What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-01-24 compared with 2022-01-25 · 788 added, 336 removed, 1822 unchanged (38% of the section changed)

5 unchanged sentences

We have audited the accompanying consolidated balance sheets of H.B.

Fuller Company and subsidiaries (the Company) as of November 27, 2021 and November 28, 2020, the related consolidated statements of income, comprehensive income, total equity and cash flows for each of the two years ended November 27, 2021 and November 28, 2020, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at November 27, 2021 and November 28, 2020, and the results of its operations and its cash flows for each of the two years ended November 27, 2021 and November 28, 2020, in conformity with U.S.

Fuller Company and subsidiaries (the Company) as of December 3, 2022 and November 27, 2021, the related consolidated statements of income, comprehensive income, total equity and cash flows for each of the three years in the period ended December 3, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 3, 2022 and November 27, 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 3, 2022, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of November 27, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated January 25, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 3, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated January 24, 2023, expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter  

4 unchanged sentences

Description of the Matter

At November 27, 2021, the Company had goodwill of approximately $311 million related to the Construction Adhesive reporting unit.

At December 3, 2022, the Company had goodwill of approximately $425.8 million related to the Construction Adhesive reporting unit.

As discussed in Notes 1 and 5 of the consolidated financial statements, the Company performs goodwill impairment testing on an annual basis as of the beginning of the fourth quarter, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Auditing management’s goodwill impairment test for the Construction Adhesives reporting unit was complex and judgmental due to the significant estimation required in determining the fair value of the reporting unit.

In particular, the Company estimates fair value using the income approach which is sensitive to certain assumptions, such as forecasted revenue and related revenue growth rate, the earnings before interest, taxes, depreciation and amortization (EBITDA) margins rate, the weighted average cost of capital and the tax rate which are affected by management’s business plans and expectations about future market or economic conditions.

In particular, the Company estimates fair value using the income approach which is sensitive to certain assumptions, such as forecasted revenue and related revenue growth rate, the earnings before interest, taxes, depreciation and amortization (EBITDA) margins rate, and the weighted average cost of capital which are affected by management’s business plans and expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit

4 unchanged sentences

We involved our valuation specialists to assist in our evaluation of the valuation models, methodologies and significant assumptions used by the Company, specifically the weighted average cost of capital.

We compared the projected tax rates with current enacted rates and assessed the reasonableness of the forecasted profits and losses by jurisdiction by comparing to historical results.

/s/ Ernst & Young LLP

3 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of H.B.

Fuller Company

2 unchanged sentences

Fuller Company and subsidiaries’

internal control over financial reporting as of November 27, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

internal control over financial reporting as of December 3, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, H.B.

Fuller Company and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of November 27, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of November 27, 2021 and November 28, 2020, the related consolidated statements of income, comprehensive income, total equity and cash flows for each of the two years ended November 27, 2021 and November 28, 2020, and the related notes and our report dated January 25, 2022 expressed an unqualified opinion thereon.

Fuller Company and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 3, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 3, 2022 and November 27, 2021, the related consolidated statements of income, comprehensive income, total equity and cash flows for each of the three years in the period ended December 3, 2022, and the related notes, and our report dated January 24, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

16 unchanged sentences

Minneapolis, Minnesota

January 25, 2022

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Fuller Company

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of income, comprehensive income, total equity, and cash flows of H.B.

Fuller Company and subsidiaries (the Company), for the fiscal year ended November 30, 2019, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations of the Company and its cash flows for the fiscal year ended November 30, 2019, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We served as the Company’s auditor from 2003 to 2020.

Minneapolis, Minnesota

January 24, 2020, except for Note 15, as to which the date is June 29, 2021

 January 24, 2023

CONSOLIDATED STATEMENTS OF INCOME

21 unchanged sentences

Net income including non-controlling interest

Other comprehensive income (loss)

Other comprehensive (loss) income

Foreign currency translation

2 unchanged sentences

Cash-flow hedges, net of tax

Other comprehensive income (loss)

Comprehensive income

 Net investment hedges, net of tax

Other comprehensive (loss) income

Comprehensive (loss) income

Comprehensive income attributable to non-controlling interest

Comprehensive income attributable to H.B.

Comprehensive (loss) income attributable to H.B.

See accompanying Notes to Consolidated Financial Statements.

94 unchanged sentences

Income (Loss)

Balance at December 1, 2018, as previously reported

Change in accounting principles

Balance at December 1, 2018, as adjusted

Balance at November 30, 2019, as adjusted

Comprehensive income (loss)

12 unchanged sentences

Repurchases of common stock

Balance at November 27, 2021

Balance at December 3, 2022

CONSOLIDATED STATEMENTS of CASH FLOWS

17 unchanged sentences

Income from equity method investments, net of dividends received

Loss (gain) on sale of assets

(Gain) loss on sale of assets

( 1,195 )  

Share-based compensation

18 unchanged sentences

( 79,097 )  

38,412  

Trade payables

13 unchanged sentences

108,566  

( 15,683 )  

37,518  

Net cash provided by operating activities

10 unchanged sentences

Purchased business assets

( 5,623 )  

Purchased business remaining equity

Proceeds from sale of property, plant and equipment

11,133  

Proceeds from sale of business

70,293  

Cash received from government grant

1 unchanged sentence

( 1,822 )  

( 8,555 )  

Net cash (used in) provided by investing activities

Net cash used in investing activities

( 375,287 )  

3 unchanged sentences

335,000  

300,000  

Repayment of long-term debt

1 unchanged sentence

( 156,500 )  

 Payment of debt issue costs

( 600 )  

Net proceeds from notes payable

12 unchanged sentences

( 2,682 )  

Net cash used in financing activities

Net cash provided by (used in) financing activities

160,320  

2 unchanged sentences

( 23,423 )  

( 3,335 )  

Net change in cash and cash equivalents

11 unchanged sentences

Dividends paid with company stock

Cash paid for interest, net of amount capitalized of $ 905 , $ 565 , and $ 416 for the years ended November 27, 2021, November 28, 2020 and November 30, 2019, respectively

Cash paid for interest, net of amount capitalized of $ 1,518 , $ 905 , and $ 565 for the years ended December 3, 2022, November 27, 2021 and November 28, 2020, respectively

$ 83,527  

11 unchanged sentences

Nature of Business

Fuller Company and our subsidiaries formulate, manufacture and market specialty adhesives, sealants, coatings, polymers, tapes, encapsulants, additives and other specialty chemical products globally, with sales operations in 35 countries in North America, Europe, Latin America, the Asia Pacific region, India, the Middle East and Africa.

34 countries in North America, Europe, Latin America, the Asia Pacific region, India, the Middle East and Africa.

We have 

15 unchanged sentences

As such, financial information as of 

November 27, 2021, November 28, 2020, and November 30, 2019 for Sekisui-Fuller Company, Ltd.

December 3, 2022, November 27, 2021, and November 28, 2020 for Sekisui-Fuller Company, Ltd.

is not required.

1 unchanged sentence

Fiscal year-end dates were 

November 27, 2021, November 28, 2020, and November 30, 2019 for 2021, 2020 and 2019 , respectively.

December 3, 2022, November 27, 2021, and November 28, 2020 for 2022, 2021 and 2020 , respectively. Every five or six years we have a 53rd  week in our fiscal year.

2022  was a 53 -week year.

Use of Estimates

55 unchanged sentences

Restrictions on Cash

There were no restrictions on cash as of November 27, 2021  or November 28, 2020.

There were no restrictions on cash as of December 3, 2022  or November 28, 2020.

There are no contractual or regulatory restrictions on the ability of consolidated and unconsolidated subsidiaries to transfer funds to us, except for typical statutory restrictions which prohibit distributions in excess of net capital or similar tests.

9 unchanged sentences

Inventories are recorded at cost ( not in excess of net realizable value) as determined by the weighted-average cost method and are valued at the lower of cost or net realizable value.

Investments with a value of $ 9,584  and $ 9,006  represent the cash surrender value of life insurance contracts as of November 27, 2021 and November 28, 2020 , respectively.

Investments with a value of $ 8,957  and $ 9,584  represent the cash surrender value of life insurance contracts as of December 3, 2022 and November 27, 2021 , respectively.

These assets are held to primarily support supplemental pension plans and are recorded in other assets in the Consolidated Balance Sheets.

4 unchanged sentences

If we believe that an impairment exists, it is our policy to calculate the fair value of the investment and recognize as impairment any amount by which the carrying value exceeds the fair value of the investment.

We did not have any impairment of our equity investments for the years ended November 27, 2021, November 28, 2020, and November 30, 2019 . The book value of the equity investments was $ 1,667 as of 

November 27, 2021 and $ 1,669  as of November 28, 2020 .

We recognized impairment of $ 303 for the year ended December 3, 2022 and did not have any impairment of our equity investments for the years ended November 27, 2021, and November 28, 2020 . The book value of the equity investments was $ 1,362 as of 

December 3, 2022 and $ 1,667  as of November 27, 2021 .

Property, Plant and Equipment

59 unchanged sentences

The recorded liability is required to be adjusted for changes resulting from the passage of time and/or revisions to the timing or the amount of the original estimate.

The asset retirement obligation liability was $ 2,917  and $ 2,948  at November 27, 2021 and November 28, 2020 , respectively.

The asset retirement obligation liability was $ 2,888  and $ 2,917  at December 3, 2022 and November 27, 2021 , respectively.

Environmental Costs

86 unchanged sentences

The trade receivables and allowances significant accounting policy has been changed in accordance with these ASUs.

Change in Accounting Principle –

Revenue Recognition

In May 2014, FASB issued ASU 

2014 - 09, Revenue from Contracts with Customers (Topic 606 ) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.

We adopted this ASU during the quarter ended March 2, 2019 using the modified retrospective method of adoption.

As a result of the adoption of this ASU, we recorded an increase to opening retained earnings of $ 1,776 as of December 1, 2018 related to accelerated recognition for arrangements where we provide shipping and handling services after control of the goods has transferred to the customer.

Prior periods were not restated.

We have included the disclosures required by this ASU in Note 15.

In March 2016, the FASB issued ASU No.

2016 - 08, Revenue from Contracts with Customers (Topic 606 ), Principal versus Agent Considerations (Reporting Revenue Gross versus Net) .

This ASU provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer.

The amendments in this ASU affect the guidance in ASU No.

2014 - 09 and were adopted during the quarter ended March 2, 2019 with ASU No.

2014 - 09 as discussed above.

Change in Accounting Principle –

Income Tax Impact of  

Intra-Entity Transfers of Assets Other Than Inventory

October 2016, 

the FASB issued ASU 

2016 - 16,  

Income Taxes (Topic  

Intra-Entity Transfers of Assets Other Than Inventory.

 This ASU changes the timing of income tax recognition for an intercompany sale of assets.

The ASU requires the seller’s tax effects and the buyer’s deferred taxes to be recognized immediately upon the sale instead of deferring accounting for the income tax implications until the assets are sold to a 

third  party or recovered through use.

We adopted this ASU during the quarter ended 

March 2, 2019. 

We recorded a decrease to opening retained earnings of $ 733  as of 

December 1, 2018 

as a result of the adoption of this ASU.

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.

In September 2022, the FASB issued ASU 

2022 - 04, Liabilities - Supplier Finance Programs (Subtopic 405 - 50 ):

Disclosure of Supplier Finance Program Obligations.

This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of the financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude.

To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs. 

Our effective date of this ASU is our fiscal year ending December 1, 2024.

We are evaluating the effect that this guidance will have on our Consolidated Financial Statements. 

Recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the company.

On October 24, 2022, we acquired GSSI Sealants, Inc. ("GSSI") for a total purchase price of $ 7,483 , which was funded through existing cash.

This includes a holdback amount of $ 1,050 that will be paid on the 12 month anniversary of the closing date.

GSSI, headquartered in Houston, Texas, is a manufacturer of premier elastomeric butyl rubber sealant tapes.

The acquisition of GSSI is expected to expand our Construction Adhesives global footprint and product range and enable our growth in the metal building, wastewater, and building envelope applications and will also expand our reach in Central America and the U.S. The acquisition fair value measurement was preliminary as of December 3, 2022 and includes intangible assets of $ 4,305 and other net assets of $ 3,178 .

GSSI is included in our Construction Adhesives operating segment. 

On August 16, 2022, we acquired ZKLT Polymer Co., Ltd.

("ZKLT") for a base purchase price of 102,812 Chinese renminbi, or approximately $ 15,183 , which was funded through existing cash.

We are also required to pay 

27,000 Chinese renminbi, or approximately $ 3,987 , with half to be paid on each of the 12 month and 18 month anniversaries of the closing date, as well as contingent consideration up to 30,000 Chinese renminbi, or approximately $ 4,430 , following the completion of certain performance goals and conditions. ZKLT, headquartered in Chongquin City, China, is a manufacturer of liquid adhesives primarily for the automotive market.

The acquisition of ZKLT is expected to add market knowledge, strong customer relationships and a strategic manufacturing location to further strengthen our presence in Southwest China.

The acquisition fair value measurement was preliminary as of December 

3, 2022 and includes intangible assets of $ 5,316 , goodwill of $ 3,720 and other net assets of $ 10,134 .

Goodwill is not deductible for tax purposes.

See Note 13  for further discussion of the fair value of the contingent consideration.

ZKLT is included in our Engineering Adhesives operating segment. 

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 151,214 British pound sterling, or approximately $ 203,573 , which was funded through borrowings on our credit facility.

The agreement requires us to pay an additional 1,500 British pound sterling, or approximately $ 2,019 , following the completion of certain environmental studies.

As of December 3, 2022, the environmental studies were complete and the $ 2,019 was paid. 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 final as of December 3, 2022.

The acquisition is included in our Construction Adhesives operating segment. 

The following table summarizes the fair value measurement of the assets acquired and liabilities assumed as of December 3, 2022:

December 3, 2022

$ 12,165  

Current assets

19,074  

Property, plant and equipment

119,358  

Other intangibles

Customer relationships

67,447  

Trademarks/trade names

Current liabilities

Other liabilities

$ 205,592  

The expected useful lives of the acquired intangible assets are 15 years for technology, 10  years for customer relationships and five  years for trademarks/trade names.

Based on the fair value measurement of the assets acquired and liabilities assumed, we allocated $ 119,358 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. 

On January 11, 2022, we acquired Fourny NV ("Fourny") for a base purchase price of 12,867 Euro, or approximately $ 14,627 , which was funded through existing cash. The agreement requires us to pay an additional 3,100 Euro, 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 final as of December 3, 2022 and includes intangible assets of $ 10,117 , goodwill of $ 6,455 and other net assets of $ 1,391 .

Goodwill is not deductible for tax purposes.

Fourny is included in our Construction Adhesives operating segment. 

TissueSeal, LLC

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. The acquisition fair value measurement was final as of December 3, 2022 and includes intangible assets of $ 11,160 , goodwill of $ 13,765  and other net assets of $ 217 .

Goodwill is deductible for tax purposes.

See Note 13 for further discussion of the fair value of the contingent consideration liability.

TissueSeal is recorded in our Hygiene, Health and Consumable Adhesives operating segment. 

STR Holdings, Inc.

5 unchanged sentences

As of November 27, 2021, the agreement provisions for the contingent consideration were met, and as a result, the $ 1,700 was paid.

See Note 13 for the fair value and payment of this contingent consideration.

We recorded no goodwill in our accounting for this acquisition.

STR is reported in our Engineering Adhesives ("EA") operating segment.

The STR acquisition does not represent a material business combination and therefore pro forma financial information is not provided. 

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 requires 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 liability as of the date of acquisition was $ 5,000 resulting in a final purchase price of $ 14,500 .

See Note 13 for further discussion of the fair value of the contingent consideration liability.

Goodwill is deductible for tax purposes.

and the related goodwill are reported in our Hygiene, Health and Consumable Adhesives operating segment.

acquisition does not represent a material business combination and therefore pro forma financial information is not provided.

Ramapo Sales and Marketing, Inc.

On May 17, 2019, we acquired certain assets from a window and insulating glass sealants sales and distribution company, Ramapo Sales and Marketing, Inc.

(“Ramapo”), headquartered in Charleston, South Carolina.

This acquisition supports the integration of the insulating glass business that we acquired as part of the Royal Adhesives acquisition.

The purchase price of $ 8,292 was funded through existing cash.

In addition, we were required to pay up to $ 3,400 in contingent consideration based upon financial results for the twelve months ended December 31, 2019.

Existing receivables of $ 2,166 from Ramapo were effectively settled as a result of the acquisition.

The acquisition fair value measurement was final as of May 30, 2020 and includes goodwill of $ 165 , customer relationship intangible of $ 8,800 , and additional acquired assets of $ 4,148 .

The fair value of the contingent consideration liability as of the date of the acquisition was $ 2,654 , resulting in a final purchase price of $10,947.

During the second quarter of 2020, the contingent consideration liability was finalized and adjusted to a final balance of $ 767 .

Ramapo and the related goodwill are reported in our Engineering Adhesives operating segment.

Dalton Holdings, LLC

On July 1, 2019, we completed the sale of Dalton Holdings, LLC (“Dalton Holdings”), which primarily manufactures surfactants and thickeners, within the Americas Adhesives segment.

The sale resulted in a pre-tax gain on sale of $ 18,764 , which is recorded in other income, net in the Consolidated Statements of Income for the year ended November 30, 2019.

STR is reported in our Engineering Adhesives operating segment. 

All acquisitions, individually and in the aggregate, are not material and therefore pro forma financial information is not provided.

Restructuring Actions

1 unchanged sentence

The following table summarizes the pre-tax distribution of charges under these restructuring plans by income statement classification:

November 27, 2021

December 3, 2022

November 27, 2021

1 unchanged sentence

Cost of sales

$ ( 152 )  

$ ( 188 )  

$ 1,013  

Selling, general and administrative

( 297 )  

$ ( 449 )  

$ 4,580  

The restructuring charges are all recorded in Corporate Unallocated for segment reporting purposes.

1 unchanged sentence

Balance at end November 28, 2020

$ 5,834  

$ 6,082  

Expense incurred

( 807 )  

 Non-cash charges

( 135 )  

Cash payments

( 3,917 )  

( 1,707 )  

Foreign currency translation

( 15 )  

Balance at end November 27, 2021

$ 1,095  

Expense incurred

( 449 )  

Non-cash charges

Cash payments

( 529 )  

Foreign currency translation

Balance at end November 27, 2021

( 60 )  

Balance at end December 3, 2022

Non-cash charges include accelerated depreciation resulting from the cessation of use of certain long-lived assets.

5 unchanged sentences

Foreign currency transaction losses, net

(Loss) gain on disposal of assets

$ ( 12,935 )  

$ ( 5,962 )  

Gain (loss) on disposal of assets

( 648 )  

Net periodic pension benefit

26,787  

32,070  

17,902  

( 2,316 )  

Total other income, net

$ 12,952  

$ 32,855  

$ 15,398  

Research and development expenses (included in SG&A expenses)

$ 44,853  

$ 39,344  

$ 36,969  

Balance Sheet Information

Additional details of balance sheet amounts as of 

November 27, 2021 and November 28, 2020 are as follows:

December 3, 2022 and November 27, 2021 are as follows:

Raw materials

$ 237,071  

$ 226,723  

Finished goods

254,710  

221,681  

Total inventories

$ 491,781  

$ 448,404  

Other current assets

Other receivables

$ 36,338  

$ 28,874  

Prepaid income taxes

27,169  

13,359  

Prepaid taxes other than income taxes

29,322  

26,929  

Prepaid expenses

27,490  

25,889  

Assets held for sale

Total other current assets

$ 120,319  

$ 96,335  

Property, plant and equipment

$ 84,320  

$ 84,492  

Buildings and improvements

405,037  

395,849  

Machinery and equipment

957,371  

915,914  

Construction in progress

133,010  

104,734  

Total, at cost

1,579,738  

1,500,989  

Accumulated depreciation

( 846,071 )  

Net property, plant and equipment

Investments and company owned life insurance

$ 733,667  

$ 695,367  

Investments in company owned life insurance

$ 8,957  

$ 9,584  

Equity method investments

42,143  

49,333  

Equity investments

Long-term deferred income taxes

39,048  

37,116  

Prepaid pension costs

86,616  

90,946  

Postretirement other than pension asset

98,848  

107,323  

Operating lease right-of-use assets

32,440  

32,744  

Other long-term receivables

23,661  

Other long-term assets

17,192  

19,699  

Total other assets

$ 335,868  

$ 372,073  

Other accrued expenses

Taxes other than income taxes

$ 14,642  

$ 14,280  

Miscellaneous services

Customer rebates

24,915  

20,743  

Product liability

2 unchanged sentences

Accrued expenses

23,273  

24,995  

Total other accrued expenses

$ 89,345  

$ 86,061  

Other liabilities

Asset retirement obligations

$ 2,888  

$ 2,917  

Long-term deferred income taxes

183,190  

179,401  

Long-term income tax liability

22,202  

14,364  

Long-term deferred compensation

1 unchanged sentence

Noncurrent operating lease liabilities

Long-term accrued payroll tax

23,421  

24,061  

Environmental liabilities

Net investment hedge liabilities

54,046  

Other long-term liabilities

57,497  

40,604  

Total other liabilities

$ 358,286  

$ 277,190  

Additional details on the trade receivables allowance for doubtful accounts, credits related to pricing or quantities shipped and early payment discounts for 

1 unchanged sentence

Balance at beginning of year

$ 9,935  

$ 12,905  

$ 10,682  

Charged to expenses and other adjustments

( 546 )  

( 851 )  

( 2,278 )  

Foreign currency translation effect

( 146 )  

Balance at end of year

$ 10,939  

$ 9,935  

$ 12,905  

Statement of Comprehensive Income Information

The following tables provides details of total comprehensive income (loss):

November 27, 2021

December 3, 2022

Non-controlling

2 unchanged sentences

Fuller and non-controlling interests

$ 180,313  

Other comprehensive income (loss)

Foreign currency translation adjustment 1

$ ( 131,745 )  

( 131,745 )  

Defined benefit pension plans adjustment 2

( 18,881 )  

( 15,063 )  

Interest rate swap 3

13,148  

( 3,224 )  

Other cash flow hedges 3

( 3,536 )  

( 3,483 )  

Net investment hedges 3

( 54,040 )  

13,297  

( 40,743 )  

Other comprehensive income (loss)

$ ( 195,054 )  

$ 13,944  

$ ( 181,110 )  

Comprehensive income

$ ( 797 )  

November 27, 2021

3 unchanged sentences

Fuller and non-controlling interests

$ 161,393  

Other comprehensive income (loss)

Foreign currency translation adjustment 1

$ ( 26,262 )  

( 26,262 )  

Defined benefit pension plans adjustment 2

64,912  

( 16,731 )  

48,181  

Interest rate swap 3

20,109  

( 4,930 )  

15,179  

Other cash flow hedges 3

( 4,554 )  

( 4,486 )  

Other comprehensive income

$ 54,205  

$ ( 21,593 )  

32,612  

Comprehensive income

$ 194,005  

November 28, 2020

3 unchanged sentences

Fuller and non-controlling interests

$ 123,719  

Other comprehensive income (loss)

Foreign currency translation adjustment 1

$ 41,712  

41,712  

Defined benefit pension plans adjustment 2

( 1,235 )  

Interest rate swap 3

( 15,618 )  

( 11,765 )  

Other cash flow hedges 3

( 101 )  

Other comprehensive (loss) income

$ 38,224  

$ 2,517  

40,741  

Comprehensive income

$ 164,460  

1 Income taxes are not provided for foreign currency translation relating to indefinite investments in international subsidiaries.

3 unchanged sentences

Components of accumulated other comprehensive income (loss) are as follows:

November 27, 2021

December 3, 2022

Foreign currency translation adjustment

1 unchanged sentence

$ ( 264,012 )  

Interest rate swap, net of taxes of $ 3,224

Net investment hedges, net of taxes of $ 13,297

( 40,743 )  

Cash flow hedges, net of taxes of ($ 53 )

Defined benefit pension plans adjustment, net of taxes of $ 67,744

42 unchanged sentences

Goodwill and Other Intangible Assets

Goodwill balances by reportable segment as of 

November 27, 2021 and November 28, 2020 consisted of the following:

Hygiene, Health and Consumable Adhesives

Engineering Adhesives

Construction Adhesives

Additional details related to goodwill for 

2021 and 

2020 are as follows:

Balance at beginning of year

Ramapo acquisition

D.H.M acquisition

Goodwill balances by reportable segment consisted of the following:

Hygiene, Health

and Consumable

As of November 27, 2021

$ 325,470  

$ 662,021  

$ 311,354  

$ 1,298,845  

TissueSeal acquisition

13,765  

Fourny acquisition

Apollo acquisition

119,358  

ZKLT acquisition

Foreign currency translation effect

Balance at end of year

( 10,273 )  

( 27,831 )  

( 11,412 )  

As of December 3, 2022

$ 328,962  

$ 637,910  

$ 425,755  

$ 1,392,627  

We evaluate our goodwill for impairment annually at the beginning of the fourth quarter or earlier upon the occurrence of substantive unfavorable changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization.

3 unchanged sentences

Determining fair value requires the company to make judgments about appropriate discount rates, perpetual growth rates and the amount and timing of expected future cash flows.

The cash flows employed in the DCF analysis for each reporting unit are based on the reporting unit's budget, long-term business plan, and recent operating performance.

The cash flows employed in the DCF analysis for each reporting unit are based on the reporting unit's budget, long-term business plan and recent operating performance.

Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting unit and market conditions.

3 unchanged sentences

Relationships

As of November 27, 2021

As of December 3, 2022

Original cost

$ 118,727  

$ 1,004,008  

$ 50,324  

$ 11,053  

$ 1,184,112  

Accumulated amortization

( 66,433 )  

( 388,394 )  

( 21,401 )  

( 6,251 )  

Net identifiable intangibles

$ 52,294  

$ 615,614  

$ 28,923  

$ 4,802  

$ 701,633  

Weighted-average useful lives (in years)

1 unchanged sentence

Original cost

$ 115,980  

$ 932,644  

$ 63,543  

$ 11,343  

$ 1,123,510  

Accumulated amortization

( 62,364 )  

( 335,143 )  

( 33,786 )  

( 5,635 )  

Net identifiable intangibles

$ 53,616  

$ 597,501  

$ 29,757  

$ 5,708  

$ 686,582  

Weighted-average useful lives (in years)

2 unchanged sentences

Amortization Expense

$ 75,151  

$ 69,611  

$ 67,091  

$ 60,396  

$ 57,201  

$ 372,183  

The above amortization expense forecast is an estimate.

1 unchanged sentence

Non-amortizable intangible assets as of 

November 27, 2021 and November 28, 2020 were $ 493  and $ 519 , respectively, and relate to trademarks and trade names.

December 3, 2022 and November 27, 2021 were $ 459  and $ 493 , respectively, and relate to trademarks and trade names.

The change in non-amortizable assets in 

1 unchanged sentence

2021 was due to changes in foreign currency exchange rates.

We adopted ASU No.

2016 - 02 and related standards (collectively, “ASC 842”

), which replaced previous lease accounting guidance, during the first quarter ended February 29, 2020 using the modified retrospective method of adoption.

As a result of electing this transition method, prior periods have not been restated.

The adoption of ASC 842 resulted in the recording of right-of-use assets and associated lease liabilities of approximately $ 28,254 each as of the first day of the quarter ended February 29, 2020.

ASC 842 did not have a material impact on our Consolidated Statement of Income.

We elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases.

We did not elect the hindsight practical expedient.

As a lessee, the company leases office, manufacturing and warehouse space, and equipment.

16 unchanged sentences

The components of lease expense are as follows:

November 27, 2021

December 3, 2022

November 27, 2021

9 unchanged sentences

$ 18,731  

1 In 2020, finance leases were not material for disclosure.

Supplemental balance sheet information related to leases is as follows:

Balance Sheet

November 27, 2021

December 3, 2022

November 27, 2021

16 unchanged sentences

$ 11,150  

$ 9,455  

Current obligations of finance leases

1 unchanged sentence

$ 1,541  

$ 1,109  

Finance leases, net of current obligations

2 unchanged sentences

$ 9,048  

1 In 2020, finance leases were not material for disclosure.

As of November 27, 2021 , the weighted average remaining lease term is 

$ 8,657  

As of December 3, 2022 , the weighted average remaining lease term is 

6.9 years and the weighted average discount rate is 

2 unchanged sentences

Supplemental information related to leases is as follows:

November 27, 2021

December 3, 2022

November 27, 2021

10 unchanged sentences

Finance leases

1 In 2020, finance leases were not material for disclosure.

Maturities of lease liabilities are as follows:

November 27, 2021

December 3, 2022

Finance Leases

4 unchanged sentences

10,214  

36,635  

amounts representing interest

7 unchanged sentences

$ 23,421  

Rent expense for all operating leases, which includes minimum lease payments and other charges such as common area maintenance fees, was $ 19,618 in 2019 .

Notes Payable, Long-Term Debt and Lines of Credit

Notes Payable

Notes payable were $ 24,983  and $ 16,925  at November 27, 2021 and November 28, 2020 , respectively.

Notes payable were $ 28,860  and $ 24,983  at December 3, 2022 and November 27, 2021 , respectively.

This amount primarily represents various foreign subsidiaries’

other short-term borrowings that were not part of committed lines.

The weighted-average interest rates on short-term borrowings were 8.1  percent in 2021 and 2020  and 8.9  percent in 2019.

The weighted-average interest rates on short-term borrowings were 16.2  percent in 2022 and 

8.1  percent in 2021 and 2020.

Fair values of these short-term obligations approximate their carrying values due to their short maturity.

There were no funds drawn from the short-term committed lines at November 27, 2021 .

There were no funds drawn from the short-term committed lines at December 3, 2022 .

Long-Term Debt

2 unchanged sentences

Long-Term Debt

November 27, 2021

December 3, 2022

Revolving credit facility

5.94 %  

Term Loan B 1

$ 175,500  

1 unchanged sentence

1,001,150  

Public Notes 2

14 unchanged sentences

$ 1,591,479  

1 Term Loan B, due on October 20, 2024, $ 2,150,000 variable rate at the London Interbank Offered Rate (LIBOR) plus 2.00  percent ( 2.09  percent at November 27, 2021 );

$ 800,000 swapped to various fixed rates as detailed below.

1 Term Loan B, due on October 20, 2024, $ 2,150,000 variable rate at the London Interbank Offered Rate (LIBOR) plu s 2.00  percent ( 6.19  percent at December 3, 2022 ).

2 Public Notes, due February 15, 2027, $ 300,000 4.00 percent fixed.

3 unchanged sentences

The Term Loan B Credit Agreement is secured by a security interest in substantially all of the personal property assets of the company and each Guarantor, including 100 % of the equity interests in certain domestic subsidiaries and 65 % of the equity interests of first -tier foreign subsidiaries together with certain domestic material real property.

At November 27, 2021 , a balance of $ 1,001,150 was drawn on the Term Loan B.

The interest rate on the Term Loan B is payable at the LIBOR rate plus 2.00  percent ( 2.09  percent at November 27, 2021 ). The interest rate is based on a leverage grid.

The Term Loan B Credit Agreement expires on October 20, 2024. 

At December 3, 2022 , a balance of $ 1,001,150 was outstanding on the Term Loan B.

The interest rate on the Term Loan B is payable at the LIBOR rate plu s 2.00  percent ( 6.19 percent at December 3, 2022 ). The interest rate is based on a leverage grid.

The Term Loan B Credit Agreement matures on October 20, 2024. 

On February 27, 2018, we entered into an interest rate swap agreement to convert $ 200,000 of our Term Loan B to a fixed 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.

2 unchanged sentences

of our Term Loan B to a fixed interest rate of 4.0275 %.

These interest rate swap agreements matured on October 20, 2022 and we have no interest rate swap agreements on our Term Loan B as of December 3, 2022.

See Note 12 for further discussion of these interest rate swaps.

3 unchanged sentences

2022 measurement period was satisfied through amounts prepaid during 2022 .

We have estimated the 2022 prepayment to be zero .

We have estimated the 2023  prepayment to be zero.

On February 14, 2017, we issued $ 300,000 aggregate principal of 10 -year unsecured public notes ( “10 -year Public Notes”) due February 15, 2027 with a fixed coupon of 4.00 percent.

7 unchanged sentences

Fair Value of Long-Term Debt

Long-term debt had an estimated fair value of $ 1,618,291  and $ 1,811,562  as of November 27, 2021 and November 28, 2020 , respectively.

Long-term debt had an estimated fair value of $ 1,713,257  and $ 1,618,291  as of December 3, 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.

5 unchanged sentences

$ 300,000  

Revolving Credit Facility

On October 20, 2020, we amended and restated our revolving credit facility.

On October 20, 2020, we amended and restated our revolving credit facility. On January 

24, 2022, we relied on the accordion feature in our credit agreement to increase the commitment under the existing credit facility from $ 400,000  to $ 600,000 .

On February 28, 2022, we executed an amendment to amend and restate the revolving credit agreement to move from borrowing under LIBOR to borrowing under SOFR along with further upsizing the revolving credit facility by $ 100,000  to $ 700,000  in total aggregate commitments.

The revolving credit facility is secured along with the Term Loan B Credit Agreement, by a first -priority security interest in substantially all of the personal property assets of the company and each Guarantor, including 100 % of the equity interests in certain domestic subsidiaries and 65 % of the equity interests of first -tier foreign subsidiaries.

Interest on the revolving credit facility is payable at the LIBOR plus 1.50 percent ( 1.59  percent at November 27, 2021 ).

Interest on the revolving credit facility is payable at the SOFR plus a credit spread adjustment ( 0.11448 percent) plus 1.75 percent ( 5.94  percent at December 3, 2022 ).

A facility fee of 0.25 percent of the unused commitment under the revolving credit facility is payable quarterly.

1 unchanged sentence

The revolving credit facility matures on July 22, 2024.

As of November 27, 2021 , amounts related to our revolving credit facility was as follows:

As of December 3, 2022 , amounts related to our revolving credit facility was as follows:

Revolving credit facility

1 unchanged sentence

$ 175,500  

$ 515,186  

The secured, multi-currency revolving credit facility can be drawn upon for general corporate purposes up to a maximum of $ 700,000 , less issued letters of credit.

At November 27, 2021 , letters of credit reduced the available amount under the revolving credit facility by $ 8,714 .

At December 3, 2022 , letters of credit reduced the available amount under the revolving credit facility by $ 9,314 .

The secured Term Loan B Credit Agreement and secured revolving credit facility are subject to certain covenants and restrictions.

1 unchanged sentence

Certain covenants become less restrictive after meeting leverage or other financial ratios.

In addition, we cannot be a member of any consolidated group as defined for income tax purposes other than with our subsidiaries. At November 27, 2021 and November 28, 2020 , all financial covenants were met.

In addition, we cannot be a member of any consolidated group as defined for income tax purposes other than with our subsidiaries. At December 3, 2022 and November 27, 2021 , all financial covenants were met.

The Indenture under which the Public Notes have been issued contains covenants imposing certain limitations on the ability of the company to incur liens or enter into sales and leaseback transactions.

5 unchanged sentences

The Board of Directors is authorized to issue up to 10,045,900  shares of preferred stock that may be issued in one or more series and with such stated value and terms as the Board of Directors may determine.

There were 160,000,000  shares of common stock with a par value of $ 1.00 authorized and 52,777,753  and 51,906,663  shares issued and outstanding at November 27, 2021 and November 28, 2020 , respectively.

On April 6, 2017, the Board of Directors authorized a share repurchase program of up to $ 200,000  of our outstanding common shares for a period of up to five years.

There were 160,000,000  shares of common stock with a par value of $ 1.00 authorized and 53,676,576  and 52,777,753  shares issued and outstanding at December 3, 2022 and November 27, 2021 , respectively.

On April 7, 2022, the Board of Directors authorized a new share repurchase program of up to $ 300,000  of our outstanding common shares for a period of up to five years.

Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement.

1 unchanged sentence

Upon repurchase of the shares, we reduce our common stock for the par value of the shares with the excess being applied against additional paid-in capital.

This authorization replaces the September 30, 2010 authorization to repurchase shares.

This authorization replaces the April 6, 2017 authorization to repurchase shares.

We did not repurchase any shares during 

13 unchanged sentences

19,895  

118,742  

Restricted units vested

34 unchanged sentences

2020 Master Incentive Plan

This plan allows for granting of awards to employees.

This plan allows for granting of awards to to any employee, officer, non-employee director, consultant, independent contractor or advisor providing services to us or any of our affiliates, or any person to whom an offer of employment or engagement with us or any of our affiliates has been made.

The plan permits granting of (a) stock options;

3 unchanged sentences

(e) dividend equivalents;

(f) other awards based on our common stock, including shares for amounts employees deferred under the Key Employee Deferred Compensation Plan.

There were 2,253,157  common shares available for grant as of November 27, 2021 .

(f) other awards based on our common stock, including shares for amounts employees or non-employee directors deferred under the deferred compensation plans.

There were 1,268,608  common shares available for grant as of December 3, 2022 .

2018 Master Incentive Plan

31 unchanged sentences

Weighted-average expected volatility

33.35 %  

32.50 %  

Expected volatility range

32.48 % - 32.94 %

24.18 % - 30.99 %

23.88 % - 24.76 %

33.33 - 34.34 %  

32.48 % - 32.94 %  

24.18 % - 30.99 %  

Risk-free interest rate

0.39 % - 1.20 %

0.21 % - 1.51 %

1.34 % - 2.55 %

1.53 - 4.06 %  

0.39 % - 1.20 %  

0.21 % - 1.51 %  

Weighted-average expected dividend

0.95 %  

1.26 %  

Expected dividend yield range

0.92 % - 1.27 %

1.35 % - 2.53 %

1.25 % - 1.45 %

0.94 - 1.23 %  

0.92 % - 1.27 %  

1.35 % - 2.53 %  

Weighted-average fair value of grants

$ 20.91  

$ 13.29  

$ 9.63  

Expected life –

16 unchanged sentences

All share-based compensation was recorded as SG&A expense.

As of November 27, 2021 , $ 7,510  of unrecognized compensation costs related to unvested stock option awards is expected to be recognized over a weighted-average period of 0.9  years.

As of December 3, 2022 , $ 6,906  of unrecognized compensation costs related to unvested stock option awards is expected to be recognized over a weighted-average period of 0.7  years.

Unrecognized compensation costs related to unvested restricted stock units was $ 8,151  which is expected to be recognized over a weighted-average period of 0.72  years.

1 unchanged sentence

The stock option activity for the years ended 

November 27, 2021, November 28, 2020, and November 30, 2019 is summarized below:

December 3, 2022, November 27, 2021, and November 28, 2020 is summarized below:

Exercise Price

Outstanding at December 1, 2018

Forfeited or cancelled

Outstanding at November 30, 2019

5,060,310  

$ 46.04  

1,052,968  

( 397,456 )  

Forfeited or cancelled

( 169,907 )  

Outstanding at November 28, 2020

5,545,915  

$ 47.34  

1,237,094  

( 740,731 )  

Forfeited or cancelled

( 1,069,886 )  

Outstanding at November 27, 2021

4,972,392  

$ 47.45  

549,458  

( 657,789 )  

Forfeited or cancelled

( 40,991 )  

Outstanding at December 3, 2022

4,823,070  

$ 50.42  

The fair value of options granted during 

2 unchanged sentences

2022, 2021 and 2020 was $ 16,877 , $ 15,261 and $ 6,563 , respectively.

For options outstanding at November 27, 2021 , the weighted-average remaining contractual life was 6.5 years and the aggregate intrinsic value was $ 131,515 .

There were 3,072,786 options exercisable at November 27, 2021 , with a weighted-average remaining contractual life of 5.2 years and an aggregate intrinsic value of $ 85,685 .

For options outstanding at December 3, 2022 , the weighted-average remaining contractual life was 6.13 years and the aggregate intrinsic value was $ 144,265 .

There were 3,311,412 options exercisable at December 3, 2022 , with a weighted-average remaining contractual life of 5.14 years and an aggregate intrinsic value of $ 111,209 .

Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised.

Proceeds received from option exercises during the year ended 

November 27, 2021, November 28, 2020, and November 30, 2019 were $ 32,325 , $ 12,321 and $ 10,885 , respectively.

December 3, 2022, November 27, 2021, and November 28, 2020 were $ 30,122 , $ 32,325 and $ 12,321 , respectively.

The company’s actual tax benefits realized for the tax deductions related to the exercise of stock options for 

2022, 2021 and 2020 was $ 3,687 , $ 3,874 and $ 1,278 , respectively.

Restricted Stock Activity

The nonvested restricted stock activity for the years ended 

November 27, 2021, November 28, 2020, and November 30, 2019 is summarized below:

Nonvested at December 1, 2018

Restricted Stock Unit Activity

The nonvested restricted stock unit activity for the years ended 

December 3, 2022, November 27, 2021, and November 28, 2020 is summarized below:

Nonvested at November 30, 2019

487,997  

$ 46.56  

216,293  

( 221,275 )  

( 50,666 )  

Nonvested at November 28, 2020

432,349  

$ 46.22  

356,779  

( 157,945 )  

( 78,818 )  

Nonvested at November 27, 2021

Total fair value of restricted stock vested during 2021 , 2020 , and 

552,365  

$ 50.63  

179,603  

( 172,474 )  

( 68,374 )  

Nonvested at December 3, 2022

491,120  

$ 58.98  

Total fair value of restricted stock units vested during 2022 , 2021 , and 

2020 was $ 8,062 , $ 7,691 and $ 10,362 , respectively.

The total fair value of nonvested restricted stock at 

November 27, 2021 was $ 27,966 .

December 3, 2022 was $ 28,967 .

We repurchased 55,081 , 50,799 and 70,380 shares during 2022, 2021 and 2020 , respectively, in connection with the statutory minimum tax withholding related to vesting of restricted stock.

4 unchanged sentences

The deferred compensation units outstanding for the years ended 

November 27, 2021, November 28, 2020, and November 30, 2019 is summarized below:

Units outstanding December 1, 2018

December 3, 2022, November 27, 2021, and November 28, 2020 is summarized below:

Units outstanding November 30, 2019

525,660  

36,664  

562,324  

Participant contributions

18,008  

13,814  

31,822  

Company match contributions 1

23,033  

24,414  

( 111,436 )  

( 7,306 )  

Units outstanding November 28, 2020

455,265  

44,553  

499,818  

Participant contributions

13,036  

10,487  

23,523  

Company match contributions 1

20,118  

21,167  

( 19,895 )  

( 7,728 )  

Units outstanding November 27, 2021

468,524  

48,361  

516,885  

Participant contributions

89,054  

12,985  

102,039  

Company match contributions 1

Units outstanding November 27, 2021

26,843  

28,142  

( 118,429 )  

( 6,073 )  

Units outstanding December 3, 2022

465,992  

56,572  

522,564  

1 The non-employee directors’

14 unchanged sentences

The total contribution to the 401 (k) plan for 

2021 was $ 12,488  which included the cost of the 4 percent company match of $ 8,698 and the additional 1 percent contribution of $ 3,790 .

T he total contributions to the 401 (k) plan were $ 10,764  and $ 10,784  in 

2022 was $ 12,113 which included the cost of the 4 percent company match of $ 9,082 and the additional 1 percent contribution of $ 3,031 .

T he total contributions to the 401 (k) plan were $ 12,488 and $ 10,764  in 

2021 and 2020 , respectively.

1 unchanged sentence

This discretionary contribution is in addition to the contributions described above.

A discretionary non-elective contribution of $ 5,205 was made for 

2021 and no such contribution was made for 

A discretionary non-elective contribution of $ 950 and $ 5,205 was accrued for 2022 and 2021, respectively.

The defined contribution plan liability recorded in the Consolidated Balance Sheets was $ 12,263  

and $ 9,819  in 

and $ 10,494 in 

2022 and 2021 , respectively, for the U.S.

12 unchanged sentences

pension plan to add a program for eligible employees to take a lump sum distribution.

A total of $ 6,673 and $ 10,939  was paid during 2021 and 2020, respectively, as distributions under this program.

No amounts were paid under this program in 2022 and a total of $ 6,673 was paid during 2021 as distributions under this program.

postretirement benefits are funded through a Voluntary Employees' Beneficiaries Association Trust.

6 unchanged sentences

Benefits for these plans are generally based on years of service and annual compensation.

Following is a reconciliation of the beginning and ending balances of the benefit obligation and fair value of plan assets as of November 27, 2021 and November 28, 2020 :

Following is a reconciliation of the beginning and ending balances of the benefit obligation and fair value of plan assets as of December 3, 2022 and November 27, 2021 :

Pension Benefits

9 unchanged sentences

Interest cost

11,738  

Participant contributions

4 unchanged sentences

( 3,630 )  

( 5,395 )  

Settlement payments

61 unchanged sentences

$ 104,439  

1 Actuarial loss in 

2021 and actuarial loss in 

2020 for the U.S.

1 Actuarial gain in 

2022 and 2021 for the U.S.

Plans is primarily due to assumption changes.

Actuarial loss in 

2021 and actuarial loss in 

2020 for the Non-U.S.

Actuarial gain in 

2022 and 2021 for the Non-U.S.

Plans are due to both assumption changes and plan experience.

48 unchanged sentences

pension and other postretirement plans was $ 289,049  at 

November 27, 2021 and $ 418,019 at November 28, 2020 .

December 3, 2022 and $ 384,124 at November 27, 2021 .

The accumulated benefit obligation of the non-U.S.

pension plans was $ 148,927 at 

November 27, 2021 and $ 239,572 at November 28, 2020 .

The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of November 27, 2021 and November 28, 2020 :

December 3, 2022 and $ 228,713 at November 27, 2021 .

The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of December 3, 2022 and November 27, 2021 :

Pension Benefits and Other Postretirement Benefits

6 unchanged sentences

11,350  

84,239  

The following amounts relate to pension plans with projected benefit obligations in excess of plan assets as of November 27, 2021 and November 28, 2020 :

The following amounts relate to pension plans with projected benefit obligations in excess of plan assets as of December 3, 2022 and November 27, 2021 :

Pension Benefits and Other Postretirement Benefits

22 unchanged sentences

Components of net periodic benefit cost and other supplemental information for the years ended 

November 27, 2021, November 28, 2020, and November 30, 2019 are as follows:

December 3, 2022, November 27, 2021, and November 28, 2020 are as follows:

Pension Benefits

6 unchanged sentences

11,738  

14,691  

Expected return on assets

10 unchanged sentences

Actuarial loss

( 3,445 )  

Curtailment loss

55 unchanged sentences

0.00 %  

1  Under the U.S.

pension plan, the compensation amount was locked-in as of May 31, 2011 and thus the benefit no longer includes compensation increases.

The 4.50 percent rate for 2020 and 2019 is for the supplemental executive retirement plan only;

for 2021, there is no compensation increase as subsequent to November 27, 2021, there were no active employees in the supplemental executive retirement plan.

The 4.50 percent rate for 2020 is for the supplemental executive retirement plan only;

for and since 2021, there has been 

no compensation increase as subsequent to November 27, 2021, there were no active employees in the supplemental executive retirement plan.

The discount rate assumption is determined using an actuarial yield curve approach, which results in a discount rate that reflects the characteristics of the plan.

3 unchanged sentences

The discount rate for the U.S.

pension plan was 2.76 percent at November 27, 2021 , 2.53 percent at 

pension plan was 5.36 percent at December 3, 2022 , 2.76 percent at 

November 27, 2021 and 2.53 percent at November 28, 2020 .

1 unchanged sentence

A discount rate change of 0.5 percentage points at 

November 27, 2021 would impact U.S.

December 3, 2022 would impact U.S.

pension and other postretirement plan (income) expense by approximately ($ 11 ) (pre-tax) in fiscal 2023.

3 unchanged sentences

The expected long-term rate of return on plan assets assumption for the U.S.

pension plan was 7.25  percent in 2021  and 7.50 percent in 

2020 and 2019 . Our expected long-term rate of return on U.S.

pension plan was 7.00 percent in 2022 , 

7.25 percent in 

2021 and 7.50 in 

2020 . Our expected long-term rate of return on U.S.

plan assets was based on our target asset allocation assumption of 55 percent equities and 45 percent fixed-income.

6 unchanged sentences

The expected long-term rate of return on plan assets assumption for non-U.S.

pension plans was a weighted-average of 6.15  percent in 

2021 compared to 6.23  percent in 

pension plans was a weighted-average of 3.49 percent in 

2022 compared to 6.15 percent in 

2021 and 6.23  percent in 2020 .

3 unchanged sentences

pension plans are in the United Kingdom and Germany.

The expected long-term rate of return on plan assets for the United Kingdom was 6.75  percent and the expected long-term rate of return on plan assets for Germany was 5.50  percent.

The expected long-term rate of return on plan assets for the United Kingdom was 2.50 percent and the expected long-term rate of return on plan assets for Germany was 4.50 percent.

Management, in conjunction with our external financial advisors, uses actual historical returns of the asset portfolio to assess the reasonableness of the expected rate of return for each plan.

36 unchanged sentences

11.7 %  

1 Negative cash for 

2020 represents unsettled pending trades within an investment that are classified in cash and cash equivalents until settled.

Plan Asset Management

33 unchanged sentences

The following table presents plan assets categorized within a three -level fair value hierarchy as described in Note 13.

November 27, 2021

December 3, 2022

Pension Plans

3 unchanged sentences

126,114  

23,547  

149,661  

Total categorized in the fair value hierarchy

14 unchanged sentences

$ 141,908  

$ 216,623  

Other Postretirement Benefits

3 unchanged sentences

$ 119,446  

$ 120,782  

November 27, 2021

4 unchanged sentences

164,319  

144,046  

33,391  

Total categorized in the fair value hierarchy

1 unchanged sentence

409,811  

398,009  

Other investments measured at NAV 1

$ 38,336  

$ 359,468  

$ 398,403  

Pension Plans

3 unchanged sentences

54,277  

57,765  

Total categorized in the fair value hierarchy

16 unchanged sentences

The definitions of fair values of our pension and other postretirement benefit plan assets at 

November 27, 2021 and November 28, 2020 by asset category are as follows:

December 3, 2022 and November 27, 2021 by asset category are as follows:

Equities —Primarily publicly traded common stock for purposes of total return and to maintain equity exposure consistent with policy allocations.

11 unchanged sentences

Fair values are the cash balances as reported by the Trustees of the plans.

The following is a roll forward of the Level 3 investments of our pension and postretirement benefit plan assets during the years ended November 27, 2021 and November 28, 2020 :

The following is a roll forward of the Level 3 investments of our pension and postretirement benefit plan assets during the years ended December 3, 2022 and November 27, 2021 :

Pension Plans

Level 3 balance at beginning of year

Net transfers into / (out of) level 3

16,564  

Purchases, sales, issuances and settlements, net

1 unchanged sentence

Level 3 balance at end of year

$ 45,251  

Pension Plans

1 unchanged sentence

Net transfers into / (out of) level 3

( 43 )  

Net (losses)/gains

Currency change effect

9 unchanged sentences

( 1,122 )  

Net (losses)/gains

( 12,924 )  

5 unchanged sentences

United States

$ 63,718  

$ 14,989  

$ 20,328  

188,210  

201,862  

138,028  

$ 251,928  

$ 216,851  

$ 158,356  

Components of the provision for income tax expense (benefit)

$ 12,181  

$ 10,310  

$ 5,243  

63,750  

57,801  

56,542  

79,320  

70,376  

63,105  

( 6,891 )  

( 1,767 )  

( 350 )  

( 8,517 )  

( 102 )  

( 2,134 )  

( 7,343 )  

$ 77,186  

$ 63,033  

$ 41,921  

Reconciliation of effective income tax

1 unchanged sentence

federal income tax rate

$ 52,760  

$ 45,539  

$ 33,255  

State income taxes, net of federal benefit

1 unchanged sentence

Foreign operations

19,673  

Executive compensation over $1.0 million

1 unchanged sentence

Change in valuation allowance

( 9,572 )  

Research and development tax credit

( 927 )  

( 993 )  

Foreign-derived intangible income

( 2,786 )  

( 2,617 )  

Global intangible low-taxed income

2 unchanged sentences

Contingency reserve

( 2,139 )  

Total income tax expense

$ 77,186  

$ 63,033  

$ 41,921  

Deferred income tax balances at each year-end related to:

16 unchanged sentences

28,840  

27,410  

Gross deferred tax assets

19 unchanged sentences

Valuation allowances primarily relate to foreign net operating loss carryforwards and branch foreign tax credit carryforwards where the future potential benefits do not meet the more-likely-than- not realization test.

The decrease in the valuation allowance is primarily related to a decrease in foreign net operating losses for which the Company does not expect to receive a full tax benefit.

The increase in the valuation allowance is primarily related to a decrease in foreign net operating losses for which the Company does not expect to receive a full tax benefit.

Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those deferred tax assets and liabilities are expected to be realized or settled.

9 unchanged sentences

While non-U.S.

operations have been profitable overall, there are cumulative tax losses of $ 85,273 in various countries.

operations have been profitable overall, there are cumulative tax losses of $ 77,315  in various countries.

These tax losses can be carried forward to offset the income tax liabilities on future income in these countries.

Cumulative tax losses of $ 63,592 can be carried forward indefinitely, while the remaining $ 21,680 of tax losses must be utilized during 2022 to 2039.

Cumulative tax losses of $ 58,762  can be carried forward indefinitely, while the remaining $ 18,553  of tax losses must be utilized during 2023  to 2040.

has a branch foreign tax credit carryforward of $ 5,042 .

3 unchanged sentences

Balance at beginning of year

$ 13,281  

$ 14,569  

Tax positions related to the current year:

Tax positions related to prior years:

( 1,019 )  

Lapses in applicable statutes of limitation

( 1,034 )  

Balance at end of year

$ 17,582  

$ 13,281  

Included in the balance of unrecognized tax benefits as of 

November 27, 2021 and November 28, 2020 are potential benefits of $ 8,888  and $ 9,125  respectively, that, if recognized, would affect the effective tax rate.

December 3, 2022 and November 27, 2021 are potential benefits of $ 12,663  and $ 8,888  respectively, that, if recognized, would affect the effective tax rate.

We report accrued interest and penalties related to unrecognized tax benefits in income tax expense.

For the year ended November 27, 2021 , we recognized a net benefit for interest and penalties of $ 703  relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $ 2,817 as of November 27, 2021 .

For the year ended December 3, 2022 , we recognized a net benefit for interest and penalties of $ 2,760  relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $ 6,275 as of December 3, 2022 .

For the year ended November 27, 2021 , we recognized a net benefit for interest and penalties of $ 703  relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $ 2,817  as of November 27, 2021 .

2 unchanged sentences

We are no longer subject to U.S.

federal tax examination for years prior to 2018 or Swiss income tax examination for years prior to 2018.

federal tax examination for years prior to 2019  or Swiss income tax examination for years prior to 2018.

During the second quarter of 2016, H.B.

4 unchanged sentences

Financial Instruments

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.

As a result of being a global enterprise foreign currency exchange rates and fluctuations in those rates may affect the Company's net investment in foreign subsidiaries and 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, interest rate swaps and net investment hedges 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.

9 unchanged sentences

Cash Flow Hedges

As of November 27, 2021 , 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 November 27, 2021 , the combined fair value of the swaps was an asset of $ 14,496  and was included in other assets in the Consolidated Balance Sheets.

October 20, 2017, we entered into four cross-currency swap agreements to convert a notional amount of $ 267,860 of foreign currency denominated intercompany loans into U.S.

dollars, which matured on October 20, 2022. 

The swaps were designated as cash flow hedges for accounting treatment.

2 unchanged sentences

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 $ 3,483  as of November 27, 2021 .

The estimated net amount of the existing gain that is reported in accumulated other comprehensive income (loss) as of 

November 27, 2021 that is expected to be reclassified into earnings within the next twelve months is $ 3,843 .

As of November 27, 2021 , 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 November 27, 2021 :

Fiscal Year of

Interest Rate

Notional Value

3.00 %  

$ 267,860  

$ 14,496  

5.1803 %  

Any difference in the calculation represents hedge ineffectiveness. 

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.

1 unchanged sentence

 On October 20, 2017, we entered into interest rate swap agreements to convert $ 1,050,000 , which 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.

See Note 7 for further discussion on the issuance of our Term Loan B.

The combined fair value of the interest rate swaps was a liability of $ 12,366 at 

November 27, 2021 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.

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.

These interest rate swap agreements matured on October 20, 2022 and we have no interest rate swap agreements on our Term Loan B as of December 3, 2022 . 

The amounts of pretax gains (losses) recognized in comprehensive income related to derivative instruments designated as cash flow hedges are as follows:

November 27, 2021

December 3, 2022

November 27, 2021

1 unchanged sentence

Cross-currency swap contracts

$ ( 3,536 )  

$ ( 4,554 )  

$ 6,307  

Interest rate swap contracts

$ 13,148  

$ 20,109  

Net investment hedges

$ ( 54,040 )  

Fair Value Hedges

2 unchanged sentences

See Note 7 for further discussion on the issuance of our Public Notes.

The combined fair value of the interest rate swaps was a liabilit y of $ 10,539 at 

November 27, 2021 , and was included in other liabilities in the Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges.

These interest rate swap agreements mature on October 15, 2028.

The combined fair value of the interest rate swaps was a liabilit y of $ 42,542  

December 3, 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.

6 unchanged sentences

The remaining swap liability will be accounted for as a discount on long-term debt and will be amortized to interest expense over the remaining life of the Public Notes of seven years.

Net Investment Hedges

On October 17, 2022, we entered into a float-to-float cross-currency interest rate swap agreement with a notional amount of €307,173 maturing in October 2028.

On October 20, 2022, we entered into fixed-to-fixed cross-currency interest rate swap agreements for a total notional amount of €300,000 with tranches maturing in August 2025, August 2026 and February 2027.

As of December 3, 2022, the combined fair value of the swaps was a liability of $ 54,046 and was included in other liabilities in the Consolidated Balance Sheets.

The cross-currency interest rate swaps hedge a portion of the Company’s investment in Euro denominated foreign subsidiaries.

The swaps are designated as net investment hedges for accounting treatment.

The net gains or losses attributable to changes in spot exchange rates are recorded in the cumulative translation adjustment within other comprehensive income (loss).

The gains or losses are reclassified into earnings upon a liquidation event or deconsolidation of the foreign subsidiary.

Any ineffective portions of net investment hedges are reclassified from accumulated other comprehensive income (loss) into earnings during the period of change.

The amount in accumulated other comprehensive income (loss) related to net investment hedge cross-currency swaps was a loss of $ 40,743 as of December 3, 2022 .

In 2022, the Company did not reclassify any gains or losses into earnings from net investment hedges and we do not expect to reclassify any such gain or loss into earnings within the next twelve months.

No amounts related to net investment hedges have been excluded from the assessment of hedge effectiveness.

Derivatives Not Designated As Hedging Instruments

4 unchanged sentences

See Note 13 for fair value amounts of these derivative instruments.

As of November 27, 2021, we had forward foreign currency contracts maturing betwee n November 29, 2021 and September 13, 2022.

As of December 3, 2022 , we had forward foreign currency contracts maturing betwee n December 5, 2022 and November 21, 2023.

The mark-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 (losses) recognized in other income, net related to derivative instruments not designated as hedging instruments are as follows:

November 27, 2021

December 3, 2022

November 27, 2021

1 unchanged sentence

Foreign currency forward contracts

$ 5,711  

$ ( 357 )  

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 November 27, 2021 , there were no significant concentrations of credit risk.

As of December 3, 2022 , there were no significant concentrations of credit risk.

Fair Value Measurements

9 unchanged sentences

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 November 27, 2021 and November 28, 2020 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of December 3, 2022 and November 27, 2021 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

Fair Value Measurements

Marketable securities

$ 4,013  

Foreign exchange contract assets

Cross-currency cash flow hedge assets

10,282  

Foreign exchange contract liabilities

$ 4,570  

Interest rate swaps, cash flow hedge liabilities

Interest rate swaps, fair value hedge liabilities

Contingent consideration liability

42,542  

Net investment hedge

54,046  

Contingent consideration liabilities

Fair Value Measurements

Marketable securities

$ 2,079  

Foreign exchange contract assets

Cross-currency cash flow hedge assets

14,496  

Foreign exchange contract liabilities

$ 6,082  

Cross-currency cash flow hedge liabilities

12,366  

Interest rate swaps, cash flow hedge liabilities

10,539  

Contingent consideration liability

See Note 7 for discussion regarding the fair value of debt.

We use the income approach in calculating the fair value of our contingent consideration liability using a real option model with Level 3 inputs.

The expected cash flows are affected by various significant judgments and assumptions, including revenue growth rates, volatility and discount rate, which are sensitive to change.

Estimates of fair value are inherently uncertain and represent only management’s reasonable expectation regarding future developments.

These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. The valuation of our contingent consideration liability related to the acquisition of D.H.M.

resulted in a fair value of $ 8,100  as of November 27, 2021 .

The valuation of our contingent consideration liability related to the acquisitions of ZKLT and TissueSeal was $ 1,477  and $ 500 , respectively, as of December 3, 2022 .

As of December 3, 2022 , the agreement provisions for the D.H.M.

contingent consideration were met, and as a result, $ 8,122 was paid during 2022.

Adjustments to the fair value of contingent consideration are recorded to selling, general and administrative expenses in the Statement of Income. See Note 2 for further discussion regarding our acquisitions.

1 unchanged sentence

Level 3 balance at beginning of year

$ 8,100  

Payment of contingent consideration

1 unchanged sentence

Level 3 balance at end of year

$ 1,977  

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 

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.

See Note 7 for discussion regarding the fair value of debt.

Commitments and Contingencies

5 unchanged sentences

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 $ 6,603  and $ 8,099  as of November 27, 2021 and November 28, 2020 , respectively, for probable and reasonably estimable environmental remediation costs. Of the amount reserved, $ 3,333  and $ 3,703  as of November 27, 2021 and November 28, 2020 , 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.

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 $ 5,754  and $ 6,603  as of December 3, 2022 and November 27, 2021 , respectively, for probable and reasonably estimable environmental remediation costs. Of the amount reserved, $ 2,789  and $ 3,333  as of December 3, 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.

38 unchanged sentences

Hygiene, Health and Consumable Adhesives

$ 1,695,934  

$ 1,472,756  

$ 1,332,786  

Engineering Adhesives

1,532,639  

1,371,756  

1,088,313  

Construction Adhesives

Corporate Unallocated 1

520,610  

433,519  

369,170  

$ 3,749,183  

$ 3,278,031  

$ 2,790,269  

Segment operating income

Hygiene, Health and Consumable Adhesives

$ 165,786  

$ 138,366  

$ 130,789  

Engineering Adhesives

168,873  

135,913  

103,974  

Construction Adhesives

22,989  

14,148  

11,148  

Total segment

357,648  

288,427  

245,911  

Corporate Unallocated 1

( 34,930 )  

( 35,815 )  

$ 322,718  

$ 252,612  

$ 218,317  

Depreciation and amortization

Hygiene, Health and Consumable Adhesives

$ 46,374  

$ 45,919  

$ 44,329  

Engineering Adhesives

58,307  

61,082  

58,102  

Construction Adhesives

41,713  

35,002  

35,811  

Corporate Unallocated 1

$ 146,976  

$ 143,174  

$ 138,817  

Total assets 2

 Hygiene, Health and Consumable Adhesives

 Engineering Adhesives

 Construction Adhesives

 Corporate

Hygiene, Health and Consumable Adhesives

$ 1,488,277  

$ 1,370,924  

Engineering Adhesives

1,610,015  

1,710,000  

Construction Adhesives

987,610  

810,824  

377,727  

382,782  

$ 4,463,629  

$ 4,274,530  

Capital expenditures

 Hygiene, Health and Consumable Adhesives

 Engineering Adhesives

 Construction Adhesives

 Corporate

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.

Hygiene, Health and Consumable Adhesives

$ 110,877  

$ 60,164  

Engineering Adhesives

( 2,302 )  

Construction Adhesives

( 5,772 )  

27,161  

23,519  

$ 129,964  

$ 96,089  

1 Consistent with our internal management reporting, Corporate Unallocated amounts in the tables above include net revenue and charges that are not allocated to the Company’s reportable segments.

2 Segment assets include primarily inventory, accounts receivable, property, plant and equipment, goodwill, intangible assets and other miscellaneous assets.

2 unchanged sentences

Segment operating income

$ 322,718  

$ 252,612  

$ 218,317  

Other income, net

12,952  

32,855  

15,398  

Interest expense

( 91,521 )  

( 78,092 )  

Interest income

11,417  

Income before income taxes and income from equity method investments

$ 251,928  

$ 216,851  

$ 158,356  

Financial information about geographic areas

United States

$ 1,692,903  

$ 1,421,623  

$ 1,248,495  

462,587  

433,998  

351,204  

419,141  

409,193  

330,755  

Countries with more than 10 percent of total

2,574,631  

2,264,814  

1,930,454  

All other countries with less than 10 percent of total

1,174,552  

1,013,217  

859,815  

$ 3,749,183  

$ 3,278,031  

$ 2,790,269  

Property, Plant and Equipment, net

United States

$ 375,353  

$ 331,864  

$ 297,046  

107,903  

120,548  

131,879  

101,563  

96,300  

99,513  

All other countries with less than 10 percent of total

148,848  

146,655  

142,306  

$ 733,667  

$ 695,367  

$ 670,744  

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:

November 27, 2021

December 3, 2022

Hygiene, Health and

Consumable Adhesives

$ 1,003,179  

$ 630,484  

$ 411,951  

$ 2,045,614  

471,299  

478,573  

78,773  

1,028,645  

221,456  

423,582  

29,886  

674,924  

$ 1,695,934  

$ 1,532,639  

$ 520,610  

$ 3,749,183  

November 27, 2021

1 unchanged sentence

Consumable Adhesives

$ 826,172  

$ 504,626  

$ 384,576  

$ 1,715,374  

425,324  

470,466  

22,156  

917,946  

221,260  

396,664  

26,787  

644,711  

$ 1,472,756  

$ 1,371,756  

$ 433,519  

$ 3,278,031  

November 28, 2020

1 unchanged sentence

Consumable Adhesives

Subsequent Events

On January 11, 2022, we completed the acquisition of Fourny NV for a base purchase price of approximately $ 18,200 .

Fourny NV, headquartered in Willebroek, Belgium, is a manufacturer of construction and automotive adhesives supplying customers in Europe and China.

The acquisition will be included in our Construction Adhesives operating segment.

On November 

30, 2021, we completed the acquisition of certain assets of Tissue Seal, LLC for a base purchase price of $ 24,750 .

Tissue Seal, LLC, headquartered in Ann Arbor, Michigan, is a manufacturer of topical tissue adhesives and sutures.

The acquisition will be included in our Hygiene, Health and Consumable Adhesives operating segment.

$ 736,681  

$ 430,866  

$ 325,622  

$ 1,493,169  

388,271  

347,417  

20,506  

756,194  

207,834  

310,030  

23,042  

540,906  

$ 1,332,786  

$ 1,088,313  

$ 369,170  

$ 2,790,269  

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data