SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2019

The Company has two reportable segments: Office and Lifestyle. The Office reportable segment is comprised of the operations of the Office operating segment. The Lifestyle reportable segment is an aggregation of the Lifestyle, Europe, and Muuto operating segments. All unallocated expenses are included within Corporate.

The Office segment includes a complete range of workplace products that address diverse workplace planning paradigms in North America and Europe. These products include: office systems furniture, seating, storage, tables, desks and KnollExtra® accessories. The Office segment includes DatesWeiser and Fully. DatesWeiser, known for its sophisticated meeting and conference tables and credenzas, sets a standard of design, quality and technology integration. Fully is an e-commerce furniture brand selling height-adjustable desks, ergonomic chairs and accessories principally for individual home offices and small businesses.

The Lifestyle segment includes KnollStudio®, HOLLY HUNT®, Muuto®, KnollTextiles®, Spinneybeck® (including Filzfelt®), and Edelman® Leather. Lifestyle products, which are distributed globally, include iconic seating, lounge furniture, side, café and dining chairs as well as conference, training, dining and occasional tables, lighting, rugs, textiles, high-quality fabrics, felt, leather and related architectural products.

During the first quarter of 2019, the Company changed the structure of its internal organization which caused the composition of its reportable segments to change. As a result, DatesWeiser is now a component of the Office operating segment as opposed to the Lifestyle operating segment. As a result of this change in segment reporting, the Company retrospectively revised prior period results, by segment, to conform to current period presentation.

Corporate costs include unallocated costs relating to shared services and general corporate activities such as legal expenses, acquisition expenses, certain finance, human resources, administrative and executive expenses and other expenses that are not directly attributable to an operating segment. Dedicated, direct selling, general and administrative expenses of the segments are included within segment operating profit. Management regularly reviews the costs included in the Corporate function and believes disclosing such information provides more visibility and transparency of how the chief operating decision maker reviews the results for the Company.

The tables below present the Company’s segment information with Corporate costs excluded from reporting segment results. Prior year amounts have been recast to conform to the current presentation (in millions):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
SALES
Office	$	219.1		$	200.6		$	644.5		$	580.3
Lifestyle	137.4			127.1			412.1			367.3
Knoll, Inc.	$	356.5		$	327.7		$	1,056.6		$	947.6
INTERSEGMENT SALES ⁽¹⁾
Office	$	0.6		$	0.4		$	1.5		$	1.4
Lifestyle	2.2			2.6			7.2			8.0
Knoll, Inc.	$	2.8		$	3.0		$	8.7		$	9.4
OPERATING PROFIT
Office ⁽²⁾	$	18.3		$	15.5		$	46.8		$	34.7
Lifestyle	25.0			22.7			71.3			63.8
Corporate ⁽³⁾	(6.6		)	(5.3		)	(18.3		)	(18.3		)
Knoll, Inc.	$	36.7		$	32.9		$	99.8		$	80.2

_______________________________________________________________________________

(1) Intersegment sales are presented on a cost-plus basis, which takes into consideration the effect of transfer prices between legal entities.

(2) Knoll recorded restructuring charges of $0.1 million and $0.2 million during the three and nine months ended September 30, 2019, respectively and $1.2 million and $2.6 million during the three and nine months ended September 30, 2018, respectively, within the Office segment related to an organizational realignment that will result in greater operating efficiency and control.

(3) Knoll recorded acquisition costs within the Corporate segment of $0.3 million related to the acquisition of Fully during the three and nine months ended September 30, 2019 and $0.1 million and $1.6 million related to the acquisition of Muuto during the three and nine months ended September 30, 2018.

The changes in the carrying amount of goodwill by reportable segment are as follows (in millions):



	Office Segment		Lifestyle Segment			Total
Balance as of December 31, 2018	$	39.1	$	281.7		$	320.8
Foreign currency translation adjustment	0.2		(8.8		)	(8.6		)
Goodwill from current year acquisition	17.1		—			17.1
Balance as of September 30, 2019	$	56.4	$	272.9		$	329.3