What changed in this filing

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Item 1. Financial Statements

2025-03-25 compared with 2024-10-01 · 113 added, 241 removed, 387 unchanged (48% of the section changed)

3 unchanged sentences

(in millions except per share amounts)

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

2024 2023 2024 2023

Three months ended

February 28, 2025 February 29, 2024

Net sales $ 1,605.5 $ 1,602.7

10 unchanged sentences

Income from unconsolidated operations

17.9 13.4 56.0 37.7

Net income $ 162.3 $ 166.0

4 unchanged sentences

Cash dividends paid per share – voting and non-voting $ 0.45 $ 0.42

Cash dividends declared per share – voting and non-voting $ 0.42 $ 0.39 $ 0.84 $ 0.78

See notes to condensed consolidated financial statements (unaudited).

2 unchanged sentences

(in millions)

Three months ended August 31,

Nine months ended August 31,

2024 2023 2024 2023

Three months ended

February 28, 2025 February 29, 2024

Net income $ 162.3 $ 166.0

4 unchanged sentences

Change in derivative financial instruments 2.3 ( 3.3 )

Tax benefit 3.7 1.2 5.2 7.4

Total other comprehensive income (loss), net of tax ( 2.2 ) 37.8 ( 1.1 ) 85.3

Tax (expense) benefit ( 1.0 ) 0.4

Total other comprehensive loss, net of tax ( 33.6 ) ( 5.1 )

Comprehensive income $ 129.8 $ 163.0

40 unchanged sentences

(in millions)

Nine months ended August 31,

Three months ended

February 28, 2025 February 29, 2024

Operating activities

3 unchanged sentences

Stock-based compensation 20.0 11.7

Deferred income tax expense (benefit) ( 37.2 ) 1.7

Deferred income tax benefit ( 9.2 ) ( 2.8 )

Income from unconsolidated operations ( 17.4 ) ( 21.3 )

11 unchanged sentences

Financing activities

Short-term borrowings, net 908.6 ( 850.0 )

Long-term debt borrowings — 496.4

Payment of debt issuance costs — ( 1.1 )

Short-term borrowings (repayments), net ( 25.9 ) 57.3

Long-term debt repayments ( 11.5 ) ( 14.1 )

6 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 6.5 ) 2.5

Increase (decrease) in cash and cash equivalents 34.2 ( 179.3 )

(Decrease) increase in cash and cash equivalents ( 83.3 ) 11.4

Cash and cash equivalents at beginning of period 186.1 166.6

5 unchanged sentences

(millions) Common Stock Shares Common Stock

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

Three months ended August 31, 2024

Balance, May 31, 2024 16.6 251.9 $ 2,234.7 $ 3,480.3 $ ( 387.6 ) $ 26.8 $ 5,354.2

Net income — 223.1 — — 223.1

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

Other comprehensive income (loss), net of tax — — ( 2.8 ) 0.6 ( 2.2 )

Dividends — ( 112.9 ) — — ( 112.9 )

Stock-based compensation 8.8 — — — 8.8

Shares purchased and retired ( 0.3 ) — ( 11.3 ) ( 13.3 ) — — ( 24.6 )

Shares issued 0.1 — 2.5 — — — 2.5

Equal exchange ( 0.2 ) 0.2 — — — — —

Balance, August 31, 2024

16.2 252.1 $ 2,234.7 $ 3,577.2 $ ( 390.4 ) $ 29.5 $ 5,451.0

Nine months ended August 31, 2024

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

Three months ended February 28, 2025

Balance, November 30, 2024

2 unchanged sentences

Net income attributable to non-controlling interest — — — 1.1 1.1

Other comprehensive income (loss), net of tax — — ( 1.8 ) 0.7 ( 1.1 )

Dividends — ( 225.6 ) — — ( 225.6 )

Stock-based compensation 39.9 — — — 39.9

Shares purchased and retired ( 0.5 ) — ( 18.7 ) ( 20.2 ) — — ( 38.9 )

Shares issued 0.7 — 13.9 — — — 13.9

Equal exchange ( 0.8 ) 0.8 — — — — —

Balance, August 31, 2024

16.2 252.1 $ 2,234.7 $ 3,577.2 $ ( 390.4 ) $ 29.5 $ 5,451.0

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 )

Other comprehensive loss, net of tax — — ( 33.4 ) ( 0.2 ) ( 33.6 )

Stock-based compensation 20.0 — — — 20.0

2 unchanged sentences

Equal exchange ( 0.2 ) 0.2 — — — — —

Balance, August 31, 2023

Balance, February 28, 2025

15.5 252.6 $ 2,253.3 $ 3,694.3 $ ( 524.6 ) $ 26.7 $ 5,449.7

Nine months ended August 31, 2023

Three months ended February 29, 2024

Balance, November 30, 2023

3 unchanged sentences

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

Dividends — ( 209.3 ) — — ( 209.3 )

Stock-based compensation 11.7 — — — 11.7

2 unchanged sentences

Equal exchange ( 0.4 ) 0.4 — — — — —

Balance, August 31, 2023

Balance, February 29, 2024

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

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, 2024 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, 2025 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.

The historical increase in net sales, net income and cash flow from operations in the second half of the year has largely been due to the consumer business cycle in the U.S., where customers typically purchase more products in the fourth quarter due to the Thanksgiving and Christmas holiday seasons.

This historical increase in the second half of the year has largely been due to the consumer business cycle in the U.S., where customers typically purchase more of our products in the fourth quarter due to the Thanksgiving and Christmas holiday seasons.

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, 2024.

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.

As more fully described in our Annual Report on Form 10-K for the year ended November 30, 2024, we participate in a Supply Chain Financing (SCF) program with several global financial institutions (SCF Banks).

Under the SCF program, 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 August 31, 2024 and November 30, 2023, the amounts due to suppliers participating in the SCF and included in trade accounts payable were approximately $ 394.8 million and $ 300.5 million, respectively.

All outstanding amounts related to suppliers participating in the SCF program 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 28, 2025 and November 30, 2024, the amounts due to suppliers participating in the SCF program and included in trade accounts payable were approximately $ 385.2 million and $ 417.4 million, respectively.

Accounting Pronouncement Partially Adopted

In September 2022, the FASB issued ASU No.

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

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

18 unchanged sentences

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

In November 2024, the FASB issued ASU No.

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures that requires more detailed disclosure about certain costs and expenses presented in the income statement, including inventory purchases, employee compensation, selling expense, and depreciation expense.

The guidance is effective for our annual period ending November 30, 2028 and our interim periods during the fiscal year ending November 30, 2029.

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

SPECIAL CHARGES

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

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

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

These charges 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 President and Chief Executive Officer.

Expenses associated with any approved action are classified as special charges upon recognition and monitored on an ongoing 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 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, 2024 and 2023

(in millions):

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

2024 2023 2024 2023

The following is a summary of special charges recognized in the three months ended February 28, 2025 and February 29, 2024 (in millions):

Three months ended

February 28, 2025 February 29, 2024

Employee severance and related benefits $ — $ 2.1

Cash 1.9 4.4 4.8 12.4

Non-Cash — 0.6 — 1.8

Other cash costs — 2.1

Total special charges $ — $ 4.2

During the three months ended August 31, 2024, we recorded $ 1.9 million of special charges, consisting principally of $ 0.7 million associated with our Global Operating Effectiveness (GOE) program, as more fully described below, and $ 1.2 million associated with the transition of a manufacturing facility in Europe, Middle East, and Africa (EMEA), as more fully described below.

During the nine months ended August 31, 2024, we recorded $ 7.9 million of special charges, consisting principally of $ 5.3 million associated with our GOE program, as more fully described below, and $ 2.6 million associated with the transition of a manufacturing facility in EMEA, as more fully described below.

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 GOE program, as more fully described below, $ 1.7 million associated with the transition of a manufacturing facility in 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.

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.

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.

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 August 31, 2024, under our GOE program included $ 0.7 million in severance and related benefits costs.

Special charges recognized during the nine months ended August 31, 2024, under our GOE program included $ 4.6 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 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.

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.

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—to be recognized as special charges in our consolidated income statement through 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.

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

During the three months ended August 31, 2024, we recognized a reversal of $ 0.7 million associated with severance and related benefits costs and $ 1.9 million in third-party expenses and other costs.

During the nine months ended August 31, 2024, we recognized a reversal of $ 1.5 million associated with severance and related benefits costs and $ 4.1 million in third-party expenses and other costs.

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.

As of August 31, 2024, accruals associated with special charges of $ 4.2 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, 2024 and 2023 (in millions):

Three months ended August 31,

Nine months ended August 31,

2024 2023 2024 2023

During the three months ended February 29, 2024, we recorded $ 4.2 million of special charges, consisting principally of (i) $ 2.8 million associated with our Global Operating Effectiveness (GOE) program, which includes $ 2.1 million in severance and related benefits costs and $ 0.7 million in third-party expenses and other costs, and (ii) $ 1.4 million in third-party expenses and other costs associated with the transition of a manufacturing facility in Europe, Middle East, and Africa (EMEA).

Both our GOE program and the EMEA manufacturing facility transition are more fully described in Note 2 of the notes to the consolidated financial statements in our Annual Report on Form 10-K for the year ended November 30, 2024.

As of February 28, 2025 and November 30, 2024, reserves associated with special charges of $ 1.0 million and $ 2.7 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 months ended February 28, 2025 and February 29, 2024 (in millions):

Three months ended

February 28, 2025 February 29, 2024

Consumer segment $ — $ 1.8

2 unchanged sentences

FINANCING ARRANGEMENTS AND FINANCIAL INSTRUMENTS

In August 2024, we entered into a 364-day $ 500 million revolving credit facility which will expire in August 2025 (the 364-day facility).

The current pricing for the 364-day facility, on a fully drawn basis, is SOFR + 1.23 %.

The pricing of the 364-day facility is based on a credit rating grid that contains a fully drawn maximum pricing of the 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 five-year $ 1.5 billion revolving credit facility (the five-year facility).

We do not expect that this covenant would limit our access to the 364-day facility or the five-year facility for the foreseeable future.

During the three months ended August 31, 2024, we repaid our $ 700.0 million 3.15 % notes due in August 2024.

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.

5 unchanged sentences

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

The following is a summary of the notional amounts of outstanding foreign currency exchange contracts as of August 31, 2024 and November 30, 2023 (in millions):

August 31, 2024 November 30, 2023

The following is a summary of the notional amounts of outstanding foreign currency exchange contracts as of February 28, 2025 and November 30, 2024 (in millions):

February 28, 2025 November 30, 2024

Fair value hedges $ 878.0 $ 818.1

3 unchanged sentences

Hedge ineffectiveness was not material.

All foreign currency exchange contracts outstanding at August 31, 2024 have durations of less than 15 months, including $ 252.7 million of notional contracts that have an initial duration of less than one month and are used to hedge short-term cash flow funding.

All foreign currency exchange contracts generally have durations of less than 12 months.

At February 28, 2025, $ 254.5 million of notional contracts had 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.

17 unchanged sentences

location Notional

As of August 31, 2024

As of February 28, 2025

Interest rate contracts Other current

16 unchanged sentences

Total $ 42.0 $ 50.4

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, 2024 and 2023 (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 28, 2025 and February 29, 2024 (in millions):

Fair Value Hedges

Derivative Income statement

location Expense (income)

Three months ended August 31, 2024 Three months ended August 31, 2023 Nine months ended August 31, 2024 Nine months ended August 31, 2023

location Expense

Three months ended February 28, 2025 Three months ended February 29, 2024

Interest rate contracts Interest expense $ 3.7 $ 5.1

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

Derivative 2024 2023 Hedged item 2024 2023

Three months ended August 31,

Foreign exchange contracts Other income, net $ ( 5.5 ) $ ( 12.4 ) Intercompany loans Other income, net $ 4.6 $ 10.0

Nine months ended August 31,

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

Derivative Three months ended February 28, 2025 Three months ended February 29, 2024 Hedged item Three months ended February 28, 2025 Three months ended February 29, 2024

Foreign exchange contracts Other income, net $ ( 0.6 ) $ ( 2.9 ) Intercompany loans Other income, net $ ( 0.6 ) $ 1.4

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 and nine months ended August 31, 2024 and 2023.

Cash Flow Hedges

Derivative Gain (loss)

recognized in OCI Income

recognized in OCI Income statement

location Gain (loss)

reclassified from

2024 2023 2024 2023

Three months ended August 31,

reclassified from AOCI

Derivative Three months ended February 28, 2025 Three months ended February 29, 2024 Three months ended February 28, 2025 Three months ended February 29, 2024

Interest rate contracts $ — $ — Interest

2 unchanged sentences

Total $ ( 0.8 ) $ ( 0.2 ) $ ( 0.2 ) $ 1.1

Nine months ended August 31,

Interest rate contracts $ — $ ( 2.6 ) Interest

expense $ ( 0.5 ) $ 0.2

Foreign exchange contracts ( 0.6 ) ( 1.7 ) Cost of goods

Total $ ( 0.6 ) $ ( 4.3 ) $ 1.4 $ 1.1

As of August 31, 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 $ 0.8 million as a decrease to earnings.

As of February 28, 2025, 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 $ 0.9 million as an increase to earnings.

Net Investment Hedges

Derivative Gain (loss)

recognized in OCI Income

location Gain (loss)

excluded from the assessment of hedge effectiveness

2024 2023 2024 2023

Three months ended August 31,

Cross currency contracts $ ( 9.4 ) $ ( 8.0 ) Interest

expense $ 2.4 $ 2.7

Nine months ended August 31,

recognized in OCI Income statement

location Gain excluded from the assessment of hedge effectiveness

Derivative Three months ended February 28, 2025 Three months ended February 29, 2024 Three months ended February 28, 2025 Three months ended February 29, 2024

Cross currency contracts $ 8.1 $ ( 5.9 ) Interest

7 unchanged sentences

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 amounts of receivables sold under this program were $ 21.1 million and $ 19.6 million as of August 31, 2024, and November 30, 2023, respectively.

As collecting agent on the sold receivables, we had $ 3.3 million and $ 1.6 million of cash collected that was not yet remitted to the third-party financial institution as of August 31, 2024, and November 30, 2023, respectively.

The incremental costs of selling receivables under this arrangement were insignificant for the three months and nine months ended August 31, 2024.

The outstanding amounts of receivables sold under this program were $ 257.4 million and $ 106.9 million as of February 28, 2025 and November 30, 2024, respectively.

The proceeds from the sales of receivables are included in cash from operating activities in the consolidated statement of cash flows.

As collecting agent on the sold receivables, we had $ 29.7 million and $ 9.6 million of cash collected that was not yet remitted to the third-party financial institution as of February 28, 2025 and November 30, 2024, respectively.

This obligation is reported within other accrued liabilities on the consolidated balance sheet and within cash flows from financing activities on the consolidated cash flow statement.

FAIR VALUE MEASUREMENTS

6 unchanged sentences

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

At August 31, 2024 and November 30, 2023, we had no financial assets or liabilities that were subject to a level 3 fair value measurement.

At February 28, 2025 and November 30, 2024, 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, 2024

February 28, 2025

Fair Value Level 1 Level 2

7 unchanged sentences

Interest rate derivatives 35.3 — 35.3

Cross currency contracts 5.9 — 5.9

Total $ 51.1 $ — $ 51.1

9 unchanged sentences

Interest rate derivatives 37.9 — 37.9

Cross currency contracts 7.5 — 7.5

Total $ 50.4 $ — $ 50.4

At August 31, 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.

At February 28, 2025 and November 30, 2024, 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, 2024 November 30, 2023

February 28, 2025 November 30, 2024

Carrying amount $ 3,850.8 $ 3,858.8

6 unchanged sentences

and certain foreign locations.

In addition, we sponsor defined contribution plans in the U.S.

We also contribute to defined contribution plans in locations outside the U.S., including government-sponsored retirement plans.

We also currently provide postretirement medical and life insurance benefits to certain U.S.

Additionally, we sponsor defined contribution plans in the U.S.

and contribute to defined contribution plans in various locations outside the U.S., including government-sponsored retirement plans.

Moreover, we provide postretirement medical and life insurance benefits to certain U.S.

employees and retirees.

2 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, 2024 and 2023 (in millions):

United States pension International pension Other postretirement benefits

2024 2023 2024 2023 2024 2023

Service cost $ 0.3 $ 0.5 $ 0.1 $ 0.2 $ 0.2 $ 0.4

Interest costs 9.4 9.0 2.6 2.5 0.6 0.7

Expected return on plan assets ( 9.9 ) ( 10.6 ) ( 4.0 ) ( 3.9 ) — —

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

Amortization of net actuarial losses (gains) ( 0.1 ) 0.1 ( 0.1 ) — ( 0.7 ) ( 0.6 )

Total (income) expense $ ( 0.1 ) $ ( 0.8 ) $ ( 1.3 ) $ ( 1.2 ) $ 0.1 $ 0.4

The following table presents the components of our pension (income) and other postretirement benefits expense for the nine months ended August 31, 2024 and 2023 (in millions):

The following table presents the components of our pension (income) and other postretirement benefits expense for the three months ended February 28, 2025 and February 29, 2024 (in millions):

United States pension International pension Other postretirement benefits

6 unchanged sentences

Total (income) expense $ 0.4 $ ( 0.2 ) $ ( 0.8 ) $ ( 1.2 ) $ — $ 0.1

During the nine months ended August 31, 2024 and 2023, we contributed $ 5.2 million and $ 7.4 million, respectively, to our pension plans.

During the three months ended February 28, 2025 and February 29, 2024, we contributed $ 1.8 million to our pension plans.

Total contributions to our pension plans in fiscal year 2024 were $ 10.0 million.

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

The net aggregate amount of pension and other postretirement benefits income, excluding service cost components, was $( 1.9 ) million and $( 2.7 ) million for the three months ended August 31, 2024 and 2023, respectively.

For the nine months ended August 31, 2024 and 2023, the net aggregate amount of pension and other postretirement benefits income, excluding service cost components was $( 6.2 ) million and $( 8.1 ) million, respectively.

The net aggregate amount of pension and other postretirement benefits income, excluding service cost components, was $( 1.2 ) million and $( 2.0 ) million for the three months ended February 28, 2025 and February 29, 2024, 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,

2024 2023 2024 2023

Three months ended

February 28, 2025 February 29, 2024

Stock-based compensation expense $ 20.0 $ 11.7

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

Additionally, during the first quarter, approximately 380,000 stock option shares were granted.

The weighted-average grant-date fair value of each stock option granted in 2024 was $ 17.63 and in 2023 was $ 19.35 , each as calculated under a lattice pricing model.

Substantially all of the stock options and RSUs granted in 2024 and 2023 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 assumptions for our various stock compensation plans:

Risk-free interest rates 4.1% - 5.5% 3.5% - 4.9%

Dividend yield 2.3 % 1.9 %

Expected volatility 22.8 % 21.8 %

Expected lives (in years) 7.1 7.3

The following is a summary of our stock option activity for the nine months ended August 31, 2024 and 2023:

Our 2025 annual grant consisted primarily of RSUs and stock awarded under our LTPP and occurred in the first quarter.

Our annual grant of stock options and RSUs principally occurred in the second quarter of 2024.

Stock options were also granted during the first quarter of 2024.

Our annual grant of stock awarded under our LTPP occurred in the first quarter of 2024.

Substantially all the stock options and RSUs granted in 2025 and 2024 vest ratably over a three-year period or, if earlier, upon the holder’s retirement eligibility date.

Stock awarded under our LTPP vest ratably over a three-year period.

The following is a summary of our stock option activity for the three months ended February 28, 2025 and February 29, 2024:

(shares in millions) Number

7 unchanged sentences

Exercisable at end of the period 4.2 $ 70.40 3.9 $ 65.36

As of August 31, 2024, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 68.9 million and for options currently exercisable was $ 62.1 million.

The total intrinsic value of all options exercised during the nine months ended August 31, 2024 and 2023 was $ 8.4 million and $ 11.1 million, respectively.

The following is a summary of our RSU activity for the nine months ended August 31, 2024 and 2023:

As of February 28, 2025, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 73.4 million and for options currently exercisable was $ 63.5 million.

The total intrinsic value of all options exercised during the three months ended February 28, 2025 and February 29, 2024 was $ 3.3 million and $ 2.6 million, respectively.

The following is a summary of our RSU activity for the three months ended February 28, 2025 and February 29, 2024:

(shares in thousands) Number

7 unchanged sentences

Outstanding at end of period 1,049 $ 74.19 482 $ 76.71

The following is a summary of our price-vested stock options activity for the nine months ended August 31, 2024 and 2023:

(shares in thousands) Number

Shares Weighted-

Grant-Date Fair Value Number

Shares Weighted-

Outstanding at beginning of period 2,055 $ 9.40 2,107 $ 9.40

Forfeited — — ( 52 ) 9.40

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

The following is a summary of our LTPP activity for the nine months ended August 31, 2024 and 2023:

There were 2.1 million price-vested stock options with a weighted-average grant-date fair value of $ 9.40 outstanding as of February 28, 2025 and February 29, 2024.

The following is a summary of our LTPP activity for the three months ended February 28, 2025 and February 29, 2024:

(shares in thousands) Number

7 unchanged sentences

Outstanding at end of period 476 $ 79.97 475 $ 81.53

Income tax expense for the three months ended August 31, 2024 included $ 16.3 million of net discrete tax benefits consisting principally of the following:

(i) $ 5.5 million of tax benefit from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations, (ii) $ 5.5 million of tax benefit from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the effective settlement from conclusion of a tax examination, (iii) $ 8.3 million of tax benefits resulting from state tax matters, and related deferred taxes, (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) $ 4.6 million of tax expense associated with the adjustment of a valuation allowance due to changes in judgment about the realizability of the deferred tax asset.

Income tax expense for the nine months ended August 31, 2024 included $ 34.9 million of net discrete tax benefits consisting principally of the following:

(i) $ 19.4 million of tax benefits associated with the recognition of a deferred tax asset related to an international legal entity reorganization, (ii) $ 6.8 million of tax benefit from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the expiration of statutes of limitations, (iii) $ 5.5 million of tax benefit from the reversal of certain reserves for unrecognized tax benefits and related interest associated with the effective settlement from conclusion of a tax examination, (iv) $ 6.4 million of tax benefits resulting from state tax matters, and related deferred taxes, (v) $ 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 (vi) $ 4.6 million of tax expense associated with the adjustment of a valuation allowance due to changes in judgment about the realizability of the deferred tax asset.

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.

Other than the discrete tax benefits previously mentioned above and additions for current year tax positions, there we re no significant changes to unrecognized tax benefits during the nine months ended August 31, 2024.

As of August 31, 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.

Income tax expense for the three months ended February 28, 2025 included $ 5.2 million of net discrete tax benefits consisting principally of a $ 5.0 million net tax benefit resulting from the revaluation of deferred taxes associated with enacted legislation.

Income tax expense for the three months ended February 29, 2024 included $ 1.6 million of discrete tax expense consisting principally of $ 1.1 million of tax expense resulting from a state tax matter and $ 0.5 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 28, 2025.

As of February 28, 2025, 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,

2024 2023 2024 2023

Three months ended

February 28, 2025 February 29, 2024

Average shares outstanding – basic 268.3 268.4

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,

2024 2023 2024 2023

Three months ended

February 28, 2025 February 29, 2024

Anti-dilutive securities 2.6 3.5

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

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

2024 2023 2024 2023

Three months ended

February 28, 2025 February 29, 2024

Shares issued under stock options, RSUs, LTPP and employee stock purchase plans 0.4 0.3

Shares repurchased under the stock repurchase program and shares withheld for taxes under stock options, RSUs, and LTPP 0.3 0.1

As of August 31, 2024, $ 472.5 million remained of the $ 600 million share repurchase program authorization approved by our Board of Directors in November 2019.

As of February 28, 2025, $ 431 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, 2024 November 30, 2023

February 28, 2025 November 30, 2024

Foreign currency translation adjustment (1)

$ ( 426.6 ) $ ( 392.0 )

Unrealized gain (loss) on foreign currency exchange contracts ( 1.9 ) 0.8

Unrealized gain on foreign currency exchange contracts 3.7 2.1

Unamortized value of settled interest rate swaps ( 1.4 ) ( 1.6 )

1 unchanged sentence

Accumulated other comprehensive loss $ ( 524.6 ) $ ( 491.2 )

(1) During the nine months ended August 31, 2024, the foreign currency translation adjustment of accumulated other comprehensive loss decreased on a net basis by $ 3.1 million, inclusive of $ 4.4 million of unrealized losses associated with net investment hedges.

(1) During the three months ended February 28, 2025, the foreign currency translation adjustment of accumulated other comprehensive loss increased on a net basis by $ 34.6 million, inclusive of $ 8.1 million of unrealized gains associated with net investment hedges.

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

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

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

August 31, 2024 August 31, 2023 August 31, 2024 August 31, 2023

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

February 28, 2025 February 29, 2024

(Gains)/losses on cash flow hedges:

5 unchanged sentences

Amortization of pension and postretirement benefit adjustments:

Amortization of prior service costs (1)

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

Amortization of net actuarial (gains) (1)

8 unchanged sentences

The consumer and flavor solutions segments manufacture, market and distribute spices, herbs, seasoning mixes, condiments and other flavorful products throughout the world.

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.

Our consumer segment sells to retail channels, including grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce under the “McCormick” brand and a variety of brands around the world, including “French’s,” “Frank’s RedHot,” “Lawry’s,” “Zatarain’s,” “Simply Asia,” “Thai Kitchen,” “Ducros,” “Vahiné,” “Cholula,” “Schwartz,” “Club House,” “Kamis,” “DaQiao,” “La Drogheria,” “Stubb’s,” “OLD BAY,” and “Gourmet Garden.” Our flavor solutions segment sells to food manufacturers and the foodservice industry both directly and indirectly through distributors, with the exception of our 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.

5 unchanged sentences

(in millions)

Three months ended August 31, 2024

Net sales $ 937.4 $ 742.4 $ 1,679.8

Operating income excluding special charges 186.8 101.6 288.4

Income from unconsolidated operations 17.1 0.8 17.9

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

Nine months ended August 31, 2024

Three months ended February 28, 2025

Net sales $ 919.2 $ 686.3 $ 1,605.5

Operating income excluding special charges 512.4 249.6 762.0

Operating income 146.7 78.5 225.2

Income from unconsolidated operations 16.1 1.3 17.4

Nine months ended August 31, 2023

Three months ended February 29, 2024

Net sales $ 921.5 $ 681.2 $ 1,602.7

1 unchanged sentence

Income from unconsolidated operations 21.5 ( 0.2 ) 21.3

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

There were no special charges during the three months ending February 28, 2025.

A reconciliation of operating income excluding special charges to operating income for the three months ending February 29, 2024 is as follows:

Consumer Flavor Solutions Total

Three months ended August 31, 2024

Operating income excluding special charges $ 186.8 $ 101.6 $ 288.4

Special charges 0.5 1.4 1.9

Operating income $ 186.3 $ 100.2 $ 286.5

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

Nine months ended August 31, 2024

Operating income excluding special charges $ 512.4 $ 249.6 $ 762.0

Special charges 3.8 4.1 7.9

Operating income $ 508.6 $ 245.5 $ 754.1

Nine months ended August 31, 2023

(in millions)

Operating income excluding special charges $ 176.3 $ 61.4 $ 237.7

3 unchanged sentences

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 and nine months ended August 31, 2024 and 2023 (in millions):

The following table sets forth our net sales, by geographic area, for the three months ended February 28, 2025 and February 29, 2024 (in millions):

Americas EMEA APAC Total

Three months ended August 31, 2024

$ 1,209.3 $ 295.4 $ 175.1 $ 1,679.8

Three months ended August 31, 2023

1,203.3 304.4 177.0 1,684.7

Nine months ended August 31, 2024

Three months ended February 28, 2025

$ 1,118.3 $ 299.5 $ 187.7 $ 1,605.5

Nine months ended August 31, 2023

Three months ended February 29, 2024

1,117.1 306.7 178.9 1,602.7

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