Mccormick & Co Inc 10-Q for FY2020 Q3

Mccormick & Co Inc (MKC)

10-Q 2020-09-29 For: 2020-08-31

Added on April 10, 2026

About this 10-Q

Mccormick & Co Inc filed this 10-Q on September 29, 2020, covering the quarter ended August 31, 2020 (FY2020 Q3).

Headline figures

Quarter ended August 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.43B; up 7.6% from $1.33B a year earlier
Net income: $206.1M; up 7.4% from net income of $191.9M a year earlier
Diluted EPS: $1.53; up 7.0% from $1.43 a year earlier

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Maryland			52-0408290
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


24 Schilling Road, Suite 1,
Hunt Valley,	MD	21031
(Address of principal executive offices)			(Zip Code)


	Trading
Title of each class	Symbol(s)	Name of each exchange on which registered
Common Stock	MKC-V	New York Stock Exchange
Common Stock Non-Voting	MKC	New York Stock Exchange


						Shares Outstanding
						August 31, 2020
			Common Stock			9,063,590
			Common Stock Non-Voting			124,347,973


	Three months ended August 31,						Nine months ended August 31,
	2020		2019		2020		2019
Net sales	$	1,430.3	$	1,329.2	$	4,043.4	$	3,862.6
Cost of goods sold	840.0		789.3		2,403.7		2,347.3
Gross profit	590.3		539.9		1,639.7		1,515.3
Selling, general and administrative expense	317.2		278.7		911.1		839.9

Special charges	0.1		7.7		4.0		16.9
Operating income	273.0		253.5		724.6		658.5
Interest expense	33.5		41.3		103.2		126.7

Other income, net	3.9		6.9		12.5		19.3
Income from consolidated operations before income taxes	243.4		219.1		633.9		551.1
Income tax expense	46.9		36.8		117.4		91.0
Net income from consolidated operations	196.5		182.3		516.5		460.1
Income from unconsolidated operations	9.6		9.6		30.2		29.2
Net income	$	206.1	$	191.9	$	546.7	$	489.3
Earnings per share – basic	$	1.55	$	1.45	$	4.11	$	3.69
Average shares outstanding – basic	133.3		132.8		133.1		132.5
Earnings per share – diluted	$	1.53	$	1.43	$	4.06	$	3.65
Average shares outstanding – diluted	134.8		134.2		134.5		134.0
Cash dividends paid per share – voting and non-voting	$	0.62	$	0.57	$	1.86	$	1.71
Cash dividends declared per share – voting and non-voting	$	0.62	$	0.57	$	1.24	$	1.14


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	August 31, 2020		August 31, 2019		November 30, 2019
	(unaudited)		(unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	221.0	$	162.9	$	155.4
Trade accounts receivable, net	496.5		494.6		502.9
Inventories, net
Finished products	437.5		442.5		413.3
Raw materials and work-in-process	504.6		404.4		387.9
	942.1		846.9		801.2
Prepaid expenses and other current assets	100.0		85.0		90.7
Total current assets	1,759.6		1,589.4		1,550.2
Property, plant and equipment, net	960.9		910.0		952.6
Goodwill	4,574.4		4,496.5		4,505.2
Intangible assets, net	2,843.0		2,850.3		2,847.0
Other long-term assets	722.8		519.8		507.1
Total assets	$	10,860.7	$	10,366.0	$	10,362.1
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term borrowings	$	167.8	$	683.6	$	600.7
Current portion of long-term debt	263.7		119.3		97.7
Trade accounts payable	902.8		783.1		846.9
Other accrued liabilities	619.2		444.4		609.1
Total current liabilities	1,953.5		2,030.4		2,154.4
Long-term debt	3,737.5		3,843.1		3,625.8
Deferred taxes	704.4		701.2		697.6
Other long-term liabilities	519.3		310.7		427.6
Total liabilities	6,914.7		6,885.4		6,905.4
Shareholders’ Equity
Common stock	480.5		441.3		447.6
Common stock non-voting	1,491.1		1,435.9		1,441.0
Retained earnings	2,391.0		2,019.8		2,055.8
Accumulated other comprehensive loss	(429.9)		(428.3)		(500.2)
Total McCormick shareholders' equity	3,932.7		3,468.7		3,444.2
Non-controlling interests	13.3		11.9		12.5
Total shareholders’ equity	3,946.0		3,480.6		3,456.7
Total liabilities and shareholders’ equity	$	10,860.7	$	10,366.0	$	10,362.1



(millions)	Common Stock Shares	Common Stock Non-Voting Shares	Common Stock Amount		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Non-controlling Interests		Total Shareholders’ Equity
Three months ended August 31, 2020
Balance, May 31, 2020	9.3	123.9	$	1,938.9	$	2,288.7	$	(577.7)	$	12.4	$	3,662.3
Net income			—		206.1		—		—		206.1
Net income attributable to non-controlling interest			—		—		—		1.6		1.6
Other comprehensive loss, net of tax			—		—		147.8		(0.7)		147.1
Dividends			—		(82.6)		—		—		(82.6)
Stock-based compensation			10.7		—		—		—		10.7
Shares purchased and retired	(0.1)	—	(7.4)		(21.2)		—		—		(28.6)
Shares issued	0.3	—	29.4		—		—		—		29.4
Equal exchange	(0.4)	0.4	—		—		—		—		—
Balance, August 31, 2020	9.1	124.3	$	1,971.6	$	2,391.0	$	(429.9)	$	13.3	$	3,946.0

Nine months ended August 31, 2020
Balance, November 30, 2019	9.3	123.6	$	1,888.6	$	2,055.8	$	(500.2)	$	12.5	$	3,456.7
Net income			—		546.7		—		—		546.7
Net income attributable to non-controlling interest			—		—		—		3.1		3.1
Other comprehensive loss, net of tax			—		—		70.3		(2.3)		68.0
Dividends			—		(165.0)		—		—		(165.0)
Stock-based compensation			37.8		—		—		—		37.8
Shares purchased and retired	(0.2)	(0.1)	(12.6)		(46.5)		—		—		(59.1)
Shares issued	0.8	—	57.8		—		—		—		57.8
Equal exchange	(0.8)	0.8	—		—		—		—		—
Balance, August 31, 2020	9.1	124.3	$	1,971.6	$	2,391.0	$	(429.9)	$	13.3	$	3,946.0

Three months ended August 31, 2019
Balance, May 31, 2019	9.5	123.0	$	1,835.0	$	1,918.6	$	(382.7)	$	11.7	$	3,382.6
Net income			—		191.9		—		—		191.9
Net income attributable to non-controlling interest			—		—		—		0.3		0.3
Other comprehensive loss, net of tax			—		—		(45.6)		(0.1)		(45.7)
Dividends			—		(75.6)		—		—		(75.6)

Stock-based compensation			7.8		—		—		—		7.8
Shares purchased and retired	(0.1)	—	(3.2)		(15.1)		—		—		(18.3)
Shares issued	0.5	—	37.6		—		—		—		37.6
Equal exchange	(0.6)	0.6	—		—		—		—		—
Balance, August 31, 2019	9.3	123.6	$	1,877.2	$	2,019.8	$	(428.3)	$	11.9	$	3,480.6



Nine months ended August 31, 2019
Balance, November 30, 2018	9.6	122.5	$	1,770.6	$	1,760.2	$	(359.9)	$	11.3	$	3,182.2
Net income			—		489.3		—		—		489.3
Net income attributable to non-controlling interest			—		—		—		1.5		1.5
Other comprehensive loss, net of tax			—		—		(68.4)		(0.9)		(69.3)
Dividends			—		(151.1)		—		—		(151.1)
Stock-based compensation			30.6		—		—		—		30.6
Shares purchased and retired	(0.2)	(0.4)	(13.3)		(78.6)		—		—		(91.9)
Shares issued	1.4	—	89.3		—		—		—		89.3
Equal exchange	(1.5)	1.5	—		—		—		—		—
Balance, August 31, 2019	9.3	123.6	$	1,877.2	$	2,019.8	$	(428.3)	$	11.9	$	3,480.6



As of August 31, 2020	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 long-term assets	$	350.0	$	45.6	Other accrued liabilities	$	—	$	—
Foreign exchange contracts	Other current assets	156.5		18.1		Other accrued liabilities	206.9		21.3
Cross currency contracts	Other current assets / Other long-term assets	—		—		Other long-term liabilities	524.5		19.3
Total				$	63.7				$	40.6

As of August 31, 2019	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 long-term assets	$	350.0	$	28.2	Other accrued liabilities	$	—	$	—
Foreign exchange contracts	Other current assets	104.7		2.2		Other accrued liabilities	350.6		4.6
Cross currency contracts	Other current assets / Other long-term assets	236.4		14.0		Other long-term liabilities	243.9		13.4
Total				$	44.4				$	18.0

As of November 30, 2019	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 long-term assets	$	350.0	$	20.9	Other accrued liabilities	$	—	$	—
Foreign exchange contracts	Other current assets	293.1		3.3		Other accrued liabilities	196.1		3.6
Cross currency contracts	Other current assets / Other long-term assets	495.5		3.2		Other long-term liabilities	—		—
Total				$	27.4				$	3.6


Fair Value Hedges

Derivative	Income statement location	Income (expense)
		Three months ended August 31, 2020		Three months ended August 31, 2019		Nine months ended August 31, 2020		Nine months ended August 31, 2019

Interest rate contracts	Interest expense	$	1.8	$	—	$	3.2	$	(0.3)


Three months ended August 31,	Income statement location	Gain (loss) recognized in income						Income statement location		Gain (loss) recognized in income
Derivative		2020		2019		Hedged item		2020		2019
Foreign exchange contracts	Other income, net	$	(7.6)	$	(5.3)	Intercompany loans	Other income, net	$	7.3	$	5.2


Cash Flow Hedges
Three months ended August 31,
Derivative	Gain (loss) recognized in OCI					Income statement location		Gain (loss) reclassified from AOCI
	2020		2019			2020		2019
Interest rate contracts	$	—	$	—	Interest expense	$	0.2	$	0.2
Foreign exchange contracts	(0.6)		(0.3)		Cost of goods sold	1.1		0.5
Total	$	(0.6)	$	(0.3)		$	1.3	$	0.7

Nine months ended August 31,
Derivative	Gain (loss) recognized in OCI					Income statement location		Gain (loss) reclassified from AOCI
	2020		2019			2020		2019
Interest rate contracts	$	—	$	—	Interest expense	$	0.4	$	0.4
Foreign exchange contracts	2.3		0.3		Cost of goods sold	1.2		0.9
Total	$	2.3	$	0.3		$	1.6	$	1.3


Net Investment Hedges
Three months ended August 31,
Derivative	Gain (loss) recognized in OCI					Income statement location		Gain (loss) excluded from the assessment of hedge effectiveness
	2020		2019			2020		2019
Cross currency contracts	$	(17.4)	$	3.0	Interest expense	$	0.3	$	1.7

Nine months ended August 31,
Derivative	Gain (loss) recognized in OCI					Income statement location		Gain (loss) excluded from the assessment of hedge effectiveness
	2020		2019			2020		2019
Cross currency contracts	$	(20.7)	$	0.3	Interest expense	$	2.7	$	3.8


	Nine months ended August 31,
	2020		2019
Operating activities
Net income	$	546.7	$	489.3
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization	123.9		118.0
Stock-based compensation	37.8		30.6

Income from unconsolidated operations	(30.2)		(29.2)
Changes in operating assets and liabilities	(74.9)		(139.8)

Dividends from unconsolidated affiliates	23.4		25.7
Net cash flow provided by operating activities	626.7		494.6
Investing activities

Capital expenditures (including software)	(145.6)		(107.1)


Other investing activities	2.3		2.6

Net cash flow used in investing activities	(143.3)		(104.5)
Financing activities
Short-term borrowings, net	(432.0)		124.4
Long-term debt borrowings	506.4		—
Payment of debt issuance costs	(1.1)		—
Long-term debt repayments	(256.0)		(214.6)
Proceeds from exercised stock options	54.1		84.6
Taxes withheld and paid on employee stock awards	(10.7)		(10.3)




Common stock acquired by purchase	(46.0)		(76.9)
Dividends paid	(247.4)		(226.4)
Net cash flow used in financing activities	(432.7)		(319.2)
Effect of exchange rate changes on cash and cash equivalents	14.9		(4.6)
Increase in cash and cash equivalents	65.6		66.3
Cash and cash equivalents at beginning of period	155.4		96.6
Cash and cash equivalents at end of period	$	221.0	$	162.9


	Three months ended August 31, 2020		Nine months ended August 31, 2020
Operating lease cost	$	9.7	$	30.3
Finance lease cost:
Amortization of ROU assets	2.2		6.7
Interest on lease liabilities	1.1		3.4
Net lease cost ⁽¹⁾	$	13.0	$	40.4

(1) Net lease cost does not include short-term leases, variable lease costs or sublease income, all of which are immaterial.


	Weighted-average remaining lease term (years)	Weighted-average discount rate
Operating leases	5.7	2.1	%
Finance leases	14.3	3.3	%


	Operating leases		Finance leases		Total
2020 (remainder of year)	$	9.6	$	2.8	$	12.4
2021	33.9		11.4		45.3
2022	25.5		11.4		36.9
2023	18.1		11.4		29.5
2024	11.3		11.5		22.8
Thereafter	34.1		125.9		160.0
Total lease payments	132.5		174.4		306.9
Less: Imputed interest	7.5		39.8		47.3
Total lease liabilities	$	125.0	$	134.6	$	259.6



Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows used for operating leases	$	30.4
Operating cash flows used for finance leases	3.4
Financing cash flows used for finance leases	5.1

ROU assets obtained in exchange for lease liabilities
Operating leases	$	8.7


			August 31, 2020
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	221.0	$	221.0	$	—
Insurance contracts	120.8		—		120.8
Bonds and other long-term investments	5.6		5.6		—
Interest rate derivatives	45.6		—		45.6
Foreign currency derivatives	18.1		—		18.1

Total	$	411.1	$	226.6	$	184.5
Liabilities
Foreign currency derivatives	$	21.3	$	—	$	21.3

Cross currency contracts	19.3		—		19.3
Total	$	40.6	$	—	$	40.6


			August 31, 2019
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	162.9	$	162.9	$	—
Insurance contracts	117.2		—		117.2
Bonds and other long-term investments	4.3		4.3		—
Interest rate derivatives	28.2		—		28.2
Foreign currency derivatives	2.2		—		2.2
Cross currency contracts	14.0		—		14.0
Total	$	328.8	$	167.2	$	161.6
Liabilities
Foreign currency derivatives	$	4.6	$	—	$	4.6

Cross currency contracts	13.4		—		13.4
Total	$	18.0	$	—	$	18.0


			November 30, 2019
	Fair Value		Level 1		Level 2
Assets
Cash and cash equivalents	$	155.4	$	155.4	$	—
Insurance contracts	121.7		—		121.7
Bonds and other long-term investments	2.7		2.7		—
Interest rate derivatives	20.9		—		20.9
Foreign currency derivatives	3.3		—		3.3
Cross currency contracts	3.2		—		3.2
Total	$	307.2	$	158.1	$	149.1
Liabilities
Foreign currency derivatives	$	3.6	$	—	$	3.6


Total	$	3.6	$	—	$	3.6


	United States						International
	2020		2019		2020		2019
Defined benefit plans
Service cost	$	0.8	$	0.5	$	0.2	$	0.9
Interest costs	7.3		8.6		1.9		2.3
Expected return on plan assets	(10.2)		(10.6)		(3.7)		(4.0)
Amortization of prior service costs	0.2		0.1		0.1		—
Amortization of net actuarial losses	2.0		0.6		0.5		0.3
Settlement loss	—		—		0.7		—
Total pension expense (income)	$	0.1	$	(0.8)	$	(0.3)	$	(0.5)


	2020	2019
Risk-free interest rates	0.0 - 0.6%	2.2 - 2.5%
Dividend yield	1.8%	1.5%
Expected volatility	22.8%	17.4%
Expected lives (in years)	7.9	7.5


	2020				2019
(shares in millions)	Number of Shares	Weighted- Average Exercise Price		Number of Shares	Weighted- Average Exercise Price
Outstanding at beginning of period	2.6	$	96.18	3.6	$	82.60
Granted	0.4	138.62		0.3	147.39
Exercised	(0.7)	81.88		(1.2)	70.78
Outstanding at end of the period	2.3	$	106.88	2.7	$	95.50
Exercisable at end of the period	1.6	$	95.33	2.0	$	86.08


	2020				2019
(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	381	$	115.89	423	$	103.05
Granted	148	134.06		129	143.15
Vested	(137)	109.97		(134)	96.74
Forfeited	(7)	124.30		(9)	112.10
Outstanding at end of period	385	$	124.82	409	$	117.51


	Three months ended			Nine months ended
	August 31, 2020	August 31, 2019	August 31, 2020	August 31, 2019
Average shares outstanding – basic	133.3	132.8	133.1	132.5
Effect of dilutive securities:
Stock options/RSUs/LTPP	1.5	1.4	1.4	1.5
Average shares outstanding – diluted	134.8	134.2	134.5	134.0


	Three months ended						Nine months ended			Affected Line Items in the Condensed Consolidated Income Statement
Accumulated Other Comprehensive Income (Loss) Components	August 31, 2020		August 31, 2019		August 31, 2020		August 31, 2019
(Gains)/losses on cash flow hedges:
Interest rate derivatives	$	(0.2)	$	(0.2)	$	(0.4)	$	(0.4)	Interest expense
Foreign exchange contracts	(1.1)		(0.5)		(1.2)		(0.9)		Cost of goods sold
Total before tax	(1.3)		(0.7)		(1.6)		(1.3)
Tax effect	0.3		0.1		0.4		0.3		Income taxes
Net, after tax	$	(1.0)	$	(0.6)	$	(1.2)	$	(1.0)

Amortization of pension and postretirement benefit adjustments:
Amortization of prior service costs (credit) ⁽¹⁾	$	(0.9)	$	(2.1)	$	(3.0)	$	(6.1)	Other income, net
Amortization of net actuarial losses ⁽¹⁾	3.2		0.8		8.5		2.2		Other income, net
Total before tax	2.3		(1.3)		5.5		(3.9)
Tax effect	(0.6)		0.3		(1.3)		0.9		Income taxes
Net, after tax	$	1.7	$	(1.0)	$	4.2	$	(3.0)


	Consumer		Flavor Solutions		Total
			(in millions)
Three months ended August 31, 2020
Net sales	$	910.9	$	519.4	$	1,430.3
Operating income excluding special charges	209.0		64.1		273.1
Income from unconsolidated operations	8.5		1.1		9.6

Three months ended August 31, 2019
Net sales	$	794.2	$	535.0	$	1,329.2
Operating income excluding special charges	176.5		84.7		261.2
Income from unconsolidated operations	7.3		2.3		9.6

Nine months ended August 31, 2020
Net sales	$	2,573.0	$	1,470.4	$	4,043.4
Operating income excluding special charges	560.2		168.4		728.6
Income from unconsolidated operations	24.7		5.5		30.2

Nine months ended August 31, 2019
Net sales	$	2,303.2	$	1,559.4	$	3,862.6
Operating income excluding special charges	449.6		225.8		675.4
Income from unconsolidated operations	22.7		6.5		29.2


	Americas		EMEA		Asia/Pacific		Total

Three months ended August 31, 2020	$	1,010.5	$	262.7	$	157.1	$	1,430.3
Three months ended August 31, 2019	931.3		234.5		163.4		1,329.2

Nine months ended August 31, 2020	2,855.5		756.7		431.2		4,043.4
Nine months ended August 31, 2019	2,634.4		726.7		501.5		3,862.6


	Three months ended August 31,		Nine months ended August 31,
2019 Earnings per share – diluted	$	1.43	$	3.65
Increase in operating income	0.07		0.33
Impact of net discrete tax benefit recognized as a result of the U.S. Tax Act	(0.01)		(0.01)
Decrease in special charges, net of taxes	0.04		0.08

Decrease in interest expense	0.05		0.14
Decrease in other income	(0.01)		(0.04)
Increase in unconsolidated income	—		0.01
Impact of change in effective income tax rate, excluding taxes on special charges	(0.03)		(0.08)
Impact of higher shares outstanding	(0.01)		(0.02)
2020 Earnings per share – diluted	$	1.53	$	4.06


	For the year ended November 30, 2019			For the three months ended												For the nine months ended					Estimated for the year ending November 30, 2020
							August 31, 2020				August 31, 2019				August 31, 2020				August 31, 2019




Operating income	$	957.7		$	273.0			$	253.5			$	724.6			$	658.5

Impact of special charges	20.8			0.1				7.7				4.0				16.9
Adjusted operating income	$	978.5		$	273.1			$	261.2			$	728.6			$	675.4
Adjusted operating income margin ⁽¹⁾	18.3		%	19.1		%		19.7		%		18.0		%		17.5		%





Income tax expense	$	157.4		$	46.9			$	36.8			$	117.4			$	91.0
Impact of special charges	4.7			—				1.6				1.2				3.8

Non-recurring benefit of the U.S. Tax Act	1.5			—				1.5				—				1.5
Adjusted income tax expense	$	163.6		$	46.9			$	39.9			$	118.6			$	96.3
Adjusted income tax rate ⁽²⁾	19.5		%	19.3		%		17.6		%		18.6		%		17.0		%

Net income	$	702.7		$	206.1			$	191.9			$	546.7			$	489.3

Impact of special charges	16.1			0.1				6.1				2.8				13.1
Non-recurring benefit of the U.S. Tax Act	(1.5)			—				(1.5)				—				(1.5)

Adjusted net income	$	717.3		$	206.2			$	196.5			$	549.5			$	500.9

Earnings per share – diluted	$	5.24		$	1.53			$	1.43			$	4.06			$	3.65			$5.60 to $5.68

Impact of special charges	0.12			—				0.04				0.02				0.10				0.04
Non-recurring benefit of the U.S. Tax Act	(0.01)			—				(0.01)				—				(0.01)				—

Adjusted earnings per share – diluted	$	5.35		$	1.53			$	1.46			$	4.08			$	3.74			$5.64 to $5.72




(1)			Adjusted operating income margin is calculated as adjusted operating income as a percentage of net sales for each period presented.



(2)			Adjusted income tax rate is calculated as adjusted income tax expense as a percentage of income from consolidated operations before income taxes excluding special charges or $243.5 million and $637.9 million for the three and nine months ended August 31, 2020, respectively; $226.8 million and $568.0 million for the three and nine months ended August 31, 2019, respectively; and $840.0 million for the year ended November 30, 2019.


	Three Months Ended August 31, 2020
	Percentage Change as Reported		Impact of Foreign Currency Exchange		Percentage Change on Constant Currency Basis
Net sales:
Consumer segment:
Americas	17.2	%	(0.3)	%	17.5	%
EMEA	23.0	%	0.4	%	22.6	%
Asia/Pacific	(8.7)	%	(2.5)	%	(6.2)	%
Total Consumer	14.7	%	(0.4)	%	15.1	%
Flavor Solutions segment:
Americas	(4.7)	%	(1.6)	%	(3.1)	%
EMEA	(1.0)	%	(2.2)	%	1.2	%
Asia/Pacific	4.9	%	(2.1)	%	7.0	%
Total Flavor Solutions	(2.9)	%	(1.8)	%	(1.1)	%
Total net sales	7.6	%	(1.0)	%	8.6	%

Adjusted operating income:
Consumer segment	18.4	%	(0.3)	%	18.7	%
Flavor Solutions segment	(24.3)	%	(2.7)	%	(21.6)	%
Total adjusted operating income	4.6	%	(1.1)	%	5.7	%


	Projections for the Year Ending November 30, 2020
Percentage change in net sales	4% to 5%
Impact of unfavorable foreign currency exchange rates	1	%
Percentage change in net sales in constant currency	5% to 6%


Percentage change in adjusted operating income	4% to 5%
Impact of unfavorable foreign currency exchange rates	1	%
Percentage change in adjusted operating income in constant currency	5% to 6%


Percentage change in adjusted earnings per share	5% to 7%
Impact of unfavorable foreign currency exchange rates	1	%
Percentage change in adjusted earnings per share in constant currency	6% to 8%


(1)			Adjustments to EBITDA are determined under the leverage ratio covenant in our $1.0 billion revolving credit facility and includes special charges, share-based compensation expense, and interest income.