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
For the fiscal year ended November 30, 2016
Commission File Number 001-14920
THE McCORMICK 401(K) RETIREMENT PLAN
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Full title of plans
McCORMICK & COMPANY, INCORPORATED
18 Loveton Circle
Sparks, Maryland 21152
Name of issuer of the securities held pursuant to the plan
and address of its principal office
Required Information
Items 1 through 3: Not required; see Item 4 below.
Item 4. Plan Financial Statements and Schedules.
a) | i) | Report of Registered Public Accounting Firm |
ii) | Statements of Net Assets Available For Benefits | |
iii) | Statements of Changes in Net Assets Available For Benefits | |
iv) | Notes to Financial Statements | |
b) | Exhibits: Consent of Independent Registered Public Accounting Firm. | |
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 401(K) RETIREMENT PLAN
DATE: | May 30, 2017 | By: | /s/ Lisa B. Manzone |
Lisa B. Manzone | |||
Senior Vice President - Human Relations and Plan Administrator | |||
THE MCCORMICK 401(K) RETIREMENT PLAN
Financial Statements and Supplemental Schedule Together with
Report of Independent Registered Public Accounting Firm
As of November 30, 2016 and 2015
NOVEMBER 30, 2016 AND 2015
CONTENTS
1 | |
FINANCIAL STATEMENTS | |
2 | |
3 | |
4 | |
13 | |
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Investment Committee
McCormick & Company, Incorporated
We have audited the accompanying statements of net assets available for benefits of The McCormick 401(k) Retirement Plan (the Plan) as of November 30, 2016 and 2015, and the related statement of changes in net assets available for benefits for the year ended November 30, 2016. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 as of November 30, 2016 and 2015, and the changes in net assets available for benefits for the year ended November 30, 2016, in conformity with accounting principles generally accepted in the United States of America.
The supplemental information in the accompanying schedules of assets (held at end of year) as of November 30, 2016 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but includes supplemental 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 information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information in the accompanying schedules, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information in the accompanying schedules is fairly stated, in all material respects, in relation to the financial statements as a whole.
Hunt Valley, Maryland
May 25, 2017
200 International Circle ● Suite 5500 ● Hunt Valley ● Maryland 21030 ● P 410-584-0060 ● F 410-584-0061
THE MCCORMICK 401(K) RETIREMENT PLAN
Statements of Net Assets Available for Benefits
As of November 30, 2016 and 2015
2016 | 2015 | ||||||
ASSETS | |||||||
Investments – at fair value, participant-directed: | |||||||
McCormick & Company Incorporated common stock fund | $ | 192,748,942 | $ | 181,699,220 | |||
Equity funds | 229,105,878 | 227,220,495 | |||||
Bond funds | 32,072,213 | 30,316,124 | |||||
Balanced funds | 97,639,092 | 87,848,710 | |||||
Pooled, common and collective fund | 44,152,192 | 43,258,485 | |||||
Total Investments at fair value | 595,718,317 | 570,343,034 | |||||
Receivables: | |||||||
Notes receivable from participants | 8,329,015 | 7,763,785 | |||||
Employee contributions | 747 | — | |||||
Total Receivables | 8,329,762 | 7,763,785 | |||||
Net Assets Available for Benefits | $ | 604,048,079 | $ | 578,106,819 | |||
The accompanying notes are an integral part of these financial statements.
2
THE MCCORMICK 401(K) RETIREMENT PLAN
Statement of Changes in Net Assets Available for Benefits
For the Year Ended November 30, 2016
Additions | |||
Investment income: | |||
Dividends and interest | $ | 4,237,472 | |
Net appreciation of investments | 27,696,810 | ||
Total investment income | 31,934,282 | ||
Interest on notes receivable from participants | 347,080 | ||
Contributions: | |||
Employer contributions | 9,882,582 | ||
Employee contributions | 18,056,902 | ||
Rollover | 1,835,796 | ||
Total contributions | 29,775,280 | ||
Total Additions | 62,056,642 | ||
Deductions | |||
Participant withdrawals | 35,727,077 | ||
Administrative expenses | 388,305 | ||
Total Deductions | 36,115,382 | ||
Net increase | 25,941,260 | ||
Net assets available for benefits, beginning of year | 578,106,819 | ||
Net Assets Available for Benefits, End of Year | $ | 604,048,079 | |
The accompanying notes are an integral part of these financial statements.
3
THE MCCORMICK 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
1. | DESCRIPTION OF THE PLAN |
General
The McCormick 401(k) Retirement Plan (the Plan) is a defined contribution plan sponsored by McCormick & Company, Incorporated (the Company or the Plan Sponsor), which incorporates a 401(k) savings and investment option.
Effective March 22, 2002, the Plan was amended to provide that the McCormick & Company, Incorporated Common Stock Fund investment option be designated as an employee stock ownership plan (ESOP). This designation allows participants investing in McCormick & Company, Incorporated common stock to elect to receive, in cash, dividends that are paid on McCormick & Company, Incorporated common stock held in their 401(k) Retirement Plan accounts. Dividends may also continue to be reinvested. The McCormick & Company, Incorporated Common Stock Fund invests principally in common stock of the Plan Sponsor. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
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 Plan Document.
Contributions
Participating employees contribute to the Plan through payroll deductions in amounts ranging from 1% to 70% of their earnings, subject to certain limitations. Effective December 1, 2000, the Company and participating subsidiaries provide a matching contribution of 100% of the first 3% of an employee’s contribution, and 50% on the next 2% of the employee’s contribution. Employees hired prior to January 1, 2012, were required to have one year of service with the Company to be eligible for the matching contribution. Employees hired after December 31, 2011 are immediately eligible for the match. For new hires after December 31, 2011, McCormick makes an annual profit sharing contribution of 3% of eligible earnings to participants’ accounts (in addition to company match, which is applied as employee contributions are deposited). Employees are automatically enrolled in the 401(k) plan at 2%; however, they can opt out or elect to change the percentage at any time. If the employee does not make a positive election to change the percentage, the contribution rate is increased by 1% per year (up to maximum of 10% or IRS contribution limit).
Participants' elective contributions, as well as the Company's matching contributions, are invested in the Plan's investment funds as directed by the participant. In the absence of direction from the participant, the account is invested in an age-appropriate target date fund.
4
THE MCCORMICK 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
1. | DESCRIPTION OF THE PLAN (continued) |
Participant Accounts
Each participant’s account is credited with the participant’s contribution, the employer’s contribution made on his or her behalf, plus a proportionate interest in the investment earnings of the funds in which the contributions are invested. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account balance.
Vesting
Participants are immediately vested in their contributions, the Company match, and all related earnings. The 3% annual profit sharing contribution vests when employee has 3 years of service or reaches age 55, if sooner.
Notes Receivable from Participants
Participants are permitted to take loans from their account balances, subject to a $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 loan balance during the prior 12 months, whichever is less. The interest rate applied to the loans is Wells Fargo’s current prime lending rate +1%, or such other rate as is prescribed based on periodic evaluations by the Company. Current participant loans bear interest at rates ranging from 4.25% to 9.75% and are secured by the participant’s account.
Loan repayments, including interest, 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, reconstruct, or substantially rehabilitate a primary home for the participant or the participant's immediate family.
Benefit Payments
Participants may choose to receive account distributions either in the form of a lump sum payment or installments over a period of time as defined in the Plan Document. Benefits and withdrawals are recorded when paid.
Upon termination of service, a participant with an account balance greater than $5,000, may elect to leave his or her account balance invested in the Plan, elect to rollover his or her entire balance to an Individual Retirement Account (IRA) or another qualified plan, elect to receive a lump-sum payment equal to his or her entire balance or elect annual installments to extend from two to eight years. Upon termination of service, a participant with an account balance less than $5,000, may elect to rollover his or her entire balance to an IRA or another qualified plan or elect to receive a lump-sum payment equal to his or her entire balance. In the absence of instruction from a participant, balances less than $1,000 automatically will be paid directly to the participant and those greater than $1,000 will be rolled over to an IRA designated by the Plan Administrator.
Plan Termination
The Company has no intentions to terminate the Plan; however, 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. Also, the Company may 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 benefits.
5
THE MCCORMICK 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Accounting
The accompanying financial statements of the Plan are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of year-end and the changes therein and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Valuation of Securities and Income Recognition
Investments are stated at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3 for discussion of fair value measurements.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on ex-dividend date.
Securities traded on a national securities exchange 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. Common and collective funds are valued by the issuer of the funds based on the fund managers’ estimate of the individual closing price of the funds on the last day of the Plan year as quoted by the applicable fund issuer. Mutual funds are valued at the closing price of the funds on the last day of the Plan year as quoted by the applicable fund issuer.
Net appreciation (depreciation) in fair value of investments included in the accompanying statement of changes in net assets available for benefits includes realized gains or losses from the sale of investments and unrealized appreciation or depreciation in the fair value of investments. Expenses relating to the purchase or sale of investments are added to the cost or deducted from the proceeds.
The McCormick & Company Incorporated common stock fund (the Fund) is tracked on a unitized basis. The Fund consists of McCormick & Company, Incorporated common stock (voting and non-voting) and funds held in the Wells Fargo Short-Term Investment Money Market Fund sufficient to meet the Fund’s daily cash needs, and the Unitizing Fund allows for daily trades. The value of a unit reflects the combined market value of McCormick & Company, Incorporated common stock and the cash investments held by the Fund. As of November 30, 2016, 5,258,266 units were outstanding with a value of approximately $36.66 per unit. As of November 30, 2015, 5,025,963 units were outstanding with a value of approximately $36.15 per unit. As of November 30, 2016, the Fund held 2,048,403 shares of McCormick & Company, Incorporated common stock with an aggregate value of $189,539,079, and a balance in the Wells Fargo Short-Term Investment Money Market Fund of $3,209,863. As of November 30, 2015, the Fund held 2,092,699, shares of McCormick & Company, Incorporated common stock with an aggregate value of $178,765,956, and a balance in the Wells Fargo Short-Term Investment Money Market Fund of $2,933,264.
6
THE MCCORMICK 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Notes Receivable from Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent notes receivable from participants are reclassified as distributions based upon the terms of the Plan Document; thus, no allowance for doubtful accounts has been recorded as of November 30, 2016 and 2015.
Contributions
Employee and employer contributions are recorded in the period that the Plan Sponsor makes payroll deductions from the participant’s earnings. The post-2011 profit sharing contributions are typically funded after the Plan year-end, within the timeframe prescribed by the Internal Revenue Service.
Administrative Expenses
A fee of 7.5 basis points is deducted from each participant’s account for the administrative expenses incurred on behalf of the Plan. Fees for loan initiation and maintenance and for Domestic Relations Order review and processing are paid by the requesting participant. Management and other fees for investment funds offered under the Plan are included in administrative expenses in the accompanying statement of changes in net assets available for benefits.
Accounting Pronouncements adopted in 2016
In July 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960) Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient). ASU No. 2015-12 has three parts. Part I designates contract value as the only required measure for fully benefit-responsive investment contracts; Part II eliminates the requirement that plans disclose: (a) individual investments that represent 5 percent or more of net assets available for benefits; and (b) the net appreciation or depreciation for investments by general type requirements for both participant-directed investments and nonparticipant-directed investments. Part III provides a practical expedient to permit plans to measure investments and investment-related accounts as of a month-end date that is closest to the plan’s fiscal year-end, when the fiscal period does not coincide with month-end. Parts I and II are effective on a retrospective basis, and Part III is effective on a prospective basis, for fiscal years beginning after December 15, 2015. Early application is permitted. Part III is not applicable to the Plan. Management has elected to adopt Parts I and II, retrospectively. Its effect is not material to the Plan’s financial statements.
In May 2015, the FASB issued Accounting Standards Update ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). ASU No. 2015-07 removes the requirement to include all investments in the fair value hierarchy for which the fair value is measured at net asset value (NAV) per share using the practical expedient, under Fair Value Measurements and Disclosures (Topic 820). ASU No. 2015-07 is effective on a retrospective basis for fiscal years beginning after December 15, 2015. Early adoption is permitted. Management has elected to adopt ASU No. 2015-07. Its impact is not material to the Plan's financial statement.
In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-01, Financial Instruments-Overall (Subtopic 825-10). ASU No. 2016-01 requires equity investments
7
(except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. ASU No. 2016-01 also requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. ASU No. 2016-01 is effective for employee benefit plans for fiscal years beginning after December 15, 2018. Early adoption is permitted. Management has elected to adopt ASU No. 2016-01. Its effect is not material to the Plan’s financial statements.
8
THE MCCORMICK 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
3. | INVESTMENTS |
The Plan’s investments are held in bank-administered trust funds. The custodial trustee of the Plan is Wells Fargo Bank Minnesota N.A. During the year ended November 30, 2016, the Plan’s investments (including investments bought, sold, or held throughout the year) appreciated in value by $27,696,810, as follows:
McCormick & Company, Incorporated common stock | $ | 13,670,813 | |
Pooled, common and collective funds | 736,661 | ||
Mutual funds | 13,289,336 | ||
Total | $ | 27,696,810 | |
Fair Value Measurements
Accounting principles generally accepted in the United States establish a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under accounting principles generally accepted in the United States are described below:
Level 1 | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access. | |
Level 2 | Inputs to the valuation methodology include: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. | |
Level 3 | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. | |
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
9
THE MCCORMICK 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
3. | INVESTMENTS (continued) |
Fair Value Measurements (continued)
The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used as of November 30, 2016 and 2015.
Mutual funds: Valued at the daily closing price as reported by the fund.
Common stocks: Valued at the closing price reported on the active market on which the individual securities are traded.
Pooled, common and collective trusts: Valued at net asset value (NAV) of the underlying investments. The collective trust funds' estimated value is net asset value, exclusive of the adjustment to contract value.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of November 30, 2016 and 2015:
Assets at Fair Value as of November 30, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Mutual funds: | |||||||||||||||
Equity funds | $ | 229,105,878 | $ | — | $ | — | $ | 229,105,878 | |||||||
Bond funds | 32,072,213 | — | — | 32,072,213 | |||||||||||
Balanced funds | 97,639,092 | — | — | 97,639,092 | |||||||||||
McCormick & Company, Incorporated common stock fund | 192,748,942 | — | — | 192,748,942 | |||||||||||
Pooled, common and collective fund (a) | — | — | — | 44,152,192 | |||||||||||
Total Investments at Fair Value | $ | 551,566,125 | $ | — | $ | — | $ | 595,718,317 | |||||||
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THE MCCORMICK 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
3. | INVESTMENTS (continued) |
Fair Value Measurements (continued)
Assets at Fair Value as of November 30,2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Mutual funds: | |||||||||||||||
Equity funds | $ | 227,220,495 | $ | — | $ | — | $ | 227,220,495 | |||||||
Bond funds | 30,316,124 | — | — | 30,316,124 | |||||||||||
Balanced funds | 87,848,710 | — | — | 87,848,710 | |||||||||||
McCormick & Company, Incorporated common stock fund | 181,699,220 | 181,699,220 | |||||||||||||
Pooled, common and collective fund (a) | — | — | — | 43,258,485 | |||||||||||
Total Assets at Fair Value | $ | 527,084,549 | $ | — | $ | — | $ | 570,343,034 | |||||||
(a) In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of fair value hierarchy to the line items presented in the statement of net assets available for benefits.
The following table presents the category, fair value, redemption frequency, and redemption notice period for the plan investments, the fair value of which is estimated using the NAV per share as of November 30, 2016 and 2015, respectively.
Investment | 2016 | 2015 | Redemption Frequency | Redemption Notice Period | ||||
Wells Fargo Stable Return Fund N | $ | 44,152,192 | $ | 43,258,485 | Monthly/Quarterly | None | ||
The Wells Fargo Stable Return Fund N (the “Stable Return Fund”) is a common collective trust that is fully invested in Wells Fargo Stable Return Fund G, which is fully invested in contracts deemed to be fully benefit responsive under accounting principle generally accepted in the United States.
11
THE MCCORMICK 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
4. | TRANSACTIONS WITH RELATED PARTIES |
The Plan holds investments in common stock of McCormick & Company, Incorporated, the Plan Sponsor, and in funds managed by affiliates of Wells Fargo Minnesota N.A., the custodial trustee of the Plan. Dividends on McCormick & Company, Incorporated common stock and income on investments in Wells Fargo Minnesota N.A. funds are at the same rates as non-affiliated holders of these securities.
A portion of the administrative expenses were paid by the Plan Sponsor and reimbursed by the Plan during the years ended November 30, 2016 and 2015. These transactions qualify as party-in-interest transactions, which are exempt from the prohibited transaction rules of ERISA.
5. | INCOME TAX STATUS |
The Internal Revenue Service (“IRS”) has ruled that the Plan qualified under Section 401(a) of the Internal Revenue Code (“IRC”) in a letter, dated September 16, 2013, and is therefore not subject to tax under present income tax laws. The Plan has been amended since receiving the determination letter; however, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.
Accounting principles generally accepted in the United States require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the organization has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan administrator has concluded that as of November 30, 2016 and 2015, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the financial statements.
The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for years prior to 2013.
6. | RISKS AND UNCERTAINTIES |
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term, and that such changes could materially affect participants’ account balances and the amounts reported in the accompanying statements of net assets available for benefits.
12
SUPPLEMENTAL SCHEDULE
THE MCCORMICK 401(K) RETIREMENT PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
As of November 30, 2016
Description of Investments | Shares Held | Current Value | |||
McCormick & Company Incorporated common stock fund | |||||
McCormick & Company, Incorporated | |||||
* Common Stock | 2,048,403 | $ | 189,539,079 | ||
Money Market Fund | |||||
* Wells Fargo Short-Term Investment Money Market Fund | 3,209,863 | 3,209,863 | |||
Total McCormick & Company Incorporated common stock fund | 192,748,942 | ||||
Common and Collective Funds | |||||
* Wells Fargo Stable Return Fund N | 829,804 | 44,152,192 | |||
Mutual Funds | |||||
AMG TimesSquare Small Cap Growth Fund | 1,135,258 | 18,629,589 | |||
Dodge & Cox International Stock Fund | 463,204 | 17,856,506 | |||
Delaware Small Cap Value Fund | 303,735 | 18,625,029 | |||
T Rowe Price Growth Stock Fund | 427,355 | 23,222,495 | |||
Vanguard Institutional Index Fund | 466,150 | 94,013,208 | |||
Vanguard Mid Cap Index Fund | 538,475 | 19,347,390 | |||
Vanguard Small Cap Index Institutional Fund | 211,728 | 12,911,194 | |||
Vanguard Total International Stock Index Fund | 66,958 | 6,519,711 | |||
Vanguard Windsor II Fund Admiral Shares | 274,055 | 17,980,756 | |||
Dodge & Cox Income Fund | 780,677 | 10,625,010 | |||
Pimco Global Bond Unhedged | 181,092 | 1,624,397 | |||
Vanguard Total Bond Market Index Fund | 1,861,296 | 19,822,806 | |||
Vanguard Target Retirement Fund | 489,464 | 6,284,718 | |||
Vanguard Target Retirement Fund 2015 | 701,076 | 10,481,090 | |||
Vanguard Target Retirement Fund 2020 | 184,305 | 5,285,879 | |||
Vanguard Target Retirement Fund 2025 | 1,707,539 | 28,276,840 | |||
Vanguard Target Retirement Fund 2030 | 153,566 | 4,524,061 | |||
Vanguard Target Retirement Fund 2035 | 1,164,910 | 20,898,485 | |||
Vanguard Target Retirement Fund 2040 | 99,012 | 3,009,976 | |||
Vanguard Target Retirement Fund 2045 | 747,488 | 14,217,219 | |||
Vanguard Target Retirement Fund 2050 | 121,156 | 3,691,630 | |||
Vanguard Target Retirement Fund 2055 | 24,577 | 810,314 | |||
Vanguard Target Retirement Fund 2060 | 5,462 | 158,880 | |||
Total Mutual Funds | 358,817,183 | ||||
Participant Loans ** | |||||
* Notes receivable from participants | 8,329,015 | ||||
Total Investments | $ | 604,047,332 | |||
* | Party-in-interest as defined by ERISA. |
** | Interest rates at 4.25% to 9.75%; maturity dates range from 2016 to 2036. |
Note: Historical cost has been omitted as all investments are participant directed.
13
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements pertaining to the McCormick 401(k) Retirement Plan and Mojave Foods Corporation 401(k) Retirement Plan of McCormick & Company, Inc. of our report dated May 25, 2017, with respect to the financial statements and supplemental schedule of the McCormick 401(k) Retirement Plan included in this Annual Report (Form 11-K) for the year ended November 30, 2016, our report dated May 25, 2017, with respect to the financial statements and supplemental schedule of the Mojave Foods Corporation 401(k) Retirement Plan included in this Annual Report (Form 11-K) for the year ended November 30, 2016.
Form | Registration Number | Date Filed | |
S-8 | 333-187703 | 4/3/2013 | |
S-8 | 333-186250 | 1/28/2013 | |
S-8 | 333-158573 | 4/14/2009 | |
S-8 | 333-155775 | 11/28/2008 | |
S-8 | 333-150043 | 4/2/2008 | |
S-3 | 333-147809 | 12/4/2007 | |
S-8 | 333-142020 | 4/11/2007 | |
S-3 | 333-122366 | 1/28/2005 | |
S-8 | 333-114094 | 3/31/2004 | |
S-8 | 333-57590 | 3/26/2001 | |
S-8 | 333-93231 | 12/21/1999 | |
S-8 | 333-74963 | 3/24/1999 | |
S-3 | 333-47611 | 3/9/1998 | |
S-8 | 333-23727 | 3/21/1997 | |
/s/ SB & Company LLC
May 25, 2017
Hunt Valley, Maryland
200 International Circle ● Suite 5500 ● Hunt Valley ● Maryland 21030 ● P 410-584-0060 ● F 410-584-0061
Required Information
Items 1 through 3: Not required; see Item 4 below.
Item 4. Plan Financial Statements and Schedules.
a) | i) | Report of Registered Public Accounting Firm |
v) | Statements of Net Assets Available For Benefits | |
vi) | Statements of Changes in Net Assets Available For Benefits | |
vii) | Notes to Financial Statements | |
b) | Exhibits: Consent of Independent Registered Public Accounting Firm. | |
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 MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
DATE: | May 30, 2017 | By: | /s/ David Wright |
David Wright | |||
Director of Finance – Mojave Foods Corporation and Plan Administrator | |||
THE MOJAVE FOODS CORPORATION
401(K) RETIREMENT PLAN
Financial Statements and Supplemental Schedule Together with
Report of Independent Registered Public Accounting Firm
As of November 30, 2016 and 2015
NOVEMBER 30, 2016 AND 2015
CONTENTS
1 | |
FINANCIAL STATEMENTS | |
2 | |
3 | |
4 | |
13 | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Investment Committee
McCormick & Company, Incorporated
(on behalf of The Mojave Foods Corporation 401(k) Retirement Plan)
We have audited the accompanying statements of net assets available for benefits of The Mojave Foods Corporation 401(k) Retirement Plan (the Plan) as of November 30, 2016 and 2015, and the related statement of changes in net assets available for benefits for the year ended November 30, 2016. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 as of November 30, 2016 and 2015, and the changes in net assets available for benefits for the year ended November 30, 2016, in conformity with accounting principles generally accepted in the United States of America.
The supplemental information in the accompanying schedule of assets (held at end of year) as of November 30, 2016 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but includes supplemental 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 information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information in the accompanying schedules, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information in the accompanying schedules is fairly stated, in all material respects, in relation to the financial statements as a whole.
Hunt Valley, Maryland
May 25, 2017
200 International Circle ● Suite 5500 ● Hunt Valley ● Maryland 21030 ● P 410-584-0060 ● F 410-584-0061
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Statements of Net Assets Available for Benefits
As of November 30, 2016 and 2015
2016 | 2015 | ||||||
ASSETS | |||||||
Investments – at fair value, participant directed: | |||||||
McCormick & Company Incorporated common stock fund | 195,535 | 203,887 | |||||
Equity funds | 729,408 | 791,740 | |||||
Bond funds | 335,120 | 331,492 | |||||
Balanced funds | 1,294,795 | 1,312,883 | |||||
Pooled, common and collective fund | 151,370 | 123,232 | |||||
Total Investments | 2,706,228 | 2,763,234 | |||||
Receivables | |||||||
Notes receivable from participants | 204,691 | 173,219 | |||||
Employer contributions | 55,233 | 55,233 | |||||
Total Receivables | 259,924 | 228,452 | |||||
Net Assets Available for Benefits | $ | 2,966,152 | $ | 2,991,686 | |||
The accompanying notes are an integral part of these financial statements.
2
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Statement of Changes in Net Assets Available for Benefits
For the Year Ended November 30, 2016
Additions | |||
Investment income: | |||
Dividends and interest | $ | 17,502 | |
Net appreciation of investments | 85,035 | ||
Total investment income | 102,537 | ||
Interest on notes receivable from participants | 7,333 | ||
Contributions: | |||
Employer contributions | 56,003 | ||
Employee contributions | 365,043 | ||
Rollover contributions | 2,374 | ||
Total contributions | 423,420 | ||
Total Additions | 533,290 | ||
Deductions | |||
Participant withdrawals | 529,486 | ||
Administrative expenses | 29,338 | ||
Total Deductions | 558,824 | ||
Net decrease | (25,534 | ) | |
Net assets available for benefits, beginning of year | 2,991,686 | ||
Net Assets Available for Benefits, End of Year | $ | 2,966,152 | |
The accompanying notes are an integral part of these financial statements.
3
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
1. | DESCRIPTION OF THE PLAN |
The Mojave Foods Corporation 401(k) Retirement Plan (the Plan) is a defined contribution plan sponsored by the Mojave Foods Corporation (the Company or the Plan Sponsor) which incorporates a 401(k) savings and investment option. The Company is a wholly owned subsidiary of the McCormick & Company, Incorporated. For the plan years ended November 30, 2016 and 2015. the Plan covers substantially all part-time and full-time employees of the Company who have completed 30 days of service effective April 1, 2016. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
The Plan began on April 1, 2004. The following description of the Plan provides only general information. Further information about the Plan agreement, eligible employees, vesting provisions, and investment alternatives are contained in the Plan Document.
Contributions
Participating employees contribute to the Plan through payroll deductions in amounts ranging from 1% to 60% of their earnings, subject to certain limitations. The Plan allows but does not require the Company to make matching contributions or other contributions at its discretion. Only participants employed by the Company on the last day of a plan year are eligible to receive any Company contributions made for such plan year. During the year ended November 30, 2016, the Company made a discretionary matching contribution of 15% of eligible employee pretax contributions.
Participants' elective contributions, as well as the Company's matching contributions, are invested in the Plan's investment funds as directed by the participant.
Participant Accounts
Each participant's account is credited with the participant's contribution, and an allocation of the employer's contribution made on his or her behalf plus a proportionate interest in the investment earnings of the funds in which the contributions are vested. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account balance.
Vesting
Participants are immediately vested in their contributions, earnings on their contributions, Company matching contributions and earnings on the Company contributions.
4
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
1. | DESCRIPTION OF THE PLAN (continued) |
Payment of Benefits
Participants may choose to receive account distributions either in the form of a lump sum payment or installments over a period of time as defined in the Plan Document. Benefits and withdrawals are recorded when paid.
Notes Receivable from Participants
Participants are permitted to take loans from their account balances, subject to a $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 12 months, whichever is less. The Plan Sponsor determines the interest rate for loans based on the prime rate plus 1%. The loans are secured by the participant’s account, and all outstanding loans at November 30, 2016 bear interest at a rate between 4.25% and 4.50%.
Loan repayments, including interest, are made by participants through payroll deductions over loan terms of up to five years. Longer terms are available for loans taken to purchase, construct, or substantially rehabilitate a primary home for the participant or the participant's immediate family.
Plan Termination
Upon termination of service, a participant with an account balance greater than $1,000, may elect to rollover the balance to an Individual Retirement Account, or another qualified plan, or elect to receive a lump-sum payment equal to his or her account balance. Balances less than $1,000, will automatically be paid directly to the participant.
The Company has no intentions to terminate the Plan; however, 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 cause make it necessary to do so. Also, the Company may 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 benefits.
5
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Accounting
The accompanying financial statements of the Plan are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of year-end and the changes therein and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Valuation of Securities and Income Recognition
Investments are stated at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 4 for discussion of fair value measurements.
Securities traded on a national securities exchange 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. Common and collective funds are valued by the issuer of the funds based on the fund managers’ estimate of the individual investments held by the fund. Mutual funds are valued at the closing price of the funds on the last day of the Plan year as quoted by the applicable fund issuer.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Net appreciation (depreciation) includes the Plan's gains and losses on investments bought and sold as well as held during the year.
Net appreciation (depreciation) in fair value of investments included in the accompanying statement of changes in net assets available for benefits includes realized gains or losses from the sale of investments and unrealized appreciation or depreciation in the fair value of investments. Expenses relating to the purchase or sale of investments are added to the cost or deducted from the proceeds.
The McCormick & Company, Incorporated common stock fund (the Fund) is tracked on a unitized basis. The Fund consists of McCormick & Company, Incorporated common stock (voting and non-voting) and funds held in the Wells Fargo Short-Term Investment Money Market Fund sufficient to meet the Fund’s daily cash needs. Unitizing the Fund allows for daily trades. The value of a unit reflects the combined market value of McCormick & Company, Incorporated common stock and the cash investments held by the Fund. As of November 30, 2016, 18,643 units were outstanding with a value of approximately $10.49 per unit. As of November 30, 2015, 20,202 units were outstanding with a value of approximately $10.09 per unit. As of November 30, 2016, the Fund held 1,961 shares of McCormick & Company, Incorporated common stock with an aggregate value of $178,853, and a balance in the Wells Fargo Short-Term Investment Money Market Fund of $16,682. As of November 30, 2015, the Fund held 2,163 shares of McCormick & Company, Incorporated common stock with an aggregate value of $185,848, and a balance in the Wells Fargo Short-Term Investment Money Market Fund of $18,039.
6
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Notes Receivable from Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent notes receivable from participants are reclassified as distributions based upon the terms of the Plan Document; thus, no allowance for doubtful accounts has been recorded as of November 30, 2016 and 2015.
Contributions
Employee contributions are recorded in the period that the Plan Sponsor makes payroll deductions from the participant’s earnings. The Company match is typically funded after the Plan year-end, within the timeframe prescribed by the Internal Revenue Service.
Administrative Expenses
Administrative expenses incurred on behalf of the Plan are paid by the Plan Sponsor; however, fees for loan initiation and maintenance are paid for by the participant, and management and other fees for investment funds offered under the Plan are included in administrative expenses in the accompanying statement of changes in net assets available for benefits.
Payment of Benefits
Benefit payments to participants are recorded when paid.
Accounting Pronouncements adopted in 2016
In July 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960) Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient). ASU No. 2015-12 has three parts. Part I designates contract value as the only required measure for fully benefit-responsive investment contracts; Part II eliminates the requirement that plans disclose: (a) individual investments that represent 5 percent or more of net assets available for benefits; and (b) the net appreciation or depreciation for investments by general type requirements for both participant-directed investments and nonparticipant-directed investments. Part III provides a practical expedient to permit plans to measure investments and investment-related accounts as of a month-end date that is closest to the plan’s fiscal year-end, when the fiscal period does not coincide with month-end. Parts I and II are effective on a retrospective basis, and Part III is effective on a prospective basis, for fiscal years beginning after December 15, 2015. Early application is permitted. Part III is not applicable to the Plan. Management has elected to adopt Parts I and II, retrospectively. Its effect is not material to the Plan’s financial statements.
In May 2015, the FASB issued Accounting Standards Update ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). ASU No. 2015-07 removes the requirement to include all investments in the fair value hierarchy for which the fair value is measured at net asset value (NAV) per share using the practical expedient, under Fair Value Measurements and Disclosures (Topic 820). ASU No. 2015-07 is effective on a retrospective basis for fiscal years beginning after December 15, 2015. Early adoption is permitted. Management has elected to adopt ASU No. 2015-07. Its impact is not material to the Plan's financial statement.
7
In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-01, Financial Instruments-Overall (Subtopic 825-10). ASU No. 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. ASU No. 2016-01 also requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. ASU No. 2016-01 is effective for employee benefit plans for fiscal years beginning after December 15, 2018. Early adoption is permitted. Management has elected to adopt ASU No. 2016-01. Its effect is not material to the Plan’s financial statements.
8
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
3. | INVESTMENTS |
The Plan’s investments are held in bank-administered trust funds. The custodial trustee of the Plan is Wells Fargo Bank Minnesota N.A. During the year ended November 30, 2016, the Plan’s investments (including investments bought, sold, or held throughout the year) increased in fair value by $85,035, as follows:
McCormick & Company, Incorporated common stock fund | $ | 13,599 | |
Common and collective fund | 2,382 | ||
Mutual funds | 69,054 | ||
Total | $ | 85,035 | |
Fair Value Measurements
GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under GAAP are described below:
Level 1 | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access. | |
Level 2 | Inputs to the valuation methodology include: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. | |
Level 3 | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. | |
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used as of November 30, 2016 and 2015.
9
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
Mutual funds: Valued at the quoted net asset value (NAV) of shares held by the Plan at year end.
Common stocks: Valued at the closing price reported on the active market on which the individual securities are traded.
Pooled, common and collective trusts: Valued at net asset value (NAV) of the underlying investments. The collective trust funds' estimated value is net asset value, exclusive of the adjustment to contract value.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following tables sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of November 30, 2016 and 2015:
Assets at Fair Value as of November 30, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Mutual funds: | |||||||||||||||
Equity funds | $ | 729,408 | $ | — | $ | — | $ | 729,408 | |||||||
Bond funds | 335,120 | — | — | 335,120 | |||||||||||
Balanced funds | 1,294,795 | — | — | 1,294,795 | |||||||||||
McCormick & Company, Incorporated Common Stock Fund: | 195,535 | — | — | 195,535 | |||||||||||
Common collective trusts (a) | — | — | — | 151,370 | |||||||||||
Total Assets at Fair Value | $ | 2,554,858 | $ | — | $ | — | $ | 2,706,228 | |||||||
10
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
3. | INVESTMENTS (continued) |
Fair Value Measurements (continued)
Assets at Fair Value as of November 30, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Mutual funds: | |||||||||||||||
Equity funds | $ | 791,740 | $ | — | $ | — | $ | 791,740 | |||||||
Bond funds | 331,492 | — | — | 331,492 | |||||||||||
Balanced funds | 1,312,883 | — | — | 1,312,883 | |||||||||||
McCormick & Company, Incorporated Common Stock Fund: | 203,887 | — | — | 203,887 | |||||||||||
Common collective trusts (a) | — | — | — | 123,232 | |||||||||||
Total Assets at Fair Value | $ | 2,640,002 | $ | — | $ | — | $ | 2,763,234 | |||||||
(a) In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of fair value hierarchy to the line items presented in the statement of net assets available for benefits.
The following table presents the category, fair value, redemption frequency, and redemption notice period for the plan investments, the fair value of which is estimated using the NAV per share as of November 30, 2016 and 2015, respectively.
Investment | 2016 | 2015 | Redemption Frequency | Redemption Notice Period | ||||
Wells Fargo Stable Return Fund N | $ | 151,370 | $ | 123,232 | Monthly/Quarterly | None | ||
The Wells Fargo Stable Return Fund N (the “Stable Return Fund”) is a common collective trust that is fully invested in Wells Fargo Stable Return Fund G, which is fully invested in contracts deemed to be fully benefit responsive under accounting principle generally accepted in the United States.
11
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Notes to the Financial Statements
November 30, 2016 and 2015
4. | TRANSACTIONS WITH PARTIES-IN-INTEREST |
The Plan holds investments in common stock of McCormick & Company, Incorporated, the Parent of the Plan Sponsor, and in funds managed by affiliates of Wells Fargo Minnesota N.A., the custodial trustee of the Plan. Dividends on McCormick & Company, Incorporated common stock and income on investments in Wells Fargo Minnesota N.A. funds are at the same rates as non-affiliated holders of these securities.
5. | INCOME TAX STATUS |
The Internal Revenue Service (“IRS”) has ruled that the Plan qualified under Section 401(a) of the Internal Revenue Code (“IRC”) in a letter dated March 31, 2008, and is therefore not subject to tax under present income tax laws. The Plan has been amended since receiving the determination letter; however, the Plan Sponsor believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.
GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the Company has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan Sponsor has concluded that as of November 30, 2016 and 2015, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the financial statements.
The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan Sponsor believes it is no longer subject to income tax examinations for years prior to 2013.
6. | RISKS AND UNCERTAINTIES |
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the accompanying statements of net assets available for benefits.
12
SUPPLEMENTAL SCHEDULE
THE MOJAVE FOODS CORPORATION 401(K) RETIREMENT PLAN
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
As of November 30, 2016
Description of Investments | Shares Held | Current Value | ||||
McCormick & Company, Incorporated common stock fund | ||||||
McCormick & Company, Incorporated | ||||||
* Common Stock | 1,961 | $ | 178,853 | |||
Money Market Fund | ||||||
* Wells Fargo Short-Term Investment Money Market Fund | 16,682 | 16,682 | ||||
Total McCormick & Company Incorporated common stock fund | 195,535 | |||||
Common and Collective Fund | ||||||
* Wells Fargo Stable Return Fund N | 2,845 | 151,370 | ||||
Mutual Funds | ||||||
Dodge & Cox Income Fund | 27 | 368 | ||||
Pimco Global Bond Unhedged Institutional Fund | 169 | 1,519 | ||||
Vanguard Total Bond Market Index Fund | 31,289 | 333,233 | ||||
AMG TimesSquare Small Cap Growth Fund | 1,609 | 26,410 | ||||
Delaware Small Cap Value Fund | 1,448 | 88,797 | ||||
Dodge & Cox International Stock Fund | 781 | 30,105 | ||||
T Rowe Price Growth Stock Fund | 1,587 | 86,260 | ||||
Vanguard Institutional Index Fund | 1,674 | 337,544 | ||||
Vanguard Mid Cap Index Fund | 99 | 3,574 | ||||
Vanguard Small Cap Index Institutional Fund | 59 | 3,573 | ||||
Vanguard Total International Stock Index Fund | 207 | 20,162 | ||||
Vanguard Windsor II Fund Admiral Shares | 2,027 | 132,983 | ||||
Vanguard Target Retirement Fund | 6,092 | 78,217 | ||||
Vanguard Target Retirement Fund 2015 | 7,588 | 113,434 | ||||
Vanguard Target Retirement Fund 2020 | 1,422 | 40,790 | ||||
Vanguard Target Retirement Fund 2025 | 16,187 | 268,055 | ||||
Vanguard Target Retirement Fund 2030 | 4,026 | 118,609 | ||||
Vanguard Target Retirement Fund 2035 | 17,667 | 316,950 | ||||
Vanguard Target Retirement Fund 2040 | 3,579 | 108,814 | ||||
Vanguard Target Retirement Fund 2045 | 10,529 | 200,257 | ||||
Vanguard Target Retirement Fund 2050 | 1,510 | 46,009 | ||||
Vanguard Target Retirement Fund 2055 | 98 | 3,215 | ||||
Vanguard Target Retirement Fund 2060 | 15 | 445 | ||||
Total Mutual Funds | 2,359,323 | |||||
Participant Loans ** | ||||||
* Notes receivable from participants | 204,691 | |||||
Total Investments | $ | 2,910,919 | ||||
Note: Historical cost has been omitted, as all investments are participant directed.
* | Parties-in-interest as defined by ERISA. |
** | Interest rates between 4.25% to 4.50%; maturity dates range from 2016 to 2026. |
13
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements pertaining to the McCormick 401(k) Retirement Plan and Mojave Foods Corporation 401(k) Retirement Plan of McCormick & Company, Inc. of our report dated May 25, 2017, with respect to the financial statements and supplemental schedule of the McCormick 401(k) Retirement Plan included in this Annual Report (Form 11-K) for the year ended November 30, 2016, our report dated May 25, 2017, with respect to the financial statements and supplemental schedule of the Mojave Foods Corporation 401(k) Retirement Plan included in this Annual Report (Form 11-K) for the year ended November 30, 2016.
Form | Registration Number | Date Filed | |
S-8 | 333-187703 | 04/03/2013 | |
S-8 | 333-186250 | 01/28/2013 | |
S-8 | 333-158573 | 04/14/2009 | |
S-8 | 333-155775 | 11/28/2008 | |
S-8 | 333-150043 | 04/02/2008 | |
S-3 | 333-147809 | 12/04/2007 | |
S-8 | 333-142020 | 04/11/2007 | |
S-3 | 333-122366 | 01/28/2005 | |
S-8 | 333-114094 | 03/31/2004 | |
S-8 | 333-57590 | 03/26/2001 | |
S-8 | 333-93231 | 12/21/1999 | |
S-8 | 333-74963 | 03/24/1999 | |
S-3 | 333-47611 | 03/09/1998 | |
S-8 | 333-23727 | 03/21/1997 | |
/s/ SB & Company LLC
May 25, 2017
Hunt Valley, Maryland
200 International Circle ● Suite 5500 ● Hunt Valley ● Maryland 21030 ● P 410-584-0060 ● F 410-584-0061