What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-10-01 compared with 2026-06-25 · 149 added, 148 removed, 488 unchanged (38% of the section changed)

21 unchanged sentences

We submitted our refund request on April 28, 2026, which is described in Note 1 of the notes to our accompanying condensed consolidated financial statements.

The CIT order has been appealed and we will continue to monitor U.S.

We will continue to monitor U.S.

tariff-related developments for further updates and any associated impacts on our consolidated financial statements.

9 unchanged sentences

Executive Summary

In the second quarter of 2026, we achieved net sales growth of 16.7% as compared to the same quarter of 2025, due to the following factors:

In the third quarter of 2026, we achieved net sales growth of 17.4% as compared to the same quarter of 2025, due to the following factors:

• Volume and product mix unfavorably impacted net sales by 0.3%.

5 unchanged sentences

Fluctuations in curr ency rates positively impacted our Consumer segment sales growth by 0.6% and our Flavor Solutions segment sales growth by 1.3%.

Operating income was $276.4 million in the second quarter of 2026, compared to $245.8 million in the same period of 2025, reflecting an increase of 12.4%.

Our gross profit margin increased by 270 basis points driven by the impacts of the McCormick de Mexico acquisition, favorable pricing, the IEEPA tariff refund, and cost savings from the Company's Comprehensive Continuous Improvement (CCI) program, partially offset by increased commodity costs and higher freight costs due to the conflict in the Middle East.

Operating income was $217.0 million in the third quarter of 2026, compared to $288.7 million in the same period of 2025, reflecting a decrease of 24.8%.

Our gross profit margin increased by 190 basis points driven by the impacts of the McCormick de Mexico acquisition, favorable pricing, and cost savings from the Company's Comprehensive Continuous Improvement (CCI) program, partially offset by increased commodity costs and higher freight costs, including the impact of the conflict in the Middle East.

Selling, general, and administrative (SG&A) expense as a percentage of sales increased by 110 basis points, primarily driven by the impact of the McCormick de Mexico acquisition and increased investments in technology.

Excluding special charges, adjusted operating income was $336.4 million in the second quarter of 2026, reflecting an increase of 30.1% compared to $258.6 million in the 2025 period, primarily driven by the impact of the McCormick de Mexico acquisition and the IEEPA tariff refund.

Excluding special charges, adjusted operating income was $358.5 million in the third quarter of 2026, reflecting an increase of 22.1% compared to $293.6 million in the 2025 period, primarily driven by the impact of the McCormick de Mexico acquisition.

In constant currency, adjusted operating income increased by 20.9%.

Diluted earnings per share was $0.56 and $0.65 in the second quarters of 2026 and 2025, respectively.

Special charges, including transaction and integration costs, lowered diluted earnings per share by $0.24 and $0.04 in the second quarters of 2026 and 2025, respectively.

Excluding the effects of special charges, adjusted diluted earnings per share was $0.80 and $0.69 in the second quarters of 2026 and 2025, respectively.

The increase in adjusted diluted earnings per share was driven by favorable operating income and a decrease in the effective tax rate, partially offset by lower income from unconsolidated operations, higher income attributable to noncontrolling interests, an increase in interest expense, and a decrease in other income.

A detailed review of our second quarter 2026 performance compared to the second quarter of fiscal 2025 appears in the section titled “ Results of Operations – Company ” and “ Results of Operations – Segments .” For a reconciliation of non-GAAP to reported amounts, see the subsequent discussion under the heading “ Non-GAAP Financial Measures .”

Diluted earnings per share was $0.36 and $0.84 in the third quarters of 2026 and 2025, respectively.

Special charges, including transaction and integration costs and impairments of long-lived assets, lowered diluted earnings per share by $0.50 and $0.01 in the third quarters of 2026 and 2025, respectively.

Excluding the effects of special charges, adjusted diluted earnings per share was $0.86 and $0.85 in the third quarters of 2026 and 2025, respectively.

The increase in adjusted diluted earnings per share was driven by favorable operating income, partially offset by an increase in the effective tax rate, and an increase in interest expense.

A detailed review of our third quarter 2026 performance compared to the third quarter of fiscal 2025 appears in the section titled “ Results of Operations – Company ” and “ Results of Operations – Segments .” For a reconciliation of non-GAAP to reported amounts, see the subsequent discussion under the heading “ Non-GAAP Financial Measures .”

Our fiscal 2026 outlook continues to reflect prioritized investments in key categories to sustain our volume trends and drive long-term profitable growth while appreciating the uncertainty of the consumer and macro environment, including global trade policies and the conflict in the Middle East.

4 unchanged sentences

In 2026, we expect net sales to grow between 13% and 17% compared to 2025, including an 11% to 13% increase as a result of the acquisition of a controlling interest in McCormick de Mexico and a 1% favorable impact from foreign currency rates, or to grow from 1% to 3% on an organic basis.

We anticipate that net sales will benefit from favorable volume and product mix and pricing.

In 2026, we expect an increase in adjusted operating income of 16% to 20% compared to 2025, including a 1% favorable impact from foreign currency rates, or to increase by 15% to 19% on a constant currency basis.

We anticipate that net sales will benefit from favorable pricing, while volumes are expected to remain flat.

In 2026, we e xpect an increase in adjusted operating income of 16% to 20% compared to 2025, including a 1% favorable impact from foreign currency rates, or to increase by 15% to 19% on a constant currency basis.

This anticipated increase in adjusted operating income reflects adjusted gross margin expansion, accretion from the acquisition of the controlling interest in McCormick de Mexico and cost savings from our CCI program, partially offset by an increase in SG&A expense, including increased investments in technology, performance-based employee compensation expenses and investments aimed at driving volume growth, particularly in brand marketing.

2 unchanged sentences

We estimate that our 2026 adjusted effective tax rate, including the net favorable impact of anticipated discrete tax items, although at a lower amount than in 2025, will be 24.0% as compared to 21.5% in 2025.

Adjusted diluted earnings per share was $3.00 in 2025.

Adjusted diluted earnings per share was $3.00 for the year ended November 30, 2025.

Adjusted diluted earnings per share is projected to range from $3.05 to $3.13 in 2026.

1 unchanged sentence

RESULTS OF OPERATIONS – COMPANY

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

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

2026 2025 2026 2025

8 unchanged sentences

Gross profit margin 39.3 % 37.4 % 39.1 % 37.5 %

Sales for the second quarter of 2026 increased by 16.7% from the same period in 2025 and increased by 1.7% on an organic basis (that is, excluding the impact of acquisitions and foreign currency exchange as more fully described under the caption, Non-GAAP Financial Measures).

Sales for the third quarter of 2026 increased by 17.4% from the same period in 2025 and increased by 1.9% on an organic basis (that is, excluding the impact of acquisitions and foreign currency exchange as more fully described under the caption, Non-GAAP Financial Measures).

The acquisition of McCormick de Mexico added 14.6% to net sales.

2 unchanged sentences

Foreign currency rates increased sales by 0.9%.

Sales for the six months ended May 31, 2026 increased by 16.7% from the same period in 2025 and increased by 1.4% on an organic basis.

Sales for the nine months ended August 31, 2026 increased by 16.9% from the same period in 2025 and increased by 1.6% on an organic basis.

The acquisition of McCormick de Mexico added 13.1% to net sales.

2 unchanged sentences

Foreign currency rates increased sales by 2.2%.

Gross profit for the second quarter of 2026 increased by $155.4 million, or 25.0%, from the same period of 2025.

Our gross profit margin was 40.2%, an increase of 270 basis points, driven by the impacts of the McCormick de Mexico acquisition, favorable pricing, the IEEPA tariff refund, and cost savings from the Company's CCI program, partially offset by increased commodity costs and higher freight costs due to the conflict in the Middle East.

Gross profit for the six months ended May 31, 2026 increased by $260.3 million, or 21.2%, from the same period in 2025.

Our gross profit margin was 39.0%, an increase of 140 basis points, driven by the impact of the McCormick de Mexico acquisition, which included a step-up of acquired inventory recognized as special charges in Cost of goods sold as the related inventory was sold, favorable pricing, the impact of the IEEPA tariff refund, and cost savings from the Company's CCI program, partially offset by increased commodity costs and higher freight costs due to the conflict in the Middle East.

Gross profit for the third quarter of 2026 increased by $149.8 million, or 23.2%, from the same period of 2025.

Our gross profit margin was 39.3%, an increase of 190 basis points, driven by the impacts of the McCormick de Mexico acquisition, favorable pricing, and cost savings from the Company's CCI program, partially offset by increased commodity costs and higher freight costs, including the impact of the conflict in the Middle East.

Gross profit for the nine months ended August 31, 2026 increased by $410.1 million, or 21.9%, from the same period in 2025.

Our gross profit margin was 39.1%, an increase of 160 basis points, driven by the impact of the McCormick de Mexico acquisition, favorable pricing, the impact of the IEEPA tariff refund, and cost savings from the Company's CCI program, partially offset by increased commodity and freight costs, including the impact of the conflict in the Middle East.

Excluding the impact of special charges included in Cost of goods sold, adjusted gross margin was 39.4%, or an increase of 190 basis points.

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

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

2026 2025 2026 2025

1 unchanged sentence

Percent of net sales 21.6 % 20.5 % 22.9 % 21.9 %

SG&A expense increased by $77.6 million in the second quarter of 2026 as compared to the same period in 2025, driven primarily by the impact of the McCormick de Mexico acquisition, increased brand marketing expense, and increased investments in technology.

SG&A expense increased by $83.9 million in the third quarter of 2026 as compared to the same period in 2025, driven primarily by the impact of the McCormick de Mexico acquisition, increased brand marketing expense, and increased investments in technology.

SG&A as a percentage of net sales increased by 110 basis points.

SG&A expense increased by $155.1 million in the six months ended May 31, 2026 as compared to the same period in 2025, driven primarily by the impact of the McCormick de Mexico acquisition, increased brand marketing expense, and increased investments in technology.

SG&A expense increased by $239.0 million in the nine months ended August 31, 2026 as compared to the same period in 2025, driven primarily by the impact of the McCormick de Mexico acquisition, increased brand marketing expense, and increased investments in technology.

SG&A as a percentage of net sales increased by 100 basis points.

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

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

2026 2025 2026 2025

Special charges $ 141.5 $ 3.9 $ 226.6 $ 16.7

During the three months ended May 31, 2026, we recorded $60.0 million of special charges, including transaction and integration expenses.

Those expenses consisted of $57.6 million of transaction and integration costs, $1.8 million associated with employee severance and related benefits associated with our SG&A streamlining actions and $0.6 million associated with other actions.

During the six months ended May 31, 2026, we recorded $85.1 million of special charges, including transaction and integration expenses.

Those expenses consisted of $65.5 million of transaction and integration costs, $18.0 million associated with employee severance and related benefits associated with our SG&A streamlining actions and $1.6 million associated with other actions.

During the three and six months ended May 31, 2025, we recorded $12.8 million of special charges, including transaction and integration expenses.

Those expenses principally consisted of $11.4 million associated with employee severance and related benefits associated with our SG&A streamlining actions, $0.8 million of transaction and integration costs, and $0.6 million associated with other actions.

During the three months ended August 31, 2026, we recorded $141.5 million of special charges, including transaction and integration expenses.

Those expenses consisted of $95.3 million of transaction and integration costs, $43.1 million related to the impairment of long-lived assets, $1.8 million associated with employee severance and related benefits associated with our SG&A streamlining actions, and $1.3 million associated with other actions, including the exit costs incurred to cease operations at our development-stage pepper sourcing and agricultural technology project in Malaysia .

During the nine months ended August 31, 2026 , we recorded $226.6 million of special charges, including transaction and integration expenses.

Those expenses consisted of $160.8 million of transaction and integration costs, $43.1 million related to the impairment of long-lived assets, $19.8 million associated with employee severance and related benefits associated with our SG&A streamlining actions, and $2.9 million associated with other actions, including the exit costs incurred to cease operations at our development-stage pepper sourcing and agricultural technology project in Malaysia .

During the three months ended August 31, 2025, we recorded $3.9 million of special charges, including transaction and integration expenses.

Those expenses consisted of $1.3 million associated with employee severance and related benefits associated with our SG&A streamlining actions, $1.7 million associated with other actions, and $0.9 million of transaction and integration costs.

During the nine months ended August 31, 2025, we recorded $16.7 million of special charges, including transaction and integration expenses.

Those expenses consisted principally of $12.7 million associated with employee severance and related benefits associated with our SG&A streamlining actions, $2.3 million associated with other actions, and $1.7 million of transaction and integration costs.

Details with respect to the composition of special charges, including transaction and integration expenses, are included in Note 3 of the notes to the accompanying condensed consolidated financial statements.

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

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

2026 2025 2026 2025

1 unchanged sentence

Other income, net 5.9 9.4 17.2 29.0

Interest expense increased by $11.7 million and $10.5 million for the three and six months ended May 31, 2026, respectively, compared to the same period in 2025, driven by $6.8 million of amortization of debt financing fees related to our pending merger with Unilever Foods, the effects of higher interest rates and the impact of higher average borrowing levels.

Other income, net, decreased by $3.3 million and $8.3 million for the three and six months ended May 31, 2026, respectively, compared to the same period in 2025 due to a lower level of interest income driven primarily by the impact of the acquisition of McCormick de Mexico on our average cash balance during the period.

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

Interest expense increased by $18.2 million and $28.7 million for the three and nine months ended August 31, 2026, respectively, compared to the same periods in 2025, driven by $12.4 million and $19.2 million, respectively, of amortization of debt financing fees related to our pending merger with Unilever Foods.

Interest expense in the 2026 periods was also impacted by the effects of higher interest rates and higher average borrowing levels.

Other income, net, decreased by $3.5 million and $11.8 million for the three and nine months ended August 31, 2026, respectively, compared to the same periods in 2025 due to a lower level of interest income driven primarily by the impact of the acquisition of McCormick de Mexico on our average cash balance during the period.

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

2026 2025 2026 2025

2 unchanged sentences

Effective tax rate 32.3 % 15.9 % 29.0 % 20.4 %

The effective tax rate for the three months ended May 31, 2026 increased by 4.7% compared to the same periods in 2025 primarily driven by the unfavorable impact of acquisition related costs partially offset by the impact of discrete tax items which are described in more detail in Note 8 of the notes to our accompanying condensed consolidated financial statements.

The effective tax rate for the six months ended May 31, 2026 increased by 4.5% compared to the same periods in 2025 primarily driven by the unfavorable impact of acquisition related costs.

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

The effective tax rate for the three months ended August 31, 2026 increased by 16.4% compared to the same period in 2025 primarily driven by the unfavorable impact of nondeductible expenses and lower favorable discrete tax items.

The effective tax rate for the nine months ended August 31, 2026 increased by 8.6% compared to the same period in 2025 primarily driven by the unfavorable impact of nondeductible expenses and lower favorable discrete tax items.

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

2026 2025 2026 2025

Income from unconsolidated operations $ 3.0 $ 19.1 $ 892.5 $ 58.3

Income from unconsolidated operations decreased $17.2 million for the three months ended May 31, 2026 compared to the same period of 2025.

Income from unconsolidated operations decreased $16.1 million for the three months ended August 31, 2026 compared to the same period of 2025.

This decrease was primarily driven by the acquisition of an additional 25% ownership interest in McCormick de Mexico which resulted in the consolidation of McCormick de Mexico's financial results, which is described in more detail in Note 2 of the notes to our accompanying condensed consolidated financial statements.

Income from unconsolidated operations increased by $850.3 million for the six months ended May 31, 2026 compared to the same period of 2025.

This increase was primarily driven by a gain of $866.8 million on the remeasurement of our previously held equity interest in McCormick de Mexico, which is described in more detail in Note 2 of the notes to our accompanying condensed consolidated financial statements.

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

Income from unconsolidated operations increased by $834.2 million for the nine months ended August 31, 2026 compared to the same period of 2025.

This increase was primarily driven by a gain of $866.8 million on the remeasurement of our previously held equity interest in McCormick de Mexico, partially offset by the impact of consolidating McCormick de Mexico, which is described in more detail in Note 2 of the notes to our accompanying condensed consolidated financial statements.

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

2026 2025 2026 2025

Net income attributable to noncontrolling interests $ 10.0 $ 2.2 $ 26.2 $ 4.3

Net income attributable to noncontrolling interests increased by $9.1 million for the three months ended May 31, 2026 and $14.1 million for the six months ended May 31, 2026 compared to the same periods in 2025 .

Net income attributable to noncontrolling interests increased by $7.8 million for the three months ended August 31, 2026 and $21.9 million for the nine months ended August 31, 2026 compared to the same periods in 2025 .

This increase was driven by the net income attributable to our noncontrolling interest in McCormick de Mexico upon its consolidation in 2026.

The following table outlines the major components of the change in diluted earnings per share from 2025 to 2026:

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

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

2025 Earnings per share – diluted

15 unchanged sentences

CONSUMER SEGMENT

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

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

2026 2025 2026 2025

Net sales $ 1,215.4 $ 973.2 $ 3,503.1 $ 2,823.0

2 unchanged sentences

Segment operating income margin 19.8 % 19.9 % 18.2 % 17.9 %

In the second quarter of 2026, sales of our Consumer segment increased by 22.8% compared to the second quarter of 2025 and increased by 0.8% on an organic basis.

In the third quarter of 2026, sales of our Consumer segment increased by 24.9% compared to the third quarter of 2025 and increased by 1.1% on an organic basis.

The acquisition of McCormick de Mexico increased sales by 23.2%.

Unfavorable volume and product mix decreased sales by 1.1%, driven by declines in the Americas region which were partially offset by growth in the EMEA and APAC regions.

Favorable pricing impacted sales by 2.7% primarily driven by the Americas region.

Favorable pricing impacted sales by 2.2% primarily driven by the Americas and EMEA regions.

The favorable impact of foreign currency rates increased sales by 0.6%.

In the Americas region, Consumer segment sales increased by 28.0% in the second quarter of 2026 compared to the same quarter of 2025 and decreased by 0.2% on an organic basis.

In the Americas region, Consumer segment sales increased by 31.7% in the third quarter of 2026 compared to the same quarter of 2025 and decreased by 0.3% on an organic basis.

The acquisition of McCormick de Mexico increased sales by 32.1%.

Unfavorable volume and product mix decreased sales by 3.6%, which included the unfavorable impact of price elasticity.

Unfavorable volume and product mix decreased sales by 2.5% driven by lower consumption across core categories.

Favorable pricing impacted sales by 2.2%.

The favorable impact of foreign currency rates increased sales by 0.3%.

In the EMEA region, Consumer segment sales increased by 10.7% in the second quarter of 2026 compared to the same quarter of 2025 and increased by 3.3% on an organic basis.

Favorable volume and product mix increased sales by 1.9%, driven by higher sales in France and the UK.

The unfavorable impact of foreign currency rates decreased sales by 0.1%.

In the EMEA region, Consumer segment sales increased by 5.2% in the third quarter of 2026 compared to the same quarter of 2025 and increased by 5.0% on an organic basis.

Favorable volume and product mix increased sales by 2.0%, driven by higher sales in Poland.

Favorable pricing impacted sales by 3.0%.

The favorable impact from foreign currency rates increased sales by 0.2%.

In the APAC region, Consumer segment sales increased by 10.0% in the second quarter of 2026 compared to the same quarter of 2025 and increased by 2.9% on an organic basis.

In the APAC region, Consumer segment sales increased by 10.7% in the third quarter of 2026 compared to the same quarter of 2025 and increased by 4.4% on an organic basis.

Favorable volume and product mix increased sales by 4.1%, driven by higher sales in China.

1 unchanged sentence

The favorable impact from foreign currency rates increased sales by 6.3%.

For the six months ended May 31, 2026, sales of our Consumer segment increased 23.7% as compared to the same period in 2025 and increased by 1.3% on an organic basis.

For the nine months ended August 31, 2026, sales of our Consumer segment increased 24.1% as compared to the same period in 2025 and increased by 1.2% on an organic basis.

The acquisition of McCormick de Mexico increased sales by 20.9%.

Unfavorable volume and product mix decreased sales by 1.2% driven by declines in the Americas region which were partially offset by growth in the EMEA and APAC regions.

Favorable pricing impacted sales by 2.5% driven by the Americas region.

Favorable pricing impacted sales by 2.4% driven by the Americas and EMEA regions.

The favorable impact from foreign currency rates increased sales by 2.0%.

Segment operating income for our Consumer segment for the second quarter of 2026 increased by $53.3 million, or 32.6%, as compared to the same period of 2025 driven by an increase in gross profit, partially offset by an increase in SG&A expense.

The increase in gross profit was driven by the impacts of our acquisition of McCormick de Mexico, favorable pricing, the IEEPA tariff refund, and CCI-led cost savings, partially offset by increased commodity costs and higher freight costs due to the conflict in the Middle East.

Segment operating income for our Consumer segment for the third quarter of 2026 increased by $47.3 million, or 24.4%, as compared to the same period of 2025 driven by an increase in gross profit, partially offset by an increase in SG&A expense.

The increase in gross profit was driven by the impacts of our acquisition of McCormick de Mexico, favorable pricing, and CCI-led cost savings, partially offset by increased commodity costs and higher freight costs, including the impact of the conflict in the Middle East.

The increase in SG&A expense was driven by the items described in the consolidated discussion.

Segment operating margin increased by 140 basis points to 19.0% .

Segment operating margin decreased by 10 basis points to 19.8% .

On a constant currency basis, segment operating income increased by 23.8%.

Segment operating income for our Consumer segment for the six months ended May 31, 2026 increased by $86.2 million, or 27.8%, as compared to the same period in 2025, driven by the effects of an increase in gross profit partially offset by an increase in SG&A expense.

The increase in gross profit was driven by the impacts of our acquisition of McCormick de Mexico, the IEEPA tariff refund, favorable pricing, and CCI-led cost savings, partially offset by increased commodity costs and higher freight costs due to the conflict in the Middle East.

Segment operating income for our Consumer segment for the nine months ended August 31, 2026 increased by $133.5 million, or 26.5%, as compared to the same period in 2025, driven by the effects of an increase in gross profit partially offset by an increase in SG&A expense.

The increase in SG&A expense was driven by the items described in the consolidated discussion.

Segment operating margin increased by 30 basis points to 18.2%.

1 unchanged sentence

FLAVOR SOLUTIONS SEGMENT

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

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

2026 2025 2026 2025

3 unchanged sentences

Segment operating income margin 14.5 % 13.3 % 13.9 % 12.6 %

In the second quarter of 2026, sales of our Flavor Solutions segment increased by 8.9% as compared to the second quarter of 2025 and increased by 2.9% on an organic basis.

In the third quarter of 2026, sales of our Flavor Solutions segment increased by 7.7% as compared to the third quarter of 2025 and increased by 3.0% on an organic basis.

The acquisition of McCormick de Mexico increased sales by 3.4%.

Favorable volume and product mix increased sales by 1.4% driven by the Americas and APAC regions, partially offset by lower sales in the EMEA region.

Favorable pricing increased sales by 1.5% driven by the Americas and EMEA regions.

Favorable volume and product mix increased sales by 0.8% driven by the APAC region, partially offset by lower sales in the Americas and EMEA regions.

Favorable pricing increased sales by 2.2% driven by the Americas and EMEA regions, partially offset by unfavorable pricing in the APAC region.

The favorable impact of foreign currency rates increased sales by 1.3%.

In the Americas region, Flavor Solutions sales increased by 10.0% in the second quarter of 2026 compared to the second quarter of 2025 and increased by 3.9% on an organic basis.

In the Americas region, Flavor Solutions sales increased by 8.4% in the third quarter of 2026 compared to the third quarter of 2025 and increased by 2.7% on an organic basis.

The acquisition of McCormick de Mexico increased sales by 4.9%.

Favorable volume and product mix increased sales by 2.1% driven by the effect of higher sales to packaged food customers.

Unfavorable volume and product mix decreased sales by 0.1%.

Favorable pricing impacted sales by 2.8%.

The favorable impact from foreign currency rates increased sales by 0.8% .

In the EMEA region, Flavor Solutions sales increased by 5.4% in the second quarter of 2026 compared to the second quarter of 2025 and increased by 0.4% on an organic basis.

In the EMEA region, Flavor Solutions sales increased by 1.6% in the third quarter of 2026 compared to the third quarter of 2025 and increased by 1.2% on an organic basis.

Unfavorable volume and product mix decreased sales by 1.0% driven by the effect of lower sales to quick-service restaurant customers.

1 unchanged sentence

The favorable impact from foreign currency rates increased sales by 0.4%.

In the APAC region, Flavor Solutions sales increased by 7.5% in the second quarter of 2026 compared to the second quarter of 2025, and increased by 0.2% on an organic basis.

In the APAC region, Flavor Solutions sales increased by 14.2% in the third quarter of 2026 compared to the third quarter of 2025, and increased by 8.3% on an organic basis.

Favorable volume and product mix increased sales by 10.0%, primarily driven by growth in China.

1 unchanged sentence

The favorable impact from foreign currency rates increased sales by 5.9%.

For the six months ended May 31, 2026, sales of our Flavor Solutions segment increased 7.6% as compared to the same period in 2025 and increased by 1.7% on an organic basis.

For the nine months ended August 31, 2026 , sales of our Flavor Solutions segment increased 7.6% as compared to the same period in 2025 and increased by 2.1% on an organic basis.

The acquisition of McCormick de Mexico increased sales by 3.0% .

Favorable volume and product mix increased sales by 0.2% driven primarily by growth in the APAC region partially offset by lower sales in the EMEA region.

Favorable volume and product mix increased sales by 0.4% driven primarily by growth in the APAC region.

Favorable pricing increased sales by 1.7%, driven by the Americas and EMEA regions partially offset by unfavorable pricing in the APAC region.

The favorable impact of foreign currency rates increased segment sales by 2.5% .

Segment operating income for our Flavor Solutions segment for the second quarter of 2026 increased by $24.5 million, or 25.8%, compared to the same period of 2025 driven by an increase in gross profit partially offset by an increase in SG&A expense.

Segment operating income for our Flavor Solutions segment for the third quarter of 2026 increased by $17.6 million, or 17.6%, compared to the same period of 2025 driven by an increase in gross profit partially offset by an increase in SG&A expense.

The increase in gross profit was driven by favorable pricing, the impact of our acquisition of McCormick de Mexico, and CCI-led cost savings.

2 unchanged sentences

On a constant currency basis, segment operating income increased by 15.4%.

Segment operating income for our Flavor Solutions segment for the six months ended May 31, 2026 increased by $34.0 million, or 19.6%, compared to the same period in 2025, driven by the effects of an increase in gross profit partially offset by an increase in SG&A expense.

Segment operating income for our Flavor Solutions segment for the nine months ended August 31, 2026 increased by $51.6 million, or 18.9%, compared to the same period in 2025, driven by the effects of an increase in gross profit partially offset by an increase in SG&A expense.

The increase in gross profit was driven by favorable pricing, the impact of our acquisition of McCormick de Mexico, and CCI-led cost savings.

11 unchanged sentences

The following table sets forth the notional values and unrealized net gains (losses) of the portfolio of our forward foreign currency and cross currency swap contracts:

May 31, 2026 November 30, 2025

August 31, 2026 November 30, 2025

Forward foreign currency:

10 unchanged sentences

The following table sets forth the notional values and unrealized net gains (losses) of our interest rate swap contracts:

May 31, 2026 November 30, 2025

August 31, 2026 November 30, 2025

Notional value $ 500.0 $ 500.0

Unrealized net (loss) gain (23.7) (20.8)

Unrealized net loss (25.8) (20.8)

The change in fair values of our interest rate swap contracts is due to changes in interest rates on the notional amounts outstanding as of each date as well as the remaining duration of our interest rate derivative contracts.

5 unchanged sentences

The following table sets forth the notional values and unrealized net gains (losses) of our commodity contracts:

May 31, 2026 November 30, 2025

August 31, 2026 November 30, 2025

Notional value $ 326.9 $ —

14 unchanged sentences

Expenses associated with the approved actions are classified as special charges upon recognition and monitored on an ongoing basis through completion.

Included in special charges are transaction and integration costs incurred in conjunction with acquisitions.

Included in special charges are transaction and integration costs incurred in conjunction with acquisitions and impairments of long-lived assets.

• Gain on remeasurement of previously held equity interest - On January 2, 2026, we completed the acquisition of an additional 25% ownership interest in McCormick de Mexico which increased our ownership to a 75% controlling interest.

14 unchanged sentences

For the year ended November 30, 2025

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

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

2026 2025 2026 2025

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(3) Income tax rate is calculated as income tax expense as a percentage of income from consolidated operations before income taxes.

Adjusted income tax rate is calculated as adjusted income tax expense as a percentage of income from consolidated operations before income taxes excluding special charges of $287.0 million and $217.4 million for the three months ended May 31, 2026 and 2025, respectively, and $512.1 million and $403.9 million for the six months ended May 31, 2026 and 2025, respectively.

Adjusted income tax rate is calculated as adjusted income tax expense as a percentage of income from consolidated operations before income taxes excluding special charges of $308.4 million and $252.8 million for the three months ended August 31, 2026 and 2025, respectively, and $820.5 million and $656.7 million for the nine months ended August 31, 2026 and 2025, respectively.

Adjusted income tax rate is calculated as adjusted income tax expense as a percentage of income from consolidated operations before income taxes excluding special charges of $936.2 million for the year ended November 30, 2025.

(4) The impact of special charges, net of noncontrolling interests, for six months ended May 31, 2026 includes a $2.6 million non-controlling interest effect associated with the step-up of acquired inventory recognized in cost of goods sold as the related inventory was sold.

(5) The impact of special charges, net of noncontrolling interests, for three and six months ended May 31, 2026 includes a net income impact of $5.2 million related to transaction expenses included in interest expense.

(4) The impact of special charges, net of noncontrolling interests, for the nine months ended August 31, 2026 includes a $2.6 million non-controlling interest effect associated with the step-up of acquired inventory recognized in cost of goods sold as the related inventory was sold.

(5) The impact of special charges, net of noncontrolling interests, for the three and nine months ended August 31, 2026 includes a net income impact of $12.4 million and $19.2 million, respectively, related to transaction expenses included in interest expense.

Because we are a multi-national company, we are subject to variability of our reported U.S.

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Rates of constant currency and organic growth (decline) follow:

Three months ended May 31, 2026

Three months ended August 31, 2026

Percentage change as reported Impact of foreign currency exchange Percentage change on constant currency basis Impact of acquisition Percentage change on an organic basis

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Total net sales 17.4 % 0.9 % 16.5 % 14.6 % 1.9 %

Six months ended May 31, 2026

Nine months ended August 31, 2026

Percentage change as reported Impact of foreign currency exchange Percentage change on constant currency basis Impact of acquisition Percentage change on an organic basis

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Total net sales 16.9 % 2.2 % 14.7 % 13.1 % 1.6 %

Three months ended May 31, 2026

Three months ended August 31, 2026

Percentage change as reported Impact of foreign currency exchange Percentage change on constant currency basis

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Total adjusted operating income 22.1 % 1.2 % 20.9 %

Six months ended May 31, 2026

Nine months ended August 31, 2026

Percentage change as reported Impact of foreign currency exchange Percentage change on constant currency basis

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Total adjusted operating income 23.8 % 2.2 % 21.6 %

To present the percentage change in projected 2026 net sales, adjusted operating income, and adjusted earnings per share (diluted) on a constant currency basis, the projected local currency net sales, adjusted operating income, and adjusted net income for entities reporting in currencies other than the U.S.

To present the percentage change in projected 2026 net sales, adjusted operating income, and adjusted earnings per share (diluted) on a constant currency basis, the projected 2026 results for entities reporting in currencies other than the U.S.

dollar are translated into U.S.

dollars at forecasted exchange rates.

These figures are then compared to the 2025 local currency projected results, which are translated into U.S.

dollars at the average actual exchange rates in effect during the corresponding months of fiscal year 2025.

This comparison determines what the 2025 consolidated U.S.

dollar net sales, adjusted operating income, and adjusted earnings per share (diluted) would have been if the relevant currency exchange rates had not changed from those of the comparable 2025 periods.

dollars at the actual exchange rates in effect for each month during 2025.

These 2026 figures are then compared to our actual results for 2025.

This determines what 2026 results would be if currency exchange rates had not changed from 2025.

Projections for the Year Ending November 30, 2026

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LIQUIDITY AND FINANCIAL CONDITION

Six months ended May 31,

Nine months ended August 31,

Net cash provided by operating activities $ 598.8 $ 420.2

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Due to the timing of the interest payments on our long-term debt, interest payments are higher in the first and third quarters of our fiscal year.

We expect that the pending combination with Unilever Foods is likely to result in a material increase in our debt and liquidity needs that will impact our capital needs prior to and after the closing of such transaction.

We expect that the pending merger with Unilever Foods is likely to result in a material increase in our debt and liquidity needs that will impact our capital needs prior to and after the closing of such transaction.

Under the terms of the Merger Agreement, we will issue voting and non-voting securities to Unilever and its shareholders and make a one-time cash payment of $15.7 billion to Unilever, subject to certain adjustments, which we intend to fund through the Bridge Facility, the Term Loan Facility, and, to the extent available, the Permanent Financing.

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Accordingly, the amounts in the cash flow statement do not agree with changes in the operating assets and liabilities that are presented in the balance sheet.

Operating Cash Flow — Net cash provided by operating activities of $430.7 million for the six months ended May 31, 2026 increased $269.3 million as compared to $161.4 million for the corresponding 2025 period.

The increase in operating cash flow was primarily driven by lower cash used for working capital.

The lower use of cash associated with working capital, net of effect of businesses acquired, was driven by a decreased use of cash associated with accounts payable and increased source of cash from accounts receivables in 2026 compared to the 2025 period.

Investing Cash Flow — Cash used in investing activities of $805.1 million for the six months ended May 31, 2026 increased by $699.9 million as compared to $105.2 million for the corresponding period in 2025.

Operating Cash Flow — Net cash provided by operating activities of $598.8 million for the nine months ended August 31, 2026 increased $178.6 million as compared to $420.2 million for the corresponding 2025 period.

The increase in operating cash flow was primarily driven by lower cash used for working capital, including cash inflows associated with tariff refunds.

Investing Cash Flow — Cash used in investing activities of $861.1 million for the nine months ended August 31, 2026 increased by $688.9 million as compared to $172.2 million for the corresponding period in 2025.

Our primary investing cash flows included cash used in the acquisition of a business and cash used for capital expenditures.

Capital expenditures, including expenditures for capitalized software, decreased from the 2025 level of $138.1 million to $131.2 million.

Cash used for the acquisition of a business, net of cash acquired for the six months ended May 31, 2026 was $729.9 million as compared to $19.8 million for the six months ended May 31, 2025.

Cash used for the acquisition of a business, net of cash acquired for the nine months ended August 31, 2026 was $729.9 million as compared to $34.1 million for the nine months ended August 31, 2025.

We expect 2026 capital expenditures to approximate $250 million.

Financing Cash Flow — Financing activities provided cash of $602.7 million for the six months ended May 31, 2026 as compared to a use of cash of $142.9 million for the corresponding period in 2025.

Financing Cash Flow — Financing activities provided cash of $490.3 million for the nine months ended August 31, 2026 as compared to a use of cash of $378.3 million for the corresponding period in 2025.

The year-over-year change was primarily driven by fluctuations in net borrowings, share repurchase activity, and dividend payments, as further described below.

The following table outlines our net borrowing activities:

Six months ended May 31,

Nine months ended August 31,

Net increase in short-term borrowings (repayments), net $ 958.8 $ 13.2

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Net cash provided by borrowing activities $ 875.4 $ (0.1)

During the six months ended May 31, 2026, the increase in short-term borrowings was principally to fund investing cash requirements.

During the six months ended May 31, 2026, we repaid $504.4 million of long-term debt, including the $500 million, 0.90% notes that matured in February 2026.

In the second quarter of 2026, we paid $51.0 million of aggregate debt financing fees related to the pending merger with Unilever Foods which were deferred in Other assets and are being amortized to Interest expense.

During the six months ended May 31, 2026, we issued $500 million of 4.15% notes due 2029, with net proceeds received of $497.1 million.

During the nine months ended August 31, 2026, the increase in short-term borrowings was principally to fund investing cash requirements.

During the nine months ended August 31, 2026, we repaid $506.7 million of long-term debt, including the $500 million, 0.90% notes that matured in February 2026.

During the three and nine months ended August 31, 2026, we paid $24 million and $75 million, respectively, of aggregate debt financing fees related to the pending merger with Unilever Foods which were deferred in Other assets and are being amortized to Interest expense.

During the nine months ended August 31, 2026, we issued $500 million of 4.15% notes due 2029, with net proceeds received of $497.1 million.

The following table outlines the activity in our share repurchase program:

Six months ended May 31,

Nine months ended August 31,

Number of shares of common stock repurchased (in thousands) 154 382

Dollar amount (in millions) $ 10.9 $ 29.2

As of May 31, 2026, approximately $402.6 million remained of the $600.0 million share repurchase program that was authorized by the Board of Directors in November 2019.

As of August 31, 2026, approximately $403 million remained of the $600 million share repurchase program that was authorized by the Board of Directors in November 2019.

The timing and amount of any shares repurchased is determined by our management based on its evaluation of market conditions and other factors.

During the six months ended May 31, 2026, we received proceeds of $13.6 million from exercised stock options as compared to $13.3 million received in the corresponding 2025 period.

We repurchased $11.9 million and $12.6 million of common stock during the six months ended May 31, 2026 and 2025, respectively, in conjunction with employee tax withholding requirements associated with our stock compensation plans.

Dividends paid increased to $257.9 million, or a per share quarterly dividend of $0.48, in the first six months of 2026 from $241.5 million, or a per share quarterly dividend of $0.45, of dividends paid in the same period last year.

During the nine months ended August 31, 2026, we received proceeds of $23.9 million from exercised stock options as compared to $15.1 million received in the corresponding 2025 period.

We repurchased $11.9 million and $13.2 million of common stock during the nine months ended August 31, 2026 and 2025, respectively, in conjunction with employee tax withholding requirements associated with our stock compensation plans.

Dividends paid increased to $387.0 million, or a per share quarterly dividend of $0.48, in the first nine months of 2026 from $362.2 million, or a per share quarterly dividend of $0.45, of dividends paid in the same period last year.

The timing and amount of any future dividends is determined by our Board of Directors.

We paid dividends to our joint venture partner of $8.4 million in the first six months of 2026.

We paid dividends to our joint venture partners of $20.8 million in the first nine months of 2026.

Most of our cash is in our subsidiaries outside of the U.S.

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Those balances are generally available without legal restrictions to fund ordinary business operations, capital projects and any possible future acquisitions.

At May 31, 2026 and 2025, we temporarily used $449.4 million and $614.2 million, respectively, of cash from our non-U.S.

At August 31, 2026 and 2025, we temporarily used $510.9 million and $652.2 million, respectively, of cash from our non-U.S.

subsidiaries to pay down short-term debt in the U.S.

During a quarter, our short-term borrowings vary, but are typically lower at the end of a quarter.

The average short-term borrowings outstanding for the six months ended May 31, 2026 and 2025 were $1,519.4 million and $1,073.5 million, respectively.

Total average debt outstanding for the six months ended May 31, 2026 and 2025 was $5,111.1 million and $4,873.5 million, respectively.

The average short-term borrowings outstanding for the nine months ended August 31, 2026 and 2025 were $1,599.5 million and $1,099.4 million, respectively.

Total average debt outstanding for the nine months ended August 31, 2026 and 2025 was $5,177.3 million and $4,899.4 million, respectively.

The reported values of our assets and liabilities are significantly affected by fluctuations in foreign exchange rates between periods.

At May 31, 2026, the exchange rate for the British pound sterling, Euro, Canadian dollar, Mexican peso, Chinese renminbi, Australian dollar, and Polish zloty were higher than the U.S.

At August 31, 2026, the exchange rate for the British pound sterling, euro, Canadian dollar, Mexican peso, Chinese renminbi, and Australian dollar were higher than the U.S.

dollar at November 30, 2025 while the Polish zloty was lower than the U.S.

dollar at November 30, 2025.

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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.

In March 2026, we entered into the Bridge Commitment Letter in connection with the financing of the pending transaction with Unilever, pursuant to which the Commitment Parties committed to provide, subject to the terms and conditions set forth therein, the Bridge Facility an aggregate principal amount of up to $15.7 billion to fund the cash consideration and related fees and expenses at closing of the pending transaction.

In March 2026, we entered into the Bridge Commitment Letter in connection with the financing of the pending transaction with Unilever Foods, pursuant to which the Commitment Parties committed to provide, subject to the terms and conditions set forth therein, the Bridge Facility in an aggregate principal amount of up to $15.7 billion to fund the cash consideration and related fees and expenses at closing of the pending transaction.

Effective April 28, 2026, we terminated $2.0 billion of the commitments under the Bridge Facility and entered into a term loan agreement as described below, subject to customary closing conditions for similar facilities.

In April 2026, we entered into the Term Loan Agreement by and among us, the lenders party thereto and Citibank, N.A., as the Administrative Agent.

The Term Loan Agreement provides us with the Term Loan Facility at the the Closing Date, subject to satisfaction of customary closing conditions for similar facilities, for the purpose of financing a portion of the cash consideration to be paid in the pending transaction and paying related fees and expenses in connection therewith.

The Term Loan Agreement provides us with the Term Loan Facility at the Closing Date, subject to satisfaction of customary closing conditions for similar facilities, for the purpose of financing a portion of the cash consideration to be paid in the pending transaction and paying related fees and expenses in connection therewith.

The Term Loan Facility may be funded on the Closing Date or, subject to compliance with certain conditions, on the preceding business day, and matures three years after the Closing Date.

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If any of the banks in this syndicate are unable to perform on their commitments, our liquidity could be impacted, which could reduce our ability to grow through funding of our working capital.

We periodically review our banking and financing relationships, considering the stability of the institutions and other aspects of

the relationships.

We periodically review our banking and financing relationships, considering the stability of the institutions and other aspects of the relationships.

In addition, we engage in regular communication with all banks participating in our credit facility.

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New accounting pronouncements are issued periodically that affect our current and future operations.

See Note 1 of notes to the accompanying condensed consolidated financial statements for further details of these impacts.

See our Annual Report on Form 10-K for the fiscal year ended November 30, 2025 and Note 1 of notes to the accompanying condensed consolidated financial statements for further details of these impacts.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

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Other acquired intangible assets such as customer relationships are expected to have determinable useful lives.

Our estimates of the useful lives of definite-lived intangible assets are primarily based upon historical experience, the competitive and

macroeconomic environment, and our operating plans.

Our estimates of the useful lives of definite-lived intangible assets are primarily based upon historical experience, the competitive and macroeconomic environment, and our operating plans.

The costs of definite-lived intangibles are amortized to expense over their estimated life.

FORWARD-LOOKING INFORMATION

Certain statements contained in this report, including statements concerning expected performance such as those relating to net sales, gross margin, earnings, cost savings, special charges, including transaction and integration expenses, mergers, acquisitions, brand marketing support, volume and product mix, income tax expense, tariff-related matters, and the impact of foreign currency rates are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.

Certain statements contained in this report, including statements concerning expected performance such as those relating to net sales, gross margin, earnings, cost savings, special charges, including transaction and integration expenses, mergers, acquisitions, divestitures, brand marketing support, volume and product mix, income tax expense, tariff-related matters, and the impact of foreign currency rates are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.

These statements may be identified by the use of words such as “may,” “will,” “expect,” “should,” “anticipate,” “intend,” “believe,” “plan,” and similar expressions.

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the anticipated benefits and timing of, and our plans, strategies and objectives relating to, the pending transaction with Unilever Foods, including:

due to the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the pending transaction, including changes in relevant tax and other applicable laws;

the failure to obtain necessary regulatory approvals, approval of our shareholders, anticipated tax treatment or any required financing, or to satisfy any of the other conditions to the pending transaction;

the possibility that unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies could impact the value or expected benefit of, timing or pursuit of the pending transaction;

the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the pending transaction, including changes in relevant tax and other applicable laws;

the possibility of failure to obtain necessary regulatory approvals, anticipated tax treatment or any required financing, or to satisfy any of the other conditions to the pending transaction;

the possibility that unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, and business and management strategies could impact the value or expected benefit of, timing or pursuit of the pending transaction;

the risks and costs of the pursuit and/or implementation of the anticipated separation of Unilever Foods' business prior to closing, including the anticipated timing required to complete the separation, any adjustment to the terms of the separation and any changes to the configuration of the businesses included in the separation if implemented;

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the anticipated ownership percentages of McCormick shareholders, Unilever shareholders and Unilever following the closing of the pending transaction;

the effect of the announcement or pendency of the pending transaction on Unilever Foods’ or McCormick’s business relationships, competition, business, financial condition and operating results;

the ability of McCormick to successfully integrate Unilever Foods’ operations and implement its plans, forecasts and other expectations with respect to Unilever Foods’ business or the combined business after the closing of the pending transaction;

the ability of McCormick to manage additional debt and successfully de-lever following the transaction;

the effect of the announcement or pendency of the pending transaction on Unilever Foods’ or our business relationships, competition, business, financial condition and operating results;

our ability to successfully integrate Unilever Foods’ operations and the implementation of and compliance with plans, agreements, forecasts and other expectations with respect to Unilever Foods’ business or the combined business after the closing of the pending transaction;

our ability to manage additional debt and successfully de-lever following the transaction;

general economic and industry conditions, including consumer spending rates, recessions, interest rates, and availability of capital;

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expected trends in net sales, earnings performance, and other financial measures;

the expected impact of pricing actions on the Company's results of operations, including our sales volume and mix as well as gross margins;

the expected impact of pricing actions on our results of operations, including our sales volume and mix as well as gross margins;

the expected impact of the inflationary cost environment on our business;

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the anticipated sufficiency of future cash flows to enable payments of interest, repayment of short- and long-term debt, working capital needs, planned capital expenditures, quarterly dividends, and our ability to obtain additional short- and long-term financing or issue additional debt securities;

and expectations regarding purchasing shares of McCormick's common stock under the existing repurchase authorization.

and expectations regarding purchasing shares of our common stock under the existing repurchase authorization.

These and other forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could significantly affect expected results.

Results may be materially affected by factors such as:

Actual results may be materially affected by factors that are beyond McCormick's and Unilever's control such as:

the Company's ability to drive revenue growth;

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the Company's ability to offset cost pressures or business impacts related to trade policies such as tariffs, including relating to tariff refunds;

the Company's ability to drive productivity improvements, including those related to our CCI program and other streamlining actions;

the Company's ability to drive

productivity improvements, including those related to our CCI program and other streamlining actions;

product quality, labeling, or safety concerns;

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actions by, and the financial condition of, competitors and customers;

the longevity of mutually beneficial

relationships with our large customers;

the longevity of mutually beneficial relationships with our large customers;

the ability to identify, interpret and react to changes in consumer preference and demand;

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labor shortage, turnover and labor cost increases;

the impact of changing political and geopolitical conditions, including the ongoing conflicts between Russia and Ukraine and the war/conflict in the Middle East, including the potential for broader economic disruption;

the impact of changing political and geopolitical conditions, including the ongoing conflicts between Russia and Ukraine and the war/conflict in the Middle East, and the potential for broader economic disruption;

government regulation, and changes in legal and regulatory requirements and enforcement practices;

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foreign currency fluctuations;

the effects of our amount of outstanding indebtedness and related level of debt service as well as the effects that such debt service may have on the Company's ability to borrow or the cost of any such additional borrowing, our credit rating, and our ability to react to certain economic and industry conditions;

the effects of the amount of our outstanding indebtedness and related level of debt service as well as the effects that such debt service may have on the Company's ability to borrow or the cost of any such additional borrowing, our credit rating, and our ability to react to certain economic and industry conditions;

impairments of indefinite-lived intangible assets;

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the Company's inability to successfully implement our business transformation initiative;

fundamental changes in tax laws;

including interpretations and assumptions we have made, and guidance that may be issued, and volatility in our effective tax rate;

fundamental changes in tax laws, including interpretations and assumptions we have made, and guidance that may be issued, and volatility in our effective tax rate;

climate change;

Environmental, Social and Governance (ESG) matters;

sustainability matters;

infringement of intellectual property rights, and those of customers;

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direct transaction costs and substantial transition and integration-related costs associated with the pending transaction;

the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction, and the occurrence of any event, change or other circumstance that could give rise to the termination of the transaction agreement;

the failure to obtain necessary regulatory approvals, anticipated tax treatment or any required financing, or to satisfy any of the other conditions to the transaction;

the possibility that unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies could adversely impact the value or expected benefit of, timing or pursuit of the transaction;

the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction, and the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement;

the failure to obtain necessary regulatory approvals or any required financing, or to satisfy any of the other conditions to the proposed transaction;

the possibility that unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies could adversely impact the value or expected benefit of, timing or pursuit of the proposed transaction;

the risks and costs of the pursuit and/or implementation of the anticipated separation of Unilever Foods' business prior to closing;

uncertainties as to access to available financing to consummate the transaction upon acceptable terms and on a timely basis or at all;

uncertainties as to access to available financing to consummate the proposed transaction upon acceptable terms and on a timely basis or at all;

the failure to obtain the effectiveness of a registration statement on Form S-4 or our receipt of shareholder approval for the transaction;

the effect of the announcement or pendency of the transaction on Unilever Foods' or McCormick's business relationships, competition, business, financial condition and operating results, including risks that the transaction disrupts current plans and operations of Unilever Foods or McCormick;

the ability of Unilever Foods or McCormick to retain and hire key personnel, risks related to diverting either management team's attention from ongoing business operations, and risks associated with third-party contracts containing consent and/or other provisions that may be triggered by the transaction;

the ability of McCormick to successfully integrate Unilever Foods' operations and implement its plans, forecasts and other expectations with respect to Unilever Foods' business or the combined business after the closing of the transaction;

the ability of McCormick to manage additional debt and successfully de-lever following the transaction;

the outcome of any legal proceedings that may be instituted against Unilever Foods or McCormick related to the transaction;

and other risks as described herein under Part II, Item 1A “Risk Factors—Risks Relating to the Proposed Transaction”;

the effect of the announcement or pendency of the transaction on our or Unilever Foods' business relationships, competition, business, financial condition and operating results, including risks that the transaction disrupts current plans and operations of us or Unilever Foods;

our or Unilever Foods' ability to retain and hire key personnel, risks related to diverting either management team's attention from ongoing business operations, and risks associated with third-party contracts containing consent and/or other provisions that may be triggered by the proposed transaction;

our ability to successfully integrate Unilever Foods' operations and the implementation of and compliance with plans, agreements, forecasts and other expectations with respect to Unilever Foods' business or the combined business after the closing of the proposed transaction;

our ability to manage additional debt and successfully de-lever following the proposed transaction;

the outcome of any legal proceedings that may be instituted against us or Unilever Foods related to the proposed transaction;

and other risks as described herein under Part II, Item 1A “Risk Factors—Risks Related to the Proposed Transaction”;

and other risks described in the Company's filings with the Securities and Exchange Commission.

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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 2. Management’s Discussion and Analysis