HNI CORP

HNI Corporation and Subsidiaries

Notes to Consolidated Financial Statements

January 3, 2026

Note 1. Nature of Operations

HNI Corporation (individually and together with its consolidated subsidiaries the "Corporation" or "HNI") is a provider of workplace furnishings and residential building products. Refer to "Note 15. Reportable Segment Information" for further information. Workplace furnishings products include furniture systems, seating, storage, tables, architectural products, ancillary products, and hospitality products. These products are sold primarily through a national system of independent dealers and office product distributors but also directly to end-user customers and federal, state, and local governments. Residential building products include a full array of gas, wood, electric, and pellet-fueled fireplaces, inserts, stoves, facings, outdoor fire pits and fire tables, and accessories. These products are sold through a national system of independent dealers and distributors, as well as Corporation-owned distribution and retail outlets. The Corporation’s products are marketed predominantly in the United States and Canada. The Corporation exports select products through its export subsidiary to a limited number of markets outside North America, principally the Caribbean, Latin America, and Mexico. All dollar amounts presented are in millions, except per share data or where otherwise indicated. Amounts may not sum due to rounding.

Fiscal year-end – 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 the financial statements for 2024 and 2023 are on a 52-week basis. A 53-week year occurs approximately every sixth year.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts and transactions of the Corporation and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

On December 10, 2025, the Corporation acquired Steelcase Inc. ("Steelcase"), and on June 1, 2023, the Corporation acquired Kimball International. The Corporation included the financial results of Steelcase and Kimball International in the Consolidated Financial Statements starting as of the dates of their respective acquisitions. See "Note 4. Acquisitions and Divestitures" for further information.

Investments in entities where equity ownership falls between 20% and 50%, or where the Corporation otherwise has significant influence, are accounted for under the equity method of accounting. All other investments in unconsolidated affiliates without readily determinable fair values are measured at cost, less impairment, adjusted for observable price changes. These investments are reported as "Other Assets" in the Consolidated Balance Sheets, and income (losses) these investments are reported in "Other non-operating income, net" in the Consolidated Statements of Comprehensive Income. See "Note 19. Investments in Unconsolidated Affiliates" for further information.

Reclassifications

Certain reclassifications have been made within the financial statements to conform to the current year presentation.

Cash, Cash Equivalents, and Investments

Cash and cash equivalents generally consist of cash and money market accounts. The fair value approximates the carrying value due to the short duration of the securities. These securities have original maturity dates not exceeding three months. The Corporation has short-term debt securities holdings with maturities of less than one year, as well as investment holdings with maturities between one and five years. Restricted cash primarily consists of funds held in escrow for potential future workers' compensation and product liability claims. Management classifies investments in marketable securities at the time of purchase and reevaluates such classification at each balance sheet date.

Debt securities, including government and corporate bonds, are classified as available-for-sale and stated at current market value with unrealized gains and losses included as a separate component of equity, net of any related tax effect. The specific identification method is used to determine realized gains and losses on the trade date. Debt securities also include an auction rate security, which is not widely traded and therefore does not currently have a readily determinable market value. To estimate fair value, the Corporation used an internally-developed discounted cash flow analysis.

Mutual funds, which are classified as trading securities recognized at fair value, are held in a supplemental employee retirement plan ("SERP") acquired as part of the acquisition of Kimball International. Offsetting SERP liabilities, representing the obligation to distribute SERP investments to the participants, are recorded in the "Current maturities of other long-term obligations" and "Other Long-Term Liabilities" lines of the Consolidated Balance Sheets. Realized and unrealized gains and losses on the SERP investments are fully offset by adjustments to the SERP liabilities, resulting in no impact to net income. The SERP is structured as a rabbi trust, and therefore the assets in this plan are subject to credit claims in the event of bankruptcy.

Cash, cash equivalents, and investments are reflected in the Consolidated Balance Sheets and were as follows:

The following table summarizes the amortized cost basis of the debt securities:

Immaterial unrealized gains and losses are recorded in "Accumulated other comprehensive income (loss)" in the Consolidated Balance Sheets for these debt securities. Immaterial amounts of accrued interest receivable related to the Corporation’s portfolio are recorded in "Prepaid expenses and other current assets."

Receivables

Trade receivables are recorded at amortized cost, net of an allowance for credit losses. The allowance is developed based on several factors including overall customer credit quality, historical write-off experience, and specific account analyses projecting the ultimate collectibility of the account. The following table summarizes the change in the allowance for credit losses:

Inventories

The Corporation’s residential building products inventories, and a majority of its workplace furnishings inventories, are valued at cost, on the "last-in, first-out" (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the "first-in, first-out" (FIFO) basis, or net realizable value. Inventories included in the Consolidated Balance Sheets consisted of the following:

In 2025, inventory quantities were reduced at certain business units, resulting in a liquidation of LIFO inventory quantities carried at costs prevailing in prior years as compared with the cost of current year purchases, the effect of which increased cost of sales by approximately $1.3 million. In 2024, there wasno material liquidations of established LIFO layers. If only the FIFO method had been in use, inventories would have been $52.7 million and $47.5 million higher than reported as of January 3, 2026 and December 28, 2024, respectively.

In addition to the LIFO allowance, the Corporation recorded inventory allowances reducing finished products, materials, and work in process of $9.7 million and $12.1 million as of January 3, 2026 and December 28, 2024, respectively, to adjust for excess and obsolete inventory or otherwise reduce FIFO-basis inventory to net realizable value.

The increase in inventory balances in the current year is the result of the acquisition of Steelcase which includes a preliminary adjustment to step-up inventory acquired that could change materially with the finalization of the valuation. The acquisition of Steelcase also impacted the portion of inventory valued at the LIFO costing method as Steelcase foreign held inventory is not valued at LIFO and therefore dilutes the total inventory valued by the LIFO costing method.

Property, Plant, and Equipment

Property, plant, and equipment are carried at cost less accumulated depreciation. Expenditures for repairs and maintenance are expensed as incurred. Major improvements that materially extend the useful lives of the assets are capitalized. Depreciation has been computed using the straight-line method over estimated useful lives: land improvements,10 –20 years; buildings,10 –40 years; and machinery and equipment,3 –12 years.

Total depreciation expense was as follows:

Long-Lived Assets

The Corporation evaluates long-lived assets, including definite-lived intangible assets, for indicators of impairment as events or changes in circumstances occur indicating that an impairment risk may be present. The judgments regarding the existence of impairment are based on business and market conditions, operational performance, and estimated future cash flows. If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded to adjust the asset to its estimated fair value.

Cloud Computing Arrangements

The Corporation capitalizes implementation costs of a cloud computing arrangement with a useful life greater than one year consistent with the capitalization criteria used for internal-use software. Costs incurred during the application-development phase, subject to certain exceptions, are capitalized after the preliminary project phase is completed and management commits to funding the project. Capitalized costs include fees paid to consultants to implement the software, payroll and payroll-related costs of employees to the extent of the time spent directly on the project and interest costs, if appropriate. Capitalized costs are recorded to

"Other assets" on the Consolidated Balance Sheets and within "Net increase (decrease) in cash from operating assets and liabilities" on the Consolidated Statements of Cash Flows.

Capitalization of costs ceases at the point when the software associated with the cloud computing arrangement is ready for its intended use. Subsequent enhancements or upgrades are capitalized only to the extent that they add significant new functionality, and maintenance costs are expensed as incurred. Amortization of capitalized costs is recorded over the initial term of the related cloud computing arrangement, including renewal periods that are reasonably certain to be exercised.

In the fourth quarter of 2025, as part of the Steelcase acquisition, the Corporation acquired an asset representing capitalized costs related to the implementation of a new enterprise resource planning ("ERP") system. As of January 3, 2026, the Corporation has capitalized$95.7 million of costs primarily related to development activities incurred in the implementation of the new ERP system. This value is preliminary and may change materially with the finalization of the valuation of the assets acquired during the measurement period.

Goodwill and Other Intangible Assets

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. Asset impairment charges associated with the Corporation’s goodwill impairment testing are discussed in "Note 6. Goodwill and Other Intangible Assets."

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 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 using weighted average cost of capital assumptions 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 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 they believe to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates.

The Corporation also evaluates the fair value of indefinite-lived trade names on an annual basis during the fourth quarter (using a valuation date as of the start of the Corporation's fourth quarter) or whenever an indication of impairment exists. Consistent with goodwill impairment testing, a qualitative assessment may be performed to determine whether it is more likely than not the fair value of indefinite-lived trade names is less than the carrying amount. If it is determined necessary to perform a quantitative test, the estimate of the fair value of the trade names is based on a discounted cash flows model using inputs which include projected revenues, assumed royalty rates that would be payable if the trade names were not owned, and discount rates.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are reflected in the Consolidated Balance Sheets and were as follows:

The increase in accounts payable and accrued expenses in the current year was driven by the acquisition of Steelcase.

Product Warranties

The Corporation issues certain warranty policies on its workplace furnishings and residential building products that provide for repair or replacement of any covered product or component that fails during normal use because of a defect in design, materials, or workmanship. The duration of warranty policies on the Corporation’s products varies based on the type of product. Allowances have been established for the anticipated future costs associated with the Corporation’s warranty programs.

A warranty allowance is determined by recording a specific allowance for known warranty issues and an additional allowance for unknown claims expected to be incurred based on historical claims experience. Actual claims incurred could differ from the original estimates, requiring adjustments to the allowance.

Activity associated with warranty obligations was as follows:

The current and long-term portions of the allowance for the estimated settlements are included within "Accounts payable and accrued expenses" and "Other Long-Term Liabilities," respectively, in the Consolidated Balance Sheets. The following table summarizes when these estimated settlements are expected to be paid:

The increase in warranty obligations in the current year was driven by the acquisition of Steelcase Inc.

Pension and Other Post-Retirement Benefits

The Corporation sponsors a number of domestic and foreign plans to provide pension benefits and medical and life insurance benefits to retired employees. The Corporation measures the net over-funded or under-funded positions of its defined benefit pension plans and post-retirement benefit plans as of the end of each fiscal year and reports that position as an asset or liability on the Consolidated Balance Sheets. Any unrecognized prior service credit (cost) or actuarial gains (losses) are reported, net of tax, as a component of "Accumulated other comprehensive income (loss)" in the Consolidated Balance Sheets. See "Note 12. Employee Benefit Plan Obligations" for further information.

Revenue Recognition

Performance Obligations - The Corporation recognizes revenue for sales of workplace furnishings and residential building products at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment of the product. In certain circumstances, transfer of control to the customer does not occur until the goods are received by the customer or upon installation and/or customer acceptance, depending on the terms of the underlying contracts. Contracts typically have a duration of less than one year and normally do not include a significant financing component. Generally, payment is due within 30 days of invoicing.

Significant Judgments - The amount of consideration the Corporation receives and revenue recognized varies with changes in rebate and marketing program incentives, as well as early pay discounts, offered to customers. The Corporation uses significant judgment throughout the year in estimating the reduction in net sales driven by variable consideration for rebate and marketing programs. Judgments made include expected sales levels and utilization of funds. However, this judgment factor is significantly reduced at the end of each year when sales volumes and the impact to rebate and marketing programs are known and recorded as the programs typically end near the Corporation’s fiscal year end.

Accounting Policies and Practical Expedients:

•The Corporation applies the accounting policy election which allows an entity to account for shipping and handling activities that occur after control is transferred as fulfillment activities. The Corporation accrues for shipping and handling costs at the same time revenue is recognized, which is in accordance with the policy election. When shipping and handling activities occur prior to the customer obtaining control of the good(s), they are considered fulfillment activities rather than a performance obligation and the costs are accrued for as incurred.

•The Corporation applies the accounting policy election which allows an entity to exclude from the measurement of the transaction price all taxes assessed by a governmental authority associated with the transaction, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). This allows the Corporation to present revenue net of these types of taxes.

•The Corporation applies the practical expedient which permits an entity to recognize incremental costs to obtain a contract as an expense when incurred if the amortization period will be less than one year.

•The Corporation applies the practical expedient which allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if a contract has a duration of one year or less. As the Corporation’s contracts are typically less than one year in length, consideration will not be adjusted.

•The Corporation’s backlog orders are typically cancellable for a period of time and almost all contracts have an original duration of one year or less. As a result, the Corporation elected the practical expedient not to disclose the unsatisfied performance obligation as of period end. The backlog is typically fulfilled within a few months.

Leases

Accounting Policies and Practical Expedients:

•The Corporation has made an accounting election by class of underlying assets to not separate non-lease components of a contract from the lease components to which they relate for all classes of assets except for embedded leases.

•The Corporation has elected for all asset classes to not recognize right of use ("ROU") assets and lease liabilities for leases that at the inception date or business combination date have a remaining lease term of twelve months or less.

Research and Development Costs

Research and development costs relating to development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred. These costs include salaries, contractor fees, prototype costs, and administrative fees. The amounts charged against income and recorded in "Selling and administrative expenses" on the Consolidated Statements of Comprehensive Income were as follows:

Freight Expense

Freight expense on shipments to customers was recorded in "Selling and administrative expenses" on the Consolidated Statements of Comprehensive Income as follows:

Stock-Based Compensation

The Corporation measures the cost of member services in exchange for an award of equity instruments based on the grant-date fair value of the award and generally recognizes cost over the requisite service period. See "Note 11. Stock-Based Compensation" for further information.

Income Taxes

The Corporation uses an asset and liability approach that takes into account guidance related to uncertain tax positions and requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Corporation’s financial statements or tax returns. Deferred income taxes are provided to reflect differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements.

The Organisation for Economic Cooperation and Development ("OECD") issued new regulations in connection with a global minimum tax regime. Known as "Pillar Two," the new regulations went into effect for income tax years starting January 2024, and are part of the OECD’s broader plan to mitigate tax base erosion and profit shifting by large multinational enterprises ("MNE"). Pillar Two applies to MNEs with revenues of at least EUR 750 million. Under its provisions, qualifying MNE groups pay a 15 percent minimum tax in each of the jurisdictions in which they operate. The guidance is principally focused on the application of the transitional country-by-country reporting safe harbor and enables an MNE to avoid both completing a full global anti-base erosion model computation and paying a top-up tax for jurisdictions in which it is eligible for one of three safe harbor tests: (1) de minimis; (2) simplified effective tax rate; and (3) routine profits. Based on the estimated safe harbor simplified effective tax rate computation, management does not currently expect Pillar Two minimum tax to be owed by the Corporation. There is no material impact on the consolidated financial statements from these regulations.

Earnings Per Share

Basic earnings per share are based on the weighted-average number of common shares outstanding during the year. Shares potentially issuable under stock options, restricted stock units, and common stock equivalents under the Corporation’s deferred compensation plans have been considered outstanding for purposes of the diluted earnings per share calculation.

The following table reconciles the numerators and denominators used in the calculation of basic and diluted earnings per share ("EPS"):

The year-over-year increase in shares outstanding in 2025 is primarily due to the issuance of 25.2 million shares in December 2025 as part of the consideration to acquire Steelcase. These shares were outstanding for three weeks of December. The impact of this issuance will be more pronounced in the coming year.

The weighted-average common stock equivalents presented above do not include the effect of the common stock equivalents in the table below because their inclusion would be anti-dilutive:

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Areas requiring significant use of management estimates relate to goodwill and intangibles, asset valuations in connection with business combinations, accruals for self-insured medical claims, workers’ compensation, legal contingencies, general liability and auto insurance claims, valuation of long-lived assets, and estimates of income taxes. Other areas requiring use of management estimates relate to the allowance for credit losses, inventory allowances, marketing program accruals, warranty accruals, and useful lives for depreciation and amortization. Actual results could differ from those estimates.

Self-Insurance

HNI without giving effect to its acquisition of Steelcase ("Legacy HNI") is primarily self-insured for general, auto, and product liability, workers’ compensation, and certain member health benefits. Steelcase is self-insured for workers' compensation and product liability. Certain risk exposures are mitigated through the use of independent third-party stop loss insurance coverages. The general, auto, product, and workers’ compensation liabilities for Legacy HNI are managed using a wholly-owned insurance captive and the related liabilities are included in the Consolidated Balance Sheets as follows:

The preceding table excludes self-insured member health and other benefit liabilities at Legacy HNI of $6.1 million and $6.2 million as of January 3, 2026 and December 28, 2024, respectively. Steelcase worker's compensation liabilities and product liabilities of $4.9 million as of January 3, 2026, are also excluded above.

The Corporation’s policy is to accrue amounts in accordance with the actuarial determined liabilities. 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 cost inflation, and magnitude of change in actual experience development could cause these estimates to change in the future.

Foreign Currency Translations

Foreign currency financial statements of foreign operations, where the local currency is the functional currency, are translated using exchange rates in effect at period end for assets and liabilities and average exchange rates during the period for results of operations. Related translation adjustments are reported as a component of Shareholders’ Equity.

Foreign currency exchange gains and losses reflect transaction gains and losses, which arise from monetary assets and liabilities denominated in currencies other than a business unit’s functional currency and are recorded in Other non-operating income, net in the Consolidated Statements of Comprehensive Income.

Foreign Exchange Forward Contracts

A portion of the Corporation's revenue and earnings is exposed to changes in foreign exchange rates. The Corporation seeks to manage its foreign exchange risk largely through operational means, including matching revenues with same currency costs and assets with same currency liabilities. Foreign exchange risk is also partially managed through the use of derivative instruments. Foreign exchange forward contracts serve to reduce the risk of conversion or remeasurement of certain foreign denominated transactions, assets and liabilities. The Corporation primarily uses derivatives for intercompany transactions (including loans) and certain forecasted currency flows from foreign-denominated transactions. The foreign exchange forward contracts primarily relate to the euro, the Mexican peso, the Australian dollar, the Malaysian ringgit, the Chinese renminbi, and the United Kingdom pound sterling.

Net fair value of assets and liabilities related to foreign exchange forward contracts as of January 3, 2026 is $1.8 million. The notional amounts of the outstanding foreign exchange forward contracts were $68.9 million as of January 3, 2026. Net gains (losses) recognized in the Consolidated Statements of Comprehensive Income from settled foreign exchange forward contracts in 2025 were not material.

Recently Adopted Accounting Standards

In December 2025, the Corporation adopted ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures retrospectively for all periods presented in the consolidated financial statements. ASU 2023-09 enhances transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and disaggregation of income taxes paid by jurisdiction. Additionally, the ASU requires disclosure of pretax income (or loss) and income tax (or benefit) disaggregated by domestic and foreign. Finally, the ASU removes the requirement of certain disclosures related to unrecognized tax benefits. The ASU adoption did not have a material impact on the Corporation's financial statements. See "Note 8. Income Taxes."

Note 3. Revenue from Contracts with Customers

Disaggregation of Revenue

Revenue from contracts with customers disaggregated by product category is as follows:

(1) The Other category consists of education-specific furnishings, architectural products, workspace accessories, and miscellaneous product lines and services.

Sales by product category are subject to similar economic factors and market conditions. See "Note 15. Reportable Segment Information" for further information about operating segments.

Contract Liabilities

The Corporation has contract liabilities consisting of customer deposits included in "Accounts payable and accrued expenses" in the Consolidated Balance Sheets and are as follows:

Approximately $68.1 million of the increase in customer deposits in the current year is driven by the acquisition of Steelcase. See "Note 4. Acquisitions and Divestitures" for further information.

Contract liabilities for customer deposits paid to the Corporation prior to the satisfaction of performance obligations are recognized as revenue upon satisfaction of the performance obligations. Revenue recognized during the years ended January 3, 2026 and December 28, 2024 related to contract liability balances at the beginning of each year was $42.1 million and $35.1 million, respectively.

In addition to trade receivables, the Corporation has other assets consisting of funds paid up-front to certain workplace furnishings dealers in exchange for their multi-year commitment to market and sell the Corporation’s products. These assets are amortized over the term of the contracts and recognized as a reduction of revenue and are as follows in the Consolidated Balance Sheets:

Note 4. Acquisitions and Divestitures

Acquisition - Steelcase

On December 10, 2025, HNI completed its acquisition of Steelcase, a global design and furniture company that maintained its principal executive office in Grand Rapids, Michigan. As a result of the acquisition, Steelcase became a wholly-owned subsidiary of HNI and is part of the Workplace Furnishings segment. The transaction, as described below, involved payment of total fair market value consideration of approximately $1.9 billion, including total cash consideration of $864.5 million, share consideration valued at $1.0 billion and replacement share-based awards valued at $45.4 million (the "Steelcase acquisition"). Of the $864.5 million, $37.6 million of cash consideration represents the value of the equivalent shares for which service was provided by the grantees prior to December 10, 2025 and will be paid as the equivalent shares vest.

Pursuant to the Agreement and Plan of Merger, dated as of August 3, 2025, among HNI, Steelcase and two wholly-owned merger subsidiaries of HNI (Merger Sub I and Merger Sub LLC) (the "Merger Agreement"), (i) Merger Sub Inc. was merged with and into Steelcase (the “First Merger”), whereupon the separate existence of Merger Sub Inc. ceased, and Steelcase continued as the surviving corporation of the First Merger and a direct wholly-owned subsidiary of HNI, and (ii) immediately after the First Merger, Steelcase merged with and into Merger Sub LLC (the “Second Merger,” and, together with the First Merger, the “Mergers”), whereupon the separate existence of Steelcase ceased, and Merger Sub LLC continued as the surviving entity of the Second Merger and a direct wholly-owned subsidiary of HNI.

At the effective time of the First Merger (the “First Effective Time”), each share of Class A common stock, and each share of Class B common stock, no par value, of Steelcase (the “Steelcase Class B Common Stock” and collectively with the Steelcase Class A Common Stock, the "Common Stock"), to the extent issued and outstanding immediately prior to the First Effective Time (other than shares of Steelcase Common Stock held directly by HNI, Merger Sub Inc. or Merger Sub LLC) were converted into, at the election of the holder thereof, the right to receive the consideration such holder elected, as follows (subject to adjustment as described below, the “Merger Consideration”):

•the combination (the “Mixed Consideration”) of (a)0.2192 shares of HNI common stock, par value $1.00 per share (“HNI Common Stock”), and (b) $7.20 in cash; or

•an amount of cash (rounded to two decimal places) (the “Cash Consideration”), equal to the sum of (a) $7.20 and (b) the product obtained by multiplying 0.2192 by the volume-weighted average closing price (rounded to four decimal places) of one share of HNI Common Stock on the NYSE for the 10 consecutive trading days ending on the second full trading day preceding the First Effective Time (the “HNI Common Stock Reference Price”); or

•a number of shares of HNI Common Stock (the “Stock Consideration”) equal to the sum of (a)0.2192 and (b) the quotient (rounded to four decimal places) obtained by dividing $7.20 by the HNI Common Stock Reference Price, in each case without interest and subject to any required tax withholding.

The Merger Consideration paid to holders of Steelcase Common Stock who did not make an election was the Mixed Consideration. The Merger Consideration paid to holders of Steelcase Common Stock electing to receive the Cash Consideration or the Stock Consideration was subject, pursuant to the Merger Agreement, to automatic adjustment, as applicable, to ensure that the total amount of cash paid and the total number of shares of HNI Common Stock issued in the Mergers is the same as what would be paid and issued in the aggregate if all holders of Steelcase Common Stock entitled to the Merger Consideration were to receive the Mixed Consideration at the First Effective Time. No fractional shares of HNI Common Stock were issued in the Mergers, and holders of Steelcase Common Stock received cash in lieu of any fractional shares of HNI Common Stock.

On the terms and subject to the conditions set forth in the Merger Agreement, at the First Effective Time, each outstanding Steelcase equity and cash-based award will be treated as follows:

•Restricted Stock Unit Awards. Each Vested Steelcase RSU Award (as defined in the Merger Agreement) was canceled and converted into the right to receive an amount in cash (without interest and subject to applicable withholding taxes) equal to the product obtained by multiplying (A) the number of shares of Steelcase Common Stock subject to the Steelcase RSU Award (as defined in the Merger Agreement) immediately prior to the First Effective Time by (B) the Cash Consideration; and each Unvested Steelcase RSU Award (as defined in the Merger Agreement) was assumed by HNI and converted into a restricted stock unit award that settled in an amount in cash (that accrues interest) and a number of shares of HNI Common Stock (rounded to the nearest whole share) that the holder would have received if the holder would have converted all of the Steelcase Common Stock underlying the Unvested Steelcase RSU Award based on an election to receive Mixed Consideration with the same terms and conditions as applied to such Unvested Steelcase RSU Award immediately prior to the First Effective Time.

•Deferred Restricted Stock Units. Each Steelcase DSU Award (as defined in the Merger Agreement) was canceled and converted into the right to receive an amount in cash (without interest other than as required pursuant to applicable plan terms and subject to applicable withholding taxes) equal to the product obtained by multiplying (A) the number of shares of Steelcase Common Stock subject to the Steelcase DSU Award immediately prior to the First Effective Time by (B) the Cash Consideration.

•Performance Unit Awards. Each Steelcase PSU Award (as defined in the Merger Agreement) was assumed by HNI and converted into a restricted stock unit award that settled in an amount in cash (that accrues interest) and a number of shares of HNI Common Stock (rounded to the nearest whole share) that the holder would have received if the holder would have converted all of the Steelcase Common Stock underlying the Steelcase PSU Award based on an election to receive Mixed Consideration (with the performance-based vesting condition that applied to the Steelcase PSU Award immediately prior to the First Effective Time deemed attained at the performance level based on Steelcase’s actual performance). The replacement restricted stock unit awards vest over the same remaining vesting period as the original Steelcase PSU Award granted.

•Cash-Based Awards. Each Steelcase Cash-Based Award (as defined in the Merger Agreement) was treated in accordance with the applicable award agreement and Steelcase’s equity plan with the performance-based vesting condition that applied to the Steelcase Cash-Based Award immediately prior to the First Effective Time deemed attained based on Steelcase’s actual performance, and accruing interest for the remainder of the performance period.

•Cash Bonus Opportunity Awards. Each Steelcase CBOA (as defined in the Merger Agreement) was treated in accordance with the applicable award agreement and Steelcase’s equity plan.

Pursuant to the Merger Agreement, at the First Effective Time, (i) the size of the Board of Directors of HNI was increased bytwo to a total oftwelve members and (ii)two members of the Steelcase board of directors were appointed to the Board of Directors of HNI.

HNI obtained revolving and term credit facilities in an aggregate principal amount of $865 million the proceeds of which were used for the consummation of the Mergers, including the payment of the Cash Consideration, the repayment of existing indebtedness of HNI and Steelcase, and the payment of fees, costs and commissions in connection with the foregoing. See “Note 7. Debt.”

During 2025, the Corporation incurred transaction expenses of $94.6 million and $9.5 million which were included in "Acquisition costs" and "Interest expense, net," respectively, in the Consolidated Statements of Comprehensive Income. Acquisition costs include change in control compensation expense, transaction success fees, and other professional services fees. In addition, capitalized costs related to the transaction included $12.0 million of financing fees in "Long-Term Debt", $2.1 million of stock issuance fees in "HNI Corporation shareholders' equity," $2.0 million of financing fees in "Other Assets," and $0.5 million of financing fees in "Prepaid expenses and other current assets," in the Consolidated Balance Sheets.

The acquired assets and assumed liabilities and results of Steelcase's operations are included in the Corporation's segments as of December 10, 2025, as noted below. The acquisition was accounted for using the acquisition method pursuant to ASC 805, with goodwill being recorded as a result of the purchase price exceeding the fair value of identifiable tangible and intangible assets and liabilities. Goodwill, which is not tax-deductible, is primarily attributable to the assembled workforce of Steelcase and anticipated synergies.

The total fair market value of consideration was approximately $1,922.3 million, which is allocated as follows:

Consideration provided in the form of HNI Corporation shares and HNI Corporation replacement share-based awards represents non-cash consideration.

The preliminary purchase price allocation at the date of acquisition is as follows:

All preliminary goodwill is assigned to the Workplace Furnishings segment.

The following table summarizes the acquired identified intangible assets and weighted average useful lives:

The Corporation will ultimately perform a valuation analysis that will involve complex management estimates and assumptions using income, market and cost approaches and assumptions such as property appraisals, projections of future revenues, cost and cash flows, discount rates, royalty rates, long-term growth rates, and technology build costs. However, given the close proximity of the closing date of the Steelcase acquisition to the Corporation's fiscal year end, currently assets and liabilities have been preliminarily estimated and recorded based on a benchmarking analysis of publicly disclosed purchase price allocations of comparable companies who had acquired businesses similar to Steelcase. The Corporation has applied this approach as the Corporation has not yet obtained all of the information necessary to finalize the determination of the fair values of its acquired assets and assumed liabilities. The provisional assets and liabilities will be adjusted to reflect the finally determined amounts, and those adjustments may be material. Currently, the fair values of all assets acquired and assumed liabilities are considered preliminary. The fair value measurement of property, plant, and equipment and intangible assets are characterized as Level 3 in the fair value hierarchy. The Corporation expects to finalize the purchase price allocation in the second half of 2026.

The following table summarizes the results of Steelcase operations that are included in the Consolidated Statements of Comprehensive Income for the year ended January 3, 2026, which includes pretax charges of $41.6 million of acquisition costs and $4.6 million of purchase accounting adjustments.

Pro Forma Results of Operations - Steelcase Acquisition (Unaudited)

The following table provides, on a pro forma basis, the combined results of operations of HNI Corporation and Steelcase for the fiscal years ended January 3, 2026 and December 28, 2024, as though the acquisition and related financing had occurred as of December 31, 2023 the first day of the Corporation’s 2024 fiscal year. The pro forma results include certain purchase accounting adjustments such as: elimination of sales between HNI Corporation and Steelcase-owned dealers; estimated depreciation and amortization expense on acquired tangible and intangible assets; interest associated with additional borrowings to finance the acquisition; non-recurring transaction costs as outlined above; and the impact to income tax expense. Because the end of Steelcase's fiscal year 2025 fell on February 28, 2025, results of Steelcase's eleventh and twelfth periods of fiscal 2025 (January and February 2025) are included both as the final two periods of 2024 and the first two periods of 2025 to conform to HNI Corporation's calendar. This pro forma information is not necessarily reflective of what the Corporation’s results would have been had the acquisition occurred on the date indicated, nor is it indicative of future results.

Acquisition - Kimball International

On June 1, 2023, the Corporation completed its acquisition of Kimball International, a leading commercial furnishings company with expertise in workplace, health, and hospitality, resulting in Kimball International becoming a wholly-owned subsidiary of the Corporation. In the year ended December 30, 2023, the Corporation incurred acquisition-related expenses of $41.2 million, of which $28.6 million were incurred as corporate costs and $12.5 million were recorded in the Workplace Furnishings segment. These expenses are included in "Selling and administrative expenses" in the Consolidated Statements of Comprehensive Income. Additionally, acquisition-related financing costs of $2.8 million and $0.2 million were recorded to the Consolidated Balance Sheets in "Long-term Debt" and "Other Assets," respectively, while $0.3 million of acquisition-related stock issuance costs were recorded to "Additional paid-in capital."

The total fair market value of consideration was approximately $503.7 million, including total cash consideration of $330.0 million, share consideration valued at $120.8 million and replacement share-based awards valued at $2.6 million. The acquired assets and assumed liabilities and results of Kimball International's operations are included in the Corporation's workplace furnishings reportable segment. The acquisition was accounted for using the acquisition method pursuant to ASC 805, with goodwill being recorded as a result of the purchase price exceeding the fair value of identifiable tangible and intangible assets and liabilities. Goodwill, which is not tax-deductible, is primarily attributable to the assembled workforce of Kimball International and anticipated synergies.

The following table summarizes the results of Kimball International operations that are included in the Consolidated Statements of Comprehensive Income for the year ended December 30, 2023. These amounts include the results of Poppin, Inc. ("Poppin") for the portion of the year-ended December 30, 2023 during which it was owned by the Corporation. Poppin was determined not to require discontinued operations presentation as this entity was not material to the consolidated results of the year-ended December 30, 2023.

Pro Forma Results of Operations - Kimball International Acquisition (Unaudited)

The following table provides, on a pro forma basis, the combined results of operations of HNI Corporation and Kimball International for the fiscal year ended December 30, 2023, as though the acquisition and related financing had occurred as of January 2, 2022, the first day of the Corporation’s 2022 fiscal year. The pro forma results include certain purchase accounting adjustments such as: reclassifications to conform Kimball International’s results to the Corporation’s financial statement presentation; estimated depreciation and amortization expense on acquired tangible and intangible assets; estimated share-based compensation expense for Kimball International awards converted to the Corporation’s equity awards; interest associated with additional borrowings to finance the acquisition; non-recurring transaction costs as outlined above; and the impact to income tax expense. This pro forma information is not necessarily reflective of what the Corporation’s results would have been had the acquisition occurred on the date indicated, nor is it indicative of future results.

Divestiture of HNI India

In April 2025, the Corporation closed on the sale of its HNI India business, which was a component of the Workplace Furnishings segment, to Kokuyo Co., Ltd. in a transaction structured as a stock sale. The Corporation received $9.5 million in gross cash proceeds, or $8.1 million net of cash and transaction fees. In the year-to-date period, the Corporation recognized a $6.5 million pre-tax loss on the sale which is included in "Restructuring, impairment, and loss on divestiture" in the Consolidated Statements of Comprehensive Income. Included in the loss is a cumulative foreign currency translation loss of $6.0 million that was reclassified from accumulated other comprehensive income, and transaction-related expenses of $0.6 million.

The assets and liabilities of HNI India which were included with the sale are as follows:

Note 5. Supplemental Cash Flow Information

The Corporation’s cash payments for interest and income taxes, as well as information related to non-cash investing and financing activities, follows:

Non-cash consideration exchanged to acquire Steelcase in 2025 and Kimball International in 2023 is not included in the Consolidated Statements of Cash Flows; see "Note 4. Acquisitions and Divestitures" for more information.

Note 6. Goodwill and Other Intangible Assets

Goodwill and other intangible assets included in the Consolidated Balance Sheets consisted of the following:

Goodwill

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

Current year preliminary goodwill acquired relates to the acquisition of Steelcase, and may change materially during the next year. Current year goodwill disposed and accumulated impairment losses disposed relate to the second quarter 2025 sale of HNI India. Prior year goodwill measurement period adjustments relate to the acquisition of Kimball International, as the measurement period was closed during the second quarter of 2024. See "Note 4. Acquisitions and Divestitures" for additional information.

Definite-lived intangible assets

The table below summarizes amortizable definite-lived intangible assets, which are reflected in "Goodwill and Other Intangible Assets, net" in the Consolidated Balance Sheets:

The increase in definite-lived intangible assets in the current year relate to the acquisition of Steelcase. Amounts related to Steelcase are preliminary and may change materially during the next year. See Impairment Analysis below for details on the impairment of definite-lived intangible assets in the current year.

Amortization expense is reflected in "Selling and administrative expenses" in the Consolidated Statements of Comprehensive Income and was as follows:

The occurrence of events such as acquisitions, dispositions, or impairments may impact future amortization expense. Amortization based on the preliminary valuation of definite-lived intangibles acquired with Steelcase Inc. is included in the projection below. A decline in the next several years is primarily due to the completion of the amortization of the Corporation’s Business Systems Transformation investment. Based on the current amount of intangible assets subject to amortization, the estimated amortization expense for each of the following five fiscal years is as follows:

Indefinite-lived intangible assets

The Corporation also owns certain intangible assets, which are deemed to have indefinite useful lives because they are expected to generate cash flows indefinitely. The increase in indefinite-lived trade names in the current year relate to the acquisition of Steelcase. Amounts related to Steelcase are preliminary and may change materially over the next year. These indefinite-lived intangible assets are reflected in "Goodwill and Other Intangible Assets, net" in the Consolidated Balance Sheets:

Impairment Analysis

The Corporation evaluates its goodwill and indefinite-lived intangible assets 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 also evaluates long-lived assets (which include definite-lived intangible assets) for impairment if indicators exist.

The Corporation elected to perform a qualitative assessment for purposes of its annual goodwill and indefinite-lived trade name impairment testing in 2025. Based on these assessments, management concluded that for the majority of reporting units and trade names, it was more likely than not that the fair value was greater than carrying value and no quantitative testing was necessary.

For a small Workplace Furnishings reporting unit, management concluded that a triggering event occurred in the fourth quarter of 2025, resulting in quantitative impairment tests for goodwill and the long-lived asset group. This determination was made considering the reduced recent profitability projections of the reporting unit, driven by recent disruptions in global trade.

As a result of thelong-lived asset impairment testing, it was determined that the carrying value of the long-lived asset group was not fully recoverable based on an analysis of the undiscounted estimated future cash flows of the group. Consequently, the Corporation recorded charges of $2.2 million and $5.5 million to partially impair the carrying values of definite-lived trade names and a customer list, respectively, within this asset group and, as a result, the remaining value of these assets are immaterial. The fair value of the trade names are considered a Level 3 measurement which utilizes a relief-from-royalty discounted cash flows approach. Key inputs and assumptions involved include the estimated near-term revenue growth (10 percent), long-term growth rate (3 percent), royalty rate (0.5 percent), and discount rate (15 percent). The fair value of the customer-list is considered a Level 3 measurement which utilizes the multi-period excess earnings method. Key inputs and assumptions involved include the estimated near-term revenue growth (10 percent), long-term growth rate (3 percent), customer retention rate (99 percent), and marketing expense rate (3 percent) and discount rate (15 percent).

For the quantitative goodwill impairment testing, management utilized a combination of both a discounted cash flows approach and market approaches. The reporting unit was determined to have a fair value exceeding its carrying value, andno impairment was recorded.

In 2024 the Corporation elected to perform a quantitative assessment for purposes of its annual goodwill and indefinite-lived trade name impairment testing. All reporting units and trade names tested were determined to have fair values that exceeded the respective carrying values, and thusno impairment charges were recorded.

The Corporation elected to perform a qualitative assessment for purposes of its annual goodwill and indefinite-lived trade name impairment testing in 2023. Based on these assessments, management concluded that for the majority of reporting units and trade names, it was more likely than not that the fair value was greater than carrying value and no quantitative testing was necessary.

For a small workplace furnishings reporting unit, management concluded that a quantitative assessment was required. For the quantitative goodwill impairment testing, management utilized a combination of both a discounted cash flows approach and market approaches. As a result of the impairment testing in 2023, this reporting unit was determined to have a carrying value in excess of its fair value, resulting in a pretax goodwill impairment charge of $27.6 million. This reporting unit has remaining goodwill of $6.0 million. The driver of the impairment was a reduction in the short-to mid-term financial forecast for this business as a result of softening market demand tied to macroeconomic conditions. Projections used in the impairment model reflected management’s assumptions, which are those of a market participant, regarding revenue growth rates, economic and market trends, cost structure, investments required in support of strategic initiatives, and other expectations about the anticipated short-term and long-term operating results of the reporting unit (Level 3 measurements). For this reporting unit, the Corporation assumed a discount rate of approximately 14 percent, near-term growth rates ranging from -13 percent to +10 percent, and a terminal growth rate of 3 percent.

For a small workplace furnishings business trade name, management concluded that a quantitative assessment was required. As a result of the quantitative impairment testing in 2023, management concluded that a pretax impairment charge of $3.4 million was required related to this indefinite-lived intangible asset. The drivers of the impairment include a reduced sales outlook for this business and a decline in the estimated royalty rate. The valuation assessment of this trade name is considered a Level 3 measurement that utilized a relief-from-royalty discounted cash flows approach. Key inputs and assumptions involved in the quantitative testing included estimated near-term growth rates ranging from -2 percent to +5 percent, a long-term growth rate of 3 percent, a royalty rate of 1 percent, and a discount rate of 16 percent.

See "Note 16. Restructuring and Impairment" for more information regarding goodwill, intangible asset, and long-lived asset impairments in recent prior years.

Note 7. Debt

Debt is as follows:

Aggregate maturities of debt are as follows:

The aggregate carrying value of the Corporation’s variable-rate, long-term debt obligations under the revolving credit and term loan facilities were $865 million and $246 million as of January 3, 2026 and December 28, 2024, respectively, which approximated fair value. The fair value of the public notes was estimated based on a discounted cash flow method (Level 2) to be $438 million as of January 3, 2026.

Credit Facilities for Merger Agreement Transactions

In connection with the Steelcase acquisition described in "Note 4. Acquisitions and Divestitures", on September 5, 2025 (the “Effective Date”), the Corporation entered into a Credit Agreement, by and among the Corporation, certain domestic subsidiaries of the Corporation, the lenders from time-to-time party thereto, Wells Fargo Bank, National Association, as administrative agent (the “Administrative Agent”), and other parties named therein (as amended, restated, supplemented or otherwise modified by time to time, including by Amendment No. 1 to Credit Agreement, dated as of November 5, 2025, and Amendment No. 2 to Credit Agreement, dated as of December 10, 2025, the “Credit Agreement”). The Credit Agreement establishes (i) a senior secured revolving credit facility (the “Revolving Facility,” and the loans thereunder, the “Revolving Loans”), (ii) a senior secured “term loan A” credit facility (the “TLA Facility,” and the loans thereunder, the “Term A Loans”) and (iii) a senior secured “term loan B” credit facility (the “TLB Facility,” and the loans thereunder, the “Term B Loans”).

Upon completion of the Steelcase acquisition on December 10, 2025, the Corporation executed borrowings under the Credit Agreement facilities described above to repay and retire outstanding credit facilities and to fund the completion of the Steelcase acquisition. All previously deferred financing costs for financing arrangements held by the Corporation prior to the Credit Agreement closing date (the"Closing Date") were expensed and reflected as “Interest expense, net” in the Consolidated Statements of Comprehensive Income. In addition to debt issuance costs included in "Debt-issuance costs" in the Consolidated Statements of Cash Flows, issuance costs totaling $7.7 million, including issuance discounts, structuring fees, and agent fees related to the issuance of debt as part of the Steelcase acquisition, are presented net of "Proceeds from Debt" in the Consolidated Statements of Cash Flows. As of the fiscal year-end, January 3, 2026, the Corporation had $1.3 billion debt outstanding as follows:

Revolving Credit Facility

As of January 3, 2026, the Corporation had $15 million of borrowings outstanding under the $425 million Revolving Facility. The Revolving Facility has a scheduled maturity date of the earlier of (a) 5 years after the closing date of the Steelcase acquisition or December 10, 2030 (the “RCF Maturity Date”) or (b) a customary springing maturity date. The entire amount drawn under the Revolving Facility is considered long-term as the Corporation assumes no obligation to repay any of the amounts borrowed in the next twelve months. Based on Consolidated EBITDA, as defined in the Credit Agreement, for the last four fiscal quarters, the Corporation can access the full $425 million of borrowing capacity available under the Revolving Facility, which includes the $15 million of borrowings outstanding as of January 3, 2026, and maintain compliance with the financial covenants under the Credit Agreement, described below.

In addition to cash flows from operations, the Revolving Facility under the Credit Agreement is the primary source of daily operating capital for the Corporation and provides additional financial capacity for capital expenditures, repurchases of common stock, and strategic initiatives, such as acquisitions.

The Corporation deferred the related debt issuance costs for the Credit Agreement. The proportionate share of issuances costs related to the Revolving Facility are classified as assets, and the Corporation is amortizing them over the term of Revolving Facility. The current portion of Revolving Facility debt issuance costs of $0.5 million is the amount to be amortized over the next twelve months and is reflected in "Prepaid expenses and other current assets" in the Consolidated Balance Sheets. The long-term portion of Revolving Facility debt issuance costs of $1.9 million is reflected in "Other Assets" in the Consolidated Balance Sheets.

Borrowings under the Revolving Facility and TLA Facility bear interest, at the Corporation's option, at either: (a) the alternate base rate, which is defined as a fluctuating rate per annum equal to the greatest of (i) the prime rate then in effect, (ii) the federal funds rate then in effect, plus 0.50% per annum, and (iii) the term Secured Overnight Financing Rate ("SOFR") rate determined on the basis of a one-month interest period, plus 1.00%, in each case, plus a margin of between 0.25% and 0.875%; and (b) the term SOFR rate (based on one, three or six month interest periods), plus a margin of between 1.25% and 1.875%. The term SOFR rate is subject to a floor of 0% and the alternate base rate is subject to a floor of 1.00%. The applicable margin in each case is determined based on the Corporation's net leverage ratio at such time. Interest is payable quarterly in arrears with respect to borrowings bearing interest at the alternate base rate or on the last day of an interest period, but at least every three months, with respect to borrowings bearing interest at the term SOFR rate.

Term Loan A

As of January 3, 2026, the Corporation had $350 million of borrowings outstanding under the TLA Facility. The TLA Facility has a scheduled maturity date of the earlier of (a)5 years after the closing date of the Steelcase acquisition or December 10, 2030 (the “TLA Maturity Date”) or (b) a customary springing maturity date. The TLA Facility is subject to principal amortization which begins on the last business day of March 2026 with quarterly principal payments due thereafter through the TLA Maturity Date. The quarterly amortization payments will be equal to the following amounts of the original principal amount of the Term A Loans: (i)0.625% for the first four full fiscal quarters following the Closing Date; (ii)1.25% for the fifth through twelfth full fiscal quarters after the Closing Date (iii)1.875% for the thirteenth through sixteenth full fiscal quarters after the Closing Date; and (iv)2.5% for the seventeenth full fiscal quarter after the Closing Date through the TLA Maturity Date.

The Corporation deferred the related debt issuance costs for the Credit Agreement. The proportionate share of issuances costs related to the TLA Facility, which are classified as a reduction of long-term debt, are being amortized over the term of TLA Facility. The TLA Facility deferred debt issuance costs do not reduce the amount owed by the Corporation under the TLA Loans. As of January 3, 2026, the TLA Facility deferred debt issuance costs balance of $2.0 million are reflected as a reduction to outstanding liabilities in "Long-Term Debt" in the Consolidated Balance Sheets.

Term Loan B

As of January 3, 2026, the Corporation had $500 million principal amount of borrowings outstanding under the TLB Facility. The TLB Facility has a scheduled maturity date of (a)7 years after the closing date of the Steelcase acquisition or December 10, 2032 (the “TLB Maturity Date”) or (b) a customary springing maturity date. The TLB Facility is subject to principal amortization which begins on the last business day of March 2026 with quarterly principal payments due thereafter through the TLB Maturity Date. The quarterly amortization payments will be in equal amounts of 0.25% of the original principal amount of the Term B Loans for each full fiscal quarter following the Closing Date through the TLB Maturity Date.

The Corporation deferred the related debt issuance costs for the Credit Agreement. The proportionate share of issuances costs related to the TLB Facility, which are classified as a reduction of long-term debt, are being amortized over the term of TLB Facility. The TLB Facility deferred debt issuance costs do not reduce the amount owed by the Corporation under the TLB Loans. As of January 3, 2026, the TLB Facility deferred debt issuance costs balance of $9.1 million is reflected as a reduction to outstanding liabilities in "Long-Term Debt" in the Consolidated Balance Sheets.

Borrowings under the TLB Facility bear interest, at the Corporation’s option, at either: (a) the alternate base rate, which is defined as a fluctuating rate per annum equal to the greatest of (i) the prime rate then in effect, (ii) the federal funds rate then in effect, plus 0.50% per annum, and (iii) the term SOFR rate determined on the basis of a one-month interest period, plus 1.00%, in each case, plus a margin of 1.00%; and (b) the term SOFR rate (based on one, three or six month interest periods), plus a margin of 2.00%. The term SOFR rate is subject to a floor of 0% and the alternate base rate is subject to a floor of 1.00%. The applicable margin in each case is determined based on the Corporation’s net leverage ratio at such time. Interest is payable quarterly in arrears with respect to borrowings bearing interest at the alternate base rate or on the last day of an interest period, but at least every three months, with respect to borrowings bearing interest at the term SOFR rate.

Credit Agreement and Debt Covenants

The Credit Agreement contains customary representations and warranties by the Corporation, which include customary materiality, material adverse effect and knowledge qualifiers. The Credit Agreement also contains customary affirmative and negative covenants including, among other requirements, limitations on indebtedness, liens, nature of business, mergers, sale of assets and indebtedness of subsidiaries, advances, investments and loans, transactions with affiliates, fiscal year, organizational documents, limitations restricted actions and negative pledges.

The Credit Agreement contains financial covenants in respect of the Revolving Facility and TLA Facility that require the maintenance of a maximum net leverage ratio and a minimum interest coverage ratio for periods after the Closing Date. The Corporation is required to maintain a maximum Net Leverage Ratio (as defined in the Credit Agreement) as of the end of each fiscal quarter of less than or equal to (i)4.25 to 1.00 as of the end of each of the first, second, third and fourth full fiscal quarters ending after the Closing Date, (ii)4.00 to 1:00 as of the end of each of the fifth and sixth full fiscal quarters ending after the Closing Date and (iii)3.50 to 1:00 as of the end of the seventh full fiscal quarter ending after the Closing Date and as of the end of each fiscal quarter thereafter. In addition, in respect of the Revolving Facility and TLA Facility, the Corporation is required to maintain a minimum Interest Coverage Ratio (as defined in the Credit Agreement) as of the end of each fiscal quarter of greater than or equal to 3.50 to 1.00.

Fixed-Rate Notes

As of May 31, 2025, the Corporation repaid the $50 million principal amount of matured seven-year fixed-rate notes issued under a private placement note agreement entered into on May 31, 2018. The repayment was financed through borrowings under the Revolving Credit Facility.

Upon the completion of the Steelcase acquisition on December 10, 2025, the Corporation fully prepaid the outstanding principal and interest along with related prepayment costs associated with the outstanding fixed-rate notes which had a principal amount of $50 million outstanding under a private placement note agreement entered into on May 31, 2018 and a scheduled maturity of May 31, 2028.

Term Loan

Upon the completion of the Steelcase acquisition on December 10, 2025, the Corporation fully prepaid the outstanding principal of $200 million and interest along with related prepayment costs associated with previously outstanding debt under a term loan agreement entered into on March 31, 2023, as amended on May 25, 2023. The initial $300 million of proceeds from the term loan were used to support funding of the Corporation’s acquisition of Kimball International on June 1, 2023. In May 2024 and September 2024, the Corporation prepaid a total of $100 million of the outstanding principal balance on the term loan.

Public Notes

As of January 3, 2026 the Corporation had outstanding a total of $450 million principal amount of public notes (the "Public Notes), consisting of $351 million of principal amount of public notes issued by the Corporation in connection with the Steelcase acquisition in exchange for Steelcase public notes in the same principal amount, and $99 million principal amount of public notes issued by Steelcase that were not exchanged. Through the exchange process, the Corporation received tender submissions from existing Steelcase note holders representing approximately $351 million aggregate principal amount of the Steelcase notes. The notes tendered were exchanged for new HNI senior secured public notes with the same interest rate of 5.125% per annum and scheduled maturity of January 18, 2029. The remaining Steelcase notes which were not exchanged approximate $99 million of aggregate principal amount. The non-exchanged notes continue to be classified as unsecured credit obligations of Steelcase, as a subsidiary of the Corporation, and continue to accrue interest at the rate of 5.125% per annum and have a scheduled maturity of January 18, 2029. The new public notes issued by the Corporation otherwise have identical terms and conditions, including interest payment dates and optional redemption prices, as the non-exchanged Steelcase notes.

At the acquisition date, the Corporation adjusted the public notes acquired to fair value recognizing a market discount. Additionally, the Corporation deferred the related debt issuance costs for the Credit Agreement. The proportionate share of the fair value adjustment and issuances costs related to the Public Notes, which are classified as a reduction of long-term debt, are being amortized over the term of Public Notes. The Public Notes deferred debt issuance costs and discount do not reduce the amount owed by the Corporation under the Public Notes. As of January 3, 2026, the Public Notes deferred debt issuance costs and discount balance of $13.2 million is reflected as a reduction to outstanding liabilities in "Long-Term Debt" in the Consolidated Balance Sheets.

Note 8. Income Taxes

The components for income before income taxes are as follows:

Significant components of the provision for income taxes are as follows:

The differences between the actual tax expense and tax expense computed at the statutory United States federal tax rate, along with the corresponding percentage of income before income tax, are attributable to the following:

(1):The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, Iowa, Illinois, Maryland, Minnesota, Pennsylvania and Texas for 2025; California, Illinois, Maryland, New Jersey, Pennsylvania, Texas and Wisconsin for 2024; California, Illinois, Maryland, New Jersey, Pennsylvania and Texas for 2023

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The amount of cash taxes paid by or refunded to the Corporation are as follows:

*Cash taxes paid during the year in these jurisdictions are not disaggregated as they were less than 5%.

Significant components of the Corporation’s deferred tax liabilities and assets are as follows:

The valuation allowance, which primarily relates to acquired deferred tax assets, is as follows:

The current year net increase in the valuation allowance of $11.3 million primarily relates to the acquisition of Steelcase foreign tax losses and credits. The prior year net decrease in the valuation allowance of $1.9 million primarily relates to the adjustment to the amount of Kimball International, Inc capital loss carryforward.

As of January 3, 2026, the Corporation had $33.4 million, $3.7 million and $32.2 million of federal, state, and foreign net operating losses, respectively. The Corporation also had $15.2 million, $3.5 million and $2.0 million of federal, state, and foreign tax credit carryforwards, respectively. Additional carryforwards for capital losses and other U.S. tax items totaled $2.0 million. These tax carryforwards expire over the next twenty years.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

These increases or decreases in the unrecognized tax benefits would be due to new positions that may be taken on income tax returns, settlement of tax positions, and the closing of statutes of limitation. It is not expected any of the changes will be material individually, or in total, to the results or financial position of the Corporation.

The Corporation recognizes interest related to unrecognized tax benefits in interest expense, and penalties in operating expenses, consistent with the recognition of these items in prior reporting periods. The expenses and liabilities recorded for interest and penalties as of and for the years ended January 3, 2026 and December 28, 2024 are immaterial.

Tax years 2022 through 2024 remain open for examination by the Internal Revenue Service. Tax years 2021 through 2024 remain open for examination in various state and foreign jurisdictions, respectively. The Corporation is currently under federal examination for tax year 2023 and a state examination for open tax years but does not expect any adjustments.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant provisions, including permanent extensions of certain expiring provisions of the Tax Cuts and Jobs Act, modification to the international tax framework and restoration of favorable tax treatment for certain business provisions. These changes include allowing accelerated tax deductions for qualified business property and immediate expensing of research and development expenditures. The legislation has multiple effective dates, with some provisions effective in 2025 and other provisions scheduled to become effective on various dates through 2027. For 2025, the Corporation plans to elect the accelerated tax deductions for qualified business property and expensing of research and development expenditures which are expected to decrease cash payments for U.S. federal income taxes. The Corporation has evaluated the impact of the OBBBA on deferred tax assets and liabilities, including adjustments to valuation allowances, and has reflected these effects in the consolidated financial statements for 2025.

Note 9. Fair Value Measurements of Financial Instruments

For recognition purposes, on a recurring basis, the Corporation is required to measure at fair value its marketable securities, derivative financial instruments, put option liabilities, and auction rate securities. The marketable securities are comprised of money market funds, government securities, corporate bonds, and mutual funds. When available, the Corporation uses quoted market prices to determine fair value and classifies such measurements within Level 1. Where market prices are not available, the Corporation makes use of observable market-based inputs (prices or quotes from published exchanges and indexes) to calculate fair value using the market approach, in which case the measurements are classified within Level 2. Significant unobservable inputs, which are classified within Level 3, are used in the estimation of the fair value of put option liabilities and auction rate securities, determined using a simulation model based on assumptions including future cash flows, discount rates, and volatility. The activity for assets and liabilities measured at estimated fair value using Level 3 during 2025 and 2024 is immaterial.

In connection with the Steelcase acquisition in December 2025, the Corporation acquired Steelcase's auction rate security and foreign exchange forward contracts. See "Note 4. Acquisitions and Divestitures" for more information on the acquisition of Steelcase and "Note 2. Summary of Significant Accounting Policies" for more information on auction rate securities and foreign exchange forward contracts.

Financial instruments measured at fair value were as follows:

Amounts in parentheses indicate liabilities.

The index below indicates the line item in the Consolidated Balance Sheets where the financial instruments are reported:

(1) "Cash and cash equivalents"

(2) "Prepaid expenses and other current assets"

(3) Current portion - "Short-term investments"; Long-term portion - "Other Assets"

(4) Current portion - "Accounts payable and accrued expenses"; Long-term portion - "Other Long-Term Liabilities"

(5) "Other Long-Term Liabilities"

Note 10. Accumulated Other Comprehensive Income (Loss) and Shareholders’ Equity

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the components of accumulated other comprehensive income (loss) and the changes in accumulated other comprehensive income (loss), net of tax, as applicable:

Amounts in parentheses indicate reductions to equity.

Interest Rate Swap

During the normal course of business, the Corporation is subjected to market risk associated with interest rate movements. Interest rate risk arises from variable interest debt obligations. Interest rate swap derivative instruments are periodically held and used by the Corporation as a tool for managing interest rate risk. They are not used for trading or speculative purposes.

In November 2023, the Corporation entered into an interest rate swap transaction to hedge $100 million of outstanding variable-rate borrowings against future interest rate volatility. Under the terms of this interest rate swap, the Corporation pays a fixed rate of 4.7 percent and receives one-month SOFR on a $100 million notional value expiring June 14, 2027. As of January 3, 2026, the fair value of the Corporation’s interest rate swap liability was $2.0 million. See "Note 9. Fair Value Measurements of Financial Instruments" for additional information. The unrecognized change in value of the interest rate swap is reported net of tax as $1.5 million in "Accumulated other comprehensive income (loss)" in the Consolidated Balance Sheets.

The following table details the reclassifications from accumulated other comprehensive income (loss):

Amounts in parentheses indicate reductions to profit.

In 2025, in connection with its sale of HNI India in April 2025, the Corporation recognized a loss of $6.0 million in the year-to-date period related to the accumulated foreign exchange on the balance sheet. For further information on the divestiture of HNI India, see "Note 4. Acquisitions and Divestitures."

In the second quarter of 2025, the Corporation entered into an irrevocable non-participating group annuity contract with a third-party insurer to transfer a portion of the obligation and future payments related to a previously frozen pension plan. In connection with the settlement, the Corporation recognized $2.9 million as expense on the Consolidated Statements of Comprehensive Income with respect to the related portion of the accumulated other comprehensive loss associated with the pension plan.

Director Plan

In May 2017, the Corporation authorized 0.3 million shares of its common stock under its 2017 Equity Plan for Non-Employee Directors of HNI Corporation (the "2017 Director Plan"). The 2017 Director Plan permits the Corporation to issue to its non-employee directors options to purchase shares of Corporation common stock, restricted stock, or restricted stock units of the Corporation, and awards of Corporation common stock. The 2017 Director Plan also permits non-employee directors to elect to receive all or a portion of their annual retainers and other compensation in the form of shares of common stock. Shares of common stock issued under the Director Plan in 2025, 2024, and 2023, were 26 thousand,27 thousand, and 43 thousand, respectively.

Dividends

The Corporation declared and paid cash dividends per common share as follows:

Members’ Stock Purchase Plan

During 2017, shareholders approved the HNI Corporation Members’ Stock Purchase Plan (the "2017 MSPP"). Under the 2017 MSPP,0.8 million shares of common stock were authorized for issuance to participating members. Under the 2017 MSPP, rights to purchase stock are granted on a quarterly basis to all participating members who customarily work 20 hours or more per week and forfive months or more in any calendar year. The price of the stock purchased under the MSPP is 85 percent of the closing price of the common stock as reported on the New York Stock Exchange on the exercise date. No member may purchase stock under the MSPP in an amount which exceeds a maximum fair value of $25,000 in any calendar year. Shares of common stock issued under the MSPP in 2025, 2024, and 2023, were 49 thousand,39 thousand, and 77 thousand, respectively. The following table provides the average price per share issued under the MSPP:

As of January 3, 2026,0.2 million shares were available for issuance under the 2017 MSPP.

Change in Control

The Corporation has entered into change in control employment agreements with certain officers. According to the agreements, a change in control occurs when a third person or entity becomes the beneficial owner of 20 percent or more of the Corporation’s common stock, when more than one-third of the Board of Directors is composed of persons not recommended by at least three-fourths of the incumbent Board of Directors, upon certain business combinations involving the Corporation, or upon approval by the Corporation’s shareholders of a complete liquidation or dissolution of the Corporation. Upon a change in control, a key member is deemed to have atwo-year employment agreement with the Corporation, and all of his or her benefits vest under the Corporation’s compensation plans. If, at any time withintwo years of the change in control, his or her employment is terminated by the Corporation for any reason other than cause or disability, or by the key member for good reason, as such terms are defined in the agreement, then the key member is entitled to receive, among other benefits, a severance payment equal totwo times (three times for the Corporation’s Chairman, President, and Chief Executive Officer) annual salary and the average of the priortwo years’ bonuses.

Stock Repurchase

The par value method of accounting is used for common stock repurchases. The following table summarizes shares repurchased and settled by the Corporation:

As of January 3, 2026, approximately $84.3 million of the current repurchase authorization remained available for future repurchases.

Note 11. Stock-Based Compensation

Under the Corporation’s 2021 Stock-Based Compensation Plan (the "2021 Plan"), the Corporation may award options to purchase shares of the Corporation’s common stock and grant other stock awards to key personnel. Upon shareholder approval of the 2021 Plan in May 2021, no additional awards were granted under the Corporation’s 2017 Stock-Based Compensation Plan (the "2017 Plan"), but all outstanding awards previously granted under the 2017 Plan remain outstanding in accordance with their terms. During the second quarter of 2023, the Corporation assumed the Kimball International, Inc. Stock Incentive Plan and its remaining share pool. The plan was renamed the "HNI Corporation Stock Incentive Plan for Legacy Kimball Employees" (the "2023 Kimball International Legacy Plan"). Under this plan the Corporation may grant equity compensation awards using the plan’s share pool. At inception, there were approximately 1.1 million shares of the Corporation’s stock available for issuance under this plan. During the fourth quarter of 2025, the Corporation assumed the Steelcase Inc. Incentive Compensation Plan and its remaining share pool. The plan was renamed the "HNI Corporation Stock Incentive Plan for Legacy Steelcase Employees" (the "2025 Steelcase Inc Legacy Plan"). Under this plan the Corporation may grant stock-based compensation using the plan's share pool. At inception, there were approximately 2.4 million shares of the Corporation's stock available for issuance under this plan.

As of January 3, 2026, there was a total of approximately 5.2 million shares available for future issuance under the 2021 Plan, the 2017 Plan, the 2023 Kimball International Legacy Plan, and the 2025 Steelcase Inc Legacy Plan (collectively, the "Plans"). The Plans are administered by the Human Resources and Compensation Committee of the Board of Directors. Forms of awards issued under the Plans include stock options, restricted stock units based on a service condition ("RSUs"), and restricted stock units based on both financial performance and service conditions ("PSUs"). The Corporation uses common shares held in treasury to satisfy share option exercises and distributions of shares related to vested RSUs and PSUs.

RSUs generally vest ratably over three years with the exception of RSUs awards under the 2023 Kimball International Legacy Plan and the 2025 Steelcase Inc Legacy Plan, which cliff-vest three years after the original award date. PSUs were awarded starting in 2020, and generally vest at the end of athree-year period, subject to a performance metric based on the Corporation’s cumulative profitability during the period. PSUs and RSUs awarded starting in 2020 generally accrue cash dividends during the vesting periods, with payment made when earned shares are distributed to participants. Awards under the 2023 Kimball International Legacy Plan accrue share dividends during the vesting period, awarded upon vesting. Awards under the 2025 Steelcase Inc. Incentive Compensation Plan accrue and pay dividends quarterly in cash. Stock options awarded to members must be at exercise prices equal to or exceeding the fair market value of the Corporation’s common stock on the date of grant. Stock options are generally subject tofour-year cliff vesting and must be exercised within 10 years from the date of grant.

The Corporation measures stock-based compensation expense at grant date, based on the fair value of the award, and recognizes expense over the members’ requisite service periods, adjusted for an estimated forfeiture rate for those shares not expected to vest. Additionally, expense related to PSUs is periodically adjusted for the probable number of shares to be awarded at the end of thethree-year performance period.

Compensation cost charged against operations for the Plans and the 2017 MSPP described in "Note 10. Accumulated Other Comprehensive Income (Loss) and Shareholders’ Equity" was as follows:

(1) Current year compensation costs includes $7.3 million of expense associated with the Steelcase acquisition.

The total income tax benefit recognized in the Consolidated Statements of Comprehensive Income for share-based compensation arrangements was as follows:

RSUs

The following table summarizes the changes in RSUs (shares in thousands, per share amounts in dollars):

• RSUs assumed in 2023 in the above table are replacement awards issued to Kimball International employees in June 2023, and have no weighted-average grant date fair value because they were granted prior to the Corporation’s acquisition of Kimball International. The total fair value of RSUs assumed at acquisition date is $6.1 million, with approximately 48 percent of the fair value attributed to service provided by Kimball International employees prior to the acquisition by the Corporation and thus is accounted for as purchase consideration.

*RSUs assumed in 2025 in the above table are replacement awards issued to Steelcase Inc. employees in December 2025, and have no weighted-average grant date fair value because they were granted prior to the Corporation's acquisition of Steelcase Inc. The total fair value of RSUs assumed at acquisition date that was classified in equity is $60.7 million, with approximately 76 percent of the fair value attributed to service provided by Steelcase Inc. employees prior to the acquisition by the Corporation and thus is accounted for as purchase consideration.

See "Note 4. Acquisitions and Divestitures" for further information.

As of January 3, 2026, there was $12.1 million of unrecognized compensation cost related to RSUs, which the Corporation expects to recognize over a weighted-average period of 1.3 years. The total value of shares vested was as follows:

The increase in value of shares vested in the current year was driven by converted Steelcase RSUs.

PSUs

The following table summarizes the changes in PSUs (shares in thousands, per share amounts in dollars):

As of January 3, 2026, there was $6.6 million of unrecognized compensation cost related to PSUs, which the Corporation expects to recognize over a weighted-average period of 0.9 years. A portion of PSUs granted in 2022 vested in 2025, with the remaining portion expiring, based on the Corporation's partial achievement of the cumulative profitability target of the relevant three-year performance period.

Stock Options

Stock-based compensation expense related to stock options was estimated on the date of grant using the Black-Scholes option-pricing model with various assumptions. Expected volatilities were based on historical volatility as the Corporation does not expect that future volatility over the expected term of the options is likely to differ from the past. The Corporation used a calculation method based on the historical daily frequency for a period of time equal to the expected term. The Corporation used the current dividend yield as there are no plans to substantially increase or decrease its dividends. The Corporation used historical exercise experience to determine the expected term. The risk-free interest rate was selected based on yields from treasury securities as published by the Federal Reserve equal to the expected term of the options. The amount of stock-based compensation expense recognized during a period is also based on the portion of the stock options that are ultimately expected to vest. The Corporation estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revises those estimates in subsequent periods if actual forfeitures differ from those estimates.

There wereno stock options granted in any periods presented below.

The following table summarizes the changes in outstanding stock options (shares in thousands, per share amounts in dollars):

There wereno nonvested stock options as of January 3, 2026, December 28, 2024, or December 30, 2023, and no activity related to nonvested options during the current year. Additionally, as of January 3, 2026, there wasno unrecognized compensation cost related to stock option awards.

Information about stock options currently exercisable is as follows (shares in thousands, per share amounts in dollars):

Other information for the last three years is as follows:

The decrease in stock option exercise activity during the current year was attributable to a reduced average market price per share of the Corporation's common stock in 2025.

Note 12. Employee Benefit Plan Obligations

HNI Legacy - Defined Contribution Retirement Plans

The Corporation has defined contribution retirement plans covering substantially all its HNI Legacy members. The Corporation’s contribution to the plans is based on member eligible earnings and/or member contributions. A portion of the contribution is also based on results of operations, and a portion is contributed in the form of common stock of the Corporation. Cash contributions by the Corporation are primarily made in each payroll period, concurrent with member contributions. Stock contributions to member retirement plans are typically made in the following year.

The following table includes the Corporation’s contributions related to each annual period:

HNI Legacy - Deferred Compensation

The Corporation maintains a salary deferral program within its legacy business which allows certain employees and non-employee directors to defer a portion of their compensation. The Corporation also maintains a SERP, acquired as part of the 2023 Kimball International acquisition, which allows certain employees to engage in self-directed investments. The liabilities associated with the SERP represent the Corporation's obligation to distribute those funds. The following table details the Corporation's associated obligations.

(1) The current portion and long-term portions are reported in "Current maturities of other long-term obligations" and "Other Long-Term Liabilities" on the Consolidated Balance Sheets, respectively.

(2) The current portion and long-term portions are reported in "Accounts payable and accrued expenses" and "Other Long-Term Liabilities" on the Consolidated Balance Sheets, respectively. Associated investments are held as mutual funds and are reported in "Short-term investments" and "Other Assets."

HNI Legacy - Ongoing Post Employment Benefits

The Corporation offers a fixed subsidy to certain retirees who choose to participate in a third-party insurance plan selected by the Corporation. Guidance on accounting by employers for other post-retirement plans requires recognition of the overfunded or underfunded status on the balance sheet. Under this guidance, gains and losses, prior service costs and credits, and any remaining transition amounts under previous guidance not yet recognized through net periodic benefit cost are recognized in accumulated other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic benefit cost. The measurement date – the date at which the benefit obligation and plan assets are measured – is required to be the Corporation’s fiscal year-end.

The following table sets forth the activity and reporting location of the benefit obligation and plan assets:

Estimated future benefit payments are as follows:

Expected contributions are as follows:

The discount rate is set at the measurement date to reflect the yield of a portfolio of high quality, fixed income debt instruments. The discount rate used was as follows:

Steelcase Legacy - Employee Benefit Plan Obligations

The Corporation's Legacy Steelcase employee retirement benefit plan obligations are as follows:

Steelcase Legacy - Defined Contribution Retirement Plans

Substantially all of Steelcase's U.S. employees are eligible to participate in defined contribution retirement plans, primarily the Steelcase Inc. Retirement Plan (the “Retirement Plan”). Company contributions, including discretionary profit sharing and 401(k) matching contributions, and employee 401(k) contributions fund the Retirement Plan. All contributions are made to a trust which is held for the sole benefit of participants.

Total expense under all defined contribution retirement plans was $2.0 million for December 10, 2025 through January 3, 2026. The Corporation expects to fund approximately $42.4 million related to defined contribution plans in 2026, including funding related to the 2025 discretionary profit sharing contributions.

Steelcase Legacy - Post-Retirement Medical Benefits

The Corporation maintains post-retirement benefit plans that provide medical and life insurance benefits to certain North American-based retirees and eligible dependents. The plans were frozen to new participants in 2003. Cost of the post-retirement benefits are accrued during the service periods of employees based on actuarial calculations for each plan. These plans are unfunded. Investments in COLI policies are intended to be utilized as a long-term funding source for these benefit obligations. See "Note 18. Company-Owned Life Insurance" for additional information.

Steelcase Legacy - Defined Benefit Pension Plans

The Corporation's defined benefit pension plans include various qualified foreign retirement plans as well as domestic non-qualified supplemental retirement plans that are limited to a select group of management. The benefit plan obligations for the non-qualified supplemental retirement plans are primarily related to the Steelcase Inc. Executive Supplemental Retirement Plan. This plan, which is unfunded, was frozen to new participants in 2016, and the benefits were capped for existing participants.

The funded status of the Corporation's legacy Steelcase defined benefit pension plans (excluding investments in COLI policies) is as follows:

The following table sets forth the activity and reporting location of the Legacy Steelcase benefit obligation and plan assets:

(1)The net actuarial loss (gain) was recognized in Accumulated Other Comprehensive Income (Loss) before tax in 2025.

Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost are as follows:

The assumed healthcare cost trend for the Corporation's Legacy Steelcase plan was 6.75% for pre-age 65 retirees as of January 3, 2026, gradually declining to 4.50% after seven years. Post-age 65 trend rates are not applicable as the plan provides a fixed subsidy for post-age 65 benefits.

The Corporation expects to contribute approximately $6.8 million to the Legacy Steelcase pension plans and fund approximately $2.6 million related to post-retirement plans in 2026. The estimated future benefit payments under Legacy Steelcase pension and post-retirement plans are as follows:

Cash payments during 2025 for Legacy Steelcase defined contribution plans were $0.7 million.

The measurement dates for the Corporation's Legacy Steelcase retiree benefit plans are consistent with the Corporation's fiscal year end. Accordingly, discount rates are selected to measure benefit obligations that are consistent with market indices at the end of each year.

Steelcase Legacy - Multi-Employer Pension Plan

Prior to the Steelcase acquisition in December 2025, one subsidiary, SC Transport Inc., previously contributed to the Central States, Southeast and Southwest Areas Pension Fund (the "Fund"), a multi-employer pension plan, based on obligations arising under a collective bargaining agreement that covered SC Transport Inc. employees and retirees. Under current law, an employer that withdraws or partially withdraws from a multi-employer pension plan may incur a withdrawal liability to the plan, which represents the portion of the plan’s underfunding that is allocable to the withdrawing employer under complex actuarial and allocation rules.

In 2019, the Fund asserted that SC Transport Inc.'s absence of hiring additional union employees over the pastten years constituted an adverse selection practice under the Fund and, if not remedied, would result in an assessment of a withdrawal liability. As a result of the Fund's assertion, SC Transport Inc. recorded an $11.2 million charge related to its estimated future obligations under a withdrawal from the Fund to be paid out in installments over a period of up to 20 years. The withdrawal liability was discounted using a rate of 3.5%. The balance of the liability as of January 3, 2026 was $8.4 million.

Steelcase Legacy - Deferred Compensation Programs

The Corporation maintains four Legacy Steelcase deferred compensation programs. The first deferred compensation program is closed to new entrants. In this program, certain employees elected to defer a portion of their compensation in return for a fixed benefit to be paid in installments beginning when the participant reaches age 70. Under the second plan, certain employees may elect to defer a portion of their compensation. The third plan is intended to restore retirement benefits that would otherwise be paid under the Retirement Plan but are precluded as a result of the limitations on eligible compensation under Internal Revenue Code Section 401(a)(17). A fourth plan, which was terminated as of the date of the Steelcase acquisition, allowed pre-acquisition, non-employee directors to elect to defer all or a portion of their board retainer and committee fees. The deferred amounts in the last three plans earn a return based on the investment option selected. These deferred compensation obligations are unfunded.

Deferred compensation expense (gain), which represents annual participant earnings on amounts that have been deferred, and expense (gains) related to restoration retirement benefits, were $0.5 million for 2025.

Note 13. Leases

The Corporation leases certain showrooms, office space, manufacturing facilities, distribution centers, retail stores, and equipment and determines if an arrangement is a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets; expense for these leases is recognized on a straight-line basis over the lease term. As of January 3, 2026, approximately 92 percent of the value of the Corporation’s leased assets is for real estate. The remaining 8 percent of the value of the Corporation’s leased assets is for equipment.

As the rates implicit in its leases cannot be readily determined, the Corporation estimates secured incremental borrowing rates based on the information available at the commencement date in determining the present value of lease payments. The Corporation uses separate discount rates for its United States operations and international operations.

Certain real estate leases includeone or more options to renew with renewal terms that can extend the lease term fromone toten years. The exercise of lease renewal options is at the Corporation’s sole discretion. Certain real estate leases include an option to terminate the lease term earlier than the specified lease term for a fee. These options are not included as part of the lease term unless they are reasonably certain to be exercised.

Many of the Corporation’s real estate lease agreements include periods of rent holidays and payments that escalate over the lease term by specified amounts or indices. While not significant, certain equipment leases have variable lease payments based on machine hours and certain real estate leases have rate changes based on the Consumer Price Index. The Corporation’s lease agreements do not contain any material residual value guarantees.

The Corporation has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component.

On occasion, the Corporation rents or subleases certain real estate to third parties. This sublease portfolio consists mainly of operating leases for office furniture showrooms and is not significant.

Lease costs included in the Consolidated Statements of Comprehensive Income consisted of the following:

Maturity of lease liabilities as of January 3, 2026 is as follows:

As of January 3, 2026, there were $0.3 million and $1.2 million of legally binding minimum lease payments for operating leases and finance leases, respectively, that were signed but not yet commenced and thus excluded from lease liabilities. Additionally, there wereno operating or finance lease options to extend lease terms that were reasonably certain of being exercised as of current fiscal year end. The increase in lease assets in the current year was driven by the acquisition of Steelcase as described in "Note 4. Acquisitions and Divestitures." Leases included in the Steelcase acquisition are recorded at their preliminary value and are subject to change, which may be material.

The following table summarizes the weighted-average discount rates and weighted-average remaining lease terms for operating and finance leases as of January 3, 2026:

The following table summarizes cash paid for amounts included in the measurements of lease liabilities and the leased assets obtained in exchange for new operating and finance lease liabilities:

Of the $185.2 million new lease assets, $170.3 million were acquired as part of the Steelcase acquisition on December 10, 2025.

Note 14. Guarantees, Commitments, and Contingencies

The Corporation utilizes letters of credit and surety bonds in the amount of approximately $45 million to back certain insurance policies and payment obligations. Additionally, the Corporation periodically utilizes trade letters of credit and bankers' acceptances to guarantee certain payments to overseas suppliers. As of January 3, 2026, there was $7 million outstanding related to these types of guarantees. The letters of credit, bonds, and banker’s acceptances reflect fair value as a condition of their underlying purpose and are subject to competitively determined fees.

The Corporation periodically guarantees borrowing arrangements involving certain workplace furnishings dealers and third-party financial institutions. The remaining terms of outstanding guarantees are less than five years in length and generally require the Corporation to make payments directly to the financial institution in the event that the dealer is unable to repay its borrowings in accordance with the stated terms. The aggregate amount guaranteed by the Corporation in connection with these agreements is approximately $7 million as of January 3, 2026. The Corporation has determined the likelihood of making future payments under these guarantees is not probable and therefore no liability has been accrued.

The Corporation has contingent liabilities which have arisen in the ordinary course of its business, including liabilities relating to pending litigation, environmental remediation, taxes, and other claims. After consultation with legal counsel, the Corporation expects that liabilities, if any, resulting from these matters will not have a material adverse effect on the Corporation’s financial condition, cash flows, or on the Corporation’s quarterly or annual operating results when resolved in a future period.

Note 15. Reportable Segment Information

Management views the Corporation astwo reportable segments based on industry: Workplace Furnishings and Residential Building Products. On December 10, 2025, the Corporation completed its acquisition of Steelcase, as such, Steelcase will be included in the Workplace Furnishings segment.

The Workplace Furnishings segment designs, manufactures, and markets a broad line of commercial office furniture which includes panel-based and freestanding furniture systems, seating, storage, benching, tables, architectural products, social collaborative items, ancillary products, and hospitality products. The Residential Building Products segment manufactures and markets a full array of gas, wood, electric, and pellet-fueled fireplaces, inserts, stoves, facings, outdoor fire pits and fire tables, and accessories.

For purposes of segment reporting, intercompany sales between segments are immaterial, and operating profit is income before income taxes exclusive of certain unallocated corporate expenses. These unallocated general corporate expenses include the net costs of the Corporation’s corporate operations. Management views interest income and expense as corporate financing costs and not as a reportable segment cost. In addition, management applies an effective income tax rate to its consolidated income before income taxes so income taxes are not reported or viewed internally on a segment basis. Identifiable assets by segment are those assets applicable to the respective industry segments. Corporate assets consist principally of cash and cash equivalents, short-term investments, long-term investments, IT infrastructure, and corporate office real estate and related equipment.

The Corporation's chief operating decision maker ("CODM") is the Chairman, President, and Chief Executive Officer. On a regular basis the CODM receives a reporting package that includes summarized financial results of the Corporation and its underlying operating segments. In evaluating the performance of the segments and making resource allocation decisions across the organization, the CODM is primarily focused on operating income, including analysis of trends, budget-to-actual variances, and performance against historical comparable periods.

Reportable segment data reconciled to the Corporation’s consolidated financial statements was as follows:

No geographic information for revenues from external customers is disclosed since the Corporation's primary activities during the periods ended January 3, 2026, December 28, 2024, and December 30, 2023 were concentrated in the United States.

Reportable geographic information is as follows:

(1) Long-lived assets include property, plant and equipment and right-of-use lease assets.

No country outside of the United States represented greater than 10% of the Corporation's long-lived assets as of January 3, 2026. No geographic information for long-lived assets for the years ended December 28, 2024 and December 30, 2023 is disclosed since the Corporation's primary investments during the periods were concentrated in the United States.

Note 16. Restructuring and Impairment

Restructuring, impairment, and loss on divestiture activity in the current year relate to the loss on divestiture of HNI India, described in "Note 4. Acquisitions and Divestitures," the impairment of intangible assets at a small Workplace Furnishings business, described in "Note 6. Goodwill and Other Intangible Assets," and continued manufacturing optimization initiatives across all segments, including production relocation at the Mexico plant and certain domestic plants. These projects are comprised of cash and non-cash set-up and move costs recorded to cost of sales, including accelerated depreciation and asset relocation and disposal costs. Current-year cash restructuring costs were also incurred for employee benefits in connection with facility closures in Workplace Furnishings.

Restructuring recorded in 2024 and 2023 included goodwill and intangible asset impairments incurred at small Workplace Furnishings brands and manufacturing optimization initiatives, primarily in the Workplace Furnishings segment.

Restructuring and impairment charges were as follows:

As of January 3, 2026 and December 28, 2024, accrued restructuring expenses of $13.1 million and $3.3 million, respectively, were included in "Accounts payable and accrued expenses" in the Consolidated Balance Sheets. Cash payments related to these charges in 2025, 2024, and 2023 totaled $8.7 million, $6.0 million, and $9.8 million respectively. Of the $13.1 million ending accrued restructuring expense, $12.8 million was from Steelcase, with related expense taken prior to the acquisition date.

On January 8, 2026, after the balance sheet date, the Corporation announced it will exit its Wayland, New York facility in 2027. Cash restructuring charges associated with this action are expected to total $7.1 million, while non-cash charges in the form of accelerated depreciation are expected to total $5.2 million.

Note 17. Supplier Finance Programs

Some of the Corporation’s third-party financial institutions offer supply chain finance ("SCF") programs by which they allow eligible Corporation suppliers the opportunity to sell their trade receivables due from the Corporation. Supplier participation in the SCF programs is voluntary and requires an agreement between the supplier and the financial institution, to which the Corporation is not a party. Any sales of supplier receivables to the financial institutions are at the sole discretion of the supplier and are priced at a rate that leverages the Corporation’s credit rating and thus may be more beneficial to the supplier. The Corporation’s responsibility is limited to making payment on the terms originally negotiated with each supplier.

In the table below, new invoices confirmed represent the invoices which have been confirmed by the Corporation to the financial institutions as valid for payment under the SCF programs, while confirmed invoices paid represent payments made to the financial institutions by the Corporation based on the original invoice terms. The balance at the end of the period represents invoices which have been confirmed as valid to the financial institutions under the terms of the SCF programs, but in which the Corporation has not yet made payment. The SCF programs payment obligations due by the Corporation to the financial institutions are recorded in "Accounts payable and accrued expenses" in the Consolidated Balance Sheets. The Corporation’s payments to the financial institutions to settle obligations related to suppliers that elected to participate in the SCF programs are reflected in cash flows from operating activities in the Consolidated Statements of Cash Flows.

Note 18. Company-Owned Life Insurance

The Corporation's investments in COLI policies are recorded at their net cash surrender value. The investments were acquired as part of the December 10, 2025 acquisition of Steelcase so, as a consequence, income disclosed represents activity since that date. The valuation of the investment is preliminary and subject to change during the measurement period. See "Note 4. Acquisitions and Divestitures" for further information on the Steelcase acquisition.

The Corporation's investments in COLI are intended to be utilized as a long-term funding source for post-retirement medical benefits, deferred compensation and defined benefit pension plan obligations. The designation of its COLI investments as funding sources for its long-term benefit plan obligations does not result in these investments representing a committed funding source for these obligations. The Corporation may designate any portion of them to another purpose at any time.

The net returns in cash surrender value, normal insurance expenses and any maturity benefits related to the Corporation's investments in COLI policies ("COLI income") are recorded in Selling and administrative expenses in the Consolidated Statements of Comprehensive Income. COLI income is intended to offset the expense associated with long-term benefit plan obligations which are also recorded in Selling and administrative expenses in the Consolidated Statements of Comprehensive Income. COLI income totaled $0.2 million in 2025.

The balances of our COLI investments as of January 3, 2026 were as follows:

Note 19. Investments in Unconsolidated Affiliates

The Corporation occasionally enters into joint ventures and other equity investments to expand or maintain its geographic presence, support its distribution network, or invest in new business ventures, complementary products and services through dealer relationships and manufacturing joint ventures. The only current manufacturing joint venture is Steelcase Jeraisy Company Limited, which is located in the Kingdom of Saudi Arabia and is engaged in the manufacturing of wood and metal office furniture systems, seating, accessories and related products for the Kingdom.

The investments below were acquired as part of the December 10, 2025 acquisition of Steelcase so, as a consequence income disclosed below represents activity since that date. The valuation of these investments is preliminary and subject to change during the measurement period. See "Note 4. Acquisitions and Divestitures" for further information on the Steelcase acquisition.

The Corporation's investments in unconsolidated affiliates and related direct ownership interests are recorded in are summarized below:

The Corporation's equity in earnings of unconsolidated affiliates was $0.6 million in 2025 and is recorded in "Other non-operating income, net" in the Consolidated Statements of Income.

The following tables summarizes the combined accounts of our equity method investments in unconsolidated affiliates:

Note 20. Subsequent Events

Facility Exit

On January 8, 2026, after the balance sheet date, the Corporation announced it will exit its Wayland, New York facility in 2027. See "Note 16. Restructuring and Impairment" for further information.

On February 20, 2026, the U.S. Supreme Court invalidated the current U.S. presidential administration's tariff measures after concluding that the International Emergency Economic Powers Act did not authorize their imposition. It is uncertain how future repercussions of the ruling and other changes in trade policy would impact our operations, supply chain, and cash flow.