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Restructuring and Integration Expense | 3 Months Ended
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Aug. 28, 2021
Restructuring and Related Activities [Abstract] |
Restructuring and Integration Expense | Restructuring and Integration Expense As part of restructuring and integration activities the Company has incurred expenses that qualify as exit and disposal costs under U.S. GAAP. These include severance and employee benefit costs as well as other direct separation benefit costs. Severance and employee benefit costs primarily relate to cash severance, non-cash severance, including accelerated equity award compensation expense. The Company also incurs expenses that are an integral component of, and directly attribute to, our restructuring and integration activities, which do not qualify as exit and disposal costs under U.S. GAAP. These include integration implementation costs that relate primarily to professional fees and non-cash losses incurred on debt extinguishment. The expense associated with integration initiatives are included in Selling, general and administrative and the expense associated with restructuring activities are included in Restructuring expense in the Condensed Consolidated Statements of Comprehensive Income. Non-cash costs related to debt extinguishment in the financing of the transaction is recorded in Other expense (income), net in the Condensed Consolidated Statements of Comprehensive Income. Knoll Integration: Following the Knoll merger the Company announced a multi-year program (the "Knoll Integration") designed to reduce costs, integrate and optimize the combined organization. The Company currently expects that the Knoll Integration will result in pre-tax costs that are expected not to exceed approximately $100 million, comprised of the following categories: •Severance and employee benefit costs associated with plans to integrate our operating structure, resulting in workforce reductions. These costs will primarily include: severance and employee benefits (cash severance, non-cash severance, including accelerated stock-compensation award expense and other termination benefits). •Exit and disposal activities include those incurred as a direct result of integration activities, primarily including contract and lease terminations. •Other integration costs include professional fees and other incremental third-party expenses, including a loss on extinguishment of debt associated with financing of the merger. For the three months ended August 28, 2021, we have incurred $55.6 million of costs related to the Knoll Integration including: $30.5 million of severance and employee benefit costs, $13.4 million of non-cash costs related to debt-extinguishment in the financing of the transaction, and $11.7 million of other integration costs. The following table provides an analysis of the changes in liability balance for Knoll Integration costs that qualify as exit and disposal costs under U.S. GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the three months ended August 28, 2021:
(In millions) | Severance and Employee Benefit | Exit and Disposal Activities | Total
May 29, 2021 | $ | — |  | $ | — |  | $ | — |
Integration Costs | 30.5 |  | — |  | 30.5 |
Amounts Paid | (14.9) |  | — |  | (14.9) |
Non-cash costs | (10.4) |  | — |  | (10.4) |
August 28, 2021 | $ | 5.2 |  | $ | — |  | $ | 5.2 |
The Company's expects that a substantial portion of the liability for the Knoll Integration as of August 28, 2021 to be paid in fiscal year 2022. The following is a summary of integration expenses by segment for the periods indicated:
| Three Months Ended |  |
(In millions) | August 28, 2021 |  | August 29, 2020 |  |  |  |
Americas Contract | $ | 1.0 |  |  | $ | — |  |  |  |  |
International Contract | — |  |  | — |  |  |  |  |
Retail | — |  |  | — |  |  |  |  |
Knoll | 29.4 |  |  | — |  |  |  |  |
Corporate | 25.2 |  |  | — |  |  |  |  |
Total | $ | 55.6 |  |  | $ | — |  |  |  |  |
Restructuring Activities: During the fourth quarter of fiscal 2018, the Company announced a facilities consolidation plan related to its International Contract segment. This impacted certain office and manufacturing facilities in the United Kingdom and C hina. The plan is expected to generate cost savings of approxima tely $3 million. To date, the Company recognized restructuring and impairment expenses of $5.9 million, with a net credit of $1.9 million recognized in fiscal 2021 and the remainder in fiscal 2020, 2019 and 2018. These expenses related to the facilities consolidation plan, comprised primarily of an asset impairment recorded against an office building in the United Kingdom that was vacated and the consolidation of the Company's manufacturing facilities in China. No future restructuring costs related to the plan are expected as the plan is substantially complete. The office building and related assets in China were sold in the first quarter of fiscal 2021, resulting in a gain of approximately $3.4 million. The office building and related assets in the United Kingdom were sold in the second quarter of fiscal 2021, resulting in a nominal gain. Both of these gains are included within "Restructuring expense" in the Condensed Consolidated Statements of Comprehensive Income. In the second quarter of fiscal 2020, the Americas Contract segment initiated restructuring discussions with labor unions related to its Nemschoff operation in Wisconsin. To date, the Company has recorded approximately $3.1 million in pre-tax restructuring expense related to this plan, with a net credit of $0.1 million recognized in fiscal 2021 and the remainder in fiscal 2020. The plan is complete and no future costs related to this plan are expected. In the second quarter of fiscal 2020, the Company initiated a reorganization of the Global Sales and Product teams. The reor ganization activities occurred primarily in the North America business with additional costs incurred internationally. To dat e, the Company has recorded a total of $2.6 million in pre-tax restructuring expense related to this plan. The reorganiz ation is complete and no future costs related to this plan are expected. The following table provides an analysis of the changes in the restructuring costs reserve for the above plans for the three months ended August 28, 2021:
(In millions) | Severance and Employee-Related |  | Exit or Disposal Activities | Total
May 29, 2021 | $ | 0.9 |  |  | $ | 0.6 |  | $ | 1.5 |
Restructuring Costs | — |  |  | — |  | — |
Amounts Paid | (0.3) |  |  | — |  | (0.3) |
August 28, 2021 | $ | 0.6 |  |  | $ | 0.6 |  | $ | 1.2 |
In the fourth quarter of fiscal 2020, the Company announced a restructuring pl an (“May 2020 restructuring plan") to substantially reduce expenses in response to the impact of the COVID-19 pandemic and related restrictions. These activities included voluntary and involuntary reductions in its North American and International workforces. Combined, these actions resulted in the elimination of approximately 400 full-time positions throughout the Company in various businesses and functions. As the result of these actions, the Company projects an annualized expense reduction of approximately $40 million. To date, the Company incurred severance and related charges of $18.7 million with $3.4 million recognized in fiscal 2021 and the remainder in fiscal 2020. No material future restructuring costs related to the plan are expected and t he remaining amounts will be paid in fiscal 2022. The following table provides an analysis of the changes in the restructuring cost reserve for the May 2020 restructuring plan for the three months ended August 28, 2021:
(In millions) | Severance and Employee-Related |  |
May 29, 2021 | $ | 1.0 |  |  |
Restructuring Costs | — |  |  |
Amounts Paid | (0.5) |  |  |
August 28, 2021 | $ | 0.5 |  |  |
The following is a summary of restructuring expenses by segment for the periods indicated:
| Three Months Ended |  |
(In millions) | August 28, 2021 |  | August 29, 2020 |  |  |  |
Americas Contract | $ | — |  |  | $ | 1.6 |  |  |  |  |
International Contract | — |  |  | (2.8) |  |  |  |  |
Retail | — |  |  | — |  |  |  |  |
Knoll | — |  |  | — |  |  |  |  |
Total | $ | — |  |  | $ | (1.2) |  |  |  |  |

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI http://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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