filings.toolsJ.M. Smucker (SJM) 10-K risk factor changes: FY2019 vs FY2018
The 2019-04-30 10-K against the 2018-04-30 one, compared heading by heading and sentence by sentence. One of these filings carries no fiscal year tag, so its year is the calendar year of the period end.
Item 1A71 rewritten34 added26 removed146 unchanged
All filing items196 rewritten2,353 added217 removed381 unchanged
Summary
counted, not written
- Item 1A headings could not be compared: only 0 carried over between the two years, which usually means one filing was read wrongly, so none is reported as new or removed.
- Sentence by sentence, 2,353 added, 217 removed, 196 rewritten and 381 unchanged across 18 items that differ.
- Not in this year's filing: Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.; Item 2. Properties.; Item 8. Financial Statements and Supplementary Data..
Sentences by item
20 items, with every count and a link to each item that changed
Underlined words on a shaded ground are new in FY2019; struck-through words were in FY2018. Sentences that are wholly new or wholly gone are labelled rather than marked.
Item 1A. Risk Factors.
71 rewritten, 34 added, 26 removed, 146 unchanged
The risk factors described below should be carefully considered, together with the other information contained or incorporated by reference in this [added: Annual] Report [added: on Form 10-K] and our other filings with the SEC, in connection with evaluating the Company, our business, and the forward-looking statements contained in this [added: Annual] Report.
[removed: -] We may be unable to grow market share of our products.
[removed: | • |] Our proprietary brands, packaging designs, and manufacturing methods are essential to the value of our business, and the inability to protect these could harm the value of our brands and adversely affect our sales and profitability. [removed: |]
[removed: | • |] We use a single national broker to represent a portion of our branded products to the retail grocery trade and any failure by the broker to effectively represent us could adversely affect our business. [removed: |]
Our business would suffer disruption if this broker were to [removed: default in the performance of its obligations] [added: fail] to perform brokerage services or [removed: if this broker fails] to effectively represent us to the retail grocery trade, which could adversely affect our business.
[removed: | • |] Loss or interruption of supply from single-source suppliers of raw materials and finished goods could have a disruptive effect on our business and adversely affect our results of operations. [removed: |]
[removed: | • |] Our results may be adversely impacted as a result of increased cost, limited availability, and/or insufficient quality of raw materials, including commodities and agricultural products. [removed: |]
We and our business partners purchase and use large quantities of many different commodities and agricultural products in the manufacturing of our products, including green coffee, peanuts, [added: animal protein meals,] oils and fats, [removed: protein meals,] sweeteners, grains, and fruit.
[added: Additionally, farm acreage currently devoted to other agricultural] products we purchase may be utilized for biofuels crops resulting in higher [removed: cost] [added: costs] for the other agricultural products we utilize.
Although we use basis, futures, [added: options,] and [removed: options] [added: fixed price] contracts to manage commodity price volatility in some instances, commodity price increases ultimately result in corresponding increases in our raw material and energy costs.
[removed: | • |] Our efforts to manage commodity, foreign currency exchange, and other price volatility through derivative instruments could adversely affect our results of operations and financial condition. [removed: |]
[removed: | • |] We may be limited in our ability to pass cost increases on to our customers in the form of price increases or may realize a decrease in sales volume to the extent price increases are implemented. [removed: |]
Consumers may be less willing or able to pay a price differential for our branded [removed: products,] [added: products] and may increasingly purchase lower-priced offerings and may forego some purchases altogether, especially during economic downturns.
[removed: | • |] Certain of our products are produced at single manufacturing sites. [removed: |]
We have consolidated our production capacity for certain [removed: products,] [added: products into single manufacturing sites,] including substantially all of our coffee, Milk-Bone dog snacks, fruit spreads, toppings, [removed: syrups,] and [removed: Uncrustables frozen sandwiches, into single manufacturing sites.][added: syrups.]
[removed: | • |] A significant interruption in the operation of any of our supply chain or distribution capabilities could have an adverse effect on our business, financial condition, and results of operations. [removed: |]
Additionally, some of our production facilities are located in places where tornadoes [added: or wildfires] can frequently occur, such as [removed: Alabama] [added: Alabama, Kansas,] and [removed: Kansas.][added: California.]
[removed: | • |] Our business could be harmed by strikes or work stoppages. [removed: |]
As of April 30, [removed: 2018, 28] [added: 2019, 24] percent of our full-time employees, located at [removed: 10] [added: nine] manufacturing locations, are covered by collective bargaining agreements.
These contracts vary in term depending on location, with [removed: one contract] [added: seven contracts] expiring in [removed: 2019,] [added: 2020,] representing [removed: less than 1] [added: 19] percent of our total employees.
[removed: | • | Our ability to competitively serve customers depends on the availability of reliable transportation.] Increases in logistics and other transportation-related costs could adversely impact our results of operations. [removed: |]
[removed: | • |] Our operations are subject to the general risks of the food industry. [removed: |]
[removed: | • |] Changes in our relationships with significant customers, including the loss of our largest customer, could adversely affect our results of operations. [removed: |]
Sales to Walmart Inc. and subsidiaries amounted to [removed: 31] [added: 32] percent of net sales in [removed: 2018.][added: 2019.]
Trade receivables at April 30, [removed: 2018,] [added: 2019,] included amounts due from Walmart Inc. and subsidiaries of [removed: $123.1] [added: $137.7] million, or [removed: 32] [added: 27] percent of the total trade receivables balance.
During [removed: 2018,] [added: 2019,] our top 10 customers, collectively, accounted for approximately 60 percent of consolidated net sales.
We expect that a significant portion of our revenues will continue to be derived from a limited number of [added: customers.]
[removed: | • |] We operate in the competitive food industry and continued demand for our products may be affected by [added: our failure to effectively compete or by] changes in consumer preferences. [removed: |]
Continued success is dependent on product innovation, the ability to secure and maintain adequate retail shelf space and to compete in new and growing channels, [removed: such as e-commerce,] and effective and sufficient trade merchandising, advertising, and marketing programs.
Category share and growth could [added: also] be adversely impacted if we are not successful in introducing new [removed: products.]
[removed: | • |] The success of our business depends substantially on consumer perceptions of our brands. [removed: |]
In addition, anything that harms the Dunkin’ [removed: Donuts, Rachael Ray, Pillsbury, Carnation, Sweet‘N Low,] [added: Donuts] or [removed: Sugar In The Raw] [added: Rachael Ray] brands could adversely affect the success of our exclusive licensing agreements with the owners of these brands.
[removed: | • |] We could be subject to adverse publicity or claims from consumers. [removed: |]
Certain of our products contain [removed: ingredients, the health effects of] [added: ingredients] which are the subject of public scrutiny, including the suggestion that consumption may have adverse health effects.
[removed: health] [added: An unfavorable report on the] effects of ingredients present in our products, product recalls, or negative publicity or litigation [removed: arising from other health risks] could [added: influence consumer preferences,] significantly reduce the demand for our [removed: products.][added: products, and adversely affect our profitability.]
[removed: | • | Our operations are subject to the general risks associated with acquisitions and divestitures.] Specifically, we may not realize all of the anticipated benefits of the Ainsworth acquisition or those benefits may take longer to realize than expected. [removed: We may also encounter significant unexpected difficulties in integrating the Ainsworth business. |]
We have historically made strategic acquisitions of brands and [removed: businesses] [added: businesses, including Ainsworth,] and intend to do so in the future in support of this strategy.
If we are unable to complete acquisitions or to successfully integrate and develop acquired businesses, including the effective management of integration and related restructuring costs, we could fail to achieve the [removed: anticipated synergies and cost savings, or the expected increases in revenues and operating results, either of which could have a material adverse effect on our financial results.]
In addition, we have made strategic divestitures of brands and businesses, including [removed: a potential divestiture] [added: the sale] of our U.S. baking business, and we may do so in the future.
If we are unable to complete divestitures or to successfully transition divested businesses, [added: including the effective management of the related separation and stranded overhead costs,] our business and financial results could be negatively impacted.
Our ability to competitively serve customers depends on the availability of reliable transportation.
In particular, technology-based systems, which give consumers the ability to shop through e-commerce websites and mobile commerce applications, are also significantly altering the retail landscape in many of our markets.
We are committed to expanding our presence in e-commerce, transforming our manufacturing, commercial, and corporate operations through digital technologies, and enhancing our data analytics capabilities to develop new commercial insights.
However, if we are unable to effectively compete in the expanding e-commerce market, adequately leverage technology to improve operating efficiencies, or develop the data analytics capabilities needed to generate actionable commercial insights, our business performance may be impacted, which may negatively impact our financial condition and results of operations.
products.
If we are unable to build and sustain brand equity by offering recognizably superior products, we may be unable to maintain premium pricing over generic and private label products.
We may not be able to attract, develop, and retain the highly skilled people we need to support our business.
We depend on the skills and continued service of key employees, including our experienced management team.
In addition, our ability to achieve our strategic and operating goals depends on our ability to identify, recruit, hire, train, and retain qualified individuals.
We compete with other companies both within and outside of our industry for talented people, and we may lose key employees or fail to attract, recruit, train, develop, and retain other talented individuals.
Any such loss, failure, or negative perception with respect to these individuals may adversely affect our business or financial results.
In addition, activities related to identifying, recruiting, hiring, integrating, and training qualified individuals may require significant time and expense.
We may not be able to locate suitable replacements for any key employees who leave or offer employment to potential replacements on reasonable terms, each of which may adversely affect our business and financial results.
Our operations are subject to the general risks associated with acquisitions and divestitures.
anticipated synergies and cost savings, or the expected increases in revenues and operating results, either of which could have a material adverse effect on our financial results.
We continuously pursue initiatives to reduce costs, increase effectiveness, and optimize cash flow.
Our substantial debt obligations could restrict our operations and financial condition.
As of April 30, 2019, we had approximately $5.9 billion of short-term borrowings and long-term debt, partially as a result of new borrowings this year to finance the Ainsworth acquisition.
At
$16.7 billion and total shareholders’ equity of $8.0 billion.
These intangible assets are susceptible to future impairment charges due to narrow differences between fair value and carrying value as a result of recent impairment charges and the acquisition of Ainsworth in May 2018.
To date, we have recognized $412.6 million of impairment charges related to the goodwill and indefinite-lived intangible assets acquired as part of the Big Heart acquisition in 2015, primarily as a result of reductions in our long-term net sales and profitability projections.
We do not believe that our Pet Foods reporting unit or any of the indefinite-lived trademarks within the U.S. Retail Pet Foods segment are more likely than not impaired as of
April 30, 2019.
As of April 30, 2019, the estimated fair value was substantially in excess of the carrying value for the majority of the remaining reporting units and material indefinite-lived intangible assets, and in all instances, the estimated fair value exceeded the carrying value by greater than 10 percent, with the exception of the Natural Foods reporting unit, which has no remaining goodwill as a result of the impairment charge recorded during the fourth quarter of 2019.
For further information, refer to Note 7: Goodwill and Other Intangible Assets.
We regularly move data across national and state borders to conduct our operations and, consequently, are subject to a variety of laws and regulations in the U.S. and other jurisdictions regarding privacy, data protection, and data security, including those related to the collection, storage, handling, use, disclosure, transfer, and security of personal data.
There is significant uncertainty with respect to compliance with such privacy and data protection laws and regulations, because they are continuously evolving and developing and may be interpreted and applied differently from country to country and state to state and may create inconsistent or conflicting requirements.
We could also face
We are regularly the target of attempted cyber and other security threats.
Therefore, we continuously monitor and update our information technology networks and infrastructure to prevent, detect, address, and mitigate the risk of unauthorized access, misuse, computer viruses, and other events that could have a security impact.
We invest in industry standard security technology to protect our data and business processes against the risk of data security breaches and cyber-based attacks.
We believe our security technology tools and processes provide adequate measures of protection against security breaches and in reducing cybersecurity risks.
In addition, the cost to remediate any damages to our information technology systems suffered as a result of a cyber-based attack could be significant.
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Additionally, farm acreage currently devoted to other agricultural
customers.
Prolonged negative perceptions concerning the health implications of certain food products could influence consumer preferences and acceptance of some of our products and marketing programs.
Increasing public concern regarding health issues and failure to satisfy consumer preferences could decrease demand for certain of our products and adversely affect our profitability.
An unfavorable report on the
In particular, our ability to realize the anticipated benefits of the Ainsworth acquisition will depend, to a large extent, on our ability to integrate the Ainsworth business into Smucker.
The combination of two independent businesses is a complex, costly, and time-consuming process.
As a result, we will be required to devote significant management attention and resources to integrating Ainsworth’s business practices and operations with our business practices and operations.
The integration process may disrupt the businesses and, if implemented ineffectively or if impacted by unforeseen negative economic or market conditions or other factors, we may not realize the full anticipated benefits, cost savings, synergies, business opportunities, and growth prospects of the acquisition.
Our failure to meet the challenges involved in integrating the two businesses to realize the anticipated benefits of the acquisition could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations.
As part of our organization optimization and cost management programs, we are pursuing a number of initiatives to reduce costs and increase effectiveness.
The liquidity of the overall capital
As of April 30, 2018, we had approximately $4.8 billion of short-term borrowings and long-term debt.
Subsequently, on May 14, 2018, we borrowed $1.9 billion to finance the Ainsworth acquisition.
As a result of the Big Heart acquisition in 2015, we recognized $3.0 billion of goodwill and $1.5 billion of other indefinite-lived intangible assets based on their estimated fair values on the acquisition date.
During 2017, we recognized total impairment charges of $128.5 related to certain indefinite-lived trademarks within the U.S. Retail Pet Foods segment.
During the third quarter of 2018, we performed an interim impairment analysis on the goodwill of the Pet Foods reporting unit and the indefinite-lived trademarks included within the U.S. Retail Pet Foods segment due to a decline in forecasted net sales for the U.S. Retail Pet Foods segment, as well as the narrow differences between estimated fair value and carrying value.
As a result, we recognized total impairment charges of $176.9, of which $145.0 and $31.9 related to the goodwill of the Pet Foods reporting unit and certain indefinite-lived trademarks within the U.S. Retail Pet Foods segment, respectively, to the extent the carrying values exceeded the estimated fair values.
In addition, any meaningful adverse change to our near or long-term projections or macro-economic conditions could result in future impairment charges.
In addition, as a result of the Ainsworth acquisition in May 2018, we will recognize additional goodwill and other intangible assets, which will be included within the U.S. Retail Pet Foods reportable segment, based on their estimated fair values on the acquisition date.
Since carrying value will represent estimated fair value, these assets could be more susceptible to future impairment.
A change to the assumptions regarding future performance of the business, or a portion of it, or a change to other assumptions, could result in significant impairment losses in the future.
from the warning requirement.
business or financial results could be negatively impacted.
An excerpt. Shown here: 40 of 71 rewritten, all 34 added and all 26 removed. The counts are complete. For every sentence, read Item 1A. Risk Factors. in the FY2019 filing and the FY2018 filing.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
0 rewritten, 0 added, 1 removed, 0 unchanged
Dropped this year
Management’s discussion and analysis of financial condition and results of operations, including a discussion of liquidity and capital resources and critical accounting estimates and policies, is incorporated herein by reference to the information set forth in our 2018 Annual Report to Shareholders under the caption “Management’s Discussion and Analysis.”
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
0 rewritten, 1,577 added, 1 removed, 0 unchanged
DERIVATIVE FINANCIAL INSTRUMENTS AND MARKET RISK
The following discussions about our market risk disclosures involve forward-looking statements.
Actual results could differ from those projected in the forward-looking statements.
We are exposed to market risk related to changes in interest rates, foreign currency exchange rates, and commodity prices.
Interest Rate Risk: The fair value of our cash and cash equivalents at April 30, 2019, approximates carrying value.
We are exposed to interest rate risk with regard to existing debt consisting of fixed- and variable-rate maturities.
Our interest rate exposure primarily includes U.S. Treasury rates, LIBOR, and commercial paper rates in the U.S.
We utilize derivative instruments to manage interest risk associated with anticipated debt transactions, as well as to manage changes in the fair value of our long-term debt.
At the inception of an interest rate contract, the instrument is evaluated and documented for qualifying hedge accounting treatment.
If the contract is designated as a cash flow hedge, the mark-to-market gains or losses on the contract are deferred and included as a component of accumulated other comprehensive income (loss), and reclassified to interest expense in the period during which the hedged transaction affects earnings.
If the contract is designated as a fair value hedge, the contract is recognized at fair value on the balance sheet, and changes in the fair value are recognized in interest expense.
Generally, changes in the fair value of the contract are equal to changes in the fair value of the underlying debt and have no net impact on earnings.
We entered into interest rate contracts in November 2018 and June 2018, with notional values of $300.0 and $500.0, respectively, to manage our exposure to interest rate volatility associated with anticipated debt financing in 2020.
These interest rate contracts are designated as cash flow hedges, and as a result, unrealized losses of $49.1 were deferred in accumulated other comprehensive income (loss) at April 30, 2019.
A hypothetical 10 percent decrease in treasury rates at April 30, 2019, would result in a loss of $28.4 on the fair value of these interest rate contracts.
In 2018, we terminated a treasury lock concurrent with the pricing of the Senior Notes due December 15, 2027, which was designated as a cash flow hedge and used to manage our exposure to interest rate volatility.
The termination resulted in a gain of $2.7, which was deferred and included as a component of accumulated other comprehensive income (loss) and is being amortized as a reduction to interest expense over the life of the debt.
In 2015, we terminated the interest rate swap on the Senior Notes due October 15, 2021, which was designated as a fair value hedge and used to hedge against the changes in the fair value of the debt.
As a result of the early termination, we received $58.1 in cash, which included $4.6 of accrued and prepaid interest and a $53.5 benefit that is deferred as a component of the carrying value of the long-term debt and is being recognized ratably as a reduction to interest expense over the remaining life of the related debt.
At April 30, 2019, the remaining benefit of $20.5 was recorded as an increase in the long-term debt balance.
In measuring interest rate risk by the amount of net change in the fair value of our financial liabilities, a hypothetical
100-basis-point decrease in interest rates at April 30, 2019, would increase the fair value of our long-term debt by $283.9.
Foreign Currency Exchange Risk: We have operations outside the U.S. with foreign currency denominated assets and liabilities, primarily denominated in Canadian currency.
Because we have foreign currency denominated assets and liabilities, financial exposure may result, primarily from the timing of transactions and the movement of exchange rates.
The foreign currency balance sheet exposures as of April 30, 2019, are not expected to result in a significant impact on future earnings or
cash flows.
We utilize foreign currency derivatives to manage the effect of foreign currency exchange fluctuations on future cash payments in Canada, primarily related to purchases of certain raw materials and finished goods.
The contracts generally have maturities of less than one year.
We do not qualify instruments used to manage foreign currency exchange exposures for hedge accounting treatment.
Therefore, the change in value of these instruments is immediately recognized in cost of products sold.
Based on our hedged foreign currency positions as of April 30, 2019, a hypothetical 10 percent change in exchange rates would not materially impact the fair value.
Revenues from customers outside the U.S., subject to foreign currency exchange, represented 5 percent of net sales during 2019.
Thus, certain revenues and expenses have been, and are expected to be, subject to the effect of foreign currency fluctuations, and these fluctuations may have an impact on operating results.
Commodity Price Risk: We use certain raw materials and other commodities that are subject to price volatility caused by supply and demand conditions, political and economic variables, weather, investor speculation, and other unpredictable factors.
To manage the volatility related to anticipated commodity purchases, we use derivatives with maturities of generally less than one year.
We do not qualify commodity derivatives for hedge accounting treatment.
As a result, the gains and losses on all commodity derivatives are immediately recognized in cost of products sold.
The following sensitivity analysis presents our potential loss of fair value resulting from a hypothetical 10 percent change in market prices related to commodities.
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Quantitative and qualitative disclosures about market risk are incorporated herein by reference to the information set forth in our 2018 Annual Report to Shareholders under the caption “Derivative Financial Instruments and Market Risk.”
An excerpt. Shown here: all 0 rewritten, 40 of 1,577 added and all 1 removed. The counts are complete. For every sentence, read Item 7A. Quantitative and Qualitative Disclosures About Market Risk. in the FY2019 filing and the FY2018 filing.
Item 1. Business.
44 rewritten, 66 added, 41 removed, 86 unchanged
The [added: Company: The] J. M. Smucker Company (“Company,” “registrant,” “we,” “us,” or “our”), often referred to as Smucker’s (a registered trademark), was established in 1897 and incorporated in Ohio in 1921.
Net sales outside the U.S., subject to foreign currency translation, represented [removed: 6] [added: 5] percent of consolidated net sales for [removed: 2018.][added: 2019.]
On March 23, 2015, we completed the acquisition of Big Heart Pet Brands (“Big Heart”), a leading producer, distributor, and marketer of [removed: premium-quality,] [added: premium,] branded pet food and pet snacks in the U.S. The cash and stock transaction was valued at $5.9 billion, which included the issuance of 17.9 million shares of our common stock to the shareholders of Blue Acquisition Group, Inc., Big Heart’s parent company.
We assumed $2.6 billion in debt that we repaid at closing and paid an additional $1.2 billion in [removed: cash, net of a working capital adjustment.][added: cash.]
On May 14, 2018, we completed the acquisition of Ainsworth Pet Nutrition, LLC (“Ainsworth”), a leading producer, distributor, and marketer of premium pet food and pet snacks, predominantly within the U.S. The [removed: all-cash transaction,] [added: majority of Ainsworth’s sales are generated by the Rachael Ray® Nutrish® brand,] which [removed: was funded with debt, was valued at $1.9 billion.][added: is driving significant growth in the premium pet food category.]
The U.S. retail market segments in total comprised [removed: approximately 85] [added: 86] percent of [removed: 2018] [added: 2019] consolidated net sales and represent a major portion of our strategic focus – the sale of branded food and beverage products with leadership positions to consumers through retail outlets in North America.
[added: Principal Products:] Our principal products as of April 30, [removed: 2018,] [added: 2019,] are coffee, [removed: pet food and] [added: dog food,] pet snacks, [added: cat food,] peanut butter, fruit spreads, [added: frozen handheld products,] shortening and oils, [removed: baking mixes and ready-to-spread frostings, frozen sandwiches, flour and baking ingredients,] [added: portion control products,] juices and beverages, and [removed: portion control products.][added: flour and baking ingredients.]
Product sales information for the years [added: 2019,] 2018, [removed: 2017,] and [removed: 2016] [added: 2017] is [removed: incorporated herein by reference to information set forth in our 2018 Annual Report to Shareholders under “Note] [added: included within Note] 5: Reportable [removed: Segments.”][added: Segments.]
In the U.S. retail market segments, our products are primarily sold through a combination of direct sales and brokers to food retailers, [removed: food wholesalers,] club stores, pet specialty stores, discount and dollar stores, [added: food wholesalers, online retailers,] drug stores, [removed: military commissaries, mass merchandisers,] natural foods stores and distributors, [added: military commissaries,] and [removed: online retailers.][added: mass merchandisers.]
[added: Sources and Availability of Raw Materials:] The raw materials used in each of our segments are primarily commodities and agricultural-based products.
Green coffee, peanuts, [added: animal protein meals,] oils and fats, [removed: protein meals,] sweeteners, grains, fruit, and other ingredients are obtained from various suppliers.
We source peanuts, [removed: oils] [added: animal protein meals,] and [removed: fats,] [added: oils] and [removed: protein meals] [added: fats] mainly from North America.
While availability may vary year-to-year, we believe that we will continue to [removed: be able to] obtain adequate supplies and that alternatives to single-sourced materials are available.
[added: Trademarks and Patents:] Our products are produced under certain patents and marketed under [removed: numerous] trademarks owned or licensed by us or one of our subsidiaries.
Our major trademarks as of April 30, [removed: 2018,] [added: 2019,] are listed below.
| U.S. Retail Consumer Foods | | [removed: Jif®,] Smucker’s®, [removed: Crisco®, PillsburyTM,] [added: Jif®, Uncrustables®,] and [removed: Uncrustables®] [added: Crisco®] |
| U.S. Retail Pet Foods | | [added: Rachael Ray Nutrish,] Meow Mix®, Milk-Bone®, Natural Balance®, Kibbles ‘n Bits®, 9Lives®, [removed: Pup-Peroni®, and] Nature’s [removed: Recipe®] [added: Recipe®, and Pup-Peroni®] |
Slogans or designs considered to be important trademarks include, without limitation, “With A Name Like Smucker’s, It Has To Be Good®,” “The Best Part of Wakin’ Up Is Folgers In Your Cup®,” “Choosy Moms Choose Jif®,” “Purely The Finest®,” “Goodness Gracious, It’s Good®,” “The Only One Cats Ask For By Name®,” “Say It With Milk-Bone®,” the Smucker’s banner, the Crock Jar shape, the Gingham design, the Mountain Grown design, and the Smucker’s Strawberry, [added: Jif,] Milk-Bone, and 9Lives logos.
[removed: In 2019, as a result of the Ainsworth acquisition, we began utilizing] [added: We utilize] Rachael Ray’s image and likeness and related Rachael [removed: Ray®] [added: Ray] trademarks for premium pet food and pet snacks under an exclusive license which expires in 2063.
Rachael Ray is a [added: registered] trademark of Ray Marks [removed: Co.] [added: II] LLC.
[added: Seasonality:] The U.S. Retail Coffee and U.S. Retail Consumer Foods segments [removed: are particularly] [added: have historically been] seasonal around the Fall Bake and Holiday period, which generally [removed: results] [added: resulted] in higher sales and profits in our second and third quarters.
Our success in promoting and merchandising our coffee and baking brands during the Fall Bake and Holiday period has [added: had] a significant impact on our results for a fiscal year.
The Back to School period and the Spring Holiday season are two other important promotional [removed: periods, although their impact is not as significant as the Fall Bake and Holiday period.][added: periods.]
Working [added: Capital: Working] capital requirements [removed: are] [added: have historically been] greatest during the first half of our fiscal year mainly due to the timing of the buildup of coffee, oil, and baking inventories necessary to support the Fall Bake and Holiday period and the additional buildup of coffee inventory in advance of the Atlantic hurricane season.
[removed: However, the] [added: The] impact of seasonality on our overall working capital requirements [removed: is] [added: has been] partially reduced by the U.S. Retail Pet Foods segment, which does not [removed: experience significant seasonality.]
[added: Customers:] Sales to Walmart Inc. and subsidiaries amounted to [added: 32 percent,] 31 [removed: percent of net sales in 2018,] [added: percent,] and 30 percent of net sales in [removed: both 2017] [added: 2019, 2018,] and [removed: 2016.][added: 2017, respectively.]
No other customer exceeded 10 percent of net sales during [added: 2019,] 2018, [removed: 2017,] or [removed: 2016.][added: 2017.]
During [removed: 2018,] [added: 2019,] our top 10 customers, collectively, accounted for approximately 60 percent of consolidated net sales.
[added: Orders:] Generally, orders are filled within a few days of receipt, and the backlog of unfilled orders at any particular time has not been material on a historical basis.
[added: Government Business:] No material portion of our business is subject to renegotiation of profits or termination of contracts at the election of the government.
[added: Competition:] We are the branded market leader in the coffee, [removed: peanut butter,] dog snacks, [added: peanut butter,] fruit spreads, natural shelf stable juices, shortening, and ice cream toppings categories in the U.S. In Canada, we are the branded market leader in the flour, pickles, fruit spreads, canned milk, shortening, and ice cream toppings categories.
In order to remain competitive, companies in the food industry need to consider emerging consumer preferences, technological advances, product and packaging innovations, and the [removed: continued] growth of [removed: alternative store formats, including warehouse clubs, dollar stores, convenience stores, and e-commerce.][added: certain retail channels, such as the]
The packaged foods industry has been challenged [removed: recently] by a general decline in sales volume in the center of the store.
In our total U.S. retail [removed: categories during the 52 weeks ended April 22, 2018,] [added: categories,] private label held a [removed: 16.1] [added: 16.6] dollar average market [removed: share,] [added: share during the 52 weeks ended April 21, 2019,] as compared to a [removed: 15.4] [added: 16.4] dollar average market share during the same period in the prior year.
Our primary brands and major competitors as of April 30, [removed: 2018,] [added: 2019,] are listed below.
| Premium coffee | [removed: Dunkin' Donuts, Folgers Simply GourmetTM,] [added: Dunkin’ Donuts] and [removed: 1850TM] [added: 1850] | Starbucks(A) and [removed: Seattle's] [added: Seattle’s] Best Coffee | [removed: Starbucks Corporation] [added: Nestlé S.A.] |
| Premium pet food | [added: Rachael Ray Nutrish and] Natural Balance | [removed: Blue(A)] [added: Blue Buffalo(A)] | General Mills, Inc. |
In certain categories, the market leader is not identified as two or more brands compete [added: for the largest share.]
[removed: We consider compliance] [added: Environmental Matters: Compliance] with environmental regulations and environmental sustainability [added: is a key strategic focus as we consider it] to be our responsibility as a good corporate [removed: citizen and a key strategic focus area.][added: citizen.]
We have implemented and manage a variety of programs across our [removed: footprint,] [added: operations,] including energy optimization, the utilization of renewable energy, water conservation, the reuse of resources, and the support of farmers who implement sustainable practices, in support of our commitment to environmental sustainability.
The all-cash transaction, which was funded with debt, was valued at $1.9 billion.
For further information, refer to Note 2: Acquisition.
On August 31, 2018, we sold our U.S. baking business to Brynwood Partners VII L.P. and Brynwood Partners VIII L.P., subsidiaries of Brynwood Partners, an unrelated party.
The transaction included products that were primarily sold in U.S. retail channels under the Pillsbury®, Martha White®, Hungry Jack®, White Lily®, and Jim Dandy® brands, along with all relevant trademarks and licensing agreements, and our manufacturing facility in Toledo, Ohio.
This business generated net sales of approximately $370.0 million in 2018.
The transaction did not include our baking business in Canada.
For further information, refer to Note 4: Divestiture.
For additional information on the commodities we
purchase, see “Commodities Overview” within Management’s Discussion and Analysis of Financial Condition and Results of Operations.
As a result of the U.S. baking business divestiture during the second quarter of 2019, we expect that the U.S. Retail Consumer Foods segment will experience less seasonality.
Additionally, the U.S. Retail Pet Foods segment, which grew during 2019 as a result of the Ainsworth acquisition during the first quarter, does not experience significant seasonality, further reducing the overall impact of seasonality to the total Company.
experience significant seasonality.
The divestiture of the U.S. baking business and the acquisition of Ainsworth during 2019 are expected to reduce the seasonality of our overall working capital requirements.
e-commerce market.
| | | Starbucks | Nestlé S.A. |
| | | 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 |
Information about our Executive Officers: The names, ages as of June 15, 2019, and current positions of our executive officers are listed below.
All executive officers serve at the pleasure of the Board of Directors, with no fixed term of office.
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| 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. |
The Company.
As part of the transaction, new debt of $5.5 billion was borrowed.
For additional information on the Ainsworth acquisition, see “Note 2: Acquisitions” in our 2018 Annual Report to Shareholders.
Principal Products.
Sources and Availability of Raw Materials.
For additional information on the commodities we purchase, see “Commodities Overview” in our 2018 Annual Report to Shareholders.
Trademarks and Patents.
Pillsbury, the Barrelhead logo, and the Doughboy character are trademarks of The Pillsbury Company, LLC and are used under a 20-year, perpetually renewable, royalty-free license.
Borden® and the Elsie design are trademarks used by our Canadian subsidiary on certain products under a perpetual, exclusive, and royalty-free license.
Carnation® is a trademark of Société des Produits Nestlé S.A. used by our Canadian subsidiary for certain canned milk products in certain territories under an exclusive and royalty-free five-year license in effect until October 2022, which is renewable for another five-year term, and which becomes perpetual at the end of the renewal terms under certain circumstances.
Douwe Egberts® and Pickwick® are registered trademarks of Jacobs Douwe Egberts and are used under a license, which expires in January 2019.
In accordance with a multi-year licensing and distribution agreement entered into with Cumberland Packing Corp. (“Cumberland”), we market and distribute Cumberland’s branded tabletop sweeteners sold under the Sweet‘N Low®, NatraTaste®, Sugar In The Raw®, and other “In The Raw” brands to foodservice customers in the U.S. and to retail and foodservice customers in Canada.
Seasonality.
Working Capital.
Customers.
Orders.
Government Business.
Competition.
The majority of the increase was within the coffee category.
| | | Private Label Brands | Various |
| | | Starbucks | Starbucks Corporation |
| | | Wesson | Conagra Brands, Inc. |
| Dessert baking mixes and frosting | Pillsbury | Betty Crocker(A) | General Mills, Inc. |
| | | Duncan Hines | Pinnacle Foods Inc. |
| | | Rachael Ray Nutrish | Ainsworth Pet Nutrition, LLC(C) |
for the largest share.
(C) We acquired Ainsworth on May 14, 2018.
Research and Development.
We predominantly utilize in-house resources to both develop new products and improve existing products in each of our business areas.
Amounts expensed for research and development were $56.0 million, $58.1 million, and $58.8 million in 2018, 2017, and 2016, respectively.
Environmental Matters.
Employees.
On May 14, 2018, we added approximately 700 additional employees with the completion of the Ainsworth acquisition, none of which are covered by union contracts.
Financial Information about Industry Segments and Geographical Areas.
The financial information required to be included in this item concerning reportable industry segments and international operations for the years 2018, 2017, and 2016 is incorporated herein by reference to information set forth in our 2018 Annual Report to Shareholders under “Note 5: Reportable Segments.” Our international operations are primarily in Canada with risks similar to those associated with the U.S. retail markets.
Approximately 45 percent of our 2018 Canada sales represented the sale of Canadian produced products to Canadian customers.
The majority of the remaining Canada sales represented the sale of products produced in the U.S. to Canadian customers, primarily Folgers coffee, Bick’s® pickles, and Smucker’s fruit spreads.
Forward-Looking Statements.
This Report includes forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from expected or projected results.
The descriptions of risks and uncertainties relating to forward-looking statements are incorporated herein by reference to information set forth in our 2018 Annual Report to Shareholders under the caption “Forward-Looking Statements.”
An excerpt. Shown here: 40 of 44 rewritten, 40 of 66 added and 40 of 41 removed. The counts are complete. For every sentence, read Item 1. Business. in the FY2019 filing and the FY2018 filing.
Item 3. Legal Proceedings.
0 rewritten, 1 added, 24 removed, 0 unchanged
The information required for this Item is incorporated herein by reference to Note 15: Contingencies.
We are a defendant in a variety of legal proceedings.
While we cannot predict with certainty the ultimate results of these proceedings, we do not believe that the final outcome of these proceedings could have a material adverse effect on our financial position, results of operations, or cash flows, with the exception of the matter discussed below.
On May 9, 2011, an organization named Council for Education and Research on Toxics (“Plaintiff”) filed a lawsuit in the Superior Court of the State of California, County of Los Angeles, against us and additional defendants who manufacture, package, distribute, or sell packaged coffee.
The lawsuit is Council for Education and Research on Toxics v.
Brad Barry LLC, et al., and was a tag along to a 2010 lawsuit against companies selling “ready-to-drink” coffee based on the same claims.
Both cases have since been consolidated and now include nearly eighty defendants, which constitute the great majority of the coffee industry in California.
The Plaintiff alleges that we and the other defendants failed to provide warnings for our coffee products of exposure to the chemical acrylamide as required under California Health and Safety Code Section 25249.5, the California Safe Drinking Water and Toxic Enforcement Act of 1986, better known as "Proposition 65".
The Plaintiff seeks equitable relief, including providing warnings to consumers of coffee products, as well as civil penalties in the amount of the statutory maximum of two thousand five hundred dollars per day per violation of Proposition 65.
The Plaintiff asserts that every consumed cup of coffee, absent a compliant warning, is equivalent to a violation under Proposition 65.
As part of a joint defense group organized to defend against the lawsuit, we dispute the claims of the Plaintiff.
Acrylamide is not added to coffee, but is present in all coffee in small amounts (measured in parts per billion) as a byproduct of the coffee bean roasting process.
We have asserted multiple affirmative defenses.
Trial of the first phase of the case commenced on September 8, 2014, and was limited to three affirmative defenses shared by all defendants.
On September 1, 2015, the trial court issued a final ruling adverse to the defendants on all Phase 1 defenses.
Trial of the second phase of the case commenced in the fall of calendar year 2017.
On March 28, 2018, the trial court issued a proposed ruling adverse to the defendants on the Phase 2 defense, our last remaining defense to liability.
The trial court finalized and affirmed its Phase 2 ruling on May 7, 2018 and, therefore, the trial will proceed to the third phase regarding remedies issues.
At this stage of the proceedings, prior to a trial on remedies issues, we are unable to predict or reasonably estimate the potential loss or effect on our operations.
Accordingly, no loss contingency has been recorded for this matter as of April 30, 2018, as the likelihood of loss is not considered probable or estimable.
The trial court has discretion to impose zero penalties against us or to impose significant statutory penalties.
Significant labeling or warning requirements that could potentially be imposed by the trial court may increase our costs and adversely affect sales of our coffee products, as well as involve substantial expense and operational disruption, which could have a material adverse impact on our financial position, results of operations, or cash flows.
Furthermore, a future appellate court decision could reverse the trial court rulings.
The outcome and the financial impact of settlement, or the trial or appellate court rulings of the case, if any, cannot be predicted at this time.
For additional information, see “Note 15: Contingencies” in our 2018 Annual Report to Shareholders.
Cover and table of contents
8 rewritten, 42 added, 4 removed, 53 unchanged
For the fiscal year ended April 30, [removed: 2018][added: 2019]
| Title of each class | [added: Trading symbol] | Name of each exchange on which registered |
| Common shares, no par value | [added: SJM] | New York Stock Exchange |
Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate website, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).
| Non-accelerated filer | | o [removed: (Do not check if a smaller reporting company)] | | Smaller reporting company | | o |
The aggregate market value of the common shares held by nonaffiliates of the registrant at October 31, [removed: 2017,] [added: 2018,] was [removed: $11,386,975,264.][added: $11,679,828,981.]
As of June [removed: 12, 2018, 113,535,111] [added: 10, 2019, 113,742,653] common shares of The J. M. Smucker Company were issued and outstanding.
Certain sections of the registrant’s definitive Proxy Statement to be filed in connection with its Annual Meeting of Shareholders to be held on August [removed: 15, 2018,] [added: 14, 2019,] are incorporated by reference into Part III of this [removed: Report, and certain sections of the registrant’s 2018] Annual Report [removed: to Shareholders are incorporated by reference into Parts I and II of this Report.][added: on Form 10-K.]
10-K 1 sjm43019-10k.htm 10-K
_______________________________________________
| | | |
| | | |
| | | |
| | | |
TABLE OF CONTENTS
| | | |
| --- | --- | --- |
| | | |
| PART I. | | Page No. |
| | | |
| Item 1. | Business | [2](#sa1c05535c2e34835bdfc628f4c07058a) |
| Item 1A. | Risk Factors | [7](#s87113c8dae754c11bb7f560b1cce49a2) |
| Item 1B. | Unresolved Staff Comments | [15](#s88e6c9097a4f4bfcb99c1744a2785cfe) |
| Item 2. | Properties | [16](#s25189219a32340049fd89b1b50dd09d9) |
| Item 3. | Legal Proceedings | [16](#s6e9bd5ddfb6044ecbbcb586cb00907e8) |
| Item 4. | Mine Safety Disclosures | [16](#s143f88dccfd846c184413f8464b4857f) |
| | | |
| PART II. | | |
| | | |
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | [17](#sa057436150a74a86857ed324d41dd441) |
| Item 6. | Selected Financial Data | [18](#s80d0dc963cee46bf9e99368eb129a5ea) |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | [19](#s794b1c59424642afb43fae8bf35ff060) |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | [32](#s89f9cc7950694db7b3f152d5bdd0a0ee) |
| Item 8. | Financial Statements and Supplementary Data | [34](#sfc1b497d718e4a1c9ee3b29c08876f5e) |
| Item 9. | Changes In and Disagreements with Accountants on Accounting and Financial Disclosures | [74](#sb6cd22339bb04f36b6a5ba9a5438f014) |
| Item 9A. | Controls and Procedures | [74](#s5eb4447600a342f986b985d688cb9a6b) |
| Item 9B. | Other Information | [74](#s9640757540954bf7804c49c7fdb9e2f4) |
| | | |
| PART III. | | |
| | | |
| Item 10. | Directors, Executive Officers and Corporate Governance | [75](#s132e26f75ead4a7ea81897a9d973f5ca) |
| Item 11. | Executive Compensation | [75](#sf5ba98caae1f4b3494904a802dcdc1ea) |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | [75](#s37fc9be1450f42719e3f73c4d87f62b4) |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | [75](#s1879eeefbe2f4f08a479a178e89f1821) |
| Item 14. | Principal Accounting Fees and Services | [75](#sfdcc2d3a7eab4f01a0885a02ffb79a0b) |
| | | |
| PART IV. | | |
| | | |
10-K 1 sjm43018-10xk.htm 10-K
________________________________________________
| Rights to purchase preferred shares | | New York Stock Exchange |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
An excerpt. Shown here: all 8 rewritten, 40 of 42 added and all 4 removed. The counts are complete. For every sentence, read Cover and table of contents in the FY2019 filing and the FY2018 filing.
Item 1B. Unresolved Staff Comments.
0 rewritten, 45 added, 0 removed, 1 unchanged
| | |
| --- | --- |
| Item 2. | Properties. |
The table below lists all of our manufacturing and processing facilities at April 30, 2019.
All of our properties are maintained and updated on a regular basis, and we continue to make investments for expansion and safety and technological improvements.
We believe that the capacity at our existing facilities will be sufficient to sustain current operations and the anticipated near-term growth of our businesses.
We own all of the properties listed below, except as noted.
Additionally, our principal distribution centers in the U.S. include three that we own and seven that we lease.
We also lease our principal distribution center in Canada.
Our distribution facilities are in good condition, and we believe that they have sufficient capacity to meet our distribution needs in the near future.
We lease eight sales and administrative offices in the U.S. and one in Canada.
Our corporate headquarters is located in Orrville, Ohio, and our Canadian headquarters is located in Markham, Ontario.
| | | | | |
| --- | --- | --- | --- | --- |
| | | | | |
| 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 |
| | |
An excerpt. Shown here: all 0 rewritten, 40 of 45 added and all 0 removed. The counts are complete. For every sentence, read Item 1B. Unresolved Staff Comments. in the FY2019 filing and the FY2018 filing.
Item 4. Mine Safety Disclosures.
3 rewritten, 16 added, 34 removed, 14 unchanged
| Total | | [removed: 911] [added: 2,579] | | | $ | [removed: 123.67] [added: 111.50] | | | — | | | 3,586,598 | |
[added: |] (a) [added: |] Shares in this column include shares repurchased from stock plan recipients in lieu of cash payments. [added: |]
[added: |] (d) [added: |] As of April 30, [removed: 2018,] [added: 2019,] there were 3,586,598 common shares remaining available for future repurchase pursuant to our Board of [removed: Directors'] [added: Directors’] authorizations. [added: |]
Our common shares are listed on the New York Stock Exchange – ticker symbol SJM.
There were approximately 311,613 shareholders of record as of June 10, 2019, of which approximately 37,413 were registered holders of common shares.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers: The following table presents the total number of shares of common stock purchased during the fourth quarter of 2019, the average price paid per share, the number of shares that were purchased as part of a publicly announced repurchase program, if any, and the approximate dollar value of the maximum number of shares that may yet be purchased under the share repurchase program:
| 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 | |
Comparison of Cumulative Total Return: The following graph compares the cumulative total shareholder return for the five years ended April 30, 2019, for our common shares, the Standard & Poor’s (“S&P”) Packaged Foods & Meats Index, and the S&P 500 Index.
These figures assume all dividends are reinvested when received and are based on $100.00 invested in our common shares and the referenced index funds on April 30, 2014.
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | 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 | | |
Executive Officers of the Registrant.
The names, ages as of June 15, 2018, and current positions of the executive officers are listed below.
All executive officers serve at the pleasure of the Board of Directors, with no fixed term of office.
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Name | | Age | | Years with Company | | Position | | Served as an Officer Since |
| Richard K. Smucker | | 70 | | 45 | | Executive Chairman (A) | | 1974 |
| Mark T. Smucker | | 48 | | 20 | | President and Chief Executive Officer (B) | | 2001 |
| Mark R. Belgya | | 57 | | 33 | | Vice Chair and Chief Financial Officer (C) | | 1997 |
| Barry C. Dunaway | | 55 | | 31 | | President, Pet Food and Pet Snacks (D) (J) | | 2001 |
| Tina R. Floyd | | 52 | | 23 | | Senior Vice President and General Manager, Consumer Foods(E) | | 2018 |
| Jeannette L. Knudsen | | 48 | | 15 | | Senior Vice President, General Counsel and Secretary (F) | | 2009 |
| David J. Lemmon | | 50 | | 24 | | President, Canada, International, and U.S. Away From Home (G) (J) | | 2012 |
| Jill R. Penrose | | 45 | | 14 | | Senior Vice President, Human Resources and Corporate Communications (H) | | 2014 |
| Joseph Stanziano | | 51 | | 21 | | Senior Vice President and General Manager, Coffee (I) | | 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) | Mr. Dunaway was elected to his present position in March 2016, having served as President, International and Chief Administrative Officer since April 2015. Prior to that time, he served as Senior Vice President and Chief Administrative Officer since May 2011. |
| (E) | 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. |
| (F) | Ms. Knudsen was elected to her present position in May 2016, having served as Vice President, General Counsel and Corporate Secretary since August 2010. |
| (G) | Mr. Lemmon was elected to his present position in August 2017, having served as Vice President and General Manager, International since January 2016. Prior to that time, he served as Vice President and Managing Director, Canada and International since April 2015 and Vice President and Managing Director, Canada since May 2012. |
| (H) | 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. |
| (I) | 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. |
| (J) | Effective June 25, 2018, Mr. Lemmon will assume the position of President, Pet Food and Pet Snacks, and Mr. Dunaway will assume the position of Executive Advisor, Pet, until his retirement on July 31, 2018. |
(a) The information pertaining to the market for our common shares and other related shareholder information is incorporated herein by reference to the information set forth in our 2018 Annual Report to Shareholders under the captions “Stock Price Data” and “Comparison of Five-Year Cumulative Total Shareholder Return.”
(b) Not applicable.
(c) Issuer Purchases of Equity Securities
| February 1, 2018 - February 28, 2018 | | 10 | | | $ | 118.76 | | | — | | | 3,586,598 | |
| March 1, 2018 - March 31, 2018 | | 463 | | | 126.73 | | | | — | | | 3,586,598 | |
| April 1, 2018 - April 30, 2018 | | 438 | | | 120.55 | | | | — | | | 3,586,598 | |
Information set forth in the table above represents the activity in our fourth fiscal quarter.
Item 6. Selected Financial Data.
0 rewritten, 569 added, 1 removed, 0 unchanged
FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA
The following table presents selected financial data for each of the five years in the period ended April 30, 2019.
The selected financial data should be read in conjunction with the “Results of Operations” and “Liquidity and Capital Resources” sections within Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto.
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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | |
| | 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: | | | | | | | | | | | | | | | | | | | |
Five-year summaries of our selected financial data and discussions of items which materially affect the comparability of the selected financial data are incorporated herein by reference to the information set forth in our 2018 Annual Report to Shareholders under the following captions: “Five-Year Summary of Selected Financial Data,” “Management’s Discussion and Analysis,” “Note 1: Accounting Policies,” “Note 2: Acquisitions,” and “Note 3: Integration and Restructuring Costs.”
An excerpt. Shown here: all 0 rewritten, 40 of 569 added and all 1 removed. The counts are complete. For every sentence, read Item 6. Selected Financial Data. in the FY2019 filing and the FY2018 filing.
Item 9A. Controls and Procedures.
2 rewritten, 0 added, 3 removed, 1 unchanged
[added: Evaluation of Disclosure Controls and Procedures:] Management, including the principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act), as of April 30, [removed: 2018] [added: 2019] (the “Evaluation Date”).
[added: Changes in Internal Controls:] There were no changes in internal control over financial reporting that occurred during the fourth quarter ended April 30, [removed: 2018,] [added: 2019,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Evaluation of Disclosure Controls and Procedures.
Changes in Internal Controls.
Management’s report on internal control over financial reporting and the attestation report of our independent registered public accounting firm are set forth in our 2018 Annual Report to Shareholders under the headings “Report of Management on Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting,” which reports are incorporated herein by reference.
Item 10. Directors, Executive Officers and Corporate Governance.
2 rewritten, 0 added, 0 removed, 3 unchanged
The information required by this Item as to the directors of the Company, the Audit Committee, the Audit Committee financial expert, and compliance with Section 16(a) of the Exchange Act is incorporated herein by reference to the information set forth under the captions “Election of Directors,” “Corporate Governance,” “Board and Committee Meetings,” and “Ownership of Common Shares” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on August [removed: 15, 2018.][added: 14, 2019.]
[removed: Information] [added: The information] required by [added: this] Item [removed: 10] as to the executive officers of the Company is [removed: included in] [added: incorporated herein by reference to] Part [removed: I of] [added: I, Item 1 in] this Annual Report on Form [removed: 10-K as permitted by Instruction 3 to Item 401(b) of Regulation S-K.][added: 10-K.]
Item 11. Executive Compensation.
1 rewritten, 0 added, 0 removed, 0 unchanged
The information required by this Item is incorporated [added: herein] by reference to the information set forth under the captions “Executive Compensation,” “Board and Committee Meetings,” and “Compensation Committee Interlocks and Insider Participation” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on August [removed: 15, 2018.][added: 14, 2019.]
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
1 rewritten, 0 added, 0 removed, 0 unchanged
The information required by this Item is incorporated [added: herein] by reference to the information set forth under the captions “Ownership of Common Shares” and “Equity Compensation Plan Information” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on August [removed: 15, 2018.][added: 14, 2019.]
Item 13. Certain Relationships and Related Transactions, and Director Independence.
1 rewritten, 0 added, 0 removed, 0 unchanged
The information required by this Item is incorporated [added: herein] by reference to the information set forth under the captions “Corporate Governance” and “Related Party Transactions” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on August [removed: 15, 2018.][added: 14, 2019.]
Item 14. Principal Accountant Fees and Services.
1 rewritten, 0 added, 0 removed, 1 unchanged
The information required by this Item is incorporated [added: herein] by reference to the information set forth under the captions “Service Fees Paid to the Independent Registered Public Accounting Firm” and “Audit Committee Pre-Approval Policies and Procedures” in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on August [removed: 15, 2018.][added: 14, 2019.]
Item 15. Exhibits and Financial Statement Schedules.
62 rewritten, 3 added, 33 removed, 73 unchanged
| (a)(1) | | Financial [removed: Statements] [added: Statements:] |
| | | See the Index to Financial [removed: Statements, which is included] [added: Statements] on page [removed: F-1] [added: 34] of this [added: Annual] Report. |
| (a)(2) | | Financial Statement [removed: Schedules] [added: Schedules:] |
| (a)(3) | | [removed: Exhibits] [added: Exhibits:] |
| Date: June [removed: 18, 2018] [added: 17, 2019] | The J. M. Smucker Company | |
| Mark T. Smucker | | President and Chief Executive Officer and Director (Principal Executive Officer) | | June [removed: 18, 2018] [added: 17, 2019] |
| Mark R. Belgya | | Vice Chair and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | June [removed: 18, 2018] [added: 17, 2019] |
| Timothy P. Smucker | | Chairman Emeritus | | June [removed: 18, 2018] [added: 17, 2019] |
| Richard K. Smucker | | Executive Chairman | | June [removed: 18, 2018] [added: 17, 2019] |
| Kathryn W. Dindo | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Paul J. Dolan | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Jay L. Henderson | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Elizabeth Valk Long | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Gary A. Oatey | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Kirk L. Perry | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Sandra Pianalto | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Nancy Lopez Russell | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Alex Shumate | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Dawn C. Willoughby | | Director | | June [removed: 18, 2018] [added: 17, 2019] |
| Date: June [removed: 18, 2018] [added: 17, 2019] | | | | /s/ Jeannette L. Knudsen |
[added: | | |] The following exhibits are either attached or incorporated herein by reference to another filing with the U.S. Securities and Exchange Commission. [added: |]
| [removed: [2.2](https://www.sec.gov/Archives/edgar/data/91419/000009141918000005/sjm43018-10kex22.htm)] [added: [2.3](http://www.sec.gov/Archives/edgar/data/91419/000009141918000005/sjm43018-10kex22.htm)] | [First Amendment to Stock Purchase Agreement and Plan of Merger and Side Letter, dated as of May 14, 2018, by and among NU Pet Company, PR Merger Sub I, LLC, Ainsworth Pet Nutrition Parent, LLC, CP APN, Inc., CP APN, L.P., and, solely for the limited purpose set forth therein, The J. M. Smucker [removed: Company.](https://www.sec.gov/Archives/edgar/data/91419/000009141918000005/sjm43018-10kex22.htm)] [added: Company](http://www.sec.gov/Archives/edgar/data/91419/000009141918000005/sjm43018-10kex22.htm)] |
| [removed: [2.4](http://www.sec.gov/Archives/edgar/data/91419/000119312518107750/d512665dex21.htm)] [added: [2.2](http://www.sec.gov/Archives/edgar/data/91419/000119312518107750/d512665dex21.htm)] | [Stock Purchase Agreement and Plan of Merger, dated as of April 4, 2018, by and among NU Pet Company, PR Merger Sub I, LLC, Ainsworth Pet Nutrition Parent, LLC, CP APN, Inc., CP APN, L.P., and, solely for the limited purpose set forth therein, The J. M. Smucker [removed: Company.](http://www.sec.gov/Archives/edgar/data/91419/000119312518107750/d512665dex21.htm)] [added: Company](http://www.sec.gov/Archives/edgar/data/91419/000119312518107750/d512665dex21.htm)] |
| [removed: [4.4](http://www.sec.gov/Archives/edgar/data/91419/000119312511273396/d244108dex41.htm)] [added: [4.5](http://www.sec.gov/Archives/edgar/data/91419/000119312511273396/d244108dex41.htm)] | [Indenture, dated as of October 18, 2011, between the Company and U.S. Bank National Association](http://www.sec.gov/Archives/edgar/data/91419/000119312511273396/d244108dex41.htm) |
| [removed: [4.5](http://www.sec.gov/Archives/edgar/data/91419/000119312511273396/d244108dex42.htm)] [added: [4.6](http://www.sec.gov/Archives/edgar/data/91419/000119312511273396/d244108dex42.htm)] | [First Supplemental Indenture, dated as of October 18, 2011, among the Company, the guarantors party thereto, and U.S. Bank National Association](http://www.sec.gov/Archives/edgar/data/91419/000119312511273396/d244108dex42.htm) |
| [removed: [4.6](http://www.sec.gov/Archives/edgar/data/91419/000119312511270080/d238964dex47.htm)] [added: [4.7](http://www.sec.gov/Archives/edgar/data/91419/000119312511270080/d238964dex47.htm)] | [Third Amended and Restated Intercreditor Agreement, dated June 11, 2010, among the administrative agents and other parties identified therein](http://www.sec.gov/Archives/edgar/data/91419/000119312511270080/d238964dex47.htm) |
| [removed: [4.7](http://www.sec.gov/Archives/edgar/data/91419/000119312515101888/d892679dex41.htm)] [added: [4.8](http://www.sec.gov/Archives/edgar/data/91419/000119312515101888/d892679dex41.htm)] | [Indenture, dated as of March 20, 2015, between the Company and U.S. Bank National Association, as trustee](http://www.sec.gov/Archives/edgar/data/91419/000119312515101888/d892679dex41.htm) |
| [removed: [4.8](http://www.sec.gov/Archives/edgar/data/91419/000119312515101888/d892679dex41.htm)] [added: [4.9](http://www.sec.gov/Archives/edgar/data/91419/000119312515101888/d892679dex42.htm)] | [First Supplemental Indenture, dated as of March 20, 2015, by and among the Company, the guarantors party thereto and U.S. Bank National Association, as [removed: trustee](http://www.sec.gov/Archives/edgar/data/91419/000119312515101888/d892679dex41.htm)] [added: trustee](http://www.sec.gov/Archives/edgar/data/91419/000119312515101888/d892679dex42.htm)] |
| [removed: [4.9](http://www.sec.gov/Archives/edgar/data/91419/000119312517364964/d502236dex41.htm)] [added: [4.10](http://www.sec.gov/Archives/edgar/data/91419/000119312517364964/d502236dex41.htm)] | [Second Supplemental Indenture, dated as of December 7, 2017, between the Company and U.S. Bank National Association, as trustee](http://www.sec.gov/Archives/edgar/data/91419/000119312517364964/d502236dex41.htm) |
| [removed: [10.12](http://www.sec.gov/Archives/edgar/data/91419/000129993312000917/exhibit1.htm)] [added: [10.11](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1026.htm)] | [Form of Restricted Stock [removed: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000129993312000917/exhibit1.htm)] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1026.htm)] |
| [removed: [10.13](http://www.sec.gov/Archives/edgar/data/91419/000129993312000917/exhibit2.htm)] [added: [10.12](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1027.htm)] | [Form of Deferred Stock Units [removed: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000129993312000917/exhibit2.htm)] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1027.htm)] |
| [removed: [10.14](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1026.htm)] [added: [10.14](http://www.sec.gov/Archives/edgar/data/91419/000119312515310563/d39655dex101.htm)] | [Form of Restricted Stock [removed: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1026.htm)] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000119312515310563/d39655dex101.htm)] |
| [removed: [10.15](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1027.htm)] [added: [10.18](http://www.sec.gov/Archives/edgar/data/91419/000009141917000005/sjm43017-10kex1021.htm)] | [Form of Deferred Stock Units [removed: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1027.htm)] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000009141917000005/sjm43017-10kex1021.htm)] |
| [removed: [10.16](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1028.htm)] [added: [10.13](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1028.htm)] | [Form of Special One-Time Grant of Restricted Stock Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000119312513266625/d537487dex1028.htm) |
| [removed: [10.17](http://www.sec.gov/Archives/edgar/data/91419/000119312515310563/d39655dex101.htm)] [added: [10.17](http://www.sec.gov/Archives/edgar/data/91419/000009141917000005/sjm43017-10kex1020.htm)] | [Form of Restricted Stock [removed: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000119312515310563/d39655dex101.htm)] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000009141917000005/sjm43017-10kex1020.htm)] |
| [removed: [10.18](http://www.sec.gov/Archives/edgar/data/91419/000009141916000014/sjm20161031-10qex101.htm)] [added: [10.15](http://www.sec.gov/Archives/edgar/data/91419/000009141916000014/sjm20161031-10qex101.htm)] | [Form of Special One-Time Grant of Restricted Stock Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000009141916000014/sjm20161031-10qex101.htm) |
| [removed: [10.19](http://www.sec.gov/Archives/edgar/data/91419/000009141916000014/sjm20161031-10qex102.htm)] [added: [10.16](http://www.sec.gov/Archives/edgar/data/91419/000009141916000014/sjm20161031-10qex102.htm)] | [Form of Special One-Time Grant of Deferred Stock Units Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000009141916000014/sjm20161031-10qex102.htm) |
| [removed: [10.20](http://www.sec.gov/Archives/edgar/data/91419/000009141917000005/sjm43017-10kex1020.htm)] [added: [10.20](https://www.sec.gov/Archives/edgar/data/91419/000009141919000005/sjm43019-10kex1020.htm)] | [Form of Restricted Stock [removed: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000009141917000005/sjm43017-10kex1020.htm)] [added: Agreement*](https://www.sec.gov/Archives/edgar/data/91419/000009141919000005/sjm43019-10kex1020.htm)] |
| [removed: [10.21](http://www.sec.gov/Archives/edgar/data/91419/000009141917000005/sjm43017-10kex1021.htm)] [added: [10.21](https://www.sec.gov/Archives/edgar/data/91419/000009141919000005/sjm43019-10kex1021.htm)] | [Form of Deferred Stock Units [removed: Agreement*](http://www.sec.gov/Archives/edgar/data/91419/000009141917000005/sjm43017-10kex1021.htm)] [added: Agreement*](https://www.sec.gov/Archives/edgar/data/91419/000009141919000005/sjm43019-10kex1021.htm)] |
| [removed: [10.22](http://www.sec.gov/Archives/edgar/data/91419/000095015209002427/l35751aexv10w5.htm)] [added: [10.24](http://www.sec.gov/Archives/edgar/data/91419/000095015209002427/l35751aexv10w5.htm)] | [The J. M. Smucker Company Nonemployee Director Deferred Compensation Plan (Amended and Restated Effective January 1, 2007)*](http://www.sec.gov/Archives/edgar/data/91419/000095015209002427/l35751aexv10w5.htm) |
| [4.4](http://www.sec.gov/Archives/edgar/data/91419/000119312518202526/d622941dex41.htm) | [Amendment No. 3, dated as of June 25, 2018, to the Rights Agreement, dated as of May 20, 2009, by and between the Company and Computershare Trust Company, N.A., as rights agent, and subsequently amended as of February 3, 2015, and October 24, 2016](http://www.sec.gov/Archives/edgar/data/91419/000119312518202526/d622941dex41.htm) |
| [10.19](https://www.sec.gov/Archives/edgar/data/91419/000009141919000005/sjm43019-10kex1019.htm) | [Form of Performance Units Agreement*](https://www.sec.gov/Archives/edgar/data/91419/000009141919000005/sjm43019-10kex1019.htm) |
| [10.22](https://www.sec.gov/Archives/edgar/data/91419/000009141919000005/sjm43019-10kex1022.htm) | [Form of Nonstatutory Stock Option Agreement*](https://www.sec.gov/Archives/edgar/data/91419/000009141919000005/sjm43019-10kex1022.htm) |
| | | See the Index of Exhibits beginning on page 24 of this Report. |
| | |
| --- | --- |
INDEX OF EXHIBITS
| [2.3](http://www.sec.gov/Archives/edgar/data/1259045/000119312513466889/d597937dex103.htm) | [Purchase Agreement dated as of October 9, 2013, among Del Monte Corporation, Del Monte Foods Consumer Products, Inc., and, for the limited purposes set forth therein, Del Monte Pacific Limited](http://www.sec.gov/Archives/edgar/data/1259045/000119312513466889/d597937dex103.htm) |
| [10.11](http://www.sec.gov/Archives/edgar/data/91419/000095012311024851/l41777exv10w1.htm) | [Omnibus Amendment to Restricted Stock Agreements for Folgers Employees, dated as of November 4, 2010*](http://www.sec.gov/Archives/edgar/data/91419/000095012311024851/l41777exv10w1.htm) |
| [10.33](http://www.sec.gov/Archives/edgar/data/51410/000091205701541198/a2064418zex-2_1.txt) | [Amended and Restated Asset Purchase and Sale Agreement, dated as of October 24, 2001, by and among General Mills, Inc., The Pillsbury Company, and International Multifoods Corporation](http://www.sec.gov/Archives/edgar/data/51410/000091205701541198/a2064418zex-2_1.txt) |
| [10.34](http://www.sec.gov/Archives/edgar/data/51410/000091205702001244/a2067381zex-10_2.txt) | [Retail Trademark License Agreement, dated November 13, 2001, between The Pillsbury Company and International Multifoods Corporation](http://www.sec.gov/Archives/edgar/data/51410/000091205702001244/a2067381zex-10_2.txt) |
| [10.35](http://www.sec.gov/Archives/edgar/data/51410/000104746903017906/a2110639zex-10_29.htm) | [Amendment to Retail Trademark License Agreement, dated December 23, 2002, between The Pillsbury Company and International Multifoods Corporation](http://www.sec.gov/Archives/edgar/data/51410/000104746903017906/a2110639zex-10_29.htm) |
| [10.36](http://www.sec.gov/Archives/edgar/data/51410/000091205701541198/a2064418zex-2_2.txt) | [Closing Agreement, dated as of November 13, 2001, by and among General Mills, Inc., The Pillsbury Company, and International Multifoods Corporation](http://www.sec.gov/Archives/edgar/data/51410/000091205701541198/a2064418zex-2_2.txt) |
| [10.37](http://www.sec.gov/Archives/edgar/data/51410/000110465903000674/j6840_ex10d1.htm) | [Omnibus Amendment Agreement, dated as of January 16, 2003, by and among General Mills, Inc., The Pillsbury Company, International Multifoods Corporation, and Sebesta Blomberg & Associates, Inc.](http://www.sec.gov/Archives/edgar/data/51410/000110465903000674/j6840_ex10d1.htm) |
| [10.44](http://www.sec.gov/Archives/edgar/data/91419/000119312517275705/d450231dex102.htm) | [Amendment No. 1, dated as of September 1, 2017, to the Term Loan Credit Agreement, by and among the Company, Bank of America, N.A., as administrative agent and as a lender, and the several financial institutions from time to time party thereto](http://www.sec.gov/Archives/edgar/data/91419/000119312517275705/d450231dex102.htm) |
| [10.45](http://www.sec.gov/Archives/edgar/data/91419/000119312518146699/d556043dex101.htm) | [Term Loan Credit Agreement, dated as of April 27, 2018, among the Company, as borrower, the lenders party thereto, and Bank of America, N.A., as administrative agent](http://www.sec.gov/Archives/edgar/data/91419/000119312518146699/d556043dex101.htm) |
| [12.1](https://www.sec.gov/Archives/edgar/data/91419/000009141918000005/sjm43018-10kex121.htm) | [Computation of Ratio of Earnings to Fixed Charges](https://www.sec.gov/Archives/edgar/data/91419/000009141918000005/sjm43018-10kex121.htm) |
| [13](https://www.sec.gov/Archives/edgar/data/91419/000009141918000005/sjm43018-10kex13.htm) | [Excerpts from our 2018 Annual Report to Shareholders. Such Annual Report, except those portions thereof that are expressly incorporated herein by reference, is furnished for the information of the Commission only and is not deemed to be filed as part of this Annual Report on Form 10-K](https://www.sec.gov/Archives/edgar/data/91419/000009141918000005/sjm43018-10kex13.htm) |
THE J. M. SMUCKER COMPANY
ANNUAL REPORT ON FORM 10-K
INDEX TO FINANCIAL STATEMENTS
| | Annual Report to Shareholders |
| Data incorporated by reference to the 2018 Annual Report to Shareholders of The J. M. Smucker Company: | |
| Report of Management on Internal Control Over Financial Reporting | 45 |
| Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting | 46 |
| Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements | 47 |
| Report of Management on Responsibility for Financial Reporting | 48 |
| Consolidated Balance Sheets at April 30, 2018 and 2017 | 50-51 |
| For the years ended April 30, 2018, 2017, and 2016: | |
| Statements of Consolidated Income | 49 |
| Statements of Consolidated Comprehensive Income | 49 |
| Statements of Consolidated Cash Flows | 52 |
| Statements of Consolidated Shareholders’ Equity | 53 |
| Notes to Consolidated Financial Statements | 54-85 |
Financial statement schedules are omitted because they are not applicable or because the information required is set forth in the Consolidated Financial Statements or the notes thereto.
F-1
An excerpt. Shown here: 40 of 62 rewritten, all 3 added and all 33 removed. The counts are complete. For every sentence, read Item 15. Exhibits and Financial Statement Schedules. in the FY2019 filing and the FY2018 filing.
Item 2. Properties.
0 rewritten, 0 added, 47 removed, 0 unchanged
Dropped this year
The table below lists all of our manufacturing and processing facilities at April 30, 2018.
(A) All of our properties are maintained and updated on a regular basis, and we continue to make investments for expansion and safety and technological improvements.
For instance, in addition to the facilities listed below, we purchased land in Longmont, Colorado, and are constructing a second Smucker's Uncrustables frozen sandwich facility there.
We believe that the capacity at our existing facilities, combined with the additional capacity at the Longmont facility, will be sufficient to sustain current operations and the anticipated near-term growth of our businesses.
Production is expected to begin at the Longmont facility during 2020.
We own all of the properties listed below, except as noted.
Additionally, our principal distribution centers in the U.S. include three that we own and six that we lease.
We also lease our principal distribution center in Canada.
Our distribution facilities are in good condition, and we believe that they have sufficient capacity to meet our distribution needs in the near future.
We lease eight sales and administrative offices in the U.S., and one each in China, Canada, and Mexico.
(B) Our corporate headquarters is located in Orrville, Ohio, and our Canadian headquarters is located in Markham, Ontario.
We lease the principal headquarters of our pet food business located in San Francisco, California, as well as additional administrative facilities dedicated to that business in Burbank, California.
(B)
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| 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 |
| 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 |
| 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) (C) | | 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 (C) | | 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 |
| Toledo, Ohio | | Baking mixes, frostings, and flour | | U.S. Retail Consumer Foods |
| Topeka, Kansas | | Dry dog and cat food and dog and cat snacks | | U.S. Retail Pet Foods |
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An excerpt. Shown here: all 0 rewritten, all 0 added and 40 of 47 removed. The counts are complete. For every sentence, read Item 2. Properties. in the FY2018 filing.
Item 8. Financial Statements and Supplementary Data.
0 rewritten, 0 added, 2 removed, 0 unchanged
Dropped this year
Consolidated financial statements at April 30, 2018 and 2017, and for each of the years in the three-year period ended April 30, 2018, with the report of independent registered public accounting firm and selected unaudited quarterly financial data, are incorporated herein by reference to the information set forth in our 2018 Annual Report to Shareholders
under the caption “Summary of Quarterly Results of Operations” and beginning with “Report of Management on Internal Control Over Financial Reporting” through “Note 17: Common Shares.”