McCormick & Co. (MKC) 10-K risk factor changes: FY2021 vs FY2020

[removed: The COVID-19] [added: An epidemic or] pandemic [removed: has affected, and continues to affect,] [added: could affect] our operations, major [removed: facilities, and the health of our employees] [added: facilities or employees’] and [removed: consumers.][added: consumers’ health.]

From time to time, our customers [removed: evaluate] [added: reevaluate] their mix of product offerings, and consumers have the option to purchase private label or other competitive products instead of our branded products.

[added: In order to safeguard that reputation,] we have adopted rigorous quality assurance and quality control procedures which are designed to ensure the safety of our products.

[removed: For instance, we may be required to recall certain of our products should they be mislabeled, contaminated or damaged, and] [added: Additionally,] certain of our raw materials could be blocked from entering the country if they were subject to government-imposed actions.

We [removed: also] [added: have and] may [added: continue to] become involved in lawsuits and legal proceedings if it is alleged that the consumption of any of our products could cause injury or illness, or that any of our products are mislabeled or fail to meet applicable legal requirements (even if the allegation is untrue).

Customer consolidation, [added: consumer behaviors,] and competitive, economic and other pressures facing our customers, may [removed: put pressure on] [added: impact] our [removed: operating margins and profitability.][added: financial condition or results of operations.]

[removed: Our] [added: In addition, our] flavor solutions segment may be impacted if the reputation or perception of the customers of our flavor solutions segment declines.

These factors [removed: and others] could have an adverse impact on our business, financial condition or results of operations.

The inability to maintain mutually beneficial relationships with large customers could adversely affect our [removed: business.][added: business, financial condition and results of operations.]

We have a number of major customers, including two large customers that, in the aggregate, constituted approximately [removed: 23%] [added: 22%] of our consolidated sales in [removed: 2020.][added: 2021.]

The loss of either of these large customers [added: due to events beyond our control,] or a material negative change in our relationship with these large customers or other major customers could have an adverse effect on our [removed: business.][added: business, financial condition and results of operations.]

[removed: Disruption of our supply chain and issues] [added: Issues] regarding procurement of raw materials may negatively impact us.

Our purchases of raw materials are subject to fluctuations in market price and availability caused by weather, growing and harvesting conditions, [added: climate change,] market conditions, governmental actions and other factors beyond our [removed: control.][added: control, including the COVID-19 pandemic.]

The most significant raw materials used by us in our business are dairy products, pepper, [removed: vanilla,] capsicums (red peppers and paprika), [removed: garlic,] onion, [removed: rice] [added: vanilla, garlic,] and [removed: wheat flour.][added: salt.]

[added: Therefore, we] cannot provide assurance that future raw material price fluctuations will not have a negative impact on our business, financial condition or operating results.

[removed: In addition, we] may be required to incur asset impairment charges (including charges related to goodwill and other intangible assets) in connection with acquired businesses, which may reduce our profitability.

As of November 30, [removed: 2020,] [added: 2021,] we had approximately [removed: $5.0] [added: $5.3] billion of goodwill and approximately [removed: $3.0] [added: $3.5] billion of other indefinite-lived intangible assets.

Similarly, we test indefinite-lived intangible assets by comparing the fair [added: value of those assets to their carrying values.]

Factors that could result in an impairment include a change in revenue growth rates, operating margins, weighted average cost of capital, future economic and market [removed: conditions] [added: conditions, higher income tax rates,] or assumed royalty rates.

Primary exposures include the U.S. dollar versus the Euro, British pound sterling, [added: Chinese renminbi,] Canadian dollar, [removed: Polish zloty,] Australian dollar, [added: Polish zloty, and] Mexican peso, [removed: Swiss franc, Chinese renminbi, Indian rupee and Thai baht,] as well as the Euro versus the British pound sterling and Australian dollar, and finally the Canadian dollar versus British pound sterling.

On November 30, [removed: 2020,] [added: 2021,] we had total outstanding variable rate debt of approximately [removed: $950] [added: $613] million, including [removed: $887] [added: $539] million of short-term borrowings, at a weighted-average interest rate of approximately [removed: 0.3%.][added: 0.2%.]

The interest rates under our [removed: term loans and] revolving credit [removed: facilities] [added: facility] can vary based on our credit ratings.

We [removed: have incurred] [added: may incur] additional indebtedness to finance [removed: the acquisition of Cholula and FONA] [added: our acquisitions] that may limit our ability to, among other matters, issue additional indebtedness, meet our debt service requirements, react to rising interest rates, comply with certain covenants and compete with less highly leveraged competitors.

[removed: After financing our acquisition of Cholula on November 30, 2020, we] [added: We] have a significant amount of indebtedness outstanding.

As of November 30, [removed: 2020,] [added: 2021,] the indebtedness of McCormick and its subsidiaries is approximately [removed: $4.9] [added: $5.3] billion.

We rely on our revolving credit [removed: facilities,] [added: facility,] or borrowings backed by [removed: these facilities,] [added: this facility,] to fund a portion of our seasonal working capital needs and other general corporate purposes, including funding of acquisitions.

We engage in regular communication with all of the banks participating in our revolving credit [removed: facilities.][added: facility.]

The uncertainty regarding the [removed: potential] [added: planned] phase-out of LIBOR may negatively impact our operating results.

LIBOR, the interest rate benchmark used as a reference rate on our variable rate debt, including our revolving credit facility, [added: synthetic lease,] interest rate swaps, and cross currency interest rate swaps is expected to be phased out [added: beginning] after [removed: calendar year 2021,] [added: December 31, 2021] when private-sector banks are no longer required to report the information used to set the rate.

[removed: Given the inherent differences between LIBOR and SOFR or any other alternative benchmark rate that may] [added: There continue to] be [removed: established, there are] many uncertainties regarding a transition from LIBOR, including but not limited to the need to amend all contracts with LIBOR as the referenced rate and how this will impact the Company’s cost of variable rate debt and certain derivative financial instruments.

The Company will also need to consider new contracts and if they should reference an alternative benchmark rate or include suggested fallback language, as published by the [removed: Alternative Reference Rates Committee.][added: ARRC.]

These intellectual property rights include ingredient formulas, trademarks, copyrights, patents, business processes and other trade secrets which are important to our business and relate to some of our products, our packaging, the processes for their production, and [removed: the design and operation of equipment used in our businesses.]

Furthermore, our information technology [added: systems, and the] systems [added: of our customers, vendors, suppliers, and other third-party service providers,] are subject to cyber-attacks or other security [removed: incidents,] [added: incidents including computer viruses or other malicious codes, phishing attacks, ransomware, or other] service disruptions, or other system or process failures.

[removed: We] [added: We, and the third-parties we do business with,] have experienced in the past, and expect to continue to experience, cybersecurity threats and [removed: incidents,] [added: attacks,] although to date none has been material.

To address the risks to our information technology systems and data, we maintain an information security program that includes updating technology, developing security policies and procedures, implementing and assessing the effectiveness of controls, [added: monitoring and routine testing of our information systems,] conducting risk assessments of third party service providers and designing business processes to mitigate the risk of such breaches.

[removed: In] addition, failure to either deliver the applications on [removed: time,] [added: time (due to operational limitations caused by COVID-19] or [added: otherwise), or] anticipate the necessary readiness and training needs, could lead to business disruption and loss of customers and revenue.

In addition, there are various compliance obligations for companies that process personal data of certain individuals, including such obligations required by the European Union’s General Data Protection Regulation (GDPR), which came into effect in May 2018, and the California Consumer Privacy Act (CCPA), which came into effect in January [added: 2020.]

These types of data privacy laws create a range of [removed: new] compliance obligations for companies that process personal data of certain individuals and increases financial penalties for non-compliance.

As a company that is subject to data privacy laws, we bear the costs of compliance with them, including the GDPR and [removed: CCPA,] [added: U.S. state laws,] and are subject to the potential for fines and penalties in the event of a breach of these laws, which continue to evolve.

In fiscal year [removed: 2020,] [added: 2021,] approximately [removed: 38%] [added: 40%] of our sales were generated in countries other than the U.S. Our international operations are subject to additional risks, including fluctuations in currency values, foreign currency exchange controls, discriminatory fiscal policies, compliance with U.S. and foreign laws, enforcement of remedies in foreign jurisdictions and other economic or political uncertainties.

A pandemic, including COVID-19, could have an adverse impact on our business, financial condition, and results of operations.

The COVID-19 pandemic has had, and could continue to have, a negative impact on financial markets, economic conditions, and portions of our industry as a result of changes in consumer behavior, retailer inventory levels, cost inflation, manufacturing and supply chain disruption, and overall macroeconomic conditions.

The extent and nature of government actions, including limitations on crowd size, closures of dine-in restaurants and bars, and significant restrictions on travel, as well as work restrictions that prohibited many employees from going to work, varied during fiscal 2020 and 2021 based upon the then-current extent and severity of the COVID-19 pandemic within the respective countries and localities.

Although our consumer business has benefited from increased at-home consumption due to restrictions related to COVID-19, our ability to sustain heightened sales is dependent on consumer purchasing behavior.

The COVID-19 mitigation measures impacting certain of our flavor solutions customers have included the following: (i) with respect to dine-in restaurants, closures, limitations on dine-in capacity, or restrictions on the operations of those restaurants to carry-out or delivery only; and (ii) with respect to quick service restaurants, limitations on operations to drive-through pick-up or delivery.

The continued availability and effectiveness of vaccines and treatments may partially mitigate the risks around the continued spread of COVID-19, however, with the spread of the COVID-19 variants, the ongoing implications of the COVID-19 pandemic could adversely impact our business and results of operations in a number of ways, including but not limited to:

- Significant reductions in demand or significant volatility in demand for one or more of our products, which may be caused by, among other things: the temporary inability of consumers to purchase our products due to illness, quarantine or other travel restrictions, or financial hardship, shifts in demand away from one or more of our more discretionary or higher priced products to lower priced products, or stockpiling or similar activity.

If prolonged, such impacts can further increase the difficulty of business or operations planning and may adversely impact our results of operations and cash flows;

- Inability to meet our customers’ needs and achieve cost targets due to disruptions in our manufacturing and supply arrangements caused by constrained workforce capacity or the loss or disruption of other essential manufacturing and supply elements such as raw materials or other finished product components, transportation, enhanced cleaning and sanitation protocols, or other manufacturing and distribution capability;

- Failure of third parties on which we rely, including our suppliers, contract manufacturers, distributors, contractors, commercial banks, joint venture partners and external business partners, to meet their obligations to the Company, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties and may adversely impact our operations; or

- Significant changes in the political conditions in markets in which we manufacture, sell or distribute our products, including quarantines, import/export restrictions, price controls, or governmental or regulatory actions, closures or other restrictions that limit or close our operating and manufacturing facilities, restrict our employees’ ability to travel or perform necessary business functions, or otherwise prevent our third-party partners, suppliers, or customers from sufficiently staffing operations, including operations necessary for the production, distribution, sale, and support of our products, which could adversely impact our results of operations and cash flows.

The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the emergence and spread of variants, infection rates in areas where we operate, the extent and effectiveness of containment actions, including the continued availability and effectiveness of vaccines in the markets where we operate, the impact of actions taken by governmental authorities and other third parties in response to the pandemic, each of which is uncertain, rapidly changing and difficult to predict, and the impact of these and other factors on our employees, customers, and suppliers.

Should these conditions persist for a prolonged period, including any of the above factors and others that are currently unknown, the COVID-19 pandemic could have a material adverse effect on our business, financial condition, and results of operations.

The impact of the COVID-19 pandemic may also exacerbate other risks discussed in this Item 1A, *Risk Factors*, any of which could have a material effect on us.

For instance, we may be required to recall certain of our products should they be mislabeled, contaminated or damaged.

The trend towards e-commerce and its impact of consumer habits and preferences has accelerated since the onset of the COVID-19 pandemic in many of the markets we serve and our financial results may be impacted if we are unable to adapt to changing consumer preferences and market dynamics.

Disruption of our supply chain could adversely affect our business.

Our ability to make, move, and sell products is critical to our success.

Damage or disruption to raw material supplies or our manufacturing or distribution capabilities due to weather, climate change, natural disaster, fire, terrorism, cyber-attack, pandemics (such as the COVID-19 pandemic), governmental restrictions or mandates, strikes, import/export restrictions, or other factors could impair our ability to manufacture or sell our products.

Many of our product lines are manufactured at a single location.

The failure of third parties on which we rely, including those third parties who supply our ingredients, packaging, capital equipment and other necessary operating materials, contract manufacturers, commercial transport, distributors, contractors, and external business partners, to meet their obligations to us, or significant disruptions in their ability to do so, may negatively impact our operations.

Our suppliers’ policies and practices can damage our reputation and the quality and safety of our products.

Disputes with significant suppliers, including disputes regarding pricing or performance, could adversely affect our ability to supply products to our customers and could materially and adversely affect our sales, financial condition, and results of operations.

Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, particularly when a product is manufactured from a single location, could adversely affect our business and results of operations, as well as require additional resources to restore our supply chain.

Moreover, short term or sustained increases in consumer demand at our customers may exceed our production capacity or otherwise strain our supply chain.

Our failure to meet the demand for our products could adversely affect our business and results of operations.

Our results of operations can be adversely affected by labor shortages, turnover and labor cost increases.

Labor is a primary component of operating our business.

A number of factors may adversely affect the labor force available to us or increase labor costs, including high unemployment levels, federal unemployment subsidies, including unemployment benefits offered in response to the COVID-19 pandemic, and other government regulations.

We are also experiencing and may continue to experience additional pressure in our supply chain due to labor shortages and absenteeism associated with COVID-19, together with the impact of the continued elevated demand.

A sustained labor shortage or increased turnover rates within our employee base, caused by COVID-19 or as a result of general macroeconomic factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our manufacturing and distribution facilities and overall business.

If we are unable to hire and retain employees capable of performing at a high-level, or if mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third-party outsourcing, have negative effects, our business could be adversely affected.

In addition, we distribute our products and receive raw materials primarily by truck.

Reduced availability of trucking capacity due to shortages of drivers, primarily as a result of the COVID-19 pandemic, has caused an increase in the cost of transportation for us and our suppliers.

An overall labor shortage,

lack of skilled labor, increased turnover or labor inflation, caused by COVID-19 or as a result of general macroeconomic factors, could have a material adverse impact on our business, financial condition or operating results.

We may not be able to increase prices to fully offset inflationary pressures on costs, such as raw and packaging materials, labor and distribution costs, which may impact our financial condition or results of operations.

As a manufacturer and distributor of flavor products, we rely on raw materials, packaging materials, plant labor, distribution resources, and transportation providers.

In 2021 and the early part of 2022, the costs of raw materials, packaging materials, labor, energy, fuel, transportation and other inputs necessary for the production and distribution of our products have rapidly increased.

In addition, many of these materials are subject to price fluctuations from a number of factors, including, but not limited to, market conditions, demand for raw materials, weather, growing and harvesting conditions, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, import and export requirements (including tariffs), and other factors beyond our control.

Our operations may be adversely impacted as a result of pandemic outbreaks, including COVID-19.

In December 2019, COVID-19, a strain of novel coronavirus, was first reported in Wuhan, China, resulting in thousands of confirmed cases of the disease in China.

By January 2020, the Chinese government implemented a quarantine protocol for Wuhan and implemented other restrictions for other major Chinese cities, including

mandatory business closures, social distancing measures, and various travel restrictions.

In March 2020, as COVID-19 spread outside of China, significantly impacting the rest of the world, the World Health Organization designated the outbreak as a global pandemic.

The effects of COVID-19 and related actions to attempt to control its spread significantly impacted not only our operating results but also the global economy.

COVID-19 has impacted and continues to impact our customers, our operations, consumers and the global economy as discussed below.

However, given the evolving health, economic, social, and governmental environments, the breadth and duration of such impact remains uncertain.

The production of certain of our products in our Americas, EMEA, and Asia/Pacific geographic regions are concentrated in a single manufacturing site within each region.

To mitigate the spread of COVID-19, many governments have implemented quarantines and significant restrictions on travel as well as work restrictions that prohibited many employees from going to work.

As a result, we temporarily closed certain manufacturing and other facilities for limited periods in 2020.

Our results have been and we expect will continue to be adversely impacted by these closures and other actions taken to contain or treat the impact of COVID-19, and the extent of such impact will depend upon future developments, which are highly uncertain and cannot be predicted.

COVID-19 continues to interfere with general commercial activity related to our supply chain and customer base, which could have a material adverse effect on our business, financial condition, or results of operations.

In mid-2020, we saw some loosening of government-mandated COVID-19 restrictions in certain locales in response to improved COVID-19 infection levels.

However, upon worsening COVID-19 infection levels in certain localities in late fiscal 2020 and in early fiscal 2021, local governmental authorities have either re-imposed some or all of earlier restrictions or imposed other restrictions, all in an effort to prevent the spread of COVID-19.

In early fiscal 2021, vaccines for combatting COVID-19 were approved by health agencies in certain countries/regions in which we operate (including the U.S., U.K., European Union, Canada and Mexico) and began to be administered.

However, initial quantities of vaccines are limited and vaccine distributions, controlled by local authorities, are being allocated, generally first to front-line health care workers and other essential workers and next to those members of individual populations believed most susceptible to severe effects from COVID-19.

Full administration of the COVID-19 vaccines is unlikely to occur in most jurisdictions until mid- to late- 2021.

The impact of COVID-19, including the impact of restrictions imposed to combat its spread, could result in additional businesses being shut down, additional work restrictions and supply chains being interrupted, slowed, or rendered inoperable.

As a result, it may be even more challenging to obtain and process raw materials to support our business needs, and more individuals could become ill, quarantined or otherwise unable to work and/or travel due to health reasons or governmental restrictions.

Also, governments may impose other laws, regulations or taxes which could adversely impact our business, financial condition or results of operations.

Further, as some of our customers’ businesses are similarly affected, they might delay or reduce purchases from us, which could adversely affect our results of our business, financial condition or results of operations.

The potential effects of COVID-19 also could impact many of the other risk factors described herein, but given the evolving health, economic, social and governmental environments, such potential impact remains uncertain.

While we expect the impacts of COVID-19 to continue to have an effect on our business, financial condition and results of operations, we are unable to predict the extent or nature of these impacts at this time.

In order to safeguard that reputation,

Therefore, we

An epidemic could affect our operations, major facilities or employees’ and consumers’ health.

value of those assets to their carrying values.

On December 24, 2020, the U.K. and the European Union announced an agreement on the EU-UK Trade and Cooperation Agreement (the EU-UK trade deal) that took effect on January 1, 2021.The trade deal was formally approved by the U.K. House of Commons on December 30, 2020 and is expected to be formally approved by the

European Union legislature in March 2021.

Subsequent to November 30, 2020, we acquired FONA for $710 million, which we funded with cash and commercial paper borrowings.

- limiting our ability to borrow additional funds, including an anticipated long-term debt financing in fiscal 2021 of the Cholula and FONA acquisition indebtedness together with our 3.9% notes in the amount of $250 million that mature in July 2021, and increasing the cost of any such borrowing;

At this time, no consensus exists as to what rate or rates will become accepted alternatives to LIBOR, although the U.S. Federal Reserve, in connection with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with the Secured Overnight Financing Rate (SOFR).

SOFR is a more generic measure than LIBOR and considers the cost of borrowing cash overnight, collateralized by U.S. Treasury securities.

2020.

Regulations to implement portions of the CCPA have not been finalized and could significantly impact CCPA compliance measures.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand McCormick & Company, Incorporated, our operations and our present business [removed: environment.][added: environment from the perspective of management.]

We use certain non-GAAP information [added: — more fully described below under the caption Non-GAAP Financial Measures —] that we believe is important for purposes of comparison to prior periods and development of future projections and earnings growth prospects.

On November 30, [added: 2020,] one like share was issued [removed: to] [added: for] each share outstanding to shareholders of record as of November 20, 2020.

All common stock and per share data [removed: has] [added: have] been retroactively adjusted to reflect the stock split.

[removed: The company manufactures, markets] [added: We manufacture, market] and [removed: distributes] [added: distribute] spices, seasoning mixes, condiments and other flavorful products to the entire food [added: and beverage] industry–retailers, food manufacturers and foodservice businesses.

[removed: *Impact of Global COVID-19 Pandemic*–During the year ended November 30, 2020,] [added: Uncertainty with respect to] the [added: economic] effects of [removed: a new coronavirus (COVID-19) and related actions to attempt to control its spread] [added: the pandemic has] significantly impacted not only our operating results but also the global economy.

The extent and nature of government actions varied during [removed: fiscal year 2020 and in early fiscal year] [added: the years ended November 30,] 2021 [added: and 2020] based upon the then-current extent and severity of the COVID-19 pandemic within their respective countries and localities.

[removed: Our sales increased by 4.7% for] [added: | | | | For] the year ended November 30, [removed: 2020 over] [added: 2021 as compared to] the [added: year ended November 30,] 2019 [removed: level.][added: | | | | | | | | |]

That [added: 12.8% sales] increase was driven by [removed: an 10.0% increase in] [added: higher] sales [removed: of our consumer segment, partially offset by a 3.5% decline] in [removed: sales of] [added: both] our [added: consumer and] flavor solutions [removed: segment.][added: segments.]

The impact of COVID-19 on our consumer segment [removed: during fiscal 2020] [added: since the beginning of the pandemic has] resulted in a significant increase in at-home consumption and related demand for our products.

[removed: Those] [added: The COVID-19 mitigation] measures [removed: required closures of, or capacity] [added: in 2020 impacting certain of our flavor solutions customers included the following: (i) with respect to dine-in restaurants, closures,] limitations [removed: on,] [added: on] dine-in [removed: restaurants] [added: capacity,] or [removed: restricted] [added: restrictions on the] operations of those restaurants to carry-out or delivery [removed: only] [added: only;] and [removed: also restricted operations of] [added: (ii) with respect to] quick service [removed: restaurants] [added: restaurants, limitations on operations] to drive-through pick-up or delivery.

In early fiscal 2021, vaccines effective in [removed: combatting] [added: combating] COVID-19 were approved by health agencies in certain countries/regions in which we operate (including the U.S., U.K., European Union, Canada and Mexico) and began to be administered.

The pace and shape of the COVID-19 recovery [removed: described above] as well as the impact and extent of [added: COVID-19 variants or] potential resurgences is not presently known.

These and other uncertainties with respect to COVID-19 could result in changes to our current expectations in addition to a number of adverse impacts to our business, including but not limited to additional disruption to the economy and consumers’ willingness and ability to spend, temporary or permanent closures by businesses that consume our products, such as restaurants, additional work restrictions, and supply chains being interrupted, slowed, or rendered inoperable or, in the case of significant increased demand for our product, [removed: incapable of fulfilling] [added: we may be unable to fulfill] that increased demand.

Also, governments may impose other laws, regulations or taxes [added: related to COVID-19] which could adversely impact our business, financial [removed: condition] [added: condition,] or results of operations.

[added: The potential effects of COVID-19 also could impact us in a number of other ways including, but not limited to, variations in the level of our] profitability, laws and regulations affecting our business, fluctuations in foreign currency markets, the availability of future borrowings, the cost of borrowings, valuation of our pension assets and obligations, credit risks of our customers and counterparties, and potential impairment of the carrying value of goodwill or other indefinite-lived intangible assets.

Through digital marketing, we are connecting with consumers in a personalized way to deliver recipes, provide cooking advice and [added: help them] discover new products.

We have a solid pipeline of flavor solutions [added: products] aligned with our customers’ new product launch plans, many of which include [added: clean-label, organic, natural, and] “better-for-you” innovation.

Since the beginning of [removed: 2015,] [added: 2017,] we have completed [removed: nine] [added: four] acquisitions, which are driving sales in both our consumer and flavor solutions segments.

- On December 30, 2020, we acquired FONA International, LLC and certain of its affiliates (FONA), a privately owned company, for approximately [removed: $710] [added: $708] million, net of cash [removed: acquired, subject to certain customary purchase price adjustments.][added: acquired.]

- On November 30, 2020, we acquired the parent company of Cholula Hot Sauce® (Cholula) from *L* Catterton for approximately [removed: $803] [added: $801] million, net of cash [removed: acquired, subject to certain customary purchase price adjustments.][added: acquired.]

The acquired [removed: market-leading] [added: iconic] brands of RB Foods included French’s®, Frank’s RedHot® and Cattlemen’s®, which are a natural strategic fit with our robust global branded flavor portfolio.

The FONA and Cholula acquisitions [removed: are expected to contribute more than] [added: contributed approximately] one-third of our sales growth in 2021.

As more fully described in note 3 of notes to our consolidated financial statements, we expect to incur special charges of approximately $60 million to $65 million associated with our GE initiative of which approximately [removed: $39.9] [added: $40.7] million have been recognized through November 30, [removed: 2020.][added: 2021.]

We expect that, in total over the course of the ERP replacement program from late 2018 through [removed: 2023,] [added: 2025,] we will invest [removed: from] approximately [removed: $350 million to] $400 million, including expenses related to the go-live activities in our operations, to enable the anticipated completion of the global roll out of our new information technology platform in [removed: 2022.][added: 2024.]

Of that [removed: projected, $350 million to] [added: projected] $400 million, we expect capitalized software to account for approximately 50% and program expenses to account for approximately 50%.

Of the approximately [removed: $175 million to] $200 million of operating expenses included in our projected total spending related to our ERP replacement program, approximately [removed: $40] [added: $85] million [removed: have] [added: has] been recognized through November 30, [removed: 2020.][added: 2021.]

Of the approximately [removed: $175 million to] $200 million of capitalized software included in our projected total spending related to our ERP program, approximately [removed: $87] [added: $115] million has been recognized through November 30, [removed: 2020.][added: 2021.]

Net cash provided by operating activities [removed: reached] [added: was $828.3 million,] $1,041.3 million [removed: in 2020, an increase of $94.5 million from the] [added: and] $946.8 million [removed: realized] in [removed: 2019.][added: 2021, 2020, and 2019, respectively.]

In [removed: 2020,] [added: 2021,] we continued to have a balanced use of cash for debt repayment, capital expenditures and the return of cash to shareholders through dividends and share repurchases.

We are using our cash to fund shareholder dividends, with annual increases in each of the past [removed: 35] [added: 36] years, and to fund capital expenditures and acquisitions.

In [removed: 2020,] [added: 2021,] the return of cash to our shareholders through dividends and share repurchases was [removed: $377.4] [added: $371.9] million.

Operating Results: On a long-term basis, we expect a combination of [removed: acquisitions and] [added: acquisitions,] share repurchases [added: and debt repayments, and the resulting impact on interest expense,] to add about 2% to earnings per share growth.

In [removed: 2020,] [added: 2021,] we achieved further growth of our business with net sales rising [removed: 4.7%] [added: 12.8%] over the [removed: 2019] [added: 2020] level due to the following factors:

- We grew volume and product mix, which added [removed: 3.7%] [added: 5.5%] of sales [removed: growth.][added: growth, exclusive of acquisitions.]

- Pricing actions contributed [removed: 1.6%] [added: 0.8%] of the increase in net sales.

- Net sales growth was [removed: negatively] [added: positively] impacted by fluctuations in currency rates that [removed: decreased] [added: increased] sales growth by [removed: 0.6%.][added: 2.4%.]

Excluding this impact, we grew sales by [removed: 5.3%] [added: 10.4%] over the prior year on a constant currency basis.

Operating income was [removed: $999.5] [added: $1,015.1] million in [removed: 2020] [added: 2021] and [removed: $957.7] [added: $999.5] million in [removed: 2019.][added: 2020.]

We recorded [removed: $6.9] [added: $51.1] million and [removed: $20.8] [added: $6.9] million of special charges in [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively, related to organization and streamlining actions.

*COVID-19* – As a result of the COVID-19 pandemic, governments around the world either recommended or mandated actions to slow the transmission of the virus that included shelter-in-place orders, quarantines, limitations on crowd size, closures of dine-in restaurants and bars, and significant restrictions on travel, as well as work restrictions that prohibited many employees from going to work.

We continue to actively monitor the impact of COVID-19 on all aspects of our business.

The effects of COVID-19 on consumer behavior have impacted the relative balance of at-home versus away-from-home food demand.

In 2021, our flavor solutions segment benefited from a recovery in away-from-home eating that more than offset the net sales declines experienced in 2020 as a result of restrictions imposed to reduce the spread of COVID-19.

Although certain restrictive measures were reinstated during certain periods of 2021, the prevalence and scale of closures and operating limitations were less severe as compared to 2020.

For comparative purposes, the following provides a summary of growth in net sales as reported and on a constant currency basis for the year ended 2021 as compared to 2019:

| Consumer segment | | | 20.4 | | % | 2.1 | | % | 18.3 | | % |

| Flavor Solutions segment | | | 14.6 | | % | 0.8 | | % | 13.8 | | % |

| Total net sales | | | 18.1 | | % | 1.6 | | % | 16.5 | | % |

The percentage change in reported net sales and the percentage change on a constant currency basis were

favorably impacted by the acquisitions of Cholula and FONA, which, in aggregate, contributed 2.6%, 7.1% and 4.3% to the consumer segment, flavor solutions segment and total net sales growth rates, respectively, in the preceding table, on both a reported and constant currency basis.

The availability of COVID-19 vaccines and their acceptance by individuals is difficult to predict, and vaccination levels vary across jurisdictions.

*Inflationary Cost Environment and Supply Chain Disruption* – During fiscal 2021, we experienced inflationary cost increases in our commodities, packaging materials and transportation costs.

We expect that these inflationary cost increases will continue but we expect they will be partially mitigated by pricing actions implemented in the fourth quarter of fiscal 2021, those that we plan to implement in fiscal 2022 and by our Comprehensive Continuous Improvement (CCI) program-led cost savings.

During fiscal 2021, we also experienced additional pressure in our supply chain due to strained transportation capacity, as well as due to labor shortages and absenteeism associated with COVID-19, together with the impact of the continued elevated demand.

In response to these supply chain pressures, we have taken actions build capacity as well as increase our supply chain related resources.

We expect these pressures to continue in 2022.

Information with respect to our three most recent acquisitions is provided below:

During fiscal 2021, we resumed activities related to our ERP replacement program.

Increased net sales within our consumer segment was driven by strong demand due to a sustained shift in consumer behavior toward at-home meal preparation, which was first seen in 2020 as a response to actions taken to mitigate the spread of COVID-19.

Increased net sales within our flavor solutions segment was principally driven by sales of away-from-home products as compared to 2020, when actions taken to mitigate the spread of COVID-19 significantly impacted demand.

- Acquisitions contributed 4.1% of the increase in net sales.

Special charges in 2021 included $4.7 million in cost of goods sold related the exit of a low margin business.

A gain on our sale of an unconsolidated operation increased earnings per share by $0.05 in 2021.

*2022 Outlook*

That anticipated 2022 sales growth includes the impact of pricing actions, including those taken in 2021, to partially offset cost increases.

We expect the impact of pricing to be a significant driver of our sales growth.

We expect volume and product mix to be impacted by pricing elasticities, although at a lower level than we have experienced historically.

We anticipate that our volume and product mix will also be impacted by the exit of a lower margin product line in late 2021.

The projected 2022 change in gross profit margin is principally due to the net effect of (i) a mid-teen percentage impact of inflation in 2022 compared to 2021, (ii) the favorable impact of pricing actions in response to increased commodity, packaging materials and transportation costs, (iii) anticipated unfavorable sales mix in 2022 between our consumer and flavor solutions segments as compared to 2021, (iv) the favorable impact of anticipated CCI cost savings, and (v) the lack of $11.0 million of transaction and integration expenses and special charges reflected in cost of goods sold in 2021.

Our CCI-led cost savings target in 2022 is approximately $85 million.

| | | | 2021 | | | 2020 | | |

| Net sales | | | $ | 6,317.9 | | $ | 5,601.3 | |

| Percent growth | | | 12.8 | | % | 4.7 | | % |

| Acquisitions | | | 4.1 | | % | — | | % |

| Foreign exchange | | | 2.4 | | % | (0.6) | | % |

On a consolidated basis, higher volume and favorable product mix increased sales by 5.5% while pricing actions, which were primarily taken in the fourth quarter, added 0.8% to sales.

That net volume increase and favorable mix was driven by continued levels of strong demand within our consumer segment, as the shift in consumer behavior toward at-home meal preparation, first seen in 2020 as a response to actions taken to mitigate the spread of COVID-19, has persisted.

In addition, our flavor solutions segment volume increased principally due to a recovery in demand for away-from-home products, including higher sales to our branded food service customers, as compared to 2020.

| | | | 2021 | | | 2020 | | |

The impact of the global COVID-19 pandemic on our consolidated operating results in early fiscal 2020 was limited, in all material respects, to our operations in China where the Chinese government mandated numerous measures, including closures of businesses, limitations on movements of individuals and goods, and the imposition of other restrictive measures, in its efforts to mitigate the spread of COVID-19 within the country.

In March 2020, as COVID-19 spread outside of China, significantly impacting the rest of the world, the World Health Organization designated the outbreak as a global pandemic.

The pandemic spread outside of China in the balance of fiscal year 2020 to impact operations in our Americas and Europe, Middle East and Africa (EMEA) regions in addition to elsewhere in our Asia/Pacific region.

The effects of COVID-19 and related actions to attempt to control its spread significantly impacted not only our operating results but also the global economy.

In the U.S., many state and local governments, based on local conditions, either recommended or mandated actions to slow the transmission of COVID-19.

These measures ranged from limitations on crowd size, together with closures of bars and dine-in restaurants, to mandatory orders for non-essential citizens to shelter in place.

Governments in non-U.S. jurisdictions also implemented shelter-in-place orders, quarantines, significant restrictions on travel, as well as restrictions that prohibited many employees from going to work.

Borders between countries have been closed to contain the spread of COVID-19 contagion.

We identified three priorities while navigating through the period of volatility and uncertainty associated with various stages of the COVID-19 pandemic:

▪First, to ensure the health and safety of our employees and the quality and integrity of our products.

▪Second, to keep our brands and our customers' brands in supply and to maintain the financial strength of our business.

▪Third, to ensure McCormick emerges strong from this event.

The pandemic will come to an end and we believe that we will come out a better company by driving our long-term strategies, responding to changing consumer behavior and capitalizing on opportunities from our relative strength.

We implemented numerous measures over the course of fiscal 2020 to ensure that these priorities were achieved, including: (i) for our manufacturing and distribution employees, who played a critical role in maintaining the supply of our products to our customers and consumers, we instituted pre-shift temperature checks, temporarily increased pay and benefits, and provided time to enable social distancing and even greater sanitation procedures during shift changes; (ii) for our other employees, we instituted work-from-home arrangements; (iii) we maintained close communication with customers and suppliers to enable us to react to changing demand; and (iv) throughout the organization, we empowered global, regional and local crisis response teams that enabled us to react quickly to the challenging environment.

Our operating results have and will continue to be impacted by COVID-19, including the related recovery and the shift in consumer demand resulting from the pandemic.

We have partnered with our customers to monitor consumer demand changes and address the shift to at-home versus away-from-home consumption.

We estimate that away-from-home consumption has historically represented approximately 20% of our consolidated sales.

The effects of COVID-19 on consumer behavior have, on a net basis, favorably impacted the operating results of our consumer segment and unfavorably impacted the operating results of our flavor solutions segment during the year ended November 30, 2020.

The unfavorable impact on our flavor solutions segment during the same periods was principally attributable to decreased demand from certain customers that were affected by government mandates related to COVID-19 in many of our markets.

The resulting negative demand impacts in our flavor solutions segment were partially offset by increased at-home consumption from certain customers in our flavor solutions segment that use our products to flavor their own brands for at-home consumption.

The impact of COVID-19 on our consumer segment and flavor solutions segment moderated during our fourth quarter of fiscal 2020.

During that quarter, our sales increased by 4.9% over the comparable period in 2019, driven by a 5.9% increase in sales of our consumer segment and a 3.1% increase in sales of our flavor solutions segment.

The 5.9% fourth quarter growth in sales of our consumer segment was moderated by the lack of availability of certain of our consumer products in the U.S. following the sustained increase in demand earlier in 2020 that caused us to suspend or curtail production of some secondary products in the fourth quarter to protect the supply of our top selling holiday items.

Upon worsening COVID-19 infection levels in certain localities in late fiscal 2020 and in early fiscal 2021, local governmental authorities have either re-imposed some or all of earlier restrictions or imposed other restrictions, all in an effort to check the spread of COVID-19.

However, initial quantities of vaccines are limited and vaccine distributions, controlled by local authorities, are being allocated, generally first to front-line health care workers and other essential workers and next to those members of individual populations believed most susceptible to severe effects from COVID-19.

Full administration of the COVID-19 vaccines is unlikely to occur in most jurisdictions until mid- to late-2021.

The potential effects of COVID-19 also could impact us in a number of other ways including, but not limited to, variations in the level of our

Our acquisitions have included bolt-on opportunities as well as the following recent acquisitions:

The RB Foods acquisition contributed more than one-third of our sales growth in 2018 and 2017.

In addition, the pause of this activity enabled all McCormick employees to focus their activities on the three priorities previously described under the heading “Impact of COVID-19 Pandemic” for navigating through the period of volatility and uncertainty associated with various stages of the COVID-19 pandemic.

This growth was driven by sharply higher demand within our consumer segment, as the continuation of measures imposed to mitigate the spread of COVID-19 and the related change in consumer behavior, resulted in a shift in consumer behavior toward at-home meal preparation that more than offset lower demand within our flavor solutions segment principally associated with our branded food service customers.

During 2020, COVID-19 related

Those favorable impacts in 2020 were partially offset by the impact of a higher effective tax rate, a decrease in other income and the impact of higher shares outstanding.

*2021 Outlook*

That anticipated 2021 sales growth includes the incremental impact of the Cholula and FONA acquisitions, which we expect to comprise 3.5% to 4.0% of the expected 7% to 9% sales growth, and higher volume and product mix driven by our category management, brand marketing, new product, and differentiated customer engagement growth plans.

The projected 2021 range of change in gross profit margin is principally due to (i) expected accretion from our acquisitions of Cholula and FONA, net of transaction and integration expenses of $6.9 million related to the amortization of the step-up of the acquired inventories of Cholula and FONA to fair value, (ii) anticipated unfavorable sales mix in 2021 between our consumer and flavor solutions segments as compared to 2020, (iii) an expected increase in COVID-19 expenses of approximately $10 million in 2021 over the 2020 level, and (iv) an anticipated low-single-digit level of inflation in 2021 compared to 2020.

The projected range of change in operating income in 2021 reflects an expected increase of approximately $30 million in expense related to our global ERP replacement program over the fiscal 2020 level.

Our CCI-led cost savings target in 2021 is approximately $110 million and approximates the $113 million of CCI-led cost savings realized in 2020.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

[removed: The company manufactures, markets] [added: We manufacture, market] and [removed: distributes] [added: distribute] spices, seasoning mixes, condiments and other flavorful products to the entire food industry–retailers, food manufacturers and foodservice businesses.

Additional facilities are based in Australia, [removed: India,] Central America, Thailand and South Africa.

[removed: In early fiscal 2021,] [added: On December 30, 2020,] we completed the purchase of FONA International, LLC and certain of its affiliates (FONA), a privately held company.

The purchase price was approximately [removed: $710] [added: $708] million, net of cash [removed: acquired, subject to certain customary purchase price adjustments.][added: acquired.]

The results of FONA’s operations [removed: will be] [added: have been] included in our financial statements as a component of our flavor solutions segment from the date of [removed: FONA’s acquisition on December 30, 2020.][added: acquisition.]

The purchase price was approximately [removed: $803] [added: $801] million, net of cash [removed: acquired, subject to certain customary purchase price adjustments.][added: acquired.]

The [removed: market-leading] [added: iconic] brands we acquired from RB Foods included French’s®, Frank’s RedHot® and Cattlemen’s®, which are a natural strategic fit with our robust global branded flavor portfolio.

We offer our customers and consumers a range of products to meet the increasing demand for certain product attributes such as [added: clean-label,] organic, [added: natural,] reduced sodium, gluten-free and non-GMO (genetically modified organisms) and that extend from premium to value-priced.

In [removed: 2020,] [added: 2021,] the consumer segment contributed approximately [removed: 64%] [added: 62%] of consolidated net sales and [removed: 77%] [added: 75%] of consolidated operating income, and the flavor solutions segment contributed approximately [removed: 36%] [added: 38%] of consolidated net sales and [removed: 23%] [added: 25%] of consolidated operating income.

In the Europe, Middle East and Africa (EMEA) region, our major brands include the Ducros®, Schwartz®, Kamis® and Drogheria & [added: Alimentari® brands of spices, herbs and seasonings and an extensive line of Vahiné® brand dessert items.]

[removed: In Australia, we market our spices and] seasonings under the McCormick brand, our dessert products under the Aeroplane® brand, and packaged chilled herbs under the Gourmet Garden brand.

Approximately [removed: half] [added: two thirds] of our consumer segment sales are [removed: spices, herbs] [added: spices] and [removed: seasonings.][added: seasonings and condiments and sauces.]

[added: In the condiments and sauces category, we are one of the brand leaders globally and in the U.S.] There are numerous competitive brands of [removed: spices, herbs] [added: spices] and [removed: seasonings] [added: seasonings, and condiments and sauces] in the U.S. and additional brands in international markets.

In this competitive environment, we are leading with innovation and brand marketing, and applying our analytical tools to help customers optimize the profitability of their [removed: spice and seasoning] sales [added: of these categories] while simultaneously working to increase our sales and profit.

Other competitors include [removed: larger] [added: large] publicly held flavor companies that are more global in nature, but which also tend to [removed: specialize in a narrower range of flavor] [added: focus on providing integrated] solutions [removed: than McCormick.][added: extending beyond flavor through the use of other functional and nutritional ingredients.]

The most significant raw materials used in our business are dairy products, pepper, [removed: vanilla,] capsicums (red peppers and paprika), [removed: garlic,] onion, [removed: rice] [added: vanilla, garlic,] and [removed: wheat flour.][added: salt.]

Customers for the flavor solutions segment include food manufacturers and the foodservice industry supplied [removed: both] [added: through a variety of channels including] directly and indirectly through [removed: distributors.][added: distributors, wholesale foodservice suppliers and e-commerce.]

Sales to one of our consumer segment customers, Wal-Mart Stores, Inc., accounted for approximately [removed: 12%] [added: 11%] of consolidated sales in [added: 2021 and] 2020 and [removed: 11%] [added: 12%] of consolidated sales in [removed: 2019 and 2018.][added: 2019.]

Sales to one of our flavor solutions segment customers, PepsiCo, Inc., accounted for approximately 11% of consolidated sales in [added: 2021,] 2020 and [removed: 10% of consolidated sales in both 2019 and 2018.][added: 2019.]

[added: In 2021, 2020 and 2019,] the top three customers in our flavor solutions segment represented between [removed: 49%] [added: 48%] and 52% of our global flavor solutions sales.

Although in the aggregate these trademarks are material to our business, the loss of any one of those trademarks, with the exception of our “McCormick,” “French’s ,” “Frank’s RedHot,” “Lawry’s,” “Zatarain’s,” “Cholula,” “Stubb's,” “Club House,” “Ducros,” “Schwartz,” “Vahiné,” "OLD BAY," "Simply Asia," "Thai Kitchen," "Kitchen Basics," “Kamis,” “Drogheria & Alimentari,” "DaQiao," [removed: “Kohinoor”] and "Gourmet Garden" trademarks, would not have a material adverse effect on our business.

The term of the license agreements is generally [removed: three] [added: two] to [removed: five] [added: three] years or until such time as either party terminates the agreement.

Those agreements with specific terms [removed: are] [added: may be] renewable upon agreement of the parties.

In this competitive environment, our growth strategies include customer [removed: intimacy] [added: engagement] and product innovation based on consumer insights.

We had approximately [removed: 13,000] [added: 14,000] full-time employees worldwide as of November 30, [removed: 2020.][added: 2021.]

[removed: In] [added: Since the onset of COVID-19 in] 2020, our employees [added: have] demonstrated resiliency, agility and engagement in support of business continuity despite the challenges that [removed: arose] [added: have arisen] in the pandemic.

We have approximately [removed: 300] [added: 400] employees in the United States who are covered by a collective bargaining [removed: contract, which is subject to renegotiation upon its expiration in 2021.][added: contract.]

At our subsidiaries outside the U.S., approximately [removed: 2,500] [added: 2,600] employees are covered by collective bargaining agreements or similar arrangements.

We believe [removed: diversity] [added: diversity, equity] and inclusion are at the core of our values and strategic business priorities.

We have various employee ambassador groups that provide a supportive, [removed: collaborative space for employees to come together to promote inclusion.]

[removed: We] [added: Through our continuous listening strategy, we] measure employee engagement on an ongoing basis to solicit feedback and understand views of our employees, work environment and culture.

The results from [removed: engagement] [added: these] surveys are used to implement programs and processes designed to enhance employee engagement and improve the employee experience.

In addition to the executive officers [removed: described] [added: indicated] in the [removed: 2021] [added: 2022] Proxy Statement incorporated by reference in Part III, Item 10 of this Report, the [removed: following individuals are also] [added: other] executive [removed: officers] [added: officer] of [removed: McCormick:] [added: McCormick is] Lisa B.

Ms. Manzone is [removed: 56] [added: 57] years old [removed: and, during the last five years,] [added: and] has held the [removed: following positions with McCormick: June 2015 to present –] [added: position of] Senior Vice President, Human [removed: Relations; January 2015 to] [added: Relations since] June [removed: 2015 – Vice President Global Human Relations; January 2013 to January 2015 – Vice President Compensation and Benefits.][added: 2015.]

In fiscal year [removed: 2020,] [added: 2021,] approximately 40% of sales were from non-U.S. operations.

These statements may be identified by the use of words such as “may,” “will,” “expect,” "should," "anticipate," "intend," “believe” and “plan.” These statements may relate to: the impact of the COVID-19 pandemic on our business, suppliers, consumers, customers, and employees; disruptions or inefficiencies in the supply chain, including any impact of COVID-19; the expected results of operations of businesses acquired by the company, including the acquisitions of Cholula and FONA; the expected impact of [removed: material costs] [added: the inflationary cost environment, including commodity, packaging materials] and [added: transportation costs on our business; the expected impact of] pricing actions on the company's results of operations and gross margins; the expected impact of [added: factors affecting our supply chain, including transportation capacity, labor shortages, and absenteeism; the expected impact of] productivity improvements, including those associated with our Comprehensive Continuous Improvement (CCI) program and global enablement initiative; expected working capital improvements; expectations regarding growth potential in various geographies and markets, including the impact from customer, channel, category, and e-commerce expansion; expected trends in net sales and earnings performance and other financial measures; the expected timing and costs of implementing our business transformation initiative, which includes the implementation of a global enterprise resource planning (ERP) system; the expected impact of accounting pronouncements; the expectations of pension and postretirement plan contributions and anticipated charges associated with those plans; the holding period and market risks associated with financial instruments; the impact of foreign exchange fluctuations; the adequacy of internally generated funds and existing sources of liquidity, such as the availability of bank financing; the anticipated sufficiency of future cash flows to enable the payments of interest and repayment of short- and long-term debt as well as quarterly dividends and the ability to issue additional debt [removed: or equity] securities; and expectations regarding purchasing shares of McCormick's common stock under the existing repurchase authorization.

Results may be materially affected by factors such as: the company's ability to drive revenue growth; [added: the company's ability to increase pricing to offset, or partially offset, inflationary pressures on the cost of our products;] damage to the company's reputation or brand name; loss of brand relevance; increased private label use; product quality, labeling, or safety concerns; negative publicity about our products; actions by, and the financial condition of, competitors and customers; the longevity of mutually beneficial relationships with our large customers; the ability to identify, interpret and react to changes in consumer preference and demand; business interruptions due to natural disasters, unexpected events or public health crisis, including COVID-19; issues affecting the company's supply chain and [added: procurement of] raw materials, including fluctuations in the cost and availability of raw and packaging materials; [added: labor shortage, turnover and labor cost increases;] government regulation, and changes in legal and regulatory requirements and enforcement practices; the lack of successful acquisition and integration of new [removed: businesses, including the acquisitions of Cholula and FONA;] [added: businesses;] global economic and financial conditions generally, including the on-going impact of the exit of the United Kingdom (U.K.) from the European Union, availability of financing, interest and inflation rates, and the imposition of tariffs, quotas, trade barriers and other similar restrictions; foreign currency fluctuations; the effects of increased level of debt service following the Cholula and FONA acquisitions as well as the effects that such increased debt service may have on the company's ability to borrow or the cost of any such additional borrowing, our credit rating, and our ability to react to certain economic and industry conditions; [added: risks associated with the phase-out of LIBOR;] impairments of indefinite-lived intangible assets; assumptions we have made regarding the investment return on retirement plan assets, and the costs associated with pension obligations; the stability of credit and capital markets; risks associated with the company's information technology systems, including the threat of data breaches and cyber-attacks; the company's inability to successfully implement our business transformation initiative; fundamental changes in tax laws; including interpretations and assumptions we have made, and guidance that may be issued, [removed: regarding the U.S. Tax Act enacted on December 22, 2017] and volatility in our effective tax rate; climate change; [added: Environmental, Social and Governance (ESG) matters;] infringement of intellectual property rights, and those of customers; litigation, legal and administrative proceedings; the company's inability to achieve expected and/or needed cost savings or margin improvements; negative employee relations; and other risks described herein under Part I, Item 1A "Risk Factors."

In Australia, we market our spices and

Within the spices and seasoning category, we are the brand leader globally and a category leader in our key markets.

In addition, we rely on third-party transportation providers to deliver raw materials as well as our product to our customers.

Reduced availability of transportation capacity due to labor shortages, primarily as a result of the COVID-19 pandemic, has caused an increase in the cost of transportation for us and our suppliers.

Additionally, in our flavor solutions segment, we are differentiated by our culinary and consumer inspired flavor development as well the breadth of our product offering and customer engagement.

collaborative space for employees to come together to promote inclusion.

Manzone.

The information and other content contained on our website are not part of (or incorporated by reference in) this report or any other document we file with the SEC.

Unless expressly noted, our disclosures contained in this Annual Report on Form 10-K for the year ended November 30, 2020 exclude the impact of our acquisition of FONA.

Alimentari® brands of spices, herbs and seasonings and an extensive line of Vahiné® brand dessert items.

In India, we market our spices and rice products under the Kohinoor® brand.

For these products, we are a category leader in our primary markets.

In 2020, 2019 and 2018,

Manzone and Nneka L.

Rimmer.

Ms. Rimmer is 49 years old and, during the last five years, has held the following positions with McCormick: August 2020 to present – President Global Flavors and Extracts (part of our flavor solutions segment); February 2019 to August 2020 – Senior Vice President, Business Transformation; August 2017 to February 2019 – Senior Vice President, Strategy and Global Enablement; April 2015 to August 2017 – Senior Vice President, Corporate Strategy and Development.

For the fiscal year ended November 30, [removed: 2020][added: 2021]

| Common [removed: Stock, No] [added: Stock Non-Voting,] Par [removed: Value] [added: Value $0.01 per share] | | | [removed: MKC-V] [added: MKC] | | | New York Stock Exchange | | |

| Common [removed: Stock Non-Voting, No] [added: Stock,] Par [removed: Value] [added: Value $0.01 per share] | | | [removed: MKC] [added: MKC.V] | | | New York Stock Exchange | | |

The aggregate market value of the Voting Common Stock held by non-affiliates at May 31, [removed: 2020: $1,601,653,059][added: 2021: $1,571,749,434]

The aggregate market value of the Non-Voting Common Stock held by non-affiliates at May 31, [removed: 2020: $21,709,733,991][added: 2021: $22,192,789,818]

| Proxy Statement for McCormick’s March [removed: 31, 2021] [added: 30, 2022] Annual Meeting of Stockholders (the [removed: “2021] [added: “2022] Proxy Statement”) | | | Part III | | |

| Common Stock | | | 17,789,317 | | | December 31, 2021 | | |

| Common Stock Non-Voting | | | 249,742,929 | | | December 31, 2021 | | |

| Common Stock | | | 17,999,331 | | | December 31, 2020 | | |

| Common Stock Non-Voting | | | 248,943,617 | | | December 31, 2020 | | |

Peterborough, England–flavor solutions

India:

New Delhi–consumer and flavor solutions

Our Common Stock and Common Stock Non-Voting trade under the ticker symbols [removed: MKCV] [added: MKC.V] and MKC, respectively.

We have disclosed in note [removed: 18] [added: 17] of the accompanying financial statements the information relating to the dividends declared and paid on our classes of common stock.

The market price of our common stock at the close of business on December 31, [removed: 2020] [added: 2021] was [removed: $95.57] [added: $95.39] per share for the Common Stock and [removed: $95.60] [added: $96.61] per share for the Common Stock Non-Voting.

The approximate number of holders of our common stock based on record ownership as of December 31, [removed: 2020] [added: 2021] was as follows:

| Common Stock, [removed: no] par value [added: $0.01 per share] | | | [removed: 2,000] [added: 2,100] | | |

| Common Stock Non-Voting, [removed: no] par value [added: $0.01 per share] | | | 9,400 | | |

The following table summarizes our purchases of Common Stock (CS) and Common Stock Non-Voting (CSNV) during the fourth quarter of [removed: 2020:][added: 2021:]

As of November 30, [removed: 2020,] [added: 2021,] approximately [removed: $585] [added: $576] million remained of a $600 million share repurchase authorization approved by the Board of Directors in November 2019.

During fiscal [removed: 2020,] [added: 2021,] we issued [removed: 975,306] [added: 617,155] shares of CSNV in exchange for shares of CS and issued [removed: 4,404] [added: 14,262] shares of CS in exchange for shares of CSNV.

| September 1, 2021 to September 30, 2021 | | | CS-33,191 (1) CSNV-0 | | | $85.75 \- | | | 33,191 \- | | | $579 million | | |

| October 1, 2021 to October 31, 2021 | | | CS-11,640 CSNV-1,600 | | | $79.88 $80.96 | | | 11,640 1,600 | | | $578 million | | |

| November 1, 2021 to November 30, 2021 | | | CS-18,007 (2) CSNV-0 | | | $85.68 \- | | | 18,007 \- | | | $576 million | | |

| Total | | | CS-62,838 CSNV-1,600 | | | $84.64 $80.96 | | | 62,838 1,600 | | | $576 million | | |

(1)On September 1, 2021 and September 29, 2021, we purchased 15,870 shares and 17,321 shares, respectively, of our CS from our U.S. defined contribution retirement plan to manage shares, based upon participant activity, in the plan's company stock fund.

The price paid per share represented the closing price of the common shares on September 1, 2021 and September 29, 2021, respectively.

(2)On November 23, 2021, we purchased 18,007 shares of our CS from our U.S. defined contribution retirement plan to manage shares, based upon participant activity, in the plan's company stock fund.

The price paid per share represented the closing price of the common shares on November 23, 2021.

On November 30, 2020, the Company effected a two-for-one stock split in the form of a stock dividend on all shares of the Company's two classes of common stock.

On November 30, 2020, one like share was issued for each outstanding share to shareholders of record as of November 20, 2020.

All common stock and per share data has been retroactively adjusted to reflect the stock split.

| September 1, 2020 to September 30, 2020 | | | CS-0 CSNV-0 | | | \- \- | | | \- \- | | | $586 million | | |

| October 1, 2020 to October 31, 2020 | | | CS-13,200 CSNV-0 | | | $97.24 \- | | | 13,200 \- | | | $585 million | | |

| November 1, 2020 to November 30, 2020 | | | CS-0 CSNV-0 | | | \- \- | | | \- \- | | | $585 million | | |

| Total | | | CS-13,200 CSNV-0 | | | $97.24 \- | | | 13,200 \- | | | $585 million | | |

HISTORICAL FINANCIAL SUMMARY

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (millions except per share and percentage data) | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | |

| For the Year | | | | | | | | | | | | | | | | | |

| Net sales | | | $ | 5,601.3 | | $ | 5,347.4 | | $ | 5,302.8 | | $ | 4,730.3 | | $ | 4,313.9 | |

| Operating income | | | 999.5 | | | 957.7 | | | 891.1 | | | 699.8 | | | 649.4 | | |

| Income from unconsolidated operations | | | 40.8 | | | 40.9 | | | 34.8 | | | 33.9 | | | 36.1 | | |

| Net income | | | 747.4 | | | 702.7 | | | 933.4 | | | 477.4 | | | 472.3 | | |

| Per Common Share (1) | | | | | | | | | | | | | | | | | |

| Earnings per share–basic | | | $ | 2.80 | | $ | 2.65 | | $ | 3.55 | | $ | 1.88 | | $ | 1.87 | |

| Earnings per share–diluted | | | 2.78 | | | 2.62 | | | 3.50 | | | 1.86 | | | 1.85 | | |

| Common dividends declared | | | 1.27 | | | 1.17 | | | 1.07 | | | 0.97 | | | 0.88 | | |

| Closing price, non-voting shares–end of year | | | 93.49 | | | 84.63 | | | 75.00 | | | 51.09 | | | 45.60 | | |

| Book value per share | | | 14.76 | | | 13.01 | | | 12.05 | | | 9.81 | | | 6.53 | | |

| At Year-End | | | | | | | | | | | | | | | | | |

| Total assets | | | $ | 12,089.7 | | $ | 10,362.1 | | $ | 10,256.4 | | $ | 10,385.8 | | $ | 4,635.9 | |

| Current debt | | | 1,150.6 | | | 698.4 | | | 643.5 | | | 583.2 | | | 393.2 | | |

| Long-term debt | | | 3,753.8 | | | 3,625.8 | | | 4,052.9 | | | 4,443.9 | | | 1,054.0 | | |

| Shareholders’ equity | | | 3,940.0 | | | 3,456.7 | | | 3,182.2 | | | 2,570.9 | | | 1,638.1 | | |

| Other Financial Measures | | | | | | | | | | | | | | | | | |

| Percentage of net sales | | | | | | | | | | | | | | | | | |

| Gross profit | | | 41.1 | | % | 40.1 | | % | 39.5 | | % | 37.9 | | % | 38.1 | | % |

| Operating income | | | 17.8 | | % | 17.9 | | % | 16.8 | | % | 14.8 | | % | 15.1 | | % |

| Capital expenditures | | | $ | 225.3 | | $ | 173.7 | | $ | 169.1 | | $ | 182.4 | | $ | 153.8 | |

| Depreciation and amortization | | | 165.0 | | | 158.8 | | | 150.7 | | | 125.2 | | | 108.7 | | |

| Common share repurchases | | | 47.3 | | | 95.1 | | | 62.3 | | | 137.8 | | | 242.7 | | |

| Dividends paid | | | 330.1 | | | 302.2 | | | 273.4 | | | 237.6 | | | 217.8 | | |

| Average shares outstanding (1) | | | | | | | | | | | | | | | | | |

| Basic | | | 266.5 | | | 265.1 | | | 263.1 | | | 253.6 | | | 253.1 | | |

| Diluted | | | 269.1 | | | 268.1 | | | 266.5 | | | 256.8 | | | 255.9 | | |

(1)On November 30, 2020, the Company effected a two-for-one stock split to shareholders of record as of November 20, 2020.

All common stock and per share data has been retroactively adjusted to reflect the stock split.

The historical financial summary includes the impact of certain items that affect the comparability of financial results year to year.

The net impact of these items is reflected in the following table:

| (millions except per share data) | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | |

| Operating income (1) | | | $ | (19.3) | | $ | (20.8) | | $ | (38.8) | | $ | (83.9) | | $ | (16.0) | |

| Net income (2) | | | (15.3) | | | (14.6) | | | 271.4 | | | (69.3) | | | (11.1) | | |

| Earnings per share–diluted (3) | | | (0.05) | | | (0.06) | | | 1.02 | | | (0.27) | | | (0.04) | | |

(1)In 2020, 2019, 2018, 2017, and 2016, we recorded special charges related to the completion of organization and streamlining actions, including, for 2016, special charges related to the discontinuance of bulk-packaged and broken basmati rice product lines for our business in India.

Although there are inherent limitations in the effectiveness of any system of internal control over financial reporting, based on our assessment, we have concluded with reasonable assurance that our internal control over financial reporting was effective as of November 30, [removed: 2020.][added: 2021.]

Our internal control over financial reporting as of November 30, [removed: 2020] [added: 2021] has been audited by Ernst & Young LLP.

[removed: ][added: ]

[removed: ][added: ]

[removed: ][added: ]

| *Vice President & Controller* [removed: *Chief Accounting Officer*] | | |

We have audited McCormick & Company, Incorporated’s internal control over financial reporting as of November 30, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, McCormick & Company, Incorporated (the Company) maintained, in all material respects, effective internal control over financial reporting as of November 30, [removed: 2020,] [added: 2021,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of November 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated income statements, statements of comprehensive income, cash flow statements and statements of shareholders’ equity for each of the three years in the period ended November 30, [removed: 2020,] [added: 2021,] and the related notes and the financial statement schedule listed in the Index at item 15(2) and our report dated January [removed: 28, 2021] [added: 27, 2022] expressed an unqualified opinion thereon.

[removed: ][added: ]

[removed: January 28,] [added: |] 2021 [added: | | | | | | | | | | | | | | |]

We have audited the accompanying consolidated balance sheets of McCormick & Company, Incorporated (the Company) as of November 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated income statements, statements of comprehensive income, cash flow statements and statements of shareholders’ equity for each of the three years in the period ended November 30, [removed: 2020,] [added: 2021,] and the related notes and financial statement schedule listed in the Index at item 15(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at November 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended November 30, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of November 30, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated January [removed: 28, 2021] [added: 27, 2022] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | At November 30, [removed: 2020,] [added: 2021,] the Company's indefinite-lived intangible assets consist of brand names and trademarks with an aggregate carrying value of approximately [removed: $3.0 billion (of which $0.4 billion related to the Cholula brand name, which was acquired on November 30, 2020).] [added: $3.1 billion.] As explained in Note 1 to the consolidated financial statements, these assets are assessed for impairment at least annually [removed: primarily] using the relief-from-royalty methodology to determine their fair values. If the fair value of any [removed: of the] brand [removed: names] [added: name] or [removed: trademarks] [added: trademark] is less than its carrying amount, an impairment loss is recognized in an amount equal to the difference. Auditing the Company's impairment assessments [removed: was] [added: is] complex due to the significant estimation required in determining the fair value of the brand names and trademarks. Significant management judgment is also involved in determining whether individual brand names and trademarks should be grouped for purposes of the fair value determination or must be evaluated individually. The Company's methodologies for estimating the fair value of these assets involve significant assumptions and inputs, including projected financial information for net sales and operating profit by brand, royalty rates, and discount rates, all of which are sensitive to and affected by economic, industry, and company-specific qualitative factors. These significant assumptions and inputs are forward-looking and could be affected by future economic and market conditions. | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over the Company’s indefinite-lived intangible asset [removed: review process,] [added: impairment assessment,] including controls over management’s review of its asset groupings and the significant assumptions described above. We tested controls over the review of methodologies used, significant assumptions and inputs, and completeness and accuracy of the data used in the measurements. To test the estimated fair value of the Company’s indefinite-lived intangible assets, we performed audit procedures that included, among others, evaluating the asset groupings used by the Company to perform its impairment assessment, assessing the methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analyses. We compared the significant assumptions to current industry, market and economic trends, to the Company's historical results, to other guideline companies within the same industry, and to other relevant data. In addition, we evaluated management’s ability to estimate [removed: revenues] [added: net sales] by comparing the current year actual [removed: revenues] [added: net sales] for certain brand names or trademarks to the estimates made in the Company’s prior year impairment assessment. We also performed sensitivity analyses of [removed: the] [added: certain] significant assumptions to evaluate the potential change in the fair values of the brand names and trademarks resulting from hypothetical changes in underlying assumptions. We [removed: involved] [added: used] an internal valuation specialist to assist in our evaluation of the methodologies used and significant assumptions and inputs used [added: by the Company] to determine the [added: estimated] fair value of certain brand names and trademarks. | | |

| *Description of the Matter* | | | During [removed: 2020,] [added: fiscal 2021,] the Company completed its acquisition of [removed: the parent company of Cholula Hot Sauce (“Cholula”)] [added: FONA International, LLC] for net consideration of [removed: $803] [added: $708] million, and recognized identifiable intangible assets of $401 million, as disclosed in Note 2 to the consolidated financial statements. The transaction was accounted for as a business combination. Auditing the Company's purchase accounting for its acquisition of [removed: Cholula] [added: FONA International, LLC] was complex due to the significant estimation required by management to determine the fair value of the acquired intangible assets, which [removed: principally] consisted of [removed: brand names] [added: customer relationships, trade names,] and [removed: trademarks.] [added: intellectual property.] The estimation complexity was primarily due to the valuation models used to measure the fair value of the intangible assets and the sensitivity of the respective fair values to the significant underlying assumptions. The significant assumptions used to estimate the fair value of the intangible assets included discount rates, royalty [removed: rates] [added: rates, customer attrition,] and certain assumptions that form the basis of the forecasted results [removed: (e.g., revenue growth rates] [added: (e.g. net sales] and operating profit [removed: margin).] [added: metrics).] These significant assumptions are forward-looking and could be affected by future economic and market conditions. | | |

| for the year ended November 30 (millions except per share data) | | | [removed: 2020] [added: 2021] | | | [removed: 2019] [added: 2020] | | | [removed: 2018] [added: 2019] | | |

| Net sales | | | $ | [removed: 5,601.3] [added: 6,317.9] | | $ | [removed: 5,347.4] [added: 5,601.3] | | $ | [removed: 5,302.8] [added: 5,347.4] | |

| Cost of goods sold | | | [removed: 3,300.9] [added: 3,823.3] | | | [removed: 3,202.1] [added: 3,300.9] | | | [removed: 3,209.5] [added: 3,202.1] | | |

| Gross profit | | | [removed: 2,300.4] [added: 2,494.6] | | | [removed: 2,145.3] [added: 2,300.4] | | | [removed: 2,093.3] [added: 2,145.3] | | |

| Selling, general and administrative expense | | | [removed: 1,281.6] [added: 1,404.1] | | | [removed: 1,166.8] [added: 1,281.6] | | | [removed: 1,163.4] [added: 1,166.8] | | |

| Transaction and integration expenses | | | [removed: 12.4] [added: 29.0] | | | [removed: —] [added: 12.4] | | | [removed: 22.5] [added: —] | | |

| Special charges | | | [removed: 6.9] [added: 46.4] | | | [removed: 20.8] [added: 6.9] | | | [removed: 16.3] [added: 20.8] | | |

| Operating income | | | [removed: 999.5] [added: 1,015.1] | | | [removed: 957.7] [added: 999.5] | | | [removed: 891.1] [added: 957.7] | | |

| Interest expense | | | [removed: 135.6] [added: 136.6] | | | [removed: 165.2] [added: 135.6] | | | [removed: 174.6] [added: 165.2] | | |

| Other income, net | | | [removed: 17.6] [added: 17.3] | | | [removed: 26.7] [added: 17.6] | | | [removed: 24.8] [added: 26.7] | | |

| Income from consolidated operations before income taxes | | | [removed: 881.5] [added: 895.8] | | | [removed: 819.2] [added: 881.5] | | | [removed: 741.3] [added: 819.2] | | |

| [removed: Income] [added: Total income] tax expense (benefit) | | | [removed: 174.9] [added: $] | [added: 192.7] | | [removed: 157.4] [added: $] | [added: 174.9] | | [removed: (157.3)] [added: $] | [added: 157.4] | |

| Net income from consolidated operations | | | [removed: 706.6] [added: 703.1] | | | [removed: 661.8] [added: 706.6] | | | [removed: 898.6] [added: 661.8] | | |

| Income from unconsolidated operations | | | [removed: 40.8] [added: 52.2] | | | [removed: 40.9] [added: 40.8] | | | [removed: 34.8] [added: 40.9] | | |

| Net income | | | $ | [removed: 747.4] [added: 755.3] | | $ | [removed: 702.7] [added: 747.4] | | $ | [removed: 933.4] [added: 702.7] | |

| Earnings per share–basic | | | $ | [removed: 2.80] [added: 2.83] | | $ | [removed: 2.65] [added: 2.80] | | $ | [removed: 3.55] [added: 2.65] | |

| Earnings per share–diluted | | | $ | [removed: 2.78] [added: 2.80] | | $ | [removed: 2.62] [added: 2.78] | | $ | [removed: 3.50] [added: 2.62] | |

| for the year ended November 30 (millions) | | | [removed: 2020] [added: 2021] | | | [removed: 2019] [added: 2020] | | | [removed: 2018] [added: 2019] | | |

| Net income attributable to non-controlling interest | | | [removed: 4.3] [added: 8.0] | | | [removed: 1.9] [added: 4.3] | | | [removed: 3.3] [added: 1.9] | | |

| Unrealized components of pension and other postretirement plans [removed: (including curtailment gains of $18.0 for 2018)] | | | [removed: (80.4)] [added: 134.8] | | | [removed: (149.8)] [added: (80.4)] | | | [removed: 72.6] [added: (149.8)] | | |

| Currency translation adjustments | | | [removed: 89.7] [added: (68.8)] | | | [removed: (25.5)] [added: 89.7] | | | [removed: (119.8)] [added: (25.5)] | | |

| Change in derivative financial instruments | | | [removed: (0.9)] [added: 1.1] | | | [removed: 1.1] [added: (0.9)] | | | [removed: 2.3] [added: 1.1] | | |

| Deferred taxes | | | [removed: 18.1] [added: (30.2)] | | | [removed: 33.2] [added: 18.1] | | | [removed: (17.2)] [added: 33.2] | | |

| Gregory P. Repas | | |

January 27, 2022


January 27, 2022

| Net income | | | $ | 755.3 | | $ | 747.4 | | $ | 702.7 | |

| Trade accounts receivable, net of allowances | | | 549.5 | | | 528.5 | | |

| for the year ended November 30 (millions) | | | 2021 | | | 2020 | | | 2019 | | |

| Net income | | | $ | 755.3 | | $ | 747.4 | | $ | 702.7 | |

| Asset impairment included in special charges | | | 17.2 | | | — | | | — | | |

| Amortization of inventory fair value adjustments associated with acquisitions | | | 6.3 | | | — | | | — | | |

| Proceeds from sale of unconsolidated operation | | | 65.4 | | | — | | | — | | |

| Dividends | | | | | | | | | — | | | (371.5) | | | — | | | — | | | (371.5) | | |

| Shares purchased and retired | | | (0.3) | | | — | | | (7.8) | | | (17.0) | | | — | | | — | | | (24.8) | | |

| Shares issued | | | 0.7 | | | — | | | 15.0 | | | — | | | — | | | — | | | 15.0 | | |

| Balance, November 30, 2021 | | | 17.8 | | | 249.5 | | | $ | 2,055.1 | | $ | 2,782.4 | | $ | (426.5) | | $ | 14.5 | | $ | 4,425.5 | |

exceeding the expected life of the product.

We determine whether a contract is or contains a lease at contract inception based on the presence of identified assets and our right to obtain substantially all the economic benefit from or to direct the use of such assets.

When we determine a lease exists, we record a right-of-use (“ROU”) asset and corresponding lease liability on our consolidated balance sheet.

ROU assets represent our right to use an underlying asset for the lease term.

ROU assets are recognized at the lease commencement date at the value of the lease liability and are adjusted for any prepayments, lease incentives received, and initial direct costs incurred.

We do not record lease contracts with a term of 12 months or less on our consolidated balance sheets.

We recognize fixed lease expense for operating leases on a straight-line basis over the lease term.

For finance leases, we recognize amortization expense over the shorter of the estimated useful life of the underlying assets or the lease term.

In instances of title transfer, expense is recognized over the useful life.

Interest expense on a finance lease is recognized using the effective interest method over the lease term.

Our revenue arrangements generally include a single performance obligation relating to the fulfillment of a customer order, which in some cases are governed by a master sales agreement, for the purchase of our products.

We recognize revenue at a point in time when control of the ordered products passes to the customer, which principally occurs either upon shipment or delivery to the customer or upon pick-up by the customer, depending upon terms included in the particular customer arrangement.

| Net sales | | | $ | 4,396.1 | | $ | 1,191.3 | | $ | 730.5 | | $ | 6,317.9 | |

Inherent in determining our annual tax rate are judgments regarding business plans, planning opportunities, and expectations about future outcomes.

Realization of certain deferred tax assets, primarily net operating loss and other carryforwards, is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods.

We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized.

When assessing the need for valuation allowances, we consider future taxable income and ongoing prudent and feasible tax planning strategies.

Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, we would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding adjustment to our provision for income taxes.

The resolution of tax reserves and changes in valuation allowances could be material to our results of operations for any period but is not expected to be material to our financial position.

This new standard

was adopted effective December 1, 2020 and will be applied upon recognition of any future goodwill impairment charge.

This standard was adopted by the Company on December 1, 2020.

As this ASU did not have a material impact on our consolidated financial statements upon adoption, a cumulative-effect adjustment to retained earnings was not necessary.

Acquisition of FONA International, LLC

At the time of the acquisition, annual sales of FONA were approximately $114 million.

| Christina M. McMullen | | |

| | | | | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Trade accounts receivable, less allowances of $5.2 for 2020 and $5.6 for 2019 | | | 528.5 | | | 502.9 | | |

| Non-cash nonrecurring income tax benefit (related to enactment of the U.S. Tax Act) | | | — | | | — | | | (309.4) | | |

| Non-cash special charges | | | — | | | — | | | 3.0 | | |

| Payment of contingent consideration | | | — | | | — | | | (2.5) | | |

| Purchase of minority interest | | | — | | | — | | | (13.0) | | |

| Balance, November 30, 2017 | | | 20.0 | | | 242.0 | | | $ | 1,672.9 | | $ | 1,166.5 | | $ | (279.5) | | $ | 11.0 | | $ | 2,570.9 | |

| Dividends | | | | | | | | | — | | | (280.5) | | | — | | | — | | | (280.5) | | |

| Adoption of ASU 2018-02 | | | | | | | | | — | | | 20.9 | | | (20.9) | | | — | | | — | | |

| Buyout of minority interest | | | | | | | | | — | | | (12.4) | | | — | | | (0.4) | | | (12.8) | | |

| Shares purchased and retired | | | (0.6) | | | (0.8) | | | (16.8) | | | (67.7) | | | — | | | — | | | (84.5) | | |

| Shares issued | | | 3.4 | | | 0.2 | | | 88.9 | | | — | | | — | | | — | | | 88.9 | | |

The net book value of capitalized software includes $86.7 million and $44.9 million at November

An impairment charge would be recognized to the extent the carrying amount of goodwill exceeds the implied fair value.

We recognize sales as performance obligations are fulfilled when control passes to the customer.

Any taxes collected on behalf of government authorities are excluded from net sales.

| | | | | | | | | | | | | | | |

| 2019 | | | | | | | | | | | | | | |

| 2018 | | | | | | | | | | | | | | |

| Net sales | | | $ | 3,627.5 | | $ | 1,021.1 | | $ | 654.2 | | $ | 5,302.8 | |

*Practical Expedients*

We have elected the following policy elections and practical expedients with respect to revenue recognition:

- Shipping and handling costs — We elected to account for shipping and handling activities that occur before the customer has obtained control of a good as fulfillment activities (i.e., an expense) rather than as a promised service.

Stock-based compensation expense is recognized in accordance with ASC 718, *Compensation – Stock Compensation*.

We adopted the new accounting standard for leases, Accounting Standards Codification Topic 842 *Leases* (ASC 842), as of December 1, 2019 and we elected to do so using a modified retrospective transition method.

That modified retrospective transition method allowed us to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to retained earnings in the opening balance sheet in the period of adoption without restating prior periods.

ASC 842 revised prior practice related to accounting for leases under Accounting Standards Codification Topic 840 *Leases* (ASC 840) for both lessees and lessors and requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (ROU) assets.

Under ASC 842, the lease liability is equal to the present value of lease payments, and the ROU asset is based on the lease liability, subject to adjustments, such as for deferred rent and initial direct costs.

For income statement purposes, ASC 842 retains a dual model similar to ASC 840, requiring leases to be classified as either operating or finance.

For lessees, operating leases result in straight-line expense (similar to prior accounting by lessees for operating leases under ASC 840) while finance leases result in a front-loaded expense pattern (similar to prior accounting by lessees for capital leases under ASC 840).

We elected the package of practical expedients permitted under the transition guidance, which, among other things, allows us to carry forward the historical lease classification.

In addition, we made accounting policy elections to combine the lease and non-lease components for all asset categories other than real estate.

We also made elections to exclude from balance sheet reporting those leases with initial terms of 12 months or less (short-term leases).

Adoption of the new standard resulted in the recording of operating lease ROU assets and lease liabilities of $136.5 million and $140.0 million, respectively, with the difference due to prepaid and deferred rents that were reclassified to the ROU asset value.

No cumulative-effect adjustment to opening retained earnings was required as of December 1, 2019.

The standard did not materially affect our consolidated net income or cash flows for our fiscal year ended November 30, 2020.

See note 7 for further details.

Management’s report on our internal control over financial reporting and the report of our Independent Registered Public Accounting Firm on internal control over financial reporting are included in our [removed: 2020] [added: 2021] financial statements in Item 8 of this Report under the captions entitled “Report of Management” and "Report of Independent Registered Public Accounting Firm.” [removed: No change occurred in our “internal control over financial reporting” (as defined in Rule 13a-15(f)) during our last fiscal quarter which has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.]

During our fourth quarter of 2021, we migrated certain financial processing systems as part of our enterprise resource planning (ERP) replacement program which will enable us to accelerate the transformation of our ways of working and provide a scalable platform for growth.

We expect future migration of financial processing systems throughout all parts of our business over the course of the ERP replacement program through 2025.

In connection with these implementations and resulting business process changes, we continue to enhance the design and documentation of our internal control over financial reporting processes to maintain effective controls over our financial reporting.

| | | |

| --- | --- | --- |

| PART III. | | |

Not applicable.

| | | |

| --- | --- | --- |

| PART III. | | |

Information responsive to this item is set forth in the sections titled “Corporate Governance” and “Election of Directors” in our [removed: 2021] [added: 2022] Proxy Statement, incorporated by reference herein, to be filed within 120 days after the end of our fiscal year.

Information responsive to this item is incorporated herein by reference to the sections titled “Compensation of Directors,” “Compensation Discussion and Analysis,” “Compensation [added: and Human Capital] Committee Report,” “Summary Compensation Table,” “Grants of Plan-Based Awards,” “Narrative to the Summary Compensation Table,” “Outstanding Equity Awards at Fiscal Year-End,” “Option Exercises and Stock Vested in Last Fiscal Year,” “Retirement Benefits,” “Non-Qualified Deferred Compensation,” “Potential Payments Upon Termination or Change in Control,” “Compensation Committee Interlocks and Insider Participation” and “Equity Compensation Plan Information” in the [removed: 2021] [added: 2022] Proxy Statement.

Information responsive to this item is incorporated herein by reference to the sections titled “Principal Stockholders,” “Election of Directors” and “Equity Compensation Plan Information” in the [removed: 2021] [added: 2022] Proxy Statement.

Information responsive to this item is incorporated herein by reference to the section entitled “Corporate Governance” in the [removed: 2021] [added: 2022] Proxy Statement.

Information responsive to this item is incorporated herein by reference to the section titled “Report of Audit [removed: Committee] [added: Committee"] and [removed: Fees] [added: "Fees] of Independent Registered Public Accounting Firm” in the [removed: 2021] [added: 2022] Proxy Statement.

The Consolidated Financial Statements for McCormick & Company, Incorporated and related notes, together with the Report of Management, and the Reports of Ernst & Young LLP dated January [removed: 28, 2021,] [added: 27, 2022,] are included herein in Part II, Item 8.

| | | | (ii) | | | [Summary of Certain Exchange Rights, incorporated by reference from Exhibit 4.1 of McCormick’s Form 10-Q for the quarter ended August 31, 2001, File No. [removed: 0-748,] [added: 1-14920,] as filed with the Securities and Exchange Commission on October 12, 2001.](http://www.sec.gov/Archives/edgar/data/63754/000091205701535224/a2060832zex-4_1.txt) | | | | | |

| | | | [removed: (iv)] [added: (xi)] | | | [Form of [removed: 3.90% notes] [added: 0.90% Notes] due [removed: 2021,] [added: 2026,] incorporated by reference from Exhibit 4.2 of McCormick’s Form 8-K dated [removed: July 5, 2011,] [added: February 11, 2021,] File No. 1-14920, as filed with the Securities and Exchange Commission on [removed: July 8, 2011.](http://www.sec.gov/Archives/edgar/data/63754/000119312511185096/dex42.htm)] [added: February 11, 2021.](http://www.sec.gov/Archives/edgar/data/63754/000119312521038393/d126576dex42.htm)] | | | | | |

| | | | [removed: (v)] [added: (iv)] | | | [Form of 2.70% notes due 2022, incorporated by reference from Exhibit 4.2 of McCormick’s Form 8-K dated August 7, 2017, File No. 1-14920, as filed with the Securities and Exchange Commission on August 11, 2017.](http://www.sec.gov/Archives/edgar/data/63754/000119312517255976/d438862dex42.htm) | | | | | |

| | | | [removed: (vi)] [added: (v)] | | | [Form of 3.50% notes due 2023, incorporated by reference from Exhibit 4.2 of McCormick’s Form 8-K dated August 14, 2013, File No. 1-14920, as filed with the Securities and Exchange Commission on August 19, 2013.](http://www.sec.gov/Archives/edgar/data/63754/000119312513339688/d585005dex42.htm) | | | | | |

| | | | [removed: (vii)] [added: (vi)] | | | [Form of 3.15% notes due 2024, incorporated by reference from Exhibit 4.3 of McCormick’s Form 8-K dated August 7, 2017, File No. 1-14920, as filed with the Securities and Exchange Commission on August 11, 2017.](http://www.sec.gov/Archives/edgar/data/63754/000119312517255976/d438862dex43.htm) | | | | | |

| | | | [removed: (viii)] [added: (vii)] | | | [Form of 3.25% notes due 2025, incorporated by reference from Exhibit 4.2 of McCormick’s Form 8-K dated November 3, 2015, File No. 1-14920, as filed with the Securities and Exchange Commission on November 6, 2015.](http://www.sec.gov/Archives/edgar/data/63754/000119312515370073/d45344dex42.htm) | | | | | |

| | | | [removed: (ix)] [added: (viii)] | | | [Form of 3.40% notes due 2027, incorporated by reference from Exhibit 4.4 of McCormick’s Form 8-K dated August 7, 2017, File No. 1-14920, as filed with the Securities and Exchange Commission on August 11, 2017.](http://www.sec.gov/Archives/edgar/data/63754/000119312517255976/d438862dex44.htm) | | | | | |

| | | | [removed: (x)] [added: (ix)] | | | [Form of 4.20% notes due 2047, incorporated by reference from Exhibit 4.5 of McCormick’s Form 8-K dated August 7, 2017, File No. 1-14920, as filed with the Securities and Exchange Commission on August 11, 2017.](http://www.sec.gov/Archives/edgar/data/63754/000119312517255976/d438862dex45.htm) | | | | | |

| | | | [removed: (xi)] [added: (x)] | | | [Form of [removed: 2.50%](http://www.sec.gov/Archives/edgar/data/63754/000119312520109283/d914567dex42.htm) [](http://www.sec.gov/Archives/edgar/data/63754/000119312520109283/d914567dex42.htm)[Notes] [added: 2.50% Notes] due 2030, incorporated by reference from Exhibit 4.2 of McCormick’s Form 8-K dated April 13, 2020, File No. 1-14920, as filed with the Securities and Exchange Commission on April 16, 2020.](http://www.sec.gov/Archives/edgar/data/63754/000119312520109283/d914567dex42.htm) | | | | | |

| | | | [removed: (xii)] [added: (vi)] | | | [removed: Description of Securities] [added: [Form] of [removed: McCormick & Company, Incorporated,] [added: Long-Term Performance Plan Agreement,] incorporated by reference from Exhibit [removed: 4(xi)] [added: 10(vi)] of McCormick’s Form 10-K for the fiscal year ended November 30, 2019, File No. 1-14920, as filed with the Securities and Exchange Commission on January 28, [removed: 2020.] [added: 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10vi.htm)] | | | | | |

| | | | [removed: (ii)] [added: (iii)] | | | [Non-Qualified Retirement Savings Plan, with an effective date of February 1, 2017, in which directors, officers and certain other management employees participate, a copy of which Plan document was attached as Exhibit 10(v) of McCormick's Form 10-Q for the quarter ended February 28, 2017, File No. 1-14920, as filed with the Securities and Exchange Commission on March 28, 2017, and incorporated by reference herein.*](http://www.sec.gov/Archives/edgar/data/63754/000006375417000020/mkc-2282017xex10.htm) | | | | | |

| | | | [removed: (iii)] [added: (iv)] | | | [The 2007 Omnibus Incentive Plan, in which directors, officers and certain other management employees participate, is set forth in Exhibit A of McCormick’s definitive Proxy Statement dated February 20, 2008, File No. 1-14920, as filed with the Securities and Exchange Commission on February 20, 2008, and incorporated by reference herein](http://www.sec.gov/Archives/edgar/data/63754/000120677408000339/exhibit99-a.htm), as amended by [Amendment No. 1 thereto, which Amendment is incorporated by reference from Exhibit 10(xi) of McCormick’s 10-K for the fiscal year ended November 30, 2008, File No. 1-14920, as filed with the Securities and Exchange Commission on January 28, 2009](http://www.sec.gov/Archives/edgar/data/63754/000119312509013251/dex10xi.htm).* | | | | | |

| | | | [removed: (iv)] [added: (v)] | | | [The Amended and Restated 2013 Omnibus Incentive Plan, in which directors, officers and certain other management employees participate, is incorporated by reference from Exhibit A of McCormick’s definitive Proxy Statement dated February 14, 2019, File No. 1-14920, as filed with the Securities and Exchange Commission on February 14, 2019.*](http://www.sec.gov/Archives/edgar/data/63754/000130817919000003/lmkc2019_def14a.htm) | | | | | |

| | | | [removed: (v)] [added: (vii)] | | | [Form of [removed: Long-Term Performance Plan Agreement](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10vi.htm)[,] [added: Restricted Stock Units Agreement,] incorporated by reference from Exhibit [removed: 10(vi)] [added: 10(vii)] of McCormick’s Form 10-K for the fiscal year ended November 30, 2019, File No. 1-14920, as filed with the Securities and Exchange Commission on January 28, [removed: 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10vi.htm)] [added: 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10vii.htm)] | | | | | |

| | | | [removed: (vi)] [added: (viii)] | | | [Form of Restricted Stock Units [removed: Agreement](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10vii.htm)[,](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10vii.htm) [incorporated] [added: Agreement for Directors, incorporated] by reference from Exhibit [removed: 10(vii)] [added: 10(viii)] of McCormick’s Form 10-K for the fiscal year ended November 30, 2019, File No. 1-14920, as filed with the Securities and Exchange Commission on January 28, [removed: 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10vii.htm)] [added: 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10viii.htm)] | | | | | |

| | | | [removed: (vii)] [added: (x)] | | | [Form of [removed: Restricted] [added: Non-Qualified] Stock [removed: Units] [added: Option] Agreement for [removed: Directors](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10viii.htm)[,] [added: Directors,] incorporated by reference from Exhibit [removed: 10(viii)] [added: 10(x)] of McCormick’s Form 10-K for the fiscal year ended November 30, 2019, File No. 1-14920, as filed with the Securities and Exchange Commission on January 28, [removed: 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10viii.htm)] [added: 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10x.htm)] | | | | | |

| | | | [removed: (viii)] [added: (ix)] | | | [Form of Non-Qualified Stock Option [removed: Agreement](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10ix.htm)[,](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10ix.htm) [incorporated] [added: Agreement, incorporated] by reference from Exhibit 10(ix) of McCormick’s Form 10-K for the fiscal year ended November 30, 2019, File No. 1-14920, as filed with the Securities and Exchange Commission on January 28, 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10ix.htm) | | | | | |

| | | | [removed: (ix)] [added: (xi)] | | | [Form of [removed: Non-Qualified] Stock Option Agreement for [removed: Directors](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10x.htm)[,](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10x.htm) [incorporated] [added: the Value Creation Acceleration Program, incorporated] by reference from Exhibit [removed: 10(x)] [added: 99.1] of McCormick’s Form [removed: 10-K for the fiscal year ended November 30, 2019,] [added: 8-K,] File No. 1-14920, as filed with the Securities and Exchange Commission on [removed: January 28, 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000022/mkc-11302019xex10x.htm)] [added: December 3, 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000211/a2020vcapnqsoagreement.htm)] | | | | | |

| | | | [removed: (x)] [added: (xii)] | | | [Form of [removed: Stock Option Agreement for the Value Creation Acceleration Program](http://www.sec.gov/Archives/edgar/data/63754/000006375420000211/a2020vcapnqsoagreement.htm)[,] [added: Indemnification Agreement,] incorporated by reference from Exhibit [removed: 99.1] [added: 10(xv)] of McCormick’s Form [removed: 8-K,] [added: 10-Q for the quarter ended February 28, 2014,] File No. 1-14920, as filed with the Securities and Exchange Commission on [removed: December 3, 2020.](http://www.sec.gov/Archives/edgar/data/63754/000006375420000211/a2020vcapnqsoagreement.htm)] [added: March 26, 2014.](http://www.sec.gov/Archives/edgar/data/63754/000006375414000013/mkc-2282014xex1015.htm)] | | | | | |

| | | | [removed: (xi)] [added: (xiv)] | | | [removed: [Form of Indemnification Agreement,] [added: [Severance Plan for Executives,] incorporated by reference from Exhibit [removed: 10(xv)] [added: 10(xix)] of McCormick’s Form 10-Q for the quarter ended February 28, [removed: 2014,] [added: 2015,] File No. 1-14920, as filed with the Securities and Exchange Commission on March [removed: 26, 2014.](http://www.sec.gov/Archives/edgar/data/63754/000006375414000013/mkc-2282014xex1015.htm)] [added: 31, 2015](http://www.sec.gov/Archives/edgar/data/63754/000006375415000030/mkc-2282015xex10xix.htm).*] | | | | | |

| | | | [removed: (xii)] [added: (xiii)] | | | [Employment Agreement between McCormick (UK) Limited and Malcolm Swift, incorporated by reference from Exhibit 10.1 of McCormick’s Form 8-K, File No. 1-14920, as filed with the Securities and Exchange Commission on January 29, 2015.](http://www.sec.gov/Archives/edgar/data/63754/000006375415000015/0000063754-15-000015-index.html)* | | | | | |

| | | | [removed: (xiii)] | | | [removed: [Severance Plan for Executives, incorporated] [added: [Articles of Amendment to Charter of McCormick & Company, Incorporated dated April 2, 2021](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) | | | [Incorporated] by reference from [removed: Exhibit 10(xix) of McCormick’s] [added: Exhibit](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) [3](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[(i)](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) [of](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) [McCormick's] Form 10-Q for the [removed: quarter] [added: quar](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[ter] ended [removed: February 28, 2015, File No. 1-14920, as] [added: May 31, 2021](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[,](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) [File](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) [No.](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) [1](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[\-1](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[4](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[92](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[0](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[,](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) [as] filed with the Securities and Exchange Commission [removed: on March 31, 2015](http://www.sec.gov/Archives/edgar/data/63754/000006375415000030/mkc-2282015xex10xix.htm).* | | |] [added: on](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) [July](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm) [](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[1](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[, 20](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm)[21](http://www.sec.gov/Archives/edgar/data/63754/000006375421000120/mkc-5312021xexhibit3i.htm).] | | |

| | | | [removed: (xiv)] [added: (xii)] | | | [removed: [Term Loan Agreement, dated August 7, 2017, by among the Company, Bank] [added: [Form] of [removed: America, N.A., as administrative agent, and the lenders party thereto,] [added: 1.85% Notes due 2031,] incorporated by reference from Exhibit [removed: 10.1] [added: 4.3] of McCormick’s Form 8-K dated [removed: August 7, 2017,] [added: February 11, 2021,] File No. 1-14920, as filed with the Securities and Exchange Commission on [removed: August] [added: February] 11, [removed: 2017.](http://www.sec.gov/Archives/edgar/data/63754/000119312517255976/d438862dex101.htm)] [added: 2021.](http://www.sec.gov/Archives/edgar/data/63754/000119312521038393/d126576dex43.htm)] | | | | | |

| (21) | | | | | | [Subsidiaries of [removed: McCormick](https://www.sec.gov/Archives/edgar/data/63754/000006375421000020/mkc-11302020xex21.htm)] [added: McCormick](https://www.sec.gov/Archives/edgar/data/63754/000006375422000005/mkc-11302021xex21.htm)] | | | Filed herewith | | |

| (23) | | | | | | [Consents of experts and [removed: counsel](https://www.sec.gov/Archives/edgar/data/63754/000006375421000020/mkc-11302020xex23.htm)] [added: counsel](https://www.sec.gov/Archives/edgar/data/63754/000006375422000005/mkc-11302021xex23.htm)] | | | Filed herewith | | |

| | | | (i) | | | [Certification of Lawrence E. Kurzius, Chairman, President and Chief Executive Officer, pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/63754/000006375421000020/mkc-11302020xex311.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/63754/000006375422000005/mkc-11302021xex311.htm)] | | | | | |

| | | | (ii) | | | [Certification of Michael R. Smith, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/63754/000006375421000020/mkc-11302020xex312.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/63754/000006375422000005/mkc-11302021xex312.htm)] | | | | | |

| | | | (i) | | | [Certification of Lawrence E. Kurzius, Chairman, President and Chief Executive Officer, pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/63754/000006375421000020/mkc-11302020xex321.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/63754/000006375422000005/mkc-11302021xex321.htm)] | | | | | |

| | | | (ii) | | | [Certification of Michael R. Smith, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/63754/000006375421000020/mkc-11302020xex322.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/63754/000006375422000005/mkc-11302021xex322.htm)] | | | | | |

| (101) | | | | | | The following financial information from the Annual Report on Form 10-K of McCormick for the year ended November 30, [removed: 2020,] [added: 2021,] filed electronically herewith, and formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Income Statements; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Cash Flow Statements; and (vi) Notes to Consolidated Financial Statements. | | | | | |

| (104) | | | | | | Inline XBRL for the cover page of this Annual Report on Form 10-K of McCormick for the year ended November 30, [removed: 2020,] [added: 2021,] filed electronically herewith, included in the Exhibit 101 Inline XBRL Document Set. | | | | | |

| By: | | | /s/ LAWRENCE E. KURZIUS | | | Chairman, President & | | | January [removed: 28, 2021] [added: 27, 2022] | | |

| By: | | | /s/ MICHAEL R. SMITH | | | Executive Vice President & Chief | | | January [removed: 28, 2021] [added: 27, 2022] | | |

| By: | | | /s/ [removed: CHRISTINA M. MCMULLEN] [added: GREGORY P. REPAS] | | | Vice President & Controller | | | January [removed: 28, 2021] [added: 27, 2022] | | |

| /s/ ANNE L. BRAMMAN | | | | | | January [removed: 28, 2021] [added: 27, 2022] | | |

| /s/ MICHAEL A. CONWAY | | | | | | January [removed: 28, 2021] [added: 27, 2022] | | |

| /s/ FREEMAN A. HRABOWSKI, III | | | | | | January [removed: 28, 2021] [added: 27, 2022] | | |

| /s/ LAWRENCE E. KURZIUS | | | | | | January [removed: 28, 2021] [added: 27, 2022] | | |

| /s/ PATRICIA LITTLE | | | | | | January [removed: 28, 2021] [added: 27, 2022] | | |

| | | | (xiii) | | | [Description of Securities of McCormick & Company, Incorporated](https://www.sec.gov/Archives/edgar/data/63754/000006375422000005/mkc-11302021xex4xiiidescri.htm)[.](https://www.sec.gov/Archives/edgar/data/63754/000006375422000005/mkc-11302021xex4xiiidescri.htm) | | | Filed herewith | | |

| | | | (ii) | | | [2004 Long-Term Incentive Plan, in which officers and certain other management employees participate, is set forth in Exhibit A of McCormick’s definitive Proxy Statement dated February 17, 2004, File No. 1-14920, as filed with the Securities and Exchange Commission on February 17, 2004, and incorporated by reference herein.*](http://www.sec.gov/Archives/edgar/data/63754/000110465904004446/a04-2106_1def14a.htm) | | | | | |

| By: | | | /s/ LAWRENCE E. KURZIUS | | | Chairman, President & | | | January 27, 2022 | | |

| | | | Gregory P. Repas | | | Principal Accounting Officer | | | | | |

| Valuation allowance on net deferred tax assets | | | 31.5 | | | 6.6 | | | (0.4) | | | (5.0) | | | 32.7 | | |

| | | | $ | 36.7 | | $ | 7.8 | | $ | (1.5) | | $ | (5.1) | | $ | 37.9 | |

| | | | Christina M. McMullen | | | Chief Accounting Officer | | | | | |

| Valuation allowance on net deferred tax assets | | | 26.0 | | | 11.1 | | | (2.2) | | | (2.0) | | | 32.9 | | |

| | | | $ | 32.6 | | $ | 12.2 | | $ | (2.8) | | $ | (2.7) | | $ | 39.3 | |