|
|
|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
o
|
Non-accelerated filer
|
|
o
|
|
Smaller reporting company
|
|
o
|
Emerging growth company
|
|
o
|
|
|
|
|
|
|
|
PART I.
|
Page No.
|
|
|
|
|
Item 1.
|
Business
|
|
Item 1A.
|
Risk Factors
|
|
Item 1B.
|
Unresolved Staff Comments
|
|
Item 2.
|
Properties
|
|
Item 3.
|
Legal Proceedings
|
|
Item 4.
|
Mine Safety Disclosures
|
|
|
|
|
PART II.
|
|
|
|
|
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Item 6.
|
Selected Financial Data
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Item 9.
|
Changes In and Disagreements with Accountants on Accounting and Financial Disclosures
|
|
Item 9A.
|
Controls and Procedures
|
|
Item 9B.
|
Other Information
|
|
|
|
|
PART III.
|
|
|
|
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
|
Item 11.
|
Executive Compensation
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
|
Item 14.
|
Principal Accounting Fees and Services
|
|
|
|
|
PART IV.
|
|
|
|
|
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
|
|
Signatures
|
Primary Reportable Segment
|
|
Major Trademark
|
U.S. Retail Coffee
|
|
Folgers
®
,
Dunkin’ Donuts
®
,
and
Café Bustelo
®
|
U.S. Retail Consumer Foods
|
|
Smucker’s
®
,
Jif
®
,
Uncrustables
®
,
and
Crisco
®
|
U.S. Retail Pet Foods
|
|
Rachael Ray Nutrish
,
Meow Mix
®
,
Milk-Bone
®
,
Natural Balance
®
,
Kibbles ‘n Bits
®
,
9Lives
®
,
Nature’s Recipe
®
, and
Pup-Peroni
®
|
International and Away From Home
|
|
Folgers
and
Smucker’s
|
Our Primary Products
|
Our Primary Brands
|
Competing Brands
|
Competitors
|
U.S. Retail Coffee
|
|
|
|
Mainstream roast and ground coffee
|
Folgers
(A)
and
Café Bustelo
|
Maxwell House
,
McCafe
, and
Yuban
|
The Kraft Heinz Company
|
|
|
Private Label Brands
|
Various
|
|
|
Chock full o’Nuts
|
Massimo Zanetti Beverage Group
|
|
|
Cafe La Llave
|
F. Gaviña & Sons, Inc.
|
Single serve coffee - K-Cup
®
|
Dunkin’ Donuts, Folgers, Café Bustelo
, and
1850
TM
|
Green Mountain Coffee
(A)
|
JAB Holding Company
|
|
|
Starbucks
|
Nestlé S.A.
|
|
|
Private Label Brands
|
Various
|
|
|
McCafe, Maxwell House,
and
Gevalia
|
The Kraft Heinz Company
|
Premium coffee
|
Dunkin’ Donuts
and
1850
|
Starbucks
(A)
and
Seattle’s Best Coffee
|
Nestlé S.A.
|
|
|
Private Label Brands
|
Various
|
|
|
Peet’s Coffee & Tea
|
JAB Holding Company
|
|
|
Eight O’Clock
|
Tata Global Beverages Limited
|
|
|
Gevalia
and
McCafe
|
The Kraft Heinz Company
|
U.S. Retail Consumer Foods
|
|
|
|
Peanut butter and specialty spreads
|
Jif
(A)
|
Private Label Brands
|
Various
|
|
|
Skippy
|
Hormel Foods Corporation
|
|
|
Nutella
|
Ferrero SpA
|
|
|
Peter Pan
|
Conagra Brands, Inc.
|
Fruit spreads
|
Smucker’s
(A)
|
Welch’s
|
Welch Foods Inc.
|
|
|
Private Label Brands
|
Various
|
Shortening and oils
|
Crisco
(B)
|
Private Label Brands
(B)
|
Various
|
|
|
Wesson
|
Richardson International Ltd.
|
Frozen sandwiches
|
Smucker’s Uncrustables
(A)
|
AdvancePierre Foods PB Jamwich
|
Tyson Foods, Inc.
|
|
|
Skippy P.B. & Jelly Minis
|
Hormel Foods Corporation
|
U.S. Retail Pet Foods
|
|
|
|
Mainstream pet food
|
Meow Mix, Kibbles ‘n Bits, 9Lives,
and
Nature’s Recipe
|
Dog Chow
(A)
, One, Beneful, Cat Chow
(A)
, Friskies, Kit & Kaboodle,
and
Fancy Feast
|
Nestlé Purina PetCare Company
|
|
|
Pedigree, Iams,
and
Sheba
|
Mars, Incorporated
|
Pet snacks
|
Milk-Bone
(A)
and
Pup-Peroni
|
Beggin’ Strips
and
Waggin’ Train
|
Nestlé Purina PetCare Company
|
|
|
Dentastix
and
Greenies
|
Mars, Incorporated
|
Premium pet food
|
Rachael Ray Nutrish
and
Natural Balance
|
Blue Buffalo
(A)
|
General Mills, Inc.
|
|
|
Nutro
|
Mars, Incorporated
|
|
|
Hill’s
|
Hill’s Pet Nutrition, Inc.
|
|
|
Pro Plan
and
Merrick
|
Nestlé Purina PetCare Company
|
International and Away From Home
|
|
|
|
Foodservice hot beverage
|
Folgers
|
Nescafé
|
Société des Produits Nestlé S.A.
|
|
|
Maxwell House
|
The Kraft Heinz Company
|
|
|
Private Label Brands
|
Various
|
Foodservice portion control
|
Smucker’s
and
Jif
|
Heinz, Welch’s,
and
Private Label Brands
|
The Kraft Heinz Company
|
|
|
Private Label Brands
|
Various
|
Canada coffee
|
Folgers
|
Tim Hortons
(A)
|
Restaurant Brands International Inc.
|
|
|
Maxwell House
|
The Kraft Heinz Company
|
|
|
Private Label Brands
|
Various
|
Canada flour
|
Robin Hood
®(A)
and
Five Roses
®
|
Private Label Brands
|
Various
|
Name
|
|
Age
|
|
Years
with
Company
|
|
Position
|
|
Served as
an Officer
Since
|
Richard K. Smucker
|
|
71
|
|
46
|
|
Executive Chairman
(A)
|
|
1974
|
Mark T. Smucker
|
|
49
|
|
21
|
|
President and Chief Executive Officer
(B)
|
|
2001
|
Mark R. Belgya
|
|
58
|
|
34
|
|
Vice Chair and Chief Financial Officer
(C)
|
|
1997
|
Tina R. Floyd
|
|
53
|
|
24
|
|
Senior Vice President and General Manager, Consumer Foods
(D)
|
|
2018
|
Amy C. Held
|
|
45
|
|
6
|
|
Senior Vice President, Corporate Strategy, M&A, and International
(E)
|
|
2018
|
Kevin G. Jackson
|
|
52
|
|
17
|
|
Senior Vice President, U.S. Retail Sales and Away From Home
(F)
|
|
2018
|
Jeannette L. Knudsen
|
|
49
|
|
16
|
|
Senior Vice President, General Counsel and Secretary
(G)
|
|
2009
|
David J. Lemmon
|
|
51
|
|
25
|
|
President, Pet Food and Pet Snacks
(H)
|
|
2012
|
Jill R. Penrose
|
|
46
|
|
15
|
|
Senior Vice President, Human Resources and Corporate Communications
(I)
|
|
2014
|
Joseph Stanziano
|
|
52
|
|
22
|
|
Senior Vice President and General Manager, Coffee
(J)
|
|
2018
|
(A)
|
Mr. Richard Smucker was elected to his present position in May 2016, having served as Chief Executive Officer since August 2011.
|
(B)
|
Mr. Mark Smucker was elected to his present position in May 2016, having served as President and President, Consumer and Natural Foods since April 2015. Prior to that time, he served as President, U.S. Retail Coffee since May 2011.
|
(C)
|
Mr. Belgya was elected to his present position in May 2016, having served as Senior Vice President and Chief Financial Officer since October 2009.
|
(D)
|
Ms. Floyd was elected to her present position in February 2018, having served as Vice President and General Manager, Foodservice since February 2016. Prior to that time, she served as Vice President, Marketing – Consumer Foods since April 2012.
|
(E)
|
Ms. Held was elected to her present position in July 2018, having served as Senior Vice President, Strategy and M&A since March 2018. Prior to that time, she served as Vice President, Corporate Strategy and Development since May 2016 and Director, Corporate Strategy and Development since February 2013.
|
(F)
|
Mr. Jackson was elected to his present position in June 2018, having served as Senior Vice President, U.S. Retail Sales and Marketing Services since February 2018. Prior to that time, he served as Senior Vice President, U.S. Retail Sales and Market Development Organization since October 2017, Vice President, U.S. Retail Sales and Market Development Organization since January 2016, and Vice President and General Manager, Foodservice since May 2014.
|
(G)
|
Ms. Knudsen was elected to her present position in May 2016, having served as Vice President, General Counsel and Corporate Secretary since August 2010.
|
(H)
|
Mr. Lemmon was elected to his present position in June 2018, having served as President, Canada, International, and
|
(I)
|
Ms. Penrose was elected to her present position in May 2016, having served as Vice President, Human Resources since June 2014. Prior to that time, she served as Vice President, Strategy and Organization Development since April 2010.
|
(J)
|
Mr. Stanziano was elected to his present position in February 2018, having served as Senior Vice President and General Manager, Consumer Foods since October 2017. Prior to that time, he served as Vice President and General Manager, Consumer since February 2016 and Vice President, General Manager - Peanut Butter and Snacking since April 2012.
|
•
|
making it more difficult for us to satisfy our financial obligations;
|
•
|
increasing our vulnerability to adverse economic, regulatory, and industry conditions, and placing us at a disadvantage compared to our competitors that are less leveraged;
|
•
|
limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
•
|
limiting our ability to borrow additional funds for working capital, capital expenditures, acquisitions, and general corporate or other purposes; and
|
•
|
exposing us to greater interest rate risk, including the risk to variable borrowings of a rate increase and the risk to fixed borrowings of a rate decrease.
|
Item 2.
|
Properties.
|
Locations
|
|
Products Produced/Processed/Stored
|
|
Primary Reportable Segment
|
Bloomsburg, Pennsylvania
|
|
Wet dog and cat food and dry dog and cat food
|
|
U.S. Retail Pet Foods
|
Buffalo, New York
|
|
Dog snacks
|
|
U.S. Retail Pet Foods
|
Chico, California
|
|
Fruit and vegetable juices and beverages and grain products
|
|
U.S. Retail Consumer Foods
|
Cincinnati, Ohio
|
|
Shortening and oils
|
|
U.S. Retail Consumer Foods
|
Decatur, Alabama
|
|
Dry dog and cat food
|
|
U.S. Retail Pet Foods
|
Frontenac, Kansas
|
|
Dry dog and cat food
|
|
U.S. Retail Pet Foods
|
Grandview, Washington
|
|
Fruit
|
|
U.S. Retail Consumer Foods
|
Havre de Grace, Maryland
|
|
Fruit and vegetable juices and beverages
|
|
U.S. Retail Consumer Foods
|
Lawrence, Kansas
|
|
Dry dog food
|
|
U.S. Retail Pet Foods
|
Lexington, Kentucky
|
|
Peanut butter
|
|
U.S. Retail Consumer Foods
|
Longmont, Colorado
(A)
|
|
Frozen sandwiches
|
|
U.S. Retail Consumer Foods
|
Meadville, Pennsylvania
|
|
Dry dog and cat food
|
|
U.S. Retail Pet Foods
|
Memphis, Tennessee
|
|
Peanut butter and fruit spreads
|
|
U.S. Retail Consumer Foods
|
New Bethlehem, Pennsylvania
|
|
Peanut butter and combination peanut butter and jelly products
|
|
U.S. Retail Consumer Foods
|
New Orleans, Louisiana (four facilities)
(B)
|
Coffee
|
|
U.S. Retail Coffee
|
|
Orrville, Ohio
|
|
Fruit spreads, toppings, and syrups
|
|
U.S. Retail Consumer Foods
|
Oxnard, California
|
|
Fruit
|
|
U.S. Retail Consumer Foods
|
Ripon, Wisconsin
|
|
Fruit spreads, toppings, syrups, and condiments
|
|
U.S. Retail Consumer Foods
|
Scottsville, Kentucky
|
|
Frozen sandwiches
|
|
U.S. Retail Consumer Foods
|
Seattle, Washington
(B)
|
|
Nut mix products
|
|
U.S. Retail Consumer Foods
|
Sherbrooke, Quebec
|
|
Canned milk
|
|
International and Away From Home
|
Suffolk, Virginia
|
|
Coffee
|
|
International and Away From Home
|
Topeka, Kansas
|
|
Dry dog and cat food and dog and cat snacks
|
|
U.S. Retail Pet Foods
|
(A)
|
Our new facility in Longmont will help meet growing demand for
Smucker’s Uncrustables
frozen sandwiches and will complement our existing facility in Scottsville. Production is expected to begin at the Longmont facility during the second half of calendar year 2019.
|
(B)
|
We lease our coffee silo facility in New Orleans and our facilities in Seattle.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Period
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|||||
|
|
Total number
of shares
purchased
|
|
Average
price paid per share
|
|
Total number of shares purchased as part
of publicly announced
plans or programs
|
|
Maximum number (or approximate
dollar value) of shares that may
yet be purchased under the
plans or programs
|
|||||
February 1, 2019 - February 28, 2019
|
|
899
|
|
|
$
|
104.17
|
|
|
—
|
|
|
3,586,598
|
|
March 1, 2019 - March 31, 2019
|
|
518
|
|
|
103.11
|
|
|
—
|
|
|
3,586,598
|
|
|
April 1, 2019 - April 30, 2019
|
|
1,162
|
|
|
120.90
|
|
|
—
|
|
|
3,586,598
|
|
|
Total
|
|
2,579
|
|
|
$
|
111.50
|
|
|
—
|
|
|
3,586,598
|
|
(a)
|
Shares in this column include shares repurchased from stock plan recipients in lieu of cash payments.
|
(d)
|
As of
April 30, 2019
, there were 3,586,598 common shares remaining available for future repurchase pursuant to our Board of Directors’ authorizations.
|
|
April 30,
|
||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||
The J. M. Smucker Company
|
$
|
100.00
|
|
|
$
|
122.83
|
|
|
$
|
137.63
|
|
|
$
|
140.28
|
|
|
$
|
129.67
|
|
|
$
|
143.66
|
|
S&P Packaged Foods & Meats
|
100.00
|
|
|
114.98
|
|
|
133.99
|
|
|
141.72
|
|
|
121.42
|
|
|
134.16
|
|
||||||
S&P 500
|
100.00
|
|
|
112.98
|
|
|
114.34
|
|
|
134.83
|
|
|
152.72
|
|
|
173.32
|
|
|
Year Ended April 30,
|
||||||||||||||||||
(Dollars and shares in millions, except per share data)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Statements of Income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
7,838.0
|
|
|
$
|
7,357.1
|
|
|
$
|
7,392.3
|
|
|
$
|
7,811.2
|
|
|
$
|
5,692.7
|
|
Gross profit
|
$
|
2,915.7
|
|
|
$
|
2,836.1
|
|
|
$
|
2,835.3
|
|
|
$
|
2,967.8
|
|
|
$
|
1,968.7
|
|
% of net sales
|
37.2
|
%
|
|
38.5
|
%
|
|
38.4
|
%
|
|
38.0
|
%
|
|
34.6
|
%
|
|||||
Operating income
|
$
|
928.6
|
|
|
$
|
1,044.0
|
|
|
$
|
1,042.6
|
|
|
$
|
1,146.3
|
|
|
$
|
785.3
|
|
% of net sales
|
11.8
|
%
|
|
14.2
|
%
|
|
14.1
|
%
|
|
14.7
|
%
|
|
13.8
|
%
|
|||||
Net income
|
$
|
514.4
|
|
|
$
|
1,338.6
|
|
|
$
|
592.3
|
|
|
$
|
688.7
|
|
|
$
|
344.9
|
|
Financial Position:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
101.3
|
|
|
$
|
192.6
|
|
|
$
|
166.8
|
|
|
$
|
109.8
|
|
|
$
|
125.6
|
|
Total assets
|
16,711.3
|
|
|
15,301.2
|
|
|
15,639.7
|
|
|
15,984.1
|
|
|
16,806.3
|
|
|||||
Total debt
|
5,910.8
|
|
|
4,832.0
|
|
|
5,398.5
|
|
|
5,430.0
|
|
|
6,170.9
|
|
|||||
Total shareholders’ equity
|
7,970.5
|
|
|
7,891.1
|
|
|
6,850.2
|
|
|
7,008.5
|
|
|
7,086.9
|
|
|||||
Liquidity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
1,141.2
|
|
|
$
|
1,218.0
|
|
|
$
|
1,059.0
|
|
|
$
|
1,461.0
|
|
|
$
|
739.1
|
|
Additions to property, plant, and equipment
|
359.8
|
|
|
321.9
|
|
|
192.4
|
|
|
201.4
|
|
|
247.7
|
|
|||||
Free cash flow
(A)
|
781.4
|
|
|
896.1
|
|
|
866.6
|
|
|
1,259.6
|
|
|
491.4
|
|
|||||
Quarterly dividends paid
|
377.9
|
|
|
350.3
|
|
|
339.3
|
|
|
316.6
|
|
|
254.0
|
|
|||||
Purchase of treasury shares
|
5.4
|
|
|
7.0
|
|
|
437.6
|
|
|
441.1
|
|
|
24.3
|
|
|||||
EBITDA (as adjusted)
(A)
|
1,560.9
|
|
|
1,625.1
|
|
|
1,593.7
|
|
|
1,579.1
|
|
|
871.3
|
|
|||||
Share Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average shares outstanding
|
113.7
|
|
|
113.6
|
|
|
116.0
|
|
|
119.4
|
|
|
103.7
|
|
|||||
Weighted-average shares outstanding – assuming dilution
|
113.7
|
|
|
113.6
|
|
|
116.1
|
|
|
119.5
|
|
|
103.7
|
|
|||||
Dividends declared per common share
|
$
|
3.40
|
|
|
$
|
3.12
|
|
|
$
|
3.00
|
|
|
$
|
2.68
|
|
|
$
|
2.56
|
|
Earnings per Common Share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
4.52
|
|
|
$
|
11.79
|
|
|
$
|
5.11
|
|
|
$
|
5.77
|
|
|
$
|
3.33
|
|
Net income – assuming dilution
|
4.52
|
|
|
11.78
|
|
|
5.10
|
|
|
5.76
|
|
|
3.33
|
|
|||||
Other Non-GAAP Measures:
(A)
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted gross profit
|
$
|
2,969.9
|
|
|
$
|
2,802.7
|
|
|
$
|
2,868.2
|
|
|
$
|
2,968.0
|
|
|
$
|
1,999.4
|
|
% of net sales
|
37.9
|
%
|
|
38.1
|
%
|
|
38.8
|
%
|
|
38.0
|
%
|
|
35.1
|
%
|
|||||
Adjusted operating income
|
$
|
1,492.3
|
|
|
$
|
1,439.7
|
|
|
$
|
1,492.9
|
|
|
$
|
1,490.8
|
|
|
$
|
983.5
|
|
% of net sales
|
19.0
|
%
|
|
19.6
|
%
|
|
20.2
|
%
|
|
19.1
|
%
|
|
17.3
|
%
|
|||||
Adjusted income and earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted income
|
$
|
942.7
|
|
|
$
|
904.6
|
|
|
$
|
895.9
|
|
|
$
|
931.3
|
|
|
475.6
|
|
|
Adjusted earnings per share – assuming dilution
|
$
|
8.29
|
|
|
$
|
7.96
|
|
|
$
|
7.72
|
|
|
$
|
7.79
|
|
|
$
|
4.59
|
|
(A)
|
We use non-GAAP financial measures to evaluate our performance. Refer to “Non-GAAP Financial Measures” within Management’s Discussion and Analysis of Financial Condition and Results of Operations for a reconciliation to the comparable GAAP financial measure.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Year Ended April 30,
|
|||||||||
|
2019
|
|
2018
|
|
% Increase
(Decrease)
|
|||||
Net sales
|
$
|
7,838.0
|
|
|
$
|
7,357.1
|
|
|
7
|
%
|
Gross profit
|
$
|
2,915.7
|
|
|
$
|
2,836.1
|
|
|
3
|
|
% of net sales
|
37.2
|
%
|
|
38.5
|
%
|
|
|
|
||
Operating income
|
$
|
928.6
|
|
|
$
|
1,044.0
|
|
|
(11
|
)
|
% of net sales
|
11.8
|
%
|
|
14.2
|
%
|
|
|
|
||
Net income:
|
|
|
|
|
|
|
||||
Net income
|
$
|
514.4
|
|
|
$
|
1,338.6
|
|
|
(62
|
)
|
Net income per common share – assuming dilution
|
$
|
4.52
|
|
|
$
|
11.78
|
|
|
(62
|
)
|
Adjusted gross profit
(A)
|
$
|
2,969.9
|
|
|
$
|
2,802.7
|
|
|
6
|
|
% of net sales
|
37.9
|
%
|
|
38.1
|
%
|
|
|
|
||
Adjusted operating income
(A)
|
$
|
1,492.3
|
|
|
$
|
1,439.7
|
|
|
4
|
|
% of net sales
|
19.0
|
%
|
|
19.6
|
%
|
|
|
|
||
Adjusted income:
(A)
|
|
|
|
|
|
|
||||
Income
|
$
|
942.7
|
|
|
$
|
904.6
|
|
|
4
|
|
Earnings per share – assuming dilution
|
$
|
8.29
|
|
|
$
|
7.96
|
|
|
4
|
|
(A)
|
We use non-GAAP financial measures to evaluate our performance. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for a reconciliation to the comparable GAAP financial measure.
|
|
Year Ended April 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Increase
(Decrease) |
|
%
|
|||||||
Net sales
|
$
|
7,838.0
|
|
|
$
|
7,357.1
|
|
|
$
|
480.9
|
|
|
7
|
%
|
Ainsworth acquisition
|
(747.0
|
)
|
|
—
|
|
|
(747.0
|
)
|
|
(10
|
)
|
|||
Baking divestiture
|
—
|
|
|
(254.0
|
)
|
|
254.0
|
|
|
3
|
|
|||
Foreign currency exchange
|
13.7
|
|
|
—
|
|
|
13.7
|
|
|
—
|
|
|||
Net sales excluding acquisition, divestiture, and foreign currency exchange
(A)
|
$
|
7,104.7
|
|
|
$
|
7,103.1
|
|
|
$
|
1.6
|
|
|
—
|
%
|
(A)
|
Net sales excluding acquisition, divestiture, and foreign currency exchange is a non-GAAP measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
|
|
Year Ended April 30,
|
||||
|
2019
|
|
2018
|
||
Gross profit
|
37.2
|
%
|
|
38.5
|
%
|
Selling, distribution, and administrative expenses:
|
|
|
|
||
Marketing
|
3.9
|
%
|
|
3.2
|
%
|
Advertising
|
3.0
|
|
|
2.6
|
|
Selling
|
3.2
|
|
|
3.3
|
|
Distribution
|
3.3
|
|
|
3.2
|
|
General and administrative
|
5.9
|
|
|
6.2
|
|
Total selling, distribution, and administrative expenses
|
19.2
|
%
|
|
18.5
|
%
|
Amortization
|
3.1
|
|
|
2.8
|
|
Goodwill impairment charges
|
1.2
|
|
|
2.0
|
|
Other intangible assets impairment charges
|
1.4
|
|
|
0.4
|
|
Other special project costs
|
0.8
|
|
|
0.6
|
|
Other operating expense (income) – net
|
(0.4
|
)
|
|
—
|
|
Operating income
|
11.8
|
%
|
|
14.2
|
%
|
|
Year Ended April 30,
|
|||||||||
|
2019
|
|
2018
|
|
% Increase
(Decrease)
|
|||||
Net sales:
|
|
|
|
|
|
|||||
U.S. Retail Coffee
|
$
|
2,122.3
|
|
|
$
|
2,086.8
|
|
|
2
|
%
|
U.S. Retail Consumer Foods
|
1,761.5
|
|
|
1,985.6
|
|
|
(11
|
)
|
||
U.S. Retail Pet Foods
|
2,879.5
|
|
|
2,165.3
|
|
|
33
|
|
||
International and Away From Home
|
1,074.7
|
|
|
1,119.4
|
|
|
(4
|
)
|
||
Segment profit:
|
|
|
|
|
|
|||||
U.S. Retail Coffee
|
$
|
676.3
|
|
|
$
|
612.4
|
|
|
10
|
%
|
U.S. Retail Consumer Foods
|
406.1
|
|
|
475.3
|
|
|
(15
|
)
|
||
U.S. Retail Pet Foods
|
503.4
|
|
|
439.4
|
|
|
15
|
|
||
International and Away From Home
|
198.5
|
|
|
200.1
|
|
|
(1
|
)
|
||
Segment profit margin:
|
|
|
|
|
|
|||||
U.S. Retail Coffee
|
31.9
|
%
|
|
29.3
|
%
|
|
|
|||
U.S. Retail Consumer Foods
|
23.1
|
|
|
23.9
|
|
|
|
|||
U.S. Retail Pet Foods
|
17.5
|
|
|
20.3
|
|
|
|
|||
International and Away From Home
|
18.5
|
|
|
17.9
|
|
|
|
|
Year Ended April 30,
|
||||||
|
2019
|
|
2018
|
||||
Net cash provided by (used for) operating activities
|
$
|
1,141.2
|
|
|
$
|
1,218.0
|
|
Net cash provided by (used for) investing activities
|
(1,924.2
|
)
|
|
(277.6
|
)
|
||
Net cash provided by (used for) financing activities
|
699.0
|
|
|
(922.0
|
)
|
||
|
|
|
|
||||
Net cash provided by (used for) operating activities
|
$
|
1,141.2
|
|
|
$
|
1,218.0
|
|
Additions to property, plant, and equipment
|
(359.8
|
)
|
|
(321.9
|
)
|
||
Free cash flow
(A)
|
$
|
781.4
|
|
|
$
|
896.1
|
|
(A)
|
Free cash flow is a non-GAAP financial measure used by management to evaluate the amount of cash available for debt repayment, dividend distribution, acquisition opportunities, share repurchases, and other corporate purposes.
|
|
April 30,
|
||||||
|
2019
|
|
2018
|
||||
Current portion of long-term debt
|
$
|
798.5
|
|
|
$
|
—
|
|
Short-term borrowings
|
426.0
|
|
|
144.0
|
|
||
Long-term debt, less current portion
|
4,686.3
|
|
|
4,688.0
|
|
||
Total debt
|
$
|
5,910.8
|
|
|
$
|
4,832.0
|
|
Shareholders’ equity
|
7,970.5
|
|
|
7,891.1
|
|
||
Total capital
|
$
|
13,881.3
|
|
|
$
|
12,723.1
|
|
|
Projection
Year Ending
April 30, 2020
|
||
Principal payments – excludes the impact of potential debt refinancing
|
$
|
800.0
|
|
Dividend payments – based on current rates and common shares outstanding
|
390.0
|
|
|
Capital expenditures
|
310.0
|
|
|
Interest payments – excludes the impact of potential debt refinancing
|
205.0
|
|
|
Year Ended April 30,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Gross profit reconciliation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit
|
$
|
2,915.7
|
|
|
$
|
2,836.1
|
|
|
$
|
2,835.3
|
|
|
$
|
2,967.8
|
|
|
$
|
1,968.7
|
|
Unallocated derivative losses (gains)
|
54.2
|
|
|
(37.3
|
)
|
|
27.2
|
|
|
(12.0
|
)
|
|
24.5
|
|
|||||
Cost of products sold – special project costs
|
—
|
|
|
3.9
|
|
|
5.7
|
|
|
12.2
|
|
|
6.2
|
|
|||||
Adjusted gross profit
|
$
|
2,969.9
|
|
|
$
|
2,802.7
|
|
|
$
|
2,868.2
|
|
|
$
|
2,968.0
|
|
|
$
|
1,999.4
|
|
Operating income reconciliation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
$
|
928.6
|
|
|
$
|
1,044.0
|
|
|
$
|
1,042.6
|
|
|
$
|
1,146.3
|
|
|
$
|
785.3
|
|
Amortization
|
240.3
|
|
|
206.8
|
|
|
207.3
|
|
|
208.4
|
|
|
109.7
|
|
|||||
Goodwill impairment charges
|
97.9
|
|
|
145.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other intangible assets impairment charges
|
107.2
|
|
|
31.9
|
|
|
133.2
|
|
|
—
|
|
|
1.2
|
|
|||||
Unallocated derivative losses (gains)
|
54.2
|
|
|
(37.3
|
)
|
|
27.2
|
|
|
(12.0
|
)
|
|
24.5
|
|
|||||
Cost of products sold – special project costs
|
—
|
|
|
3.9
|
|
|
5.7
|
|
|
12.2
|
|
|
6.2
|
|
|||||
Other special project costs
|
64.1
|
|
|
45.4
|
|
|
76.9
|
|
|
135.9
|
|
|
56.6
|
|
|||||
Adjusted operating income
|
$
|
1,492.3
|
|
|
$
|
1,439.7
|
|
|
$
|
1,492.9
|
|
|
$
|
1,490.8
|
|
|
$
|
983.5
|
|
Net income reconciliation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
514.4
|
|
|
$
|
1,338.6
|
|
|
$
|
592.3
|
|
|
$
|
688.7
|
|
|
$
|
344.9
|
|
Income tax expense (benefit)
|
187.2
|
|
|
(477.6
|
)
|
|
286.1
|
|
|
289.2
|
|
|
178.1
|
|
|||||
Amortization
|
240.3
|
|
|
206.8
|
|
|
207.3
|
|
|
208.4
|
|
|
109.7
|
|
|||||
Goodwill impairment charges
|
97.9
|
|
|
145.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other intangible assets impairment charges
|
107.2
|
|
|
31.9
|
|
|
133.2
|
|
|
—
|
|
|
1.2
|
|
|||||
Unallocated derivative losses (gains)
|
54.2
|
|
|
(37.3
|
)
|
|
27.2
|
|
|
(12.0
|
)
|
|
24.5
|
|
|||||
Cost of products sold – special project costs
|
—
|
|
|
3.9
|
|
|
5.7
|
|
|
12.2
|
|
|
6.2
|
|
|||||
Other special project costs
|
64.1
|
|
|
45.4
|
|
|
76.9
|
|
|
135.9
|
|
|
56.6
|
|
|||||
Adjusted income before income taxes
|
$
|
1,265.3
|
|
|
$
|
1,256.7
|
|
|
$
|
1,328.7
|
|
|
$
|
1,322.4
|
|
|
$
|
721.2
|
|
Income taxes, as adjusted
(A)
|
322.6
|
|
|
352.1
|
|
|
432.8
|
|
|
391.1
|
|
|
245.6
|
|
|||||
Adjusted income
|
$
|
942.7
|
|
|
$
|
904.6
|
|
|
$
|
895.9
|
|
|
$
|
931.3
|
|
|
$
|
475.6
|
|
Weighted-average shares – assuming dilution
|
113.7
|
|
|
113.6
|
|
|
116.1
|
|
|
119.5
|
|
|
103.7
|
|
|||||
Adjusted earnings per share – assuming dilution
|
$
|
8.29
|
|
|
$
|
7.96
|
|
|
$
|
7.72
|
|
|
$
|
7.79
|
|
|
$
|
4.59
|
|
EBITDA (as adjusted) reconciliation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
514.4
|
|
|
$
|
1,338.6
|
|
|
$
|
592.3
|
|
|
$
|
688.7
|
|
|
$
|
344.9
|
|
Income tax expense (benefit)
|
187.2
|
|
|
(477.6
|
)
|
|
286.1
|
|
|
289.2
|
|
|
178.1
|
|
|||||
Interest expense – net
|
207.9
|
|
|
174.1
|
|
|
163.1
|
|
|
171.1
|
|
|
79.9
|
|
|||||
Depreciation
|
206.0
|
|
|
206.3
|
|
|
211.7
|
|
|
221.7
|
|
|
157.5
|
|
|||||
Amortization
|
240.3
|
|
|
206.8
|
|
|
207.3
|
|
|
208.4
|
|
|
109.7
|
|
|||||
Goodwill impairment charges
|
97.9
|
|
|
145.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other intangible assets impairment charges
|
107.2
|
|
|
31.9
|
|
|
133.2
|
|
|
—
|
|
|
1.2
|
|
|||||
EBITDA (as adjusted)
|
$
|
1,560.9
|
|
|
$
|
1,625.1
|
|
|
$
|
1,593.7
|
|
|
$
|
1,579.1
|
|
|
$
|
871.3
|
|
Free cash flow reconciliation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used for) operating activities
|
$
|
1,141.2
|
|
|
$
|
1,218.0
|
|
|
$
|
1,059.0
|
|
|
$
|
1,461.0
|
|
|
$
|
739.1
|
|
Additions to property, plant, and equipment
|
(359.8
|
)
|
|
(321.9
|
)
|
|
(192.4
|
)
|
|
(201.4
|
)
|
|
(247.7
|
)
|
|||||
Free cash flow
|
$
|
781.4
|
|
|
$
|
896.1
|
|
|
$
|
866.6
|
|
|
$
|
1,259.6
|
|
|
$
|
491.4
|
|
(A)
|
Income taxes, as adjusted, is based upon our GAAP effective tax rate and reflects the impact of items excluded from GAAP net income to derive adjusted income. Income taxes, as adjusted has been further adjusted to reflect the exclusion of certain one-time discrete tax adjustments related to U.S. tax reform and the goodwill impairment charges recorded during 2019 and 2018.
|
|
Total
|
|
2020
|
|
2021–2022
|
|
2023–2024
|
|
2025 and
beyond |
||||||||||
Long-term debt obligations, including current portion
(A)
|
$
|
5,500.0
|
|
|
$
|
800.0
|
|
|
$
|
1,950.0
|
|
|
$
|
—
|
|
|
$
|
2,750.0
|
|
Interest payments
(B)
|
1,664.5
|
|
|
192.5
|
|
|
302.8
|
|
|
211.5
|
|
|
957.7
|
|
|||||
Operating lease obligations
(C)
|
165.8
|
|
|
43.0
|
|
|
67.2
|
|
|
37.1
|
|
|
18.5
|
|
|||||
Purchase obligations
(D)
|
1,574.1
|
|
|
1,361.1
|
|
|
185.2
|
|
|
26.4
|
|
|
1.4
|
|
|||||
Other liabilities
(E)
|
314.1
|
|
|
27.9
|
|
|
54.5
|
|
|
34.0
|
|
|
197.7
|
|
|||||
Total
|
$
|
9,218.5
|
|
|
$
|
2,424.5
|
|
|
$
|
2,559.7
|
|
|
$
|
309.0
|
|
|
$
|
3,925.3
|
|
(A)
|
Long-term debt obligations, including current portion, excludes the impact of offering discounts, make-whole payments, and debt issuance costs.
|
(B)
|
Interest payments consists of the interest payments on our long-term debt, which reflect estimated payments for our variable-rate debt based on the current interest rate outlook, and exclude the mark-to-market impact of active interest rate contracts.
|
(C)
|
Operating lease obligations consists of the minimum rental commitments under non-cancelable operating leases.
|
(D)
|
Purchase obligations includes agreements that are enforceable and legally bind us to purchase goods or services, which primarily consist of obligations related to normal, ongoing purchase obligations in which we have guaranteed payment to ensure availability of raw materials. We expect to receive consideration for these purchase obligations in the form of materials and services. These purchase obligations do not represent all future purchases expected, but represent only those items for which we are contractually obligated. Amounts included in the table above represent our current best estimate of payments due. Actual cash payments may vary due to the variable pricing components of certain purchase obligations.
|
(E)
|
Other liabilities consists primarily of projected commitments associated with our defined benefit pension and other postretirement benefit plans, as well as $5.4 related to capital lease obligations. The liability for unrecognized tax benefits and tax-related net interest of $17.1 under FASB Accounting Standards Codification (“ASC”) 740,
Income Taxes
, is excluded, since we are unable to reasonably estimate the timing of cash settlements with the respective taxing authorities.
|
•
|
our ability to achieve synergies and cost savings related to the Ainsworth acquisition in the amounts and within the time frames currently anticipated;
|
•
|
our ability to achieve cost savings related to our cost management programs in the amounts and within the time frames currently anticipated;
|
•
|
our ability to generate sufficient cash flow to meet our cash deleveraging objectives;
|
•
|
volatility of commodity, energy, and other input costs;
|
•
|
risks associated with derivative and purchasing strategies we employ to manage commodity pricing and interest rate risks;
|
•
|
the availability of reliable transportation on acceptable terms;
|
•
|
our ability to implement and realize the full benefit of price changes, and the impact of the timing of the price changes to profits and cash flow in a particular period;
|
•
|
the success and cost of marketing and sales programs and strategies intended to promote growth in our businesses, including product innovation;
|
•
|
general competitive activity in the market, including competitors’ pricing practices and promotional spending levels;
|
•
|
the impact of food security concerns involving either our products or our competitors’ products;
|
•
|
the impact of accidents, extreme weather, and natural disasters;
|
•
|
the concentration of certain of our businesses with key customers and suppliers, including single-source suppliers of certain key raw materials and finished goods, and our ability to manage and maintain key relationships;
|
•
|
the timing and amount of capital expenditures and share repurchases;
|
•
|
impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets or changes in useful lives of other intangible assets;
|
•
|
the impact of new or changes to existing governmental laws and regulations and their application, including tariffs;
|
•
|
the outcome of tax examinations, changes in tax laws, and other tax matters;
|
•
|
foreign currency and interest rate fluctuations; and
|
•
|
risks related to other factors described under “Risk Factors” in other reports and statements we have filed with the Securities and Exchange Commission.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
|
Page No.
|
Report of Management on Internal Control Over Financial Reporting
|
|
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting
|
|
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements
|
|
Report of Management on Responsibility for Financial Reporting
|
|
Consolidated Balance Sheets at April 30, 2019 and 2018
|
|
For the years ended April 30, 2019, 2018, and 2017:
|
|
Statements of Consolidated Income
|
|
Statements of Consolidated Comprehensive Income
|
|
Statements of Consolidated Cash Flows
|
|
Statements of Consolidated Shareholders’ Equity
|
|
Notes to Consolidated Financial Statements
|
|
Mark T. Smucker
|
|
Mark R. Belgya
|
|
|
President and
|
|
Vice Chair and
|
|
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
|
Mark T. Smucker
|
|
Mark R. Belgya
|
|
|
President and
|
|
Vice Chair and
|
|
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
|
Year Ended April 30,
|
||||||||||
(Dollars in millions, except per share data)
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
$
|
7,838.0
|
|
|
$
|
7,357.1
|
|
|
$
|
7,392.3
|
|
Cost of products sold
|
4,922.3
|
|
|
4,521.0
|
|
|
4,557.0
|
|
|||
Gross Profit
|
2,915.7
|
|
|
2,836.1
|
|
|
2,835.3
|
|
|||
Selling, distribution, and administrative expenses
|
1,508.6
|
|
|
1,362.9
|
|
|
1,379.6
|
|
|||
Amortization
|
240.3
|
|
|
206.8
|
|
|
207.3
|
|
|||
Goodwill impairment charges
|
97.9
|
|
|
145.0
|
|
|
—
|
|
|||
Other intangible assets impairment charges
|
107.2
|
|
|
31.9
|
|
|
133.2
|
|
|||
Other special project costs
(A)
|
64.1
|
|
|
45.4
|
|
|
76.9
|
|
|||
Other operating expense (income) – net
|
(31.0
|
)
|
|
0.1
|
|
|
(4.3
|
)
|
|||
Operating Income
|
928.6
|
|
|
1,044.0
|
|
|
1,042.6
|
|
|||
Interest expense – net
|
(207.9
|
)
|
|
(174.1
|
)
|
|
(163.1
|
)
|
|||
Other income (expense) – net
|
(19.1
|
)
|
|
(8.9
|
)
|
|
(1.1
|
)
|
|||
Income Before Income Taxes
|
701.6
|
|
|
861.0
|
|
|
878.4
|
|
|||
Income tax expense (benefit)
|
187.2
|
|
|
(477.6
|
)
|
|
286.1
|
|
|||
Net Income
|
$
|
514.4
|
|
|
$
|
1,338.6
|
|
|
$
|
592.3
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Net Income
|
$
|
4.52
|
|
|
$
|
11.79
|
|
|
$
|
5.11
|
|
Net Income – Assuming Dilution
|
$
|
4.52
|
|
|
$
|
11.78
|
|
|
$
|
5.10
|
|
(A)
|
Other special project costs includes integration and restructuring costs. For more information, see Note 3: Integration and Restructuring Costs.
|
|
Year Ended April 30,
|
||||||||||
(Dollars in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
514.4
|
|
|
$
|
1,338.6
|
|
|
$
|
592.3
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(19.1
|
)
|
|
26.6
|
|
|
(29.9
|
)
|
|||
Cash flow hedging derivative activity, net of tax
|
(37.5
|
)
|
|
2.0
|
|
|
0.4
|
|
|||
Pension and other postretirement benefit plans activity, net of tax
|
(9.0
|
)
|
|
14.3
|
|
|
34.1
|
|
|||
Available-for-sale securities activity, net of tax
|
0.5
|
|
|
(1.2
|
)
|
|
0.4
|
|
|||
Total Other Comprehensive Income (Loss)
|
(65.1
|
)
|
|
41.7
|
|
|
5.0
|
|
|||
Comprehensive Income
|
$
|
449.3
|
|
|
$
|
1,380.3
|
|
|
$
|
597.3
|
|
|
April 30,
|
||||||
(Dollars in millions)
|
2019
|
|
2018
|
||||
ASSETS
|
|||||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
101.3
|
|
|
$
|
192.6
|
|
Trade receivables, less allowance for doubtful accounts
|
503.8
|
|
|
385.6
|
|
||
Inventories:
|
|
|
|
||||
Finished products
|
590.8
|
|
|
542.1
|
|
||
Raw materials
|
319.5
|
|
|
312.3
|
|
||
Total Inventory
|
910.3
|
|
|
854.4
|
|
||
Other current assets
|
109.8
|
|
|
122.4
|
|
||
Total Current Assets
|
1,625.2
|
|
|
1,555.0
|
|
||
Property, Plant, and Equipment
|
|
|
|
||||
Land and land improvements
|
122.1
|
|
|
120.1
|
|
||
Buildings and fixtures
|
903.2
|
|
|
812.6
|
|
||
Machinery and equipment
|
2,185.0
|
|
|
2,111.5
|
|
||
Construction in progress
|
321.8
|
|
|
212.1
|
|
||
Gross Property, Plant, and Equipment
|
3,532.1
|
|
|
3,256.3
|
|
||
Accumulated depreciation
|
(1,619.7
|
)
|
|
(1,527.2
|
)
|
||
Total Property, Plant, and Equipment
|
1,912.4
|
|
|
1,729.1
|
|
||
Other Noncurrent Assets
|
|
|
|
||||
Goodwill
|
6,310.9
|
|
|
5,942.2
|
|
||
Other intangible assets – net
|
6,718.8
|
|
|
5,916.5
|
|
||
Other noncurrent assets
|
144.0
|
|
|
158.4
|
|
||
Total Other Noncurrent Assets
|
13,173.7
|
|
|
12,017.1
|
|
||
Total Assets
|
$
|
16,711.3
|
|
|
$
|
15,301.2
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
591.0
|
|
|
$
|
512.1
|
|
Accrued compensation
|
85.0
|
|
|
79.8
|
|
||
Accrued trade marketing and merchandising
|
142.7
|
|
|
101.6
|
|
||
Dividends payable
|
96.7
|
|
|
88.6
|
|
||
Current portion of long-term debt
|
798.5
|
|
|
—
|
|
||
Short-term borrowings
|
426.0
|
|
|
144.0
|
|
||
Other current liabilities
|
201.6
|
|
|
107.7
|
|
||
Total Current Liabilities
|
2,341.5
|
|
|
1,033.8
|
|
||
Noncurrent Liabilities
|
|
|
|
||||
Long-term debt, less current portion
|
4,686.3
|
|
|
4,688.0
|
|
||
Defined benefit pensions
|
139.1
|
|
|
144.1
|
|
||
Other postretirement benefits
|
65.0
|
|
|
61.9
|
|
||
Deferred income taxes
|
1,398.6
|
|
|
1,377.2
|
|
||
Other noncurrent liabilities
|
110.3
|
|
|
105.1
|
|
||
Total Noncurrent Liabilities
|
6,399.3
|
|
|
6,376.3
|
|
||
Total Liabilities
|
8,740.8
|
|
|
7,410.1
|
|
||
Shareholders’ Equity
|
|
|
|
||||
Serial preferred shares – no par value:
Authorized – 6,000,000 shares; outstanding – none |
—
|
|
|
—
|
|
||
Common shares – no par value:
Authorized – 300,000,000 shares; outstanding – 113,742,296 at April 30, 2019, and 113,572,840
at April 30, 2018 (net of 32,755,434 and 32,924,890 treasury shares, respectively), at stated value
|
28.9
|
|
|
28.9
|
|
||
Additional capital
|
5,755.8
|
|
|
5,739.7
|
|
||
Retained income
|
2,367.6
|
|
|
2,239.2
|
|
||
Accumulated other comprehensive income (loss)
|
(181.8
|
)
|
|
(116.7
|
)
|
||
Total Shareholders’ Equity
|
7,970.5
|
|
|
7,891.1
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
16,711.3
|
|
|
$
|
15,301.2
|
|
|
Year Ended April 30,
|
||||||||||
(Dollars in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
514.4
|
|
|
$
|
1,338.6
|
|
|
$
|
592.3
|
|
Adjustments to reconcile net income to net cash provided by (used for) operations:
|
|
|
|
|
|
||||||
Depreciation
|
206.0
|
|
|
206.3
|
|
|
211.7
|
|
|||
Amortization
|
240.3
|
|
|
206.8
|
|
|
207.3
|
|
|||
Goodwill impairment charges
|
97.9
|
|
|
145.0
|
|
|
—
|
|
|||
Other intangible assets impairment charges
|
107.2
|
|
|
31.9
|
|
|
133.2
|
|
|||
Share-based compensation expense
|
20.7
|
|
|
15.4
|
|
|
22.0
|
|
|||
Gain on divestiture
|
(27.7
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income tax expense (benefit)
|
(93.5
|
)
|
|
(803.4
|
)
|
|
(79.4
|
)
|
|||
Loss on disposal of assets – net
|
4.5
|
|
|
6.6
|
|
|
4.4
|
|
|||
Other noncash adjustments – net
|
1.2
|
|
|
3.7
|
|
|
0.4
|
|
|||
Defined benefit pension contributions
|
(29.3
|
)
|
|
(39.6
|
)
|
|
(28.7
|
)
|
|||
Changes in assets and liabilities, net of effect from acquisition and divestiture:
|
|
|
|
|
|
||||||
Trade receivables
|
(53.0
|
)
|
|
54.7
|
|
|
8.9
|
|
|||
Inventories
|
(5.3
|
)
|
|
54.0
|
|
|
(10.4
|
)
|
|||
Other current assets
|
13.3
|
|
|
(5.3
|
)
|
|
8.9
|
|
|||
Accounts payable
|
43.7
|
|
|
19.0
|
|
|
2.1
|
|
|||
Accrued liabilities
|
66.7
|
|
|
20.5
|
|
|
(39.8
|
)
|
|||
Income and other taxes
|
51.8
|
|
|
(28.7
|
)
|
|
7.9
|
|
|||
Other – net
|
(17.7
|
)
|
|
(7.5
|
)
|
|
18.2
|
|
|||
Net Cash Provided by (Used for) Operating Activities
|
1,141.2
|
|
|
1,218.0
|
|
|
1,059.0
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Business acquired, net of cash acquired
|
(1,903.0
|
)
|
|
—
|
|
—
|
|
||||
Additions to property, plant, and equipment
|
(359.8
|
)
|
|
(321.9
|
)
|
|
(192.4
|
)
|
|||
Proceeds from divestiture
|
369.5
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of investment
|
—
|
|
|
—
|
|
|
40.6
|
|
|||
Proceeds from disposal of property, plant, and equipment
|
1.1
|
|
|
13.4
|
|
|
0.5
|
|
|||
Other – net
|
(32.0
|
)
|
|
30.9
|
|
|
(38.4
|
)
|
|||
Net Cash Provided by (Used for) Investing Activities
|
(1,924.2
|
)
|
|
(277.6
|
)
|
(189.7
|
)
|
||||
Financing Activities
|
|
|
|
|
|
||||||
Short-term borrowings (repayments) – net
|
282.0
|
|
|
(310.0
|
)
|
|
170.0
|
|
|||
Proceeds from long-term debt
|
1,500.0
|
|
|
799.6
|
|
|
—
|
|
|||
Repayments of long-term debt
|
(700.0
|
)
|
|
(1,050.3
|
)
|
(200.0
|
)
|
||||
Quarterly dividends paid
|
(377.9
|
)
|
|
(350.3
|
)
|
|
(339.3
|
)
|
|||
Purchase of treasury shares
|
(5.4
|
)
|
|
(7.0
|
)
|
|
(437.6
|
)
|
|||
Other – net
|
0.3
|
|
|
(4.0
|
)
|
|
0.8
|
|
|||
Net Cash Provided by (Used for) Financing Activities
|
699.0
|
|
|
(922.0
|
)
|
|
(806.1
|
)
|
|||
Effect of exchange rate changes on cash
|
(7.3
|
)
|
|
7.4
|
|
|
(6.2
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(91.3
|
)
|
|
25.8
|
|
|
57.0
|
|
|||
Cash and cash equivalents at beginning of year
|
192.6
|
|
|
166.8
|
|
|
109.8
|
|
|||
Cash and Cash Equivalents at End of Year
|
$
|
101.3
|
|
|
$
|
192.6
|
|
|
$
|
166.8
|
|
( )
|
Denotes use of cash
|
(Dollars in millions)
|
Common
Shares
Outstanding
|
|
Common
Shares |
|
Additional
Capital |
|
Retained
Income
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total Shareholders’ Equity
|
|||||||||||
Balance at May 1, 2016
|
116,306,894
|
|
|
$
|
29.1
|
|
|
$
|
5,860.1
|
|
|
$
|
1,267.7
|
|
|
$
|
(148.4
|
)
|
|
$
|
7,008.5
|
|
Net income
|
|
|
|
|
|
|
592.3
|
|
|
|
|
592.3
|
|
|||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
5.0
|
|
|
5.0
|
|
|||||||||
Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
597.3
|
|
||||||||||
Purchase of treasury shares
|
(3,147,659
|
)
|
|
(0.8
|
)
|
|
(163.6
|
)
|
|
(273.2
|
)
|
|
|
|
(437.6
|
)
|
||||||
Stock plans
|
280,318
|
|
|
0.1
|
|
|
28.1
|
|
|
|
|
|
|
28.2
|
|
|||||||
Cash dividends declared, $3.00 per common share
|
|
|
|
|
|
|
(346.5
|
)
|
|
|
|
(346.5
|
)
|
|||||||||
Other
|
|
|
|
|
0.1
|
|
|
0.2
|
|
|
|
|
0.3
|
|
||||||||
Balance at April 30, 2017
|
113,439,553
|
|
|
28.4
|
|
|
5,724.7
|
|
|
1,240.5
|
|
|
(143.4
|
)
|
|
6,850.2
|
|
|||||
Net income
|
|
|
|
|
|
|
1,338.6
|
|
|
|
|
1,338.6
|
|
|||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
41.7
|
|
|
41.7
|
|
|||||||||
Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
1,380.3
|
|
||||||||||
Purchase of treasury shares
|
(54,535
|
)
|
|
—
|
|
|
(5.8
|
)
|
|
(1.2
|
)
|
|
|
|
(7.0
|
)
|
||||||
Stock plans
|
187,822
|
|
|
—
|
|
|
21.3
|
|
|
|
|
|
|
21.3
|
|
|||||||
Cash dividends declared, $3.12 per common share
|
|
|
|
|
|
|
(353.7
|
)
|
|
|
|
(353.7
|
)
|
|||||||||
Reclassification of stranded tax effects
(A)
|
|
|
|
|
|
|
15.0
|
|
|
(15.0
|
)
|
|
—
|
|
||||||||
Other
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
|
|
|
|
—
|
|
||||||||
Balance at April 30, 2018
|
113,572,840
|
|
|
28.9
|
|
|
5,739.7
|
|
|
2,239.2
|
|
|
(116.7
|
)
|
|
7,891.1
|
|
|||||
Net income
|
|
|
|
|
|
|
514.4
|
|
|
|
|
514.4
|
|
|||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
(65.1
|
)
|
|
(65.1
|
)
|
|||||||||
Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
449.3
|
|
||||||||||
Purchase of treasury shares
|
(50,723
|
)
|
|
—
|
|
|
(5.4
|
)
|
|
—
|
|
|
|
|
(5.4
|
)
|
||||||
Stock plans
|
220,179
|
|
|
—
|
|
|
21.5
|
|
|
|
|
|
|
21.5
|
|
|||||||
Cash dividends declared, $3.40 per common share
|
|
|
|
|
|
|
(386.0
|
)
|
|
|
|
(386.0
|
)
|
|||||||||
Other
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
Balance at April 30, 2019
|
113,742,296
|
|
|
$
|
28.9
|
|
|
$
|
5,755.8
|
|
|
$
|
2,367.6
|
|
|
$
|
(181.8
|
)
|
|
$
|
7,970.5
|
|
(A)
|
During the fourth quarter of 2018, we elected to early adopt Accounting Standards Update (“ASU”) 2018-02,
Income Statement – Reporting Comprehensive Income (Topic 220)
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
, which allowed us to reclassify the stranded income tax effects resulting from the Act from accumulated other comprehensive income (loss) to retained earnings.
|
|
Year Ended April 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Share-based compensation expense included in SD&A
|
$
|
20.1
|
|
|
$
|
13.7
|
|
|
$
|
22.3
|
|
Share-based compensation expense (benefit) included in other special project costs
(A)
|
0.6
|
|
|
1.7
|
|
|
(0.3
|
)
|
|||
Total share-based compensation expense
|
$
|
20.7
|
|
|
$
|
15.4
|
|
|
$
|
22.0
|
|
Related income tax benefit
|
$
|
4.9
|
|
|
$
|
4.6
|
|
|
$
|
7.2
|
|
(A)
|
During 2017, we concluded that a portion of the performance objectives were unachievable, and therefore reversed the life-to-date compensation cost recognized. For additional information, see Note 12: Share-Based Payments.
|
Assets acquired:
|
|
|
||
Cash and cash equivalents
|
|
$
|
1.6
|
|
Trade receivables
|
|
66.3
|
|
|
Inventories
|
|
97.8
|
|
|
Other current assets
|
|
4.8
|
|
|
Property, plant, and equipment
|
|
83.8
|
|
|
Goodwill
|
|
617.8
|
|
|
Other intangible assets
|
|
1,260.6
|
|
|
Other noncurrent assets
|
|
0.3
|
|
|
Total assets acquired
|
|
$
|
2,133.0
|
|
Liabilities assumed:
|
|
|
||
Current liabilities
|
|
$
|
83.3
|
|
Deferred tax liabilities
|
|
126.1
|
|
|
Other noncurrent liabilities
|
|
19.0
|
|
|
Total liabilities assumed
|
|
$
|
228.4
|
|
Net assets acquired
|
|
$
|
1,904.6
|
|
Intangible assets with finite lives:
|
|
|
||
Customer and contractual relationships (25-year useful life)
|
|
$
|
951.0
|
|
Trademarks (5-year useful life)
|
|
1.6
|
|
|
Intangible assets with indefinite lives:
|
|
|
||
Trademarks
|
|
308.0
|
|
|
Total other intangible assets
|
|
$
|
1,260.6
|
|
|
2019
|
|
Total Costs
Incurred to Date at April 30, 2019 |
||||
Employee-related costs
|
$
|
15.5
|
|
|
$
|
15.5
|
|
Other transition and termination costs
|
16.6
|
|
|
16.6
|
|
||
Total integration costs
|
$
|
32.1
|
|
|
$
|
32.1
|
|
|
2019
|
|
2018
|
|
2017
|
|
Total Costs
Incurred to Date at April 30, 2019 |
||||||||
Employee-related costs
|
$
|
24.9
|
|
|
$
|
10.1
|
|
|
$
|
12.4
|
|
|
$
|
48.7
|
|
Other transition and termination costs
|
7.1
|
|
|
12.6
|
|
|
6.2
|
|
|
25.9
|
|
||||
Total restructuring costs
|
$
|
32.0
|
|
|
$
|
22.7
|
|
|
$
|
18.6
|
|
|
$
|
74.6
|
|
|
Year Ended April 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales:
|
|
|
|
|
|
||||||
U.S. Retail Coffee
|
$
|
2,122.3
|
|
|
$
|
2,086.8
|
|
|
$
|
2,102.3
|
|
U.S. Retail Consumer Foods
|
1,761.5
|
|
|
1,985.6
|
|
|
2,072.6
|
|
|||
U.S. Retail Pet Foods
|
2,879.5
|
|
|
2,165.3
|
|
|
2,131.8
|
|
|||
International and Away From Home
|
1,074.7
|
|
|
1,119.4
|
|
|
1,085.6
|
|
|||
Total net sales
|
$
|
7,838.0
|
|
|
$
|
7,357.1
|
|
|
$
|
7,392.3
|
|
Segment profit:
|
|
|
|
|
|
||||||
U.S. Retail Coffee
|
$
|
676.3
|
|
|
$
|
612.4
|
|
|
$
|
679.7
|
|
U.S. Retail Consumer Foods
|
406.1
|
|
|
475.3
|
|
|
457.1
|
|
|||
U.S. Retail Pet Foods
|
503.4
|
|
|
439.4
|
|
|
479.0
|
|
|||
International and Away From Home
|
198.5
|
|
|
200.1
|
|
|
190.9
|
|
|||
Total segment profit
|
$
|
1,784.3
|
|
|
$
|
1,727.2
|
|
|
$
|
1,806.7
|
|
Amortization
|
(240.3
|
)
|
|
(206.8
|
)
|
|
(207.3
|
)
|
|||
Goodwill impairment charges
|
(97.9
|
)
|
|
(145.0
|
)
|
|
—
|
|
|||
Other intangible assets impairment charges
|
(107.2
|
)
|
|
(31.9
|
)
|
|
(133.2
|
)
|
|||
Interest expense – net
|
(207.9
|
)
|
|
(174.1
|
)
|
|
(163.1
|
)
|
|||
Unallocated derivative gains (losses)
|
(54.2
|
)
|
|
37.3
|
|
|
(27.2
|
)
|
|||
Cost of products sold – special project costs
(A)
|
—
|
|
|
(3.9
|
)
|
|
(5.7
|
)
|
|||
Other special project costs
(A)
|
(64.1
|
)
|
|
(45.4
|
)
|
|
(76.9
|
)
|
|||
Corporate administrative expenses
|
(292.0
|
)
|
|
(287.5
|
)
|
|
(313.8
|
)
|
|||
Other income (expense) – net
|
(19.1
|
)
|
|
(8.9
|
)
|
|
(1.1
|
)
|
|||
Income before income taxes
|
$
|
701.6
|
|
|
$
|
861.0
|
|
|
$
|
878.4
|
|
Assets:
|
|
|
|
|
|
||||||
U.S. Retail Coffee
|
$
|
4,771.9
|
|
|
$
|
4,815.4
|
|
|
$
|
4,909.9
|
|
U.S. Retail Consumer Foods
|
2,850.8
|
|
|
3,217.5
|
|
|
3,157.2
|
|
|||
U.S. Retail Pet Foods
|
7,847.0
|
|
|
5,932.3
|
|
|
6,232.9
|
|
|||
International and Away From Home
|
1,019.5
|
|
|
1,043.9
|
|
|
1,053.4
|
|
|||
Unallocated
(B)
|
222.1
|
|
|
292.1
|
|
|
286.3
|
|
|||
Total assets
|
$
|
16,711.3
|
|
|
$
|
15,301.2
|
|
|
$
|
15,639.7
|
|
Depreciation, amortization, and impairment charges:
|
|
|
|
|
|
||||||
U.S. Retail Coffee
|
$
|
98.3
|
|
|
$
|
96.6
|
|
|
$
|
95.7
|
|
U.S. Retail Consumer Foods
|
162.4
|
|
|
80.2
|
|
|
73.2
|
|
|||
U.S. Retail Pet Foods
|
301.4
|
|
|
314.8
|
|
|
280.8
|
|
|||
International and Away From Home
|
52.8
|
|
|
57.8
|
|
|
61.9
|
|
|||
Unallocated
(C)
|
36.5
|
|
|
40.6
|
|
|
40.6
|
|
|||
Total depreciation, amortization, and impairment charges
|
$
|
651.4
|
|
|
$
|
590.0
|
|
|
$
|
552.2
|
|
Additions to property, plant, and equipment:
|
|
|
|
|
|
||||||
U.S. Retail Coffee
|
$
|
63.9
|
|
|
$
|
89.4
|
|
|
$
|
40.9
|
|
U.S. Retail Consumer Foods
|
138.9
|
|
|
168.9
|
|
|
49.7
|
|
|||
U.S. Retail Pet Foods
|
136.0
|
|
|
34.3
|
|
|
70.5
|
|
|||
International and Away From Home
|
21.0
|
|
|
29.3
|
|
|
31.3
|
|
|||
Total additions to property, plant, and equipment
|
$
|
359.8
|
|
|
$
|
321.9
|
|
|
$
|
192.4
|
|
(A)
|
Special project costs include integration and restructuring costs. For more information, see Note 3: Integration and Restructuring Costs.
|
(B)
|
Primarily represents unallocated cash and cash equivalents and corporate-held investments.
|
(C)
|
Primarily represents unallocated corporate administrative expense, mainly depreciation and software amortization.
|
|
Year Ended April 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
7,298.0
|
|
|
$
|
6,786.5
|
|
|
$
|
6,865.1
|
|
International:
|
|
|
|
|
|
||||||
Canada
|
$
|
421.9
|
|
|
$
|
431.8
|
|
|
$
|
414.3
|
|
All other international
|
118.1
|
|
|
138.8
|
|
|
112.9
|
|
|||
Total international
|
$
|
540.0
|
|
|
$
|
570.6
|
|
|
$
|
527.2
|
|
Total net sales
|
$
|
7,838.0
|
|
|
$
|
7,357.1
|
|
|
$
|
7,392.3
|
|
Assets:
|
|
|
|
|
|
||||||
United States
|
$
|
16,338.0
|
|
|
$
|
14,828.2
|
|
|
$
|
15,214.3
|
|
International:
|
|
|
|
|
|
||||||
Canada
|
$
|
362.1
|
|
|
$
|
428.7
|
|
|
$
|
380.9
|
|
All other international
|
11.2
|
|
|
44.3
|
|
|
44.5
|
|
|||
Total international
|
$
|
373.3
|
|
|
$
|
473.0
|
|
|
$
|
425.4
|
|
Total assets
|
$
|
16,711.3
|
|
|
$
|
15,301.2
|
|
|
$
|
15,639.7
|
|
Long-lived assets (excluding goodwill and other intangible assets):
|
|
|
|
|
|
||||||
United States
|
$
|
2,037.5
|
|
|
$
|
1,869.8
|
|
|
$
|
1,757.1
|
|
International:
|
|
|
|
|
|
||||||
Canada
|
$
|
18.9
|
|
|
$
|
17.4
|
|
|
$
|
13.4
|
|
All other international
|
—
|
|
|
0.3
|
|
|
0.4
|
|
|||
Total international
|
$
|
18.9
|
|
|
$
|
17.7
|
|
|
$
|
13.8
|
|
Total long-lived assets (excluding goodwill and other intangible assets)
|
$
|
2,056.4
|
|
|
$
|
1,887.5
|
|
|
$
|
1,770.9
|
|
|
Year Ended April 30,
|
|
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
|
Primary Reportable Segment
(A)
|
||||||
Coffee
|
$
|
2,479.4
|
|
|
$
|
2,469.7
|
|
|
$
|
2,492.1
|
|
|
U.S. Retail Coffee
|
Dog food
|
1,313.1
|
|
|
756.8
|
|
|
718.6
|
|
|
U.S. Retail Pet Foods
|
|||
Pet snacks
|
815.1
|
|
|
767.2
|
|
|
770.7
|
|
|
U.S. Retail Pet Foods
|
|||
Cat food
|
812.8
|
|
|
702.5
|
|
|
704.7
|
|
|
U.S. Retail Pet Foods
|
|||
Peanut butter
|
756.6
|
|
|
745.1
|
|
|
718.4
|
|
|
U.S. Retail Consumer Foods
|
|||
Fruit spreads
|
341.6
|
|
|
353.8
|
|
|
348.6
|
|
|
U.S. Retail Consumer Foods
|
|||
Frozen handheld
|
289.0
|
|
|
254.1
|
|
|
226.2
|
|
|
U.S. Retail Consumer Foods
|
|||
Shortening and oils
|
253.6
|
|
|
258.1
|
|
|
307.2
|
|
|
U.S. Retail Consumer Foods
|
|||
Baking mixes and ingredients
|
185.2
|
|
|
437.9
|
|
|
484.2
|
|
|
U.S. Retail Consumer Foods
|
|||
Portion control
|
162.7
|
|
|
160.3
|
|
|
151.9
|
|
|
International and Away From Home
|
|||
Juices and beverages
|
123.9
|
|
|
140.8
|
|
|
146.0
|
|
|
U.S. Retail Consumer Foods
|
|||
Other
|
305.0
|
|
|
310.8
|
|
|
323.7
|
|
|
International and Away From Home
|
|||
Total net sales
|
$
|
7,838.0
|
|
|
$
|
7,357.1
|
|
|
$
|
7,392.3
|
|
|
|
(A)
|
The primary reportable segment generally represents at least
75 percent
of total net sales for each respective product category.
|
|
Year Ended April 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
514.4
|
|
|
$
|
1,338.6
|
|
|
$
|
592.3
|
|
Less: Net income allocated to participating securities
|
2.6
|
|
|
6.8
|
|
|
2.8
|
|
|||
Net income allocated to common stockholders
|
$
|
511.8
|
|
|
$
|
1,331.8
|
|
|
$
|
589.5
|
|
Weighted-average common shares outstanding
|
113.1
|
|
|
113.0
|
|
|
115.5
|
|
|||
Add: Dilutive effect of stock options
|
—
|
|
—
|
|
0.1
|
|
|||||
Weighted-average common shares outstanding – assuming dilution
|
113.1
|
|
|
113.0
|
|
|
115.6
|
|
|||
Net income per common share
|
$
|
4.52
|
|
|
$
|
11.79
|
|
|
$
|
5.11
|
|
Net income per common share – assuming dilution
|
$
|
4.52
|
|
|
$
|
11.78
|
|
|
$
|
5.10
|
|
|
U.S. Retail
Coffee |
|
U.S. Retail
Consumer Foods |
|
U.S. Retail
Pet Foods |
|
International
and Away From Home |
|
Total
|
||||||||||
Balance at May 1, 2017
|
$
|
2,090.9
|
|
|
$
|
1,599.0
|
|
|
$
|
1,969.5
|
|
|
$
|
417.7
|
|
|
$
|
6,077.1
|
|
Impairment charge
(A)
|
—
|
|
|
—
|
|
|
(145.0
|
)
|
|
—
|
|
|
(145.0
|
)
|
|||||
Other
(B)
|
—
|
|
|
1.4
|
|
|
—
|
|
|
8.7
|
|
|
10.1
|
|
|||||
Balance at April 30, 2018
|
$
|
2,090.9
|
|
|
$
|
1,600.4
|
|
|
$
|
1,824.5
|
|
|
$
|
426.4
|
|
|
$
|
5,942.2
|
|
Acquisition
|
—
|
|
|
—
|
|
|
617.8
|
|
|
—
|
|
|
617.8
|
|
|||||
Divestiture
|
—
|
|
|
(144.3
|
)
|
|
—
|
|
|
—
|
|
|
(144.3
|
)
|
|||||
Impairment charge
(A)
|
—
|
|
|
(97.9
|
)
|
|
—
|
|
|
—
|
|
|
(97.9
|
)
|
|||||
Other
(B)
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|
(6.9
|
)
|
|||||
Balance at April 30, 2019
|
$
|
2,090.9
|
|
|
$
|
1,358.2
|
|
|
$
|
2,442.3
|
|
|
$
|
419.5
|
|
|
$
|
6,310.9
|
|
(A)
|
The amounts reflected in this table represent the accumulated goodwill impairment charges, as there have been
no
goodwill impairment charges recognized prior to these periods.
|
(B)
|
The amounts classified as other represent foreign currency exchange adjustments.
|
|
April 30, 2019
|
|
|
|
|
April 30, 2018
|
|
|
|
||||||||||||||
|
Acquisition
Cost |
|
Accumulated
Amortization/ Impairment Charges/ Foreign Currency Exchange |
|
Net
|
|
Acquisition
Cost |
|
Accumulated
Amortization/ Impairment Charges/ Foreign Currency Exchange |
|
Net
|
||||||||||||
Finite-lived intangible assets subject to
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer and contractual relationships
|
$
|
4,471.1
|
|
|
$
|
1,156.8
|
|
|
$
|
3,314.3
|
|
|
$
|
3,520.1
|
|
|
$
|
959.3
|
|
|
$
|
2,560.8
|
|
Patents and technology
|
168.5
|
|
|
127.4
|
|
|
41.1
|
|
|
168.5
|
|
|
114.4
|
|
|
54.1
|
|
||||||
Trademarks
|
499.9
|
|
|
166.9
|
|
|
333.0
|
|
|
556.4
|
|
|
145.0
|
|
|
411.4
|
|
||||||
Total intangible assets subject to amortization
|
$
|
5,139.5
|
|
|
$
|
1,451.1
|
|
|
$
|
3,688.4
|
|
|
$
|
4,245.0
|
|
|
$
|
1,218.7
|
|
|
$
|
3,026.3
|
|
Indefinite-lived intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks
|
$
|
3,321.1
|
|
|
$
|
290.7
|
|
|
$
|
3,030.4
|
|
|
$
|
3,078.1
|
|
|
$
|
187.9
|
|
|
$
|
2,890.2
|
|
Total other intangible assets
|
$
|
8,460.6
|
|
|
$
|
1,741.8
|
|
|
$
|
6,718.8
|
|
|
$
|
7,323.1
|
|
|
$
|
1,406.6
|
|
|
$
|
5,916.5
|
|
|
April 30, 2019
|
|
April 30, 2018
|
||||||||||||
|
Principal
Outstanding |
|
Carrying Amount
(A)
|
|
Principal
Outstanding |
|
Carrying
Amount (A) |
||||||||
2.20% Senior Notes due December 6, 2019
|
$
|
300.0
|
|
|
$
|
299.5
|
|
|
$
|
300.0
|
|
|
$
|
298.6
|
|
2.50% Senior Notes due March 15, 2020
|
500.0
|
|
|
499.0
|
|
|
500.0
|
|
|
497.8
|
|
||||
3.50% Senior Notes due October 15, 2021
|
750.0
|
|
|
768.4
|
|
|
750.0
|
|
|
775.6
|
|
||||
3.00% Senior Notes due March 15, 2022
|
400.0
|
|
|
398.0
|
|
|
400.0
|
|
|
397.3
|
|
||||
3.50% Senior Notes due March 15, 2025
|
1,000.0
|
|
|
995.2
|
|
|
1,000.0
|
|
|
994.4
|
|
||||
3.38% Senior Notes due December 15, 2027
|
500.0
|
|
|
496.2
|
|
|
500.0
|
|
|
495.8
|
|
||||
4.25% Senior Notes due March 15, 2035
|
650.0
|
|
|
643.5
|
|
|
650.0
|
|
|
643.1
|
|
||||
4.38% Senior Notes due March 15, 2045
|
600.0
|
|
|
586.0
|
|
|
600.0
|
|
|
585.4
|
|
||||
Term Loan Credit Agreement due May 14, 2021
|
800.0
|
|
|
799.0
|
|
|
—
|
|
|
—
|
|
||||
Total long-term debt
|
$
|
5,500.0
|
|
|
$
|
5,484.8
|
|
|
$
|
4,700.0
|
|
|
$
|
4,688.0
|
|
Current portion of long-term debt
|
800.0
|
|
|
798.5
|
|
|
—
|
|
|
—
|
|
||||
Total long-term debt, less current portion
|
$
|
4,700.0
|
|
|
$
|
4,686.3
|
|
|
$
|
4,700.0
|
|
|
$
|
4,688.0
|
|
(A)
|
Represents the carrying amount included in the Consolidated Balance Sheets, which includes the impact of capitalized debt issuance costs, terminated interest rate contracts, and offering discounts.
|
|
Defined Benefit Pension Plans
|
|
Other Postretirement Benefits
|
||||||||||||||||||||
Year Ended April 30,
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
$
|
2.1
|
|
|
$
|
5.2
|
|
|
$
|
12.7
|
|
|
$
|
1.9
|
|
|
$
|
2.0
|
|
|
$
|
2.3
|
|
Interest cost
|
23.2
|
|
|
21.6
|
|
|
25.3
|
|
|
2.3
|
|
|
2.1
|
|
|
2.6
|
|
||||||
Expected return on plan assets
|
(26.8
|
)
|
|
(28.8
|
)
|
|
(29.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
0.9
|
|
|
0.9
|
|
|
1.1
|
|
|
(1.3
|
)
|
|
(1.4
|
)
|
|
(1.5
|
)
|
||||||
Amortization of net actuarial loss (gain)
|
8.3
|
|
|
11.5
|
|
|
13.8
|
|
|
(0.6
|
)
|
|
(0.3
|
)
|
|
(0.2
|
)
|
||||||
Curtailment loss (gain)
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlement loss (gain)
|
7.1
|
|
|
2.3
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Termination benefit cost
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
15.1
|
|
|
$
|
12.7
|
|
|
$
|
22.9
|
|
|
$
|
2.5
|
|
|
$
|
2.4
|
|
|
$
|
3.2
|
|
|
Defined Benefit Pension Plans
|
|
Other Postretirement Benefits
|
||||||||||||
April 30,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
639.7
|
|
|
$
|
677.3
|
|
|
$
|
65.9
|
|
|
$
|
70.7
|
|
Service cost
|
2.1
|
|
|
5.2
|
|
|
1.9
|
|
|
2.0
|
|
||||
Interest cost
|
23.2
|
|
|
21.6
|
|
|
2.3
|
|
|
2.1
|
|
||||
Amendments
|
—
|
|
|
—
|
|
|
2.0
|
|
|
0.2
|
|
||||
Actuarial loss (gain)
|
17.0
|
|
|
(10.8
|
)
|
|
2.8
|
|
|
(5.5
|
)
|
||||
Benefits paid
|
(33.9
|
)
|
|
(36.0
|
)
|
|
(4.7
|
)
|
|
(4.3
|
)
|
||||
Foreign currency translation adjustments
|
(3.6
|
)
|
|
5.8
|
|
|
(0.3
|
)
|
|
0.7
|
|
||||
Curtailment
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlement
|
(27.7
|
)
|
|
(23.4
|
)
|
|
—
|
|
|
—
|
|
||||
Termination benefit cost
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Benefit obligation at end of year
|
$
|
615.5
|
|
|
$
|
639.7
|
|
|
$
|
70.1
|
|
|
$
|
65.9
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
497.0
|
|
|
$
|
489.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
19.6
|
|
|
21.5
|
|
|
—
|
|
|
—
|
|
||||
Company contributions
|
29.3
|
|
|
39.6
|
|
|
4.7
|
|
|
4.3
|
|
||||
Benefits paid
|
(33.9
|
)
|
|
(36.0
|
)
|
|
(4.7
|
)
|
|
(4.3
|
)
|
||||
Settlement
|
(27.7
|
)
|
|
(23.4
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign currency translation adjustments
|
(4.0
|
)
|
|
6.1
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
$
|
480.3
|
|
|
$
|
497.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status of the plans
|
$
|
(135.2
|
)
|
|
$
|
(142.7
|
)
|
|
$
|
(70.1
|
)
|
|
$
|
(65.9
|
)
|
Defined benefit pensions
|
$
|
(139.1
|
)
|
|
$
|
(144.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Other noncurrent assets
|
8.0
|
|
|
9.5
|
|
|
—
|
|
|
—
|
|
||||
Accrued compensation
|
(4.1
|
)
|
|
(8.1
|
)
|
|
(5.1
|
)
|
|
(4.0
|
)
|
||||
Other postretirement benefits
|
—
|
|
|
—
|
|
|
(65.0
|
)
|
|
(61.9
|
)
|
||||
Net benefit liability
|
$
|
(135.2
|
)
|
|
$
|
(142.7
|
)
|
|
$
|
(70.1
|
)
|
|
$
|
(65.9
|
)
|
|
Defined Benefit Pension Plans
|
|
Other Postretirement Benefits
|
||||||||||||
April 30,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net actuarial gain (loss)
|
$
|
(157.2
|
)
|
|
$
|
(150.9
|
)
|
|
$
|
10.2
|
|
|
$
|
13.6
|
|
Prior service credit (cost)
|
(3.5
|
)
|
|
(4.7
|
)
|
|
5.8
|
|
|
9.1
|
|
||||
Total recognized in accumulated other comprehensive income (loss)
|
$
|
(160.7
|
)
|
|
$
|
(155.6
|
)
|
|
$
|
16.0
|
|
|
$
|
22.7
|
|
|
Defined Benefit Pension Plans
|
|
Other Postretirement Benefits
|
||||||||
April 30,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
U.S. plans:
|
|
|
|
|
|
|
|
||||
Discount rate
|
3.99
|
%
|
|
4.17
|
%
|
|
3.91
|
%
|
|
4.13
|
%
|
Rate of compensation increase
|
3.56
|
|
|
3.59
|
|
|
—
|
|
|
—
|
|
Canadian plans:
|
|
|
|
|
|
|
|
||||
Discount rate
|
3.21
|
%
|
|
3.57
|
%
|
|
3.19
|
%
|
|
3.55
|
%
|
Rate of compensation increase
|
3.00
|
|
|
3.00
|
|
|
—
|
|
|
—
|
|
|
One Percentage Point
|
||||||
|
Increase
|
|
Decrease
|
||||
Effect on total service and interest cost components
|
$
|
—
|
|
|
$
|
—
|
|
Effect on benefit obligation
|
1.1
|
|
|
1.1
|
|
|
Defined Benefit Pension Plans
|
|
Other Postretirement Benefits
|
||||||||||||
Year Ended April 30,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Benefit obligation at end of year
|
$
|
84.8
|
|
|
$
|
87.6
|
|
|
$
|
7.1
|
|
|
$
|
7.3
|
|
Fair value of plan assets at end of year
|
92.1
|
|
|
96.4
|
|
|
—
|
|
|
—
|
|
||||
Funded status of the plans
|
$
|
7.3
|
|
|
$
|
8.8
|
|
|
$
|
(7.1
|
)
|
|
$
|
(7.3
|
)
|
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
2.7
|
|
|
2.4
|
|
|
0.2
|
|
|
0.3
|
|
||||
Expected return on plan assets
|
(4.8
|
)
|
|
(5.0
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of net actuarial loss (gain)
|
0.9
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
$
|
(1.1
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
Changes in plan assets:
|
|
|
|
|
|
|
|
||||||||
Company contributions
|
$
|
0.1
|
|
|
$
|
0.9
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
Benefits paid
|
(6.5
|
)
|
|
(6.8
|
)
|
|
(0.5
|
)
|
|
(0.5
|
)
|
||||
Actual return on plan assets
|
6.1
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency translation
|
(3.9
|
)
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
April 30,
|
||||||
|
2019
|
|
2018
|
||||
Accumulated benefit obligation for all pension plans
|
$
|
605.6
|
|
|
$
|
627.9
|
|
Plans with an accumulated benefit obligation in excess of plan assets:
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
521.5
|
|
|
$
|
541.3
|
|
Fair value of plan assets
|
388.2
|
|
|
400.6
|
|
||
Plans with a projected benefit obligation in excess of plan assets:
|
|
|
|
||||
Projected benefit obligation
|
$
|
531.4
|
|
|
$
|
552.9
|
|
Fair value of plan assets
|
388.2
|
|
|
400.6
|
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Plan Assets At April 30, 2019
|
||||||||
Cash and cash equivalents
(A)
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S.
(B)
|
65.7
|
|
|
1.8
|
|
|
—
|
|
|
67.5
|
|
||||
International
(C)
|
74.3
|
|
|
9.2
|
|
|
—
|
|
|
83.5
|
|
||||
Fixed-income securities:
|
|
|
|
|
|
|
|
||||||||
Bonds
(D)
|
220.6
|
|
|
—
|
|
|
—
|
|
|
220.6
|
|
||||
Fixed income
(E)
|
51.8
|
|
|
—
|
|
|
—
|
|
|
51.8
|
|
||||
Other types of investments
(F)
|
—
|
|
|
46.3
|
|
|
—
|
|
|
46.3
|
|
||||
Total financial assets measured at fair value
|
$
|
412.9
|
|
|
$
|
57.3
|
|
|
$
|
—
|
|
|
$
|
470.2
|
|
Total financial assets measured at net asset value
(G)
|
|
|
|
|
|
|
|
|
|
10.1
|
|
||||
Total plan assets
|
|
|
|
|
|
|
|
|
|
$
|
480.3
|
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Plan Assets At April 30, 2018
|
||||||||
Cash and cash equivalents
(A)
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S.
(B)
|
94.8
|
|
|
1.9
|
|
|
—
|
|
|
96.7
|
|
||||
International
(C)
|
73.2
|
|
|
9.7
|
|
|
—
|
|
|
82.9
|
|
||||
Fixed-income securities:
|
|
|
|
|
|
|
|
||||||||
Bonds
(D)
|
231.8
|
|
|
—
|
|
|
—
|
|
|
231.8
|
|
||||
Fixed income
(E)
|
53.0
|
|
|
—
|
|
|
—
|
|
|
53.0
|
|
||||
Other types of investments
(F)
|
—
|
|
|
16.8
|
|
|
3.2
|
|
|
20.0
|
|
||||
Total financial assets measured at fair value
|
$
|
456.5
|
|
|
$
|
28.4
|
|
|
$
|
3.2
|
|
|
$
|
488.1
|
|
Total financial assets measured at net asset value
(G)
|
|
|
|
|
|
|
|
|
|
8.9
|
|
||||
Total plan assets
|
|
|
|
|
|
|
|
|
|
$
|
497.0
|
|
(A)
|
This category includes money market holdings with maturities of
three months or less
and are classified as Level 1 assets. Based on the short-term nature of these assets, carrying value approximates fair value.
|
(B)
|
This category is invested in a diversified portfolio of common stocks and index funds that primarily invest in U.S. stocks with broad market capitalization ranges similar to those found in the S&P 500 Index and/or the various Russell Indices and are traded on active exchanges. The Level 1 assets are valued using quoted market prices for identical securities in active markets. The Level 2 asset is comprised of a pooled fund that consists of equity securities traded on active exchanges.
|
(C)
|
This category is invested primarily in common stocks and other equity securities traded on active exchanges of foreign issuers located outside the U.S. The fund invests primarily in developed countries, but may also invest in emerging markets. The Level 1 assets are valued using quoted market prices for identical securities in active markets. The Level 2 asset is comprised of a pooled fund that consists of equity securities traded on active exchanges.
|
(D)
|
This category is primarily comprised of bond funds, which seek to duplicate the return characteristics of high-quality U.S. and foreign corporate bonds with a duration range of 10 to
13 years
, as well as various U.S. Treasury Separate Trading of Registered Interest and
|
(E)
|
This category is comprised of fixed-income funds that invest primarily in government-related bonds of non-U.S. issuers and include investments in the Canadian, as well as emerging markets. The Level 1 assets are valued using quoted market prices for identical securities in active markets.
|
(F)
|
This category is comprised of a real estate fund whereby the underlying investments are contained in the Canadian market, a common collective trust fund investing in direct commercial property funds, and a private limited investment partnership in 2018. The real estate fund and the collective trust fund investing in direct commercial property are classified as a Level 2 asset, whereby the underlying securities are valued utilizing quoted market prices for identical securities in active markets and based on the quoted market prices of the underlying investments in the common collective trust, respectively. The private investment limited partnership in 2018 is classified as a Level 3 asset. The investments in this partnership were valued at estimated fair value based on audited financial statements received from the general partner.
|
(G)
|
This category is comprised of a private equity fund that consists primarily of limited partnership interests in corporate finance and venture capital funds, as well as a private limited investment partnership. The fair value estimates of the private equity fund and private limited investment partnership are based on the underlying funds’ net asset values further as a practical expedient equivalent to the Company’s defined benefit plan’s ownership interest in partners’ capital, whereby a proportionate share of the net assets is attributed and further corroborated by our review. The private equity fund and private limited investment partnership are non-redeemable, and the return of principal is based on the liquidation of the underlying assets. In accordance with ASU 2015-07, the private equity fund and private limited investment partnership are removed from the total financial assets measured at fair value and disclosed separately.
|
|
April 30, 2019
|
||||||||||||||
|
Other
Current Assets |
|
Other
Current Liabilities |
|
Other
Noncurrent Assets |
|
Other
Noncurrent Liabilities |
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
49.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total derivatives designated as hedging instruments
|
$
|
—
|
|
|
$
|
49.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
4.8
|
|
|
$
|
25.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency exchange contracts
|
1.4
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
Total derivative not designated as hedging instruments
|
$
|
6.2
|
|
|
$
|
26.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total derivative instruments
|
$
|
6.2
|
|
|
$
|
75.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
April 30, 2018
|
||||||||||||||
|
Other
Current Assets |
|
Other
Current Liabilities |
|
Other
Noncurrent Assets |
|
Other
Noncurrent Liabilities |
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
14.8
|
|
|
$
|
6.8
|
|
|
$
|
0.4
|
|
|
$
|
0.2
|
|
Foreign currency exchange contracts
|
2.2
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
||||
Total derivative instruments
|
$
|
17.0
|
|
|
$
|
7.5
|
|
|
$
|
0.4
|
|
|
$
|
0.2
|
|
|
Year Ended April 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Gains (losses) recognized in other comprehensive income (loss)
|
$
|
(49.1
|
)
|
|
$
|
2.7
|
|
|
$
|
—
|
|
Less: Gains (losses) reclassified from accumulated other comprehensive
income (loss) to interest expense
|
(0.4
|
)
|
|
(0.5
|
)
|
|
(0.6
|
)
|
|||
Change in accumulated other comprehensive income (loss)
|
$
|
(48.7
|
)
|
|
$
|
3.2
|
|
|
$
|
0.6
|
|
|
Year Ended April 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Gains (losses) on commodity contracts
|
$
|
(98.6
|
)
|
|
$
|
6.5
|
|
|
$
|
(45.2
|
)
|
Gains (losses) on foreign currency exchange contracts
|
3.0
|
|
|
(5.9
|
)
|
|
9.8
|
|
|||
Total gains (losses) recognized in costs of products sold
|
$
|
(95.6
|
)
|
|
$
|
0.6
|
|
|
$
|
(35.4
|
)
|
|
Year Ended April 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net gains (losses) on mark-to-market valuation of unallocated derivative positions
|
$
|
(95.6
|
)
|
|
$
|
0.6
|
|
|
$
|
(35.4
|
)
|
Less: Net gains (losses) on derivative positions reclassified to segment operating profit
|
(41.4
|
)
|
|
(36.7
|
)
|
|
(8.2
|
)
|
|||
Unallocated derivative gains (losses)
|
$
|
(54.2
|
)
|
|
$
|
37.3
|
|
|
$
|
(27.2
|
)
|
|
Year Ended April 30,
|
||||||
|
2019
|
|
2018
|
||||
Commodity contracts
|
$
|
544.8
|
|
|
$
|
658.0
|
|
Foreign currency exchange contracts
|
144.9
|
|
|
122.1
|
|
||
Interest rate contracts
|
800.0
|
|
|
—
|
|
|
April 30, 2019
|
|
April 30, 2018
|
||||||||||||
|
Carrying
Amount
|
|
Fair Value |
|
Carrying
Amount
|
|
Fair Value |
||||||||
Marketable securities and other investments
|
$
|
40.9
|
|
|
$
|
40.9
|
|
|
$
|
45.8
|
|
|
$
|
45.8
|
|
Derivative financial instruments – net
|
(68.9
|
)
|
|
(68.9
|
)
|
|
9.7
|
|
|
9.7
|
|
||||
Total long-term debt
|
(5,484.8
|
)
|
|
(5,504.0
|
)
|
|
(4,688.0
|
)
|
|
(4,579.8
|
)
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Fair Value at April 30, 2019
|
||||||||
Marketable securities and other investments:
(A)
|
|
|
|
|
|
|
|
||||||||
Equity mutual funds
|
$
|
8.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.7
|
|
Municipal obligations
|
—
|
|
|
31.7
|
|
|
—
|
|
|
31.7
|
|
||||
Money market funds
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||
Derivative financial instruments:
(B)
|
|
|
|
|
|
|
|
||||||||
Commodity contracts – net
|
(20.7
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(21.0
|
)
|
||||
Foreign currency exchange contracts – net
|
(0.1
|
)
|
|
1.3
|
|
|
—
|
|
|
1.2
|
|
||||
Interest rate contracts
|
—
|
|
|
(49.1
|
)
|
|
—
|
|
|
(49.1
|
)
|
||||
Total long-term debt
(C)
|
(4,646.6
|
)
|
|
(857.4
|
)
|
|
—
|
|
|
(5,504.0
|
)
|
||||
Total financial instruments measured at fair value
|
$
|
(4,658.2
|
)
|
|
$
|
(873.8
|
)
|
|
$
|
—
|
|
|
$
|
(5,532.0
|
)
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Fair Value at April 30, 2018
|
||||||||
Marketable securities and other investments:
(A)
|
|
|
|
|
|
|
|
||||||||
Equity mutual funds
|
$
|
9.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.3
|
|
Municipal obligations
|
—
|
|
|
36.1
|
|
|
—
|
|
|
36.1
|
|
||||
Money market funds
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||
Derivative financial instruments:
(B)
|
|
|
|
|
|
|
|
||||||||
Commodity contracts – net
|
7.2
|
|
|
1.0
|
|
|
—
|
|
|
8.2
|
|
||||
Foreign currency exchange contracts – net
|
0.1
|
|
|
1.4
|
|
|
—
|
|
|
1.5
|
|
||||
Total long-term debt
(C)
|
(4,579.8
|
)
|
|
—
|
|
|
—
|
|
|
(4,579.8
|
)
|
||||
Total financial instruments measured at fair value
|
$
|
(4,562.8
|
)
|
|
$
|
38.5
|
|
|
$
|
—
|
|
|
$
|
(4,524.3
|
)
|
(A)
|
Marketable securities and other investments consist of funds maintained for the payment of benefits associated with nonqualified retirement plans. The funds include equity securities listed in active markets, municipal obligations valued by a third-party using valuation techniques that utilize inputs that are derived principally from or corroborated by observable market data, and money market funds with maturities of
three months or less
. Based on the short-term nature of these money market funds, carrying value approximates fair value. As of
April 30, 2019
, our municipal obligations are scheduled to mature as follows:
$0.4
in
2020
,
$1.0
in
2021
,
$0.5
in
2022
,
$1.5
in
2023
, and the remaining
$28.3
in
2024
and beyond. For additional information, see Marketable Securities and Other Investments in Note 1: Accounting Policies.
|
(B)
|
Level 1 commodity and foreign currency exchange derivatives are valued using quoted market prices for identical instruments in active markets. Level 2 commodity and foreign currency exchange derivatives are valued using quoted prices for similar assets or liabilities in active markets. The Level 2 interest rate contracts are valued using standard valuation techniques, the income approach, and observable Level 2 market expectations at the measurement date to convert future amounts to a single discounted present value. Level 2 inputs for the valuation of the interest rate contracts are limited to prices that are observable for the asset or liability. For additional information, see Note 10: Derivative Financial Instruments.
|
(C)
|
Long-term debt is composed of public Senior Notes classified as Level 1 and the Term Loan classified as Level 2. The public Senior Notes are traded in an active secondary market and valued using quoted prices. The fair value of the Term Loan is based on the net present value of each interest and principal payment calculated utilizing an interest rate derived from an estimated yield curve obtained from independent pricing sources for similar types of term loan borrowing arrangements. For additional information, see Note 8: Debt and Financing Arrangements.
|
|
Number of
Stock Options
|
|
Weighted-Average
Exercise Price |
|||
Outstanding at May 1, 2018
|
823,332
|
|
|
$
|
113.20
|
|
Exercised
|
—
|
|
|
—
|
|
|
Cancelled
|
423,332
|
|
|
113.16
|
|
|
Outstanding at April 30, 2019
|
400,000
|
|
|
$
|
113.24
|
|
Exercisable at April 30, 2019
|
400,000
|
|
|
$
|
113.24
|
|
|
Restricted
Shares
and Deferred
Stock Units
|
|
Weighted-
Average Grant Date Fair Value |
|
Performance
Units
|
|
Weighted-
Average Conversion
Date Fair Value
|
||||||
Outstanding at May 1, 2018
|
542,358
|
|
|
$
|
122.39
|
|
|
84,051
|
|
|
$
|
103.86
|
|
Granted
|
194,932
|
|
|
104.33
|
|
|
85,154
|
|
|
123.68
|
|
||
Converted
|
84,051
|
|
|
103.86
|
|
|
(84,051
|
)
|
|
103.86
|
|
||
Vested
|
(158,914
|
)
|
|
107.16
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(78,851
|
)
|
|
118.02
|
|
|
—
|
|
|
—
|
|
||
Outstanding at April 30, 2019
|
583,576
|
|
|
$
|
118.44
|
|
|
85,154
|
|
|
$
|
123.68
|
|
Year Ended April 30,
|
Restricted
Shares
and Deferred
Stock Units
|
|
Weighted-
Average Grant Date Fair Value |
|
Performance
Units
|
|
Weighted-
Average Conversion
Date Fair Value
|
||||||
2019
|
194,932
|
|
|
$
|
104.33
|
|
|
85,154
|
|
|
$
|
123.68
|
|
2018
|
136,127
|
|
|
126.80
|
|
|
84,051
|
|
|
103.86
|
|
||
2017
|
180,997
|
|
|
133.92
|
|
|
73,701
|
|
|
126.80
|
|
|
Year Ended April 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
$
|
659.2
|
|
|
$
|
828.6
|
|
|
$
|
836.8
|
|
Foreign
|
42.4
|
|
|
32.4
|
|
|
41.6
|
|
|||
Income before income taxes
|
$
|
701.6
|
|
|
$
|
861.0
|
|
|
$
|
878.4
|
|
|
Year Ended April 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
227.9
|
|
|
$
|
277.9
|
|
|
$
|
325.1
|
|
Foreign
|
16.0
|
|
|
7.9
|
|
|
11.0
|
|
|||
State and local
|
36.8
|
|
|
40.0
|
|
|
29.4
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(73.6
|
)
|
|
(802.3
|
)
|
|
(78.3
|
)
|
|||
Foreign
|
(0.1
|
)
|
|
0.5
|
|
|
1.6
|
|
|||
State and local
|
(19.8
|
)
|
|
(1.6
|
)
|
|
(2.7
|
)
|
|||
Total income tax expense (benefit)
|
$
|
187.2
|
|
|
$
|
(477.6
|
)
|
|
$
|
286.1
|
|
|
Year Ended April 30,
|
||||||||||
(Percent of Pre-tax Income)
|
2019
|
|
2018
|
|
2017
|
||||||
Statutory federal income tax rate
|
21.0
|
%
|
|
30.4
|
%
|
|
35.0
|
%
|
|||
Tax reform – net impact on U.S. deferred tax assets and liabilities
|
—
|
|
|
(92.0
|
)
|
|
—
|
|
|||
Tax reform – transition tax
|
(0.5
|
)
|
|
3.0
|
|
|
—
|
|
|||
Goodwill impairment charges
|
2.9
|
|
|
5.5
|
|
|
—
|
|
|||
Sale of the U.S. baking business
|
2.4
|
|
|
—
|
|
|
—
|
|
|||
State and local income taxes
|
2.7
|
|
|
1.9
|
|
|
2.1
|
|
|||
Domestic manufacturing deduction
|
—
|
|
|
(3.0
|
)
|
|
(3.7
|
)
|
|||
Deferred tax benefit from integration
|
(2.4
|
)
|
|
—
|
|
|
—
|
|
|||
Other items – net
|
0.6
|
|
|
(1.3
|
)
|
|
(0.8
|
)
|
|||
Effective income tax rate
|
26.7
|
%
|
|
(55.5
|
)%
|
|
32.6
|
%
|
|||
Income taxes paid
|
$
|
250.9
|
|
|
$
|
336.8
|
|
|
$
|
367.2
|
|
|
April 30,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
$
|
1,428.3
|
|
|
$
|
1,393.6
|
|
Property, plant, and equipment
|
120.5
|
|
|
98.5
|
|
||
Other
|
13.4
|
|
|
14.2
|
|
||
Total deferred tax liabilities
|
$
|
1,562.2
|
|
|
$
|
1,506.3
|
|
Deferred tax assets:
|
|
|
|
||||
Post-employment and other employee benefits
|
$
|
84.9
|
|
|
$
|
75.5
|
|
Tax credit and loss carryforwards
|
10.0
|
|
|
0.2
|
|
||
Intangible assets
|
17.2
|
|
|
18.8
|
|
||
Inventory
|
7.6
|
|
|
5.9
|
|
||
Property, plant, and equipment
|
7.0
|
|
|
6.4
|
|
||
Hedging transactions
|
15.6
|
|
|
0.9
|
|
||
Other
|
24.8
|
|
|
24.3
|
|
||
Total deferred tax assets
|
$
|
167.1
|
|
|
$
|
132.0
|
|
Valuation allowance
|
(3.5
|
)
|
|
(2.9
|
)
|
||
Total deferred tax assets, less allowance
|
$
|
163.6
|
|
|
$
|
129.1
|
|
Net deferred tax liability
|
$
|
1,398.6
|
|
|
$
|
1,377.2
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at May 1,
|
$
|
32.3
|
|
|
$
|
40.4
|
|
|
$
|
46.3
|
|
Increases:
|
|
|
|
|
|
||||||
Current year tax positions
|
0.9
|
|
|
1.1
|
|
|
0.7
|
|
|||
Prior year tax positions
|
0.3
|
|
|
0.5
|
|
|
1.2
|
|
|||
Acquired businesses
|
—
|
|
|
—
|
|
|
—
|
|
|||
Decreases:
|
|
|
|
|
|
||||||
Prior year tax positions
|
—
|
|
|
—
|
|
|
0.9
|
|
|||
Settlement with tax authorities
|
9.0
|
|
|
3.0
|
|
|
1.1
|
|
|||
Expiration of statute of limitations periods
|
9.5
|
|
|
6.7
|
|
|
5.8
|
|
|||
Balance at April 30,
|
$
|
15.0
|
|
|
$
|
32.3
|
|
|
$
|
40.4
|
|
|
Foreign
Currency Translation Adjustment |
|
Net Gains (Losses)
on Cash Flow Hedging Derivatives (A) |
|
Pension
and Other Postretirement Liabilities (B) |
|
Unrealized
Gain (Loss) on Available-for-Sale Securities |
|
Accumulated
Other Comprehensive Income (Loss) |
||||||||||
Balance at May 1, 2016
|
$
|
(13.1
|
)
|
|
$
|
(4.8
|
)
|
|
$
|
(134.1
|
)
|
|
$
|
3.6
|
|
|
$
|
(148.4
|
)
|
Reclassification adjustments
|
—
|
|
|
0.6
|
|
|
13.2
|
|
|
—
|
|
|
13.8
|
|
|||||
Current period credit (charge)
|
(29.9
|
)
|
|
—
|
|
|
39.6
|
|
|
0.6
|
|
|
10.3
|
|
|||||
Income tax benefit (expense)
|
—
|
|
|
(0.2
|
)
|
|
(18.7
|
)
|
|
(0.2
|
)
|
|
(19.1
|
)
|
|||||
Balance at April 30, 2017
|
$
|
(43.0
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(100.0
|
)
|
|
$
|
4.0
|
|
|
$
|
(143.4
|
)
|
Reclassification adjustments
|
—
|
|
|
0.5
|
|
|
10.7
|
|
|
—
|
|
|
11.2
|
|
|||||
Current period credit (charge)
|
26.6
|
|
|
2.7
|
|
|
9.2
|
|
|
(1.7
|
)
|
|
36.8
|
|
|||||
Income tax benefit (expense)
|
—
|
|
|
(1.2
|
)
|
|
(5.6
|
)
|
|
0.5
|
|
|
(6.3
|
)
|
|||||
Reclassification of stranded tax effects
(C)
|
—
|
|
|
(0.5
|
)
|
|
(15.3
|
)
|
|
0.8
|
|
|
(15.0
|
)
|
|||||
Balance at April 30, 2018
|
$
|
(16.4
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
(101.0
|
)
|
|
$
|
3.6
|
|
|
$
|
(116.7
|
)
|
Reclassification adjustments
|
—
|
|
|
0.4
|
|
|
7.3
|
|
|
—
|
|
|
7.7
|
|
|||||
Current period credit (charge)
|
(19.1
|
)
|
|
(49.1
|
)
|
|
(19.1
|
)
|
|
0.7
|
|
|
(86.6
|
)
|
|||||
Income tax benefit (expense)
|
—
|
|
|
11.2
|
|
|
2.8
|
|
|
(0.2
|
)
|
|
13.8
|
|
|||||
Balance at April 30, 2019
|
$
|
(35.5
|
)
|
|
$
|
(40.4
|
)
|
|
$
|
(110.0
|
)
|
|
$
|
4.1
|
|
|
$
|
(181.8
|
)
|
(A)
|
The reclassification from accumulated other comprehensive income (loss) to interest expense was related to terminated interest rate contracts. The current period charge in 2019 relates to the unrealized losses on the interest rate contracts entered into in November 2018 and June 2018. The prior year credit relates to the gain on the interest rate contract terminated in 2018. For additional information, see Note 10: Derivative Financial Instruments.
|
(B)
|
Amortization of net losses and prior service costs was reclassified from accumulated other comprehensive income (loss) to other income (expense) – net.
|
(C)
|
During 2018, we adopted ASU 2018-02,
Income Statement – Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,
which allowed us to reclassify the stranded income tax effects resulting from the Act from accumulated other comprehensive income (loss) to retained earnings.
|
•
|
any matter that relates to or would result in the dissolution or liquidation of the Company;
|
•
|
the adoption of any amendment to the Articles or Amended Regulations, or the adoption of amended Articles, other than the adoption of any amendment or amended Articles that increases the number of votes to which holders of our common shares are entitled or expands the matters to which time-phased voting applies;
|
•
|
any proposal or other action to be taken by our shareholders relating to any successor plan to the Rights Agreement, dated as of May 20, 2009, between the Company and Computershare Trust Company, N.A.;
|
•
|
any matter relating to any stock option plan, stock purchase plan, executive compensation plan, executive benefit plan, or other similar plan, arrangement, or agreement;
|
•
|
the adoption of any agreement or plan of or for the merger, consolidation, or majority share acquisition of us or any of our subsidiaries with or into any other person, whether domestic or foreign, corporate or noncorporate, or the authorization of the lease, sale, exchange, transfer, or other disposition of all, or substantially all, of our assets;
|
•
|
any matter submitted to our shareholders pursuant to Article Fifth (which relates to procedures applicable to certain business combinations) or Article Seventh (which relates to procedures applicable to certain proposed acquisitions of specified percentages of our outstanding common shares) of the Articles, as they may be further amended, or any issuance of our common shares for which shareholder approval is required by applicable stock exchange rules; and
|
•
|
any matter relating to the issuance of our common shares or the repurchase of our common shares that the Board determines is required or appropriate to be submitted to our shareholders under the Ohio Revised Code or applicable stock exchange rules.
|
•
|
common shares for which there has not been a change in beneficial ownership in the past four years; or
|
•
|
common shares received through our various equity plans that have not been sold or otherwise transferred.
|
|
2019
|
||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Net Sales
|
$
|
1,902.5
|
|
|
$
|
2,021.5
|
|
|
$
|
2,011.9
|
|
|
$
|
1,902.1
|
|
Gross Profit
|
678.2
|
|
|
771.3
|
|
|
773.8
|
|
|
692.4
|
|
||||
Net Income
|
133.0
|
|
|
188.5
|
|
|
121.4
|
|
|
71.5
|
|
||||
Earnings per Common Share
(A)
:
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
1.17
|
|
|
$
|
1.66
|
|
|
$
|
1.07
|
|
|
$
|
0.63
|
|
Net Income – Assuming Dilution
|
$
|
1.17
|
|
|
$
|
1.66
|
|
|
$
|
1.07
|
|
|
$
|
0.63
|
|
Dividends Declared per Common Share
|
$
|
0.85
|
|
|
$
|
0.85
|
|
|
$
|
0.85
|
|
|
$
|
0.85
|
|
|
2018
|
||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Net Sales
|
$
|
1,748.9
|
|
|
$
|
1,923.6
|
|
|
$
|
1,903.3
|
|
|
$
|
1,781.3
|
|
Gross Profit
|
662.1
|
|
|
755.0
|
|
|
728.5
|
|
|
690.5
|
|
||||
Net Income
|
126.8
|
|
|
194.6
|
|
|
831.3
|
|
|
185.9
|
|
||||
Earnings per Common Share
(A)
:
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
1.12
|
|
|
$
|
1.71
|
|
|
$
|
7.32
|
|
|
$
|
1.64
|
|
Net Income – Assuming Dilution
|
$
|
1.12
|
|
|
$
|
1.71
|
|
|
$
|
7.32
|
|
|
$
|
1.64
|
|
Dividends Declared per Common Share
|
$
|
0.78
|
|
|
$
|
0.78
|
|
|
$
|
0.78
|
|
|
$
|
0.78
|
|
(A)
|
Annual net income per common share may not equal the sum of the individual quarters due to differences in the average number of shares outstanding during the respective periods, primarily due to share repurchases.
|
(a)(1)
|
|
Financial Statements:
|
|
|
See the Index to Financial Statements on page 34 of this Annual Report.
|
(a)(2)
|
|
Financial Statement Schedules:
|
|
|
Financial statement schedules are omitted because they are not applicable or because the information required is set forth in the Consolidated Financial Statements or notes thereto.
|
(a)(3)
|
|
Exhibits:
|
|
|
The following exhibits are either attached or incorporated herein by reference to another filing with the U.S. Securities and Exchange Commission.
|
Exhibit Number
|
Exhibit Description
|
|
Exhibit Number
|
Exhibit Description
|
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
Date: June 17, 2019
|
The J. M. Smucker Company
|
|
|
|
/s/ Mark R. Belgya
|
|
By:
|
Mark R. Belgya
|
|
|
Vice Chair and Chief Financial Officer
|
*
|
|
|
|
|
Mark T. Smucker
|
|
President and Chief Executive Officer and Director
(Principal Executive Officer)
|
|
June 17, 2019
|
/s/ Mark R. Belgya
|
|
|
|
|
Mark R. Belgya
|
|
Vice Chair and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
June 17, 2019
|
*
|
|
|
|
|
Timothy P. Smucker
|
|
Chairman Emeritus
|
|
June 17, 2019
|
*
|
|
|
|
|
Richard K. Smucker
|
|
Executive Chairman
|
|
June 17, 2019
|
*
|
|
|
|
|
Kathryn W. Dindo
|
|
Director
|
|
June 17, 2019
|
*
|
|
|
|
|
Paul J. Dolan
|
|
Director
|
|
June 17, 2019
|
*
|
|
|
|
|
Jay L. Henderson
|
|
Director
|
|
June 17, 2019
|
*
|
|
|
|
|
Elizabeth Valk Long
|
|
Director
|
|
June 17, 2019
|
*
|
|
|
|
|
Gary A. Oatey
|
|
Director
|
|
June 17, 2019
|
*
|
|
|
|
|
Kirk L. Perry
|
|
Director
|
|
June 17, 2019
|
*
|
|
|
|
|
Sandra Pianalto
|
|
Director
|
|
June 17, 2019
|
*
|
|
|
|
|
Nancy Lopez Russell
|
|
Director
|
|
June 17, 2019
|
*
|
|
|
|
|
Alex Shumate
|
|
Director
|
|
June 17, 2019
|
*
|
|
|
|
|
Dawn C. Willoughby
|
|
Director
|
|
June 17, 2019
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*
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The undersigned, by signing her name hereto, does sign and execute this report pursuant to the powers of attorney executed by the above-named officers and directors of the registrant, which are being filed herewith with the Securities and Exchange Commission on behalf of such officers and directors.
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Date: June 17, 2019
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/s/ Jeannette L. Knudsen
|
|
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By:
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Jeannette L. Knudsen Attorney-in-Fact
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1.
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Grant of the Performance Units
. The Performance Units (and Dividend Equivalents, as described further in Article II, Section 5 below) covered by this Agreement are granted to the Grantee effective on the Date of Grant and are subject to and granted upon the terms, conditions and restrictions set forth in this Agreement and in the Plan. The Performance Units and Dividend Equivalents shall become vested in accordance with Article II, Section 3 hereof. Each Performance Unit shall represent the right to receive one Common Share (or cash equal to the Market Value per Share) when the Performance Unit vests and shall at all times be equal in value to one hypothetical Common Share (or the Market Value per Share if settled in cash). The Performance Units and Dividend Equivalents shall be credited to the Grantee in an account established for the Grantee until payment in accordance with Article II, Section 4 hereof.
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2.
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Restrictions on Transfer of the Performance Units
. Neither the Performance Units granted hereby (and any applicable Dividend Equivalents),
nor any interest therein or in the Common Shares related thereto, shall be
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3.
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Vesting of the Performance Units and Dividend Equivalents
.
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(a)
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Subject to the terms of this Agreement and the Grantee’s compliance with the provisions set forth in the Restrictive Covenant Agreement attached hereto as
Exhibit B
(the “
Restrictive Covenant Agreement
”), the Performance Units (and corresponding Dividend Equivalents) shall become vested on the Determination Date (as defined in
Exhibit A
attached hereto) so long as (i) the Grantee shall have remained in the continuous service of the Company or a Subsidiary (“
Continuous Service
”) through the Determination Date and (ii) such Performance Units are “Vesting Eligible Units” in accordance with the terms set forth on
Exhibit A
. Any Performance Units (and corresponding Dividend Equivalents) not vested shall be forfeited, except as provided in Article II, Sections 3(b), 3(c), 3(d), and 3(e) below. The Performance Units (and corresponding Dividend Equivalents) may also be forfeited in the event the Committee determines the Grantee has engaged in Detrimental Activity as such term is defined in the Plan.
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(b)
|
Notwithstanding the provisions of Article II, Section 3(a), if the Grantee leaves the employ of the Company or a Subsidiary following the first anniversary of the beginning of the Performance Period (as defined in
Exhibit A
) under circumstances determined by the Committee to be for the convenience of the Company (a “
Termination Event
”), then the Grantee shall vest in such number of the Performance Units which become “Vesting Eligible Units” (based on actual performance) multiplied by a fraction, the numerator of which is (x) the number of months from the beginning of the Performance Period through the Termination Event (rounded up to the nearest whole month), and the denominator of which is (y) 36, in each case such vesting to occur on the Determination Date.
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(c)
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Notwithstanding the provisions of Article II, Section 3(a), if the Grantee dies or Grantee’s Continuous Service is terminated by the Company or a Subsidiary for Disability (each, a “
Qualifying Event
”), then the Grantee shall vest in such number of Performance Units determined by multiplying the Target Units (as set forth in
Exhibit A
) by a fraction, the numerator of which is (x) the number of months from the beginning of the Performance Period through the Qualifying Event (rounded up to the nearest whole month), and the denominator of which is (y) 36, in each case such vesting to occur on the date of Grantee’s death or termination for Disability, as applicable.
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(d)
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Notwithstanding the provisions of Article II, Section 3(a), if a Change in Control occurs, then the Grantee shall vest in all of the Performance Units at the Target Level with such vesting to occur upon the consummation of the Change in Control.
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(e)
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Notwithstanding the provisions of Article II, Section 3(a), if the Grantee’s Continuous Service ends as a result of a retirement when the Grantee is age 60 or older with at least ten years of service with the Company or its Subsidiaries (a “
Retirement
”), then the Grantee shall vest in the total number of the Performance Units which become “Vesting Eligible Units” (based on actual performance) if such Retirement occurs after the first anniversary of the beginning of the Performance Period, with such vesting to occur on the Determination Date.
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4.
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Settlement of the Performance Units and Dividend Equivalents
.
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(a)
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The Company shall issue to the Grantee the Common Shares underlying the vested Performance Units (and corresponding Dividend Equivalents) or, in the Committee’s discretion, shall pay the Grantee cash equal to the Market Value per Share of each Common Share underlying the vested Performance Units (and corresponding Dividend Equivalents), as soon as practicable, but not later than 10 days, after the earliest to occur of (i) the Determination Date, (ii) the date of Grantee’s death or termination for Disability, (iii) the occurrence of a Change in Control as set forth in Article II, Section 3(d), or (iv) March 5
th
of the year following the end of the Performance Period set forth in
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(b)
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Except to the extent permitted by the Company and the Plan, no Common Shares may be issued, and no cash may be paid with respect to the Performance Units (and any corresponding Dividend Equivalents), to the Grantee at a time earlier than otherwise expressly provided in this Agreement.
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(c)
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The Company’s obligations to the Grantee with respect to the Performance Units (and any corresponding Dividend Equivalents) shall be satisfied in full upon the issuance of the Common Shares or the payment of cash equal to the Market Value per Share for each Common Share corresponding to such Performance Units;
provided
that any corresponding Dividend Equivalents shall be solely settled in cash.
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5.
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Dividend, Voting and Other Rights
.
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(a)
|
The Grantee shall have no rights of ownership in the Performance Units, except for a right to Dividend Equivalents as provided in Article II, Section 5(b) below, and shall have no right to vote the Performance Units until any date on which the Performance Units are settled in Common Shares pursuant to Article II, Section 4 above.
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(b)
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The Performance Units granted hereunder are hereby granted in tandem with corresponding dividend equivalents with respect to each Common Share underlying the Performance Units granted hereunder (each, a “
Dividend Equivalent
”), which Dividend Equivalent shall remain outstanding from the Date of Grant until the earlier of the settlement or forfeiture of the Performance Unit to which it corresponds. No Dividend Equivalent shall be paid to the Grantee prior to the settlement of the Performance Units. Rather, such Dividend Equivalent payments shall accrue and be notionally credited to the Grantee’s Performance Unit account and paid out in cash when the underlying Performance Unit is settled in the form of additional Common Shares or cash, as described in Article II, Section 4 above.
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(c)
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The obligations of the Company under this Agreement shall be merely that of an unfunded and unsecured promise of the Company to deliver Common Shares or cash in the future, and the rights of the Grantee shall be no greater than that of an unsecured general creditor. No assets of the Company shall be held or set aside as security for the obligations of the Company under this Agreement.
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6.
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Compliance with Law
. The Company shall make reasonable efforts to comply with all applicable federal, state, and foreign securities laws;
provided
,
however
, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any Common Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law.
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7.
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Compliance with Section 409A of the Code
. The parties intend for this Agreement to either comply with, or be exempt from, Section 409A of the Code, to the extent applicable, and all provisions of this Agreement shall be interpreted and applied accordingly. Reference to Section 409A of the Code shall also include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.
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8.
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Withholding Taxes
. To the extent that the Company or any Subsidiary is required to withhold federal, state, local, or foreign taxes in connection with the Performance Units,
any applicable Dividend Equivalents, the payment of cash, or the issuance of Common Shares pursuant to this Agreement, and the amounts available to the Company or such Subsidiary for such withholding are insufficient, it shall be a condition to the issuance of such Common Shares that the Grantee make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. The Grantee hereby elects to satisfy this withholding obligation by having withheld, from the Common Shares otherwise deliverable to the Grantee, Common Shares having a value equal to the minimum amount of taxes required to be withheld. The Common Shares so retained shall be credited against such withholding requirement at the Market Value per Share on the date of such retention. The Company may, at the request of the Grantee, withhold Common Shares for payment of taxes in excess of the minimum amount of taxes required to be withheld;
provided
,
however
, that in no event shall the Company withhold Common Shares for payment of taxes in excess of the maximum statutory individual tax rate in the jurisdiction(s) applicable to the Grantee.
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9.
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Continuous Service
. For purposes of this Agreement, the Continuous Service of the Grantee with the Company or a Subsidiary shall not be deemed to have been interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company or Subsidiary, by reason of the (a) transfer of his or her employment among the Company and its Subsidiaries or (b) a leave of absence approved by a duly constituted officer of the Company or a Subsidiary.
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10.
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Right to Terminate Employment
. No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of the Grantee at any time. Nothing herein shall be deemed to create a contract or a right to employment with respect to the Grantee.
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11.
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Relation to Other Benefits
. Any economic or other benefit to the Grantee under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement, or other benefit or compensation plan maintained by the Company or a Subsidiary and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.
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12.
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Amendments
. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto;
provided
,
however
, that no amendment shall impair the rights of the Grantee under this Agreement without the Grantee’s consent;
further provided
,
however
, that the Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with (or exemption from) Section 409A of the Code or the Dodd-Frank Wall Street Reform and Consumer Protection Act or any regulations promulgated thereunder.
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13.
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Severability
. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.
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14.
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Relation to Plan
. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of the Performance Units (and any corresponding Dividend Equivalents).
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15.
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Nature of Grant
. The Grantee agrees that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended, or terminated by the Company at any time; (b) the grant of the Performance Units is voluntary and occasional and does not create any contractual or other right to receive future grants of performance units, or benefits in substitution of performance units, even if performance units have been granted repeatedly in the past; (c) all decisions with respect to future performance unit grants shall be at the sole discretion of the Company; (d) participation in the Plan is voluntary; (e) the Performance Units are not a part of normal or expected pay package for any purposes; (f) if the Grantee
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16.
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Restrictive Covenants
. By executing this Agreement, the Grantee hereby agrees to the terms and conditions set forth in the Restrictive Covenant Agreement.
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17.
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Electronic Delivery
. The Company may, in its sole discretion, deliver any documents related to the Performance Units (and any corresponding Dividend Equivalents) and the Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee’s consent to participate in the Plan by electronic means. The Grantee consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
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18.
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Governing Law
. This Agreement is made under, and shall be governed by and construed in accordance with the internal substantive laws of, the State of Ohio, without giving effect to the choice of law principles thereof.
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19.
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Transfer Restrictions
. The Performance Units shall be subject to the provisions of Section 16 of the Plan relating to the prohibition on the assignment or transfer of the rights granted hereunder.
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20.
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Professional Advice
. The acceptance of the Performance Units may have consequences under federal and state tax and securities laws that may vary depending upon the individual circumstances of the Grantee. Accordingly, the Grantee acknowledges that the Grantee has been advised to consult his or her personal legal and tax advisors in connection with this Agreement and the Performance Units.
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21.
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Notices
. Any notice hereunder by the Grantee shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Corporate Secretary of the Company at the Company’s principal executive offices. Any notice hereunder by the Company shall be given to the Grantee in writing at the most recent address as the Grantee may have on file with the Company.
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22.
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Data Privacy
. The Grantee explicitly and unambiguously consents to the collection, use, and transfer, in electronic or other form, of the Grantee’s personal data as described in this Agreement by and among the Company and its Subsidiaries for the exclusive purpose of implementing, administering, and managing the Grantee’s participation in the Plan. The Grantee understands that the Company and its Subsidiaries hold (but only process or transfer to the extent required or permitted by local law) the following personal information about the Grantee: the Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Common Shares or directorships held in the Company, details of all options or any other entitlement to Common Shares awarded, canceled, exercised, vested, unvested, or outstanding in the Grantee’s favor, for the purpose of implementing, administering, and managing the Plan (“
Data
”). The Grantee understands that Data may be transferred to third parties assisting in the implementation, administration, and management of the Plan, including [
List administrator(s)
], that these recipients may be located in the Grantee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than those that apply in the Grantee’s country. The Grantee understands that the Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting the Grantee’s local human resources representative. The Grantee authorizes these recipients to receive, possess, use, retain, and transfer the Data, in electronic or other form, for the purposes of implementing, administering, and managing the Grantee’s participation in the Plan, including any requisite
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23.
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Counterparts
. This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.
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24.
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Binding Effect
. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors, and assigns.
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25.
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Entire Agreement
. This Agreement, the Plan, and the Restrictive Covenant Agreement constitute the entire agreement between the parties hereto with respect to the subject matter hereof and thereof, merging any and all prior agreements.
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By:
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____________________________________
Name: Title: |
Performance Period
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Performance Units
|
Earnings Per Share (“
EPS
”)
|
Return on Invested Capital (“
ROIC
”)
|
5/1/20-4/30/20
|
Threshold Level
:
50% of Target Level
Target Level
: (“Target Units”)
Maximum Level:
200% of Target Level
|
Threshold Level
: _____
Target Level:
_____
Maximum Level:
_____
|
Threshold Level
: _____
Target Level:
_____
Maximum Level:
_____
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By:
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____________________________________
Name: Title: |
By:
|
____________________________________
Name: Title: |
By:
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____________________________________
|
Subsidiaries
|
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State or Jurisdiction of Incorporation or Organization
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Ainsworth Pet Nutrition, LLC
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Delaware
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Ainsworth Pet Nutrition Holdings, LLC
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Delaware
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Ainsworth Pet Nutrition Parent, LLC
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Delaware
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Big Heart Pet Brands, Inc.
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Delaware
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Big Heart Pet, Inc.
|
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Delaware
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CAFÉ Holding, LLC
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Ohio
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CP APN, Inc.
|
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Delaware
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DPC Pet Specialties LLC
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Pennsylvania
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Folgers Café Servicos de Pesquisas, Ltda.
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Brazil
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J.M. Smucker Holdings, LLC
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Ohio
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J.M. Smucker LLC
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Ohio
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JMS Foodservice, LLC
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Delaware
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Knudsen & Sons, Inc.
|
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Ohio
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Meow Mix Decatur Production I LLC
|
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Delaware
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Milo’s Kitchen, LLC
|
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Delaware
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Natural Balance Organic Formulas, LLC
|
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California
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Natural Balance Pet Foods, Inc.
|
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California
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Nature’s Recipe, LLC
|
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Delaware
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NU Pet Company
|
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Delaware
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Rowland Coffee Roasters, Inc.
|
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Ohio
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Sahale Snacks, Inc.
|
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Delaware
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Santa Cruz Natural Incorporated
|
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California
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Simply Smucker’s, Inc.
|
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Ohio
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Smucker Coffee Silo Operations, LLC
|
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Louisiana
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Smucker Direct, Inc.
|
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Ohio
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Smucker Foods Holding Company
|
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Ohio
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Smucker Foods of Canada Corp.
|
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Canada
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Smucker Foods, Inc.
|
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Delaware
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Smucker Foodservice, Inc.
|
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Delaware
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Smucker Foodservice Operations, Inc.
|
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Delaware
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Smucker Fruit Processing Co.
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Ohio
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Smucker Holdings, Inc.
|
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Ohio
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Smucker Hong Kong Limited
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Hong Kong
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Smucker International Holding Company
|
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Ohio
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Smucker International, Inc.
|
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Ohio
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Smucker Manufacturing, Inc.
|
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Ohio
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Smucker Mexico, LLC
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Ohio
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Smucker Natural Foods, Inc.
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California
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Smucker Retail Foods, Inc.
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Ohio
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Smucker Sales and Distribution Company
|
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Ohio
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Smucker Services Company
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Ohio
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The Dickinson Family, Inc.
|
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Ohio
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The Folger Coffee Company
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Ohio
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The Folgers Coffee Company
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Delaware
|
truRoots, Inc.
|
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California
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TTT APN, LLC
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Delaware
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Registration Statement
|
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Registration Number
|
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Description
|
Form S-8
|
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333-98335
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The J. M. Smucker Company Amended and Restated 1998 Equity and Performance Incentive Plan
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Form S-8
|
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333-116622
|
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Amended and Restated 1986 Stock Option Incentive Plan of The J. M. Smucker Company
|
|
|
|
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Amended and Restated 1989 Stock-Based Incentive Plan of The J. M. Smucker Company
|
|
|
|
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Amended and Restated 1997 Stock-Based Incentive Plan of The J. M. Smucker Company
|
Form S-8
|
|
333-137629
|
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The J. M. Smucker Company 2006 Equity Compensation Plan
|
Form S-8
|
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333-139167
|
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The J. M. Smucker Company Nonemployee Director Deferred Compensation Plan
|
Form S-8
|
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333-170653
|
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The J. M. Smucker Company 2010 Equity and Incentive Compensation Plan
|
Form S-3
|
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333-177279
|
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Automatic Shelf Registration Statement
|
Form S-3
|
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333-197428
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|
Automatic Shelf Registration Statement
|
Form S-3
|
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333-220696
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Automatic Shelf Registration Statement
|
June 17, 2019
|
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/s/ Kathryn W. Dindo
|
Date
|
|
Director
|
June 17, 2019
|
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/s/ Paul J. Dolan
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Jay L. Henderson
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Elizabeth Valk Long
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Gary A. Oatey
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Kirk L. Perry
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Sandra Pianalto
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Nancy Lopez Russell
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Alex Shumate
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Mark T. Smucker
|
Date
|
|
President and Chief Executive Officer and Director
|
June 17, 2019
|
|
/s/ Richard K. Smucker
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Timothy P. Smucker
|
Date
|
|
Director
|
June 17, 2019
|
|
/s/ Dawn C. Willoughby
|
Date
|
|
Director
|
(1)
|
I have reviewed this annual report on Form 10-K of The J. M. Smucker Company;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Mark T. Smucker
|
||
Name:
|
Mark T. Smucker
|
|
Title:
|
President and Chief Executive Officer
|
(1)
|
I have reviewed this annual report on Form 10-K of The J. M. Smucker Company;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Mark R. Belgya
|
||
Name:
|
Mark R. Belgya
|
|
Title:
|
Vice Chair and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
|
|
|
|
/s/ Mark T. Smucker
|
|||
Name:
|
Mark T. Smucker
|
|
|
Title:
|
President and Chief Executive Officer
|
|
|
|
|||
/s/ Mark R. Belgya
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Name:
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Mark R. Belgya
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Title:
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Vice Chair and Chief Financial Officer
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