SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 16. SEGMENT INFORMATION

Following the Segment Reorganization (see Note 1), the Company’s operations are comprised of the Workplace and Lifestyle segments.

The Workplace segment includes a complete range of products that address diverse workplace planning paradigms in North America. These products include: office systems furniture, seating, storage, tables (conference, training), desks (fixed and height-adjustable), textiles, high-quality fabrics, felt, leather and KnollExtra® accessories. The businesses comprising the Workplace segment serve a broad range of customers, from geographically diverse global accounts to consumers and small businesses, and do so through various physical and digital interfaces, including a direct sales force, Company and dealer showrooms, and multiple e-commerce platforms.

The Lifestyle segment product offerings, which are distributed globally, include iconic seating, lounge furniture, side, café and dining chairs, dining and occasional tables, lighting, rugs, leather and related architectural products. The businesses comprising the Lifestyle segment serve affordable luxury and high-end luxury markets that often blur the distinction between commercial and residential spaces, but understand and appreciate the impact that furnishings borne out of exceptional design and made with high-quality, innovative materials can have on their respective environments. Lifestyle products are sold through a global network of showrooms, e-commerce websites, retail stores, independent dealers and a direct sales force.

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 into how the chief operating decision maker reviews the results for the Company.

The following table summarizes segment operating results for the periods presented. Segment results for the three months ended March 31, 2020, have been restated to conform to current year presentation (in millions):

	Three Months Ended March 31,
	2021		2020
SALES (1)
Workplace	$	150.4	$	227.5
Lifestyle	113.8		112.5
Knoll, Inc.	$	264.2	$	340.0
OPERATING PROFIT
Workplace	$	(3.6)	$	9.3
Lifestyle	12.8		8.2
Corporate	(6.9)		(6.1)
Knoll, Inc.	$	2.3	$	11.4

(1) Sales presented above are to external customers only. Intersegment sales were not material during any of the periods presented.

Changes in the carrying amount of goodwill by reportable segment for the three months ended March 31, 2021, are as follows (in millions):

	Workplace		Lifestyle		Total
Balance as of January 1, 2021	$	100.7	$	249.1	$	349.8
Foreign currency translation adjustment	0.1		(8.8)		(8.7)
Balance as of March 31, 2021	$	100.8	$	240.3	$	341.1

In connection with the Segment Reorganization, certain of the Company’s reporting units have changed in composition, and goodwill was reallocated between such reporting units using a relative fair value approach. Accordingly, the Company performed interim goodwill impairment tests in the first quarter of 2021. Based on the results of the tests performed, the Company determined that the fair value of each reporting unit, as reorganized, exceeded its respective carrying amount in each case.

The fair values of the reorganized reporting units as of January 1, 2021, were estimated using similar economic forecasts and assumptions as those used in the testing performed as of October 1, 2020, updated primarily for changes in discount rates. Management judgment is required in the determination of each assumption used in valuation models, and actual results could differ from the estimates. The Company will continue to evaluate goodwill for impairment at least annually as of October 1, and more frequently whenever there are indicators of potential impairment.