The J. M. Smucker Company Annual Report 2002

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FY2002 Annual Report · The J. M. Smucker Company

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A N N UA L R EPORT
•2002•

FINANCIAL HIGHLIGHTS

The J. M. Smucker Company

(Dollars in thousands, except per share data)

Net sales

Income and income per Common Share before merger and

integration costs, nonrecurring charge, and cumulative effect
of change in accounting method:

Income
Income per Common Share
Income per Common Share – assuming dilution

Net income and net income per Common Share:

Net income
Net income per Common Share
Net income per Common Share – assuming dilution

Common Shares outstanding at year end

Number of employees

Year Ended April 30,

2002

2001

$687,148

$651,242

$ 34,011
$ 1.39
$ 1.37

$ 29,511
$
1.16
$ 1.15

$ 30,851
$ 1.26
1.24
$

$ 27,206
1.07
$
$ 1.06

24,869,463 24,359,281

2,300

2,250

ON OUR COVER

CONTENTS

Letter to Shareholders

Coasts, plains and mountains majestic: In tribute to

the strength and beauty of America, our choice for this

Five-Year Summary of Selected Financial Data

Summary of Quarterly Results of Operations

year’s cover is “Snake River Morning,” an oil painting

Stock Price Data

by Carol Swinney. Ms. Swinney, who creates much

of her work on location near her Casper, Wyoming,

horse ranch, has won numerous honors and is repre-

sented by galleries throughout the Western United

States. It is the newest addition to our corporate art

collection, which features still life studies of fruit, land-

scapes and scenes of rural and small-town America.

Management’s Discussion and Analysis

Management’s Report on Responsibility for
Financial Reporting

Report of Independent Auditors

Consolidated Financial Statements

Notes to Consolidated Financial Statements

Directors, Officers, and General Managers

Properties

Shareholder Information

DEAR FELLOW SHAREHOLDERS:

Comments From Our Consumers

“Your fine products have

been on our breakfast table

Fiscal 2002 was a landmark year for The J. M. Smucker

Company. In October 2001, we announced an agreement with

The Procter & Gamble Company to merge the Jif and Crisco

for over 50 years and my

brands into The J. M. Smucker Company. Our shareholders

wife and I say it’s just

not breakfast without

Smucker’s jams and jellies.

Hats off to you and your

fine company…you are truly

an American original.”

overwhelmingly approved the merger at a special shareholder

meeting held last April, and we thank you for your vote of

support. The transaction closed this past June 1, and we now

have under our banner three American icon brands: Smucker’s,

Jif, and Crisco. Each is number one in its category, and each

has a long and proven history with strong consumer equities.

The addition of Jif and Crisco will nearly double our sales

and more than double our profits in the coming year. In the

past, approximately 50 percent of our sales came from fruit

spreads across several business areas. The new Smucker

Company, on the other hand, will be predominantly a consumer

retail, branded business, with a good balance of product cate-

gories. Roughly a quarter of our business will be in the peanut

butter category; a quarter will be in fruit spreads; and another

quarter will be in shortening and oils. We think this provides

us with a more balanced, profitable basis for future growth.

This transaction also adds more than 700,000 new share-

holders to our existing shareholder base. As a result, many

of you are receiving our annual report for the first time, and

we wholeheartedly welcome you into the Smucker family.

Our number of shares outstanding has doubled to more than

49,500,000, increasing the liquidity of our stock. Most impor-

tant, in the course of the 2002 fiscal year, the market value of

a common share increased more than 30 percent. Increasing

shareholder value has always been a priority, and we will

continue to manage the Company with the goal of providing

our shareholders with a fair return on their investment.

Comments From Our Consumers

“I love your Low Sugar and

Sugar Free jams and jellies.

Smucker’s has been a part

of my family since I was born…

Now that I am an adult,

I appreciate the goodness of

Smucker’s more than ever!

Your Low Sugar products

taste like fresh homemade

preserves. Other jams and

jellies on the market taste

like pure sugar, but

Smucker’s lets the fruit

shine through!”

Our aim has been to complete the transition to “the new
Smucker Company” as smoothly and seamlessly as possible,
and we are pleased to report that our integration activities are
virtually complete. Of course, the process required significant
time and attention from all levels of our organization. We nev-
ertheless maintained careful oversight of our core business and
achieved record results in terms of sales and earnings per share.
Sales for the year reached $687 million, an increase of six
percent, while basic earnings per share, excluding merger costs
and nonrecurring charges, grew from $1.16 to $1.39, a 20 per-
cent increase. We are very appreciative of our employees’ extra
efforts, and we are grateful to our customers and consumers for
once again making the Smucker’s brand their number-one choice
for fruit spreads, natural peanut butter, and ice cream toppings.

We will review the year’s accomplishments by strategic
business area, beginning with consumer, which is our largest
and most profitable business area.

CONSUMER
Our U.S. consumer business had a record year, with sales
and profits increasing four percent and five percent respectively.
We continued to expand our share of the fruit spread market,
reaching an all-time high in excess of 40 percent across all
retail segments.

The increase in our core business was driven primarily by
double-digit growth of our Sugar Free fruit spreads and natural
peanut butter products. Several exciting new products also
contributed to our growth, including two new squeeze fruit
spreads that exceeded our expectations in test markets and that
we will offer in expanded distribution in fiscal 2003. Continuing
our relationship with Masterfoods USA, a division of Mars, Inc.,
we also introduced two new cobranded ice cream toppings:
Twix Magic Shell and Milky Way spoonable topping.

Among the keys to long-term success are efforts to support
our brands in ways that benefit our Company as well as our
customers. Through television and print advertising, which this
year emphasized our Sugar Free fruit spreads, and through
carefully selected sponsorships, we seek to promote our brands
and bring smiles to consumers the world over.

Comments From Our Consumers

“My 6-year-old is such

a finicky eater. He refuses

to buy lunch at school and

doesn’t like sandwiches.

The Uncrustables were

recommended by a friend.

Now, my son will not eat

anything else!!! He absolutely

loves them. The convenience is

wonderful, too. I am a working

mom and find these to be

wonderful both nutritionally

and conveniently. I quickly

put them into his lunchbox

and I don’t have to make

any mess. It’s fast and easy. . . .

Thanks again Smucker’s!

You’ve made our life

easier and better!”

Our ongoing support of Willard Scott’s birthday segment on
NBC’s “Today” is a prime example. This year we were a major
sponsor of Walt Disney World Resorts’ “100 Years of Magic”
Celebration, the World Figure Skating Championships, and a
series of skating specials airing on NBC. Especially exciting is
the recent announcement of our multiyear sponsorship of
“Smucker’s Stars on Ice,” a premier ice skating tour that features
Olympians and World Champions such as Tara Lipinski,
Todd Eldredge, Alexei Yagudin, Kurt Browning, Jamie Sale and
David Pelletier, and Elena Berezhnaya and Anton Silkharulidze.
As mentioned, the Jif peanut butter and Crisco shortening
and oils businesses became part of the Smucker Company in
June. Jif will be added to our consumer business area. For
Crisco, we have created a new strategic business area that will
help provide focus on shortening and oils, and although this
is a new category for us, we believe the Crisco brand is a great
fit with our Company. Our intent is to successfully implement
the strategies we have developed to fortify both brands’ already
strong consumer image and gain market share.

In the fourth quarter, we began to expand the retail availability

of Smucker’s Uncrustables to an additional 45 percent of
the United States, meaning that the product will be available
in more than half of the country. This thaw-and-serve frozen
peanut butter and jelly sandwich continues to be a hit with
consumers of all ages, and we expect it to remain a star
performer. Significant investment spending will be needed
behind this unique product for the next couple of years, but
we believe it has great potential and offers the Company a
good platform for future growth.

FOODSERVICE
This business, which sells to restaurants, caterers, hotels,
airlines, hospitals, and schools, saw its most challenging year
as a result of a slow economy and the aftermath of the events
of September 11. By the end of the year, however, foodservice
sales were growing again. We were especially encouraged by
the strength of our core Smucker’s portion control line, as it
generated modest growth even in a difficult environment.

Comments From Our Consumers

“Thank you for bringing

good, wholesome food to

America’s tables. Keep it up,

eventually the rest of the

world will catch up to

Smucker’s standards.…

I can’t help but think that

you honor J. M. Smucker

when you continue the

tradition of making foods

in the best methods

you know how….”

Comments From Our Consumers

Earlier in this letter, we discussed the consumer business

“I was preparing some

ice cream with Magic Shell for

my 5-year-old and decided

I had to let you know what a

prominent place your product

holds in our “spice” cabinet. . . .

We love your product!

There is always more than

one bottle of Chocolate Fudge

in our cabinet because we

cannot risk running low.”

area’s plan to expand distribution of Smucker’s Uncrustables in
the retail channel. This product is also the fastest growing line
in the foodservice area. In foodservice, Smucker’s Uncrustables
are sold primarily to school systems. Distribution to schools
continues to increase at a high double-digit rate because the
product meets the need on the part of schools to provide a
healthful, protein-rich menu alternative that is readily accepted
by children. Uncrustables sales in this channel reached
$16 million for the year, and we anticipate continued growth
thanks to the addition in the last quarter of the year of a
prebrowned grilled cheese sandwich. The foodservice area
also expects to reap dividends from expansions made in fiscal
2002 to our PlateScapers line of dessert decorating products.

BEVERAGE
Three health and natural foods brands — R.W. Knudsen
Family, Santa Cruz Organic, and After The Fall — are the
mainstays of this area. Interest in healthful eating continues to
rise in America. As a result, our beverage business grew
steadily this past year. Santa Cruz Organic remains the fastest
growing line in our beverage area, as consumers remain very
interested in products made from certified organic ingredients.
We are the clear leader in all-natural and organic juices and
introduced a number of new flavors this past year. At the
same time, we discontinued certain items that did not meet
our growth objectives. This allowed us to increase efficiencies
in our production facilities, which translated into enhanced
margins for this business area.

INTERNATIONAL
Our international business also saw record results this year,
in spite of unfavorable exchange rates. In constant dollars,
sales in the international business area grew by three percent.
Our two biggest operations outside the United States continue
to be in Canada and Australia. In Canada, we experienced
solid growth and achieved record results by emphasizing our
Smucker’s pure and No Sugar Added jams, which we supported

Comments From Our Consumers

“I wanted to write to let you

know how very much I enjoy

your Sugar Free syrup. . . .

One of life’s greatest

with an expanded national print advertising campaign. The
Smucker’s line of retail ice cream toppings and foodservice
portion control fruit spreads also were significant contributors.
Our Canadian group looks forward to managing the Crisco
brand, which has had a strong presence in that market for a
number of years.

pleasures is for me to enjoy

In Australia, with our IXL and Allowrie fruit spread

my wife’s buttermilk oat bran

pancakes, and nothing tops

them better than your

Sugar Free syrup. The taste

and texture are superb.

So many other brands of

sugar free syrup are

brands, we became the largest manufacturer of fruit spreads —
a first-time milestone for our Henry Jones Foods subsidiary.
Competition in Australia continues to be a challenge, though,
with two new fruit spread competitors entering the market in
the past several years. In spite of that, IXL has maintained its
number-one market share position thanks to growing total
sales of nontraditional jam product lines, such as Light,
Reduced Sugar, and 100% Fruit.

watery and tasteless but

We also are pleased with the performance of our businesses

Smucker’s has a thick and

rich texture and taste.

Thank you for making

life a little sweeter.”

in Latin America and Mexico, where we experienced a total
sales increase of 22 percent. Another focus for the international
area is on profitable export business. Currently we distribute
our products in more than 45 countries.

INDUSTRIAL INGREDIENTS
For the most part, this business area produces fruit fillings
and preparations and markets them to other manufacturers
for use in their food products. This past year, we acquired
International Flavors and Fragrances Inc.’s formulated fruit
and ingredient business. The addition of this business and its
quality line of customers added about $15 million in sales
for the Company in fiscal 2002. Also, as we announced in
our third quarter report, we are continuing to review our
industrial contracts and “rationalizing” those that do not meet
our long-term margin objectives. As we also announced, the
discontinuation of this business will reduce sales by $40 to
$50 million over the next year or two, but will have only a
minor impact on earnings. The new accounts acquired, com-
bined with the elimination of lower-margin existing contracts,
will provide us with a stronger, more viable ingredients busi-
ness overall and a stellar list of branded customers.

THE FUTURE
The future of The J. M. Smucker Company is more promising
than ever. We have just finished a year in which our core busi-
nesses grew at a steady pace, both top- and bottom-line, and
in which we added two more American icon brands, Jif and
Crisco. This gives us brand leadership in seven U.S. food cate-
gories and significantly supports our vision of “a company
composed of American icon brands with the leadership position
in their respective categories.” As we look to the years ahead,
we expect to prosper by three strategies: (1) growing market
share of our existing brands, (2) introducing new products,
and (3) making strategic acquisitions. We have an extremely
strong balance sheet that provides us with the ability to con-
tinue to invest in our current brands and at the same time to
support future growth through acquisitions of other leading
brands. Most important, ours is a Company of very talented
people who work well individually and in teams. All of us
are dedicated to doing what is right as we strive to grow the
business at a sustained rate.

Although The J. M. Smucker Company has made significant

changes this past year, the Company will continue to be
grounded on its founding values, what we refer to as our
Basic Beliefs: People, Quality, Ethics, Growth, and Independence.
We are grateful to you, our shareholders, for your continued
support; to our employees for their dedicated and talented
service; to our customers for their faith in us; and to our
consumers for making our products marketplace leaders.

Sincerely,

Tim Smucker

Richard Smucker

Comments From Our Consumers

“We recently purchased

Smucker’s Snackers.

What a great idea!…

No refrigeration makes it

very convenient all of the

time. It’s great for a

pick-me-up when getting

tired in the afternoon.”

FINANCIAL REVI EW

Five-Year Summary of Selected Financial Data

Summary of Quarterly Results of Operations

Stock Price Data

Management’s Discussion and Analysis

Management’s Report on Responsibility for
Financial Reporting

Report of Independent Auditors

Consolidated Financial Statements

Notes to Consolidated Financial Statements

FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA

The following table presents selected financial data for each of the five years in the period ended April 30, 2002, as
restated for the change in accounting for certain inventory from the last-in, first-out (LIFO) method to the first-in,
first-out (FIFO) method, as discussed in Note B to the consolidated financial statements. The selected financial data
was derived from the consolidated financial statements and should be read in conjunction with “Management’s
Discussion and Analysis of Results of Operations and Capital Resources and Liquidity” and the consolidated finan-
cial statements and notes thereto.

Year Ended April 30,

(Dollars in thousands, except per share data)

2002

2001

2000

1999

1998

Statement of Income:

Net sales

Income before cumulative effect of change

in accounting method(1)(2)

Cumulative effect of change in

accounting method(3)(4)

$687,148

$651,242

$641,885

$612,662

$574,855

$ 30,851

$ 28,198

$ 26,273

$ 38,233

$ 34,771

—

(992)

—

(2,958)

Net income

$ 30,851

$ 27,206

$ 26,273

$ 38,233

$ 31,813

Financial Position:
Long-term debt
Total assets
Shareholders’ equity

Other Data:

Earnings per Common Share:

Income before cumulative effect of change

in accounting method(1)(2)

Cumulative effect of change in

accounting method(3)(4)

$135,000
524,892
280,144

$135,000
479,104
250,785

$ 75,000
477,698
320,608

$ — $ —
410,695
308,926

437,657
331,548

$ 1.26

$ 1.11

$ 0.92

$ 1.32

$ 1.20

—

(0.04)

—

(0.10)

Net income

$ 1.26

$ 1.07

$ 0.92

$ 1.32

$ 1.10

Income before cumulative effect of change

in accounting method – assuming dilution(1)(2) $ 1.24

$ 1.10

$ 0.91

$ 1.31

$ 1.18

Cumulative effect of change in

accounting method – assuming dilution(3)(4)

—

(0.04)

—

(0.10)

Net income – assuming dilution

$ 1.24

$ 1.06

$ 0.91

$ 1.31

$ 1.08

Dividends declared per Common Share

$ 0.64

$ 0.61

$ 0.57

$ 0.53

(1) Includes, in 2002, merger and integration costs of $5,031 ($3,160 after tax), or $0.13 per share, related to the Jif and Crisco transaction.

(2) Includes, in 2001, a nonrecurring charge of $2,152 ($1,313 after tax), or $0.05 per share, relating to the sale of real estate, and in 2000, non-
recurring 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 E
to the consolidated financial statements.

(3) Reflects, in 2001, the impact of adopting the provisions of the Securities and Exchange Commission’s Staff Accounting Bulletin No. 101,
Revenue Recognition in Financial Statements (SAB 101), as discussed in Note A to the consolidated financial statements. Had SAB 101 been
retroactively applied to all periods presented, earnings per Common Share would have been $0.01 lower in 1999.

(4) Reflects, in 1998, the cumulative effect of adopting the provisions of the Emerging Issues Task Force of the Financial Accounting Standards
Board Issue 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).

SUMMARY OF QUARTERLY RESULTS OF OPERATIONS

The following is a summary of unaudited quarterly results of operations for the years ended April 30, 2002 and 2001,
as restated for the change in accounting for certain inventory from the last-in, first-out (LIFO) method to the first-in, first-
out (FIFO) method as discussed in Note B to the consolidated financial statements.

(Dollars in thousands, except per share data)

Earnings per
Common Share

Earnings per
Common Share –
Assuming Dilution

Quarter
Ended

Net
Sales

Gross
Profit

Income
Before
Cumulative
Effect of
Change in
Accounting
Method

(1)(2)
(3)

Income
Before
Cumulative
Effect of
Change in
Net Accounting
Method

Income

(1)(2)
(3)

Income
Before
Cumulative
Effect of
Change in
Net Accounting
Method

Income

(1)(2)
(3)

Net
Income

Fiscal 2002

Fiscal 2001

July 31, 2001
October 31, 2001
January 31, 2002
April 30, 2002

July 31, 2000
October 31, 2000
January 31, 2001
April 30, 2001

$169,792
172,844
168,392
176,120

$166,328
169,837
153,628
161,449

$57,180
55,820
55,001
56,990

$55,177
53,635
50,625
47,857

$8,547
7,704
7,947
6,653

$9,104
5,759
5,905
7,430

$8,112
5,759
5,905
7,430

$0.35
0.32
0.32
0.27

$0.32
0.23
0.25
0.31

$0.35
0.32
0.32
0.27

$0.28
0.23
0.25
0.31

$0.35
0.31

$0.35
0.31
0.32 0.32
0.26

0.26

$0.32
0.23
0.24
0.30

$0.28
0.23
0.24
0.30

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

(1) Includes merger and integration costs during fiscal 2002 third and fourth quarters of $558 ($0.02 per share) and $2,602 ($0.11 per share), respec-
tively, related to the Jif and Crisco transaction.

(2) Includes a nonrecurring charge during fiscal 2001 second quarter of $1,313 ($0.05 per share) relating to the sale of real estate, as discussed in Note E
to the consolidated financial statements.

(3) Fiscal 2001 fourth quarter income was increased by $1,100 ($0.05 per share) resulting from adjustments to the effective income tax rate.

STOCK PRICE DATA

The Company’s Common Shares are listed on the New York Stock Exchange – ticker symbol SJM. The table below presents
the high and low market prices for the shares and the quarterly dividends declared. There were 148,652 shareholders of
record as of June 14, 2002.

Fiscal 2002

Fiscal 2001

Quarter Ended

July 31, 2001
October 31, 2001
January 31, 2002
April 30, 2002

July 31, 2000
October 31, 2000
January 31, 2001
April 30, 2001

High

$27.77
36.10
37.73
36.65

$19.50
25.00
29.00
29.00

Low

Dividends

$23.91
23.90
31.00
30.30

$15.75
17.88
21.63
23.95

$0.16
0.16
0.16
0.16

MANAGEMENT’S DISCUSSION AND ANALYSIS

The J. M. Smucker Company (Company) is a leading North
American manufacturer and marketer of fruit spreads,
natural peanut butter, dessert toppings, and health and
natural foods beverages. The Company’s operations and
distribution outside of North America are principally in
Australia, Brazil, China and the Pacific Rim, Europe,
and the Middle East.

On June 1, 2002, the Company consummated a trans-
action with The Procter & Gamble Company (P&G),
whereby the Jif and Crisco businesses of P&G were
merged with and into the Company. The merger will be
accounted for as a purchase business combination, with
the Company as the accounting acquirer. The addition
of these two brands has created a new company with a
leading brand position in seven food categories. The
expected operating results and financial position of this
new company are significantly different than those of
the Company as reported in this annual report, in
Management’s Discussion and Analysis, and in the con-
solidated financial statements. See Note C to the consol-
idated financial statements for additional information on
the merger and for pro forma financial information of
the combined Company.

During fiscal 2002, the Company changed from the last-
in, first-out (LIFO) method of accounting for certain
inventory to the first-in, first-out (FIFO) method. The
results of operations included in this section for years prior
to fiscal 2002 have been restated to reflect this change.

RESULTS OF OPERATIONS

COMPARISON OF FISCAL 2002 WITH FISCAL 2001

Sales in fiscal 2002 were $687.1 million, up 6% over the
$651.2 million in sales in the prior year. Excluding the
impact of acquisitions, sales were up approximately
$21 million or 3%. Sales in the domestic segment were
$590.3 million, up 6%, while international segment
sales were $96.8 million, a 4% increase. Company oper-
ating income was $59.8 million compared to $51.3 mil-
lion in fiscal 2001, excluding the impact of $5 million
($3.2 million after tax, or $0.13 per share) in merger

and integration costs associated with the Jif and Crisco
merger in fiscal 2002 and excluding a $2.1 million ($1.3
million after tax, or $0.05 per share) nonrecurring charge
in fiscal 2001. Fiscal 2002 net income, excluding the
impact of merger and integration costs, was $34.0 mil-
lion, or $1.39 per share ($1.37 per share, assuming dilu-
tion), compared to $29.5 million, or $1.16 per share
($1.15 per share, assuming dilution), last year. The fiscal
2001 results noted exclude the nonrecurring charge and
the cumulative effect of an accounting change of $1.6
million ($1 million after tax, or $0.04 per share). During
the fourth quarter of fiscal 2002, the Company elected
to change the method of accounting for certain inven-
tory from the LIFO method to the FIFO method. As a
result, the Company restated its fiscal 2001 financial
results, resulting in a reduction in net income of $3.5
million, or $0.14 per share.

Sales in the domestic segment were up 6% due primarily
to increases in the consumer, foodservice, and industrial
business areas. The Company’s consumer business grew
4%, due mostly to new products and growth in Sugar
Free fruit spreads, natural peanut butters, and Goober
peanut butter and jelly combination products. During
the year, the Company discontinued selling its low-margin,
value-priced Sunberry Farms brand. Consumer area
sales increased in the grocery, club store, and mass retail
channels and decreased modestly in the military and con-
sumer direct channels. The Company’s share of market in
the fruit spreads category continues to grow, reaching an
all-time high in excess of 40% across all retail segments.

In the foodservice area, sales were up 9% as sales and
distribution of Smucker’s Uncrustables to schools con-
tinued to increase. Total foodservice sales of this product
reached approximately $16 million, double the prior
year. This new business helped offset a general softness
in traditional foodservice sales, which were impacted
during most of the year by the weak economy and
declines in the travel and leisure industry following the
events of last September 11. Despite those events, the
traditional foodservice business realized a small increase,
up 1% over the prior year. Sales in the beverage area
were up 7% over the prior year, due primarily to
increased sales of R.W. Knudsen Family and Santa Cruz
Organic products.

Sales in the Company’s industrial business were up 11%
for the year. The increase was due to the acquisition of
the International Flavors and Fragrances, Inc. (IFF) fruit
and vegetable preparation businesses in October 2001.
The IFF acquisition contributed approximately $13 mil-
lion to domestic sales and $0.05 per share to earnings
during the year. On an annual basis, the business
acquired from IFF is expected to contribute sales of
approximately $25 million. This additional business is
expected to offset a similar amount of current business
in the industrial area that will be eliminated in fiscal
2003 due to low margins. The addition of the IFF busi-
ness, along with the merger into the Company of the Jif
and Crisco brands, has given the Company the oppor-
tunity to restructure its industrial business and focus on
contracts that support long-term margin objectives. As a
result, it is discontinuing select low-margin contracts.
This will result in an approximate loss of $40 to
$50 million in ingredient sales over the next two years;
however, the impact on net income should be less than
$1 million. The addition of the IFF business and the
rationalization of low-margin product lines are consis-
tent with the Company’s overall strategic direction to
diversify its customer base and improve profitability in
the industrial area.

In the international segment, the Company’s Canadian
business continued to perform well, with sales increas-
ing 4% in the local currency. Export sales increased 3%
and sales in the Company’s Mexican market increased
22% over last year. Approximately $1.9 million of the
$3.5 million increase in international sales was due to
the addition of that portion of the business acquired
from IFF that is located in Brazil. In Australia, the
Henry Jones Foods business was up 1% in local cur-
rency compared to fiscal 2001. The impact of the strong
U.S. dollar as compared primarily to the local currencies
in Australia, Brazil, and Canada resulted in fiscal 2002
sales being approximately $5.4 million less than they
would have been had exchange rates remained constant
with exchange rates last year.

The Company’s gross profit margin was 32.7% in fiscal
2002, compared to 31.8% last year. The cost of prod-
ucts sold for the majority of the Company’s businesses
was consistent with last year, as raw material costs

remained essentially flat. Selling, distribution, and admin-
istrative (SD&A) costs were 24.8% of sales, as com-
pared to 24.0% last year. However, if the $5 million of
merger and integration costs associated with the Jif and
Crisco merger are excluded, SD&A costs as a percent of
sales would have been comparable to last year. The
dollar increase in SD&A expenses was primarily due to
higher amortization charges associated with previously
capitalized information systems implementation costs.
Marketing expenses were down 1% from the prior year,
primarily due to lower expenditures in the beverage and
consumer direct areas.

Interest expense increased $1.4 million over the prior
year as the long-term debt placement that was com-
pleted during the second quarter of fiscal 2001 was on
the books for a full year in fiscal 2002. The Company
capitalized approximately $0.5 million in interest
during fiscal 2002 that was associated with the
Company’s information technology reengineering project.
Also during the year, the Company entered into interest
rate swap agreements in order to manage interest rate
exposure and lower financing costs. The Company
effectively converted $17 million of fixed-rate debt
(7.70% notes due in September 2005) and $33 million
of fixed-rate debt (7.87% notes due in September 2007)
to variable-rate debt. The interest rate swaps are consid-
ered fair value hedges and are 100% effective. The interest
rate swaps reduced interest expense by approximately
$0.6 million in fiscal 2002.

The effective income tax rate for the year increased to
38.5% from 36.6% in fiscal 2001 due to a general
increase in state and local taxes, foreign income taxes,
and other nondeductible expenses.

On June 1, 2002, the Company completed its merger of
P&G’s Jif peanut butter and Crisco shortening and oils
businesses with and into the Company. Under the terms
of the transaction, the Jif and Crisco businesses were
contributed by P&G to a wholly-owned subsidiary, the
shares of which were then distributed by P&G to its
shareholders. That former subsidiary was then merged
into the Company with the shareholders of P&G receiv-
ing one share of new Company stock for every 50 P&G
shares that they held as of the record date for the distribu-
tion. Existing Company shareholders received 0.9451 of a

new share for each existing share of the Company they
held. As a result, 49.5 million shares were issued and are
outstanding with the previous P&G shareholders hold-
ing approximately 52.5% of the total. The total price of
the transaction, based on an average share price of $30
per share (calculated at the time the transaction was
announced), was approximately $781 million.

COMPARISON OF FISCAL 2001 WITH FISCAL 2000

Sales in fiscal 2001 were $651.2 million, up from
$641.9 million in fiscal 2000. Domestic sales were
$557.9 million, up 1% over fiscal 2000, while the inter-
national segment realized an increase of $2.8 million or
3%. Excluding the impact of nonrecurring charges in
both years and the cumulative effect of an accounting
change in fiscal 2001, earnings for the year were $29.5
million, or $1.16 per share ($1.15 per share, assuming
dilution), compared to $35.9 million, or $1.26 per share
($1.25 per share, assuming dilution), in fiscal 2000.
Including the impact of nonrecurring charges and
change in accounting method, earnings were $27.2 mil-
lion, or $1.07 per share ($1.06 per share, assuming dilu-
tion),
in fiscal 2001 compared to $26.3 million, or
$0.92 per share ($0.91 per share, assuming dilution), in
fiscal 2000.

In the domestic segment, the Company’s consumer busi-
ness grew 4%, due primarily to an increase in sales of
Sugar Free fruit spreads and natural peanut butters, along
with growth in the club store channel. The Company
also saw 4% growth in its foodservice business, driven
in large part by the Smucker’s Uncrustables line of
thaw-and-serve peanut butter and jelly sandwiches in its
schools market. Sales of traditional portion control items
were flat compared to fiscal 2000. The specialty busi-
ness was up for fiscal 2001 due primarily to new prod-
uct sales. In the beverage area, sales of R.W. Knudsen
Family and Santa Cruz Organic products continue to
grow. However, overall beverage sales were flat compared
to fiscal 2000 due to softness in After The Fall brand
sales. In the industrial area, domestic sales were below
fiscal 2000, as sales with new customers did not fully
offset declines in sales with certain existing customers.

In the international segment, the increase came from a
full year inclusion of the Company’s Brazilian opera-
tion. The Company’s Canadian business performed well,

contributing to overall segment performance for the
second consecutive year. Sales were negatively impacted
by exchange rates and increased competitive activity in
the Company’s Australian market. Sales in Mexico and
the Company’s European and Middle East markets were
also down. The impact of a strong U.S. dollar, primarily
in comparison to the Australian and Canadian dollars,
resulted in fiscal 2001 sales being approximately $6.6
million less than they would have been had exchange
rates been equal to fiscal 2000 levels. Had exchange
rates remained constant, international sales would have
been up 10%.

The cost of products sold as a percentage of net sales
increased to 68.2%, compared to 67.5% in fiscal 2000.
During the year, the Company benefited from the lower
cost of fruit packed during the summer months.
However, these savings were offset by the impact of
revaluing carryover fruit inventories (i.e., fruit packed in
fiscal 2000) to reflect the current lower cost. The sav-
ings were also offset by increased energy costs, which
were up 20% over fiscal 2000, and higher freight costs.
SD&A expenses increased at approximately the same
rate as sales. Marketing expenses were up 7% over fiscal
2000 related to the introduction of new products. This
was somewhat offset by a 2% decrease in selling expenses
and a less than 1% increase in administrative costs.

During the second quarter of fiscal 2001, the Company
finalized the sale of the former Mrs. Smith’s real estate
in Pottstown, Pennsylvania, resulting in a pretax loss of
approximately $2.1 million, or $0.05 per share. This
transaction represented the final nonrecurring charge
relating to the previously announced financial review of
certain businesses and assets by the Company, initiated
in fiscal 2000. The total amount of nonrecurring charges
taken in connection with the review was $16.6 million,
with $14.5 million of that amount taken in fiscal 2000.

Interest expense increased over fiscal 2000 due to the
long-term debt placement completed during the second
quarter of the fiscal year. During the year, the Company
capitalized approximately $0.9 million of interest, pri-
marily associated with the Company’s information tech-
nology reengineering project.

The effective income tax rate for the year was 36.6%
compared to 36.5% in fiscal 2000.

CAPITAL RESOURCES AND LIQUIDITY

(Dollars in thousands)

2002

2001

2000

Year Ended April 30,

Net cash

provided by
operating activities

Net cash used for

investing activities
Net cash (used for)

provided by
financing activities

$67,000

$88,196

$32,271

(20,510)

(27,612)

(39,818)

(5,808)

(32,325)

31,254

increase capacity and improve efficiencies in production
of Smucker’s Uncrustables. Dividend payments in fiscal
2003 are also expected to increase as a result of the
additional number of outstanding shares resulting from
the merger of the Jif and Crisco businesses with and into
the Company and a possible increase in the dividend rate.

Assuming there are no other material acquisitions or
other significant investments, the Company believes that
cash on hand together with cash generated by opera-
tions and existing lines of credit will be sufficient to
meet fiscal 2003 requirements, including the payment of
dividends and interest on outstanding debt.

The financial position of the Company remains strong
with an increase in cash and cash equivalents of $40.8
million during the year. The increase in cash and cash
equivalents reflects cash generated from operations of
$67.0 million. Additional debt was not required to com-
plete the merger of the Jif and Crisco businesses with
and into the Company and total long-term debt as a
percent of total capitalization was reduced from
approximately 33% at April 30, 2002, to 11% follow-
ing the merger.

Fiscal 2002 capital expenditures were $23.5 million,
including capitalized software and consulting costs of
$3.9 million. This was down from $29.4 million in the
previous year. Other significant uses of cash during the
year included the payment of dividends of $0.64 per
share or $15.6 million, $5.7 million for the acquisition
from International Flavors and Fragrances, Inc., and the
payment of merger and integration costs of $5 million.

Capital expenditures for fiscal 2003 are budgeted at
$59 million, representing a significant increase over the
Company’s historical levels. While capital expenditures
in absolute terms are expected to more than double, the
fiscal 2003 capital expenditures budget as a percent of
sales is expected to be approximately 4.7% as compared
to 3.4% in fiscal 2002. The planned increase in capital
expenditures is primarily attributable to (i) building
expansion projects at the corporate headquarters in
Orrville, Ohio, necessary in order to consolidate func-
tions and to house employees added in connection with
the merger, and (ii) spending associated with plans to

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

The preparation of financial statements in conformity
with accounting principles generally accepted in the
United States requires management to make estimates
and assumptions that in certain circumstances affect
amounts reported in the accompanying consolidated
financial statements. In preparing these financial state-
ments, management has made its best estimates and
judgments of certain amounts included in the financial
statements, giving due consideration to materiality. The
Company does not believe there is a great likelihood
that materially different amounts would be reported
under different conditions or using different assump-
tions related to the accounting policies described below.
However, application of these accounting policies
involves the exercise of judgment and use of assump-
tions as to future uncertainties and, as a result, actual
results could differ from these estimates.

Accrued Marketing and Merchandising. In order to sup-
port the Company’s products, various marketing pro-
grams are offered to customers which reimburse them
for a portion or all of their promotional activities related
to the Company’s products. The Company regularly
reviews and revises, when it deems necessary, estimates
of costs to the Company for these marketing and mer-
chandising programs based on estimates of what has
been incurred by customers. Actual costs incurred by the
Company may differ significantly if factors such as the
level and success of the customers’ programs or other
conditions differ from expectations.

Impairment of Long-Lived Assets. Long-lived assets his-
torically have been reviewed for impairment whenever
events or changes in circumstances indicate that the car-
rying amount of the asset may not be recoverable.
Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of the assets to
future net cash flows estimated to be generated by such
assets. If such assets are considered to be impaired, the
impairment to be recognized is the amount by which the
carrying amount of the assets exceeds the fair value of
the assets. There are no events or changes in circum-
stances of which management is aware indicating that
the carrying value of the Company’s long-lived assets
may not be recoverable. As described below under
“Recently Issued Accounting Standards,” the accounting
treatment for goodwill and other intangible assets will
change significantly in fiscal 2003.

Pension Plans and Other Postretirement Benefit Plans. The
measurement of liabilities related to defined benefit pen-
sion plans and other postretirement benefit plans is based
on management’s assumptions related to future events
including interest rates, return on pension plan assets, rate
of compensation increases, and health care cost trend
rates. Actual pension plan asset performance will either
reduce or increase unamortized pension losses at the end
of fiscal 2003, which ultimately affects net income.

Accrued Expenses. Management estimates certain mate-
rial expenses in an effort to record those expenses in the
period incurred. The most material accrued estimates
relate to insurance-related expenses, including self-
insurance. Workers’ compensation and general liability
insurance accruals are recorded based on insurance
claims processed as well as historical claims experience
for claims incurred, but not yet reported. These esti-
mates are based on historical loss development factors.
Employee medical insurance accruals are recorded based
on medical claims processed as well as historical medical
claims experience for claims incurred but not yet reported.
Differences in estimates and assumptions could result in
an accrual requirement materially different from the cal-
culated accrual.

Other Matters. The Company does not have off-balance
sheet arrangements, financings, or other relationships

with unconsolidated entities or other persons, also
known as “special purpose entities.” Transactions with
related parties are in the ordinary course of business, are
conducted on an arm’s-length basis, and are not mate-
rial to the Company’s results of operation, financial con-
dition, or cash flows.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No.
141, Business Combinations (SFAS 141) and No. 142,
Goodwill and Other Intangible Assets (SFAS 142). SFAS
141 requires that the purchase method of accounting be
used for all business combinations initiated after June 30,
2001. SFAS 141 also provides new criteria to determine
whether an acquired intangible asset should be recog-
nized separately from goodwill. The adoption of SFAS
141 had no impact on the Company’s results of opera-
tions or financial condition. SFAS 142 is effective for the
Company as of May 1, 2002. In accordance with SFAS
142, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but will be
subject to impairment testing. Intangible assets with
finite lives will continue to be amortized over their
useful lives. SFAS 142 requires an initial goodwill and
indefinite lived intangible asset impairment assessment in
the year of adoption, and at a minimum, annual impair-
ment testing thereafter. The discontinuance of goodwill
and indefinite lived intangible asset amortization in fiscal
2003 will increase operating income by approximately
$3.5 million. The Company has not completed its initial
asset impairment assessment as required in adopting
SFAS 142.

In August 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS 144). SFAS 144
addresses financial accounting and reporting for the
impairment or disposal of long-lived assets to be held
and used, to be disposed of other than by sale, and to be
disposed of by sale. SFAS 144 is effective for the
Company as of May 1, 2002. The adoption of SFAS 144
is not expected to have a material impact on the
Company’s results of operations or financial condition.

DERIVATIVE FINANCIAL INSTRUMENTS AND MARKET RISK

The following discussions about the Company’s market
risk disclosures involve forward-looking statements.
Actual results could differ from those projected in the
forward-looking statements. 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, 2002,
approximate carrying value. Interest rate swaps are used
to hedge underlying debt obligations and reduce overall
interest expense. Market risk, as measured 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, 2002, including derivative and other
instruments sensitive to interest rates, 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. As of April 30, 2002,
the Company had interest rate swap agreements on fixed
rate obligations in the amount of $50 million. These
exchange agreements are perfectly effective as defined by
Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments and Hedging
Activities (SFAS 133) and had a fair value of $0.5 million
at April 30, 2002. The weighted average interest rate for
these agreements was 4.88% at April 30, 2002.

Foreign Currency Exchange Risk. The Company has
concluded that its foreign currency exposure on future
earnings or cash flows is not significant, and has cur-
rently chosen not to hedge its foreign currency exposure.

The Company has operations outside the United States
with foreign currency denominated assets and liabilities,
primarily denominated in Australian, Brazilian, and
Canadian currencies. Because the Company has foreign
currency denominated assets and liabilities, financial
exposure may result, primarily from the timing of trans-
actions and the movement of exchange rates. The for-
eign currency balance sheet exposures as of April 30,
2002, are not expected to result in a significant impact
on future earnings or cash flows.

Revenues from customers outside the United States rep-
resented approximately 14% of net sales during fiscal
2002. Thus, certain 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-looking
statements that are based on current expectations and
are subject to a number of risks and uncertainties that
could cause actual results to differ materially. These
risks and uncertainties include, but are not limited to:

• the success and cost of integrating the Jif and Crisco

businesses into the Company;

• the success and cost of new marketing and sales
programs and strategies intended to promote new
growth in the Jif and Crisco businesses and in their
respective market shares;

• the success and cost of introducing new products;

• general competitive activity in the market;

• the ability of business areas to achieve sales

targets and the costs associated with attempting
to do so;

• the ability of the Company from time to time

to successfully effect price increases;

• the ability to improve sales and earnings

performance in the Company’s formulated
ingredient business;

• the exact time frame in which the loss of sales

associated with discontinued industrial contracts
will occur and the Company’s ability to successfully
cover or eliminate the overhead associated with
those sales;

• costs associated with the implementation of new

business and information systems;

• raw material and ingredient cost trends; and

• foreign currency exchange and interest rate

fluctuations.

MANAGEMENT’S REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING

Management of The J. M. Smucker Company is responsible for the preparation, integrity, accuracy, and consistency
of the consolidated financial statements and the related financial information in this report. Such information has
been prepared in accordance with accounting principles generally accepted in the United States 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 adherence 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 three 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 satisfies 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 chair 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.

Timothy P. Smucker
Chairman and Co-Chief
Executive Officer

Steven J. Ellcessor
Vice President — Finance and
Administration, Secretary,
and Chief Financial Officer

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, 2002
and 2001, and the related statements of consolidated income, shareholders’ equity, and cash flows for each of the three
years in the period ended April 30, 2002. These financial statements are the responsibility of the Company’s manage-
ment. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those stan-
dards require that we plan and perform the audit to obtain reasonable assurance about whether the financial state-
ments 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 consolidated financial statements referred to above present fairly, in all material respects, the con-
solidated financial position of The J. M. Smucker Company at April 30, 2002 and 2001, and the consolidated results
of its operations and its cash flows for each of the three years in the period ended April 30, 2002, in conformity with
accounting principles generally accepted in the United States.

As explained in Note B to the consolidated financial statements, the Company has given retroactive effect to a change
in the method of accounting for certain inventory from the last-in, first-out (LIFO) method to the first-in, first-out
(FIFO) method.

Akron, Ohio
June 6, 2002

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
Merger and integration costs
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 $572

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

Year Ended April 30,

2002

2001

2000

$687,148
462,157

$651,242
443,948

$641,885
432,993

224,991
165,172
5,031
—

54,788
2,181
(9,207)
2,436

207,294
155,973
—
2,152

49,169
2,918
(7,787)
192

208,892
153,297
—
14,492

41,103
2,706
(3,111)
701

50,198
19,347

44,492
16,294

41,399
15,126

30,851

28,198

26,273

—

(992)

—

$ 30,851

$ 27,206

$ 26,273

1.26
—

$ 1.11
(0.04)

$ 0.92
—

$ 1.26

1.07

0.92

$ 1.24
—

$ 1.10
(0.04)

$ 0.91
—

Net Income per Common Share – Assuming Dilution

$ 1.24

$ 1.06

$ 0.91

See notes to consolidated financial statements.

April 30,

2002

2001

$ 91,914

$ 51,125

57,371

55,986

52,817

63,722

54,614

59,561

116,539

114,175

13,989

13,956

279,813

235,242

16,911

87,126

17,684

79,862

242,590

247,235

7,504

17,072

354,131

361,853

(191,342)

(190,283)

162,789

171,570

33,510

14,825

33,955

33,788

11,848

26,656

82,290

72,292

$524,892

$479,104

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

Other intangible assets

Other assets

Total Other Noncurrent Assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

(Dollars in thousands)

Current Liabilities
Accounts 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:

Authorized – 70,000,000 shares; outstanding – 24,869,463 in 2002
and 24,359,281 in 2001 (net of 7,555,113 and 8,065,295 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

April 30,

2002

2001

$ 32,390
22,866
11,563
2,078
3,979
7,555

$ 29,967
15,250
8,559
2,916
3,897
7,473

80,431

68,062

135,000
14,913
4,105
10,299

135,000
14,224
4,981
6,052

164,317

160,257

—

6,217
33,184
267,793

6,090
19,278
253,226

(2,725)
(8,562)
(15,763)

(2,248)
(8,926)
(16,635)

280,144

250,785

$524,892

$479,104

See notes to consolidated financial statements.

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 expense (benefit)
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

Year Ended April 30,

2002

2001

2000

$30,851

$27,206

$26,273

23,932
4,625
—

—
1,545

(1,217)
(2,063)
(11)
12,483
25
(3,170)

22,521
4,400
1,313

992
2,040

5,196
17,326
3,830
10,558
(1,084)
(6,102)

21,674
4,524
9,626

—
(3,872)

(11,678)
(6,792)
(733)
(9,174)
2,580
(157)

Net Cash Provided by Operating Activities

67,000

88,196

32,271

Investing Activities

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

Net Cash Used for Investing Activities

Financing Activities

Proceeds from long-term debt
Repayment of short-term debt – net
Purchase of treasury shares
Dividends paid
Net amount received from ESOP Trust
Other – net

Net Cash (Used for) Provided by Financing Activities
Effect of exchange rate changes on cash

Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year

(23,464)
(5,714)
7,060
1,608

(29,385)
—
278
1,495

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

(20,510)

(27,612)

(39,818)

—
—
(1,128)
(15,568)
364
10,524

(5,808)
107)

40,789
51,125

60,000
—
(80,964)
(16,686)
297
5,028

(32,325)
(907)

27,352
23,773

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

31,254
(615)

23,092
681

Cash and Cash Equivalents at End of Year

$91,914

$51,125

$23,773

( ) Denotes use of cash

See notes to consolidated financial statements.

STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY

The J. M. Smucker Company

(Dollars in thousands)

Balance at May 1, 1999,

as previously stated

Adjustment for the

cumulative effect on the
prior years of applying
retroactively the change in
the method of accounting for
inventories (see Note B)

Balance at May 1, 1999,

as restated

Net income
Foreign currency translation

adjustment

Comprehensive Income

Purchase of treasury shares
Stock plans
Cash dividends declared –

$0.61 a share

Tax benefit of stock plans
Other

Common
Shares

Additional
Capital

Retained
Income

Deferred
Compen-
sation

Amount
Due From
ESOP Trust

Accumulated
Other
Compre-
hensive
Loss

Total
Shareholders’
Equity

$7,290

$15,604

$318,660

$(2,001)

$(9,526)

$ (5,698)

$324,329

7,219

7,290

15,604

325,879

(2,001)

(9,526)

(5,698)

331,548

26,273

(3,629)

(237)
28

(566)
1,570

(16,851)

(1,090)

(17,323)

582

303

26,273

(3,629)

22,644

(17,654)
508

(17,323)
582
303

Balance at April 30, 2000

7,081

17,190

317,978

(3,091)

(9,223)

(9,327)

320,608

Net income
Foreign currency translation

adjustment

Comprehensive Income

Purchase of treasury shares
Stock plans
Cash dividends declared –

$0.64 a share

Tax benefit of stock plans
Other

27,206

(7,308)

(1,074)
83

(4,027)
4,820

(75,863)

843

(16,095)

1,295

297

19,898

(80,964)
5,746

(16,095)
1,295
297

Balance at April 30, 2001

6,090

19,278

253,226

(2,248)

(8,926)

(16,635)

250,785

Net income
Foreign currency translation

adjustment

Minimum pension liability

Comprehensive Income

Purchase of treasury shares
Stock plans
Cash dividends declared –

$0.64 a share

Tax benefit of stock plans
Other

30,851

(11)
138

(483)
11,590

(634)

(477)

(15,650)

2,799

364

1,669
(797)

30,851

1,669
(797)

31,723

(1,128)
11,251

(15,650)
2,799
364

Balance at April 30, 2002

$6,217

$33,184

$267,793

$(2,725)

$(8,562)

$(15,763)

$280,144

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 sub-
sidiaries, 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 concentrations 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 exposure 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. The
Company does not require collateral from its customers. The fair value of the Company’s financial instruments, other
than certain of its fixed-rate long-term debt, approximates their carrying amounts (see Note K). The fair value of the
Company’s fixed-rate long-term debt, estimated using current market rates and a discounted cash flow analysis, was
approximately $129,470,000 at April 30, 2002.

Derivative Financial Instruments: Effective May 1, 2001, the Company adopted Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133). SFAS 133 requires
that all derivative financial instruments, such as foreign exchange contracts and interest rate swap agreements, be rec-
ognized in the financial statements and measured at fair value regardless of the purpose or intent for holding them.
Changes in the fair value of derivative financial instruments are either recognized periodically in income or share-
holders’ equity (as a component of other comprehensive income), depending on whether the derivative is being used
to hedge changes in fair value or cash flows. The adoption of SFAS 133 did not have a material effect on the
Company’s results of operations, financial position, or cash flows in fiscal 2002. By policy, the Company has not his-
torically entered into derivative financial instruments for trading purposes or for speculation.

The Company has entered into interest rate swap agreements (see Note K). The interest rate swap agreements effec-
tively modify the Company’s exposure to interest risk by converting a portion of the Company’s fixed-rate debt to a
floating rate. Based on criteria defined in SFAS 133, the interest rate swaps are considered fair value hedges and are
100% effective. The interest rate swap and instrument being hedged is marked to market in the balance sheet. The
mark-to-market value of both the fair value hedging instruments and the underlying debt obligations are recorded as
equal and offsetting gains or losses in other expense. No other cash payments are made unless the contract is termi-
nated prior to maturity, in which case the amount paid or received in settlement is established by agreement at the
time of termination, and usually represents the net present value, at current rates of interest, of the remaining obli-
gations to exchange payments under the terms of the contract. Any gains or losses upon the early termination of the
interest rate swap contracts would be deferred and recognized over the remaining life of the contract.

Use of Estimates: The preparation of consolidated financial statements in conformity with accounting principles gen-
erally accepted in the United States requires management to make certain estimates and assumptions that affect the
amounts reported in the consolidated financial statements and accompanying notes. Significant estimates in these con-
solidated financial statements include nonrecurring charges, allowances for doubtful accounts receivable, estimates of
future cash flows associated with assets, asset impairments, useful lives for depreciation and amortization, loss con-
tingencies, net realizable value of inventories, accruals for marketing and merchandising programs, and the determi-
nation of discount and other rate assumptions for defined benefit pension and other postretirement benefit expenses.
Actual results could differ from these estimates.

Revenue Recognition: The Company recognizes revenue when products are shipped and title has transferred to the
customer.

In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements (SAB 101), which among other guidance clarified the Staff’s view on various rev-
enue recognition and reporting matters. The implementation of SAB 101 was accounted for as a change in accounting
method and applied cumulatively as if the change occurred as of May 1, 2000. The effect of the change was a one-time,
noncash reduction to the Company’s earnings of $992,000 (net of tax of $572,000), or approximately $0.04 per share.

Shipping and Handling Costs: Shipping and handling costs are included in cost of products sold.

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 J).

Inventories: Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO)
method (see Note B).

Goodwill and Other Intangible Assets: Goodwill and other intangible assets, principally trademarks and patents, are
being amortized using the straight-line method over periods ranging from 5 to 40 years for acquisitions prior to July 1,
2001. During the periods presented, the Company continually evaluated whether events or circumstances occurred
which would indicate that the carrying value may not be recoverable or that the useful life warrants revision. When
events or circumstances indicated, the Company analyzed the future recoverability of the asset using an estimate of
the related undiscounted future cash flows of the related business, and recognized any adjustment to the asset’s car-
rying value on a current basis. Accumulated amortization of goodwill and other intangible assets at April 30, 2002
and 2001, was $34,189,000 and $30,300,000, respectively.

Effective May 1, 2002, the Company is required to adopt Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets (SFAS 142). In accordance with this standard, goodwill and intangible assets
deemed to have indefinite lives will no longer be amortized but will be subject to impairment testing. Intangible assets
with finite lives will continue to be amortized over their useful lives. SFAS 142 requires an initial goodwill and indef-
inite lived intangible asset impairment assessment in the year of adoption and, at a minimum, annual impairment tests
thereafter. The discontinuation of goodwill and indefinite lived intangible asset amortization in fiscal 2003 will
increase operating income by approximately $3,500,000. The Company has not completed its initial asset impair-
ment assessment as required in adopting SFAS 142.

Property, Plant, and Equipment: Property, plant, and equipment are recorded at cost and are depreciated on a straight-
line basis over the estimated useful lives of the assets (3 to 15 years for machinery and equipment, and 10 to 40 years
for buildings, fixtures, and improvements).

The Company leases certain land, buildings, and equipment for varying periods of time, with renewal options. Leases
of cold storage facilities are continually renewed. Total rental expense in fiscal 2002, 2001, and 2000 totaled $10,430,000,
$11,827,000, and $10,242,000, respectively. Rental expense for cold storage facilities, which is based on quantities
stored, amounted to $2,324,000, $3,319,000, and $1,490,000 in fiscal 2002, 2001, and 2000, respectively.

Software Costs: The Company capitalizes significant costs associated with the development and installation of inter-
nal use software. Amounts capitalized are amortized over the estimated useful lives of the software, ranging from
3 to 7 years, beginning with the project’s completion. Net capitalized software costs as of April 30, 2002 and 2001,
were $28,173,000 and $29,805,000, respectively, of which $3,484,000 and $7,382,000 were included in construc-
tion in progress. Interest costs of $524,000, $891,000, and $1,069,000 were capitalized during fiscal 2002, 2001,
and 2000, respectively.

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 $15,525,000, $14,178,000,
and $12,855,000 in fiscal 2002, 2001, and 2000, respectively.

Recently Issued Accounting Standards: In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, Business Combinations (SFAS 141). SFAS 141 requires that the purchase
method of accounting be used for all business combinations initiated after June 30, 2001. SFAS 141 also provides
new criteria to determine whether an acquired intangible asset should be recognized separately from goodwill. The
adoption of SFAS 141 had no impact on the Company’s results of operations or financial condition.

In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144 addresses financial account-
ing and reporting for the impairment or disposal of long-lived assets to be held and used, to be disposed of other than
by sale, and to be disposed of by sale. SFAS 144 is effective for the Company as of May 1, 2002. The adoption of SFAS
144 is not expected to have a material impact on the Company’s results of operations or financial condition.

Reclassifications: Certain prior year amounts have been reclassified to conform to current year classifications.

Risks and Uncertainties: In the domestic markets, the Company’s products are primarily sold through brokers to food
retailers, food wholesalers, club stores, mass merchandisers, military commissaries, health and natural food stores,
foodservice distributors and chain operators including hotels and restaurants, schools and other institutions, and to
other food manufacturers. The Company’s distribution outside the United States is principally in Canada, Australia,
Brazil, Mexico, China and the Pacific Rim, Europe, and the Middle East. The fruit raw materials used by the
Company are generally purchased from independent growers and suppliers. 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
concentration of risk with any single customer or supplier whose failure or nonperformance would materially affect
the Company’s results. In addition, the Company insures its business and assets in each country against insurable
risks, as and to the extent that it deems appropriate, based upon an analysis of the relative risks and costs. The
Company believes that the risk of loss from noninsurable events would not have a material adverse effect on the
Company’s operations as a whole.

NOTE B: CHANGE IN ACCOUNTING PRINCIPLE

During the fourth quarter of fiscal 2002, the Company changed its method of accounting for certain inventories from
the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method. The effect of the change on fiscal 2002
net income and previously reported quarterly results in fiscal 2002 was not significant. The impact of the retroactive
restatement on retained earnings as of May 1, 1999, was an increase of $7,219,000.

The effect of the change on previously reported net income and per share amounts is as follows:

(Dollars in thousands, except per share data)

Net income:

Net income, as previously stated using the LIFO method
Effect of the change to the FIFO method

Net income, as restated

Earnings per Common Share:

Net income per Common Share, as previously stated

using the LIFO method

Effect of the change to the FIFO method

Net income per Common Share, as restated

Year Ended April 30,

2001

2000

$30,667
(3,461)

$26,357
(84)

$27,206

$26,273

$ 1.21
(0.14)

$ 0.92
—

$ 1.07

$ 0.92

The Company adopted LIFO in fiscal 1977, when it was experiencing significant inflation in the cost of fruit and
other raw materials, in order to better match current costs with current revenues. However, during the last ten years,
on a cumulative basis, the Company has experienced deflation in fruit costs, primarily resulting from the global sourc-
ing of fruit. The Company believes this trend will continue. The change to FIFO will conform all of the Company’s
inventory accounting to FIFO and will align the Company’s inventory accounting with the majority of consumer
product food companies. Further, the change to FIFO will result in an improvement to reporting interim results by
eliminating the fluctuations resulting from the need to estimate the Company’s fruit costs before the completion of
the growing seasons and final pricing by vendors.

NOTE C: SUBSEQUENT EVENT

On June 1, 2002, the Company merged the Jif peanut butter and Crisco shortening and oils businesses of The Procter &
Gamble Company (P&G) with and into the Company in a tax-free stock transaction. Under the terms of the agree-
ment, P&G spun off its Jif and Crisco businesses to its shareholders and immediately thereafter those businesses were
merged with and into the Company. P&G shareholders received one Company Common Share for every 50 P&G
common shares that they held as of the record date for the distribution of the Jif and Crisco businesses to the P&G
shareholders. The Company’s shareholders received 0.9451 of a new Company Common Share for each Company
Common Share that they held immediately prior to the merger. Approximately 26,000,000 Common Shares were
issued to the P&G shareholders resulting in an aggregate purchase price of approximately $781,000,000 based on
the average market price of the Company’s Common Shares over the period from three days before to three days after
the terms of the acquisition were announced. Upon completion of the merger, the Company had 49,531,376 shares
outstanding.

The merger and the combination of three brands — Smucker’s, Jif and Crisco — enhances the Company’s strategic
and market position. For accounting purposes, the Company is the acquiring enterprise. The merger was accounted
for as a purchase business combination. Accordingly, the results of the Jif and Crisco operations will be included in
the Company’s fiscal 2003 consolidated financial statements from the date of the merger.

The purchase price will be allocated to the underlying assets acquired and liabilities assumed based upon their estimated
fair values at the date of acquisition. The Company will determine the estimated fair values based on independent
appraisals, discounted cash flows, quoted market prices, and estimates made by management. To the extent that the pur-
chase price exceeds the fair value of the net identifiable tangible and intangible assets acquired, such excess will be allo-
cated to goodwill.

The following table summarizes the initial estimated fair values of the assets acquired and liabilities assumed at the
date of acquisition. The allocation of the purchase price is preliminary and subject to adjustment following comple-
tion of the valuation process:

(Dollars in thousands)

Assets:

Tangible assets
Intangible assets not subject to amortization
Intangible assets subject to amortization (15 year weighted-average useful life)
Goodwill

Total assets acquired

Total liabilities assumed

Net assets acquired

June 1, 2002

$156,460
280,000
37,333
454,094

927,887

(146,887)

$781,000

The $454,094,000 of goodwill relates to the domestic segment and will not be deductible for tax purposes.

Had the merger of the Jif and Crisco businesses with and into the Company occurred at the beginning of fiscal 2001,
pro forma consolidated results would have been as follows:

(Dollars in thousands)

Net sales
Operating income, excluding indirect expenses

of the Jif and Crisco businesses

Year Ended April 30,

2002

2001

$1,283,000

$1,267,000

$ 235,000

$ 230,000

NOTE D: 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 aggregation of the consumer,
foodservice, beverage, specialty foods, and industrial business areas. Food products are distributed through various
retail channels including grocery, mass retail, military, club store, health food, and specialty food markets along with
restaurants, health care facilities, schools, and other institutions throughout the United States. These products include
a variety of fruit spreads, dessert toppings, peanut butters, frozen peanut butter and jelly sandwiches, industrial fruit
products, fruit and vegetable juices, beverages, syrups, condiments, and gift packages. The international segment con-
sists of products that are similar in nature to those in the domestic segment but are distributed to geographical mar-
kets outside of the United States.

The following table sets forth reportable segment 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
Merger and integration costs
Other unallocated income (expenses)

Income before income taxes and cumulative effect of

change in accounting method

Assets:

Domestic
International

Total assets

Long-lived assets:

Domestic
International

Total long-lived assets

Expenditures for additions to long-lived assets:

Domestic
International

Year Ended April 30,

2002

2001

2000

$590,327
96,821

$557,921
93,321

$551,324
90,561

$687,148

$651,242

$641,885

$ 21,838
2,094

$ 20,484
2,037

$ 19,789
1,885

$ 23,932

$ 22,521

$ 21,674

$101,530
9,949

$ 87,276
8,415

$ 89,570
10,387

111,479

95,691

99,957

2,181
(9,207)
(4,625)
—
(46,681)
(5,031)
2,082

2,918
(7,787)
(4,400)
(2,152)
(39,443)
—
(335)

2,706
(3,111)
(4,524)
(14,492)
(39,371)
—
234

$ 50,198

$ 44,492

$ 41,399

$438,644
86,248

$402,021
77,083

$399,237
78,461

$524,892

$479,104

$477,698

$211,380
33,699

$210,222
33,640

$207,478
38,774

$245,079

$243,862

$246,252

$ 26,371
2,682

$ 27,714
1,671

$ 26,012
13,824

Total expenditures for additions to long-lived assets

29,053

29,385

39,836

Current assets and liabilities included in businesses acquired,

net of cash acquired

125

—

1,460

Total of additions to property, plant, and equipment and

businesses acquired, net of cash acquired

$ 29,178

$ 29,385

$ 41,296

Segment profit represents revenue less direct and allocable operating expenses and excludes pretax nonrecurring
charges of $2,152,000, relating to the domestic segment in fiscal 2001 and $13,536,000 and $956,000, relating to
the domestic and international segments, respectively in fiscal 2000 (see Note E).

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,

2002

2001

2000

37%
16
11
10
8
7
11

38%
15
12
10
9
7
9

39%
15
12
10
9
7
8

100%

NOTE E: NONRECURRING CHARGE

During fiscal 2001, the Company finalized the sale of the Pottstown manufacturing facility, representing a continua-
tion of the Company’s divestiture of the Mrs. Smith’s pie business. In connection with this sale, the Company recorded
a nonrecurring, noncash charge of $2,152,000 ($1,313,000 net of tax), or $0.05 per share. This transaction repre-
sented the final nonrecurring charge relating to the review of certain businesses and assets as discussed below.

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 businesses 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 pre-
vious acquisitions of the After The Fall (ATF) beverage business in fiscal 1994 and Kraft brand fruit spreads acquired
in fiscal 1997. The impairment charge related to the ATF intangible assets was prompted by a declining sales trend
beginning in fiscal 1996 despite attempts by the Company to reverse this trend. The impairment charge related to the
Kraft intangible assets resulted from sharp sales declines following the Company’s relaunch of the products under the
Sunberry Farms brand. Both of these acquisitions are included in the domestic segment. In addition, certain capital-
ized 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 dis-
counted 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 F: EARNINGS PER SHARE

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

Year Ended April 30,

(Dollars in thousands, except per share data)

2002

2001

2000

Numerator:

Net income for earnings per Common Share and
earnings per Common Share – assuming dilution

Denominator:

Denominator for earnings per Common Share –

weighted-average shares
Effect of dilutive securities:

Stock options
Restricted stock

Denominator for earnings per Common Share –

assuming dilution

Net income per Common Share

$30,851

$27,206

$26,273

24,457,194 25,428,117 28,670,770

336,582
64,297

148,698
81,442

56,380
23,205

24,858,073 25,658,257 28,750,355

$ 1.26

$ 1.07

$ 0.92

Net income per Common Share – assuming dilution

$ 1.24

$ 1.06

$ 0.91

NOTE G: MERGERS AND ACQUISITIONS

During fiscal 2002, the Company utilized cash on hand to complete one acquisition for $5,714,000. The acquisition
was accounted for as a purchase business combination and the results of operations of the acquired company were
included in the consolidated results of the Company from the acquisition date. As a result of this acquisition, approx-
imately $1,702,000 in goodwill and $3,887,000 in other intangible assets were recorded in fiscal 2002. As the acqui-
sition occurred subsequent to July 1, 2001, the resulting goodwill was not amortized during fiscal 2002. The other
intangible assets are being amortized over their estimated useful life of ten years.

During fiscal 2000, the Company utilized cash on hand to complete two acquisitions for a total of $9,056,000. Each
of the acquisitions was accounted for as a purchase business combination 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 these acquisitions, approximately $2,869,000 in goodwill and $2,213,000 of other intangible assets were
recorded in fiscal 2000.

NOTE H: PENSIONS AND OTHER POSTRETIREMENT BENEFITS

The Company has pension plans covering substantially all of its domestic 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 postretirement 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 dependents and beneficiaries. These plans are contrib-
utory, 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 reach age 55 and have attained
10 years of credited 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 cost (credit)
Amortization of initial net asset
Recognized net actuarial gain

Defined Benefit Pension Plans

Other Postretirement Benefits

April 30,

(Dollars in thousands)

2002

2001

2002

2001

Change in benefit obligation:

Benefit obligation at beginning of the year

Service cost
Interest cost
Amendments
Actuarial loss
Participant contributions
Benefits paid

$ 74,898
2,414
5,504
197
1,457
—
(3,017)

$67,670
2,133
5,303
30
2,529
—
(2,767)

$ 9,991
506
737
—
887
193
(526)

$ 8,560
424
673
—
522
188
(376)

Benefit obligation at end of the year

$ 81,453

$74,898

$ 11,788

$ 9,991

Change in plan assets:

Fair value of plan assets at beginning of the year

Actual return on plan assets
Company contributions
Participant contributions
Benefits paid

$ 72,685
(2,499)
1,578
—
(3,017)

$74,226
510
716
—
(2,767)

$ —
—
333
193
(526)

$ —

—
188
188
(376)

Fair value of plan assets at end of the year

$ 68,747

$72,685

$ — $ —

Net amount recognized:

Funded status of the plans
Unrecognized net actuarial loss (gain)
Unrecognized prior service cost (credit)
Unrecognized initial asset

$(12,706)
1,370
9,332
(765)

$ (2,213)
(9,208)
10,222
(999)

$(11,788)
(2,433)
(692)
—

$ (9,991)
(3,480)
(753)
—

Net benefit liability recognized

$ (2,769)

$ (2,198)

$(14,913)

$(14,224)

Prepaid benefit cost
Accrued benefit liability
Intangible asset
Minimum pension liability

$ 5,589
(13,996)
4,410
1,228

$ 5,582
(10,239)
2,459
—

$ —
(14,913)
—
—

—
(14,224)
—
—

Net benefit liability recognized

$ (2,769)

$ (2,198)

$(14,913)

$(14,224)

Weighted average assumptions:

Discount rate
Expected return on plan assets
Rate of compensation increase

7.25%
9.00%
4.50%

7.50%
9.00%
4.50%

7.25%
—
—

7.50%
—
—

For fiscal 2003, the assumed health care cost trend rates are 8.5% for all participants. The rate for participants under
age 65 is assumed to decrease to 5% in 2007. The health care cost trend rate assumption has a significant effect on
the amount of the other postretirement benefit obligation and periodic other postretirement benefit cost reported. A
one percentage point annual change in the assumed health care cost trend rate would have the following effect as of
April 30, 2002:

(Dollars in thousands)

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

One Percentage Point

Increase

Decrease

$ 270
$1,999

$ (213)
$(1,597)

The projected benefit obligation and plan assets applicable to pension plans with projected benefit obligations in
excess of plan assets was $36,626,000 and $20,065,000, respectively, at April 30, 2002, and $32,876,000 and
$19,979,000, respectively, at April 30, 2001.

Pension plan assets consist of listed stocks and government obligations, including 336,000 of the Company’s
Common Shares at April 30, 2002 and 2001. The market value of these shares is $11,659,000 at April 30, 2002. The
Company paid dividends of $215,000 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 $958,000, $870,000, and $854,000 in fiscal 2002, 2001,
and 2000, 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 determined in accordance with foreign
actuarial computations and provisions of the labor contracts. The Company is unable to determine its share of either
the accumulated plan benefits or net assets available for benefits under such 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 $1,851,000, $1,719,000, and $1,687,000 in fiscal 2002, 2001, and
2000, respectively.

NOTE I: SAVINGS PLANS

ESOP: The Company sponsors an Employee Stock Ownership Plan and Trust (ESOP) for domestic, nonrepresented
employees. The Company has entered into loan agreements with the Trustee of the ESOP for purchases by the ESOP
of the Company’s Common Shares 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 $538,000, $768,000, and $846,000 in fiscal 2002, 2001, and 2000, 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 $336,000, $362,000, and $363,000 in fiscal 2002, 2001, and 2000, respectively.
The principal payments received from the ESOP in fiscal 2002, 2001, and 2000 were $364,000, $297,000, and
$303,000, respectively.

As permitted by Statement of Position 93-6, Employers’ Accounting for Employee Stock Ownership Plans (SOP 93-6),
the Company will continue to recognize future compensation using the cost basis as all shares currently held by the
ESOP were acquired prior to 1993. At April 30, 2002, the ESOP held 525,048 unallocated shares. All shares held by
the ESOP were considered outstanding 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
fiscal 2002, 2001, and 2000 were $1,445,000, $1,421,000, and $1,193,000, respectively.

NOTE J: STOCK BENEFIT PLANS

The Company provides for equity-based incentives to be awarded to key employees through the 1998 Equity and
Performance Incentive Plan, the Restricted Stock Bonus Plan adopted in 1979, and the 1987 Stock Option Plan, and
to nonemployee directors through the Nonemployee Director Stock Option Plan adopted in fiscal 2002.

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, 2002, there are 797,522 Common Shares available for future issuance under this plan. Of this total
amount available for issuance, the amount of restricted stock available for issuance is limited to 436,700 Common
Shares. Restricted stock issued under this plan is subject to a risk of forfeiture for at least three years in the event of
termination of employment or failure to meet performance criteria, if any. All restricted shares issued to date under
the plan are subject to a four-year forfeiture period. 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 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 transferability. Shares awarded
are issued as of the date of the award and a deferred compensation charge is recorded at the market value of the
shares on the date of the award. The deferred compensation charge is recognized as expense over the period during
which restrictions are in effect. There are no Common Shares available for future issuance under this plan. In fiscal
2002 and 2000, 49,200 and 82,000 Common Shares were awarded under this plan, respectively. No awards were
granted in fiscal 2001.

1987 Stock Option Plan: Options granted under this plan become exercisable at the rate of one-third per year, begin-
ning one year after the date of grant, and the option price is equal to the market value of the shares on the date of
the grant. There are 554,827 Common Shares available for future grant under this plan.

Nonemployee Director Stock Option Plan: This plan provides for the issuance of 1,500 stock options to nonemployee
directors annually, on September 1 of each year. Options granted under this plan become exercisable six months after
the date of grant, and the option price is equal to the market value of the shares on the date of the grant. There are
100,000 Common Shares available for future grant under this plan. No grants were made under this plan in fiscal
2002 due to the pending Jif and Crisco transaction.

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 2002, 2001, and 2000 had been determined based on the fair market value method of SFAS 123, the Company’s
pro forma net income and earnings per share would have been:

(Dollars in thousands, except per share data)

2002

2001

2000

Year Ended April 30,

Net income

As reported
Pro forma

Net income per Common Share

As reported
Pro forma

Net income per Common Share – assuming dilution

As reported
Pro forma

$30,851
29,790

$27,206
26,018

$26,273
25,229

$ 1.26
1.22

$ 1.07
1.02

$ 0.92
0.88

$ 1.24
1.20

$ 1.06
1.01

$ 0.91
0.88

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:

Average expected term (years)
Risk-free interest rate
Dividend yield
Volatility

Fair value of options granted

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

Outstanding at May 1, 1999

Granted
Exercised
Forfeited

Outstanding at April 30, 2000

Granted
Exercised
Forfeited

Outstanding at April 30, 2001

Granted
Exercised
Forfeited

Outstanding at April 30, 2002

Exercisable at April 30, 2000
Exercisable at April 30, 2001
Exercisable at April 30, 2002

Year Ended April 30,

2001

2000

5
5.75%
2.60%
27.00%

5
6.20%
2.50%
26.00%

$6.13

$5.22

Options

2,525,702
409,000
(245,734)
(47,000)

2,641,968
411,000
(562,261)
(178,324)

2,312,383
—
(614,832)
(31,135)

1,666,416

1,918,301
1,558,282
1,298,028

Weighted-
Average
Exercise
Price

$21.41
18.22
18.50
18.78

$21.24
23.63
18.45
23.93

$22.13
—
23.59
29.90

$21.45

$21.66
$22.41
$21.28

The following table summarizes the range of exercise prices and weighted-average exercise prices for options out-
standing and exercisable at April 30, 2002, under the Company’s stock benefit plans:

Range of
Exercise Prices

$15.94 – $23.00
$23.01 – $31.50

Outstanding

866,762
799,654

Weighted-
Average
Exercise Price

$18.90
$24.21

Weighted-
Average
Remaining
Contractual
Life (years)

5.9
6.0

Exercisable

758,031
539,997

Weighted-
Average
Exercise Price

$18.99
$24.49

The following table summarizes the Company’s stock benefit plans in two categories — plans that have been approved
by shareholders, and plans that have not:

Plan Category

Stock benefit plans approved by shareholders
Stock benefit plans not approved by shareholders

Total stock benefit plans

Number of
Common Shares to be
issued upon exercise
of outstanding options

Weighted-average
exercise price of
outstanding options

1,666,416
—

1,666,416

$21.45
—

$21.45

Number of
Common Shares
available for future
issuance under equity
compensation plans

1,452,349
—

1,452,349

NOTE K: LONG-TERM DEBT AND FINANCING ARRANGEMENTS

Long-term debt consists of the following:

(Dollars in thousands)

6.77% Senior Notes due June 1, 2009
7.70% Series A Senior Notes due September 1, 2005
7.87% Series B Senior Notes due September 1, 2007
7.94% Series C Senior Notes due September 1, 2010

Total long-term debt

April 30,

2002

2001

$ 75,000
17,000
33,000
10,000

$135,000

The notes are unsecured and interest is paid semiannually. Among other restrictions, the note purchase agreements
contain certain covenants relating to liens, consolidated net worth, and sale of assets as defined in the agreements.
The Company is in compliance with all covenants.

During fiscal 2002, the Company entered into interest rate swap agreements in order to manage interest rate expo-
sure and minimize financing costs. Effectively, the Company converted $17 million of fixed-rate debt (7.70% notes
due in September 2005) and $33 million of fixed-rate debt (7.87% notes due in September 2007) to variable-rate debt
with an effective interest rate of 4.88% at April 30, 2002. The interest rate swaps are considered fair value hedges
and are 100% effective. As a result, the mark-to-market value of both the fair value hedging instruments and the
underlying debt obligations are recorded as equal and offsetting gains or losses in other expense. The interest rate
swaps had a fair value of $508,000 at April 30, 2002, with the corresponding adjustment to long-term debt included

in other noncurrent liabilities. The fair value of interest rate swap agreements, obtained from the respective financial
institutions, is based on current rates of interest and is computed as the net present value of the remaining exchange
obligations under the terms of the contract.

Interest paid totaled $9,800,000, $8,328,000, and $2,293,000 in fiscal 2002, 2001, and 2000, respectively.

Financing arrangements: The Company has uncommitted lines of credit providing up to $90,000,000 for short-term
borrowings. No amounts were outstanding at April 30, 2002. The interest rate to be charged on any outstanding bal-
ance is based on prevailing market rates.

NOTE L: 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
Software and other deferred expenses
Change in inventory accounting method
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 assets
Valuation allowance for deferred tax assets

Total deferred tax assets less allowance

Net deferred tax (liability) asset

April 30,

2002

2001

$10,150
4,898
1,769
1,782

$12,639
3,242
—
658

18,599

16,539

6,136
5,091
3,337
4,039

6,034
4,679
3,396
4,003

18,603
(1,560)

18,112
(1,522)

17,043

16,590

$ (1,556)

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

Domestic income and foreign withholding taxes have not been recorded on undistributed earnings of foreign sub-
sidiaries since these amounts are considered to be permanently reinvested. Any additional taxes payable on the earn-
ings of foreign subsidiaries, if remitted, would be partially offset by domestic 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 follow:

(Dollars in thousands)

Current:
Federal
Foreign
State and local

Deferred

Total income tax expense

Year Ended April 30,

2002

2001

2000

$44,668
5,530

$40,809
3,683

$36,584
4,815

$50,198

$44,492

$41,399

Year Ended April 30,

2002

2001

2000

$13,447
2,449
1,906
1,545

$10,681
1,938
1,635
2,040

$15,000
2,048
1,950
(3,872)

$19,347

$16,294

$15,126

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

Year Ended April 30,

2002

2001

2000

35.0%

2.5
(1.9)
2.9

2.1
(0.8)
0.3

3.1
(1.6)
—

38.5%

36.6%

36.5%

$15,736

$17,792

$19,761

NOTE M: COMMON SHARES

Reclassification of Common Shares: In August 2000, the Company combined its Class A and Class B Common Shares
into a single class of common shares with terms similar to the former Class A Common Shares. In conjunction with
this combination, on August 28, 2000, the Company repurchased 4,272,524 Common Shares at $18.50 per share.
The Company incurred approximately $1,363,000 of cost related to the combination and repurchase of Common
Shares. Such costs were recorded as a reduction of shareholders’ equity.

Voting: The Company’s Amended Articles of Incorporation provide that holders of the Company’s Common Shares
generally will be entitled to cast one vote per share on matters submitted to a vote of the shareholders. There are cer-
tain matters specified in the Amended Articles (including any matters that relate to or would result in the dissolution
or liquidation of the Company; the amendment of the articles of incorporation or regulations of the Company other
than any amendment that increases the number of votes to which holders of new Common Shares are entitled or
expand the matters to which time phase voting applies; any proposal or other action to be taken by shareholders relat-
ing to the Company’s shareholder rights plan or any successor plan; any matter relating to any benefit, stock option,
compensation, or other similar plan; any matter that relates to or may result in a change in control of the Company
including any merger, consolidation, majority share acquisition, control share acquisition, sale or other disposition of
all, or substantially all, of the Company’s assets; or any matter relating to the issuance, redemption, or repurchase of
shares of the Company or any of its subsidiaries), however, with respect to which parties acquiring the Company’s
Common Shares will be entitled to cast one vote per share until they have held their shares for four years, after which
time they will be entitled to cast ten votes per share on those specified matters.

Shareholders’ Rights Plan: Pursuant to a shareholders’ rights plan established during fiscal 1999, each of the Company’s
Common Shares outstanding carries a share purchase right issued as a result of a dividend distribution declared by the
Company’s Board of Directors in April 1999 and distributed to shareholders 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 exercis-
able. In the absence of further action by the directors, the rights generally will become exercisable and allow the
holder to acquire the Company’s Common Shares at a discounted price if a person or group acquires 10% or more
of the 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 share-
holder 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 Common Share for each right, in each case subject to adjustment
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.

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 and
Chief Risk Officer
FirstEnergy Corp.
Akron, Ohio

Fred A. Duncan
Vice President – Special Markets
The J. M. Smucker Company

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

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

Timothy P. Smucker
Chairman and
Co-Chief Executive Officer
The J. M. Smucker Company

Richard K. Smucker
President and
Co-Chief Executive Officer
The J. M. Smucker Company

William H. Steinbrink
Partner
Jones, Day, Reavis & Pogue
Cleveland, Ohio

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

OFFICERS & GENERAL
MANAGERS

Timothy P. Smucker
Chairman and
Co-Chief Executive Officer

Richard K. Smucker
President and
Co-Chief Executive Officer

Mark R. Belgya
Treasurer

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

Barry C. Dunaway
Vice President – Corporate
Development

Paul Smucker Wagstaff
Vice President and General
Manager, Foodservice Market

John W. Denman
Assistant Corporate Controller

Debra A. Marthey
Assistant Treasurer

Gary A. Jeffcott
General Manager,
Industrial Market

Julia L. Sabin
General Manager,
Beverage Market

PROPERTIES

Fred A. Duncan
Vice President – Special Markets

Corporate Offices:
Orrville, Ohio

Steven J. Ellcessor
Vice President – Finance and
Administration, Secretary, and
Chief Financial Officer

Robert E. Ellis
Vice President – Human Resources

M. Ann Harlan
General Counsel and
Assistant Secretary

Donald D. Hurrle, Sr.
Vice President – Sales,
Grocery Market

Richard G. Jirsa
Vice President – Information
Services and Corporate Controller

John D. Milliken
Vice President – Logistics
and Western Operations

Steven T. Oakland
Vice President and General
Manager, Consumer Oils

Mark T. Smucker
Vice President and General
Manager, International Market

Richard F. Troyak
Vice President – Operations

Domestic Manufacturing
Locations:
Orrville, Ohio
Cincinnati, Ohio
Lexington, Kentucky
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

SHAREHOLDER INFORMATION

The J. M. Smucker Company

Company’s Principal Place of Business

Transfer Agent and Registrar for

Shareholder Inquiries

The J. M. Smucker Company

the Company’s Shares

Inquiries regarding dividend payments,

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 13, 2002, in the

Fisher Auditorium at the

Ohio Agricultural Research

and Development Center

1680 Madison Avenue

Wooster, Ohio

Form 10-K

A copy of the Company’s Form 10-K is

The transfer agent and registrar for the

loss or nonreceipt of a dividend check,

Company’s Common Shares is:

address changes, stock transfers (including

Computershare Investor Services, LLC

2 North LaSalle Street

P.O. Box A3504

name changes, gifts, and inheritances),

lost share certificates, and Form 1099

information should be addressed to:

Chicago, Illinois 60602-3504

Computershare Investor Services, LLC

(800) 456-1169

The transfer agent has primary respon-

sibility for administering the Common

Shares held by registered shareholders

2 North LaSalle Street

P.O. Box A3504

Chicago, Illinois 60602-3504

(800) 456-1169

in the direct registration system, share

All questions, inquiries, remittances, and

transfers, payment of dividends whether

other correspondences related to direct

by check or reinvestment, and issuance

stock purchases and dividend reinvestment

of Form 1099 information.

services should be addressed to:

available on the Company’s Web site at

Dividend Reinvestment/Direct Stock

www.smuckers.com. It is also available

Purchase Plan

without cost to shareholders who

Computershare Trust Company, Inc.

request it by writing to:

The J. M. Smucker Company

sponsors and administers a direct stock

purchase plan that includes dividend

Computershare Investor Services, LLC

2 North LaSalle Street

P.O. Box A3309

Chicago, Illinois 60602-3309

(800) 456-1169

reinvestment, Computershare BYDSSM,

All other inquiries may be directed to:

Strawberry Lane

Orrville, Ohio 44667

Attention: Secretary

Stock Listing

for investors in Common Shares of

The J. M. Smucker Company. The plan

brochure can be downloaded from

www.computershare.com.

The J. M. Smucker Company’s Common

Shares are listed on the New York Stock

Dividends

Exchange — ticker symbol SJM.

The Company’s Board of Directors

normally 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 two weeks before the payment

date. The Company’s dividend disburse-

ment agent is Computershare Investor

Services, LLC.

The J. M. Smucker Company

Shareholder Relations

Strawberry Lane

Orrville, Ohio 44667

(330) 684-3838

For Additional Information

To learn more about The J. M. Smucker

Company, visit us at www.smuckers.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 17 in the Management’s
Discussion and Analysis section.

Twix and Milky Way are registered trademarks of Mars, Inc.

All other brand references in italics throughout this annual report represent trademarks of The J. M. Smucker Company.

Now All the Goodness of Smucker’s® ln 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 online at www.smuckers.com.

333 Wadsworth Road
(Rt. 57, one-quarter 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