Redeemable Noncontrolling Interests (Tables)

12 Months Ended

May 28, 2016

Redeemable Noncontrolling Interests [Abstract]

Redeemable Noncontrolling Interests

Certain minority shareholders in the company's subsidiary Herman Miller Consumer Holdings, Inc. have the right, at specified times over a period of five years, to require the company to acquire portions of their ownership interest in those entities at fair value. Their interests in these subsidiaries are classified outside permanent equity in the Consolidated Balance Sheets and are carried at the current estimated redemption amounts.

The redemption amounts have been estimated based on the fair value of the subsidiary, which was determined based on a weighting of the discounted cash flow and market methods. The discounted cash flow analysis used the present value of projected cash flows and a residual value. To determine the discount rate for the discounted cash flow method, a market-based approach was used to select the discount rates used. Market multiples for comparable companies were used for the market method of valuation. The fair value of the subsidiary is sensitive to changes in projected revenues and costs, the discount rate, and the forward multiples of the comparable companies.

Changes in the estimated redemption amounts of the noncontrolling interests, subject to put options, are reflected at each reporting period with a corresponding adjustment to Retained earnings. Future reductions in the carrying amounts are subject to a “floor” amount that is equal to the fair value of the redeemable noncontrolling interests at the time they were originally recorded. See Note 16 - Redeemable Noncontrolling Interests for additional information.

Changes in the company’s Redeemable noncontrolling interests for the years ended May 28, 2016 and May 30, 2015 are as follows:



	Year Ended
(In millions)	May 28, 2016			May 30, 2015
Balance at beginning of period	$	30.4		$	—
Increase due to business combinations	—			25.7
Net income attributable to redeemable noncontrolling interests	0.5			0.5
Exercised options	—			0.7
Redemption value adjustment	(4.0		)	3.3
Other adjustments	0.1			0.2
Balance at end of period	$	27.0		$	30.4