What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-01-23 compared with 2024-01-24 · 979 added, 1574 removed, 1154 unchanged (69% of the section changed)

3 unchanged sentences

Fuller Company

 Opinion on the Financial Statements

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

Fuller Company and subsidiaries (the Company) as of December 2, 2023 and December 3, 2022, the related consolidated statements of income, comprehensive income, total equity and cash flows for each of the three years in the period ended December 2, 2023, 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 2, 2023 and December 3, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 2, 2023, in conformity with U.S.

Fuller Company and subsidiaries (the Company) as of November 30, 2024 and December 2, 2023, the related consolidated statements of income, comprehensive income (loss), total equity and cash flows for each of the three years in the period ended November 30, 2024, 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 30, 2024 and December 2, 2023, and the results of its operations and its cash flows for each of the three years in the period ended November 30, 2024, 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 December 2, 2023, 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, 2024, 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 November 30, 2024, 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 23, 2025, 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 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.

7 unchanged sentences

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

2 unchanged sentences

Description of the Matter

At December 2, 2023, the Company had goodwill of approximately $432.8 million related to the Construction Adhesives reporting unit.

At November 30, 2024, the Company had goodwill of approximately $406 million related to the Construction Adhesive reporting unit.

As discussed in the notes to 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, 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

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's goodwill impairment review process, including controls over management’s review of the significant assumptions described above. 

To test the estimated fair value of the Construction Adhesive reporting unit, we performed audit procedures that included, among others, assessing the valuation methodology used by management and testing the significant assumptions discussed above, as well as the underlying data used by the Company in its analysis.

For example, we compared the significant assumptions used by management in the prospective financial information to current industry, market and economic trends as well as other relevant factors.

We assessed the reasonableness of the forecasted future revenue growth rate and EBITDA margins rate by comparing the forecasts to historical results.

For example, we compared the significant assumptions used by management in the prospective financial information to current industry trends as well as other relevant factors.

We assessed the reasonableness of the forecasted future revenue growth rate and EBITDA margins rates by comparing the forecasts to historical results and previous assumptions.

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.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2019.

Minneapolis, Minnesota

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

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

Fuller Company

1 unchanged sentence

We have audited H.B.

Fuller Company and subsidiaries’

internal control over financial reporting as of December 2, 2023, 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).

Fuller Company and subsidiaries’ internal control over financial reporting as of November 30, 2024, 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 December 3, 2023, 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 2, 2023 and December 3, 2022, the related consolidated statements of income, comprehensive income, total equity and cash flows for each of the three years in the period ended December 2, 2023, and the related notes, and our report dated January 24, 2024 expressed an unqualified opinion thereon.

Fuller Company and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of November 30, 2024, 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 30, 2024 and December 2, 2023, the related consolidated statements of income, comprehensive income (loss), total equity and cash flows for each of the three years in the period ended November 30, 2024, and the related notes, and our report dated January 23, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting 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.

5 unchanged sentences

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

2 unchanged sentences

Minneapolis, Minnesota

 January 24, 2024

January 23, 2025

CONSOLIDATED STATEMENTS OF INCOME

1 unchanged sentence

(In thousands, except per share amounts)

$ 3,510,934  

$ 3,749,183  

$ 3,278,031  

Cost of sales

( 2,502,037 )  

( 2,785,484 )  

( 2,432,709 )

1,008,897  

963,699  

845,322  

Selling, general and administrative expenses

( 653,760 )  

( 640,981 )  

Other income, net

12,952  

32,855  

Other (expense) income, net

Interest expense

( 134,602 )  

( 91,521 )  

Interest income

Income before income taxes and income from equity method investments

234,160  

251,928  

216,851  

Income tax expense

( 93,529 )  

( 77,186 )  

Income from equity method investments

Net income including non-controlling interest

144,988  

180,407  

161,475  

Net income attributable to non-controlling interest

( 82 )  

( 94 )  

Net income attributable to H.B.

$ 144,906  

$ 180,313  

$ 161,393  

Earnings per share attributable to H.B.

Fuller common stockholders:

$ 2.67  

$ 3.37  

$ 3.05  

$ 2.59  

$ 3.26  

$ 2.97  

Weighted-average common shares outstanding:

54,332  

53,580  

52,887  

55,958  

55,269  

54,315  

Dividends declared per common share

$ 0.805  

$ 0.738  

$ 0.665  

See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Fuller Company and Subsidiaries

1 unchanged sentence

Net income including non-controlling interest

Other comprehensive income (loss)

Other comprehensive (loss) income

Foreign currency translation

3 unchanged sentences

Net investment hedges, net of tax

Other comprehensive income (loss)

Other comprehensive (loss) income

Comprehensive income (loss)

7 unchanged sentences

Cash and cash equivalents

$ 179,453  

$ 79,910  

$ 169,352 $ 179,453

Trade receivables, net

577,932  

607,365  

442,040  

491,781  

558,336 577,932

467,498 442,040

Other current assets

112,678  

120,319  

104,019 112,678

Total current assets

1,312,103  

1,299,375  

1,299,205 1,312,103

Property, plant and equipment, net

824,655  

733,667  

1,486,512  

1,392,627  

881,927 824,655

1,532,221 1,486,512

Other intangibles, net

729,140  

702,092  

371,165  

335,868  

$ 4,723,575  

$ 4,463,629  

770,226 729,140

449,665 371,165

$ 4,933,244 $ 4,723,575

Liabilities, non-controlling interest and total equity

1 unchanged sentence

Notes payable

$ 1,841  

$ 28,860  

$ 587 $ 1,841

Trade payables

439,700  

460,669  

491,435 439,700

Accrued compensation

95,680  

108,328  

106,005 95,680

Income taxes payable

47,688  

18,530  

24,225 47,688

Other accrued expenses

107,902  

89,345  

97,038 107,902

Total current liabilities

692,811  

705,732  

719,290 692,811

Long-term debt, net of current maturities

1,836,590  

1,736,256  

2,010,052 1,836,590

Accrued pension liabilities

50,189  

52,561  

51,755 50,189

Other liabilities

388,072  

358,286  

322,299 388,072

Total liabilities

2,967,662  

2,852,835  

3,103,396 2,967,662

Commitments and contingencies (Note 14)

Fuller stockholders' equity:

Preferred stock ( no shares outstanding) Shares authorized –

Common stock, par value $ 1.00 per share, Shares authorized –

160,000,000 , Shares outstanding –

54,092,987 and 53,676,576 for 2023 and 2022, respectively

54,093  

53,677  

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 – 54,657,103 and 54,092,987 for 2024 and 2023, respectively

54,657 54,093

Additional paid-in capital

301,485  

266,491  

322,636 301,485

Retained earnings

1,842,507  

1,741,359  

1,924,761 1,842,507

Accumulated other comprehensive loss

( 442,880 )  

( 473,395 ) ( 442,880 )

Fuller stockholders' equity

1,755,205  

1,610,170  

1,828,659 1,755,205

Non-controlling interest

1,755,913  

1,610,794  

1,829,848 1,755,913

Total liabilities, non-controlling interest and total equity

$ 4,723,575  

$ 4,463,629  

$ 4,933,244 $ 4,723,575

See accompanying Notes to Consolidated Financial Statements.

6 unchanged sentences

Balance at November 27, 2021

Comprehensive income

Comprehensive loss

Stock option exercises

1 unchanged sentence

Repurchases of common stock

Balance at November 27, 2021

Comprehensive income (loss)

Balance at December 3, 2022

Comprehensive income

Stock option exercises

6 unchanged sentences

Repurchases of common stock

Balance at December 2, 2023

Balance at November 30, 2024

CONSOLIDATED STATEMENTS of CASH FLOWS

3 unchanged sentences

Net income including non-controlling interest

$ 144,988  

$ 180,407  

$ 161,475  

$ 130,395 $ 144,988 $ 180,407

Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:

80,327  

72,593  

72,106  

79,514  

74,383  

71,068  

91,054 80,327 72,593

83,656 79,514 74,383

Deferred income taxes

( 25,114 )  

( 15,230 )  

16,192  

Income from equity method investments, net of dividends received

Loss (gain) on sale of assets

( 1,195 )  

( 36,186 ) ( 25,114 ) ( 15,230 )

(Income) loss from equity method investments, net of dividends received

( 537 ) 1,259 ( 9 )

Foreign currency remeasurement

9,724 ( 28,011 ) 6,213

Loss on impairment of assets held for sale

Loss on impairment of equity investment

Gain from insurance proceeds

( 4,871 ) - -

(Gain) loss on disposal of assets

( 501 ) 59 ( 1,195 )

Share-based compensation

19,911  

24,368  

22,366  

21,914 19,911 24,368

Pension and other postretirement benefit plan contributions

( 4,346 )  

( 3,009 )  

( 2,909 ) ( 4,346 ) ( 3,009 )

Pension and other postretirement benefit plan income

( 18,591 )  

( 24,021 )  

( 14,444 ) ( 18,591 ) ( 24,021 )

Debt issuance cost write-off

Loss on fair value adjustment on contingent consideration liabilities

(Gain) loss on fair value adjustment on contingent consideration liabilities

( 500 ) 2,893 -

Change in assets and liabilities, net of effects of acquisitions:

Trade receivables, net

68,721  

( 24,753 )  

72,576  

( 55,772 )  

( 7,927 )  

46,499  

10,749 68,721 ( 24,753 )

( 30,099 ) 72,576 ( 55,772 )

( 17,465 ) ( 7,927 ) 46,499

Trade payables

( 57,752 )  

( 22,629 )  

176,337  

47,915 ( 57,752 ) ( 22,629 )

Accrued compensation

( 13,836 )  

27,741  

12,653 ( 13,836 ) 1,135

Other accrued expenses

( 3,070 )  

6,008 ( 3,070 ) 6,303

Income taxes payable

41,190  

( 12,873 )  

( 23,090 ) 41,190 ( 12,873 )

Other liabilities

22,918  

( 28,011 )  

108,566  

( 30,262 ) 22,918 4,104

Net cash provided by operating activities

378,398  

256,514  

213,317  

302,437 378,398 256,514

Cash flows from investing activities:

Purchased property, plant and equipment

( 119,137 )  

( 129,964 )  

( 139,238 ) ( 119,137 ) ( 129,964 )

Purchased businesses, net of cash acquired

( 205,093 )  

( 250,807 )  

( 273,863 ) ( 205,093 ) ( 250,807 )

Proceeds from sale of property, plant and equipment

1,152 5,029 1,556

Proceeds from insurance recoveries

Cash received from government grant

Cash outflow related to government grant

Net cash used in investing activities

( 319,201 )  

( 375,287 )  

( 407,078 ) ( 319,201 ) ( 375,287 )

Cash flows from financing activities:

Proceeds from issuance of long-term debt

2,233,300  

335,000  

1,932,900 2,233,300 335,000

Repayment of long-term debt

( 2,126,450 )  

( 159,500 )  

( 1,764,870 ) ( 2,126,450 ) ( 159,500 )

Payment of debt issue costs

( 10,214 )  

( 600 )  

( 3,493 ) ( 10,214 ) ( 600 )

Net (payment on) proceeds from notes payable

( 28,674 )  

( 1,219 ) ( 28,674 ) 3,455

Dividends paid

( 43,395 )  

( 39,207 )  

( 47,598 ) ( 43,395 ) ( 39,207 )

Contingent consideration payment

( 1,477 )  

( 5,000 )  

- ( 1,477 ) ( 5,000 )

Proceeds from stock options exercised

14,619  

30,122  

32,325  

35,927 14,619 30,122

Repurchases of common stock

( 2,567 )  

( 3,950 )  

Net cash provided by (used in) financing activities

35,142  

160,320  

( 39,558 ) ( 2,567 ) ( 3,950 )

Net cash provided by financing activities

112,089 35,142 160,320

Effect of exchange rate changes on cash and cash equivalents

( 23,423 )  

( 17,549 ) 5,204 ( 23,423 )

Net change in cash and cash equivalents

99,543  

18,124  

( 10,101 ) 99,543 18,124

Cash and cash equivalents at beginning of year

79,910  

61,786  

100,534  

179,453 79,910 61,786

Cash and cash equivalents at end of year

$ 179,453  

$ 79,910  

$ 61,786  

$ 169,352 $ 179,453 $ 79,910

Supplemental disclosure of cash flow information:

Dividends paid with company stock

Cash paid for interest, net of amount capitalized of $ 1,769 , $ 1,518 , and $ 905 for the years ended December 2, 2023, December 3, 2022 and November 27, 2021, respectively

$ 136,959  

$ 83,527  

$ 62,753  

$ 404 $ 363 $ 348

Cash paid for interest, net of amount capitalized of $ 1,859 , $ 1,769 , and $ 1,518 for the years ended November 30, 2024, December 2, 2023 and December 3, 2022, respectively

$ 134,743 $ 136,959 $ 83,527

Cash paid for income taxes, net of refunds

$ 71,261  

$ 73,449  

$ 72,955  

$ 123,091 $ 71,261 $ 73,449

See accompanying Notes to Consolidated Financial Statements.

4 unchanged sentences

Nature of Business

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

We have 

three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives.

 In 2023 , as a percentage of total net revenue by operating segment, Hygiene, Health and Consumable Adhesives accounted for 46  percent, Engineering Adhesives 41  percent and Construction Adhesives 13  percent.

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, Asia Pacific, India, the Middle East and Africa.

We have three reportable segments:

Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives.

In 2024 , as a percentage of total net revenue by operating segment, Hygiene, Health and Consumable Adhesives accounted for 43 percent, Engineering Adhesives 41 percent and Construction Adhesives 16 percent.

Our Hygiene, Health and Consumable Adhesives operating segment produces and supplies a full range of specialty industrial adhesives such as thermoplastic, thermoset, reactive, water-based and solvent-based products for applications in various markets, including packaging (food and beverage containers, flexible packaging, consumer goods, package integrity and re-enforcement, and non-durable goods), converting (corrugation, folding carton, tape and label, paper converting, envelopes, books, multi-wall bags, sacks, and tissue and towel), nonwoven and hygiene (disposable diapers, feminine care and medical garments) and health and beauty.

Our Engineering Adhesives operating segment produces and supplies high performance industrial adhesives such as reactive, light cure, two -part liquids, polyurethane, silicone, film and fast cure products to the durable assembly (appliances and filters), performance wood (windows, doors and wood flooring) and textile (footwear and sportswear), transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery and insulating glass markets.

Our Engineering Adhesives operating segment produces and supplies high performance industrial adhesives such as reactive, light cure, two -part liquids, polyurethane, silicone, film and fast cure products to the durable assembly (appliances and filters), performance wood (windows, doors and wood flooring) and textile (footwear and sportswear), transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery and insulating glass markets.

Our Construction Adhesives operating segment includes products used for tile setting (adhesives, grouts, mortars, sealers and levelers), the commercial roofing industry (pressure-sensitive adhesives, tapes and sealants) and heating, ventilation and air conditioning and insulation applications (duct sealants, weather barriers and fungicidal coatings and block fillers).

This operating segment also includes caulks and sealants for the consumer market and professional trade, sold through retailers, primarily in Australia.

This operating segment also includes caulks and sealants for the consumer market and professional trade, sold through retailers, primarily in Australia.

Principles of Consolidation

7 unchanged sentences

In fiscal years 2024, 2023 and 2022 , this equity method investment was not significant as defined in Regulation S- X under the Securities Exchange Act of 1934.

As such, financial information as of 

December 2, 2023, December 3, 2022, and November 27, 2021 for Sekisui-Fuller Company, Ltd.

As such, financial information as of November 30, 2024, December 2, 2023, and December 3, 2022 for Sekisui-Fuller Company, Ltd.

is not required.

Our fiscal year ends on the Saturday closest to November 30.

Fiscal year-end dates were 

December 2, 2023, December 3, 2022, and November 27, 2021 for 2023, 2022 and 2021 , respectively. Every five or six years we have a 53rd  week in our fiscal year.

2022  was a 53 -week year.

Fiscal year-end dates were November 30, 2024, December 2, 2023, and December 3, 2022 for 2024, 2023 and 2022 , respectively.

Every five or six years we have a 53rd week in our fiscal year.

2022 was a 53 -week year.

Use of Estimates

Preparation of the Consolidated Financial Statements in conformity with U.S.

generally accepted accounting principles (“U.S.

GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

generally accepted accounting principles (“U.S.

GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Actual results could differ from those estimates.

16 unchanged sentences

The majority of our shipping and handling activities are performed prior to transfer of control of the goods to the customer.

For those arrangements where we provide shipping and handling services after control of the goods has transferred to the customer, we have elected the practical expedient allowed under Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 606 to account for these activities as a fulfillment cost rather than as a separate performance obligation.

Provisions for sales returns are estimated based on historical experience and are adjusted for known returns, if material.

Provisions for sales returns are estimated based on historical experience and are adjusted for known returns, if material.

Customer incentive programs (primarily volume purchase rebates) and arrangements such as cooperative advertising, slotting fees and buy-downs are recorded as a reduction of net revenue in accordance with ASC 606.

Customer incentives recorded in the Consolidated Statements of Income as a reduction of net revenue were $ 35,896 , $ 50,146  and $ 33,441  in 2023, 2022 and 2021 , respectively.

Customer incentives recorded in the Consolidated Statements of Income as a reduction of net revenue were $ 43,548 , $ 35,896 and $ 50,146 in 2024, 2023 and 2022 , respectively.

For certain products, consigned inventory is maintained at customer locations.

3 unchanged sentences

Cost of Sales

Cost of sales includes raw materials, container costs, direct labor, manufacturing overhead, freight costs and other less significant indirect costs related to the production of our products.

Cost of sales includes raw materials, container costs, direct labor, manufacturing overhead, freight costs and other less significant indirect costs related to the production of our products.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses include sales and marketing, research and development, technical and customer service, finance, legal, human resources, general management and similar expenses.

The income tax provision is computed based on income before income from equity method investments included in the Consolidated Statement of Income.

13 unchanged sentences

If estimates or assumptions used to complete the enterprise valuation and estimates of the fair value of the acquired assets and assumed liabilities significantly differed from assumptions made, the resulting difference could materially affect the fair value of net assets.

The calculation of the fair value of the tangible assets, including property, plant and equipment, utilizes the cost approach, which computes the cost to replace the asset, less accrued depreciation resulting from physical deterioration, functional obsolescence and external obsolescence. The calculation of the fair value of the identified intangible assets is determined using cash flow models following the income approach or a discounted market-based methodology approach.

Significant inputs include estimated revenue growth rates, gross margins, operating expenses and estimated attrition, royalty and discount rates. Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price.

The calculation of the fair value of the identified intangible assets is determined using cash flow models following the income approach or a discounted market-based methodology approach.

Significant inputs include estimated revenue growth rates, gross margins, operating expenses and estimated attrition, royalty and discount rates.

Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price.

Cash Equivalents

4 unchanged sentences

Restrictions on Cash

There were no restrictions on cash as of December 2, 2023  or December 3, 2022.

There were no restrictions on cash as of November 30, 2024 or December 2, 2023 .

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.

8 unchanged sentences

See Note 4 for further information.

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 $ 9,334  and $ 8,957  represent the cash surrender value of life insurance contracts as of December 2, 2023 and December 3, 2022 , respectively.

Inventories are recorded at cost 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 $ 9,814 and $ 9,334 represent the cash surrender value of life insurance contracts as of November 30, 2024 and December 2, 2023 , 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 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 

December 2, 2023  and November 27, 2021. 

The book value of the equity investments was $ 1,362  as of both 

December 2, 2023  and 

December 3, 2022 .

We recognized impairment of $ 339 and $ 303 for the years ended November 30, 2024 and December 3, 2022, respectively, and did not have any impairment of our equity investments for the year ended December 2, 2023 .

The book value of the equity investments was $ 1,023 and $ 1,362 as of November 30, 2024 and December 2, 2023 , respectively and are presented in Other assets in the Consolidated Balance Sheets.

Property, Plant and Equipment

3 unchanged sentences

Upon disposal, assets and related accumulated depreciation are removed.

Upon sale of an asset, the difference between the proceeds and remaining net book value is charged or credited to other income, net on the Consolidated Statements of Income.

Upon sale of an asset, the difference between the proceeds and remaining net book value is charged or credited to other (expense) income, net on the Consolidated Statements of Income.

Expenditures that add value or extend the life of the respective assets are capitalized, while expenditures that are typical recurring repairs and maintenance are expensed as incurred.

Interest costs associated with construction and implementation of property, plant and equipment of $ 1,769 , $ 1,518  and $ 905  were capitalized in 2023, 2022 and 2021 , respectively.

Interest costs associated with construction and implementation of property, plant and equipment of $ 1,859 , $ 1,769 and $ 1,518 were capitalized in 2024, 2023 and 2022 , respectively.

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.

1 unchanged sentence

The impairment test requires the comparison of the fair value of each reporting unit with its carrying amount, including goodwill.

In performing the impairment test, we determined the fair value of our reporting units through the income approach by using discounted cash flow (“DCF”) analyses.

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.

3 unchanged sentences

If the carrying value exceeds estimated fair value, an impairment charge is recorded for any excess of the carrying value over the estimated fair value.

Based on the analysis performed for our fiscal 

2023 annual impairment test, there were no indications of impairment for any of our reporting units.

Based on the analysis performed for our fiscal 2024 annual impairment test, there were no indications of impairment for any of our reporting units.

See Note 5 for further information.

13 unchanged sentences

Revenues and expenses are translated using average exchange rates during the year.

Foreign currency transaction gains and losses are included in other income, net in the Consolidated Statements of Income.

We consider a subsidiary’s sales price drivers, currency denomination of sales transactions and inventory purchases to be the primary indicators in determining a foreign subsidiary’s functional currency.

Foreign currency transaction gains and losses are included in other (expense) income, net in the Consolidated Statements of Income.

Our subsidiaries in certain European countries have a functional currency different than their local currency.

12 unchanged sentences

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

plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the impact of active management of the plan’s assets.

plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan.

Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the impact of active management of the plan’s assets.

Note 10 includes disclosure of assumptions employed in these measurements for both the non-U.S.

8 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 $ 3,147  and $ 2,888  at December 2, 2023 and December 3, 2022 , respectively.

The asset retirement obligation liability was $ 3,321 and $ 3,147 at November 30, 2024 and December 2, 2023 , respectively.

Environmental Costs

4 unchanged sentences

Contingent Consideration Liability

Concurrent with business acquisitions, we enter into agreements that require us to pay the sellers a certain amount based upon a formula related to the entity’s financial results.

The change in fair value of the contingent consideration liability is recorded in SG&A expenses in the Consolidated Statements of Income.

2 unchanged sentences

We use the straight-line attribution method to recognize compensation expense associated with share-based awards based on the fair value on the date of grant, net of the estimated forfeiture rate.

Expense is recognized over the requisite service period related to each award, which is the period between the grant date and the earlier of the award’s stated vesting term or the date the employee is eligible for early retirement based on the terms of the plan.

The fair value of stock options is estimated using the Black-Scholes option pricing model.

11 unchanged sentences

Net income attributable to H.B.

$ 144,906  

$ 180,313  

$ 161,393  

Weighted-average common shares –

54,332  

53,580  

52,887  

$ 130,256 $ 144,906 $ 180,313

Weighted-average common shares – basic

54,932 54,332 53,580

Equivalent shares from share-based compensation plans

Weighted-average common and common equivalent shares –

55,958  

55,269  

54,315  

1,697 1,626 1,689

Weighted-average common and common equivalent shares – diluted

56,629 55,958 55,269

Basic earnings per share

$ 2.67  

$ 3.37  

$ 3.05  

$ 2.37 $ 2.67 $ 3.37

Diluted earnings per share

$ 2.59  

$ 3.26  

$ 2.97  

Share-based compensation awards for 1,089,054 , 

707,197  and 1,535,503  shares for 2023, 2022 and 2021 , respectively, were excluded from the diluted earnings per share calculation because they were antidilutive.

$ 2.30 $ 2.59 $ 3.26

Share-based compensation awards for 853,398 , 1,089,054 and 707,197 shares for 2024, 2023 and 2022 , respectively, were excluded from the diluted earnings per share calculation because they were antidilutive.

Financial Instruments and Derivatives

5 unchanged sentences

For derivative instruments outstanding that were not designated as hedges for accounting purposes, the gains and losses related to mark-to-market adjustments were recognized as other income or expense in the income statement during the periods the derivative instruments were outstanding.

To manage exposure to currency rate movements on expected cash flows, the company may enter into cross-currency swap agreements. 

To manage exposure to currency rate movements on expected cash flows, the Company may enter into cross-currency swap agreements.

The Company manages interest expense using a mix of fixed and floating rate debt.

 To manage exposure to interest rate movements and to reduce borrowing costs, the company may enter into interest rate swap agreements.

To manage exposure to interest rate movements and to reduce borrowing costs, the Company may enter into interest rate swap agreements.

Changes in the fair values of derivatives are recorded in net earnings or other comprehensive income, based on the type of derivative, and whether the instrument is designated and effective as a hedge transaction.

2 unchanged sentences

We maintain master netting arrangements that allow us to net settle contracts with the same counterparties;

we do not elect to offset amounts in our Consolidated Balance Sheet. 

These arrangements generally do not call for collateral.

5 unchanged sentences

When additional paid-in capital is exhausted, the excess reduces retained earnings.

We indirectly repurchased 113,868 , 49,869  and 47,481  shares of common stock in 2023, 2022 and 2021 , respectively, through a net-settlement feature in connection with the statutory minimum tax withholding related to vesting of restricted stock.

We indirectly repurchased 93,102 , 113,868 and 49,869 shares of common stock in 2024, 2023 and 2022 , respectively, through a net-settlement feature in connection with the statutory minimum tax withholding related to vesting of restricted stock.

We repurchased 407,400 shares of common stock from our share repurchase program in 2024.

No shares were repurchased from our share repurchase program in 2023 and 2022.

Supplier Finance Program

We have agreements with third parties to provide supplier finance programs which facilitate participating suppliers' ability to finance payment obligations of the Company with designated third -party financial institutions.

Participating suppliers may, at their sole discretion, elect to finance one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions.

The Company has no economic interest in the sale of these suppliers’ receivables and no direct financial relationship with the financial institutions concerning these services.

The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under these arrangements.

The outstanding payment obligations that were confirmed as valid and remained outstanding as of November 30, 2024 were appro ximately $ 5,233 .

These obligations under the Company’s supplier finance programs are included in Accounts Payable in the Consolidated Balance Sheets, and the associated payments are reflected in the cash flows from operating activities section of the Consolidated Statements of Cash Flows.

The following table summarizes the outstanding obligations confirmed as valid under the Company’s supplier finance programs for the year ended November 30, 2024:

Confirmed obligations outstanding, beginning of year

Invoices confirmed during the year

Confirmed invoices paid during the year

Confirmed obligations outstanding, end of year

Business Interruption Insurance Proceeds

The company made insurance claims to recover lost margin and additional costs incurred in connection with a fire at our Tucker production facility in June 2022 and unprecedented freezing weather that impacted our Texas facilities in February 2021.

During the year ended November 30, 2024, the Company received business interruption insurance recovery payments of $ 2,393 , which have been recorded in selling, general and administrative expenses.

The insurance claims were fully settled in September 2024.

New Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update ("ASU") No.

2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses , which requires additional disclosure of the nature of expenses included in our Consolidated Financial Statements.

Our effective date of this ASU is our fiscal year ending December 2, 2028.

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

In December 2023, the FASB issued ASU No.

4 unchanged sentences

Our effective date of this ASU is our fiscal year ending November 28, 2026.

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

In November 2023, the FASB issued ASU 

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

In November 2023, the FASB issued ASU No.

2023 - 07, Segment Reporting (Topic 280 ):

3 unchanged sentences

Our effective date of this ASU is our fiscal year ending November 29, 2025.

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

In September 2022, the FASB issued ASU 

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

In September 2022, the FASB issued ASU No.

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

1 unchanged sentence

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. 

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

ASU 2022 - 04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the requirement on roll-forward information which is an annual requirement.

During the first quarter of our fiscal year ending November 30, 2024, we adopted ASU 2022 - 04.

See Supplier Finance Program for further information.

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

Acquisitions and Divestiture

HS Butyl Limited

On August 5, 2024, we acquired HS Butyl Limited (“HS Butyl”) for a purchase price of 18,148 British pound sterling, or approximately $ 23,180 which was funded through existing cash.

This includes a holdback amount of 2,700 British pound sterling that will be paid on the 18 -month anniversary of the closing date.

HS Butyl, headquartered in Lymington, England, is the United Kingdom's largest manufacturer and distributor of high-quality butyl tapes, which provide strong, permanent, watertight seals for a wide variety of applications within the construction, infrastructure, automotive and renewable energy industries.

The acquisition of HS Butyl establishes our presence in the European waterproofing tape market, expanding our position as a solution provider to existing customers.

It also expands our relevance to more markets and creates opportunities to deliver new, in-demand solutions for our customers, given the technology's relevance to multiple high-value applications.

The acquisition fair value measurement was preliminary as of November 30, 2024, and includes other intangible assets of $ 6,412 , goodwill of $ 3,233 and other net assets of $ 13,535 .

Goodwill represents expected synergies from combining HS Butyl with our existing business.

Goodwill is not deductible for tax purposes.

HS Butyl is included in our Construction Adhesives operating segment.

ND Industries, Inc.

On May 20, 2024, we acquired the assets of ND Industries, Inc.

(“ND Industries”) for a base purchase price of $ 254,037 which was funded through borrowings on our credit facility and existing cash.

ND Industries, headquartered in Clawson, Michigan, is a leading provider of specialty adhesives and fastener locking and sealing solutions serving customers in the automotive, electronics, aerospace and other industries.

The acquisition of ND Industries is expected to accelerate the realization of our top growth priorities, consistent with our strategy to proactively drive capital allocation to the highest margin, highest growth market segments within the functional coatings, adhesives, sealants and elastomer industry.

The acquisition fair value measurement was preliminary as of November 30, 2024 .

ND Industries is included in our Engineering Adhesives operating segment.

During the three months ended November 30, 2024, intangible assets decreased $ 2,200 , goodwill decreased $ 2,591 , and other net assets increased $ 3,094 in the fair value measurement of ND Industries.

The following table summarizes the fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

Current assets

Property, plant and equipment

Other intangibles

Customer relationships

Trademarks/trade names

Current liabilities

The expected useful lives of the acquired intangible assets are 15 years for technology, 13 years for customer relationships and ten years for trademarks and tradenames.

Based on the fair value measurement of the assets acquired and liabilities assumed, we allocated $ 81,268 to goodwill for the expected synergies from combining ND Industries with our existing business.

Such goodwill is deductible for tax purposes.

Sanglier Ltd.

On September 8, 2023, we acquired the assets of Sanglier Ltd.

(“Sanglier”) for a base purchase price of 13,339 British pound sterling, or approximately $ 16,632 which was funded through existing cash.

This includes a holdback amount of 2,100  British pound sterling that will be paid on the 18 -month anniversary of the closing date.

(“Sanglier”) for a base purchase price of 13,361 British pound sterling, or approximately $ 16,660 which was funded through existing cash.

This includes a holdback amount of 2,100 British pound sterling that will be paid on the 18 -month anniversary of the closing date.

Sanglier, headquartered in Mansfield, United Kingdom, is a manufacturer and filler of sprayable (aerosol and cannister) industrial adhesives.

The acquisition of Sanglier expands our innovation capabilities and product portfolio across the United Kingdom and Europe transforming adhesives applications to enable sprayable delivery providing end users with an opportunity to greatly improve labor efficiency.

The acquisition fair value measurement was preliminary as of December 2, 2023 and includes intangible assets of $ 10,695 and other net assets of $ 5,937 .

Sanglier is included in our Construction Adhesives operating segment.

The acquisition of Sanglier expands our innovation capabilities and product portfolio across the United Kingdom and Europe.

Sanglier transforms adhesives applications to enable sprayable delivery providing end users with an opportunity to greatly improve labor efficiency.

The acquisition fair value measurement was final as of August 31, 2024 and includes other intangible assets of $ 7,354 , goodwill of $ 3,038 and other net assets of $ 6,261 .

Goodwill represents expected synergies from combining Sanglier with our existing business.

Goodwill is deductible for tax purposes.

Sanglier is included in our Construction Adhesives operating segment.

Adhezion Biomedical LLC

On June 23, 2023, we acquired Adhezion Biomedical LLC (“Adhezion”) for a base purchase price of $ 80,802 which was funded through borrowings on our credit facility.

This includes a holdback amount of $ 780 that will be paid on the 12 -month anniversary of the closing date.

On June 23, 2023, we acquired Adhezion Biomedical LLC (“Adhezion”) for a base purchase price of $ 80,802 which was funded through borrowings on our credit facility.

This includes a holdback amount of $ 780 that was paid on the 12 -month anniversary of the closing date.

The agreement includes a payment of contingent consideration up to $ 15,000 following the completion of certain performance goals and conditions.

Adhezion, headquartered in Wyomissing, Pennsylvania, is a manufacturer of cyanoacrylate-based healthcare adhesives and infection prevention products.

The acquisition of Adhezion positions us for expansion in the healthcare adhesives industry and creates a solid, unique platform from which to scale and innovate in the healthcare adhesives industry.

The acquisition fair value measurement was preliminary as of December 2, 2023 and includes intangible assets of $ 38,500 , goodwill of $ 38,389 and other net assets of $ 3,913 .

Adhezion, headquartered in Hudson, North Carolina, is a manufacturer of cyanoacrylate-based healthcare adhesives and infection prevention products.

The acquisition of Adhezion positions us for expansion in the healthcare adhesives industry and creates a solid, unique platform from which to scale and innovate in the healthcare adhesives industry.

The acquisition fair value measurement was final as of June 1, 2024 and includes other intangible assets of $ 38,500 , goodwill of $ 37,589 and other net assets of $ 4,713 .

Goodwill represents expected synergies from combining Adhezion with our existing business.

As of December 2, 2023, the amount of goodwill that is deductible for tax purposes i s $ 25,702 .

The amount of goodwill that is deductible for tax purposes is $ 25,717 .

Adhezion is included in our Hygiene, Health and Consumable Adhesives operating segment.

XChem International LLC

On June 12, 2023, we acquired XChem International LLC ("XChem") for a base purchase price of approximately $ 14,591 which was funded through borrowings on our credit facility.

This includes a holdback amount of $ 1,650 that will be paid on the 18 -month anniversary of the closing date.

On June 12, 2023, we acqui red XChem International LLC ("XChem") for a base purchase price of approximately $ 14,496 which was funded through borrowings on our credit facility.

This includes a holdback amount of $ 1,650 , half of which was paid on the 12 -month anniversary of the closing date and half to be paid on the 18 -month anniversary of the closing date.

XChem, headquartered in Ras Al-Khaimah, United Arab Emirates, is a manufacturer of adhesives and sealants for construction-related applications.

2 unchanged sentences

and infrastructure-oriented markets.

The acquisition fair value measurement was preliminary as of December 2, 2023 and includes intangible assets of $ 4,400 , goodwill of $ 4,783 and other net assets of $ 5,408 .

The acquisition fair value measurement was final as of June 1, 2024 and includes other intangible assets of $ 4,600 , goodwill of $ 4,318 and other net assets of $ 5,578 .

Goodwill represents expected synergies from combining XChem with our existing business.

3 unchanged sentences

On May 1, 2023, we acquired Beardow Adams Holdings Ltd.

(“Beardow Adams”) for a total purchase price of 80,738 British pound sterling, or approximately $ 100,885 , which was funded through borrowings on our credit facility.

This includes a holdback amount of 8,000 British pound sterling that will be paid on the 18 -month anniversary of the closing date.

Beardow Adams, based in the United Kingdom, develops and manufactures adhesives, sealants and coatings, principally in the fields of packaging and related applications.

The acquisition of Beardow Adams is expected to accelerate profitable growth in many of our core end markets and generate business synergies through better raw material pricing, production optimization and an expanded distribution platform.

The acquisition fair value measurement was preliminary as of December 2, 2023 and includes intangible assets of $ 37,611 , goodwill of $ 25,674 and other net assets of $ 37,600 .

(“Beardow Adams”) for a total purchase price of 80,738 British pound sterling, or approximately $ 100,885 , which was funded through borrowings on our credit facility.

This includes a holdback amount of 8,000 British pound sterling that was paid on the 18 -month anniversary of the closing date.

Beardo w Adams, based in the United Kingdom, develops and manufactures adhesives, sealants and coatings, principally in the fields of packaging and related applications.

The acquisition fair value measurement was final as of June 1, 2024 and includes other intangible assets of $ 35,425 , goodwill of $ 28,148 and other net assets of $ 37,312 .

Goodwill represents expected synergies from combining Beardow Adams with our existing business.

As of December 2, 2023, the amount of goodwill that is deductible for tax purposes is $ 2,998 .

The remaining goodwill is not deductible for tax purposes. Beardow Adams is included in our Hygiene, Health and Consumable Adhesives operating segment.

The amount of goodwill that is deductible for tax purposes is $ 3,561 .

The remaining goodwill is not deductible for tax purposes.

Beardow Adams is included in our Hygiene, Health and Consumable Adhesives operating segment.

Aspen Research Corporation

On January 31, 2023, we acquired the assets of Aspen Research Corporation (“Aspen”) for a total purchase price of $ 9,761 , which was funded through existing cash.

This includes a holdback amount of $ 500 that will be paid on the 18 -month anniversary of the closing date.

On January 31, 2023, we acquired the assets of Aspen Research Corporation (“Aspen”) for a total purchase price of $ 9,761 , which was funded through existing cash.

This includes a holdback amount of $ 500 that was paid on the 18 -month anniversary of the closing date.

Aspen, located in Maple Grove, Minnesota, is a contract research organization that develops and manufactures innovative solutions for some of the adhesives used in our insulating glass market.

Aspen is known for their superior understanding of materials science, engineering and analytical testing and specializes in custom materials manufacturing for chemicals and adhesives products.

The acquisition of Aspen is expected to expand our Engineering Adhesives footprint in North America and strengthen our capabilities in the insulating glass market, in addition to bringing additive continuous flow, process manufacturing capabilities that we plan to leverage.

The acquisition fair value measurement was final as of December 2, 2023 and includes intangible assets of $ 4,900 , goodwill of $ 3,832 and other net assets of $ 1,029 .

The acquisition of Aspen is expected to expand our Engineering Adhesives footprint in North America and strengthen our capabilities in the insulating glass market, in addition to bringing additive continuous flow and process manufacturing capabilities that we plan to leverage.

The acquisition fair value measurement was final as of December 2, 2023 and includes other intangible assets of $ 4,900 , goodwill of $ 3,832 and other net assets of $ 1,029 .

Goodwill represents expected synergies from combining Aspen with our existing business.

1 unchanged sentence

Aspen is included in our Engineering Adhesives operating segment.

On December 15, 2022, we acquired Lemtapes Oy (“Lemtapes”) for a total purchase price of $ 8,922 Euro, or approximately $ 9,482 which was funded through existing cash.

This includes a holdback amount of 850 Euro that will be paid on the 18 -month anniversary of the closing date.

On December 15, 2022, we acquired Lemtapes Oy (“Lemtapes”) for a total purchase price of 8,922 Euro, or approximately $ 9,482 which was funded through existing cash.

This includes a holdback amount of 850 Euro that was paid on the 18 -month anniversary of the closing date.

Lemtapes, located in Valkeakoski, Finland, is a solutions provider of ecological, innovative tapes and adhesives for the packaging and plywood industries.

1 unchanged sentence

This acquisition will also accelerate our growth strategy of fast-growing, high margin businesses while adding technology capabilities and strong customer relationships.

The acquisition fair value measurement was final as of December 2, 2023 and includes intangible assets of $ 5,526 , goodwill of $ 3,028 and other net assets of $ 928 .

The acquisition fair value measurement was final as of December 2, 2023 and includes other intangible assets of $ 5,526 , goodwill of $ 3,028 and other net assets of $ 928 .

Goodwill represents expected synergies from combining Lemtapes with our existing business.

1 unchanged sentence

Lemtapes is included in our Hygiene, Health and Consumable Adhesives operating segment.

GSSI Sealants

On October 24, 2022, we acquired GSSI Sealants, Inc.

("GSSI") for a total purchase price of $ 7,701 , which was funded through existing cash.

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

In addition, we recorded a liability for contingent consideration of $ 870 , to be paid following the completion of certain performance goals and conditions.

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

The acquisition of GSSI is expected to support our strategy to expand our Construction Adhesives business selectively via high margin applications.

The acquisition fair value measurement was final as of September 2, 2023 and includes intangible assets of $ 3,400 , goodwill of $ 1,123 and other net assets of $ 3,178 .

Goodwill represents expected synergies from combining GSSI with our existing business.

Goodwill is not deductible for tax purposes.

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

GSSI is included in our Construction Adhesives operating segment.

ZKLT Polymer Co.

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

("ZKLT") for a base purchase price of 143,965 Chinese renminbi, or approximately $ 21,260 , which was funded through existing cash.

This includes a holdback of 27,000 Chinese renminbi, or approximately $ 3,987 , half of which was paid on the 12 -month anniversary of the closing date and half to be paid on the 18 -month anniversary of the closing date.

In addition, we recorded a liability for contingent consideration of 30,000 Chinese renminbi, or approximately $ 4,132 , which was paid in the fourth quarter of 2023 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 unique technology, strong customer relationships and a strategic manufacturing location to further strengthen our presence in central China.

The acquisition fair value measurement was final as of September 2, 2023 and includes intangible assets of $ 5,183 , goodwill of $ 5,992 and other net assets of $ 10,085 .

Goodwill represents expected synergies from combining ZKLT with our existing business.

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 total purchase price of 152,714 British pound sterling, or approximately

$ 205,592 , which was funded through borrowings on our credit facility.

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 and includes intangible assets of

$ 76,198 , goodwill of

$ 119,358 and other net assets of

Goodwill represents expected synergies from combining Apollo with our existing business.

not deductible for tax purposes.

The acquisition is included in 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 required us to pay an additional holdback amount 18 months following the date of acquisition and during the three months ended September 2, 2023 we paid $ 3,060 .

Fourny, headquartered in Willebroek, Belgium, is a manufacturer of construction 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 represents expected synergies from combining Fourny with our existing business.

Goodwill is not deductible for tax purposes.

Fourny is included in our Construction Adhesives operating segment.

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

North America Flooring

During the fourth quarter of the year ended November 30, 2024, we committed to a plan to sell our North American Flooring business, which is included in our Construction Adhesives segment.

The sale of this business was completed on December 2, 2024.

The assets and liabilities of this business are classified as held for sale and are included in their corresponding categories in the Consolidated Balance Sheets as of November 30, 2024.

Assets and liabilities held for sale are required to be recorded at the lower of carrying value or fair value, less costs to sell in accordance with ASC 360, Impairment or Disposal of Long Lived Assets.

We measured the fair value of these assets and liabilities primarily using observable inputs at the measurement date, and determined their carrying value was greater than the fair value less costs to sell.

Accordingly, we recorded a pre-tax loss on assets held for sale of $ 47,267 .

Included in this amount is $ 32,079 for goodwill impairment, $ 6,109 for net intangible impairment and $9,079 for net property, plant and equipment impairment.

The loss is recorded in other (expense) income, net in the Consolidated Statements of Income for the year ended November 30, 2024.

The following table summarizes the condensed assets and liabilities held for sale:

November 30, 2024

Trade receivables, net

Other current assets

Property, plant and equipment, net

Other intangibles, net

Trade payables

Other accrued expenses

Other liabilities

Restructuring Actions

During fiscal year 

2023 ,  the Company approved restructuring plans (the "Plans") related to organizational changes and other actions to optimize operations and integrate acquired businesses.

The Plans began to be implemented in the 

second  quarter of fiscal year 

2023  and are currently expected to be completed during fiscal year 

2026 ,  with the majority of the charges recognized and cash payments occurring in fiscal 

2023  and 

 In implementing the Plans, the Company currently expects to incur pre-tax costs of approximately $ 39,100  to $ 44,100  for severance and related employee costs globally, other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans. 

During fiscal year 2023 , the Company approved restructuring plans (the "Plans") related to organizational changes and other actions to optimize operations and integrate acquired businesses.

The Plans began to be implemented in the second quarter of fiscal year 2023 and are currently expected to be completed during fiscal year 2026 , with the majority of the charges recognized and cash payments occurring in fiscal 20 23 and 2024 .

In implementing the Plans, the Company currently expects to incur pre-tax costs of approximately $ 60,000 to $ 65,000 for severance and related employee costs globally, other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans.

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

November 30, 2024

December 2, 2023

December 3, 2022

November 27, 2021

Cost of sales

$ 15,012  

$ ( 152 )  

$ 12,263 $ 15,012 $ ( 152 )

Selling, general and administrative

( 297 )  

$ 24,587  

$ ( 449 )  

9,823 9,575 ( 297 )

$ 22,086 $ 24,587 $ ( 449 )

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

1 unchanged sentence

Asset-Related

Balance at November 27, 2021

$ 1,095  

Balance at December 3, 2022

$ 57 $ - $ - $ 57

Expense incurred

( 449 )  

22,731 1,369 487 24,587

Non-cash charges

- ( 1,369 ) ( 453 ) ( 1,822 )

Cash payments

( 529 )  

( 9,802 ) - ( 34 ) ( 9,836 )

Foreign currency translation

( 60 )  

( 1,263 ) - - ( 1,263 )

Balance at December 2, 2023

$ 11,723 $ - $ - $ 11,723

Expense incurred

22,731  

24,587  

13,477 4,673 3,936 22,086

Non-cash charges

( 1,369 )  

( 453 )  

- ( 4,673 ) ( 3,925 ) ( 8,598 )

Cash payments

( 9,802 )  

( 34 )  

( 16,427 ) - ( 11 ) ( 16,438 )

Foreign currency translation

( 1,263 )  

Balance at December 2, 2023

$ 11,723  

Non-cash charges include accelerated depreciation resulting from the cessation of use of certain long-lived assets, the recording of a provision related to the discontinuance of certain products and lease termination payments.

( 343 ) - - ( 343 )

Balance at November 30, 2024

$ 8,430 $ - $ - $ 8,430

Non-cash charges include accelerated depreciation resulting from the cessation of use of certain long-lived assets, write-offs of certain long-lived assets, the recording of an inventory provision related to the discontinuance of certain products, inventory disposals and lease termination payments.

Restructuring liabilities have been classified as a component of other accrued expenses on the Consolidated Balance Sheets.

1 unchanged sentence

Statement of Income Information

Additional details of income statement amounts for 

2023, 2022 and 2021 are as follows:

Additional details of income statement amounts for 2024, 2023 and 2022 are as follows:

Foreign currency transaction losses, net

$ ( 11,615 )  

$ ( 12,935 )  

$ ( 2,501 ) $ ( 11,615 ) $ ( 12,935 )

Gain (loss) on disposal of assets

( 58 )  

424 ( 58 ) 1,416

Net periodic pension benefit

20,246  

26,787  

32,070  

( 2,316 )  

Total other income, net

$ 9,682  

$ 12,952  

$ 32,855  

15,920 20,246 26,787

Loss on impairment of assets held for sale

( 47,267 ) - -

( 3,691 ) 1,109 ( 2,316 )

Total other (expense) income, net

$ ( 37,115 ) $ 9,682 $ 12,952

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

$ 48,640  

$ 44,853  

$ 39,344  

$ 49,565 $ 48,640 $ 44,853

Balance Sheet Information

Additional details of balance sheet amounts as of 

December 2, 2023 and December 3, 2022 are as follows:

Additional details of balance sheet amounts as of November 30, 2024 and December 2, 2023 are as follows:

Raw materials

$ 206,140  

$ 237,071  

$ 215,936 $ 206,140

Finished goods

235,900  

254,710  

251,562 235,900

Total inventories

$ 442,040  

$ 491,781  

$ 467,498 $ 442,040

Other current assets

Other receivables

$ 40,760  

$ 36,338  

$ 39,149 $ 40,760

Prepaid income taxes

12,327  

27,169  

12,218 12,327

Prepaid taxes other than income taxes

34,455  

29,322  

31,295 34,455

Prepaid expenses

25,136  

27,490  

21,357 25,136

Total other current assets

$ 112,678  

$ 120,319  

$ 104,019 $ 112,678

Property, plant and equipment

$ 91,320  

$ 84,320  

$ 108,093 $ 91,320

Buildings and improvements

447,428  

405,037  

470,106 447,428

Machinery and equipment

1,058,916  

957,371  

1,161,379 1,058,916

Construction in progress

157,371  

133,010  

124,980 157,371

Total, at cost

1,755,035  

1,579,738  

1,864,558 1,755,035

Accumulated depreciation

( 930,380 )  

( 982,631 ) ( 930,380 )

Net property, plant and equipment

$ 824,655  

$ 733,667  

$ 881,927 $ 824,655

Investments in company owned life insurance

$ 9,334  

$ 8,957  

$ 9,814 $ 9,334

Equity method investments

37,562  

42,143  

37,059 37,562

Equity investments

Long-term deferred income taxes

42,949  

39,048  

39,298 42,949

Prepaid pension costs

92,323  

86,616  

119,493 92,323

Postretirement other than pension asset

113,431  

98,848  

156,576 113,431

Operating lease right-of-use assets

47,433  

32,440  

61,116 47,433

Other long-term receivables

14,013  

14,577 14,013

Other long-term assets

12,758  

17,192  

10,709 12,758

Total other assets

$ 371,165  

$ 335,868  

$ 449,665 $ 371,165

Other accrued expenses

Taxes other than income taxes

$ 22,497  

$ 14,642  

$ 24,559 $ 22,497

Miscellaneous services

Customer rebates

17,938  

24,915  

21,901 17,938

Product liability

1 unchanged sentence

Current operating lease liabilities

11,277  

13,473 11,277

Current obligations of finance leases

16,184  

Accrued expenses

24,323  

21,732  

20,310 24,323

Total other accrued expenses

$ 107,902  

$ 89,345  

$ 97,038 $ 107,902

Other liabilities

Asset retirement obligations

$ 3,147  

$ 2,888  

$ 3,321 $ 3,147

Long-term deferred income taxes

176,385  

183,190  

141,693 176,385

Long-term income tax liability

19,225  

22,202  

18,195 19,225

Long-term deferred compensation

1 unchanged sentence

Noncurrent operating lease liabilities

36,879  

23,421  

48,628 36,879

Environmental liabilities

Net investment hedge liabilities

72,589  

54,046  

49,542 72,589

Other long-term liabilities

65,507  

57,497  

46,193 65,507

Total other liabilities

$ 388,072  

$ 358,286  

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

2023, 2022 and 2021 are as follows:

$ 322,299 $ 388,072

Additional details on the trade receivables allowance for doubtful accounts, credits related to pricing or quantities shipped and early payment discounts for 2024, 2023 and 2022 are as follows:

Balance at beginning of year

$ 10,939  

$ 9,935  

$ 12,905  

$ 11,080 $ 10,939 $ 9,935

Charged to expenses and other adjustments

( 1,522 )  

( 851 )  

2,187 1,224 1,794

( 1,071 ) ( 1,522 ) ( 851 )

Foreign currency translation effect

( 575 ) 439 61

Balance at end of year

$ 11,080  

$ 10,939  

$ 9,935  

$ 11,621 $ 11,080 $ 10,939

Statement of Comprehensive Income Information

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

December 2, 2023

November 30, 2024

Non-controlling

2 unchanged sentences

Fuller and non-controlling interests

$ 144,906  

Other comprehensive income (loss)

$ 130,256 $ 139

Other comprehensive (loss) income

Foreign currency translation adjustment 1

$ 17,320  

17,320  

$ ( 75,106 ) - ( 75,106 ) 342

Defined benefit pension plans adjustment 2

( 762 )  

50,875 ( 12,437 ) 38,438 -

Interest rate swap 3

( 1,460 )  

( 14,831 ) 3,615 ( 11,216 ) -

Net investment hedges 3

( 18,555 )  

( 14,107 )  

Other comprehensive income (loss)

$ 6,251  

$ 2,226  

$ 8,477  

23,058 ( 5,689 ) 17,369 -

Other comprehensive (loss) income

$ ( 16,004 ) $ ( 14,511 ) $ ( 30,515 ) $ 342

Comprehensive income

$ 153,383  

$ 99,741 $ 481

December 2, 2023

3 unchanged sentences

Fuller and non-controlling interests

$ 180,313  

Other comprehensive income (loss)

$ 144,906 $ 82

Other comprehensive income

Foreign currency translation adjustment 1

$ ( 131,745 )  

( 131,745 )  

$ 17,320 - 17,320 2

Defined benefit pension plans adjustment 2

( 18,881 )  

( 15,063 )  

1,554 ( 762 ) 792 -

Interest rate swap 3

13,148  

( 3,224 )  

Other cash flow hedges 3

( 3,536 )  

( 3,483 )  

5,932 ( 1,460 ) 4,472 -

Net investment hedges 3

( 54,040 )  

13,297  

( 40,743 )  

( 18,555 ) 4,448 ( 14,107 ) -

Other comprehensive income

$ ( 195,054 )  

$ 13,944  

$ ( 181,110 )  

$ 6,251 $ 2,226 $ 8,477 $ 2

Comprehensive income

$ ( 797 )  

November 27, 2021

$ 153,383 $ 84

December 3, 2022

Non-controlling

2 unchanged sentences

Fuller and non-controlling interests

$ 161,393  

Other comprehensive income (loss)

$ 180,313 $ 94

Other comprehensive loss

Foreign currency translation adjustment 1

$ ( 26,262 )  

( 26,262 )  

$ ( 131,745 ) - ( 131,745 ) ( 61 )

Defined benefit pension plans adjustment 2

64,912  

( 16,731 )  

48,181  

( 18,881 ) 3,818 ( 15,063 ) -

Interest rate swap 3

20,109  

( 4,930 )  

15,179  

13,148 ( 3,224 ) 9,924 -

Other cash flow hedges 3

( 4,554 )  

( 4,486 )  

Other comprehensive (loss) income

$ 54,205  

$ ( 21,593 )  

$ 32,612  

( 3,536 ) 53 ( 3,483 )

Net investment hedges 3

( 54,040 ) 13,297 ( 40,743 ) -

Other comprehensive loss

$ ( 195,054 ) $ 13,944 $ ( 181,110 ) $ ( 61 )

Comprehensive income

$ 194,005  

$ ( 797 ) $ 33

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

2 Loss reclassified from accumulated other comprehensive income (loss) 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 expenses.

3 Loss reclassified from accumulated other comprehensive income (loss) into earnings is reported in other income, net.

2 Loss reclassified from accumulated other comprehensive loss 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 expenses.

3 Loss reclassified from accumulated other comprehensive loss into earnings is reported in other (expense) income, net.

Statement of Total Equity Information

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

December 2, 2023

November 30, 2024

Foreign currency translation adjustment

$ ( 246,736 )  

$ ( 246,692 )  

$ ( 322,184 ) $ ( 321,798 ) $ ( 386 )

Defined benefit pension plans adjustment, net of taxes of $ 54,545

( 127,469 )  

( 89,031 ) ( 89,031 ) -

Interest rate swap, net of taxes of $ 2,169

( 6,744 ) ( 6,744 ) -

Net investment hedges, net of taxes of $ 12,056

( 54,850 )  

( 37,481 ) ( 37,481 ) -

Reclassification of AOCI tax effects

( 18,341 )  

( 18,341 ) ( 18,341 ) -

Total accumulated other comprehensive loss

$ ( 442,924 )  

$ ( 442,880 )  

$ ( 473,781 ) $ ( 473,395 ) $ ( 386 )

December 2, 2023

Foreign currency translation adjustment

$ ( 264,054 )  

$ ( 264,012 )  

$ ( 246,736 ) $ ( 246,692 ) $ ( 44 )

Defined benefit pension plans adjustment, net of taxes of $ 66,982

( 128,261 )  

( 127,469 ) ( 127,469 ) -

Interest rate swap, net of taxes of ($ 1,460 )

Net investment hedges, net of taxes of $ 17,744

( 40,743 )  

( 54,850 ) ( 54,850 ) -

Reclassification of AOCI tax effects

( 18,341 )  

( 18,341 ) ( 18,341 ) -

Total accumulated other comprehensive loss

$ ( 451,399 )  

$ ( 451,357 )  

November 27, 2021

$ ( 442,924 ) $ ( 442,880 ) $ ( 44 )

December 3, 2022

Foreign currency translation adjustment

$ ( 132,370 )  

$ ( 132,267 )  

$ ( 264,054 ) $ ( 264,012 ) $ ( 42 )

Defined benefit pension plans adjustment, net of taxes of $ 63,925

( 113,198 )  

( 128,261 ) ( 128,261 ) -

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

( 9,924 )  

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

( 40,743 ) ( 40,743 ) -

Reclassification of AOCI tax effects

( 18,341 )  

( 18,341 ) ( 18,341 ) -

Total accumulated other comprehensive loss

$ ( 270,350 )  

$ ( 270,247 )  

$ ( 451,399 ) $ ( 451,357 ) $ ( 42 )

Goodwill and Other Intangible Assets

3 unchanged sentences

As of December 2, 2023

$ 328,962  

$ 637,910  

$ 425,755  

$ 1,392,627  

67,523  

79,685  

$ 402,598 $ 651,145 $ 432,769 $ 1,486,512

1,674 81,268 5,813 88,755

- - ( 32,079 ) ( 32,079 )

Foreign currency translation effect

14,200  

As of December 2, 2023

$ 402,598  

$ 651,145  

$ 432,769  

$ 1,486,512  

( 4,759 ) ( 5,733 ) ( 475 ) ( 10,967 )

As of November 30, 2024

$ 399,513 $ 726,680 $ 406,028 $ 1,532,221

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 December 2, 2023

As of November 30, 2024

Original cost

$ 144,763  

$ 986,470  

$ 58,484  

$ 10,911  

$ 1,200,628  

$ 145,313 $ 1,063,210 $ 67,280 $ 10,031 $ 1,285,834

( 343 ) ( 5,616 ) ( 150 ) - ( 6,109 )

Accumulated amortization

( 59,631 )  

( 382,220 )  

( 23,099 )  

( 7,012 )  

( 55,398 ) ( 418,805 ) ( 28,745 ) ( 7,012 ) ( 509,960 )

Net identifiable intangibles

$ 85,132  

$ 604,250  

$ 35,385  

$ 3,899  

$ 728,666  

$ 89,572 $ 638,789 $ 38,385 $ 3,019 $ 769,765

Weighted-average useful lives (in years)

13 16 13 13 16

As of December 2, 2023

Original cost

$ 118,727  

$ 1,004,008  

$ 50,324  

$ 11,053  

$ 1,184,112  

$ 144,763 $ 986,470 $ 58,484 $ 10,911 $ 1,200,628

Accumulated amortization

( 66,433 )  

( 388,394 )  

( 21,401 )  

( 6,251 )  

( 59,631 ) ( 382,220 ) ( 23,099 ) ( 7,012 ) ( 471,962 )

Net identifiable intangibles

$ 52,294  

$ 615,614  

$ 28,923  

$ 4,802  

$ 701,633  

$ 85,132 $ 604,250 $ 35,385 $ 3,899 $ 728,666

Weighted-average useful lives (in years)

Amortization expense with respect to amortizable intangible assets was $ 79,514 , $ 74,383 and $ 71,068  in 2023, 2022 and 2021 , respectively.

13 16 13 13 16

Amortization expense with respect to amortizable intangible assets was $ 83,656 , $ 79,514 and $ 74,383 in 2024, 2023 and 2022 , respectively.

See Note 2 for further discussion of the impairment to assets held for sale.

Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for the next five fiscal years are as follows:

Amortization Expense

$ 77,288  

$ 77,678  

$ 70,957  

$ 67,652  

$ 67,356  

$ 367,735  

$ 81,437 $ 79,468 $ 76,752 $ 77,519 $ 75,088 $ 379,501

The above amortization expense forecast is an estimate.

Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions, potential impairment, accelerated amortization or other events.

Non-amortizable intangible assets as of 

December 2, 2023 and December 3, 2022 were $ 474  and $ 459 , respectively, and relate to trademarks and trade names.

The change in non-amortizable assets in 

2023 compared to 

2022 was due to changes in foreign currency exchange rates.

Non-amortizable intangible assets as of November 30, 2024 and December 2, 2023 were $ 461 and $ 474 , respectively, and relate to trademarks and trade names.

The change in non-amortizable assets in 2024 compared to 2023 was due to changes in foreign currency exchange rates.

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

6 unchanged sentences

Operating lease and finance lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

The discount rate used to calculate present value is the company’s incremental borrowing rate.

The discount rate used to calculate present value is the Company’s incremental borrowing rate.

We determine the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region.

7 unchanged sentences

The components of lease expense are as follows:

December 2, 2023

November 30, 2024

December 2, 2023

Operating lease cost

$ 13,883  

$ 12,026  

Finance lease cost:

Operating net lease cost

$ 16,559 $ 13,883

Finance net lease cost:

Amortization of assets

Interest on lease liabilities

Variable lease cost

Variable net lease cost

Total net lease cost

$ 25,559  

$ 20,303  

$ 30,750 $ 25,559

Supplemental balance sheet information related to leases is as follows:

Balance Sheet

December 2, 2023

November 30, 2024

December 2, 2023

1 unchanged sentence

Operating lease right-of-use assets

$ 47,433  

$ 32,440  

$ 61,116 $ 47,433

Current operating lease liabilities

Other accrued expenses

11,277  

13,473 11,277

Noncurrent operating lease liabilities

Other liabilities

36,879  

23,421  

48,628 36,879

Total operating lease liabilities

$ 48,156  

$ 33,215  

$ 62,101 $ 48,156

Finance leases:

1 unchanged sentence

Property, plant and equipment

$ 11,681  

$ 11,150  

$ 9,183 $ 11,681

Building right-of-use asset

Property, plant and equipment

$ 14,230  

Current obligations of finance leases

Other accrued expenses

$ 16,184  

$ 1,541  

$ 1,908 $ 16,184

Finance leases, net of current obligations

1 unchanged sentence

Total finance lease liabilities

$ 22,718  

$ 9,048  

As of December 2, 2023 , the weighted average remaining lease term is 

9.4 years and the weighted average discount rate is 

4.2 % for the company's operating lease agreements.

$ 9,508 $ 22,718

As of November 30, 2024 , the weighted average remaining lease term is 7.6 years and the weighted average discount rate is 4.8 % for the Company's operating lease agreements.

The weighted average remaining lease term is 6.6 years and the weighted average discount rate is 4.0 % for the Company's finance lease agreements.

Supplemental information related to leases is as follows:

December 2, 2023

November 30, 2024

December 2, 2023

1 unchanged sentence

Operating cash flows from operating leases

$ 11,745  

$ 15,209  

$ 15,707 $ 11,745

Operating cash flows from finance leases

Financing cash flows from finance leases

Non-cash investing and financing activities - 

Non-cash investing and financing activities

Additions to right-of-use assets obtained from:

New operating lease liabilities

$ 26,687  

$ 15,442  

$ 29,651 $ 26,687

New finance lease liabilities

15,015  

Maturities of lease liabilities are as follows:

December 2, 2023

November 30, 2024

Finance Leases

Operating Leases

$ 16,535  

$ 12,993  

$ 2,258 $ 16,082

2030 and beyond

18,869  

23,805  

57,031  

10,787 74,271

amounts representing interest

( 1,087 )  

( 1,279 ) ( 12,170 )

Present value of future minimum payments

22,718  

48,156  

current obligations

( 16,184 )  

( 1,908 ) ( 13,473 )

Noncurrent lease liabilities

$ 6,534  

$ 36,879  

$ 7,600 $ 48,628

Notes Payable, Long-Term Debt and Lines of Credit

Notes Payable

Notes payable were $ 1,841  and $ 28,860  at December 2, 2023 and December 3, 2022 , 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 outstanding at December 2, 2023  were approximately 10.75  percent, 16.2  percent in 2022 and 

8.1  percent in 2021.

Notes payable were $ 587 and $ 1,841 at November 30, 2024 and December 2, 2023 , respectively.

This amount primarily represents various foreign subsidiaries’ other short-term borrowings that were not part of committed lines.

The weighted-average interest rate on short-term borrowings outstanding at November 30, 2024 was approximately 1.35 percent and was 10.75 percent and 16.2 percent in 2023 and 2022 respectively.

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 December 2, 2023 .

There were no funds drawn from the short-term committed lines at November 30, 2024 .

Long-Term Debt

2 unchanged sentences

Long-Term Debt

December 2, 2023

November 30, 2024

Revolving credit facility

6.95 %  

$ 175,500  

6.17 % 2028 $ - $ -

Term Loan A 1

6.95 %  

487,500  

6.17 % 2028 462,500 487,500

Term Loan B 2

7.60 %  

796,000  

1,001,150  

6.57 % 2030 989,030 796,000

Public Notes 3

4.00 %  

300,000  

4.00 % 2027 300,000 300,000

Public Notes 4

4.25 %  

300,000  

4.25 % 2028 300,000 300,000

Other, including debt issuance cost and discount

( 46,910 )  

$ 1,836,590  

$ 1,736,256  

( 41,478 ) ( 46,910 )

$ 2,010,052 $ 1,836,590

current maturities

Total long-term debt, excluding current maturities

$ 1,836,590  

$ 1,736,256  

1 Term Loan A, due on February 15, 2028, $ 500,000 variable rate at the Secured Overnight Financing Rate ("SOFR") plu s an adjustment of 0.10 percent and an interest rate spread of 1.50 percent based on a leverage grid 

( 6.95 percent at December 2, 2023 ).

2 Term Loan B, due on February 15, 2030, $ 800,000 variable rate at the SOFR plu s 2.25 percent with a SOFR floor of 0.50 percent  ( 7.60 percent at December 2, 2023 ).

$ 2,010,052 $ 1,836,590

1 Term Loan A, due on February 15, 2028, $ 500,000 variable rate at the Secured Overnight Financing Rate ("SOFR") plu s an adjustment of 0.10 percent and an interest rate spread of 1.50 percent based on a leverage grid ( 6.17 percent at November 30, 2024 ).

2 Term Loan B, due on February 15, 2030, $ 994,000 variable rate at the SOFR plu s 2.00 percent with a SOFR floor of 0.50 percent ( 6.57 percent at November 30, 2024 ).

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

1 unchanged sentence

swapped to a floating rate as detailed below.

On February 15, 2023, we entered into a credit agreement with a consortium of financial institutions (“Second Amended and Restated Credit Agreement”) which replaces our existing revolving credit agreement under the amended and restated revolving credit agreement dated October 20, 2020 and also replaces our secured term loan credit agreement dated October 20, 2017.

The Second Amended and Restated Credit Agreement provides for a new senior secured term loan A facility in an aggregate principal amount of $ 500,000 (“Term Loan A”), a new senior secured term loan B facility in an aggregate principal amount of $ 800,000 (“Term Loan B”) and amendments to and extension of our existing senior secured revolving credit facility with an aggregate commitment in the amount of $ 700,000 (“Revolving Credit Facility”).

A portion of the proceeds of the combined facilities, (the “Credit Facilities”) was used to pay off the existing term loan and revolver.

Additionally, we wrote off $ 2,689 of debt issuance costs related to this payoff which was recorded in interest expense for the year ended December 2, 2023 .

The Credit Facilities will generally be used to finance working capital needs and acquisitions, and for general corporate purposes.

All of our obligations under the Credit Facilities are secured by a first -lien security interest in substantially all personal property and material real property of the Company and its material U.S.

subsidiaries, and are guaranteed by all of the Company’s material U.S.

On February 15, 2023, we entered into a credit agreement with a consortium of financial institutions (“Second Amended and Restated Credit Agreement”) which replaced our existing revolving credit agreement under the amended and restated revolving credit agreement dated October 20, 2020 and also replaced our secured term loan credit agreement dated October 20, 2017.

The Second Amended and Restated Credit Agreement provides for a senior secured term loan A facility in an aggregate principal amount of $ 500,000 (“Term Loan A”), a senior secured term loan B facility in an aggregate principal amount of $ 800,000 (“Term Loan B”) and amendments to and extension of our existing senior secured revolving credit facility with an aggregate commitment in the amount of $ 700,000 (“Revolving Credit Facility”).

A portion of the proceeds of the combined facilities, (the “Credit Facilities”) was used to pay off the existing term loan and revolver.

Additionally, we wrote off $ 2,689 of debt issuance costs related to this payoff which was recorded in interest expense for the year ended December 2, 2023 .

The Credit Facilities will generally be used to finance working capital needs and acquisitions, and for general corporate purposes.

All of our obligations under the Credit Facilities are secured by a first -lien security interest in substantially all personal property and material real property of the Company and its material U.S.

subsidiaries, and are guaranteed by all of the Company’s material U.S.

subsidiaries.

Interest on Term Loan A is payable at a rate of SOFR plus an adjustment of 0.10 percent and an interest rate spread of 1.50 percent ( 6.95  percent at December 2, 2023 ).

On March 4, 2024, we entered into a Refinancing and Incremental Amendment (the “Refinancing and Incremental Amendment”), which amended the Second Amended and Restated Credit Agreement.

Pursuant to the Refinancing and Incremental Amendment under the Credit Agreement, the existing $ 794,000 principal amount of Term B loans (the “Amended TLB”) were refinanced and certain lenders to the Refinancing and Incremental Amendment made additional Term B loans to the Company in the principal amount of $ 200,000 , thereby increasing the aggregate principal amount of the Amended TLB to $ 994,000 .

Furthermore, the interest rate margins applicable to the Amended TLB were decreased by 25 basis points ( 0.25 % per annum) to 200 basis points for SOFR loans and 100 basis points for prime rate loans.

The additional $ 200,000 of proceeds will be used to finance our working capital needs and for general corporate purposes, including permitted acquisitio ns.

The maturity date of Term B loans remains unchanged.

The commitment fee rates and interest rates applicable to the revolving credit facility and the Term Loan A facility remain unchanged.

Interest on Term Loan A is payable at a rate of SOFR plus an adjustment of 0.10 percent and an interest rate spread of 1.50 percent ( 6.17 percent at November 30, 2024 ).

The interest rate spread is based on a secured leverage grid.

Term Loan A matures on February 15, 2028.

At December 2, 2023 , a balance of $ 487,500  was outstanding on the Term Loan A.

August 16, 2023, we amended the Term Loan B agreement to an interest rate of SOFR plus an interest rate spread of 2.25 percent with a SOFR floor of 0.50  percent ( 7.60  percent at December 2, 2023 ).

Term Loan B matures on February 15, 2030. 

At December 2, 2023 , a balance of $ 796,000  was outstanding on the Term Loan B.

On January 12, 2023, we entered into an interest rate swap agreement to convert $ 400,000 of our variable rate 1 -month LIBOR rate debt to a fixed rate of 

At November 30, 2024 , a balance of $ 462,500 was outstanding on the Term L oan A.

Interest on Term Loan B borrowings is payable at SOFR plus an interest rate spread of 2.00 percent with a SOFR floor of 50 basis points ( 6.57 per cent at November 30, 2024 ).

Term Loan B matures on February 15, 2030.

At November 30, 2024 , a balance of $ 989,030 was outstanding on the Term Loan B.

January 12, 2023, we entered into an interest rate swap agreement to convert

$ 400,000 of our variable rate

1 -month LIBOR rate debt to a fixed rate of

3.6895 percent.

On February 28, 2023, after entering into the Second Amended and Restated Credit Agreement, we amended the interest rate swap agreement to 1 -month SOFR and a fixed rate of 3.7260 in accordance with the practical expedients included in ASC 848, Reference Rate Reform .

See Note 12  for further discussion of this interest rate swap.

On March 16, 2023, we entered into an interest rate swap agreement to convert $ 300,000 of our 1 -month SOFR rate debt to a fixed rate of 3.7210 percent and to convert $ 100,000 of our 1 -month SOFR rate debt to a fixed rate of 3.8990 percent.

See Note 12 for further discussion of this interest rate swap.

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.

February 28, 2023, after entering into the Second Amended and Restated Credit Agreement, we amended the interest rate swap agreement to

1 -month SOFR and a fixed rate of

3.7260 in accordance with the practical expedients included in ASC

Reference Rate Reform .

12 for further discussion of this interest rate swap.

March 16, 2023, we entered into an interest rate swap agreement to convert

$ 300,000 of our

1 -month SOFR rate debt to a fixed rate of

3.7210 percent and to convert

$ 100,000 of our

1 -month SOFR rate debt to a fixed rate of

3.8990 percent.

12 for further discussion of this interest rate swap.

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.

Proceeds from this debt issuance were used to repay $ 138,000 outstanding under the revolving credit facility at that time and prepay $ 158,750 of our Term Loan A under the credit agreement at that time.

On February 14, 2017, we entered into an interest rate swap agreement to convert $ 150,000 of the 10 -year Public Notes to a variable interest rate of 1 -month LIBOR plus 1.86 percent and on May 1, 2020, we terminated the swap.

See Note 12 for further discussion of this interest rate swap.

On October 20, 2020, we issued $ 300,000 aggregate principal of 8 -year unsecured public notes ( “8 -year Public Notes”) due October 15, 2028 with a fixed coupon of 4.25 percent.

Proceeds from this debt issuance were used to prepay $ 300,000 of our Term Loan B at that time.

On February 12, 2021, we entered into interest rate swap agreements to convert our 8 -year Public Notes to a variable interest rate of 1 -month LIBOR plus 3.28 percent. See Note 12 for further discussion of these interest rate swaps.

The Public Notes are senior unsecured obligations of the company and will rank equally with the company’s other unsecured and unsubordinated debt from time to time outstanding.

On February 12, 2021, we entered into interest rate swap agreements to convert our 8 -year Public Notes to a variable interest rate of 1 -month LIBOR plus 3.28 percent.

On June 30, 2023, 1 -month LIBOR ceased to exist and the IBOR Fallbacks Protocol published by the International Swaps and Derivatives Association ("ISDA") took effect as outlined in the interest rate swap agreement.

As a result, the interest rate swap agreement was converted to Overnight SOFR plus 3.28 percent.

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

The Public Notes are senior unsecured obligations of the Company and will rank equally with the Company’s other unsecured and unsubordinated debt from time to time outstanding.

Fair Value of Long-Term Debt

Long-term debt had an estimated fair value of $ 1,785,199  and $ 1,713,257  as of December 2, 2023 and December 3, 2022 , respectively.

Long-term debt had an estimated fair value of $ 2,015,468 and $ 1,785,199 as of November 30, 2024 and December 2, 2023 , 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.

3 unchanged sentences

Long-term debt obligations

$ 300,000  

$ 787,500  

$ 796,000  

$ 41,190 $ 47,440 $ 53,690 $ 959,940 $ 9,940 $ 939,330

Revolving Credit Facility

Interest on the Revolving Credit Facility is payable at SOFR plus an adjustment of 0.10 percent and an interest rate spread of 1.50 percent ( 6.95  percent at 

December 2, 2023 ).

A facility fee of 20  basis points of the unused commitment under the Revolving Credit Facility is payable quarterly.

The interest rate spread and the facility fee are based on a secured leverage grid.

At December 2, 2023 , there was no balance outstanding on the Revolving Credit Facility.

The Revolving Credit Facility matures on February 15, 2028. 

As of December 2, 2023 , amounts related to our revolving credit facility was as follows:

Interest on the Revolving Credit Facility is payable at SOFR plus an adjustment of 0.10 percent and an interest rate spread of 1.50 percent ( 6.17 percent at November 30, 2024 ).

A facility fee of 20 basis points of the unused commitment under the Revolving Credit Facility is payable quarterly.

The interest rate spread and the facility fee are based on a secured leverage grid.

At November 30, 2024 , there was no balance outstanding on the Revolving Credit Facility.

The Revolving Credit Facility matures on February 15, 2028.

As of November 30, 2024 , amounts related to our revolving credit facility was as follows:

Revolving credit facility

$ 700,000  

$ 690,032  

$ 700,000 $ - $ 689,682

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 December 2, 2023 , letters of credit reduced the available amount under the revolving credit facility by $ 9,968 .

At November 30, 2024 , letters of credit reduced the available amount under the revolving credit facility by $ 10,318 .

Covenants and Other

Under the Second Amended and Restated Credit Agreement, the Revolving Credit Facility and Term Loan A are subject to certain covenants and restrictions. For these facilities, we are required to maintain a secured leverage ratio, as defined in the agreement, no greater than 4.75 to 1.00 for our fiscal quarters ending on or prior to June 1, 2024 and then 4.50 to 1.00 thereafter.

Under the Refinancing and Incremental Amendment , the Revolving Credit Facility and Term Loan A are subject to certain covenants and restrictions.

For these facilities, we are required to maintain a secured leverage ratio, as defined in the agreement, no greater than 4.75 to 1.00 for our fiscal quarters ending on or prior to June 1, 2024 and then 4.50 to 1.00 thereafter.

We are also required to maintain an interest coverage ratio of not less than 2.00 to 1.00.

Restrictive covenants include, but are not limited to, limitations on secured and unsecured borrowings, interest coverage, intercompany transfers and investments, third party investments, dispositions of assets, leases, liens, dividends and distributions, and contains a maximum total debt to trailing twelve  months EBITDA requirement.

Restrictive covenants include, but are not limited to, limitations on secured and unsecured borrowings, interest coverage, intercompany transfers and investments, third party investments, dispositions of assets, leases, liens, dividends and distributions, and contains a maximum total debt to trailing twelve months EBITDA requirement.

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.

We are subject to mandatory prepayments in the first quarter of each fiscal year equal to 50 percent of Excess Cash Flow, as defined in the Second Amended and Restated Credit Agreement, of the prior fiscal year less any voluntary prepayments made during that fiscal year.

The Excess Cash Flow Percentage shall be reduced to 25 percent when our Secured Leverage Ratio is below 4.25:1.00 and to 0 percent when our Secured Leverage Ratio is below 3.75:1.00.

The principal balance of the Term Loan B loans will be repayable in equal quarterly installments in an aggregate annual amount equal to 1 percent of the original principal amount thereof, with the balance due at maturity on February 15, 2030.

The principal balance of the Term Loan A loans will be repayable in quarterly installments as follows:

(i) with respect to the first eight fiscal quarters ended after the effective date of the Second Amended and Restated Credit Agreement, 1.25 percent of the aggregate principal amount of the original principal of the Term Loan A loans, (ii) with respect to the eight fiscal quarters ended after the end of the period set forth in the preceding clause (i), 1.875 percent of the aggregate principal amount of the original principal amount of the Term Loan A loans, and (iii) thereafter, 2.5 percent of the original principal amount of the Term Loan A loans, with the balance due at maturity on February 15, 2028.

In addition, we cannot be a member of any consolidated group as defined for income tax purposes other than with our subsidiaries.

We are subject to mandatory prepayments in the first quarter of each fiscal year equal to 50 percent of Excess Cash Flow, as defined the Refinancing and Incremental Amendment , of the prior fiscal year less any voluntary prepayments made during that fiscal year.

The Excess Cash Flow Percentage shall be reduced to 25 percent when our Secured Leverage Ratio is below 4.25:1.00 and to 0 percent when our Secured Leverage Ratio is below 3.75:1.00.

The principal balance of the Term Loan B loans will be repayable in equal quarterly installments in an aggregate annual amount equal to 1 percent of the original principal amount thereof, with the balance due at maturity on February 15, 2030.

The principal balance of the Term Loan A loans will be repayable in quarterly installments as follows:

(i) with respect to the first eight fiscal quarters ended after the effective date of the Second Amended and Restated Credit Agreement, 1.25 percent of the aggregate principal amount of the original principal of the Term Loan A loans, (ii) with respect to the eight fiscal quarters ended after the end of the period set forth in the preceding clause (i), 1.875 percent of the aggregate principal amount of the original principal amount of the Term Loan A loans, and (iii) thereafter, 2.5 percent of the original principal amount of the Term Loan A loans, with the balance due at maturity on February 15, 2028.

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.

2 unchanged sentences

These covenants and events of default are subject to a number of important qualifications, limitations and exceptions that are described in the Indenture.

As of November 30, 2024 , we were in compliance with all covenants of our contractual obligations for outstanding indebtedness.

Stockholders' Equity

Preferred Stock

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 54,092,987  and 53,676,576  shares issued and outstanding at December 2, 2023 and December 3, 2022 , 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.

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 54,657,103 and 54,092,987 shares issued and outstanding at November 30, 2024 and December 2, 2023 , respectively.

On April 22 2022, the Board of Directors authorized a 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 April 6, 2017 authorization to repurchase shares.

We did not repurchase any shares during 

2023, 2022 and 2021 under our share repurchase program.

Up to $ 300,000  of our outstanding common shares may still be repurchased under the current share repurchase program.

We repurchased shares under this program with an aggregate value of $ 31,811 during 2024 .

We did not repurchase any shares during 2023 and 2022 under our share repurchase program.

Up to $ 268,000 of our outstanding common shares may still be repurchased under the current share repurchase program.

Common Shares Outstanding

Beginning balance

53,676,576  

52,777,753  

51,906,663  

54,092,987 53,676,576 52,777,753

Stock options exercised

314,832  

657,789  

740,731  

746,892 314,832 657,789

Deferred compensation paid

102,108  

118,429  

19,895  

20,691 102,108 118,429

Restricted units vested

113,339  

172,474  

157,945  

297,035 113,339 172,474

Shares withheld for taxes

( 113,868 )  

( 49,869 )  

( 93,102 ) ( 113,868 ) ( 49,869 )

Share repurchases

( 407,400 ) - -

Ending balance

54,092,987  

53,676,576  

52,777,753  

54,657,103 54,092,987 53,676,576

Dividends declared per common share were $ 0.856 and $ 0.805 for the year ended November 30, 2024 and December 2, 2023 , respectively.

Accounting for Share-Based Compensation

24 unchanged sentences

2020 Master Incentive Plan

This plan allows for granting of awards 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;

4 unchanged sentences

(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 3,413,652  common shares available for grant as of December 2, 2023 .

There were 2,854,679 common shares available for grant as of November 30, 2024 .

2018 Master Incentive Plan

14 unchanged sentences

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

2009 Directors’

Stock Incentive Plan

This plan permits granting of (a) shares for amounts non-employee directors defer under the Directors’

Deferred Compensation Plan and (b) discretionary grants of restricted stock, stock options, stock appreciation rights, performance awards and other stock awards.      

2009 Directors’ Stock Incentive Plan

This plan permits granting of (a) shares for amounts non-employee directors defer under the Directors’ Deferred Compensation Plan and (b) discretionary grants of restricted stock, stock options, stock appreciation rights, performance awards and other stock awards.

Directors' Deferred Compensation Plan

7 unchanged sentences

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of stock option awards.

The fair value of options granted during 

2023, 2022 and 2021 were calculated using the following assumptions:

The fair value of options granted during 2024, 2023 and 2022 were calculated using the following assumptions:

Expected life (in years)

5.86 5.00 5.00

Weighted-average expected volatility

35.28 %  

33.35 %  

35.12 % 35.28 % 33.35 %

Expected volatility range

35.09 - 35.69 %  

33.33 - 34.34 %  

32.48 % - 32.94 %  

33.88 - 35.14 % 35.09 - 35.69 % 33.33 - 34.34 %

Risk-free interest rate

3.48 - 4.72 %  

1.53 - 4.06 %  

0.39 % - 1.20 %  

3.73 - 4.58 % 3.48 - 4.72 % 1.53 - 4.06 %

Weighted-average expected dividend

1.20 %  

0.95 %  

1.13 % 1.20 % 0.95 %

Expected dividend yield range

1.13 - 1.22 %  

0.94 - 1.23 %  

0.92 % - 1.27 %  

1.03 - 1.19 % 1.13 - 1.22 % 0.94 - 1.23 %

Weighted-average fair value of grants

$ 22.41  

$ 20.91  

$ 13.29  

Expected life –

We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation.

$ 28.07 $ 22.41 $ 20.91

Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation.

We believe that this historical data is currently the best estimate of the expected term of a new option.

We use a weighted-average expected life for all awards.

Expected volatility –

Volatility is calculated using our stock’s historical volatility for the same period of time as the expected life.

Expected volatility – Volatility is calculated using our stock’s historical volatility for the same period of time as the expected life.

We have no reason to believe that its future volatility will differ from the past.

Risk-free interest rate –

The rate is based on the U.S.

Risk-free interest rate – The rate is based on the U.S.

Treasury yield curve in effect at the time of the grant for the same period of time as the expected life.

Expected dividend yield –

The calculation is based on the total expected annual dividend payout divided by the closing stock price on the date of grant.

Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the closing stock price on the date of grant.

We use the straight-line attribution method to recognize share-based compensation expense for option awards and restricted stock units with graded and cliff vesting.

1 unchanged sentence

The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest.

The expense is recognized over the requisite service period, which for us is the period between the grant date and the earlier of the award’s stated vesting term or the date the employee is eligible for early vesting based on the terms of the plans.

Total share-based compensation expense was $ 21,914 , $ 19,911 and $ 24,368 for 2024, 2023 and 2022 , respectively.

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

As of December 2, 2023 , $ 7,526  of unrecognized compensation costs related to unvested stock option awards is expected to be recognized over a weighted-average period of 0.9  years.

Unrecognized compensation costs related to unvested restricted stock units was $ 8,940  which is expected to be recognized over a weighted-average period of 0.68  years.

As of November 30, 2024 , $ 9,499 of unrecognized compensation costs related to unvested stock option awards is expected to be recognized over a weighted-average period of 1.1 years.

Unrecognized compensation costs related to unvested restricted stock units was $ 9,944 which is expected to be recognized over a weighted-average period of 0.9 years.

Stock Option Activity

The stock option activity for the years ended 

December 2, 2023, December 3, 2022, and November 27, 2021 is summarized below:

The stock option activity for the years ended November 30, 2024, December 2, 2023, and December 3, 2022 is summarized below:

Exercise Price

Outstanding at November 27, 2021

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 )  

4,972,392 $ 47.45

549,458 72.75

( 657,789 ) 45.79

Forfeited or cancelled

( 40,991 )  

( 40,991 ) 61.31

Outstanding at December 3, 2022

4,823,070  

$ 50.42  

471,975  

( 314,832 )  

4,823,070 50.42

471,975 68.27

( 314,832 ) 46.43

Forfeited or cancelled

( 38,328 )  

( 38,328 ) 63.52

Outstanding at December 2, 2023

4,941,885  

$ 52.28  

The fair value of options granted during 

2023, 2022 and 2021 was $ 10,577 , $ 5,400 and $ 17,250 , respectively.

Total intrinsic value of options exercised during 

2023, 2022 and 2021 was $ 8,015 , $ 16,877 and $ 15,261 , respectively.

For options outstanding at December 2, 2023 , the weighted-average remaining contractual life was 5.6 years and the aggregate intrinsic value was $ 121,640 .

There were 3,926,049 options exercisable at December 2, 2023 , with a weighted-average remaining contractual life of 4.9 years and an aggregate intrinsic value of $ 108,853 .

4,941,885 52.28

470,748 77.77

( 746,892 ) 48.10

Forfeited or cancelled

( 60,637 ) 64.07

Outstanding at November 30, 2024

4,605,104 55.40

The fair value of options granted during 2024, 2023 and 2022 was $ 13,214 , $ 10,577 and $ 5,400 , respectively.

Total intrinsic value of options exercised during 2024, 2023 and 2022 was $ 25,258 , $ 8,015 and $ 16,877 , respectively.

For options outstanding at November 30, 2024 , the weighted-average remaining contractual life was 5.3 years and the aggregate intrinsic value was $ 99,352 .

There were 3,756,728 options exercisable at November 30, 2024 , with a weighted-average remaining contractual life of 4.6 years and an aggregate intrinsic value of $ 96,416 .

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 

December 2, 2023, December 3, 2022, and November 27, 2021 were $ 14,619 , $ 30,122 and $ 32,325 , respectively.

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

2023, 2022 and 2021 was $ 1,885 , $ 3,687 and $ 3,874 , respectively.

Proceeds received from option exercises during the year ended November 30, 2024, December 2, 2023, and December 3, 2022 were $ 35,927 , $ 14,619 and $ 30,122 , respectively.

The Company’s actual tax benefits realized for the tax deductions related to the exercise of stock options for 2024, 2023 and 2022 was $ 6,114 , $ 1,885 and $ 3,687 , respectively.

Restricted Stock Unit Activity

The nonvested restricted stock unit activity for the years ended 

December 2, 2023, December 3, 2022, and November 27, 2021 is summarized below:

Nonvested at November 28, 2020

432,349  

$ 46.22  

356,779  

( 157,945 )  

( 78,818 )  

The nonvested restricted stock unit activity for the years ended November 30, 2024, December 2, 2023, and December 3, 2022 is summarized below:

Nonvested at November 27, 2021

$ 552,365  

$ 50.63  

179,603  

( 172,474 )  

( 68,374 )  

552,365 $ 50.63 1.9

179,603 67.92

( 172,474 ) 46.74

( 68,374 ) 45.83

Nonvested at December 3, 2022

$ 491,120  

$ 58.98  

187,185  

( 113,339 )  

( 36,276 )  

491,120 58.98 0.7

187,185 63.32

( 113,339 ) 53.83

( 36,276 ) 44.48

Nonvested at December 2, 2023

$ 528,690  

$ 62.61  

Total fair value of restricted stock units vested during 2023 , 2022 , and 

2021 was $ 6,101 , $ 8,062 and $ 7,691 , respectively.

The total fair value of nonvested restricted stock at 

December 2, 2023 was $ 33,101 .

528,690 62.61 0.7

194,689 73.34

( 297,035 ) 57.32

( 15,603 ) 70.61

Nonvested at November 30, 2024

410,741 71.21 0.9

Total fair value of restricted stock units vested during 2024 , 2023 , and 2022 was $ 17,027 , $ 6,101 and $ 8,062 , respectively.

The total fair value of nonvested restricted stock at November 30, 2024 was $ 29,250 .

We indirectly repurchased 100,560 , 37,715 and 55,081 shares during 2024, 2023 and 2022 , respectively, through a net-settlement feature in connection with the statutory minimum tax withholding related to vesting of restricted stock.

The company’s actual tax benefits realized for the tax deductions related to the restricted stock vested for 

2023, 2022 and 2021 was $ 1,396 , $ 2,569  and $ 1,439 , respectively.

The Company’s actual tax benefits realized for the tax deductions related to the restricted stock vested for 2024, 2023 and 2022 was $ 4,237 , $ 1,396 and $ 2,569 , respectively.

Deferred Compensation Activity

Deferred compensation units are fully vested at the date of contribution.

The deferred compensation units outstanding for the years ended 

December 2, 2023, December 3, 2022, and November 27, 2021 is summarized below:

The deferred compensation units outstanding for the years ended November 30, 2024, December 2, 2023, and December 3, 2022 is summarized below:

Units outstanding November 27, 2021

455,265  

44,553  

499,818  

468,524 48,361 516,885

Participant contributions

13,036  

10,487  

23,523  

89,054 12,985 102,039

Company match contributions 1

20,118  

21,167  

( 19,895 )  

( 7,728 )  

Units outstanding November 27, 2021

468,524  

48,361  

516,885  

26,843 1,299 28,142

( 118,429 ) ( 6,073 ) ( 124,502 )

Units outstanding December 3, 2022

465,992 56,572 522,564

Participant contributions

89,054  

12,985  

102,039  

13,187 12,219 25,406

Company match contributions 1

26,843  

28,142  

( 118,429 )  

( 6,073 )  

18,899 1,222 20,121

( 102,108 ) ( 6,826 ) ( 108,934 )

Units outstanding December 2, 2023

465,992  

56,572  

522,564  

395,970 63,187 459,157

Participant contributions

13,187  

12,219  

25,406  

13,103 9,309 22,412

Company match contributions 1

18,899  

20,121  

( 102,108 )  

( 6,826 )  

Units outstanding December 2, 2023

395,970  

63,187  

459,157  

1 The non-employee directors’

company match includes 17,580 , 17,937 and 18,814 deferred compensation units paid as discretionary awards to all non-employee directors in 2023, 2022 and 2021 , respectively.

The fair value of non-employee directors’

company matches for 

2023, 2022 and 2021 was $ 172 , $ 172 and $ 163 , respectively.

The fair value of the non-employee directors’

discretionary award was $ 1,200 , $ 1,080  and $ 1,215 for 

2022 and 2021 , respectively.

15,236 931 16,167

( 20,691 ) ( 8,357 ) ( 29,048 )

Units outstanding November 30, 2024

403,618 65,070 468,688

1 The non-employee directors’ company match includes 13,926 , 17,580 and 17,937 deferred compensation units paid as discretionary awards to all non-employee directors in 2024, 2023 and 2022 , respectively.

The fair value of non-employee directors’ company matches for 2024, 2023 and 2022 was $ 182 , $ 172 and $ 172 , respectively.

The fair value of the non-employee directors’ discretionary award was $ 1,200 , $ 1,200 and $ 1,080 for 2024 , 2023 and 2022 , respectively.

The fair value of employee company matches was $ 78 , $ 79 and $ 86 for 2024, 2023 and 2022 , respectively.

2 unchanged sentences

employees have the option of contributing up to 75 percent of their pre-tax earnings to a 401 (k) plan, subject to IRS limitations.

We match up to the first 4 percent of each employee's pre-tax earnings, based on the employee’s contributions.

employees are eligible for a separate annual non-discretionary retirement contribution to the 401 (k) plan of 1 percent of pay, that is invested based on the election of the individual participant.

The 1 percent contribution is in addition to our 4 percent matching contribution described above and is in lieu of participation in our defined benefit pension plan.

The total contribution to the 401 (k) plan for 

2023 was $ 14,221 which included the cost of the 4 percent company match of $ 9,853 and the additional 1 percent contribution of $ 4,368 .

T he total contributions to the 401 (k) plan were $ 12,113 and $ 12,488  in 

2022 and 2021 , respectively.

employees are eligible to receive an annual discretionary non-elective contribution to the 401 (k) plan of up to 3 percent based on achieving the company’s earnings per share target.

The total contribution to the 401 (k) plan for 2024 was $ 15,590 which included the cost of the 4 percent company match of $ 10,070 and the additional 1 percent contribution of $ 5,520 .

T he total contributions to the 401 (k) plan were $ 14,221 and $ 12,113 in 2023 and 2022 , respectively.

employees are eligible to receive an annual discretionary non-elective contribution to the 401 (k) plan of up to 3 percent based on achieving the Company’s earnings per share target.

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

There was no discretionary non-elective contribution for 2023  and a discretionary non-elective contribution of $ 950 was accrued for 

The defined contribution plan liability recorded in the Consolidated Balance Sheets was $ 11,626  

and $ 12,263  in 

2023 and 2022 , respectively, for the U.S.

There was no discretionary non-elective contribution for 2024 and 2023 .

The defined contribution plan liability recorded in the Consolidated Balance Sheets was $ 11,992 and $ 11,626 in 2024 and 2023 , respectively, for the U.S.

Plan and several statutorily required non-U.S.

2 unchanged sentences

employees employed prior to January 1, 2007.

Benefits for these plans are based primarily on each employee’s years of service and average compensation.

During 2011, we made significant changes to our U.S.

1 unchanged sentence

The changes included:

benefits under the plan were locked-in using service and salary as of May 31, 2011, participants no longer earn benefits for future service and salary as they had in the past, affected participants receive a three percent increase to the locked-in benefit for every year they continue to work for us and we are making a retirement contribution of three percent of eligible compensation to the 401 (k) Plan for those participants. 

The funding policy is consistent with the funding requirements of federal law and regulations.

Plan assets consist principally of listed equity securities and bonds.

During 2020, we amended the U.S.

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

No amounts were paid under this program in 2023 or 2022.

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 December 2, 2023 and December 3, 2022 :

Following is a reconciliation of the beginning and ending balances of the benefit obligation and fair value of plan assets as of November 30, 2024 and December 2, 2023 :

Pension Benefits

2 unchanged sentences

Benefit obligation at beginning of year

$ 269,874  

$ 361,212  

$ 154,850  

$ 238,400  

$ 24,173  

$ 31,262  

$ 255,390 $ 269,874 $ 146,796 $ 154,850 $ 22,133 $ 24,173

- - 951 - - -

- - 1,538 1,670 - -

Interest cost

13,901  

13,855 13,901 6,215 5,726 1,166 1,205

Participant contributions

- - - - 252 232

Actuarial gain 1

( 7,298 )  

( 80,296 )  

( 12,435 )  

( 57,159 )  

( 611 )  

10,747 ( 7,298 ) 3,391 ( 12,435 ) ( 125 ) ( 611 )

Plan amendments

- - 497 - - -

Settlement payments

( 141 )  

( 200 )  

( 252 )  

( 7,988 )  

- ( 141 ) - ( 252 ) - -

Benefits paid

( 20,946 )  

( 20,495 )  

( 7,663 )  

( 8,370 )  

( 2,866 )  

( 21,182 ) ( 20,946 ) ( 8,526 ) ( 7,663 ) ( 2,576 ) ( 2,866 )

Foreign currency translation effect

( 15,922 )  

- - ( 2,552 ) 4,900 - -

Benefit obligation at end of year

255,390  

269,874  

146,796  

154,850  

22,133  

24,173  

258,810 255,390 148,310 146,796 20,850 22,133

Change in plan assets

Fair value of plan assets at beginning of year

326,786  

409,811  

141,908  

216,623  

120,782  

135,701  

319,738 326,786 134,622 141,908 133,453 120,782

- - 615 - - -

Actual return on plan assets

12,811  

( 63,562 )  

( 5,545 )  

( 45,328 )  

15,160  

49,271 12,811 9,189 ( 5,545 ) 44,160 15,160

Employer contributions

1,197 1,228 1,624 1,744 85 145

Participant contributions

- - - - 252 232

Settlement payments

( 141 )  

( 200 )  

- ( 141 ) - - - -

Benefits paid 2

( 20,946 )  

( 20,495 )  

( 7,663 )  

( 8,369 )  

( 2,866 )  

( 21,182 ) ( 20,946 ) ( 8,526 ) ( 7,663 ) ( 2,575 ) ( 2,866 )

Foreign currency translation effect

( 22,658 )  

- - ( 1,957 ) 4,178 - -

Fair value of plan assets at end of year

319,738  

326,786  

134,622  

141,908  

133,453  

120,782  

349,024 319,738 135,567 134,622 175,375 133,453

Plan assets in excess of (less than) benefit obligation as of year end

$ 64,348  

$ 56,912  

$ ( 12,174 )  

$ ( 12,942 )  

$ 111,320  

$ 96,608  

1 Actuarial gain in 

2023 and 2022 for the U.S.

$ 90,214 $ 64,348 $ ( 12,743 ) $ ( 12,174 ) $ 154,525 $ 111,320

1 Actuarial gain in 2024 and 2023 for the U.S.

Plans is primarily due to assumption changes.

Actuarial gain in 

2023 and 2022 for the Non-U.S.

Actuarial gain in 2024 and 2023 for the Non-U.S.

Plans are due to both assumption changes and plan experience.

4 unchanged sentences

Unrecognized actuarial loss (gain)

$ 143,522  

$ 137,351  

$ 49,128  

$ 49,306  

$ ( 14,442 )  

$ 126,583 $ 143,522 $ 47,595 $ 49,128 $ ( 47,532 ) $ ( 14,442 )

Unrecognized prior service cost

- - 1,600 1,196 - -

Ending balance

$ 143,522  

$ 137,351  

$ 50,324  

$ 50,525  

$ ( 14,442 )  

$ 126,583 $ 143,522 $ 49,195 $ 50,324 $ ( 47,532 ) $ ( 14,442 )

Pension Benefits

2 unchanged sentences

Non-current assets

$ 76,677  

$ 69,826  

$ 15,635  

$ 16,790  

$ 113,431  

$ 98,848  

$ 102,637 $ 76,677 $ 16,846 $ 15,635 $ 156,576 $ 113,431

Accrued benefit cost

Current liabilities

( 1,239 )  

( 1,248 )  

( 1,464 )  

( 1,727 )  

( 218 )  

( 1,239 ) ( 1,239 ) ( 1,443 ) ( 1,464 ) ( 214 ) ( 218 )

Non-current liabilities

( 11,089 )  

( 11,666 )  

( 26,345 )  

( 28,006 )  

( 1,893 )  

( 11,184 ) ( 11,089 ) ( 28,146 ) ( 26,345 ) ( 1,837 ) ( 1,893 )

Ending balance

$ 64,349  

$ 56,912  

$ ( 12,174 )  

$ ( 12,943 )  

$ 111,320  

$ 96,609  

$ 90,214 $ 64,349 $ ( 12,743 ) $ ( 12,174 ) $ 154,525 $ 111,320

The accumulated benefit obligation of the U.S.

pension and other postretirement plans was $ 273,197 at 

December 2, 2023 and $ 289,049  at December 3, 2022 .

pension and other postretirement plans was $ 275,599 at November 30, 2024 and $ 273,197 at December 2, 2023 .

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

pension plans was $ 141,402 at 

December 2, 2023 and $ 148,927  at December 3, 2022 .

The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of December 2, 2023 and December 3, 2022 :

pension plans was $ 142,503 at November 30, 2024 and $ 141,402 at December 2, 2023 .

The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of November 30, 2024 and December 2, 2023 :

Pension Benefits and Other Postretirement Benefits

Accumulated benefit obligation

$ 12,329  

$ 12,914  

$ 35,034  

$ 36,820  

$ 12,423 $ 12,329 $ 36,809 $ 35,034

Fair value of plan assets

The following amounts relate to pension plans with projected benefit obligations in excess of plan assets as of December 2, 2023 and December 3, 2022 :

- - 10,046 9,700

The following amounts relate to pension plans with projected benefit obligations in excess of plan assets as of November 30, 2024 and December 2, 2023 :

Pension Benefits and Other Postretirement Benefits

Projected benefit obligation

$ 12,329  

$ 12,914  

$ 37,510  

$ 39,350  

$ 12,423 $ 12,329 $ 39,635 $ 37,510

Fair value of plan assets

$ 9,700  

- - $ 10,046 9,700

Information about the expected cash flows is as follows:

3 unchanged sentences

Expected benefit payments

21,330  

21,351  

21,251  

21,168  

2028- 2033  

121,219  

53,787  

11,487  

21,474 8,332 2,606

21,376 8,573 2,491

21,267 8,897 2,338

21,215 8,634 2,210

2029- 2034 119,274 53,638 10,424

The components of our net period defined benefit pension and postretirement benefit costs other than service cost are presented as non-operating expenses and service cost is presented in operating expenses.

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

December 2, 2023, December 3, 2022, and November 27, 2021 are as follows:

Components of net periodic benefit cost and other supplemental information for the years ended November 30, 2024, December 2, 2023, and December 3, 2022 are as follows:

Pension Benefits

1 unchanged sentence

Net periodic cost (benefit)

$ 1,670  

$ 2,765  

$ 3,280  

$ - $ - $ - $ 1,538 $ 1,670 $ 2,765 $ - $ - $ -

Interest cost

13,901  

13,855 13,901 9,653 6,215 5,726 2,893 1,166 1,205 748

Expected return on assets

( 28,821 )  

( 29,018 )  

( 31,123 )  

( 7,027 )  

( 6,465 )  

( 12,348 )  

( 9,859 )  

( 11,084 )  

( 26,220 ) ( 28,821 ) ( 29,018 ) ( 6,587 ) ( 7,027 ) ( 6,465 ) ( 10,909 ) ( 9,859 ) ( 11,084 )

Amortization:

Prior service (benefit) cost

- - ( 3 ) 84 62 63 - - -

Actuarial loss (gain)

( 3,445 )  

4,637 2,541 4,132 2,066 1,993 2,411 ( 287 ) - ( 3,445 )

Settlement charge

- - - - 19 3,329 - - -

Net periodic (benefit) cost

$ ( 12,379 )  

$ ( 15,237 )  

$ ( 18,629 )  

$ 2,443  

$ 4,996  

$ ( 2,005 )  

$ ( 8,654 )  

$ ( 13,781 )  

$ ( 7,728 ) $ ( 12,379 ) $ ( 15,237 ) $ 3,314 $ 2,443 $ 4,996 $ ( 10,030 ) $ ( 8,654 ) $ ( 13,781 )

Pension Benefits

2 unchanged sentences

Discount rate

5.66 %  

5.36 %  

2.75 %  

4.37 %  

3.70 %  

1.27 %  

5.61 %  

5.29 %  

5.23 % 5.66 % 5.36 % 4.03 % 4.37 % 3.70 % 5.09 % 5.61 % 5.29 %

Rate of compensation increase 1

0.00 %  

1.82 %  

1.83 %  

1.48 %  

0.00 % 0.00 % 0.00 % 1.76 % 1.82 % 1.83 % N/A N/A N/A

Weighted-average assumptions used to determine net costs for years ended

Discount rate

5.36 %  

2.75 %  

2.50 %  

3.71 %  

1.29 %  

1.19 %  

5.29 %  

2.51 %  

5.66 % 5.36 % 2.75 % 4.36 % 3.71 % 1.29 % 5.61 % 5.29 % 2.51 %

Expected return on plan assets

7.75 %  

7.00 %  

7.24 %  

5.02 %  

3.49 %  

6.15 %  

8.25 %  

7.75 % 7.75 % 7.00 % 5.01 % 5.02 % 3.49 % 8.25 % 8.25 % 8.25 %

Rate of compensation increase 1

0.00 %  

1.82 %  

1.68 %  

1.67 %  

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. 

0.00 % 0.00 % 0.00 % 1.86 % 1.82 % 1.68 % 0.00 % 0.00 % 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 discount rate assumption is determined using an actuarial yield curve approach, which results in a discount rate that reflects the characteristics of the plan.

1 unchanged sentence

We use this approach rather than a specific index that has a certain set of bonds that may or may not be representative of the characteristics of our particular plan.

A higher discount rate reduces the present value of the pension obligations.

A higher discount rate reduces the present value of the pension obligations.

The discount rate for the U.S.

pension plan was 5.66 percent at December 2, 2023 , 5.36 percent at 

December 3, 2022 and 2.76 percent at November 27, 2021 .

pension plan was 5.23 percent at November 30, 2024 , 5.66 percent at December 2, 2023 and 5.36 percent at December 3, 2022 .

Net periodic pension cost for a given fiscal year is based on assumptions developed at the end of the previous fiscal year.

A discount rate change of 0.5 percentage points at 

December 2, 2023 would impact U.S.

pension and other postretirement plan (income) expense by approximately $ 149  (pre-tax) in fiscal 2024.

A discount rate change of 0.5 percentage points at November 30, 2024 would impact U.S.

pension and other postretirement plan (income) expense by approximately $ 144 (pre-tax) in fiscal 2025.

Discount rates for non-U.S.

2 unchanged sentences

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

pension plan was 7.75 percent in 2023 , 

7.00 percent in 

2022 and 7.25 percent in 

2021 . Our expected long-term rate of return on U.S.

pension plan was 7.75 percent in 2024 , 7.75 percent in 2023 and 7.00 percent in 2022 .

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.

Management, in conjunction with our external financial advisors, determines the expected long-term rate of return on plan assets by considering the expected future returns and volatility levels for each asset class that are based on historical returns and forward-looking observations.

For 2023 , the expected long-term rate of return on the target equities allocation was 8.50  p ercent and the expected long-term rate of return on the target fixed-income allocation was 5.60  percent.

For 2024 , the expected long-term rate of return on the target equities allocation was 8.50 p ercent and the expected long-term rate of return on the target fixed-income allocation was 5.60 percent.

The total plan rate of return assumption included an estimate of the effect of diversification and the plan expense.

A change of 0.5 percentage points for the expected return on assets assumption would impact U.S.

net pension and other postretirement plan expense by approxi mately $ 2,266  

net pension and other postretirement plan expense by approxi mately $ 2,622 (pre-tax).

Management, in conjunction with our external financial advisors, uses the actual historical rates of return of the asset categories to assess the reasonableness of the expected long-term rate of return on plan assets.

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

pension plans was a weighted-average of 5.02 percent in 

2023 compared to 3.49 percent in 

2022 and 6.15  percent in 2021 .

pension plans was a weighted-average of 5.01 percent in 2024 compared to 5.02 percent in 2023 and 3.49 percent in 2022 .

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

plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the effect of active management of the plan’s assets.

plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan.

Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the effect of active management of the plan’s assets.

Our largest non-U.S.

4 unchanged sentences

Health care cost trend rate assumed for next year

6.25 %  

6.50 %  

6.00 % 6.25 % 6.50 %

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)

5.75 %  

5.75 % 5.75 % 5.75 %

Fiscal year that the rate reaches the ultimate trend rate

The asset allocation for the company’s U.S.

pension plans at the end of 

2023 and 

2022 follows.

2026 2026 2026

The asset allocation for the Company’s U.S.

pension plans at the end of 2024 and 2023 follows.

Pension Plans

8 unchanged sentences

Asset Category

55.0 %  

53.8 %  

53.1 %  

21.0 %  

22.0 %  

25.5 %  

45.0 %  

44.9 %  

45.8 %  

79.0 %  

77.2 %  

70.0 %  

100.0 %  

99.5 %  

55.0 % 52.4 % 53.8 % 21.7 % 23.0 % 22.0 % 0.0 % 0.0 % 0.0 %

45.0 % 46.1 % 44.9 % 78.3 % 76.5 % 77.2 % 0.0 % 0.0 % 0.0 %

0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 100.0 % 98.0 % 99.5 %

0.0 % 1.5 % 1.3 % 0.0 % 0.5 % 0.8 % 0.0 % 2.0 % 0.5 %

100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %

Plan Asset Management

7 unchanged sentences

Plan assets are invested using a combination of active and passive investment strategies.

Passive, or “indexed”

strategies, attempt to mimic rather than exceed the investment performance of a market benchmark.

The plans’

active investment strategies employ multiple investment management firms which in aggregate cover a range of investment styles and approaches.

Passive, or “indexed” strategies, attempt to mimic rather than exceed the investment performance of a market benchmark.

The plans’ active investment strategies employ multiple investment management firms which in aggregate cover a range of investment styles and approaches.

Performance is monitored and compared to relevant benchmarks on a regular basis.

pension plans consist of two plans:

a pension plan and a supplemental executive retirement plan (“SERP”).

There were no assets in the SERP in 

2023 and 2022 .

a pension plan and a supplemental executive retirement plan (“SERP”).

There were no assets in the SERP in 2024 and 2023 .

Consequently, all of the data disclosed in the asset allocation table for the U.S.

3 unchanged sentences

pension plans consist of all the pension plans administered outside the U.S., principally consisting of plans in Germany and the United Kingdom.

2023 , we maintained our assets for the non-U.S.

During 2024 , we maintained our assets for the non-U.S.

pension plans at the specific target asset allocation mix determined for each plan plus or minus the allowed rate and continued our focus to reduce volatility of plan assets in future periods and to more closely match the duration of the assets with the duration of the liabilities of the individual plans.

2 unchanged sentences

a retiree medical health care plan and a group term life insurance plan.

There were no assets in the group term life insurance plan for 

2023 and 2022 .

There were no assets in the group term life insurance plan for 2024 and 2023 .

Consequently, all of the data disclosed in the asset allocation table for other postretirement plans pertain to our retiree medical health care plan.

3 unchanged sentences

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

December 2, 2023

November 30, 2024

Pension Plans

$ 172,166  

129,044  

$ - $ 183,061 $ - $ 183,061

- 134,261 - 134,261

5,169 - - 5,169

Total categorized in the fair value hierarchy

301,210  

305,264  

5,169 317,322 - 322,491

Other investments measured at NAV 1

14,474  

$ 4,054  

$ 301,210  

$ 319,738  

$ 5,169 $ 317,322 $ - $ 349,024

Pension Plans

$ 29,601  

40,686  

41,412  

$ 31,015 $ - $ - $ 31,015

41,869 - 722 42,591

Total categorized in the fair value hierarchy

71,424  

72,150  

Other investments measured at NAV 1  

62,472  

$ 71,424  

$ 134,622  

73,558 - 1,325 74,883

Other investments measured at NAV 1

$ 73,558 $ - $ 1,325 $ 135,567

Other Postretirement Benefits

Level 3 balance at beginning of year

$ 119,446  

$ 135,484  

Net transfers out of level 3

$ 132,754 $ 119,446

Purchases, sales, issuances and settlements, net

( 1,144 )  

Net gains/(losses)

14,452  

( 1,431 ) ( 1,144 )

40,486 14,452

Level 3 balance at end of year

$ 132,754  

$ 119,446  

$ 171,809 $ 132,754

Income before income taxes and income from equity method investments

United States

$ 15,276  

$ 63,718  

$ 14,989  

218,885  

188,210  

201,862  

$ 234,161  

$ 251,928  

$ 216,851  

$ ( 46,064 ) $ 15,276 $ 63,718

228,727 218,884 188,210

$ 182,663 $ 234,160 $ 251,928

Components of the provision for income tax expense (benefit)

$ 18,347  

$ 12,181  

$ 10,310  

87,449  

63,750  

57,801  

111,325  

79,320  

70,376  

( 100 )  

( 4,111 )  

( 1,767 )  

( 13,585 )  

( 8,517 )  

( 17,796 )  

( 2,134 )  

$ 93,529  

$ 77,186  

$ 63,033  

$ 14,150 $ 18,347 $ 12,181

4,104 5,529 3,389

92,721 87,449 63,750

110,975 111,325 79,320

( 44,784 ) ( 100 ) 8,150

( 4,442 ) ( 4,111 ) ( 1,767 )

( 5,368 ) ( 13,585 ) ( 8,517 )

( 54,594 ) ( 17,796 ) ( 2,134 )

$ 56,381 $ 93,529 $ 77,186

Reconciliation of effective income tax

1 unchanged sentence

federal income tax rate

$ 49,174  

$ 52,760  

$ 45,539  

$ 38,359 $ 49,174 $ 52,760

State income taxes, net of federal benefit

Foreign dividend repatriation 1  

21,730  

( 307 ) 1,137 1,252

Foreign dividend repatriation

1,943 21,730 2,596

Foreign operations

12,558  

19,673  

13,232 12,558 1,868

Executive compensation over $1.0 million

1,690 784 2,847

stock option expense

Change in valuation allowance

( 1,800 ) 725 3,187

Research and development tax credit

( 1,400 )  

( 927 )  

( 1,460 ) ( 1,400 ) ( 927 )

Foreign-derived intangible income

( 2,665 )  

( 2,786 )  

( 625 ) ( 2,665 ) ( 2,786 )

Global intangible low-taxed income

1,581 2,345 1,890

Provision to return

( 1,595 ) 1,336 840

Cross currency swap

Contingency reserve

3,416 5,951 5,909

Excess Tax Benefit Related to Stock Options & Restricted Stock

( 3,083 ) ( 850 ) ( 2,016 )

Goodwill Impairment Related to Flooring

1,981 1,974 2,221

Total income tax expense

$ 93,529  

$ 77,186  

$ 63,033  

$ 56,381 $ 93,529 $ 77,186

1 Foreign dividend repatriation line includes impact of withholding tax recorded on earnings that are no longer permanently reinvested.

2 unchanged sentences

Pension and other post-retirement benefit plans

$ 5,306  

$ 6,752  

$ 4,318 $ 5,306

Employee benefit costs

27,672  

25,196  

28,116 27,672

Foreign tax credit carryforward

Tax loss carryforwards

25,894  

22,948  

12,716  

20,059 25,894

16,203 12,716

Hedging activity

18,638  

13,299  

11,688 18,638

Interest deduction limitation

37,519  

17,736  

33,022  

28,840  

57,233 37,519

31,026 33,022

Gross deferred tax assets

167,305  

131,193  

176,198 167,305

valuation allowance

( 15,595 )  

( 11,696 ) ( 15,595 )

Total net deferred tax assets

151,710  

116,769  

164,502 151,710

Deferred tax liability:

Depreciation and amortization

( 209,266 )  

( 187,897 ) ( 209,266 )

Pension and other post-retirement benefit plans

( 41,444 )  

( 58,119 ) ( 41,444 )

Undistributed earnings of non-U.S.

( 21,926 )  

( 12,510 )  

( 4,933 ) ( 21,926 )

( 15,948 ) ( 12,510 )

Total deferred tax liability

( 285,146 )  

( 266,897 ) ( 285,146 )

Net deferred tax liability

$ ( 133,436 )  

$ ( 102,395 ) $ ( 133,436 )

The difference between the change in the deferred tax liability on the balance sheet and the deferred tax provision is primarily related to the defined benefit pension plan adjustment and hedges recorded in accumulated other comprehensive income (loss) offset by liabilities established in purchase accounting.

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 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.

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.

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.

We record a valuation allowance to reduce deferred tax assets to the amount that is believed more-likely-than- not to be realized.

We believe it is more-likely-than- not that reversal of deferred tax liabilities and forecasted income will be sufficient to fully recover the net deferred tax assets not already offset by a valuation allowance.

We believe it is more-likely-than- not that reversal of deferred tax liabilities and forecasted income will be sufficient to fully recover the net deferred tax assets not already offset by a valuation allowance.

In the event that all or part of the gross deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made.

income taxes have not been provided on approximately $ 1,154,354  of undistributed earnings of non-U.S.

income taxes have not been provided on approximately $ 1,197,517 of undistributed earnings of non-U.S.

subsidiaries.

9 unchanged sentences

A valuation allowance has been recorded against this foreign tax credit carryforward to reflect that this amount is not more-likely-than- not to be realized.

The table below sets forth the changes to our gross unrecognized tax benefit as a result of uncertain tax positions, excluding accrued interest. 

We do not anticipate that the total unrecognized tax benefits will change significantly within the next twelve months.

Balance at beginning of year

$ 17,582  

$ 13,281  

$ 14,254 $ 17,582

Tax positions related to the current year:

Tax positions related to prior years:

( 965 )  

( 8,156 )  

( 755 ) ( 965 )

( 775 ) ( 8,156 )

Lapses in applicable statutes of limitation

( 588 )  

( 2,595 ) ( 588 )

Balance at end of year

$ 14,254  

$ 17,582  

Included in the balance of unrecognized tax benefits as of 

December 2, 2023 and December 3, 2022 are potential benefits of $ 10,338  and $ 12,663  respectively, that, if recognized, would affect the effective tax rate.

$ 15,590 $ 14,254

Included in the balance of unrecognized tax benefits as of November 30, 2024 and December 2, 2023 are potential benefits of $ 12,431 and $ 10,338 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 December 2, 2023 , we recognized a net benefit for interest and penalties of $ 824  relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $ 6,708 as of December 2, 2023 .

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 30, 2024 , we recognized a net benefit for interest and penalties of $ 658 relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $ 4,840 as of November 30, 2024 .

For the year ended December 2, 2023 , we recognized a net benefit for interest and penalties of $ 824 relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $ 6,708 as of December 2, 2023 .

We are subject to U.S.

1 unchanged sentence

We are no longer subject to U.S.

federal tax examination for years prior to 2020  or Swiss income tax examination for years prior to 2020.

During the second quarter of 2016, H.B.

federal tax examination for years prior to 2021 or Swiss income tax examination for years prior to 2022.

During the fourth quarter of 2024, H.B.

Fuller (China) Adhesives, Ltd.

was notified of a transfer pricing audit covering the calendar years 2005 through 2014.

settled its transfer pricing audit covering the calendar years 2005 through 2014.

We are in various stages of examination and appeal in other foreign jurisdictions.

2 unchanged sentences

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 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.

2 unchanged sentences

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.

The company evaluates hedge effectiveness at inception and on an ongoing basis.

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.

4 unchanged sentences

Cash Flow Hedges

On January 12, 2023, we entered into an interest rate swap agreement to convert $ 400,000 of our variable rate 1 -month LIBOR rate debt to a fixed rate of 

3.6895 percent that matures on January 12, 2028.

On February 28, 2023, after refinancing our debt, we amended the interest rate swap agreement to our 1 -month SOFR rate debt to a fixed rate of 3.7260 in accordance with the practical expedients included in ASC 848, Reference Rate Reform .

The combined fair value of the interest rate swap was an asset of $ 2,458 at December 2, 2023 and was included in other assets in the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

We are applying the hypothetical derivative method to assess hedge effectiveness for this interest rate swap.

Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our variable rate debt are compared with the change in the fair value of the swap.

O n March 16, 2023, we entered into an interest rate swap agreement to convert $ 300,000 of our 1 -month SOFR rate debt to a fixed rate of 3.7210 percent that matures on February 15, 2028.

The combined fair value of the interest rate swap was an asset of $ 1,174 at December 2, 2023 and was included in other assets in the Consolidated Balance Sheets.

On January 12, 2023, we entered into an interest rate swap agreement to convert $ 400,000 of our variable rate 1 -month LIBOR debt to a fixed rate of 3.6895 percent that matures on January 12, 2028.

On February 28, 2023, after refinancing our debt, we amended the interest rate swap agreement to our 1 -month SOFR debt to a fixed rate of 3.7260 in accordance with the practical expedients included in ASC 848, Reference Rate Reform .

The combined fair value of the interest rate swap was an asset of $ 1,120 at November 30, 2024 and was included in other assets in the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

We are applying the hypothetical derivative method to assess h edge effectiveness for this interest rate swap.

Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our variable rate debt are compared with the change in the fair value of the swaps.

On March 16, 2023, we entered into an interest rate swap agreement to convert $ 100,000 of our 1 -month SOFR rate debt to a fixed rate of 3.8990 percent that matures on February 15, 2028.

The combined fair value of the interest rate swap was a liability of $ 63 at December 2, 2023 and was included in other liabilities in the Consolidated Balance Sheets.

We are applying the hypothetical derivative method to assess hedge effectiveness for this interest rate swap.

Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our variable rate debt are compared with the change in the fair value of the swap.

On March 16, 2023, we entered into an interest rate swap agreement to convert $ 300,000 of our 1 -month SOFR debt to a fixed rate of 3.7210 percent that matures on February 15, 2028.

The combined fair value of the interest rate swap was an asset of $ 661 at November 30, 2024 and was included in other assets in the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

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 variable rate debt are compared with the change in the fair value of the swaps.

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

We are applying the hypothetical derivative method to assess h edge effectiveness for this interest rate swap.

Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our variable rate debt are compared with the change in the fair value of the swaps.

On March 16, 2023, we entered into an interest rate swap agreement to convert $ 100,000 of our 1 -month SOFR debt to a fixed rate of 3.8990 percent that matures on February 15, 2028.

The combined fair value of the interest rate swap was a liability of $ 265 at November 30, 2024 and was included in other liabilities in the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

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 variable rate debt are compared with the change in the fair value of the swaps.

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.

On June 30, 2023, 1 -month LIBOR rates ceased to exist and the IBOR Fallbacks Protocol published by the International Swaps and Derivatives Association (ISDA) took effect as outlined in the interest rate swap agreement.

As a result, the 1 -month LIBOR leg of the float-to-float agreement was converted to Overnight SOFR plus 3.28 percent.

On July 17, 2023, we amended the 1 -month EURIBOR leg of the float-to-float agreement to Overnight ESTR plus 3.2195 percent.

We applied the practical expedients included in ASC 848, Reference Rate Reform .

As of November 30, 2024 , the combined fair value of the swaps was a liability of $ 51,871 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 sw aps was a loss of $ 37,481 a s of November 30, 2024 .

As of November 30, 2024 , we 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.

The amounts of pretax gains (losses) recogn ized in comprehensive income related to derivative instruments designated as cross-currency swaps, interest rate swaps and net investment hedges are as follows:

November 30, 2024

December 2, 2023

December 3, 2022

November 27, 2021

Cross-currency swap contracts

$ ( 3,536 )  

Cross-currency swaps

$ - $ - $ 5,536

Interest rate swap contracts

$ 5,932  

$ 13,148  

$ 20,109  

$ ( 14,831 ) $ 5,932 $ 13,148

Net investment hedges

$ ( 18,555 )  

$ ( 54,040 )  

$ 23,058 $ ( 18,555 ) $ ( 54,040 )

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.

On June 30, 2023, 1 -month LIBOR rates ceased to exist and the IBOR Fallbacks Protocol published by the International Swaps and Derivatives Association ("ISDA") took effect as outlined in the interest rate swap agreement.

As a result, the interest rate swap agreements were converted to Overnight SOFR plus 3.28 percent.

We applied the practical expedients included in ASC 848, Reference Rate Reform . See Note 7 for further discussion on the issuance of our Public Notes.

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.

As a result, the interest rate swap agreement was converted to Overnight SOFR plus 3.28 percent.

We applied the practical expedients included in ASC 848, Reference Rate Reform .

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

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

The combined fair value of the interest rate swaps w as a liability of $ 41,532  at 

December 2, 2023 , and was included in other liabilities in the Cons olidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges.

The combined fair value of the interest rate swap s was a liability of $ 32,775 at November 30, 2024 , and was included in other liabilities in the Cons olidated 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. 

On February 14, 2017, we entered into an interest rate swap agreement to convert $ 150,000 of our $ 300,000 Public Notes that were issued on February 14, 2017 to a variable interest rate of 1 -month LIBOR plus 1.86 percent.

On February 14, 2017, we entered into an interest rate swap agreement to convert $ 150,000 of our $300,000 Public Notes that were issued on February 14, 2017 to a variable interest rate of 1 -month LIBOR plus 1.86 percent.

The swap was designated for hedge accounting treatment as a fair value hedge.

4 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 June 30, 2023, 1 -month LIBOR rates ceased to exist and the IBOR Fallbacks Protocol published by the International Swaps and Derivatives Association (ISDA) took effect as outlined in the interest rate swap agreement.

As a result, the 1 -month LIBOR leg of the float-to-float agreement was converted to Overnight SOFR plus 3.28 percent.

On July 17, 2023, we amended the 1 -month EURIBOR leg of the float-to-float agreement to Overnight ESTR plus 3.2195 percent.

We applied the practical expedients included in ASC 848, Reference Rate Reform . As of December 2, 2023 , the combined fair value of the swaps was a liability of $ 72,589 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 sw aps was a loss of $ 54,850  

as of December 2, 2023 . The amounts of pretax loss recognized in comprehensive income related to the net investment hedge was $ 18,712 in 2023.

As of December 2, 2023 , we 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 December 2, 2023 , we had forward foreign currency contracts maturing bet ween December 4, 2023 and May 13, 2024.

As of November 30, 2024 , we had forward foreign currency contracts maturing bet ween December 2, 2024 and February 4, 2025.

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:

The amounts of pretax (losses) gains recognized in other (expense) income, net related to derivative instruments not designated as hedging instruments are as follows:

November 30, 2024

December 2, 2023

December 3, 2022

November 27, 2021

Foreign currency forward contracts

$ 8,497  

$ 5,711  

$ ( 4,927 ) $ 8,497 $ 5,711

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 December 2, 2023 , there were no significant concentrations of credit risk.

As of November 30, 2024 , there were no significant concentrations of credit risk.

Fair Value Measurements

7 unchanged sentences

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.

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 December 2, 2023 and December 3, 2022 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

Fair Value Measurements

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of November 30, 2024 and December 2, 2023 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

Fair Value Measurements Using:

Marketable securities

$ 19,314  

$ 8,584 $ 8,584 $ - $ -

Foreign exchange contract assets

13,501  

Interest rate swaps, cash flow hedge assets

2,147 - 2,147 -

Interest rate swaps, cash flow hedge asset

1,781 - 1,781 -

Foreign exchange contract liabilities

$ 5,004  

Interest rate swaps, cash flow hedge liabilities

$ 7,074 $ - $ 7,074 $ -

Interest rate swaps, cash flow hedge liability

Interest rate swaps, fair value hedge liabilities

41,532  

32,775 - 32,775 -

Net investment hedge liability

72,589  

Contingent consideration liability

Fair Value Measurements

51,871 - 51,871 -

Fair Value Measurements Using:

Marketable securities

$ 4,013  

$ 19,314 $ 19,314 $ - $ -

Foreign exchange contract assets

10,282  

13,501 - 13,501 -

Interest rate swaps, cash flow hedge assets

3,632 - 3,632

Foreign exchange contract liabilities

$ 4,570  

Cross-currency cash flow hedge liabilities

42,542  

$ 5,004 $ - $ 5,004 $ -

Interest rate swaps, cash flow hedge liabilities

54,046  

Interest rate swaps, fair value hedge liabilities

41,532 - 41,532 -

Net investment hedge liability

72,589 - 72,589 -

Contingent consideration liability

The valuation of our contingent consideration liability related to the acquisitions of GSSI and TissueSeal was $ 870 and $ 500 , respectively, as of December 2, 2023 .

As of December 2, 2023 , the agreement provisions for the ZKLT contingent consideration were met, and as a result, $ 4,132 was paid during 2023.

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.

1,370 - - 1,370

The valuation of our contingent consideration liability related to the acquisitions of GSSI and TissueSeal was $ 870 and $ 500 , respectively, as of December 2, 2023 .

Contingent consideration of $ 870 related to the acquisition of GSSI was paid during 2024 following the completion of certain performance goals and conditions and contingent consideration of $ 500 related to the acquisition of TissueSeal was reversed during 2024 as conditions for payment were not met.

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.

Contingent consideration liability

Level 3 balance at beginning of year

$ 1,977  

Fair value adjustment

Payment of contingent consideration

Mark to market adjustment

Reversal of contingent consideration

Level 3 balance at end of year

$ 1,370  

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 

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.

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

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 $ 5,034  and $ 5,754  as of December 2, 2023 and December 3, 2022 , respectively, for probable and reasonably estimable environmental remediation costs. Of the amount reserved, $ 2,301  and $ 2,789  as of December 2, 2023 and December 3, 2022 , 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 $ 3,445 and $ 5,034 as of November 30, 2024 and December 2, 2023 , respectively, for probable and reasonably estimable environmental remediation costs.

Of the amount reserved, $ 1,055 and $ 2,301 as of November 30, 2024 and December 2, 2023 , 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.

3 unchanged sentences

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.

9 unchanged sentences

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.

3 unchanged sentences

Settlement amounts

$ 4,200  

$ 1,208 $ 4,200 $ 296

Insurance payments received or expected to be received

$ 2,379  

$ 844 $ 2,379 $ 195

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.

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.

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.

2 unchanged sentences

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.

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.

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.

Reportable operating segment financial information for all periods presented is as follows:

Hygiene, Health and Consumable Adhesives

$ 1,601,487  

$ 1,695,934  

$ 1,472,756  

$ 1,546,351 $ 1,601,487 $ 1,695,934

Engineering Adhesives

1,428,744  

1,532,639  

1,371,756  

1,459,137 1,428,744 1,532,639

Construction Adhesives

480,703  

520,610  

433,519  

$ 3,510,934  

$ 3,749,183  

$ 3,278,031  

563,248 480,703 520,610

$ 3,568,736 $ 3,510,934 $ 3,749,183

Segment operating income (loss)

Hygiene, Health and Consumable Adhesives

$ 215,088  

$ 165,786  

$ 138,366  

$ 187,413 $ 215,088 $ 165,786

Engineering Adhesives

187,346  

168,873  

135,913  

193,038 187,346 168,873

Construction Adhesives

22,989  

14,148  

 Total segment

408,395  

357,648  

288,427  

25,304 5,961 22,989

Total segment

405,755 408,395 357,648

Corporate Unallocated 1

( 53,258 )  

( 34,930 )  

$ 355,137  

$ 322,718  

$ 252,612  

( 57,535 ) ( 53,258 ) ( 34,930 )

$ 348,220 $ 355,137 $ 322,718

Depreciation and amortization

Hygiene, Health and Consumable Adhesives

$ 53,398  

$ 46,374  

$ 45,919  

$ 53,359 $ 53,398 $ 46,374

Engineering Adhesives

63,143  

58,307  

61,082  

73,041 63,143 58,307

Construction Adhesives

41,915  

41,713  

35,002  

44,173 41,915 41,713

Corporate Unallocated 1

$ 159,840  

$ 146,976  

$ 143,174  

4,137 1,384 582

$ 174,710 $ 159,840 $ 146,976

Total assets 2

Hygiene, Health and Consumable Adhesives

$ 1,661,122  

$ 1,488,277  

$ 1,610,902 $ 1,661,122

Engineering Adhesives

1,627,715  

1,610,015  

1,687,391 1,627,715

Construction Adhesives

990,296  

987,610  

444,442  

377,727  

$ 4,723,575  

$ 4,463,629  

1,085,811 990,296

549,140 444,442

$ 4,933,244 $ 4,723,575

Capital expenditures

Hygiene, Health and Consumable Adhesives

$ 67,933  

$ 110,877  

$ 87,945 $ 67,933

Engineering Adhesives

14,888  

( 2,302 )  

11,071 14,888

Construction Adhesives

( 5,772 )  

31,776  

27,161  

$ 119,137  

$ 129,964  

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.

33,740 31,776

$ 139,238 $ 119,137

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

$ 355,137  

$ 322,718  

$ 252,612  

Other income, net

12,952  

32,855  

$ 348,220 $ 355,137 $ 322,718

Other (expense) income, net

( 37,115 ) 9,682 12,952

Interest expense

( 134,602 )  

( 91,521 )  

( 133,124 ) ( 134,602 ) ( 91,521 )

Interest income

4,682 3,943 7,779

Income before income taxes and income from equity method investments

$ 234,160  

$ 251,928  

$ 216,851  

$ 182,663 $ 234,160 $ 251,928

Financial information about geographic areas

United States

$ 1,551,846  

$ 1,692,903  

$ 1,421,623  

430,948  

462,587  

433,998  

393,029  

419,141  

409,193  

$ 1,623,854 $ 1,551,846 $ 1,692,903

438,512 430,948 462,587

362,919 393,029 419,141

Countries with more than 10 percent of total

2,375,823  

2,574,631  

2,264,814  

2,425,285 2,375,823 2,574,631

All other countries with less than 10 percent of total

1,135,111  

1,174,552  

1,013,217  

$ 3,510,934  

$ 3,749,183  

$ 3,278,031  

1,143,451 1,135,111 1,174,552

$ 3,568,736 $ 3,510,934 $ 3,749,183

Property, Plant and Equipment, net

United States

$ 425,765  

$ 375,353  

$ 331,864  

114,266  

107,903  

120,548  

110,061  

101,563  

96,300  

$ 472,084 $ 425,765 $ 375,353

109,665 110,061 101,563

98,233 114,266 107,903

All other countries with less than 10 percent of total

174,563  

148,848  

146,655  

$ 824,655  

$ 733,667  

$ 695,367  

201,945 174,563 148,848

$ 881,927 $ 824,655 $ 733,667

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:

December 2, 2023

November 30, 2024

Hygiene, Health and Consumable

$ 919,024  

$ 577,751  

$ 363,517  

$ 1,860,292  

476,397  

460,327  

85,738  

1,022,462  

206,066  

390,666  

31,448  

628,180  

$ 1,601,487  

$ 1,428,744  

$ 480,703  

$ 3,510,934  

$ 882,614 $ 617,171 $ 413,984 $ - $ 1,913,769

455,751 451,174 117,553 - 1,024,478

207,986 390,792 31,711 - 630,489

$ 1,546,351 $ 1,459,137 $ 563,248 $ - $ 3,568,736

December 2, 2023

Hygiene, Health and Consumable

$ 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

$ 919,024 $ 577,751 $ 363,517 $ - $ 1,860,292

476,397 460,327 85,738 - 1,022,462

206,066 390,666 31,448 - 628,180

$ 1,601,487 $ 1,428,744 $ 480,703 $ - $ 3,510,934

December 3, 2022

Hygiene, Health and Consumable

$ 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  

$ 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

Subsequent Events

On December 2, 2024, we completed the acquisition of Medifill Limited (“Medifill”) for a purchase price of 49,919 Euros, or approximately $ 51,252 .

Headquartered in Dublin, Ireland, Medifill produces medical-grade cyanoacrylate adhesives tailored to the wound closure market.

The acquisition establishes European production capabilities for our medical adhesives offerings.

The fair value measurement for this acquisition has not been completed.

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

On January 15, 2025, we completed the acquisition of GEM S.r.l.

(“GEM”) for a purchase price of 144,041 Euros, or approximately $ 147,886 .

Headquartered in Viareggio, Italy, GEM develops, produces and sells medical adhesives for wound closure in both surgical and topical applications.

The acquisition establishes a European headquarters for our Medical Adhesives Technologies business and expands the Company's medical adhesive offerings, further shifting our portfolio toward highly profitable, higher growth markets.

The fair value measurement for this acquisition has not been completed.

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

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