Business Segments And Geographic Areas

12 Months Ended

Nov. 30, 2015

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 channels, including grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce 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,” “Kohinoor,” "DaQiao," "Drogheria & Alimentari" and "Stubb's." 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 segment customers, Wal-Mart Stores, Inc., accounted for 11% of consolidated sales in 2015, 11% of consolidated sales in 2014 and 12% of consolidated sales in 2013. Sales to one of our industrial segment customers, PepsiCo, Inc., accounted for 11% of consolidated sales in 2015, 2014 and 2013.

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
2015
Net sales	$	2,635.2	$	1,661.1	$	4,296.3	—		$	4,296.3
Operating income excluding special charges	456.1		157.8		613.9		—		613.9
Income from unconsolidated operations	36.0		0.7		36.7		—		36.7
Goodwill	1,587.7		171.6		1,759.3		—		1,759.3
Assets	—		—		4,225.4		$	282.4	4,507.8
Capital expenditures	—		—		102.8		25.6		128.4
Depreciation and amortization	—		—		71.8		34.1		105.9
2014
Net sales	$	2,625.5	$	1,617.7	$	4,243.2	—		$	4,243.2
Operating income excluding special charges	474.3		133.9		608.2		—		608.2
Income from unconsolidated operations	28.2		1.2		29.4		—		29.4
Goodwill	1,581.1		141.1		1,722.2		—		1,722.2
Assets	—		—		4,169.7		$	244.6	4,414.3
Capital expenditures	—		—		108.6		24.1		132.7
Depreciation and amortization	—		—		71.7		31.0		102.7
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

A reconciliation of operating income excluding special charges and loss on voluntary pension settlement (which we use to measure segment profitability) to operating income for the years ended November 30, 2015, 2014 and 2013 is as follows:

(millions)	2015		2014		2013
Operating income excluding special charges and loss on voluntary pension settlement	$	613.9	$	608.2	$	590.8
Less: Special charges included in cost of goods sold	4.0		—		—
Less: Other special charges	61.5		5.2		25.0
Less: Loss on voluntary pension settlement	—		—		15.3
Operating income	$	548.4	$	603.0	$	550.5

Geographic Areas

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

(millions)	United States		EMEA		Other countries		Total
2015
Net sales	$	2,438.1	$	903.7	$	954.5	$	4,296.3
Long-lived assets	1,462.2		871.9		415.7		2,749.8
2014
Net sales	$	2,357.5	$	930.8	$	954.9	$	4,243.2
Long-lived assets	1,284.0		920.0		451.7		2,655.7
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

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