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Special Charges And Transaction And Integration Expenses | 9 Months Ended
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Aug. 31, 2024
Special Charges [Abstract] |
Special Charges And Transaction And Integration Expenses | 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, including related impairment charges, associated with certain actions undertaken 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 President and Chief Executive Officer. Expenses associated with any approved action are classified as special charges upon recognition and monitored on an on-going basis through completion. Certain ancillary expenses related to these actions approved by our Management Committee do not qualify for accrual upon approval but are included as special charges as incurred during the course of the actions. We continue to evaluate changes to our organizational structure to reduce fixed costs, simplify or improve processes, and improve our competitiveness. The following is a summary of special charges recognized in the three and nine months ended August 31, 2024 and 2023 (in millions):
| Three months ended August 31, |  | Nine months ended August 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Employee severance and related benefits | $ | — |  |  | $ | 1.1 |  |  | $ | 3.1 |  |  | $ | 32.9 |
Other costs |  |  |  |  |  |  |
Cash | 1.9 |  |  | 4.4 |  |  | 4.8 |  |  | 12.4 |
Non-Cash | — |  |  | 0.6 |  |  | — |  |  | 1.8 |
Total special charges | $ | 1.9 |  |  | $ | 6.1 |  |  | 7.9 |  | 47.1
During the three months ended August 31, 2024, we recorded $1.9 million of special charges, consisting principally of $0.7 million associated with our Global Operating Effectiveness (GOE) program, as more fully described below, and $1.2 million associated with the transition of a manufacturing facility in Europe, Middle East, and Africa (EMEA), as more fully described below. During the nine months ended August 31, 2024, we recorded $7.9 million of special charges, consisting principally of $5.3 million associated with our GOE program, as more fully described below, and $2.6 million associated with the transition of a manufacturing facility in EMEA, as more fully described below. During the three months ended August 31, 2023, we recorded $6.1 million of special charges, consisting principally of $3.6 million associated with our GOE program, as more fully described below, $1.7 million associated with the transition of a manufacturing facility in EMEA, as more fully described below, and streamlining actions of $0.8 million in the Americas region. During the nine months ended August 31, 2023, we recorded $47.1 million of special charges, consisting principally of $37.0 million associated with our GOE program, as more fully described below, $3.9 million associated with the transition of a manufacturing facility in EMEA, as more fully described below, and streamlining actions of $5.3 million in the Americas region and $0.9 million in the EMEA region. In 2022, our Management Committee approved the GOE program, which is expected to eliminate costs associated with our supply chain operations, as well as across the remainder of the organization. The GOE program included a voluntary retirement plan, which included enhanced separation benefits to certain U.S. employees aged 55 years or older with at least ten years of service to the company. This voluntary retirement plan commenced in November 2022, and participants were required to submit their notifications by December 30, 2022. The GOE program also includes other employee separation actions as other related costs within the program. The total costs incurred under the GOE program were approximately $48 million as of November 30, 2023. Special charges recognized during the three months ended August 31, 2024, under our GOE program included $0.7 million in severance and related benefits costs. Special charges recognized during the nine months ended August 31, 2024, under our GOE program included $4.6 million in severance and related benefits costs and $0.7 million of third-party expenses and other costs. Special charges recognized during the three months ended August 31, 2023, under our GOE program included $0.9 million in severance and related benefits costs and $2.7 million of third-party expenses and other costs. Special charges recognized during the nine months ended August 31, 2023, under our GOE program included $12.4 million in severance and related benefits costs and $4.9 million of third-party expenses and other costs. In 2022, our Management Committee approved an initiative to consolidate our manufacturing operations in the United Kingdom into a net-zero carbon condiments manufacturing and distribution center facility with state-of-the-art technology. We expect to execute these changes to our supply chain operations and improve profitability, from a combination of lower headcount and non-headcount costs, by consolidating our operations into a scalable platform while expanding our capacity. We expect the cost of the initiative to approximate $40 million—to be recognized as special charges in our consolidated income statement through 2024. Of that $40 million, we expect the costs to include employee severance and related benefits, non-cash accelerated depreciation, equipment relocation costs, decommissioning and other property related lease exit costs, all directly related to the initiative. The total costs incurred under this program were approximately $36 million as of November 30, 2023. During the three months ended August 31, 2024, we recognized a reversal of $0.7 million associated with severance and related benefits costs and $1.9 million in third-party expenses and other costs. During the nine months ended August 31, 2024, we recognized a reversal of $1.5 million associated with severance and related benefits costs and $4.1 million in third-party expenses and other costs. During the three months ended August 31, 2023, we recognized $0.4 million in accelerated depreciation and $1.3 million in third-party expenses and other costs. During the nine months ended August 31, 2023, we recognized $1.2 million in accelerated depreciation and $2.7 million in third-party expenses and other costs. As of August 31, 2024, accruals associated with special charges of $4.2 million are included in other accrued liabilities in our consolidated balance sheet. The following is a breakdown by business segment of special charges for the three and nine months ended August 31, 2024 and 2023 (in millions):
| Three months ended August 31, |  | Nine months ended August 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Consumer segment | $ | 0.5 |  |  | $ | 2.2 |  |  | $ | 3.8 |  |  | $ | 29.6 |
Flavor solutions segment | 1.4 |  |  | 3.9 |  |  | 4.1 |  |  | 17.5 |
Total special charges | $ | 1.9 |  |  | $ | 6.1 |  |  | $ | 7.9 |  |  | $ | 47.1 |

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