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UNITED STATES

FORM 10-Q

STEELCASE INC.

(616) 247-2710

      Indicate by check mark whether the registrant (1) has filed all reports required 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 o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes x          No o

      As of December 29, 2003, Steelcase Inc. had 47,035,411 shares of Class A Common Stock and 100,855,202 shares of Class B Common Stock outstanding.

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STEELCASE INC.

FOR THE QUARTER ENDED NOVEMBER 28, 2003

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STEELCASE INC.

See accompanying notes to the condensed consolidated financial statements.

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STEELCASE INC.

See accompanying notes to the condensed consolidated financial statements.

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STEELCASE INC.

See accompanying notes to the condensed consolidated financial statements.

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STEELCASE INC.

(Unaudited)

1.     BASIS OF PRESENTATION

      The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Results for interim periods should not be considered indicative of results to be expected for a full year. Reference should be made to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2003 (“Form 10-K”). As used in this Report, unless otherwise expressly stated or the content otherwise requires, all references to “Steelcase,” “we,” “our,” “Company” and similar references are to Steelcase Inc. and its majority owned subsidiaries.

      Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year presentation.

      Unless the context otherwise indicates, reference to a year relates to the fiscal year, ended in February of the year indicated, rather than the calendar year. Additionally, Q3 2004 references the third quarter of fiscal 2004. All amounts are in millions, except per share data, data presented as a percentage or unless otherwise indicated.

2.     NEW ACCOUNTING STANDARDS

      Financial Accounting Standards Board (“FASB”) Interpretation Number (“FIN”) 46(R) requires that if a business enterprise has a controlling financial interest in a variable interest entity (“VIE”), and is considered the primary beneficiary, the assets, liabilities and results of the activities of the VIE shall be included in the consolidated financial statements of the business enterprise. FIN 46(R) is effective for us beginning Q4 2004 as it relates to special purpose entities and beginning in Q1 2005 for other types of VIEs that are not defined as special purpose entities.

      In May 2000, we began leasing aircraft through a synthetic lease structure that meets the FIN 46(R) definition of a special purpose entity. This lease is currently accounted for as an operating lease. Beginning in Q4 2004, the aircraft will be capitalized on our balance sheet and the related obligation will be recorded as debt as required by the provisions of FIN 46(R). This change will increase fixed assets by approximately $43.0 and debt by approximately $49.5. We expect to record approximately a $6.5 pre-tax, or $4.1 after-tax, charge as a cumulative effect of accounting change in our statement of operations. There is no cash effect from this change in accounting and we do not expect any significant impact on our reported results on an on-going basis. Three of our four debt covenants will not be impacted by any additional debt recorded on the balance sheet related to this lease structure. Reported interest expense will increase and this will affect our fourth covenant, the interest coverage covenant, but we expect to remain in compliance. See additional information related to our covenants in Note 9 and in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

      From time to time, we provide transition financing to dealers. For dealerships that we obtain an equity interest as part of our financing, we use the equity method of accounting for majority-owned dealers with a transition plan in place and where the nature of the relationship is one in which we do

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

not exercise participative control. At the end of each year, we determine whether the nature of the relationship has changed in a way that would require consolidation of any particular dealer. Investments in these unconsolidated dealers are included in Equity Investment in Dealer Transitions in the accompanying Condensed Consolidated Balance Sheets (see Note 7 in our Form 10-K for the year ended February 28, 2003 for additional information). There are also other dealers in ownership transition to which we have provided transition financing and where we do not hold an equity interest. We are currently evaluating whether any of the dealers to which we provide transition financing will require consolidation in Q1 2005 pursuant to FIN 46(R).

      In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was signed into law. In response to this new law, the FASB released FASB Staff Position (“FSP”) No. 106-1, which would permit deferral of any accounting for the effects of the Act pending further consideration of the underlying accounting issues, unless a sponsor amends its plan. We are a sponsor of a postretirement health care plan (the “plan”) that provides prescription drug benefits. In accordance with this FSP, any measures of the accumulated postretirement benefit obligation or net periodic postretirement benefit cost in the financial statements or accompanying notes do not reflect the effects of the Act on the plan. We are currently evaluating any effects the Act may have on the plan and our financial statements.

      Statement of Financial Accounting Standards (“SFAS”) No. 132(R) requires additional disclosures about pensions and other postretirement benefits. These disclosures include: information describing the types of plan assets, investment strategy, measurement date(s), plan obligations, cash flows and components of net periodic benefit cost recognized during interim periods. This statement is effective for domestic plans beginning with our 2004 Form 10-K and foreign plans beginning with our 2005 Form 10-K. It is effective for interim reporting for both our domestic and foreign plans beginning in Q1 2005.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

3.     EARNINGS (LOSS) PER SHARE