PART I

Item 1. Business

H.B. Fuller Company was founded in 1887 and incorporated as a Minnesota corporation in 1915. Our stock is traded on the New York Stock Exchange (“NYSE”) under the ticker symbol FUL. As used herein, “H.B. Fuller”, “we”, “us”, “our”,Fuller,” “we," “us,” “our,” “management” or “company” includes H.B. Fuller and its subsidiaries unless otherwise indicated. Where we refer to 2021, 20202023, 2022 and 20192021 herein, the reference is to our fiscal years ended December 2, 2023, December 3, 2022, and November 27, 2021, November 28, 2020, and November 30, 2019, respectively.

We are a leading worldwide formulator, manufacturer and marketer of adhesives, sealants and other specialty chemical products. Sales operations span 35 countries in North America, Europe, Latin America, the Asia Pacific, region, India, the Middle East and Africa. Industrial adhesives represent our core product offering.offering, which help improve the performance of our customers’ products or improve their manufacturing processes. Customers use our adhesives products in manufacturing common consumer and industrial goods, including food and beverage containers, disposable diapers, medical products, windows, doors, flooring, roofing, appliances, sportswear, footwear, multi-wall bags, water filtration products, insulation, textiles, automobiles, recreational vehicles, buses, trucks and trailers, marine products, solar energy systems, electronics and products for the aerospace and defense industries. OurIn addition, we have established a variety of product offerings for residential, commercial and industrial construction markets, including sealing and waterproofing solutions for airports, roads, highways, bridges and utilities; pressure-sensitive adhesives, help improvetapes and sealants for the performance of our customers’commercial roofing industry; and level-setting products, or improve their manufacturing processes.ready-to-use grouts, mortars, and pressure sensitive adhesives that enable contractors and do-it-yourself consumers to quickly install flooring and tiling applications more reliably and efficiently. We also provide our customers with technical support and unique solutions designed to address their specific needs. In addition, we have established a variety of product offerings for residential and commercial construction markets, such as tile-setting adhesives, grouts, sealants and related products.

We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. See Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) in Item 7 of this Annual Report for a description of our segment operating results.

Non-U.S. Operations

The principal markets, products and methods of distribution outside the United States vary with each of our regional operations generally maintaining integrated business units that contain dedicated supplier networks, manufacturing, logistics and sales organizations. The vast majority of the products sold within any region are produced within the region, and the respective regions do not import significant amounts of product from other regions. As of November 27, 2021,December 2, 2023, we had sales offices and manufacturing plants in 2125 countries outside the United States and satellite sales offices in another 139 countries.

We have a Code of Business Conduct and detailed Core Policies that we apply across all of our operations around the world. These policies represent a set of common values that apply to all employees and all of our business dealings. We have adopted policies and processes, and conduct employee training, intended to ensure compliance with various economic sanctions and export controls, including the regulations of the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”). We do not conduct any business in the following countries that are subject to U.S. economic sanctions: Cuba; Iran;Cuba, Iran, North Korea;Korea, Syria and the Crimea region of the Ukraine. 

Competition

Many of our markets are highly competitive. However, we compete effectively due to the quality and breadth of our adhesives, sealants and specialty chemical portfolio and the experience and expertise of our commercial organizations. Within the adhesives and other specialty chemical markets, we believe few suppliers have comparable global reach and corresponding ability to deliver quality and consistency to multinational customers. Our competition is made up generally of two types of companies: (1) similar multinational suppliers and (2) regional or specialty suppliers that typically compete in only one region or within a narrow geographic area within a region. The multinational competitors typically maintain a broad product offering and range of technology, while regional or specialty companies tend to have limited or more focused product ranges and technology.

Principal competitive factors in the sale of adhesives and other specialty chemicals are product performance, supply assurance, technical service, quality, price and customer service.

Customers

We have cultivated strong, integrated relationships with a diverse set of customers worldwide. Our customers are among the technology and market leaders in consumer goods, construction and industrial markets. We pride ourselves on long-term, collaborative customer relationships and a diverse portfolio of customers in which no single customer accounted for more than 10 percent of consolidated net revenue.

Our leading customers include manufacturers of food and beverages, hygiene products, clothing, major appliances, electronics, automobiles, aerospace and defense products, solar energy systems, filters, construction materials, wood flooring, furniture, cabinetry, windows, doors, tissue and towel, corrugation, tube winding, packaging, labels and tapes.tapes and labels.

Our products are delivered directly to customers primarily from our manufacturing and distribution facilities, with additional deliveries made through distributors and retailers.

Human Capital Resources and Management

Employees and Labor Relations

As of November 27, 2021,December 2, 2023, we have approximately 6,5007,200 employees in 45 countries, including approximately 2,5002,600 employees based in the U.S. Approximately 450 U.S. employees are subject to collective bargaining agreements with various unions. Approximately 750 employees in foreign countries are subject to collective bargaining agreements. Overall, we consider our employee relations to be good.

Health and Safety

We care aboutThe health and safety of our colleaguesemployees and anyone who enters our workplace is important, and we believe that nothing we do is worth getting hurt for. We have a strong environmental, health and safety program that focuses on implementing policies and training programs, as well as performing self-audits to enhance workworkplace safety. Importantly during 2021, our experience and continuing focus on workplace safety have enabled us to preserve business continuity without sacrificing our commitment to keeping our colleagues and workplace visitors safe during the COVID-19 pandemic.

Competitive Pay and Benefits

Our primary compensation strategy is “Pay for Performance”, which supports a culture of accountability and performance. Our compensation guiding principles are to structure compensation that is simple, aligned and balanced. We believe that these principles are strongly aligned with the strategic priorities of our business and our objective to deliver value for our shareholders.

We are committed to fair pay and strive to be externally competitive while ensuring internal equity across our organization. We conduct global pay equity assessments and compensation reviews, and when necessary, we take action to address areas of concern.

Quality, affordable health care is the foundation of the comprehensive benefits package we offer our employees. It is one of the tools we use to recruit and retain, and it is seen as the preferred benefit by most employees. Employees in the United States earning below $52,000$54,000 each year have 100% of their individual health care costsmedical premiums covered by the Company in the form of a medical premium reimbursement. 

Results-Driven, Collaborative Culture

Our purpose is connecting what matters for all stakeholders and we go about this by winning the right way through our core values. We expect employees to act with integrity and hold each other accountable for our actions. We value our global team’s diverse perspectives, backgrounds and experiences. We make daily, conscious choices to excel, by always bringing passion and creativity to our work, and by striving for innovation ethically and fairly. Our worldwide network of culture champions supports our focus on being At Our Best. Our communication on goals, targets and performance is frequent and transparent. We continue to leverage flexible work options available to employees who don't need our facilities to perform their jobs and this continues to enhance connections across the company, as well as with customers and external partners. This supports our desire to be first and fastest in finding solutions for customers and improving our overall effectiveness. Finally, we continue to take great pride in our focus on giving back to the communities in which we operate through the giving efforts of the H.B. Fuller Foundation and the thousands of employee volunteer hours each year.

Inclusion and Diversity

As a global company, we currently have employees present in over 40 45countries around the world. We place strong value on collaboration and we believe that working together leads to better outcomes for our customers. This extends to the way we treat each other as team members. We strive to create an environment where innovative ideas can flourish by demonstrating respect for each other and valuing the diverse opinions, background and viewpoints of employees. We believe that diversity in our teams leads to new ideas, helps us solve problems and allows us to better connect with our global customer base.

We are taking specific actions to foster inclusion and diversity into our culture. Learning resources have been implemented to support greater awareness and understanding of the behaviors expected from employees. We have introduced employee networking groups, an expanded and enhanced mentoring program and focused development programs with the goal of creating meaningful opportunities for employees. We have adjusted our recruiting practices to ensure we are getting the right level of exposure to diverse candidates.

Talent Development

We recognize how important it is for our colleagues to develop and progress in their careers. We provide a variety of resources to help our colleagues grow in their current roles and build new skills, including online development resources focused on specific business imperatives with access to hundreds of online courses in our learning management system. We have implemented an innovative delivery method for leadership training to drive experiential learning and to increase access to leaders around the world. Individual development planning is a part of our annual goal setting process and people managers are expected to have regular discussions with employees to measure progress and make needed adjustments. We focus on getting employees into roles with greater responsibility and opportunities for advancement that are also aligned with their career path to facilitate development and maximize potential. Finally, we provide ambitious employees with short-term opportunities in unique assignments in addition to their current roles. These assignments support the employees’ development while also supporting company initiatives that are required to be resourced with talented employees.

Raw Materials

We use several principal raw materials in our manufacturing processes, including tackifying resins, polymers, synthetic rubbers, vinyl acetate monomer and plasticizers. We generally avoid sole source supplier arrangements for raw materials.

The majority of our raw materials are petroleum/natural gas-based derivatives, therefore the cost of crude oil and natural gas based derivatives.can impact the cost of our raw materials. Under normal conditions, raw materials are available on the open market. Prices and availability are subject to supply and demand market mechanisms. Raw material costs, including costs for unique or specialty chemicals used in the manufacturing of our products, are primarily determined by the balance of supply against the aggregate demand from the adhesives industry and other industries that use the same raw material streams. The cost of crude oil and natural gas, the primary feedstocks for our raw materials, can also impact the cost of our raw materials.

See Item 1A. Risk Factors for a discussion

Patents, Trademarks and Licenses

Much of the technology we use in our products and manufacturing processes is available in the public domain. For technology not available in the public domain, we rely on trade secrets and patents when appropriate to protect our competitive position. We also license some patented technology from other sources. Our business is not materially dependent upon licenses or similar rights or on any single patent or group of related patents.

We enter into agreements with many employees to protect rights to technology and intellectual property. Confidentiality commitments also are routinely obtained from customers, suppliers and others to safeguard proprietary information.

We own numerous trademarks and service marks in various countries. Trademarks, such as H.B. Fuller®, Swift®, Advantra®, Clarity®, Earthic™, Sesame®, TEC®, Foster®, Rakoll®, Rapidex®, Full-Care®, Thermonex®, Silaprene®, Eternabond®, Cilbond®, HydroArmor®, Ködispace®, Weld Mount® and TONSAN® are important in marketing products. Many of our trademarks and service marks are registered. U.S. trademark registrations are for a term of ten years and are renewable every ten years as long as the trademarks are used in the regular course of trade.

Research and Development

Our investment in research and development creates new and innovative adhesive technology platforms, enhances product performance, ensures a competitive cost structure and leverages available raw materials. New product development is a key research and development outcome, providing higher-value solutions to existing customers or meeting new customers’ needs. Projects are developed in local laboratories in each region, where we understand our customer base the best. Platform developments are coordinated globally through our network of laboratories.

Through designing and developing new polymers and new formulations, we expect to continue to grow in our current markets. We also develop new applications for existing products and technologies, and improve manufacturing processes to enhance productivity and product quality. Research and development efforts are closely aligned to customer needs. We foster open innovation, seek supplier-driven new technology and use relationships with academic and other institutions to enhance our capabilities.

As climate change and other sustainability concerns become more prevalent, governmental and non-governmental organizations, customers and investors are increasingly focusing on these issues. We continue to monitor our markets to ensure we are developing the adhesives and sealants to support our customers’ responses to changing consumer demand, new product designs and upcoming regulatory and sustainability efforts. We invest significantly in innovation, research and expertise, which are crucial for the continuous extraction of value from our business strategy. This also facilitates the creation of new high-performance solutions that enable customers to improve their products and processes to better achieve their sustainability programs.

Regulatory Compliance

We comply with applicable federal, state, local and foreign laws and regulations relating to environmental protection and workers' safety, including those required by the U.S. Environmental Protection Agency (the “EPA”) and the EU’sEuropean Union’s ("EU") Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”) regulation. This includes regular review of and upgrades to environmental, health and safety policies, practices and procedures as well as improved production methods to minimize our facilities’ outgoing waste, based on evolving societal standards and increased environmental understanding. Expenditures to comply with environmental regulations over the next two years are estimated to be approximately $24.2$21.4 million, including approximately $3.7$0.9 million of capital expenditures. See additional disclosure under Item 3. Legal Proceedings.

Various legislation, regulations and international accords pertaining to climate change have been implemented or are being considered for implementation, particularly as they relate to the reduction of greenhouse gas emissions. We have not determined that any of theseemissions, such as the EU's Corporate Sustainability Reporting Directive ("CSRD"), California’s Climate Corporate Data Accountability Act and Climate Related Financial Risk Act, and similar regulations under consideration by the Securities and Exchange Commission ("SEC"). These laws may directly impact the Company, at this time; however we have not determined the extent of potential disclosures or other reporting requirements. We continue to monitor the development and implementation of such legislation and regulation.regulations. We also continue to regularly report our sustainability efforts and metrics under the Global Reporting Initiative (“GRI”) framework and report our goals and progress in our annual Sustainability Report.

The Foreign Corrupt Practices Act (the “FCPA”) prohibits bribery of government officials to benefit business interests. We operate and sell our products in countries that are rated as high-risk for corruption, which creates the risk of unauthorized conduct by our employees, customs brokers, distributors or other third party intermediaries that could be in violation of the FCPA or similar local regulations. We comply with the FCPA’s requirements to make and keep accurate books and records that accurately and fairly reflect our transactions and to devise and maintain an adequate system of internal accounting controls.

We are also subject to and comply with increasingly complex privacy and data protection laws and regulations in the United States and other jurisdictions. This includes the European Union’sEU’s General Data Protection Regulation (“GDPR”), which enforces rules relating to the protection of processing and movement of personal data. The interpretation and enforcement of such regulations are continuously evolving and there may be uncertainty with respect to how to comply with them. Noncompliance with GDPR and other data protection laws could result in damage to our reputation and payment of monetary penalties.

Seasonality

Our operating segments have historically had lower net revenue in winter months, which is primarily our first fiscal quarter, mainly due to international holidays and the seasonal decline in construction and consumer spending activities.

Information About Our Executive Officers

The following table shows the name, age and business experience for the past five years of the executive officers as ofof January 5, 2022. Unless16, 2024. Unless otherwise noted, the positions described are positions with the company or its subsidiaries.

The Board of Directors elects the executive officers annually.

Available Information

For more information about us, visit our website at: www.hbfuller.com.

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”)SEC via EDGAR. Our SEC filings are available free of charge to the public on the SEC website at www.sec.gov and on our website as soon as reasonably practicable after they have been filed with or furnished to the SEC.

Item 1A. Risk Factors

As a global manufacturer of adhesives, sealants and other specialty chemical products, we operate in a business environment that is subject to various risks and uncertainties. Below are the most significant factors that could adversely affect our business, financial condition and results of operations.

Strategic andOperational Risks

The COVID-19 pandemic has affected and will continue to affect our operations and financial results.

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, which became a global pandemic. Throughout fiscal year 2021, the COVID-19 pandemic continued to have a significant disruptive impact on global economies, supply chains and industrial production. We have effectively managed our global operations throughout the pandemic, implementing rigorous protocols focused on the health and safety of our employees and ensuring business continuity across our supplier, manufacturing and distribution networks. These actions enabled us to meet our customers’ increased demands for adhesive solutions, effectively allocate our resources and manage expenses, and deliver strong financial results, while maintaining a safe workplace for employees. Concerns remain that there could be a prolonged resurgence of cases triggering additional government mandated lockdowns or similar restrictions, for example due to the emergence of new variants against which existing vaccines are not as effective or which may be more easily transmitted.

Due to the evolving and highly uncertain nature of the pandemic, it is currently not possible to estimate any additional direct or indirect impacts this outbreak may have on our business. Any disruption of the manufacturing of our products, commerce and related activity caused by the COVID-19 pandemic, including ongoing labor shortages and supply chain constraints, could materially and adversely affect our results of operations and financial condition.

Increases in prices and declines in the availability of raw materialshave adversely affected, and could continue toerode,our profit margins, and could negatively impactour operating results.

In 2021,2023, raw material costs made up approximatelyapproximately 75 percent of our cost of sales. Based on 20212023 financial results, a hypothetical one percent change in our raw material costs would have resulted in a change in net income of approximately $13.2$13.3 million or $0.24 per diluted share.  Accordingly, changes in the cost of raw materials, due to scarcity, supplier disruptions, inflation and for other reasons, can significantly impact our earnings. Raw materials needed to manufacture products are obtained from a number of suppliers and manymany of the raw materials are petroleum and natural gas based derivatives. Under normal market conditions, these raw materials are generally available on the open market from a variety of producers. While alternate supplies of most key raw materials are available, supplier production outages may lead to strained supply-demand situations for certain raw materials. The substitution of key raw materials requires us to identify new supply sources, reformulate and re-test and may require seeking re-approval from our customers using those products. From time to time, the prices and availability of these raw materials may fluctuate, which could impair our ability to procure necessary materials, or increase the cost of manufacturing products. If the prices of raw materials increase in a short period of time, we may be unable to pass these increases on to our customers in a timely manner and could experience reductions to our profit margins.

The COVID-19 pandemic has hadWe are at risk of cyber-attacks or other security breaches that could compromise sensitive business information, undermine our ability to operate effectively and expose us to liability, which could cause our business and reputation to suffer.

Increasingly, companies are subject to a wide variety of attacks on their networks on an ongoing basis. In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, ransomware, employee theft or misuse, and denial of service attacks, sophisticated nation-state and nation-state supported actors engage in intrusions and attacks (including advanced persistent threat intrusions) and add to the risks to internal networks, cloud deployed enterprise and customer-facing environments and the information they store and process. Despite significant efforts to create security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks. We, and our third-party software and service providers, have experienced and will continue to experience security threats and attacks from a variety of sources. 

As part of our business, we store our data, including intellectual property, and certain data about our employees, customers and vendors in our information technology systems. Our security measures may be breached as a result of third-party action, including intentional misconduct by computer hackers, employee error, malfeasance or otherwise. Third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information such as usernames, passwords, or other information to gain access to our customers' data or our data, including our intellectual property and other confidential business information, or our information technology systems. In addition, given their size and complexity, our information systems could be vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees, third-party vendors and/or business partners, or from cyber-attacks by malicious third parties attempting to gain unauthorized access to our products, systems or confidential information. 

We are subject to increasingly complex and evolving laws, regulations and customer-imposed controls, that govern privacy and cybersecurity.  These laws and regulations have been adopted by multiple agencies at the federal and state level, as well as in foreign jurisdictions, and the regimes have not been harmonized.  Our failure to comply with these regulatory regimes may result in significant liabilities or penalties.

If a third party gained unauthorized access to our data, including any data regarding our employees, customers or vendors, the security breach could expose us to risks. Such unauthorized access and a failure to effectively recover from breaches could compromise confidential information, disrupt our business, harm our reputation, result in the loss of customer confidence, business and assets (including trade secrets and other intellectual property), result in regulatory proceedings and legal claims, and have a negative impact on raw material prices, which could continueour financial results.

Our business and operations have been, and may in the future. Further,future, be adversely affected by epidemics, pandemics, outbreaks of disease and other adverse public health developments.

Epidemics, pandemics, outbreaks of novel diseases and other adverse public health developments in countries and states where we operate may arise at any time. Such developments, including the COVID-19 pandemic, have had, and responsesin the future may have, an adverse effect on our business, financial condition and results of operations. These effects include a potentially negative impact on the availability of our key personnel, labor shortages and increased turnover, temporary closures of our facilities or facilities of our business partners, customers, suppliers, third-party service providers or other vendors, and interruption of domestic and global supply chains, distribution channels and liquidity and capital or financial markets. In particular, restrictions on or disruptions of transportation, port closures or increased border controls or closures, or other impacts on domestic and global supply chains or distribution channels, could increase our costs for raw materials and commodity costs, increase demand for raw materials and commodities from competing purchasers, limit our ability to itmeet customer demand or otherwise have significantly limiteda material adverse effect on our business, financial condition and results of operations or preventedcash flows. Precautionary measures that we may take in the movementfuture intended to limit the impact of goods and services worldwide, which has resulted in and could continue toany epidemic, pandemic, disease outbreak or other public health development, may result in disruptions inadditional costs. In addition, such epidemics, pandemics, disease outbreaks or other public health developments may adversely affect economies and financial markets throughout the world, such as the effect that COVID-19 has had on world economies and financial markets, which may affect our supply chainability to obtain additional financing for our businesses and demand for our products and services. The extent to which major public health issues impact our business and our difficultyfinancial results in procuring or inabilitythe future will depend on future developments, which are highly uncertain and cannot be predicted. As a result, it is not possible to procure raw materials necessary forpredict the manufacturing of our products. Theoverall future impact of the COVID-19 pandemicmajor public health issues on our business, liquidity, capital resources and responses to it has increased and could continue to increase the costs of making and distributing our products or result in delays in delivering, or an inability to deliver, them to our customers.financial results.

We experience substantial competition in each of the operating segments and geographic areas in which we operate.

Our wide variety of products are sold in numerous markets, each of which is highly competitive. Our competitive position in markets is, in part, subject to external factors. For example, supply and demand for certain of our products is driven by end-use markets and worldwide capacities which, in turn, impact demand for and pricing of our products. Many of our direct competitors are part of large multinational companies and may have more resources than we do. Any increase in competition may result in lost market share or reduced prices, which could result in reduced profit margins. This may impair the ability to grow or even to maintain current levels of revenues and earnings. While we have an extensive customer base, loss of certain top customers could adversely affect our financial condition and results of operations until such business is replaced, and no assurances can be made that we would be able to regain or replace any lost customers.

Failure to develop and/or acquire new products and protect our intellectual property could negatively impact our future performance and growth. 

Ongoing innovation and product development are important factors in our competitiveness.competitiveness, as is acquisition of new technologies. Failure to create and/or acquire new products and generate new ideas could negatively impact our ability to grow and deliver strong financial results. We may face difficulties marketing products produced using new technologies including, but not limited to, sustainable adhesives, which may adversely impact our sales and financial results.  Failure of the products to work as predicted could lead to liability and damage to our reputation.

We continually apply for and obtain U.S. and foreign patents to protect the results of our research for use in our operations and licensing. We are party to a number of patent licenses and other technology agreements. We rely on patents, confidentiality agreements and internal security measures to protect our intellectual property. Failure to protect this intellectual property could negatively affect our future performance and growth.

Our operations may present health and safety risks.

Notwithstanding our emphasis on the safety of our employees and contractors and the precautions we take related to health and safety, we may be unable to avoid safety incidents relating to our operations that result in injuries or deaths. Certain safety incidents may result in legal or regulatory action that could result in increased expenses or reputational damage. We maintain workers' compensation insurance to address the risk of incurring material liabilities for injuries or deaths, but there can be no assurance that the insurance coverage will be adequate or will continue to be available on terms acceptable to us, or at all, which could result in material liabilities to us for any injuries or deaths. Changes to federal, state and local employee health and safety regulations, and legislative, regulatory or societal responses to safety incidents may result in heightened regulations or public scrutiny that may increase our compliance costs or result in reputational damage.

A failure in our information technology systems could negatively impact our business.

We rely on information technology to record and process transactions, manage our business and maintain the financial accuracy of our records. Our computer systems are subject to damage or interruption from various sources, including power outages, computer and telecommunications failures, computer viruses, security breaches, vandalism, catastrophic events and human error. Interruptions of our computer systems could disrupt our business, for example by leading to plant downtime and/or power outages and could result in the loss of business and cause us to incur additional expense.

Information technology security threats are increasing in frequency and sophistication. Our information technology systems could be breached by unauthorized outside parties or misused by employees or other insiders intent on extracting sensitive information, corrupting information or disrupting business processes. Such unauthorized access and a failure to effectively recover from breaches could compromise confidential information, disrupt our business, harm our reputation, result in the loss of assets including trade secrets and other intellectual property, customer confidence and business, result in regulatory proceedings and legal claims, and have a negative impact on our financial results.

We are in the process of implementing a global Enterprise Resource Planning (“ERP”) system, including upgrading to SAP S/4HANA® which is anticipated to occur at the beginning of fiscal 2025, that we refer to as Project ONE, which will upgrade and standardize our information system. Implementation of Project ONE began in our North America adhesives business in 2014 and, through 2021,2023, we completed implementation of this system in various parts of our business including Latin America (except Brazil), Australia and various other businesses in North America and EIMEA.Europe, India, Middle East and Africa (EIMEA). During 20222024 and beyond, we will continue implementation in North America, EIMEAAmerica; Europe, India, the Middle East and Africa ("EIMEA"); Brazil and Asia Pacific.

Any delays or other failure to achieve our implementation goals may adversely impact our financial results. In addition, the failure to either deliver the application on time or anticipate the necessary readiness and training needs could lead to business disruption and loss of business. Failure or abandonment of any part of the ERP system could result in a write-off of part or all of the costs that have been capitalized on the project.

Risks associated with acquisitions could have an adverse effect on us and the inability to execute organizational restructuring may affect our results.

As part of our growth strategy, from time to time, we have made, and will likely continue to make, acquisitions of complementary businesses or products. The ability to grow through acquisitions depends upon our ability to identify, negotiate, complete and integrate suitable acquisitions. If we fail to successfully integrate acquisitions into our existing business, our results of operations and our cash flows could be adversely affected. Our acquisition strategy also involves other risks and uncertainties, including distraction of management from current operations, greater than expected liabilities and expenses, inadequate return on capital, unidentified issues not discovered in our investigations and evaluations of those strategies and acquisitions, and difficulties implementing and maintaining consistent standards, controls, procedures, policies and systems. Future acquisitions could result in additional debt and other liabilities, and increased interest expense, restructuring charges and amortization expense related to intangible assets.

Our growth strategy depends in part on our ability to further penetrate markets outside the United States, where there is the potential for significant economic and political disruptions. Our operations in these markets may be subject to greater risks than those faced by our operations in the United States, including political and economic instability, project delay or abandonment due to unanticipated government actions, inadequate investment in infrastructure, undeveloped property rights and legal systems, unfamiliar regulatory environments, relationships with local partners, language and cultural differences and increased difficulty recruiting, training and retaining qualified employees.

In addition, our profitability is dependent on our ability to drive sustainable productivity improvements such as cost savings through organizational restructuring. Delays or unexpected costs may prevent us from realizing the full operational and financial benefits of such restructuring initiatives and may potentially disrupt our operations.

Macroeconomic Risks

Uncertainties in foreigneconomic,political, regulatory andsocial conditionsand fluctuations in foreign currency may adversely affectour results.

Approximately 56 percent, or $2.0 billion, of our net revenue was generated outside the United States in 2023. International operations could be adversely affected by changes in economic, political, regulatory, and social conditions, especially in Brazil, Russia, China, the Middle East, including Turkey and Egypt, and other developing or emerging markets where we do business. An economic downturn in the businesses or geographic areas in which we sell our products could reduce demand for these products and result in a decrease in sales volume that could have a negative impact on our results of operations. Product demand often depends on end-use markets. Economic conditions that reduce consumer confidence or discretionary spending may reduce product demand. Challenging economic conditions may also impair the ability of our customers to pay for products they have purchased, and as a result, our reserves for doubtful accounts and write-offs of accounts receivable may increase. In addition, trade protection measures, anti-bribery and anti-corruption regulations, restrictions on repatriation of earnings and cash, currency controls implemented by foreign governments, differing intellectual property rights and changes in legal and regulatory requirements that restrict the sales of products or increase costs could adversely affect our results of operations.

Fluctuations and volatility in exchange rates between the U.S. dollar and other currencies could potentially result in increases or decreases in net revenue, cost of raw materials and earnings and may adversely affect the value of our assets outside the United States. In 2023, the change in foreign currencies negatively impacted our net revenue by approximately $88.5 million. In 2023, we spent approximately $1.9 billion for raw materials worldwide of which approximately $1.0 billion was purchased outside the United States. Based on 2023 financial results, a hypothetical one percent change in our cost of sales due to foreign currency rate changes would have resulted in a change in net income of approximately $9.4 million or $0.17 per diluted share. Although we utilize risk management tools, including hedging, as appropriate, to mitigate market fluctuations in foreign currencies, any changes in strategy in regard to risk management tools can also affect revenue, expenses and results of operations and there can be no assurance that such measures will result in cost savings or that all market fluctuation exposure will be eliminated.

Distressed financial markets may result in dramatic deflation of financial asset valuations and high interest rates may disrupt the availability of capital.

Adverse equity market conditions and volatility in the credit markets could have a negative impact on the value of our pension trust assets, our future estimated pension liabilities and other postretirement benefit plans. In addition, we could be required to provide increased pension plan funding. As a result, our financial results could be negatively impacted.

In a rising interest rate environment, more costly debt and reduced access to capital markets may affect our ability to invest in strategic growth initiatives such as acquisitions. In addition, the reduced credit availability could limit our customers’ ability to invest in their businesses, refinance maturing debt obligations, or meet their ongoing working capital needs. If these customers do not have sufficient access to the financial markets, demand for our products may decline.

The military conflicts betweenRussiaand Ukraine and Israel and Hamas, and the global response to these events, could adversely impact our revenues, gross margins and financial results.

The U.S. government and other nations have imposed significant restrictions on most companies’ ability to do business in Russia as a result of the military conflict between Russia and Ukraine. Increases in energy demand and supply disruptions caused by the Russia and Ukraine conflict have resulted in significantly higher energy prices, particularly in Europe. Further, in October 2023, a military conflict commenced between Israel and Hamas. It is not possible to predict the broader or longer-term consequences of these conflicts, which could include further sanctions, embargoes, regional instability, energy shortages, geopolitical shifts and adverse effects on macroeconomic conditions, security conditions, currency exchange rates and financial markets. Such geopolitical instability and uncertainty could have 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 including closures of air space, and could increase the costs, risks and adverse impacts from these new challenges. We may also be the subject of increased cyber-attacks.  While the countries involved in these conflicts do not constitute a material portion of our business, a significant escalation or expansion of economic disruption or the conflicts' current scope could have a material adverse effect on our results of operations.

Catastrophic events could disrupt our operations or the operations of our suppliers or customers, having a negative impact on our financial results.

Unexpected events, including global pandemics, natural disasters and severe weather events, fires or explosions at our facilities or those of our suppliers, acts of war or terrorism, supply disruptions or breaches of security of our information technology systems could increase the cost of doing business or otherwise harm our operations, our customers and our suppliers. Such events could reduce demand for our products or make it difficult or impossible for us to receive raw materials from suppliers and deliver products to our customers.

Legal and Regulatory Risks

The impact of changing laws or regulations or the manner of interpretation or enforcement of existing laws or regulations could adversely impact our financial performance and restrict our ability to operate our business or execute our strategies.

New laws or regulations, or changes in existing laws or regulations or the manner of their interpretation or enforcement, could increase our cost of doing business and restrict our ability to operate our business or execute our strategies. In addition, compliance with laws and regulations is complicated by our substantial global footprint, which will require significant and additional resources to ensure compliance with applicable laws and regulations in the various countries where we conduct business.

Our global operations expose us to trade and economic sanctions and other restrictions imposed by the U.S., the EU and other governments and organizations. The U.S. Departments of Justice, Commerce, State, Homeland Security, and Treasury and other federal agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of economic sanctions laws, export control laws, the FCPA and other federal statutes and regulations, including those established by the OFAC. Under these laws and regulations, as well as other anti-corruption laws, anti-money-laundering laws, export control laws, customs laws, sanctions laws and other laws governing our operations, various government agencies may require export licenses, may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries or with sanctioned persons or entities and modifications to compliance programs, including import restrictions, which may increase compliance costs, and may subject us to fines, penalties and other sanctions. A violation of these laws, regulations, policies or procedures could adversely impact our business, results of operations and financial condition.

Although we have implemented policies and procedures in these areas, we cannot assure that our policies and procedures are sufficient or that directors, officers, employees, representatives, manufacturers, suppliers and agents have not engaged and will not engage in conduct in violation of such policies and procedures.

Costs and expenses resulting from compliance with environmental laws and regulations may negatively impact our operations and financial results.

We are subject to numerous environmental laws and regulations that impose various environmental controls on us or otherwise relate to environmental protection, the sale and export of certain chemicals or hazardous materials, and various health and safety matters. The costs of complying with these laws and regulations can be significant and may increase as applicable requirements and their enforcement become more stringent and new rules are implemented. Adverse developments and/or periodic settlements could negatively impact our results of operations and cash flows. See Item 3. Legal Proceedings for a discussion of current environmental matters.

Climate change, or legal, regulatory or market measures to address climate change, may materially adversely affect our financial condition and business operations.

Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to our future operations from natural disasters and extreme weather conditions, such as hurricanes, tornadoes, earthquakes, wildfires or flooding. Such extreme weather conditions could pose physical risks to our facilities and disrupt operation of our supply chain and may increase operational costs. The impacts of climate change on global water resources may result in water scarcity, which could in the future impact our ability to access sufficient quantities of water in certain locations and result in increased costs. Concern over climate change couldcontinues to result in new legal or regulatory requirements designed to mitigate the effects of climate change on the environment. Ifenvironment, such laws oras the EU's CSRD, California’s Climate Corporate Data Accountability Act and Climate Related Financial Risk Act, and similar regulations under consideration by the SEC. We are more stringent than current legal or regulatory requirements, we may experienceexperiencing increased compliance burdens and costs to meet the regulatory obligations and these regulatory obligations may adversely affect raw material sourcing, manufacturing operations and the distribution of our products.

Our business exposes us to potential product liability, warranty, and tort claims, and recalls, which may negatively impact our operations, financial results, and reputation.

The development, manufacture and sale of adhesives, sealants, and other specialty chemical products by us, including products produced for the medical device, automotive, food and beverage, aerospace and defense, construction, and hygiene products end markets, involves a risk of exposure to product liability, warranty, and tort claims, product recalls, product seizures and related adverse publicity. A product liability, warranty, or tort claim or judgment against us could also result in substantial and unexpected expenditures, affect customer confidence in our products, and divert management's attention from other responsibilities. Although we maintain product liability insurance, there can be no assurance that the level of coverage is adequate, that coverage will apply, or that we will be able to continue to maintain our existing insurance or obtain comparable insurance at a reasonable cost, if at all. We also have contracting policies and controls in place to limit our exposure to third party claims, though we might not always be able to limit our exposure to those claims.

We have lawsuits and claims against us with uncertain outcomes.

Our operations from time to time are parties to or targets of lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which are handled and defended in the ordinary course of business. The results of any future litigation or settlement of such lawsuits and claims are inherently unpredictable, but such outcomes could be adverse and material in amount. See Item 3. Legal Proceedings for a discussion of current litigation.

The Company’sCompany’s effective tax rate could be volatile and materially change as a result of the adoption of new tax legislation and other factors.

A change in tax laws is one of many factors that impact the Company’s effective tax rate. The U.S. Congress and other government agencies in jurisdictions where the Company does business have had an extended focus on issues related to the taxation of multinational corporations. As a result, the tax laws in the U.S. and other countries in which the Company does business could change, and any such changes could adversely impact our effective tax rate, financial condition and results of operations.

The Organization for Economic Co-operation and Development ("OECD"), an international association of 38 countries including the United States, has proposedfinalized and adopted numerous changes to numerous long-standing tax principles. These proposals, if finalizedCertain of these changes become effective for the Company in 2025 and adopted by the associated countries, will likely increase tax uncertainty and may adversely affect our provision for income taxes.

The current U.S. presidential administration could enact changes in tax laws that could negatively impact the Company’s effective tax rate. Prior to the U.S. presidential election, President Biden proposed an increase in the U.S. corporate income tax rate from 21% to 28%, doubling the rate of tax on certain earnings of foreign subsidiaries, the creation of a 10% penalty on certain imports and a 15% minimum tax on worldwide book income. Additionally, the proposed changes include significant provisions related to the deductibility of interest. If any or all of these (or similar) proposals are ultimately enacted into law, in whole or in part, they could have a negative impact to the Company’s effective tax rate.

AdditionalAdditional income tax expense or exposure to additional income tax liabilities could have a negative impact on our financial results. 

We are subject to income tax laws and regulations in the United States and various foreign jurisdictions. Significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Our income tax liabilities are dependent upon the location of earnings among these different jurisdictions. Our income tax provision and income tax liabilities could be adversely affected by the jurisdictional mix of earnings, changes in valuation of deferred tax assets and liabilities and changes in tax laws and regulations. In the ordinary course of our business, we are also subject to continuous examinations of our income tax returns by tax authorities. Although we believe our tax estimates are reasonable, the final results of any tax examination or related litigation could be materially different from our related historical income tax provisions and accruals. Adverse developments in an audit, examination or litigation related to previously filed tax returns, or in the relevant jurisdiction’s tax laws, regulations, administrative practices, principles and interpretations could have a material effect on our results of operations and cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods. The decision to repatriate foreign earnings could result in higher withholding taxes.

Financial Risks

We may be required to record impairment charges on our goodwill or long-lived assets. 

Weak demand may cause underutilization of our manufacturing capacity or elimination of product lines; contract terminations or customer shutdowns may force sale or abandonment of facilities and equipment; or other events associated with weak economic conditions or specific product or customer events may require us to record an impairment on tangible assets, such as facilities and equipment, as well as intangible assets, such as intellectual property or goodwill, which would have a negative impact on our financial results.

Our current indebtedness could have a negative impact on our liquidity or restrict our activities.

Our current indebtedness contains various covenants that limit our ability to engage in specified types of transactions. Our overall leverage and the terms of our financing arrangements could:

In addition, the restrictive covenants require us to maintain specified financial ratios and satisfy other financial condition tests. Our ability to meet those financial ratios and tests will depend on our ongoing financial and operating performance, which, in turn, will be subject to economic conditions and to financial, market and competitive factors, many of which are beyond our control. A breach of any of these covenants could result in a default under the instruments governing our indebtedness.

The interest rates of our term loans are priced using a spread over LIBOR.

LIBOR, the London Interbank Offered Rate, is the basic rate of interest used in lending between banks on the London interbank market and is widely used as a reference for setting the interest rate on loans globally. We typically use LIBOR as a reference rate or index in our term loans such that the interest due to our creditors pursuant to a term loan extended to us is calculated using LIBOR. Most of our term loan agreements contain a stated minimum value for LIBOR.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates the entity that calculates LIBOR, announced that LIBOR should be phased out by the end of 2021. Subsequently, on March 5, 2021, LIBOR’s administrator announced that publication of overnight, one-month, three-month, six-month and 12-month U.S. dollar LIBOR would cease immediately following publication of such interest rates on June 30, 2023, and that publication of all other currency and tenor variants would cease immediately following publication on December 31, 2021.

The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions and other market participants, is considering replacing U.S. dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by Treasury securities (“SOFR”). Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question. SOFR is observed and backward looking, which stands in contrast with LIBOR under the current methodology, which can be an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members. Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR). The SOFR rate is therefore likely to be lower than LIBOR rates and is less likely to correlate with the funding costs of financial institutions.

If LIBOR ceases to exist prior to the maturity of our contracts, we will be required to substitute an index such as the Prime Rate or renegotiate our credit agreements that utilize LIBOR as the reference rate, and substitute an index to replace LIBOR with the new standard that is established. If we borrow under the Prime Rate, we will see increased borrowing costs until the agreements are amended or renegotiated to incorporate the new SOFR borrowing rate or another substitute index.

MacroeconomicRisks

Uncertainties in foreign economic,political, regulatory and social conditions and fluctuations in foreign currency may adversely affect our results.

Approximately 57 percent, or $1.9 billion, of our net revenue was generated outside the United States in 2021. International operations could be adversely affected by changes in economic, political, regulatory, and social conditions, especially in Brazil, Russia, China, the Middle East, including Turkey and Egypt, and other developing or emerging markets where we do business. An economic downturn in the businesses or geographic areas in which we sell our products could reduce demand for these products and result in a decrease in sales volume that could have a negative impact on our results of operations. Product demand often depends on end-use markets. Economic conditions that reduce consumer confidence or discretionary spending may reduce product demand. Challenging economic conditions may also impair the ability of our customers to pay for products they have purchased, and as a result, our reserves for doubtful accounts and write-offs of accounts receivable may increase. In addition, trade protection measures, anti-bribery and anti-corruption regulations, restrictions on repatriation of earnings, differing intellectual property rights and changes in legal and regulatory requirements that restrict the sales of products or increase costs could adversely affect our results of operations.

Fluctuations in exchange rates between the U.S. dollar and other currencies could potentially result in increases or decreases in net revenue, cost of raw materials and earnings and may adversely affect the value of our assets outside the United States. In 2021, the change in foreign currencies positively impacted our net revenue by approximately $64.0 million. In 2021, we spent approximately $1.8 billion for raw materials worldwide of which approximately $996.7 million was purchased outside the United States. Based on 2021 financial results, a hypothetical one percent change in our cost of sales due to foreign currency rate changes would have resulted in a change in net income of approximately $9.4 million or $0.17 per diluted share. Although we utilize risk management tools, including hedging, as appropriate, to mitigate market fluctuations in foreign currencies, any changes in strategy in regard to risk management tools can also affect revenue, expenses and results of operations and there can be no assurance that such measures will result in cost savings or that all market fluctuation exposure will be eliminated.

Distressed financial markets may result in dramatic deflation of financial asset valuations and a general disruption in capital markets.

Adverse equity market conditions and volatility in the credit markets could have a negative impact on the value of our pension trust assets, our future estimated pension liabilities and other postretirement benefit plans. In addition, we could be required to provide increased pension plan funding. As a result, our financial results could be negatively impacted. Reduced access to capital markets may affect our ability to invest in strategic growth initiatives such as acquisitions. In addition, the reduced credit availability could limit our customers’ ability to invest in their businesses, refinance maturing debt obligations, or meet their ongoing working capital needs. If these customers do not have sufficient access to the financial markets, demand for our products may decline.

Catastrophic events could disrupt our operations or the operations of our suppliers or customers, having a negative impact on our financial results.

Unexpected events, including global pandemics, natural disasters and severe weather events, fires or explosions at our facilities or those of our suppliers, acts of war or terrorism, supply disruptions or breaches of security of our information technology systems could increase the cost of doing business or otherwise harm our operations, our customers and our suppliers. Such events could reduce demand for our products or make it difficult or impossible for us to receive raw materials from suppliers and deliver products to our customers.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Principal executive offices and central research facilities are located in the St. Paul, Minnesota area. These facilities are company-owned. Manufacturing operations are carried out at 3436 plants located throughout the United States and at 3545 plants located in 2125 other countries. In addition, numerous sales and service offices are located throughout the world. We believe that the properties owned or leased are suitable and adequate for our business. Operating capacity varies by product line, but additional production capacity is available for most product lines by increasing the number of shifts worked. The following is a list of our manufacturing plants as of November 27, 2021December 2, 2023 (each of the listed properties are owned by us, unless otherwise specified):

1 Leased Property

2 Idle Property

Item 3. Legal Proceedings

Environmental Matters

From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. Also, from time to time, we are identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. 

Currently, we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites.

We are also engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish a financial provision. It is reasonably possible that we may have additional liabilities related to these known environmental matters. However, the full extent of our future liability for environmental matters is difficult to predict because of uncertainty as to the cost of investigation and clean up of the sites, our responsibility for such hazardous substances and the number of and financial condition of other potentially responsible parties.

While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow. However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods.

Other Legal Proceedings

From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including asbestos, will not have a material adverse effect on our results of operations, financial condition or cash flow. However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods.

For additional information regarding environmental matters and other legal proceedings, see Note 14 to ourthe Consolidated Financial Statements.

Item 4. Mine Safety Disclosures

Not applicable.

Part II.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the New York Stock Exchangeunder the symbol FUL. As of January 20, 202217, 2024, there were 1,3961,268 common shareholders of record for our common stock.

Issuer Purchases of Equity Securities

Information on our purchases of equity securities during the fourth quarter of 20212023 is as follows:

										(c)				(d)
										Total Number of				Approximate Dollar
		(a)								Shares				Value of Shares that
		Total				(b)				Purchased as				may yet be
		Number of				Average				Part of a Publicly				Purchased Under the
		Shares				Price Paid				Announced Plan				Plan or Program
Period		Purchased				per Share				or Program				(thousands)
August 29, 2021 - October 2, 2021			103			$	66.01				-			$	187,170
October 3, 2021 - October 30, 2021			-			$	-				-			$	187,170
October 31, 2021 - November 27, 2021			100			$	72.09				-			$	187,170

										Total Number of				Approximate Dollar
										Shares				Value of Shares that
		Total								Purchased as				may yet be
		Number of				Average				Part of a Publicly				Purchased Under the
		Shares				Price Paid				Announced Plan				Plan or Program
Period		Purchased1				per Share				or Program				(thousands)
September 3, 2023 - October 7, 2023			16			$	68.61				-			$	300,000
October 8, 2023 - November 4, 2023			70			$	65.93				-			$	300,000
November 5, 2023 - December 2,2023			8			$	75.41				-			$	300,000

¹ The total number of shares purchased are shares withheld to satisfy the employees' withholding taxes upon vesting of restricted stock. Repurchases of common stock are made to support our stock-based employee compensation plans and for other corporate purposes. Upon vesting of restricted stock awarded to employees, shares are withheld to cover the employees' minimum withholding taxes.

 

On April 6, 2017,7, 2022, the Board of Directors authorized a new share repurchase program of up to $200.0$300.0 million of our outstanding common shares for a period of up to five years. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reducedreduce our common stock for the par value of the shares with the excess being applied against additional paid in capital. This authorization replaces the September 30, 2010April 6, 2017 authorization to repurchase shares.

 

1118

---

Table of Contents

 

Total Shareholder Return Graph

 

The line graph below compares the cumulative total shareholder return on our common stock for the last five fiscal years with cumulative total return on the S&P Small Cap 600 Index and Dow Jones U.S. Specialty Chemicals Index. This graph assumes a $100 investment in each of H.B. Fuller, the S&P Small Cap 600 Index and the Dow Jones U.S. Specialty Chemicals Index at the close of trading on December 3, 2016,1, 2018, and also assumes the reinvestment of all dividends.

 

 

Item 6. Selected Financial Data

 

Reserved.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 

Overview

 

H.B. Fuller Company is a global formulator, manufacturer and marketer of adhesives and other specialty chemical products. We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. 

 

The Hygiene, Health and Consumable Adhesives operating segment manufactures and supplies adhesives products in the assembly, packaging, converting, nonwoven and hygiene, health and beauty, flexible packaging, graphic arts and envelope markets. The Engineering Adhesives operating segment provides high-performance adhesives to the transportation, electronics, medical, clean energy, aerospace and defense, performance wood, insulating glass, textile, appliance and heavy machinery markets. The Construction Adhesives operating segment manufactures and provides specialty adhesives, sealants, tapes, mortars, grouts, and application devices for commercial building roofing systems, heavy infrastructure projects, road/highway/airport transportation applications, telecom/5G utilities, industrial LNG plants, building envelope applications, HVAC insulation systems, and for both residential and commercial flooring underlayment solutions.

 

Total Company

 

When reviewing our financial statements, it is important to understand how certain external factors impact us. These factors include:

 

●

Changes in the prices of our raw materials that are primarily derived from refining crude oil and natural gas,

 

19

---

Table of Contents

●

Global supply of and demand for raw materials,

●

Economic growth rates, and

●

Currency exchange rates compared to the U.S. dollardollar.

 

We purchase thousands of raw materials, the majority of which are petroleum/natural gas derivatives. The price of these derivatives impacts the cost of our raw materials. However, the supply of and demand for key raw materials has a greater impact on our costs. As demand increases in high-growth areas, the supply of key raw materials may tighten, resulting in certain materials being put on allocation. Natural disasters, such as hurricanes, also can have an impact as key raw material producers are shut down for extended periods of time. We continually monitor capacity utilization figures, market supply and demand conditions, feedstock costs and inventory levels, as well as derivative and intermediate prices, which affect our raw materials. With approximately 75 percent of our cost of sales accounted for by raw materials, our financial results are extremely sensitive to changing costs in this area.

 

12

---

Table of Contents

The pace of economic growth directly impacts certain industries to which we supply products. For example, adhesives-related revenues from durable goods customers in areas such as appliances, furniture and other woodworking applications tend to fluctuate with the overall economic activity. In business components such as Construction Adhesives and insulating glass in Engineering Adhesives, revenues tend to move with more specific economic indicators such as housing starts and other construction-related activity.

 

The movement of foreign currency exchange rates as compared to the U.S. dollar impacts the translation of the foreign entities’ financial statements into U.S. dollars. As foreign currencies weaken against the U.S. dollar, our revenues and costs decrease as the foreign currency-denominated financial statements translate into fewer U.S. dollars. The fluctuations of the Euro, and the Chinese renminbi, British pound sterling, Egyptian pound, Turkish lira, Brazilian real, Canadian dollar, Australian dollar and Mexican peso against the U.S. dollar have the largest impact on our financial results as compared to all other currencies. In 2021,2023, currency fluctuations had a positive impactnegative impact on net revenue of approximately $64.0$88.5 million as compared to 2020.2022.

 

Key financial results andtransactions for 20212023 included the following:

 

●

Net revenue increased 17.5decreased 6.4 percent from 20202022 primarily driven by a 9.6an 8.4 percent increasedecrease in sales volume and a 5.62.4 percent decrease due to currency fluctuations, partially offset by a 3.3 percent increase due to acquisitions and 2.9 percent increase in product pricingpricing. Additionally, in 2022, we had a 53-week year compared to a 52-week year in 2023, and a 2.32023 revenue was lower by 1.8 percent increase due to currency fluctuations.the extra week in 2022.

 

●

Gross profit margin decreasedincreased to 25.8 percent from 27.128.7 percent in 2020 primarily2023 from 25.7 percent in 2022, due to higheran increase in product pricing and lower raw material costs partially offset by higher net revenue.the impact of lower sales volume.

 

●

Cash flow generated by operating activities was $213.3$378.4 million in 20212023 as compared to $331.6$256.5 million in 2020.2022.

 

Our total year organic salesrevenue growth, which we define as the combined variances from sales volume and product pricing, increased 15.2decreased 5.5 percent for 20212023 compared to 2020.2022 due to a decrease in sales volume, partially offset by an increase in product pricing.

 

In 2021,2023, our diluted earnings per share was $2.97$2.59 compared to $2.36$3.26 in 2020.2022. The higherlower earnings per share in 20212023 compared to 20202022 was primarily due to higherlower net revenue, higher otheroperating costs, interest expense and income net and lower interesttax expense, partially offset by higherlower raw material and operating costs and higher income tax expense.costs.

 

ChangesInformation pertaining to fiscal year 2021 was included in Accounting Principles

In the first quarterCompany’s Annual Report on Form 10-K for the year ended December 3, 2022, under Part II, Item 7 “Management’s Discussion and Analysis of 2021, we adopted new accounting standards related toFinancial Position and Results of Operations,” which was filed with the measurement of credit lossesSEC on financial statements requiring financial assets measured at amortized cost basis be presented at the net amount expected to be collected. Prior periods were not restated for this adoption.

In the first quarter of 2020, we adopted new accounting standards related to the accounting for leases which requires us to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements. Prior periods were not restated for this adoption.January 24, 2023.

 

Project ONE

 

In December 2012, our Board of Directors approved a multi-year project to replace and enhance our existing core information technology platforms. The scope for this project includes most of the basic transaction processing for the company including customer orders, procurement, manufacturing and financial reporting. The project envisions harmonized business processes for all of our operating segments supported with one standard software configuration. The execution of this project, which we refer to as Project ONE, is being supported by internal resources and consulting services. Implementation of Project ONE began in our North America adhesives business in 2014 and, through 2021,2023, we completed implementation of this system in various parts of our business including Latin America (except Brazil), Australia, and various other businesses in North America and EIMEA. During 20222024 and beyond, we will continue implementation in North America, EIMEA, Brazil and Asia Pacific.

20

---

Table of Contents

 

Total expenditures for Project ONE are estimated to be $170$240 to $185$260 million, of which 55-60%60-65% is expected to be capital expenditures. Our total project-to-date expenditures are approximately $133 approximately $200 million, of which approximately $73$120 million are capital expenditures. Given the complexity of the implementation, the total investment to complete the project may exceed our estimate.

 

Restructuring PlanPlans

 

During the fourth quartersecond and third quarters of 2019, we2023, the Company approved a restructuring planplans (the “Plans”) related to organizational changes and other actions to optimize operations in connection withand integrate acquired businesses. In implementing the realignment ofPlans, the Company into three global business units (“2020 Restructuring Plan”). We have incurred costs of $18.6 million under this plan as of November 27, 2021. We expectcurrently expects to incur total costs of approximately $20.0$39.1 million to $44.1 million ($15.830.4 million to $34.4 million after-tax), which includesinclude (i) cash expenditures of approximately $28.4 million to $29.6 million ($22.0 million to $23.0 million after-tax) for severance and related employee costs globally and (ii) other restructuring costs related to the streamlining of processes and other restructuring-related costs.the payment of anticipated income taxes in certain jurisdictions related to the Plans. We have incurred costs of $27.0 million under the Plans as of December 2, 2023. The 2020 Restructuring Plan wasPlans began to be implemented in the fourthsecond quarter of 2019fiscal year 2023 and isare currently expected to be completed during fiscal year 2026. The restructuring costs will be spread across the next several fiscal quarters as the measures are implemented with the majority of the charges recognized and cash payments occurring in fiscal 2022.2023 and 2024.

 

13

---

Table of Contents

Critical Accounting Policies and Significant Estimates

 

Management’s discussion and analysis of our results of operations and financial condition are based upon the Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We believe the critical accounting policies and areas that require the most significant judgments and estimates to be used in the preparation of the Consolidated Financial Statements relate to goodwill impairment; pension and other postretirement plans;assumptions; long-lived assets recoverability; valuation of product, environmental and other litigation liabilities; valuation of deferred tax assets and accuracy of tax contingencies; and valuation of acquired assets and liabilities.

 

Goodwill

 

Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a purchase business combination. Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (the component level). Reporting units are determined by the discrete financial information available for the component and whether it is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. Our reporting units are as follows: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives.

 

We evaluate our goodwill for impairment annually at the beginning of the fourth quarter or earlier upon the occurrence of substantive unfavorable changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization. The quantitative impairment test requires judgment, including the identification of reporting units, the assignment of assets, liabilities and goodwill to reporting units, and the determination of fair value of each reporting unit. The impairment test requires the comparison of the fair value of each reporting unit with its carrying amount, including goodwill. In performing the impairment test, we determined the fair value of our reporting units through the income approach by using discounted cash flow (“DCF”) analyses. Determining fair value requires the Company to make judgments about appropriate discount rates, perpetualforecasted revenue and related revenue growth ratesrate, the earnings before interest, taxes, depreciation and amortization ("EBITDA") margins rate and the amount and timingweighted average cost of expected future cash flows.capital. The cash flows employed in the DCF analysis for each reporting unit are based on the reporting unit's budget, long-term business plan and recent operating performance. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting unit and market conditions. Given the inherent uncertainty in determining the assumptions underlying a DCF analysis, actual results may differ from those used in our valuations. In assessing the reasonableness of the determined fair values, we also reconciled the aggregate determined fair value of the Company to the Company's market capitalization, which, at the date of our 20212023 impairment test, included a 2826 percent control premium.

 

21

---

Table of Contents

For the 20212023 impairment test, the fair value of the reporting units exceeded the respective carrying values by 388 percent to 129 percent ("headroom").140 percent. Significant assumptions used in the DCF analysis included discount rates that ranged from 8.210.1 percent to 9.112.3 percent and long-term revenue growth rates. The Construction Adhesives reporting unit, with $432.8 million of goodwill assigned to it as of December 2, 2023, exceeded the respective carrying value by 8 percent. An increase in the discount rate of 10 basis points or a decrease in the long-term growth rates of 10 percent would result in the fair value of the Construction Adhesives reporting unit falling below its carrying value. The Engineering Adhesives and Hygiene, Health and Consumable Adhesives reporting units had significant fair value in excess of carrying value.

Management will continue to monitor these reporting units for changes in the business environment that could impact recoverability. The recoverability of goodwill is dependent upon the continued growth of cash flows from our business activities. If the economy or business environment falter and we are unable to achieve our assumed revenue growth rates or profit margin percentages, our projections used would need to be remeasured, which could impact the carrying value of our goodwill in one or more of our reporting units. Most significantly, for our Construction Adhesives reporting unit, a decrease in the planned volume revenue growth would negatively impact the fair value of the reporting unit and the calculation of excess carrying value.

    

See Note 5 to the Consolidated Financial Statements for further information regarding goodwill.

 

Pension and Other Postretirement Plan Assumptions

 

We sponsor defined-benefit pension plans in both the U.S. and non-U.S. entities. Also in the U.S., we sponsor other postretirement plans for health care and life insurance benefits. Expenses and liabilities for the pension plans and other postretirement plans are actuarially calculated. These calculations are based on our assumptions related to the discount rate, expected return on assets, projected salary increases and health care cost trend rates. Note 10 to the Consolidated Financial Statements includes disclosure of assumptions employed in these measurements for both the non-U.S. and U.S. plans.

 

The discount rate assumption is determined using an actuarial yield curve approach, which results in a discount rate that reflects the characteristics of the plan. The approach identifies a broad population of corporate bonds that meet the quality and size criteria for the particular plan. We use this approach rather than a specific index that has a certain set of bonds that may or may not be representative of the characteristics of our particular plan. A higher discount rate reduces the present value of the pension obligations. The discount rate for the U.S. pension plan was 5.66 percent at December 2, 2023, 5.36 percent at December 3, 2022 and 2.76 percent at November 27, 2021, 2.53 percent at November 28, 2020 and 3.19 percent at November 30, 2019.2021. Net periodic pension cost for a given fiscal year is based on assumptions developed at the end of the previous fiscal year. A discount rate change of 0.5 percentage points at November 27, 2021December 2, 2023 would impact U.S. pension and other postretirement plan (income) expense by approximately$0.1 million (pre-tax) in fiscal 2021.2024. Discount rates for non-U.S. plans are determined in a manner consistent with the U.S. plans.

 

The expected long-term raterate of return on plan assets assumption for the U.S. pension plan was 7.75 percent in 2023, 7.00 percent in 2022 and 7.25 percent in 2021 and 7.50 in 2020 and 2019.. Our expected long-term rate of return on U.S. plan assets was based on our target asset allocation assumption of 6055 percent equities and 4045 percent fixed-income. Management, in conjunction with our external financial advisors, determines the expected long-term rate of return on plan assets by considering the expected future returns and volatility levels for each asset class that are based on historical returns and forward looking observations. For 2021,2023, the expected long-term rate of return on the target equities allocation was 8.008.50 percent and the expected long-term rate of return on the target fixed-income allocation was 3.905.60 percent. The total plan rate of return assumption included an estimate of the effect of diversification and the plan expense. A change of 0.5 percentage points for the expected return on assets assumption would impact U.S. net pension and other postretirement plan expense by approximately $2.7$2.3 million (pre-tax).

 

Management, in conjunction with our external financial advisors, uses the actual historical rates of return of the asset categories to assess the reasonableness of the expected long-term rate of return on plan assets. The most recent 10-year and 20-year historical equity returns are shown in the table below. Our expected rate of return on our total portfolio is consistent with the historical patterns observed over longer time frames.

 

		Total								Fixed				Total								Fixed
U.S. Pension Plan Historical Actual Rates of Return		Portfolio				Equities				Income				Portfolio				Equities				Income
10-year period			9.5	%			9.0	%			6.7	%			5.4	%			6.9	%			3.4	%
20-year period			7.2	%			7.3	%			7.9	%*			6.5	%			7.1	%			5.5	%*

 

* Beginning in 2006,2022, our target allocation migrated from 100 percent equities to our current allocation of 60 percent equities and 40 percent fixed-income.fixed-income to 55 percent equities and 45 percent fixed income. The historical actual rate of return for the fixed income of 8.25.5 percent is since inception (15(17 years, 11 months).

 

1422

---

Table of Contents

 

The expected long-term rate of return on plan assets assumption for non-U.S. pension plans was a weighted-average of 5.02 percent in 2023 compared to 3.49 percent in 2022 and 6.15 percent in 2021 compared to 6.23 percent in 2020 and 6.21 percent in 2019.2021. The expected long-term rate of return on plan assets assumption used in each non-U.S. plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the effect of active management of the plan’s assets. Our largest non-U.S. pension plans are in the United Kingdom and Germany. The expected long-term rate of return on plan assets for the United Kingdom was 6.754.50 percent and the expected long-term rate of return on plan assets for Germany was 5.50 percent. Management, in conjunction with our external financial advisors, uses actual historical returns of the asset portfolio to assess the reasonableness of the expected rate of return for each plan.

 

The projected salary increase assumption is based on historic trends and comparisons to the external market. Higher rates of increase result in higher pension expenses. As this rate is also a long-term expected rate, it is less likely to change on an annual basis. Under the U.S. pension plan, the compensation amount was locked-in as of May 31, 2011 and thus the benefit no longer includes compensation increases. The 4.50 percent rate for 2020 and 2019 is for the supplemental executive retirement plan only; for 2021, there is no compensation increase as subsequent to November 27, 2021, there were no active employees in the supplemental executive retirement plan. Projected salary increase assumptions for non-U.S. plans are determined in a manner consistent with the U.S. plans.

 

Recoverability of Long-Lived Assets

 

The assessment of the recoverability of long-lived assets reflects our assumptions and estimates. Factors that we must estimate when performing impairment tests include sales volume, prices, inflation, currency exchange rates, tax rates and capital spending. Significant judgment is involved in estimating these factors, and they include inherent uncertainties. The measurement of the recoverability of these assets is dependent upon the accuracy of the assumptions used in making these estimates and how the estimates compare to the eventual future operating performance of the specific businesses to which the assets are attributed.

 

Judgments made by us include the expected useful lives of long-lived assets. The ability to realize undiscounted cash flows in excess of the carrying amounts of such assets is affected by factors such as the ongoing maintenance and improvement of the assets, changes in economic conditions and changes in operating performance.

 

Product, Environmental and Other Litigation Liabilities

 

As disclosed in Item 3. Legal Proceedings and in Note 1 and Note 14 to the Consolidated Financial Statements, we are subject to various claims, lawsuits and other legal proceedings. Reserves for loss contingencies associated with these matters are established when it is determined that a liability is probable and the amount can be reasonably estimated. The assessment of the probable liabilities is based on the facts and circumstances known at the time that the financial statements are being prepared. For cases in which it is determined that a liability is probable but only a range for the potential loss exists, the minimum amount of the range is recorded and subsequently adjusted as better information becomes available.

 

For cases in which insurance coverage is available, the gross amount of the estimated liabilities is accrued, and a receivable is recorded for any probable estimated insurance recoveries. A discussion of environmental, product and other litigation liabilities is disclosed in Item 3. Legal Proceedings and Note 14 to the Consolidated Financial Statements.

 

Based upon currently available facts, we do not believe that the ultimate resolution of any pending legal proceeding, individually or in the aggregate, will have a material adverse effect on our long-term financial condition. However, adverse developments and/or periodic settlements could negatively affect our results of operations or cash flows in one or more future quarters.

 

Income Tax Accounting

 

As part of the process of preparing the Consolidated Financial Statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. The process involves estimating actual current tax expense along with assessing temporary differences resulting from differing treatment of items for book and tax purposes. These temporary differences result in deferred tax assets and liabilities, which are included in the Consolidated Balance Sheets. We record a valuation allowance to reduce our deferred tax assets to the amount that is more-likely-than-not to be realized. We have considered future taxable income and ongoing tax planning strategies in assessing the need for the valuation allowance. Increases in the valuation allowance result in additional expense to be reflected within the tax provision in the Consolidated Statements of Income. As of November 27, 2021, theThe valuation allowance to reduce deferred tax assets totaled $11.3 million.$15.6 million as of December 2, 2023, and $14.4 million as of December 3, 2022.

23

---

Table of Contents

 

We recognize tax benefits for tax positions for which it is more-likely-than-not that the tax position will be sustained by the applicable tax authority at the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement. We do not recognize a financial statement benefit for a tax position that does not meet the more-likely-than-not threshold. We believe that our liabilities for income taxes reflect the most likely outcome. It is difficult to predict the final outcome or the timing of the resolution of any particular tax position. Future changes in judgment related to the resolution of tax positions will impact earnings in the quarter of such change. We adjust our income tax liabilities related to tax positions in light of changing facts and circumstances. Settlement with respect to a tax position would usually require cash. Based upon our analysis of tax positions taken on prior year returns and expected tax positions to be taken for the current year tax returns, we have identified gross uncertain tax positions of $13.3$14.3 million as of November 27, 2021.December 2, 2023 and $17.6 million as of December 3, 2022.

 

We have not recorded U.S. deferred income taxes for certain of our non-U.S. subsidiaries undistributed earnings as such amounts are intended to be indefinitely reinvested outside of the U.S. Should we change our business strategies related to these non-U.S. subsidiaries, additional U.S. tax liabilities could be incurred. It is not practical to estimate the amount of these additional tax liabilities. See Note 11 to the Consolidated Financial Statements for further information on income tax accounting.

 

Acquisition Accounting

 

As we enter into business combinations, we perform acquisition accounting requirements including the following:

 

●

Identifying the acquirer,

●

Determining the acquisition date,

●

Recognizing and measuring the identifiable assets acquired and the liabilities assumed, and

●

Recognizing and measuring goodwill or a gain from a bargain purchasepurchase.

15

---

Table of Contents

 

We complete valuation procedures and record the resulting fair value of the acquired assets and assumed liabilities based upon the valuation of the business enterprise and the tangible and intangible assets acquired. Enterprise value allocation methodology requires management to make assumptions and apply judgment to estimate the fair value of assets acquired and liabilities assumed. If estimates or assumptions used to complete the enterprise valuation and estimates of the fair value of the acquired assets and assumed liabilities significantly differed from assumptions made, the resulting difference could materially affect the fair value of net assets.

 

The calculation of the fair value of the tangible assets, including property, plant and equipment, utilizes the cost approach, which computes the cost to replace the asset, less accrued depreciation resulting from physical deterioration, functional obsolescence and external obsolescence. The calculation of the fair value of the identified intangible assets are determined using cash flow models following the income approach or a discounted market-based methodology approach. Significant inputs include estimated revenue growth rates, gross margins, operating expenses, and estimated attrition, royalty and discount rates. Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price.

 

Results of Operations

 

Net revenue

 

($ in millions)		2021				2020				2021 vs 2020				2023				2022				2023 vs 2022
Net revenue		$	3,278.0			$	2,790.3				17.5	%		$	3,510.9			$	3,749.2				(6.4	)%

24

---

Table of Contents

 

We review variances in net revenue in terms of changes related to sales volume and product pricing (referred to as organic revenue growth), business acquisitions and divestitures (M&A) and changes in foreign currency exchange rates. The following table shows the net revenue variance analysis for fiscal 20212023 compared to fiscal 2020:2022:

 

		20212023 vs 20202022
Organic revenue growth			15.2(5.5	)%
Extra week in 2022 (53-week year)			(1.8	)%
M&A			3.3	%
Currency			2.3(2.4	)%
Net revenue growth			17.5(6.4	)%

 

Organic revenue growth was a positive 15.2decreased 5.5 percent in 20212023 compared to 2020 driven by a 22.22022 and consisted of an 11.0 percent increase in Engineering Adhesives, a 16.1 percent increasedecrease in Construction Adhesives, and a 9.25.1 percent increasedecrease in Hygiene, Health and Consumable Adhesives and a 4.2 percent decrease in Engineering Adhesives. The positive 2.3decrease is driven by a decrease in sales volume, partially offset by an increase in product pricing. The 3.3 percent increase from M&A is due to acquisitions that occurred during the year. The negative 2.4 percent currency impact was primarily driven by a weaker Egyptian pound, Chinese renminbi, Turkish lira and Argentinian peso offset by a stronger Euro and Chinese renminbi partially offset by a weaker Brazilian real, Turkish lira and ArgentinianMexican peso compared to the U.S. dollar.dollar. Additionally, net revenue in 2023 was lower than 2022 by 1.8 percent from an additional week of revenue in 2022 as it was a 53-week fiscal year compared to a 52-week fiscal year in 2023.

 

Cost of sales

 

($ in millions)		2021				2020				2021 vs 2020				2023				2022				2023 vs 2022
Raw materials		$	1,810.0			$	1,476.4				22.6	%
Other manufacturing costs			622.7				557.2				11.7	%
Cost of sales		$	2,432.7			$	2,033.6				19.6	%		$	2,502.0			$	2,785.5				(10.2	)%
Percent of net revenue			74.2	%			72.9	%							71.3	%			74.3	%

 

Cost of sales in 20212023 compared to 2020 increased 1302022 decreased 300 basis points as a percentage of net revenue. Raw material cost as a percentage of net revenue increased 230 basis points in 2021 compared to 2020 due to higherLower raw material costs. Other manufacturing costs as a percentageand higher product pricing partially offset by the impact of net revenue decreased 100 basis points in 2021 comparedlower sales volume led to 2020 due to higher net revenue.the decrease.

 

Gross profit

 

($ in millions)		2021				2020				2021 vs 2020				2023				2022				2023 vs 2022
Gross profit		$	845.3			$	756.7				11.7	%		$	1,008.9			$	963.7				4.7	%
Percent of net revenue			25.8	%			27.1	%							28.7	%			25.7	%

 

Gross profit in 20212023 increased 11.74.7 percent and gross profit margin decreased 130increased 300 basis points compared to 2020.2022. The decreaseincrease in gross profit margin was primarily due to higherlower raw material costs and higher product pricing partially offset by higher net revenue.the impact of lower sales volume.

 

Selling, general and administrative (SG&A) expenses

 

($ in millions)		2021				2020				2021 vs 2020				2023				2022				2023 vs 2022
SG&A		$	592.7			$	538.3				10.1	%		$	653.8			$	641.0				2.0	%
Percent of net revenue			18.1	%			19.3	%							18.6	%			17.1	%

 

SG&A expenses for 20212023 increased $54.4$12.8 million, or 10.12.0 percent compared to 2020.2022. The increase is primarily due to higher discretionary spendingrestructuring and compensationacquisition project costs compared toand the prior year and unfavorable impact of foreign currency exchange rates on spending outside the U.S.acquisitions. SG&A expenses as a percent of revenue decreasedincreased by 120150 basis points compared withto the prior year.

Other income,year due to lower net

($ in millions)		2021				2020
Other income, net		$	32.9			$	15.4

Other income, net includes foreign transaction losses of $6.0 million revenue and $3.1 million in 2021higher restructuring and 2020, respectively. Loss on disposal of assets were $0.6 million and $0.1 million in 2021 and 2020, respectively. Defined benefit pension benefit was $32.1 million and $17.9 million in 2021 and 2020, respectively. Other income of $7.4 million and $0.7 million was also included in 2021 and 2020, respectively. Other income in 2021 includes gains related to legal entity mergers and a transactional tax legal settlement in Brazil.acquisition project costs.

 

1625

---

Table of Contents

 

Other income, net

($ in millions)		2023				2022
Other income, net		$	9.8			$	12.9

Other income, net in 2023 included $20.3 million of net defined benefit pension benefits and $1.2 of other income, partially offset by $11.6 million of currency transaction losses and a $0.1 million loss on disposal of assets. Other income, net in 2022 included $26.8 million of net defined benefit pension benefits and a $1.4 million gain on disposal of assets, partially offset by $12.9 million of currency transaction losses and $2.4 of other expense. The $26.8 million of net defined benefit pension benefits for 2022 included a $3.3 million settlement loss related to the termination of our Canadian defined benefit pension plan.

Interest expense

 

($ in millions)		2021				2020				2023				2022
Interest expense		$	78.1			$	86.8			$	134.6			$	91.5

 

Interest expense was $78.1$134.6 million and $86.8$91.5 million in 20212023 and 2020, respectively. The decrease in interest expense is2022, respectively, and was higher primarily due to lower U.S.higher debt balances and lowerhigher interest rates. We capitalized $0.9$1.8 million and $0.6$1.5 million of interest expense in 20212023 and 2020,2022, respectively.

 

Interest income

 

($ in millions)		2021				2020				2023				2022
Interest income		$	9.5			$	11.4			$	3.9			$	7.8

 

Interest income in 20212023 and 20202022 was $9.5$3.9 million and $11.4$7.8 million, respectively. The decrease inrespectively, consisting primarily of interest income in 2021 compared to 2020 is due to loweron cross-currency swap activity and other miscellaneous interest rates and lower cash balances.income.

 

Income tax expense:

 

($ in millions)		2021				2020				2023				2022
Income tax expense		$	63.0			$	41.9			$	93.5			$	77.2
Effective tax rate			29.1	%			26.5	%			39.9	%			30.6	%

 

IncomeIncome tax expense of $63.093.5 million in 20212023 includes $4.326.1 million of discrete tax expense, primarily related to the impact of withholding tax recorded on earnings that are no longer permanently reinvested, as well as other various U.S. and foreign tax matters. Excluding the discrete tax expense of $26.1 million, the overall effective tax rate was 28.8 percent.

Income tax expense of $77.2 million in 2022 includes $9.3 million of discrete tax expense, primarily related to the revaluation of cross-currency swap agreements due to depreciation of the Euro versus the U.S. dollar changes in valuation allowances and several foreign discrete items.items, offset in part by U.S. tax benefit for state deferred tax rate change and excess tax benefit for stock compensation. Excluding the discrete tax expense of $4.39.3 million, the overall effective tax rate was 27.126.9 percent.

 

Income tax expense

Table of $41.9 million in 2020 includes $1.1 million of discrete tax expense, primarily related to tax expense for uncertain tax positions and several foreign discrete items, offset by U.S. benefits for state deferred rate changes and a benefit related to the revaluation of cross-currency swap agreements due to appreciation of the Euro versus U.S. dollar. Excluding the discrete tax expense of $1.1 million, the overall effective tax rate was 25.8 percent. 

Contents

The increase in the overall effective tax rate for 20212023 compared to 20202022, excluding the impact of discrete items, is primarily due to the change in the foreign rate differential resulting from a change in mix of earnings across jurisdictions.jurisdictions, as well as the impact of withholding tax recorded on current earnings that will not be permanently invested.

26

---

Table of Contents

 

Income from equity method investments

 

($ in millions)		2021				2020				2023				2022
Income from equity method investments		$	7.7			$	7.4			$	4.4			$	5.7

 

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The higherlower income for 20212023 compared to 2020 relates2022 is due to higherthe unfavorable impact of the weakening of the Japanese yen against the U.S. dollar and lower net income in our joint venture.

 

Net income attributable to H.B. Fuller

 

($ in millions)		2021				2020				2021 vs 2020				2023				2022				2023 vs 2022
Net income attributable to H.B. Fuller		$	161.4			$	123.7				30.5	%		$	144.9			$	180.3				(19.6	)%
Percent of net revenue			4.9	%			4.4	%							4.1	%			4.8	%

 

Net income attributable to H.B. Fuller was $161.4$144.9 million in 20212023 compared to $123.7$180.3 million in 2020.2022. Diluted earnings per share were $2.97$2.59 per share in 20212023 and $2.36$3.26 per share in 2020.2022.

Operating Segment Results

 

We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. For segment evaluation by the chief operating decision maker, segment operating income is defined as gross profit less SG&A expenses. Inter-segment revenues are recorded at cost plus a markup for administrative costs. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment.

 

We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The tables below provide certain information regarding the net revenue and segment operating income of each of our operating segments. Corporate Unallocated includes business acquisition and integration-relatedintegration costs, organizational restructuring charges organizational restructuring-related charges, the results of business divestitures and project costs related to the implementation of Project ONE.

 

Net Revenue by SegmentEngineering Adhesives

Argentina

Buenos Aires²

FranceSurbourg

Australia

Dandenong South

Germany

Wunstorf

Australia

Sydney¹

GermanyNienburg

Brazil

Sorocaba²

Germany

Langelsheim¹

Brazil

Curitiba¹

Germany

Pirmasens

Brazil

Guarulhos

Italy

Pianezze

Chile

Santiago

People's Republic of China

Beijing

Colombia

Rionegro

People's Republic of ChinaChongqing¹Egypt6th of October City - 3rd Industrial Zone²People's Republic of ChinaNanjing - ShanXu Road

Egypt

6th of October City - CPC Industrial Park

People's Republic of China

Nanjing - Xinjinhu Road¹FinlandValkeakoski¹People's Republic of ChinaSuzhou

France

Blois

`

People's Republic of China

Yantai

GermanyLuneburgPortugal

Mindelo

GermanyFrankfurt - Kilianstädter¹United KingdomPreston¹GermanyFrankfurt - Vibeler¹United StatesCalifornia - Irvine¹GreeceLamiaUnited StatesCalifornia - Wilmington¹IndiaPuneUnited StatesConnecticut - Enfield¹IndonesiaMojokerto

United States

Georgia - Norcross¹KenyaNairobi¹

United States

Georgia - Ball Ground¹MalaysiaSelangor

United States

Illinois - Frankfort - CorsairNew ZealandAuckland¹

United States

Illinois - Frankfort - West Drive

People's Republic of ChinaGuangzhou

United States

Indiana - South BendPhilippinesManilaUnited StatesMassachusetts - Peabody¹SwedenLandskrona

United States

Michigan - Grand RapidsUnited KingdomDukinfieldUnited StatesMinnesota - FridleyUnited KingdomMilton Keynes¹United StatesMinnesota - Maple Grove¹United StatesGeorgia - Covington

United States

New Hampshire - Raymond¹United StatesCalifornia - RosevilleUnited StatesOhio - Bellevue¹

United States

Georgia - Tucker

 

		2021								2020
		Net				% of				Net				% of
($ in millions)		Revenue				Total				Revenue				Total
Hygiene, Health and Consumable Adhesives		$	1,472.7				45	%		$	1,332.8				48	%
Engineering Adhesives			1,371.8				42	%			1,088.3				39	%
Construction Adhesives			433.5				13	%			369.2				13	%
Segment total			3,278.0				100	%			2,790.3				100	%
Corporate Unallocated			-				0	%			-				0	%
Total		$	3,278.0				100	%		$	2,790.3				100	%

United States

Illinois - Seneca

Construction Adhesives

United StatesKentucky - PaducahBelgiumAntwerp

United States

Ohio - Blue Ash

Canada

Ontario - Toronto¹

United StatesMinnesota - Vadnais HeightsMexicoCoahuila¹United StatesNew York - Syracuse¹United Arab EmiratesRas Al-Khaimah¹United StatesNorth Carolina - CharlotteUnited KingdomKirby in AshfieldUnited StatesNorth Carolina - HudsonUnited KingdomMansfield¹United StatesSouth Carolina - SimpsonvilleUnited KingdomStaffordshireUnited StatesTexas - MesquiteUnited KingdomTibshelf¹United StatesWashington - Vancouver

United States

California - La Mirada

United StatesFlorida - Gainesville

United States

Georgia - Dalton

United States

Illinois - Aurora

United States

Michigan - Michigan Center

United States

New Jersey - Edison

United States

Ohio - Chagrin Falls

United States

Texas - Houston

United States

Texas - Mansfield

---

1 Leased Property

2 Idle Property

16

---

Table of Contents

Item 3. Legal Proceedings

Environmental Matters

From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. Also, from time to time, we are identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. 

Currently, we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites.

We are also engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish a financial provision. It is reasonably possible that we may have additional liabilities related to these known environmental matters. However, the full extent of our future liability for environmental matters is difficult to predict because of uncertainty as to the cost of investigation and clean up of the sites, our responsibility for such hazardous substances and the number of and financial condition of other potentially responsible parties.

While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow. However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods.

Other Legal Proceedings

From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow. However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods.

For additional information regarding environmental matters and other legal proceedings, see Note 14 to the Consolidated Financial Statements.

Item 4. Mine Safety Disclosures

Not applicable.

 

17

---

Table of Contents

Part II.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the New York Stock Exchangeunder the symbol FUL. As of January 17, 2024, there were 1,268 common shareholders of record for our common stock.

Issuer Purchases of Equity Securities

Information on our purchases of equity securities during the fourth quarter of 2023 is as follows:

										Total Number of				Approximate Dollar
										Shares				Value of Shares that
		Total								Purchased as				may yet be
		Number of				Average				Part of a Publicly				Purchased Under the
		Shares				Price Paid				Announced Plan				Plan or Program
Period		Purchased1				per Share				or Program				(thousands)
September 3, 2023 - October 7, 2023			16			$	68.61				-			$	300,000
October 8, 2023 - November 4, 2023			70			$	65.93				-			$	300,000
November 5, 2023 - December 2,2023			8			$	75.41				-			$	300,000

¹ The total number of shares purchased are shares withheld to satisfy the employees' withholding taxes upon vesting of restricted stock. Repurchases of common stock are made to support our stock-based employee compensation plans and for other corporate purposes. Upon vesting of restricted stock awarded to employees, shares are withheld to cover the employees' minimum withholding taxes.

On April 7, 2022, the Board of Directors authorized a new share repurchase program of up to $300.0 million of our outstanding common shares for a period of up to five years. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reduce our common stock for the par value of the shares with the excess being applied against additional paid in capital. This authorization replaces the April 6, 2017 authorization to repurchase shares.

18

---

Table of Contents

Total Shareholder Return Graph

The line graph below compares the cumulative total shareholder return on our common stock for the last five fiscal years with cumulative total return on the S&P Small Cap 600 Index and Dow Jones U.S. Specialty Chemicals Index. This graph assumes a $100 investment in each of H.B. Fuller, the S&P Small Cap 600 Index and the Dow Jones U.S. Specialty Chemicals Index at the close of trading on December 1, 2018, and also assumes the reinvestment of all dividends.

Item 6. Selected Financial Data

Reserved.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

H.B. Fuller Company is a global formulator, manufacturer and marketer of adhesives and other specialty chemical products. We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. 

The Hygiene, Health and Consumable Adhesives operating segment manufactures and supplies adhesives products in the assembly, packaging, converting, nonwoven and hygiene, health and beauty, flexible packaging, graphic arts and envelope markets. The Engineering Adhesives operating segment provides high-performance adhesives to the transportation, electronics, clean energy, aerospace and defense, performance wood, insulating glass, textile, appliance and heavy machinery markets. The Construction Adhesives operating segment manufactures and provides specialty adhesives, sealants, tapes, mortars, grouts, and application devices for commercial building roofing systems, heavy infrastructure projects, road/highway/airport transportation applications, telecom/5G utilities, industrial LNG plants, building envelope applications, HVAC insulation systems, and for both residential and commercial flooring underlayment solutions.

Total Company

When reviewing our financial statements, it is important to understand how certain external factors impact us. These factors include:

●

Changes in the prices of our raw materials that are primarily derived from refining crude oil and natural gas,

19

---

Table of Contents

 

Segment Operating Income (Loss)●

Global supply of and demand for raw materials,

●

Economic growth rates, and

●

Currency exchange rates compared to the U.S. dollar.

We purchase thousands of raw materials, the majority of which are petroleum/natural gas derivatives. The price of these derivatives impacts the cost of our raw materials. However, the supply of and demand for key raw materials has a greater impact on our costs. As demand increases in high-growth areas, the supply of key raw materials may tighten, resulting in certain materials being put on allocation. Natural disasters, such as hurricanes, also can have an impact as key raw material producers are shut down for extended periods of time. We continually monitor capacity utilization figures, market supply and demand conditions, feedstock costs and inventory levels, as well as derivative and intermediate prices, which affect our raw materials. With approximately 75 percent of our cost of sales accounted for by raw materials, our financial results are extremely sensitive to changing costs in this area.

The pace of economic growth directly impacts certain industries to which we supply products. For example, adhesives-related revenues from durable goods customers in areas such as appliances, furniture and other woodworking applications tend to fluctuate with the overall economic activity. In business components such as Construction Adhesives and insulating glass in Engineering Adhesives, revenues tend to move with more specific economic indicators such as housing starts and other construction-related activity.

The movement of foreign currency exchange rates as compared to the U.S. dollar impacts the translation of the foreign entities’ financial statements into U.S. dollars. As foreign currencies weaken against the U.S. dollar, our revenues and costs decrease as the foreign currency-denominated financial statements translate into fewer U.S. dollars. The fluctuations of the Euro, Chinese renminbi, British pound sterling, Egyptian pound, Turkish lira, Brazilian real, Canadian dollar, Australian dollar and Mexican peso against the U.S. dollar have the largest impact on our financial results as compared to all other currencies. In 2023, currency fluctuations had a negative impact on net revenue of approximately $88.5 million as compared to 2022.

Key financial results andtransactions for 2023 included the following:

 

		2021								2020
		Operating				% of				Operating				% of
($ in millions)		Income (Loss)				Total				Income (Loss)				Total
Hygiene, Health and Consumable Adhesives		$	138.4				55	%		$	130.8				60	%
Engineering Adhesives			135.9				54	%			104.0				48	%
Construction Adhesives			14.1				5	%			11.1				5	%
Segment total			288.4				114	%			245.9				113	%
Corporate Unallocated			(35.8	)			(14	)%			(27.6	)			(13	)%
Total		$	252.6				100	%		$	218.3				100	%

	●	The following table providesNet revenue decreased 6.4 percent from 2022 primarily driven by an 8.4 percent decrease in sales volume and a reconciliation of segment operating income2.4 percent decrease due to income before income taxescurrency fluctuations, partially offset by a 3.3 percent increase due to acquisitions and income from equity method investments, as reported2.9 percent increase in product pricing. Additionally, in 2022, we had a 53-week year compared to a 52-week year in 2023, and 2023 revenue was lower by 1.8 percent due to the Consolidated Statements of Income.extra week in 2022. ($ in millions)   2021     2020   Segment operating income   $ 252.6     $ 218.3   Other income, net     32.9       15.4   Interest expense     (78.1 )     (86.8 ) Interest income     9.5       11.4   Income before income taxes and income from equity method investments   $ 216.9     $ 158.3   Hygiene, Health and Consumable Adhesives ($ in millions)   2021     2020     2021 vs 2020   Net revenue   $ 1,472.7     $ 1,332.8       10.5 % Segment operating income   $ 138.4     $ 130.8       5.8 % Segment profit margin %     9.4 %     9.8 %         The following tables provide details of Hygiene, Health and Consumable Adhesives net revenue variances: 2021 vs 2020 Organic revenue growth 9.2 % Currency 1.3 % Net revenue growth 10.5 %   Net revenue● Gross profit margin increased 10.5to 28.7 percent in 2021 compared to 2020. The 9.22023 from 25.7 percent increase in organic growth was attributable2022, due to an increase in sales volumeproduct pricing and favorable product pricing. The positive currency effect was due to the stronger Euro and Chinese renminbi partially offset by a weaker Brazilian real, Argentinian peso and Turkish lira compared to the U.S. dollar. As a percentage of net revenue, raw material costs increased 160 basis points due to higherlower raw material costs partially offset by higher net revenue. Other manufacturing costs as a percentagethe impact of net revenue decreased 90 basis points due to higher net revenue. SG&A expenses as a percentage of net revenue decreased 30 basis pointslower sales volume. ● Cash flow generated by operating activities was $378.4 million in 20212023 as compared to 2020. Segment operating income increased 5.8 percent and segment operating margin as a percentage of net revenue decreased 40 basis points$256.5 million in 2021 as compared to 2020.2022. Our total year organic revenue growth, which we define as the combined variances from sales volume and product pricing, decreased 5.5 percent for 2023 compared to 2022 due to a decrease in sales volume, partially offset by an increase in product pricing.   In 2023, our diluted earnings per share was $2.59 compared to $3.26 in 2022. The lower earnings per share in 2023 compared to 2022 was primarily due to lower net revenue, higher operating costs, interest expense and income tax expense, partially offset by lower raw material costs. Information pertaining to fiscal year 2021 was included in the Company’s Annual Report on Form 10-K for the year ended December 3, 2022, under Part II, Item 7 “Management’s Discussion and Analysis of Financial Position and Results of Operations,” which was filed with the SEC on January 24, 2023. Project ONE In December 2012,our Board of Directors approved a multi-year project to replace and enhance our existing core information technology platforms. The scope for this project includes most of the basic transaction processing for the company including customer orders, procurement, manufacturing and financial reporting. The project envisions harmonized business processes for all of our operating segments supported with one standard software configuration. The execution of this project, which we refer to as Project ONE, is being supported by internal resources and consulting services. Implementation of Project ONE began in our North America adhesives business in 2014 and, through 2023, we completed implementation of this system in various parts of our business including Latin America (except Brazil), Australia, and various other businesses in North America and EIMEA. During 2024 and beyond, we will continue implementation in North America, EIMEA, Brazil and Asia Pacific. 20 Table of Contents Total expenditures for Project ONE are estimated to be $240 to $260 million, of which 60-65% is expected to be capital expenditures. Our total project-to-date expenditures are approximately $200 million, of which approximately $120 million are capital expenditures. Given the complexity of the implementation, the total investment to complete the project may exceed our estimate. Restructuring Plans During the second and third quarters of 2023, the Company approved restructuring plans (the “Plans”) related to organizational changes and other actions to optimize operations and integrate acquired businesses. In implementing the Plans, the Company currently expects to incur costs of approximately $39.1 million to $44.1 million ($30.4 million to $34.4 million after-tax), which include (i) cash expenditures of approximately $28.4 million to $29.6 million ($22.0 million to $23.0 million after-tax) for severance and related employee costs globally and (ii) other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans. We have incurred costs of $27.0 million under the Plans as of December 2, 2023. The Plans began to be implemented in the second quarter of fiscal year 2023 and are currently expected to be completed during fiscal year 2026. The restructuring costs will be spread across the next several fiscal quarters as the measures are implemented with the majority of the charges recognized and cash payments occurring in fiscal 2023 and 2024. Critical Accounting Policies and Significant Estimates Management’s discussion and analysis of our results of operations and financial condition are based upon the Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We believe the critical accounting policies and areas that require the most significant judgments and estimates to be used in the preparation of the Consolidated Financial Statements relate to goodwill impairment; pension and other postretirement assumptions; long-lived assets recoverability; valuation of product, environmental and other litigation liabilities; valuation of deferred tax assets and accuracy of tax contingencies; and valuation of acquired assets and liabilities. Goodwill Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a purchase business combination. Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (the component level). Reporting units are determined by the discrete financial information available for the component and whether it is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. Our reporting units are as follows: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. We evaluate our goodwill for impairment annually at the beginning of the fourth quarter or earlier upon the occurrence of substantive unfavorable changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization. The quantitative impairment test requires judgment, including the identification of reporting units, the assignment of assets, liabilities and goodwill to reporting units, and the determination of fair value of each reporting unit. The impairment test requires the comparison of the fair value of each reporting unit with its carrying amount, including goodwill. In performing the impairment test, we determined the fair value of our reporting units through the income approach by using discounted cash flow (“DCF”) analyses. Determining fair value requires the Company to make judgments about appropriate forecasted revenue and related revenue growth rate, the earnings before interest, taxes, depreciation and amortization ("EBITDA") margins rate and the weighted average cost of capital. The cash flows employed in the DCF analysis for each reporting unit are based on the reporting unit's budget, long-term business plan and recent operating performance. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting unit and market conditions. Given the inherent uncertainty in determining the assumptions underlying a DCF analysis, actual results may differ from those used in our valuations. In assessing the reasonableness of the determined fair values, we also reconciled the aggregate determined fair value of the Company to the Company's market capitalization, which, at the date of our 2023 impairment test, included a 26 percent control premium. 21 Table of Contents For the 2023 impairment test, the fair value of the reporting units exceeded the respective carrying values by 8 percent to 140 percent. Significant assumptions used in the DCF analysis included discount rates that ranged from 10.1 percent to 12.3 percent and long-term revenue growth rates. The Construction Adhesives reporting unit, with $432.8 million of goodwill assigned to it as of December 2, 2023, exceeded the respective carrying value by 8 percent. An increase in the discount rate of 10 basis points or a decrease in the long-term growth rates of 10 percent would result in the fair value of the Construction Adhesives reporting unit falling below its carrying value. The Engineering Adhesives and Hygiene, Health and Consumable Adhesives reporting units had significant fair value in excess of carrying value. Management will continue to monitor these reporting units for changes in the business environment that could impact recoverability. The recoverability of goodwill is dependent upon the continued growth of cash flows from our business activities. If the economy or business environment falter and we are unable to achieve our assumed revenue growth rates or profit margin percentages, our projections used would need to be remeasured, which could impact the carrying value of our goodwill in one or more of our reporting units. Most significantly, for our Construction Adhesives reporting unit, a decrease in the planned volume revenue growth would negatively impact the fair value of the reporting unit and the calculation of excess carrying value. See Note 5 to the Consolidated Financial Statements for further information regarding goodwill. Pension and Other Postretirement Plan Assumptions We sponsor defined-benefit pension plans in both the U.S. and non-U.S. entities. Also in the U.S., we sponsor other postretirement plans for health care and life insurance benefits. Expenses and liabilities for the pension plans and other postretirement plans are actuarially calculated. These calculations are based on our assumptions related to the discount rate, expected return on assets, projected salary increases and health care cost trend rates. Note 10 to the Consolidated Financial Statements includes disclosure of assumptions employed in these measurements for both the non-U.S. and U.S. plans. The discount rate assumption is determined using an actuarial yield curve approach, which results in a discount rate that reflects the characteristics of the plan. The approach identifies a broad population of corporate bonds that meet the quality and size criteria for the particular plan. We use this approach rather than a specific index that has a certain set of bonds that may or may not be representative of the characteristics of our particular plan. A higher discount rate reduces the present value of the pension obligations. The discount rate for the U.S. pension plan was 5.66 percent at December 2, 2023, 5.36 percent at December 3, 2022 and 2.76 percent at November 27, 2021. Net periodic pension cost for a given fiscal year is based on assumptions developed at the end of the previous fiscal year. A discount rate change of 0.5 percentage points at December 2, 2023 would impact U.S. pension and other postretirement plan (income) expense by $0.1 million (pre-tax) in fiscal 2024. Discount rates for non-U.S. plans are determined in a manner consistent with the U.S. plans. The expected long-term rate of return on plan assets assumption for the U.S. pension plan was 7.75 percent in 2023, 7.00 percent in 2022 and 7.25 percent in 2021. Our expected long-term rate of return on U.S. plan assets was based on our target asset allocation assumption of 55 percent equities and 45 percent fixed-income. Management, in conjunction with our external financial advisors, determines the expected long-term rate of return on plan assets by considering the expected future returns and volatility levels for each asset class that are based on historical returns and forward looking observations. For 2023, the expected long-term rate of return on the target equities allocation was 8.50 percent and the expected long-term rate of return on the target fixed-income allocation was 5.60 percent. The total plan rate of return assumption included an estimate of the effect of diversification and the plan expense. A change of 0.5 percentage points for the expected return on assets assumption would impact U.S. net pension and other postretirement plan expense by approximately $2.3 million (pre-tax). Management, in conjunction with our external financial advisors, uses the actual historical rates of return of the asset categories to assess the reasonableness of the expected long-term rate of return on plan assets. The most recent 10-year and 20-year historical equity returns are shown in the table below. Our expected rate of return on our total portfolio is consistent with the historical patterns observed over longer time frames.     Total             Fixed   U.S. Pension Plan Historical Actual Rates of Return   Portfolio     Equities     Income                             10-year period     5.4 %     6.9 %     3.4 % 20-year period     6.5 %     7.1 %     5.5 %* * Beginning in 2022, our target allocation migrated from 60 percent equities and 40 percent fixed-income to 55 percent equities and 45 percent fixed income. The historical actual rate of return for the fixed income of 5.5 percent is since inception (17 years, 11 months). 22 Table of Contents The expected long-term rate of return on plan assets assumption for non-U.S. pension plans was a weighted-average of 5.02 percent in 2023 compared to 3.49 percent in 2022 and 6.15 percent in 2021. The expected long-term rate of return on plan assets assumption used in each non-U.S. plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the effect of active management of the plan’s assets. Our largest non-U.S. pension plans are in the United Kingdom and Germany. The expected long-term rate of return on plan assets for the United Kingdom was 4.50 percent and the expected long-term rate of return on plan assets for Germany was 5.50 percent. Management, in conjunction with our external financial advisors, uses actual historical returns of the asset portfolio to assess the reasonableness of the expected rate of return for each plan. The projected salary increase assumption is based on historic trends and comparisons to the external market. Higher rates of increase result in higher pension expenses. As this rate is also a long-term expected rate, it is less likely to change on an annual basis. Under the U.S. pension plan, the compensation amount was locked-in as of May 31, 2011 and thus the benefit no longer includes compensation increases. Projected salary increase assumptions for non-U.S. plans are determined in a manner consistent with the U.S. plans. Recoverability of Long-Lived Assets The assessment of the recoverability of long-lived assets reflects our assumptions and estimates. Factors that we must estimate when performing impairment tests include sales volume, prices, inflation, currency exchange rates, tax rates and capital spending. Significant judgment is involved in estimating these factors, and they include inherent uncertainties. The measurement of the recoverability of these assets is dependent upon the accuracy of the assumptions used in making these estimates and how the estimates compare to the eventual future operating performance of the specific businesses to which the assets are attributed. Judgments made by us include the expected useful lives of long-lived assets. The ability to realize undiscounted cash flows in excess of the carrying amounts of such assets is affected by factors such as the ongoing maintenance and improvement of the assets, changes in economic conditions and changes in operating performance. Product, Environmental and Other Litigation Liabilities As disclosed in Item 3. Legal Proceedings and in Note 1 and Note 14 to the Consolidated Financial Statements, we are subject to various claims, lawsuits and other legal proceedings. Reserves for loss contingencies associated with these matters are established when it is determined that a liability is probable and the amount can be reasonably estimated. The assessment of the probable liabilities is based on the facts and circumstances known at the time that the financial statements are being prepared. For cases in which it is determined that a liability is probable but only a range for the potential loss exists, the minimum amount of the range is recorded and subsequently adjusted as better information becomes available. For cases in which insurance coverage is available, the gross amount of the estimated liabilities is accrued, and a receivable is recorded for any probable estimated insurance recoveries. A discussion of environmental, product and other litigation liabilities is disclosed in Item 3. Legal Proceedings and Note 14 to the Consolidated Financial Statements. Based upon currently available facts, we do not believe that the ultimate resolution of any pending legal proceeding, individually or in the aggregate, will have a material adverse effect on our long-term financial condition. However, adverse developments and/or periodic settlements could negatively affect our results of operations or cash flows in one or more future quarters. Income Tax Accounting As part of the process of preparing the Consolidated Financial Statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. The process involves estimating actual current tax expense along with assessing temporary differences resulting from differing treatment of items for book and tax purposes. These temporary differences result in deferred tax assets and liabilities, which are included in the Consolidated Balance Sheets. We record a valuation allowance to reduce our deferred tax assets to the amount that is more-likely-than-not to be realized. We have considered future taxable income and ongoing tax planning strategies in assessing the need for the valuation allowance. Increases in the valuation allowance result in additional expense to be reflected within the tax provision in the Consolidated Statements of Income. The valuation allowance to reduce deferred tax assets totaled $15.6 million as of December 2, 2023, and $14.4 million as of December 3, 2022. 23 Table of Contents We recognize tax benefits for tax positions for which it is more-likely-than-not that the tax position will be sustained by the applicable tax authority at the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement. We do not recognize a financial statement benefit for a tax position that does not meet the more-likely-than-not threshold. We believe that our liabilities for income taxes reflect the most likely outcome. It is difficult to predict the final outcome or the timing of the resolution of any particular tax position. Future changes in judgment related to the resolution of tax positions will impact earnings in the quarter of such change. We adjust our income tax liabilities related to tax positions in light of changing facts and circumstances. Settlement with respect to a tax position would usually require cash. Based upon our analysis of tax positions taken on prior year returns and expected tax positions to be taken for the current year tax returns, we have identified gross uncertain tax positions of $14.3 million as of December 2, 2023 and $17.6 million as of December 3, 2022. We have not recorded U.S. deferred income taxes for certain of our non-U.S. subsidiaries undistributed earnings as such amounts are intended to be indefinitely reinvested outside of the U.S. Should we change our business strategies related to these non-U.S. subsidiaries, additional U.S. tax liabilities could be incurred. It is not practical to estimate the amount of these additional tax liabilities. See Note 11 to the Consolidated Financial Statements for further information on income tax accounting. Acquisition Accounting As we enter into business combinations, we perform acquisition accounting requirements including the following: ● Identifying the acquirer, ● Determining the acquisition date, ● Recognizing and measuring the identifiable assets acquired and the liabilities assumed, and ● Recognizing and measuring goodwill or a gain from a bargain purchase. We complete valuation procedures and record the resulting fair value of the acquired assets and assumed liabilities based upon the valuation of the business enterprise and the tangible and intangible assets acquired. Enterprise value allocation methodology requires management to make assumptions and apply judgment to estimate the fair value of assets acquired and liabilities assumed. If estimates or assumptions used to complete the enterprise valuation and estimates of the fair value of the acquired assets and assumed liabilities significantly differed from assumptions made, the resulting difference could materially affect the fair value of net assets. The calculation of the fair value of the tangible assets, including property, plant and equipment, utilizes the cost approach, which computes the cost to replace the asset, less accrued depreciation resulting from physical deterioration, functional obsolescence and external obsolescence. The calculation of the fair value of the identified intangible assets are determined using cash flow models following the income approach or a discounted market-based methodology approach. Significant inputs include estimated revenue growth rates, gross margins, operating expenses, and estimated attrition, royalty and discount rates. Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price. Results of Operations Net revenue ($ in millions)   2023     2022     2023 vs 2022   Net revenue   $ 3,510.9     $ 3,749.2       (6.4 )% 24 Table of Contents We review variances in net revenue in terms of changes related to sales volume and product pricing (referred to as organic revenue growth), business acquisitions and divestitures (M&A) and changes in foreign currency exchange rates. The following table shows the net revenue variance analysis for fiscal 2023 compared to fiscal 2022: 2023 vs 2022 Organic revenue growth (5.5 )% Extra week in 2022 (53-week year) (1.8 )% M&A 3.3 % Currency (2.4 )% Net revenue growth (6.4 )% Organic revenue decreased 5.5 percent in 2023 compared to 2022 and consisted of an 11.0 percent decrease in Construction Adhesives, a 5.1 percent decrease in Hygiene, Health and Consumable Adhesives and a 4.2 percent decrease in Engineering Adhesives. The decrease is driven by a decrease in sales volume, partially offset by an increase in product pricing. The 3.3 percent increase from M&A is due to acquisitions that occurred during the year. The negative 2.4 percent currency impact was primarily driven by a weaker Egyptian pound, Chinese renminbi, Turkish lira and Argentinian peso offset by a stronger Euro and Mexican peso compared to the U.S. dollar. Additionally, net revenue in 2023 was lower than 2022 by 1.8 percent from an additional week of revenue in 2022 as it was a 53-week fiscal year compared to a 52-week fiscal year in 2023. Cost of sales ($ in millions)   2023     2022     2023 vs 2022   Cost of sales   $ 2,502.0     $ 2,785.5       (10.2 )% Percent of net revenue     71.3 %     74.3 %         Cost of sales in 2023 compared to 2022 decreased 300 basis points as a percentage of net revenue. Lower raw material costs and higher product pricing partially offset by the impact of lower sales volume led to the decrease. Gross profit ($ in millions)   2023     2022     2023 vs 2022   Gross profit   $ 1,008.9     $ 963.7       4.7 % Percent of net revenue     28.7 %     25.7 %         Gross profit in 2023 increased 4.7 percent and gross profit margin increased 300 basis points compared to 2022. The increase in gross profit margin was primarily due to lower raw material costs and higher product pricing partially offset by the impact of lower sales volume. Selling, general and administrative (SG&A) expenses ($ in millions)   2023     2022     2023 vs 2022   SG&A   $ 653.8     $ 641.0       2.0 % Percent of net revenue     18.6 %     17.1 %         SG&A expenses for 2023 increased $12.8 million, or 2.0 percent compared to 2022. The increase is due to higher restructuring and acquisition project costs and the impact of acquisitions. SG&A expenses as a percent of revenue increased by 150 basis points compared to the prior year due to lower net revenue and higher restructuring and acquisition project costs. 25 Table of Contents Other income, net ($ in millions)   2023     2022   Other income, net   $ 9.8     $ 12.9   Other income, net in 2023 included $20.3 million of net defined benefit pension benefits and $1.2 of other income, partially offset by $11.6 million of currency transaction losses and a $0.1 million loss on disposal of assets. Other income, net in 2022 included $26.8 million of net defined benefit pension benefits and a $1.4 million gain on disposal of assets, partially offset by $12.9 million of currency transaction losses and $2.4 of other expense. The $26.8 million of net defined benefit pension benefits for 2022 included a $3.3 million settlement loss related to the termination of our Canadian defined benefit pension plan. Interest expense ($ in millions)   2023     2022   Interest expense   $ 134.6     $ 91.5   Interest expense was $134.6 million and $91.5 million in 2023 and 2022, respectively, and was higher primarily due to higher debt balances and higher interest rates. We capitalized $1.8 million and $1.5 million of interest expense in 2023 and 2022, respectively. Interest income ($ in millions)   2023     2022   Interest income   $ 3.9     $ 7.8   Interest income in 2023 and 2022 was $3.9 million and $7.8 million, respectively, consisting primarily of interest on cross-currency swap activity and other miscellaneous interest income. Income tax expense: ($ in millions)   2023     2022   Income tax expense   $ 93.5     $ 77.2   Effective tax rate     39.9 %     30.6 % Income tax expense of $93.5 million in 2023 includes $26.1 million of discrete tax expense, primarily related to the impact of withholding tax recorded on earnings that are no longer permanently reinvested, as well as other various U.S. and foreign tax matters. Excluding the discrete tax expense of $26.1 million, the overall effective tax rate was 28.8 percent. Income tax expense of $77.2 million in 2022 includes $9.3 million of discrete tax expense, primarily related to the revaluation of cross-currency swap agreements due to depreciation of the Euro versus the U.S. dollar and several foreign discrete items, offset in part by U.S. tax benefit for state deferred tax rate change and excess tax benefit for stock compensation. Excluding the discrete tax expense of $9.3 million, the overall effective tax rate was 26.9 percent.  Table of Contents The increase in the overall effective tax rate for 2023 compared to 2022, excluding the impact of discrete items, is primarily due to the change in the mix of earnings across jurisdictions, as well as the impact of withholding tax recorded on current earnings that will not be permanently invested. 26 Table of Contents Income from equity method investments ($ in millions)   2023     2022   Income from equity method investments   $ 4.4     $ 5.7   The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The lower income for 2023 compared to 2022 is due to the unfavorable impact of the weakening of the Japanese yen against the U.S. dollar and lower net income in our joint venture. Net income attributable to H.B. Fuller ($ in millions)   2023     2022     2023 vs 2022   Net income attributable to H.B. Fuller   $ 144.9     $ 180.3       (19.6 )% Percent of net revenue     4.1 %     4.8 %         Net income attributable to H.B. Fuller was $144.9 million in 2023 compared to $180.3 million in 2022. Diluted earnings per share were $2.59 per share in 2023 and $3.26 per share in 2022. Operating Segment Results We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. For segment evaluation by the chief operating decision maker, segment operating income is defined as gross profit less SG&A expenses. Inter-segment revenues are recorded at cost plus a markup for administrative costs. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment. We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The tables below provide certain information regarding the net revenue and segment operating income of each of our operating segments. Corporate Unallocated includes business acquisition and integration costs, organizational restructuring charges and project costs related to the implementation of Project ONE. Engineering Adhesives
Argentina	Buenos Aires2			France	Surbourg
Australia	Dandenong South			Germany	Wunstorf
Australia	Sydney1			Germany	Nienburg
Brazil	Sorocaba2			Germany	Langelsheim1
Brazil	Curitiba1			Germany	Pirmasens
Brazil	Guarulhos			Italy	Pianezze
Chile	Santiago			People's Republic of China	Beijing
Colombia	Rionegro			People's Republic of China	Chongqing1
Egypt	6th of October City - 3rd Industrial Zone2			People's Republic of China	Nanjing - ShanXu Road
Egypt	6th of October City - CPC Industrial Park			People's Republic of China	Nanjing - Xinjinhu Road1
Finland	Valkeakoski1			People's Republic of China	Suzhou
France	Blois		`	People's Republic of China	Yantai
Germany	Luneburg			Portugal	Mindelo
Germany	Frankfurt - Kilianstädter1			United Kingdom	Preston1
Germany	Frankfurt - Vibeler1			United States	California - Irvine1
Greece	Lamia			United States	California - Wilmington1
India	Pune			United States	Connecticut - Enfield1
Indonesia	Mojokerto			United States	Georgia - Norcross1
Kenya	Nairobi1			United States	Georgia - Ball Ground1
Malaysia	Selangor			United States	Illinois - Frankfort - Corsair
New Zealand	Auckland1			United States	Illinois - Frankfort - West Drive
People's Republic of China	Guangzhou			United States	Indiana - South Bend
Philippines	Manila			United States	Massachusetts - Peabody1
Sweden	Landskrona			United States	Michigan - Grand Rapids
United Kingdom	Dukinfield			United States	Minnesota - Fridley
United Kingdom	Milton Keynes1			United States	Minnesota - Maple Grove1
United States	Georgia - Covington			United States	New Hampshire - Raymond1
United States	California - Roseville			United States	Ohio - Bellevue1
United States	Georgia - Tucker			($ in millions)   2021     2020     2021 vs 2020   Net revenue   $ 1,371.8     $ 1,088.3       26.1 % Segment operating income   $ 135.9     $ 104.0       30.7 % Segment profit margin %     9.9 %     9.6 %
United States The following tables provide details of Engineering Adhesives net revenue variances: 2021 vs 2020 Organic revenue growth Illinois - Seneca     22.2 % Currency 3.9 % Net revenue growth 26.1 % Net revenue increased 26.1 percent in 2021 compared to 2020. The 22.2 percent increase in organic growth was attributable to higher sales volume and favorable product pricing. The positive currency effect was due to a stronger Euro and Chinese renminbi partially offset by a weaker Brazilian real, Turkish lira and Argentinian peso compared to the U.S. dollar. Raw material costs as a percentage of net revenue increased 320 basis points due to higher raw material costs partially offset by higher net revenue. Other manufacturing costs as a percentage of net revenue decreased 110 basis points due to higher net revenue. SG&A expense as a percentage of net revenue decreased 240 basis points due to higher net revenue. Segment operating income increased 30.7 percent and segment operating margin increased 30 basis points compared to 2020. Construction Adhesives
United States	Kentucky - Paducah			Belgium	Antwerp
United States	Ohio - Blue Ash			Canada	Ontario - Toronto1
United States	Minnesota - Vadnais Heights			Mexico	Coahuila1
United States	New York - Syracuse1			United Arab Emirates	Ras Al-Khaimah1
United States	North Carolina - Charlotte			United Kingdom	Kirby in Ashfield
United States	North Carolina - Hudson			United Kingdom	Mansfield1
United States	South Carolina - Simpsonville			United Kingdom	Staffordshire
United States	Texas - Mesquite			United Kingdom	Tibshelf1
United States	Washington - Vancouver			United States	California - La Mirada
				United States	Florida - Gainesville
($ in millions)   2021     2020     2021 vs 2020   Net revenue   $ 433.5     $ 369.2       17.4 % Segment operating income (loss)   $ 14.1     $ 11.1       26.9 % Segment profit margin %     3.3 %     3.0 %				United States	Georgia - Dalton
18 Table of Contents				The following tables provide details of Construction Adhesives net revenue variances:United States	Illinois - Aurora
2021 vs 2020 Organic revenue growth 16.1 % Currency 1.3 % Net revenue growth 17.4 %			Net revenue increased 17.4 percent in 2021 compared to 2020. The 16.1 percent increase in organic growth was attributable to higher sales volume and favorable product pricing. The positive currency effect was due to the stronger Australian dollar, Canadian dollar and Euro compared to the U.S. dollar. Raw material costs as a percentage of net revenue increased 360 basis points due to higher raw material costs partially offset by higher net revenue. Other manufacturing costs as a percentage of net revenue decreased 220 basis points primarily due to higher net revenue. SG&A expenses as a percentage of net revenue decreased 170 basis points also due to higher net revenue. Segment operating income increased 26.9 percent and segment operating margin increased 30 basis points compared to 2020.United States	Michigan - Michigan Center
Corporate Unallocated	($ in millions)   2021     2020     2021 vs 2020   Net revenue   $ -     $ -     NMP   Segment operating loss   $ (35.8 )   $ (27.6 )     29.8 % Segment profit margin %   NMP     NMP			NMP = Non-meaningful percentage Corporate Unallocated includes acquisition and integration-related charges, restructuring-related charges, the results of business divestitures and costs related to the implementation of Project ONE. Segment operating loss increased 29.8 percent in 2021 reflecting increased organizational realignment costs compared to 2020.  Financial Condition, Liquidity and Capital Resources Total cash and cash equivalents as of November 27, 2021 were $61.8 million compared to $100.5 million as of November 28, 2020. Total long and short-term debt was $1,616.5 million as of November 27, 2021 and $1,773.9 million as of November 28, 2020. We believe that cash flows from operating activities will be adequate to meet our short-term and long-term liquidity and capital expenditure needs. In addition, we believe we have the ability to obtain both short-term and long-term debt to meet our financing needs for the foreseeable future. Cash available in the United States has historically been sufficient and we expect it will continue to be sufficient to fund U.S. operations, U.S. capital spending and U.S. pension and other postretirement benefit contributions in addition to funding U.S. acquisitions, dividend payments, debt service and share repurchases as needed. For those international earnings considered to be reinvested indefinitely, we currently have no intention to, and plans do not indicate a need to, repatriate these funds for U.S. operations.	New Jersey - Edison
				Our credit agreements include restrictive covenants that, if not met, could lead to a renegotiation of our credit lines and a significant increase in our cost of financing. At November 27, 2021, we were in compliance with all covenants of our contractual obligations as shown in the following table:United States	Ohio - Chagrin Falls Covenant Debt Instrument Measurement Result as of November 27, 2021 Total Indebtedness / TTM EBITDA Term Loan BCredit Agreement Not greater than 5.9 2.2 Total Indebtedness / TTM EBITDA Revolving Credit Agreement Not greater than 5.9 2.2 TTM EBITDA / Consolidated Interest Expense Revolving Credit Agreement Not less than 2.0 5.8 United States ● TTM = trailing 12 months Texas - Houston United States Texas - Mansfield   ● 1 Leased Property 2 Idle Property 16 Table of Contents Item 3. Legal Proceedings Environmental Matters From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. Also, from time to time, we are identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis.  Currently, we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites. We are also engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish a financial provision. It is reasonably possible that we may have additional liabilities related to these known environmental matters. However, the full extent of our future liability for environmental matters is difficult to predict because of uncertainty as to the cost of investigation and clean up of the sites, our responsibility for such hazardous substances and the number of and financial condition of other potentially responsible parties. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow. However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods. Other Legal Proceedings From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow. However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods. For additional information regarding environmental matters and other legal proceedings, see Note 14 to the Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not applicable. 17 Table of Contents Part II. Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchangeunder the symbol FUL. As of January 17, 2024, there were 1,268 common shareholders of record for our common stock. Issuer Purchases of Equity Securities Information on our purchases of equity securities during the fourth quarter of 2023 is as follows:                     Total Number of     Approximate Dollar                       Shares     Value of Shares that       Total             Purchased as     may yet be       Number of     Average     Part of a Publicly     Purchased Under the       Shares     Price Paid     Announced Plan     Plan or Program   Period   Purchased1     per Share     or Program     (thousands)                                     September 3, 2023 - October 7, 2023     16     $ 68.61       -     $ 300,000                                     October 8, 2023 - November 4, 2023     70     $ 65.93       -     $ 300,000                                     November 5, 2023 - December 2,2023     8     $ 75.41       -     $ 300,000   1 The total number of shares purchased are shares withheld to satisfy the employees' withholding taxes upon vesting of restricted stock. Repurchases of common stock are made to support our stock-based employee compensation plans and for other corporate purposes. Upon vesting of restricted stock awarded to employees, shares are withheld to cover the employees' minimum withholding taxes. On April 7, 2022, the Board of Directors authorized a new share repurchase program of up to $300.0 million of our outstanding common shares for a period of up to five years. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reduce our common stock for the par value of the shares with the excess being applied against additional paid in capital. This authorization replaces the April 6, 2017 authorization to repurchase shares. 18 Table of Contents Total Shareholder Return Graph The line graph below compares the cumulative total shareholder return on our common stock for the last five fiscal years with cumulative total return on the S&P Small Cap 600 Index and Dow Jones U.S. Specialty Chemicals Index. This graph assumes a $100 investment in each of H.B. Fuller, the S&P Small Cap 600 Index and the Dow Jones U.S. Specialty Chemicals Index at the close of trading on December 1, 2018, and also assumes the reinvestment of all dividends. Item 6. Selected Financial Data Reserved. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview H.B. Fuller Company is a global formulator, manufacturer and marketer of adhesives and other specialty chemical products. We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives.  The Hygiene, Health and Consumable Adhesives operating segment manufactures and supplies adhesives products in the assembly, packaging, converting, nonwoven and hygiene, health and beauty, flexible packaging, graphic arts and envelope markets. The Engineering Adhesives operating segment provides high-performance adhesives to the transportation, electronics, clean energy, aerospace and defense, performance wood, insulating glass, textile, appliance and heavy machinery markets. The Construction Adhesives operating segment manufactures and provides specialty adhesives, sealants, tapes, mortars, grouts, and application devices for commercial building roofing systems, heavy infrastructure projects, road/highway/airport transportation applications, telecom/5G utilities, industrial LNG plants, building envelope applications, HVAC insulation systems, and for both residential and commercial flooring underlayment solutions. Total Company When reviewing our financial statements, it is important to understand how certain external factors impact us. These factors include: EBITDA for Term Loan B covenant purposes is defined as consolidated net income, plus interest expense, expense for taxes paid or accrued, depreciation and amortization, certain non-cash impairment losses, extraordinary non-cash losses incurred other than in the ordinary course of business, nonrecurring extraordinary non-cash restructuring charges and the non-cash impact of purchase accounting, expenses related to the Royal Adhesives acquisition not to exceed $40.0 million, expenses relating to the integration of Royal Adhesives during the fiscal years ending in 2017, 2018 and 2019 not exceeding $30 million in aggregate, restructuring expenses that began prior to the Royal Adhesives acquisition incurred in fiscal years ending in 2017 and 2018 not exceeding $28 million in aggregate, and non-capitalized charges relating to the SAP implementation during fiscal years ending in 2017 through 2021 not exceeding $13 million in any single fiscal year, minus extraordinary non-cash gains. For the Total Indebtedness / TTM EBITDA ratio, TTM EBITDA is adjusted for the pro forma results from Material Acquisitions and Material Divestitures as if the acquisition or divestiture occurred at the beginning of the calculation period. The full definition is set forth in the Term Loan B Credit Agreement and can be found in the Company’s 8-K filing dated October 20, 2017. ● Changes in the prices of our raw materials that are primarily derived from refining crude oil and natural gas, ● EBITDA for Revolving Credit Facility covenant purposes is defined as consolidated net income, plus interest expense, expense for taxes paid or accrued, depreciation and amortization, non-cash impairment losses related to long-lived assets, intangible assets or goodwill, nonrecurring or unusual non-cash losses incurred other than in the ordinary course of business, nonrecurring or unusual non-cash restructuring charges and the non-cash impact of purchase accounting, fees, premiums, expenses and other transaction costs incurred or paid by the borrower or any of its Subsidiaries on the effective date in connection with the transactions, this agreement and the other loan documents, the 2020 supplemental indenture and the transactions contemplated hereby and thereby, one-time, non-capitalized charges and expenses relating to the Company’s SAP implementation during fiscal years ending in 2017 through 2024, in an amount not exceeding $15.0 million in any single fiscal year of the Company, charges and expenses relating to the ASP Royal Acquisition, including but not limited to advisory and financing costs, during the Company’s fiscal years ending in 2020 and 2021, in an aggregate amount (as to such years combined) not exceeding $40.0 million, charges and expenses related to the reorganization of the Company and its subsidiaries from five business units to three business units to reduce costs during the Company’s fiscal years ending in 2020 and 2021 in an aggregate amount (as to such years combined) not exceeding $24.0 million, and charges and expenses related to the Company’s manufacturing and operations project to improve delivery, implement cost savings and reduce inventory during the Company’s fiscal years ending in 2020, 2021 and 2022 in an aggregate amount (as to such years combined) not exceeding $15.5 million. ● Consolidated Interest Expense for the Revolving Credit Facility is defined as the interest expense (including without limitation the portion of capital lease obligations that constitutes imputed interest in accordance with GAAP) of the Company and its subsidiaries calculated on a consolidated basis for such period with respect to all outstanding indebtedness of the Company and its subsidiaries allocable to such period in accordance with GAAP.   19 Table of Contents   We believe we have● Global supply of and demand for raw materials, ● Economic growth rates, and ● Currency exchange rates compared to the abilityU.S. dollar. We purchase thousands of raw materials, the majority of which are petroleum/natural gas derivatives. The price of these derivatives impacts the cost of our raw materials. However, the supply of and demand for key raw materials has a greater impact on our costs. As demand increases in high-growth areas, the supply of key raw materials may tighten, resulting in certain materials being put on allocation. Natural disasters, such as hurricanes, also can have an impact as key raw material producers are shut down for extended periods of time. We continually monitor capacity utilization figures, market supply and demand conditions, feedstock costs and inventory levels, as well as derivative and intermediate prices, which affect our raw materials. With approximately 75 percent of our cost of sales accounted for by raw materials, our financial results are extremely sensitive to changing costs in this area. The pace of economic growth directly impacts certain industries to which we supply products. For example, adhesives-related revenues from durable goods customers in areas such as appliances, furniture and other woodworking applications tend to fluctuate with the overall economic activity. In business components such as Construction Adhesives and insulating glass in Engineering Adhesives, revenues tend to move with more specific economic indicators such as housing starts and other construction-related activity. The movement of foreign currency exchange rates as compared to the U.S. dollar impacts the translation of the foreign entities’ financial statements into U.S. dollars. As foreign currencies weaken against the U.S. dollar, our revenues and costs decrease as the foreign currency-denominated financial statements translate into fewer U.S. dollars. The fluctuations of the Euro, Chinese renminbi, British pound sterling, Egyptian pound, Turkish lira, Brazilian real, Canadian dollar, Australian dollar and Mexican peso against the U.S. dollar have the largest impact on our financial results as compared to all other currencies. In 2023, currency fluctuations had a negative impact on net revenue of approximately $88.5 million as compared to meet all of our contractual obligations and commitments in fiscal 2022. Key financial results andtransactions for 2023 included the following:   ● Net Financial Assets (Liabilities)revenue decreased 6.4 percent from 2022 primarily driven by an 8.4 percent decrease in sales volume and a 2.4 percent decrease due to currency fluctuations, partially offset by a 3.3 percent increase due to acquisitions and 2.9 percent increase in product pricing. Additionally, in 2022, we had a 53-week year compared to a 52-week year in 2023, and 2023 revenue was lower by 1.8 percent due to the extra week in 2022. ● Gross profit margin increased to 28.7 percent in 2023 from 25.7 percent in 2022, due to an increase in product pricing and lower raw material costs partially offset by the impact of lower sales volume. ● Cash flow generated by operating activities was $378.4 million in 2023 as compared to $256.5 million in 2022. Our total year organic revenue growth, which we define as the combined variances from sales volume and product pricing, decreased 5.5 percent for 2023 compared to 2022 due to a decrease in sales volume, partially offset by an increase in product pricing. In 2023, our diluted earnings per share was $2.59 compared to $3.26 in 2022. The lower earnings per share in 2023 compared to 2022 was primarily due to lower net revenue, higher operating costs, interest expense and income tax expense, partially offset by lower raw material costs. Information pertaining to fiscal year 2021 was included in the Company’s Annual Report on Form 10-K for the year ended December 3, 2022, under Part II, Item 7 “Management’s Discussion and Analysis of Financial Position and Results of Operations,” which was filed with the SEC on January 24, 2023. Project ONE In December 2012,our Board of Directors approved a multi-year project to replace and enhance our existing core information technology platforms. The scope for this project includes most of the basic transaction processing for the company including customer orders, procurement, manufacturing and financial reporting. The project envisions harmonized business processes for all of our operating segments supported with one standard software configuration. The execution of this project, which we refer to as Project ONE, is being supported by internal resources and consulting services. Implementation of Project ONE began in our North America adhesives business in 2014 and, through 2023, we completed implementation of this system in various parts of our business including Latin America (except Brazil), Australia, and various other businesses in North America and EIMEA. During 2024 and beyond, we will continue implementation in North America, EIMEA, Brazil and Asia Pacific. 20 Table of Contents Total expenditures for Project ONE are estimated to be $240 to $260 million, of which 60-65% is expected to be capital expenditures. Our total project-to-date expenditures are approximately $200 million, of which approximately $120 million are capital expenditures. Given the complexity of the implementation, the total investment to complete the project may exceed our estimate. Restructuring Plans During the second and third quarters of 2023, the Company approved restructuring plans (the “Plans”) related to organizational changes and other actions to optimize operations and integrate acquired businesses. In implementing the Plans, the Company currently expects to incur costs of approximately $39.1 million to $44.1 million ($30.4 million to $34.4 million after-tax), which include (i) cash expenditures of approximately $28.4 million to $29.6 million ($22.0 million to $23.0 million after-tax) for severance and related employee costs globally and (ii) other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans. We have incurred costs of $27.0 million under the Plans as of December 2, 2023. The Plans began to be implemented in the second quarter of fiscal year 2023 and are currently expected to be completed during fiscal year 2026. The restructuring costs will be spread across the next several fiscal quarters as the measures are implemented with the majority of the charges recognized and cash payments occurring in fiscal 2023 and 2024. Critical Accounting Policies and Significant Estimates Management’s discussion and analysis of our results of operations and financial condition are based upon the Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We believe the critical accounting policies and areas that require the most significant judgments and estimates to be used in the preparation of the Consolidated Financial Statements relate to goodwill impairment; pension and other postretirement assumptions; long-lived assets recoverability; valuation of product, environmental and other litigation liabilities; valuation of deferred tax assets and accuracy of tax contingencies; and valuation of acquired assets and liabilities. Goodwill Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a purchase business combination. Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (the component level). Reporting units are determined by the discrete financial information available for the component and whether it is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. Our reporting units are as follows: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. We evaluate our goodwill for impairment annually at the beginning of the fourth quarter or earlier upon the occurrence of substantive unfavorable changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization. The quantitative impairment test requires judgment, including the identification of reporting units, the assignment of assets, liabilities and goodwill to reporting units, and the determination of fair value of each reporting unit. The impairment test requires the comparison of the fair value of each reporting unit with its carrying amount, including goodwill. In performing the impairment test, we determined the fair value of our reporting units through the income approach by using discounted cash flow (“DCF”) analyses. Determining fair value requires the Company to make judgments about appropriate forecasted revenue and related revenue growth rate, the earnings before interest, taxes, depreciation and amortization ("EBITDA") margins rate and the weighted average cost of capital. The cash flows employed in the DCF analysis for each reporting unit are based on the reporting unit's budget, long-term business plan and recent operating performance. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting unit and market conditions. Given the inherent uncertainty in determining the assumptions underlying a DCF analysis, actual results may differ from those used in our valuations. In assessing the reasonableness of the determined fair values, we also reconciled the aggregate determined fair value of the Company to the Company's market capitalization, which, at the date of our 2023 impairment test, included a 26 percent control premium. 21 Table of Contents For the 2023 impairment test, the fair value of the reporting units exceeded the respective carrying values by 8 percent to 140 percent. Significant assumptions used in the DCF analysis included discount rates that ranged from 10.1 percent to 12.3 percent and long-term revenue growth rates. The Construction Adhesives reporting unit, with $432.8 million of goodwill assigned to it as of December 2, 2023, exceeded the respective carrying value by 8 percent. An increase in the discount rate of 10 basis points or a decrease in the long-term growth rates of 10 percent would result in the fair value of the Construction Adhesives reporting unit falling below its carrying value. The Engineering Adhesives and Hygiene, Health and Consumable Adhesives reporting units had significant fair value in excess of carrying value. Management will continue to monitor these reporting units for changes in the business environment that could impact recoverability. The recoverability of goodwill is dependent upon the continued growth of cash flows from our business activities. If the economy or business environment falter and we are unable to achieve our assumed revenue growth rates or profit margin percentages, our projections used would need to be remeasured, which could impact the carrying value of our goodwill in one or more of our reporting units. Most significantly, for our Construction Adhesives reporting unit, a decrease in the planned volume revenue growth would negatively impact the fair value of the reporting unit and the calculation of excess carrying value. See Note 5 to the Consolidated Financial Statements for further information regarding goodwill. Pension and Other Postretirement Plan Assumptions We sponsor defined-benefit pension plans in both the U.S. and non-U.S. entities. Also in the U.S., we sponsor other postretirement plans for health care and life insurance benefits. Expenses and liabilities for the pension plans and other postretirement plans are actuarially calculated. These calculations are based on our assumptions related to the discount rate, expected return on assets, projected salary increases and health care cost trend rates. Note 10 to the Consolidated Financial Statements includes disclosure of assumptions employed in these measurements for both the non-U.S. and U.S. plans. The discount rate assumption is determined using an actuarial yield curve approach, which results in a discount rate that reflects the characteristics of the plan. The approach identifies a broad population of corporate bonds that meet the quality and size criteria for the particular plan. We use this approach rather than a specific index that has a certain set of bonds that may or may not be representative of the characteristics of our particular plan. A higher discount rate reduces the present value of the pension obligations. The discount rate for the U.S. pension plan was 5.66 percent at December 2, 2023, 5.36 percent at December 3, 2022 and 2.76 percent at November 27, 2021. Net periodic pension cost for a given fiscal year is based on assumptions developed at the end of the previous fiscal year. A discount rate change of 0.5 percentage points at December 2, 2023 would impact U.S. pension and other postretirement plan (income) expense by $0.1 million (pre-tax) in fiscal 2024. Discount rates for non-U.S. plans are determined in a manner consistent with the U.S. plans. The expected long-term rate of return on plan assets assumption for the U.S. pension plan was 7.75 percent in 2023, 7.00 percent in 2022 and 7.25 percent in 2021. Our expected long-term rate of return on U.S. plan assets was based on our target asset allocation assumption of 55 percent equities and 45 percent fixed-income. Management, in conjunction with our external financial advisors, determines the expected long-term rate of return on plan assets by considering the expected future returns and volatility levels for each asset class that are based on historical returns and forward looking observations. For 2023, the expected long-term rate of return on the target equities allocation was 8.50 percent and the expected long-term rate of return on the target fixed-income allocation was 5.60 percent. The total plan rate of return assumption included an estimate of the effect of diversification and the plan expense. A change of 0.5 percentage points for the expected return on assets assumption would impact U.S. net pension and other postretirement plan expense by approximately $2.3 million (pre-tax). Management, in conjunction with our external financial advisors, uses the actual historical rates of return of the asset categories to assess the reasonableness of the expected long-term rate of return on plan assets. The most recent 10-year and 20-year historical equity returns are shown in the table below. Our expected rate of return on our total portfolio is consistent with the historical patterns observed over longer time frames.     Total             Fixed   U.S. Pension Plan Historical Actual Rates of Return   Portfolio     Equities     Income                             10-year period     5.4 %     6.9 %     3.4 % 20-year period     6.5 %     7.1 %     5.5 %* * Beginning in 2022, our target allocation migrated from 60 percent equities and 40 percent fixed-income to 55 percent equities and 45 percent fixed income. The historical actual rate of return for the fixed income of 5.5 percent is since inception (17 years, 11 months). 22 Table of Contents The expected long-term rate of return on plan assets assumption for non-U.S. pension plans was a weighted-average of 5.02 percent in 2023 compared to 3.49 percent in 2022 and 6.15 percent in 2021. The expected long-term rate of return on plan assets assumption used in each non-U.S. plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the effect of active management of the plan’s assets. Our largest non-U.S. pension plans are in the United Kingdom and Germany. The expected long-term rate of return on plan assets for the United Kingdom was 4.50 percent and the expected long-term rate of return on plan assets for Germany was 5.50 percent. Management, in conjunction with our external financial advisors, uses actual historical returns of the asset portfolio to assess the reasonableness of the expected rate of return for each plan. The projected salary increase assumption is based on historic trends and comparisons to the external market. Higher rates of increase result in higher pension expenses. As this rate is also a long-term expected rate, it is less likely to change on an annual basis. Under the U.S. pension plan, the compensation amount was locked-in as of May 31, 2011 and thus the benefit no longer includes compensation increases. Projected salary increase assumptions for non-U.S. plans are determined in a manner consistent with the U.S. plans. Recoverability of Long-Lived Assets The assessment of the recoverability of long-lived assets reflects our assumptions and estimates. Factors that we must estimate when performing impairment tests include sales volume, prices, inflation, currency exchange rates, tax rates and capital spending. Significant judgment is involved in estimating these factors, and they include inherent uncertainties. The measurement of the recoverability of these assets is dependent upon the accuracy of the assumptions used in making these estimates and how the estimates compare to the eventual future operating performance of the specific businesses to which the assets are attributed. Judgments made by us include the expected useful lives of long-lived assets. The ability to realize undiscounted cash flows in excess of the carrying amounts of such assets is affected by factors such as the ongoing maintenance and improvement of the assets, changes in economic conditions and changes in operating performance. Product, Environmental and Other Litigation Liabilities As disclosed in Item 3. Legal Proceedings and in Note 1 and Note 14 to the Consolidated Financial Statements, we are subject to various claims, lawsuits and other legal proceedings. Reserves for loss contingencies associated with these matters are established when it is determined that a liability is probable and the amount can be reasonably estimated. The assessment of the probable liabilities is based on the facts and circumstances known at the time that the financial statements are being prepared. For cases in which it is determined that a liability is probable but only a range for the potential loss exists, the minimum amount of the range is recorded and subsequently adjusted as better information becomes available. For cases in which insurance coverage is available, the gross amount of the estimated liabilities is accrued, and a receivable is recorded for any probable estimated insurance recoveries. A discussion of environmental, product and other litigation liabilities is disclosed in Item 3. Legal Proceedings and Note 14 to the Consolidated Financial Statements. Based upon currently available facts, we do not believe that the ultimate resolution of any pending legal proceeding, individually or in the aggregate, will have a material adverse effect on our long-term financial condition. However, adverse developments and/or periodic settlements could negatively affect our results of operations or cash flows in one or more future quarters. Income Tax Accounting As part of the process of preparing the Consolidated Financial Statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. The process involves estimating actual current tax expense along with assessing temporary differences resulting from differing treatment of items for book and tax purposes. These temporary differences result in deferred tax assets and liabilities, which are included in the Consolidated Balance Sheets. We record a valuation allowance to reduce our deferred tax assets to the amount that is more-likely-than-not to be realized. We have considered future taxable income and ongoing tax planning strategies in assessing the need for the valuation allowance. Increases in the valuation allowance result in additional expense to be reflected within the tax provision in the Consolidated Statements of Income. The valuation allowance to reduce deferred tax assets totaled $15.6 million as of December 2, 2023, and $14.4 million as of December 3, 2022. 23 Table of Contents We recognize tax benefits for tax positions for which it is more-likely-than-not that the tax position will be sustained by the applicable tax authority at the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement. We do not recognize a financial statement benefit for a tax position that does not meet the more-likely-than-not threshold. We believe that our liabilities for income taxes reflect the most likely outcome. It is difficult to predict the final outcome or the timing of the resolution of any particular tax position. Future changes in judgment related to the resolution of tax positions will impact earnings in the quarter of such change. We adjust our income tax liabilities related to tax positions in light of changing facts and circumstances. Settlement with respect to a tax position would usually require cash. Based upon our analysis of tax positions taken on prior year returns and expected tax positions to be taken for the current year tax returns, we have identified gross uncertain tax positions of $14.3 million as of December 2, 2023 and $17.6 million as of December 3, 2022. We have not recorded U.S. deferred income taxes for certain of our non-U.S. subsidiaries undistributed earnings as such amounts are intended to be indefinitely reinvested outside of the U.S. Should we change our business strategies related to these non-U.S. subsidiaries, additional U.S. tax liabilities could be incurred. It is not practical to estimate the amount of these additional tax liabilities. See Note 11 to the Consolidated Financial Statements for further information on income tax accounting. Acquisition Accounting As we enter into business combinations, we perform acquisition accounting requirements including the following:   ($ in millions)   2021     2020   Financial assets:                 Cash and cash equivalents   $ 61.8     $ 100.5   Foreign exchange contracts     5.7       2.3   Cash flow hedges     14.5       2.5   Financial liabilities:                 Notes payable     (25.0 )     (16.9 ) Long-term debt     (1,591.5 )     (1,757.0 ) Foreign exchange contracts     (6.1 )     (5.3 ) Interest rate swaps     (22.9 )     (33.0 ) Net financial liabilities   $ (1,563.5 )   $ (1,706.9 ) ● Identifying the acquirer, ● Determining the acquisition date, ● Recognizing and measuring the identifiable assets acquired and the liabilities assumed, and ● Recognizing and measuring goodwill or a gain from a bargain purchase. We complete valuation procedures and record the resulting fair value of the acquired assets and assumed liabilities based upon the valuation of the business enterprise and the tangible and intangible assets acquired. Enterprise value allocation methodology requires management to make assumptions and apply judgment to estimate the fair value of assets acquired and liabilities assumed. If estimates or assumptions used to complete the enterprise valuation and estimates of the fair value of the acquired assets and assumed liabilities significantly differed from assumptions made, the resulting difference could materially affect the fair value of net assets. The calculation of the fair value of the tangible assets, including property, plant and equipment, utilizes the cost approach, which computes the cost to replace the asset, less accrued depreciation resulting from physical deterioration, functional obsolescence and external obsolescence. The calculation of the fair value of the identified intangible assets are determined using cash flow models following the income approach or a discounted market-based methodology approach. Significant inputs include estimated revenue growth rates, gross margins, operating expenses, and estimated attrition, royalty and discount rates. Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price. Results of Operations Net revenue ($ in millions)   2023     2022     2023 vs 2022   Net revenue   $ 3,510.9     $ 3,749.2       (6.4 )% 24 Table of Contents We review variances in net revenue in terms of changes related to sales volume and product pricing (referred to as organic revenue growth), business acquisitions and divestitures (M&A) and changes in foreign currency exchange rates. The following table shows the net revenue variance analysis for fiscal 2023 compared to fiscal 2022:   Of the $61.82023 vs 2022 Organic revenue growth (5.5 )% Extra week in 2022 (53-week year) (1.8 )% M&A 3.3 % Currency (2.4 )% Net revenue growth (6.4 )% Organic revenue decreased 5.5 percent in 2023 compared to 2022 and consisted of an 11.0 percent decrease in Construction Adhesives, a 5.1 percent decrease in Hygiene, Health and Consumable Adhesives and a 4.2 percent decrease in Engineering Adhesives. The decrease is driven by a decrease in sales volume, partially offset by an increase in product pricing. The 3.3 percent increase from M&A is due to acquisitions that occurred during the year. The negative 2.4 percent currency impact was primarily driven by a weaker Egyptian pound, Chinese renminbi, Turkish lira and Argentinian peso offset by a stronger Euro and Mexican peso compared to the U.S. dollar. Additionally, net revenue in 2023 was lower than 2022 by 1.8 percent from an additional week of revenue in 2022 as it was a 53-week fiscal year compared to a 52-week fiscal year in 2023. Cost of sales ($ in millions)   2023     2022     2023 vs 2022   Cost of sales   $ 2,502.0     $ 2,785.5       (10.2 )% Percent of net revenue     71.3 %     74.3 %         Cost of sales in 2023 compared to 2022 decreased 300 basis points as a percentage of net revenue. Lower raw material costs and higher product pricing partially offset by the impact of lower sales volume led to the decrease. Gross profit ($ in millions)   2023     2022     2023 vs 2022   Gross profit   $ 1,008.9     $ 963.7       4.7 % Percent of net revenue     28.7 %     25.7 %         Gross profit in 2023 increased 4.7 percent and gross profit margin increased 300 basis points compared to 2022. The increase in gross profit margin was primarily due to lower raw material costs and higher product pricing partially offset by the impact of lower sales volume. Selling, general and administrative (SG&A) expenses ($ in millions)   2023     2022     2023 vs 2022   SG&A   $ 653.8     $ 641.0       2.0 % Percent of net revenue     18.6 %     17.1 %         SG&A expenses for 2023 increased $12.8 million, or 2.0 percent compared to 2022. The increase is due to higher restructuring and acquisition project costs and the impact of acquisitions. SG&A expenses as a percent of revenue increased by 150 basis points compared to the prior year due to lower net revenue and higher restructuring and acquisition project costs. 25 Table of Contents Other income, net ($ in millions)   2023     2022   Other income, net   $ 9.8     $ 12.9   Other income, net in 2023 included $20.3 million of net defined benefit pension benefits and $1.2 of other income, partially offset by $11.6 million of currency transaction losses and a $0.1 million loss on disposal of assets. Other income, net in 2022 included $26.8 million of net defined benefit pension benefits and a $1.4 million gain on disposal of assets, partially offset by $12.9 million of currency transaction losses and $2.4 of other expense. The $26.8 million of net defined benefit pension benefits for 2022 included a $3.3 million settlement loss related to the termination of our Canadian defined benefit pension plan. Interest expense ($ in millions)   2023     2022   Interest expense   $ 134.6     $ 91.5   Interest expense was $134.6 million and $91.5 million in 2023 and 2022, respectively, and was higher primarily due to higher debt balances and higher interest rates. We capitalized $1.8 million and $1.5 million of interest expense in 2023 and 2022, respectively. Interest income ($ in millions)   2023     2022   Interest income   $ 3.9     $ 7.8   Interest income in 2023 and 2022 was $3.9 million and $7.8 million, respectively, consisting primarily of interest on cross-currency swap activity and other miscellaneous interest income. Income tax expense: ($ in millions)   2023     2022   Income tax expense   $ 93.5     $ 77.2   Effective tax rate     39.9 %     30.6 % Income tax expense of $93.5 million in 2023 includes $26.1 million of discrete tax expense, primarily related to the impact of withholding tax recorded on earnings that are no longer permanently reinvested, as well as other various U.S. and foreign tax matters. Excluding the discrete tax expense of $26.1 million, the overall effective tax rate was 28.8 percent. Income tax expense of $77.2 million in 2022 includes $9.3 million of discrete tax expense, primarily related to the revaluation of cross-currency swap agreements due to depreciation of the Euro versus the U.S. dollar and several foreign discrete items, offset in part by U.S. tax benefit for state deferred tax rate change and excess tax benefit for stock compensation. Excluding the discrete tax expense of $9.3 million, the overall effective tax rate was 26.9 percent.  Table of Contents The increase in the overall effective tax rate for 2023 compared to 2022, excluding the impact of discrete items, is primarily due to the change in the mix of earnings across jurisdictions, as well as the impact of withholding tax recorded on current earnings that will not be permanently invested. 26 Table of Contents Income from equity method investments ($ in millions)   2023     2022   Income from equity method investments   $ 4.4     $ 5.7   The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The lower income for 2023 compared to 2022 is due to the unfavorable impact of the weakening of the Japanese yen against the U.S. dollar and lower net income in our joint venture. Net income attributable to H.B. Fuller ($ in millions)   2023     2022     2023 vs 2022   Net income attributable to H.B. Fuller   $ 144.9     $ 180.3       (19.6 )% Percent of net revenue     4.1 %     4.8 %         Net income attributable to H.B. Fuller was $144.9 million in 2023 compared to $180.3 million in 2022. Diluted earnings per share were $2.59 per share in 2023 and $3.26 per share in 2022. Operating Segment Results We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. For segment evaluation by the chief operating decision maker, segment operating income is defined as gross profit less SG&A expenses. Inter-segment revenues are recorded at cost plus a markup for administrative costs. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment. We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The tables below provide certain information regarding the net revenue and segment operating income of each of our operating segments. Corporate Unallocated includes business acquisition and integration costs, organizational restructuring charges and project costs related to the implementation of Project ONE. Net Revenue by Segment     2023     2022       Net     % of     Net     % of   ($ in millions)   Revenue     Total     Revenue     Total   Hygiene, Health and Consumable Adhesives   $ 1,601.5       46 %   $ 1,695.9       45 % Engineering Adhesives     1,428.7       41 %     1,532.7       41 % Construction Adhesives     480.7       13 %     520.6       14 % Total   $ 3,510.9       100 %   $ 3,749.2       100 % Segment Operating Income (Loss)     2023     2022       Operating     % of     Operating     % of   ($ in millions)   Income (Loss)     Total     Income (Loss)     Total   Hygiene, Health and Consumable Adhesives   $ 215.1       61 %   $ 165.8       51 % Engineering Adhesives     187.3       53 %     168.8       52 % Construction Adhesives     6.0       1 %     23.0       8 % Segment total     408.4       115 %     357.6       111 % Corporate Unallocated     (53.3 )     (15 )%     (34.9 )     (11 )% Total   $ 355.1       100 %   $ 322.7       100 % 27 Table of Contents The following table provides a reconciliation of segment operating income to income before income taxes and income from equity method investments, as reported in the Consolidated Statements of Income. ($ in millions)   2023     2022   Segment operating income   $ 355.1     $ 322.7   Other income, net     9.8       12.9   Interest expense     (134.6 )     (91.5 ) Interest income     3.9       7.8   Income before income taxes and income from equity method investments   $ 234.2     $ 251.9   Hygiene, Health and Consumable Adhesives ($ in millions)   2023     2022     2023 vs 2022   Net revenue   $ 1,601.5     $ 1,695.9       (5.6 )% Segment operating income   $ 215.1     $ 165.8       29.7 % Segment profit margin %     13.4 %     9.8 %         The following tables provide details of Hygiene, Health and Consumable Adhesives net revenue variances: 2023 vs 2022 Organic revenue growth (5.1 )% Extra week in 2022 (53-week year) (1.8 )% M&A 4.6 % Currency (3.3 )% Net revenue growth (5.6 )% Net revenue decreased 5.6 percent in 2023 compared to 2022. The decrease in organic revenue growth was attributable to a decrease in sales volume, partially offset by an increase in product pricing. The 4.6 percent increase in net revenue from M&A was due to acquisitions of Lemtapes in the first quarter of 2023, Beardow Adams in the second quarter of 2023 and Adhezion in the third quarter of 2023. The negative currency effect was due to a weaker Egyptian pound, Turkish lira, Argentinian peso and Chinese renminbi offset by a stronger Mexican peso and Euro compared to the U.S. dollar. Additionally, net revenue in 2023 was lower than 2022 by 1.8 percent from an additional week of revenue in 2022 as it was a 53-week fiscal year compared to a 52-week fiscal year in 2023. As a percentage of net revenue, gross margin increased due to lower raw material costs and higher product pricing partially offset by the impact of lower sales volume. SG&A expenses as a percentage of net revenue increased due to the impact of acquisitions and lower net revenue. Segment operating income increased 29.7 percent and segment operating margin as a percentage of net revenue increased 360 basis points in 2023 as compared to 2022. Engineering Adhesives ($ in millions)   2023     2022     2023 vs 2022   Net revenue   $ 1,428.7     $ 1,532.7       (6.8 )% Segment operating income   $ 187.3     $ 168.8       11.0 % Segment profit margin %     13.1 %     11.0 %         The following tables provide details of Engineering Adhesives net revenue variances: 2023 vs 2022 Organic revenue growth (4.2 )% Extra week in 2022 (53-week year) (1.8 )% M&A 1.2 % Currency (2.0 )% Net revenue growth (6.8 )% 28 Table of Contents Net revenue decreased 6.8 percent in 2023 compared to 2022. The decrease in organic revenue growth was attributable to a decrease in sales volume, partially offset by a slight increase in product pricing. The 1.2 percent increase in net revenue from M&A was due to the acquisitions of ZKLT in the third quarter of 2022 and Aspen in the first quarter of 2023. The negative currency effect was due to a weaker Chinese renminbi and Turkish lira partially offset by a stronger Euro compared to the U.S. dollar. Additionally, net revenue in 2023 was lower than 2022 by 1.8 percent from an additional week of revenue in 2022 as it was a 53-week fiscal year compared to a 52-week fiscal year in 2023. As a percentage of net revenue, gross margin increased due to lower raw material costs and higher product pricing partially offset by the impact of lower sales volume. SG&A expenses as a percentage of net revenue increased due to lower net revenue. Segment operating income increased 11.0 percent and segment operating margin as a percentage of net revenue increased 210 basis points in 2023 as compared to 2022. Construction Adhesives ($ in millions)   2023     2022     2023 vs 2022   Net revenue   $ 480.7     $ 520.6       (7.7 )% Segment operating income   $ 6.0     $ 23.0       (73.9 )% Segment profit margin %     1.2 %     4.4 %         The following tables provide details of Construction Adhesives net revenue variances: 2023 vs 2022 Organic revenue growth (11.0 )% Extra week in 2022 (53-week year) (1.6 )% M&A 5.4 % Currency (0.5 )% Net revenue growth (7.7 )% Net revenue decreased 7.7 percent in 2023 compared to 2022. The decrease in organic revenue growth was attributable to a decrease in sales volume, partially offset by an increase in product pricing. The 5.4 percent increase in net revenue from M&A was due to the acquisitions of GSSI in the fourth quarter of 2022, XChem in the third quarter of 2023 and Sanglier in the fourth quarter of 2023. The negative currency effect was due to a weaker Australian dollar and Canadian dollar offset by a stronger Euro compared to the U.S. dollar. Additionally, net revenue in 2023 was lower than 2022 by 1.6 percent from an additional week of revenue in 2022 as it was a 53-week fiscal year compared to a 52-week fiscal year in 2023. As a percentage of net revenue, gross margin decreased slightly primarily due to the impact of lower sales volume partially offset by higher product pricing and lower raw material costs. SG&A expenses as a percentage of net revenue increased due to the impact of acquisitions and lower net revenue. Segment operating income decreased 73.9 percent and segment operating margin as a percentage of net revenue decreased 320 basis points in 2023 as compared to 2022. Corporate Unallocated ($ in millions)   2023     2022     2023 vs 2022   Segment operating loss   $ (53.3 )   $ (34.9 )     52.7 % Segment profit margin %   NMP     NMP           NMP = Non-meaningful percentage Corporate Unallocated includes acquisition and integration-related charges, restructuring-related charges and costs related to the implementation of Project ONE. Segment operating loss increased 52.7 percent in 2023 reflecting higher restructuring and acquisition project costs compared to 2022.  29 Table of Contents Financial Condition, Liquidity and Capital Resources Total cash and cash equivalents as of December 2, 2023 were $179.5 million compared to $79.9 million as of December 3, 2022. Total long and short-term debt was $1,838.4 million as of December 2, 2023 and $1,765.1 million as of December 3, 2022. We believe that cash flows from operating activities will be adequate to meet our short-term and long-term liquidity and capital expenditure needs. In addition, we believe we have the ability to obtain both short-term and long-term debt to meet our financing needs for the foreseeable future. Cash available in the United States has historically been sufficient and we expect it will continue to be sufficient to fund U.S. operations, U.S. capital spending and U.S. pension and other postretirement benefit contributions in addition to funding U.S. acquisitions, dividend payments, debt service and share repurchases as needed. For those international earnings considered to be reinvested indefinitely, we currently have no intention to, and plans do not indicate a need to, repatriate these funds for U.S. operations. Our credit agreements include restrictive covenants that, if not met, could lead to a renegotiation of our credit lines and a significant increase in our cost of financing. At December 2, 2023, we were in compliance with all covenants of our contractual obligations as shown in the following table: Covenant Debt Instrument Measurement Result as of November 27, 2021, $58.4 million was held outside the U.S. Of the $58.4 million of cash held outside the U.S., earnings on $56.0 million are indefinitely reinvested outside of the U.S. ItDecember 2, 2023 Secured Total Indebtedness / TTM1 EBITDA Revolving Facility and Term Loan A Facility Not greater than 4.752 2.1 TTM1 EBITDA / Consolidated Interest Expense Revolving Facility and Term Loan A Facility Not less than 2.0 4.6 1 TTM = trailing 12 months 2 The Maximum Secured Leverage Ratio prior to June 1, 2024, shall be 4.75 to 1.00 and will step down to 4.50 to 1.00 with respect to quarters ending after June 1, 2024 EBITDA for covenant purposes is not practicaldefined as consolidated net income, plus (i) interest expense, (ii) expense for us to determine the U.S. tax implications of the repatriation of these funds. There are no contractualtaxes paid or regulatory restrictions on the ability of consolidatedaccrued, (iii) depreciation and unconsolidated subsidiaries to transfer fundsamortization, (iv) certain non-cash impairment losses, (v) extraordinary non-cash losses incurred other than in the formordinary course of cash dividends, loans or advances to us, except for: 1) a credit facility limitation restricting investments, loans, advances or capital contributions from Loan Parties to non-Loan Parties inbusiness, (vi) nonrecurring extraordinary non-cash restructuring charges and the non-cash impact of purchase accounting, (vii) any non-cash charge for the excess of $100.0 million, 2) a credit facility limitation that provides totalrent expense over actual cash rent paid due to the use of straight-line rent, non-cash charge pursuant to any management equity plan, stock option plan or any other management or employee benefit, (viii) any non-cash finance charges in respect of any pension liabilities or other provisions and income (loss) attributable to deferred compensation plans, (ix) any non-recurring or unusual cash restructuring charges and operating improvements, (x) cost savings initiative and cost synergies related to acquisitions within 12 months, (xi) non-capitalized charges relating to the Company’s SAP implementation, (xii) fees, costs, expenses and charges incurred in connection with the financing, (xiii) fees, costs, expenses, make-whole or penalty payments and other similar items arising out of acquisitions, investments loans, advancesand dispositions, the incurrence, issuance, repayment or guaranteesrefinancing of indebtedness and any issuance of equity interests; minus, non-recurring or unusual non-cash gains incurred not otherwise permitted in the credit agreementordinary course of business. Provided that the aggregate amounts that may be added back for all subsidiariesany period pursuant to clauses (ix), (x) and (xi) shall not exceed $125.0 million15% of EBITDA for such period (calculated prior to giving effect to all addbacks and adjustments). For Secured Total Indebtedness / TTM EBITDA ratio, TTM EBITDA is adjusted for the pro forma results from Material Acquisitions and Material Divestitures, both as defined in the aggregate, 3)Second Amended and Restated Credit Agreement, as if the acquisition or divestiture occurred at the beginning of the calculation period. The full definition is set forth in the Second Amended and Restated Credit Agreement the Company filed as an exhibit to its 8-K filing dated February 21, 2023. Consolidated Interest Expense for covenant purposes is defined as the interest expense (including without limitation to the portion of capital lease obligations that constitutes imputed interest in accordance with GAAP) of the Company and its subsidiaries calculated on a consolidated basis for such period with respect to all outstanding indebtedness allocable to such period in accordance with GAAP, including net costs (or benefits) under Interest Rate Swap Agreements and commissions, discounts and other fees and charges with respect to letters of credit facility limitation that provides total investments, dividends, and distributions shall not exceed the Available Amount defined in these agreements,interest component of all three of which do not apply once our secured leverage ratio dropsAttributable Receivables Indebtedness. We believe we have the ability to meet all of our contractual obligations and commitments in fiscal 2024. 30 Table of Contents Net Financial Assets (Liabilities) ($ in millions)   2023     2022   Financial assets:                 Cash and cash equivalents   $ 179.5     $ 79.9   Foreign exchange contracts     13.5       10.3   Interest rate swaps     3.6       -   Financial liabilities:                 Notes payable     (1.8 )     (28.9 ) Long-term debt     (1,836.6 )     (1,736.3 ) Foreign exchange contracts     (5.0 )     (4.6 ) Interest rate swaps     (41.6 )     (42.5 ) Net investment hedges     (72.6 )     (54.0 ) Net financial liabilities   $ (1,761.1 )   $ (1,776.1 ) Of the $179.5 million in cash and cash equivalents as of December 2, 2023, $152.9 million was held outside the U.S. Of the $152.9 million of cash held outside the U.S., earnings on $136.0 million are indefinitely reinvested outside of the U.S. It is not practical for us to determine the U.S. tax implications of the repatriation of these funds. There are no contractual or regulatory restrictions on the ability of consolidated and unconsolidated subsidiaries to transfer funds in the form of cash dividends, loans or advances to us. Our credit facilities have the following restrictions related to investments and general limitations: 1) a credit facility limitation restricting investments, loans, advances or capital contributions from Loan Parties to non-Loan Parties in excess of $150.0 million, 2) a credit facility limitation that provides total investments, loans, advances or guarantees not otherwise permitted in the credit agreement for all subsidiaries shall not exceed $150.0 million in the aggregate, 3) a credit facility limitation that provides total investments, dividends, and distributions shall not exceed the Available Amount defined in these agreements, all three of which do not apply when our secured leverage ratio is below 4.0x, and 4) typical statutory restrictions, which prohibit distributions in excess of net capital or similar tests. The Royal Adhesives acquisition and any investments, loans, and advances established to consummate the Royal Adhesives acquisition, are excluded from the credit facility limitations described above. Additionally, we have taken the income tax position that the majority of our cash in non-U.S. locations is indefinitely reinvested.   Debt Outstanding and Debt Capacity   Notes Payable   Notes payable were $25.0$1.8 million at November 27, 2021December 2, 2023 and $16.9$28.9 million at November 28, 2020.December 3, 2022. These amounts primarily represented various foreign subsidiaries’ short-term borrowings that were not part of committed lines. The current weighted-average interest rates on these short-term borrowings were 8.1were approximately 10.75 percent in 2023 and 16.2 percent in 2021 and 2020.2022. 31 Table of Contents   Long-Term Debt   Long-term debt consistedconsists of a senior secured term loan (“Term Loan A”) with an aggregate principal amount of $500.0 million and a senior secured term loan (“Term Loan B”) with an aggregate principal amount of $800.0 million. Interest on Term Loan A is payable at the Secured Overnight Financing Rate ("SOFR") plus an adjustment of 0.10 percent and twoan interest rate spread of 1.50 percent (6.95 percent at December 2, 2023). The interest rate spread is based on a secured leverage grid. Term Loan A matures on February 15, 2028. At December 2, 2023, a balance of $487.5 million was outstanding on Term Loan A. Interest on Term Loan B is payable at SOFR plus an interest rate spread of 2.25 percent with a SOFR floor of 0.50 percent (7.60 percent at December 2, 2023). Term Loan B matures on February 15, 2030. At December 2, 2023, a balance of $796.0 million was outstanding on Term Loan B. On January 12, 2023, we entered into an interest rate swap agreement (amended on February 28, 2023) to convert $400,000 of our variable rate 1-month SOFR to a fixed rate of 3.7260. On March 16, 2023, we entered into interest rate swap agreements to convert $300,000 of our 1-month SOFR rate debt to a fixed rate of 3.7210 percent and to convert $100,000 of our 1-month SOFR rate debt to a fixed rate of 3.8990 percent.  Long-term debt also consists of 10-year unsecured public notes (“10-year Public Notes”). The Term Loan B has a principal amount of $1,001.2 million and bears a floating interest rate at LIBOR plus 2.00 percent (2.09 percent at November 27, 2021) and matures in fiscal year 2024. The 10-year Public Notes have a with an aggregate principal amount of $300.0 million beardue February 15, 2027 with a fixed interest atcoupon of 4.00 percent and mature in 2027. We are subject to a par call of 1.00 percent except within three months of the maturity date. The 8-year unsecured public notes (“8-year Public Notes have aNotes”) with an aggregate principal amount of $300.0 million beardue October 15, 2028 with a fixed interest atcoupon of 4.25 percent and mature in 2028. We are subject to a par call plus 50 percent of coupon in year 4, plus 25 percent of coupon in year 5 and at par thereafter.percent. We currently have no intention to prepay the Public Notes. Additional details on the Public Notes and the Term Loan B Credit Agreement can be found in Form 8-K dated On February 9, 2017, Form 8-K dated October 20, 2017 and Form 8-K dated October 20, 2020, respectively. Interest payable on our long-term debt totaled $3.4 million as of November 27, 2021. We executed12, 2021, we entered into an interest rate swap agreements for the purpose of obtaining a fixed interest rate on $800.0 million of the $2,150.0 million Term Loan B. We have designated forecasted interest payments resulting from the variability of 1-month LIBOR in relation to $800.0 million of the Term Loan B as the hedged item in cash flow hedges. The combined fair value of the interest rate swaps in total was a liability of $12.3 million at November 27, 2021 and was included in other liabilities in the Consolidated Balance Sheets. We are applying the hypothetical derivative method to assess hedge effectiveness for these interest rate swaps. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $800.0 million variable rate Term Loan B are compared with the change in the fair value of the swaps. We entered into interest rate swap agreementsagreement to convert our $300.0 million8-year Public Notes that were issued on October 20, 2020 to a variable interest rate of 1-month LIBOR plus 3.28 percent. We entered into interest rate swap agreements to convert $150.0 million of our $300.0 million Public Notes that were issued on February 14, 2017 to a variable interest rate of 1-month LIBOR plus 1.86 percent. See Note 712 to the Consolidated Financial Statements for further discussion on the issuance of our Public Notes. The swaps were designated for hedge accounting treatment as fair value hedges. We applied the hypothetical derivative method to assess hedge effectiveness for this interest rate swap. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of Interest payable on our fixed rate Public Notes are compared with the change in the fair value of the swaps. On May 1, 2020, we terminated the swap agreement. Upon termination, we received $15.8 million in cash. The remaining swap liability will be accounted for as a discount on long-term debt and will be amortized to interest expense over the remaining lifetaled $1.7 million as of the Public Notes of seven years.December 2, 2023.  Lines ofRevolving Credit Facility    We have a revolving credit agreement with a consortium of financial institutions at November 27, 2021.December 2, 2023. This revolving credit agreement creates a secured multi-currency revolving credit facility that we can draw upon to repay existing indebtedness, finance working capital needs, finance acquisitions and for general corporate purposes up to a maximum of $400.0$700.0 million. Interest on the revolving credit facility is payable at LIBORSOFR plus an adjustment of 0.10 percent and an interest rate spread of 1.50 percent (1.59(6.95 percent at November 27, 2021)December 2, 2023). A facility fee of 0.25 percent20 basis points of the unused commitment under the revolving credit facility is payable quarterly. The interest rate spread and the facility fee are based on a leveragesecured leverage grid. The credit facility expires on July 22, 2024. As of November 27, 2021, our lines of credit were undrawn. Additional detailsAt December 2, 2023, there was no balance outstanding on the revolving creditRevolving Credit Facility. The Revolving Credit Facility matures on February 15, 2028.  We are subject to mandatory prepayments in the first quarter of each fiscal year equal to 50 percent of Excess Cash Flow, as defined in our debt agreement, canof the prior fiscal year less any voluntary prepayments made during that fiscal year. The Excess Cash Flow Percentage shall be found in Form 8-K dated October 20, 2020. reduced to 25 percent when our Secured Leverage Ratio is below 4.25:1.00 and to 0 percent when our Secured Leverage Ratio is below 3.75:1.00. For further information related to debt outstanding and debt capacity, see Note 7 to the Consolidated Financial Statements.   Uncertainty relating to the LIBOR phase out at the end of 2021 may adversely impact the value of, and our obligations under, our Term Loan B, Public Notes and revolving credit facility. See the applicable discussion under Item 1A. Risk Factors. 20 Table of Contents   Goodwill and Other Intangible Assets   As of November 27, 2021,December 2, 2023, goodwill totaled $1,298.8$1,486.5 million (30.4(31.5 percent of total assets) and other intangible assets, net of accumulated amortization, totaled $687.1$729.1 million (16.1(15.4 percent of total assets). 32 Table of Contents   The components of goodwill and other identifiable intangible assets, net of amortization, by segment at November 27, 2021 are as follows:     2021     2023         Hygiene, Health                     Hygiene, Health                     and Consumable   Engineering   Construction         and Consumable   Engineering   Construction       ($ in millions)   Adhesives     Adhesives     Adhesives     Total     Adhesives     Adhesives     Adhesives     Total   Goodwill   $ 325.4     $ 662.0     $ 311.4     $ 1,298.8     $ 402.6     $ 651.1     $ 432.8     $ 1,486.5   Purchased technology and patents   7.0     36.4     10.2     53.6     41.7     28.9     14.5     85.1   Customer relationships   108.0     253.9     235.6     597.5     126.8     226.9     250.6     604.3   Tradenames   4.6     16.5     8.7     29.8     11.6     13.6     10.2     35.4   Other finite-lived intangible assets   2.3     0.2     3.2     5.7     1.5     -     2.4     3.9   Indefinite-lived intangible assets   -     0.5     -     0.5     -     0.5     -     0.5       2020     2022         Hygiene, Health                     Hygiene, Health                     and Consumable   Engineering   Construction         and Consumable   Engineering   Construction       ($ in millions)   Adhesives     Adhesives     Adhesives     Total     Adhesives     Adhesives     Adhesives     Total   Goodwill   $ 332.9     $ 667.9     $ 311.2     $ 1,312.0     $ 329.0     $ 637.9     $ 425.7     $ 1,392.6   Purchased technology and patents   9.1     40.2     11.2     60.5     5.7     31.5     15.1     52.3   Customer relationships   120.0     276.7     257.7     654.4     105.8     228.5     281.3     615.6   Tradenames   5.3     18.7     9.9     33.9     4.5     14.6     9.8     28.9   Other finite-lived intangible assets   2.8     0.3     3.5     6.6     1.9     0.1     2.8     4.8   Indefinite-lived intangible assets   -     0.5     -     0.5     -     0.5     -     0.5   33 Table of Contents   Selected Metrics of Liquidity and Capital Resources   Key metrics we monitor are net working capital as a percent of annualized net revenue, trade receivables days sales outstanding (DSO), inventory days on hand, free cash flow after dividends and debt capitalization ratio.     November 27,   November 28,     December 2,   December 3,     2021     2020     2023     2022   Net working capital as a percentage of annualized net revenue1   15.7 %   16.8 %   16.1 %   16.6 % Trade receivables DSO (in days)2   62     60     58     62   Inventory days on hand (in days)3   65     55     67     71   Free cash flow after dividends4   $ 82.3     $ 210.8   Debt capitalization ratio5   50.2 %   56.1 % Trade accounts payable DPO (in days)4   64   64   Free cash flow after dividends5   $ 215.9     $ 87.3   Debt capitalization ratio6   51.1 %   52.3 %   1 Current quarter netNet working capital (trade receivables, net of allowance for doubtful accounts plus inventory minus trade payables) divided by annualized net revenue (current quarter, multiplied by 4).   2 Trade receivables net of allowance for doubtful accounts multiplied by 91 (13 weeks) and divided by the net revenue for the quarter.   3 Total inventory multiplied by 91 and divided by cost of sales (excluding delivery costs) for the quarter.   4Trade accounts payable multiplied by 91 (13 weeks) and divided by the net revenue for the quarter. 5 Net cash provided by operating activities less purchased property, plant and equipment and dividends paid. See reconciliation to net cash provided by operating activities to free cash flow after dividends below.   56 Total debt divided by (total debt plus total stockholders’ equity).   Free cash flow after dividends, a non-GAAP financial measure, is defined as net cash provided by operating activities less purchased property, plant and equipment and dividends paid. Free cash flow after dividends is an integral financial measure used by the Company to assess its ability to generate cash in excess of its operating needs, therefore, the Company believes this financial measure provides useful information to investors. The following table reflects the manner in which free cash flow after dividends is determined and provides a reconciliation of free cash flow after dividends to net cash provided by operating activities, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP.   34 Table of Contents Reconciliation of “Net cash provided by operating activities” to "Free cash flow after dividends"   ($ in millions)   2021     2020   Net cash provided by operating activities   $ 213.3     $ 331.6   Less: Purchased property, plant and equipment     96.1       87.3   Less: Dividends paid     34.9       33.5   Free cash flow after dividends   $ 82.3     $ 210.8   21 Table of Contents ($ in millions)   2023     2022   Net cash provided by operating activities   $ 378.4     $ 256.5   Less: Purchased property, plant and equipment     119.1       130.0   Less: Dividends paid     43.4       39.2   Free cash flow after dividends   $ 215.9     $ 87.3     Summary of Cash Flows   Cash Flows from Operating Activities   ($ in millions)   2021     2020     2023     2022   Net cash provided by operating activities   $ 213.3     $ 331.6     $ 378.4     $ 256.5     Net income including non-controlling interest was $161.5$145.0 million in 20212023 and $123.8$180.4 million in 2020.2022. Depreciation and amortization expense totaled $143.2$159.8 million in 20212023 compared to $138.8$147.0 million in 2020. Depreciation2022. The higher depreciation and amortization expense in 2021 and 2020 reflect2023 is related to the assets acquired in our business acquisitions.   Changes in net working capital (trade receivables, inventory and trade payables) accounted for a source of cash of $83.5 million compared to a use of cash of $83.9 million and a source of cash of $24.0$103.2 million in 20212023 and 2020,2022, respectively. Following is an assessment of each of the net working capital components:     ● Trade Receivables, net – Changes in trade receivables resulted in a $124.8$68.7 million source of cash in 2023 compared to a $24.8 million use of cash in 20212022. The source of cash in 2023 compared to a $14.8 million use of cash in 2020. The higher use of cash in 2021 compared to 20202022 was related to higher net revenuecollections in the current year compared to the prior year. The DSO was 58 days at December 2, 2023 and 62 days at November 27, 2021 and 60 days at November 28, 2020.December 3, 2022.     ● Inventory – Changes in inventory resulted in a $135.4$72.6 million source of cash in 2023 compared to a $55.8 million use of cash in 2021 compared to a $15.7 million2022. The source of cash in 2020. The2023, compared to the use of cash in 20212022 is due to lower inventory purchases at lower prices in 2023 compared to the source of cash in  2020 was due to increasing inventory levels and higher raw materials costs in 2021 compared to 2020.prior year. Inventory days on hand were 6567 days at the end of 20212023 compared to 5571 days at the end of 2020.2022.     ● Trade Payables – Changes in trade payables resulted in a $176.3$57.8 million and $23.1$22.6 million sourceuse of cash in 2021and 2020,2023 and 2022, respectively. The increasehigher use of cash in 2023 compared to 2022 reflects higher payments on trade payables in the source of cash was primarily relatedcurrent year compared to the timingprior year. The DPO was 64 days at both the end of payments2023 and extension of payment terms globally.2022.   Contributions to our pension and other postretirement benefit plans were $3.8$4.3 million and $5.5$3.0 million in 20212023 and 2020,2022, respectively. Income taxes payable resulted in a $4.1$41.2 million source of cash and a $12.9 million use of cash in 2023 and 2022, respectively. Other assets resulted in a $7.9 million use of cash and a $5.5$46.5 million source of cash in 20212023 and 2020, respectively. Other assets resulted in a $79.1 million use of cash and a $38.4 million source of cash in 2021 and 2020,2022, respectively. The use of cash in 20212023 compared to a source of cash in 2022 is primarily driven by an increasea smaller decrease in pension and post-retirement assets related to the year-end pension valuation compared to the prior year and an increase in derivative assets.assets in 2023 compared to a decrease in 2022. Accrued compensation was a $27.7$13.8 million sourceuse of cash compared toand a $2.6$1.1 million source of cash in 20212023 and 2020, respectively,2022, respectively, relating to higherlower accruals for our employee incentive plans.plans in 2023. Other operating activity wasliabilities resulted in a $108.6$22.9 million and $4.1 million source of cash in 20212023 and 2022, respectively. The higher source of cash in 2023 compared to 2022 was due to an increase in hedging liabilities from interest rate swap activity in 2023 compared to the prior year. Other operating activity was a $15.7$28.0 million use of cash and a $6.2 million source of cash in 2020.2023 and 2022, respectively. Other operating activity in 2021 includesincludes equity adjustments of approximately $55.0 million related to year-end pension valuations.valuations and valuation adjustments for our derivatives.   Cash Flows Used In Investing Activities   ($ in millions)   2021     2020     2023     2022   Net cash used in investing activities   $ (94.7 )   $ (109.5 )   $ (319.2 )   $ (375.3 )   Purchases of property, plant and equipment were $96.1$119.1 million in 20212023 compared to $87.3$130.0 million in 2020.2022. The higherlower purchases in 20212023 reflect the timing of capital projects and expenditures related to growth initiatives. Proceeds from the sale of property, plant and equipment were $3.0$5.0 million in 20212023 compared to $1.5$1.6 million in 2020. 2022. We paid cash, net of cash acquired, of $205.1 million and $250.8 million for purchased businesses in 2023 and 2022, respectively.   In 2021, we acquired STR Holdings, Inc. for $5.4 million. In 2020, we acquired D.H.M Adhesives, Inc. for $9.5 million and also purchased other business assets for $5.6 million. See Note 2 to the Consolidated Financial Statements for further information on acquisitions. In 2021, we received payment 35 Table of a government grant related to the building of a plant in China of $5.8 million and in 2021 and 2020, we expended cash related to the building of this plant of $1.8 million and $8.6 million, respectively. Contents   Cash Flows Used InFrom Financing Activities   ($ in millions)   2021     2020     2023     2022   Net cash used in financing activities   $ (154.1 )   $ (239.2 ) Net cash provided by financing activities   $ 35.1     $ 160.3     In 20212023, we received $2,233.3 million in proceeds and 2020, we repaid $156.5 million and $518.0$2,126.5 million of long-term debt respectively,including borrowings and repayments on our revolving credit facility and in 2020,2022, we issued $300.0received $335.0 million in proceeds and repaid $159.5 million of unsecured public notes.long-term debt. See Note 7 to the Consolidated Financial Statements for further discussion of debt borrowings and repayments. Debt issuance costs of $10.2 million were paid in 2023 compared to $0.6 million paid in 2022. Cash paid for dividends were $34.9$43.4 million and $33.5$39.2 million in 20212023 and 2020,2022, respectively. Cash generated from the exercise of stock options was $32.3$14.6 million and $12.3$30.1 million in 20212023 and 2020,2022, respectively. RepurchasesIndirect repurchases of common stock through a net-settlement feature related to statutory minimum tax withholding upon vesting of restricted stock were $2.7$2.6 million in 20212023 compared to $3.4$4.0 million in 2020.2022. There were no repurchases from our share repurchase program in 20212023 and 2020.2022. We are subject to mandatory prepayments in the first quarter of each fiscal year equal to 50% of Excess Cash Flow, as defined in the Term Loan B Credit Agreement, of the prior fiscal year less any voluntary prepayments made during that fiscal year. The Excess Cash Flow Percentage shall be reduced to 25% when our Secured Leverage Ratio is below 4.25:1.00 and to 0% when our Secured Leverage Ratio is below 3.75:1.00. The prepayment for the 2021 measurement period was satisfied through amounts prepaid during 2021. We have estimated the 2022 prepayment expect 2024 capital expenditures to be zero. We expect 2022 capital expenditures to be between $100.0 million and $110.0approximately $140.0 million. 22 Table of Contents Forward-Looking Statements and Risk Factors   The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of words like "plan," "expect," "aim," "believe," "project," "anticipate," "intend," "estimate," "will," "should," "could" (including the negative or variations thereof) and other expressions that indicate future events and trends. These plans and expectations are based upon certain underlying assumptions, including those mentioned with the specific statements. Such assumptions are in turn based upon internal estimates and analyses of current market conditions and trends, our plans and strategies, economic conditions and other factors. These plans and expectations and the assumptions underlying them are necessarily subject to risks and uncertainties inherent in projecting future conditions and results. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions and expectations proves to be inaccurate or is unrealized. In addition to the factors described in this report, Item 1A. Risk Factors identifies some of the important factors that could cause our actual results to differ materially from those in any such forward-looking statements. In order to comply with the terms of the safe harbor, we have identified these important factors which could affect our financial performance and could cause our actual results for future periods to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. These factors should be considered, together with any similar risk factors or other cautionary language that may be made elsewhere in this Annual Report on Form 10-K.   The list of important factors in Item 1A. Risk Factors does not necessarily present the risk factors in order of importance. This disclosure, including that under Forward-Looking Statements and Risk Factors, and other forward-looking statements and related disclosures made by us in this report and elsewhere from time to time, represents our best judgment as of the date the information is given. We do not undertake responsibility for updating any of such information, whether as a result of new information, future events, or otherwise, except as required by law. Investors are advised, however, to consult any further public company disclosures (such as in filings with the SEC or in our press releases) on related subjects.   Item 7A. Quantitative and Qualitative Disclosures about Market Risk   Market Risk   We are exposed to various market risks, including changes in interest rates, foreign currency rates and prices of raw materials. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates.   36 Table of Contents Our financial performance may be negatively affected by unfavorable economic conditions. Recessionary economic conditions may have an adverse impact on our sales volumes, pricing levels and profitability. As domestic and international economic conditions change, trends in discretionary consumer spending also become unpredictable and subject to reductions due to uncertainties about the future. A general reduction in consumer discretionary spending due to a recession in the domestic and international economies, or uncertainties regarding future economic prospects, could have a material adverse effect on our results of operations.   Interest Rate Risk   Exposure to changes in interest rates results primarily from borrowing activities used to fund operations. Committed floating rate credit facilities are used to fund a portion of operations. We believe that probable near-term changes in interest rates would not materially affect financial condition, results of operations or cash flows. The annual impact on interest expense of a one-percentage point interest rate change on the outstanding balance of our variable rate debt, net of interest rate swap derivatives as of November 27, 2021,December 2, 2023, would have resulted in a change in net income of approximately $0.1$5.3 million or $0.0$0.09 per diluted share.   Foreign Exchange Risk   As a result of being a global enterprise, there is exposure to market risks from changes in foreign currency exchange rates. Our operating results, and financial condition and net investment in foreign subsidiaries are subject to both currency translation and currency transaction risk. Approximately 5756 percent of net revenue was generated outside of the United States in 2021.2023. Principal foreign currency exposures relate to the Euro, Chinese renminbi, British pound sterling, Egyptian pound, Turkish lira, Brazilian real, Canadian dollar, Chinese renminbi, Japanese yen, Australian dollar Argentine peso, Brazilian real, Colombian peso,and Mexican peso Turkish lira, Egyptian pound, Indian rupee, Indonesian rupiah and Malaysian ringgit..   We enter into cross border transactions through importing and exporting goods to and from different countries and locations. These transactions generate foreign exchange risk as they create assets, liabilities and cash flows in currencies other than their functional currency. This also applies to services provided and other cross border agreements among subsidiaries. Our objective is to balance, where possible, non-functional currency denominated assets to non-functional currency denominated liabilities to have a natural hedge and minimize foreign exchange impacts.   In the event a natural hedge is not available, we take steps to minimize risks from foreign currency exchange rate fluctuations through normal operating and financing activities and, when deemed appropriate, through the use of derivative instruments. We do not enter into any speculative positions with regard to derivative instruments.   Based on 20212023 financial results, a hypothetical one percent change in our cost of sales due to foreign currency rate changes would have resulted in a change in net income attributable to H.B. Fuller of approximately $9.4 million or $0.17 per diluted share. Based on 20212023 financial results and foreign currency balance sheet positions as of November 27, 2021,December 2, 2023, a hypothetical overall 10 percent change in the U.S. dollar would have resulted in a change in net income of approximately $15.8$16.7 million or $0.29$0.30 per diluted share. 23 Table of Contents   Raw Materials   The principal raw materials used to manufacture products include resins, polymers, synthetic rubbers, vinyl acetate monomer and plasticizers. We generally avoid sole source supplier arrangements for raw materials. While alternate supplies of most key raw materials are available, unplanned supplier production outages may lead to strained supply-demand situations for several key raw materials such as ethylene and propylene, several polymers and other petroleum derivatives such as waxes.   The purchase of raw materials is our largest expenditure. Our objective is to purchase raw materials that meet both our quality standards and production needs at the lowest total cost. Most raw materials are purchased on the open market or under contracts that limit the frequency but not the magnitude of price increases. In some cases, however, the risk of raw material price changes is managed by strategic sourcing agreements which limit price increases to increases in supplier feedstock costs, while requiring decreases as feedstock costs decline. The leverage of having substitute raw materials approved for use wherever possible is used to minimize the impact of possible price increases. Based on 20212023 financial results, a hypothetical one percent change in our raw material costs would have resulted in a change in net income of approximately $13.2$13.3 million or $0.24 per diluted share.   See Item 1A. Risk Factors for a discussion 37 Table of the effects of the COVID-19 pandemic on raw material cost and availability. Contents   Recently Issued Accounting Pronouncements   See Note 1 to the Consolidated Financial Statements for information concerning new accounting standards and the impact of the implementation of these standards on our financial statements. 24 Table of Contents Item 8. Financial Statements and Supplementary Data   Report of Independent Registered Public Accounting Firm   To the Stockholders and the Board of Directors of H.B. Fuller Company   Opinion on the Financial Statements   We have audited the accompanying consolidated balance sheets of H.B. Fuller Company and subsidiaries (the Company) as of November 27, 2021December 2, 2023 and November 28, 2020,December 3, 2022, the related consolidated statements of income, comprehensive income, total equity and cash flows for each of the twothree years in the period ended November 27, 2021 and November 28, 2020,December 2, 2023, and the related notes (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 27, 2021December 2, 2023 and November 28, 2020,December 3, 2022, and the results of its operations and its cash flows for each of the twothree years in the period ended November 27, 2021 and November 28, 2020,December 2, 2023, 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 27, 2021,December 2, 2023, 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 25, 202224, 2024, expressed an unqualified opinion thereon.   Basis for Opinion   These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit.audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our auditaudits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our auditaudits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our auditaudits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.   Critical Audit Matter   The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.   38 Table of Contents Valuation of Goodwill for the Construction Adhesives reporting unit Description of the Matter At November 27, 2021,December 2, 2023, the Company had goodwill of approximately $311$432.8 million related to the Construction AdhesiveAdhesives reporting unit. As discussed in Notes 1 and 5 ofthe notes to the consolidated financial statements, the Company performs goodwill impairment testing on an annual basis as of the beginning of the fourth quarter, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.   Auditing management’s goodwill impairment test for the Construction Adhesives reporting unit was complex and judgmental due to the significant estimation required in determining the fair value of the reporting unit. In particular, the Company estimates fair value using the income approach which is sensitive to certain assumptions, such as forecasted revenue and related revenue growth rate, the earnings before interest, taxes, depreciation and amortization (EBITDA) margins rate, and the weighted average cost of capital and the tax rate which are affected by management’s business plans and expectations about future market or economic conditions.   How We Addressed the Matter in Our Audit   We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's goodwill impairment review process, including controls over management’s review of the significant assumptions described above.   To test the estimated fair value of the Construction Adhesive reporting unit, we performed audit procedures that included, among others, assessing the valuation methodology used by management and testing the significant assumptions discussed above, as well as the underlying data used by the Company in its analysis. For example, we compared the significant assumptions used by management in the prospective financial information to current industry, market and economic trends as well as other relevant factors. We assessed the reasonableness of the forecasted future revenue growth rate and EBITDA margins rate by comparing the forecasts to historical results. We involved our valuation specialists to assist in our evaluation of the valuation models, methodologies and significant assumptions used by the Company, specifically the weighted average cost of capital. We compared the projected tax rates with current enacted rates and assessed the reasonableness of the forecasted profits and losses by jurisdiction by comparing to historical results.   /s/ Ernst & Young LLP   We have served as the Company’s auditor since 2019.   Minneapolis, Minnesota January 25, 202224, 2024   2539 Table of Contents   Report of Independent Registered Public Accounting Firm   To the Stockholders and the Board of Directors of H.B. Fuller Company   Opinion on Internal Control Over Financial Reporting   We have audited H.B. Fuller Company and subsidiaries’ internal control over financial reporting as of November 27, 2021,December 2, 2023, 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, H.B. Fuller Company and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of November 27, 2021,December 3, 2023, 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 27, 2021December 2, 2023 and November 28, 2020,December 3, 2022, the related consolidated statements of income, comprehensive income, total equity and cash flows for each of the twothree years in the period ended November 27, 2021 and November 28, 2020,December 2, 2023, and the related notes, and our report dated January 25, 202224, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.   Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.   /s/ Ernst & Young LLP   Minneapolis, Minnesota January 25, 202224, 2024   2640 Table of Contents   Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors H.B. Fuller Company Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of income, comprehensive income, total equity, and cash flows of H.B. Fuller Company and subsidiaries (the Company), for the fiscal year ended November 30, 2019, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations of the Company and its cash flows for the fiscal year ended November 30, 2019, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.  We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ KPMG LLP We served as the Company’s auditor from 2003 to 2020. Minneapolis, Minnesota January 24, 2020, except for Note 15, as to which the date is June 29, 2021 27 Table of Contents   CONSOLIDATED STATEMENTS OF INCOME H.B. Fuller Company and Subsidiaries (In thousands, except per share amounts)     Fiscal Years     Fiscal Years     November 27,   November 28,   November 30,     December 2,   December 3,   November 27,     2021     2020     2019     2023     2022     2021   Net revenue   $ 3,278,031     $ 2,790,269     $ 2,897,000     $ 3,510,934     $ 3,749,183     $ 3,278,031   Cost of sales     (2,432,709 )     (2,033,620 )     (2,090,078 )     (2,502,037 )     (2,785,484 )     (2,432,709 ) Gross profit   845,322     756,649     806,922     1,008,897     963,699     845,322   Selling, general and administrative expenses   (592,710 )   (538,332 )   (580,928 )   (653,760 )   (640,981 )   (592,710 ) Other income, net   32,855     15,398     37,943     9,682     12,952     32,855   Interest expense   (78,092 )   (86,776 )   (103,287 )   (134,602 )   (91,521 )   (78,092 ) Interest income     9,476       11,417       12,178       3,943       7,779       9,476   Income before income taxes and income from equity method investments   216,851     158,356     172,828     234,160     251,928     216,851   Income tax expense   (63,033 )   (41,921 )   (49,408 )   (93,529 )   (77,186 )   (63,033 ) Income from equity method investments     7,657       7,353       7,424       4,357       5,665       7,657   Net income including non-controlling interest   161,475     123,788     130,844     144,988     180,407     161,475   Net income attributable to non-controlling interest     (82 )     (69 )     (27 )     (82 )     (94 )     (82 ) Net income attributable to H.B. Fuller   $ 161,393     $ 123,719     $ 130,817     $ 144,906     $ 180,313     $ 161,393       Earnings per share attributable to H.B. Fuller common stockholders:                         Basic   $ 3.05     $ 2.38     $ 2.57     $ 2.67     $ 3.37     $ 3.05   Diluted   $ 2.97     $ 2.36     $ 2.52     $ 2.59     $ 3.26     $ 2.97       Weighted-average common shares outstanding:                         Basic   52,887     52,039     50,920     54,332     53,580     52,887   Diluted   54,315     52,520     51,983     55,958     55,269     54,315       Dividends declared per common share   $ 0.665     $ 0.648     $ 0.635     $ 0.805     $ 0.738     $ 0.665     See accompanying Notes to Consolidated Financial Statements.   2841 Table of Contents     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME H.B. Fuller Company and Subsidiaries (In thousands)     Fiscal Years     Fiscal Years     November 27,   November 28,   November 30,     December 2,   December 3,   November 27,     2021     2020     2019     2023     2022     2021   Net income including non-controlling interest   $ 161,475     $ 123,788     $ 130,844     $ 144,988     $ 180,407     $ 161,475   Other comprehensive income (loss)     Foreign currency translation   (26,294 )   41,742     (20,395 )   17,322     (131,806 )   (26,294 ) Defined benefit pension plans adjustment, net of tax   48,181     4,588     (21,828 )   792     (15,063 )   48,181   Interest rate swaps, net of tax   15,179     (11,765 )   (35,031 )   4,472     9,924     15,179   Cash-flow hedges, net of tax     (4,486 )     6,206       13,820     -     (3,483 )   (4,486 ) Net investment hedges, net of tax     (14,107 )     (40,743 )     -   Other comprehensive income (loss)     32,580       40,771       (63,434 )     8,479       (181,171 )     32,580   Comprehensive income   194,055     164,559     67,410   Comprehensive income (loss)   153,467     (764 )   194,055   Less: Comprehensive income attributable to non-controlling interest     50       99       41       84       33       50   Comprehensive income attributable to H.B. Fuller   $ 194,005     $ 164,460     $ 67,369   Comprehensive income (loss) attributable to H.B. Fuller   $ 153,383     $ (797 )   $ 194,005     See accompanying Notes to Consolidated Financial Statements.   2942 Table of Contents     CONSOLIDATED BALANCE SHEETS H.B. Fuller Company and Subsidiaries (In thousands, except share and per share amounts)     November 27,   November 28,     December 2,   December 3,     2021     2020     2023     2022   Assets                 Current assets:                 Cash and cash equivalents   $ 61,786     $ 100,534     $ 179,453     $ 79,910   Trade receivables, net   614,645     514,916     577,932     607,365   Inventories   448,404     323,213     442,040     491,781   Other current assets     96,335       81,113       112,678       120,319   Total current assets     1,221,170       1,019,776       1,312,103       1,299,375       Property, plant and equipment, net   695,367     670,744     824,655     733,667   Goodwill   1,298,845     1,312,003     1,486,512     1,392,627   Other intangibles, net   687,075     755,968     729,140     702,092   Other assets     372,073       278,213       371,165       335,868   Total assets   $ 4,274,530     $ 4,036,704     $ 4,723,575     $ 4,463,629       Liabilities, non-controlling interest and total equity                 Current liabilities:                 Notes payable   $ 24,983     $ 16,925     $ 1,841     $ 28,860   Current maturities of long-term debt   -     -   Trade payables   500,321     316,460     439,700     460,669   Accrued compensation   109,542     83,598     95,680     108,328   Income taxes payable   15,943     29,173     47,688     18,530   Other accrued expenses     86,061       83,976       107,902       89,345   Total current liabilities     736,850       530,132       692,811       705,732       Long-term debt, net of current maturities   1,591,479     1,756,985     1,836,590     1,736,256   Accrued pension liabilities   71,651     88,806     50,189     52,561   Other liabilities     277,190       278,919       388,072       358,286   Total liabilities     2,677,170       2,654,842       2,967,662       2,852,835       Commitments and contingencies (Note 14)                             Equity:                 H.B. Fuller stockholders' equity:     Preferred stock (no shares outstanding) Shares authorized – 10,045,900   0     0     -     -   Common stock, par value $1.00 per share, Shares authorized – 160,000,000, Shares outstanding – 52,777,753 and 51,906,663 for 2021 and 2020, respectively   52,778     51,907   Common stock, par value $1.00 per share, Shares authorized – 160,000,000, Shares outstanding – 54,092,987 and 53,676,576 for 2023 and 2022, respectively   54,093     53,677   Additional paid-in capital   213,637     157,867     301,485     266,491   Retained earnings   1,600,601     1,474,406     1,842,507     1,741,359   Accumulated other comprehensive loss     (270,247 )     (302,859 )     (442,880 )     (451,357 ) Total H.B. Fuller stockholders' equity     1,596,769       1,381,321       1,755,205       1,610,170   Non-controlling interest     591       541       708       624   Total equity     1,597,360       1,381,862       1,755,913       1,610,794   Total liabilities, non-controlling interest and total equity   $ 4,274,530     $ 4,036,704     $ 4,723,575     $ 4,463,629     See accompanying Notes to Consolidated Financial Statements.   3043 Table of Contents     CONSOLIDATED STATEMENTS OF TOTAL EQUITY H.B. Fuller Company and Subsidiaries (In thousands)     H.B. Fuller Company Shareholders                 H.B. Fuller Company Shareholders                                   Accumulated                                 Accumulated                     Additional         Other   Non-               Additional         Other   Non-         Common   Paid-in   Retained   Comprehensive   Controlling         Common   Paid-in   Retained   Comprehensive   Controlling         Stock     Capital     Earnings     Income (Loss)     Interest     Total     Stock     Capital     Earnings     Income (Loss)     Interest     Total   Balance at December 1, 2018, as previously reported   $ 50,733   $ 95,940   $ 1,285,246   $ (280,152 )   $ 401   $ 1,152,168   Change in accounting principles     0     0     1,043     0     0     1,043   Balance at December 1, 2018, as adjusted   $ 50,733     $ 95,940     $ 1,286,289     $ (280,152 )   $ 401     $ 1,153,211   Comprehensive income (loss)   0     0     130,817     (63,448 )   41     67,410   Dividends   0     0     (32,695 )   0     0     (32,695 ) Stock option exercises   373     10,506     0     0     0     10,879   Share-based compensation plans other, net   200     26,810     0     0     0     27,010   Repurchases of common stock     (65 )     (2,961 )     0       0       0       (3,026 ) Balance at November 30, 2019   $ 51,241     $ 130,295     $ 1,384,411     $ (343,600 )   $ 442     $ 1,222,789   Comprehensive income (loss)   0     0     123,719     40,741     99     164,559   Dividends   0     0     (33,724 )   0     0     (33,724 ) Stock option exercises   397     11,924     0     0     0     12,321   Share-based compensation plans other, net   341     19,008     0     0     0     19,349   Repurchases of common stock     (72 )     (3,360 )     0       0       0       (3,432 ) Balance at November 28, 2020   $ 51,907     $ 157,867     $ 1,474,406     $ (302,859 )   $ 541     $ 1,381,862     $ 51,907     $ 157,867     $ 1,474,406     $ (302,859 )   $ 541     $ 1,381,862   Comprehensive income   0     0     161,393     32,612     50     194,055       -     -     161,393     32,612     50     194,055   Dividends   0     0     (35,198 )   0     0     (35,198 )   -     -     (35,198 )   -     -     (35,198 ) Stock option exercises   741     31,584     0     0     0     32,325     741     31,584     -     -     -     32,325   Share-based compensation plans other, net   181     26,817     0     0     0     26,998     181     26,817     -     -     -     26,998   Repurchases of common stock     (51 )     (2,631 )     0       0       0       (2,682 )     (51 )     (2,631 )     -       -       -       (2,682 ) Balance at November 27, 2021   $ 52,778     $ 213,637     $ 1,600,601     $ (270,247 )   $ 591     $ 1,597,360     $ 52,778     $ 213,637     $ 1,600,601     $ (270,247 )   $ 591     $ 1,597,360   Comprehensive income (loss)     -       -       180,313       (181,110 )     33       (764 ) Dividends   -     -     (39,555 )   -     -     (39,555 ) Stock option exercises   658     29,464     -     -     -     30,122   Share-based compensation plans other, net   296     27,284     -     -     -     27,580   Repurchases of common stock     (55 )     (3,894 )     -       -       -       (3,949 ) Balance at December 3, 2022   $ 53,677     $ 266,491     $ 1,741,359     $ (451,357 )   $ 624     $ 1,610,794   Comprehensive income   -     -     144,906     8,477     84     153,467   Dividends   -     -     (43,758 )   -     -     (43,758 ) Stock option exercises   314     14,304     -     -     -     14,618   Share-based compensation plans other, net     140       23,219       -       -       -       23,359   Repurchases of common stock     (38 )     (2,529 )     -       -       -       (2,567 ) Balance at December 2, 2023   $ 54,093     $ 301,485     $ 1,842,507     $ (442,880 )   $ 708     $ 1,755,913     3144 Table of Contents     CONSOLIDATED STATEMENTS of CASH FLOWS H.B. Fuller Company and Subsidiaries (In thousands)     Fiscal Years     Fiscal Years     November 27,   November 28,   November 30,     December 2,   December 3,   November 27,     2021     2020     2019     2023     2022     2021   Cash flows from operating activities:                         Net income including non-controlling interest   $ 161,475     $ 123,788     $ 130,844     $ 144,988     $ 180,407     $ 161,475   Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:     Depreciation   72,106     68,226     67,115     80,327     72,593     72,106   Amortization   71,068     70,591     74,091     79,514     74,383     71,068   Deferred income taxes   16,192     (24,730 )   (29,028 )   (25,114 )   (15,230 )   16,192   Income from equity method investments, net of dividends received   2,776     375     (39 )   1,259     (9 )   2,776   Loss (gain) on sale of assets   648     86     (24,104 )   59     (1,195 )   648   Share-based compensation   22,366     16,914     24,003     19,911     24,368     22,366   Pension and other postretirement benefit plan contributions   (3,840 )   (5,479 )   (8,063 )   (4,346 )   (3,009 )   (3,840 ) Pension and other postretirement benefit plan income   (28,662 )   (14,763 )   (11,300 )   (18,591 )   (24,021 )   (28,662 ) Mark to market adjustment related to contingent consideration liabilities   2,300     800     0   Debt issuance cost write-off   2,689     -     -   Loss on fair value adjustment on contingent consideration liabilities   2,893     -     2,300   Change in assets and liabilities, net of effects of acquisitions:     Trade receivables, net   (124,849 )   (14,842 )   (25,632 )   68,721     (24,753 )   (124,849 ) Inventories   (135,351 )   15,708     19,584     72,576     (55,772 )   (135,351 ) Other assets   (79,097 )   38,412     (18,316 )   (7,927 )   46,499     (79,097 ) Trade payables   176,337     23,130     11,553     (57,752 )   (22,629 )   176,337   Accrued compensation   27,741     2,588     1,342     (13,836 )   1,135     27,741   Other accrued expenses   1,186     16,361     (1,882 )   (3,070 )   6,303     1,186   Income taxes payable   (4,137 )   5,511     21,043     41,190     (12,873 )   (4,137 ) Other liabilities   (73,508 )   24,566     448     22,918     4,104     (73,508 ) Other     108,566       (15,683 )     37,518       (28,011 )     6,213       108,566   Net cash provided by operating activities   213,317     331,559     269,177     378,398     256,514     213,317   Cash flows from investing activities:                         Purchased property, plant and equipment   (96,089 )   (87,288 )   (61,982 )   (119,137 )   (129,964 )   (96,089 ) Purchased businesses, net of cash acquired   (5,445 )   (9,500 )   (8,292 )   (205,093 )   (250,807 )   (5,445 ) Purchased business assets   0     (5,623 )   0   Purchased business remaining equity   0     0     (9,870 ) Proceeds from sale of property, plant and equipment   2,896     1,506     11,133     5,029     1,556     2,896   Proceeds from sale of business   0     0     70,293   Cash received from government grant   5,800     0     8,881     -     3,928     5,800   Cash outflow related to government grant     (1,822 )     (8,555 )     (2,758 )     -       -       (1,822 ) Net cash (used in) provided by investing activities   (94,660 )   (109,460 )   7,405   Net cash used in investing activities   (319,201 )   (375,287 )   (94,660 ) Cash flows from financing activities:                         Proceeds from issuance of long-term debt   0     300,000     0     2,233,300     335,000     -   Repayment of long-term debt   (156,500 )   (518,000 )   (288,600 )   (2,126,450 )   (159,500 )   (156,500 ) Net proceeds from notes payable   9,346     4,128     1,662   Payment of debt issue costs   (10,214 )   (600 )   -   Net (payment on) proceeds from notes payable   (28,674 )   3,455     9,346   Dividends paid   (34,859 )   (33,461 )   (32,357 )   (43,395 )   (39,207 )   (34,859 ) Contingent consideration payment   (1,700 )   (767 )   (3,610 )   (1,477 )   (5,000 )   (1,700 ) Proceeds from stock options exercised   32,325     12,321     10,885     14,619     30,122     32,325   Repurchases of common stock     (2,682 )     (3,432 )     (3,026 )     (2,567 )     (3,950 )     (2,682 ) Net cash used in financing activities   (154,070 )   (239,211 )   (315,046 ) Net cash provided by (used in) financing activities   35,142     160,320     (154,070 ) Effect of exchange rate changes on cash and cash equivalents     (3,335 )     5,455       (138 )     5,204       (23,423 )     (3,335 ) Net change in cash and cash equivalents   (38,748 )   (11,657 )   (38,602 )   99,543     18,124     (38,748 ) Cash and cash equivalents at beginning of year     100,534       112,191       150,793       79,910       61,786       100,534   Cash and cash equivalents at end of year   $ 61,786     $ 100,534     $ 112,191     $ 179,453     $ 79,910     $ 61,786       Supplemental disclosure of cash flow information:     Dividends paid with company stock   $ 339     $ 263     $ 338     $ 363     $ 348     $ 339   Cash paid for interest, net of amount capitalized of $905, $565, and $416 for the years ended November 27, 2021, November 28, 2020 and November 30, 2019, respectively   $ 62,753     $ 69,452     $ 107,088   Cash paid for interest, net of amount capitalized of $1,769, $1,518, and $905 for the years ended December 2, 2023, December 3, 2022 and November 27, 2021, respectively   $ 136,959     $ 83,527     $ 62,753   Cash paid for income taxes, net of refunds   $ 72,955     $ 49,986     $ 37,232     $ 71,261     $ 73,449     $ 72,955     See accompanying Notes to Consolidated Financial Statements.   3245 Table of Contents   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS H.B. Fuller Company and Subsidiaries (In thousands, except share and per share amounts)     Note 1: Nature of Business and Summary of Significant Accounting Policies   Nature of Business   H.B. Fuller Company and our subsidiaries formulate, manufacture and market specialty adhesives, sealants, coatings, polymers, tapes, encapsulants, additives and other specialty chemical products globally, with sales operations in 35 countries in North America, Europe, Latin America, the Asia Pacific, region, India, the Middle East and Africa.   We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. In 20212023, as a percentage of total net revenue by operating segment, Hygiene, Health and Consumable Adhesives accounted for 4546 percent, Engineering Adhesives 4241 percent and Construction Adhesives 13 percent.   Our Hygiene, Health and Consumable Adhesives operating segment produces and supplies a full range of specialty industrial adhesives such as thermoplastic, thermoset, reactive, water-based and solvent-based products for applications in various markets, including packaging (food and beverage containers, flexible packaging, consumer goods, package integrity and re-enforcement, and non-durable goods), converting (corrugation, folding carton, tape and label, paper converting, envelopes, books, multi-wall bags, sacks, and tissue and towel), nonwoven and hygiene (disposable diapers, feminine care and medical garments) and health and beauty.   Our Engineering Adhesives operating segment produces and supplies high performance industrial adhesives such as reactive, light cure, two-part liquids, polyurethane, silicone, film and fast cure products to the durable assembly (appliances and filters), performance wood (windows, doors and wood flooring) and textile (footwear and sportswear), transportation, electronics, medical, clean energy, aerospace and defense, appliance, heavy machinery and insulating glass markets.   Our Construction Adhesives operating segment includes products used for tile setting (adhesives, grouts, mortars, sealers and levelers), the commercial roofing industry (pressure-sensitive adhesives, tapes and sealants) and heating, ventilation and air conditioning and insulation applications (duct sealants, weather barriers and fungicidal coatings and block fillers). This operating segment also includes caulks and sealants for the consumer market and professional trade, sold through retailers, primarily in Australia.   Principles of Consolidation   The Consolidated Financial Statements include the accounts of H.B. Fuller Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated. Investments in affiliated companies in which we exercise significant influence, but which we do not control, are accounted for in the Consolidated Financial Statements under the equity method of accounting. As such, consolidated net income includes our equity portion in current earnings of such companies, after elimination of intercompany profits. Investments in which we do not exercise significant influence (generally less than a 20 percent ownership interest) are accounted for using the measurement alternative.   Our 50 percent ownership in Sekisui-Fuller Company, Ltd., our Japan joint venture, is accounted for under the equity method of accounting as we do not exercise control over the investee. In fiscal years 2021,2023, 20202022 and 20192021, this equity method investment was not significant as defined in Regulation S-X under the Securities Exchange Act of 1934. As such, financial information as of November 27, 2021,December 2, 2023, November 28, 2020,December 3, 2022, and November 30, 201927, 2021 for Sekisui-Fuller Company, Ltd. is not required.   Our fiscal year ends on the Saturday closest to November 30. Fiscal year-end dates were November 27, 2021,December 2, 2023, November 28, 2020,December 3, 2022, and November 30, 201927, 2021 for 2021,2023, 20202022 and 20192021, respectively. Every five or six years we have a 53rd week in our fiscal year. 2022 was a 53-week year.   46 Table of Contents Use of Estimates   Preparation of the Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.   Revenue Recognition   We sell a variety of adhesives, sealants and other specialty chemical products to a diverse customer base. The vast majority of our arrangements contain a single performance obligation to transfer manufactured goods to the customer as governed by an individual purchase order.   We recognize revenue at the amount of consideration to which we expect to be entitled in exchange for transferring the promised goods to the customer. The transaction price includes an estimation of any variable amounts of consideration to which we will be entitled. The most common forms of variable consideration within our arrangements are customer rebates, which are recorded as a reduction to revenue at the time of the initial sale using the expected value method. The expected value method is the sum of probability-weighted amounts in a range of possible consideration amounts and is based on a consideration of historical, current and forecast information. Changes in estimates are updated each reporting period. There are no material instances where variable consideration is constrained and not recorded at the initial time of sale. Product returns are recorded as a reduction to revenue based on historical experience and anticipated sales returns that occur in the normal course of business. We primarily have assurance-type warranties that do not result in separate performance obligations. We have elected to present revenue net of sales and other similar taxes.   We recognize revenue when control of goods is transferred to the customer. For the vast majority of our arrangements, control transfers at a point in time either upon shipment or upon delivery of the goods to the customer. The timing of transfer of control is determined considering the timing of the transfer of legal title, physical possession, and risks and rewards of goods to the customer.   33 Table of Contents We record shipping and handling revenue in net revenue and outbound shipping and handling costs in cost of goods sold. The majority of our shipping and handling activities are performed prior to transfer of control of the goods to the customer. For those arrangements where we provide shipping and handling services after control of the goods has transferred to the customer, we have elected the practical expedient allowed under Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 606 to account for these activities as a fulfillment cost rather than as a separate performance obligation.   Provisions for sales returns are estimated based on historical experience and are adjusted for known returns, if material. Customer incentive programs (primarily volume purchase rebates) and arrangements such as cooperative advertising, slotting fees and buy-downs are recorded as a reduction of net revenue in accordance with ASC 606. Customer incentives recorded in the Consolidated Statements of Income as a reduction of net revenue were $33,441, $34,860$35,896, $50,146 and $22,795$33,441 in 2021,2023, 20202022 and 20192021, respectively.   For certain products, consigned inventory is maintained at customer locations. For this inventory, revenue is recognized in the period that the inventory is consumed. Sales to distributors require a distribution agreement or purchase order. As a normal practice, distributors do not have a right of return.   Cost of Sales   Cost of sales includes raw materials, container costs, direct labor, manufacturing overhead, freight costs and other less significant indirect costs related to the production of our products.   Selling, General and Administrative Expenses   Selling, general and administrative (“SG&A”) expenses include sales and marketing, research and development, technical and customer service, finance, legal, human resources, general management and similar expenses.   47 Table of Contents Income Taxes   The income tax provision is computed based on income before income from equity method investments included in the Consolidated Statement of Income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Enacted statutory tax rates applicable to future years are applied to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances reduce deferred tax assets when it is not more-likely-than-not that a tax benefit will be realized. See Note 11 for further information.   Acquisition Accounting   As we enter into business combinations, we perform acquisition accounting requirements including the following:     ● Identifying the acquirer,   ● Determining the acquisition date,   ● Recognizing and measuring the identifiable assets acquired and the liabilities assumed, and   ● Recognizing and measuring goodwill or a gain from a bargain purchase   We complete valuation procedures and record the resulting fair value of the acquired assets and assumed liabilities based upon the valuation of the business enterprise and the tangible and intangible assets acquired. Enterprise value allocation methodology requires management to make assumptions and apply judgment to estimate the fair value of assets acquired and liabilities assumed. If estimates or assumptions used to complete the enterprise valuation and estimates of the fair value of the acquired assets and assumed liabilities significantly differed from assumptions made, the resulting difference could materially affect the fair value of net assets.   The calculation of the fair value of the tangible assets, including property, plant and equipment, utilizes the cost approach, which computes the cost to replace the asset, less accrued depreciation resulting from physical deterioration, functional obsolescence and external obsolescence. The calculation of the fair value of the identified intangible assets is determined using cash flow models following the income approach or a discounted market-based methodology approach. Significant inputs include estimated revenue growth rates, gross margins, operating expenses and estimated attrition, royalty and discount rates. Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price.   Cash Equivalents   Cash equivalents are highly liquid instruments with an original maturity of three months or less. We review cash and cash equivalent balances on a bank by bank basis to identify book overdrafts. Book overdrafts occur when the amount of outstanding checks exceed the cash deposited at a given bank. Book overdrafts, if any, are included in trade payables in our Consolidated Balance Sheets and in operating activities in our Consolidated Statements of Cash Flows.   Restrictions on Cash   There were 0no restrictions on cash as of November 27, 2021December 2, 2023 or November 28, 2020.December 3, 2022. There are no contractual or regulatory restrictions on the ability of consolidated and unconsolidated subsidiaries to transfer funds to us, except for typical statutory restrictions which prohibit distributions in excess of net capital or similar tests. The majority of our cash in non-U.S. locations is considered indefinitely reinvested.   Trade Receivables and Allowances   Trade receivables are recorded at the invoiced amount and do not bear interest. Allowances are maintained for doubtful accounts, credits related to pricing or quantities shipped and early payment discounts. The allowance for doubtful accounts includes an estimate of future uncollectible receivables based on the aging of the receivable balance and our collection experience. The allowance also includes specific customer accounts when it is probable that the full amount of the receivable will not be collected. Current expectations of future credit losses using market and industry data are considered in the specific customer accounts. See Note 4 for further information.   34 Table of Contents Inventories   Inventories are recorded at cost (not in excess of net realizable value) as determined by the weighted-average cost method and are valued at the lower of cost or net realizable value.   48 Table of Contents Investments   Investments with a value of $9,584$9,334 and $9,006$8,957 represent the cash surrender value of life insurance contracts as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022, respectively. These assets are held to primarily support supplemental pension plans and are recorded in other assets in the Consolidated Balance Sheets. The corresponding gain or loss associated with these contracts is reported in earnings each period as a component of selling, general and administrative expenses.   Equity Investments   Investments in an entity where we own less than 20% of the voting stock of the entity and do not exercise significant influence over operating and financial policies of the entity are accounted for using the measurement alternative at cost less impairment plus or minus observable price changes in orderly transactions. We have a policy in place to review our investments at least annually, to evaluate the accounting method and identify observable price changes that could indicate impairment. If we believe that an impairment exists, it is our policy to calculate the fair value of the investment and recognize as impairment any amount by which the carrying value exceeds the fair value of the investment. We recognized impairment of $303 for the year ended December 3, 2022 and did not have any impairment of our equity investments for the years ended November 27, 2021, December 2, 2023November 28, 2020, and November 30, 201927, 2021. . The book value of the equity investments was $1,667$1,362 as of both November 27, 2021December 2, 2023 and $1,669 as of November 28, 2020December 3, 2022.   Property, Plant and Equipment   Property, plant and equipment are carried at cost and depreciated over the useful lives of the assets using the straight-line method. Estimated useful lives range from 20 to 40 years for buildings and improvements, 3 to 20 years for machinery and equipment, and the shorter of the lease or expected life for leasehold improvements. Fully depreciated assets are retained in property and accumulated depreciation accounts until removed from service. Upon disposal, assets and related accumulated depreciation are removed. Upon sale of an asset, the difference between the proceeds and remaining net book value is charged or credited to other income, net on the Consolidated Statements of Income. Expenditures that add value or extend the life of the respective assets are capitalized, while expenditures that are typical recurring repairs and maintenance are expensed as incurred. Interest costs associated with construction and implementation of property, plant and equipment of $905, $565$1,769, $1,518 and $416$905 were capitalized in 2021,2023, 20202022 and 20192021, respectively.   Goodwill   We evaluate our goodwill for impairment annually at the beginning of the fourth quarter or earlier upon the occurrence of substantive unfavorable changes in economic conditions, industry trends, costs, cash flows or ongoing declines in market capitalization. The quantitative impairment test requires judgment, including the identification of reporting units, the assignment of assets, liabilities and goodwill to reporting units, and the determination of fair value of each reporting unit. The impairment test requires the comparison of the fair value of each reporting unit with its carrying amount, including goodwill. In performing the impairment test, we determined the fair value of our reporting units through the income approach by using discounted cash flow (“DCF”) analyses. Determining fair value requires the company to make judgments about appropriate discount rates, perpetual growth rates and the amount and timing of expected future cash flows. The cash flows employed in the DCF analysis for each reporting unit are based on the reporting unit's budget, long-term business plan and recent operating performance. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting unit and market conditions. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is considered to not be impaired. If the carrying value exceeds estimated fair value, an impairment charge is recorded for any excess of the carrying value over the estimated fair value. Based on the analysis performed for our fiscal 20212023 annual impairment test, there were no indications of impairment for any of our reporting units. See Note 5 for further information.   Intangible Assets   Intangible assets include patents, customer lists, technology, trademarks and other intangible assets acquired from independent parties and are amortized on a straight-line basis with estimated useful lives ranging from 3 to 20 years. The straight-line method of amortization of these assets reflects an appropriate allocation of the costs of the intangible assets to earnings in proportion to the amount of economic benefits obtained in each reporting period.   49 Table of Contents Impairment of Long-Lived Assets   Our long-lived assets are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be measured and recognized when the carrying amount of an asset (asset group) exceeds the estimated undiscounted future cash flows expected to result from the use of the asset (asset group) and its eventual disposition. The impairment loss to be recorded would be the excess of the asset's carrying value over its fair value. Fair value is generally determined using a DCF analysis or other valuation technique. Costs related to internally developed intangible assets are expensed as incurred.   Foreign Currency Translation   Assets and liabilities of non-U.S. functional currency entities are translated to U.S. dollars at period-end exchange rates, and the resulting gains and losses arising from the translation of those net assets are recorded as a cumulative translation adjustment, a component of accumulated other comprehensive income (loss) in stockholders' equity. Revenues and expenses are translated using average exchange rates during the year. Foreign currency transaction gains and losses are included in other income, net in the Consolidated Statements of Income.   We consider a subsidiary’s sales price drivers, currency denomination of sales transactions and inventory purchases to be the primary indicators in determining a foreign subsidiary’s functional currency. Our subsidiaries in certain European countries have a functional currency different than their local currency. All other foreign subsidiaries, which are located in North America, Latin America, Europe, India, the Middle East and theAfrica ("EIMEA") and Asia Pacific, region, have the same local and functional currency.   35 Table of Contents Pension and Other Postretirement Benefits   We sponsor defined-benefit pension plans in both the U.S. and non-U.S. entities. Also in the U.S., we sponsor other postretirement plans for health care and life insurance benefits. Expenses and liabilities for the pension plans and other postretirement plans are actuarially calculated. These calculations are based on our assumptions related to the discount rate, expected return on assets, projected salary increases, health care cost trend rates and mortality rates. The discount rate assumption is determined using an actuarial yield curve approach, which results in a discount rate that reflects the characteristics of the plan. The approach identifies a broad population of corporate bonds that meet the quality and size criteria for the particular plan. We use this approach rather than a specific index that has a certain set of bonds that may or may not be representative of the characteristics of our particular plan. Our expected long-term rate of return on U.S. plan assets was based on our target asset allocation assumption of 6055 percent equities and 4045 percent fixed income. Management, in conjunction with our external financial advisors, determines the expected long-term rate of return on plan assets by considering the expected future returns and volatility levels for each asset class that are based on historical returns and forward-looking observations. The expected long-term rate of return on plan assets assumption used in each non-U.S. plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the impact of active management of the plan’s assets. Note 10 includes disclosure of assumptions employed in these measurements for both the non-U.S. and U.S. plans.   Asset Retirement Obligations   We recognize asset retirement obligations ("ARO") in the period in which we have an existing legal obligation associated with the retirement of a tangible long-lived asset, and the amount can be reasonably estimated. The ARO is recognized at fair value when the liability is incurred. Upon initial recognition of a liability, that cost is capitalized as part of the related long-lived asset and depreciated on a straight-line basis over the remaining estimated useful life of the related asset. We have recognized a liability related to special handling of asbestos related materials in certain facilities for which we have plans or expectation of plans to undertake a major renovation or demolition project that would require the removal of asbestos or have plans or expectation of plans to exit a facility. In addition, we have determined that we have facilities with some level of asbestos that will require abatement action in the future. Once the probability and timeframe of an action are determined, we apply certain assumptions to determine the related liability and asset. These assumptions include the use of inflation rates, the use of credit adjusted risk-free discount rates and the estimation of costs to handle asbestos related materials. The recorded liability is required to be adjusted for changes resulting from the passage of time and/or revisions to the timing or the amount of the original estimate. The asset retirement obligation liability was $2,917$3,147 and $2,948$2,888 at November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022, respectively.   50 Table of Contents Environmental Costs   Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments are made, or remedial efforts are probable, and the costs can be reasonably estimated. The timing of these accruals is generally no later than the completion of feasibility studies.   Contingent Consideration Liability   Concurrent with business acquisitions, we enter into agreements that require us to pay the sellers a certain amount based upon a formula related to the entity’s financial results. The change in fair value of the contingent consideration liability is recorded in SG&A expenses in the Consolidated Statements of Income.   Share-based Compensation   We have various share-based compensation programs which provide for equity awards, including non-qualified stock options, incentive stock options, restricted stock units, performance awards and deferred compensation. We use the straight-line attribution method to recognize compensation expense associated with share-based awards based on the fair value on the date of grant, net of the estimated forfeiture rate. Expense is recognized over the requisite service period related to each award, which is the period between the grant date and the earlier of the award’s stated vesting term or the date the employee is eligible for early retirement based on the terms of the plan. The fair value of stock options is estimated using the Black-Scholes option pricing model. All of our stock compensation expense is recorded in SG&A expenses in the Consolidated Statements of Income. See Note 9 for additional information.   Earnings per Share   Basic earnings per share is calculated by dividing net income attributable to H.B. Fuller by the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is based upon the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to share-based compensation awards. We use the treasury stock method to calculate the effect of outstanding awards, which computes total employee proceeds as the sum of (a) the amount the employee must pay upon exercise of the award and (b) the amount of unearned share-based compensation costs attributed to future services. Share-based compensation awards for which total employee proceeds exceed the average market price over the applicable period have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share. The computations for basic and diluted earnings per share are as follows:   (in thousands, except per share data)   2021     2020     2019     2023   2022   2021   Net income attributable to H.B. Fuller   $ 161,393     $ 123,719     $ 130,817     $ 144,906     $ 180,313     $ 161,393       Weighted-average common shares – basic   52,887     52,039     50,920     54,332     53,580     52,887   Equivalent shares from share-based compensation plans     1,428     481     1,063       1,626       1,689       1,428   Weighted-average common and common equivalent shares – diluted     54,315     52,520     51,983       55,958       55,269       54,315       Basic earnings per share   $ 3.05     $ 2.38     $ 2.57     $ 2.67     $ 3.37     $ 3.05   Diluted earnings per share   $ 2.97     $ 2.36     $ 2.52     $ 2.59     $ 3.26     $ 2.97     Share-based compensation awards for 1,535,503, 3,982,2751,089,054, 707,197 and 2,951,6971,535,503 shares for 2021,2023, 20202022 and 20192021, respectively, were excluded from the diluted earnings per share calculation because they were antidilutive.   3651 Table of Contents   Financial Instruments and Derivatives   As a part of our ongoing operations, we are exposed to market risks such as changes in foreign currency exchange rates and interest rates. To manage these risks, we may enter into derivative transactions pursuant to our established policies.   Our objective is to balance, where possible, non-functional currency denominated assets to non-functional currency denominated liabilities to have a natural hedge and minimize foreign exchange impacts. We minimize risks from foreign currency exchange rate fluctuations through normal operating and financing activities and, when deemed appropriate, through the use of derivative instruments. Derivatives consisted primarily of forward currency contracts used to manage foreign currency denominated assets and liabilities. For derivative instruments outstanding that were not designated as hedges for accounting purposes, the gains and losses related to mark-to-market adjustments were recognized as other income or expense in the income statement during the periods the derivative instruments were outstanding. To manage exposure to currency rate movements on expected cash flows, the company may enter into cross-currency swap agreements.    The company manages interest expense using a mix of fixed and floating rate debt.  To manage exposure to interest rate movements and to reduce borrowing costs, the company may enter into interest rate swap agreements.   Changes in the fair values of derivatives are recorded in net earnings or other comprehensive income, based on the type of derivative, and whether the instrument is designated and effective as a hedge transaction. Gains or losses on derivative instruments reported in accumulated other comprehensive income (loss) are reclassified to earnings in the period the hedged item affects earnings. Any ineffectiveness is recognized in earnings in the current period. We maintain master netting arrangements that allow us to net settle contracts with the same counterparties; we do not elect to offset amounts in our Consolidated Balance Sheet.  These arrangements generally do not call for collateral. We do not enter into any speculative positions with regard to derivative instruments. See Note 12 for further information regarding our financial instruments.   Purchase of Company Common Stock   Under the Minnesota Business Corporation Act, repurchased stock is included in authorized shares, but is not included in shares outstanding. The excess of the repurchase cost over par value is charged to additional paid-in capital. When additional paid-in capital is exhausted, the excess reduces retained earnings. We indirectly repurchased 47,481, 72,000113,868, 49,869 and 73,04347,481 shares of common stock in 2021,2023, 20202022 and 20192021, respectively, through a net-settlement feature in connection with the statutory minimum tax withholding related to vesting of restricted stock.   Change inNew Accounting Principle - Credit LossesPronouncements   In June 2016,December 2023, the FASB issued ASU No. 2016-13,Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The FASB also issued ASU No.2018-19,Codification Improvements to Topic 326, Financial Instruments - Credit Losses, in November 2018, ASU No.2019-04,Codification Improvements to Topic 326,Financial Instruments, in April 2019 and ASU No.2019-11,Codification Improvements to Topic 326, Financial Instruments, in November 2019. ASU No.2018-19 clarifies that receivables arising from operating leases are within the scope of Topic 842,Leases. ASU No.2019-04 and ASU No.2019-11 clarify various scoping and other issues arising from ASU No.2016-13. The amendments in these ASUs affect the guidance in ASU No.2016-13 and are effective in the same timeframe as ASU No.2016-13. We adopted these ASUs and related standards during the first quarter ended February 27, 2021. Based on the conducted analyses on the change in accounting principle, the ASUs did not have a material impact on the Consolidated Statements of Income or the Consolidated Balance Sheets. Therefore, a modified retrospective adjustment was not required. The trade receivables and allowances significant accounting policy has been changed in accordance with these ASUs. Change in Accounting Principle – Revenue Recognition In May 2014, FASB issued ASU No.20142023-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. We adopted this ASU during the quarter ended March 2, 2019 using the modified retrospective method of adoption. As a result of the adoption of this ASU, we recorded an increase to opening retained earnings of $1,776 as of December 1, 2018 related to accelerated recognition for arrangements where we provide shipping and handling services after control of the goods has transferred to the customer. Prior periods were not restated. We have included the disclosures required by this ASU in Note 15. In March 2016, the FASB issued ASU No.2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This ASU provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer. The amendments in this ASU affect the guidance in ASU No.2014-09 and were adopted during the quarter ended March 2, 2019 with ASU No.2014-09 as discussed above. 37 Table of Contents Change in Accounting Principle – Income Tax Impact ofIntra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU No.2016-16,Income Taxes (Topic740): Intra-Entity Transfers of Assets Other Than Inventory. This ASU changes the timing of income tax recognition for an intercompany sale of assets. The ASU requires the seller’s tax effects and the buyer’s deferred taxesImprovements to be recognized immediately upon the sale instead of deferring accounting for the income tax implications until the assets are sold to a third party or recovered through use. We adopted this ASU during the quarter ended March 2, 2019. We recorded a decrease to opening retained earnings of $733 as of December 1, 2018 as a result of the adoption of this ASU. New Accounting Pronouncements In November 2021, the FASB issued ASU No.2021-10,Government Assistance (Topic 832):Income Tax Disclosures by Business Entities about Government Assistance. This ASU requires business entities to make annualprovide additional information in the rate reconciliation and additional disclosures about transactions withincome taxes paid. This guidance requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a government they account for by analogizing to a grant or contribution accounting model under ASC 958-605.quantitative threshold. Our effective date for adoption of this ASU is our fiscal year beginningending December 4, 2022November 28, 2026. with early adoption permitted. We have evaluatedare evaluating the effect that this guidance will have on our Consolidated Financial StatementsStatements.  In November 2023, the FASB issued ASU No.2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires enhanced disclosures regarding significant segment expenses and determined itother segment items. The guidance requires public entities to provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. Our effective date of this ASU is our fiscal year ending November 29, 2025. We are evaluating the effect that this guidance will have on our Consolidated Financial Statements.  In notSeptember 2022, the FASB issued ASU No. 2022-04,Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of the financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs.  Our effective date of this ASU is our fiscal year ending December 1, 2024. We are evaluating the effect that this guidance will have a material impact.on our Consolidated Financial Statements.  Recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the company.   52 Table of Contents   Note 2: Acquisitions   STR Holdings, Inc.Sanglier Ltd.   On January 13, 2021,September 8, 2023, we acquired certainthe assets of STR Holdings, Inc. ("STR"Sanglier Ltd. (“Sanglier”) for a base purchase price of $5,44513,339 British pound sterling, or approximately $16,632 which was funded through existing cash. The agreement requires us to pay an additional $800This includes a holdback amount of 2,100 British pound sterling that will be paid on the first18-month anniversary of the closing date. Sanglier, headquartered in Mansfield, United Kingdom, is a manufacturer and filler of sprayable (aerosol and cannister) industrial adhesives. The acquisition of Sanglier expands our innovation capabilities and product portfolio across the United Kingdom and Europe transforming adhesives applications to enable sprayable delivery providing end users with an opportunity to greatly improve labor efficiency. The acquisition fair value measurement was preliminary as of December 2, 2023 and includes intangible assets of $10,695 and other net assets of $5,937. Sanglier is included in our Construction Adhesives operating segment. Adhezion Biomedical LLC On June 23, 2023, we acquired Adhezion Biomedical LLC (“Adhezion”) for a base purchase price of $80,802 which was funded through borrowings on our credit facility. This includes a holdback amount of $780 that will be paid on the 12-month anniversary of the closing date. The agreement includes a payment of contingent consideration of up to $1,700 based on$15,000 following the completion of certain agreement provisions. STR,performance goals and conditions. Adhezion, headquartered in Enfield, Connecticut,Wyomissing, Pennsylvania, is a manufacturer of encapsulant products usedcyanoacrylate-based healthcare adhesives and infection prevention products. The acquisition of Adhezion positions us for expansion in the solarhealthcare adhesives industry and creates a solid, unique platform from which to scale and innovate in the healthcare adhesives industry. The acquisition fair value measurement whichwas preliminary as of December 2, 2023 and includes intangible assets of $6,700$38,500, goodwill of $38,389 and other net assets of $1,245,$3,913. Goodwill represents expected synergies from combining Adhezion with our existing business. As of December 2, 2023, the amount of goodwill that is deductible for tax purposes is $25,702. Adhezion is included in our Hygiene, Health and Consumable Adhesives operating segment. XChem International LLC On June 12, 2023, we acquired XChem International LLC ("XChem") for a base purchase price of approximately $14,591 which was finalfunded through borrowings on our credit facility. This includes a holdback amount of $1,650 that will be paid on the 18-month anniversary of the closing date. XChem, headquartered in Ras Al-Khaimah, United Arab Emirates, is a manufacturer of adhesives and sealants for construction-related applications. The acquisition of XChem provides our construction adhesives global business with additional manufacturing presence for certain brands outside the U.S. and broadens our construction adhesives portfolio of highly specified applications and diversifies it toward both non-U.S. and infrastructure-oriented markets. The acquisition fair value measurement was preliminary as of November 27, 2021.December 2, 2023 Asand includes intangible assets of November 27, 2021, the agreement provisions for the contingent consideration were met,$4,400, goodwill of $4,783 and as a result, the $1,700 was paid. See Note 13 for the fair value and paymentother net assets of this contingent consideration. We recorded 0 goodwill in$5,408. Goodwill represents expected synergies from combining XChem with our accounting for this acquisition. STR is reported in our Engineering Adhesives ("EA") operating segment. The STR acquisition does not represent a material business combination and therefore pro forma financial informationexisting business. Goodwill is not provided. deductible for tax purposes. XChem is included in our Construction Adhesives operating segment.   D.H.M.Beardow Adams Holdings Ltd. On May 1, 2023, we acquired Beardow Adams Holdings Ltd. (“Beardow Adams”) for a total purchase price of 80,738 British pound sterling, or approximately $100,885, which was funded through borrowings on our credit facility. This includes a holdback amount of 8,000 British pound sterling that will be paid on the 18-month anniversary of the closing date. Beardow Adams, based in the United Kingdom, develops and manufactures adhesives, sealants and coatings, principally in the fields of packaging and related applications. The acquisition of Beardow Adams is expected to accelerate profitable growth in many of our core end markets and generate business synergies through better raw material pricing, production optimization and an expanded distribution platform. The acquisition fair value measurement was preliminary as of December 2, 2023 and includes intangible assets of $37,611, goodwill of $25,674 and other net assets of $37,600. Goodwill represents expected synergies from combining Beardow Adams with our existing business. As of December 2, 2023, the amount of goodwill that is deductible for tax purposes is $2,998. The remaining goodwill is not deductible for tax purposes. Beardow Adams is included in our Hygiene, Health and Consumable Adhesives Inc.operating segment. 53 Table of Contents Aspen Research Corporation On February 3, 2020,January 31, 2023, we acquired certainthe assets of D.H.M. Adhesives, Inc.Aspen Research Corporation (“D.H.M.”Aspen”) for approximately $9,500a total purchase price of $9,761, which was funded through existing cash. In addition,This includes a holdback amount of $500 that will be paid on the agreement requires us to pay contingent consideration18-month anniversary of up to approximately $8,100 based upon a formula related to revenue during the fiscal years ended November 27, 2021 and December 3, 2022. D.H.M., headquarteredclosing date. Aspen, located in Calhoun, Georgia,Maple Grove, Minnesota, is a providercontract research organization that develops and manufactures innovative solutions for some of hotmelt adhesives.the adhesives used in our insulating glass market. Aspen is known for their superior understanding of materials science, engineering and analytical testing and specializes in custom materials manufacturing for chemicals and adhesives products. The acquisition of Aspen is expected to expand our Engineering Adhesives footprint in North America and strengthen our capabilities in the insulating glass market, in addition to bringing additive continuous flow, process manufacturing capabilities that we plan to leverage. The acquisition fair value measurement was final as of May 30, 2020December 2, 2023 and includes intangible assets of $4,900, goodwill of $1,063$3,832 and customer relationship intangibleother net assets of $11,900. The fair value of the contingent consideration liability as of the date of acquisition was $5,000 resulting$1,029. Goodwill represents expected synergies from combining Aspen with our existing business. Goodwill is deductible for tax purposes. Aspen is included in our Engineering Adhesives operating segment. Lemtapes Oy On December 15, 2022, we acquired Lemtapes Oy (“Lemtapes”) for a finaltotal purchase price of $14,500.$8,922 Euro, or approximately $9,482 which was funded through existing cash. This includes a holdback amount of 850 Euro that will be paid on the 18-month anniversary of the closing date. Lemtapes, located in Valkeakoski, Finland, is a solutions provider of ecological, innovative tapes and adhesives for the packaging and plywood industries. The acquisition of Lemtapes is expected to reinforce our strategic position in Europe, especially for our adhesives coated solutions products. This acquisition will also accelerate our growth strategy of fast-growing, high margin businesses while adding technology capabilities and strong customer relationships. The acquisition fair value measurement was final as of December 2, 2023 and includes intangible assets of $5,526, goodwill of $3,028 and other net assets of $928. Goodwill represents expected synergies from combining Lemtapes with our existing business. Goodwill is not deductible for tax purposes. Lemtapes is included in our Hygiene, Health and Consumable Adhesives operating segment. GSSI Sealants On October 24, 2022, we acquired GSSI Sealants, Inc. ("GSSI") for a total purchase price of $7,701, which was funded through existing cash. This includes a holdback amount of $1,050 that was paid on the 12-month anniversary of the closing date. In addition, we recorded a liability for contingent consideration of $870, to be paid following the completion of certain performance goals and conditions. GSSI, headquartered in Houston, Texas, is a manufacturer of premier elastomeric butyl rubber sealant tapes. The acquisition of GSSI is expected to support our strategy to expand our Construction Adhesives business selectively via high margin applications. The acquisition fair value measurement was final as of September 2, 2023 and includes intangible assets of $3,400, goodwill of $1,123 and other net assets of $3,178. Goodwill represents expected synergies from combining GSSI with our existing business. Goodwill is not deductible for tax purposes. See Note 13 for further discussion of the fair value of the contingent consideration. GSSI is included in our Construction Adhesives operating segment. ZKLT Polymer Co. On August 16, 2022, we acquired ZKLT Polymer Co., Ltd. ("ZKLT") for a base purchase price of 143,965 Chinese renminbi, or approximately $21,260, which was funded through existing cash. This includes a holdback of 27,000 Chinese renminbi, or approximately $3,987, half of which was paid on the 12-month anniversary of the closing date and half to be paid on the 18-month anniversary of the closing date. In addition, we recorded a liability for contingent consideration liability.of 30,000 Chinese renminbi, or approximately $4,132, which was paid in the fourth quarter of 2023 following the completion of certain performance goals and conditions. ZKLT, headquartered in Chongquin City, China, is a manufacturer of liquid adhesives primarily for the automotive market. The acquisition of ZKLT is expected to add unique technology, strong customer relationships and a strategic manufacturing location to further strengthen our presence in central China. The acquisition fair value measurement was final as of September 2, 2023 and includes intangible assets of $5,183, goodwill of $5,992 and other net assets of $10,085. Goodwill represents expected synergies from combining ZKLT with our existing business. Goodwill isnot deductible for tax purposes. D.H.M. andSee Note 13 for further discussion of the related goodwill are reportedfair value of the contingent consideration. ZKLT is included in our Hygiene, Health and ConsumableEngineering Adhesives operating segment. 54 Table of Contents Apollo On January 26, 2022, we acquired Apollo Chemicals Limited, Apollo Roofing Solutions Limited and Apollo Construction Solutions Limited (collectively, "Apollo") for a total purchase price of 152,714 British pound sterling, or approximately $205,592, which was funded through borrowings on our credit facility. Apollo, headquartered in Tamworth, UK, is a manufacturer of liquid adhesives, coatings and primers for the roofing, industrial and construction markets. Apollo is expected to enhance our position in key high-value, high-margin markets in the UK and throughout Europe. The D.H.M. acquisition doesfair value measurement was final as of December 3, 2022 and includes intangible assets of $76,198, goodwill of $119,358 and other net assets of $10,036. Goodwill represents expected synergies from combining Apollo with our existing business. Goodwill is not deductible for tax purposes. The acquisition is included in our Construction Adhesives operating segment. Fourny NV On January 11, 2022, we acquired Fourny NV ("Fourny") for a base purchase price of 12,867 Euro, or approximately $14,627, which was funded through existing cash. The agreement required us to pay an additional holdback amount 18 months following the date of acquisition and during the three months ended September 2, 2023 we paid $3,060. Fourny, headquartered in Willebroek, Belgium, is a manufacturer of construction adhesives. Fourny is expected to enhance our position in key high-value, high-margin markets in Europe. The acquisition fair value measurement was final as of December 3, 2022 and includes intangible assets of $10,117, goodwill of $6,455 and other net assets of $1,391. Goodwill represents expected synergies from combining Fourny with our existing business. Goodwill is not deductible for tax purposes. Fourny is included in our Construction Adhesives operating segment. All acquisitions, individually and in the aggregate, are not represent a material business combination and therefore pro forma financial information is not provided. Ramapo Sales and Marketing, Inc. On May 17, 2019, we acquired certain assets from a window and insulating glass sealants sales and distribution company, Ramapo Sales and Marketing, Inc. (“Ramapo”), headquartered in Charleston, South Carolina. This acquisition supports the integration of the insulating glass business that we acquired as part of the Royal Adhesives acquisition. The purchase price of $8,292 was funded through existing cash. In addition, we were required to pay up to $3,400 in contingent consideration based upon financial results for the twelve months ended December 31, 2019. Existing receivables of $2,166 from Ramapo were effectively settled as a result of the acquisition. The acquisition fair value measurement was final as of May 30, 2020 and includes goodwill of $165, customer relationship intangible of $8,800, and additional acquired assets of $4,148. The fair value of the contingent consideration liability as of the date of the acquisition was $2,654, resulting in a final purchase price of $10,947. During the second quarter of 2020, the contingent consideration liability was finalized and adjusted to a final balance of $767. Ramapo and the related goodwill are reported in our Engineering Adhesives operating segment. Dalton Holdings, LLC On July 1, 2019, we completed the sale of Dalton Holdings, LLC (“Dalton Holdings”), which primarily manufactures surfactants and thickeners, within the Americas Adhesives segment. The sale resulted in a pre-tax gain on sale of $18,764, which is recorded in other income, net in the Consolidated Statements of Income for the year ended November 30, 2019.   Note 3: Restructuring Actions   The company hasDuring fiscal year 2023, the Company approved restructuring plans consisting of consolidation plans,(the "Plans") related to organizational changes and other actions to optimize operations and integrate acquired businesses. The Plans began to be implemented in the second quarter of fiscal year 2023 and are currently expected to be completed during fiscal year 2026, with the majority of the charges recognized and cash payments occurring in fiscal 2023 and 2024. In implementing the Plans, the Company currently expects to incur pre-tax costs of approximately $39,100 to $44,100 for severance and related employee costs globally, other restructuring costs related to the reorganizationstreamlining of our business into three segments,processes and the integrationpayment of anticipated income taxes in certain jurisdictions related to the operations of Royal Adhesives with the operations of the company and other actions to optimize operations. Plans.  The following table summarizes the pre-tax distribution of charges under these restructuring plans by income statement classification:     November 27, 2021     November 28, 2020     November 30, 2019     December 2, 2023     December 3, 2022     November 27, 2021   Cost of sales   $ (188 )   $ 1,013     $ 2,082     $ 15,012     $ (152 )   $ (188 ) Selling, general and administrative     975       3,567       12,453       9,575       (297 )     975     $ 787     $ 4,580     $ 14,535     $ 24,587     $ (449 )   $ 787     The restructuring charges are all recorded in Corporate Unallocated for segment reporting purposes.   38 Table of Contents A summary of the restructuring liability is presented below:     Employee-               Employee-                       Related     Other     Total     Related     Asset-Related   Other   Total   Balance at end November 30, 2019   $ 9,830     $ 924     $ 10,754   Expense incurred   2,898     1,681     4,579   Cash payments   (7,051 )   (2,357 )   (9,408 ) Foreign currency translation     157       0       157   Balance at end November 28, 2020   $ 5,834     $ 248     $ 6,082   Balance at November 27, 2021   $ 1,095     $ -     $ -     $ 1,095   Expense incurred   (807 )   1,594     787     (449 )   -     -     (449 ) Non-cash charges   0     (135 )   (135 )   -     -     -     0   Cash payments   (3,917 )   (1,707 )   (5,624 )   (529 )   -     -     (529 ) Foreign currency translation     (15 )     0       (15 )     (60 )     -       -       (60 ) Balance at end November 27, 2021   $ 1,095     $ 0     $ 1,095   Balance at December 3, 2022   $ 57     $ -     $ -     $ 57   Expense incurred   22,731     1,369     487     24,587   Non-cash charges   -     (1,369 )   (453 )   (1,822 ) Cash payments   (9,802 )   -     (34 )   (9,836 ) Foreign currency translation     (1,263 )     -       -       (1,263 ) Balance at December 2, 2023   $ 11,723     $ -     $ -     $ 11,723     55 Table of Contents Non-cash charges include accelerated depreciation resulting from the cessation of use of certain long-lived assets.assets, the recording of a provision related to the discontinuance of certain products and lease termination payments. Restructuring liabilities have been classified as a component of other accrued expenses on the Consolidated Balance Sheets.   Note 4: Supplemental Financial Statement Information   Statement of Income Information   Additional details of income statement amounts for 2021,2023, 20202022 and 20192021 are as follows:     2021     2020     2019     2023     2022     2021   Foreign currency transaction losses, net   $ (5,962 )   $ (3,078 )   $ (1,156 )   $ (11,615 )   $ (12,935 )   $ (5,962 ) (Loss) gain on disposal of assets   (648 )   (86 )   24,304   Gain (loss) on disposal of assets   (58 )   1,416     (648 ) Net periodic pension benefit   32,070     17,902     13,661     20,246     26,787     32,070   Other, net     7,395       660       1,134       1,109       (2,316 )     7,395   Total other income, net   $ 32,855     $ 15,398     $ 37,943     $ 9,682     $ 12,952     $ 32,855       Research and development expenses (included in SG&A expenses)   $ 39,344     $ 36,969     $ 36,624     $ 48,640     $ 44,853     $ 39,344     3956 Table of Contents   Balance Sheet Information   Additional details of balance sheet amounts as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022 are as follows:     2021     2020     2023     2022   Inventories                 Raw materials   $ 226,723     $ 151,026     $ 206,140     $ 237,071   Finished goods     221,681       172,187       235,900       254,710   Total inventories   $ 448,404     $ 323,213     $ 442,040     $ 491,781       Other current assets                 Other receivables   $ 28,874     $ 18,666     $ 40,760     $ 36,338   Prepaid income taxes   13,359     22,137     12,327     27,169   Prepaid taxes other than income taxes   26,929     20,270     34,455     29,322   Prepaid expenses   25,889     19,212       25,136       27,490   Assets held for sale     1,284       828   Total other current assets   $ 96,335     $ 81,113     $ 112,678     $ 120,319       Property, plant and equipment                 Land   $ 84,492     $ 87,403     $ 91,320     $ 84,320   Buildings and improvements   395,849     393,175     447,428     405,037   Machinery and equipment   915,914     876,858     1,058,916     957,371   Construction in progress     104,734       70,747       157,371       133,010   Total, at cost   1,500,989     1,428,183     1,755,035     1,579,738   Accumulated depreciation     (805,622 )     (757,439 )     (930,380 )     (846,071 ) Net property, plant and equipment   $ 695,367     $ 670,744     $ 824,655     $ 733,667       Other assets                 Investments and company owned life insurance   $ 9,584     $ 9,006   Investments in company owned life insurance   $ 9,334     $ 8,957   Equity method investments   49,333     53,863     37,562     42,143   Equity investments   1,667     1,669     1,362     1,362   Long-term deferred income taxes   37,116     37,376     42,949     39,048   Prepaid pension costs   90,946     43,206     92,323     86,616   Postretirement other than pension asset   107,323     73,137     113,431     98,848   Operating lease right-of-use assets   32,744     28,445     47,433     32,440   Other long-term receivables   23,661     16,760     14,013     9,262   Other long-term assets     19,699       14,751       12,758       17,192   Total other assets   $ 372,073     $ 278,213     $ 371,165     $ 335,868       Other accrued expenses                 Taxes other than income taxes   $ 14,280     $ 16,893     $ 22,497     $ 14,642   Miscellaneous services   5,626     5,691     8,319     7,092   Customer rebates   20,743     15,008     17,938     24,915   Interest   2,964     4,901     5,819     7,498   Insurance   329     184   Product liability   432     501     175     154   Contingent consideration liability   8,100     5,800     1,370     1,977   Current operating lease liabilities   8,921     8,706     11,277     9,794   Current obligations of finance leases   16,184   1,541   Accrued expenses     24,666       26,292       24,323       21,732   Total other accrued expenses   $ 86,061     $ 83,976     $ 107,902     $ 89,345       Other liabilities                 Asset retirement obligations   $ 2,917     $ 2,948     $ 3,147     $ 2,888   Long-term deferred income taxes   179,401     165,877     176,385     183,190   Long-term income tax liability   14,364     18,089     19,225     22,202   Long-term deferred compensation   9,665     8,510     9,884     9,957   Postretirement other than pension   2,657     2,930     1,893     2,021   Noncurrent operating lease liabilities   24,061     19,498     36,879     23,421   Long-term accrued payroll tax   4,215     7,216   Environmental liabilities   3,521     3,639     2,563     3,064   Net investment hedge liabilities   72,589   54,046   Other long-term liabilities     36,389       50,212       65,507       57,497   Total other liabilities   $ 277,190     $ 278,919     $ 388,072     $ 358,286     4057 Table of Contents   Additional details on the trade receivables allowance for doubtful accounts, credits related to pricing or quantities shipped and early payment discounts for 2021,2023, 20202022 and 20192021 are as follows:     2021     2020     2019     2023     2022     2021   Balance at beginning of year   $ 12,905     $ 10,682     $ 14,017     $ 10,939     $ 9,935     $ 12,905   Charged to expenses and other adjustments   (546 )   8,313     2,678     1,224     1,794     (546 ) Write-offs   (2,278 )   (6,158 )   (5,947 )   (1,522 )   (851 )   (2,278 ) Foreign currency translation effect     (146 )     68       (66 )     439       61       (146 ) Balance at end of year   $ 9,935     $ 12,905     $ 10,682     $ 11,080     $ 10,939     $ 9,935     Statement of Comprehensive Income Information   The following tables provides details of total comprehensive income (loss):     November 27, 2021     December 2, 2023                       Non-controlling                       Non-controlling     H.B. Fuller Stockholders     Interest     H.B. Fuller Stockholders     Interest     Pretax     Tax     Net     Net     Pretax     Tax     Net     Net   Net income attributable to H.B. Fuller and non-controlling interests   -     -     $ 161,393     $ 82     -     -     $ 144,906     $ 82   Other comprehensive income (loss)     Foreign currency translation adjustment1   $ (26,262 )   -     (26,262 )   (32 )   $ 17,320     -     17,320     2   Defined benefit pension plans adjustment2   64,912     (16,731 )   48,181     -     1,554     (762 )   792     -   Interest rate swap3   20,109     (4,930 )   15,179     -     5,932     (1,460 )   4,472     -   Other cash flow hedges3     (4,554 )     68       (4,486 )     -   Net investment hedges3     (18,555 )     4,448     (14,107 )     -   Other comprehensive income (loss)   $ 54,205     $ (21,593 )     32,612       (32 )   $ 6,251     $ 2,226     $ 8,477     $ 2   Comprehensive income               $ 194,005     $ 50                 $ 153,383     $ 84       November 28, 2020     December 3, 2022                       Non-controlling                       Non-controlling     H.B. Fuller Stockholders     Interest     H.B. Fuller Stockholders     Interest     Pretax     Tax     Net     Net     Pretax     Tax     Net     Net   Net income attributable to H.B. Fuller and non-controlling interests   -     -     $ 123,719     $ 69     -     -     $ 180,313     $ 94   Other comprehensive income (loss)     Foreign currency translation adjustment1   $ 41,712     -     41,712     30     $ (131,745 )   -     (131,745 )   (61 ) Defined benefit pension plans adjustment2   5,823     (1,235 )   4,588     -     (18,881 )   3,818     (15,063 )   -   Interest rate swap3   (15,618 )   3,853     (11,765 )   -     13,148     (3,224 )   9,924     -   Other cash flow hedges3     6,307       (101 )     6,206       -     (3,536 )   53     (3,483 )   -   Net investment hedges3     (54,040 )     13,297     (40,743 )     -   Other comprehensive income   $ 38,224     $ 2,517       40,741       30     $ (195,054 )   $ 13,944     $ (181,110 )   $ (61 ) Comprehensive income               $ 164,460     $ 99                 $ (797 )   $ 33         November 30, 2019                               Non-controlling       H.B. Fuller Stockholders     Interest       Pretax     Tax     Net     Net   Net income attributable to H.B. Fuller and non-controlling interests     -       -     $ 130,817     $ 27   Other comprehensive income (loss)                                 Foreign currency translation adjustment1   $ (20,409 )     -       (20,409 )     14   Defined benefit pension plans adjustment2     (28,635 )     6,807       (21,828 )     -   Interest rate swap3     (46,254 )     11,223       (35,031 )     -   Other cash flow hedges3     14,429       (609 )     13,820       -   Other comprehensive (loss) income   $ (80,869 )   $ 17,421       (63,448 )     14   Comprehensive income                   $ 67,369     $ 41   58 Table of Contents       November 27, 2021                               Non-controlling       H.B. Fuller Stockholders     Interest       Pretax     Tax     Net     Net   Net income attributable to H.B. Fuller and non-controlling interests     -       -     $ 161,393     $ 82   Other comprehensive income (loss)                                 Foreign currency translation adjustment1   $ (26,262 )     -       (26,262 )     (32 ) Defined benefit pension plans adjustment2     64,912       (16,731 )     48,181       -   Interest rate swap3     20,109       (4,930 )     15,179       -   Other cash flow hedges3     (4,554 )     68       (4,486 )     -   Other comprehensive (loss) income   $ 54,205     $ (21,593 )   $ 32,612     $ (32 ) Comprehensive income                   $ 194,005     $ 50     1 Income taxes are not provided for foreign currency translation relating to indefinite investments in international subsidiaries.   2 Loss reclassified from accumulated other comprehensive income (loss) into earnings as part of net periodic cost related to pension and other postretirement benefit plans is reported in cost of sales and SG&A expenses.   3 Loss reclassified from accumulated other comprehensive income (loss) into earnings is reported in other income, net.   41 Table of Contents Statement of Total Equity Information   Components of accumulated other comprehensive income (loss) are as follows:     November 27, 2021     December 2, 2023                 Non-                 Non-           H.B. Fuller   controlling           H.B. Fuller   controlling     Total     Stockholders     Interests     Total     Stockholders     Interests   Foreign currency translation adjustment   $ (132,370 )   $ (132,267 )   $ (103 )   $ (246,736 )   $ (246,692 )   $ (44 ) Interest rate swap, net of taxes of $3,224   (9,924 )   (9,924 )   0   Cash flow hedges, net of taxes of ($53)   3,483     3,483     0   Defined benefit pension plans adjustment, net of taxes of $63,925   (113,198 )   (113,198 )   0   Defined benefit pension plans adjustment, net of taxes of $66,982   (127,469 )   (127,469 )   -   Interest rate swap, net of taxes of ($1,460)   4,472   4,472   -   Net investment hedges, net of taxes of $17,744   (54,850 )   (54,850 )   -   Reclassification of AOCI tax effects     (18,341 )     (18,341 )     0       (18,341 )     (18,341 )     -   Total accumulated other comprehensive loss   $ (270,350 )   $ (270,247 )   $ (103 )   $ (442,924 )   $ (442,880 )   $ (44 )     November 28, 2020     December 3, 2022                 Non-                 Non-           H.B. Fuller   controlling           H.B. Fuller   controlling     Total     Stockholders     Interests     Total     Stockholders     Interests   Foreign currency translation adjustment   $ (106,140 )   $ (106,005 )   $ (135 )   $ (264,054 )   $ (264,012 )   $ (42 ) Interest rate swap, net of taxes of $8,153   (25,103 )   (25,103 )   0   Cash flow hedges, net of taxes of ($121)   7,969     7,969     -   Defined benefit pension plans adjustment, net of taxes of $80,656   (161,379 )   (161,379 )   -   Defined benefit pension plans adjustment, net of taxes of $67,744   (128,261 )   (128,261 )   -   Net investment hedges, net of taxes of $13,297   (40,743 )   (40,743 )   -   Reclassification of AOCI tax effects     (18,341 )     (18,341 )     -       (18,341 )     (18,341 )     -   Total accumulated other comprehensive loss   $ (302,994 )   $ (302,859 )   $ (135 )   $ (451,399 )   $ (451,357 )   $ (42 )       November 30, 2019                       Non-               H.B. Fuller     controlling       Total     Stockholders     Interests   Foreign currency translation adjustment   $ (147,821 )   $ (147,716 )   $ (105 ) Interest rate swap, net of taxes of ($4,300)     (13,338 )     (13,338 )     0   Cash flow hedges, net of taxes of $21     1,763       1,763       0   Defined benefit pension plans adjustment, net of taxes of $81,891     (165,968 )     (165,968 )     0   Reclassification of AOCI tax effects     (18,341 )     (18,341 )     0   Total accumulated other comprehensive loss   $ (343,705 )   $ (343,600 )   $ (105 ) 59 Table of Contents       November 27, 2021                       Non-               H.B. Fuller     controlling       Total     Stockholders     Interests   Foreign currency translation adjustment   $ (132,370 )   $ (132,267 )   $ (103 ) Defined benefit pension plans adjustment, net of taxes of $63,925     (113,198 )     (113,198 )     -   Interest rate swap, net of taxes of $3,224     (9,924 )     (9,924 )     -   Cash flow hedges, net of taxes of ($53)     3,483       3,483       -   Reclassification of AOCI tax effects     (18,341 )     (18,341 )     -   Total accumulated other comprehensive loss   $ (270,350 )   $ (270,247 )   $ (103 )     Note 5: Goodwill and Other Intangible Assets   Goodwill balances by reportable segment as of November 27, 2021 and November 28, 2020consisted of the following:       2021     2020   Hygiene, Health and Consumable Adhesives   $ 325,470     $ 332,909   Engineering Adhesives     662,021       667,863   Construction Adhesives     311,354       311,231   Total   $ 1,298,845     $ 1,312,003   Additional details related to goodwill for 2021 and 2020 are as follows:     2021     2020   Balance at beginning of year   $ 1,312,003     $ 1,281,808   Ramapo acquisition     0       (746 ) D.H.M acquisition     0       1,063   Foreign currency translation effect     (13,158 )     29,878   Balance at end of year   $ 1,298,845     $ 1,312,003                                         Hygiene, Health                               and Consumable     Engineering     Construction               Adhesives     Adhesives     Adhesives     Total   As of December 3, 2022   $ 328,962     $ 637,910     $ 425,755     $ 1,392,627   Acquisitions     67,523       5,983       6,179       79,685   Foreign currency translation effect     6,113       7,252       835       14,200   As of December 2, 2023   $ 402,598     $ 651,145     $ 432,769     $ 1,486,512     We evaluate our goodwill for impairment annually at the beginning of the fourth quarter or earlier upon the occurrence of substantive unfavorable changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization. The quantitative impairment test requires judgment, including the identification of reporting units, the assignment of assets, liabilities and goodwill to reporting units, and the determination of fair value of each reporting unit. The impairment test requires the comparison of the fair value of each reporting unit with its carrying amount, including goodwill. In performing the impairment test, we determined the fair value of our reporting units through the income approach by using DCF analyses. Determining fair value requires the company to make judgments about appropriate discount rates, perpetual growth rates and the amount and timing of expected future cash flows. The cash flows employed in the DCF analysis for each reporting unit are based on the reporting unit's budget, long-term business plan and recent operating performance. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting unit and market conditions. Based on the analysis performed during the fourth quarter of 20212023, there were no indications of impairment for any of our reporting units.   4260 Table of Contents   Balances of amortizable identifiable intangible assets, excluding goodwill and other non-amortizable intangible assets, are as follows:     Purchased                           Purchased                           Technology   Customer                     Technology   Customer                   Amortizable Intangible Assets   and Patents     Relationships     Tradename     All Other     Total     and Patents     Relationships     Tradename     All Other     Total   As of November 27, 2021                     As of December 2, 2023                     Original cost   $ 115,980     $ 932,644     $ 63,543     $ 11,343     $ 1,123,510     $ 144,763     $ 986,470     $ 58,484     $ 10,911     $ 1,200,628   Accumulated amortization     (62,364 )     (335,143 )     (33,786 )     (5,635 )     (436,928 )     (59,631 )     (382,220 )     (23,099 )     (7,012 )     (471,962 ) Net identifiable intangibles   $ 53,616     $ 597,501     $ 29,757     $ 5,708     $ 686,582     $ 85,132     $ 604,250     $ 35,385     $ 3,899     $ 728,666   Weighted-average useful lives (in years)     13       17       14       12       17       13       16       13       13       16   As of November 28, 2020                     As of December 3, 2022                     Original cost   $ 113,775     $ 933,943     $ 63,266     $ 11,410     $ 1,122,394     $ 118,727     $ 1,004,008     $ 50,324     $ 11,053     $ 1,184,112   Accumulated amortization     (53,216 )     (279,586 )     (29,368 )     (4,775 )   $ (366,945 )     (66,433 )     (388,394 )     (21,401 )     (6,251 )     (482,479 ) Net identifiable intangibles   $ 60,559     $ 654,357     $ 33,898     $ 6,635     $ 755,449     $ 52,294     $ 615,614     $ 28,923     $ 4,802     $ 701,633   Weighted-average useful lives (in years)     13       17       14       12       17       13       17       13       13       16     Amortization expense with respect to amortizable intangible assets was $71,068, $70,591$79,514, $74,383 and $74,091$71,068 in 2021,2023, 20202022 and 20192021, respectively.   Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for the next five fiscal years are as follows:   Fiscal Year   2022     2023     2024     2025     2026     Thereafter     2024     2025     2026     2027     2028     Thereafter   Amortization Expense   $ 68,879     $ 66,056     $ 61,146     $ 58,578     $ 51,773     $ 380,150     $77,288   $77,678   $70,957   $67,652   $67,356   $367,735     The above amortization expense forecast is an estimate. Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions, potential impairment, accelerated amortization or other events.   Non-amortizable intangible assets as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022 were $493$474 and $519,$459, respectively, and relate to trademarks and trade names. The change in non-amortizable assets in 20212023 compared to 20202022 was due to changes in foreign currency exchange rates.   61 Table of Contents   Note 6: Leases We adopted ASU No.2016-02 and related standards (collectively, “ASC 842”), which replaced previous lease accounting guidance, during the first quarter ended February 29,2020 using the modified retrospective method of adoption. As a result of electing this transition method, prior periods have not been restated. The adoption of ASC 842 resulted in the recording of right-of-use assets and associated lease liabilities of approximately $28,254 each as of the first day of the quarter ended February 29,2020. ASC 842 did not have a material impact on our Consolidated Statement of Income. We elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases. We did not elect the hindsight practical expedient.   As a lessee, the company leases office, manufacturing and warehouse space, and equipment. Certain lease agreements include rental payments adjusted annually based on changes in an inflation index. Our leases do not contain material residual value guarantees or material restrictive covenants. Lease expense is recognized on a straight-line basis over the lease term. We determine if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used.   Operating lease and finance lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the company’s incremental borrowing rate. We determine the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region.   Certain leases include one or more options to renew, with terms that can extend the lease term up to five years. We include options to renew the lease as part of the right-of-use lease asset and liability when it is reasonably certain we will exercise the option. In addition, certain leases contain termination options with an associated penalty. In general, the company is not reasonably certain to exercise such options.   For the measurement and classification of lease agreements, we group lease and non-lease components into a single lease component for all underlying asset classes. Variable lease payments primarily include payments for non-lease components, such as maintenance costs, payments for leased assets used beyond their non-cancelable lease term as adjusted for contractual options to terminate or renew, and payments for non-components such as sales tax. Certain leases contain immaterial variable lease payments based on usage.   43 Table of Contents The components of lease expense are as follows:     November 27, 2021     November 28, 2020     December 2, 2023     December 3, 2022   Operating lease cost   $ 11,958     $ 12,581     $ 13,883     $ 12,026   Finance lease cost:                     Amortization of assets1   673   0   Interest on lease liabilities1   110   0   Amortization of assets   2,045   1,535   Interest on lease liabilities   1,077   261   Variable lease cost     5,990       4,024       8,554       6,481   Total net lease cost   $ 18,731     $ 16,605     $ 25,559     $ 20,303     162 In 2020, finance leases were not material for disclosure. Table of Contents Supplemental balance sheet information related to leases is as follows:     Location on                   Balance Sheet   November 27, 2021     November 28, 2020   Operating leases:                   Operating lease right-of-use assets Other assets   $ 32,744     $ 28,445   Current operating lease liabilities Other accrued expenses     8,921       8,706   Noncurrent operating lease liabilities Other liabilities     24,061       19,498   Total operating lease liabilities   $ 32,982     $ 28,204                     Finance leases:                   Equipment right-of-use assets1 Property, plant and equipment   $ 9,455       0                     Current obligations of finance leases1 Other accrued expenses   $ 1,109       0   Finance leases, net of current obligations1 Other liabilities     7,548       0   Total finance lease liabilities   $ 8,657       0   1 In 2020, finance leases were not material for disclosure.   Location on                   Balance Sheet   December 2, 2023     December 3, 2022   Operating leases:                   Operating lease right-of-use assets Other assets   $ 47,433     $ 32,440                     Current operating lease liabilities Other accrued expenses     11,277       9,794   Noncurrent operating lease liabilities Other liabilities     36,879       23,421   Total operating lease liabilities   $ 48,156     $ 33,215                     Finance leases:                   Equipment right-of-use assets Property, plant and equipment   $ 11,681     $ 11,150   Building right-of-use asset Property, plant and equipment   $ 14,230     $ -                     Current obligations of finance leases Other accrued expenses   $ 16,184     $ 1,541   Finance leases, net of current obligations Other liabilities     6,534       7,507   Total finance lease liabilities   $ 22,718     $ 9,048     As of November 27, 2021December 2, 2023, the weighted average remaining lease term is 7.29.4 years and the weighted average discount rate is 3.3%4.2% for the company's operating lease agreements. The weighted average remaining lease term is 10.14.0 years and the weighted average discount rate is 2.9%5.9% for the company's finance lease agreements.   Supplemental information related to leases is as follows:       November 27, 2021     November 28, 2020   Cash paid amounts included in the measurement of lease liabilities:                 Operating cash flows from operating leases   $ 15,251     $ 13,216   Operating cash flows from finance leases1     110       0   Financing cash flows from finance leases1     546       0                     Right-of-use assets obtained in exchange for lease liabilities:                 Operating leases   $ 20,030     $ 13,166   Finance leases1     7,630       0   1 In 2020, finance leases were not material for disclosure. Maturities of lease liabilities are as follows:     November 27, 2021   Fiscal Year   Finance Leases     Operating Leases   2022   $ 1,352     $ 9,292   2023     1,254       7,500   2024     1,174       5,313   2025     1,171       4,009   2026     1,165       2,360   2027 and beyond     3,841       7,888   Total     9,957       36,362   Less: amounts representing interest     (1,300 )     (3,380 ) Present value of future minimum payments     8,657       32,982   Less: current obligations     (1,109 )     (8,921 ) Noncurrent lease liabilities   $ 7,548     $ 24,061       December 2, 2023     December 3, 2022   Cash paid amounts included in the measurement of lease liabilities:                 Operating cash flows from operating leases   $ 11,745     $ 15,209   Operating cash flows from finance leases     1,077       261   Financing cash flows from finance leases     268       607                     Non-cash investing and financing activities -                      additions to right-of-use assets obtained from:                 New operating lease liabilities   $ 26,687     $ 15,442   New finance lease liabilities     15,015       1,258     4463 Table of Contents   Rent expense for all operating leases, which includes minimumMaturities of lease payments and other charges suchliabilities are as common area maintenance fees, was $19,618 in 2019.follows:     December 2, 2023   Fiscal Year   Finance Leases     Operating Leases   2024   $ 16,535     $ 12,993   2025     1,618       9,452   2026     1,441       7,085   2027     1,151       5,126   2028     684       3,505   2029 and beyond     2,376       18,869   Total     23,805       57,031   Less: amounts representing interest     (1,087 )     (8,875 ) Present value of future minimum payments     22,718       48,156   Less: current obligations     (16,184 )     (11,277 ) Noncurrent lease liabilities   $ 6,534     $ 36,879       Note 7: Notes Payable, Long-Term Debt and Lines of Credit   Notes Payable   Notes payable were $24,983$1,841 and $16,925$28,860 at November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022, respectively. This amount primarily represents various foreign subsidiaries’ other short-term borrowings that were not part of committed lines. The weighted-average interest rates on short-term borrowings outstanding at December 2, 2023were approximately 10.75 percent, 16.2 percent in 2022 and 8.1 percent in 2021 and 2020 and 8.9 percent in 2019.2021. Fair values of these short-term obligations approximate their carrying values due to their short maturity. There were 0no funds drawn from the short-term committed lines at November 27, 2021December 2, 2023.   64 Table of Contents Long-Term Debt     Weighted-Average     Fiscal Year   Balance at   Balance at     Weighted-Average   Fiscal Year   Balance at   Balance at     Interest Rate at     Maturity   November 27,   November 28,     Interest Rate at   Maturity   December 2,   December 3,   Long-Term Debt   November 27, 2021     Date     2021     2020     December 2, 2023     Date     2023     2022   Revolving credit facility   1.59 %   2024     $ 0     $ 0     6.95 %   2028     $ -     $ 175,500   Term Loan B1   3.64 %   2024     1,001,150     1,157,650   Public Notes2   4.00 %   2027     300,000     300,000   Term Loan A1   6.95 %   2028   487,500   -   Term Loan B2   7.60 %   2030     796,000     1,001,150   Public Notes3   4.25 %   2028     300,000     300,000     4.00 %   2027     300,000     300,000   Public Notes4   4.25 %   2028     300,000     300,000   Other, including debt issuance cost and discount                 (9,671 )     (665 )                 (46,910 )     (40,394 ) Total debt               $ 1,591,479     $ 1,756,985                 $ 1,836,590     $ 1,736,256                       Less: current maturities                 -       -                   -       -   Total long-term debt, excluding current maturities               $ 1,591,479     $ 1,756,985                 $ 1,836,590     $ 1,736,256     1 Term Loan B,A, due on October 20, 2024,February 15, 2028, $2,150,000500,000 variable rate at the London Interbank OfferedSecured Overnight Financing Rate (LIBOR) plus 2.00("SOFR") plus an adjustment of 0.10 percent (2.09and an interest rate spread of 1.50 percent based on a leverage grid (6.95 percent at November 27, 2021December 2, 2023); $800,000 swapped to various fixed rates as detailed below..   2 Term Loan B, due on February 15, 2030, $800,000 variable rate at the SOFR plus 2.25 percent with a SOFR floor of 0.50 percent (7.60 percent at December 2, 2023). 3 Public Notes, due February 15, 2027, $300,000 4.00 percent fixed.   34 Public Notes, due October 15, 2028, $300,000 4.25 percent fixed; swapped to a floating rate as detailed below.   On February 15, 2023, we entered into a credit agreement with a consortium of financial institutions (“Second Amended and Restated Credit Agreement”) which replaces our existing revolving credit agreement under the amended and restated revolving credit agreement dated October 20, 2020 and also replaces our secured term loan credit agreement dated October 20, 2017. The Second Amended and Restated Credit Agreement provides for a new senior secured term loan A facility in an aggregate principal amount of $500,000 (“Term Loan A”), a new senior secured term loan B facility in an aggregate principal amount of $800,000 (“Term Loan B”) and amendments to and extension of our existing senior secured revolving credit facility with an aggregate commitment in the amount of $700,000 (“Revolving Credit Facility”). A portion of the proceeds of the combined facilities, (the “Credit Facilities”) was used to pay off the existing term loan and revolver. Additionally, we wrote off $2,689 of debt issuance costs related to this payoff which was recorded in interest expense for the year ended December 2, 2023. The Credit Facilities will generally be used to finance working capital needs and acquisitions, and for general corporate purposes. All of our obligations under the Credit Facilities are secured by a first-lien security interest in substantially all personal property and material real property of the Company and its material U.S. subsidiaries, and are guaranteed by all of the Company’s material U.S. subsidiaries. 65 Table of Contents Term Loans   OnInterest on Term Loan A is payable at a rate of SOFR plus an adjustment of 0.10 percent and an interest rate spread of 1.50 percent (6.95 percent at October 20, 2017, December 2, 2023we entered into). The interest rate spread is based on a secured term loan credit agreement (“leverage grid. Term Loan B Credit Agreement”) with a consortium of financial institutions under which we established a $2,150,000 term loan (“Term Loan B”) that we used to repay existing indebtedness, finance working capital needs, finance acquisitions and for general corporate purposes. The Term Loan B Credit Agreement is secured by a security interest in substantially all of the personal property assets of the company and each Guarantor, including 100% of the equity interests in certain domestic subsidiaries and 65% of the equity interests ofA matures on firstFebruary 15, 2028. -tier foreign subsidiaries together with certain domestic material real property. At November 27, 2021December 2, 2023, a balance of $1,001,150$487,500 was drawnoutstanding on the Term Loan A. On August 16, 2023, we amended the Term Loan B agreement to an interest rate of SOFR plus an interest rate spread of 2.25 percent with a SOFR floor of 0.50 percent (7.60 percent at December 2, 2023). Term Loan B matures on February 15, 2030. At December 2, 2023, a balance of $796,000 was outstanding on the Term Loan B.  The interest rate on the Term Loan B is payable at the LIBOR rate plus 2.00 percent (2.09 percent at November 27, 2021). The interest rate is based on a leverage grid. The Term Loan B Credit Agreement expires on October 20, 2024.    On February 27, 2018,January 12, 2023, we entered into an interest rate swap agreement to convert $200,000$400,000 of our Term Loan Bvariable rate 1-month LIBOR rate debt to a fixed rate of 4.5893.6895 percent. DuringOn February 28, 2023, after entering into the second quarter of 2021,Second Amended and Restated Credit Agreement, we settled a portion of this interest rate swap as the debt underlying this swap was less than the swap value due to debt paydown. We settled the ineffective portion ofamended the interest rate swap by making a cash payment of $378agreement to 1-month SOFR and recorded that payment to interest expense in our Consolidated Statements of Income during the second quarter of 2021. On October 20, 2017, we entered into interest rate swap agreements to convert $1,050,000, which was amortized down to $800,000 on October 20, 2021, of our Term Loan B to a fixed interest rate of 4.0275%3.7260 in accordance with the practical expedients included in ASC 848,Reference Rate Reform. See Note 12 for further discussion of thesethis interest rate swaps.swap.   We are subjectOn March 16, 2023, we entered into an interest rate swap agreement to mandatory prepayments in theconvert $300,000 of our first1 quarter-month SOFR rate debt to a fixed rate of each fiscal year equal to 50% of Excess Cash Flow, as defined in the Term Loan B Credit Agreement, of the prior fiscal year less any voluntary prepayments made during that fiscal year. The Excess Cash Flow Percentage shall be reduced to 25% when our Secured Leverage Ratio is below 4.25:1.003.7210 percent and to 0% whenconvert $100,000 of our Secured Leverage Ratio is below 3.75:1.00. The prepayment1-month SOFR rate debt to a fixed rate of 3.8990 percent. See Note 12 for the 2021 measurement period was satisfied through amounts prepaid during 2021. We have estimated the 2022 prepayment to be zero.further discussion of this interest rate swap.   Public Notes   On February 14, 2017, we issued $300,000 aggregate principal of 10-year unsecured public notes (“10-year Public Notes”) due February 15, 2027 with a fixed coupon of 4.00 percent. Proceeds from this debt issuance were used to repay $138,000 outstanding under the revolving credit facility at that time and prepay $158,750 of our Term Loan A.A under the credit agreement at that time. On February 14, 2017, we entered into an interest rate swap agreement to convert $150,000 of the 10-year Public Notes to a variable interest rate of 1-month LIBOR plus 1.86 percent and on May 1, 2020, we terminated the swap. See Note 12 for further discussion of this interest rate swap.   45 Table of Contents On October 20, 2020, we issued $300,000 aggregate principal of 8-year unsecured public notes (“8-year Public Notes”) due October 15, 2028 with a fixed coupon of 4.25 percent. Proceeds from this debt issuance were used to prepay $300,000 of our Term Loan B.B at that time. On February 12, 2021, we entered into interest rate swap agreements to convert our 8-year Public Notes to a variable interest rate of 1-month LIBOR plus 3.28 percent. See Note 12 for further discussion of these interest rate swaps.   The Public Notes are senior unsecured obligations of the company and will rank equally with the company’s other unsecured and unsubordinated debt from time to time outstanding.   Fair Value of Long-Term Debt   Long-term debt had an estimated fair value of $1,618,291$1,785,199 and $1,811,562$1,713,257 as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022, respectively. The fair value of long-term debt is based on quoted market prices for the same or similar issues or on the current rates offered for debt of similar maturities. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange.   Long-term Debt Maturities   Maturities of long-term debt for the next five fiscal years are as follows:   Fiscal Year   2022     2023     2024     2025     2026     Thereafter     2024     2025     2026     2027     2028     Thereafter   Long-term debt obligations   $ 0     $ 0     $ 1,001,150     $ 0     $ 0     $ 600,000     $ -     $ -     $ -     $ 300,000     $ 787,500     $ 796,000     66 Table of Contents Revolving Credit Facility   On October 20, 2020, we amended and restated our revolving credit facility. The revolving credit facility is secured along with the Term Loan B Credit Agreement, by a first-priority security interest in substantially all of the personal property assets of the company and each Guarantor, including 100% of the equity interests in certain domestic subsidiaries and 65% of the equity interests of first-tier foreign subsidiaries. Interest on the revolving credit facilityRevolving Credit Facility is payable at the LIBORSOFR plus an adjustment of 0.10 percent and an interest rate spread of 1.50 percent (1.59(6.95 percent at November 27, 2021December 2, 2023). A facility fee of 0.25 percent20 basis points of the unused commitment under the revolving credit facilityRevolving Credit Facility is payable quarterly. The interest ratesrate spread and the facility fee are based on a secured leverage grid. At December 2, 2023, there was no balance outstanding on the Revolving Credit Facility. The revolving credit facilityRevolving Credit Facility matures on July 22, 2024.February 15, 2028.    As of November 27, 2021December 2, 2023, amounts related to our revolving credit facility was as follows:       Committed     Drawn     Unused   Revolving credit facility   $ 400,000     $ 0     $ 391,286       Committed     Drawn     Unused   Revolving credit facility   $ 700,000     $ -     $ 690,032     The secured, multi-currency revolving credit facility can be drawn upon for general corporate purposes up to a maximum of $400,000,$700,000, less issued letters of credit. At November 27, 2021December 2, 2023, letters of credit reduced the available amount under the revolving credit facility by $8,714. $9,968.   Covenants and Other   The securedUnder the Second Amended and Restated Credit Agreement, the Revolving Credit Facility and Term Loan B Credit Agreement and secured revolving credit facilityA are subject to certain covenants and restrictions. For these facilities, we are required to maintain a secured leverage ratio, as defined in the agreement, no greater than 4.75 to 1.00 for our fiscal quarters ending on or prior to June 1, 2024 and then 4.50 to 1.00 thereafter. We are also required to maintain an interest coverage ratio of not less than 2.00 to 1.00. Restrictive covenants include, but are not limited to, limitations on secured and unsecured borrowings, interest coverage, intercompany transfers and investments, third party investments, dispositions of assets, leases, liens, dividends and distributions, and contains a maximum securedtotal debt to trailing twelve months EBITDA requirement. Certain covenants become less restrictive after meeting leverage or other financial ratios. In addition, we cannot be a member of any consolidated group as defined for income tax purposes other than with our subsidiaries. At We are subject to mandatory prepayments in the November 27, 2021 first quarter of each fiscal year equal to 50 percent of Excess Cash Flow, as defined in the Second Amended and Restated Credit Agreement, of the prior fiscal year less any voluntary prepayments made during that fiscal year. The Excess Cash Flow Percentage shall be reduced to 25 percent when our Secured Leverage Ratio is below November 28, 20204.25:1.00 and to 0 percent when our Secured Leverage Ratio is below 3.75:1.00. The principal balance of the Term Loan B loans will be repayable in equal quarterly installments in an aggregate annual amount equal to 1 percent of the original principal amount thereof, with the balance due at maturity on February 15, 2030. The principal balance of the Term Loan A loans will be repayable in quarterly installments as follows: (i) with respect to the firsteight fiscal quarters ended after the effective date of the Second Amended and Restated Credit Agreement, 1.25 percent of the aggregate principal amount of the original principal of the Term Loan A loans, (ii) with respect to the eight fiscal quarters ended after the end of the period set forth in the preceding clause (i), all financial covenants were met.1.875 percent of the aggregate principal amount of the original principal amount of the Term Loan A loans, and (iii) thereafter, 2.5 percent of the original principal amount of the Term Loan A loans, with the balance due at maturity on February 15, 2028.   The Indenture under which the Public Notes have been issued contains covenants imposing certain limitations on the ability of the company to incur liens or enter into sales and leaseback transactions. It also provides for customary events of default (subject in certain cases to customary grace and cure periods), which include among other things nonpayment, breach of covenants in the Indenture and certain events of bankruptcy and insolvency. If an event of default occurs and is continuing with respect to the Public Notes, the Trustee or holders of at least 25% in principal amount outstanding of the Public Notes may declare the principal and the accrued and unpaid interest, if any, on all of the outstanding Public Notes to be due and payable. These covenants and events of default are subject to a number of important qualifications, limitations and exceptions that are described in the Indenture.   67 Table of Contents   Note 8: Stockholders' Equity   Preferred Stock   The Board of Directors is authorized to issue up to 10,045,900 shares of preferred stock that may be issued in one or more series and with such stated value and terms as the Board of Directors may determine.   Common Stock   There were 160,000,000 shares of common stock with a par value of $1.00 authorized and 52,777,75354,092,987 and 51,906,66353,676,576 shares issued and outstanding at November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022, respectively.   On April 6, 2017,7, 2022, the Board of Directors authorized a new share repurchase program of up to $200,000$300,000 of our outstanding common shares for a period of up to five years. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reduce our common stock for the par value of the shares with the excess being applied against additional paid-in capital. This authorization replaces the September 30, 2010April 6, 2017 authorization to repurchase shares. We did not repurchase any shares during 2021,2023, 20202022 and 20192021 under our share repurchase program. Up to $187,170$300,000 of our outstanding common shares may still be repurchased under the current share repurchase program.   46 Table of Contents   Common Shares Outstanding   2021     2020     2019   Beginning balance     51,906,663       51,241,190       50,732,796   Stock options exercised     740,731       397,456       378,734   Deferred compensation paid     19,895       118,742       5,354   Restricted units vested     157,945       221,275       197,349   Shares withheld for taxes     (47,481 )     (72,000 )     (73,043 ) Ending balance     52,777,753       51,906,663       51,241,190   Common Shares Outstanding   2023     2022     2021   Beginning balance     53,676,576       52,777,753       51,906,663   Stock options exercised     314,832       657,789       740,731   Deferred compensation paid     102,108       118,429       19,895   Restricted units vested     113,339       172,474       157,945   Shares withheld for taxes     (113,868 )     (49,869 )     (47,481 ) Ending balance     54,092,987       53,676,576       52,777,753       Note 9: Accounting for Share-Based Compensation   Overview   We have various share-based compensation programs, which provide for equity awards including non-qualified stock options, incentive stock options, restricted stock units, performance awards and deferred compensation. These equity awards fall under several plans and are described below.   68 Table of Contents Share-based Compensation Plans   We currently grant stock options and restricted stock units under equity compensation and deferred compensation plans.   Stock options are granted to officers and key employees at prices not less than the fair market value at the date of grant. Non-qualified stock options are generally exercisable beginning one year from the date of grant in cumulative yearly amounts of 33.3 percent. Incentive stock options are based on certain performance-based criteria and are generally exercisable at a stated date when the performance criteria is measured. Stock options generally have a contractual term of 10 years. Options exercised represent newly issued shares.   Restricted stock awards are nonvested stock-based awards that include grants of restricted stock units. Restricted stock awards are independent of option grants and are subject to forfeiture if employment terminates prior to the release of the restrictions. SuchTime-based restricted stock awards generally vest beginning one year from the date of grant or 33.3 percent per year for three years, depending on the grant. Performance-based restricted stock awards vest three years from the date of grant. During the vesting period, ownership of the shares cannot be transferred.   Restricted stock units have dividend equivalent rights equal to the cash dividend paid on restricted stock shares. However, restricted stock units do not have voting rights of common stock and are not considered issued and outstanding upon grant. Restricted stock units become newly issued shares when vested. The dividend equivalent rights for restricted stock units are forfeitable.   We expense the cost, which is the grant date fair market value, of the restricted stock units ratably over the period during which the restrictions lapse. The grant date fair value is our closing stock price on the date of grant.   We are required to recognize compensation expense when an employee is eligible to retire. We consider employees eligible to retire at age 55 and after 10 years of service. Awards granted to retirement-eligible employees are forfeited if the retirement-eligible employees retire prior to 180 days after the grant. Accordingly, the related compensation expense is recognized during the 180 day period for awards granted to retirement-eligible employees or over the period from the grant date to the date retirement eligibility is achieved, if less than the stated vesting period.   2020 Master Incentive Plan   This plan allows for granting of awards to employees.any employee, officer, non-employee director, consultant, independent contractor or advisor providing services to us or any of our affiliates, or any person to whom an offer of employment or engagement with us or any of our affiliates has been made. The plan permits granting of (a) stock options; (b) stock appreciation rights; (c) restricted stock and restricted stock units; (d) performance awards; (e) dividend equivalents; (f) other awards based on our common stock, including shares for amounts employees or non-employee directors deferred under the Key Employee Deferred Compensation Plan.deferred compensation plans. There were 2,253,1573,413,652 common shares available for grant as of November 27, 2021December 2, 2023.   2018 Master Incentive Plan   This plan allows for granting of awards to employees. The plan permits granting of (a) stock options; (b) stock appreciation rights; (c) restricted stock and restricted stock units; (d) performance awards; (e) dividend equivalents; (f) other awards based on our common stock, including shares for amounts employees deferred under the Key Employee Deferred Compensation Plan.   69 Table of Contents Year 2016 Master Incentive Plan   This plan allows for granting of awards to employees. The plan permits granting of (a) stock options; (b) stock appreciation rights; (c) restricted stock awards; (d) performance awards; (e) dividend equivalents; and (f) other awards based on our common stock, including shares for amounts employees deferred under the Key Employee Deferred Compensation Plan.   2009 Directors’ Stock Incentive Plan   This plan permits granting of (a) shares for amounts non-employee directors defer under the Directors’ Deferred Compensation Plan and (b) discretionary grants of restricted stock, stock options, stock appreciation rights, performance awards and other stock awards.         Directors' Deferred Compensation Plan   This plan allows non-employee directors to defer all or a portion of their retainer and meeting fees in a number of investment choices, including units representing shares of our common stock. We provide a 10 percent match on deferred compensation invested in these units. These units are required to be paid out in our common stock.   47 Table of Contents Key Employee Deferred Compensation Plan   This plan allows key employees to defer a portion of their eligible compensation in a number of investment choices, including units representing shares of company common stock. We provide a 10 percent match on deferred compensation invested in these units.   Grant-Date Fair Value   We use the Black-Scholes option-pricing model to calculate the grant-date fair value of stock option awards. The fair value of options granted during 2021,2023, 20202022 and 20192021 were calculated using the following assumptions:     2021     2020     2019     2023     2022     2021   Expected life (in years)   5.00     5.00     4.75     5.00     5.00     5.00   Weighted-average expected volatility   32.50 %   24.32 %   24.26 %   35.28 %   33.35 %   32.50 % Expected volatility range   32.48% - 32.94%     24.18% - 30.99%     23.88% - 24.76%     35.09-35.69 %   33.33-34.34 %   32.48% - 32.94%   Risk-free interest rate   0.39% - 1.20%     0.21% - 1.51%     1.34% - 2.55%     3.48-4.72 %   1.53-4.06 %   0.39% - 1.20%   Weighted-average expected dividend   1.26 %   1.38 %   1.40 %   1.20 %   0.95 %   1.26 % Expected dividend yield range   0.92% - 1.27%     1.35% - 2.53%     1.25% - 1.45%     1.13-1.22 %   0.94-1.23 %   0.92% - 1.27%   Weighted-average fair value of grants   $ 13.29     $ 9.63     $ 9.76     $ 22.41     $ 20.91     $ 13.29     Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation. We believe that this historical data is currently the best estimate of the expected term of a new option. We use a weighted-average expected life for all awards.   Expected volatility – Volatility is calculated using our stock’s historical volatility for the same period of time as the expected life. We have no reason to believe that its future volatility will differ from the past.   Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the same period of time as the expected life.   Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the averageclosing stock price.price on the date of grant.   Expense   We use the straight-line attribution method to recognize share-based compensation expense for option awards and restricted stock units with graded and cliff vesting. Incentive stock options and performance awards are based on certain performance-based metrics and the expense is adjusted quarterly, based on our projections of the achievement of those metrics. The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. The expense is recognized over the requisite service period, which for us is the period between the grant date and the earlier of the award’s stated vesting term or the date the employee is eligible for early vesting based on the terms of the plans.   70 Table of Contents Total share-based compensation expense was $22,366, $16,914$19,911, $24,368 and $24,003$22,366 for 2021,2023, 20202022 and 20192021, respectively. All share-based compensation was recorded as SG&A expense.   As of November 27, 2021December 2, 2023, $7,510$7,526 of unrecognized compensation costs related to unvested stock option awards is expected to be recognized over a weighted-average period of 0.9 years. Unrecognized compensation costs related to unvested restricted stock units was $10,205$8,940 which is expected to be recognized over a weighted-average period of 0.90.68 years.   Stock Option Activity   The stock option activity for the years ended November 27, 2021,December 2, 2023, November 28, 2020,December 3, 2022, and November 30, 201927, 2021 is summarized below:           Weighted-           Weighted-           Average           Average     Options     Exercise Price     Options     Exercise Price   Outstanding at December 1, 2018   4,466,106     $ 44.72   Granted   1,020,246     45.53   Exercised   (378,734 )   28.74   Forfeited or cancelled     (47,308 )     48.90   Outstanding at November 30, 2019   5,060,310     $ 46.04   Granted   1,052,968     47.70   Exercised   (397,456 )   31.00   Forfeited or cancelled     (169,907 )     49.11   Outstanding at November 28, 2020   5,545,915     $ 47.34     5,545,915     $ 47.34   Granted   1,237,094     53.33     1,237,094     53.33   Exercised   (740,731 )   43.64     (740,731 )   43.64   Forfeited or cancelled     (1,069,886 )     56.33       (1,069,886 )     56.33   Outstanding at November 27, 2021     4,972,392     $ 47.45     4,972,392     $ 47.45   Granted   549,458     72.75   Exercised   (657,789 )   45.79   Forfeited or cancelled     (40,991 )     61.31   Outstanding at December 3, 2022   4,823,070     $ 50.42   Granted   471,975     68.27   Exercised   (314,832 )   46.43   Forfeited or cancelled     (38,328 )     63.52   Outstanding at December 2, 2023     4,941,885     $ 52.28     The fair value of options granted during 2021,2023, 20202022 and 20192021 was $17,250, $10,132$10,577, $5,400 and $9,956,$17,250, respectively. Total intrinsic value of options exercised during 2021,2023, 20202022 and 20192021 was $15,261, $6,563$8,015, $16,877 and $7,590,$15,261, respectively. For options outstanding at November 27, 2021December 2, 2023, the weighted-average remaining contractual life was 6.55.6 years and the aggregate intrinsic value was $131,515.$121,640. There were 3,072,7863,926,049 options exercisable at November 27, 2021December 2, 2023, with a weighted-average remaining contractual life of 5.24.9 years and an aggregate intrinsic value of $85,685.$108,853. Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised. Proceeds received from option exercises during the year ended November 27, 2021,December 2, 2023, November 28, 2020,December 3, 2022, and November 30, 201927, 2021 were $32,325, $12,321$14,619, $30,122 and $10,885,$32,325, respectively. The company’s actual tax benefits realized for the tax deductions related to the exercise of stock options for 2021,2023, 20202022 and 20192021 was $3,874, $1,278$1,885, $3,687 and $1,298,$3,874, respectively.   4871 Table of Contents   Restricted Stock Unit Activity   The nonvested restricted stock unit activity for the years ended November 27, 2021,December 2, 2023, November 28, 2020,December 3, 2022, and November 30, 201927, 2021 is summarized below:                 Weighted-                 Weighted-           Weighted-   Average           Weighted-   Average           Average   Remaining           Average   Remaining           Grant   Contractual           Grant   Contractual           Date Fair   Life           Date Fair   Life     Units     Value     (in Years)     Units     Value     (in Years)   Nonvested at December 1, 2018   414,353     $ 47.45     1.0   Granted   302,132     44.29     2.2   Vested   (197,349 )   45.45     -   Forfeited     (31,139 )     43.37       0.4   Nonvested at November 30, 2019   487,997     $ 46.56     0.8   Granted   216,293     46.39     3.4   Vested   (221,275 )   46.83     -   Forfeited     (50,666 )     47.55       0.1   Nonvested at November 28, 2020   432,349     $ 46.22     0.8     432,349     $ 46.22     0.8   Granted   356,779     54.49     3.2     356,779     54.49     3.2   Vested   (157,945 )   48.69     -     (157,945 )   48.69     -   Forfeited     (78,818 )     47.79       0.8       (78,818 )     47.79       0.8   Nonvested at November 27, 2021     552,365     $ 50.63       1.9     $ 552,365     $ 50.63     1.9   Granted   179,603     67.92     3.2   Vested   (172,474 )   46.74     -   Forfeited     (68,374 )     45.83       0.1   Nonvested at December 3, 2022   $ 491,120     $ 58.98     0.7   Granted   187,185     63.32     2.2   Vested   (113,339 )   53.83     -   Forfeited     (36,276 )     44.48       0.2   Nonvested at December 2, 2023   $ 528,690     $ 62.61       0.7     Total fair value of restricted stock units vested during 20212023, 20202022, and 20192021 was $7,691, $10,362$6,101, $8,062 and $8,970,$7,691, respectively. The total fair value of nonvested restricted stock at November 27, 2021December 2, 2023 was $27,966.$33,101.   We indirectly repurchased 50,799, 70,38037,715, 55,081 and 73,04350,799 shares during 2021,2023, 20202022 and 20192021, respectively, through a net-settlement feature in connection with the statutory minimum tax withholding related to vesting of restricted stock. The company’s actual tax benefits realized for the tax deductions related to the restricted stock vested for 2021,2023, 20202022 and 20192021 was $1,439, $2,136$1,396, $2,569 and $1,574,$1,439, respectively.   Deferred Compensation Activity   Deferred compensation units are fully vested at the date of contribution. The deferred compensation units outstanding for the years ended November 27, 2021,December 2, 2023, November 28, 2020,December 3, 2022, and November 30, 201927, 2021 is summarized below:     Non-employee               Non-employee               Directors     Employees     Total     Directors     Employees     Total   Units outstanding December 1, 2018   479,787     29,735     509,522   Participant contributions   22,153     11,166     33,319   Company match contributions1   23,720     1,117     24,837   Payouts     0     (5,354 )   (5,354 ) Units outstanding November 30, 2019   525,660     36,664     562,324   Participant contributions   18,008     13,814     31,822   Company match contributions1   23,033     1,381     24,414   Payouts     (111,436 )   (7,306 )   (118,742 ) Units outstanding November 28, 2020   455,265     44,553     499,818     455,265     44,553     499,818   Participant contributions   13,036     10,487     23,523     13,036     10,487     23,523   Company match contributions1   20,118     1,049     21,167     20,118     1,049     21,167   Payouts     (19,895 )   (7,728 )   (27,623 )     (19,895 )   (7,728 )   (27,623 ) Units outstanding November 27, 2021     468,524     48,361     516,885     468,524     48,361     516,885   Participant contributions   89,054     12,985     102,039   Company match contributions1   26,843     1,299     28,142   Payouts     (118,429 )   (6,073 )   (124,502 ) Units outstanding December 3, 2022   465,992     56,572     522,564   Participant contributions   13,187     12,219     25,406   Company match contributions1   18,899     1,222     20,121   Payouts     (102,108 )   (6,826 )   (108,934 ) Units outstanding December 2, 2023     395,970     63,187     459,157     1 The non-employee directors’ company match includes 18,814, 21,32317,580, 17,937 and 21,50418,814 deferred compensation units paid as discretionary awards to all non-employee directors in 2021,2023, 20202022 and 20192021, respectively.   72 Table of Contents The fair value of non-employee directors’ company matches for 2021,2023, 20202022 and 20192021 was $163, $128$172, $172 and $167,$163, respectively. The fair value of the non-employee directors’ discretionary award was $1,200, $1,080 and $1,215 $920, $1,035 for 20212023, 20202022 and 20192021, respectively. The fair value of employee company matches was $61, $56$79, $86 and $41$61 for 2021,2023, 20202022 and 20192021, respectively.     Note 10: Pension and Postretirement Benefits   Defined Contribution Plan   All U.S. employees have the option of contributing up to 75 percent of their pre-tax earnings to a 401(k) plan, subject to IRS limitations. We match up to the first 4 percent of each employee's pre-tax earnings, based on the employee’s contributions. All U.S. employees are eligible for a separate annual non-discretionary retirement contribution to the 401(k) plan of 1 percent of pay, that is invested based on the election of the individual participant. The 1 percent contribution is in addition to our 4 percent matching contribution described above and is in lieu of participation in our defined benefit pension plan. The total contribution to the 401(k) plan for 20212023 was $12,488$14,221 which included the cost of the 4 percent company match of $8,698$9,853 and the additional 1 percent contribution of $3,790.$4,368. The total contributions to the 401(k) plan were $10,764$12,113 and $10,784$12,488 in 20202022 and 20192021, respectively.   49 Table of Contents All U.S. employees are eligible to receive an annual discretionary non-elective contribution to the 401(k) plan of up to 3 percent based on achieving the company’s earnings per share target. This discretionary contribution is in addition to the contributions described above. AThere was no discretionary non-elective contribution for 2023 and a discretionary non-elective contribution of $5,205$950 was madeaccrued for 2021 and no such contribution was made for 20202022.   The defined contribution plan liability recorded in the Consolidated Balance Sheets was $10,494$11,626 and $9,819$12,263 in 20212023 and 20202022, respectively, for the U.S. Plan and several statutorily required non-U.S. Plans.   Defined Benefit Plans   Noncontributory defined benefit pension plans cover all U.S. employees employed prior to January 1, 2007. Benefits for these plans are based primarily on each employee’s years of service and average compensation. During 2011, we made significant changes to our U.S. pension plan. The changes included: benefits under the plan were locked-in using service and salary as of May 31, 2011, participants no longer earn benefits for future service and salary as they had in the past, affected participants receive a three percent increase to the locked-in benefit for every year they continue to work for us and we are making a retirement contribution of three percent of eligible compensation to the 401(k) Plan for those participants.  The funding policy is consistent with the funding requirements of federal law and regulations. Plan assets consist principally of listed equity securities and bonds. During 2020, we amended the U.S. pension plan to add a program for eligible employees to take a lump sum distribution. A total of $6,673 and $10,939 wasNo amounts were paid during 2021 and 2020, respectively, as distributions under this program.program in 2023 or 2022. Other U.S. postretirement benefits are funded through a Voluntary Employees' Beneficiaries Association Trust.   73 Table of Contents Health care and life insurance benefits are provided for eligible retired employees and their eligible dependents. These benefits are provided through various insurance companies and health care providers. Costs are accrued during the years the employee renders the necessary service.   Certain non-U.S. subsidiaries provide pension benefits for their employees consistent with local practices and regulations. These plans are primarily defined benefit plans covering substantially all employees upon completion of a specified period of service. Benefits for these plans are generally based on years of service and annual compensation.   Following is a reconciliation of the beginning and ending balances of the benefit obligation and fair value of plan assets as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022:     Pension Benefits     Other Postretirement     Pension Benefits   Other Postretirement     U.S. Plans     Non-U.S. Plans     Benefits     U.S. Plans   Non-U.S. Plans   Benefits     2021     2020     2021     2020     2021     2020     2023   2022   2023   2022   2023   2022   Change in projected benefit obligation                                                                         Benefit obligation at beginning of year   $ 388,530     $ 380,388     $ 250,561     $ 234,542     $ 39,075     $ 39,256     $ 269,874     $ 361,212     $ 154,850     $ 238,400     $ 24,173     $ 31,262   Service cost   0     0     3,280     2,950     21     73     -     -     1,670     2,765     -     -   Interest cost   9,299     11,738     2,941     3,158     822     1,135     13,901     9,653     5,726     2,893     1,205     748   Participant contributions   0     0     0     0     365     226     -     -     -     -     232     296   Actuarial (gain)/loss1   (9,177 )   27,377     (3,630 )   4,350     (6,115 )   1,327   Other   0     0     0     0     0     0   Actuarial gain1   (7,298 )   (80,296 )   (12,435 )   (57,159 )   (611 )   (5,395 ) Curtailments   0     0     0     14     0     0     -     -     -     231     -     -   Settlement payments   (6,673 )   (10,939 )   996     (273 )   0     0     (141 )   (200 )   (252 )   (7,988 )   -     -   Benefits paid   (20,767 )   (20,034 )   (8,578 )   (8,628 )   (2,906 )   (2,942 )   (20,946 )   (20,495 )   (7,663 )   (8,370 )   (2,866 )   (2,738 ) Foreign currency translation effect     0       0       (7,170 )     14,448       0       0       -       -       4,900       (15,922 )     -       -   Benefit obligation at end of year   361,212     388,530     238,400     250,561     31,262     39,075     255,390     269,874     146,796     154,850     22,133     24,173                                                       Change in plan assets                                                                         Fair value of plan assets at beginning of year   398,403     383,527     202,242     185,331     109,056     94,474     326,786     409,811     141,908     216,623     120,782     135,701   Actual return on plan assets   37,466     44,365     25,204     13,155     28,716     15,673     12,811     (63,562 )   (5,545 )   (45,328 )   15,160     (12,613 ) Employer contributions   1,382     1,677     1,989     2,177     470     1,625     1,228     1,232     1,744     1,640     145     136   Participant contributions   0     0     0     0     365     226     -     -     -     -     232     296   Other   0     0     996     0     0     0   Settlement payments   (6,673 )   (10,939 )   0     0     0     0     (141 )   (200 )   -     -     -     -   Benefits paid2   (20,767 )   (20,227 )   (8,578 )   (8,628 )   (2,906 )   (2,942 )   (20,946 )   (20,495 )   (7,663 )   (8,369 )   (2,866 )   (2,738 ) Foreign currency translation effect     0       0       (5,230 )     10,207       0       0       -       -       4,178       (22,658 )     -       -   Fair value of plan assets at end of year   409,811     398,403     216,623     202,242     135,701     109,056     319,738     326,786     134,622     141,908     133,453     120,782   Plan assets in excess of (less than) benefit obligation as of year end   $ 48,599     $ 9,873     $ (21,776 )   $ (48,688 )   $ 104,439     $ 69,981     $ 64,348     $ 56,912     $ (12,174 )   $ (12,942 )   $ 111,320     $ 96,608     1 Actuarial lossgain in 20212023 and actuarial loss in 20202022 for the U.S. Plans is primarily due to assumption changes. Actuarial lossgain in 20212023 and actuarial loss in 20202022 for the Non-U.S. Plans are due to both assumption changes and plan experience. 2 Amount excludes benefit payments made from sources other than plan assets.   Amounts in accumulated other comprehensive income (loss) that have not been recognized as components of net periodic benefit cost   Pension Benefits     Other Postretirement       U.S. Plans     Non-U.S. Plans     Benefits       2021     2020     2021     2020     2021     2020   Unrecognized actuarial loss   $ 129,198     $ 147,917     $ 64,782     $ 87,368     $ (30,278 )   $ (4,318 ) Unrecognized prior service (benefit) cost     (3 )     (6 )     1,390       1,453       0       0   Ending balance   $ 129,195     $ 147,911     $ 66,172     $ 88,821     $ (30,278 )   $ (4,318 ) 5074 Table of Contents       Pension Benefits     Other Postretirement       U.S. Plans     Non-U.S. Plans     Benefits       2021     2020     2021     2020     2021     2020   Statement of financial position as of fiscal year-end                                                 Non-current assets   $ 66,157     $ 30,672     $ 24,772     $ 12,534     $ 107,323     $ 73,137   Accrued benefit cost                                                 Current liabilities     (1,342 )     (1,467 )     (1,795 )     (1,701 )     (227 )     (226 ) Non-current liabilities     (16,216 )     (19,332 )     (44,753 )     (59,521 )     (2,657 )     (2,930 ) Ending balance   $ 48,599     $ 9,873     $ (21,776 )   $ (48,688 )   $ 104,439     $ 69,981   Amounts in accumulated other comprehensive income (loss) that have not been recognized as components of net periodic benefit cost   Pension Benefits     Other Postretirement       U.S. Plans     Non-U.S. Plans     Benefits       2023     2022     2023     2022     2023     2022   Unrecognized actuarial loss (gain)   $ 143,522     $ 137,351     $ 49,128     $ 49,306     $ (14,442 )   $ (8,530 ) Unrecognized prior service cost     -       -       1,196       1,219       -       -   Ending balance   $ 143,522     $ 137,351     $ 50,324     $ 50,525     $ (14,442 )   $ (8,530 )     Pension Benefits     Other Postretirement       U.S. Plans     Non-U.S. Plans     Benefits       2023     2022     2023     2022     2023     2022   Statement of financial position as of fiscal year-end                                                 Non-current assets   $ 76,677     $ 69,826     $ 15,635     $ 16,790     $ 113,431     $ 98,848   Accrued benefit cost                                                 Current liabilities     (1,239 )     (1,248 )     (1,464 )     (1,727 )     (218 )     (218 ) Non-current liabilities     (11,089 )     (11,666 )     (26,345 )     (28,006 )     (1,893 )     (2,021 ) Ending balance   $ 64,349     $ 56,912     $ (12,174 )   $ (12,943 )   $ 111,320     $ 96,609     The accumulated benefit obligation of the U.S. pension and other postretirement plans was $384,124$273,197 at November 27, 2021December 2, 2023 and $418,019$289,049 at November 28, 2020December 3, 2022. The accumulated benefit obligation of the non-U.S. pension plans was $228,713$141,402 at November 27, 2021December 2, 2023 and $239,572$148,927 at November 28, 2020December 3, 2022.   The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022:     Pension Benefits and Other Postretirement Benefits     Pension Benefits and Other Postretirement Benefits     U.S. Plans     Non-U.S. Plans     U.S. Plans   Non-U.S. Plans     2021     2020     2021     2020     2023   2022   2023   2022   Accumulated benefit obligation   $ 17,558     $ 26,241     $ 48,912     $ 134,472     $ 12,329     $ 12,914     $ 35,034     $ 36,820   Fair value of plan assets   0     5,441     11,350     84,239     -     -     9,700     9,617     The following amounts relate to pension plans with projected benefit obligations in excess of plan assets as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022:     Pension Benefits and Other Postretirement Benefits     Pension Benefits and Other Postretirement Benefits     U.S. Plans     Non-U.S. Plans     U.S. Plans   Non-U.S. Plans     2021     2020     2021     2020     2023   2022   2023   2022   Projected benefit obligation   $ 17,558     $ 26,241     $ 131,174     $ 145,461     $ 12,329     $ 12,914     $ 37,510     $ 39,350   Fair value of plan assets   0     5,441     $ 84,626     84,239     -     -     $ 9,700     9,617     75 Table of Contents Information about the expected cash flows is as follows:       Pension Benefits     Other       Pension Benefits     Other             Non-U.S.   Postretirement             Non-U.S.   Postretirement       U.S. Plans     Plans     Benefits       U.S. Plans   Plans   Benefits   Employer contributions                                     2022     $ 0     $ 34     $ 0   2024     $ -     $ 5     $ -   Expected benefit payments                                     2022     21,131     8,704     2,982   2023     21,280     7,933     2,851   2024     21,283     8,285     2,730       21,330     8,387     2,723   2025     21,391     8,457     2,607       21,351     8,470     2,622   2026-2031     125,388     54,038     12,948   2026     21,251     8,651     2,512   2027       21,168       8,948       2,382   2028- 2033     121,219     53,787     11,487     The components of our net period defined benefit pension and postretirement benefit costs other than service cost are presented as non-operating expenses and service cost is presented in operating expenses.   Components of net periodic benefit cost and other supplemental information for the years ended November 27, 2021,December 2, 2023, November 28, 2020,December 3, 2022, and November 30, 201927, 2021 are as follows:     Pension Benefits   Other     Pension Benefits   Other     U.S. Plans   Non-U.S. Plans   Postretirement Benefits     U.S. Plans   Non-U.S. Plans   Postretirement Benefits   Net periodic cost (benefit)   2021   2020   2019   2021   2020   2019   2021   2020   2019     2023   2022   2021   2023   2022   2021   2023   2022   2021   Service cost   $ 0     $ 0     $ 4     $ 3,280     $ 2,950     $ 2,237     $ 21     $ 73     $ 98     $ -     $ -     $ -     $ 1,670     $ 2,765     $ 3,280     $ -     $ -     $ 21   Interest cost   9,299     11,738     14,691     2,941     3,158     4,678     822     1,135     1,550     13,901     9,653     9,299     5,726     2,893     2,941     1,205     748     822   Expected return on assets   (31,123 )   (25,758 )   (25,305 )   (12,348 )   (11,312 )   (10,224 )   (8,945 )   (7,976 )   (7,013 )   (28,821 )   (29,018 )   (31,123 )   (7,027 )   (6,465 )   (12,348 )   (9,859 )   (11,084 )   (8,945 ) Amortization:                                                                             Prior service cost (benefit)   (3 )   (3 )   13     69     64     64     0     0     0   Actuarial loss   3,198     7,195     4,677     4,053     3,829     3,114     73     62     33   Curtailment loss   0     0     0     0     14     83     0     0     0   Prior service (benefit) cost   -     (3 )   (3 )   62     63     69     -     -     -   Actuarial loss (gain)   2,541     4,132     3,198     1,993     2,411     4,053     -     (3,445 )   73   Settlement charge     0     0     0     0     67     0     0     0     0       -       -       -       19       3,329       -       -       -       -   Net periodic (benefit) cost   $ (18,629 )   $ (6,828 )   $ (5,920 )   $ (2,005 )   $ (1,230 )   $ (48 )   $ (8,029 )   $ (6,706 )   $ (5,332 )   $ (12,379 )   $ (15,237 )   $ (18,629 )   $ 2,443     $ 4,996     $ (2,005 )   $ (8,654 )   $ (13,781 )   $ (8,029 )   51 Table of Contents       Pension Benefits     Other       U.S. Plans     Non-U.S. Plans     Postretirement Benefits   Weighted-average assumptions used to determine benefit obligations   2021     2020     2019     2021     2020     2019     2021     2020     2019   Discount rate     2.75 %     2.50 %     3.17 %     1.27 %     1.16 %     1.35 %     2.51 %     2.19 %     3.00 % Rate of compensation increase1     0.00 %     4.50 %     4.50 %     1.48 %     1.74 %     1.71 %     N/A       N/A       N/A       Pension Benefits     Other       U.S. Plans     Non-U.S. Plans     Postretirement Benefits   Weighted-average assumptions used to determine benefit obligations   2023     2022     2021     2023     2022     2021     2023     2022     2021   Discount rate     5.66 %     5.36 %     2.75 %     4.37 %     3.70 %     1.27 %     5.61 %     5.29 %     2.51 % Rate of compensation increase1     0.00 %     0.00 %     0.00 %     1.82 %     1.83 %     1.48 %     N/A       N/A       N/A     Weighted-average assumptions used to determine net costs for years ended   2021     2020     2019     2021     2020     2019     2021     2020     2019     2023   2022   2021   2023   2022   2021   2023   2022   2021   Discount rate   2.50 %   3.17 %   4.50 %   1.19 %   1.34 %   2.30 %   2.19 %   3.00 %   4.37 %   5.36 %   2.75 %   2.50 %   3.71 %   1.29 %   1.19 %   5.29 %   2.51 %   2.19 % Expected return on plan assets   7.24 %   7.49 %   7.49 %   6.15 %   6.23 %   6.21 %   8.25 %   8.50 %   8.50 %   7.75 %   7.00 %   7.24 %   5.02 %   3.49 %   6.15 %   8.25 %   8.25 %   8.25 % Rate of compensation increase1   0.00 %   4.50 %   4.50 %   1.67 %   1.74 %   1.71 %   0.00 %   N/A     N/A     0.00 %   0.00 %   0.00 %   1.82 %   1.68 %   1.67 %   0.00 %   0.00 %   0.00 %   1 Under the U.S. pension plan, the compensation amount was locked-in as of May 31, 2011 and thus the benefit no longer includes compensation increases. The 4.50 percent rate for 2020 and 2019 is for the supplemental executive retirement plan only; for 2021, there is 0 compensation increase as subsequent to November 27, 2021, there were no active employees in the supplemental executive retirement plan.   76 Table of Contents The discount rate assumption is determined using an actuarial yield curve approach, which results in a discount rate that reflects the characteristics of the plan. The approach identifies a broad population of corporate bonds that meet the quality and size criteria for the particular plan. We use this approach rather than a specific index that has a certain set of bonds that may or may not be representative of the characteristics of our particular plan. A higher discount rate reduces the present value of the pension obligations. The discount rate for the U.S. pension plan was 5.66 percent at December 2, 2023, 5.36 percent at December 3, 2022 and 2.76 percent at November 27, 2021, 2.53 percent at November 28, 2020 and 3.19 percent at November 30, 2019. Net periodic pension cost for a given fiscal year is based on assumptions developed at the end of the previous fiscal year. A discount rate change of 0.5 percentage points at November 27, 2021December 2, 2023 would impact U.S. pension and other postretirement plan (income) expense by approximately $63$149 (pre-tax) in fiscal 2021.2024. Discount rates for non-U.S. plans are determined in a manner consistent with the U.S. plans.   For the U.S. pension plan, we adopted the Adjusted Pri-2012 base mortality table projected generationally using scale MP-2021.   The expected long-term rate of return on plan assets assumption for the U.S. pension plan was 7.75 percent in 2023, 7.00 percent in 2022 and 7.25 percent in 2021 and 7.50 percent in 2020 and 2019. Our expected long-term rate of return on U.S. plan assets was based on our target asset allocation assumption of 6055 percent equities and 4045 percent fixed-income. Management, in conjunction with our external financial advisors, determines the expected long-term rate of return on plan assets by considering the expected future returns and volatility levels for each asset class that are based on historical returns and forward-looking observations. For 20212023, the expected long-term rate of return on the target equities allocation was 8.008.50 percent and the expected long-term rate of return on the target fixed-income allocation was 3.905.60 percent. The total plan rate of return assumption included an estimate of the effect of diversification and the plan expense. A change of 0.5 percentage points for the expected return on assets assumption would impact U.S. net pension and other postretirement plan expense by approximately $2,728$2,266 (pre-tax).   Management, in conjunction with our external financial advisors, uses the actual historical rates of return of the asset categories to assess the reasonableness of the expected long-term rate of return on plan assets.   The expected long-term rate of return on plan assets assumption for non-U.S. pension plans was a weighted-average of 5.02 percent in 2023 compared to 3.49 percent in 2022 and 6.15 percent in 2021 compared to 6.23 percent in 2020 and 6.21 percent in 2019. The expected long-term rate of return on plan assets assumption used in each non-U.S. plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the effect of active management of the plan’s assets. Our largest non-U.S. pension plans are in the United Kingdom and Germany. The expected long-term rate of return on plan assets for the United Kingdom was 6.754.50 percent and the expected long-term rate of return on plan assets for Germany was 5.50 percent. Management, in conjunction with our external financial advisors, uses actual historical returns of the asset portfolio to assess the reasonableness of the expected rate of return for each plan.   Assumed health care trend rates 2021   2020   2019     2023   2022   2021   Health care cost trend rate assumed for next year   6.50 %   6.75 %   7.00 %   6.25 %   6.50 %   6.50 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)   5.00 %   5.00 %   0.25 %   5.75 %   5.75 %   5.00 % Fiscal year that the rate reaches the ultimate trend rate 2028   2028   2028     2026   2026   2028     The asset allocation for the company’s U.S. and non-U.S. pension plans at the end of 20212023 and 20202022 follows.       U.S. Pension Plans     Non-U.S. Pension Plans     Other Postretirement Plans               Percentage of             Percentage of             Percentage of               Plan Assets at             Plan Assets at             Plan Assets at       Target     Year-End     Target     Year-End     Target     Year-End   Asset Category   2021     2021     2020     2021     2021     2020     2021     2021     2020   Equities     60.0 %     57.7 %     55.4 %     21.2 %     21.3 %     48.8 %     0.0 %     0.0 %     0.0 % Fixed income     40.0 %     40.1 %     36.2 %     77.3 %     67.0 %     51.0 %     0.0 %     0.0 %     0.0 % Insurance     0.0 %     0.0 %     0.0 %     0.0 %     0.0 %     0.0 %     100.0 %     99.8 %     99.4 % Cash1     0.0 %     2.2 %     8.4 %     1.5 %     11.7 %     0.2 %     0.0 %     0.2 %     0.6 % Total     100 %     100 %     100 %     100 %     100 %     100 %     100 %     100 %     100 % 1 Negative cash for 2020 represents unsettled pending trades within an investment that are classified in cash and cash equivalents until settled.     U.S. Pension Plans     Non-U.S. Pension Plans     Other Postretirement Plans               Percentage of             Percentage of             Percentage of               Plan Assets at             Plan Assets at             Plan Assets at       Target     Year-End     Target     Year-End     Target     Year-End   Asset Category   2023     2023     2022     2023     2023     2022     2023     2023     2022   Equities     55.0 %     53.8 %     53.1 %     21.0 %     22.0 %     25.5 %     0.0 %     0.0 %     0.0 % Fixed income     45.0 %     44.9 %     45.8 %     79.0 %     77.2 %     70.0 %     0.0 %     0.0 %     0.0 % Insurance     0.0 %     0.0 %     0.1 %     0.0 %     0.0 %     0.0 %     100.0 %     99.5 %     98.9 % Cash1     0.0 %     1.3 %     1.0 %     0.0 %     0.8 %     4.5 %     0.0 %     0.5 %     1.1 % Total     100 %     100 %     100 %     100 %     100 %     100 %     100 %     100 %     100 %   5277 Table of Contents   Plan Asset Management   Plan assets are held in trust and invested in mutual funds, separately managed accounts and other commingled investment vehicles holding U.S. and non-U.S. equity securities, fixed income securities and other investment classes. We employ a total return approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Futures and options may also be used to enhance risk-adjusted long-term returns while improving portfolio diversification and duration. Risk management is accomplished through diversification across asset classes, utilization of multiple investment managers and general plan-specific investment policies. Risk tolerance is established through careful consideration of the plan liabilities, plan funded status and our assessment of our overall liquidity position. This asset allocation policy mix is reviewed annually and actual versus target allocations are monitored regularly and rebalanced on an as-needed basis. Plan assets are invested using a combination of active and passive investment strategies. Passive, or “indexed” strategies, attempt to mimic rather than exceed the investment performance of a market benchmark. The plans’ active investment strategies employ multiple investment management firms which in aggregate cover a range of investment styles and approaches. Performance is monitored and compared to relevant benchmarks on a regular basis.   The U.S. pension plans consist of two plans: a pension plan and a supplemental executive retirement plan (“SERP”). There were 0no assets in the SERP in 20212023 and 20202022. Consequently, all of the data disclosed in the asset allocation table for the U.S. pension plans pertain to our U.S. pension plan.   During 20212023, we maintained our assets within the allowed ranges of the target asset allocation mix of 6055 percent equities and 4045 percent fixed income plus or minus 5 percent and continued our focus to reduce volatility of plan assets in future periods and to more closely match the duration of the assets with the duration of the liabilities of the plan.   The non-U.S. pension plans consist of all the pension plans administered by us outside the U.S., principally consisting of plans in Germany and the United Kingdom, France and Canada.Kingdom. During 20212023, we maintained our assets for the non-U.S. pension plans at the specific target asset allocation mix determined for each plan plus or minus the allowed rate and continued our focus to reduce volatility of plan assets in future periods and to more closely match the duration of the assets with the duration of the liabilities of the individual plans. We plan to maintain the portfolios at their respective target asset allocations in 2021.2024.   Other postretirement benefits plans consist of two U.S. plans: a retiree medical health care plan and a group term life insurance plan. There were 0no assets in the group term life insurance plan for 20212023 and 20202022. Consequently, all of the data disclosed in the asset allocation table for other postretirement plans pertain to our retiree medical health care plan. Our investment strategy for other postretirement benefit plans is to own insurance policies that maintain an asset allocation nearly completely in equities. These equities are invested in a passive portfolio indexed to the S&P 500.   78 Table of Contents Fair Value of Plan Assets   The following table presents plan assets categorized within a three-level fair value hierarchy as described in Note 13.     November 27, 2021     December 2, 2023   U.S. Pension Plans   Level 1     Level 2     Level 3     Total Assets     Level 1     Level 2     Level 3     Total Assets   Equities   $ 0     $ 236,557     $ 0     $ 236,557     $ -     $ 172,166     $ -     $ 172,166   Fixed income   0     164,133     186     164,319     -     129,044     -     129,044   Cash     8,935       0       0       8,935       4,054       -       -       4,054   Total categorized in the fair value hierarchy   $ 8,935     $ 400,690     $ 186     $ 409,811     4,054     301,210     -     305,264   Other investments measured at NAV1     -     -     -     14,474   Total   $ 4,054   $ 301,210   $ -   $ 319,738     Non-U.S. Pension Plans   Level 1     Level 2     Level 3     Total Assets     Level 1     Level 2     Level 3     Total Assets   Equities   $ 35,117     $ 0     $ 0     $ 35,117     $ 29,601     $ -     $ -     $ 29,601   Fixed income   48,243     5,285     749     54,277       40,686     -     726     41,412   Cash     4,399       0       0       4,399       1,137       -       -       1,137   Total categorized in the fair value hierarchy   87,759     5,285     749     93,793       71,424     -     726     72,150   Other investments measured at NAV1                             122,830                               62,472   Total   $ 87,759     $ 5,285     $ 749     $ 216,623     $ 71,424     $ -     $ 726     $ 134,622     Other Postretirement Benefits   Level 1     Level 2     Level 3     Total Assets     Level 1     Level 2     Level 3     Total Assets   Insurance   $ 0     $ 0     $ 135,484     $ 135,484     $ -     $ -     $ 132,754     $ 132,754   Cash     217       0       0       217       699       -       -       699   Total   $ 217     $ 0     $ 135,484     $ 135,701     $ 699     $ -     $ 132,754     $ 133,453       November 28, 2020     December 3, 2022   U.S. Pension Plans   Level 1     Level 2     Level 3     Total Assets     Level 1     Level 2     Level 3     Total Assets   Equities   $ 3,421     $ 217,151     $ 0     $ 220,572     $ -     $ 152,084     $ 21,525     $ 173,609   Fixed income   1,524     142,317     205     144,046     -     126,114     23,547     149,661   Insurance   -   -   179   179   Cash     33,391       0       0       33,391       3,337       -       -       3,337   Total categorized in the fair value hierarchy   38,336     359,468     205     398,009       3,337       278,198       45,251       326,786   Other investments measured at NAV1                         394   Total   $ 38,336     $ 359,468     $ 205     $ 398,403     5379 Table of Contents   Non-U.S. Pension Plans   Level 1     Level 2     Level 3     Total Assets     Level 1     Level 2     Level 3     Total Assets   Equities   $ 33,478     $ 1,368     $ 0     $ 34,846     $ 28,422     $ -     $ -     $ 28,422   Fixed income   49,813     7,182     770     57,765     41,515     -     703     42,218   Cash     352       0       0       352       491       -       -       491   Total categorized in the fair value hierarchy   83,643     8,550     770     92,963     70,428     -     703     71,131   Other investments measured at NAV1                             109,279                               70,777   Total   $ 83,643     $ 8,550     $ 770     $ 202,242     $ 70,428     $ -     $ 703     $ 141,908     Other Postretirement Benefits   Level 1     Level 2     Level 3     Total Assets     Level 1     Level 2     Level 3     Total Assets   Insurance   $ 0     $ 0     $ 108,406     $ 108,406     $ -     $ -     $ 119,446     $ 119,446   Cash     650       0       0       650       1,336       -       -       1,336   Total   $ 650     $ 0     $ 108,406     $ 109,056     $ 1,336     $ -     $ 119,446     $ 120,782     1 In accordance with ASC Topic 820-10, Fair Value Measurement, certain investments that are measured at NAV (Net Asset Value per share) (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts represented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.   2 Negative cash for 2020 represents unsettled pending trades within an investment that are classified in cash and cash equivalents until settled. The definitions of fair values of our pension and other postretirement benefit plan assets at November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022 by asset category are as follows:   Equities—Primarily publicly traded common stock for purposes of total return and to maintain equity exposure consistent with policy allocations. Investments include: (i) U.S. and non-U.S. equity securities and mutual funds valued at closing prices from national exchanges; and (ii) commingled funds valued at unit values or net asset values provided by the investment managers, which are based on the fair value of the underlying investments. Funds valued at net asset value have various investment strategies including seeking maximum total returns consistent with prudent investment management, seeking current income consistent with preservation of capital and daily liquidity and seeking to approximate the risk and return characterized by a specific index fund. There are no restrictions for redeeming holdings out of these funds and the funds have no unfunded commitments.   Fixed income—Primarily corporate and government debt securities for purposes of total return and managing fixed income exposure to policy allocations. Investments include (i) mutual funds valued at closing prices from national exchanges, (ii) corporate and government debt securities valued at closing prices from national exchanges, (iii) commingled funds valued at unit values or net asset value provided by the investment managers, which are based on the fair value of the underlying investments, and (iv) an annuity contract, the value of which is determined by the provider and represents the amount the plan would receive if the contract were cashed out at year-end.   Insurance—Insurance contracts for purposes of funding postretirement medical benefits. Fair values are the cash surrender values as determined by the providers which are the amounts the plans would receive if the contracts were cashed out at year end.   Cash–Cash balances on hand, accrued income and pending settlements of transactions for purposes of handling plan payments. Fair values are the cash balances as reported by the Trustees of the plans.   80 Table of Contents The following is a roll forward of the Level 3 investments of our pension and postretirement benefit plan assets during the years ended November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022:     Fixed Income     Fixed Income   U.S. Pension Plans   2021     2020     2023   2022   Level 3 balance at beginning of year   $ 205     $ 219     $ 45,251     $ 186   Net transfers (out of)/into level 3     (45,072 )   $ 16,564   Purchases, sales, issuances and settlements, net     (19 )   (14 )     (179 )     28,501   Level 3 balance at end of year   $ 186     $ 205     $ -     $ 45,251       Fixed Income     Fixed Income   Non-U.S. Pension Plans   2021     2020     2023   2022   Level 3 balance at beginning of year   $ 770     $ 675     $ 703     $ 749   Net transfers into / (out of) level 3   64     43   Net gains   (43 )   (8 ) Net transfers into level 3   -   7   Net losses   -   (1 ) Currency change effect     (42 )   60       23       (52 ) Level 3 balance at end of year   $ 749     $ 770     $ 726     $ 703       Insurance     Insurance   Other Postretirement Benefits   2021     2020     2023   2022   Level 3 balance at beginning of year   $ 108,406     $ 94,082     $ 119,446     $ 135,484   Net transfers into / (out of) level 3   (1,658 )   (831 ) Net transfers out of level 3   -     (1,992 ) Purchases, sales, issuances and settlements, net   (1,093 )   (822 )   (1,144 )   (1,122 ) Net gains     29,829     15,977   Net gains/(losses)     14,452       (12,924 ) Level 3 balance at end of year   $ 135,484     $ 108,406     $ 132,754     $ 119,446       5481 Table of Contents   Note 11: Income Taxes   Income before income taxes and income from equity method investments   2021     2020     2019     2023     2022     2021   United States   $ 14,989     $ 20,328     $ 31,796     $ 15,276     $ 63,718     $ 14,989   Non-U.S.     201,861       138,028       141,032       218,885       188,210       201,862   Total   $ 216,850     $ 158,356     $ 172,828     $ 234,161     $ 251,928     $ 216,851     Components of the provision for income tax expense (benefit)   2021     2020     2019     2023     2022     2021   Current:     U.S. federal   $ 10,310     $ 5,243     $ 9,122     $ 18,347     $ 12,181     $ 10,310   State   2,265     1,320     3,294     5,529     3,389     2,265   Non-U.S.     57,801       56,542       47,848       87,449       63,750       57,801       70,376       63,105       60,264       111,325       79,320       70,376   Deferred:     U.S. federal   (6,891 )   (4,709 )   (432 )   (100 )   8,150     (6,891 ) State   (350 )   (4,111 )   125     (4,111 )   (1,767 )   (350 ) Non-U.S.     (102 )     (12,364 )     (10,549 )     (13,585 )     (8,517 )     (102 )     (7,343 )     (21,184 )     (10,856 )     (17,796 )     (2,134 )     (7,343 ) Total   $ 63,033     $ 41,921     $ 49,408     $ 93,529     $ 77,186     $ 63,033     Reconciliation of effective income tax   2021     2020     2019     2023     2022     2021   Tax at statutory U.S. federal income tax rate   $ 45,539     $ 33,255     $ 36,294     $ 49,174     $ 52,760     $ 45,539   State income taxes, net of federal benefit   1,444     (2,104 )   2,785     1,137     1,252     1,444   Foreign dividend repatriation   1,104     900     825   Foreign dividend repatriation1   21,730     2,596     1,104   Foreign operations   19,673     (563 )   8,712     12,558     1,868     19,673   Executive compensation over $1.0 million   2,507     1,420     1,661     784     2,847     2,507   Non-U.S. stock option expense   575     358     425     730     525     575   Change in valuation allowance   (9,572 )   5,925     1,097     725     3,187     (9,572 ) Research and development tax credit   (993 )   (906 )   (802 )   (1,400 )   (927 )   (993 ) Foreign-derived intangible income   (2,617 )   (1,396 )   (2,240 )   (2,665 )   (2,786 )   (2,617 ) Global intangible low-taxed income   2,334     1,932     2,029     2,345     1,890     2,334   Provision to return   1,122     1,704     (3,271 )   1,336     840     1,122   Cross currency swap   3,931     (6,748 )   2,677     -     7,020     3,931   Contingency reserve   (2,139 )   8,287     (957 )   5,951     5,909     (2,139 ) Other     125       (143 )     173       1,124       205       125   Total income tax expense   $ 63,033     $ 41,921     $ 49,408     $ 93,529     $ 77,186     $ 63,033     Deferred income tax balances at each year-end related to:   2021     2020   Deferred tax assets:                 Pension and other post-retirement benefit plans   $ 12,118     $ 16,385   Employee benefit costs     26,799       24,538   Foreign tax credit carryforward     7,309       6,905   Tax loss carryforwards     24,071       31,495   Leases     8,590       7,133   Hedging activity     2,623       12,906   Interest deduction limitation     12,428       6,343   Other     27,410       30,178   Gross deferred tax assets     121,348       135,883   Less: valuation allowance     (11,341 )     (21,843 ) Total net deferred tax assets     110,007       114,040   Deferred tax liability:                 Depreciation and amortization     (207,726 )     (220,379 ) Pension and other post-retirement benefit plans     (36,042 )     (14,968 ) Leases     (8,524 )     (7,194 ) Total deferred tax liability     (252,292 )     (242,541 ) Net deferred tax liability   $ (142,285 )   $ (128,501 ) 1 Foreign dividend repatriation line includes impact of withholding tax recorded on earnings that are no longer permanently reinvested. 82 Table of Contents   Deferred income tax balances at each year-end related to:   2023     2022   Deferred tax assets:                 Pension and other post-retirement benefit plans   $ 5,306     $ 6,752   Employee benefit costs     27,672       25,196   Foreign tax credit carryforward     6,538       7,884   Tax loss carryforwards     25,894       22,948   Leases     12,716       8,538   Hedging activity     18,638       13,299   Interest deduction limitation     37,519       17,736   Other     33,022       28,840   Gross deferred tax assets     167,305       131,193   Less: valuation allowance     (15,595 )     (14,424 ) Total net deferred tax assets     151,710       116,769   Deferred tax liability:                 Depreciation and amortization     (209,266 )     (215,219 ) Pension and other post-retirement benefit plans     (41,444 )     (37,362 ) Undistributed earnings of non-U.S. subsidiaries     (21,926 )     -   Leases     (12,510 )     (8,329 ) Total deferred tax liability     (285,146 )     (260,910 ) Net deferred tax liability   $ (133,436 )   $ (144,141 )   The difference between the change in the deferred tax assets inliability on the balance sheet and the deferred tax provision is primarily duerelated to the defined benefit pension plan adjustment and floating-to-fixed hedges recorded in accumulated other comprehensive income (loss). offset by liabilities established in purchase accounting.   Valuation allowances primarily relate to foreign net operating loss carryforwards and branch foreign tax credit carryforwards where the future potential benefits do not meet the more-likely-than-not realization test. The decreaseincrease in the valuation allowance is primarily related to a decrease in foreign net operating losses for which the Company does not expect to receive a full tax benefit.   55 Table of Contents Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those deferred tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more-likely-than-not to be realized. We believe it is more-likely-than-not that reversal of deferred tax liabilities and forecasted income will be sufficient to fully recover the net deferred tax assets not already offset by a valuation allowance. In the event that all or part of the gross deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made.   83 Table of Contents U.S. income taxes have not been provided on approximately $1,044,206$1,154,354 of undistributed earnings of non-U.S. subsidiaries. We intend to indefinitely reinvest these undistributed earnings. Cash available in the United States has historically been sufficient and we expect it will continue to be sufficient to fund U.S. cash flow requirements. In the event these earnings are later distributed to the U.S., such distributions would likely result in additional U.S. tax.   While non-U.S. operations have been profitable overall, there are cumulative tax losses of $85,273$81,655 in various countries. These tax losses can be carried forward to offset the income tax liabilities on future income in these countries. Cumulative tax losses of $63,592$60,269 can be carried forward indefinitely, while the remaining $21,680$21,386 of tax losses must be utilized during 20222024 to 2039.2041.   The U.S. has a branch foreign tax credit carryforward of $3,994.$4,465. A valuation allowance has been recorded against this foreign tax credit carryforward to reflect that this amount is not more-likely-than-not to be realized.   The table below sets forth the changes to our gross unrecognized tax benefit as a result of uncertain tax positions, excluding accrued interest.  We do not anticipate that the total unrecognized tax benefits will change significantly within the next twelve months.     2021     2020     2023     2022   Balance at beginning of year   $ 14,569     $ 8,946     $ 17,582     $ 13,281   Tax positions related to the current year:     Additions   401     579     723     469       Tax positions related to prior years:     Additions   1,323     7,400     5,658     5,885   Reductions   (950 )   (283 )   (965 )   (1,019 ) Settlements   (161 )   (747 )   (8,156 )   -   Lapses in applicable statutes of limitation     (1,901 )     (1,326 )     (588 )     (1,034 ) Balance at end of year   $ 13,281     $ 14,569     $ 14,254     $ 17,582     Included in the balance of unrecognized tax benefits as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022 are potential benefits of $8,888$10,338 and $9,125$12,663 respectively, that, if recognized, would affect the effective tax rate.   We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. For the year ended November 27, 2021December 2, 2023, we recognized a net benefit for interest and penalties of $703$824 relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $2,817$6,708 as of November 27, 2021December 2, 2023. For the year ended November 28, 2020December 3, 2022, we recognized a net benefit for interest and penalties of $2,378$2,760 relating to unrecognized tax benefits and had net accumulated accrued interest and penalties of $3,520$6,275 as of November 28, 2020December 3, 2022.   We are subject to U.S. federal income tax as well as income tax in numerous state and foreign jurisdictions. We are no longer subject to U.S. federal tax examination for years prior to 20182020 or Swiss income tax examination for years prior to 2018.2020. During the second quarter of 2016, H.B. Fuller (China) Adhesives, Ltd. was notified of a transfer pricing audit covering the calendar years 2005 through 2014. We are in various stages of examination and appeal in other foreign jurisdictions. Although the final outcomes of these examinations cannot currently be determined, we believe that we have recorded adequate liabilities with respect to these examinations.   84 Table of Contents   Note 12: Financial Instruments   Overview   As a result of being a global enterprise, foreign currency exchange rates and fluctuations in those rates may affect the Company's net investment in foreign subsidiaries and our earnings, cash flows and financial position are exposed to foreign currency risk from foreign currency denominated receivables and payables.   We use foreign currency forward contracts, cross-currency swaps, and interest rate swaps and net investment hedges to manage risks associated with foreign currency exchange rates and interest rates. We do not hold derivative financial instruments of a speculative nature or for trading purposes. We record derivatives as assets and liabilities on the balance sheet at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the Consolidated Statement of Cash Flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The company evaluates hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings.   We are exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. We select investment-grade multinational banks and financial institutions as counterparties for derivative transactions and monitor the credit quality of each of these banks on a periodic basis as warranted. We do not anticipate nonperformance by any of these counterparties, and valuation allowances, if any, are de minimis.   56 Table of Contents Cash Flow Hedges As ofOn November 27, 2021January 12, 2023, , we had cash flow hedges of four cross-currencyentered into an interest rate swap agreements effective October 20, 2017 agreement to convert $400,000 of our variable rate 1-month LIBOR rate debt to a notional amountfixed rate of $267,8603.6895 percent that matures on January 12, 2028. On February 28, 2023, after refinancing our debt, we amended the interest rate swap agreement to our 1-month SOFR rate debt to a fixed rate of foreign currency denominated intercompany loans into U.S. dollars, which mature3.7260 in accordance with the practical expedients included in ASC 2022.848, As of November 27, 2021, theReference Rate Reform. The combined fair value of the swapsinterest rate swap was an asset of $2,458 at December 2, 2023 and was included in other assets in the Consolidated Balance Sheets. The swap was designated for hedge accounting treatment as a cash flow hedge. We are applying the hypothetical derivative method to assess hedge effectiveness for this interest rate swap. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our variable rate debt are compared with the change in the fair value of the swap. On March 16, 2023, we entered into an interest rate swap agreement to convert $300,000 of our 1-month SOFR rate debt to a fixed rate of 3.7210 percent that matures on February 15, 2028. The combined fair value of the interest rate swap was an asset of $1,174 at December 2, 2023$14,496 and was included in other assets in the Consolidated Balance Sheets. The swaps wereswap was designated for hedge accounting treatment as a cash flow hedgeshedge. We are applying the hypothetical derivative method to assess hedge effectiveness for accounting treatment. The lesser amount betweenthis interest rate swap. Changes in the cumulativefair value of a hypothetically perfect swap with terms that match the critical terms of our variable rate debt are compared with the change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps is recorded in accumulated other comprehensive income (loss) in the Consolidated Balance Sheets and in other net cash provided by operating activities in the Consolidated Statement of Cash Flows. The differences between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps are recorded as other income, net in the Consolidated Statements of Income. In a perfectly effective hedge relationship, the two fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. The amount in accumulated other comprehensive income (loss) related to cross-currency swaps was a gain of $3,483 as of November 27, 2021. The estimated net amount of the existing gain that is reported in accumulated other comprehensive income (loss) as of November 27, 2021 that is expected to be reclassified into earnings within the next twelve months is $3,843. As of November 27, 2021, we do not believe any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.swaps. The following table summarizes the cross-currency swaps outstanding as of November 27, 2021:   Fiscal Year of                           Expiration   Interest Rate     Notional Value     Fair Value   Pay EUR 2022     3.00 %   $ 267,860     $ 14,496   Receive USD     5.1803 %                   On February 27, 2018,March 16, 2023, we entered into an interest rate swap agreement to convert $200,000$100,000 of our $2,150,000 Term Loan B1-month SOFR rate debt to a fixed interest rate of 4.589 percent. During the second quarter of 2021, we settled a portion of this interest rate swap as the debt underlying this swap was less than the swap value due to debt paydown. We settled the ineffective portion of the interest rate swap by making a cash payment of $378 and recorded3.8990 percent that payment to interest expense in our Consolidated Statements of Income during the second quarter of 2021. On October 20, 2017, we entered into interest rate swap agreements to convert $1,050,000, which amortized down to $800,000matures on October 20, 2021,February 15, 2028. of our $2,150,000 Term Loan B to a fixed interest rate of 4.0275 percent. See Note 7 for further discussion on the issuance of our Term Loan B. The combined fair value of the interest rate swapsswap was a liability of $12,366 $63 at November 27, 2021December 2, 2023 and was included in other liabilities in the Consolidated Balance Sheets. The swaps wereswap was designated for hedge accounting treatment as a cash flow hedges.hedge. We are applying the hypothetical derivative method to assess hedge effectiveness for these interest rate swaps. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $1,125,000 variable rate Term Loan Bdebt are compared with the change in the fair value of the swaps.   On April 23, 2018, we amended our Term Loan B Credit Agreement to reduce the interest rate from LIBOR plus 2.25 percent to LIBOR plus 2.00 percent. Fixed interest rates related to swap agreements disclosed have been updated to reflect the amendment. 85 Table of Contents The amounts of pretax gains (losses) recognized in comprehensive income related to derivative instruments designated as cash flow hedges are as follows:     November 27, 2021     November 28, 2020     November 30, 2019     December 2, 2023     December 3, 2022     November 27, 2021   Cross-currency swap contracts   $ (4,556 )   $ 6,307     $ 14,429     $ -   $ (3,536 )   $ (4,554 ) Interest rate swap contracts   $ 20,109     $ (15,618 )   $ (46,254 )   $ 5,932     $ 13,148     $ 20,109   Net investment hedges   $ (18,555 )   $ (54,040 )   -     Fair Value Hedges   On February 12, 2021, we entered into interest rate swap agreements to convert our $300,000 Public Notes that were issued on October 20, 2020 to a variable interest rate of 1-month LIBOR plus 3.28 percent. On June 30, 2023, 1-month LIBOR rates ceased to exist and the IBOR Fallbacks Protocol published by the International Swaps and Derivatives Association ("ISDA") took effect as outlined in the interest rate swap agreement. As a result, the interest rate swap agreements were converted to Overnight SOFR plus 3.28 percent. We applied the practical expedients included in ASC 848,Reference Rate Reform. See Note 7 for further discussion on the issuance of our Public Notes. These interest rate swap agreements mature on October 15, 2028. The combined fair value of the interest rate swaps waswas a liabilityliability of $10,539$41,532 at at November 27, 2021December 2, 2023, and was included in other liabilities in the ConsolidatedConsolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges. We apply the short cut method and assume hedge effectiveness. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $300,000 fixed rate Public Notes are compared with the change in the fair value of the swaps.  On February 14, 2017, we entered into an interest rate swap agreementsagreement to convert $150,000 of our $300,000 Public Notes that were issued on February 14, 2017 to a variable interest rate of 1-month LIBOR plus 1.86 percent. The swap was designated for hedge accounting treatment as a fair value hedges.hedge. We applied the hypothetical derivative method to assess hedge effectiveness for this interest rate swap. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $150,000 fixed rate Public Notes are compared with the change in the fair value of the swaps.swap. On May 1, 2020, we terminated the swap agreement. Upon termination, we received $15,808 in cash. The remaining swap liability will be accounted for as a discount on long-term debt and will be amortized to interest expense over the remaining life of the Public Notes of seven years.   Net Investment Hedges On October 17, 2022, we entered into a float-to-float cross-currency interest rate swap agreement with a notional amount of €307,173 maturing in October 2028. On October 20, 2022, we entered into fixed-to-fixed cross-currency interest rate swap agreements for a total notional amount of €300,000 with tranches maturing in August 2025, August 2026 and February 2027. On June 30, 2023, 1-month LIBOR rates ceased to exist and the IBOR Fallbacks Protocol published by the International Swaps and Derivatives Association (ISDA) took effect as outlined in the interest rate swap agreement. As a result, the 1-month LIBOR leg of the float-to-float agreement was converted to Overnight SOFR plus 3.28 percent. On July 17, 2023, we amended the 1-month EURIBOR leg of the float-to-float agreement to Overnight ESTR plus 3.2195 percent. We applied the practical expedients included in ASC 848,Reference Rate Reform. As of December 2, 2023, the combined fair value of the swaps was a liability of $72,589 and was included in other liabilities in the Consolidated Balance Sheets. The cross-currency interest rate swaps hedge a portion of the Company’s investment in Euro denominated foreign subsidiaries. The swaps are designated as net investment hedges for accounting treatment. The net gains or losses attributable to changes in spot exchange rates are recorded in the cumulative translation adjustment within other comprehensive income (loss). The gains or losses are reclassified into earnings upon a liquidation event or deconsolidation of the foreign subsidiary. Any ineffective portions of net investment hedges are reclassified from accumulated other comprehensive income (loss) into earnings during the period of change. The amount in accumulated other comprehensive income (loss) related to net investment hedge cross-currency swaps was a loss of $54,850 as of December 2, 2023. The amounts of pretax loss recognized in comprehensive income related to the net investment hedge was $18,712 in2023. As of December 2, 2023, we did not reclassify any gains or losses into earnings from net investment hedges and we do not expect to reclassify any such gain or loss into earnings within the next twelve months. No amounts related to net investment hedges have been excluded from the assessment of hedge effectiveness. 86 Table of Contents Derivatives Not Designated As Hedging Instruments   The company uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries that are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Foreign currency forward contracts are recorded as assets and liabilities on the balance sheet at fair value. Changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities. See Note 13 for fair value amounts of these derivative instruments.   As of November 27, 2021, December 2, 2023, we had forward foreign currency contracts maturing betweebetnween November 29, 2021December 4, 2023 and SeptemberMay 13, 2022.2024. The mark-to-market effect associated with these contracts was largely offset by the underlying transaction gains and losses resulting from the foreign currency exposures for which these contracts relate.   The amounts of pretax gains (losses) recognized in other income, net related to derivative instruments not designated as hedging instruments are as follows:       November 27, 2021     November 28, 2020     November 30, 2019   Foreign currency forward contracts   $ (357 )   $ (2,908 )   $ (573 )     December 2, 2023     December 3, 2022     November 27, 2021   Foreign currency forward contracts   $ 8,497     $ 5,711     $ (357 )   57 Table of Contents Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities in the customer base and their dispersion across many different industries and countries. As of November 27, 2021December 2, 2023, there were no significant concentrations of credit risk.     Note 13: Fair Value Measurements   Overview   Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:     ● Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.   ● Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.   ● Level 3: Unobservable inputs that reflect management’s assumptions, and include situations where there is little, if any, market activity for the asset or liability. 87 Table of Contents Balances Measured at Fair Value on a Recurring Basis   The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.           Fair Value Measurements           Fair Value Measurements           Using:           Using:     November 27,                     December 2,                   Description   2021     Level 1     Level 2     Level 3     2023     Level 1     Level 2     Level 3   Assets:     Marketable securities   $ 2,079     $ 2,079     $ 0     $ 0     $ 19,314     $ 19,314     $ -     $ -   Foreign exchange contract assets   5,725     0     5,725     0     13,501     -     13,501     -   Cross-currency cash flow hedge assets   14,496     0     14,496     0   Interest rate swaps, cash flow hedge assets   3,632   $ -   3,632   $ -       Liabilities:     Foreign exchange contract liabilities   $ 6,082     $ 0     $ 6,082     $ 0     $ 5,004     $ -     $ 5,004     $ -   Interest rate swaps, cash flow hedge liabilities   12,366     0     12,366     0     63   $ -   63   $ -   Interest rate swaps, fair value hedge liabilities   10,539     0     10,539     0     41,532   $ -   41,532   $ -   Net investment hedge liability   72,589     -     72,589     -   Contingent consideration liability   8,100     0     0     8,100     1,370     -     -     1,370                 Fair Value Measurements           Fair Value Measurements           Using:           Using:     November 28,                     December 3,                   Description   2020     Level 1     Level 2     Level 3     2022     Level 1     Level 2     Level 3   Assets:     Marketable securities   $ 22,560     $ 22,560     $ 0     $ 0     $ 4,013     $ 4,013     $ -     $ -   Foreign exchange contract assets   2,320     0     2,320     0     10,282     -     10,282     -   Cross-currency cash flow hedge assets   2,823     0     2,823     0       Liabilities:     Foreign exchange contract liabilities   $ 5,251     $ 0     $ 5,251     $ 0     $ 4,570     $ -     $ 4,570     $ -   Cross-currency cash flow hedge liabilities   280     0     280     0     42,542   -   42,542   -   Interest rate swaps, cash flow hedge liabilities   33,256     0     33,256     0     54,046     -     54,046     -   Contingent consideration liability   5,800   0   0   5,800     1,977   -   -   1,977     See Note 7 for discussion regarding the fair value of debt. We use the income approach in calculating the fair value of our contingent consideration liability using a real option model with Level 3 inputs. The expected cash flows are affected by various significant judgments and assumptions, including revenue growth rates, volatility and discount rate, which are sensitive to change. Estimates of fair value are inherently uncertain and represent only management’s reasonable expectation regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. The valuation of our contingent consideration liability related to the acquisitionacquisitions of D.H.M. resulted in a fair value of $8,100GSSI and TissueSeal was $870 and $500, respectively, as of November 27, 2021December 2, 2023. As of December 2, 2023, the agreement provisions for the ZKLT contingent consideration were met, and as a result, $4,132 was paid during 2023. Adjustments to the fair value of contingent consideration are recorded to selling, general and administrative expenses in the Statement of Income. See Note 2 for further discussion regarding our acquisitions.   Contingent consideration liability   2021     2023   Level 3 balance at beginning of year   $ 5,800     $ 1,977   Acquisition   1,700   Fair value adjustment   3,763   Payment of contingent consideration   (1,700 )   (4,132 ) Mark to market adjustment     2,300       (238 ) Level 3 balance at end of year   $ 8,100     $ 1,370   Balances Measured at Fair Value on a Nonrecurring Basis We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets include intangible assets acquired in an acquisition. The identified intangible assets of customer relationships, technology and tradenames acquired in connection with our acquisitions were measured using unobservable (Level 3) inputs. The fair value of the intangible assets was calculated using either the income or cost approach. Significant inputs include estimated revenue growth rates, gross margins, operating expenses, attrition rate, royalty rate and discount rate.     5888 Table of Contents See Note 2 for further discussion regarding our acquisitions. See Note 7 for discussion regarding the fair value of debt.   Note 14: Commitments and Contingencies   Environmental Matters    From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. We review the circumstances of each individual site, considering the number of parties involved, the level of potential liability or our contribution relative to the other parties, the nature and magnitude of the hazardous substances involved, the method and extent of remediation, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred. Also, from time to time, we are identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish an undiscounted financial provision. We recorded liabilities of $6,603$5,034 and $8,099$5,754 as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022, respectively, for probable and reasonably estimable environmental remediation costs. Of the amount reserved, $3,333$2,301 and $3,703$2,789 as of November 27, 2021December 2, 2023 and November 28, 2020December 3, 2022, respectively, is attributable to a facility we own in Simpsonville, South Carolina as a result of our Royal Adhesives acquisition that is a designated site under CERCLA.   Currently we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites. In addition, we are engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.   Other Legal Proceedings    From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including the asbestos litigation described in the following paragraphs, will not have a material adverse effect on our results of operations, financial condition or cash flow.   We have been named as a defendant in lawsuits in which plaintiffs have alleged injury due to products containing asbestos manufactured more than 35 years ago. The plaintiffs generally bring these lawsuits against multiple defendants and seek damages (both actual and punitive) in very large amounts. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable injuries or that the injuries suffered were the result of exposure to products manufactured by us. We are typically dismissed as a defendant in such cases without payment. If the plaintiff presents evidence indicating that compensable injury occurred as a result of exposure to our products, the case is generally settled for an amount that reflects the seriousness of the injury, the length, intensity and character of exposure to products containing asbestos, the number and solvency of other defendants in the case, and the jurisdiction in which the case has been brought.   89 Table of Contents A significant portion of the defense costs and settlements in asbestos-related litigation is paid by third parties, including indemnification pursuant to the provisions of a 1976 agreement under which we acquired a business from a third party. Currently, this third party is defending and paying settlement amounts, under a reservation of rights, in most of the asbestos cases tendered to the third party.   In addition to the indemnification arrangements with third parties, we have insurance policies that generally provide coverage for asbestos liabilities, including defense costs. Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation. However, certain of our insurers are insolvent.  We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits. These agreements require, among other things, that we fund a share of settlements and judgments allocable to years in which the responsible insurer is insolvent.   A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows:     Year Ended   Year Ended   Year Ended     Year Ended   Year Ended   Year Ended     November 27,   November 28,   November 30,     December 2,   December 3,   November 27,     2021     2020     2019     2023     2022     2021   Lawsuits and claims settled   2     4     8     9     7     2   Settlement amounts   $ 85     $ 130     $ 424     $ 4,200     $ 296     $ 85   Insurance payments received or expected to be received   $ 55     $ 88     $ 291     $ 2,379     $ 195     $ 55     59 Table of Contents We do not believe that it would be meaningful to disclose the aggregate number of asbestos-related lawsuits filed against us because relatively few of these lawsuits are known to involve exposure to asbestos-containing products that we manufactured. Rather, we believe it is more meaningful to disclose the number of lawsuits that are settled and result in a payment to the plaintiff. To the extent we can reasonably estimate the amount of our probable liabilities for pending asbestos-related claims, we establish a financial provision and a corresponding receivable for insurance recoveries.    Based on currently available information, we have concluded that the resolution of any pending matter, including asbestos-related litigation, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.     Note 15: Segments   We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. Revenue and operating income of each of our segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance. Segment operating income is identified as gross profit less SG&A expenses. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment. Consistent with our internal management reporting, Corporate Unallocated amounts include business acquisition and integration costs, organizational restructuring charges and project costs associated with our implementation of Project ONE. Corporate assets are not allocated to the operating segments. Inter-segment revenues are recorded at cost plus a markup for administrative costs.   90 Table of Contents We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives.  The business components within each operating segment are managed to maximize the results of the overall operating segment rather than the results of any individual business component of the operating segment. Results of individual components of each operating segment are subject to numerous allocations of segment-wide costs that may or may not have been focused on that particular component for a particular reporting period. The costs for these allocated resources are not tracked on a “where-used” basis as financial performance is assessed at the total operating segment level.   Reportable operating segment financial information for all periods presented is as follows:     2021     2020     2019   Net revenue                         Hygiene, Health and Consumable Adhesives   $ 1,472,756     $ 1,332,786     $ 1,328,286   Engineering Adhesives     1,371,756       1,088,313       1,158,403   Construction Adhesives     433,519       369,170       396,580   Corporate Unallocated1     0       0       13,731   Total   $ 3,278,031     $ 2,790,269     $ 2,897,000                             Segment operating income                         Hygiene, Health and Consumable Adhesives   $ 138,366     $ 130,789     $ 115,961   Engineering Adhesives     135,913       103,974       136,299   Construction Adhesives     14,148       11,148       16,657   Total segment     288,427       245,911       268,917   Corporate Unallocated1     (35,815 )     (27,594 )     (42,923 ) Total   $ 252,612     $ 218,317     $ 225,994                             Depreciation and amortization                         Hygiene, Health and Consumable Adhesives   $ 45,919     $ 44,329     $ 45,448   Engineering Adhesives     61,082       58,102       57,175   Construction Adhesives     35,002       35,811       35,851   Corporate Unallocated1     1,171       575       2,732   Total   $ 143,174     $ 138,817     $ 141,206                             Total assets2                                    Hygiene, Health and Consumable Adhesives   $ 1,370,924     $ 1,268,236       0              Engineering Adhesives     1,710,000       1,515,302       0              Construction Adhesives   �� 810,824       934,397       0              Corporate     382,782       318,769       0              Total   $ 4,274,530     $ 4,036,704       0                             Capital expenditures                                    Hygiene, Health and Consumable Adhesives   $ 60,164     $ 57,416       0              Engineering Adhesives     8,815       18,212       0              Construction Adhesives     3,591       7,635       0              Corporate     23,519       12,580       0              Total   $ 96,089     $ 95,843       0       2023     2022     2021   Net revenue                         Hygiene, Health and Consumable Adhesives   $ 1,601,487     $ 1,695,934     $ 1,472,756   Engineering Adhesives     1,428,744       1,532,639       1,371,756   Construction Adhesives     480,703       520,610       433,519   Total   $ 3,510,934     $ 3,749,183     $ 3,278,031                             Segment operating income (loss)                         Hygiene, Health and Consumable Adhesives   $ 215,088     $ 165,786     $ 138,366   Engineering Adhesives     187,346       168,873       135,913   Construction Adhesives     5,961       22,989       14,148              Total segment     408,395       357,648       288,427   Corporate Unallocated1     (53,258 )     (34,930 )     (35,815 ) Total   $ 355,137     $ 322,718     $ 252,612                             Depreciation and amortization                         Hygiene, Health and Consumable Adhesives   $ 53,398     $ 46,374     $ 45,919   Engineering Adhesives     63,143       58,307       61,082   Construction Adhesives     41,915       41,713       35,002   Corporate Unallocated1     1,384       582       1,171   Total   $ 159,840     $ 146,976     $ 143,174                             Total assets2                         Hygiene, Health and Consumable Adhesives   $ 1,661,122     $ 1,488,277           Engineering Adhesives     1,627,715       1,610,015           Construction Adhesives     990,296       987,610           Corporate     444,442       377,727           Total   $ 4,723,575     $ 4,463,629                                     Capital expenditures                         Hygiene, Health and Consumable Adhesives   $ 67,933     $ 110,877           Engineering Adhesives     14,888       (2,302 )         Construction Adhesives     4,540       (5,772 )         Corporate     31,776       27,161           Total   $ 119,137     $ 129,964             1 Consistent with our internal management reporting, Corporate Unallocated amounts in the tables above include net revenue and charges that are not allocated to the Company’s reportable segments.   2 Segment assets include primarily inventory, accounts receivable, property, plant and equipment, goodwill, intangible assets and other miscellaneous assets. Corporate assets include primarily corporate property, plant and equipment, deferred tax assets, certain investments and other assets.   6091 Table of Contents   Reconciliation of segment operating income to income before income taxes and income from equity method investments:     2021     2020     2019     2023     2022     2021   Segment operating income   $ 252,612     $ 218,317     $ 225,994     $ 355,137     $ 322,718     $ 252,612   Other income, net   32,855     15,398     37,943     9,682     12,952     32,855   Interest expense   (78,092 )   (86,776 )   (103,287 )   (134,602 )   (91,521 )   (78,092 ) Interest income     9,476       11,417       12,178       3,943       7,779       9,476   Income before income taxes and income from equity method investments   $ 216,851     $ 158,356     $ 172,828     $ 234,160     $ 251,928     $ 216,851     Financial information about geographic areas     Net Revenue     Net Revenue     2021     2020     2019     2023     2022     2021   United States   $ 1,421,623     $ 1,248,495     $ 1,309,056     $ 1,551,846     $ 1,692,903     $ 1,421,623   China   433,998     351,204     347,304     430,948     462,587     433,998   Germany     409,193       330,755       0       393,029       419,141       409,193   Countries with more than 10 percent of total   2,264,814     1,930,454     1,656,360     2,375,823     2,574,631     2,264,814   All other countries with less than 10 percent of total     1,013,217       859,815       1,240,640       1,135,111       1,174,552       1,013,217   Total   $ 3,278,031     $ 2,790,269     $ 2,897,000     $ 3,510,934     $ 3,749,183     $ 3,278,031       Property, Plant and Equipment, net     Property, Plant and Equipment, net     2021     2020     2019     2023     2022     2021   United States   $ 331,864     $ 297,046     $ 287,372     $ 425,765     $ 375,353     $ 331,864   Germany   120,548     131,879     127,497     114,266     107,903     120,548   China   96,300     99,513     80,606     110,061     101,563     96,300   All other countries with less than 10 percent of total     146,655       142,306       134,338       174,563       148,848       146,655   Total   $ 695,367     $ 670,744     $ 629,813     $ 824,655     $ 733,667     $ 695,367     We view the following disaggregation of net revenue by geographic region as useful to understanding the composition of revenue recognized during the respective reporting periods:     November 27, 2021     December 2, 2023     Hygiene, Health and   Engineering   Construction   Corporate         Hygiene, Health and Consumable   Engineering   Construction   Corporate           Consumable Adhesives     Adhesives     Adhesives     Unallocated     Total     Adhesives     Adhesives     Adhesives     Unallocated     Total   Americas   $ 826,172     $ 504,626     $ 384,576     $ 0     $ 1,715,374     $ 919,024     $ 577,751     $ 363,517     $ -     $ 1,860,292   EIMEA   425,324     470,466     22,156     0     917,946     476,397     460,327     85,738     -       1,022,462   Asia Pacific     221,260       396,664       26,787       0       644,711       206,066       390,666       31,448       -       628,180     $ 1,472,756     $ 1,371,756     $ 433,519     $ 0     $ 3,278,031     $ 1,601,487     $ 1,428,744     $ 480,703     $ -     $ 3,510,934         November 28, 2020       Hygiene, Health and     Engineering     Construction     Corporate               Consumable Adhesives     Adhesives     Adhesives     Unallocated     Total   Americas   $ 736,681     $ 430,866     $ 325,622     $ 0     $ 1,493,169   EIMEA     388,271       347,417       20,506       0       756,194   Asia Pacific     207,834       310,030       23,042       0       540,906       $ 1,332,786     $ 1,088,313     $ 369,170     $ 0     $ 2,790,269     November 30, 2019     December 3, 2022     Hygiene, Health and   Engineering   Construction   Corporate         Hygiene, Health and Consumable   Engineering   Construction   Corporate         Consumable Adhesives     Adhesives     Adhesives     Unallocated     Total     Adhesives     Adhesives     Adhesives     Unallocated     Total   Americas   $ 733,125     $ 469,764     $ 351,924     $ 13,731     $ 1,568,544     $ 1,003,179     $ 630,484     $ 411,951     $ -     $ 2,045,614   EIMEA   392,497     380,673     20,767     0     793,937     471,299     478,573     78,773     -     1,028,645   Asia Pacific     202,664       307,966       23,889       0       534,519       221,456       423,582       29,886       -       674,924     $ 1,328,286     $ 1,158,403     $ 396,580     $ 13,731     $ 2,897,000     $ 1,695,934     $ 1,532,639     $ 520,610     $ -     $ 3,749,183     6192 Table of Contents Note 16:Subsequent Events Acquisitions On January 11, 2022, we completed the acquisition of Fourny NV for a base purchase price of approximately $18,200. Fourny NV, headquartered in Willebroek, Belgium, is a manufacturer of construction and automotive adhesives supplying customers in Europe and China. The acquisition will be included in our Construction Adhesives operating segment. On November 30,2021, we completed the acquisition of certain assets of Tissue Seal, LLC for a base purchase price of $24,750. Tissue Seal, LLC, headquartered in Ann Arbor, Michigan, is a manufacturer of topical tissue adhesives and sutures. The acquisition will be included in our Hygiene, Health and Consumable Adhesives operating segment.       November 27, 2021       Hygiene, Health and Consumable     Engineering     Construction     Corporate               Adhesives     Adhesives     Adhesives     Unallocated     Total   Americas   $ 826,172     $ 504,626     $ 384,576     $ -     $ 1,715,374   EIMEA     425,324       470,466       22,156       -       917,946   Asia Pacific     221,260       396,664       26,787       -       644,711       $ 1,472,756     $ 1,371,756     $ 433,519     $ -     $ 3,278,031       Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   Not applicable.   Item 9A. Controls and Procedures   Disclosure Controls and Procedures   As of the end of the period covered by this report, management conducted an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and Executive Vice President, Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)). Based on its evaluation, our management concluded that, as of November 27, 2021,December 2, 2023, our disclosure controls and procedures were effective (1) to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) to ensure that information require to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to us, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.   Management's Report on Internal Control over Financial Reporting   Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.     Our management assessed the effectiveness of our internal control over financial reporting as of November 27, 2021.December 2, 2023. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013 Framework). Based on its assessment, management concluded that, as of November 27, 2021,December 2, 2023, the Company’s internal control over financial reporting was effective. Ernst and Young LLP, an independent registered public accounting firm, has issued an auditors’attestation report on our internal control over financial reporting as of November 27, 2021,December 2, 2023, which is included elsewhere in this Form 10-K.   Changes in Internal Control over Financial Reporting   There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.   Item 9B. Other Information   Rule 10b5-1 Plan Adoptions and Modifications None. 93 Table of Contents   Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.   None. 62 Table of Contents   PART III   Item 10. Directors, Executive Officers and Corporate Governance   The information under the headings “Proposal 1 - Election of Directors”, “Delinquent Section 16(a) Reports” and “Corporate Governance - Audit Committee” contained in the company's Proxy Statement for the Annual Meeting of Shareholders to be held on April 7, 202211, 2024 (the “2022“2024 Proxy Statement”) is incorporated herein by reference.   The information contained at the end of Item 1. hereof under the heading “Information About Our Executive Officers” is incorporated herein by reference.   Since the date of our 20212023 Proxy Statement, there have been no material changes to the procedures by which shareholders may recommend nominees to our Board of Directors.   The company has a code of business conduct applicable to all of its directors and employees, including its principal executive officer, principal financial officer, principal accounting officer, controller and other employees performing similar functions. A copy of the code of business conduct is available under the Investor Relations section of the company’s website at www.hbfuller.com. The company intends to disclose on its website information with respect to any amendment to or waiver from a provision of its code of business conduct that applies to its principal executive officer, principal financial officer, principal accounting officer, controller and other employees performing similar functions within four business days following the date of such amendment or waiver.   Item 11. Executive Compensation   The information under the headings “Executive Compensation,” “Director Compensation” and “CEO Pay Ratio Disclosure” contained in the 20222024 Proxy Statement is incorporated herein by reference.   Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters   The information under the headingheadings “Security Ownership of Certain Beneficial Owners and Management” and "Equity Compensation Plan Information" contained in the 20222024 Proxy Statement is incorporated herein by reference.   94 Table of Contents Equity Compensation Plan Information                 (c)     (a)   (b)   Number of                 (c)     Number of   Weighted-   securities remaining                 Number of securities     securities to be   average   available for future     (a)   (b)   remaining available for     issued upon   exercise price   issuance under     Number of securities   Weighted-average   future issuance under     exercise of   of outstanding   equity compensation     to be issued upon   exercise price   equity compensation     outstanding   options,   plans (excluding     exercise of outstanding   of outstanding   plans (excluding     options, warrants   warrants and   securities reflected     options, warrants   options, warrants   securities reflected   Period   and rights     rights     in column (a))     and rights   and rights   in column (a))   Equity compensation plans approved by security holders   5,524,757 1   $ 47.77 2   2,253,157 3   5,470,575 1   $ 53.27 2   3,413,652 3 Equity compensation plans not approved by security holders   -     N/A     -       -       N/A       -   Total   5,524,757     $ 47.77     2,253,157       5,470,575     $ 47.77       3,413,652     1Consists of outstanding stock options to acquire 4,972,392 4,941,885 shares of common stock, 358,126283,714 outstanding time-based restricted stock units and 194,239 244,976 outstanding performance-based restricted stock units granted under the Company's equity compensation plans. 2Consists of the weighted average exercise price of stock options granted under the Company's equity compensation plans. 3 Number of shares of common stock remaining available for future issuance under the Second Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan.   Item 13. Certain Relationships and Related Transactions and Director Independence   The information under the headings “Certain Relationships and Related Transactions” and “Corporate Governance - Director Independence” contained in the 20222024 Proxy Statement is incorporated herein by reference.   Item 14. Principal Accountant Fees and Services    The information under the heading “Fees Paid to Independent Registered Public Accounting Firms”Firm” contained in the 20222024 Proxy Statement is incorporated herein by reference.   6395 Table of Contents   PART IV   Item 15. Exhibits and Financial Statement Schedules   (a) Documents filed as part of this report:     1. Consolidated Financial Statements           Consolidated Statements of Income for the fiscal years ended December 2, 2023, December 3, 2022, and November 27, 2021, November 28, 2020, and November 30, 2019.2021.           Consolidated Statements of Comprehensive Income for the fiscal years ended December 2, 2023, December 3, 2022, and November 27, 2021, November 28, 2020, and November 30, 2019.2021.           Consolidated Balance Sheets as of November 27, 2021December 2, 2023 and November 28, 2020.December 3, 2022.           Consolidated Statements of Total Equity for the fiscal years ended December 2, 2023, December 3, 2022, and November 27, 2021, November 28, 2020, and November 30, 2019.2021.           Consolidated Statements of Cash Flows for the fiscal years ended December 2, 2023, December 3, 2022, and November 27, 2021, November 28, 2020, and November 30, 2019.2021.           Notes to Consolidated Financial Statements           Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)     2. Financial Statement Schedules           All financial statement schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.   6496 Table of Contents     3. Exhibits Item Incorporation by Reference 3.1 Restated Articles of Incorporation of H.B. Fuller Company, as amended Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended September 2, 2006 and Exhibit 3.1 to the Current Report on Form 8-K dated October 12, 2016.2006. 3.2 By-Laws of H.B. Fuller Company Exhibit 3.1 to the Current Report on Form 8-K dated December 2, 2015. 3.3 Statement of Cancellation, dated October 13, 2016 Exhibit 3.1 to the Current Report on Form 8-K dated October 12, 2016. 4.1 Form of Certificate for common stock, par value $1.00 per share Exhibit 4.1 to the AnnualCurrent Report on Form 10-K, as amended, for the year ended November 28, 2009.10-Q dated March 30, 2023. 4.2 Indenture, dated February 14, 2017, between H.B. Fuller Company and U.S. Bank National Association, as Trustee Exhibit 4.1 to the Current Report on Form 8-K dated February 9, 2017.           4.3 First Supplemental Indenture, dated February 14, 2017, between H.B. Fuller Company and U.S. Bank National Association, as Trustee, relating to the 4.0000% Notes due 2027 Exhibit 4.2 to the Current Report on Form 8-K dated February 9, 2017. 4.4 Amendment No. 1 to First Supplemental Indenture, dated February 14, 2017 between H.B. Fuller Company and U.S. Bank National Association, as Trustee, relating to the 4.0000% Notes due 2027 Exhibit 4.6 to the Current Report on Form 10-K dated January 31, 2018.           4.5 Second Supplemental Indenture, dated October 20, 2020, between H.B. Fuller Company and U.S. Bank National Association, as Trustee, relating to the 4.250% Notes due 2028.2028   Exhibit 4.1 to the Current Report on Form 8-K dated October 20, 2020. 4.6 Form of Global Note representing the 4.000% Notes due 2027 (included in Exhibit 4.3) Exhibit 4.2 to the Current Report on Form 8-K dated February 9, 2017.           4.7 Form of Global Note representing the 4.250% Notes due 2028 (included in Exhibit 4.5) Exhibit 4.24.1 to the Current Report on Form 8-K dated October 20, 2020. 4.8 Description of Securities   Exhibit 4.8 to the Annual Report on Form 10-K dated January 24, 2020. 10.1 Credit Agreement, dated October 31, 2014, by and among JP Morgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, Citibank, N.A. and Morgan Stanley MUFG Loan Partners, LLC, as co-syndication agents, and various financial institutions Exhibit 1.1 to the Current Report on Form 8-K dated October 31, 2014. 10.2 Credit Agreement dated as of April 12, 2017 among (i) H.B. Fuller Company, a Minnesota corporation, as Borrower, (ii) certain of its subsidiaries party thereto as Foreign Subsidiary Borrowers, (iii) JPMorgan Chase Bank, N.A., as Administrative Agent, (iv) U.S. Bank National Association, Citibank, N.A., and Morgan Stanley MUFG Loan Partners, LLC, as Co-Syndication Agents, (v) Bank of America, N.A., HSBC Bank USA, National Association, and PNC Bank, National Association, as Co-Documentation Agents, and (vi) various other financial institutions party thereto as Lenders, as amended Exhibit 10.1 to the Current Report on Form 8-K dated April 12, 2017, Exhibit 10.1 to the Current Report on Form 8-K dated September 29, 2017, and Exhibit 10.1 to the Current Report on Form 8-K dated November 17, 2017.           10.310.1 Second Amended and Restated Credit Agreement, dated October 20, 2020,February 15, 2023, among H.B. Fuller Company and JPMorgan Chase Bank, N.A., as administrative agent and the various other parties named thereto. Exhibit 10.1 to the Current Report on Form 8-K dated October 20, 2020. February 21, 2023. 10.2 10.4 Guaranty madeAmendment No. 1, dated as of April 12, 2017 byAugust 16, 2023, to the Second Amended and Restated Credit Agreement, dated February 15, 2023, among H.B. Fuller Construction Products Inc., a Minnesota corporation as Initial Guarantor, in favor of J.P. MorganCompany and JPMorgan Chase Bank, N.A., as Administrative Agent Exhibit 10.2 to the Current Report on Form 8-K dated April 12, 2017. 10.5 Term Loan Credit Agreement, dated as of October 20, 2017, by and among H.B. Fuller Company, Morgan Stanley Senior Funding, Inc., as administrative agent and the various other financial institutions party thereto as lenders, as amendedparties named thereto. Exhibit 10.1 to the Current Report on Form 8-K dated October 20, 2017 and Exhibit 10.1 to the Current Report on Form 10-Q dated September 28, 2018. 10.6 Commitment Letter, dated as of September 2, 2017, by and among H.B. Fuller Company and Morgan Stanley Senior Funding, Inc. Exhibit 10.1 to the Current Report on Form 8-K dated September 2, 2017.2023. *10.710.3 Amended and Restated H.B. Fuller Company Year 2000 Stock Incentive Plan Exhibit 10.1 to the Current Report on Form 8-K dated April 5, 2006. 65 Table of Contents *10.810.4 H.B. Fuller Company Supplemental Executive Retirement Plan II – 2008 as amended Exhibit 10.2 to the Current Report on Form 8-K dated December 19, 2007, 2007. 10.5 First Declaration of Amendment dated December 15, 2008 to the H.B. Fuller Company Supplemental Executive Retirement Plan II - 2008 Exhibit 10.5 to the Annual Report on Form 10-K for the year ended November 29, 2008. 97 Table of Contents 10.6 Second Declaration of Amendment dated May 31, 2011 to the H.B. Fuller Company Supplemental Executive Retirement Plan II - 2008 and Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended May 28, 2011. 10.7 *10.9   Third Declaration of Amendment ofdated September 30, 2021 to the H.B. Fuller Company Supplemental Executive Retirement Plan II - 2008   Exhibit 10.9 to the Annual Report on Form 10-K for the year ended November 27, 2021.           *10.1010.8 H.B. Fuller Company Executive Benefit Trust dated October 25, 1993 between H.B. Fuller Company and U.S. Bank, National Association, as Trustee, as amended, relating to the H.B. Fuller Company Supplemental Executive Retirement Plan Exhibit 10(k) to the Annual Report on Form 10-K for the year ended November 29, 1997. *10.9 Amendments to H.B. Fuller Company Executive Benefit Trust, dated October 1, 1997 and March 2, 1998, between H.B. Fuller Company and First Trust National Association, as Trustee, relating to the H.B. Fuller Company Supplemental Executive Retirement Plan Exhibit 10(k) to the Annual Report on Form 10-K405 for the year ended November 28, 1998, *10.10 Amendment to the H.B. Fuller Company Executive Benefit Trust dated December 19, 2007 Exhibit 10.3 to the Current Report on Form 8-K dated December 19, 2007 and 2007. *10.11 Amendment to the H.B. Fuller Company Executive Benefit Trust dated March 31, 2009 Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended May 30, 2009. *10.1110.12 H.B.FullerH.B. Fuller Company Key Employee Deferred Compensation Plan (2021 Restatement) Exhibit 10.11 to the Annual Report on Form 10-K for the year ended November 27, 2021.     *10.1210.13 Form of Change in ControlChange-in-Control Agreement between H.B. Fuller Company and each of its executive officers   Exhibit 10.11 to the Annual Report on Form 10-K for the year ended November 29, 2008.           *10.13 10.14 Form of Change-in-Control Agreement between H.B. Fuller Company and each of its executive officers for agreements entered into after January 24, 2019 Exhibit 10.9 to the Current Report on Form 8-K dated January 24, 2019. *10.1410.15 Form of Severance Agreement between H.B. Fuller Company and each of its executive officers Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended May 31, 2008. *10.16 Form of Severance Agreement between H.B. Fuller Company and each of its executive officers hired on or after October 2023 Filed herewith.          *10.15 Form of Non-Qualified Stock Option Agreement under the Amended and Restated H.B. Fuller Company Year 2000 Stock Incentive Plan for awards made on or after January 20, 2011 Exhibit 10.1 to the Current Report on Form 8-K dated January 20, 2011. *10.16 Form of Non-Qualified Stock Option Agreement under the Amended and Restated H.B. Fuller Company Year 2000 Stock Incentive Plan for awards made on or after January 26, 2012 Exhibit 10.1 to the Current Report on Form 8-K dated January 26, 2012 *10.17 Form of Non-Qualified Stock Option Agreement under the Amended and Restated H.B. Fuller Company Year 2000 Stock Incentive Plan for awards made on or after January 24, 2013 Exhibit 10.1 to the Current Report on Form 8-K dated January 24, 2013. *10.18 Form of Non-Qualified Stock Option Agreement under the H.B. Fuller Company 2013 Master Incentive Plan for awards made on or after January 23, 2014   Exhibit 10.2 to the Current Report on Form 8-K dated January 23, 2014. *10.19 Form of Non-Qualified Stock Option Agreement under the H.B. Fuller Company 2016 Master Incentive Plan for awards made on or after April 7, 2016 Exhibit 10.1 to the Current Report on Form 8-K dated April 6, 2016.   98 Table of Contents *10.20 Form of Non-Qualified Stock Option Agreement under the H.B. Fuller Company 2016 Master Incentive Plan for awards made on or after October 20, 2017 Exhibit 10.2 to the Current Report on Form 8-K dated October 20, 2017. *10.21 Form of Non-Qualified Stock Option Agreement under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after April 12, 2018   Exhibit 10.1 to the Current Report on Form 8-K dated April 18, 2018. 66 Table of Contents *10.22 Form of Restricted Stock Unit Agreement under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after April 12, 2018 Exhibit 10.2 to the Current Report on Form 8-K dated April 18, 2018. *10.23 Form of Restricted Stock Unit Award Agreement for the CEO under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after April 12, 2018 Exhibit 10.3 to the Current Report on Form 8-K dated April 18, 2018. *10.24 Form of Performance Share Award Agreement under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after April 12, 2018 Exhibit 10.4 to the Current Report on Form 8-K dated April 18, 2018.           *10.25 Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after April 12, 201810.22   Exhibit 10.5 to the Current Report on Form 8-K dated April 18, 2018. *10.26 Form of Non-Qualified Stock Option Agreement under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after January 24, 2019   Exhibit 10.1 to the Current Report on Form 8-K dated January 24, 2019.         *10.27 Form of Performance-Based Non-Qualified Stock Option Agreement under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after January 24, 201910.23   Exhibit 10.2 to the Current Report on Form 8-K dated January 24, 2019. *10.28 Form of Restricted Stock Unit Agreement under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after January 24, 2019 Exhibit 10.3 to the Current Report on Form 8-K dated January 24, 2019. *10.29 Form of Restricted Stock Unit Agreement for the CEO under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after January 24, 2019 Exhibit 10.4 to the Current Report on Form 8-K dated January 24, 2019. *10.30 Form of Performance Share Award Agreement under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after January 24, 2019 Exhibit 10.5 to the Current Report on Form 8-K dated January 24, 2019. *10.31 Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the H.B. Fuller Company 2018 Master Incentive Plan for awards made on or after January 24, 2019 Exhibit 10.6 to the Current Report on Form 8-K dated January 24, 2019. *10.32 Form of Non-Qualified Stock Option Agreement under the H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 2, 2020 Exhibit 10.1 to the Current Report on Form 8-K dated April 2, 2020.           *10.3310.24 Form of Restricted Stock Unit Award Agreement under the H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 2, 2020 Exhibit 10.2 to the Current Report on Form 8-K dated April 2, 2020. *10.25   *10.34 Form of Restricted Stock Unit Award Agreement for the CEO under the H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 2, 2020 Exhibit 10.3 to the Current Report on Form 8-K dated April 2, 2020.           *10.3510.26 Form of Performance Share Award Agreement under the H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 2, 2020 Exhibit 10.4 to the Current Report on Form 8-K dated April 2, 2020. *10.3610.27 Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 2, 2020 Exhibit 10.5 to the Current Report on Form 8-K dated April 2, 2020.           *10.3710.28   Form of Restricted Stock Unit (CEO) Award Agreement under the H.B. Fuller Company 2020 Master Incentive Plan   Exhibit 10.1 to the Current Report on Form 8-K dated January 27, 2021.           *10.3810.29   Form of Performance-Based Non-Qualified Stock Option (CEO TSR) Award Agreement under the H.B. Fuller Company 2020 Master Incentive Plan   Exhibit 10.2 to the Current Report on Form 8-K dated January 27, 2021.           *10.3910.30 Form of Non-Qualified Stock Option Agreement under the Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after January 24, 2022 Exhibit 10.1 to the Current Report on Form 10-K dated January 24, 2022. *10.31 Form of Restricted Stock Unit Award Agreement under the Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after January 24, 2022 Exhibit 10.2 to the Current Report on Form 10-K dated January 24, 2022. *10.32 Form of Performance Share Award Agreement under the Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after January 24, 2022 Exhibit 10.3 to the Current Report on Form 10-K dated January 24, 2022. *10.33 Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 7, 2022 Exhibit 10.1 to the Current Report on Form 10-Q dated June 23, 2022. *10.34 Form of Non-Qualified Stock Option Agreement under the Second Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 6, 2023 Exhibit 10.2 to the Current Report on Form 10-Q dated June 29, 2023. *10.35 Form of Restricted Stock Unit Award Agreement under the Second Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 6, 2023 Exhibit 10.3 to the Current Report on Form 10-Q dated June 29, 2023. 99 Table of Contents   *10.36 Form of Performance Share Award Agreement under the Second Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 6, 2023 Exhibit 10.4 to the Current Report on Form 10-Q dated June 29, 2023. *10.37 Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the Second Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan for awards made on or after April 6, 2023 Exhibit 10.1 to the Current Report on Form 10-Q dated June 23, 2022. *10.38 H.B. Fuller Company Defined Contribution Restoration Plan (As Amended and Restated Effective January 1, 2008), as amended Exhibit 10.4 to the Current Report on Form 8-K dated December 19, 20072007. *10.39 First Amendment of the H.B. Fuller Company Defined Contribution Restoration Plan (2008 Amendment and Restatement) Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended May 31, 2008. *10.40 Second Amendment of the H.B. Fuller Company Defined Contribution Restoration Plan (2008 Amendment and Restatement) Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 1, 2019. *10.41 Third Amendment of the H.B. Fuller Company Defined Contribution Restoration Plan Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 2, 2019, Exhibit 10.1 to2019. *10.42 Fourth Amendment of the Quarterly Report on Form 10-Q for the quarter ended JuneH.B. Fuller Company Defined Contribution Restoration Plan (As Amended and Restated Effective January 1, 2019, and 2008) Exhibit 10.43 to the Annual Report on Form 10-K for the year ended November 28, 2020. 67 Table of Contents *10.4010.43 Fifth Amendment to the H.B. Fuller Company Defined Contribution Restoration Plan (As Amended and Restated Effective January 1, 2008), as amended Exhibit 10.40 to the Annual Report on Form 10-K for the year ended November 27, 2021.     *10.44 *10.41 H.B. Fuller Company Directors’ Deferred Compensation Plan (2008 Amendment and Restatement), as amendedRestatement) Exhibit 10.22 to the Annual Report on Form 10-K for the year ended November 29, 20082008. 100 Table of Contents *10.45 First Amendment of H.B. Fuller Company Directors’ Deferred Compensation Plan (2008 Amendment and Restatement) Exhibit 10.23 to the Annual Report on Form 10-K for the year ended November 29, 2008. *10.4210.46 H.B. Fuller Company 2009 Director Stock Incentive Plan Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended May 30, 2009. *10.43   *10.47 H.B. Fuller Company Management Short-Term Incentive Plan for Executive Officers   Exhibit 10.7 to the Current Report on Form 8-K dated January 24, 2019. Filed herewith.            *10.44 *10.48   H.B. Fuller Company Management Short-Term Incentive Plan for Executive Officers Exhibit 10.1 to the Current Report on Form 8-K dated January 15, 2020.  *10.45 H.B. Fuller Company Management Long-Term Incentive Plan Exhibit 10.8 to the Current Report on Form 8-K dated January 24, 2019.  *10.46 Amended and Restated H.B. Fuller Company Annual and Long-Term Incentive Plan Exhibit 10.1 to the Current Report on Form 8-K dated April 3, 2008  *10.47 H.B. Fuller Company 2013 Master Incentive Plan   Annex B to the H.B. Fuller Company Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on February 27, 2013.      *10.48 *10.49   H.B. Fuller Company 2016 Master Incentive Plan   Annex B to the H.B. Fuller Company Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on February 24, 2016.            *10.49 *10.50   H.B. Fuller Company 2018 Master Incentive Plan   Annex B to the H.B. Fuller Company Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on February 28, 2018.           *10.50 10.51   Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan   Annex B to the H.B. Fuller Company Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on February 24, 2021. *10.52 Second Amended and Restated H.B. Fuller Company 2020 Master Incentive Plan Annex B to the H.B. Fuller Company Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on February 22, 2023.           21   List of Subsidiaries             23.1   Consent of Ernst & Young LLP             23.2 24   ConsentPower of KPMG LLPAttorney         24 Power of Attorney 31.1   302 Certification – James J. OwensCeleste B. Mastin   101 Table of Contents   31.2   302 Certification – John J. Corkrean       32.1   906 Certification – James J. OwensCeleste B. Mastin       32.2   906 Certification – John J. Corkrean       97.1 Executive and Key Manager Compensation Recovery Policy Filed herewith. 101   The following materials from the H.B. Fuller Company Annual Report on Form 10-K for the fiscal year ended November 27, 2021December 2, 2023 formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Total Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.             104   Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)                 * Asterisked items are management contracts or compensatory plans or arrangements required to be filed.   (b) See Exhibit Index and Exhibits attached to this Form 10-K.   Item 16. Form 10-K Summary None   68102 Table of Contents   SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.     H.B. FULLER COMPANY             By: /s/ James J. OwensCeleste B. Mastin    Dated: January 25, 202224, 2024   JAMES J. OWENSCELESTE B. MASTIN       President and Chief Executive Officer     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:   Signature   Title   /s/ James J. OwensCeleste B. Mastin     President and Chief Executive Officer and Director JAMES J. OWENS CELESTE B. MASTIN   (Principal Executive Officer)   /s/ John J. Corkrean     Executive Vice President, Chief Financial Officer JOHN J. CORKREAN   (Principal Financial Officer)       /s/ Robert J. Martsching   Vice President, Controller  ROBERT J. MARTSCHING   (Principal Accounting Officer)                                              *   Director DANIEL L. FLORNESS           *   Director THOMAS W. HANDLEY           *   Director  MICHAEL J. HAPPE           *   Director  RUTH S. KIMMELSHUE            *   Director CHARLES T. LAUBER * Director  LEE R. MITAU           *   Director DANTE C. PARRINI * Director TERESA J. RASMUSSEN           *   Director JOHN C. VAN RODEN, JR. SRILATA A. ZAHEER              * by /s/ Timothy J. KeenanGregory O. Ogunsanya   Director TIMOTHY J. KEENAN,GREGORY O. OGUNSANYA, Attorney in Fact           Dated: January 25, 202224, 2024       69103