10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
/ X /   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE                SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 1, 2006
OR
/    /   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission File Number 0-2648
HNI Corporation           (Exact name of Registrant as specified in its charter)
Iowa         (State or other jurisdiction of incorporation or organization)		42-0617510     (I.R.S. Employer Identification Number)
P. O. Box 1109, 408 East Second Street Muscatine, Iowa 52761-0071 (Address of principal executive offices)		52761-0071 (Zip Code)
Registrant's telephone number, including area code:  563/272-7400
Indicate by check mark whether the registrant (1) has filed all required reports to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES       X                     NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of "accelerated filer" and "large accelerated filer" in Rule 12b-2 of the Exchange Act. Large accelerated filer      X          Accelerated filer                Non-accelerated filer
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      YES                   NO        X
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date.
Class Common Shares, $1 Par Value	Outstanding at July 1, 2006 50,091,315

HNI Corporation and SUBSIDIARIES
INDEX
PART I.    FINANCIAL INFORMATION
	Page
Item 1.    Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets July 1, 2006, and December 31, 2005	3
Condensed Consolidated Statements of Income Three Months Ended July 1, 2006, and July 2, 2005	5
Condensed Consolidated Statements of Income Six Months Ended July 1, 2006, and July 2, 2005	6
Condensed Consolidated Statements of Cash Flows Six Months Ended July 1, 2006, and July 2, 2005	7
Notes to Condensed Consolidated Financial Statements	8
Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.    Quantitative and Qualitative Disclosure about Market Risk	23
Item 4.    Controls and Procedures	23
PART II.    OTHER INFORMATION
Item 1.    Legal Proceedings	24
Item 1A. Risk Factors	24
Item 2.    Unregistered Sales of Securities and Use of Proceeds	24
Item 3.    Defaults Upon Senior Securities - None	-
Item 4.    Submission of Matters to a Vote of Security Holders	25
Item 5.    Other Information - None	-
Item 6.    Exhibits	25
SIGNATURES	26
EXHIBIT INDEX	27

PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements (Unaudited)

HNI Corporation and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
	Jul. 1,      2006       (Unaudited)	Dec. 31,     2005
ASSETS	(In thousands)
CURRENT ASSETS
Cash and cash equivalents   Short-term investments   Receivables   Inventories (Note C)   Deferred income taxes   Prepaid expenses and other current assets	$    26,934 8,820 314,471 112,487 16,413      17,232	$   75,707  9,035 278,515 91,110 15,831      16,400
Total Current Assets	496,357	486,598
PROPERTY, PLANT, AND EQUIPMENT, at cost
Land and land improvements   Buildings   Machinery and equipment   Construction in progress	27,165 258,730 535,693       21,131	26,361 240,174 523,240      23,976
Less accumulated depreciation	842,719     529,175	813,751   519,091
Net Property, Plant, and Equipment	313,544	294,660
GOODWILL	253,723	242,244
OTHER ASSETS	165,326	116,769
Total Assets	$ 1,228,950	$ 1,140,271

See accompanying Notes to Condensed Consolidated Financial Statements.

HNI Corporation and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
	Jul. 1,      2006       (Unaudited)	Dec. 31,      2005
LIABILITIES AND SHAREHOLDERS' EQUITY	(In thousands, except share and per share value data)
CURRENT LIABILITIES
Accounts payable and accrued expenses   Income taxes   Note payable and current maturities of long-term debt   Current maturities of other long-term obligations	$  312,682  8,297  80,306        3,605	$  307,952 1,270 40,350       8,602
Total Current Liabilities	404,890	358,174
LONG-TERM DEBT	205,550	103,050
CAPITAL LEASE OBLIGATIONS	757	819
OTHER LONG-TERM LIABILITIES	49,845	48,671
DEFERRED INCOME TAXES	26,870	35,473
MINORITY INTEREST IN SUBSIDIARY	576	140
SHAREHOLDERS' EQUITY
Capital Stock:   Preferred, $1 par value, authorized   2,000,000 shares, no shares outstanding	-	-
Common, $1 par value, authorized   200,000,000 shares, outstanding -   2006 - 50,091,315 shares;   2005 - 51,848,591 shares	50,091	51,849
Paid-in capital   Retained earnings   Accumulated other comprehensive income	2,296  488,689           (614)	941 540,822              332
Total Shareholders' Equity	540,462	593,944
Total Liabilities and Shareholders' Equity	$ 1,228,950	$ 1,140,271

See accompanying Notes to Condensed Consolidated Financial Statements.

HNI Corporation and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
	Three Months Ended
	Jul. 1,      2006	Jul. 2,       2005
	(In thousands, except share        and per share data)
Net sales Cost of sales   Gross profit Selling and administrative expenses Restructuring and impairment charges   Operating income Interest income Interest expense   Earnings before income taxes and minority interest Income taxes   Earnings before minority interest Minority interest in earnings of subsidiary   Net income	$  671,271            436,758  234,513  185,774                   228  48,511  192                3,617  45,086              16,457  28,629                   (23) $    28,652	$  594,168           379,880 214,288 160,146                      - 54,142 441                 343 54,240            19,255 34,985                      - $    34,985
Net income per common share - basic	$0.56	$0.63
Average number of common shares outstanding - basic	51,009,288	55,130,985
Net income per common share - diluted	$0.56	$0.63
Average number of common shares outstanding - diluted	51,339,367	55,512,902
Cash dividends per common share	$0.18	$0.155

See accompanying Notes to Condensed Consolidated Financial Statements.

HNI Corporation and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Six Months Ended
	Jul. 1,       2006	Jul. 2,        2005
	(In thousands, except share          and per share data)
Net sales	$1,319,948	$1,156,429
Cost of sales	855,825	746,296
Gross profit	464,123	410,133
Selling and administrative expenses	367,784	315,546
Restructuring and impairment charges	1,947	-
Operating income	94,392	94,587
Interest income	471	980
Interest expense	5,004	827
Earnings before income taxes and minority interest	89,859	94,740
Income taxes	32,799	33,633
Earnings before minority interest	$    57,060	$    61,107
Minority interest in earnings of subsidiary	(62)	-
Net income	$    57,122	$   61,107
Net income per common share - basic	$1.11	$1.11
Average number of common shares outstanding - basic	51,422,647	55,153,394
Net income per common share - diluted	$1.10	$1.10
Average number of common shares outstanding - diluted	51,781,098	55,502,312
Cash dividends per common share	$0.36	$0.31

See accompanying Notes to Condensed Consolidated Financial Statements.

HNI Corporation and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Six Months Ended
	Jul. 1, 2006	Jul. 2, 2005
	(In thousands)
Net Cash Flows From (To) Operating Activities:   Net income   Noncash items included in net income:     Depreciation and amortization     Other postretirement and post employment benefits     Excess tax benefits from stock compensation     Deferred income taxes     Loss on sale, retirement and impairment of property, plant and         equipment     Stock issued to retirement plan     Other - net   Net increase (decrease) in non-cash operating assets and liabilities   Increase (decrease) in other liabilities     Net cash flows from (to) operating activities	$   57,122  34,857  1,055  (720) (9,090) 344  7,948  3,934  (60,053)          (4,531) 30,866	$     61,107  33,385   1,001  -  (7,553)                       982                     6,199                       706  (37,868)       (1,687) 56,272
Net Cash Flows From (To) Investing Activities:   Capital expenditures   Proceeds from sale of property, plant and equip.   Capitalized software   Acquisition spending, net of cash acquired   Short-term investments - net   Purchase of long-term investments   Sales or maturities of long-term investments   Other-net     Net cash flows from (to) investing activities	(32,683) 965  (490) (64,120) 926  (6,300) 3,900                      -  (97,802)	(15,333) 231  (2,162) (10,093) 2,400  (28,177) 27,655                (255) (25,734)
Net Cash Flows From (To) Financing Activities:   Proceeds from sales of HNI Corporation common stock   Purchase of HNI Corporation common stock   Excess tax benefits from stock compensation   Proceeds from long-term debt   Payments of note and long-term debt and other financing    Dividends paid     Net cash flows from (to) financing activities	2,908  (107,858) 720  411,675  (270,728)         (18,554) 18,163	11,933  (24,934) -  29,000  (29,340)          (17,128) (30,469)
Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period	(48,773)           75,707	69               29,676
Cash and cash equivalents at end of period	$  26,934	$   29,745

See accompanying Notes to Condensed Consolidated Financial Statements.

HNI Corporation and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 1, 2006

Note A.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  The December 31, 2005 consolidated balance sheet included in this From 10-Q was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the six-month period ended July 1, 2006 are not necessarily indicative of the results that may be expected for the year ending December 30, 2006.  For further information, refer to the consolidated financial statements and footnotes included in HNI Corporation's (the "Corporation") annual report on Form 10-K for the year ended December 31, 2005.

Note B. Stock-Based Compensation

Under the Corporation's 1995 Stock-Based Compensation Plan (the "Plan"), as amended and restated effective November 10, 2000, the Corporation may award options to purchase shares of the Corporation's common stock and grant other stock awards to executives, managers, and key personnel.  As of July 1, 2006 there are approximately 2.5 million shares available for future issuance under the Plan.  The Plan is administered by the Human Resources and Compensation Committee of the Board of Directors.  Restricted stock awarded under the Plan is expensed ratably over the vesting period of the awards.  Stock options awarded to employees under the Plan must be at exercise prices equal to or exceeding the fair market value of the Corporation's common stock on the date of grant.  Stock options are generally subject to four-year cliff vesting and must be exercised within 10 years from the date of grant.

The Corporation also has a shareholder approved Members' Stock Purchase Plan (the "MSP Plan").  The price of the stock purchased under the MSP Plan is 85% of the closing price on the applicable purchase date.  During the six months ended July 1, 2006, 53,194 shares of common stock were issued under the MSP Plan at an average price of $43.64.

The Corporation adopted the provisions of Statement of Financial Accounting Standards No. 123(R), "Share-Based Payment" ("SFAS 123(R)"), beginning January 1, 2006, using the modified prospective transition method.  This statement requires the Corporation to measure the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and to recognize cost over the requisite service period.  Under the modified prospective transition method, financial statements for periods prior to the date of adoption are not adjusted for the change in accounting.

Prior to January 1, 2006, the Corporation used the intrinsic value method to account for stock-based employee compensation under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and therefore did not recognize compensation expense in association with options granted at or above the market price of common stock at the date of grant.

As a result of adopting the new standard, earnings before income taxes for the three months ended July 1, 2006 decreased by $0.8 million, and net earnings decreased by $0.5 million, or $.01 per basic share and $.01 per diluted share.  These results reflect stock compensation expense of $0.8 million and tax benefits of $0.3 million for the period.  Earnings before income taxes for the six months ended July 1, 2006 decreased by $1.6 million, and net earnings decreased by $1.0 million, or $.02 per basic share and $.02 per diluted share.  These results reflect stock compensation expense of $1.6 million and tax benefits of $0.6 million for the period.

Adoption of the new standard also affected the presentation of cash flows.  The change is related to tax benefits associated with tax deductions that exceed the amount of compensation expense recognized in the financial statements.  For the six months ended July 1, 2006, cash flow from operating activities was reduced by $0.7 million and cash flow from financing activities was increased by $0.7 million as a result of the new standard.

Concurrent with the adoption of the new statement, the Corporation began to use the non-substantive vesting period approach for attributing stock compensation to individual periods.  The nominal vesting period approach was used in determining the stock compensation expense for the Corporation's pro forma net earnings disclosure for the three and six months ended July 2, 2005, as presented in the table that follows.  The change in the attribution method will not affect the ultimate amount of stock compensation expense recognized, but it has accelerated the recognition of such expense for non-substantive vesting conditions, such as retirement eligibility provisions.  Under both approaches, the Corporation elected to recognize stock compensation on a straight-line basis.

The following table presents a reconciliation of reported net earnings and per share information to pro forma net earnings and per share information that would have been reported if the fair value method had been used to account for stock-based employee compensation last year:

	Three Months Ended	Six Months  Ended
(in thousands)	July 2, 2005	July 2, 2005
Net income, as reported	$ 34,985	$ 61,107
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects	(456)	(890)
Pro forma net income	$ 34,529	$ 60,217
Earnings per share:
Basic - as reported	$0.63	$1.11
Basic - pro forma	$0.63	$1.09
Diluted - as reported	$0.63	$1.10
Diluted - pro forma	$0.62	$1.08

The stock compensation expense for the six months ended July 1, 2006 and the stock compensation expense used in the preceding disclosure of pro forma net earnings for the six months ended July 2, 2005 was estimated on the date of grant using the Black-Scholes option-pricing model that used the following assumptions by grant year:

	Six Months Ended	Year Ended
	Jul. 1, 2006	Dec. 31, 2005
Expected term	7 years	7 years
Expected volatility:
Range used	29.75% - 31.23%	33.49% - 31.77%
Weighted-average	31.21%	33.46%
Expected dividend yield:
Range used	1.24% - 1.43%	1.17% - 1.45%
Weighted-average	1.24%	1.45%
Risk-free interest rate
Range used	4.62% - 5.08%	4.21% - 4.57%

Expected volatilities are based on historical volatility due to the fact that the Corporation did not feel that future volatility over the expected term of the options is likely to differ from the past.  The Corporation used a simple-average calculation method based on monthly frequency points for the prior seven years.  The Corporation used the current dividend yield as there are no plans to substantially increase or decrease its dividends.  The Corporation elected to use the simplified method as allowed by Staff Accounting Bulletin (the "SAB") No. 107 "Share Based Payment" to determine the expected term since the awards qualified as "plain vanilla" options as defined in the SAB.  The risk-free interest rate was selected based on yields from U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the options being valued.

Changes in outstanding stock options for the six months ended July 1, 2006 were as follows:

	Number	Weighted-Average Exercise Price
Balance at December 31, 2005	1,128,650	$31.84
Options granted	135,946	58.06
Options exercised	(39,000)	22.91
Options forfeited	(22,480)	39.91
Balance at July 1, 2006	1,203,116	$35.61

A summary of the Corporation's nonvested shares as of July 1, 2006 and changes during the six-month period are presented below:

Nonvested Shares	Shares	Weighted-Average Grant-Date       Fair Value
Nonvested at December 31, 2005	695,400	$14.07
Granted	135,946	21.39
Vested	(142,900)	11.91
Forfeited	(22,480)	15.90
Nonvested at July 1, 2006	665,966	$15.97

At July 1, 2006, there was $5.4 million of unrecognized compensation cost related to nonvested awards, which the Corporation expects to recognize over a weighted-average period of 1.5 years. 

Information about stock options that are vested or expected to vest and that are exercisable at July 1, 2006, follows:

Options	Number	Weighted-Average    Exercise Price	Weighted-Average Remaining  Life in Years	Aggregate Intrinsic Value ($000s)
Vested or expected to vest	1,167,796	$34.62	5.8	$12,530
Exercisable	537,150	$28.21	3.1	$  9,207

The weighted-average grant-date fair value of options granted was $21.39 for the six months ended July 1, 2006.  Other information for the three and six-month periods follows:

	Three months ended		Six months ended
(In thousands)	Jul. 1,  2006	Jul. 2,  2005	Jul. 1,   2006	Jul. 2,   2005
Total fair value of shares vested	$      -	$       -	$1,702	$   875
Total intrinsic value of options exercised	459	6,705	1,301	7,595
Cash received from exercise of stock options	266	6,660	893	7,533
Tax benefit realized from exercise of stock options	168	2,380	475	2,696

Note C.  Inventories

The Corporation values its inventory at the lower of cost or market with approximately 85% valued by the last-in, first-out (LIFO) method.

(In thousands)	Jul. 1, 2006 (Unaudited)	Dec. 31, 2005
Finished products	$   75,941	$   61,027
Materials and work in process	52,456	46,398
LIFO allowance	(15,910)	(16,315)
	$ 112,487	$   91,110

Note D.  Comprehensive Income and Shareholders' Equity

The Corporation's comprehensive income for the first six months of 2006 consisted of additional minimum pension liability and foreign currency adjustments.

For the six months ended July 1, 2006, the Corporation repurchased 2,058,176 shares of its common stock at a cost of approximately $107.9 million.  As of July 1, 2006, $35.6 million of the Board of Director's current repurchase authorization remained unspent.

Note E.  Earnings Per Share

The following table reconciles the numerators and denominators used in the calculation of basic and diluted earnings per share (EPS):

	Three Months Ended		Six Months Ended
	Jul. 1, 2006	Jul. 2, 2005	Jul.1, 2006	Jul. 2, 2005
Numerators: Numerator for both    basic and diluted EPS    net income (in thousands)	$28,652	$34,985	$57,122	$61,107
Denominators: Denominator for basic EPS    weighted-average common    shares outstanding	51,009,288	55,130,985	51,422,647	55,153,394
Potentially dilutive shares    from stock option plans	330,079	381,917	358,451	348,918
Denominator for diluted EPS	51,339,367	55,512,902	51,781,098	55,502,312
Earnings per share - basic	$0.56	$0.63	$1.11	$1.11
Earnings per share - diluted	$0.56	$0.63	$1.10	$1.10

Certain exercisable and non-exercisable stock options were not included in the computation of diluted EPS at July 1, 2006, because their inclusion would have been anti-dilutive.  There were no stock options outstanding, which met this criterion for the three and six months ended July 2, 2005.  The number of stock options outstanding, which met this criterion for the three and six months ended July 1, 2006, was 135,566.

Note F.  Restructuring Reserve and Plant Shutdowns

As a result of the Corporation's business simplification and cost reduction strategies, the Corporation began the shutdown of two office furniture manufacturing facilities in the third quarter of 2005.  In connection with those shutdowns, the Corporation incurred $0.2 million of current period charges during the quarter ended July 1, 2006.  The closures and consolidations are virtually complete with the exception of the sale of the facility.  The following is a summary of changes in restructuring accruals during the second quarter of 2006:

(In thousands)	Severance	Facility Exit Costs &    Other	Total
Balance as of April 1, 2006	$       -	$    537	$    537
Restructuring charges	-	191	191
Cash payments	-	(635)	(635)
Balance as of July 1, 2006	$       -	$      93	$     93

Note G.  Business Combinations

The Corporation completed the acquisition of Lamex, a privately held Chinese manufacturer and marketer of office furniture, as well as a small office furniture services company and a small manufacturer of fireplace facings during the first quarter ending April 1, 2006.  The combined purchase price for these acquisitions less cash acquired totaled approximately $77.8 million, of which $64.1 million was paid in cash and the remaining is due over the remainder of the year.  The Corporation did increase its borrowings under its revolving credit facility to help fund the acquisitions.  The Corporation is in the process of finalizing the allocation of the purchase price, primarily with respect to deferred taxes and pension plans.  There are approximately $51.7 million of intangibles associated with these acquisitions.  Of these acquired intangible assets, $14 million was assigned to a trade name that is not subject to amortization.  The remaining $37.7 million have estimated useful lives ranging from two to fifteen years.  There is approximately $10.1 million of goodwill associated with these acquisitions, of which $7.3 million was assigned to the furniture segment and $2.8 was assigned to the hearth segment.  Approximately $7.1 million of the goodwill is not deductible for income tax purposes.

Note H. Goodwill and Other Intangible Assets

The table below summarizes amortizable definite-lived intangible assets as of July 1, 2006 and December 31, 2005, which are reflected in Other Assets in the Corporation's condensed consolidated balance sheets:

(In thousands)	Jul. 1, 2006	Dec. 31, 2005
Patents	$  18,780	$  18,480
Customer relationships and other	106,171	67,211
Less:  accumulated amortization	(34,310)	(28,758)
	$  90,641	$  56,933

Aggregate amortization expense for the three and six months ended July 1, 2006 and July 2, 2005 was $2.9 million and $5.2 million, and $1.9 million and $3.4 million, respectively.  Amortization expense is estimated to range between $5.9 to $9.2 million per year over the next five years.

The Corporation also owns trademarks and trade names with a net carrying amount of $44.2 million.  The trademarks are deemed to have indefinite useful lives because they are expected to generate cash flows indefinitely.

The changes in the carrying amount of goodwill since December 31, 2005, are as follows by reporting segment:

(In thousands)	Office  Furniture	Hearth  Products	Total
Balance as of December 31, 2005	$ 77,659	$164,585	$242,244
Goodwill increase during period	8,689	2,790	11,479
Balance as of July 1, 2006	$ 86,348	$167,375	$253,723

In accordance with SFAS No. 142 "Goodwill and Other Intangible Assets," the Corporation evaluates its goodwill for impairment on an annual basis based on values at the end of the third quarter or whenever indicators of impairment exist.  The Corporation has previously evaluated its goodwill for impairment and has determined that the fair value of the reporting unit exceeds their carrying value so no impairment of goodwill was recognized.  The increase in goodwill relates to the acquisitions completed during the first quarter and final purchase price adjustments related to prior acquisitions.  See Note G for further information. 

Note I.  Long-Term Debt

On April 6, 2006, the Corporation refinanced $150 million of a revolving credit facility with 5.54 percent ten-year unsecured Senior Notes due in 2016 issued through the private placement debt market.  Interest payments are due biannually on April 1 and October 1 of each year and the principal is due in a lump sum in 2016.  The Corporation maintained the revolving credit facility with a maximum borrowing of $300 million.  Amounts borrowed under the Credit Agreement may be borrowed, repaid and reborrowed from time to time until January 28, 2011.  As of July 1, 2006, $132.5 million of the revolver was outstanding with $80 million classified as short-term as the Corporation expects to repay that portion of the borrowings within a year.

Certain of the Corporation's borrowing arrangements include covenants, which limit the assumption of additional debt and lease obligations.  The Corporation has been and currently is in compliance with the covenants related to these debt agreements.

Note J.  Product Warranties

The Corporation issues certain warranty policies on its furniture and hearth products that provide for repair or replacement of any covered product or component that fails during normal use because of a defect in design or workmanship.

A warranty reserve is determined by recording a specific reserve for known warranty issues and an additional reserve for unknown claims that are expected to be incurred based on historical claims experience.  Actual claims incurred could differ from the original estimates, requiring adjustments to the reserve.  Activity associated with warranty obligations was as follows during the period:

                                                                                          Six Months Ended

(In thousands)	Jul. 1,  2006	Jul. 2,   2005
Balance at beginning of period Accruals for warranties issued during the period Accrual related to pre-existing warranties Settlements made during the period	$ 10,157  4,972  445     (5,139)	$ 10,794  4,564  540     (5,383)
Balance at end of period	$ 10,435	$ 10,515

Note K.  Postretirement Health Care

In accordance with the interim disclosure requirements of revised SFAS No. 132, "Employers' Disclosures about Pensions and other Postretirement Benefits," the following table sets forth the components of net periodic benefit cost included in the Corporation's income statement for:

	Six Months Ended
(In thousands)	Jul. 1,   2006	Jul. 2,   2005
Service cost	$   163	$    152
Interest cost	526	528
Expected return on plan assets	(87)	(102)
Amortization of transition obligation	291	290
Amortization of prior service cost	115	116
Amortization of (gain)/loss	47	18
Net periodic benefit cost	$1,055	$ 1,002

In May 2004, The Financial Accounting Standards Board ("FASB") issued FASB Staff Position No. 106-2. "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003" (the "Act").  The Corporation has determined that the benefits provided by the plan are not actuarially equivalent to the Medicare Part D benefit under the Act based on the percentage of the cost of the plan that the Corporation provides.

Note L.  Commitments and Contingencies

During the second quarter ended June 28, 2003, the Corporation entered into a one-year financial agreement for the benefit of one of its distributor chain partners, which was subsequently extended through August 31, 2005.  During the third quarter of 2005, the Corporation paid $1.2 million associated with this guarantee.  As of July 1, 2006, the Corporation has recovered substantially all of this amount through liquidations of secured collateral and settlements.

The Corporation utilizes letters of credit in the amount of $24 million to back certain financing instruments, insurance policies and payment obligations.  The letters of credit reflect fair value as a condition of their underlying purpose and are subject to fees competitively determined.

The Corporation replaced a previously existing transportation service contract during the first quarter of 2006 with a new six-year contract.  The contract provides for minimum payments of approximately $10 million a year of which $3.3 million are related to the equipment portion of the contract which has been determined to be an operating lease.

The Corporation has contingent liabilities, which have arisen in the course of its business, including pending litigation, preferential payment claims in customer bankruptcies, environmental remediation, taxes, and other claims. 

Note M.  New Accounting Standards

In December 2004, the FASB issued SFAS No. 123(R) which replaces Original SFAS No. 123 and supercedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25").  SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values, beginning with the first annual fiscal period after June 15, 2005.  Under the Original SFAS No. 123, this accounting treatment was optional with pro forma disclosures required.  The Corporation adopted SFAS No. 123(R) in the first quarter of fiscal 2006, beginning January 1, 2006.  See Note B, Stock Based Compensation for the impact of the adoption of SFAS No. 123(R) on net income and net income per share.
           
In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48").  FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with SFAS No. 109, "Accounting for Income Taxes."  FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  This Interpretation is effective for fiscal years beginning after December 15, 2006.  The Company is currently reviewing the impact, if any, that FIN 48 will have on its consolidated financial statements.

Note N.  Business Segment Information

Management views the Corporation as operating in two business segments: office furniture and hearth products with the former being the principal business segment.

The office furniture segment manufactures and markets a broad line of metal and wood commercial and home office furniture which includes file cabinets, desks, credenzas, chairs, storage cabinets, tables, bookcases, freestanding office partitions and panel systems, and other related products.  The hearth product segment manufactures and markets a broad line of manufactured gas-, pellet- and wood-burning fireplaces and stoves, fireplace inserts, and chimney systems principally for the home.

For purposes of segment reporting, intercompany sales transfers between segments are not material and operating profit is income before income taxes exclusive of certain unallocated corporate expenses.  These unallocated corporate expenses include the net cost of the Corporation's corporate operations, interest income, and interest expense.  The increase in unallocated corporate expenses compared to prior year is due to increased interest expense and stock-based compensation expense.  Management views interest income and expense as corporate financing costs and not as a business segment cost.  In addition, management applies one effective tax rate to its consolidated income before income taxes so income taxes are not reported or viewed internally on a segment basis.

The Corporation's primary market and capital investments are concentrated in the United States.

Reportable segment data reconciled to the consolidated financial statements for the three and six month periods ended July 1, 2006, and July 2, 2005, is as follows:

	Three Months Ended		Six Months Ended
(In thousands)	Jul. 1,     2006	Jul. 2,    2005		Jul. 1,    2006	Jul. 2,     2005
Net Sales:   Office furniture   Hearth products	$   514,305      156,966	$   455,246       138,922		$1,005,024       314,924	$   882,793      273,636
	$   671,271	$   594,168		$1,319,948	$1,156,429
Operating Profit:   Office furniture     Operations before restructuring charges     Restructuring and impairment charges        Office Furniture - net        Hearth products     Total operating profit   Unallocated corporate expense     Income before income taxes	$    38,500           (228) 38,272       18,206  56,478      (11,358) $    45,120	$    46,401                 -  46,401        16,863  63,264        (9,024) $    54,240		$     80,679         (1,947) 78,732        29,939  108,671       (18,717) $     89,954	$     85,209                  -  85,209        27,343  112,552       (17,812) $     94,740
Depreciation & Amortization Expense:   Office furniture   Hearth products   General corporate	$    12,972  4,164             894  $    18,030	$    10,960  3,731          1,812  $    16,503		$     24,127  8,697          2,034  $     34,858	$     21,928  8,053           3,404  $     33,385
Capital Expenditures (including capitalized software):   Office furniture   Hearth products   General corporate	$    12,388  2,674          3,863  $    18,925	$      5,344  2,037             667  $      8,048		$     21,859  5,444          5,870  $     33,173	$     11,942  4,599              954  $     17,495
				As of       Jul. 1,     2006	As of      Jul. 2,     2005
Identifiable Assets:   Office furniture   Hearth products   General corporate				$   737,297  387,641      104,012  $1,228,950	$   610,399  359,236       103,514  $1,073,149

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Corporation has two reportable core operating segments:  office furniture and hearth products.  The Corporation is the second largest office furniture manufacturer in the world and the nation's leading manufacturer and marketer of gas- and wood-burning fireplaces.  The Corporation utilizes its split and focus, decentralized business model to deliver value to its customers with its various brands and selling models.  The Corporation is focused on growing its existing businesses while seeking out and developing new opportunities for growth.

Net sales for the second quarter of 2006 increased 13.0 percent.  The Corporation continued to experience solid growth in both the office furniture and hearth segments driven by solid organic growth and from acquisitions completed in the second half of 2005 and early 2006.  Gross margins for the quarter decreased from prior year levels due to broad based increases in material costs.  Selling and administrative expenses increased driven by significantly higher transportation costs, the effect of acquisitions and investments in market initiatives.  As a result of the higher material and transportation costs and interest expense, net income decreased 18.1 percent for the quarter.

Critical Accounting Policies

The preparation of the financial statements requires the Corporation to make estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  The Corporation continually evaluates its accounting policies and estimates.  The Corporation bases its estimates on historical experience and on a variety of other assumptions believed to be reasonable in order to make judgments about the carrying value of assets and liabilities.  Actual results may differ from these estimates under different assumptions or conditions.  A summary of the more significant accounting policies that require the use of estimates and judgments in preparing the financial statements is provided in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2005.  As of January 1, 2006, the Corporation adopted FAS123(R) "Share-Based Payment" which requires the Corporation to measure the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and to recognize cost of the requisite service period.  During the first six months of 2006, there were no material changes in the accounting policies and assumptions previously disclosed except for the adoption of FAS123(R).

Results of Operations

The following table presents certain key highlights from the results of operations for the periods indicated:

	Three Months Ended			Six Months Ended
(In thousands)	Jul. 1,     2006	Jul. 2,    2005	Percent Change	Jul. 1,       2006	Jul. 2,     2005	Percent Change
Net sales	$671,271	$594,168	13.0%	$1,319,948	$1,156,429	14.1%
Cost of sales	436,758	379,880	15.0	855,825	746,296	14.7
Gross profit	234,513	214,288	9.4	464,123	410,133	13.2
Selling & administrative    expenses	185,774	160,146	16.0	367,784	315,546	16.6
Restructuring & impairment   charges	228	-	-	1,947	-	-
Operating income	48,511	54,142	-10.4	94,392	94,587	- 0.2
Interest income (expense)   net	(3,425)	98	NM	(4,533)	153	NM
Earnings before income   taxes and minority interest	45,086	54,240	-16.9	89,859	94,740	- 5.2
Income taxes	16,457	19,255	-14.5	32,799	33,633	- 2.5
Minority interest in earnings   of a subsidiary	(23)	-	-	(62)	-	-
Net income	$  28,652	$  34,985	-18.1%	$     57,122	$     61,107	- 6.5%

Results of Operations

The Corporation experienced solid sales growth in the quarter, up 13.0 percent or $77.1 million compared to the same quarter last year.  Acquisitions completed during the first quarter, along with acquisitions completed during 2005 accounted for $35 million of the increase in sales.

Gross margins for the second quarter decreased to 34.9 percent compared to 36.1 percent for the same quarter last year.  The decrease was primarily due to broad based increases in material costs. 

Total selling and administrative expenses for the quarter increased by $25.9 million to 27.7 percent of sales compared to 27.0 percent in second quarter 2005.  Included in second quarter 2006 were increased freight and distribution costs of $10 million due to volume, rate increases, and fuel surcharges; additional selling and administrative costs of $12 million associated with new acquisitions, $0.2 million of restructuring charges from two office furniture facilities that began in the third quarter of 2005; $0.8 million of stock-based compensation expense due to the adoption of SFAS 123(R); and investments in selling and marketing initiatives.

Net income decreased 18.1 percent and net income per diluted share decreased 11.1 percent compared to the same quarter in 2005.  Interest expense increased $3.3 million during the quarter on moderate debt levels, consistent with the Corporation's strategy of maintaining a more efficient capital structure.  Net income per share was positively impacted $0.04 per share as a result of the Corporation's share repurchase program.

The Corporation increased its annualized effective tax rate at the beginning of the year to 36.5 percent compared to 35.5 percent in 2005 due primarily to increased state taxes and the expiration of the research investment tax credit.

For the first six months of 2006, consolidated net sales increased 14.1 percent to $1.3 billion compared to $1.2 billion in 2005.  Acquisitions accounted for approximately $56 million or 4.9 percentage points of the increase.  Gross margins year-to-date decreased to 35.2 percent compared to 35.5 percent last year due to increased material costs.  Net income was $57.1 million compared to $61.1 million in 2005, a decrease of 6.5 percent.  Net income per share remained constant at $1.10 per diluted share due to a $0.07 per share positive impact from the Corporation's share repurchase program.

Office Furniture

Second quarter sales for the office furniture segment increased 13.0 percent or $59.1 million to $514.3 million from $455.2 million for the same quarter last year.  Sales from the Corporation's acquisitions since second quarter 2005 accounted for $30 million of the increase.  Operating profit prior to unallocated corporate expenses as a percent of sales decreased to 7.4 percent versus 10.2 percent in the same quarter last year.  Operating profit was negatively impacted by higher material, transportation and other input costs, and $0.2 million of costs related to facility shutdowns.  Transition costs related to the acquisition of Lamex and Allsteel distribution acquisitions negatively impacted profitability during the quarter as anticipated. 

Net sales for the first six months of 2006 increased 13.8 percent to $1.0 billion compared to $0.9 billion in 2005.  Operating profit as a percentage of sales decreased to 7.8 percent compared to 9.7 percent in the prior year.

Hearth Products

Second quarter net sales for the hearth products segment increased 13.0 percent or $18.0 million to $157.0 million from $138.9 million for the same quarter last year.  The Corporation's acquisitions completed since the second quarter of 2005 accounted for $5 million of the increase.  Operating profit prior to unallocated corporate expenses increased to $18.2 million from $16.9 million in the same quarter last year.  Operating profit as a percent of net sales decreased to 11.6 percent compared to 12.1 percent in 2005 due to increased freight and distribution costs, a higher mix of lower margin remodel/retrofit business, and continued investment in brand building initiatives. 

Net sales for the first six months of 2006 increased 15.1 percent to $314.9 million compared to $273.6 million in 2005.  Operating profit as a percentage of sales decreased to 9.5 percent compared to 10.0 percent in the prior year.

Liquidity and Capital Resources

As of July 1, 2006, cash and short-term investments decreased to $35.8 million compared to $84.7 million at year-end 2005.  Cash flow from operations for the first six months was $30.9 million compared to $56.3 million in 2005.  The decline in operating cash flow was primarily due to the amount of marketing program and incentive compensation payouts driven by strong 2005 results as well as the timing of marketing program payments due to customer agreements.  Trade receivables increased from year-end due to seasonality, increased volume and acquisitions completed during the year.  Inventory increased from year-end due to seasonality, increased volume, acquisitions completed during the year, and additional imported inventory with longer lead times.  Cash flow and working capital management continue to be a major focus of management to ensure the Corporation is poised for growth.  The Corporation has sufficient liquidity to manage its operations and as of July 1, 2006 maintained additional borrowing capacity of $144 million, net of amounts designated for letters of credit, through a $300 million revolving bank credit agreement.

Net capital expenditures, including capitalized software, for the first six months of 2006 were $33.2 million compared to $17.5 million in 2005 and were primarily for tooling and equipment for new products and efficiency initiatives.  For the full year 2006, capital expenditures are expected to be approximately 30 to 40 percent higher than 2005 due to increased focus on new products and process improvement, and increased investment in distribution.

The Corporation completed the acquisition of Lamex, a privately held Chinese manufacturer and marketer of office furniture, as well as a small office furniture services company and a small manufacturer of fireplace facings, for a total of $64.1 million in cash.  The Corporation accrued for an additional payment due to the seller of over $10 million in the quarter with the actual cash payment occurring after quarter end.  During the first six months of 2006, net borrowings under the Corporation's revolving credit facility increased $142.5 million to fund acquisitions, share repurchases, and seasonal cash requirements.  In early April, the Corporation refinanced $150 million of the revolver borrowings with 5.54 percent ten-year Senior Notes due in 2016 issued through the private placement debt market.  As of July 1, 2006, $132.5 million of the revolver was outstanding with $80 million classified as short-term as the Corporation expects to repay that portion of the borrowings within a year.

The Board of Directors declared a regular quarterly cash dividend of $0.18 per share on its common stock on May 2, 2006, to shareholders of record at the close of business on May 12, 2006.  It was paid on June 1, 2006.  This was the 205^th consecutive quarterly dividend paid by the Corporation.

For the six months ended July 1, 2006, the Corporation repurchased 2,058,176 shares of its common stock at a cost of approximately $107.9 million, or an average price of $52.40.  As of July 1, 2006, $35.6 million of the Board of Director's current repurchase authorization remained unspent.      

Off-Balance Sheet Arrangements

The Corporation does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material.

Contractual Obligations

Contractual obligations associated with ongoing business and financing activities will result in cash payments in future periods.  A table summarizing the amounts and estimated timing of these future cash payments was provided in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2005.  During the first six months of fiscal 2006, with the exception of Senior Notes issued through the private placement debt market (as described in Note I), and a new transportation service contract (as described in Note L), there were no material changes outside the ordinary course of business in the Corporation's contractual obligations or the estimated timing of the future cash payments.

Commitments and Contingencies

The Corporation is involved in various kinds of disputes and legal proceedings that have arisen in the course of its business, including pending litigation, preferential payment claims in customer bankruptcies, environmental remediation, taxes and other claims.  It is the Corporation's opinion, after consultation with legal counsel, that additional liabilities, if any, resulting from these matters are not expected to have a material adverse effect on the Corporation's financial condition, although such matters could have a material effect on the Corporation's quarterly or annual operating results and cash flows when resolved in a future period.

Looking Ahead

Global Insight, the Business and Institutional Furniture Manufacturer's Association's forecasting consultant, estimates U.S. office furniture shipments to increase 11 percent in 2006 compared to 13 percent in 2005.  The housing market, a key indicator for the hearth industry, has slowed significantly.

Management believes that its core businesses are well positioned in their markets, are competing well and the Corporation's strategic growth initiatives are on track for solid performance.  However, profitability will be challenged due to increased input costs.  The Corporation has taken steps to adjust to a higher cost environment, implementing price increases where able, tightening up spending and continuing to aggressively go after reductions in material and other input costs.

The Corporation continues to focus on creating long-term shareholder value by growing its business through investment in building brands, product solutions, and selling models, enhancing its strong member-owner culture and remaining focused on its long-standing continuous improvement programs to build best total cost and a lean enterprise.

Forward-Looking Statements

Statements in this report that are not strictly historical, including statements as to plans, objectives, and future financial performance, are "forward-looking" statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Words, such as "anticipate," "believe," "could," "confident," "estimate," "expect," "forecast," "intend," "likely," "may," "plan," "possible," "potential," "predict," "project," "should," and variations of such words and similar expressions identify forward-looking statements.  Forward-looking statements involve known and unknown risks, which may cause the Corporation's actual results in the future to differ materially from expected results.  These risks include, without limitation:  the Corporation's ability to realize financial benefits from its (a) price increases, (b)  cost containment and business simplification initiatives, (c) investments in strategic acquisitions, new products and brand building, (d) investments in distribution and rapid continuous improvement, (e) repurchases of common stock, and (f) ability to maintain its effective tax rate; uncertainty related to the availability of cash to fund future growth; lower than expected demand for the Corporation's products due to uncertain political and economic conditions; lower industry growth than expected; major disruptions at our key facilities or in the supply of any key raw materials, components or finished goods; uncertainty related to disruptions of business by terrorism, military action, acts of God or other Force Majeure events; competitive pricing pressure from foreign and domestic competitors; higher than expected costs and lower than expected supplies of materials (including steel and petroleum based materials); higher than expected costs for energy and fuel; changes in the mix of products sold and of customers purchasing; currency fluctuations and other factors described in the Corporation's annual and quarterly reports filed with the Securities and Exchange Commission on Forms 10-K and 10-Q.  The Corporation undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

Item 3.  Quantitative and Qualitative Disclosure about Market Risk

As of July 1, 2006, there were no material changes to the financial market risks that affect the quantitative and qualitative disclosures presented in item 7A of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2005.

Item 4.  Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934 as amended, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms.  Disclosure controls and procedures are also designed to ensure that information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

On March 1, 2006, the Corporation completed the acquisition of Lamex as discussed in Note G to the Corporation's condensed consolidated financial statements.  As of December 30, 2006, the Corporation's management will exclude Lamex from its assessment of the Corporation's internal control over financial reporting as it was acquired during the fiscal year.  The Corporation is in the process of assessing Lamex's internal control over financial reporting and will be implementing changes to better align its reporting and controls with those of the Corporation.  Lamex's results of operations and financial position for the fiscal quarter ended July 1, 2006, were insignificant to the Corporation's consolidated financial statements.  There have not been any changes in the Corporation's internal control over financial reporting, due to the Lamex acquisition or otherwise, during the fiscal quarter ended July 1, 2006, that have materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.

Under the supervision and with the participation of management, the chief executive officer and chief financial officer of the Corporation have evaluated the effectiveness of the design and operation of the Corporation's disclosure controls and procedures as of July 1, 2006, and, based on their evaluation, the chief executive officer and chief financial officer have concluded that these controls and procedures are effective.

PART II.     OTHER INFORMATION

Item 1.  Legal Proceedings

There are no new legal proceedings or material developments to report.

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in the "Risk Factors" section of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2005 and the Corporation's Quarterly Report on Form 10-Q for the quarter ended April 1, 2006.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following is a summary of share repurchase activity during the second quarter ended July 1, 2006.

Period	(a) Total Number of  Shares (or Units)        Purchased (1)	(b) Average  price Paid   per Share or       Unit	(c) Total Number of   Shares (or Units)    Purchased as Part of  Publicly Announced       Plans or Programs	(d) Maximum Number (or      Approximate Dollar         Value) of Shares (or       Units) that May Yet be         Purchased Under the                Plans or Programs
4/2/06 - 4/29/06	202,117	$54.89	202,117	$115,758,685
4/30/06 - 5/27/06	997,364	$52.28	997,364	$ 63,617,803
5/28/06- 7/1/06	567,820	$49.29	567,820	$ 35,629,064
Total	1,767,301	$51.62	1,767,301	$35,629,064

(1)  No shares were purchased outside of a publicly announced plan or program.

The Corporation repurchases shares under previously announced plans authorized by the Board of Directors as follows:

         -   Plan announced November 11, 2005, providing share repurchase authorization of $200,000,000 with no specified expiration date.

         -   No repurchase plans expired or were terminated during the second quarter, nor do any plans exist under which the Corporation does not intend to make further purchases.

Item 4.      Submission of Matters to a Vote of Security Holders

The Annual Meeting of Shareholders of HNI Corporation was held on May 2, 2006, for purposes of electing five Directors to the Board of Directors, and to ratify the Audit Committee's selection of PricewaterhouseCoopers LLP as the Corporation's independent registered public accountant for the fiscal year ended December 30, 2006.  As of March 3, 2006, the record date for the meeting, there were 51,941,426 shares of common stock issued and outstanding and entitled to vote at the meeting.  The first proposal voted upon was the election of one Director for a term of one year and four Directors for a term of three years and until their successors are elected and shall qualify.  The five persons nominated by the Corporation's Board of Directors received the following votes and were elected:

	For	Withheld/  Abstained	Against
One-Year Term: James R. Jenkins Three-Year Term: Stan A. Askren Gary M. Christensen Joseph Scalzo Ronald V. Waters, III	46,663,801 or 89.83% 46,158,373 or 88.87% 46,650,826 or 89.81% 46,582,896 or 89.68% 46,603,330 or 89.72%	356,070 or 0.69% 861,497 or 1.66% 369,045 or 0.71% 436,975 or 0.84% 416,541 or 0.80%	-0- or 0% -0- or 0% -0- or 0% -0- or 0% -0- or 0%

Other Directors whose term of office as a Director continued after the meeting are:  Miguel M. Calado, Cheryl A. Francis, John A. Halbrook, Dennis J. Martin, Larry B. Porcellato, Abbie J. Smith, and Brian E. Stern.

The second proposal voted upon was the ratification of the Audit Committee's selection of PricewaterhouseCoopers LLP as the Corporation's independent registered public accountant for the fiscal year ended December 30, 2006.  The proposal was approved with 46,645,955 votes, or 89.80% voting for; 69,247 votes, or 0.13% voting against; and 304,668 votes, or 0.59% abstaining.

Item 6.     Exhibits

See Exhibit Index.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated:  August 3, 2006	HNI Corporation By:    /s/ Jerald K. Dittmer                                     Jerald K. Dittmer      Vice President and Chief Financial         Officer

EXHIBIT INDEX
(10.1)	Directors Deferred Compensation Plan of the Registrant dated August 9, 1999
(31.1)	Certification of the CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(31.2)	Certification of the CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(32.1)	Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

;                                        EXHIBIT (31.1) CERTIFICATION OF CHIEF EXECUTIVE OFFICER Sarbanes-Oxley Act Section 302
I, Stan A. Askren, Chairman, President and Chief Executive Officer of HNI Corporation, certify that: 1.  I have reviewed this quarterly report on Form 10-Q of HNI Corporation; 2.  Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3.  Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; and 4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d) - 15(f)) for the registrant and we have:     a.  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly, during the period in which this quarterly report is being prepared;     b.  designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting  and the preparation of financial statements for external  purposes in accordance with generally accepted accounting principles;          c.  evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and      d.  disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:     a.  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and     b.  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
Date:   August 3, 2006	/s/ Stan A. Askren
	Name:  Stan A. Askren Title:  Chairman, President and              Chief Executive Officer

;                                      EXHIBIT (31.2)
CERTIFICATION OF CHIEF FINANCIAL OFFICER Sarbanes-Oxley Act Section 302
I, Jerald K. Dittmer, Vice President and Chief Financial Officer of HNI Corporation, certify that: 1.  I have reviewed this quarterly report on Form 10-Q of HNI Corporation; 2.  Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3.  Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; and 4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d- 15(f)) for the registrant and we have:     a.  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly, during the period in which this quarterly report is being prepared;    b.  designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting  and the preparation of financial statements for external  purposes in accordance with generally accepted accounting principles;         c.  evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and      d.  disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:     a.  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and     b.  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
Date:  August 3, 2006	/s/ Jerald K. Dittmer
	Name:  Jerald K. Dittmer Title:   Vice President and Chief Financial Officer

EXHIBIT (32.1) Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of HNI Corporation (the "Corporation") for the quarterly period ended July 1, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Stan A. Askren, as Chairman, President and Chief Executive Officer of the Corporation, and Jerald K. Dittmer, as Vice President and Chief Financial Officer of the Corporation, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge: 1.  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2.  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation as of the dates and for the periods expressed in the Report.
	/s/ Stan A. Askren
	Name: Stan A. Askren Title:  Chairman, President and              Chief Executive Officer Date:  August 3, 2006
	/s/ Jerald K. Dittmer
	Name:  Jerald K. Dittmer Title:   Vice President and               Chief Financial Officer Date:  August 3, 2006
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Corporation for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-10

EXHIBIT 10.1

HNI CORPORATION
DIRECTORS DEFERRED COMPENSATION PLAN

            HNI Corporation hereby establishes, effective as of August 9, 1999, the Directors Deferred Compensation Plan.  Such Plan provides Directors with the opportunity to defer Fees paid to them in cash, in accordance with the provisions of the Plan.

ARTICLE I
DEFINITIONS

            For the purposes hereof, the following words and phrases shall have the meanings indicated.

            1.  "Account" shall mean a bookkeeping account in which Fees, which are deferred by a Participant shall be recorded and to which dividends, distributions, and interest may be credited in accordance with the Plan.

            2.  "Beneficiary" or "Beneficiaries" shall mean the person or persons designated by a Participant in accordance with the Plan to receive payment of the remaining balance of the Participant's Account in the event of the death of the Participant prior to receipt of the entire amount credited to the Participant's Account.

            3.  "Board" shall mean the Board of Directors of the Corporation.

            4.  "Code" shall mean the Internal Revenue Code of 1986, as amended.

            5.  "Change in Control" shall mean:

                 (i)  the acquisition by any individual, entity or group (with the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d‑3 promulgated under the Exchange Act) of 20% or more of either (a) the then outstanding shares of common stock of the Corporation (the "Outstanding Company Common Stock") or (b) the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of Directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control:  (a) any acquisition directly from the Corporation, (b) any acquisition by the Corporation, (c) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation controlled by the Corporation or (d) any acquisition by any corporation pursuant to a transaction which complies with clauses (a), (b) and (c) of subsection (iii) of this paragraph; or

                (ii)  individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least two‑thirds of the Board; provided, however, that any individual becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least three‑quarters of the Directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

               (iii)  consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (a) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of Directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (b) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (c) at least a majority of the members of the board of directors of the corporation resulting from such Business combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

                (iv)  approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation.

            6.  "Committee" shall mean the Committee established by the Chairman of the Board to administer the Plan.

            7.  "Corporation" shall mean HNI Corporation and its successors, including, without limitation, the surviving corporation resulting from any merger or consolidation of HNI Corporation with any other corporation or corporations.

            8.  "Director" shall mean any member of the Board.

            9.  "Election Agreement" shall mean an agreement in substantially the form attached hereto as Exhibit A, as modified from time to time by the Corporation.

            10.  "Fees" shall mean all fees and compensation earned as a Director, including retainer and committee fees.

            11.  "Insolvent" shall mean that the Corporation has become subject to a pending voluntary or involuntary proceeding under the United States Bankruptcy Code or has become unable to pay its debts as they mature.

            12.  "Participant" shall mean any Director who has at any time elected to defer the receipt of Fees in accordance with the Plan and who has balance to his or her credit in an Account.

            13.  "Plan" shall mean this deferred compensation plan, which shall be known as the Directors Deferred Compensation Plan.

            14.  "Subsidiary" shall mean any corporation, joint venture, partnership, unincorporated association or other entity in which the Corporation has a direct or indirect ownership or other equity interest and directly or indirectly owns or controls more than 50 percent of the total combined voting or other decision-making power.

            15.  "Year" shall mean a calendar year the period beginning on the date of the Corporation's annual meeting of shareholders and ending on the date immediately preceding the date of the Corporation's annual meeting of shareholders for the following year.

ARTICLE II
ELECTION TO DEFER

            1.  Eligibility.  Any Director may elect to defer receipt of all or a specified part of his or her Fees for any Year in accordance with Section 2 of this Article.  A Director's entitlement to defer shall cease with respect to the Year following the Year in which he or she ceases to be a Director.

            2.  Election to Defer.  A Director who desires to defer all or part of his or her Fees pursuant to this Plan must complete and deliver an Election Agreement to the Secretary of the Board before the first day of the Year for which such Fees will be earned; provided, however, that any Director hereafter elected to the Board who was not a Director on the preceding December 31  date of the Corporation's annual meeting of shareholders may make an election to defer payment of Fees for the Year in which he or she is elected to the Board of Directors by delivering the Election Agreement to the Secretary of the Board within thirty (30) days of such election; and provided further that, with respect to Fees that will be earned in the fourth quarter of 1999, a Director may make an election on or prior to October 15, 1999.  A Director who timely delivers an Election Agreement to the Secretary of the Board shall be a Participant.  An Election Agreement that is timely delivered shall be effective for the succeeding Year and, except as otherwise specified by a Director in his or her Election Agreement, shall continue to be effective from Year to Year until revoked or modified by written notice to the Secretary of the Board or until terminated automatically upon either the termination of the Plan or the Corporation's becoming Insolvent.  In order to be effective to revoke or modify an election relating to Fees otherwise payable in any particular Year, a revocation or modification must be delivered prior to the beginning of the first Year of service for which such Fees are payable.

            3.  Amount Deferred; Period of Deferral.  A Participant shall designate on the Election Agreement the percentage or the dollar amount of his or her Fees that is to be deferred.  The applicable percentage(s) or dollar amount(s) of Fees shall be deferred until the earlier to occur of (i) the date the Participant ceases to be a Director by death, retirement or otherwise or (ii) the date specified by the Participant in the Election Agreement, including a date determined by reference to the date the Participant ceases to be a Director by death, retirement or otherwise.

            4.  Accounts.  Each Participant's Account shall consist of two sub-accounts ‑‑ (a) the "Cash Sub-Account" and (b) the "Deferred Share Sub-Account."  A Participant shall designate on the Election Agreement the percentage or the dollar amount of his or her Fees that is to be credited to each sub-account. 

            5.  Cash Sub-Account.  Any Fee (or portion of any Fee) that a Participant elects to defer to his or her Cash Sub-Account shall be treated as if it were set aside in such sub-account on the date the Fee would otherwise have been paid to the Participant.  Such sub-account will be credited with interest computed monthly (based on calendar months) on the lowest balance in such sub-account during each month at such rate and in such manner as determined from time to time by the Committee.  Interest for a calendar month shall be credited to such sub-account as of the first day of the following month.

            6.  Deferred Share Sub-Account.  Any Fee (or portion of any Fee) that a Participant elects to defer to his or her Deferred Share Sub-Account shall be deemed to be invested in that number of whole and fractional common shares of the Corporation ("Common Shares") determined by dividing the amount (expressed in dollars) of the Fee to be deferred by the fair market value per share of such Common Shares on the date such Fee would otherwise be paid.  Such sub-account shall be deemed to be so invested on the date the Fee would otherwise have been paid to the Participant and on such date the sub-account shall be credited with a number of deferred shares equal to the number of Common Shares deemed to be invested.  Such sub-account shall be credited as of the last day of each calendar quarter with that number of additional deferred shares equal to the amount of cash dividends paid by the Corporation during such quarter on that number of Common Shares equivalent to the number of deferred shares in such sub-account during such quarter divided by the fair market value per share of such Common Shares on the last business day of such calendar quarter.  Appropriate adjustments in the Deferred Share Sub-Account shall be made as equitably required to prevent dilution or enlargement of the sub-account from any stock dividend, stock split, reorganization or other such corporate transaction or event.

            7.  Payment of Accounts.  The amount of a Participant's Account shall be paid to the Participant in a lump sum or in a number, no greater than 15, of approximately equal annual installments, as designated by the Participant in the Election Agreement.  The amount of such Account remaining unpaid shall continue, in the case of the Cash Sub-Account, to bear interest, as provided in Section 5 of this Article and, in the case of the Deferred Share Sub-Account, to be credited with dividend equivalents, as provided in Section 6 of this Article.  Amounts payable from the Deferred Share Sub-Account shall be payable in Common Shares of the Corporation, except no fractional share shall be distributed, but rather cash will be distributed in an amount equivalent in value to any fractional share.   The lump sum payment or the first annual installment, as the case may be, shall be made as soon as practicable following the end of the period of deferral as specified in Section 3 of this Article.  The election as to the time for and method of payment of the amount of the Account relating to Fees deferred for a particular Year shall be made on the Election Agreement(s) and may not thereafter be altered.

            8.  Death of a Participant.  In the event of the death of a Participant, the amount of the Participant's Account or Accounts shall be paid to the Beneficiary or Beneficiaries designated in a writing substantially in the form attached hereto as Exhibit B (the "Beneficiary Designation"), in accordance with the Participant's Election Agreement and Section 7 of this Article.  A Participant's Beneficiary Designation may be changed at any time prior to his or her death by the execution and delivery of a new Beneficiary Designation.  The Beneficiary Designation on file with the Corporation that bears the latest date at the time of the Participant's death shall govern.  In the absence of a Beneficiary Designation or the failure of any Beneficiary to survive the Participant, the amount of the Participant's Account or Accounts shall be paid to the Participant's estate in a lump sum 90 days after the appointment of an executor or administrator.  In the event of the death of the Beneficiary or Beneficiaries after the death of a Participant, the remaining amount of the Account or Accounts shall be paid in a lump sum to the estate of the last Beneficiary to receive payments 90 days after the appointment of an executor or administrator.

            9.  Small Payments.  Notwithstanding the foregoing, if installment payments elected by a Participant would result in a payment with a value of less than $500, the entire amount of the Participant's Account or Accounts may at the discretion of the Committee be paid in a lump sum in accordance with Section 7 of this Article.

            10.  Acceleration.  Notwithstanding the provisions of the foregoing:  (i) if a Change in Control occurs, the amount of each Participant's Account or Accounts shall immediately be paid to the Participant in full; (ii) in the event of an unforeseeable emergency, as defined in section 1.457‑2(h)(4) and (5) of the Income Tax Regulations, that is caused by an event beyond the control of the Participant or Beneficiary and that would result in severe financial hardship to the individual if acceleration were not permitted, the Committee may in its sole discretion accelerate the payment to the Participant or Beneficiary of the amount of his or her Account or Accounts, but only up to the amount necessary to meet the emergency.

ARTICLE III
ADMINISTRATION

            The Corporation, through the Committee, shall be responsible for the general administration of the Plan and for carrying out the provisions hereof.  The Committee shall have all such powers as may be necessary to carry out the provisions of the Plan, including the power, in its discretion, to (i) determine all questions relating to eligibility for participation in the Plan and the amount in the Account or Accounts of any Participant and all questions pertaining to claims for benefits and procedures for claim review, (ii) resolve all other questions arising under the Plan, including any questions of construction and questions of fact, and (iii) take such further action as the Corporation shall deem advisable in the administration of the Plan.  The actions taken and the decisions made by the Committee hereunder shall be final and binding upon all interested parties. 

            The Secretary of the Board shall notify in writing any Participant or beneficiary whose claim for benefits under the Plan has been denied, either wholly or in part, setting forth the specific reasons for the denial in a manner calculated to be understood by the Participant or beneficiary.  The notice shall be furnished to the Participant or beneficiary within 60 days of the denial and shall provide that, within 60 days after receiving the notice, the Participant or beneficiary may apply to the Committee for a full and fair review of the decision denying the claim.  The Committee shall notify the Participant in writing of its decision with respect to the claim within 90 days thereafter.

ARTICLE IV
AMENDMENT AND TERMINATION

            The Corporation reserves the right to amend or terminate the Plan at any time by action of the Board; provided, however, that no such action shall adversely affect any Participant or Beneficiary who has an Account, or result in the acceleration of payment of the amount of any Account (except as otherwise permitted under the Plan), without the consent of the Participant or Beneficiary.

ARTICLE V
MISCELLANEOUS

          1.  Non‑alienation of Deferred Compensation.  Except as permitted by this Plan, no right or interest under this Plan of any Participant or Beneficiary shall, without the written consent of the Corporation, be (i) assignable or transferable in any manner, (ii) subject to alienation, anticipation, sale, pledge, encumbrance, attachment, garnishment or other legal process or (iii) in any manner liable for or subject to the debts or liabilities of the Participant or Beneficiary.

          2.  Interest of Directors.  The obligation of the Corporation under the Plan to make payment of amounts reflected in an Account merely constitutes the unsecured promise of the Corporation to make payments from its general assets, as provided herein, and no Participant or Beneficiary shall have any interest in, or a lien or prior claim upon, any property of the Corporation.  Further, no Participant or Beneficiary shall have any claim whatsoever against any Subsidiary for amounts reflected in an Account.  Nothing in this Plan shall be construed as guaranteeing a right to future membership on the Board.  It is the intention of the Corporation that the Plan be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended.  The Corporation may create a trust to hold funds, or securities to be used in payment of its obligations under the Plan, and may fund such trust; provided, however, that any funds contained therein shall remain liable for the claims of the Corporation's general creditors.

          3.  Claims of Other Persons.  The provisions of the Plan shall in no event be construed as giving any other person, firm or corporation any legal or equitable right as against the Corporation or any Subsidiary or the officers, employees or directors of the Corporation or any Subsidiary, except any such rights as are specifically provided for in the Plan or are hereafter created in accordance with the terms and provisions of the Plan.

          4.  Statements.  Each Participant shall be provided a quarterly statement showing the balance to his or her credit in an Account.

          5.  Severability.  The invalidity and unenforceability of any particular provision of the Plan shall not affect any other provision hereof, and the Plan shall be construed in all respects as if such invalid or unenforceable provision were omitted herefrom.

          6.  Governing Law.  Except to the extent preempted by federal law, the provisions of the Plan shall be governed and construed in accordance with the laws of the State of Iowa.

Exhibit A

HNI CORPORATION
DIRECTORS DEFERRED COMPENSATION PLAN
DEFERRED PLAN ELECTION AGREEMENT
 

I,                                                                              , hereby elect to participate in the Directors Deferred Compensation Plan (the "Plan") with respect to my annual Board retainer and Committee retainer (collectively, "Fees"), and grants or awards of stock, that I may receive beginning ___________________.

                1.  Cash Compensation.  I hereby elect to defer payment of the Fees, which I otherwise would be entitled to receive in cash as follows: 

Cash Fees to be Deferred
Cash Sub-Account	Share Sub-Account
$_______ or _____ % of his or her Fees	$_______ or _____  % of his or her Fees

                 2.  Common Stock Compensation.  I hereby elect to defer payment of the Fees, which I otherwise would be entitled to receive as common stock of the Company, other than compensation I elected to receive as Voluntary Shares under the Equity Plan, to my Share Sub-Account as follows:

                                   (Choose One)

                                   ________%, or

                                   ________ shares per grant

3.  Payment Deferral.  Please defer payment of the Fees specified in this election until the earlier of the following dates:

                                Until the date I cease to be a Director                                                                                               __
                                Until                                                        (specify date)                                                                        __

                4.  Type of Payment.  Please make payment of the Fees deferred by this election, together with all amounts reflected on my Account attributable there to, in accordance with Section 7 of Article II of the Plan as follows:

                                Pay in a lump sum                                                                                                                               __
                                Pay in                      equal annual installments (may not be more than 15)                                      __

                I acknowledge that I have reviewed the Plan and understand that my participation will be subject to the terms and conditions contained in the Plan.  Words and phrases used in this Election Agreement shall have the meaning assigned by the Plan.

                I acknowledge that I have been advised to consult with my own tax and estate planning advisors before making this election to defer in order to determine the tax effect of my participation in the Plan.

                Dated this                               day of                                     , _____.

                                                                                                                                                                          & nbsp;                                    
                                                                                                                                                (Signature)

                                                                                                                                                                                                                
                                                                                                                                            (Print or type name)

NOTE:  Keep one copy for your personal records.  Return the original to the attention of:  Corporate Secretary, HNI Corporation, 408 East Second Street, P.O. Box 1109, Muscatine, IA 52761-0071.

EXHIBIT B

HNI CORPORATION
DIRECTORS DEFERRED COMPENSATION PLAN
DEFERRED PLAN BENEFICIARY DESIGNATIONS

            In accordance with the terms and conditions of the Directors Deferred Compensation Plan (the "Plan"), I hereby designate the person(s) indicated below as my beneficiary(ies) to receive the amounts payable under said Plan:

Name(s)                                                                                                                                  

Address(es)                                                                                                                             

                                                                                                                                               

Social Security No(s) of Beneficiary(ies)                                                                                  

Relationship(s)                                                                                                                         

Date(s) of Birth                                                                                                                        

            In the event that the above-named beneficiary(ies) predecease(s) me, I hereby designate the following person(s) as beneficiary(ies):

Name(s)                                                                                                                                  

Address(es)                                                                                                                             

                                                                                                                                               

Social Security No(s) of Beneficiary(ies)                                                                                  

Relationship(s)                                                                                                                         

Date(s) of Birth                                                                                                                        

            I hereby expressly revoke all prior designations of beneficiary(ies), reserve the right to change the beneficiary(ies) herein designated and agree that the rights of said beneficiary(ies) shall be subject to the terms of the Plan.  In the event that there is no beneficiary living at the time of my death, I understand that the amounts payable under the Plan will be paid to my estate.


Dated                                                                                                                                                  
                                                                                                             (Signature)

                                                                                                                                                           
                                                                                                         (Print or type name)