Document and Entity Information
Document and Entity Information | 9 Months Ended |
Aug. 31, 2018shares | |
Document Information [Line Items] | |
Entity Registrant Name | MCCORMICK & CO INC |
Entity Central Index Key | 63,754 |
Current Fiscal Year End Date | --11-30 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Aug. 31, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Common Stock | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 9,897,378 |
Nonvoting Common Stock | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 121,767,817 |
CONDENSED CONSOLIDATED INCOME S
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,345.3 | $ 1,185.2 | $ 3,909.7 | $ 3,343.2 |
Cost of goods sold | 750.4 | 700.8 | 2,219.6 | 2,001.2 |
Gross profit | 594.9 | 484.4 | 1,690.1 | 1,342 |
Selling, general and administrative expense | 353 | 286.5 | 1,045.7 | 869 |
Transaction and integration expenses (related to RB Foods acquisition) | 5.6 | 24.5 | 22.1 | 24.5 |
Special charges | 3.3 | 4.7 | 13.9 | 13 |
Operating income | 233 | 168.7 | 608.4 | 435.5 |
Interest expense | 44.7 | 21.5 | 130.7 | 50.9 |
Other debt costs | 0 | 15.4 | 0 | 15.4 |
Other income, net | 1.7 | 1.2 | 4.7 | 2.5 |
Income from consolidated operations before income taxes | 190 | 133 | 482.4 | 371.7 |
Income tax expense (benefit) | 24.9 | 33 | (213.1) | 93.6 |
Net income from consolidated operations | 165.1 | 100 | 695.5 | 278.1 |
Income from unconsolidated operations | 8.4 | 8.2 | 23.9 | 23.6 |
Net income | $ 173.5 | $ 108.2 | $ 719.4 | $ 301.7 |
Earnings per share - basic (usd per share) | $ 1.32 | $ 0.86 | $ 5.47 | $ 2.40 |
Average shares outstanding - basic (shares) | 131.6 | 126.3 | 131.4 | 125.5 |
Earnings per share - diluted (usd per share) | $ 1.30 | $ 0.85 | $ 5.41 | $ 2.37 |
Average shares outstanding - diluted (shares) | 133.2 | 127.8 | 133 | 127.2 |
Cash dividends paid per common share (usd per share) | $ 0.52 | $ 0.47 | $ 1.56 | $ 1.41 |
Cash dividends declared per share (usd per share) | $ 0.52 | $ 0.47 | $ 1.04 | $ 0.94 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME [Abstract] | ||||
Net income | $ 173.5 | $ 108.2 | $ 719.4 | $ 301.7 |
Net income attributable to non-controlling interest | 1.6 | 0.4 | 3.6 | 1.2 |
Other comprehensive income (loss): | ||||
Unrealized components of pension and postretirement plans (including curtailment gains of $18.0 and $76.7 for the nine months ended August 31, 2018 and 2017, respectively) | 1.8 | 27.1 | 22.6 | 114.7 |
Currency translation adjustments | (47.6) | 99.9 | (72.8) | 184.9 |
Change in derivative financial instruments | 0.2 | (3.7) | 1.9 | (13.2) |
Deferred taxes | (0.1) | (9.9) | (5.4) | (37.9) |
Comprehensive income | $ 129.4 | $ 222 | $ 669.3 | $ 551.4 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Aug. 31, 2018 | Nov. 30, 2017 | Aug. 31, 2017 |
Current Assets | |||
Cash and cash equivalents | $ 73 | $ 186.8 | $ 166.1 |
Trade accounts receivables, net | 511.7 | 555.1 | 556.2 |
Inventories, net | |||
Finished products | 422.6 | 398.1 | 431.3 |
Raw materials and work-in-process | 383.7 | 395.2 | 404.5 |
Total inventory | 806.3 | 793.3 | 835.8 |
Prepaid expenses and other current assets | 83.2 | 81.8 | 84.5 |
Total current assets | 1,474.2 | 1,617 | 1,642.6 |
Property, plant and equipment | 2,066.2 | 1,865.9 | 1,808.7 |
Less: accumulated depreciation | (1,105.2) | (1,056.8) | (1,043.3) |
Property, plant and equipment, net | 961 | 809.1 | 765.4 |
Goodwill | 4,553.4 | 4,490.1 | 4,503.3 |
Intangible assets, net | 2,881.7 | 3,071.1 | 3,091.5 |
Investments and other assets | 407.7 | 398.5 | 378.9 |
Total assets | 10,278 | 10,385.8 | 10,381.7 |
Current Liabilities | |||
Short-term borrowings | 639.8 | 257.6 | 349.2 |
Current portion of long-term debt | 75.5 | 325.6 | 325.5 |
Trade accounts payable | 646.3 | 639.9 | 516.9 |
Other accrued liabilities | 493.5 | 724.2 | 542.6 |
Total current liabilities | 1,855.1 | 1,947.3 | 1,734.2 |
Long-term debt | 4,269.8 | 4,443.9 | 4,702.3 |
Deferred taxes | 667.7 | 1,094.5 | 1,106.3 |
Other long-term liabilities | 373.4 | 329.2 | 305.6 |
Total liabilities | 7,166 | 7,814.9 | 7,848.4 |
Shareholders’ Equity | |||
Retained earnings | 1,723.7 | 1,166.5 | 1,123.9 |
Accumulated other comprehensive loss | (354.1) | (279.5) | (265.9) |
Non-controlling interests | 10.3 | 11 | 11.7 |
Total shareholders’ equity | 3,112 | 2,570.9 | 2,533.3 |
Total liabilities and shareholders’ equity | 10,278 | 10,385.8 | 10,381.7 |
Common Stock | |||
Shareholders’ Equity | |||
Common stock | 396.9 | 378.2 | 411.8 |
Nonvoting Common Stock | |||
Shareholders’ Equity | |||
Common stock | $ 1,335.2 | $ 1,294.7 | $ 1,251.8 |
CONDENSED CONSOLIDATED CASH FLO
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED) - USD ($) $ in Millions | 9 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Operating activities | ||
Net income | $ 719.4 | $ 301.7 |
Adjustments to reconcile net income to net cash flow provided by operating activities: | ||
Depreciation and amortization | 111.6 | 89.6 |
Stock-based compensation | 21.6 | 18.4 |
U.S. Tax Act, Non-cash Income Tax Expense (Benefit) | (308.2) | |
Other Asset Impairment Charges | 3 | |
Income from unconsolidated operations | (23.9) | (23.6) |
Changes in operating assets and liabilities, net of effect of businesses acquired | (154.5) | (98.5) |
Increase (Decrease) in Financial Instruments Used in Operating Activities | 0 | 2.9 |
Dividends from unconsolidated affiliates | 20 | 18.3 |
Net cash flow provided by operating activities | 389 | 303 |
Investing activities | ||
Acquisition of businesses (net of cash acquired) | (4.2) | (4,327.4) |
Capital expenditures | (112.6) | (108.4) |
Other Investing Activities | 3.4 | 0.7 |
Net cash flow used in investing activities | (113.4) | (4,435.1) |
Financing activities | ||
Short-term borrowings, net | 386.1 | (43.3) |
Long-term debt borrowings | 25.9 | 3,977.6 |
Payments of Debt Issuance Costs | 0 | 6.1 |
Long-term debt borrowings | (588.6) | (3.9) |
Proceeds from exercised stock options | 42.1 | 26.5 |
Taxes withheld and paid on employee stock awards | (10.8) | (5.4) |
Payment of contingent consideration | (2.5) | (19.7) |
Purchase of minority interest | 0 | (1.2) |
Proceeds from Issuance of Common Stock | 0 | 554.9 |
Payments of Stock Issuance Costs | 0 | 0.9 |
Common stock acquired by purchase | (40) | (135.8) |
Dividends paid | (204.9) | (176) |
Net cash flow (used in) provided by financing activities | (392.7) | 4,166.7 |
Effect of exchange rate changes on cash and cash equivalents | 3.3 | 13.1 |
(Decrease) increase in cash and cash equivalents | (113.8) | 47.7 |
Cash and cash equivalents at beginning of period | 186.8 | 118.4 |
Cash and cash equivalents at end of period | $ 73 | $ 166.1 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Aug. 31, 2018 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by United States generally accepted accounting principles (U.S. GAAP) for complete financial statements. In our opinion, the accompanying condensed consolidated financial statements contain all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position and the results of operations for the interim periods presented. The results of consolidated operations for the three- and nine -month periods ended August 31, 2018 are not necessarily indicative of the results to be expected for the full year. Historically, our net sales, net income and cash flow from operations are lower in the first half of the fiscal year and increase in the second half. The typical increase in net sales, net income and cash flow from operations in the second half of the year is largely due to the consumer business cycle in the U.S., where customers typically purchase more products in the fourth quarter due to the Thanksgiving and Christmas holiday seasons. In addition, net income for the nine-month period ended August 31, 2018 reflects a significant non-recurring tax benefit as more fully described in note 9. For further information, refer to the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended November 30, 2017 . Accounting Pronouncements Adopted in 2018 In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-02 Income Statement-Reporting Comprehensive Income (Topic 220) — Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This guidance allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act enacted in December 2017. The new standard, which would be effective for the first quarter of our fiscal year ending November 30, 2020, permits early adoption in any interim period or fiscal year before the effective date. We adopted this new accounting pronouncement effective December 1, 2017. The adoption resulted in a reclassification of $20.9 million from accumulated other comprehensive income to retained earnings. In July 2015, the FASB issued ASU No. 2015-11 Simplifying the Measurement of Inventory (Topic 330). This guidance is intended to simplify the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost and net realizable value test. We have adopted ASU No. 2015-11 effective December 1, 2017. The adoption of this new accounting pronouncement did not have a material impact on our financial statements. Recently Issued Accounting Pronouncements In August 2017, the FASB issued ASU No. 2017-12 Derivatives and Hedging (Topic 815) — Targeted Improvements to Accounting for Hedging Activities. This guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2020. Early adoption is permitted in any interim period or fiscal year before the effective date for all entities. If the guidance is early adopted in an interim period, any adjustments would be reflected as of the beginning of the fiscal year that includes that interim period. While we are still evaluating the timing of adoption, we currently do not expect this guidance to have a material impact on our financial statements. In March 2017, the FASB issued ASU No. 2017-07 Compensation-Retirement Benefits (Topic 715) — Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This guidance revises how employers that sponsor defined benefit pension and other postretirement plans present the net periodic benefit cost in their income statement and requires that the service cost component of net periodic benefit cost be presented in the same income statement line items as other employee compensation costs from services rendered during the period. Of the components of net periodic benefit cost, only the service cost component will be eligible for asset capitalization. The other components of the net periodic benefit cost must be presented separately from the line items that include the service cost and outside of any subtotal of operating income on the income statement. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2019 and should be applied on a retrospective basis. Adoption of the new standard will only impact classification within our Consolidated Statements of Income. In January 2017, the FASB issued ASU No. 2017-04 Intangibles — Goodwill and Other Topics (Topic 350) — Simplifying the Test for Goodwill Impairment. This guidance eliminates the requirement to calculate the implied fair value of goodwill of a reporting unit to measure a goodwill impairment charge. Instead, a company will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2021. Early adoption is permitted for all entities for annual and interim goodwill impairment testing dates after January 1, 2017. While we are still evaluating the timing of adoption, we currently do not expect this guidance to have a material impact on our financial statements. In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805) — Clarifying the Definition of a Business. This guidance changes the definition of a business to assist entities in evaluating when a set of transferred assets and activities constitutes a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in Accounting Standards Codification (ASC 606) Revenue from Contracts with Customers. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2019. We currently cannot estimate the impact that adoption of this ASU will have on our financial statements and related disclosures as its application is dependent on the facts and circumstances of individual transactions. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). This guidance revises existing practice related to accounting for leases under Accounting Standards Codification Topic 840 Leases (ASC 840) for both lessees and lessors. Our leases principally relate to: (i) certain real estate, including that related to a number of administrative, distribution and manufacturing locations, and, beginning in May 2018, to our new headquarters building; (ii) certain machinery and equipment, including a corporate airplane and automobiles; and (iii) certain software. The new guidance in ASU No. 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for virtually all leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating or finance. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while finance leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements , which provides an additional transition method that allows entities to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2020. We intend to adopt the requirements of the new standard via a cumulative-effect adjustment without restating prior periods. We have not yet determined the impact from adoption of this new accounting pronouncement on our financial statements. In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606) . This guidance is intended to improve — and converge with international standards — the financial reporting requirements for revenue from contracts with customers. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2019. In preparation for our adoption of the new standard in our fiscal year ending November 30, 2019, we have obtained representative samples of contracts and other forms of agreements with our customers in the U.S. and international locations and are evaluating the provisions contained therein in light of the five-step model specified by the new guidance. That five-step model includes: (1) determination of whether a contract — an agreement between two or more parties that creates legally enforceable rights and obligations — exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. We have substantially completed our assessment of the new standard and we do not expect our adoption of the new standard to impact our consolidated net income or otherwise have a material impact on our consolidated financial position or cash flows. We intend to adopt the requirements of the new standard in the first quarter of fiscal 2019 utilizing the full retrospective method. We are still evaluating the disclosure requirements under the standard. As we complete our overall evaluation, we are also identifying and preparing to implement changes to our accounting policies, practices and controls to support the new standard. |
Acquisitions
Acquisitions | 9 Months Ended |
Aug. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Acquisition of RB Foods On August 17, 2017, we completed the acquisition of Reckitt Benckiser's Food Division ("RB Foods") from Reckitt Benckiser Group plc. The purchase price was approximately $4.21 billion , net of acquired cash of $24.3 million . During the three months ended February 28, 2018, we paid an additional $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 and through new borrowings comprised of senior unsecured notes and pre-payable term loans. 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 (we formerly referred to our flavor solutions segment as our industrial segment). At the time of the acquisition, annual sales of RB Foods were approximately $570 million . The transaction was accounted for under the acquisition method of accounting and, accordingly, the results of RB Foods’ operations are included in our consolidated financial statements as a component of our consumer and flavor solutions segments from the date of acquisition. The purchase price of RB Foods was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. We estimated the fair values based on independent valuations, discounted cash flow analyses, quoted market prices, and estimates made by management. The estimated fair value methodologies are further described in note 2 of the financial statements in our 2017 Annual Report on Form 10-K for the year ended November 30, 2017. During the three months ended August 31, 2018, we completed the final valuation of the RB Foods acquisition which resulted in the following fair value allocations, net of cash acquired, summarized in the table below (in millions): Trade accounts receivable $ 36.9 Inventories 67.1 Property, plant and equipment 38.5 Goodwill 2,648.5 Intangible assets 2,430.0 Other assets 4.4 Trade accounts payable (65.8 ) Other accrued liabilities (35.0 ) Deferred taxes (893.9 ) Other long-term liabilities (20.8 ) Total $ 4,209.9 The fair value of the acquired intangible assets was determined using income methodologies. Brand names and trademarks and customer relationships were valued at $2,320.0 million and $110.0 million , respectively. We valued trademarks using the relief from royalty method, an income approach. For customer relationships, we used the distributor method, a variation of the excess earnings method that uses distributor-based inputs for margins and contributory asset charges. Some of the more significant assumptions inherent in developing the valuations included the estimated annual net cash flows for each indefinite-lived or definite-lived intangible asset (including net sales, cost of products sold, selling and marketing costs, and working capital/contributory asset charges), the royalty rate, the discount rate that appropriately reflects the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends, as well as other factors. We determined the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated product category growth rates, management plans, and market comparables. The impact of revising the fair value estimate of the acquired intangible assets during the nine months ended August 31, 2018 increased goodwill and decreased deferred taxes by $104.6 million and $60.4 million , respectively. We also recognized other preliminary purchase accounting adjustments during the nine months ended August 31, 2018 that decreased goodwill by $2.4 million . Total transaction and integration expenses related to the RB Foods acquisition are anticipated to approximate $100.0 million , of which $60.0 million represent transaction expenses and the remainder represent estimated integration expenses. We incurred $77.1 million of the anticipated transaction and integration expenses during the year ended November 30, 2017. Those costs consisted of the amortization of the acquisition-date fair value adjustment of inventories in the amount of $20.9 million that was included in cost of goods sold for 2017; outside advisory, service and consulting costs; employee-related costs; and other costs related to the acquisition, including the costs of $15.4 million related to the bridge financing commitment that was included in other debt costs for 2017. During the nine months ended August 31, 2018, we incurred additional transaction and integration expenses consisting of outside advisory, service and consulting costs; employee-related costs; and other costs related to the acquisition. The following are the transaction and integration expenses that we have recorded for the three and nine months ended August 31, 2018 and 2017 related to the RB Foods acquisition (in millions): Three months ended August 31, 2018 Nine months ended August 31, 2018 Three and nine months ended August 31, 2017 Transaction expenses included in cost of goods sold $ — $ — $ 5.9 Transaction expenses included in other debt costs — — 15.4 Other transaction expenses 0.1 0.3 22.3 Integration expenses 5.5 21.8 2.2 Total $ 5.6 $ 22.1 $ 45.8 ` The incremental impact to our sales from RB Foods were $114.4 million and $386.0 million for the three and nine months ended August 31, 2018, respectively. For the three and nine months ended August 31, 2017, RB Foods added $22.5 million to our sales. The impact of RB Foods on our consolidated income before income taxes for the three and nine months ended August 31, 2018 was not material, taking into account the effects of the transaction and integration expenses and financing costs. For the three and nine months ended August 31, 2017, the impact of RB Foods on our consolidated income before income taxes approximated the transaction and integration expenses previously noted. The following unaudited pro forma information presents consolidated financial information as if RB Foods had been acquired at the beginning of fiscal 2016. Interest expense has been adjusted to reflect the debt issued to finance the acquisition as though that debt had been outstanding at December 1, 2015. The pro forma results reflect amortization expense of approximately $6.0 million , relating to definite lived intangible assets recorded based upon preliminary third-party valuations. The pro forma results for the nine months ended August 31, 2017 do not include certain transaction and integration costs, amortization of the acquisition-date fair value adjustment of inventories and costs associated with the bridge financing commitment, since all of these costs would be reflected in the fiscal year ended November 30, 2016, assuming that the acquisition had occurred as of December 1, 2015. The pro forma adjustments previously noted have been adjusted for the applicable income tax impact. Basic and diluted shares outstanding have been adjusted to reflect the issuance of 6.35 million shares of our common stock non-voting to partially finance the acquisition. (in millions, except per share data) Nine months ended August 31, 2017 Net sales $ 3,718.1 Net income 351.0 Earnings per share – basic $ 2.67 Earnings per share – diluted $ 2.64 These unaudited pro forma consolidated results are not adjusted for changes in the business that will take place subsequent to our acquisition, including, but not limited to, additional transaction and integration costs that may be incurred. Accordingly, the above unaudited pro forma results are not necessarily indicative of the results that actually would have occurred if the acquisition had been completed as of December 1, 2015, nor are they indicative of future consolidated results. Giotti Acquisition 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 ), including the effect of a $0.2 million favorable net working capital adjustment recorded in the fourth quarter of 2017. 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. At the time of the acquisition, annual sales of Giotti were approximately €53 million . Our acquisition of Giotti in fiscal 2017 expands the breadth of value-added products for McCormick's flavor solutions segment, including additional expertise in flavoring health and nutrition products. Giotti has been included in our flavor solutions segment since its acquisition. During the nine months ended August 31, 2017, we recorded $2.5 million in transaction-related expenses associated with this acquisition; those expenses are included in selling, general and administrative expense in our consolidated income statement. Proforma financial information for the acquisition of Giotti has not been presented because the incremental financial impact is not material. |
Special Charges
Special Charges | 9 Months Ended |
Aug. 31, 2018 | |
Special Charges [Abstract] | |
Special Charges [Text Block] | SPECIAL CHARGES In our consolidated income statement, we include a separate line item captioned “Special charges” in arriving at our consolidated operating income. Special charges consist of expenses associated with certain actions undertaken 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, comprised of our senior management, including our Chairman, President and Chief Executive Officer. Upon presentation of any such proposed action (generally including details with respect to estimated costs, which typically 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 on-going 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 and as more fully described in note 9. The following is a summary of special charges recognized in the three and nine months ended August 31, 2018 and 2017 (in millions): Three months ended August 31, Nine months ended August 31, 2018 2017 2018 2017 Employee severance benefits and related costs $ 0.6 $ 2.6 $ 1.7 $ 4.3 Other costs 2.7 2.1 12.2 8.7 Total $ 3.3 $ 4.7 $ 13.9 $ 13.0 We continue to evaluate changes to our organization structure to enable us to reduce fixed costs, simplify or improve processes, and improve our competitiveness. In 2017, our Management Committee approved a three-year initiative during which we expect to execute significant changes to our global processes, capabilities and operating model to provide a scalable platform for future growth. We expect this initiative to enable us to accelerate our ability to work globally and cross-functionally by aligning and simplifying processes throughout McCormick, in part building upon our current shared services foundation and expanding the end-to-end processes presently under that foundation. We expect this initiative, which we refer to as Global Enablement (GE), to enable this scalable platform for future growth while reducing costs, enabling faster decision making, increasing agility and creating capacity within our organization. While we are continuing to fully develop the details of our GE operating model, we expect the cost of the GE initiative — to be recognized as “Special charges” in our consolidated income statement over its expected three-year course — to range from approximately $55 million to $65 million . Of that $55 million to $65 million , we estimate that two-thirds will be attributable to employee severance and related benefit payments and one-third will be attributable to cash payments associated with the related costs of GE implementation and transition, including outside consulting and other costs directly related to the initiative. The GE initiative is expected to generate annual savings, ranging from approximately $30 million to $40 million , once all actions are implemented. During the three months ended August 31, 2018, we recorded $3.3 million of special charges, consisting primarily of: (i) $3.1 million related to our GE initiative, as more fully described below; and (ii) $0.1 million related to employee severance benefits and other costs directly associated with the relocation of our Chinese manufacturing facilities. Of the $3.1 million in special charges recognized in the third quarter of 2018 related to our GE initiative, $2.6 million related to third party expenses and $0.5 million related to employee severance benefits. During the nine months ended August 31, 2018, we recorded $13.9 million of special charges, consisting primarily of: (i) $9.8 million related to our GE initiative, as more fully described below; (ii) a one-time payment, in the aggregate amount of $2.2 million made to certain 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; (iii) $0.9 million related to employee severance benefits and other costs directly associated with the relocation of one of our Chinese manufacturing facilities; and (iv) $0.7 million related to employee severance benefits and other costs related to the transfer of certain manufacturing operations in our Asia Pacific region to a new facility under construction in Thailand. Of the $9.8 million in special charges recognized during the nine months ended August 31, 2018 related to our GE initiative, $6.1 million related to third party expenses, $3.0 million represented a non-cash asset impairment charge, and $0.7 million related to employee severance benefits. That non-cash asset impairment charge was related to the write-off of certain software assets that are incompatible with our future move, approved in the second quarter of 2018, to a new global enterprise resource planning (ERP) platform to facilitate planned actions under our GE initiative to align and simplify our end-to-end processes to support our future growth. During the three months ended August 31, 2017, we recorded $4.7 million of special charges, consisting primarily of $1.8 million related to third party expenses incurred associated with our evaluation of changes relating to our GE initiative, $1.2 million related to employee severance benefits and other costs directly associated with the relocation of one of our Chinese manufacturing facilities, $1.1 million related to employee severance benefits and other costs associated with action related to the transfer of certain manufacturing operations in our Asia Pacific region to a new facility under construction in Thailand and $0.4 million for severance and other exit costs associated with our Europe, Middle East and Africa (EMEA) region’s closure of its manufacturing plant in Portugal in mid-2017. During the nine months ended August 31, 2017, we recorded $13.0 million of special charges, consisting primarily of $7.3 million related to third party expenses associated with our evaluation of changes relating to our GE initiative, $2.3 million for severance and other exit costs associated with our EMEA region’s closure of its manufacturing plant in Portugal in mid-2017, $1.4 million related to employee severance benefits and other costs directly associated with the relocation of one of Chinese manufacturing facilities, $1.5 million related to employee severance benefits and other costs associated with actions related to the transfer of certain manufacturing operations to a new facility under construction in Thailand, and $0.6 million related to other exit costs associated with actions undertaken to enhance organization efficiency and streamline processes in our EMEA region. These charges were partially offset by a $0.3 million net credit recorded during the nine months ended August 31, 2017 related to our finalization of special charges associated with the 2015 discontinuance of Kohinoor's non-profitable bulk-packaged and broken basmati rice product lines. Of the $13.9 million in special charges recognized during the nine months ended August 31, 2018, approximately $8.7 million were paid in cash and $3.0 million represented a non-cash asset impairment charge, with the remaining accrual expected to be paid in the fourth quarter of 2018 or the first quarter of 2019. In addition to the amounts recognized in the first nine months of 2018, we expect to incur additional special charges during the remainder of 2018. We expect total special charges in 2018 of $18.5 million , consisting of: (i) approximately $13.0 million associated with our GE initiative, including $3.0 million of non-cash asset impairment charges, together with third party expenses and employee severance benefits; (ii) the one-time payment, in the aggregate amount of $2.2 million , previously described made to certain U.S. hourly employees associated with enactment of the U.S. Tax Act; and (iii) the remaining $3.3 million comprised of employee severance benefits and other costs directly associated with the relocation of one of our Chinese manufacturing facilities, ongoing EMEA reorganization plans, and the transfer of certain manufacturing operations in our Asia Pacific region to a new facility under construction in Thailand. The following is a breakdown by business segments of special charges for the three and nine months ended August 31, 2018 and 2017 (in millions): Three months ended August 31, Nine months ended August 31, 2018 2017 2018 2017 Consumer segment $ 2.2 $ 3.0 $ 8.6 $ 8.5 Flavor solutions segment 1.1 1.7 5.3 4.5 Total special charges $ 3.3 $ 4.7 $ 13.9 $ 13.0 All remaining balances associated with our special charges are included in accounts payable and other accrued liabilities in our consolidated balance sheet. |
Goodwill
Goodwill | 9 Months Ended |
Aug. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL The changes in the carrying amount of goodwill by business segment for the nine months ended August 31, 2018 and 2017 were as follows (in millions): 2018 2017 Consumer Flavor Solutions Consumer Flavor Solutions Beginning of year $ 3,385.4 $ 1,104.7 $ 1,608.3 $ 163.1 Changes in preliminary purchase price allocation 68.1 34.1 (7.7 ) — Increases in goodwill from acquisitions — — 1,702.6 926.2 Foreign currency fluctuations (33.9 ) (5.0 ) 96.4 14.4 Balance as of end of period $ 3,419.6 $ 1,133.8 $ 3,399.6 $ 1,103.7 As more fully described in Note 2, during the nine months ended August 31, 2018, we have made changes in the preliminary allocation of the purchase price of the RB Foods acquisition which resulted in a change in goodwill of $68.1 million in the consumer segment and $34.1 million in the flavor solutions segment. During the nine months ended August 31, 2017, a preliminary valuation of the acquired net assets of Giotti in December 2016 resulted in the allocation of $74.9 million of goodwill to the flavor solutions segment. A preliminary valuation of the acquired net assets of RB Foods in August 2017 resulted in the allocation of $1,702.6 million and $851.3 million of goodwill to the consumer segment and flavor solutions segment, respectively. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Aug. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FINANCIAL ARRANGEMENTS AND FINANCIAL INSTRUMENTS | FINANCING ARRANGEMENTS AND FINANCIAL INSTRUMENTS In December 2017, we repaid our $250 million , 5.75% notes that matured on December 15, 2017. During the nine months ended August 31, 2018, we repaid $180 million of the three-year term loan due August 17, 2020 and we repaid $156.3 million of the five-year term loan due August 17, 2022, which included required quarterly principal installments of $56.3 million for the first nine months of fiscal year 2018. During the quarter ended August 31, 2018, we consolidated our Corporate staff and certain non-manufacturing U.S. employees into our new headquarters building in Hunt Valley, Maryland. In July 2016, we entered into a 15-year lease for that headquarters building. The lease requires monthly lease payments of approximately $0.9 million beginning in the first quarter of 2019. The $0.9 million monthly lease payment is subject to adjustment after an initial 60-month period and thereafter on an annual basis as specified in the lease agreement. In addition, the initial $0.9 million monthly lease payment is subject to increase in the event of agreed-upon changes to specifications related to the headquarters building. Upon commencement of fit-out in the second quarter of 2018 we obtained access to the building, which resulted in the lease commencement date for accounting purposes. We have recognized this lease as a capital lease, with the leased asset of $135.7 million included in property, plant and equipment, net, and the lease obligation in the amount of $138.8 million included in long-term debt as of August 31, 2018. During the three and nine months ended August 31, 2018, we recognized amortization expense of $2.2 million and $3.1 million , respectively, related to the leased asset. We use derivative financial instruments to enhance our ability to manage risk, including foreign currency and interest rate exposures, which exist as part of our ongoing business operations. We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instruments. The use of derivative financial instruments is monitored through regular communication with senior management and the use of written guidelines. We are potentially exposed to foreign currency fluctuations affecting net investments, transactions and earnings denominated in foreign currencies. We selectively hedge the potential effect of these foreign currency fluctuations by entering into foreign currency exchange contracts. As of August 31, 2018 , the maximum time frame for our foreign exchange forward contracts is 15 months. Contracts which are designated as hedges of anticipated purchases denominated in a foreign currency (generally purchases of raw materials in U.S. dollars by operating units outside the U.S.) are considered cash flow hedges. From time to time, we enter into fair value foreign currency exchange contracts to manage exposure to currency fluctuations in certain intercompany loans between subsidiaries. At August 31, 2018, the notional value of these contracts was $370.9 million . During the three months ended August 31, 2018 and 2017, we recognized gains of $0.5 million and $2.9 million , respectively, on the change in fair value of these contracts and (losses) of $(1.1) million and $(3.1) million , respectively, on the change in the currency component of the underlying loans. During the nine months ended August 31, 2018 and 2017, we recognized (losses) gains of $(2.1) million and $5.2 million , respectively, on the change in fair value of these contracts and gains (losses) of $1.1 million and $(6.0) million , respectively, on the change in the currency component of the underlying loans. Both the gains and the losses were recognized in our consolidated income statement as other income, net. We finance a portion of our operations with both fixed and variable rate debt instruments, principally commercial paper, notes and bank loans. We utilize interest rate swap agreements to minimize worldwide financing costs and achieve a desired mix of variable and fixed rate debt. As of August 31, 2018, we have $100 million notional value of interest rate swap contracts outstanding which expire in November 2025. We receive interest at 3.25% and pay a variable rate of interest based on three-month LIBOR plus 1.22% . These swaps are designated as fair value hedges of the changes in fair value of $100 million of the $250 million 3.25% medium-term notes due 2025. Any realized gain or loss on these swaps was offset by a corresponding increase or decrease of the value of the hedged debt. Hedge ineffectiveness was not material. All derivatives are recognized at fair value in the balance sheet and recorded in either current or noncurrent other assets or other accrued liabilities or other long-term liabilities depending upon their nature and maturity. The following table discloses the fair values of derivative instruments on our balance sheet (in millions): As of August 31, 2018 Asset Derivatives Liability Derivatives Balance sheet location Notional amount Fair value Balance sheet location Notional amount Fair value Interest rate contracts Other current assets $ — $ — Other accrued liabilities $ 100.0 $ 6.0 Foreign exchange contracts Other current assets 175.8 2.1 Other accrued liabilities 254.6 5.7 Total $ 2.1 $ 11.7 As of August 31, 2017 Asset Derivatives Liability Derivatives Balance sheet location Notional amount Fair value Balance sheet location Notional amount Fair value Interest rate contracts Other current assets $ 100.0 $ 0.3 Other accrued liabilities $ — $ — Foreign exchange contracts Other current assets 116.1 5.5 Other accrued liabilities 358.9 9.1 Total $ 5.8 $ 9.1 As of November 30, 2017 Asset Derivatives Liability Derivatives Balance sheet location Notional amount Fair value Balance sheet location Notional amount Fair value Interest rate contracts Other current assets $ — $ — Other accrued liabilities $ 100.0 $ 2.5 Foreign exchange contracts Other current assets 326.3 12.7 Other accrued liabilities 79.6 4.7 Total $ 12.7 $ 7.2 The following tables disclose the impact of derivative instruments on our other comprehensive income (OCI), accumulated other comprehensive income (AOCI) and our income statement for the three and nine -month periods ended August 31, 2018 and 2017 (in millions): Fair Value Hedges Derivative Income statement location Income (expense) Three months ended August 31, 2018 Three months ended August 31, 2017 Nine months ended August 31, 2018 Nine months ended August 31, 2017 Interest rate contracts Interest expense $ (0.1 ) $ 0.2 $ 0.1 $ 0.7 Three months ended August 31, Income statement location Gain (loss) recognized in income Income statement location Gain (loss) recognized in income Derivative 2018 2017 Hedged item 2018 2017 Foreign exchange contracts Other income, net $ 0.5 $ 2.9 Intercompany loans Other income, net $ (1.1 ) $ (3.1 ) Nine months ended August 31, Income statement location Gain (loss) recognized in income Income statement location Gain (loss) recognized in income Derivative 2018 2017 Hedged item 2018 2017 Foreign exchange contracts Other income, net $ (2.1 ) $ 5.2 Intercompany loans Other income, net $ 1.1 $ (6.0 ) Cash Flow Hedges Three months ended August 31, Derivative Gain or (loss) recognized in OCI Income statement location Gain or (loss) reclassified from AOCI 2018 2017 2018 2017 Interest rate contracts $ — $ 0.3 Interest expense $ 0.2 $ (0.1 ) Foreign exchange contracts 0.1 (4.7 ) Cost of goods sold (0.8 ) 0.3 Total $ 0.1 $ (4.4 ) $ (0.6 ) $ 0.2 Nine months ended August 31, Derivative Gain or (Loss) recognized in OCI Income statement location Gain or (Loss) reclassified from AOCI 2018 2017 2018 2017 Interest rate contracts $ — $ (2.9 ) Interest expense $ 0.4 $ (0.2 ) Foreign exchange contracts 0.9 (6.5 ) Cost of goods sold (3.5 ) 2.1 Total $ 0.9 $ (9.4 ) $ (3.1 ) $ 1.9 For all derivatives, the net amount of accumulated other comprehensive income (loss) expected to be reclassified in the next 12 months is $0.5 million as an increase to earnings. The amount of gain or loss recognized in income on the ineffective portion of derivative instruments is not material. The amounts noted in the tables above for OCI do not include any adjustments for the impact of deferred income taxes. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Aug. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value can be measured using valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. At August 31, 2018, August 31, 2017 and November 30, 2017, we had no financial assets or liabilities that were subject to a level 3 fair value measurement. Our population of financial assets and liabilities subject to fair value measurements on a recurring basis are as follows (in millions): August 31, 2018 Fair Value Level 1 Level 2 Assets Cash and cash equivalents $ 73.0 $ 73.0 $ — Insurance contracts 123.7 — 123.7 Bonds and other long-term investments 4.4 4.4 — Foreign currency derivatives 2.1 — 2.1 Total $ 203.2 $ 77.4 $ 125.8 Liabilities Foreign currency derivatives $ 5.7 $ — $ 5.7 Interest rate derivatives 6.0 — 6.0 Total $ 11.7 $ — $ 11.7 August 31, 2017 Fair Value Level 1 Level 2 Assets Cash and cash equivalents $ 166.1 $ 166.1 $ — Insurance contracts 115.2 — 115.2 Bonds and other long-term investments 8.1 8.1 — Interest rate derivatives 0.3 — 0.3 Foreign currency derivatives 5.5 — 5.5 Total $ 295.2 $ 174.2 $ 121.0 Liabilities Foreign currency derivatives $ 9.1 $ — $ 9.1 Total $ 9.1 $ — $ 9.1 November 30, 2017 Fair Value Level 1 Level 2 Assets Cash and cash equivalents $ 186.8 $ 186.8 $ — Insurance contracts 119.5 — 119.5 Bonds and other long-term investments 7.5 7.5 — Foreign currency derivatives 12.7 — 12.7 Total $ 326.5 $ 194.3 $ 132.2 Liabilities Foreign currency derivatives $ 4.7 $ — $ 4.7 Interest rate derivatives 2.5 — 2.5 Total $ 7.2 $ — $ 7.2 Because of their short-term nature, the amounts reported in the balance sheet for cash and cash equivalents, receivables, short-term borrowings and trade accounts payable approximate fair value. The fair values of insurance contracts are based upon the underlying values of the securities in which they are invested and are from quoted market prices from various stock and bond exchanges for similar type assets. The fair values of bonds and other long-term investments are based on quoted market prices from various stock and bond exchanges. The fair values for interest rate and foreign currency derivatives are based on values for similar instruments using models with market-based inputs. The following table sets forth the carrying amounts and fair values of our long-term debt (including the current portion thereof) at August 31, 2018, August 31, 2017 and November 30, 2017 (in millions): August 31, 2018 August 31, 2017 November 30, 2017 Carrying amount $ 4,345.3 $ 5,027.8 $ 4,769.5 Fair value 4,294.5 5,154.7 4,858.5 Level 1 valuation techniques $ 3,218.0 $ 3,647.1 $ 3,615.2 Level 2 valuation techniques 1,076.5 1,507.6 1,243.3 Total fair value $ 4,294.5 $ 5,154.7 $ 4,858.5 The fair value for Level 2 long-term debt is determined by using quoted prices for similar debt instruments. |
Employee Benefit and Retirement
Employee Benefit and Retirement Plans | 9 Months Ended |
Aug. 31, 2018 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT AND RETIREMENT PLANS | EMPLOYEE BENEFIT AND RETIREMENT PLANS During the first quarters of 2018 and 2017, we made the following significant changes to our employee benefit and retirement plans: First quarter of 2018 • On December 1, 2017, our Management Committee approved the freezing of benefits under our pension plans in Canada. The effective date of this freeze is November 30, 2019. Although those plans will be frozen, employees who are participants in the plans will retain benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plans. First quarter of 2017 • 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 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, 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 is November 30, 2018. Although the U.S. Pension plan will be frozen, employees who are participants in that plan will retain 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. Although the SERP has been frozen, executives who were 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. As a result of these changes, we remeasured pension assets and benefit obligations as of the dates of the approvals indicated above and: (i) in fiscal year 2018, we reduced the Canadian plan benefit obligations by $17.5 million ; and (ii) in fiscal year 2017, we reduced the U.S. and U.K. plan benefit obligations by $69.9 million and $7.8 million , respectively. These remeasurements resulted in non-cash, pre-tax net actuarial gains of $17.5 million and $77.7 million for the nine months ended August 31, 2018 and 2017, respectively. These net actuarial gains consist principally of curtailment gains of $18.0 million and $76.7 million , and are included in our Consolidated Statement of Comprehensive Income for the nine months ended August 31, 2018 and 2017, respectively, as a component of Other comprehensive income (loss) on the line entitled Unrealized components of pension plans. Deferred taxes associated with these actuarial gains, together with other unrealized components of pension plans recognized during the nine months ended August 31, 2018 and 2017, are also included in that statement as a component of Other comprehensive income (loss). During the third quarter of 2017, we made the following changes to our postretirement medical and life insurance benefits impacting certain U.S. employees: • 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 employee (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 his or her retirement date by December 31, 2017 and retires on or before December 31, 2018. As a result of these changes, we remeasured the other postretirement benefit obligation as of August 23, 2017, resulting in a reduction of the other postretirement benefit obligation of $27.1 million . These remeasurements resulted in an aggregate non-cash, pre-tax net prior service cost credit of $27.1 million , which is included in our Consolidated Statement of Comprehensive. Income for the three and nine months ended August 31, 2017, as a component of Other comprehensive income (loss) on the line entitled Unrealized components of pension and other postretirement plans. Deferred taxes associated with this aggregate prior service cost credit, together with other unrealized components of other postretirement benefit plans recognized during the three and nine months ended August 31, 2017, are also included in that statement as a component of Other comprehensive income (loss). The following table presents the components of our pension expense of the defined benefit plans for the three months ended August 31, 2018 and 2017 (in millions): United States International 2018 2017 2018 2017 Defined benefit plans Service cost $ 4.4 $ 3.4 $ 1.0 $ 1.4 Interest costs 8.0 7.8 2.2 2.6 Expected return on plan assets (10.8 ) (10.3 ) (4.0 ) (3.8 ) Amortization of net actuarial losses 2.4 1.3 0.7 1.0 Total pension expense $ 4.0 $ 2.2 $ (0.1 ) $ 1.2 The following table presents the components of our pension expense of the defined benefit plans for the nine months ended August 31, 2018 and 2017 (in millions): United States International 2018 2017 2018 2017 Defined benefit plans Service cost $ 13.1 $ 10.7 $ 3.2 $ 4.2 Interest costs 23.8 23.5 6.9 7.6 Expected return on plan assets (32.4 ) (30.8 ) (12.4 ) (11.2 ) Amortization of prior service costs — — 0.5 0.6 Amortization of net actuarial losses 7.4 4.5 2.1 3.0 Total pension expense $ 11.9 $ 7.9 $ 0.3 $ 4.2 During the nine months ended August 31, 2018 and 2017 , we contributed $ 12.0 million and $ 10.9 million , respectively, to our pension plans. Total contributions to our pension plans in fiscal year 2017 were $ 18.7 million . The following table presents the components of our other postretirement benefits expense (in millions): Three months ended August 31, Nine months ended August 31, 2018 2017 2018 2017 Other postretirement benefits Service cost $ 0.6 $ 0.6 $ 1.8 $ 2.0 Interest costs 0.6 0.9 1.8 2.7 Amortization of prior service credits (2.2 ) (0.3 ) (6.5 ) (0.3 ) Amortization of gains — — — (0.1 ) Total other postretirement benefits expense $ (1.0 ) $ 1.2 $ (2.9 ) $ 4.3 The reduction in other postretirement benefits expense for the three and nine months ended August 31, 2018 is primarily attributable to plan amendments that were approved by our Management Committee on August 23, 2017 as previously described. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Aug. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION We have three types of stock-based compensation awards: restricted stock units (RSUs), stock options and company stock awarded as part of our long-term performance plan (LTPP). The following table sets forth the stock-based compensation expense recorded in selling, general and administrative (SG&A) expense (in millions): Three months ended August 31, Nine months ended August 31, 2018 2017 2018 2017 Stock-based compensation expense $ 5.5 $ 4.0 $ 21.6 $ 18.4 Our 2018 annual grant of stock options and RSUs occurred in the second quarter, similar to the 2017 annual grant. The weighted-average grant-date fair value of an option granted in 2018 was $20.30 and in 2017 was $17.61 as calculated under a lattice pricing model. Substantially all of the options granted vest ratably over a three-year period or upon retirement. The fair values of option grants in the stated periods were computed using the following range of assumptions for our various stock compensation plans: 2018 2017 Risk-free interest rates 1.7 - 2.9% 0.9 - 2.4% Dividend yield 2.0% 1.9% Expected volatility 18.4% 18.7% Expected lives (in years) 7.6 7.6 The following is a summary of our stock option activity for the nine months ended August 31, 2018 and 2017 : 2018 2017 (shares in millions) Number of Shares Weighted- Average Exercise Price Number of Shares Weighted- Average Exercise Price Outstanding at beginning of period 4.8 $ 71.91 4.9 $ 66.00 Granted 0.4 105.95 0.6 98.07 Exercised (0.9 ) 51.82 (0.6 ) 49.50 Outstanding at end of the period 4.3 $ 79.31 4.9 $ 71.59 Exercisable at end of the period 3.4 $ 73.52 3.9 $ 65.12 As of August 31, 2018 , the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $194.2 million and for options currently exercisable was $173.9 million . The total intrinsic value of all options exercised during the nine months ended August 31, 2018 and 2017 was $56.9 million and $26.9 million , respectively. The following is a summary of our RSU activity for the nine months ended August 31, 2018 and 2017 : 2018 2017 (shares in thousands) Number of Shares Weighted- Average Grant-Date Fair Value Number of Shares Weighted- Average Grant-Date Fair Value Outstanding at beginning of period 267 $ 86.47 267 $ 80.08 Granted 201 101.17 130 94.63 Vested (117 ) 88.35 (118 ) 80.62 Forfeited (6 ) 95.68 (12 ) 90.65 Outstanding at end of period 345 $ 94.21 267 $ 86.49 The following is a summary of our LTPP activity for the nine months ended August 31, 2018 and 2017 : 2018 2017 (shares in thousands) Number of Shares Weighted- Average Grant-Date Fair Value Number of Shares Weighted- Average Grant-Date Fair Value Outstanding at beginning of period 220 $ 84.31 201 $ 78.10 Granted 86 101.90 78 89.96 Vested (59 ) 74.02 (43 ) 69.04 Forfeited (2 ) 96.74 — — Outstanding at end of period 245 $ 92.87 236 $ 83.63 |
Income Taxes
Income Taxes | 9 Months Ended |
Aug. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES In December 2017, President Trump signed into law H.R. 1, “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (this legislation was formerly called the “Tax Cuts and Jobs Act” and is referred to herein as the “U.S. Tax Act”). The U.S. Tax Act provides for significant changes in the U.S. Internal Revenue Code of 1986, as amended. Certain provisions of the U.S. Tax Act are effective during our fiscal year ending November 30, 2018 with all provisions of the U.S. Tax Act effective as of the beginning of our fiscal year ending November 30, 2019. The U.S. Tax Act contains provisions with separate effective dates but is generally effective for taxable years beginning after December 31, 2017. Beginning on January 1, 2018, the U.S. Tax Act lowered the U.S. corporate income tax rate from 35% to 21% on our U.S. earnings from that date and beyond. The revaluation of our U.S. deferred tax assets and liabilities to the 21% corporate tax rate has reduced our net U.S. deferred income tax liability by $381.4 million and is reflected as a reduction in our income tax expense in our results for the nine months ended August 31, 2018. The U.S. Tax Act imposes a one-time transition tax on post-1986 earnings of non-U.S. affiliates that have not been repatriated for purposes of U.S. federal income tax, with those earnings taxed at rates of 15.5% for earnings reflected by cash and cash equivalent items and 8% for other assets. We estimate this transition tax to be $72.3 million . In addition to this transition tax, we have incurred additional foreign withholding taxes of $5.2 million associated with previously unremitted prior year earnings of certain foreign subsidiaries that were no longer considered indefinitely reinvested at January 1, 2018, and were subsequently distributed in the three months ended August 31, 2018, as well as a $4.3 million reduction in our fiscal 2018 income taxes directly resulting from the transition tax, both of which we have recognized as a component of our income tax expense for the nine months ended August 31, 2018 for a net transition tax impact of $73.2 million . As we are not a calendar year-end company, certain elements of the transition tax cannot be finalized until the completion of our U.S. tax year ending November 30, 2018. The cash tax effects of the transition tax in the amount of $72.3 million can be remitted in installments over an eight-year period and we intend to do so. In addition to the previously described net transition tax of $73.2 million , we could also be subject to additional foreign withholding taxes and an additional U.S. tax (generally associated with the tax on foreign exchange gains or losses) if additional distributions of the previously described underlying earnings of non-U.S. affiliates occurs. The Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (SAB 118) on December 23, 2017. SAB 118 provides a one-year measurement period from a registrant’s reporting period that includes the U.S. Tax Act’s enactment date to allow registrants sufficient time to obtain, prepare and analyze information to complete the accounting required under ASC 740 Income Taxes . While based upon estimates and judgments that we believe to be reasonable, the $308.2 million net benefit recognized during the nine months ended August 31, 2018 related to the U.S. Tax Act, as described above, is provisional and may change during the measurement period as a result of, among other things, changes in interpretations and assumptions we have made, guidance that may be issued and other actions we may take as a result of the U.S. Tax Act different from that presently assumed. During the third quarter of 2018, we recognized a tax benefit of $10.3 million as a change in estimate to the $297.9 million provisional net benefit associated with the U.S. Tax Act recognized in the first quarter of 2018. Income taxes for the three months ended August 31, 2018 included $20.6 million of discrete tax benefits consisting of the following: (i) the $10.3 million net benefit associated with the U.S. Tax Act, previously described, (ii) $7.9 million of excess tax benefits associated with share-based compensation, (iii) $2.0 million related to the reversal of unrecognized tax benefits and related interest associated with the expiration of statutes of limitation in U.S. and non-U.S. jurisdictions, and (iv) $1.4 million for an adjustment to a prior year tax accrual based on the final return filed, less a net detriment of $1.0 million associated with other items. Income taxes for the nine months ended August 31, 2018 included $326.0 million of discrete tax benefits consisting of the following: (i) the $308.2 million net benefit associated with the U.S. Tax Act, previously described, (ii) $12.4 million of excess tax benefits associated with share-based compensation, (iii) $5.5 million related to the reversal of unrecognized tax benefits and related interest associated with the expiration of statutes of limitation in non-U.S. jurisdictions, and (iv) $1.4 million for an adjustment to a prior year tax accrual based on the final return filed, less a net detriment of $1.5 million , including $0.5 million related to the revaluation of deferred tax assets resulting from legislation enacted in a non-U.S. jurisdiction in our first quarter. Other than the discrete tax benefits mentioned previously and additions for current year tax positions, there were no significant changes to unrecognized tax benefits during the three and nine months ended August 31, 2018. Income taxes for the three months ended August 31, 2017 included $6.6 million of discrete tax benefits consisting of the following: (i) $4.6 million related to the reversal of unrecognized tax benefits and related interest associated with the settlement of tax audits in various jurisdictions and the expiration of a statute of limitation in a non-U.S. jurisdiction, (ii) $1.2 million for an adjustment to a prior year tax accrual based on the final return filed, and (iii) $0.8 million of excess tax benefits associated with share-based compensation. Income taxes for the nine months ended August 31, 2017 included $17.3 million of discrete tax benefits consisting of the following: (i) $9.4 million related to excess tax benefits associated with share-based compensation, (ii) the reversal of unrecognized tax benefits and related interest of $6.8 million associated with the expiration of statute of limitations and settlement of tax audits in various jurisdictions, (iii) $1.2 million for an adjustment to a prior year tax accrual based on the final return filed, less (iv) a net detriment of $0.1 million resulting from the revaluation of deferred tax assets related to legislation enacted in the first quarter of 2017. As of August 31, 2018, we believe the reasonably possible total amount of unrecognized tax benefits that could increase or decrease in the next 12 months as a result of various statute expirations, audit closures, and/or tax settlements would not be material to our consolidated financial statements. |
Earnings Per Share and Stock Is
Earnings Per Share and Stock Issuances | 9 Months Ended |
Aug. 31, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
EARNINGS PER SHARE AND STOCK ISSUANCES | EARNINGS PER SHARE AND STOCK ISSUANCE On August 11, 2017, we issued 6,353,591 shares of our common stock non-voting in connection with our acquisition of RB Foods (see note 2), which included 828,729 shares from the exercise of the underwriters' option to purchase additional shares. The net proceeds from this issuance, after the underwriting discount and related expenses, was $554.0 million . The following table sets forth the reconciliation of average shares outstanding (in millions): Three months ended Nine months ended August 31, 2018 August 31, 2017 August 31, 2018 August 31, 2017 Average shares outstanding – basic 131.6 126.3 131.4 125.5 Effect of dilutive securities: Stock options/RSUs/LTPP 1.6 1.5 1.6 1.7 Average shares outstanding – diluted 133.2 127.8 133.0 127.2 The following table sets forth the stock options and RSUs for the three and nine months ended August 31, 2018 and 2017 which were not considered in our earnings per share calculation since they were anti-dilutive (in millions): Three months ended Nine months ended August 31, 2018 August 31, 2017 August 31, 2018 August 31, 2017 Anti-dilutive securities 0.3 1.3 0.4 1.1 The following table sets forth the common stock activity for the three and nine months ended August 31, 2018 and 2017 (in millions): Three months ended Nine months ended August 31, 2018 August 31, 2017 August 31, 2018 August 31, 2017 Shares issued, net of shares withheld for taxes, under stock options, RSUs, LTPP and employee stock purchase plans 0.5 — 1.0 0.6 Shares issued in connection with RB Foods acquisition — 6.4 — 6.4 Shares repurchased under the stock repurchase program 0.1 — 0.4 1.4 As of August 31, 2018 , $149.3 million remained of the $600 million share repurchase authorization that was authorized by the Board of Directors in March 2015. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Aug. 31, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table sets forth the components of accumulated other comprehensive income (loss), net of tax where applicable (in millions): August 31, 2018 August 31, 2017 November 30, 2017 Foreign currency translation adjustment $ (197.3 ) $ (114.5 ) $ (124.4 ) Unrealized loss on foreign currency exchange contracts (1.5 ) (4.1 ) (3.6 ) Unamortized value of settled interest rate swaps 0.8 1.0 0.8 Pension and other postretirement costs (156.1 ) (148.3 ) (152.3 ) Accumulated other comprehensive loss $ (354.1 ) $ (265.9 ) $ (279.5 ) In conjunction with the adoption of ASU No. 2018-02 Income Statement-Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, we reclassified $20.9 million of other comprehensive income, primarily associated with pension and other postretirement plans, from accumulated other comprehensive income to retained earnings effective December 1, 2017. The following table sets forth the amounts reclassified from accumulated other comprehensive income (loss) and into consolidated net income for the three and nine months ended August 31, 2018 and 2017 (in millions): Three months ended Nine months ended Affected Line Items in the Condensed Consolidated Income Statement Accumulated Other Comprehensive Income (Loss) Components August 31, 2018 August 31, 2017 August 31, 2018 August 31, 2017 (Gains)/losses on cash flow hedges: Interest rate derivatives $ (0.2 ) $ 0.1 $ (0.4 ) $ 0.2 Interest expense Foreign exchange contracts 0.8 (0.3 ) 3.5 (2.1 ) Cost of goods sold Total before tax 0.6 (0.2 ) 3.1 (1.9 ) Tax effect (0.1 ) 0.1 (0.6 ) 0.6 Income taxes Net, after tax $ 0.5 $ (0.1 ) $ 2.5 $ (1.3 ) Amortization of pension and postretirement benefit adjustments: Amortization of prior service costs (credit) (1) $ (2.2 ) $ (0.3 ) $ (6.0 ) $ 0.3 SG&A expense/ Cost of goods sold Amortization of net actuarial losses (1) 3.1 2.3 9.5 7.4 SG&A expense/ Cost of goods sold Total before tax 0.9 2.0 3.5 7.7 Tax effect (0.2 ) (0.7 ) (0.8 ) (2.7 ) Income taxes Net, after tax $ 0.7 $ 1.3 $ 2.7 $ 5.0 (1) This accumulated other comprehensive income (loss) component is included in the computation of total pension expense and other postretirement benefits expense (refer to note 7 for additional details). |
Business Segments
Business Segments | 9 Months Ended |
Aug. 31, 2018 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS We operate in two business segments: consumer and flavor solutions. (We formerly referred to our flavor solutions segment as our industrial segment.) The consumer and flavor solutions segments manufacture, market and distribute spices, seasoning mixes, condiments and other flavorful products throughout the world. Our consumer segment sells to retail outlets, including grocery, mass merchandise, warehouse clubs, discount and drug stores under the “McCormick” brand and a variety of brands around the world, including “French’s”, “Frank’s RedHot”, “Lawry’s”, “Zatarain’s”, “Simply Asia”, “Thai Kitchen”, “Ducros”, “Vahine”, “Schwartz”, “Club House”, “Kamis”, “Kohinoor”, “DaQiao”, “Drogheria & Alimentari”, “Stubb's”, and “Gourmet Garden”. Our flavor solutions segment sells to food manufacturers and the foodservice industry both directly and indirectly through distributors. In each of our segments, we produce and sell many individual products which are similar in composition and nature. With their primary attribute being flavor, we regard the products within each of our segments to be fairly homogenous. It is impracticable to segregate and identify sales and profits for each of these individual product lines. We measure segment performance based on operating income excluding special charges, as this activity is managed separately from the business segments, and transaction and integration expenses related to our acquisition of RB Foods, as these expenses are similarly managed separately from the business segments. These transaction and integration expenses excluded from our segment performance measure include the amortization of the acquisition-date fair value adjustment of inventories that is included in cost of goods sold, costs directly associated with that acquisition and costs associated with integrating the RB Foods business. Although the segments are managed separately due to their distinct distribution channels and marketing strategies, manufacturing and warehousing are often integrated to maximize cost efficiencies. We do not segregate jointly utilized assets by individual segment for internal reporting, evaluating performance or allocating capital. Because of manufacturing integration for certain products within the segments, products are not sold from one segment to another but rather inventory is transferred at cost. Intersegment sales are not material. Consumer Flavor Solutions Total (in millions) Three months ended August 31, 2018 Net sales $ 790.8 $ 554.5 $ 1,345.3 Operating income excluding special charges and transaction and integration expenses 154.1 87.8 241.9 Income from unconsolidated operations 7.7 0.7 8.4 Three months ended August 31, 2017 Net sales $ 696.8 $ 488.4 $ 1,185.2 Operating income excluding special charges and transaction and integration expenses 139.7 64.1 203.8 Income from unconsolidated operations 6.8 1.4 8.2 Nine months ended August 31, 2018 Net sales $ 2,333.6 $ 1,576.1 $ 3,909.7 Operating income excluding special charges and transaction and integration expenses 417.4 227.0 644.4 Income from unconsolidated operations 20.8 3.1 23.9 Nine months ended August 31, 2017 Net sales $ 1,991.8 $ 1,351.4 $ 3,343.2 Operating income excluding special charges and transaction and integration expenses 328.9 150.0 478.9 Income from unconsolidated operations 20.0 3.6 23.6 A reconciliation of operating income excluding special charges and, for the three and nine months ended August 31, 2018, transaction and integration expenses, to operating income is as follows (in millions): Consumer Flavor Solutions Total Three months ended August 31, 2018 Operating income excluding special charges and transaction and integration expenses $ 154.1 $ 87.8 $ 241.9 Less: Special charges 2.2 1.1 3.3 Less: Transaction and integration expenses 3.8 1.8 5.6 Operating income $ 148.1 $ 84.9 $ 233.0 Three months ended August 31, 2017 Operating income excluding special charges and transaction and integration expenses $ 139.7 $ 64.1 $ 203.8 Less: Special charges 3.0 1.7 4.7 Less: Transaction and integration expenses included in cost of goods sold 3.2 2.7 5.9 Less: Other transaction and integration expenses 16.3 8.2 24.5 Operating income $ 117.2 $ 51.5 $ 168.7 Nine months ended August 31, 2018 Operating income excluding special charges and transaction and integration expenses $ 417.4 $ 227.0 $ 644.4 Less: Special charges 8.6 5.3 13.9 Less: Transaction and integration expenses 14.8 7.3 22.1 Operating income $ 394.0 $ 214.4 $ 608.4 Nine months ended August 31, 2017 Operating income excluding special charges and transaction and integration expenses $ 328.9 $ 150.0 $ 478.9 Less: Special charges 8.5 4.5 13.0 Less: Transaction and integration expenses included in cost of goods sold 3.2 2.7 5.9 Less: Other transaction and integration expenses 16.3 8.2 24.5 Operating income $ 300.9 $ 134.6 $ 435.5 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Aug. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by United States generally accepted accounting principles (U.S. GAAP) for complete financial statements. In our opinion, the accompanying condensed consolidated financial statements contain all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position and the results of operations for the interim periods presented. The results of consolidated operations for the three- and nine -month periods ended August 31, 2018 are not necessarily indicative of the results to be expected for the full year. Historically, our net sales, net income and cash flow from operations are lower in the first half of the fiscal year and increase in the second half. The typical increase in net sales, net income and cash flow from operations in the second half of the year is largely due to the consumer business cycle in the U.S., where customers typically purchase more products in the fourth quarter due to the Thanksgiving and Christmas holiday seasons. In addition, net income for the nine-month period ended August 31, 2018 reflects a significant non-recurring tax benefit as more fully described in note 9. For further information, refer to the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended November 30, 2017 . |
Accounting and disclosure charges | Accounting Pronouncements Adopted in 2018 In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-02 Income Statement-Reporting Comprehensive Income (Topic 220) — Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This guidance allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act enacted in December 2017. The new standard, which would be effective for the first quarter of our fiscal year ending November 30, 2020, permits early adoption in any interim period or fiscal year before the effective date. We adopted this new accounting pronouncement effective December 1, 2017. The adoption resulted in a reclassification of $20.9 million from accumulated other comprehensive income to retained earnings. In July 2015, the FASB issued ASU No. 2015-11 Simplifying the Measurement of Inventory (Topic 330). This guidance is intended to simplify the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost and net realizable value test. We have adopted ASU No. 2015-11 effective December 1, 2017. The adoption of this new accounting pronouncement did not have a material impact on our financial statements. Recently Issued Accounting Pronouncements In August 2017, the FASB issued ASU No. 2017-12 Derivatives and Hedging (Topic 815) — Targeted Improvements to Accounting for Hedging Activities. This guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2020. Early adoption is permitted in any interim period or fiscal year before the effective date for all entities. If the guidance is early adopted in an interim period, any adjustments would be reflected as of the beginning of the fiscal year that includes that interim period. While we are still evaluating the timing of adoption, we currently do not expect this guidance to have a material impact on our financial statements. In March 2017, the FASB issued ASU No. 2017-07 Compensation-Retirement Benefits (Topic 715) — Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This guidance revises how employers that sponsor defined benefit pension and other postretirement plans present the net periodic benefit cost in their income statement and requires that the service cost component of net periodic benefit cost be presented in the same income statement line items as other employee compensation costs from services rendered during the period. Of the components of net periodic benefit cost, only the service cost component will be eligible for asset capitalization. The other components of the net periodic benefit cost must be presented separately from the line items that include the service cost and outside of any subtotal of operating income on the income statement. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2019 and should be applied on a retrospective basis. Adoption of the new standard will only impact classification within our Consolidated Statements of Income. In January 2017, the FASB issued ASU No. 2017-04 Intangibles — Goodwill and Other Topics (Topic 350) — Simplifying the Test for Goodwill Impairment. This guidance eliminates the requirement to calculate the implied fair value of goodwill of a reporting unit to measure a goodwill impairment charge. Instead, a company will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2021. Early adoption is permitted for all entities for annual and interim goodwill impairment testing dates after January 1, 2017. While we are still evaluating the timing of adoption, we currently do not expect this guidance to have a material impact on our financial statements. In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805) — Clarifying the Definition of a Business. This guidance changes the definition of a business to assist entities in evaluating when a set of transferred assets and activities constitutes a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in Accounting Standards Codification (ASC 606) Revenue from Contracts with Customers. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2019. We currently cannot estimate the impact that adoption of this ASU will have on our financial statements and related disclosures as its application is dependent on the facts and circumstances of individual transactions. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). This guidance revises existing practice related to accounting for leases under Accounting Standards Codification Topic 840 Leases (ASC 840) for both lessees and lessors. Our leases principally relate to: (i) certain real estate, including that related to a number of administrative, distribution and manufacturing locations, and, beginning in May 2018, to our new headquarters building; (ii) certain machinery and equipment, including a corporate airplane and automobiles; and (iii) certain software. The new guidance in ASU No. 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for virtually all leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating or finance. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while finance leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements , which provides an additional transition method that allows entities to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2020. We intend to adopt the requirements of the new standard via a cumulative-effect adjustment without restating prior periods. We have not yet determined the impact from adoption of this new accounting pronouncement on our financial statements. In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606) . This guidance is intended to improve — and converge with international standards — the financial reporting requirements for revenue from contracts with customers. The new standard will be effective for the first quarter of our fiscal year ending November 30, 2019. In preparation for our adoption of the new standard in our fiscal year ending November 30, 2019, we have obtained representative samples of contracts and other forms of agreements with our customers in the U.S. and international locations and are evaluating the provisions contained therein in light of the five-step model specified by the new guidance. That five-step model includes: (1) determination of whether a contract — an agreement between two or more parties that creates legally enforceable rights and obligations — exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. We have substantially completed our assessment of the new standard and we do not expect our adoption of the new standard to impact our consolidated net income or otherwise have a material impact on our consolidated financial position or cash flows. We intend to adopt the requirements of the new standard in the first quarter of fiscal 2019 utilizing the full retrospective method. We are still evaluating the disclosure requirements under the standard. As we complete our overall evaluation, we are also identifying and preparing to implement changes to our accounting policies, practices and controls to support the new standard. |
Acquisitions Acquisitions (Tabl
Acquisitions Acquisitions (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | Three months ended August 31, 2018 Nine months ended August 31, 2018 Three and nine months ended August 31, 2017 Transaction expenses included in cost of goods sold $ — $ — $ 5.9 Transaction expenses included in other debt costs — — 15.4 Other transaction expenses 0.1 0.3 22.3 Integration expenses 5.5 21.8 2.2 Total $ 5.6 $ 22.1 $ 45.8 summarized in the table below (in millions): Trade accounts receivable $ 36.9 Inventories 67.1 Property, plant and equipment 38.5 Goodwill 2,648.5 Intangible assets 2,430.0 Other assets 4.4 Trade accounts payable (65.8 ) Other accrued liabilities (35.0 ) Deferred taxes (893.9 ) Other long-term liabilities (20.8 ) Total $ 4,209.9 |
Business Acquisition, Pro Forma Information | (in millions, except per share data) Nine months ended August 31, 2017 Net sales $ 3,718.1 Net income 351.0 Earnings per share – basic $ 2.67 Earnings per share – diluted $ 2.64 |
Special Charges (Tables)
Special Charges (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Segment Reporting Information [Line Items] | |
Special Charges Summary [Table Text Block] | The following is a summary of special charges recognized in the three and nine months ended August 31, 2018 and 2017 (in millions): Three months ended August 31, Nine months ended August 31, 2018 2017 2018 2017 Employee severance benefits and related costs $ 0.6 $ 2.6 $ 1.7 $ 4.3 Other costs 2.7 2.1 12.2 8.7 Total $ 3.3 $ 4.7 $ 13.9 $ 13.0 |
Special Charges Summary by Segment [Table Text Block] | The following is a breakdown by business segments of special charges for the three and nine months ended August 31, 2018 and 2017 (in millions): Three months ended August 31, Nine months ended August 31, 2018 2017 2018 2017 Consumer segment $ 2.2 $ 3.0 $ 8.6 $ 8.5 Flavor solutions segment 1.1 1.7 5.3 4.5 Total special charges $ 3.3 $ 4.7 $ 13.9 $ 13.0 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | The changes in the carrying amount of goodwill by business segment for the nine months ended August 31, 2018 and 2017 were as follows (in millions): 2018 2017 Consumer Flavor Solutions Consumer Flavor Solutions Beginning of year $ 3,385.4 $ 1,104.7 $ 1,608.3 $ 163.1 Changes in preliminary purchase price allocation 68.1 34.1 (7.7 ) — Increases in goodwill from acquisitions — — 1,702.6 926.2 Foreign currency fluctuations (33.9 ) (5.0 ) 96.4 14.4 Balance as of end of period $ 3,419.6 $ 1,133.8 $ 3,399.6 $ 1,103.7 As more fully described in Note 2, during the nine months ended August 31, 2018, we have made changes in the preliminary allocation of the purchase price of the RB Foods acquisition which resulted in a change in goodwill of $68.1 million in the consumer segment and $34.1 million in the flavor solutions segment. During the nine months ended August 31, 2017, a preliminary valuation of the acquired net assets of Giotti in December 2016 resulted in the allocation of $74.9 million of goodwill to the flavor solutions segment. A preliminary valuation of the acquired net assets of RB Foods in August 2017 resulted in the allocation of $1,702.6 million and $851.3 million of goodwill to the consumer segment and flavor solutions segment, respectively. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Fair values of derivative instruments on balance sheet | The following table discloses the fair values of derivative instruments on our balance sheet (in millions): As of August 31, 2018 Asset Derivatives Liability Derivatives Balance sheet location Notional amount Fair value Balance sheet location Notional amount Fair value Interest rate contracts Other current assets $ — $ — Other accrued liabilities $ 100.0 $ 6.0 Foreign exchange contracts Other current assets 175.8 2.1 Other accrued liabilities 254.6 5.7 Total $ 2.1 $ 11.7 As of August 31, 2017 Asset Derivatives Liability Derivatives Balance sheet location Notional amount Fair value Balance sheet location Notional amount Fair value Interest rate contracts Other current assets $ 100.0 $ 0.3 Other accrued liabilities $ — $ — Foreign exchange contracts Other current assets 116.1 5.5 Other accrued liabilities 358.9 9.1 Total $ 5.8 $ 9.1 As of November 30, 2017 Asset Derivatives Liability Derivatives Balance sheet location Notional amount Fair value Balance sheet location Notional amount Fair value Interest rate contracts Other current assets $ — $ — Other accrued liabilities $ 100.0 $ 2.5 Foreign exchange contracts Other current assets 326.3 12.7 Other accrued liabilities 79.6 4.7 Total $ 12.7 $ 7.2 |
Fair Value Hedging | |
Impact of fair value and cash flow hedges on other comprehensive income, accumulated other comprehensive income and income statement | The following tables disclose the impact of derivative instruments on our other comprehensive income (OCI), accumulated other comprehensive income (AOCI) and our income statement for the three and nine -month periods ended August 31, 2018 and 2017 (in millions): Fair Value Hedges Derivative Income statement location Income (expense) Three months ended August 31, 2018 Three months ended August 31, 2017 Nine months ended August 31, 2018 Nine months ended August 31, 2017 Interest rate contracts Interest expense $ (0.1 ) $ 0.2 $ 0.1 $ 0.7 Three months ended August 31, Income statement location Gain (loss) recognized in income Income statement location Gain (loss) recognized in income Derivative 2018 2017 Hedged item 2018 2017 Foreign exchange contracts Other income, net $ 0.5 $ 2.9 Intercompany loans Other income, net $ (1.1 ) $ (3.1 ) Nine months ended August 31, Income statement location Gain (loss) recognized in income Income statement location Gain (loss) recognized in income Derivative 2018 2017 Hedged item 2018 2017 Foreign exchange contracts Other income, net $ (2.1 ) $ 5.2 Intercompany loans Other income, net $ 1.1 $ (6.0 ) |
Cash Flow Hedging | |
Impact of fair value and cash flow hedges on other comprehensive income, accumulated other comprehensive income and income statement | Cash Flow Hedges Three months ended August 31, Derivative Gain or (loss) recognized in OCI Income statement location Gain or (loss) reclassified from AOCI 2018 2017 2018 2017 Interest rate contracts $ — $ 0.3 Interest expense $ 0.2 $ (0.1 ) Foreign exchange contracts 0.1 (4.7 ) Cost of goods sold (0.8 ) 0.3 Total $ 0.1 $ (4.4 ) $ (0.6 ) $ 0.2 Nine months ended August 31, Derivative Gain or (Loss) recognized in OCI Income statement location Gain or (Loss) reclassified from AOCI 2018 2017 2018 2017 Interest rate contracts $ — $ (2.9 ) Interest expense $ 0.4 $ (0.2 ) Foreign exchange contracts 0.9 (6.5 ) Cost of goods sold (3.5 ) 2.1 Total $ 0.9 $ (9.4 ) $ (3.1 ) $ 1.9 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on recurring basis | Our population of financial assets and liabilities subject to fair value measurements on a recurring basis are as follows (in millions): August 31, 2018 Fair Value Level 1 Level 2 Assets Cash and cash equivalents $ 73.0 $ 73.0 $ — Insurance contracts 123.7 — 123.7 Bonds and other long-term investments 4.4 4.4 — Foreign currency derivatives 2.1 — 2.1 Total $ 203.2 $ 77.4 $ 125.8 Liabilities Foreign currency derivatives $ 5.7 $ — $ 5.7 Interest rate derivatives 6.0 — 6.0 Total $ 11.7 $ — $ 11.7 August 31, 2017 Fair Value Level 1 Level 2 Assets Cash and cash equivalents $ 166.1 $ 166.1 $ — Insurance contracts 115.2 — 115.2 Bonds and other long-term investments 8.1 8.1 — Interest rate derivatives 0.3 — 0.3 Foreign currency derivatives 5.5 — 5.5 Total $ 295.2 $ 174.2 $ 121.0 Liabilities Foreign currency derivatives $ 9.1 $ — $ 9.1 Total $ 9.1 $ — $ 9.1 November 30, 2017 Fair Value Level 1 Level 2 Assets Cash and cash equivalents $ 186.8 $ 186.8 $ — Insurance contracts 119.5 — 119.5 Bonds and other long-term investments 7.5 7.5 — Foreign currency derivatives 12.7 — 12.7 Total $ 326.5 $ 194.3 $ 132.2 Liabilities Foreign currency derivatives $ 4.7 $ — $ 4.7 Interest rate derivatives 2.5 — 2.5 Total $ 7.2 $ — $ 7.2 |
Fair Value, by Balance Sheet Grouping | The following table sets forth the carrying amounts and fair values of our long-term debt (including the current portion thereof) at August 31, 2018, August 31, 2017 and November 30, 2017 (in millions): August 31, 2018 August 31, 2017 November 30, 2017 Carrying amount $ 4,345.3 $ 5,027.8 $ 4,769.5 Fair value 4,294.5 5,154.7 4,858.5 Level 1 valuation techniques $ 3,218.0 $ 3,647.1 $ 3,615.2 Level 2 valuation techniques 1,076.5 1,507.6 1,243.3 Total fair value $ 4,294.5 $ 5,154.7 $ 4,858.5 |
Employee Benefit and Retireme24
Employee Benefit and Retirement Plans (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of defined benefit plans disclosures | The following table presents the components of our pension expense of the defined benefit plans for the three months ended August 31, 2018 and 2017 (in millions): United States International 2018 2017 2018 2017 Defined benefit plans Service cost $ 4.4 $ 3.4 $ 1.0 $ 1.4 Interest costs 8.0 7.8 2.2 2.6 Expected return on plan assets (10.8 ) (10.3 ) (4.0 ) (3.8 ) Amortization of net actuarial losses 2.4 1.3 0.7 1.0 Total pension expense $ 4.0 $ 2.2 $ (0.1 ) $ 1.2 The following table presents the components of our pension expense of the defined benefit plans for the nine months ended August 31, 2018 and 2017 (in millions): United States International 2018 2017 2018 2017 Defined benefit plans Service cost $ 13.1 $ 10.7 $ 3.2 $ 4.2 Interest costs 23.8 23.5 6.9 7.6 Expected return on plan assets (32.4 ) (30.8 ) (12.4 ) (11.2 ) Amortization of prior service costs — — 0.5 0.6 Amortization of net actuarial losses 7.4 4.5 2.1 3.0 Total pension expense $ 11.9 $ 7.9 $ 0.3 $ 4.2 |
Schedule of costs of retirement plans | The following table presents the components of our other postretirement benefits expense (in millions): Three months ended August 31, Nine months ended August 31, 2018 2017 2018 2017 Other postretirement benefits Service cost $ 0.6 $ 0.6 $ 1.8 $ 2.0 Interest costs 0.6 0.9 1.8 2.7 Amortization of prior service credits (2.2 ) (0.3 ) (6.5 ) (0.3 ) Amortization of gains — — — (0.1 ) Total other postretirement benefits expense $ (1.0 ) $ 1.2 $ (2.9 ) $ 4.3 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Based Compensation in Selling, General and Administrative Expense | The following table sets forth the stock-based compensation expense recorded in selling, general and administrative (SG&A) expense (in millions): Three months ended August 31, Nine months ended August 31, 2018 2017 2018 2017 Stock-based compensation expense $ 5.5 $ 4.0 $ 21.6 $ 18.4 |
Summary of Option Activity | The following is a summary of our stock option activity for the nine months ended August 31, 2018 and 2017 : 2018 2017 (shares in millions) Number of Shares Weighted- Average Exercise Price Number of Shares Weighted- Average Exercise Price Outstanding at beginning of period 4.8 $ 71.91 4.9 $ 66.00 Granted 0.4 105.95 0.6 98.07 Exercised (0.9 ) 51.82 (0.6 ) 49.50 Outstanding at end of the period 4.3 $ 79.31 4.9 $ 71.59 Exercisable at end of the period 3.4 $ 73.52 3.9 $ 65.12 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair values of option grants in the stated periods were computed using the following range of assumptions for our various stock compensation plans: 2018 2017 Risk-free interest rates 1.7 - 2.9% 0.9 - 2.4% Dividend yield 2.0% 1.9% Expected volatility 18.4% 18.7% Expected lives (in years) 7.6 7.6 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The following is a summary of our RSU activity for the nine months ended August 31, 2018 and 2017 : 2018 2017 (shares in thousands) Number of Shares Weighted- Average Grant-Date Fair Value Number of Shares Weighted- Average Grant-Date Fair Value Outstanding at beginning of period 267 $ 86.47 267 $ 80.08 Granted 201 101.17 130 94.63 Vested (117 ) 88.35 (118 ) 80.62 Forfeited (6 ) 95.68 (12 ) 90.65 Outstanding at end of period 345 $ 94.21 267 $ 86.49 |
Schedule of Share Based Compensation, Performance Shares, Activity | The following is a summary of our LTPP activity for the nine months ended August 31, 2018 and 2017 : 2018 2017 (shares in thousands) Number of Shares Weighted- Average Grant-Date Fair Value Number of Shares Weighted- Average Grant-Date Fair Value Outstanding at beginning of period 220 $ 84.31 201 $ 78.10 Granted 86 101.90 78 89.96 Vested (59 ) 74.02 (43 ) 69.04 Forfeited (2 ) 96.74 — — Outstanding at end of period 245 $ 92.87 236 $ 83.63 |
Earnings Per Share and Stock 26
Earnings Per Share and Stock Issuances (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Reconciliation of average shares outstanding | The following table sets forth the reconciliation of average shares outstanding (in millions): Three months ended Nine months ended August 31, 2018 August 31, 2017 August 31, 2018 August 31, 2017 Average shares outstanding – basic 131.6 126.3 131.4 125.5 Effect of dilutive securities: Stock options/RSUs/LTPP 1.6 1.5 1.6 1.7 Average shares outstanding – diluted 133.2 127.8 133.0 127.2 |
Anti-dilutive securities not considered in earnings per share calculation | The following table sets forth the stock options and RSUs for the three and nine months ended August 31, 2018 and 2017 which were not considered in our earnings per share calculation since they were anti-dilutive (in millions): Three months ended Nine months ended August 31, 2018 August 31, 2017 August 31, 2018 August 31, 2017 Anti-dilutive securities 0.3 1.3 0.4 1.1 |
Common stock activity | The following table sets forth the common stock activity for the three and nine months ended August 31, 2018 and 2017 (in millions): Three months ended Nine months ended August 31, 2018 August 31, 2017 August 31, 2018 August 31, 2017 Shares issued, net of shares withheld for taxes, under stock options, RSUs, LTPP and employee stock purchase plans 0.5 — 1.0 0.6 Shares issued in connection with RB Foods acquisition — 6.4 — 6.4 Shares repurchased under the stock repurchase program 0.1 — 0.4 1.4 |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following table sets forth the components of accumulated other comprehensive income (loss), net of tax where applicable (in millions): August 31, 2018 August 31, 2017 November 30, 2017 Foreign currency translation adjustment $ (197.3 ) $ (114.5 ) $ (124.4 ) Unrealized loss on foreign currency exchange contracts (1.5 ) (4.1 ) (3.6 ) Unamortized value of settled interest rate swaps 0.8 1.0 0.8 Pension and other postretirement costs (156.1 ) (148.3 ) (152.3 ) Accumulated other comprehensive loss $ (354.1 ) $ (265.9 ) $ (279.5 ) |
Reclassification out of Accumulated Other Comprehensive Income | The following table sets forth the amounts reclassified from accumulated other comprehensive income (loss) and into consolidated net income for the three and nine months ended August 31, 2018 and 2017 (in millions): Three months ended Nine months ended Affected Line Items in the Condensed Consolidated Income Statement Accumulated Other Comprehensive Income (Loss) Components August 31, 2018 August 31, 2017 August 31, 2018 August 31, 2017 (Gains)/losses on cash flow hedges: Interest rate derivatives $ (0.2 ) $ 0.1 $ (0.4 ) $ 0.2 Interest expense Foreign exchange contracts 0.8 (0.3 ) 3.5 (2.1 ) Cost of goods sold Total before tax 0.6 (0.2 ) 3.1 (1.9 ) Tax effect (0.1 ) 0.1 (0.6 ) 0.6 Income taxes Net, after tax $ 0.5 $ (0.1 ) $ 2.5 $ (1.3 ) Amortization of pension and postretirement benefit adjustments: Amortization of prior service costs (credit) (1) $ (2.2 ) $ (0.3 ) $ (6.0 ) $ 0.3 SG&A expense/ Cost of goods sold Amortization of net actuarial losses (1) 3.1 2.3 9.5 7.4 SG&A expense/ Cost of goods sold Total before tax 0.9 2.0 3.5 7.7 Tax effect (0.2 ) (0.7 ) (0.8 ) (2.7 ) Income taxes Net, after tax $ 0.7 $ 1.3 $ 2.7 $ 5.0 (1) This accumulated other comprehensive income (loss) component is included in the computation of total pension expense and other postretirement benefits expense (refer to note 7 for additional details). |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Aug. 31, 2018 | |
Segment Reporting [Abstract] | |
Business segments | Consumer Flavor Solutions Total (in millions) Three months ended August 31, 2018 Net sales $ 790.8 $ 554.5 $ 1,345.3 Operating income excluding special charges and transaction and integration expenses 154.1 87.8 241.9 Income from unconsolidated operations 7.7 0.7 8.4 Three months ended August 31, 2017 Net sales $ 696.8 $ 488.4 $ 1,185.2 Operating income excluding special charges and transaction and integration expenses 139.7 64.1 203.8 Income from unconsolidated operations 6.8 1.4 8.2 Nine months ended August 31, 2018 Net sales $ 2,333.6 $ 1,576.1 $ 3,909.7 Operating income excluding special charges and transaction and integration expenses 417.4 227.0 644.4 Income from unconsolidated operations 20.8 3.1 23.9 Nine months ended August 31, 2017 Net sales $ 1,991.8 $ 1,351.4 $ 3,343.2 Operating income excluding special charges and transaction and integration expenses 328.9 150.0 478.9 Income from unconsolidated operations 20.0 3.6 23.6 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | A reconciliation of operating income excluding special charges and, for the three and nine months ended August 31, 2018, transaction and integration expenses, to operating income is as follows (in millions): Consumer Flavor Solutions Total Three months ended August 31, 2018 Operating income excluding special charges and transaction and integration expenses $ 154.1 $ 87.8 $ 241.9 Less: Special charges 2.2 1.1 3.3 Less: Transaction and integration expenses 3.8 1.8 5.6 Operating income $ 148.1 $ 84.9 $ 233.0 Three months ended August 31, 2017 Operating income excluding special charges and transaction and integration expenses $ 139.7 $ 64.1 $ 203.8 Less: Special charges 3.0 1.7 4.7 Less: Transaction and integration expenses included in cost of goods sold 3.2 2.7 5.9 Less: Other transaction and integration expenses 16.3 8.2 24.5 Operating income $ 117.2 $ 51.5 $ 168.7 Nine months ended August 31, 2018 Operating income excluding special charges and transaction and integration expenses $ 417.4 $ 227.0 $ 644.4 Less: Special charges 8.6 5.3 13.9 Less: Transaction and integration expenses 14.8 7.3 22.1 Operating income $ 394.0 $ 214.4 $ 608.4 Nine months ended August 31, 2017 Operating income excluding special charges and transaction and integration expenses $ 328.9 $ 150.0 $ 478.9 Less: Special charges 8.5 4.5 13.0 Less: Transaction and integration expenses included in cost of goods sold 3.2 2.7 5.9 Less: Other transaction and integration expenses 16.3 8.2 24.5 Operating income $ 300.9 $ 134.6 $ 435.5 |
Accounting Policies Accounting
Accounting Policies Accounting Policies - Additional Information (Details) $ in Millions | 9 Months Ended |
Aug. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 20.9 |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Aug. 31, 2018USD ($) | Aug. 31, 2017USD ($) | Aug. 31, 2018USD ($) | Aug. 31, 2017EUR (€) | Aug. 31, 2017USD ($) | Nov. 30, 2017USD ($) | Aug. 17, 2017USD ($) | Feb. 28, 2018USD ($) | |
Business Acquisition [Line Items] | ||||||||
Business acquisition valuation of assets allocated to goodwill | $ 4,553.4 | $ 4,503.3 | $ 4,553.4 | $ 4,503.3 | $ 4,490.1 | |||
Changes in preliminary purchase price allocation | 2.4 | |||||||
RB Foods | ||||||||
Business Acquisition [Line Items] | ||||||||
Net Assets acquired | 4,209.9 | 4,209.9 | ||||||
Cash acquired | $ 24.3 | |||||||
Working Capital Adjustments | $ 4.2 | |||||||
Net sales | 3,718.1 | $ 570 | ||||||
Deferred Tax Assets, Goodwill adjustments | 60.4 | 60.4 | ||||||
Business acquisition valuation of assets allocated to goodwill | 2,648.5 | 2,648.5 | ||||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | 114.4 | 22.5 | 386 | |||||
Anticipated Transaction Cost | 100 | |||||||
Anticipated Transaction Cost, Current | 60 | |||||||
Amortization and depreciation | 6 | |||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Inventory | 20.9 | |||||||
Indefinite-Lived Trademarks | 2,320 | 2,320 | ||||||
Finite-Lived Customer Relationships, Gross | $ 110 | 110 | ||||||
Changes in preliminary purchase price allocation | $ (104.6) | |||||||
Giotti | ||||||||
Business Acquisition [Line Items] | ||||||||
Working Capital Adjustments | $ 0.2 | |||||||
Net sales | € | € 53 | |||||||
Business Acquisition, Transaction Costs | $ 2.5 | 2.5 | ||||||
Cash Acquired from Acquisition | 1.2 | |||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 123.8 |
Acquisitions - Business Acquisi
Acquisitions - Business Acquisitions (Details) - USD ($) $ in Millions | Aug. 17, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | Nov. 30, 2017 | Feb. 28, 2018 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 4,553.4 | $ 4,503.3 | $ 4,553.4 | $ 4,503.3 | $ 4,490.1 | ||
Other debt costs | 0 | 15.4 | 0 | 15.4 | |||
RB Foods | |||||||
Business Acquisition [Line Items] | |||||||
Working Capital Adjustments | $ 4.2 | ||||||
Anticipated Transaction Cost | 100 | ||||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | 114.4 | 22.5 | 386 | ||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 6,353,591 | ||||||
Trade accounts receivable | 36.9 | 36.9 | |||||
Inventories | 67.1 | 67.1 | |||||
Property, plant and equipment | 38.5 | 38.5 | |||||
Goodwill | 2,648.5 | 2,648.5 | |||||
Intangible assets | 2,430 | 2,430 | |||||
Other assets | 4.4 | 4.4 | |||||
Trade accounts payable | (65.8) | (65.8) | |||||
Other accrued liabilities | (35) | (35) | |||||
Deferred taxes | (893.9) | (893.9) | |||||
Other long-term liabilities | $ (20.8) | (20.8) | |||||
Total | $ 4,209.9 | $ 4,209.9 | |||||
Anticipated Transaction Cost, Current | $ 60 | ||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Inventory | 20.9 | ||||||
Other debt costs | $ 15.4 | ||||||
Common Class A [Member] | RB Foods | |||||||
Business Acquisition [Line Items] | |||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 6,350,000 |
Acquisitions - Cost Expensed (D
Acquisitions - Cost Expensed (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | Nov. 30, 2017 | |
Business Acquisition [Line Items] | |||||
Business Combination, Acquisition Expenses Included in Cost of Good Sold | $ 5.9 | $ 5.9 | |||
Other debt costs | $ 0 | 15.4 | $ 0 | $ 15.4 | |
RB Foods | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Acquisition Expenses Included in Cost of Good Sold | 0 | 5.9 | 0 | ||
Anticipated Transaction Cost | 100 | ||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Inventory | $ 20.9 | ||||
Transaction expenses included in cost of goods sold | 0.1 | 22.3 | 0.3 | ||
Business Combination, Acquisition Expenses Included in Other Debt Cost | 0 | 15.4 | 0 | ||
Integration expenses | 5.5 | 2.2 | 21.8 | ||
Total | $ 5.6 | $ 45.8 | $ 22.1 | 77.1 | |
Other debt costs | $ 15.4 |
Acquisitions - Pro Forma Disclo
Acquisitions - Pro Forma Disclosure (Details) - RB Foods - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended |
Aug. 31, 2017 | Aug. 17, 2017 | |
Business Acquisition [Line Items] | ||
Net sales | $ 3,718.1 | $ 570 |
Net income | $ 351 | |
Earning per share - basic (usd per share) | $ 2.67 | |
Earning per share - diluted (usd per share) | $ 2.64 |
Special Charges (Details)
Special Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Special Charges [Line Items] | ||||
Special charges | $ 3.3 | $ 4.7 | $ 13.9 | $ 13 |
UNITED STATES | ||||
Special Charges [Line Items] | ||||
Special charges | 2.2 | |||
INDIA | ||||
Special Charges [Line Items] | ||||
Special charges | 0.3 | |||
PORTUGAL | ||||
Special Charges [Line Items] | ||||
Special charges | 0.4 | 2.3 | ||
CHINA | ||||
Special Charges [Line Items] | ||||
Special charges | 0.1 | 1.2 | 0.9 | 1.4 |
Asia Pacific | ||||
Special Charges [Line Items] | ||||
Special charges | 1.1 | 0.7 | 1.5 | |
EMEA [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 0.6 | |||
Employee Severance Charges [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 0.6 | 2.6 | 1.7 | 4.3 |
GE_Project [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 3.1 | 1.8 | 9.8 | 7.3 |
Cash special charges | 2.6 | 6.1 | ||
GE Employee Severance Special Charges | 0.5 | 0.7 | ||
GE_Project [Member] | Minimum [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 55 | |||
Expected cost savings special charges | 30 | |||
GE_Project [Member] | Maximum [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 65 | |||
Expected cost savings special charges | 40 | |||
Total plan expenses [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 18.5 | |||
Total plan expenses [Member] | Asia Pacific | ||||
Special Charges [Line Items] | ||||
Special charges | 3.3 | |||
Total plan expenses [Member] | GE_Project [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 13 | |||
Other exit costs [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 2.7 | 2.1 | 12.2 | 8.7 |
total special charges [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 3.3 | 4.7 | 13.9 | 13 |
Special charges cash paid | 8.7 | |||
Special charges impairment | 3 | |||
Consumer | ||||
Special Charges [Line Items] | ||||
Special charges | 2.2 | 3 | 8.6 | 8.5 |
Consumer | total special charges [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | 2.2 | 3 | 8.6 | 8.5 |
Flavor Solutions | ||||
Special Charges [Line Items] | ||||
Special charges | 1.1 | 1.7 | 5.3 | 4.5 |
Flavor Solutions | total special charges [Member] | ||||
Special Charges [Line Items] | ||||
Special charges | $ 1.1 | $ 1.7 | $ 5.3 | $ 4.5 |
Goodwill - Intangible Assets (D
Goodwill - Intangible Assets (Details) - USD ($) $ in Millions | Aug. 31, 2018 | Nov. 30, 2017 | Aug. 31, 2017 |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $ 4,553.4 | $ 4,490.1 | $ 4,503.3 |
Goodwill - Additional Disclosur
Goodwill - Additional Disclosures (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Aug. 31, 2018 | Aug. 31, 2017 | Nov. 30, 2017 | Nov. 30, 2016 | |
Goodwill [Line Items] | ||||
Changes in preliminary purchase price allocation | $ (2.4) | |||
Goodwill | 4,553.4 | $ 4,503.3 | $ 4,490.1 | |
RB Foods | ||||
Goodwill [Line Items] | ||||
Changes in preliminary purchase price allocation | 104.6 | |||
Goodwill | 2,648.5 | |||
Consumer | RB Foods [Member] | ||||
Goodwill [Line Items] | ||||
Changes in preliminary purchase price allocation | 68.1 | 1,702.6 | ||
Flavor Solutions | ||||
Goodwill [Line Items] | ||||
Changes in preliminary purchase price allocation | 34.1 | 0 | ||
Increases in goodwill from acquisitions | 0 | 926.2 | ||
Goodwill | 1,133.8 | 1,103.7 | 1,104.7 | $ 163.1 |
Flavor Solutions | RB Foods [Member] | ||||
Goodwill [Line Items] | ||||
Changes in preliminary purchase price allocation | 34.1 | 851.3 | ||
Flavor Solutions | Giotti | ||||
Goodwill [Line Items] | ||||
Increases in goodwill from acquisitions | 74.9 | |||
Consumer | ||||
Goodwill [Line Items] | ||||
Changes in preliminary purchase price allocation | 68.1 | (7.7) | ||
Increases in goodwill from acquisitions | 0 | 1,702.6 | ||
Goodwill | $ 3,419.6 | $ 3,399.6 | $ 3,385.4 | $ 1,608.3 |
Goodwill - Segment Goodwill Rol
Goodwill - Segment Goodwill Rollforward (Details) - USD ($) $ in Millions | 9 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Goodwill [Line Items] | ||
Beginning of year | $ 4,490.1 | |
Changes in preliminary purchase price allocation | (2.4) | |
Ending of year | 4,553.4 | $ 4,503.3 |
Consumer | ||
Goodwill [Line Items] | ||
Beginning of year | 3,385.4 | 1,608.3 |
Changes in preliminary purchase price allocation | 68.1 | (7.7) |
Increases in goodwill from acquisitions | 0 | 1,702.6 |
Foreign currency fluctuations | (33.9) | 96.4 |
Ending of year | 3,419.6 | 3,399.6 |
Flavor Solutions | ||
Goodwill [Line Items] | ||
Beginning of year | 1,104.7 | 163.1 |
Changes in preliminary purchase price allocation | 34.1 | 0 |
Increases in goodwill from acquisitions | 0 | 926.2 |
Foreign currency fluctuations | (5) | 14.4 |
Ending of year | $ 1,133.8 | $ 1,103.7 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Maximum time frame for foreign exchange contracts, months | 15 months | |||
Amount of accumulated other comprehensive income expected to be reclassified to earnings in next 12 months | $ 0.5 | $ 0.5 | ||
Fair Value Hedging | Foreign exchange contracts | ||||
Debt Instrument [Line Items] | ||||
Derivative, Notional Amount | 370.9 | 370.9 | ||
Other Income | Fair Value Hedging | Foreign exchange contracts | ||||
Debt Instrument [Line Items] | ||||
Foreign Currency Transaction Gain (Loss), Realized | 0.5 | $ 2.9 | (2.1) | $ 5.2 |
Other Income | Fair Value Hedging | Loans Payable | ||||
Debt Instrument [Line Items] | ||||
Foreign Currency Transaction Gain (Loss), Realized | (1.1) | $ (3.1) | 1.1 | $ (6) |
Interest Rate Swap [Member] | Treasury Lock [Member] | ||||
Debt Instrument [Line Items] | ||||
Derivative, Notional Amount | 100 | 100 | ||
Notes Payable | $ 250 | $ 250 | ||
Derivative, Fixed Interest Rate | 3.25% | 3.25% | ||
Five Point Seven Five Notes Due On Two Thousand Seventeen [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated Note interest rate | 5.75% | 5.75% | ||
Debt Instrument, Annual Principal Payment | $ 250 | $ 250 | ||
Term Loan Due 2020 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Annual Principal Payment | 180 | 180 | ||
Term Loan Due Two Thousand Twenty Two [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Annual Principal Payment | 156.3 | 156.3 | ||
Corporate, Non-Segment [Member] | ||||
Debt Instrument [Line Items] | ||||
Payments for Rent | 0.9 | |||
Capital Lease Obligations Incurred | 135.7 | |||
Investment Building and Building Improvements | 138.8 | 138.8 | ||
Amortization | 2.2 | 3.1 | ||
Minimum [Member] | Term Loan Due Two Thousand Twenty Two [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Annual Principal Payment | $ 56.3 | $ 56.3 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value of Derivative Instruments on Balance Sheet (Detail) - USD ($) $ in Millions | Aug. 31, 2018 | Nov. 30, 2017 | Aug. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total derivative assets, Fair Value | $ 2.1 | $ 12.7 | $ 5.8 |
Total derivative liabilities, Fair Value | 11.7 | 7.2 | 9.1 |
Interest rate contracts | Other current assets | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Interest rate contracts, Fair Value | 0 | 0 | 0.3 |
Derivative Asset, Notional Amount | 0 | 0 | 100 |
Interest rate contracts | Other accrued liabilities | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Interest rate contracts, Fair Value | 6 | 2.5 | 0 |
Derivative Asset, Notional Amount | 100 | 100 | 0 |
Foreign exchange contracts | Other current assets | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative Asset, Notional Amount | 175.8 | 326.3 | 116.1 |
Foreign Currency Fair Value Hedge Derivative at Fair Value, Net | 2.1 | 12.7 | 5.5 |
Foreign exchange contracts | Other accrued liabilities | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Foreign Currency Fair Value Hedge Derivative at Fair Value, Net | 5.7 | 4.7 | 9.1 |
Notes subject to interest rate hedge | $ 254.6 | $ 79.6 | $ 358.9 |
Interest Rate Swap [Member] | Treasury Lock [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative, Basis Spread on Variable Rate | 1.22% | ||
Derivative, Notional Amount | $ 100 | ||
Notes Payable | $ 250 | ||
Three Point Two Five Zero Notes Due On Two Thousand Twenty Five [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Stated Note interest rate | 3.25% |
Financial Instruments - Impact
Financial Instruments - Impact of Fair Value Hedges on Other Comprehensive Income, Accumulated Other Comprehensive Income and Income Statement (Details) - Fair Value Hedging - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Interest Expense | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest income (expense) | $ (0.1) | $ 0.2 | $ 0.1 | $ 0.7 |
Other Income | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign Currency Transaction Gain (Loss), Realized | 0.5 | 2.9 | (2.1) | 5.2 |
Other Income | Loans Payable | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign Currency Transaction Gain (Loss), Realized | $ (1.1) | $ (3.1) | $ 1.1 | $ (6) |
Financial Instruments - Impac41
Financial Instruments - Impact of Cash Flow Hedges on Other Comprehensive Income, Accumulated Other Comprehensive Income and Income Statement (Details) - Cash Flow Hedging - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain or (Loss) recognized in OCI | $ 0.1 | $ (4.4) | $ 0.9 | $ (9.4) |
Gain or (Loss) reclassified from AOCI | (0.6) | 0.2 | (3.1) | 1.9 |
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain or (Loss) recognized in OCI | 0 | 0.3 | 0 | (2.9) |
Interest rate contracts | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain or (Loss) reclassified from AOCI | 0.2 | (0.1) | 0.4 | (0.2) |
Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain or (Loss) recognized in OCI | 0.1 | (4.7) | 0.9 | (6.5) |
Foreign exchange contracts | Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain or (Loss) reclassified from AOCI | $ (0.8) | $ 0.3 | $ (3.5) | $ 2.1 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Aug. 31, 2018 | Nov. 30, 2017 | Aug. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt | $ 4,345.3 | $ 4,769.5 | $ 5,027.8 |
Long-term debt, fair value | 4,294.5 | 4,858.5 | 5,154.7 |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 3,218 | 3,615.2 | 3,647.1 |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 1,076.5 | 1,243.3 | 1,507.6 |
Recurring | |||
Assets [Abstract] | |||
Cash and cash equivalents | 73 | 186.8 | 166.1 |
Insurance contracts | 123.7 | 119.5 | 115.2 |
Bonds and other long-term investments | 4.4 | 7.5 | 8.1 |
Interest Rate Derivative Assets, at Fair Value | 0.3 | ||
Foreign currency derivatives | 2.1 | 12.7 | 5.5 |
Total assets | 203.2 | 326.5 | 295.2 |
Liabilities [Abstract] | |||
Foreign currency derivatives | 5.7 | 4.7 | 9.1 |
Interest rate derivatives | 6 | 2.5 | |
Total liabilities | 11.7 | 7.2 | 9.1 |
Recurring | Level 1 | |||
Assets [Abstract] | |||
Cash and cash equivalents | 73 | 186.8 | 166.1 |
Insurance contracts | 0 | 0 | 0 |
Bonds and other long-term investments | 4.4 | 7.5 | 8.1 |
Interest Rate Derivative Assets, at Fair Value | 0 | ||
Foreign currency derivatives | 0 | 0 | 0 |
Total assets | 77.4 | 194.3 | 174.2 |
Liabilities [Abstract] | |||
Foreign currency derivatives | 0 | 0 | 0 |
Interest rate derivatives | 0 | ||
Total liabilities | 0 | 0 | 0 |
Recurring | Level 2 | |||
Assets [Abstract] | |||
Cash and cash equivalents | 0 | 0 | 0 |
Insurance contracts | 123.7 | 119.5 | 115.2 |
Bonds and other long-term investments | 0 | 0 | 0 |
Interest Rate Derivative Assets, at Fair Value | 0.3 | ||
Foreign currency derivatives | 2.1 | 12.7 | 5.5 |
Total assets | 125.8 | 132.2 | 121 |
Liabilities [Abstract] | |||
Foreign currency derivatives | 5.7 | 4.7 | 9.1 |
Interest rate derivatives | 6 | 2.5 | |
Total liabilities | $ 11.7 | $ 7.2 | $ 9.1 |
Employee Benefit And Retireme43
Employee Benefit And Retirement Plans - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | Nov. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Accumulated Benefit Obligation, (Increase) Decrease for Settlement and Curtailment | $ 17.5 | $ 77.7 | |
Defined Benefit Plan, Accumulated Other Comprehensive Income (Loss), Gain (Loss), before Tax | 18 | 76.7 | |
Payment for Pension Benefits | 12 | 10.9 | $ 18.7 |
Pension and other postretirement costs | 156.1 | 148.3 | $ 152.3 |
Foreign Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Accumulated Benefit Obligation, (Increase) Decrease for Settlement and Curtailment | $ 17.5 | 7.8 | |
Other Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Accumulated Benefit Obligation, (Increase) Decrease for Settlement and Curtailment | 27.1 | ||
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), before Tax | $ 27.1 |
Employee Benefit And Retireme44
Employee Benefit And Retirement Plans - Components of Pension Expense of Defined benefit plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Accumulated Benefit Obligation, (Increase) Decrease for Settlement and Curtailment | $ 17.5 | $ 77.7 | ||
Defined Benefit Plan, Accumulated Other Comprehensive Income (Loss), Gain (Loss), before Tax | $ 18 | $ 76.7 | 18 | 76.7 |
Domestic Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Accumulated Benefit Obligation, (Increase) Decrease for Settlement and Curtailment | 69.9 | |||
Service cost | 4.4 | 3.4 | 13.1 | 10.7 |
Interest costs | 8 | 7.8 | 23.8 | 23.5 |
Expected return on plan assets | (10.8) | (10.3) | (32.4) | (30.8) |
Amortization of prior service costs | 0 | 0 | ||
Recognized net actuarial loss | 2.4 | 1.3 | 7.4 | 4.5 |
Total pension expense | 4 | 2.2 | 11.9 | 7.9 |
Foreign Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Accumulated Benefit Obligation, (Increase) Decrease for Settlement and Curtailment | 17.5 | 7.8 | ||
Service cost | 1 | 1.4 | 3.2 | 4.2 |
Interest costs | 2.2 | 2.6 | 6.9 | 7.6 |
Expected return on plan assets | (4) | (3.8) | (12.4) | (11.2) |
Amortization of prior service costs | 0.5 | 0.6 | ||
Recognized net actuarial loss | 0.7 | 1 | 2.1 | 3 |
Total pension expense | $ (0.1) | $ 1.2 | $ 0.3 | $ 4.2 |
Employee Benefit and Retireme45
Employee Benefit and Retirement Plans - Components of Other Postretirement Benefit Expenses (Details) - Other Postretirement Benefit Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 0.6 | $ 0.6 | $ 1.8 | $ 2 |
Interest costs | 0.6 | 0.9 | 1.8 | 2.7 |
Amortization of prior service costs | (2.2) | (0.3) | (6.5) | (0.3) |
Defined Benefit Plan, Amortization of Gain (Loss) | 0 | 0 | 0 | 0.1 |
Total other postretirement expense | $ (1) | $ 1.2 | $ (2.9) | $ 4.3 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Millions | 9 Months Ended | |
Aug. 31, 2018USD ($)award_type$ / shares | Aug. 31, 2017USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in period (shares) | $ / shares | $ 20.30 | $ 17.61 |
Number of stock-based compensation award types | award_type | 3 | |
Intrinsic value for all options outstanding | $ 194.2 | |
Intrinsic value for exercisable options | 173.9 | |
Total Intrinsic Value of all options exercised | $ 56.9 | $ 26.9 |
Stock-Based Compensation - Sell
Stock-Based Compensation - Selling, General and Administrative Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Share-based Compensation [Abstract] | ||||
Total stock-based compensation expense | $ 5.5 | $ 4 | $ 21.6 | $ 18.4 |
Stock-Based Compensation - Rang
Stock-Based Compensation - Range of Assumptions for Various Stock Compensation Plans (Details) | 9 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 2.00% | 1.90% |
Expected volatility | 18.40% | 18.70% |
Expected lives (in years) | 7 years 7 months | 7 years 7 months |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.70% | 0.90% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.90% | 2.40% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - Stock Options - $ / shares shares in Millions | 9 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning of period, Number of Shares | 4.8 | 4.9 |
Grants, Number of Shares | 0.4 | 0.6 |
Exercised, Number of Shares | 0.9 | 0.6 |
Outstanding at end of period, Number of Shares | 4.3 | 4.9 |
Excercisable at end of the period, Number of Shares | 3.4 | 3.9 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding at beginning of period, Weighted-Average Exercise Price | $ 71.91 | $ 66 |
Grants, Weighted-Average Exercise Price | 105.95 | 98.07 |
Exercised, Weighted-Average Exercise Price | 51.82 | 49.50 |
Outstanding at end of period, Weighted-Average Exercise Price | 79.31 | 71.59 |
Exercisable at end of the period, Weighted-Average Exercise Price | $ 73.52 | $ 65.12 |
Stock-Based Compensation - Su50
Stock-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 9 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding at beginning of period, Number of Shares | 267 | 267 |
Granted, Number of Shares | 201 | 130 |
Vested, Number of Shares | (117) | (118) |
Forfeited, Number of Shares | (6) | (12) |
Outstanding at end of period, Number of Shares | 345 | 267 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Outstanding at beginning of period, Weighted-Average Grant-Date Fair Value | $ 86.47 | $ 80.08 |
Granted, Weighted-Average Grant-Date Fair Value | 101.17 | 94.63 |
Vested, Weighted-Average Grant-Date Fair Value | 88.35 | 80.62 |
Forfeited, Weighted-Average Grant-Date Fair Value | 95.68 | 90.65 |
Outstanding at end of period, Weighted-Average Grant-Date Fair Value | $ 94.21 | $ 86.49 |
Stock-Based Compensation - Su51
Stock-Based Compensation - Summary of LTPP awards (Details) - Performance Shares - $ / shares shares in Thousands | 9 Months Ended | |
Aug. 31, 2018 | Aug. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding at beginning of period, Number of Shares | 220 | 201 |
Granted, Number of Shares | 86 | 78 |
Vested, Number of Shares | (59) | (43) |
Forfeited, Number of Shares | (2) | 0 |
Outstanding at end of period, Number of Shares | 245 | 236 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Outstanding at beginning of period, Weighted-Average Grant-Date Fair Value | $ 84.31 | $ 78.10 |
Granted, Weighted-Average Grant-Date Fair Value | 101.90 | 89.96 |
Vested, Weighted-Average Grant-Date Fair Value | 74.02 | 69.04 |
Forfeited, Weighted-Average Grant-Date Fair Value | 96.74 | 0 |
Outstanding at end of period, Weighted-Average Grant-Date Fair Value | $ 92.87 | $ 83.63 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | May 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Nov. 30, 2017 | |
Income Tax Examination [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | ||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ 381.4 | |||||
U.S. Tax Act, Incomplete Accounting, Transition Tax | 72.3 | |||||
U.S. Tax Act, Incomplete Accounting, Repatriation and Withholding Tax Impact | 73.2 | |||||
U.S. Tax Act, Non-cash Income Tax Expense (Benefit) | $ (10.3) | $ 297.9 | 308.2 | |||
U.S. Tax Act, Incomplete Accounting, Withholding Tax on Repatriation Earnings | 5.2 | |||||
U.S. Tax Act, Incomplete Accounting, Changes in Transition Tax | 4.3 | |||||
Effective income tax rate reconciliation, tax credit, amount | 20.6 | $ 6.6 | 326 | $ 17.3 | ||
Unrecognized tax benefits, reduction resulting from lapse of applicable statute of limitations | 2 | 5.5 | 6.8 | |||
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions | 1.4 | 1.2 | 1.4 | 1.2 | ||
Unrecognized Tax Benefits, Decrease Resulting from Current Period Tax Positions | 1 | 1.5 | ||||
Domestic Tax Authority | ||||||
Income Tax Examination [Line Items] | ||||||
Shares issued, tax benefit | $ 7.9 | 0.8 | 12.4 | 9.4 | ||
Foreign Tax Authority | ||||||
Income Tax Examination [Line Items] | ||||||
Unrecognized tax benefits, reduction resulting from lapse of applicable statute of limitations | $ 4.6 | |||||
Effective income tax rate reconciliation, change in deferred tax assets valuation allowance, amount | $ 0.5 | $ 0.1 |
Earnings Per Share and Stock 53
Earnings Per Share and Stock Issuances - Additional Information (Details) - USD ($) $ in Millions | Aug. 17, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 |
Class of Stock [Line Items] | |||||
Proceeds from Issuance of Common Stock | $ 0 | $ 554.9 | |||
Stock repurchase program, remaining authorized repurchase amount | $ 149.3 | 149.3 | |||
Stock repurchase program, authorized amount | $ 600 | $ 600 | |||
RB Foods | |||||
Class of Stock [Line Items] | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 6,353,591 | ||||
Proceeds from Issuance of Common Stock | $ 554 | ||||
Over-Allotment Option [Member] | RB Foods | |||||
Class of Stock [Line Items] | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 828,729 | ||||
Stock Options And Restricted Stock Units | |||||
Class of Stock [Line Items] | |||||
Stock Issued During Period, Shares, Acquisitions | 0 | 6,400,000 | 0 | 6,400,000 |
Earnings Per Share and Stock 54
Earnings Per Share and Stock Issuances - Reconciliation of Average Shares Outstanding (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Average shares outstanding - basic (shares) | 131.6 | 126.3 | 131.4 | 125.5 |
Effect of dilutive securities: [Abstract] | ||||
Stock options/Restricted Stock Units (RSUs)/MTIP | 1.6 | 1.5 | 1.6 | 1.7 |
Average shares outstanding-diluted | 133.2 | 127.8 | 133 | 127.2 |
Earnings Per Share and Stock 55
Earnings Per Share and Stock Issuances - Antidilutive Securities not Considered in Earnings Per Share Calculation (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Anti-dilutive securities | 0.3 | 1.3 | 0.4 | 1.1 |
Earnings Per Share and Stock 56
Earnings Per Share and Stock Issuances - Common Stock Activity (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Stock Options And Restricted Stock Units | ||||
Employee Stock Purchase Plan [Line Items] | ||||
Shares issued, net of shares withheld for taxes, under stock options, RSUs, LTPP and employee stock purchase plans | 0.5 | 0 | 1 | 0.6 |
Share Repurchase Program | ||||
Employee Stock Purchase Plan [Line Items] | ||||
Shares repurchased under the stock repurchase program | 0.1 | 0 | 0.4 | 1.4 |
Accumulated Other Comprehensi57
Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income, Net of Tax (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | Nov. 30, 2017 | ||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||
Foreign currency translation adjustment | $ (197.3) | $ (114.5) | $ (197.3) | $ (114.5) | $ (124.4) | |
Unrealized loss on foreign currency exchange contracts | (1.5) | (4.1) | (1.5) | (4.1) | (3.6) | |
Unamortized value of settled interest rate swaps | 0.8 | 1 | 0.8 | 1 | 0.8 | |
Pension and other postretirement costs | (156.1) | (148.3) | (156.1) | (148.3) | (152.3) | |
Accumulated other comprehensive loss | (354.1) | (265.9) | (354.1) | (265.9) | $ (279.5) | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 20.9 | |||||
Reclassification adjustment from AOCI on derivatives, before tax | 0.6 | (0.2) | 3.1 | (1.9) | ||
Reclassification adjustment from AOCI on derivatives, tax | (0.1) | 0.1 | (0.6) | 0.6 | ||
Reclassification adjustment from AOCI on derivatives, net of tax | 0.5 | (0.1) | 2.5 | (1.3) | ||
Amortization adjustment from AOCI, pension and other postretirement benefit plans, for net prior service cost (credit), before tax | [1] | (2.2) | (0.3) | (6) | 0.3 | |
Reclassification adjustment from AOCI, pension and other postretirement benefit plans, for net gain (loss), before tax | [1] | 3.1 | 2.3 | 9.5 | 7.4 | |
Reclassification adjustment from AOCI, pension and other postretirement benefit plans, before tax | 0.9 | 2 | 3.5 | 7.7 | ||
Reclassification adjustment from AOCI, pension and other postretirement benefit plans, for net (gain) loss, tax | (0.2) | (0.7) | (0.8) | (2.7) | ||
Reclassification adjustment from AOCI, pension and other postretirement benefit plans, for net (gain) loss, net of tax | 0.7 | 1.3 | 2.7 | 5 | ||
Interest rate contracts | Cash Flow Hedging | Interest Expense | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Reclassification adjustment from AOCI on derivatives, before tax | (0.2) | 0.1 | (0.4) | 0.2 | ||
Foreign exchange contracts | Cash Flow Hedging | Cost of Sales | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Reclassification adjustment from AOCI on derivatives, before tax | $ 0.8 | $ (0.3) | $ 3.5 | $ (2.1) | ||
[1] | This accumulated other comprehensive income (loss) component is included in the computation of total pension expense and other postretirement benefits expense (refer to note 7 for additional details). |
Business Segments - Additional
Business Segments - Additional Information (Detail) | 9 Months Ended |
Aug. 31, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Business Segments (Detail)
Business Segments (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Operating income | $ 233 | $ 168.7 | $ 608.4 | $ 435.5 |
Less: Special charges | 3.3 | 4.7 | 13.9 | 13 |
Business Combination, Acquisition Expenses Included in Cost of Good Sold | 5.9 | 5.9 | ||
Less: Transaction and integration expenses | 5.6 | 24.5 | 22.1 | 24.5 |
Net sales | 1,345.3 | 1,185.2 | 3,909.7 | 3,343.2 |
Operating income excluding special charges | 241.9 | 203.8 | 644.4 | 478.9 |
Income from unconsolidated operations | 8.4 | 8.2 | 23.9 | 23.6 |
Consumer | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 148.1 | 117.2 | 394 | 300.9 |
Less: Special charges | 2.2 | 3 | 8.6 | 8.5 |
Business Combination, Acquisition Expenses Included in Cost of Good Sold | 3.2 | 3.2 | ||
Less: Transaction and integration expenses | 3.8 | 16.3 | 14.8 | 16.3 |
Net sales | 790.8 | 696.8 | 2,333.6 | 1,991.8 |
Operating income excluding special charges | 154.1 | 139.7 | 417.4 | 328.9 |
Income from unconsolidated operations | 7.7 | 6.8 | 20.8 | 20 |
Flavor Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 84.9 | 51.5 | 214.4 | 134.6 |
Less: Special charges | 1.1 | 1.7 | 5.3 | 4.5 |
Business Combination, Acquisition Expenses Included in Cost of Good Sold | 2.7 | 2.7 | ||
Less: Transaction and integration expenses | 1.8 | 8.2 | 7.3 | 8.2 |
Net sales | 554.5 | 488.4 | 1,576.1 | 1,351.4 |
Operating income excluding special charges | 87.8 | 64.1 | 227 | 150 |
Income from unconsolidated operations | $ 0.7 | $ 1.4 | $ 3.1 | $ 3.6 |