Financial HighlightsYear Ended April 30, (Dollars in thousands, except per share data)20112010 Net sales$4,825,743$4,605,289 Net income and net income per common share: Net income$479,482$494,138 Net income per common share — assuming dilution$4.05$4.15 Income and income per common share excluding special project costs:(1) Income$555,133$520,782 Income per common share — assuming dilution$4.69$4.37 Common shares outstanding at year end114,172,122119,119,152 Number of employees4,5004,850(1) Refer to “Non-GAAP Measures” located on page 28 in the “Management’s Discussion and Analysis” section for a reconciliation to the comparable GAAP financial measure. Contents Why We Are, Who We Are 1 Letter To Shareholders and Friends 2 Why the Family Meal Matters 4 A Focused Strategy 6 Business Review 8 Sustainability 16 Financial Review 17 Management’s Discussion and Analysis 20 Consolidated Financial Statements 37 Notes to Consolidated Financial Statements 42 Directors and Officers 68 Corporate and Shareholder Information 69 “Apple Orchard”© 2001 — Vincent McIndoe About Our Cover This year our Annual Report cover pays tribute to the heritage of The J. M. Smucker Company and the first Smucker product — apple butter. Artist Vincent McIndoe from Toronto, Canada, is best known for his graphics and oil painting style in his award-winning paintings and posters. |
The J. M. Smucker Company Why We Are, Who We Are ...Our Culture A culture of dotting the is and crossing the of doing therightthings and doingthingsright... A culture of growth — individual and as a company. It’s who we are. It’sbecauseof who we are. It’s a result of living our Basic Beliefs... Our Commitment to Each Other. To our consumers and to our customers. As we look to the future of unlimited possibilities, we recognize the principles that are instrumental to our success... A culture deeply rooted in our Basic Beliefs... Guideposts for decisions at every level...Whywe arewhowe are. A culture that encourages commitment to each other... Clear communication and collaboration... Vision...A culture of appreciation. Afamily-sense of sharing in a job well done...Where every person makes a difference. |
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 1
• | Sales grew to $4.8 billion, an increase of five percent over last year, due to strong performance across many of the brands in our portfolio. | ||
• | The strength of our brands and our ability to manage successfully through a volatile commodity cost environment resulted in a seven percent increase in non-GAAP earnings per share to $4.69. | ||
• | We repurchased approximately 5.7 million common shares that represented over four percent of shares outstanding. We also increased our dividends paid to shareholders by 17 percent. | ||
Continuous investment in our Company has resulted in a portfolio of iconic brands, the majority of which hold category-leading market positions. This leadership reflects our long-held philosophy of delivering great products at a fair value. We believe value is as much about quality, consistency, and trust as it is about price. |
• | New product innovation contributed significantly to the Company’s growth, particularly within our coffee, peanut butter, and baking brands. | ||
• | Our consumer communications efforts continued to drive brand equity, and we continued to be the primary share-of-voice for most of our categories. As a result, we produced an unprecedented number of television and broadband video advertisements during the year. | ||
• | We dramatically increased our digital marketing and social media programs, which now comprise over 10 percent of our Company’s media spend. |
• | Vincent C. Byrd is now President and Chief Operating Officer with responsibility for the Company’s U.S. Retail businesses. A 34-year veteran of the Company, Vincent was previously President of U.S. Retail Coffee. | ||
• | Mark T. Smucker, who has served in Company leadership roles for 13 years, most recently as President of Special Markets, now heads U.S. Retail Coffee as President. | ||
• | Paul Smucker Wagstaff, a 15-year Company veteran, has assumed the role of President, U.S. Retail Consumer Foods in a newly consolidated business area combining the current Consumer business with the Oils and Baking business. | ||
• | Steven Oakland, who was President ofSmucker’s®, Jif®,andHungry Jack®, is now President, International, Foodservice, and Natural Foods. Steven has been with Smucker for 28 years. | ||
• | Barry C. Dunaway, formerly Senior Vice President, Corporate and Organization Development, with 24 years experience with the Company, is now Senior Vice President and Chief Administrative Officer, overseeing Human Resources, Legal, Corporate Development, and Information Services. |
2 THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT
• | Mark R. Belgya, our Senior Vice President and Chief Financial Officer and a 26-year veteran of the Company, adds Internal Audit to his responsibilities that include Accounting, Investor Relations, Financial Planning, Tax, and Treasury. |
Tim Smucker | Richard Smucker |
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 3
Why the Family Meal Matters While strong financial results are important, we ultimately define our business success by how well we fulfillOur Purpose:Bringing families together to share memorable meals and moments. We believe, and research demonstrates, a shared mealtime experience leads to happier and healthier families. “Sitting down to a meal together draws a line around us,” says Miriam Weinstein, author ofThe Surprising Power of Family Meals. “It encloses us and, for a brief time, strengthens the bonds that connect us with other members of our self-defined clan, shutting out the rest of the world.” Weinstein partners with Smucker on our website,PowerOfFamilyMeals.com. Her insights are supported by numerous research studies that reveal the benefits gained from family-shared meals: Better grades Healthier eating habits Fewer behavioral problems Less family tension Closer family bonds The power of the family meal helps family members connect with each other, teaches children valuable life lessons, and establishes an important ritual that allows them to grow together. These families are happier, healthier, and forge stronger and more resilient family ties. This is why we strive to make meal planning and preparation easier, offering products that are convenient, delicious, and nutritious to help families enjoy more meals together — anywhere, any time, every day. |
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 5
A Focused StrategyOur Visionis to own and market food brands that hold the #1 position in their respective categories — categories that are typically located in the center of the store. This Strategy, along with our unique culture, has helped to shape a decade of transformational growth for Smucker. In the United States, seven of our brands hold #1 market share positions in their respective categories, and Smucker brands enjoy top positions in eight categories in Canada. As one ofOur Basic Beliefs, Growthremains central to our long-term strategy. We target net sales growth of six percent and earnings per share growth of greater than eight percent annually. We plan to grow our business through category and market share growth, new products, and acquisitions of leading brands. Acquisitions may be “enabling,” which provide new or enhanced capabilities; “bolt-on,” which increase our category presence; or “transformational,” which provide entry into new markets and/or categories. This Strategy, combined with the strength of our brand portfolio and our people, will enable us to further build upon our position as one of the leading branded dry grocery food manufacturers in North America.U.S. RETAIL COFFEE MARKET U.S. RETAIL CONSUMER MARKET |
6 THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT
U.S. RETAIL OILS AND BAKING MARKET SPECIAL MARKETS |
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 7
Our Company has a history of ongoing marketing support to strengthen our brands. Fiscal 2011 saw significant advancement in our digital and social marketing investments, complementing an unprecedented year in the development of new television commercials. The net result is that our portfolio of leading brands continues to strengthen, evolve, and connect with consumers. |
8 THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT
U.S. Retail Co_ee Market Our U.S. Retail Coffee Market enjoyed solid sales and segment profit in fiscal 2011 and continues to be the market leader in the packaged coffee category. Sales growth of 14 percent was driven by theFolgers®andDunkin’ Donuts® brands along with the launch of our single-serve K-Cup® portion packs. Profit for the business increased 11 percent. The introduction ofFolgers Gourmet Selections® andMillstone® single-serve K-Cup® portion packs was the most successful new product launch in Company history and has provided us with a strong position in the fastest-growing segment for single-serve coffee. OtherFolgerscoffee marketplace success stories included volume growth of more than 45 percent forFolgersBlack Silk coffee and a relaunch ofFolgers Special Roast® coffee with new packaging and product formulation. TheFolgers brand also engaged consumers through its highly successfulFolgersJingle Contest, launch of theFolgersbrand on Facebook, and new television commercials.Dunkin’ Donutshas become the fifth-largest brand in our portfolio and the second-leading brand in the premium coffee segment. TheDunkin’ Turbo®variety andDunkin’ Donutscoffee seasonal flavors, Toasted Almond and Strawberry Shortcake, contributed to this success. We continue to make capital investments to expand coffee operations at our New Orleans, Louisiana, manufacturing facilities. In early fiscal 2012, we acquired the coffee brands and business operations of Rowland Coffee Roasters, Inc., a leading marketer of Hispanic coffee brands, includingCafé BusteloandCafé Pilon,and one of the largest producers of espresso coffee in the United States. The rich heritage of these brands will provide us with a unique opportunity to strengthen our presence in the coffee category among Hispanic consumers in the United States. |
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 9
U.S. Retail Consumer Market Sales within our U.S. Retail Consumer Market segment grew by one percent, excluding the impact of divestitures, and segment profit grew by three percent in fiscal 2011. In addition to new product introductions and strong consumer communications support, our ongoing investments in this segment include the construction of a new state-of-the-art manufacturing facility in Orrville, Ohio, that will support future growth and enhance operational efficiency.Smucker’sfruit spreads andJifpeanut butter continued to grow and strengthen their #1 positions within their categories, offering quality, variety, and value options for everyone to enjoy.Smucker’s® Uncrustables®sandwiches andSmucker’s® Snack’n Waffles™brand waffles remain popular, delicious, and convenient meal and snack options, bringing smiles to consumers of all ages.Smucker’sfruit spreads,Jifpeanut butter, andHungry Jackpancake mixes and syrups remain family meal favorites, and they offered consumers more choices through the introduction of new products during fiscal 2011, including two new flavors ofSmucker’s® Orchard’s Finest®preserves;Jif® To Go™peanut butter; andHungry Jack sugar-free, butter-flavored syrup.Smucker’sice cream toppings, perfect for celebrations and special treats, continue to offer variety as well as consumer favorites, such asSmucker’s® Sundae Syrup™caramel-flavored syrup andSmucker’shot fudge topping. TheSmucker’s, Jif, andHungry Jackbrands continue to connect with our consumers through marketing initiatives, including theJifbrand’s search for the most creative peanut butter sandwich; the launch ofSmucker’s,Jif, andHungry JackFacebook pages; and the debut ofSmucker’sfruit spreads’ first holiday commercial depicting Tim and Richard Smucker as boys in the 1950s. |
10 THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT
“Easy” is one way we think about new products to meet the needs of our consumers.Jif® To Go™ peanut butter was created for consumers who are seeking the great taste ofJif®peanut butter in a convenient size that’s perfect for dipping and snacking while on the go. |
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 11
U.S. Retail Oils and Baking Market Although segment sales in our U.S. Retail Oils and Baking Market declined two percent and profits were down nine percent in a challenging operating environment, the segment had a strong finish to fiscal 2011. Our family of leading oils and baking brands continues to offer consumers a variety of products that can be a part of everyday meals or special occasions. Product innovation contributed to the strength of our baking brands in fiscal 2011 as thePillsbury® brand became the only national baking brand to offer sugar-free frostings, brownie mixes and cake mixes. These product alternatives make it possible for consumers monitoring their sugar intake to also enjoy dessert options. In addition toPillsbury, theMartha White® brand maintains strong consumer loyalty for its flour and baking mixes and successfully launched new coffee cake baking mixes during the year. TheCrisco® brand celebrated its 100th anniversary this year and has enjoyed a long history of being a key part of family recipes for many generations. Awareness ofCriscoolive oil continues to increase, and the product was recommended byCooking Lightmagazine as the “Best All-Around” olive oil. We are broadening engagement with consumers through theCriscobrand website, Facebook, mobile applications, and blogger events.Eagle Brand® remains the #1 brand of sweetened condensed milk and recently introduced a new easy-to-open package, providing greater convenience when baking special family recipes. |
12 THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT
ThePillsbury®line of sugar-free frostings, brownie mixes, and cake mixes allows the growing number of consumers who are monitoring their sugar intake to enjoy these great-tasting desserts. |
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 13
TheR.W. Knudsen Family® brand understands the value of using the highest quality natural and organic ingredients possible in its extensive line of juices. This focus on quality has helped drive the brand’s growth from an organic grape vineyard in Paradise, California, into the nation’s leading natural and organic juice brand, which is celebrating its 50th anniversary in 2011. |
14 THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT
Special Markets Our Special Markets segment experienced a strong fiscal 2011 across all four of its business areas — Canada, foodservice, natural foods, and international. Led by the continued growth ofFolgerscoffee across the segment, net sales and profits grew five percent and 14 percent, respectively. In Canada, our brands enjoy market-share leadership in eight categories. Collectively, our Canadian portfolio experienced solid sales growth led by the strong performance of the coffee category. We continue to invest in our brands through new product launches and advertising support, as evidenced by the debut of four new television commercials during the year. Our foodservice business area maintained strong results in a market where many families are choosing to eat at home due to economic considerations. In this market, we remain focused on our very popular handheld products such asSmucker’s Uncrustables sandwiches andSmucker’s Snack’n Wafflesbrand waffles. Foodservice also is increasing its focus on growing the coffee business to complement its strong core product offerings. Smucker Natural Foods also experienced a very successful fiscal 2011. Innovation and new products continued to drive growth in natural foods during the year. New product launches includedRecharge® all-natural sports drink mixes, two new flavors ofR.W. Knudsen Family®Sparkling Essence™ beverages, and new offerings ofSanta Cruz Organic® fruit spreads and lemonades. Finally, our international business area continues to provide consumers in more than 65 countries the opportunity to enjoy our products. The Company is also focused on expansion of its business in Mexico and future growth opportunities in China. |
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 15
Sustainability Matters Respecting our natural environment and being an active participant in the communities in which we live and work have been defining attributes of The J. M. Smucker Company since our founding. Our Sustainability Strategy summarizes our integrated focus onEconomic, Environmental,andSocialsustainability:Create a better tomorrow by focusing on preserving our culture, ensuring our long-term economic viability, limiting our environmental impact, and being socially responsible. During fiscal 2011, we continued to execute this strategy by working toward our five-year sustainability goals, participating in the Carbon Disclosure Project for the second year, and publishing our inaugural Corporate Responsibility Report, which we invite all of our constituents to read atsmuckers.com. |
Cherry Almond Dutch Baby Chopped Italian Salad with Italian Vinaigrette Crunchy Pesto Chicken Paillards with Caprese Salsa Fresh Tomato Tart with Black Pepper Cornbread Crust Peanut Butter Topped Chocolate Cake Grilled Shrimp with Greek Wheat Berry Salad |
1 tablespoon Dijon-style mustard
1/4 teaspoon salt
1/4 teaspoon coarse ground black pepper
2 tablespoons chopped herbs, a mixture of basil, oregano and thyme
1/2 cupCrisco® Pure Olive Oil
1/3 cup sliced roasted red peppers, drained
1/4 pound sliced salami, cut into strips
1/3 cup chopped red onion
1 1/2 cups sliced ripe black olives
1 cup diced provolone cheese
1. | COMBINE balsamic vinegar, mustard, salt, pepper and herbs in a food processor or blender. Process on high speed until the mixture is well blended. With the motor running, slowly add olive oil in a steady stream. |
2. | TOSS salad ingredients together to combine. Add vinaigrette. Stir until evenly coated. |
3/4 cup milk
1/2 cupPillsbury BEST®All Purpose Flour
2 large eggs
2 tablespoons sugar
1/2 teaspoon almond extract
1/4 cup sliced almonds
1/2 cupSmucker’s®Orchard’s Finest® Michigan Red Tart Cherry Preserves
Powdered sugar for garnish (optional)
1. | HEAT oven to 425ºF. Melt butter in 9-inch pie plate in the oven. Remove from oven. Brush butter over entire inside of plate. |
2. | COMBINE milk, flour, eggs, sugar and almond extract in blender container. Process using several pulses to make a smooth batter. Pour batter into hot pie plate. Sprinkle with almonds. Bake 15 minutes. |
3. | REDUCE heat to 350°F. Bake 5 to 8 minutes longer or until golden brown. Remove from oven. Spread with cherry preserves. Sprinkle with powdered sugar if desired. Cut into wedges and serve immediately. |
Pillsbury BEST is a trademark of The Pillsbury Company, LLC, used under license.
1 large egg
1/4 cup sour cream
1/2 cup milk
1 (6 oz.) packageMartha White® Buttermilk Cornbread & Muffin Mix
1 teaspoon coarsely ground black pepper
2 tablespoonsCrisco Pure Olive Oil
1 cup shredded sharp cheddar cheese
1 cup shredded mozzarella cheese
1/2 cup mayonnaise
1 to 2 tablespoons chopped fresh basil
1 to 2 tablespoons chopped fresh chives
Salt and pepper
1. | HEAT oven to 425ºF. Generously spray 13x9-inch baking pan with no-stick cooking spray. Whisk together egg, sour cream and milk in large bowl. Whisk in cornbread mix and pepper until smooth. Stir in olive oil just until blended. Pour into prepared pan. Bake 12 to 15 minutes or until golden brown. Cornbread will be thin. |
2. | CUT tomatoes into medium-thick slices. Drain on paper towels. Stir together cheeses, mayonnaise, basil and chives until combined. |
3. | SPREAD about half the cheese mixture over cornbread. Arrange tomato slices over cheese in overlapping rows. Salt and pepper to taste. Place spoonfuls of remaining cheese mixture on tomato slices. Return to oven for 5 minutes or until cheese begins to melt. Turn on broiler. Broil until cheese is bubbly and lightly browned, 1 to 2 minutes. Cut into squares. Serve warm or at room temperature. |
Kosher salt and freshly ground black pepper, divided
1/2 cupPillsbury BEST® All Purpose Flour
1/4 cupCrisco® Pure Olive Oil, plus 1 1/2 to 2 tablespoons, divided
2 tablespoons prepared pesto
1 cup panko (coarse) bread crumbs
1/3 cup fresh basil, cut to chiffonade (thin strips)
2/3 cup mozzarella cheese, cut into 1/2-inch cubes
1/4 cup red onion, thinly sliced
2 tablespoonsCrisco 100% Extra Virgin Olive Oil
1 teaspoon balsamic vinegar
1. | CUT chicken breasts in half horizontally to form 4 thin cutlets. Pound each piece to 1/4-inch thickness. Sprinkle with salt and pepper. Dip chicken in flour and shake off excess. |
2. | WHISK 1/4 cup of pure olive oil with pesto in a small pie plate. In another pie plate, place bread crumbs. Dip both sides of each cutlet into oil, then into bread crumb mixture, pressing crumbs to adhere. |
3. | COMBINE tomato, basil, mozzarella and red onion; drizzle with extra virgin olive oil and balsamic vinegar. Season with salt and pepper to taste and set aside. |
4. | HEAT remaining pure olive oil in a large non-stick skillet. Add chicken and quickly cook about 2 minutes per side, until no longer pink. |
1 teaspoon salt, divided
4 cups hot water
1/3 cupCrisco® Pure Olive Oil
3 tablespoons fresh lemon juice
1 teaspoon dill weed
2 cloves garlic, minced
1/2 teaspoon black pepper
16 large uncooked shrimp, peeled and deveined
1 large red bell pepper, cut into about 20, 3/4-inch squares
2 cups diced unpeeled English cucumbers
1 cup pitted kalamata olives, cut in half lengthwise
2 green onions, cut in 1/2-inch pieces
1/2 cup crumbled feta cheese
1. | PLACE wheat berries and 1/2 teaspoon salt in medium saucepan. Cover with about 4 cups hot water. Bring to a boil over high heat. Reduce heat to low. Cover and simmer 1 to 1 1/4 hours or until tender. Drain. |
2. | WHISK olive oil, lemon juice, dill weed, garlic, black pepper and remaining 1/2 teaspoon salt in large bowl. Combine 2 tablespoons oil mixture with shrimp and red pepper in medium bowl; stir to coat. Let stand 15 minutes. Reserve remaining oil mixture. |
3. | THREAD red pepper and shrimp onto 4 soaked wooden or metal skewers, beginning and ending with red pepper. Grill, turning once, until shrimp are pink and opaque in center, about 3 to 4 minutes per side. |
4. | ADD cooked wheat berries, cucumbers, olives and green onions to reserved oil mixture. Mix well. Spoon onto serving plates. Place cooked kabobs over salad mixture. Sprinkle with feta cheese. |
1 (16 oz.) packagePillsbury® Sugar Free Devil’s Food Cake Mix
1 1/4 cups water
1/2 cupCrisco Pure Vegetable Oil
3 large eggs
1 cup cold skim milk
1 (1 oz.) package sugar-free, fat-free, instant vanilla pudding mix
2/3 cupSimply Jif® Creamy Peanut Butter
1 (8 oz.) container frozen sugar-free whipped topping, thawed
1/4 cup finely chopped dry roasted or cocktail peanuts
1. | HEAT oven to 325ºF. Coat a 15x10-inch jelly roll pan with no-stick cooking spray. |
2. | PREPARE cake mix batter according to package directions using water, oil and eggs. Spread in prepared pan. Bake 16 to 20 minutes or until toothpick inserted in center comes out clean. Cool completely in pan on wire rack. |
3. | BEAT milk and pudding mix in large bowl with electric mixer on medium speed until thickened, about 15 seconds. Add peanut butter; beat until smooth. Beat in whipped topping until smooth. Spread over cooled cake. Garnish with chopped peanuts. |
Year Ended April 30, | ||||||||||||||||||||
(Dollars in thousands, except per share data) | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||
Statements of Income: | ||||||||||||||||||||
Net sales | $ | 4,825,743 | $ | 4,605,289 | $ | 3,757,933 | $ | 2,524,774 | $ | 2,148,017 | ||||||||||
Gross profit | $ | 1,798,517 | $ | 1,786,690 | $ | 1,251,429 | $ | 782,164 | $ | 702,055 | ||||||||||
% of net sales | 37.3 | % | 38.8 | % | 33.3 | % | 31.0 | % | 32.7 | % | ||||||||||
Operating income | $ | 784,272 | $ | 790,909 | $ | 452,275 | $ | 284,559 | $ | 254,648 | ||||||||||
% of net sales | 16.3 | % | 17.2 | % | 12.0 | % | 11.3 | % | 11.9 | % | ||||||||||
Net income | $ | 479,482 | $ | 494,138 | $ | 265,953 | $ | 170,379 | $ | 157,219 | ||||||||||
Financial Position: | ||||||||||||||||||||
Cash and cash equivalents | $ | 319,845 | $ | 283,570 | $ | 456,693 | $ | 171,541 | $ | 199,541 | ||||||||||
Total assets | 8,324,585 | 7,974,853 | 8,192,161 | 3,129,881 | 2,693,823 | |||||||||||||||
Total debt | 1,304,039 | 910,000 | 1,536,726 | 789,684 | 425,643 | |||||||||||||||
Shareholders’ equity | 5,292,363 | 5,326,320 | 4,939,931 | 1,799,853 | 1,795,657 | |||||||||||||||
Statements of Cash Flows: | ||||||||||||||||||||
Net cash provided by operating activities | $ | 391,562 | $ | 713,478 | $ | 446,993 | $ | 182,918 | $ | 273,607 | ||||||||||
Capital expenditures | 180,080 | 136,983 | 108,907 | 76,430 | 57,002 | |||||||||||||||
Quarterly dividends paid | 194,024 | 166,224 | 110,668 | 68,074 | 63,632 | |||||||||||||||
Purchase of treasury shares | 389,135 | 5,569 | 4,025 | 152,521 | 52,125 | |||||||||||||||
Share Data: | ||||||||||||||||||||
Weighted-average shares outstanding | 118,165,751 | 118,951,434 | 85,448,592 | 56,641,810 | 56,844,151 | |||||||||||||||
Weighted-average shares outstanding — assuming dilution | 118,276,086 | 119,081,445 | 85,547,530 | 56,873,492 | 57,233,399 | |||||||||||||||
Dividends declared per common share | $ | 1.68 | $ | 1.45 | $ | 6.31 | $ | 1.22 | $ | 1.14 | ||||||||||
Earnings per Common Share: | ||||||||||||||||||||
Net income | $ | 4.06 | $ | 4.15 | $ | 3.11 | $ | 3.01 | $ | 2.77 | ||||||||||
Net income — assuming dilution | 4.05 | 4.15 | 3.11 | 3.00 | 2.75 | |||||||||||||||
Non-GAAP Measures: (1) | ||||||||||||||||||||
Gross profit excluding special project costs | $ | 1,852,606 | $ | 1,790,560 | $ | 1,251,429 | $ | 783,674 | $ | 712,036 | ||||||||||
% of net sales | 38.4 | % | 38.9 | % | 33.3 | % | 31.0 | % | 33.1 | % | ||||||||||
Operating income excluding special project costs | $ | 897,423 | $ | 830,312 | $ | 535,170 | $ | 297,273 | $ | 266,810 | ||||||||||
% of net sales | 18.6 | % | 18.0 | % | 14.2 | % | 11.8 | % | 12.4 | % | ||||||||||
Income and income per common share excluding special project costs: | ||||||||||||||||||||
Income | $ | 555,133 | $ | 520,782 | $ | 321,617 | $ | 178,881 | $ | 165,152 | ||||||||||
Income per common share — assuming dilution | $ | 4.69 | $ | 4.37 | $ | 3.76 | $ | 3.15 | $ | 2.89 |
(1) | Refer to “Non-GAAP Measures” located on page 28 in the “Management’s Discussion and Analysis” section for a reconciliation to the comparable GAAP financial measure. |
NET SALES (Dollars in billions) NON-GAAP NET INCOME (Dollars in millions) NON-GAAP EARNINGS PER SHARE E ASSUMING DILUTION $2.1 $2.5 $3.8 $4.6 $4.8 2007 2008 2009 2010 2011 $165.2 2007 $178.9 2008 $321.6 2009 $520.8 $555.1 2011 $2.89 2007 $3.15 2008 $3.76 2009 $4.37 $4.69 2010 2011 |
The J. M. Smucker Company
Net Income per | ||||||||||||||||||||||||
Net Income per | Common Share - | |||||||||||||||||||||||
(Dollars in thousands, except per share data) | Quarter Ended | Net Sales | Gross Profit | Net Income | Common Share | Assuming Dilution | ||||||||||||||||||
2011 | July 31, 2010 | $ | 1,047,312 | $ | 408,435 | $ | 102,881 | $ | 0.86 | $ | 0.86 | |||||||||||||
October 31, 2010 | 1,278,913 | 494,670 | 149,726 | 1.25 | 1.25 | |||||||||||||||||||
January 31, 2011 | 1,312,351 | 474,414 | 131,995 | 1.12 | 1.11 | |||||||||||||||||||
April 30, 2011 | 1,187,167 | 420,998 | 94,880 | 0.82 | 0.82 | |||||||||||||||||||
2010 | July 31, 2009 | $ | 1,051,526 | $ | 406,029 | $ | 98,063 | $ | 0.83 | $ | 0.83 | |||||||||||||
October 31, 2009 | 1,278,745 | 492,250 | 139,990 | 1.18 | 1.18 | |||||||||||||||||||
January 31, 2010 | 1,205,939 | 458,304 | 135,479 | 1.14 | 1.14 | |||||||||||||||||||
April 30, 2010 | 1,069,079 | 430,107 | 120,606 | 1.01 | 1.01 |
Quarter Ended | High | Low | Dividends | |||||||||||||
2011 | July 31, 2010 | $ | 63.75 | $ | 53.27 | $ | 0.40 | |||||||||
October 31, 2010 | 64.55 | 57.20 | 0.40 | |||||||||||||
January 31, 2011 | 66.28 | 60.46 | 0.44 | |||||||||||||
April 30, 2011 | 75.46 | 61.16 | 0.44 | |||||||||||||
2010 | July 31, 2009 | $ | 51.06 | $ | 39.19 | $ | 0.35 | |||||||||
October 31, 2009 | 55.36 | 49.08 | 0.35 | |||||||||||||
January 31, 2010 | 63.00 | 51.19 | 0.35 | |||||||||||||
April 30, 2010 | 63.50 | 57.72 | 0.40 |
The J. M. Smucker Company
$250 $200 $150 $100 $50 $0 4/06 4/07 4/08 4/09 4/10 4/11 the J. M. Smucker Company S&P 500 S&P Packaged Foods & Meats |
April 30, | ||||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | 2011 | |||||||||||||||||||
The J. M. Smucker Company | $ | 100.00 | $ | 145.74 | $ | 133.19 | $ | 118.70 | $ | 189.15 | $ | 238.88 | ||||||||||||
S&P 500 | 100.00 | 115.24 | 109.85 | 71.06 | 98.66 | 115.65 | ||||||||||||||||||
S&P Packaged Foods & Meats | 100.00 | 119.46 | 117.29 | 92.84 | 129.98 | 151.12 |
www.researchdatagroup.com/S&P.htm
The J. M. Smucker Company
The J. M. Smucker Company
RESULTS OF OPERATIONS |
Year Ended April 30, | ||||||||||||||||||||||||
% Increase | % Increase | |||||||||||||||||||||||
(Dollars in millions, except per share data) | 2011 | 2010 | (Decrease) | 2010 | 2009 | (Decrease) | ||||||||||||||||||
Net sales | $ | 4,825.7 | $ | 4,605.3 | 5 | % | $ | 4,605.3 | $ | 3,757.9 | 23 | % | ||||||||||||
Gross profit | $ | 1,798.5 | $ | 1,786.7 | 1 | % | $ | 1,786.7 | $ | 1,251.4 | 43 | % | ||||||||||||
% of net sales | 37.3 | % | 38.8 | % | 38.8 | % | 33.3 | % | ||||||||||||||||
Operating income | $ | 784.3 | $ | 790.9 | (1 | )% | $ | 790.9 | $ | 452.3 | 75 | % | ||||||||||||
% of net sales | 16.3 | % | 17.2 | % | 17.2 | % | 12.0 | % | ||||||||||||||||
Net income: | ||||||||||||||||||||||||
Income | $ | 479.5 | $ | 494.1 | (3 | )% | $ | 494.1 | $ | 266.0 | 86 | % | ||||||||||||
Income per common share — assuming dilution | $ | 4.05 | $ | 4.15 | (2 | )% | $ | 4.15 | $ | 3.11 | 33 | % | ||||||||||||
Gross profit excluding special project costs(1) | $ | 1,852.6 | $ | 1,790.6 | 3 | % | $ | 1,790.6 | $ | 1,251.4 | 43 | % | ||||||||||||
% of net sales | 38.4 | % | 38.9 | % | 38.9 | % | 33.3 | % | ||||||||||||||||
Operating income excluding special project costs(1) | $ | 897.4 | $ | 830.3 | 8 | % | $ | 830.3 | $ | 535.2 | 55 | % | ||||||||||||
% of net sales | 18.6 | % | 18.0 | % | 18.0 | % | 14.2 | % | ||||||||||||||||
Income excluding special project costs:(1) | ||||||||||||||||||||||||
Income | $ | 555.1 | $ | 520.8 | 7 | % | $ | 520.8 | $ | 321.6 | 62 | % | ||||||||||||
Income per common share — assuming dilution | $ | 4.69 | $ | 4.37 | 7 | % | $ | 4.37 | $ | 3.76 | 16 | % |
(1) | Refer to “Non-GAAP Measures” located on page 28 in the “Management’s Discussion and Analysis” section for a reconciliation to the comparable GAAP financial measure. |
2011 Compared to 2010
Year Ended April 30, | ||||||||||||||||
Increase | ||||||||||||||||
(Dollars in millions) | 2011 | 2010 | (Decrease) | % | ||||||||||||
Net sales | $ | 4,825.7 | $ | 4,605.3 | $ | 220.5 | 5 | % | ||||||||
Adjust for certain noncomparable items: | ||||||||||||||||
Divestiture | — | (40.4 | ) | 40.4 | 1 | |||||||||||
Foreign exchange | (22.1 | ) | — | (22.1 | ) | — | ||||||||||
Net sales, excluding divestiture and foreign exchange | $ | 4,803.7 | $ | 4,564.9 | $ | 238.8 | 5 | % | ||||||||
The J. M. Smucker Company
Year Ended April 30, | ||||||||||||||||
Increase | ||||||||||||||||
(Dollars in millions) | 2010 | 2009 | (Decrease) | % | ||||||||||||
Net sales | $ | 4,605.3 | $ | 3,757.9 | $ | 847.4 | 23 | % | ||||||||
Adjust for certain | ||||||||||||||||
noncomparable items: | ||||||||||||||||
Acquisitions | (920.9 | ) | — | (920.9 | ) | (25 | ) | |||||||||
Divestiture | — | (6.3 | ) | 6.3 | — | |||||||||||
Foreign exchange | (23.4 | ) | — | (23.4 | ) | (1 | ) | |||||||||
Net sales, excluding acquisitions, divestiture, and foreign exchange | $ | 3,661.0 | $ | 3,751.6 | $ | (90.6 | ) | (2 | )% | |||||||
Year Ended April 30, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Gross profit | 37.3 | % | 38.8 | % | 33.3 | % | ||||||
Selling, distribution, and administrative expenses: | ||||||||||||
Marketing | 3.4 | % | 3.8 | % | 3.7 | % | ||||||
Advertising | 2.4 | 2.8 | 2.1 | |||||||||
Selling | 3.3 | 3.3 | 3.5 | |||||||||
Distribution | 3.2 | 3.3 | 3.5 | |||||||||
General and administrative | 5.6 | 5.9 | 5.1 | |||||||||
Total selling, distribution, and administrative expenses | 17.9 | % | 19.1 | % | 17.9 | % | ||||||
Amortization | 1.5 | 1.6 | 1.0 | |||||||||
Impairment charges | 0.4 | 0.3 | 0.1 | |||||||||
Restructuring and merger and integration costs | 1.2 | 0.8 | 2.2 | |||||||||
Other operating expense (income) — net | — | (0.2 | ) | 0.1 | ||||||||
Operating income | 16.3 | % | 17.2 | % | 12.0 | % | ||||||
The J. M. Smucker Company
The J. M. Smucker Company
Year Ended April 30, | ||||||||||||||||||||||||
% Increase | % Increase | |||||||||||||||||||||||
(Dollars in millions) | 2011 | 2010 | (Decrease) | 2010 | 2009 | (Decrease) | ||||||||||||||||||
Net sales: | ||||||||||||||||||||||||
U.S. Retail Coffee Market | $ | 1,930.9 | $ | 1,700.5 | 14 | % | $ | 1,700.5 | $ | 855.6 | 99 | % | ||||||||||||
U.S. Retail Consumer Market | 1,091.6 | 1,125.3 | (3 | ) | 1,125.3 | 1,103.3 | 2 | |||||||||||||||||
U.S. Retail Oils and Baking Market | 888.0 | 905.7 | (2 | ) | 905.7 | 995.5 | (9 | ) | ||||||||||||||||
Special Markets | 915.3 | 873.8 | 5 | 873.8 | 803.6 | 9 | ||||||||||||||||||
Segment profit: | ||||||||||||||||||||||||
U.S. Retail Coffee Market | $ | 536.1 | $ | 484.0 | 11 | % | $ | 484.0 | $ | 211.1 | 129 | % | ||||||||||||
U.S. Retail Consumer Market | 295.0 | 285.2 | 3 | 285.2 | 249.4 | 14 | ||||||||||||||||||
U.S. Retail Oils and Baking Market | 116.6 | 128.0 | (9 | ) | 128.0 | 116.9 | 9 | |||||||||||||||||
Special Markets | 154.4 | 134.9 | 14 | 134.9 | 105.0 | 28 | ||||||||||||||||||
Segment profit margin: | ||||||||||||||||||||||||
U.S. Retail Coffee Market | 27.8 | % | 28.5 | % | 28.5 | % | 24.7 | % | ||||||||||||||||
U.S. Retail Consumer Market | 27.0 | 25.3 | 25.3 | 22.6 | ||||||||||||||||||||
U.S. Retail Oils and Baking Market | 13.1 | 14.1 | 14.1 | 11.7 | ||||||||||||||||||||
Special Markets | 16.9 | 15.4 | 15.4 | 13.1 |
The J. M. Smucker Company
The J. M. Smucker Company
Liquidity
Year Ended April 30, | ||||||||||||||
(Dollars in millions) | 2011 | 2010 | 2009 | |||||||||||
Net cash provided by operating activities | $ | 391.6 | $ | 713.5 | $ | 447.0 | ||||||||
Net cash used for investing activities | (192.9 | ) | (104.4 | ) | (177.0 | ) | ||||||||
Net cash (used for) provided by financing activities | (170.4 | ) | (788.5 | ) | 12.6 | |||||||||
Net cash provided by operating activities | $ | 391.6 | $ | 713.5 | $ | 447.0 | ||||||||
Additions to property, plant, and equipment | (180.1 | ) | (137.0 | ) | (108.9 | ) | ||||||||
Free cash flow | $ | 211.5 | $ | 576.5 | $ | 338.1 | ||||||||
April 30, | ||||||||
(Dollars in millions) | 2011 | 2010 | ||||||
Current portion of long-term debt | $ | — | $ | 10.0 | ||||
Long-term debt | 1,304.0 | 900.0 | ||||||
Total debt | $ | 1,304.0 | $ | 910.0 | ||||
Shareholders’ equity | 5,292.4 | 5,326.3 | ||||||
Total capital | $ | 6,596.4 | $ | 6,236.3 | ||||
The J. M. Smucker Company
Year Ended April 30, | ||||||||||||||||||||
(Dollars in thousands, except per share data) | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||
Reconciliation to gross profit: | ||||||||||||||||||||
Gross profit | $ | 1,798,517 | $ | 1,786,690 | $ | 1,251,429 | $ | 782,164 | $ | 702,055 | ||||||||||
Cost of products sold — restructuring | 54,089 | 3,870 | — | 1,510 | 9,981 | |||||||||||||||
Gross profit excluding special project costs | $ | 1,852,606 | $ | 1,790,560 | $ | 1,251,429 | $ | 783,674 | $ | 712,036 | ||||||||||
Reconciliation to operating income: | ||||||||||||||||||||
Operating income | $ | 784,272 | $ | 790,909 | $ | 452,275 | $ | 284,559 | $ | 254,648 | ||||||||||
Merger and integration costs | 11,194 | 33,692 | 72,666 | 7,967 | 61 | |||||||||||||||
Cost of products sold — restructuring | 54,089 | 3,870 | — | 1,510 | 9,981 | |||||||||||||||
Other restructuring costs | 47,868 | 1,841 | 10,229 | 3,237 | 2,120 | |||||||||||||||
Operating income excluding special project costs | $ | 897,423 | $ | 830,312 | $ | 535,170 | $ | 297,273 | $ | 266,810 | ||||||||||
Reconciliation to net income: | ||||||||||||||||||||
Income before income taxes | $ | 717,164 | $ | 730,753 | $ | 396,065 | $ | 254,788 | $ | 241,004 | ||||||||||
Merger and integration costs | 11,194 | 33,692 | 72,666 | 7,967 | 61 | |||||||||||||||
Cost of products sold — restructuring | 54,089 | 3,870 | — | 1,510 | 9,981 | |||||||||||||||
Other restructuring costs | 47,868 | 1,841 | 10,229 | 3,237 | 2,120 | |||||||||||||||
Income before income taxes, excluding special project costs | $ | 830,315 | $ | 770,156 | $ | 478,960 | $ | 267,502 | $ | 253,166 | ||||||||||
Income taxes, as adjusted | 275,182 | 249,374 | 157,343 | 88,621 | 88,014 | |||||||||||||||
Income excluding special project costs | $ | 555,133 | $ | 520,782 | $ | 321,617 | $ | 178,881 | $ | 165,152 | ||||||||||
Weighted-average shares — assuming dilution | 118,276,086 | 119,081,445 | 85,547,530 | 56,873,492 | 57,233,399 | |||||||||||||||
Income per common share excluding special project costs — assuming dilution | $ | 4.69 | $ | 4.37 | $ | 3.76 | $ | 3.15 | $ | 2.89 | ||||||||||
The J. M. Smucker Company
More | ||||||||||||||||||||
Less | One | Three | Than | |||||||||||||||||
Than | to Three | to Five | Five | |||||||||||||||||
(Dollars in millions) | Total | One Year | Years | Years | Years | |||||||||||||||
Debt obligations | $ | 1,304.0 | $ | — | $ | 100.0 | $ | 199.0 | $ | 1,005.0 | ||||||||||
Operating lease obligations | 103.6 | 26.1 | 40.8 | 22.7 | 14.0 | |||||||||||||||
Purchase obligations | 1,646.5 | 1,563.8 | 82.7 | — | — | |||||||||||||||
Other noncurrent liabilities | 180.6 | — | 2.4 | — | 178.2 | |||||||||||||||
Total | $ | 3,234.7 | $ | 1,589.9 | $ | 225.9 | $ | 221.7 | $ | 1,197.2 | ||||||||||
The J. M. Smucker Company
The J. M. Smucker Company
Year Ended April 30, | ||||||||
(Dollars in millions) | 2011 | 2010 | ||||||
Raw material commodities: | ||||||||
High | $ | 24.5 | $ | 21.2 | ||||
Low | 6.6 | 2.3 | ||||||
Average | 14.7 | 11.6 |
The J. M. Smucker Company
• | volatility of commodity markets from which raw materials, particularly green coffee beans, wheat, soybean oil, milk, and peanuts, are procured and the related impact on costs; | ||
• | risks associated with derivative and purchasing strategies employed by the Company to manage commodity pricing risks, including the risk that such strategies could result in significant losses and adversely impact the Company’s liquidity; | ||
• | crude oil price trends and their impact on transportation, energy, and packaging costs; | ||
• | the ability to successfully implement and realize the full benefit of price changes and the competitive response; | ||
• | the success and cost of introducing new products and the competitive response; | ||
• | the success and cost of marketing and sales programs and strategies intended to promote growth in the Company’s businesses; | ||
• | general competitive activity in the market, including competitors’ pricing practices and promotional spending levels; | ||
• | the ability of the Company to successfully integrate acquired and merged businesses in a timely and cost effective manner; | ||
• | the successful completion of the Company’s restructuring programs and the ability to realize anticipated savings and other potential benefits within the time frames currently contemplated; | ||
• | the impact of food safety concerns involving either the Company or its competitors’ products; | ||
• | the impact of accidents and natural disasters, including crop failures and storm damage; | ||
• | the concentration of certain of the Company’s businesses with key customers and suppliers and the ability to manage and maintain key relationships; | ||
• | the loss of significant customers, a substantial reduction in orders from such customers, or the bankruptcy of any such customer; | ||
• | changes in consumer coffee preferences and other factors affecting the coffee business, which represents a substantial portion of the Company’s business; | ||
• | the ability of the Company to obtain any required financing; | ||
• | the timing and amount of the Company’s capital expenditures, share repurchases, and restructuring costs; | ||
• | impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets or changes in useful lives of other intangible assets; | ||
• | the impact of new or changes to existing governmental laws and regulations or their application; | ||
• | the impact of future legal, regulatory, or market measures regarding climate change; | ||
• | the outcome of current and future tax examinations, changes in tax laws, and other tax matters, and their related impact on the Company’s tax positions; | ||
• | foreign currency and interest rate fluctuations; | ||
• | political or economic disruption; | ||
• | other factors affecting share prices and capital markets generally; and | ||
• | the other factors described under “Risk Factors” in registration statements filed by the Company with the Securities and Exchange Commission and in the other reports and statements filed by the Company with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and proxy materials. |
The J. M. Smucker Company
Timothy P. Smucker | Richard K. Smucker | Mark R. Belgya | ||
Chairman of the Board and Co-Chief Executive Officer | Executive Chairman and Co-Chief Executive Officer | Senior Vice President and Chief Financial Officer |
The J. M.Smucker Company
June 22, 2011
The J. M. Smucker Company
June 22, 2011
The J. M. Smucker Company
Timothy P.Smucker | Richard K.Smucker | Mark R.Belgya | ||
Chairman of the Board and Co-Chief Executive Officer | Executive Chairman and Co-Chief Executive Officer | Senior Vice President and Chief Financial Officer |
36 | THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT |
The J. M. Smucker Company
Year Ended April 30, | ||||||||||||
(Dollars in thousands, except per share data) | 2011 | 2010 | 2009 | |||||||||
Net sales | $ | 4,825,743 | $ | 4,605,289 | $ | 3,757,933 | ||||||
Cost of products sold | 2,973,137 | 2,814,729 | 2,506,504 | |||||||||
Cost of products sold — restructuring | 54,089 | 3,870 | — | |||||||||
Gross Profit | 1,798,517 | 1,786,690 | 1,251,429 | |||||||||
Selling, distribution, and administrative expenses | 863,114 | 878,221 | 673,565 | |||||||||
Amortization | 73,844 | 73,657 | 38,823 | |||||||||
Impairment charges | 17,599 | 11,658 | 1,491 | |||||||||
Merger and integration costs | 11,194 | 33,692 | 72,666 | |||||||||
Other restructuring costs | 47,868 | 1,841 | 10,229 | |||||||||
Other operating expense (income) — net | 626 | (3,288 | ) | 2,380 | ||||||||
Operating Income | 784,272 | 790,909 | 452,275 | |||||||||
Interest income | 2,512 | 2,793 | 6,993 | |||||||||
Interest expense | (69,594 | ) | (65,187 | ) | (62,478 | ) | ||||||
Other (expense) income — net | (26 | ) | 2,238 | (725 | ) | |||||||
Income Before Income Taxes | 717,164 | 730,753 | 396,065 | |||||||||
Income taxes | 237,682 | 236,615 | 130,112 | |||||||||
Net Income | $ | 479,482 | $ | 494,138 | $ | 265,953 | ||||||
Earnings per common share: | ||||||||||||
Net Income | $ | 4.06 | $ | 4.15 | $ | 3.11 | ||||||
Net Income — Assuming Dilution | $ | 4.05 | $ | 4.15 | $ | 3.11 | ||||||
The J. M. Smucker Company
April 30, | ||||||||
(Dollars in thousands) | 2011 | 2010 | ||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 319,845 | $ | 283,570 | ||||
Trade receivables, less allowance for doubtful accounts | 344,410 | 238,867 | ||||||
Inventories: | ||||||||
Finished products | 518,243 | 413,269 | ||||||
Raw materials | 345,336 | 241,670 | ||||||
863,579 | 654,939 | |||||||
Other current assets | 109,165 | 46,254 | ||||||
Total Current Assets | 1,636,999 | 1,223,630 | ||||||
Property, Plant, and Equipment | ||||||||
Land and land improvements | 77,074 | 62,982 | ||||||
Buildings and fixtures | 347,950 | 308,358 | ||||||
Machinery and equipment | 1,022,670 | 997,374 | ||||||
Construction in progress | 76,778 | 31,426 | ||||||
1,524,472 | 1,400,140 | |||||||
Accumulated depreciation | (656,590 | ) | (541,827 | ) | ||||
Total Property, Plant, and Equipment | 867,882 | 858,313 | ||||||
Other Noncurrent Assets | ||||||||
Goodwill | 2,812,746 | 2,807,730 | ||||||
Other intangible assets, net | 2,940,010 | 3,026,515 | ||||||
Other noncurrent assets | 66,948 | 58,665 | ||||||
Total Other Noncurrent Assets | 5,819,704 | 5,892,910 | ||||||
$ | 8,324,585 | $ | 7,974,853 | |||||
The J. M. Smucker Company
April 30, | ||||||||
(Dollars in thousands) | 2011 | 2010 | ||||||
Current Liabilities | ||||||||
Accounts payable | $ | 234,916 | $ | 179,509 | ||||
Accrued compensation | 62,313 | 60,080 | ||||||
Accrued trade marketing and merchandising | 62,588 | 52,536 | ||||||
Income taxes payable | 7,706 | 75,977 | ||||||
Dividends payable | 50,236 | 47,648 | ||||||
Current portion of long-term debt | — | 10,000 | ||||||
Other current liabilities | 64,917 | 53,147 | ||||||
Total Current Liabilities | 482,676 | 478,897 | ||||||
Noncurrent Liabilities | ||||||||
Long-term debt | 1,304,039 | 900,000 | ||||||
Defined benefit pensions | 98,722 | 86,968 | ||||||
Postretirement benefits other than pensions | 59,789 | 45,592 | ||||||
Deferred income taxes | 1,042,823 | 1,101,506 | ||||||
Other noncurrent liabilities | 44,173 | 35,570 | ||||||
Total Noncurrent Liabilities | 2,549,546 | 2,169,636 | ||||||
Shareholders’ Equity | ||||||||
Serial preferred shares — no par value: | ||||||||
Authorized — 3,000,000 shares; outstanding — none | — | — | ||||||
Common shares — no par value: | ||||||||
Authorized — 150,000,000 shares; outstanding — 114,172,122 in 2011 and 119,119,152 in 2010 (net of 14,432,043 and 9,485,013 treasury shares, respectively), at stated value | 28,543 | 29,780 | ||||||
Additional capital | 4,396,592 | 4,575,127 | ||||||
Retained income | 866,933 | 746,063 | ||||||
Amount due from ESOP Trust | (3,334 | ) | (4,069 | ) | ||||
Accumulated other comprehensive income (loss) | 3,629 | (20,581 | ) | |||||
Total Shareholders’ Equity | 5,292,363 | 5,326,320 | ||||||
$ | 8,324,585 | $ | 7,974,853 | |||||
The J. M. Smucker Company
Year Ended April 30, | ||||||||||||
(Dollars in thousands) | 2011 | 2010 | 2009 | |||||||||
Operating Activities | ||||||||||||
Net income | $ | 479,482 | $ | 494,138 | $ | 265,953 | ||||||
Adjustments to reconcile net income to net cash provided by operations: | ||||||||||||
Depreciation | 112,226 | 108,225 | 79,450 | |||||||||
Depreciation — restructuring | 53,569 | 3,870 | — | |||||||||
Amortization | 73,844 | 73,657 | 38,823 | |||||||||
Impairment charges | 17,599 | 11,658 | 1,491 | |||||||||
Share-based compensation expense | 24,044 | 25,949 | 22,105 | |||||||||
Other noncash restructuring charges | 8,540 | — | 9,093 | |||||||||
Loss (gain) on sale of assets — net | 2,867 | (7,831 | ) | 2,165 | ||||||||
Deferred income tax (benefit) expense | (59,801 | ) | (39,320 | ) | 25,525 | |||||||
Changes in assets and liabilities, net of effect from businesses acquired: | ||||||||||||
Trade receivables | (102,625 | ) | 31,521 | (78,631 | ) | |||||||
Inventories | (204,159 | ) | (46,160 | ) | 34,669 | |||||||
Other current assets | (45,649 | ) | 3,461 | 38,792 | ||||||||
Accounts payable and accrued items | 84,633 | (34,620 | ) | 67,883 | ||||||||
Defined benefit pension contributions | (16,779 | ) | (4,436 | ) | (34,665 | ) | ||||||
Income taxes | (66,187 | ) | 55,449 | 22,941 | ||||||||
Other — net | 29,958 | 37,917 | (48,601 | ) | ||||||||
Net Cash Provided by Operating Activities | 391,562 | 713,478 | 446,993 | |||||||||
Investing Activities | ||||||||||||
Businesses acquired, net of cash acquired | — | — | (77,335 | ) | ||||||||
Additions to property, plant, and equipment | (180,080 | ) | (136,983 | ) | (108,907 | ) | ||||||
Proceeds from sale of businesses | — | 19,554 | — | |||||||||
Purchases of marketable securities | (75,637 | ) | — | — | ||||||||
Sales and maturities of marketable securities | 57,100 | 13,519 | 3,013 | |||||||||
Proceeds from disposal of property, plant, and equipment | 5,830 | 205 | 800 | |||||||||
Other — net | (126 | ) | (738 | ) | 5,448 | |||||||
Net Cash Used for Investing Activities | (192,913 | ) | (104,443 | ) | (176,981 | ) | ||||||
Financing Activities | ||||||||||||
Repayment of bank note payable | — | (350,000 | ) | — | ||||||||
Repayments of long-term debt | (10,000 | ) | (275,000 | ) | — | |||||||
Proceeds from long-term debt | 400,000 | — | 400,000 | |||||||||
Quarterly dividends paid | (194,024 | ) | (166,224 | ) | (110,668 | ) | ||||||
Special dividends paid | — | — | (274,208 | ) | ||||||||
Purchase of treasury shares | (389,135 | ) | (5,569 | ) | (4,025 | ) | ||||||
Proceeds from stock option exercises | 14,525 | 6,413 | 1,976 | |||||||||
Other — net | 8,215 | 1,832 | (474 | ) | ||||||||
Net Cash (Used for) Provided by Financing Activities | (170,419 | ) | (788,548 | ) | 12,601 | |||||||
Effect of exchange rate changes on cash | 8,045 | 6,390 | 2,539 | |||||||||
Net increase (decrease) in cash and cash equivalents | 36,275 | (173,123 | ) | 285,152 | ||||||||
Cash and cash equivalents at beginning of year | 283,570 | 456,693 | 171,541 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 319,845 | $ | 283,570 | $ | 456,693 | ||||||
( ) | Denotes use of cash |
The J. M. Smucker Company
Accumulated | ||||||||||||||||||||||||||||
Common | Amount | Other | Total | |||||||||||||||||||||||||
(Dollars in thousands, | Shares | Common | Additional | Retained | Due from | Comprehensive | Shareholders’ | |||||||||||||||||||||
except per share data) | Outstanding | Shares | Capital | Income | ESOP Trust | Income (Loss) | Equity | |||||||||||||||||||||
Balance at May 1, 2008 | 54,622,612 | $ | 13,656 | $ | 1,181,645 | $ | 567,419 | $ | (5,479 | ) | $ | 42,612 | $ | 1,799,853 | ||||||||||||||
Net income | 265,953 | 265,953 | ||||||||||||||||||||||||||
Foreign currency translation adjustment | (47,024 | ) | (47,024 | ) | ||||||||||||||||||||||||
Pensions and other postretirement liabilities | (43,479 | ) | (43,479 | ) | ||||||||||||||||||||||||
Unrealized loss on available-for-sale securities | (2,798 | ) | (2,798 | ) | ||||||||||||||||||||||||
Unrealized loss on cash flow hedging derivatives | (6,581 | ) | (6,581 | ) | ||||||||||||||||||||||||
Comprehensive Income | 166,071 | |||||||||||||||||||||||||||
Purchase of treasury shares | (81,685 | ) | (20 | ) | (3,982 | ) | (23 | ) | (4,025 | ) | ||||||||||||||||||
Purchase business combination | 63,166,532 | 15,792 | 3,350,561 | 3,366,353 | ||||||||||||||||||||||||
Stock plans | 714,664 | 178 | 17,344 | 17,522 | ||||||||||||||||||||||||
Cash dividends declared — $6.31 per share | (408,845 | ) | (408,845 | ) | ||||||||||||||||||||||||
Tax benefit of stock plans | 2,353 | 2,353 | ||||||||||||||||||||||||||
Other | 649 | 649 | ||||||||||||||||||||||||||
Balance at April 30, 2009 | 118,422,123 | 29,606 | 4,547,921 | 424,504 | (4,830 | ) | (57,270 | ) | 4,939,931 | |||||||||||||||||||
Net income | 494,138 | 494,138 | ||||||||||||||||||||||||||
Foreign currency translation adjustment | 45,926 | 45,926 | ||||||||||||||||||||||||||
Pensions and other postretirement liabilities | (12,313 | ) | (12,313 | ) | ||||||||||||||||||||||||
Unrealized gain on available-for-sale securities | 2,652 | 2,652 | ||||||||||||||||||||||||||
Unrealized gain on cash flow hedging derivatives | 424 | 424 | ||||||||||||||||||||||||||
Comprehensive Income | 530,827 | |||||||||||||||||||||||||||
Purchase of treasury shares | (122,483 | ) | (31 | ) | (5,383 | ) | (155 | ) | (5,569 | ) | ||||||||||||||||||
Stock plans | 819,512 | 205 | 29,584 | 29,789 | ||||||||||||||||||||||||
Cash dividends declared — $1.45 per share | (172,424 | ) | (172,424 | ) | ||||||||||||||||||||||||
Tax benefit of stock plans | 3,005 | 3,005 | ||||||||||||||||||||||||||
Other | 761 | 761 | ||||||||||||||||||||||||||
Balance at April 30, 2010 | 119,119,152 | 29,780 | 4,575,127 | 746,063 | (4,069 | ) | (20,581 | ) | 5,326,320 | |||||||||||||||||||
Net income | 479,482 | 479,482 | ||||||||||||||||||||||||||
Foreign currency translation adjustment | 24,773 | 24,773 | ||||||||||||||||||||||||||
Pensions and other postretirement liabilities | (5,928 | ) | (5,928 | ) | ||||||||||||||||||||||||
Unrealized gain on available-for-sale securities | 1,359 | 1,359 | ||||||||||||||||||||||||||
Unrealized gain on cash flow hedging derivatives | 4,006 | 4,006 | ||||||||||||||||||||||||||
Comprehensive Income | 503,692 | |||||||||||||||||||||||||||
Purchase of treasury shares | (5,832,423 | ) | (1,458 | ) | (225,677 | ) | (162,000 | ) | (389,135 | ) | ||||||||||||||||||
Stock plans | 885,393 | 221 | 39,832 | 40,053 | ||||||||||||||||||||||||
Cash dividends declared — $1.68 per share | (196,612 | ) | (196,612 | ) | ||||||||||||||||||||||||
Tax benefit of stock plans | 7,310 | 7,310 | ||||||||||||||||||||||||||
Other | 735 | 735 | ||||||||||||||||||||||||||
Balance at April 30, 2011 | 114,172,122 | $ | 28,543 | $ | 4,396,592 | $ | 866,933 | $ | (3,334 | ) | $ | 3,629 | $ | 5,292,363 | ||||||||||||||
The J. M. Smucker Company
The J. M. Smucker Company
April 30, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Share-based compensation expense included in selling, distribution, and administrative expenses | $ | 19,896 | $ | 20,687 | $ | 14,043 | ||||||
Share-based compensation expense included in merger and integration costs | 4,148 | 5,262 | 8,062 | |||||||||
Share-based compensation expense included in other restructuring costs | 290 | — | — | |||||||||
Total share-based compensation expense | $ | 24,334 | $ | 25,949 | $ | 22,105 | ||||||
Related income tax benefit | $ | 8,064 | $ | 8,402 | $ | 7,261 | ||||||
The J. M. Smucker Company
The J. M. Smucker Company
The J. M. Smucker Company
Assets acquired: | ||||
Current assets | $ | 300,781 | ||
Property, plant, and equipment | 316,851 | |||
Intangible assets | 2,515,000 | |||
Goodwill | 1,643,636 | |||
Other noncurrent assets | 4,278 | |||
Total assets acquired | $ | 4,780,546 | ||
Liabilities assumed: | ||||
Current liabilities | $ | 85,795 | ||
Deferred tax liabilities | 955,235 | |||
Other noncurrent liabilities | 3,750 | |||
Total liabilities assumed | $ | 1,044,780 | ||
Net assets acquired | $ | 3,735,766 | ||
Intangible assets with finite lives: | ||||
Customer and contractual relationships (20-year weighted-average useful life) | $ | 1,089,000 | ||
Technology (14-year weighted-average useful life) | 133,000 | |||
Intangible assets with indefinite lives | 1,293,000 | |||
Total intangible assets | $ | 2,515,000 | ||
The J. M. Smucker Company
Year Ended April 30, 2009 | ||||
Net sales | $ | 4,684,746 | ||
Net income | 359,979 | |||
Net income per common share — assuming dilution | 3.04 |
Site Preparation | ||||||||||||||||||||||||
Long-Lived | Employee | and Equipment | Production | |||||||||||||||||||||
Asset Charges | Separation | Relocation | Start-up | Other Costs | Total | |||||||||||||||||||
Total expected restructuring charge | $ | 118,000 | $ | 60,000 | $ | 23,500 | $ | 23,000 | $ | 10,500 | $ | 235,000 | ||||||||||||
Balance at May 1, 2009 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Charge to expense | 3,870 | 1,139 | 407 | 16 | 279 | 5,711 | ||||||||||||||||||
Cash payments | — | (50 | ) | (407 | ) | (16 | ) | (279 | ) | (752 | ) | |||||||||||||
Noncash utilization | (3,870 | ) | — | — | — | — | (3,870 | ) | ||||||||||||||||
Balance at April 30, 2010 | $ | — | $ | 1,089 | $ | — | $ | — | $ | — | $ | 1,089 | ||||||||||||
Charge to expense | 53,569 | 36,010 | 6,192 | 5,194 | 992 | 101,957 | ||||||||||||||||||
Cash payments | — | (18,361 | ) | (6,192 | ) | (5,194 | ) | (992 | ) | (30,739 | ) | |||||||||||||
Noncash utilization | (53,569 | ) | (8,540 | ) | — | — | — | (62,109 | ) | |||||||||||||||
Balance at April 30, 2011 | $ | — | $ | 10,198 | $ | — | $ | — | $ | — | $ | 10,198 | ||||||||||||
Remaining expected restructuring charge | $ | 60,561 | $ | 22,851 | $ | 16,901 | $ | 17,790 | $ | 9,229 | $ | 127,332 | ||||||||||||
The J. M. Smucker Company
The J. M. Smucker Company
Year Ended April 30, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Net sales: | ||||||||||||
U.S. Retail Coffee Market | $ | 1,930,869 | $ | 1,700,458 | $ | 855,571 | ||||||
U.S. Retail Consumer Market | 1,091,595 | 1,125,280 | 1,103,264 | |||||||||
U.S. Retail Oils and Baking Market | 888,008 | 905,719 | 995,474 | |||||||||
Special Markets | 915,271 | 873,832 | 803,624 | |||||||||
Total net sales | $ | 4,825,743 | $ | 4,605,289 | $ | 3,757,933 | ||||||
Segment profit: | ||||||||||||
U.S. Retail Coffee Market | $ | 536,133 | $ | 484,006 | $ | 211,113 | ||||||
U.S. Retail Consumer Market | 294,970 | 285,223 | 249,439 | |||||||||
U.S. Retail Oils and Baking Market | 116,624 | 127,954 | 116,946 | |||||||||
Special Markets | 154,441 | 134,948 | 105,028 | |||||||||
Total segment profit | $ | 1,102,168 | $ | 1,032,131 | $ | 682,526 | ||||||
Interest income | 2,512 | 2,793 | 6,993 | |||||||||
Interest expense | (69,594 | ) | (65,187 | ) | (62,478 | ) | ||||||
Share-based compensation expense | (19,896 | ) | (20,687 | ) | (14,043 | ) | ||||||
Merger and integration costs | (11,194 | ) | (33,692 | ) | (72,666 | ) | ||||||
Cost of products sold — restructuring | (54,089 | ) | (3,870 | ) | — | |||||||
Other restructuring costs | (47,868 | ) | (1,841 | ) | (10,229 | ) | ||||||
Corporate administrative expenses | (184,849 | ) | (181,132 | ) | (133,313 | ) | ||||||
Other (expense) income — net | (26 | ) | 2,238 | (725 | ) | |||||||
Income before income taxes | $ | 717,164 | $ | 730,753 | $ | 396,065 | ||||||
Net sales: | ||||||||||||
Domestic | $ | 4,358,091 | $ | 4,167,042 | $ | 3,353,362 | ||||||
International: | ||||||||||||
Canada | $ | 409,710 | $ | 385,870 | $ | 356,300 | ||||||
All other international | 57,942 | 52,377 | 48,271 | |||||||||
Total international | $ | 467,652 | $ | 438,247 | $ | 404,571 | ||||||
Total net sales | $ | 4,825,743 | $ | 4,605,289 | $ | 3,757,933 | ||||||
Assets: | ||||||||||||
Domestic | $ | 7,912,311 | $ | 7,591,931 | $ | 7,670,192 | ||||||
International: | ||||||||||||
Canada | $ | 406,576 | $ | 376,788 | $ | 514,993 | ||||||
All other international | 5,698 | 6,134 | 6,976 | |||||||||
Total international | $ | 412,274 | $ | 382,922 | $ | 521,969 | ||||||
Total assets | $ | 8,324,585 | $ | 7,974,853 | $ | 8,192,161 | ||||||
Long-lived assets: | ||||||||||||
Domestic | $ | 6,502,749 | $ | 6,543,440 | $ | 6,406,085 | ||||||
International: | ||||||||||||
Canada | $ | 184,624 | $ | 207,517 | $ | 386,948 | ||||||
All other international | 213 | 266 | 237 | |||||||||
Total international | $ | 184,837 | $ | 207,783 | $ | 387,185 | ||||||
Total long-lived assets | $ | 6,687,586 | $ | 6,751,223 | $ | 6,793,270 | ||||||
The J. M. Smucker Company
Year Ended April 30, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Coffee | 44 | % | 40 | % | 25 | % | ||||||
Peanut butter | 12 | 12 | 14 | |||||||||
Fruit spreads | 8 | 8 | 9 | |||||||||
Shortening and oils | 7 | 8 | 11 | |||||||||
Baking mixes and frostings | 6 | 6 | 8 | |||||||||
Canned milk | 5 | 5 | 7 | |||||||||
Flour and baking ingredients | 5 | 5 | 7 | |||||||||
Portion control | 3 | 3 | 4 | |||||||||
Juices and beverages | 3 | 3 | 3 | |||||||||
Uncrustables frozen sandwiches | 2 | 3 | 3 | |||||||||
Toppings and syrups | 2 | 2 | 3 | |||||||||
Other | 3 | 5 | 6 | |||||||||
Total product sales | 100 | % | 100 | % | 100 | % | ||||||
Year Ended April 30, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Computation of net income per share: | ||||||||||||
Net income | $ | 479,482 | $ | 494,138 | $ | 265,953 | ||||||
Net income allocated to participating securities | 4,692 | 4,321 | 1,944 | |||||||||
Net income allocated to common stockholders | $ | 474,790 | $ | 489,817 | $ | 264,009 | ||||||
Weighted-average common shares outstanding | 117,009,362 | 117,911,160 | 84,823,849 | |||||||||
Net income per common share | $ | 4.06 | $ | 4.15 | $ | 3.11 | ||||||
Computation of net income per share — assuming dilution: | ||||||||||||
Net income | $ | 479,482 | $ | 494,138 | $ | 265,953 | ||||||
Net income allocated to participating securities | 4,690 | 4,318 | 1,947 | |||||||||
Net income allocated to common stockholders | $ | 474,792 | $ | 489,820 | $ | 264,006 | ||||||
Weighted-average common shares outstanding | 117,009,362 | 117,911,160 | 84,823,849 | |||||||||
Dilutive effect of stock options | 110,335 | 130,011 | 98,938 | |||||||||
Weighted-average common shares outstanding — assuming dilution | 117,119,697 | 118,041,171 | 84,922,787 | |||||||||
Net income per common share — assuming dilution | $ | 4.05 | $ | 4.15 | $ | 3.11 | ||||||
Year Ended April 30, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Weighted-average common shares outstanding | 117,009,362 | 117,911,160 | 84,823,849 | |||||||||
Weighted-average participating shares outstanding | 1,156,389 | 1,040,274 | 624,743 | |||||||||
Weighted-average shares outstanding | 118,165,751 | 118,951,434 | 85,448,592 | |||||||||
Dilutive effect of stock options | 110,335 | 130,011 | 98,938 | |||||||||
Weighted-average shares outstanding — assuming dilution | 118,276,086 | 119,081,445 | 85,547,530 | |||||||||
U.S. Retail | U.S. Retail | |||||||||||||||||||
U.S. Retail | Consumer | Oils and | Special | |||||||||||||||||
Coffee Market | Market | Baking Market | Markets | Total | ||||||||||||||||
Balance at May 1, 2009 | $ | 1,629,873 | $ | 569,683 | $ | 460,840 | $ | 130,995 | $ | 2,791,391 | ||||||||||
Acquisitions | 5,540 | 289 | — | 265 | 6,094 | |||||||||||||||
Foreign currency translation adjustments | — | 2,301 | 1,282 | 6,662 | 10,245 | |||||||||||||||
Balance at April 30, 2010 | $ | 1,635,413 | $ | 572,273 | $ | 462,122 | $ | 137,922 | $ | 2,807,730 | ||||||||||
Foreign currency translation adjustments | (47 | ) | 1,138 | 634 | 3,291 | 5,016 | ||||||||||||||
Balance at April 30, 2011 | $ | 1,635,366 | $ | 573,411 | $ | 462,756 | $ | 141,213 | $ | 2,812,746 | ||||||||||
April 30, 2011 | April 30, 2010 | |||||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||
Amortization/ | Amortization/ | |||||||||||||||||||||||
Acquisition | Impairment | Acquisition | Impairment | |||||||||||||||||||||
Cost | Charges | Net | Cost | Charges | Net | |||||||||||||||||||
Finite-lived intangible assets subject to amortization: | ||||||||||||||||||||||||
Customer and contractual relationships | $ | 1,180,000 | $ | 168,125 | $ | 1,011,875 | $ | 1,180,000 | $ | 95,722 | $ | 1,084,278 | ||||||||||||
Patents and technology | 134,970 | 25,980 | 108,990 | 134,970 | 15,874 | 119,096 | ||||||||||||||||||
Trademarks | 35,153 | 6,652 | 28,501 | 29,222 | 3,491 | 25,731 | ||||||||||||||||||
Total intangible assets subject to amortization | $ | 1,350,123 | $ | 200,757 | $ | 1,149,366 | $ | 1,344,192 | $ | 115,087 | $ | 1,229,105 | ||||||||||||
Indefinite-lived intangible assets not subject to amortization: | ||||||||||||||||||||||||
Trademarks | $ | 1,799,862 | $ | 9,218 | $ | 1,790,644 | $ | 1,805,793 | $ | 8,383 | $ | 1,797,410 | ||||||||||||
Total other intangible assets | $ | 3,149,985 | $ | 209,975 | $ | 2,940,010 | $ | 3,149,985 | $ | 123,470 | $ | 3,026,515 | ||||||||||||
The J. M. Smucker Company
The J. M. Smucker Company
Defined Benefit Pension Plans | Other Postretirement Benefits | |||||||||||||||||||||||
Year Ended April 30, | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 | ||||||||||||||||||
Service cost | $ | 7,504 | $ | 5,755 | $ | 5,871 | $ | 1,620 | $ | 1,525 | $ | 1,892 | ||||||||||||
Interest cost | 25,491 | 24,788 | 26,263 | 2,775 | 2,607 | 2,540 | ||||||||||||||||||
Expected return on plan assets | (26,848 | ) | (22,894 | ) | (29,905 | ) | — | — | — | |||||||||||||||
Amortization of prior service cost (credit) | 1,146 | 1,362 | 1,295 | (489 | ) | (489 | ) | (489 | ) | |||||||||||||||
Amortization of net actuarial loss (gain) | 10,294 | 6,291 | 1,360 | (536 | ) | (1,043 | ) | (730 | ) | |||||||||||||||
Settlement loss | — | — | 9,908 | — | — | — | ||||||||||||||||||
Curtailment | 4,095 | — | — | — | — | — | ||||||||||||||||||
Termination benefit cost | 8,395 | — | — | 2,413 | — | — | ||||||||||||||||||
Net periodic benefit cost | $ | 30,077 | $ | 15,302 | $ | 14,792 | $ | 5,783 | $ | 2,600 | $ | 3,213 | ||||||||||||
Other changes in plan assets and benefit liabilities recognized in accumulated other comprehensive income (loss) before income taxes: | ||||||||||||||||||||||||
Prior service cost arising during the year | $ | (359 | ) | $ | (1,334 | ) | $ | — | $ | (925 | ) | $ | — | $ | — | |||||||||
Net actuarial (loss) gain arising during the year | (13,533 | ) | (13,713 | ) | (74,195 | ) | (7,769 | ) | (3,248 | ) | 4,645 | |||||||||||||
Amortization of prior service cost (credit) | 1,146 | 1,362 | 1,295 | (489 | ) | (489 | ) | (489 | ) | |||||||||||||||
Amortization of net actuarial loss (gain) | 10,294 | 6,291 | 1,360 | (536 | ) | (1,043 | ) | (730 | ) | |||||||||||||||
Curtailment | 4,095 | — | — | — | — | — | ||||||||||||||||||
Foreign currency translation | (2,032 | ) | (5,932 | ) | 2,517 | 104 | 173 | (231 | ) | |||||||||||||||
Other adjustments | — | (71 | ) | — | — | — | — | |||||||||||||||||
Net change for year | $ | (389 | ) | $ | (13,397 | ) | $ | (69,023 | ) | $ | (9,615 | ) | $ | (4,607 | ) | $ | 3,195 | |||||||
Weighted-average assumptions used in determining net periodic benefit costs: | ||||||||||||||||||||||||
U.S. plans: | ||||||||||||||||||||||||
Discount rate | 5.80 | % | 7.40 | % | 6.60 | % | 5.80 | % | 7.40 | % | 6.60 | % | ||||||||||||
Expected return on plan assets | 7.50 | 7.75 | 7.75 | — | — | — | ||||||||||||||||||
Rate of compensation increase | 4.15 | 3.79 | 3.84 | — | — | — | ||||||||||||||||||
Canadian plans: | ||||||||||||||||||||||||
Discount rate | 5.30 | % | 5.40 | % | 6.10 | % | 5.30 | % | 5.40 | % | 6.10 | % | ||||||||||||
Expected return on plan assets | 7.08 | 7.33 | 7.25 | — | — | — | ||||||||||||||||||
Rate of compensation increase | 4.00 | 4.00 | 4.00 | — | — | — | ||||||||||||||||||
The J. M. Smucker Company
Defined Benefit Pension Plans | Other Postretirement Benefits | |||||||||||||||
April 30, | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Change in benefit obligation: | ||||||||||||||||
Benefit obligation at beginning of the year | $ | 450,728 | $ | 362,720 | $ | 45,592 | $ | 38,182 | ||||||||
Service cost | 7,504 | 5,755 | 1,620 | 1,525 | ||||||||||||
Interest cost | 25,491 | 24,788 | 2,775 | 2,607 | ||||||||||||
Amendments | 359 | 1,334 | 925 | — | ||||||||||||
Actuarial loss | 30,276 | 64,423 | 7,769 | 3,248 | ||||||||||||
Participant contributions | 498 | 410 | 1,077 | 988 | ||||||||||||
Benefits paid | (30,502 | ) | (25,296 | ) | (3,674 | ) | (2,577 | ) | ||||||||
Foreign currency translation adjustments | 8,446 | 16,594 | 1,270 | 1,602 | ||||||||||||
Curtailment | 2,151 | — | — | — | ||||||||||||
Termination benefit cost | 8,395 | — | 2,413 | — | ||||||||||||
Other adjustments | — | — | 22 | 17 | ||||||||||||
Benefit obligation at end of the year | $ | 503,346 | $ | 450,728 | $ | 59,789 | $ | 45,592 | ||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets at beginning of the year | $ | 367,322 | $ | 300,482 | $ | — | $ | — | ||||||||
Actual return on plan assets | 45,743 | 73,604 | — | — | ||||||||||||
Company contributions | 16,779 | 4,436 | 2,576 | 1,572 | ||||||||||||
Participant contributions | 498 | 410 | 1,077 | 988 | ||||||||||||
Benefits paid | (30,502 | ) | (25,296 | ) | (3,674 | ) | (2,577 | ) | ||||||||
Foreign currency translation adjustments | 7,760 | 13,756 | — | — | ||||||||||||
Other adjustments | — | (70 | ) | 21 | 17 | |||||||||||
Fair value of plan assets at end of the year | $ | 407,600 | $ | 367,322 | $ | — | $ | — | ||||||||
Funded status of the plans | $ | (95,746 | ) | $ | (83,406 | ) | $ | (59,789 | ) | $ | (45,592 | ) | ||||
Other noncurrent assets | $ | 2,976 | $ | 3,562 | $ | — | $ | — | ||||||||
Defined benefit pensions | (98,722 | ) | (86,968 | ) | — | — | ||||||||||
Postretirement benefits other than pensions | — | — | (59,789 | ) | (45,592 | ) | ||||||||||
Net benefit liability | $ | (95,746 | ) | $ | (83,406 | ) | $ | (59,789 | ) | $ | (45,592 | ) | ||||
Defined Benefit Pension Plans | Other Postretirement Benefits | |||||||||||||||
April 30, | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Net actuarial (loss) gain | $ | (134,306 | ) | $ | (131,489 | ) | $ | 6,683 | $ | 14,885 | ||||||
Prior service (cost) credit | (4,809 | ) | (7,237 | ) | 2,129 | 3,542 | ||||||||||
Total recognized in accumulated other comprehensive income (loss) | $ | (139,115 | ) | $ | (138,726 | ) | $ | 8,812 | $ | 18,427 | ||||||
The J. M. Smucker Company
Defined Benefit Pension Plans | Other Postretirement Benefits | |||||||||||||||
April 30, | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Weighted-average assumptions used in determining benefit obligation: | ||||||||||||||||
U.S. plans: | ||||||||||||||||
Discount rate | 5.50 | % | 5.80 | % | 5.50 | % | 5.80 | % | ||||||||
Rate of compensation increase | 4.14 | 4.13 | — | — | ||||||||||||
Canadian plans: | ||||||||||||||||
Discount rate | 5.00 | % | 5.30 | % | 5.00 | % | 5.30 | % | ||||||||
Rate of compensation increase | 4.00 | 4.00 | — | — |
One-Percentage Point | ||||||||
Increase | Decrease | |||||||
Effect on total service and interest cost components | $ | 193 | $ | (138 | ) | |||
Effect on benefit obligation | 2,792 | (2,455 | ) | |||||
Defined Benefit Pension Plans | Other Postretirement Benefits | |||||||||||||||
Year Ended April 30, | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Benefit obligation at end of the year | $ | 123,600 | $ | 112,672 | $ | 12,898 | $ | 11,586 | ||||||||
Fair value of plan assets at end of the year | 113,814 | 99,103 | — | — | ||||||||||||
Funded status of the plans | $ | (9,786 | ) | $ | (13,569 | ) | $ | (12,898 | ) | $ | (11,586 | ) | ||||
Service cost | $ | 1,470 | $ | 1,112 | $ | 34 | $ | 62 | ||||||||
Interest cost | 5,713 | 5,491 | 596 | 632 | ||||||||||||
Expected return on plan assets | (6,912 | ) | (5,988 | ) | — | — | ||||||||||
Curtailment | 185 | — | — | — | ||||||||||||
Termination benefit cost | 933 | — | — | — | ||||||||||||
Company contributions | 4,629 | 1,698 | 771 | 665 | ||||||||||||
Participant contributions | 498 | 410 | — | — | ||||||||||||
Benefits paid | (8,595 | ) | (8,238 | ) | (771 | ) | (665 | ) | ||||||||
Actual return on plan assets | 10,419 | 15,649 | — | — | ||||||||||||
Net periodic benefit cost | 6,231 | 2,746 | 590 | 694 | ||||||||||||
Amortization of net actuarial loss (gain) | 4,836 | 2,116 | (39 | ) | — |
The J. M. Smucker Company
April 30, | ||||||||
2011 | 2010 | |||||||
Accumulated benefit obligation for all pension plans | $ | 468,604 | $ | 422,166 | ||||
Plans with an accumulated benefit obligation in excess of plan assets: | ||||||||
Accumulated benefit obligation | 436,329 | 290,762 | ||||||
Fair value of plan assets | 371,895 | 225,244 | ||||||
Plans with a projected benefit obligation in excess of plan assets: | ||||||||
Projected benefit obligation | 473,555 | 423,270 | ||||||
Fair value of plan assets | 374,741 | 336,454 |
Quoted Prices in | Significant | Significant | ||||||||||||||||||
Active Markets for | Observable | Unobservable | ||||||||||||||||||
Identical Assets | Inputs | Inputs | Fair Value at | Fair Value at | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | April 30, 2011 | April 30, 2010 | ||||||||||||||||
Cash and cash equivalents(A) | $ | 6,006 | $ | — | $ | — | $ | 6,006 | $ | 5,048 | ||||||||||
Equity securities: | ||||||||||||||||||||
U.S.(B) | 82,457 | 18,930 | 4,777 | 106,164 | 96,405 | |||||||||||||||
International(C) | 40,189 | 41,808 | — | 81,997 | 72,786 | |||||||||||||||
Fixed-income securities: | ||||||||||||||||||||
Bonds(D) | 65,126 | 17,610 | — | 82,736 | 86,852 | |||||||||||||||
Fixed income(E) | 45,515 | 34,544 | — | 80,059 | 63,843 | |||||||||||||||
Other types of investments: | ||||||||||||||||||||
Hedge funds(F) | — | — | 37,451 | 37,451 | 33,163 | |||||||||||||||
Private equity funds(G) | — | — | 13,187 | 13,187 | 9,225 | |||||||||||||||
Total financial assets measured at fair value | $ | 239,293 | $ | 112,892 | $ | 55,415 | $ | 407,600 | $ | 367,322 | ||||||||||
(A) | This category includes money market holdings classified as Level 1 and valued at fair value. | |
(B) | This category is invested primarily in a portfolio of common stocks included in the Russell 1000 Index and traded on active exchanges. The Level 1 assets are valued using quoted market prices. The Level 2 assets are funds that consist of equity securities traded on active exchanges. The Level 3 assets are valued at approximate fair value. | |
(C) | This category is invested primarily in common stocks and other equity securities traded on active exchanges whose issuers are located outside of the U.S. The fund invests primarily in developed countries, but may also invest in emerging markets. The Level 1 assets are valued using quoted market prices. The Level 2 assets are funds that consist of equity securities traded on active exchanges. | |
(D) | This category seeks to duplicate the return characteristics of high-quality corporate bonds with a duration range of 10 to 13 years. The Level 1 assets are valued using quoted market prices. The Level 2 assets are funds that consist of bonds traded on active exchanges. | |
(E) | This category is comprised of a core fixed-income fund that invests at least 80 percent of its assets in investment-grade U.S. corporate and government fixed-income securities, including mortgage-backed securities. The Level 1 assets are valued using quoted market prices. The Level 2 assets are funds that consist of fixed-income securities traded on active exchanges. | |
(F) | This category is comprised of two hedge funds. The funds are classified as Level 3 assets and valued using significant unobservable inputs including the funds’ own assumptions. One of the funds has a one-year lock up which has expired and quarterly liquidity with 65 days notice. The second fund has a two-year lock up on initial and subsequent purchases expiring on December 31, 2011. | |
(G) | This category is comprised of private equity funds consisting of primary limited partnership interests in corporate finance and venture capital funds. The funds are classified as Level 3 and valued using significant unobservable inputs including the funds’ own assumptions. The funds are not liquid and distributions began in calendar 2010. |
The J. M. Smucker Company
U.S. Equity | Hedge | Private | ||||||||||||||
Securities | Funds | Equity Funds | Total | |||||||||||||
Balance at May 1, 2010 | $ | 2,391 | $ | 33,163 | $ | 9,225 | $ | 44,779 | ||||||||
Actual return on plan assets still held at reporting date | 698 | 1,988 | 1,750 | 4,436 | ||||||||||||
Purchases | 1,688 | 2,300 | 2,212 | 6,200 | ||||||||||||
Balance at April 30, 2011 | $ | 4,777 | $ | 37,451 | $ | 13,187 | $ | 55,415 | ||||||||
The J. M. Smucker Company
Weighted-Average | ||||||||
Options | Exercise Price | |||||||
Outstanding at May 1, 2010 | 711,987 | $ | 41.06 | |||||
Exercised | (515,062 | ) | 41.01 | |||||
Outstanding and exercisable at April 30, 2011 | 196,925 | $ | 41.18 | |||||
Restricted/ | ||||||||||||||||
Deferred | Weighted- | |||||||||||||||
Shares and | Average | Weighted- | ||||||||||||||
Deferred | Grant Date | Performance | Average | |||||||||||||
Stock Units | Fair Value | Units | Fair Value | |||||||||||||
Outstanding at May 1, 2010 | 1,078,722 | $ | 44.74 | 190,010 | $ | 57.37 | ||||||||||
Granted | 303,863 | 58.32 | 125,360 | 77.53 | ||||||||||||
Converted | 190,010 | 57.37 | (190,010 | ) | 57.37 | |||||||||||
Vested | (373,522 | ) | 47.33 | — | — | |||||||||||
Forfeited | (41,807 | ) | 49.08 | — | — | |||||||||||
Outstanding at April 30, 2011 | 1,157,266 | $ | 49.39 | 125,360 | $ | 77.53 | ||||||||||
Restricted/ | ||||||||||||||||
Deferred | Weighted- | Weighted- | ||||||||||||||
Shares and | Average | Average | ||||||||||||||
Deferred | Grant Date | Performance | Grant Date | |||||||||||||
Stock Units | Fair Value | Units | Fair Value | |||||||||||||
2011 | 303,863 | $ | 58.32 | 125,360 | $ | 77.53 | ||||||||||
2010 | 504,580 | 44.63 | 190,010 | 57.37 | ||||||||||||
2009 | 570,359 | 42.29 | 114,440 | 43.44 |
58 | THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT |
The J. M. Smucker Company
April 30, | ||||||||
2011 | 2010 | |||||||
7.94% Series C Senior Notes due September 1, 2010 | $ | — | $ | 10,000 | ||||
4.78% Senior Notes due June 1, 2014 | 100,000 | 100,000 | ||||||
6.12% Senior Notes due November 1, 2015 | 24,000 | 24,000 | ||||||
6.63% Senior Notes due November 1, 2018 | 380,039 | 376,000 | ||||||
5.55% Senior Notes due April 1, 2022 | 400,000 | 400,000 | ||||||
4.50% Senior Notes due June 1, 2025 | 400,000 | — | ||||||
Total long-term debt | $ | 1,304,039 | $ | 910,000 | ||||
Current portion of long-term debt | — | 10,000 | ||||||
Total long-term debt, less current portion | $ | 1,304,039 | $ | 900,000 | ||||
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 59 |
The J. M. Smucker Company
The J. M. Smucker Company
April 30, 2011 | April 30, 2010 | |||||||||||||||||||
Other | Other | Other | Other | Other | ||||||||||||||||
Current | Current | Noncurrent | Current | Current | ||||||||||||||||
Assets | Liabilities | Liabilities | Assets | Liabilities | ||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Commodity contracts | $ | 3,408 | $ | — | $ | — | $ | 1,874 | $ | 9 | ||||||||||
Interest rate contract | 5,423 | — | 1,384 | — | — | |||||||||||||||
Total derivatives designated as hedging instruments | $ | 8,831 | $ | — | $ | 1,384 | $ | 1,874 | $ | 9 | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
Commodity contracts | $ | 9,887 | $ | 5,432 | $ | — | $ | 2,414 | $ | 599 | ||||||||||
Foreign currency exchange contracts | 317 | 3,204 | — | — | 830 | |||||||||||||||
Total derivatives not designated as hedging instruments | $ | 10,204 | $ | 8,636 | $ | — | $ | 2,414 | $ | 1,429 | ||||||||||
Total derivative instruments | $ | 19,035 | $ | 8,636 | $ | 1,384 | $ | 4,288 | $ | 1,438 | ||||||||||
Year Ended April 30, | ||||||||
2011 | 2010 | |||||||
Gains recognized in other comprehensive income (effective portion) | $ | 21,082 | $ | 6,029 | ||||
Gains reclassized from accumulated other comprehensive income (loss) to cost of products sold (effective portion) | 14,780 | 5,395 | ||||||
Change in accumulated other comprehensive income (loss) | $ | 6,302 | $ | 634 | ||||
Gains recognized in cost of products sold (ineffective portion) | $ | 611 | $ | 200 | ||||
Year Ended April 30, | ||||||||
2011 | 2010 | |||||||
Losses on commodity contracts | $ | 3,994 | $ | 2,384 | ||||
Losses on foreign currency exchange contracts | 3,290 | 7,234 | ||||||
Losses recognized in cost of products sold (derivatives not designated as hedging instruments) | $ | 7,284 | $ | 9,618 | ||||
April 30, | ||||||||
2011 | 2010 | |||||||
Commodity contracts | $ | 869,107 | $ | 323,351 | ||||
Foreign currency exchange contracts | 73,158 | 45,295 | ||||||
Interest rate contract | 376,000 | — |
THE J.M. SMUCKER COMPANY 2011 ANNUAL REPORT 61 |
The J. M. Smucker Company
April 30, 2011 | April 30, 2010 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||
Marketable securities | $ | 18,600 | $ | 18,600 | $ | — | $ | — | ||||||||
Other investments | 41,560 | 41,560 | 34,895 | 34,895 | ||||||||||||
Derivative financial instruments, net | 9,015 | 9,015 | 2,850 | 2,850 | ||||||||||||
Long-term debt | 1,304,039 | 1,648,614 | 910,000 | 1,172,467 |
Quoted Prices in | Significant | Significant | ||||||||||||||||||
Active Markets | Observable | Unobservable | ||||||||||||||||||
for Identical | Inputs | Inputs | Fair Value at | Fair Value at | ||||||||||||||||
Assets (Level 1) | (Level 2) | (Level 3) | April 30, 2011 | April 30, 2010 | ||||||||||||||||
Marketable securities:(A) | ||||||||||||||||||||
Mortgage-backed securities | $ | — | $ | 18,600 | $ | — | $ | 18,600 | $ | — | ||||||||||
Other investments:(B) | ||||||||||||||||||||
Equity mutual funds | 14,011 | — | — | 14,011 | 11,626 | |||||||||||||||
Municipal obligations | — | 20,042 | — | 20,042 | 16,753 | |||||||||||||||
Other investments | 464 | 7,043 | — | 7,507 | 6,516 | |||||||||||||||
Derivatives:(C) | ||||||||||||||||||||
Commodity contracts, net | 7,863 | — | — | 7,863 | 3,680 | |||||||||||||||
Foreign currency exchange contracts, net | (2,887 | ) | — | — | (2,887 | ) | (830 | ) | ||||||||||||
Interest rate contract, net | — | 4,039 | — | 4,039 | — | |||||||||||||||
Total financial assets measured at fair value | $ | 19,451 | $ | 49,724 | $ | — | $ | 69,175 | $ | 37,745 | ||||||||||
(A) | The Company’s marketable securities, consisting entirely of mortgage-backed securities, are broker-priced and valued by a third party using an evaluated pricing methodology. An evaluated pricing methodology is a valuation technique which uses inputs that are derived principally from or corroborated by observable market data. For additional information, see Marketable Securities and Other Investments of Note A: Accounting Policies. | |
(B) | The Company’s other investments consist of funds maintained for the payment of benefits associated with nonqualified retirement plans. The funds include equity securities listed in active markets and municipal bonds valued by a third party using an evaluated pricing methodology. For additional information, see Marketable Securities and Other Investments of Note A: Accounting Policies. | |
(C) | The Company’s commodity contract and foreign currency exchange contract derivatives are valued using quoted market prices. The Company’s interest rate contract derivative is valued using the income approach, observable Level 2 market expectations at the measurement date, and standard valuation techniques to convert future amounts to a single discounted present value. Level 2 inputs for the interest rate contract are limited to quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. For additional information, see Note M: Derivative Financial Instruments. |
The J. M. Smucker Company
Carrying | Carrying | |||||||||||||||
Amount at | Fair Value | Other | Amount at | |||||||||||||
May 1, 2010 | Adjustment | Adjustments | April 30, 2011 | |||||||||||||
Indefinite-lived trademarks(D) | $ | 11,896 | $ | (4,065 | ) | $ | 510 | $ | 8,341 | |||||||
Finite-lived customer relationship(D) | 18,964 | (13,534 | ) | (222 | ) | 5,208 | ||||||||||
Total nonfinancial assets adjusted to fair value | $ | 30,860 | $ | (17,599 | ) | $ | 288 | $ | 13,549 | |||||||
Carrying | Carrying | |||||||||||||||
Amount at | Fair Value | Other | Amount at | |||||||||||||
May 1, 2009 | Adjustment | Adjustments | April 30, 2010 | |||||||||||||
Indefinite-lived trademarks(D) | $ | 21,370 | $ | (9,133 | ) | $ | 2,315 | $ | 14,552 | |||||||
Finite-lived trademarks(D) | 3,012 | (2,525 | ) | (487 | ) | — | ||||||||||
Total nonfinancial assets adjusted to fair value | $ | 24,382 | $ | (11,658 | ) | $ | 1,828 | $ | 14,552 | |||||||
(D) | The Company utilized Level 3 inputs to estimate the fair value of the nonfinancial assets. For additional information, see Note G: Goodwill and Other Intangible Assets. |
April 30, | ||||||||
2011 | 2010 | |||||||
Deferred tax liabilities: | ||||||||
Intangible assets | $ | 1,025,301 | $ | 1,042,375 | ||||
Property, plant, and equipment | 111,537 | 121,950 | ||||||
Other | 10,016 | 22,042 | ||||||
Total deferred tax liability | $ | 1,146,854 | $ | 1,186,367 | ||||
Deferred tax assets: | ||||||||
Post-employment and other employee benefits | $ | 84,723 | $ | 69,887 | ||||
Tax credit and loss carryforwards | 4,583 | 5,049 | ||||||
Intangible assets | 3,279 | 3,984 | ||||||
Other | 27,668 | 21,247 | ||||||
Total deferred tax assets | $ | 120,253 | $ | 100,167 | ||||
Valuation allowance for deferred tax assets | (3,324 | ) | (3,470 | ) | ||||
Total deferred tax assets, less allowance | $ | 116,929 | $ | 96,697 | ||||
Net deferred tax liability | $ | 1,029,925 | $ | 1,089,670 | ||||
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 63 |
The J. M. Smucker Company
Related Tax | Deferred | Valuation | Expiration | |||||||||||||
Deduction | Tax Asset | Allowance | Date | |||||||||||||
Tax carryforwards: | ||||||||||||||||
State loss carryforwards | $ | 68,869 | $ | 3,407 | $ | 3,187 | 2012 to 2030 | |||||||||
State tax credit carryforwards | — | 1,160 | — | 2018 | ||||||||||||
Foreign jurisdictional tax credit carryforwards | — | 16 | — | 2014 | ||||||||||||
Total tax carryforwards | $ | 68,869 | $ | 4,583 | $ | 3,187 | ||||||||||
Year Ended April 30, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Domestic | $ | 729,654 | $ | 712,226 | $ | 378,293 | ||||||
Foreign | (12,490 | ) | 18,527 | 17,772 | ||||||||
Income before income taxes | $ | 717,164 | $ | 730,753 | $ | 396,065 | ||||||
Year Ended April 30, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Current: | ||||||||||||
Federal | $ | 271,361 | $ | 256,444 | $ | 97,182 | ||||||
Foreign | 4,554 | 6,584 | 1,688 | |||||||||
State and local | 21,568 | 12,907 | 5,717 | |||||||||
Deferred: | ||||||||||||
Federal | (51,011 | ) | (21,362 | ) | 27,158 | |||||||
Foreign | (7,338 | ) | (4,386 | ) | (831 | ) | ||||||
State and local | (1,452 | ) | (13,572 | ) | (802 | ) | ||||||
Total income tax expense | $ | 237,682 | $ | 236,615 | $ | 130,112 | ||||||
The J. M. Smucker Company
Year Ended April 30, | ||||||||||||
Percent of Pretax Income | 2011 | 2010 | 2009 | |||||||||
Statutory federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State and local income taxes, net of federal income tax benefit | 2.2 | 1.2 | 0.6 | |||||||||
Domestic manufacturing deduction | (3.8 | ) | (1.9 | ) | (1.5 | ) | ||||||
Other items — net | (0.3 | ) | (1.9 | ) | (1.2 | ) | ||||||
Effective income tax rate | 33.1 | % | 32.4 | % | 32.9 | % | ||||||
Income taxes paid | $ | 365,994 | $ | 212,981 | $ | 69,107 | ||||||
2011 | 2010 | |||||||
Balance at May 1, | $ | 15,322 | $ | 13,794 | ||||
Increases: | ||||||||
Current year tax positions | 5,237 | 3,977 | ||||||
Prior year tax positions | 4,106 | 2,353 | ||||||
Foreign currency translation | — | 686 | ||||||
Decreases: | ||||||||
Prior year tax positions | 271 | — | ||||||
Settlement with tax authorities | 31 | — | ||||||
Expiration of statute of limitations periods | 3,985 | 5,488 | ||||||
Foreign currency translation | 117 | — | ||||||
Balance at April 30, | $ | 20,261 | $ | 15,322 | ||||
THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT 65 |
The J. M. Smucker Company
Foreign | Pension | Unrealized | Unrealized | Accumulated | ||||||||||||||||
Currency | and Other | Gain (Loss) on | Gain on Cash | Other | ||||||||||||||||
Translation | Postretirement | Available-for- | Flow Hedging | Comprehensive | ||||||||||||||||
Adjustment | Liabilities | Sale Securities | Derivatives | Income (Loss) | ||||||||||||||||
Balance at May 1, 2008 | $ | 58,086 | $ | (24,214 | ) | $ | 589 | $ | 8,151 | $ | 42,612 | |||||||||
Reclassification adjustments | — | — | — | (12,885 | ) | (12,885 | ) | |||||||||||||
Current period (charge) credit | (47,024 | ) | (65,828 | ) | (4,384 | ) | 2,494 | (114,742 | ) | |||||||||||
Income tax benefit | — | 22,349 | 1,586 | 3,810 | 27,745 | |||||||||||||||
Balance at April 30, 2009 | $ | 11,062 | $ | (67,693 | ) | $ | (2,209 | ) | $ | 1,570 | $ | (57,270 | ) | |||||||
Reclassification adjustments | — | — | — | (2,494 | ) | (2,494 | ) | |||||||||||||
Current period credit (charge) | 45,926 | (18,004 | ) | 4,162 | 3,128 | 35,212 | ||||||||||||||
Income tax benefit (expense) | — | 5,691 | (1,510 | ) | (210 | ) | 3,971 | |||||||||||||
Balance at April 30, 2010 | $ | 56,988 | $ | (80,006 | ) | $ | 443 | $ | 1,994 | $ | (20,581 | ) | ||||||||
Reclassification adjustments | — | — | — | (3,128 | ) | (3,128 | ) | |||||||||||||
Current period credit (charge) | 24,773 | (10,004 | ) | 2,124 | 9,430 | 26,323 | ||||||||||||||
Income tax benefit (expense) | — | 4,076 | (765 | ) | (2,296 | ) | 1,015 | |||||||||||||
Balance at April 30, 2011 | $ | 81,761 | $ | (85,934 | ) | $ | 1,802 | $ | 6,000 | $ | 3,629 | |||||||||
66 | THE J. M. SMUCKER COMPANY 2011 ANNUAL REPORT |
The J. M. Smucker Company
• | any matter that relates to or would result in the dissolution or liquidation of the Company; | |
• | the adoption of any amendment of the Articles or the Regulations of the Company. or the adoption of amended Articles, other than the adoption of any amendment or amended Articles that increases the number of votes to which holders of common shares are entitled or expands the matters to which time-phase voting applies; | |
• | any proposal or other action to be taken by the shareholders of the Company, relating to the Company’s Rights Agreement, dated as of May 20, 2009, between the Company and Computershare Trust Company, N.A. or any successor plan; | |
• | any matter relating to any stock option plan, stock purchase plan, executive compensation plan, executive benefit plan, or other similar plan, arrangement, or agreement; | |
• | adoption of any agreement or plan of or for the merger, consolidation, or majority share acquisition of the Company or any of its subsidiaries with or into any other person, whether domestic or foreign, corporate or noncorporate, or the authorization of the lease, sale, exchange, transfer, or other disposition of all, or substantially all, of the Company’s assets; | |
• | any matter submitted to the Company’s shareholders pursuant to Article Fifth (which relates to procedures applicable to certain business combinations) or Article Seventh (which relates to procedures applicable to certain proposed acquisitions of specified percentages of the Company’s outstanding common shares) of the Articles, as they may be further amended, or any issuance of common shares of the Company for which shareholder approval is required by applicable stock exchange rules; and | |
• | any matter relating to the issuance of common shares, or the repurchase of common shares that the Board determines is required or appropriate to be submitted to the Company’s shareholders under the Ohio Revised Code or applicable stock exchange rules. |
• | common shares beneficially owned as of November 6, 2008, and for which there has not been a change in beneficial ownership after November 6, 2008; or | |
• | common shares received through the Company’s various equity plans which have not been sold or otherwise transferred since November 6, 2008. |
The J. M. Smucker Company
President and Chief Operating Officer
The J. M. Smucker Company
Chief Executive Officer
The Davey Tree Expert Company
Kent, Ohio
Retired Vice President
FirstEnergy Corp.
Akron, Ohio
Chairman and Chief Executive Officer
Cleveland Indians
Cleveland, Ohio
Former Executive Vice President
Time Inc.
New York, New York
Founder
Nancy Lopez Golf Company
Auburn, Alabama
Chairman and Chief Executive Officer
Oatey Co.
Cleveland, Ohio
Managing Partner, North America
Squire, Sanders & Dempsey L.L.P.
Columbus, Ohio
President, U.S. Retail Coffee
The J. M. Smucker Company
Chief Executive Officer^
The J. M. Smucker Company
Chairman of the Board^
The J. M. Smucker Company
Principal
Unstuk, LLC
Shaker Heights, Ohio
President, U.S. Retail Consumer Foods
The J. M. Smucker Company
Chairman of the Board^
Chief Executive Officer^
Senior Vice President, Logistics and
Operations Support
Senior Vice President and
Chief Financial Officer
Vice President, U.S. Grocery Sales
President and Chief Operating Officer
Vice President and Controller
Senior Vice President and Chief
Administrative Officer
Vice President, General Counsel and
Corporate Secretary
Vice President, Sales, Grocery Market
Vice President, Alternate Channels
President, International, Foodservice,
and Natural Foods
Vice President, Information Services and
Chief Information Officer
Vice President, Marketing Communications
Vice President and General Manager,
Smucker Natural Foods, Inc.
President, U.S. Retail Coffee
President, U.S. Retail Consumer Foods
Vice President, Industry and
Government Affairs
Orrville, Ohio
Chico, California
Cincinnati, Ohio
El Paso, Texas
Grandview, Washington
Havre de Grace, Maryland
Kansas City, Missouri
Lexington, Kentucky
Memphis, Tennessee
New Bethlehem, Pennsylvania
New Orleans, Louisiana (2)
Orrville, Ohio
Oxnard, California
Ripon, Wisconsin
Scottsville, Kentucky
Seneca, Missouri
Toledo, Ohio
Delhi Township, Ontario, Canada
Dunnville, Ontario, Canada
Sherbrooke, Quebec, Canada
Ste. Marie, Quebec, Canada
Akron, Ohio
Bentonville, Arkansas
Edina, Minnesota
Markham, Ontario, Canada
Mexico City, Mexico
Shanghai, China
Tampa, Florida
^ | Effective August 16, 2011 | |
* | Leased properties | |
A | Audit Committee Member | |
E | Executive Compensation Committee Member | |
G | Nominating and Corporate Governance Committee Member |
Corporate Offices The J. M. Smucker Company One Strawberry Lane Orrville, Ohio 44667 Telephone: (330) 682-3000Stock Listing The J. M. Smucker Company’s common shares are listed on the New York Stock Exchange — ticker symbol SJM.Corporate WebSite To learn more about The J. M. Smucker Company, visit smuckers.com.Annual Meeting The annual meeting will be held at 11:00 a.m. Eastern Time, Wednesday, August 17, 2011, in the Fisher Auditorium at the Ohio Agricultural Research and Development Center, 1680 Madison Avenue, Wooster, Ohio 44691.Corporate News and Reports Corporate news releases, annual reports, and Securities and Exchange Commission filings, including Forms 10-K, 10-Q, and 8-K, are available free of charge on the Company’s website. They are also available without cost to shareholders who submit a written request to: The J. M. Smucker Company Attention: Corporate Secretary One Strawberry Lane Orrville, Ohio 44667Certifications The Company’s Co-Chief Executive Officers and Chief Financial Officer have certified to the New York Stock Exchange that they are not aware of any violation by the Company of the New York Stock Exchange corporate governance standards. The Company has also filed with the Securities and Exchange Commission certain certifications relating to the quality of the Company’s public disclosures. These certifications are filed as exhibits to the Company’s Annual Report on Form 10-K.Independent Registered Public Acc ounting Firm Ernst & Young LLP Akron, OhioDividends The Company’s Board of Directors typically declares a cash dividend each quarter. Dividends are generally payable on the first business day of March, June, September, and December. The record date is approximately two weeks before the payment date. The Company’s dividend disbursement agent is Computershare Investor Services, LLC.Shareholder Services The transfer agent and registrar for the Company, Computershare Investor Services, LLC, is responsible for assisting registered shareholders with a variety of matters including: - Shareholder investment program (CIPSM) - direct purchase of Company common shares - dividend reinvestment - automatic monthly cash investments - Book-entry share ownership - Share transfer matters (including name changes, gifting, and inheritances) - Direct deposit of dividend payments - Nonreceipt of dividend checks - Lost share certificates - Changes of address - Online shareholder account access - Form 1099 income inquiries (including requests for duplicate copies) Shareholders may contact Shareholder Services at the corporate offices regarding other shareholder inquiries.Transfer Agent and Registrar Computershare Investor Services, LLC 250 Royall Street Canton, MA 02021 Telephone: (800) 456-1169 Telephone outside the U.S., Canada, and Puerto Rico: (312) 360-5254 Website: computershare.com/contactus This Annual Report includes certain forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties. Please reference “Forward-Looking Statements” located on page 32 in the “Management’s Discussion and Analysis” section. The J. M. Smucker Company is the owner of all trademarks, except Pillsbury, the Barrelhead logo and the Doughboy character are trademarks of The Pillsbury Company, LLC, used under license; Carnation is a trademark of Société des Produits Nestlé S.A., used under license; and Dunkin’ Donuts is a registered trademark of DD IP Holder, LLC, used under license. Borden and Elsie are trademarks used under license. K-Cup is a trademark of Keurig, Incorporated. |
THE J.M. SMUCKER COMPANY Stay in Touch with Smucker We appreciate your interest in our 2011 Annual Report. We encourage you and all of our constituents to stay in touch with us throughout the year through our growing number ofinWebsitesSmuckers.com OnlineStore.Smucker.com PowerOfFamilyMeals.com Crisco.com EagleBrand.com Folgers.com Hungryjack.com Jif.com PillsburyBaking.com RWKnudsenFamily.com SantaCruzOrganic.com Bicks.ca RobinHood.caSocial MediaFacebook.com/smuckers Facebook.com/Crisco Facebook.com/folgers Facebook.com/hungryjack Facebook.com/jif Facebook.com/pillsburybaking Facebook.com/rwknudsen Facebook.com/santacruzorganic Facebook.com/uncrustablesteractive channels, including those listed below The J. M. Smucker Company One Strawberry Lane / Orrville, Ohio 44667 / 30.682.3000 smuckers.com |