What changed in this filing

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Item 1. Financial Statements

2022-10-12 compared with 2022-04-06 · 185 added, 415 removed, 465 unchanged (56% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Dollars in millions, except share data) Three Months Ended Nine Months Ended

(Unaudited) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

(Dollars in millions, except share data) Three Months Ended

(Unaudited) September 3, 2022 August 28, 2021

Net sales $ 1,078.8 $ 789.7

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Selling, general and administrative 296.9 306.8

Restructuring expense, net — 0.3 — 1.5

Restructuring expense 0.5 —

Design and research 23.9 23.5

6 unchanged sentences

Income tax expense (benefit) 6.3 ( 10.7 )

Equity (loss) income from nonconsolidated affiliates, net of tax — ( 0.3 ) — 0.1

Equity income from nonconsolidated affiliates, net of tax — 0.1

Net earnings (loss) 27.4 ( 59.8 )

7 unchanged sentences

Pension and post-retirement liability adjustments 0.4 2.3

Unrealized gains on interest rate swap agreement 10.2 6.7 13.2 7.8

Unrealized holding loss on available for sale securities — — — ( 0.1 )

Other comprehensive income (loss), net of tax 17.1 18.6 ( 29.9 ) 57.3

Comprehensive income (loss) 31.5 61.9 ( 76.5 ) 226.8

Comprehensive income (loss) attributable to redeemable noncontrolling interests 1.8 2.1 3.7 6.9

Comprehensive income (loss) attributable to MillerKnoll, Inc.

Unrealized gain (loss) on interest rate swap agreement 14.3 ( 1.0 )

Other comprehensive (loss), net of tax $ ( 57.8 ) $ ( 14.7 )

Comprehensive (loss) ( 30.4 ) ( 74.5 )

Comprehensive income attributable to redeemable noncontrolling interests 1.7 2.1

Comprehensive (loss) income attributable to MillerKnoll, Inc.

$ ( 32.1 ) $ ( 76.6 )

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MillerKnoll, Inc.

and Subsidiaries 3

MillerKnoll, Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions, except share data)

(Unaudited) February 26, 2022 May 29, 2021

(Unaudited) September 3, 2022 May 28, 2022

Current Assets:

3 unchanged sentences

Unbilled accounts receivable 33.8 32.0

Inventories 520.8 213.6

Inventories, net 615.5 587.3

Prepaid expenses 118.5 112.1

38 unchanged sentences

Condensed Consolidated Statements of Cash Flows

(Dollars in millions) Nine Months Ended

(Unaudited) February 26, 2022 February 27, 2021

(Dollars in millions) Three Months Ended

(Unaudited) September 3, 2022 August 28, 2021

Cash Flows from Operating Activities:

Net (loss) earnings $ ( 46.6 ) $ 169.5

Net earnings (loss) $ 27.4 $ ( 59.8 )

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

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Stock-based compensation 5.4 15.1

Pension and post-retirement expenses ( 6.2 ) 2.3

Amortization of deferred financing costs 1.2 0.4

Deferred taxes 0.1 ( 8.2 )

(Gain) loss on sales of property and dealers ( 2.0 ) 0.2

Loss on impairment 15.5 —

Restructuring expense 0.5 —

Loss on extinguishment of debt — 13.4

(Increase) in current assets ( 219.6 ) ( 6.4 )

Increase in current liabilities 33.5 9.7

(Decrease) increase in non-current liabilities ( 8.6 ) 11.0

(Increase) decrease in current assets ( 47.2 ) ( 65.8 )

(Decrease) increase in current liabilities ( 91.2 ) ( 5.0 )

Other, net ( 0.6 ) ( 1.5 )

Net Cash (Used in) Provided by Operating Activities ( 57.9 ) 260.1

Net Cash Used in Operating Activities ( 64.8 ) ( 51.7 )

Cash Flows from Investing Activities:

Proceeds from sale of subsidiary — 11.5

Proceeds from sale of property and dealers 2.8 —

Notes receivables issued ( 4.5 ) —

Capital expenditures ( 17.3 ) ( 18.6 )

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

Proceeds from the sale of investments 7.7 —

Proceeds from loan on cash surrender value of life insurance 13.5 —

Other, net ( 1.9 ) 2.4

Net Cash Used for Investing Activities ( 1,145.0 ) ( 42.9 )

Net Cash Used in Investing Activities ( 10.2 ) ( 1,104.7 )

Cash Flows from Financing Activities:

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Other, net ( 0.5 ) ( 2.8 )

Net Cash Provided by (Used in) Financing Activities 1,061.4 ( 287.3 )

Net Cash Provided by Financing Activities 77.0 1,001.6

Effect of Exchange Rate Changes on Cash and Cash Equivalents ( 16.5 ) ( 6.5 )

4 unchanged sentences

MillerKnoll, Inc.

and Subsidiaries 5

MillerKnoll, Inc.

Condensed Consolidated Statements of Stockholders' Equity

Nine Months Ended February 26, 2022

Three Months Ended September 3, 2022

(Dollars in millions, except share data) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Deferred Compensation Plan MillerKnoll, Inc.

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Repurchase and retirement of common stock ( 494,509 ) ( 0.1 ) ( 14.2 ) — — — ( 14.3 )

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

Pre-combination expense from Knoll rollover 751,907 0.2 22.4 — — — 22.6

Dividends declared ($ 0.1875 per share)

— — — ( 14.3 ) — — ( 14.3 )

August 28, 2021 75,784,091 $ 15.2 $ 808.3 $ 732.6 $ ( 80.3 ) $ ( 0.2 ) $ 1,475.6

Net earnings — — — ( 3.4 ) — — ( 3.4 )

Other comprehensive income, net of tax — — — — ( 27.8 ) — ( 27.8 )

Stock-based compensation expense — — 7.0 — — — 7.0

Exercise of stock options 52,697 — 1.5 — — — 1.5

Restricted and performance stock units released 91,443 — 0.2 — — — 0.2

Employee stock purchase plan issuances 18,813 — 0.6 — — — 0.6

Repurchase and retirement of common stock ( 76,246 ) — ( 3.3 ) — — — ( 3.3 )

Forfeiture of shares ( 130,410 ) ( 0.1 ) — — — — ( 0.1 )

NCI Adjustment — — 0.5 — — — 0.5

Dividends declared ($ 0.1875 per share)

— — — ( 14.4 ) — — ( 14.4 )

November 27, 2021 75,740,388 $ 15.1 $ 814.8 $ 714.8 $ ( 108.1 ) $ ( 0.2 ) $ 1,436.4

Net earnings — — 12.6 — — 12.6

Other comprehensive income, net of tax — — — — 15.1 — 15.1

Stock-based compensation expense — — 4.9 — — — 4.9

Exercise of stock options 11,053 — 0.3 — — — 0.3

Restricted and performance stock units released 45,417 — — — — — —

Employee stock purchase plan issuances 20,437 — 0.7 — — — 0.7

Directors Fees 23,255 0.1 1.5 1.6

Deferred compensation plan — — — — — 0.2 0.2

Repurchase and retirement of common stock ( 41,346 ) — ( 1.6 ) — — — ( 1.6 )

Forfeiture of shares ( 652 ) — — — — — —

Dividends declared ($ 0.1875 per share)

— — — ( 14.3 ) — — ( 14.3 )

February 26, 2022 75,798,552 $ 15.2 $ 820.6 $ 713.1 $ ( 93.0 ) $ — $ 1,455.9

Nine Months Ended February 27, 2021

Other — — 0.5 0.5 — — 1.0

September 3, 2022 75,556,031 $ 15.1 $ 819.3 $ 705.3 $ ( 164.9 ) $ — $ 1,374.8

Three Months Ended August 28, 2021

(Dollars in millions, except share data) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Deferred Compensation Plan MillerKnoll, Inc.

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Repurchase and retirement of common stock ( 267,522 ) — ( 11.0 ) — — — ( 11.0 )

Directors' fees 3,013 — 0.1 — — — 0.1

August 29, 2020 58,899,500 $ 11.8 $ 83.1 $ 756.9 $ ( 105.1 ) $ ( 0.3 ) $ 746.4

Net earnings — — — 51.3 — — 51.3

Other comprehensive income, net of tax — — — — 7.0 — 7.0

Stock-base compensation expense — — 2.4 — — — 2.4

Exercise of stock options 54,771 — 1.9 — — — 1.9

Restricted and performance stock units released 3,688 — — — — — —

Employee stock purchase plan issuances 14,880 — 0.4 — — — 0.4

Repurchase and retirement of common stock ( 1,198 ) — — — — — —

Dividends declared ($ 0.1875 per share)

— — $ — ( 11.1 ) — — ( 11.1 )

November 28, 2020 58,971,641 $ 11.8 $ 87.8 $ 797.1 $ ( 98.1 ) $ ( 0.3 ) $ 798.3

Net earnings — $ — — 41.5 — — 41.5

Other comprehensive income, net of tax — — — — 18.3 — 18.3

Stock-based compensation expense — — 2.2 — — — 2.2

Exercise of stock options 10,628 — 0.1 — — — 0.1

Restricted and performance stock units released 1,736 — 0.1 — — — 0.1

Employee stock purchase plan issuances 17,709 — 0.6 — — — 0.6

Repurchase and retirement of common stock ( 579 ) — — — — — —

Deferred compensation plan — — — — — 0.1 0.1

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

Pre-combination expense from Knoll rollover 751,907 0.2 22.4 — — — 22.6

Dividends declared ($ 0.1875 per share)

— — — ( 14.3 ) — — ( 14.3 )

February 27, 2021 59,001,135 $ 11.8 $ 90.8 $ 827.5 $ ( 79.8 ) $ ( 0.2 ) $ 850.1

August 28, 2021 75,784,091 $ 15.2 $ 808.3 $ 743.7 $ ( 80.3 ) $ ( 0.2 ) $ 1,486.7

See accompanying notes to Condensed Consolidated Financial Statements.

MillerKnoll, Inc.

and Subsidiaries 7

Notes to Condensed Consolidated Financial Statements

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(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 through independent contract office furniture dealers, owned retail studios, the Company’s eCommerce platforms, direct mail catalogs, as well as direct customer sales and independent retailers.

The Company's products are sold 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.

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

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

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.

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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.

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.

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The Condensed Consolidated Financial Statements have been prepared by MillerKnoll, Inc.

(“the Company”) in accordance with accounting principles generally accepted in the United States of America ("U.S.

in accordance with accounting principles generally accepted in the United States of America ("U.S.

GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

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Management believes the disclosures made in this document are adequate with respect to interim reporting requirements.

Unless otherwise noted or indicated by the context, all references to "MillerKnoll," "Herman Miller," "we," "our," "Company" and similar references are to MillerKnoll, Inc., its predecessors, and controlled subsidiaries.

The accompanying unaudited Condensed Consolidated Financial Statements, taken as a whole, contain all adjustments that are of a normal recurring nature necessary to present fairly the financial position of the Company as of February 26, 2022.

Operating results for the three and nine months ended February 26, 2022 are not necessarily indicative of the results that may be expected for the year ending May 28, 2022 ("fiscal 2022").

Unless otherwise noted or indicated by the context, all references to "MillerKnoll," "we," "our," "Company" and similar references are to MillerKnoll, Inc., its predecessors, and controlled subsidiaries.

Operating results for the three months ended September 3, 2022 are not necessarily indicative of the results that may be expected for the year ending June 3, 2023 ("fiscal 2023").

It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended May 28, 2022 ("fiscal 2022").

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The financial statements of equity method investments are not consolidated.

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.

Segment Reorganization

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The Company has recast historical results to reflect this change.

description of each reportable segment.

Intersegment sales are eliminated within each segment, with the exception of sales to and from the Knoll segment, which are presented as intersegment eliminations.

• Global Retail ("Retail") – reflects the legacy North America Retail segment and now includes International Retail

• Americas Contract ("Americas") – reflects the legacy Herman Miller North America Contract segment combined with Latin America and Design Within Reach Contract

• International Contract ("International") – reflects global Contract activity outside the Americas, excluding the international activity of Knoll

• Knoll – the Knoll segment includes the global operations associated with the design, manufacture, and sale of furniture products within the Knoll constellation of brands.

The acquired Knoll business will initially be reflected as a stand-alone segment.

See Note 15 "Operating Segments" for additional information.

The Company's fiscal year is the 52 or 53 week period ending on the Saturday closest to May 31.

The fiscal year ended May 28, 2022 ("fiscal 2022") was a 52 week period while the fiscal year ending June 3, 2023 ("fiscal 2023") will be a 53 week period.

The first quarter of fiscal 2022 contained 13 weeks and the first quarter of fiscal 2023 contained 14 weeks.

Change in Accounting Principle

In the fourth quarter of fiscal 2022, 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”).

With this change there are

no longer any inventories accounted for under the LIFO method.

We have retrospectively adjusted the Consolidated Financial Statements for the prior period presented to reflect this change.

Recently Issued Accounting Standards

Recently Adopted Accounting Standards

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

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 and additional disclosures will be made in our annual report.

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

The Company is currently evaluating the impact of adopting the following relevant standards issued by the FASB:

Standard Description Effective Date

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.

The Company is evaluating the effect of adopting this new accounting guidance.

We have assessed all other ASUs issued but not yet adopted and concluded that those not disclosed are not relevant to the Company or are not expected to have a material impact.

MillerKnoll, Inc.

and Subsidiaries 9

The Company evaluates all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB") for consideration of their applicability to our consolidated financial statements.

We have assessed all ASUs issued but not yet adopted and concluded that those not disclosed are not relevant to the Company or are not expected to have a material impact.

Revenue from Contracts with Customers

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Revenue disaggregated by contract type is provided in the table below:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Three Months Ended

(In millions) September 3, 2022 August 28, 2021

Single performance obligation

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Revenue disaggregated by product type and reportable segment is provided in the table below:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Three Months Ended

(In millions) September 3, 2022 August 28, 2021

Americas Contract:

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Total Americas Contract $ 537.4 $ 381.3

International Contract:

International Contract & Specialty:

Workplace $ 44.4 $ 28.2

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Other 52.2 35.2

Total International Contract $ 123.4 $ 98.0 $ 347.4 $ 293.5

Total International Contract & Specialty $ 272.5 $ 167.1

Global Retail:

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Total Global Retail $ 268.9 $ 241.3

Workplace $ 155.0 $ — $ 388.0 $ —

Performance Seating 29.1 — 66.8 —

Lifestyle 125.7 — 310.6 —

Other 27.1 — 64.1 —

Total Knoll $ 336.9 $ — $ 829.5 $ —

Intersegment sales elimination $ ( 8.7 ) $ — $ ( 18.8 ) $ —

Total $ 1,078.8 $ 789.7

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

Refer to Note 15 of the Condensed Consolidated Financial Statements for further information related to our reportable segments.

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These payments represent contract liabilities and are included within the caption “Customer deposits” in the Condensed Consolidated Balance Sheets.

During the three and nine months ended February 26, 2022, the Company recognized Net sales of $ 14.2 million and $ 85.5 million, respectively, related 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.

MillerKnoll, Inc.

and Subsidiaries 11

The components of lease expense are provided in the table below:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Operating lease costs $ 23.7 $ 13.3 $ 64.8 $ 36.8

Short-term lease costs 3.0 0.9 7.4 2.4

Variable lease costs* 2.4 2.3 7.3 5.9

Total $ 29.1 $ 16.5 $ 79.5 $ 45.1

*Not included in the table above for the three and nine months ended February 26, 2022 are variable lease costs of $ 22.7 million and $ 68.4 million, respectively, for raw material purchases under certain supply arrangements that the Company has determined meet the definition of a lease.

This compares to purchases of $ 22.8 million and $ 61.40 million for the three and nine months ended February 27, 2021, respectively.

At February 26, 2022, the Company had no financing leases.

The undiscounted annual future minimum lease payments related to the Company's right-of-use assets are summarized by fiscal year in the following table:

(In millions)

Thereafter 145.7

Total lease payments* $ 492.3

Less interest 21.2

Present value of lease liabilities $ 471.1

*Lease payments exclude $ 1.8 million of legally binding minimum lease payments for leases signed but not yet commenced.

At February 26, 2022, the weighted average remaining lease term and weighted average discount rate for operating leases were 7.1 years and 2.5 %, respectively.

Supplemental cash flow and other information related to leases are provided in the table below:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Operating cash flows used in operating leases $ 28.9 $ 13.5 $ 62.6 $ 36.3

Right-of-use assets obtained in exchange for new liabilities $ 28.4 $ 7.1 $ 54.3 $ 55.7

Acquisitions and Divestitures

During the three months ended September 3, 2022, and August 28, 2021 the Company recognized Net sales of $ 79.1 million and $ 41.1 million, respectively, related to customer deposits that were included in the balance sheet as of August 28, 2021 and May 28, 2022 respectively.

On July 19, 2021, the Company completed its previously announced acquisition of Knoll, Inc.

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The Company has included the financial results of Knoll in the condensed 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 $ 1.2 million and $ 28.8 million for the three and nine months ended February 26, 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.

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.

Of the total transaction costs, $ 26.7 million were recorded in the three months ended August 28, 2021.

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

The preliminary 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):

The acquisition date fair value of the consideration transferred for Knoll was $ 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

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

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

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.

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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 preliminarily allocated to purchase consideration and $ 31.0 million was preliminarily 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.

Outstanding unvested restricted stock awards, performance stock awards, performance stock units and restricted stock units with a 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 resulted 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 purchase price allocation is preliminary and subject to change as the valuation of inventory, property, plant and equipment, intangible assets and income taxes among other items is not complete.

The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date.

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

MillerKnoll, Inc.

and Subsidiaries 13

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

(In millions) Fair Value

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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 $ 941.4 million.

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

The fair values assigned to tangible assets acquired and liabilities assumed are preliminary based on management's estimates and assumptions and may be subject to change as additional information is received and certain tax matters are finalized.

Certain adjustments were made during the three months ended February 26, 2022 to the preliminary fair values resulting in a net decrease to goodwill of $ 2.3 million primarily related to adjustments to the value of certain liabilities acquired and the fair value of intangible assets acquired.

The primary areas that remain preliminary relate to the fair values of intangible assets acquired, certain tangible assets and liabilities acquired, income and non-income-based taxes and residual goodwill.

The Company expects to finalize the valuations as soon as practicable, but not later than one year from the acquisition date.

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

Goodwill related to the acquisition was allocated to each of the reporting segments with a total value as of the opening balance sheet date of $ 903.5 million.

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

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:

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Total $ 756.6

Revenue and Net Loss of Knoll included in the Company's Condensed Consolidated Statements of Comprehensive Income (Loss) from the acquisition date of July 19, 2021 through February 26, 2022 are as follows (in millions):

Total Revenue $ 829.5

Net Loss $ ( 63.4 )

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 three and nine months ended February 26, 2022 and February 27, 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 impact of these adjustments is subject to change as valuations are finalized.

The following table provides pro forma results of operations for the three months ended August 28, 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.

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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.

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Three Months Ended

(In millions) August 28, 2021

Net sales $ 943.9

Net earnings (loss) attributable to MillerKnoll, Inc.

$ 8.0 $ 30.1 $ ( 18.0 ) $ 140.2

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 the caption Selling, general and administrative within the Condensed Consolidated Statements of Comprehensive Income.

Net (loss) attributable to MillerKnoll, Inc.

Inventories, net

(In millions) February 26, 2022 May 29, 2021

(In millions) September 3, 2022 May 28, 2022

Finished goods and work in process $ 451.0 $ 441.6

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Total $ 615.5 $ 587.3

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

Certain inventories within our United States-based manufacturing operations are valued using the last-in, first-out (LIFO) method.

Inventories of all other operations are primarily valued using the first-in, first-out (FIFO) method.

Inventories valued using LIFO amounted to $ 25.9 million and $ 21.8 million as of February 26, 2022 and May 29, 2021, respectively.

If all inventories had been valued using the first-in first-out method, inventories would have been $ 543.4 million and $ 230.2 million at February 26, 2022 and May 29, 2021, respectively.

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

Goodwill and Indefinite-Lived Intangibles

Goodwill and other indefinite-lived intangible assets included in the Condensed Consolidated Balance Sheets consisted of the following as of February 26, 2022 and May 29, 2021:

(In millions) Goodwill Indefinite-lived Intangible Assets

Goodwill and other indefinite-lived intangible assets included in the Condensed Consolidated Balance Sheets consisted of the following as of September 3, 2022 and May 28, 2022:

(In millions) Americas Contract International Contract & Specialty Global Retail Total

Goodwill $ 530.1 $ 340.9 $ 480.6 1,351.6

Foreign currency translation adjustments ( 9.7 ) ( 8.9 ) ( 10.0 ) ( 28.6 )

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

September 3, 2022 $ 520.4 $ 295.3 $ 381.8 $ 1,197.5

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

(In millions) Indefinite-lived Intangible Assets

May 28, 2022 $ 501.0

Foreign currency translation adjustments ( 9.7 )

Sale of owned dealer ( 0.3 ) —

Acquisition of Knoll 941.4 413.0

February 26, 2022 $ 1,282.7 $ 503.8

September 3, 2022 $ 491.3

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, with the exception of Knoll, were reviewed for impairment using a quantitative assessment as of March 31, 2021, our annual testing date.

In performing the quantitative impairment test for fiscal year 2021, the Company

MillerKnoll, Inc.

and Subsidiaries 15

determined that the fair value of its reporting units exceeded the carrying amount and, as such, these reporting units were not impaired.

In connection with the segment reorganization, certain Company reporting units have changed in composition, and goodwill was reallocated between such reporting units using a relative fair value approach.

Accordingly, the Company performed interim goodwill impairment tests in the first quarter of 2022 for each reporting unit, with the exception of Knoll.

Based on the results of the tests performed, the Company determined that the fair value of each reporting unit, as reorganized, exceeded its respective carrying amount in each case.

Goodwill related to the acquisition of Knoll was recorded within the Knoll segment at $ 941.4 million.

The increase in goodwill from the acquisition of Knoll was offset in part by foreign currency translation adjustments as well a reduction due to the sale of an owned dealer, resulting in a goodwill balance of $ 1,282.7 million as of February 26, 2022.

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

In performing the qualitative impairment test for fiscal year 2022, the Company determined that the fair value of its reporting units exceeded the carrying amount and, as such, these reporting units were not impaired.

In connection with the segment reorganization, certain of the Company’s reporting units have changed in composition, and goodwill was reallocated between such reporting units using a relative fair value approach.

Accordingly, the Company performed interim goodwill impairment tests in the first quarter of 2023 for each reporting unit.

Based on the results of the tests performed, the Company determined that the fair value of each reporting unit, both before and after the reorganization, exceeded its respective carrying amount.

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.

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

The carrying value of the Company's HAY trade name indefinite-lived intangible asset was $ 41.7 million as of March 31, 2021.

The calculated fair value of the HAY trade name was $ 43.8 million which represents an excess fair value of $ 2.1 million or 5.0 %.

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.

During the nine months ended February 26, 2022, there were no identified indicators of impairment that required the Company to complete an interim quantitative impairment assessment related to any of the Company's reporting units or indefinitely-lived intangible assets.

Employee Benefit Plans

1 unchanged sentence

Pension Benefits

Three Months Ended February 26, 2022 Three Months Ended February 27, 2021

(In millions) Domestic International Domestic International

Service cost $ 0.1 $ — $ — $ —

Interest cost 1.1 0.8 — 0.7

Expected return on plan assets (1)

( 2.1 ) ( 1.8 ) — ( 1.5 )

Net amortization loss — 1.7 — 1.7

Net periodic benefit cost $ ( 0.9 ) $ 0.7 $ — $ 0.9

Nine Months Ended February 26, 2022 Nine Months Ended February 27, 2021

Three Months Ended September 3, 2022 Three Months Ended August 28, 2021

(In millions) Domestic International Domestic International

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Earnings Per Share

The following table reconciles the numerators and denominators used in the calculations of basic and diluted earnings per share ("EPS") for the three and nine months ended:

Three Months Ended Nine Months Ended

February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

The following table reconciles the numerators and denominators used in the calculations of basic and diluted earnings per share ("EPS") for the three months ended:

Three Months Ended

September 3, 2022 August 28, 2021

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

6 unchanged sentences

Stock-Based Compensation

The following table summarizes the stock-based compensation expense and related income tax effect for the three and nine months ended:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

The following table summarizes the stock-based compensation expense and related income tax effect for the three months ended:

Three Months Ended

(In millions) September 3, 2022 August 28, 2021

Stock-based compensation expense $ 5.4 $ 15.1

Related income tax effect $ 1.3 $ 3.7

The increase in Stock-based compensation expense was driven in part by the addition of Knoll's equity-based compensation awards.

This impact includes the accelerated stock-compensation award expense related to workforce reductions as part of the Knoll integration.

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

The decrease in stock-based compensation expense was driven in part by the prior year's acceleration of stock-based compensation award expense related to the workforce reductions subsequent to the Knoll integration.

Certain Company equity-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's process for determining the provision for income taxes for the three and nine months ended February 26, 2022 involved using an estimated annual effective tax rate which was based on expected annual income and statutory tax rates across the various jurisdictions in which it operates.

The effective tax rates were 15.6 % and 22.9 %, respectively, for the three month periods ended February 26, 2022 and February 27, 2021.

The year over year change in the effective tax rate for the three months ended February 26, 2022 resulted from an adjustment in the quarter resulting from the impact of the annual effective tax rate and the majority of the pre-tax loss for the year previously recorded through the first six months of the fiscal year.

The same quarter of the prior year had no comparable impacts.

For the three months ended February 26, 2022, the effective tax rate is lower than the United States federal statutory rate due to the impact of applying the estimated annual effective tax rate to the year to date pre-tax loss.

For the three months ended February 27, 2021, the effective tax rate was higher than the United States federal statutory rate due to United States state income taxes and the mix of earnings in tax jurisdictions that had rates that were higher than the United States federal statutory rate.

The effective tax rates were 19.8 % and 22.7 %, respectively, for the nine months ended February 26, 2022 and February 27, 2021.

The year over year decrease in the effective rate for the nine months ended February 26, 2022 resulted from an overall pre-tax book loss reported for the nine months coupled with non-deductible discrete compensation and acquisition costs in

MillerKnoll, Inc.

and Subsidiaries 17

connection with the Knoll acquisition.

The same nine months in the prior year had no comparable impacts from the acquisition.

For the nine months ended February 26, 2022, the effective tax rate is lower than the United States federal statutory rate due to the impact of applying the estimated annual effective tax rate to the year to date pre-tax loss, which includes an adjustment impacted by non-deductible Knoll acquisition related costs.

For the nine months ended February 27, 2021, the effective tax rate was higher than the United States federal statutory rate mainly due to United States state income taxes and the mix of earnings in tax jurisdictions that had rates that were higher than the United States federal statutory rate.

The Company's process for determining the provision for income taxes for the three months ended September 3, 2022 involved using an estimated annual effective tax rate which was based on expected annual income and statutory tax rates across the various jurisdictions in which it operates.

The effective tax rates were 18.8 % and 15.3 %, respectively, for the three month periods ended September 3, 2022 and August 28, 2021.

The year over year change in the effective tax rate for the three months ended September 3, 2022 resulted from the current year quarter reporting pre-tax book income with favorable foreign tax credit impacts in the United States and the same quarter of the prior year reporting pre-tax book loss with non-deductible discrete

compensation and acquisition costs in connection with the Knoll acquisition.

For the three months ended September 3, 2022, the effective tax rate is lower than the United States federal statutory rate due to the favorable impact of increased foreign tax credits in the United States resulting from the recapture of prior year overall domestic loss.

For the three months ended August 28, 2021, the effective tax rate is lower than the United States federal statutory rate due to the impact of the Knoll acquisition related costs creating a pre-tax loss for the quarter coupled with non-deductible discrete compensation and acquisition costs in the quarter.

The Company recognizes interest and penalties related to uncertain tax benefits through income tax expense in its Condensed Consolidated Statements of Comprehensive Income.

Interest and penalties recognized in the Company's Condensed Consolidated Statements of Comprehensive Income were negligible for the three and nine months ended February 26, 2022 and February 27, 2021.

Interest and penalties recognized in the Company's Condensed Consolidated Statements of Comprehensive Income were negligible for the three months ended September 3, 2022 and August 28, 2021.

The Company's recorded liability for potential interest and penalties related to uncertain tax benefits was:

(In millions) February 26, 2022 May 29, 2021

(In millions) September 3, 2022 May 28, 2022

Liability for interest and penalties $ 1.0 $ 0.9

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The carrying value and fair value of the Company's long-term debt, including current maturities, is as follows for the periods indicated:

(In millions) February 26, 2022 May 29, 2021

(In millions) September 3, 2022 May 28, 2022

Carrying value $ 1,531.7 $ 1,427.9

2 unchanged sentences

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.

The equity mutual fund investments are recorded at fair value using quoted prices for similar securities.

Deferred compensation plan — The Company's deferred compensation plan primarily includes various domestic and international mutual funds that are recorded at fair value using quoted prices for similar securities.

2 unchanged sentences

These forward contracts are not designated as hedging instruments.

The following table sets forth financial assets and liabilities measured at fair value through net income and the respective pricing levels to which the fair value measurements are classified within the fair value hierarchy as of February 26, 2022 and May 29, 2021.

(In millions) February 26, 2022 May 29, 2021

(In millions) September 3, 2022 May 28, 2022

Financial Assets NAV Quoted Prices with Other

3 unchanged sentences

Money market funds $ 18.5 $ — $ 31.8 $ —

Mutual funds - equity — — — 0.8

Foreign currency forward contracts — 1.2 — 0.4

4 unchanged sentences

Total $ — $ 5.1 $ — $ 1.0

In connection with the acquisition of Knoll, the Company acquired a contingent obligation related to Knoll's acquisition of Fully.

During the period ended February 26, 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, the estimates have not significantly changed in the current period:

Mutual funds-fixed income — The Company's fixed-income securities primarily include fixed income mutual funds and government obligations.

These investments are recorded at fair value using quoted prices for similar securities.

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:

Interest rate swap agreements — The value of the Company's interest rate swap agreements are determined using a market approach based on rates obtained from active markets.

The interest rate swap agreements are designated as cash flow hedging instruments.

The following table sets forth financial assets and liabilities measured at fair value through other comprehensive income and the respective balance sheet locations and pricing levels to which the fair value measurements are classified within the fair value hierarchy as of February 26, 2022 and May 29, 2021.

(In millions) February 26, 2022 May 29, 2021

The following table sets forth financial assets and liabilities measured at fair value through other comprehensive income and the respective pricing levels to which the fair value measurements are classified within the fair value hierarchy as of September 3, 2022 and May 28, 2022.

(In millions) September 3, 2022 May 28, 2022

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 50.6 31.9

3 unchanged sentences

Total $ — $ —

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:

February 26, 2022 May 29, 2021

(In millions) Cost Unrealized

Gain/(Loss) Market

Value Cost Unrealized

Gain/(Loss) Market

Mutual funds - fixed income $ — $ — $ — $ 6.9 $ — $ 6.9

Mutual funds - equity — — — 0.5 0.3 0.8

Total $ — $ — $ — $ 7.4 $ 0.3 $ 7.7

During the third Quarter, the fixed income mutual funds and equity mutual funds were dissolved and converted to cash.

The cost of securities sold is based on the specific identification method;

realized gains and losses resulting from such sales are included in the Condensed 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 Condensed Consolidated Balance Sheets.

Derivative Instruments and Hedging Activities

MillerKnoll, Inc.

and Subsidiaries 19

Foreign Currency Forward Contracts

10 unchanged sentences

The Company's interest rate swap agreements exchange variable rate interest payments for fixed rate payments over the life of the agreement without the exchange of the underlying notional amounts.

The notional amount of the interest rate swap agreements is used to measure interest to be paid or received.

The notional amount of the interest rate

swap agreements is used to measure interest to be paid or received.

The differential paid or received on the interest rate swap agreements is recognized as an adjustment to interest expense.

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 percent exclusive of the credit spread on the variable rate debt.

The company effectively will convert indebtedness anticipated to be borrowed on the company’s revolving line of credit from a LIBOR-based floating interest rate plus applicable margin to a 1.689 percent fixed interest rate plus applicable margin under the agreement as of the forward start date.

The interest rate swaps were designated as cash flow hedges at inception and the facts and circumstances of the hedged relationships remain consistent with the initial quantitative effectiveness assessment in that the hedged instruments remain an effective accounting hedge as of February 26, 2022.

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.

As of February 26, 2022, the Company had the following three outstanding interest rate swap agreements:

(In millions) Notional Amount Forward Start Date Termination Date Effective Fixed Interest Rate

1 unchanged sentence

June 2017 Interest Rate Swap $ 75.0 January 3, 2018 January 3, 2028 2.387 %

January 2022 Interest Rates 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 margin to an effective fixed interest rate plus applicable margin under the agreements as of the forward start date.

The following table summarizes the effects of the interest rate swap agreements for the three and nine months ended:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

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 margin to an effective fixed rate plus applicable margin under the agreements as of the forward start date.

The following table summarizes the effects of the interest rate swap agreements for the three months ended:

Three Months Ended

(In millions) September 3, 2022 August 28, 2021

Gain recognized in Other comprehensive loss (effective portion) $ 14.3 $ ( 1.0 )

(Loss) reclassified from Accumulated other comprehensive loss into earnings $ ( 0.4 ) $ ( 0.8 )

There were no gains or losses recognized in earnings for hedge ineffectiveness for the three and nine month periods ended February 26, 2022 and February 27, 2021.

There were no gains or losses recognized in earnings for hedge ineffectiveness for the three month periods ended September 3, 2022 and August 28, 2021.

The amount of loss expected to be reclassified from Accumulated other comprehensive loss into earnings during the next twelve months is $ 15.0 million, and net of tax is $ 11.2 million.

Redeemable Noncontrolling Interests

Changes in the Company's redeemable noncontrolling interest in HAY for the nine months ended February 26, 2022 and February 27, 2021 are as follows:

(In millions) February 26, 2022 February 27, 2021

Changes in the Company's redeemable noncontrolling interest in HAY for the three months ended September 3, 2022 and August 28, 2021 are as follows:

(In millions) September 3, 2022 August 28, 2021

Beginning Balance $ 106.9 $ 77.0

9 unchanged sentences

The Company does not sell or otherwise issue warranties or warranty extensions as stand-alone products.

Reserves have been established for various costs associated with the Company's warranty program.

Reserves have been established for various costs associated with the Company's warranty programs.

General warranty reserves are based on historical claims experience and other currently available information and are periodically adjusted for business levels and other factors.

3 unchanged sentences

Changes in the warranty reserve for the stated periods were as follows:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Three Months Ended

(In millions) September 3, 2022 August 28, 2021

Accrual Balance — beginning $ 73.2 $ 60.1

1 unchanged sentence

Settlements and adjustments ( 5.2 ) ( 5.8 )

Measurement period adjustment to opening balance sheet 5.0 — — —

Acquired through business acquisition — 15.1

Measurement period adjustments to the reserve made subsequent to the period ended August 28, 2021 — ( 5.0 )

Accrual Balance — ending $ 72.3 $ 69.8

During the third quarter of 2022, MillerKnoll revised the fair value of warranty reserve liability acquired in the Knoll transaction as a measurement period adjustment.

This measurement period adjustment resulted in a $ 5.0 million change in the warranty reserve as of the July 19 th opening balance sheet, with the offset of the change impacting goodwill recorded in the transaction.

MillerKnoll, Inc.

and Subsidiaries 21

The Company is periodically required to provide performance bonds to do business with certain customers.

3 unchanged sentences

However, the Company is ultimately liable for claims that may occur against them.

As of February 26, 2022, the Company had a maximum financial exposure related to performance bonds totaling approximately $ 6.6 million.

As of September 3, 2022, the Company had a maximum financial exposure related to performance bonds totaling approximately $ 7.0 million.

The Company has no history of claims, nor is it aware of circumstances that would require it to pay, under any of these arrangements.

The Company also believes that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect the Company's Consolidated Financial Statements.

Accordingly, no liability has been recorded in respect to these bonds as of either February 26, 2022 or May 29, 2021.

Accordingly, no liability has been recorded in respect to these bonds as of either September 3, 2022 or May 28, 2022.

The Company has entered into standby letter of credit arrangements for purposes of protecting various insurance companies and lessors against default on insurance premium and lease payments.

As of February 26, 2022, the Company had a maximum financial exposure from these standby letters of credit totaling approximately $ 15.4 million, all of which is considered usage against the Company's revolving line of credit.

As of September 3, 2022, the Company had a maximum financial exposure from these standby letters of credit totaling approximately $ 14.5 million, all of which is considered usage against the Company's revolving line of credit.

The Company has no history of claims, nor is it aware of circumstances that would require it to perform, under any of these arrangements and believes that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect the Company's Consolidated Financial Statements.

Accordingly, no liability has been recorded in respect to these arrangements as of February 26, 2022 or May 29, 2021.

Accordingly, no liability has been recorded in respect to these arrangements as of September 3, 2022 or May 28, 2022.

Contingencies

2 unchanged sentences

Short-Term Borrowings and Long-Term Debt

Short-term borrowings and long-term debt as of February 26, 2022 and May 29, 2021 consisted of the following:

(In millions) February 26, 2022 May 29, 2021

Debt securities, 4.95 %, due May 20, 2030

Syndicated revolving line of credit, due August 2024 — 225.0

Short-term borrowings and long-term debt as of September 3, 2022 and May 28, 2022 consisted of the following:

(In millions) September 3, 2022 May 28, 2022

Syndicated revolving line of credit, due July 2026 $ 523.9 $ 413.0

4 unchanged sentences

Unamortized discount and issuance costs ( 18.6 ) ( 19.4 )

Current portion of long-term debt ( 28.8 ) ( 2.2 )

Current debt ( 28.7 ) ( 29.3 )

Long-term debt $ 1,484.4 $ 1,379.2

As of May 29, 2021, the Company's syndicated revolving line of credit provided 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.

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

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 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 term 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 variable interest

The 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 three months ended February 26, 2022 in the amount of $ 5.0 million and $ 1.6 million, respectively.

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.

In the three months ended August 28, 2021, the Company repaid $ 64 million of private placement notes due May 20, 2030 and 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 three months ended September 3, 2022 in the amount of $ 5.0 million and $ 1.6 million, respectively.

Available borrowings under the syndicated revolving line of credit were as follows for the periods indicated:

(In millions) February 26, 2022 May 29, 2021

(In millions) September 3, 2022 May 28, 2022

Syndicated revolving line of credit borrowing capacity $ 725.0 $ 725.0

7 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 current debt, within the caption “Short-term borrowings and current portion of long-term debt”.

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 Condensed Consolidated Balance Sheets as the amounts have been accounted for by the Company as current debt, within “Short-term borrowings and current portion of long-term debt”.

Accumulated Other Comprehensive Loss

The following table provides an analysis of the changes in accumulated other comprehensive loss for the nine months ended February 26, 2022 and February 27, 2021:

(In millions) Cumulative Translation Adjustments Pension and Other Post-retirement Benefit Plans Unrealized

Gains on Available-for-sale Securities Interest Rate Swap Agreements Accumulated Other Comprehensive Loss

The following table provides an analysis of the changes in accumulated other comprehensive loss for the three months ended September 3, 2022 and August 28, 2021:

(In millions) Cumulative Translation Adjustments Pension and Other Post-retirement Benefit Plans Interest Rate Swap Agreement Accumulated Other Comprehensive Loss

Balance at May 28, 2022 $ ( 93.9 ) $ ( 36.9 ) $ 23.7 $ ( 107.1 )

4 unchanged sentences

Net current period other comprehensive (loss) income ( 72.5 ) 0.4 14.3 ( 57.8 )

Balance at February 26, 2022 $ ( 50.6 ) $ ( 44.8 ) $ — $ 2.4 $ ( 93.0 )

Balance at September 3, 2022 $ ( 166.4 ) $ ( 36.5 ) $ 38.0 $ ( 164.9 )

Balance at May 29, 2021 $ ( 3.9 ) $ ( 50.4 ) $ ( 10.8 ) $ ( 65.1 )

4 unchanged sentences

Net current period other comprehensive income (loss) ( 16.5 ) 2.3 ( 1.0 ) ( 15.2 )

Balance at February 27, 2021 $ ( 13.2 ) $ ( 55.5 ) $ — $ ( 11.1 ) $ ( 79.8 )

Balance at August 28, 2021 $ ( 20.4 ) $ ( 48.1 ) $ ( 11.8 ) $ ( 80.3 )

Operating Segments

MillerKnoll, Inc.

and Subsidiaries 23

Effective as of May 29, 2022, the beginning of fiscal year 2023, the Company implemented an organizational change that resulted in a change in the reportable segments.

1 unchanged sentence

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.

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.

Intersegment sales are eliminated within each segment, with the exception of sales to and from the Knoll segment, which are presented as intersegment eliminations.

• The reportable segments now consist of three segments:

Americas Contract ("Americas"), International Contract & Specialty ("International & Specialty"), and Global Retail ("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 were previously reported within the Knoll segment have been moved to the Global Retail segment.

• The activities related to the manufacture and sale of furniture products in the Americas for the Knoll, Muuto and Datesweiser brands that were previously reported within the Knoll segment have been moved to the Americas Contract segment.

• The activities related to the manufacture and sale of furniture products in geographies other than the Americas for the Knoll and Muuto brands have been moved to the International Contract & Specialty segment.

• The activities related to manufacture and sale of products for the Maharam brand have been moved from the Americas Contract segment to the International Contract & Specialty segment, along with the activities of Holly Hunt, Spinneybeck, Knoll Textiles, and Edelman, which were previously reported within the Knoll segment.

The Americas Contract segment includes the operations associated with the design, manufacture and sale of furniture products directly or indirectly through an independent dealership network for office, healthcare, and educational environments throughout North and South America.

The International Contract and Specialty segment includes the operations associated with the design, manufacture and sale of furniture products, indirectly or directly through an independent dealership network in Europe, the Middle East, Africa and Asia-Pacific as well as the global operations of the Specialty brands, which include Holly Hunt, Spinneybeck, Maharam, Edelman, and Knoll Textiles.

The Global Retail segment includes global 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, and physical retail stores.

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.

2 unchanged sentences

The following is a summary of certain key financial measures for the respective periods indicated:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Americas Contract $ 365.1 $ 290.7 $ 1,052.0 $ 1,008.0

International Contract 123.4 98.0 347.4 293.5

Global Retail 212.8 201.8 635.4 542.1

Knoll 336.9 — 829.5 —

Intersegment Eliminations ( 8.7 ) — ( 18.8 ) —

Three Months Ended

(In millions) September 3, 2022 August 28, 2021

Americas $ 537.4 $ 381.3

International & Specialty 272.5 167.1

Retail 268.9 241.3

Total $ 1,078.8 $ 789.7

Operating Earnings (Loss):

Americas Contract $ 2.7 $ 14.6 $ 18.5 $ 111.6

International Contract 12.5 11.0 40.8 40.1

Global Retail 24.0 39.9 74.2 100.7

Knoll 1.5 — ( 72.8 ) —

Americas $ 20.4 $ ( 10.6 )

International & Specialty 27.9 6.6

Retail 17.8 26.4

Corporate ( 15.3 ) ( 75.0 )

5 unchanged sentences

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.

Severance and employee benefit costs primarily relate to cash severance, non-cash severance, including accelerated equity award compensation expense.

The Company also incurs expenses that are an integral component of, and directly attribute to, our restructuring and integration activities, which do not qualify as exit and disposal costs under U.S.

7 unchanged sentences

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).

severance and employee benefits (cash severance, 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 merger.

For the nine months ended February 26, 2022, we have incurred $ 101.7 million of costs related to the Knoll Integration including:

$ 49.9 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 $ 22.9 million of other integration costs.

MillerKnoll, Inc.

and Subsidiaries 25

For the three months ended September 3, 2022, we incurred $ 4.6 million of costs related to the Knoll Integration including:

$ 1.2 million of severance and employee benefit costs, $ 1.4 million of lease termination fees, and $ 2.0 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 nine months ended February 26, 2022:

GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the three months ended September 3, 2022:

(In millions) Severance and Employee Benefit Exit and Disposal Activities Total

3 unchanged sentences

Non-cash costs ( 0.2 ) — ( 0.2 )

February 26, 2022 $ 6.9 $ — $ 6.9

The Company's expects that a substantial portion of the liability for the Knoll Integration as of February 26, 2022 to be paid in fiscal year 2022.

September 3, 2022 $ 0.9 $ — $ 0.9

The Company's expects that a substantial portion of the liability for the Knoll Integration as of September 3, 2022 to be paid in fiscal year 2023.

The following is a summary of integration expenses by segment for the periods indicated:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Three Months Ended

(In millions) September 3, 2022 August 28, 2021

Americas Contract $ 2.9 $ 1.0

International Contract 0.4 — 1.1 —

Retail — — 0.5 —

Knoll 2.6 — 59.0 —

International Contract & Specialty 0.5 —

Corporate 1.0 54.6

1 unchanged sentence

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 C hina.

The plan is expected to generate cost savings of approxima tely $ 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.

No future restructuring costs related to the plan are expected as the plan is substantially complete.

The office building and related assets in China were sold in the first quarter of fiscal 2021, resulting in a gain of approximately $ 3.4 million.

The 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 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.

In the second quarter of fiscal 2020, the Company initiated a reorganization of the Global Sales and Product teams.

The reor ganization activities occurred primarily in the North America business with additional costs incurred internationally.

To dat e, the Company has recorded a total of $ 2.6 million in pre-tax restructuring expense related to this plan.

The reorganiz ation is complete and no future costs related to this plan are expected.

The following table provides an analysis of the changes in the restructuring costs reserve for the above plans for the nine months ended February 26, 2022:

(In millions) Severance and Employee-Related Exit or Disposal Activities Total

May 29, 2021 $ 0.9 $ 0.6 $ 1.5

Restructuring Costs — — —

Amounts Paid ( 0.5 ) — ( 0.5 )

February 26, 2022 $ 0.4 $ 0.6 $ 1.0

In the fourth quarter of fiscal 2020, the Company announced a restructuring plan (“May 2020 restructuring plan") to substantially reduce expenses in response to the impact of the COVID-19 pandemic and related restrictions.

These activities included voluntary and involuntary reductions in its North American and International workforces.

Combined, these actions resulted in the elimination of approximately 400 full-time positions throughout the Company in various businesses and functions.

As the result of these actions, the Company projects an annualized expense reduction of approximately $ 40 million.

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.

The following table provides an analysis of the changes in the restructuring cost reserve for the May 2020 restructuring plan for the nine months ended February 26, 2022:

During the first quarter of fiscal 2023, the Company recognized restructuring charges associated with involuntary workforce reductions within the Global Retail segment.

As a result of this action the Company incurred severance and related charges of $ 0.5 million.

The following table provides an analysis of the changes in the restructuring cost reserve for the three months ended September 3, 2022:

(In millions) Severance and Employee-Related

2 unchanged sentences

Amounts Paid —

February 26, 2022 $ 0.3

September 3, 2022 $ 0.5

The following is a summary of restructuring expenses by segment for the periods indicated:

Three Months Ended Nine Months Ended

(In millions) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Three Months Ended

(In millions) September 3, 2022 August 28, 2021

Americas Contract $ — $ —

International Contract — 0.1 — ( 1.1 )

Global Retail — — — —

Knoll — — — —

International Contract & Specialty — —

Total $ 0.5 $ —

Variable Interest Entities

During the three months ended February 26, 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 February 26, 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 entity 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.

MillerKnoll, Inc.

and Subsidiaries 27

The Company entered into 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 notes receivable was $ 5.8 million and $ 1.2 million as of September 3, 2022 and May 28, 2022 respectively.

This carrying value of long-term notes receivable 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.

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-Q

Item 1. Financial Statements