MCCORMICK & COMPANY 2004 ANNUAL REPORT from a class action lawsuit that was settled in the Company’s favor in the second quarter of 2004. This matter dated back to 1999 when a number of class action lawsuits were filed against manufacturers and sellers of various flavor enhancers for their violation of antitrust laws. The Company, as a purchaser of such products, participated as a member of the plaintiff class. In the second quarter of 2004, the Company received $11.1 million as a settlement of this claim and as a result of the settlement, was required to settle claims against the Company for a portion of this gross amount. The net gain recorded was $8.7 million. This amount was recorded as a special credit and was not allocated to the business segments.  Costs yet to be incurred from the 2001 restructuring plan include the possible reorganization of a joint venture and additional costs related to completion of the reorganization of certain industrial manufacturing facilities in the U.K. These actions are expected to be completed in 2005. The total 2001 restructuring plan, includes severance charges for 392 posi- tion reductions. As of November 30, 2004, 389 of the 392 planned position reductions had taken place. The major components of the special charges and the remaining accrual balance relating to the 2001 restructuring plan as of November 30, 2002, 2003 and 2004 follow: under the plan are being used for spending on initiatives such as brand support and supply chain management. These savings are included within the cost of goods sold and sell- ing, general and administrative expenses in the consolidated statement of income.  In 2001, the Company recorded $11.2 million ($7.4 million after-tax) of charges from continuing operations associated with the 2001 restructuring plan. Of this amount, $10.3 million was classified as special charges and $0.9 million as cost of goods sold in the consolidated statement of income. These charges related to the consolidation of manufacturing in Canada, a distribution center consolidation in the U.S., a product line elimination and a realignment of the Company’s sales operations in the U.K., and a workforce reduction which encompasses plans in all segments and across all geographic areas. During the year ended November 30, 2002, the Company recorded $7.5 million ($5.5 million after-tax) of special charges from continuing operations associated with the 2001 restruc- turing plan, which could not be accrued at the time of the original announcement in 2001. These charges included the write-off of an investment in an industry purchasing consor- tium, further lease exit and relocation costs related to the workforce reduction and realignment of the Company’s consumer sales operations in the U.S. and further severance and other costs related to the previously discussed workforce reduction. Also included in the 2002 charges were further costs related to the closure of a U.S. distribution center and further costs of the consolidation of manufacturing in Canada, which included the disposition of a manufacturing facility. During 2002, total cash expenditures in connection with the plan were $6.3 million.  During the year ended November 30, 2003, the Company recorded special charges related to continuing operations of $5.5 million ($3.6 million after-tax). The costs recorded in 2003 included additional costs associated with the consoli- dation of production facilities in Canada, net of a gain on the sale of a manufacturing facility, severance and other costs related to the consolidation of industrial manufacturing in the U.K. and the realignment of the Company’s consumer sales operations in Australia. During 2003, total cash expenditures in connection with the plan were $4.7 million.  During the year ended November 30, 2004, the Company recorded special charges related to continuing operations of $6.2 million ($4.3 million after-tax). The costs recorded in 2004 primarily include costs related to the consolidation of industrial manufacturing facilities in the U.K. and Canada, the reorganization of a consumer joint venture and additional severance costs for position eliminations. During 2004, total cash expenditures in connection with the plan were $4.7 million. Also included in special charges/(credits) is a net gain of $8.7 million ($5.5 million after-tax) related to funds received Effective December 1, 2001, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which estab- lished financial accounting and reporting for acquired goodwill and other intangible assets. Under SFAS No. 142, goodwill and indefinite-lived intangible assets are no longer amortized but are reviewed at least annually for impairment. Separable intangible assets that have finite useful lives continue to be amortized over their useful lives. 5. GOODWILL AND INTANGIBLE ASSETS Severance  and personnel Asset Other  (millions) costs write-downs exit costs Total 2001 Special charges  $ 5.8 $ 1.6 $ 3.8 $ 11.2 Amounts utilized  – (1.6) – (1.6) $ 5.8 $ .– $ 3.8 $ 9.6 2002 Special charges  $ 3.3 $ 3.3 $ .9 $ 7.5 Amounts utilized  (4.9) (3.3) .(3.0) (11.2) $ 4.2 $ .– $ 1.7 $ 5.9 2003 Special charges  $ 4.7 $ (.6) $ 1.4 $ 5.5 Amounts utilized  (4.2) .6 (3.0) (6.6) $ 4.7 $ – $ .1 $ 4.8 2004 Special charges  $ 2.2 $ .8 $ 3.2 $ 6.2 Amounts utilized  (2.9) (.8) (2.9) (6.6) $ 4.0 $ – $ .4 $ 4.4 45