What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-07-30 compared with 2023-07-26 · 314 added, 317 removed, 1315 unchanged (32% of the section changed)

2 unchanged sentences

Consolidated Statements of Comprehensive Income

(In millions, except per share data) June 3, 2023 May 28, 2022 May 29, 2021

(In millions, except per share data) June 1, 2024 June 3, 2023 May 28, 2022

Net sales $ 3,628.4 $ 4,087.1 $ 3,946.0

11 unchanged sentences

76.2 74.0 37.8

Interest and other investment income 2.8 1.6 2.1

Interest and other investment (income) expense ( 6.1 ) ( 2.8 ) ( 1.6 )

Other (income) expense, net ( 2.6 ) ( 0.3 ) 12.2

1 unchanged sentence

Income tax expense 14.7 4.5 11.1

Equity (loss) earnings from nonconsolidated affiliates, net of tax ( 0.8 ) — 0.3

Equity (loss) earnings from nonconsolidated affiliate, net of tax ( 0.4 ) ( 0.8 ) —

Net earnings (loss) 84.6 46.1 ( 19.7 )

8 unchanged sentences

Unrealized gains on interest rate swap agreement 3.6 19.0 34.5

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

Other comprehensive income (loss), net of tax 2.4 12.0 ( 42.0 )

5 unchanged sentences

Consolidated Balance Sheets

(In millions, except share and per share data) June 3, 2023 May 28, 2022

(In millions, except share and per share data) June 1, 2024 June 3, 2023

Current Assets:

4 unchanged sentences

Prepaid expenses 66.5 92.7

Assets held for sale 3.5 —

Other current assets

24 unchanged sentences

Stockholders' Equity:

Preferred stock, no par value ( 10,000,000 shares authorized, no ne issued)

Preferred stock, no par value ( 10,000,000 shares authorized, none issued)

Common stock, $ 0.20 par value ( 240,000,000 shares authorized, 70,377,692 and 75,698,670 shares issued and outstanding in 2024 and 2023, respectively)

11 unchanged sentences

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

Net earnings — — — 174.6 — — 174.6

Other comprehensive income, net of tax — — — — 68.9 — 68.9

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

Exercise of stock options 86,238 — 2.6 — — — 2.6

Restricted and performance stock units released 114,103 — 0.2 — — — 0.2

Employee stock purchase plan issuances 71,468 — 2.1 — — — 2.1

Repurchase and retirement of common stock ( 38,932 ) — ( 0.9 ) — — — ( 0.9 )

Directors' fees 3,013 — 0.1 — — — 0.1

Deferred compensation plan — — — — — 0.1 0.1

Dividends declared ($ 0.56 per share)

— — — ( 33.4 ) — — ( 33.4 )

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 loss — — — ( 27.1 ) — — ( 27.1 )

12 unchanged sentences

NCI Adjustment — — 0.5 — — — 0.5

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

Redemption Value Adjustment — — — ( 41.6 ) — — ( 41.6 )

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

11 unchanged sentences

Director's fees 27,785 — 0.6 — — — 0.6

NCI Valuation — — — ( 1.9 ) — — ( 1.9 )

Redemption Value Adjustment — — — ( 1.9 ) — — ( 1.9 )

Dividends declared ($ 0.75 per share)

2 unchanged sentences

June 3, 2023 75,698,670 $ 15.1 $ 836.5 $ 676.1 $ ( 95.1 ) $ — $ 1,432.6

Net earnings — — — 82.3 — — 82.3

Other comprehensive income, net of tax — — — — 2.4 — 2.4

Stock-based compensation expense ( 983 ) — 20.7 — — — 20.7

Exercise of stock options 74,096 — 1.7 — — — 1.7

Restricted and performance stock units released 457,965 0.1 0.9 — — — 1.0

Employee stock purchase plan issuances 139,211 0.1 2.9 — — — 3.0

Repurchase and retirement of common stock, including excise tax ( 6,022,646 ) ( 1.2 ) ( 138.2 ) — — — ( 139.4 )

Director's fees 31,379 — 0.8 — — — 0.8

Redemption Value Adjustment — — — 34.5 — — 34.5

Dividends declared ($ 0.75 per share)

— — — ( 55.0 ) — — ( 55.0 )

Other — — — 0.5 — — 0.5

June 1, 2024 70,377,692 $ 14.1 $ 725.3 $ 738.4 $ ( 92.7 ) $ — $ 1,385.1

MillerKnoll, Inc.

Consolidated Statements of Cash Flows

(In millions) June 3, 2023 May 28, 2022 May 29, 2021

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

Cash Flows from Operating Activities:

3 unchanged sentences

Amortization expense 37.6 39.8 78.6

Loss (gain) on sales of property and dealers — ( 1.0 ) —

Loss on sale of equity method investment 0.4 — —

Loss on sale of property and dealers — — ( 1.0 )

Deferred taxes ( 38.8 ) ( 45.3 ) ( 21.7 )

5 unchanged sentences

Amortization of deferred financing costs 4.6 4.6 4.2

(Increase) decrease in long-term assets ( 4.7 ) ( 1.6 ) 1.2

(Decrease) increase in long-term liabilities ( 1.8 ) ( 2.1 ) 16.0

Decrease (increase) in long-term assets 2.4 ( 4.7 ) ( 1.6 )

(Decrease) in long-term liabilities ( 3.6 ) ( 1.8 ) ( 2.1 )

Changes in current assets and liabilities:

7 unchanged sentences

Cash Flows from Investing Activities:

Notes receivable issued ( 5.1 ) ( 1.2 ) ( 2.0 )

Marketable securities purchases — — ( 5.9 )

Advances of notes receivable ( 14.7 ) ( 5.1 ) ( 1.2 )

Collection of notes receivable 2.8 — —

Marketable securities sales — — 7.7

3 unchanged sentences

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

Proceeds from the sale of equity method investment 3.5 — —

Other, net 0.5 ( 1.9 ) 1.5

14 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 0.3 ) ( 6.4 ) ( 21.7 )

Net (Decrease) In Cash and Cash Equivalents ( 6.8 ) ( 166.1 ) ( 57.6 )

Net Increase (Decrease) In Cash and Cash Equivalents 6.9 ( 6.8 ) ( 166.1 )

Cash and cash equivalents, Beginning of Year 223.5 230.3 396.4

19 unchanged sentences

Note 15 Accumulated Other Comprehensive Loss

Note 16 Restructuring Expenses

Note 16 Restructuring and Integration Expense

Note 17 Variable Interest Entities

9 unchanged sentences

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, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, Maars® Living Walls, Maharam®, Muuto®, NaughtOne®, and Spinneybeck®|FilzFelt®.

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

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

1 unchanged sentence

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

The fiscal year ended June 3, 2023, contained 53 weeks and the fiscal years ended May 28, 2022 and May 29, 2021 contained 52 weeks.

The fiscal year ended June 1, 2024, contained 52 weeks;

the fiscal year ended June 3, 2023, contained 53 weeks;

and the fiscal year ended May 28, 2022, 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 loss of $ 4.8 million, $ 3.3 million, and $ 0.8 million for the fiscal years ended June 3, 2023, May 28, 2022, and May 29, 2021, respectively.

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 $ 3.0 million, $ 4.8 million, and $ 3.3 million for the fiscal years ended June 1, 2024, June 3, 2023, and May 28, 2022, respectively.

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

Cash Equivalents

Cash and Cash Equivalents

Certain of the Company’s subsidiaries participate in a notional cash pooling arrangement to manage global liquidity requirements.

As part of a master netting arrangement, the participants combine their cash balances in pooling accounts at the same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held by another participant.

Under the terms of the master netting arrangement, the financial institution has the right, ability, and intent to offset a positive balance in one account against an overdrawn amount in another account.

Amounts in each of the accounts are unencumbered and unrestricted with respect to use.

As such, the net cash balance related to this pooling arrangement is included in Cash and cash equivalents in the accompanying Consolidated Balance Sheets.

The Company’s net cash pool position consisted of the following:

(In millions) June 1, 2024

Gross cash position $ 26.6

cash borrowings ( 23.0 )

Net cash position $ 3.6

The Company holds cash equivalents as part of its cash management function.

Cash equivalents include money market funds and time deposit investments with original maturities of less than three months.

The carrying value of cash equivalents, which approximates fair value, totaled $ 40.8 million an d $ 43.1 million as of June 3, 2023 and May 28, 2022 , respectively.

The carrying value of cash equivalents, which approximates fair value, totaled $ 55.9 million an d $ 40.8 million as of June 1, 2024 and June 3, 2023 , respectively.

All cash equivalents are high-credit quality financial instruments and the amount of credit exposure to any one financial institution or instrument is limited.

Marketable Securities

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

These investments were liquidated during fiscal year 2022 resulting in a cash in-flow in that year of approximately $ 7.7 million.

Allowances for Credit Losses

2 unchanged sentences

An accounts receivable balance is considered past due when payment is not received within the stated terms.

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 also used.

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 and 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.

12 unchanged sentences

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.

Inventory cost is determined using the first in, first out (FIFO) method.

Inventory cost is primarily determined using the first in, first out (FIFO) method.

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

4 unchanged sentences

Goodwill $ 197.4 $ 111.2 $ 181.1 $ 489.7

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

Acquisition of Knoll 346.0 226.8 330.7 903.5

Foreign currency translation adjustments 23.7 ( 33.7 ) ( 31.2 ) ( 41.2 )

2 unchanged sentences

$ 530.1 $ 304.3 $ 391.8 $ 1,226.2

Balance at May 28, 2022

Balance at June 3, 2023

Goodwill $ 566.8 $ 304.3 $ 480.6 $ 1,351.7

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

Acquisition of Knoll 346.0 226.8 330.7 903.5

Foreign currency translation adjustments ( 1.7 ) ( 1.3 ) ( 1.5 ) ( 4.5 )

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

Net goodwill as of May 28, 2022

Net goodwill as of June 3, 2023

$ 528.4 $ 303.0 $ 390.3 $ 1,221.7

10 unchanged sentences

Acquisition of Knoll ( 19.7 )

Balance at May 28, 2022 $ 501.0

Balance at June 3, 2023 $ 480.7

Foreign currency translation adjustments 1.6

7 unchanged sentences

Each of the reporting units was reviewed for impairment using a qualitative assessment as of March 31, 2024.

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

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

Testing Goodwill for Impairment.

The Company concluded it to be more likely than not that their estimated fair values are greater than their respective carrying values.

In connection with the segment reorganization, 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.

During the third quarter of fiscal year 2023, the Company assessed changes in circumstances that occurred during the quarter to determine if it was more likely than not that the fair values of any reporting units were below their carrying amounts.

Although our annual impairment test is performed during the fourth quarter, we perform this qualitative assessment each interim reporting period.

While there was no single determinate event, the consideration in totality of several factors that developed during the third quarter of fiscal year 2023 led us to conclude that it was more likely than not that the fair value of the Global Retail reporting unit was below its carrying amount.

These factors included:

(i) the decision to discontinue stand-alone operations of the Fully brand and (ii) the assessment of our third quarter results, for which the performance of the Global Retail reporting unit was below management's expectations.

Accordingly, the Company performed an interim quantitative impairment analysis as of March 4, 2023 to determine the fair value of the Global Retail reporting unit as compared to the carrying value.

For the Global Retail reporting unit, the Company elected to proceed directly to the quantitative test.

The Company performed the quantitative impairment analysis of the Global Retail reporting unit as of March 31, 2024, to determine the fair value of the Global Retail reporting unit as compared to the carrying value.

The Company utilized a weighting of the income approach and the market approach to estimate the fair value of the Global Retail reporting unit.

In performing the quantitative impairment test, the Company determined that the fair value of the Global Retail reporting unit exceeded the carrying amount and, as such, the reporting unit was not impaired.

The Company determined that the Global Retail reporting unit exceeded its carrying value by 1 % and therefore has a heightened risk of future impairments if any assumptions, estimates or market factors change in the future.

The Company determined that the Global Retail reporting unit exceeded its carrying value by 37 % and therefore does not have a heightened risk of future impairments if any assumptions, estimates or market factors change in the future.

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.

2 unchanged sentences

The Company employed a market-based approach in selecting the discount rate used in our analysis.

The discount rate selected represents the 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 rate selected in the quantitative assessment is appropriate in that exceeds the estimated weighted average cost of capital for our business as a

The Company believes the discount rate selected in the quantitative assessment is appropriate in that exceeds 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.

The Company evaluated the sensitivity of changes in forecasted sales, operating margin and the discount rate for the Global Retail reporting unit.

Reducing the Global Retail reporting unit's forecasted sales by 5 % in all years, and leaving all other assumptions static, would result in an impairment of $ 26.0 million.

A decrease in the operating margin of 100 basis points would result in an impairment of $ 60.0 million.

An increase in the discount rate of 100 basis points would result in an impairment of $ 46.0 million.

Reducing the Global Retail reporting unit's forecasted sales by 5 % in all years, and leaving all other assumptions static, would not result in impairment.

A decrease in the operating margin of 100 basis points would not result in impairment.

An increase in the discount rate of 100 basis points would not result in impairment.

The Company evaluates indefinite-lived trade name intangible assets for impairment using a qualitative assessment annually.

1 unchanged sentence

An impairment charge is recorded if the carrying amount of an indefinite-lived intangible asset exceeds the estimated fair value on the measurement date.

During fiscal 2023, the Company determined through a qualitative assessment that the Knoll trade name carrying value was more then likely above its fair value.

As a result, the Company performed a quantitative assessment to determine the fair value and as a result recognized a $ 19.7 million non-cash impairment charge to the indefinite-lived trade name.

The carrying value of the Knoll trade name as of the measurement date was $ 173.0 million.

The fair value of the Knoll trade name as of the measurement date is $ 153.3 million.

In performing this quantitative assessment, we estimated the fair value using the relief-from-royalty method which requires assumptions related to:

In fiscal 2024, the Company performed quantitative assessments in testing the Knoll product brand and Muuto brand indefinite-lived intangible assets for impairment, which resulted in the carrying values of the trade names exceeding their fair values by $ 8.9 million and $ 7.9 million, respectively.

Accordingly, impairment charges of $ 16.8 million in total were recognized.

The carrying value of the Knoll trade name as of the measurement date was $ 153.3 million and the fair value of the Knoll trade name as of the measurement date was $ 144.4 million.

The carrying value of the Muuto trade name as of the measurement date was $ 88.4 million and the fair value of the Muuto trade name as of the measurement date was $ 80.5 million.

If the residual cash flows related to these trade names were to decline in future periods, the Company may need to record additional impairment charges.

In completing our annual indefinite-lived trade name impairment test, the respective fair values were estimated using a relief-from-royalty approach, which requires assumptions related to the following:

• forecasted revenue growth rate,

1 unchanged sentence

• a market participant discount rate based on a weighted-average cost of capital.

The assumptions used reflect management’s best estimate;

The assumptions used reflect management’s best estimates;

however, actual results could differ from our estimates.

In completing our annual indefinite-lived trade name impairment test, fair value of the Knoll trade name was estimated using a discount rate of 12.0 %, royalty rate of 2.00 % and long-term growth rate of 2.5 %.

The Company’s estimates of the fair value of its Knoll indefinite-lived intangible asset is sensitive to changes in the key assumptions above as well as projected financial performance.

In completing our annual indefinite-lived trade name impairment test, the fair values of the Knoll and Muuto trade names were both estimated using a discount rate of 12.0 %.

The, royalty rate used for the Knoll and Muuto trade names were 2.0 % and 4.5 %, respectively.

The long-term growth rate used in the valuation of the Knoll and Muuto trade names was 2.5 % and 3.0 %, respectively.

The Company’s estimates of the fair value of its Knoll and Muuto indefinite-lived intangible assets are sensitive to changes in the key assumptions above as well as projected financial performance.

Therefore, a sensitivity analysis was performed on certain key assumptions.

Keeping all other assumptions constant, a 10 % decrease in forecasted sales at June 3, 2023 would have resulted in $ 15.3 million of additional pre-tax impairment charges.

For the Knoll trade name, keeping all other assumptions constant, a 10 % decrease in forecasted sales at March 31, 2024, would have resulted in $ 14.0 million of additional pre-tax impairment charges;

a decrease in the royalty rate of 25 basis points would result in an additional $ 18.0 million of impairment charges;

Keeping all other assumptions constant, a 100 basis point increase in the discount rate would have resulted in an additional $ 15.0 million of impairment charges.

If the estimated cash flows related to the Company's indefinite-lived intangibles were to decline in future periods, the Company may need to record an impairment charge.

and a 100 basis point increase in the discount rate would have resulted in an additional $ 14.0 million of impairment charges.

For the Muuto trade name, keeping all other assumptions constant, a 10 % decrease in forecasted sales at March 31, 2024 would have resulted in $ 8.0 million of additional pre-tax impairment charges;

a decrease in the royalty rate of 25 basis points would have resulted in an additional $ 4.5 million of impairment charges;

and a 100 basis point increase in the discount rate would have resulted in an additional $ 8.0 million of impairment charges.

During fiscal 2023, the Company determined through a qualitative assessment that the Knoll trade name carrying value was more than likely above its fair value.

As a result, the Company performed a quantitative assessment to determine the fair value and as a result recognized a $ 19.7 million non-cash impairment charge to the indefinite-lived trade name.

The carrying value of the Knoll trade name as of the measurement date was $ 173.0 million.

The fair value of the Knoll trade name as of the measurement date was $ 153.3 million.

The assumptions used reflect management’s best estimate;

however, actual results could differ from our estimates.

In completing our annual indefinite-lived trade name impairment tests, the fair value of the Knoll trade name was estimated using a discount rate of 12.0 %, royalty rate of 2.0 % and long-term growth rate of 2.5 %.

The Company’s estimates of the fair value of its Knoll indefinite-lived intangible asset are sensitive to changes in the key assumptions above as well as projected financial performance.

Therefore, a sensitivity analysis was performed on certain key assumptions.

If the estimated cash flows related to the Company's indefinite-lived intangibles were to decline in future periods, the Company may need to record additional impairment charges.

Property, Equipment and Depreciation

7 unchanged sentences

The following table summarizes our property as of the dates indicated:

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Land and improvements $ 55.0 $ 55.1

4 unchanged sentences

Property and equipment, net $ 492.0 $ 536.3

As of the end of fiscal 2023, outstanding commitments for future capital purchases approximated $ 44.8 million.

As of the end of fiscal 2024, outstanding commitments for future capital purchases approxim ated $ 53.7 million.

Other Long-Lived Assets

8 unchanged sentences

Accumulated amortization 46.9 125.4 12.5 28.3 10.3 223.4

Impairment 11.6 — — — — 11.6

Net $ 15.7 $ 231.2 $ 29.6 $ — $ 2.8 $ 279.3

2 unchanged sentences

Accumulated amortization 30.8 95.8 9.2 28.4 9.4 173.6

Impairment 11.6 — — — — 11.6

Net $ 17.7 $ 259.3 $ 32.8 $ — $ 3.3 $ 313.1

The Company amortizes these assets over their remaining useful lives using the straight-line method over periods ranging from 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 3.6 and the weighted-average remaining useful life of the customer relationships is 9.6 .

The Company amortizes these assets over their remaining useful lives using the straight-line method over periods ranging from 3 years 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 3.1 years and the weighted-average remaining useful life of the customer relationships is 8.6 years .

Estimated amortization expense on existing amortizable intangible assets as of June 1, 2024, for each of the succeeding five fiscal years, is as follows:

(In millions)

In the fourth quarter of fiscal 2024, the decision was made to cease the use of certain leased locations resulting in impairment charges of $ 5.5 million recognized for the right of use assets associated with these locations.

In the second quarter of fiscal 2024, a manufacturing facility located in Wisconsin met the criteria to be classified as an asset held for sale.

The decision to sell this facility was made as a result of facility integration activities performed in connection with the integration of Knoll.

In the fourth quarter of fiscal 2024, it was determined that the carrying value of these assets exceeded their fair value and an impairment charge of $ 1.0 million was recognized.

In the third quarter of fiscal 2023, the decision was made to cease operating Fully as a stand-alone brand and sales channel and instead sell certain Fully products through other channels of the Global Retail business.

As a result of this decision, the

Company recorded asset Impairment charges related to Other Long-Lived Assets of $ 21.5 million in the third quarter of fiscal 2023.

As a result of this decision, the Company recorded asset Impairment charges related to Other Long-Lived Assets of $ 21.5 million in the third quarter of fiscal 2023.

Of this amount, $ 11.6 million of the impairment related to the Fully trade name.

The table below provides information related to the impairments recognized during the third quarter of fiscal 2023.

In fiscal 2022, the Company recorded a non-cash impairment charge of $ 15.5 million related to the discontinued use of a long-lived asset that was a direct result of integration activities associated with the Knoll acquisition.

The table below provides information related to the impairments recognized in fiscal 2024 and fiscal 2023.

These charges are included in "Impairment charges" and "Cost of sales" within the Consolidated Statements of Comprehensive Income.

(In millions) Impairment Charge

(In millions) June 1, 2024 June 3, 2023

Property and equipment $ 1.0 $ 3.8

1 unchanged sentence

Trade name — 11.6

Total $ 6.5 $ 21.5

Self-Insurance

8 unchanged sentences

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 June 3, 2023 and May 28, 2022 was $ 13.2 million and $ 14.7 million, respectively.

The value of the liability as of June 1, 2024 and June 3, 2023 was $ 12.0 million and $ 13.2 million, respectively.

The actuarial valuations are based on historical information along with certain assumptions about future events.

Changes in assumptions for such matters as legal actions, medical costs, payment lag times and changes in actual experience could cause these estimates to change.

The general, auto, and workers' compensation liabilities are managed through the Company's wholly-owned insurance captive.

Research, Development and Other Related Costs

2 unchanged sentences

R&D costs also include the enhancement of existing products or production processes and the implementation of such through design, testing of product alternatives or construction of prototypes.

R&D costs included in Design and research expense in the accompanying Consolidated Statements of Comprehensive Income are $ 67.6 million, $ 71.1 million and $ 50.8 million, in fiscal 2023, 2022, and 2021, respectively.

R&D costs included in Design and research expense in the accompanying Consolidated Statements of Comprehensive Income were $ 62.0 million, $ 67.6 million and $ 71.1 million, in fiscal 2024, 2023, and 2022, respectively.

Royalty payments made to designers of the Company's products as the products are sold are variable costs based on product sales.

44 unchanged sentences

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.

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.

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These assumptions require judgment about forecasts of future taxable income.

The Organisation for Economic Cooperation and Development ("OECD") has issued new regulations in connection with a global minimum tax regime ("Pillar Two") which is part of the OECD’s broader plan to mitigate tax base erosion and profit shifting by large multinational enterprises ("MNE").

The Pillar Two regulations are effective for income tax years commencing after January 1, 2024 and will apply to MNEs with revenues of at least EUR 750 million.

Under the provisions, qualifying MNE groups would pay a 15 percent minimum tax in each of the jurisdictions in which they operate.

The Pillar Two guidance includes transitional Country-by-Country Reporting safe harbor rules which intends to mitigate the complexity and compliance for MNEs to avoid both completing a full global anti-base erosion model and paying a top-up tax for jurisdictions where they are eligible for one of three safe harbor tests:

(1) de minimis;

(2) simplified effective tax rate;

and (3) routine profits.

Based on the safe harbor calculations using both the simplified effective tax rate and de minimis rules, management does not currently expect Pillar Two regulations to have a material impact on the Company’s financial results in fiscal year 2025 and beyond.

Stock-Based Compensation

28 unchanged sentences

Recently Issued Accounting Standards Not Yet Adopted

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.

ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

In November 2023, the FASB issued this ASU to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

ASU 2023-09, Income Taxes (Topic 740):

Improvements to Tax Disclosures.

In December 2023, the FASB issued this ASU which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

The update will be effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

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.

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• 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 International Contract & Specialty segments.

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 Global Retail segment, as well as customer purchase orders within the Americas Contract and International Contract & Specialty segments.

For contracts that include a single performance obligation, the Company records revenue at the point in time when control has transferred to the customer.

9 unchanged sentences

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

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Single performance obligation

15 unchanged sentences

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

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Americas Contract:

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

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

The prior year has been restated to reflect these changes.

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

3 unchanged sentences

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) June 3, 2023 May 28, 2022 May 29, 2021

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

United States $ 2,570.0 $ 2,918.0 $ 2,818.4

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

During the twelve months ended June 3, 2023, the Company recognized net sales of $ 117.7 million rel ate d to customer deposits that were included in the balance sheet as of May 28, 2022.

During the twelve months ended June 1, 2024, the Company recognized net sales of $ 82.2 million related to customer deposits that were included in the balance sheet as of June 3, 2023.

Acquisitions and Divestitures

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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.

1 unchanged sentence

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 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 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

Contract Furniture Dealership Divestiture

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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) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Finished goods and work in process $ 314.3 $ 357.2

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Investments in Nonconsolidated Affiliates

The Company has certain investments in entities that are accounted for using the equity method (“nonconsolidated affiliates”).

The investments are included in Other noncurrent assets in the Consolidated Balance Sheets and the equity earnings are included in Equity (loss) earnings from nonconsolidated affiliates, net of tax in the Consolidated Statements of Comprehensive Income.

Refer to the tables below for the investment balances that are included in the Consolidated Balance Sheets and for the equity earnings that are included in the Consolidated Statements of Comprehensive Income.

(In millions) June 3, 2023 May 28, 2022

Investments in nonconsolidated affiliates $ 8.5 $ 9.9

(In millions) June 3, 2023 May 28, 2022 May 29, 2021

Equity (loss) earnings from nonconsolidated affiliates, net of tax $ ( 0.8 ) $ — $ 0.3

The Company had an ownership interest in two nonconsolidated affiliates at June 3, 2023.

The Company has an investment in an entity that is accounted for using the equity method (“nonconsolidated affiliate”).

The investment is included in Other noncurrent assets in the Consolidated Balance Sheets and the equity earnings are included in Equity (loss) earnings from nonconsolidated affiliate, net of tax in the Consolidated Statements of Comprehensive Income.

Refer to the tables below for the investment balance that is included in the Consolidated Balance Sheets and for the equity earnings that are included in the Consolidated Statements of Comprehensive Income.

(In millions) June 1, 2024 June 3, 2023

Investments in nonconsolidated affiliate $ 2.2 $ 8.5

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

Equity (loss) earnings from nonconsolidated affiliate, net of tax $ ( 0.4 ) $ ( 0.8 ) $ —

The Company had an ownership interest in one nonconsolidated affiliate at June 1, 2024.

Refer to the Company's ownership percentages shown below:

Ownership Interest June 3, 2023 May 28, 2022

Ownership Interest June 1, 2024 June 3, 2023

Kvadrat Maharam Pty Limited 50.0 % 50.0 %

Global Holdings Netherlands B.V.

(Maars) 48.2 % 48.2 %

Kvadrat Maharam

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This amount represented the difference between the price that the Company paid to acquire 48.2 % of the outstanding equity and the carrying value of the net assets of Maars.

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.

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

In the fourth quarter of fiscal 2023, the Company determined the fair value was less than the carrying value and concluded the impairment was other-than-temporary and recorded an impairment charge of approximately $ 1.0 million within Other income and expense in the Consolidated Statements of Comprehensive Income.

At June 3, 2023, the Company's investment value in Maars is $ 1.0 million more than the Company's proportionate share of the underlying net assets, the total of which is being amortized over the remaining useful lives of the assets.

On October 30, 2023, the Company sold its 48.2 % investment in Global Holdings Netherlands B.V.

for total purchase consideration of $ 5.9 million.

As part of this transaction, we received cash proceeds of $ 3.5 million at closing, a $ 1.4 million receivable under a vendor loan, and $ 0.9 million of cash held in an escrow account to secure the representations and warranties made to the purchaser.

As a result of the sale, a loss of $ 0.4 million was recorded in Equity (loss) income from nonconsolidated affiliates, net of tax during the twelve months ended June 1, 2024.

Transactions with Nonconsolidated Affiliates

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

(In millions) June 3, 2023 May 28, 2022 May 29, 2021

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

Sales to nonconsolidated affiliates $ 2.1 $ 2.8 $ 0.7

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Balances due to or due from nonconsolidated affiliates were as follows for the periods presented below:

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Receivables from nonconsolidated affiliates $ 0.3 $ 0.5

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Long-term debt consisted of the following obligations:

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Syndicated revolving line of credit, due July 2026 $ 390.0 $ 426.7

2 unchanged sentences

Supplier financing program 2.0 2.1

Finance lease liability

Total debt $ 1,347.8 $ 1,414.4

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During 2022, t he Company repaid $ 64 million of private placement notes due May 20, 2030, and recognized a loss of approximately $ 13.4 million on extinguishment of the debt, which represented the premium on early redemption.

The Company made principal payments on term loans "A" and "B" during the year ended June 3, 2023 in the amount of $ 20.0 million and $ 6.3 million, respectively and during the year ended May 28, 2022 in the amount of $ 10.0 million and $ 3.1 million, respectively.

The Company made principal payments on term loans "A" and "B" during the year ended June 1, 2024 in the amount of $ 25.0 million and $ 6.3 million, respectively and during the year ended June 3, 2023 in the amount of $ 20.0 million and $ 6.3 million, respectively.

Prior to J uly 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.

3 unchanged sentences

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

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Syndicated revolving line of credit borrowing capacity $ 725.0 $ 725.0

4 unchanged sentences

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 0.50 for the four subsequent trailing four quarter periods.

In addition, for the Revolving line of credit 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 0.50 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.

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(In millions)

Thereafter 584.3

Total $ 1,347.8

4 unchanged sentences

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".

As of June 3, 2023, the liability related to the supplier financing program is $ 2.1 million.

As of June 1, 2024, the liability related to the supplier financing program was $ 2.0 million.

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

2 unchanged sentences

Year Ended Year Ended

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Operating lease costs $ 94.1 $ 99.3

2 unchanged sentences

Total $ 117.1 $ 122.5

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

June 3, 2023 May 28, 2022

Variable lease costs $ 96.2 $ 95.6

In the fourth quarter of fiscal 2024 the decision was made to cease the use of certain leased locations resulting in impairment charges of $ 5.5 million recognized for the right of use assets associated with these locations.

These charges are included within Restructuring expense in the Consolidated Statements of Comprehensive Income.

During fiscal 2023, the Company determined it was more likely than not that the fair value of certain right of use assets within the Global Retail reporting unit, specifically Fully, were below their carrying value and assessed these assets for impairment.

a result of this assessment, the Company recorded an impairment of $ 6.1 million in the Consolidated Statements of Comprehensive income.

At June 3, 2023, the Company has no financing leases.

As a result of this assessment, the Company recorded an impairment of the associated right of use assets of $ 6.1 million in the Consolidated Statements of Comprehensive income.

The Company has financing lease agreements that expire from fiscal 2025 to fiscal 2030.

The leases have initial lease terms that range from 3 to 6 years with some containing renewal options.

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:

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Year Ended Year Ended

June 3, 2023 May 28, 2022

June 1, 2024 June 3, 2023

Weighted-average remaining lease term (in years)

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

During the fourth quarter of the year ended June 1, 2024 , the Company began the process of terminating the defined-benefit pension plan held by the Knoll subsidiary.

The plan participants have been notified of the Company's intention to terminate the plan and settle plan liabilities through either lump sum distributions to plan participants or annuity contracts that cover vested benefits.

The plan liabilities as of June 1, 2024 were calculated using assumptions used to value the expected cost of the plan termination.

The Company currently expects to complete the settlement of plan liabilities in fiscal 2025.

Benefit Obligations and Funded Status

5 unchanged sentences

Benefit obligation at beginning of year $ 123.8 $ 76.0 $ 152.6 $ 104.5

Acquisition of Knoll — — 189.8 —

Interest cost 6.1 4.1 6.1 3.1

2 unchanged sentences

Foreign exchange impact — 1.8 — ( 2.5 )

Actuarial (gain) loss (1)

Actuarial loss (gain) (1)

4.4 2.6 ( 18.2 ) ( 26.2 )

5 unchanged sentences

Fair value of plan assets at beginning of year $ 126.3 $ 84.4 $ 144.0 $ 93.5

Acquisition of Knoll — — 175.4 —

Actual return on plan assets 5.7 4.5 ( 2.9 ) ( 9.1 )

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Prior service cost $ — $ 0.4 $ — $ 0.4

Unrecognized net actuarial (gain) loss ( 4.4 ) 25.7 ( 2.8 ) 41.4

Accumulated other comprehensive (gain) loss $ ( 4.4 ) $ 26.1 $ ( 2.8 ) $ 41.9

(1) In fiscal 2023 and 2022, 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 plans tota led $ 196.5 million and $ 250.1 million as of fiscal 2023 and fiscal 2022, respectively.

Unrecognized net actuarial loss (gain) 3.5 29.2 ( 4.4 ) 25.7

Accumulated other comprehensive loss (gain) $ 3.5 $ 29.6 $ ( 4.4 ) $ 26.1

(1) In fiscal 2024 and 2023, the net actuarial loss (gain) 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 plans totaled $ 203.8 million and $ 196.5 million as of the end of fiscal 2024 and fiscal 2023, respectively.

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

4 unchanged sentences

Expected return on plan assets ( 9.1 ) ( 5.0 ) ( 8.3 ) ( 4.7 ) ( 7.3 ) ( 5.1 )

Amortization of prior service costs ( 0.1 ) 0.1 — 0.1 — 0.1

Expected administrative expenses 0.7 — 0.6 — 0.5 —

Settlement related expenses — — ( 0.6 ) — ( 0.1 ) —

Amortization of net loss/(gain) — 2.2 — 4.5 — 5.3

Amortization of prior service cost — 0.1 — 0.1 — 0.1

Amortization of net (gain) loss ( 0.1 ) — ( 0.1 ) 2.2 — 4.5

Net periodic benefit (income) cost $ ( 2.4 ) $ ( 0.8 ) $ ( 2.3 ) $ 0.7 $ ( 3.0 ) $ 1.9

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Domestic International Domestic International

Net actuarial (gain) loss $ ( 2.2 ) $ ( 12.4 ) $ ( 2.9 ) $ ( 10.0 )

Net actuarial loss (gain) $ 7.8 $ 3.1 $ ( 2.2 ) $ ( 12.4 )

Net amortization 0.1 ( 0.1 ) 0.1 ( 2.3 )

Settlement charge — — 0.6 —

Effect of exchange rates — 0.7 — ( 1.1 )

Total recognized in other comprehensive loss $ 7.9 $ 3.7 $ ( 1.5 ) $ ( 15.8 )

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5.17 5.34 varies 3.33 varies 1.99

Compensation increase rate N/A 4.45 N/A 3.20 — 2.75

Compensation increase rate N/A 3.00 N/A 4.45 N/A 3.20

Expected return on plan assets 6.80 4.80 6.80 4.80 5.10 4.80

(1) Due to settlement activity during FYE 2023 in the domestic plan, there were two remeasurements as of 3/4/2023 and 6/3/2023.

The discount rate for beginning of period is 4.40 % and 5.18 %, respectively.

The discount rate for beginning of period in fiscal 2023 is 4.40 % and 5.18 %, respectively.

Due to settlement activity during fiscal year 2022, there were four remeasurements as of 8/28/2021, 11/27/2021, 2/26/2022, and 5/28/2022.

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5.10 5.18 5.17 5.34 4.40 3.33

Compensation increase rate N/A 3.00 N/A 4.45 — 3.20

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

Compensation increase rate N/A 3.15 N/A 3.00 N/A 4.45

For the international plan, the Company uses a full yield curve approach to estimate the benefit obligation discount rate and the interest component of net periodic benefit cost for pension benefits.

This method applies the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

The same process was used for the domestic plan until year end of fiscal 2024.

In fiscal 2024 for the domestic plan, the discount rate was derived from a combination of the rates from annuity providers for the annuity purchase portion of the benefit obligation and November 2023 IRS lump sum segment rates for the lump sum portion of the benefit obligation.

Plan Assets and Investment Strategies

5 unchanged sentences

In developing its strategy, the Company considered the need to balance the varying risks associated with each asset class with the long-term nature of its benefit obligations.

The Company's strategy moving forward will be to increase the level of fixed income investments as the funding status improves, thereby more closely matching the return on assets with the liabilities of the plans.

With the exception of the Knoll domestic plan, the Company's strategy moving forward will be to increase the level of fixed income investments as the funding status improves, thereby more closely matching the return on assets with the liabilities of the plans.

Due to the planned termination of the Knoll domestic pension plan effective May 28, 2024, the related investments for that plan were reallocated to fixed income securities due to the near-term nature of the benefit obligation.

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

4 unchanged sentences

Fixed income 61 % 76 % 70 % 33 %

Cash 39 % 1 % — % — %

Common collective trusts — % 23 % 30 % 67 %

3 unchanged sentences

Fixed income 61 % 69 % 70 % 38 %

Cash 39 % 9 % — % — %

Common collective trusts — % 22 % 30 % 62 %

31 unchanged sentences

The Company expects to contribute approximately $ 5.7 million to its pension plans in fiscal 2025.

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

The following represents a summary of the benefits expected to be paid by the plans in future fiscal years including the projected disbursement required for the termination of the domestic plan.

These expected benefits were estimated based on the same actuarial valuation assumptions used to determine benefit obligations at June 1, 2024.

7 unchanged sentences

2030 - 2034 $ — $ 26.2

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.

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

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

1 unchanged sentence

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

Effective January 1, 2023, the Knoll Retirement Savings Plan was merged into the MillerKnoll Retirement Plan.

The expense recorded for the Company's 401(k) matching and other discretionary contributions was $ 22.0 million, $ 32.4 million and $ 36.3 million in fiscal years 2024, 2023 and 2022, respectively.

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Denominator for diluted EPS 73,954,756 76,024,368 73,160,212

Equity awar ds of 2,119,223 shares, 1,245,988 shares and 207,365 shares of common stock were excluded from the denominator for the computation of diluted earnings per share for the fiscal years ended June 3, 2023, May 28, 2022 and May 29, 2021, 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 June 3, 2023 was $ 204.5 million.

Equity awar ds of 2,198,708 shares, 2,119,223 shares and 1,245,988 shares of common stock were excluded from the denominator for the computation of diluted earnings per share for the fiscal years ended June 1, 2024, June 3, 2023 and May 28, 2022, respectively, because they were anti-dilutive.

On January 16, 2019, the Company announced a share repurchase plan authorized by the Board of Directors providing for a share repurchase authorization of $ 250.0 million with no specified expiration date.

On July 16, 2024, the Company announced that the Board of Directors approved an increase to this repurchase plan to authorize an additional $ 200 million to fund share repurchases, in addition to the $ 66.3 million remaining as of June 1, 2024.

During fiscal year 2024, 2023, and 2022, shares repurchased under the repurchase plan totaled 6,022,646 , 575,207 , and 390,010 shares respectively.

6 unchanged sentences

At June 1, 2024, there were 16,464,945 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.

7,182,670 and 8,300,000 shares authorized under the MillerKnoll, Inc.

2020 Long Term Incentive Plan and the MillerKnoll, Inc.

2023 Long-Term Incentive Plan (jointly referred to as the "LTIP"), respectively, and 982,275 shares authorized under the Knoll, Inc.

2021 Stock Incentive Plan, (the "SIP"), as amended.

6 unchanged sentences

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

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) June 3, 2023 May 28, 2022 May 29, 2021

Excluding fully vested and non-forfeitable deferred stock units described under "Director Fees and Director 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) June 1, 2024 June 3, 2023 May 28, 2022

Employee stock purchase program $ 0.5 $ 0.5 $ 0.5

6 unchanged sentences

As of June 1, 2024, total pre-tax stock-based compensation cost not yet recognized related to non-vested awards was approximately $ 14.8 million.

The weighted-average period over which this amount is expected to be recognized is 0.9 year.

The weighted-average period over which this amount is expected to be recognized is 1.2 years.

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

7 unchanged sentences

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 2023, there was one stock option valuation date, but two valuations.

In fiscal 2024, there were two stock option valuation dates.

In fiscal 2023, there was one stock option valuation date, but two valuations.

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

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

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

however, the Hull-White I lattice model was used where historical expected term data for the option conditions was not prevalent.

however, in fiscal 2023 the Hull-White I lattice model was used where historical expected term data for the option conditions was not prevalent.

In determining these values, the following weighted-average assumptions were used for the options granted during the fiscal years indicated:

2024 2023 2022

Valuation Method Hull-White I (1)

Black-Scholes Black-Scholes Black-Scholes

Valuation Method Black-Scholes Hull-White I (1)

Black-Scholes Black-Scholes

Risk-free interest rates (2)

3.76 % to 3.94 %

2.91 % 3.01 % 0.47 %

2 unchanged sentences

Expected term of options (4)

N/A 3.4 years 3.3 years 3.8 - 4.1 years

4.9 years N/A 3.4 years 3.3 years

Expected volatility (5)

49.33 % to 50.26 %

37.09 % 51.58 % 49.03 %

Dividend yield (6)

2.9 % to 4.79 %

2.52 % 2.50 % 1.64 %

7 unchanged sentences

(5) The blended volatility approach was used.

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

(6) Represents the quarterly dividend divided by the three-month average stock price as of July 7 and 12, 2022, July 9, 2021, and February 28, 2023, for 2022 and 2021, respectively.

90 % term-matched historical volatility from daily stock prices and 10 % weighted average implied volatility from the 30 days preceding the grand date for fiscal 2024 and the 90 days preceding the grant date for fiscal 2023 and 2022.

(6) Represents the quarterly dividend divided by the three-month average stock price as of July 14, 2023 and January 12, 2024, July 7 and 12, 2022, and July 9, 2021, for 2024 , 2023 , and 2022 , respectively.

The following is a summary of stock option activity during fiscal 2024:

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Weighted-Average Remaining Contractual Term (Years)

Outstanding at May 28, 2022 1,716,593 $ 26.83 $ 10.4 7.7

Outstanding at June 3, 2023 2,204,200 $ 28.33 $ — 7.3

Granted 2,517,980 20.02

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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.

As of the end of fiscal 2024, awards outstanding 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.

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

As of the end of fiscal 2024, the restricted stock unit awards previously granted under the Knoll stock compensation plan and converted into MillerKnoll awards were fully vested and released.

The following is a summary of restricted stock unit activity during fiscal 2024:

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Remaining Contractual

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

Outstanding at June 3, 2023 684,341 $ 31.83 $ 9.9 1.0

Granted 719,780 17.30

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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.

For members of the executive leadership team, this calculation is adjusted by a relative total shareholder return modifier on their performance-based equity awards granted in fiscal year 2022 and 2023.

For fiscal 2024, this calculation is adjusted by a relative total shareholder return modifier on all performance-based awards granted.

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

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

As of the end of fiscal 2024, the performance stock unit awards previously granted under the Knoll stock compensation plan and converted into MillerKnoll awards were fully vested and released.

The following is a summary of performance stock unit activity during fiscal 2024:

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

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

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

Outstanding at June 3, 2023 350,971 $ 34.41 $ 5.2 1.2

Granted 253,623 18.39

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The total market value for shares vested in a prior fiscal year but deferred that were released during the twelve months ended June 1, 2024, was $ 21.0 thousand;

no additional shares were vested in fiscal 2023.

the fair value for shares vested during the twelve months ended June 1, 2024, was $ 2.7 million.

In addition, $ 178.9 thousand in accrued cash dividends were paid upon vesting the underlying shares of converted Knoll awards.

The weighted-average grant-date fair value of performance stock units granted during fiscal 2024, 2023, and 2022 was $ 18.39 , $ 27.30 , and $ 43.06 , respectively.

The intrinsic value presented above includes $ 0.2 million in accrued cash dividends on the underlying shares of outstanding converted Knoll performance stock unit awards.

Restricted Stock Awards

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

As of the end of fiscal 2024, the restricted stock awards previously granted under the Knoll stock compensation plan and converted into MillerKnoll awards were fully vested and released.

The following is a summary of restricted stock activity during fiscal 2024:

Share Units Weighted-Average Grant-Date Fair Value

Outstanding at May 28, 2022 219,989 $ 44.36

Outstanding at June 3, 2023 34,743 $ 44.36

Forfeited ( 983 ) 44.33

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Outstanding at June 1, 2024 — $ —

The weighted-average remaining recognition period of the outstanding restricted stock award shares at June 3, 2023 was 0.7 years.

The total market value for shares that vested during the twelve months ended June 1, 2024, was $ 1.1 million.

This includes $ 0.5 million of converted Knoll awards for which, due to change-in-control provisions, vesting was accelerated.

In addition, $ 0.4 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 2023 or fiscal 2021.

Accrued cash dividends on the underlying shares reported above for outstanding converted Knoll restricted stock awards total $ 60 thousand.

In addition, $ 73.0 thousand in accrued cash dividends were paid upon vesting the underlying shares of converted Knoll awards .

There were no restricted stock awards granted in fiscal 2024, 2023, or 2022.

Executive Deferred Compensation Plan

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

In the Executive Equalization Plan, investment options are the same as those available under the MillerKnoll Retirement Plan, except the Company stock fund is excluded from the Executive Equalization Plan.

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

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.

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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 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.

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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.

Stock options granted as director compensation are fully vested upon grant, 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.

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

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.

In the deferred stock account, deferred stock units (“DSUs”) 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.

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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 2023, 25,230 deferred stock units were credited to directors pursuant to the Director Plan.

During fiscal year 2024, 16,490 DSUs were credited and 9,027 DSUs were released to directors pursuant to the Director Plan.

The total fair value of deferred stock units issued during fiscal year 2024 was $ 0.4 million.

At June 3, 2023, there were 41,824 deferred stock units outstanding.

All of which are vested, with an aggregate intrinsic value of $ 0.6 million.

At June 1, 2024, there were 50,682 deferred stock units outstanding, all of which are vested, with an aggregate intrinsic value of $ 1.4 million.

The weighted-average grant date fair value of deferred stock units granted during 2024, 2023, and 2022 was $ 25.47 , $ 22.73 and $ 37.34 per share, respectively.

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Federal return to provision adjustments ( 1.8 ) ( 4.1 ) ( 0.6 )

Foreign return to provision adjustments ( 2.5 ) 1.1 ( 0.9 )

Foreign tax credit ( 12.1 ) ( 15.6 ) ( 8.8 )

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Effective tax rate 14.8 % 8.8 % ( 130.1 ) %

The tax effects and types of temporary differences that give rise to significant components of the deferred tax assets and liabilities at June 3, 2023 and May 28, 2022, are as follows:

The tax effects and types of temporary differences that give rise to significant components of the deferred tax assets and liabilities at June 1, 2024 and June 3, 2023, are as follows:

(In millions) 2024 2023

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Foreign tax net operating loss carryforwards and credits 18.0 14.2

Accrued step rent and tenant reimbursements 0.7 1.0

Lease liability 96.6 109.6

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Decreases related to lapse of applicable statute of limitations ( 0.6 )

Balance at May 28, 2022 $ 2.3

Decreases related to settlements ( 0.2 )

Balance at June 3, 2023 $ 1.6

Increases related to current year income tax positions 0.2

Decreases related to lapse of applicable statute of limitations ( 0.3 )

Decreases related to settlements ( 0.2 )

Balance at June 1, 2024 $ 1.5

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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) June 3, 2023 May 28, 2022 May 29, 2021

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

Interest and penalty (income) expense $ 0.1 $ ( 0.2 ) $ —

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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 return for fiscal year 2022 has been fully accepted by the Internal Revenue Service under the Compliance Assurance Process (CAP) and the Company is awaiting final closing documentation.

Knoll’s federal consolidated returns related to calendar years 2019 and 2020 have also been selected for examination by the Internal Revenue Service.

The Company has partially closed the audits of fiscal year 2022 and fiscal year 2023 with the Internal Revenue Service under the Compliance Assurance Process (CAP).

Knoll’s federal consolidated returns related to calendar years 2019, 2020, and short period 2021 have also been selected for examination by the Internal Revenue Service.

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.

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.

The Company's financial instruments, other than long-term debt, are recorded at fair value.

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) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Carrying value $ 1,347.8 $ 1,414.4

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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.

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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 June 3, 2023 and May 28, 2022:

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Financial Assets NAV Quoted Prices With Other Observable Inputs (Level 2) NAV Quoted Prices With Other Observable Inputs (Level 2)

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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 pricing levels to which the fair value measurements are classified within the fair value hierarchy as of June 3, 2023 and May 28, 2022.

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Financial Assets Balance Sheet Location Quoted Prices with Other Observable Inputs (Level 2) Quoted Prices with Other Observable Inputs (Level 2)

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Accordingly, the investments are recorded within Current Assets within the Consolidated Balance Sheets.

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.

If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than its cost, the Company's intent to hold the investment, and whether it is more likely than not that the Company will be required to sell the investment before recovery of the cost basis.

The Company also considers the type of security, related industry and sector performance, and published investment ratings.

Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established.

If conditions within individual markets, industry segments, or macro-economic environments deteriorate, the Company could incur future impairments.

Derivative Instruments and Hedging Activities

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The notional amounts of the forward contracts held to purchase and sell U.S.

dollars in exchange for other major international currencies were $ 99.5 million and $ 54.1 million as of June 3, 2023 and May 28, 2022, respectively.

The notional amounts of the foreign currency forward contracts held to purchase and sell British pound sterling in exchange for other major international currencies were £ 7.5 million and £ 43.1 million as of June 3, 2023 and May 28, 2022, respectively .

dollars in exchange for other major international currencies were $ 68.6 million and $ 99.5 million as of June 1, 2024 and June 3, 2023, respectively.

The notional amounts of the foreign currency forward contracts held to purchase and sell British pound sterling in exchange for other major international currencies were £ 1.1 million and £ 7.5 million as of June 1, 2024 and June 3, 2023, respectively .

The Company also has other forward contracts related to other currency pairs at varying notional amounts.

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The effects of non-designated derivatives on the consolidated financial statements were as follows for the fiscal years ended 2024 and 2023 (amounts presented exclude any income tax effects ):

(In millions) Balance Sheet Location June 3, 2023 May 28, 2022

(In millions) Balance Sheet Location June 1, 2024 June 3, 2023

Non-designated derivatives:

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(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 June 3, 2023 May 28, 2022 May 29, 2021

(In millions) Statement of Comprehensive Income Location June 1, 2024 June 3, 2023 May 28, 2022

Loss recognized on foreign currency forward contracts Other expense (income), net $ 3.0 $ 4.8 $ 3.3

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) June 3, 2023 May 28, 2022 May 29, 2021

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

Interest rate swap $ ( 27.1 ) $ 4.7 $ 41.4

Reclassified from Accumulated other comprehensive loss into earnings within Interest expense for the fiscal year ended 2023, was a loss of $ 14.3 million and in fiscal years ended 2022, and 2021 were gains of $ 6.9 million and of $ 4.5 million, respectively.

Reclassified from Accumulated other comprehensive loss into earnings within Interest expense for the fiscal year ended 2024, was a gain of $ 30.7 million, and in fiscal years ended 2023 and 2022 were a gain of $ 14.3 million and a loss of $ 6.9 million, respectively.

Pre-tax gains expected to be reclassified from Accumulated other comprehensive loss into earnings during the next twelve months are $ 28.8 million.

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

(In millions) June 3, 2023 May 28, 2022 May 29, 2021

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

Accrual Balance — beginning $ 73.9 $ 73.2 $ 60.1

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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 h as been recorded in respect to these bonds as of either June 3, 2023 or May 28, 2022.

Accordingly, no liability h as been recorded in respect to these bonds as of either June 1, 2024 or June 3, 2023.

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.

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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 as of June 3, 2023 and May 28, 2022.

Accordingly, no liability has been recorded as of June 1, 2024 and June 3, 2023.

Contingencies

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Operating Segments

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.

The Company has restated historical results to reflect this change.

Below is a summary of the change in reportable segments.

• 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 and Muuto 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 Company's reportable segments consists of three segments:

Americas Contract, International Contract & Specialty, and Global Retail.

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.

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

(In millions) June 3, 2023 May 28, 2022 May 29, 2021

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

Americas Contract $ 1,824.2 $ 2,026.1 $ 1,929.1

International Contract and Specialty 1,017.3 928.5 479.6

International Contract & Specialty 931.8 1,017.3 928.5

Global Retail 872.4 1,043.7 1,088.4

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Americas Contract $ 94.9 $ 87.7 $ 104.5

International Contract and Specialty 33.4 52.3 20.2

International Contract & Specialty 35.1 33.4 52.3

Global Retail 25.1 34.0 33.8

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Americas Contract $ 98.7 $ 99.6 $ ( 24.0 )

International Contract and Specialty 98.6 69.9 49.4

International Contract & Specialty 78.2 98.6 69.9

Global Retail 42.4 ( 15.5 ) 134.5

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Americas Contract $ 47.6 $ 52.4 $ 52.5

International Contract and Specialty 15.6 17.8 11.3

International Contract & Specialty 14.4 15.6 17.8

Global Retail 16.4 15.3 24.4

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Americas Contract $ 530.1 $ 528.4 $ 530.1

International Contract and Specialty 303.0 304.3 111.2

International Contract & Specialty 304.4 303.0 304.3

Global Retail 391.8 $ 390.3 391.8

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The following is a summary of net sales estimated by product category for the years indicated:

(In millions) June 3, 2023 May 28, 2022 May 29, 2021

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

Workplace $ 1,336.2 $ 1,559.7 $ 1,484.3

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

The prior years have been restated to reflect these changes.

Accumulated Other Comprehensive Loss

The following table provides an analysis of the changes in accumulated other comprehensive loss for the years indicated:

(In millions) June 3, 2023 May 28, 2022 May 29, 2021

(In millions) June 1, 2024 June 3, 2023 May 28, 2022

Cumulative translation adjustments at beginning of period $ ( 114.0 ) $ ( 93.9 ) $ ( 3.9 )

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Pension and other post-retirement benefit plans at beginning of period ( 23.8 ) ( 36.9 ) ( 50.4 )

Other comprehensive income before reclassifications (net of tax of ($ 3.50 ), ($ .02 ), and ($ 0.03 ))

Other comprehensive (loss) income before reclassifications (net of tax of $ 1.60 , ($ 3.50 ), and ($ 0.02 ))

( 9.1 ) 14.8 13.5

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Net reclassifications ( 0.4 ) ( 1.7 ) —

Net current period other comprehensive income 13.1 13.5 8.8

Net current period other comprehensive (loss) income ( 9.5 ) 13.1 13.5

Balance at end of period ( 33.3 ) ( 23.8 ) ( 36.9 )

Interest rate swap agreement at beginning of period 42.7 23.7 ( 10.8 )

Other comprehensive income before reclassifications (net of tax of ($ 6.2 ), ($ 11.6 ), and ($ 2.6 ))

Other comprehensive (loss) income before reclassifications (net of tax of ($ 1.2 ), ($ 6.2 ), and ($ 11.6 ))

( 27.1 ) 4.7 41.4

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Balance at end of period 46.3 42.7 23.7

Unrealized holding gains on securities at beginning of period — — 0.1

Other comprehensive (loss) income before reclassifications — — ( 0.1 )

Balance at end of period — — —

Total Accumulated other comprehensive loss $ ( 92.7 ) $ ( 95.1 ) $ ( 107.1 )

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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.

These include severance and employee benefit costs as well as other direct separation benefit costs, right of use asset impairment charges, fixed asset impairment charges, and accelerated depreciation of fixed assets.

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

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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 the reorganization and consolidation of facilities and asset impairment charges.

• Exit and disposal activities include those incurred as a direct result of integration activities, primarily including the reorganization and consolidation of facilities as well as 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 June 1, 2024, the Company incurred $ 23.5 million of costs related to the Knoll Integration which was comprised of $ 19.4 million of exit and disposal costs related to the consolidation of facilities, and $ 4.1 million of other integration costs.

For the year ended June 3, 2023, the Company incurred $ 18.0 million of costs related to the Knoll Integration including:

$ 3.6 million of severance and employee benefit costs, $ 5.9 million of exit and disposal costs related to the consolidation of facilities, and $ 8.5 million of other integration costs.

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.

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

May 28, 2022 $ 1.4 $ — $ 1.4

June 3, 2023 $ 2.9 $ — $ 2.9

Integration Costs — 19.4 19.4

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Twelve Months Ended

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Americas Contract $ 18.6 $ 9.7

International Contract and Specialty 2.5 —

International Contract & Specialty 4.8 2.5

Global Retail — 0.2

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Total $ 23.5 $ 18.0

2023 Restructuring Plan

In the second quarter of fiscal 2024 a manufacturing facility located in Wisconsin met the criteria to be classified as an asset held for sale.

The decision to sell this facility was made as a result of facility integration activities performed in connection with the integration of Knoll.

The carrying amount of these assets held for sale was $ 3.5 million and is classified as current assets within "Assets held for sale" in the Condensed Consolidated Balance Sheets as of June 1, 2024.

Restructuring Activities

During fiscal year 2024, the Company announced an action related to the 2024 restructuring plan ("2024 restructuring plan") to reduce expenses.

This restructuring activity included involuntary reductions in workforces as well as expenses related to a facilities consolidation plan, comprised primarily of non-cash right of use asset impairment charges and accelerated depreciation of fixed assets.

For the year ended June 1, 2024, the Company incurred $ 30.8 million of restructuring charges related to the 2024 restructuring plan.

The restructuring plan was complete in fiscal 2024 and no future costs related to this plan are expected.

During fiscal year 2023, the Company announced a series of actions that relate to the 2023 restructuring plan ("2023 restructuring plan") to reduce expenses.

These restructuring activities included voluntary and involuntary reductions in workforces and charges incurred in connection with the Fully decision.

As the result of these actions, the Company projects an annualized expense reduction of approximately $ 30 million to $ 35 million.

For the year ended June 3, 2023, the Company incurred $ 34.0 million of costs related to the 2023 restructuring plan comprised of $ 27.9 million of severance and employee benefit costs and $ 6.1 million of non-impairment charges related to the closure of the Fully business.

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

The following table provides an analysis of the changes in liability balance for the 2023 restructuring plan 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 June 3, 2023:

The Company incurred $ 34.0 million of costs related to the 2023 restructuring plan comprised of $ 27.9 million of severance and employee benefit costs and $ 6.1 million of non-impairment charges related to the closure of the Fully business.

The restructuring plan was complete in fiscal 2023 and no future costs related to this plan are expected.

The following table provides an analysis of the changes in the restructuring cost reserve 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 2023 restructuring plan for the fiscal year ended June 1, 2024:

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

May 28, 2022 $ — $ — $ —

June 3, 2023 $ 7.3 $ — $ 7.3

Restructuring Costs — — —

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June 1, 2024 $ — $ — $ —

The Company expects that remaining liability for the 2023 restructuring plan as of June 3, 2023, will be paid in fiscal year 2024.

The following table provides an analysis of the changes in the restructuring cost reserve 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 2024 restructuring plan for the fiscal year ended June 1, 2024:

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

June 3, 2023 $ — $ — $ —

Restructuring Costs 19.3 11.5 30.8

Amounts Paid ( 9.3 ) — ( 9.3 )

Non-cash Costs — ( 11.5 ) ( 11.5 )

June 1, 2024 $ 10.0 $ — $ 10.0

The Company expects that remaining liability for the 2024 restructuring plan as of June 1, 2024, will be paid in fiscal 2025.

The following is a summary of restructuring costs by segment for the years indicated:

(In millions) June 3, 2023 May 28, 2022

(In millions) June 1, 2024 June 3, 2023

Americas Contract $ 24.6 $ 22.8

International Contract & Specialty 4.1 1.3

Global Retail 2.1 9.9

Corporate — —

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Variable Interest Entities

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 $ 6.3 million and $ 1.2 million as of June 3, 2023 and May 28, 2022 respectively and represents the Company’s maximum exposure to loss.

The Company entered into long-term notes receivable with certain independently owned dealers that are deemed to be variable interests in variable interest entities.

The carrying value of these long-term notes receivable was $ 17.9 million and $ 6.3 million as of June 1, 2024 and June 3, 2023 respectively 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.

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We have audited the accompanying consolidated balance sheets of MillerKnoll, Inc.

and subsidiaries (the Company) as of June 3, 2023 and May 28, 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended June 3, 2023, and the related notes and financial statement schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of June 1, 2024 and June 3, 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended June 1, 2024, 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 June 1, 2024, 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 June 3, 2023 and May 28, 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended June 3, 2023, 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 June 1, 2024 and June 3, 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended June 1, 2024, in conformity with U.S.

generally accepted accounting principles.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

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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 resulting discount rate.

Knoll tradename impairment assessment

As discussed in Note 1 to the consolidated financial statements, the indefinite-lived intangible asset balance as of June 3, 2023 was $153.3 million related to the Knoll tradename.

During the fourth quarter of the year ended June 3, 2023, the Company recorded an impairment loss of $19.7 million related to the Knoll tradename.

Knoll and Muuto tradenames impairment assessment

As discussed in Note 1 to the consolidated financial statements, the indefinite-lived intangible asset balance as of June 1, 2024 was $144.4 million and $80.5 million related to the Knoll and Muuto tradenames, respectfully.

During the fourth quarter of the year ended June 1, 2024, the Company recorded an impairment loss of $8.9 million and $7.9 million related to the Knoll and Muuto tradenames, respectfully.

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 Knoll 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 Knoll tradename.

Additionally, the audit effort associated with the evaluation of the Company’s discount rate and royalty rate required the use of valuation professionals with specialized skills and knowledge.

We identified the evaluation of the Knoll and Muuto tradenames for impairment as a critical audit matter.

Subjective and challenging auditor judgment was required to evaluate the selection of forecasted revenue growth rates, discount rates, and royalty rates used to estimate the fair value of the Knoll and Muuto tradenames.

Additionally, the audit effort associated with

the evaluation of the Company’s discount rates and royalty rates required the use of valuation professionals with specialized skills and knowledge.

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 determination of the fair value of the Knoll tradename, including controls over the selection of forecasted revenue growth rates, discount rate, and royalty rate.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s determination of the fair value of the Knoll and Muuto tradenames, including controls over the selection of forecasted revenue growth rates, discount rates, and royalty rates.

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 performed sensitivity analyses to assess the impact of reasonably possible changes to the forecasted revenue growth rates, discount rates, and royalty rates on the fair value of the tradenames.

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 royalty rate selected at the acquisition date and publicly available data for comparable licensing agreements in assessing the overall royalty rate.

• evaluating the Company’s discount rates by comparing the Company’s inputs to the discount rates to publicly available data for comparable entities and assessing the overall discount rates;

• evaluating the Company’s royalty rates by comparing the selected royalty rates to the royalty rates selected at the acquisition date and publicly available data for comparable licensing agreements in assessing the overall royalty rates.

We have served as the Company’s auditor since 2019.

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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