UNITED STATES.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended NOVEMBER 30, 2000 Commission file number 0-748
----------------- -----
McCORMICK & COMPANY, INCORPORATED
Maryland 52-0408290
(State of incorporation) (IRS Employer Identification No.)
18 Loveton Circle
Sparks, Maryland 21152
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 771-7301
Securities registered pursuant to Section 12(b) of the Act: Not applicable
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE COMMON STOCK NON-VOTING, NO PAR VALUE
-------------------------- ---------------------------------------
(Title of Class) (Title of Class)
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 / /
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. / /
The aggregate market value of the voting stock held by non-affiliates of the
registrant at January 31, 2001.... ..$ 202,142,762
The aggregate market value of the non-voting stock held by non-affiliates of the
registrant at January 31, 2001 ....... $2,186,244,219
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
CLASS NUMBER OF SHARES OUTSTANDING DATE
Common Stock 8,175,191 January 31, 2001
Common Stock Non-Voting 60,338,346 January 31, 2001
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT PART OF 10-K INTO WHICH
INCORPORATED
Registrant's 2000 Annual Report to Stockholders ............................. Part I, Part II, Part IV
Registrant's Proxy Statement dated February 15, 2001........................... Part III
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
Commission File Number 0-748
For the fiscal year ended November 30, 2000
THE McCORMICK PROFIT SHARING PLAN
McCORMICK & COMPANY, INCORPORATED
18 Loveton Circle
Sparks, Maryland 21152
Items 1 through 3: Not required; see Item 4, below.
Item 4. Financial Statements and Exhibits.
a) i) Report of Independent Auditors ......................................... 1
ii) Statements of Financial Condition .................................. 2
iii) Statements of Changes in Plan Equity ............................... 3
iv) Notes to Financial Statements ...................................... 4
b) Exhibits: Independent Auditors' Consent Letter as to Incorporation
of their Report on the Plan's Financial Statements.
SIGNATURES
The Plan pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
THE McCORMICK PROFIT SHARING PLAN
DATE: 5/15/01 By: /s/ Karen D. Weatherholtz
Karen D. Weatherholtz
Senior Vice President - Human Relations
and Plan Administrator
The McCormick Profit Sharing Plan
Audited Financial Statements and Supplemental Schedules
Years ended November 30, 2000 and 1999
with Report of Independent Auditors
The McCormick Profit Sharing Plan
Audited Financial Statements and Supplemental Schedule
Years ended November 30, 2000 and 1999
CONTENTS
Report of Independent Auditors...........................................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits..........................................................2
Statements of Changes in Net Assets Available for Benefits...............................................3
Notes to Financial Statements............................................................................4
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes...................................12
Report of Independent Auditors
To the Investment Committee
McCormick & Company, Incorporated
We have audited the accompanying statements of net assets available for benefits
of the McCormick Profit Sharing Plan as of November 30, 2000 and 1999, and the
related statements of changes in net assets available for benefits for each of
the three years in the period ended November 30, 2000. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
November 30, 2000 and 1999, and the changes in its net assets available for
benefits for each of the three years in the period ended November 30, 2000, in
conformity with accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes as of November 30, 2000 is presented for purposes
of additional analysis and is not a required part of the financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
April 27, 2001
1
The McCormick Profit Sharing Plan
Statement of Net Assets Available for Benefits
NOVEMBER 30
2000 1999
----------------------------------------
ASSETS
Investments:
Securities - at fair value:
McCormick & Company, Incorporated - Common stock $ 83,121,183 $ 78,507,473
Unaffiliated issuers:
Temporary investments 14,993,343 938,541
Mutual funds 154,161,364 170,474,671
Participant loans 4,959,463 4,536,238
----------------------------------------
Total investments 257,235,353 254,456,923
Receivables:
Accrued interest and dividends 493,293 103,055
Employer contributions 3,511,641 3,748,797
Due from funds for securities sold, net 1,412,953 374,401
----------------------------------------
Total receivables 5,417,887 4,226,253
Cash - 288
----------------------------------------
262,653,240 258,683,464
LIABILITIES
Cash overdrafts 68,841 779
----------------------------------------
Net assets available for benefits $ 262,584,399 $ 258,682,685
========================================
SEE ACCOMPANYING NOTES.
2
The McCormick Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
YEAR ENDED NOVEMBER 30
2000 1999 1998
-----------------------------------------------------------
ADDITIONS
Employer contributions:
Employer match $ 2,158,982 $ 2,010,032 $ 1,905,995
Profit sharing 3,641,241 3,988,314 2,222,281
Employee contributions 12,744,063 11,841,578 10,495,721
Earnings from investments:
Dividends:
McCormick & Company, Incorporated 1,878,488 1,675,773 1,589,823
Mutual funds 11,682,609 10,493,875 8,012,978
Interest income 1,205,816 440,129 509,848
Other, net 261,039 (63,109) 143,917
-----------------------------------------------------------
33,572,238 30,386,592 24,880,563
DEDUCTIONS
Participant withdrawals 21,142,972 14,370,337 14,258,480
Administrative expenses 329,286 265,790 294,609
-----------------------------------------------------------
21,472,258 14,636,127 14,553,089
Net realized gain on investments 10,553,580 13,340,091 8,047,602
Net unrealized (depreciation) appreciation of
investments (18,751,846) (3,851,017) 22,625,690
-----------------------------------------------------------
Net increase 3,901,714 25,239,539 41,000,766
Net assets available for benefits at beginning
of year 258,682,685 233,443,146 192,442,380
-----------------------------------------------------------
Net assets available for benefits at end
of year $ 262,584,399 $ 258,682,685 $233,443,146
===========================================================
SEE ACCOMPANYING NOTES.
3
The McCormick Profit Sharing Plan
Notes to Financial Statements
November 30, 2000
1. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of The McCormick Profit Sharing Plan (the "Plan") are
prepared on the accrual basis of accounting.
VALUATION OF SECURITIES
Investments are stated at aggregate fair value. Securities traded on a national
securities exchange or included on the NASDAQ National Market List are valued at
the last reported sales price on the last business day of the plan year.
Investments for which no sale was reported on that date are valued at the last
reported bid price.
The change in the difference between fair value and the cost of investments is
reflected in the statement of changes in net asset available for benefits as net
unrealized appreciation or depreciation of investments.
The net realized gain or loss on disposal of investments is the difference
between the proceeds received and the average cost of investments sold. Expenses
relating to the purchase or sale of investments are added to the cost or
deducted from the proceeds.
ADMINISTRATIVE EXPENSES
McCormick & Company, Incorporated (the "Company") has deducted $129,600,
$239,517 and $267,265 in 2000, 1999 and 1998, respectively, from the cash
deposit of its contributions to the Plan to offset a portion of the
administrative costs incurred on behalf of the Plan. These expenses are included
in administrative expenses in the statement of changes in net assets available
for benefits. Direct expenses are paid by the Plan.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires Plan management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual amounts could differ from these
estimates.
4
The McCormick Profit Sharing Plan
Notes to Financial Statements (continued)
1. SIGNIFICANT ACCOUNTING POLICIES
ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
During the year ended November 30, 2000, the Plan adopted the provisions of
AICPA Statement of Position 99-3 "Accounting for and Reporting of Certain
Defined Contribution Benefit Plan Investments and Other Disclosure Matters" (the
"Statement"). The Statement eliminates the requirement for the Plan to disclose
net assets available for benefits and changes in net assets available for
benefits by individual fund. There was no impact on net assets available for
benefits as a result of the adoption of the Statement.
2. DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information. Further
information about the Plan agreement, eligible employees, the vesting provisions
and investment alternatives are contained in the Summary Plan Description and in
Registration Statement No. 33-33724 on Form S-8 filed with the Securities and
Exchange Commission on March 2 1990. Copies of these documents are available
from McCormick Corporate Human Relations.
The Plan is a defined contribution plan sponsored by McCormick & Company,
Incorporated which incorporates a 401(k) savings and investment option.
Participating employees can make elective pretax contributions to the Plan
through regular payroll deductions. If an employee authorizes elective
contributions, the contributions may not be less than 1% of his or her taxable
cash compensation and may be up to a maximum of 15%. The Company and
participating subsidiaries will make a matching contribution at a rate of $.20
for each $1.00 of the participant's elective contributions to the Plan
regardless of the participant's investment election. The matching contribution
is not made on elective contributions in excess of 10% of compensation.
The Plan also contains a "Profit Sharing Feature" whereby the Company and
participating subsidiaries may also make additional contributions to the Plan
for amounts authorized by the Board of Directors. Company profit sharing
contributions are allocated to each participant's account based upon the
participant's compensation and length of service.
5
The McCormick Profit Sharing Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Participants are immediately vested in their contributions and related earnings.
Participants are also immediately vested in the Company contribution portion and
related earnings of their accounts once these amounts have been deposited into
their accounts. Company contributions cannot be withdrawn under the in-service
early withdrawal provisions, other than hardship withdrawals, until three years
after the contributions are approved by the Board of Directors.
Effective March 23, 2000, the T. Rowe Price Prime Reserve Fund, the Bond Fund of
America, and the T. Rowe Price Small Cap Value Fund were liquidated and
transferred into the T. Rowe Price Summit Fund, the Fidelity U.S. Bond Index
Fund, and the TCW Small Cap Growth Fund, respectively. In addition, the Vanguard
S&P 500 Index Fund was added as an investment option.
The following is a detailed description of the investment funds available to
participants as of November 30, 2000:
McCORMICK STOCK FUND - This fund invests principally in the common
stock of McCormick & Company, Inc., the Plan sponsor.
BALANCED FUND - The balanced fund seeks conservation of capital,
current income and long-term growth of capital and income by investing
in stocks, bonds, and other fixed-income securities. This fund invests
principally in the American Balanced Fund.
SMALL CAP GROWTH FUND - This Fund seeks long-term capital appreciation.
To pursue this goal, it invests at least 65% of the value of its total
assets in equity securities issued by companies with market
capitalizations, at the time of acquisition, within the capitalization
range of the companies comprising the Standard & Poor's Small Cap 600
Index. This fund invests principally in the TCW Galileo Small Cap
Growth Fund.
INTERNATIONAL GROWTH FUND - This international fund seeks long-term
growth of capital by investing in companies based outside the United
States. This fund invests principally in the American Europacific
Growth Fund.
6
The McCormick Profit Sharing Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
THE U.S. BOND INDEX FUND - The bond fund seeks to provide as high a
level of current income as is consistent with preservation of capital.
This fund invests primarily in the Fidelity U.S. Bond Index Fund.
GROWTH & INCOME PORTFOLIO FUND - This growth and income fund seeks high
total return through a combination of current income and capital
appreciation. The fund invests mainly in securities of companies that
pay current dividends and offer potential growth of earnings. However,
the fund may buy securities that are not currently paying dividends but
offer prospects for either capital appreciation or future income.
Securities may be of foreign and domestic issuers. The fund diversifies
investments among a variety of industries. The principal investment is
in the Fidelity Growth & Income Portfolio Fund.
LONG-TERM CAPITAL APPRECIATION FUND - This long-term capital
appreciation fund seeks capital appreciation by making a profit on
invested capital over the long term. The fund invests in common stocks,
and securities convertible to common stock, issued by companies
operating in the U.S. and/or abroad. Investments are made in large
corporations as well as smaller, lesser-known companies. The fund also
diversifies investments among a variety of industries and sectors
within the market. This fund invests principally in the Fidelity
Magellan Fund.
MONEY MARKET FUND - As a money market fund, this fund is managed to
maintain a stable $1 share price (although it is not guaranteed). The
value of the fund's shares is neither insured nor guaranteed by the
U.S. Government. This fund invests principally in the T. Rowe Price
Summit Fund.
S&P 500 INDEX FUND - This fund holds all of the 500 stocks that make
up the unmanaged Standard & Poor's 500 Composite Stock Price Index,
in proportion to their weighting in the index. The fund attempts to
match the performance of the index and remains fully invested in
stocks at all times. This fund seeks long-term growth of capital and
income from dividends and invests principally in the Vanguard S&P Index
Fund.
Participants' elective contributions and the Company's Profit Sharing
contributions are invested in the Plan's investment funds as directed by the
participant.
In general, participant withdrawals are subject to a 10% excise tax for early
withdrawals prior to the participant reaching retirement.
7
The McCormick Profit Sharing Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Participants are permitted to take loans against their contributions to the
Plan, subject to $500 minimum. The maximum of any loan cannot exceed one-half of
the participant's contributed account balance or $50,000 less the highest
outstanding unpaid loan balance during the prior twelve months, whichever is
less. The Company's Investment Committee determines the interest rate for loans
based on current market rates. Loan repayments, interest, plus maintenance fees
are made by participants through payroll deductions over loan terms of up to
five years. Longer loan terms are available for loans taken to purchase,
construct, re-construct or substantially rehabilitate a primary home for the
participant or the participant's immediate family.
The Company intends to continue the Plan indefinitely. The Company reserves the
right to terminate the Plan, or to reduce or cease contributions at any time, if
its Board of Directors determines that business, financial or other good causes
make it necessary to do so, or to amend the Plan at any time and in any respect
provided, however, that any such action will not deprive any participant or
beneficiary under the Plan of any vested right.
3. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated March 12, 1996, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code and, therefore, the related trust is exempt from
taxation. Subsequent to this issuance of the determination letter, the Plan was
amended. Once qualified, the Plan is required to operate in conformity with the
Code to maintain its qualification. The Plan Administrator believes the Plan is
being operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan, as amended, is qualified and the related
trust is tax exempt.
8
The McCormick Profit Sharing Plan
Notes to Financial Statements (continued)
4. INVESTMENTS
During 2000, 1999, and 1998, the Plan's investments (including investments
bought, sold, or held throughout the year) appreciated (depreciated) in fair
value by ($8,198,266), $9,489,074 and $30,673,292, respectively, as follows:
YEAR ENDED NOVEMBER 30
2000 1999 1998
----------------------------------------------------------
NET APPRECIATION NET APPRECIATION NET
(DEPRECIATION) IN (DEPRECIATION) IN APPRECIATION
FAIR VALUE FAIR VALUE IN FAIR VALUE
DURING YEAR DURING YEAR DURING YEAR
----------------------------------------------------------
McCormick & Company, Incorporated
- common stock $ 11,758,929 $ (3,680,122) $ 18,170,293
Unaffiliated issuers:
Temporary investments - - -
Mutual funds (19,957,195) 13,169,196 12,502,999
Participant loans - - -
----------------------------------------------------------
Total $ (8,198,266) $ 9,489,074 $ 30,673,292
==========================================================
The Plan's interest and dividend income for the years ended November 30, 2000,
1999, and 1998 was $14,766,913, $12,609,777, and $10,112,649, respectively.
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
NOVEMBER 30
2000 1999
------------------------------------
McCormick & Company, Incorporated - common stock $ 83,121,183 $ 78,507,473
Fidelity Investments Mutual Funds:
Growth & Income Portfolio Fund 55,646,599 61,236,920
Long-Term Capital Appreciation Fund (Magellan Fund) 64,958,919 69,601,294
T. Rowe Price Summit Cash Reserves Fund 14,993,343 -
9
The McCormick Profit Sharing Plan
Notes to Financial Statements (continued)
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Fees paid during the year for legal, accounting and other services rendered by
parties-in-interest were based on customary and reasonable rates for such
services.
6. RECONCILIATION OF FORM 5500 TO AUDITED FINANCIAL STATEMENTS
The following represents a summary of the differences between the Form 5500 for
the year ended November 30, 2000, and the accompanying financial statements:
AMOUNT PER
ACCOMPANYING
FORM 5500 AMOUNT PER FINANCIAL
LINE NUMBER DESCRIPTION FORM 5500 STATEMENTS DIFFERENCE
----------------------------------------------------------------------------------------------------------
32b (1)(A) Interest - interest bearing cash $ 64,185 $ 1,205,816 $ (1,141,631)
32b (1)(E) Interest - Participant loans 408,273 - 408,273
32b (2) (B) Dividends - Common Stock 1,004,731 1,878,488 (873,757)
N/A Dividends - mutual funds - 11,682,609 (11,682,609)
32b (4)(C) Net gain on sale of assets 616,760 10,553,580 (9,936,820)
32b (5) Unrealized appreciation 11,142,170 (18,751,846) 29,894,016
32b (10) Registered investment companies (7,997,517) - (7,997,517)
32c Other income 1,284,281 261,039 1,023,242
32l (1) Transfers to this plan 112,423,132 - 112,423,132
32l (2) Transfers from this plan (112,116,329) - (112,116,329)
------------------------------------------------------
$ 6,829,686 $ 6,829,686 $ -
======================================================
The differences result from the classification of investments, and the basis for
determining cost, as required for financial statement purposes (historical cost)
differing from the classification required in the Form 5500 (market value at the
beginning of the Plan year).
10
The McCormick Profit Sharing Plan
Notes to Financial Statements (continued)
7. SUBSEQUENT EVENTS
Effective December 1, 2000, the Plan was amended to eliminate the "Profit
Sharing Feature." Contemporaneously, the Company match was enhanced such that
the Company will match 100% of a participant's contribution up to the first 3%
of the participant's salary, and 50% of the next 2% of a participant's salary.
In conjunction with these amendments, the plan was also renamed the McCormick
401(k) Retirement Plan.
11
Supplemental Schedule
The McCormick Profit Sharing Plan
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
November 30, 2000
SHARES COST MARKET
HELD VALUE VALUE
------------------------------------------------------
Temporary investments:
T. Rowe Price Summit Cash Reserves 14,993,343 $ 14,993,343 $ 14,993,343
McCormick & Company, Incorporated:
Common stock* 2,231,441 38,643,084 83,121,183
Mutual Funds Investments:
Fidelity US Bond Index Fund 777,309 7,959,413 8,138,430
Fidelity Growth & Income Portfolio Fund 1,304,115 45,814,743 55,646,599
American Balanced Fund 300,955 4,583,484 4,613,645
American EuroPacific International Fund 299,771 11,077,388 9,382,835
Vanguard S&P 500 Index Fund 33,027 4,408,743 4,016,810
TCW Galileo Small Cap Growth Fund 280,035 13,388,432 7,404,126
Fidelity Long-Term Capital Appreciation Fund
(Magellan Fund) 540,154 54,778,986 64,958,919
Participant loans (average interest
rate of 9%)* - 4,959,463
--------------------------------------
$ 195,647,616 $257,235,353
======================================
* Indicates parties-in-interest to the Plan
12