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McCORMICK & COMPANY 2007 ANNUAL REPORT


	MANAGEMENT'S DISCUSSION AND ANALYSIS
	OFF-BALANCE SHEET ARRANGEMENTS We had no off-balance sheet arrangements as of November 30, 2007 and 2006. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 160, “Noncontrolling Interests in Consolidated Financial Statements” This standard outlines the accounting and reporting for ownership interest in a subsidiary held by parties other than the parent. SFAS No. 160 is effective for our our first quarter of 2010. We have not yet determined the impact from adoption of this new accounting pronouncement on our financial statements. In December 2007, the FASB issued SFAS No. 141R, “Business Combinations.” This standard establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. This statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS No.141R is effective for us for acquisitions made after November 30, 2009. We have not yet determined the impact from adoption of this new accounting pronouncement on our financial statements. In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans.” This standard requires us to (a) record an asset or a liability on our balance sheet for our pension plans’ overfunded or underfunded status (b) record any changes in the funded status of our pension and postretirement plans in the year in which the changes occur (reported in comprehensive income) and (c) measure our pension and postretirement assets and liabilities at November 30 versus our current measurement date of September 30. The requirements to record the funded status and provide additional disclosures are effective this year and are further disclosed in note 8 of the financial statements. Changes in funded status will be recorded beginning in 2008. The requirement to change our measurement date will be effective beginning with our year ending		November 30, 2009. The impact of measuring the funded status as of November 30 will be dependent upon interest rates, market performance and other factors at the measurement date and therefore cannot be determined. In September 2006, the FASB issued SFAS No.157, “Fair Value Measurements.” This standard defines fair value and provides guidance for measuring fair value and the necessary disclosures. This standard does not require any new fair value measurements but rather applies to all other accounting pronouncements that require or permit fair value measurements. In December 2007, the FASB proposed a one-year deferral for non-financial assets and liabilities to comply with SFAS No.157. If adopted as proposed, SFAS No.157 will be effective for our first quarter ending February 29, 2008 for all financial assets and liabilities and effective for non-financial assets and liabilities for our first quarter ending February 28, 2009. We do not expect any material impact from initial adoption of this new accounting pronouncement on our financial statements for our first quarter ending February 29, 2008. We have not yet determined the impact on our financial statements from adoption of SFAS No.157 as it pertains to non-financial assets and liabilities for our first quarter ending February 28, 2009. In June 2006, the FASB issued Interpretation 48 (FIN 48), “Accounting for Uncertainty in Income Taxes.” FIN 48 clarifies the accounting for income taxes when it is uncertain how an income or expense item should be treated on an income tax return. FIN 48 describes when and in what amounts an uncertain tax item should be recorded in the financial statements, provides guidance on recording interest and penalties and provides guidance on accounting and reporting for income taxes in interim periods. FIN 48 is effective for our first quarter ending February 29, 2008. Based on our estimates we anticipate that we will record a charge to retained earnings for uncertain tax positions in the range of $7 to $12 million upon adoption of FIN 48.

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