The J. M. Smucker Company Annual Report 2000

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FY2000 Annual Report · The J. M. Smucker Company

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A n n u al Report

2000

On Our Cover

Featured on our cover is “Fruit & Flowers,” a painting in

acrylics by American artist George Hamilton. A fluid style

and an imaginative use of color and design characterize

Mr. Hamilton’s paintings, which hang in corporate, public,

and private galleries from New York to California. This

painting was recently added to our Company’s art collection,

which emphasizes still life studies of fruit and landscape

views of rural and small-town life.

Financial Highlights
The J. M. Smucker Company

(Dollars in thousands, except per share data)

Net sales

Income before nonrecurring charge

Income per Common Share before nonrecurring charge

Net income

Income per Common Share

Common Shares outstanding at year end

Class A

Class B

Number of employees

Number of shareholders

Class A

Class B

Year Ended April 30,

2000

1999

$ 632,486

$ 602,457

$ 35,983

1.26

$ 26,357

0.92

$ 37,763

1.30

$ 37,763

1.30

14,259,429

14,065,851

2,250

14,432,619

14,726,576

2,100

5,403

3,457

5,850

3,738

Contents

Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Five-Year Summary of Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . .

Summary of Quarterly Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . .

Stock Price Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Management’s Report on Responsibility for Financial Reporting . . . 14

Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Directors, Officers, and General Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Shareholders, Employees, and Friends:

lthough life at the beginning of the new millennium is dramatically different

from what it was 103 years ago when our Company was founded, people continue

to value good taste, high quality, a sense of comfort, and increasingly, convenience.

That’s why we believe that the surest way to grow our business is by offering products that

taste good, make life easier, and add a little smile to your day. Today, our marketplace includes

cities, towns, and countrysides in more than 70 nations around the globe. And pleasing

consumers is our number-one priority.

A Look at the Year

n fiscal 2000, we made significant investments in new products and ventures, new plants

and equipment, and new technologies — all in support of our consumer-based strategy.

Sales for the year were up 5 percent over the previous year, due primarily to strength in our

International, Foodservice, and Specialty areas. Our share of the fruit spreads market in the

United States, Canada, and Australia is at an all-time high, and in Canada and Australia, fruit

spread sales and earnings hit record levels.

Following is a brief look at our business areas as we closed fiscal 2000:

o Consumer. This area continues to be the biggest contributor to our overall sales and earnings.

Sales in Consumer were up slightly for the year.

o Foodservice. Once again, Foodservice was among our fastest-growing business areas, thanks to

increased sales of portion control products and a number of exciting new offerings.

o International. International sales growth was strong and profitability was at record levels, as
Canadian margins improved and our Mexican business was profitable for the first time.

o Specialty. Our Specialty area also achieved record sales and earnings. While Specialty is one of

our smaller business areas, it was a strong contributor to earnings.

o Beverage. Sales in our Beverage area were essentially flat for the year. Margins, however,

improved significantly.

o Industrial. Sales increased modestly in our Industrial area, but margins continue to be chal-

lenged by competitive pricing pressures. Diversifying its customer base is Industrial’s key goal.

o Consumer Direct. Through this business area, the Company continues to explore alternative
ways to develop closer relationships with consumers. Our Simply Smucker’s retail store in

Orrville had a profitable first year, and on-line sales through our website grew.

We are pleased with our Company’s performance overall in the past year, and earnings

remain healthy. However, softer-than-expected sales in our Consumer area, higher-than-

normal fruit costs, and higher selling, distribution, and transportation costs prevented us from

achieving our earnings goals. For the year, we earned $36 million, or $1.26 per share before

nonrecurring charges. This is 3 percent below last year’s earnings of $1.30 per share.

Although sales in the Consumer area did not meet our expectations in fiscal 2000, our share

of the fruit spreads, toppings, and natural peanut butter markets in the U.S. remained very

strong, and our margins continue to be among the best in the food industry. We also expect a

return to more normal raw material costs in the current year.

These factors — and even more important, the benefits we expect to realize from the invest-

ments we discuss in this letter — bode well for fiscal 2001 and make us confident about the future.

Investments in New Products and Ventures

leasing consumers depends on offering the right mix of traditional favorites and exciting

new products, increasing our marketing reach and distribution venues, and filling today’s

ever-growing demand for convenience. Equally important is satisfying consumers’ desires for

foods that enhance the pleasure of eating and that impart happiness and comfort. Achieving

these objectives is the rationale behind all of our activities, as demonstrated by our product

launches and other new ventures.

In fiscal 2000, we made a substantial investment in the continued

rollout of Smucker’s Snackers, a prepackaged peanut butter, jelly, and

cracker snack kit. The product is now available nationally. With take-

along ease, Snackers offer a trouble-free way to enjoy an American

favorite, and we will soon expand the line to include new items.

Another traditional favorite is the peanut butter and jelly

sandwich, and here, too, we are setting new standards for

simplicity and convenience. In spring 2000, we began to test

market Smucker’s Uncrustables, a line of crustless, thaw-and-serve

peanut butter and jelly sandwiches. The sandwiches are individually wrapped and thaw in

about 20 minutes, making them ideal for school lunches or as a snack any time of day.

The consumer launch of Uncrustables follows our Foodservice group’s successful introduction

of the product to school lunch programs around the country. Uncrustables are a labor-saving,

cost-effective option for schools that enables them to offer children a nutritious, high-quality,

“kid-pleasing” menu item. The school market is new for the Company and holds many

promising opportunities.

It was with kids and the “kid in all of us” in mind that our brand partner, Brach’s Confections,

Inc., introduced Smucker’s Puckers sour jelly beans. Launched in time for the 2000 spring selling

season, Smucker’s Puckers have been enthusiastically received. The product is an enhancement to

our ongoing relationship with Brach’s Confections, Inc., which since 1997 has marketed Brach’s

Smucker’s regular jelly beans. Cobranding ventures like these are an excellent way to

grow sales and further build the Smucker’s brand identity.

One of our most popular new product lines , PlateScapers, is not designed for

consumers directly, but for behind-the-scenes restaurant professionals. Marketed

for the first time in fiscal 2000 by our Foodservice group, PlateScapers are high-

quality toppings that provide an easy means of decorating dessert and dinner

offerings to create impressive tabletop presentations.

Satisfying those consumers who are looking for unique taste treats is

the aim of our Specialty area, which markets products to gourmet

and specialty foods retailers. This year, we extended the Dickinson’s

brand line with the addition of fruit butters and a range of

distinctive relishes.

For the health and natural foods market,

we introduced a number of new beverages in

fiscal 2000. We launched several new items in our Simply Nutritious

and Rocket Juice product lines and expanded our Natural Brew

and Santa Cruz Organic lines. There is a great deal of interest both

domestically and internationally in organic products, and we

see much potential for the years ahead. In fiscal 2001, we will

introduce into test market a vitamin-rich, soy-based beverage

called Smucker’s Smoothies.

Our investments in new products and ventures extend, of course, throughout

the world. Notable in fiscal 2000 was the acquisition in Australia by our Henry Jones Foods

subsidiary of the Taylor Foods line of prepared sauces and marinades. Recognized for

their premium quality, unique flavors, and innovative packaging,

these products satisfy our Australian consumers’

diverse tastes and further expand our “presence on

the plate.” Also in Australia, Henry Jones Foods

expanded its IXL fruit bars line with the addition of

new sizes and flavors, including some very popular

yogurt-coated varieties.

One means of expanding our product distribution and making our consumers’ lives easier

is direct-to-consumer selling. Today, consumers can purchase gifts and a broad selection of

our less widely distributed flavors and products through our Smucker’s catalog; by visiting our

website, www.smucker.com; or by shopping with us at Simply Smucker’s in Orrville. We

continue to explore direct selling opportunities and are actively researching ways to take

advantage of electronic commerce, both on our own and in partnership with other companies.

Investments in Facilities and Technologies

aintaining and growing our competitive position in all of our markets requires continual

investment in our facilities and technologies as well as in new products and ventures.

In fiscal 2000, we made a number of investments in facilities, two of the most significant

of which support our Industrial business. First, we completed equipment installation and

began production at a facility in Livingston, Scotland, where we produce fruit-based ingredients

for Kellogg Company’s United Kingdom market. Second, we purchased a manufacturing facility

in São José do Rio Pardo, Brazil, to process fruit-based ingredients in South America for the

Brazilian affiliate of our U.S. customer, The Dannon Company, Inc. These acquisitions expand

our international presence and position us to explore additional marketing opportunities.

We also invested significantly in productivity, capacity, and efficiency improvements to our

U.S. plants. For example, we made a number of line additions and upgrades in our West Fargo,

North Dakota, Uncrustables facility to allow it to keep pace with increasing demand. Another

initiative was the installation in our New Bethlehem, Pennsylvania, peanut butter processing

plant of an additional roaster, which expands our ability to serve the growing natural peanut

butter market.

We also are beginning the fourth year of a five-year, company-wide information technology

upgrade involving both our hardware and software systems. Implementation is now 75 percent

complete and has occurred with minimal disruption. While this project has required a high

level of investment, it will more than pay for itself in the long run in the form of better infor-

mation and more efficient and productive operations.

Investment in Shareholder Value

nvesting in our businesses and helping them grow in a consistent, profitable manner is, we

believe, the best way to achieve long-term value for our shareholders. At the same time,

the failure of the stock market to recognize the inherent value of our Company in recent years

has been a source of concern to all of us. In this past year, we devoted a great deal of time and

effort to developing a shareholder value enhancement plan to address that undervaluation.

The details of that plan are outlined in the proxy statement for this year’s annual meeting.

We believe that the plan will make our shares and our Company more attractive to potential

investors.

Investment in People

e are pleased to say that for the third consecutive year, our Company has earned

a place on Fortune magazine’s list of “The 100 Best Companies to Work For.” More

than 40 percent of our employees have been with us 10 years or more, and they have cited a

“close-knit, family feeling” as the best part about working for our Company.

Of course, creating a positive, productive work environment and corporate culture is a part-

nership effort between all employees. We are therefore ever mindful of the need to invest —

both personally and financially — in policies and programs that optimize each person’s talents

and potential.

Bottom line, our employees share the vision expressed in our Basic Beliefs — Quality, People,

Ethics, Growth, and Independence — and they work together to uphold it. To them and to our

consumers, customers, suppliers, and shareholders, we express our sincere thanks.

Tim Smucker Richard Smucker

Five-Year Summary of Selected Financial Data

(Dollars in thousands, except per share data)

2000

1999

1998

1997

1996

Year Ended April 30,

$632,486

$602,457

$565,476

$524,107

$517,832

26,357
—

—
26,357

37,763
—

—
37,763

36,348
—

(2,958)
33,390

30,935
—

—
30,935

29,453
(140)

—
29,313

75,000
475,384

—
433,883

—
407,973

—
384,773

60,800
424,952

Statement of Income:

Net sales
Income from continuing operations
before cumulative effect of change
in accounting method(1)

Loss from discontinued operations
Cumulative effect of change in

accounting method(2)

Net income

Financial Position:
Long-term debt
Total assets

Other Data:
Earnings per Common Share:

Income from continuing operations
before cumulative effect of change
in accounting method(1)
Cumulative effect of change
in accounting method(2)

Net income

Income from continuing operations
before cumulative effect of change
in accounting method– assuming dilution(1) 0.92

Cumulative effect of change in

accounting method– assuming dilution(2)

Net income– assuming dilution

Dividends declared per Common Share:

Class A
Class B

—
0.92

0.61
0.61

0.92

—
0.92

1.30

—
1.30

1.29

—
1.29

0.57
0.57

1.25

(0.10)
1.15

1.24

(0.10)
1.14

0.53
0.53

1.06

—
1.06

1.06

—
1.06

0.52
0.52

1.01

—
1.01

1.00

—
1.00

0.52
0.52

(1) Includes, in 2000, nonrecurring charges of $14,492 ($9,626 after tax) or $0.34 per share relating to the impairment of certain long-

lived assets, as discussed in Note C to the consolidated financial statements.

(2) Reflects, in 1998, the cumulative effect of adopting the provisions of the Emerging Issues Task Force of the Financial Accounting

Standards Board consensus ruling No. 97-13, Accounting for Costs Incurred in Connection with a Consulting Contract that Combines Business Process

Reengineering and Information Technology Transformation (EITF 97-13), as discussed in Note A to the consolidated financial statements.

Summary of Quarterly Results of Operations

The following is a summary of unaudited quarterly results of operations for the years ended April 30, 2000

and 1999.

(Dollars in thousands, except per share data)

Quarter
Ended

Net
Sales

Gross
Profit

Net
Income

Net Income per
Net Income per
Common Share–
Common Share Assuming Dilution

2000

1999

July 31
October 31
January 31
April 30

$161,495
163,965
150,428
156,598

$150,500
154,894
140,772
156,291

$58,028
54,873
54,491
50,618

$53,862
51,690
49,055
51,906

$11,037
9,389
4,963(1)
968(1)

$10,416
9,063
8,245
10,039

$0.38
0.33
0.17(1)
0.03(1)

$0.36
0.31
0.28
0.35

$0.38
0.32
0.17(1)
0.03(1)

$0.36
0.31
0.28
0.34

(1) Includes nonrecurring charges during fiscal 2000 third and fourth quarters of $3,192 ($0.11 per share) and $6,434 ($0.23 per share),
respectively, relating to the impairment of certain long-lived assets as discussed in Note C of the consolidated financial statements.

Annual earnings per share may not equal the sum of the individual quarters due to differences in the average number of shares out-
standing during the respective periods.

Stock Price Data

The Company’s Class A and Class B Common Shares are listed on the New York Stock Exchange – ticker
symbols SJM.A and SJM.B, respectively. The table below presents the high and low market prices for the
shares and the quarterly dividends declared. The number of Class A and Class B shareholders of record as of
June 26, 2000, was 5,403 and 3,457, respectively.

Class A Common Shares

Class B Common Shares

Quarter Ended

High

Low Dividends

Quarter Ended

High

Low Dividends

2000

1999

July 31
October 31
January 31
April 30

$25.75
24.19
21.38
18.50

$25.56
24.69
25.69
24.75

$20.06
19.50
17.00
15.00

$22.75
20.63
21.88
20.50

$0.15
0.15
0.15
0.16

$0.14
0.14
0.14
0.15

July 31
October 31
January 31
April 30

$22.50
21.31
17.88
16.00

$25.50
24.19
24.00
22.63

$17.13
16.25
15.13
12.50

$22.63
20.06
20.38
17.50

$0.15
0.15
0.15
0.16

$0.14
0.14
0.14
0.15

Management’s Discussion and Analysis

Results of Operations

Comparison of 2000 with 1999

Consolidated sales in fiscal 2000 were $632,486,000,
up 5% from $602,457,000 in the prior year.
Domestic segment sales increased $15,333,000 or
3%, while the international segment was up
$14,696,000 or 20%. Excluding the impact of
nonrecurring charges, earnings for the year
decreased from $37,763,000, or $1.30 per share
in fiscal 1999 to $35,983,000, or $1.26 per share.
Including the impact of the nonrecurring charges,
which is explained below, fiscal 2000 earnings
were $26,357,000 or $0.92 per share.

In the domestic segment, the majority of the sales
increase came from the foodservice market, pri-
marily as a result of three factors: (i) volume
growth in the portion control category; (ii) the
addition of Lea & Perrins products to the foodservice
product line, as a result of a distribution agree-
ment with Lea & Perrins, Inc.; and (iii) sales of the
new Smucker's Uncrustables peanut butter and jelly
sandwich. In the consumer market, overall sales
were up approximately 1%, as stronger sales in
the warehouse club channel offset a slight
decrease in the grocery channel. Despite the slight
decline in grocery channel sales, the Company's
share of the domestic fruit spreads market hit
record levels, passing the 40% share level. The
specialty foods business also contributed to overall
sales growth, as sales increased 9% over last year.
Finally, the inclusion of sales from the Company’s
new retail store along with an increase in catalog
and on-line sales resulted in an overall increase in
the consumer direct market. While sales in the
industrial market increased modestly overall,
industrial sales in the domestic segment declined
approximately 3% from last year due to softness
in sales with two large customers.

In the international segment, the increase in sales
came from a combination of growth in existing
businesses and the addition of production facilities
in new geographical regions. The Canadian busi-
ness contributed significantly to both international
sales and profits as sales increased approximately
10% over the prior year. Sales also increased in the

Australian market and the export business in
Europe. The Company's acquisition in December
1999 of a fruit ingredient business in Brazil and
sales from the new production facility in Scotland
contributed approximately $6,300,000 in sales.
For the second consecutive year, sales in Mexico
increased in excess of 40%. The Mexican business
also earned a profit for the first time. In addition,
the impact of favorable exchange rates contributed
$1,927,000 to the increase in international sales.

Gross margin was consistent with the prior year at
34.5% vs. 34.3%, as increases in certain fruit costs
and manufacturing overhead were offset by
improved manufacturing efficiencies and lower
costs on certain raw materials. Selling, distribu-
tion, and administrative (SD&A) costs increased at
a greater rate than sales due to increased selling
expenses in the grocery channel and selling costs
associated with expanded distribution of
Uncrustables into school lunch programs. Distri-
bution costs also were up due to higher operating
costs at certain distribution centers and higher fuel
costs in the latter part of the year. Marketing
expenditures were up approximately 8% due to
investments in support of new products and busi-
nesses, primarily in the consumer, consumer direct,
and international markets. Corporate administra-
tive overhead also contributed to the increase in
SD&A, as these expenses increased 11%, primarily
due to planned costs associated with the Company’s
information technology reengineering (ITR) project.

Interest expense increased significantly over the
prior year due to the long-term debt placement
completed during the first quarter of the fiscal
year (see Capital Resources and Liquidity). During
the fiscal year, the Company capitalized approxi-
mately $1,069,000 in interest associated with the
ITR project.

The Company's effective income tax rate for the
year was 36.5%, down from 38.7% in the prior
year, reflecting increased benefits from tax credits
on a lower base of taxable income.

During fiscal 2000, the Company initiated a finan-
cial review of its businesses and assets, with a
focus on those assets considered nonstrategic or

underperforming. This review resulted in a non-
recurring, noncash charge of $14,492,000
($9,626,000 net of tax) or $0.34 per share.
Approximately $10,700,000 of the charge resulted
from the write-down of the carrying value of cer-
tain intangible assets, primarily goodwill relating
to previous acquisitions. In addition, certain capi-
talized costs associated with unused or abandoned
software acquired as part of the Company’s ITR
project and other abandoned fixed assets were
written off.

The write-down of the intangible assets was based
on the Company’s estimate of fair market value
using future discounted cash flows projected to be
generated by the respective assets under review,
over their estimated useful lives. Based upon the
results of this analysis, the expected useful lives of
the assets were reduced from periods ranging from
five to forty years, to a range of two to ten years.

In addition, the Company is pursuing the poten-
tial sale of real estate in Pottstown, Pennsylvania,
currently being leased to a third party, and it is
anticipated a loss may be incurred on that dis-
posal. The effect of all nonrecurring items on future
earnings is not expected to be significant.

Comparison of 1999 with 1998

Sales in fiscal 1999 were $602,457,000, an increase
of $36,981,000 or 6.5% over those of fiscal 1998.
All of the Company’s domestic segment businesses
realized an increase over fiscal 1998 with the
largest dollar growth occurring in the consumer
and industrial markets. The combined dollar growth
of these two markets accounted for approximately
60% of the Company’s total increase in sales.
Domestic segment sales increased $30,524,000 or
6%, while the international segment was up
$6,457,000 or nearly 10%.

of Smucker’s Snackers, the Company’s new shelf-
stable peanut butter and jelly offering for lunches
and snacks; and (iii) the acquisition of the Adams
natural peanut butter brand in December 1998. In
addition, sales to warehouse club stores were also
up over fiscal 1998. The Company’s market posi-
tion in the core fruit spreads, toppings, and natu-
ral peanut butter categories remained strong with
share of market growing in each area.

In the international segment, the majority of the
growth occurred in the Australian market and
was primarily due to the impact of the acquisition
of the Allowrie brand of fruit spreads, which was
purchased in May 1998. Gains were also realized
in Mexico where sales increased nearly 50% over
fiscal 1998. Overall, acquisitions contributed
approximately 10% to international sales for fiscal
1999. The growth in international occurred
despite the continued adverse effect of exchange
rates on the results in Australia and Canada. Had
the exchange rates held constant with fiscal 1998,
international sales would have been up approxi-
mately $6,740,000 or an additional 10%.

Income for fiscal 1999 increased approximately
4% as earnings per share rose to $1.30 from $1.25,
before the cumulative-effect adjustment in fiscal
1998. Investment spending in several areas caused
the increase in earnings to lag behind the per-
centage increase in sales. Cost of products sold
increased as a percentage of sales from 64.7% to
65.7% due to the impact of an increase in the
cost of certain fruits, and costs associated with
implementing production improvements. SD&A,
although up from the same period in fiscal 1998,
increased at a slower rate than sales. The increase
in SD&A was due to higher marketing costs, pri-
marily to support the introduction of Smucker’s
Snackers, the Company’s consumer direct initia-
tive, and sales of current products. Distribution
expenses were also up.

The growth in the consumer market was primar-
ily in sales to the grocery channel with the
majority of the increase the result of: (i) a favor-
able mix of products sold within the fruit spreads
category; (ii) the introduction during fiscal 1999

Income tax expense decreased from fiscal 1998 as
the Company lowered its effective income tax rate
from 40.2% to 38.7%. The decrease in the tax
rate was primarily due to a reduction in state and
local taxes.

Capital Resources and Liquidity

Recently Issued Accounting Standards

The financial position of the Company remains
strong with an increase in cash and cash equivalents
of $24,420,000 during the year. The increase in cash
and cash equivalents reflects cash generated by
operations of $33,599,000 together with proceeds
from the Company’s $75,000,000, ten-year, senior,
unsecured 6.77% fixed-rate notes, issued in June
1999.

Fiscal 2000 capital expenditures totaled $32,240,000,
including capitalized software and consulting costs
in connection with the Company’s ongoing ITR
project. The Company also completed two acquisi-
tions utilizing cash of $9,056,000. In addition to cap-
ital expenditures and acquisitions, other significant
uses of cash during the year included the repayment
of short-term borrowings existing at April 30, 1999,
of $8,966,000, the payment of dividends, and the
repurchase of common stock. Dividends paid on all
Common Shares increased to $0.60 per share or
$17,212,000, while 332,600 Class A and 615,900
Class B Common Shares were repurchased during
the year as part of a previously announced stock
repurchase program. Total stock repurchases during
the year amounted to $17,654,000.

In May 2000, the Company announced plans for a
shareholder value enhancement plan. In connection
with this plan, the Company is seeking shareholder
approval to combine the current Class A and Class B
Common Shares into a single class of common shares
similar to the current Class A Common Shares.
Simultaneous with this combination, the Company is
seeking to repurchase up to $100,000,000 of Class A
and Class B Common Shares at $18.50 per share. The
Company will fund these repurchases with a combi-
nation of cash on hand and proceeds from a long-
term debt placement.

Capital expenditures for fiscal 2001 are budgeted
at $25,000,000. The Company believes that cash on
hand together with cash generated by operations,
proceeds from future long-term debt placements, and
lines of credit will be sufficient to meet its fiscal 2001
requirements, including the payment of dividends.

In 1998, the Financial Accounting Standards
Board issued Statement of Financial Accounting
Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (SFAS 133).
SFAS 133 changes the accounting related to
derivative instruments. Although the Company
has not yet completed its evaluation of the
potential impact of adopting SFAS 133 on
future earnings, it does not expect the impact to
be material.

In June 1999, the Financial Accounting
Standards Board issued Statement of Financial
Accounting Standards No. 137, Accounting for
Derivative Instruments and Hedging Activities
–Deferral of the Effective Date of FASB Statement No.
133–an amendment of FASB Statement No. 133,
which defers the effective date of SFAS 133 for
the Company until fiscal 2002. The Company
currently plans to adopt SFAS 133 as required
in fiscal 2002.

Year 2000

The portion of the ITR project that resolved the
Year 2000 issue as it related to the Company's
information technology (IT) systems was suc-
cessfully implemented in all domestic and inter-
national locations. As a result, the Company
experienced no material business disruptions at
January 1, 2000, or at February 29, 2000. With
regard to the IT systems that were not replaced
in time to meet the change in millennium, the
Company utilized outside consultants to assist
with renovation to the code at a cost of approx-
imately $2,000,000, which was equal to the
original cost expectations. The total ITR project
cost, which includes an enterprise-wide infor-
mation system and business process reengineer-
ing, is estimated at approximately $34,000,000,
excluding internal staff costs. The Company will
continue to monitor its IT systems and those of
its vendors and customers throughout the year.

Market Risk Disclosures

The following discussions about the Company’s
market risk disclosures involve forward-looking
statements. Actual results could differ materially
from those projected in the forward-looking state-
ments. The Company is exposed to market risk
related to changes in interest rates and foreign
currency exchange rates.

Interest Rate Risk. The fair value of the Company’s
cash and short-term investment portfolio and the fair
value of notes receivable and payable at April 30,
2000, approximated carrying value. Exposure to
interest rate risk on the Company’s long-term
debt is mitigated since it is at a fixed 6.77% rate
until maturity in June 2009. Market risk, as mea-
sured by the change in fair value resulting from a
hypothetical 10% change in interest rates, is not
material. Based on the Company’s overall interest
rate exposure as of and during the year ended
April 30, 2000, a hypothetical 10% movement in
interest rates relating to the Company’s variable
rate borrowings would not materially affect the
Company’s results of operations.

Foreign Currency Exchange Risk. After analyz-
ing the risk, the Company has chosen at this time
not to hedge its foreign currency exposure.
Therefore, it has not entered into any forward for-
eign exchange contracts to hedge foreign currency
transactions.

liabilities, primarily denominated

The Company has operations outside the United
States with foreign currency denominated assets
and
in
Australian and Canadian dollars. Because the
Company has foreign currency denominated
assets and liabilities, financial exposure may
result, primarily from the timing of transactions

and the movement of exchange rates. The
unhedged foreign currency balance sheet expo-
sures as of April 30, 2000, are not expected to
result in a significant impact on future earnings or
cash flows.

Revenues from customers outside the United
States represented approximately 14% of net sales
during fiscal 2000. As the Company has expanded
its international operations, its sales and expenses
denominated in foreign currencies have increased
and that trend is expected to continue. Thus, cer-
tain sales and expenses have been, and are
expected to be, subject to the effect of foreign cur-
rency fluctuations and these fluctuations may
have an impact on operating results.

Certain Forward-Looking Statements

This annual report includes certain forward-look-
ing statements that are based on current expecta-
tions and are subject to a number of risks and
uncertainties. Actual results may differ, depend-
ing on a number of factors, including: the success
of the Company’s marketing programs during the
coming year; competitive activity; the mix of
products sold and level of marketing expendi-
tures needed to generate sales; an increase in fruit
costs or costs of other significant ingredients,
including sweeteners; the ability of the Company
to maintain and/or improve sales and earnings
performance of its nonretail business areas; for-
eign currency exchange and interest rate fluctua-
tions; level of capital resources required for and
success of future acquisitions; the approval of the
shareholder value enhancement plan; and the
successful implementation of the Company’s ITR
project.

Management’s Report on Responsibility for Financial Reporting

Management of The J. M. Smucker Company is responsible for the preparation, integrity, accuracy, and con-
sistency of the consolidated financial statements and the related financial information in this report. Such
information has been prepared in accordance with generally accepted accounting principles and is based on
our best estimates and judgments.

The Company maintains systems of internal accounting controls supported by formal policies and procedures
which are communicated throughout the Company. There is an extensive program of audits performed by
the Company’s internal audit staff and independent auditors designed to evaluate the adequacy of and adher-
ence to these controls, policies, and procedures.

Ernst & Young LLP, independent auditors, has audited the Company’s financial statements. Management has
made all financial records and related data available to Ernst & Young LLP during its audit.

The Company’s Audit Committee, comprising four nonemployee members of the Board, meets regularly with
the independent auditors and management to review the work of the internal audit staff and the work, audit
scope, timing arrangements, and fees of the independent auditors. The Audit Committee also regularly satis-
fies itself as to the adequacy of controls, systems, and financial records. The manager of the internal audit
department is required to report directly to the Chairman of the Audit Committee as to internal audit matters.

It is the Company’s best judgment that its policies and procedures, its program of internal and independent
audits, and the oversight activity of the Audit Committee work together to provide reasonable assurance that
the operations of the Company are conducted according to law and in compliance with the high standards of
business ethics and conduct to which the Company subscribes.

Richard K. Smucker
President

Mark R. Belgya
Corporate Controller

Report of Independent Auditors

Board of Directors and Shareholders
The J. M. Smucker Company

We have audited the accompanying consolidated balance sheets of The J. M. Smucker Company as of April 30,
2000 and 1999, and the related statements of consolidated income, shareholders’ equity, and cash flows for
each of the three years in the period ended April 30, 2000. These financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing standards in the United States. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consoli-
dated financial position of The J. M. Smucker Company at April 30, 2000 and 1999, and the consolidated
results of its operations and its cash flows for each of the three years in the period ended April 30, 2000, in
conformity with accounting principles generally accepted in the United States.

As discussed in Note A to the consolidated financial statements, the Company adopted the provisions of
Emerging Issues Task Force Issue No. 97-13, Accounting for Costs Incurred in Connection with a Consulting Contract
that Combines Business Process Reengineering and Information Technology Transformation, in the third quarter of
fiscal 1998.

Akron, Ohio
June 8, 2000

Year Ended April 30,

2000

1999

1998

$632,486
414,476

$602,457
395,944

$565,476
365,613

218,010
162,283
14,492

41,235
2,706
(3,111)
701

206,513
147,538
—

199,863
142,799
—

58,975
1,948
(179)
887

57,064
2,525
(145)
1,315

41,531
15,174

61,631
23,868

60,759
24,411

26,357

37,763

36,348

—

(2,958)

$ 26,357

$ 37,763

$ 33,390

0.92
—

0.92

0.92
—

0.92

1.30
—

1.30

1.29
—

1.29

1.25
(0.10)

1.15

1.24
(0.10)

1.14

Statements of Consolidated Income
The J. M. Smucker Company

(Dollars in thousands, except per share data)

Net sales
Cost of products sold

Gross Profit
Selling, distribution, and administrative expenses
Nonrecurring charge

Operating Income
Interest income
Interest expense
Other income–net

Income Before Income Taxes and Cumulative Effect

of Change in Accounting Method

Income taxes

Income Before Cumulative Effect of Change

in Accounting Method

Cumulative effect of change in accounting method,

net of tax benefit of $1,980

Net Income

Earnings per Common Share:
Income Before Cumulative Effect of Change

in Accounting Method

Cumulative effect of change in accounting method

Net Income per Common Share

Earnings per Common Share–Assuming Dilution:
Income Before Cumulative Effect of Change

in Accounting Method

Cumulative effect of change in accounting method

Net Income per Common Share –Assuming Dilution

See notes to consolidated financial statements

Consolidated Balance Sheets
The J. M. Smucker Company

Assets

(Dollars in thousands)

Current Assets

Cash and cash equivalents

Trade receivables, less allowance for doubtful accounts

Inventories:

Finished products

Raw materials, containers, and supplies

Other current assets

Total Current Assets

Property, Plant, and Equipment

Land and land improvements

Buildings and fixtures

Machinery and equipment

Construction in progress

Accumulated depreciation

Total Property, Plant, and Equipment

Other Noncurrent Assets

Goodwill

Trademarks and patents

Other assets

Total Other Noncurrent Assets

April 30,

2000

1999

$ 33,103

$ 8,683

62,518

51,858

52,653

68,862

51,983

62,217

121,515

114,200

11,996

11,401

229,132

186,142

18,479

87,803

15,729

83,290

214,012

201,913

29,507

23,296

349,801

324,228

(175,153)

(157,685)

174,648

166,543

36,795

13,490

21,319

45,371

15,256

20,571

71,604

81,198

$475,384

$433,883

Liabilities and Shareholders’ Equity

(Dollars in thousands)

Current Liabilities
Accounts payable
Notes payable
Salaries, wages, and additional compensation
Accrued marketing and merchandising
Income taxes
Dividends payable
Other current liabilities

Total Current Liabilities

Noncurrent Liabilities
Long-term debt
Postretirement benefits other than pensions
Deferred income taxes
Other noncurrent liabilities

Total Noncurrent Liabilities

Shareholders’ Equity
Serial Preferred Shares – no par value:

Authorized – 3,000,000 shares; outstanding – none

Common Shares – no par value:

Class A – Authorized – 35,000,000 shares; outstanding –
14,259,429 in 2000 and 14,432,619 in 1999 (net of
1,952,859 and 1,779,669 treasury shares,
respectively), at stated value

Class B – (Nonvoting) Authorized – 35,000,000 shares;

outstanding –14,065,851 in 2000 and 14,726,576 in 1999
(net of 2,146,437 and 1,485,712 treasury shares,
respectively), at stated value

Additional capital
Retained income
Less:

Deferred compensation
Amount due from ESOP Trust
Accumulated other comprehensive loss

Total Shareholders’ Equity

See notes to consolidated financial statements

April 30,

2000

1999

$ 32,520
—
13,772
8,718
1,687
4,488
7,004

$ 40,262
8,966
13,957
8,588
4,700
4,377
6,781

68,189

87,631

75,000
13,593
3,221
1,908

93,722

—
12,775
7,007
2,141

21,923

—

3,565

3,608

3,516
17,190
310,843

3,682
15,604
318,660

(3,091)
(9,223)
(9,327)

(2,001)
(9,526)
(5,698)

313,473

324,329

$475,384

$433,883

Statements of Consolidated Cash Flows
The J. M. Smucker Company

(Dollars in thousands)

Operating Activities

Net income
Adjustments to reconcile net income to net cash

provided by operating activities:
Depreciation
Amortization
Nonrecurring charge, net of tax benefit
Cumulative effect of change in accounting method,

net of tax benefit

Deferred income tax (benefit) expense
Changes in assets and liabilities, net of effect

from business acquisitions:
Trade receivables
Inventories
Other current assets
Accounts payable and accrued items
Income taxes
Other – net

Net Cash Provided by Operating Activities

Investing Activities

Additions to property, plant, and equipment
Businesses acquired – net of cash
Disposal of property, plant, and equipment
Other – net

Net Cash Used for Investing Activities

Financing Activities

Proceeds from long-term debt
Proceeds from (repayment of) short-term debt – net
Purchase of Common Shares – net
Dividends paid
Net amount received from ESOP Trust
Other – net

Net Cash Provided by (Used for) Financing Activities

Effect of exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year

Year Ended April 30,

2000

1999

1998

$26,357

$37,763

$33,390

21,674
4,524
9,626

—
(3,872)

(11,678)
(6,924)
(733)
(7,272)
2,628
(731)

33,599

(32,240)
(9,056)
91
1,387

(39,818)

75,000
(8,966)
(17,654)
(17,212)
303
(217)

31,254

(615)

24,420
8,683

19,660
3,734
—

18,780
3,759
—

—
120

2,958
(2,285)

(2,627)
(9,332)
1,587
(5,123)
(1,292)
(965)

(1,697)
(10,522)
653
10,855
5,683
(533)

43,525

61,041

(38,693)
(26,590)
747
1,288

(29,058)
(1,406)
682
1,196

(63,248)

(28,586)

—
8,966
(811)
(16,246)
261
101

—
—
(4,465)
(15,100)
240
160

(7,729)

(19,165)

(349)

(897)

(27,801)
36,484

12,393
24,091

Cash and Cash Equivalents at End of Year

$33,103

$ 8,683

$36,484

( ) Denotes use of cash

See notes to consolidated financial statements

Statements of Consolidated Shareholders’ Equity
The J. M. Smucker Company

(Dollars in thousands)

Common Shares
Class A

Class B

Additional
Capital

Retained
Income

Deferred
Compen-
sation

Amount
Due From
ESOP Trust

Accumulated
Other
Compre-
hensive
Loss

Total
Shareholders’
Equity

Balance at May 1, 1997

$3,606 $3,696 $12,439 $ 284,605 $(1,396) $(10,027) $(1,032) $ 291,891

Net income
Foreign currency

translation adjustment

Comprehensive Income

Purchase of treasury shares
Stock plans
Cash dividends declared –

$0.53 a share

Other

33,390

(33)
24

(18)
11

(94)
1,629

(4,320)

(859)

(15,359)

634

240

(4,959)

28,431

(4,465)
805

(15,359)
874

Balance at April 30, 1998

3,597

3,689

14,608

298,316

(2,255)

(9,787)

(5,991)

302,177

Net income
Foreign currency

translation adjustment

Comprehensive Income

Purchase of treasury shares
Stock plans
Cash dividends declared –

$0.57 a share

Other

37,763

(5)
16

(3)
(4)

(17)
360

(786)
(92)

254

(16,541)

653

261

37,763

293

38,056

(811)
534

(16,541)
914

Balance at April 30, 1999

3,608

3,682

15,604

318,660

(2,001)

(9,526)

(5,698)

324,329

Net income
Foreign currency

translation adjustment

Comprehensive Income

Purchase of treasury shares
Stock plans
Cash dividends declared –

$0.61 a share

Other

26,357

(83)
40

(154)
(12)

(566)
1,570

(16,851)

(1,090)

(17,323)

582

303

(3,629)

22,728

(17,654)
508

(17,323)
885

Balance at April 30, 2000

$3,565 $3,516 $17,190 $310,843 $(3,091) $ (9,223) $(9,327) $ 313,473

See notes to consolidated financial statements

Notes to Consolidated Financial Statements
The J. M. Smucker Company

Note A: Accounting Policies

Principles of Consolidation: The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly owned. All significant intercompany transactions and accounts
are eliminated in consolidation.

Financial Instruments: Financial instruments that potentially subject the Company to significant con-
centrations of credit risk consist principally of cash investments and accounts receivable. The Company
places its cash investments with high quality financial institutions and limits the amount of credit expo-
sure to any one institution. The Company considers all short-term investments with a maturity of three
months or less when purchased to be cash equivalents.

With respect to accounts receivable, concentration of credit risk is limited due to the large number of
customers. Although the Company does not require collateral from its customers, the Company has his-
torically incurred minimal credit losses.

The fair value of the Company’s financial instruments, other than its fixed-rate long-term debt, approx-
imates their carrying amounts. The fair value of the Company’s 6.77% senior, unsecured notes, due
June 1, 2009, estimated using current market rates and a discounted cash flow analysis, was approxi-
mately $65,000,000 at April 30, 2000.

Use of Estimates: The preparation of financial statements in conformity with generally accepted account-
ing principles requires management to make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition: The Company recognizes revenue when products are shipped to customers.

Stock Compensation: The Company has elected to follow Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (APB 25), and related interpretations in accounting for its
employee stock options. Under APB 25, because the exercise price of the Company’s employee stock
options equals the market price of the underlying stock on the date of grant, no compensation expense
is recognized (see Note H).

Inventories: The Company values its inventories at the lower of cost or market, with market considered
as replacement value. Cost is determined on the last-in, first-out (LIFO) method for the majority of
domestic inventories. Inventories not on the LIFO method are valued principally by the first-in, first-out
(FIFO) method. If the FIFO method (which approximates current cost) had been used for all invento-
ries, the balances would have been $11,644,000 and $11,776,000 higher than reported at April 30, 2000
and 1999, respectively.

Goodwill and Intangible Assets: The excess cost over net assets of businesses acquired and other intan-
gibles, principally trademarks and patents, are being amortized using the straight-line method over peri-
ods ranging from 5 to 40 years. The Company continually evaluates whether events or circumstances have
occurred which would indicate that the carrying value may not be recoverable or that the useful life war-
rants revision. When trended downturns in business indicate that goodwill and other intangible assets
should be evaluated for possible impairment, the Company analyzes the future recoverability of the asset
using an estimate of the related undiscounted future cash flows of the business, and recognizes any adjust-
ment to the asset’s carrying value on a current basis (see Note C). Accumulated amortization of goodwill
and intangible assets at April 30, 2000 and 1999, was $26,879,000 and $23,601,000, respectively.

Property, Plant, and Equipment: Property, plant, and equipment are recorded at cost and are depreci-
ated on a straight-line basis over the estimated useful lives of the assets, as follows: 3 to 15 years for

machinery and equipment; and 10 to 40 years for buildings, fixtures, and improvements. Property sold
or retired is eliminated from the accounts in the year of disposition.

The Company leases certain land, buildings, and equipment for varying periods of time, with renewal
options. Leases of cold storage facilities are continually renewed for short periods. Rental expense in
2000, 1999, and 1998 totaled $14,042,000, $12,762,000, and $10,950,000, respectively; included therein
were cold storage facility rentals, based on quantities stored, amounting to $5,283,000, $4,999,000, and
$4,956,000, respectively.

Software Costs: The Company capitalizes significant costs associated with the development and instal-
lation of internal use software. Amounts deferred are amortized over the estimated useful lives of the
software, ranging from 3 to 7 years, beginning with the project’s completion. Net deferred internal use
software costs as of April 30, 2000 and 1999, were $24,321,000 and $20,296,000, respectively, of which
$17,468,000 and $13,843,000 were included in construction in progress. Interest costs of $1,069,000
and $528,000 were capitalized during fiscal 2000 and 1999, respectively.

In November 1997, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board
issued a consensus ruling on accounting for business process reengineering costs. EITF 97-13, Accounting
for Costs Incurred in Connection with a Consulting Contract that Combines Business Process Reengineering and
Information Technology Transformation, requires that the cost of business process reengineering activities
that are part of a project to acquire, develop, or implement internal use software, whether done inter-
nally or by third parties, be expensed as incurred. Previously, the Company capitalized certain of these
costs as systems development costs.

In accordance with EITF 97-13, the Company incurred a one-time, net of tax charge of $2,958,000, or
$0.10 per share, in the third quarter of fiscal 1998 for the cumulative effect of expensing these previ-
ously capitalized costs. Consistent with the requirements of EITF 97-13, no restatement of prior year
financial statements has been made.

Foreign Currency Translation: Assets and liabilities of the Company’s foreign subsidiaries are translated
using the exchange rates in effect at the balance sheet date, while income and expenses are translated
using average rates. Translation adjustments are reported as a component of shareholders’ equity in
accumulated other comprehensive loss.

Advertising Expense: Advertising costs are expensed as incurred. Advertising expense was $14,764,000,
$12,685,000, and $10,809,000 in fiscal 2000, 1999, and 1998, respectively.

Recently Issued Accounting Standards: In 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities (SFAS 133). SFAS 133 changes the accounting related to derivative instruments. Although the
Company has not yet completed its evaluation of the potential impact of adopting SFAS 133 on future
earnings, it does not expect the impact to be material.

In June 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 137, Accounting for Derivative Instruments and Hedging Activities — Deferral of the Effective Date
of FASB Statement No. 133 — an amendment of FASB Statement No. 133, which defers the effective date of
SFAS 133 for the Company until fiscal 2002. The Company currently plans to adopt SFAS 133 as
required in fiscal 2002.

Reclassifications: Certain prior year amounts have been reclassified to conform to current year classi-
fications.

Risks and Uncertainties: The principal products of the Company are fruit spreads, dessert toppings,
peanut butter, industrial fruit products, fruit and vegetable juices, juice beverages, syrups, condiments,
and gift packages. In the domestic markets, the Company’s products are primarily sold through brokers
to chain, wholesale, cooperative, independent grocery accounts and other consumer markets, to food-
service distributors and chains including hotels, restaurants, and institutions, and to other food manu-
facturers. The Company’s distribution outside the United States is principally in Canada, Australia,
Mexico, Latin America, the Pacific Rim, and Greater Europe. The fruit raw materials used by the
Company are generally purchased from independent growers and suppliers, although the Company
grows some strawberries for its own use. Because of the seasonal nature and volatility of quantities of
most of the crops on which the Company depends, it is necessary to prepare and freeze stocks of fruit
and fruit juices and to maintain them in cold storage warehouses. The Company believes there is no con-
centration of risk with any single customer or supplier whose failure or nonperformance would materi-
ally affect the Company’s results. In addition, the Company insures its business and assets in each coun-
try against insurable risks, as and to the extent that it deems appropriate, based upon an analysis of the
relative risks and costs. It believes that the risk of loss from noninsurable events would not have a mate-
rial adverse effect on the Company’s operations as a whole.

Note B: Operating Segments

The Company operates in one industry: the manufacturing and marketing of food products. The Company
has two reportable segments, domestic and international. The domestic segment represents the aggre-
gation of the consumer, foodservice, beverage, specialty foods, consumer direct, and industrial business
areas. Food products are distributed through various retail channels including grocery, mass retail, mil-
itary, warehouse club, health food, and specialty food markets along with restaurants, health care facil-
ities, schools, and other institutions throughout the United States. These products include a variety of
fruit spreads, dessert toppings, natural peanut butters, fruit and vegetable-based beverages, formulated
fruit-based fillings, and gift boxes. The international segment consists of products that are similar in
nature to those in the domestic segment but are distributed to geographical markets outside of the
United States.

The following table sets forth operating segments information:

(Dollars in thousands)

Net sales:
Domestic
International

Total net sales

Depreciation:
Domestic
International

Total depreciation

Segment profit:

Domestic
International

Total segment profit

Interest income
Interest expense
Amortization expense
Nonrecurring charge
Corporate administrative expenses
Other unallocated income (expenses)

Income before income taxes and cumulative effect

of change in accounting method

Total assets:
Domestic
International

Total assets

Expenditures for additions to long-lived assets:

Domestic
International

Total expenditures for additions to long-lived assets,

including acquisitions

Year Ended April 30,

2000

1999

1998

$543,929
88,557

$528,596
73,861

$498,072
67,404

$632,486

$602,457

$565,476

$ 19,789
1,885

$ 18,296
1,364

$ 17,442
1,338

$ 21,674

$ 19,660

$ 18,780

$ 89,570
10,387

$ 94,489
7,134

$ 92,511
6,559

99,957

101,623

99,070

2,706
(3,111)
(4,524)
(14,492)
(39,371)
366

1,948
(179)
(3,734)
—
(37,912)
(115)

2,525
(145)
(3,759)
—
(42,013)
5,081

$ 41,531

$ 61,631

$ 60,759

$396,923
78,461

$371,403
62,480

$351,943
56,030

$475,384

$433,883

$407,973

$ 26,012
13,824

$ 53,737
10,538

$ 27,829
2,635

$ 39,836

$ 64,275

$ 30,464

Segment profit represents revenue less direct and allocable operating expenses and excludes nonrecurring
charges in fiscal 2000 of $13,536,000 and $956,000, relating to the domestic and international segments,
respectively (see Note C).

The following table presents product sales information:

Fruit spreads
Industrial ingredients
Portion control
Juices and beverages
Toppings and syrups
Peanut butter
Other

Total

Year Ended April 30,

2000

1999

1998

39%
15
12
10
9
7
8

41%
17
12
10
9
6
5

43%
17
12
11
9
5
3

100%

Note C: Nonrecurring Charge

During fiscal 2000, the Company recorded a nonrecurring, noncash charge of $14,492,000 ($9,626,000
net of tax) or $0.34 per share. This charge was the result of a financial review by the Company, of its busi-
nesses and assets, with a focus on those assets considered nonstrategic or underperforming. Approximately
$10,700,000 of the charge resulted from the write-down of the carrying value of certain intangible assets,
primarily goodwill, resulting from previous acquisitions primarily in the domestic segment. In addition,
certain capitalized costs associated with unused or abandoned software acquired as part of the Company’s
information technology reengineering project and other abandoned fixed assets were written off.

The write-down of the intangible assets was based on the Company’s estimate of fair market value using
future discounted cash flows projected to be generated by the respective assets under review, over their
estimated useful lives. Based upon the results of this analysis, the expected useful lives of the assets were
reduced from periods ranging from five to forty years, to a range of two to ten years.

Note D: Earnings per Share

The following table sets forth the computation of earnings per Common Share and earnings per Common
Share – assuming dilution:

(Dollars in thousands, except per share data)

2000

1999

1998

Numerator:

Net income for earnings per Common Share and earnings

per Common Share – assuming dilution

$26,357

$37,763

$33,390

Year Ended April 30,

Denominator:

Denominator for earnings per

Common Share – weighted-average shares

28,670,770

29,057,593 29,038,723

Effect of dilutive securities:

Stock options
Restricted stock

Denominator for earnings per Common Share –

assuming dilution

Earnings per Common Share

Earnings per Common Share – assuming dilution

56,380
23,205

179,679
37,447

247,155
59,400

28,750,355

29,274,719 29,345,278

$ 0.92

$ 1.30

$ 0.92

$ 1.29

1.15

1.14

Options to purchase 689,800 Class A and 475,000 Class B Common Shares at $20.88 to $31.50 per share
were outstanding during fiscal 2000 but were not included in the computation of earnings per Common
Share – assuming dilution, as the options’ exercise prices were greater than the average market price of
the Common Shares and, therefore, the effect would be antidilutive.

Note E: Acquisitions

During fiscal 2000, the Company utilized cash on hand to complete two acquisitions for a total of
$9,056,000. During fiscal 1999, the Company completed five acquisitions for an aggregate of $26,590,000,
utilizing cash on hand as well as borrowings under the Company’s uncommitted lines of credit.

Each of the acquisitions was accounted for as a purchase and the results of operations of the acquired
companies were included in the consolidated results of the Company from their respective acquisition
dates. As a result of the acquisitions, approximately $2,869,000 and $15,054,000 in goodwill and
$2,213,000 and $6,393,000 in trademarks were recorded in 2000 and 1999, respectively, and are being
amortized using the straight-line method over periods of 10 to 20 years.

Note F: Pensions and Other Postretirement Benefits

The Company has pension plans covering substantially all of its employees. Benefits are based on the
employee’s years of service and compensation. The Company’s plans are funded in conformity with the
funding requirements of applicable government regulations.

In addition to providing pension benefits, the Company sponsors several unfunded defined postretire-
ment plans that provide health care and life insurance benefits to substantially all active and retired
domestic employees not covered by certain collective bargaining agreements, and their covered depend-
ents and beneficiaries. These plans are contributory, with retiree contributions adjusted periodically, and
contain other cost-sharing features, such as deductibles and coinsurance. Covered employees generally
are eligible for these benefits when they have reached age 55 and attained 10 years of service.

Net periodic benefit cost included the following components:

(Dollars in thousands)

Year Ended April 30,

Service cost
Interest cost
Expected return on plan assets
Amortization of prior
service costs/(credit)

Amortization of initial net asset
Recognized net actuarial gain

Defined Benefit Pension Plans

Other Postretirement
Benefits

April 30,

(Dollars in thousands)

2000

1999

2000

1999

Change in benefit obligation:

Benefit obligation at beginning of the year

Service cost
Interest cost
Amendments
Actuarial gain
Benefits paid

$67,887
2,216
4,668
2,358
(6,947)
(2,512)

$59,156
1,841
4,043
5,565
(598)
(2,120)

$ 10,442
513
717
—
(2,789)
(323)

$ 10,397
490
662
—
(960)
(147)

Benefit obligation at end of the year

$67,670

$67,887

$ 8,560

$ 10,442

Change in plan assets:

Fair value of plan assets at beginning of the year

Actual return on plan assets
Asset gain
Company contributions
Benefits paid

$65,254
7,513
3,061
910
(2,512)

$63,313
2,493
795
773
(2,120)

—
—
—
323
(323)

—
—
—
147
(147)

Fair value of plan assets at end of the year

$74,226

$65,254

— $

—

Funded status of the plan

$ 6,556

$ (2,633)

$ (8,560)

$(10,442)

Unrecognized net actuarial gain
Unrecognized prior service cost/(credit)
Unrecognized initial asset

Accrued benefit cost

Weighted average assumptions:

Discount rate
Expected return on plan assets
Rate of compensation increase

(18,622)
11,278
(1,141)

(7,426)
9,847
(1,232)

(4,219)
(814)
—

(1,458)
(875)
—

$ (1,929)

$ (1,444)

$(13,593)

$(12,775)

8%
9%
5%

7%
9%
5%

8%
—
—

—
—

For fiscal 2001, the assumed health care cost trend rates are 6.25% for participants under age 65 and
5% for participants age 65 or older. The rate for participants under age 65 is assumed to decrease grad-
ually to 5% in the year 2003. The health care cost trend rate assumption has a significant effect on the
amount of the obligation and periodic cost reported. A one-percent annual change in the assumed cost
trend rate would have the following effect:

(Dollars in thousands)

Effect on total service and interest cost components
Effect on postretirement benefit obligation

One–Percentage Point

Increase

Decrease

$ 277
$1,474

$ (212)
$(1,172)

The projected benefit obligation applicable to pension plans with accumulated benefit obligations in
excess of plan assets was $9,896,000 and $12,252,000 at April 30, 2000 and 1999, respectively, primarily
due to a supplemental retirement benefit plan. The accumulated benefit obligation related to the supple-
mental retirement benefit plan was $7,795,000 and $6,277,000 at April 30, 2000 and 1999, respectively.

Pension plan assets consist of listed stocks and government obligations, including 168,000 of both of the
Company’s Class A and Class B Common Shares at April 30, 2000 and 1999. The market value of these
shares is $4,935,000 at April 30, 2000. The Company paid dividends of $202,000 on these shares during
the year. Prior service costs are being amortized over the average remaining service lives of the employees
expected to receive benefits.

The Company also charged to operations approximately $854,000, $808,000, and $716,000 in 2000,
1999, and 1998, respectively, for contributions to foreign pension plans and to plans not administered
by the Company on behalf of employees subject to certain labor contracts. These amounts were deter-
mined in accordance with foreign actuarial computations and provisions of those labor contracts. For
those plans not self-administered, the Company is unable to determine its share of either the accumu-
lated plan benefits or net assets available for benefits under those plans.

In addition, certain of the Company’s active employees participate in multiemployer plans which provide
defined postretirement health care benefits. The aggregate amount contributed to these plans, including
the charge for net periodic postretirement benefit costs, totaled $1,687,000, $1,569,000, and $1,727,000
in 2000, 1999, and 1998, respectively.

Note G: Savings Plans

ESOP: The Company sponsors an Employee Stock Ownership Plan and Trust (ESOP) for domestic, non-
represented employees. The Company has entered into loan agreements with the Trustee of the ESOP
for purchases by the Trustee in amounts not to exceed a total of 1,200,000 unallocated Common Shares
of the Company at any one time. These shares are to be allocated to participants over a period of not
less than 20 years. ESOP loans bear interest at 1/2% over prime and are payable as shares are allocated
to participants. Interest incurred on ESOP debt was $846,000, $821,000, and $905,000 in 2000, 1999,
and 1998, respectively. Contributions to the plan are made annually in amounts sufficient to fund ESOP
debt repayment. Dividends on unallocated shares are used to reduce expense and were $363,000,
$361,000, and $363,000 in 2000, 1999, and 1998, respectively. The principal payments received from
the ESOP in 2000, 1999, and 1998 were $303,000, $261,000, and $240,000, respectively.

The Company measures compensation expense based upon the fair value of the shares committed to be
released to plan participants in accordance with Statement of Position 93-6, Employers’ Accounting for
Employee Stock Ownership Plans (SOP 93-6). As permitted by SOP 93-6, the Company does not apply the
statement to shares purchased prior to December 31, 1992. Since all shares currently held by the ESOP
were acquired prior to 1993, the Company will continue to recognize future compensation expense
using the cost basis. At April 30, 2000, the ESOP held 605,048 unallocated shares consisting of 124,124
Class A and 480,924 Class B Common Shares. All shares held by the ESOP were considered outstand-
ing in earnings per share calculations for all periods presented.

401(k) Plan: The Company offers employee savings plans under Section 401(k) of the Internal Revenue
Code for all domestic employees not covered by certain collective bargaining agreements. The Company’s
contributions under these plans are based on a specified percentage of employee contributions. Charges
to operations for these plans in 2000, 1999, and 1998 were $1,193,000, $1,098,000, and $981,000,
respectively.

Note H: Stock Benefit Plans

The Company provides for equity-based incentives to be awarded to key employees through its 1998
Equity and Performance Incentive Plan, the Restricted Stock Bonus Plan adopted in 1979, and the 1987
Stock Option Plan.

1998 Equity and Performance Incentive Plan: This plan provides for the issuance of stock options and
restricted stock, which may include performance criteria, as well as stock appreciation rights, deferred
shares, and performance shares. At April 30, 2000, there are 501,000 Class A and 501,000 Class B
Common Shares available for future issuance under this plan. Of this total amount available for
issuance, the amount of restricted stock is limited to 225,000 Class A and 225,000 Class B Common
Shares. Restricted shares issued under this plan are subject to a risk of forfeiture for at least three years,
in the event of termination of employment or failure to meet performance criteria. Options granted
under this plan become exercisable at the rate of one-third per year, beginning one year after the date
of grant, and the option price is equal to the market value of the shares on the effective date of the grant.

Restricted Stock Bonus Plan: Shares awarded under this plan contain certain restrictions for four years
relating, among other things, to forfeiture in the event of termination of employment and to transfer-
ability. Shares awarded are issued as of the effective date of the award and recorded at market value. A
corresponding deferred compensation charge is expensed over the period during which restrictions are
in effect. There are 3,100 Class A and 46,100 Class B Common Shares available for issuance under the
plan at April 30, 2000. In fiscal 2000 and 1998, awards of 41,000 and 30,500 shares, respectively, of Class A
and Class B Common Shares were made while no awards were granted in 1999.

1987 Stock Option Plan: Options granted under this plan become exercisable at the rate of one-third
per year, beginning one year after the date of grant, and the option price is equal to the market value of
the shares on the effective date of the grant. There are 32,000 Class A and 522,700 Class B Common
Shares available for future grant under this plan.

As permitted by Statement of Financial Accounting Standards No. 123, Accounting for Stock Based
Compensation (SFAS 123), the Company has elected to account for the stock options under Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25). If compensation costs
for the stock options granted in fiscal 2000, 1999, and 1998 had been determined based on the fair
market value method of SFAS 123, the Company’s earnings per share would have been $0.02–$0.04 less
than amounts determined using the intrinsic method of APB 25.

The fair value of each option grant was estimated at the date of grant using the Black-Scholes option
pricing model with the following weighted-average assumptions:

Risk-free interest rate
Dividend yield
Volatility
Class A
Class B

Average expected term (years)
Fair value of options granted

Class A
Class B

Year Ended April 30,

2000

6.20%
2.50%

26.00%
20.90%
5.00

$5.22
$3.84

1999

1998

4.75%
2.50%

5.50%
2.50%

26.60%
20.00%
5.00

27.60%
20.10%
5.00

$5.32
$4.10

$6.77
$5.14

A summary of the Company’s stock option activity, and related information follows:

Outstanding at May 1, 1997

Granted
Exercised
Forfeited

Outstanding at April 30, 1998

Granted
Exercised
Forfeited

Outstanding at April 30, 1999

Granted
Exercised
Forfeited

Outstanding at April 30, 2000

Exercisable at April 30, 1998
Exercisable at April 30, 1999
Exercisable at April 30, 2000

Class A
Options

1,239,612
151,500
(71,876)
(1,000)

1,318,236
169,500
(65,901)
(5,334)

1,416,501
204,500
(143,567)
(7,800)

Weighted-
Average
Exercise
Price

$21.69
25.78
14.44
17.63

$22.56
21.91
16.05
22.63

$22.78
19.78
18.74
19.26

Class B
Options

930,312
151,500
(68,576)
(1,000)

1,012,236
169,500
(67,201)
(5,334)

1,109,201
204,500
(102,167)
(39,200)

Weighted-
Average
Exercise
Price

$17.97
24.31
13.84
16.10

$19.20
20.88
15.67
21.44

$19.66
16.66
18.17
18.69

1,469,634

$22.78

1,172,334

$19.30

1,008,069
1,097,501
1,111,134

$22.87
$22.91
$23.28

702,069
790,201
807,167

$18.79
$19.05
$19.45

The following table summarizes the range of exercise prices and weighted-average exercise prices for
options outstanding and exercisable at April 30, 2000, under the Company’s stock benefit plans:

Range of
Exercise Prices

Outstanding

$17.25—$22.50
$22.51—$31.50

779,834
689,800

Weighted-
Average
Exercise
Price

$19.34
$26.67

$15.94—$24.31

1,172,334

$19.30

Weighted-
Average
Remaining
Contractual
Life (yrs.)

Weighted-
Average
Exercise

Exercisable

Price

6.4
3.8

6.4

471,001
640,133

$18.57
$26.74

807,167

$19.45

Share Class

Class A
Class A

Class B

Note I: Financing Arrangements

The Company has an uncommitted line of credit providing up to $10,000,000 for short-term borrowings.
No amounts were outstanding at April 30, 2000. The interest rate to be charged on any outstanding bal-
ance is based on prevailing market rates.

In June 1999, the Company issued $75,000,000 of 6.77% senior, unsecured notes due June 1, 2009.
Proceeds from the issuance were used to refinance existing indebtedness and to fund general corporate
purposes such as stock repurchases, acquisitions, and new product ventures. Interest on the notes is paid
semiannually. Among other restrictions, the note purchase agreements contain certain covenants relat-
ing to liens, consolidated net worth, and sale of assets as defined in the agreement. The Company is in
compliance with all covenants.

Interest paid at April 30, 2000, 1999, and 1998 totaled $2,293,000, $751,000, and $109,000, respectively.

Note J: Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting.
Significant components of the Company’s deferred tax assets and liabilities are as follows:

(Dollars in thousands)

Deferred tax liabilities:

Depreciation
Other (each less than 5% of total liabilities)

Total deferred tax liabilities

Deferred tax assets:

Postretirement benefits other than pensions
Other employee benefits
Intangible assets
Other (each less than 5% of total assets)

Total deferred tax asset
Valuation allowance for deferred tax assets

Total deferred tax assets less allowance

Net deferred tax asset (liability)

April 30,

2000

1999

$12,326
2,251

14,577

$12,819
3,359

16,178

5,778
4,196
3,818
4,744

18,536
(1,728)

16,808

5,429
3,989
327
6,667

16,412
(1,695)

14,717

$ 2,231

$ (1,461)

The Company has recorded a valuation allowance related to certain foreign deferred tax assets due to
the uncertainty of their realization.

No U.S. income or foreign withholding taxes have been recorded on undistributed earnings of foreign
subsidiaries since these amounts are considered to be permanently reinvested. Any additional taxes
payable on the earnings of foreign subsidiaries, if remitted, would be partially offset by U.S. tax credits
and deductions for foreign taxes already paid.

Income before income taxes and cumulative effect of change in accounting method is as follows:

(Dollars in thousands)

Domestic
Foreign

Income before income taxes and cumulative effect of

change in accounting method

The components of the provision for income taxes are as follows:

(Dollars in thousands)

Current:
Federal
Foreign
State and local

Deferred

Total income tax expense

Year Ended April 30,

2000

1999

1998

$36,716
4,815

$57,778
3,853

$57,061
3,698

$41,531

$61,631

$60,759

Year Ended April 30,

2000

1999

1998

$15,048
2,048
1,950
(3,872)

$19,706
1,445
2,597
120

$21,684
1,499
3,513
(2,285)

$15,174

$23,868

$24,411

A reconciliation of the statutory federal income tax rate and the effective income tax rate follows:

Percent of Pretax Income

(Dollars in thousands)

Statutory federal income tax rate
Increase (decrease) in income taxes resulting from:

State and local income taxes, net of federal income tax benefit
Research credits
Other items

Effective income tax rate

Income taxes paid

Note K: Common Shares

Year Ended April 30,

2000

35.0%

3.1
(1.6)
—

1999

1998

35.0%

2.7
(0.8)
1.8

3.8
(1.3)
2.7

36.5%

38.7%

40.2%

$19,761

$23,542

$20,755

The Company’s Amended Articles of Incorporation provide that but for certain exceptions, those acquir-
ing the Company’s Class A Common Shares will be entitled to cast one vote per share on matters requir-
ing shareholder approval until they have held their shares for four years, after which time they will be
entitled to cast ten votes per share. The Company’s Class B Common Shares are nonvoting, except under
certain conditions outlined in the Company’s Amended Articles of Incorporation.

Pursuant to a shareholders’ rights plan established during fiscal 1999, each outstanding share of the
Company’s Class A and Class B Common Shares carries a share purchase right issued as a result of a div-
idend distribution declared by the Company’s Board of Directors in April 1999 and distributed to share-
holders of record on May 14, 1999.

Under the plan, the rights will initially trade together with the Company’s Common Shares and will not
be exercisable. In the absence of further action by the directors, the rights generally will become exer-
cisable and allow the holder to acquire the Company’s Class A or Class B Common Shares at a dis-
counted price if a person or group acquires 10% or more of the outstanding Class A Common Shares or
15% or more of the Company’s outstanding Common Shares. Rights held by persons who exceed the
applicable thresholds will be void. Shares held by members of the Smucker family are not subject to the
thresholds. If exercisable, each right entitles the shareholder to buy one Common Share at a discounted
price. Under certain circumstances, the rights will entitle the holder to buy shares in an acquiring entity
at a discounted price.

The plan also includes an exchange option. In general, if the rights become exercisable, the directors
may, at their option, effect an exchange of part or all of the rights – other than rights that have become
void – for Common Shares. Under this option, the Company would issue one Class A Common Share for
each Class A right and one Class B Common Share for each Class B right, in each case subject to adjust-
ment in certain circumstances.

The Company’s directors may, at their option, redeem all rights for $0.01 per right, generally at any time
prior to the rights becoming exercisable. The rights will expire May 14, 2009, unless earlier redeemed,
exchanged, or amended by the directors.

In May 2000, the Company announced plans for a shareholder value enhancement plan. The Company
is seeking shareholder approval to combine the current Class A and Class B Common Shares into a single
class of common shares similar to the current Class A Common Shares. Simultaneously with this com-
bination, the Company is seeking to repurchase up to $100,000,000 of Class A and Class B Common
Shares at $18.50 per share. The Company will fund these repurchases with a combination of cash on
hand and proceeds from a long-term debt placement.

Directors, Officers, and General Managers
The J. M. Smucker Company

Directors

Vincent C. Byrd
Vice President and General
Manager, Consumer Market
The J. M. Smucker Company

Kathryn W. Dindo
Vice President
FirstEnergy Corp.
Akron, Ohio

Fred A. Duncan
Vice President and General
Manager, Industrial Market
The J. M. Smucker Company

Elizabeth Valk Long
Executive Vice President
Time Inc.
New York, New York

Russell G. Mawby
Chairman Emeritus
W. K. Kellogg Foundation
Battle Creek, Michigan

Charles S. Mechem, Jr.
Retired Chairman
Convergys Corporation
Cincinnati, Ohio

Timothy P. Smucker
Chairman
The J. M. Smucker Company

Richard K. Smucker
President
The J. M. Smucker Company

William H. Steinbrink
President and Chief
Executive Officer
CSM Industries, Inc.
Cleveland, Ohio

Benjamin B. Tregoe, Jr.
Chairman Emeritus
Kepner-Tregoe, Inc.
Princeton, New Jersey

William Wrigley, Jr.
President and Chief
Executive Officer
Wm. Wrigley Jr. Company
Chicago, Illinois

Kenneth A. Miller
General Manager,
Specialty Foods Market

Julia L. Sabin
General Manager,
Beverage Market

Properties

Corporate Offices:

Orrville, Ohio

Domestic Manufacturing
Locations:

Orrville, Ohio
Salinas, California
Memphis, Tennessee
Ripon, Wisconsin
Chico, California
Havre de Grace, Maryland
New Bethlehem, Pennsylvania
West Fargo, North Dakota *

Fruit Processing Locations:

Watsonville, California
Woodburn, Oregon
Grandview, Washington
Oxnard, California

International Manufacturing
Locations:

Ste-Marie, Quebec, Canada
Kyabram, Victoria, Australia
Livingston, Scotland
São José do Rio Pardo, Brazil

Sales Offices: *

Toronto, Ontario, Canada
Carlton, Victoria, Australia
Mexico City, Mexico
Staffordshire, England
São Paulo, Brazil

* Leased properties

Officers & General
Managers

Timothy P. Smucker
Chairman

Richard K. Smucker
President

Mark R. Belgya
Corporate Controller

Vincent C. Byrd
Vice President and General
Manager, Consumer Market

K. Edwin Dountz
Vice President – Sales

Fred A. Duncan
Vice President and General
Manager, Industrial Market

Steven J. Ellcessor
Vice President – Finance and
Administration,
Secretary/Treasurer, and
General Counsel

Robert E. Ellis
Vice President – Human Resources

Richard G. Jirsa
Vice President – Information Services

Eloise L. Mackus
Vice President and General
Manager, International Market

John D. Milliken
Vice President – Logistics

Steven T. Oakland
Vice President and General
Manager, Foodservice Market

Richard F. Troyak
Vice President – Operations

H. Reid Wagstaff
Vice President – Government
and Environmental Affairs

Debra A. Marthey
Assistant Treasurer

Shareholder Information
The J. M. Smucker Company

Company’s Principal Place of Business
The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667, (330)682-3000.

Annual Meeting
The annual meeting will be held at 11:00 a.m. Eastern Daylight Time, Tuesday, August 15, 2000, in
the Wooster High School Performing Arts Center, 515 Oldman Road, Wooster, Ohio.

Form 10-K
A copy of the Company’s Form 10-K is available without cost to shareholders who request it by
writing to: The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667, Attention: Secretary.

Transfer Agent and Registrar for the Company’s Shares
The transfer agent and registrar for the Company’s Common Shares is Computershare Investor
Services, LLC, 2 North La Salle Street, P.O. Box A3504, Chicago, Illinois 60602-3504, (800) 942-5909.
The transfer agent has primary responsibility for share transfers and the cancellation and issuance of
share certificates.

Stock Listing
The J. M. Smucker Company’s Class A and Class B Common Shares are listed on the New York Stock
Exchange. Their symbols are SJM.A and SJM.B, respectively.

Dividends
The Company’s Board of Directors normally declares a cash dividend for both Class A and Class B
Common Shares each quarter. Dividends are generally payable on the first business day of March,
June, September, and December. The record date is two weeks before the payment date. The
Company’s dividend disbursement agent is Computershare Investor Services, LLC.

Shareholder Inquiries
Inquiries regarding dividend payments, loss or nonreceipt of a dividend check, address changes, stock
transfers (including name changes, gifts, and inheritances), lost share certificates, and Form 1099
information should be addressed to: Computershare Investor Services, LLC, 2 North La Salle Street,
P.O. Box A3504, Chicago, Illinois 60602-3504, (800)942-5909.

All questions, inquiries, remittances, and other correspondences related to dividend reinvestment
services should be addressed to: Computershare Investor Services, LLC, 2 North La Salle Street,
P.O. Box A3309, Chicago, Illinois 60602-3309, (800)942-5909.

All other inquiries may be directed to: The J. M. Smucker Company, Shareholder Relations,
Strawberry Lane, Orrville, Ohio 44667, (330)682-3000.

For Additional Information
To learn more about The J. M. Smucker Company, visit us at www.smucker.com

Independent Auditors
Ernst & Young LLP, 222 South Main Street, Akron, Ohio 44308

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 “Certain Forward-Looking Statements” located on page 13 in the

Management’s Discussion and Analysis section.

Brach’s is a registered trademark of Brach’s Confections, Inc.
Lea & Perrins is a registered trademark of Lea & Perrins, Inc.

Design: Susan Kandzer Design

Photography: Andy Russetti, Camera Works; Keith Berr Productions

This annual report was printed on recycled paper using vegetable-based inks.

Printing: Great Lakes Lithograph

All The Goodness of Smucker’s®
Now In A Store

You’ve come to love our delicious jams, jellies, and toppings.
Now there’s a store with a whole lot more. It’s Simply Smucker’s,
a showcase store brimming with all of your favorites.
We have over 350 different flavors and varieties,
including some of those “hard to find” products,
as well as a wide array of household accessories,
specialty gifts and gift baskets. We’re just south of Orrville,
so stop by when you’re in the neighborhood, or learn more
about us on-line at www.smucker.com.

333 Wadsworth Road
(Rt. 57, 1/4 mile north of Rt. 30)
Orrville, Ohio 44667
(330) 684-1500
Monday–Saturday 9:00 a.m. to 6:00 p.m.
Closed Sunday

The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667
(330) 682-3000