanding at May 28, 2022 576,382 $ 37.33 $ 17.8 1.1

Ending vested + expected to vest 484,011 $ 30.84 $ 23.1 1.4

The weighted-average remaining recognition period of the outstanding restricted stock units at May 28, 2022, was 1.3 years.

The fair value of the share units that vested during the twelve months ended May 29, 2021, was $ 1.5 million.

The total market value of the units that vested during the twelve months ended May 28, 2022, was $ 19.9 million.

This includes $ 11.8 million of shares from converted Knoll awards for which, due to change-of-control provisions, vesting was accelerated.

In addition, $$ 0.3 million in accrued cash dividends were paid upon vesting the underlying shares of converted Knoll awards.

The weighted-average grant-date fair value of restricted stock units granted during 2022, 2021, and 2020 was $ 44.25 , $ 26.71 and $ 44.70 , respectively.

Performance Share Units

The Company grants performance share units to certain key employees under its LTIP.

The number of units initially awarded was based on the value of a portion of the participant's long-term incentive compensation, divided by the fair value of the Company's common stock on the date of grant.

Each unit represents one equivalent share of the Company's common stock.

The number of common shares ultimately issued in connection with these performance share units is determined based on the Company's financial performance over the related three-year service period or the Company's financial performance based on certain total shareholder return results as compared to a selected group of peer companies.

Compensation expense is determined based on the grant-date fair value and the number of common shares projected to be issued and is recognized over the requisite service period.

The following is a summary of performance share unit transactions for the fiscal years indicated:

The intrinsic value presented above includes $ 0.1 million in accrued cash dividends on the underlying shares of outstanding converted Knoll restricted stock unit awards.

Performance Stock Units

The Company grants performance-based restricted stock units, commonly referred to as performance stock units to certain key employees under its LTIP that vest subject to the satisfaction of pre-established financial and non-financial metrics.

Each performance stock unit represents one equivalent share of the Company's common stock.

The number of shares of Company common stock ultimately issued in connection with these performance stock units will be determined based on attainment of the pre-established metrics over a defined three-year service period.

For members of the executive leadership team, this calculation is adjusted by a relative total shareholder return modifier.

Compensation expense is recognized over the requisite service period on a straight-line basis and based on the grant-date fair value.

For certain awards incorporating a market condition, grant-date fair value is determined using a Monte Carlo simulation.

For each tranche, fair value is determined on the date performance metrics are approved.

Performance stock units awarded under the LTIP do not have dividend rights.

In conjunction with the acquisition of Knoll, Inc.

on July 19, 2021, outstanding performance stock unit awards previously granted under a Knoll stock compensation plan were automatically converted into MillerKnoll awards with each converted unit representing one equivalent share of the Company's common stock.

The number of common shares ultimately issued in connection with these performance stock units will be determined based on the attainment of a pre-established financial metric over a five-year service period ending December 31, 2023.

The converted units do not entitle participants to the rights of holders of common stock, such as voting rights, until shares are issued after vesting.

Performance stock units awarded under Knoll stock compensation plans are entitled to dividend rights, and dividend equivalents are accrued on the dividend record date.

Upon vesting of the underlying shares, accrued dividend equivalents are paid in cash.

The following is a summary of performance stock unit activity during fiscal 2022:

Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value (in millions) Weighted-Average Remaining Contractual Term (Years)

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Outstanding at May 28, 2022 364,087 $ 42.75 $ 11.3 0.9

Ending vested + expected to vest 368,059 $ 41.54 $ 17.6 1.1

The weighted-average remaining recognition period of the outstanding performance share units at May 29, 2021, was 1.3 years.

The fair value for shares that vested during the twelve months ended May 29, 2021, was 1.1 million.

The weighted average grant-date fair value of performance share units granted during 2021, 2020, and 2019 was $ 37.21 , $ 45.71 , and $ 36.37 respectively.

Deferred Compensation Plan

The Herman Miller, Inc.

Executive Equalization Retirement Plan is a supplemental deferred compensation plan and was made available for salary deferrals and Company contributions beginning in January 2008.

The plan is available to a select group of management or highly compensated employees who are selected for participation by the Executive Compensation Committee of the Board of Directors.

The plan allows participants to defer up to 50 percent of their base salary and up to 100 percent of their incentive cash bonus.

The weighted-average remaining recognition period of the outstanding performance stock units at May 28, 2022, was 0.75 years.

The total market value for shares that vested during the twelve months ended May 28, 2022, was 1.0 million.

weighted-average grant-date fair value of performance stock units granted during fiscal 2022, 2021, and 2020 was $ 43.06 , $ 37.21 , and $ 45.71 , respectively.

The intrinsic value presented above includes $ 0.1 million in accrued cash dividends on the underlying shares of outstanding converted Knoll performance stock unit awards.

Restricted Stock Awards

In conjunction with the acquisition of Knoll, Inc.

on July 19, 2021, outstanding restricted stock awards previously granted under a Knoll stock compensation plan were automatically converted into MillerKnoll awards at the identified equity award exchange ratio with each converted unit then representing one equivalent share of the Company's common stock to be issued, free of restrictions, after the vesting period.

The awards generally cliff-vest after a three-year service period from the original date of grant.

The restricted stock awards do not entitle the employee to rights of holders of common stock, such as voting rights, until restrictions are released after vesting.

The Company recognizes the related compensation expense on a straight-line basis over the requisite service period.

Restricted stock awards granted under Knoll's stock compensation plans are entitled to dividend rights, and dividend equivalents are accrued on the dividend record date.

Upon vesting of the underlying shares, accrued dividend equivalents are paid in cash.

The following is a summary of restricted stock activity during fiscal 2022:

Share Units Weighted-Average Grant-Date Fair Value

Outstanding at May 29, 2021 — $ —

Granted 751,907 44.36

Forfeited ( 140,455 ) 44.36

Released ( 391,463 ) 44.36

Outstanding at May 28, 2022 219,989 $ 44.36

The weighted-average remaining recognition period of the outstanding restricted stock award shares at May 28, 2022 was 1.1 years.

The total market value for shares that vested during the twelve months ended May 28, 2022, was $ 16.3 million.

This includes $ 13.3 million of converted Knoll awards for which, due to change-in-control provisions, vesting was accelerated.

In addition, $ 0.3 million in accrued cash dividends were paid upon vesting the underlying shares of converted Knoll awards.

The weighted-average grant-date fair value of restricted stock awards granted during fiscal 2022 was $ 44.36 per share.

There were no restricted stock awards granted in fiscal 2021 or fiscal 2020.

Accrued cash dividends on the underlying shares reported above for outstanding converted Knoll restricted stock awards total $ 0.4 million.

Executive Deferred Compensation Plan

The MillerKnoll, Inc.

Executive Equalization Retirement Plan, as amended (the "Executive Equalization Plan"), is a supplemental deferred compensation plan that was made available for salary deferrals and Company contributions beginning in January 2008.

The plan is available to a select group of management or highly compensated employees who are selected for participation by the Compensation Committee of the Board of Directors.

The plan allows participants to defer up to 50 % of their base salary and up to 100 % of their incentive cash bonus.

Company contributions to the plan “mirror” the amounts the Company would have contributed to the various qualified retirement plans had the employee's compensation not been above the IRS statutory ceiling ($ 305,000 in 2022).

The Company does not guarantee a rate of return for these funds.

Instead, participants make investment elections for their deferrals and Company contributions.

Investment options are closely aligned to those available under the Herman Miller Profit Sharing and 401(k) Plan.

Herman Miller, Inc.

and Subsidiaries 78

The Nonemployee Officer and Director Deferred Compensation Plan allows the Board of Directors of the Company to defer a portion of their annual director fee.

Investment options are the same as those available under the Herman Miller Profit Sharing and 401(k) Plan, including Company stock.

In accordance with the terms of the Executive Equalization Plan and Nonemployee Officer and Director Deferred Compensation Plan, the salary and bonus deferrals, Company contributions and director fee deferrals have been placed in a Rabbi trust.

The Company does not guarantee a rate of return for amounts deferred pursuant to this plan.

Instead, participants make investment elections for their deferrals and Company contributions which are subject to market conditions.

Investment options are closely aligned to those available under the MillerKnoll Retirement Plan, except for the Company stock fund.

Beginning in fiscal 2021, the Company stock fund was removed as an investment choice in the Executive Equalization Plan.

At November 27, 2021, the Executive Equalization Plan's Company stock fund balance was zero.

In accordance with the terms of the Executive Equalization Plan and the Director Plan described below, participant deferrals and Company contributions have been placed in a Rabbi trust.

The assets in the Rabbi trust remain subject to the claims of creditors of the Company and are not the property of the participant.

Investments in securities other than the Company's common stock are included within the Other assets line item, while investments in the Company's stock are included in the line item Deferred compensation plan in the Company's Consolidated Balance Sheets.

Investments in securities other than the Company's common stock are included within the Other assets line item, while the remaining investments in the Company's stock are included in the line item Deferred compensation plan in the Company's Consolidated Balance Sheets.

A liability of the same amount is recorded on the Consolidated Balance Sheets within the Other liabilities line item.

Investment asset realized and unrealized gains and losses are recognized within the Company's Consolidated Statements of Comprehensive Income in the Interest and other investment income line item.

The associated changes to the liability are recorded as compensation expense within the Selling, general and administrative line item within the Company's Consolidated Statements of Comprehensive Income.

Realized and unrealized gains and losses for investment assets other than Company common stock are recognized within the Company's Consolidated Statements of Comprehensive Income in the Interest and other investment income line item.

The associated changes to the liability are recorded as compensation expense within the Selling, general and administrative line item within the Company's Consolidated

Statements of Comprehensive Income.

The net effect of any change to the asset and corresponding liability is offset and has no impact on net earnings in the Consolidated Statements of Comprehensive Income.

Director Fees

Company directors may elect to receive their director fees in one or more of the following forms:

cash, deferred compensation in the form of shares or other selected investment funds, unrestricted Company stock at the market value at the date of election or stock options that vest in one year and expire in 10 years.

The exercise price of the stock options granted may not be less than the market price of the Company's common stock on the date of grant.

Under the plan, the Board members received the following shares or options in the fiscal years indicated:

Director Fees and Director Deferred Compensation Plan

The Company's non-employee directors may elect to receive their director fees in one or more of the following forms:

cash, deferred cash, unrestricted Company shares at the market value at the date of grant, stock options, or shares of common stock to be received on a deferred basis, as described below.

Stock options granted as director compensation vest in 1 year, expire in 10 years, and have an exercise price equal to the fair market value of the Company's common stock on the date of grant.

Beginning in January 2022, not less than 50 % of annual director fees must be paid in the form of Company equity.

The Amended and Restated MillerKnoll, Inc, Director Deferred Compensation Plan (the "Director Plan") allows non-employee directors of the Company to defer all or a portion of their annual director fees in either a deferred cash account or, beginning in January 2022, a deferred stock account.

In the deferred cash account, investment options are the same as those available under the MillerKnoll Retirement Plan, except for the Company stock fund.

At the time(s) specified by the director for receipt of this deferred compensation, these deferred amounts will be paid to the director in cash.

In the deferred stock account, deferred stock units are credited to the director with each unit representing one equivalent share of the Company's common stock to be issued after the deferral period.

The deferred stock units are valued at the market price of the Company's common stock on the date of grant, and the value of the units credited are expensed on the date of grant.

Each time a dividend is paid on the Company's common stock, the director is credited with dividend equivalent units.

At the time(s) specified by the director for receipt of this deferred compensation, these deferred amounts will be paid to the director in shares of the Company's common stock.

The units do not entitle the directors to the rights of holders of common stock, such as voting rights, until shares are issued.

During fiscal year 2022, 15,664 deferred stock units were credited to directors pursuant to the Director Plan with a weighted-average grant date fair value of $ 37.34 per share.

The total fair value of deferred stock units issued during fiscal year 2022 was $ 0.6 million.

At May 28, 2022, there were 15,664 deferred stock units outstanding, all of which are vested, with an aggregate intrinsic value of $ 0.5 million.

All amounts deferred by directors pursuant to the Director Plan are fully vested and nonforfeitable.

The following amounts and types of Company equity were issued to non-employee directors during the fiscal years indicated:

2022 2021 2020

Shares of common stock 23,255 3,013 7,769

Shares through the deferred compensation program — 1,045 7,619

Shares through the prior deferred compensation program — — 1,045

Deferred stock units pursuant to the Director Plan 15,664 — —

Stock options — — —

The components of (loss) earnings before income taxes are as follows:

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The following table represents a reconciliation of income taxes at the United States statutory rate of 21 % with the effective tax rate as follows:

79 2021 Annual Report

(In millions) 2022 2021 2020

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Gain on consolidation of equity method investments — — ( 5.5 )

tax liability on undistributed foreign earnings due to the Tax Act — — ( 2.6 )

Non-deductible officers' compensation 5.3 0.5 —

Foreign-derived intangible income — ( 2.1 ) ( 1.4 )

Foreign-based company income 3.1 2.1 —

Global intangible low-taxed income 15.2 7.9 5.9

4 unchanged sentences

Foreign withholding taxes and other miscellaneous foreign taxes 2.4 1.0 2.7

Change in valuation allowance against deferred tax assets 0.4 ( 2.1 ) 0.4

Other, net 0.7 ( 0.9 ) ( 0.6 )

1 unchanged sentence

Effective tax rate ( 130.1 ) % 21.2 % ( 47.5 ) %

Herman Miller, Inc.

and Subsidiaries 80

The tax effects and types of temporary differences that give rise to significant components of the deferred tax assets and liabilities at May 28, 2022 and May 29, 2021, are as follows:

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Intangible assets 206.8 46.5

Interest rate swap 8.0 —

Inventory related — 0.4

Right of use lease assets 100.5 49.1

Withholding taxes on planned repatriation of foreign earnings 8.3 0.7

Other 2.8 2.9

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To the extent that available evidence about the future raises doubt about the realization of these tax benefits, a valuation allowance is established.

At May 29, 2021, the Company had state and local tax NOL carry-forwards of $ 19.7 million, the state tax benefit of which is $ 1.1 million, which have various expiration periods from 1 to 21 years.

At May 28, 2022, the Company had state and local tax NOL carry-forwards of $ 104.0 million, the state tax benefit of which is $ 6.8 million, which have expiration periods from 1 year to an unlimited term.

The Company also had state credits with a state tax benefit of $ 0.4 million, which expire in 3 to 5 years.

For financial statement purposes, the NOL carry-forwards and state tax credits have been recognized as deferred tax assets, subject to a valuation allowance of $ 0.8 million.

At May 29, 2021, the Company had federal NOL carry-forwards of $ 5.2 million, the tax benefit of which is $ 1.1 million, which expire in 8 years.

At May 28, 2022, the Company had federal NOL carry-forwards of $ 17.2 million, the tax benefit of which is $ 3.6 million, which have expiration periods from 7 years to an unlimited term.

For financial statement purposes, the NOL carry-forwards have been recognized as deferred tax assets.

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At May 28, 2022, the Company had foreign net operating loss carry-forwards of $ 51.9 million, the tax benefit of which is $ 13.3 million, which have expiration periods from 6 years to an unlimited term.

The Company also had foreign tax credits with a tax benefit of $0.3 million which will expire in 11 years.

The Company also had foreign tax credits with a tax benefit of $ 2.6 million which have expiration periods from 9 to 11 years.

For financial statement purposes, the NOL carry-forwards and foreign tax credits have been recognized as deferred tax assets, subject to a valuation allowance of $ 10.1 million.

81 2021 Annual Report

At May 29, 2021, the Company had foreign deferred assets of $ 4.0 million, the tax benefit of which is $ 0.7 million, which is related to various deferred taxes in Hong Kong as well as buildings in the United Kingdom.

At May 28, 2022, the Company had foreign deferred assets of $ 2.3 million, the tax benefit of which is $ 0.6 million, which is related to various deferred taxes in Canada and Ireland as well as buildings in the United Kingdom.

For financial statement purposes, the assets have been recognized as deferred tax assets, subject to a valuation allowance of $ 0.6 million.

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(In millions)

Balance at June 1, 2019 $ 1.9

Balance at May 30, 2020 $ 1.9

Increases related to current year income tax positions 0.1

Decreases related to prior year income tax positions ( 0.1 )

Increases related to prior year income tax positions 0.4

Decreases related to lapse of applicable statute of limitations ( 0.3 )

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Interest and penalties and the related liability, which are excluded from the table above, were as follows for the periods indicated:

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

Interest and penalty expense (income) $ 0.1 $ 0.1 $ ( 0.3 )

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Interest and penalty expense $ — $ 0.1 $ 0.1

Liability for interest and penalties $ 0.9 $ 0.9 $ 0.8

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It is not expected that any of the changes will be material to the Company's Consolidated Statements of Comprehensive Income.

During the year, the returns for fiscal years 2018 through 2020 have been fully accepted by the Internal Revenue Service under the Compliance Assurance Process (CAP) and the Company is awaiting final closing documentation.

During the year, the return for fiscal year 2021 has been fully accepted by the Internal Revenue Service under the Compliance Assurance Process (CAP) and the Company is awaiting final closing documentation.

For the majority of the remaining tax jurisdictions, the Company is no longer subject to state and local, or non-U.S.

income tax examinations by tax authorities for fiscal years before 2019.

Herman Miller, Inc.

and Subsidiaries 82

The Company's financial instruments consist of cash equivalents, marketable securities, accounts and notes receivable, deferred compensation plan, accounts payable, debt, interest rate swaps, foreign currency exchange contracts, redeemable noncontrolling interests, indefinite-lived intangible assets and right of use assets.

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The following describes the methods the Company uses to estimate the fair value of financial assets and liabilities recorded in net earnings, which have not significantly changed in the current period:

Cash and cash equivalents — The Company invests excess cash in short term investments in the form of commercial paper and money market funds.

Commercial paper is valued at amortized costs while money market funds are valued using net asset value ("NAV").

Cash and cash equivalents — The Company invests excess cash in short term investments in the form of money market funds, which are valued using net asset value ("NAV").

Mutual Funds-equity — The Company's equity securities primarily include equity mutual funds.

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Total $ — $ 1.0 $ — $ 0.1

In connection with the acquisition of Knoll, the Company acquired a contingent obligation related to Knoll's acquisition of Fully.

During the third quarter of 2022 the Company paid the $ 10.0 million obligation in full.

The following describes the methods the Company uses to estimate the fair value of financial assets and liabilities recorded in other comprehensive income, which have not significantly changed in the current period:

83 2021 Annual Report

Mutual funds-fixed income — The Company's fixed-income securities primarily include fixed income mutual funds and government obligations.

4 unchanged sentences

(In millions) May 28, 2022 May 29, 2021

Financial Assets Quoted Prices with Other Observable Inputs (Level 2) Quoted Prices with Other Observable Inputs (Level 2)

Mutual funds - fixed income $ 6.9 $ 6.3

Interest rate swap agreement — —

Financial Assets Balance Sheet Location Quoted Prices with Other Observable Inputs (Level 2) Quoted Prices with Other Observable Inputs (Level 2)

Mutual funds - fixed income Short-term investments $ — $ 6.9

Interest rate swap agreement Other noncurrent assets 31.9 —

Total $ 31.9 $ 6.9

Financial Liabilities

Interest rate swap agreement $ 14.4 $ 25.0

Interest rate swap agreement Other liabilities $ — $ 14.4

Total $ — $ 14.4

The following is a summary of the carrying and market values of the Company's fixed income mutual funds and equity mutual funds as of the dates indicated:

May 29, 2021 May 30, 2020

(In millions) Cost Unrealized Gain/(Loss) Market Value Cost Unrealized Gain/(Loss) Market Value

During the third quarter of 2022, the fixed income mutual funds and equity mutual funds were dissolved and converted to cash.

The following is a summary of the carrying and market values of the Company's fixed income mutual funds and equity mutual funds as of May 29, 2021:

(In millions) Cost Unrealized Gain/(Loss) Market Value

Mutual funds - fixed income $ 6.9 $ — $ 6.9

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realized gains and losses resulting from such sales are included in the Consolidated Statements of Comprehensive Income within Other (income) expense, net.

The Company views its equity and fixed income mutual funds as available for use in its current operations.

Accordingly, the investments are recorded within Current Assets within the Consolidated Balance Sheets.

The cost of securities sold is based on the specific identification method;

realized gains and losses resulting from such sales are included in the Consolidated Statements of Comprehensive Income within Other expense (income), net.

The Company reviews its investment portfolio for any unrealized losses that would be deemed other-than-temporary and requires the recognition of an impairment loss in earnings.

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The Company transacts business in various foreign currencies and has established a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures.

Under this program, the Company's strategy is to have increases or decreases in our foreign currency exposures offset by gains or losses on the foreign currency forward contracts to mitigate the risks and volatility associated with foreign

Herman Miller, Inc.

and Subsidiaries 84

currency transaction gains or losses.

These foreign currency exposures typically arise from net liability or asset exposures in non-functional currencies on the balance sheets of our foreign subsidiaries.

These foreign currency exposures typically arise from net liability or asset exposures in non-functional currencies on the

balance sheets of our foreign subsidiaries.

These foreign currency forward contracts generally settle within 30 days and are not used for trading purposes.

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The balance sheet classification for the fair values of these forward contracts is to Other current assets for unrealized gains and to Other accrued liabilities for unrealized losses.

The Consolidated Statements of Comprehensive Income classification for the fair values of these forward contracts is to "Other (income) expense, net", for both realized and unrealized gains and losses.

The Consolidated Statements of Comprehensive Income classification for the fair values of these forward contracts is to Other expense (income), net, for both realized and unrealized gains and losses.

The notional amounts of the forward contracts held to purchase and sell U.S.

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The differential paid or received on the interest rate swap agreements is recognized as an adjustment to interest expense.

The interest rate swaps were designated cash flow hedges at inception and the facts and circumstances of the hedged relationship remains consistent with the initial quantitative effectiveness assessment in that the hedged instruments remain an effective accounting hedge as of May 29, 2021.

Since a designated derivative meets hedge accounting criteria, the fair value of the hedge is recorded in the Consolidated Statements of Stockholders’ Equity as a component of Accumulated other comprehensive loss, net of tax.

The ineffective portion of the change in fair value of the derivatives is immediately recognized in earnings.

The interest rate swap agreements are assessed for hedge effectiveness on a quarterly basis.

In September 2016, the Company entered into an interest rate swap agreement.

The interest rate swap is for an aggregate notional amount of $ 150.0 million with a forward start date of January 3, 2018 and a termination date of January 3, 2028.

As a result of the transaction, the Company effectively converted indebtedness anticipated to be borrowed on the Company’s revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 1.949 percent fixed interest rate plus applicable margin under the agreement as of the forward start date.

As a result of the transaction, the Company effectively converted indebtedness anticipated to be borrowed on the Company’s revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 1.949 % fixed interest rate plus applicable margin under the agreement as of the forward start date.

See Note 6 for information on the replacement of LIBOR with SOFR in our credit agreement.

In June 2017, the Company entered into an additional interest rate swap agreement.

The interest rate swap is for an aggregate notional amount of $ 75.0 million with a forward start date of January 3, 2018 and a termination date of January 3, 2028.

As a result of the transaction, the Company effectively converted the Company’s revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 2.387 percent fixed interest rate plus applicable margin under the agreement as of the forward start date.

The fair value of the Company’s two outstanding interest rate swap agreements was a net liability of $ 14.4 million and $ 25.0 million as of May 29, 2021 and May 30, 2020, respectively.

The liability and asset fair value were recorded within "Other liabilities" and "Other noncurrent assets" within the Consolidated Balance Sheets.

Recorded within Other comprehensive loss, net of tax, for the effective portion of the Company's designated cash flow hedges was a net unrealized loss of $ 12.6 million and $ 17.2 million for the fiscal years ended May 29, 2021 and May 30, 2020, respectively.

As a result of the transaction, the Company effectively converted the Company’s revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 2.387 % fixed interest rate plus applicable margin under the agreement as of the forward start date.

In January 2022, the Company entered into a third interest rate swap agreement.

The interest rate swap is for an aggregate notional amount of $ 575 million with a forward start date of January 31, 2022 and a maturity date of January 29, 2027.

The interest rate swap locked in the Company’s interest rate on the forecasted outstanding borrowings of $ 575 million at 1.689 % exclusive of the credit spread on the variable rate debt.

The Company effectively will convert LIBOR-based floating interest rate plus applicable margin indebtedness to a 1.689 % fixed interest rate plus applicable margin under the agreement as of the forward start date.

The ineffective portion of the change in fair value of the derivatives is immediately recognized in earnings.

The interest rate swap agreements are assessed for hedge effectiveness on a quarterly basis.

(In millions) Notional Amount Forward Start Date Termination Date Effective Fixed Interest Rate

September 2016 Interest Rate Swap $ 150.0 January 3, 2018 January 3, 2028 1.949 %

June 2017 Interest Rate Swap $ 75.0 January 3, 2018 January 3, 2028 2.387 %

January 2022 Interest Rate Swap $ 575.0 January 31, 2022 January 29, 2027 1.689 %

The swaps above effectively converted indebtedness anticipated to be borrowed on the Company's revolving line of credit up to the notional amounts from a LIBOR-based floating interest rate plus applicable margins to an effective fixed rate plus applicable margin under the agreements as of the forward start date.

For fiscal 2022, 2021 and 2020, there were no gains or losses recognized against earnings for hedge ineffectiveness.

85 2021 Annual Report

Effects of Derivatives on the Financial Statements

The effects of derivatives on the consolidated financial statements were as follows for the fiscal years ended 2021 and 2020 (amounts presented exclude any income tax effects):

The effects of non-designated derivatives on the consolidated financial statements were as follows for the fiscal years ended 2022 and 2021 (amounts presented exclude any income tax effects ):

(In millions) Balance Sheet Location May 28, 2022 May 29, 2021

Designated derivatives:

Interest rate swap Long-term assets:

Other noncurrent assets $ — $ —

Interest rate swap Long-term liabilities:

Other liabilities $ 14.4 $ 25.0

Non-designated derivatives:

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Other accrued liabilities $ 1.0 $ 0.1

(In millions) Statement of Comprehensive Income Location May 29, 2021 May 30, 2020 June 1, 2019

(1) Designated derivative and their balance sheet locations are located in above table within financial assets and liabilities measured at fair value.

(In millions) Statement of Comprehensive Income Location May 28, 2022 May 29, 2021 May 30, 2020

(Loss) gain recognized on foreign currency forward contracts Other expense (income), net $ 3.3 $ 0.8 $ ( 1.1 )

The gain/(loss) recorded, net of income taxes, in Other comprehensive loss for the effective portion of designated derivatives was as follows for the periods presented below:

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Interest rate swap $ 41.4 $ 12.6 $ ( 17.2 )

Reclassified from Accumulated other comprehensive loss into earnings within "Interest expense" for the fiscal years ended 2021, 2020, and 2019 were gains of $ 4.5 million and $ 0.8 million and a loss of $ 0.5 million, respectively.

Reclassified from Accumulated other comprehensive loss into earnings within Interest expense for the fiscal years ended 2022, 2021, and 2020 were gains of $ 6.9 million and $ 4.5 million and of $ 0.8 million, respectively.

Pre-tax gains expected to be reclassified from Accumulated other comprehensive loss into earnings during the next twelve months are $ 4.6 million.

The amount of gain, net of tax, expected to be reclassified out of Accumulated other comprehensive loss into earnings during the next twelve months is $ 3.5 million.

Investments in Equity Securities Without a Readily Determinable Fair Value

In the fourth quarter of fiscal 2019, the Company recorded a gain from a $ 2.1 million fair value adjustment in an investment in a technology partner, which increased the total carrying value of the investment to $ 3.6 million as of June 1, 2020.

The gain was the result of an observable price change for a similar investment in the same entity.

There were no similar gains in fiscal 2020 or 2021.

Redeemable Noncontrolling Interests

Redeemable noncontrolling interests are reported on the Condensed Consolidated Balance Sheets in mezzanine equity in “Redeemable noncontrolling interests.” These financial instruments represent a level 3 fair value measurement.

As of June 1, 2019, the outstanding redeemable noncontrolling interests in the Company's subsidiary, Herman Miller Consumer Holdings, Inc.

("HMCH") were $ 20.6 million, and represented an approximate 5 % minority ownership.

During August 2019, the Company acquired all of the remaining redeemable noncontrolling equity interests.

HMCH redeemed certain HMCH stock for cash and then, in August 2019, HMCH merged with and into the Company, with the remaining minority HMCH shareholders receiving a cash payment.

Total cash paid of $ 20.4 million for the redemptions and for merger consideration was at fair market value based on an independent appraisal.

This compares to purchases of $ 10.1 million during the twelve month period ended June 1, 2019.

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and Subsidiaries 86

Changes in the Company's redeemable noncontrolling interest in HMCH for the years ended May 29, 2021 and May 30, 2020 are as follows:

(In millions) May 29, 2021 May 30, 2020

Beginning Balance $ — $ 20.6

Purchase of HMCH redeemable noncontrolling interests ( 20.4 )

Redemption value adjustment ( 0.2 )

Exercised options — —

Ending Balance $ — $ —

Redeemable noncontrolling interests are reported on the Consolidated Balance Sheets in mezzanine equity in Redeemable noncontrolling interests.

These financial instruments represent a level 3 fair value measurement.

On December 2, 2019, the Company purchased an additional 34 % equity voting interest in HAY.

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Indefinite-lived intangible assets $ 501.0

The relief-from-royalty method for the quantitative impairment assessment for indefinite-lived intangible assets utilized discount rates ranging from 12.0 % to 14.0 % and royalty rates ranging from 2.0 % to 3.0 %.

Based on the quantitative impairment assessment performed, the carrying value these assets exceeded their fair value, resulting in an impairment charge of $ 53.3 million in fiscal 2020.

See Note 1 and Note 7 to the Consolidated Financial Statements for additional information.

87 2021 Annual Report

Based on the quantitative impairment assessment performed in fiscal year 2020, the carrying value certain indefinite-lived intangible assets exceeded their fair value, resulting in an impairment charge of $ 53.3 million.

There were no impairment charges in fiscal 2021 or 2022.

See Note 1 to the Consolidated Financial Statements for additional information.

Commitments and Contingencies

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The Company provides coverage to the end-user for parts and labor on products sold under its warranty policy and for other product-related matters.

The standard length of warranty is 12 years;

however, this varies depending on the product classification.

The specific terms, conditions, and length of those warranties vary depending upon the product sold.

The Company does not sell or otherwise issue warranties or warranty extensions as stand-alone products.

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The Company provides an assurance-type warranty that ensures that products will function as intended.

In fiscal 2020, warranty reserves were classified as short-term liabilities.

The current and long-term portions of the warranty reserve are included within "Accrued warranty," and "Other liabilities," respectively, within the consolidated balance sheets.

The prior period consolidated balance sheet was reclassified in the current year to be consistent with this presentation.

As such, the Company's estimated warranty obligation is accounted for as a liability and is recorded within current and long-term liabilities within the Consolidated Balance Sheets.

Changes in the warranty reserve for the stated periods were as follows:

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Accrual Balance — beginning $ 60.1 $ 59.2 $ 53.1

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Settlements and adjustments ( 18.6 ) ( 11.9 ) ( 17.6 )

Acquired through business acquisition 15.1 — —

Accrual Balance — ending $ 73.2 $ 60.1 $ 59.2

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As of the end of fiscal 2022, outstanding commitments for future purchase obligations approximated $ 99.6 million.

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and Subsidiaries 88

Operating Segments

The Company's segments consist of North America Contract, International Contract and Retail.

The North America Contract segment includes the operations associated with the design, manufacture and sale of furniture and textile products for work-related settings, including office, healthcare, and educational environments, throughout the United States and Canada.

The business associated with the Company's owned contract furniture dealer is also included in the North America Contract segment.

In addition to the Herman Miller brand, this segment includes the operations associated with the design, manufacture and sale of high-craft furniture products and textiles including Geiger wood products, Maharam textiles, Nemschoff, and naughtone products.

The International Contract segment includes the operations associated with the design, manufacture, and sale of furniture products, primarily for work-related settings in Europe, the Middle East and Africa ("EMEA"), Latin America and Asia-Pacific.

The Retail segment includes operations associated with the sale of modern design furnishings and accessories to third party retailers, as well as direct to consumer sales through eCommerce, direct-mail catalogs, DWR studios and HAY stores.

Effective as of May 30, 2021, the beginning of fiscal year 2022, the Company implemented an organizational change that resulted in a change in the reportable segments.

The Company has restated historical results to reflect this change.

Below is a summary of the change in reportable segments.

• The activities related to the manufacture and sale of furniture products direct to consumers and to third-party retailers that previously resided within the International Contract segment moved to the Global Retail segment.

• The operations associated with the design, manufacture and sale of furniture products for work-related settings in Latin America moved from the International Contract segment to the North America Contract segment to form a new Americas Contract segment.

• Operations of the DWR Contract business, a division of DWR that sells design furnishings and accessories for use in work-related settings, moved into the Americas Contract segment.

The Company's reportable segments now consist of Americas Contract, International Contract, Global Retail, and Knoll.

Intersegment sales are eliminated within each segment, with the exception of sales to and from the Knoll segment, which are presented as intersegment eliminations.

Due to the change in reportable segments, the Company reviewed each of the new reporting units for impairment and concluded it to be more likely than not that their estimated fair values are greater than their respective carrying values.

The Americas Contract segment includes the operations associated with the design, manufacture and sale of furniture and textile products for work-related settings, including office, healthcare, and educational environments, throughout North America and South America.

In addition to the Herman Miller brand and the DWR Contract business, this segment includes the operations associated with the design, manufacture and sale of high-craft furniture products and textiles including Geiger wood products, Maharam textiles, Herman Miller Healthcare, naughtone and Herman Miller Collection products.

The International Contract segment includes the operations associated with the design, manufacture and sale of furniture products, primarily for work-related settings in Europe, the Middle East and Africa ("EMEA") and Asia-Pacific.

The Global Retail segment includes operations associated with the sale of modern design furnishings and accessories to third party retailers, as well as direct to consumer sales through eCommerce, direct-mail catalogs, DWR studios and HAY stores.

The Knoll segment includes the global operations associated with the design, manufacture, and sale of furniture products within the Knoll constellation of brands.

The Company also reports a “Corporate” category consisting primarily of unallocated expenses related to general corporate functions, including, but not limited to, certain legal, executive, corporate finance, information technology, administrative and acquisition-related costs.

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Below is a summary of the change:

• The activities related to the manufacture and sale of furniture products direct to consumers and to third-party retailers that currently reside within the International Contract segment will move to the Retail segment.

• The operations associated with the design, manufacture and sale of furniture products for work-related settings in Latin America will move to the North America Contract segment to form a new Americas Contract segment.

• Operations of the DWR Contract business, a division of DWR that sells design furnishings and accessories for use in work-related settings will move into the Americas Contract segment.

89 2021 Annual Report

• The reportable segments will now consist of three segments:

Americas Contract, International Contract & Specialty and Global Retail.

• The activities related to the manufacture and sale of furniture products direct to consumers and third-party retailers for the Knoll, Muuto and Fully brands that currently reside within the Knoll segment will move to the Global Retail segment.

• The activities related to the manufacture and sale of furniture products for work-related settings in the Americas for the Knoll, Muuto and Datesweiser brands that currently reside within the Knoll segment will move to the Americas Contract segment.

• The activities related to the manufacture and sale of furniture products for work-related settings in geographies other than the Americas for the Knoll and Muuto brands that currently reside within the Knoll segment will move to the International Contract & Specialty segment.

• The activities related to manufacture and sale of products for the Maharam brand will move from the Americas Contract segment to the International Contract & Specialty segment, along with the activities of the Holly Hunt, Spinneybeck, Knoll Textiles and Edelman brands, which currently reside within the Knoll segment.

The performance of the operating segments is evaluated by the Company's management using various financial measures.

The following is a summary of certain key financial measures for the years indicated:

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

North America Contract $ 1,194.0 $ 1,598.2 $ 1,686.5

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Americas Contract $ 1,444.9 $ 1,301.3 $ 1,744.3

International Contract 483.2 399.5 345.9

Retail 602.1 385.6 388.5

Global Retail 856.8 764.3 396.4

Knoll 1,188.5 — —

Intersegment Elimination ( 27.4 ) — —

Total $ 3,946.0 $ 2,465.1 $ 2,486.6

Depreciation and amortization:

North America Contract $ 53.5 $ 46.7 $ 46.8

Americas Contract $ 57.5 $ 56.4 $ 49.6

International Contract 13.2 11.2 10.4

Retail 11.6 14.7 14.1

Global Retail 16.7 19.6 18.8

Knoll 103.2 — —

Corporate — — 0.7

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Operating earnings (loss):

North America Contract $ 74.1 $ 130.9 $ 189.7

Americas Contract $ 44.5 $ 93.6 $ 162.6

International Contract 59.3 48.5 ( 0.4 )

Retail 117.2 ( 148.3 ) 5.3

Global Retail 96.2 143.0 ( 160.7 )

Knoll ( 57.6 ) — —

Corporate ( 102.6 ) ( 52.6 ) ( 39.4 )

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Capital expenditures:

North America Contract $ 44.9 $ 53.7 $ 52.7

International Contract 10.3 10.4 16.6

Retail 4.6 4.9 16.5

Corporate — — —

Total $ 59.8 $ 69.0 $ 85.8

Total Assets:

North America Contract $ 745.3 $ 769.5 $ 733.6

Americas Contract $ 43.3 $ 45.5 $ 55.2

International Contract 8.9 9.1 6.2

Retail 340.1 310.9 310.0

Corporate 404.1 461.0 168.9

Global Retail 19.5 5.2 7.6

Knoll 23.0 — —

Total $ 94.7 $ 59.8 $ 69.0

North America Contract $ 187.4 $ 182.3 $ 185.3

Americas Contract $ 191.7 $ 197.2 $ 191.5

International Contract 82.5 91.3 84.5

Retail — — 78.8

Corporate — — —

Global Retail 68.4 75.7 70.0

Knoll 883.6 — —

Total $ 1,226.2 $ 364.2 $ 346.0

Many of the Company's assets, including manufacturing, office and showroom facilities, support multiple segments.

For that reason, it is impractical to disclose asset information on a segment basis.

The accounting policies of the operating segments are the same as those of the Company.

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However, certain corporate costs, generally considered the result of isolated business decisions, are not subject to allocation and are evaluated separately from the rest of the regular ongoing business operations.

Herman Miller, Inc.

and Subsidiaries 90

The Company's product offerings consist primarily of office furniture systems, seating, freestanding furniture, storage and casegoods.

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The following is a summary of net sales estimated by product category for the years indicated:

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Workplace $ 1,484.4 $ 855.1 $ 1,135.8

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232.2 135.5 167.2

Restructuring ( 27.4 ) — —

Total $ 3,946.0 $ 2,465.1 $ 2,486.6

(1) “Other” primarily consists of uncategorized product sales and service sales.

In fiscal year 2022 certain products were reclassified primarily from the Performance Seating to the Lifestyle category, to align with a change in management’s internal reporting and management of the products.

Prior year periods have been restated to reflect these changes, for comparability.

Sales by geographic area are based on the location of the customer.

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Individual foreign country information is not provided as none of the individual foreign countries in which the Company operates are considered material for separate disclosure based on quantitative and qualitative considerations.

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

United States $ 2,818.4 $ 1,728.9 $ 1,795.8

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Total $ 676.1 $ 381.7 $ 366.3

The Company approximates that no single dealer accounted for more than three percent of the Company's net sales in the fiscal year ended May 29, 2021.

The Company approximates that no single dealer accounted for more than 2% of the Company's net sales in the fiscal year ended May 28, 2022.

The Company estimates that the largest single end-user customer accounted for $ 114.4 million, $ 113 million and $ 122.9 million of the Company's net sales in fiscal 2022, 2021 and 2020, respectively.

This represents approximately five percent of the Company's net sales in in each of fiscal 2021, 2020 and 2019.

The Company's ten largest customers in the aggregate accounted for approximately 17 percent of net sales in fiscal 2021 and 18 percent of net sales in fiscal 2020 and 2019.

Approximately 4 percent of the Company's employees are covered by collective bargaining agreements, most of whom are employees of its Nemschoff and Herman Miller Holdings Limited subsidiaries.

91 2021 Annual Report

This represents approximately 3 % of the Company's net sales in fiscal 2022 and 5 % in 2021 and 2020.

The Company's ten largest customers in the aggregate accounted for approximately 11 % of net sales in fiscal 2022 and 17 % of net sales in fiscal 2021 and 18 % of net sales in fiscal 2020.

Approximately 2 % of the Company's employees are covered by collective bargaining agreements.

Accumulated Other Comprehensive Loss

The following table provides an analysis of the changes in accumulated other comprehensive loss for the years indicated:

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

(In millions) May 28, 2022 May 29, 2021 May 30, 2020

Cumulative translation adjustments at beginning of period $ ( 3.9 ) $ ( 56.0 ) $ ( 48.3 )

Other comprehensive income (loss) 52.1 ( 7.7 ) ( 14.2 )

Other comprehensive (loss) income ( 90.0 ) 52.1 ( 7.7 )

Balance at end of period ( 93.9 ) ( 3.9 ) ( 56.0 )

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Reclassification from accumulated other comprehensive income - Other, net 4.4 5.5 3.3

Tax (expense) benefit ( 2.0 ) ( 0.6 ) ( 0.4 )

Tax expense ( 4.4 ) ( 2.0 ) ( 0.6 )

Net reclassifications — 3.5 2.7

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Interest rate swap agreement at beginning of period ( 10.8 ) ( 18.9 ) ( 0.9 )

Cumulative effect of accounting change — — 1.5

Other comprehensive income (loss) before reclassifications (net of tax of ($ 11.6 ), ($ 2.6 ), and $ 5.8 )

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Total Accumulated other comprehensive loss $ ( 107.1 ) $ ( 65.1 ) $ ( 134.0 )

Restructuring Expenses

Restructuring and Integration Expense

As part of restructuring and integration activities, the Company has incurred expenses that qualify as exit and disposal costs under U.S.

These include severance and employee benefit costs as well as other direct separation benefit costs.

Severance and employee benefit costs primarily relate to cash severance and non-cash severance, including accelerated equity award compensation expense.

The Company also incurs expenses that are an integral component of, and directly attribute to, its restructuring and integration activities, which do not qualify as exit and disposal costs under U.S.

These include integration implementation costs that relate primarily to professional fees and non-cash losses incurred on debt extinguishment.

The expense associated with integration initiatives are included in Selling, General, and Administrative and the expense associated with restructuring activities are included in Restructuring expense in the Consolidated Statements of Comprehensive Income.

Non-cash costs related to debt extinguishment in the financing of the transaction is recorded in Other expense (income), net in the Consolidated Statements of Comprehensive Income.

Knoll Integration:

Following the acquisition of Knoll, the Company announced a multi-year program (the "Knoll Integration") designed to reduce costs and integrate and optimize the combined organization.

The Company currently expects that the Knoll Integration will result in pre-tax costs of approximately $ 100 million to $ 120 million, comprised of the following categories:

• Severance and employee benefit costs associated with plans to integrate the Company's operating structure, resulting in workforce reductions.

These costs will primarily include:

severance and employee benefits (cash severance and non-cash severance, including accelerated stock-compensation award expense and other termination benefits).

• Exit and disposal activities include those incurred as a direct result of integration activities, primarily including contract and lease terminations and asset impairment charges.

• Other integration costs include professional fees and other incremental third-party expenses, including a loss on extinguishment of debt associated with financing of the acquisition.

For the year ended May 28, 2022, the Company incurred $ 107.9 million of costs related to the Knoll Integration including:

$ 51.1 million of severance and employee benefit costs, $ 15.5 million of non-cash asset impairments, $ 13.4 million of non-cash costs related to debt-extinguishment in the financing of the transaction, and $ 27.9 million of other integration costs.

The following table provides an analysis of the changes in liability balance for Knoll Integration costs that qualify as exit and disposal costs under U.S.

GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the fiscal year ended May 28, 2022:

(In millions) Severance and Employee Benefit Exit and Disposal Activities Total

May 29, 2021 $ — $ — $ —

Integration Costs 51.1 15.5 66.6

Amounts Paid ( 35.2 ) — ( 35.2 )

Non-cash costs ( 14.5 ) ( 15.5 ) ( 30.0 )

May 28, 2022 $ 1.4 $ — $ 1.4

The Company paid a substantial portion of the liability for the Knoll Integration in fiscal year 2022.

The following is a summary of integration expenses by segment for the period indicated:

Twelve Months Ended

(In millions) May 28, 2022 May 29, 2021

Americas Contract $ 5.1 $ —

International Contract 1.1 —

Corporate 40.9 —

Total $ 107.9 $ —

Restructuring Activities:

During the fourth quarter of fiscal 2018, the Company announced a facilities consolidation plan related to its International Contract segment.

This impacted certain office and manufacturing facilities in the United Kingdom and China.

The plan is expected to generate cost savings of approximately $ 3 million.

The Company recognized restructuring and impairment expenses of $ 5.9 million, with a net credit of $ 1.9 million reco gnized in fiscal 2021 and the remainder in fiscal 2020, 2019 and 2018.

This impacted certain office and manufacturing facilities in the United Kingdom and C hina.

The plan was expected to generate c ost savings of approximately $ 3 million.

To date, the Company recognized restructuring and impairment expenses of $ 5.9 million, with a net credit of $ 1.9 million recognized in fiscal 2021 and the remainder in fiscal 2020, 2019, and 2018.

These expenses related to the facilities consolidation plan, comprised primarily of an asset impairment recorded against an office building in the United Kingdom that was vacated and the consolidation of the Company's manufacturing facilities in China.

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T he office building and related assets in the United Kingdom were sold in the second quarter of fiscal 2021, resulting in a nominal gain.

Both of these gains are included within "Restructuring expense" in the Condensed Consolidated Statements of Comprehensive Income.

In the second quarter of fiscal 2020, the North America Contract segment initiated restructuring discussions with labor unions related to its Nemschoff operation in Wisconsin.

To date, the Company has recorded approximately $ 3.1 million

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and Subsidiaries 92

in pre-tax restructuring expense related to this plan, with a net credit of $ 0.1 million recognized in fiscal 2021 and the remainder in fiscal 2020.

These restructuring costs relate to potential partial outsourcing and in-sourcing strategies, long-lived asset impairments and employee-related costs.

Both of these gains are included within Restructuring expense in the Consolidated Statements of Comprehensive Income.

In the second quarter of fiscal 2020, the Americas Contract segment initiated restructuring discussions with labor unions related to its Healthcare operation in Wisconsin.

To date, the Company has recorded approximately $ 3.1 million in pre-tax restructuring expense related to this plan, with a net credit of $ 0.1 million recognized in fiscal 2021 and the remainder in fiscal 2020.

The plan is complete and no future costs related to this plan are expected.

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The reorganization is complete and no future costs related to this plan are expected.

In the third quarter of fiscal 2020, the Company announced a reorganization of the Retail segment's leadership team.

In the third quarter of fiscal 2020, the Company announced a reorganization of the Global Retail segment's leadership team.

The Company recognized pre-tax severance and employee related restructuring expense of $ 2.2 million related to the plan.

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(In millions) Severance and Employee-Related Exit or Disposal Activities Total

June 1, 2019 $ 6.8 $ 1.1 $ 7.9

May 30, 2020 $ 5.9 $ 0.8 $ 6.7

Restructuring Costs ( 1.7 ) ( 2.0 ) ( 3.7 )

Amounts Paid ( 3.3 ) ( 0.1 ) ( 3.4 )

Other* — 1.9 $ 1.9

May 29, 2021 $ 0.9 $ 0.6 $ 1.5

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Amounts Paid ( 0.5 ) — ( 0.5 )

Other* — 1.9 $ 1.9

May 28, 2022 $ 0.4 $ 0.6 $ 1.0

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To date, the Company incurred severance and related charges of $ 18.7 million with $ 3.4 million recognized in fiscal 2021 and the remainder in fiscal 2020.

No material future restructuring costs related to the plan are expected and the remaining amounts will be paid in fiscal 2022.

No material future restructuring costs related to the plan are expected.

The following table provides an analysis of the changes in the restructuring cost reserve for the May 2020 restructuring plan for the fiscal year ended May 28, 2022:

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Ending Balance $ 0.2

93 2021 Annual Report

During fiscal 2022, the Company incurred no restructuring costs separate from the Knoll Integration costs discussed above.

The following is a summary of restructuring expenses by segment for the fiscal years indicated:

(In millions) May 29, 2021 May 30, 2020 June 1, 2019

North America Contract $ 3.8 $ 18.7 $ 7.7

(In millions) May 28, 2022 May 29, 2021

America's Contract $ — $ 3.8

International Contract — ( 1.1 )

Retail — 2.9 —

Global Retail — —

Total $ — $ 2.7

Variable Interest Entities

The Company has long-term notes receivable with a third-party owned dealer that are deemed to be variable interests in variable interest entity.

The carrying value of these long-term notes receivable was $ 1.2 million and $ 1.5 million as of May 29, 2021 and May 30, 2020, respectively, and represents the Company’s maximum exposure to loss.

The Company is not deemed to be the primary beneficiary of the variable interest entity as the entity controls the activities that most significantly impact the entity’s economic performance, including sales, marketing, and operations.

During the year ended May 28, 2022, the Company entered into long-term notes receivable with certain of its third-party owned dealers that are deemed to be variable interests in variable interest entities.

The carrying value of these long-term notes receivable was $ 1.2 million as of May 28, 2022 and represents the Company’s maximum exposure to loss.

The Company is not deemed to be the primary beneficiary for any of these variable interest entities as each dealer controls the activities that most significantly impact the entity’s economic performance, including sales, marketing, and operations.

The Company previously held a long-term note receivable with a third-party dealer that was deemed to be a variable interest in a variable interest entity.

The carrying value of this long-term note receivable was $ 1.2 million as of May 29, 2021 and was paid in full during the quarter ended August 28, 2021.

Quarterly Financial Data (Unaudited)

Set forth below is a summary of the quarterly operating results on a consolidated basis for the years ended May 29, 2021, May 30, 2020, and June 1, 2019.

(In millions, except per share data) First

Set forth below is a summary of the quarterly operating results on a consolidated basis for the years ended May 28, 2022, May 29, 2021, and May 30, 2020.

(In millions, except per share data) (1)

2022 Net sales $ 789.7 $ 1,026.3 $ 1,029.5 $ 1,100.5

Gross margin 277.7 353.0 339.5 382.5

Net earnings attributable to Herman Miller, Inc.

Net earnings attributable to MillerKnoll, Inc.

( 61.3 ) ( 1.7 ) 14.4 21.5

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Gross margin 249.8 244.4 230.8 226.1

Net earnings attributable to Herman Miller, Inc.

Net earnings attributable to MillerKnoll, Inc.

72.8 51.4 41.5 8.9

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Gross margin 246.2 255.7 243.5 165.9

Net earnings attributable to Herman Miller, Inc.

Net earnings attributable to MillerKnoll, Inc.

48.3 78.7 37.9 ( 173.6 )

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Earnings per share-diluted 0.81 1.32 0.64 ( 2.94 )

(1) Effective May 30, 2021, we elected to change our method of accounting for the cost of certain inventories within our Americas Segment from the last-in, first-out method ("LIFO") to first-in, first-out method ("FIFO"), which were our only operations that were using the LIFO cost method.

All prior periods presented have been retrospectively adjusted to apply the effects of the change.

(2) For some line items, the sum of the quarters does not equal the annual balance reflected in the Consolidated Statements of Comprehensive Income due to rounding associated with the calculations on an individual quarter basis.

Herman Miller, Inc.

and Subsidiaries 94

Subsequent Event

Acquisition of Knoll

In April, we announced that we entered into a definitive agreement with Knoll, under which Herman Miller will acquire Knoll in a cash and stock transaction valued at $ 1.8 billion.

On July 13, 2021, the Herman Miller shareholders and Knoll stockholders approved the proposals necessary to complete the previously announced merger of Herman Miller and Knoll and the merger closed on July 19, 2021.

In connection with our acquisition of Knoll, in July, 2021, the Company entered into a syndicated revolving line of credit that provides the Company with up to $ 725 million in revolving variable interest borrowing capacity that matures in July, 2026, replacing our previous $ 500 million syndicated revolving line of credit.

The Company also entered into a debt commitment letter for a five-year senior secured term loan "A" facility in an aggregate principal amount of $ 400 million and a seven-year senior secured term loan "B" facility in an aggregate principal amount of $ 625 million, the proceeds of which were used to finance a portion of the cash consideration for the acquisition of Knoll, for the repayment of certain debt of Knoll and to pay fees, costs and expenses related thereto.

The Company also repaid $ 64 million of private placement notes due May 20, 2030.

95 2021 Annual Report

Management's Report on Internal Control over Financial Reporting

To the Board of Directors and Stockholders of Herman Miller, Inc.

To the Board of Directors and Stockholders of MillerKnoll, Inc.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f).

The internal control over financial reporting at Herman Miller, Inc.

The internal control over financial reporting at MillerKnoll, Inc.

is designed to provide reasonable assurance to our stakeholders that the financial statements of the Company fairly represent its financial condition and results of operations.

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To the Stockholders and Board of Directors

Herman Miller, Inc.:

MillerKnoll, Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Herman Miller, Inc.

and subsidiaries (the Company) as of May 29, 2021 and May 30, 2020, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended May 29, 2021, and the related notes and financial statement schedule II – Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of MillerKnoll, Inc.

and subsidiaries (the Company) as of May 28, 2022 and May 29, 2021, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended May 28, 2022, and the related notes and financial statement schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of May 28, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of May 29, 2021 and May 30, 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended May 29, 2021, in conformity with U.S.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of May 28, 2022 and May 29, 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended May 28, 2022, in conformity with U.S.

generally accepted accounting principles.

1 unchanged sentence

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for leases as of June 2, 2019 due to the adoption of Accounting Standards Update No.

2016-02, Leases (Topic 842).

As discussed in Note 1 to the consolidated financial statements, the Company has elected to change its method of accounting for the cost of certain inventories from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method as of June 1, 2019.

Basis for Opinions

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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

97 2021 Annual Report

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;

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;

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.

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(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

HAY tradename impairment assessment

As discussed in Note 1 to the consolidated financial statements, the indefinite-lived intangible asset balance as of May 29, 2021 was $43.1 million related to the HAY tradename.

Indefinite-lived intangible assets are tested for impairment annually in the fourth quarter, or more frequently, when events or changes in circumstances indicate that the fair value of an indefinite-lived intangible asset has declined below its carrying value.

To estimate the fair value of the indefinite-lived intangible assets, the Company utilizes the relief from royalty method.

We identified the evaluation of the HAY tradename for impairment as a critical audit matter.

Subjective and challenging auditor judgment was required to evaluate the selection of forecasted revenue growth rates, discount rate, and royalty rate used to estimate the fair value of the HAY tradename.

Additionally, the audit effort associated with the evaluation of the HAY tradename for impairment required specialized skills and knowledge.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of acquired intangible assets - Knoll acquisition

As discussed in Note 3 to the consolidated financial statements, the Company completed the acquisition of Knoll, Inc.

on July 19, 2021, for total consideration of $1,887.3 million.

Accordingly, the assets acquired and liabilities assumed were recognized based on their acquisition date fair values, including identified intangible assets of $756.6 million.

The Company primarily used valuation techniques under the income approach to determine the fair value of the identified intangible assets.

We identified the evaluation of the fair value of certain trade name and customer relationship intangible assets acquired in the Knoll acquisition as a critical audit matter because of the significant judgments made by management to estimate the fair values and the sensitivity of the calculated fair values to possible changes in the significant assumptions.

Additionally, the audit effort associated with the evaluation of the fair value of these certain acquired intangible assets required specialized skills and knowledge.

Specifically, subjective and challenging auditor judgment was required to evaluate the following significant assumptions:

• Forecasted revenue growth rates

• Estimated royalty rates

• Discount rates

Customer relationships

• Forecasted revenue growth rates

• Forecasted operating margins

• Discount rates

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s impairment evaluation for the HAY tradename, including controls over the selection of forecasted revenue growth rates, discount rate, and royalty rate used to estimate the fair value of the HAY tradename.

We evaluated the reasonableness of management’s forecasted revenue growth rates by comparing the forecasts to historical revenue growth rates, considering industry conditions and growth plans.

We performed sensitivity analyses to assess the impact of reasonably possible changes to the forecasted revenue growth rates, discount rate, and royalty rate assumptions on the fair value of the tradename.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s acquisition-date valuation process, including controls over the development and selection of significant assumptions related to the valuation of these certain intangible assets.

We evaluated the reasonableness of management’s forecasted revenue growth rates and operating margins by comparing the forecasts to historical revenue growth rates and operating margins, as well as external competitor and industry data.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company’s discount rate by comparing the Company’s inputs to the discount rate to publicly available data for comparable entities and assessing the overall discount rate;

• evaluating the Company’s royalty rate by comparing the selected royalty rate to the forecasted operating margins of the sales associated with the tradename and publicly available data for comparable licensing agreements and assessing the overall royalty rate.

• evaluating the Company’s royalty rates by comparing the selected royalty rates to the forecasted operating margins of the Knoll entities and publicly available data for comparable licensing agreements

• evaluating the Company’s discount rates by comparing the Company’s inputs to the discount rates to publicly available data for comparable entities.

We have served as the Company’s auditor since 2019.

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July 26, 2022

Herman Miller, Inc.

and Subsidiaries 98

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Herman Miller, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Herman Miller, Inc.

and subsidiaries (the Company) as of June 1, 2019, and the related consolidated statements of comprehensive income, stockholders’ equity and cash flows for each of the two years in the period ended June 1, 2019, and the related notes and financial statement schedule for each of the two years in the period ended June 1, 2019 listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 1, 2019, and the results of its operations and its cash flows for each of the two years in the period ended June 1, 2019, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We served as the Company’s auditor from 2002 to 2019.

Grand Rapids, Michigan

July 27, 2021

99 2021 Annual Report

Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data