What changed in this filing

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Item 1. Financial Statements

2024-03-26 compared with 2023-10-03 · 135 added, 282 removed, 383 unchanged (52% of the section changed)

3 unchanged sentences

(in millions except per share amounts)

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

2023 2022 2023 2022

Three months ended

February 29, 2024 February 28, 2023

Net sales $ 1,602.7 $ 1,565.5

2 unchanged sentences

Selling, general and administrative expense 361.6 336.1

Transaction and integration expenses — — — 2.2

Special charges 4.2 27.8

6 unchanged sentences

Income from unconsolidated operations

13.4 7.5 37.7 27.2

Net income $ 166.0 $ 139.1

4 unchanged sentences

Cash dividends paid per share – voting and non-voting $ 0.42 $ 0.39

Cash dividends declared per share – voting and non-voting $ 0.39 $ 0.37 $ 0.78 $ 0.74

See notes to condensed consolidated financial statements (unaudited).

2 unchanged sentences

(in millions)

Three months ended August 31,

Nine months ended August 31,

2023 2022 2023 2022

Three months ended

February 29, 2024 February 28, 2023

Net income $ 166.0 $ 139.1

4 unchanged sentences

Change in derivative financial instruments ( 3.3 ) ( 5.4 )

Tax benefit (expense) 1.2 ( 3.9 ) 7.4 ( 18.8 )

Total other comprehensive income (loss) 37.8 ( 136.4 ) 85.3 ( 165.8 )

Tax benefit 0.4 1.0

Total other comprehensive income (loss), net of tax ( 5.1 ) 41.6

Comprehensive income $ 163.0 $ 181.5

40 unchanged sentences

(in millions)

Nine months ended August 31,

Three months ended

February 29, 2024 February 28, 2023

Operating activities

3 unchanged sentences

Stock-based compensation 11.7 11.8

Gain on the sale of intangible asset — ( 13.6 )

Gain on the sale of a business — ( 49.6 )

Asset impairment charge — 10.0

Income from unconsolidated operations ( 21.3 ) ( 14.0 )

Changes in operating assets and liabilities (net of effect of business disposed)

Changes in operating assets and liabilities

Trade accounts receivable 16.5 9.7

5 unchanged sentences

Investing activities

Proceeds from sale of business — 95.2

Proceeds from sale of intangible asset — 13.6

Capital expenditures (including software) ( 62.0 ) ( 61.5 )

3 unchanged sentences

Short-term borrowings, net 57.3 67.9

Long-term debt borrowings 496.4 —

Payment of debt issuance costs ( 1.1 ) —

Long-term debt repayments ( 14.1 ) ( 3.6 )

6 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 2.5 25.6

Decrease in cash and cash equivalents ( 179.3 ) ( 7.8 )

Increase in cash and cash equivalents 11.4 22.8

Cash and cash equivalents at beginning of period 166.6 334.0

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, 2023

Balance, May 31, 2023 17.2 251.0 $ 2,177.1 $ 3,191.4 $ ( 431.5 ) $ 19.9 $ 4,956.9

Net income — 170.1 — — 170.1

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

Other comprehensive income, net of tax — — 37.6 0.2 37.8

Dividends — ( 104.7 ) — — ( 104.7 )

Stock-based compensation 12.6 — — — 12.6

Shares purchased and retired ( 0.1 ) — ( 3.0 ) ( 5.1 ) — — ( 8.1 )

Shares issued 0.1 — 4.8 — — — 4.8

Equal exchange ( 0.2 ) 0.2 — — — — —

Balance, August 31, 2023

17.0 251.2 $ 2,191.5 $ 3,251.7 $ ( 393.9 ) $ 20.8 $ 5,070.1

Nine months ended August 31, 2023

Three months ended February 29, 2024

Balance, November 30, 2023

2 unchanged sentences

Net income attributable to non-controlling interest — — — 2.1 2.1

Other comprehensive income, net of tax — — 86.7 ( 1.4 ) 85.3

Dividends — ( 209.3 ) — — ( 209.3 )

Stock-based compensation 51.1 — — — 51.1

Shares purchased and retired ( 0.5 ) — ( 15.7 ) ( 22.8 ) — — ( 38.5 )

Shares issued 0.7 — 17.5 — — — 17.5

Equal exchange ( 0.6 ) 0.6 — — — — —

Balance, August 31, 2023

17.0 251.2 $ 2,191.5 $ 3,251.7 $ ( 393.9 ) $ 20.8 $ 5,070.1

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 income, net of tax — — ( 135.4 ) ( 1.0 ) ( 136.4 )

Dividends — ( 99.2 ) — — ( 99.2 )

Other comprehensive (loss), net of tax — — ( 5.1 ) — ( 5.1 )

Stock-based compensation 11.7 — — — 11.7

2 unchanged sentences

Equal exchange ( 0.4 ) 0.4 — — — — —

Balance, August 31, 2022

Balance, February 29, 2024

16.6 251.7 $ 2,213.4 $ 3,412.8 $ ( 393.7 ) $ 24.9 $ 5,257.4

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 income, net of tax — — ( 163.5 ) ( 2.3 ) ( 165.8 )

Dividends — ( 198.4 ) — — ( 198.4 )

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

Stock-based compensation 11.8 — — — 11.8

2 unchanged sentences

Equal exchange ( 0.2 ) 0.2 — — — — —

Balance, August 31, 2022

Balance, February 28, 2023

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

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 nine-month period ended August 31, 2023 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 29, 2024 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 of the fiscal year.

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, 2023.

Accounting Pronouncements Recently Adopted

In 2022, we adopted the FASB issued ASU No.

Reference Rate Reform (Topic 848):

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 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 was completed in the second quarter of 2023.

There was no material impact to our consolidated financial statements.

Recently Issued Accounting Pronouncements — Pending Adoption

Accounts Payable - Supplier Finance Program

As more fully described in our Annual Report on Form 10-K for the year ended November 30, 2023, we participate in a Supply Chain Financing program (SCF) with several global financial institutions (SCF Banks).

Under the SCF, qualifying suppliers may elect to sell their receivables from us to an SCF Bank, enabling participating suppliers to negotiate their receivables sales arrangements directly with the respective SCF Bank.

We are not party to those agreements and have no economic interest in a supplier’s decision to sell a receivable.

All outstanding amounts related to suppliers participating in the SCF are recorded within the line entitled Trade accounts payable in our condensed consolidated balance sheets, and the associated payments are included in operating activities within our consolidated statements of cash flows.

As of February 29, 2024 and November 30, 2023, the amounts due to suppliers participating in the SCF and included in trade accounts payable were approximately $ 308.6 million and $ 300.5 million, respectively.

Accounting Pronouncement Partially Adopted

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 enhance the transparency of these programs by disclosing the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a roll forward of those obligations.

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 roll-forward 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 roll-forward of obligations outstanding will be effective for our fiscal year ending November 30, 2025.

Early adoption is permitted.

We do not believe the adoption of this new standard will have a material impact on our consolidated financial statements.

SPECIAL CHARGES AND TRANSACTION AND INTEGRATION EXPENSES

We adopted the new standard's requirements to disclose the key terms of the programs and information about obligations outstanding as of November 30, 2023.

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

The partial adoption of this standard did not have a material impact on our consolidated financial statements nor do we expect the adoption of the future disclosure requirements to have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements — Pending Adoption

In November 2023, the FASB issued ASU No.

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures that requires entities to report incremental information about significant segment expenses included in a segment’s profit or loss measure as well as the name and title of the chief operating decision maker.

The guidance also requires interim disclosures related to reportable segment profit or loss and assets that had previously only been disclosed annually.

The new standard is effective for our annual period ending November 30, 2025 and our interim periods during the fiscal year ending November 30, 2026.

The guidance does not affect recognition or measurement in our consolidated financial statements.

In December 2023, the FASB issued ASU No.

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures that requires entities to disclose additional information about federal, state, and foreign income taxes primarily related to the income tax rate reconciliation and income taxes paid.

The new standard also eliminates certain existing disclosure requirements

related to uncertain tax positions and unrecognized deferred tax liabilities.

The guidance is effective for our fiscal year ending November 30, 2026.

The guidance does not affect recognition or measurement in our consolidated financial statements.

SPECIAL CHARGES

4 unchanged sentences

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 and nine months ended August 31, 2023 and 2022

The following is a summary of special charges recognized in the three months ended February 29, 2024 and February 28, 2023

(in millions):

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

2023 2022 2023 2022

Three months ended

February 29, 2024 February 28, 2023

Employee severance and related benefits $ 2.1 $ 24.8

Cash 4.4 0.9 12.4 6.9

Non-Cash — 0.8

Total special charges $ 4.2 $ 27.8

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

Total $ 6.1 $ 3.4 $ 47.1 $ 38.0

During the three months ended August 31, 2023, we recorded $ 6.1 million of special charges, consisting principally of $ 3.6 million associated with our Global Operating Effectiveness (GOE) program, as more fully described below, $ 1.7 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 $ 0.8 million in the Americas region.

During the nine months ended August 31, 2023, we recorded $ 47.1 million of special charges, consisting principally of $ 37.0 million associated with our GOE program, as more fully described below, $ 3.9 million associated with the transition of a manufacturing facility in EMEA, as more fully described below, and streamlining actions of $ 5.3 million in the Americas region, and $ 0.9 million in the EMEA region.

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 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 2022, our Management Committee approved the GOE program.

During the three months ended February 29, 2024, we recorded $ 4.2 million of special charges, consisting principally of $ 2.8 million associated with our Global Operating Effectiveness (GOE) program, as more fully described below, and $ 1.4 million associated with the transition of a manufacturing facility in Europe, Middle East, and Africa (EMEA), as more fully described below.

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 GOE program, as more fully described below, $ 0.9 million associated with the transition of a manufacturing facility in EMEA, and streamlining actions of $ 1.3 million in the Americas region and $ 0.8 million in the EMEA region.

In 2022, our Management Committee approved the GOE program, which is expected to eliminate costs associated with our supply chain operations, as well as across the remainder of the organization.

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

1 unchanged sentence

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 August 31, 2023, under our GOE program included $ 0.9 million in severance and related benefits costs and $ 2.7 million of third-party expenses and other costs.

Other special charges recognized during the nine months ended August 31, 2023, under our GOE program included $ 12.4 million in severance and related benefits costs and $ 4.9 million of third-party expenses and other costs.

The GOE program also includes other employee separation actions as other related costs within the program.

The total costs incurred under the GOE program were approximately $ 48 million as of November 30, 2023.

Special charges recognized during the three months ended February 29, 2024, under our GOE program included $ 2.1 million in severance and related benefits costs and $ 0.7 million of third-party expenses and other costs.

Special charges recognized during the three months ended February 28, 2023, under our GOE program included $ 19.7 million associated with the voluntary retirement program, $ 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 $ 40 million which will be recognized as special charges in our consolidated income statement during 2022, 2023 and the first half of 2024.

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 August 31, 2023, we

recognized $ 0.4 million in accelerated depreciation and $ 1.3 million in third party expenses and other costs.

During the nine months ended August 31, 2023, we recognized $ 1.2 million in accelerated depreciation and $ 2.7 million in third party expenses and other costs.

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.

As of August 31, 2023, accruals associated with special charges of $ 20.7 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 and nine months ended August 31, 2023 and 2022 (in millions):

Three months ended August 31,

Nine months ended August 31,

2023 2022 2023 2022

We expect the cost of the initiative to approximate $ 40 million—to be recognized as special charges in our consolidated income statement through 2024.

related to the initiative.

The total costs incurred under this program were approximately $ 36 million as of November 30, 2023.

During the three months ended February 29, 2024, we recognized $ 1.4 million in third-party expenses and other costs.

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

As of February 29, 2024, accruals associated with special charges of $ 15.9 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 29, 2024 and February 28, 2023 (in millions):

Three months ended

February 29, 2024 February 28, 2023

Consumer segment $ 1.8 $ 19.0

1 unchanged sentence

Total special charges $ 4.2 $ 27.8

Integration Expenses

Integration expenses recognized during the nine months ended August 31, 2022 were $ 2.2 million, relating to the acquisition of FONA International, LLC (FONA).

FINANCING ARRANGEMENTS AND FINANCIAL INSTRUMENTS

On April 6, 2023, we issued $ 500 million aggregate principal amount of 4.950 % unsecured senior notes due 2033.

Interest is payable semi-annually in April and October of each year, beginning on October 15, 2023.

The net proceeds received from the issuance of these notes of $ 496.4 million were used to repay a portion of the Company's outstanding commercial paper borrowings.

As part of the issuance of new debt, we entered and settled treasury locks in a notional amount of $ 250.0 million to manage our interest rate risk associated with the issuance of the unsecured senior notes.

We designated the treasury lock arrangements as cash flow hedges with the realized loss of $ 2.6 million to be amortized to interest expense over the life of the underlying debt.

In June 2023, we entered into a 364-day $ 500 million revolving credit facility which will expire in June 2024 and simultaneously cancelled the 364-day $ 500 million revolving credit facility which was set to expire in July 2023.

The current pricing for that 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.

On September 1, 2023, we repaid our $ 250 million, 3.50 % notes due in September 2023.

In the third quarter 2023, we executed a nonrecourse accounts receivable sale program whereby certain eligible U.S.

receivables are sold to third party financial institution in exchange for cash.

The program provides us with an additional means for managing liquidity.

Under the terms of the arrangement, we act as the collecting agent on behalf of the financial institution.

We account for the transfer of receivables as a sale at the point control is transferred through derecognition of the receivable on our condensed consolidated balance sheet.

Receivables sold under this program were approximately $ 26.1 million during the three and nine months ended August 31, 2023.

Of that amount, we collected $ 11.3 million on behalf of the financial institution during the three and nine months ended August 31, 2023.

The incremental costs of selling receivables under this arrangement were insignificant for the three and nine months ended August 31, 2023.

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.

6 unchanged sentences

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

At August 31, 2023, we had foreign currency exchange contracts to purchase or sell $ 966.5 million of foreign currencies as compared to $ 560.5 million at November 30, 2022.

The following is a summary of the notional amounts of outstanding foreign currency exchange contracts as of February 29, 2024 and November 30, 2023 (in millions):

February 29, 2024 November 30, 2023

Fair value hedges $ 787.0 $ 765.4

Cash flow hedge 166.7 235.0

Total $ 953.7 $ 1,000.4

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.

Hedge ineffectiveness was not material.

All foreign currency exchange contracts outstanding at August 31, 2023 have durations of less than 18 months, including $ 178.6 million of notional contracts that have durations of less than one month and are used to hedge short-term cash flow funding.

All foreign currency exchange contracts outstanding at February 29, 2024 have durations of less than 18 months, including $ 208.5 million of notional contracts that have an initial duration of less than one month and are used to hedge short-term cash flow funding.

Contracts which are designated as hedges of foreign currency denominated assets are considered fair value hedges.

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.

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.

Contracts which are designated as hedges of anticipated purchases denominated in a foreign currency (generally purchases of inventory in U.S.

1 unchanged sentence

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 $ 757.3 million at August 31, 2023.

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, 2023

As of February 29, 2024

Interest rate contracts Other current

14 unchanged sentences

Total $ 27.1 $ 76.3

In conjunction with the phase out of LIBOR, in 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 addition, 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.

In the second quarter of 2023, we amended our five-year revolving credit facility expiring in July 2026 to no longer use LIBOR.

The current pricing for the five-year credit facility, on a fully drawn basis, is SOFR plus 1.25 %.

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, 2023 and 2022 (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 months ended February 29, 2024 and February 28, 2023 (in millions):

Fair Value Hedges

1 unchanged sentence

location (Expense) income

Three months ended August 31, 2023 Three months ended August 31, 2022 Nine months ended August 31, 2023 Nine months ended August 31, 2022

Three months ended February 29, 2024 Three months ended February 28, 2023

Interest rate contracts Interest expense $ ( 5.1 ) $ ( 3.7 )

Income statement location Gain (loss) recognized in income Income statement location Gain (loss) recognized in income

Derivative 2023 2022 Hedged item 2023 2022

Three months ended August 31,

Foreign exchange contracts Other income, net $ ( 12.4 ) $ 3.6 Intercompany loans Other income, net $ 10.0 $ ( 3.2 )

Nine months ended August 31,

Derivative Three months ended February 29, 2024 Three months ended February 28, 2023 Hedged item Three months ended February 29, 2024 Three months ended February 28, 2023

Foreign exchange contracts Other income, net $ ( 2.9 ) $ 1.0 Intercompany loans Other income, net $ 1.4 $ ( 0.1 )

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, 2023 and 2022.

T he 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 months ended February 29, 2024 and February 28, 2023.

Cash Flow Hedges

3 unchanged sentences

reclassified from

2023 2022 2023 2022

Three months ended August 31,

Three months ended February 29, 2024 Three months ended February 28, 2023 Three months ended February 29, 2024 Three months ended February 28, 2023

Interest rate contracts $ — $ — Interest

2 unchanged sentences

Total $ ( 0.2 ) $ ( 1.1 ) $ 1.1 $ 1.3

Nine months ended August 31,

Interest rate contracts $ ( 2.6 ) $ 18.7 Interest

expense/ Other income, net $ 0.2 $ 19.1

Foreign exchange contracts ( 1.7 ) 5.2 Cost of goods

Total $ ( 4.3 ) $ 23.9 $ 1.1 $ 19.8

As of August 31, 2023, the net amount of accumulated other comprehensive loss associated with all cash flow and settled interest rate fair value hedge derivatives expected to be reclassified in the next 12 months is $ 0.5 million as a decrease to earnings.

As of February 29, 2024, the net amount of accumulated other comprehensive loss associated with all cash flow and settled interest rate cash flow hedge derivatives expected to be reclassified in the next 12 months is $ 0.1 million as an increase to earnings.

Net Investment Hedges

3 unchanged sentences

excluded from the assessment of hedge effectiveness

2023 2022 2023 2022

Three months ended August 31,

Cross currency contracts $ ( 8.0 ) $ 29.7 Interest

expense $ 2.7 $ 2.4

Nine months ended August 31,

Three months ended February 29, 2024 Three months ended February 28, 2023 Three months ended February 29, 2024 Three months ended February 28, 2023

Cross currency contracts $ ( 5.9 ) $ ( 5.8 ) Interest

2 unchanged sentences

The amounts noted in the tables above for OCI do not include any adjustments for the impact of deferred income taxes.

Since the third quarter of 2023, we have maintained a nonrecourse accounts receivable sale program whereby certain eligible U.S.

receivables are sold to a third-party financial institution in exchange for cash.

The program provides us with an additional means for managing liquidity.

Under the terms of the arrangement, we act as the collecting agent on behalf of the financial institution.

We account for the transfer of receivables as a sale at the point control is transferred through derecognition of the receivable on our condensed consolidated balance sheet.

The outstanding amount of receivables sold under this program were $ 19.2 million as of February 29, 2024.

As collecting agent on the sold receivables, we had $ 4.2 million of cash collected that was not yet remitted to the third-party financial institution as of February 29, 2024.

The incremental costs of selling receivables under this arrangement were insignificant for the three months ended February 29, 2024.

FAIR VALUE MEASUREMENTS

6 unchanged sentences

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

At August 31, 2023 and November 30, 2022, we had no financial assets or liabilities that were subject to a level 3 fair value measurement.

At February 29, 2024 and November 30, 2023, 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, 2023

February 29, 2024

Fair Value Level 1 Level 2

21 unchanged sentences

Total $ 76.3 $ — $ 76.3

At August 31, 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.

At February 29, 2024 and November 30, 2023, 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.

6 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):

August 31, 2023 November 30, 2022

February 29, 2024 November 30, 2023

Carrying amount $ 4,127.5 $ 4,139.2

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 August 31, 2023 and 2022 (in millions):

United States pension International pension Other postretirement benefits

2023 2022 2023 2022 2023 2022

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

Interest costs 9.0 6.5 2.5 1.7 0.7 0.4

Expected return on plan assets ( 10.6 ) ( 10.7 ) ( 3.9 ) ( 3.1 ) — —

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

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

Settlement loss — — — 0.2 — —

Total (income) expense $ ( 0.8 ) $ ( 0.9 ) $ ( 1.2 ) $ ( 0.7 ) $ 0.4 $ 0.7

The following table presents the components of our pension (income) and other postretirement benefits expense for the nine months ended August 31, 2023 and 2022 (in millions):

The following table presents the components of our pension (income) and other postretirement benefits expense for the three months ended February 29, 2024 and February 28, 2023 (in millions):

United States pension International pension Other postretirement benefits

5 unchanged sentences

Amortization of net actuarial losses (gains) ( 0.1 ) 0.1 — — ( 0.6 ) ( 0.5 )

Settlement loss — — — 0.2 — —

Total (income) expense $ ( 0.2 ) $ ( 0.9 ) $ ( 1.2 ) $ ( 1.0 ) $ 0.1 $ 0.3

During the nine months ended August 31, 2023 and 2022, we contributed $ 7.4 million and $ 9.9 million, respectively, to our pension plans.

During the three months ended February 29, 2024 and February 28, 2023, we contributed $ 1.8 million and $ 1.9 million, respectively, to our pension plans.

Total contributions to our pension plans in fiscal year 2023 were $ 9.2 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 $( 2.7 ) million and $( 2.4 ) million for the three months ended August 31, 2023 and 2022, respectively.

For the nine months ended August 31, 2023 and 2022, the net aggregate amount

of pension and other postretirement benefits income, excluding service cost components was $( 8.1 ) million and $( 7.5 ) million, respectively.

The net aggregate amount of pension and other postretirement benefits (income), excluding service cost components, was $( 2.0 ) million and $( 2.6 ) million for the three months ended February 29, 2024 and February 28, 2023, 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 August 31, Nine months ended August 31,

2023 2022 2023 2022

Three months ended

February 29, 2024 February 28, 2023

Stock-based compensation expense $ 11.7 $ 11.8

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

The weighted -average grant-date fair value of each stock option granted in 2023 was $ 19.35 and in 2022 was $ 22.08 as calculated under a lattice pricing model.

Substantially all of the stock options and RSUs granted in 2023 and 2022 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 3.5 % - 4.9 %

0.2 % - 2.5 %

Dividend yield 1.9 % 1.5 %

Expected volatility 21.8 % 21.2 %

Expected lives (in years) 7.3 7.6

The following is a summary of our stock option activity for the nine months ended August 31, 2023 and 2022:

Our 2024 annual grant of stock options and RSUs will occur in the second quarter, similar to the 2023 annual grant.

During the three months ended February 29, 2024, approximately 380,000 stock option shares were granted.

The following is a summary of our stock option activity for the three months ended February 29, 2024 and February 28, 2023:

(shares in millions) Number

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Exercisable at end of the period 3.9 $ 65.36 3.5 $ 58.79

As of August 31, 2023, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 78.1 million and for options currently exercisable was $ 77.9 million.

The total intrinsic value of all options exercised during the nine months ended August 31, 2023 and 2022 was $ 11.1 million and $ 40.2 million, respectively.

The following is a summary of our RSU activity for the nine months ended August 31, 2023 and 2022:

As of February 29, 2024, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 38.4 million and for options currently exercisable was $ 37.3 million.

The total intrinsic value of all options exercised during the three months ended February 29, 2024 and February 28, 2023 was $ 2.6 million and $ 2.1 million, respectively.

The following is a summary of our RSU activity for the three months ended February 29, 2024 and February 28, 2023:

(shares in thousands) Number

3 unchanged sentences

Outstanding at beginning of period 494 $ 76.94 480 $ 77.62

Granted 243 78.33 208 94.21

Vested ( 3 ) 92.74 ( 26 ) 52.48

1 unchanged sentence

Outstanding at end of period 482 $ 76.71 447 $ 78.89

The following is a summary of our price-vested stock options activity for the nine months ended August 31, 2023 and 2022:

The following is a summary of our price-vested stock options activity for the three months ended February 29, 2024 and February 28, 2023:

(shares in thousands) Number

5 unchanged sentences

Outstanding at end of period 2,055 $ 9.40 2,068 $ 9.40

The following is a summary of our LTPP activity for the nine months ended August 31, 2023 and 2022:

The following is a summary of our LTPP activity for the three months ended February 29, 2024 and February 28, 2023:

(shares in thousands) Number

7 unchanged sentences

Outstanding at end of period 475 $ 81.53 431 $ 93.64

Income tax expense for the three months ended August 31, 2023 included $ 3.3 million of net discrete tax benefits consisting principally of the following:

(i) $ 2.2 million of tax benefits from the net reversal of certain prior year reserves for unrecognized tax benefits and related interest in non-U.S.

jurisdictions, (ii) $ 0.8 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 non-U.S.

jurisdictions, (iii) $ 0.6 million of excess tax benefits associated with stock-based compensation, (iv) $ 1.5 million of tax benefits resulting from an adjustment to a prior year tax accrual, and related deferred taxes, based on the final returns filed, and (v) $ 1.9 million of tax expense related to certain unremitted prior year earnings.

Income tax expense for the nine months ended August 31, 2023 included $ 10.1 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) $ 2.2 million of tax benefits from the net reversal of certain prior reserves for unrecognized tax benefits and related interest in non-U.S.

jurisdictions, (iii) $ 2.0 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 non-U.S.

jurisdictions, (iv) $ 1.2 million of tax benefit related to a tax settlement, (v) $ 0.8 million of tax benefits related to the revaluation of deferred taxes resulting from changes in tax rates, (vi) $ 1.0 million of excess tax benefits associated with stock-based compensation, (vii) $ 1.5 million of tax benefits resulting from an adjustment to a prior year tax accrual, and related deferred taxes, based on the final returns filed, and (viii) $ 1.9 million of tax expense related to certain unremitted prior year earnings.

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.

Other than the discrete tax benefits previously mentioned and additions for current year tax positions, there we re no significant changes to unrecognized tax benefits during the nine months ended August 31, 2023.

As of August 31, 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.

Income tax expense for the three months ended February 29, 2024 included $ 1.6 million of discrete tax expense consisting principally of the following:

(i) $ 1.1 million of tax expense resulting from a state tax matter, and (ii) $ 0.5 million of tax expense associated with stock-based compensation.

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.

Other than additions for current year tax positions, there we re no significant changes to unrecognized tax benefits during the three months ended February 29, 2024.

As of February 29, 2024, 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,

2023 2022 2023 2022

Three months ended

February 29, 2024 February 28, 2023

Average shares outstanding – basic 268.4 268.2

3 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 August 31, Nine months ended August 31,

2023 2022 2023 2022

Three months ended

February 29, 2024 February 28, 2023

Anti-dilutive securities 3.5 1.6

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

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

2023 2022 2023 2022

Three months ended

February 29, 2024 February 28, 2023

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

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

As of August 31, 2023, $ 510.5 million remained of the $ 600 million share repurchase program authorization approved by our Board of Directors in November 2019.

As of February 29, 2024, $ 501.2 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, 2023 November 30, 2022

February 29, 2024 November 30, 2023

Foreign currency translation adjustment (1)

$ ( 308.0 ) $ ( 305.7 )

Unrealized gain on foreign currency exchange contracts 1.8 3.8

Unrealized gain (loss) on foreign currency exchange contracts ( 1.8 ) 0.8

Unamortized value of settled interest rate swaps ( 2.6 ) ( 2.7 )

1 unchanged sentence

Accumulated other comprehensive loss $ ( 393.7 ) $ ( 388.6 )

(1) During the nine months ended August 31, 2023, the foreign currency translation adjustment of accumulated other comprehensive loss decreased on a net basis by $ 93.2 million, inclusive of $ 17.6 million of unrealized losses associated with net investment hedges.

(1) During the three months ended February 29, 2024, the foreign currency translation adjustment of accumulated other comprehensive loss increased on a net basis by $ 2.3 million, inclusive of $ 5.9 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, 2023 August 31, 2022 August 31, 2023 August 31, 2022

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

February 29, 2024 February 28, 2023

(Gains)/losses on cash flow hedges:

Interest rate derivatives $ 0.2 $ ( 0.1 ) Interest expense

Treasury lock contracts (1)

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

Foreign exchange contracts ( 1.3 ) ( 1.2 ) Cost of goods sold

3 unchanged sentences

Amortization of pension and postretirement benefit adjustments:

Amortization of prior service costs (2)

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

Amortization of net actuarial (gains) losses (1)

Amortization of net actuarial (gains) (1)

$ ( 0.7 ) $ ( 0.4 ) Other income, net

2 unchanged sentences

Net, after tax $ ( 0.5 ) $ ( 0.3 )

(1) The settlement of these treasury locks is further described in note 11.

(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).

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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 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, 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.

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.

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 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.

4 unchanged sentences

(in millions)

Three months ended August 31, 2023

Net sales $ 937.1 $ 747.6 $ 1,684.7

Operating income excluding special charges 173.3 77.8 251.1

Income from unconsolidated operations 11.9 1.5 13.4

Three months ended August 31, 2022

Three months ended February 29, 2024

Net sales $ 921.5 $ 681.2 $ 1,602.7

Operating income excluding special charges 176.3 61.4 237.7

Income from unconsolidated operations 6.6 0.9 7.5

Nine months ended August 31, 2023

Income (loss) from unconsolidated operations 21.5 ( 0.2 ) 21.3

Three months ended February 28, 2023

Net sales $ 909.5 $ 656.0 $ 1,565.5

1 unchanged sentence

Income from unconsolidated operations 13.8 0.2 14.0

Nine months ended August 31, 2022

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

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

Income from unconsolidated operations 23.4 3.8 27.2

A reconciliation of operating income excluding special charges and transaction and integration expenses, to operating income is as follows (in millions):

A reconciliation of operating income excluding special charges to operating income is as follows (in millions):

Consumer Flavor Solutions Total

Three months ended August 31, 2023

Operating income excluding special charges $ 173.3 $ 77.8 $ 251.1

Special charges 2.2 3.9 6.1

Operating income $ 171.1 $ 73.9 $ 245.0

Three months ended August 31, 2022

Three months ended February 29, 2024

Operating income excluding special charges $ 176.3 $ 61.4 $ 237.7

1 unchanged sentence

Operating income $ 174.5 $ 59.0 $ 233.5

Nine months ended August 31, 2023

Three months ended February 28, 2023

Operating income excluding special charges $ 173.4 $ 53.4 $ 226.8

1 unchanged sentence

Operating income $ 154.4 $ 44.6 $ 199.0

Nine months ended August 31, 2022

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

Special charges 16.1 21.9 38.0

Transaction and integration expenses — 2.2 2.2

Operating income $ 459.4 $ 139.9 $ 599.3

The following table sets forth our net sales, by geographic area, for the three and nine months ended August 31, 2023 and 2022 (in millions):

Total segment operating income as disclosed in the preceding table represents our consolidated operating income.

The reconciliation of that operating income to income from consolidated operations before income taxes, which includes interest expense and other income, net is presented on the consolidated income statement.

The following table sets forth our net sales, by geographic area, for the three months ended February 29, 2024 and February 28, 2023 (in millions):

Americas EMEA APAC Total

Three months ended August 31, 2023

$ 1,203.3 $ 304.4 $ 177.0 $ 1,684.7

Three months ended August 31, 2022

1,141.7 262.9 191.0 1,595.6

Nine months ended August 31, 2023

3,475.8 899.0 534.6 4,909.4

Nine months ended August 31, 2022

Three months ended February 29, 2024

$ 1,117.1 $ 306.7 $ 178.9 $ 1,602.7

OTHER INCOME, NET

The following is a summary of other income, net recognized in the three and nine months ended August 31, 2023 and 2022

(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 lock — 18.7 — 18.7

Pension and other postretirement benefit income 2.7 2.4 8.0 7.5

Interest income 9.4 4.8 26.4 11.7

Other ( 5.0 ) 1.9 ( 3.7 ) 2.4

Total other income, net $ 7.1 $ 77.4 $ 30.7 $ 89.9

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.

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 $ 200 million notional treasury locks upon determining we would not issue fixed rate debt but rather enter into a $ 500 million 364-day revolving credit facility.

The proceeds received upon settlement of these treasury lock arrangements were $ 18.7 million.

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.

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