What changed in this filing

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Item 1. Financial Statements

2023-03-28 compared with 2022-10-06 · 113 added, 288 removed, 390 unchanged (51% of the section changed)

3 unchanged sentences

(in millions except per share amounts)

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

2022 2021 2022 2021

Three months ended February 28,

Net sales $ 1,565.5 $ 1,522.4

11 unchanged sentences

Income from unconsolidated operations

7.5 9.1 27.2 45.8

Net income $ 139.1 $ 154.9

4 unchanged sentences

Cash dividends paid per share – voting and non-voting $ 0.39 $ 0.37

Cash dividends declared per share – voting and non-voting $ 0.37 $ 0.34 $ 0.74 $ 0.68

See notes to condensed consolidated financial statements (unaudited).

2 unchanged sentences

(in millions)

Three months ended August 31,

Nine months ended August 31,

2022 2021 2022 2021

Three months ended February 28,

Net income $ 139.1 $ 154.9

4 unchanged sentences

Change in derivative financial instruments ( 5.4 ) 5.1

Deferred taxes ( 3.9 ) ( 2.8 ) ( 18.8 ) 1.4

Total other comprehensive income (loss) ( 136.4 ) ( 72.9 ) ( 165.8 ) 34.4

Tax benefit (expense) 1.0 ( 1.0 )

Total other comprehensive income 41.6 10.0

Comprehensive income $ 181.5 $ 167.4

40 unchanged sentences

(in millions)

Nine months ended August 31,

Three months ended February 28,

Operating activities

3 unchanged sentences

Stock-based compensation 11.8 11.1

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

Amortization of inventory fair value adjustments associated with acquisitions — 6.3

Income from unconsolidated operations ( 14.0 ) ( 9.3 )

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

Changes in operating assets and liabilities

Trade accounts receivable 9.7 33.2

5 unchanged sentences

Investing activities

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

Proceeds from sale of business 95.2 —

Proceeds from sale of unconsolidated operation — 65.4

Proceeds from sale of intangible asset 13.6 —

Capital expenditures (including software) ( 61.5 ) ( 43.7 )

Other investing activities 2.5 0.3

Net cash flow used in investing activities ( 61.5 ) ( 43.7 )

1 unchanged sentence

Short-term borrowings, net 67.9 97.3

Long-term debt borrowings — 1,001.5

Payment of debt issuance costs — ( 1.9 )

Long-term debt repayments ( 3.6 ) ( 3.5 )

5 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 25.6 8.1

Decrease in cash and cash equivalents ( 7.8 ) ( 111.0 )

Increase (decrease) in cash and cash equivalents 22.8 ( 13.3 )

Cash and cash equivalents at beginning of period 334.0 351.7

6 unchanged sentences

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

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

Net income attributable to non-controlling interest — — — 1.5 1.5

Other comprehensive loss, net of tax — — ( 135.4 ) ( 1.0 ) ( 136.4 )

Dividends — ( 99.2 ) — — ( 99.2 )

Stock-based compensation 12.2 — — — 12.2

Shares purchased and retired ( 0.2 ) — ( 4.8 ) ( 8.9 ) — — ( 13.7 )

Shares issued 0.1 — 4.3 — — — 4.3

Equal exchange ( 0.1 ) 0.1 — — — — —

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

Three months ended February 28, 2023

Balance, November 30, 2022

2 unchanged sentences

Net income attributable to non-controlling interest — — — 0.8 0.8

Other comprehensive loss, net of tax — — ( 163.5 ) ( 2.3 ) ( 165.8 )

Dividends — ( 198.4 ) — — ( 198.4 )

Stock-based compensation 49.1 — — — 49.1

Shares purchased and retired ( 0.5 ) — ( 14.9 ) ( 31.9 ) — — ( 46.8 )

Shares issued 1.3 0.1 41.6 — — — 41.6

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

Net income — 212.4 — — 212.4

Net income attributable to non-controlling interest — — — 0.7 0.7

Other comprehensive income (loss), net of tax — — 43.5 ( 1.9 ) 41.6

Dividends — ( 90.9 ) — — ( 90.9 )

Stock-based compensation 11.8 — — — 11.8

2 unchanged sentences

Equal exchange ( 0.2 ) 0.2 — — — — —

Balance, August 31, 2021

Balance, February 28, 2023

17.4 250.8 $ 2,152.1 $ 3,155.1 $ ( 437.1 ) $ 17.6 $ 4,887.7

Nine months ended August 31, 2021

Three months ended February 28, 2022

Balance, November 30, 2021

3 unchanged sentences

Other comprehensive income (loss), net of tax — — 10.5 ( 0.5 ) 10.0

Dividends — ( 181.7 ) — — ( 181.7 )

Stock-based compensation 11.1 — — — 11.1

2 unchanged sentences

Equal exchange ( 0.7 ) 0.7 — — — — —

Balance, August 31, 2021

Balance, February 28, 2022

17.8 250.2 $ 2,091.3 $ 2,922.4 $ ( 416.0 ) $ 16.5 $ 4,614.2

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

The results of consolidated operations for the three-month period ended February 28, 2023 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.

1 unchanged sentence

For further information, refer to the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended November 30, 2022.

Accounting Pronouncements Adopted in 2022

In December 2019, the FASB issued ASU No.

2019-12 Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

The new guidance removes certain exceptions to the general principles for income taxes and also improves consistent application of accounting by clarifying or amending existing guidance.

The new standard was adopted effective December 1, 2021.

There was no material impact to our consolidated financial statements.

In March 2020, the FASB issued ASU No.

Accounting Pronouncements Recently Adopted

In 2022, we adopted the FASB issued ASU No.

2022-06 Reference Rate Reform (Topic 848):

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 relationships, 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.

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 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.

Deferral of the Sunset Date of Topic 848 which deferred the sunset date of Topic 848 which provides optional expedients for a limited time for accounting for transactions affected by the London Interbank Offered Rate (LIBOR) being discontinued.

Arrangements that were entered into in 2022, including our 364-day revolving credit facility expiring in July 2023, fixed to variable interest rate swaps expiring in April 2030, and cross-currency interest rate swaps expiring in April 2030, do not use LIBOR as a reference rate.

During the first quarter of 2023 we amended our interest rate swaps expiring in November 2025 and August 2027, and the cross currency and interest rate swaps expiring in August 2027 to no longer use LIBOR.

Also, in March 2023 we amended our five-year revolving credit facility expiring in July 2026 to no longer use LIBOR.

Our adoption of this standard commenced during 2022, in conjunction with the first phase-out of a LIBOR reference rate.

There was no material impact to our consolidated financial statements, 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

1 unchanged sentence

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.

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

Early adoption is permitted.

4 unchanged sentences

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 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;

impacted employees or operations;

expected timing;

and expected savings) to the Management Committee and the Committee’s advance approval, expenses associated with the approved action are classified as special charges upon recognition and monitored on an on-going basis through completion.

Expenses associated with any approved action are classified as special charges upon recognition and monitored on an on-going basis

through completion.

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.

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 nine months ended August 31, 2022 and 2021

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

The following is a summary of special charges recognized in the three months ended February 28, 2023 and 2022

(in millions):

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

2022 2021 2022 2021

Three months ended February 28,

Employee severance and related benefits $ 24.8 $ 14.2

Cash 0.9 3.0 6.9 6.5

Non-Cash 0.8 1.4

Total special charges $ 27.8 $ 19.5

Gain on sale of exited brand — — ( 13.6 ) —

Total $ 3.4 $ 5.8 $ 38.0 $ 20.6

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.

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.

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

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.

During the three months ended February 28, 2023, we recorded $ 27.8 million of special charges, consisting principally of $ 24.8 million associated with our Global Operating Effectiveness (GOE) program, as more fully described below, $ 0.9 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 $ 1.3 million in the Americas region, and $ 0.8 million in the EMEA region.

During the three months ended February 28, 2022, we recorded $ 19.5 million of special charges, consisting principally of $ 14.9 million associated with the transition of a manufacturing facility in EMEA, as more fully described below, streamlining actions of $ 2.1 million in the Americas region, and $ 1.5 million in the EMEA region.

In 2022, our Management Committee approved the GOE program.

The GOE program included a voluntary retirement plan, which included enhanced separation benefits to certain U.S.

employees aged 55 years or older with at least ten years of service to the company.

This voluntary retirement plan commenced in November 2022 and participants were required to submit their notifications by December 30, 2022.

As of November 30, 2022, we had accrued special charges of $ 5.6 million, consisting of employee severance and related benefits.

Upon all eligible employees submitting their notifications by the end of December 2022, we accrued an additional $ 19.7 million during the first quarter of 2023.

All related payments will be made in fiscal year 2023 as all of the affected employees will leave the company in 2023.

Other special charges recognized during the three months ended February 28, 2023, under our GOE program included $ 4.5 million in severance and related benefits costs and $ 0.6 million of third party expenses and other costs.

In 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.

We expect to execute these changes to our supply chain operations and improve profitability, from a combination of lower headcount and non-headcount costs, by consolidating our operations into a scalable platform while expanding our capacity.

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 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 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.

We expect this initiative to enable us to accelerate our ability to work globally and cross-functionally by aligning and simplifying processes throughout McCormick, in part building upon our current shared services foundation and expanding the end-to-end processes presently under that foundation.

We expect this initiative, which we refer to as Global Enablement ("GE"), to enable this scalable platform for future growth while reducing costs, enabling faster decision making, increasing agility and creating capacity within our organization.

While we are continuing to fully develop the details of our GE operating model, we expect the cost of the GE initiative — to be recognized as special charges in our consolidated income statement over its expected multi-year course — to range from approximately $ 60 million to $ 65 million.

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 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

We expect the cost of the initiative to approximate $ 40 million—to be recognized as special charges in our consolidated income statement during 2022 and 2023.

Of that $ 40 million, we expect the costs to include employee severance and related benefits, non-cash accelerated depreciation, equipment relocation costs, decommissioning and other property related lease exit costs, all directly related to the initiative.

During the three months ended February 28, 2023, we recorded $ 0.4 million in accelerated depreciation and $ 0.5 million in third party expenses and other costs.

During the three months ended February 28, 2022, we recorded $ 12.5 million in severance and related benefits costs, $ 1.4 million in accelerated depreciation and $ 1.0 million in third party expenses and other costs.

In total, $ 21.5 million of special charges related to this initiative were recognized in 2022.

As of February 28, 2023, reserves associated with special charges of $ 33.0 million, are included in other accrued liabilities in our consolidated balance sheet.

The following is a breakdown by business segment of special charges for the three months ended February 28, 2023 and 2022 (in millions):

Three months ended February 28,

Consumer segment $ 19.0 $ 3.6

1 unchanged sentence

Total special charges $ 27.8 $ 19.5

Transaction and Integration Expenses

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

Transaction-related expenses included in cost of goods sold $ — $ — $ — $ 6.3

Other transaction expenses — — — 13.8

Integration Expenses

Total transaction and integration expenses $ — $ 1.3 $ 2.2 $ 33.3

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

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.

Integration expenses recognized during the three months ended February 28, 2022 were $ 0.7 million relating to the acquisition of FONA International, LLC (FONA).

FINANCIAL INSTRUMENTS

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 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.

5 unchanged sentences

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

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.

At February 28, 2023, we had foreign currency exchange contracts to purchase or sell $ 509.6 million of foreign currencies as compared to $ 560.5 million at November 30, 2022.

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 $ 381.1 million at August 31, 2022.

Hedge ineffectiveness was not material.

All foreign currency exchange contracts outstanding at February 28, 2023 have durations of less than 18 months, including $ 146.8 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.

dollars by operating units outside the U.S.) are considered cash flow hedges.

The gains and losses on these contracts are deferred in accumulated other comprehensive income until the hedged item is recognized in cost of goods sold, at which time the net amount deferred in accumulated other comprehensive income is also recognized in cost of goods sold.

Hedges of foreign currency denominated assets and liabilities include foreign currency exchange contracts with a notional value of $ 362.5 million at February 28, 2023.

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 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 .

Gains and losses from contracts that are designated as hedges of assets, liabilities or firm commitments are recognized through income, offsetting the change in fair value of the hedged item.

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

9 unchanged sentences

location Notional

As of August 31, 2022

As of February 28, 2023

Interest rate contracts Other current

14 unchanged sentences

Total $ 55.5 $ 52.2

In the first quarter of 2022, we entered into $ 250 million notional value interest rate swap contracts where we receive interest at 2.50 % and pay a variable rate of interest based on USD SOFR plus 0.684 %, which expire in April 2030, and are designated as fair value hedges of the changes in fair value of $ 250 million of the $ 500 million 2.50 % term notes due in 2030.

The fair value of these interest rate swap contracts is offset by a corresponding increase or decrease in the value of the hedged debt.

Also during the first quarter of 2022, we entered into cross currency interest rate swap contracts of (i) $ 250 million notional value to receive $ 250 million at USD SOFR plus 0.684 % and pay £ 184.1 million at GBP SONIA plus 0.5740 % and (ii) £ 184.1 million notional value to receive £ 184.1 million at GBP SONIA plus 0.574 % and pay € 219.2 million at Euro ESTR plus 0.667 %, both of which expire in April 2030.

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 %).

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):

In conjunction with the phase-out of LIBOR, during the first quarter of 2023 we amended our previously existing cross currency swaps which expire in August 2027 such that, effective February 15, 2023, we now pay and receive at USD Secured Overnight Financing Rate (SOFR) plus 0.907 % (previously three-month U.S.

LIBOR plus 0.685 %).

In conjunction with the phase-out of LIBOR, during the first quarter of 2023, we amended our $ 100 million interest rate swaps which expire in November 2025 and our $ 250 million interest rate swaps that expire in August 2027, such that, effective February 15, 2023 we now pay and receive at USD SOFR plus 1.487 % (previously U.S.

three-month LIBOR plus 1.22 %) and USD SOFR plus 0.907 % (previously U.S.

three-month LIBOR plus 0.685 %), respectively.

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-months ended February 28, 2023 and 2022 (in millions):

Fair Value Hedges

Three months ended February 28,

Derivative Income statement

location Income (expense)

Three months ended August 31, 2022

Three months ended August 31, 2021

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

location (Expense) income

Interest rate contracts Interest expense $ ( 3.7 ) $ 2.2

1 unchanged sentence

Derivative 2023 2022 Hedged item 2023 2022

Three months ended August 31,

Foreign exchange contracts Other income, net $ 1.0 $ ( 0.4 ) Intercompany loans Other income, net $ ( 0.1 ) $ 0.4

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 nine months ended August 31, 2022 and 2021.

Cash Flow Hedges

4 unchanged sentences

2023 2022 2023 2022

Three months ended August 31,

Three months ended February 28,

Interest rate contracts $ — $ — Interest

expense/ Other income, net $ 18.8 $ 0.2

expense $ 0.1 $ 0.1

Foreign exchange contracts ( 1.1 ) 2.9 Cost of goods sold 1.2 ( 0.2 )

Total $ ( 1.1 ) $ 2.9 $ 1.3 $ ( 0.1 )

Nine months ended August 31,

Interest rate contracts $ 18.7 $ 0.3 Interest

expense/ Other income, net $ 19.1 $ 0.4

Foreign exchange contracts 5.2 ( 0.9 ) Cost of goods

sold 0.7 ( 0.6 )

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 $ 1.1 million as an increase to earnings.

5 unchanged sentences

2023 2022 2023 2022

Three months ended August 31,

Cross currency contracts $ 29.7 $ 8.4 Interest

expense $ 2.4 $ 0.4

Nine months ended August 31,

Three months ended February 28,

Cross currency contracts $ ( 5.8 ) $ 0.7 Interest

10 unchanged sentences

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

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.

At February 28, 2023 and November 30, 2022, 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

February 28, 2023

Fair Value Level 1 Level 2

14 unchanged sentences

Bonds and other long-term investments 5.1 5.1 —

Interest rate derivatives 23.1 — 23.1

Foreign currency derivatives 11.0 — 11.0

2 unchanged sentences

Foreign currency derivatives $ 1.5 $ — $ 1.5

Interest rate derivatives 42.4 — 42.4

Cross currency contracts 8.3 — 8.3

Total $ 52.2 $ — $ 52.2

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.

At February 28, 2023 and November 30, 2022, 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.

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

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Carrying amount $ 3,901.0 $ 3,912.9

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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 August 31, 2022 and 2021 (in millions):

United States pension International pension Other postretirement benefits

2022 2021 2022 2021 2022 2021

Service cost $ 0.9 $ 0.9 $ 0.2 $ 0.3 $ 0.4 $ 0.5

Interest costs 6.5 6.5 1.7 1.8 0.4 0.4

Expected return on plan assets ( 10.7 ) ( 10.3 ) ( 3.1 ) ( 3.5 ) — —

Amortization of prior service costs 0.2 0.2 — — — ( 0.1 )

Amortization of net actuarial losses 2.2 2.7 0.3 0.6 ( 0.1 ) —

Settlement loss — — 0.2 0.2 — —

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 nine months ended August 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 February 28, 2023 and 2022 (in millions):

United States pension International pension Other postretirement benefits

4 unchanged sentences

Amortization of prior service costs 0.1 0.1 — — ( 0.1 ) ( 0.1 )

Amortization of net actuarial losses 6.5 8.2 1.0 1.7 ( 0.2 ) —

Settlement loss — — 0.2 0.6 — —

Amortization of net actuarial losses (gains) 0.1 2.2 — 0.4 ( 0.5 ) —

Total (income) expense $ ( 0.9 ) $ ( 0.9 ) $ ( 1.0 ) $ ( 0.8 ) $ 0.3 $ 0.7

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

During the three months ended February 28, 2023 and 2022, we contributed $ 1.9 million and $ 2.0 million, respectively, to our pension plans.

Total contributions to our pension plans in fiscal year 2022 were $ 11.4 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 $( 2.4 ) 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.

The net aggregate amount of pension and other postretirement benefits (income), excluding service cost components, was $( 2.6 ) million and $( 2.5 ) million for the three months ended February 28, 2023 and 2022, respectively.

STOCK-BASED COMPENSATION

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

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

2022 2021 2022 2021

Three months ended February 28,

Stock-based compensation expense $ 11.8 $ 11.1

Our 2022 annual grant of stock options and RSUs occurred in the second quarter, similar to the 2021 annual grant.

The weighted-average grant-date fair value of each stock option granted in 2022 was $ 22.08 and in 2021 was $ 18.36 as calculated under a lattice pricing model.

Substantially all of the stock options and RSUs granted in 2022 and 2021 vest ratably over a three-year period or, if earlier, upon the retirement eligibility date of the holder.

The fair values of stock option grants in the stated periods were computed using the following range of assumptions for our various stock compensation plans:

Risk-free interest rates 0.2 - 2.5% 0.0 - 1.8%

Dividend yield 1.5 % 1.5 %

Expected volatility 21.2 % 21.3 %

Expected lives (in years) 7.6 7.9

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

Our 2023 annual grant of stock options and RSUs is expected to occur in the second quarter, similar to the 2022 annual grant.

The following is a summary of our stock option activity for the three months ended February 28, 2023 and 2022:

(shares in millions) Number

6 unchanged sentences

Exercisable at end of the period 3.5 $ 58.79 3.0 $ 53.17

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:

As of February 28, 2023, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 60.7 million and for options currently exercisable was $ 59.9 million.

The total intrinsic value of all options exercised during the three months ended February 28, 2023 and 2022 was $ 2.1 million and $ 32.6 million, respectively.

The following is a summary of our RSU activity for the three months ended February 28, 2023 and 2022:

(shares in thousands) Number

7 unchanged sentences

Outstanding at end of period 447 $ 78.89 537 $ 70.31

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

The following is a summary of our price-vested stock options activity for the three months ended February 28, 2023 and 2022:

(shares in thousands) Number

6 unchanged sentences

Outstanding at end of period 2,068 $ 9.40 2,166 $ 9.40

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

The following is a summary of our LTPP activity for the three months ended February 28, 2023 and 2022:

(shares in thousands) Number

7 unchanged sentences

Outstanding at end of period 431 $ 93.64 395 $ 93.42

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.

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 nine months ended August 31, 2022.

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.

Income tax expense for the three months ended February 28, 2023 included $ 3.8 million of net discrete tax benefits consisting principally of the following:

(i) $ 3.2 million of tax benefits associated with the adjustment of a valuation allowance due to changes in judgment about the realizability of the deferred tax asset, (ii) $ 0.8 million of tax benefits related to the revaluation of deferred taxes resulting from changes in tax rates, and (iii) $ 0.2 million of tax expense associated with stock-based compensation.

Income tax expense for the three months ended February 28, 2022 included $ 10.3 million of net discrete tax benefits consisting principally of the following:

(i) $ 7.6 million of excess tax benefits associated with stock-based compensation, and (ii) $ 2.5 million of tax benefits related to the revaluation of deferred taxes resulting from enacted legislation.

Other than additions for current year tax positions, there we re no significant changes to unrecognized tax benefits during the three months ended February 28, 2023.

As of February 28, 2023, 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 August 31, Nine months ended August 31,

2022 2021 2022 2021

Three months ended February 28,

Average shares outstanding – basic 268.2 267.8

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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 August 31, Nine months ended August 31,

2022 2021 2022 2021

Three months ended February 28,

Anti-dilutive securities 1.6 0.2

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

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

2022 2021 2022 2021

Three months ended February 28,

Shares issued under stock options, RSUs, LTPP and employee stock purchase plans 0.3 0.9

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

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.

As of February 28, 2023, $ 532.4 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):

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Foreign currency translation adjustment (1)

4 unchanged sentences

Accumulated other comprehensive loss $ ( 437.1 ) $ ( 480.6 )

(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.

(1) During the three months ended February 28, 2023, the foreign currency translation adjustment of accumulated other comprehensive loss increased on a net basis by $ 49.0 million, inclusive of $ 5.8 million of unrealized losses 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 Nine months ended Affected Line Items in the Condensed Consolidated Income Statement

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

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

February 28, 2023 February 28, 2022

(Gains)/losses on cash flow hedges:

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

Treasury lock contracts (1)

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

Foreign exchange contracts ( 1.2 ) 0.2 Cost of goods sold

3 unchanged sentences

Amortization of pension and postretirement benefit adjustments:

Amortization of prior service costs (credit) (2)

$ 0.2 $ 0.1 $ 0.3 $ 0.2 Other income, net

Amortization of net actuarial losses (1)

3 unchanged sentences

Net, after tax $ ( 0.3 ) $ 2.0

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

(1) 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).

Amortization of net actuarial losses includes settlement losses.

BUSINESS SEGMENTS

3 unchanged sentences

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”, “OLD BAY”, “Lawry’s”, “Zatarain’s”, “Simply Asia”, “Thai Kitchen”, “Ducros”, “Vahine”, “Cholula”, “Schwartz”, “Club House”, “Kamis”, “DaQiao”, “La Drogheria”, “Stubb's”, 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.

Our flavor solutions segment sells to food manufacturers and the foodservice industry both directly and indirectly through distributors, with the exception of our business in China, 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.

With their primary attribute being flavor, we regard the products within each of our segments to be fairly homogenous.

With their primary attribute being flavor, the products within each of our segments are regarded as fairly homogenous.

It is impracticable to segregate and identify sales and profits for each of these individual product lines.

We measure segment performance based on operating income excluding special charges, as this activity is managed separately from the business segments.

We also exclude 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.

We also exclude transaction and integration expenses related to our acquisitions 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.

Although the segments are managed separately due to their distinct distribution channels and marketing strategies, manufacturing and warehousing are often integrated to maximize cost efficiencies.

We do not segregate jointly utilized assets by individual segment for internal reporting, evaluating performance or allocating capital.

We do not segregate jointly utilized assets by individual segment for purposes of internal reporting, performance evaluation, or capital allocation.

Because of manufacturing integration for certain products within the segments, products are not sold from one segment to another but rather inventory is transferred at cost.

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(in millions)

Three months ended August 31, 2022

Net sales $ 927.9 $ 667.7 $ 1,595.6

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

Income from unconsolidated operations 6.6 0.9 7.5

Three months ended August 31, 2021

Net sales $ 921.9 $ 627.5 $ 1,549.4

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

Income from unconsolidated operations 6.7 2.4 9.1

Nine months ended August 31, 2022

Three months ended February 28, 2023

Net sales $ 909.5 $ 656.0 $ 1,565.5

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

Operating income excluding special charges 173.4 53.4 226.8

Income from unconsolidated operations 13.8 0.2 14.0

Nine months ended August 31, 2021

Three months ended February 28, 2022

Net sales $ 926.1 $ 596.3 $ 1,522.4

3 unchanged sentences

Consumer Flavor Solutions Total

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

Operating income $ 181.9 $ 53.3 $ 235.2

Three months ended August 31, 2021

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

Three months ended February 28, 2023

Operating income excluding special charges $ 173.4 $ 53.4 $ 226.8

Special charges 19.0 8.8 27.8

Transaction and integration expenses 0.2 1.1 1.3

Operating income $ 154.4 $ 44.6 $ 199.0

Nine months ended August 31, 2022

Three months ended February 28, 2022

Operating income excluding special charges and transaction and integration expenses $ 167.0 $ 60.1 $ 227.1

2 unchanged sentences

Operating income $ 163.4 $ 43.5 $ 206.9

Nine months ended August 31, 2021

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

Special charges 13.1 7.5 20.6

Transaction-related expenses included in cost of goods sold 4.0 2.3 6.3

Other transaction and integration expenses 7.5 19.5 27.0

Operating income $ 529.9 $ 209.0 $ 738.9

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):

The following table sets forth our net sales, by geographic area, for the three and three months ended February 28, 2023 and 2022 (in millions):

Americas EMEA Asia/Pacific Total

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,

Three months ended February 28, 2023

$ 1,094.7 $ 283.9 $ 186.9 $ 1,565.5

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

Gain on settlement of treasury locks (1)

Three months ended February 28, 2022

1,022.5 290.5 209.4 1,522.4

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

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.

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 in our consolidated income statement.

The sale of Eastern resulted in a gain of $ 13.4 million, net of tax of $ 5.7 million.

That gain is included in Income from unconsolidated operations in our consolidated income statement.

That gain also reflects a write-off of $ 1.4 million of foreign currency translation adjustment, a component of accumulated other comprehensive income.

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