ý | QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ohio | 34-0538550 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
One Strawberry Lane | |
Orrville, Ohio | 44667-0280 |
(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) |
Large accelerated filer | ý | Accelerated filer | o | ||
Non-accelerated filer | o | Smaller Reporting Company | o | ||
Emerging growth company | o |
Page No. | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
Dollars in millions, except per share data | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net sales | $ | 2,021.5 | $ | 1,923.6 | $ | 3,924.0 | $ | 3,672.5 | |||||||
Cost of products sold | 1,250.2 | 1,168.6 | 2,474.5 | 2,255.4 | |||||||||||
Gross Profit | 771.3 | 755.0 | 1,449.5 | 1,417.1 | |||||||||||
Selling, distribution, and administrative expenses | 382.4 | 359.5 | 765.7 | 708.3 | |||||||||||
Amortization | 59.7 | 51.6 | 120.2 | 103.1 | |||||||||||
Other special project costs (A) | 25.4 | 9.7 | 33.1 | 36.8 | |||||||||||
Other operating expense (income) – net | (26.7 | ) | 2.1 | (26.9 | ) | 1.6 | |||||||||
Operating Income | 330.5 | 332.1 | 557.4 | 567.3 | |||||||||||
Interest expense – net | (53.6 | ) | (41.6 | ) | (107.2 | ) | (83.6 | ) | |||||||
Other income (expense) – net | (7.5 | ) | 1.3 | (7.7 | ) | (2.9 | ) | ||||||||
Income Before Income Taxes | 269.4 | 291.8 | 442.5 | 480.8 | |||||||||||
Income tax expense (benefit) | 80.9 | 97.2 | 121.0 | 159.4 | |||||||||||
Net Income | $ | 188.5 | $ | 194.6 | $ | 321.5 | $ | 321.4 | |||||||
Earnings per common share: | |||||||||||||||
Net Income | $ | 1.66 | $ | 1.71 | $ | 2.83 | $ | 2.83 | |||||||
Net Income – Assuming Dilution | $ | 1.66 | $ | 1.71 | $ | 2.83 | $ | 2.83 | |||||||
Dividends Declared per Common Share | $ | 0.85 | $ | 0.78 | $ | 1.70 | $ | 1.56 |
(A) | Other special project costs includes integration and restructuring costs. For more information, see Note 5: Integration and Restructuring Costs. |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
Dollars in millions | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net income | $ | 188.5 | $ | 194.6 | $ | 321.5 | $ | 321.4 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation adjustments | (5.6 | ) | (13.1 | ) | (11.7 | ) | 21.9 | ||||||||
Cash flow hedging derivative activity, net of tax | 6.1 | 0.8 | 8.2 | 2.4 | |||||||||||
Pension and other postretirement benefit plans activity, net of tax | 1.6 | 5.9 | 3.2 | 5.7 | |||||||||||
Available-for-sale securities activity, net of tax | 0.3 | (0.6 | ) | 0.6 | (0.3 | ) | |||||||||
Total Other Comprehensive Income (Loss) | 2.4 | (7.0 | ) | 0.3 | 29.7 | ||||||||||
Comprehensive Income | $ | 190.9 | $ | 187.6 | $ | 321.8 | $ | 351.1 |
October 31, 2018 | April 30, 2018 | ||||||
Dollars in millions | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 171.2 | $ | 192.6 | |||
Trade receivables, less allowance for doubtful accounts | 561.9 | 385.6 | |||||
Inventories: | |||||||
Finished products | 635.4 | 542.1 | |||||
Raw materials | 330.8 | 312.3 | |||||
Total Inventory | 966.2 | 854.4 | |||||
Other current assets | 87.9 | 122.4 | |||||
Total Current Assets | 1,787.2 | 1,555.0 | |||||
Property, Plant, and Equipment | |||||||
Land and land improvements | 117.2 | 120.1 | |||||
Buildings and fixtures | 818.9 | 812.6 | |||||
Machinery and equipment | 2,122.0 | 2,111.5 | |||||
Construction in progress | 284.9 | 212.1 | |||||
Gross Property, Plant, and Equipment | 3,343.0 | 3,256.3 | |||||
Accumulated depreciation | (1,524.3 | ) | (1,527.2 | ) | |||
Total Property, Plant, and Equipment | 1,818.7 | 1,729.1 | |||||
Other Noncurrent Assets | |||||||
Goodwill | 6,474.7 | 5,942.2 | |||||
Other intangible assets – net | 6,925.5 | 5,916.5 | |||||
Other noncurrent assets | 168.1 | 158.4 | |||||
Total Other Noncurrent Assets | 13,568.3 | 12,017.1 | |||||
Total Assets | $ | 17,174.2 | $ | 15,301.2 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 552.4 | $ | 512.1 | |||
Accrued trade marketing and merchandising | 119.2 | 101.6 | |||||
Short-term borrowings | 390.0 | 144.0 | |||||
Other current liabilities | 372.9 | 276.1 | |||||
Total Current Liabilities | 1,434.5 | 1,033.8 | |||||
Noncurrent Liabilities | |||||||
Long-term debt | 5,885.1 | 4,688.0 | |||||
Deferred income taxes | 1,525.3 | 1,377.2 | |||||
Other noncurrent liabilities | 299.3 | 311.1 | |||||
Total Noncurrent Liabilities | 7,709.7 | 6,376.3 | |||||
Total Liabilities | 9,144.2 | 7,410.1 | |||||
Shareholders’ Equity | |||||||
Common shares | 28.9 | 28.9 | |||||
Additional capital | 5,749.9 | 5,739.7 | |||||
Retained income | 2,367.6 | 2,239.2 | |||||
Accumulated other comprehensive income (loss) | (116.4 | ) | (116.7 | ) | |||
Total Shareholders’ Equity | 8,030.0 | 7,891.1 | |||||
Total Liabilities and Shareholders’ Equity | $ | 17,174.2 | $ | 15,301.2 |
Six Months Ended October 31, | |||||||
Dollars in millions | 2018 | 2017 | |||||
Operating Activities | |||||||
Net income | $ | 321.5 | $ | 321.4 | |||
Adjustments to reconcile net income to net cash provided by (used for) operations: | |||||||
Depreciation | 102.9 | 105.1 | |||||
Amortization | 120.2 | 103.1 | |||||
Share-based compensation expense | 10.5 | 12.7 | |||||
Gain on divestiture | (26.6 | ) | — | ||||
Other noncash adjustments – net | 3.0 | 2.3 | |||||
Defined benefit pension contributions | — | (0.8 | ) | ||||
Changes in assets and liabilities, net of effect from acquisition and divestiture: | |||||||
Trade receivables | (111.2 | ) | (41.5 | ) | |||
Inventories | (60.4 | ) | (103.6 | ) | |||
Other current assets | 17.6 | 19.4 | |||||
Accounts payable | 15.2 | 54.7 | |||||
Accrued liabilities | 60.4 | 3.3 | |||||
Income and other taxes | 18.5 | (46.8 | ) | ||||
Other – net | (25.7 | ) | 5.3 | ||||
Net Cash Provided by (Used for) Operating Activities | 445.9 | 434.6 | |||||
Investing Activities | |||||||
Business acquired, net of cash acquired | (1,903.0 | ) | — | ||||
Additions to property, plant, and equipment | (179.1 | ) | (130.0 | ) | |||
Proceeds from divestiture | 372.1 | — | |||||
Other – net | (8.9 | ) | 23.7 | ||||
Net Cash Provided by (Used for) Investing Activities | (1,718.9 | ) | (106.3 | ) | |||
Financing Activities | |||||||
Short-term borrowings (repayments) – net | 246.0 | 10.0 | |||||
Proceeds from long-term debt | 1,500.0 | — | |||||
Repayments of long-term debt | (300.0 | ) | (150.0 | ) | |||
Quarterly dividends paid | (184.9 | ) | (173.4 | ) | |||
Purchase of treasury shares | (5.0 | ) | (6.7 | ) | |||
Other – net | 0.1 | (1.1 | ) | ||||
Net Cash Provided by (Used for) Financing Activities | 1,256.2 | (321.2 | ) | ||||
Effect of exchange rate changes on cash | (4.6 | ) | 6.4 | ||||
Net increase (decrease) in cash and cash equivalents | (21.4 | ) | 13.5 | ||||
Cash and cash equivalents at beginning of period | 192.6 | 166.8 | |||||
Cash and Cash Equivalents at End of Period | $ | 171.2 | $ | 180.3 |
Assets acquired: | ||||
Cash and cash equivalents | $ | 1.6 | ||
Trade receivables | 66.3 | |||
Inventories | 97.8 | |||
Other current assets | 4.8 | |||
Property, plant, and equipment | 83.8 | |||
Goodwill | 680.9 | |||
Other intangible assets | 1,239.6 | |||
Other noncurrent assets | 0.3 | |||
Total assets acquired | $ | 2,175.1 | ||
Liabilities assumed: | ||||
Current liabilities | $ | 82.5 | ||
Deferred tax liabilities | 172.0 | |||
Other noncurrent liabilities | 16.0 | |||
Total liabilities assumed | $ | 270.5 | ||
Net assets acquired | $ | 1,904.6 |
Intangible assets with finite lives: | ||||
Customer and contractual relationships (25-year useful life) | $ | 935.0 | ||
Trademarks (5-year useful life) | 1.6 | |||
Intangible assets with indefinite lives: | ||||
Trademarks | 303.0 | |||
Total other intangible assets | $ | 1,239.6 |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net sales | $ | 2,021.5 | $ | 2,085.3 | $ | 3,951.4 | $ | 3,989.9 | |||||||
Net income | 189.7 | 183.8 | 322.8 | 293.6 |
Three Months Ended October 31, | Six Months Ended October 31, | Total Costs Incurred to Date at October 31, 2018 | |||||||||
2018 | 2018 | ||||||||||
Employee-related costs | $ | 6.9 | $ | 7.8 | $ | 7.8 | |||||
Other transition and termination costs | 7.3 | 8.4 | 8.4 | ||||||||
Total one-time costs | $ | 14.2 | $ | 16.2 | $ | 16.2 |
Three Months Ended October 31, | Six Months Ended October 31, | Total Costs Incurred to Date at October 31, 2018 | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Employee-related costs | $ | 9.5 | $ | 1.2 | $ | 15.1 | $ | 11.6 | $ | 38.9 | |||||||||
Other transition and termination costs | 1.7 | 1.6 | 1.8 | 7.9 | 20.6 | ||||||||||||||
Total one-time costs | $ | 11.2 | $ | 2.8 | $ | 16.9 | $ | 19.5 | $ | 59.5 |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net sales: | |||||||||||||||
U.S. Retail Coffee | $ | 544.9 | $ | 551.4 | $ | 1,034.4 | $ | 1,030.8 | |||||||
U.S. Retail Consumer Foods | 461.9 | 527.8 | 945.2 | 1,015.7 | |||||||||||
U.S. Retail Pet Foods | 728.1 | 551.1 | 1,399.3 | 1,071.8 | |||||||||||
International and Away From Home | 286.6 | 293.3 | 545.1 | 554.2 | |||||||||||
Total net sales | $ | 2,021.5 | $ | 1,923.6 | $ | 3,924.0 | $ | 3,672.5 | |||||||
Segment profit: | |||||||||||||||
U.S. Retail Coffee | $ | 174.3 | $ | 152.1 | $ | 322.1 | $ | 275.3 | |||||||
U.S. Retail Consumer Foods | 134.3 | 130.2 | 231.6 | 240.3 | |||||||||||
U.S. Retail Pet Foods | 123.9 | 122.4 | 224.3 | 220.2 | |||||||||||
International and Away From Home | 56.7 | 55.4 | 100.1 | 95.6 | |||||||||||
Total segment profit | $ | 489.2 | $ | 460.1 | $ | 878.1 | $ | 831.4 | |||||||
Amortization | (59.7 | ) | (51.6 | ) | (120.2 | ) | (103.1 | ) | |||||||
Interest expense – net | (53.6 | ) | (41.6 | ) | (107.2 | ) | (83.6 | ) | |||||||
Unallocated derivative gains (losses) | (0.1 | ) | 9.7 | (22.1 | ) | 22.3 | |||||||||
Cost of products sold – special project costs (A) | — | (0.9 | ) | — | (1.6 | ) | |||||||||
Other special project costs (A) | (25.4 | ) | (9.7 | ) | (33.1 | ) | (36.8 | ) | |||||||
Corporate administrative expenses | (73.5 | ) | (75.5 | ) | (145.3 | ) | (144.9 | ) | |||||||
Other income (expense) – net | (7.5 | ) | 1.3 | (7.7 | ) | (2.9 | ) | ||||||||
Income before income taxes | $ | 269.4 | $ | 291.8 | $ | 442.5 | $ | 480.8 |
(A) | Special project costs includes integration and restructuring costs. For more information, see Note 5: Integration and Restructuring Costs. |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net sales: | |||||||||||||||
United States | $ | 1,873.2 | $ | 1,771.8 | $ | 3,645.5 | $ | 3,389.1 | |||||||
International: | |||||||||||||||
Canada | $ | 114.3 | $ | 116.0 | $ | 212.5 | $ | 212.9 | |||||||
All other international | 34.0 | 35.8 | 66.0 | 70.5 | |||||||||||
Total international | $ | 148.3 | $ | 151.8 | $ | 278.5 | $ | 283.4 | |||||||
Total net sales | $ | 2,021.5 | $ | 1,923.6 | $ | 3,924.0 | $ | 3,672.5 |
Three Months Ended October 31, | Six Months Ended October 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | Primary Reportable Segment (A) | ||||||||||||
Coffee | $ | 635.5 | $ | 649.3 | $ | 1,213.8 | $ | 1,221.6 | U.S. Retail Coffee | |||||||
Dog food | 334.9 | 195.7 | 643.4 | 384.4 | U.S. Retail Pet Foods | |||||||||||
Cat food | 207.3 | 177.8 | 396.3 | 343.6 | U.S. Retail Pet Foods | |||||||||||
Pet snacks | 201.9 | 192.6 | 389.7 | 373.3 | U.S. Retail Pet Foods | |||||||||||
Peanut butter | 186.9 | 184.4 | 386.1 | 384.9 | U.S. Retail Consumer Foods | |||||||||||
Fruit spreads | 83.0 | 90.5 | 168.6 | 178.1 | U.S. Retail Consumer Foods | |||||||||||
Frozen handheld | 78.7 | 69.0 | 143.2 | 119.0 | U.S. Retail Consumer Foods | |||||||||||
Baking mixes and ingredients | 58.4 | 128.4 | 142.7 | 220.2 | U.S. Retail Consumer Foods | |||||||||||
Shortening and oils | 79.3 | 77.7 | 132.2 | 134.0 | U.S. Retail Consumer Foods | |||||||||||
Portion control | 41.6 | 42.0 | 82.5 | 81.7 | International and Away From Home | |||||||||||
Juices and beverages | 33.9 | 37.3 | 66.1 | 74.4 | U.S. Retail Consumer Foods | |||||||||||
Other | 80.1 | 78.9 | 159.4 | 157.3 | International and Away From Home | |||||||||||
Total net sales | $ | 2,021.5 | $ | 1,923.6 | $ | 3,924.0 | $ | 3,672.5 |
(A) | The primary reportable segment generally represents at least 75 percent of total net sales for each respective product category. |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 188.5 | $ | 194.6 | $ | 321.5 | $ | 321.4 | |||||||
Less: Net income allocated to participating securities | 1.0 | 1.1 | 1.7 | 1.7 | |||||||||||
Net income allocated to common stockholders | $ | 187.5 | $ | 193.5 | $ | 319.8 | $ | 319.7 | |||||||
Weighted-average common shares outstanding | 113.2 | 113.0 | 113.1 | 113.0 | |||||||||||
Add: Dilutive effect of stock options | — | — | — | — | |||||||||||
Weighted-average common shares outstanding – assuming dilution | 113.2 | 113.0 | 113.1 | 113.0 | |||||||||||
Net income per common share | $ | 1.66 | $ | 1.71 | $ | 2.83 | $ | 2.83 | |||||||
Net income per common share – assuming dilution | $ | 1.66 | $ | 1.71 | $ | 2.83 | $ | 2.83 |
October 31, 2018 | April 30, 2018 | ||||||||||||||
Principal Outstanding | Carrying Amount (A) | Principal Outstanding | Carrying Amount (A) | ||||||||||||
2.20% Senior Notes due December 6, 2019 | $ | 300.0 | $ | 299.1 | $ | 300.0 | $ | 298.6 | |||||||
2.50% Senior Notes due March 15, 2020 | 500.0 | 498.4 | 500.0 | 497.8 | |||||||||||
3.50% Senior Notes due October 15, 2021 | 750.0 | 772.0 | 750.0 | 775.6 | |||||||||||
3.00% Senior Notes due March 15, 2022 | 400.0 | 397.7 | 400.0 | 397.3 | |||||||||||
3.50% Senior Notes due March 15, 2025 | 1,000.0 | 994.8 | 1,000.0 | 994.4 | |||||||||||
3.38% Senior Notes due December 15, 2027 | 500.0 | 496.0 | 500.0 | 495.8 | |||||||||||
4.25% Senior Notes due March 15, 2035 | 650.0 | 643.3 | 650.0 | 643.1 | |||||||||||
4.38% Senior Notes due March 15, 2045 | 600.0 | 585.7 | 600.0 | 585.4 | |||||||||||
Term Loan Credit Agreement due May 14, 2021 | 1,200.0 | 1,198.1 | — | — | |||||||||||
Total long-term debt | $ | 5,900.0 | $ | 5,885.1 | $ | 4,700.0 | $ | 4,688.0 |
(A) | Represents the carrying amount included in the Condensed Consolidated Balance Sheets, which includes the impact of terminated interest rate contracts, offering discounts, and capitalized debt issuance costs. |
Three Months Ended October 31, | |||||||||||||||
Defined Benefit Pension Plans | Other Postretirement Benefits | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Service cost | $ | 0.5 | $ | 1.7 | $ | 0.5 | $ | 0.5 | |||||||
Interest cost | 5.8 | 5.4 | 0.6 | 0.6 | |||||||||||
Expected return on plan assets | (6.7 | ) | (7.2 | ) | — | — | |||||||||
Amortization of net actuarial loss (gain) | 2.1 | 2.8 | (0.2 | ) | (0.1 | ) | |||||||||
Amortization of prior service cost (credit) | 0.3 | 0.3 | (0.3 | ) | (0.4 | ) | |||||||||
Net periodic benefit cost | $ | 2.0 | $ | 3.0 | $ | 0.6 | $ | 0.6 |
Six Months Ended October 31, | |||||||||||||||
Defined Benefit Pension Plans | Other Postretirement Benefits | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Service cost | $ | 1.1 | $ | 3.4 | $ | 0.9 | $ | 1.0 | |||||||
Interest cost | 11.7 | 10.8 | 1.2 | 1.1 | |||||||||||
Expected return on plan assets | (13.5 | ) | (14.4 | ) | — | — | |||||||||
Amortization of net actuarial loss (gain) | 4.1 | 5.7 | (0.3 | ) | (0.2 | ) | |||||||||
Amortization of prior service cost (credit) | 0.5 | 0.5 | (0.6 | ) | (0.7 | ) | |||||||||
Net periodic benefit cost | $ | 3.9 | $ | 6.0 | $ | 1.2 | $ | 1.2 |
October 31, 2018 | |||||||||||||||
Other Current Assets | Other Current Liabilities | Other Noncurrent Assets | Other Noncurrent Liabilities | ||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Interest rate contracts | $ | — | $ | — | $ | 10.5 | $ | — | |||||||
Total derivatives designated as hedging instruments | $ | — | $ | — | $ | 10.5 | $ | — | |||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Commodity contracts | $ | 21.1 | $ | 13.8 | $ | — | $ | 0.2 | |||||||
Foreign currency exchange contracts | 2.0 | — | — | — | |||||||||||
Total derivatives not designated as hedging instruments | $ | 23.1 | $ | 13.8 | $ | — | $ | 0.2 | |||||||
Total derivative instruments | $ | 23.1 | $ | 13.8 | $ | 10.5 | $ | 0.2 |
April 30, 2018 | |||||||||||||||
Other Current Assets | Other Current Liabilities | Other Noncurrent Assets | Other Noncurrent Liabilities | ||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Commodity contracts | $ | 14.8 | $ | 6.8 | $ | 0.4 | $ | 0.2 | |||||||
Foreign currency exchange contracts | 2.2 | 0.7 | — | — | |||||||||||
Total derivative instruments | $ | 17.0 | $ | 7.5 | $ | 0.4 | $ | 0.2 |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Gains (losses) recognized in other comprehensive income (loss) | $ | 7.9 | $ | 1.0 | $ | 10.5 | $ | 3.5 | |||||||
Less: Gains (losses) reclassified from accumulated other comprehensive income (loss) to interest expense | (0.1 | ) | (0.2 | ) | (0.2 | ) | (0.3 | ) | |||||||
Change in accumulated other comprehensive income (loss) | $ | 8.0 | $ | 1.2 | $ | 10.7 | $ | 3.8 |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Gains (losses) on commodity contracts | $ | (3.2 | ) | $ | (13.9 | ) | $ | (30.1 | ) | $ | 2.5 | ||||
Gains (losses) on foreign currency exchange contracts | 0.8 | 4.3 | 1.5 | (5.2 | ) | ||||||||||
Total gains (losses) recognized in cost of products sold | $ | (2.4 | ) | $ | (9.6 | ) | $ | (28.6 | ) | $ | (2.7 | ) |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net gains (losses) on mark-to-market valuation of unallocated derivative positions | $ | (2.4 | ) | $ | (9.6 | ) | $ | (28.6 | ) | $ | (2.7 | ) | |||
Less: Net gains (losses) on derivative positions reclassified to segment operating profit | (2.3 | ) | (19.3 | ) | (6.5 | ) | (25.0 | ) | |||||||
Unallocated derivative gains (losses) | $ | (0.1 | ) | $ | 9.7 | $ | (22.1 | ) | $ | 22.3 |
October 31, 2018 | April 30, 2018 | ||||||
Commodity contracts | $ | 949.1 | $ | 658.0 | |||
Foreign currency exchange contracts | 64.0 | 122.1 | |||||
Interest rate contract | 500.0 | — |
October 31, 2018 | April 30, 2018 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Marketable securities and other investments | $ | 46.4 | $ | 46.4 | $ | 45.8 | $ | 45.8 | |||||||
Derivative financial instruments – net | 19.6 | 19.6 | 9.7 | 9.7 | |||||||||||
Long-term debt | $ | (5,885.1 | ) | $ | (5,793.5 | ) | $ | (4,688.0 | ) | $ | (4,579.8 | ) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at October 31, 2018 | ||||||||||||
Marketable securities and other investments: (A) | |||||||||||||||
Equity mutual funds | $ | 10.4 | $ | — | $ | — | $ | 10.4 | |||||||
Municipal obligations | — | 35.8 | — | 35.8 | |||||||||||
Money market funds | 0.2 | — | — | 0.2 | |||||||||||
Derivative financial instruments: (B) | |||||||||||||||
Commodity contracts – net | 6.7 | 0.4 | — | 7.1 | |||||||||||
Foreign currency exchange contracts – net | 0.1 | 1.9 | — | 2.0 | |||||||||||
Interest rate contract | — | 10.5 | — | 10.5 | |||||||||||
Long-term debt (C) | (4,466.2 | ) | (1,327.3 | ) | — | (5,793.5 | ) | ||||||||
Total financial instruments measured at fair value | $ | (4,448.8 | ) | $ | (1,278.7 | ) | $ | — | $ | (5,727.5 | ) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at April 30, 2018 | ||||||||||||
Marketable securities and other investments: (A) | |||||||||||||||
Equity mutual funds | $ | 9.3 | $ | — | $ | — | $ | 9.3 | |||||||
Municipal obligations | — | 36.1 | — | 36.1 | |||||||||||
Money market funds | 0.4 | — | — | 0.4 | |||||||||||
Derivative financial instruments: (B) | |||||||||||||||
Commodity contracts – net | 7.2 | 1.0 | — | 8.2 | |||||||||||
Foreign currency exchange contracts – net | 0.1 | 1.4 | — | 1.5 | |||||||||||
Long-term debt (C) | (4,579.8 | ) | — | — | (4,579.8 | ) | |||||||||
Total financial instruments measured at fair value | $ | (4,562.8 | ) | $ | 38.5 | $ | — | $ | (4,524.3 | ) |
(A) | Marketable securities and other investments consist of funds maintained for the payment of benefits associated with nonqualified retirement plans. The funds include equity securities listed in active markets, municipal obligations valued by a third party using valuation techniques that utilize inputs that are derived principally from or corroborated by observable market data, and money market funds with maturities of three months or less. Based on the short-term nature of these money market funds, carrying value approximates fair value. As of October 31, 2018, our municipal obligations are scheduled to mature as follows: $1.4 in 2019, $0.9 in 2020, $1.0 in 2021, $1.0 in 2022, and the remaining $31.5 in 2023 and beyond. |
(B) | Level 1 commodity and foreign currency exchange derivatives are valued using quoted market prices for identical instruments in active markets. Level 2 commodity and foreign currency exchange derivatives are valued using quoted prices for similar assets or liabilities in active markets. The Level 2 interest rate contract is valued using standard valuation techniques, the income approach, and observable Level 2 market expectations at the measurement date to convert future amounts to a single discounted present value. Level 2 inputs for the interest rate contract valuation are |
(C) | Long-term debt is composed of public Senior Notes classified as Level 1 and the Term Loan classified as Level 2. The public Senior Notes are traded in an active secondary market and valued using quoted prices. The fair value of the Term Loan is based on the net present value of each interest and principal payment calculated utilizing an interest rate derived from an estimated yield curve obtained from independent pricing sources for similar types of term loan borrowing arrangements. |
Foreign Currency Translation Adjustment | Net Gains (Losses) on Cash Flow Hedging Derivatives (A) | Pension and Other Postretirement Liabilities (B) | Unrealized Gain (Loss) on Available- for-Sale Securities | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at May 1, 2018 | $ | (16.4 | ) | $ | (2.9 | ) | $ | (101.0 | ) | $ | 3.6 | $ | (116.7 | ) | |||||
Reclassification adjustments | — | 0.2 | 4.3 | — | 4.5 | ||||||||||||||
Current period credit (charge) | (11.7 | ) | 10.5 | — | 0.8 | (0.4 | ) | ||||||||||||
Income tax benefit (expense) | — | (2.5 | ) | (1.1 | ) | (0.2 | ) | (3.8 | ) | ||||||||||
Balance at October 31, 2018 | $ | (28.1 | ) | $ | 5.3 | $ | (97.8 | ) | $ | 4.2 | $ | (116.4 | ) |
Foreign Currency Translation Adjustment | Net Gains (Losses) on Cash Flow Hedging Derivatives (A) | Pension and Other Postretirement Liabilities (B) | Unrealized Gain (Loss) on Available- for-Sale Securities | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at May 1, 2017 | $ | (43.0 | ) | $ | (4.4 | ) | $ | (100.0 | ) | $ | 4.0 | $ | (143.4 | ) | |||||
Reclassification adjustments | — | 0.3 | 5.3 | — | 5.6 | ||||||||||||||
Current period credit (charge) | 21.9 | 3.5 | 3.3 | (0.5 | ) | 28.2 | |||||||||||||
Income tax benefit (expense) | — | (1.4 | ) | (2.9 | ) | 0.2 | (4.1 | ) | |||||||||||
Balance at October 31, 2017 | $ | (21.1 | ) | $ | (2.0 | ) | $ | (94.3 | ) | $ | 3.7 | $ | (113.7 | ) |
(A) | The reclassification from accumulated other comprehensive income (loss) to interest expense was related to terminated interest rate contracts. The current period credit relates to the unrealized gain on the interest rate contract entered into in June 2018, and the prior period credit relates to the gain on the interest rate contract terminated in December 2017. For additional information, see Note 11: Derivative Financial Instruments. |
(B) | Amortization of net losses was reclassified from accumulated other comprehensive income (loss) to other income (expense) – net. |
October 31, 2018 | April 30, 2018 | ||||
Common shares authorized | 300.0 | 300.0 | |||
Common shares outstanding | 113.8 | 113.6 | |||
Treasury shares | 32.7 | 32.9 |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||
2018 | 2017 | % Increase (Decrease) | 2018 | 2017 | % Increase (Decrease) | ||||||||||||||||
Net sales | $ | 2,021.5 | $ | 1,923.6 | 5 | % | $ | 3,924.0 | $ | 3,672.5 | 7 | % | |||||||||
Gross profit | $ | 771.3 | $ | 755.0 | 2 | $ | 1,449.5 | $ | 1,417.1 | 2 | |||||||||||
% of net sales | 38.2 | % | 39.2 | % | 36.9 | % | 38.6 | % | |||||||||||||
Operating income | $ | 330.5 | $ | 332.1 | — | $ | 557.4 | $ | 567.3 | (2 | ) | ||||||||||
% of net sales | 16.3 | % | 17.3 | % | 14.2 | % | 15.4 | % | |||||||||||||
Net income: | |||||||||||||||||||||
Net income | $ | 188.5 | $ | 194.6 | (3 | ) | $ | 321.5 | $ | 321.4 | — | ||||||||||
Net income per common share – assuming dilution | $ | 1.66 | $ | 1.71 | (3 | ) | $ | 2.83 | $ | 2.83 | — | ||||||||||
Adjusted gross profit (A) | $ | 771.4 | $ | 746.2 | 3 | $ | 1,471.6 | $ | 1,396.4 | 5 | |||||||||||
% of net sales | 38.2 | % | 38.8 | % | 37.5 | % | 38.0 | % | |||||||||||||
Adjusted operating income (A) | $ | 415.7 | $ | 384.6 | 8 | $ | 732.8 | $ | 686.5 | 7 | |||||||||||
% of net sales | 20.6 | % | 20.0 | % | 18.7 | % | 18.7 | % | |||||||||||||
Adjusted income: (A) | |||||||||||||||||||||
Income | $ | 246.5 | $ | 229.5 | 7 | $ | 448.9 | $ | 401.1 | 12 | |||||||||||
Earnings per share – assuming dilution | $ | 2.17 | $ | 2.02 | 7 | $ | 3.95 | $ | 3.53 | 12 |
(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. |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||||||||||
2018 | 2017 | Increase (Decrease) | % | 2018 | 2017 | Increase (Decrease) | % | ||||||||||||||||||||||
Net sales | $ | 2,021.5 | $ | 1,923.6 | $ | 97.9 | 5 | % | $ | 3,924.0 | $ | 3,672.5 | $ | 251.5 | 7 | % | |||||||||||||
Ainsworth acquisition | (184.2 | ) | — | (184.2 | ) | (10 | ) | (347.0 | ) | — | (347.0 | ) | (9 | ) | |||||||||||||||
Baking divestiture | — | (74.2 | ) | 74.2 | 4 | — | (74.2 | ) | 74.2 | 2 | |||||||||||||||||||
Foreign currency exchange | 4.9 | — | 4.9 | — | 4.1 | — | 4.1 | — | |||||||||||||||||||||
Net sales excluding acquisition, divestiture, and foreign currency exchange (A) | $ | 1,842.2 | $ | 1,849.4 | $ | (7.2 | ) | — | % | $ | 3,581.1 | $ | 3,598.3 | $ | (17.2 | ) | — | % |
(A) | Net sales excluding acquisition, divestiture, and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information because it enables comparison of results on a year-over-year basis. |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Gross profit | 38.2 | % | 39.2 | % | 36.9 | % | 38.6 | % | |||
Selling, distribution, and administrative expenses: | |||||||||||
Marketing | 6.8 | % | 6.1 | % | 7.1 | % | 6.3 | % | |||
Selling | 3.3 | 3.4 | 3.4 | 3.6 | |||||||
Distribution | 3.3 | 3.2 | 3.4 | 3.2 | |||||||
General and administrative | 5.6 | 6.1 | 5.7 | 6.1 | |||||||
Total selling, distribution, and administrative expenses | 18.9 | % | 18.7 | % | 19.5 | % | 19.3 | % | |||
Amortization | 3.0 | 2.7 | 3.1 | 2.8 | |||||||
Other special project costs | 1.3 | 0.5 | 0.8 | 1.0 | |||||||
Other operating expense (income) – net | (1.3 | ) | 0.1 | (0.7 | ) | — | |||||
Operating income | 16.3 | % | 17.3 | % | 14.2 | % | 15.4 | % |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||
2018 | 2017 | % Increase (Decrease) | 2018 | 2017 | % Increase (Decrease) | ||||||||||||||||
Net sales: | |||||||||||||||||||||
U.S. Retail Coffee | $ | 544.9 | $ | 551.4 | (1 | )% | $ | 1,034.4 | $ | 1,030.8 | — | % | |||||||||
U.S. Retail Consumer Foods | 461.9 | 527.8 | (12 | ) | 945.2 | 1,015.7 | (7 | ) | |||||||||||||
U.S. Retail Pet Foods | 728.1 | 551.1 | 32 | 1,399.3 | 1,071.8 | 31 | |||||||||||||||
International and Away From Home | 286.6 | 293.3 | (2 | ) | 545.1 | 554.2 | (2 | ) | |||||||||||||
Segment profit: | |||||||||||||||||||||
U.S. Retail Coffee | $ | 174.3 | $ | 152.1 | 15 | % | $ | 322.1 | $ | 275.3 | 17 | % | |||||||||
U.S. Retail Consumer Foods | 134.3 | 130.2 | 3 | 231.6 | 240.3 | (4 | ) | ||||||||||||||
U.S. Retail Pet Foods | 123.9 | 122.4 | 1 | 224.3 | 220.2 | 2 | |||||||||||||||
International and Away From Home | 56.7 | 55.4 | 2 | 100.1 | 95.6 | 5 | |||||||||||||||
Segment profit margin: | |||||||||||||||||||||
U.S. Retail Coffee | 32.0 | % | 27.6 | % | 31.1 | % | 26.7 | % | |||||||||||||
U.S. Retail Consumer Foods | 29.1 | 24.7 | 24.5 | 23.7 | |||||||||||||||||
U.S. Retail Pet Foods | 17.0 | 22.2 | 16.0 | 20.5 | |||||||||||||||||
International and Away From Home | 19.8 | 18.9 | 18.4 | 17.3 |
Six Months Ended October 31, | |||||||
2018 | 2017 | ||||||
Net cash provided by (used for) operating activities | $ | 445.9 | $ | 434.6 | |||
Net cash provided by (used for) investing activities | (1,718.9 | ) | (106.3 | ) | |||
Net cash provided by (used for) financing activities | 1,256.2 | (321.2 | ) | ||||
Net cash provided by (used for) operating activities | $ | 445.9 | $ | 434.6 | |||
Additions to property, plant, and equipment | (179.1 | ) | (130.0 | ) | |||
Free cash flow (A) | $ | 266.8 | $ | 304.6 |
(A) | Free cash flow is a non-GAAP financial measure used by management to evaluate the amount of cash available for debt repayment, dividend distribution, acquisition opportunities, share repurchases, and other corporate purposes. |
October 31, 2018 | April 30, 2018 | ||||||
Short-term borrowings | $ | 390.0 | $ | 144.0 | |||
Long-term debt | 5,885.1 | 4,688.0 | |||||
Total debt | $ | 6,275.1 | $ | 4,832.0 | |||
Shareholders’ equity | 8,030.0 | 7,891.1 | |||||
Total capital | $ | 14,305.1 | $ | 12,723.1 |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Gross profit reconciliation: | |||||||||||||||
Gross profit | $ | 771.3 | $ | 755.0 | $ | 1,449.5 | $ | 1,417.1 | |||||||
Unallocated derivative losses (gains) | 0.1 | (9.7 | ) | 22.1 | (22.3 | ) | |||||||||
Cost of products sold – special project costs | — | 0.9 | — | 1.6 | |||||||||||
Adjusted gross profit | $ | 771.4 | $ | 746.2 | $ | 1,471.6 | $ | 1,396.4 | |||||||
Operating income reconciliation: | |||||||||||||||
Operating income | $ | 330.5 | $ | 332.1 | $ | 557.4 | $ | 567.3 | |||||||
Amortization | 59.7 | 51.6 | 120.2 | 103.1 | |||||||||||
Unallocated derivative losses (gains) | 0.1 | (9.7 | ) | 22.1 | (22.3 | ) | |||||||||
Cost of products sold – special project costs | — | 0.9 | — | 1.6 | |||||||||||
Other special project costs | 25.4 | 9.7 | 33.1 | 36.8 | |||||||||||
Adjusted operating income | $ | 415.7 | $ | 384.6 | $ | 732.8 | $ | 686.5 | |||||||
Net income reconciliation: | |||||||||||||||
Net income | $ | 188.5 | $ | 194.6 | $ | 321.5 | $ | 321.4 | |||||||
Income tax expense (benefit) | 80.9 | 97.2 | 121.0 | 159.4 | |||||||||||
Amortization | 59.7 | 51.6 | 120.2 | 103.1 | |||||||||||
Unallocated derivative losses (gains) | 0.1 | (9.7 | ) | 22.1 | (22.3 | ) | |||||||||
Cost of products sold – special project costs | — | 0.9 | — | 1.6 | |||||||||||
Other special project costs | 25.4 | 9.7 | 33.1 | 36.8 | |||||||||||
Adjusted income before income taxes | $ | 354.6 | $ | 344.3 | $ | 617.9 | $ | 600.0 | |||||||
Income taxes, as adjusted (A) | 108.1 | 114.8 | 169.0 | 198.9 | |||||||||||
Adjusted income | $ | 246.5 | $ | 229.5 | $ | 448.9 | $ | 401.1 | |||||||
Weighted-average shares – assuming dilution | 113.7 | 113.6 | 113.7 | 113.6 | |||||||||||
Adjusted earnings per share – assuming dilution | $ | 2.17 | $ | 2.02 | $ | 3.95 | $ | 3.53 |
(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. |
Total | 2019 | 2020-2021 | 2022-2023 | 2024 and beyond | |||||||||||||||
Long-term debt obligations, including current portion (A) | $ | 5,900.0 | $ | — | $ | 800.0 | $ | 2,350.0 | $ | 2,750.0 | |||||||||
Interest payments (B) | 1,815.9 | 104.5 | 409.4 | 238.6 | 1,063.4 | ||||||||||||||
Operating lease obligations (C) | 197.1 | 23.0 | 76.0 | 62.2 | 35.9 | ||||||||||||||
Purchase obligations (D) | 1,258.7 | 801.2 | 432.2 | 22.2 | 3.1 | ||||||||||||||
Other liabilities (E) | 286.6 | 26.1 | 43.6 | 26.6 | 190.3 | ||||||||||||||
Total | $ | 9,458.3 | $ | 954.8 | $ | 1,761.2 | $ | 2,699.6 | $ | 4,042.7 |
(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 and 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 $27.5 under FASB 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. |
October 31, 2018 | April 30, 2018 | ||||||
High | $ | 55.5 | $ | 36.0 | |||
Low | 15.3 | 17.0 | |||||
Average | 34.8 | 26.8 |
• | our ability to successfully integrate the acquired Ainsworth business in a timely and cost-effective manner; |
• | our ability to achieve synergies and cost savings related to the Ainsworth acquisition in the amounts and within the time frames currently anticipated; |
• | our ability to achieve cost savings related to our organization optimization and cost management programs in the amounts and within the time frames currently anticipated; |
• | our ability to generate sufficient cash flow to meet our cash deleveraging objectives; |
• | volatility of commodity, energy, and other input costs; |
• | risks associated with derivative and purchasing strategies we employ to manage commodity pricing risks; |
• | the availability of reliable transportation on acceptable terms; |
• | our ability to implement and realize the full benefit of price changes, and the impact of the timing of the price changes to profits and cash flow in a particular period; |
• | the success and cost of marketing and sales programs and strategies intended to promote growth in our businesses, including product innovation; |
• | general competitive activity in the market, including competitors’ pricing practices and promotional spending levels; |
• | the impact of food security concerns involving either our products or our competitors’ products; |
• | the impact of accidents, extreme weather, and natural disasters; |
• | the concentration of certain of our businesses with key customers and suppliers, including single-source suppliers of certain key raw materials and finished goods, and our ability to manage and maintain key relationships; |
• | the timing and amount of capital expenditures and share repurchases; |
• | impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets or changes in useful lives of other intangible assets; |
• | the impact of new or changes to existing governmental laws and regulations and their application, including tariffs; |
• | the outcome of tax examinations, changes in tax laws, and other tax matters; |
• | foreign currency and interest rate fluctuations; and |
• | risks related to other factors described under “Risk Factors” in other reports and statements we have filed with the U.S. Securities and Exchange Commission. |
(a) | (b) | (c) | (d) | ||||||||||
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs | |||||||||
August 1, 2018 - August 31, 2018 | 6 | $ | 117.14 | — | 3,586,598 | ||||||||
September 1, 2018 - September 30, 2018 | 1,379 | 109.44 | — | 3,586,598 | |||||||||
October 1, 2018 - October 31, 2018 | 1,100 | 103.40 | — | 3,586,598 | |||||||||
Total | 2,485 | $ | 106.78 | — | 3,586,598 |
(a) | Shares in this column include shares repurchased from stock plan recipients in lieu of cash payments. |
November 28, 2018 | THE J. M. SMUCKER COMPANY |
/s/ Mark T. Smucker | |
By: MARK T. SMUCKER | |
President and Chief Executive Officer | |
/s/ Mark R. Belgya | |
By: MARK R. BELGYA | |
Vice Chair and Chief Financial Officer |
Exhibit Number | Exhibit Description |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
(1) | I have reviewed this quarterly report on Form 10-Q of The J. M. Smucker Company; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Mark T. Smucker | ||
Name: | Mark T. Smucker | |
Title: | President and Chief Executive Officer |
(1) | I have reviewed this quarterly report on Form 10-Q of The J. M. Smucker Company; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Mark R. Belgya | ||
Name: | Mark R. Belgya | |
Title: | Vice Chair and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. |
/s/ Mark T. Smucker | ||
Name: | Mark T. Smucker | |
Title: | President and Chief Executive Officer | |
/s/ Mark R. Belgya | ||
Name: | Mark R. Belgya | |
Title: | Vice Chair and Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Oct. 31, 2018 |
Nov. 20, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | J M SMUCKER Co | |
Entity Central Index Key | 0000091419 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --04-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 113,758,133 |
Condensed Statements of Consolidated Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
|||||
Income Statement [Abstract] | ||||||||
Net sales | $ 2,021.5 | $ 1,923.6 | $ 3,924.0 | $ 3,672.5 | ||||
Cost of products sold | 1,250.2 | 1,168.6 | 2,474.5 | 2,255.4 | ||||
Gross Profit | 771.3 | 755.0 | 1,449.5 | 1,417.1 | ||||
Selling, distribution, and administrative expenses | 382.4 | 359.5 | 765.7 | 708.3 | ||||
Amortization | 59.7 | 51.6 | 120.2 | 103.1 | ||||
Other special project costs | [1],[2] | 25.4 | 9.7 | 33.1 | 36.8 | |||
Other operating expense (income) – net | (26.7) | 2.1 | (26.9) | 1.6 | ||||
Operating Income | 330.5 | 332.1 | 557.4 | 567.3 | ||||
Interest expense – net | (53.6) | (41.6) | (107.2) | (83.6) | ||||
Other income (expense) – net | (7.5) | 1.3 | (7.7) | (2.9) | ||||
Income Before Income Taxes | 269.4 | 291.8 | 442.5 | 480.8 | ||||
Income tax expense (benefit) | 80.9 | 97.2 | 121.0 | 159.4 | ||||
Net Income | $ 188.5 | $ 194.6 | $ 321.5 | $ 321.4 | ||||
Earnings per common share: | ||||||||
Net Income (in dollars per share) | $ 1.66 | $ 1.71 | $ 2.83 | $ 2.83 | ||||
Net Income - Assuming Dilution (in dollars per share) | 1.66 | 1.71 | 2.83 | 2.83 | ||||
Dividends Declared per Common Share (in dollars per share) | $ 0.85 | $ 0.78 | $ 1.70 | $ 1.56 | ||||
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Condensed Statements of Consolidated Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 188.5 | $ 194.6 | $ 321.5 | $ 321.4 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (5.6) | (13.1) | (11.7) | 21.9 |
Cash flow hedging derivative activity, net of tax | 6.1 | 0.8 | 8.2 | 2.4 |
Pension and other postretirement benefit plans activity, net of tax | 1.6 | 5.9 | 3.2 | 5.7 |
Available-for-sale securities activity, net of tax | 0.3 | (0.6) | 0.6 | (0.3) |
Total Other Comprehensive Income (Loss) | 2.4 | (7.0) | 0.3 | 29.7 |
Comprehensive Income | $ 190.9 | $ 187.6 | $ 321.8 | $ 351.1 |
Condensed Statements of Consolidated Cash Flows (Unaudited) - USD ($) $ in Millions |
6 Months Ended | |
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Oct. 31, 2018 |
Oct. 31, 2017 |
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Operating Activities | ||
Net income | $ 321.5 | $ 321.4 |
Adjustments to reconcile net income to net cash provided by (used for) operations: | ||
Depreciation | 102.9 | 105.1 |
Amortization | 120.2 | 103.1 |
Share-based compensation expense | 10.5 | 12.7 |
Gain on divestiture | (26.6) | 0.0 |
Other noncash adjustments – net | 3.0 | 2.3 |
Defined benefit pension contributions | 0.0 | (0.8) |
Changes in assets and liabilities, net of effect from acquisition and divestiture: | ||
Trade receivables | (111.2) | (41.5) |
Inventories | (60.4) | (103.6) |
Other current assets | 17.6 | 19.4 |
Accounts payable | 15.2 | 54.7 |
Accrued liabilities | 60.4 | 3.3 |
Income and other taxes | 18.5 | (46.8) |
Other – net | (25.7) | 5.3 |
Net Cash Provided by (Used for) Operating Activities | 445.9 | 434.6 |
Investing Activities | ||
Business acquired, net of cash acquired | (1,903.0) | 0.0 |
Additions to property, plant, and equipment | (179.1) | (130.0) |
Proceeds from divestiture | 372.1 | 0.0 |
Other – net | (8.9) | 23.7 |
Net Cash Provided by (Used for) Investing Activities | (1,718.9) | (106.3) |
Financing Activities | ||
Short-term borrowings (repayments) – net | 246.0 | 10.0 |
Proceeds from long-term debt | 1,500.0 | 0.0 |
Repayments of long-term debt | (300.0) | (150.0) |
Quarterly dividends paid | (184.9) | (173.4) |
Purchase of treasury shares | (5.0) | (6.7) |
Other – net | 0.1 | (1.1) |
Net Cash Provided by (Used for) Financing Activities | 1,256.2 | (321.2) |
Effect of exchange rate changes on cash | (4.6) | 6.4 |
Net increase (decrease) in cash and cash equivalents | (21.4) | 13.5 |
Cash and cash equivalents at beginning of period | 192.6 | 166.8 |
Cash and Cash Equivalents at End of Period | $ 171.2 | $ 180.3 |
Basis of Presentation |
6 Months Ended |
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Oct. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 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 of 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. Certain items previously reported in the financial statements have been reclassified to conform with the current year presentation. Operating results for the six months ended October 31, 2018, are not necessarily indicative of the results that may be expected for the year ending April 30, 2019. 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, 2018. |
Revenue Recognition |
6 Months Ended |
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Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The majority of our revenue is derived from the sale of food and beverage products to food retailers and foodservice distributors and operators. We recognize revenue when obligations under the terms of a contract with a customer have been satisfied. This occurs when control of our products transfers, which typically takes place upon delivery to or pick up by the customer. Amounts due from our customers are classified as trade receivables in the Condensed Consolidated Balance Sheets and require payment on a short-term basis. Transaction price is based on the list price included in our published price list, which is then reduced by the estimated impact of trade marketing and merchandising programs, discounts, unsaleable product allowances, returns, and similar items in the same period that the revenue is recognized. To estimate the impact of these costs, we consider customer contract provisions, historical data, and our current expectations. Our trade marketing and merchandising programs consist of various promotional activities 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. For revenue disaggregated by reportable segment, geographical region, and product category, see Note 7: Reportable Segments. |
Recently Issued Accounting Standards |
6 Months Ended |
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Oct. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. It will be effective for us on May 1, 2020, with the option to early adopt at any time prior to the effective date, and it will require adoption on either a retrospective or prospective basis for all implementation costs incurred after the date of adoption. We are currently evaluating the impact the application of ASU 2018-15 will have on our financial statements and disclosures. In August 2018, the FASB also issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20) Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans. The guidance removes disclosures that are no longer considered cost beneficial, and adds new and clarifies certain other disclosure requirements. ASU 2018-14 will be effective for us on May 1, 2020, with the option to early adopt at any time prior to the effective date, and it will require adoption on a retrospective basis. We are currently evaluating the impact the application of ASU 2018-14 will have on our disclosures. In August 2018, the U.S. Securities and Exchange Commission ("SEC") adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of U.S. GAAP or other regulatory requirements. Among other changes, the amendments remove the requirement to provide the ratio of earnings to fixed charges exhibit and reduce the requirements for supplemental pro forma information related to business combinations. The annual requirement to disclose the high and low trading prices of our common stock is also removed. In addition, the disclosure requirements related to the analysis of shareholders' equity are expanded for interim financial statements. An analysis of the changes in each caption of shareholders' equity presented in the balance sheet must be provided in a note or separate statement, as well as the amount of dividends per share for each class of shares. Although this rule was effective on November 5, 2018, the SEC is allowing an extended transition period to implement the expanded shareholders' equity disclosure requirements, which will be effective for us on May 1, 2019. We are continuing to evaluate the impact the application of this rule will have on our future financial statements and disclosures. In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component of the net periodic pension cost to be presented separately from the other components of the net periodic pension cost in the income statement. Additionally, only the service cost component of the net periodic pension cost is eligible for capitalization. ASU 2017-07 was effective for us on May 1, 2018. The change in presentation of service cost was applied retrospectively, while the capitalization of service cost will be applied on a prospective basis. The adoption of this ASU did not have a material impact on our financial statements and disclosures. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs rather than deferring such recognition until the asset is sold to an outside party. ASU 2016-16 was effective for us on May 1, 2018, and required adoption on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this ASU did not have an impact on our financial statements and disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, which makes changes to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 was effective for us on May 1, 2018, and required adoption on a retrospective basis. The adoption of this ASU did not impact the presentation of our financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability for all leases with a term of more than 12 months. ASU 2016-02 will be effective for us on May 1, 2019, and requires a modified retrospective application. However, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an additional transition method that allows entities to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. We expect to utilize this transition method upon adoption. We are currently compiling an inventory of our lease arrangements in order to determine the impact the new guidance will have on our financial statements and disclosures. We have selected new lease accounting software in preparation for the standard's additional reporting requirements and began implementation during the first quarter of 2019. Based on our assessment to date, we expect that the adoption of ASU 2016-02 will result in a material increase in lease-related assets and liabilities recognized in our Consolidated Balance Sheets, but we are unable to quantify the impact at this time. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the new guidance is that an entity must recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It requires additional disclosures to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows relating to customer contracts. We adopted the requirements of ASU 2014-09 and all related amendments on May 1, 2018, using the modified retrospective transition method. Adoption did not have an impact on our financial statements. The additional disclosures required are presented within Note 2: Revenue Recognition and Note 7: Reportable Segments. |
Acquisition |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition On May 14, 2018, we acquired the stock of Ainsworth Pet Nutrition, LLC (“Ainsworth”) in an all-cash transaction, valued at $1.9 billion, inclusive of a working capital adjustment. The transaction was funded with a bank term loan and borrowings under our commercial paper program of approximately $1.5 billion and $400.0, respectively. For additional information on the financing associated with this transaction, refer to Note 9: Debt and Financing Arrangements. Ainsworth is a leading producer, distributor, and marketer of premium pet food and pet snacks, predominantly within the U.S. The majority of Ainsworth’s sales are generated by the Rachael Ray® Nutrish® brand, which is driving significant growth in the premium pet food category. Ainsworth also sells pet food and pet snacks under several additional branded and private label trademarks. Prior to acquisition, Ainsworth was a privately-held company headquartered in Meadville, Pennsylvania. In addition to its headquarters, the transaction included two manufacturing facilities owned by Ainsworth, which are located in Meadville, Pennsylvania, and Frontenac, Kansas, and a leased distribution facility in Greenville, Pennsylvania. The transaction was accounted for under the acquisition method of accounting, and accordingly, the results of Ainsworth's operations, including $184.2 and $347.0 in net sales and $4.5 and $0.4 in operating income, are included in our consolidated financial statements for the three and six months ended October 31, 2018, respectively. The operating income for the six months ended October 31, 2018, includes the recognition of an unfavorable fair value purchase accounting adjustment of $10.9, attributable to the acquired inventory. 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. We estimated the fair values based on independent appraisals, discounted cash flow analyses, quoted market prices, and other estimates made by management. The purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets acquired, and the excess was recognized as goodwill. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date.
Estimated fair values for the acquisition, including goodwill, other intangible assets, property, plant, and equipment, contingent liabilities, and income taxes, are not yet finalized. The purchase price was preliminarily allocated based on information available at the date of acquisition and is subject to change as we complete our analysis of the fair values at the date of acquisition during the measurement period, not to exceed one year, as permitted under FASB Accounting Standards Codification ("ASC") 805, Business Combinations. As a result of the acquisition, we recognized goodwill of $680.9 within the U.S. Retail Pet Foods segment. Our expectation is that a portion will be deductible for tax purposes, the amount of which will be refined and ultimately determined during the measurement period. Goodwill represents the value we expect to achieve through the implementation of operational synergies and growth opportunities as we integrate Ainsworth into our U.S. Retail Pet Foods segment. The goodwill and indefinite-lived trademarks within the U.S. Retail Pet Foods segment remain susceptible to future impairment charges, as the carrying values approximate estimated fair values due to impairment charges recognized in 2018, as well as the recent acquisition of Ainsworth. Any significant adverse change in our near or long-term projections or macroeconomic conditions would result in future impairment charges. The purchase price was preliminarily allocated to the identifiable other intangible assets acquired as follows:
Ainsworth's results of operations are included in our consolidated financial statements from the date of the transaction within the U.S. Retail Pet Foods segment. Had the transaction occurred on May 1, 2017, unaudited pro forma consolidated results for the three and six months ended October 31, 2018 and 2017, would have been as follows:
The unaudited pro forma consolidated results are based on our historical financial statements and those of Ainsworth, 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 higher 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. |
Integration and Restructuring Costs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Integration and Restructuring Costs | Integration and Restructuring Costs Integration and restructuring costs primarily consist of employee-related costs and other transition and termination costs related to certain acquisition or restructuring activities. Employee-related costs include severance, retention bonuses, and relocation costs. Severance costs and retention bonuses are recognized over the estimated future service period of the affected 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 the integration or restructuring activities, which are expensed as incurred. These one-time costs are not allocated to segment profit, and the majority of these costs are reported in other special project costs in the Condensed Statements of Consolidated Income. The obligation related to employee separation costs is included in other current liabilities in the Condensed Consolidated Balance Sheets. Integration Costs: Total one-time costs related to the acquisition of Ainsworth are anticipated to be approximately $50.0, of which the majority are expected to be cash charges. Of the total anticipated one-time costs, we expect approximately half to be employee-related costs. Approximately two-thirds of the total one-time costs are expected to be incurred by the end of 2019. The following table summarizes our one-time costs incurred related to the Ainsworth acquisition.
Noncash charges of $1.0 and $1.8 were included in the one-time costs incurred during the three and six months ended October 31, 2018, respectively. Noncash charges included in total one-time costs incurred to date were $1.8 and primarily consisted of accelerated depreciation. The obligation related to severance costs and retention bonuses was $5.3 at October 31, 2018. All integration activities related to the acquisition of Big Heart Pet Brands (“Big Heart”) were complete as of April 30, 2018, and as a result, we did not incur any integration costs during the three and six months ended October 31, 2018. During the three and six months ended October 31, 2017, we incurred one-time costs of $7.8 and $18.9, respectively. Noncash charges of $1.2 and $2.5 were included in the one-time costs incurred during the three and six months ended October 31, 2017, respectively, and primarily consisted of share-based compensation and accelerated depreciation. The obligation related to severance costs and retention bonuses was $0.1 at April 30, 2018, and was fully satisfied at October 31, 2018. Restructuring Costs: An organization optimization program was approved by the Board of Directors (the “Board”) during the fourth quarter of 2016. Under this program, we identified opportunities to reduce costs and optimize the organization. Related projects included an organizational redesign and the optimization of our manufacturing footprint. The program was recently expanded to include the restructuring of our geographic footprint, which includes the centralization of our pet food and pet snacks business, as well as certain international non-manufacturing functions, to our corporate headquarters in Orrville, Ohio, furthering collaboration and enhanced agility, while improving cost efficiency. As a result of the program, all coffee production at our Harahan, Louisiana, facility was consolidated into one of our facilities in New Orleans, Louisiana, during 2018. We also closed our international offices in China and Mexico during the second quarter of 2019, and we plan to close the San Francisco and Burbank, California, offices by the end of 2019. Upon completion of the remaining initiatives, we anticipate that the organization optimization program will result in total headcount reductions of approximately 450 full-time positions, of which approximately 75 percent were reduced as of October 31, 2018. Total restructuring costs are expected to be approximately $75.0, of which the majority represents employee-related costs. The majority of the remaining restructuring costs are expected to be incurred through the end of 2019. The following table summarizes our one-time costs incurred related to the organization optimization program.
Noncash charges of $0.9 and $0.8 were included in the one-time costs incurred during the three months ended October 31, 2018 and 2017, respectively, and $1.0 and $6.9 during the six months ended October 31, 2018 and 2017, respectively. Noncash charges included in total one-time costs incurred to date were $12.9 and primarily consisted of accelerated depreciation. The obligation related to severance costs and retention bonuses was $9.9 and $0.3 at October 31, 2018, and April 30, 2018, respectively. |
Divestiture |
6 Months Ended |
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Oct. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Divestiture On August 31, 2018, we sold our U.S. baking business to Brynwood Partners VII L.P. and Brynwood Partners VIII L.P., subsidiaries of Brynwood Partners, an unrelated party. The transaction included products that were primarily sold in U.S. retail channels under the Pillsbury®, Martha White®, Hungry Jack®, White Lily®, and Jim Dandy® brands, along with all relevant trademarks and licensing agreements, and our manufacturing facility in Toledo, Ohio. This business generated net sales of approximately $370.0 in 2018. The transaction did not include our baking business in Canada. 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 $372.1, which were net of cash transaction costs, and are subject to a working capital adjustment. Upon completion of the transaction, we recognized a pre-tax gain of $26.6 during the second quarter of 2019, which is included in other operating expense (income) – net within the Condensed Statements of Consolidated Income. |
Reportable Segments |
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Oct. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | 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 Consumer Foods, U.S. Retail Pet Foods, and International and Away From Home. The U.S. Retail Coffee segment primarily includes the domestic sales of Folgers®, Dunkin’ Donuts®, and Café Bustelo® branded coffee; the U.S. Retail Consumer Foods segment primarily includes the domestic sales of Jif®, Smucker’s®, and Crisco® branded products; and the U.S. Retail Pet Foods segment primarily includes the domestic sales of Rachael Ray Nutrish, Meow Mix®, Milk-Bone®, Natural Balance®, Kibbles ’n Bits®, 9Lives®, Pup-Peroni®, and Nature’s Recipe® branded products. The International and Away From Home segment comprises 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, 2018, the convenience store channel, which was previously included in the U.S. retail segments, is now included in the International and Away From Home segment. Segment performance for the three and six months ended October 31, 2017, has been reclassified for this realignment. 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 corporate administrative expenses, unallocated gains and losses on commodity and foreign currency exchange derivative activities, as well as amortization expense and impairment charges related to intangible assets. 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.
The following table presents certain geographical information.
The following table presents product category information.
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Earnings per Share |
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Oct. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share The following table sets forth the computation of net income per common share and net income per common share – assuming dilution under the two-class method.
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Debt and Financing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Financing Arrangements | Debt and Financing Arrangements Long-term debt consists of the following:
In June 2018, we entered into an interest rate swap, with a notional value of $500.0, to manage our exposure to interest rate volatility associated with anticipated debt financing in 2020. This interest rate contract is designated as a cash flow hedge, and as a result, the mark-to-market gains or losses on the contract are deferred and included as a component of accumulated other comprehensive income (loss) and reclassified to interest expense in the period during which the hedged transaction affects earnings. At October 31, 2018, an unrealized gain of $10.5 was deferred in accumulated other comprehensive income (loss) for this derivative instrument. For additional information, see Note 11: Derivative Financial Instruments. In April 2018, we entered into a senior unsecured delayed-draw Term Loan Credit Agreement (“Term Loan”) with a syndicate of banks and an available commitment amount of $1.5 billion. The full amount of the Term Loan was drawn on May 14, 2018, to partially finance the Ainsworth acquisition, as discussed in Note 4: Acquisition. Borrowings under the Term Loan bear interest on the prevailing U.S. Prime Rate or London Interbank Offered Rate (“LIBOR”), based on our election, and is payable either on a quarterly basis or at the end of the borrowing term. The Term Loan does not require scheduled amortization payments. Voluntary prepayments are permitted without premium or penalty. During the second quarter of 2019, we prepaid $300.0 on the Term Loan. The interest rate on the Term Loan at October 31, 2018, was 3.42 percent. We have incurred total capitalized debt issuance costs of $2.8, of which $2.0 was incurred upon drawing on the Term Loan in 2019, and will be amortized to interest expense over the time period for which the debt is outstanding. All of our Senior Notes outstanding at October 31, 2018, are unsecured and interest is paid semiannually, with no required scheduled principal payments until maturity. We may prepay all or part of the Senior Notes at 100 percent of the principal amount thereof, together with the accrued and unpaid interest, and any applicable make-whole amount. We have available a $1.8 billion unsecured revolving credit facility with a group of 11 banks that matures in September 2022. Borrowings under the revolving credit facility bear interest on the prevailing U.S. Prime Rate, LIBOR, or Canadian Dealer Offered Rate, based on our election. Interest is payable either on a quarterly basis or at the end of the borrowing term. We did not have a balance outstanding under the revolving credit facility at October 31, 2018, or April 30, 2018. We participate in a commercial paper program under which we can issue short-term, unsecured commercial paper not to exceed $1.8 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. Commercial paper will be used as a continuing source of short-term financing for general corporate purposes. As of October 31, 2018, and April 30, 2018, we had $390.0 and $144.0 of short-term borrowings outstanding, respectively, which were issued under our commercial paper program at weighted-average interest rates of 2.45 percent and 2.20 percent, respectively. Interest paid totaled $84.1 and $78.9 for the three months ended October 31, 2018 and 2017, respectively, and $107.4 and $83.5 for the six months ended October 31, 2018 and 2017, respectively. This differs from interest expense due to the amortization of debt issuance costs and discounts, effect of interest rate contracts, capitalized interest, timing of interest payments, and payment of other debt fees. Our debt instruments contain certain financial covenant restrictions, including a leverage ratio and an interest coverage ratio. We are in compliance with all covenants. |
Pensions and Other Postretirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pensions and Other Postretirement Benefits | Pensions and Other Postretirement Benefits The components of our net periodic benefit cost for defined benefit pension and other postretirement benefit plans are shown below.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments We are exposed to market risks, such as changes in commodity prices, foreign currency exchange rates, and interest rates. To manage the volatility related to these exposures, we enter into various derivative transactions. We have policies in place that define acceptable instrument types we may enter into and establish controls to limit our market risk exposure. Commodity Price Management: We enter into commodity derivatives to manage price volatility and reduce the variability of future cash flows related to anticipated inventory purchases of key raw materials, notably green coffee, corn, edible oils, soybean meal, and wheat. We also enter into commodity derivatives to manage price risk for energy input costs, including diesel fuel and natural gas. Our derivative instruments generally have maturities of less than one year. We do not qualify commodity derivatives for hedge accounting treatment, and as a result, the derivative gains and losses are immediately recognized in earnings. Although we do not perform the assessments required to achieve hedge accounting for derivative positions, we believe all of our commodity derivatives are economic hedges of our risk exposure. The commodities hedged have a high inverse correlation to price changes of the derivative instrument. Thus, we would expect that over time any gain or loss in the estimated fair value of the derivatives would generally be offset by an increase or decrease in the estimated fair value of the underlying exposures. Foreign Currency Exchange Rate Hedging: We utilize foreign currency derivatives to manage the effect of foreign currency exchange fluctuations on future cash payments primarily related to purchases of certain raw materials and finished goods. The contracts generally have maturities of less than one year. We do not qualify instruments used to manage foreign currency exchange exposures for hedge accounting treatment. Interest Rate Hedging: We utilize derivative instruments to manage interest rate risk associated with anticipated debt transactions, as well as to manage changes in the fair value of our long-term debt. At the inception of an interest rate contract, the instrument is evaluated and documented for qualifying hedge accounting treatment. If the contract is designated as a cash flow hedge, the mark-to-market gains or losses on the contract are deferred and included as a component of accumulated other comprehensive income (loss) and reclassified to interest expense in the period during which the hedged transaction affects earnings. If the contract is designated as a fair value hedge, the contract is recognized at fair value on the balance sheet and changes in the fair value are recognized in interest expense. Generally, changes in the fair value of the contract are equal to changes in the fair value of the underlying debt and have no impact on earnings. In June 2018, we entered into an interest rate swap, with a notional value of $500.0, to manage our exposure to interest rate volatility associated with anticipated debt financing in 2020. This interest rate contract is designated as a cash flow hedge, and as a result, an unrealized gain of $10.5 was deferred in accumulated other comprehensive income (loss) at October 31, 2018. In June 2017, we entered into a treasury lock, with a notional value of $300.0, to manage our exposure to interest rate volatility associated with anticipated debt financing in 2018. This interest rate contract was designated as a cash flow hedge. In December 2017, concurrent with the pricing of the Senior Notes due December 15, 2027, we terminated the treasury lock prior to maturity. The termination resulted in a gain of $2.7, which was deferred and included as a component of accumulated other comprehensive income (loss) and is being amortized as a reduction to interest expense over the life of the debt. In 2015, we terminated the interest rate swap on the 3.50 percent Senior Notes due October 15, 2021, which was designated as a fair value hedge and used to hedge against the changes in the fair value of the debt. As a result of the early termination, we received $58.1 in cash, which included $4.6 of accrued and prepaid interest. The gain on termination was deferred and is being recognized over the remaining life of the underlying debt as a reduction of interest expense. To date, we have recognized $29.0, of which $2.0 and $4.0 was recognized during the three and six months ended October 31, 2018, respectively. The remaining gain will be recognized as follows: $4.0 through the remainder of 2019, $8.1 in 2020, $8.4 in 2021, and $4.0 in 2022. The following tables set forth the gross fair value amounts of derivative instruments recognized in the Condensed Consolidated Balance Sheets.
We have elected to not offset fair value amounts recognized for our exchange-traded derivative instruments and our cash margin accounts executed with the same counterparty that are generally subject to enforceable netting agreements. We are required to maintain cash margin accounts in connection with funding the settlement of our open positions. At October 31, 2018, and April 30, 2018, we maintained cash margin account balances of $18.6 and $10.9, respectively, included in other current assets in the Condensed Consolidated Balance Sheets. The change in the cash margin account balances is included in other – net, investing activities in the Condensed Statements of Consolidated Cash Flows. In the event of default and immediate net settlement of all of our open positions with individual counterparties, all of our derivative liabilities would be fully offset by either our derivative asset positions or margin accounts based on the net asset or liability position with our individual counterparties. Interest expense – net, as presented in the Condensed Statements of Consolidated Income, was $53.6 and $41.6 for the three months ended October 31, 2018 and 2017, respectively, and was $107.2 and $83.6 for the six months ended October 31, 2018 and 2017, respectively. The following table presents information on the pre-tax gains and losses recognized on interest rate contracts designated as cash flow hedges.
Included as a component of accumulated other comprehensive income (loss) at October 31, 2018, and April 30, 2018, were deferred net pre-tax gains of $6.9 and losses of $3.8, respectively, related to the active and terminated interest rate contracts. The related net tax expense recognized in accumulated other comprehensive income (loss) at October 31, 2018, was $1.6 and the related net tax benefit recognized in accumulated other comprehensive income (loss) at April 30, 2018, was $0.9. Approximately $0.4 of the net pre-tax loss will be recognized over the next 12 months related to the terminated interest rate contracts. The following table presents the net gains and losses recognized in cost of products sold on derivatives not designated as hedging instruments.
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. The following table presents the activity in unallocated derivative gains and losses.
The net cumulative unallocated derivative losses at October 31, 2018, were $20.4, and the net cumulative unallocated derivative gains at April 30, 2018, were $1.7. The following table presents the gross contract notional value of outstanding derivative contracts.
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Other Financial Instruments and Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Financial Instruments and Fair Value Measurements | Other Financial Instruments and Fair Value Measurements Financial instruments, other than derivatives, that potentially subject us to significant concentrations of credit risk consist principally of cash investments, short-term borrowings, and trade receivables. The carrying value of these financial instruments approximates fair value. Our remaining financial instruments, with the exception of long-term debt, are recognized at estimated fair value in the Condensed Consolidated Balance Sheets. The following table provides information on the carrying amounts and fair values of our financial instruments.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. The following tables summarize the fair values and the levels within the fair value hierarchy in which the fair value measurements fall for our financial instruments.
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Income Taxes |
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Oct. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates for the three months ended October 31, 2018 and 2017, were 30.0 and 33.3 percent, respectively, and for the six months ended October 31, 2018 and 2017, were 27.3 and 33.2 percent, respectively. During the three-month and six-month periods ended October 31, 2018, the effective tax rate varied from the U.S. statutory income tax rate of 21.0 percent primarily due to the impact of state income taxes and the income tax expense related to the sale of the U.S. baking business. During the three-month and six-month periods ended October 31, 2017, the effective tax rate varied from the previous U.S. statutory income tax rate of 35.0 percent primarily due to the domestic manufacturing deduction, offset by the impact of state income taxes. Within the next 12 months, it is reasonably possible that we could decrease our unrecognized tax benefits by an additional $9.7, primarily as a result of expiring statute of limitations periods. U.S. Tax Reform: On December 22, 2017, the U.S. government enacted comprehensive tax reform (commonly referred to as “The Tax Cuts and Jobs Act”) that reduced the U.S. federal statutory corporate tax rate from 35.0 percent to 21.0 percent effective January 1, 2018, broadened the U.S. federal income tax base, required companies to pay a one-time repatriation tax on earnings of certain foreign subsidiaries that were previously tax deferred (“transition tax”), and created new taxes on certain foreign sourced earnings as part of a new territorial tax regime. During the third quarter of 2018, we recorded a net provisional benefit of $765.8, which included the revaluation of net deferred tax liabilities at the reduced federal income tax rate, offset in part by the estimated impact of the one-time transition tax. The provisional amount recorded was based on assumptions and estimates that may change as a result of future guidance and interpretation from the Internal Revenue Service, the SEC, the FASB, and various taxing jurisdictions. All of these potential legislative and interpretive actions could result in adjustment to our provisional estimates when the accounting for the income tax effects of the Act is completed in the third quarter of 2019. During the three and six months ended October 31, 2018, we continued to refine our analysis of the impacts of the Tax Cuts and Jobs Act, and there were no adjustments to the previously recorded provisional amounts. As of October 31, 2018, the undistributed earnings of our foreign subsidiaries continue to be permanently reinvested, and we do not intend to repatriate any of the amounts. As a result, no additional income or withholding taxes have been provided for, outside of the transition tax, for the undistributed earnings or any additional outside basis differences inherent in the foreign entities. |
Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss), including the reclassification adjustments for items that are reclassified from accumulated other comprehensive income (loss) to net income, are shown below.
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Contingencies |
6 Months Ended |
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Oct. 31, 2018 | |
Contingency [Abstract] | |
Contingencies | Contingencies We, like other food manufacturers, are from time to time subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. We are currently a defendant in a variety of such legal proceedings, including certain lawsuits related to companies that we have acquired, some of which we anticipate settling in the near future. While we cannot predict with certainty the ultimate results of these proceedings or potential settlements associated with these matters, we have accrued losses for certain contingent liabilities that we have determined are probable and reasonably estimable at October 31, 2018. Based on the information known to date, with the exception of the matter discussed below, we do not believe the final outcome of these proceedings will have a material adverse effect on our financial position, results of operations, or cash flows. On May 9, 2011, an organization named Council for Education and Research on Toxics (“Plaintiff”) filed a lawsuit in the Superior Court of the State of California, County of Los Angeles, against us and additional defendants who manufacture, package, distribute, or sell packaged coffee. The lawsuit is Council for Education and Research on Toxics v. Brad Barry LLC, et al., and was a tag along to a 2010 lawsuit against companies selling “ready-to-drink” coffee based on the same claims. Both cases have since been consolidated and now include nearly eighty defendants, which constitute the great majority of the coffee industry in California. The Plaintiff alleges that we and the other defendants failed to provide warnings for our coffee products of exposure to the chemical acrylamide as required under California Health and Safety Code Section 25249.5, the California Safe Drinking Water and Toxic Enforcement Act of 1986, commonly referred to as “Proposition 65.” The Plaintiff seeks equitable relief, including providing warnings to consumers of coffee products, as well as civil penalties in the amount of the statutory maximum of $2,500.00 per day per violation of Proposition 65. The Plaintiff asserts that every consumed cup of coffee, absent a compliant warning, is equivalent to a violation under Proposition 65. As part of a joint defense group organized to defend against the lawsuit, we dispute the claims of the Plaintiff. Acrylamide is not added to coffee but is inherently present in all coffee in small amounts (measured in parts per billion) as a byproduct of the coffee bean roasting process. We have asserted multiple affirmative defenses. Trial of the first phase of the case commenced on September 8, 2014, and was limited to three affirmative defenses shared by all defendants. On September 1, 2015, the trial court issued a final ruling adverse to the defendants on all Phase 1 defenses. Trial of the second phase of the case commenced in the fall of calendar year 2017. On March 28, 2018, the trial court issued a proposed ruling adverse to the defendants on the Phase 2 defense, our last remaining defense to liability. The trial court finalized and affirmed its Phase 2 ruling on May 7, 2018, and therefore, the trial on the third phase regarding remedies issues was scheduled to commence on October 15, 2018. The trial did not proceed on the scheduled date as further described below. On June 15, 2018, the state agency responsible for administering the Proposition 65 program, the California Office of Environmental Health Hazard Assessment (“OEHHA”), issued a proposed regulation clarifying that cancer warnings are not required for coffee under Proposition 65. The defendants requested that the California Court of Appeals stay the trial on remedies until a final determination has been made on OEHHA’s proposed regulation. The California Court of Appeals granted such stay on October 12, 2018, and requested an update of the proposed regulation on January 15, 2019. If the proposed regulation becomes final, the lawsuit will likely be dismissed. At this stage of the proceedings, prior to a trial on remedies issues, we are unable to predict or reasonably estimate the potential loss or effect on our operations. Accordingly, no loss contingency has been recorded for this matter as of October 31, 2018, as the likelihood of loss is not considered probable or estimable. The trial court has discretion to impose zero penalties against us or to impose significant statutory penalties if the case proceeds. Significant labeling or warning requirements that could potentially be imposed by the trial court may increase our costs and adversely affect sales of our coffee products, as well as involve substantial expense and operational disruption, which could have a material adverse impact on our financial position, results of operations, or cash flows. Furthermore, a future appellate court decision could reverse the trial court rulings. The outcome and the financial impact of settlement, the trial, or the appellate court rulings of the case, if any, cannot be predicted at this time. |
Common Shares |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||
Common Shares | Common Shares The following table sets forth common share information.
Shareholders' Rights Plan: Pursuant to a Rights Agreement adopted by the Board on May 20, 2009 (as amended, the “Rights Agreement”), one share purchase right was associated with each of our outstanding common shares. On June 25, 2018, we and the rights agent entered into an amendment under the Rights Agreement to accelerate the expiration of the rights to purchase preferred shares (the “Rights”) under the Rights Agreement from June 2, 2019, to June 25, 2018, and had the effect of terminating the Rights Agreement on that date. At the time of the termination of the Rights Agreement, all of the Rights distributed to holders of our common shares pursuant to the Rights Agreement expired. Repurchase Program: We did not repurchase any common shares during the first six months of 2019 under a repurchase plan authorized by the Board. Share repurchases during the six months ended October 31, 2018, consisted of shares repurchased from stock plan recipients in lieu of cash payments. At October 31, 2018, we had approximately 3.6 million common shares available for repurchase pursuant to the Board's authorizations. |
Revenue Recognition (Policies) |
6 Months Ended |
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Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The majority of our revenue is derived from the sale of food and beverage products to food retailers and foodservice distributors and operators. We recognize revenue when obligations under the terms of a contract with a customer have been satisfied. This occurs when control of our products transfers, which typically takes place upon delivery to or pick up by the customer. Amounts due from our customers are classified as trade receivables in the Condensed Consolidated Balance Sheets and require payment on a short-term basis. Transaction price is based on the list price included in our published price list, which is then reduced by the estimated impact of trade marketing and merchandising programs, discounts, unsaleable product allowances, returns, and similar items in the same period that the revenue is recognized. To estimate the impact of these costs, we consider customer contract provisions, historical data, and our current expectations. Our trade marketing and merchandising programs consist of various promotional activities 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. For revenue disaggregated by reportable segment, geographical region, and product category, see Note 7: Reportable Segments. |
Recently Issued Accounting Standards (Policies) |
6 Months Ended |
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Oct. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. It will be effective for us on May 1, 2020, with the option to early adopt at any time prior to the effective date, and it will require adoption on either a retrospective or prospective basis for all implementation costs incurred after the date of adoption. We are currently evaluating the impact the application of ASU 2018-15 will have on our financial statements and disclosures. In August 2018, the FASB also issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20) Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans. The guidance removes disclosures that are no longer considered cost beneficial, and adds new and clarifies certain other disclosure requirements. ASU 2018-14 will be effective for us on May 1, 2020, with the option to early adopt at any time prior to the effective date, and it will require adoption on a retrospective basis. We are currently evaluating the impact the application of ASU 2018-14 will have on our disclosures. In August 2018, the U.S. Securities and Exchange Commission ("SEC") adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of U.S. GAAP or other regulatory requirements. Among other changes, the amendments remove the requirement to provide the ratio of earnings to fixed charges exhibit and reduce the requirements for supplemental pro forma information related to business combinations. The annual requirement to disclose the high and low trading prices of our common stock is also removed. In addition, the disclosure requirements related to the analysis of shareholders' equity are expanded for interim financial statements. An analysis of the changes in each caption of shareholders' equity presented in the balance sheet must be provided in a note or separate statement, as well as the amount of dividends per share for each class of shares. Although this rule was effective on November 5, 2018, the SEC is allowing an extended transition period to implement the expanded shareholders' equity disclosure requirements, which will be effective for us on May 1, 2019. We are continuing to evaluate the impact the application of this rule will have on our future financial statements and disclosures. In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715) Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component of the net periodic pension cost to be presented separately from the other components of the net periodic pension cost in the income statement. Additionally, only the service cost component of the net periodic pension cost is eligible for capitalization. ASU 2017-07 was effective for us on May 1, 2018. The change in presentation of service cost was applied retrospectively, while the capitalization of service cost will be applied on a prospective basis. The adoption of this ASU did not have a material impact on our financial statements and disclosures. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs rather than deferring such recognition until the asset is sold to an outside party. ASU 2016-16 was effective for us on May 1, 2018, and required adoption on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this ASU did not have an impact on our financial statements and disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, which makes changes to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 was effective for us on May 1, 2018, and required adoption on a retrospective basis. The adoption of this ASU did not impact the presentation of our financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability for all leases with a term of more than 12 months. ASU 2016-02 will be effective for us on May 1, 2019, and requires a modified retrospective application. However, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an additional transition method that allows entities to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. We expect to utilize this transition method upon adoption. We are currently compiling an inventory of our lease arrangements in order to determine the impact the new guidance will have on our financial statements and disclosures. We have selected new lease accounting software in preparation for the standard's additional reporting requirements and began implementation during the first quarter of 2019. Based on our assessment to date, we expect that the adoption of ASU 2016-02 will result in a material increase in lease-related assets and liabilities recognized in our Consolidated Balance Sheets, but we are unable to quantify the impact at this time. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the new guidance is that an entity must recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It requires additional disclosures to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows relating to customer contracts. We adopted the requirements of ASU 2014-09 and all related amendments on May 1, 2018, using the modified retrospective transition method. Adoption did not have an impact on our financial statements. The additional disclosures required are presented within Note 2: Revenue Recognition and Note 7: Reportable Segments. |
Acquisition Acquisition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preliminary fair values of the assets acquired and liabilities assumed | The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date.
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Purchase price allocated to identifiable other intangible assets | The purchase price was preliminarily allocated to the identifiable other intangible assets acquired as follows:
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Business acquisition pro forma information | Had the transaction occurred on May 1, 2017, unaudited pro forma consolidated results for the three and six months ended October 31, 2018 and 2017, would have been as follows:
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Integration and Restructuring Costs (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
One-time integration costs | The following table summarizes our one-time costs incurred related to the Ainsworth acquisition.
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One-time restructuring costs | The following table summarizes our one-time costs incurred related to the organization optimization program.
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Reportable Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income by segment |
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Geographical information | The following table presents certain geographical information.
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Product category information | The following table presents product category information.
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Earnings per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of earnings per common share, basic and diluted | The following table sets forth the computation of net income per common share and net income per common share – assuming dilution under the two-class method.
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Debt and Financing Arrangements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | Long-term debt consists of the following:
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Pensions and Other Postretirement Benefits (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net periodic benefit cost | The components of our net periodic benefit cost for defined benefit pension and other postretirement benefit plans are shown below.
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Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of derivative instruments | The following tables set forth the gross fair value amounts of derivative instruments recognized in the Condensed Consolidated Balance Sheets.
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Pre-tax gains and losses recognized on interest rate contracts designated as cash flow hedges | The following table presents information on the pre-tax gains and losses recognized on interest rate contracts designated as cash flow hedges.
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Net realized and unrealized gains and losses recognized in cost of products sold on derivatives not designated as qualified hedging instruments | The following table presents the net gains and losses recognized in cost of products sold on derivatives not designated as hedging instruments.
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Schedule of unallocated derivative gains (losses) | The following table presents the activity in unallocated derivative gains and losses.
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Outstanding derivative contracts | The following table presents the gross contract notional value of outstanding derivative contracts.
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Other Financial Instruments and Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying amount and fair value of financial instruments | The following table provides information on the carrying amounts and fair values of our financial instruments.
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Financial assets (liabilities) measured at fair value on a recurring basis | The following tables summarize the fair values and the levels within the fair value hierarchy in which the fair value measurements fall for our financial instruments.
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Accumulated Other Comprehensive Income (Loss) (Tables) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive income (loss) | The components of accumulated other comprehensive income (loss), including the reclassification adjustments for items that are reclassified from accumulated other comprehensive income (loss) to net income, are shown below.
|
Common Shares (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2018 | |||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||
Common Shares Information | The following table sets forth common share information.
|
Acquisition (Details) - USD ($) $ in Millions |
Oct. 31, 2018 |
May 14, 2018 |
Apr. 30, 2018 |
---|---|---|---|
Assets acquired: | |||
Goodwill | $ 6,474.7 | $ 5,942.2 | |
Ainsworth [Member] | |||
Assets acquired: | |||
Cash and cash equivalents | $ 1.6 | ||
Trade receivables | 66.3 | ||
Inventories | 97.8 | ||
Other current assets | 4.8 | ||
Property, plant, and equipment | 83.8 | ||
Goodwill | 680.9 | ||
Other intangible assets | 1,239.6 | ||
Other noncurrent assets | 0.3 | ||
Total assets acquired | 2,175.1 | ||
Liabilities assumed: | |||
Current liabilities | 82.5 | ||
Deferred tax liabilities | 172.0 | ||
Other noncurrent liabilities | 16.0 | ||
Total liabilities assumed | 270.5 | ||
Net assets acquired | $ 1,904.6 |
Acquisition (Details 1) - Ainsworth [Member] - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Oct. 31, 2018 |
May 14, 2018 |
|
Acquisition [Line Items] | ||
Other intangible assets | $ 1,239.6 | |
Customer And Contractual Relationships [Member] | ||
Acquisition [Line Items] | ||
Useful life | 25 years | |
Intangible assets with finite lives | 935.0 | |
Trademarks [Member] | ||
Acquisition [Line Items] | ||
Useful life | 5 years | |
Intangible assets with finite lives | 1.6 | |
Intangibles assets with indefinite lives | $ 303.0 |
Acquisition (Details 2) - Ainsworth [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
|
Unaudited pro forma consolidated results | ||||
Net sales | $ 2,021.5 | $ 2,085.3 | $ 3,951.4 | $ 3,989.9 |
Net income | $ 189.7 | $ 183.8 | $ 322.8 | $ 293.6 |
Acquisition (Details Textual) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
May 14, 2018 |
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
Apr. 30, 2018 |
|
Acquisition [Line Items] | ||||||
Goodwill | $ 6,474,700,000 | $ 6,474,700,000 | $ 5,942,200,000 | |||
Debt instrument face amount | 5,900,000,000 | 5,900,000,000 | 4,700,000,000 | |||
Net sales | 2,021,500,000 | $ 1,923,600,000 | 3,924,000,000 | $ 3,672,500,000 | ||
Operating Income (Loss) | 330,500,000 | 332,100,000 | 557,400,000 | 567,300,000 | ||
Ainsworth [Member] | ||||||
Acquisition [Line Items] | ||||||
Payments to Acquire Businesses, Gross | $ 1,900,000,000 | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Inventory | 10,900,000 | |||||
Goodwill | 680,900,000 | |||||
Commercial Paper | 400,000,000 | |||||
Net sales | 184,200,000 | 347,000,000 | ||||
Operating Income (Loss) | 4,500,000 | 400,000 | ||||
Term Loan Credit Agreement due May 14, 2021 | ||||||
Acquisition [Line Items] | ||||||
Debt instrument face amount | 1,500,000,000.0 | 1,200,000,000 | 1,200,000,000 | $ 0 | ||
Term Loan Credit Agreement due May 14, 2021 | Ainsworth [Member] | ||||||
Acquisition [Line Items] | ||||||
Debt instrument face amount | $ 1,500,000,000 | |||||
U.S. Retail Pet Foods [Member] | ||||||
Acquisition [Line Items] | ||||||
Net sales | 728,100,000 | $ 551,100,000 | 1,399,300,000 | $ 1,071,800,000 | ||
U.S. Retail Pet Foods [Member] | Ainsworth [Member] | ||||||
Acquisition [Line Items] | ||||||
Goodwill | $ 680,900,000 | $ 680,900,000 |
Integration and Restructuring Costs (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Oct. 31, 2018
USD ($)
|
Oct. 31, 2017
USD ($)
|
Oct. 31, 2018
USD ($)
Position
|
Oct. 31, 2017
USD ($)
|
Apr. 30, 2018
USD ($)
|
|
Organization Optimization Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 75.0 | $ 75.0 | |||
Restructuring and Related Cost, Cost Incurred to Date | 59.5 | 59.5 | |||
Restructuring and Related Cost, Incurred Cost | 11.2 | $ 2.8 | 16.9 | $ 19.5 | |
Restructuring and Related Cost, Noncash Charge Incurred to Date | 12.9 | 12.9 | |||
Restructuring and Related Cost, Incurred Noncash Charge | $ 0.9 | 0.8 | $ 1.0 | 6.9 | |
Restructuring and Related Cost, Expected Number of Positions Eliminated | Position | 450 | ||||
Restructuring and Related Cost, Number of Positions Eliminated, Inception to Date Percent | 75.00% | 75.00% | |||
Organization Optimization Program [Member] | Employee-related costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Cost Incurred to Date | $ 38.9 | $ 38.9 | |||
Restructuring and Related Cost, Incurred Cost | 9.5 | 1.2 | 15.1 | 11.6 | |
Restructuring Reserve | 9.9 | 9.9 | $ 0.3 | ||
Organization Optimization Program [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Cost Incurred to Date | 20.6 | 20.6 | |||
Restructuring and Related Cost, Incurred Cost | 1.7 | 1.6 | 1.8 | 7.9 | |
Ainsworth [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 50.0 | 50.0 | |||
Restructuring and Related Cost, Cost Incurred to Date | 16.2 | 16.2 | |||
Restructuring and Related Cost, Incurred Cost | 14.2 | 16.2 | |||
Restructuring and Related Cost, Noncash Charge Incurred to Date | 1.8 | 1.8 | |||
Restructuring and Related Cost, Incurred Noncash Charge | 1.0 | 1.8 | |||
Ainsworth [Member] | Employee-related costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Cost Incurred to Date | 7.8 | 7.8 | |||
Restructuring and Related Cost, Incurred Cost | 6.9 | 7.8 | |||
Restructuring Reserve | 5.3 | 5.3 | |||
Ainsworth [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Cost Incurred to Date | 8.4 | 8.4 | |||
Restructuring and Related Cost, Incurred Cost | 7.3 | 8.4 | |||
Big Heart [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 0.0 | 7.8 | 0.0 | 18.9 | |
Restructuring and Related Cost, Incurred Noncash Charge | 0.0 | $ 1.2 | 0.0 | $ 2.5 | |
Big Heart [Member] | Employee-related costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Reserve | $ 0.0 | $ 0.0 | $ 0.1 |
Divestiture (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2018 |
Oct. 31, 2017 |
Apr. 30, 2018 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from divestiture | $ 372.1 | $ 0.0 | ||
Gain on divestiture | 26.6 | $ 0.0 | ||
U.S. Baking Business [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Annual net sales | $ 370.0 | |||
Proceeds from divestiture | $ 372.1 | 372.1 | ||
U.S. Baking Business [Member] | Other Operating Income (Expense) [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on divestiture | $ 26.6 | $ 26.6 |
Reportable Segments (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
||||||
Net sales: | |||||||||
Net sales | $ 2,021.5 | $ 1,923.6 | $ 3,924.0 | $ 3,672.5 | |||||
Segment profit: | |||||||||
Segment profit | 489.2 | 460.1 | 878.1 | 831.4 | |||||
Amortization | (59.7) | (51.6) | (120.2) | (103.1) | |||||
Interest expense – net | (53.6) | (41.6) | (107.2) | (83.6) | |||||
Unallocated derivative gains (losses) | (0.1) | 9.7 | (22.1) | 22.3 | |||||
Cost of products sold – special project costs (A) | [1] | 0.0 | (0.9) | 0.0 | (1.6) | ||||
Other special project costs (A) | [1],[2] | (25.4) | (9.7) | (33.1) | (36.8) | ||||
Corporate administrative expenses | (73.5) | (75.5) | (145.3) | (144.9) | |||||
Other income (expense) – net | (7.5) | 1.3 | (7.7) | (2.9) | |||||
Income Before Income Taxes | 269.4 | 291.8 | 442.5 | 480.8 | |||||
U.S. Retail Coffee [Member] | |||||||||
Net sales: | |||||||||
Net sales | 544.9 | 551.4 | 1,034.4 | 1,030.8 | |||||
Segment profit: | |||||||||
Segment profit | 174.3 | 152.1 | 322.1 | 275.3 | |||||
U.S. Retail Consumer Foods [Member] | |||||||||
Net sales: | |||||||||
Net sales | 461.9 | 527.8 | 945.2 | 1,015.7 | |||||
Segment profit: | |||||||||
Segment profit | 134.3 | 130.2 | 231.6 | 240.3 | |||||
U.S. Retail Pet Foods [Member] | |||||||||
Net sales: | |||||||||
Net sales | 728.1 | 551.1 | 1,399.3 | 1,071.8 | |||||
Segment profit: | |||||||||
Segment profit | 123.9 | 122.4 | 224.3 | 220.2 | |||||
International and Away From Home [Member] | |||||||||
Net sales: | |||||||||
Net sales | 286.6 | 293.3 | 545.1 | 554.2 | |||||
Segment profit: | |||||||||
Segment profit | $ 56.7 | $ 55.4 | $ 100.1 | $ 95.6 | |||||
|
Reportable Segments (Details 1) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
|
Geographical information [Line Items] | ||||
Net sales | $ 2,021.5 | $ 1,923.6 | $ 3,924.0 | $ 3,672.5 |
UNITED STATES | ||||
Geographical information [Line Items] | ||||
Net sales | 1,873.2 | 1,771.8 | 3,645.5 | 3,389.1 |
CANADA | ||||
Geographical information [Line Items] | ||||
Net sales | 114.3 | 116.0 | 212.5 | 212.9 |
All Other International [Member] | ||||
Geographical information [Line Items] | ||||
Net sales | 34.0 | 35.8 | 66.0 | 70.5 |
International [Member] | ||||
Geographical information [Line Items] | ||||
Net sales | $ 148.3 | $ 151.8 | $ 278.5 | $ 283.4 |
Reportable Segment (Details 2) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
||||
Product category information [Line Items] | |||||||
Net sales | $ 2,021.5 | $ 1,923.6 | $ 3,924.0 | $ 3,672.5 | |||
Percent of product sales attributable to primary reportable segment | 75.00% | ||||||
U.S. Retail Coffee [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | 544.9 | 551.4 | $ 1,034.4 | 1,030.8 | |||
U.S. Retail Coffee [Member] | Coffee [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 635.5 | 649.3 | 1,213.8 | 1,221.6 | ||
U.S. Retail Consumer Foods [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | 461.9 | 527.8 | 945.2 | 1,015.7 | |||
U.S. Retail Consumer Foods [Member] | Peanut butter [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 186.9 | 184.4 | 386.1 | 384.9 | ||
U.S. Retail Consumer Foods [Member] | Fruit spreads [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 83.0 | 90.5 | 168.6 | 178.1 | ||
U.S. Retail Consumer Foods [Member] | Frozen handheld [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 78.7 | 69.0 | 143.2 | 119.0 | ||
U.S. Retail Consumer Foods [Member] | Baking mixes and ingredients [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 58.4 | 128.4 | 142.7 | 220.2 | ||
U.S. Retail Consumer Foods [Member] | Shortening and oils [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 79.3 | 77.7 | 132.2 | 134.0 | ||
U.S. Retail Consumer Foods [Member] | Juices and beverages [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 33.9 | 37.3 | 66.1 | 74.4 | ||
U.S. Retail Pet Foods [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | 728.1 | 551.1 | 1,399.3 | 1,071.8 | |||
U.S. Retail Pet Foods [Member] | Dog food [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 334.9 | 195.7 | 643.4 | 384.4 | ||
U.S. Retail Pet Foods [Member] | Cat food [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 207.3 | 177.8 | 396.3 | 343.6 | ||
U.S. Retail Pet Foods [Member] | Pet snacks [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 201.9 | 192.6 | 389.7 | 373.3 | ||
International and Away From Home [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | 286.6 | 293.3 | 545.1 | 554.2 | |||
International and Away From Home [Member] | Portion control [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | 41.6 | 42.0 | 82.5 | 81.7 | ||
International and Away From Home [Member] | Other [Member] | |||||||
Product category information [Line Items] | |||||||
Net sales | [1] | $ 80.1 | $ 78.9 | $ 159.4 | $ 157.3 | ||
|
Reportable Segments (Details Textual) |
6 Months Ended |
---|---|
Oct. 31, 2018
Industry
Segment
| |
Segment Reporting Information [Line Items] | |
Number of industries in which Company operates | Industry | 1 |
Number of reportable segments | Segment | 4 |
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 188.5 | $ 194.6 | $ 321.5 | $ 321.4 |
Less: Net income allocated to participating securities | 1.0 | 1.1 | 1.7 | 1.7 |
Net income allocated to common stockholders | $ 187.5 | $ 193.5 | $ 319.8 | $ 319.7 |
Weighted-average common shares outstanding (in shares) | 113.2 | 113.0 | 113.1 | 113.0 |
Add: Dilutive effect of stock options (in shares) | 0.0 | 0.0 | 0.0 | 0.0 |
Weighted-average common shares outstanding - assuming dilution (in shares) | 113.2 | 113.0 | 113.1 | 113.0 |
Net income per common share (in dollars per share) | $ 1.66 | $ 1.71 | $ 2.83 | $ 2.83 |
Net Income - Assuming Dilution (in dollars per share) | $ 1.66 | $ 1.71 | $ 2.83 | $ 2.83 |
Debt and Financing Arrangements (Details) - USD ($) |
Oct. 31, 2018 |
May 14, 2018 |
Apr. 30, 2018 |
|||
---|---|---|---|---|---|---|
Long-term debt | ||||||
Debt instrument face amount | $ 5,900,000,000 | $ 4,700,000,000 | ||||
Long-term debt | [1] | $ 5,885,100,000 | $ 4,688,000,000 | |||
2.20% Senior Notes due December 6, 2019 | ||||||
Long-term debt | ||||||
Interest rate on notes | 2.20% | 2.20% | ||||
Debt instrument face amount | $ 300,000,000 | $ 300,000,000 | ||||
Notes Payable, Noncurrent | [1] | $ 299,100,000 | $ 298,600,000 | |||
2.50% Senior Notes due March 15, 2020 | ||||||
Long-term debt | ||||||
Interest rate on notes | 2.50% | 2.50% | ||||
Debt instrument face amount | $ 500,000,000 | $ 500,000,000 | ||||
Notes Payable, Noncurrent | [1] | $ 498,400,000 | $ 497,800,000 | |||
3.50% Senior Notes due October 15, 2021 | ||||||
Long-term debt | ||||||
Interest rate on notes | 3.50% | 3.50% | ||||
Debt instrument face amount | $ 750,000,000 | $ 750,000,000 | ||||
Notes Payable, Noncurrent | [1] | $ 772,000,000 | $ 775,600,000 | |||
3.00% Senior Notes due March 15, 2022 | ||||||
Long-term debt | ||||||
Interest rate on notes | 3.00% | 3.00% | ||||
Debt instrument face amount | $ 400,000,000 | $ 400,000,000 | ||||
Notes Payable, Noncurrent | [1] | $ 397,700,000 | $ 397,300,000 | |||
3.50% Senior Notes due March 15, 2025 | ||||||
Long-term debt | ||||||
Interest rate on notes | 3.50% | 3.50% | ||||
Debt instrument face amount | $ 1,000,000,000 | $ 1,000,000,000 | ||||
Notes Payable, Noncurrent | [1] | $ 994,800,000 | $ 994,400,000 | |||
3.38% Senior Notes due December 15, 2027 | ||||||
Long-term debt | ||||||
Interest rate on notes | 3.38% | 3.38% | ||||
Debt instrument face amount | $ 500,000,000 | $ 500,000,000 | ||||
Notes Payable, Noncurrent | [1] | $ 496,000,000 | $ 495,800,000 | |||
4.25% Senior Notes due March 15, 2035 | ||||||
Long-term debt | ||||||
Interest rate on notes | 4.25% | 4.25% | ||||
Debt instrument face amount | $ 650,000,000 | $ 650,000,000 | ||||
Notes Payable, Noncurrent | [1] | $ 643,300,000 | $ 643,100,000 | |||
4.38% Senior Notes due March 15, 2045 | ||||||
Long-term debt | ||||||
Interest rate on notes | 4.38% | 4.38% | ||||
Debt instrument face amount | $ 600,000,000 | $ 600,000,000 | ||||
Notes Payable, Noncurrent | [1] | 585,700,000 | 585,400,000 | |||
Term Loan Credit Agreement due May 14, 2021 | ||||||
Long-term debt | ||||||
Debt instrument face amount | 1,200,000,000 | $ 1,500,000,000.0 | 0 | |||
Term loan credit agreement carrying value | [1] | $ 1,198,100,000 | $ 0 | |||
|
Debt and Financing Arrangements (Details Textual) |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 31, 2018
USD ($)
Bank
|
Oct. 31, 2017
USD ($)
|
Oct. 31, 2018
USD ($)
Bank
|
Oct. 31, 2017
USD ($)
|
Jul. 31, 2018
USD ($)
|
May 14, 2018
USD ($)
|
Apr. 30, 2018
USD ($)
|
|
Debt and Financing Arrangements (Textual) [Abstract] | |||||||
Debt instrument face amount | $ 5,900,000,000 | $ 5,900,000,000 | $ 4,700,000,000 | ||||
Repayments of long-term debt | $ 300,000,000 | $ 150,000,000 | |||||
Number of banks | Bank | 11 | 11 | |||||
Outstanding balance under revolving credit facility | $ 0 | $ 0 | 0 | ||||
Revolving credit facility maximum borrowing capacity | 1,800,000,000.0 | 1,800,000,000.0 | |||||
Interest paid | 84,100,000 | $ 78,900,000 | 107,400,000 | $ 83,500,000 | |||
Short-term borrowings | $ 390,000,000 | $ 390,000,000 | 144,000,000 | ||||
Senior Notes [Member] | |||||||
Debt and Financing Arrangements (Textual) [Abstract] | |||||||
Percentage of the principal amount thereof which company can prepay | 100.00% | 100.00% | |||||
Term Loan Credit Agreement due May 14, 2021 | |||||||
Debt and Financing Arrangements (Textual) [Abstract] | |||||||
Debt instrument face amount | $ 1,200,000,000 | $ 1,200,000,000 | $ 1,500,000,000.0 | $ 0 | |||
Repayments of long-term debt | $ 300,000,000 | $ 300,000,000 | |||||
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 3.42% | 3.42% | |||||
Debt Issuance Costs, Gross | $ 2,800,000 | $ 2,800,000 | |||||
Payments of Debt Issuance Costs | $ 0 | $ 2,000,000 | |||||
Commercial Paper [Member] | |||||||
Debt and Financing Arrangements (Textual) [Abstract] | |||||||
Commercial paper weighted-average interest rate | 2.45% | 2.45% | 2.20% | ||||
Commercial paper, borrowing capacity | $ 1,800,000,000.0 | $ 1,800,000,000.0 | |||||
Short-term borrowings | 390,000,000 | 390,000,000 | $ 144,000,000 | ||||
Interest rate contract | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Derivative, Notional Amount | $ 500,000,000 | 500,000,000 | $ 500,000,000 | $ 0 | |||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ 10,500,000 |
Pensions and Other Postretirement Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
|
Defined Benefit Pension Plans [Member] | ||||
Components of net periodic benefit cost | ||||
Service cost | $ 0.5 | $ 1.7 | $ 1.1 | $ 3.4 |
Interest cost | 5.8 | 5.4 | 11.7 | 10.8 |
Expected return on plan assets | (6.7) | (7.2) | (13.5) | (14.4) |
Amortization of net actuarial loss (gain) | 2.1 | 2.8 | 4.1 | 5.7 |
Amortization of prior service cost (credit) | 0.3 | 0.3 | 0.5 | 0.5 |
Net periodic benefit cost | 2.0 | 3.0 | 3.9 | 6.0 |
Other Postretirement Benefits [Member] | ||||
Components of net periodic benefit cost | ||||
Service cost | 0.5 | 0.5 | 0.9 | 1.0 |
Interest cost | 0.6 | 0.6 | 1.2 | 1.1 |
Expected return on plan assets | 0.0 | 0.0 | 0.0 | 0.0 |
Amortization of net actuarial loss (gain) | (0.2) | (0.1) | (0.3) | (0.2) |
Amortization of prior service cost (credit) | (0.3) | (0.4) | (0.6) | (0.7) |
Net periodic benefit cost | $ 0.6 | $ 0.6 | $ 1.2 | $ 1.2 |
Derivative Financial Instruments (Details) - USD ($) $ in Millions |
Oct. 31, 2018 |
Apr. 30, 2018 |
---|---|---|
Other Current Assets [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | $ 23.1 | $ 17.0 |
Other Current Assets [Member] | Designated as Hedging Instrument [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 0.0 | |
Other Current Assets [Member] | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 23.1 | 17.0 |
Other Current Assets [Member] | Interest rate contract | Designated as Hedging Instrument [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 0.0 | |
Other Current Assets [Member] | Commodity contracts | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 21.1 | 14.8 |
Other Current Assets [Member] | Foreign currency exchange contracts | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 2.0 | 2.2 |
Other Current Liabilities [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 13.8 | 7.5 |
Other Current Liabilities [Member] | Designated as Hedging Instrument [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 0.0 | |
Other Current Liabilities [Member] | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 13.8 | 7.5 |
Other Current Liabilities [Member] | Interest rate contract | Designated as Hedging Instrument [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 0.0 | |
Other Current Liabilities [Member] | Commodity contracts | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 13.8 | 6.8 |
Other Current Liabilities [Member] | Foreign currency exchange contracts | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 0.0 | 0.7 |
Other Noncurrent Assets [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 10.5 | 0.4 |
Other Noncurrent Assets [Member] | Designated as Hedging Instrument [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 10.5 | |
Other Noncurrent Assets [Member] | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 0.0 | 0.4 |
Other Noncurrent Assets [Member] | Interest rate contract | Designated as Hedging Instrument [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 10.5 | |
Other Noncurrent Assets [Member] | Commodity contracts | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 0.0 | 0.4 |
Other Noncurrent Assets [Member] | Foreign currency exchange contracts | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Assets | 0.0 | 0.0 |
Other Noncurrent Liabilities [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 0.2 | 0.2 |
Other Noncurrent Liabilities [Member] | Designated as Hedging Instrument [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 0.0 | |
Other Noncurrent Liabilities [Member] | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 0.2 | 0.2 |
Other Noncurrent Liabilities [Member] | Interest rate contract | Designated as Hedging Instrument [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 0.0 | |
Other Noncurrent Liabilities [Member] | Commodity contracts | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | 0.2 | 0.2 |
Other Noncurrent Liabilities [Member] | Foreign currency exchange contracts | Not designated as hedging instruments [Member] | ||
Fair value of derivative instruments [Line Items] | ||
Derivatives Instruments, Liabilities | $ 0.0 | $ 0.0 |
Derivative Financial Instruments (Details 1) - Cash Flow Hedging [Member] - Interest rate contract [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ 7.9 | $ 1.0 | $ 10.5 | $ 3.5 |
Change in accumulated other comprehensive income (loss) | 8.0 | 1.2 | 10.7 | 3.8 |
Interest Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) reclassified from accumulated other comprehensive income (loss) to interest expense | $ (0.1) | $ (0.2) | $ (0.2) | $ (0.3) |
Derivative Financial Instruments (Details 2) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
|
Gains and losses recognized in cost of products sold on derivatives not designated as qualified hedging instruments | ||||
Total gains (losses) recognized in cost of products sold | $ (2.4) | $ (9.6) | $ (28.6) | $ (2.7) |
Commodity contracts | ||||
Gains and losses recognized in cost of products sold on derivatives not designated as qualified hedging instruments | ||||
Total gains (losses) recognized in cost of products sold | (3.2) | (13.9) | (30.1) | 2.5 |
Foreign currency exchange contracts | ||||
Gains and losses recognized in cost of products sold on derivatives not designated as qualified hedging instruments | ||||
Total gains (losses) recognized in cost of products sold | $ 0.8 | $ 4.3 | $ 1.5 | $ (5.2) |
Derivative Financial Instruments (Details 3) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
|
Price Risk Derivatives [Abstract] | ||||
Net gains (losses) on mark-to-market valuation of unallocated derivative positions | $ (2.4) | $ (9.6) | $ (28.6) | $ (2.7) |
Less: Net gains (losses) on derivative positions reclassified to segment operating profit | (2.3) | (19.3) | (6.5) | (25.0) |
Unallocated derivative gains (losses) | $ (0.1) | $ 9.7 | $ (22.1) | $ 22.3 |
Derivative Financial Instruments (Details 4) - USD ($) $ in Millions |
Oct. 31, 2018 |
Jul. 31, 2018 |
Apr. 30, 2018 |
Jul. 31, 2017 |
---|---|---|---|---|
Commodity contracts | ||||
Outstanding derivative contracts | ||||
Gross contract notional amount | $ 949.1 | $ 658.0 | ||
Foreign currency exchange contracts | ||||
Outstanding derivative contracts | ||||
Gross contract notional amount | 64.0 | 122.1 | ||
Treasury Lock [Member] | ||||
Outstanding derivative contracts | ||||
Gross contract notional amount | $ 300.0 | |||
Interest rate contract | ||||
Outstanding derivative contracts | ||||
Gross contract notional amount | $ 500.0 | $ 500.0 | $ 0.0 |
Derivative Financial Instruments (Details Textual) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Oct. 31, 2018 |
Oct. 31, 2017 |
Apr. 30, 2018 |
Apr. 30, 2015 |
Jul. 31, 2018 |
Jul. 31, 2017 |
|
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Interest expense – net | $ 53.6 | $ 41.6 | $ 107.2 | $ 83.6 | ||||
Amortization of deferred gain on early termination agreement | 2.0 | 4.0 | ||||||
Derivative Financial Instruments (Additional Textual) [Abstract] | ||||||||
Cash margin accounts related to derivative instruments recognized | 18.6 | 18.6 | $ 10.9 | |||||
Cumulative net mark-to-market valuation of certain derivative positions recognized in unallocated derivative gains (losses) | $ (20.4) | 1.7 | ||||||
Fair Value Hedging [Member] | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Gain (loss) on early termination agreement | $ 58.1 | |||||||
Commodity contracts | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Derivative instrument maturity | 1 year | |||||||
Gross contract notional amount | 949.1 | $ 949.1 | 658.0 | |||||
Foreign currency exchange contracts | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Derivative instrument maturity | 1 year | |||||||
Gross contract notional amount | 64.0 | $ 64.0 | 122.1 | |||||
Interest rate contract | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Gross contract notional amount | 500.0 | 500.0 | 0.0 | $ 500.0 | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 10.5 | |||||||
Treasury Lock [Member] | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Gross contract notional amount | $ 300.0 | |||||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 2.7 | |||||||
Interest rate contract [Member] | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Deferred pre-tax gain (loss) included in accumulated other comprehensive loss | 6.9 | 6.9 | (3.8) | |||||
Tax impact related to deferred losses and gains on cash flow hedges included in accumulated other comprehensive loss | (1.6) | (1.6) | $ 0.9 | |||||
Effective portion of the hedge loss reclassified to interest expense over the next twelve months | (0.4) | |||||||
Gain (loss) on early termination agreement | $ 4.6 | |||||||
Interest rate contract [Member] | Cash Flow Hedging [Member] | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ 7.9 | $ 1.0 | 10.5 | $ 3.5 | ||||
Total Through Q2 2019 [Member] | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Amortization of deferred gain on early termination agreement | 29.0 | |||||||
2019 [Member] | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Amortization of deferred gain on early termination agreement | 4.0 | |||||||
2020 [Member] | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Amortization of deferred gain on early termination agreement | 8.1 | |||||||
2021 [Member] | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Amortization of deferred gain on early termination agreement | 8.4 | |||||||
2022 [Member] | ||||||||
Derivative Financial Instruments (Textual) [Abstract] | ||||||||
Amortization of deferred gain on early termination agreement | $ 4.0 | |||||||
3.50% Senior Notes due October 15, 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate on notes | 3.50% | 3.50% | 3.50% |
Other Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Millions |
Oct. 31, 2018 |
Apr. 30, 2018 |
---|---|---|
Carrying Amount [Member] | ||
Carrying amount and fair value of financial instruments | ||
Marketable securities and other investments | $ 46.4 | $ 45.8 |
Derivative financial instruments – net | 19.6 | 9.7 |
Long-term debt | (5,885.1) | (4,688.0) |
Fair Value [Member] | ||
Carrying amount and fair value of financial instruments | ||
Marketable securities and other investments | 46.4 | 45.8 |
Derivative financial instruments – net | 19.6 | 9.7 |
Long-term debt | $ (5,793.5) | $ (4,579.8) |
Other Financial Instruments and Fair Value Measurements (Details 1) - Fair value measurements recurring [Member] - USD ($) $ in Millions |
Oct. 31, 2018 |
Apr. 30, 2018 |
|||||||
---|---|---|---|---|---|---|---|---|---|
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Long-term debt | [1] | $ (5,793.5) | $ (4,579.8) | ||||||
Total financial instruments measured at fair value | (5,727.5) | (4,524.3) | |||||||
Equity mutual funds | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 10.4 | 9.3 | ||||||
Municipal obligations | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 35.8 | 36.1 | ||||||
Money market funds | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 0.2 | 0.4 | ||||||
Commodity contracts | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 7.1 | 8.2 | ||||||
Foreign currency exchange contracts - net | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 2.0 | 1.5 | ||||||
Interest rate contract | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 10.5 | |||||||
Fair Value, Inputs, Level 1 [Member] | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Long-term debt | [1] | (4,466.2) | (4,579.8) | ||||||
Total financial instruments measured at fair value | (4,448.8) | (4,562.8) | |||||||
Fair Value, Inputs, Level 1 [Member] | Equity mutual funds | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 10.4 | 9.3 | ||||||
Fair Value, Inputs, Level 1 [Member] | Municipal obligations | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 0.0 | 0.0 | ||||||
Fair Value, Inputs, Level 1 [Member] | Money market funds | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 0.2 | 0.4 | ||||||
Fair Value, Inputs, Level 1 [Member] | Commodity contracts | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 6.7 | 7.2 | ||||||
Fair Value, Inputs, Level 1 [Member] | Foreign currency exchange contracts - net | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 0.1 | 0.1 | ||||||
Fair Value, Inputs, Level 1 [Member] | Interest rate contract | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 0.0 | |||||||
Fair Value, Inputs, Level 2 [Member] | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Long-term debt | [1] | (1,327.3) | 0.0 | ||||||
Total financial instruments measured at fair value | (1,278.7) | 38.5 | |||||||
Fair Value, Inputs, Level 2 [Member] | Equity mutual funds | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 0.0 | 0.0 | ||||||
Fair Value, Inputs, Level 2 [Member] | Municipal obligations | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 35.8 | 36.1 | ||||||
Fair Value, Inputs, Level 2 [Member] | Money market funds | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 0.0 | 0.0 | ||||||
Fair Value, Inputs, Level 2 [Member] | Commodity contracts | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 0.4 | 1.0 | ||||||
Fair Value, Inputs, Level 2 [Member] | Foreign currency exchange contracts - net | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 1.9 | 1.4 | ||||||
Fair Value, Inputs, Level 2 [Member] | Interest rate contract | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 10.5 | |||||||
Fair Value, Inputs, Level 3 [Member] | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Long-term debt | [1] | 0.0 | 0.0 | ||||||
Total financial instruments measured at fair value | 0.0 | 0.0 | |||||||
Fair Value, Inputs, Level 3 [Member] | Equity mutual funds | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 0.0 | 0.0 | ||||||
Fair Value, Inputs, Level 3 [Member] | Municipal obligations | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 0.0 | 0.0 | ||||||
Fair Value, Inputs, Level 3 [Member] | Money market funds | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Other investments | [2] | 0.0 | 0.0 | ||||||
Fair Value, Inputs, Level 3 [Member] | Commodity contracts | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 0.0 | 0.0 | ||||||
Fair Value, Inputs, Level 3 [Member] | Foreign currency exchange contracts - net | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | 0.0 | $ 0.0 | ||||||
Fair Value, Inputs, Level 3 [Member] | Interest rate contract | |||||||||
Financial assets (liabilities) measured at fair value on a recurring basis | |||||||||
Derivative financial instruments | [3] | $ 0.0 | |||||||
|
Other Financial Instruments and Fair Value Measurements (Details Textual) $ in Millions |
6 Months Ended |
---|---|
Oct. 31, 2018
USD ($)
| |
Other Financial Instruments and Fair Value Measurements (Textual) [Abstract] | |
Company's Municipal bond mature in 2019 | $ 1.4 |
Company's Municipal bond mature in 2020 | 0.9 |
Company's Municipal bond mature in 2021 | 1.0 |
Company's Municipal bond mature in 2022 | 1.0 |
Company's Municipal bond mature in 2023 and beyond | $ 31.5 |
Money market funds maturity period | three months or less |
Income Taxes (Details Textual) - USD ($) $ in Millions |
3 Months Ended | 4 Months Ended | 6 Months Ended | 8 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
Apr. 30, 2018 |
Oct. 31, 2018 |
Oct. 31, 2017 |
Dec. 31, 2017 |
Apr. 30, 2018 |
|
Income Tax Disclosure [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | 21.00% | 21.00% | 35.00% | 35.00% | |
Net impact of discrete adjustments | $ (765.8) | ||||||
Effective Income Tax Rate Reconciliation, Percent | 30.00% | 33.30% | 27.30% | 33.20% | |||
Income Taxes (Textual) [Abstract] | |||||||
Time Period Over Which it is Reasonably Possible That Company Could Increase or Decrease its Unrecognized Tax Benefits | 12 months | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ 9.7 | $ 9.7 |
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Oct. 31, 2018 |
Oct. 31, 2017 |
||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Accumulated Other Comprehensive Income (Loss), Beginning Balance | $ (116.7) | $ (143.4) | |||||
Reclassification adjustments | 4.5 | 5.6 | |||||
Current period credit (charge) | (0.4) | 28.2 | |||||
Income tax benefit (expense) | (3.8) | (4.1) | |||||
Accumulated Other Comprehensive Income (Loss), Ending Balance | (116.4) | (113.7) | |||||
Foreign Currency Translation Adjustment [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Accumulated Other Comprehensive Income (Loss), Beginning Balance | (16.4) | (43.0) | |||||
Reclassification adjustments | 0.0 | 0.0 | |||||
Current period credit (charge) | (11.7) | 21.9 | |||||
Income tax benefit (expense) | 0.0 | 0.0 | |||||
Accumulated Other Comprehensive Income (Loss), Ending Balance | (28.1) | (21.1) | |||||
Net Gains (Losses) on Cash Flow Hedging Derivatives [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Accumulated Other Comprehensive Income (Loss), Beginning Balance | [1] | (2.9) | (4.4) | ||||
Reclassification adjustments | [1] | 0.2 | 0.3 | ||||
Current period credit (charge) | [1] | 10.5 | 3.5 | ||||
Income tax benefit (expense) | [1] | (2.5) | (1.4) | ||||
Accumulated Other Comprehensive Income (Loss), Ending Balance | [1] | 5.3 | (2.0) | ||||
Pension and Other Postretirement Liabilities [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Accumulated Other Comprehensive Income (Loss), Beginning Balance | [2] | (101.0) | (100.0) | ||||
Reclassification adjustments | [2] | 4.3 | 5.3 | ||||
Current period credit (charge) | [2] | 0.0 | 3.3 | ||||
Income tax benefit (expense) | [2] | (1.1) | (2.9) | ||||
Accumulated Other Comprehensive Income (Loss), Ending Balance | [2] | (97.8) | (94.3) | ||||
Unrealized Gain (Loss) on Available-for-Sale Securities [Member] | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||
Accumulated Other Comprehensive Income (Loss), Beginning Balance | 3.6 | 4.0 | |||||
Reclassification adjustments | 0.0 | 0.0 | |||||
Current period credit (charge) | 0.8 | (0.5) | |||||
Income tax benefit (expense) | (0.2) | 0.2 | |||||
Accumulated Other Comprehensive Income (Loss), Ending Balance | $ 4.2 | $ 3.7 | |||||
|
Common Shares (Details) - shares |
6 Months Ended | |
---|---|---|
Oct. 31, 2018 |
Apr. 30, 2018 |
|
Stockholders' Equity Note [Abstract] | ||
Stock Repurchased During Period, Shares | 0 | |
Common Shares Information | ||
Common shares authorized | 300,000,000.0 | 300,000,000 |
Common shares outstanding | 113,800,000 | 113,600,000 |
Treasury shares | 32,700,000 | 32,900,000 |
Common Shares (Additional Textual) [Abstract] | ||
Shares remaining for repurchase | 3,600,000 |
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