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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________________________ 
FORM 10-Q
___________________________________________________ 
QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: January 31, 2024
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 1-5111
 ___________________________________________________
The J. M. Smucker Company
(Exact name of registrant as specified in its charter)
___________________________________________________ 
Ohio34-0538550
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
One Strawberry Lane
Orrville,Ohio44667-0280
(Address of principal executive offices)(Zip code)
                                                                           Registrant’s telephone number, including area code:
(330)682-3000
N/A
           (Former name, former address and former fiscal year, if changed since last report)
       Securities registered pursuant to Section 12(b) of the Act:
                             Title of each class
Trading symbolName of each exchange on which registered
Common shares, no par valueSJMNew York Stock Exchange
 ___________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý    No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ý    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerýAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No  ý
The Company had 106,175,550 common shares outstanding on February 20, 2024.

TABLE OF CONTENTS

1


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
Three Months Ended January 31,Nine Months Ended January 31,
Dollars in millions, except per share data2024202320242023
Net sales$2,229.2 $2,216.3 $5,973.0 $6,294.4 
Cost of products sold (A)
1,406.1 1,460.5 3,770.9 4,285.0 
Gross Profit823.1 755.8 2,202.1 2,009.4 
Selling, distribution, and administrative expenses374.2 380.9 1,021.3 1,079.0 
Amortization55.7 55.6 135.1 166.8 
Other special project costs (A)
98.9 0.6 105.7 2.7 
Other operating expense (income) – net(3.1)0.8 40.2 (30.1)
Operating Income297.4 317.9 899.8 791.0 
Interest expense – net(99.8)(37.9)(167.0)(116.7)
Other debt costs (A)
  (19.5) 
Other income (expense) – net (A)
(2.1)(4.6)(30.0)(4.9)
Income Before Income Taxes195.5 275.4 683.3 669.4 
Income tax expense75.1 66.9 184.4 160.0 
Net Income$120.4 $208.5 $498.9 $509.4 
Earnings per common share:
Net Income$1.14 $1.96 $4.82 $4.78 
Net Income – Assuming Dilution$1.13 $1.95 $4.81 $4.77 
(A)Includes certain divestiture, acquisition, integration, and restructuring costs (“special project costs”). For more information, see Note 5: Special Project Costs, Note 6: Reportable Segments, and Note 9: Debt and Financing Arrangements.
See notes to unaudited condensed consolidated financial statements.


THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended January 31,Nine Months Ended January 31,
Dollars in millions2024202320242023
Net income$120.4 $208.5 $498.9 $509.4 
Other comprehensive income (loss):
Foreign currency translation adjustments9.0 6.5 2.4 (8.5)
Cash flow hedging derivative activity, net of tax3.0 2.7 8.2 7.8 
Pension and other postretirement benefit plans activity, net of tax0.5 0.6 1.0 1.5 
Available-for-sale securities activity, net of tax0.6 0.3 0.2 (0.6)
Total Other Comprehensive Income (Loss)13.1 10.1 11.8 0.2 
Comprehensive Income$133.5 $218.6 $510.7 $509.6 
See notes to unaudited condensed consolidated financial statements.
2


THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dollars in millionsJanuary 31, 2024April 30, 2023
ASSETS
Current Assets
Cash and cash equivalents$35.9 $655.8 
Trade receivables – net789.6 597.6 
Inventories:
Finished products601.3 657.6 
Raw materials386.3 352.2 
Total Inventory987.6 1,009.8 
Investment in equity securities 487.8 
Other current assets110.9 107.7 
Total Current Assets1,924.0 2,858.7 
Property, Plant, and Equipment
Land and land improvements151.2 131.0 
Buildings and fixtures1,139.8 956.1 
Machinery and equipment2,879.6 2,443.5 
Construction in progress874.4 629.4 
Gross Property, Plant, and Equipment5,045.0 4,160.0 
Accumulated depreciation(2,040.1)(1,920.5)
Total Property, Plant, and Equipment3,004.9 2,239.5 
Other Noncurrent Assets
Operating lease right-of-use assets182.3 103.0 
Goodwill7,667.8 5,216.9 
Other intangible assets – net7,310.3 4,429.3 
Other noncurrent assets157.9 144.0 
Total Other Noncurrent Assets15,318.3 9,893.2 
Total Assets$20,247.2 $14,991.4 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable$1,252.7 $1,392.6 
Accrued trade marketing and merchandising239.9 187.7 
Short-term borrowings418.0  
Current operating lease liabilities40.6 33.2 
Other current liabilities516.2 373.2 
Total Current Liabilities2,467.4 1,986.7 
Noncurrent Liabilities
Long-term debt8,121.1 4,314.2 
Deferred income taxes1,769.3 1,138.9 
Noncurrent operating lease liabilities151.4 77.2 
Other noncurrent liabilities177.9 183.6 
Total Noncurrent Liabilities10,219.7 5,713.9 
Total Liabilities12,687.1 7,700.6 
Shareholders’ Equity
Common shares26.5 26.1 
Additional capital5,706.0 5,371.8 
Retained income2,055.0 2,132.1 
Accumulated other comprehensive income (loss)(227.4)(239.2)
Total Shareholders’ Equity7,560.1 7,290.8 
Total Liabilities and Shareholders’ Equity$20,247.2 $14,991.4 
See notes to unaudited condensed consolidated financial statements.
3


THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
 Nine Months Ended January 31,
Dollars in millions20242023
Operating Activities
Net income$498.9 $509.4 
Adjustments to reconcile net income to net cash provided by (used for) operations:
Depreciation170.7 172.0 
Amortization135.1 166.8 
Realized loss on investment in equity securities – net21.5  
Share-based compensation expense15.9 11.3 
Loss (gain) on divestitures – net12.9 (1.6)
Deferred income tax expense (benefit)(22.1) 
Other noncash adjustments – net25.5 29.3 
Settlement of interest rate contracts42.5  
Defined benefit pension contributions(2.8)(72.8)
Changes in assets and liabilities, net of effect from acquisition and divestitures:
Trade receivables(10.8)(10.7)
Inventories55.3 (154.6)
Other current assets13.2 69.4 
Accounts payable(147.9)46.3 
Accrued liabilities61.8 26.2 
Income and other taxes(43.5)(39.9)
Other – net(24.9)(0.5)
Net Cash Provided by (Used for) Operating Activities801.3 750.6 
Investing Activities
Business acquired, net of cash acquired(3,920.6) 
Proceeds from sale of equity securities466.3  
Additions to property, plant, and equipment(455.9)(332.3)
Proceeds from divestitures – net50.5 1.6 
Other – net(1.5)23.9 
Net Cash Provided by (Used for) Investing Activities(3,861.2)(306.8)
Financing Activities
Short-term borrowings (repayments) – net413.2 (185.2)
Proceeds from long-term debt4,285.0  
Repayments of long-term debt(1,441.0) 
Capitalized debt issuance costs(32.1) 
Quarterly dividends paid(325.5)(321.8)
Purchase of treasury shares(372.5)(8.0)
Payment of assumed tax receivable agreement obligation(86.4) 
Other – net(1.2)5.6 
Net Cash Provided by (Used for) Financing Activities2,439.5 (509.4)
Effect of exchange rate changes on cash0.5 (0.1)
Net increase (decrease) in cash and cash equivalents(619.9)(65.7)
Cash and cash equivalents at beginning of period655.8 169.9 
Cash and Cash Equivalents at End of Period$35.9 $104.2 
( ) Denotes use of cash
See notes to unaudited condensed consolidated financial statements.
4


THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY
(Unaudited)

Nine Months Ended January 31, 2024
Dollars in millionsCommon
Shares
Outstanding
Common SharesAdditional CapitalRetained IncomeAccumulated Other Comprehensive Income (Loss)Total Shareholders’ Equity
Balance at May 1, 2023104,398,618 $26.1 $5,371.8 $2,132.1 $(239.2)$7,290.8 
Net income183.6 183.6 
Other comprehensive income (loss)10.2 10.2 
Comprehensive income193.8 
Purchase of treasury shares(2,410,863)(0.6)(132.1)(242.9)(375.6)
Stock plans144,918  2.4 (1.1)1.3 
Cash dividends declared, $1.06 per common share
(106.9)(106.9)
Balance at July 31, 2023102,132,673 $25.5 $5,242.1 $1,964.8 $(229.0)$7,003.4 
Net income194.9 194.9 
Other comprehensive income (loss)(11.5)(11.5)
Comprehensive income183.4 
Purchase of treasury shares(3,139) (0.4) (0.4)
Stock plans25,067  11.1 11.1 
Cash dividends declared, $1.06 per common share
(108.6)(108.6)
Balance at October 31, 2023102,154,601 $25.5 $5,252.8 $2,051.1 $(240.5)$7,088.9 
Net income120.4 120.4 
Other comprehensive income (loss)13.1 13.1 
Comprehensive income133.5 
Purchase of treasury shares(1,101) (0.1) (0.1)
Issuance of shares for acquisition3,989,915 1.0 449.2 450.2 
Stock plans33,904  4.1 4.1 
Cash dividends declared, $1.06 per common share
(116.5)(116.5)
Balance at January 31, 2024106,177,319 $26.5 $5,706.0 $2,055.0 $(227.4)$7,560.1 

5


Nine Months Ended January 31, 2023
Dollars in millionsCommon
Shares
Outstanding
Common SharesAdditional CapitalRetained IncomeAccumulated Other Comprehensive Income (Loss)Total Shareholders’ Equity
Balance at May 1, 2022106,458,317 $26.6 $5,457.9 $2,893.0 $(237.4)$8,140.1 
Net income109.8 109.8 
Other comprehensive income (loss)4.0 4.0 
Comprehensive income113.8 
Purchase of treasury shares(61,693) (6.7)(1.1)(7.8)
Stock plans162,735  6.5  6.5 
Cash dividends declared, $1.02 per common share
(108.3)(108.3)
Balance at July 31, 2022106,559,359 $26.6 $5,457.7 $2,893.4 $(233.4)$8,144.3 
Net income191.1 191.1 
Other comprehensive income (loss)(13.9)(13.9)
Comprehensive income177.2 
Purchase of treasury shares(580) (0.1) (0.1)
Stock plans67,757  4.4 4.4 
Cash dividends declared, $1.02 per common share
(108.5)(108.5)
Balance at October 31, 2022106,626,536 $26.6 $5,462.0 $2,976.0 $(247.3)$8,217.3 
Net income208.5 208.5 
Other comprehensive income (loss)10.1 10.1 
Comprehensive income218.6 
Purchase of treasury shares(746) (0.1) (0.1)
Stock plans8,499  7.5 7.5 
Cash dividends declared, $1.02 per common share
(108.3)(108.3)
Balance at January 31, 2023106,634,289 $26.6 $5,469.4 $3,076.2 $(237.2)$8,335.0 
See notes to unaudited condensed consolidated financial statements.
6


THE J. M. SMUCKER COMPANY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, unless otherwise noted, except per share data)
Note 1: Basis of Presentation
The unaudited interim condensed consolidated financial statements of The J. M. Smucker Company (“Company,” “we,” “us,” or “our”) have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included.
Operating results for the nine months ended January 31, 2024, are not necessarily indicative of the results that may be expected for the year ending April 30, 2024. For further information, reference is made to the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended April 30, 2023.
Note 2: Recently Issued Accounting Standards
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures. ASU 2023-09 will improve the transparency and decision usefulness of income tax disclosures to better assess how operations and related tax risks affect tax rates and future cash flows on an interim and annual basis. It will be effective for us on May 1, 2025, with the option to early adopt at any time prior to the effective date and will require adoption on a retrospective basis. We are currently evaluating the impacts of the standard on our financial statements and disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures. ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. It will be effective for our annual period beginning May 1, 2024, and interim periods beginning May 1, 2025, with the option to early adopt at any time prior to the effective date and will require adoption on a retrospective basis. We are currently evaluating the impacts of the standard on our financial statements and disclosures.
In July 2023, the U.S. Securities and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-11216, Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure, requiring current reporting about material cybersecurity incidents and annual disclosures on management’s processes for assessing, identifying, and managing material cybersecurity risks, the material impacts of cybersecurity threats and previous cybersecurity incidents, the Board of Directors’ (the “Board”) oversight of cybersecurity risks, and management’s role and expertise in assessing and managing material cybersecurity risks. SEC Release No. 33-11216 was effective for us on November 1, 2023, and did not have a material impact on our financial statements and disclosures.
In December 2022, the SEC adopted the final rule under SEC Release No. 33-11138, Insider Trading Arrangements and Related Disclosures, which requires new disclosures regarding insider trading policies and procedures, the use of Rule 10b5-1 plans by directors and officers, and stock option grants issued in close proximity to the release of material nonpublic information. SEC Release No. 33-11138 was effective for us on May 1, 2023, and did not have a material impact on our financial statements and disclosures.
In March 2022, the SEC issued the proposed rule under SEC Release No. 33-11042, The Enhancement and Standardization of Climate-Related Disclosures for Investors, to enhance and standardize the climate-related disclosures provided by public companies. As proposed, this update will require the disclosure of greenhouse gas emissions, including Scope 1 and Scope 2 emissions, which will be subject to third-party assurance, as well as climate-related targets and goals, and information related to how the Board and management oversee climate-related risks. As of January 31, 2024, these amendments were not adopted by the SEC; however, we anticipate that the adoption of these amendments would have a material impact on our financial statements and disclosures.
7


Note 3: Acquisition
On November 7, 2023, we completed a cash and stock transaction to acquire Hostess Brands, Inc. (“Hostess Brands”). The total purchase consideration in connection with the acquisition was $5.4 billion, which reflects an exchange offer of all outstanding shares of Hostess Brands common stock at a price of $34.25 per share, consisting of $30.00 in cash and 0.03002 shares of our common shares, based on the closing stock price on September 8, 2023, that were exchanged for each share of Hostess Brands common stock as of the transaction date.
The purchase price included the issuance of approximately 4.0 million of our common shares to Hostess Brands’ shareholders, valued at $450.2, as discussed in Note 17: Common Shares. In addition, we paid $3.9 billion in cash, net of cash acquired, and assumed $991.0 of debt from Hostess Brands and $67.8 of an other debt-like item, reflecting consideration transferred for the cash payment of Hostess Brands’ employee equity awards. New debt of $5.0 billion was borrowed, consisting of $3.5 billion in Senior Notes, a $800.0 senior unsecured delayed-draw Term Loan Credit Agreement (“Term Loan”), and $700.0 of short-term borrowings under our commercial paper program to partially fund the transaction and pay off the debt assumed as part of the acquisition. For additional information on the financing associated with this transaction, refer to Note 9: Debt and Financing Arrangements.
Hostess Brands is a manufacturer and marketer of sweet baked goods brands including Hostess® Donettes®, Twinkies®, CupCakes, DingDongs®, Zingers®, CoffeeCakes, HoHos®, Mini Muffins, and Fruit Pies, and the Voortman® cookie brand. In addition to its headquarters in Lenexa, Kansas, the transaction included six manufacturing facilities located in Emporia, Kansas; Burlington, Ontario; Chicago, Illinois; Columbus, Georgia; Indianapolis, Indiana; and Arkadelphia, Arkansas, a distribution facility in Edgerton, Kansas, and a commercial center of excellence in Chicago, Illinois. Approximately 3,000 employees transitioned with the business at the close of the transaction.
The transaction was accounted for under the acquisition method of accounting, and accordingly, the results of Hostess Brands operations, including $300.3 in net sales and $34.7 in operating income, are included within the Sweet Baked Snacks segment for the three months ended January 31, 2024. The operating income for the three months ended January 31, 2024, includes the recognition of an unfavorable fair value purchase accounting adjustment of $8.1, attributable to the acquired inventory, and excludes special project costs recognized within the segment.
The purchase price was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition on a provisional basis. We determined the estimated fair values based on independent appraisals, discounted cash flow analyses, quoted market prices, and estimates made by management. 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.
8


The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date.
Assets acquired:
Cash and cash equivalents$135.0 
Trade receivables – net181.1 
Inventories65.9 
Other current assets7.1 
Property, plant, and equipment – net542.2 
Operating lease right-of-use assets17.2 
Goodwill2,461.1 
Other intangible assets3,036.8 
Other noncurrent assets43.5 
Total assets acquired$6,489.9 
Liabilities assumed:
Accounts payable$67.3 
Current operating lease liabilities4.7 
Current liabilities250.2 
Deferred income taxes655.0 
Noncurrent operating lease liabilities14.5 
Other noncurrent liabilities 1.4 
Total liabilities assumed993.1 
Net assets acquired$5,496.8 
Certain estimated fair values for the acquisition, including goodwill, intangible assets, property, plant, and equipment, and income taxes, are not yet finalized. The purchase price was preliminarily allocated based on information available at the acquisition date and is subject to change as we complete our analysis of the fair values at the date of the acquisition during the measurement period not to exceed one year, as permitted under FASB ASC 805, Business Combinations.
As a result of the acquisition, we recognized a total of $2.5 billion of goodwill within the Sweet Baked Snacks segment, of which $196.6 is expected to be deductible for tax purposes, which will be refined during the measurement period. Goodwill represents the value we expect to achieve through the implementation of operational synergies and growth opportunities as we integrate Hostess Brands into our Company. We are evaluating the impact of these anticipated operational synergies and growth opportunities across our reporting units and, as a result, have not allocated goodwill to our other reporting units as of January 31, 2024; however, we will complete our evaluation and allocate goodwill, as appropriate, by the end of the measurement period. The goodwill and indefinite-lived trademarks resulting from the acquisition are susceptible to future impairment charges. Any significant change in our near or long-term projections or macroeconomic conditions may result in future impairment charges as the carrying values of goodwill and indefinite-lived trademarks approximate estimated fair values.
The preliminary purchase price was allocated to the identifiable intangible assets acquired as follows:
Intangible assets with finite lives:
Customer and contractual relationships (25-year useful life)
$1,237.8 
Non-competition agreements (varying useful lives)36.9 
Trademarks (5-year useful life)
9.9 
Intangible assets with indefinite lives:
Trademarks1,752.2 
Total intangible assets$3,036.8 
The estimated annual amortization expense for the finite-lived intangible assets based on the preliminary purchase price allocation is $71.6.
9


Hostess Brands’ results of operations are included in our consolidated financial statements from the date of the transaction within our Sweet Baked Snacks segment. If the transaction had occurred on May 1, 2022, unaudited pro forma consolidated results for the three and nine months ended January 31, 2024 and 2023, would have been as follows:
Three Months Ended January 31,Nine Months Ended January 31,
2024202320242023
Net sales$2,253.2 $2,544.0 $6,707.1 $7,311.5 
Net income162.5 186.7 453.0 461.3 
Net income per common share – assuming dilution1.53 1.68 4.25 4.16 
The unaudited pro forma consolidated results are based on our historical financial statements and those of Hostess Brands, and do not necessarily indicate the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable period presented. The most significant pro forma adjustments relate to the elimination of nonrecurring acquisition-related costs incurred prior to the close of the transaction, amortization of acquired intangible assets, depreciation of acquired property, plant, and equipment, and interest expense associated with acquisition-related financing. The unaudited pro forma consolidated results do not give effect to the synergies of the acquisition and are not indicative of the results of operations in future periods.
Note 4: Divestitures
On January 2, 2024, we sold our Canada condiment business to TreeHouse Foods, Inc. (“TreeHouse Foods”). The transaction included Bick’s® pickles, Habitant® pickled beets, Woodman’s® horseradish, and McLarens® pickled onions brands, inclusive of certain trademarks. Under our ownership, these brands generated net sales of approximately $60.0 in 2023, which were included in the International operating segment. Net proceeds from the divestiture were $25.3, net of cash transaction costs and includes a receivable related to a preliminary working capital adjustment. During the second quarter of 2024, the disposal group was classified as held for sale, and as a result, an estimated pre-tax loss of $5.2 was recognized within other operating expense (income) – net in the Condensed Statement of Consolidated Income. Upon close of the transaction during the third quarter of 2024, the pre-tax loss was adjusted to $5.7, reflecting the fair value of the disposal group as of the transaction date.
On November 1, 2023, we sold our Sahale Snacks® business to Second Nature Brands (“Second Nature”). The transaction included products sold under our Sahale Snacks brand, inclusive of certain trademarks and licensing agreements; a leased manufacturing facility in Seattle, Washington; and approximately 100 employees who supported the brand. Under our ownership, the Sahale Snacks brand generated net sales of approximately $48.0 in 2023, primarily included in the U.S. Retail Frozen Handheld and Spreads segment. Final net proceeds from the divestiture were $31.6, net of a working capital adjustment and cash transaction costs. During the second quarter of 2024, the disposal group was classified as held for sale, and as a result, an estimated pre-tax loss of $6.8 was recognized within other operating expense (income) – net in the Condensed Statement of Consolidated Income. Upon close of the transaction during the third quarter of 2024, the pre-tax loss was adjusted to $6.7, reflecting the fair value of the disposal group as of the transaction date.

10


The following table summarizes the net assets and liabilities disposed, which were measured at the lower of carrying amount or fair value less costs to sell.
January 31, 2024
CondimentSahale Snacks
Assets disposed:
Inventories$23.9 $9.9 
Property, plant, and equipment – net 6.0 
Operating lease right-of-use assets 1.8 
Goodwill 11.5 
Other intangible assets – net7.1 14.7 
Other noncurrent assets 0.3 
Total assets disposed$31.0 $44.2 
Liabilities disposed:
Other current liabilities$ $0.8 
Deferred income taxes 4.1 
Other noncurrent liabilities  1.0 
Total liabilities disposed 5.9 
Net assets disposed$31.0 $38.3 
On April 28, 2023, we sold certain pet food brands to Post Holdings, Inc. (“Post”). The transaction included the Rachael Ray® Nutrish®, 9Lives®, Kibbles ’n Bits®, Nature’s Recipe®, and Gravy Train® brands, as well as our private label pet food business, inclusive of certain trademarks and licensing agreements, manufacturing and distribution facilities in Bloomsburg, Pennsylvania, manufacturing facilities in Meadville, Pennsylvania and Lawrence, Kansas, and approximately 1,100 employees who supported these pet food brands. Under our ownership, these brands generated net sales of $1.5 billion in 2023, primarily included in the U.S. Retail Pet Foods segment. Final net proceeds from the divestiture were $1.2 billion, consisting of $683.9 in cash, net of a working capital adjustment and cash transaction costs, and approximately 5.4 million shares of Post common stock, valued at $491.6 at the close of the transaction. We recognized a pre-tax loss of $1.0 billion upon completion of this transaction during the fourth quarter of 2023, within other operating expense (income) – net in the Statement of Consolidated Income, net of a working capital adjustment and transaction costs. During 2024, we finalized the working capital adjustment and transaction costs, which resulted in an immaterial adjustment to the pre-tax loss. Furthermore, during the first quarter of 2024, we began entering into equity forward derivative transactions under an agreement with an unrelated third party to facilitate the forward sale of the Post common stock. All 5.4 million shares of Post common stock were settled for $466.3 on November 15, 2023. For additional information, see Note 11: Derivative Financial Instruments.
On January 31, 2022, we sold the natural beverage and grains businesses to Nexus Capital Management LP (“Nexus”). The transaction included products sold under the R.W. Knudsen® and TruRoots® brands, inclusive of certain trademarks, a licensing agreement for Santa Cruz Organic® beverages, dedicated manufacturing and distribution facilities in Chico, California and Havre de Grace, Maryland, and approximately 150 employees who supported the natural beverage and grains businesses. The transaction did not include Santa Cruz Organic nut butters, fruit spreads, syrups, or applesauce. Final net proceeds from the divestiture were $98.7, net of a working capital adjustment and cash transaction costs. We recognized a pre-tax gain of $28.3 related to the natural beverage and grains businesses, of which $1.6 was recognized during the first quarter of 2023, within other operating expense (income) – net in the Condensed Statement of Consolidated Income, upon finalization of the working capital adjustment.
Note 5: Special Project Costs
Special project costs consist primarily of employee-related costs and other transition and termination costs related to certain divestiture, acquisition, integration, and restructuring activities. Employee-related costs include severance, retention bonuses, and relocation costs. Severance costs are generally recognized when deemed probable and estimable, retention bonuses are recognized over the estimated future service period of the impacted employees, and relocation costs are expensed as incurred. Other transition and termination costs include fixed asset-related charges, contract and lease termination costs, professional fees, and other miscellaneous expenditures associated with divestiture, acquisition, integration, and restructuring activities. With the exception of accelerated depreciation, these costs are expensed as incurred. These special project costs are reported in cost of products sold, other special project costs, other debt costs, and other income (expense) – net in the Condensed
11


Statements of Consolidated Income and are not allocated to segment profit. The obligation related to employee separation costs is included in other current liabilities in the Condensed Consolidated Balance Sheets.
Divestiture Costs: Total divestiture costs related to the divested Sahale Snacks and Canada condiment businesses are anticipated to be approximately $6.0 and consist primarily of employee-related costs and lease termination costs, all of which are expected to be cash charges and recognized in 2024. We incurred $2.3 and $2.8 of employee-related costs during the three and nine months ended January 31, 2024, respectively, related to these divestitures. We also incurred $1.6 of other transition and termination costs during the third quarter of 2024, primarily related to lease termination costs. The obligation related to severance and retention bonuses was $1.5 at January 31, 2024. For additional information, see Note 4: Divestitures.
Integration Costs: Total integration costs related to the acquisition of Hostess Brands are anticipated to be approximately $210.0 and include transaction costs, employee-related costs, and other transition and termination charges. Of the total anticipated integration costs, approximately half reflect transaction costs, with the remainder split between employee-related costs and other transition and termination charges. The majority of the integration costs are expected to be cash charges incurred by the end of 2026, with over half of the costs expected to be recognized in 2024.
The following table summarizes our integration costs incurred related to the acquisition of Hostess Brands.
Three Months Ended January 31, 2024Nine Months Ended January 31, 2024
Transaction costs$72.7 $98.9 
Employee-related costs16.3 16.3 
Other transition and termination costs5.9 5.9 
Total integration costs$94.9 $121.1 
Noncash charges of $0.1 were included in employee-related costs incurred during both the three and nine months ended January 31, 2024. Transaction costs primarily reflect equity compensation pay-outs, legal fees, and a 364-day senior unsecured Bridge Term Loan Credit Facility (“Bridge Loan”) that provided committed financing for the acquisition of Hostess Brands. Other transition and termination costs primarily consist of consulting fees. The obligation related to severance and retention bonuses was $14.8 at January 31, 2024. For additional information, see Note 3: Acquisition.
Restructuring Costs: A restructuring program was approved by the Board during 2021, associated with opportunities identified to reduce our overall cost structure, optimize our organizational design, and support our portfolio reshape, and was further expanded in 2022 to include the costs associated with the divestitures of the private label dry pet food and natural beverage and grains businesses, as well as the closure of certain production facilities. The restructuring activities were considered complete as of April 30, 2023. The costs incurred associated with these restructuring activities included other transition and termination costs related to our cost reduction and margin management initiatives, inclusive of accelerated depreciation, as well as employee-related costs.
The following table summarizes our restructuring costs incurred related to the restructuring program.
Three Months Ended January 31, 2023Nine Months Ended January 31, 2023Total Costs Incurred to Date at April 30, 2023
Employee-related costs$0.3 $2.1 $27.1 
Other transition and termination costs1.3 5.5 36.6 
Total restructuring costs$1.6 $7.6 $63.7 
The obligation related to severance costs and retention bonuses was $1.6 at April 30, 2023, and was fully satisfied during the first quarter of 2024. Cumulative noncash charges incurred through April 30, 2023, were $33.2, and included $3.2 and $10.2 incurred during the three and nine months ended January 31, 2023, respectively, which primarily consisted of accelerated depreciation.
12


Note 6: Reportable Segments
We operate in one industry: the manufacturing and marketing of food and beverage products. We have four reportable segments: U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, and Sweet Baked Snacks. The presentation of International and Away From Home represents a combination of all other operating segments that are not individually reportable.
As disclosed in Note 3: Acquisition, we acquired Hostess Brands in a cash and stock transaction on November 7, 2023. The transaction resulted in a new reportable segment for 2024, Sweet Baked Snacks. Further, the historical U.S. Retail Consumer Foods reportable segment has been renamed to U.S. Retail Frozen Handheld and Spreads; however, there is no change to the manner in which the segment was previously presented. We do not anticipate any impact to our other historical reportable segments, as we do not anticipate any changes to the internal manner in which we will manage and report these reportable segments.
The U.S. Retail Coffee segment primarily includes the domestic sales of Folgers®, Dunkin’®, and Café Bustelo® branded coffee; the U.S. Retail Frozen Handheld and Spreads segment primarily includes the domestic sales of Smucker’s® and Jif® branded products; the U.S. Retail Pet Foods segment primarily includes the domestic sales of Meow Mix®, Milk-Bone®, Pup-Peroni®, and Canine Carry Outs® branded products; and the Sweet Baked Snacks segment primarily includes all domestic and foreign sales of Hostess and Voortman branded products in all channels. With the exception of Sweet Baked Snacks products, International and Away From Home includes the sale of all products that are distributed in foreign countries through retail channels, as well as domestically and in foreign countries through foodservice distributors and operators (e.g., health care operators, restaurants, lodging, hospitality, offices, K-12, colleges and universities, and convenience stores).
Segment profit represents net sales, less direct and allocable operating expenses, and is consistent with the way in which we manage our segments. However, we do not represent that the segments, if operated independently, would report operating profit equal to the segment profit set forth below, as segment profit excludes certain expenses such as amortization expense and impairment charges related to intangible assets, gains and losses on divestitures, the net change in cumulative unallocated gains and losses on commodity and foreign currency exchange derivative activities (“change in net cumulative unallocated derivative gains and losses”), special project costs, as well as corporate administrative expenses.
Commodity and foreign currency exchange derivative gains and losses are reported in unallocated derivative gains and losses outside of segment operating results until the related inventory is sold. At that time, we reclassify the hedge gains and losses from unallocated derivative gains and losses to segment profit, allowing our segments to realize the economic effect of the hedge without experiencing any mark-to-market volatility. We would expect that any gain or loss in the estimated fair value of the derivatives would generally be offset by a change in the estimated fair value of the underlying exposures.
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The following table reconciles segment profit to income before income taxes.
 Three Months Ended January 31,Nine Months Ended January 31,
 2024202320242023
Net sales:
U.S. Retail Coffee$727.5 $735.1 $2,038.3 $2,042.8 
U.S. Retail Frozen Handheld and Spreads436.8 434.2 1,365.1 1,177.5 
U.S. Retail Pet Foods (A)
465.2 758.6 1,370.2 2,252.8 
Sweet Baked Snacks300.3  300.3  
International and Away From Home299.4 288.4 899.1 821.3 
Total net sales$2,229.2 $2,216.3 $5,973.0 $6,294.4 
Segment profit:
U.S. Retail Coffee$207.8 $204.0 $548.9 $537.6 
U.S. Retail Frozen Handheld and Spreads104.1 94.1 338.3 249.2 
U.S. Retail Pet Foods (A)
109.5 109.0 288.0 349.4 
Sweet Baked Snacks68.0  68.0  
International and Away From Home50.4 37.6 147.0 95.7 
Total segment profit$539.8 $444.7 $1,390.2 $1,231.9 
Amortization(55.7)(55.6)(135.1)(166.8)
Gain (loss) on divestitures – net(0.3) (12.9)1.6 
Interest expense – net(99.8)(37.9)(167.0)(116.7)
Change in net cumulative unallocated derivative gains and losses(5.2)17.5 (21.1)(43.4)
Cost of products sold – special project costs (B)
 (1.0) (4.9)
Other special project costs (B)
(98.9)(0.6)(105.7)(2.7)
Other debt costs (B)
  (19.5) 
Corporate administrative expenses(82.3)(87.1)(215.6)(224.7)
Other income (expense) – net (B)
(2.1)(4.6)(30.0)(4.9)
Income before income taxes$195.5 $275.4 $683.3 $669.4 
(A)On April 28, 2023, we sold certain pet food brands to Post, and the divested net sales were primarily included in the U.S. Retail Pet Foods segment. For more information, see Note 4: Divestitures.
(B)Includes certain divestiture, acquisition, integration, and restructuring costs. For more information, see Note 5: Special Project Costs and Note 9: Debt and Financing Arrangements.
The following table presents certain geographical information.
Three Months Ended January 31,Nine Months Ended January 31,
2024202320242023
Net sales:
United States$2,094.7 $2,080.8 $5,567.4 $5,902.8 
International:
Canada$111.8 $110.0 $333.0 $323.0 
All other international22.7 25.5 72.6 68.6 
Total international$134.5 $135.5 $405.6 $391.6 
Total net sales$2,229.2 $2,216.3 $5,973.0 $6,294.4 
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The following table presents product category information.
Three Months Ended January 31,Nine Months Ended January 31,
2024202320242023
Primary Reportable Segment (A)
Coffee$817.6 $827.7 $2,305.1 $2,307.2 U.S. Retail Coffee
Pet snacks261.0 269.0 760.3 773.4 
U.S. Retail Pet Foods (B)
Peanut butter204.5 184.6 617.1 438.1 U.S. Retail Frozen Handheld and Spreads
Cat food203.4 271.3 599.1 821.4 
U.S. Retail Pet Foods (B)
Frozen handheld182.6 172.6 573.8 501.4 U.S. Retail Frozen Handheld and Spreads
Fruit spreads108.2 110.2 321.7 314.0 U.S. Retail Frozen Handheld and Spreads
Sweet baked goods270.2  270.2  Sweet Baked Snacks
Portion control51.5 42.9 153.1 114.2 
Other (D)
Baking mixes and ingredients23.1 25.7 68.0 70.8 
Other (D)
Toppings and syrups21.0 21.1 67.7 67.2 U.S. Retail Frozen Handheld and Spreads
Dog food17.4 241.8 64.5 729.8 
U.S. Retail Pet Foods (B) (C)
Cookies30.1  30.1  Sweet Baked Snacks
Other38.6 49.4 142.3 156.9 
Other (D)
Total net sales$2,229.2 $2,216.3 $5,973.0 $6,294.4 
(A)The primary reportable segment generally represents at least 75 percent of total net sales for each respective product category.
(B)During the three and nine months ended January 31, 2024, a portion of the net sales within this product category relates to sales associated with a contract manufacturing agreement resulting from the divestiture of certain pet food brands, primarily included in the U.S. Retail Pet Foods segment. This agreement will continue through the remainder of 2024 and into 2025.
(C)During the three and nine months ended January 31, 2023, the net sales within this product category were primarily related to the divested pet food brands, primarily included in the U.S. Retail Pet Foods segment. For more information, see Note 4: Divestitures.
(D)Primarily represents the International and Away From Home operating segments, which are combined for segment reporting purposes.
Note 7: Earnings per Share
We computed net income per common share (“basic earnings per share”) under the two-class method for the three and nine months ended January 31, 2024 and 2023, due to certain unvested common shares that contained non-forfeitable rights to dividends (i.e., participating securities) during these periods. For the three and nine months ended January 31, 2024 and 2023, the computation of net income per common share – assuming dilution (“diluted earnings per share”) was more dilutive under the treasury stock method, as compared to the two-class method. Therefore, the treasury stock method was used in accordance with FASB ASC 260, Earnings Per Share.
The following table sets forth the computation of basic and diluted earnings per share under the two-class method.
 Three Months Ended January 31,Nine Months Ended January 31,
 2024202320242023
Net income$120.4 $208.5 $498.9 $509.4 
Less: Net income allocated to participating securities 0.2 0.2 0.7 
Net income allocated to common stockholders$120.4 $208.3 $498.7 $508.7 
Weighted-average common shares outstanding105.9 106.5 103.5 106.4 
Add: Dilutive effect of stock options 0.1  0.1 
Weighted-average common shares outstanding – assuming dilution105.9 106.6 103.5 106.5 
Net income per common share$1.14 $1.96 $4.82 $4.78 
Net income per common share – assuming dilution$1.14 $1.95 $4.82 $4.78 
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The following table sets forth the computation of diluted earnings per share under the treasury stock method.
Three Months Ended January 31,Nine Months Ended January 31,
2024202320242023
Net income$120.4 $208.5 $498.9 $509.4 
Weighted-average common shares outstanding – assuming dilution:
Weighted-average common shares outstanding105.9 106.5 103.5 106.4 
Add: Dilutive effect of stock options 0.1  0.1 
Add: Dilutive effect of restricted shares, restricted stock units, and performance units0.2 0.4 0.3 0.4 
Weighted-average common shares outstanding – assuming dilution106.1 107.0 103.8 106.9 
Net income per common share – assuming dilution$1.13 $1.95 $4.81 $4.77 

Note 8: Goodwill and Other Intangible Assets

The following table summarizes the changes in our goodwill.
U.S. Retail CoffeeU.S. Retail Frozen Handheld and SpreadsU.S. Retail Pet FoodsSweet Baked SnacksInternational and Away From HomeTotal
Balance at April 30, 2023$2,090.9 $1,147.5 $1,580.2 $ $398.3 $5,216.9 
Acquisition   2,461.1  2,461.1 
Divestiture (7.6)  (3.9)(11.5)
Other (A)
    1.3 1.3 
Balance at January 31, 2024 (B)
$2,090.9 $1,139.9 $1,580.2 $2,461.1 $395.7 $7,667.8 
(A)The amounts classified as other represent foreign currency translation adjustments.
(B)Included in goodwill as of April 30, 2023, are accumulated goodwill impairment charges of $242.9.
The following table summarizes our other intangible assets and related accumulated amortization and impairment charges including foreign currency exchange adjustments.
January 31, 2024April 30, 2023
Acquisition CostAccumulated Amortization/Impairment Charges/Foreign Currency ExchangeNetAcquisition CostAccumulated Amortization/Impairment Charges/Foreign Currency ExchangeNet
Finite-lived intangible assets subject to
   amortization:
Customer and contractual relationships$4,764.9 $1,840.4 $2,924.5 $3,499.0 $1,719.8 $1,779.2 
Patents and technology163.0 160.7 2.3 167.6 161.6 6.0 
Trademarks143.1 109.1 34.0 151.4 111.6 39.8 
Total intangible assets subject to amortization$5,071.0 $2,110.2 $2,960.8 $3,818.0 $1,993.0 $1,825.0 
Indefinite-lived intangible assets not subject to
   amortization:
Trademarks$4,572.7 $223.2 $4,349.5 $2,830.7 $226.4 $2,604.3 
Total other intangible assets$9,643.7 $2,333.4 $7,310.3 $6,648.7 $2,219.4 $4,429.3 

We review goodwill and other indefinite-lived intangible assets for impairment at least annually on February 1, and more often if indicators of impairment exist. As of January 31, 2024, there were no indicators of impairment, and as a result, we do not believe that any of our reporting units or material indefinite-lived intangible assets are more likely than not impaired. The goodwill within the U.S. Retail Pet Foods segment remains susceptible to future impairment charges due to narrow differences between fair value and carrying value. In addition, the goodwill and indefinite-lived trademarks within the Sweet Baked Snacks segment remain susceptible to future impairment charges, as the carrying values approximate estimated fair values due to the
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recent acquisition of Hostess Brands. Any significant adverse change in our near or long-term projections or macroeconomic conditions could result in future impairment charges for these segments.
Note 9: Debt and Financing Arrangements
The following table summarizes the components of our long-term debt.
 January 31, 2024April 30, 2023
 Principal
Outstanding
Carrying
Amount