20 unchanged sentences
Vice President & Controller
−Removed: Chief Accounting Officer
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
45 unchanged sentences
Valuation of Indefinite-lived Intangible Assets
−Removed: Description of the Matter At November 30, 2020, the Company's indefinite-lived intangible assets consist of brand names and trademarks with an aggregate carrying value of approximately $3.0 billion (of which $0.4 billion related to the Cholula brand name, which was acquired on November 30, 2020).
−Removed: As explained in Note 1 to the consolidated financial statements, these assets are assessed for impairment at least annually primarily using the relief-from-royalty methodology to determine their fair values.
−Removed: If the fair value of any of the brand names or trademarks is less than its carrying amount, an impairment loss is recognized in an amount equal to the difference.
−Removed: Auditing the Company's impairment assessments was complex due to the significant estimation required in determining the fair value of the brand names and trademarks.
+Added: Description of the Matter At November 30, 2021, the Company's indefinite-lived intangible assets consist of brand names and trademarks with an aggregate carrying value of approximately $3.1 billion.
+Added: As explained in Note 1 to the consolidated financial statements, these assets are assessed for impairment at least annually using the relief-from-royalty methodology to determine their fair values.
+Added: If the fair value of any brand name or trademark is less than its carrying amount, an impairment loss is recognized in an amount equal to the difference.
+Added: Auditing the Company's impairment assessments is complex due to the significant estimation required in determining the fair value of the brand names and trademarks.
Significant management judgment is also involved in determining whether individual brand names and trademarks should be grouped for purposes of the fair value determination or must be evaluated individually.
1 unchanged sentence
These significant assumptions and inputs are forward-looking and could be affected by future economic and market conditions.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over the Company’s indefinite-lived intangible asset review process, including controls over management’s review of its asset groupings and the significant assumptions described above.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over the Company’s indefinite-lived intangible asset impairment assessment, including controls over management’s review of its asset groupings and the significant assumptions described above.
We tested controls over the review of methodologies used, significant assumptions and inputs, and completeness and accuracy of the data used in the measurements.
1 unchanged sentence
We compared the significant assumptions to current industry, market and economic trends, to the Company's historical results, to other guideline companies within the same industry, and to other relevant data.
−Removed: In addition, we evaluated management’s ability to estimate revenues by comparing the current year actual revenues for certain brand names or trademarks to the estimates made in the Company’s prior year impairment assessment.
−Removed: We also performed sensitivity analyses of the significant assumptions to evaluate the potential change in the fair values of the brand names and trademarks resulting from hypothetical changes in underlying assumptions.
−Removed: We involved an internal valuation specialist to assist in our evaluation of the methodologies used and significant assumptions and inputs used to determine the fair value of certain brand names and trademarks.
+Added: In addition, we evaluated management’s ability to estimate net sales by comparing the current year actual net sales for certain brand names or trademarks to the estimates made in the Company’s prior year impairment assessment.
+Added: We also performed sensitivity analyses of certain significant assumptions to evaluate the potential change in the fair values of the brand names and trademarks resulting from hypothetical changes in underlying assumptions.
+Added: We used an internal valuation specialist to assist in our evaluation of the methodologies used and significant assumptions and inputs used by the Company to determine the estimated fair value of certain brand names and trademarks.
Valuation of Acquired Intangible Assets
−Removed: Description of the Matter During 2020, the Company completed its acquisition of the parent company of Cholula Hot Sauce (“Cholula”) for net consideration of $803 million, and recognized identifiable intangible assets of $401 million, as disclosed in Note 2 to the consolidated financial statements.
+Added: Description of the Matter During fiscal 2021, the Company completed its acquisition of FONA International, LLC for net consideration of $708 million, and recognized identifiable intangible assets of $401 million, as disclosed in Note 2 to the consolidated financial statements.
The transaction was accounted for as a business combination.
−Removed: Auditing the Company's purchase accounting for its acquisition of Cholula was complex due to the significant estimation required by management to determine the fair value of the acquired intangible assets, which principally consisted of brand names and trademarks.
+Added: Auditing the Company's purchase accounting for its acquisition of FONA International, LLC was complex due to the significant estimation required by management to determine the fair value of the acquired intangible assets, which consisted of customer relationships, trade names, and intellectual property.
The estimation complexity was primarily due to the valuation models used to measure the fair value of the intangible assets and the sensitivity of the respective fair values to the significant underlying assumptions.
−Removed: The significant assumptions used to estimate the fair value of the intangible assets included discount rates, royalty rates and certain assumptions that form the basis of the forecasted results (e.g., revenue growth rates and operating profit margin).
+Added: The significant assumptions used to estimate the fair value of the intangible assets included discount rates, royalty rates, customer attrition, and certain assumptions that form the basis of the forecasted results (e.g.
+Added: net sales and operating profit metrics).
These significant assumptions are forward-looking and could be affected by future economic and market conditions.
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Income from consolidated operations before income taxes 895.8 881.5 819.2
−Removed: Income tax expense (benefit) 174.9 157.4 ( 157.3 )
+Added: Income tax expense 192.7 174.9 157.4
Net income from consolidated operations 703.1 706.6 661.8
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Other comprehensive income (loss):
−Removed: Unrealized components of pension and other postretirement plans (including curtailment gains of $18.0 for 2018) ( 80.4 ) ( 149.8 ) 72.6
+Added: Unrealized components of pension and other postretirement plans 134.8 ( 80.4 ) ( 149.8 )
Currency translation adjustments ( 68.8 ) 89.7 ( 25.5 )
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Cash and cash equivalents $ 351.7 $ 423.6
−Removed: Trade accounts receivable, less allowances of $5.2 for 2020 and $5.6 for 2019 528.5 502.9
+Added: Trade accounts receivable, net of allowances 549.5 528.5
Inventories 1,182.3 1,032.6
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Shareholders’ equity
−Removed: Common stock, no par value;
+Added: Common stock;
authorized 640.0 shares;
1 unchanged sentence
2021–17.8 shares, 2020–18.0 shares 530.0 484.0
−Removed: Common stock non-voting, no par value;
+Added: Common stock non-voting;
authorized 640.0 shares;
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Stock-based compensation 66.6 46.0 37.2
−Removed: Non-cash nonrecurring income tax benefit (related to enactment of the U.S.
−Removed: Tax Act) — — ( 309.4 )
−Removed: Non-cash special charges — — 3.0
+Added: Asset impairment included in special charges 17.2 — —
+Added: Amortization of inventory fair value adjustments associated with acquisitions 6.3 — —
Loss (gain) on sale of assets 0.2 3.0 ( 1.6 )
−Removed: Deferred income tax (benefit) expense ( 11.2 ) 20.9 40.1
+Added: Deferred income tax expense (benefit) 36.0 ( 11.2 ) 20.9
Income from unconsolidated operations ( 52.2 ) ( 40.8 ) ( 40.9 )
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Capital expenditures (including expenditures for capitalized software) ( 278.0 ) ( 225.3 ) ( 173.7 )
+Added: Proceeds from sale of unconsolidated operation 65.4 — —
Other investing activities 10.4 2.7 2.7
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Taxes withheld and paid on employee stock awards ( 15.4 ) ( 13.0 ) ( 12.7 )
−Removed: Payment of contingent consideration — — ( 2.5 )
−Removed: Purchase of minority interest — — ( 13.0 )
Common stock acquired by purchase ( 8.6 ) ( 47.3 ) ( 95.1 )
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Effect of exchange rate changes on cash and cash equivalents ( 13.6 ) 31.6 8.8
−Removed: Increase (decrease) in cash and cash equivalents 268.2 58.8 ( 90.2 )
+Added: (Decrease) increase in cash and cash equivalents ( 71.9 ) 268.2 58.8
Cash and cash equivalents at beginning of year 423.6 155.4 96.6
7 unchanged sentences
Net income attributable to non-controlling interest — — — 1.9 1.9
−Removed: Other comprehensive income (loss), net of tax — — ( 59.5 ) ( 2.6 ) ( 62.1 )
+Added: Other comprehensive loss, net of tax — — ( 140.3 ) ( 0.7 ) ( 141.0 )
Dividends — ( 309.3 ) — — ( 309.3 )
−Removed: Adoption of ASU 2018-02 — 20.9 ( 20.9 ) — —
−Removed: Buyout of minority interest — ( 12.4 ) — ( 0.4 ) ( 12.8 )
Stock-based compensation 37.2 — — — 37.2
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Net income attributable to non-controlling interest — — — 4.3 4.3
−Removed: Other comprehensive loss, net of tax — — ( 140.3 ) ( 0.7 ) ( 141.0 )
+Added: Other comprehensive income (loss), net of tax — — 29.4 ( 2.9 ) 26.5
Dividends — ( 338.5 ) — — ( 338.5 )
20 unchanged sentences
Investments in unconsolidated affiliates, over which we exercise significant influence, but not control, are accounted for by the equity method.
−Removed: Accordingly, our share of net income or loss of unconsolidated affiliates is included in net income.
+Added: Accordingly, our share of net income or loss from unconsolidated affiliates is included in net income.
Foreign Currency Translation
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We record our ownership share of the net assets and accumulated other comprehensive income (loss) of our unconsolidated affiliates in our consolidated balance sheet on the lines entitled “Other long-term assets” and “Accumulated other comprehensive loss,” respectively.
−Removed: We record our ownership share of the net income of our unconsolidated affiliates in our consolidated income statement on the line entitled “Income from unconsolidated operations.”
+Added: We record our ownership share of the net income of our unconsolidated affiliates, or a gain or loss associated with the sale of our ownership interest in our unconsolidated affiliates, in our consolidated income statement on the line entitled “Income from unconsolidated operations.”
Use of Estimates
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The estimated useful lives range from 20 to 50 years for buildings and 3 to 12 years for machinery, equipment and other assets.
−Removed: Assets leased under capital leases are depreciated over the shorter of the lease term or their useful lives unless it is reasonably certain that we will obtain ownership by the end of the lease term.
+Added: Assets leased under finance leases are depreciated over the shorter of the lease term or their useful lives unless it is reasonably certain that we will obtain ownership by the end of the lease term.
Repairs and maintenance costs are expensed as incurred.
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Such amounts are recorded within "Other long-term assets" in the consolidated balance sheet.
−Removed: Software is amortized using the straight-line method over a range of 3 to 13 years, but not exceeding the expected life of the product.
−Removed: The net book value of capitalized software includes $ 86.7 million and $ 44.9 million at November
−Removed: 30, 2020 and 2019, respectively, which had not yet been placed into service and relates to our future implementation of a global enterprise resource planning (ERP) system.
+Added: Software is amortized using the straight-line method over estimated useful lives ranging from 3 to 13 years, but not
+Added: exceeding the expected life of the product.
+Added: The net book value of capitalized software includes $ 12.2 million and $ 86.7 million at November 30, 2021 and 2020, respectively, which had not yet been placed into service and relates to our future implementation of a global enterprise resource planning (ERP) system.
Goodwill and Other Intangible Assets
9 unchanged sentences
We calculate fair value of a reporting unit by using a discounted cash flow model and then compare that to the carrying amount of the reporting unit, including intangible assets and goodwill.
−Removed: If the carrying amount of the reporting unit exceeds the calculated fair value, we would determine the implied fair value of the reporting unit’s goodwill.
−Removed: An impairment charge would be recognized to the extent the carrying amount of goodwill exceeds the implied fair value.
+Added: An impairment charge would be recognized to the extent that the carrying amount of the reporting unit exceeds the calculated fair value of the reporting unit.
Indefinite-lived Intangible Asset Impairment
Our indefinite-lived intangible assets consist of acquired brand names and trademarks.
−Removed: We primarily determine fair value by using a relief-from-royalty method and then compare that to the carrying amount of the indefinite-lived intangible asset.
+Added: We determine fair value by using a relief-from-royalty method and then compare that to the carrying amount of the indefinite-lived intangible asset.
If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment charge would be recorded to the extent the recorded indefinite-lived intangible asset exceeds the fair value.
3 unchanged sentences
If an impairment is determined to exist, the loss would be calculated based on the excess of the asset’s carrying value over its estimated fair value.
+Added: We determine whether a contract is or contains a lease at contract inception based on the presence of identified assets and our right to obtain substantially all the economic benefit from or to direct the use of such assets.
+Added: When we determine a lease exists, we record a right-of-use (“ROU”) asset and corresponding lease liability on our consolidated balance sheet.
+Added: ROU assets represent our right to use an underlying asset for the lease term.
+Added: Lease liabilities represent our obligation to make lease payments arising from the lease.
+Added: ROU assets are recognized at the lease commencement date at the value of the lease liability and are adjusted for any prepayments, lease incentives received, and initial direct costs incurred.
+Added: Lease liabilities are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term.
+Added: As the discount rate implicit in the lease is not readily determinable in most of our leases, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.
+Added: Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
+Added: We do not record lease contracts with a term of 12 months or less on our consolidated balance sheets.
+Added: When our real estate lease arrangements include lease and non-lease components (for example, common area maintenance), we account for each component separately, based on their relative standalone prices.
+Added: For all other asset categories, we combine lease components and non-lease components into a single lease commitment.
+Added: We recognize fixed lease expense for operating leases on a straight-line basis over the lease term.
+Added: For finance leases, we recognize amortization expense over the shorter of the estimated useful life of the underlying assets or the lease term.
+Added: In instances of title transfer, expense is recognized over the useful life.
+Added: Interest expense on a finance lease is recognized using the effective interest method over the lease term.
Revenue Recognition
We manufacture, market and distribute spices, seasoning mixes, condiments and other flavorful products to the entire food industry—retailers, food manufacturers and foodservice businesses.
−Removed: We recognize sales as performance obligations are fulfilled when control passes to the customer.
+Added: Our revenue arrangements generally include a single performance obligation relating to the fulfillment of a customer order, which in some cases are governed by a master sales agreement, for the purchase of our products.
+Added: We recognize revenue at a point in time when control of the ordered products passes to the customer, which principally occurs either upon shipment or delivery to the customer or upon pick-up by the customer, depending upon terms included in the particular customer arrangement.
Revenues are recorded net of trade and sales incentives and estimated product returns.
Known or expected pricing or revenue adjustments, such as trade discounts, rebates and returns, are estimated at the time of sale.
−Removed: Any taxes collected on behalf of government authorities are excluded from net sales.
−Removed: We account for product shipping and handling as fulfillment activities with costs for these activities recorded within cost of goods sold.
+Added: All taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer for sales, value added and other excise taxes are excluded from net sales.
+Added: We account for product shipping and handling activities that occur before the customer has obtained control of a good as fulfillment activities (i.e.
+Added: an expense) rather than as a promised service with costs for these activities recorded within Cost of goods sold.
+Added: We expense any incremental costs of obtaining a contract when the contract is for a period of one year or less.
Amounts billed and due from our customers are classified as accounts receivable on the balance sheet and require payment on a short-term basis.
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The unsettled portion remaining in accrued liabilities for these activities was $ 189.3 million and $ 183.3 million at November 30, 2021 and 2020, respectively.
−Removed: Practical Expedients
−Removed: We have elected the following policy elections and practical expedients with respect to revenue recognition:
−Removed: • Shipping and handling costs — We elected to account for shipping and handling activities that occur before the customer has obtained control of a good as fulfillment activities (i.e., an expense) rather than as a promised service.
−Removed: • Measurement of transaction price — We elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer for sales, value added and other excise taxes.
−Removed: • Incremental cost of obtaining a contract — We elected to expense any incremental costs of obtaining a contract when the contract is for a period of one year or less.
Shipping and Handling
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Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law.
+Added: Inherent in determining our annual tax rate are judgments regarding business plans, planning opportunities, and expectations about future outcomes.
+Added: Realization of certain deferred tax assets, primarily net operating loss and other carryforwards, is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods.
Changes in enacted tax rates are reflected in the tax provision as they occur.
−Removed: As more fully described in note 13, the U.S.
−Removed: Tax Act created a new requirement that certain income earned by foreign subsidiaries, referred to as Global Intangible Low-Taxed Income (GILTI), must be included in the gross income of the subsidiary’s U.S.
−Removed: this provision of the U.S.
−Removed: Tax Act was effective for us beginning on December 1, 2018.
+Added: We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized.
+Added: When assessing the need for valuation allowances, we consider future taxable income and ongoing prudent and feasible tax planning strategies.
+Added: Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, we would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding adjustment to our provision for income taxes.
+Added: We recognize a tax position in our financial statements when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position.
+Added: That position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.
+Added: The resolution of tax reserves and changes in valuation allowances could be material to our results of operations for any period but is not expected to be material to our financial position.
+Added: Effective December 1, 2018, we are subject to a U.S.
+Added: tax requirement that certain income earned by foreign subsidiaries, referred to as Global Intangible Low-Taxed Income (GILTI), must be included in the gross income of the subsidiary’s U.S.
Accounting principles generally accepted in the U.S.
1 unchanged sentence
We have elected to treat GILTI as a current period expense when incurred.
−Removed: In accordance with ASC 740, Income Taxes , we recognize a tax position in our financial statements when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position.
−Removed: That position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.
Stock-Based Compensation
−Removed: Stock-based compensation expense is recognized in accordance with ASC 718, Compensation – Stock Compensation .
We recognize stock-based compensation expense associated with options and restricted stock units (RSUs), which contain provisions that such awards fully vest upon an employee’s retirement, ratably over the shorter of the vesting period or the employees’ retirement eligibility date.
1 unchanged sentence
Compensation expense associated with our long-term performance plan (LTPP) is recorded in the income statement ratably over the three-year period of the program based on the number of shares ultimately expected to be awarded using our estimate of the most likely outcome of achieving the performance objectives.
−Removed: We estimate forfeitures at the time of grant based on historical experience and revises this estimate in subsequent periods if actual forfeitures differ.
−Removed: We recognize stock-based compensation expense associated with price-vested stock options ratably over the vesting period as such options do not contain provisions that fully vest these awards upon an employee’s retirement.
+Added: We recognize stock-based compensation expense associated with price-vested stock options ratably over the vesting period as such options do not contain provisions that fully vest these awards upon an employee becoming retirement eligible.
+Added: We estimate forfeitures associated with all stock-based compensation at the time of grant based on historical experience and revise this estimate in subsequent periods if actual forfeitures differ.
On September 28, 2020, our Board of Directors approved a 2-for-1 stock split in the form of a stock dividend on all shares of the Company’s two classes of common stock, Common Stock and Common Stock Non-Voting.
4 unchanged sentences
We record all derivatives on our balance sheet at fair value.
−Removed: The fair value of derivative instruments is recorded in our consolidated balance sheet on the lines entitled “Other current assets", "Other long-term assets", "Other accrued liabilities" or "Other long-term liabilities".
+Added: The fair value of derivative instruments is recorded in our consolidated balance sheet on the lines entitled “Other current assets", "Other long-term assets", "Other accrued liabilities" or "Other long-term liabilities" depending on their fair value and maturity.
Gains and losses representing either hedge ineffectiveness, hedge components excluded from the assessment of effectiveness, or hedges of translational exposure are recorded in our consolidated income statement in the lines entitled "Other income (expense), net" or "Interest expense".
26 unchanged sentences
Accounting Pronouncements Adopted in 2021
−Removed: We adopted the new accounting standard for leases, Accounting Standards Codification Topic 842 Leases (ASC 842), as of December 1, 2019 and we elected to do so using a modified retrospective transition method.
−Removed: That modified retrospective transition method allowed us to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to retained earnings in the opening balance sheet in the period of adoption without restating prior periods.
−Removed: ASC 842 revised prior practice related to accounting for leases under Accounting Standards Codification Topic 840 Leases (ASC 840) for both lessees and lessors and requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (ROU) assets.
−Removed: Under ASC 842, the lease liability is equal to the present value of lease payments, and the ROU asset is based on the lease liability, subject to adjustments, such as for deferred rent and initial direct costs.
−Removed: For income statement purposes, ASC 842 retains a dual model similar to ASC 840, requiring leases to be classified as either operating or finance.
−Removed: For lessees, operating leases result in straight-line expense (similar to prior accounting by lessees for operating leases under ASC 840) while finance leases result in a front-loaded expense pattern (similar to prior accounting by lessees for capital leases under ASC 840).
−Removed: We elected the package of practical expedients permitted under the transition guidance, which, among other things, allows us to carry forward the historical lease classification.
−Removed: In addition, we made accounting policy elections to combine the lease and non-lease components for all asset categories other than real estate.
−Removed: We also made elections to exclude from balance sheet reporting those leases with initial terms of 12 months or less (short-term leases).
−Removed: Adoption of the new standard resulted in the recording of operating lease ROU assets and lease liabilities of $ 136.5 million and $ 140.0 million, respectively, with the difference due to prepaid and deferred rents that were reclassified to the ROU asset value.
−Removed: No cumulative-effect adjustment to opening retained earnings was required as of December 1, 2019.
−Removed: The standard did not materially affect our consolidated net income or cash flows for our fiscal year ended November 30, 2020.
−Removed: See note 7 for further details.
−Removed: Recently Issued Accounting Pronouncements — Pending Adoption
In January 2017, the FASB issued ASU No.
−Removed: 2017-04 Intangibles — Goodwill and Other Topics (Topic 350) — Simplifying the Test for Goodwill Impairment.
+Added: 2017-04 Intangibles — Goodwill and Other Topics (Topic 350) :
+Added: Simplifying the Test for Goodwill Impairment.
This guidance eliminates the requirement to calculate the implied fair value of goodwill of a reporting unit to measure a goodwill impairment charge.
Instead, a company will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value.
−Removed: The new standard will be effective for the first quarter of our fiscal year ending November 30, 2021.
−Removed: We do not expect this guidance to have a material impact on our financial statements.
+Added: This new standard
+Added: was adopted effective December 1, 2020 and will be applied upon recognition of any future goodwill impairment charge.
+Added: This ASU has not had a material impact on our financial statements.
In June 2016, the FASB issued ASU No.
2016-13 Financial Instruments — Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments , which institutes a new model for recognizing credit losses on financial instruments that are not measured at fair value.
−Removed: The new standard is effective for the first quarter of our fiscal year ending November 30, 2021, and it will primarily impact our credit losses recognized for trade accounts receivable.
−Removed: This guidance will not have a material impact on our consolidated financial statements.
+Added: Measurement of Credit Losses on Financial Instruments , which instituted a new model for recognizing credit losses on financial instruments that are not measured at fair value.
+Added: This standard was adopted by the Company on December 1, 2020.
+Added: As this ASU did not have a material impact on our consolidated financial statements upon adoption, a cumulative-effect adjustment to retained earnings was not necessary.
+Added: Recently Issued Accounting Pronouncements — Pending Adoption
In December 2019, the FASB issued ASU No.
3 unchanged sentences
The new standard is effective for the first quarter of our fiscal year ending November 30, 2022, and interim periods within those years.
−Removed: We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
+Added: We do not expect the new guidance will have a material impact on our consolidated financial statements.
In March 2020, the FASB issued ASU No.
2020-04 Reference Rate Reform (Topic 848):
−Removed: Facilitation of the Effects of Reference Rate Reform on Financial Reporting that provides optional expedients for a limited period of time for accounting for contracts, hedging relationship, and other transactions affected by the London Interbank Offered Rate (LIBOR) or other reference rate expected to be discontinued.
+Added: Facilitation of the Effects of Reference Rate Reform on Financial Reporting that provides optional expedients for a limited period of time for accounting for contracts, hedging relationship, and other transactions affected by the London Interbank Offered Rate (LIBOR) or other reference rates expected to be discontinued.
These optional expedients can be applied from March 2020 through December 31, 2022.
1 unchanged sentence
Acquisitions are part of our strategy to increase sales and profits.
+Added: Acquisition of FONA International, LLC
+Added: On December 30, 2020, we purchased FONA International, LLC and certain of its affiliates (FONA), a privately held company, for a purchase price of approximately $ 708.2 million, net of cash acquired.
+Added: That purchase price includes the payment of $ 2.6 million during 2021 associated with the final working capital adjustment.
+Added: FONA is a leading manufacturer of clean and natural flavors providing solutions for a diverse customer base across various applications for the food, beverage and nutritional markets.
+Added: The acquisition of FONA expands the breadth of our flavor solutions segment into attractive categories, as well as extends our technology platform and strengthens our capabilities.
+Added: The acquisition was funded with cash and commercial paper.
+Added: At the time of the acquisition, annual sales of FONA were approximately $ 114 million.
+Added: The results of FONA’s operations have been included in our financial statements as a component of our flavor solutions segment from the date of acquisition.
+Added: The purchase price of FONA was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
+Added: We estimated the fair values based on independent valuations, discounted cash flow analyses, quoted market prices, and estimates made by management.
+Added: The final purchase price allocation for FONA resulted in the following fair value allocations, net of cash acquired (in millions):
+Added: Trade accounts receivable $ 12.4
+Added: Inventories 10.3
+Added: Goodwill 389.7
+Added: Intangible assets 266.0
+Added: Property, plant and equipment 36.3
+Added: Other assets 5.5
+Added: Trade accounts payable ( 3.7 )
+Added: Other accrued liabilities ( 6.9 )
+Added: Deferred taxes ( 0.3 )
+Added: Other long-term liabilities ( 1.1 )
+Added: Total $ 708.2
+Added: We determined the fair value of intangible assets using the following methodologies.
+Added: We valued the acquired brand names and trademarks and intellectual property using the relief from royalty method, an income approach.
+Added: We valued the acquired customer relationships using the excess earnings method, an income approach.
+Added: Some of the more significant assumptions inherent in developing the valuations included the estimated annual net cash flows for each indefinite-lived or definite-lived intangible asset (including net sales, operating profit margin, and working capital/contributory asset charges), royalty rates, the discount rate that appropriately reflects the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends, as well as other factors.
+Added: We determined the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management plans, and market comparables.
+Added: We used carrying values to value trade receivables and payables, as well as certain other current and non-current assets and liabilities, as we determined that they represented the fair value of those items.
+Added: We valued finished goods and work-in-process inventory using a net realizable value approach, which resulted in a step-up of $ 1.4 million that was recognized in Cost of goods sold during 2021, as the related inventory was sold.
+Added: Raw materials and packaging inventory were valued using the replacement cost approach.
+Added: The valuation of the acquired net assets of FONA includes $ 49.0 million allocated to indefinite-lived brand assets, $ 173.0 million allocated to customer relationships with an estimated useful life of 15 years and $ 44.0 million allocated to intellectual property with an estimated useful life of 12 years.
+Added: As a result of the acquisition, we recognized a total of $ 389.7 million of goodwill.
+Added: That goodwill primarily represents the intangible assets that do not qualify for separate recognition, such as the value of leveraging our brand building expertise, our insights in demand from customers for value-added flavor solutions, and our supply chain capabilities, as well as expected synergies from the combined operations and assembled workforce.
+Added: Our aggregate income tax basis in the acquired intangible assets and goodwill approximates their aggregate book value at the acquisition date.
Acquisition of Cholula Hot Sauce
On November 30, 2020, we completed the acquisition of the parent company of Cholula Hot Sauce ® (Cholula) from L Catterton.
−Removed: The purchase price was approximately $ 803.0 million, net of cash acquired, subject to certain customary purchase price adjustments.
+Added: The purchase price was approximately $ 801.2 million, net of cash acquired.
+Added: That purchase price is also net of $ 1.5 million received during 2021 associated with the final working capital adjustment.
The acquisition was funded with cash and short-term borrowings.
−Removed: Cholula, a premium Mexican hot sauce brand, is a strong addition to McCormick’s global branded flavor portfolio, which we believe broadens our offering in the high growth hot sauce category to consumers and foodservice operators and accelerate our condiment growth opportunities with a complementary authentic Mexican flavor hot sauce.
+Added: Cholula, a premium Mexican hot sauce brand, is a strong addition to McCormick’s global branded flavor portfolio, which we believe broadens our offering in the high growth hot sauce category to consumers and foodservice operators and accelerates our condiment growth opportunities with a complementary authentic Mexican flavor hot sauce.
At the time of the acquisition, annual sales of Cholula were approximately $ 96 million.
The results of Cholula’s operations have been included in our financial statements as a component of our consumer and flavor solutions segments from the date of acquisition.
−Removed: The purchase price of Cholula was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
−Removed: We estimated the fair values based on in-process independent valuations, discounted cash flow analyses, quoted market prices, and estimates made by management, a number of which are subject to finalization.
−Removed: The allocation of the purchase price will be finalized within the allowable measurement period.
−Removed: The preliminary allocation, net of cash acquired, of the fair value of the Cholula acquisition is summarized in the table below (in millions):
+Added: The purchase price of Cholula was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
+Added: We estimated the fair values based on independent valuations, discounted cash flow analyses, quoted market prices, and estimates made by management.
+Added: During 2021, we completed the Cholula purchase price allocation.
+Added: The final purchase price allocation for Cholula resulted in the following fair value allocations, net of cash acquired (in millions):
Trade accounts receivable $ 15.0
8 unchanged sentences
Total $ 801.2
−Removed: The preliminary fair value of intangible assets was determined using income methodologies.
+Added: The fair value of intangible assets was determined using income methodologies.
We valued the acquired brand names and trademarks using the relief from royalty method, an income approach.
−Removed: For customer relationships, we used the distributor method, a variation of the excess earnings method that uses distributor-based inputs for margins and contributory asset charges.
−Removed: Some of the more significant assumptions inherent in developing the preliminary valuations included the estimated annual net cash flows for each indefinite-lived or definite-lived intangible asset (including net sales, operating profit margin, and working capital/contributory asset charges), royalty rates, the discount rate that appropriately reflects the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends, as well as other factors.
+Added: For customer relationships, we
+Added: used the distributor method, a variation of the excess earnings method that uses distributor-based inputs for margins and contributory asset charges.
+Added: Some of the more significant assumptions inherent in developing the valuations included the estimated annual net cash flows for each indefinite-lived or definite-lived intangible asset (including net sales, operating profit margin, and working capital/contributory asset charges), royalty rates, the discount rate that appropriately reflects the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends, as well as other factors.
We determined the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management plans, and market comparables.
We used carrying values to value trade receivables and payables, as well as certain other current and non-current assets and liabilities, as we determined that they represented the fair value of those items.
−Removed: We valued finished goods and work-in-process inventory using a net realizable value approach, which resulted in a step-up of $ 4.9 million that will be recognized in cost of goods sold in 2021 as the related inventory is sold.
+Added: We valued finished goods and work-in-process inventory using a net realizable value approach, which resulted in a step-up of $ 4.9 million that was recognized in cost of goods sold in 2021 as the related inventory was sold.
Raw materials and packaging inventory was valued using the replacement cost approach.
Deferred income tax assets and liabilities represent the expected future tax consequences of temporary differences between the fair values of the assets acquired and liabilities assumed and their tax bases.
−Removed: The preliminary valuation of the acquired net assets of Cholula includes $ 380.0 million allocated to indefinite-lived brand assets and $ 21.0 million allocated to definite-lived intangible assets with a weighted-average life of 15 years.
+Added: The valuation of the acquired net assets of Cholula includes $ 380.0 million allocated to indefinite-lived brand assets and $ 21.0 million allocated to definite-lived intangible assets with an estimated useful life of 15 years.
As a result of the acquisition, we recognized a total of $ 411.3 million of goodwill.
1 unchanged sentence
Our income tax basis in the acquired intangible assets and goodwill approximates $ 285 million.
−Removed: The final allocation of the fair value of the Cholula acquisition, including the allocation of goodwill to our reporting units, which are the consumer and flavor solutions segments, was not complete as of November 30, 2020, but will be finalized within the allowable measurement period.
−Removed: We expect transaction and integration expenses related to our acquisition of Cholula to total approximately $ 35 million, of which $ 11.2 million of transaction expenses were incurred in 2020.
−Removed: We anticipate incurring the balance of those transaction and integration expenses in fiscal 2021.
−Removed: We incurred an additional $ 1.2 million of transaction and integration expenses in 2020 related to our acquisition of FONA International, LLC and certain of its affiliates.
−Removed: See footnote 19 for additional details.
−Removed: The impact of Cholula on our 2020 consolidated income before taxes, was principally the effect of the previously noted transaction expenses, and an insignificant amount of interest expense.
−Removed: Acquisition of RB Foods
−Removed: On August 17, 2017, we completed the acquisition of Reckitt Benckiser's Food Division (RB Foods) from Reckitt Benckiser Group plc.
−Removed: The purchase price was approximately $ 4.21 billion.
−Removed: In December 2017, we paid $ 4.2 million associated with the final working capital adjustment.
−Removed: Total transaction and integration expenses related to the RB Foods acquisition totaled $ 22.5 million in 2018, of which $ 0.3 million and $ 22.2 million represented transaction expenses and integration expenses, respectively.
−Removed: Other Acquisitions
−Removed: On September 21, 2018, we purchased the remaining 10 % ownership interest in our Shanghai subsidiary for a cash payment of $ 12.7 million.
−Removed: In conjunction with our purchase of this remaining 10% minority interest, we have eliminated the minority interest in that subsidiary and recorded an adjustment of $ 12.4 million to retained earnings in our consolidated balance sheet.
−Removed: The $ 12.7 million payment is reflected in the financing activities section of our consolidated cash flow statement for 2018.
+Added: Transaction and Integration Expenses Associated with the Cholula and FONA Acquisitions
+Added: The following are the Transaction and integration expenses recognized related to the Cholula and FONA acquisitions for the years ended November 30 (in millions):
+Added: Transaction-related expenses included in cost of goods sold $ 6.3 $ —
+Added: Other transaction expenses 13.8 12.4
+Added: Integration expenses 15.2 —
+Added: Total transaction and integration expenses $ 35.3 $ 12.4
+Added: We expect additional transaction and integration expenses related to our acquisition of Cholula and FONA to total approximately $ 3 million in 2022.
SPECIAL CHARGES
6 unchanged sentences
Certain ancillary expenses related to these actions approved by our Management Committee do not qualify for accrual upon approval but are included as special charges as incurred during the course of the actions.
−Removed: In 2018, we also included in special charges, as approved by our Management Committee, expense associated with a one-time payment, made to eligible U.S.
−Removed: hourly employees, to distribute a portion of the non-recurring net income tax benefit recognized in connection with the enactment of the U.S.
−Removed: Tax Act and as more fully described in note 13.
The following is a summary of special charges recognized for the years ended November 30 (in millions):
2021 2020 2019
−Removed: Employee severance and related benefits $ 4.1 $ 6.2 $ 2.0
−Removed: Other costs (1) 2.8 14.6 14.3
+Added: Employee severance and related benefits in the income statement $ 10.5 $ 4.1 $ 6.2
+Added: Other costs in the income statement (1)
+Added: 35.9 2.8 14.6
+Added: Special charges $ 46.4 $ 6.9 $ 20.8
+Added: Special charges included in Cost of goods sold 4.7 — —
Total special charges $ 51.1 $ 6.9 $ 20.8
−Removed: (1) Included in other costs for 2018 are non-cash fixed asset impairment charges of $ 3.0 million.
+Added: (1) Included in other costs for 2021 are non-cash intangible asset impairment charges of $ 11.2 million and a non-cash fixed asset impairment charge of $ 6.0 million.
The following is a summary of special charges by business segments for the years ended November 30 (in millions):
4 unchanged sentences
We continue to evaluate changes to our organization structure to reduce fixed costs, simplify or improve processes, and improve our competitiveness.
+Added: During 2021, we recorded $ 51.1 million of special charges, of which $ 46.4 million was recognized in Special charges and $ 4.7 million was recognized in Cost of goods sold on our consolidated income statement.
+Added: Special charges in 2021 consist principally of $ 19.5 million associated with our exit of our rice product line in India, as more fully described below, $ 6.2 million associated with the transition of a manufacturing facility in EMEA, streamlining actions of $ 10.3 million in the Americas region, $ 4.8 million in the EMEA region and $ 0.8 million in the APAC region, and $ 0.8 million related to our GE initiative, together with a non-cash asset impairment charge of $ 6.0 million associated with an administrative site that was sold in conjunction with our decision to employ a hybrid work environment.
+Added: As of November 30, 2021, reserves associated with special charges are included in the line entitled "Trade accounts payable" and "Other accrued liabilities" in our consolidated balance sheet.
+Added: In 2021, we recorded a total of $ 19.5 million of special charges related to the exit of our Kohinoor rice product line in India.
+Added: This action principally relates to the discontinuance of Kohinoor's rice business consistent with our focus on higher margin products to enable the business to focus on both its flavor solutions and non-rice consumer business.
+Added: As a result of the Kohinoor rice product line exit, we determined that an impairment of the Kohinoor brand name had occurred in 2021 and recorded a non-cash impairment charge of $ 7.4 million reducing its carrying value to zero.
+Added: Also, as a result of this action, we determined that the value of our customer relationship asset in India was also impaired as a result of the lower level of anticipated sales and recorded a non-cash impairment charge of $ 3.8 million.
+Added: We also recorded $ 3.6 million of employee severance and other related exit costs associated directly associated with the exit plan.
+Added: We anticipate that these costs will be paid within the next twelve months.
+Added: In addition, as a result of the Kohinoor product line discontinuance in 2021, we recognized a $ 4.7 million charge in cost of goods sold, which represents a provision for the excess of the carrying value of rice inventories over the estimated net realizable value of such discontinued inventories and a contractual obligation associated with terminating a rice supply agreement.
During 2020, we recorded $ 6.9 million of special charges, consisting of (i) $ 5.3 million related to streamlining actions in our EMEA region, including $ 3.8 million related to severance and related benefits and $ 1.0 million of third party expenses and $ 0.5 million related to other costs;
and (ii) $ 1.6 million related to our GE initiative.
−Removed: Of the $ 6.9 million in special charges recorded during 2020, approximately $ 4.8 million were paid in cash, with the remaining accrual expected to be paid in 2021.
−Removed: As of November 30, 2020, reserves associated with special charges are included in the line entitled "Trade accounts payable" and "Other accrued liabilities" in our consolidated balance sheet.
+Added: Of the $ 6.9 million in special charges recorded during 2020, approximately $ 4.8 million were paid in cash, with the remaining accrual paid in 2021.
During 2019, we recorded $ 20.8 million of special charges, consisting primarily of (i) $ 14.1 million related to our GE initiative, including $ 10.6 million of third-party expenses, $ 2.1 million related to severance and related benefits, and $ 1.4 million related to other costs, (ii) $ 2.3 million of employee severance and related benefits associated with streamlining actions in the Americas and (iii) $ 3.9 million related to streamlining actions in our EMEA region.
Of the $ 20.8 million in special charges recorded during 2019, approximately $ 16.8 million were paid in cash, with the remaining accrual paid in 2020.
−Removed: During 2018, we recorded $ 16.3 million of special charges, consisting primarily of:
−Removed: (i) $ 11.5 million related to our global enablement initiative, as more fully described below;
−Removed: (ii) a one-time payment, in the aggregate amount of $ 2.2 million made to certain U.S.
−Removed: hourly employees to distribute a portion of the non-recurring net income tax benefit recognized in connection with the enactment of the U.S.
−Removed: (iii) $ 1.0 million related to employee severance benefits and other costs directly associated with the relocation of one of our Chinese manufacturing facilities;
−Removed: and (iv) $ 1.6 million related to employee severance benefits and other costs related to the transfer of certain manufacturing operations in our Asia/Pacific region to a new facility then under construction in Thailand.
−Removed: Of the $ 11.5 million in special charges recognized in 2018 related to our GE initiative, $ 7.5 million related to third party expenses, $ 3.0 million represented a non-cash asset impairment charge, and $ 1.0 million related to employee severance benefits.
−Removed: That non-cash asset impairment charge was related to the write-off of certain software assets that are incompatible with our future move, approved in 2018, to a new global ERP platform to facilitate planned actions under our GE initiative to align and simplify our end-to-end processes to support our future growth.
−Removed: Of the $ 16.3 million in special charges recorded during 2018, approximately $ 12.3 million were paid in cash and $ 3.0 million represented a non-cash asset impairment, with the remaining accrual paid in 2019.
During 2017, our Management Committee approved a multi-year initiative during which we have executed and expect to continue to execute significant changes to our global processes, capabilities and operating model to provide a scalable platform for future growth.
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Total goodwill and intangible assets $ 8,952.8 $ 164.5 $ 8,353.1 $ 127.4
+Added: We acquired FONA in December 2020 (see note 2).
+Added: The valuation of the acquired net assets of FONA resulted in the allocation of $ 389.7 million to goodwill, $ 49.0 million to indefinite-lived intangible assets associated with the acquired brand names and trademarks, and $ 217.0 million to definite-lived intangible assets.
We acquired Cholula in November 2020 (see note 2).
−Removed: A preliminary valuation of the acquired net assets of Cholula resulted in the allocation of $ 410.5 million to goodwill, $ 380.0 million to indefinite-lived intangible assets associated with the acquired brand names and trademarks, and $ 21.0 million to definite-lived intangible assets.
−Removed: We expect to finalize the valuation of the acquired net assets of Cholula, including the related goodwill and intangible assets, within the one-year measurement period from the date of acquisition.
+Added: The valuation of the acquired net assets of Cholula resulted in the allocation of $ 411.3 million to goodwill, $ 380.0 million to indefinite-lived intangible assets associated with the acquired brand names and trademarks, and $ 21.0 million to definite-lived intangible assets.
Intangible asset amortization expense was $ 35.6 million, $ 20.2 million and $ 20.3 million for 2021, 2020 and 2019, respectively.
3 unchanged sentences
Beginning of year $ 3,711.2 $ 1,275.1 $ 3,377.6 $ 1,127.6
+Added: Changes in preliminary purchase price allocation 0.5 0.3 — —
Increases from acquisitions — 389.7 273.7 136.8
1 unchanged sentence
End of year $ 3,674.7 $ 1,661.1 $ 3,711.2 $ 1,275.1
−Removed: A preliminary valuation of the acquired net assets of Cholula resulted in the allocation of $ 273.7 million and $ 136.8 million of goodwill to the consumer segment and flavor solutions segment, respectively.
+Added: In 2020, a preliminary valuation of the acquired net assets of Cholula resulted in the allocation of $ 273.7 million and $ 136.8 million of goodwill to the consumer segment and flavor solutions segment, respectively.
+Added: In 2021, we finalized the allocation of the purchase price of Cholula, which resulted in an increase in goodwill of $ 0.5 million to the
+Added: consumer segment and $ 0.3 million to the flavor solutions segment.
+Added: The December 2020 FONA acquisition resulted in the allocation of $ 389.7 million of goodwill to the flavor solutions segment.
+Added: As more fully described in note 3, in 2021, we recorded non-cash impairment charges of $ 7.4 million and $ 3.8 million associated with the Kohinoor brand name and customer relationship asset in India, respectively.
INVESTMENTS IN AFFILIATES
+Added: Income from unconsolidated operations was $ 52.2 million, $ 40.8 million, and $ 40.9 million in 2021, 2020 and 2019, respectively.
+Added: Income from unconsolidated operations in 2021 includes a gain on a sale of unconsolidated operations of $ 13.4 million as described below.
+Added: Our principal earnings from unconsolidated affiliates is from our 50 % interest in McCormick de Mexico, S.A.
+Added: Profit from this joint venture represented 62 % of income from unconsolidated operations in 2021, 75 % in 2020 and 72 % in 2019.
+Added: The relative impact of McCormick de Mexico, S.A.
+Added: on income from unconsolidated operations in 2021 was impacted by the gain on our sale of an unconsolidated operation.
Summarized annual and year-end information from the financial statements of unconsolidated affiliates representing 100 % of the businesses follows:
8 unchanged sentences
Royalty income from unconsolidated affiliates was $ 22.8 million, $ 19.5 million and $ 19.0 million for 2021, 2020 and 2019, respectively.
−Removed: Our principal earnings from unconsolidated affiliates is from our 50 % interest in McCormick de Mexico, S.A.
−Removed: Profit from this joint venture represented 75 % of income from unconsolidated operations in 2020, 72 % in 2019 and 76 % in 2018.
+Added: Sale of Unconsolidated Operation
+Added: On March 1, 2021, we sold our 26 % interest in Eastern Condiments Private Ltd (Eastern) for $ 65.4 million in cash, net of transaction expenses of $ 1.4 million.
+Added: Eastern was accounted for as an equity method investment with our proportionate share of earnings, prior to the sale, reflected in Income from unconsolidated operations before income taxes in our consolidated income statement.
+Added: The sale of Eastern resulted in a gain of $ 13.4 million, net of tax of $ 5.7 million.
+Added: That gain is included in Income from unconsolidated operations before income taxes in our consolidated income statement.
+Added: That gain also reflects a write-off of $ 1.4 million of foreign currency translation adjustment, a component of Accumulated other comprehensive loss.
FINANCING ARRANGEMENTS
−Removed: Our outstanding debt, including capital leases, was as follows at November 30:
+Added: Our outstanding debt, including finance leases, was as follows at November 30:
(millions) 2021 2020
6 unchanged sentences
3.90% notes due 7/8/2021 $ — $ 250.0
−Removed: $ 250.0 $ 250.0
2.70% notes due 8/15/2022 750.0 750.0
−Removed: Term loan due 8/17/2022 (2)
3.50% notes due 8/19/2023 (1)
5 unchanged sentences
1.85% notes due 2/15/2031 500.0 —
−Removed: Other, including capital leases 195.8 171.6
+Added: 4.20% notes due 8/15/2047 300.0 300.0
+Added: 7.63%–8.12% notes due 2024 55.0 55.0
+Added: Other, including finance leases 199.2 195.8
Unamortized discounts, premiums, debt issuance costs and fair value adjustments (4)
( 10.6 ) 16.9
+Added: 4,743.6 4,017.7
Less current portion 770.3 263.9
1 unchanged sentence
(1) Interest rate swaps, settled upon the issuance of these notes in 2013, effectively set the interest rate on the $ 250 million notes at a weighted-average fixed rate of 3.30 %.
−Removed: (2) The term loan was prepayable in whole or in part.
−Removed: Also, the term loan due in 2022 required quarterly principal payments of 2.5 % of the initial principal amount.
(2) Interest rate swaps, settled upon the issuance of these notes in 2015, effectively set the interest rate on the $ 250 million notes at a weighted-average fixed rate of 3.45 % .
−Removed: (4) Interest rate swaps, settled upon the issuance of these notes in 2015, effectively set the interest rate on the $ 250 million notes at a weighted-average fixed rate of 3.45 % .
The fixed interest rate on $ 100 million of the 3.25 % notes due in 2025 is effectively converted to a variable rate by interest rate swaps through 2025.
−Removed: Net interest payments are based on 3-month LIBOR plus 1.22 % during this period (our effective rate as of November 30, 2020 was 1.44 %).
+Added: Net interest payments are based on 3-month LIBOR plus 1.22 %.
+Added: Our effective rate as of November 30, 2021 was 1.38 %.
(3) Interest rate swaps, settled upon the issuance of these notes in 2017, effectively set the interest rate on the $ 750 million notes at a weighted-average fixed rate of 3.44 %.
The fixed interest rate on $ 250 million of the 3.40 % notes due in 2027 is effectively converted to a variable rate by interest rate swaps through 2027.
−Removed: Net interest payments are based on 3-month LIBOR plus 0.685 % during this period (our effective rate as of November 30, 2020 was 0.91 %).
+Added: Net interest payments are based on 3-month LIBOR plus 0.685 %.
+Added: Our effective rate as of November 30, 2021 was 0.84 %.
(4) Includes unamortized discounts, premiums and debt issuance costs of $( 31.8 ) million and $( 24.4 ) million as of November 30, 2021 and 2020, respectively.
Includes fair value adjustment associated with interest rate swaps designated as fair value hedges of $ 21.2 million and $ 41.3 million as of November 30, 2021 and 2020, respectively.
−Removed: Maturities of long-term debt, including capital leases, during the fiscal years subsequent to November 30, 2020 are as follows (in millions):
+Added: Maturities of long-term debt, including finance leases, during the fiscal years subsequent to November 30, 2021 are as follows (in millions):
Thereafter 2,135.0
+Added: In February 2021, we issued $ 500.0 million of 0.90 % notes due February 15, 2026, with cash proceeds received of $ 495.7 million, net of discounts and underwriters' fees.
+Added: Also in February 2021, we issued $ 500.0 million of 1.85 % notes due February 15, 2031, with cash proceeds received of $ 492.8 million, net of discounts and underwriters' fees.
+Added: Interest is payable semiannually on both these notes in arrears in February and August of each year.
+Added: The net proceeds from these issuances were used to pay down short-term borrowings, including a portion of the
+Added: $ 1,443.0 million of commercial paper issued to finance our acquisitions of Cholula and FONA, and for general corporate purposes.
In April 2020, we issued $ 500.0 million of 2.50 % notes due April 15, 2030, with cash proceeds received of $ 495.0 million, net of discounts and underwriters' fees.
Interest is payable semiannually in arrears in April and October of each year.
−Removed: In August 2017, we issued an aggregate amount of $ 2.5 billion of senior unsecured notes.
−Removed: These notes are due as follows:
−Removed: $ 750.0 million due August 15, 2022, $ 700.0 million due August 15, 2024, $ 750.0 million due August 15, 2027 and $ 300.0 million due August 15, 2047 with stated fixed interest rates of 2.70 %, 3.15 %, 3.40 % and 4.20 %, respectively.
−Removed: Interest is payable semiannually in arrears in August and February of each year.
−Removed: The net proceeds received from the issuance of these notes were $ 2,479.3 million and were used to partially fund our acquisition of RB Foods.
−Removed: In connection with our acquisition of RB Foods, we entered into a Term Loan Agreement (Term Loan) in August 2017.
−Removed: The Term Loan provides for three-year and five-year senior unsecured term loans, each for $ 750 million.
−Removed: The net proceeds received from the issuance of the Term Loan was $ 1,498.3 million.
−Removed: The three-year loan was payable at maturity.
−Removed: The five-year loan was payable in equal quarterly installments in an amount of 2.5 % of the initial principal amount, with the remaining unpaid balance due at maturity.
−Removed: The three-year and five-year loans were each prepayable in whole or in part.
−Removed: In 2019 and 2018, we repaid the three-year loan in the amounts of $ 130.0 million and $ 370.0 million, respectively.
−Removed: Prior to payoff, the three-year loan bore interest at LIBOR plus 1.125 %.
−Removed: In 2020, 2019 and 2018, we repaid $ 250.0 million, $ 306.3 million and $ 175.0 million, respectively, of the five-year loan.
−Removed: Prior to payoff, the five-year loan bore interest at LIBOR plus 1.25 %.
−Removed: The interest rates were based on our credit rating.
We have available credit facilities with domestic and foreign banks for various purposes.
Some of these lines are committed lines and others are uncommitted lines and could be withdrawn at various times.
−Removed: We have a five -year $ 1.0 billion revolving credit facility, which will expire in August 2022.
+Added: In June 2021, we entered into a five -year $ 1.5 billion revolving credit facility, which will expire in June 2026.
The current pricing for the credit facility, on a fully drawn basis, is LIBOR plus 1.25 %.
1 unchanged sentence
This credit facility supports our commercial paper program and, after $ 530.8 million was used to support issued commercial paper, we have $ 969.2 million of capacity at November 30, 2021.
−Removed: In December 2020, we entered into a 364-day $ 1.0 billion revolving credit facility which will expire in December 2021.
−Removed: The current pricing for that credit facility, on a fully drawn basis, is LIBOR plus 1.25 %.
−Removed: The pricing of the credit facility is based on a credit rating grid that contains a fully drawn maximum pricing of the credit facility equal to LIBOR plus 1.75 %.
−Removed: The provisions of our revolving credit facilities restrict subsidiary indebtedness and require us to maintain certain minimum and maximum financial ratios for interest expense coverage and our leverage ratio.
−Removed: The applicable leverage ratio is reduced periodically.
+Added: The provisions of this revolving credit facility restrict subsidiary indebtedness and require us to maintain a minimum interest coverage ratio.
As of November 30, 2021, our capacity under the five -year $ 1.5 billion revolving credit facility was not affected by these covenants.
−Removed: We do not expect that these covenants would limit our access to our revolving credit facilities for the foreseeable future;
−Removed: however, the leverage ratio could restrict our ability to utilize this facility.
+Added: We do not expect that these covenants would limit our access to our revolving credit facility for the foreseeable future.
+Added: This facility replaced our prior revolving credit facilities which included:
+Added: (i) a five -year $ 1.0 billion revolving credit facility that was due to expire in August 2022, and (ii) a 364 -day $ 1.0 billion revolving facility, which we entered into in December 2020 and that was due to expire in December 2021.
+Added: The pricing for our prior five-year $ 1.0 billion revolving credit facility, on a fully drawn basis, was LIBOR plus 1.25 %.
+Added: The pricing for our prior 364 -day $ 1.0 billion revolving credit facility, on a fully drawn basis, was LIBOR plus 1.25 %.
+Added: The pricing of those credit facilities was based on a credit rating grid that contains a fully drawn maximum pricing of the credit facility equal to LIBOR plus 1.75 %.
+Added: The provisions of our previous revolving credit facilities restricted subsidiary indebtedness and required us to maintain certain minimum and maximum financial ratios for interest expense coverage and our leverage ratio.
In addition, we have several uncommitted lines totaling $ 308.4 million, which have a total unused capacity at November 30, 2021 of $ 226.6 million.
These lines, by their nature, can be withdrawn based on the lenders’ discretion.
−Removed: Committed credit facilities require a fee, and commitment fees were $ 1.3 million for both 2020 and 2019.
−Removed: In 2018, we consolidated our Corporate staff and certain non-manufacturing U.S.
−Removed: employees into our new headquarters building in Hunt Valley, Maryland.
−Removed: The 15-year lease for that building requires monthly lease payments of approximately $ 0.9 million which began in April 2019.
−Removed: The $ 0.9 million monthly lease payment is subject to adjustment after an initial 60-month period and thereafter on an annual basis as specified in the lease agreement.
−Removed: Upon commencement of fit-out in the second quarter of 2018, we obtained access to the building, which resulted in the lease commencement date for accounting purposes.
−Removed: We have recognized this lease as a capital lease, with the leased asset of $ 116.1 million and $ 124.7 million included in property, plant and equipment, net, as of November 30, 2020 and 2019, respectively.
−Removed: As of November 30, 2020, the total lease obligation was $ 130.9 million, of which $ 7.1 million was included in the current portion of long-term debt and $ 123.8 million was included in long-term debt.
−Removed: As of November 30, 2019, the total lease obligation was $ 137.7 million, of which $ 6.8 million was included in the current portion of long-term debt and $ 130.9 million was included in long-term debt.
−Removed: During 2020, 2019 and 2018, respectively, we recognized amortization expense of $ 8.7 million, $ 8.7 million and $ 5.2 million related to the leased asset.
+Added: Committed credit facilities require a fee, and commitment fees were $ 2.0 million, $ 1.3 million and $ 1.3 million for 2021, 2020 and 2019, respectively.
+Added: We entered into a Term Loan Agreement (Term Loan) in August 2017.
+Added: The Term Loan provided for three -year and five -year senior unsecured term loans, each for $ 750 million.
+Added: The three-year loan was payable at maturity.
+Added: The five-year loan was payable in equal quarterly installments in an amount of 2.5 % of the initial principal amount, with the remaining unpaid balance due at maturity.
+Added: The three-year and five-year loans were each prepayable in whole or in part.
+Added: In 2020, we repaid the five-year loan.
+Added: Prior to payoff, the five-year loan bore interest at LIBOR plus 1.25 %.
+Added: In 2019, we repaid the three-year loan.
+Added: Prior to payoff, the three-year loan bore interest at LIBOR plus 1.125 %.
+Added: The interest rates were based on our credit rating.
At November 30, 2021, we had guarantees outstanding of $ 0.6 million with terms of one year or less.
−Removed: As of both November 30, 2020 and 2019, we had outstanding letters of credit of $ 32.2 million.
+Added: As of November 30, 2021 and 2020, we had outstanding letters of credit of $ 63.7 million and $ 32.2 million, respectively.
These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions.
3 unchanged sentences
and (iii) automobiles, delivery trucks and other vehicles, including an airplane.
−Removed: When our real estate lease arrangements
−Removed: include lease and non-lease components (for example, common area maintenance), we account for each component separately, based on their relative standalone prices.
−Removed: For all other asset categories, we combine lease components and non-lease components into a single lease commitment.
−Removed: We determine if an agreement is a lease or contains a lease at inception.
−Removed: Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet.
−Removed: ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.
−Removed: ROU assets and liabilities are based on the estimated present value of lease payments over the lease term and are recognized at the lease commencement date.
−Removed: As most of our leases do not provide an implicit borrowing rate, we use our estimated incremental borrowing rate in determining the present value of lease payments.
−Removed: The estimated incremental borrowing rate is derived from information available at the lease commencement date.
−Removed: Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
A limited number of our lease agreements include rental payments that are adjusted periodically based on a market rate or index.
Our lease agreements generally do not contain residual value guarantees or material restrictive covenants, with the exception of the non-cancellable synthetic lease discussed below.
−Removed: The following presents the components of our lease expense for the year ended November 30, 2020 (in millions):
+Added: The following presents the components of our lease expense for the years ended November 30 (in millions):
Operating lease cost $ 45.0 $ 41.2
4 unchanged sentences
(1) Net lease cost does not include short-term leases, variable lease costs or sublease income, all of which are immaterial.
−Removed: Rental expense under operating leases (primarily buildings and equipment) was $ 48.1 million in 2019 and $ 58.5 million in 2018.
+Added: Rental expense under operating leases (primarily buildings and equipment) was $ 48.1 million in 2019.
Supplemental balance sheet information related to leases as of November 30 were as follows (in millions):
8 unchanged sentences
Total lease liabilities $ 266.1 $ 273.6
+Added: Our Corporate functions, Americas' leadership, and U.S.
+Added: staff reside in our Hunt Valley, Maryland headquarters office building.
+Added: The 15-year lease for that building requires monthly lease payments of approximately $ 0.9 million which began in April 2019.
+Added: The $ 0.9 million monthly lease payment is subject to adjustment after an initial 60-month period and thereafter on an annual basis as specified in the lease agreement.
+Added: We recognized this lease as a finance lease, with the leased asset of $ 107.4 million and $ 116.1 million included in property, plant and equipment, net, as of November 30, 2021 and 2020, respectively.
+Added: During each of the years ended November 30, 2021, 2020 and 2019, we recognized amortization expense of $ 8.7 million related to the leased asset.
+Added: As of November 30, 2021, the total lease obligation associated with this building was $ 123.8 million, of which $ 7.3 million was included in the current portion of long-term debt and $ 116.5 million was included in long-term debt.
+Added: As of November 30, 2020, the total lease obligation was $ 130.9 million, of which $ 7.1 million was included in the current portion of long-term debt and $ 123.8 million was included in long-term debt.
Information regarding our lease terms and discount rates as of November 30 were as follows:
−Removed: Weighted-average remaining lease term (years) Weighted-average discount rate
+Added: Weighted-average remaining lease term (years) Weighted-average discount rate Weighted-average remaining lease term (years) Weighted-average discount rate
Operating leases 6.8 1.9 % 5.6 1.9 %
11 unchanged sentences
Total lease liabilities $ 140.4 $ 125.7 $ 266.1
−Removed: Supplemental cash flow and other information related to leases for the year ended November 30, 2020 were as follows (in millions):
+Added: Supplemental cash flow and other information related to leases for the years ended November 30 were as follows (in millions):
Cash paid for amounts included in the measurements of lease liabilities:
10 unchanged sentences
The lease arrangement also contains a residual value guarantee of approximately 75 % of the total construction cost.
−Removed: The lease also contains covenants that are consistent with our revolving credit agreements as disclosed in Note 6.
+Added: The lease also contains covenants that are consistent with our $ 1.5 billion, five -year revolving credit agreement as disclosed in note 6.
FINANCIAL INSTRUMENTS
11 unchanged sentences
Hedge ineffectiveness was not material.
−Removed: All foreign currency exchange contracts outstanding at November 30, 2020 have durations of less than 18 months.
+Added: All foreign currency exchange contracts outstanding at November
+Added: 30, 2021 have durations of less than 18 months, including $ 209.7 million of notional contracts that have durations of less than one month and are used to hedge short-term cash flow funding.
Contracts which are designated as hedges of anticipated purchases denominated in a foreign currency (generally purchases of raw materials in U.S.
5 unchanged sentences
Any gains or losses recorded based on both the change in fair value of these contracts and the change in the currency component of the underlying loans are recognized in our consolidated income statement as other income, net.
−Removed: Beginning in the first quarter of 2019, we also utilized cross currency interest rate swap contracts that are designated as net investment hedges.
−Removed: As of November 30, 2020, we had cross currency interest rate swap contracts of (i) $ 250 million notional value to receive $ 250 million at three-month U.S.
+Added: We also utilize cross currency interest rate swap contracts that are designated as net investment hedges.
+Added: As of November 30, 2021 and 2020, we had cross currency interest rate swap contracts of (i) $ 250 million notional value to receive $ 250 million at three-month U.S.
LIBOR plus 0.685 % and pay £ 194.1 million at three-month GBP LIBOR plus 0.740 % and (ii) £ 194.1 million notional value to receive £ 194.1 million at three-month GBP LIBOR plus 0.740 % and pay € 221.8 million at three-month Euro EURIBOR plus 0.808 %.
9 unchanged sentences
Hedge ineffectiveness was not material.
−Removed: All derivatives are recognized at fair value in our balance sheet and recorded in either other current assets, or other long-term assets, other accrued liabilities or other long-term liabilities depending upon their nature and maturity.
The following tables disclose the notional amount and fair values of derivative instruments on our consolidated balance sheet:
17 unchanged sentences
Foreign exchange contracts Other current assets 27.5 1.4 Other accrued liabilities 356.3 8.2
−Removed: Cross currency contracts Other current assets/Other long-term assets 495.5 3.2 Other accrued liabilities — —
+Added: Cross currency contracts Other current assets/Other long-term assets — — Other long-term liabilities 524.4 18.8
Total $ 44.5 $ 27.0
16 unchanged sentences
The amount of gain or loss recognized in income on the ineffective portion of derivative instruments is not material.
−Removed: The net amount of accumulated other comprehensive income expected to be reclassified into income related to these contracts in the next twelve months is a $ 0.7 million increase to earnings.
+Added: The net amount of accumulated other comprehensive income expected to be reclassified into income related to
+Added: these contracts in the next twelve months is a $ 0.2 million decrease to earnings.
Net investment hedges (millions)
5 unchanged sentences
The amounts noted in the tables above for OCI do not include any adjustments for the impact of deferred income taxes.
−Removed: Fair Value of Financial Instruments
−Removed: The carrying amount and fair value of financial instruments as of November 30 were as follows:
−Removed: (millions) Carrying
−Removed: value Carrying
−Removed: Long-term investments $ 129.9 $ 129.9 $ 124.4 $ 124.4
−Removed: Long-term debt (including current portion) 4,017.7 4,357.1 3,723.5 3,859.0
−Removed: Level 1 valuation techniques 4,161.3 3,437.5
−Removed: Level 2 valuation techniques 195.8 421.5
−Removed: Derivatives related to:
−Removed: Interest rates (assets) 43.1 43.1 20.9 20.9
−Removed: Foreign currency (assets) 1.4 1.4 3.3 3.3
−Removed: Foreign currency (liabilities) 8.2 8.2 3.6 3.6
−Removed: Cross currency (assets) — — 3.2 3.2
−Removed: Cross currency (liabilities) 18.8 18.8 — —
−Removed: Because of their short-term nature, the amounts reported in the balance sheet for cash and cash equivalents, receivables, short-term borrowings and trade accounts payable approximate fair value.
−Removed: The fair value for Level 2 long-term debt is determined by using quoted prices for similar debt instruments.
−Removed: Investments in affiliates are not readily marketable, and it is not practicable to estimate their fair value.
−Removed: Long-term investments are comprised of fixed income and equity securities held on behalf of employees in certain employee benefit plans and are stated at fair value on the balance sheet.
Concentrations of Credit Risk
20 unchanged sentences
Fair value measurements using fair
−Removed: value hierarchy as of November 30, 2020
+Added: value hierarchy as of
+Added: November 30, 2021
(millions) Fair value Level 1 Level 2
4 unchanged sentences
Foreign currency derivatives 8.3 — 8.3
+Added: Cross currency contracts 4.4 — 4.4
Total $ 524.8 $ 356.8 $ 168.0
3 unchanged sentences
Fair value measurements using fair
−Removed: value hierarchy as of November 30, 2019
+Added: value hierarchy as of
+Added: November 30, 2020
(millions) Fair value Level 1 Level 2
4 unchanged sentences
Foreign currency derivatives 1.4 — 1.4
−Removed: Cross currency contracts 3.2 — 3.2
Total $ 598.0 $ 427.5 $ 170.5
Foreign currency derivatives 8.2 — 8.2
+Added: Cross currency contracts 18.8 — 18.8
Total $ 27.0 $ — $ 27.0
+Added: At November 30, 2021 and 2020, we had no financial assets or liabilities that were subject to a level 3 fair value measurement.
+Added: At November 30, 2021 and 2020, the carrying amount of interest rate derivatives, foreign currency derivatives, cross currency contracts, insurance contracts, and bond and other long-term investments are equal to their respective fair values.
+Added: Because of their short-term nature, the amounts reported in the balance sheet for cash and cash equivalents, receivables, short-term borrowings and trade accounts payable approximate fair value.
+Added: Investments in affiliates are not readily marketable, and it is not practicable to estimate their fair value.
+Added: Insurance contracts, bonds, and other long-term investments are comprised of fixed income and equity securities held for certain non-qualified U.S.
+Added: employee benefit plans and are stated at fair value on the balance sheet.
The fair values of insurance contracts are based upon the underlying values of the securities in which they are invested and are from quoted market prices from various stock and bond exchanges for similar type assets.
The fair values of bonds and other long-term investments are based on quoted market prices from various stock and bond exchanges.
−Removed: The fair values for interest rate and foreign currency derivatives are based on values for similar instruments using models with market-based inputs.
−Removed: At November 30, 2020 and 2019, we had no financial assets or liabilities that were subject to a level 3 fair value measurement.
+Added: The fair values for interest rate derivatives, foreign currency derivatives, and cross currency contracts are based on values for similar instruments using models with market-based inputs.
+Added: The carrying amount and fair value of long-term debt, including the current portion, as of November 30 were as follows:
+Added: (millions) 2021 2020
+Added: value Carrying
+Added: Long-term debt (including current portion) $ 4,743.6 $ 4,921.5 $ 4,017.7 $ 4,357.1
+Added: Level 1 valuation techniques 4,722.3 4,161.3
+Added: Level 2 valuation techniques 199.2 195.8
+Added: The fair value for Level 2 long-term debt is determined by using quoted prices for similar debt instruments.
ACCUMULATED OTHER COMPREHENSIVE LOSS
3 unchanged sentences
$ ( 233.3 ) $ ( 174.0 )
−Removed: Unrealized loss on foreign currency exchange contracts ( 0.4 ) —
+Added: Unrealized gain (loss) on foreign currency exchange contracts 0.6 ( 0.4 )
Unamortized value of settled interest rate swaps ( 0.2 ) ( 0.1 )
1 unchanged sentence
$ ( 426.5 ) $ ( 470.8 )
+Added: (1) During the year ended November 30, 2021, the foreign currency translation adjustment of accumulated other comprehensive loss increased by $( 59.3 ) million, including the impact of a $ 15.5 million decrease associated with net investment hedges.
During the year ended November 30, 2020, the foreign currency translation adjustment of accumulated other comprehensive loss decreased by $ 92.5 million, including the impact of a $ 20.8 million increase associated with net investment hedges.
−Removed: During the year ended November 30, 2019, the foreign currency translation adjustment of accumulated other comprehensive loss increased by $ 24.9 million, of which $ 0.9 million was associated with net investment hedges.
These net investment hedges are more fully described in note 8.
25 unchanged sentences
During fiscal year 2017, we made significant changes to certain of our employee benefit plans and retirements plans that froze the accrual of certain defined benefit pension plans in the U.S.
−Removed: and the United Kingdom.
−Removed: Also, on December 1, 2017, our Management Committee approved the freezing of benefits under our pension plans in Canada.
−Removed: The effective date of this freeze was November 30, 2019.
+Added: and the United Kingdom with effective dates of the plan being frozen occurring between December 31, 2016 and November 30, 2018.
+Added: Also, on December
+Added: 1, 2017, the freezing of benefits under our pension plans in Canada was approved with an effective date of November 30, 2019.
Although those plans have been frozen, employees who are participants in the plans retained benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plans.
−Removed: As a result of the change to our pension plans in Canada, we remeasured pension assets and benefit obligations as of the date of the approval indicated above and, in fiscal year 2018, we reduced the Canadian plan benefit obligations by $ 17.5 million.
−Removed: These remeasurements resulted in a non-cash, pre-tax net actuarial gain of $ 17.5 million in fiscal year 2018.
−Removed: These net actuarial gains consist principally of a curtailment gain of $ 18.0 million, which is included in our consolidated statement of comprehensive income for 2018 as a component of "Other comprehensive income (loss)" on the line entitled "Unrealized components of pension plans".
−Removed: Deferred taxes associated with this actuarial gain, together with other unrealized components of pension plans recognized during 2018, are also included in that statement as a component of "Other comprehensive income (loss)".
Included in our consolidated balance sheet as of November 30, 2021 on the line entitled "Accumulated other comprehensive loss" was $ 248.7 million ($ 193.6 million net of tax) related to net unrecognized actuarial losses that have not yet been recognized in net periodic pension or postretirement benefit cost.
18 unchanged sentences
We adjust the outcomes for the fact that plan assets are invested with actively managed funds and subject to tactical asset reallocation.
−Removed: Our pension expense for the years ended November 30 was as follows:
+Added: Our pension expense (income) for the years ended November 30 was as follows:
United States International
5 unchanged sentences
Amortization of net actuarial loss 11.0 7.8 2.3 2.2 2.0 1.2
−Removed: Settlement/curtailment loss — — — 1.3 — 0.5
−Removed: $ 0.2 $ ( 3.2 ) $ 15.1 $ ( 3.1 ) $ ( 1.9 ) $ 0.3
+Added: Settlement loss — — — 0.7 1.3 —
+Added: Total pension expense (income) $ — $ 0.2 $ ( 3.2 ) $ ( 2.8 ) $ ( 3.1 ) $ ( 1.9 )
A rollforward of the benefit obligation, fair value of plan assets and a reconciliation of the pension plans’ funded status as of November 30, the measurement date, follows:
5 unchanged sentences
Interest costs 25.9 29.3 7.1 7.5
−Removed: Employee contributions — — — 0.6
−Removed: Actuarial loss 82.1 134.6 19.1 51.8
+Added: Plan amendments — — 0.5 —
+Added: Actuarial (gain) loss ( 21.9 ) 82.1 ( 7.4 ) 19.1
Benefits paid ( 44.2 ) ( 41.4 ) ( 16.6 ) ( 14.1 )
6 unchanged sentences
Employer contributions 13.4 10.4 1.6 1.5
−Removed: Employee contributions — — — 0.8
Benefits paid ( 44.2 ) ( 41.4 ) ( 16.6 ) ( 14.1 )
6 unchanged sentences
Fair value of plan assets 754.0 688.2 1.8 87.7
+Added: The accumulated benefit obligation is the present value of pension benefits (whether vested or unvested) attributed to employee service rendered before the measurement date and based on employee service and compensation prior to that date.
+Added: The accumulated benefit obligation differs from the projected benefit obligation in that it includes no assumption about future compensation or service levels.
+Added: The accumulated benefit obligation for the U.S.
+Added: pension plans was $ 912.3 million and $ 945.1 million as of November 30, 2021 and 2020, respectively.
+Added: The accumulated benefit obligation for the international pension plans was $ 351.3 million and $ 367.9 million as of November 30, 2021 and 2020, respectively.
Included in the U.S.
in the preceding table is a benefit obligation of $ 104.2 million and $ 110.5 million for 2021 and 2020, respectively, related to our Supplemental Executive Retirement Plan (SERP).
−Removed: The assets related to this plan,
−Removed: which totaled $ 86.4 million and $ 85.5 million as of November 30, 2020 and 2019, respectively, are held in a rabbi trust and accordingly have not been included in the preceding table.
+Added: The assets related to this plan, which totaled $ 90.3 million and $ 86.4 million as of November 30, 2021 and 2020, respectively, are held in a rabbi trust and accordingly have not been included in the preceding table.
Amounts recorded in the balance sheet for all defined benefit pension plans as of November 30 consist of the following:
4 unchanged sentences
Deferred income tax assets 52.9 74.0 3.9 14.3
−Removed: Accumulated other comprehensive loss 235.5 183.9 63.7 60.1
−Removed: The accumulated benefit obligation is the present value of pension benefits (whether vested or unvested) attributed to employee service rendered before the measurement date and based on employee service and compensation prior to that date.
−Removed: The accumulated benefit obligation differs from the projected benefit obligation in that it includes no assumption about future compensation or service levels.
−Removed: The accumulated benefit obligation for the U.S.
−Removed: pension plans was $ 945.1 million and $ 874.8 million as of November 30, 2020 and 2019, respectively.
−Removed: The accumulated benefit obligation for the international pension plans was $ 367.9 million and $ 342.2 million as of November 30, 2020 and 2019, respectively.
+Added: Accumulated other comprehensive loss, net of tax 167.8 235.5 32.2 63.7
The investment objectives of the defined benefit pension plans are to provide assets to meet the current and future obligations of the plans at a reasonable cost to us.
32 unchanged sentences
High yield bonds (d)
−Removed: International/government/corporate bonds (e)
Insurance contracts (f)
83 unchanged sentences
For the plans’ hedge funds, private equity funds and private debt funds, we engage an independent advisor to compare the funds’ returns to other funds with similar strategies.
−Removed: Each fund is required to have an annual audit by
−Removed: an independent accountant, which is provided to the independent advisor.
+Added: Each fund is required to have an annual audit by an independent accountant, which is provided to the independent advisor.
This provides a basis of comparability relative to similar assets.
3 unchanged sentences
pension plan assets) at November 30, 2021 and 2020, respectively.
−Removed: Dividends paid on these shares were $ 0.9 million in both 2020 and 2019.
+Added: Dividends paid on these shares were $ 0.7 million and $ 0.9 million in 2021 and 2020, respectively.
Pension benefit payments in our most significant plans are made from assets of the pension plans.
9 unchanged sentences
Defined Contribution Retirement Plans
−Removed: Effective December 1, 2018 for the U.S.
−Removed: defined contribution retirement plan, we match 100 % of a participant’s contribution up to the first 3 % of the participant’s salary, and 66.7 % of the next 3 % of the participant’s salary.
+Added: qualified and non-qualified defined contribution retirement plans, we match 100 % of a participant’s contribution up to the first 3 % of the participant’s salary, and 66.7 % of the next 3 % of the participant’s salary.
In addition, we make contributions of 3 % of the participant's salary for all U.S.
employees who are employed on December 31 of each year.
−Removed: Prior to December 1, 2018 for the U.S.
−Removed: defined contribution retirement plan, we matched 100% of a participant’s contribution up to the first 3% of the participant’s salary, and 50% of the next 2% of the participant’s salary.
−Removed: In addition, we made contributions of 3% of the participant's salary for U.S.
−Removed: employees not covered by the defined benefit plan.
−Removed: Some of our smaller U.S.
−Removed: subsidiaries sponsor separate 401(k) retirement plans.
−Removed: We also sponsor a non-qualified defined contribution retirement plan.
+Added: Some of our smaller subsidiaries sponsor separate 401(k) retirement plans.
Our contributions charged to expense under all U.S.
defined contribution retirement plans were $ 29.8 million, $ 30.8 million and $ 28.2 million in 2021, 2020 and 2019, respectively.
−Removed: At the participant’s election, 401(k) retirement plans held 2.9 million shares of McCormick stock, with a fair value of $ 267.3 million, at November 30, 2020.
+Added: At the participants' election, 401(k) retirement plans held 2.8 million shares of McCormick stock, with a fair value of $ 238.9 million, at November 30, 2021.
Dividends paid on the shares held in the 401(k) retirement plans in 2021 and 2020 were $ 3.9 million and $ 3.8 million, respectively, in each year.
6 unchanged sentences
They are eligible for coverage on an access-only basis.
−Removed: Our other postretirement benefit (income) expense for the years ended November 30 follows:
+Added: Our other postretirement benefit expense (income) for the years ended November 30 follows:
(millions) 2021 2020 2019
3 unchanged sentences
Amortization of actuarial gains — ( 0.1 ) ( 0.9 )
−Removed: Postretirement benefit (income) expense $ ( 0.8 ) $ ( 5.1 ) $ ( 4.3 )
+Added: Postretirement benefit expense (income) $ 3.3 $ ( 0.8 ) $ ( 5.1 )
Rollforwards of the benefit obligation, fair value of plan assets and a reconciliation of the plans’ funded status at November 30, the measurement date, follow:
5 unchanged sentences
Participant contributions 2.0 2.1
−Removed: Plan amendments — ( 0.4 )
−Removed: Actuarial loss 3.9 4.1
+Added: Actuarial (gain) loss ( 4.3 ) 3.9
Benefits paid ( 6.1 ) ( 6.4 )
29 unchanged sentences
As of November 30, 2021, we have 5.5 million shares remaining available for future issuance under our RSUs, stock option and LTPP award programs.
−Removed: For all awards, forfeiture rates are considered in the calculation of compensation expense.
−Removed: The following summarizes the key terms and the methods of valuation and expense recognition for each of our stock-based compensation awards.
+Added: The following summarizes the key terms, a summary of activity, and the methods of valuation for each of our stock-based compensation awards.
RSUs are valued at the market price of the underlying stock, discounted by foregone dividends, on the date of grant.
70 unchanged sentences
Expected lives 5.6 - 6.2 years
−Removed: Our LTPP grants in 2018 will deliver awards in a combination of cash and company stock.
−Removed: The stock compensation portion of the LTPP grants in 2018 awards shares of company stock if certain company performance objectives are met at the end of a three-year period.
−Removed: LTPP awards granted in 2020 and 2019 will be delivered entirely in company stock, with the target award calculated using a combination of a market-based total shareholder return and performance-based components.
+Added: The following is a summary of our Price-Vested Stock Options activity for the year ended November 30, 2021:
+Added: (shares in thousands) 2021 2020
+Added: Shares Weighted-
+Added: Grant-Date Fair Value Number
+Added: Shares Weighted-
+Added: Grant-Date Fair Value
+Added: Beginning of year 2,482 $ 9.40 — $ —
+Added: Granted 15 9.66 2,482 9.40
+Added: Forfeited ( 304 ) 9.41 — —
+Added: Outstanding—end of year 2,193 $ 9.40 2,482 $ 9.40
+Added: As of November 30, 2021 and 2020, the outstanding options are divided equally between the three appreciation thresholds.
+Added: LTPP awards granted in 2021, 2020 and 2019 will be delivered in company stock, with the award attainment calculated as a percentage of target based on a combination of a performance-based component and a market-based total shareholder return.
These awards are valued based on the fair value of the underlying stock on the date of grant.
21 unchanged sentences
Total income tax expense (benefit) $ 192.7 $ 174.9 $ 157.4
−Removed: In December 2017, President Trump signed into law Pub.
−Removed: 115-97, “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (this legislation is referred to herein as the U.S.
−Removed: Tax Act provides for significant changes in the U.S.
−Removed: Internal Revenue Code of 1986, as amended.
−Removed: Certain provisions of the U.S.
−Removed: Tax Act were effective during our fiscal year ended November 30, 2018 with all provisions of the U.S.
−Removed: Tax Act effective as of the beginning of our fiscal year beginning December 1, 2018.
−Removed: Tax Act contains provisions with separate effective dates but is generally effective for taxable years beginning after December 31, 2017.
−Removed: Tax Act creates a new requirement that certain income earned by foreign subsidiaries, known as Global Intangible Low-Taxed Income (GILTI), must be included in the gross income of the subsidiary’s U.S.
−Removed: This provision of the U.S.
−Removed: Tax Act was effective for us for our fiscal year beginning December 1, 2018.
−Removed: Beginning on January 1, 2018, the U.S.
−Removed: Tax Act lowered the U.S.
−Removed: corporate income tax rate from 35 % to 21 % on our U.S.
−Removed: earnings from that date and beyond.
−Removed: The revaluation of our U.S.
−Removed: deferred tax assets and liabilities to the 21% corporate tax rate has reduced our net U.S.
−Removed: deferred income tax liability by $ 380.0 million and is reflected as a reduction in our income tax expense in our results for the year ended November 30, 2018.
−Removed: Tax Act imposed a one-time transition tax on post-1986 earnings of non-U.S.
−Removed: affiliates that have not been repatriated for purposes of U.S.
−Removed: federal income tax, with those earnings taxed at rates of 15.5 % for earnings reflected by cash and cash equivalent items and 8% for other assets.
−Removed: This transition tax, based on our fiscal 2018 tax return filed in fiscal 2019, was $ 76.0 million (we estimated the transition tax to be $ 75.3 million in fiscal 2018).
−Removed: The cash tax effects of the transition tax, reduced by the utilization of $ 21.1 million of current and carried forward excess foreign tax credits, as well as other items of $ 7.7 million, resulted in a net tax liability of $ 47.2 million, which can be remitted in installments over an eight-year period as we are doing.
−Removed: As of November 30, 2020, our remaining unpaid transition tax is $ 39.7 million.
−Removed: In addition to the estimated transition tax of $ 75.3 million recognized in 2018, we incurred additional foreign withholding taxes, net of a U.S.
−Removed: foreign tax credit, of $ 7.9 million and a $ 4.7 million reduction in our fiscal 2018 income taxes as a consequence of the transition tax, both of which we recognized as a component of our income tax expense for the year ended November 30, 2018, for a net transition tax impact recognized in 2018 of $ 78.5 million.
The components of income from consolidated operations before income taxes for the years ended November 30 follow:
12 unchanged sentences
Stock compensation expense ( 0.4 ) ( 1.5 ) ( 2.8 )
−Removed: manufacturing deduction — — ( 0.8 )
Changes in prior year tax contingencies ( 2.5 ) ( 0.3 ) ( 0.3 )
−Removed: Non-recurring benefit of U.S.
−Removed: Tax Act — ( 0.2 ) ( 40.7 )
+Added: Acquisition-related state tax rate change, net of federal benefits 1.2 — —
Valuation allowance release ( 0.5 ) ( 1.4 ) —
Intra-entity asset transfer — ( 1.1 ) ( 1.8 )
+Added: Non-recurring benefit of U.S.
+Added: Tax Act — — ( 0.2 )
Other, net 0.2 ( 0.5 ) ( 0.4 )
21 unchanged sentences
At November 30, 2021, we also have U.S.
−Removed: foreign tax credit carryforwards of $ 7.3 million which expire in 2030.
+Added: foreign tax credit carryforwards of $ 7.0 million and $ 5.3 million which expire in 2030 and 2031, respectively.
A valuation allowance has been provided to cover deferred tax assets that are not more likely than not realizable.
−Removed: The net decrease of $ 0.9 million in the valuation allowance from November 30, 2019 to November 30, 2020 resulted primarily from the net reversal of valuation allowances for net operating losses, capital losses and other tax attributes in certain non-US jurisdictions.
+Added: The net increase of $ 1.2 million in the valuation allowance from November 30, 2020 to November 30, 2021 resulted primarily from the net increase of valuation allowances for net operating losses and other tax attributes in the U.S.
+Added: and certain non-U.S.
+Added: jurisdictions.
+Added: In December 2017, "An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018" was enacted into law as Pub.
+Added: 115-9 (hereafter referred to as the "U.S.
Prior to the U.S.
13 unchanged sentences
Additions for prior year tax positions 0.1 2.5 0.6
−Removed: Reductions for prior year tax positions — ( 0.3 ) ( 6.9 )
−Removed: Settlements — — —
+Added: Reductions of prior year tax positions ( 11.6 ) — ( 0.3 )
Statute expirations ( 6.0 ) ( 4.2 ) ( 2.5 )
+Added: Settlements ( 0.2 ) — —
Foreign currency translation 0.4 1.2 ( 0.3 )
Balance at November 30 $ 26.8 $ 39.3 $ 32.0
−Removed: As of November 30, 2020, November 30, 2019, and November 30, 2018, if recognized, $ 39.3 million, $ 32.0 million and $ 27.5 million, respectively, of the unrecognized tax benefits would affect the effective rate.
+Added: As of November 30, 2021, 2020, and 2019, if recognized, $ 26.8 million, $ 39.3 million and $ 32.0 million, respectively, of the unrecognized tax benefits would affect the effective rate.
We record interest and penalties on income taxes in income tax expense.
−Removed: We recognized interest and penalty expense of $ 0.8 million, $ 2.1 million and $ 0.1 million in 2020, 2019 and 2018, respectively.
−Removed: As of November 30, 2020 and 2019, we had accrued $ 8.3 million and $ 7.1 million, respectively, of interest and penalties related to unrecognized tax benefits.
+Added: We recognized interest and penalty expense (benefit) of $( 3.7 ) million, $ 0.8 million and $ 2.1 million in 2021, 2020 and 2019, respectively.
+Added: November 30, 2021 and 2020, we had accrued $ 4.7 million and $ 8.3 million, respectively, of interest and penalties related to unrecognized tax benefits.
Tax settlements or statute of limitation expirations could result in a change to our uncertain tax positions.
10 unchanged sentences
CAPITAL STOCK AND EARNINGS PER SHARE
+Added: On April 5, 2021, following approval by the Company’s shareholders on March 31, 2021, amendments to the Company’s Charter became effective that increased the number of authorized shares of each class of common stock from 320,000,000 to 640,000,000 and established the par value of each class of common stock at $ 0.01 per share.
+Added: The par value and additional paid in capital associated with each class of common stock is recorded in Common stock and Common stock non-voting in our consolidated balance sheet.
Holders of Common Stock have full voting rights except that (1) the voting rights of persons who are deemed to own beneficially 10% or more of the outstanding shares of Common Stock are limited to 10 % of the votes entitled to be cast by all holders of shares of Common Stock regardless of how many shares in excess of 10% are held by such person;
23 unchanged sentences
The consumer and flavor solutions segments manufacture, market and distribute spices, seasoning mixes, condiments and other flavorful products throughout the world.
−Removed: Our consumer segment sells to retail channels, including grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce under the “McCormick” brand and a variety of brands around the world, including “French's,” “Frank's RedHot,” “Lawry’s,” “Zatarain’s,” “Simply Asia,” “Thai Kitchen,” “Ducros,” “Vahiné,” "Cholula," “Schwartz,” “Club House,” “Kamis,” “Kohinoor,” "DaQiao," "Drogheria & Alimentari," "Stubb's," "OLD BAY" and "Gourmet Garden." Our flavor solutions segment sells to food manufacturers and the foodservice industry both directly and indirectly through distributors, with the exception of our businesses in China and India, where foodservice sales are managed by and reported in our consumer segment.
+Added: Our consumer segment sells to retail channels, including grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce under the “McCormick” brand and a variety of brands around the world, including “French's,” “Frank's RedHot,” “Lawry’s,” “Zatarain’s,” “Simply Asia,” “Thai Kitchen,” “Ducros,” “Vahiné,” "Cholula," “Schwartz,” “Club House,” “Kamis,” "DaQiao," "Drogheria & Alimentari," "Stubb's," "OLD BAY" and "Gourmet Garden." Our flavor solutions segment sells to food manufacturers and the foodservice industry both directly and indirectly through distributors, with the exception of our businesses in China and India, where foodservice sales are managed by and reported in our consumer segment.
In each of our segments, we produce and sell many individual products which are similar in composition and nature.
2 unchanged sentences
We measure segment performance based on operating income excluding special charges as this activity is managed separately from the business segments.
−Removed: We also excluded transaction and integration expenses related to our acquisitions of Cholula, FONA and RB Foods from our measure of segment performance as these expenses are similarly managed separately from the business segments.
+Added: We also excluded transaction and integration expenses related to our acquisitions, including the recent acquisitions of Cholula and FONA, from our measure of segment performance as these expenses are similarly managed separately from the business segments.
These transaction and integration expenses excluded from our segment performance measure include the amortization of the acquisition-date fair value adjustment of inventories that is included in cost of goods sold, costs directly associated with that acquisition and costs associated with integrating the businesses.
2 unchanged sentences
We have a large number of customers for our products.
−Removed: Sales to one of our consumer segment customers, Wal-Mart Stores, Inc., accounted for approximately 12 % of consolidated sales in 2020 and 11 % of consolidated sales in 2019 and 2018.
−Removed: Sales to one of our flavor solutions segment customers, PepsiCo, Inc., accounted for approximately 11 % of consolidated sales in 2020 and 10 % of consolidated sales in both 2019 and 2018.
+Added: Sales to one of our consumer segment customers, Wal-Mart Stores, Inc., accounted for approximately 11 %, 12 % and 11 % of consolidated sales in 2021, 2020, and 2019, respectively.
+Added: Sales to one of our flavor solutions segment customers, PepsiCo, Inc., accounted for approximately 11 %, 11 %, and 10 % of consolidated sales in 2021, 2020, and 2019, respectively.
Accounting policies for measuring segment operating income and assets are consistent with those described in note 1.
7 unchanged sentences
Net sales $ 3,937.5 $ 2,380.4 $ 6,317.9 $ — $ 6,317.9
−Removed: Operating income excluding special charges
−Removed: 780.9 237.9 1,018.8 — 1,018.8
+Added: Operating income excluding special charges and transaction and integration expenses 804.9 296.6 1,101.5 — 1,101.5
Income from unconsolidated operations 47.8 4.4 52.2 — 52.2
10 unchanged sentences
Net sales $ 3,269.8 $ 2,077.6 $ 5,347.4 $ — $ 5,347.4
−Removed: Operating income excluding special charges and transaction and integration expenses
−Removed: 637.1 292.8 929.9 — 929.9
+Added: Operating income excluding special charges 676.3 302.2 978.5 — 978.5
Income from unconsolidated operations 31.8 9.1 40.9 — 40.9
4 unchanged sentences
(millions) Consumer Flavor Solutions Total
−Removed: Operating income excluding special charges and transaction and integration expenses $ 780.9 $ 237.9 $ 1,018.8
+Added: Operating income excluding special charges and transaction and integration
+Added: expenses $ 804.9 $ 296.6 $ 1,101.5
+Added: Special charges and transaction-related expenses included in cost of
+Added: goods sold 8.7 2.3 11.0
+Added: Other special charges 31.5 14.9 46.4
+Added: Other transaction and integration expenses 7.8 21.2 29.0
+Added: Operating income $ 756.9 $ 258.2 $ 1,015.1
+Added: Operating income excluding special charges and transaction and integration
+Added: expenses $ 780.9 $ 237.9 $ 1,018.8
Special charges 5.5 1.4 6.9
3 unchanged sentences
Special charges 13.1 7.7 20.8
−Removed: 13.1 7.7 20.8
Operating income $ 663.2 $ 294.5 $ 957.7
−Removed: Operating income excluding special charges and transaction and integration expenses $ 637.1 $ 292.8 $ 929.9
−Removed: Special charges 10.0 6.3 16.3
−Removed: Transaction and integration expenses 15.0 7.5 22.5
−Removed: Operating income $ 612.1 $ 279.0 $ 891.1
Geographic Areas
19 unchanged sentences
At November 30 (millions) 2021 2020
+Added: Trade accounts receivable allowance for doubtful accounts $ 5.2 $ 5.2
Finished products $ 556.2 $ 499.3
6 unchanged sentences
Land and improvements $ 95.1 $ 87.2
−Removed: Buildings (including capital lease) 698.2 658.5
+Added: Buildings (including finance leases) 694.7 698.2
Machinery, equipment and other 1,200.5 1,102.9
6 unchanged sentences
Right of use asset 136.8 136.8
−Removed: Software, net of accumulated amortization $281.8 for 2020 and $275.0 for 2019 116.0 76.4
+Added: Software, net of accumulated amortization of $248.5 for 2021 and $281.8 for 2020 141.1 116.0
Other 202.2 176.3
20 unchanged sentences
Dividends declared per share were $ 1.39 in 2021, $ 1.27 in 2020, and $ 1.17 in 2019.
−Removed: SELECTED QUARTERLY DATA (UNAUDITED)
−Removed: (millions except per share data) First Second Third Fourth
−Removed: Net sales $ 1,212.0 $ 1,401.1 $ 1,430.3 $ 1,557.9
−Removed: Gross profit 469.9 579.5 590.3 660.7
−Removed: Operating income 194.2 257.4 273.0 274.9
−Removed: Net income 144.7 195.9 206.1 200.7
−Removed: Basic earnings per share 0.54 0.74 0.77 0.75
−Removed: Diluted earnings per share 0.54 0.73 0.76 0.74
−Removed: Dividends paid per share—
−Removed: Common Stock and Common Stock Non-Voting 0.31 0.31 0.31 0.31
−Removed: Dividends declared per share—
−Removed: Common Stock and Common Stock Non-Voting — 0.31 0.31 0.65
−Removed: Net sales $ 1,231.5 $ 1,301.9 $ 1,329.2 $ 1,484.8
−Removed: Gross profit 466.9 508.5 539.9 630.0
−Removed: Operating income 196.9 208.1 253.5 299.2
−Removed: Net income 148.0 149.4 191.9 213.4
−Removed: Basic earnings per share 0.56 0.56 0.72 0.80
−Removed: Diluted earnings per share 0.55 0.56 0.72 0.79
−Removed: Dividends paid per share—
−Removed: Common Stock and Common Stock Non-Voting 0.28 0.29 0.28 0.29
−Removed: Dividends declared per share—
−Removed: Common Stock and Common Stock Non-Voting — 0.29 0.28 0.60
−Removed: Operating income for the first quarter of 2020 included $ 1.0 million of special charges, with an after-tax impact of $ 0.7 million and no per share impact for both basic and diluted earnings per share.
−Removed: Operating income for the second quarter of 2020 included $ 2.9 million of special charges, with an after-tax impact of $ 2.0 million and a per share impact of $ 0.01 for both basic and diluted earnings per share.
−Removed: Operating income for the third quarter of 2020 included $ 0.1 million of special charges, with an after-tax impact of $ 0.1 million and no per share impact for both basic and diluted earnings per share.
−Removed: Operating income for the fourth quarter of 2020 included $ 2.9 million of special charges, with an after-tax impact of $ 2.0 million and a per share impact of $ 0.01 for both basic and diluted earnings per share.
−Removed: Operating income for the fourth quarter of 2020 included $ 12.4 million of transaction and integration expenses, with an after-tax impact of $ 10.5 million and a per share impact of $ 0.04 for both basic and diluted earnings per share.
−Removed: Operating income for the first quarter of 2019 included $ 2.1 million of special charges, with an after-tax impact of $ 1.6 million and a per share impact of $ 0.01 for both basic and diluted earnings per share.
−Removed: Operating income for the second quarter of 2019 included $ 7.1 million of special charges, with an after-tax impact of $ 5.4 million and a per share impact of $ 0.02 for both basic and diluted earnings per share.
−Removed: Operating income for the third quarter of 2019 included $ 7.7 million of special charges, with an after-tax impact of $ 6.1 million and a per share impact of $ 0.01 for both basic and diluted earnings per share.
−Removed: Net income for the third quarter of 2019 included $ 1.5 million of non-recurring income tax benefit related to enactment of the U.S.
−Removed: Tax Act, with no per share impact for both basic and diluted earnings per share.
−Removed: Operating income for the fourth quarter of 2019 included $ 3.9 million of special charges, with an after-tax impact of $ 3.0 million and a per share impact of $ 0.02 for both basic and diluted earnings per share.
−Removed: See note 3 for details with respect to actions undertaken in connection with these special charges.
−Removed: See note 13 for details regarding the non-recurring income tax benefits related to enactment of the U.S.
−Removed: Earnings per share are computed independently for each of the quarters presented.
−Removed: Therefore, the sum of the quarters may not be equal to the full year earnings per share.
−Removed: SUBSEQUENT EVENT (UNAUDITED)
−Removed: On December 30, 2020, we purchased FONA International, LLC and certain of its affiliates (FONA), a privately held company, for a purchase price of approximately $ 710 million, net of cash acquired, subject to certain customary purchase price adjustments.
−Removed: FONA is a leading manufacturer of clean and natural flavors providing solutions for a diverse customer base across various applications for the food, beverage and nutritional markets.
−Removed: The acquisition of FONA in fiscal 2021 expands the breadth of our flavor solutions segment into attractive categories, as well as extends our technology platform and strengthens our capabilities.
−Removed: The acquisition was funded with cash and commercial paper.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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.