Is there any way someone can help me with writing a report and write it for me by answering the flowing questions:

You should prepare report with those objectives in mindhow well does the published financial information found in these statements achieve these goals?What are the strengths and weaknesses of the information found in the financial statements?What is the value of this information to the various groups of stakeholders (stockholders, bankers, management, customers, employees, etc)?In addition, because this is a global program, you should also focus on the differences that may exist if International Financial Reporting Standards had been used to prepare these financial statements instead of US GAAP.

Please let me know if it can be done and how much tutor credits would it cost? I need it ASAP, like today or tomorrow if possible. Thanks.

Here is the report that the information has to come from. I have a pdf attachment that I can give if that can help.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

24 THE J. M. SMUCKER COMPANY

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

COMPANY BACKGROUND

For 120 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 consumer food and

beverage products and pet food and pet snacks in North America.

In consumer foods and beverages, our brands include Smucker's,

Folgers, Jif , Dunkin' Donuts, Crisco, Pillsbury, R.W.

Knudsen Family, Hungry Jack, Caf Bustelo, Martha White,

truRoots, Sahale Snacks, Robin Hood, and Bick's. In pet food

and pet snacks, our brands include Meow Mix, Milk-Bone,

Kibbles 'n Bits, Natural Balance, and 9Lives.

We have three reportable segments: U.S. Retail Coffee, U.S. Retail

Consumer Foods, and U.S. Retail Pet Foods. The U.S. retail

market segments in total comprised over 85 percent of net sales in

2017 and represent a major portion of our strategic focus - the sale

of branded food and beverage products with leadership positions to

consumers through retail outlets in North America. In the U.S.

retail market segments, our products are sold primarily to food

retailers, food wholesalers, drug stores, club stores, mass

merchandisers, discount and dollar stores, military commissaries,

natural foods stores and distributors, pet specialty stores, and

online retailers. Within our segment results, International and

Foodservice represents a combination of the strategic business

areas not included in the U.S. retail market segments. The products

included in International and Foodservice are distributed

domestically and in foreign countries through retail channels and

foodservice distributors and operators (e.g., restaurants, lodging,

schools and universities, health care operators).

STRATEGIC OVERVIEW

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 five generations of family leadership, having had only six chief

executive officers in 120 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 a portfolio of food and

beverage brands that combines number one and leading brands

with emerging, on-trend brands to drive balanced, long-term

growth, primarily in North America.

Our strategic long-term growth objectives are to increase net sales

by 3 percent and earnings per share, measured on a non-GAAP

basis, by 8 percent annually on average. We expect organic growth,

including new products, to drive much of our top-line growth,

while the contribution from acquisitions will vary from year

to year.

Net sales has increased at a compound annual growth rate of

6 percent over the past five years, driven by the acquisition of Big

Heart Pet Brands ("Big Heart"), while income per diluted share

excluding non-GAAP adjustments ("adjusted earnings per share")

has increased at a rate of 8 percent over the same period. Our non-

GAAP adjustments include amortization expense and impairment

charges related to intangible assets, merger and integration and

restructuring costs, and unallocated gains and losses on commodity

and foreign currency exchange derivatives, which reflect the

changes in fair value of these derivative contracts.

During 2015, we acquired Big Heart, a leading producer,

distributor, and marketer of premium-quality, branded pet food and

pet snacks in the U.S. This transformational acquisition provided

an immediate and significant presence in the large and growing pet

food and pet snacks categories, increased our center-of-the-store

presence with consumers and retailers, and added new customers

in the pet specialty channel.

Net cash provided by operating activities has increased at a

compound annual growth rate of 8 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 shareholders through the payment of

dividends and share repurchases, while also maintaining our focus

on debt repayment.

RESULTS OF OPERATIONS

All comparisons presented in this discussion and analysis are to the

corresponding period of the prior year, unless otherwise noted. On

March 23, 2015, we completed the acquisition of Big Heart, and on

September 2, 2014, we completed the acquisition of Sahale

Snacks, Inc. ("Sahale"). These transactions were accounted for as

business combinations, and the operations of each business are

included in our consolidated financial statements from the date of

acquisition. Due to the timing of the closing of the Big Heart

transaction during the fourth quarter of 2015, approximately

11 months of incremental Big Heart operations are included in

2016 results.

The acquisition of Big Heart was a cash and stock transaction

valued at $5.9 billion, which included the issuance of 17.9 million

shares of our common stock to the shareholders of Blue

Acquisition Group, Inc., Big Heart's parent company. After the

closing of the transaction, we had approximately 120.0 million

common shares outstanding. We assumed $2.6 billion in debt that

we repaid at closing and paid an additional $1.2 billion in cash, net

of a working capital adjustment. As part of the transaction, new

debt of $5.5 billion was borrowed, as discussed in Note 8: Debt

and Financing Arrangements.

Total one-time costs related to the Big Heart acquisition are

anticipated to be approximately $290.0 and are expected to be

incurred through 2018. These costs primarily consist of employeerelated

costs, outside service and consulting costs, and other costs

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

2017 ANNUAL REPORT 25

related to the acquisition. We have incurred cumulative costs of

$245.3 related to the integration of Big Heart, including $64.1

in 2017.

We anticipate net realized synergies related to the Big Heart

acquisition of approximately $200.0 annually by the end of 2018.

To date, we have realized $159.0 of that goal, reflecting $122.0 of

synergies in 2017 that were incremental to those achieved in 2016.

On December 31, 2015, we sold our U.S. canned milk brands and

operations to Eagle Family Foods Group LLC, a subsidiary of

funds affiliated with Kelso & Company. The transaction included

canned milk products that were primarily sold in U.S. retail and

foodservice channels under the Eagle Brand and Magnolia

brands, along with other branded and private label trade names,

with annual net sales of approximately $200.0. Our manufacturing

facilities in El Paso, Texas, and Seneca, Missouri, were included in

the transaction, but our canned milk business in Canada was

excluded. The operating results for this business were primarily

included in the U.S. Retail Consumer Foods segment prior to the

sale. We received proceeds from the divestiture of $193.7, which

were net of transaction costs and a working capital adjustment, and

recognized a pre-tax gain of $25.3.

Year Ended April 30,

2017 2016 2015

2017

% Increase

(Decrease)

2016

% Increase

(Decrease)

Net sales $7,392.3 $7,811.2 $5,692.7 (5)% 37%

Gross profit $2,835.3 $2,967.8 $1,968.7 (4) 51

% of net sales 38.4% 38.0% 34.6%

Operating income $1,031.5 $1,145.3 $ 772.0 (10) 48

% of net sales 14.0% 14.7% 13.6%

Net income:

Net income $ 592.3 $ 688.7 $ 344.9 (14) 100

Net income per common share - assuming dilution $ 5.10 $ 5.76 $ 3.33 (11) 73

Adjusted gross profit (A) $2,868.2 $2,968.0 $1,999.4 (3) 48

% of net sales 38.8% 38.0% 35.1%

Adjusted operating income (A) $1,481.8 $1,489.8 $ 970.2 (1) 54

% of net sales 20.0% 19.1% 17.0%

Adjusted income: (A)

Income $ 895.9 $ 931.3 $ 475.6 (4) 96

Earnings per share - assuming dilution $ 7.72 $ 7.79 $ 4.59 (1) 70

(A) We use non-GAAP financial measures to evaluate our performance. Refer to "Non-GAAP Financial Measures" in this discussion and analysis for a

reconciliation to the comparable GAAP financial measure.

Summary of 2017

Net sales decreased 5 percent in 2017, driven by the noncomparable

impact from the U.S. canned milk business, which

was divested during the third quarter of 2016, as well as lower net

price realization and unfavorable volume/mix in the current year.

Operating income decreased 10 percent, primarily due to the

impact of noncash impairment charges of $133.2 recognized

during 2017 and the net sales decline. For additional information

on the impairment charges, see Note 7: Goodwill and Other

Intangible Assets. Additionally, prior year results benefited from

the recognition of a $25.3 pre-tax gain on the divestiture of the

U.S. canned milk business and the related profits prior to the

divestiture. Selling, distribution, and administrative ("SD&A")

expenses and merger and integration costs were lower in 2017 as

compared to 2016. Operating income excluding non-GAAP

adjustments ("adjusted operating income") decreased 1 percent in

2017 and excluded the impact of the impairment charges and the

reduction in merger and integration costs. Net income per diluted

share decreased 11 percent in 2017, while adjusted earnings per

share decreased 1 percent. Both 2017 per share measures reflect

the benefit of a decrease in weighted-average common shares

outstanding as a result of our share repurchase activities during the

fourth quarters of 2017 and 2016. However, this benefit was more

than offset by the impact of an increase in the effective tax rate in

2017 as compared to the prior year.

Summary of 2016

Net sales in 2016 increased 37 percent, driven by the Big Heart

acquisition. Approximately 11 months of incremental Big Heart

net sales, totaling $2.1 billion, was realized in 2016. Operating

income increased 48 percent, driven by the incremental Big Heart

business, partially offset by an increase in merger and integration

costs. Adjusted operating income increased 54 percent. Net income

per diluted share increased 73 percent in 2016, while adjusted

earnings per share increased 70 percent. In comparison to the prior

year, both 2016 per share measures reflect a benefit from the onetime

recognition in 2015 of $173.3 of other debt costs incurred in

connection with the Big Heart acquisition and the related

refinancing activities, a decrease in our effective tax rate in 2016,

and the gain on the divestiture of the U.S. canned milk business.

These items were mostly offset by the impact of the issuance of

17.9 million shares of our common stock and an increase in

interest expense due to new borrowings in the fourth quarter of

2015 to finance the Big Heart acquisition.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

26 THE J. M. SMUCKER COMPANY

Net Sales

2017 Compared to 2016

Year Ended April 30,

2017 2016

Increase

(Decrease) %

Net sales $7,392.3 $7,811.2 $(418.9) (5)%

Divestiture (153.5) 153.5 2

Foreign currency

exchange 3.8 3.8

Net sales excluding

divestiture and

foreign currency

exchange (A) $7,396.1 $7,657.7 $(261.6) (3)%

Amounts may not add due to rounding.

(A) Net sales excluding divestiture and foreign currency exchange is a non-

GAAP measure used to evaluate performance internally. This measure

provides useful information to investors because it enables comparison

of results on a year-over-year basis. Net sales excluding divestiture and

foreign currency exchange in the table above excludes the impact of

the U.S. canned milk business, which was divested on December 31,

2015, and foreign currency exchange.

The net sales decrease in 2017 was partially due to the impact of

the divested U.S. canned milk business. Excluding the noncomparable

divested business and foreign currency exchange, net

sales decreased 3 percent, driven by the U.S. Retail Coffee

segment, specifically the Folgers brand, and the U.S. Retail Pet

Foods segment. The decline reflected lower net price realization

and unfavorable volume/mix, which contributed somewhat equally

to lower net sales.

2016 Compared to 2015

Year Ended April 30,

2016 2015

Increase

(Decrease) %

Net sales $ 7,811.2 $5,692.7 $ 2,118.5 37%

Acquisitions (2,067.2) (2,067.2) (36)

Divestiture (47.6) 47.6 1

Foreign currency

exchange 59.8 59.8 1

Net sales excluding

acquisitions,

divestiture, and

foreign currency

exchange (A) $ 5,803.8 $5,645.1 $ 158.7 3%

Amounts may not add due to rounding.

(A) Net sales excluding acquisitions, divestiture, and foreign currency

exchange is a non-GAAP measure used to evaluate performance

internally. This measure provides useful information to investors

because it enables comparison of results on a year-over-year basis.

Net sales excluding acquisitions, divestiture, and foreign currency

exchange in the table above excludes the incremental impact of the

Big Heart and Sahale acquisitions, the noncomparable impact of the

U.S. canned milk divestiture, and foreign currency exchange.

The net sales increase in 2016 was driven by incremental Big

Heart net sales of $2.1 billion that year. Net sales excluding

acquisitions, divestiture, and foreign currency exchange increased

3 percent, primarily due to favorable volume/mix, which

contributed 4 percentage points to the net sales increase. The

favorable volume/mix was driven by Dunkin' Donuts K-Cup

pods, which were introduced at the beginning of 2016. Net price

realization was lower, contributing a 1 percentage point decline to

the net sales change.

Operating Income

The following table presents the components of operating income

as a percentage of net sales.

Year Ended April 30,

2017 2016 2015

Gross profit 38.4% 38.0% 34.6%

Selling, distribution, and

administrative expenses:

Marketing 3.4% 3.5% 3.1%

Advertising 2.3 2.2 1.9

Selling 3.4 4.0 3.7

Distribution 3.3 2.9 2.9

General and administrative 6.5 6.7 6.6

Total selling, distribution, and

administrative expenses 18.8% 19.3% 18.1%

Amortization 2.8 2.7 1.9

Impairment charges 1.8

Other special project costs 1.0 1.7 1.0

Other operating income - net (0.1) (0.4)

Operating income 14.0% 14.7% 13.6%

Amounts may not add due to rounding.

2017 Compared to 2016

Gross profit decreased $132.5, or 4 percent, in 2017, primarily

reflecting unfavorable volume/mix and the loss of U.S. canned

milk profits. The impact of lower net price realization was offset

by a reduction in commodity and manufacturing overhead costs

and incremental synergy realization related to the Big Heart

acquisition. Gross profit excluding non-GAAP adjustments

("adjusted gross profit") decreased $99.8, or 3 percent, over the

same period and excluded a $39.2 unfavorable change in the

impact of unallocated derivative gains and losses as compared to

the prior year.

SD&A expenses decreased $119.6, or 8 percent, in 2017, primarily

driven by incremental synergy realization. Additionally, Big Heart

integration costs decreased by $81.1, or 56 percent.

Operating income decreased $113.8, or 10 percent, in 2017,

reflecting noncash impairment charges of $133.2 related to certain

indefinite-lived trademarks, primarily within the U.S. Retail Pet

Foods segment. Additionally, prior year results benefited from the

recognition of the $25.3 gain related to the divestiture of the U.S.

canned milk business. Adjusted operating income decreased

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

2017 ANNUAL REPORT 27

1 percent, with the primary differences from GAAP results being

the exclusion of the impairment charges, merger and integration

costs, and the $39.2 unfavorable change in the impact of

unallocated derivative gains and losses as compared to the

prior year.

2016 Compared to 2015

Gross profit increased $999.1, or 51 percent, in 2016, primarily

due to the incremental Big Heart business. Excluding the

incremental Big Heart business, gross profit was still higher, driven

by Dunkin' Donuts K-Cup pods and the net benefit of a reduction

in commodity costs, primarily attributed to green coffee, which

was partially offset by lower net pricing. Adjusted gross profit

increased $968.6, or 48 percent, over the same period and excluded

a $36.5 favorable change in the impact of unallocated derivative

gains and losses as compared to the prior year.

SD&A expenses increased $479.0, or 46 percent, in 2016,

primarily driven by the incremental Big Heart business and higher

selling expense due to royalties related to Dunkin' Donuts

K-Cup pods.

Amortization expense increased $98.7 in 2016, primarily due to

the addition of Big Heart finite-lived intangible assets.

Operating income increased $373.3, or 48 percent, in 2016,

reflecting the incremental Big Heart business and the $25.3 gain on

the divestiture of the U.S. canned milk business, partially offset by

an increase in Big Heart integration costs of $109.2. Adjusted

operating income increased $519.6, or 54 percent, over the same

period and excluded the impact of merger and integration costs and

the $36.5 favorable change in the impact of unallocated derivative

gains and losses as compared to the prior year.

Interest Expense and Other Debt Costs

Net interest expense decreased $8.0 in 2017, primarily due to a

lower outstanding balance on our senior unsecured delayed-draw

Term Loan Credit Agreement ("Term Loan") in 2017 as compared

to 2016.

Net interest expense increased $91.2 in 2016, primarily due to the

impact of the incremental interest related to the debt issued to

partially finance the Big Heart acquisition. In 2015, in addition to

interest expense, we incurred $173.3 of other debt costs related to

the Big Heart acquisition. The majority of these costs were makewhole

payments incurred when we prepaid our outstanding

privately placed Senior Notes of $1.1 billion.

Income Taxes

Income taxes decreased 1 percent in 2017, due to a decrease in

income before income taxes, mostly offset by the impact of a

higher effective tax rate in 2017 of 32.6 percent. The 2016

effective tax rate of 29.6 percent was impacted by the recognition

of a $50.5 noncash deferred tax benefit related to the integration of

Big Heart into the Company, partially offset by the impact of

higher deferred state income tax expense, which was a result of

state tax law changes.

Income taxes increased 62 percent in 2016, due to an increase

in income before income taxes, partially offset by the impact of

a lower effective tax rate in 2016. The effective tax rate of

29.6 percent in 2016 was significantly lower than the rate of

34.1 percent in 2015, mainly due to the recognition of the

$50.5 noncash deferred tax benefit related to the integration of

Big Heart into the Company.

Restructuring Activities

An organization optimization program was approved by the Board

of Directors during the fourth quarter of 2016 as part of our

ongoing efforts to reduce costs and optimize the organization. As

part of this program, we exited two leased facilities in Livermore,

California, and consolidated all ancient grains and pasta production

into our facility in Chico, California, during 2017. Additionally, we

will discontinue the production of coffee at our Harahan,

Louisiana, facility and consolidate all related coffee production

into one of our facilities in New Orleans, Louisiana, which we

expect to complete by December 31, 2017. We have also identified

additional opportunities to further optimize the overall

organization. Upon completion of these initiatives, the organization

optimization program will result in total headcount reductions of

approximately 275 full-time positions.

Total restructuring costs related to the program are expected to be

approximately $40.0, of which the majority represents employeerelated

costs, and the remainder primarily consists of site

preparation, equipment relocation, and production start-up costs at

the impacted facilities. We have incurred cumulative restructuring

costs of $19.9, virtually all of which were incurred during 2017.

The remaining costs are anticipated to be incurred during 2018.

We expect to achieve approximately $50.0 of annual cost

reductions related to our organization optimization program,

mainly during 2018. We plan to invest these savings in

our businesses.

Cost Management Program

In addition to our organization optimization program, we

announced a separate cost management program during the fourth

quarter of 2017, which is comprised of several cost reduction

initiatives, including zero-based budgeting, SKU rationalization,

and revenue growth management. We expect to realize

approximately $200.0 of cost reductions annually by the end of

2020 as a result of these initiatives.

Commodities Overview

The raw materials we use are primarily commodities, agriculturalbased

products, and packaging materials. The most significant of

these materials, based on annual spend, are green coffee, plastic,

grains, peanuts, and edible oils. Green coffee, certain grains, and

certain edible oils 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 the impact of price volatility for

these commodities.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

28 THE J. M. SMUCKER COMPANY

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, plant disease, investor

speculation, and political and economic conditions in the

source countries.

We frequently enter into long-term contracts to purchase plastic

packaging, which is 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.

We source grains, peanuts, and edible oils mainly from North

America. The grains we purchase are mainly wheat and corn. 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

commodity. The edible oils we purchase are mainly soybean and

canola. The price of grains, peanuts, and edible oils 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, the prices of edible oils and certain

grains, such as corn, have been impacted by the biofuels industry's

demand for these commodities.

In 2017, our overall commodity costs were slightly lower than

in 2016, primarily due to lower costs for green coffee and

protein meals.

Segment Results

We have three reportable segments: U.S. Retail Coffee, U.S. Retail

Consumer Foods, and U.S. Retail Pet Foods. Within our segment

results, International and Foodservice represents a combination of

the strategic business areas not included in the U.S. retail market

segments. The U.S. Retail Coffee segment primarily includes the

domestic sales of Folgers, Dunkin' Donuts, and Caf Bustelo

branded coffee; the U.S. Retail Consumer Foods segment primarily

includes domestic sales of Jif, Smucker's, Crisco, and Pillsbury

branded products; and the U.S. Retail Pet Foods segment primarily

includes domestic sales of Meow Mix, Milk-Bone, Natural

Balance, Kibbles 'n Bits, 9Lives, Pup-Peroni, and Nature's

Recipe branded products. International and Foodservice is

comprised of products distributed domestically and in foreign

countries through retail channels and foodservice distributors and

operators (e.g., restaurants, lodging, schools and universities,

health care operators).

Effective May 1, 2016, amortization expense and impairment

charges related to intangible assets is reported outside of segment

operating results. Prior year segment results have been modified to

conform to the new presentation. For additional information on the

change, see Note 5: Reportable Segments.

Year Ended April 30,

2017 2016 2015

2017

% Increase

(Decrease)

2016

% Increase

(Decrease)

Net sales:

U.S. Retail Coffee $2,108.6 $2,239.2 $2,076.1 (6)% 8%

U.S. Retail Consumer Foods 2,085.4 2,269.7 2,330.8 (8) (3)

U.S. Retail Pet Foods 2,135.9 2,250.4 239.1 (5) n/m

International and Foodservice 1,062.4 1,051.9 1,046.7 1

Segment profit (loss):

U.S. Retail Coffee $ 682.4 $ 722.6 $ 623.2 (6)% 16%

U.S. Retail Consumer Foods 458.2 467.5 466.0 (2)

U.S. Retail Pet Foods 481.0 493.9 (6.4) (3) n/m

International and Foodservice 185.1 179.0 161.6 3 11

Segment profit (loss) margin:

U.S. Retail Coffee 32.4% 32.3% 30.0%

U.S. Retail Consumer Foods 22.0 20.6 20.0

U.S. Retail Pet Foods 22.5 21.9 (2.7)

International and Foodservice 17.4 17.0 15.4

U.S. Retail Coffee

The U.S. Retail Coffee segment net sales decreased $130.6 in

2017, primarily due to lower net price realization, which was

mainly attributed to the net impact of pricing actions taken since

the beginning of 2016, and unfavorable volume/mix, which

reduced net sales by 3 percentage points. The unfavorable volume/

mix was driven by the Folgers brand and was partially offset by

favorable volume/mix for the Caf Bustelo and Dunkin'

Donuts brands. Segment profit decreased $40.2, primarily due to

the unfavorable volume/mix as well as the impact of lower net

price realization, which was partially offset by lower commodity

and manufacturing overhead costs and incremental

synergy realization.

The U.S. Retail Coffee segment net sales increased $163.1 in 2016,

reflecting favorable volume/mix, which contributed 9 percentage

points of growth, driven by Dunkin' Donuts K-Cup pods. Within

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

2017 ANNUAL REPORT 29

the Folgers brand, growth in mainstream roast and ground

offerings was offset by a decline in Folgers K-Cup pods. Segment

profit increased $99.4, reflecting the benefit of lower

green coffee costs, which was partially offset by lower net price

realization, and the contribution from Dunkin' Donuts

K-Cup pods.

U.S. Retail Consumer Foods

The U.S. Retail Consumer Foods segment net sales decreased

$184.3 in 2017, primarily reflecting noncomparable net sales of

$138.9 in the prior year related to the divested U.S. canned milk

business. Excluding the impact of the divestiture, net sales

decreased 2 percent, which was entirely driven by unfavorable

volume/mix, primarily related to Smucker's fruit spreads and

the Jif and truRoots brands, partially offset by growth in Smucker's

Uncrustables frozen sandwiches. Segment profit decreased $9.3;

however, excluding the $25.3 gain related to the U.S. canned milk

divestiture and canned milk profits from the prior year, segment

profit increased 10 percent, as lower manufacturing overhead costs

and incremental synergy realization more than offset an increase in

marketing expense.

The U.S. Retail Consumer Foods segment net sales decreased

$61.1 in 2016, primarily due to lower net price realization and the

impact of $41.0 of noncomparable net sales in the prior year

related to the divested U.S. canned milk business, slightly offset by

favorable volume/mix. The lower net price realization was

primarily related to the Jif, Crisco, and Pillsbury brands. The

favorable volume/mix, which contributed 1 percentage point of

growth to segment net sales, was led by Smucker's Uncrustables

frozen sandwiches and Jif peanut butter, slightly offset by Pillsbury

baking mixes and frosting. Volume for Smucker's Uncrustables

increased 26 percent. Segment profit was flat in 2016, compared to

2015, as overall lower commodity costs, primarily for milk, oils,

and peanuts, and the $25.3 gain related to the divestiture were

offset by lower net price realization and higher manufacturing

overhead costs.

U.S. Retail Pet Foods

The U.S. Retail Pet Foods segment net sales decreased $114.5 in

2017, primarily due to unfavorable volume/mix, which reduced net

sales by 3 percentage points. This was driven by the Kibbles'n

Bits, Meow Mix, Natural Balance, and 9Lives brands. Net price

realization was also lower, driven by the Natural Balance and

Milk-Bone brands. Segment profit decreased $12.9, as the impact

of unfavorable volume/mix, lower net price realization, and higher

distribution costs more than offset the impact of lower commodity

costs, incremental synergy realization, and a decrease in marketing

expense. Although not reflected in segment profit, impairment

charges of $128.5 were recognized in 2017 related to certain

indefinite-lived trademarks within the U.S. Retail Pet

Foods segment.

The U.S. Retail Pet Foods segment contributed net sales of

$2.3 billion in 2016, representing low single-digit percent growth

compared to the results of the business for the prior year, the

majority of which were reported under previous ownership. The

net sales increase was driven by distribution gains for the Natural

Balance brand and growth in Milk-Bone, which more than offset

declines in Kibbles'n Bits and Meow Mix. The segment contributed

segment profit of $493.9 in 2016, impacted by lower commodity

costs and favorable volume/mix as compared to the prior year,

partially offset by lower net price realization, reflecting

incremental promotional activities.

International and Foodservice

International and Foodservice net sales increased $10.5 in 2017, as

favorable volume/mix, which contributed 4 percentage points of

growth to net sales, more than offset the impacts of lower net price

realization and $14.6 of noncomparable net sales in the prior year

related to the divested U.S. canned milk business. Segment profit

increased $6.1, primarily due to favorable volume/mix,

incremental synergy realization, and a $3.8 pre-tax gain on the sale

of our equity interest in Guilin Seamild Biologic Technology

Development Co., Ltd. ("Seamild"), which more than offset the

unfavorable net impact of lower prices and lower costs and the loss

of profits from the divested canned milk business.

International and Foodservice net sales increased $5.2 in 2016, as

incremental Big Heart net sales of $36.9 and favorable volume/

mix, which contributed 3 percentage points of growth to net sales,

were mostly offset by the $59.8 unfavorable impact of foreign

currency exchange. Segment profit increased $17.4, reflecting

favorable volume/mix in Foodservice, which was partially offset

by the unfavorable net impact of lower prices and lower costs. In

Canada, the benefit of higher net price realization, decreased

marketing expense, and favorable volume/mix offset the impact of

a weaker Canadian dollar compared to the prior year.

LIQUIDITY AND CAPITAL RESOURCES

Our principal source of funds is cash generated from operations,

supplemented by borrowings against our commercial paper

program and revolving credit facility. Total cash and cash

equivalents increased to $166.8 at April 30, 2017, compared to

$109.8 at April 30, 2016.

Within the U.S. Retail Coffee and U.S. Retail Consumer Foods

segments, we generally 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. In these businesses, 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. In contrast, the U.S. Retail Pet

Foods segment does not experience significant seasonality, and

thus our working capital requirements became less seasonal overall

subsequent to the Big Heart acquisition. Cash provided by

operating activities in the second half of 2017 was $683.7,

compared to $375.3 provided through the first half of 2017.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

30 THE J. M. SMUCKER COMPANY

The following table presents selected cash flow information.

Year Ended April 30,

2017 2016 2015

Net cash provided by operating

activities $1,059.0 $ 1,461.0 $ 739.1

Net cash (used for) provided

by investing activities (189.7) 21.7 (1,595.7)

Net cash (used for) provided

by financing activities (806.1) (1,498.9) 857.3

Net cash provided by operating

activities $1,059.0 $ 1,461.0 $ 739.1

Additions to property, plant,

and equipment (192.4) (201.4) (247.7)

Free cash flow (A) $ 866.6 $ 1,259.6 $ 491.4

(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 decreased $402.0 in 2017

as a result of a significant decrease in working capital in the prior

year, while working capital at the end of the current year was

comparable to beginning of the year levels. The decrease in

working capital in 2016 was driven by a reduction in inventory

levels, which resulted from a working capital reduction initiative,

and the timing of tax payments, including the realization of a

$49.6 one-time tax refund in the first quarter of the prior year.

Cash provided by operating activities increased $721.9 in 2016,

mainly due to an increase in net income adjusted for noncash

items, notably depreciation and amortization, and a decrease in

working capital, driven by a decrease in inventory and the timing

of certain accrued liabilities. During 2016, we established a

working capital reduction target of $200.0, the majority of which

was achieved in 2016. This initiative, as well as the impact of

lower green coffee costs, as compared to 2015, drove the reduction

in inventory.

Cash used for investing activities in 2017 consisted primarily

of $192.4 in capital expenditures and a $38.4 increase in our

derivative cash margin account balances, partially offset by

$40.6 in proceeds from the sale of our investment in Seamild. In

2016, cash provided by investing activities consisted primarily of

$193.7 in proceeds from the divestiture of the U.S. canned milk

business and a $34.8 reduction in our derivative cash margin

account balances, mostly offset by $201.4 in capital

expenditures. In 2015, cash used for investing activities consisted

primarily of $1.3 billion related to the acquisitions of Big Heart

and Sahale and $247.7 in capital expenditures.

Cash used for financing activities in 2017 consisted primarily of

the purchase of treasury shares for $437.6, mainly representing the

repurchase of 3.0 million common shares available under Board of

Directors' ("Board") authorizations as further described below,

dividend payments of $339.3, and prepayments on the Term Loan

of $200.0, partially offset by a $170.0 increase in short-term

borrowings during the year. In 2016, cash used for financing

activities consisted primarily of $800.0 in prepayments on the

Term Loan, the purchase of treasury shares for $441.1, mainly

representing the repurchase of 3.4 million common shares

available under Board authorizations, and dividend payments of

$316.6. In 2015, cash provided by financing activities consisted

primarily of $5.4 billion in long-term debt proceeds, which were

partially offset by $4.2 billion in long-term debt repayments and

dividend payments of $254.0.

The following table presents our capital structure.

April 30,

2017 2016

Current portion of long-term debt $ 499.0 $

Short-term borrowings 454.0 284.0

Long-term debt, less current portion 4,445.5 5,146.0

Total debt $ 5,398.5 $ 5,430.0

Shareholders' equity 6,850.2 7,008.5

Total capital $12,248.7 $12,438.5

We have available a $1.5 billion revolving credit facility with a

group of 11 banks that matures in September 2018. Additionally,

under our commercial paper program, we can issue short-term,

unsecured commercial paper not to exceed $1.0 billion at any time.

The commercial paper program is backed by our revolving credit

facility and reduces what we can borrow under the revolving credit

facility by the amount of commercial paper outstanding. Along

with the revolving credit facility, commercial paper is used as a

continuing source of short-term financing for general corporate

purposes. As of April 30, 2017, we had $454.0 of short-term

borrowings outstanding, all of which were issued under our

commercial paper program, at a weighted-average interest rate of

1.15 percent.

As of April 30, 2017, total debt was comparable to the balance as

of April 30, 2016. Although we prepaid $200.0 on the Term Loan

during 2017, the reduction was offset by a $170.0 increase in

short-term borrowings outstanding.

We are in compliance with all of our debt covenants. For additional

information on our long-term debt, sources of liquidity, and debt

covenants, see Note 8: Debt and Financing Arrangements.

On February 22, 2017, we entered into a 10b5-1 trading plan (the

"Plan") to facilitate the repurchase of up to 3.0 million common

shares under the Board's authorizations. Purchases under the Plan

commenced on February 27, 2017, and concluded on

March 27, 2017, and were transacted by a broker based upon the

guidelines and parameters of the Plan. During 2017, we

repurchased 3.0 million common shares under the Plan for $418.1.

At April 30, 2017, approximately 3.6 million common shares were

remaining available for repurchase pursuant to the Board's

authorizations. There is no guarantee as to the exact number of

shares that may be repurchased or when such purchases may occur.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

2017 ANNUAL REPORT 31

During the third quarter of 2017, we announced plans to build

a Smucker's Uncrustables frozen sandwich manufacturing facility

in Longmont, Colorado. Construction of the facility is scheduled to

begin in June 2017, and production is expected to begin in calendar

year 2019. The new facility will help meet growing demand

for Smucker's Uncrustables frozen sandwiches and will

complement our existing facility in Scottsville, Kentucky. The

Longmont facility will be constructed in two phases, with a total

potential investment of $340.0. Phase 1 will include up to an initial

$200.0 investment to construct and equip the new facility, with an

opportunity to invest an additional $140.0 for phase 2 expansion,

dependent on product demand.

The following table presents certain cash requirements related

to 2018 investing and financing activities based on our

current expectations.

Projection

Year Ending

April 30, 2018

Debt obligation principal payment $500.0

Dividend payments - based on current rates and

common shares outstanding 350.0

Capital expenditures 310.0

Interest payments 170.0

On May 30, 2017, we announced a definitive agreement to acquire

the Wesson oil brand from Conagra Brands, Inc. ("Conagra"). The

all-cash transaction, which is expected to be funded primarily with

debt, is valued at approximately $285.0. We anticipate the addition

of the Wesson brand will add annual net sales of approximately

$230.0.

Following the close of the transaction, Conagra will continue to

manufacture products sold under the Wesson brand and provide

certain other transition services for up to one year. After the

transition period, we expect to consolidate Wesson production into

our existing oils manufacturing facility in Cincinnati, Ohio.

The closing of the transaction is subject to the fulfillment of

customary closing conditions, including receipt of regulatory

approvals. We expect to realize synergies of approximately

$20.0 annually within two years after the closing.

Absent any additional material acquisitions or other significant

investments, we believe that cash on hand, combined with cash

provided by operations, borrowings available under our

commercial paper program and revolving credit facility, and access

to capital markets, will be sufficient to meet our cash requirements

for the next 12 months.

As of April 30, 2017, total cash and cash equivalents of $158.5

was held by our international subsidiaries. We do not intend to

repatriate these funds to meet our cash requirements. 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.

NON-GAAP MEASURES

We use non-GAAP financial measures including: net sales

excluding acquisitions, divestiture, and foreign currency exchange;

adjusted gross profit, operating income, income, and earnings per

share; earnings before interest, taxes, depreciation, amortization,

and impairment charges related to intangible assets ("EBITDA (as

adjusted)"); and free cash flow, as key measures for purposes of

evaluating performance internally. We believe that investors'

understanding of our performance is enhanced by disclosing these

performance measures. Furthermore, these non-GAAP financial

measures are used by management in preparation of the annual

budget and for the monthly analyses of our operating results. The

Board of Directors also utilizes the adjusted earnings per share and

free cash flow measures as components for measuring performance

for incentive compensation purposes.

Non-GAAP measures exclude certain items affecting

comparability, that can significantly affect the year-over-year

assessment of operating results, which include merger and

integration and restructuring costs ("special project costs") and

unallocated gains and losses on commodity and foreign currency

exchange derivatives ("unallocated derivative gains and losses").

The special project costs in the following table relate to specific

merger and integration and restructuring projects, and the

unallocated derivative gains and losses reflect the changes in fair

value of our commodity and foreign currency exchange contracts.

Beginning May 1, 2016, we redefined our non-GAAP measures to

also exclude amortization expense and impairment charges related

to intangible assets, and have modified prior year results to

conform to the new definition. We believe that excluding

amortization expense and impairment charges related to intangible

assets in our non-GAAP measures is more reflective of our

operating performance and the way in which we manage our

business, as these items are noncash expenses and can be

significantly affected by the timing and size of our acquisitions.

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.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

32 THE J. M. SMUCKER COMPANY

The following table reconciles certain non-GAAP financial measures to the comparable GAAP financial measure. See page 26 for a

reconciliation of net sales adjusted for certain noncomparable items to the comparable GAAP financial measure.

Year Ended April 30,

2017 2016 2015 2014 2013

Gross profit reconciliation:

Gross profit $2,835.3 $2,967.8 $1,968.7 $2,031.0 $2,027.6

Unallocated derivative losses (gains) 27.2 (12.0) 24.5 (5.3) (6.6)

Cost of products sold - special project costs 5.7 12.2 6.2 9.4 11.5

Adjusted gross profit $2,868.2 $2,968.0 $1,999.4 $2,035.1 $2,032.5

Operating income reconciliation:

Operating income $1,031.5 $1,145.3 $ 772.0 $ 919.0 $ 910.4

Amortization 207.3 208.4 109.7 98.9 96.8

Impairment charges 133.2 1.2

Unallocated derivative losses (gains) 27.2 (12.0) 24.5 (5.3) (6.6)

Cost of products sold - special project costs 5.7 12.2 6.2 9.4 11.5

Other special project costs 76.9 135.9 56.6 25.6 49.5

Adjusted operating income $1,481.8 $1,489.8 $ 970.2 $1,047.6 $1,061.6

Net income reconciliation:

Net income $ 592.3 $ 688.7 $ 344.9 $ 565.2 $ 544.2

Income taxes 286.1 289.2 178.1 284.5 273.1

Amortization 207.3 208.4 109.7 98.9 96.8

Impairment charges 133.2 1.2

Unallocated derivative losses (gains) 27.2 (12.0) 24.5 (5.3) (6.6)

Cost of products sold - special project costs 5.7 12.2 6.2 9.4 11.5

Other special project costs 76.9 135.9 56.6 25.6 49.5

Adjusted income before income taxes $1,328.7 $1,322.4 $ 721.2 $ 978.3 $ 968.5

Income taxes, as adjusted (A) 432.8 391.1 245.6 327.5 323.6

Adjusted income $ 895.9 $ 931.3 $ 475.6 $ 650.8 $ 644.9

Weighted-average shares - assuming dilution 116,120,780 119,477,312 103,697,261 104,346,587 108,851,153

Adjusted earnings per share - assuming dilution $ 7.72 $ 7.79 $ 4.59 $ 6.24 $ 5.92

EBITDA (as adjusted) reconciliation:

Net income $ 592.3 $ 688.7 $ 344.9 $ 565.2 $ 544.2

Income taxes 286.1 289.2 178.1 284.5 273.1

Interest expense - net 163.1 171.1 79.9 79.4 93.4

Depreciation 211.7 221.7 157.5 157.5 154.1

Amortization 207.3 208.4 109.7 98.9 96.8

Impairment charges 133.2 1.2

EBITDA (as adjusted) $1,593.7 $1,579.1 $ 871.3 $1,185.5 $1,161.6

Free cash flow reconciliation:

Net cash provided by operating activities $1,059.0 $1,461.0 $ 739.1 $ 863.3 $ 858.7

Additions to property, plant, and equipment (192.4) (201.4) (247.7) (279.5) (206.5)

Free cash flow $ 866.6 $1,259.6 $ 491.4 $ 583.8 $ 652.2

(A) Income taxes, as adjusted is based upon our GAAP effective tax rate and reflects the impact of items excluded from GAAP net income to derive

adjusted income.

OFF-BALANCE SHEET ARRANGEMENTS

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, and are not material to our

results of operations, financial condition, or cash flows.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

2017 ANNUAL REPORT 33

CONTRACTUAL OBLIGATIONS

The following table summarizes our contractual obligations by fiscal year at April 30, 2017.

Total 2018 2019-2020 2021-2022

2023 and

beyond

Long-term debt obligations, including current portion (A) $4,950.0 $ 500.0 $1,050.0 $1,150.0 $2,250.0

Interest payments (B) 1,784.3 163.1 312.2 241.1 1,067.9

Operating lease obligations (C) 156.6 33.9 49.6 32.0 41.1

Purchase obligations (D) 1,147.6 1,050.8 96.6 0.2

Other liabilities (E) 290.0 16.3 37.1 15.3 221.3

Total $8,328.5 $1,764.1 $1,545.5 $1,438.6 $3,580.3

(A) Excludes the impact of offering discounts, make-whole payments, and debt issuance costs.

(B) Includes interest payments on our long-term debt, which reflects estimated payments for our variable-rate debt based on the current interest rate outlook.

(C) Includes the minimum rental commitments under non-cancelable operating leases.

(D) Includes agreements that are enforceable and legally bind us to purchase goods or services, including certain obligations related to normal, ongoing

purchase obligations in which we have guaranteed payment to ensure availability of raw materials, packaging supplies, and co-pack arrangements. We

expect to receive consideration for these purchase obligations in the form of materials and services. These purchase obligations do not represent the

entire anticipated purchases in the future, but represent only those items for which we are contractually obligated.

(E) Mainly consists of projected commitments associated with our defined benefit pension and other postretirement benefit plans. The liability for

unrecognized tax benefits and tax-related net interest of $44.5 under Financial Accounting Standards Board Accounting Standards Codification 740,

Income Taxes, is excluded, 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 policies 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; title and risk of loss have

transferred to the customer; there is no further significant

obligation to assist in the resale of the product; and collectibility is

reasonably assured. Our products are shipped with FOB

destination terms, with the exception of certain export customers

and those customers that elect to pick up.

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. During

2017, 2016, and 2015, subsequent period adjustments

approximated less than 2 percent of both consolidated pre-tax

income and cash provided by operating activities. However, as

total promotional expenditures, including amounts classified as a

reduction of sales, represented 33 percent of net sales in 2017, the

possibility exists that reported results could be different 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 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, unless

MANAGEMENT'S DISCUSSION AND ANALYSIS

The J. M. Smucker Company

34 THE J. M. SMUCKER COMPANY

such changes are determined to be an adjustment to goodwill

within the allowable measurement period under the acquisition

method of accounting.

The future tax benefit arising from the net deductible temporary

differences and tax carryforwards is $227.3 and $252.9 at

April 30, 2017 and 2016, 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, other than goodwill and

other 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 impairment 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, 2017.

Goodwill and Other Indefinite-Lived Intangible Assets:

A significant portion of our assets is goodwill and other intangible

assets, the majority of which are not amortized but are reviewed at

least annually for impairment and more often if indicators of

impairment exist. At April 30, 2017, the carrying value of goodwill

and other intangible assets totaled $12.2 billion, compared to total

assets of $15.6 billion and total shareholders' equity of

$6.9 billion. If the carrying value of these assets exceeds the

current estimated fair value, the asset is considered impaired and

this would result in a noncash charge to earnings. Any such

impairment charge would reduce earnings and could be material.

Events and conditions that could result in impairment include a

sustained drop in the market price of our common shares,

increased competition or loss of market share, obsolescence,

product claims that result in a significant loss of sales or

profitability over the product life, deterioration in macroeconomic

conditions, or declining financial performance in comparison to

projected results.

To test for goodwill impairment, we estimate the fair value of each

of our 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 weightedaverage

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, 2017, goodwill totaled $6.1 billion. Goodwill is

substantially concentrated within the U.S. Retail Coffee, U.S.

Retail Pet Foods, and U.S. Retail Consumer Foods segments.

During 2017, no goodwill impairment was recognized as a result

of the evaluations performed throughout the year. As of April 30,

2017, the estimated fair value of each of our seven reporting units

was substantially in excess of its carrying value, with the exception

of the Pet Foods reporting unit, for which its fair value exceeded

its carrying value by approximately 6 percent. A sensitivity

analysis was performed for the Pet Foods reporting unit, assuming

a hypothetical 50-basis-point decrease in the expected long-term

growth rate or a hypothetical 50-basis-point increase in the

weighted-average cost of capital, and both scenarios independently

yielded an estimated fair value for the Pet Foods reporting unit at

or slightly below carrying value