Business Segments And Geographic Areas

12 Months Ended

Nov. 30, 2013

Segment Reporting Information, Profit (Loss) [Abstract]

Business Segments And Geographic Areas

BUSINESS SEGMENTS AND GEOGRAPHIC AREAS

Business Segments

We operate in two business segments: consumer and industrial. The consumer and industrial segments manufacture, market and distribute spices, seasoning mixes, condiments and other flavorful products throughout the world. Our consumer segment sells to retail outlets, including grocery, mass merchandise, warehouse clubs, discount and drug stores under the “McCormick” brand and a variety of brands around the world, including “Lawry’s”, “Zatarain’s”, “Simply Asia”, “Thai Kitchen”, “Ducros”, “Vahiné”, “Schwartz”, “Club House”, “Kamis”, “Koohinor” and "DaQiao". Our industrial segment sells to food manufacturers and the foodservice industry both directly and indirectly through distributors.

In each of our segments, we produce and sell many individual products which are similar in composition and nature. With their primary attribute being flavor, we regard the products within each of our segments to be fairly homogenous. It is impracticable to segregate and identify sales and profits for each of these individual product lines.

We measure segment performance based on operating income excluding special charges and loss on voluntary pension settlement as these activities are managed separately from the business segments. Although the segments are managed separately due to their distinct distribution channels and marketing strategies, manufacturing and warehousing are often integrated to maximize cost efficiencies. We do not segregate jointly utilized assets by individual segment for internal reporting, evaluating performance or allocating capital. Therefore, asset-related information has been disclosed in the aggregate.

We have a large number of customers for our products. Sales to one of our consumer business customers, Wal-Mart Stores, Inc., accounted for 12% of consolidated sales in 2013 and 11% of consolidated sales in 2012 and 2011. Sales to one of our industrial business customers, PepsiCo, Inc., accounted for 11% of consolidated sales in 2013, 2012 and 2011.

Accounting policies for measuring segment operating income and assets are consistent with those described in note 1. Because of integrated manufacturing for certain products within the segments, products are not sold from one segment to another but rather inventory is transferred at cost. Inter-segment sales are not material. Corporate assets include cash, deferred taxes, investments and certain fixed assets.

Business Segment Results

(millions)	Consumer		Industrial		Total segments		Corporate & other		Total
2013
Net sales	$	2,538.0	$	1,585.4	$	4,123.4	—		$	4,123.4
Operating income excluding special charges and loss on voluntary pension settlement	472.3		118.5		590.8		—		590.8
Income from unconsolidated operations	19.5		3.7		23.2		—		23.2
Goodwill	1,654.7		143.8		1,798.5		—		1,798.5
Assets	—		—		4,142.9		$	306.8	4,449.7
Capital expenditures	—		—		84.2		15.7		99.9
Depreciation and amortization	—		—		74.8		31.2		106.0
2012
Net sales	$	2,415.3	$	1,598.9	$	4,014.2	—		$	4,014.2
Operating income	456.1		122.2		578.3		—		578.3
Income from unconsolidated operations	17.3		4.2		21.5		—		21.5
Goodwill	1,551.0		144.3		1,695.3		—		1,695.3
Assets	—		—		3,912.2		$	253.2	4,165.4
Capital expenditures	—		—		88.8		21.5		110.3
Depreciation and amortization	—		—		75.1		27.7		102.8
2011
Net sales	$	2,199.9	$	1,497.7	$	3,697.6	—		$	3,697.6
Operating income	428.4		111.9		540.3		—		540.3
Income from unconsolidated operations	20.5		4.9		25.4		—		25.4
Goodwill	1,550.7		143.5		1,694.2		—		1,694.2
Assets	—		—		3,895.6		$	192.2	4,087.8
Capital expenditures	—		—		74.8		21.9		96.7
Depreciation and amortization	—		—		76.2		22.1		98.3

A reconciliation of operating income excluding special charges and loss on voluntary pension settlement (which we use to measure segment profitability) to operating income is as follows:

(millions)	Total
2013
Operating income excluding special charges and loss on voluntary pension settlement	$	590.8
Less: Special charges	25.0
Less: Loss on voluntary pension settlement	15.3
Operating income	$	550.5

Geographic Areas

We have net sales and long-lived assets in the following geographic areas:

(millions)	United States		EMEA		Other countries		Total
2013
Net sales	$	2,357.0	$	883.4	$	883.0	$	4,123.4
Long-lived assets	1,275.7		989.2		443.6		2,708.5
2012
Net sales	$	2,351.5	$	860.5	$	802.2	$	4,014.2
Long-lived assets	1,291.5		956.6		318.0		2,566.1
2011
Net sales	$	2,220.8	$	770.8	$	706.0	$	3,697.6
Long-lived assets	1,284.1		968.3		314.9		2,567.3

Long-lived assets include property, plant and equipment, goodwill and intangible assets, net of accumulated depreciation and amortization.