Consolidated Cash Flow Statement

for the year ended November 30 (millions) 2006 2005 2004
Operating activities
Net income
  $ 202.2       $ 214.9       $ 214.5    
Adjustments to reconcile net income to
   net cash provided by operating activities:
                 
   Depreciation and amortization   86.8     74.6     72.0  
   Stock-based compensation   24.9          
   Gain on sale of unconsolidated operations   (26.8        
   Deferred income taxes   (26.0   5.9     (1.7
   Income from unconsolidated operations   (19.9   (20.6   (14.6
   Changes in operating assets and liabilities:
      Receivables
  14.9     16.8     (35.5
      Inventories   (42.3   (3.0   33.8  
      Prepaid allowances   (3.1   14.5     27.2  
      Trade accounts payable   19.1     9.4     5.7  
      Other assets and liabilities   62.6     (9.5   31.4  
Dividends received from unconsolidated affiliates   18.4     29.2     9.6  
   Net cash provided by operating activities   310.8     332.2     342.4  
Investing activities
Acquisitions of businesses
  (102.6   (5.5   (74.5
Capital expenditures   (84.8   (66.8   (62.7
Proceeds from redemption of joint venture   9.2          
Proceeds from sale of property, plant and equipment   6.1     2.3     2.8  
   Net cash used in investing activities   (172.1   (70.0   (134.4
Financing activities
Short-term borrowings, net
  (24.8   (34.8   (14.3
Long-term debt borrowings   299.7         50.1  
Long-term debt repayments   (197.7   (32.8   (16.5
Proceeds from exercised stock options   46.5     45.0     53.0  
Common stock acquired by purchase   (155.9   (185.6   (173.8
Dividends paid   (95.0   (86.2   (76.9
   Net cash used in financing activities   (127.2   (294.4   (178.4
Effect of exchange rate changes on cash and cash equivalents   7.2     (7.8   15.6  
Increase /(decrease) in cash and cash equivalents   18.7     (40.0   45.2  
Cash and cash equivalents at beginning of year   30.3     70.3     25.1  
Cash and cash equivalents at end of year $ 49.0   $ 30.3   $ 70.3  

See Notes to Consolidated Financial Statements

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McCORMICK & COMPANY 2006 ANNUAL REPORT

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