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Item 1. Financial Statements

2021-08-26 compared with 2021-02-25 · 156 added, 284 removed, 494 unchanged (47% of the section changed)

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CONDENSED STATEMENTS OF CONSOLIDATED INCOME

Three Months Ended January 31, Nine Months Ended January 31,

Three Months Ended July 31,

Dollars in millions, except per share data 2021 2020

Net sales $ 1,858.0 $ 1,971.8

Cost of products sold 1,267.3 1,212.3 3,679.5 3,495.4

Cost of products sold (A)

1,218.6 1,196.4

Gross Profit 639.4 775.4

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Amortization 55.4 59.6

Other intangible assets impairment charge — 52.4 — 52.4

Other special project costs (A)

1.7 3.3 1.7 9.9

Other operating expense (income) – net ( 1.2 ) ( 2.8 )

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Net Income – Assuming Dilution $ 1.42 $ 2.08

(A) Other special project costs includes integration and restructuring costs.

(A) Special project costs include divestiture, acquisition, integration, and restructuring costs, which are recognized in cost of products sold and other special project costs.

For more information, see Note 3:

Integration and Restructuring Costs.

Integration and Restructuring Costs and Note 5:

Reportable Segments.

See notes to unaudited condensed consolidated financial statements.

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CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

Three Months Ended January 31, Nine Months Ended January 31,

Three Months Ended July 31,

Dollars in millions 2021 2020

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CONDENSED CONSOLIDATED BALANCE SHEETS

Dollars in millions January 31, 2021 April 30, 2020

Dollars in millions July 31, 2021 April 30, 2021

Current Assets

47 unchanged sentences

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

Nine Months Ended January 31,

Three Months Ended July 31,

Dollars in millions 2021 2020

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Amortization 55.4 59.6

Other intangible assets impairment charge — 52.4

Pension settlement loss (gain) 3.7 —

Share-based compensation expense 5.3 5.9

Gain on divestitures – net ( 27.2 ) —

Other noncash adjustments – net 3.1 3.8

Changes in assets and liabilities, net of effect from divestitures:

Make-whole payments included in financing activities 7.0 —

Changes in assets and liabilities:

Trade receivables ( 32.9 ) 55.1

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Additions to property, plant, and equipment ( 68.0 ) ( 76.6 )

Proceeds from divestitures – net 569.3 —

Other – net ( 12.0 ) 27.4

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CONDENSED STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY

Nine Months Ended January 31, 2021

Three Months Ended July 31, 2021

Dollars in millions Common

8 unchanged sentences

( 106.9 ) ( 106.9 )

Other ( 0.5 ) 0.5 — —

Balance at July 31, 2021 108,359,994 $ 27.1 $ 5,531.0 $ 2,893.8 $ ( 281.6 ) $ 8,170.3

Net income 230.8 230.8

Other comprehensive income (loss) 33.4 33.4

Comprehensive income 264.2

Purchase of treasury shares ( 14,769 ) — ( 1.7 ) 0.1 ( 1.6 )

Stock plans 24,588 — 9.5 9.5

Cash dividends declared, $ 0.90 per common share

( 102.3 ) ( 102.3 )

Balance at October 31, 2020 114,097,261 $ 28.5 $ 5,803.1 $ 3,010.9 $ ( 327.5 ) $ 8,515.0

Net income 261.5 261.5

Other comprehensive income (loss) 24.0 24.0

Comprehensive income 285.5

Purchase of treasury shares ( 4,301,631 ) ( 1.1 ) ( 219.0 ) ( 277.8 ) ( 497.9 )

Stock plans ( 6,480 ) — 7.5 7.5

Cash dividends declared, $ 0.90 per common share

( 98.5 ) ( 98.5 )

Balance at January 31, 2021 109,789,150 $ 27.4 $ 5,591.6 $ 2,896.1 $ ( 303.5 ) $ 8,211.6

See notes to unaudited condensed consolidated financial statements.

SMUCKER COMPANY

CONDENSED STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY

Nine Months Ended January 31, 2020

Three Months Ended July 31, 2020

Dollars in millions Common

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( 102.4 ) ( 102.4 )

Other ( 0.5 ) 0.5 — —

Balance at July 31, 2020 114,087,442 $ 28.5 $ 5,795.3 $ 2,882.3 $ ( 360.9 ) $ 8,345.2

Net income 211.2 211.2

Other comprehensive income (loss) ( 31.7 ) ( 31.7 )

Comprehensive income 179.5

Purchase of treasury shares ( 4,930 ) — ( 0.6 ) — ( 0.6 )

Stock plans 14,882 — 8.8 8.8

Cash dividends declared, $ 0.88 per common share

( 100.1 ) ( 100.1 )

Balance at October 31, 2019 114,059,744 $ 29.0 $ 5,781.7 $ 2,533.0 $ ( 248.4 ) $ 8,095.3

Net income 187.4 187.4

Other comprehensive income (loss) ( 17.9 ) ( 17.9 )

Comprehensive income 169.5

Purchase of treasury shares ( 7,180 ) — ( 1.0 ) 0.2 ( 0.8 )

Stock plans ( 11,251 ) — 6.5 6.5

Cash dividends declared, $ 0.88 per common share

( 100.1 ) ( 100.1 )

Balance at January 31, 2020 114,041,313 $ 29.0 $ 5,787.2 $ 2,620.5 $ ( 266.3 ) $ 8,170.4

See notes to unaudited condensed consolidated financial statements.

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In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included.

Operating results for the nine months ended January 31, 2021, are not necessarily indicative of the results that may be expected for the year ending April 30, 2021.

Operating results for the three months ended July 31, 2021, are not necessarily indicative of the results that may be expected for the year ending April 30, 2022.

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, 2021.

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33-10890, Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information, to modernize and simplify Management’s Discussion and Analysis and certain financial disclosure requirements.

These updates reflect a continued principles-based disclosure approach, similar to the standards released earlier in the year.

We will be required to apply these amendments for 2022, with early adoption permitted.

We do not anticipate that the adoption of these amendments will have a material impact on our disclosures.

In August 2020, the SEC adopted the final rule under SEC Release No.

33-10825, Modernization of Regulation S-K Items 101, 103, and 105 , to modernize certain disclosure requirements for the description of business, legal proceedings, and risk factors.

These updates are part of the SEC’s broader disclosure effectiveness initiative and reflect a principles-based, registrant-specific approach to disclosure, intended to improve the content and simplify compliance for registrants.

The amendments were effective on November 9, 2020.

While there was no impact to our interim disclosures, our annual disclosures will be updated accordingly to comply with these amendments.

These updates are part of the SEC’s broader disclosure effectiveness initiative and reflect a principles-based, registrant-specific approach to disclosures, intended to improve the content and simplify compliance for registrants.

During 2021, we early adopted certain updates to section 301, Selected Financial Data , and 302, Supplementary Financial Information .

As required, we will complete the adoption of the remaining amendments during 2022 and do not anticipate that the adoption of these amendments will have a material impact on our financial statements and disclosures.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes , which removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes.

ASU 2019-12 will be effective for us on May 1, 2021, with the option to early adopt at any time prior to the effective date.

Accounting for franchise taxes will require adoption on a retrospective or modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption.

All other applicable provisions will require adoption on a retrospective, modified retrospective, or prospective basis, as required by ASU 2019-12.

We do not anticipate that the adoption of this ASU will have a material impact on our financial statements and disclosures.

In August 2018, the FASB 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, as well as clarifies certain other, disclosure requirements.

ASU 2019-12 was effective for us on May 1, 2021.

It did not impact our interim disclosures, and we do not anticipate a material impact on our annual disclosures.

The accounting guidance for franchise taxes and foreign investments was adopted on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of 2022.

All other applicable provisions were adopted on a prospective basis, as required by ASU 2019-12.

The adoption of this ASU did not have a material impact on our financial statements and disclosures.

Integration and Restructuring Costs

Integration and restructuring costs primarily consist of employee-related costs and other transition and termination costs related to certain divestiture, acquisition, or restructuring activities.

Integration and restructuring costs primarily consist of employee-related costs and other transition and termination costs related to certain divestiture, acquisition, integration, 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.

Severance costs and retention bonuses are recognized over the estimated future service period of the impacted employees, and relocation costs are expensed as incurred.

Other transition and termination costs include fixed asset-related charges, contract and lease termination costs, professional fees, and other miscellaneous expenditures associated with the integration or restructuring activities, which are expensed as incurred.

These integration and restructuring costs are not allocated to segment profit and are reported in other special project costs in the Condensed Statements of Consolidated Income.

obligation related to employee separation costs is included in other current liabilities in the Condensed Consolidated Balance Sheets.

Integration Costs:

As of April 30, 2020, the integration of the Ainsworth Pet Nutrition, LLC (“Ainsworth”) acquisition was considered complete.

We incurred total integration costs of $ 48.6 related to the acquisition, of which $ 4.7 were noncash charges, primarily consisting of accelerated depreciation.

While we did no t incur any costs during 2021, we incurred integration costs of $ 3.3 and $ 9.9 during the three and nine months ended January 31, 2020, respectively, primarily consisting of other transition and termination costs.

The obligation related to severance costs and retention bonuses was fully satisfied as of January 31, 2021, and was $ 0.5 at April 30, 2020.

These integration and restructuring costs are reported in costs of products sold and other special project costs in the Condensed Statements of Consolidated Income and are not allocated to segment profit.

The obligation related to employee separation costs is included in other current liabilities in the Condensed Consolidated Balance Sheets.

Restructuring Costs:

A restructuring program was approved by the Board of Directors (the “Board”) during the third quarter of 2021.

Under this program, we have identified opportunities to reduce our overall cost structure and optimize our organizational design, inclusive of stranded overhead associated with recent divestitures of the Crisco ® and Natural Balance ® businesses.

For additional information, see Note 4:

A restructuring program was approved by the Board of Directors (the “Board”) during 2021, associated with opportunities identified to reduce our overall cost structure and optimize our organizational design, inclusive of stranded overhead associated with recent divestitures of the Crisco ® and Natural Balance ® businesses.

For additional information related to these divestitures, see Note 4:

Divestitures.

While the entire scope of the program cannot be quantified at this time, we expect to incur approximately $ 60.0 in costs associated with the restructuring activities approved to date.

Over half of these costs are expected to be employee-related costs, while the remainder represent other transition and termination costs associated with our cost reduction and margin management initiatives.

We anticipate the activities and costs associated with this restructuring program will be completed by the end of 2023, with the majority of the costs expected to be incurred in 2022.

During the three and nine months ended January 31, 2021, we incurred $ 1.7 of employee-related costs, all of which were cash charges.

The obligation related to severance costs and retention bonuses was $ 1.4 at January 31, 2021.

During 2021, we substantially completed an organizational redesign related to our corporate headquarters and announced plans to close our Suffolk, Virginia, production facility by the end of 2022, as a result of a new strategic partnership for the production of our Away From Home liquid coffee products.

We expect to incur costs of approximately $ 85.0 associated with the restructuring activities approved to date.

Approximately half of these costs are expected to be other transition and termination costs associated with our cost reduction and margin management initiatives, inclusive of accelerated depreciation, while the remainder represents employee-related costs.

We anticipate the activities

associated with this restructuring program will be completed by the end of 2023, with the majority of the costs expected to be incurred by the end of 2022.

The following table summarizes our restructuring costs incurred related to the restructuring program.

Three Months Ended July 31, 2021 Total Costs Incurred to Date at July 31, 2021

Employee-related costs $ 1.3 $ 18.6

Other transition and termination costs 5.1 11.9

Total restructuring costs $ 6.4 $ 30.5

The obligation related to severance costs and retention bonuses was $ 3.8 and $ 14.6 at July 31, 2021 and April 30, 2021, respectively.

As of July 31, 2021, cumulative noncash charges incurred to date were $ 7.7 , including $ 3.3 incurred during the first quarter of 2022, and primarily consisted of accelerated depreciation.

We did no t incur any costs related to restructuring during the three months ended July 31, 2020.

On December 1, 2020, we sold the Crisco oils and shortening business to B&G Foods, Inc.

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and Canada, certain trademarks and licensing agreements, dedicated manufacturing and warehouse facilities located in Cincinnati, Ohio, and approximately 160 employees who supported the Crisco business.

The business generated net sales of approximately $ 270.0 in 2020, included primarily in the U.S.

Under our ownership, the business generated net sales of $ 198.9 in 2021, primarily included in the U.S.

Retail Consumer Foods segment.

Net proceeds from the divestiture were $ 533.4 , inclusive of a preliminary working capital adjustment and transaction costs paid to date, which will be finalized during the fourth quarter of 2021.

We received net proceeds from the divestiture of $ 530.2 , which were net of cash transaction costs and a working capital adjustment.

On January 29, 2021, we sold the Natural Balance premium pet food business to Nexus Capital Management LP (“Nexus”).

The transaction encompassed pet food products sold under the Natural Balance brand, certain trademarks and licensing agreements, and select employees who supported the Natural Balance business.

The business generated net sales of approximately $ 220.0 in 2020, included in the U.S.

The transaction included pet food products sold under the Natural Balance brand, certain trademarks and licensing agreements, and select employees who supported the Natural Balance business.

Under our ownership, the business generated net sales of $ 156.7 in 2021, included in the U.S.

Retail Pet Foods segment.

Net proceeds from the divestiture were $ 35.9 , inclusive of a preliminary working capital adjustment and transaction costs paid to date, which will be finalized during the fourth quarter of 2021.

Upon completion of these transactions during the third quarter of 2021, we recognized a pre-tax gain of $ 114.9 related to the Crisco business and a pre-tax loss of $ 87.7 related to the Natural Balance business, which were included in other operating expense (income) – net within the Condensed Statement of Consolidated Income.

The following table summarizes the net assets and liabilities disposed, which were measured at the lower of carrying amount or fair value less costs to sell.

January 31, 2021

Crisco Natural Balance

Assets disposed:

Inventories $ 32.9 $ 18.2

Property, plant, and equipment – net 37.2 —

Operating lease right-of-use assets 1.6 0.1

Goodwill 227.6 74.1

Other intangible assets – net 117.5 41.3

Other noncurrent assets 0.2 —

Total assets disposed $ 417.0 $ 133.7

Liabilities disposed:

Current operating lease liabilities $ 0.6 $ —

Noncurrent operating lease liabilities 1.0 —

Deferred income taxes — 10.1

Other noncurrent liabilities — 0.3

Total liabilities disposed 1.6 10.4

Net assets disposed $ 415.4 $ 123.3

We received net proceeds from the divestiture of $ 33.8 , which were net of cash transaction costs and a working capital adjustment.

Upon completion of these transactions during the second half of 2021, we recognized a pre-tax gain of $ 114.8 related to the Crisco business and a pre-tax loss of $ 89.5 related to the Natural Balance business.

Reportable Segments

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Retail Consumer Foods.

Effective during the first quarter of 2021, the presentation of International and Away From Home represents a combination of all other operating segments that are not individually reportable.

As a result of leadership changes, these operating segments are being managed and reported separately and no longer represent a reportable segment for segment reporting purposes.

Prior year segment results have not been modified, as the combination of these operating segments represents the previously reported International and Away From Home reportable segment.

The presentation of International and Away From Home represents a combination of all other operating segments that are not individually reportable.

Retail Pet Foods segment primarily includes the domestic sales of Rachael Ray ® Nutrish ® , Meow Mix ® , Milk-Bone ® , 9Lives ® , Kibbles ’n Bits ® , Pup-Peroni ® , and Nature’s Recipe ® branded products;

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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, gains and losses related to the sale of a business, unallocated gains and losses on commodity and foreign currency exchange derivative activities (“unallocated derivative gains and losses”), as well as amortization expense and impairment charges related to intangible assets.

However, we do not represent that the segments, if operated independently, would report operating profit equal to the segment profit set forth below, as segment profit excludes certain expenses such as amortization expense and impairment charges related to intangible assets, gains and losses related to the sale of a business, the net change in cumulative unallocated gains and losses on commodity and foreign currency exchange derivative activities (“change in net cumulative unallocated derivative gains and losses”), divestiture, acquisition, integration, and restructuring costs (“special project costs”), as well as corporate administrative expenses.

Commodity and foreign currency exchange derivative gains and losses are reported in unallocated derivative gains and losses outside of segment operating results until the related inventory is sold.

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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.

Three Months Ended January 31, Nine Months Ended January 31,

2021 2020 2021 2020

The following table reconciles segment profit to income before income taxes.

Three Months Ended July 31,

Retail Pet Foods $ 648.0 $ 692.6

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Amortization ( 55.4 ) ( 59.6 )

Other intangible assets impairment charge — ( 52.4 ) — ( 52.4 )

Gain on divestitures – net 27.2 — 27.2 —

Interest expense – net ( 43.1 ) ( 46.1 )

Unallocated derivative gains (losses) 33.8 7.7 81.5 37.6

Change in net cumulative unallocated derivative gains and losses ( 2.2 ) 16.2

Cost of products sold – special project costs (A)

Other special project costs (A)

( 1.7 ) ( 3.3 ) ( 1.7 ) ( 9.9 )

Corporate administrative expenses ( 59.4 ) ( 65.8 )

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Income before income taxes $ 205.2 $ 313.6

(A) Other special project costs includes integration and restructuring costs.

(A) Special project costs include divestiture, acquisition, integration, and restructuring costs, which are recognized in cost of products sold and other special project costs in the Condensed Statement of Consolidated Income.

For more information, see Note 3:

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The following table presents certain geographical information.

Three Months Ended January 31, Nine Months Ended January 31,

2021 2020 2021 2020

Three Months Ended July 31,

United States $ 1,733.2 $ 1,829.7

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The following table presents product category information.

Three Months Ended January 31, Nine Months Ended January 31,

Three Months Ended July 31,

2021 2020 Primary Reportable Segment (A)

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Retail Consumer Foods

Shortening and oils 33.9 68.9 193.9 192.2 U.S.

Retail Consumer Foods

Portion control 34.4 24.0 Other (B)

Juices and beverages 33.2 33.6 U.S.

Retail Consumer Foods

Portion control 27.9 42.0 83.0 123.9 Other (B)

Baking mixes and ingredients 12.4 23.2 Other (B)

Shortening and oils — 77.3 U.S.

Retail Consumer Foods (C)

Other 76.1 67.8 Other (B)

Total net sales $ 1,858.0 $ 1,971.8

(A) The identified primary reportable segment generally represents at least 75 percent of total net sales for each respective product category.

(A) The primary reportable segment generally represents at least 75 percent of total net sales for each respective product category.

(B) Represents the combined International and Away From Home operating segments.

For more information, see Note 4:

Divestitures.

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.

Three Months Ended January 31, Nine Months Ended January 31,

2021 2020 2021 2020

Three Months Ended July 31,

Net income $ 153.9 $ 237.0

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Net income per common share – assuming dilution $ 1.42 $ 2.08

Goodwill and Other Intangible Assets

A summary of changes in goodwill is as follows:

Pet Foods U.S.

Consumer Foods International

From Home Total

Balance at May 1, 2020 $ 2,442.3 $ 2,090.9 $ 1,358.2 $ 413.1 $ 6,304.5

Divestitures ( 74.1 ) — ( 210.7 ) ( 16.9 ) ( 301.7 )

— — — 14.1 14.1

Balance at January 31, 2021 (B)

$ 2,368.2 $ 2,090.9 $ 1,147.5 $ 410.3 $ 6,016.9

(A) The amounts classified as other represent foreign currency exchange adjustments.

(B) Included in goodwill as of May 1, 2020, are accumulated goodwill impairment charges of $ 242.9 .

No impairment charges have been recognized in 2021.

The following table summarizes our other intangible assets and related accumulated amortization and impairment charges including foreign currency exchange adjustments.

January 31, 2021

April 30, 2020

Acquisition Cost Accumulated Amortization/Impairment Charges/Foreign Currency Exchange Net Acquisition Cost Accumulated Amortization/Impairment Charges/Foreign Currency Exchange Net

Finite-lived intangible assets subject to

amortization:

Customer and contractual relationships $ 4,471.1 $ 1,497.2 $ 2,973.9 $ 4,471.1 $ 1,353.0 $ 3,118.1

Patents and technology 168.5 145.1 23.4 168.5 138.4 30.1

Trademarks 348.0 177.9 170.1 662.0 311.0 351.0

Total intangible assets subject to amortization $ 4,987.6 $ 1,820.2 $ 3,167.4 $ 5,301.6 $ 1,802.4 $ 3,499.2

Indefinite-lived intangible assets not subject to

amortization:

Trademarks $ 3,158.1 $ 226.1 $ 2,932.0 $ 3,158.1 $ 228.3 $ 2,929.8

Total other intangible assets $ 8,145.7 $ 2,046.3 $ 6,099.4 $ 8,459.7 $ 2,030.7 $ 6,429.0

The decrease in finite-lived intangible assets from April 30, 2020, is primarily due to the divestitures of the Crisco and Natural Balance trademarks during the third quarter of 2021.

For additional information, see Note 4:

Divestitures.

We review goodwill and other indefinite-lived intangible assets for impairment at least annually on February 1, and more often if indicators of impairment exist.

As a result of the divestitures during the third quarter of 2021, we reviewed all impacted reporting units and concluded that the estimated fair values were in excess of the carrying values as of the date of the divestitures.

Furthermore, there were no other indicators of impairment, and as a result, we do not believe that our reporting units or any of our material indefinite-lived intangible assets are more likely than not impaired as of January 31, 2021.

However, the goodwill and indefinite-lived trademarks within the U.S.

Retail Pet Foods segment remain susceptible to future impairment charges due to the narrow differences between fair value and carrying value.

Any significant adverse change in our near or long-term projections or macroeconomic conditions could result in future impairment charges.

The carrying values of the goodwill and indefinite-lived intangible assets within the U.S.

Retail Pet Foods segment were $ 2.4 billion and $ 1.4 billion, respectively, as of January 31, 2021.

In addition, we continue to evaluate the nature and extent to which the novel coronavirus (“COVID-19”) could impact our business, specifically as it relates to the fair value of our goodwill and indefinite-lived intangible assets.

While we have concluded there were no indicators of impairment as of January 31, 2021, any significant sustained adverse change in consumer purchasing behaviors, government restrictions, financial results, or macroeconomic conditions could result in future impairment, specifically as it relates to the Away From Home reporting unit, which has experienced a decline in demand as a result of COVID-19.

As of January 31, 2021, the goodwill related to the Away From Home reporting unit represented approximately 65 percent of the goodwill within the combined International and Away From Home operating segments.

During the third quarter of 2020, we recognized an impairment charge of $ 52.4 related to the recently divested Natural Balance brand within the U.S.

Retail Pet Foods segment due to a decline in the 2020 and long-term net sales expectations and the royalty rate used in the interim analysis, primarily driven by the market environment and re-positioning of this brand within the Pet Foods brand portfolio.

This charge was included as a noncash charge in our Condensed Statement of Consolidated Income.

Additionally, we reclassified the Natural Balance brand as a finite-lived intangible asset as of February 1, 2020, as a result of a change in our long-term strategic expectations for the brand.

Debt and Financing Arrangements

The following table summarizes the components of our long-term debt.

January 31, 2021 April 30, 2020

July 31, 2021 April 30, 2021

Outstanding Carrying

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300.0 295.9 300.0 295.8

Term Loan Credit Agreement due May 14, 2021 — — 700.0 699.5

Total long-term debt $ 4,300.0 $ 4,269.1 $ 4,700.0 $ 4,669.7

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(A) Represents the carrying amount included in the Condensed Consolidated Balance Sheets, which includes the impact of capitalized debt issuance costs, offering discounts, and terminated interest rate contracts.

During the third quarter of 2021, we prepaid, in full, the remaining outstanding balance of the $ 1.5 billion senior unsecured delayed-draw Term Loan Credit Agreement (“Term Loan”) that was entered into in April 2018 to partially finance the Ainsworth acquisition.

During the three and nine months ended January 31, 2021, we prepaid $ 200.0 and $ 700.0 on the Term Loan, respectively.

We have available a $ 1.8 billion unsecured revolving credit facility with a group of 11 banks that matures in September 2022.

During the first quarter of 2022, we prepaid $ 400.0 in principal of the Senior Notes due March 15, 2022, and as a result, we recognized a net loss on extinguishment of $ 6.9 , which primarily consisted of a make-whole payment and was included in other income (expense) – net in the Condensed Statement of Consolidated Income.

As of July 31, 2021, we had available a $ 1.8 billion unsecured revolving credit facility with a group of 11 banks that was scheduled to mature 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.

Prime Rate, London Interbank Offered Rate (“LIBOR”), or Canadian Dealer Offered Rate, based on our election.

Interest is payable either on a quarterly basis or at the end of the borrowing term.

We did no t have a balance outstanding under the revolving credit facility at January 31, 2021, or April 30, 2020.

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.

We did no t have a balance outstanding under the revolving credit facility at July 31, 2021, or April 30, 2021.

Subsequent to the first quarter of 2022, we entered into an unsecured revolving credit facility with a group of 11 banks, which provides for a revolving credit line of $ 2.0 billion and matures in August 2026.

As a result of entering into the new facility in August 2021, we terminated the $1.8 billion revolving credit facility.

The new revolving credit facility includes approximately $ 4.0 of capitalized debt issuance costs, which will be amortized to interest expense over the time for which the revolving credit facility is effective.

Borrowings under the new revolving credit facility bear interest on the prevailing U.S.

Prime Rate, LIBOR, Euro Interbank Offered Rate, or Canadian Dealer Offered Rate, based on our election.

Interest is payable either on a quarterly basis or at the end of the borrowing term.

We have no t drawn upon the $2.0 billion revolving credit facility.

We participate in a commercial paper program under which we can issue short-term, unsecured commercial paper not to exceed $ 1.8 billion as of July 31, 2021.

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 January 31, 2021, and April 30, 2020, we had $ 166.0 and $ 248.0 of short-term borrowings outstanding, respectively, which were issued under our commercial paper program at weighted-average interest rates of 0.17 percent and 0.40 percent, respectively.

Interest paid totaled $ 8.7 and $ 18.3 for the three months ended January 31, 2021 and 2020, respectively, and $ 95.1 and $ 118.3 , for the nine months ended January 31, 2021 and 2020, respectively.

This differs from interest expense due to the timing of interest payments, amortization of debt issuance costs and discounts, effect of interest rate contracts, capitalized interest, and payment of other debt fees.

Commercial paper is used as a continuing source of short-term financing for general corporate purposes.

As of July 31, 2021, and April 30, 2021, we had $ 366.0 and $ 82.0 of short-term borrowings outstanding, respectively, which were both issued under our commercial paper program at a weighted-average interest rate of 0.17 percent.

In conjunction with entering into the $2.0 billion unsecured revolving credit facility in August 2021, we also increased the commercial paper limit from $1.8 billion to $ 2.0 billion.

Interest paid totaled $ 12.8 and $ 10.2 for the three months ended July 31, 2021 and 2020, respectively.

This differs from interest expense due to the timing of interest payments, capitalized interest, effect of interest rate contracts, amortization of debt issuance costs and discounts, and the 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.

As of July 31, 2021, we are in compliance with all covenants.

Furthermore, in conjunction with entering into the $2.0 billion unsecured revolving credit facility in August 2021, we amended the financial covenant restrictions to remove the leverage ratio.

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.

Three Months Ended January 31,

Defined Benefit Pension Plans Other Postretirement Benefits

2021 2020 2021 2020

Service cost $ 0.5 $ 0.4 $ 0.5 $ 0.4

Interest cost 3.3 5.2 0.4 0.5

Expected return on plan assets ( 4.6 ) ( 6.0 ) — —

Amortization of net actuarial loss (gain) 2.6 2.0 — ( 0.1 )

Amortization of prior service cost (credit) 0.2 0.2 ( 0.3 ) ( 0.2 )

Settlement loss (gain) 0.2 — — —

Net periodic benefit cost $ 2.2 $ 1.8 $ 0.6 $ 0.6

Nine Months Ended January 31,

Three Months Ended July 31,

Defined Benefit Pension Plans Other Postretirement Benefits

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Net periodic benefit cost $ 5.1 $ 2.5 $ 0.4 $ 0.6

During the second quarter of 2021, we transferred $ 82.6 of our Canadian defined benefit pension plan obligations to an insurance company through the purchase of an irrevocable group annuity contract (referred to as a buy-out contract).

The group annuity contract was purchased using assets from the pension trust.

As a result of this transaction, we recognized a noncash pre-tax settlement charge of $ 27.9 to accelerate the unrecognized losses within accumulated other comprehensive income (loss) that would have otherwise been recognized in subsequent periods.

This settlement charge was included within other income (expense) – net in the Condensed Statement of Consolidated Income.

We did no t recognize any additional charges related to the buy-out contract during the third quarter of 2021.

Derivative Financial Instruments

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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:

Commodity Derivatives:

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, soybean meal, wheat, and edible oils.

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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:

Foreign Currency Exchange Derivatives:

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.

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We do not qualify instruments used to manage foreign currency exchange exposures for hedge accounting treatment.

Interest Rate Hedging:

Interest Rate Derivatives:

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.

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Generally, changes in the fair value of the contract are equal to changes in the fair value of the underlying debt and have no net impact on earnings.

In 2020, we terminated interest rate contracts concurrent with the pricing of the Senior Notes due March 15, 2030, and March 15, 2050.

They were designated as cash flow hedges and were used to manage our exposure to interest rate volatility associated with the anticipated debt financing.

The termination resulted in a pre-tax loss of $ 239.8 , which was deferred and included as a component of accumulated other comprehensive income (loss) and is being amortized as interest expense over the life of the debt.

In 2015, we terminated the interest rate swap on the 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 recorded as an increase in the long-term debt balance and is being recognized over the remaining life of the underlying debt as a reduction to interest expense.

To date, we have recognized $ 47.5 of the gain, of which $ 2.2 and $ 6.4 was recognized during the three and nine months ended January 31, 2021, respectively, and $ 2.1 and $ 6.2 was recognized during the three and nine months ended January 31, 2020, respectively.

The remaining gain will be recognized as follows:

$ 2.0 through the remainder of 2021 and $ 4.0 in 2022.

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

July 31, 2021 April 30, 2021

Commodity contracts $ 484.8 $ 861.0

Foreign currency exchange contracts 98.5 88.4

The following tables set forth the gross fair value amounts of derivative instruments recognized in the Condensed Consolidated Balance Sheets.

January 31, 2021

July 31, 2021

Liabilities Other

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We are required to maintain cash margin accounts in connection with funding the settlement of our open positions.

At January 31, 2021, our cash margin accounts represented collateral received of $ 5.6 , and at April 30, 2020, our cash margin accounts represented collateral pledged of $ 43.2 , included in other current assets in the Condensed Consolidated Balance Sheets.

Our cash margin accounts represented collateral pledged of $ 0.6 at July 31, 2021 and collateral received of $ 10.8 at April 30, 2021, and are 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 $ 43.5 and $ 45.1 for the three months ended January 31, 2021 and 2020, respectively, and was $ 134.7 and $ 143.6 for the nine months ended January 31, 2021 and 2020, respectively.

The following table presents information on the pre-tax gains and losses recognized on terminated interest rate contracts that were designated as cash flow hedges.

Three Months Ended January 31, Nine Months Ended January 31,

2021 2020 2021 2020

Gains (losses) recognized in other comprehensive income (loss) $ — $ ( 22.7 ) $ — $ ( 119.8 )

Gains (losses) reclassified from accumulated other comprehensive income (loss)

to interest expense

( 3.5 ) ( 0.1 ) ( 10.4 ) ( 0.3 )

Change in accumulated other comprehensive income (loss) $ 3.5 $ ( 22.6 ) $ 10.4 $ ( 119.5 )

Included as a component of accumulated other comprehensive income (loss) at January 31, 2021, and April 30, 2020, were deferred net pre-tax losses of $ 230.7 and $ 241.1 , respectively, related to the terminated interest rate contracts.

The related net tax benefit recognized in accumulated other comprehensive income (loss) at January 31, 2021, and April 30, 2020, was $ 53.3 and $ 55.5 , respectively.

Approximately $ 13.7 of the net pre-tax loss will be recognized over the next 12 months related to the terminated interest rate contracts.

Cash flows associated with the settlement of derivative instruments are classified in the same line item as the cash flows of the related hedged item, which is within operating activities in the Condensed Statements of Consolidated Cash Flows.

Economic Hedges

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

Three Months Ended January 31, Nine Months Ended January 31,

2021 2020 2021 2020

Gains (losses) on commodity contracts $ 38.0 $ ( 7.3 ) $ 62.8 $ ( 4.8 )

Gains (losses) on foreign currency exchange contracts ( 2.6 ) 0.3 ( 5.3 ) ( 0.8 )

Total gains (losses) recognized in cost of products sold $ 35.4 $ ( 7.0 ) $ 57.5 $ ( 5.6 )

Three Months Ended July 31,

Derivative gains (losses) on commodity contracts $ 15.8 $ 11.4

Derivative gains (losses) on foreign currency exchange contracts 1.5 ( 2.3 )

Total derivative gains (losses) recognized in cost of products sold $ 17.3 $ 9.1

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.

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The following table presents the activity in unallocated derivative gains and losses.

Three Months Ended January 31, Nine Months Ended January 31,

Three Months Ended July 31,

Net derivative gains (losses) recognized and classified as unallocated $ 17.3 $ 9.1

Net derivative gains (losses) reclassified to segment operating profit 19.5 ( 7.1 )

Change in net cumulative unallocated derivative gains and losses $ ( 2.2 ) $ 16.2

The net cumulative unallocated derivative gains were $ 58.5 and $ 60.7 at July 31, 2021, and April 30, 2021, respectively.

Cash Flow Hedges

In 2020, we terminated interest rate contracts concurrent with the pricing of the Senior Notes due March 15, 2030, and March 15, 2050.

They were designated as cash flow hedges and were used to manage our exposure to interest rate volatility associated with the anticipated debt financing.

The following table presents information on the pre-tax gains and losses recognized on all contracts previously designated as cash flow hedges.

Three Months Ended July 31,

Gains (losses) recognized in other comprehensive income (loss) $ — $ —

Gains (losses) reclassified from accumulated other comprehensive income (loss) to income (A)

( 2.9 ) ( 3.4 )

Net gains (losses) on mark-to-market valuation of unallocated derivative positions $ 35.4 $ ( 7.0 ) $ 57.5 $ ( 5.6 )

Net gains (losses) on derivative positions reclassified to segment operating profit 1.6 ( 14.7 ) ( 24.0 ) ( 43.2 )

Unallocated derivative gains (losses) $ 33.8 $ 7.7 $ 81.5 $ 37.6

As of January 31, 2021, the net cumulative unallocated derivative gains were $ 48.6 , and at April 30, 2020, the net cumulative unallocated derivative losses were $ 32.9 .

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

January 31, 2021 April 30, 2020

Commodity contracts $ 373.3 $ 890.1

Foreign currency exchange contracts 87.4 65.6

Change in accumulated other comprehensive income (loss) $ 2.9 $ 3.4

(A) Interest expense – net, as presented in the Condensed Statements of Consolidated Income was $ 43.1 and $ 46.1 for the three months ended July 31, 2021 and 2020, respectively, which included the reclassification of losses of $ 3.5 and $ 3.4 , respectively.

Other income (expense) – net, as presented in the Condensed Statement of Consolidated Income was expense of $ 11.1 for the three months ended July 31, 2021, which included the reclassification of a gain of $ 0.6 related to the debt extinguishment, as discussed in Note 7:

Debt and Financing Arrangements.

Included as a component of accumulated other comprehensive income (loss) at July 31, 2021, and April 30, 2021, were deferred net pre-tax losses of $ 224.4 and $ 227.3 , respectively, related to the terminated interest rate contracts.

The related net tax benefit recognized in accumulated other comprehensive income (loss) at July 31, 2021, and April 30, 2021, was $ 51.9 and $ 52.5 , respectively.

Approximately $ 13.6 of the net pre-tax loss will be recognized over the next 12 months related to the terminated interest rate contracts.

Fair Value Hedges

In 2015, we terminated the interest rate swap on the 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 recorded as an increase in the long-term debt balance and is being recognized over the life of the debt as a reduction of interest expense.

To date, we have recognized $ 51.6 of the gain, of which $ 2.1 and $ 2.2 was recognized during the three months ended July 31, 2021 and 2020, respectively.

The remaining gain of $ 1.9 will be recognized during the second quarter of 2022.

Other Financial Instruments and Fair Value Measurements

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The following table provides information on the carrying amounts and fair values of our financial instruments.

January 31, 2021 April 30, 2020

July 31, 2021 April 30, 2021

Amount Fair Value Carrying

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(Level 2) Significant

(Level 3) Fair Value at January 31, 2021

(Level 3) Fair Value at July 30, 2021

Marketable securities and other investments:

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Based on the short-term nature of these money market funds, carrying value approximates fair value.

As of January 31, 2021, our municipal obligations are scheduled to mature as follows:

$ 0.3 in 2021, $ 1.5 in 2022, $ 3.5 in 2024, and the remaining $ 24.0 in 2025 and beyond.

As of July 31, 2021, our municipal obligations are scheduled to mature as follows:

$ 1.8 in 2022, $ 2.2 in 2024, $ 3.0 in 2025, $ 2.0 in 2026, and the remaining $ 15.2 in 2027 and beyond.

We do no t have any municipal obligations scheduled to mature in 2023.

(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.

Level 2 foreign currency exchange derivatives are valued using quoted prices for similar assets or liabilities in active markets.

For additional information, see Note 9:

Derivative Financial Instruments.

(C) Long-term debt is composed of public Senior Notes, which are classified as Level 1, and the Term Loan, which was classified as Level 2 prior to the prepayment of the remaining balance during the third quarter of 2021.

The public Senior Notes are traded in an active secondary market and valued using quoted prices.

The fair value of the Term Loan was 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.

(C) Long-term debt is composed of public Senior Notes, which are traded in an active secondary market and valued using quoted prices.

For additional information, see Note 7:

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A lease commences when the lessor makes the identified asset available for our use.

We generally account for lease and non-lease components as a single lease component.

generally account for lease and non-lease components as a single lease component.

Minimum lease payments do not include variable lease payments other than those that depend on an index or rate.

For the majority of our leases, the interest rate implicit in the lease cannot be readily determined, so we utilize our incremental borrowing rate to present value lease payments using information available at the lease commencement date.

Because the interest rate implicit in the lease cannot be readily determined for the majority of our leases, we utilize our incremental borrowing rate to present value lease payments using information available at the lease commencement date.

We consider our credit rating and the current economic environment in determining this collateralized rate.

The following table sets forth the right-of-use assets and lease liabilities recognized in the Condensed Consolidated Balance Sheets.

January 31, 2021 April 30, 2020

July 31, 2021 April 30, 2021

Operating lease right-of-use assets $ 133.5 $ 142.0

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The following table summarizes the components of lease expense.

Three Months Ended January 31, Nine Months Ended January 31,

2021 2020 2021 2020

Three Months Ended July 31,

Operating lease cost $ 10.8 $ 11.3

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Interest on lease liabilities

— 0.1 0.1 0.2

Variable lease cost 5.3 5.6

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The following table sets forth cash flow and noncash information related to leases.

Nine Months Ended January 31,

Three Months Ended July 31,

Cash paid for amounts included in the measurement of lease liabilities:

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The following table summarizes the maturity of our lease liabilities by fiscal year.

January 31, 2021

July 31, 2021

Operating Leases Finance Leases

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The following table sets forth the weighted average remaining lease term and discount rate.

January 31, 2021 April 30, 2020

July 31, 2021 April 30, 2021

Weighted average remaining lease term (in years):

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Finance leases

The effective tax rates for the three months ended January 31, 2021 and 2020, were 27.7 and 22.7 percent, respectively, and for the nine months ended January 31, 2021 and 2020, were 25.5 and 24.0 percent, respectively.

During the three and nine months ended January 31, 2021 and 2020, the effective tax rates varied from the U.S.

statutory income tax rate of 21.0 percent due to the impact of state income taxes.

The effective tax rates for the current year were also unfavorably impacted by additional net income tax expense related to the divestitures of the Crisco and Natural Balance businesses during the third quarter of 2021.

Within the next 12 months, it is reasonably possible that we could decrease our unrecognized tax benefits by an additional $ 1.8 , primarily as a result of expiring statute of limitations periods.

As of January 31, 2021, the undistributed earnings of our foreign subsidiaries remain permanently reinvested.

During calendar year 2020, the Coronavirus Aid, Relief, and Economic Security Act and Consolidated Appropriations Act of 2021 were enacted in response to the COVID-19 pandemic and economic downturn.

These statutes included rollbacks of certain provisions of the U.S.

Tax Cuts and Jobs Act (the “Tax Act”), tax extenders for expiring tax breaks, and other tax provisions.

While these specific rollbacks and tax provisions had minimal impact to the Company, any future legislative actions in response to COVID-19 could further modify provisions of the Tax Act, and such changes will need to be analyzed for their respective impact on our income taxes at that time.

The effective income tax rates for the three months ended July 31, 2021 and 2020, were 25.0 and 24.4 percent, respectively.

During the three months ended July 31, 2021 and 2020, the effective income tax rates varied from the U.S.

statutory income tax rate of 21.0 percent primarily due to 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 estimated $ 3.3 , primarily as a result of the expiration of statute of limitation periods.

Accumulated Other Comprehensive Income (Loss)

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Income tax benefit (expense) — ( 0.6 ) 0.9 ( 0.1 ) 0.2

Balance at January 31, 2021 $ ( 21.1 ) $ ( 177.4 ) $ ( 110.0 ) $ 5.0 $ ( 303.5 )

Balance at July 31, 2021 $ ( 13.0 ) $ ( 172.5 ) $ ( 99.9 ) $ 3.8 $ ( 281.6 )

Adjustment Net Gains (Losses)

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Income tax benefit (expense) — ( 0.8 ) ( 0.5 ) ( 0.2 ) ( 1.5 )

Balance at January 31, 2020 $ ( 32.9 ) $ ( 132.4 ) $ ( 106.0 ) $ 5.0 $ ( 266.3 )

(A) The reclassification from accumulated other comprehensive income (loss) to interest expense was related to terminated interest rate contracts.

The current period charge in 2020 was related to losses on the interest rate contracts entered into in November 2018 and June 2018 that were terminated in 2020.

Balance at July 31, 2020 $ ( 37.6 ) $ ( 183.0 ) $ ( 145.0 ) $ 4.7 $ ( 360.9 )

(A) The reclassification is composed of deferred gains (losses) related to terminated interest rate contracts.

During both 2022 and 2021, the reclassification was primarily from accumulated other comprehensive income (loss) to interest expense.

In addition, during the first quarter of 2022, a portion of the reclassification was to other income (expense) – net, which was driven by the prepayment of the Senior Notes due March 15, 2022.

For additional information, see Note 9:

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(B) The reclassification from accumulated other comprehensive income (loss) to other income (expense) – net is composed of settlement charges and amortization of net losses and prior service costs.

The reclassification adjustments in 2021 primarily include the impact of the nonrecurring settlement charge related to the purchase of a group annuity contract to transfer our Canadian defined benefit pension plan obligations to an insurance company.

For additional information, see Note 8:

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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 the alleged price-fixing of shelf stable tuna products prior to 2011 by a business previously owned by, but divested prior to our acquisition of, Big Heart Pet Brands, the significant majority of which were settled and paid during 2019.

While we cannot predict with certainty the ultimate results of these proceedings or potential settlements associated with these or other matters, we have accrued losses for certain contingent liabilities that we have determined are probable and reasonably estimable at January 31, 2021.

Based on the information known to date, with the exception of the matters discussed below, we do not believe the final outcome of these proceedings would have a material adverse effect on our financial position, results of operations, or cash flows.

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In June 2019, the state agency responsible for administering the Proposition 65 program, the California Office of Environmental Health Hazard Assessment (“OEHHA”), approved a regulation clarifying that cancer warnings are not required for coffee under Proposition 65, and in August 2020, the trial court granted the Defendants’ motion for summary judgment based on the regulation.

CERT submitted its formal notice to appeal on November 20, 2020.

CERT appealed the ruling in November 2020 to the California Court of Appeals for the Second Appellate District, which is currently pending.

We are also defendants in nine pending putative class action lawsuits filed in federal courts in California, Florida, Illinois, Missouri, Texas, Washington, and Washington D.C.

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Their claims are premised on allegations that we have misrepresented the number of servings that can be made from various canisters of Folgers coffee on the packaging for those products.

Five of the lawsuits have been transferred to the United States District Court for the Western District of Missouri for coordinated pre-trial proceedings.

Similar claims have been asserted against certain retailers of our Folgers coffee products, and indemnity claims have been asserted by such retailers against us.

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The outcome and the financial impact of these cases, if any, cannot be predicted at this time.

Accordingly, no loss contingency has been recorded for these matters as of January 31, 2021, and the likelihood of loss is not considered probable or estimable.

Accordingly, no loss contingency has been recorded for these matters as of July 31, 2021, and the likelihood of loss is not considered probable or estimable.

However, if we are required to pay significant damages, our business and financial results could be adversely impacted, and sales of those products could suffer not only in these locations but elsewhere.

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The following table sets forth common share information.

January 31, 2021 April 30, 2020

July 31, 2021 April 30, 2021

Common shares authorized 300.0 300.0

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Repurchase Program:

On October 22, 2020, the Board authorized the repurchase of up to 5.0 million common shares, in addition to the 3.6 million common shares that remained available for repurchase pursuant to prior authorizations of the Board, for a total of 8.6 million common shares available for repurchase.

Under our repurchase program, 4.5 million common shares were repurchased for $ 521.9 between December 2, 2020, and January 29, 2021, of which 0.2 million common shares will be settled during the fourth quarter of 2021.

Included in the total repurchases during the third quarter of 2021 were 2.0 million common shares repurchased under a 10b5-1 plan entered into on December 30, 2020.

At January 31, 2021, approximately 4.1 million common shares remain available for repurchase pursuant to the Board’s authorizations.

The remaining shares repurchased during the nine months ended January 31, 2021 and 2020, consisted of shares repurchased from stock plan recipients in lieu of cash payments.

At July 31, 2021, approximately 2.8 million common shares remain available for repurchase pursuant to the Board’s authorizations.

During the three months ended July 31, 2021 and 2020, we did no t repurchase any common shares under a repurchase plan authorized by the Board.

The shares repurchased during the three months ended July 31, 2021 and 2020, consisted of shares repurchased from stock plan recipients in lieu of cash payments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements