The J. M. Smucker Company

2014 Annual Report

OUR PURPOSE

Helping to bring families together to  
share memorable meals and moments.

We have always defined success by more than financial performance.  
We believe how we do things is as important as what we do. Our Purpose aims to  
further articulate why we are in business and the impact we aspire to have on society.

Being together with the ones we love isn’t just a pleasant way to spend time — it’s vital 
to a healthy, happy, fulfilling life. In fact, the more time family and friends spend with 
each other, the richer their lives become. We believe that nothing brings people closer 
together than the meals and memories they share. And the stronger families are 
today, the stronger our society will be tomorrow.  
Quite simply, life tastes better together.

WHY WE ARE, WHO WE ARE...
OUR CULTURE

A culture of dotting the i’s and crossing the t’s…

Of doing the right things and doing things right…

A culture of growth – individual and as a company.

It’s who we are. It’s because of who we are.

It’s a result of living our Basic Beliefs…

Our Commitment to Each Other. To our consumers 
   and to our customers.

As we look to the future of unlimited possibilities, 
   we recognize the principles that are  
   instrumental to our success…

A culture deeply rooted in our Basic Beliefs…

Guideposts for decisions at every level…

Why we are who we are.

A culture that encourages commitment to each other…

Clear communication and collaboration…

Vision…A culture of appreciation.

A family-sense of sharing in a job well done…

Where every person makes a difference.

U.S. Retail  
Coffee 

6

U.S. Retail 
Consumer  
Foods
10

CONTENTS

International, 
Foodservice & 
Natural Foods 
14

Sustainability  
at Smucker 

Financial  
Review 

18

19

2014 Annual Report  2

 
  
DEAR SHAREHOLDERS AND FRIENDS,

Strong and healthy brands, leading market positions, innovative new 
products, and a focused strategy executed by talented employees served 
The J. M. Smucker Company well during fiscal 2014, despite the 
challenging economic environment. Most importantly, and as we have 
done for the past 117 years, we remained focused on Our Purpose of 
helping to bring families together to share memorable meals and moments, 
and it is through this focus that we ensure the strength of our brands 
and the continued growth of our business. 

Our strong fundamentals resulted in achieving record non-GAAP 
earnings per share and returning more than $730 million in cash to 
shareholders through dividends and share repurchases. Driving this 
earnings growth was the continued strong performance of our U.S. 
Retail Coffee business, including our roast and ground products and 
the premium Dunkin’ Donuts® brand. Among the challenges we faced 
were a competitive pricing environment, as well as our voluntary exit 
from certain foodservice businesses. These factors, along with pricing 
actions taken to pass through lower commodity costs in key categories, 
resulted in net sales declining 5 percent to $5.6 billion.

Nevertheless, fiscal 2014 was filled with solid accomplishments primarily 
focused on several growth areas — expanding our presence in the 
coffee category, accelerating the growth of our Smucker’s® and Jif® 
brands, and building our Smucker’s® Uncrustables® frozen handheld 
business. We also continue to reap the benefits of one of the most 
innovative periods in our history — launching more than 250 new 
products in the past three years that accounted for over $425 million, 
or approximately 8 percent, of net sales in fiscal 2014. 

Among the highlights of our fiscal year:

•  Non-GAAP earnings per share rose 5 percent to $5.64.
•  Cash generated from operations was steady at $856 million.
•  We repurchased nearly 5 percent of shares outstanding, utilizing 

approximately $500 million in cash.

•  Capital expenditures totaled approximately $280 million,  

a record level.

•  The annual dividend paid per share increased approximately  
11 percent, representing 12 consecutive years of dividend 
growth and 55 consecutive years of dividend payouts.

Overall, we are pleased to have returned $2.6 billion to our shareholders 
in the past five years through dividends and share repurchases. 

PLEASING OUR CONSUMERS
The ability to generate shareholder returns and to fulfill Our Purpose is 
enhanced by our efforts to offer consumers a broad portfolio of products 
to meet their diverse and ever-changing needs. We continue to expand 
our consumer reach through product innovation and effective marketing 
support. In fiscal 2014 alone, we launched more than 100 new products 
that were developed based on consumer needs identified through 
insightful research and our own strategic architecture, which ensures 

we create value for our consumers by offering products that “Make You 
Smile,” are “Easy for You,” and are “Good and Good for All of Us.” As an 
example, Dunkin’ Donuts® Bakery Series® coffee “Makes You Smile” by 
bringing favorite bake shop flavors to a pot of home-brewed coffee. 
Looking forward, our innovation pipeline remains a robust one, with 
more than 125 product introductions planned in fiscal 2015.

We are continually focused on engaging with our consumers to 
ensure we understand their product preferences and that we are 
meeting their needs for product information. We maintain a direct 
dialogue with consumers through our Consumer Communications 
Center, as well as interaction through more than 45 social media 
properties including Facebook®, Twitter®, Pinterest®, Instagram®, and 
YouTube®. In addition, we strive to ensure our in-store communication 
with consumers is insightful and informative. This past year, for example, 
we completed our commitment to incorporate the “Facts Up Front™” 
labeling system across all products that require a nutrition panel. This 
initiative summarizes important nutritional information in a simple 
and easy-to-read format on the front of food and beverage packages. 

Our marketing efforts in fiscal 2014 were highlighted by our sponsorship 
of the United States Olympic and Paralympic Teams. The Olympic 
Games bring families and friends together to celebrate the special 
moments of U.S. athletes and the Games. Four leading brands — 
Smucker’s, Folgers®, Jif, and Smucker’s Uncrustables — were involved 
with our sponsorship, which broadened engagement across multiple 
generations of consumers. Our activities, which garnered more than 
1 billion media impressions, included television advertising, product 
packaging, digital marketing, social media, retailer activation, and 
employee engagement activities. 

This Olympic campaign is representative of our integrated approach to 
marketing that takes a holistic view of our television, radio, print, visual, 
digital, and social media footprint in order to maximize consumer 
impact. Our multiyear involvement with the U.S. Olympic and 
Paralympic Teams will continue through the 2016 Summer Olympics 
in Rio de Janeiro, Brazil. 

ACQUISITIONS ENHANCE GROWTH
Strategic acquisitions remain a key part of our growth strategy. We 
target leading brands and categories that will enhance our “center of 
the store” presence in North America or help us expand in China. We 
categorize acquisitions in three ways: transformational acquisitions are 
larger in scale and include entry into new markets or categories; bolt 
on acquisitions leverage existing infrastructure and increase our 
presence within a category; and enabling acquisitions, though they 
may be smaller in size, capitalize on our resources and introduce new 
capabilities to the Company. As we evaluate possible transactions, we 
are mindful that the acquisition landscape has been changing and 
has become more competitive. Accordingly, we remain focused on 
finding the right balance between opportunity and investment.

This past year we completed the enabling acquisition of Enray, Inc. 
Through its truRoots® brand, Enray is a leader in organic, gluten-free, 
ancient grain products — an on-trend, high-growth product platform — 
which contributed $40 million in net sales following the August 
2013 acquisition. Adding truRoots to a brand family that includes 
R.W. Knudsen Family® and Santa Cruz Organic® brings additional 
scale to our natural foods portfolio.

SUPPLY CHAIN OPTIMIZATION
Ongoing investments that enhance supply chain capabilities and reduce 
costs long term are other key drivers of profitable growth. Our new 
manufacturing facility in Orrville, Ohio, not only provides us with 
state-of-the-art efficiency, but also allows us to leverage our innovation 
capabilities. Likewise, we are converting our facility in Memphis, 
Tennessee, to support expanded peanut butter production, in line 
with our goal of growing the Jif brand. We have also made capital  
investments in our Scottsville, Kentucky, facility to support growth  
of the Smucker’s Uncrustables frozen handheld business, and at our  
Toledo, Ohio, facility to support capacity for our Pillsbury® ready-to-
spread frostings. 

ENJOYING LONG-TERM GROWTH PROSPECTS
History has shown that we are adept at managing near-term challenges 
while focusing on those strategies necessary to ensure long-term success. 
This is one reason we are confident that Smucker will continue its 
profitable growth in fiscal 2015 and beyond. Our confidence also 
stems from our commitment to Our Purpose and through decision- 
making guided by our Basic Beliefs of Quality, People, Ethics, Growth, 
and Independence. 

We are well positioned to continue fulfilling Our Purpose, thanks to a 
clear strategy, excellent execution of that strategy, a robust innovation 
pipeline, an integrated marketing approach, key partnerships, and 
supply chain investments, all of which are supported by a strong  
balance sheet. These strengths will allow us to continue to return 
value to our shareholders. As we realize this potential, Smucker will 
remain focused on our strategy of owning and marketing North 
American food brands that hold the number one market position in 
their respective categories, while maintaining the global perspective 
that is essential to compete effectively in today’s marketplace. 

We extend a heartfelt thank you for the hard work and talents of our 
family of nearly 5,000 employees. Their commitment is essential to our 
success, as is the loyalty we have earned with all of our constituents. 

We also thank you for your continued faith in and support of  
The J. M. Smucker Company. 

Sincerely,

Tim Smucker 

Richard Smucker

June 23, 2014

FINANCIAL HIGHLIGHTS

(Dollars in millions, except per share data) 

Net sales 
Net income and net income per common share:
  Net income 
  Net income per common share – assuming dilution 
Income and income per common share excluding special project costs:(A)
  Income 
  Income per common share – assuming dilution 
Common shares outstanding at year end 
Number of employees 

Year Ended April 30,

2014 
$ 5,610.6 

$  565.2 
5.42 
$ 

2013

$ 5,897.7

$  544.2
5.00
$ 

$  588.5 
5.64 
$ 
101,697,400 
  4,775 

$  584.8
5.37
$ 
106,486,935
  4,875

(A)  Refer to “Non-GAAP Measures” located on pages 29-30 in the “Management’s Discussion and Analysis” section for a reconciliation to the comparable GAAP financial measure.

2  The J. M. Smucker Company    

2014 Annual Report  3

 
 
 
OUR BRANDS

Knott’s Buff 

Black 

PMS 871

For more than 115 years, The J. M. Smucker Company has been committed to offering 
consumers quality products that help bring families together to share memorable 
meals and moments.

4  The J. M. Smucker Company

2014 Annual Report  5

SEGMENT AS A PERCENTAGE OF NET SALES

US Retail Coffee–
% of Net Sales

38%
U.S. Retail Coffee

OUR BRANDS

U.S. Retail
Coffee

Smucker is the market leader in the $8.4 billion U.S. 
at-home retail coffee category, with a 29 percent market 
share. We compete across all key coffee segments with 
a diverse portfolio of brands, product types, packaging, 
and price points. This portfolio allows us to meet the 
evolving needs of coffee consumers and capitalize on 
growth opportunities.

6  The J. M. Smucker Company    

2014 Annual Report  7

U.S. RETAIL COFFEE

The foundation of our coffee business is roast and ground, which 
remains the largest portion of our U.S. Retail Coffee sales and gained 
market share in fiscal 2014.

BUILDING ON MARKET LEADERSHIP

Our U.S. Retail Coffee segment enjoyed solid performance 
in fiscal 2014 with segment profit growing 6 percent to 
$642 million. Net sales decreased 6 percent to $2.2 billion, 
as higher volume was offset by the pass-through of lower 
green coffee costs to our customers and consumers.

The foundation of our coffee business is roast and ground, 
which remains the largest portion of our U.S. Retail Coffee 
sales and gained market share in fiscal 2014. Featuring our 
iconic Folgers brand, roast and ground volume has remained 
healthy, even as at-home coffee options continue to expand. 
We intend to continue this momentum in roast and ground 
by building on the strong brand identification of Folgers 
and offering new varieties and formats that appeal to 
consumer tastes. 

In addition to our traditional canister coffees, we have had 
considerable success with our Folgers Instant Single Serve 
Packets, which provide consumers with an instant coffee 
option at a better price point than many competing brands. 

Our premium coffee business is also growing and includes 
the strong Dunkin’ Donuts and Folgers Gourmet Selections® 
brands, in addition to our Millstone® offerings. There are 
currently more than 20 Dunkin’ Donuts offerings, which 
include five varieties of Dunkin’ Donuts Bakery Series 
coffee launched in fiscal 2014. The Dunkin’ Donuts brand 
also had a successful seasonal offering during the year. 
Our Folgers Gourmet Selections and Millstone brands offer 
consumers multiple coffee varieties at different price points. 

Across the premium business, we will continue to build 
our brand strength while introducing new varieties and 
products into the marketplace. 

The overall K-Cup® pack segment has seen significant 
growth in recent years. Smucker products continue to 
support Keurig Green Mountain Inc.’s (Keurig) coffee 
brewers and cover multiple brands, including Folgers 
Gourmet Selections and Millstone. Further building on 
our strong partnership with Keurig, we are also currently 
developing products for the new Keurig Bolt and Keurig 
2.0 next-generation brewing platforms, which will debut 
later this year.

The popularity of K-Cup® packs continues to bring new 
consumers into the coffee category, but the recent influx  
of non-branded and unlicensed branded coffee choices 
has made it a more competitive category. While we have 
seen demand increase for Folgers Gourmet Selections K-Cup® 
packs, for example, smaller brands such as Millstone have 
found it more difficult to compete in this crowded market. 

Our plans for continued growth in the single-serve market 
include expanding our Keurig partnership in new areas 
including extending K-Cup® pack distribution in the 
e-commerce, club, and dollar store channels. We also plan 
to launch three new K-Cup® pack products in fiscal 2015, 
two of which will be Café Bustelo® items. In addition, we will 
convert a few of our existing K-Cup® pack varieties to the 
iconic Folgers brand name.

8  The J. M. Smucker Company    

2014 Annual Report  9

SEGMENT AS A PERCENTAGE OF NET SALES

US Consumer Foods
% of Net Sales

39%
U.S. Retail 
Consumer Foods

OUR BRANDS

U.S. Retail
Consumer Foods

Our U.S. Retail Consumer Foods segment competes in  
a number of large and consumer-relevant categories, 
including peanut butter, fruit spreads, baking mixes 
and frostings, oils, and sweetened condensed milk. 
These are staple products for consumers and enjoy 
broad consumer reach. Peanut butter, for example,  
is a simple and affordable source of plant-based protein.

10  The J. M. Smucker Company    

2014 Annual Report  11

U.S. RETAIL CONSUMER FOODS

GROWING MARKET-LEADING BRANDS

Led by the Jif  brand, we hold the number one position in the 
over $1.9 billion peanut butter category with a 47 percent 
dollar share of the market — more than double that of our 
nearest branded competitor. In the over $900 million fruit 
spreads category, our Smucker’s brand holds the leading 
dollar share — three times as much as our nearest branded 
competitor. In fiscal 2014, the U.S. Retail Consumer Foods 
segment recorded $2.2 billion in net sales and $397 million 
in segment profit, both of which decreased from the previous 
year. However, our two largest brands, Jif and Smucker’s, 
grew volume 2 percent, which was offset by lower net 
price realization. 

The strength of the Jif brand has been key to our continued 
growth. We are focused on continuing to grow the Jif brand 
even further, introducing new products and packaging 
options tailored to the needs of today’s consumer. Our new 
Jif Whips — a lighter and fluffier peanut butter that is ideal 
for dipping — has demonstrated strong sales. This perfor-
mance is on top of other recent innovations that include our 
Jif To Go® product, convenient single-serve cups for busy 
consumers, and the continued success of our Jif Natural 
peanut butter. We plan to further expand our offerings with 
Jif To Go Dippers — a convenient snacking option that pairs 
Jif To Go with pretzels.

The centerpiece of our fruit spreads business is our namesake 
Smucker’s brand, which we are focused on growing by 
expanding our consumer reach through brand-building 
efforts and offering a diverse product portfolio. Early in 
the fiscal year, we successfully launched Smucker’s Natural 
fruit spreads, a product made with all-natural ingredients 
and sweetened with sugar. As part of our efforts to extend 
the Smucker’s brand into new product categories, we are 
launching Smucker’s® Fruit-Fulls™, a new line of all-natural 
pure blended fruit pouches. 

Smucker’s Uncrustables sandwiches have experienced 
double-digit volume growth for each quarter for the past two 
fiscal years within the U.S. Retail Consumer Foods segment. 
Smucker’s Uncrustables sandwiches provide a great tasting 
and convenient option that has proven ideal for families. On 
average, nearly 1 million Smucker’s Uncrustables sandwiches 
are produced and sold daily. To support the future growth 
of this business, we recently invested $80 million to expand 
our Scottsville, Kentucky, facility. 

Also in fiscal 2014, we broadened our product offerings in 
the nearly $500 million and growing specialty nut butter 
category with the new Jif Salted Caramel Flavored Hazelnut 
spread, as well as a line of Jif Cashew and Almond butters. 
In addition, we relaunched our original Jif  Hazelnut spreads 
with new packaging. We remain optimistic about the 
continued growth opportunities in this category.

Several other brands in the U.S. Retail Consumer Foods 
segment continue to provide consumers with diverse and 
innovative product options in the baking aisle. Our Pillsbury 
baking brand launched more than 20 new items in fiscal 
2014, including Funfetti® bold-colored cake mixes and new 
seasonal offerings such as Caramel Apple and Perfectly 
Pumpkin. These products help extend the baking season 
beyond the traditional holiday months. In addition, in fiscal 
2014 our Crisco® brand enjoyed significant volume growth in 
part due to the strong performance during the important 
holiday baking season. Product innovation will continue to 
be an important growth driver for these brands.

The strength of the Jif brand has been key to our continued growth. 
We are focused on continuing to grow the Jif brand even further, 
introducing new products and packaging options tailored  
to the needs of today’s consumer.

12  The J. M. Smucker Company    

2014 Annual Report  13

SEGMENT AS A PERCENTAGE OF NET SALES

International Foodservice and Natural Foods –
% of Net Sales

23%
International, Foodservice, 
and Natural Foods

OUR BRANDS

International,  
Foodservice, and
Natural Foods

Our International, Foodservice, and Natural Foods 
segment encompasses sales outside the U.S. retail 
markets. Our International operations consist  
primarily of our Canadian business, operations  
in Mexico, and our minority investment in China. 
The fiscal 2014 addition of the truRoots brand  
bolsters our product offerings in the natural foods 
category. We also continue to be a leading supplier  
to North American foodservice operators.

14  The J. M. Smucker Company    

2014 Annual Report  15

INTERNATIONAL, FOODSERVICE, AND NATURAL FOODS

POSITIONED FOR FUTURE GROWTH 

The International, Foodservice, and Natural Foods segment 
experienced several challenges in fiscal 2014 that included 
increased trade spending in our Foodservice coffee business, 
currency headwinds, and several planned business rational-
izations. As a result, segment net sales decreased 7 percent 
to $1.3 billion, while segment profit decreased 16 percent 
to $167 million. 

Our International operations are primarily centered in 
Canada, while our presence in Mexico and minority interest 
in Seamild, a privately owned manufacturer of oats products 
in China, are creating additional opportunities in those 
markets. Canada had a strong fiscal 2014, achieved despite 
less-than-favorable exchange rates, with volume and market 
share gains in most categories. Continued product innova-
tion and a focus on marketing initiatives in key categories, 
such as baking and coffee, will provide opportunities for 
future growth. We take a holistic approach with both of our 
Canadian baking and coffee businesses aligning strategy, 
marketing, trade, and merchandising activities with customers 
to generate greater efficiencies and drive category growth. 

Our Foodservice business has long-term strategic value. 
In fiscal 2014, we completed the planned exits of portions 
of the hot beverage business and the commodity peanut 
butter program for schools. These were strategic, long-term 
decisions that impacted our results this year but will lead 
to more focused growth moving forward. In addition, we 
plan to grow the Foodservice business with innovative 
beverage-dispensing solutions, as well as expanding our 
tabletop presence through our licensing and distribution 
agreement with Cumberland Packing Corp. — makers of 
Sweet’N Low® and Sugar In The Raw® products, among others. 

In the Natural Foods business, our fiscal 2014 acquisition 
of Enray, Inc., and its truRoots brand offers us a new range 
of portfolio offerings: ancient grain products that are  
gluten-free, non-GMO, and certified organic. This type 
of enabling acquisition brings Smucker a new variety of 
on-trend products that enhance our leadership and growth 
in the organic and natural foods area. The acquisition has 
also given us additional scale within the natural foods 
category, allowing us to create organizational efficiencies 
that will ensure we continue to meet the needs of our 
customers and consumers.

The enabling acquisition of Enray, Inc. adds a new variety  
of on-trend products to enhance our leadership and  
growth in the organic and natural foods area.

16  The J. M. Smucker Company    

2014 Annual Report  17

Sustainability at Smucker 

MEASURING OUR IMPACT

Responsibility and citizenship have defined Smucker since our founding. Through fiscal 2014, 
we have achieved ongoing progress on our Economic, Environmental, and Social sustainability 
goals. Among other areas, our work last year showed improvement in environmental steward-
ship and on our green coffee and palm oil strategies. In fiscal 2014, we updated our sustainability 
agenda, looking for ways to continue to work with our suppliers and partners to provide 
increased transparency and accountability as we work toward our long-term goals. Read about 
these accomplishments and more in our 2014 Corporate Responsibility Report, available in 
the Corporate Responsibility section of our website at jmsmucker.com.

FRUITY WALKABOUT CONES

MEDITERRANEAN QUINOA SALAD

Create a better tomorrow by focusing on preserving our culture,  
ensuring our long-term Economic viability, limiting our  
Environmental impact, and being Socially responsible.

QUICK ORANGE BEEF STIR-FRY

ARUGULA SALAD WITH 
LEMON-GARLIC DRESSING

WASTE DIVERTED
FROM LANDFILL
Year ended Dec. 31,

WATER INTENSITY
(gallons per EU*)
Year ended Dec. 31,

EMISSIONS INTENSITY
(tonnes CO2e/1,000 EU*)
Year ended Dec. 31,

79%
2009

73%
2010

76%
2011

85%
2012

87%
2013

Complete information from all  
facilities is not currently available. 
Waste surveys will complete this  
data in 2014.

4.59
2009

4.61
2010

4.46
2011

4.42
2012

3.58
2013

* Equivalent unit (EU) is an internal 

measure of volume based  
on tonnage.

1.27
2009

1.28
2010

1.21
2011

1.25
2012

1.26
2013

* Equivalent unit (EU) is an internal 

measure of volume based  
on tonnage.

LEMON BLUEBERRY TARTLETS

TOMATO TOWERS WITH 
MOZZARELLA & KALE PESTO

18  The J. M. Smucker Company

T h e  J. M. S mu cke r C o mp any  2 012 A nnu al Rep o r t  A

2014 Annual Report  A

MEDITERRANEAN QUINOA SALAD

PREP TIME: 10 MIN 

  MAKES: 4 SERVINGS

FRUITY WALKABOUT CONES

PREP TIME: 10 MIN 

  MAKES: 1 SERVING

•  1 cup truRoots® Organic Quinoa
•  2 cups water
•  1 cup canned chickpeas or garbanzo 

beans, rinsed and drained

•  1/2 cup finely diced red bell pepper
•  1/2 cup diced green olives

•  1/2 cup crumbled feta cheese
•  1/4 cup chopped parsley
•  1/4 cup extra virgin olive oil
•  2 tablespoons lemon juice
•  Salt and pepper to taste

•  1 large waffle cone
•  1 to 2 tablespoons Jif® Creamy Peanut 

•  1 tablespoon Smucker’s® Seedless 

Strawberry Jam

Butter

•  1 tablespoon vanilla or plain traditional or 

•  1/2 cup chopped mixed fresh fruit (apple, 
banana, blueberries, raspberries, pears, 
strawberries, grapes, kiwi, etc.)

Greek yogurt

DIRECTIONS 

1.  BRING quinoa and water to a boil; simmer on low heat for 20 minutes. Cover and let 
stand 5 minutes. Cool quinoa to room temperature and transfer to a serving bowl.

2.  MIX chickpeas, bell peppers and parsley thoroughly with cooked quinoa.

3.  STIR in lemon juice and extra virgin olive oil.

4.  MIX in olives and cheese, and season with freshly ground pepper and salt.  

Set aside at least 30 minutes before serving.

DIRECTIONS 

1.  COAT inside of waffle cone with peanut butter.

2.  STIR fruit and jam in small bowl to coat. Spoon into cone. Top with yogurt.  

Serve immediately.

©/® The J.  M. Smucker Company

©/® The J.  M. Smucker Company

ARUGULA SALAD WITH LEMON-GARLIC DRESSING

QUICK ORANGE BEEF STIR-FRY

PREP TIME: 15 MIN 

  MAKES: 4 SIDE SALADS / 2 MAIN DISH SERVINGS

PREP TIME: 10 MIN 

  MAKES: 2 SERVINGS

•  2 1/2 tablespoons lemon juice
•  1/2 teaspoon minced garlic
•  1/2 teaspoon salt
•  1/2 teaspoon coarsely ground pepper
•  1/4 cup Crisco® 100% Extra Virgin Olive Oil

•  1 (5 oz.) package baby arugula leaves
•  1 cup garlic-butter croutons
•  1 cup grape tomatoes, halved lengthwise
•  1/2 cup shaved Parmesan cheese

DIRECTIONS 

1.  COMBINE lemon juice, garlic, salt and pepper in small bowl. Whisk in olive oil gradually 

until well blended and slightly thickened.

2.  PLACE arugula, croutons and tomatoes in large bowl. Drizzle with dressing. Toss to coat. 

Sprinkle evenly with cheese. Serve immediately.

•  Crisco® Olive Oil No-Stick Cooking Spray
•  1/2 pound boneless beef sirloin cut into 

thin strips

•  1 (12 oz.) bag frozen lightly seasoned 

Asian vegetable medley thawed

•  2 teaspoons minced garlic

•  1/2 cup Smucker’s® Natural Orange 

Marmalade Fruit Spread

•  1/3 cup water
•  2 tablespoons soy sauce
•  2 cups hot cooked brown rice

DIRECTIONS

1.  COAT large skillet with no-stick cooking spray. Heat skillet over medium-high heat.  
Stir-fry beef 2 to 3 minutes or until no longer pink. Remove from pan with slotted 
spoon. Keep warm.

2.  ADD vegetables and garlic to skillet. Stir-fry over medium-high heat 2 minutes.  

Add marmalade, water and soy sauce. Cook 3 to 4 minutes, stirring occasionally,  
until sauce slightly thickens.

3.  ADD reserved beef. Cook until heated through. Serve immediately over rice.

©/® The J.  M. Smucker Company

©/® The J.  M. Smucker Company

TOMATO TOWERS WITH MOZZARELLA & KALE PESTO

PREP TIME: 55 MIN 

  MAKES: 4 SERVINGS

LEMON BLUEBERRY TARTLETS

PREP TIME: 30 MIN 

  MAKES: 8 TARTLETS

•  1/4 pound Dino (lacinato) kale
•  3 tablespoons grated Parmesan cheese, 

•  1/3 cup R.W. Knudsen Family® Nature’s 

Peak™ Orchard Veggie Blend

plus additional for garnish

•  1/4 cup extra virgin olive oil, plus additional 

•  2 tablespoons walnuts, toasted*
•  1 teaspoon Santa Cruz Organic® Pure 

Lemon Juice

•  1/2 teaspoon minced garlic
•  1/2 teaspoon salt

for garnish

•  4 small ripe tomatoes (about 1 1/4 lbs.), each 
sliced horizontally into 3 equal-sized slices
•  1 cup fresh mozzarella pearls (60 pearls), 

drained

DIRECTIONS

1.  BOIL large pot of salted water. Cut kale away from tough center stems. Coarsely chop 

leaves. Blanch kale 60 to 90 seconds or until brightly colored. Remove to strainer. Run 
under cold water. Cool. Squeeze out excess water. Measure 3/4 cup blanched kale.

2.  SQUEEZE out excess water from kale. Combine kale, cheese, nuts, lemon juice, garlic 
and salt in food processor. Cover and pulse until finely minced. Add veggie blend and 
oil. Pulse several times to combine. If too thick, add additional veggie blend to achieve 
desired consistency.

3.  SPREAD 1 tablespoon pesto in middle of each serving plate. Mix remaining pesto with 
mozzarella in small bowl. Layer pesto mix between tomato slices to create overlapping 
tower. Repeat with remaining tomatoes. Garnish with additional oil and remaining pesto 
and cheese.

4.  *TO TOAST NUTS: Place nuts in dry nonstick skillet. Cook over medium heat, shaking pan 

until nuts are lightly browned. Remove from pan immediately to avoid over-browning.

©/® The J.  M. Smucker Company

• Crisco® Original No-Stick Cooking Spray
•  1/2 cup Crisco® All-Vegetable Shortening
•  4 ounces cream cheese softened
•  1 1/2 cups Pillsbury BEST® All Purpose 

Flour

•  1/4 teaspoon salt
•  1 can Eagle Brand® Sweetened 

Condensed Milk

DIRECTIONS 

•  1 large egg beaten
•  2 tablespoons fresh lemon juice
•  2 teaspoons grated lemon peel divided
•  3/4 cup fresh blueberries
•  Whipped cream
•  Honey

1.  HEAT oven to 425°F. Coat 8 (4 x 3/4-inch) tart pans with no-stick cooking spray.  

Beat shortening and cream cheese in large bowl with electric mixer on medium speed 
until fluffy. Beat in flour and salt until dough forms. Press into bottoms and sides of 
prepared pans. Place tart pans on baking sheet. Bake 5 minutes.

2.  WHISK sweetened condensed milk, egg and lemon juice in medium bowl until smooth. 

Stir in 1 teaspoon lemon peel. Divide evenly into crusts.

3.  REDUCE oven to 375°F. Bake 16 to 18 minutes or until lightly browned. Cool completely. 

Remove from pans. Top with whipped cream and blueberries. Drizzle with honey. 
Sprinkle with remaining lemon peel.

2014 FINANCIAL REVIEW

The J. M. Smucker Company 

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, 2014. The selected financial 
data should be read in conjunction with the “Results of Operations” and “Financial Condition” sections of “Management’s Discussion 
and Analysis” and the consolidated financial statements and notes thereto.

(Dollars in millions, except per share data) 
Statements of Income:
  Net sales 
  Gross profit 
    % of net sales 
  Operating income 
    % of net sales 
  Net income 

Financial Position:
  Cash and cash equivalents 
  Total assets 
  Total debt 
  Shareholders’ equity 

Liquidity:
  Net cash provided by operating activities 
  Capital expenditures 
  Free cash flow (A) 
  Quarterly dividends paid 
  Purchase of treasury shares 
  Earnings before interest, taxes, depreciation,  
    and amortization (A) 

Share Data:
  Weighted-average shares outstanding 
  Weighted-average shares outstanding –  
    assuming dilution 
  Dividends declared per common share 

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

Other Non-GAAP Measures: (A)
  Gross profit excluding special project costs 
    % of net sales 
  Operating income excluding special project costs 
    % of net sales 
  Income and income per common share  
    excluding special project costs:
      Income 
      Income per common share – assuming dilution 

Year Ended April 30,

2014 

2013 

2012 

2011 

2010

$ 5,610.6 
$ 2,031.0 

$ 5,897.7 
$ 2,027.6 

$ 5,525.8 
$ 1,845.2 

$ 4,825.7 
$ 1,798.5 

$ 4,605.3
$ 1,786.7

36.2% 

34.4% 

33.4% 

37.3% 

38.8%

$  919.0 

$  910.4 

$  778.3 

$  784.3 

$  790.9

16.4% 

15.4% 

14.1% 

16.3% 

17.2%

$  565.2 

$  544.2 

$  459.7 

$  479.5 

$  494.1

$  153.5 
  9,072.1 
  2,228.2 
  5,029.6 

$  856.0 
279.5 
  576.5 
  238.0 
  508.5 

$  256.4 
  9,031.8 
  2,017.8 
  5,148.8 

$  855.8 
  206.5 
649.3 
  222.8 
  364.2 

$  229.7 
  9,115.2 
  2,070.5 
  5,163.4 

$  730.9 
  274.2 
  456.7 
  213.7 
  315.8 

$  319.8 
  8,324.6 
  1,304.0 
  5,292.3 

$  391.6 
  180.1 
211.5 
  194.0 
389.1 

$  283.6
  7,974.9
  910.0
  5,326.3

$  713.5
  137.0
  576.5
  166.2
5.6

  1,185.5 

  1,161.6 

  1,028.0 

  1,023.9 

  978.9

 104,332,241 

  108,827,897 

 113,263,951   118,165,751    118,951,434

 104,346,587 
$  2.32 

  108,851,153 
$  2.08 

 113,313,567   118,276,086    119,081,445
$  1.45
$ 

1.92 

1.68 

$ 

$  5.42 
5.42 

$  5.00 
5.00 

$  4.06 
4.06 

$  4.06 
4.05 

$  4.15
4.15

$ 2,040.4 

$ 2,039.1 

$ 1,888.4 

$ 1,852.6 

$ 1,790.6

36.4% 

34.6% 

34.2% 

38.4% 

38.9%

$  954.0 

$  971.4 

$  894.0 

$  897.5 

$  830.3

17.0% 

16.5% 

16.2% 

18.6% 

18.0%

$  588.5 
$  5.64 

$  584.8 
$  5.37 

$  535.6 
$  4.73 

$  555.1 
$  4.69 

$  520.8
$  4.37

(A)  Refer to “Non-GAAP Measures” located on pages 29-30 in the “Management’s Discussion and Analysis” section for a reconciliation to the comparable GAAP financial measure.

NET SALES
(Dollars in billions)

$5.5

$5.9

$5.6

$4.6

$4.8

$4.37

$4.69

$4.73

NON-GA AP
INCOME PER COMMON SHA RE–
ASS UM ING D ILUTION (A)

ASSET S
(Dollars in billions)

$5.37

$5.64

$9.1

$9.0

$9.1

$8.3

$8.0

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

©/® The J.  M. Smucker Company

2014 Annual Report  19

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS
The J. M. Smucker Company

COMPARISON OF FIVE-YEAR CUMULATIVE  
TOTAL SHAREHOLDER RETURN
The J. M. Smucker Company

Among The J. M. Smucker Company, the S&P Packaged Foods & Meats Index, and the S&P 500 Index

The following is a summary of unaudited quarterly results of operations for the years ended April 30, 2014 and 2013.

(Dollars in millions, except per share data) 

Quarter Ended 

Net Income per 
Common Share – 
Net Sales  Gross Profit  Net Income   Common Share   Assuming Dilution

  Net Income per  

2014   

2013   

July 31, 2013 
October 31, 2013 
January 31, 2014 
April 30, 2014 

July 31, 2012 
October 31, 2012 
January 31, 2013 
April 30, 2013 

$1,350.9 
1,559.9 
1,465.5 
1,234.3 

$1,369.7 
1,628.7 
1,559.6 
1,339.7 

$492.9 
552.6 
545.2 
440.3 

$469.8 
541.9 
536.2 
479.7 

$126.6 
153.4 
166.7 
118.5 

$110.9 
148.8 
154.2 
130.3 

$1.19 
1.46 
1.59 
1.16 

$1.00 
1.36 
1.42 
1.22 

$1.19
1.46
1.59
1.16

$1.00
1.36
1.42
1.22

Annual net income per common share may not equal the sum of the individual quarters due to differences in the average number 
of shares outstanding during the respective periods, primarily due to share repurchases.

STOCK PRICE DATA

$300

$250

$200

$150

$100

$50

$0

4/09 

4/10 

4/11 

4/12 

4/13 

4/14

The J. M. Smucker Company

S&P Packaged Foods & Meats

S&P 500

Our 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 approximately 301,800 shareholders of record as of 
June 16, 2014, of which approximately 47,500 were registered holders of common shares.

2014   

2013   

Quarter Ended 

July 31, 2013 
October 31, 2013 
January 31, 2014 
April 30, 2014 

July 31, 2012 
October 31, 2012 
January 31, 2013 
April 30, 2013 

High 

$113.18 
114.72 
112.05 
100.89 

$  80.31 
87.81 
90.31 
105.18 

Low 

$ 96.75 
103.80 
96.30 
87.10 

$ 73.20 
74.60 
81.60 
88.38 

Dividends 
Declared

$0.58
0.58
0.58
0.58

$0.52
0.52
0.52
0.52

The J. M. Smucker Company 
S&P Packaged Foods & Meats 
S&P 500 

$100.00 
100.00 
100.00 

$159.36 
140.00 
138.84 

$201.25 
162.77 
162.75 

$218.82 
184.04 
170.49 

$290.81 
235.63 
199.29 

$278.32
259.29
240.02

2009 

2010 

2011 

2012 

2013 

2014

April 30,

The above graph compares the cumulative total shareholder return for the five years ended April 30, 2014, for our common shares, 
the S&P Packaged Foods & Meats Index, and the S&P 500 Index. These figures assume all dividends are reinvested when received 
and are based on $100 invested in our common shares and the referenced index funds on April 30, 2009.

20  The J. M. Smucker Company    

2014 Annual Report  21

Copyright © 2014 Standard & Poor’s, a division of The McGraw-Hill Companies Inc. All rights reserved.
www.researchdatagroup.com/S&P.htm

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         
         
         
         
         
         
 
 
 
 
 
 
 
 
 
 
 
 
 
         
         
         
         
         
         
 
 
 
 
 
 
MANAGEMENT’S DISCUSSION AND ANALYSIS
The J. M. Smucker Company

MANAGEMENT’S DISCUSSION AND ANALYSIS
The J. M. Smucker Company

(Dollars in millions, unless otherwise noted, except per share data)

E X ECUTIV E SUMMARY
For more than 115 years, The J. M. Smucker Company (“Company,” 
“ we,” “us,” or “our”) headquartered in Orrville, Ohio, has been 
committed to offering consumers quality products that bring 
families together to share memorable meals and moments. 
Today, we are a leading marketer and manufacturer of fruit 
spreads, retail packaged coffee, peanut butter, shortening and 
oils, ice cream toppings, sweetened condensed milk, and natural 
foods products in North America.

Our family of brands includes Smucker’s®, Folgers®, Dunkin’ 
Donuts®, Jif®, Crisco®, Pillsbury®, Eagle Brand®, R.W. Knudsen 
Family®, Hungry Jack®, Café Bustelo®, Café Pilon®, truRoots®, 
White Lily®, and Martha White® in the United States, along 
with Robin Hood®, Five Roses®, Carnation®, and Bick’s® in 
Canada. In addition to these brands, we market products 
under numerous other brands, including Millstone®, 
Dickinson’s®, Laura Scudder’s®, Adams®, Double Fruit® 
(Canada), and Santa Cruz Organic®.

We have three reportable segments: U.S. Retail Coffee, U.S. 
Retail Consumer Foods, and International, Foodservice, and 
Natural Foods. The two U.S. retail market segments in total 
comprised over 75 percent of net sales in 2014 and represent a 
major portion of our strategic focus – the sale of branded food 
products with leadership positions to consumers through retail 
outlets in North America. In the U.S. retail market segments, 
our products are sold primarily to food retailers, food whole-
salers, drug stores, club stores, mass merchandisers, discount 
and dollar stores, and military commissaries. The International, 
Foodservice, and Natural Foods segment represents sales 
 outside of the U.S. retail market segments. In this segment, our 
products are distributed domestically and in foreign countries 
through retail channels, foodservice distributors and operators  
(e.g., restaurants, lodging, schools and universities, health care 
 operators), and natural foods stores and distributors.

STR ATEGIC OV ERV IE W
We remain rooted in our Basic Beliefs of Quality, People, Ethics, 
Growth, and Independence established by our founder and 
namesake, Jerome Smucker, more than a century ago. Today, 
these Basic Beliefs are the core of our unique corporate culture 
and serve as a foundation for decision making and actions. We 
have been led by four generations of family leadership, having 
had only five chief executive officers in 117 years. This continuity 
of management and thought extends to the broader leadership 
team that embodies the values and embraces the business 
practices that have contributed to our consistent growth.

Our strategic vision is to own and market food brands which 
hold the #1 market position in their category, with an emphasis 
on North America while embracing a global perspective.

Our strategic long-term growth objectives are to increase  
net sales by 6 percent and earnings per share, measured  
on a non-GAAP basis, by greater than 8 percent annually on 
average. While the net sales contribution from acquisitions will 
vary from year to year, we expect organic growth, including 
new products, to add 3 to 4 percent per year and acquisitions  
to contribute the remainder over the long term.

Net sales and income per diluted share excluding restructuring, 
merger and integration, and certain pension settlement costs 
(“special project costs”) have both increased at a compound 
annual growth rate of 8 percent over the past five years. 
Although the 8 percent net sales growth rate has exceeded 
our objective, 2014 net sales decreased, compared to 2013, 
due to pricing actions taken in 2014 and 2013 to reflect 
lower commodity costs. In periods of deflation, our primary 
means to deliver our long-term top-line growth objectives 
are capitalizing on acquisitions that are a strategic fit and 
generating organic growth through innovation and other 
brand building activities.

During 2014, we acquired Enray Inc. (“Enray”). This enabling 
acquisition has provided additional scale for our Natural Foods 
business, adding an on-trend line of organic, gluten-free, ancient 
grain products to our portfolio. We also introduced over 100 new 
products in 2014, including Jif Whips and new varieties of 
Pillsbury baking products. Our new product initiatives for 2015 
include Smucker’s Fruit-fullsTM and Café Bustelo K-Cup® packs.

Net cash provided by operating activities has increased at  
a compound annual growth rate of 14 percent over the  
past five years. Our cash deployment strategy is to balance 
reinvesting in our business through acquisitions and capital 
expenditures with returning cash to our share holders. Since 
2010, we have returned approximately $2.6 billion to our  
shareholders through share repurchases and dividends,  
which represents over 70 percent of the net cash provided  
by operating activities during this period.

RESULTS OF  OPER ATIONS
On August 20, 2013, we completed the acquisition of Enray, 
which was accounted for as a purchase business combination. 
The operations of Enray are included in our consolidated 
 financial statements from the date of acquisition. Results for 
2014 also include the impact of our licensing and distribution 
agreement with Cumberland Packing Corp. (“Cumberland”), 
which commenced on July 1, 2013.

On January 3, 2012, we completed the acquisition of a majority 
of the North American foodservice coffee and hot beverage 
business of the former Sara Lee Corporation. The acquisition 
was accounted for as a purchase business combination, and 
the results of the business are included in our consolidated 
financial statements from the date of acquisition. Because the 
transaction closed during the third quarter of 2012, incremental 
foodservice hot beverage business, approximating eight months 
of operations, is included in 2013, compared to 2012.

Net sales 
Gross profit 
  % of net sales 
Operating income 
  % of net sales 
Net income:
  Net income 
  Net income per common share – assuming dilution 
Gross profit excluding special project costs (A) 
  % of net sales 
Operating income excluding special project costs (A) 
  % of net sales 
Income excluding special project costs: (A)
  Income 
  Income per common share – assuming dilution 

Year Ended April 30,

 2014 
$5,610.6 
$2,031.0 

2013 
$5,897.7 
$2,027.6 

2012 
$5,525.8 
$1,845.2 

36.2% 

34.4% 

33.4%

$  919.0 

$  910.4 

$     778.3 

16.4% 

15.4% 

14.1%

$  565.2 
$   5.42 
$2,040.4 

$  544.2 
$   5.00 
$2,039.1 

$  459.7 
$   4.06 
$1,888.4 

36.4% 

34.6% 

34.2%

$  954.0 

$  971.4 

$  894.0 

17.0% 

16.5% 

16.2%

$  588.5 
$   5.64 

$  584.8 
$   5.37 

$  535.6 
$   4.73 

2014 
% Increase 
(Decrease) 

2013 
% Increase 
(Decrease)

(5)% 
0  % 

1 % 

4  % 
8  % 
0  % 

(2)% 

1 % 
5  % 

7%
10%

17%

18%
23%
8%

9%

9%
14%

(A) Refer to “Non-GAAP Measures” located on pages 29-30 in the “Management’s Discussion and Analysis” section for a reconciliation to the comparable GAAP financial measure.

Summary of 2014
Net sales in 2014 decreased 5 percent, compared to 2013, 
reflecting pricing actions and the impact of the planned exit of 
certain portions of our business in the International, Foodservice, 
and Natural Foods segment. Operating income increased  
1 percent in 2014, compared to 2013, mainly driven by lower 
special project costs, partially offset by an increase in selling, 
distribution, and administrative (“SD&A”) expenses. Excluding 
the impact of special project costs, operating income decreased 
2 percent in 2014, compared to the prior period. Net income 
per diluted share increased 8 percent in 2014, compared to 
2013, and increased 5 percent excluding special project costs. 
Both measures reflect the benefit of a decrease in weighted-
average common shares outstanding as a result of our share 
repurchase activities during 2014 and 2013 and lower interest 
expense in 2014.

Summary of 2013
Net sales in 2013 increased 7 percent, compared to 2012, due 
to the contribution from the acquired foodservice hot beverage 
business and favorable sales mix. Operating income increased 
17 percent in 2013, compared to 2012, and increased 9 percent 
excluding the impact of special project costs. Included in 2012 
GAAP and non-GAAP results was an $11.3 loss on divestiture 
related to the Europe’s Best frozen fruit and vegetable business 
which was sold in October 2011. Net income per diluted share 
increased 23 percent in 2013, compared to 2012, and increased 
14 percent excluding special project costs. Both measures 
reflect the benefit of a decrease in weighted-average common 
shares outstanding as a result of our share repurchase activities 
during 2013 and 2012.

22  The J. M. Smucker Company    

2014 Annual Report  23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
2014 Compared to 2013

Year Ended April 30,

2014 

  Increase
2013  (Decrease)  %

(5)%

$5,610.6  $5,897.7  $(287.1) 

Net sales 
Adjust for certain  
  noncomparable items:
    Acquisition 
    Distribution agreement 
    Foreign exchange 
Net sales adjusted  
  for certain  
  noncomparable items (A)  $5,565.5  $5,897.7  $(332.2) 

(39.9) 
(30.1) 
24.9 

— 
— 
— 

(1)
(39.9) 
(30.1) 
(1)
24.9  —

Amounts may not add due to rounding.

Net sales for 2013 increased $371.9, or 7 percent, compared to 
2012, primarily due to the incremental impact of the acquired 
foodservice hot beverage business and favorable sales mix. 
Favorable sales mix of 3 percent for 2013 was driven by volume 
growth in our coffee brands, including K-Cup® packs. Overall 
net price realization was 1 percent lower for 2013, compared to 
2012, as the impact of coffee price declines taken in 2013 and 
2012 more than offset the net impact of pricing actions taken 
on peanut butter during 2013 and 2012. Volume gains were 
realized in Jif peanut butter and Folgers and Dunkin’ Donuts 
coffee but were offset by volume declines in Pillsbury baking 
mixes and Bick’s pickles.

(6)%

Operating Income
The following table presents the components of operating 
income as a percentage of net sales.

(A)  Net sales adjusted for certain noncomparable items is a non-GAAP measure used  
in evaluating performance internally. This measure provides useful information  
to investors because it enables comparison of results on a year-over-year basis.  
Net sales adjusted for certain noncomparable items in the table above excludes  
the impact of the Enray acquisition, the Cumberland distribution agreement,  
and foreign exchange.

Net sales for 2014 decreased $287.1, or 5 percent, compared to 
2013, primarily due to a 5 percent reduction in net price realiza-
tion, reflecting pricing actions taken on coffee and  peanut butter, 
slightly offset by the $70.0 combined contribution from Enray 
and Cumberland. Volume gains realized in Crisco oils, Folgers 
coffee, and Jif peanut butter were offset by the impact of the 
business exits in the International, Foodservice, and Natural 
Foods segment, declines in Pillsbury baking mixes and flour, 
and planned declines in certain Santa Cruz Organic beverages. 
Sales mix did not have a material impact on 2014 net sales.

2013 Compared to 2012

Year Ended April 30,

2013 

  Increase
2012  (Decrease)  %

7%

$5,897.7  $5,525.8  $   371.9 

Net sales 
Adjust for certain  
  noncomparable items:
    Acquisition 
    Divestiture 
    Foreign exchange 
Net sales adjusted  
  for certain  
  noncomparable items (A)  $5,662.9  $5,517.8  $   145.1 

(237.1) 
— 
2.3 

— 
(8.0) 
— 

(237.1) 

(4)
8.0  —
2.3  —

3%

Amounts may not add due to rounding.

(A)  Net sales adjusted for certain noncomparable items is a non-GAAP measure used  
in evaluating performance internally. This measure provides useful information  
to investors because it enables comparison of results on a year-over-year basis.  
Net sales adjusted for certain noncomparable items in the table above excludes  
the incremental impact of the foodservice hot beverage business acquired in 
January 2012, the Europe’s Best frozen fruit and vegetable business which was sold 
in October 2011, and foreign exchange.

Gross profit 
Selling, distribution,  
  and administrative expenses:
    Marketing 
    Advertising 
    Selling 
    Distribution 
    General and administrative 
Total selling, distribution, and  
  administrative expenses 
Amortization 
Impairment charges 
Other restructuring, merger  
  and integration, and special  
  project costs 
Loss on divestiture 
Other operating income – net 
Operating income 

Amounts may not add due to rounding.

Year Ended April 30,

2014 
2013 
36.2%  34.4%  33.4%

2012

3.0% 
2.2 
3.6 
2.8 
6.0 

2.8% 
2.2 
3.3 
2.7 
5.5 

2.7%
2.2
3.3
2.8
5.2

17.6%  16.5%  16.2%
1.6 
— 

1.8 
— 

1.6
0.1

0.5 
— 
— 
16.4% 

0.8 
— 
(0.1) 
15.4%  14.1%

1.3
0.2
—

2014 Compared to 2013
Gross profit was flat in 2014, compared to 2013, but increased 
as a percentage of net sales from 34.4 percent to 36.2 percent 
over the same period. Favorable mix, partially driven by coffee, 
and the contribution from Enray and Cumberland were offset 
by the impact of the exited businesses in the International, 
Foodservice, and Natural Foods segment and higher trade 
spending related to our retail coffee and foodservice hot bever-
age businesses. Overall commodity costs decreased in 2014, 
 compared to 2013, driven by lower green coffee costs, but were 
offset by lower net price realization. Excluding special project 
costs, gross profit remained flat, but improved to 36.4 percent 
of net sales in 2014, compared to 34.6 percent in 2013.

SD&A expenses increased 2 percent in 2014, compared to 2013, 
and increased as a percentage of net sales from 16.5 percent  
to 17.6 percent. General and administrative expenses increased 
3 percent, primarily driven by certain corporate initiatives, 
partially offset by a decrease in incentive compensation costs. 
Marketing expense decreased 1 percent, while selling and distri-
bution expenses both increased 2 percent over the same period.

Operating income increased $8.6, or 1 percent, in 2014, 
 compared to 2013, and increased as a percentage of net sales 
from 15.4 percent to 16.4 percent over the same period.  
A $26.0 decrease in special project costs in 2014, compared to 
2013, more than offset the increase in SD&A expenses. The 
decrease in special project costs reflects substantial progress 
made on the related projects, with lower costs incurred in 2014, 
compared to 2013. Excluding the impact of special project 
costs in both periods, operating income decreased $17.4, or  
2 percent, and was 17.0 percent of net sales in 2014, compared 
to 16.5 percent in 2013.

2013 Compared to 2012
Gross profit increased $182.4, or 10 percent, in 2013, compared 
to 2012, and increased as a percentage of net sales from  
33.4 percent to 34.4 percent over the same period. The increase 
in gross profit was primarily due to favorable mix, the incre-
mental impact of the acquired foodservice hot beverage business, 
a decline in special project costs included in cost of products 
sold, and a $15.2 increase in the benefit of unrealized mark-to-
market adjustments on derivative contracts, which was a gain 
of $6.6 in 2013, compared to a loss of $8.6 in 2012. Overall 
commodity costs decreased in 2013, compared to 2012, driven 
by lower green coffee costs which were partially offset by 
higher costs for peanuts. Lower green coffee costs were mostly 
offset by lower net price realization as a result of coffee price 
declines taken during 2013 and 2012. Despite a peanut butter 
price decline taken in the third quarter of 2013, net price real-
ization was higher, driven by price increases taken on peanut 
butter during 2012, and mostly offset higher costs. Excluding 
special project costs, gross profit increased $150.7, or 8 percent, 
and improved to 34.6 percent of net sales in 2013, compared  
to 34.2 percent in 2012.

SD&A expenses increased 9 percent in 2013, compared to 
2012, but increased only slightly as a percentage of net sales. 
Marketing expense increased 10 percent, driven mainly by an 
increase in brand building investments, primarily in support  
of our coffee brands. Selling expense increased 8 percent, 
driven by the incremental impact of the acquired foodservice 
hot beverage business in 2013. General and administrative 
expenses increased 13 percent, primarily due to increased 
incentive compensation and employee benefit costs.

Higher amortization expense was recognized in 2013, 
 compared to 2012, due to the intangible assets associated  
with the acquired foodservice hot beverage business.

Operating income increased $132.1, or 17 percent, in 2013, 
compared to 2012, and increased as a percentage of net  
sales from 14.1 percent to 15.4 percent over the same period. 
Special project costs decreased $54.7 in 2013, compared to 
2012, reflecting substantial progress made on the related  
projects, with lower costs incurred in 2013, compared to 2012. 
Excluding the impact of special project costs in both periods, 
operating income increased $77.4, or 9 percent, and was  
16.5 percent of net sales in 2013, compared to 16.2 percent  
in 2012. Both operating income measures include a loss on 
divestiture of $11.3 in 2012.

Interest Expense – Net
Net interest expense decreased $14.0 during 2014, compared 
to 2013, primarily due to the impact of an interest rate swap 
entered into during the second quarter of 2014.

Net interest expense increased $13.6 during 2013, compared 
to 2012, primarily due to an incremental five and one-half 
months of interest expense during 2013 related to the  
October 2011 public issuance of $750.0 in Senior Notes.

Other Income – Net
Net other income increased $9.8 in 2014, compared to 2013, 
due to realized gains on the sale of investment securities in 
our nonqualified pension plan, insurance proceeds, and other 
 miscellaneous items during 2014.

Income Taxes
Income taxes increased 4 percent in 2014, compared to 2013, 
primarily as a result of a 4 percent increase in income before 
income taxes. The effective tax rate of 33.5 percent in 2014 
was comparable to the rate in 2013.

Income taxes increased 13 percent in 2013, compared to 2012, 
primarily as a result of a 17 percent increase in income before 
income taxes. The effective tax rate decreased to 33.4 percent 
in 2013 from 34.4 percent in 2012, primarily due to lower state 
income taxes in 2013.

Restructuring
During 2010, we announced plans to restructure our coffee 
and fruit spreads operations as part of our ongoing efforts to 
enhance the long-term strength and profitability of our leading 
brands. Since then, we expanded our restructuring plan to 
include the Canadian pickle and condiments operations and the 
capacity expansion of our peanut butter business. Pickle and 
condiments production was transitioned to third-party manufac-
turers during 2012. The consolidation of coffee production in 
New Orleans, Louisiana, related to these restructuring initiatives 
is complete, and the majority of our retail and  foodservice fruit 
spreads volume is being produced at our new facility in Orrville, 
Ohio. All of the impacted facilities have been closed, and nearly 
all of the anticipated 850 full-time positions have been reduced.

24  The J. M. Smucker Company    

2014 Annual Report  25

MANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker CompanyMANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
We expect to incur total restructuring costs of approximately 
$265.0 for the entire restructuring plan. Cumulative costs of 
$248.4 have been incurred through April 30, 2014, including 
$20.8 in 2014 consisting primarily of $7.2 of site preparation 
and equipment relocation costs and $7.2 of production start-up 
costs. The majority of the remaining costs are anticipated to be 
recognized through 2015.

We anticipate a total capital investment of approximately $90.0 
related to the peanut butter portion of the restructuring plan. 
The increase from our original estimate of $70.0 reflects plans 
to install enhanced roasting technologies, as well as additional 
building modifications at the facility in Memphis, Tennessee.

Through 2014, the overall restructuring initiative has delivered 
approximately 75 percent of the $70.0 in annual savings originally 
estimated. We expect to realize the remaining savings by the 
end of 2017.

Commodities Overview
The raw materials we use are primarily commodities, agricultural-
based products, and packaging materials. The most significant 
of these materials are green coffee, peanuts, edible oils, plastic, 
and wheat. Green coffee, edible oils, and wheat are traded on 
active regulated exchanges, and the price of these commodities 
fluctuates based on market conditions. Derivative instruments, 
including futures and options, are used to minimize price 
 volatility for these commodities.

We source green coffee from more than 20 coffee-producing 
countries. Its price is subject to high volatility due to factors 
such as weather, global supply and demand, pest damage, 
investor speculation, and political and economic conditions  
in the source countries.

Net sales:
  U.S. Retail Coffee 
  U.S. Retail Consumer Foods 
  International, Foodservice, and Natural Foods 
Segment profit:
  U.S. Retail Coffee 
  U.S. Retail Consumer Foods 
  International, Foodservice, and Natural Foods 
Segment profit margin:
  U.S. Retail Coffee 
  U.S. Retail Consumer Foods 
  International, Foodservice, and Natural Foods 

We source peanuts, edible oils, and wheat mainly from North 
America. We are one of the largest procurers of peanuts in the 
U.S. and frequently enter into long-term purchase contracts for 
various periods of time to mitigate the risk of a shortage of this 
key commodity. The edible oils we purchase are mainly soybean 
and canola. The price of peanuts, edible oils, and wheat are 
driven primarily by weather, which impacts crop sizes and 
yield, as well as global demand, especially from large importing 
countries such as China and India. In addition, edible oil prices 
have been impacted by soybean and canola demand from the 
biofuels industry.

We frequently enter into long-term contracts to purchase plastic 
containers, which are sourced mainly from within the U.S. Plastic 
resin is made from petrochemical feedstock and natural gas 
feedstock, and the price can be influenced by feedstock, energy, 
and crude oil prices, as well as global economic conditions.

In 2014, our overall commodity costs were lower than in 2013, 
driven primarily by green coffee, peanuts, and oils.

Segment Results
We have three reportable segments: U.S. Retail Coffee, U.S. 
Retail Consumer Foods, and International, Foodservice, and 
Natural Foods. The U.S. Retail Coffee segment primarily repre-
sents the domestic sales of Folgers, Dunkin’ Donuts, Millstone, 
Café Bustelo, and Café Pilon branded coffee; the U.S. Retail 
Consumer Foods segment primarily includes domestic sales of 
Jif, Smucker’s, Pillsbury, Crisco, Martha White, Hungry Jack, 
and Eagle Brand branded products; and the International, 
Foodservice, and Natural Foods segment is comprised of 
 products distributed domestically and in foreign countries 
through retail channels, foodservice distributors and operators 
(e.g., restaurants, lodging, schools and universities, health care 
operators), and natural foods stores and distributors.

Year Ended April 30,

2014 
% Increase 
(Decrease) 

2013 
% Increase 
(Decrease)

(6)% 
(2) 
(7) 

6% 
(4) 
(16) 

—%
6
21

12%
6
18

 2014 

2013 

2012 

$2,161.7 
2,172.6 
1,276.3 

$2,306.5 
2,214.8 
1,376.4 

$2,297.7 
2,094.5 
1,133.6 

$  641.9 
396.9 
167.1 

$  607.5 
415.3 
198.2 

$  543.0 
393.3 
168.6 

29.7% 
18.3 
13.1 

26.3% 
18.8 
14.4 

23.6%
18.8
14.9

U.S. Retail Coffee
Net sales for the U.S. Retail Coffee segment decreased 6 percent 
in 2014, compared to 2013, reflecting lower net price realization 
driven by a price decline of approximately 6 percent taken in 
February 2013 and incremental promotional spending which 
reflected actions taken to pass through lower costs realized 
during the year. Segment volume increased 2 percent in 2014, 
compared to 2013, as the Folgers brand and Dunkin’ Donuts 
packaged coffee increased 3 percent and 7 percent, respectively, 
and were partially offset by a decline in the Millstone brand, 
which was mainly due to the planned exit of the bulk business. 
Net sales of K-Cup® packs decreased 1 percent in 2014, compared 
to 2013, due to an increase in the number of competitors, includ-
ing many unlicensed participants that entered the market during 
2014. Segment profit increased 6 percent in 2014, compared to 
2013, while segment profit margin increased from 26.3 percent 
in 2013 to 29.7 percent in 2014. The increase in segment profit 
was  primarily due to the volume growth and the price to cost 
relationship during the year.

In June 2014, in response to sustained increases in green coffee 
costs, we announced a price increase of approximately 9 percent 
on the majority of our packaged coffee products sold in the 
U.S., primarily consisting of items sold under the Folgers and 
Dunkin’ Donuts brands. 

Net sales for the U.S. Retail Coffee segment was flat in 2013, 
compared to 2012, as favorable sales mix driven primarily by 
K-Cup® packs and increased volume offset the impact of price 
declines taken during 2013 and 2012. Segment volume 
increased 4 percent in 2013, compared to 2012, as the Folgers, 
Dunkin’ Donuts, and Café Bustelo brands increased 3 percent, 
11 percent, and 16 percent, respectively. Net sales of K-Cup® 
packs increased $108.0, or 61 percent, compared to 2012, and 
contributed 5 percentage points of growth to segment net sales, 
while representing only 1 percentage point of volume growth. 
Segment profit increased 12 percent in 2013, compared to 
2012, while segment profit margin increased to 26.3 percent 
from 23.6 percent in 2012. The increase in segment profit was 
primarily due to volume growth and favorable mix, partially 
offset by increased marketing expense. Green coffee costs were 
lower in 2013, compared to 2012, but were mostly offset by 
lower net price realization and did not contribute significantly 
to the increase in segment profit.

U.S. Retail Consumer Foods
Net sales for the U.S. Retail Consumer Foods segment decreased 
2 percent in 2014, compared to 2013, due to overall lower net 
price realization, partially offset by a 1 percent increase in  segment 
volume. Jif brand volume increased 2 percent in 2014, compared 
to 2013, while Smucker’s fruit spreads volume was flat. Pricing 
actions caused net sales for both brands to decrease 4 percent 
over the same period. Smucker’s Uncrustables®  frozen sandwiches 
net sales and volume increased 20 percent and 22 percent, 
respectively, in 2014, compared to 2013, bene fiting from new 

distribution. Crisco brand volume increased 11 percent, while net 
sales increased 3 percent, impacted by lower net price realization 
in 2014, compared to 2013. For the same period, net sales and 
volume for the Pillsbury brand decreased 5 percent and 4 percent, 
respectively. Canned milk net sales increased 2 percent, while 
volume decreased 1 percent. Segment profit decreased 4 percent 
in 2014, compared to 2013, and segment profit margin decreased 
from 18.8 percent in 2013 to 18.3 percent in 2014. While overall 
commodity costs decreased, primarily for peanuts and oils, 
they were more than offset by lower net price realization across 
the portfolio and drove the decrease in segment profit. An 
increase in segment support costs also contributed to the 
segment profit decrease.

Net sales for the U.S. Retail Consumer Foods segment increased 
6 percent in 2013, compared to 2012, primarily due to higher 
net price realization and favorable sales mix, partially offset by 
a 1 percent decline in segment volume. Jif brand net sales 
increased 21 percent in 2013, compared to 2012, reflecting 
overall higher net price realization and an 8 percent increase in 
volume. The overall higher net price realization resulted from 
price increases taken during 2012, which were only partially 
offset by a price decline taken in the third quarter of 2013. 
Smucker’s fruit spreads net sales was down 1 percent, while 
volume was flat. Net sales and volume of Smucker’s Uncrustables 
frozen sandwiches increased 24 percent and 23 percent, 
respectively, in 2013, compared to 2012, benefiting from new 
distribution. Crisco brand net sales and volume decreased  
5 percent and 3 percent, respectively, in 2013, compared to 
2012, resulting from declines at a key retailer. For the same 
period, net sales for the Pillsbury brand increased 8 percent, 
while volume decreased 4 percent mainly due to the tonnage 
impact of a cake mix downsizing made early in 2013. Segment 
profit increased 6 percent in 2013, compared to 2012, while 
segment profit margin was 18.8 percent of net sales in both 
periods. The increase in segment profit was primarily due to 
favorable mix and a decrease in marketing expense. Overall 
raw material costs were higher for 2013, driven by peanuts, but 
were mostly offset by higher net price realization. The peanut 
butter price decline in the third quarter of 2013 was taken in 
anticipation of lower peanut costs in 2014, and resulted in 
higher peanut costs not being fully recovered during 2013.

International, Foodservice, and Natural Foods
Net sales for the International, Foodservice, and Natural Foods 
segment decreased 7 percent in 2014, compared to 2013. The 
Enray and Cumberland businesses contributed a combined 
$70.0 to segment net sales in 2014. Excluding the impact of 
Enray, Cumberland, and foreign exchange, segment net sales 
and volume decreased 11 percent and 5 percent, respectively. 
The decrease in segment volume was primarily due to the 
impact of the exited portions of our hot beverage and Smucker’s 
Uncrustables frozen sandwich businesses with foodservice 
customers and planned declines in Santa Cruz Organic  
lemonades. Lower net price realization, higher trade spending 

26  The J. M. Smucker Company    

2014 Annual Report  27

MANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker CompanyMANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
related to our foodservice hot beverage business, including an 
accrual adjustment, and unfavorable sales mix also contributed 
to the decrease in net sales. Segment profit decreased 16 percent 
in 2014, compared to 2013, and segment profit margin declined 
from 14.4 percent to 13.1 percent, primarily due to the higher 
trade spending and the impact of the exited portions of our 
foodservice business.

Since we completed the planned exit of a portion of our hot 
beverage business with foodservice customers during the third 
quarter of 2014, we did not realize the full year impact of the exit 
in the current year. In 2015, we expect net sales to be reduced by 
an additional $40.0, compared to 2014, due to this transition, 
while the impact to segment profit is not expected to be material.

Net sales for the International, Foodservice, and Natural Foods 
segment increased 21 percent in 2013, compared to 2012, due 
to the impact of the additional eight months of the acquired 
foodservice hot beverage business, which contributed $237.1, 
representing virtually all of the net sales growth. Excluding  
the impact of the acquisition, the Europe’s Best divestiture in 
Canada, and foreign exchange, segment net sales and volume 
both increased 1 percent over the same period last year. 
Volume gains were realized in nonbranded beverages and the 
Robin Hood and Five Roses Canadian flour brands, while 
 volume declines were realized in Bick’s pickles. Segment profit 
increased 18 percent in 2013, compared to 2012, while segment 
profit margin declined to 14.4 percent from 14.9 percent over 
the same period. Excluding an $11.3 loss on divestiture in 
2012, segment profit increased 10 percent, driven primarily  
by the incremental impact of the acquired foodservice hot 
 beverage business, price increases, and favorable mix.

FINANCIAL C ONDITION
Liquidity
Our principal source of funds is cash generated from operations, 
supplemented by borrowings against our revolving credit 
 facility. Total cash and cash equivalents decreased to $153.5  
at April 30, 2014, compared to $256.4 at April 30, 2013.

We typically expect a significant use of cash to fund working 
capital requirements during the first half of each fiscal year, 
primarily due to the buildup of inventories to support the Fall 
Bake and Holiday period, the additional increase of coffee 
inventory in advance of the Atlantic hurricane season, and 
 seasonal fruit procurement. We expect cash provided by 
 operations in the second half of the fiscal year to significantly 
exceed the amount in the first half of the year, upon completion 
of the Fall Bake and Holiday period. Total cash provided by 
operating activities in the second half of 2014 was $688.0, as 
compared to $168.0 provided through the first half of 2014.

The following table presents selected cash flow information.

Net cash provided by  
  operating activities 
Net cash used for investing  
  activities 
Net cash (used for) provided  
  by financing activities 

Net cash provided by  
  operating activities 
Additions to property, plant,  
  and equipment 

Year Ended April 30,

2014 

2013 

2012

$   856.0  $   855.8     $     730.9

(370.3) 

(185.6) 

(1,035.9)

(575.5) 

(641.0) 

219.6

$   856.0  $   855.8  $     730.9

(279.5) 

(206.5) 

(274.2)

Free cash flow (A) 

$   576.5  $   649.3  $     456.7

(A)  Free cash flow is a non-GAAP measure used by management to evaluate the 

amount of cash available for debt repayment, dividend distribution, acquisition 
opportunities, share repurchases, and other corporate purposes.

Cash provided by operating activities was $856.0, $855.8, and 
$730.9 in 2014, 2013, and 2012, respectively. Cash provided by 
operating activities in 2014, compared to 2013, was essentially 
flat as a result of higher net income in 2014, which was offset 
by an increase in the cash required to fund working capital. This 
increase in the use of cash was primarily due to the timing of 
the 2014 Easter holiday and increased income tax payments, 
partially offset by a decrease in pension contributions in 2014, 
compared to 2013. Since the Easter holiday occurred later in 
2014 than in 2013, more of the collection cycle related to 2014 
net sales was deferred to the next year, as compared to in 2013, 
which mostly offset the impact lower net price realization had 
on the trade receivables balance at April 30, 2014. The increase 
in cash provided by operating activities in 2013, compared to 
2012, was primarily due to higher net income in 2013 and a 
reduction in the use of cash required to fund inventory. This 
reduction in the use of cash was mainly the result of lower 
green coffee costs and a reduction in inventory levels.

Cash used for investing activities was $370.3, $185.6, and 
$1,035.9 in 2014, 2013, and 2012, respectively. In 2014, cash 
used for investing activities consisted primarily of $279.5 in 
capital expenditures, including $41.7 in expenditures related 
to the restructuring program, and $101.8 related to the acqui-
sitions of Enray and Silocaf of New Orleans, Inc. In 2013, cash 
used for investing activities consisted mainly of $206.5 in 
 capital expenditures, including $43.5 in expenditures related 
to the restructuring program. Cash used for investing activities 
in 2012 consisted primarily of $737.3 related to the foodservice 
hot beverage business and Rowland Coffee Roasters, Inc. 
 acquisitions and $274.2 in capital expenditures, including 
$134.2 in expenditures related to the restructuring program.

Cash used for financing activities during 2014 was $575.5,  
 consisting of the purchase of treasury shares for $508.5,  
primarily representing the repurchase of 4.9 million common 
shares available under the January 2013 Board of Directors’ 
authorization, quarterly dividend payments of $238.0, and  
a Senior Notes principal payment of $50.0, partially offset  
by $248.4 of borrowings under our revolving credit facility. 
Cash used for financing activities during 2013 was $641.0,  
consisting of the purchase of treasury shares for $364.2,  
primarily representing the repurchase of 4.0 million common 
shares available under Board of Directors’ authorizations, 
quarterly dividend payments of $222.8, and a Senior Notes 
principal payment of $50.0. Cash provided by financing  
activities during 2012 was $219.6. Proceeds of $748.6 related 
to the October 2011 public debt issuance were partially offset 
by quarterly dividend  payments of $213.7 and the purchase  
of treasury shares for $315.8, primarily representing the  
repurchase of 4.1 million common shares.

Capital Resources
The following table presents our capital structure.

Current portion of long-term debt 
Revolving credit facility 
Long-term debt, less current portion  

Total debt 
Shareholders’ equity 

Total capital 

April 30,

2014 
$  100.0 
248.4 
1,879.8 

$2,228.2 
5,029.6 

2013
$   50.0
—
1,967.8

$2,017.8
5,148.8

$ 7,257.8 

$ 7,166.6

On September 6, 2013, we entered into an amended and restated 
credit agreement with a group of 11 banks. The credit facility, 
which amended and restated our $1.0 billion credit agreement 
dated as of July 29, 2011, provides for a revolving credit line of 
$1.5 billion and extends the maturity to September 6, 2018. 
Borrowings under the revolving credit  facility bear interest based 
on the prevailing U.S. Prime Rate, Canadian Base Rate, London 
Interbank Offered Rate, or Canadian Dealer Offered Rate, based 
on our election. Interest is payable either on a quarterly basis 
or at the end of the   borrowing term. At April 30, 2014, we had 
a balance  outstanding under the revolving credit facility of 
$248.4 at a weighted-average interest rate of 1.22 percent.

Our debt instruments contain certain financial covenant 
restrictions, including consolidated net worth, a leverage ratio, 
and an interest coverage ratio. We are in compliance with  
all covenants.

During 2014, we repurchased 4.9 million common shares  
for $495.0. In April 2014, our Board of Directors authorized  
5.0 million additional common shares for repurchase, all of 
which remain available at April 30, 2014. There is no guarantee 
as to the exact number of shares that may be repurchased or 
when such purchases may occur.

Cash requirements for 2015 are expected to include capital 
expenditures of approximately $240.0, including amounts 
related to the restructuring program, quarterly dividend  
payments of approximately $235.0 based on current rates  
and common shares outstanding, a debt obligation principal  
payment of $100.0, and interest payments of approximately 
$70.0 based on the current interest rate outlook, which is  
net of expected savings from our interest rate swap. Absent 
any further  acquisitions or other significant investments, we 
believe that cash on hand, combined with cash provided by 
operations and borrowings available under our credit facility, 
will be sufficient to meet cash requirements for the next  
12 months. As of April 30, 2014, approximately $143.9 of  
total cash and cash equivalents was held by our international 
 subsidiaries. We do not intend to repatriate these funds to 
meet these obligations. Should we repatriate these funds,  
we will be required to  provide taxes based on the applicable 
U.S. tax rates net of any foreign tax credit consideration.

Subsequent to April 30, 2014, we made additional borrowings 
under our revolving credit facility, bringing the total outstanding 
balance to $490.0 at June 20, 2014, at a weighted-average inter-
est rate of 1.05 percent. The additional funds were used for the 
repayment of the 4.78 percent Senior Notes due June 1, 2014, 
and for general corporate purposes.

NON - G A AP ME A SURES
We use non-GAAP financial measures including: net sales 
adjusted for certain noncomparable items; gross profit, operating 
income, income, and income per diluted share, excluding special 
project costs; earnings before interest, taxes, depreciation, and 
amortization; and free cash flow, as key measures for  purposes 
of evaluating performance internally. We believe that these 
measures provide useful information to investors because 
they are the measures we use to evaluate performance on a 
comparable year-over-year basis. The special project costs 
relate to specific restructuring, merger and integration, and 
pension settlement projects that are each nonrecurring in 
nature and can significantly affect the year-over-year assessment 
of operating results. These non-GAAP financial measures are 
not intended to replace the presentation of financial results in 
accordance with U.S. generally accepted accounting principles 
(“GAAP”). Rather, the presentation of these non-GAAP financial 
measures supplements other metrics we use to internally 
 evaluate our businesses and facilitate the comparison of past 
and present operations and liquidity. These non-GAAP financial 
measures may not be comparable to similar measures used  
by other companies and may exclude certain nondiscretionary 
expenses and cash payments. 

28  The J. M. Smucker Company    

2014 Annual Report  29

MANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker CompanyMANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table reconciles certain non-GAAP financial measures to the comparable GAAP financial measure. See page 24 for a 
reconciliation of net sales adjusted for certain noncomparable items to the comparable GAAP financial measure.

Reconciliation to gross profit:
  Gross profit 
  Cost of products sold – restructuring and merger  
    and integration 

Year Ended April 30,

2014 

2013 

2012 

2011 

2010

$2,031.0 

$2,027.6 

$1,845.2 

$1,798.5 

$1,786.7

9.4 

11.5 

43.2 

54.1 

3.9

  Gross profit excluding special project costs 

$2,040.4 

$2,039.1 

$1,888.4 

$1,852.6 

$1,790.6

Reconciliation to operating income:
  Operating income 
  Cost of products sold – restructuring and merger  
    and integration 
  Other restructuring and merger and integration costs 
  Other special project costs 

$  919.0 

$  910.4 

$  778.3 

$  784.3 

$  790.9

9.4 
25.6 
— 

11.5 
42.8 
6.7 

43.2 
72.5 
— 

54.1 
59.1 
— 

3.9
35.5
—

  Operating income excluding special project costs 

$  954.0 

$  971.4 

$  894.0 

$  897.5 

$  830.3

Reconciliation to net income:
  Net income 
  Income taxes 
  Cost of products sold – restructuring and merger  
    and integration 
  Other restructuring and merger and integration costs 
  Other special project costs 

  Income before income taxes excluding  
    special project costs 
  Income taxes, as adjusted 

  Income excluding special project costs 
  Weighted-average shares – assuming dilution 
  Income per common share excluding special  
    project costs – assuming dilution 

Reconciliation to net income:
  Net income 
  Income taxes 
  Interest expense – net 
  Depreciation 
  Depreciation – restructuring and merger and integration 
  Amortization 

  Earnings before interest, taxes, depreciation,  
    and amortization 

Free cash flow:
  Net cash provided by operating activities 
  Additions to property, plant, and equipment 

  Free cash flow 

$  565.2 
284.5 

$  544.2 
273.1 

$  459.7 
241.5 

$  479.5 
237.7 

$  494.1
236.6

9.4 
25.6 
— 

11.5 
42.8 
6.7 

43.2 
72.5 
— 

54.1 
59.1 
— 

3.9
35.5
—

$  884.7 
296.2 

$  878.3 
293.5 

$  816.9 
281.3 

$  830.4 
275.3 

$  770.1
249.3

$  588.5 

$  520.8
104,346,587  108,851,153  113,313,567  118,276,086  119,081,445

$  584.8 

$  535.6 

$  555.1 

$   5.64 

$   5.37 

$   4.73 

$   4.69 

$   4.37

$  565.2 
284.5 
79.4 
150.5 
7.0 
98.9 

$  544.2 
273.1 
93.4 
143.7 
10.4 
96.8 

$  459.7 
241.5 
79.8 
120.4 
38.5 
88.1 

$  479.5 
237.7 
67.1 
112.2 
53.6 
73.8 

$  494.1
236.6
62.4
108.2
3.9
73.7

$1,185.5 

$1,161.6 

$1,028.0 

$1,023.9 

$    978.9

$  856.0 
(279.5) 

$  855.8 
(206.5) 

$  730.9 
(274.2) 

$  391.6 
(180.1) 

$  713.5
(137.0)

$  576.5 

$  649.3 

$  456.7 

$  211.5 

$  576.5

Beginning in 2015, we will redefine certain non-GAAP measures 
to exclude unallocated gains and losses on commodity and  
foreign exchange derivatives until the related inventory is sold. 
We believe this change more accurately aligns the derivative gains 
and losses with the underlying exposure being hedged and 
allows the realization of the economic effect of the derivative 

without the mark-to-market volatility within non-GAAP earnings. 
Consistent with our treatment in 2014, special project costs 
will continue to be excluded from certain non-GAAP measures, 
and together with unallocated gains and losses on commodity 
and foreign exchange derivatives, will represent certain non-
comparable items.

30  The J. M. Smucker Company    

OFF- BAL ANCE  SHEE T ARR ANGEMENTS AND 
C ONTR ACTUAL OBLIG ATIONS
We do not have material off-balance sheet arrangements, 
financings, or other relationships with unconsolidated entities 
or other persons, also known as variable interest entities. 
Transactions with related parties are in the ordinary course  

of business, conducted on an arm’s-length basis, and not 
 material to our results of operations, financial condition,  
or cash flows.

The following table summarizes our contractual obligations  
by fiscal year at April 30, 2014.

Long-term debt obligations, including current portion 
Interest payments 
Operating lease obligations 
Purchase obligations 
Other liabilities 

Total   

Long-term debt obligations, including current portion and 
interest payments in the above table exclude the impact of any 
interest rate swaps or offering discounts. Purchase obligations 
include agreements that are enforceable and legally bind us to 
purchase goods or services. Included in this category are certain 
obligations related to normal, ongoing purchase obligations  
in which we have guaranteed payment to ensure availability  
of raw materials and packaging supplies. We expect to receive 
consideration for these purchase obligations in the form of 
materials. These purchase obligations do not represent the 
entire anticipated purchases in the future, but represent only 
those items for which we are contractually obligated. Other 
 liabilities in the above table mainly consist of projected  
commitments associated with our defined benefit pension 
and other postretirement benefit plans. The table excludes  
the  liability for unrecognized tax benefits and tax-related net 
 interest of $31.1 under Financial Accounting Standards Board 
Accounting Standards Codification 740, Income Taxes, since 
we are unable to reasonably estimate the timing of cash 
 settlements with the respective taxing authorities.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES
The preparation of financial statements in conformity with  
U.S. GAAP requires that we make estimates and assumptions 
that in certain circumstances affect amounts reported in the 
accompanying consolidated financial statements. In preparing 
these financial statements, we have made our best estimates 
and judgments of certain amounts included in the financial 
statements, giving due consideration to materiality. We do  
not believe there is a great likelihood that materially different 
amounts would be reported under different conditions or 
using different assumptions related to the accounting policies 
described below. However, application of these accounting pol-
icies involves the exercise of judgment and use of assumptions 
as to future uncertainties and, as a result, actual results could 
differ from these estimates.

Revenue Recognition: We recognize revenue when all of the  
following criteria have been met: a valid customer order with  
a determinable price has been received; the product has been 

Total  
$1,950.0 
557.2 
116.0 
1,290.6 
223.5 

2015  
$  100.0 
88.9 
24.0 
1,219.0 
21.3 

2016–2017  
$136.5 
169.0 
43.8 
71.6 
15.9 

2018–2019 
$451.0 
157.1 
31.1 
— 
14.9 

$4,137.3 

$1,453.2 

$436.8 

$654.1 

2020 and
beyond
$1,262.5
142.2
17.1
—
171.4

$1,593.2

shipped and title has transferred to the customer; there is no 
further significant obligation to assist in the resale of the product; 
and collectability is reasonably assured. Trade marketing and 
merchandising programs are classified as a reduction of sales. 
A provision for estimated returns and allowances is recognized 
as a reduction of sales at the time revenue is recognized.

Trade Marketing and Merchandising Programs: In order  
to support our products, various promotional activities are 
conducted through retail trade, distributors, or directly with 
consumers, including in-store display and product placement 
programs, feature price discounts, coupons, and other similar 
activities. We regularly review and revise, when we deem 
 necessary, estimates of costs for these promotional programs 
based on estimates of what will be redeemed by retail trade, 
distributors, or consumers. These estimates are made using 
various techniques, including historical data on performance of 
similar promotional programs. Differences between estimated 
expenditures and actual performance are recognized as a 
change in estimate in a subsequent period. As the total promo-
tional expenditures, including amounts classified as a reduction 
of sales, represented approximately 27 percent of net sales in 
2014, the possibility exists of materially different reported 
results if factors such as the level and success of the promotional 
programs or other conditions differ from expectations.

Income Taxes: We account for income taxes using the liability 
method. In the ordinary course of business, we are exposed to 
uncertainties related to tax filing positions and periodically 
assess the technical merits of these tax positions for all tax 
years that remain subject to examination, based upon the latest 
information available. For uncertain tax positions, we have 
 recognized a liability for unrecognized tax benefits, including 
any applicable interest and penalty charges.

In assessing the need for a valuation allowance, we estimate 
future taxable income, considering the viability of ongoing  
tax planning strategies and the probable recognition of future 
tax deductions and loss carryforwards. Valuation allowances 
related to deferred tax assets can be affected by changes in tax 

2014 Annual Report  31

MANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker CompanyMANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
 
 
 
 
 
laws, statutory tax rates, and projected future taxable income 
levels. Changes in estimated realization of deferred tax assets 
would result in an adjustment to income in the period in which 
that determination is made.

The future tax benefit arising from the net deductible 
 temporary differences and tax carryforwards is $140.7 and 
$160.9 at April 30, 2014 and 2013, respectively. We believe  
that the earnings during the periods when the temporary 
 differences become deductible will be sufficient to realize the 
related future income tax benefits. For those jurisdictions 
where the expiration date of tax carryforwards or the projected 
operating results indicate that realization is not likely, a 
 valuation allowance would have been provided.

Long-Lived Assets: Long-lived assets, except goodwill and 
indefinite-lived intangible assets, are reviewed for impairment 
whenever events or changes in circumstances indicate that  
the carrying 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 
undiscounted cash flows estimated to be generated by such 
assets. If such assets are considered to be impaired, the impair-
ment to be recognized is the amount by which the carrying 
amount of the assets exceeds the estimated fair value of the 
assets. However, determining fair value is subject to estimates 
of both cash flows and discount rates, and different estimates 
could yield different results. There are no events or changes  
in circumstances of which we are aware that indicate the 
 carrying value of our long-lived assets may not be recoverable 
at April 30, 2014.

Goodwill and Other Indefinite-Lived Intangible Assets: We are 
required to test goodwill for impairment annually and more 
often if indicators of impairment exist. To test for goodwill 
impairment, we estimate the fair value of each of our six 
reporting units using both a discounted cash flow valuation 
technique and a market-based approach. The impairment test 
incorporates estimates of future cash flows; allocations of 
 certain assets, liabilities, and cash flows among reporting 
units; future growth rates; terminal value amounts; and the 
applicable weighted-average cost of capital used to discount 
those estimated cash flows. The estimates and projections 
used in the calculation of fair value are consistent with our 
 current and long-range plans, including anticipated changes in 
market conditions, industry trends, growth rates, and planned 
capital expenditures. Changes in forecasted operations and 
other estimates and assumptions could impact the assessment 
of impairment in the future.

At April 30, 2014, goodwill totaled $3.1 billion. Goodwill is 
 substantially concentrated within the U.S. Retail Coffee and 
U.S. Retail Consumer Foods segments. No goodwill impairment 
was recognized as a result of the annual evaluation performed 
as of February 1, 2014. The estimated fair value of each reporting 

32  The J. M. Smucker Company    

unit was substantially in excess of its carrying value as of the 
annual test date.

Other indefinite-lived intangible assets, consisting entirely  
of trademarks, are also tested for impairment annually and 
whenever events or changes in circumstances indicate their 
carrying value may not be recoverable. To test these assets for 
impairment, we estimate the fair value of each asset based on 
a discounted cash flow model using various inputs, including 
projected revenues, an assumed royalty rate, and a discount  
rate. Changes in these estimates and assumptions could impact  
the assessment of impairment in the future.

At April 30, 2014, other indefinite-lived intangible assets 
totaled $1.8 billion. Trademarks that represent our leading, 
iconic brands comprise more than 90 percent of the total 
 carrying value of other indefinite-lived intangible assets. Each 
of these trademarks had an estimated fair value substantially 
in excess of its carrying value as of the annual test date, with the 
exception of the Crisco trademark. The estimated fair value of the 
Crisco trademark decreased approximately $7.0, or 4 percent, 
from 2013 to 2014. We anticipate modest long-term growth for 
the Crisco business due to the competitive landscape of the 
category and assumed a long-term growth rate of 2.5 percent for 
the 2014 impairment test. A sensitivity analysis was performed 
on the Crisco trademark assuming a hypo thetical 50-basis-point 
increase in the discount rate and a 50-basis-point decrease in 
the expected long-term growth rate and yielded an estimated 
fair value slightly below carrying value. The Crisco trademark 
represents less than 10 percent of total other indefinite-lived 
intangible assets.

Pension and Other Postretirement Benefit Plans: To determine 
the ultimate obligation under our defined benefit pension 
and other postretirement benefit plans, we must estimate the 
future cost of benefits and attribute that cost to the time 
period during which each covered employee works. Various 
actuarial assumptions must be made in order to predict and 
measure costs and obligations many years prior to the settle-
ment date, the most significant being the interest rates used 
to discount the obligations of the plans, the long-term rates 
of return on the plans’ assets, assumed pay increases, and the 
health care cost trend rates. We, along with third-party actuaries 
and investment managers, review all of these assumptions on 
an ongoing basis to ensure that the most reasonable information 
available is being considered. For 2015 expense recognition, 
we will use a weighted-average discount rate of 4.45 percent 
and 4.11 percent, and a rate of compensation increase of  
4.13 percent and 3.00 percent for the U.S. and Canadian plans, 
respectively. We anticipate using an expected rate of return 
on plan assets of 6.75 percent for U.S. plans. For the Canadian 
plans, we anticipate using an expected rate of return on plan 
assets of 5.00 percent for the hourly plan and 5.90 percent for 
all other plans.

DERIVATIV E  FINANCIAL INSTRUMENTS   
AND MARK E T RISK
The following discussions about our market risk disclosures 
involve forward-looking statements. Actual results could differ 
from those projected in the forward-looking statements. We  
are exposed to market risk related to changes in interest rates, 
foreign currency exchange rates, and commodity prices.

Interest Rate Risk: The fair value of our cash and cash 
 equivalents at April 30, 2014, approximates carrying value. 
Exposure to interest rate risk on our long-term debt is  mitigated 
due to fixed-rate maturities.

We utilize derivative instruments to manage changes in the  
fair value of our debt. Interest rate swaps mitigate the risk 
associated with the underlying hedged item. At the inception 
of the contract, the instrument is evaluated and documented 
for hedge accounting treatment. If the contract is designated  
as a cash flow hedge, the mark-to-market gains or losses on  
the swap are deferred and included as a component of accu-
mulated other comprehensive loss to the extent effective, and 
reclassified to interest expense in the period during which  
the hedged transaction affects earnings. If the contract is 
 designated as a fair value hedge, the swap would be recognized 
at fair value on the balance sheet, and changes in the fair value 
would be recognized in interest expense. Generally, changes in 
the fair value of the derivative are equal to changes in the fair 
value of the underlying debt and have no net impact on earnings. 
We entered into an interest rate swap during 2014, designated 
as a fair value hedge, on a portion of fixed-rate Senior Notes in 
an effort to achieve a mix of variable- versus fixed-rate debt 
under favorable market conditions. We did not have any interest 
rate swaps outstanding at April 30, 2013.

Based on our overall interest rate exposure as of and during 
the year ended April 30, 2014, including derivatives and other 
instruments sensitive to interest rates, a hypothetical 10 percent 
movement in interest rates would not materially affect our 
results of operations. In measuring interest rate risk by the 
amount of net change in the fair value of our financial liabilities, 
a hypothetical 1 percent decrease in interest rates at April 30, 
2014, would increase the fair value of our long-term debt  
by $87.0.

Foreign Currency Exchange Risk: We have operations outside 
the U.S. with foreign currency denominated assets and liabilities, 
primarily denominated in Canadian currency. Because we have 
foreign currency denominated assets and liabilities, financial 
exposure may result, primarily from the timing of transactions 
and the movement of exchange rates. The foreign currency  
balance sheet exposures as of April 30, 2014, are not expected 
to result in a significant impact on future earnings or cash flows.

We utilize foreign currency exchange forwards and options 
contracts to manage the price volatility of foreign currency 

exchange fluctuations on future cash payments in Canada, 
 primarily related to purchases of certain raw materials and 
 finished goods. The contracts generally have maturities of less 
than one year. Instruments currently used to manage foreign 
currency exchange exposures do not meet the requirements 
for hedge accounting treatment and the change in value of 
these instruments is immediately recognized in cost of products 
sold. Based on our hedged foreign currency positions as of 
April 30, 2014, a hypothetical 10 percent change in exchange 
rates would not result in a material loss of fair value.

Beginning in 2015, we will no longer elect to qualify instruments 
used to manage foreign currency exchange exposures for hedge 
accounting treatment. Therefore, the gains and losses on all 
foreign currency forwards and options contracts will be 
immediately recognized in cost of products sold.

Revenues from customers outside the U.S., subject to foreign 
currency exchange, represented 8 percent of net sales during 
2014. Thus, certain revenues and expenses have been, and 
are expected to be, subject to the effect of foreign currency 
fluctuations, and these fluctuations may have an impact on 
operating results.

Commodity Price Risk: We use certain raw materials and  
other commodities that are subject to price volatility caused by 
supply and demand conditions, political and economic variables, 
weather, investor speculation, and other unpredictable factors. 
To manage the volatility related to anticipated commodity pur-
chases, we use futures and options with maturities of generally 
less than one year. Certain of these instruments are designated 
as cash flow hedges. The mark-to-market gains or losses on 
qualifying hedges are included in accumulated other compre-
hensive loss to the extent effective and reclassified to cost of 
products sold in the period during which the hedged transaction 
affects earnings. The mark-to-market gains or losses on 
 nonqualifying, excluded, and ineffective portions of hedges  
are recognized in cost of products sold immediately.

Beginning in 2015, we will no longer elect to qualify commodity 
derivatives for hedge accounting treatment. As a result, the gains 
and losses on all commodity derivatives will be immediately 
recognized in cost of products sold.

The following sensitivity analysis presents our potential loss  
of fair value resulting from a hypothetical 10 percent change  
in market prices related to raw material commodities.

High   
Low    
Average 

Year Ended April 30,

2014 
$22.7 
5.7 
11.9 

2013
$34.0
7.6
20.7

2014 Annual Report  33

MANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker CompanyMANAGEMENT’S DISCUSSION AND ANALYSISThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
MANAGEMENT’S DISCUSSION AND ANALYSIS
The J. M. Smucker Company

REPORT OF MANAGEMENT ON INTERNAL CONTROL  
OVER FINANCIAL REPORTING
The J. M. Smucker Company

Shareholders
The J. M. Smucker Company

Management is responsible for establishing and maintaining adequate accounting and internal control systems over financial 
reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended.  
Our internal control system is designed to provide reasonable assurance that we have the ability to record, process, summarize, 
and report reliable financial information on a timely basis.

Our management, with the participation of the principal financial and executive officers, assessed the effectiveness of internal  
control over financial reporting as of April 30, 2014. In making this assessment, we used the criteria established in Internal Control – 
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework)  
(“the COSO criteria”).

Based on our assessment of internal control over financial reporting under the COSO criteria, we concluded internal control over 
financial reporting was effective as of April 30, 2014.

Ernst & Young LLP, an independent registered public accounting firm, audited the effectiveness of our internal control over financial 
reporting as of April 30, 2014, and their report thereon is included on page 36 of this report.

Richard K. Smucker  
Chief Executive Officer 

Mark R. Belgya
Senior Vice President and  
Chief Financial Officer

The estimated fair value was determined using quoted market 
prices and was based on our net derivative position by commod-
ity at each quarter end during the fiscal year. The calculations 
are not intended to represent actual losses in fair value that  
we expect to incur. In practice, as markets move, we actively 
manage our risk and adjust hedging strategies as appropriate. 
The commodities hedged have a high inverse correlation to 
price changes of the derivative commodity instrument; thus, we 
would expect that any gain or loss in the estimated fair value  
of its derivatives would generally be offset by an increase or 
decrease in the estimated fair value of the underlying exposures.

FORWARD - LO OK ING  STATEMENTS
Certain statements included in this Annual Report contain 
 forward-looking statements within the meaning of federal 
securities laws. The forward-looking statements may include 
statements concerning our current expectations, estimates, 
assumptions, and beliefs concerning future events, conditions, 
plans, and strategies that are not historical fact. Any statement 
that is not historical in nature is a forward-looking statement 
and may be identified by the use of words and phrases such  
as “expects,” “anticipates,” “believes,” “will,” “plans,” and 
 similar phrases.

Federal securities laws provide a safe harbor for forward-looking 
statements to encourage companies to provide prospective 
information. We are providing this cautionary statement in 
connection with the safe harbor provisions. Readers are cau-
tioned not to place undue reliance on any forward-looking 
statements, as such statements are by nature subject to risks, 
uncertainties, and other factors, many of which are outside of 
our control and could cause actual results to differ materially 
from such statements and from our historical results and 
 experience. These risks and uncertainties include, but are not 
limited to, those set forth under the caption “Risk Factors” in 
our Annual Report on Form 10-K, as well as the following:

•  volatility of commodity markets from which raw materials, 

particularly green coffee beans, peanuts, soybean oil, 
wheat, milk, corn, and sugar, are procured and the related 
impact on costs;

•  risks associated with derivative and purchasing strategies 
we employ to manage commodity pricing risks, including 
the risk that such strategies could result in significant 
losses and adversely impact our liquidity;

•  crude oil price trends and their impact on transportation, 

energy, and packaging costs;

•  our ability to successfully implement and realize the full 
benefit of price changes that are intended to ultimately 
fully recover cost, including the competitive, retailer, and 
consumer response, and the impact of the timing of the 
price changes to profits and cash flow in a particular period;
•  the success and cost of introducing new products and the 

competitive response;

•  the success and cost of marketing and sales programs and 
strategies intended to promote growth in our businesses;

•  general competitive activity in the market, including 

 competitors’ pricing practices and promotional  
spending levels;

•  our ability to successfully integrate acquired and merged 

businesses in a timely and cost-effective manner;

•  the impact of food security concerns involving either our 

products or our competitors’ products;

•  the impact of accidents, extreme weather, and natural 
disasters, including crop failures and storm damage;
•  the concentration of certain of our businesses with key 

customers and suppliers, including single-source suppliers 
of certain key raw materials, such as packaging for our 
Folgers coffee products, and finished goods, such as 
K-Cup® packs, and the ability to manage and maintain  
key relationships;

•  the loss of significant customers, a substantial reduction 
in orders from these customers, or the bankruptcy of any 
such customer;

•  changes in consumer coffee preferences and other  

factors affecting our coffee businesses, which represent  
a substantial portion of our business;

•  a change in outlook or downgrade in our public credit 

 ratings by a rating agency;

•  our ability to obtain any required financing on a timely 

basis and on acceptable terms;

•  the timing and amount of capital expenditures, share 

repurchases, and restructuring costs;

•  impairments in the carrying value of goodwill, other 

intangible assets, or other long-lived assets or changes in 
useful lives of other intangible assets;

•  the impact of new or changes to existing governmental 

laws and regulations and their application;

•  the impact of future legal, regulatory, or market measures 

regarding climate change;

•  the outcome of current and future tax examinations, 
changes in tax laws, and other tax matters, and their 
related impact on our tax positions;

•  foreign currency and interest rate fluctuations;
•  political or economic disruption;
•  other factors affecting share prices and capital markets 

generally; and

•  risks related to other factors described under “Risk 

Factors” in other reports and statements we have filed 
with the Securities and Exchange Commission.

Readers are cautioned not to unduly rely on such forward- 
looking statements, which speak only as of the date made, 
when evaluating the information presented in this Annual 
Report. We do not undertake any obligation to update or  
revise these forward-looking statements to reflect new events 
or  circumstances.

34  The J. M. Smucker Company    

2014 Annual Report  35

 
 
 
  
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING 
FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The J. M. Smucker Company

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING 
FIRM ON THE CONSOLIDATED FINANCIAL STATEMENTS
The J. M. Smucker Company

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

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

We have audited The J. M. Smucker Company’s internal control over financial reporting as of April 30, 2014, based on criteria 
established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway 
Commission (1992 framework) (“the COSO criteria”). The J. M. Smucker Company’s management is responsible for maintaining 
effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial 
reporting included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility 
is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). 
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal 
control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal 
control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating 
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in 
the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the 
 reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures 
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and 
 dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to 
 permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and 
expenditures of the company are being made only in accordance with authorizations of management and directors of the 
 company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,  
or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 
 projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate 
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We have audited the accompanying consolidated balance sheets of The J. M. Smucker Company as of April 30, 2014 and 2013,  
and the related statements of consolidated income, comprehensive income, shareholders’ equity, and cash flows for each of the 
three years in the period ended April 30, 2014. These financial statements are the responsibility of the Company’s management. 
Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated 
financial position of The J. M. Smucker Company at April 30, 2014 and 2013, and the consolidated results of its operations  
and its cash flows for each of the three years in the period ended April 30, 2014, in conformity with U.S. generally accepted 
accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),  
The J. M. Smucker Company’s internal control over financial reporting as of April 30, 2014, based on criteria established in  
Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission  
(1992 framework) and our report dated June 23, 2014, expressed an unqualified opinion thereon.

In our opinion, The J. M. Smucker Company maintained, in all material respects, effective internal control over financial reporting 
as of April 30, 2014, based on the COSO criteria.

Akron, Ohio
June 23, 2014

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),  
the consolidated balance sheets of The J. M. Smucker Company as of April 30, 2014 and 2013, and the related statements  
of consolidated income, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period 
ended April 30, 2014, and our report dated June 23, 2014, expressed an unqualified opinion thereon.

Akron, Ohio
June 23, 2014

36  The J. M. Smucker Company    

2014 Annual Report  37

 
 
REPORT OF MANAGEMENT ON RESPONSIBILITY  
FOR FINANCIAL REPORTING 
The J. M. Smucker Company

STATEMENTS OF CONSOLIDATED INCOME
The J. M. Smucker Company

Shareholders
The J. M. Smucker Company

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 U.S. generally accepted accounting principles and is based on our best estimates and judgments.

We maintain systems of internal accounting controls supported by formal policies and procedures that are communicated 
throughout the Company. There is a program of audits performed by our internal audit staff designed to evaluate the adequacy  
of and adherence to these controls, policies, and procedures.

Ernst & Young LLP, an independent registered public accounting firm, has audited our financial statements in accordance with  
the standards of the Public Company Accounting Oversight Board (United States). Management has made all financial records and 
related data available to Ernst & Young LLP during its audit.

Our audit committee, comprised of four non-employee members of the Board of Directors, meets regularly with the independent 
registered public accounting firm and management to review the work of the internal audit staff and the work, audit scope, timing 
arrangements, and fees of the independent registered public accounting firm. The audit committee also regularly satisfies itself  
as to the adequacy of controls, systems, and financial records. The director of the internal audit department is required to report 
directly to the chair of the audit committee as to internal audit matters.

It is our best judgment that our policies and procedures, our program of internal and independent audits, and the oversight 
 activity of the audit committee work together to provide reasonable assurance that our operations are conducted according  
to law and in compliance with the high standards of business ethics and conduct to which we subscribe.

Richard K. Smucker  
Chief Executive Officer 

Mark R. Belgya
Senior Vice President and  
Chief Financial Officer

(Dollars in millions, except per share data) 

Net sales 
Cost of products sold 
Cost of products sold – restructuring and merger and integration 

Gross Profit 
Selling, distribution, and administrative expenses 
Amortization 
Impairment charges 
Other restructuring and merger and integration costs 
Other special project costs 
Loss on divestiture 
Other operating income – net 

Operating Income 
Interest expense – net 
Other income – net 

Income Before Income Taxes 
Income taxes 

Net Income 

Earnings per common share:
  Net Income 
  Net Income – Assuming Dilution 

Dividends Declared per Common Share 

See notes to consolidated financial statements.

Year Ended April 30,

2014 

$5,610.6 
3,570.2 
9.4 

2,031.0 
988.8 
98.9 
— 
25.6 
— 
— 
(1.3) 

919.0 
(79.4) 
10.1 

849.7 
284.5 

2013 

$5,897.7 
3,858.6 
11.5 

2,027.6 
973.9 
96.8 
— 
42.8 
6.7 
— 
(3.0) 

910.4 
(93.4) 
0.3 

817.3 
273.1 

2012

$5,525.8
3,637.4
43.2

1,845.2
892.7
88.1
4.6
72.5
—
11.3
(2.3)

778.3
(79.8)
2.7

701.2
241.5

$  565.2 

$  544.2 

$  459.7

$   5.42 
$   5.42 

$   2.32 

$   5.00 
$   5.00 

$   2.08 

$   4.06
$   4.06

$   1.92

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
The J. M. Smucker Company

(Dollars in millions) 

Net income 
Other comprehensive income (loss):
  Foreign currency translation adjustments 
  Cash flow hedging derivative activity, net of tax 
  Pension and other postretirement benefit plans activity, net of tax  
  Available-for-sale securities activity, net of tax 

Total Other Comprehensive Income (Loss) 

Comprehensive Income 

See notes to consolidated financial statements.

Year Ended April 30,

2014 

$565.2 

(29.8) 
26.5 
29.4 
(1.1) 

25.0 

2013 

$544.2 

(5.5) 
8.0 
2.9 
2.0 

7.4 

2012

$459.7

(14.8)
(25.2)
(48.3)
0.7

(87.6)

$590.2 

$551.6 

$372.1

38  The J. M. Smucker Company    

2014 Annual Report  39

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED BALANCE SHEETS
The J. M. Smucker Company

CONSOLIDATED BALANCE SHEETS
The J. M. Smucker Company

ASSETS

(Dollars in millions) 
Current Assets
Cash and cash equivalents 
Trade receivables, less allowance for doubtful accounts 
Inventories:
  Finished products 
  Raw materials 

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 – net 
Other noncurrent assets 

Total Other Noncurrent Assets 

Total Assets 

See notes to consolidated financial statements.

April 30,

2014 

2013

$  153.5 
309.4 

$  256.4
313.7

571.5 
359.5 

931.0 
145.2 

618.9
326.6

945.5
79.6

1,539.1 

1,595.2

99.7 
516.0 
1,384.0 
163.9 

2,163.6 
(898.0) 

1,265.6 

3,098.2 
3,024.3 
144.9 

6,267.4 

98.5
494.4
1,267.5
124.9

1,985.3
(842.8)

1,142.5

3,052.9
3,089.4
151.8

6,294.1

$9,072.1 

$9,031.8

LIABILITIES AND SHAREHOLDERS’ EQUITY

(Dollars in millions) 
Current Liabilities
Accounts payable 
Accrued compensation 
Accrued trade marketing and merchandising 
Dividends payable 
Current portion of long-term debt 
Revolving credit facility 
Other current liabilities 

Total Current Liabilities 

Noncurrent Liabilities
Long-term debt 
Defined benefit pensions 
Other postretirement benefits 
Deferred income taxes 
Other noncurrent liabilities 

Total Noncurrent Liabilities 

Total Liabilities 

Shareholders’ Equity
Serial preferred shares – no par value:
  Authorized – 6,000,000 shares; outstanding – none 
Common shares – no par value:
  Authorized – 300,000,000 shares; outstanding – 101,697,400 at April 30, 2014,  
  and 106,486,935 at April 30, 2013 (net of 26,907,765 and 22,118,230 treasury shares,  
  respectively), at stated value 
Additional capital 
Retained income 
Amount due from ESOP Trust 
Accumulated other comprehensive loss 

Total Shareholders’ Equity 

Total Liabilities and Shareholders’ Equity 

See notes to consolidated financial statements.

April 30,

2014 

2013

$  289.2 
57.3 
58.5 
59.0 
100.0 
248.4 
78.6 

891.0 

1,879.8 
135.7 
58.5 
1,020.7 
56.8 

3,151.5 

4,042.5 

$  285.8
69.5
57.4
55.4
50.0
—
78.7

596.8

1,967.8
163.0
67.1
987.2
101.1

3,286.2

3,883.0

— 

—

25.4 
3,965.8 
1,091.0 
(1.0) 
(51.6) 

5,029.6 

26.6
4,125.1
1,075.5
(1.8)
(76.6)

5,148.8

$9,072.1 

$9,031.8

40  The J. M. Smucker Company    

2014 Annual Report  41

 
 
 
 
 
 
 
 
 
 
 
 
         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENTS OF CONSOLIDATED CASH FLOWS
The J. M. Smucker Company

STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY
The J. M. Smucker Company

(Dollars in millions) 
Operating Activities
Net income 
Adjustments to reconcile net income to net cash provided by operations:
  Depreciation 
  Depreciation – restructuring and merger and integration 
  Amortization 
  Impairment charges 
  Share-based compensation expense 
  Other restructuring activities 
  Loss on sale of assets – net 
  Loss on divestiture 
  Gain on sale of marketable securities 
  Deferred income tax benefit 
  Changes in assets and liabilities, net of effect from businesses acquired:
    Trade receivables 
    Inventories 
    Other current assets 
    Accounts payable 
    Accrued liabilities 
    Proceeds from settlement of interest rate swaps – net 
    Defined benefit pension contributions 
    Income and other taxes 
  Other – net 

Net Cash Provided by Operating Activities 

Investing Activities
Businesses acquired, net of cash acquired 
Additions to property, plant, and equipment 
Equity investment in affiliate 
Proceeds from divestiture 
Sales and maturities of marketable securities 
Proceeds from disposal of property, plant, and equipment 
Other – net 

Net Cash Used for Investing Activities 

Financing Activities
Revolving credit facility – net 
Repayments of long-term debt 
Proceeds from long-term debt – net 
Quarterly dividends paid 
Purchase of treasury shares 
Proceeds from stock option exercises 
Other – net 

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

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

Year Ended April 30,

2014 

2013 

2012

$  565.2 

$  544.2 

$  459.7

150.5 
7.0 
98.9 
— 
22.9 
— 
3.0 
— 
(3.7) 
(8.0) 

6.1 
15.4 
(26.9) 
3.3 
9.1 
— 
(9.4) 
(9.5) 
32.1 

856.0 

(101.8) 
(279.5) 
— 
— 
10.0 
10.7 
(9.7) 

(370.3) 

248.4 
(50.0) 
— 
(238.0) 
(508.5) 
0.5 
(27.9) 

(575.5) 
(13.1) 

(102.9) 
256.4 

143.7 
10.4 
96.8 
— 
21.3 
(0.7) 
4.8 
— 
— 
(15.6) 

33.2 
15.2 
4.6 
11.2 
(6.7) 
— 
(40.0) 
3.5 
29.9 

855.8 

— 
(206.5) 
— 
— 
— 
3.3 
17.6 

(185.6) 

— 
(50.0) 
— 
(222.8) 
(364.2) 
2.2 
(6.2) 

(641.0) 
(2.5) 

26.7 
229.7 

120.4
38.5
88.1
4.6
21.7
8.0
3.4
11.3
—
(17.2)

9.3
(48.2)
3.0
35.8
36.9
17.7
(11.4)
(3.0)
(47.7)

730.9

(737.3)
(274.2)
(35.9)
9.3
18.6
4.0
(20.4)

(1,035.9)

—
—
748.6
(213.7)
(315.8)
2.8
(2.3)

219.6
(4.7)

(90.1)
319.8

Cash and Cash Equivalents at End of Year 

$  153.5 

$  256.4 

$  229.7

(  ) Denotes use of cash

See notes to consolidated financial statements.

42  The J. M. Smucker Company    

(Dollars in millions) 

Balance at May 1, 2011 
Net income 
Other comprehensive income 
Comprehensive Income 
Purchase of treasury shares 
Stock plans (includes tax  
  benefit of $4.8) 
Cash dividends declared 
Other  

Balance at April 30, 2012 
Net income 
Other comprehensive income 
Comprehensive Income 
Purchase of treasury shares 
Stock plans (includes tax  
  benefit of $2.9) 
Cash dividends declared 
Other  

Balance at April 30, 2013 
Net income 
Other comprehensive income 
Comprehensive Income 
Purchase of treasury shares 
Stock plans (includes tax  
  benefit of $7.3) 
Cash dividends declared 
Other  

Common 
Shares 
Outstanding 

Common 
Shares 

Additional 
Capital 

Retained 
Income 

Accumulated 
Other 

Amount 

Total 
Due from  Comprehensive  Shareholders’ 
Equity

(Loss) Income 

ESOP Trust 

114,172,122 

$28.5 

$4,396.6 

$  866.9 
459.7 

$(3.3) 

$   3.6 

(87.6) 

(4,236,430) 

(1.1) 

(165.6) 

(149.1) 

349,023 

0.2 

30.2 

110,284,715 

27.6 

4,261.2 

(216.3) 

961.2 
544.2 

(4,062,682) 

(1.0) 

(158.5) 

(204.7) 

264,902 

22.4 

106,486,935 

26.6 

4,125.1 

(225.2) 

1,075.5 
565.2 

0.7 

(2.6) 

0.8 

(1.8) 

(84.0) 

7.4 

(76.6) 

25.0 

(5,072,158) 

(1.3) 

(199.0) 

(308.2) 

282,623 

0.1 

39.7 

(241.6) 
0.1 

0.8 

$5,292.3
459.7
(87.6)
372.1
(315.8)

30.4
(216.3)
0.7

5,163.4
544.2
7.4
551.6
(364.2)

22.4
(225.2)
0.8

5,148.8
565.2
25.0
590.2
(508.5)

39.8
(241.6)
0.9

Balance at April 30, 2014 

101,697,400 

$25.4 

$3,965.8 

$1,091.0 

$(1.0) 

$(51.6) 

$5,029.6

See notes to consolidated financial statements.

2014 Annual Report  43

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions, unless otherwise noted, except per share data)

The following table summarizes amounts related to share-based payments.

 NOTE 1

ACCOUNTING POLICIES

Principles of Consolidation: The consolidated financial statements include the accounts of the Company, its wholly-owned 
 subsidiaries, and its majority-owned investments, if any. Intercompany transactions and accounts are eliminated in consolidation.

Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting 
 principles (“GAAP”) requires that we make certain estimates and assumptions that affect the amounts reported in the consolidated 
financial statements and accompanying notes. Significant estimates in these consolidated financial statements include: allowances 
for doubtful trade receivables, estimates of future cash flows associated with assets, asset impairments, useful lives and residual 
values for depreciation and amortization, net realizable value of inventories, accruals for trade marketing and merchandising 
 programs, income taxes, and the determination of discount and other rate assumptions for defined benefit pension and other  
postretirement benefit expenses. Actual results could differ from these estimates.

Revenue Recognition: We recognize revenue, net of estimated returns and allowances, when all of the following criteria have been 
met: a valid customer order with a determinable price has been received; the product has been shipped and title has transferred to 
the customer; there is no further significant obligation to assist in the resale of the product; and collectability is reasonably assured. 
Trade marketing and merchandising programs are classified as a reduction of sales. A provision for estimated returns and allowances 
is recognized as a reduction of sales at the time revenue is recognized.

Major Customer: Sales to Wal-Mart Stores, Inc. and subsidiaries amounted to 27 percent of net sales in 2014 and 26 percent of net 
sales in both 2013 and 2012. These sales are primarily included in the two U.S. retail market segments. No other customer exceeded 
10 percent of net sales for any year. Trade receivables at April 30, 2014 and 2013, included amounts due from Wal-Mart Stores, Inc. 
and subsidiaries of $76.6 and $92.0, respectively.

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

Trade Marketing and Merchandising Programs: In order to support our products, various promotional activities are conducted 
through retail trade, distributors, group purchasing organizations, foodservice operators, or directly with consumers, including 
 in-store display and product placement programs, feature price discounts, coupons, and other similar activities. We regularly 
review and revise, when we deem necessary, estimates of costs for these promotional programs based on estimates of what will  
be redeemed by retail trade, distributors, or consumers. These estimates are made using various techniques, including historical 
data on performance of similar promotional programs. Differences between estimated expenditures and actual performance are 
recognized as a change in estimate in a subsequent period. As the total promotional expenditures, including amounts classified  
as a reduction of sales, represented 27 percent, 25 percent, and 23 percent of net sales in 2014, 2013, and 2012, respectively,  
a  possibility exists of materially different reported results if factors such as the level and success of the promotional programs  
or other conditions differ from expectations.

Advertising Expense: Advertising costs are expensed as incurred. Advertising expense was $124.7, $131.6, and $119.6 in 2014, 
2013, and 2012, respectively.

Research and Development Costs: Total research and development costs were $24.3, $24.7, and $21.9 in 2014, 2013, and  
2012, respectively.

Share-Based Payments: Share-based compensation expense is recognized on a straight-line basis over the requisite service period, 
which includes a one-year performance period plus the defined forfeiture period, which is typically four years of service or the 
attainment of a defined age and years of service.

Share-based compensation expense included in selling, 
  distribution, and administrative expenses 
Share-based compensation expense included in other restructuring  
  and merger and integration costs 

Total share-based compensation expense 

Related income tax benefit 

Year Ended April 30,

2014 

2013 

$22.1 

0.8 

$22.9 

$ 7.7 

$20.5 

0.8 

$21.3 

$ 7.1 

2012

$19.3

2.5

$21.8

$ 7.5

As of April 30, 2014, total unrecognized share-based compensation cost related to nonvested share-based awards was $33.2.  
The weighted-average period over which this amount is expected to be recognized is 3.0 years.

Corporate income tax benefits realized upon exercise or vesting of an award in excess of that previously recognized in earnings, 
referred to as excess tax benefits, are presented in the Statements of Consolidated Cash Flows as a financing activity. Realized 
excess tax benefits are credited to additional capital in the Consolidated Balance Sheets. Realized shortfall tax benefits, amounts 
which are less than those previously recognized in earnings, are first offset against the cumulative balance of excess tax benefits,  
if any, and then charged directly to income tax expense. For 2014, 2013, and 2012, the excess tax benefits realized upon exercise or 
vesting of share-based compensation was $7.3, $2.9, and $4.8, respectively, and classified as other – net under financing activities  
in the Statements of Consolidated Cash Flows.

Defined Contribution Plans: We offer employee savings plans for domestic and Canadian employees. Our contributions under  
these plans are based on a specified percentage of employee contributions. Charges to operations for these plans in 2014, 2013, 
and 2012 were $20.1, $18.6, and $16.1, respectively. For information on our defined benefit plans, see Note 7: Pensions and  
Other Postretirement Benefits.

Income Taxes: We account for income taxes using the liability method. Accordingly, deferred tax assets and liabilities are recognized 
for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and 
liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply 
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred 
tax assets and liabilities of a change in the applicable tax rate is recognized in income or expense in the period that the change is 
effective. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be 
realized. A tax benefit is recognized when it is more likely than not to be sustained.

We account for the financial statement recognition and measurement criteria of a tax position taken or expected to be taken in a tax 
return under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. FASB ASC 
740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosure.

In accordance with the requirements of FASB ASC 740, uncertain tax positions have been classified in the Consolidated Balance 
Sheets as long term, except to the extent payment is expected within one year. We recognize net interest and penalties related to 
unrecognized tax benefits in income tax expense.

Cash and Cash Equivalents: We consider all short-term, highly-liquid investments with a maturity of three months or less when 
 purchased to be cash equivalents.

Trade Receivables: In the normal course of business, we extend credit to customers. Trade receivables, less allowance for doubtful 
accounts, reflects the net realizable value of receivables and approximates fair value. We evaluate our trade receivables and establish 
an allowance for doubtful accounts based on a combination of factors. When aware that a specific customer has been impacted  
by circumstances such as bankruptcy filings or deterioration in the customer’s operating results or financial position, potentially 
making it unable to meet its financial obligations, we record a specific reserve for bad debt to reduce the related receivable to the 
amount we reasonably believe is collectible. We also record reserves for bad debt for all other customers based on a variety of factors, 
including the length of time the receivables are past due, historical collection experience, and an evaluation of current and projected 
economic conditions at the balance sheet date. Trade receivables are charged off against the allowance after we determine that  
the potential for recovery is remote. At April 30, 2014 and 2013, the allowance for doubtful accounts was $0.9 and $1.3, respectively. 
We believe there is no concentration of risk with any single customer whose failure or nonperformance would materially affect results 
other than as discussed in Major Customer.

44  The J. M. Smucker Company    

2014 Annual Report  45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company   
 
 
 
 
 
 
 
 
 
 
 
 
Inventories: Inventories are stated at the lower of cost or market. Cost for all inventories is determined using the first-in, first-out 
method applied on a consistent basis.

The cost of finished products and work-in-process inventory includes materials, direct labor, and overhead. Work-in-process is 
included in finished products in the Consolidated Balance Sheets and was $62.1 and $64.0 at April 30, 2014 and 2013, respectively.

Derivative Financial Instruments: We utilize derivative instruments such as basis contracts, commodity futures and options contracts, 
foreign currency forwards and options, and interest rate swaps to manage exposures in commodity prices, foreign currency exchange 
rates, and interest rates. We have policies in place that define acceptable instrument types we may enter into and establish controls 
to limit our market risk exposure. We account for these derivative instruments in accordance with FASB ASC 815, Derivatives and 
Hedging, which requires all derivative instruments to be recognized in the financial statements and measured at fair value, regardless 
of the purpose or intent for holding them. For derivatives designated as cash flow hedges that are used to hedge forecasted 
 transactions, changes in fair value are deferred and recognized in shareholders’ equity as a component of accumulated other 
 comprehensive loss to the extent the hedges are effective and then recognized in the Statements of Consolidated Income in the period 
during which the hedged transactions affect earnings. Hedge effectiveness is measured at inception and on a monthly basis. Any 
ineffectiveness associated with the hedge or changes in fair value of derivatives that are nonqualifying are recognized immediately 
in the Statements of Consolidated Income. Derivatives designated as fair value hedges that are used to hedge against changes in 
the fair value of the underlying long-term debt are recognized at fair value on the Consolidated Balance Sheets. Changes in the fair 
value of the derivative are recognized in the Statements of Consolidated Income and are offset by the change in the fair value of 
the underlying long-term debt. For additional information, see Note 11: Derivative Financial Instruments.

Property, Plant, and Equipment: Property, plant, and equipment is recognized at cost and is depreciated on a straight-line basis 
over the estimated useful life of the asset (3 to 20 years for machinery and equipment, 3 to 7 years for capitalized software costs, 
and 5 to 40 years for buildings, fixtures, and improvements).

We lease certain land, buildings, and equipment for varying periods of time, with renewal options. Rent expense in 2014, 2013,  
and 2012 totaled $60.6, $59.2, and $56.5, respectively. As of April 30, 2014, our minimum operating lease obligations were as follows: 
$24.0 in 2015, $23.3 in 2016, $20.5 in 2017, $18.4 in 2018, and $12.7 in 2019.

In accordance with FASB ASC 360, Property, Plant, and Equipment, long-lived assets, except goodwill and indefinite-lived intangible 
assets, are reviewed for impairment when circumstances indicate the carrying value of an 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 undiscounted cash 
flows we estimate 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 their estimated fair value. Assets to be disposed of by sale are 
 recognized as held for sale at the lower of carrying value or fair value less cost to sell.

Goodwill and Other Intangible Assets: Goodwill is the excess of the purchase price paid over the estimated fair value of the net 
assets of a business acquired. In accordance with FASB ASC 350, Intangibles – Goodwill and Other, goodwill and other indefinite-
lived intangible assets are not amortized but are reviewed at least annually for impairment. We conduct our annual test for 
 impairment of goodwill and other indefinite-lived intangible assets as of February 1 of each year. A discounted cash flow valuation 
technique is utilized to estimate the fair value of our reporting units and indefinite-lived intangible assets. We also use a market-
based approach to estimate the fair value of our reporting units. For annual impairment testing purposes, we have six reporting 
units. The discount rates utilized in the cash flow analyses are developed using a weighted-average cost of capital methodology.  
In addition to the annual test, we test for impairment if events or circumstances occur that would more likely than not reduce the 
fair value of a reporting unit below its carrying amount. Finite-lived intangible assets are amortized on a straight-line basis over 
their estimated useful lives. For additional information, see Note 6: Goodwill and Other Intangible Assets.

Marketable Securities and Other Investments: Under our investment policy, we may invest in debt securities deemed to be 
 investment grade at the time of purchase for general corporate purposes. We determine the appropriate categorization of debt 
securities at the time of purchase and reevaluate such designation at each balance sheet date. We typically categorize all debt 
 securities as available for sale, as we have the intent to convert these investments into cash if and when needed. Classification  
of available-for-sale marketable securities as current or noncurrent is based on whether the conversion to cash is expected to  
be necessary for operations in the upcoming year, which is consistent with the security’s maturity date, if applicable.

Securities categorized as available for sale are stated at fair value, with unrealized gains and losses reported as a component of 
accumulated other comprehensive loss. All available-for-sale marketable securities had matured or were sold prior to April 30, 
2012, other than the funds associated with nonqualified retirement plans discussed below. Proceeds of $18.6 were realized upon 
maturity or sale of available-for-sale marketable securities in 2012 and were reported in sales and maturities of marketable securi-
ties in the Statement of Consolidated Cash Flows. We use specific identification to determine the basis on which securities are sold.

We also maintain funds for the payment of benefits associated with nonqualified retirement plans. These funds include investments 
considered to be available-for-sale marketable securities. During 2014, proceeds of $10.0 were realized upon the sale of mutual 
funds associated with these investments and reported in sales and maturities of marketable securities in the Statement of 
Consolidated Cash Flows. A gain of $3.7 was also realized and reported in gain on sale of marketable securities in the Statement  
of Consolidated Cash Flows. At April 30, 2014 and 2013, the fair value of these investments was $55.4 and $48.8, respectively,  
and was included in other noncurrent assets in the Consolidated Balance Sheets. Included in accumulated other comprehensive 
loss at April 30, 2014 and 2013, were unrealized pre-tax gains of $5.3 and $7.1, respectively.

Equity Method Investment: We have a 25 percent equity interest in Guilin Seamild Biologic Technology Development Co., Ltd. (“Seamild”), 
a privately-owned manufacturer and marketer of oats products in China. The initial investment in Seamild of $35.9 was recorded at 
cost and is included in other noncurrent assets in the Consolidated Balance Sheets. The difference between the carrying amount of 
the investment and the underlying equity in net assets is primarily attributable to goodwill and other intangible assets. Under the 
equity method of accounting, the investment is adjusted for our proportionate share of earnings or losses, including  consideration 
of basis differences resulting from the difference between the initial carrying amount of the investment and the underlying equity 
in net assets. The value of our investment did not change significantly and did not have a material impact on the International, 
Foodservice, and Natural Foods segment or the consolidated financial statements for the years ended April 30, 2014 and 2013.

Foreign Currency Translation: Assets and liabilities of 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. Included in accumulated other comprehensive loss  
at April 30, 2014 and 2013, were foreign currency gains of $31.7 and $61.5, respectively.

Recently Issued Accounting Standards: In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from 
Contracts with Customers (Topic 606), which was the result of a joint project by the FASB and International Accounting Standards 
Board to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International 
Financial Reporting Standards. The issuance of a comprehensive and converged standard on revenue recognition is expected to 
enable  financial statement users to better understand and consistently analyze an entity’s revenue across industries, transactions, 
and geographies. The standard will require additional disclosures to help financial statement users better understand the nature, 
amount, timing, and potential uncertainty of the revenue that is recognized. ASU 2014-09 will be effective for us on May 1, 2017, 
and will require either retrospective application to each prior reporting period presented or retrospective application with the 
 cumulative effect of initially applying the standard recognized at the date of adoption. We are currently evaluating the impact the 
application of ASU 2014-09 will have on our financial statements and disclosures.

Risks and Uncertainties: The raw materials we use are primarily commodities, agricultural-based products, and packaging 
 materials. The principal packaging materials we use are glass, plastic, steel cans, caps, carton board, and corrugate. The fruit and 
vegetable raw materials used in the production of our food products are purchased from independent growers and suppliers. Green 
coffee, peanuts, edible oils, sweeteners, milk, flour, corn, and other ingredients are obtained from various suppliers. The availability, 
quality, and cost of many of these commodities have fluctuated, and may continue to fluctuate, over time. Green coffee is sourced 
solely from foreign countries and its supply and price are subject to high volatility due to factors such as weather, global supply and 
demand, pest damage, speculative influences, and political and economic conditions in the source countries. Raw materials are 
generally available from numerous sources, although we have elected to source certain plastic packaging materials from single 
sources of supply pursuant to long-term contracts. While availability may vary from year to year, we believe that we will continue 
to be able to obtain adequate supplies and that alternatives to single-sourced materials are available. We have not  historically 
encountered significant shortages of key raw materials. We consider our relationships with key material suppliers to be good.

Of our total employees, 26 percent are covered by union contracts at eight locations. The contracts vary in term depending on the 
location, with one contract expiring in 2015, representing 1 percent of our total employees.

We insure our business and assets in each country against insurable risks, to the extent that we deem appropriate, based upon an 
analysis of the relative risks and costs.

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

46  The J. M. Smucker Company    

2014 Annual Report  47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company NOTE 2

ACQUISITIONS

The purchase price allocated to the identifiable intangible assets acquired is as follows:

During 2014, we completed two acquisitions for aggregate net cash consideration of $101.8, net of working capital adjustments. 
Enray Inc. (“Enray”), a leading manufacturer and marketer of premium organic, gluten-free ancient grain products, was acquired 
on August 20, 2013. Silocaf of New Orleans, Inc. (“Silocaf”), a strategic investment related to our green coffee supply chain, was 
acquired on September 5, 2013.

The purchase price for each business acquired was allocated to the underlying assets acquired and liabilities assumed based upon 
their estimated fair values at the date of acquisition. The purchase price allocations include total intangible assets of $37.6 for both 
Enray and Silocaf. To the extent the purchase price exceeded the estimated fair value of the net identifiable tangible and intangible 
assets acquired, the excess was allocated to goodwill. Valuations resulted in Enray goodwill of $29.3, which was assigned to the 
International, Foodservice, and Natural Foods segment, and Silocaf goodwill of $22.8, which was assigned to the U.S. Retail Coffee 
segment. Silocaf goodwill is preliminary pending the finalization of our tax basis.

The results of operations for both of the acquired businesses are included in the consolidated financial statements from the dates 
of the transactions and did not have a material impact on the year ended April 30, 2014.

On January 3, 2012, we completed the acquisition of a majority of the North American foodservice coffee and hot beverage business 
of the former Sara Lee Corporation, including a liquid coffee manufacturing facility in Suffolk, Virginia, for $420.6 in an all-cash 
transaction. Utilizing proceeds from the 3.50 percent Senior Notes issued in October 2011, we paid Sara Lee Corporation, renamed 
The Hillshire Brands Company, $375.6, net of a working capital adjustment, and planned to pay an additional $50.0 in declining 
installments through June 2021, to a subsidiary of D.E Master Blenders 1753 N.V., an independent public company separated from 
The Hillshire Brands Company. The $50.0 obligation, included in other current liabilities and other noncurrent liabilities in the 
Consolidated Balance Sheet, was recognized at a present value of $45.0 and was paid in full as of April 30, 2014. During 2014 and 
2013, payments of $35.0 and $10.0, respectively, were made and included in other – net financing on the Statements of Consolidated 
Cash Flows.

We incurred one-time costs of $0.9 in 2014, bringing total costs to $26.4 through April 30, 2014, directly related to the integration 
of the acquired business, and the charges were reported in other restructuring and merger and integration costs in the Statements 
of Consolidated Income. Total one-time costs related to the acquisition consist primarily of transition services provided by Sara Lee 
Corporation and employee separation and relocation costs, nearly all of which are cash related.

The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values 
at the date of acquisition. We determined the estimated fair values based on independent appraisals, discounted cash flow analyses, 
and our own estimates. The purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets 
acquired, and, as such, the excess was allocated to goodwill. The amount allocated to goodwill was primarily attributable to 
 anticipated synergies and market expansion.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as part of the acquisition of 
the North American foodservice coffee and hot beverage business, at the acquisition date.

Assets acquired:
  Cash and cash equivalents 
  Other current assets 
  Property, plant, and equipment 
  Goodwill 
  Intangible assets 
  Other noncurrent assets 

Total assets acquired 

Liabilities assumed:
  Current liabilities 
  Noncurrent liabilities 

Total liabilities assumed 

Net assets acquired 

$  1.2
42.6
92.8
149.9
138.9
0.9

$426.3

$  3.6
2.1

$  5.7

$420.6

Of the total goodwill assigned to the International, Foodservice, and Natural Foods segment, $146.6 was deductible for income  
tax purposes.

48  The J. M. Smucker Company    

Intangible assets with finite lives:
  Customer relationships (10-year useful life) 
  Technology (10-year useful life) 
  Trademarks (6-year weighted-average useful life) 

Total intangible assets 

$ 92.0
23.8
23.1

$138.9

On May 16, 2011, we completed the acquisition of the coffee brands and business operations of Rowland Coffee Roasters, Inc. 
(“Rowland Coffee”), a privately-held company headquartered in Miami, Florida, for $362.8. The acquisition included a manufacturing, 
distribution, and office facility in Miami. We utilized cash on hand and borrowed $180.0 under our revolving credit facility to fund 
the transaction. In addition, we incurred one-time costs of $10.9 in 2014, bringing total costs to $24.3 through April 30, 2014, directly 
related to the integration of Rowland Coffee, which includes cumulative costs of $10.3 in noncash expense items that were reported 
in cost of products sold – restructuring and merger and integration. The remaining charges were reported in other restructuring 
and merger and integration costs in the Statements of Consolidated Income. Total one-time costs related to the acquisition include 
noncash charges, primarily accelerated depreciation, associated with consolidating coffee production in Miami into our existing 
facilities in New Orleans, Louisiana.

The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values 
at the date of acquisition. We determined the estimated fair values based on independent appraisals, discounted cash flow analyses, 
and our own estimates. The purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets 
acquired, and, as such, the excess was allocated to goodwill. The amount allocated to goodwill was primarily attributable
to anticipated synergies and market expansion.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as part of the Rowland  
Coffee acquisition, at the acquisition date.

Assets acquired:
  Current assets 
  Property, plant, and equipment 
  Goodwill 
  Intangible assets 

Total assets acquired 

Liabilities assumed:
  Current liabilities 

Total liabilities assumed 

Net assets acquired 

$ 34.0
29.2
91.7
213.5

$368.4

$  5.6

$  5.6

$362.8

Goodwill of $84.8 and $6.9 was assigned to the U.S. Retail Coffee and the International, Foodservice, and Natural Foods segments, 
respectively. Total goodwill deductible for income tax purposes was $94.8.

The purchase price allocated to the identifiable intangible assets acquired is as follows:

Intangible assets with finite lives:
  Customer relationships (19-year weighted-average useful life) 
  Trademark (10-year useful life) 
Intangible assets with indefinite lives:
  Trademarks 

Total intangible assets 

$147.8
1.6

64.1

$213.5

2014 Annual Report  49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NOTE 3

RESTRUCTURING

 NOTE 4

REPORTABLE SEGMENTS

During 2010, we announced plans to restructure our coffee and fruit spreads operations as part of our ongoing efforts to enhance 
the long-term strength and profitability of our leading brands. Since then, we expanded our restructuring plan to include the 
Canadian pickle and condiments operations and the capacity expansion of our peanut butter business. Pickle and condiments 
production was transitioned to third-party manufacturers during 2012. The consolidation of coffee production in New Orleans, 
Louisiana, related to these restructuring initiatives is complete, and the majority of our retail and foodservice fruit spreads volume 
is being produced at our new facility in Orrville, Ohio. All of the impacted facilities have been closed, and nearly all of the anticipated 
850 full-time positions have been reduced.  

We expect to incur total restructuring costs of approximately $265.0 for the entire restructuring plan, of which $248.4 has been 
incurred through April 30, 2014. The majority of the remaining costs are anticipated to be recognized through 2015.

The following table summarizes the restructuring activity, including the liabilities recorded and the total amount expected  
to be incurred.

Total expected restructuring charge 

Long-Lived 
Asset Charges 
$102.8 

Employee 
Separation 
$  63.8 

  Site Preparation 
and Equipment 
Relocation 
$  45.4 

Production 
Start-up 
$  42.8 

Other Costs 
$10.2 

Balance at May 1, 2011 
Charge to expense 
Cash payments 
Noncash utilization 

Balance at April 30, 2012 
Charge to expense 
Cash payments 
Noncash utilization 

Balance at April 30, 2013 
Charge to expense 
Cash payments 
Noncash utilization 

Balance at April 30, 2014 

Remaining expected restructuring charge 

$ 

    — 
34.2 
— 
(34.2) 

$ 

$ 

    — 
8.2 
— 
(8.2) 

    — 
2.7 
— 
(2.7) 

$ 

$ 

    — 

 0.2 

$  10.2 
20.4 
(13.8) 
(8.0) 

$    8.8 
3.4 
(4.5) 
— 

$     7.7 
2.6 
(8.4) 
(0.2) 

$     1.7 

$     0.3 

$ 

   — 
13.0 
(13.0) 
— 

$ 

   — 
13.4 
(13.4) 
— 

$ 

   — 
7.2 
(7.2) 
— 

$ 

   — 

$    5.2 

$ 

   — 
10.6 
(10.6) 
— 

$ 

   — 
10.8 
(10.8) 
— 

$ 

   — 
7.2 
(7.2) 
— 

$ 

  — 

$     9.0 

$ 

  — 
2.9 
(2.9) 
— 

$ 

$ 

  — 
3.0 
(3.0) 
— 

  — 
1.1 
(1.1) 
— 

$ 

  — 

$ 1.9 

Total
$265.0

$ 10.2
81.1
(40.3)
(42.2)

$  8.8
38.8
(31.7)
(8.2)

$  7.7
20.8
(23.9)
(2.9)

$ 

 1.7

$ 16.6

During the years ended April 30, 2014, 2013, and 2012, total restructuring charges of $20.8, $38.8, and $81.1, respectively, were 
reported in the Statements of Consolidated Income. Of the total restructuring charges, $5.1, $10.0, and $38.6 were reported in cost 
of products sold – restructuring and merger and integration in the years ended April 30, 2014, 2013, and 2012, respectively. The 
remaining charges were reported in other restructuring and merger and integration costs. The restructuring costs classified as cost 
of products sold – restructuring and merger and integration primarily include long-lived asset charges for accelerated depreciation 
related to property, plant, and equipment that had been used at the affected production facilities prior to closure.

Employee separation costs include severance, retention bonuses, and pension costs. Severance costs and retention bonuses are 
recognized over the estimated future service period of the affected employees. The obligation related to employee separation costs 
is included in current liabilities in the Consolidated Balance Sheets.

Other costs include professional fees, costs related to closing the facilities, and miscellaneous expenditures associated with the 
restructuring initiative and are expensed as incurred.

We operate in one industry: the manufacturing and marketing of food products. We have three reportable segments: U.S. Retail 
Coffee, U.S. Retail Consumer Foods, and International, Foodservice, and Natural Foods. The U.S. Retail Coffee segment primarily 
represents the domestic sales of Folgers, Dunkin’ Donuts, Millstone, Café Bustelo, and Café Pilon branded coffee; the U.S. Retail 
Consumer Foods segment primarily includes domestic sales of Jif, Smucker’s, Pillsbury, Crisco, Martha White, Hungry Jack, and 
Eagle Brand branded products; and the International, Foodservice, and Natural Foods segment is comprised of products distributed 
domestically and in foreign countries through retail channels, foodservice distributors and operators (e.g., restaurants, lodging, 
schools and universities, health care operators), and health and natural foods stores and distributors.

Segment profit represents revenue, less direct and allocable operating expenses, and is presented consistent with the way in which 
we manage segments. However, we do not represent that the segments, if operated independently, would report the segment profit 
set forth below, as segment profit excludes certain operating expenses such as corporate administrative expenses. Segment assets 
represent direct and allocable assets, including certain corporate-held assets such as property, plant, and equipment, which are 
also set forth in the following table.

Net sales:
  U.S. Retail Coffee 
  U.S. Retail Consumer Foods 
  International, Foodservice, and Natural Foods 

Total net sales 

Segment profit:
  U.S. Retail Coffee 
  U.S. Retail Consumer Foods 
  International, Foodservice, and Natural Foods 

Total segment profit 

Interest expense – net 
Cost of products sold – restructuring and merger and integration 
Other restructuring and merger and integration costs 
Other special project costs 
Corporate administrative expenses 
Other income – net 

Income before income taxes 

Assets:
  U.S. Retail Coffee 
  U.S. Retail Consumer Foods 
  International, Foodservice, and Natural Foods 
  Unallocated (A) 

Total assets 

Depreciation, amortization, and impairment charges:
  U.S. Retail Coffee 
  U.S. Retail Consumer Foods 
  International, Foodservice, and Natural Foods 
  Unallocated (B) 

Total depreciation, amortization, and impairment charges 

Additions to property, plant, and equipment:
  U.S. Retail Coffee 
  U.S. Retail Consumer Foods 
  International, Foodservice, and Natural Foods 

Total additions to property, plant, and equipment 

Year Ended April 30,

2014 

2013 

2012

$2,161.7 
2,172.6 
1,276.3 

$5,610.6 

$  641.9 
396.9 
167.1 

$1,205.9 

(79.4) 
(9.4) 
(25.6) 
— 
(251.9) 
10.1 

$2,306.5 
2,214.8 
1,376.4 

$5,897.7 

$  607.5 
415.3 
198.2 

$1,221.0 

(93.4) 
(11.5) 
(42.8) 
(6.7) 
(249.6) 
0.3 

$2,297.7
2,094.5
1,133.6

$5,525.8

$  543.0
393.3
168.6

$1,104.9

(79.8)
(43.2)
(72.5)
—
(210.9)
2.7

$  849.7 

$  817.3 

$  701.2

$4,885.6 
2,684.1 
1,248.9 
253.5 

$9,072.1 

$   99.9 
52.9 
67.4 
36.2 

$  256.4 

$   50.7 
138.8 
90.0 

$  279.5 

$4,882.4 
2,618.2 
1,201.3 
329.9 

$9,031.8 

$  100.7 
47.1 
63.7 
39.4 

$  250.9 

$ 

  46.5 
85.1 
74.9 

$  206.5 

$5,033.6
2,612.7
1,179.6
289.3

$9,115.2

$  102.3
46.7
37.7
64.9

$  251.6

$ 

  86.9
159.5
27.8

$  274.2

50  The J. M. Smucker Company    

(A)  Primarily represents unallocated cash and cash equivalents and corporate-held investments.

(B)  Primarily represents unallocated depreciation expense included in cost of products sold – restructuring and merger and integration and corporate administrative expense, 

mainly software amortization.

2014 Annual Report  51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning in 2015, our calculation of segment profit will be modified to exclude unallocated gains and losses on commodity and 
foreign exchange derivatives, which will be reported outside of segment operating results until the related inventory is sold. The 
mark-to-market gains and losses on derivatives not designated as hedging instruments are currently recorded directly in segment 
profit as a component of cost of products sold, regardless of when the related commodity affects earnings. We believe this change 
more accurately aligns the derivative gains and losses with the underlying exposures being hedged and allows the segments to 
realize the economic effect of the derivative without the mark-to-market volatility.

The following table presents certain geographical information.

Net sales:
  Domestic 
  International:
    Canada 
    All other international 

  Total international 

Total net sales 

Assets:
  Domestic 
  International:
    Canada 
    All other international 

  Total international 

Total assets 

Long-lived assets (excluding goodwill and other intangible assets):
  Domestic 
  International:
    Canada 
    All other international 

  Total international 

Total long-lived assets (excluding goodwill and other intangible assets) 

Year Ended April 30,

2014 

2013 

2012

$5,092.0 

$5,355.9 

$5,014.7

$  437.2 
81.4 

$  518.6 

$5,610.6 

$  459.5 
82.3 

$  541.8 

$5,897.7 

$  447.0
64.1

$  511.1

$5,525.8

$8,650.5 

$8,585.4 

$8,683.5

$  257.7 
163.9 

$  421.6 

$9,072.1 

$  396.3 
50.1 

$  446.4 

$ 9,031.8 

$  386.0
45.7

$  431.7

$9,115.2

$1,355.1 

$1,234.7 

$1,164.8

$ 

  16.5 
38.9 

$ 

  55.4 

$1,410.5 

$   20.6 
39.0 

$   59.6 

$1,294.3 

$ 

   28.1
37.2

$ 

   65.3

$1,230.1

The following table presents product category sales as a percentage of consolidated net sales.

Coffee 
Peanut butter 
Fruit spreads 
Shortening and oils 
Baking mixes and frostings 
Canned milk 
Flour and baking ingredients 
Juices and beverages 
Frozen handheld 
Portion control 
Toppings and syrups 
Other  

Total product sales 

52  The J. M. Smucker Company    

Year Ended April 30,

2014 

2013 

2012

46% 
13 
6 
6 
6 
5 
4 
3 
3 
2 
2 
4 

48% 
13 
6 
6 
6 
4 
4 
3 
3 
2 
2 
3 

48%
12
7
7
6
5
5
2
2
2
2
2

100% 

100% 

100%

 NOTE 5

EARNINGS PER SHARE

The following table sets forth the computation of net income per common share and net income per common share − assuming 
dilution under the two-class method.

Net income 
Net income allocated to participating securities 

Net income allocated to common stockholders 

Weighted-average common shares outstanding 
Dilutive effect of stock options 

Year Ended April 30,

2014 
$565.2 
4.5 

$560.7 

2013 
$544.2 
4.7 

$539.5 

2012
$459.7
4.2

$455.5

103,504,121 
14,346 

107,881,519 
23,256 

112,212,677
49,616

Weighted-average common shares outstanding – assuming dilution   

103,518,467 

107,904,775 

112,262,293

Net income per common share 

Net income per common share – assuming dilution 

$ 5.42 

$ 5.42 

$ 5.00 

$ 5.00 

$ 4.06

$ 4.06

 NOTE 6

GOODWILL AND OTHER INTANGIBLE ASSETS

During 2014, we adopted FASB ASU 2012-02, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible 
Assets for Impairment. ASU 2012-02 simplifies the guidance for testing impairment of indefinite-lived intangible assets by allowing 
the option to perform a qualitative test to assess the likelihood that the estimated fair value is less than the carrying amount.  
We did not elect to perform a qualitative test, therefore, the adoption of ASU 2012-02 did not change the process for our February 1, 
2014, annual impairment test and did not impact the financial statements or related disclosure.

A summary of changes in goodwill during the years ended April 30, 2014 and 2013, by reportable segment is as follows:

Balance at May 1, 2012 
Other  

Balance at April 30, 2013 
Acquisitions 
Other  

Balance at April 30, 2014 

U.S. Retail 
Coffee 
$1,720.3 
— 

$1,720.3 
22.8 
— 

$1,743.1 

U.S. Retail 
Consumer 
Foods 
$1,035.2 
(0.6) 

$1,034.6 
— 
(2.4) 

$1,032.2 

International, 
Foodservice, and 
Natural Foods 
$299.1 
(1.1) 

$298.0 
29.3 
(4.4) 

$322.9 

Total
$3,054.6
(1.7)

$3,052.9
52.1
(6.8)

$3,098.2

The other amounts represent foreign currency exchange for the years ended April 30, 2014 and 2013.

2014 Annual Report  53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other intangible assets and related accumulated amortization and impairment charges are as follows:

 NOTE 7

PENSIONS AND OTHER POSTRETIREMENT BENEFITS

Finite-lived intangible assets subject  
  to amortization:
    Customer and contractual relationships 
    Patents and technology 
    Trademarks 

Total intangible assets subject  
  to amortization 

Indefinite-lived intangible assets  
  not subject to amortization:
    Trademarks 

Total other intangible assets 

April 30, 2014 

April 30, 2013

  Accumulated 
  Amortization/ 
Impairment 
Charges 

Acquisition 
Cost 

  Accumulated 
  Amortization/ 
Impairment 
Charges 

Acquisition 
Cost 

Net 

Net

$1,436.2 
164.5 
70.0 

$392.6 
61.9 
36.5 

$1,043.6 
102.6 
33.5 

$1,415.1 
158.8 
62.5 

$314.8 
49.3 
26.9 

$1,100.3
109.5
35.6

$1,670.7 

$491.0 

$1,179.7 

$1,636.4 

$391.0 

$1,245.4

$1,858.9 

$3,529.6 

$ 14.3 

$505.3 

$1,844.6 

$3,024.3 

$1,855.6 

$3,492.0 

$ 11.6 

$1,844.0

$402.6 

$3,089.4

Amortization expense for finite-lived intangible assets was $98.7, $96.6, and $87.7 in 2014, 2013, and 2012, respectively. The 
weighted-average useful lives of the customer and contractual relationships, patents and technology, and trademarks are 19 years, 
14 years, and 10 years, respectively. The weighted-average useful life of the total finite-lived intangible assets is 18 years. Based on 
the amount of intangible assets subject to amortization at April 30, 2014, the estimated amortization expense is $99.5 for 2015, 
$99.6 for 2016, $98.9 for 2017, $96.5 for 2018, and $94.9 for 2019.

We review goodwill and other indefinite-lived intangible assets at least annually for impairment. The annual impairment review 
was performed as of February 1, 2014. Goodwill impairment is tested at the reporting unit level. We have six reporting units.  
No goodwill or other indefinite-lived intangible asset impairment was recognized as a result of the annual evaluation performed  
as of February 1, 2014. The estimated fair value of each reporting unit and other indefinite-lived intangible asset was substantially 
in excess of its carrying value as of the annual test date, with the exception of the Crisco trademark. The estimated fair value of  
the Crisco trademark decreased approximately $7.0, or 4 percent, from 2013 to 2014. We anticipate modest long-term growth  
for the Crisco business due to the competitive landscape of the category and assumed a long-term growth rate of 2.5 percent  
for the 2014 impairment test. A sensitivity analysis was performed on the Crisco trademark assuming a hypothetical 50-basis-
point increase in the discount rate and a 50-basis-point decrease in the expected long-term growth rate and yielded an estimated 
fair value slightly below carrying value. The Crisco trademark represents less than 10 percent of total other indefinite-lived  
intangible assets.

Nonrecurring fair value adjustments of $4.6 were recognized related to the impairment of certain intangible assets in 2012.  
The impairment recognized was related to a finite-lived trademark upon evaluation of the historical performance and future 
growth of this regional canned milk brand.

54  The J. M. Smucker Company    

We have defined benefit pension plans covering certain U.S. and Canadian employees. Benefits are based on the employee’s years of 
service and compensation. Our plans are funded in conformity with the funding requirements of applicable government regulations.

In addition to providing pension benefits, we sponsor several unfunded postretirement plans that provide health care and life 
insurance benefits to certain retired U.S. and Canadian employees. These plans are contributory, with retiree contributions adjusted 
periodically, and contain other cost-sharing features, such as deductibles and coinsurance. Covered employees generally are eligible 
for these benefits when they reach age 55 and have attained 10 years of credited service.

Upon completion of the restructuring plan discussed in Note 3: Restructuring, approximately 850 full-time positions will be reduced. 
As of April 30, 2014, all of the impacted facilities have been closed and nearly all of the anticipated 850 full-time positions have 
been reduced. We have included the impact of the reductions in measuring the U.S. and Canadian benefit obligation of the pension 
plans and other postretirement plans at April 30, 2014, 2013, and 2012. Included in the following tables are charges recognized for 
 termination benefits, curtailment, and settlement as a result of the restructuring plan.

During 2013, a portion of our terminated pension participants received lump-sum cash settlements in order to reduce our future 
pension obligation and administrative costs. The charges related to the lump-sum cash settlements are included below in settlement 
loss and were reported in other special project costs in the Statement of Consolidated Income for the year ended April 30, 2013. 
The lump-sum offerings in 2013 conclude the pension settlement special project cost activities.

The following table summarizes the components of net periodic benefit cost and the change in accumulated other comprehensive 
loss related to the defined benefit pension and other postretirement plans.

Defined Benefit Pension Plans 

Other Postretirement Benefits

Year Ended April 30, 
Service cost 
Interest cost 
Expected return on plan assets 
Amortization of prior service cost (credit) 
Amortization of net actuarial loss 
Curtailment loss (gain) 
Settlement loss 
Termination benefit cost 

Net periodic benefit cost 

Other changes in plan assets and benefit liabilities  
  recognized in accumulated other comprehensive  
  loss before income taxes:
    Prior service (cost) credit arising during the year 
    Net actuarial gain (loss) arising during the year 
    Amortization of prior service cost (credit) 
    Amortization of net actuarial loss 
    Curtailment loss (gain) 
    Settlement loss 
    Foreign currency translation 

2014 
$   8.7 
21.8 
(25.4) 
1.2 
13.2 
— 
— 
— 

$   19.5 

$ 

  — 
19.3 
1.2 
13.2 
— 
— 
2.9 

2013 
$   8.8 
23.9 
(25.3) 
1.0 
13.1 
— 
6.7 
— 

$  28.2 

$ (4.0) 
(20.5) 
1.0 
13.1 
2.0 
6.7 
0.9 

2012 
$   8.1 
26.2 
(27.0) 
1.1 
9.4 
1.1 
1.1 
1.8 

$  21.8 

$ 

    — 
(82.1) 
1.1 
9.4 
1.1 
1.1 
1.1 

Net change for year 

$   36.6 

$ (0.8) 

$(68.3) 

2014 
$  2.3 
2.3 
— 
(1.1) 
— 
— 
— 
— 

$  3.5 

$  1.7 
7.5 
(1.1) 
— 
— 
— 
— 

$  8.1 

2013 
$  2.5 
3.0 
— 
(0.4) 
— 
— 
— 
— 

$  5.1 

$  9.6 
(4.5) 
(0.4) 
— 
— 
— 
— 

$  4.7 

2012
$  2.3
3.1
—
(0.4)
—
(0.1)
—
2.0

$  6.9

$  —
(4.2)
(0.4)
—
(0.1)
—
(0.1)

$(4.8)

Weighted-average assumptions used in determining  
  net periodic benefit costs:
    U.S. plans:
      Discount rate 
      Expected return on plan assets 
      Rate of compensation increase 
    Canadian plans:
      Discount rate 
      Expected return on plan assets 
      Rate of compensation increase 

3.99% 
6.75 
4.13 

3.65% 
5.78 
3.00 

4.70% 
7.00 
4.12 

4.20% 
6.17 
4.00 

5.50% 
7.00 
4.14 

5.00% 
6.66 
4.00 

3.80% 
— 
— 

3.70% 
— 
— 

4.70% 
— 
— 

4.20% 
— 
— 

5.50%
—
—

5.00%
—
—

2014 Annual Report  55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
We use a measurement date of April 30 to determine defined benefit pension and other postretirement benefit plans’ assets and 
benefit obligations. The following table sets forth the combined status of the plans as recognized in the Consolidated Balance Sheets.

April 30, 
Change in benefit obligation:
  Benefit obligation at beginning of year 
    Service cost 
    Interest cost 
    Amendments 
    Actuarial (gain) loss 
    Participant contributions 
    Benefits paid 
    Foreign currency translation adjustments 
    Curtailment 
    Settlement 
    Other adjustments 

  Benefit obligation at end of year 

Change in plan assets:
  Fair value of plan assets at beginning of year 
    Actual return on plan assets 
    Company contributions 
    Participant contributions 
    Benefits paid 
    Foreign currency translation adjustments 
    Settlement 

  Fair value of plan assets at end of year 

Funded status of the plans 

Defined benefit pensions 
Accrued compensation 
Postretirement benefits other than pensions 

Net benefit liability 

Defined Benefit Pension Plans 

Other Postretirement Benefits

2014 

2013 

2014 

2013

$  575.7 
8.7 
21.8 
— 
(19.7) 
0.1 
(34.2) 
(10.1) 
— 
— 
— 

$  542.3 

$  410.7 
25.0 
9.4 
0.1 
(34.2) 
(8.9) 
— 

$  402.1 

$(140.2) 

$(135.7) 
(4.5) 
— 

$(140.2) 

$  561.7 
8.8 
23.9 
4.2 
39.6 
0.5 
(43.6) 
(2.6) 
(2.0) 
(14.8) 
— 

$  575.7 

$  386.5 
44.2 
40.0 
0.5 
(43.6) 
(2.1) 
(14.8) 

$  410.7 

$(165.0) 

$(163.0) 
(2.0) 
— 

$(165.0) 

$   67.1 
2.3 
2.3 
(1.7) 
(7.5) 
1.2 
(3.5) 
(1.1) 
— 
— 
(0.6) 

$   58.5 

$ 

   — 
— 
2.3 
1.2 
(3.5) 
— 
— 

$ 

   — 

$(58.5) 

$ 

   — 
— 
(58.5) 

$(58.5) 

$ 68.8
2.5
3.0
(9.6)
4.5
1.5
(3.7)
(0.2)
—
—
0.3

$  67.1

$ 

   —
—
2.2
1.5
(3.7)
—
—

$ 

   —

$(67.1)

$ 

   —
—
(67.1)

$(67.1)

The following table summarizes amounts recognized in accumulated other comprehensive loss in the Consolidated Balance Sheets, 
before income taxes.

April 30, 
Net actuarial (loss) gain 
Prior service (cost) credit 

Total recognized in accumulated other comprehensive loss 

Defined Benefit Pension Plans 

Other Postretirement Benefits

2014 
$(166.7) 
(4.9) 

$(171.6) 

2013 
$(202.1) 
(6.1) 

$(208.2) 

2014 
$   5.3 
11.5 

$   16.8 

2013
$  (2.2)
10.9

$  8.7

During 2015, we expect to recognize amortization of net actuarial losses and prior service credit of $10.0 and $0.2, respectively,  
in net periodic benefit cost.

The following table sets forth the weighted-average assumptions used in determining the benefit obligations.

April 30, 
U.S. plans:
  Discount rate 
  Rate of compensation increase 
Canadian plans:
  Discount rate 
  Rate of compensation increase 

Defined Benefit Pension Plans 

Other Postretirement Benefits

2014 

2013 

2014 

2013

4.45% 
4.13 

4.11% 
3.00 

3.99% 
4.12 

3.65% 
3.00 

4.30% 
— 

4.10% 
— 

3.80%
—

3.70%
—

For 2015, the assumed health care trend rates are 7.0 percent and 5.5 percent for the U.S. and Canadian plans, respectively. The 
rate for participants under age 65 is assumed to decrease to 5.0 percent in 2019 and 4.5 percent in 2017 for the U.S. and Canadian 
plans, respectively. The health care cost trend rate assumption has a significant effect on the amount of the other postretirement 
benefits obligation and periodic other postretirement benefits 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, 2014:

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

One Percentage Point

Increase 
$0.1 
1.1 

Decrease
$0.1
1.2

The following table sets forth selective information pertaining to our Canadian pension and other postretirement benefit plans.

Defined Benefit Pension Plans 

Other Postretirement Benefits

Year Ended April 30, 
Benefit obligation at end of year 
Fair value of plan assets at end of year 

Funded status of the plans 

Components of net periodic benefit cost:
  Service cost 
  Interest cost 
  Expected return on plan assets 
  Amortization of net actuarial loss 

Net periodic benefit cost 

Changes in plan assets:
  Company contributions 
  Participant contributions 
  Benefits paid 
  Actual return on plan assets 
  Foreign currency translation 

2014 
$113.3 
105.6 

$ 

(7.7) 

$  0.5 
4.2 
(5.8) 
1.3 

$  0.2 

$  5.4 
0.1 
(8.6) 
10.6 
(8.9) 

2013 
$125.7 
107.1 

$  (18.6) 

$  1.3 
5.0 
(6.2) 
1.7 

$  1.8 

$  5.0 
0.4 
(9.4) 
8.7 
(2.1) 

2014 
$  11.4 
— 

$(11.4) 

$ 

    — 
0.5 
— 
— 

2013
$  13.5
—

$(13.5)

$ 

   —
0.6
—
—

$    0.5 

$    0.6

$    0.8 
— 
(0.8) 
— 
— 

$    0.9
—
(0.9)
—
—

56  The J. M. Smucker Company    

2014 Annual Report  57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table sets forth additional information related to our defined benefit pension plans.

Accumulated benefit obligation for all pension plans 
Plans with an accumulated benefit obligation in excess of plan assets:
  Accumulated benefit obligation 
  Fair value of plan assets 
Plans with a projected benefit obligation in excess of plan assets:
  Projected benefit obligation 
  Fair value of plan assets 

April 30,

2014 
$507.3 

$507.3 
402.1 

$542.3 
402.1 

2013
$539.0

$539.0
410.7

$575.7
410.7

We employ a total return on investment approach for the defined benefit pension plans’ assets. A mix of equity, fixed-income,  
and alternative investments is used to maximize the long-term rate of return on assets for the level of risk. In determining the 
expected long-term rate of return on the defined benefit pension plans’ assets, we consider the historical rates of return, the nature 
of investments, the asset allocation, and expectations of future investment strategies. The actual rate of return was 6.9 percent  
and 12.6 percent for the years ended April 30, 2014 and 2013, respectively.

The following tables summarize the fair value of the major asset classes for the U.S. and Canadian defined benefit pension plans 
and the levels within the fair value hierarchy in which the fair value measurements fall.

Cash and cash equivalents (A) 
Equity securities:
  U.S. (B) 
  International (C) 
Fixed-income securities:
  Bonds (D) 
  Fixed income (E) 
Other types of investments: 
  Private equity fund (F) 

Total financial assets measured at fair value 

Quoted Prices in 
Active Markets for 
Identical Assets 
(Level 1) 
$  2.0 

Significant 
Observable 
Inputs 
(Level 2) 
  — 

$ 

Significant 
Unobservable 
Inputs 
(Level 3) 
  — 

$ 

Fair Value at 
April 30, 2014
$  2.0

91.0 
72.3 

148.2 
44.8 

— 

$358.3 

16.4 
12.4 

— 
— 

— 

$28.8 

— 
— 

— 
— 

15.0 

$15.0 

107.4
84.7

148.2
44.8

15.0

$402.1

Cash and cash equivalents (A) 
Equity securities:
  U.S. (B) 
  International (C) 
Fixed-income securities:
  Bonds (D) 
  Fixed income (E) 
Other types of investments:
  Private equity fund (F) 

Total financial assets measured at fair value 

Quoted Prices in 
Active Markets for 
Identical Assets 
(Level 1) 
$  4.4 

Significant 
Observable 
Inputs 
(Level 2) 
  — 

$ 

Significant 
Unobservable 
Inputs 
(Level 3) 
  — 

$ 

Fair Value at 
April 30, 2013
$  4.4

97.2 
72.1 

147.7 
44.6 

— 

$366.0 

16.8 
12.9 

— 
— 

— 

$29.7 

— 
— 

— 
— 

15.0 

$15.0 

114.0
85.0

147.7
44.6

15.0

$410.7

(A)  This category includes money market holdings with maturities of three months or less and are classified as Level 1. Based on the short-term nature of these assets, carrying value 

approximates fair value.

(B)  This category is invested primarily in a diversified portfolio of common stocks and index funds that invest in U.S. stocks with market capitalization ranges similar to those found 
in the various Russell Indexes and are traded on active exchanges. The Level 1 assets are valued using quoted market prices for identical securities in active markets. The Level 2 
assets are funds that consist of equity securities traded on active exchanges.

(C)  This category is invested primarily in common stocks and other equity securities traded on active exchanges whose issuers are located outside the U.S. The fund invests primarily 
in developed countries, but may also invest in emerging markets. The Level 1 assets are valued using quoted market prices for identical securities in active markets. The Level 2 
assets are funds that consist of equity securities traded on active exchanges.

(D)  This category is comprised of bond funds which seek to duplicate the return characteristics of high-quality corporate bonds with a duration range of 10 to 13 years. The Level 1 

assets are valued using quoted market prices for identical securities in active markets.

(E)   This category is comprised of fixed-income funds that invest primarily in government-related bonds of non-U.S. issuers and include investments in the Canadian market as well as 

emerging markets. The Level 1 assets are valued using quoted market prices for identical securities in active markets.

(F)   This category is comprised of one fund that consists primarily of limited partnership interests in corporate finance and venture capital funds. The private equity fund cannot be 
redeemed and return of principal is based on the liquidation of the underlying assets. The private equity fund is classified as a Level 3 asset and is valued based on the fund’s net 
asset value (“NAV”). NAV is calculated based on the estimated fair value of the underlying investment funds within the portfolio and is corroborated by our review.

The following table presents a rollforward of activity for Level 3 assets during 2013. The balance at April 30, 2014, was $15.0, 
 virtually unchanged from 2013, due to minimal actual return on plan assets during the year.

Balance at May 1, 2012 
  Purchases and sales – net 
  Actual return on plan assets sold during the period 
  Actual return on plan assets still held at reporting date 

Balance at April 30, 2013 

Hedge 
Funds 
$  22.3 
(22.8) 
0.5 
— 

$ 

  — 

Private 
Equity Funds 
 $16.3  
1.1  
— 
(2.4) 

$15.0 

Total
$  38.6
(21.7)
0.5
(2.4)

$  15.0 

The current investment policy is to invest 47 percent of assets in both equity securities and fixed-income securities and 6 percent 
in other investments. Included in equity securities were 317,552 of our common shares at April 30, 2014. The market value of these 
shares was $30.7 at April 30, 2014. We paid dividends of $0.7 on these shares during 2014.

We expect to contribute approximately $4.5 to the defined benefit pension plans in 2015. We expect the following payments  
to be made from the defined benefit pension and other postretirement benefit plans: $44.9 in 2015, $36.7 in 2016, $37.3 in 2017, 
$41.9 in 2018, $38.4 in 2019, and $216.1 in 2020 through 2024.

58  The J. M. Smucker Company    

2014 Annual Report  59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NOTE 8

SHARE-BASED PAYMENTS

We provide for equity-based incentives to be awarded to key employees and non-employee directors. Currently, these incentives 
consist of restricted shares, restricted stock units (which may also be referred to as deferred stock units), performance units, and 
stock options. These awards are administered primarily through the 2010 Equity and Incentive Compensation Plan approved by 
our shareholders in August 2010. Awards under this plan may be in the form of stock options, stock appreciation rights, restricted 
shares, restricted stock units, performance shares, performance units, incentive awards, and other share-based awards. Awards 
under this plan may be granted to our non-employee directors, consultants, officers, and other employees. Deferred stock units 
granted to non-employee directors vest immediately, and along with dividends credited on those deferred stock units, are paid out in 
the form of common shares upon termination of service as a non-employee director. At April 30, 2014, there were 6,896,730 shares 
available for future issuance under this plan.

Under the 2010 Equity and Incentive Compensation Plan, we have the option to settle share-based awards by issuing common 
shares from treasury, issuing new Company common shares, or issuing a combination of common shares from treasury and new 
Company common shares.

Stock Options: At April 30, 2014, 33,667 options were outstanding and exercisable. The weighted-average remaining contractual 
term for stock options outstanding and exercisable was less than one year and the aggregate intrinsic value of these stock options 
was $1.8. The total intrinsic value of options exercised during 2014, 2013, and 2012 was $0.8, $3.4, and $2.6, respectively.

Other Equity Awards: The following table is a summary of our restricted shares, deferred stock units, and performance units.

Outstanding at May 1, 2013 
  Granted 
  Converted 
  Vested 
  Forfeited 

Restricted Shares 
and Deferred 
Stock Units 
985,214 
167,134 
106,666 
(402,081) 
(17,745) 

Weighted-Average 
Grant Date 
Fair Value 
$  59.64 
101.08 
100.54 
51.77 
74.86 

Performance 
Units 
106,666 
101,020 
(106,666) 
— 
— 

Weighted-Average 
Conversion Date 
Fair Value
$100.54
104.91
100.54
—
—

Outstanding at April 30, 2014 

839,188 

$  76.54 

101,020 

$104.91

The total fair value of equity awards other than stock options vested in 2014, 2013, and 2012 was $20.8, $11.8, and $22.7, respectively. 
The weighted-average grant date fair value of restricted shares and deferred stock units is the average of the high and the low share 
price on the date of grant. The weighted-average conversion date fair value of performance units is the average of the high and the 
low share price on the date of conversion to restricted shares. The following table summarizes the weighted-average fair values  
of the equity awards granted in 2014, 2013, and 2012.

Year Ended April 30, 
2014   
2013   
2012   

Restricted Shares 
and Deferred 
Stock Units 
167,134 
109,770 
152,180 

Weighted-Average 
Grant Date 
Fair Value 
$101.08 
76.37 
78.32 

Performance 
Units 
101,020 
106,666 
99,455 

Weighted-Average 
Conversion Date 
Fair Value
$104.91
100.54
76.37

The performance units column represents the number of restricted shares received by certain executive officers, subsequent  
to year end, upon conversion of the performance units earned during the year. Restricted shares and deferred stock units  
generally vest four years from the date of grant or upon the attainment of a defined age and years of service, subject to certain 
retention requirements.

 NOTE 9

DEBT AND FINANCING ARRANGEMENTS

Long-term debt consists of the following:

4.78% Senior Notes due June 1, 2014 
6.12% Senior Notes due November 1, 2015 
6.63% Senior Notes due November 1, 2018 
3.50% Senior Notes due October 15, 2021 
5.55% Senior Notes due April 1, 2022 
4.50% Senior Notes due June 1, 2025 

Total long-term debt 
Current portion of long-term debt 

Total long-term debt, less current portion 

Year Ended April 30,

2014 
$  100.0 
24.0 
392.0 
763.8 
300.0 
400.0 

$1,979.8 
100.0 

$1,879.8 

2013
$  100.0
24.0
395.0
748.8
350.0
400.0

$2,017.8
50.0

$1,967.8

The 3.50 percent Senior Notes were issued in a public offering and the remaining Senior Notes were privately placed. The Senior Notes 
are unsecured and interest is paid semiannually. Scheduled payments are required on the 5.55 percent Senior Notes, of which $75.0 is 
due on April 1, 2016, and on the 4.50 percent Senior Notes, the first of which is $100.0 on June 1, 2020. During 2014, $50.0 was paid 
on the 5.55 percent Senior Notes. Scheduled principal payments on our long-term debt are: $100.0 in 2015;  $99.0 in 2016;  $37.5 in 
2017;  $37.5 in 2018;  and $413.5 in 2019. We may prepay at any time all or part of the Senior Notes at 100 percent of the principal 
amount thereof, together with accrued and unpaid interest, and any applicable make-whole amount. 

During 2014, we entered into an interest rate swap, with a notional amount of $750.0, on the 3.50 percent Senior Notes due 
October 15, 2021, effectively converting the Senior Notes from a fixed- to variable-rate basis. The interest rate swap was  designated as 
a fair value hedge of the underlying debt obligation. At April 30, 2014, a net gain from changes in the fair value of the interest rate 
swap of $14.9 was recognized in interest expense with a corresponding offset due to changes in the fair value of the hedged under-
lying debt, resulting in no net impact to interest expense. For additional information, see Note 11: Derivative Financial Instruments.

During 2014, we entered into an amended and restated credit agreement with a group of 11 banks. The credit facility, which 
amended and restated our $1.0 billion credit agreement dated as of July 29, 2011, provides for a revolving credit line of $1.5 billion 
and extends the maturity to September 6, 2018. Borrowings under the revolving credit facility bear interest based on the prevailing 
U.S. Prime Rate, Canadian Base Rate, London Interbank Offered Rate (“LIBOR”), or Canadian Dealer Offered Rate, based on our 
 election. Interest is payable either on a quarterly basis or at the end of the borrowing term. At April 30, 2014, we had a balance 
 outstanding under the revolving credit facility of $248.4 at a weighted-average interest rate of 1.22 percent. We had standby letters 
of credit of $5.7 outstanding at April 30, 2014.

Interest paid totaled $83.3, $97.7, and $86.6 in 2014, 2013, and 2012, respectively. This differs from interest expense due to the  
 timing of payments, amortization of fair value adjustments, effect of the interest rate swap, amortization of debt issue costs,  
and interest capitalized.

Our debt instruments contain certain financial covenant restrictions, including consolidated net worth, a leverage ratio, and an 
interest coverage ratio. We are in compliance with all covenants. 

Subsequent to April 30, 2014, we made additional borrowings under our revolving credit facility, bringing the total outstanding 
balance to $490.0 at June 20, 2014, at a weighted-average interest rate of 1.05 percent. The additional funds were used for the 
repayment of the 4.78 percent Senior Notes due June 1, 2014, and for general corporate purposes.

60  The J. M. Smucker Company    

2014 Annual Report  61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NOTE 10

CONTINGENCIES

We, like other food manufacturers, are from time to time subject to various administrative, regulatory, and other legal proceedings 
arising in the ordinary course of business. We are currently a defendant in a variety of such legal proceedings. We cannot predict 
with certainty the ultimate results of these proceedings or reasonably determine a range of potential loss. Our policy is to accrue 
costs for contingent liabilities when such liabilities are probable and amounts can be reasonably estimated. Based on the information 
known to date, we do not believe the final outcome of these proceedings will have a material adverse effect on our financial position, 
results of operations, or cash flows. 

 NOTE 11

DERIVATIVE FINANCIAL INSTRUMENTS

We are exposed to market risks, such as changes in commodity prices, foreign currency exchange rates, and interest rates.  
To manage the volatility related to these exposures, we enter into various derivative transactions. We have policies in place that 
define acceptable instrument types we may enter into and establish controls to limit our market risk exposure.

Commodity Price Management: We enter into commodity futures and options contracts to manage the price volatility and reduce 
the variability of future cash flows related to anticipated inventory purchases of key raw materials, notably green coffee, edible 
oils, and flour. We also enter into commodity futures and options contracts to manage price risk for energy input costs, including 
natural gas and diesel fuel. The derivative instruments generally have maturities of less than one year.

Certain of our derivative instruments meet the hedge criteria and are accounted for as cash flow hedges. The mark-to-market gains 
or losses on qualifying hedges are deferred and included as a component of accumulated other comprehensive loss to the extent 
effective, and reclassified to cost of products sold in the period during which the hedged transaction affects earnings. Cash flows 
related to qualifying hedges are classified consistently with the cash flows from the hedged item in the Statements of Consolidated 
Cash Flows. In order to qualify as a hedge of commodity price risk, it must be demonstrated that the changes in the fair value of  
the commodity’s futures contracts are highly effective in hedging price risks associated with the commodity purchased. Hedge 
effectiveness is measured and assessed at inception and on a monthly basis. The mark-to-market gains or losses on nonqualifying 
and ineffective portions of commodity hedges are recognized in cost of products sold immediately.

The commodities hedged have a high inverse correlation to price changes of the derivative commodity instrument. Thus, we would 
expect that any gain or loss in the estimated fair value of the derivatives would generally be offset by an increase or decrease in the 
estimated fair value of the underlying exposures.

Beginning in 2015, we will no longer elect to qualify commodity derivatives for hedge accounting treatment. As a result, the 
mark-to-market gains and losses on all commodity derivatives will be immediately recognized in cost of products sold.

Foreign Currency Exchange Rate Hedging: We utilize foreign currency forwards and options contracts to manage the effect of 
 foreign currency exchange fluctuations on future cash payments in Canada, primarily related to purchases of certain raw materials 
and finished goods. The contracts generally have maturities of less than one year. Instruments currently used to manage foreign 
currency exchange exposures do not meet the requirements for hedge accounting treatment and the change in estimated fair value 
of these instruments is immediately recognized in cost of products sold. 

Beginning in 2015, we will no longer elect to qualify instruments used to manage foreign currency exchange exposures for hedge 
accounting treatment. Therefore, the mark-to-market gains and losses on all foreign currency forwards and options contracts will 
be immediately recognized in cost of products sold.

Interest Rate Hedging: We utilize derivative instruments to manage changes in the fair value of our debt. Interest rate swaps 
 mitigate the risk associated with the underlying hedged item. At the inception of the contract, the instrument is evaluated and 
 documented for hedge accounting treatment. If the contract is designated as a cash flow hedge, the mark-to-market gains or losses 
on the swap are deferred and included as a component of accumulated other comprehensive loss to the extent effective, and 
reclassified to interest expense in the period during which the hedged transaction affects earnings. If the contract is designated as 
a fair value hedge, the swap would be recognized at fair value on the balance sheet and changes in the fair value would be recognized 
in interest expense. Generally, changes in the fair value of the derivative are equal to changes in the fair value of the underlying 
debt and have no impact on earnings.

During 2014, we entered into an interest rate swap on the 3.50 percent Senior Notes due October 15, 2021, which was designated 
as a fair value hedge and used to hedge against the changes in the fair value of the debt. We receive cash flows from the counterparty 
at a fixed rate and pay the counterparty variable rates based on LIBOR. The difference between the fixed-rate and variable-rate 
cash flows resulted in a reduction in interest expense for the year ended April 30, 2014. The interest rate swap was recognized at fair 
value in the Consolidated Balance Sheet at April 30, 2014, and changes in the fair value were recognized in interest expense. At 
April 30, 2014, the net gain position on the derivative instrument of $14.9 had no net impact to earnings, as the change in the fair 
value of the derivative was equal to the change in fair value of the underlying debt. There were no interest rate swaps outstanding 
at April 30, 2013.

The following table sets forth the gross fair value of derivative instruments recognized in the Consolidated Balance Sheets.

April 30, 2014 

April 30, 2013

Derivatives designated as hedging instruments:
  Commodity contracts 
  Interest rate contract 

Total derivatives designated as hedging instruments 

Derivatives not designated as hedging instruments:
  Commodity contracts 
  Foreign currency exchange contracts 

Total derivatives not designated as hedging instruments 

Total derivative instruments 

Other 
Current 
Assets 

$23.4 
18.0 

$41.4 

$11.6 
1.4 

$13.0 

$54.4 

Other 

Other 
Current  Noncurrent 
Liabilities 

Liabilities 

$10.9 
— 

$10.9 

$ 5.8 
0.7 

$ 6.5 

$17.4 

$   — 
3.1 

$3.1 

$   — 
— 

$   — 

$3.1 

Other 
Current 
Assets 

Other 
Current 
Liabilities

$2.1 
— 

$2.1 

$3.6 
0.7 

$4.3 

$6.4 

$2.0
—

$2.0

$2.3
0.2

$2.5

$4.5

As of May 1, 2014, we adopted FASB ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, as clarified by ASU 2013-01, 
Scope Clarification of Disclosures about Offsetting Assets and Liabilities. ASU 2011-11, as clarified by ASU 2013-01, requires additional 
disclosures around netting of derivatives. Our interest rate contracts and foreign currency exchange contracts are not subject to 
enforceable netting agreements. We have elected to not offset fair value amounts recognized for our exchange-traded commodity 
derivative instruments and our cash margin accounts executed with the same counterparty that are generally subject to enforceable 
netting agreements. We are required to maintain cash margin accounts in connection with funding the settlement of our open 
positions. At April 30, 2014 and 2013, we maintained cash margin account balances of $8.1 and $5.5, respectively, included in other 
current assets in the Consolidated Balance Sheets. In the event of default and immediate net settlement of all of our open positions 
with individual counterparties, all of our derivative liabilities would be fully offset by either our derivative asset positions or margin 
accounts based on the net asset or liability position with our individual counterparties.

The following table presents information on pre-tax commodity contract net gains and losses recognized on derivatives designated 
as cash flow hedges.

Gains (losses) recognized in other comprehensive income (loss) (effective portion) 
Losses reclassified from accumulated other comprehensive loss to cost  
  of products sold (effective portion) 

Change in accumulated other comprehensive loss 

Gains (losses) recognized in cost of products sold (ineffective portion) 

Year Ended April 30,

2014 
$  21.0 

(20.3) 

$  41.3 

$     1.4 

2013
$(27.5)

(39.6)

$ 12.1

$   (0.9)

Included as a component of accumulated other comprehensive loss at April 30, 2014 and 2013, was a deferred pre-tax net gain  
of $29.1 and a deferred pre-tax net loss of $12.2, respectively, related to commodity contracts. The related tax impact recognized  
in accumulated other comprehensive loss was expense of $10.8 and a benefit of $4.4 at April 30, 2014 and 2013, respectively.  
The entire amount of the deferred net gain included in accumulated other comprehensive loss at April 30, 2014, is expected to be 
 recognized in earnings within one year as the related commodity is sold.

62  The J. M. Smucker Company    

2014 Annual Report  63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company   
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Included as a component of accumulated other comprehensive loss at April 30, 2014 and 2013, were deferred pre-tax losses of  
$4.8 and $5.4, respectively, related to the termination of a prior interest rate swap in October 2011 on the 3.50 percent Senior Notes 
due October 15, 2021. The related tax benefit recognized in accumulated other comprehensive loss was $1.7 and $1.9 at April 30, 
2014 and 2013, respectively. Approximately $0.6 of the pre-tax loss will be recognized over the next 12 months. We reclassified 
$0.6 and $0.5 of the loss recognized on the interest rate swap designated as a cash flow hedge from other comprehensive income 
(loss) to interest expense during 2014 and 2013, respectively.

The following table presents the net realized and unrealized gains and losses recognized in cost of products sold on derivatives not 
designated as qualified hedging instruments.

Unrealized gains on commodity contracts 
Unrealized (losses) gains on foreign currency exchange contracts 

Total unrealized gains recognized in cost of products sold 

Realized losses on commodity contracts 
Realized gains on foreign currency exchange contracts 

Total realized gains (losses) recognized in cost of products sold 

Total gains recognized in cost of products sold 

The following table presents the gross contract notional value of outstanding derivative contracts.

Commodity contracts 
Foreign currency exchange contracts 
Interest rate contract 

Year Ended April 30,

2014 
$ 6.2 
(0.9) 

$ 5.3 

$(1.0) 
4.2 

$ 3.2 

$ 8.5 

2013
$  6.1
0.5

$  6.6

$ (1.5)
0.8

$(0.7)

$  5.9

Year Ended April 30,

2014 
$790.3 
158.1 
750.0 

2013
$347.6
56.8
—

 NOTE 12

OTHER FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Financial instruments, other than derivatives, that potentially subject us to significant concentrations of credit risk consist principally 
of cash investments and trade receivables. The carrying value of these financial instruments approximates fair value. With respect 
to trade receivables, we believe there is no concentration of risk with any single customer whose failure or nonperformance would 
materially affect our results other than as discussed in Major Customer of Note 1: Accounting Policies. We do not require collateral 
from our customers. Our other financial instruments, with the exception of long-term debt, are recognized at estimated fair value 
in the Consolidated Balance Sheets.

The following table provides information on the carrying amount and fair value of our financial instruments.

Other investments 
Derivative financial instruments – net 
Long-term debt 

April 30, 2014 

April 30, 2013

$ 

Carrying  
Amount 
   55.4 
33.9 
(1,979.8) 

Fair Value 
   55.4 
$ 
33.9 
(2,239.1) 

$  

Carrying 
Amount 
  48.8 
1.9 
(2,017.8) 

Fair Value
  48.8
$  
1.9
(2,388.1)

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between 
market participants at the measurement date. Valuation techniques are based on observable and unobservable inputs. Observable 
inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions.

The following tables summarize the fair values and the levels within the fair value hierarchy in which the fair value measurements 
fall for our financial instruments.

Other investments: (A)
  Equity mutual funds 
  Municipal obligations 
  Money market funds 
Derivatives: (B)
  Commodity contracts – net 
  Foreign currency exchange contracts – net 
  Interest rate contract – net 
Long-term debt (C) 

Quoted Prices in 
Active Markets 
for Identical 
Assets (Level 1) 

Significant 
Observable 
Inputs 
(Level 2) 

Significant 
Unobservable 
Inputs 
(Level 3) 

Fair Value at 
April 30, 2014

$    12.0 
— 
9.0 

13.5 
— 
— 
(772.0) 

$ 

    — 
34.4 
— 

4.8 
0.7 
14.9 
(1,467.1) 

$  — 
— 
— 

— 
— 
— 
— 

$ 

   12.0
34.4
9.0

18.3
0.7
14.9
(2,239.1)

Total financial instruments measured at fair value 

$(737.5) 

$(1,412.3) 

$  — 

$(2,149.8)

Other investments: (A)
  Equity mutual funds 
  Municipal obligations 
  Money market funds 
Derivatives: (B)
  Commodity contracts – net 
  Foreign currency exchange contracts – net 
Long-term debt (C) 

Quoted Prices in 
Active Markets 
for Identical 
Assets (Level 1) 

Significant 
Observable 
Inputs 
(Level 2) 

Significant 
Unobservable 
Inputs 
(Level 3) 

Fair Value at 
April 30, 2013

$    21.6 
— 
0.6 

0.7 
— 
(803.6) 

$ 

    — 
26.6 
— 

0.7 
0.5 
(1,584.5) 

$  — 
— 
— 

— 
— 
— 

$ 

   21.6
26.6
0.6

1.4
0.5
(2,388.1)

Total financial instruments measured at fair value 

$(780.7) 

$(1,556.7) 

$  — 

$(2,337.4)

(A)  Other investments consist of funds maintained for the payment of benefits associated with nonqualified retirement plans. The funds include equity securities listed in active 

markets, municipal obligations valued by a third party using valuation techniques that utilize inputs which are derived principally from or corroborated by observable market 
data, and money market funds with maturities of three months or less. Based on the short-term nature of these money market funds, carrying value approximates fair value. 
As of April 30, 2014, our municipal obligations are scheduled to mature as follows: $3.3 in 2015, $0.5 in 2016, $1.7 in 2017, $1.1 in 2018, and the remaining $27.8 in 2019 and 
beyond. For additional information, see Marketable Securities and Other Investments in Note 1: Accounting Policies.

(B)  Level 1 commodity contract derivatives are valued using quoted market prices for identical instruments in active markets. Level 2 commodity contract and foreign exchange 
derivatives are valued using quoted prices for similar assets or liabilities in active markets. The Level 2 interest rate contract derivative is valued using the income approach, 
observable Level 2 market expectations at the measurement date, and standard valuation techniques to convert future amounts to a single discounted present value. Level 2 
inputs for the interest rate contract are limited to quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the 
asset or liability. For additional information, see Note 11: Derivative Financial Instruments.

(C)  Long-term debt is comprised of public Senior Notes classified as Level 1 and private Senior Notes classified as Level 2. The public Senior Notes are traded in an active secondary 
market and valued using quoted prices. The value of the private Senior Notes is based on the net present value of each interest and principal payment calculated, utilizing an 
interest rate derived from a fair market yield curve. For additional information, see Note 9: Debt and Financing Arrangements.

64  The J. M. Smucker Company    

2014 Annual Report  65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NOTE 13

INCOME TAXES

Income (loss) before income taxes is as follows:

Domestic 
Foreign 

Income before income taxes 

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

2014 
$827.4 
22.3 

$849.7 

Year Ended April 30,

2013 
$791.9 
25.4 

$817.3 

2012
$706.4
(5.2)

$701.2

Year Ended April 30,

2014 

2013 

2012

Current:
  Federal 
  Foreign 
  State and local 
Deferred:
  Federal 
  Foreign 
  State and local 

Total income tax expense 

$265.4 
4.2 
22.9 

(13.9) 
2.4 
3.5 

$284.5 

$262.1 
6.1 
20.5 

(15.6) 
0.9 
(0.9) 

$273.1 

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

Percent of Pretax Income 
Statutory federal income tax rate 
  State and local income taxes, net of federal income tax benefit 
  Domestic manufacturing deduction 
  Other items – net 

Effective income tax rate 

Income taxes paid 

Year Ended April 30,

2014 
35.0% 
1.9 
(3.0) 
(0.4) 

33.5% 

2013 
35.0% 
1.8 
(3.1) 
(0.3) 

33.4% 

$294.4 

$279.2 

$257.8

We are a voluntary participant in the Compliance Assurance Process (“CAP”) program offered by the Internal Revenue Service (“IRS”) 
and are currently under a CAP examination for the tax year ended April 30, 2014. Through the contemporaneous exchange of 
information with the IRS, this program is designed to identify and resolve tax positions with the IRS prior to the filing of a tax return, 
which allows us to remain current with our IRS examinations. The IRS has completed the CAP examinations for tax years ended 
April 30, 2011, 2012, and 2013. Tax years prior to 2011 are no longer subject to U.S. federal tax examination. With limited exceptions, 
we are no longer subject to examination for state and local jurisdictions for tax years prior to 2010 and for tax years prior to 2008 
for  foreign jurisdictions.

$228.2
6.8
23.7

(10.2)
(6.9)
(0.1)

$241.5

2012
35.0%
2.3
(3.1)
0.2

34.4%

Deferred income taxes reflect the 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 our deferred tax assets 
and liabilities are as follows:

Deferred tax liabilities:
  Intangible assets 
  Property, plant, and equipment 
  Other 

Total deferred tax liabilities 

Deferred tax assets:
  Post-employment and other employee benefits 
  Intangible assets 
  Other 

Total deferred tax assets 

Net deferred tax liability 

April 30,

2014 

2013

$1,028.7 
94.5 
19.4 

$1,019.6
94.4
9.4

$1,142.6 

$1,123.4

$  103.3 
7.6 
29.8 

$  116.3
5.4
39.2

$  140.7 

$  160.9

$1,001.9 

$  962.5

Deferred tax assets at April 30, 2014, include $0.7 of state tax credit carryforwards that begin to expire in 2018.

Deferred income taxes have not been provided on approximately $244.8 of undistributed earnings of foreign subsidiaries since 
these amounts are considered to be permanently reinvested. Any additional taxes payable on the earnings of foreign subsidiaries, 
if remitted, would be partially offset by domestic tax deductions or tax credits for foreign taxes paid. It is not practical to estimate 
the amount of additional taxes that might be payable on such undistributed earnings.

Our unrecognized tax benefits as of April 30, 2014, 2013, and 2012, were $29.1, $29.7, and $24.0, respectively. Of the unrecognized 
tax benefits, $19.5, $20.6, and $16.4 would affect the effective tax rate, if recognized, as of April 30, 2014, 2013, and 2012, respectively. 
Our accrual for tax-related net interest and penalties totaled $2.0 as of April 30, 2014 and 2013, and $1.7 as of April 30, 2012. 
Interest charged to earnings totaled $0.1, $0.3, and $0.1 during 2014, 2013, and 2012, respectively.

Within the next 12 months, it is reasonably possible that we could decrease our unrecognized tax benefits by an estimated $0.5, 
primarily as a result of the expiration of statute of limitation periods.

A reconciliation of our unrecognized tax benefits is as follows:

Balance at May 1, 
Increases:
  Current year tax positions 
  Prior year tax positions 
  Foreign currency translation 
Decreases:
  Prior year tax positions 
  Settlement with tax authorities 
  Expiration of statute of limitations periods 

Balance at April 30, 

2014 
$29.7 

2013 
$24.0 

2012
$20.3

5.1 
0.1 
— 

1.6 
1.5 
2.7 

4.8 
2.5 
— 

0.2 
1.0 
0.4 

3.6
2.1
0.2

—
0.3
1.9

$29.1 

$29.7 

$24.0

66  The J. M. Smucker Company    

2014 Annual Report  67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NOTE 14

ACCUMULATED OTHER COMPREHENSIVE LOSS

CONDENSED CONSOLIDATING STATEMENTS OF  
COMPREHENSIVE INCOME 

Year Ended April 30, 2014

On May 1, 2013, we adopted FASB ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive 
Income. In accordance with ASU 2013-02, the components of accumulated other comprehensive loss, including the reclassification 
adjustments for items that are reclassified from accumulated other comprehensive loss to net income, are shown below.

Balance at May 1, 2011 
  Reclassification adjustments 
  Current period (charge) credit 
  Income tax benefit (expense) 

Balance at April 30, 2012 
  Reclassification adjustments 
  Current period (charge) credit 
  Income tax expense 

Balance at April 30, 2013 
  Reclassification adjustments 
  Current period (charge) credit 
  Income tax (expense) benefit 

Balance at April 30, 2014 

Foreign 
Currency 
Translation 
Adjustment 

Pension 
and Other 
Postretirement 
Liabilities (A) 

Unrealized 
Gain on 
Available-for- 
Sale Securities (B) 

Unrealized Gain 
(Loss) on Cash 
Flow Hedging 
Derivatives (C) 

Accumulated 
Other 
Comprehensive 
Loss

$  81.8 
— 
(14.8) 
— 

$  67.0 
— 
(5.5) 
— 

$  61.5 
— 
(29.8) 
— 

$ 31.7 

$   (86.0) 
11.2 
(84.3) 
24.8 

$ (134.3) 
20.4 
(16.5) 
(1.0) 

$ (131.4) 
13.3 
31.4 
(15.3) 

$(102.0) 

$  1.8 
— 
1.1 
(0.4) 

$  2.5 
— 
3.1 
(1.1) 

$  4.5 
(3.7) 
1.9 
0.7 

$  3.4 

$     6.0 
(1.6) 
(38.0) 
14.4 

$ (19.2) 
40.1 
(27.5) 
(4.6) 

$ (11.2) 
20.9 
21.0 
(15.4) 

$  15.3 

$ 

   3.6
9.6
(136.0)
38.8

$    (84.0)
60.5
(46.4)
(6.7)

$    (76.6)
30.5
24.5
(30.0)

$ (51.6)

(A)  Amortization of net losses was reclassified from accumulated other comprehensive loss to selling, distribution, and administrative expenses.

(B)  The gain on the sale of marketable securities was reclassified from accumulated other comprehensive loss to net other income at April 30, 2014.

(C)  Of the total reclassification adjustments from accumulated other comprehensive loss, $20.3 and $39.6 of expense and $1.9 of income was reclassified to cost of products sold 
related to commodity derivatives and $0.6, $0.5, and $0.3 was reclassified to interest expense related to the interest rate swap at April 30, 2014, 2013, and 2012, respectively.

 NOTE 15

GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

Our 3.50 percent Senior Notes due October 15, 2021, are fully and unconditionally guaranteed, on a joint and several basis, by  
J.M. Smucker LLC and The Folgers Coffee Company (the “subsidiary guarantors”), which are 100 percent wholly-owned subsidiaries 
of the Company. A subsidiary guarantor will be released from its obligations under the indenture governing the notes (a) if we 
 exercise our legal or covenant defeasance option or if our obligations under the indenture are discharged in accordance with the 
terms of the indenture or (b) upon delivery of an officer’s certificate to the trustee that the subsidiary guarantor does not guarantee 
our obligations under any of our other primary senior indebtedness and that any other guarantees of such primary senior 
 indebtedness of the subsidiary guarantor have been released other than through discharges as a result of payment by such 
 guarantor on such guarantees.

Condensed consolidating financial statements for the Company, the subsidiary guarantors, and the other subsidiaries of the 
Company that are not guaranteeing the indebtedness under the 3.50 percent Senior Notes (the “non-guarantor subsidiaries”) are 
provided below. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, 
including transactions with our 100 percent wholly-owned subsidiary guarantors and non-guarantor subsidiaries. We have 
accounted for investments in subsidiaries using the equity method.

Net sales 
Cost of products sold 

Gross Profit 
Selling, distribution, and administrative  
  expenses, restructuring, and merger and  
  integration costs 
Amortization 
Other operating (income) expense – net 

Operating Income 
Interest (expense) income – net 
Other income (expense) – net 
Equity in net earnings of subsidiaries 

Income Before Income Taxes 
Income taxes 

The J. M. Smucker 
Company (Parent) 

Subsidiary  Non-Guarantor 
Subsidiaries 
Guarantors 

$3,162.8 
2,573.6 

589.2 

$1,278.8 
1,166.0 

112.8 

$6,601.3 
5,268.5 

1,332.8 

Eliminations 

Consolidated

$(5,432.3) 
(5,428.5) 

(3.8) 

$5,610.6
3,579.6

2,031.0

197.1 
4.2 
(1.3) 

389.2 
(80.8) 
10.8 
345.1 

664.3 
99.1 

47.5 
— 
0.9 

64.4 
1.2 
— 
141.4 

207.0 
0.4 

769.8 
94.7 
(0.9) 

469.2 
(1.5) 
1.0 
64.4 

533.1 
185.0 

— 
— 
— 

(3.8) 
1.7 
(1.7) 
(550.9) 

(554.7) 
— 

Net Income 
Other comprehensive income, net of tax 

Comprehensive Income 

$  565.2 
25.0 

$  590.2 

$  206.6 
27.4 

$  234.0 

$  348.1 
6.0 

$  354.1 

$  (554.7) 
(33.4) 

$  (588.1) 

CONDENSED CONSOLIDATING STATEMENTS OF  
COMPREHENSIVE INCOME 

Year Ended April 30, 2013

The J. M. Smucker 
Company (Parent) 

Subsidiary  Non-Guarantor 
Subsidiaries 
Guarantors 

Eliminations 

Consolidated

$4,447.6 
3,957.3 

490.3 

$1,296.4 
1,190.6 

105.8 

$5,430.3 
4,015.0 

1,415.3 

$(5,276.6) 
(5,292.8) 

16.2 

$5,897.7
3,870.1

2,027.6

Net sales 
Cost of products sold 

Gross Profit 
Selling, distribution, and administrative  
  expenses, restructuring, merger and  
  integration costs, and other special  
  project costs 
Amortization 
Other operating (income) expense – net 

Operating Income 
Interest (expense) income – net 
Other income (expense) – net 
Equity in net earnings of subsidiaries 

Income Before Income Taxes 
Income taxes 

199.0 
4.8 
(2.7) 

289.2 
(94.4) 
0.7 
408.6 

604.1 
59.9 

42.9 
— 
(2.2) 

65.1 
1.2 
1.1 
156.7 

224.1 
0.4 

781.5 
92.0 
1.9 

539.9 
(0.2) 
(1.5) 
66.4 

604.6 
212.8 

— 
— 
— 

16.2 
— 
— 
(631.7) 

(615.5) 
— 

Net Income 
Other comprehensive income, net of tax 

Comprehensive Income 

$  544.2 
7.4 

$  551.6 

$  223.7 
9.0 

$  232.7 

$  391.8 
4.1 

$  395.9 

$  (615.5) 
(13.1) 

$  (628.6) 

1,014.4
98.9
(1.3)

919.0
(79.4)
10.1
—

849.7
284.5

$  565.2
25.0

$  590.2

1,023.4
96.8
(3.0)

910.4
(93.4)
0.3
—

817.3
273.1

$  544.2
7.4

$  551.6

68  The J. M. Smucker Company    

2014 Annual Report  69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATING STATEMENTS OF  
COMPREHENSIVE INCOME 

Year Ended April 30, 2012

Net sales 
Cost of products sold 

Gross Profit 
Selling, distribution, and administrative  
  expenses, restructuring, and merger  
  and integration costs 
Amortization and impairment charges 
Other operating (income) expense – net 

Operating Income 
Interest (expense) income – net 
Other income (expense) – net 
Equity in net earnings of subsidiaries 

Income Before Income Taxes 
Income taxes 

Net Income 
Other comprehensive loss, net of tax 

Comprehensive Income 

The J. M. Smucker 
Company (Parent) 

Subsidiary  Non-Guarantor 
Subsidiaries 
Guarantors 

$  4,302.7 
3,741.0 

561.7 

243.4 
11.2 
(1.3) 

308.4 
(80.7) 
1,404.4 
(1,095.0) 

537.1 
77.3 

$    459.8 
(87.7) 

$    372.1 

$1,547.8 
1,408.8 

139.0 

$3,822.4 
2,682.7 

1,139.7 

61.5 
— 
(1.3) 

78.8 
3.0 
0.4 
184.2 

266.4 
1.2 

660.3 
81.5 
11.6 

386.3 
(2.1) 
(3.6) 
79.2 

459.8 
163.0 

$  265.2 
(23.1) 

$  242.1 

$  296.8 
(49.8) 

$  247.0 

Eliminations 

Consolidated

$(4,147.1) 
(4,151.9) 

4.8 

$5,525.8
3,680.6

1,845.2

— 
— 
— 

4.8 
— 
(1,398.5) 
831.6 

(562.1) 
— 

$  (562.1) 
73.0 

$  (489.1) 

965.2
92.7
9.0

778.3
(79.8)
2.7
—

701.2
241.5

$  459.7
(87.6)

$  372.1

CONDENSED CONSOLIDATING BALANCE SHEETS 

April 30, 2014

The J. M. Smucker 
Company (Parent) 

Subsidiary  Non-Guarantor 
Subsidiaries 
Guarantors 

Eliminations 

Consolidated

ASSETS
Current Assets
Cash and cash equivalents 
Inventories 
Other current assets 

Total Current Assets 
Property, Plant, and Equipment – Net 
Investments in Subsidiaries 
Intercompany Receivable 
Other Noncurrent Assets
Goodwill 
Other intangible assets – net 
Other noncurrent assets 

Total Other Noncurrent Assets 

$     6.8 
— 
360.2 

367.0 
233.6 
8,367.6 
— 

1,082.0 
505.5 
70.4 

1,657.9 

$ 

  — 
173.3 
9.9 

183.2 
551.1 
4,063.3 
315.5 

— 
— 
11.1 

11.1 

$  146.7 
761.4 
94.6 

1,002.7 
480.9 
237.9 
1,132.2 

2,016.2 
2,518.8 
63.4 

4,598.4 

$ 

   — 
(3.7) 
(10.1) 

(13.8) 
— 
(12,668.8) 
(1,447.7) 

— 
— 
— 

— 

$  153.5
931.0
454.6

1,539.1
1,265.6
—
—

3,098.2
3,024.3
144.9

6,267.4

Total Assets 

$10,626.1 

$5,124.2 

$7,452.1 

$(14,130.3) 

$9,072.1

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities 
Noncurrent Liabilities
Long-term debt 
Deferred income taxes 
Intercompany payable 
Other noncurrent liabilities 

Total Noncurrent Liabilities 

Total Liabilities 

Total Shareholders’ Equity 

$   595.9 

$  103.8 

$  201.4 

$ 

(10.1) 

$     891.0

1,879.8 
107.6 
2,792.9 
220.3 

5,000.6 

5,596.5 

5,029.6 

— 
— 
— 
12.8 

12.8 

116.6 

5,007.6 

— 
913.1 
— 
17.9 

931.0 

1,132.4 

6,319.7 

— 
— 
(2,792.9) 
— 

(2,792.9) 

(2,803.0) 

(11,327.3) 

1,879.8
1,020.7
—
251.0

3,151.5

4,042.5

5,029.6

Total Liabilities and Shareholders’ Equity 

$10,626.1 

$5,124.2 

$7,452.1 

$(14,130.3) 

$9,072.1

70  The J. M. Smucker Company    

2014 Annual Report  71

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATING BALANCE SHEETS 

April 30, 2013

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS 

Year Ended April 30, 2014

ASSETS
Current Assets
Cash and cash equivalents 
Inventories 
Other current assets 

Total Current Assets 
Property, Plant, and Equipment – Net 
Investments in Subsidiaries 
Intercompany Receivable 
Other Noncurrent Assets
Goodwill 
Other intangible assets – net 
Other noncurrent assets 

Total Other Noncurrent Assets 

The J. M. Smucker 
Company (Parent) 

Subsidiary  Non-Guarantor 
Subsidiaries 
Guarantors 

Eliminations 

Consolidated

$   108.0 
— 
335.1 

443.1 
230.9 
7,950.9 
— 

1,082.0 
509.8 
72.0 

1,663.8 

$ 

    — 
225.9 
3.3 

229.2 
445.1 
3,856.6 
324.8 

— 
— 
13.7 

13.7 

$  148.4 
733.2 
69.6 

951.2 
466.5 
146.6 
956.0 

1,970.9 
2,579.6 
66.1 

4,616.6 

$ 

   — 
(13.6) 
(14.7) 

(28.3) 
— 
(11,954.1) 
(1,280.8) 

— 
— 
— 

— 

$  256.4
945.5
393.3

1,595.2
1,142.5
—
—

3,052.9
3,089.4
151.8

6,294.1

Total Assets 

$10,288.7 

$4,869.4 

$7,136.9 

$(13,263.2) 

$9,031.8

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities 
Noncurrent Liabilities
Long-term debt 
Deferred income taxes 
Intercompany payable 
Other noncurrent liabilities 

Total Noncurrent Liabilities 

Total Liabilities 

Total Shareholders’ Equity 

$   317.8 

$  104.9 

$  188.8 

$        (14.7) 

$  596.8

1,967.8 
97.5 
2,519.2 
237.6 

4,822.1 

5,139.9 

5,148.8 

— 
— 
— 
18.1 

18.1 

123.0 

4,746.4 

— 
889.7 
— 
75.5 

965.2 

1,154.0 

5,982.9 

— 
— 
(2,519.2) 
— 

(2,519.2) 

(2,533.9) 

(10,729.3) 

1,967.8
987.2
—
331.2

3,286.2

3,883.0

5,148.8

Total Liabilities and Shareholders’ Equity 

$10,288.7 

$4,869.4 

$7,136.9 

$(13,263.2) 

$9,031.8

The J. M. Smucker 
Company (Parent)  Guarantors 

Subsidiary  Non-Guarantor 

Subsidiaries  Eliminations 

Consolidated

Net Cash Provided by Operating Activities 

$   297.8 

$   168.5 

$  389.7 

$  — 

$  856.0

Investing Activities
Businesses acquired, net of cash acquired 
Additions to property, plant, and equipment 
Sales and maturities of marketable securities 
Proceeds from disposal of property, plant, and equipment 
Equity investments in subsidiaries 
Repayments from (disbursements of) intercompany loans 
Other – net 

Net Cash (Used for) Provided by Investing Activities 

Financing Activities
Revolving credit facility – net 
Repayments of long-term debt 
Quarterly dividends paid 
Purchase of treasury shares 
Proceeds from stock option exercises 
Investments in subsidiaries 
Intercompany payable 
Other – net 

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

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

— 
(31.1) 
10.0 
— 
(108.9) 
— 
(3.2) 

(133.2) 

248.4 
(50.0) 
(238.0) 
(508.5) 
0.5 
— 
273.7 
8.1 

(265.8) 
— 

(101.2) 
108.0 

— 
(163.2) 
— 
0.6 
(17.1) 
9.3 
0.2 

(170.2) 

— 
— 
— 
— 
— 
— 
— 
1.7 

1.7 
— 

— 
— 

(101.8) 
(85.2) 
— 
10.1 
— 
(283.0) 
(6.7) 

(466.6) 

— 
— 
— 
— 
— 
126.0 
— 
(37.7) 

88.3 
(13.1) 

(1.7) 
148.4 

— 
— 
— 
— 
126.0 
273.7 
— 

399.7 

— 
— 
— 
— 
— 
(126.0) 
(273.7) 
— 

(399.7) 
— 

— 
— 

(101.8)
(279.5)
10.0
10.7
—
—
(9.7)

(370.3)

248.4
(50.0)
(238.0)
(508.5)
0.5
—
—
(27.9)

(575.5)
(13.1)

(102.9)
256.4

Cash and Cash Equivalents at End of Year 

$     6.8 

$   

    — 

$  146.7 

$  — 

$  153.5

(  ) Denotes use of cash

72  The J. M. Smucker Company    

2014 Annual Report  73

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS 

Year Ended April 30, 2013

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS 

Year Ended April 30, 2012

The J. M. Smucker 
Company (Parent)  Guarantors 

Subsidiary  Non-Guarantor 

Subsidiaries  Eliminations 

Consolidated

The J. M. Smucker 
Company (Parent)  Guarantors 

Subsidiary  Non-Guarantor 

Subsidiaries  Eliminations 

Consolidated

Net Cash Provided by Operating Activities 

$   201.7 

$     46.4 

$   607.7 

$  — 

$   855.8

Net Cash Provided by (Used for) Operating Activities 

$    1,669.7 

$ 

  181.0 

$(1,119.8) 

$  — 

$  730.9

Investing Activities
Additions to property, plant, and equipment 
Proceeds from disposal of property, plant, and equipment 
Equity investments in subsidiaries 
Repayments from (disbursements of) intercompany loans 
Other – net 

Net Cash (Used for) Provided by Investing Activities 

Financing Activities
Repayments of long-term debt 
Quarterly dividends paid 
Purchase of treasury shares 
Proceeds from stock option exercises 
Investments in subsidiaries 
Intercompany payable 
Other – net 

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

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

(33.6) 
— 
(3.7) 
— 
(9.5) 

(46.8) 

(50.0) 
(222.8) 
(364.2) 
2.2 
9.9 
466.2 
3.5 

(155.2) 
— 

(0.3) 
108.3 

(103.1) 
0.1 
(174.2) 
227.4 
3.4 

(46.4) 

— 
— 
— 
— 
— 
— 
— 

— 
— 

— 
— 

(69.8) 
3.2 
— 
(693.6) 
23.7 

(736.5) 

— 
— 
— 
— 
168.0 
— 
(9.7) 

158.3 
(2.5) 

27.0 
121.4 

— 
— 
177.9 
466.2 
— 

644.1 

— 
— 
— 
— 
(177.9) 
(466.2) 
— 

(644.1) 
— 

— 
— 

(206.5)
3.3
—
—
17.6

(185.6)

(50.0)
(222.8)
(364.2)
2.2
—
—
(6.2)

(641.0)
(2.5)

26.7
229.7

Cash and Cash Equivalents at End of Year 

$  108.0 

$ 

  — 

$   148.4 

$  — 

$  256.4

(  ) Denotes use of cash

Investing Activities
Businesses acquired, net of cash acquired 
Additions to property, plant, and equipment 
Equity investment in affiliate 
Proceeds from divestiture 
Sales and maturities of marketable securities 
Proceeds from disposal of property, plant, and equipment 
Equity investments in subsidiaries 
(Disbursements of) Repayments from intercompany loans 
Other – net 

— 
(53.0) 
— 
— 
18.6 
0.2 
(2,985.2) 
— 
— 

— 
(133.6) 
— 
— 
— 
0.4 
— 
(3,720.2) 
(3.5) 

Net Cash (Used for) Provided by Investing Activities 

(3,019.4) 

(3,856.9) 

Financing Activities
Proceeds from long-term debt 
Quarterly dividends paid 
Purchase of treasury shares 
Proceeds from stock option exercises 
Investments in subsidiaries 
Intercompany payable 
Other – net 

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

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

748.6 
(213.7) 
(315.8) 
2.8 
— 
1,031.6 
(2.3) 

1,251.2 
— 

(98.5) 
206.8 

— 
— 
— 
— 
3,675.9 
— 
— 

3,675.9 
— 

— 
— 

(737.3) 
(87.6) 
(35.9) 
9.3 
— 
3.4 
(690.7) 
2,688.6 
(16.9) 

1,132.9 

— 
— 
— 
— 
— 
— 
— 

— 
(4.7) 

8.4 
113.0 

— 
— 
— 
— 
— 
— 
3,675.9 
1,031.6 
— 

4,707.5 

— 
— 
— 
— 
(3,675.9) 
(1,031.6) 
— 

(4,707.5) 
— 

— 
— 

(737.3)
(274.2)
(35.9)
9.3
18.6
4.0
—
—
(20.4)

(1,035.9)

748.6
(213.7)
(315.8)
2.8
—
—
(2.3)

219.6
(4.7)

(90.1)
319.8

Cash and Cash Equivalents at End of Year 

$  108.3 

$ 

     — 

$     121.4 

$  — 

$  229.7

(  ) Denotes use of cash

74  The J. M. Smucker Company    

2014 Annual Report  75

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker CompanyNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NOTE 16

COMMON SHARES

Voting: The Amended Articles of Incorporation (the “Articles”) provide that each holder of a common share outstanding is entitled 
to one vote on each matter submitted to a vote of the shareholders, except for the following specific matters:
•  any matter that relates to or would result in the dissolution or liquidation of the Company;
•  the adoption of any amendment to the Articles or Amended Regulations, or the adoption of amended Articles, other than the 

adoption of any amendment or amended Articles that increases the number of votes to which holders of our common shares are 
entitled or expands the matters to which time-phased voting applies;

•  any proposal or other action to be taken by our shareholders relating to the Rights Agreement, dated as of May 20, 2009, between 

the Company and Computershare Trust Company, N.A. or any successor plan;

•  any matter relating to any stock option plan, stock purchase plan, executive compensation plan, executive benefit plan, or other 

similar plan, arrangement, or agreement;

•  the adoption of any agreement or plan of or for the merger, consolidation, or majority share acquisition of us or any of our 

 subsidiaries with or into any other person, whether domestic or foreign, corporate or noncorporate, or the authorization of the 
lease, sale, exchange, transfer, or other disposition of all, or substantially all, of our assets;

•  any matter submitted to our shareholders pursuant to Article Fifth (which relates to procedures applicable to certain business 

combinations) or Article Seventh (which relates to procedures applicable to certain proposed acquisitions of specified percentages 
of our outstanding common shares) of the Articles, as they may be further amended, or any issuance of our common shares for 
which shareholder approval is required by applicable stock exchange rules; and

•  any matter relating to the issuance of our common shares or the repurchase of our common shares that the Board of Directors 

(the “Board”) determines is required or appropriate to be submitted to our shareholders under the Ohio Revised Code or applicable 
stock exchange rules.

On the matters listed above, common shares are entitled to 10 votes per share if they meet the requirements set forth in the Articles. 
Common shares which would be entitled to 10 votes per share must meet one of the following criteria:
•  common shares for which there has not been a change in beneficial ownership in the past four years; or
•  common shares received through our various equity plans which have not been sold or otherwise transferred.

In the event of a change in beneficial ownership, the new owner of that common share will be entitled to only one vote with respect 
to that share on all matters until four years pass without a further change in beneficial ownership of the share.

Shareholders’ Rights Plan: Pursuant to a Shareholders’ Rights Plan adopted by the Board on May 20, 2009, one share purchase 
right is associated with each of our outstanding common shares.

Under the plan, the rights will initially trade together with our common shares and will not be exercisable. In the absence of  
further action by the directors, the rights generally will become exercisable and allow the holder to acquire our common shares at 
a discounted price if a person or group acquires 10 percent or more of our outstanding common shares. Rights held by persons 
who exceed the applicable threshold will be void. Shares held by members of the Smucker family are not subject to the threshold.  
If exercisable, each right entitles the shareholder to buy one common share at a discounted price. Under certain circumstances,  
the rights will entitle the holder to buy shares in an acquiring entity at a discounted price.

The plan also includes an exchange option. In general, if the rights become exercisable, the directors may, at their option, effect an 
exchange of part or all of the rights, other than rights that have become void, for common shares. Under this option, we would issue 
one common share for each right, in each case subject to adjustment in certain circumstances.

Our directors may, at their option, redeem all rights for $0.001 per right, generally at any time prior to the rights becoming 
 exercisable. The rights will expire June 3, 2019, unless earlier redeemed, exchanged, or amended by the directors.

Repurchase Programs: We repurchased 4.9 million common shares for $495.0 in 2014, 4.0 million common shares for $359.4 in 
2013, and 4.1 million common shares for $305.3 in 2012.

At April 30, 2014, approximately 5.0 million common shares were available for repurchase as a result of the Board’s most recent 
authorization in April 2014.

DIRECTORS AND OFFICERS
The J. M. Smucker Company

  DIRECTORS

Vincent C. Byrd
President and Chief Operating Officer
The J. M. Smucker Company

R. Douglas Cowan A
Director and Retired Chairman and  
Chief Executive Officer
The Davey Tree Expert Company
Kent, Ohio

Kathryn W. Dindo A, E
Retired Vice President and  
Chief Risk Officer
FirstEnergy Corp.
Akron, Ohio

Paul J. Dolan E
Chairman and Chief Executive Officer
Cleveland Indians
Cleveland, Ohio

Robert B. Heisler, Jr. A
Retired Chairman of the Board
KeyBank
Cleveland, Ohio

Nancy Lopez Knight G
Founder
Nancy Lopez Golf Company
Auburn, Alabama

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

Gary A. Oatey G
Executive Chairman 
Oatey Co.
Cleveland, Ohio

Alex Shumate G
Managing Partner, North America
Squire Patton Boggs (US) LLP
Columbus, Ohio

Mark T. Smucker
President, U.S. Retail Coffee
The J. M. Smucker Company

Richard K. Smucker
Chief Executive Officer
The J. M. Smucker Company

Timothy P. Smucker
Chairman of the Board
The J. M. Smucker Company

Paul Smucker Wagstaff
President, U.S. Retail Consumer Foods
The J. M. Smucker Company

A  Audit Committee Member; E  Executive Compensation Committee Member; G  Nominating and Corporate Governance Committee Member

  EXECUTIVE OFFICERS

Timothy P. Smucker
Chairman of the Board

Richard K. Smucker
Chief Executive Officer

Dennis J. Armstrong
Senior Vice President, Logistics and 
Operations Support

Mark R. Belgya
Senior Vice President and  
Chief Financial Officer

James A. Brown
Vice President, Customer Development

Vincent C. Byrd
President and Chief Operating Officer

John W. Denman
Vice President, Controller and  
Chief Accounting Officer

Barry C. Dunaway
Senior Vice President and  
Chief Administrative Officer

Tamara J. Fynan
Vice President, Marketing Services

Kevin G. Jackson 
Vice President and  
General Manager, Foodservice

Jeannette L. Knudsen
Vice President, General Counsel and 
Corporate Secretary

David J. Lemmon
Vice President and  
Managing Director, Canada

John F. Mayer
Vice President, U.S. Retail Sales

Steven Oakland
President, International, Foodservice, 
and Natural Foods

Christopher P. Resweber
Senior Vice President,  
Corporate Communications and  
Public Affairs

Julia L. Sabin
Vice President, Industry and  
Government Affairs

Mark T. Smucker
President, U.S. Retail Coffee

Paul Smucker Wagstaff
President, U.S. Retail Consumer Foods 

76  The J. M. Smucker Company    

2014 Annual Report  77

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe J. M. Smucker Company   
OUR LOCATIONS
The J. M. Smucker Company

CORPORATE OFFICE
Orrville, Ohio

DOMESTIC MANUFACTURING LOCATIONS
Chico, California
Cincinnati, Ohio
El Paso, Texas
Grandview, Washington
Harahan, Louisiana 
Havre de Grace, Maryland
Lexington, Kentucky

Livermore, California
Memphis, Tennessee
Miami, Florida
New Bethlehem, Pennsylvania
New Orleans, Louisiana (3)
Orrville, Ohio
Oxnard, California

Ripon, Wisconsin
Scottsville, Kentucky
Seneca, Missouri
Suffolk, Virginia 
Toledo, Ohio

INTERNATIONAL MANUFACTURING LOCATION
Sherbrooke, Quebec, Canada

78  The J. M. Smucker Company    

SHAREHOLDER INFORMATION

CORPORATE OFFICE
The J. M. Smucker Company
One Strawberry Lane
Orrville, OH 44667
Telephone: (330) 682-3000 

STOCK LISTING
Our common shares are listed on the New York Stock Exchange – 
ticker symbol SJM.

CORPORATE WEBSITE
To learn more about The J. M. Smucker Company, visit jmsmucker.com.

ANNUAL MEETING
The annual meeting will be held at 11:00 a.m. Eastern Time, August 13, 2014, 
in the Fisher Auditorium at the Ohio Agricultural Research and Development 
Center, 1680 Madison Avenue, Wooster, Ohio 44691.

CORPORATE NEWS AND REPORTS
Corporate news releases, annual reports, and Securities and Exchange  
Commission filings, including Forms 10-K, 10-Q, and 8-K, are available free  
of charge on our website, jmsmucker.com/investor-relations. They are also  
available without cost to shareholders who submit a written request to:

The J. M. Smucker Company
Attention: Corporate Secretary
One Strawberry Lane
Orrville, OH 44667

CERTIFICATIONS 
Our Chief Executive Officer has certified to the New York Stock Exchange that he 
is not aware of any violation by the Company of the New York Stock Exchange’s 
corporate governance listing standards. We have also filed with the Securities and 
Exchange Commission certain certifications relating to the quality of our public 
disclosures. These certifications are filed as exhibits to our Annual Report on 
Form 10-K. 

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.  
Please reference “Forward-Looking Statements” located on page 34 in the 
“Management’s Discussion and Analysis” section. 

INDEPENDENT REGISTERED PUBLIC  
ACCOUNTING FIRM
Ernst & Young LLP
Akron, Ohio

DIVIDENDS
Our Board of Directors typically declares a cash dividend each quarter.  
Dividends are generally payable on the first business day of March, June,  
September, and December. The record date is approximately two weeks  
before the payment date. Our dividend disbursement agent is  
Computershare Investor Services, LLC.

SHAREHOLDER SERVICES
Our transfer agent and registrar, Computershare Investor Services, LLC,  
is responsible for assisting registered shareholders with a variety of  
matters including: 

•  Shareholder investment program (CIPSM) 
– Direct purchase of our common shares 
– Dividend reinvestment 
– Automatic monthly cash investments

•  Book-entry share ownership
•  Share transfer matters (including name changes, gifting,  

and inheritances)

•  Direct deposit of dividend payments 
•  Nonreceipt of dividend checks
•  Lost share certificates
•  Changes of address
•   Online shareholder account access
•  Form 1099 income inquiries (including requests for duplicate copies)

Shareholders may contact Shareholder Services at the corporate offices  
regarding other shareholder inquiries.  

TRANSFER AGENT AND REGISTRAR
Computershare
P.O. Box 30170
College Station, TX 77842
Telephone: (800) 456-1169
Telephone outside U.S., Canada, and Puerto Rico: (312) 360-5254
Website: computershare.com/investor

The J. M. Smucker Company is the owner of all trademarks, except the following, which are used under license: Pillsbury ®, the Barrelhead logo and the 
Doughboy character are trademarks of The Pillsbury Company, LLC; Carnation® is a trademark of Société des Produits Nestlé S.A.; Dunkin’ Donuts ® is a 
registered trademark of DD IP Holder, LLC; Sweet’N Low ® and Sugar In The Raw ® are registered trademarks of CPC Intellectual Property, Inc. Borden ® 
and Elsie are also trademarks used under license.

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One Strawberry Lane / Orrville, Ohio 44667 / 330.682.3000
jmsmucker.com

On front cover: 2014 Oil painting by Matteo Caloiaro, Sarasota, Florida