# HNI CORP (HNI)

Informational only - not investment advice.

CIK: 0000048287
SIC: 2522 Office Furniture (No Wood)
SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 25](/major-group/25/) > [SIC 2522 Office Furniture (No Wood)](/industry/2522/)
Latest 10-K filed: 2026-03-03
SEC page: https://www.sec.gov/edgar/browse/?CIK=48287
Filing source: https://www.sec.gov/Archives/edgar/data/48287/000004828726000084/hni-20260103.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 2839000000 | USD | 2026 | 2026-03-03 |
| Net income | 54200000 | USD | 2026 | 2026-03-03 |
| Assets | 4885000000 | USD | 2026 | 2026-03-03 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-03. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000048287.json. Derived margins are computed from the extracted annual SEC facts.

| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2023 | 2024 | 2026 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  | 2,203,489,000 | 2,175,882,000 | 2,257,895,000 | 2,246,947,000 | 1,955,400,000 | 2,361,800,000 | 2,434,000,000 | 2,526,400,000 | 2,839,000,000 |
| Net income | 61,471,000 | 85,577,000 | 89,795,000 | 93,377,000 | 110,505,000 | 41,900,000 | 123,900,000 | 49,200,000 | 139,500,000 | 54,200,000 |
| Operating income | 112,849,000 | 133,692,000 | 76,690,000 | 128,173,000 | 151,342,000 | 61,400,000 | 155,200,000 | 90,300,000 | 206,500,000 | 126,000,000 |
| Gross profit | 784,200,000 | 835,013,000 | 783,988,000 | 835,038,000 | 833,762,000 | 721,100,000 | 834,900,000 | 948,300,000 | 1,033,400,000 | 1,176,100,000 |
| Diluted EPS | 1.35 | 1.88 | 2.00 | 2.11 | 2.54 | 0.98 | 2.94 | 1.09 | 2.88 | 1.11 |
| Assets | 1,239,334,000 | 1,330,234,000 | 1,391,550,000 | 1,401,844,000 | 1,452,512,000 | 1,418,000,000 | 1,414,500,000 | 1,928,800,000 | 1,875,100,000 | 4,885,000,000 |
| Liabilities |  |  |  |  |  |  |  | 1,167,000,000 | 1,034,700,000 | 3,049,500,000 |
| Stockholders' equity | 414,587,000 | 500,603,000 | 514,068,000 | 562,933,000 | 584,044,000 | 590,419,000 | 616,500,000 | 761,400,000 | 840,100,000 | 1,835,600,000 |
| Cash and cash equivalents | 34,144,000 | 36,312,000 | 23,348,000 | 76,819,000 | 52,073,000 | 116,120,000 | 17,400,000 | 28,900,000 | 20,200,000 | 209,200,000 |
| Net margin |  | 3.88% | 4.13% | 4.14% | 4.92% | 2.14% | 5.25% | 2.02% | 5.52% | 1.91% |
| Operating margin |  | 6.07% | 3.52% | 5.68% | 6.74% | 3.14% | 6.57% | 3.71% | 8.17% | 4.44% |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000048287.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-07-02 |  |  | 0.72 | reported discrete quarter |
| 2022-Q3 | 2022-10-01 |  |  | 1.51 | reported discrete quarter |
| 2023-Q1 | 2023-04-01 |  |  | 0.04 | reported discrete quarter |
| 2023-Q2 | 2023-07-01 | 563,500,000 | -12,800,000 | -0.30 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 711,600,000 | 37,800,000 | 0.80 | reported discrete quarter |
| 2023-Q4 | 2023-12-30 | 679,800,000 | 22,700,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-30 | 588,000,000 | 17,700,000 | 0.37 | reported discrete quarter |
| 2024-Q2 | 2024-06-29 | 623,700,000 | 36,000,000 | 0.75 | reported discrete quarter |
| 2024-Q3 | 2024-09-28 | 672,200,000 | 47,500,000 | 0.98 | reported discrete quarter |
| 2024-Q4 | 2024-12-28 | 642,500,000 | 38,300,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-29 | 599,800,000 | 13,900,000 | 0.29 | reported discrete quarter |
| 2025-Q2 | 2025-06-28 | 667,100,000 | 48,200,000 | 1.02 | reported discrete quarter |
| 2025-Q3 | 2025-09-27 | 683,800,000 | 41,200,000 | 0.88 | reported discrete quarter |
| 2025-Q4 | 2026-01-03 | 888,400,000 | -49,200,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-04-04 | 1,347,500,000 | -38,800,000 | -0.55 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/48287/000004828726000100/hni-20260404.htm

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization.
Confidence: high
Filing date: 2026-05-06
Report date: 2026-04-04

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of the Corporation’s historical results of operations and of its liquidity and capital resources should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements of the Corporation and related notes included elsewhere in this Quarterly Report on Form 10-Q and with the Corporation’s Annual Report on Form 10-K for the fiscal year ended January 3, 2026 filed with the Securities and Exchange Commission (the "2025 Form 10-K"). All dollar amounts presented are in millions, except per share data or where otherwise indicated. Amounts may not sum due to rounding. Statements that are not historical are forward-looking and involve risks and uncertainties. See "Forward-Looking Statements" at the end of this section for further information about forward-looking statements.

References in this management discussion and analysis to "HNI" and the "Corporation" are to HNI and its consolidated subsidiaries.

Overview

HNI Corporation has been improving where people live, work, and gather for more than 80 years. HNI is a manufacturer of workplace furnishings and residential building products. Within Workplace Furnishings, the Corporation is the thought leader in commercial furnishings and the preeminent global designer, innovator, and provider of workplace solutions going to market under unique brands serving multiple channels and customers from the largest multinational companies to small local businesses. Within Residential Building Products, the Corporation is the nation's leading manufacturer and marketer of hearth products. The Corporation utilizes a multi-faceted go-to-market model to deliver value to customers via various brands and selling models. HNI is focused on growing its existing businesses while seeking out and developing new opportunities for expansion. The Corporation's two reportable segments consist of Workplace Furnishings and Residential Building Products.

On December 10, 2025, the Corporation completed its acquisition of Steelcase, a global design and furniture company, in a cash and stock transaction valued at approximately $1.9 billion. The acquisition of Steelcase unites two industry leaders to meet the dynamic marketplace and evolving needs of the workplace amid accelerating in-office work trends. This combination of two highly respected companies whose strong foundation, combined with expected synergies, will accelerate the Corporation's ability to invest in long-term operational enhancements, digital transformation, products to meet evolving customer needs, and customer-centered buying experiences. Steelcase is included in the Workplace Furnishings segment. See "Note 3. Acquisitions and Divestitures" in the Notes to Condensed Consolidated Financial Statements for more details on the Steelcase acquisition, which affects the comparability of results between the current and prior-year periods.

During the first quarter, the Corporation began managing costs across all businesses in response to soft volume to begin the year, driven by current geopolitical uncertainty. In Workplace Furnishings, the strategic focus remains margin expansion. The first quarter cost management actions within the segment are in addition to previously announced synergies associated with the integration of Steelcase, which are on track. Current synergy projections are focused on the Americas business and do not include any revenue synergies. The Corporation also continues to expect additional savings from network optimization in the legacy Workplace Furnishing businesses over the next three years. The Residential Building Products segment remains focused on driving revenue growth over the long term. The business continues to navigate challenging housing market dynamics resulting from interest rate volatility and affordability issues. The combination of the Corporation's disciplined cost management, Steelcase synergies, and legacy network optimization projects continue to strengthen its earnings visibility story. The Corporation is also focused on streamlining priorities. As an example, Steelcase's multi-year ERP implementation project was terminated during the first quarter. This move is part of a broader corporation-wide effort to focus on profitable growth, while also avoiding disruption, eliminating substantial future ERP investment, and redeploying resources back into the business — toward customer-focused initiatives.

Consolidated net sales for the first quarter of 2026 were $1.3 billion, an increase of 125 percent compared to net sales of $599.8 million in the prior-year quarter, with net sales in the Workplace Furnishings segment increasing 169 percent, and Residential Building Products net sales increasing 2.1 percent. Consolidated and Workplace Furnishings net sales include a $774.0 million year-over-year increase related to the acquisition of Steelcase in December 2025. See "Note 3. Acquisitions and Divestitures" in the Notes to Condensed Consolidated Financial Statements for further information about the acquisition.

Net loss attributable to the Corporation in the first quarter of 2026 was $38.8 million compared to net income of $13.9 million in the first quarter of 2025. The current quarter includes pretax costs of $64.2 million of purchase accounting adjustments related to the Steelcase acquisition for inventory step-up and additional amortization of intangibles and depreciation for the preliminary valuation of property, plant and equipment, additionally the Corporation recorded acquisition related expenses of $3.5 million. The Corporation also recorded $20.5 million of restructuring and impairment charges, inclusive of restructuring

26

recorded to cost of sales. This amount was primarily attributable to the termination of Steelcase's multi-year ERP implementation project, Steelcase acquisition costs and the closure of the Wayland, New York facility. Excluding the purchase accounting adjustments and restructuring and impairment charges, net income increased in the current quarter driven by improved net productivity.

Results of Operations

The following table presents certain results of operations:    

Three Months Ended

April 4,

2026

March 29,

2025

Change

Net sales

$

1,347.5 

$

599.8 

125 

%

Cost of sales

847.6 

361.4 

135 

%

Gross profit

499.9 

238.4 

110 

%

Selling and administrative expenses

514.8 

207.6 

148 

%

Acquisition costs

3.5 

— 

NM

Restructuring and impairment charges

18.0 

6.4 

181 

%

Operating income (loss)

(36.4)

24.4 

(249)

%

Other non-operating income, net

1.5 

— 

NM

Interest expense, net

20.7 

5.5 

274 

%

Income (loss) before income taxes

(55.6)

18.9 

(395)

%

Income taxes (benefit)

(16.8)

5.0 

(439)

%

Net income (loss) attributable to non-controlling interest

— 

(0.0)

NM

Net income (loss) attributable to HNI Corporation

$

(38.8)

$

13.9 

(379)

%

As a Percentage of Net Sales:

Net sales

100.0 

%

100.0 

%

Gross profit

37.1 

39.7 

-260 

 bps

Selling and administrative expenses

38.2 

34.6 

360 

 bps

Acquisition Costs

0.3 

— 

30 

 bps

Restructuring and impairment charges

1.3 

1.1 

20 

 bps

Operating income (loss)

(2.7)

4.1 

-680 

 bps

Income taxes (benefit)

(1.3)

0.8 

-210 

 bps

Net income (loss) attributable to HNI Corporation

(2.9)

2.3 

-520 

 bps

Three Months Ended April 4, 2026 and March 29, 2025

Net Sales

Consolidated net sales for the first quarter of 2026 increased 125 percent compared to the same quarter last year. The increase was driven by the acquisition of Steelcase in the prior year, which increased year-over-year net sales by $774.0 million. The divestiture of HNI India during the prior-year quarter decreased year-over-year net sales by $7.1 million.

Gross Profit

Gross profit as a percentage of net sales decreased 260 basis points in the first quarter of 2026 compared to the same quarter last year, driven by impacts from the acquisition of Steelcase, including $36.4 million of incremental purchase accounting adjustments, of which $33.5 million is related to inventory step-up and $2.9 million is related to additional depreciation for the

27

preliminary valuation adjustment to property, plant, and equipment, as well as by lower legacy HNI net sales volume, partially offset by improved net productivity and favorable price-cost.

Selling, General, and Administrative Expenses

Selling and administrative expenses as a percentage of net sales increased 360 basis points in the first quarter of 2026 compared to the same quarter last year. The increase was driven by impacts from the acquisition of Steelcase, including $27.8 million of incremental purchase accounting adjustments related to additional amortization of intangibles and depreciation for the preliminary valuation to property, plant, and equipment, along with lower net sales in the legacy HNI business, and increased input costs.

Acquisition Costs

In the current year the Corporation recorded costs of $3.5 million associated with the Steelcase acquisition. Acquisition costs consist primarily of retention compensation, other professional service fees, and change in control compensation expense adjustments. See "Note 3. Acquisitions and Divestitures" in the Notes to the Condensed Consolidated Financial Statements for further information.

Restructuring and Impairment Charges

In the first quarter of 2026, the Corporation recorded charges of $18.0 million, primarily related to the termination of Steelcase's multi-year ERP implementation project, the Corporation's network optimization program and the closure of the Wayland, New York facility. In the prior-year quarter, $6.4 million of charges were recorded, primarily related to the divestiture of the HNI India business.

Operating Income (Loss)

In the first quarter of 2026, operating margin contracted 680 basis points compared to the same quarter last year. This decrease was driven by impacts from the acquisition of Steelcase, including $64.2 million of incremental purchase accounting adjustments with respect to inventory step-up, and intangible amortization and depreciation related to the preliminary valuation of Steelcase, $20.5 million of restructuring and impairment charges, and lower net sales in the legacy HNI business, the effect of which were partially offset by improved net productivity and favorable price-cost.

Interest Expense, Net

Interest expense, net for the first quarter of 2026 increased to $20.7 million, from $5.5 million in the same quarter last year. The increase was driven by higher average outstanding borrowings incurred to fund the acquisition of Steelcase. See "Note 7. Debt" in the Notes to Condensed Consolidated Financial Statements for further information about such financing.

Income Taxes

The Corporation’s income tax provision for the first quarter of 2026 was $16.8 million of benefit on loss before taxes of $55.6 million, or an effective tax rate of 30.3 percent. For the first quarter of 2025, the Corporation’s income tax provision was $5.0 million of expense on income before taxes of $18.9 million, or an effective tax rate of 26.3 percent. The increase in the effective tax rate was primarily due to favorable equity-based compensation payments driving a higher tax benefit on the loss for the quarter.

Net Income (Loss) Attributable to HNI Corporation

Net loss attributable to the Corporation was $38.8 million, or $0.55 per diluted share, in the first quarter of 2026, compared to net income of $13.9 million, or $0.29 per diluted share, in the first quarter of 2025.

28

Workplace Furnishings

The following table presents certain results of operations in the Workplace Furnishings segment:    

Three Months Ended

April 4,

2026

March 29,

2025

Change

Net sales

$

1,185.4 

$

441.1 

169 

%

Operating income (loss)

$

(42.6)

$

18.0 

(336)

%

Operatin

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization.
Confidence: high

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of the Corporation’s results of operations and of its liquidity and capital resources should be read in conjunction with the Consolidated Financial Statements of the Corporation and related notes. All dollar amounts presented are in millions, except per share data or where otherwise indicated. Amounts may not sum due to rounding. Statements that are not historical are forward-looking and involve risks and uncertainties. See "Item 1A. Risk Factors" and the Forward-Looking Statements section within "Item 1. Business" for further information.

The Corporation follows a 52/53-week fiscal year, which ends on the Saturday nearest December 31. Fiscal year 2025 ended on January 3, 2026, fiscal year 2024 ended on December 28, 2024, and fiscal year 2023 ended on December 30, 2023. The financial statements for fiscal year 2025 are on a 53-week basis and 2024, and 2023 are on a 52-week basis. A 53-week year occurs approximately every sixth year.

To review management's discussion and analysis of the consolidated and segment-level results of operations for the fiscal year ended December 28, 2024 compared with the fiscal year ended December 30, 2023, refer to "Part II - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as filed with the Securities and Exchange Commission on February 25, 2025.

Overview

HNI Corporation has been improving where people live, work, and gather for more than 80 years. HNI is a manufacturer of workplace furnishings and residential building products. Within workplace furnishings, the Corporation is the thought leader in commercial furnishings and the preeminent global designer, innovator, and provider of workplace solutions going to market under unique brands serving multiple channels and customers from the largest multinational companies to small local businesses. Within residential building products, the Corporation is the nation's leading manufacturer and marketer of hearth products. The Corporation utilizes a multi-faceted go-to-market model to deliver value to customers via various brands and selling models. HNI is focused on growing its existing businesses while seeking out and developing new opportunities for expansion. The Corporation's two reportable segments consist of Workplace Furnishings and Residential Building Products. Fiscal year 2025 included 53 weeks, with the extra week occurring in the fourth quarter, while fiscal year 2024 included 52 weeks.

On December 10, 2025, the Corporation completed its acquisition of Steelcase Inc. ("Steelcase"), a global design and furniture company, in a cash and stock transaction valued at approximately $1.9 billion. See "Note 4. Acquisitions and Divestitures" in the Notes to Consolidated Financial Statements for more details on the Steelcase acquisition. Steelcase will be included in the Workplace Furnishings segment. The Corporation has included the financial results of Steelcase in the Consolidated Financial Statements starting as of the date of acquisition.

The acquisition of Steelcase unites two industry leaders to meet the dynamic marketplace and evolving needs of the workplace amid accelerating in-office work trends. The combination will not only transform the Corporation, but it will also be transformational for the workplace furnishings industry — as two highly respected companies with shared values, talented teams, strong financial profiles, and highly complementary capabilities have been brought together. This strong foundation, combined with expected synergies, will accelerate the Corporation's ability to invest in long-term operational enhancements, digital transformation, products to meet evolving customer needs, and customer-centered buying experiences. Integration efforts are underway, utilizing a disciplined and proven approach informed by recent experience, while continuing to build on the iconic brands for which both companies are widely respected.

The Corporation continues to realize significant savings from synergies associated with the 2023 acquisition of Kimball International and the ramp-up of its Mexico facility. In addition, synergies associated with the integration of Steelcase will increase earnings over the next five years, with modest accretion expected in 2026. In addition to eliminating redundant public company corporate costs, the synergies are associated with expected savings in the Americas and does not include any revenue synergies.

During 2025, in Workplace Furnishings, the strategic focus remains margin expansion. The ongoing integration of the Kimball International business and related synergies, expanded utilization of its manufacturing facility in Mexico, and network optimization initiatives are enabling the segment's profit transformation plan, while the divestiture of HNI India in the second quarter of 2025 allows the Corporation to focus on its core strategies. The Residential Building Products business remains focused on driving revenue growth over the long term. Currently, the business is navigating challenging housing market dynamics resulting from interest rate volatility and affordability issues. In addition, macroeconomic volatility and evolving government

26

Table of Contents

tariff policies continue to drive a heightened level of uncertainty in the Corporation's markets. Both the Workplace Furnishings segment and the Residential Building Products segment increased net sales year-over-year, while maintaining strong profitability.

Consolidated net sales for 2025 were $2.8 billion, an increase of 12.4 percent compared to net sales of $2.5 billion in the prior year. The change was driven by 14.6 percent year-over-year sales growth in the Workplace Furnishings segment, and an 5.7 percent increase in net sales in the Residential Building Products segment. Steelcase contributed $187.5 million in net sales since the acquisition date. The divestiture of HNI India in the second quarter of 2025 reduced year-over-year sales by $16.2 million. These transactions affect the comparability of results between years. The references below to "legacy" HNI businesses refer to the Corporation's businesses excluding the acquisition and impact of Steelcase.

Net income attributable to the Corporation in 2025 was $54.2 million compared to net income of $139.5 million in 2024. The current year included $94.6 million of acquisition costs, $9.5 million of additional interest expense related to the Steelcase transaction, the $7.7 million impairment of intangible assets at a small Workplace Furnishings business, a loss of $6.5 million on the divestiture of HNI India, and $4.6 million of purchase accounting adjustments related to the Steelcase acquisition. Excluding these items, net income increased in the current year driven by higher net sales volume in the legacy HNI businesses and improved net productivity, partially offset by higher core Selling and administrative expenses ("SG&A").

Results of Operations

The following table presents certain results of operations:

2025

2024

Change

Net sales

$

2,839.0 

$

2,526.4 

12.4 

%

Cost of sales

1,662.9 

1,493.0 

11.4 

%

Gross profit

1,176.1 

1,033.4 

13.8 

%

Selling and administrative expenses

937.0 

820.7 

14.2 

%

Acquisition costs

94.6 

— 

NM

Restructuring, impairment, and loss on divestiture

18.5 

6.2 

201 

%

Operating income

126.0 

206.5 

(39.0)

%

Interest expense, net

35.6 

27.2 

30.7 

%

Other non-operating income, net

0.4 

— 

NM

Income before income taxes

90.8 

179.3 

(49.4)

%

Income tax expense

36.5 

39.8 

(8.2)

%

Net income attributable to non-controlling interest

0.0 

0.0 

NM

Net income attributable to HNI Corporation

$

54.2 

$

139.5 

(61.1)

%

As a Percentage of Net Sales:

Net sales

100.0

%

100.0

%

Gross profit

41.4

40.9

50

 bps

Selling and administrative expenses

33.0

32.5

50

 bps

Acquisition costs

3.3

—

330

 bps

Restructuring, impairment, and loss on divestiture

0.7

0.2

50

 bps

Operating income

4.4

8.2

-380

 bps

Income tax expense

1.3 

1.6

-30

 bps

Net income attributable to HNI Corporation

1.9 

5.5 

-360

 bps

Net Sales

Consolidated net sales for 2025 increased 12.4 percent compared to the prior year. The change was driven by $187.5 million of favorable impact from the acquisition of Steelcase in the current year along with volume growth and price realization in both the Residential Building Products and Workplace Furnishings segments. These factors were partially offset by a $16.2 million decrease in net sales from the divestiture of HNI India in the second quarter of 2025.

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Gross Profit

Gross profit as a percentage of net sales increased 50 basis points in 2025 compared to 2024, driven by improved net productivity. Gross profit contains $2.2 million of Steelcase purchase accounting adjustments for inventory step-up and additional depreciation for the preliminary valuation adjustment to property, plant and equipment.

Selling and Administrative Expenses

Selling and administrative expenses as a percentage of net sales increased 50 basis points in 2025 compared to 2024. This increase was driven by wage inflation, the impacts from the acquisition of Steelcase, and higher core SG&A, partially offset by higher net sales in the legacy HNI businesses. Selling and administrative expenses includes $2.4 million of Steelcase purchase accounting adjustments related to amortization of intangibles and additional depreciation for the preliminary valuation.

Acquisition Costs

In the current year the Corporation recorded costs of $94.6 million associated with the Steelcase acquisition. Acquisition costs consist primarily of change in control compensation expenses, transaction success fees, and other professional services fees. See "Note 4. Acquisitions and Divestitures" in the Notes to the Consolidated Financial Statements for further information.

Restructuring, Impairment, and Divestitures

In the current year the Corporation recorded charges of $18.5 million primarily in connection with the impairment of intangible assets related to a small business unit in the Workplace Furnishings segment, the loss on divestiture of the HNI India business, and the Corporation's network optimization program. Prior-year restructuring and impairment charges of $6.2 million were primarily incurred in connection with the Corporation's network optimization program.

Operating Income

In 2025, operating margin decreased 380 basis points compared to 2024 driven by acquisition costs and restructuring, impairment and divestiture charges. Excluding these items, operating margin was flat year-over-year with higher net sales volume in the legacy HNI businesses and improved net productivity, offset by impacts from the acquisition of Steelcase and higher core SG&A.

Interest Expense, Net

Interest expense, net was $35.6 million and $27.2 million in 2025 and 2024, respectively. The increase was driven by higher average outstanding borrowings incurred to fund the acquisition of Steelcase.

Income Taxes

The following table summarizes the Corporation’s income tax provision:

2025

2024

Income before income taxes

$

90.8 

$

179.3 

Income tax expense

$

36.5 

$

39.8 

Effective tax rate

40.2

%

22.2

%

The income tax provision reflects a higher rate in 2025 compared to the prior year, primarily due to the impact of acquisition costs and parachute compensation payments for acquisition of Steelcase. See "Note 8. Income Taxes" in the Notes to Consolidated Financial Statements for further information relating to income taxes.

Net Income Attributable to HNI Corporation

Net income attributable to the Corporation was $54.2 million or $1.11 per diluted share in 2025 compared to $139.5 million or $2.88 per diluted share in 2024.

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Workplace Furnishings

The following table presents certain results of operations in the Workplace Furnishings segment:

2025

2024

Change

Net sales

$

2,164.1 

$

1,888.0 

14.6

%

Operating income

$

183.0 

$

169.1 

8.3

%

Operating income %

8.5 

%

9.0 

%

-50

 bps

Net sales in 2025 for the Workplace Furnishings segment increased 14.6 percent compared to 2024. The acquisition of Steelcase increased segment net sales by $187.5 million over the prior year, partially offset by a $16.2 million decrease in net sales from the divestiture of HNI India in the second quarter of 2025. Excluding the impact of this transaction, segment net sales were up 4.7 percent driven by improved volume and price across most channels, with the exception of Hospitality which saw decreases in both volume and price.

Operating income as a percentage of net sales compressed 50 basis points in 2025 compared to 2024. The decrease was driven by impacts from the acquisition of Steelcase, unfavorable price-cost, and higher core SG&A, partially offset by improved net productivity and higher net sales volume. Operating income includes $4.6 million of purchase accounting costs related to inventory step-up, intangible amortization and additional depreciation related to the preliminary valuation of Steelcase.

Residential Building Products

The following table presents certain results of operations in the Residential Building Products segment:

2025

2024

Change

Net sales

$

674.9 

$

638.4 

5.7

%

Operating income

$

121.8 

$

110.8 

9.9

%

Operating income %

18.0

%

17.4

%

60

 bps

Net sales in 2025 for the Residential Building Products segment increased 5.7 percent compared to 2024. Remodel/retrofit net sales increased year-over-year, while new construction was flat.

Operating income as a percentage of net sales increased 60 basis points in 2025 compared to 2024. The increase was driven by favorable price-cost, partially offset by higher variable compensation.

Liquidity and Capital Resources

Cash, cash equivalents, and short-term investments totaled $215.7 million at the end of 2025, compared to $28.9 million at the end of 2024. These funds, coupled with cash flow from future operations, borrowing capacity expected to be available under the Corporation’s existing credit agreements, and the continued ability to access capital markets, are expected to be adequate to fund operations and satisfy the Corporation's cash flow needs for at least the next twelve months. As of January 3, 2026, the Corporation can access the full $425 million of borrowing capacity available under the revolving credit facility, which includes the $15.0 million of borrowings outstanding as of that date, and maintain compliance with financial covenants under its debt agreements. As of the end of 2025, $54 million of cash was held outside of the United States.

Cash Flow – Operating Activities

Operating cash flows were $276.3 million in 2025, compared to $226.7 million in 2024. The increase was driven by favorable cash tax impacts including those resulting from the One Big Beautiful Bill Act (“OBBBA”). Working capital was a source of cash in 2025, compared to a use of cash in 2024. These factors were partially offset by lower net income in 2025 as described in the preceding "Results of Operations" section.

The Corporation places special emphasis on management and control of working capital, including accounts receivable and inventory. Management believes recorded trade receivable valuation allowances at the end of 2025 are adequate to cover the risk of potential bad debts. Allowances for non-collectible trade receivables, as a percent of gross trade receivables, totaled 0.2 percent and 0.8 percent at the end of 2025 and 2024, respectively. The decrease in allowances for non-collectible trade receivables as a

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percent of gross trade receivables was driven by the addition of Steelcase's receivables as a result of the acquisition. The Corporation’s inventory turns were 8.7 and 7.6 for 2025 and 2024, respectively. Inventory turns in the current year have been normalized for the impact of half a month of Steelcase activity.

Cash Flow – Investing Activities

Capital Expenditures - Capital expenditures, including capitalized software, were $67.8 million in 2025 and $52.9 million in 2024. The current-year capital expenditures were primarily applied to machinery, equipment, and tooling required to support continuing operations, continuous improvements, and cost savings initiatives in the manufacturing processes. Additionally, in support of the Corporation's long-term strategy to create effortless winning experiences for customers, the Corporation continues to invest in technology and digital capabilities. The Corporation expects capital expenditures for 2026 to be in the range of $140 million to $150 million.

Acquisitions and Divestitures - Investing activities in 2025 included expenditures of $390.3 million to acquire Steelcase, net of cash acquired, including restricted cash classified as "Other Assets" in the Consolidated Balance Sheets, and $8.1 million received from the sale of HNI India (net of costs to sell). See "Note 4. Acquisitions and Divestitures" in the Notes to the Consolidated Financial Statements for further information.

Cash Flow – Financing Activities

Debt - The Corporation maintains a revolving credit facility as the primary source of committed funding from which the Corporation finances its planned capital expenditures, strategic initiatives, and seasonal working capital needs. Cash flows included in financing activities for the current and prior periods include periodic borrowings and repayments under the revolving credit facility.

Steelcase Acquisition Financing - As described in more detail in "Note 7. Debt" in the Notes to the Consolidated Financial Statements, in connection with the Steelcase acquisition, the Corporation entered into a Credit Agreement on September 5, 2025 (the “Effective Date”), establishing (i) a senior secured revolving credit facility, (ii) a senior secured TLA Facility, and (iii) a senior secured TLB Facility.

Upon the completion of the acquisition on December 10, 2025, the Corporation incurred borrowings under the Credit Agreement facilities described above to repay and retire previous credit facilities and to fund the completion of the Steelcase acquisition. The extinguishment of prior facilities included the retirement of the Corporation’s previous unsecured revolving credit facility, term loan A facility, and private placement notes outstanding.

As of January 3, 2026, the Corporation had the following borrowings outstanding related to the acquisition and ongoing financing of business operations: $15 million of borrowings under the $425 million revolving credit facility, $350 million of borrowings under the TLA Facility, and $500 million of borrowings under the TLB Facility.

Dividend - The Corporation is committed to maintaining or modestly growing the quarterly dividend. Cash dividends declared and paid per share are as follows:

2025

2024

Dividends per common share

$

1.35 

$

1.31 

The last quarterly dividend increase was from $0.33 to $0.34 per common share effective with the June 11, 2025 dividend payment for shareholders of record at the close of business on May 23, 2025. The average dividend payout percentage for the most recent three-year period has been 58 percent of prior-year earnings or 32 percent of prior-year cash flow from operating activities.

Stock Repurchase - The Corporation’s long-term strategy related to stock repurchases is focused on offsetting the dilutive impact of issuances of common stock pursuant to equity awards granted for various compensation-related matters. The Corporation may elect to opportunistically purchase additional shares based on excess cash generation and/or share price considerations. In 2025, the Corporation spent $83.6 million to repurchase 1.8 million shares of its common stock. As of January 3, 2026, $84.3 million was authorized and available for repurchase of shares by the Corporation. See "Note 10. Accumulated Other Comprehensive Income (Loss) and Shareholders’ Equity" in the Notes to Consolidated Financial Statements for further information.

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Sales of Stock - The Corporation records cash flows received from the sale of its common stock held in treasury, primarily in connection with stock option exercises and the HNI Corporation Members’ Stock Purchase Plan. The approximately $50 million decrease in cash proceeds in the current year was due to a significant uptick in stock options exercised in the prior year, driven by growth in the market value per share of the Corporation's common stock. See "Note 10. Accumulated Other Comprehensive Income (Loss) and Shareholders’ Equity" and "Note 11. Stock-Based Compensation" in the Notes to Consolidated Financial Statements for further information.

Company Owned Life Insurance (“COLI”) - The Corporation holds certain investments in COLI assets. The COLI investments are intended to be held to maturity but are recorded at net current cash surrender value. The Corporation has the option to draw against the cash surrender value of the policies without forgoing the long-term maturity benefits of the investment or surrender the policies for their cash surrender value. During the fourth quarter of 2025, the Corporation borrowed $32 million against the COLI investments.

Cash Requirements

As of January 3, 2026, the Corporation has the following principal obligations and commitments to make future payments:

Purchase Obligations - The Corporation’s purchase obligations include agreements to purchase goods or services that are enforceable, legally binding, and specify all significant terms, including the quantity to be purchased, the price to be paid, and the timing of the purchase. Estimated purchase obligations total $154 million during 2026 and $41 million thereafter.

Debt - Debt principal obligations are approximately $16 million during 2026 and $1,301 million thereafter. Interest obligations from debt are estimated to be approximately $71 million during 2026 and $289 million thereafter. See "Note 7. Debt" in the Notes to Consolidated Financial Statements for additional information.

Employee Benefit Obligations - Deferred compensation cash obligations related to legacy HNI plans are expected to be approximately $0.3 million during 2026 and $3.9 million thereafter. For legacy HNI post-retirement benefit plans, payments are expected to be approximately $1 million during 2026 and $10 million in aggregate from 2027 through 2035. For legacy Steelcase employee benefit plans, payments are expected to be approximately $65 million during 2026 and $82 million in aggregate from 2027 through 2035. See "Note 12. Employee Benefit Plan Obligations" in the Notes to Consolidated Financial Statements for additional information on legacy HNI and legacy Steelcase plan obligations. Obligations related to the Kimball International supplemental employee retirement plan are expected to be $5 million during 2026 and $7 million thereafter. See "Note 2. Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements for additional information.

Operating and Finance Leases - Operating and finance lease obligations are expected to be approximately $90 million during 2026 and $273 million thereafter. There were no material commitments related to leases which had been signed but not commenced as of the end of 2024. See "Note 13. Leases" in the Notes to Consolidated Financial Statements for additional information.

Other Obligations - Other long-term obligations of approximately $34 million are primarily comprised of statutory benefits for certain overseas workers, a put option, and uncertain tax liabilities. Additionally, in 2022 the Corporation entered into a long-term commitment to purchase solar energy from a local utility to satisfy a portion of the Corporation’s electricity demand in the Muscatine, Iowa area. The Corporation’s future commitment to the project totals approximately $13 million. The commencement of the project was initially estimated to be in 2025, but has been delayed. For the Corporation’s estimated future obligations related to product warranties and self-insured liabilities, see "Note 2. Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements.

Litigation and Uncertainties

See "Note 14. Guarantees, Commitments, and Contingencies" in the Notes to Consolidated Financial Statements for further information.

Looking Ahead

The Corporation continues to navigate near-term uncertainty driven by macroeconomic conditions, including the recent dynamics around housing, cost inflation, and interest rates. However, management remains optimistic about the long-term prospects in the workplace furnishings and residential building products markets. Management believes the Steelcase Inc. acquisition will generate new opportunities for growth, and the Corporation continues to compete well in its legacy business markets.

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Critical Accounting Policies and Estimates

General

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon the Consolidated Financial Statements, prepared in accordance with Generally Accepted Accounting Principles ("GAAP"). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development, selection, and disclosure of these estimates with the Audit Committee of the Board of Directors. Actual results may differ from these estimates under different assumptions or conditions.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. Management believes the following critical accounting policies reflect its more significant estimates and assumptions used in the preparation of the Consolidated Financial Statements.

Business Combinations and Fair Value Measurements

The Company accounts for business combinations using the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed are recorded at their estimated values as of the acquisition date. Determining the fair value of acquired assets and assumed liabilities requires management to make significant estimates and assumptions, particularly with respect to the fair values of the acquired inventory, property, plant and equipment, lease assets and liabilities, investments in unconsolidated affiliates and intangible assets. Management may engage a third-party valuation specialist to assist in developing those estimates. Fair value measurements are based on information available at the acquisition date and involve the use of valuation techniques that require judgment, including the selection of assumptions related to future cash flows, revenue growth rates, customer attrition, royalty rates, discount rates, useful lives, comparable property transactions, and price per square foot as well as other market participant expectations.

In certain acquisitions, such as the Steelcase Inc. acquisition, due to the proximity of the acquisition closing date to the end of a reporting period, the Corporation may record preliminary purchase price allocations for acquired assets and assumed liabilities. In this circumstance, the valuation approach applied was a benchmarking analysis based on publicly disclosed comparable transactions and available market data to develop preliminary estimates of the fair value of the acquired assets such as inventory, property, plant and equipment, and intangible assets, when complete valuation inputs are not yet available. The Corporation uses the information from comparable transactions to derive preliminary allocation percentage assumptions to estimate the value of the acquired assets. These preliminary estimates will be refined as additional information becomes available during the measurement period, which may result in material adjustments to the recorded amounts of the acquired assets and liabilities, including goodwill, and could affect depreciation, amortization, and other accounts in future periods.

Goodwill

The Corporation evaluates its goodwill for impairment on an annual basis during the fourth quarter (using a valuation date as of the start of the Corporation's fourth quarter) or whenever indicators of impairment exist.

The Corporation reviews goodwill at the reporting unit level, which refers to components for which discrete financial information is available and regularly reviewed by segment management. The accounting standards for goodwill permit entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. If the quantitative test is required, the Corporation estimates the fair value of its reporting units based on a weighted average of the income approach and the market approach. This estimated fair value is compared to the carrying value of the reporting unit and an impairment is recorded if the estimate is less than the carrying value. In the income approach, the estimate of fair value of each reporting unit is based on management’s projection of revenues, gross margin, operating costs, and cash flows considering historical and estimated future results, general economic and market conditions, and the impact of planned business and operational strategies. The valuations employ present value techniques to measure fair value and consider market factors. In the market approach, the Corporation utilizes the guideline company method, which involves calculating valuation multiples based on operating data from guideline publicly-traded companies. These multiples are then applied to the operating data for the reporting units and adjusted for

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factors similar to those used in the discounted cash flow analysis. Management believes the assumptions used for the quantitative impairment test, if required, are consistent with those utilized by a market participant in performing similar valuations of its reporting units. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates.

Assessing the fair value of a reporting unit includes, among other things, making key assumptions for estimating future cash flows and appropriate market multiples. These assumptions are subject to a high degree of judgment and complexity. The Corporation makes every effort to estimate future cash flows as accurately as possible with the information available at the time the forecast is developed. However, changes in assumptions and estimates may affect the estimated fair value of the reporting unit, and could result in an impairment charge in future periods. Factors that have the potential to create variances in the estimated fair value of the reporting unit include, but are not limited to, economic conditions in the United States and other countries where the Corporation has a presence, competitor behavior, the mix of product sales, commodity costs, wage rates, the level of manufacturing capacity, the pricing environment, and currency exchange fluctuations. In addition, estimates of fair value are impacted by estimates of the market-participant derived weighted average cost of capital. Changes in this assumption could have a significant effect on the estimated fair value of the reporting unit.

The key to recoverability of goodwill is the forecast of economic conditions and its impact on future revenues, operating profit, and cash flows. Management’s projection for the United States office furniture and domestic hearth markets and global economic conditions is inherently subject to a number of uncertain factors, such as global economic improvement, the United States housing market, credit availability, borrowing rates, and overall consumer confidence. In the near term, as management monitors the above factors, it is possible it may change the revenue and cash flow projections of certain reporting units, which may require the recording of additional goodwill impairment charges.

As discussed in "Note 6. Goodwill and Other Intangible Assets" in the Notes to Consolidated Financial Statements, management performed a qualitative goodwill impairment test in the fourth quarter of 2025 for the majority of the Corporation's reporting units. Goodwill associated with the Steelcase acquisition was not included in the testing due to the timing of the acquisition. Management was comfortable with a qualitative test in 2025 due to the quantitative testing completed in 2024. For a small workplace furnishing reporting unit, management concluded that a triggering event occurred in the fourth quarter of 2025, resulting in quantitative impairment tests for goodwill. This testing resulted in no goodwill impairment charges recorded.

As described in "Note 4. Acquisitions and Divestitures" in the Notes to Consolidated Financial Statements, in 2025 the Corporation acquired Steelcase Inc. in a transaction valued at $1.9 billion, resulting in the preliminary addition of $515.9 million of goodwill, all of which was assigned to the Workplace Furnishings segment. Recently acquired goodwill assigned to a new reporting unit generally has a higher inherent valuation risk, relative to goodwill assigned to reporting units that historically have had a large excess of fair value over carrying value.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the Financial Accounting Standards Board issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 aims to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of costs and expenses, including purchases of inventory, employee compensation, selling expenses, depreciation, and intangible asset amortization within commonly presented captions on the face of the income statement. Disclosures are required to be made on an annual and interim basis in a tabular format in the footnotes to the financial statements. The ASU becomes effective for the Corporation for its fiscal year ending December 2027, and for interim periods beginning with the first fiscal quarter of 2028, and may be applied either prospectively or retrospectively. Early adoption is permitted. The Corporation is currently evaluating the impact of adopting this guidance to the Consolidated Financial Statements.

In September 2025, the Financial Accounting Standards Board issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 modernizes internal-use software guidance, eliminating accounting consideration for software development stages, requiring cost capitalization when management has authorized and is committed to funding the project and it is probable the projected will be completed and the software used for its intended function. The ASU becomes effective beginning with the first fiscal quarter of 2028, and may be applied either prospectively or retrospectively. Early adoption is permitted. The Corporation is currently evaluating the impact of adopting this guidance to the Consolidated Financial Statements.

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