|
|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Maryland
|
52-0408290
|
(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
|
24 Schilling Road, Suite 1,
|
Hunt Valley,
|
Maryland
|
21031
|
(Address of principal executive offices)
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(Zip Code)
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|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
Common Stock, No Par Value
|
MKC-V
|
New York Stock Exchange
|
Common Stock Non-Voting, No Par Value
|
MKC
|
New York Stock Exchange
|
|
Large Accelerated Filer
|
☒
|
|
Accelerated Filer
|
☐
|
Non-accelerated Filer
|
☐
|
(Do not check if a smaller reporting company)
|
Smaller Reporting Company
|
☐
|
|
|
|
Emerging Growth Company
|
☐
|
Class
|
Number of Shares Outstanding
|
Date
|
Common Stock
|
9,314,335
|
December 31, 2019
|
Common Stock Non-Voting
|
123,599,379
|
December 31, 2019
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Document
|
Part of 10-K into Which Incorporated
|
Proxy Statement for
McCormick’s April 1, 2020
Annual Meeting of Stockholders
(the “2020 Proxy Statement”)
|
Part III
|
PART I.
|
•
|
increasing our debt service obligations, making it more difficult for us to satisfy our obligations;
|
•
|
limiting our ability to borrow additional funds and increasing the cost of any such borrowing;
|
•
|
increasing our exposure to negative fluctuations in interest rates;
|
•
|
subjecting us to financial and other restrictive covenants, the non-compliance with which could result in an event of default;
|
•
|
increasing our vulnerability to, and reducing our flexibility to respond to, general adverse economic and industry conditions;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and
|
•
|
placing us at a competitive disadvantage as compared to our competitors, to the extent that they are not as highly leveraged.
|
PART II.
|
Title of class
|
Approximate
number
of record
holders
|
Common Stock, no par value
|
2,000
|
Common Stock Non-Voting, no par value
|
9,400
|
Period
|
Total number of
shares purchased
|
Average price
paid per share
|
Total number of shares purchased as part of publicly announced plans or programs
|
Approximate dollar value of shares that may yet be purchased under the plans or programs
|
September 1, 2019 to
September 30, 2019
|
CS-0
CSNV-0
|
-
- |
-
-
|
$50 million
|
October 1, 2019 to
October 31, 2019
|
CS-0
CSNV-72,000
|
-
$161.96
|
-
72,000
|
$38 million
|
November 1, 2019 to
November 30, 2019
|
CS-0
CSNV-40,500
|
-
$160.22
|
-
40,500
|
$632 million (1)
|
Total
|
CS-0
CSNV-112,500
|
-
$161.33
|
-
112,500
|
$632 million
|
(1)
|
Includes an additional $600 million of share repurchase authorization approved by our board of directors in November 2019.
|
(millions except per share and percentage data)
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
For the Year
|
|
|
|
|
|
||||||||||
Net sales (1)
|
$
|
5,347.4
|
|
$
|
5,302.8
|
|
$
|
4,730.3
|
|
$
|
4,313.9
|
|
$
|
4,296.3
|
|
Operating income (1)
|
957.7
|
|
891.1
|
|
699.8
|
|
649.4
|
|
548.4
|
|
|||||
Income from unconsolidated operations
|
40.9
|
|
34.8
|
|
33.9
|
|
36.1
|
|
36.7
|
|
|||||
Net income
|
702.7
|
|
933.4
|
|
477.4
|
|
472.3
|
|
401.6
|
|
|||||
Per Common Share
|
|
|
|
|
|
||||||||||
Earnings per share–basic
|
$
|
5.30
|
|
$
|
7.10
|
|
$
|
3.77
|
|
$
|
3.73
|
|
$
|
3.14
|
|
Earnings per share–diluted
|
5.24
|
|
7.00
|
|
3.72
|
|
3.69
|
|
3.11
|
|
|||||
Common dividends declared
|
2.33
|
|
2.13
|
|
1.93
|
|
1.76
|
|
1.63
|
|
|||||
Closing price, non-voting shares–end of year
|
169.25
|
|
150.00
|
|
102.18
|
|
91.20
|
|
85.92
|
|
|||||
Book value per share
|
26.02
|
|
24.09
|
|
19.62
|
|
13.07
|
|
13.25
|
|
|||||
At Year-End
|
|
|
|
|
|
||||||||||
Total assets (2)
|
$
|
10,362.1
|
|
$
|
10,256.4
|
|
$
|
10,385.8
|
|
$
|
4,635.9
|
|
$
|
4,472.6
|
|
Current debt
|
698.4
|
|
643.5
|
|
583.2
|
|
393.2
|
|
343.0
|
|
|||||
Long-term debt (2)
|
3,625.8
|
|
4,052.9
|
|
4,443.9
|
|
1,054.0
|
|
1,051.4
|
|
|||||
Shareholders’ equity
|
3,456.7
|
|
3,182.2
|
|
2,570.9
|
|
1,638.1
|
|
1,686.9
|
|
|||||
Other Financial Measures
|
|
|
|
|
|
||||||||||
Percentage of net sales (1)
|
|
|
|
|
|
||||||||||
Gross profit (1)
|
40.1
|
%
|
39.5
|
%
|
37.9
|
%
|
38.1
|
%
|
40.4
|
%
|
|||||
Operating income (1)
|
17.9
|
%
|
16.8
|
%
|
14.8
|
%
|
15.1
|
%
|
12.8
|
%
|
|||||
Capital expenditures
|
$
|
173.7
|
|
$
|
169.1
|
|
$
|
182.4
|
|
$
|
153.8
|
|
$
|
128.4
|
|
Depreciation and amortization
|
158.8
|
|
150.7
|
|
125.2
|
|
108.7
|
|
105.9
|
|
|||||
Common share repurchases
|
95.1
|
|
62.3
|
|
137.8
|
|
242.7
|
|
145.8
|
|
|||||
Dividends paid
|
302.2
|
|
273.4
|
|
237.6
|
|
217.8
|
|
204.9
|
|
|||||
Average shares outstanding
|
|
|
|
|
|
||||||||||
Basic
|
132.6
|
|
131.5
|
|
126.8
|
|
126.6
|
|
128.0
|
|
|||||
Diluted
|
134.1
|
|
133.2
|
|
128.4
|
|
128.0
|
|
129.2
|
|
(1)
|
Amounts set forth above for Net sales, Operating income, Percentage of net sales - Gross profit, and Percentage of net sales - Operating income for the fiscal years ended 2019-2016 have been recast to reflect the provisions of ASC 606, which we adopted in fiscal 2019 on a full retrospective basis. Amounts set forth above for Operating income, Percentage of net sales - Gross profit, and Percentage of net sales - Operating income for the fiscal years ended 2019-2016 have also been recast to reflect the provisions of ASU 2017-07 regarding the presentation of net periodic pension cost and net periodic postretirement cost. Amounts set forth for the same items in the fiscal year ended 2015 are presented in accordance with guidance in effect in that fiscal year.
|
(2)
|
Total assets and Long-term debt for the fiscal year ended 2015 reflect the provisions of Accounting Standards Updates 2015-03, related to the presentation of debt issuance costs, and 2015-17, related to the classification of deferred tax assets and liabilities, both of which we adopted as of November 30, 2016.
|
(millions except per share data)
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Operating income (1)
|
$
|
(20.8
|
)
|
$
|
(38.8
|
)
|
$
|
(83.9
|
)
|
$
|
(16.0
|
)
|
$
|
(65.5
|
)
|
Net income (2)
|
(14.6
|
)
|
271.4
|
|
(69.3
|
)
|
(11.1
|
)
|
(47.9
|
)
|
|||||
Earnings per share–diluted
|
(0.11
|
)
|
2.03
|
|
(0.54
|
)
|
(0.09
|
)
|
(0.37
|
)
|
(1)
|
In 2019, 2018, 2017, 2016 and 2015, we recorded special charges related to the completion of organization and streamlining actions, including, for 2016 and 2015, special charges related to the discontinuance of bulk-packaged and
|
(2)
|
In 2019 and 2018, we recorded a non-recurring benefit from the U.S. Tax Act of $1.5 million and $301.5 million, respectively.
|
•
|
We grew volume and product mix, with increases in both our consumer and flavor solutions segments. This added 2.5% of sales growth. The increases were driven by new products as well as growth in the base business.
|
•
|
Pricing actions contributed 0.2% of the increase in net sales.
|
•
|
Net sales growth was negatively impacted by fluctuations in currency rates that reduced sales growth by 1.9%. Excluding this impact, we grew sales 2.7% on a constant currency basis.
|
|
2019
|
2018
|
||||
Net sales
|
$
|
5,347.4
|
|
$
|
5,302.8
|
|
Percent growth
|
0.8
|
%
|
12.1
|
%
|
||
Components of percent growth in net sales–increase (decrease):
|
|
|
||||
Volume and product mix
|
2.5
|
%
|
2.2
|
%
|
||
Pricing actions
|
0.2
|
%
|
0.5
|
%
|
||
Acquisitions
|
—
|
%
|
8.2
|
%
|
||
Foreign exchange
|
(1.9
|
)%
|
1.2
|
%
|
|
2019
|
2018
|
||||
Gross profit
|
$
|
2,145.3
|
|
$
|
2,093.3
|
|
Gross profit margin
|
40.1
|
%
|
39.5
|
%
|
|
2019
|
2018
|
||||
Selling, general & administrative expense
|
$
|
1,166.8
|
|
$
|
1,163.4
|
|
Percent of net sales
|
21.8
|
%
|
22.0
|
%
|
|
2019
|
2018
|
||||
Total special charges
|
$
|
20.8
|
|
$
|
16.3
|
|
|
2019
|
2018
|
||||
Transaction and integration expenses
|
$
|
—
|
|
$
|
22.5
|
|
|
2019
|
2018
|
||||
Operating income
|
$
|
957.7
|
|
$
|
891.1
|
|
Percent of net sales
|
17.9
|
%
|
16.8
|
%
|
|
2019
|
2018
|
||||
Interest expense
|
$
|
165.2
|
|
$
|
174.6
|
|
Other income, net
|
26.7
|
|
24.8
|
|
|
2019
|
2018
|
||||
Income from consolidated operations before income taxes
|
$
|
819.2
|
|
$
|
741.3
|
|
Income tax expense (benefit)
|
157.4
|
|
(157.3
|
)
|
||
Effective tax rate
|
19.2
|
%
|
(21.2
|
)%
|
|
2019
|
2018
|
||||
Income from unconsolidated operations
|
$
|
40.9
|
|
$
|
34.8
|
|
2018 Earnings per share—diluted
|
$
|
7.00
|
|
Increase in operating income
|
0.29
|
|
|
Impact of non-recurring tax benefit recognized as a result of the U.S. Tax Act
|
(2.25
|
)
|
|
Increase in special charges
|
(0.02
|
)
|
|
Decrease in transaction and integration expenses attributable to RB Foods acquisition
|
0.13
|
|
|
Decrease in interest expense
|
0.06
|
|
|
Increase in other income
|
0.01
|
|
|
Impact of income taxes
|
0.01
|
|
|
Increase in income from unconsolidated operations
|
0.04
|
|
|
Impact of higher shares
|
(0.03
|
)
|
|
2019 Earnings per share—diluted
|
$
|
5.24
|
|
|
2019
|
2018
|
||||
Net sales
|
$
|
3,269.8
|
|
$
|
3,247.0
|
|
Percent growth
|
0.7
|
%
|
11.9
|
%
|
||
Components of percent growth in net sales–increase (decrease):
|
|
|
||||
Volume and product mix
|
2.4
|
%
|
1.7
|
%
|
||
Pricing actions
|
0.1
|
%
|
0.6
|
%
|
||
Acquisitions
|
—
|
%
|
8.2
|
%
|
||
Foreign exchange
|
(1.8
|
)%
|
1.4
|
%
|
||
|
|
|
||||
Segment operating income
|
$
|
676.3
|
|
$
|
637.1
|
|
Segment operating income margin
|
20.7
|
%
|
19.6
|
%
|
|
2019
|
2018
|
||||
Net sales
|
$
|
2,077.6
|
|
$
|
2,055.8
|
|
Percent growth
|
1.1
|
%
|
12.4
|
%
|
||
Components of percent change in net sales–increase (decrease):
|
|
|
||||
Volume and product mix
|
2.9
|
%
|
3.1
|
%
|
||
Pricing actions
|
0.3
|
%
|
0.3
|
%
|
||
Acquisitions
|
—
|
%
|
8.2
|
%
|
||
Foreign exchange
|
(2.1
|
)%
|
0.8
|
%
|
||
|
|
|
||||
Segment operating income
|
$
|
302.2
|
|
$
|
292.8
|
|
Segment operating income margin
|
14.5
|
%
|
14.2
|
%
|
|
2018
|
2017
|
||||
Net sales
|
$
|
5,302.8
|
|
$
|
4,730.3
|
|
Percent growth
|
12.1
|
%
|
9.7
|
%
|
||
Components of percent growth in net sales–increase (decrease):
|
|
|
||||
Volume and product mix
|
2.2
|
%
|
1.7
|
%
|
||
Pricing actions
|
0.5
|
%
|
2.1
|
%
|
||
Acquisitions
|
8.2
|
%
|
6.6
|
%
|
||
Foreign exchange
|
1.2
|
%
|
(0.7
|
)%
|
|
2018
|
2017
|
||||
Gross profit
|
$
|
2,093.3
|
|
$
|
1,794.0
|
|
Gross profit margin
|
39.5
|
%
|
37.9
|
%
|
|
2018
|
2017
|
||||
Selling, general & administrative expense
|
$
|
1,163.4
|
|
$
|
1,031.2
|
|
Percent of net sales
|
22.0
|
%
|
21.8
|
%
|
|
2018
|
2017
|
||||
Total special charges
|
$
|
16.3
|
|
$
|
22.2
|
|
|
2018
|
2017
|
||||
Transaction expenses included in cost of goods sold
|
$
|
—
|
|
$
|
20.9
|
|
Transaction expenses included in other debt costs
|
—
|
|
15.4
|
|
||
Other transaction and integration expenses
|
22.5
|
|
40.8
|
|
||
Total
|
$
|
22.5
|
|
$
|
77.1
|
|
|
2018
|
2017
|
||||
Operating income
|
$
|
891.1
|
|
$
|
699.8
|
|
Percent of net sales
|
16.8
|
%
|
14.8
|
%
|
|
2018
|
2017
|
||||
Interest expense
|
$
|
174.6
|
|
$
|
95.7
|
|
Other income, net
|
24.8
|
|
6.1
|
|
|
2018
|
2017
|
||||
Income from consolidated operations before income taxes
|
$
|
741.3
|
|
$
|
594.8
|
|
Income tax (benefit) expense
|
(157.3
|
)
|
151.3
|
|
||
Effective tax rate
|
(21.2
|
)%
|
25.4
|
%
|
|
2018
|
2017
|
||||
Income from unconsolidated operations
|
$
|
34.8
|
|
$
|
33.9
|
|
2017 Earnings per share—diluted
|
$
|
3.72
|
|
Increase in operating income
|
0.84
|
|
|
Impact of non-recurring tax benefit recognized as a result of the U.S. Tax Act
|
2.26
|
|
|
Decrease in special charges
|
0.02
|
|
|
Decrease in transaction and integration expenses attributable to RB Foods acquisition
|
0.29
|
|
|
Increase in interest expense
|
(0.46
|
)
|
|
Other impact of income taxes
|
0.40
|
|
|
Increase in other income
|
0.11
|
|
|
Increase in unconsolidated income
|
0.01
|
|
|
Impact of higher shares outstanding
|
(0.19
|
)
|
|
2018 Earnings per share—diluted
|
$
|
7.00
|
|
|
2018
|
2017
|
||||
Net sales
|
$
|
3,247.0
|
|
$
|
2,901.6
|
|
Percent growth
|
11.9
|
%
|
8.0
|
%
|
||
Components of percent growth in net sales–increase (decrease):
|
|
|
||||
Volume and product mix
|
1.7
|
%
|
0.2
|
%
|
||
Pricing actions
|
0.6
|
%
|
2.3
|
%
|
||
Acquisitions
|
8.2
|
%
|
5.6
|
%
|
||
Foreign exchange
|
1.4
|
%
|
(0.1
|
)%
|
||
|
|
|
||||
Segment operating income
|
$
|
637.1
|
|
$
|
562.4
|
|
Segment operating income margin
|
19.6
|
%
|
19.4
|
%
|
|
2018
|
2017
|
||||
Net sales
|
$
|
2,055.8
|
|
$
|
1,828.7
|
|
Percent growth
|
12.4
|
%
|
12.4
|
%
|
||
Components of percent growth in net sales–increase (decrease):
|
|
|
||||
Volume and product mix
|
3.1
|
%
|
3.8
|
%
|
||
Pricing actions
|
0.3
|
%
|
2.0
|
%
|
||
Acquisitions
|
8.2
|
%
|
8.2
|
%
|
||
Foreign exchange
|
0.8
|
%
|
(1.6
|
)%
|
||
|
|
|
||||
Segment operating income
|
$
|
292.8
|
|
$
|
221.3
|
|
Segment operating income margin
|
14.2
|
%
|
12.1
|
%
|
•
|
Special charges – Special charges consist of expenses associated with certain actions undertaken by the Company to reduce fixed costs, simplify or improve processes, and improve our competitiveness and are of such significance in terms of both up-front costs and organizational/structural impact to require advance approval by our Management Committee. Upon presentation of any such proposed action (including details with respect to estimated costs, which generally consist principally of employee severance and related benefits, together with ancillary costs associated with the action that may include a non-cash component or a component which relates to inventory adjustments that are included in cost of goods sold; impacted employees or operations; expected timing; and expected savings) to the Management Committee and the Committee’s advance approval, expenses associated with the approved action are classified as special charges upon recognition and monitored on an ongoing basis through completion. In 2018, we also included in special charges, as approved by our Management Committee, expense associated with a one-time payment, made to eligible U.S. hourly employees, to distribute a portion of the non-recurring net income tax benefit recognized in connection with the enactment of the U.S. Tax Act as that non-recurring income tax benefit is excluded from our computation of adjusted income taxes, adjusted net income and adjusted diluted earnings per share, each a non-GAAP measure.
|
•
|
Transaction and integration expenses associated with the RB Foods acquisition – We exclude certain costs associated with our acquisition of RB Foods in August 2017 and its subsequent integration into the Company. Such costs, which we refer to as “Transaction and integration costs”, include transaction costs associated with the acquisition, as well as integration costs following the acquisition. The size of this
|
•
|
Income taxes associated with the U.S. Tax Act – In connection with the enactment of the U.S. Tax Act in December 2017, we recorded a net non-recurring income tax benefit of $301.5 million during the year ended November 30, 2018, which included the estimated impact of the tax benefit from revaluation of net U.S. deferred tax liabilities based on the new lower corporate income tax rate and the tax expense associated with the one-time transition tax on previously unremitted earnings of non-U.S. subsidiaries. We recorded an additional net income tax benefit of $1.5 million during the year ended November 30, 2019 associated with a U.S Tax Act related provision to return adjustment.
|
|
2019
|
2018
|
2017
|
||||||
Gross profit
|
$
|
2,145.3
|
|
$
|
2,093.3
|
|
$
|
1,794.0
|
|
Impact of transaction and integration expenses included in cost of goods sold (1)
|
—
|
|
—
|
|
20.9
|
|
|||
Adjusted gross profit
|
$
|
2,145.3
|
|
$
|
2,093.3
|
|
$
|
1,814.9
|
|
Adjusted gross profit margin (2)
|
40.1
|
%
|
39.5
|
%
|
38.4
|
%
|
|||
Operating income
|
$
|
957.7
|
|
$
|
891.1
|
|
$
|
699.8
|
|
Impact of transaction and integration expenses included in cost of goods sold (1)
|
—
|
|
—
|
|
20.9
|
|
|||
Impact of other transaction and integration expenses (1)
|
—
|
|
22.5
|
|
40.8
|
|
|||
Impact of special charges
|
20.8
|
|
16.3
|
|
22.2
|
|
|||
Adjusted operating income
|
$
|
978.5
|
|
$
|
929.9
|
|
$
|
783.7
|
|
% increase versus prior year
|
5.2
|
%
|
18.7
|
%
|
17.8
|
%
|
|||
Adjusted operating income margin (2)
|
18.3
|
%
|
17.5
|
%
|
16.6
|
%
|
|||
Income tax expense (benefit)
|
$
|
157.4
|
|
$
|
(157.3
|
)
|
$
|
151.3
|
|
Non-recurring benefit, net, of the U.S. Tax Act (3)
|
1.5
|
|
301.5
|
|
—
|
|
|||
Impact of transaction and integration expenses
|
—
|
|
4.9
|
|
23.6
|
|
|||
Impact of special charges
|
4.7
|
|
3.8
|
|
6.4
|
|
|||
Adjusted income tax expense
|
$
|
163.6
|
|
$
|
152.9
|
|
$
|
181.3
|
|
Adjusted income tax rate(4)
|
19.5
|
%
|
19.6
|
%
|
26.1
|
%
|
|||
Net income
|
$
|
702.7
|
|
$
|
933.4
|
|
$
|
477.4
|
|
Impact of total transaction and integration expenses (1)
|
—
|
|
17.6
|
|
53.5
|
|
|||
Impact of total special charges
|
16.1
|
|
12.5
|
|
15.8
|
|
|||
Non-recurring benefit, net, of the U.S. Tax Act (3)
|
(1.5
|
)
|
(301.5
|
)
|
—
|
|
|||
Adjusted net income
|
$
|
717.3
|
|
$
|
662.0
|
|
$
|
546.7
|
|
% increase versus prior year
|
8.4
|
%
|
21.1
|
%
|
13.1
|
%
|
|||
Earnings per share—diluted
|
$
|
5.24
|
|
$
|
7.00
|
|
$
|
3.72
|
|
Impact of total transaction and integration expenses (1)
|
—
|
|
0.13
|
|
0.42
|
|
|||
Impact of total special charges
|
0.12
|
|
0.10
|
|
0.12
|
|
|||
Non-recurring benefit, net, of the U.S. Tax Act (3)
|
(0.01
|
)
|
(2.26
|
)
|
—
|
|
|||
Adjusted earnings per share—diluted
|
$
|
5.35
|
|
$
|
4.97
|
|
$
|
4.26
|
|
% increase versus prior year
|
7.6
|
%
|
16.7
|
%
|
12.7
|
%
|
|
|
Estimate for the year ending November 30, 2020
|
|
|
|
Earnings per share – diluted
|
$5.15 to $5.25
|
|
Impact of special charges
|
0.05
|
|
Adjusted earnings per share – diluted
|
$5.20 to $5.30
|
|
For the year ended November 30, 2019
|
|||||
|
Percentage change as reported
|
Impact of foreign currency exchange
|
Percentage change on constant currency basis
|
|||
Net sales:
|
|
|
|
|||
Consumer segment:
|
|
|
|
|||
Americas
|
2.4
|
%
|
(0.3
|
)%
|
2.7
|
%
|
EMEA
|
(5.5
|
)%
|
(5.3
|
)%
|
(0.2
|
)%
|
Asia/Pacific
|
0.8
|
%
|
(4.9
|
)%
|
5.7
|
%
|
Total Consumer
|
0.7
|
%
|
(1.8
|
)%
|
2.5
|
%
|
Flavor Solutions segment:
|
|
|
|
|||
Americas
|
2.2
|
%
|
(0.4
|
)%
|
2.6
|
%
|
EMEA
|
(0.3
|
)%
|
(7.0
|
)%
|
6.7
|
%
|
Asia/Pacific
|
(3.4
|
)%
|
(4.0
|
)%
|
0.6
|
%
|
Total Flavor Solutions
|
1.1
|
%
|
(2.1
|
)%
|
3.2
|
%
|
Total net sales
|
0.8
|
%
|
(1.9
|
)%
|
2.7
|
%
|
|
|
|
|
|||
Adjusted operating income:
|
|
|
|
|||
Consumer segment
|
6.1
|
%
|
(1.2
|
)%
|
7.3
|
%
|
Flavor Solutions segment
|
3.2
|
%
|
(2.1
|
)%
|
5.3
|
%
|
Total adjusted operating income
|
5.2
|
%
|
(1.5
|
)%
|
6.7
|
%
|
|
For the year ended November 30, 2018
|
|||||
|
Percentage change as reported
|
Impact of foreign currency exchange
|
Percentage change on constant currency basis
|
|||
Net sales:
|
|
|
|
|||
Consumer segment:
|
|
|
|
|||
Americas
|
13.4
|
%
|
0.1
|
%
|
13.3
|
%
|
EMEA
|
6.9
|
%
|
5.3
|
%
|
1.6
|
%
|
Asia/Pacific
|
11.5
|
%
|
2.5
|
%
|
9.0
|
%
|
Total Consumer
|
11.9
|
%
|
1.4
|
%
|
10.5
|
%
|
Flavor Solutions segment:
|
|
|
|
|||
Americas
|
15.1
|
%
|
0.1
|
%
|
15.0
|
%
|
EMEA
|
8.6
|
%
|
2.3
|
%
|
6.3
|
%
|
Asia/Pacific
|
3.9
|
%
|
2.3
|
%
|
1.6
|
%
|
Total Flavor Solutions
|
12.4
|
%
|
0.8
|
%
|
11.6
|
%
|
Total net sales
|
12.1
|
%
|
1.2
|
%
|
10.9
|
%
|
|
|
|
|
|||
Adjusted operating income:
|
|
|
|
|||
Consumer segment
|
13.3
|
%
|
0.9
|
%
|
12.4
|
%
|
Flavor Solutions segment
|
32.3
|
%
|
—
|
%
|
32.3
|
%
|
Total adjusted operating income
|
18.7
|
%
|
0.7
|
%
|
18.0
|
%
|
|
2019
|
2018
|
2017
|
||||||
Net income
|
$
|
702.7
|
|
$
|
933.4
|
|
$
|
477.4
|
|
Depreciation and amortization
|
158.8
|
|
150.7
|
|
125.2
|
|
|||
Interest expense
|
165.2
|
|
174.6
|
|
95.7
|
|
|||
Income tax expense (benefit)
|
157.4
|
|
(157.3
|
)
|
151.3
|
|
|||
EBITDA
|
1,184.1
|
|
1,101.4
|
|
849.6
|
|
|||
Adjustments to EBITDA (1)
|
47.9
|
|
57.3
|
|
117.4
|
|
|||
Adjusted EBITDA
|
$
|
1,232.0
|
|
$
|
1,158.7
|
|
$
|
967.0
|
|
|
|
|
|
||||||
Net debt (2)
|
$
|
4,243.8
|
|
$
|
4,674.8
|
|
$
|
4,915.3
|
|
|
|
|
|
||||||
Leverage ratio (Net debt/Adjusted EBITDA) (3)
|
3.4
|
|
4.0
|
|
5.1
|
|
(1)
|
Adjustments to EBITDA are determined under the leverage ratio covenant in our $1.0 billion revolving credit facility and term loan agreements and include special charges, stock-based compensation expense, interest income and, for the years ended November 30, 2018 and 2017, transaction and integration expenses (related to RB Foods acquisition), including other debt costs.
|
|
(2)
|
The leverage ratio covenant in our $1.0 billion revolving credit facility and the term loan agreements define net debt as the sum of short-term borrowings, current portion of long-term debt, and long-term debt, less the amount of cash and cash equivalents that exceed $75.0 million.
|
|
(3)
|
The leverage ratio covenant in our $1.0 billion revolving credit facility and the term loan agreements provide that Adjusted EBITDA also includes the pro forma impact of acquisitions. As of November 30, 2017, our leverage ratio under the terms of those agreements, including the pro forma impact of acquisitions was 4.5.
|
|
2019
|
2018
|
2017
|
||||||
Net cash provided by operating activities
|
$
|
946.8
|
|
$
|
821.2
|
|
$
|
815.3
|
|
Net cash used in investing activities
|
(171.0
|
)
|
(158.5
|
)
|
(4,508.3
|
)
|
|||
Net cash (used in) provided by financing activities
|
(725.8
|
)
|
(751.1
|
)
|
3,756.0
|
|
|
2019
|
2018
|
2017
|
|||
Cash Conversion Cycle
|
43
|
|
55
|
|
76
|
|
|
2019
|
2018
|
2017
|
||||||
Number of shares of common stock
|
0.7
|
|
0.5
|
|
1.4
|
|
|||
Dollar amount
|
$
|
95.1
|
|
$
|
62.3
|
|
$
|
137.8
|
|
|
2019
|
2018
|
2017
|
||||||
Total dividends paid
|
$
|
302.2
|
|
$
|
273.4
|
|
$
|
237.6
|
|
Dividends paid per share
|
2.28
|
|
2.08
|
|
1.88
|
|
|||
Percentage increase per share
|
9.6
|
%
|
10.6
|
%
|
9.3
|
%
|
|
2019
|
2018
|
2017
|
||
Leverage ratio
|
3.4
|
|
4.0
|
|
5.1 (1)
|
•
|
On December 15, 2016, we purchased 100% of the shares of Enrico Giotti SpA (Giotti), a leading European flavor manufacturer located in Italy, for a cash payment of $123.8 million, net of cash acquired of $1.2 million. The acquisition was funded with cash and short-term borrowings. Giotti is well known in the industry for its innovative beverage, sweet, savory and dairy flavor applications. Our acquisition of Giotti in fiscal 2017 expanded the breadth of value-added products for McCormick's flavor solutions segment, including additional expertise in flavoring health and nutrition products.
|
•
|
On August 17, 2017, we completed the acquisition of RB Foods. The purchase price was approximately $4.21 billion, net of acquired cash of $24.3 million, and included a preliminary working capital adjustment of $11.2 million. In December 2017, we paid $4.2 million associated with the final working capital adjustment. The acquisition was funded through our issuance of approximately 6.35 million shares of common stock non-voting (see note 13 of the accompanying financial statements) and through new borrowings comprised of senior unsecured notes and pre-payable term loans (see note 6 of the accompanying financial statements). The acquired market-leading brands of RB Foods include French’s, Frank’s RedHot and Cattlemen’s, which are a natural strategic fit with our robust global branded flavor portfolio. We believe that these additions move us to a leading position in the attractive U.S. condiments category and provide significant international growth opportunities for our consumer and flavor solutions segments. The operations of RB Foods have been included as a component of our consumer and flavor solutions segments from the date of acquisition.
|
Currency sold
|
Currency received
|
Notional
value
|
Average
contractual
exchange
rate
|
Fair
value
|
|||||
British pound sterling
|
U.S. dollar
|
$
|
34.5
|
|
1.27
|
|
$
|
(0.8
|
)
|
Canadian dollar
|
U.S. dollar
|
105.1
|
|
0.76
|
|
0.5
|
|
||
U.S. dollar
|
Australian dollar
|
16.6
|
|
0.70
|
|
(0.4
|
)
|
||
Polish zloty
|
U.S. dollar
|
18.5
|
|
3.90
|
|
0.1
|
|
||
Australian dollar
|
Euro
|
41.4
|
|
1.64
|
|
0.1
|
|
||
Swiss franc
|
Euro
|
66.2
|
|
1.13
|
|
(1.9
|
)
|
||
Canadian dollar
|
British pound sterling
|
29.5
|
|
1.65
|
|
1.5
|
|
||
U.S. dollar
|
Australian dollar
|
27.1
|
|
0.68
|
|
(0.1
|
)
|
||
U.S. dollar
|
British pound sterling
|
102.7
|
|
1.29
|
|
0.6
|
|
||
U.S. dollar
|
Canadian dollar
|
4.2
|
|
0.77
|
|
(0.1
|
)
|
||
U.S. dollar
|
Euro
|
21.5
|
|
1.10
|
|
—
|
|
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
Total
|
Fair value
|
||||||||||||||
Debt
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate
|
$
|
7.1
|
|
$
|
257.3
|
|
$
|
757.5
|
|
$
|
257.8
|
|
$
|
2,165.9
|
|
$
|
3,445.6
|
|
$
|
3,578.0
|
|
Average interest rate
|
3.45
|
%
|
3.89
|
%
|
2.71
|
%
|
3.50
|
%
|
3.52
|
%
|
—
|
|
—
|
|
|||||||
Variable rate
|
$
|
691.3
|
|
$
|
83.8
|
|
$
|
106.6
|
|
$
|
—
|
|
$
|
—
|
|
$
|
881.7
|
|
$
|
881.7
|
|
Average interest rate
|
2.55
|
%
|
2.89
|
%
|
2.91
|
%
|
|
|
—
|
|
—
|
|
•
|
We issued $250 million of 3.90% notes due in 2021 in July 2011. Forward treasury lock agreements, settled upon the issuance of these notes in 2011, effectively set the interest rate on the $250 million notes at a weighted-average fixed rate of 4.01%.
|
•
|
We issued $250 million of 3.50% notes due in 2023 in August 2013. Forward treasury lock agreements settled upon issuance of these notes effectively set the interest rate on these notes at a weighted-average fixed rate of 3.30%.
|
•
|
We issued $250 million of 3.25% notes due in 2025 in November 2015. Forward treasury lock agreements settled upon issuance of these notes effectively set the interest rate on these notes at a weighted-average fixed rate of 3.45%. The fixed interest rate on $100 million of the 3.25% notes due in December 2025 was effectively converted to a variable rate by interest rate swaps through 2025. Net interest payments are based on 3-month LIBOR plus 1.22% during this period.
|
•
|
We issued an aggregate amount of $2.5 billion of senior unsecured notes in August 2017. These notes are due as follows: $750 million due August 15, 2022, $700 million due August 15, 2024, $750 million due August 15, 2027 and $300 million due August 15, 2047 with stated fixed interest rates of 2.70%, 3.15%, 3.40% and 4.20%, respectively. Forward treasury lock agreements settled upon issuance of the $750 million notes due August 15, 2027 effectively set the interest rate on these $750 million notes at a weighted-average fixed rate of 3.44%. The fixed interest rate on $250 million of the 3.40% notes due in 2027 was effectively converted to a variable rate by interest rate swaps through 2027. Net interest payments are based on 3-month LIBOR plus 0.685% during this period
|
|
|
|
|
|
|
|
Total
|
Less than
1 year
|
1–3
years
|
3–5
years
|
More than
5 years
|
||||||||||
Short-term borrowings
|
$
|
600.7
|
|
$
|
600.7
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Long-term debt, including capital leases
|
3,726.6
|
|
97.7
|
|
1,205.3
|
|
1,020.9
|
|
1,402.7
|
|
|||||
Operating leases
|
162.2
|
|
41.8
|
|
61.5
|
|
26.6
|
|
32.3
|
|
|||||
Interest payments
|
859.9
|
|
118.5
|
|
212.7
|
|
154.6
|
|
374.1
|
|
|||||
Raw material purchase obligations(a)
|
492.4
|
|
492.4
|
|
—
|
|
—
|
|
—
|
|
|||||
Other purchase obligations(b)
|
160.4
|
|
76.1
|
|
35.2
|
|
18.4
|
|
30.7
|
|
|||||
Total contractual cash obligations
|
$
|
6,002.2
|
|
$
|
1,427.2
|
|
$
|
1,514.7
|
|
$
|
1,220.5
|
|
$
|
1,839.8
|
|
(a)
|
Raw material purchase obligations outstanding as of year end may not be indicative of outstanding obligations throughout the year due to our response to varying raw material cycles.
|
(b)
|
Other purchase obligations consist of information technology and other service agreements, advertising media commitments and utility contracts.
|
|
Total
|
Less than
1 year
|
1–3
years
|
3–5
years
|
More than
5 years
|
||||||||||
Guarantees
|
$
|
0.6
|
|
$
|
0.6
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Standby letters of credit
|
32.2
|
|
32.2
|
|
—
|
|
—
|
|
—
|
|
|||||
Total commercial commitments
|
$
|
32.8
|
|
$
|
32.8
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Lawrence E. Kurzius
|
|
Chairman, President &
Chief Executive Officer
|
Michael R. Smith
|
|
Executive Vice President &
Chief Financial Officer
|
Christina M. McMullen
|
|
Vice President & Controller
Chief Accounting Officer
|
|
Valuation of Indefinite-lived Intangible Assets
|
|
|
Description of the Matter
|
At November 30, 2019, the Company's indefinite-lived intangible assets consist of brand names and trademarks with an aggregate carrying value of approximately $2.6 billion. As explained in Note 1 to the consolidated financial statements, these assets are assessed for impairment at least annually primarily using the relief-from-royalty methodology to determine their fair values. If the fair value of any of the brand names or trademarks is less than its carrying amount, an impairment loss is recognized in an amount equal to the difference.
Auditing the Company's impairment assessments is complex due to the significant estimation required in determining the fair value of the brand names and trademarks. Significant management judgment is also involved in determining whether individual brand names and trademarks should be grouped for purposes of the fair value determination or must be evaluated individually. The Company's methodologies for estimating the fair value of these assets involve significant assumptions and inputs, including projected financial information for net sales and operating profit by brand, royalty rates, and discount rates, all of which are sensitive to and affected by economic, industry, and company-specific qualitative factors. These significant assumptions and inputs are forward-looking and could be affected by future economic and market conditions.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over the Company’s indefinite-lived intangible asset review process, including controls over management’s review of its asset groupings and the significant assumptions described above. We tested controls over the review of methodologies used, significant assumptions and inputs, and completeness and accuracy of the data used in the measurements.
To test the estimated fair value of the Company’s indefinite-lived intangible assets, we performed audit procedures that included, among others, evaluating the asset groupings used by the Company to perform its impairment assessment, assessing the methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analyses. We compared the significant assumptions to current industry, market and economic trends, to the Company's historical results, to other guideline companies within the same industry, and to other relevant data. In addition, we evaluated management’s ability to estimate revenues by comparing the current year actual revenues for certain brand names or trademarks to the estimates made in the Company’s prior year impairment assessment. We also performed sensitivity analyses of the significant assumptions to evaluate the potential change in the fair values of the brand names and trademarks resulting from hypothetical changes in underlying assumptions. We used an internal valuation specialist to assist in our evaluation of the methodologies used and significant assumptions and inputs used to determine the fair value of certain brand names and trademarks.
|
for the year ended November 30 (millions except per share data)
|
2019
|
2018
|
2017
|
||||||
Net sales
|
$
|
5,347.4
|
|
$
|
5,302.8
|
|
$
|
4,730.3
|
|
Cost of goods sold
|
3,202.1
|
|
3,209.5
|
|
2,936.3
|
|
|||
Gross profit
|
2,145.3
|
|
2,093.3
|
|
1,794.0
|
|
|||
Selling, general and administrative expense
|
1,166.8
|
|
1,163.4
|
|
1,031.2
|
|
|||
Transaction and integration expenses (related to RB Foods acquisition)
|
—
|
|
22.5
|
|
40.8
|
|
|||
Special charges
|
20.8
|
|
16.3
|
|
22.2
|
|
|||
Operating income
|
957.7
|
|
891.1
|
|
699.8
|
|
|||
Interest expense
|
165.2
|
|
174.6
|
|
95.7
|
|
|||
Other debt costs
|
—
|
|
—
|
|
15.4
|
|
|||
Other income, net
|
26.7
|
|
24.8
|
|
6.1
|
|
|||
Income from consolidated operations before income taxes
|
819.2
|
|
741.3
|
|
594.8
|
|
|||
Income tax expense (benefit)
|
157.4
|
|
(157.3
|
)
|
151.3
|
|
|||
Net income from consolidated operations
|
661.8
|
|
898.6
|
|
443.5
|
|
|||
Income from unconsolidated operations
|
40.9
|
|
34.8
|
|
33.9
|
|
|||
Net income
|
$
|
702.7
|
|
$
|
933.4
|
|
$
|
477.4
|
|
Earnings per share–basic
|
$
|
5.30
|
|
$
|
7.10
|
|
$
|
3.77
|
|
Earnings per share–diluted
|
$
|
5.24
|
|
$
|
7.00
|
|
$
|
3.72
|
|
for the year ended November 30 (millions)
|
2019
|
2018
|
2017
|
||||||
Net income
|
$
|
702.7
|
|
$
|
933.4
|
|
$
|
477.4
|
|
Net income attributable to non-controlling interest
|
1.9
|
|
3.3
|
|
1.6
|
|
|||
Other comprehensive income (loss):
|
|
|
|
||||||
Unrealized components of pension and other postretirement plans (including curtailment gains of $18.0 and $76.7 for 2018 and 2017, respectively)
|
(149.8
|
)
|
72.6
|
|
103.2
|
|
|||
Currency translation adjustments
|
(25.5
|
)
|
(119.8
|
)
|
174.6
|
|
|||
Change in derivative financial instruments
|
1.1
|
|
2.3
|
|
(12.5
|
)
|
|||
Deferred taxes
|
33.2
|
|
(17.2
|
)
|
(30.8
|
)
|
|||
Total other comprehensive income (loss)
|
(141.0
|
)
|
(62.1
|
)
|
234.5
|
|
|||
|
|
|
|
||||||
Comprehensive income
|
$
|
563.6
|
|
$
|
874.6
|
|
$
|
713.5
|
|
at November 30 (millions)
|
2019
|
2018
|
||||
Assets
|
|
|
||||
Cash and cash equivalents
|
$
|
155.4
|
|
$
|
96.6
|
|
Trade accounts receivable, less allowances of $5.6 for 2019 and $6.4 for 2018
|
502.9
|
|
518.1
|
|
||
Inventories
|
801.2
|
|
786.3
|
|
||
Prepaid expenses and other current assets
|
90.7
|
|
78.9
|
|
||
Total current assets
|
1,550.2
|
|
1,479.9
|
|
||
Property, plant and equipment, net
|
952.6
|
|
941.5
|
|
||
Goodwill
|
4,505.2
|
|
4,527.9
|
|
||
Intangible assets, net
|
2,847.0
|
|
2,873.3
|
|
||
Other long-term assets
|
507.1
|
|
433.8
|
|
||
Total assets
|
$
|
10,362.1
|
|
$
|
10,256.4
|
|
Liabilities
|
|
|
||||
Short-term borrowings
|
$
|
600.7
|
|
$
|
560.0
|
|
Current portion of long-term debt
|
97.7
|
|
83.5
|
|
||
Trade accounts payable
|
846.9
|
|
710.0
|
|
||
Other accrued liabilities
|
609.1
|
|
648.2
|
|
||
Total current liabilities
|
2,154.4
|
|
2,001.7
|
|
||
Long-term debt
|
3,625.8
|
|
4,052.9
|
|
||
Deferred taxes
|
697.6
|
|
706.5
|
|
||
Other long-term liabilities
|
427.6
|
|
313.1
|
|
||
Total liabilities
|
6,905.4
|
|
7,074.2
|
|
||
Shareholders’ equity
|
|
|
||||
Common stock, no par value; authorized 320.0 shares; issued and outstanding:
2019–9.3 shares, 2018–9.6 shares
|
447.6
|
|
400.2
|
|
||
Common stock non-voting, no par value; authorized 320.0 shares; issued and outstanding: 2019–123.6 shares, 2018–122.5 shares
|
1,441.0
|
|
1,370.4
|
|
||
Retained earnings
|
2,055.8
|
|
1,760.2
|
|
||
Accumulated other comprehensive loss
|
(500.2
|
)
|
(359.9
|
)
|
||
Total McCormick shareholders’ equity
|
3,444.2
|
|
3,170.9
|
|
||
Non-controlling interests
|
12.5
|
|
11.3
|
|
||
Total shareholders’ equity
|
3,456.7
|
|
3,182.2
|
|
||
Total liabilities and shareholders’ equity
|
$
|
10,362.1
|
|
$
|
10,256.4
|
|
for the year ended November 30 (millions)
|
2019
|
2018
|
2017
|
||||||
Operating activities
|
|
|
|
||||||
Net income
|
$
|
702.7
|
|
$
|
933.4
|
|
$
|
477.4
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
158.8
|
|
150.7
|
|
125.2
|
|
|||
Stock-based compensation
|
37.2
|
|
25.6
|
|
23.9
|
|
|||
Noncash nonrecurring income tax benefit (related to enactment of the U.S. Tax Act)
|
—
|
|
(309.4
|
)
|
—
|
|
|||
Special charges and transaction and integration expenses
|
—
|
|
3.0
|
|
19.1
|
|
|||
Amortization of inventory fair value adjustment associated with acquisition of RB Foods
|
—
|
|
—
|
|
20.9
|
|
|||
(Gain) loss on sale of assets
|
(1.6
|
)
|
(5.4
|
)
|
1.3
|
|
|||
Deferred income tax expense
|
20.9
|
|
40.1
|
|
24.1
|
|
|||
Income from unconsolidated operations
|
(40.9
|
)
|
(34.8
|
)
|
(33.9
|
)
|
|||
Settlement of forward-starting interest rate swaps
|
—
|
|
—
|
|
(2.9
|
)
|
|||
Changes in operating assets and liabilities (net of effect of businesses acquired):
|
|
|
|
||||||
Trade accounts receivable
|
12.2
|
|
19.8
|
|
(13.0
|
)
|
|||
Inventories
|
(20.9
|
)
|
(10.0
|
)
|
44.6
|
|
|||
Trade accounts payable
|
128.2
|
|
72.8
|
|
98.2
|
|
|||
Other assets and liabilities
|
(81.5
|
)
|
(91.8
|
)
|
6.8
|
|
|||
Dividends received from unconsolidated affiliates
|
31.7
|
|
27.2
|
|
23.6
|
|
|||
Net cash provided by operating activities
|
946.8
|
|
821.2
|
|
815.3
|
|
|||
Investing activities
|
|
|
|
||||||
Acquisitions of businesses (net of cash acquired)
|
—
|
|
(4.2
|
)
|
(4,327.4
|
)
|
|||
Capital expenditures (including expenditures for capitalized software)
|
(173.7
|
)
|
(169.1
|
)
|
(182.4
|
)
|
|||
Other investing activities
|
2.7
|
|
14.8
|
|
1.5
|
|
|||
Net cash used in investing activities
|
(171.0
|
)
|
(158.5
|
)
|
(4,508.3
|
)
|
|||
Financing activities
|
|
|
|
||||||
Short-term borrowings, net
|
41.0
|
|
305.5
|
|
(134.6
|
)
|
|||
Long-term debt borrowings
|
—
|
|
25.9
|
|
3,989.6
|
|
|||
Payment of debt issuance costs
|
—
|
|
—
|
|
(7.7
|
)
|
|||
Long-term debt repayments
|
(447.7
|
)
|
(797.9
|
)
|
(272.7
|
)
|
|||
Proceeds from exercised stock options
|
90.9
|
|
78.2
|
|
29.5
|
|
|||
Taxes withheld and paid on employee stock awards
|
(12.7
|
)
|
(11.6
|
)
|
(5.8
|
)
|
|||
Payment of contingent consideration
|
—
|
|
(2.5
|
)
|
(19.7
|
)
|
|||
Purchase of minority interest
|
—
|
|
(13.0
|
)
|
(1.2
|
)
|
|||
Issuance of common stock non-voting (net of issuance costs of $0.9)
|
—
|
|
—
|
|
554.0
|
|
|||
Common stock acquired by purchase
|
(95.1
|
)
|
(62.3
|
)
|
(137.8
|
)
|
|||
Dividends paid
|
(302.2
|
)
|
(273.4
|
)
|
(237.6
|
)
|
|||
Net cash (used in) provided by financing activities
|
(725.8
|
)
|
(751.1
|
)
|
3,756.0
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
8.8
|
|
(1.8
|
)
|
5.4
|
|
|||
Increase (decrease) in cash and cash equivalents
|
58.8
|
|
(90.2
|
)
|
68.4
|
|
|||
Cash and cash equivalents at beginning of year
|
96.6
|
|
186.8
|
|
118.4
|
|
|||
Cash and cash equivalents at end of year
|
$
|
155.4
|
|
$
|
96.6
|
|
$
|
186.8
|
|
(millions)
|
Common Stock Shares
|
Common Stock
Non-Voting Shares
|
Common Stock Amount
|
Retained Earnings
|
Accumulated Other Comprehensive (Loss) Income
|
Non-controlling Interests
|
Total Shareholders’ Equity
|
||||||||||||
Balance, November 30, 2016
|
11.4
|
|
113.9
|
|
$
|
1,084.2
|
|
$
|
1,056.8
|
|
$
|
(514.4
|
)
|
$
|
11.5
|
|
$
|
1,638.1
|
|
Net income
|
|
|
—
|
|
477.4
|
|
—
|
|
—
|
|
477.4
|
|
|||||||
Net income attributable to non-controlling interest
|
|
|
—
|
|
—
|
|
—
|
|
1.6
|
|
1.6
|
|
|||||||
Other comprehensive income (loss), net of tax
|
|
|
—
|
|
—
|
|
234.9
|
|
(0.4
|
)
|
234.5
|
|
|||||||
Dividends
|
|
|
—
|
|
(247.0
|
)
|
—
|
|
—
|
|
(247.0
|
)
|
|||||||
Buyout of minority interest
|
|
|
—
|
|
0.6
|
|
—
|
|
(1.7
|
)
|
(1.1
|
)
|
|||||||
Stock-based compensation
|
|
|
23.9
|
|
—
|
|
—
|
|
—
|
|
23.9
|
|
|||||||
Shares issued in connection with RB Foods acquisition
|
—
|
|
6.4
|
|
554.0
|
|
—
|
|
—
|
|
—
|
|
554.0
|
|
|||||
Shares purchased and retired
|
(0.4
|
)
|
(1.1
|
)
|
(23.8
|
)
|
(121.3
|
)
|
—
|
|
—
|
|
(145.1
|
)
|
|||||
Shares issued, including tax benefit of $8.1
|
0.7
|
|
0.1
|
|
34.6
|
|
—
|
|
—
|
|
—
|
|
34.6
|
|
|||||
Equal exchange
|
(1.7
|
)
|
1.7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Balance, November 30, 2017
|
10.0
|
|
121.0
|
|
$
|
1,672.9
|
|
$
|
1,166.5
|
|
$
|
(279.5
|
)
|
$
|
11.0
|
|
$
|
2,570.9
|
|
Net income
|
|
|
—
|
|
933.4
|
|
—
|
|
—
|
|
933.4
|
|
|||||||
Net income attributable to non-controlling interest
|
|
|
—
|
|
—
|
|
—
|
|
3.3
|
|
3.3
|
|
|||||||
Other comprehensive loss, net of tax
|
|
|
—
|
|
—
|
|
(59.5
|
)
|
(2.6
|
)
|
(62.1
|
)
|
|||||||
Dividends
|
|
|
—
|
|
(280.5
|
)
|
—
|
|
—
|
|
(280.5
|
)
|
|||||||
Adoption of ASU 2018-02
|
|
|
—
|
|
20.9
|
|
(20.9
|
)
|
—
|
|
—
|
|
|||||||
Buyout of minority interest
|
|
|
—
|
|
(12.4
|
)
|
—
|
|
(0.4
|
)
|
(12.8
|
)
|
|||||||
Stock-based compensation
|
|
|
25.6
|
|
—
|
|
—
|
|
—
|
|
25.6
|
|
|||||||
Shares purchased and retired
|
(0.3
|
)
|
(0.4
|
)
|
(16.8
|
)
|
(67.7
|
)
|
—
|
|
—
|
|
(84.5
|
)
|
|||||
Shares issued
|
1.7
|
|
0.1
|
|
88.9
|
|
—
|
|
—
|
|
—
|
|
88.9
|
|
|||||
Equal exchange
|
(1.8
|
)
|
1.8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(millions)
|
Common Stock Shares
|
Common Stock
Non-Voting Shares
|
Common Stock Amount
|
Retained Earnings
|
Accumulated Other Comprehensive (Loss) Income
|
Non-controlling Interests
|
Total Shareholders’ Equity
|
||||||||||||
Balance, November 30, 2018
|
9.6
|
|
122.5
|
|
$
|
1,770.6
|
|
$
|
1,760.2
|
|
$
|
(359.9
|
)
|
$
|
11.3
|
|
$
|
3,182.2
|
|
Net income
|
|
|
—
|
|
702.7
|
|
—
|
|
—
|
|
702.7
|
|
|||||||
Net income attributable to non-controlling interest
|
|
|
—
|
|
—
|
|
—
|
|
1.9
|
|
1.9
|
|
|||||||
Other comprehensive loss, net of tax
|
|
|
—
|
|
—
|
|
(140.3
|
)
|
(0.7
|
)
|
(141.0
|
)
|
|||||||
Dividends
|
|
|
—
|
|
(309.3
|
)
|
—
|
|
—
|
|
(309.3
|
)
|
|||||||
Stock-based compensation
|
|
|
37.2
|
|
—
|
|
—
|
|
—
|
|
37.2
|
|
|||||||
Shares purchased and retired
|
(0.2
|
)
|
(0.6
|
)
|
(15.4
|
)
|
(97.8
|
)
|
—
|
|
—
|
|
(113.2
|
)
|
|||||
Shares issued
|
1.5
|
|
0.1
|
|
96.2
|
|
—
|
|
—
|
|
—
|
|
96.2
|
|
|||||
Equal exchange
|
(1.6
|
)
|
1.6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Balance, November 30, 2019
|
9.3
|
|
123.6
|
|
$
|
1,888.6
|
|
$
|
2,055.8
|
|
$
|
(500.2
|
)
|
$
|
12.5
|
|
$
|
3,456.7
|
|
(millions)
|
Americas
|
EMEA
|
APAC
|
Total
|
||||||||
2019
|
|
|
|
|
||||||||
Net sales
|
$
|
3,711.3
|
|
$
|
986.1
|
|
$
|
650.0
|
|
$
|
5,347.4
|
|
2018
|
|
|
|
|
||||||||
Net sales
|
$
|
3,627.5
|
|
$
|
1,021.1
|
|
$
|
654.2
|
|
$
|
5,302.8
|
|
2017
|
|
|
|
|
||||||||
Net sales
|
$
|
3,179.6
|
|
$
|
948.9
|
|
$
|
601.8
|
|
$
|
4,730.3
|
|
•
|
Shipping and handling costs— We elected to account for shipping and handling activities that occur before the customer has obtained control of a good as fulfillment activities (i.e., an expense) rather than as a promised service.
|
•
|
Measurement of transaction price— We elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer for sales, value added and other excise taxes.
|
•
|
Incremental cost of obtaining a contract— We elected to expense any incremental costs of obtaining a contract when the contract is for a period of one year or less.
|
|
Accounting Changes
|
|||||||||||
(in millions)
|
Previously Reported
|
Revenue Recognition
|
Pension
|
Recast
|
||||||||
For the year ended November 30, 2018:
|
|
|
|
|
||||||||
Net sales
|
$
|
5,408.9
|
|
$
|
(106.1
|
)
|
$
|
—
|
|
$
|
5,302.8
|
|
Cost of goods sold
|
3,037.3
|
|
169.5
|
|
2.7
|
|
3,209.5
|
|
||||
Gross profit
|
2,371.6
|
|
(275.6
|
)
|
(2.7
|
)
|
2,093.3
|
|
||||
Selling, general and administrative expense
|
1,429.5
|
|
(275.6
|
)
|
9.5
|
|
1,163.4
|
|
||||
Operating income
|
903.3
|
|
—
|
|
(12.2
|
)
|
891.1
|
|
||||
Other income, net
|
12.6
|
|
—
|
|
12.2
|
|
24.8
|
|
||||
|
|
|
|
|
||||||||
For the year ended November 30, 2017:
|
|
|
|
|
||||||||
Net sales
|
$
|
4,834.1
|
|
$
|
(103.8
|
)
|
$
|
—
|
|
$
|
4,730.3
|
|
Cost of goods sold
|
2,823.9
|
|
111.0
|
|
1.4
|
|
2,936.3
|
|
||||
Gross profit
|
2,010.2
|
|
(214.8
|
)
|
(1.4
|
)
|
1,794.0
|
|
||||
Selling, general and administrative expense
|
1,244.8
|
|
(214.8
|
)
|
1.2
|
|
1,031.2
|
|
||||
Operating income
|
702.4
|
|
—
|
|
(2.6
|
)
|
699.8
|
|
||||
Other income, net
|
3.5
|
|
—
|
|
2.6
|
|
6.1
|
|
|
2018
|
2017
|
||||
Transaction expenses included in cost of goods sold
|
$
|
—
|
|
$
|
20.9
|
|
Transaction expenses included in other debt costs
|
—
|
|
15.4
|
|
||
Other transaction expenses
|
0.3
|
|
23.2
|
|
||
Integration expenses
|
22.2
|
|
17.6
|
|
||
Total
|
$
|
22.5
|
|
$
|
77.1
|
|
|
2019
|
2018
|
2017
|
||||||
Employee severance and related benefits
|
$
|
6.2
|
|
$
|
2.0
|
|
$
|
8.3
|
|
Other costs (1)
|
14.6
|
|
14.3
|
|
13.9
|
|
|||
Total special charges
|
$
|
20.8
|
|
$
|
16.3
|
|
$
|
22.2
|
|
(1)
|
Included in other costs for 2018 and 2017 are non-cash fixed asset impairment charges of $3.0 million and $0.5 million, respectively.
|
|
2019
|
2018
|
2017
|
||||||
Consumer segment
|
$
|
13.1
|
|
$
|
10.0
|
|
$
|
15.3
|
|
Flavor solutions segment
|
7.7
|
|
6.3
|
|
6.9
|
|
|||
Total special charges
|
$
|
20.8
|
|
$
|
16.3
|
|
$
|
22.2
|
|
|
2019
|
2018
|
||||||||||
(millions)
|
Gross
carrying
amount
|
Accumulated
amortization
|
Gross
carrying
amount
|
Accumulated
amortization
|
||||||||
Definite-lived intangible assets
|
$
|
308.3
|
|
$
|
104.3
|
|
$
|
311.3
|
|
$
|
84.9
|
|
Indefinite-lived intangible assets:
|
|
|
|
|
||||||||
Goodwill
|
4,505.2
|
|
—
|
|
4,527.9
|
|
—
|
|
||||
Brand names and trademarks
|
2,643.0
|
|
—
|
|
2,646.9
|
|
—
|
|
||||
|
7,148.2
|
|
—
|
|
7,174.8
|
|
—
|
|
||||
Total goodwill and intangible assets
|
$
|
7,456.5
|
|
$
|
104.3
|
|
$
|
7,486.1
|
|
$
|
84.9
|
|
|
2019
|
2018
|
||||||||||
(millions)
|
Consumer
|
Flavor Solutions
|
Consumer
|
Flavor Solutions
|
||||||||
Beginning of year
|
$
|
3,398.9
|
|
$
|
1,129.0
|
|
$
|
3,385.4
|
|
$
|
1,104.7
|
|
Changes in preliminary purchase price allocation
|
—
|
|
—
|
|
68.1
|
|
34.1
|
|
||||
Foreign currency fluctuations
|
(21.3
|
)
|
(1.4
|
)
|
(54.6
|
)
|
(9.8
|
)
|
||||
End of year
|
$
|
3,377.6
|
|
$
|
1,127.6
|
|
$
|
3,398.9
|
|
$
|
1,129.0
|
|
(millions)
|
2019
|
2018
|
2017
|
||||||
Net sales
|
$
|
863.0
|
|
$
|
807.9
|
|
$
|
775.4
|
|
Gross profit
|
316.2
|
|
290.5
|
|
278.5
|
|
|||
Net income
|
90.5
|
|
78.9
|
|
75.5
|
|
|||
Current assets
|
$
|
426.3
|
|
$
|
342.1
|
|
$
|
315.4
|
|
Noncurrent assets
|
134.0
|
|
129.9
|
|
127.6
|
|
|||
Current liabilities
|
223.8
|
|
172.1
|
|
146.9
|
|
|||
Noncurrent liabilities
|
9.2
|
|
10.0
|
|
13.6
|
|
(millions)
|
2019
|
2018
|
||||
Short-term borrowings
|
|
|
||||
Commercial paper
|
$
|
575.3
|
|
$
|
509.9
|
|
Other
|
25.4
|
|
50.1
|
|
||
|
$
|
600.7
|
|
$
|
560.0
|
|
Weighted-average interest rate of short-term borrowings at year-end
|
2.5
|
%
|
2.9
|
%
|
||
|
|
|
||||
Long-term debt
|
|
|
||||
Term loan due 8/17/2020(1)
|
$
|
—
|
|
$
|
130.0
|
|
3.90% notes due 7/8/2021(2)
|
250.0
|
|
250.0
|
|
||
2.70% notes due 8/15/2022
|
750.0
|
|
750.0
|
|
||
Term loan due 8/17/2022(1)
|
250.0
|
|
556.3
|
|
||
3.50% notes due 8/19/2023(3)
|
250.0
|
|
250.0
|
|
||
3.15% notes due 8/15/2024
|
700.0
|
|
700.0
|
|
||
3.25% notes due 11/15/2025(4)
|
250.0
|
|
250.0
|
|
||
3.40% notes due 8/15/2027(5)
|
750.0
|
|
750.0
|
|
||
4.20% notes due 8/15/2047
|
300.0
|
|
300.0
|
|
||
7.63%–8.12% notes due 2024
|
55.0
|
|
55.0
|
|
||
Other, including capital leases
|
171.6
|
|
180.5
|
|
||
Unamortized discounts, premiums, debt issuance costs and fair value adjustments(6)
|
(3.1
|
)
|
(35.4
|
)
|
||
|
3,723.5
|
|
4,136.4
|
|
||
Less current portion
|
97.7
|
|
83.5
|
|
||
|
$
|
3,625.8
|
|
$
|
4,052.9
|
|
(1)
|
The term loans are prepayable in whole or in part. Also, the term loan due in 2022 requires quarterly principal payments of 2.5% of the initial principal amount.
|
(2)
|
Interest rate swaps, settled upon the issuance of these notes in 2011, effectively set the interest rate on the $250 million notes at a weighted-average fixed rate of 4.01%.
|
(3)
|
Interest rate swaps, settled upon the issuance of these notes in 2013, effectively set the interest rate on the $250 million notes at a weighted-average fixed rate of 3.30%.
|
(4)
|
Interest rate swaps, settled upon the issuance of these notes in 2015, effectively set the interest rate on the $250 million notes at a weighted-average fixed rate of 3.45%. The fixed interest rate on $100 million of the 3.25% notes due in 2025 is effectively converted to a
|
(5)
|
Interest rate swaps, settled upon the issuance of these notes in 2017, effectively set the interest rate on the $750 million notes at a weighted-average fixed rate of 3.44%. The fixed interest rate on $250 million of the 3.40% notes due in 2027 is effectively converted to a variable rate by interest rate swaps through 2027. Net interest payments are based on 3-month LIBOR plus 0.685% during this period (our effective rate as of November 30, 2019 was 2.59%).
|
(6)
|
Includes unamortized discounts, premiums and debt issuance costs of $(23.6) million and $(29.0) million as of November 30, 2019 and 2018, respectively. Includes fair value adjustment associated with interest rate swaps designated as fair value hedges of $20.5 million and $(6.4) million as of November 30, 2019 and 2018, respectively.
|
2020
|
$
|
97.7
|
|
2021
|
341.1
|
|
|
2022
|
864.2
|
|
|
2023
|
257.8
|
|
|
2024
|
763.1
|
|
|
Thereafter
|
1,402.7
|
|
2020
|
$
|
41.8
|
|
2021
|
35.7
|
|
|
2022
|
25.8
|
|
|
2023
|
16.0
|
|
|
2024
|
10.6
|
|
|
Thereafter
|
32.3
|
|
Fair value hedges (millions)
|
||||||||||
|
Income statement
location
|
Income (expense)
|
||||||||
Derivative
|
2019
|
2018
|
2017
|
|||||||
Interest rate contracts
|
Interest expense
|
$
|
—
|
|
$
|
(0.1
|
)
|
$
|
0.9
|
|
|
Income statement location
|
Gain (loss) recognized in income
|
|
Income statement location
|
Gain (loss) recognized in income
|
||||||||||||||||
Derivative
|
2019
|
2018
|
2017
|
Hedged Item
|
2019
|
2018
|
2017
|
||||||||||||||
Foreign exchange contracts
|
Other income, net
|
$
|
0.2
|
|
$
|
(2.9
|
)
|
$
|
12.8
|
|
Intercompany loans
|
Other income, net
|
$
|
(0.9
|
)
|
$
|
2.7
|
|
$
|
(14.1
|
)
|
|
2019
|
2018
|
||||||||||
(millions)
|
Carrying
amount
|
Fair
value
|
Carrying
amount
|
Fair
value
|
||||||||
Long-term investments
|
$
|
124.4
|
|
$
|
124.4
|
|
$
|
120.8
|
|
$
|
120.8
|
|
Long-term debt (including current portion)
|
3,723.5
|
|
3,859.0
|
|
4,136.4
|
|
4,039.4
|
|
||||
Derivatives related to:
|
|
|
|
|
||||||||
Interest rates (assets)
|
20.9
|
|
20.9
|
|
—
|
|
—
|
|
||||
Interest rates (liabilities)
|
—
|
|
—
|
|
6.4
|
|
6.4
|
|
||||
Foreign currency (assets)
|
3.3
|
|
3.3
|
|
4.4
|
|
4.4
|
|
||||
Foreign currency (liabilities)
|
3.6
|
|
3.6
|
|
6.4
|
|
6.4
|
|
||||
Cross currency (assets)
|
3.2
|
|
3.2
|
|
—
|
|
—
|
|
•
|
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 management’s own assumptions.
|
|
|
Fair value measurements using fair
value hierarchy as of November 30, 2019
|
|||||||
(millions)
|
Fair value
|
Level 1
|
Level 2
|
||||||
Assets:
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
155.4
|
|
$
|
155.4
|
|
$
|
—
|
|
Insurance contracts
|
121.7
|
|
—
|
|
121.7
|
|
|||
Bonds and other long-term investments
|
2.7
|
|
2.7
|
|
—
|
|
|||
Interest rate derivatives
|
20.9
|
|
—
|
|
20.9
|
|
|||
Foreign currency derivatives
|
3.3
|
|
—
|
|
3.3
|
|
|||
Cross currency contracts
|
3.2
|
|
—
|
|
3.2
|
|
|||
Total
|
$
|
307.2
|
|
$
|
158.1
|
|
$
|
149.1
|
|
Liabilities:
|
|
|
|
||||||
Foreign currency derivatives
|
3.6
|
|
—
|
|
3.6
|
|
|||
Total
|
$
|
3.6
|
|
$
|
—
|
|
$
|
3.6
|
|
|
|
Fair value measurements using fair
value hierarchy as of November 30, 2018
|
|||||||
(millions)
|
Fair value
|
Level 1
|
Level 2
|
||||||
Assets:
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
96.6
|
|
$
|
96.6
|
|
$
|
—
|
|
Insurance contracts
|
118.0
|
|
—
|
|
118.0
|
|
|||
Bonds and other long-term investments
|
2.8
|
|
2.8
|
|
—
|
|
|||
Foreign currency derivatives
|
4.4
|
|
—
|
|
4.4
|
|
|||
Total
|
$
|
221.8
|
|
$
|
99.4
|
|
$
|
122.4
|
|
Liabilities:
|
|
|
|
||||||
Interest rate derivatives
|
$
|
6.4
|
|
$
|
—
|
|
$
|
6.4
|
|
Foreign currency derivatives
|
6.4
|
|
—
|
|
6.4
|
|
|||
Total
|
$
|
12.8
|
|
$
|
—
|
|
$
|
12.8
|
|
|
2019
|
2018
|
||||
Accumulated other comprehensive loss, net of tax where applicable
|
|
|
||||
Foreign currency translation adjustment (1)
|
$
|
(266.5
|
)
|
$
|
(241.6
|
)
|
Unrealized loss on foreign currency exchange contracts
|
—
|
|
(1.1
|
)
|
||
Unamortized value of settled interest rate swaps
|
0.3
|
|
0.6
|
|
||
Pension and other postretirement costs
|
(234.0
|
)
|
(117.8
|
)
|
||
|
$
|
(500.2
|
)
|
$
|
(359.9
|
)
|
(1)
|
The foreign currency translation adjustment of accumulated other comprehensive loss increased by $(24.9) million during the year ended November 30, 2019. Of that increase, $0.9 million was associated with net investment hedges as more fully described in Note 7.
|
(millions)
|
|
|
|
|
|
|
|
Affected line items in the consolidated income statement
|
|||||||
Accumulated other comprehensive income (loss) components
|
|
2019
|
|
2018
|
|
2017
|
|
||||||||
(Gains)/losses on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate derivatives
|
|
$
|
(0.5
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
0.4
|
|
|
Interest expense
|
|
Foreign exchange contracts
|
|
(1.6
|
)
|
|
3.3
|
|
|
(1.2
|
)
|
|
Cost of goods sold
|
||||
Total before taxes
|
|
(2.1
|
)
|
|
2.8
|
|
|
(0.8
|
)
|
|
|
|
|||
Tax effect
|
|
0.4
|
|
|
(0.6
|
)
|
|
0.2
|
|
|
Income taxes
|
||||
Net, after tax
|
|
$
|
(1.7
|
)
|
|
$
|
2.2
|
|
|
$
|
(0.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of pension and postretirement benefit adjustments:
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of prior service (credits) costs (1)
|
|
$
|
(8.0
|
)
|
|
$
|
(8.5
|
)
|
|
$
|
(1.6
|
)
|
|
Other income, net
|
|
Amortization of net actuarial losses (1)
|
|
2.6
|
|
|
12.6
|
|
|
9.7
|
|
|
Other income, net
|
||||
Total before taxes
|
|
(5.4
|
)
|
|
4.1
|
|
|
8.1
|
|
|
|
|
|||
Tax effect
|
|
1.2
|
|
|
(1.0
|
)
|
|
(2.8
|
)
|
|
Income taxes
|
||||
Net, after tax
|
|
$
|
(4.2
|
)
|
|
$
|
3.1
|
|
|
$
|
5.3
|
|
|
|
|
•
|
On December 1, 2017, our Management Committee approved the freezing of benefits under our pension plans in Canada. The effective date of this freeze was November 30, 2019. Although those plans have 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.
|
•
|
On December 1, 2016, our Management Committee approved the freezing of benefits under the McCormick U.K. Pension and Life Assurance Scheme (the U.K. plan). The effective date of this freeze was December 31, 2016. Although the U.K. plan has been frozen, employees who are participants in that plan
|
•
|
On January 3, 2017, our Management Committee approved the freezing of benefits under the McCormick Pension Plan, the defined benefit pension plan available to U.S. employees hired on or prior to December 31, 2011. The effective date of this freeze was November 30, 2018. Employees who are participants in that plan retained benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plan.
|
•
|
On January 3, 2017, the Compensation Committee of our Board of Directors approved the freezing of benefits under the McCormick Supplemental Executive Retirement Plan (the “SERP”). The effective date of this freeze was January 31, 2017. Executives who are participants in the SERP as of the date of the freeze, including certain named executive officers, retained benefits accumulated up to that date, based on credited service and eligible earnings, in accordance with the SERP’s terms.
|
|
United States
|
International
|
||||||
|
2019
|
2018
|
2019
|
2018
|
||||
Discount rate—funded plan
|
3.4
|
%
|
4.7
|
%
|
2.2
|
%
|
3.3
|
%
|
Discount rate—unfunded plan
|
3.3
|
%
|
4.6
|
%
|
—
|
|
—
|
|
Salary scale
|
—
|
|
—
|
|
2.9
|
%
|
3.0-3.5%
|
|
|
United States
|
International
|
||||||||||
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
||||||
Discount rate—funded plan
|
4.7
|
%
|
4.0
|
%
|
4.6
|
%
|
3.3
|
%
|
2.9
|
%
|
3.2
|
%
|
Discount rate—unfunded plan
|
4.6
|
%
|
3.9
|
%
|
4.5
|
%
|
—
|
|
—
|
|
—
|
|
Salary scale
|
—
|
%
|
3.8
|
%
|
3.8
|
%
|
3.4
|
%
|
3.5
|
%
|
3.4
|
%
|
Expected return on plan assets
|
7.0
|
%
|
7.3
|
%
|
7.3
|
%
|
5.5
|
%
|
5.6
|
%
|
5.5
|
%
|
|
United States
|
International
|
||||||||||||||||
(millions)
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
||||||||||||
Service cost
|
$
|
2.1
|
|
$
|
17.0
|
|
$
|
14.8
|
|
$
|
3.6
|
|
$
|
4.3
|
|
$
|
6.2
|
|
Interest costs
|
34.4
|
|
31.6
|
|
31.7
|
|
9.5
|
|
9.2
|
|
10.4
|
|
||||||
Expected return on plan assets
|
(42.5
|
)
|
(43.4
|
)
|
(41.4
|
)
|
(16.4
|
)
|
(16.6
|
)
|
(15.3
|
)
|
||||||
Amortization of prior service costs
|
0.5
|
|
—
|
|
—
|
|
0.2
|
|
0.1
|
|
0.7
|
|
||||||
Amortization of net actuarial loss
|
2.3
|
|
9.9
|
|
5.8
|
|
1.2
|
|
2.8
|
|
4.1
|
|
||||||
Settlement/curtailment loss
|
—
|
|
—
|
|
—
|
|
—
|
|
0.5
|
|
0.6
|
|
||||||
|
$
|
(3.2
|
)
|
$
|
15.1
|
|
$
|
10.9
|
|
$
|
(1.9
|
)
|
$
|
0.3
|
|
$
|
6.7
|
|
|
United States
|
International
|
||||||||||
(millions)
|
2019
|
2018
|
2019
|
2018
|
||||||||
Change in benefit obligation:
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
752.6
|
|
$
|
813.7
|
|
$
|
292.9
|
|
$
|
341.5
|
|
Service cost
|
2.1
|
|
17.0
|
|
3.6
|
|
4.3
|
|
||||
Interest costs
|
34.4
|
|
31.6
|
|
9.5
|
|
9.2
|
|
||||
Employee contributions
|
—
|
|
—
|
|
0.8
|
|
0.7
|
|
||||
Plan amendments
|
—
|
|
5.2
|
|
(0.2
|
)
|
3.4
|
|
||||
Plan curtailments
|
—
|
|
—
|
|
—
|
|
(17.5
|
)
|
||||
Actuarial (gain) loss
|
134.6
|
|
(76.2
|
)
|
51.8
|
|
(20.2
|
)
|
||||
Benefits paid
|
(38.9
|
)
|
(36.3
|
)
|
(14.7
|
)
|
(13.2
|
)
|
||||
Business combinations
|
—
|
|
(2.4
|
)
|
—
|
|
—
|
|
||||
Expenses paid
|
—
|
|
—
|
|
(0.3
|
)
|
(0.7
|
)
|
||||
Foreign currency impact
|
—
|
|
—
|
|
2.2
|
|
(14.6
|
)
|
||||
Benefit obligation at end of year
|
$
|
884.8
|
|
$
|
752.6
|
|
$
|
345.6
|
|
$
|
292.9
|
|
Change in fair value of plan assets:
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
640.4
|
|
$
|
654.2
|
|
$
|
306.5
|
|
$
|
331.3
|
|
Actual return on plan assets
|
62.2
|
|
13.6
|
|
42.7
|
|
(0.7
|
)
|
||||
Employer contributions
|
8.2
|
|
8.9
|
|
3.2
|
|
4.6
|
|
||||
Employee contributions
|
—
|
|
—
|
|
0.8
|
|
0.7
|
|
||||
Benefits paid
|
(38.9
|
)
|
(36.3
|
)
|
(14.7
|
)
|
(13.2
|
)
|
||||
Expenses paid
|
—
|
|
—
|
|
(0.3
|
)
|
(0.7
|
)
|
||||
Foreign currency impact
|
—
|
|
—
|
|
2.7
|
|
(15.5
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
671.9
|
|
$
|
640.4
|
|
$
|
340.9
|
|
$
|
306.5
|
|
Funded status
|
$
|
(212.9
|
)
|
$
|
(112.2
|
)
|
$
|
(4.7
|
)
|
$
|
13.6
|
|
Pension plans in which accumulated benefit obligation exceeded plan assets
|
|
|
|
|
||||||||
Projected benefit obligation
|
$
|
884.8
|
|
$
|
752.6
|
|
$
|
103.9
|
|
$
|
19.1
|
|
Accumulated benefit obligation
|
874.8
|
|
746.9
|
|
100.4
|
|
16.1
|
|
||||
Fair value of plan assets
|
671.9
|
|
640.4
|
|
83.6
|
|
1.5
|
|
|
United States
|
International
|
||||||||||
(millions)
|
2019
|
2018
|
2019
|
2018
|
||||||||
Non-current pension asset
|
$
|
—
|
|
$
|
—
|
|
$
|
15.6
|
|
$
|
31.2
|
|
Accrued pension liability
|
212.9
|
|
112.2
|
|
20.3
|
|
17.6
|
|
||||
Deferred income tax assets
|
58.5
|
|
32.7
|
|
13.3
|
|
8.8
|
|
||||
Accumulated other comprehensive loss
|
183.9
|
|
97.7
|
|
60.1
|
|
40.1
|
|
|
Actual
|
2019
|
||||
Asset Category
|
2019
|
2018
|
Target
|
|||
Equity securities
|
63.3
|
%
|
65.8
|
%
|
59.0
|
%
|
Fixed income securities
|
21.5
|
%
|
20.5
|
%
|
23.2
|
%
|
Other
|
15.2
|
%
|
13.7
|
%
|
17.8
|
%
|
Total
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|
Actual
|
2019
|
||||
Asset Category
|
2019
|
2018
|
Target
|
|||
Equity securities
|
50.4
|
%
|
52.1
|
%
|
53.0
|
%
|
Fixed income securities
|
48.9
|
%
|
47.8
|
%
|
47.0
|
%
|
Other
|
0.7
|
%
|
0.1
|
%
|
—
|
%
|
Total
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
As of November 30, 2019
|
United States
|
||||||||
(millions)
|
Total
fair
value
|
Level 1
|
Level 2
|
||||||
Cash and cash equivalents
|
$
|
15.3
|
|
$
|
15.3
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
||||||
U.S. equity securities(a)
|
276.5
|
|
148.5
|
|
128.0
|
|
|||
International equity securities(b)
|
145.5
|
|
134.2
|
|
11.3
|
|
|||
Fixed income securities:
|
|
|
|
||||||
U.S. government/corporate bonds(c)
|
51.2
|
|
49.1
|
|
2.1
|
|
|||
High yield bonds(d)
|
40.1
|
|
—
|
|
40.1
|
|
|||
International/government/corporate bonds(e)
|
26.8
|
|
26.8
|
|
—
|
|
|||
Insurance contracts(f)
|
1.1
|
|
—
|
|
1.1
|
|
|||
Other types of investments:
|
|
|
|
||||||
Real estate (g)
|
25.9
|
|
22.0
|
|
3.9
|
|
|||
Natural resources (h)
|
12.0
|
|
—
|
|
12.0
|
|
|||
Total
|
$
|
594.4
|
|
$
|
395.9
|
|
$
|
198.5
|
|
Investments measured at net asset value(i)
|
|
|
|
||||||
Hedge funds(j)
|
49.3
|
|
|
|
|||||
Private equity funds(k)
|
3.2
|
|
|
|
|||||
Private debt funds(l)
|
25.0
|
|
|
|
|||||
Total investments
|
$
|
671.9
|
|
|
|
As of November 30, 2019
|
International
|
||||||||
(millions)
|
Total
fair
value
|
Level 1
|
Level 2
|
||||||
Cash and cash equivalents
|
$
|
2.5
|
|
$
|
2.5
|
|
$
|
—
|
|
International equity securities(b)
|
171.6
|
|
—
|
|
171.6
|
|
|||
Fixed income securities:
|
|
|
|
||||||
International/government/corporate bonds(e)
|
144.7
|
|
—
|
|
144.7
|
|
|||
Insurance contracts(f)
|
22.1
|
|
—
|
|
22.1
|
|
|||
Total investments
|
$
|
340.9
|
|
$
|
2.5
|
|
$
|
338.4
|
|
As of November 30, 2018
|
United States
|
||||||||
(millions)
|
Total
fair
value
|
Level 1
|
Level 2
|
||||||
Cash and cash equivalents
|
$
|
16.0
|
|
$
|
16.0
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
||||||
U.S. equity securities(a)
|
283.2
|
|
149.6
|
|
133.6
|
|
|||
International equity securities(b)
|
132.7
|
|
126.1
|
|
6.6
|
|
|||
Fixed income securities:
|
|
|
|
||||||
U.S./government/ corporate bonds(c)
|
46.2
|
|
44.1
|
|
2.1
|
|
|||
High yield bonds(d)
|
36.7
|
|
—
|
|
36.7
|
|
|||
International/government/ corporate bonds(e)
|
27.4
|
|
27.4
|
|
—
|
|
|||
Insurance contracts(f)
|
1.1
|
|
—
|
|
1.1
|
|
|||
Other types of investments:
|
|
|
|
||||||
Real estate (g)
|
22.3
|
|
18.7
|
|
3.6
|
|
|||
Natural resources (h)
|
12.6
|
|
—
|
|
12.6
|
|
|||
Total
|
$
|
578.2
|
|
$
|
381.9
|
|
$
|
196.3
|
|
Investments measured at net asset value(i)
|
|
|
|
||||||
Hedge funds(j)
|
36.7
|
|
|
|
|||||
Private equity funds(k)
|
5.6
|
|
|
|
|||||
Private debt funds(l)
|
19.9
|
|
|
|
|||||
Total investments
|
$
|
640.4
|
|
|
|
As of November 30, 2018
|
|
International
|
|
||||||
(millions)
|
Total
fair
value
|
Level 1
|
Level 2
|
||||||
Cash and cash equivalents
|
$
|
2.0
|
|
$
|
2.0
|
|
$
|
—
|
|
International equity securities(b)
|
159.5
|
|
—
|
|
159.5
|
|
|||
Fixed income securities:
|
|
|
|
||||||
International/government/corporate bonds(e)
|
125.2
|
|
—
|
|
125.2
|
|
|||
Insurance contracts(f)
|
19.8
|
|
—
|
|
19.8
|
|
|||
Total investments
|
$
|
306.5
|
|
$
|
2.0
|
|
$
|
304.5
|
|
(a)
|
This category comprises equity funds and collective equity trust funds that most closely track the S&P index and other equity indices.
|
(b)
|
This category comprises international equity funds with varying benchmark indices.
|
(c)
|
This category comprises funds consisting of U.S. government and U.S. corporate bonds and other fixed income securities. An appropriate benchmark is the Barclays Capital Aggregate Bond Index.
|
(d)
|
This category comprises funds consisting of real estate related debt securities with an appropriate benchmark of the Barclays Investment Grade CMBS Index.
|
(e)
|
This category comprises funds consisting of international government/corporate bonds and other fixed income securities with varying benchmark indices.
|
(f)
|
This category comprises insurance contracts, the majority of which have a guaranteed investment return.
|
(g)
|
This category comprises funds investing in real estate investment trusts (REIT). An appropriate benchmark is the MSCI U.S. REIT Index.
|
(h)
|
This category comprises funds investing in natural resources. An appropriate benchmark is the Alerian master limited partnership (MLP) Index.
|
(i)
|
Certain investments that are valued using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. These are included to permit reconciliation of the fair value hierarchy to the aggregate pension plan assets.
|
(j)
|
This category comprises hedge funds investing in strategies represented in various HFRI Fund Indices. The net asset value is generally based on the valuation of the underlying investment. Limitations exist on the timing from notice by the plan of its intent to redeem and actual redemptions of these funds and generally range from a minimum of one month to several months.
|
(k)
|
This category comprises private equity, venture capital and limited partnerships. The net asset is based on valuation models of the underlying securities as determined by the general partner or general partner's designee. These valuation models include unobservable inputs that cannot be corroborated using verifiable observable market data. These funds typically have redemption periods of approximately 10 years.
|
(l)
|
This category comprises limited partnerships funds investing in senior loans, mezzanine and distressed debt. The net asset is based on valuation models of the underlying securities as determined by the general partner or general partner's designee. These valuation models include unobservable inputs that cannot be corroborated using verifiable observable market data. These funds typically have redemption periods of approximately 10 years.
|
(millions)
|
United States
|
International
|
||||
2020
|
$
|
41.4
|
|
$
|
14.1
|
|
2021
|
41.6
|
|
14.2
|
|
||
2022
|
43.1
|
|
14.4
|
|
||
2023
|
44.8
|
|
15.4
|
|
||
2024
|
46.7
|
|
15.3
|
|
||
2025-2029
|
243.8
|
|
77.3
|
|
•
|
On August 23, 2017, our Management Committee approved changes to our postretirement medical benefits plan for eligible U.S. employees and retirees (employees hired after December 31, 2008 are not eligible for the subsidy). These changes included consolidating benefits providers and simplifying and reducing our subsidy for postretirement medical benefits. The effective date of the change in our subsidy was January 1, 2018.
|
•
|
On August 23, 2017, our Management Committee approved the elimination of life insurance benefits under our other postretirement benefit plan to eligible U.S. active employees (that life insurance benefit was available to U.S. employees hired on or prior to December 31, 2008). The effective date of this plan amendment was January 1, 2018, unless an employee committed to their retirement date by December 31, 2017 and retired on or before December 31, 2018.
|
(millions)
|
2019
|
2018
|
2017
|
||||||
Service cost
|
$
|
1.8
|
|
$
|
2.0
|
|
$
|
2.6
|
|
Interest costs
|
2.7
|
|
2.4
|
|
3.3
|
|
|||
Amortization of prior service credits
|
(8.7
|
)
|
(8.6
|
)
|
(2.3
|
)
|
|||
Amortization of actuarial gains
|
(0.9
|
)
|
(0.1
|
)
|
(0.2
|
)
|
|||
Postretirement benefit (income) expense
|
$
|
(5.1
|
)
|
$
|
(4.3
|
)
|
$
|
3.4
|
|
(millions)
|
2019
|
2018
|
||||
Change in benefit obligation:
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
62.9
|
|
$
|
70.9
|
|
Service cost
|
1.8
|
|
2.0
|
|
||
Interest costs
|
2.7
|
|
2.4
|
|
||
Employee contributions
|
0.3
|
|
0.4
|
|
||
Plan amendments
|
(0.4
|
)
|
—
|
|
||
Other plan assumptions
|
(1.0
|
)
|
(0.1
|
)
|
||
Discount rate change
|
7.6
|
|
(4.5
|
)
|
||
Actuarial (gain) loss
|
(2.5
|
)
|
(3.0
|
)
|
||
Benefits paid
|
(4.2
|
)
|
(5.2
|
)
|
||
Benefit obligation at end of year
|
$
|
67.2
|
|
$
|
62.9
|
|
Change in fair value of plan assets:
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
—
|
|
$
|
—
|
|
Employer contributions
|
3.9
|
|
4.8
|
|
||
Employee contributions
|
0.3
|
|
0.4
|
|
||
Benefits paid
|
(4.2
|
)
|
(5.2
|
)
|
||
Fair value of plan assets at end of year
|
$
|
—
|
|
$
|
—
|
|
Other postretirement benefit liability
|
$
|
67.2
|
|
$
|
62.9
|
|
(millions)
|
Retiree
medical
|
Retiree life
insurance
|
Total
|
||||||
2020
|
$
|
3.7
|
|
$
|
1.4
|
|
$
|
5.1
|
|
2021
|
3.7
|
|
1.4
|
|
5.1
|
|
|||
2022
|
3.7
|
|
1.4
|
|
5.1
|
|
|||
2023
|
3.7
|
|
1.4
|
|
5.1
|
|
|||
2024
|
3.7
|
|
1.4
|
|
5.1
|
|
|||
2025-2029
|
18.0
|
|
6.5
|
|
24.5
|
|
(shares in thousands)
|
2019
|
2018
|
2017
|
||||||||||||
|
Shares
|
Weighted-
average
price
|
Shares
|
Weighted-
average
price
|
Shares
|
Weighted-
average
price
|
|||||||||
Beginning of year
|
423
|
|
$
|
103.05
|
|
267
|
|
$
|
86.47
|
|
267
|
|
$
|
80.08
|
|
Granted
|
129
|
|
143.23
|
|
278
|
|
112.72
|
|
131
|
|
94.63
|
|
|||
Vested
|
(159
|
)
|
104.15
|
|
(113
|
)
|
88.15
|
|
(118
|
)
|
80.62
|
|
|||
Forfeited
|
(12
|
)
|
113.55
|
|
(9
|
)
|
96.53
|
|
(13
|
)
|
90.85
|
|
|||
Outstanding—end of year
|
381
|
|
$
|
115.89
|
|
423
|
|
$
|
103.05
|
|
267
|
|
$
|
86.47
|
|
|
2019
|
2018
|
2017
|
|||
Risk-free interest rates
|
2.2 - 2.5%
|
|
1.7 - 2.9%
|
|
0.9 - 2.4%
|
|
Dividend yield
|
1.5
|
%
|
2.0
|
%
|
1.9
|
%
|
Expected volatility
|
17.4
|
%
|
18.4%
|
|
18.7%
|
|
Expected lives
|
7.5 years
|
|
7.6 years
|
|
7.6 years
|
|
(shares in millions)
|
2019
|
2018
|
2017
|
||||||||||||
|
Shares
|
Weighted-
average
exercise
price
|
Shares
|
Weighted-
average
exercise
price
|
Shares
|
Weighted-
average
exercise
price
|
|||||||||
Beginning of year
|
3.6
|
|
$
|
82.60
|
|
4.8
|
|
$
|
71.91
|
|
4.9
|
|
$
|
66.00
|
|
Granted
|
0.3
|
|
147.39
|
|
0.4
|
|
105.95
|
|
0.6
|
|
98.07
|
|
|||
Exercised
|
(1.3
|
)
|
71.08
|
|
(1.6
|
)
|
55.28
|
|
(0.7
|
)
|
50.63
|
|
|||
Outstanding—end of year
|
2.6
|
|
96.18
|
|
3.6
|
|
82.60
|
|
4.8
|
|
71.91
|
|
|||
Exercisable—end of year
|
1.9
|
|
$
|
86.61
|
|
2.8
|
|
$
|
76.54
|
|
3.8
|
|
$
|
65.34
|
|
(shares in millions)
|
Options outstanding
|
Options exercisable
|
||||||||||
Range of
exercise price
|
Shares
|
Weighted-
average
remaining
life (yrs.)
|
Weighted-
average
exercise
price
|
Shares
|
Weighted-
average
remaining
life (yrs.)
|
Weighted-
average
exercise
price
|
||||||
$38.00 - $79.00
|
0.9
|
|
4.4
|
$
|
71.40
|
|
0.9
|
|
4.4
|
$
|
71.40
|
|
$79.01 - $103.00
|
1.0
|
|
6.8
|
99.04
|
|
0.9
|
|
6.7
|
99.22
|
|
||
$103.01 - $149.00
|
0.7
|
|
8.8
|
125.75
|
|
0.1
|
|
8.3
|
106.65
|
|
||
|
2.6
|
|
6.5
|
$
|
96.18
|
|
1.9
|
|
5.7
|
$
|
86.61
|
|
(shares in thousands)
|
2019
|
2018
|
2017
|
||||||||||||
|
Shares
|
Weighted-
average
price
|
Shares
|
Weighted-
average
price
|
Shares
|
Weighted-
average price |
|||||||||
Beginning of year
|
218
|
|
$
|
83.55
|
|
220
|
|
$
|
84.31
|
|
201
|
|
$
|
78.10
|
|
Granted
|
68
|
|
150.51
|
|
86
|
|
101.90
|
|
78
|
|
89.96
|
|
|||
Vested
|
(57
|
)
|
86.40
|
|
(60
|
)
|
74.02
|
|
(43
|
)
|
69.04
|
|
|||
Performance adjustment
|
(33
|
)
|
89.96
|
|
(26
|
)
|
86.40
|
|
(16
|
)
|
74.02
|
|
|||
Forfeited
|
—
|
|
—
|
|
(2
|
)
|
97.41
|
|
—
|
|
—
|
|
|||
Outstanding—end of year
|
196
|
|
$
|
115.96
|
|
218
|
|
$
|
83.55
|
|
220
|
|
$
|
84.31
|
|
(millions)
|
2019
|
2018
|
2017
|
||||||
Income taxes
|
|
|
|
||||||
Current
|
|
|
|
||||||
Federal
|
$
|
52.3
|
|
$
|
92.9
|
|
$
|
67.1
|
|
State
|
10.7
|
|
11.0
|
|
6.2
|
|
|||
International
|
73.5
|
|
78.7
|
|
53.9
|
|
|||
|
136.5
|
|
182.6
|
|
127.2
|
|
|||
Deferred
|
|
|
|
||||||
Federal
|
26.4
|
|
(340.3
|
)
|
23.8
|
|
|||
State
|
3.6
|
|
1.5
|
|
0.9
|
|
|||
International
|
(9.1
|
)
|
(1.1
|
)
|
(0.6
|
)
|
|||
|
20.9
|
|
(339.9
|
)
|
24.1
|
|
|||
Total income tax expense (benefit)
|
$
|
157.4
|
|
$
|
(157.3
|
)
|
$
|
151.3
|
|
(millions)
|
2019
|
2018
|
2017
|
||||||
Pretax income
|
|
|
|
||||||
United States
|
$
|
569.0
|
|
$
|
492.2
|
|
$
|
382.1
|
|
International
|
250.2
|
|
249.1
|
|
212.7
|
|
|||
|
$
|
819.2
|
|
$
|
741.3
|
|
$
|
594.8
|
|
|
2019
|
2018
|
2017
|
|||
Federal statutory tax rate
|
21.0
|
%
|
22.2
|
%
|
35.0
|
%
|
State income taxes, net of federal benefits
|
1.6
|
|
1.5
|
|
0.8
|
|
International tax at different effective rates
|
1.6
|
|
0.4
|
|
(4.8
|
)
|
U.S. tax on remitted and unremitted earnings
|
0.5
|
|
0.6
|
|
0.4
|
|
Stock compensation expense
|
(2.8
|
)
|
(2.9
|
)
|
(1.6
|
)
|
U.S. manufacturing deduction
|
—
|
|
(0.8
|
)
|
(1.8
|
)
|
Changes in prior year tax contingencies
|
(0.3
|
)
|
(0.8
|
)
|
(2.1
|
)
|
Non-recurring benefit of U.S. Tax Act
|
(0.2
|
)
|
(40.7
|
)
|
—
|
|
Intra-entity asset transfer
|
(1.8
|
)
|
—
|
|
—
|
|
Other, net
|
(0.4
|
)
|
(0.7
|
)
|
(0.5
|
)
|
Total
|
19.2
|
%
|
(21.2
|
)%
|
25.4
|
%
|
(millions)
|
2019
|
2018
|
||||
Deferred tax assets
|
|
|
||||
Employee benefit liabilities
|
$
|
103.3
|
|
$
|
82.7
|
|
Other accrued liabilities
|
32.3
|
|
40.0
|
|
||
Inventory
|
7.5
|
|
8.0
|
|
||
Tax loss and credit carryforwards
|
46.8
|
|
57.2
|
|
||
Other
|
48.1
|
|
44.2
|
|
||
Valuation allowance
|
(32.4
|
)
|
(32.9
|
)
|
||
|
205.6
|
|
199.2
|
|
||
Deferred tax liabilities
|
|
|
||||
Depreciation
|
82.6
|
|
77.8
|
|
||
Intangible assets
|
770.5
|
|
782.8
|
|
||
Other
|
5.5
|
|
5.3
|
|
||
|
858.6
|
|
865.9
|
|
||
Net deferred tax liability
|
$
|
(653.0
|
)
|
$
|
(666.7
|
)
|
(millions)
|
2019
|
2018
|
2017
|
||||||
Balance at beginning of year
|
$
|
27.9
|
|
$
|
39.1
|
|
$
|
58.3
|
|
Additions for current year tax positions
|
6.6
|
|
6.5
|
|
7.3
|
|
|||
Additions for prior year tax positions
|
0.6
|
|
0.3
|
|
0.9
|
|
|||
Reductions for prior year tax positions
|
(0.3
|
)
|
(6.9
|
)
|
(8.4
|
)
|
|||
Settlements
|
—
|
|
—
|
|
(18.1
|
)
|
|||
Statute expirations
|
(2.5
|
)
|
(9.1
|
)
|
(2.1
|
)
|
|||
Foreign currency translation
|
(0.3
|
)
|
(2.0
|
)
|
1.2
|
|
|||
Balance at November 30
|
$
|
32.0
|
|
$
|
27.9
|
|
$
|
39.1
|
|
(millions)
|
2019
|
2018
|
2017
|
|||
Average shares outstanding—basic
|
132.6
|
|
131.5
|
|
126.8
|
|
Effect of dilutive securities:
|
|
|
|
|||
Stock options/RSUs/LTPP
|
1.5
|
|
1.7
|
|
1.6
|
|
Average shares outstanding—diluted
|
134.1
|
|
133.2
|
|
128.4
|
|
(millions)
|
2019
|
2018
|
2017
|
|||
Antidilutive securities
|
0.1
|
|
0.2
|
|
1.1
|
|
(millions)
|
Consumer
|
Flavor Solutions
|
Total
segments
|
Corporate
& other
|
Total
|
||||||||||
2019
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
3,269.8
|
|
$
|
2,077.6
|
|
$
|
5,347.4
|
|
$
|
—
|
|
$
|
5,347.4
|
|
Operating income excluding special charges
|
676.3
|
|
302.2
|
|
978.5
|
|
—
|
|
978.5
|
|
|||||
Income from unconsolidated operations
|
31.8
|
|
9.1
|
|
40.9
|
|
—
|
|
40.9
|
|
|||||
Assets
|
—
|
|
—
|
|
9,950.3
|
|
411.8
|
|
10,362.1
|
|
|||||
Capital expenditures
|
—
|
|
—
|
|
121.8
|
|
51.9
|
|
173.7
|
|
|||||
Depreciation and amortization
|
—
|
|
—
|
|
118.0
|
|
40.8
|
|
158.8
|
|
|||||
2018
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
3,247.0
|
|
$
|
2,055.8
|
|
$
|
5,302.8
|
|
$
|
—
|
|
$
|
5,302.8
|
|
Operating income excluding special charges and transaction and integration expenses
|
637.1
|
|
292.8
|
|
929.9
|
|
—
|
|
929.9
|
|
|||||
Income from unconsolidated operations
|
29.5
|
|
5.3
|
|
34.8
|
|
—
|
|
34.8
|
|
|||||
Assets
|
—
|
|
—
|
|
10,015.8
|
|
240.6
|
|
10,256.4
|
|
|||||
Capital expenditures
|
—
|
|
—
|
|
126.3
|
|
42.8
|
|
169.1
|
|
|||||
Depreciation and amortization
|
—
|
|
—
|
|
115.0
|
|
35.7
|
|
150.7
|
|
|||||
2017
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,901.6
|
|
$
|
1,828.7
|
|
$
|
4,730.3
|
|
$
|
—
|
|
$
|
4,730.3
|
|
Operating income excluding special charges and transaction and integration expenses
|
562.4
|
|
221.3
|
|
783.7
|
|
—
|
|
783.7
|
|
|||||
Income from unconsolidated operations
|
28.9
|
|
5.0
|
|
33.9
|
|
—
|
|
33.9
|
|
|||||
Assets
|
—
|
|
—
|
|
10,036.7
|
|
349.1
|
|
10,385.8
|
|
|||||
Capital expenditures
|
—
|
|
—
|
|
153.6
|
|
28.8
|
|
182.4
|
|
|||||
Depreciation and amortization
|
—
|
|
—
|
|
99.8
|
|
25.4
|
|
125.2
|
|
(millions)
|
Consumer
|
|
Flavor Solutions
|
|
Total
|
||||||
2019
|
|
|
|
|
|
||||||
Operating income excluding special charges
|
$
|
676.3
|
|
|
$
|
302.2
|
|
|
$
|
978.5
|
|
Less: Special charges
|
13.1
|
|
|
7.7
|
|
|
20.8
|
|
|||
Operating income
|
$
|
663.2
|
|
|
$
|
294.5
|
|
|
$
|
957.7
|
|
|
|
|
|
|
|
||||||
2018
|
|
|
|
|
|
||||||
Operating income excluding special charges and transaction and integration expenses
|
$
|
637.1
|
|
|
$
|
292.8
|
|
|
$
|
929.9
|
|
Less: Special charges
|
10.0
|
|
|
6.3
|
|
|
16.3
|
|
|||
Less: Transaction and integration expenses
|
15.0
|
|
|
7.5
|
|
|
22.5
|
|
|||
Operating income
|
$
|
612.1
|
|
|
$
|
279.0
|
|
|
$
|
891.1
|
|
|
|
|
|
|
|
||||||
2017
|
|
|
|
|
|
||||||
Operating income excluding special charges and transaction and integration expenses
|
$
|
562.4
|
|
|
$
|
221.3
|
|
|
$
|
783.7
|
|
Less: Special charges
|
15.3
|
|
|
6.9
|
|
|
22.2
|
|
|||
Less: Transaction and integration expenses included in cost of goods sold
|
13.6
|
|
|
7.3
|
|
|
20.9
|
|
|||
Less: Other transaction and integration expenses
|
27.1
|
|
|
13.7
|
|
|
40.8
|
|
|||
Operating income
|
$
|
506.4
|
|
|
$
|
193.4
|
|
|
$
|
699.8
|
|
(millions)
|
United
States
|
EMEA
|
Other
countries
|
Total
|
||||||||
2019
|
|
|
|
|
||||||||
Net sales
|
$
|
3,226.3
|
|
$
|
986.1
|
|
$
|
1,135.0
|
|
$
|
5,347.4
|
|
Long-lived assets
|
6,397.0
|
|
1,032.4
|
|
875.4
|
|
8,304.8
|
|
||||
2018
|
|
|
|
|
||||||||
Net sales
|
$
|
3,145.0
|
|
$
|
1,021.1
|
|
$
|
1,136.7
|
|
$
|
5,302.8
|
|
Long-lived assets
|
6,411.0
|
|
1,057.1
|
|
874.6
|
|
8,342.7
|
|
||||
2017
|
|
|
|
|
||||||||
Net sales
|
$
|
2,748.7
|
|
$
|
948.9
|
|
$
|
1,032.7
|
|
$
|
4,730.3
|
|
Long-lived assets
|
6,329.1
|
|
1,125.3
|
|
881.2
|
|
8,335.6
|
|
For the year ended November 30 (millions)
|
2019
|
2018
|
2017
|
||||||
Other income, net
|
|
|
|
||||||
Pension and other postretirement benefit income
|
$
|
17.7
|
|
12.2
|
|
2.6
|
|
||
Interest income
|
10.1
|
|
7.1
|
|
5.7
|
|
|||
Other
|
(1.1
|
)
|
5.5
|
|
(2.2
|
)
|
|||
|
$
|
26.7
|
|
$
|
24.8
|
|
$
|
6.1
|
|
At November 30 (millions)
|
2019
|
2018
|
||||
Inventories
|
|
|
||||
Finished products
|
$
|
413.3
|
|
$
|
406.1
|
|
Raw materials and work-in-process
|
387.9
|
|
380.2
|
|
||
|
$
|
801.2
|
|
$
|
786.3
|
|
Prepaid expenses
|
$
|
36.0
|
|
$
|
27.2
|
|
Other current assets
|
54.7
|
|
51.7
|
|
||
|
$
|
90.7
|
|
$
|
78.9
|
|
Property, plant and equipment
|
|
|
||||
Land and improvements
|
$
|
67.5
|
|
$
|
62.6
|
|
Buildings (including capital lease)
|
658.5
|
|
626.2
|
|
||
Machinery, equipment and other
|
1,007.8
|
|
947.5
|
|
||
Construction-in-progress
|
85.8
|
|
105.1
|
|
||
Accumulated depreciation
|
(867.0
|
)
|
(799.9
|
)
|
||
|
$
|
952.6
|
|
$
|
941.5
|
|
Other long-term assets
|
|
|
||||
Investments in affiliates
|
$
|
186.0
|
|
$
|
167.2
|
|
Long-term investments
|
124.4
|
|
120.8
|
|
||
Software, net of accumulated amortization $275.0 for 2019 and $281.5 for 2018
|
76.4
|
|
43.6
|
|
||
Other
|
120.3
|
|
102.2
|
|
||
|
$
|
507.1
|
|
$
|
433.8
|
|
Other accrued liabilities
|
|
|
||||
Payroll and employee benefits
|
$
|
184.9
|
|
$
|
176.5
|
|
Sales allowances
|
137.2
|
|
142.1
|
|
||
Other
|
287.0
|
|
329.6
|
|
||
|
$
|
609.1
|
|
$
|
648.2
|
|
Other long-term liabilities
|
|
|
||||
Pension
|
$
|
226.9
|
|
$
|
123.1
|
|
Postretirement benefits
|
62.7
|
|
58.5
|
|
||
Unrecognized tax benefits
|
37.6
|
|
31.0
|
|
||
Other
|
100.4
|
|
100.5
|
|
||
|
$
|
427.6
|
|
$
|
313.1
|
|
For the year ended November 30 (millions)
|
2019
|
2018
|
2017
|
||||||
Depreciation
|
$
|
113.6
|
|
$
|
104.8
|
|
$
|
85.2
|
|
Software amortization
|
13.7
|
|
14.0
|
|
14.5
|
|
|||
Interest paid
|
169.8
|
|
179.8
|
|
72.1
|
|
|||
Income taxes paid
|
137.2
|
|
154.6
|
|
155.6
|
|
(millions except per share data)
|
First
|
Second
|
Third
|
Fourth
|
||||||||
2019
|
|
|
|
|
||||||||
Net sales
|
$
|
1,231.5
|
|
$
|
1,301.9
|
|
$
|
1,329.2
|
|
$
|
1,484.8
|
|
Gross profit
|
466.9
|
|
508.5
|
|
539.9
|
|
630.0
|
|
||||
Operating income
|
196.9
|
|
208.1
|
|
253.5
|
|
299.2
|
|
||||
Net income
|
148.0
|
|
149.4
|
|
191.9
|
|
213.4
|
|
||||
Basic earnings per share
|
1.12
|
|
1.13
|
|
1.45
|
|
1.60
|
|
||||
Diluted earnings per share
|
1.11
|
|
1.12
|
|
1.43
|
|
1.59
|
|
||||
Dividends paid per share—
|
|
|
|
|
||||||||
Common Stock and Common Stock Non-Voting
|
0.57
|
|
0.57
|
|
0.57
|
|
0.57
|
|
||||
Dividends declared per share—
|
|
|
|
|
||||||||
Common Stock and Common Stock Non-Voting
|
—
|
|
0.57
|
|
0.57
|
|
1.19
|
|
||||
2018
|
|
|
|
|
||||||||
Net sales
|
$
|
1,215.4
|
|
$
|
1,301.3
|
|
$
|
1,318.2
|
|
$
|
1,467.9
|
|
Gross profit
|
460.4
|
|
505.4
|
|
522.5
|
|
605.0
|
|
||||
Operating income
|
181.1
|
|
188.6
|
|
229.9
|
|
291.5
|
|
||||
Net income
|
422.6
|
|
123.3
|
|
173.5
|
|
214.0
|
|
||||
Basic earnings per share
|
3.22
|
|
0.94
|
|
1.32
|
|
1.62
|
|
||||
Diluted earnings per share
|
3.18
|
|
0.93
|
|
1.30
|
|
1.60
|
|
||||
Dividends paid per share—
|
|
|
|
|
||||||||
Common Stock and Common Stock Non-Voting
|
0.52
|
|
0.52
|
|
0.52
|
|
0.52
|
|
||||
Dividends declared per share—
|
|
|
|
|
||||||||
Common Stock and Common Stock Non-Voting
|
—
|
|
0.52
|
|
0.52
|
|
1.09
|
|
PART III.
|
PART IV.
|
|
|
Exhibit Number
|
Description
|
|
|
(i)
|
|||
|
|
|
||
|
(ii)
|
|||
|
|
|
||
|
(iii)
|
|||
|
|
|
|
|
|
(iv)
|
The 2007 Omnibus Incentive Plan, in which directors, officers and certain other management employees participate, is set forth in Exhibit A of McCormick’s definitive Proxy Statement dated February 20, 2008, File No. 1-14920, as filed with the Securities and Exchange Commission on February 20, 2008, and incorporated by reference herein, as amended by Amendment No. 1 thereto, which Amendment is incorporated by reference from Exhibit 10(xi) of McCormick’s 10-K for the fiscal year ended November 30, 2008, File No. 1-14920, as filed with the Securities and Exchange Commission on January 28, 2009.*
|
||
|
|
|
|
|
|
(v)
|
|||
|
|
|
|
|
|
(vi)
|
Filed herewith
|
||
|
|
|
|
|
|
(vii)
|
Filed herewith
|
||
|
|
|
|
|
|
(viii)
|
Filed herewith
|
||
|
|
|
|
|
|
(ix)
|
Filed herewith
|
||
|
|
|
|
|
|
(x)
|
Filed herewith
|
||
|
|
|
|
|
|
(xi)
|
|||
|
|
|
|
|
|
(xii)
|
|||
|
|
|
|
|
|
(xiii)
|
|||
|
|
|
|
|
|
(xiv)
|
|||
|
|
|
|
|
(21
|
)
|
|
Filed herewith
|
|
|
|
|
||
(23
|
)
|
|
Filed herewith
|
|
|
|
|
|
|
Exhibit Number
|
Description
|
|
(31
|
)
|
|
Rule 13a-14(a)/15d-14(a) Certifications
|
Filed herewith
|
|
|
|
||
|
(i)
|
|||
|
|
|
|
|
|
(ii)
|
|||
|
|
|
|
|
(32
|
)
|
|
Section 1350 Certifications
|
Filed herewith
|
|
|
|
||
|
(i)
|
|||
|
|
|
||
|
(ii)
|
|||
|
|
|
||
(101)
|
|
|
The following financial information from the Annual Report on Form 10-K of McCormick for the year ended November 30, 2019, filed electronically herewith, and formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Income Statements; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Cash Flow Statements; and (vi) Notes to Consolidated Financial Statements.
|
|
(104)
|
|
|
Inline XBRL for the cover page of this Annual Report on Form 10-K of McCormick for the year ended November 30, 2019, filed electronically herewith, included in the Exhibit 101 Inline XBRL Document Set.
|
|
|
|
|
||
|
*
|
Management contract or compensatory plan or arrangement.
|
||
|
|
|
||
|
|
McCormick hereby undertakes to furnish to the Securities and Exchange Commission, upon its request, copies of additional instruments of McCormick with respect to long-term debt that involve an amount of securities that do not exceed 10% of the total assets of McCormick and its subsidiaries on a consolidated basis, pursuant to Regulation S-K, Item 601(b)(4)(iii)(A).
|
By:
|
/s/ LAWRENCE E. KURZIUS
|
Chairman, President &
|
January 28, 2020
|
|
Lawrence E. Kurzius
|
Chief Executive Officer
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of McCormick and in the capacities and on the dates indicated.
|
|||
Principal Executive Officer:
|
|
|
|
|
|
|
|
By:
|
/s/ LAWRENCE E. KURZIUS
|
Chairman, President &
|
January 28, 2020
|
|
Lawrence E. Kurzius
|
Chief Executive Officer
|
|
|
|
|
|
Principal Financial Officer:
|
|
|
|
|
|
|
|
By:
|
/s/ MICHAEL R. SMITH
|
Executive Vice President & Chief
|
January 28, 2020
|
|
Michael R. Smith
|
Financial Officer
|
|
|
|
|
|
Principal Accounting Officer:
|
|
|
|
|
|
|
|
By:
|
/s/ CHRISTINA M. MCMULLEN
|
Vice President & Controller
|
January 28, 2020
|
|
Christina M. McMullen
|
Chief Accounting Officer
|
THE BOARD OF DIRECTORS:
|
|
DATE:
|
|
|
|
|
|
January 28, 2020
|
Anne L. Bramman
|
|
|
|
|
|
/s/ MICHAEL A. CONWAY
|
|
January 28, 2020
|
Michael A. Conway
|
|
|
|
|
|
/s/ FREEMAN A. HRABOWSKI, III
|
|
January 28, 2020
|
Freeman A. Hrabowski, III
|
|
|
|
|
|
/s/ LAWRENCE E. KURZIUS
|
|
January 28, 2020
|
Lawrence E. Kurzius
|
|
|
|
|
|
/s/ PATRICIA LITTLE
|
|
January 28, 2020
|
Patricia Little
|
|
|
|
|
|
/s/ MICHAEL D. MANGAN
|
|
January 28, 2020
|
Michael D. Mangan
|
|
|
|
|
|
/s/ MARITZA G. MONTIEL
|
|
January 28, 2020
|
Maritza G. Montiel
|
|
|
|
|
|
/s/ MARGARET M.V. PRESTON
|
|
January 28, 2020
|
Margaret M.V. Preston
|
|
|
|
|
|
/s/ GARY M. RODKIN
|
|
January 28, 2020
|
Gary M. Rodkin
|
|
|
|
|
|
/s/ W. ANTHONY VERNON
|
|
January 28, 2020
|
W. Anthony Vernon
|
|
|
|
|
|
/s/ JACQUES TAPIERO
|
|
January 28, 2020
|
Jacques Tapiero
|
|
|
Column A
|
Column B
|
Column C Additions
|
Column D
|
Column E
|
|||||||||||
Description
|
Balance at
beginning of
period
|
Charged to
costs and
expenses
|
Charged to
other
accounts
|
Deductions
|
Balance at
end of period
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
||||||||||
Year ended November 30, 2019:
|
|
|
|
|
|
||||||||||
Allowance for doubtful receivables
|
$
|
6.4
|
|
$
|
1.1
|
|
$
|
(1.8
|
)
|
$
|
(0.1
|
)
|
$
|
5.6
|
|
Valuation allowance on net deferred tax assets
|
32.9
|
|
2.6
|
|
(0.5
|
)
|
(2.6
|
)
|
32.4
|
|
|||||
|
$
|
39.3
|
|
$
|
3.7
|
|
$
|
(2.3
|
)
|
$
|
(2.7
|
)
|
$
|
38.0
|
|
Deducted from asset accounts:
|
|
|
|
|
|
||||||||||
Year ended November 30, 2018:
|
|
|
|
|
|
||||||||||
Allowance for doubtful receivables
|
$
|
6.6
|
|
$
|
1.1
|
|
$
|
(0.6
|
)
|
$
|
(0.7
|
)
|
$
|
6.4
|
|
Valuation allowance on net deferred tax assets
|
26.0
|
|
11.1
|
|
(2.2
|
)
|
(2.0
|
)
|
32.9
|
|
|||||
|
$
|
32.6
|
|
$
|
12.2
|
|
$
|
(2.8
|
)
|
$
|
(2.7
|
)
|
$
|
39.3
|
|
Deducted from asset accounts:
|
|
|
|
|
|
||||||||||
Year ended November 30, 2017:
|
|
|
|
|
|
||||||||||
Allowance for doubtful receivables
|
$
|
4.2
|
|
$
|
2.6
|
|
$
|
0.3
|
|
$
|
(0.5
|
)
|
$
|
6.6
|
|
Valuation allowance on net deferred tax assets
|
10.5
|
|
15.1
|
|
1.8
|
|
(1.4
|
)
|
26.0
|
|
|||||
|
$
|
14.7
|
|
$
|
17.7
|
|
$
|
2.1
|
|
$
|
(1.9
|
)
|
$
|
32.6
|
|
|
•
|
|
the voting rights of persons who are deemed by the board of directors to own, directly or indirectly, beneficially 10% or more of the outstanding shares of Common Stock (a “Substantial Stockholder”) are limited to 10% of the votes entitled to be cast by all holders of shares of Common Stock regardless of how many shares in excess of 10% are held by such person;
|
|
•
|
|
we have the right to redeem, at any time, any or all shares of Common Stock and Common Stock Non-Voting beneficially owned by any Substantial Stockholder, unless such person acquires more than 90% of the then outstanding shares of each class of our common stock; and
|
|
•
|
|
at such time as a Substantial Stockholder beneficially owns shares of Common Stock which entitle such Substantial Stockholder to cast more than 50% of the votes entitled to be cast by the holders of outstanding shares of Common Stock (taking into account the vote limitation on Substantial Stockholders described above), automatically, on a share-for-share basis, all shares of Common Stock Non-Voting will convert into shares of Common Stock.
|
|
•
|
|
the affirmative vote of the holders of at least 80% of the total number of votes entitled to be cast by the holders of all of the then outstanding shares of Common Stock, voting as a single class, and
|
|
•
|
|
the affirmative vote of the holders of at least 80% of the then outstanding shares of Common Stock Non-Voting, voting as a separate class.
|
|
•
|
|
a consolidation of the Company with another corporation;
|
|
•
|
|
a merger of the Company into another corporation;
|
|
•
|
|
a merger of the Company where the Company is the surviving corporation but the capital stock of the Company is converted into other securities or property;
|
|
•
|
|
a participation by the Company in a statutory share exchange whereby the capital stock of the Company is converted into other securities or property;
|
|
•
|
|
a dissolution of the Company;
|
|
•
|
|
a sale of all or substantially all of the assets of the Company not in the ordinary course of business; and
|
|
•
|
|
any amendment of the Charter repealing the right of the Common Stock Non-Voting to vote on any of the foregoing matters.
|
|
•
|
|
the affirmative vote of the holders of a majority of the outstanding shares of the Common Stock Non-Voting, voting separately as one class, and
|
|
•
|
|
the affirmative vote of the holders of a majority of the total number of votes entitled to be cast by the holders of all the outstanding shares of the Common Stock (taking into account the vote limitation on Substantial Stockholders described above), voting separately as another class.
|
|
•
|
|
the affirmative vote of the holders of at least 80% of the total number of votes entitled to be cast by the holders of all the then outstanding shares of Common Stock (taking into account the vote limitation on Substantial Stockholders described above), voting separately as one class, and
|
|
•
|
|
the affirmative vote of the holders of at least 80% of the then outstanding shares of Common Stock Non-Voting, voting separately as another class.
|
|
Chief Executive Officer
|
All Others
|
Restrictive Period
|
1½ years
|
1 year
|
Restrictive CIC Period
|
2½ years
|
2 years
|
1.
|
Grant of Restricted Stock Units. Details of the Grantee’s Award are described on the screen captioned “Grants & Awards” in the Computershare website (the “Screen”). On the grant date specified on the Screen (the “Grant Date”), the Company granted restricted common stock units (“Restricted Stock Units”) to the Grantee for the number of shares of Stock identified as shares granted on the Screen (the “Award”). The Restricted Stock Units shall become vested in accordance with the vesting schedule described in Section 3 hereof.
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2.
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Restrictions on Transfer of Restricted Stock Units. The Restricted Stock Units herein granted and the rights and privileges conferred hereby shall not be transferred, assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment, or similar process. Upon any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of said Restricted Stock Units or of any right or privilege conferred hereby contrary to the provisions hereof or upon the levy of any attachment or similar process upon the rights and privileges conferred hereby, these Restricted Stock Units and the rights and privileges conferred hereby shall immediately become null and void.
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3.
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Vesting of Restricted Stock Units.
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4.
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Issuance of Common Stock.
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5.
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Dividend, Voting and Other Rights.
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6.
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Forfeiture of Outstanding Restricted Stock Units and Gain on Any Restricted Stock Unit. The Grantee shall be required to forfeit to the Company (a) any Outstanding RSUs and (b) any gain realized on account of the Restricted Stock Units and all restricted stock units previously granted to the Grantee (including any shares of Stock issued to the Grantee in connection with the vesting of such awards) in the event the Grantee takes any action in violation or breach of, or in conflict with this Award Agreement (including the RSU Covenants Addendum attached hereto), any employment agreement, non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company or any of its affiliates, or any confidentiality obligation with respect to the Company or any
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7.
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Successor. This Award shall be binding upon and inure to the benefit of any successor or successors of the Company.
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8.
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Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws. Notwithstanding any other provision of this Award Agreement, the Company shall not be obligated to issue any shares of Stock pursuant to this Award Agreement if the issuance thereof would result in a violation of any law.
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9.
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Section 409A of the Internal Revenue Code.
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10.
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Withholding. The Company (and/or the Grantee’s local employer) shall, in its discretion, have the right to deduct or withhold from payments of any kind otherwise due to the Grantee, or require the Grantee to remit to the Company (and to his or her local employer), an amount sufficient to satisfy taxes imposed under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gain taxes, transfer taxes, and social security contributions that are required by law to be withheld with respect to the Plan, grant of restricted stock units, payment of shares or cash under this Award Agreement, the sale of shares acquired hereunder, and/or payment of dividends on shares acquired hereunder, as applicable. A sufficient number of the shares resulting from payout of this Award at vesting may be retained by the Company to satisfy any tax withholding obligation.
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11.
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No Right to Continued Employment. Neither the Plan, this Award Agreement, the grant of Restricted Stock Units, payment of shares or cash under this Award Agreement, the sale of shares acquired hereunder, and/or payment of dividends on shares acquired hereunder, as applicable, gives the Grantee any right to continue to be employed by the Company (or the Grantee’s local employer), or limits, in any way, the right of the Company (or the Grantee’s local employer) to change the Grantee’s compensation or other benefits or to terminate the Grantee’s employment at any time for any reason not specifically prohibited by law.
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12.
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Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means or request the Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
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13.
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Governing Law and Venue. All disputes arising under or growing out of the Restricted Stock Units or the provisions of this Award Agreement shall be governed by and construed in accordance with the laws of the State of Maryland, United States of America, as provided in the Plan, without regard to such state’s conflict of laws rules. If any dispute arises directly or indirectly from the relationship of the parties evidenced by this Award and this Award Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Maryland and agree that such litigation shall be conducted only in the courts of Baltimore County, Maryland, and no other courts, where the grant of the Restricted Stock Units are made and/or to be performed.
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14.
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Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
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15.
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Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Grantee’s participation in the Plan, on the Restricted Stock Units and on any shares of Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable to comply with local law or facilitate the administration of the Plan, and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
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16.
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Relation to Plan. This Award Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency or conflict between this Award Agreement and the Plan, the Plan shall govern. The Plan and this Award Agreement shall be administered by the Committee in accordance with the provisions of Article II of the Plan. Except as expressly provided in this Award Agreement, capitalized terms used herein shall have the meanings ascribed to them in the Plan or on the Screen.
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17.
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Acceptance of Award. In consideration for the Restricted Stock Units and by accepting this Award Agreement, the Grantee agrees and acknowledges that:
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Chief Executive Officer
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All Others
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Restrictive Period
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1-½ years
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1 year
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Restrictive CIC Period
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2 years
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2 years
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Chief Executive Officer
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All Others
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Restrictive Period
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1-½ years
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1 year
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Restrictive CIC Period
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2 years
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2 years
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Company Name
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Jurisdiction of Incorporation
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Billy Bee Honey Products Company
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Canada
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Botanical Food Company Pty. Ltd.
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Australia
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Botanical Food Company, Inc.
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Delaware, U.S.
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Brand Aromatics, Inc
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New Jersey, U.S.
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Drogheria E Alimentari SPA
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Italy
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Enrico Giotti SPA
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Italy
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The French's Food Company LLC
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Delaware, U.S.
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The French's Food Company, Inc.
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Canada
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Kohinoor Speciality Foods India Private Limited
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India
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La Cie McCormick Canada Co.
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Canada
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McCormick (Guangzhou) Food Company Limited
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People’s Republic of China
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McCormick (U.K.) Ltd.
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Scotland
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McCormick Cyprus Limited
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Cyprus
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McCormick de Centro America, S.A. de C.V.
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El Salvador
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McCormick Europe, Ltd.
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United Kingdom
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McCormick Foods Australia Pty. Ltd.
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Australia
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McCormick France Holdings S.A.S.
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France
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McCormick France, S.A.S.
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France
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McCormick Global Ingredients Limited
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Cayman
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McCormick Holding Company Inc.
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Delaware, U.S.
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McCormick Ingredients Southeast Asia Private Limited
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Republic of Singapore
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McCormick International Holdings Unlimited.
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United Kingdom
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McCormick Italy Holdings S.R.L.
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Italy
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McCormick Pesa, S.A. de C.V.
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Mexico
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McCormick Polska S.A.
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Poland
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McCormick South Africa Pty Limited
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South Africa
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McCormick Switzerland GmbH
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Switzerland
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McCormick (Wuhan) Food Company Limited
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People’s Republic of China
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Mojave Foods Corporation
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Maryland, U.S.
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Shanghai McCormick Foods Company Limited
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People’s Republic of China
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Simply Asia Foods LLC.
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Delaware, U.S.
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One World Foods, Inc.
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Delaware, U.S.
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Zatarain’s Brands, Inc.
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Delaware, U.S.
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Form
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Registration Number
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Date Filed
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S-8
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333-230556
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3/28/19
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S-8
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333-220665
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9/27/17
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S-3ASR
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333-220664
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9/27/17
|
S-8
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333-187703
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4/3/13
|
S-8
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333-186250
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1/28/13
|
S-8
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333-158573
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4/14/09
|
S-8
|
333-155775
|
11/28/08
|
S-8
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333-150043
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4/2/08
|
S-8
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333-142020
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4/11/07
|
S-8
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333-123808
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4/4/05
|
S-8
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333-114094
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3/31/04
|
S-8
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333-104084
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3/28/03
|
S-8
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333-93231
|
12/21/99
|
S-8
|
333-74963
|
3/24/99
|
S-8
|
333-23727
|
3/21/97
|
S-3
|
33-66614
|
7/27/93
|
S-3
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33-40920
|
5/29/91
|
S-8
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33-33724
|
3/2/90
|
S-3
|
33-32712
|
12/21/89
|
S-3
|
33-24660
|
3/16/89
|
S-3
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33-24659
|
9/15/88
|
S-8
|
33-24658
|
9/15/88
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/s/ Ernst & Young LLP
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Date: January 28, 2020
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/s/ Lawrence E. Kurzius
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Lawrence E. Kurzius
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Chairman, President & Chief Executive Officer
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Date: January 28, 2020
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/s/ Michael R. Smith
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Michael R. Smith
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Executive Vice President & Chief Financial Officer
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/s/ Lawrence E. Kurzius
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Lawrence E. Kurzius
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Chairman, President & Chief Executive Officer
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Date: January 28, 2020
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/s/ Michael R. Smith
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Michael R. Smith
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Executive Vice President & Chief Financial Officer
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Date: January 28, 2020
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