UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

McCORMICK & COMPANY, INCORPORATED

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:  Not applicable.

Indicate By check mark if the registrant is a well-know seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ý    No  o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  o    No  ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý    No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ý

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  Yes  ý    No  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  o    No  ý

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

The aggregate market value of the voting common equity held by non-affiliates at May 31, 2005: $333,132,269.

The aggregate market value of the non-voting common equity held by non-affiliates at May 31, 2005: $4,004,841,587.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

DOCUMENTS INCORPORATED BY REFERENCE

PART I

As used herein, the “Registrant” means McCormick & Company, Incorporated and its subsidiaries, unless the context otherwise requires.

Item 1.  Business

The Registrant, a diversified specialty food company, is a global leader in the manufacture, marketing and distribution of spices, herbs, seasonings and other flavors to the entire food industry. The Registrant was formed in 1915 under Maryland law as the successor to a business established in 1889.

The Registrant operates in two business segments: consumer and industrial. The Registrant sold its packaging segment during the third quarter of 2003. The consumer segment sells spices, herbs, extracts, seasoning blends, sauces, marinades and specialty foods to the consumer food market under a variety of brands, including “McCormick” and “Zatarain’s” in the US, “Ducros” and “Silvo” in continental Europe, “Club House” in Canada and “Schwartz” in the U.K. The industrial segment sells seasoning blends, spices, herbs, wet flavors, compound flavors and coating systems to food manufacturers and the food service industry, served both directly and indirectly through distributors.

Please refer to pages 14, 15 and 21, for discussions on our Consumer and Industrial businesses, and page 5, “A Discussion with Bob Lawless,” of the Registrant’s Annual Report to Stockholders for 2005 for a description of the business. Such pages of the Registrant’s Annual Report to Stockholders for 2005 are incorporated herein by reference.

For financial information about the Registrant’s business segments, please refer to pages 22 through 27, “Management’s Discussion and Analysis,” and Note 16, “Business Segments and Geographic Areas” of the Notes to Consolidated Financial Statements on pages 54 and 55 of the Annual Report to Stockholders for 2005, which pages are incorporated herein by reference.

Raw Materials

The most significant raw materials to the Registrant are cheese, packaging supplies, pepper, capsicums, garlic, onion and vanilla.  Black pepper, vanilla beans and other spices and herbs are generally sourced from countries other than the United States. The Registrant is not aware of any government restrictions or other factors that would have a material adverse effect on the availability of these raw materials. Because the raw materials are agricultural products, they may be subject to price volatility caused by weather and other unpredictable factors.  The Registrant responds to this volatility in a number of ways including strategic raw material purchases, purchases of raw material for future delivery and customer price adjustments.

Customers

The Registrant’s products are sold directly to customers and also through brokers, wholesalers and distributors. In the consumer segment, products are generally resold to consumers through grocery, mass merchandise, discount and drug stores. In the industrial segment, products are used by food and beverage manufacturers as ingredients for their finished goods and by food service customers as ingredients for menu items to enhance the flavor of their foods. Customers for the industrial segment include food processors and the food service industry, which are supplied both directly and through distributors.

The Registrant has a large number of customers for its products.  No single customer accounted for as much as 10% of consolidated net sales in 2005. Sales to the Registrant’s five largest customers represented approximately 29.2% of consolidated net sales.

The dollar amount of backlog orders of the Registrant’s business is not material to an understanding of the Registrant’s business, taken as a whole.  No material portion of the Registrant’s business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the U.S. Government.

Trademarks, Licenses and Patents

The Registrant owns a number of trademark registrations.  Although in the aggregate these trademarks may be material to the Registrant’s business, the loss of any one of those trademarks, with the exception of the Registrant’s “McCormick,” “Zatarain’s,” “Schwartz,” “Club House” and “Ducros”  trademarks, would not have a material adverse effect on the Registrant’s business. The “McCormick” trademark is extensively used by the Registrant in connection with the sale of virtually all of the Registrant’s food products worldwide. The terms of the trademark registrations are as prescribed by law

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and the registrations will be renewed for as long as the Registrant deems them to be useful.

The Registrant has entered into a number of license agreements authorizing the use of its trademarks by affiliated and non-affiliated entities. The loss of these license agreements would not have a material adverse effect on the Registrant’s business.  The term of the license agreements is generally 3 to 5 years or until such time as either party terminates the agreement.  Those agreements with specific terms are renewable upon agreement of the parties.

The Registrant owns various patents, but they are not viewed as material to the Registrant’s business.

Seasonal Nature of Business

Due to seasonal factors inherent in the business, the Registrant’s sales and income are lower in the first two quarters of the fiscal year and increase in the third and fourth quarters. The seasonality reflects customer and consumer buying patterns, primarily in the consumer segment.

Working Capital

In order to meet increased demand for its consumer products during its fourth quarter, the Registrant usually builds its inventories during the third quarter. The Registrant generally finances working capital items (inventory and receivables) through short-term borrowings, which include the use of lines of credit and the issuance of commercial paper.  For a description of the Registrant’s liquidity and capital resources, see Note 7 “Financing Arrangements” of the Notes to Consolidated Financial Statements on pages 47 and 48 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference, and the “Financial Condition” section of “Management’s Discussion and Analysis” on pages 27 through 29 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference.

Competition

The Registrant is a global leader in the manufacture and sale of spices, herbs, extracts, seasonings and flavorings and competes in a geographic market that is international and highly competitive. For further discussion, see pages 21 and 22 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference.

Research and Development

Many of the Registrant’s products are prepared from confidential formulae developed by its research laboratories and product development teams. Expenditures for research and development were $42.1 million in 2005, $39.3 million in 2004 and $33.2 million in 2003. The amount spent on customer-sponsored research activities is not material.

Environmental Regulations

Compliance with federal, state and local provisions related to protection of the environment has had no material effect on the Registrant’s business. There were no material capital expenditures for environmental control facilities in 2005 and there are no material expenditures planned for such purposes in 2006.

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Employees

The Registrant had approximately 8,000 employees worldwide as of December 31, 2005. The Registrant believes its relationship with employees to be good. The Registrant has no collective bargaining contracts in the United States. At the Registrant’s foreign subsidiaries, approximately 1,200 employees are covered by collective bargaining agreements or similar arrangements.

Financial Information About Geographic Locations

For information on the net sales and long-lived assets of the Registrant, see “Geographic Areas” within Note 16 of the Notes to Consolidated Financial Statements on pages 54 and 55 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference, and the “Market Risk Sensitivity” section of “Management’s Discussion and Analysis” on pages 31 through 33 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference.

Foreign Operations

The Registrant is subject in varying degrees to certain risks typically associated with a global business, such as local economic and market conditions, restrictions on investments, royalties and dividends and exchange rate fluctuations. Approximately 39% of net sales in 2005 were from international operations.

Forward-Looking Information

For a discussion of forward-looking information, see the “Forward-Looking Information” section of “Management’s Discussion and Analysis” on page 35 of the Registrant’s Annual Report to Stockholders for 2005, which page is incorporated by reference.

Available Information

The Registrant’s Internet website address is: www.mccormick.com. The Registrant makes available free of charge through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the SEC.  The Registrant’s website also includes the Registrant’s Corporate Governance Guidelines, Business Ethics Policy and charters of its Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee.  These documents are also available in print to any shareholder upon request.

Item 1A.  Risk Factors

The following are certain risk factors that could affect the Registrant’s business, financial results and results of operations. These risk factors should be considered in connection with evaluating the forward-looking statements contained in this Annual Report on Form 10-K because these factors could cause the actual results and conditions to differ materially from those projected in forward-looking statements. Before you buy the Registrant’s common stock, you should know that making such an investment involves some risks, including the risks described below. The risks that have highlighted here are not the only ones that the Registrant faces.  If any of the risks actually occur, the Registrant’s business, financial condition or results of operations could be negatively affected. In that case, the trading price of the Registrant’s stock could decline, and you may lose all or part of your investment.

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Fluctuations In The Foreign Currency Markets May Negatively Impact Us.

The Registrant is exposed to fluctuations in foreign currency cash flows primarily related to raw material purchases. The Registrant is also exposed to fluctuations in the value of foreign currency investments in subsidiaries and unconsolidated affiliates and cash flows related to repatriation of these investments. Additionally, the Registrant is exposed to volatility in the translation of foreign currency earnings to U.S. dollars. Primary exposures include the U.S. dollar versus the functional currencies of our major markets (Euro, British pound sterling, Canadian dollar, Australian dollar, Mexican peso, Chinese renminbi and Japanese yen). On occasion, the Registrant may enter into forward and option contracts to manage these foreign currency risks. However, these contracts may not effectively limit or eliminate the Registrant’s exposure to a decline in operating results due to foreign currency translation. Therefore, the Registrant cannot assure you that future exchange rate fluctuations will not have a negative impact on its business, financial position or operating results.

Increases In Interest Rates May Negatively Impact Us.

The Registrant has total outstanding short-term borrowings of approximately $105.4 million at an average interest rate of approximately 4.0% on November 30, 2005. The Registrant’s policy is to manage our interest costs using a mix of fixed and variable rate debt. The Registrant also uses interest rate swaps to achieve a desired proportion of fixed and variable rate debt. The Registrant utilizes derivative financial instruments to enhance its ability to manage risk, including interest rate exposures that exist as part of its ongoing business operations. The Registrant does not enter into contracts for trading purposes, nor is it a party to any leveraged derivative instrument. The Registrant’s use of derivative financial instruments is monitored through regular communication with senior management and the utilization of written guidelines. However, its use of these instruments may not effectively limit or eliminate its exposure to a decline in operating results due to changes in interest rates. Therefore, the Registrant cannot assure you that future interest rate increases will not have a material negative impact on its business, financial position or operating results.

Price Fluctuations In The Commodity Markets May Negatively Impact Us.

The Registrant purchases certain raw materials that are subject to price volatility caused by weather and other unpredictable factors. The most significant raw materials are cheese, packaging supplies, pepper, capsicums, garlic and onion. While future movements of raw material costs are uncertain, a variety of programs, including strategic raw material purchases, purchases of raw material for future delivery and customer price adjustments, help it address this risk. Generally, the Registrant does not use derivatives to manage the volatility related to this risk. Even if it did use such instruments, however, their use might not effectively limit or eliminate its exposure to a decline in operating results due to changes in commodity prices. Therefore, the Registrant cannot assure you that future commodity price fluctuations will not have a negative impact on its business, financial position or operating results.

Item 1B.  Unresolved Staff Comments

None.

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Item 2.  Properties

The Registrant’s principal executive offices and primary research facilities are owned and are located in suburban Baltimore, Maryland.

The following is a list of the Registrant’s principal manufacturing properties, all of which are owned except for the facilities in Commerce, California and Sydney, Australia, which are leased:

United States

Hunt Valley, Maryland – consumer and industrial

(4 principal plants)

Salinas, California – consumer and industrial

Commerce, California – consumer

Dallas, Texas – industrial

Atlanta, Georgia – industrial

South Bend, Indiana – industrial

Canada

London, Ontario – consumer and industrial

Mexico

Cuautitlan de Romero Rubio, Mexico – industrial

United Kingdom

Haddenham, England – consumer and industrial

Paisley, Scotland – industrial

Littleborough, England – consumer and industrial

France

Carpentras – consumer and industrial

Monteux - - consumer (2 principal plants)

The Netherlands

Papendrecht - - consumer

Australia

Melbourne – consumer and industrial

Sydney – consumer and industrial

China

Shanghai – consumer and industrial

Guangzhou – consumer and industrial

In addition to distribution facilities and warehouse space available at its manufacturing facilities, the Registrant leases regional distribution facilities in Belcamp, Maryland, Salinas, California, and Dallas, Texas and owns a distribution facility in Monteux, France.  The Registrant also owns, leases or contracts several other properties used for manufacturing consumer and industrial products and for sales, warehousing, distribution and administrative functions.

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The Registrant believes its plants are well maintained and suitable for their intended use. The Registrant further believes that these plants generally have adequate capacity and can accommodate seasonal demands, changing product mixes and certain additional growth. Many additions and improvements have been made to these facilities over the years and the plants’ manufacturing equipment includes equipment of the latest type and technology.

Item 3.  Legal Proceedings

There are no material pending legal proceedings in which the Registrant or any of its subsidiaries is a party or in which any of their property is the subject.

Item 4.  Submission of Matters to a Vote of Security Holders

No matter was submitted during the fourth quarter of Registrant’s fiscal year 2005 to a vote of security holders.

Executive Officers of the Registrant

In addition to the executive officers described in the Registrant’s Proxy Statement for 2005 incorporated by reference in Item 10 of this Report, the following individuals are also executive officers of the Registrant: Paul C. Beard, Kenneth A. Kelly, Jr., Lawrence E. Kurzius, Charles T. Langmead, Robert W. Skelton, Mark T. Timbie and Alan D. Wilson.

Mr. Beard is 51 years old and has had the following work experience during the last five years: 3/02 to present – Vice President, Finance & Treasurer; 1/00 to 3/02 – Vice President & General Manager, Global Restaurant Division.

Mr. Kelly is 51 years old and has had the following work experience during the last five years: 2/00 to present – Vice President and Controller; 7/97 to 2/00 – Vice President, Finance & Administration/McCormick Schilling Division.

Mr. Kurzius is 48 years old and has had the following work experience during the last five years: 9/05 to present – President, U.S. Consumer Foods; 1/05 to 9/05 Vice President and General Manager, Sales and Marketing; 1/97 to 12/04 Mr. Kurzius was President and CEO of Zatarain’s Brands, Inc., which was acquired by McCormick in 2003.  Mr. Kurzius joined Zatarain’s in 1991.

Mr. Langmead is 48 years old and has had the following work experience during the last five years:  9/05 to present – President, U.S. Industrial Group; 2/02 to 9/05 - Vice President & General Manager, Food Service & Global Restaurant Divisions; 4/99 to 2/02 – Vice President & General Manager, Food Service Division.

Mr. Skelton is 58 years old and has had the following work experience during the last five years: 11/02 to present – Senior Vice President, General Counsel & Secretary; 6/97 to 11/02 - Vice President, General Counsel & Secretary.

Mr. Timbie is 51 years old and has had the following work experience during the last five years: 9/05 to present – President, International; 1/04 to 9/05 – President, International Consumer Products Group; 3/01 to 12/03 – President, McCormick Canada; 10/99 to 2/01 – Vice President & General Manager, Perimeter Group/Consumer Markets.

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Mr. Wilson is 48 years old and has had the following work experience during the last five years: 9/05 to present – President, North American Consumer Foods and U.S. Supply Chain; 1/03 to 9/05 – President, U.S. Consumer Foods; 3/01 to 12/02 – Vice President & General Manager, Sales & Marketing; 12/98 to 2/01 – President, McCormick Canada.

PART II

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

The Registrant has disclosed in Note 18, “Selected Quarterly Data (Unaudited)” of the Notes to Consolidated Financial Statements on page 55 of the Registrant’s Annual Report to Stockholders for 2005, which page is incorporated by reference, the information relating to the market price and dividends paid on the Registrant’s common stocks. The market price of the Registrant’s common stock at the close of business on December 30, 2005 was $30.64 for the Common Stock and $30.92 for the Common Stock Non-Voting.

The Registrant’s Common Stock Non-Voting and voting Common Stock are listed and traded on the New York Stock Exchange. The approximate number of holders of Common Stock of the Registrant based on record ownership as of December 31, 2005 was as follows:

The following table summarizes the Company’s purchases of Common Stock (CS) and Common Stock Non-Voting (CSNV) during the fourth quarter of 2005:

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ISSUER PURCHASES OF EQUITY SECURITIES

Note:  During the quarter, the Company continued to purchase against its $300 million authorization approved by the Board of Directors in the fourth quarter of 2003, and completed all of its available purchases under that authorization in October 2005.  In June 2005, the Board of Directors approved an additional $400 million share repurchase authorization.  As of November 30, 2005, $362.1 million remained of the $400 million authorization.  In the absence of an acquisition, the Company expects that it will complete all of its available purchases under this authorization by the end of fiscal year 2007.

Item 6.  Selected Financial Data

This information is set forth on the line items titled “Net sales-under EITF 01-09,” “Net income from continuing operations,” “Earnings per share – Diluted - Continuing operations,” “Common dividends declared,” “Long-term debt” and “Total assets” for the years 2001 through 2005 in the “Historical Financial Summary” on page 56 of the Registrant’s Annual Report to Stockholders for 2005, which line items are incorporated by reference. See also Note 1 “Summary of Significant Accounting Policies” on pages 42 through 44 of the Registrant’s Annual Report to Stockholders for 2005 and Note 3 “Discontinued Operations” on page 45 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference.

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

This information is set forth in “Management’s Discussion and Analysis” on pages 21 through 35 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference.

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Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

This information is set forth in the “Market Risk Sensitivity” section of “Management’s Discussion and Analysis” on pages 31 through 33 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference, and in Note 8 “Financial Instruments” on pages 48 and 49 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference.

Item 8.  Financial Statements and Supplementary Data

The financial statements and supplementary data are included on pages 38 through 56 of the Registrant’s Annual Report to Stockholders for 2005, which pages are incorporated by reference. The Report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on such financial statements is included on pages 36 and 37 of the Registrant’s Annual Report to Stockholders for 2005, which page is incorporated by reference. The supplemental schedule for 2003, 2004 and 2005 is included on page 15 of this Report on Form 10-K.

The unaudited quarterly data is included in Note 18, “Selected Quarterly Data (Unaudited)” of the Notes to Consolidated Financial Statements on page 55 of the Registrant’s Annual Report to Stockholders for 2005, which page is incorporated by reference.

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.  Controls and Procedures

Disclosure Controls and Procedures

The Registrant maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed, is accumulated and communicated to management in a timely manner. The Registrant’s principal executive officer and principal financial officer evaluated as of November 30, 2005 the effectiveness of this system of disclosure controls and procedures, and have concluded that such disclosure controls and procedures were effective as of such date.

Internal Control over Financial Reporting

Management’s report on the Registrant’s internal controls over financial reporting and the report of the Registrant’s Independent Registered Public Accounting Firm on internal controls over financial reporting are included on page 36 of the Registrant’s Annual Report to Stockholders for 2005, which page is incorporated by reference.

Certifications

The certifications of the Registrant’s Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K. Additionally, as required by Section 303A.12(a) of the New York Stock Exchange (“NYSE”) Listed Company Manual, the Registrant’s Chief Executive Officer filed a

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certification with the NYSE on April 21, 2005 reporting that he was not aware of any violation by us of the NYSE’s Corporate Governance listing standards.

Item 9B.  Other Information

None.

PART III

Item 10.  Directors and Executive Officers of the Registrant

Information responsive to this item is set forth in Part I of this Report in the section titled “Executive Officers of the Registrant” and in the sections titled “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Registrant’s definitive proxy statement for 2006, incorporated by reference herein, to be filed within 120 days after the end of the Registrant’s fiscal year (the “2006 Proxy Statement”).

The Registrant has adopted a code of ethics that applies to all employees, including its principal executive officer, principal financial officer, principal accounting officer and its Board of Directors. A copy of the code of ethics is available on the Registrant’s Internet website at www.mccormick.com and is available in print to any shareholder upon request. The Registrant intends to satisfy the disclosure requirement under Item 10 of Form 8-K regarding an amendment to, or a waiver from, a provision of its code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions, by posting such information on its website at the Internet website address set forth above.

Item 11.  Executive Compensation

Information responsive to this item is incorporated herein by reference to the sections titled “Report on Executive Compensation,” “Summary Compensation Table,” “Compensation of Directors,” “Pension Plan Table,” “Stock Options - Option Grants in Last Fiscal Year,” “Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values,” “Equity Compensation Plan Information,” “Mid-Term Incentive Plan” and “Performance Graph – Shareholder Return” in the Registrant’s 2006 Proxy Statement.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Transactions

Information responsive to this item is incorporated herein by reference to the sections titled “Principal Stockholders,” “Election of Directors” and “Equity Compensation Plan Information” in the Registrant’s 2006 Proxy Statement.

Item 13.  Certain Relationships and Related Transactions

Information responsive to this Item is incorporated herein by reference to the section entitled “Independence of Directors” in the Registrant’s 2006 Proxy Statement.

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Item 14.  Principal Accountant Fees and Services

Information responsive to this item is incorporated herein by reference to the section titled “Report of Audit Committee and Fees of Independent Registered Public Accounting Firm” in the Registrant’s 2006 Proxy Statement.

PART IV

Item 15.  Exhibits, Financial Statement Schedules

(a)           The following documents are filed as a part of this report:

1.     The consolidated financial statements for McCormick & Company, Incorporated and subsidiaries which are listed in the Table of Contents appearing on page 14 of this Report.

2.     The financial statement schedule required by Item 8 of this Form 10-K is listed in the Table of Contents appearing on page 14 of this Report.

3.     The exhibits that are filed as a part of this Form 10-K and required by Item 601 of Regulation S-K and Item 15(c) of this Form 10-K are listed on the accompanying Exhibit Index at pages 16 through 20 of this Report.

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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 on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

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.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons, being a majority of the Board of Directors of McCormick & Company, Incorporated, on the date indicated:

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TABLE OF CONTENTS AND RELATED INFORMATION

Included in the Registrant’s 2005 Annual Report to Stockholders, the following consolidated financial statements are incorporated by reference in Item 8*:

Consolidated Statement of Income for the years ended November 30, 2005, 2004 & 2003

Consolidated Balance Sheet, November 30, 2005 & 2004

Consolidated Statement of Cash Flows for the years ended November 30, 2005, 2004 & 2003

Consolidated Statement of Shareholders’ Equity for the years ended November 30, 2005, 2004 & 2003

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm - - Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm - - Internal Control Over Financial Reporting

Included in Part IV of this Annual Report:

Supplemental Financial Schedule:

II  - Valuation and Qualifying Accounts

Schedules other than those listed above are omitted because of the absence of the conditions under which they are required or because the information called for is included in the consolidated financial statements or notes thereto.

*Pursuant to Rule 12b-23 issued by the Commission under the Securities Exchange Act of 1934, as amended, a copy of the 2005 Annual Report to Stockholders of the Registrant for its fiscal year ended November 30, 2005 is being furnished with this Annual Report on Form 10-K.

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Supplemental Financial Schedule II Consolidated

McCORMICK & COMPANY, INCORPORATED

VALUATION AND QUALIFYING ACCOUNTS

(IN MILLIONS) (1)

Notes:

(1)The table excludes discontinued operations.

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EXHIBIT INDEX

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18

19

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*  Portions of this exhibit have been omitted pursuant to a request for confidential treatment.

** Management contract or compensatory plan or arrangement.

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Exhibit 13

In homes around the world, McCormick is the taste you trust. When you eat out, chefs rely on our seasonings, condiments and coatings to create your favorite menu items. And as a supplier to leading food companies, we add great taste to snacks, side dishes, cereal, beverages and other products. Every day you are likely to enjoy a product flavored by McCormick.

With 116 years in the business, we know flavor inside out.

Table of Contents

Business Description

McCormick is a global leader in the manufacture, marketing and distribution of spices, herbs, seasonings and other flavors to the entire food industry. Customers range from retail outlets and food service providers to food manufacturers. Founded in 1889 and built on a culture of Multiple Management, McCormick has approximately 8,000 employees.

Financial Highlights

The scent for this year’s annual report is clove.

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“Over the last few years, we have taken bold steps to position our business for ongoing long-term growth…our restructuring plan announced in 2005 will continue to position us for growth on this journey.”

Fellow shareholders,

We have just completed what was our toughest year during my time as chairman and CEO of McCormick. Our 2005 financial results did not reflect the ongoing long-term success and momentum of our business.

Several significant challenges overshadowed an otherwise strong performance. These included a unique vanilla market, difficult business conditions in Europe, the impact of Hurricane Katrina and sales in our industrial business that did not meet our expectations.

The good news is that we have been taking actions to address those challenges...actions that we believe will position us for continued growth. So while we’re disappointed in our 2005 financial results, we view them as a temporary setback in our strong long-term performance.

We remain unique in the food industry in our ability to make all types of food at all types of eating occasions taste great. That, along with the actions we’re taking, makes me confident that we will quickly return to achieving the superior results that investors expect from McCormick.

A Temporary Setback in Our Long-Term Performance

The impacts of the recent vanilla market, difficult business conditions in Europe and Hurricane Katrina were significant and led to overall disappointing financial results. In addition, we did not meet our objectives for sales growth in the industrial business due in part to lower vanilla prices and delays in certain product introductions by our customers. These factors, and special charges related to our restructuring plan, led to earnings per share of $1.56 for 2005. That compares with $1.52 in earnings per share for 2004.

While I’m not happy with that result I am pleased with several aspects of our performance.

We overcame the negative pressure from our industrial business and achieved a 3% sales increase from some key sales growth initiatives:

•          Introducing products that quickly became successful in retail markets.

•          Improving our marketing effectiveness (for example, sales of grinders increased 26% and sales of grilling products increased 21%.)

•          Acquiring the Silvo brand at the end of 2004.

•          Increasing our global reach with snack food seasonings and through restaurant chains in the Asia/Pacific region.

In 2005, cost savings of $33 million exceeded our $25 million goal. These savings, along with our pricing actions, more than offset the higher costs of packaging and fuel, as well as the impact from the year’s significant challenges.

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We continued to generate significant cash, which we used to pay dividends and repurchase our shares. We have increased our dividends in each of the last 19 years and at the end of 2005 increased our dividend by13%. We also repurchased $186 million of our shares, following repurchases of $174 million in 2004 and $120 million in 2003. In June 2005, our Board authorized a new $400 million share repurchase program.

As we look back on the past year, we believe the challenges of 2005 are generally behind us. We are pleased with the key aspects of our performance that should get us back on our strong track record of increased sales and profit.

Actions to Position Us for Growth

Over the last few years, we have taken bold steps to position our business for ongoing long-term growth.

We have continued to improve significantly our business processes through B2K, a global initiative that makes effective use of state-of-the-art information technology. B2K began in the United States in 2002, and Europe will implement it during 2006.

We became fully focused on what we do best – providing flavor that makes food taste great. That focus included acquiring Zatarain’s, Silvo and Uniqsauces, and selling our packaging business and our U.K. brokerage operation.

We transitioned our Board to a majority of independent directors, while also developing an outstanding leadership team.

Our restructuring plan announced in 2005 will continue to position us for growth on this journey:

•          Improving our supply chain and lowering costs.

•          Optimizing our industrial business.

•          Further developing and strengthening our leadership team.

Improving our supply chain will include the consolidation of global manufacturing, rationalization of distribution facilities, making the way we go-to-market more efficient and eliminating administrative redundancies. These are significant steps for McCormick that will improve margins for both our consumer and industrial businesses.

Optimizing our industrial business means focusing our resources on those customers and products that offer good margins and the highest growth prospects. Following an in-depth review of our industrial business in 2005, we will reduce the number of customers and products we supply by approximately 25% during the next three years. While this will adversely impact industrial sales by 2-5% during this period, we expect minimal impact on profits. Because we are eliminating lower margin business and reducing or redeploying our resources that support these customers, we are projecting increased margins for the industrial business.

Over the next three years, the charges associated with the supply chain actions and optimization of our industrial business are expected to be $130-$150 million. By 2008, these steps should lower our annual costs approximately $50 million.

Further developing and strengthening our leadership team will help guide our growth. Organizational changes were made to reflect our worldwide growth and the evolution of our customer base. These changes will enable us to take advantage of our regional capabilities while maintaining coordination with our global customers. Bob Davey, who has contributed to our success for nearly 30 years, is retiring from the Company and our Board. Also retiring from McCormick’s Board is Ned Dunn, who has served as a director and important member of our Compensation Committee since 1998. John Bilbrey, Senior Vice President of The Hershey Company and President of Hershey International, has joined our Board.

“We are pleased with the key aspects of our performance that should get us back on our strong track record of increased sales and profits.”

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We’re Unique – We Provide Great Taste

Our business is making food taste great. With 116 years in the business, we know flavor inside out.

In a year of improvement initiatives and challenges, our employees remained focused on the business – developing innovative products, manufacturing high-quality products and serving our customers.

Demand for our products continues to grow. Consumers want bold and zesty flavors. They seek convenience and reliable results. They want healthier lifestyles, lower salt or fat in their diets without skimping on taste. We provide the products to meet these needs and more.

We have great customers who are growing in their core markets and expanding internationally.

These are all characteristics of our business that make us confident of ongoing long-term success.

Our strategy – to improve margins, invest in the business and grow sales and profits – is as effective now as it was in1998 when we developed and implemented it. With improved margins we are offsetting higher costs, investing in additional marketing support and product development, and increasing profits.

During the past five years, our annual sales have increased an average of 7%. In that same time, our earnings per share have grown an average of 10% annually. Although our share price declined in 2005, our total shareholder return has exceeded that of the S&P 500 Stock Index and the average of other food companies for the last five years.

I thank the employees of McCormick for making our success possible. I am confident that 2005 was a temporary setback in our progress. Working together, we will be implementing some key initiatives for the business and reestablish our record of strong and consistent growth. We thank you for your continued support and look forward to building value for you.

Robert J. Lawless, Chairman, President and CEO

“Our strategy – to improve margins, invest in the business and grow sales and profits – is as effective as it was in 1998 when we developed and implemented it.”

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A Discussion with Bob Lawless

What made 2005 a temporary setback in your track record of strong long-term performance?

We face and meet challenges every year, and we did a good job with the extraordinary number and types of challenges that developed during 2005. However, two of those challenges had a particularly significant impact on our earnings:

• A dramatic decline in the cost of vanilla early in 2005 – the first of its kind in more than 20 years – lowered our first-half earnings per share by approximately 5 cents.

• Flat sales in our industrial business – compared with an average sales increase of 5% over the last five years – further reduced our earnings per share.

We’ve taken actions to address these challenges. In our industrial business, by focusing our development capabilities on strategic customers with good margins and strong growth prospects, we will restore this business to its historical growth rates. As for vanilla, changes in sourcing and customer negotiations will make future volatility less likely.

We are confident that our strategies and growth initiatives, our cost reduction efforts and experience in running our business will have us back on track in 2006.

What are your key drivers of sales growth?

New products are a vital part of our sales growth. In recent years, at least 10% of our annual sales came from products launched within the current and two preceding years.

Our innovative marketing enhances our growth potential. For example, in the United States, we are relaunching our major consumer product lines with new packaging, new merchandising and new items. This rollout began late in 2005 and will continue through 2006. Geographically, we are expanding into new markets with our current products, with new products and through acquisitions. In our existing markets, we are seeking to acquire brands that have a strong flavor profile complementing our existing product lineup.

What makes McCormick different? Why is it a good investment?

First, we overcome obstacles quickly. Despite the significant challenges of 2005, we were able to deliver a 3% sales increase and 3% increase in earnings per share. Second, with focused leadership and motivated employees, we continue to execute well, even in a period of challenges. During 2005, we demonstrated this ability with our progress in implementing B2K in Europe, the integration of the Silvo acquisition, the quick recovery of our Zatarain’s operations following Hurricane Katrina and the relaunch of our entire dry seasoning mix line in the U.S.

Third, our customers count on us for great flavors. This is the key element of our successful and long-standing relationships. The fourth area I want to point to is our willingness to challenge ourselves. We continue to seek ways to improve our leadership and organization, our capabilities and processes, our products and marketing, and our relationships with customers and suppliers.

This is a great business – making food taste terrific. No one does that better than McCormick. We are uniquely positioned to continue building shareholder value.

“We continue to seek ways to improve our leadership and organization, our capabilities and processes, our products and marketing, and our relationships with customers and suppliers.”

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Inside the grocery store, we take a leading role in driving sales. In more than 20,000 U.S. retail stores we recently restaged our entire line of seasoning mixes with more appealing packaging, more effective merchandising and some exciting new products.

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Because we know flavor…we’re the clear market leader and we’re driving category growth. Our brands have a strong leading share – whether it is McCormick in the United States, Schwartz in the United Kingdom, Ducros in France or our brands in other key markets.

In addition to providing our customers with the leading retail brand, we are often their source for store-branded products.

Maintaining market leadership requires acting like a leader by bringing innovation, news and excitement to the consumer. In the United States, the United Kingdom and France, we restaged our entire line of seasoning mixes with more appealing packaging, more effective merchandising and some exciting new products. We are following that with a comprehensive relaunch of our U.S. spice and seasoning line in 2006. It has been nearly 20 years since we had such a significant and comprehensive initiative behind these products, and we believe it will reenergize and enhance consumer demand.

Our increased advertising over recent years continues to have impact. In 2005, we focused our U.S. advertising on grinders, GrillMates^® and Zatarain’s^®. We also developed ways to better meet the needs of Hispanic consumers, among whom we are the top brand in our category. With advertising and the launch of new products, we increased sales of Hispanic-targeted products by 20% in 2005.

With better merchandising, new products and improved packaging, we are driving category growth. In 2005, our primary category in the United States rose 3%. In the United Kingdom the increase was 3%, in Canada it was 4% and in Australia the category increased 6%.

Our market share exceeds that of the next largest competitor in key markets.

We are driving category growth with effective marketing and innovative new products.

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Because we know flavor…our innovative new products are driving sales. Our sensory capabilities – starting with developing the products and ending with consumer testing – are among the best in the industry.

11% of 2005 net sales were from products introduced in the last three years.

Today, more than 70% of sales are from value-added products, up from around 60% just five years ago.

Our skills and processes lead to consumer-preferred products and with continued focus on efficiencies, we’re increasing our productivity. New product sales per development professional have increased 40% during the last three years.

In our consumer business, we are introducing wet products such as a line of cooking pastes in North America, Europe and the Asia/Pacific region. In the United States, varieties like teriyaki beef and country herb chicken offer greater convenience and more options than traditional seasoning blends. Our spice grinders, grilling products and Zatarain’s^® Ready-to-Serve Rice are just a few of our innovative products that have quickly become family favorites.

In our industrial business, our customers who are food manufacturers launched new fruit snacks, cereals, beverages, meal kits, snack chips and snack bars – all of which contain key flavors that we provide. We collaborate with our food service customers and have recently developed creative new products to flavor items on their menus – bread toppings for sub sandwiches, exotic dressings that go in wraps, sauces to top steak and grilled fish, and dessert seasonings sprinkled on specialty coffee and tea.

Making food taste great is an ongoing process, and we have a promising pipeline of innovative products that will be a key driver of sales growth in 2006 and beyond.

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Outside or in,

McCormick is the taste behind your favorite foods. In 2005 we grew global sales of grilling products 21% and grinders 26%. We have few boundaries as we seek new ways to add flavor.

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Because we know flavor…customers rely on us for superior quality and service. Whether it is a restaurant chef, a leading food company or a retail grocery chain, our customer relationships are paramount.

We enjoy strategic relationships with many industry leaders. Here are just a few of the premier customers that have recognized McCormick with awards for innovation, service and quality.

Darden

McDonald’s

PepsiCo

Subway

Sysco

Wendy’s

YUM!

In the U.S. we supply 9 of the top 10 quick service restaurants, 19 of the top 20 food companies and all 20 of the top retail grocery chains. Our customers count on us for dynamic product ideas, flavor expertise and knowledge about the consumer and marketplace.

Our state-of-the-art technology matches the pace of a business environment that is continuously challenging and rapidly changing. Our formula management initiatives increase the speed of product development. In 2006, we’ll be using radio frequency tagging (RFID) to meet customer requirements to improve logistics.

Many major food and restaurant companies – including McDonald’s, PepsiCo, Sysco and others – recognize us as a premier supplier. Many of our customer relationships go back more than 25 years. We have multi-functional teams whose priorities are to ensure we meet and exceed our customers’ expectations. We are also building and nurturing relationships with strategic customers for both our consumer and industrial businesses.

As our customers expand with new store formats and into new regions, we’re able to achieve parallel growth. For example, quick service and casual dining restaurant sales are projected to increase 4-5% through 2008. And we’ll grow with them. That’s the case with all of our customers domestically and internationally. As they grow, we grow.

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Inside the restaurant kitchen, chefs rely on McCormick to create their signature dishes. In China, an increase in eating out contributed to a 7% increase in industrial sales in the Asia/Pacific region in 2005.

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Because we know flavor…we’re part of all the latest trends. Whether consumers are seeking convenience, healthier food or an indulgence treat, we’re well-positioned to provide the flavor and make their choice taste great.

More than 2.5 million unique visitors accessed our web site, www.mccormick.com, in 2005. One of our features is “A Taste for Health” where consumers find ideas for healthy, great-tasting meals.

Many of the latest trends create a demand for our development capabilities and flavor solutions.

According to a recent NPD group study “Eating Patterns in America,” taste is the No.1 factor when choosing food to make and eat at home. We flavor many “on-trend” products. In our consumer business, we have a line of products for fruits and vegetables in North America, Europe and the Asia/Pacific region. With product innovation and through acquisitions, we have built a 30 percent U.S. market share in seafood complements –sauces, coatings and marinades. Our new lineup of seasoning mixes offers a convenient way to get a great tasting dinner on the table in 30 minutes or less.

For restaurants, we provide condiments, seasonings, coatings and more. This gives us the ability to participate in a wide range of menu items. Our customers extend from quick service restaurants to fine dining establishments. No matter where people choose to eat, we can provide the flavor and make their meal taste terrific.

The possibilities to flavor food products are nearly limitless. Snack foods, dairy products, side dishes and beverages are just a few of the many grocery store items for which we provide the flavor. In the past four years, more than 13,000 products in the United States have been fortified with added health benefits. We are working on advanced flavors to develop the enhancers, replacers and maskers that make these types of products taste great.

Flavor is fun and drives what we all choose to eat and enjoy. With our various product lines and geographic reach, no matter where or what you eat each day, you are likely to taste a great McCormick flavor.

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Outside biking or working out indoors at the health club, consumers around the world have an increased interest in healthier food, but also demand great taste. That’s where McCormick steps in. We develop great flavors for snack bars, beverages and much more.

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McCormick At-a-Glance

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Industrial Product Capabilities

COMPOUND FLAVORS

Beverage flavors

Dairy flavors

Confectionery flavors

PROCESSED FLAVORS

Meat flavors

Savory flavors

SEASONINGS

Seasoning blends

Salty snack seasonings

Side dish seasonings (rice, pasta, potato)

Sauces and gravies

COATING SYSTEMS

Batters

Breaders

Marinades

Glazes

Rubs

WET FLAVORS

Sandwich sauces

Condiments

Seafood cocktail sauces

Salad dressings

Flavored oils

INGREDIENTS

Spices and herbs

Extracts

Essential oils and oleoresins

Tomato powder

From locations around the world, our consumer brands reach nearly100 countries. Our industrial business provides a wide range of products to multinational restaurants and food processors. McCormick flavors span the globe.

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McCormick At-a-Glance

Our community service efforts enrich communities around the world. In 2005, a grant was made to help children in El Salvador.

By showing “concern for one another,” we have helped the less advantaged around the globe.

Our charitable commitment has its roots in our founding. Today,116 years later, it remains a vibrant part of who we are, from the plant floor to the executive suite, from Baltimore to Beijing.

McCormick’s formal program of charitable giving helps fund worthwhile causes. Projects that are civic, health, welfare, education and the arts receive the most attention. These grants are made in communities around the world where we have facilities. Programs like the McCormick Unsung Heroes Awards, student scholarships and Charity Day, which fosters employee giving to a wide range of causes, have existed for more than 60 years. Additionally, many of our global employees devote their time and talents to numerous community endeavors. Their involvement ranges from serving on boards to grassroots-level volunteering.

In 2004, we added another chapter to our history of benevolence by creating the McCormick Community Service Award. The program recognizes those employees who best exemplify McCormick’s commitment to improve our communities. A grand prize winner receives $25,000 for his or her charity of choice. Several finalists receive $5,000 each for their charities.

The winner of the award presented in 2005 was Rogelio Pineda, an Information Technology Manager at McCormick de Centro America in El Salvador. Rogelio volunteers with an organization called Club Activo 20-30 San Salvador. It assists children, particularly those who are disabled or orphaned. Recently, the club has helped fund a school building for 700 underprivileged children, helped obtain wheelchairs for others, funded difficult to obtain medical treatments, brought entertainment to thousands of children and raised money to support public schools with essential supplies.

“The club is constantly involved in projects to raise funds for our programs,” Rogelio said. “So winning the McCormick Community Service Award was truly a blessing. I have liked to help people all of my life, and the club gives me that chance. The best prize we can get is to see a smile on the face of a child who has little reason to smile. Our club slogan says it all: ‘A person never stands so tall as when kneeling to help a child.’”

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We call them “Shared Values.” They are points of focus that are the essence of our corporate culture. One of those values is simply “Concern for One Another.” It is demonstrated in our approach to community service.

Hurricane Katrina

Helping those in need is at the core of our community service. The reality of that mission struck much closer to home in August 2005 than we ever could have imagined. Hurricane Katrina devastated New Orleans and much of the Gulf Coast of the United States. McCormick’s Zatarain’s operation, based in Gretna, Louisiana, is near New Orleans. It was not flooded like much of the area, but the facility did suffer wind and water damage. Of greater importance, hundreds of Zatarain’s employees had their lives seriously disrupted with some losing their homes. While struggling to get the business functioning again, the Zatarain’s staff felt compelled to help their affected area and distributed 100,000 “Ready to Serve Meals” to neighboring communities. Tireless hours have been spent ensuring that customer orders are filled as the recovery work in Gretna continues.

McCormick employees from around the world were affected by the suffering of their co-workers in Louisiana. In response, a special fundraising effort with global employee donations was held to provide assistance for the Zatarain’s employees who must rebuild their lives. McCormick matched employee donations dollar for dollar.

Around the world and close to home, McCormick’s volunteer efforts improve the quality of life in our communities. It’s rooted in our Shared Value, “Concern for One Another.”

Hurricane Katrina struck the Gulf Coast and dramatically impacted the lives of our Zatarain’s employees and the business in Gretna, Louisiana. Zatarain’s donated food to neighboring communities, and the employees rallied together to ensure the continued operation of the business. McCormick employees around the world made financial donations to assist their beleaguered colleagues in Louisiana. It was a community service effort unlike any other in McCormick’s history.

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Board of Directors

During 2005, we made organizational changes to respond to the growth of our businesses worldwide and the evolution of our customer base. Our new structure takes advantage of our regional capabilities while retaining coordination with our global customers. Named to lead the consumer and industrial businesses were (left to right) Chuck Langmead, Mark Timbie and Alan Wilson.

Executive Officers

Robert J. Lawless

Chairman of the Board, President & Chief Executive Officer

Paul C. Beard

Vice President – Finance &Treasurer

Francis A. Contino

Executive Vice President – Strategic Planning & Chief Financial Officer

Kenneth A. Kelly, Jr.

Vice President & Controller

Lawrence E. Kurzius

President – U.S. Consumer Foods

Charles T. Langmead

President – U.S. Industrial Group

Robert W. Skelton

Senior Vice President, General Counsel & Secretary

Mark T. Timbie

President – International

Karen D. Weatherholtz

Senior Vice President – Human Relations

Alan D. Wilson

President – North American Consumer Foods and U.S. Supply Chain

Corporate Governance

McCormick’s mission is to enhance shareholder value. McCormick employees conduct business under the leadership of the Chief Executive Officer and the oversight and direction of the Board of Directors. Both management and the Board of Directors believe that the creation of long-term shareholder value requires us to conduct our business honestly and ethically and in accordance with applicable laws. We also believe that shareholder value is well served if the interests of our employees, customers, suppliers, consumers, and the communities in which we live, are appropriately addressed.

McCormick’s success is grounded in its value system as evidenced by our core values.

We are open and honest in business dealings inside and outside McCormick. We are dependable and truthful and keep our promises.

Our employees and our Board of Directors are committed to growing our business in accordance with our governance structure, principles and code of ethics.

Our “key ingredient” is the people of McCormick...

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Barry H. Beracha 63

Executive Vice President

Sara Lee Corporation (retired)

Chief Executive Officer

Sara Lee Bakery Group (retired)

Chicago, Illinois

Director since 2000

Compensation Committee member*

James T. Brady 65

Managing Director, Mid-Atlantic

Ballantrae International, Ltd.

Ijamsville, Maryland

Director since 1998

Audit Committee member*

J. Michael Fitzpatrick 59

President & Chief Operating Officer

Rohm and Haas Company (retired)

Philadelphia, Pennsylvania

Director since 2001

Compensation Committee member

Nominating/Corporate Governance

Committee member

Robert J. Lawless 59

Chairman of the Board, President

and Chief Executive Officer

McCormick & Company, Inc.

Director since 1994

William E. Stevens 63

Chairman, BBI Group

St. Louis, Missouri

Director since 1988

Audit Committee member

John P. Bilbrey 49

Senior Vice President

The Hershey Company

President – Hershey International

Hershey, Pennsylvania

Director since 2005

Compensation Committee member

Francis A. Contino 60

Executive Vice President –

Strategic Planning and

Chief Financial Officer

McCormick & Company, Inc.

Director since 1998

Freeman A. Hrabowski, III 55

President

University of Maryland

Baltimore County

Baltimore, Maryland

Director since 1997

Nominating / Corporate Governance

Committee member*

Margaret M.V. Preston 48

Executive Vice President

Mercantile Private Wealth Management

Mercantile Safe Deposit & Trust Company

Baltimore, Maryland

Director since 2003

Audit Committee member

Karen D. Weatherholtz 55

Senior Vice President –

Human Relations

McCormick & Company, Inc.

Director since 1992

* Denotes committee chairman

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Financial Information

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Management’s Discussion and Analysis

Executive Summary

Business Overview

McCormick & Company is a global leader in the manufacture, marketing and distribution of spices, herbs, seasonings and other flavors to the entire food industry. Our major sales, distribution and production facilities are located in North America and Europe, and our products reach nearly 100 countries around the world. Additional facilities are based in Mexico, Central America, Australia, China, Singapore, Thailand and South Africa. In 2005, approximately 39% of sales were outside the U.S.

We operate in two business segments, consumer and industrial. In 2005, our consumer business was 54% of sales and our industrial business was 46% of sales. Consistent with market conditions in each segment, our consumer business has a higher overall profit margin than our industrial business.

Our consumer business supplies a variety of retail outlets that include grocery, mass merchandise, discount and drug stores. Customers are serviced both directly and indirectly through distributors or wholesalers. Products for our consumer segment include spices, herbs, extracts, seasoning blends, sauces, marinades and specialty foods. In 2005, 66% of net sales were in the Americas, 30% in Europe and 4% in the Asia/Pacific region. In our primary markets, we supply both branded and private label products and have a leading share that is more than twice the size of the next largest competitor. We are growing our consumer business by developing innovative products, increasing marketing effectiveness, expanding distribution and acquiring leading brands and niche products.

Our industrial business works closely with customers to develop leading products that become marketplace winners. We supply both food manufacturers and the food service industry. Food service customers are supplied both directly and indirectly through distributors. Products for our industrial segment include seasoning blends, spices, herbs, wet flavors, compound flavors and coating systems. In 2005, 74% of net sales were in the Americas, 18% in Europe and 8% in the Asia/Pacific region. We have many competitors who also supply products to food manufacturers, as well as the food service industry. We are driving sales for our industrial business by supporting the global expansion of our customers, building current and new strategic partnerships, and developing consumer-preferred, value-added products.

With our consumer and industrial segments, we have the customer base and product development skills to provide flavor solutions for all types of eating occasions, whether it is cooking at home, dining out, purchasing a quick service meal or enjoying a snack.

We purchase a significant amount of raw materials from areas throughout the world. The most significant raw materials are cheese, packaging supplies, pepper, capsicums, garlic, onion and vanilla. Some of these are subject to price volatility caused by weather, market conditions, growing and harvesting conditions, governmental actions and other

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unpredictable factors. While future movements of raw material costs and availability are uncertain, we respond to this volatility in a number of ways including strategic raw material purchases, purchases of raw material for future delivery and customer price adjustments.

Strategy for Growth

Our strategy is to improve margins, invest in our business and increase sales and profits.

We have increased margins with cost-savings programs, new capabilities and processes introduced through our B2K program, acquisitions of high-margin brands and the introduction of higher-margin, more value-added products. Since 2000, gross profit margin has increased 4.8 percentage points. Our B2K program is a global initiative that is significantly improving business processes through state-of-the-art information technology. Utilizing B2K, we have improved the supply chain throughout McCormick. In 2005, $33 million of cost savings were realized, comprised of $21 million of cost of goods sold and $12 million of selling, general and administrative savings. This followed $24 million of cost savings in 2004.

As the next step in our progress with margin improvement, we announced in September 2005 significant actions to improve our global supply chain. We also conducted a comprehensive review of our industrial business that identified additional actions to improve this business. These actions were put together in a comprehensive restructuring plan which the Board approved in November 2005. This restructuring plan is expected to reduce complexity and create an organization that is more focused on growth opportunities in both the consumer and industrial businesses. This plan is described in more detail later in MD&A and in note 4 of the notes to consolidated financial statements.

In addition to increasing profits, a portion of the higher margin has supported investment in business growth initiatives. Since 2000, we have significantly increased our investment in areas such as advertising, promotion and product development to drive sales. Based on our strong business fundamentals and improvement actions underway, we believe our business can generate sales growth of 3-5% and an 8 -10% increase in earnings per share through 2008. This sales growth will continue to be achieved through innovative new products, effective marketing, distribution gains and acquisitions.

Our business generates strong cash flow which has increased in recent years. Actions to grow net income and reduce inventory should lead to further gains. We have consistently paid dividends and expect to increase dividends at a rate similar to the increase in earnings per share. Additional cash is being used to fund strategic acquisitions to extend our business into new product niches or new markets. Another use of cash is share repurchase. An active share repurchase program is lowering shares outstanding and improving value for McCormick shareholders.

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Results of Operations – 2005 compared to 2004

For the year ended November 30, 2005, we reported sales of $2.6 billion, an increase of 2.6% versus 2004, including a 1.0% increase from favorable foreign exchange rates. Key initiatives that drove sales in 2005 included acquisitions, new products, improved marketing and price increases. Sales from Silvo, acquired at the end of 2004, contributed 1.5% to the sales increase. During 2005, net sales were negatively impacted by several factors. First, industrial sales were reduced by lower pricing of vanilla products and the elimination of lower-margin products in Europe. Second, consumer sales in the fourth quarter were affected by the impact of Hurricane Katrina on sales in the Gulf region of the U.S. Third, consumer sales of a limited range of higher volume spice and herb items in France continued to be adversely impacted by low priced products in alternative retail channels. We estimate that these three factors lowered sales for 2005 by approximately 2%.

Gross profit margin increased to 40.0% in 2005 from 39.9% in 2004. In 2005, we exceeded our goal of lowering costs by $25 million, achieving savings of $33 million. Improved segment mix through a higher proportion of consumer versus industrial sales and pricing actions also improved gross profit margin. Significant cost increases in certain raw materials, packaging and fuel offset much of the gross profit margin increase.

Selling, general and administrative expenses were higher in 2005 than 2004 on a dollar basis but declined as a percentage of net sales. The dollar increase was primarily due to increased distribution expenses and higher sales promotion expenses. The increase in distribution expenses was primarily due to higher fuel costs. In our consumer business, we increased sales promotion expenses in order to launch several new products and to support our brand name. The decrease in selling, general and administrative expenses as a percentage of net sales was primarily due to lower incentive compensation associated with our 2005 results. In addition, advertising was down slightly as we suspended some of our advertising for the Zatarain’s brand following Hurricane Katrina.

Special charges were $11.2 million in 2005 compared to a credit of $2.5 million in 2004. The 2004 special charges included a net gain of $8.7 million recorded in 2004 for funds received from a class action lawsuit that was settled in our favor. The charges in the current year are primarily due to the implementation of the new restructuring plan, discussed later in MD&A and in note 4 of the notes to consolidated financial statements.

Interest expense in 2005 increased $7.2 million. Average borrowings during the year increased slightly, however, higher interest rates on our variable rate debt during 2005 accounted for most of this increase.

Other income decreased to $0.4 million in 2005 compared to $2.1 million in 2004 due to lower interest income.

The effective tax rate was 32.7% in 2005 up from 30.3% in 2004. The increase in the effective tax rate was due to the final utilization of certain net operating loss carryforwards in 2004 which were no longer available in 2005 and the mix of earnings among the different tax jurisdictions in which we operate.

Income from unconsolidated operations increased 41% in 2005 compared to 2004. This increase is mainly attributable to higher income from our joint venture in Mexico where more effective marketing programs and promotions, new product launches, reduced expenses and lower soybean oil costs all contributed to the improved performance.

Net income was $214.9 million in 2005 compared to $214.5 million in 2004. Diluted earnings per share in 2005 were $1.56 and included an $11.2 million charge ($0.05 per share) for actions taken under our restructuring plan. In 2004 earnings per share were $1.52 and included a special credit of $2.5 million. Earnings per share rose as a result of higher sales, an increase in unconsolidated income and lower shares outstanding, offset in part by the increase in special charges, a higher effective tax rate, an increase in interest expense and a decrease in other income.

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Consumer Business

In 2005, sales from our consumer business increased 4.6% compared to 2004. Sales from Silvo, acquired in November 2004, added 2.8% to sales and favorable foreign exchange rates added 0.9%. The additional increase of 0.9% was mainly driven by pricing actions taken in 2005. In the Americas, consumer business sales increased 2.9% with 2.6% of the sales increase from price and product mix, 0.6% from favorable foreign exchange and a slight volume decrease of 0.3%. During the fourth quarter, demand for our McCormick and Zatarain’s consumer products in the U.S. Gulf Region was lower due to the effects of Hurricane Katrina. This had a negative impact of approximately 1% on the full year results. The remaining increase was driven by more effective marketing, new product introductions and pricing actions. In Europe, sales rose 9.9%, with Silvo adding 10.0%, favorable foreign exchange contributing 1.4%, both offset by decreases from volume, price and product mix of 1.5%. We continue to experience difficult retail conditions for a limited range of larger volume spice and herb products in France. While progress has been made in slowing the migration of sales to alternative channels, the poor economic conditions in France are complicating the recovery. In this region we have been successfully growing sales of value-added products such as dessert items, pastes and grinders with retail customers. Sales in the Asia/Pacific region decreased 3.4% due to unfavorable volume, price and product mix of 6.7% partly offset by favorable foreign exchange of 3.3%. Volumes in China were affected by our reduction in the number of distributors as we move to a higher quality network. Sales in the Asia/Pacific region are less than 5% of our consumer business.

Operating income from our consumer business increased 5.0% to $283.1 million. The operating income increase was driven by strong sales performance, cost reduction efforts and pricing actions. Operating income margin (operating income as a percentage of net sales) increased from 20.1% in 2004 to 20.2% in 2005. Cost savings on supply chain initiatives more than offset increases in special charges, fuel and the negative profit impact of challenging market conditions in Europe, particularly in France.

Special charges in the consumer business increased to $10.1 million in 2005 from $1.0 million in 2004. Special charges in the consumer business for 2005 included certain severance costs associated with the closing of our consumer manufacturing plant in Salinas, California, closing costs for a small plant in Belgium and costs associated with the reorganization of the distribution networks in the U.S. and Europe. Special charges in the consumer business for 2004 consisted of additional costs associated with the finalization of the production facilities consolidation in Canada.

Industrial Business

For 2005, sales from the industrial business rose 0.3% as compared to 2004. Favorable foreign exchange added 1.0% to sales while unfavorable volume, price and product mix decreased sales 0.7%. As anticipated, lower vanilla pricing in 2005 decreased sales approximately 2% and actions to eliminate lower margin products in Europe decreased sales approximately 1%. Sales in the Americas rose 0.9% with favorable foreign exchange adding 0.9%. In this region, lower vanilla pricing reduced sales approximately 3%. The remaining sales increase of approximately 3% was due to strength in snack food seasonings, certain new product successes and improved sales in the food service distributor channel. In Europe, sales declined 4.5% as unfavorable volume, price and product mix reduced sales 5.5% offset by favorable foreign exchange which added 1.0%. Included in the 5.5% decrease from volume, price and product mix was the impact of the elimination of lower margin products which decreased sales approximately 4%. In the Asia/Pacific region, sales increased 7.2% with a 4.9% increase from higher volume, price and product mix and 2.3% from foreign exchange. The increase was driven by strong sales of snack seasonings and to quick service restaurants which continue to expand their stores.

Operating income from our industrial business decreased 7.3% to $105.3 million and operating income margin was 8.8% in 2005, down from 9.6% in 2004.The sale of high cost vanilla beans during a period of declining prices, reduced operating income approximately $15 million during 2005, offsetting the benefit of cost reduction efforts. Operating

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income in 2004 was reduced by a $6.2 million operational accounting adjustment at an industrial plant in Scotland.

Special charges in the industrial business decreased to $0.1 million in 2005 from $3.0 million in 2004. Special charges in the industrial business for 2004 consisted of additional costs associated with the consolidation of production facilities in Canada and additional costs related to the consolidation of manufacturing facilities in the U.K.

Results of Operations – 2004 compared to 2003