MCCORMICK & COMPANY 2004 ANNUAL REPORT management’s discussion and analysis Forward-Looking Information Income Taxes Pension and Postretirement Benefits conditions could negatively affect the reporting unit’s brand name assets’ fair value and result in an impairment charge. The Company cannot predict the occurrence of events that might adversely affect the reported value of goodwill and brand name assets that totaled $819.3 million at November 30, 2004. However, the current fair values of the Company’s reporting units and brand name are signifi- cantly in excess of carrying values, and accordingly man- agement believes that only significant changes in the cash flow assumptions would result in impairment. The Company files income tax returns and estimates income taxes in each of the taxing jurisdictions in which it operates. The Company is subject to tax audits in each of these jurisdictions, which could result in changes to the estimated taxes. The amount of these changes would  vary by jurisdiction and would be recorded when known. Management has recorded valuation allowances to reduce its deferred tax assets to the amount that is more likely than not to be realized. In doing so, management has con- sidered future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. Pension and other postretirement plans’ costs require the use of assumptions for discount rates, investment returns, projected salary increases, mortality rates, and health care cost trend rates. The actuarial assumptions used in the Company’s pension and postretirement benefit reporting are reviewed annually and compared with external benchmarks to ensure that they appropriately account for the Company’s future pension and postretirement benefit obligations. While the Company believes that the assumptions used are appro- priate, differences between assumed and actual experience may affect the Company’s operating results. A 1% change in the actuarial assumption for discount rate would impact pension and postretirement benefit expense by approxi- mately $12 million. A 1% change in the expected return on plan assets would impact pension expense by approxi- mately $4 million. In addition, see the preceding sections of the MD&A and notes 9 and 10 of notes to consolidated financial statements for a discussion of these assumptions and the effects on the financial statements.  Certain information contained in this report includes “for- ward-looking statements” within the meaning of section 21(E) of the Securities Exchange Act. The Company intends the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in this section. All statements regarding the Company’s expected financial plans, future capital requirements, fore- casted, demographic and economic trends relating to its industry, ability to complete internal restructuring programs and to realize anticipated cost savings from such programs, ability to complete acquisitions, to realize anticipated cost savings and other benefits from acquisitions, to recover acquisition-related costs, and similar matters are forward- looking statements. In some cases, these statements can be identified by the Company’s use of forward-looking words such as “may,” “will,” “should,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “predict,” “potential,” or “intend.” The forward-looking information is based on various factors and was derived using numerous assumptions. However, these statements only reflect the Company’s predictions. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the Company’s actual results to differ materially from the statements. Important factors that could cause the Company’s actual results to be materially different from its expectations include actions of competi- tors, customer relationships, market acceptance of new products, actual amounts and timing of special charge items, removal and disposal costs, final negotiations of third-party contracts, the impact of stock market conditions on its share repurchase program, fluctuations in the cost and availability of supply chain resources, global economic conditions, including interest and currency rate fluctua- tions, and inflation rates. The Company undertakes no obli- gation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. 34