What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-10-06 compared with 2022-06-29 · 165 added, 119 removed, 513 unchanged (36% of the section changed)

3 unchanged sentences

(in millions except per share amounts)

Three months ended May 31, Six months ended May 31,

Three months ended August 31, Nine months ended August 31,

2022 2021 2022 2021

24 unchanged sentences

(in millions)

Three months ended May 31, Six months ended May 31,

Three months ended August 31,

Nine months ended August 31,

2022 2021 2022 2021

3 unchanged sentences

Unrealized components of pension and other postretirement plans 4.5 5.8 10.5 8.4

Currency translation adjustments, including for the three and six months ended May 31, 2022, $7.9 associated with the exit of our business in Russia ( 51.0 ) 54.2 ( 47.3 ) 99.9

Currency translation adjustments ( 114.9 ) ( 78.4 ) ( 162.2 ) 21.5

Change in derivative financial instruments ( 22.1 ) 2.5 4.7 3.1

43 unchanged sentences

(in millions)

Six months ended May 31,

Nine months ended August 31,

Operating activities

4 unchanged sentences

Gain on the sale of intangible asset ( 13.6 ) —

Gain on the sale of a business ( 49.6 ) —

Asset impairment charge 10.0 6.5

1 unchanged sentence

Income from unconsolidated operations ( 27.2 ) ( 45.8 )

Changes in operating assets and liabilities (net of businesses acquired)

Changes in operating assets and liabilities (net of businesses acquired and disposed)

Trade accounts receivable ( 43.6 ) 1.3

6 unchanged sentences

Acquisition of businesses (net of cash acquired) — ( 706.4 )

Proceeds from sale of business 95.2 —

Proceeds from sale of unconsolidated operation — 65.4

23 unchanged sentences

Non-Voting Shares Common Stock Amount Retained Earnings Accumulated Other Comprehensive (Loss) Income Non-controlling Interests Total Shareholders’ Equity

Three months ended May 31, 2022

Balance, February 28, 2022 17.8 250.2 $ 2,091.3 $ 2,922.4 $ ( 416.0 ) $ 16.5 $ 4,614.2

Three months ended August 31, 2022

Balance, May 31, 2022 17.8 250.5 $ 2,119.2 $ 2,933.6 $ ( 454.6 ) $ 16.9 $ 4,615.1

Net income — 222.9 — — 222.9

6 unchanged sentences

Equal exchange ( 0.1 ) 0.1 — — — — —

Balance, May 31, 2022 17.8 250.5 $ 2,119.2 $ 2,933.6 $ ( 454.6 ) $ 16.9 $ 4,615.1

Six months ended May 31, 2022

Balance, August 31, 2022

17.6 250.6 $ 2,130.9 $ 3,048.4 $ ( 590.0 ) $ 17.4 $ 4,606.7

Nine months ended August 31, 2022

Balance, November 30, 2021

17.8 249.5 $ 2,055.1 $ 2,782.4 $ ( 426.5 ) $ 14.5 $ 4,425.5

Net income — 496.3 — — 496.3

6 unchanged sentences

Equal exchange ( 1.0 ) 1.0 — — — — —

Balance, August 31, 2022

17.6 250.6 $ 2,130.9 $ 3,048.4 $ ( 590.0 ) $ 17.4 $ 4,606.7

Three months ended August 31, 2021

Balance, May 31, 2021 18.1 249.2 $ 2,027.1 $ 2,660.5 $ ( 362.3 ) $ 15.5 $ 4,340.8

Three months ended May 31, 2021

Balance, February 28, 2021 18.0 249.0 $ 1,998.4 $ 2,573.6 $ ( 422.5 ) $ 15.2 $ 4,164.7

Net income — 212.4 — — 212.4

6 unchanged sentences

Equal exchange ( 0.1 ) 0.1 — — — — —

Balance, May 31, 2021 18.1 249.2 $ 2,027.1 $ 2,660.5 $ ( 362.3 ) $ 15.5 $ 4,340.8

Six months ended May 31, 2021

Balance, August 31, 2021

18.0 249.3 $ 2,042.1 $ 2,780.0 $ ( 435.6 ) $ 16.6 $ 4,403.1

Nine months ended August 31, 2021

Balance, November 30, 2020

18.0 248.9 $ 1,981.3 $ 2,415.6 $ ( 470.8 ) $ 13.9 $ 3,940.0

Net income — 557.9 — — 557.9

6 unchanged sentences

Equal exchange ( 0.4 ) 0.4 — — — — —

Balance, May 31, 2021 18.1 249.2 $ 2,027.1 $ 2,660.5 $ ( 362.3 ) $ 15.5 $ 4,340.8

Balance, August 31, 2021

18.0 249.3 $ 2,042.1 $ 2,780.0 $ ( 435.6 ) $ 16.6 $ 4,403.1

See notes to condensed consolidated financial statements (unaudited).

6 unchanged sentences

In our opinion, the accompanying condensed consolidated financial statements contain all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position and the results of operations for the interim periods presented.

The results of consolidated operations for the six-month period ended May 31, 2022 are not necessarily indicative of the results to be expected for the full year.

The results of consolidated operations for the nine-month period ended August 31, 2022 are not necessarily indicative of the results to be expected for the full year.

Historically, our net sales, net income and cash flow from operations have been lower in the first half of the fiscal year and higher in the second half.

12 unchanged sentences

These optional expedients can be applied from March 2020 through December 31, 2022.

LIBOR is used as a reference rate on our variable rate debt, including our revolving credit facility, synthetic lease, interest rate swaps, and cross currency interest rate swaps.

Arrangements that were entered into during the nine months ended August 31, 2022, including our new revolving credit facility expiring in July 2023 and cross-currency interest rate swaps expiring in April 2030, no longer use LIBOR as a reference rate.

However, LIBOR continues to be the reference rate for our variable rate debt, including our revolving credit facility expiring in July 2026, interest rate swaps, and the cross-currency interest rate swaps expiring in August 2027.

The phase out of LIBOR reference rates will occur at different dates and began on January 1, 2022.

Our adoption of this new standard occurred during the three months ended February 28, 2022, in conjunction with the first phase-out of a LIBOR reference rate.

There was no material impact to our consolidated financial statements during the six months ended May 31, 2022, nor do we expect the adoption of this standard to have a material impact on our consolidated financial statements during the LIBOR transition period.

There was no material impact to our consolidated financial statements during the nine months ended August 31, 2022, nor do we expect the adoption of this standard to have a material impact on our consolidated financial statements during the LIBOR transition period.

Recently Issued Accounting Pronouncements — Pending Adoption

In September 2022, the FASB issued ASU No.

Liabilities - Supplier Finance Programs (Topic 450-50):

Disclosure of Supplier Finance Program Obligations that requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations.

The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.

The new standard’s requirements to disclose the key terms of the programs and information about obligations outstanding are effective for all interim and annual periods of our fiscal year ending November 30, 2024.

The new standard’s requirement to disclose a rollforward of obligations outstanding will be effective for our fiscal year ending November 30, 2025.

Early adoption is permitted.

We are currently evaluating the impact that this new guidance will have on our consolidated financial statements.

SPECIAL CHARGES AND TRANSACTION AND INTEGRATION EXPENSES

1 unchanged sentence

In our consolidated income statement, we include a separate line item captioned "Special charges" in arriving at our consolidated operating income.

Special charges consist of expenses, including related impairment charges, associated with certain actions undertaken to reduce fixed costs, simplify or improve processes, and improve our competitiveness and are of such significance in terms of both up-front costs and organizational/structural impact to require advance approval by our Management Committee, comprised of our senior management, including our Chairman, President and Chief Executive Officer.

Upon presentation of any such proposed action (generally including details with respect to estimated costs, which typically consist principally of employee severance and related benefits, together with ancillary costs associated with the action that may include a non-cash component, such as an asset impairment, or a component which relates to inventory adjustments that are included in cost of goods sold;

4 unchanged sentences

We continue to evaluate changes to our organizational structure to enable us to reduce fixed costs, simplify or improve processes, and improve our competitiveness.

The following is a summary of special charges recognized in the three and six months ended May 31, 2022 and 2021

The following is a summary of special charges recognized in the three and nine months ended August 31, 2022 and 2021

(in millions):

Three months ended May 31, Six months ended May 31,

Three months ended August 31, Nine months ended August 31,

2022 2021 2022 2021

5 unchanged sentences

Total $ 3.4 $ 5.8 $ 38.0 $ 20.6

During the three months ended May 31, 2022, we recorded $ 15.1 million of net special charges.

Those special charges principally consisted of $ 22.2 million associated with the exit of our consumer business in Russia, as more fully described below, $ 2.5 million associated with the transition of a manufacturing facility in Europe, Middle East, and Africa (EMEA), as more fully described below, and streamlining actions of $ 3.2 million in the Americas region, and $ 2.8 million in the EMEA region.

These charges were offset by a $ 13.6 million gain, on the sale of our Kohinoor brand discussed below as well as a reversal of $ 2.2 million of estimated costs associated with the exit of our rice product line in India upon settlement of a supply agreement related to that product line.

During the six months ended May 31, 2022, we recorded $ 34.6 million of net special charges.

During the three months ended August 31, 2022, we recorded $ 3.4 million of special charges.

Those special charges principally consisted of $ 1.0 million associated with the transition of a manufacturing facility in Europe, Middle East, and Africa (EMEA), as more fully described below, $ 0.8 million associated with the exit of our consumer business in Russia, as more fully described below, and streamlining actions of $ 0.4 million in the Americas region, and $ 1.2 million in the EMEA region.

During the nine months ended August 31, 2022, we recorded $ 38.0 million of net special charges.

Those special charges consisted principally of $ 23.0 million associated with the exit of our consumer business in Russia, as more fully described below, $ 18.4 million associated with the transition of a manufacturing facility in EMEA, as more fully described below, and streamlining actions of $ 5.7 million in the Americas region, and $ 5.5 million in the EMEA region.

1 unchanged sentence

In the second quarter of 2022, our Management Committee approved the exit of our consumer business in Russia.

As a result, we recorded $ 22.2 million of special charges.

As a result, in the second quarter of 2022 we recognized $ 22.2 million of special charges.

These special charges included a non-cash impairment charge of $ 10.0 million associated with the Kamis brand name to reduce its carrying value to its estimated fair value, $ 2.5 million of employee severance and $ 1.8 million of other related exit costs directly associated with the exit plan that we anticipated will be paid in the next twelve months, and a non-cash $ 7.9 million reclassification of the cumulative translation adjustment previously reflected in accumulated other comprehensive income (loss) to earnings associated with the exit of our business in Russia.

During the three months ended August 31, 2022, we recorded an additional $ 0.8 million of employee severance charges.

In the first quarter of 2022, our Management Committee approved an initiative to consolidate our manufacturing operations in the United Kingdom into a net-zero carbon condiments manufacturing and distribution center facility with state-of-the-art technology.

1 unchanged sentence

We expect the cost of the initiative to approximate $ 30 million—to be recognized as special charges in our consolidated income statement through 2023.

Of that $ 30 million, we expect the costs to include employee severance and related benefits, non-cash accelerated depreciation, decommissioning and other property related lease exit costs, all directly related to the initiative.

During the three months ended May 31, 2022, we recorded $ 1.3 million in accelerated depreciation and $ 1.2 million in third party expenses and other costs.

During the six months ended May 31, 2022, we recorded $ 12.5 million in severance and related benefits costs, $ 2.7 million in accelerated depreciation and $ 2.2 million in third party expenses and other costs.

related to the initiative.

During the three months ended August 31, 2022, we recorded $ 0.6 million in accelerated depreciation and $ 0.4 million in third party expenses and other costs.

During the nine months ended August 31, 2022, we recorded $ 12.5 million in severance and related benefits costs, $ 3.3 million in accelerated depreciation and $ 2.6 million in third party expenses and other costs.

We exited our Kohinoor rice product line in India in the fourth quarter of fiscal 2021.

During the three months ended May 31, 2022, we sold the Kohinoor brand name for $ 13.6 million, net of costs associated with the sale of $ 1.4 million, and reflected the gain of $ 13.6 million associated with this sale within special charges.

During the three months ended May 31, 2021, we recorded $ 13.7 million of special charges, consisting principally of a non-cash asset impairment charge of $ 6.5 million associated with an administrative site that was exited in conjunction with our decision to employ a hybrid work environment and $ 4.7 million of streamlining actions in the Americas region.

During the six months ended May 31, 2021, we recorded $ 14.8 million of special charges, consisting principally of the previously described non-cash asset impairment charge of $ 6.5 million, $ 5.2 million of streamlining actions in the Americas region, and $ 1.3 million of streamlining actions in the EMEA region.

During the nine months ended August 31, 2022, we sold the Kohinoor brand name for $ 13.6 million, net of costs associated with the sale of $ 1.4 million, and reflected the gain of $ 13.6 million associated with this sale within special charges.

During the three months ended August 31, 2021, we recorded $ 5.8 million of special charges, consisting principally of streamlining actions of $ 1.8 million in the Americas region, $ 1.7 million in the EMEA region, $ 0.8 million in the Asia Pacific (APAC) region, and $ 0.7 million associated with our GE initiative as more fully described below.

During the nine months ended August 31, 2021, we recorded $ 20.6 million of special charges, consisting principally of streamlining actions of $ 7.0 million in the Americas region, $ 3.0 million in the EMEA region, $ 0.8 million in the APAC region, and $ 0.7 million associated with our GE initiative, together with a non-cash asset impairment charge of $ 6.5 million associated with an administrative site that will be exited in conjunction with our decision to employ a hybrid work environment.

In 2017, our Management Committee approved a multi-year initiative during which we expect to execute significant changes to our global processes, capabilities and operating model to provide a scalable platform for future growth.

3 unchanged sentences

Of that $ 60 million to $ 65 million, we estimate that approximately sixty percent will be attributable to cash payments associated with the related costs of the GE implementation and transition, including outside consulting and other costs, and approximately forty percent will be attributable to severance and related benefit payments, all directly related to this initiative.

We have spent a cumulative total of $ 40.7 million on this initiative through May 31, 2022.

As of May 31, 2022, reserves associated with special charges, which are expected to be paid during the next twelve months, are included in trade accounts payable and other accrued liabilities in our consolidated balance sheet.

The following is a breakdown by business segment of special charges for the three and six months ended May 31, 2022 and 2021 (in millions):

Three months ended May 31, Six months ended May 31,

We have spent a cumulative total of $ 40.7 million on this initiative through August 31, 2022.

As of August 31, 2022, reserves associated with special charges, which are expected to be paid during the next twelve months, are included in trade accounts payable and other accrued liabilities in our consolidated balance sheet.

The following is a breakdown by business segment of special charges for the three and nine months ended August 31, 2022 and 2021 (in millions):

Three months ended August 31,

Nine months ended August 31,

2022 2021 2022 2021

3 unchanged sentences

Transaction and Integration Expenses

The following are the transaction and integration expenses recognized during the three and six months ended May 31, 2022 and 2021 relating to the acquisitions of Cholula Hot Sauce ("Cholula") and FONA International, LLC ("FONA") (in millions):

Three months ended May 31, Six months ended May 31,

The following are the transaction and integration expenses recognized during the three and nine months ended August 31, 2022 and 2021 relating to the acquisitions of Cholula Hot Sauce ("Cholula") and FONA International, LLC ("FONA") (in millions):

Three months ended August 31,

Nine months ended August 31,

2022 2021 2022 2021

4 unchanged sentences

We expect integration expenses related to our acquisition of FONA to total approximately $ 2.2 million in fiscal 2022.

FINANCIAL INSTRUMENTS

FINANCING ARRANGEMENTS AND FINANCIAL INSTRUMENTS

During the three months ended August 31, 2022, we entered into a 364-day $ 500 million revolving credit facility, which will expire in July 2023.

The current pricing for the credit facility, on a fully drawn basis, is SOFR + 1.23 %.

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 SOFR + 1.60 %.

The provisions of this revolving credit facility restrict subsidiary indebtedness and require us to maintain a minimum interest coverage ratio, consistent with our $ 1.5 billion five-year revolving credit facility.

We do not expect that this covenant would limit our access to this revolving credit facility for the foreseeable future.

Also during the three months ended August 31, 2022, we repaid our $ 750 million, 2.70 % notes due in August 2022.

We use derivative financial instruments to enhance our ability to manage risk, including foreign currency, net investment and interest rate exposures, which exist as part of our ongoing business operations.

We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instrument, and all derivatives are designated as hedges.

For the three and six months ended May 31, 2022 and 2021, hedge ineffectiveness was not material.

For the three and nine months ended August 31, 2022 and 2021, hedge ineffectiveness was not material.

We are not a party to master netting arrangements, and we do not offset the fair value of derivative contracts with the same counterparty in our financial statement disclosures.

2 unchanged sentences

We are potentially exposed to foreign currency fluctuations affecting net investments in subsidiaries, transactions (both third-party and intercompany) and earnings denominated in foreign currencies.

We assess foreign currency risk based on transactional cash flows and translational volatility and may enter into forward contract and

currency swaps with highly-rated financial institutions to reduce fluctuations in the long or short currency positions.

We assess foreign currency risk based on transactional cash flows and translational volatility and may enter into forward contract and currency swaps with highly-rated financial institutions to reduce fluctuations in the long or short currency positions.

Forward contracts are generally less than 18 months duration.

Currency swap agreements are established in conjunction with the terms of the underlying debt issues.

At May 31, 2022, we had foreign currency exchange contracts to purchase or sell $ 482.0 million of foreign currencies as compared to $ 583.6 million at November 30, 2021.

At August 31, 2022, we had foreign currency exchange contracts to purchase or sell $ 539.5 million of foreign currencies as compared to $ 583.6 million at November 30, 2021.

All of these contracts were designated as hedges of anticipated purchases denominated in a foreign currency or hedges of foreign currency denominated assets or liabilities.

Hedges of foreign currency denominated assets and liabilities include foreign currency exchange contracts with a notional value of $ 381.9 million at May 31 , 2022.

Hedges of foreign currency denominated assets and liabilities include foreign currency exchange contracts with a notional value of $ 381.1 million at August 31, 2022.

These foreign currency exchange contracts manage both exposure to currency fluctuations in certain intercompany loans between subsidiaries as well as currency exposure to third-party non-functional currency assets or liabilities.

All foreign exchange contracts outstanding at May 31, 2022 have durations of less than 18 months, including $ 140.0 million of notional contracts that have durations of less than one month and are used to hedge short-term cash flow funding .

All foreign exchange contracts outstanding at August 31, 2022 have durations of less than 18 months, including $ 151.9 million of notional contracts that have durations of less than one month and are used to hedge short-term cash flow funding .

We also utilize cross currency interest rate swap contracts that are designated as net investment hedges.

2 unchanged sentences

We finance a portion of our operations with both fixed and variable rate debt instruments, principally commercial paper, notes and bank loans.

We utilize interest rate derivative contracts, including interest rate swap agreements and treasury locks, to minimize worldwide financing costs and to achieve a desired mix of variable and fixed rate debt.

We utilize interest rate derivative contracts, including interest rate swap agreements, to minimize worldwide financing costs and to achieve a desired mix of variable and fixed rate debt.

The following table discloses the notional amount and fair values of derivative instruments on our balance sheet (in millions):

4 unchanged sentences

location Notional

As of May 31, 2022

As of August 31, 2022

Interest rate contracts Other current

18 unchanged sentences

In conjunction with the phase-out of LIBOR, during the first quarter of 2022 we amended our previously existing cross currency swaps which expire in August 2027 such that, effective February 15, 2022, we now pay and receive at GBP SONIA plus 0.859 % (previously GBP LIBOR plus 0.740 %).

During the three months ended May 31, 2022, we entered into a total of $ 200 million of treasury locks to manage our interest rate risk associated with the anticipated issuance of at least $ 200 million of fixed rate debt by August 2022.

These treasury locks have a maturity date of August 12, 2022.

The weighted average fixed rate of these agreements was 1.89 %.

We designated these treasury lock arrangements as cash flow hedges.

Amounts associated with these agreements, which currently include the related estimated fair value, are deferred in accumulated other comprehensive income.

The following tables disclose the impact of derivative instruments on our other comprehensive income (OCI), accumulated other comprehensive loss (AOCI) and our consolidated income statement for the three- and six-months ended May 31, 2022 and 2021 (in millions):

The following tables disclose the impact of derivative instruments on our other comprehensive income (OCI), accumulated other comprehensive loss (AOCI) and our consolidated income statement for the three- and nine-months ended August 31, 2022 and 2021 (in millions):

Fair Value Hedges

1 unchanged sentence

location Income (expense)

Three months ended May 31, 2022 Three months ended May 31, 2021 Six months ended May 31, 2022 Six months ended May 31, 2021

Three months ended August 31, 2022

Three months ended August 31, 2021

Nine months ended August 31, 2022 Nine months ended August 31, 2021

Interest rate contracts Interest expense $ 0.6 $ 2.1 $ 5.4 $ 6.1

1 unchanged sentence

Derivative 2022 2021 Hedged item 2022 2021

Three months ended May 31,

Three months ended August 31,

Foreign exchange contracts Other income, net $ 3.6 $ 5.6 Intercompany loans Other income, net $ ( 3.2 ) $ ( 5.4 )

Six months ended May 31,

Nine months ended August 31,

Foreign exchange contracts Other income, net $ 6.9 $ ( 0.3 ) Intercompany loans Other income, net $ ( 6.1 ) $ 1.1

The gains (losses) recognized on fair value hedges relating to currency exposure on third-party non-functional currency assets or liabilities were not material during the three- and six-months ended May 31, 2022 and 2021.

Cash Flow Hedges

4 unchanged sentences

2022 2021 2022 2021

Three months ended May 31,

Three months ended August 31,

Interest rate contracts $ 1.8 $ — Interest

expense $ 0.2 $ 0.1

expense/ Other income, net $ 18.8 $ 0.2

Foreign exchange contracts 2.8 1.5 Cost of goods sold 0.7 ( 0.3 )

Total $ 4.6 $ 1.5 $ 19.5 $ ( 0.1 )

Six months ended May 31,

Nine months ended August 31,

Interest rate contracts $ 18.7 $ 0.3 Interest

expense $ 0.3 $ 0.2

expense/ Other income, net $ 19.1 $ 0.4

Foreign exchange contracts 5.2 ( 0.9 ) Cost of goods

1 unchanged sentence

Total $ 23.9 $ ( 0.6 ) $ 19.8 $ ( 0.2 )

During the three months ended May 31, 2022, we entered into treasury lock arrangements with a notional amount totaling $ 200 million in order to manage our interest rate risk associated with the anticipated issuance of at least $ 200 million of fixed rate debt by August 2022.

These treasury locks had a maturity date of August 12, 2022 and an average fixed rate of 1.89 %.

We designated these treasury lock arrangements as cash flow hedges with any unrealized gain, prior to settlement, recognized in accumulated other comprehensive income.

During the three months ended August 31, 2022, we settled the $ 200 million notional treasury locks upon determining we would not issue fixed rate debt but rather enter into the previously described $ 500 million 364-day revolving credit facility.

The proceeds received upon settlement of these treasury lock arrangements were $ 18.7 million and were recognized in Other income, net in our Condensed consolidated income statements for the three and nine months ended August 31, 2022.

For all cash flow and settled interest rate fair value hedge derivatives, the net amount of accumulated other comprehensive loss expected to be reclassified in the next 12 months is $ 3.6 million as an increase to earnings.

5 unchanged sentences

2022 2021 2022 2021

Three months ended May 31,

Three months ended August 31,

Cross currency contracts $ 29.7 $ 8.4 Interest

expense $ 2.4 $ 0.4

Six months ended May 31,

Nine months ended August 31,

Cross currency contracts $ 51.8 $ 4.9 Interest

10 unchanged sentences

Unobservable inputs that reflect the reporting entity’s own assumptions.

At May 31, 2022 and November 30, 2021, we had no financial assets or liabilities that were subject to a level 3 fair value measurement.

At August 31, 2022 and November 30, 2021, we had no financial assets or liabilities that were subject to a level 3 fair value measurement.

Our population of financial assets and liabilities subject to fair value measurements on a recurring basis are as follows (in millions):

August 31, 2022

Fair Value Level 1 Level 2

2 unchanged sentences

Bonds and other long-term investments 6.8 6.8 —

Interest rate derivatives 16.9 — 16.9

Foreign currency derivatives 14.9 — 14.9

17 unchanged sentences

Total $ 10.8 $ — $ 10.8

At May 31, 2022 and November 30, 2021, the carrying amounts 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.

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.

At August 31, 2022 and November 30, 2021, the carrying amounts of interest rate derivatives, foreign currency derivatives, cross currency contracts, insurance contracts, and bond and other long-term investments were equal to their respective fair values.

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.

Investments in affiliates are not readily marketable, and it is not practicable to estimate their fair value.

5 unchanged sentences

The following table sets forth the carrying amounts and fair values of our long-term debt including the current portion thereof (in millions):

May 31, 2022 November 30, 2021

August 31, 2022 November 30, 2021

Carrying amount $ 3,925.4 $ 4,743.6

13 unchanged sentences

Although our defined benefit plans in the U.S., United Kingdom and Canada have generally 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.

The following table presents the components of our pension (income) and other postretirement benefits expense for the three months ended May 31, 2022 and 2021 (in millions):

The following table presents the components of our pension (income) and other postretirement benefits expense for the three months ended August 31, 2022 and 2021 (in millions):

United States pension International pension Other postretirement benefits

7 unchanged sentences

Total (income) expense $ ( 0.9 ) $ — $ ( 0.7 ) $ ( 0.6 ) $ 0.7 $ 0.8

The following table presents the components of our pension (income) and other postretirement benefits expense for the six months ended May 31, 2022 and 2021 (in millions):

The following table presents the components of our pension (income) and other postretirement benefits expense for the nine months ended August 31, 2022 and 2021 (in millions):

United States pension International pension Other postretirement benefits

7 unchanged sentences

Total (income) expense $ ( 2.8 ) $ — $ ( 2.2 ) $ ( 2.0 ) $ 2.1 $ 2.4

During the six months ended May 31, 2022 and 2021, we contributed $ 4.1 million and $ 5.2 million, respectively, to our pension plans.

During the nine months ended August 31, 2022 and 2021, we contributed $ 9.9 million and $ 7.5 million, respectively, to our pension plans.

Total contributions to our pension plans in fiscal year 2021 were $ 15.0 million.

All of the amounts in the tables above for pension (income) and other postretirement benefits expense, other than service cost, were included in other income, net within our consolidated income statements.

The net aggregate amount of pension and other postretirement benefits (income), excluding service cost components, was $( 2.6 ) million and $( 1.4 ) million for the three months ended May 31, 2022 and 2021, respectively.

For the six months ended May 31, 2022 and 2021, the net aggregate amount of pension and other postretirement benefits income was $( 5.1 ) million and $( 3.2 ) million, respectively.

The net aggregate amount of pension and other postretirement benefits (income), excluding service cost components, was $( 2.4 ) million and $( 1.5 ) million for the three months ended August 31, 2022 and 2021, respectively.

For the nine months ended August 31, 2022 and 2021, the net aggregate amount of pension and other postretirement benefits income was $( 7.5 ) million and $( 4.7 ) million, respectively.

STOCK-BASED COMPENSATION

2 unchanged sentences

The following table sets forth the stock-based compensation expense recorded in selling, general and administrative ("SG&A") expense (in millions):

Three months ended May 31, Six months ended May 31,

Three months ended August 31, Nine months ended August 31,

2022 2021 2022 2021

8 unchanged sentences

Expected lives (in years) 7.6 7.9

The following is a summary of our stock option activity for the six months ended May 31, 2022 and 2021:

The following is a summary of our stock option activity for the nine months ended August 31, 2022 and 2021:

(shares in millions) Number

6 unchanged sentences

Exercisable at end of the period 3.5 $ 57.97 3.7 $ 51.19

As of May 31, 2022, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 130.3 million and for options currently exercisable was $ 124.3 million.

The total intrinsic value of all options exercised during the six months ended May 31, 2022 and 2021 was $ 38.2 million and $ 4.9 million, respectively.

The following is a summary of our RSU activity for the six months ended May 31, 2022 and 2021:

As of August 31, 2022, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 95.9 million and for options currently exercisable was $ 93.4 million.

The total intrinsic value of all options exercised during the nine months ended August 31, 2022 and 2021 was $ 40.2 million and $ 7.3 million, respectively.

The following is a summary of our RSU activity for the nine months ended August 31, 2022 and 2021:

(shares in thousands) Number

7 unchanged sentences

Outstanding at end of period 490 $ 77.86 621 $ 69.75

The following is a summary of our price-vested stock options activity for the six months ended May 31, 2022 and 2021:

The following is a summary of our price-vested stock options activity for the nine months ended August 31, 2022 and 2021:

(shares in thousands) Number

6 unchanged sentences

Outstanding at end of period 2,131 $ 9.40 2,252 $ 9.40

The following is a summary of our LTPP activity for the six months ended May 31, 2022 and 2021:

The following is a summary of our LTPP activity for the nine months ended August 31, 2022 and 2021:

(shares in thousands) Number

7 unchanged sentences

Outstanding at end of period 393 $ 93.40 376 $ 86.73

Income tax expense for the three months ended May 31, 2022 included $ 9.0 million of net discrete tax benefits consisting principally of the following:

(i) $ 1.1 million of excess tax benefits associated with stock-based compensation, (ii) $ 4.1 million of net tax benefits associated with the adjustment of valuation allowances due to changes in judgment about the realizability of deferred tax assets, (iii) $ 1.3 million of tax benefits from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations in a non-U.S.

jurisdiction, and (iv) $ 2.3 million of tax benefits related to the sale of an asset associated with a previously exited line of business.

Income tax expense for the six months ended May 31, 2022 included $ 19.3 million of net discrete tax benefits consisting principally of the following:

(i) $ 8.7 million of excess tax benefits associated with stock-based compensation, (ii) $ 4.1 million of net tax benefits associated with an adjustment of valuation allowances due to changes in judgment about the realizability of deferred tax assets, (iii) $ 2.5 million of tax benefits related to the revaluation of deferred taxes resulting from enacted legislation, (iv) $ 2.3 million of tax benefits related to the sale of an asset associated with a previously exited line of business, and (v) $ 1.5 million from the resolution of tax uncertainties in non-U.S.

jurisdictions, including the reversal of certain reserves

for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations in certain non-US jurisdictions.

Income tax expense for the three months ended May 31, 2021 included $ 5.3 million of net discrete tax benefits consisting principally of the following:

(i) $ 3.7 million of tax benefits from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of a statute of limitations in a non-U.S.

jurisdiction and (ii) $ 1.5 million of excess tax benefits associated with share-based compensation.

Income tax expense for the six months ended May 31, 2021 was not impacted, on a net basis, by discrete tax items as discrete tax benefits and discrete tax expenses offset during the period.

Discrete tax items recognized during the six months ended May 31, 2021 consisted principally of the following:

(i) $ 11.4 million of deferred state tax expense directly related to our December 2020 acquisition of FONA, (ii) $ 4.9 million of tax benefits from the resolution of tax uncertainties in non-U.S.

jurisdictions, including the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations, (iii) $ 4.5 million of tax benefits associated with the release of a valuation allowance due to a change in judgment about realizability of deferred tax assets, and (iv) $ 1.9 million of excess tax benefits associated with share-based compensation.

Other than the discrete tax benefits previously mentioned and additions for current year tax positions, there were no significant changes to unrecognized tax benefits during the six months ended May 31, 2022.

As of May 31, 2022, we believe the reasonably possible total amount of unrecognized tax benefits that could increase or decrease in the next 12 months as a result of various statute expirations, audit closures, and/or tax settlements would not be material to our consolidated financial statements.

Income tax expense for the three months ended August 31, 2022 included $ 3.8 million of net discrete tax expense consisting principally of the following:

(i) $ 11.6 million of tax expense related to the sale of a business, (ii) $ 1.4 million of net tax benefits related to the revaluation of deferred taxes resulting from enacted legislation, (iii) $ 4.7 million of tax benefits from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations and (iv) $ 1.3 million of tax benefits resulting from an adjustment to a prior year tax accrual based on the final return filed.

Income tax expense for the nine months ended August 31, 2022 included $ 15.5 million of net discrete tax benefits consisting principally of the following:

(i) $ 9.0 million of excess tax benefits associated with stock-based compensation, (ii) $ 4.1 million of net tax benefits associated with an adjustment of valuation allowances due to changes in judgment about the realizability of deferred tax assets, (iii) $ 3.9 million of tax benefits related to the revaluation of deferred taxes resulting from enacted legislation, (iv) $ 2.3 million of tax benefits related to the sale of an asset associated with a previously exited line of business, (v) $ 6.2 million of tax benefits from the resolution of tax uncertainties, including the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations, (vi) $ 1.3 million of tax

benefits resulting from an adjustment to a prior year tax accrual based on the final return filed, and (vii) $ 11.6 million of tax expense related to the sale of a business.

Income tax expense for the three months ended August 31, 2021 included $ 22.9 million of net discrete tax benefits consisting principally of the following:

(i) $ 13.3 million of tax benefits due to the partial release of certain reserves for an unrecognized tax benefit and related interest in a non-U.S.

jurisdiction based on a change in our assessment of the technical merits of that position associated with the availability of new information, (ii) $ 4.3 million of tax benefits from the resolution of other tax uncertainties, including the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations, (iii) $ 2.4 million of tax benefits related to the revaluation of deferred taxes resulting from enacted legislation, (iv) $ 1.1 million of tax benefits resulting from an adjustment to a prior year tax accrual based on the final return filed, and (v) $ 1.0 million of tax benefits resulting from a refinement of deferred state taxes directly related to our December 2020 acquisition of FONA.

Income tax expense for the nine months ended August 31, 2021 included $ 22.9 million of net discrete tax benefits consisting primarily of the following:

(i) $ 13.3 million of tax benefits due to the partial release of certain reserves for an unrecognized tax benefit and related interest in a non-U.S.

jurisdiction based on a change in our assessment of the technical merits of that position associated with the availability of new information, (ii) $ 9.2 million of tax benefits from the resolution of other tax uncertainties, including the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations, (iii) $ 10.4 million of deferred state tax expense directly related to our December 2020 acquisition of FONA, (iv) $ 4.5 million of tax benefits associated with the release of a valuation allowance due to a change in judgment about realizability of deferred tax assets, (v) $ 2.2 million of excess tax benefits associated with share-based compensation, (vi) $ 2.5 million of tax benefits related to the revaluation of deferred taxes resulting from enacted legislation, and (vii) $ 1.1 million of tax benefits resulting from an adjustment to a prior year tax accrual based on the final return filed.

As of August 31, 2022, we believe the reasonably possible total amount of unrecognized tax benefits that could increase or decrease in the next 12 months as a result of various statute expirations, audit closures, and/or tax settlements would not be material to our consolidated financial statements.

CAPITAL STOCK AND EARNINGS PER SHARE

The following table sets forth the reconciliation of average shares outstanding (in millions):

Three months ended May 31, Six months ended May 31,

Three months ended August 31, Nine months ended August 31,

2022 2021 2022 2021

4 unchanged sentences

The following table sets forth the stock options and RSUs that were not considered in our earnings per share calculation since they were anti-dilutive (in millions):

Three months ended May 31, Six months ended May 31,

Three months ended August 31, Nine months ended August 31,

2022 2021 2022 2021

1 unchanged sentence

The following table sets forth common stock activity (in millions):

Three months ended May 31, Six months ended May 31,

Three months ended August 31, Nine months ended August 31,

2022 2021 2022 2021

1 unchanged sentence

Shares repurchased under the stock repurchase program and shares withheld for taxes under stock options, RSUs, and LTPP 0.2 0.1 0.5 0.2

As of May 31, 2022, $ 563.1 million remained of the $ 600 million share repurchase program authorization approved by our Board of Directors in November 2019.

As of August 31, 2022, $ 549.9 million remained of the $ 600 million share repurchase program authorization approved by our Board of Directors in November 2019.

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table sets forth the components of accumulated other comprehensive loss, net of tax, where applicable (in millions):

May 31, 2022 November 30, 2021

August 31, 2022 November 30, 2021

Foreign currency translation adjustment (1)

1 unchanged sentence

Unrealized gain on foreign currency exchange contracts 5.0 0.6

Fair value of treasury locks 12.9 —

Unamortized value of settled interest rate swaps ( 0.5 ) ( 0.2 )

1 unchanged sentence

Accumulated other comprehensive loss $ ( 590.0 ) $ ( 426.5 )

(1) During the six months ended May 31, 2022, the foreign currency translation adjustment of accumulated other comprehensive loss increased on a net basis by $ 53.7 million, net of a $ 22.1 million increase associated with net investment hedges.

(1) During the nine months ended August 31, 2022, the foreign currency translation adjustment of accumulated other comprehensive loss increased on a net basis by $ 176.4 million, net of $ 51.8 million of unrealized gains associated with net investment hedges.

These net investment hedges are more fully described in note 3.

The following table sets forth the amounts reclassified from accumulated other comprehensive income (loss) and into consolidated net income (in millions):

Three months ended Six months ended Affected Line Items in the Condensed Consolidated Income Statement

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Three months ended Nine months ended Affected Line Items in the Condensed Consolidated Income Statement

August 31, 2022 August 31, 2021 August 31, 2022 August 31, 2021

(Gains)/losses on cash flow hedges:

Interest rate derivatives $ ( 0.1 ) $ ( 0.2 ) $ ( 0.4 ) $ ( 0.4 ) Interest expense

Treasury lock contracts (1)

( 18.7 ) — ( 18.7 ) — Other income, net

Foreign exchange contracts ( 0.7 ) 0.3 ( 0.7 ) 0.6 Cost of goods sold

10 unchanged sentences

Net, after tax $ 2.2 $ 2.8 $ 6.0 $ 8.2

(1) The settlement of these treasury locks is further described in note 3.

(2) This accumulated other comprehensive income (loss) component is included in the computation of total pension (income) and other postretirement benefits expense (refer to note 5 for additional details).

18 unchanged sentences

(in millions)

Three months ended May 31, 2022

Three months ended August 31, 2022

Net sales $ 927.9 $ 667.7 $ 1,595.6

1 unchanged sentence

Income from unconsolidated operations 6.6 0.9 7.5

Three months ended May 31, 2021

Three months ended August 31, 2021

Net sales $ 921.9 $ 627.5 $ 1,549.4

1 unchanged sentence

Income from unconsolidated operations 6.7 2.4 9.1

Six months ended May 31, 2022

Nine months ended August 31, 2022

Net sales $ 2,720.1 $ 1,934.7 $ 4,654.8

1 unchanged sentence

Income from unconsolidated operations 23.4 3.8 27.2

Six months ended May 31, 2021

Nine months ended August 31, 2021

Net sales $ 2,813.9 $ 1,773.7 $ 4,587.6

3 unchanged sentences

Consumer Flavor Solutions Total

Three months ended May 31, 2022

Three months ended August 31, 2022

Operating income excluding special charges and transaction and integration expenses $ 183.7 $ 54.9 $ 238.6

Special charges 1.8 1.6 3.4

Transaction and integration expenses — 1.5 1.5

Operating income $ 181.9 $ 53.3 $ 235.2

Three months ended May 31, 2021

Three months ended August 31, 2021

Operating income excluding special charges and transaction and integration expenses $ 187.8 $ 84.5 $ 272.3

2 unchanged sentences

Operating income $ 184.1 $ 81.1 $ 265.2

Six months ended May 31, 2022

Nine months ended August 31, 2022

Operating income excluding special charges and transaction and integration expenses $ 475.5 $ 164.0 $ 639.5

2 unchanged sentences

Operating income $ 459.4 $ 139.9 $ 599.3

Six months ended May 31, 2021

Nine months ended August 31, 2021

Operating income excluding special charges and transaction and integration expenses $ 554.5 $ 238.3 $ 792.8

3 unchanged sentences

Operating income $ 529.9 $ 209.0 $ 738.9

The following table sets forth our net sales, by geographic area, for the three and six months ended May 31, 2022 and 2021 (in millions):

The following table sets forth our net sales, by geographic area, for the three and nine months ended August 31, 2022 and 2021 (in millions):

Americas EMEA Asia/Pacific Total

Three months ended May 31, 2022 $ 1,102.6 $ 287.8 $ 146.4 $ 1,536.8

Three months ended May 31, 2021 1,081.4 304.9 170.4 1,556.7

Six months ended May 31, 2022 2,125.0 578.3 355.9 3,059.2

Six months ended May 31, 2021 2,046.2 607.3 384.7 3,038.2

Three months ended August 31, 2022

$ 1,141.7 $ 262.9 $ 191.0 $ 1,595.6

Three months ended August 31, 2021

1,084.5 283.4 181.5 1,549.4

Nine months ended August 31, 2022

3,266.8 841.2 546.8 4,654.8

Nine months ended August 31, 2021

3,130.7 890.7 566.2 4,587.6

OTHER INCOME, NET

The following is a summary of Other income, net (in millions):

Three months ended August 31,

Nine months ended August 31,

2022 2021 2022 2021

Gain on sale of business $ 49.6 $ — $ 49.6 $ —

Gain on settlement of treasury locks (1)

18.7 — 18.7 —

Pension and other postretirement benefit income 2.4 1.5 7.5 4.7

Interest income 4.8 2.4 11.7 6.5

Other 1.9 ( 0.4 ) 2.4 0.8

Total other income, net $ 77.4 $ 3.5 $ 89.9 $ 12.0

(1) The gain on the settlement of these treasury locks is further described in note 3.

On August 3, 2022, we sold the Kitchen Basics business for $ 95.2 million in cash, net of transaction expenses of $ 3.8 million.

Assets disposed of principally included inventory, intangible assets ($ 6.3 million) and goodwill ($ 21.5 million).

The sale of Kitchen Basics resulted in a pre-tax gain of $ 49.6 million.

SALE OF UNCONSOLIDATED OPERATIONS

5 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements