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

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes x 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 x

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 x 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.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Check one:

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

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

The aggregate market value of the voting common equity held by non-affiliates at May 31, 2007: $295,588,791

The aggregate market value of the non-voting common equity held by non-affiliates at May 31, 2007: $4,336,471,138

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 is a diversified specialty food company and a global leader in the manufacture, marketing and distribution of flavor products (including spices, herbs, extracts, seasonings and flavorings) and other specialty food products to the entire food industry. The Registrant’s major sales, distribution and production facilities are located in North America and Europe. Additional facilities are located in Mexico, Central America, Australia, China, Singapore, Thailand and South Africa. 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 consumer segment sells spices, herbs, extracts, seasoning blends, sauces, marinades and specialty foods to the consumer food market under a variety of brands worldwide, including “McCormick,” “Zatarain’s,” “Simply Asia,” “Thai Kitchen,” “Ducros,” “Vahine,” “Silvo,” “Club House” and “Schwartz.”  The industrial segment sells seasoning blends, natural spices and herbs, wet flavors, coating systems and compound flavors to food manufacturers and the food service industry, served both directly and indirectly through distributors.

                Please refer to pages 15 through 17, of the Registrant’s Annual Report to Stockholders for 2007 for descriptions of the Registrant’s consumer and industrial businesses, and pages 6, 7, 8, 11 and 16 of the Registrant’s Annual Report to Stockholders for 2007 for a discussion of growth initiatives for the business. Such pages of the Registrant’s Annual Report to Stockholders for 2007 are incorporated by reference.

                For financial information about the Registrant’s business segments, please refer to pages 18 through 22, “Management’s Discussion and Analysis,” and Note 14, “Business Segments and Geographic Areas” of the Notes to Consolidated Financial Statements on pages 57 and 58 of the Annual Report to Stockholders for 2007, which pages are incorporated by reference.

                For a discussion of the Registrant’s recent acquisition activity, please refer to page 25,  “Management’s Discussion and Analysis,” and Note 2, “Acquisitions” of the Notes to Consolidated Financial Statements on page 45 of the Annual Report to Stockholders for 2007, which pages are incorporated by reference.

Raw Materials

                The most significant raw materials to the Registrant are cheese, pepper, soybean oil, wheat, sweeteners, capsicums, garlic and onion.  Pepper and other spices and herbs are generally sourced from countries other than the United States. Others, like cheese and onion, are primarily sourced from within 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 are subject to fluctuations in market price and availability caused by weather, growing and harvesting conditions, market conditions and other factors beyond the Registrant’s control.  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 resold to consumers through retail outlets, including grocery, mass merchandise, warehouse clubs, discount and drug stores under a variety of brands.  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 manufacturers and the food service industry, which are supplied both directly and through distributors.

                The Registrant has a large number of customers for its products.  In fiscal year 2007, sales to one of the Registrant’s customers, PepsiCo, Inc., accounted for 10% of consolidated net sales.  Sales to the Registrant’s five largest customers represented approximately 28.5% of consolidated net sales for this period.

                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.

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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,” “Club House,” “Ducros,” “Schwartz,” “Vahine” and “Zatarain’s” 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 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 three to five 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.

Seasonality

                Due to seasonal factors inherent in the business, the Registrant’s sales, income and cash from operations generally are lower in the first two quarters of the fiscal year, increase in the third quarter and are significantly higher in the fourth quarter due to the holiday season. 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 6 “Financing Arrangements” of the Notes to Consolidated Financial Statements on pages 48 and 49 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference, and the “Liquidity and Financial Condition” section of “Management’s Discussion and Analysis” on pages 22 through 25 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference.

Competition

                The Registrant is a global leader in the manufacture and sale of flavor products (including spices, herbs, extracts, seasonings and flavorings) and other specialty food products, and competes in a geographic market that is international and highly competitive. The Registrant’s strategies for competing in each of its segments include a focus on price and value, product quality and innovation, and superior service.  Additionally, in the consumer segment, the Registrant focuses on brand recognition and loyalty, effective advertising and promotional programs, and the identification and satisfaction of consumer preferences.  For further discussion, see pages 12, and 15 through 17 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference.

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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 $49.3 million in 2007, $45.0 million in 2006 and $43.1 million in 2005. The amount spent on customer-sponsored research activities is not material.

Environmental Regulations

                The cost of 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 2007 and there are no material expenditures planned for such purposes in 2008.

Employees

                The Registrant had approximately 7,500 employees worldwide as of December 31, 2007. 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 Note 14, “Business Segments and Geographic Areas” of the Notes to Consolidated Financial Statements on pages 57 and 58 of the Annual Report to Stockholders for 2007, and the “Market Risk Sensitivity” section of “Management’s Discussion and Analysis” on pages 28 through 30 of the Registrant’s Annual Report to Stockholders for 2007, 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 40% of sales in 2007 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 33 of the Registrant’s Annual Report to Stockholders for 2007, 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

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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 condition 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 been 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 securities could decline, and you may lose all or part of your investment.

Damage To The Registrant’s Reputation Or Brand Name Could Negatively Impact The Registrant.

The Registrant’s reputation for manufacturing high quality products is widely recognized. In order to safeguard that reputation, the Registrant has adopted rigorous quality assurance and quality control procedures which are designed to ensure conformity to specification and compliance with law. The Registrant also continually makes efforts to increase its brand awareness and relevance, and to maintain and improve relationships with its customers and consumers. A serious breach of the Registrant’s quality assurance or quality control procedures, or deterioration of its quality image, or impairment of its customer or consumer relationships, could have a material negative impact on its financial condition and results of operations.

Issues Regarding Procurement Of Raw Materials May Negatively Impact The Registrant.

The Registrant’s purchases of raw materials are subject to fluctuations in market price and availability caused by weather, growing and harvesting conditions, market conditions, governmental actions and other factors beyond the Registrant’s control. The most significant raw materials are cheese, pepper, soybean oil, wheat, sweeteners, capsicums, garlic and onion. While future movements of raw material costs are uncertain, the Registrant seeks to mitigate the market price risk in a number of ways, including strategic raw material purchases, purchases of raw material for future delivery and customer price adjustments. The Registrant has not used derivatives to manage the volatility related to this risk. Any actions taken in response to market price fluctuations may not effectively limit or eliminate the Registrant’s exposure to changes in raw material prices. Therefore, the Registrant cannot provide assurance that future raw material price fluctuations will not have a negative impact on its business, financial condition or operating results.

In addition, the Registrant may have very little opportunity to mitigate the availability risk of certain raw materials due to the effect of weather on crop yield, political unrest in the producing countries, changes in governmental agricultural programs and other factors beyond the Registrant’s control. Therefore, the Registrant cannot provide assurance that future raw material availability will not have a negative impact on its business, financial condition or operating results.

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Further, political, socio-economic, and cultural conditions, as well as disruptions caused by terrorist activities, in developing countries create risks for food safety.  Although the Registrant has adopted rigorous quality assurance and quality control procedures which are designed to ensure the safety of its imported products, the Registrant cannot provide assurance that such events will not have a negative impact on its business, financial condition or operating results.

The Registrant’s Profitability May Suffer As A Result Of Competition In Its Markets.

The food industry is intensely competitive. Competition in the Registrant’s product categories is based on price, product innovation, product quality, brand recognition and loyalty, effectiveness of marketing and promotional activity and the ability to identify and satisfy consumer preferences. From time to time, the Registrant may need to reduce the prices for some of its products to respond to competitive and customer pressures. Such pressures also may impair the Registrant’s ability to take appropriate remedial action to address commodity and other cost increases.

The Registrant’s Operations May Be Impaired As A Result Of Disasters, Business Interruptions Or Similar Events.

A natural disaster such as an earthquake, fire, flood, or severe storm, or a catastrophic event such as a terrorist attack, an epidemic affecting the Registrant’s operating activities, major facilities, or employees’ and customers’ health, or a computer system failure, could cause an interruption or delay in the Registrant’s business and loss of inventory and/or data or render the Registrant unable to accept and fulfill customer orders in a timely manner, or at all.  In addition, some of the Registrant’s inventory and production facilities are located in areas that are susceptible to harsh weather; a major storm, heavy snowfall or other similar event could prevent the Registrant from delivering products in a timely manner.  The Registrant cannot provide assurance that its disaster recovery plan will address all of the issues it may encounter in the event of a disaster or other unanticipated issue, and the Registrant’s business interruption insurance may not adequately compensate it for losses that may occur from any of the foregoing.  In the event that an earthquake, natural disaster, terrorist attack or other catastrophic event were to destroy any part of the Registrant’s facilities or interrupt its operations for any extended period of time, or if harsh weather or health conditions prevent the Registrant from delivering products in a timely manner, the Registrant’s business, financial condition and operating results could be seriously harmed.

The Registrant May Not Be Able To Successfully Consummate Proposed Acquisitions Or Divestitures Or Integrate Acquired Businesses.

From time to time, the Registrant may acquire other businesses and, based on an evaluation of its business portfolio, divest existing businesses. These potential acquisitions and divestitures may present financial, managerial and operational challenges, including diversion of management attention from existing businesses, difficulty with integrating or separating personnel and financial and other systems, increased expenses, assumption of unknown liabilities, and indemnities and potential disputes with the buyers or sellers.  In addition, the Registrant may be required to incur asset impairment charges (including charges related to goodwill and other intangible assets) in connection with acquired businesses which may reduce its profitability. If the Registrant is unable to consummate these transactions, or successfully integrate and grow acquisitions and achieve contemplated revenue synergies and cost savings, its financial results could be adversely affected.

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The Registrant’s Foreign Operations Are Subject To Additional Risks.

The Registrant operates its business and markets its products internationally. In 2007, 40% of the Registrant’s sales were generated in foreign countries. The Registrant’s foreign operations are subject to the risks described in this section, as well as risks related to fluctuations in currency values, foreign currency exchange controls, discriminatory fiscal policies, compliance with foreign laws, enforcement of remedies in foreign jurisdictions and other economic or political uncertainties. In particular, the Registrant’s subsidiaries conduct their businesses in local currency and, for purposes of financial reporting, their results are translated into U.S. dollars based on average exchange rates prevailing during a reporting period. During times of a strengthening U.S. dollar, the Registrant’s reported net revenues and operating income will be reduced because the local currency will translate into fewer U.S. dollars. Additionally, international sales are subject to risks related to imposition of tariffs, quotas, trade barriers and other similar restrictions. All of these risks could result in increased costs or decreased revenues, either of which could adversely affect the Registrant’s profitability.

The Consolidation Of Customers May Put Pressures On The Registrant’s Operating Margins And Profitability.

                The Registrant’s customers, such as supermarkets, warehouse clubs and food distributors, have consolidated in recent years and consolidation is expected to continue throughout the U.S., the European Union and other major markets.  Such consolidation could present a challenge to margin growth and profitability in that it has produced large, sophisticated customers with increased buying power who are more capable of operating with reduced inventories, resisting price increases, and demanding lower pricing, increased promotional programs and specifically tailored products. These factors and others could have an adverse impact on the Registrant’s future sales growth and profitability.

Fluctuations In Foreign Currency Markets May Negatively Impact The Registrant.

                The Registrant is exposed to fluctuations in foreign currency cash flows primarily related to raw material purchases.  Most of this exposure is due to foreign operations needing to purchase raw materials in U.S. dollars.  The Registrant also is 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 Euro, British pound sterling, Canadian dollar, Australian dollar, Mexican peso, Chinese renminbi and Thai baht. 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 exchange changes. Therefore, the Registrant cannot provide assurance 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 The Registrant.

                The Registrant had total outstanding short-term borrowings of approximately $149.2 million at an average interest rate of approximately 5.28% on November 30, 2007.  The Registrant’s policy is to manage its 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

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derivative financial instruments is monitored through regular communication with senior management and the utilization of written guidelines.  However, the Registrant’s use of these instruments may not effectively limit or eliminate its exposure to changes in interest rates. Therefore, the Registrant cannot provide assurance that future interest rate increases will not have a material negative impact on its business, financial position or operating results.

The Pending Acquisition Of The Assets Of Lawry’s May Pose Risks To The Registrant’s Business.

                The Registrant has entered into an asset purchase agreement with Conopco, Inc. under which the Registrant agreed to purchase specified assets used in connection with the manufacturing, marketing, distributing and selling of food products under the Lawry’s and Adolph’s brands, including the “Lawry’s®” and “Adolph’s®” trade names, trademarks, and service marks, and all associated goodwill. There may be risks or costs resulting from the Lawry’s acquisition that are not presently known to the Registrant. Various factors, including regulatory approval, may delay or prevent us from completing the acquisition and increase the costs associated with the acquisition. For example, the Registrant has agreed with Conopco to divest its Season-All® business if the divesture becomes necessary to obtain clearance under the Hart-Scott-Rodino Act (“HSR”). The Registrant has agreed to pay Conopco a $30 million termination fee, subject to certain limited conditions, in the event that HSR clearance is not obtained.

Item 1B.  Unresolved Staff Comments

None.

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 Melbourne, Australia which are leased:

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                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 other properties used for manufacturing consumer and industrial products and for sales, warehousing, distribution and administrative functions.

                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 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 to a vote of security holders during the fourth quarter of Registrant’s fiscal year 2007.

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 16, “Selected Quarterly Data (Unaudited)” of the Notes to Consolidated Financial Statements on page 59 of the Registrant’s Annual Report to Stockholders for 2007, which page is incorporated by reference, the information relating to the market price and dividends paid on the Registrant’s classes of common stock.  The market price of the Registrant’s common stock at the close of business on December 31, 2007 was $37.95 for the Common Stock and $37.91 for the Common Stock Non-Voting.

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                The Registrant’s Common Stock and Common Stock Non-Voting 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, 2007 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 2007:

Note:  In June 2005, the Board of Directors approved an additional $400 million share repurchase authorization.  As of November 30, 2007, $49.1 million remained of the $400 million authorization.  This amount is expected to be sufficient for 2008 share repurchases in view of the anticipated acquisition of the Lawry’s business.

Item 6.  Selected Financial Data

                This information is set forth on the line items titled “Net sales,” “Net income from continuing operations,” “Earnings per share — Diluted - Continuing operations,” “Common dividends declared,” “Long-term debt” and “Total assets” in the “Historical Financial Summary” on page 60 of the Registrant’s Annual Report to Stockholders for 2007, which line items are incorporated by reference. See also Note 1 “Summary of Significant Accounting Policies” on pages 43 through 45 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference.

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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 15 through 37 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference.

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 28 through 30 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference, and in Note 7 “Financial Instruments” on pages 49 and 50 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference.

Item 8.  Financial Statements and Supplementary Data

                The financial statements and supplementary data are included on pages 39 through 59 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference. The report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on such financial statements is included on page 38 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference. The supplemental schedule for 2005, 2006 and 2007 is included on page 18 of this Annual Report on Form 10-K.

                The unaudited quarterly data is included in Note 16, “Selected Quarterly Data (Unaudited)” of the Notes to Consolidated Financial Statements on page 59 of the Registrant’s Annual Report to Stockholders for 2007, 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, 2007 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 pages 37 and 38 of the Registrant’s Annual Report to Stockholders for 2007, which pages are incorporated by reference.  No change occurred in the Registrant’s internal controls

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over financial reporting (as defined in Rule 13a-15(f)) during the last fiscal quarter which was identified in connection with the evaluation required by Rule 13a-15(a) as materially affecting, or reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

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 and 32 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 certification with the NYSE on April 13, 2007 reporting that he was not aware of any violation by the Registrant of the NYSE’s Corporate Governance listing standards.

Item 9B.  Other Information

                In connection with the retirement of Mr. Lawless as Chief Executive Officer effective January 1, 2008, the Registrant entered into a consulting agreement with Mr.  Lawless, the current Chairman of the Registrant’s Board of Directors.  The agreement provides that Mr. Lawless, when and as requested by Mr. Wilson, the Registrant’s current Chief Executive Officer, will provide consulting services and advice to the Registrant and participate in various external activities and events for the benefit of the Registrant.  The agreement, which was approved by the Compensation Committee of the Registrant’s Board of Directors on January 22, 2008 and was executed on January 23, 2008, has a term of twelve months beginning January 1, 2008 and may be renewed for additional periods of time thereafter upon mutual written agreement.  Mr.  Lawless is to provide up to 400 hours of consulting services per year to the Registrant, subject to his reasonable availability.  For his services and commitments, the Registrant will pay Mr. Lawless a consulting fee at a rate equal to $20,000 per month for each month during the term of the agreement.  The Registrant will also reimburse Mr. Lawless for reasonable expenses that he incurs in providing these services.

PART III

Item 10.  Directors, Executive Officers of the Registrant and Corporate Governance

                Information responsive to this item is set forth in the sections titled “Corporate Goverannce,” “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Registrant’s Proxy Statement for 2008, incorporated by reference herein, to be filed within 120 days after the end of the Registrant’s fiscal year (the “2008 Proxy Statement”).

                In addition to the executive officers described in the 2008 Proxy Statement 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.; Charles T. Langmead; Cecile K. Perich; and Robert W. Skelton.

                Mr. Beard is 53 years old and, during the last five years, has held the following position with the Registrant: March 2002 to present — Vice President, Finance & Treasurer.

                Mr. Kelly is 53 years old and, during the last five years, has held the following position with the Registrant: February 2000 to present — Vice President & Controller.

                Mr. Langmead is 50 years old and, during the last five years, has held the following positions with the Registrant:  September 2005 to present — President, U.S. Industrial Group; February 2002 to September 2005 — Vice President & General Manager, Food Service & Global Restaurant Divisions.

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                Ms. Perich is 56 years old and, during the last five years, has held the following positions with the Registrant: February 2007 to present — Vice President — Human Relations; January 1997 to February 2007 — Vice President — Human Relations, U.S. Industrial Group.

                Mr. Skelton is 60 years old and, during the last five years, has held the following position with the Registrant: November 2002 to present — Senior Vice President, General Counsel & Secretary.

                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 “Compensation of Directors,” “Compensation Discussion And Analysis,” “Compensation Committee Report,” “Summary Compensation Table,” “Grants of Plan-Based Awards,” “Narrative to the Summary Compensation Table and Grants of Plan-Based Awards Table,” “Outstanding Equity Awards at Fiscal Year-End,” “Option Exercises and Stock Vested in Last Fiscal Year,” “Pension Benefits,” “Non-Qualified Deferred Compensation,” “Potential Payments Upon Termination or Change in Control,” “Compensation Committee Interlocks and Insider Participation” and “Equity Compensation Plan Information” in the 2008 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 2008 Proxy Statement.

Item 13.  Certain Relationships and Related Transactions

                Information responsive to this Item is incorporated herein by reference to the section entitled “Corporate Governance” in the 2008 Proxy Statement.

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 2008 Proxy Statement.

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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 17 of this Report.

                                2.             The financial statement schedule required by Item 8 of this Form 10-K which is listed in the Table of Contents appearing on page 17 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 19 through 21 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.

McCORMICK & COMPANY, INCORPORATED

                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.

Principal Executive Officer:

Principal Financial Officer:

Principal Accounting Officer:

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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 2007 Annual Report to Stockholders, the following consolidated financial statements are incorporated by reference in Item 8*:

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 2007 Annual Report to Stockholders of the Registrant for its fiscal year ended November 30, 2007 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)

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EXHIBIT INDEX

19

20

* Management contract or compensatory plan or arrangement.

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Exhibit 10(xiii)

CONSULTING AGREEMENT

                THIS AGREEMENT, made as of the 1st day of January, 2007, by and between McCormick & Company, Incorporated, a Maryland corporation having its principal office at 18 Loveton Circle, Sparks, Maryland 21152 (“McCormick”) and CKB Consulting LLC, a Florida corporation having its principal office at 23641 Waterside Drive, Bonita Springs, Florida 34134 (“Consultant”) and Robert J. Lawless, an individual residing at the same address, as the principal stockholder of Consultant and guarantor of Consultant’s obligations hereunder (“RJL”).

RECITALS

                WHEREAS, the Consultant provides business consulting services to senior management of corporations and employs RJL as its principal consultant; and

                WHEREAS, McCormick desires to obtain the personal services of RJL to provide guidance and advice to McCormick’s senior executives with respect to the management of a number of McCormick’s joint venture relationships, matters of policy, organizational design and structure, strategy, and other significant issues affecting McCormick’s business; and

                WHEREAS, the Consultant has agreed to provide the personal services of RJL to McCormick for such purposes; and

                WHEREAS, McCormick, the Consultant, and RJL desire to enter into a written  agreement which sets forth the respective rights and obligations of the parties.

                NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Agreement, the parties agree as follows:

                                                1.             Retention/Scope of Services. McCormick hereby retains the Consultant in order to avail itself of specialized management consulting services. Consultant shall provide McCormick with certain unique personal services which can only be performed by RJL based on his several years of previous experience as Chief Executive Officer of McCormick.  Such personal services shall include providing guidance and advice to senior executives at McCormick with respect to the management of a number of McCormick’s joint venture relationships, matters of policy, organizational design and structure, strategy, other significant issues affecting McCormick’s global business and such other assistance as may be requested from time to time by Alan D. Wilson, President and Chief Executive Officer.  Consultant will make RJL available to McCormick, as reasonably requested, for a period of time not to exceed 400 hours during any calendar year.

2.             Term. The term of this Agreement shall commence on the date hereof and shall continue until December 31, 2008 and may be renewed for additional periods of time thereafter upon written agreement of the parties, subject to the approval of the Compensation Committee of the Board of Directors of McCormick.  In the event of any termination of this Agreement in advance of the expiration date as provided hereafter, McCormick will pay Consultant for all months, or fractions thereof, which have elapsed as of the date of termination. No termination of this Agreement, whether pursuant to this Section or otherwise, shall in any way affect Consultant’s obligations under Sections 6, 7 and 8 hereof which are expressly understood to survive termination.

3.             Fees/Expenses. During the term of this Agreement, McCormick shall pay Consultant a consulting fee at a rate equal to Twenty Thousand Dollars ($20,000) per month for each month during the term of this Agreement.  In addition to the aforesaid fee, McCormick shall reimburse Consultant for all reasonable expenses for travel, food and lodging incurred by Consultant in performing such services hereunder.  Consultant will invoice McCormick for all expenses as incurred, said invoices to include appropriate documentation to verify such expenses.  McCormick will pay such invoices within thirty (30) days of receipt of the invoice.

4.             Independent Contractor. The parties hereto understand that Consultant is an independent contractor, that no employment relationship is created by this Agreement between McCormick and RJL, and that neither the Consultant nor RJL shall therefore act or hold itself or himself out as an employee, agent, partner or joint venturer of or with McCormick.

5.             Termination Events. Notwithstanding anything contained herein to the contrary, this Agreement shall cease and terminate immediately upon the occurrence of any of the following events:

                a.             The death or incapacity of RJL;

                b.             A failure or refusal by RJL to render the consulting services requested of Consultant by McCormick, or the commission of any act of gross negligence or fraud or any failure to act which constitutes gross negligence or fraud on the part of RJL or the Consultant and which is reasonably determined to be detrimental to the welfare of McCormick or injurious to McCormick’s reputation; or

                c.             The breach or non-observance by RJL or the Consultant of any of the covenants or stipulations herein contained or any default or misconduct constituting gross negligence or fraud on the part of RJL or the Consultant.

6.             Nondisclosure: The Consultant and RJL agree that they

                a.             will not , either during the term of this Agreement, or thereafter, disclose in any manner whatsoever, any secret or confidential information or know-how concerning the business or products of McCormick (“Confidential Information”);

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                b.             will not, at any time use any Confidential Information for any commercial purpose whatsoever, except in the performance of this Agreement; and

                c.             will immediately return all Confidential Information in their possession to McCormick upon request and will not thereafter retain copies of any such information whatsoever.

                For purposes of this Agreement, “Confidential Information” shall not include any information which is in or becomes part of the public domain through no fault of the Consultant or RJL, or which is disclosed to Consultant or RJL by a third party having no obligation of confidentiality to McCormick.

7.             Disclosure and Ownership of Inventions/Execution of Documents.

                a.         Consultant and RJL will promptly disclose in writing to McCormick all writings, inventions, improvements or discoveries (collectively, “Inventions”) whether copyrightable or patentable or not, which arise out of any services performed during the Term.

                b.         Any and all inventions that arise out of any services performed during the Term, including any and all inventions which arise after the termination of this Agreement and which were made with the use of any information obtained from McCormick during the Term, are the exclusive property of McCormick.

                c.         Consultant and RJL agree, at the request and the expense of McCormick, to sign and execute all instruments that, in McCormick’s reasonable opinion, are necessary to carry out the intention of this Agreement, including all assignments and other papers necessary to vest the entire right, title and interest in the Inventions in McCormick.  Consultant will do all lawful acts and sign all other papers McCormick may reasonably request relating to applications for patents, trademarks, and copyrights, both United States and foreign, and providing for the protection of McCormick’s right, title or interest in any of said matters.

8.             Non-Exclusivity/Covenant Not to Compete.  McCormick understands and agrees that, except as set forth in the next sentence, Consultant shall not be prevented or barred from rendering services of any nature for or on behalf of any other person, firm, corporation or entity, subject to Consultant’s obligation to maintain the confidentiality of McCormick’s trade secret information pursuant to Section 6 hereof.  The Consultant and RJL hereby covenant and agree that they will not, without the prior written consent of McCormick, at any time during the Term of this Agreement, or for a period of one year following the expiration or termination of this Agreement, as an employee, consultant, director or otherwise, either individually or in partnership or jointly or in conjunction with any person or persons, firm or association, syndicate, company or corporation, as principal, agent, shareholder or in any manner whatsoever, carry on or be engaged in or

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concerned with or interested in or advise, any business which competes with or is otherwise similar to the business carried on by McCormick.

9.             Assignment. This Agreement shall not be assigned by the Consultant without the prior written consent of McCormick.

10.           Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Maryland.

11.           Notices. Any notice or other communication, other than routine communications, between the parties shall be in writing and shall be deemed to have been duly given if mailed first class, postage prepaid, certified or registered mail, return receipt requested, to the other party at its or her address as it or Consultant may have furnished to the other party in writing for such purpose.

12.           Amendment. This Agreement may not be amended except in a writing signed by the respective parties hereto.

13.           Severability. In the event any provision or any portion of any provision of this Agreement is found to be unenforceable or invalid, such provision or such portion of such provision shall be severable from this Agreement and shall not affect the enforceability or validity of any other provision or other portion of such provision contained in this Agreement.

14.           Entire Agreement. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof.

15.           Execution in Counterparts.   This Agreement may be executed by the parties in counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

16.           Survival of Certain Provisions.  The provisions of Sections 6, 7 and 8 of this Agreement shall survive the expiration and/or termination of this Agreement.

                IN WITNESS WHEREOF, McCormick and Consultant have caused this Agreement to be executed as of the date first above written.

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EXHIBIT 13

Annual Report to Stockholders

Exhibit 13

A TASTE FOR THE FUTURE

CHINESE FIVE-SPICE

Chinese Five-Spice balances equal parts anise, Szechuan peppercorn, cinnamon, cloves and fennel seed into a blend that is pungent, fragrant, hot and slightly sweet – all at once. This year’s annual report is scented with Chinese Five-Spice.

FINANCIAL HIGHLIGHTS

These financial results include the impact of activities related to our restructuring plan.

In 2007, these activities reduced operating income by $34.0 million, net income by $24.2 million and diluted earnings per share by $0.18. In 2006, these activities reduced operating income by $84.1 million, net income by $30.3 million and diluted earnings per share by $0.22.

On a comparable basis, excluding the impact of restructuring activities, diluted earnings per share rose 11.6% in 2007.

All around the world, people seeking bold, exotic and exciting flavors are turning to McCormick. Inside this report we provide a taste for the future… a look ahead at the trends and opportunities that are driving our growth.

CONTENTS

Letter to Shareholders   2

Bob and Alan team up in their letter to shareholders to discuss our progress in 2007, strategies for growth and business outlook.

Discussion with Management Committee   5

Join our executives as they sit down to address some of the most commonly asked questions from investors.

A Journey with Bob Lawless   14

We recall Bob’s many contributions during his 30-year career and time as CEO of McCormick.

Management’s Discussion and Analysis   15

This section begins with a company description and includes information about business segments, 2007 financial results and much more.

Directors and Officers   34

A profile of our Board of Directors and list of executive officers are presented along with our governance statement.

Financial Information   36

The 2007 financial statements, accompanying notes and reports of both management and the auditors are in this section.

Investor Information   61

Investors can find company contact and related information.

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Fellow Shareholders...

Based on the strength and momentum of our business and the commitment of its leadership, your company is well-positioned for long-term sales and profit growth on a global basis. We exceeded key 2007 financial goals and made excellent progress during the year with initiatives to increase sales, reduce costs and expand our markets. In addition, we took the next step in an orderly transition of the executive team.

We are excited about our prospects as we look across our business and to 2008 and beyond. Through this letter and the discussion that follows, we want to share that excitement and give you a taste for the future.

Growth in global markets

We are achieving good sales growth in each region and segment of our business.

Consumer sales rose 6% in North America, driven by pricing, new products, effective marketing programs and, in the first half of the year, the incremental impact of our acquisition of Simply Asia Foods. At the same time, our industrial business in North America achieved higher sales to food manufacturers, though the gains were offset in part by sales to restaurants, which were affected by industry weakness in 2007.

Our business in Europe is turning a corner as a result of stronger marketing support and greater focus on our primary markets. With favorable foreign exchange rates, price increases and higher volume in both France and the U.K. we increased consumer sales 11%. Strong sales of condiments and seasonings for snack products, along with favorable foreign exchange rates, fueled a 20% increase in the industrial business in Europe. And expansion in China was a primary factor behind an increase of 20% in sales across both segments in the Asia Pacific region.

Exceeded key 2007 financial goals

Financial results in 2007 exceeded a number of our key objectives. We increased sales 7%, surpassing our goal of 4 to 6%. And cost savings related to a three-year restructuring program were $35 million in 2007, $5 million ahead of target and pushing cumulative savings from the program to $45 million. Increased costs for raw materials offset a portion of these cost savings. We have also taken certain pricing actions to provide an additional offset to higher costs.

Earnings per share were $1.73. On a comparable basis, excluding the impact of restructuring activities in 2007 and 2006, this was a 12% improvement, above our initial goal to increase earnings per share by 8 to 10%.

The Company again generated a significant amount of cash, funding $157 million of share repurchases and a 9% increase in dividends paid – our 21st consecutive year of dividend increases. With the Board’s approval, we have increased dividends per share at a 14% compound annual growth rate for the past five years.

Positioned for the future

The same growth strategy that has driven our success for a decade continues to set our future direction: improve margins, invest in the business, and increase sales and profits.

Margin improvement is a key element of our success. A restructuring program that includes consolidating our global manufacturing and eliminating administrative redundancies is on track to deliver at least $50 million in annual savings by the end of 2008. In addition, we are reducing complexity by selectively eliminating certain products and customers. These actions have increased average sales per customer for our U.S. industrial business by 51% in 2007 when compared to 2005. We see additional opportunities to improve efficiency and optimize our supply chain across our global operations.

Cost savings such as these were key to offsetting higher raw material costs in 2007. We are also using a portion of our margin improvement to invest in the growth of our business, funding marketing support, product innovation and other areas that offer the greatest potential to increase sales.

The same growth strategy that has driven our success for a decade continues to set our future direction.

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Robert J. Lawless and Alan D. Wilson

To drive consumer demand, we are revitalizing our venerable brands in worldwide markets. The most significant of these efforts is under way in the United States – the largest and most profitable market for our consumer business – where a gravity-fed merchandising system is being installed in 12,000 to 14,000 supermarkets. The innovative product display is increasing purchases by consumers and reducing restocking time for the retailers. In Europe, we are driving sales of our Schwartz^® brand in the U.K. and Ducros^® brand in France with improved merchandising systems and increased advertising.

Product innovation is also driving sales as we build upon platforms such as health and wellness, convenience and ethnic flavors, and meet consumer desire for reduced fat and sodium with flavorful products in both our consumer and industrial businesses. And as time-pressed consumers turn more and more to grilling, slow cookers and seafood preparation, we are responding with additional flavor solutions. In North America, 2007 sales of seafood complements grew by 6%, grilling products by 7% and slow cooker seasonings by 17%. Across all businesses, new products launched in the last three years added 10% to 2007 sales.

Since 2002, the Company has achieved an average annual increase in net sales of 7%. One-fourth of this increase has been driven by acquisitions.

Emerging markets offer an opportunity for rapid sales growth, as evidenced by the 23% growth of our business in China in 2007. We are focused on additional markets with similar growth characteristics, such as India, as we strive to double our sales in the Asia Pacific region over the next five years.

Acquisitions are also an integral part of our growth strategy. We are particularly interested in acquiring leading brands in regions where we have low penetration, and niche products in more developed markets. Above all else, however, flavor is the defining factor in all of our targeting efforts. Altogether, acquisitions have added one-fourth of our sales increase in the past five years, and we are working to sustain this level of contribution. As evidence of our continued progress, in November 2007, we were pleased to sign an agreement to purchase the Lawry’s business with annual sales of approximately $150 million.

A look ahead

Over the years, our business has faced challenges from higher costs, difficult economic conditions, aggressive competitors and demanding customers. We have weathered cost pressures and weak economies, and have the margin improvement potential to do so in the future. We are staying ahead of our competitors and creating value for our

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customers by continuing to develop new capabilities in areas such as quality, service, systems, marketing and innovation.

Our leading market position, effective growth strategy, strong balance sheet and focus on flavor have positioned us well. Once we complete our restructuring program in 2008, we expect our sales initiatives to drive sales growth of 4 to 6% annually. These higher sales and improved margins should generate an increase of 9 to 11% in earnings per share.

As always, McCormick’s engaged employees are at the center of our success. Throughout our operations, we interact in a participative manner based on our Multiple Management Board approach. In 2007 we celebrated the 75th anniversary of this problem-solving and professional development system, which is deeply ingrained in our corporate culture.

Strong, far-sighted leadership is also essential to continued success. Our Board is comprised of experienced business leaders and we are pleased to welcome Joseph McGrath, President & CEO of Unisys Corporation as a new director. Over the past year we completed the transition of our executive team. Following his promotion to President & COO at the end of 2006, Alan became a member of the Board in November and was appointed President & CEO as of January 1, 2008. Bob retired at the beginning of the new year but continues to serve as Chairman of the Board.

In addition, Gordon Stetz, who has provided key financial leadership to our U.S. and international operations for two decades, was promoted to CFO following the announcement of Fran Contino’s upcoming retirement from the Company and the Board. During his ten years at McCormick, Fran was instrumental in establishing common systems and processes throughout our operations with our B2K program, strengthening internal controls and building a terrific financial team. Fran’s involvement has led to success with our acquisition strategy and, since 2004, he has led our strategic planning effort at the Company. We thank him for his many contributions.

The executive team that will take this Company forward has been an integral part of setting our direction, formulating programs and achieving great execution in recent years. We approach the years ahead with excitement and tremendous optimism.

Our business is well-positioned with leading brands and a focus on flavor. An effective and sustainable strategy sets our direction. Motivated and energetic employees move us forward. We are confident in our ability to build shareholder value.

It promises to be a future as bold and exciting as the flavors upon which McCormick & Company has built its success since 1889.

Robert J. Lawless, Chairman of the Board

Alan D. Wilson, President and CEO

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Left to Right:

Francis A. Contino, Executive Vice President – Strategic Planning

Lawrence E. Kurzius, President – Europe, Middle East & Africa

Charles T. Langmead, President – U.S. Industrial Group

Robert J. Lawless, Chairman of the Board

Gordon M. Stetz, Executive Vice President – Chief Financial Officer

Mark T. Timbie, President – North American Consumer Foods

Alan D. Wilson, President & Chief Executive Officer

Join McCormick’s Management Committee and Bob Lawless as they address some of the questions shareholders ask most often. These are arranged by topic...

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With an expanded array of organic products, the introduction of exotic sea salts and growing interest in TV cooking shows, we grew U.S. sales of our gourmet products 12% in 2007.

Brand spending behind print ads has one of the highest returns as measured by incremental sales. Shown here is an ad for some of our popular seasoning mixes.

You have achieved good sales growth in the past. Looking ahead, what do you believe will be the primary drivers of future sales growth?

MARK > In the United States we are revitalizing our entire spice and seasoning line to bring renewed interest and excitement to the category.

This initiative tackles some of the foremost consumer issues with an easy-to-open flip-top cap and an easier-to-shop merchandising system. With this system we can prominently feature new items such as our tabletop spices, seasoned pepper blends or roasting rubs. For our grocery customers, the system is reducing out-of-stock situations and reducing restock time by up to 40%. We have installed 8,500 stores and aim to convert another 3,500 to 5,500.

CHUCK > For our U.S. industrial business, strong customer relationships continue to be the critical factor in achieving our growth targets.

On average, our share of business with strategic customers is about 25%. To grow this, we are guided by the customers’ view of what is important as we build upon our strong foundation of trust, innovative processes and efficient supply chain initiatives.

This partnership model led to the successful design and implementation of our new Create IT^® process. Together with the customers’ marketing and innovation teams, we start with idea generation and move quickly and efficiently through product development, consumer validation and commercialization. In this way our customers are reducing their development cost and getting successful products to market ahead of their competition. The benefit to McCormick is a greater share of our customers’ business and our participation in products that succeed in the marketplace over a longer time horizon.

ALAN > With the goal of improving both sales growth and profitability, we are completing a transformation of our U.S. industrial business that began in 2006. Chuck and his team have reduced the number of customers we serve by 31% and reduced the number of products sold by 20%. In very short order, we have better aligned our resources, particularly in product innovation, behind our strategic customers.

Product innovation is also a key initiative to drive sales of our consumer business. We have had considerable success building upon a number of product platforms.

In recent years 10% of our global sales came from products that we have introduced in the last three years.

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.

As part of our Create IT process, we bring together culinary chefs, sensory experts and flavor technologists to discuss trends and develop winning new product ideas.

MARK > Our GrillMates^® line in the U.S. is a good example. It began in the early 1990s with a single seasoning blend that originated in Canada. Today 31 GrillMates items include marinades, rubs, reduced sodium varieties and more. Year after year we have grown sales of these products at a rapid pace, and annual sales are now $35 million.

Following the acquisition of the Ducros brand in Europe, we introduced three Ducros grinders in the U.S. under the McCormick label. Six years later, these products have reached $22 million in sales with 14 varieties.

We have also been expanding our products designed for consumers of Hispanic descent. These products now account for 8% of U.S. consumer sales, and they grew 11% in 2007.

BOB > The Hispanic items we offer include mayonnaise and marmalade imported from McCormick de Mexico. This 60-year-old joint venture has made McCormick the leading brand in Mexico, and Hispanic consumers in many U.S. markets actively seek these products. This highly successful joint venture now accounts for most of our income from unconsolidated operations, which in 2007 comprised nearly 10% of our earnings per share.

We can’t overlook two other avenues of sales growth –our marketing programs and acquisitions.

ALAN > We have increased our level of brand support in recent years and are getting better each year at measuring the effectiveness of our spending. We are seeing the best returns from our public relations activity, print advertising and television advertising.

As for acquisitions, they’ve accounted for one-fourth of our 7% average annual sales growth in the past five years and will continue to be a key part of our sales growth. Our recently announced agreement to acquire the Lawry’s business is evidence of our continued progress with acquisitions. In our developed markets, we are seeking niche brands that have a distinct flavor profile. In markets where we currently have low penetration, including emerging markets, we are targeting leading brands.

Besides acquisitions, how will you grow sales outside North America?

LAWRENCE > Europe is our second-largest market, contributing 25% of Company sales. Many of the same consumer business initiatives we talked about for North America are driving our growth in this market.

New merchandising systems introduced in the U.K. and France are designed to simplify the shopping experience, reduce labor and optimize our shelf space. Product innovation includes an award-winning spice package, easy-to-use

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We are gaining distribution of our products in China’s street markets which are a frequent stop for consumers.

In Europe we are growing sales with increased brand support, improved merchandising systems and the introduction of innovative new products.

Toppers^® and a relaunch of our successful grinders. Brand support includes TV advertising featuring our chef character in France, and both TV and radio advertising in the U.K. We have just launched a print advertising campaign in the U.K. that will be rolled out more broadly across Europe in 2008.

GORDON > Having just returned from several years in Europe, I can tell you first-hand that we have turned a corner with this business. We have reduced complexity, focused on our most profitable businesses, built our brands and developed our people capabilities.

The most striking example of our progress is in our industrial business, where we have gone from approximately 500 customers in 2003 to 50 customers by the end of 2007. In this market as well, we are focused on the largest customers with the greatest potential for growth.

LAWRENCE > These customers are the leaders in their industry, and many of them have multinational businesses. In addition to a strong top-to-top relationship, we are supporting them from our locations around the world with product innovation and production.

ALAN > This is certainly true in China and was really the origin of our business there about 15 years ago. We built a facility to support the expansion of industrial customers in this region and from this same facility, launched a line of consumer products that is profitable and growing rapidly.

China, together with Australia and other countries in the region, comprised 6% of 2007 sales. Our goal is to more than double our sales in the Asia Pacific region by 2012. We expect to continue our rapid pace of both consumer and industrial sales growth in China and to expand into other markets with good growth characteristics, such as India.

Across all markets, what eating trends are you watching most closely?

ALAN > McCormick is on the leading edge of flavor. Every year we bring together top chefs to discuss the hottest trends and develop our McCormick Flavor Forecast^TM, which is eagerly awaited by professional chefs and food editors.

I would say consumers’ interest in health and wellness is the number-one trend. We recently launched the McCormick Science Institute to advance the health benefits of natural spices and herbs. As consumers work to reduce their intake of fat, salt or sugar, McCormick is ideally suited as an expert in natural spices and herbs.

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Members of our global financial team met in 2007. The discussion included using the power of our systems to lower costs in the supply chain.

Over the past few years, much of your time has been spent on restructuring the Company. With this program nearly complete, are there more opportunities to improve the supply chain?

FRAN > Toward the end of 2005, we announced an ambitious three-year restructuring program that included actions to consolidate facilities and eliminate administrative redundancies. Our goal was to realize annual cost savings of $50 million by the end of 2008.

Thanks to the hard work of our employees and diligent planning and management of this program, we have made terrific progress. By the end of 2007 we had already achieved annual savings of $45 million, and we expect up to $10 million more in 2008.

While we have made great strides in improving our supply chain and profit margins with this program and other initiatives, we still see lots of opportunities ahead – opportunities in areas like procurement, manufacturing, distribution, sales and marketing, and administration.

CHUCK > In the U.S. industrial business, our resources are focused on our most important customers. By reducing the overall number of customers and products, we have been able to close facilities and lower our cost to serve. In 2007, the margin improvement from these actions was largely offset by significant commodity cost increases on certain product categories and customers. As commodity costs moderate, as pricing actions are fully implemented and as we experience continued success in delivering value added products, we will make further progress toward higher sustainable margins for the industrial business.

In addition to lowering our costs, we are also reducing the level of inventory on hand. Again, this was partially offset in 2007 by higher prices for many raw materials, but our supply chain initiatives are leading to reduced time supply and lower safety stock levels.

ALAN > In addition to our U.S. industrial business, there are opportunities to lower inventory and total working capital in all of our operations around the world.  

Following the implementation of SAP, our first priority was to improve processes and identify and achieve expense reductions. As Fran indicated, our restructuring program was an important step in this direction.

McCormick expects to reach up to $55 million in annual savings in 2008, ahead of its $50 million goal.

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Our spice buyers work with growers around the world to procure consistent high-quality ingredients.

McCormick is an industry leader in designing techniques to test the quality and consistency of our ingredients.

As we continue up the learning curve with our systems, I have challenged employees across all locations and functions to increase their proficiency and apply these tools in new ways. I am convinced that this will lead to additional insights about our business and opportunities to lower costs.

GORDON > In 2008 we are changing our incentive program to align everyone in the organization with working capital management. We are adding a “capital cost” for the amount of assets, net of liabilities, that are managed by our operating units.

Our business generates a significant amount of cash. We can take this to the next level with better supply chain management, which means lower costs and better management of our working capital.

What is McCormick doing in the area of sustainability?

ALAN > Our business was built on a cultural foundation of concern for one another. For 75 years, our Multiple Management philosophy has encouraged the involvement of employees in community service activities as well as at all levels of the Company. We are open in our communications, value diversity among our employees and provide many opportunities for learning and development.

Global sourcing is a core competency for our business. We firmly believe that providing assistance to the communities that supply our raw materials and manufacture our products will enable them to improve their productivity and their living conditions. For more than 20 years we have provided training for agriculture and processing of spices and herbs and have improved food safety, quality and yield. This is critical to our continued growth and success.

LAWRENCE > Having led our consumer business in the U.S. and now both our consumer and industrial businesses in Europe, I am keenly aware of our reputation as a reliable supplier of high-quality products. This is a real advantage as we compete against smaller suppliers that do not have a close connection to the source of their raw materials or the same degree of quality assurance that we can provide.

ALAN > In 2007 we set goals to monitor our impact on the environment. We have introduced metrics that will measure our progress in several key areas: solid waste reduction, energy use reduction, lower greenhouse gas emissions and the development of fair trade for selected commodities.

At McCormick, we don’t view sustainability as a side issue, but as something that is an integral part of our business and essential to our success.

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We are expanding acquired businesses with new product introductions such asThai Kitchen®meal kits, Zatarain’s® reduced sodium rice mixes and Silvo® Toppers.

In 2007 you shared some financial projections beyond 2008. Please help me understand how you will achieve 9 to 11% growth in earnings per share?

BOB > I’d like to explain how we developed the longer-term financial projections for the business and why we decided to communicate them to investors. Fiscal year 2007 marked the mid-way point in our three-year restructuring program. During this period, sales and profits were somewhat curtailed by our rationalization of smaller and less profitable customers and products.

As part of our strategic planning process we asked our leadership team to take a look ahead at their portfolio of products, growth prospects and supply chain initiatives. With good visibility, each operating group developed projections for sales growth, margin improvement and increased operating income that were then consolidated for the total Company.

We recognized that many of our shareholders would benefit from learning and understanding our longer-term outlook.

GORDON > Investors have asked if we think some of our projections are overly ambitious. We don’t think so.

We expect to grow sales 4 to 6% annually. As Alan indicated earlier, we have achieved average annual sales growth of 7% for the past five years, with one-fourth of this increase coming from acquisitions.

MARK > The largest part of the 4 to 6% sales increase will come from a 2 to 3% increase in our “base business.” Our revitalization of packaging, products and merchandising is lifting sales of the entire category for our core consumer businesses. In addition, we are working to build our market share with more effective advertising. The introduction of new products will add another 1 to 2% to sales.

GORDON > Over time, we believe we can increase gross profit margins by half a percentage point per year. About half of this increase will come from our supply chain initiatives. The other half will result from the faster growth of our consumer business, which has a higher margin than the industrial business.

As part of our growth strategy, we intend to invest a portion of this margin improvement back in the business to build for the future. Higher margins will also contribute to a 9 to 11% annual increase in earnings per share.

Beyond 2008, once our restructuring program is complete, we expect to grow annual sales 4-6%.

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With a leading share, it is our responsibility to bring innovation, news and excitement to consumers.

Our Multiple Management Board in Mexico is one of 13 around the world. This is a team-based system that allows a diverse cross-section of employees to develop and work on projects to improve nearly any aspect of the business.

What distinguishes McCormick from other companies?

LAWRENCE > We operate from a position of strength in our primary markets. We have the number-one market share in the U.S., Canada, U.K., France and China, as well as several smaller markets.

As the clear category leader, we supply our retail customers with the entire range of spice and seasoning products, from premium gourmet items to value-priced store brands. Among packaged food companies, this is an enviable position.

CHUCK > Our business is all about flavor. Datamonitor recently reported that 41% of U.S.and European consumers have tried food with new and exotic flavors in the last 12 months.

We don’t sell a single type of product. Rather, flavor is something that spans all types of food and all types of eating occasions. Our two business segments – consumer and industrial – connect us to a wide array of products where we can add great taste. Whether it is a meal at home, a night out or a snack on-the-go, we have an opportunity to provide the flavor.

We like to say, “No matter where or what you eat, each day you are likely to enjoy something flavored by McCormick.”

ALAN > As described earlier, we have a unique expertise in the sourcing of spices and herbs from locations around the world.

Consumer interest in natural spices and herbs fits perfectly with our capabilities in this regard. For our industrial business, quality and reliability are paramount. Our customers know that McCormick understands the importance of a brand and will apply rigorous standards to the products we supply.

A side benefit of our global sourcing effort is that we have an established link with several of the emerging markets that we have targeted for expansion.

MARK > McCormick also has a unique position in the area of acquisitions. As a mid-size food company, we are targeting a number of brands and businesses of a size that might not interest larger food companies. In fact, some of the smaller businesses these larger companies might shed as they refine their portfolio of products would be meaningful additions to our Company.

FRAN > We have maintained a strong balance sheet that has afforded us an excellent credit rating and leverage for acquisitions such as Lawry’s. While some investors have asked why we have not increased our debt and been more aggressive with share repurchases, we prefer to maintain our financial flexibility.

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Between our consumer and industrial businesses, no matter where or what you eat, each day you are likely to enjoy something flavored by McCormick.

We will continue to use our strong cash flow wisely by balancing dividends, capital expenditures, acquisitions and stock repurchases.

What else should a prospective investor know about McCormick?

GORDON > McCormick has been aggressive in pursuing margin improvement. We have been willing to challenge all areas of our business, including systems, facilities and organization. We see opportunities ahead to optimize our business.

While our financial objectives may seem aggressive, we are convinced they are achievable. Sales growth of 4 to 6% and earnings per share growth of 9 to11% are in line with our long-term track record. The momentum and initiatives underway give us the confidence to set and share these long-term projections.

BOB > This confidence is based on the abilities and enthusiasm of McCormick employees around the world, as well as the experience and motivation of the leadership team.

Throughout the Company, we have a deep culture of hard work and ethics that has endured significant changes to the business. Our Multiple Management philosophy lays the foundation by encouraging the participation and inclusion of all employees.

I’m pleased that we have seamlessly transitioned to a new executive team. This team has the drive and knowledge to lead McCormick through its next generation of growth.

Alan > Our strategy for growth is to improve margins, invest in the business and grow sales and profits. It’s a simple strategy, but one that is known and understood by our employees around the world. It has been behind our success in nearly tripling earnings per share and more than doubling the market capitalization of this Company in the past 10 years.

This strategy is both effective and sustainable, and it will guide us through McCormick’s next period of growth.

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A Journey with Bob Lawless

Bob Lawless’ retirement as Chief Executive Officer concluded a 30-year career as an active McCormick employee in which he brought a boundless energy to each goal he pursued. Over the past 11 years as President and CEO, he led the transformation of the Company solidifying its position as an industry leader and a global company on the move.

Bob’s global travels gave him the opportunity to interact with thousands of McCormick employees worldwide. It was through such regular contact with the vast employee population that he communicated his passion to grow McCormick. The regular employee interaction also confirmed to him that measures to contemporize the business be made in harmony with the Shared Values and culture of this unique company. The results have been impressive.

He drove initiatives that brought the Company’s commitment to innovation to new levels. Technologically, the Company made tremendous strides under Bob’s leadership. His approach to acquisitions brought resounding success as companies purchased under Bob’s tenure were assimilated seamlessly and brought the desired return. His support of building brands and serving customers on a global basis met with repeated success. As a result, recognition from industry groups and major customers was a regular occurrence during Bob’s tenure.

And stockholders enjoyed the benefits of the Lawless years as well. Since 1996, the stock price has tripled and the quarterly dividend is now $0.22 up from $0.07 per share.

Bob’s impact over the years went beyond the walls of McCormick. His spirit of community service inspired many McCormick employees to follow his lead and volunteer helping those less fortunate. McCormick has a tradition of charitable giving, and Bob was a committed steward of that legacy during his years as Company leader.

During Bob Lawless’ time with McCormick, he has lived the Company’s Shared Values and leaves a lasting impact on the business. Bob, we’ve enjoyed The Journey. Thanks and best wishes from the entire McCormick family.

QUARTERLY DIVIDEND
HAS TRIPLED

Since 1996, the stock price has tripled and the quarterly dividend is now $0.22 up from $0.07 per share.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The purpose of the Management’s Discussion and Analysis (MD&A) is to provide an understanding of McCormick’s business, financial results and financial condition.

The MD&A is organized as follows:

Page 15  Business Overview describes our global operations, strategy, growth initiatives and segments.

Page 18  Results of Operation compares the financial results for 2007 to 2006 and also compares financial results for 2006 to 2005.

Page 22  Liquidity and Financial Condition supplies information regarding our cash flow and financing.

Page 25  Acquisitions profiles a 2007 agreement to acquire the Lawry’s business and our 2006 acquisition of Simply Asia Foods.

Page 26  Restructuring Activities reviews our three-year plan to improve margins.

Page 28  A graph showing Stock Price Performance, is followed by our assessment of Market Risk Sensitivity, our Contractual Obligations and Commercial Commitments, the impact of Recently Issued Accounting Pronouncements, our use of Critical Accounting Estimates and Assumptions, and our comments regarding Forward-Looking Information.

The information in the charts and tables in the MD&A are for the years ended November 30. All dollars are in millions, except per share data. Unless otherwise indicated, the results include the impact of our restructuring activities for all years presented.

BUSINESS OVERVIEW

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, we have approximately 7,500 employees.

Our major sales, distribution and production facilities are located in North America and Europe. Additional facilities are based in Mexico, Central America, Australia, China, Singapore, Thailand and South Africa. In 2007, 41% of sales were outside the United States.

We operate in two business segments, consumer and industrial. Consistent with market conditions in each segment, our consumer business has a higher overall profit margin than our industrial business.

Across both segments, we have the customer base and product breadth to participate in all types of eating occasions, whether it is cooking at home, dining out, purchasing a quick service meal or enjoying a snack.

A Sustainable Strategy

Our strategy – to improve margins, invest in our business and increase sales and profits – has been behind our success over the past 10 years and is our plan for growth in the future.

During the past five years, this strategy has led to average annual sales growth of 7% with acquisitions driving approximately one quarter of the increase. Gross profit margin has risen from 39.1% in 2002 to 40.9% in 2007 and driven increases in operating income and net income.

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We are increasing margins with cost-savings programs, new capabilities and improved processes. Our acquisition of high-margin brands and introduction of higher-margin, more value-added new products are also lifting margins. As we reduce the number of lower-margin products and customers, we are eliminating complexity and further boosting margins.

A portion of the cost savings associated with our actions is being used to fund product development and brand support. During the past five years, we have increased research and development expense 57%. In 2007, we spent $55 million in advertising to consumers, compared to $27 million in 2002. These are effective investments that are driving sales and profit growth at McCormick.

Key Growth Initiatives

Key initiatives underway to grow sales and profits include:

·  A restructuring program to improve our global supply chain was announced in 2005 and will extend through 2008. This plan is reducing our complexity and creating an organization more focused on growth opportunities. We expect to reach up to $55 million in annual cost savings, ahead of our initial goal of $50 million.

·  We are building consumer interest by revitalizing our consumer brands. Currently under way is the revitalization of McCormick brand spices and seasonings in the United States. Along with new packaging, we are installing new shelving systems in 12,000 to 14,000 stores to make shopping easier for the consumer and restocking easier for grocers. A similar effort is under way that is designed to drive growth of our Schwartz brand in the U.K. and the Ducros brand in France.

·  As a leader in our industry, we watch the latest trends to direct our product development activity. Consumer demand for wellness, freshness, convenience, ethnic flavors and more, guide our new products. Innovation at McCormick extends to grinders and other new packaging, and to distribution, such as our penetration of the more frequently shopped street markets in China.

·  Through acquisitions we are adding leading brands to extend our reach into new geographic regions where we currently have little or no distribution. We have a particular interest in emerging markets that offer high growth potential. In our developed markets, we are seeking brands that have a niche position and meet a growing consumer trend.

Our Financial Objectives

With good visibility into our business prospects and operating environment, we use growth objectives as internal goals and to provide a financial outlook for our shareholders. Upon completion in 2008 of our three-year restructuring program, we expect to grow sales annually by 4 to 6% and achieve an annual increase of 9 to 11% in earnings per share.

Our business generates strong cash flow. Actions to grow net income and improve working capital are designed to lead to higher levels of cash. We have paid dividends each year since 1925 and have increased the annual dividend in each of the last 21 years. In the future, we expect to increase dividends at a rate similar to the increase in earnings per share.

Additional cash is being used to fund strategic acquisitions and capital projects. A share repurchase program is lowering shares outstanding and improving value for McCormick shareholders.

During the past five years, 86% of cash from operations directly benefited shareholders in the form of dividends and share repurchases.

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BUSINESS SEGMENTS AT A GLANCE

Consumer Business

From locations around the world, our consumer brands reach nearly 100 countries.

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RESULTS OF OPERATIONS – 2007 COMPARED TO 2006

The increase in sales for 2007 was due to pricing actions taken to offset higher material cost, favorable product mix and higher volumes (including the 0.9% impact of Simply Asia Foods, acquired in June of 2006). Favorable foreign exchange rates added 2.9% for the year. The 2007 sales also reflect the impact of actions to eliminate low margin business, which lowered sales approximately 1%.

Gross profit margin in 2007 decreased 0.1 percentage point. Included in cost of goods sold were restructuring charges for production facilities that are being closed. These charges in 2007 were less than in 2006 and increased gross profit margin by 0.4 percentage point. Cost savings related to restructuring activity lowered cost of goods sold, adding nearly 1.0 percentage point to gross profit margin. Gross profit margin was unfavorably impacted by higher material costs in 2007 that were only partially offset by price increases. Production costs in certain facilities were also affected by incremental costs early in 2007 to maintain customer service during our facility consolidation.

Selling, general and administrative expenses were higher in 2007 than 2006 on a dollar basis but declined as a percentage of net sales. As a percentage of net sales, administrative expense decreased while distribution, selling, promotion, advertising and research and development in total were relatively unchanged. The decrease in administrative expense during 2007 was driven by the benefit of expense reductions from our restructuring program.

The following is a summary of restructuring activities: