XML 34 R12.htm IDEA: XBRL DOCUMENT
v3.19.2

Investments in Nonconsolidated Affiliates | 12 Months Ended
--- | ---
Jun. 01, 2019
Equity Method Investments and Joint Ventures [Abstract] |
Investments in Nonconsolidated Affiliates | Investments in Nonconsolidated Affiliates The Company has certain investments in entities that are accounted for using the equity method (“nonconsolidated affiliates”). The investments are included in Other assets in the Consolidated Balance Sheets and the equity earnings are included in Equity earnings from nonconsolidated affiliates, net of tax in the Consolidated Statements of Comprehensive Income. Refer to the tables below for the investment balances that are included in the Consolidated Balance Sheets and for the equity earnings that are included in the Consolidated Statements of Comprehensive Income.
(in millions) | June 1, 2019 | June 2, 2018
Investments in nonconsolidated affiliates | $ | 89.0 |  | $ | 16.8 |
(in millions) | June 1, 2019 | June 2, 2018 | June 3, 2017
Equity earnings from nonconsolidated affiliates | $ | 5.0 |  | $ | 3.0 |  | $ | 1.6 |
The Company had an ownership interest in seven nonconsolidated affiliates at June 1, 2019. Refer to the Company's ownership percentages shown below:
Ownership Interest | June 1, 2019 | June 2, 2018
Kvadrat Maharam Arabia DMCC | 50.0% | 50.0%
Kvadrat Maharam Pty Limited | 50.0% | 50.0%
Kvadrat Maharam Turkey JSC | 50.0% | 50.0%
Danskina B.V. | 50.0% | 50.0%
Naughtone Holdings Limited* | 52.5% | 50.0%
Global Holdings Netherlands B.V. | 48.2% | —%
HAY A/S | 33.0% | —%
*The minority shareholders of Naughtone Holdings Limited have substantive participation rights, including participating in decisions related to hiring, firing, and compensation of executive management, as well as establishing the annual operating budget. As such, the entity is not consolidated. Kvadrat Maharam The Kvadrat Maharam nonconsolidated affiliates are distribution entities that are engaged in selling decorative upholstery, drapery and wall covering products. At June 1, 2019 and June 2, 2018, the Company's investment value in Kvadrat Maharam Pty was $1.8 million and $1.9 million more than the Company's proportionate share of the underlying net assets, respectively. This difference was driven by a step-up in fair value of the investment in Kvadrat Maharam Pty, stemming from the Maharam business combination. This amount is considered to be a permanent basis difference. Naughtone In the fourth quarter of fiscal 2019 the Company increased its investment in Naughtone from 50% to 52.5% for approximately $2.0 million. At June 1, 2019, the Company's investment value in Naughtone was $9.8 million more than the Company's proportionate share of the underlying net assets, of which $2.0 million was being amortized over the remaining useful lives of the assets, while $7.8 million was considered a permanent basis difference. At June 2, 2018, the Company's investment value in Naughtone was $10.2 million more than the Company's proportionate share of the underlying net assets, of which $2.4 million was being amortized over the remaining useful lives of the assets, while $7.8 million was considered a permanent basis difference. Maars On August 31, 2018, Herman Miller Holdings Limited, a wholly owned subsidiary of the Company, acquired 48.2% of the outstanding equity of Global Holdings Netherlands B.V., which owns 100% of Maars Holding B.V. ("Maars”), a Harderwijk, Netherlands-based worldwide leader in the design and manufacturing of interior wall solutions. The Company acquired its 48.2% ownership interest in Maars for approximately $6.1 million in cash. The entity is accounted for using the equity method of accounting as the Company has significant influence, but not control, over the entity. For the Maars equity method investment, the fair values assigned to the assets acquired were based on best estimates and assumptions as of the reporting date and the valuation analysis was completed in the fourth quarter of fiscal 2019 with no differences noted from the preliminary valuation. As of the August 31, 2018 acquisition date, the Company's investment value in Maars was $3.1 million more than the Company's proportionate share of the underlying net assets. This amount represented the difference between the price that the Company paid to acquire 48.2% of the outstanding equity and the carrying value of the net assets of Maars. Of this difference, $2.7 million was being amortized over the remaining useful lives of the assets while, $0.4 million was considered a permanent difference. At June 1, 2019, the Company's investment value in Maars was $2.7 million more than the Company's proportionate share of the underlying net assets, of which $2.3 million was being amortized over the remaining useful lives of the assets, while $0.4 million was considered a permanent basis difference. HAY On June 7, 2018, Herman Miller Holdings Limited, a wholly owned subsidiary of the Company, acquired 33% of the outstanding equity of Nine United Denmark A/S, d/b/a HAY and subsequently renamed to HAY A/S ("HAY”), a Copenhagen, Denmark-based, design leader in furniture and ancillary furnishings for residential and contract markets in Europe and Asia. The Company acquired its 33% ownership interest in HAY for approximately $65.5 million in cash. The entity is accounted for using the equity method of accounting as the Company has significant influence, but not control, over the entity. For the HAY equity method investment, the fair values assigned to the assets acquired were based on best estimates and assumptions as of the reporting date and the valuation analysis was completed in the third quarter of fiscal 2019 with no differences noted from the preliminary valuation. As of the June 7, 2018 acquisition date, the Company's investment value in HAY was $62.9 million more than the Company's proportionate share of the underlying net assets. This amount represented the difference between the price that the company paid to acquire 33% of the outstanding equity and the carrying value of the net assets of HAY. Of this difference, $26.6 million was being amortized over the remaining useful lives of the assets while, $36.3 million was considered a permanent difference. At June 1, 2019, the Company's investment value in HAY was $56.8 million more than the Company's proportionate share of the underlying net assets, of which $22.6 million was being amortized over the remaining useful lives of the assets, while $34.2 million was considered a permanent basis difference. The change in the permanent basis difference from the acquisition date is due to changes in foreign currency exchange rates. Transactions with Nonconsolidated Affiliates Sales to and purchases from nonconsolidated affiliates were as follows for the periods presented below:
(in millions) | June 1, 2019 |  | June 2, 2018 |  | June 3, 2017
Sales to nonconsolidated affiliates | $ | 3.9 |  |  | $ | 4.3 |  |  | $ | 4.0 |
Purchases from nonconsolidated affiliates | $ | 23.0 |  |  | $ | 6.8 |  |  | $ | 4.2 |
Balances due to or due from nonconsolidated affiliates were as follows for the periods presented below:
(in millions) | June 1, 2019 |  | June 2, 2018
Receivables from nonconsolidated affiliates | $ | 0.7 |  |  | $ | 0.9 |
Payables to nonconsolidated affiliates | $ | 1.2 |  |  | $ | 1.0 |

X
- References No definition available. + Details
Name: | us-gaap_EquityMethodInvestmentsAndJointVenturesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
Name: | us-gaap_EquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration