Subsequent Event (Notes)

6 Months Ended

May 31, 2017

Subsequent Event [Line Items]

Subsequent Events [Text Block]

SUBSEQUENT EVENT

We continue to evaluate changes to our organization structure to enable us to reduce fixed costs, simplify or improve processes, and improve our competitiveness.

On June 27, 2017, our Management Committee approved a three-year initiative during which we expect to execute significant change to our global processes, capabilities and operating model to provide a scalable platform for future growth. We expect this initiative to enable us to accelerate our ability to work globally and cross-functionally by aligning and simplifying processes throughout McCormick, in part building upon our current shared services foundation and expanding the end-to-end processes presently under that foundation. We expect this initiative, which we refer to as McCormick Global Enablement (MGE), to enable this scalable platform for future growth while reducing costs, enabling faster decision making, increasing agility and creating capacity within our organization.

While we are still finalizing the details of our MGE operating model, we expect the cost of the MGE initiative-to be recognized as “Special charges” in our consolidated income statement over its expected three-year course-to range from approximately $55 million to $65 million. Of that $55 million to $65 million, we estimate that two-thirds will be attributable to employee severance and related benefit payments and one-third will be attributable to cash payments associated with related costs of MGE implementation and transition, including outside consulting and other costs directly related to the initiative. We currently anticipate that approximately $2 million and $7 million of special charges related to the MGE initiative will be incurred in the third quarter and second half of 2017, respectively. The MGE initiative is expected to generate annual savings, ranging from approximately $30 million to $40 million, once all actions are implemented.