Notes to Consolidated Financial Statements

5. GOODWILL AND INTANGIBLE ASSETS

The following table displays the intangible assets that continue to be subject to amortization and intangible assets not subject to amortization as of November 30, 2005 and 2004:

	2005						2004
(millions)	Gross carrying amount			Accumulated amortization			Gross carrying amount			Accumulated amortization
Amortizable intangible assets	$	10.0		$	1.2		$	.6		$	.3
Non-amortizable intangible
assets:
Brand name		141.4			-			106.4			-
Goodwill		739.0			75.1			793.7			80.8
Trademark		8.9			.8			9.7			1.2
		889.3			75.9			909.8			82.0
Total goodwill and intangible
assets	$	899.3		$	77.1		$	910.4		$	82.3
The changes in the carrying amount of goodwill by segment for the years ended November 30, 2005 and 2004 are as follows:
	2005						2004
(millions)	Consumer			Industrial			Consumer			Industrial
Beginning of year	$	664.9		$	48.0		$	664.9		$	43.8
Goodwill acquired		-			-			59.4			-
Goodwill transferred
and deferred taxes		13.3			-			(106.4	)		-
Foreign currency fluctuations		(58.7	)		(3.6	)		47.0			4.2
End of year	$	619.5		$	44.4		$	664.9		$	48.0

6. INVESTMENTS IN AFFILIATES

Summarized year-end information from the financial statements of unconsolidated affiliates representing 100% of the businesses follows:

(millions)	2005	2004	2003
Net sales	$ 460.3	$ 428.3	$ 403.0
Gross profit	183.7	157.3	159.6
Net income	41.3	28.8	32.6
Current assets	$ 181.5	$ 189.2	$ 168.2
Noncurrent assets	99.0	94.1	101.7
Current liabilities	102.4	97.4	100.7
Noncurrent liabilities	13.9	23.4	25.5

Our share of undistributed earnings of affiliates was $57.3 million at November 30, 2005. Royalty income from unconsolidated affiliates was $10.5 million, $9.7 million and $9.3 million for 2005, 2004 and 2003, respectively.

7. FINANCING ARRANGEMENTS

Our outstanding debt is as follows:

(millions)	2005			2004
Short-term borrowings
Commercial paper⁽¹⁾	$	104.2		$	134.4
Other		1.2			5.8
	$	105.4		$	140.2
Weighted-average interest rate
of short-term borrowings at year-end		4.00	%		2.12	%
Long-term debt
5.78%-7.77% medium-term notes due 2006	$	47.0		$	79.0
6.40% - 6.80% medium-term notes
due 2006 to 2008 ⁽²⁾ ⁽³⁾		298.6			298.4
3.35% medium-term notes due 2009 ⁽⁴⁾		47.8			48.6
7.63%-8.12% medium-term notes due 2024		55.0			55.0
Other		16.2			17.0
		464.6			498.0
Less current portion		.7			33.0
	$	463.9		$	465.0

(1)	The variable interest rate on $75 million of commercial paper is hedged by interest rate swaps through 2011. Net interest payments are fixed at 6.35% during this period.
(2)	Interest rate swaps, settled upon the issuance of the medium-term notes, effectively fixed the interest rate on $294 million of the notes at a weighted average fixed rate of 7.62%.
(3)	The fixed interest rate on $100 million of 6.40% medium-term notes due in 2006 is effectively converted to a variable rate by interest rate swaps through 2006. Net interest payments are based on LIBOR plus 3.60% during this period.
(4)	The fixed interest rate on the 3.35% medium-term notes due in 2009 is effectively converted to a variable rate by interest rate swaps through 2009. Net interest payments are based on LIBOR minus .21 % during this period.

Maturities of long-term debt during the years subsequent to November 30, 2006 are as follows (in millions):

2007 - $0.5

2008 - $150.1

2009 - $48.1

2010 - $14.3

Thereafter-$250.9

Subsequent to our 2005 fiscal year end, we issued $200 million of 5.20% medium-term notes which are due in 2015. The net proceeds will be used to repay long-term debt maturing in 2006. Since we have the ability and intent to refinance, $195.9 million of current maturity of long-term debt has been reclassified to long-term in the 2005 balance sheet.

McCORMICK & COMPANY 2005 ANNUAL REPORT