THE J. M. SMUCKER COMPANY STATEMENTS OF CONSOLIDATED INCOME Year Ended April 30, Dollars in million..cxcept share data) 2019 2018 2017 Net sales S 7.838.0 S 7,357.1 S 7.392.3 Cost of products sold 4,922.3 4,521.0 4,557.0 Gross Profit 2,915.7 2,836.1 2,835.3 Selling, distribution, and administrative expenses 1,508,6 1,362.9 1.379.6 Amortization 240.3 206.8 207.3 Goodwill impairment charges 97.9 145.0 Other intangible assets impairment charges 1072 31.9 133.2 Other special project costs IA) 64.1 45.4 76.9 Other operating expense (income)-net (31.0) 0.1 Operating Income 928.6 1.044.0 1,042.6 Interest expense - net (207.9) (1741) (163.1) Other income (expense) - net (19.1) (8.9) (1.1) Income Before Income Taxes 701.6 861.0 878.4 Income tax expense (benefit) 1872 (477.6) 286.1 Net Income S 514.4 S 1,338.6 S 592.3 Famings per common share: Net Income S 4.52 S 11.79 $ 5.11 Net Income - Assuming Dilution S 4.52 S 11.78 S 5.10 (A) Other special project costs includes integration and restructuring costs. For more information, see Note 3: Integration and Restructuring Costs See notes to consolidated financial statements THE J. M. SMUCKER COMPANY CONSOLIDATED BALANCE SHEETS April 2019 2013 S 1013 S 503.8 192.6 385.6 590,8 319.5 9103 109.8 1.6252 542.1 3123 854,4 1224 1.555.0 122.1 903.2 2,185.0 3218 3,532.1 (1.619.7 1.912.4 120.1 812.6 2,111.5 2121 3,256,3 (15272 1.729.1 6,310,9 5.942.2 6,7188 5.9165 144,0 158.4 13,173.7 12,017 S 16-7113 S 15:3012 Dalles in millions ASSETS Current Assets Cash and cash equivalents Trade receivables less allowance for doubtful accounts Invento Finished products Rew materials Total Inventory Othc current assets Total Current Assets Property, Plant, and Equipment Land and land improvements Buildings and fixtures Machinery and equipment Construction in progress Gross Property. Plant, and Equipment Accumulated depreciation Total Property. Plant, and Equipment Other Noncurrent Assets Goodwill Other intangible assets.net Other noncurrent assets Total Other Noncurrent Assets Total Assets LIABILITIES AND SHAREHOLDERS' EQUITY Current Labilities Accounts payable Accrued compensation Accrued trade marketing and merchandising Dividends payable Current portion of long-term debt Short-term borrowings Other current liabilities Total Current Liabilities Noncurrent Liabilities Long-term debt, less current portion 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 - 200,000,000 shares, outstanding - 113,742,296 at April 30, 2019, and 113,572.840 at April 30, 2018 (net of 32.755,434 and 32,924,890 treasury shares, respectively), at stated value Additional capital Retained income Accumulated other comprehensive income closs) Total Shareholders' Equity Total Liabilities and Shareholders' Equity S 512.1 79.8 101.6 88.6 5910 S 85.0 142.7 96.7 798 5 426.0 2016 2.341.5 144.0 1072 1.033.8 4.688.0 4,6863 139.1 650 1.3986 1103 6,399,3 8.740.8 61.0 1,3772 1051 6.3763 7.410.1 28.9 28.9 5,735,8 5.739.7 2.367.6 2.2392 MISS 7,9705 7,8911 513 THE J. M. SMUCKER COMPANY STATEMENTS OF CONSOLIDATED CASH FLOWS Year Ended April 10. 2019 2017 S 514.4 $1,338.6 S 5923 211.7 207.3 206.3 206,8 145.0 31.9 15.4 133.2 22.0 206.0 240.3 97.9 1072 20.7 (27.7) (93.5) 45 1.2 (293) (803.4) 6,6 3.7 (39.6) (79.4) 4.4 0.4 (28.7) (Dallas in million Operating Activities Net income Adjustments to reconcile net income to net cash provided by (used for) operations: Depreciation Amortization Goodwill impairment charges Other intangible assets impairment charges Share-based compensation expense Gain on divestiture Deferred income tax expense (benefit) Loss on disposal of assets-net Other noncash adjustments -net Defined benefit pension contributions Changes in assets and liabilities, net of effect from acquisition and divestiture: Trade receivables Inventories Other current assets Accounts payable Accrued liabilities Income and other taxes Othernet Net Cash Provided by (Used for) Operating Activities Investing Activities Business acquired, net of cash acquired Additions to property, plant, and equipment Proceeds from divestiture Proceeds from sale of investment Proceeds from disposal of property, plant, and equipment Othernet Net Cash Provided by (Used for) Investing Activities Financing Activities Short-term borrowings (rgpayments)-net Proceeds from long-term debt Repayments of long-term debt Quarterly dividends paid Purchase of treasury shares Othernet Net Cash Provided by (Used for) Financing Activities Effect of exchange rate changes on cash Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and Cash Equivalents at End of Year (53.0) (5.3) 13.3 43.7 66.7 $1.8 (177) 1.141.2 54.7 54.0 (5.3) 19.0 20.3 (28.7) (75) 1,218.0 8.9 (10.4) 8.9 2.1 (39.8) 7.9 182 1.059.0 (1.903.0) (359.8) 3695 (321.9) (192.4 1.1 (32.0) (1.9242) 13.4 30.9 (277.6) 40.6 0.5 (38.4) (189.7) 170.0 282.0 1.500.0 (700.0) (377.9) (5.4) 03 699,0 (310.0) 7996 (1,050.3) (3503) (7.0) (4.0) (9220) 7.4 258 166.8 1926 S (2000) (339.3) (437.6) 0.8 (806,1 (913) 1926 1013 S $7,0 109.8 166.8 () Denotes use of cash 1. What are the dates of Smucker's fiscal year? (Hint: you can determine this by looking at the financial statements.) 2. Using horizontal analysis, compute Smucker's percentage change in net sales from 2018 to 2019. Was this a positive or negative trend compared to the prior year's percentage change in net sales? (Hint: you will also need to compute the percentage change in net sales from 2017 to 2018 to determine if the trend is positive or negative.) 3. What was Smucker's 2019 profit margin? Was this an improvement over the company's 2018 profit margin? 4. What was Smucker's times-interest-earned ratio for 2019? Did the company improve its ability to pay interest on its long term debt in 2019 when compared to 2018? (Hint: it's OK to use net interest expense in your computation.) What was Smucker's return on total assets for 2019? 5 . 6. What was Smucker's debt ratio for 2019? THE J. M. SMUCKER COMPANY STATEMENTS OF CONSOLIDATED INCOME THE J. M. SMUCKER COMPANY CONSOLIDATED BALANCE SHEETS April 3, 2018 2010 Dallas in linea ASSETS $ 101.3 $ 1926 503.8 590,8 319.5 910.3 109.8 1.625.2 5421 3123 8544 122.4 1,5550 Year Ended April 30 2019 2017 Net sales S 7,838.0 $ 7,357.1 $ 7,392.3 Cost of products sold 4.9223 4.521.0 4,557,0 Gross Profit 2.915.7 2.836.1 2,825.3 Selling, distribution, and administrative expenses 1.508 1.3629 1,379,6 Amortization 2068 207.3 Goodwill impairment charges 979 145.0 Other intangible assets impairment charges 1072 31.9 133.2 Other special project costs 76.9 Other operating expense (income) - net (31.01 0.1 Operating Income 9286 1,0440 1,042,6 Interest expense - Det ( (174.1) 1165.1) Other income (expense) - net (19.1) 18.9) (1.1) Income Before Income Taxes 70L.6 861.0 878.4 Income tax expense (benett) 1872 (477.6) 286.1 Net Income S 5144 S 1.3386 5 92.1 Earings per common share: Net Income S 452 $ 1.79$ 5.11 Net Income - Assuming Dilution S4.52 11.78 $ 5.10 (A) Other special project costs includes integration and restructuring costs. For more information, se Note 3: Integration and Restructuring Costs. Current Assets Cash and cash equivalents Trade receivables, less allowance for doubtful accounts Inventories Finished products Raw materials Total Inventory Other current Total Current Assets Property. Plant, and Equipment Land and land improvement Buildings and fixtures Machinery and equipment Construction in progress Gross Property, Plant, and Equipment Accumulated depreciation Total Property, Plant, and Equipment Other Noncurrent Assets Goodwill Other umgible assets-net Other current assets Total Other Yoncurrent Assets Total Assets 122.1 1201 903.2 $12.6 2,1850 2,111 S 321.8 212.1 3,532.1 3.2563 11.619.7 1.527.2 1,912.4 1,729.1 6,310,9 5,9422 6,718.8 5.9165 1440 158.4 13,173.7 12,017.1 $ 16,711.) S 15,3012 $ 591.0 S SI21 85.0 798 142.7 101.6 96.7 798.5 426.0 144.0 2016 107? 2141.5 1,033.8 4,6863 4,688 THE J. M. SMUCKER COMPANY STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME Year Ended April 10 2019 2019 2017 Net income S 314.4 S 1,338,6 S 392.3 Oiber comprehensive income loss (X Foreign currency translation adjustments 26.6 (29.9) ( Cash flow bedging derivative activity, net of tax (375) 11.4 Pension and other postretirement benefit plans activity, net of tax 19.0) 14.3 34.1 Available for sale securities activity, net of tax 0.5 (1.2) 0.4 Total Other Comprehensive Income (Loss) (65.1) 5.0 Comprehensive Income $ 449.3 $ 1.580 3 5 597.3 Sectes to comedia di stare (19.1) LLABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable Accrued compensation Accrued trade marketing and merchandising Dividends payable Current portion of long-term deht Short-term borrowing Other current liabilities Total Current Liabilities Noncurrent Liabilities Long-term dobri, less current portion Defined benefit pensions Other postretirement benefits Detered income taxes Other moncurrent liabilities Total Non current liabilities Total Liabilities Shareholders' Equity Serul preferred shares-ne pur value: Authorized - 6,000,000 shares, outstanding-none Common shares o per values Autborized - 300,000,000 shares; outstanding - 113,742.296 8 April 30,2019, and 113,572,840 at April 30, 2018 (net of 32,755,434 and 32,924.890 treasury shares, respectively), at stated value Additional capital Retained income Accumulated other comprehensive income (less) Total Shareholders' Equity Total Liabilities and Shareholders' Equity Senores to considered financial statements 65.0 1,3986 110.3 61.9 1,3772 105.1 6,3763 7.4101 8,740.8 28.9 28.9 5,755.8 5,7397 2,367.6 2.2392 1181.81 10 7,970.5 7,8911 $ 16,711.J S 15.2012 THEJ.M. SMUCKER COMPANY STATEMENTS OF CONSOLIDATED CASH FLOWS THE I. M. SMUCKER COMPANY STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY Year Ended April 30, 2015 r 3019 2017 5 514.4 $1,338,6 S 5923 211.7 207.3 2060 240.3 979 107.2 20.7 (27.7) (93.5) 4.5 1.2 2063 206.8 145.0 31.9 15.4 133.2 (803.4 6.6 (39.61 0.4 128.73 54.7 8.9 110.4) ) Operating Activities Net income Adjustments to reconcile net income to net cash provided by used for) operations: Depreciation Amortization Goodwill impairment charges Other intangible assets impairment charges Share-based compensation expense Gain on divestiture Deferred income tax expense (benefit) Loss on disposal of assets - net Other noncash ljustments -net Defined benetit pension contributions Changes in assets and liabilities, net of effect from acquisition and divestiture: Trade receivables Inventories Other current assets Accounts payable Accrued liabilities Income and other taxes Othernet Net Cash Provided by (Uned for) Operating Activities Investing Activities Business acquired, net of cash acquired Additions to property, plant, and equipment Proceeds from divestiture Proceeds from sale of investment Proceeds from disposal of property, plant, and equipment Oxhernet Net Cash Provided by (Used for) Investing Activities Financing Activities Short-term borrowing repayments)-net Proceeds from long-term deht Repayments of long-term deb Quarterly dividends paid Purchase of treasury shares Oxhernet Net Cash Provided by (Used for) Financing Activities Effect of exchange rate changes on cash Net increase (decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and Cash Equivalents at End of Year (53.0) (5.3) 13.3 43.7 667 51.8 (170) 1.141.2 54.0 (5.31 19.0 20.5 (28.73 (7.5) 1.218.0 Accumulated Como Oher Tool Share Related in Comprarle Shareholders' Oustanding Slunes Ince 4 1 | Equity Balance at May 1, 2016 116306.894 29.1 55.860,1 51,267,7 S (148.41 $ 7,0085 Nel income 592.3 5923 Other comprehensive income ilos) 5.0 5.0 Comprehensive Income 5973 Purchase of treasury sures 13,147,659) (0.8) (163.6) (273.2) (437.6) Stock plans 280.318 28.1 28.2 Cash dividends declared, S5,00 per common share (346,5) (346.53 Other 0.2 0.3 Balance at April 30, 2017 113,439,553 28.4 57247 1,240.5 (143,41 6,850.2 Net income 1.3386 1.338.6 Other comprehensive income ilo) 41.7 41.7 Comprehensive Income 1,380.31 Purchase of treasury shares 154,535) (5.8) (1.2) (7.0) Stuck plans 187,822 21.3 213 Cash dividends declared, $3.12 per common share (353.7) (353.7 Reclassification of stranded tax effect) 15.0 (15.01 Other 0.5 (0.5 ) Balance at April 30, 2018 113.572,840 28.9 5,7397 2019.2 (1167) 7,8911 Net income 514.4 514.4 Other comprehensive income (los) 165.1) (65.1) Comprehensive Income 4493 Purchase of treasury shares (50,723) (5.4) (5.4) Stock plans 220.179 21.5 21.5 Cash dividends declared, 53.40 per common are (386,0) ) (3860) Other Balance at April 30, 2019 113,742,2% 28.9 $5,755 8 2,367,6S (181.8) 5 7,930.5 (A) During the fourth quarter of 2018, we clected to carly adopt Accounting Standards Update ("ASU") 2018-02. Income Statement Reporting Comprehensive Income Topic 220) Reclassification of Certain Tax Elects from Accuwwater Other Comprehensive Income, which allowed us to reclassify the stranded inox lix effects resulting from the Act from accumulated other comprehensive income (less to retained earnings See to wadon www.cial www. 2.1 (39.8) 7.9 18.2 1,059.0 (1.903.0) ( (359.8) (3209) (1924) 369.5 1.1 (320) (1.924.2) 13.4 309 (277.61 0.5 (38.4) (189.7) 170.0 282.0 ( (310.01 1.500.0 799.6 (700.0) (1.050.3) (277.9) (350.3) 15.4) ) (7.0) 14.01 699.0 19220) (200.0 (339.3) (437.6) 0.8 (806.1) (6.2 57.0 109.8 166.8 (91.3) 192.6 S LOL3 25.8 166.8 192.6 S ( Dencies of cash Serwies to cowolidated financial statement