MKC 10-K & 10-Q changes, risk factors and insider trading

Global economic conditions can be uncertain and volatile. Our business and results of operations have in the past been, and may continue to be, adversely affected by changes in global economic conditions including inflation, changes in prevailing interest rates, bank failures, the impact of any potential U.S. federal government shutdown, changes in governmental rules and approaches to taxation, challenges in global supply chains including new or increased tariffs or trade restrictions, fluctuations in foreign currency interest rates, availability of capital markets, consumer spending rates, energy availability and costs, the negative impacts caused by pandemics and other local and global public health issues, as well as the potential impacts of geopolitical uncertainties and international conflicts, including the ongoing conflicts between Russia and Ukraine, the war in the Middle East, rising tensions between China and Taiwan,issues and the effect of governmental initiatives to manage economic conditions. As global economic conditions continue to be volatile or economic uncertainty remains, trends in consumer spending also remain unpredictable and subject to reductions due to credit constraints and uncertainties about the future. We are a manufacturer and distributor of flavor products. As such, many of our products are purchased by our customers based on end-user demand from consumers. Some of the factors that may influence consumer spending include general economic conditions, high levels of unemployment, pandemics and public health crises, higher consumer debt levels, reductions in net worth based on market declines and uncertainty, home foreclosures and reductions in home values, fluctuating interest and foreign currency exchange rates and credit availability, fluctuating fuel and other energy costs, fluctuating commodity prices, inflationary pressure, tax rates and general uncertainty regarding the overall future economic environment. Unfavorable economic conditions may lead customers and consumers to delay or reduce purchases of our products. Consumer demand for our products may not reach our targets, or may decline, when there is an economic downturn or economic uncertainty in our key markets. Our sensitivity to economic cycles and any related fluctuation in customer and consumer demand may have a material negative impact on our business, financial conditions or results of operations.

Damage to our reputation or brand name, loss of brand relevance, increase in use of private label or other competitive brands by customers or consumers, competitive pressures in marketing and technology, or product quality or safety concerns could negatively impact our business, financial condition or results of operations.

Our purchases of raw materials are subject to fluctuations in market price and availability caused by inflationary pressures, weather, growing and harvesting conditions, climate change, market conditions, governmental actions including global trade policies and other factors beyond our control, including outbreaks of illnesses, pandemics or other local or global health issues. The most significant raw materials used by us in our business are dairy products, pepper, garlic, onion, garlic, capsicums (red peppers and paprika), salt, tomato products, sugarsugar, and salts.soybean oil. While future price movements of raw material costs are uncertain, we seek to mitigate the market price risk in a number of ways, including strategic raw material purchases, purchases of raw material for future delivery, customer price adjustments and cost savings from our CCI program.program Weand other streamlining initiatives. In addition, we enter into financial hedging derivative transactions based on forecasted soybean oil purchases. Other than the soybean oil hedging transactions, we generally have not used derivatives to manage the volatility related to this risk. To the extent that we have used derivatives for this purpose, it has not been material to our business. Any actions we take in response to market price fluctuations may not effectively limit or eliminate our exposure to changes in raw material prices. 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.

Political, socio-economic, cultural, and geopolitical (including instability and international conflicts such as the ongoing conflicts between Russia and Ukraine, the war in the Middle East, and rising tensions between China and Taiwan) conditions, as well as disruptions caused by terrorist activities or otherwise, could also create additional risks for regulatory compliance. Although we have adopted rigorous quality assurance and quality control procedures which are designed to ensure the safety of our imported products, we cannot provide assurance that such events will not have a negative impact on our business, financial condition or operating results.

Our ability to make, move, and sell products is critical to our success. Damage or disruption to or reduction or termination of raw material supplies or our manufacturing or distribution capabilities due to weather, climate change, natural disaster, fire, international disputes, geopolitical tensions or conflict, terrorism, cyber-attack, health epidemics, pandemics or other contagious outbreaks, governmental restrictions or mandates, strikes, import/export restrictions, global trade policies, or other factors could impair our ability to manufacture or sell our products. Production of certain of our products is highly concentrated, and some 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.

We may not be able to increase prices to fully offset inflationary and other 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. During recent years, weWe have experienced significantlyinflation elevatedof commodity and supply chain costs, including the costs of raw materials, packaging materials, labor, energy, fuel, transportation and other inputs necessary for the production and distribution of our products, and we expect inflation to continue in 20252026 at a similar level to that experienced in 2024 but at a more modest rate than experienced since 2022.2025. In addition, many of these materials and costs 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 requirementsrequirements, global trade policies (including tariffs and retaliatory measures), armed hostilities (including the ongoing geopolitical conflicts between Russia and Ukraine and Israel and Hamas) and other factors beyond our control.

Our attempts to offset these cost pressures, such as through increases in the selling prices of some of our products, may not be successful. Higher product prices may result in reductions in sales volume. Consumers may be less willing to pay a price differential for our branded products and may increasingly purchase lower-priced offerings, or may forego some purchases altogether, during an economic downturn or times of increased inflationary pressure. To the extent that price increases or packaging size decreases are not sufficient to offset these increased costs adequately or in a timely manner, and/or if they result in significant decreases in sales volume, our business, financial condition or operating results may be adversely affected. Furthermore, we may not be able to fully offset any cost increases through our productivity or efficiency initiatives.

OngoingChanging political and geopolitical conditions, including conflicts and the related implications may negatively impact our operations.

The global economy has been negatively impacted by ongoingchanging political and geopolitical conflicts,conditions, including the military conflicts between Russia and Ukraine, the war in the Middle East, as well as rising tensions between China and Taiwan.conflicts. Our business, financial condition and results of operations have been impacted in the past and may be impacted in the future by disruptions in the global economy associated with these changes in political and geopolitical conflicts.conditions. Geopolitical instability has, and could result in, a negative impact on our ability to sell to, ship products to, collect payments from, and support customers in certain regions based on trade restrictions, embargoes and export control law restrictions, and logistics restrictions, and could increase the costs, risks and adverse impacts from supply chain and logistical challenges.

The scope and duration of such conflicts are uncertain, rapidly changing, and hard to predict. While we expect the impacts of these conflicts 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. Further escalationchanges ofin thesepolitical and geopolitical conflicts,conditions, including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain operations. In addition, the effects of thethese ongoingpolitical conflictsand geopolitical conditions could also heighten many of the other risk factors described herein.

We cannot provide assurance that our disaster recovery plan will address all of the issues we may encounter in the event of a disaster or other unanticipated issue, and our business interruption insurance may not adequately compensate us for losses that may occur from any of the foregoing. In the event that a natural disaster, terrorist attack or other catastrophic event were to destroy any part of our facilities or interrupt our operations for any extended period of time, or if harsh weather or health conditions prevent us from delivering products in a timely manner, our business, financial condition or operating results could be adversely affected.

From time to time, we may, based on an evaluation of our business portfolio, acquire other businesses and/or divest existing businesses. These acquisitions, such as the additional 25% incremental ownership acquired in McCormick de Mexico on January 2, 2026, joint ventures and divestitures may present financial, managerial and operational challenges, including diversion of management attention from existing businesses, difficulty with integrating or separating personnel and financial and other systems, increased expenses and raw material costs, assumption of unknown liabilities and indemnities, and potential disputes with the buyers or sellers. 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. If we are unable to consummate such transactions, or successfully integrate and grow acquisitions and achieve contemplated revenue synergies and cost savings, our financial results could be adversely affected. Additionally, joint ventures inherently involve a lesser degree of control over business operations, thereby potentially increasing the financial, legal, operational, and/or compliance risks.

We are exposed to fluctuations in foreign currency in the following main areas: cash flows related to raw material purchases; the translation of foreign currency earnings to U.S. dollars; the effects of foreign currency on loans between subsidiaries and unconsolidated affiliates and on cash flows related to repatriation of earnings of unconsolidated affiliates. We have both translation and transaction exposures to the fluctuation of exchange rates. Translation exposures relate to exchange rate impacts of measuring income statements of foreign subsidiaries that do not use the U.S. dollar as their functional currency. Transaction exposures relate to the impact from input costs that are denominated in a currency other than the local reporting currency and the revaluation of transaction-related working capital balances or loans between subsidiaries and unconsolidated affiliates denominated in currencies other than the functional currency. Historically, weakening of certain foreign currencies versus the U.S. dollar have resulted in significant foreign exchange impacts leading to lower net sales, net earnings and cash flows. Primary exposures include the U.S. dollar versus the Euro, British pound sterling, Chinese renminbi, Canadian dollar, Australian dollar, Polish zloty, Singapore dollar, Swiss franc, and Mexican peso, as well as the Euro versus the British pound sterling and Australian dollar, and Polish zloty, and finally the Canadian dollar versus British pound sterling.zloty. We routinely enter into foreign currency exchange contracts to facilitate managing certain of these foreign currency risks. However, these contracts may not effectively limit or eliminate our exposure to a decline in operating results due to foreign currency exchange changes. Therefore, we cannot provide assurance that future exchange rate fluctuations will not have a negative impact on our business, financial position or operating results.

In addition, we could be criticized by environmental,those socialopposed to environmental and governancesustainability (ESG) detractorsefforts for the scope or nature of our ESG initiatives or goals or for any revisions to these goals. We could also be subjected to negative responses by governmental actors (such as anti-ESG legislation or retaliatory legislative treatment) or consumers (such as boycotts or negative publicity campaigns) that could adversely affect our reputation, business, financial performance and growth.

ESG issues, including those related to climateClimate change and sustainability,sustainability issues may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

Companies across all industries are facing increasing scrutiny relating to their ESGsustainability policies. If we are unable to meet our ESG goals or evolving investor, industry or stakeholder expectations and standards,standards related to these issues, or if we are perceived to have not responded appropriately to the growing concern for ESGthese issues or negative incidents, it could erode customer confidence and customers and consumers may choose to stop purchasing our products or purchase products from another company or a competitor, and our reputation, business or financial condition may be adversely affected. Increased focus and activism on ESGthese topics may hinder our access to capital, as investors may reconsider their capital investment as a result of their assessment of our ESG practices. In particular, these constituencies are increasingly focusing on environmental issues, including climate change, water use, deforestation, plastic waste, and other sustainability concerns. Changing consumer preferences may result in increased demands regarding plastics and packaging materials, including single-use and non-recyclable plastic packaging, and other components of our products and their environmental impact on sustainability; a growing demand for natural or organic products and ingredients; or increased consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of ingredients or substances present in certain consumer products. These demands could impact the profitability of some of our products or cause us to incur additional costs, to make changes to our operations to make additional commitments, set targets or establish additional goals and take actions to meet them, which could expose us to market, operational and execution costs or risk.

In addition to environmental issues these constituencies are also focused on social and other governance issues, including matters such as, but not limited to, human capital and social issues. We have established diversity,initiatives equity and inclusion goals as part of our ESG initiative. Our initiativesthat extend from individuals to entire communities, including those we serve and, just as importantly, those from which we source. Failure to attract, hire, develop, motivate and retain highlythe qualified and diversebest executive and employee talent, especially in light of changing worker expectations and talent marketplace variability regarding flexible and hybrid work models, to meet our goals relating to fostering a diverse and inclusive culture orfor toall adequately address potential increased scrutiny of our diversity, equity and inclusion initiativesemployees could impact our ability to achieve our business objectives and adversely affect our future success.

Concern over climate change, including plastics and packaging materials, in particular, may result in new or increased legal and regulatory requirements. Increased regulatory requirements related to environmental causes, and related ESG disclosure rules may result in increased compliance costs or increased costs of energy, raw materials or compliance with emissions standards, which may cause disruptions in the manufacture of our products or an increase in operating costs. Any failure to achieve our ESG goals or a perception (whether or not valid) of our failure to act responsibly with respect to the environmental, human capital, or social issues, or to effectively respond to new, or changes in, legal or regulatory requirements concerning environmental or other ESGsustainability matters, or increased operating or manufacturing costs due to increased regulation or environmental causes could adversely affect our business and reputation and increase risk of litigation.

On November 30, 2025, we had total outstanding variable rate debt of approximately $351.8 million at a weighted-average interest rate of approximately 4.06%. The interest rates under our revolving credit facilities can vary based on our credit ratings. We also regularly access the commercial paper markets for ongoing funding requirements. A downgrade in our credit ratings would increase our borrowing costs and could affect our ability to issue commercial paper. Additionally, disruptions in the commercial paper market or other effects of volatile economic conditions on the credit markets could also reduce the amount of commercial paper that we could issue and raise our borrowing costs. Our policy is to manage our interest rate risk by entering into both fixed and variable rate debt arrangements. We also use interest rate swaps to minimize worldwide financing cost and to achieve a desired mix of fixed and variable rate debt. On November 30, 2024,2025, we had total outstanding fixed to variable interest rate swaps with a notional value of $600$500 million. We utilize derivative financial instruments to enhance our ability to manage risk, including interest rate exposures that exist as part of our ongoing business operations. We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instruments. Our use of derivative financial instruments is monitored through regular communication with senior management and the utilization of written guidelines. However, our use of these instruments may not effectively limit or eliminate our exposure to changes in interest rates. Therefore, we cannot provide assurance that future credit rating or interest rate changes will not have a material negative impact on our business, financial position or operating results.

Risks Related to Intellectual Property, Information Technology, and Cyber-SecurityCybersecurity

Furthermore, our information technology systems, and the systems of our customers, vendors, suppliers, and other third-party service providers, are subject to cyber-attacks or other security incidents including computer viruses or other malicious codes, phishing attacks, unauthorized access attempts, cyber extortion, business email compromise, deepfake or social engineering schemes, denial of service attacks, hacking, ransomware, or other cyberattacks attempting to exploit vulnerabilities. Cybercriminals have increasingly demonstrated advanced capabilities, such as use of zero-day vulnerabilities, and rapid integration of new technology such as generative artificial intelligence. Continued geographical turmoil, including the ongoing conflicts between Russia and Ukraine, the war in the Middle East, and rising tensions between China and Taiwan, has heightened the risk of cyberattack. Such incidents could result in unauthorized access to information including customer, consumer or other company confidential data as well as disruptions to operations. Continued geopolitical conflicts have overall heightened the risk of cyberattacks. We, and the third-parties we do business with, have experienced in the past, and expect to continue to experience, cybersecurity threats and attacks, although to date none had a material impact on our operations or business. 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, 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. We believe that these preventative actions provide adequate measures of protection against security breaches and generally reduce our cybersecurity risks. However, cyber-threats are constantly evolving, are becoming more sophisticated including through the increased adoption of artificial intelligence and are being made by groups of individuals with a wide range of expertise and motives, which increases the difficulty of detecting and successfully defending against them. There can be no assurance that these measures will prevent or limit the impact of a future incident. Moreover, the development and maintenance of these measures requiresrequire continuous monitoring as technologies change and efforts to overcome security measures evolve.evolve and leverage artificial intelligence. Additionally, we rely on services provided by third-party vendors for certain information technology processes and functions, which makes our operations vulnerable to a failure by any one of these vendors to perform adequately or maintain effective internal controls. If we are unable to prevent or adequately respond to and resolve an incident, it may have a material, negative impact on our operations or business reputation, and we may experience other adverse consequences such as loss of assets, remediation costs, litigation, regulatory investigations, and the failure by us to retain or attract customers following such an event.

Food products are extensively regulated in most of the countries in which we sell our products. We are subject to numerous laws and regulations relating to the growing, sourcing, manufacturing, storage, labeling, marketing, advertising and distribution of food products, as well as laws and regulations relating to financial reporting requirements, the environment, consumer protection, product design, competition, anti-corruption, privacy, machine learning and artificial intelligence, relations with distributors and retailers, foreign supplier verification, customs and trade laws, including the import and export of products and product ingredients, employment, and health and safety. The recent changeChanges in the presidential administration could impact U.S.global trade andpolicies, otherincluding policiestariffs, have impacted and resultmay incontinue substantial changes that mayto impact our business.financial condition or results of operations. Enforcement of existing laws and regulations, including changes in the enforcement priorities of regulators, changes in legal requirements, and/or evolving interpretations of existing regulatory requirements may result in increased compliance costs and create other obligations, financial or otherwise, that could adversely affect our business, financial condition or operating results. Increased regulatory scrutiny of, and increased litigation involving, product claims and concerns regarding the attributes of food products and ingredients may increase compliance costs and create other obligations that could adversely affect our business, financial condition or operating results. Governments may also impose requirements and restrictions that impact our business, such as labeling disclosures pertaining to ingredients. For example, "Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986," in California exposes all food companies to the possibility of having to provide warnings on their products in that state. If we were required to add warning labels to any of our products or place warnings in locations where our products are sold in order to comply with Proposition 65, the sales of those products and other products of our company could suffer, not only in those locations but elsewhere. We are subject to continued legislative and regulatory developments with respect to food ingredients at the state and federal levels, as well as related changes in consumer expectations and behavior. In April 2025, the Food and Drug Administration (FDA) called on the industry to phase out all “petroleum-based synthetic dyes” from the nation’s food supply, and in May 2025, the Make America Healthy Again (MAHA) Commission published an assessment report discussing factors contributing to chronic childhood disease including diet, environmental exposure, lack of physical activity and healthcare. The MAHA Commission publicly released its strategy report, setting forth certain recommendations for addressing chronic childhood disease, in September 2025. While the effects of these proposals remain uncertain at this time, changes to laws and regulations could impact our business, financial condition and results of operations.

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 affects all member states of the European Economic Area, and the California Consumer Privacy Act (CCPA). and other state comprehensive privacy laws. These types of data privacy laws create a range of compliance obligations for companies that process personal data of certain individuals and increases financial penalties for non-compliance. We expect there will continue to be new, and amendments to existing, laws, regulations and industry standards concerning privacy, data protection and information security proposed and enacted in the U.S. and outside of the U.S. Our efforts to comply with these privacy and data protection laws may not be successful, or may be perceived to be unsuccessful, which could adversely affect our business in the U.S., the European Union and in other countries.

We are party to a variety of legal claims and proceedings in the ordinary course of business. In addition, we may be subject to additional kinds of claims in the future, including consumer class actions related to privacy and data security and the overall protection of personal data. Since litigation is inherently uncertain, there is no guarantee that we will be successful in defending ourselves against such claims or proceedings, or that management’s assessment of the materiality or immateriality of these matters, including any reserves taken in connection with such matters, will be consistent with the ultimate outcome of such claims or proceedings. In the event that management’s assessment of the materiality or immateriality of current claims and proceedings proves inaccurate, or litigation that is material arises in the future, there may be a material adverse effect on our financial condition. Any adverse publicity resulting from allegations made in litigation claims or legal or administrative proceedings (even if untrue) may also adversely affect our reputation. These factors and others could have an adverse impact on our business and financial condition or damage our reputation.

As a global business, our tax rate from period to period can be affected by many factors, including changes in tax legislation, our global mix of earnings, the tax characteristics of our income, acquisitions and dispositions, adjustments to our reserves related to uncertain tax positions, changes in valuation allowancesallowances, and the portion of the income of international subsidiaries that we expect to remit to the U.S. and that will be taxable.

McCormick is a global leader in flavor. We manufacture, market, and distribute spices, seasoning mixes, condimentscondiments, and other flavorful products to the entire food and beverage industry–retailers, food manufacturersmanufacturers, and foodservice businesses. We manage our business in two operating segments, consumerConsumer and flavorFlavor solutions,Solutions, as described in Item 1 of this report.

In 2024,2025, we achieved net sales growth of 0.9%1.7% overas thecompared 2023to level2024 due to the following factors:

•Volume and product mix favorably impacted our net sales growth by 0.3%, exclusive of divestitures.1.2%. The consumerConsumer segment experienced favorable volume and product mix of 0.8%2.1% and the flavorFlavor solutionsSolutions segment experienced unfavorable volume and product mix of 0.3%.0.2%.

•DivestituresPricing negativelyfavorably impacted our net sales by 0.2%.0.7%.

Diluted earnings per share was $2.93 in 2025 and $2.92 in 2024 and $2.52 in 2023. In 2024, diluted earnings per share growth was driven primarily by higher operating income,income whichand includeddecreased interest expense, partially offset by an increase in the effectseffective oftax lowerrate, higher special charges, ana increasedecrease in other income, and a decrease in income from unconsolidated operations and a decrease in the effective tax rate.operations. Special charges lowered earnings per share by $0.03$0.07 and $0.18$0.03 in 20242025 and 2023,2024, respectively. Excluding the effects of special charges, adjusted diluted earnings per share was $3.00 in 2025, compared to $2.95 in 2024, compared to $2.70 in 2023, representing an increase of 9.3%.1.7%.

In 2025,2026, we expect net sales to grow between 0%13% and 2%17% compared to our 2024 net sales,2025, including an 11% to 13% increase as a result of the acquisition of a controlling interest in McCormick de Mexico and a 1% unfavorablefavorable impact from foreign currency rates, or to grow from 1% to 3% on an organic basis. We anticipate that net sales in 2025 will benefit from favorable volume and product mix.mix and pricing.

We estimate that our 20252026 adjusted effective tax rate, including the net favorable impact of anticipated discrete tax items, although at a lower amount than in 2024,2025, will be 22.0%24.0% as compared to 20.5%21.5% in 2024. Excluding projected taxes associated with special charges, we estimate that our adjusted effective tax rate will be approximately 22.0% in 2025, as compared to an adjusted effective tax rate of 20.5% in 2024.2025.

Diluted earnings per share was $2.92 in 2024. Diluted earnings per share for 2025 is projected to range from $2.99 to $3.04. Excluding the per share impact of special charges, adjusted diluted earnings per share was $2.95$3.00 in 2024.2025. Adjusted diluted earnings per share, excluding an estimated per share impact from special charges of $0.04, is projected to range from $3.03$3.05 to $3.08$3.13 in 2025.2026. We expect adjusted diluted earnings per share to increase by 3%2% to 5%, which includes a 2%1% unfavorablefavorable impact from currency rates, or to increase by 5%1% to 7%4% on a constant currency basis over adjusted diluted earnings per share of $2.95 in 2024.basis.

Sales for 20242025 increased by 0.9%1.7% from 20232024 and by 0.8%1.9% on an organic basis (that is, excluding the impact of divestitures and foreign currency exchange as more fully described under the caption, Non-GAAP Financial Measures). Pricing actions,actions primarilyfavorably implemented during the prior year, increasedimpacted sales by 0.5% as compared to 2023.0.7%. Favorable volume and product mix increased sales by 0.3%.1.2% Thedriven divestitureby favorable volume and product mix from our Consumer segment of 2.1% offset by unfavorable volume and product mix from our GiottiFlavor canningSolutions businesssegment unfavorablyof impacted0.2%. Foreign currency rates decreased sales by 0.2% as compared to the prior year. Sales were impacted by favorable foreign currency rates that increased sales by 0.3% in 2024 as compared to the prior year. Excluding divestitures and the impact of foreign currency rates, our organic sales growth was 0.8%, as compared to 2023.0.2%.

We regularly evaluate whether to implement changes to our organization structure to reduce fixed costs, simplify or improve processes, and improve our competitiveness, and we expect to continue to evaluate such actions in the future. From time to time, those changes are of such significance in terms of both up-front costs and organizational/ structural impact that we obtain advance approval from our Management Committee and classify expenses related to those changes as special charges in our financial statements.

During 2024,2025, we recorded $9.5$21.1 million of special charges, consistingincluding transaction and integration expenses. Those expenses consisted principally of $4.5$15.9 million of employee severance and related benefits associated with our SG&A streamlining actions, $3.3 million associated with theother GOE programactions and $5.0$1.9 million associated with the transition of atransaction manufacturingand facilityintegration in EMEA.costs.

During 2023,2024, we recorded $61.2$9.5 million of special charges, consisting principally of $42.8$4.5 million associated with the GOEGlobal program,Operating $8.7Effectiveness program and $5.0 million associated with the transition of a manufacturing facility in EMEA, and streamlining actions of $8.8 million in the Americas region and $0.9 million in the EMEA region.EMEA.

Details with respect to the composition of special chargescharges, including transaction and integration expenses, are included in the accompanying notes to our financial statements contained in Item 8 of this report.

Interest expense wasdecreased $1.2by $13.2 million higher in 2024 as2025 compared to the prior year, asdue to a reduction in average borrowing levels wasand more than offset by the effects of higherlower interest rates on borrowings. Other income increased $3.5 million as compared to the prior period, driven by an increase in interest income, partially offset by a higher level of foreign currency exchange losses.

The effective tax rate for 20242025 was 20.5%,21.4%, compared to 21.8%20.5% in 2023. This reduction in our effective tax rate is2024, primarily duedriven toby athe higherlower level of net discrete tax benefits recorded for 2024.2025. Specifically, net discrete tax benefits amounted to $27.6 million in 2025, a decrease of $4.1 million from $31.7 million in 2024, an increase of $22.1 million from $9.6 million in 2023.2024.

Income from unconsolidated operations, which is presented net of the elimination of earnings attributable to non-controlling interests, increaseddecreased $17.8$2.0 million in 2024 from the prior year. The increase was2025, driven by higherthe earningsresults of our largest joint venture, McCormick de Mexico.Mexico, where unfavorable impacts from foreign exchange rates were partially offset by improved operating results. We own 50% of most of our unconsolidated joint ventures, includingventures. McCormick de Mexico, thatMexico comprised 93% and 95% of the income of our unconsolidated operations forin both 20242025 and 2023.2024, respectively.

We reported diluted earnings per share of $2.92 in 2024, compared to $2.52 in 2023. The following table below outlines the major components of the change in diluted earnings per share from 20232024 to 2024.2025.

We measure the performance of our business segments based on operating income, excluding special charges and transaction and integration expenses related to our acquisitions, as applicable.charges. See Note 15 of notes to our consolidated financial statements for additional information on our segment measures as well as for a reconciliation by segment of operating income, excluding special charges and transaction and integration expenses related to our acquisitions.charges. In the following discussion, we refer to our previously described measure of segment profit as "Segment operating income."

In the EMEA region, consumer2025, sales of our Consumer segment increased 7.3%by in 20242.6% as compared to 20232024 and increased by 4.3%2.4% on an organic basis. Pricing actions, principally implemented in the prior year, increased sales by 0.6% as compared to 2023. Favorable volume and product mix increased sales by 3.7% from the prior year level,2.1%, driven by growth in our major markets across theirall productregions. categories.Favorable pricing increased sales by 0.3%. The favorable impact of foreign currency exchange rates increased sales by 3.0% compared to 20230.2% and is excluded from our measure of sales growth of 4.3%2.4% on an organic basis.

In the APACAmericas region, consumerConsumer segment sales decreasedincreased 5.1%2.0% in 20242025 as compared to 20232024 and decreasedincreased by 4.1%2.3% on an organic basis. PricingUnfavorable actions,pricing principally implemented in the prior year, increaseddecreased sales by 0.8%0.1%. as compared to 2023. UnfavorableFavorable volume and product mix decreasedincreased sales by 4.9%2.4% from the prior year, as slower demand in China was partially mitigateddriven by growth inacross othercore parts of the region.categories. The unfavorable impact fromof foreign currency rates decreased sales by 1.0% compared to the year-ago period0.3% and is excluded from our measure of sales declinegrowth of 4.1%2.3% on an organic basis.

InSales theof APACour region,Flavor flavorSolutions solutions salessegment increased 4.1%0.5% in 20242025 as compared to 20232024 and increased by 5.1%1.1% on an organic basis. PricingFavorable actions,pricing principallyincreased implementedsales by 1.3% in 2025 driven by pricing actions in the priorAmericas year,region. favorably impacted sales by 0.9% as compared to the prior year period. FavorableUnfavorable volume and product mix increaseddecreased sales by 4.2%,0.2% driven by higherthe salesAmericas toand quickEMEA serviceregions restaurantpartially customersoffset by growth in China.the AnAPAC region. The unfavorable impact fromof foreign currency rates decreased sales by 1.0% compared to 20230.6% and is excluded from our measure of sales growth of 5.1%1.1% on an organic basis.

Segment operating income for our flavorFlavor solutionsSolutions segment increased by $40.8$29.6 million, or 14.1%,9.0%, in 20242025 as compared to 2023. The increase in segment operating income was2024 driven by the effects of an increase in gross profit primarilyand duelower toSG&A expense. The increase in gross profit was driven by the impacts of favorable pricing actions, product mix and CCI-led and GOE cost savingssavings, which more thanpartially offset by increased commodity costs including the impact of tariffs, and conversion costs andincluding thecosts higherto levelsupport ofincreased capacity for future growth. The decrease in SG&A expenses,expense allwas asdriven comparedprimarily toby thelower priorperformance-based year.employee compensation expense, lower distribution expense, and CCI-led cost savings, partially offset by higher selling and marketing costs. Segment operating margin for our flavor solutions segment increased by 14090 basis points in 2024 to 11.5%, driven by a higher segment gross margin, as previously described, which was partially offset by a higher level of SG&A as a percentage of net sales, as compared to 2023.12.4%. On a constant currency basis, segment operating income for our flavor solutions segment increased by 14.5% in 2024, as compared to 2023.10.7%.

The following tables include financial measures of organic net sales, adjusted gross profit, adjusted gross profit margin, adjusted operating income, adjusted operating income margin, adjusted income tax expense, adjusted income tax rate, adjusted net income, and adjusted diluted earnings per share. These represent non-GAAP financial measures which are prepared as a complement to our financial results prepared in accordance with United States generally accepted accounting principles. These financial measures exclude the impact, as applicable, of the following:

On February 20, 2026, the U.S. Supreme Court ruled that certain tariffs imposed under IEEPA by the executive branch are not lawful. On March 4, 2026, the CIT ordered CBP to begin the refund process for all importers who were subject to IEEPA tariffs. On April 20, 2026, CBP established an online portal through which companies can submit IEEPA tariff refund requests. We submitted our refund request on April 28, 2026, which is described in Note 1 of the notes to our accompanying condensed consolidated financial statements. The CIT order has been appealed and weWe will continue to monitor U.S. tariff-related developments for further updates and any associated impacts on our consolidated financial statements.

In the secondthird quarter of 2026, we achieved net sales growth of 16.7%17.4% as compared to the same quarter of 2025, due to the following factors:

Operating income was $276.4$217.0 million in the secondthird quarter of 2026, compared to $245.8$288.7 million in the same period of 2025, reflecting ana increasedecrease of 12.4%.24.8%. Our gross profit margin increased by 270190 basis points driven by the impacts of the McCormick de Mexico acquisition, favorable pricing, the IEEPA tariff refund, and cost savings from the Company's Comprehensive Continuous Improvement (CCI) program, partially offset by increased commodity costs and higher freight costscosts, dueincluding tothe impact of the conflict in the Middle East. Selling, general, and administrative (SG&A) expense as a percentage of sales increased by 90110 basis points, primarily driven by the impact of the McCormick de Mexico acquisition and increased investments in technology. Excluding special charges, adjusted operating income was $336.4$358.5 million in the secondthird quarter of 2026, reflecting an increase of 30.1%22.1% compared to $258.6$293.6 million in the 2025 period, primarily driven by the impact of the McCormick de Mexico acquisition and the IEEPA tariff refund.acquisition. In constant currency, adjusted operating income increased by 27.3%.20.9%.

Diluted earnings per share was $0.56$0.36 and $0.65$0.84 in the secondthird quarters of 2026 and 2025, respectively. Special charges, including transaction and integration costs,costs and impairments of long-lived assets, lowered diluted earnings per share by $0.24$0.50 and $0.04$0.01 in the secondthird quarters of 2026 and 2025, respectively. Excluding the effects of special charges, adjusted diluted earnings per share was $0.80$0.86 and $0.69$0.85 in the secondthird quarters of 2026 and 2025, respectively. The increase in adjusted diluted earnings per share was driven by favorable operating incomeincome, andpartially aoffset decreaseby an increase in the effective tax rate, partially offset by lower income from unconsolidated operations, higher income attributable to noncontrolling interests,and an increase in interest expense, and a decrease in other income.expense.

A detailed review of our secondthird quarter 2026 performance compared to the secondthird quarter of fiscal 2025 appears in the section titled “Results of Operations – Company” and “Results of Operations – Segments.” For a reconciliation of non-GAAP to reported amounts, see the subsequent discussion under the heading “Non-GAAP Financial Measures.”

In 2026, we expect net sales to grow between 13% and 17% compared to 2025, including an 11% to 13% increase as a result of the acquisition of a controlling interest in McCormick de Mexico and a 1% favorable impact from foreign currency rates, or to grow from 1% to 3% on an organic basis. We anticipate that net sales will benefit from favorable volumepricing, andwhile productvolumes mixare andexpected pricing.to remain flat.

Adjusted diluted earnings per share was $3.00 infor the year ended November 30, 2025. Adjusted diluted earnings per share is projected to range from $3.05 to $3.13 in 2026. We expect adjusted diluted earnings per share to increase by 2% to 5%, which includes a 1% favorable impact from currency rates, or to increase by 1% to 4% on a constant currency basis.

Sales for the secondthird quarter of 2026 increased by 16.7%17.4% from the same period in 2025 and increased by 1.7%1.9% on an organic basis (that is, excluding the impact of acquisitions and foreign currency exchange as more fully described under the caption, Non-GAAP Financial Measures). The acquisition of McCormick de Mexico added 12.3%14.6% to net sales. Pricing favorably impacted sales by 2.2% with favorable pricing from our Consumer and Flavor Solutions segments of 2.7%2.2% and 1.5%,2.2%, respectively. Unfavorable volume and product mix decreased sales by 0.5%0.3% with unfavorable volume and product mix from our Consumer segment of 1.9%1.1% partially offset by favorable volume and product mix from our Flavor Solutions segment of 1.4%.0.8%. Foreign currency rates increased sales by 2.7%.0.9%.

Sales for the sixnine months ended MayAugust 31, 2026 increased by 16.7%16.9% from the same period in 2025 and increased by 1.4%1.6% on an organic basis. The acquisition of McCormick de Mexico added 12.4%13.1% to net sales. Pricing favorably impacted sales by 2.1% with favorable pricing from our Consumer and Flavor Solutions segments of 2.5%2.4% and 1.5%,1.7%, respectively. Unfavorable volume and product mix decreased sales by 0.7%0.5% with unfavorable volume and product mix from our Consumer segment of 1.2% partially offset by favorable volume and product mix from our Flavor Solutions segment of 0.2%.0.4%. Foreign currency rates increased sales by 2.9%.2.2%.

Gross profit for the secondthird quarter of 2026 increased by $155.4$149.8 million, or 25.0%,23.2%, from the same period of 2025. Our gross profit margin was 40.2%,39.3%, an increase of 270190 basis points, driven by the impacts of the McCormick de Mexico acquisition, favorable pricing, the IEEPA tariff refund, and cost savings from the Company's CCI program, partially offset by increased commodity costs and higher freight costscosts, dueincluding tothe impact of the conflict in the Middle East.

Gross profit for the sixnine months ended MayAugust 31, 2026 increased by $260.3$410.1 million, or 21.2%,21.9%, from the same period in 2025. Our gross profit margin was 39.0%,39.1%, an increase of 140160 basis points, driven by the impact of the McCormick de Mexico acquisition, which included a step-up of acquired inventory recognized as special charges in Cost of goods sold as the related inventory was sold, favorable pricing, the impact of the IEEPA tariff refund, and cost savings from the Company's CCI program, partially offset by increased commodity costs and higher freight costscosts, dueincluding tothe impact of the conflict in the Middle East. Excluding the impact of special charges included in Cost of goods sold, adjusted gross margin was 39.4%, or an increase of 180190 basis points.

SG&A expense increased by $77.6$83.9 million in the secondthird quarter of 2026 as compared to the same period in 2025, driven primarily by the impact of the McCormick de Mexico acquisition, increased brand marketing expense, and increased investments in technology. SG&A as a percentage of net sales increased by 90110 basis points.

SG&A expense increased by $155.1$239.0 million in the sixnine months ended MayAugust 31, 2026 as compared to the same period in 2025, driven primarily by the impact of the McCormick de Mexico acquisition, increased brand marketing expense, and increased investments in technology. SG&A as a percentage of net sales increased by 70100 basis points.

During the three months ended MayAugust 31, 2026, we recorded $60.0$141.5 million of special charges, including transaction and integration expenses. Those expenses consisted of $57.6$95.3 million of transaction and integration costs, $43.1 million related to the impairment of long-lived assets, $1.8 million associated with employee severance and related benefits associated with our SG&A streamlining actionsactions, and $0.6$1.3 million associated with other actions.actions, including the exit costs incurred to cease operations at our development-stage pepper sourcing and agricultural technology project in Malaysia.

During the sixnine months ended MayAugust 31, 2026, we recorded $85.1$226.6 million of special charges, including transaction and integration expenses. Those expenses consisted of $65.5$160.8 million of transaction and integration costs, $18.0$43.1 million related to the impairment of long-lived assets, $19.8 million associated with employee severance and related benefits associated with our SG&A streamlining actionsactions, and $1.6$2.9 million associated with other actions.actions, including the exit costs incurred to cease operations at our development-stage pepper sourcing and agricultural technology project in Malaysia.

During the three and six months ended MayAugust 31, 2025, we recorded $12.8$3.9 million of special charges, including transaction and integration expenses. Those expenses principally consisted of $11.4$1.3 million associated with employee severance and related benefits associated with our SG&A streamlining actions, $0.8$1.7 million associated with other actions, and $0.9 million of transaction and integration costs, and $0.6 million associated with other actions.costs.

Interest expense increased by $11.7$18.2 million and $10.5$28.7 million for the three and sixnine months ended MayAugust 31, 2026, respectively, compared to the same periodperiods in 2025, driven by $6.8$12.4 million and $19.2 million, respectively, of amortization of debt financing fees related to our pending merger with Unilever Foods,Foods. Interest expense in the 2026 periods was also impacted by the effects of higher interest rates and the impact of higher average borrowing levels.

Other income, net, decreased by $3.3$3.5 million and $8.3$11.8 million for the three and sixnine months ended MayAugust 31, 2026, respectively, compared to the same periodperiods in 2025 due to a lower level of interest income driven primarily by the impact of the acquisition of McCormick de Mexico on our average cash balance during the period.

The effective tax rate for the sixthree months ended MayAugust 31, 2026 increased by 4.5%16.4% compared to the same periodsperiod in 2025 primarily driven by the unfavorable impact of acquisitionnondeductible relatedexpenses costs.and lower favorable discrete tax items.

Income from unconsolidated operations decreased $17.2$16.1 million for the three months ended MayAugust 31, 2026 compared to the same period of 2025. This decrease was primarily driven by the acquisition of an additional 25% ownership interest in McCormick de Mexico which resulted in the consolidation of McCormick de Mexico's financial results, which is described in more detail in Note 2 of the notes to our accompanying condensed consolidated financial statements.

Income from unconsolidated operations increased by $850.3$834.2 million for the sixnine months ended MayAugust 31, 2026 compared to the same period of 2025. This increase was primarily driven by a gain of $866.8 million on the remeasurement of our previously held equity interest in McCormick de Mexico, partially offset by the impact of consolidating McCormick de Mexico, which is described in more detail in Note 2 of the notes to our accompanying condensed consolidated financial statements.

Net income attributable to noncontrolling interests increased by $9.1$7.8 million for the three months ended MayAugust 31, 2026 and $14.1$21.9 million for the sixnine months ended MayAugust 31, 2026 compared to the same periods in 2025. This increase was driven by the net income attributable to our noncontrolling interest in McCormick de Mexico upon its consolidation in 2026.

In the secondthird quarter of 2026, sales of our Consumer segment increased by 22.8%24.9% compared to the secondthird quarter of 2025 and increased by 0.8%1.1% on an organic basis. The acquisition of McCormick de Mexico increased sales by 19.6%.23.2%. Unfavorable volume and product mix decreased sales by 1.9%,1.1%, driven by declines in the Americas region which were partially offset by growth in the EMEA and APAC regions. Favorable pricing impacted sales by 2.7%2.2% primarily driven by the Americas region.and EMEA regions. The favorable impact of foreign currency rates increased sales by 2.4%.0.6%.

In the Americas region, Consumer segment sales increased by 28.0%31.7% in the secondthird quarter of 2026 compared to the same quarter of 2025 and decreased by 0.2%0.3% on an organic basis. The acquisition of McCormick de Mexico increased sales by 27.9%.32.1%. Unfavorable volume and product mix decreased sales by 3.6%,2.5% whichdriven includedby thelower unfavorableconsumption impactacross ofcore price elasticity.categories. Favorable pricing impacted sales by 3.4%.2.2%. The favorableunfavorable impact of foreign currency rates increaseddecreased sales by 0.3%.0.1%.

In the APACEMEA region, Consumer segment sales increased by 10.0%5.2% in the secondthird quarter of 2026 compared to the same quarter of 2025 and increased by 2.9%5.0% on an organic basis. Favorable volume and product mix increased sales by 2.4%,2.0%, driven by higher sales in China.Poland. Favorable pricing impacted sales by 0.5%.3.0%. The favorable impact from foreign currency rates increased sales by 7.1%.0.2%.

ForIn the sixAPAC months ended May 31, 2026, sales of ourregion, Consumer segment sales increased 23.7%by as10.7% in the third quarter of 2026 compared to the same periodquarter inof 2025 and increased by 1.3%4.4% on an organic basis. The acquisition of McCormick de Mexico increased sales by 19.7%. UnfavorableFavorable volume and product mix decreasedincreased sales by 1.2%4.1%, driven by declineshigher sales in the Americas region which were partially offset by growth in the EMEA and APAC regions.China. Favorable pricing impacted sales by 2.5% driven by the Americas region.0.3%. The favorable impact from foreign currency rates increased sales by 2.7% .6.3%.

Segment operating income for our Consumer segment for the secondthird quarter of 2026 increased by $53.3$47.3 million, or 32.6%,24.4%, as compared to the same period of 2025 driven by an increase in gross profit, partially offset by an increase in SG&A expense. The increase in gross profit was driven by the impacts of our acquisition of McCormick de Mexico, favorable pricing, the IEEPA tariff refund, and CCI-led cost savings, partially offset by increased commodity costs and higher freight costscosts, dueincluding tothe impact of the conflict in the Middle East. The increase in SG&A expense was driven by the items described in the consolidated discussion. Segment operating margin increaseddecreased by 14010 basis points to 19.0%.19.8%. On a constant currency basis, segment operating income increased by 30.7%.23.8%.

Segment operating income for our Consumer segment for the sixnine months ended MayAugust 31, 2026 increased by $86.2$133.5 million, or 27.8%,26.5%, as compared to the same period in 2025, driven by the effects of an increase in gross profit partially offset by an increase in SG&A expense. The increase in gross profit was driven by the impacts of our acquisition of McCormick de Mexico, the IEEPA tariff refund, favorable pricing, and CCI-led cost savings, partially offset by increased commodity costs and higher freight costscosts, dueincluding tothe impact of the conflict in the Middle East. The increase in SG&A expense was driven by the items described in the consolidated discussion. Segment operating margin increased by 5030 basis points to 17.3%.18.2%. On a constant currency basis, segment operating income increased by 25.9%.25.1%.

ForIn the sixthird monthsquarter ended May 31,of 2026, sales of our Flavor Solutions segment increased 7.6%by 7.7% as compared to the samethird periodquarter inof 2025 and increased by 1.7%3.0% on an organic basis. The acquisition of McCormick de Mexico increased sales by 2.7%.3.4%. Favorable volume and product mix increased sales by 0.2%0.8% driven primarily by growth in the APAC regionregion, partially offset by lower sales in the Americas and EMEA region.regions. Favorable pricing increased sales by 1.5%,2.2% driven by the Americas and EMEA regionsregions, partially offset by unfavorable pricing in the APAC region. The favorable impact of foreign currency rates increased segment sales by 3.2%.1.3%.

Segment operating income for our Flavor Solutions segment for the secondthird quarter of 2026 increased by $24.5$17.6 million, or 25.8%,17.6%, compared to the same period of 2025 driven by an increase in gross profit partially offset by an increase in SG&A expense. The increase in gross profit was driven by favorable pricing, the impact of our acquisition of McCormick de Mexico, and CCI-led cost savings. The increase in SG&A expense was driven by the impact of the McCormick de Mexico acquisition and increased investments in technology. Segment operating margin increased by 210120 basis points to 15.1%.14.5%. On a constant currency basis, segment operating income increased by 21.4%.15.4%.

Segment operating income for our Flavor Solutions segment for the sixnine months ended MayAugust 31, 2026 increased by $34.0$51.6 million, or 19.6%,18.9%, compared to the same period in 2025, driven by the effects of an increase in gross profit partially offset by an increase in SG&A expense. The increase in gross profit was driven by favorable pricing, the impact of our acquisition of McCormick de Mexico, and CCI-led cost savings. The increase in SG&A expense was driven by the impact of the McCormick de Mexico acquisition and increased investments in technology. Segment operating margin increased by 130 basis points to 13.6%.13.9%. On a constant currency basis, segment operating income increased by 15.1%.15.2%.

•Special charges - Special charges consist of expenses and income associated with certain actions undertaken by us to reduce fixed costs, simplify or improve processes, and improve our competitiveness and are of such significance in terms of both up-front costs and organizational/structural impact to require advance approval by our Management Committee. Expenses associated with the approved actions are classified as special charges upon recognition and monitored on an ongoing basis through completion. Included in special charges are transaction and integration costs incurred in conjunction with acquisitions.acquisitions and impairments of long-lived assets.

To present the percentage change in projected 2026 net sales, adjusted operating income, and adjusted earnings per share (diluted) on a constant currency basis, the projected local2026 currency net sales, adjusted operating income, and adjusted net incomeresults for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at forecastedthe actual exchange rates.rates in effect for each month during 2025. These 2026 figures are then compared to the 2025 local currency projected results, which are translated into U.S. dollars at the averageour actual exchangeresults rates in effect during the corresponding months of fiscal yearfor 2025. This comparison determines what the2026 2025 consolidated U.S. dollar net sales, adjusted operating income, and adjusted earnings per share (diluted)results would have beenbe if the relevant currency exchange rates had not changed from those of the comparable 2025 periods.2025.

We expect that the pending combinationmerger with Unilever Foods is likely to result in a material increase in our debt and liquidity needs that will impact our capital needs prior to and after the closing of such transaction. Under the terms of the Merger Agreement, we will issue voting and non-voting securities to Unilever and its shareholders and make a one-time cash payment of $15.7 billion to Unilever, subject to certain adjustments, which we intend to fund through the Bridge Facility, the Term Loan Facility, and, to the extent available, the Permanent Financing. See Note 4 of the notes to the condensed consolidated financial statements for further discussion. We believe that our sources of liquidity, which include existing cash balances, cash flows from operations, existing credit facilities, our commercial paper program, access to capital markets and the committed debt financing related to the pending transaction with Unilever Foods, will provide sufficient liquidity to meet our debt obligations, including any repayment of debt or refinancing of debt, working capital needs, planned capital expenditures, the one-time cash payment to Unilever in connection with the pending transaction, the payment associated with an acquisition and payment of anticipated quarterly dividends for at least the next twelve months.

Operating Cash Flow — Net cash provided by operating activities of $430.7$598.8 million for the sixnine months ended MayAugust 31, 2026 increased $269.3$178.6 million as compared to $161.4$420.2 million for the corresponding 2025 period. The increase in operating cash flow was primarily driven by lower cash used for working capital.capital, The lower use ofincluding cash inflows associated with workingtariff capital, net of effect of businesses acquired, was driven by a decreased use of cash associated with accounts payable and increased source of cash from accounts receivables in 2026 compared to the 2025 period.refunds.

Investing Cash Flow — Cash used in investing activities of $805.1$861.1 million for the sixnine months ended MayAugust 31, 2026 increased by $699.9$688.9 million as compared to $105.2$172.2 million for the corresponding period in 2025. Our primary investing cash flows included cash used in the acquisition of a business and cash used for capital expenditures. Capital expenditures, including expenditures for capitalized softwaresoftware, decreased from the 2025 level of $85.4$138.1 million to $75.2$131.2 million. Cash used for the acquisition of a business, net of cash acquired for the sixnine months ended MayAugust 31, 2026 was $729.9 million as compared to $19.8$34.1 million for the sixnine months ended MayAugust 31, 2025. We expect 2026 capital expenditures to approximate $250 million.

Financing Cash Flow — Financing activities provided cash of $602.7$490.3 million for the sixnine months ended MayAugust 31, 2026 as compared to a use of cash of $142.9$378.3 million for the corresponding period in 2025. The year-over-year change was primarily driven by fluctuations in net borrowings, share repurchase activity, and dividend payments, as further described below.

During the sixnine months ended MayAugust 31, 2026, the increase in short-term borrowings was principally to fund investing cash requirements. During the sixnine months ended MayAugust 31, 2026, we repaid $504.4$506.7 million of long-term debt, including the $500 million, 0.90% notes that matured in February 2026. InDuring the secondthree quarterand ofnine months ended August 31, 2026, we paid $51.0$24 million and $75 million, respectively, of aggregate debt financing fees related to the pending merger with Unilever Foods which were deferred in Other assets and are being amortized to Interest expense. During the sixnine months ended MayAugust 31, 2026, we issued $500 million of 4.15% notes due 2029, with net proceeds received of $497.1 million.

As of MayAugust 31, 2026, approximately $402.6$403 million remained of the $600.0$600 million share repurchase program that was authorized by the Board of Directors in November 2019. The timing and amount of any shares repurchased is determined by our management based on its evaluation of market conditions and other factors.

During the sixnine months ended MayAugust 31, 2026, we received proceeds of $13.6$23.9 million from exercised stock options as compared to $13.3$15.1 million received in the corresponding 2025 period. We repurchased $11.9 million and $12.6$13.2 million of common stock during the sixnine months ended MayAugust 31, 2026 and 2025, respectively, in conjunction with employee tax withholding requirements associated with our stock compensation plans.

Dividends paid increased to $257.9$387.0 million, or a per share quarterly dividend of $0.48, in the first sixnine months of 2026 from $241.5$362.2 million, or a per share quarterly dividend of $0.45, of dividends paid in the same period last year. The timing and amount of any future dividends is determined by our Board of Directors. We paid dividends to our joint venture partnerpartners of $8.4$20.8 million in the first sixnine months of 2026.

At MayAugust 31, 2026 and 2025, we temporarily used $449.4$510.9 million and $614.2$652.2 million, respectively, of cash from our non-U.S. subsidiaries to pay down short-term debt in the U.S. During a quarter, our short-term borrowings vary, but are typically lower at the end of a quarter. The average short-term borrowings outstanding for the sixnine months ended MayAugust 31, 2026 and 2025 were $1,519.4$1,599.5 million and $1,073.5$1,099.4 million, respectively. Total average debt outstanding for the sixnine months ended MayAugust 31, 2026 and 2025 was $5,111.1$5,177.3 million and $4,873.5$4,899.4 million, respectively.

The reported values of our assets and liabilities are significantly affected by fluctuations in foreign exchange rates between periods. At MayAugust 31, 2026, the exchange rate for the British pound sterling, Euro,euro, Canadian dollar, Mexican peso, Chinese renminbi, and Australian dollar, and Polish zlotydollar were higher than the U.S. dollar at November 30, 2025 while the Polish zloty was lower than the U.S. dollar at November 30, 2025.

In March 2026, we entered into the Bridge Commitment Letter in connection with the financing of the pending transaction with Unilever,Unilever Foods, pursuant to which the Commitment Parties committed to provide, subject to the terms and conditions set forth therein, the Bridge Facility in an aggregate principal amount of up to $15.7 billion to fund the cash consideration and related fees and expenses at closing of the pending transaction. Effective April 28, 2026, we terminated $2.0 billion of the commitments under the Bridge Facility and entered into a term loan agreement as described below, subject to customary closing conditions for similar facilities.

In April 2026, we entered into the Term Loan Agreement by and among us, the lenders party thereto and Citibank, N.A., as the Administrative Agent. The Term Loan Agreement provides us with the Term Loan Facility at the the Closing Date, subject to satisfaction of customary closing conditions for similar facilities, for the purpose of financing a portion of the cash consideration to be paid in the pending transaction and paying related fees and expenses in connection therewith. The Term Loan Facility may be funded on the Closing Date or, subject to compliance with certain conditions, on the preceding business day, and matures three years after the Closing Date. Under the Term Loan Agreement, borrowings will bear interest on the principal amount outstanding at a floating rate based on, at our election, (i) Term SOFR (as defined in the Term Loan Agreement) plus an applicable margin based on the credit ratings of our senior unsecured long term debt ranging from 0.75% to 1.50% or (ii) Base Rate (as defined in the Term Loan Agreement) plus an applicable margin based on the credit ratings of our senior unsecured long term debt ranging from 0.00% to 0.50%. The Term Loan Agreement contains a financial covenant requiring us to maintain a minimum interest coverage ratio as well as other non-financial covenants and certain customary events of default.

We generally use our revolving credit facilities to support our issuance of commercial paper. If the commercial paper market is not available or viable, we could borrow directly under our revolving credit facility. This facility is made available by a syndicate of banks, with various commitments per bank. If any of the banks in this syndicate are unable to perform on their commitments, our liquidity could be impacted, which could reduce our ability to grow through funding of our working capital. We periodically review our banking and financing relationships, considering the stability of the institutions and other aspects of the relationships. In addition, we engage in regular communication with all banks participating in our credit facility. During these communications, none of the banks have indicated that they may be unable to perform on their commitments. Based on these communications and our monitoring activities, we believe our banks will perform on their commitments.