FULLER H B CO 10-Q

Item 1. Financial Statements   H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited)       Three Months Ended     Six Months Ended       May 28,     May 29,     May 28,     May 29,       2022     2021     2022     2021   Net revenue   $ 993,258     $ 827,873     $ 1,849,739     $ 1,553,777   Cost of sales     ( 739,737 )     ( 610,323 )     ( 1,383,326 )     ( 1,143,863 ) Gross profit     253,521       217,550       466,413       409,914   Selling, general and administrative expenses     ( 166,007 )     ( 148,409 )     ( 321,898 )     ( 292,423 ) Other income, net     -       11,879       6,142       19,748   Interest expense     ( 19,828 )     ( 19,942 )     ( 38,025 )     ( 40,303 ) Interest income     2,091       2,530       4,030       5,189   Income before income taxes and income from equity method investments     69,777       63,608       116,662       102,125   Income taxes     ( 23,616 )     ( 16,660 )     ( 33,765 )     ( 27,267 ) Income from equity method investments     1,066       2,176       2,649       4,072   Net income including non-controlling interest     47,227       49,124       85,546       78,930   Net income attributable to non-controlling interest     ( 24 )     ( 22 )     ( 37 )     ( 37 ) Net income attributable to H.B. Fuller   $ 47,203     $ 49,102     $ 85,509     $ 78,893                                     Earnings per share attributable to H.B. Fuller common stockholders:                                 Basic   $ 0.88     $ 0.93     $ 1.60     $ 1.50   Diluted   $ 0.86     $ 0.90     $ 1.55     $ 1.47                                     Weighted-average common shares outstanding:                                 Basic     53,497       52,839       53,425       52,666   Diluted     55,078       54,294       55,237       53,817                                     Dividends declared per common share   $ 0.190     $ 0.168     $ 0.358     $ 0.330     See accompanying Notes to Unaudited Consolidated Financial Statements.   4 Table of Contents     H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (In thousands) (Unaudited)       Three Months Ended     Six Months Ended       May 28,     May 29,     May 28,     May 29,       2022     2021     2022     2021   Net income including non-controlling interest   $ 47,227     $ 49,124     $ 85,546     $ 78,930   Other comprehensive (loss) income                                 Foreign currency translation     ( 84,110 )     55,524       ( 77,579 )     78,661   Defined benefit pension plans adjustment, net of tax     2,803       1,371       3,292       2,746   Interest rate swaps, net of tax     3,347       3,564       9,578       7,744   Cross-currency swaps, net of tax     ( 1,210 )     ( 1,241 )     ( 3,293 )     ( 2,287 ) Other comprehensive (loss) income     ( 79,170 )     59,218       ( 68,002 )     86,864   Comprehensive (loss) income     ( 31,943 )     108,342       17,544       165,794   Less: Comprehensive income attributable to non-controlling interest     12       34       16       39   Comprehensive (loss) income attributable to H.B. Fuller   $ ( 31,955 )   $ 108,308     $ 17,528     $ 165,755     See accompanying Notes to Unaudited Consolidated Financial Statements.   5 Table of Contents   H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited)       May 28,     November 27,       2022     2021   Assets                 Current assets:                 Cash and cash equivalents   $ 68,149     $ 61,786   Trade receivables (net of allowances of $ 12,701 and $ 9,935 , as of May 28, 2022 and November 27, 2021, respectively)     644,544       614,645   Inventories     543,126       448,404   Other current assets     153,187       96,335   Total current assets     1,409,006       1,221,170                     Property, plant and equipment     1,527,711       1,500,989   Accumulated depreciation     ( 825,256 )     ( 805,622 ) Property, plant and equipment, net     702,455       695,367                     Goodwill     1,406,369       1,298,845   Other intangibles, net     737,551       687,075   Other assets     365,098       372,073   Total assets   $ 4,620,479     $ 4,274,530                     Liabilities, non-controlling interest and total equity                 Current liabilities:                 Notes payable   $ 31,867     $ 24,983   Trade payables     507,103       500,321   Accrued compensation     67,991       109,542   Income taxes payable     28,180       15,943   Other accrued expenses     86,842       86,061   Total current liabilities     721,983       736,850                     Long-term debt     1,903,977       1,591,479   Accrued pension liabilities     69,820       71,651   Other liabilities     309,945       277,190   Total liabilities     3,005,725       2,677,170                     Commitments and contingencies (Note 12)                                       Equity:                 H.B. Fuller stockholders' equity:                 Preferred stock ( no shares outstanding) shares authorized – 10,045,900     -       -   Common stock, par value $ 1.00 per share, shares authorized – 160,000,000 , shares outstanding – 53,153,056 and 52,777,753 as of May 28, 2022 and November 27, 2021, respectively     53,153       52,778   Additional paid-in capital     232,253       213,637   Retained earnings     1,666,969       1,600,601   Accumulated other comprehensive loss     ( 338,228 )     ( 270,247 ) Total H.B. Fuller stockholders' equity     1,614,147       1,596,769   Non-controlling interest     607       591   Total equity     1,614,754       1,597,360   Total liabilities, non-controlling interest and total equity   $ 4,620,479     $ 4,274,530      See accompanying Notes to Unaudited Consolidated Financial Statements.   6 Table of Contents   H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Total Equity (In thousands) (Unaudited)       H.B. Fuller Company Shareholders                                               Accumulated                               Additional             Other                       Common     Paid-in     Retained     Comprehensive     Non-Controlling               Stock     Capital     Earnings     Income (Loss)     Interest     Total                                                     Balance at November 27, 2021   $ 52,778     $ 213,637     $ 1,600,601     $ ( 270,247 )   $ 591     $ 1,597,360   Comprehensive income     -       -       38,306       11,177       4       49,487   Dividends     -       -       ( 8,964 )     -       -       ( 8,964 ) Stock option exercises     126       5,628       -       -       -       5,754   Share-based compensation plans and other, net     187       5,601       -       -       -       5,788   Repurchases of common stock     ( 49 )     ( 3,528 )     -       -       -       ( 3,577 ) Balance at February 26, 2022   $ 53,042     $ 221,338     $ 1,629,943     $ ( 259,070 )   $ 595     $ 1,645,848   Comprehensive income (loss)     -       -       47,203       ( 79,158 )     12       ( 31,943 ) Dividends     -       -       ( 10,177 )     -       -       ( 10,177 ) Stock option exercises     47       2,036       -       -       -       2,083   Share-based compensation plans other, net     65       8,910       -       -       -       8,975   Repurchases of common stock     ( 1 )     ( 31 )     -       -       -       ( 32 ) Balance at May 28, 2022   $ 53,153     $ 232,253     $ 1,666,969     $ ( 338,228 )   $ 607       1,614,754         H.B. Fuller Company Shareholders                                               Accumulated                               Additional             Other                       Common     Paid-in     Retained     Comprehensive     Non-Controlling               Stock     Capital     Earnings     Income (Loss)     Interest     Total                                                     Balance at November 28, 2020   $ 51,907     $ 157,867     $ 1,474,406     $ ( 302,859 )   $ 541     $ 1,381,862   Comprehensive income     -       -       29,791       27,656       5       57,452   Dividends     -       -       ( 8,542 )     -       -       ( 8,542 ) Stock option exercises     147       6,251       -       -       -       6,398   Share-based compensation plans and other, net     150       7,423       -       -       -       7,573   Repurchases of common stock     ( 49 )     ( 2,531 )     -       -       -       ( 2,580 ) Balance at February 27, 2021   $ 52,155     $ 169,010     $ 1,495,655     $ ( 275,203 )   $ 546     $ 1,442,163   Comprehensive income     -       -       49,102       59,206       34       108,342   Dividends     -       -       ( 8,870 )     -       -       ( 8,870 ) Stock option exercises     318       13,887       -       -       -       14,205   Share-based compensation plans other, net     27       7,393       -       -       -       7,420   Repurchases of common stock     ( 1 )     ( 47 )     -       -       -       ( 48 ) Balance at May 29, 2021   $ 52,499     $ 190,243     $ 1,535,887     $ ( 215,997 )   $ 580     $ 1,563,212     See accompanying Notes to Unaudited Consolidated Financial Statements.    7 Table of Contents     H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) (Unaudited)       Six Months Ended       May 28, 2022     May 29, 2021   Cash flows from operating activities:                 Net income including non-controlling interest   $ 85,546     $ 78,930   Adjustments to reconcile net income including non-controlling interest to net cash (used in) provided by operating activities:                 Depreciation     36,333       35,976   Amortization     36,412       35,649   Deferred income taxes     ( 4,961 )     ( 1,167 ) Income from equity method investments, net of dividends received     ( 2,649 )     ( 4,072 )        Loss on sale or disposal of assets     ( 1,087 )     -   Share-based compensation     13,625       12,486   Pension and other post-retirement benefit plan activity     ( 9,720 )     ( 15,927 ) Change in assets and liabilities, net of effects of acquisitions:                 Trade receivables, net     ( 35,491 )     ( 43,191 ) Inventories     ( 95,413 )     ( 100,358 ) Other assets     ( 21,908 )     ( 21,709 ) Trade payables     27,237       115,488   Accrued compensation     ( 40,448 )     ( 8,760 ) Other accrued expenses     4,402       1,925   Income taxes payable     ( 5,864 )     ( 1,513 ) Other liabilities     ( 23,597 )     ( 28,980 ) Other     28,452       25,055   Net cash (used in) provided by operating activities     ( 9,131 )     79,832                     Cash flows from investing activities:                 Purchased property, plant and equipment     ( 69,055 )     ( 50,726 ) Purchased businesses, net of cash acquired     ( 229,314 )     ( 5,445 ) Proceeds from sale of property, plant and equipment     1,269       1,237          Cash received from government grant     3,928       -   Cash payments related to government grant     -       ( 1,526 ) Net cash used in investing activities     ( 293,172 )     ( 56,460 )                   Cash flows from financing activities:                 Proceeds from debt     335,000       -   Repayment of long-term debt     -       ( 68,000 )        Payment of debt issuance costs     ( 600 )     -   Net proceeds of notes payable     3,565       9,335   Dividends paid     ( 18,965 )     ( 17,244 )        Contingent consideration payment     ( 5,000 )     -   Proceeds from stock options exercised     7,837       20,621   Repurchases of common stock     ( 3,609 )     ( 2,628 ) Net cash provided by (used in) financing activities     318,228       ( 57,916 )                   Effect of exchange rate changes on cash and cash equivalents     ( 9,562 )     3,607   Net change in cash and cash equivalents     6,363       ( 30,937 ) Cash and cash equivalents at beginning of period     61,786       100,534   Cash and cash equivalents at end of period   $ 68,149     $ 69,597     See accompanying Notes to Unaudited Consolidated Financial Statements.   8 Table of Contents   H.B. FULLER COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands, except per share amounts) (Unaudited)     Note 1: Basis of Presentation   Overview   The accompanying unaudited interim Consolidated Financial Statements of H.B. Fuller Company and Subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10 -Q and Article 10 of Regulation S- X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive income, financial position and cash flows in conformity with U.S. generally accepted accounting principles. In our opinion, the unaudited interim Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary for the fair presentation of the results for the periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.   The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from these estimates. These unaudited interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10 -K for the year ended  November 27, 2021 as filed with the Securities and Exchange Commission.   New Accounting Pronouncements   In November 2021, the FASB issued ASU No. 2021 - 10, Government Assistance (Topic 832 ): Disclosures by Business Entities about Government Assistance . This ASU requires business entities to make annual disclosures about transactions with a government they account for by analogizing to a grant or contribution accounting model under ASC 958 - 605. Our effective date for adoption of this ASU is our fiscal year beginning December 4, 2022 with early adoption permitted. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and determined it will not have a material impact.   9 Table of Contents     Note 2: Acquisitions   Apollo   On January 26, 2022, we acquired Apollo Chemicals Limited, Apollo Roofing Solutions Limited and Apollo Construction Solutions Limited (collectively, "Apollo") for a base purchase price of GBP 151,214 , or approximately $ 203,573 , which was funded through borrowings on our credit facility. The agreement requires us to pay an additional GBP 1,500 , or approximately $ 2,019 , following the completion of certain environmental studies. Apollo, headquartered in Tamworth, UK, is a manufacturer of liquid adhesives, coatings and primers for the roofing, industrial and construction markets. Apollo is expected to enhance our position in key high-value, high-margin markets in the UK and throughout Europe. The acquisition fair value measurement was preliminary as of May 28, 2022. The acquisition will be included in our Construction Adhesives operating segment.    The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:       February 26, 2022     Adjustments     May 28, 2022   Cash   $ 12,165       -     $ 12,165   Current assets     18,873       -       18,873   Property, plant and equipment     7,877       -       7,877   Goodwill     104,885       13,359       118,244   Other intangibles                         Customer relationships     82,256       ( 14,809 )     67,447   Trademarks/trade names     2,154       135       2,289   Technology     9,558       ( 3,096 )     6,462   Current liabilities     ( 8,293 )     ( 41 )     ( 8,334 ) Other liabilities     ( 23,883 )     4,452       ( 19,431 ) Total   $ 205,592     $ -     $ 205,592     The expected useful lives of the acquired intangible assets are 12 years for customer relationships and technology and 10 years for trademarks/trade names.   Based on the fair value measurement of the assets acquired and liabilities assumed, we allocated $ 118,244 to goodwill for the expected synergies from combining Apollo with our existing business. Such goodwill is not deductible for tax purposes. The goodwill was assigned to our Construction Adhesives operating segment. The Apollo acquisition does not represent a material business combination, and therefore pro forma financial information is not provided.   Fourny NV   On January 11, 2022, we acquired Fourny NV ("Fourny") for a base purchase price of EUR 12,867 , or approximately $ 14,627 , which was funded through existing cash. The agreement requires us to pay an additional EUR 3,100 , or approximately $ 3,524 , 18 months following the date of acquisition. Fourny, headquartered in Willebroek, Belgium, is a manufacturer of construction and automotive adhesives . Fourny is expected to enhance our position in key high-value, high-margin markets in Europe. The acquisition fair value measurement was preliminary as of May 28, 2022 and includes intangible assets of $ 10,117 , goodwill of $ 6,593 , cash of $ 75 and other net assets of $ 1,366 . Goodwill is not ded uctible for tax purposes. Fourny is recorded in our Construction Adhesives operating segment. The Fourny acquisition does not represent a material business combination, and therefore pro forma financial information is not provided.   Tissue Seal, LLC   On  November 30, 2021, we acquired certain assets of Tissue Seal, LLC ("TissueSeal") for a base purchase price of $ 22,167 , which was funded through existing cash. The agreement requires us to pay an additional $ 2,475  on the first anniversary of the acquisition and contingent consideration of up to $ 500 on November 30, 2024 based on certain agreement provisions. TissueSeal, headquartered in Ann Arbor, Michigan, is a distributor of topical tissue adhesives and sutures. With this acquisition, we add TissueSeal's regulatory clearances, customer and distribution relationships, regulatory approvals and trademarks into our portfolio of products. T he acquisition fair value measurement was preliminary as of May 28, 2022 and includes intangible assets of $ 11,160 , goodwill of $ 13,765  and other net assets of $ 217 . Goodwill is de ductible for tax purposes. See Note 11 for further discussion of the fair value of the contingent consideration liability. TissueSeal is recorded in our Hygiene, Health and Consumable Adhesives operating segment. The TissueSeal acquisition does not represent a material business combination, and therefore pro forma financial information is not provided.   STR Holdings, Inc.   On January 13, 2021, we acquired certain assets of STR Holding, Inc. ("STR") for a base purchase price of $ 5,445  which was funded through existing cash. The agreement required us to pay an additional $ 800 on the first anniversary of the acquisition and contingent consideration of up to $ 1,700 based on certain agreement provisions. STR, headquartered in Enfield, Connecticut, is a manufacturer of encapsulant products used in the solar industry. The acquisition fair value measurement, which includes intangible assets of $ 6,700  and other net assets of $ 1,245 , was final as of November 27, 2021. The agreement provisions for the contingent consideration were met, and as a result, $ 1,700 was paid as of November 27, 2021. No goodwill was recorded for this acquisition. STR is reported in our Engineering Adhesives operating segment. The STR acquisition does not represent a material business combination, and therefore pro forma financial information is not provided.    D.H.M. Adhesives, Inc .    On February 3, 2020, we acquired certain assets of D.H.M. Adhesives, Inc. (“D.H.M.”) for approximately $ 9,500 which was funded through existing cash. In addition, the agreement required us to pay contingent consideration of up to approximately $ 8,100 based upon a formula related to revenue during the fiscal years ended November 27, 2021 and December 3, 2022. D.H.M., headquartered in Calhoun, Georgia, is a provider of hotmelt adhesives. The acquisition fair value measurement was final as of May 30, 2020 and includes goodwill of $ 1,063 and customer relationship intangible of $ 11,900 . The fair value of the contingent consideration as of the date of acquisition was $ 5,000 resulting in a final purchase price of $ 14,500 . As of November 27, 2021, the agreement provisions for the contingent consideration were met, and as a result, $ 8,100 was paid during the period ended February 26, 2022. Goodwill is deductible for tax purposes. D.H.M. and the related goodwill are reported in our Hygiene, Health and Consumable Adhesives operating segment. The D.H.M acquisition does not represent a material business combination, and therefore pro forma financial information is not provided.     Note 3: Restructuring Actions   The Company has approved restructuring plans consisting of consolidation plans, organizational changes and other actions related to the reorganization of our business into three segments, the integration of the operations of Royal Adhesives with the operations of the Company and other actions to optimize operations. The following table summarizes the pre-tax charges under these restructuring plans by income statement classification:       Three Months Ended     Six Months Ended       May 28, 2022     May 29, 2021     May 28, 2022     May 29, 2021   Cost of sales   $ -     $ 23     $ ( 152 )   $ 293   Selling, general and administrative     14       ( 201 )     ( 75 )     1,346       $ 14     $ ( 178 )   $ ( 227 )   $ 1,639     The restructuring charges are all recorded in Corporate Unallocated for segment reporting.   A summary of the restructuring liability is presented below:       Employee-Related     Other     Total   Balance at November 28, 2020   $ 5,834     $ 248     $ 6,082   Expenses incurred     ( 807 )     1,594       787   Non-cash charges     -       ( 135 )     ( 135 ) Cash payments     ( 3,917 )     ( 1,707 )     ( 5,624 ) Foreign currency translation     ( 15 )     -       ( 15 ) Balance at November 27, 2021     1,095       -       1,095   Expenses incurred     ( 227 )     -       ( 227 ) Cash payments     ( 530 )     -       ( 530 ) Foreign currency translation     ( 40 )     -       ( 40 ) Balance at May 28, 2022   $ 298     $ -     $ 298     10 Table of Contents   Non-cash charges include accelerated depreciation resulting from the cessation of use of certain long-lived assets. Restructuring liabilities have been classified as a component of other accrued expenses in the Consolidated Balance Sheets.     Note 4: Inventories   The composition of inventories is as follows:       May 28,     November 27,       2022     2021   Raw materials   $ 274,704     $ 226,723   Finished goods     268,422       221,681   Total inventories   $ 543,126     $ 448,404       Note 5: Goodwill and Other Intangible Assets   The goodwill activity by reportable segment for the  six months ended May 28, 2022 is presented below:       Hygiene, Health                               and Consumable     Engineering     Construction               Adhesives     Adhesives     Adhesives     Total   Balance at November 27, 2021   $ 325,470     $ 662,021     $ 311,354     $ 1,298,845   TissueSeal acquisition     13,765       -       -       13,765   Fourny acquisition     -       -       6,222       6,222   Apollo acquisition     -       -       110,815       110,815   Foreign currency translation effect     ( 6,250 )     ( 17,067 )     39       ( 23,278 ) Balance at May 28, 2022   $ 332,985     $ 644,954     $ 428,430     $ 1,406,369     Balances of amortizable identifiable intangible assets, excluding goodwill and other non-amortizable intangible assets, are as follows:       May 28, 2022       Purchased                                       Technology     Customer                           Amortizable Intangible Assets   and Patents     Relationships     Trade Names     Other     Total   Original cost   $ 120,094     $ 1,008,089     $ 49,929     $ 11,048     $ 1,189,160   Accumulated amortization     ( 64,174 )     ( 362,491 )     ( 19,614 )     ( 5,798 )     ( 452,077 ) Net identifiable intangibles   $ 55,920     $ 645,598     $ 30,315     $ 5,250     $ 737,083         November 27, 2021       Purchased                                       Technology     Customer                           Amortizable Intangible Assets   and Patents     Relationships     Trade Names     Other     Total   Original cost   $ 115,980     $ 932,644     $ 63,543     $ 11,343     $ 1,123,510   Accumulated amortization     ( 62,364 )     ( 335,143 )     ( 33,786 )     ( 5,635 )     ( 436,928 ) Net identifiable intangibles   $ 53,616     $ 597,501     $ 29,757     $ 5,708     $ 686,582     Amortization expense with respect to amortizable intangible assets was $ 18,620  and $ 17,753  for the three months ended May 28, 2022 and May 29, 2021 , respectively, and $ 36,412  and $ 35,649  for the six  months ended May 28, 2022 and May 29, 2021 , respectively.   11 Table of Contents   Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for the next five fiscal years is as follows:       Remainder                                           Fiscal Year   2022     2023     2024     2025     2026     Thereafter   Amortization expense   $ 50,012     $ 69,293     $ 65,104     $ 62,851     $ 56,546     $ 433,277     Non-amortizable intangible assets as of  May 28, 2022 and November 27, 2021 are $ 468  and $ 493 , respectively, and are related to trademarks and trade names. The change in non-amortizable assets as of May 28, 2022 compared to November 27, 2021 was due to changes in foreign currency exchange rates.     Note 6: Components of Net Periodic Benefit related to Pension and Other Postretirement Benefit Plans       Three Months Ended May 28, 2022 and May 29, 2021                                       Other       Pension Benefits     Postretirement       U.S. Plans     Non-U.S. Plans     Benefits   Net periodic cost (benefit):   2022     2021     2022     2021     2022     2021   Service cost   $ -     $ -     $ 700     $ 821     $ -     $ 5   Interest cost     2,368       2,325       736       739       184       206   Expected return on assets     ( 7,117 )     ( 7,781 )     ( 1,644 )     ( 3,104 )     ( 2,719 )     ( 2,236 ) Amortization:                                                 Prior service cost (benefit)     ( 1 )     ( 1 )     16       17       -       -   Actuarial loss     1,013       799       611       1,016       ( 845 )     18   Settlement charge     -       -       3,329       -       -       -   Net periodic benefit   $ ( 3,737 )   $ ( 4,658 )   $ 3,748     $ ( 511 )   $ ( 3,380 )   $ ( 2,007 )       Six Months Ended May 28, 2022 and May 29, 2021                                       Other       Pension Benefits     Postretirement       U.S. Plans     Non-U.S. Plans     Benefits   Net periodic cost (benefit):   2022     2021     2022     2021     2022     2021   Service cost   $ -     $ -     $ 1,420     $ 1,654     $ -     $ 11   Interest cost     4,735       4,650       1,525       1,472       367       411   Expected return on assets     ( 14,235 )     ( 15,561 )     ( 3,391 )     ( 6,181 )     ( 5,437 )     ( 4,472 ) Amortization:                                                 Prior service cost (benefit)     ( 2 )     ( 2 )     32       34       -       -   Actuarial loss     2,027       1,599       1,260       2,038       ( 1,690 )     36   Settlement charge     -       -       3,329       -       -       -   Net periodic benefit   $ ( 7,475 )   $ ( 9,314 )   $ 4,175     $ ( 983 )   $ ( 6,760 )   $ ( 4,014 )   Service cost is included with employee compensation cost in cost of sales and selling, general and administrative expenses in the Consolidated Statements of Income. The components of our net periodic defined benefit pension and postretirement benefit costs other than service cost are presented in other income, net in the Consolidated Statements of Income.   In the second quarter of 2022, we recognized a non-cash settlement charge of $ 3,329 related to the termination of our Canadian defined benefit pension plan. The settlement charge is included in other income, net in the Consolidated Statements of Income.   12 Table of Contents     Note 7: Accumulated Other Comprehensive Income (Loss)   The following table provides details of total comprehensive income (loss):        Three Months Ended May 28, 2022     Three Months Ended May 29, 2021                               Non-                             Non-                               controlling                             controlling       H.B. Fuller Stockholders     Interest     H.B. Fuller Stockholders     Interest       Pre-tax     Tax     Net     Net     Pre-tax     Tax     Net     Net   Net income attributable to H.B. Fuller and non-controlling interest                   $ 47,203     $ 24                     $ 49,102     $ 22   Foreign currency translation adjustment¹   $ ( 84,098 )   $ -       ( 84,098 )     ( 12 )   $ 55,512     $ -       55,512       12   Defined benefit pension plans adjustment²     3,872       ( 1,069 )     2,803       -       1,851       ( 480 )     1,371       -   Interest rate swap³     4,435       ( 1,088 )     3,347       -       4,721       ( 1,157 )     3,564       -   Cross currency swaps³     ( 1,228 )     18       ( 1,210 )     -       ( 1,258 )     17       ( 1,241 )     -   Other comprehensive income (loss)   $ ( 77,019 )   $ ( 2,139 )   $ ( 79,158 )   $ ( 12 )   $ 60,826     $ ( 1,620 )   $ 59,206     $ 12   Comprehensive income (loss)                   $ ( 31,955 )   $ 12                     $ 108,308     $ 34         Six Months Ended May 28, 2022     Six Months Ended May 29, 2021                               Non-                             Non-                               controlling                             controlling       H.B. Fuller Stockholders     Interest     H.B. Fuller Stockholders     Interest       Pretax     Tax     Net     Net     Pretax     Tax     Net     Net   Net income attributable to H.B. Fuller and non-controlling interest                   $ 85,509     $ 37                     $ 78,893     $ 37   Foreign currency translation adjustment¹   $ ( 77,558 )   $ -       ( 77,558 )     ( 21 )   $ 78,659     $ -       78,659       2   Defined benefit pension plans adjustment²     4,705       ( 1,413 )     3,292       -       3,706       ( 960 )     2,746       -   Interest rate swap³     12,690       ( 3,112 )     9,578       -       10,258       ( 2,514 )     7,744       -   Cross currency swaps³     ( 3,343 )     50       ( 3,293 )     -       ( 2,320 )     33       ( 2,287 )     -   Other comprehensive income (loss)   $ ( 63,506 )   $ ( 4,475 )   $ ( 67,981 )     ( 21 )   $ 90,303     $ ( 3,441 )     86,862       2   Comprehensive income                   $ 17,528     $ 16                     $ 165,755     $ 39     ¹ Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries. ² Loss reclassified from accumulated other comprehensive income ("AOCI") into earnings as part of net periodic cost related to pension and other postretirement benefit plans is reported in cost of sales and SG&A expense. ³ Income (loss) reclassified from AOCI into earnings is reported in other income, net.   13 Table of Contents   The components of accumulated other comprehensive loss are as follows:       May 28, 2022                       Non-               H.B. Fuller     controlling       Total     Stockholders     Interest   Foreign currency translation adjustment   $ ( 209,916 )   $ ( 209,825 )   $ ( 91 ) Interest rate swap, net of taxes of $112     ( 346 )     ( 346 )     -   Cash flow hedges, net of taxes of ($3)     190       190       -   Defined benefit pension plans adjustment, net of taxes of $42,292     ( 109,906 )     ( 109,906 )     -   Reclassification of AOCI tax effects     ( 18,341 )     ( 18,341 )     -   Accumulated other comprehensive loss   $ ( 338,319 )   $ ( 338,228 )   $ ( 91 )       November 27, 2021                       Non-               H.B. Fuller     controlling       Total     Stockholders     Interest   Foreign currency translation adjustment   $ ( 132,370 )   $ ( 132,267 )   $ ( 103 ) Interest rate swap, net of taxes of $3,224     ( 9,924 )     ( 9,924 )     -   Cash flow hedges, net of taxes of ($53)     3,483       3,483       -   Defined benefit pension plans adjustment, net of taxes of $63,925     ( 113,198 )     ( 113,198 )     -   Reclassification of AOCI tax effects     ( 18,341 )     ( 18,341 )     -   Accumulated other comprehensive loss   $ ( 270,350 )   $ ( 270,247 )   $ ( 103 )     Note 8: Income Taxes   Income tax expense for the  three and six months ended May 28, 2022  includes $ 4,149  and $ 1,248  of discrete tax expense, respectively, relating to the revaluation of cross-currency swap agreements due to depreciation of the Euro versus the U.S. Dollar, as well as various foreign tax matters offset by the tax effect of legal entity mergers. Excluding the discrete tax expense, the overall effective tax rate was  27.9 percent for both the three and six months ended May 28, 2022 .    Income tax expense for the three and six months ended May 29, 2021 includes $ 600  and $ 558 of discrete tax benefit, respectively. Excluding the discrete tax benefit, the overall effective tax rate was  27.1  percent and 27.2  percent for the three and six months ended May 29, 2021  respectively.   As of  May 28, 2022 , we had a liability of $ 15,414  recorded for gross unrecognized tax benefits (excluding interest) compared to $ 13,281  as of November 27, 2021 . As of May 28, 2022 and November 27, 2021 , we had accrued $ 3,215 and $ 2,448 of gross interest relating to unrecognized tax benefits, respectively.   14 Table of Contents     Note 9: Earnings Per Share   A reconciliation of the common share components for the basic and diluted earnings per share calculations is as follows:       Three Months Ended     Six Months Ended       May 28,     May 29,     May 28,     May 29,   (Shares in thousands)   2022     2021     2022     2021   Weighted-average common shares - basic     53,497       52,839       53,425       52,666   Equivalent shares from share-based compensations plans     1,581       1,455       1,812       1,151   Weighted-average common and common equivalent shares diluted     55,078       54,294       55,237       53,817     Basic earnings per share is calculated by dividing net income attributable to H.B. Fuller by the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is based upon the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to share-based compensation awards. We use the treasury stock method to calculate the effect of outstanding shares, which computes total employee proceeds as the sum of (a) the amount the employee must pay upon exercise of the award and (b) the amount of unearned share-based compensation costs attributed to future services. Share-based compensation awards for which total employee proceeds exceed the average market price over the applicable period have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share.   Share-based compensation awards of  658,511 and 208,888  shares for the three months ended May 28, 2022 and May 29, 2021 , respectively, and  744,479  and 2,107,062  shares for the six  months ended May 28, 2022 and May 29, 2021 , respectively, were excluded from diluted earnings per share calculations because they were antidilutive.     Note 10: Financial Instruments   Overview   As a result of being a global enterprise, our earnings, cash flows and financial position are exposed to foreign currency risk from foreign currency denominated receivables and payables.   We use foreign currency forward contracts, cross-currency swaps and interest rate swaps to manage risks associated with foreign currency exchange rates and interest rates. We do not hold derivative financial instruments of a speculative nature or for trading purposes. We record derivatives as assets and liabilities on the balance sheet at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the Consolidated Statement of Cash Flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. We evaluate hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings.   We are exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. We select investment-grade multinational banks and financial institutions as counterparties for derivative transactions and monitor the credit quality of each of these banks on a periodic basis as warranted. We do not anticipate nonperformance by any of these counterparties, and valuation allowances, if any, are de minimis.   15 Table of Contents   Cash Flow Hedges   As of May 28, 2022 , we had cash flow hedges of four  cross-currency swap agreements effective October 20, 2017 to convert a notional amount of $ 267,860 of foreign currency denominated intercompany loans into U.S. dollars, which mature in 2022.  As of May 28, 2022 , the combined fair value of the swaps was an asse t of $ 24,932   and was included in other current assets in the Consolidated Balance Sheets. The swaps were designated as cash flow hedges for accounting treatment. The lesser amount between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps is recorded in accumulated other comprehensive income (loss) in the Consolidated Balance Sheets and in other net cash provided by operating activities in the Consolidated Statement of Cash Flows. The differ ences between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps are recorded as other income, net in the Consolidated Statements of Income. In a perfectly effective hedge relationship, the two fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. The amount in accumulated other comprehensive income (loss) related to cross-currency swaps was a gain of $ 190  as of May 28, 2022 . The estimated net amount of the existing gain that is reported in accumulated other comprehensive income (loss) as of May 28, 2022 that is expected to be reclassified into earnings within the next twelve mont hs is $ 190 .  As of May 28, 2022 , we do not believe any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.   The following table summarizes the cross-currency swaps outstanding as of May 28, 2022 :     Fiscal Year of         Notional             Expiration   Interest Rate     Value     Fair Value   Pay EUR 2022   3.00 %     $ 267,860     $ 24,932   Receive USD   5.1803 %                     On February 27, 2018, we entered into an interest rate swap agreement to convert $ 200,000 of our $ 2,150,000 Term Loan B to a fixed interest rate of 4.589 percent. During the second  quarter of 2021, we settled a portion of this interest rate swap as the debt underlying this swap was less than the swap value due to debt paydown. We settled the ineffective portion of the interest rate swap by making a cash payment of $ 378 and recorded that payment to interest expense in our Consolidated Statements of Income during the second quarter of  2021. On October 20, 2017, we entered into interest rate swap agreements to convert $ 1,050,000 , which was amortized down to $ 800,000 on October 20, 2021,  of our $ 2,150,000 Term Loan B to a fixed interest rate of 4.0275 percent. The combined fair value of the interest rate swaps was a liabi lity of $ 460   at May 28, 2022 and was included in other liabilities in the Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as cash flow hedges. We are applying the hypothetical derivative method to assess hedge effectiveness for these interest rate swaps. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $ 1,125,000 variable rate Term Loan B are compared with the change in the fair value of the swaps.   16 Table of Contents   On April 23, 2018, we amended our Term Loan B Credit Agreement to reduce the interest rate from LIBOR plus 2.25 percent to LIBOR plus 2.00 percent. Fixed interest rates related to swap agreements disclosed have been updated to reflect the amendment.   The amounts of pretax gains (losses) recognized in Comprehensive Income related to derivative instruments designated as cash flow hedges are as follows:       Three Months Ended     Six Months Ended       May 28, 2022     May 29, 2021     May 28, 2022     May 29, 2021   Cross-currency swap contracts   $ ( 1,228 )   $ ( 1,258 )   $ ( 3,343 )   $ ( 2,320 ) Interest rate swap contracts     4,435       4,721       12,690       10,258     Fair Value Hedges   On February 12, 2021, we entered into interest rate swap agreements to convert our $ 300,000  Public Notes that were issued on October  20, 2020 to a variable interest rate of 1 -month LIBOR plus 3.28 percent. The combined fair value of the interest rate swaps was a liability of $ 33,901  at  May 28, 2022 , and was included in other liabilities in the Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges. We apply the short cut method and assume hedge effectiveness. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $ 300,000 fixed rate Public Notes are compared with the change in the fair value of the swaps.   Derivatives Not Designated As Hedging Instruments   We use foreign currency forward contracts to offset our exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries that are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Foreign currency forward contracts are recorded as assets and liabilities on the balance sheet at fair value. Changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities. See Note 11  for fair value amounts of these derivative instruments.   As of May 28, 2022 , we had forward foreign currency contracts maturing between May 31, 2022 and December 13, 2022. The ma rk-to-market effect associated with these contracts was largely offset by the underlying transaction gains and losses resulting from the foreign currency exposures for which these contracts relate.    The amounts of pretax gains recognized in other income, net related to derivative instruments not designated as hedging instruments for the  six months ended May 28, 2022 and May 29, 2021 were  $ 5,089 a nd $ 404 , respectively.   Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities in the customer base and their dispersion across many different industries and countries. As of May 28, 2022 , there were no significant concentrations of credit risk.   17 Table of Contents     Note 11: Fair Value Measurements   Overview   Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:     ● Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.   ● Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.   ● Level 3: Unobservable inputs that reflect management’s assumptions, and include situations where there is little, if any, market activity for the asset or liability.   Balances Measured at Fair Value on a Recurring Basis   The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of May 28, 2022 and November 27, 2021 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.       May 28,     Fair Value Measurements Using:   Description   2022     Level 1     Level 2     Level 3   Assets:                                 Marketable securities   $ 3,247     $ 3,247     $ -     $ -   Foreign exchange contract assets     9,143       -       9,143       -   Cross-currency cash flow hedge assets     24,932       -       24,932       -                                     Liabilities:                                 Foreign exchange contract liabilities   $ 4,053     $ -     $ 4,053     $ -   Interest rate swaps, cash flow hedge liabilities     460       -       460       -   Interest rate swaps, fair value hedge liabilities     33,901       -       33,901       -   Contingent consideration liability     500       -       -       500         November 27,     Fair Value Measurements Using:   Description   2021     Level 1     Level 2     Level 3   Assets:                                 Marketable securities   $ 2,079     $ 2,079     $ -     $ -   Foreign exchange contract assets     5,725       -       5,725       -   Cross-currency cash flow hedge assets     14,496       -       14,496       -                                     Liabilities:                                 Foreign exchange contract liabilities   $ 6,082     $ -     $ 6,082     $ -   Interest rate swaps, cash flow hedge liabilities     12,366       -       12,366           Interest rate swaps, fair value hedge liabilities     10,539       -       10,539       -   Contingent consideration liability     8,100       -       -       8,100     Adjustments to the fair value of contingent consideration are recorded to selling, general and administrative expenses in the Statement of Income.    18 Table of Contents   The valuation of our contingent consideration liability related to the acquisition of TissueSeal resulted in a fair value of $ 500 as of  May 28, 2022 . As of November 27, 2021, the agreement provisions for the D.H.M contingent consideration were met, and as a result, $ 8,100 was paid during the period ended February 26, 2022. See Note 2 for further discussion regarding our acquisitions.  The following table provides details of the contingent consideration liabilities:          Amounts   Balance at November 27, 2021   $ 8,100   Acquisition     500   Payment of contingent consideration     ( 8,122 ) Mark to market adjustment     22   Balance at May 28, 2022   $ 500       Balances Measured at Fair Value on a Nonrecurring Basis   We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets include intangible assets acquired in an acquisition.  The identified intangible assets of customer relationships, technology and tradenames acquired in connection with our acquisitions were measured using unobservable (Level  3 ) inputs.  The fair value of the intangible assets was calculated using either the income or cost approach. Significant inputs include estimated revenue growth rates, gross margins, operating expenses, attrition rate, royalty rate and discount rate.     See Note  2  for further discussion regarding our acquisitions.   Balances Disclosed at Fair Value   Long-term debt had an estimated fair value of $ 1,819,598  and $ 1,618,291 as of May 28, 2022 and November 27, 2021 , respectively. The fair value of long-term debt is based on quoted market prices for the same or similar issues or on the current rates offered for debt of similar maturities. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange.     Note 12: Commitments and Contingencies   Environmental Matters     From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. We review the circumstances of each individual site, considering the number of parties involved, the level of potential liability or our contribution relative to the other parties, the nature and magnitude of the hazardous substances involved, the method and extent of remediation, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred. Also, from time to time, we are identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish an undiscounted financial provision. We recorded liabilities of $ 6,378 and $ 6,603  as of May 28, 2022 and November 27, 2021 , respectively, for probable and reasonably estimable environmental remediation costs. Of the amount reserved, $ 3,078 and $ 3,333  as of May 28, 2022 and November 27, 2021 , respectively, is attributable to a facility we own in Simpsonville, South Carolina as a result of our Royal Adhesives acquisition that is a designated site under CERCLA.   Currently, we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites. In addition, we are engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.   Other Legal Proceedings     From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including the asbestos litigation described in the following paragraphs, will not have a material adverse effect on our results of operations, financial condition or cash flow.   19 Table of Contents   We have been named as a defendant in lawsuits in which plaintiffs have alleged injury due to products containing asbestos manufactured more than 35 years ago. The plaintiffs generally bring these lawsuits against multiple defendants and seek damages (both actual and punitive) in very large amounts. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable injuries or that the injuries suffered were the result of exposure to products manufactured by us. We are typically dismissed as a defendant in such cases without payment. If the plaintiff presents evidence indicating that compensable injury occurred as a result of exposure to our products, the case is generally settled for an amount that reflects the seriousness of the injury, the length, intensity and character of exposure to products containing asbestos, the number and solvency of other defendants in the case, and the jurisdiction in which the case has been brought.   A significant portion of the defense costs and settlements in asbestos-related litigation is paid by third parties, including indemnification pursuant to the provisions of a 1976 agreement under which we acquired a business from a third party. Currently, this third party is defending and paying settlement amounts, under a reservation of rights, in most of the asbestos cases tendered to the third party.   In addition to the indemnification arrangements with third parties, we have insurance policies that generally provide coverage for asbestos liabilities, including defense costs. Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation. However, certain of our insurers are insolvent. We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits. These agreements require, among other things, that we fund a share of defense costs, settlements and judgments allocable to years in which the responsible insurer is insolvent.   A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows:       Six Months Ended     3 Years Ended       May 28, 2022     May 29, 2021     November 27, 2021   Lawsuits and claims settled     3       2       14   Settlement amounts   $ 206     $ 85     $ 639   Insurance payments received or expected to be received   $ 139     $ 55     $ 434     We do not believe that it would be meaningful to disclose the aggregate number of asbestos-related lawsuits filed against us because relatively few of these lawsuits are known to involve exposure to asbestos-containing products that we manufactured. Rather, we believe it is more meaningful to disclose the number of lawsuits that are settled and result in a payment to the plaintiff. To the extent we can reasonably estimate the amount of our probable liabilities for pending asbestos-related claims, we establish a financial provision and a corresponding receivable for insurance recoveries.    Based on currently available information, we have concluded that the resolution of any pending matter, including asbestos-related litigation, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.     Note 13: Segments   We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. Revenue and operating income of each of our segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance. Segment operating income is identified as gross profit less SG&A expenses. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment. Consistent with our internal management reporting, Corporate Unallocated amounts include business acquisition and integration costs, organizational restructuring charges and project costs associated with our implementation of Project ONE. Corporate assets are not allocated to the operating segments. Inter-segment revenues are recorded at cost plus a markup for administrative costs.   We have  three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The business components within each operating segment are managed to maximize the results of the overall operating segment rather than the results of any individual business component of the operating segment. Results of individual components of each operating segment are subject to numerous allocations of segment-wide costs that may or may not have been focused on that particular component for a particular reporting period. The costs for these allocated resources are not tracked on a "where-used" basis as financial performance is assessed at the total operating segment level.   20 Table of Contents   The table below provides certain information regarding net revenue and operating income (loss) for each of our operating segments.        Three Months Ended       May 28, 2022     May 29, 2021       Net     Operating     Net     Operating       Revenue     Income (Loss)     Revenue     Income (Loss)   Hygiene, Health and Consumable Adhesives   $ 437,889     $ 43,267     $ 364,814     $ 38,929   Engineering Adhesives     405,346       42,917       345,373       32,075   Construction Adhesives     150,023       11,285       117,686       6,338   Total segment   $ 993,258     $ 97,469     $ 827,873     $ 77,342   Corporate Unallocated 1     -       ( 9,955 )     -       ( 8,201 ) Total   $ 993,258     $ 87,514     $ 827,873     $ 69,141         Six Months Ended       May 28, 2022     May 29, 2021       Net     Operating     Net     Operating       Revenue     Income (Loss)     Revenue     Income (Loss)   Hygiene, Health and Consumable Adhesives   $ 827,427     $ 75,480     $ 700,482     $ 68,840   Engineering Adhesives     759,323       75,489       658,037       62,493   Construction Adhesives     262,989       15,641       195,258       1,635   Total segment   $ 1,849,739     $ 166,610     $ 1,553,777     $ 132,968   Corporate Unallocated     -       ( 22,095 )     -       ( 15,477 ) Total   $ 1,849,739     $ 144,515     $ 1,553,777     $ 117,491     1 Consistent with our internal management reporting, Corporate Unallocated amounts in the tables above include charges that are not allocated to the Company’s reportable segments.    The table below provides a reconciliation of operating income to income before income taxes and income from equity method investments:       Three Months Ended     Six Months Ended       May 28,     May 29,     May 28,     May 29,       2022     2021     2022     2021   Operating income   $ 87,514     $ 69,141     $ 144,515     $ 117,491   Other income, net     -       11,879       6,142       19,748   Interest expense     ( 19,828 )     ( 19,942 )     ( 38,025 )     ( 40,303 ) Interest income     2,091       2,530       4,030       5,189   Income before income taxes and income from equity method investments   $ 69,777     $ 63,608     $ 116,662     $ 102,125     21 Table of Contents   We view the following disaggregation of net revenue by geographic region as useful to understanding the composition of revenue recognized during the respective reporting periods:       Three Months Ended May 28, 2022                                         Hygiene, Health                               and Consumable     Engineering     Construction               Adhesives     Adhesives     Adhesives     Total                                     Americas   $ 255,243     $ 166,559     $ 119,420     $ 541,222   EIMEA     123,145       133,932       23,713       280,790   Asia Pacific     59,501       104,855       6,890       171,246   Total   $ 437,889     $ 405,346     $ 150,023     $ 993,258         Three Months Ended May 29, 2021                                         Hygiene, Health                               and Consumable     Engineering     Construction               Adhesives     Adhesives     Adhesives     Total                                     Americas   $ 201,458     $ 126,450     $ 103,996     $ 431,904   EIMEA     108,310       121,585       6,506       236,401   Asia Pacific     55,046       97,338       7,184       159,568   Total   $ 364,814     $ 345,373     $ 117,686     $ 827,873         Six Months Ended May 28, 2022       Hygiene, Health                               and Consumable     Engineering     Construction               Adhesives     Adhesives     Adhesives     Total                                     Americas   $ 475,938     $ 299,886     $ 214,998     $ 990,822   EIMEA     237,797       249,752       34,930       522,479   Asia Pacific     113,692       209,685       13,061       336,438   Total   $ 827,427     $ 759,323     $ 262,989     $ 1,849,739         Six Months Ended May 29, 2021       Hygiene, Health                               and Consumable     Engineering     Construction               Adhesives     Adhesives     Adhesives     Total                                     Americas   $ 383,479     $ 239,577     $ 171,028     $ 794,084   EIMEA     204,283       223,344       11,233       438,860   Asia Pacific     112,720       195,116       12,997       320,833   Total   $ 700,482     $ 658,037     $ 195,258     $ 1,553,777     22 Table of Contents