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Business Segments | 9 Months Ended
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Aug. 31, 2019
Segment Reporting [Abstract] |
BUSINESS SEGMENTS | BUSINESS SEGMENTS We operate in two business segments: consumer and flavor solutions. 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, 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 |
Three months ended August 31, 2018 |  |  |  |  |
Net sales | $ | 772.4 |  |  | $ | 545.8 |  |  | $ | 1,318.2 |
Operating income excluding special charges and transaction and integration expenses | 152.0 |  |  | 86.8 |  |  | 238.8 |
Income from unconsolidated operations | 7.7 |  |  | 0.7 |  |  | 8.4 |
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 |
Nine months ended August 31, 2018 |  |  |  |  |
Net sales | $ | 2,285.8 |  |  | $ | 1,549.1 |  |  | $ | 3,834.9 |
Operating income excluding special charges and transaction and integration expenses | 411.6 |  |  | 224.0 |  |  | 635.6 |
Income from unconsolidated operations | 20.8 |  |  | 3.1 |  |  | 23.9 |
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, 2019 |  |  |  |  |
Operating income excluding special charges | $ | 176.5 |  |  | $ | 84.7 |  |  | $ | 261.2 |
Less: Special charges | 4.6 |  |  | 3.1 |  |  | 7.7 |
Operating income | $ | 171.9 |  |  | $ | 81.6 |  |  | $ | 253.5 |
Three months ended August 31, 2018 |  |  |  |  |
Operating income excluding special charges and transaction and integration expenses | $ | 152.0 |  |  | $ | 86.8 |  |  | $ | 238.8 |
Less: Special charges | 2.2 |  |  | 1.1 |  |  | 3.3 |
Less: Transaction and integration expenses | 3.8 |  |  | 1.8 |  |  | 5.6 |
Operating income | $ | 146.0 |  |  | $ | 83.9 |  |  | $ | 229.9 |
Nine months ended August 31, 2019 |  |  |  |  |
Operating income excluding special charges | $ | 449.6 |  |  | $ | 225.8 |  |  | $ | 675.4 |
Less: Special charges | 11.0 |  |  | 5.9 |  |  | 16.9 |
Operating income | $ | 438.6 |  |  | $ | 219.9 |  |  | $ | 658.5 |
Nine months ended August 31, 2018
Operating income excluding special charges and transaction and integration expenses | $ | 411.6 |  |  | $ | 224.0 |  |  | $ | 635.6 |
Less: Special charges | 8.6 |  |  | 5.3 |  |  | 13.9 |
Less: Transaction and integration expenses | 14.8 |  |  | 7.3 |  |  | 22.1 |
Operating income | $ | 388.2 |  |  | $ | 211.4 |  |  | $ | 599.6 |
The following table sets forth our net sales, by geographic area, for the three and nine months ended August 31, 2019 and 2018 (in millions):
| Americas | EMEA | Asia/Pacific |  | Total
Three months ended August 31, 2019 | $ | 931.3 |  | $ | 234.5 |  | $ | 163.4 |  |  | $ | 1,329.2 |
Three months ended August 31, 2018 | 918.5 |  | 244.2 |  | 155.5 |  |  | 1,318.2 |
Nine months ended August 31, 2019 | 2,634.4 |  | 726.7 |  | 501.5 |  |  | 3,862.6 |
Nine months ended August 31, 2018 | 2,573.4 |  | 755.8 |  | 505.7 |  |  | 3,834.9 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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