MCCORMICK & CO INC 10-Q

ITEM 1. FINANCIAL STATEMENTS McCORMICK & COMPANY, INCORPORATED CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED) (in millions except per share amounts) Three months ended February 28, 2026 2025 Net sales $ 1,873.9 $ 1,605.5 Cost of goods sold 1,165.0 1,001.5 Gross profit 708.9 604.0 Selling, general and administrative expense 456.3 378.8 Special charges 25.1 — Operating income 227.5 225.2 Interest expense 47.3 48.5 Other income, net 4.8 9.8 Income from consolidated operations before income taxes 185.0 186.5 Income tax expense 48.7 41.6 Net income from consolidated operations 136.3 144.9 Income from unconsolidated operations 886.0 18.5 Net income 1,022.3 163.4 Net income attributable to noncontrolling interests 6.1 1.1 Net income attributable to McCormick & Company $ 1,016.2 $ 162.3 Earnings per share – basic $ 3.78 $ 0.60 Earnings per share – diluted $ 3.77 $ 0.60 Average shares outstanding – basic 268.8 268.3 Average shares outstanding – diluted 269.4 269.5 Cash dividends paid per share – voting and non-voting $ 0.48 $ 0.45 See notes to condensed consolidated financial statements (unaudited). 4 Table of Contents McCORMICK & COMPANY, INCORPORATED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) (in millions) Three months ended February 28, 2026 2025 Net income $ 1,022.3 $ 163.4 Other comprehensive income (loss): Currency translation adjustments 182.6 ( 33.9 ) Amounts reclassified into earnings upon acquisition of controlling interest 44.8 — Change in derivative financial instruments 28.1 2.3 Unrealized components of pension and other postretirement plans ( 1.9 ) ( 1.0 ) Tax expense ( 5.6 ) ( 1.0 ) Total other comprehensive income (loss), net of tax 248.0 ( 33.6 ) Total Comprehensive income $ 1,270.3 $ 129.8 Attributable to: Non-controlling interests 39.9 0.9 McCormick & Company shareholders' equity $ 1,230.4 $ 128.9 See notes to condensed consolidated financial statements (unaudited). 5 Table of Contents McCORMICK & COMPANY, INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEET (in millions) February 28, 2026 November 30, 2025 (unaudited) ASSETS Cash and cash equivalents $ 177.7 $ 95.9 Trade accounts receivable, net of allowances 829.2 628.9 Inventories, net Finished products 665.4 629.1 Raw materials and work-in-process 701.1 642.9 1,366.5 1,272.0 Prepaid expenses and other current assets 235.9 141.3 Total current assets 2,609.3 2,138.1 Property, plant and equipment, net 1,510.3 1,448.8 Goodwill 6,316.5 5,301.3 Intangible assets, net 4,961.6 3,293.1 Other long-term assets 948.6 1,019.1 Total assets $ 16,346.3 $ 13,200.4 LIABILITIES AND SHAREHOLDERS’ EQUITY Short-term borrowings $ 1,309.9 $ 381.4 Current portion of long-term debt 9.4 509.1 Trade accounts payable 1,391.6 1,259.4 Other accrued liabilities 731.2 912.3 Total current liabilities 3,442.1 3,062.2 Long-term debt 3,604.1 3,105.8 Deferred taxes 1,323.9 835.8 Other long-term liabilities 420.1 428.5 Total liabilities 8,790.2 7,432.3 Shareholders’ equity Common stock 583.4 582.4 Common stock non-voting 1,722.7 1,700.8 Retained earnings 4,823.1 3,816.4 Accumulated other comprehensive loss ( 148.9 ) ( 363.1 ) Total McCormick & Company shareholders’ equity 6,980.3 5,736.5 Non-controlling interests 575.8 31.6 Total shareholders’ equity 7,556.1 5,768.1 Total liabilities and shareholders’ equity $ 16,346.3 $ 13,200.4 See notes to condensed consolidated financial statements (unaudited). 6 Table of Contents McCORMICK & COMPANY, INCORPORATED CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED) (in millions) Three months ended February 28, 2026 2025 Operating activities Net income $ 1,022.3 $ 163.4 Adjustments to reconcile net income to net cash flow provided by operating activities: Depreciation and amortization 63.0 53.8 Stock-based compensation 20.7 20.0 Amortization of inventory fair value adjustments associated with acquisition 15.0 — Deferred income tax benefit ( 7.5 ) ( 9.2 ) Income from unconsolidated operations ( 19.2 ) ( 18.5 ) Gain on remeasurement of previously held equity interest ( 866.8 ) — Changes in operating assets and liabilities (net of effect of business acquired) Trade accounts receivable 18.7 65.2 Inventories 35.1 ( 11.7 ) Trade accounts payable ( 98.7 ) ( 70.9 ) Other assets and liabilities ( 145.6 ) ( 84.9 ) Dividends from unconsolidated affiliates 13.9 8.3 Net cash flow provided by operating activities 50.9 115.5 Investing activities Acquisition of business, net of cash acquired ( 729.9 ) — Capital expenditures (including software) ( 32.5 ) ( 37.1 ) Net cash flow used in investing activities ( 762.4 ) ( 37.1 ) Financing activities Short-term borrowings (repayments), net 928.5 ( 25.9 ) Long-term debt borrowings (net of debt issuance costs of $ 0.5 ) 497.4 — Long-term debt repayments ( 502.2 ) ( 11.5 ) Proceeds from exercised stock options 12.6 6.7 Taxes withheld and paid on employee stock awards ( 9.2 ) ( 6.7 ) Common stock acquired by purchase ( 10.9 ) ( 17.2 ) Dividends paid ( 128.9 ) ( 120.7 ) Other financing activities ( 5.6 ) 20.1 Net cash flow provided by (used in) financing activities 781.7 ( 155.2 ) Effect of exchange rate changes on cash and cash equivalents 11.6 ( 6.5 ) Increase (decrease) in cash and cash equivalents 81.8 ( 83.3 ) Cash and cash equivalents at beginning of period 95.9 186.1 Cash and cash equivalents at end of period $ 177.7 $ 102.8 See notes to condensed consolidated financial statements (unaudited). 7 Table of Contents McCORMICK & COMPANY, INCORPORATED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) (in millions) (millions) Common Stock Shares Common Stock Non-Voting Shares Common Stock Amount Retained Earnings Accumulated Other Comprehensive Loss Non-controlling Interests Total Shareholders’ Equity Three months ended February 28, 2026 Balance, November 30, 2025 14.9 253.5 $ 2,283.2 $ 3,816.4 $ ( 363.1 ) $ 31.6 $ 5,768.1 Net income attributable to McCormick & Company — 1,016.2 — — 1,016.2 Fair value of non-controlling interest recognized at acquisition — — 504.3 504.3 Net income attributable to non-controlling interests — — — 6.1 6.1 Other comprehensive income, net of tax — — 214.2 33.8 248.0 Stock-based compensation 20.7 — — — 20.7 Shares purchased and retired ( 0.3 ) — ( 11.8 ) ( 9.5 ) — — ( 21.3 ) Shares issued 0.6 — 14.0 — — — 14.0 Equal exchange ( 0.4 ) 0.4 — — — — — Balance, February 28, 2026 14.8 253.9 $ 2,306.1 $ 4,823.1 $ ( 148.9 ) $ 575.8 $ 7,556.1 Three months ended February 28, 2025 Balance, November 30, 2024 15.7 252.3 $ 2,237.2 $ 3,545.0 $ ( 491.2 ) $ 25.8 $ 5,316.8 Net income attributable to McCormick & Company — 162.3 — — 162.3 Net income attributable to non-controlling interests — — — 1.1 1.1 Other comprehensive loss, net of tax — — ( 33.4 ) ( 0.2 ) ( 33.6 ) Stock-based compensation 20.0 — — — 20.0 Shares purchased and retired ( 0.3 ) — ( 11.8 ) ( 13.0 ) — — ( 24.8 ) Shares issued 0.3 0.1 7.9 — — — 7.9 Equal exchange ( 0.2 ) 0.2 — — — — — Balance, February 28, 2025 15.5 252.6 $ 2,253.3 $ 3,694.3 $ ( 524.6 ) $ 26.7 $ 5,449.7 See notes to condensed consolidated financial statements (unaudited). 8 Table of Contents McCORMICK & COMPANY, INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by United States Generally Accepted Accounting Principles (GAAP) for complete financial statements. 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. Certain prior period amounts have been reclassified to conform with the current period presentation. Net income attributable to noncontrolling interest is presented separately on the consolidated income statement. Amounts from prior periods previously included in income from unconsolidated operations are reflected in net income attributable to noncontrolling interest. The results of consolidated operations for the three-month period ended February 28, 2026 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. 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, 2025. On January 2, 2026, we completed the acquisition of an additional 25 % ownership interest in McCormick de Mexico from Grupo Herdez, which increased our ownership to a 75 % controlling interest. The results of McCormick de Mexico’s operations have been fully consolidated in our financial statements from the date the controlling interest was acquired, which is more fully described in Note 2. Accounts Payable - Supplier Finance Program As more fully described in our Annual Report on Form 10-K for the year ended November 30, 2025, 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 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, 2026 and November 30, 2025, the amounts due to suppliers participating in the SCF program and included in trade accounts payable were approximately $ 484.3 million and $ 332.1 million, respectively. Accounting Pronouncements Recently Adopted In November 2023, the FASB issued ASU No. 2023-07: 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 position and title of the chief operating decision maker. The guidance also requires interim disclosures related to reportable segment profit or loss that had previously only been disclosed annually. The new standard requirements were effective for our annual period ending November 30, 2025, and are effective for interim periods of our fiscal year ending November 30, 2026. We include significant segment expenses and the required disclosure about our chief operating decision maker in Note 11. The adoption of the new standard did not have a material impact on our consolidated financial statements. In November 2025, the FASB issued ASU No. 2025-09: Derivatives and Hedging (Topic 815), Hedge Accounting Improvements that better aligns the hedge accounting model with risk management activities. The guidance is effective for our fiscal year ending November 30, 2028, with early adoption permitted. We elected to adopt the guidance effective December 1, 2025, and applied the amendments prospectively. We have designated all hedge positions as of December 1, 2025 under the updated guidance, which did not have a material impact on our consolidated financial statements. 9 Table of Contents Recently Issued Accounting Pronouncements — Pending Adoption In December 2023, the FASB issued ASU No. 2023-09: 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 adoption of the new standard does not affect recognition or measurement in our consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03: Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) 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. In September 2025, the FASB issued ASU No. 2025-06: Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40): Targeted Improvements to the Accounting for Internal-Use Software that changes the guidance on when to begin capitalizing costs to develop internal-use software. The guidance does not change the types of costs that are capitalizable. The guidance permits prospective adoption for our fiscal year ending November 30, 2028. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements. 2. ACQUISITIONS Acquisitions are part of our strategy to increase sales and profits. The acquisition described below was recorded as a business combination with the excess of total consideration over the estimated fair value of assets acquired and liabilities assumed recorded as goodwill. McCormick de Mexico On January 2, 2026, we completed the acquisition of an additional 25 % ownership interest in McCormick de Mexico from Grupo Herdez, for a purchase price of $ 750 million, which increases our ownership to a 75 % controlling interest. McCormick de Mexico is a prominent food company in Mexico, with a broad portfolio, including mayonnaise, spices, marmalades, mustard, hot sauce, and tea, sold under McCormick brands. We believe the acquisition creates opportunities for further growth in the Mexican market and provides a strategic platform for further expansion in Latin America. The purchase of the additional 25 % ownership interest was funded through a combination of cash on hand and commercial paper borrowings. Prior to the acquisition of the additional ownership interest, we accounted for our 50 % ownership interest in McCormick de Mexico as an equity method investment and recorded our proportional share of earnings as income from unconsolidated operations. The acquisition of the additional ownership interest resulted in the consolidation of McCormick de Mexico's financial results, which have been included as a component of our consumer and flavor solutions segments in our financial statements from the date of acquisition. The earnings attributable to the 25 % ownership retained by Grupo Herdez are recorded as net income attributable to noncontrolling interests. As a result of the consolidation, the carrying value of our previously held 50 % ownership interest was remeasured to fair value resulting in a pre-tax and after-tax gain of $ 866.8 million which was recognized in Income from unconsolidated operations. The gain represents the remeasurement of our previously held 50 % ownership interest over its carrying value at the date of acquisition, less $ 44.8 million previously recorded in Accumulated other comprehensive income primarily related to foreign currency translation adjustments. The fair value of the previously held equity interest was estimated based on a valuation derived from estimated fair value assessments and assumptions. This valuation was based on the implied value derived from the consideration transferred for the additional 25 % ownership interest, adjusted for the control premium, and was supported by a market approach as well as an overall enterprise level discounted cash flow. 10 Table of Contents The following is a summary of the total consideration for the acquisition of the additional ownership interest in McCormick de Mexico (in millions): Cash paid $ 750.0 Effective settlement of preexisting amounts due to McCormick de Mexico ( 6.7 ) Fair value of previously held equity interest 1,008.0 Total consideration $ 1,751.3 The total consideration for the additional ownership interest in McCormick de Mexico was allocated to the underlying assets and liabilities based upon their preliminary estimated fair values at the date of acquisition. We estimated the fair values based on independent valuations, discounted cash flow analyses, quoted market prices, and estimates made by management, which are subject to finalization. The following is a summary of the preliminary allocation of the total consideration which we expect to be finalized during the fiscal year ending November 30, 2026 (in millions): Cash acquired $ 20.1 Trade accounts receivable 195.9 Inventories 123.4 Other current assets 36.5 Property, plant and equipment 53.0 Intangible assets 1,600.0 Goodwill 942.0 Other long-term assets 11.9 Trade accounts payable ( 208.2 ) Other current liabilities ( 47.8 ) Deferred tax liabilities ( 468.3 ) Other long-term liabilities ( 2.9 ) Fair value of noncontrolling interest ( 504.3 ) Net assets acquired $ 1,751.3 We determined the carrying values of cash, trade receivables and payables, as well as certain other current and non-current assets and liabilities, represented the fair values. The property, plant and equipment fair value was preliminarily estimated using the replacement cost method. Inventories acquired consist of raw materials and finished goods inventory that were valued using a net realizable value approach, which resulted in a step-up of $ 15.0 million that was recognized in cost of goods sold as the related inventory was sold. Intangible assets include a reacquired right indefinite-lived intangible asset with an estimated fair value of $ 1,470.0 million and customer relationships with a weighted-average life of 15 years and an estimated fair value of $ 130.0 million. The reacquired right represents the value of McCormick's reacquisition of contractual rights previously granted to Grupo Herdez as part of the joint venture agreement giving McCormick de Mexico the perpetual and exclusive licensing right to sell specified McCormick branded products in Mexico. This right is expected to contribute cash flows for the foreseeable future and does not have substantive limiting factors. The fair value of the reacquired right was estimated using the multi-period excess earnings method of the income approach. The fair value of customer relationships was preliminarily estimated using the distributor method, a variation of the multi-purpose excess earnings method that uses distributor-based inputs for margins and contributory asset charges. Some of the more significant assumptions inherent in developing the estimated fair values included the estimated annual net cash flows for each intangible asset (including net sales, operating profit margin, and working capital/contributory asset charges), the discount rate that appropriately reflects the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends, as well as other factors. The assumptions used in the financial forecasts were determined using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management plans, and market comparables. 11 Table of Contents Goodwill, which represents the value associated with the expected synergies, acquired workforce and future growth opportunities anticipated to be realized as a combined company, is not deductible for tax purposes. Goodwill will be allocated to our consumer and flavor solutions segments when the allocation of the consideration to the acquired net assets is finalized. Deferred tax liabilities primarily represent the expected future tax consequences of temporary differences between the fair value of the assets acquired and liabilities assumed and their tax bases. The fair value of the noncontrolling interest was estimated based on a valuation derived from estimated fair value assessments and assumptions. This valuation was based on the implied value derived from the consideration transferred for the additional 25 % ownership interest, adjusted for the control premium, and was supported by a market approach as well as an overall enterprise level discounted cash flow. The Company transacts in the ordinary course of business with Grupo Herdez, a related party that owns a 25 % noncontrolling interest in McCormick de Mexico. Contractual arrangements with Grupo Herdez include payments from McCormick de Mexico for (i) supervision and strategic management services based on a percentage of net sales of products registered under the McCormick brand and (ii) exclusive distribution services, including invoicing to customers, based on a percentage of net sales. For the three months ended February 28, 2026, McCormick de Mexico incurred expenses of $ 32.7 million related to transactions with Grupo Herdez. As of February 28, 2026, accounts receivable included $ 228.8 million due from Grupo Herdez and accounts payable included $ 26.2 million due to Grupo Herdez. Transaction and integration costs of $ 22.9 million were incurred during the three months ended February 28, 2026, of which $ 15.0 million were associated with the step-up of acquired inventory recognized in cost of goods sold. For the three months ended February 28, 2026 McCormick de Mexico added $ 198.9 million to our net sales. Supplemental Pro Forma Information The following table presents unaudited supplemental pro forma consolidated net sales as if the McCormick de Mexico acquisition had occurred on December 1, 2024. Three months ended February 28, 2026 February 28, 2025 Net sales $ 1,960.5 $ 1,799.3 The unaudited supplemental pro forma consolidated net sales gives effect to actual revenues prior to the McCormick de Mexico acquisition, adjusted to exclude the elimination of intercompany transactions. Other than the impact of the gain on remeasurement of previously held equity interest and transaction and integration costs (as discussed above), supplemental pro forma net earnings, assuming the McCormick de Mexico acquisition had occurred on December 1, 2024, would not be materially different from the results reported during the three months ended February 28, 2025 and 2026. The unaudited pro forma information has been prepared for comparative purposes only, in accordance with the acquisition method of accounting, and is not necessarily indicative of the results of operations that would have occurred if the McCormick de Mexico acquisition had been completed on the date indicated, nor is it indicative of our future operating results. 3. SPECIAL CHARGES The following is a summary of special charges, including transaction and integration expenses, recognized in the three months ended February 28, 2026 and February 28, 2025 (in millions): Three months ended February 28, 2026 February 28, 2025 Employee severance and related benefits $ 16.2 $ — Other costs 1.0 — Transaction and integration expenses 7.9 — Special charges $ 25.1 $ — Inventory step-up included in cost of goods sold 15.0 — Total special charges $ 40.1 $ — 12 Table of Contents The following is a summary of special charges, including transaction and integration expenses, by business segment for the three months ended February 28, 2026 and 2025 (in millions): Three months ended February 28, 2026 February 28, 2025 Consumer segment $ 32.7 $ — Flavor Solutions segment 7.4 — Total special charges $ 40.1 $ — 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 associated with certain actions undertaken to reduce fixed costs, simplify or improve processes, and enhance our competitiveness. 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 Chairman, 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. During the three months ended February 28, 2026, we recorded $ 16.2 million of employee severance and related benefit costs related to global selling, general and administrative streamlining actions approved by our Management Committee, and $ 1.0 million associated with other actions. As of February 28, 2026 and November 30, 2025, reserves associated with special charges of $ 16.2 million and $ 4.7 million, respectively, are included in "Other accrued liabilities" in our consolidated balance sheet. Transaction and Integration Expenses During the three months ended February 28, 2026, we recorded $ 22.9 million of transaction and integration expenses related to our acquisition of McCormick de Mexico, as more fully discussed in Note 2, which includes the step-up of acquired inventory recognized in cost of goods sold of $ 15.0 million and transaction and integration costs of $ 7.9 million recognized in special charges. 13 Table of Contents 4. FINANCING ARRANGEMENTS AND FINANCIAL INSTRUMENTS Debt and Credit Facilities In January 2026, we entered into a 364-day $ 500 million revolving credit facility, which will expire in January 2027. The current pricing for the 364-day credit facility, on a fully drawn basis, is Term Secured Overnight Financing Rate (SOFR) plus 1.125 %. The pricing of the credit facility is based on a credit rating that contains a fully drawn maximum pricing of the credit facility equal to Term SOFR plus 1.50 %. The provisions of the revolving credit facility restrict subsidiary indebtedness and require us to maintain a minimum interest coverage ratio, consistent with our five-year $ 2.0 billion revolving credit facility (the five-year facility). We do not expect this covenant will limit our access to those facilities for the foreseeable future. In February 2026, we issued $ 500 million aggregate principal amount of 4.150 % unsecured senior notes due 2029. Interest is payable semiannually in February and August of each year, beginning in August 2026. The net proceeds received from the issuances of these notes of $ 497.1 million were used to repay a portion of the outstanding $ 500 million, 0.90 % notes due in February 2026. Derivative Financial Instruments We use derivative financial instruments to enhance our ability to manage risk, including foreign currency, net investment, commodity, and interest rate exposures, which exist as part of our ongoing business operations. We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instrument. We are not a party to master netting arrangements, and we do not offset the fair value of derivative contracts with the same counterparty in our financial statement disclosures. The use of derivative financial instruments is monitored through regular communication with senior management and the use of written guidelines. Foreign currency exchange risk. We are potentially exposed to foreign currency fluctuations affecting net investments in subsidiaries, transactions (both third-party and intercompany), and earnings denominated in foreign currencies. We assess foreign currency risk based on transactional cash flows and translational volatility and may enter into forward contract and currency swaps with highly-rated financial institutions to reduce fluctuations in the long or short currency positions. The following is a summary of the notional amounts of outstanding foreign currency exchange contracts as of February 28, 2026 and November 30, 2025 (in millions): February 28, 2026 November 30, 2025 Fair value hedges $ 888.4 $ 877.3 Cash flow hedges 160.4 140.9 Foreign exchange contracts not designated as hedging instruments 72.7 — Total $ 1,121.5 $ 1,018.2 As a matter of policy, all cash flow hedges are designated for hedge accounting on the trade date of the derivative. However, certain cash flow hedges are de-designated at the anticipated transaction date and subsequently marked-to-market through earnings until maturity. For the three months ended February 28, 2026, derivatives not designated as hedging instruments consisted primarily of foreign exchange contracts. Foreign exchange contracts not designated as hedging instruments resulted in a net loss of $ 2.7 million, recognized in cost of goods sold, reflecting the effect of exchange rate movements associated with purchases denominated in U.S. dollars. The fair value and cash flow hedges were designated as hedges of foreign currency denominated assets or liabilities or hedges of anticipated purchases denominated in a foreign currency. Hedge ineffectiveness was not material. All foreign currency exchange contracts generally have durations of less than 18 months. At February 28, 2026, $ 278.0 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. 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. dollars by operating units outside the U.S.) are considered cash flow hedges. The gains and losses on these contracts are deferred in accumulated other comprehensive income until the hedged item is recognized in cost of goods sold, at which time the net amount deferred in accumulated other comprehensive income is also recognized in cost of goods sold. Contracts which are not designated as hedging instruments are marked-to-market, with changes in unrealized gain or loss recorded in earnings. 14 Table of Contents We also utilize cross currency interest rate swap contracts that are designated as net investment hedges. Any gains or losses on net investment hedges are included in foreign currency translation adjustments in accumulated other comprehensive loss. Net interest accruals excluded from the assessment of hedge effectiveness are included in earnings as interest expense. Interest rate risk. We finance a portion of our operations with both fixed and variable rate debt instruments, principally commercial paper, notes and bank loans. We utilize interest rate derivative contracts, including interest rate swap agreements, to minimize worldwide financing costs and to achieve a desired mix of variable and fixed rate debt. Commodity price risk . We purchase certain raw materials which are subject to price volatility caused by weather, market conditions, growing and harvesting conditions, governmental actions, and other factors beyond our control. While future movements of raw material costs are uncertain, we respond to this volatility in a number of ways, including strategic raw material purchases, purchases of raw material for future delivery, and customer price adjustments. With the exception of soybean oil, we generally do not use derivatives to manage price volatility. We utilize commodity contracts, including commodity futures, options, and over-the counter (OTC) swaps to manage price risk for soybean oil. These commodity contracts are designated as cash flow hedges. Generally, we hedge a portion of our anticipated consumption of soybean oil inputs for periods of up to 24 months. 15 Table of Contents The following table discloses the notional amount and fair values of derivative instruments on our balance sheet (in millions): Asset Derivatives Liability Derivatives Balance sheet location Notional amount Fair value Balance sheet location Notional amount Fair value As of February 28, 2026 Derivatives designated as hedging instruments Interest rate contracts Other current assets / Other long-term assets $ — $ — Other accrued liabilities / Other long-term liabilities $ 500.0 $ 18.6 Foreign exchange contracts Other current assets 597.0 9.5 Other accrued liabilities 451.8 6.9 Cross currency contracts Other current assets / Other long-term assets 247.9 3.8 Other accrued liabilities / Other long-term liabilities 782.5 23.2 Commodity contracts Other current assets / Other long-term assets 240.7 34.3 Other accrued liabilities / Other long-term liabilities 103.4 7.5 Derivatives not designated as hedging instruments Foreign exchange contracts Other current assets 8.6 0.1 Other accrued liabilities 64.1 6.2 Total $ 47.7 $ 62.4 As of November 30, 2025 Derivatives designated as hedging instruments Interest rate contracts Other current assets / Other long-term assets $ — $ — Other accrued liabilities / Other long-term liabilities $ 500.0 $ 20.8 Foreign exchange contracts Other current assets 894.6 6.5 Other accrued liabilities 123.6 0.7 Cross currency contracts Other current assets / Other long-term assets 500.8 8.5 Other long-term liabilities 511.1 18.1 Total $ 15.0 $ 39.6 16 Table of Contents The following tables disclose the impact of derivative instruments on our other comprehensive income (OCI), accumulated other comprehensive income (AOCI), and our consolidated income statement for the three months ended February 28, 2026 and 2025 (in millions): Fair Value Hedges Derivative Income statement location Expense Three months ended February 28, 2026 Three months ended February 28, 2025 Interest rate contracts Interest expense $ 2.0 $ 3.7 Gain (loss) recognized in income Income statement location Loss recognized in income Derivative Three months ended February 28, 2026 Three months ended February 28, 2025 Hedged item Three months ended February 28, 2026 Three months ended February 28, 2025 Foreign exchange contracts Other income, net $ 0.9 $ ( 0.6 ) Intercompany loans Other income, net $ ( 1.7 ) $ ( 0.6 ) Cash Flow Hedges Gain (loss) recognized in OCI Income statement location Gain (loss) reclassified from AOCI Derivative Three months ended February 28, 2026 Three months ended February 28, 2025 Three months ended February 28, 2026 Three months ended February 28, 2025 Interest rate contracts $ — $ — Interest expense $ ( 0.1 ) $ ( 0.1 ) Foreign exchange contracts ( 1.8 ) ( 0.8 ) Cost of goods sold 0.6 ( 0.1 ) Commodity contracts 33.6 — Cost of goods sold ( 1.5 ) — Total $ 31.8 $ ( 0.8 ) $ ( 1.0 ) $ ( 0.2 ) As of February 28, 2026, the net amount of accumulated other comprehensive loss associated with all cash flow, settled interest rate cash flow hedge derivatives, and commodity contracts expected to be reclassified in the next 12 months is a $ 1.7 million decrease to earnings. Net Investment Hedges Gain (loss) recognized in OCI Income statement location Gain excluded from the assessment of hedge effectiveness Derivative Three months ended February 28, 2026 Three months ended February 28, 2025 Three months ended February 28, 2026 Three months ended February 28, 2025 Cross currency contracts $ ( 9.4 ) $ 8.1 Interest expense $ 2.0 $ 2.5 For all net investment hedges, no amounts have been reclassified out of accumulated other comprehensive loss. The amounts noted in the tables above for OCI do not include any adjustments for the impact of deferred income taxes. 17 Table of Contents Accounts Receivable Sale Program We maintain a non recourse 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. We account for the transfer of receivables as a sale at the point control is transferred and remove the sold receivables from our condensed consolidated balance sheet. The proceeds from the sales of receivables are included in cash from operating activities in the consolidated statement of cash flows. Under the terms of the arrangement, we act as the collecting agent on behalf of the financial institution for sold receivables of $ 390.0 million and $ 430.0 million as of February 28, 2026 and November 30, 2025, respectively. As collecting agent, we had $ 39.8 million and $ 45.4 million of cash collected that was not yet remitted to the third-party financial institution as of February 28, 2026 and November 30, 2025, 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. The incremental costs of factoring receivables under this arrangement were insignificant for the three months ended February 28, 2026 and 2025. 5. FAIR VALUE MEASUREMENTS Fair value can be measured using valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. 18 Table of Contents At February 28, 2026 and November 30, 2025, 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): February 28, 2026 Fair Value Level 1 Level 2 Assets Cash and cash equivalents $ 177.7 $ 177.7 $ — Insurance contracts 127.7 — 127.7 Bonds and money market fund 7.5 7.5 — Foreign currency derivatives 9.6 — 9.6 Cross currency contracts 3.8 — 3.8 Commodity contracts 34.3 22.6 11.7 Total $ 360.6 $ 207.8 $ 152.8 Liabilities Foreign currency derivatives $ 13.1 $ — $ 13.1 Interest rate derivatives 18.6 — 18.6 Cross currency contracts 23.2 — 23.2 Commodity contracts 7.5 7.5 — Total $ 62.4 $ 7.5 $ 54.9 November 30, 2025 Fair Value Level 1 Level 2 Assets Cash and cash equivalents $ 95.9 $ 95.9 $ — Insurance contracts 131.0 — 131.0 Bonds and money market fund 1.9 1.9 — Foreign currency derivatives 6.5 — 6.5 Cross currency contracts 8.5 — 8.5 Total $ 243.8 $ 97.8 $ 146.0 Liabilities Foreign currency derivatives $ 0.7 $ — $ 0.7 Interest rate derivatives 20.8 — 20.8 Cross currency contracts 18.1 — 18.1 Total $ 39.6 $ — $ 39.6 At February 28, 2026 and November 30, 2025, the carrying amounts of cash, interest rate derivatives, foreign currency derivatives, cross currency contracts, commodity contracts, insurance contracts, and bonds and money market fund investments were equal to their respective fair values. Because of their short-term nature, the amounts reported in the balance sheet for cash and cash equivalents, receivables, short-term borrowings, and trade accounts payable approximate fair value. Investments in affiliates are not readily marketable, and it is not practicable to estimate their fair value. Insurance contracts, bonds, and money market fund investments are comprised of fixed income and equity securities held for certain non-qualified U.S. employee benefit plans and are stated at fair value on the balance sheet. The fair values of insurance contracts and bonds and money market fund investments are based upon the underlying values of the securities in which they are invested and are from quoted market prices from various stock and bond exchanges for similar type assets. The fair values for interest rate derivatives, foreign currency derivatives, cross currency contracts, and commodity contracts are based on values for similar instruments using models with market-based inputs. 19 Table of Contents The following table sets forth the carrying amounts and fair values of our long-term debt including the current portion thereof (in millions): February 28, 2026 November 30, 2025 Carrying amount $ 3,613.5 $ 3,614.9 Level 1 valuation techniques $ 3,432.6 $ 3,401.1 Level 2 valuation techniques 102.9 104.8 Total fair value $ 3,535.5 $ 3,505.9 The fair value for Level 2 long-term debt is determined by using quoted prices for similar debt instruments. 6. EMPLOYEE BENEFIT AND RETIREMENT PLANS We sponsor defined benefit pension plans in the U.S. and certain foreign locations. 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. We also provide postretirement medical and life insurance benefits to certain U.S. employees and retirees. We previously froze the accrual of future benefits under certain defined benefit pension plans in the U.S. and certain foreign locations. 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 February 28, 2026 and 2025 (in millions): United States pension International pension Other postretirement benefits 2026 2025 2026 2025 2026 2025 Service cost $ 0.4 $ 0.4 $ 0.2 $ 0.2 $ 0.2 $ 0.2 Interest costs 8.9 8.9 2.6 2.5 0.5 0.5 Expected return on plan assets ( 9.2 ) ( 9.3 ) ( 3.7 ) ( 3.5 ) — — Amortization of prior service costs 0.1 0.1 — — — ( 0.1 ) Amortization of net actuarial losses (gains) 0.2 0.3 — — ( 0.6 ) ( 0.6 ) Total (income) expense $ 0.4 $ 0.4 $ ( 0.9 ) $ ( 0.8 ) $ 0.1 $ — During the three months ended February 28, 2026 and 2025, we contributed $ 2.1 million and $ 1.8 million, respectively, to our pension plans. Total contributions to our pension plans in fiscal year 2025 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 $( 1.2 ) million and $( 1.2 ) million for the three months ended February 28, 2026 and 2025, respectively. 7. STOCK-BASED COMPENSATION We have three types of stock-based compensation awards: restricted stock units (RSUs), stock options, and company stock awarded as part of our long-term performance plan (LTPP). The following table sets forth the stock-based compensation expense recorded in selling, general and administrative (SG&A) expense (in millions): Three months ended 2026 2025 Stock-based compensation expense $ 20.7 $ 20.0 Our 2026 annual grant consisted of RSUs and stock awarded under our LTPP and occurred in the first quarter, similar to the 2025 annual grant. Substantially all the RSUs granted in 2026 and 2025 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. 20 Table of Contents The following is a summary of our stock option activity for the three months ended February 28, 2026 and 2025: 2026 2025 (shares in millions) Number of Shares Weighted- Average Exercise Price Number of Shares Weighted- Average Exercise Price Outstanding at beginning of period 5.5 $ 73.92 6.1 $ 72.25 Exercised ( 0.2 ) 49.82 ( 0.1 ) 49.11 Forfeited — 83.10 ( 0.1 ) 84.55 Outstanding at end of the period 5.3 $ 75.03 5.9 $ 72.65 Exercisable at end of the period 4.4 $ 74.84 4.2 $ 70.40 As of February 28, 2026, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $ 22.8 million and for options currently exercisable was $ 22.2 million. The total intrinsic value of all options exercised during the three months ended February 28, 2026 and February 28, 2025 was $ 4.6 million and $ 3.3 million, respectively. The following is a summary of our RSU activity for the three months ended February 28, 2026 and 2025: 2026 2025 (shares in thousands) Number of Shares Weighted- Average Grant-Date Fair Value Number of Shares Weighted- Average Grant-Date Fair Value Outstanding at beginning of period 771 $ 73.11 533 $ 73.68 Granted 608 63.62 523 74.74 Vested ( 171 ) 74.57 ( 1 ) 77.63 Forfeited ( 9 ) 73.19 ( 6 ) 75.92 Outstanding at end of period 1,199 $ 68.09 1,049 $ 74.19 The following is a summary of our LTPP activity for the three months ended February 28, 2026 and 2025: 2026 2025 (shares in thousands) Number of Shares Weighted- Average Grant-Date Fair Value Number of Shares Weighted- Average Grant-Date Fair Value Outstanding at beginning of period 523 $ 80.88 539 $ 83.45 Granted 226 65.02 177 86.92 Vested ( 177 ) 89.00 ( 206 ) 95.00 Forfeited ( 6 ) 81.03 ( 34 ) 79.98 Outstanding at end of period 566 $ 72.02 476 $ 79.97 8. INCOME TAXES Income tax expense for the three months ended February 28, 2026 was not impacted by discrete tax items. Income tax expense for the three months ended February 28, 2025 included $ 5.2 million of net discrete tax benefits consisting principally of $ 5.0 million net tax benefit resulting from the revaluation of deferred taxes associated with enacted legislation. Other than additions for current year tax positions, there we re no significant changes to unrecognized tax benefits during the three months ended February 28, 2026. As of February 28, 2026, 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. 21 Table of Contents 9. CAPITAL STOCK AND EARNINGS PER SHARE The following table sets forth the reconciliation of average shares outstanding (in millions): Three months ended February 28, 2026 February 28, 2025 Average shares outstanding – basic 268.8 268.3 Effect of dilutive securities: Stock options/RSUs/LTPP 0.6 1.2 Average shares outstanding – diluted 269.4 269.5 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 February 28, 2026 February 28, 2025 Anti-dilutive securities 3.9 2.6 The following table sets forth common stock activity (in millions): Three months ended February 28, 2026 2025 Shares issued under stock options, RSUs, LTPP, and employee stock purchase plans 0.6 0.4 Shares repurchased under the stock repurchase program and shares withheld for taxes under stock options, RSUs, and LTPP 0.3 0.3 As of February 28, 2026, $ 403 million remained of the $ 600 million share repurchase program authorization approved by our Board of Directors in November 2019. 10. ACCUMULATED OTHER COMPREHENSIVE LOSS ATTRIBUTABLE TO McCORMICK The following table sets forth the components of accumulated other comprehensive income (loss), net of tax, where applicable (in millions): February 28, 2026 November 30, 2025 Foreign currency translation adjustment (1) $ ( 73.5 ) $ ( 269.9 ) Unrealized net gain (loss) on cash flow hedges (2) 15.9 ( 3.2 ) Unamortized value of settled interest rate swaps ( 1.1 ) ( 1.1 ) Pension and other postretirement costs ( 90.2 ) ( 88.9 ) Accumulated other comprehensive loss attributable to McCormick $ ( 148.9 ) $ ( 363.1 ) (1) During the three months ended February 28, 2026, the foreign currency translation adjustment of accumulated other comprehensive loss decreased on a net basis by $ 196.4 million, inclusive of $ 9.4 million of unrealized losses associated with net investment hedges and $ 40.6 million of foreign currency translation loss associated with our prior 50 % ownership interest in McCormick de Mexico that was reclassified from accumulated other comprehensive loss as more fully described in Note 2. Net investment hedges are more fully described in Note 4. (2) During the three months ended February 28, 2026, the unrealized net gain on cash flow hedges increased on a net basis by $ 19.1 million, inclusive of $ 4.2 million unrealized net loss on cash flow hedges associated with our prior 50 % ownership interest in McCormick de Mexico that was reclassified from accumulated other comprehensive loss as more fully described in Note 2. Cash flow hedges are more fully described in Note 4. 22 Table of Contents The following table sets forth the amounts reclassified from accumulated other comprehensive income (loss) and into consolidated net income (in millions): Three months ended Affected Line Items in the Condensed Consolidated Income Statement February 28, 2026 February 28, 2025 (Gains)/losses on cash flow hedges: Interest rate derivatives $ ( 0.1 ) $ 0.1 Interest expense Foreign exchange contracts 0.6 0.1 Cost of goods sold Commodity contracts ( 1.5 ) — Cost of goods sold Total before tax ( 1.0 ) 0.2 Tax effect 0.3 — Income tax expense Net, after tax $ ( 0.7 ) $ 0.2 Amortization of pension and postretirement benefit adjustments: Amortization of prior service costs (1) $ 0.1 $ — Other income, net Amortization of net actuarial (gains) (1) $ ( 0.4 ) $ ( 0.3 ) Other income, net Total before tax ( 0.3 ) ( 0.3 ) Tax effect 0.1 0.1 Income tax expense Net, after tax $ ( 0.2 ) $ ( 0.2 ) Reclassification as a result of McCormick de Mexico acquisition: Amounts reclassified into earnings upon acquisition of controlling interest $ 44.8 $ — Income from unconsolidated operations Total before tax 44.8 — Tax effect — — Income tax expense Net, after tax $ 44.8 $ — (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 6 for additional details). 11. BUSINESS SEGMENTS We operate in two business segments: Consumer and Flavor Solutions. The Consumer and Flavor Solutions segments manufacture, market, and distribute spices, herbs, seasoning mixes, condiments, and other flavorful products throughout the world. 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. Our CODM is our Chairman, President & Chief Executive Officer. Our CODM uses operating income excluding special charges and transaction and integration expenses related to our acquisitions to manage segment performance and allocate resources across segments and considers variances of actual performance to our annual budget and periodic forecasts as well as year over year performance when making decisions. Special charges and transaction and integration expenses are excluded from operating income in our internal reporting to the CODM as this activity is managed separately from the business segments. Activity related to special charges, including transaction and integration expenses, is described in Note 3. Transaction and integration expenses include the amortization of the acquisition-date fair value adjustment of inventories included in cost of goods sold, costs directly associated with that acquisition and costs associated with integrating the businesses. We also exclude the gain on remeasurement of previously held equity interest from operating income in our internal reporting to the CODM, which was recorded upon consolidation of McCormick de Mexico during the first quarter of 2026 and is described in more detail in Note 2. 23 Table of Contents 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. As a result, jointly utilized assets, including fixed assets, and depreciation and amortization expense are not maintained by individual segment. Depreciation and amortization expense is allocated to the segments except for amounts that are recognized in interest. Because of manufacturing integration for certain products within the segments, products are not sold from one segment to another but rather inventory is transferred at cost. Inter-segment transfers are not material. Consumer Flavor Solutions Total (in millions) Three months ended February 28, 2026 Net sales $ 1,145.0 $ 728.9 $ 1,873.9 Cost of goods sold excluding special charges 638.8 511.2 1,150.0 SG&A expense 326.6 129.7 456.3 Operating income excluding special charges 179.6 88.0 267.6 Income from unconsolidated operations excluding gain on remeasurement of previously held equity interest 15.8 3.4 19.2 Three months ended February 28, 2025 Net sales $ 919.2 $ 686.3 $ 1,605.5 Cost of goods sold 513.8 487.7 1,001.5 SG&A expense 258.7 120.1 378.8 Operating income 146.7 78.5 225.2 Income from unconsolidated operations 15.9 2.6 18.5 24 Table of Contents A reconciliation of cost of goods sold excluding special charges, operating income excluding special charges and income from unconsolidated operations excluding gain on remeasurement of previously held equity interest to cost of goods sold, operating income, and income from unconsolidated operations or the three months ended February 28, 2026 is as follows (in millions): Consumer Flavor Solutions Total Three months ended February 28, 2026 Cost of goods sold excluding special charges $ 638.8 $ 511.2 $ 1,150.0 Special charges 13.5 1.5 15.0 Cost of goods sold $ 652.3 $ 512.7 $ 1,165.0 Operating income excluding special charges $ 179.6 $ 88.0 $ 267.6 Less: Special charges 32.7 7.4 40.1 Operating income $ 146.9 $ 80.6 $ 227.5 Income from unconsolidated operations excluding gain on remeasurement of previously held equity interest $ 15.8 $ 3.4 $ 19.2 Gain on remeasurement of previously held equity interest $ 780.1 $ 86.7 $ 866.8 Income from unconsolidated operations $ 795.9 $ 90.1 $ 886.0 In the preceding table, special charges (including transaction and integration costs) for the three months ended February 28, 2026 include $ 15.0 million associated with the step-up of acquired inventory recognized in cost of goods sold. There were no special charges during the three months ended February 28, 2025. Total segment operating income as disclosed in the preceding tables 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 28, 2026 and 2025 (in millions): Americas EMEA APAC Total Three months ended February 28, 2026 $ 1,339.6 $ 335.7 $ 198.6 $ 1,873.9 Three months ended February 28, 2025 1,118.3 299.5 187.7 1,605.5 12. SUBSEQUENT EVENT Plan of Merger with Unilever Foods Business On March 31, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Unilever PLC (“Unilever”) to combine with the Unilever Foods business (“Unilever Foods”), a transaction that will create a global flavor leader in attractive and high-growth categories. To facilitate the transaction, Unilever is expected to separate its Unilever Foods business, excluding its foods businesses in India, Nepal and Portugal. Under the terms of the Merger Agreement, we will issue voting and non-voting securities to Unilever shareholders and Unilever in the same proportion as is currently held by our shareholders. The transactions contemplated by the Merger Agreement are expected to result in current Unilever shareholders owning approximately 55.1 % of the combined company, our current shareholders owning approximately 35.0 % of the combined company, and Unilever retaining approximately 9.9 % of the total outstanding equity of the combined company, assuming Unilever does not elect to dispose of such interest to its shareholders in accordance with the Merger Agreement. Unilever will also receive a one-time $ 15.7 billion cash payment, subject to certain adjustments. The distribution of shares of Unilever Foods to Unilever’s shareholders and the proposed transaction, taken together, are intended to qualify as a Reverse Morris Trust transaction that is generally tax-free to Unilever’s shareholders for U.S. federal income tax purposes, except to the extent that cash is paid to Unilever’s shareholders in lieu of fractional shares or Unilever elects to sell all or substantially all of the Unilever Foods assets operated in the United States to McCormick or a subsidiary of McCormick in a transaction that is taxable for U.S. federal income tax purposes (the "U.S. Asset Sale Election"). 25 Table of Contents The proposed transaction is subject to the satisfaction or waiver of customary closing conditions, including the receipt of our shareholders' approval, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, obtaining certain other consents, authorizations, orders or approvals from governmental authorities, including certain other antitrust and any foreign investment approvals, and the effectiveness of a registration statement on Form S-4 to be filed by us. We and Unilever each have termination rights under the Merger Agreement. A termination fee may be payable by us to Unilever, upon termination of the Merger Agreement under specified circumstances, each as more fully described in the Merger Agreement. In connection with the execution of the Merger Agreement, we entered into a commitment letter on March 31, 2026 (the "Bridge Commitment Letter") with Citigroup Global Markets Inc., Goldman Sachs Bank USA and Morgan Stanley Senior Funding, Inc., pursuant to which such parties committed to provide, subject to the satisfaction of customary conditions, a 364-day senior unsecured bridge term loan credit facility (the "Bridge Facility") in an aggregate principal amount of up to $ 15.7 billion. See “Bridge Commitment Letter and Financing Arrangements” below for more information on our Bridge Commitment. Bridge Commitment Letter and Financing Arrangements In connection with the execution of the Merger Agreement, on March 31, 2026, we entered into a commitment letter (the "Bridge Commitment Letter") with Citigroup Global Markets Inc., Goldman Sachs Bank USA and Morgan Stanley Senior Funding, Inc. (the "Commitment Parties"), pursuant to which the Commitment Parties have agreed, subject to the terms and conditions set forth therein, to provide us with certain committed financing in order to fund all or a portion of the consideration payable in the proposed transaction pursuant to the Merger Agreement and to pay related fees and expenses. The Bridge Commitment Letter provides for a senior unsecured 364-day bridge term loan credit facility (the "Bridge Facility") in an aggregate principal amount of up to $ 15.7 billion. The Bridge Facility is intended to be available to us to finance, together with other sources of funds, the acquisition and related fees and expenses in connection with the proposed transaction and other transactions contemplated by the Merger Agreement, in the event that we have not obtained Permanent Financing (as defined below) on or prior to the closing of the proposed transaction. The Bridge Facility is subject to customary conditions precedent to funding, including the consummation of the acquisition materially in accordance with the terms of the Merger Agreement and other customary funding conditions for facilities of this type. The Bridge Facility contains customary representations, warranties, covenants and indemnification provisions. The Bridge Commitment Letter also contemplates that we will seek to obtain permanent financing in the form of senior unsecured notes and/or senior unsecured term loans prior to the closing of the Merger (collectively, the “Permanent Financing”). Commitments under the Bridge Facility will be reduced by the amount of any Permanent Financing as well as the proceeds of certain asset sales and certain other events. The receipt of financing by us is not a condition to our obligation to consummate the proposed transaction.