2022 Q2 Form 10-K Financial Statement

#000009141922000049 Filed on June 16, 2022

View on sec.gov

Income Statement

Concept 2022 Q2 2022 2021 Q2
Revenue $2.034B $7.999B $1.920B
YoY Change 5.92% -0.05% -8.21%
Cost Of Revenue $1.364B $5.298B $1.185B
YoY Change 15.16% 8.93% -9.14%
Gross Profit $669.7M $2.701B $735.7M
YoY Change -8.97% -13.95% -6.68%
Gross Profit Margin 32.93% 33.76% 38.31%
Selling, General & Admin $352.6M $1.360B $411.1M
YoY Change -14.23% -10.69% 10.1%
% of Gross Profit 52.65% 50.37% 55.88%
Research & Development $48.80M
YoY Change -15.42%
% of Gross Profit 1.81%
Depreciation & Amortization $114.1M $235.5M $114.7M
YoY Change -0.52% 7.29% 1.15%
% of Gross Profit 17.04% 8.72% 15.59%
Operating Expenses $361.8M $1.360B $474.2M
YoY Change -23.7% -10.69% 8.99%
Operating Profit $307.9M $1.024B $261.5M
YoY Change 17.74% -26.18% -25.98%
Interest Expense -$38.00M -$160.9M -$42.40M
YoY Change -10.38% -9.15% -7.02%
% of Operating Profit -12.34% -15.72% -16.21%
Other Income/Expense, Net -$3.800M -$19.10M -$3.000M
YoY Change 26.67% -49.47% 11.11%
Pretax Income $260.2M $843.8M $193.3M
YoY Change 34.61% -28.0% -35.22%
Income Tax $58.10M $212.1M $46.30M
% Of Pretax Income 22.33% 25.14% 23.95%
Net Earnings $202.1M $631.7M $147.0M
YoY Change 37.48% -27.91% -35.04%
Net Earnings / Revenue 9.94% 7.9% 7.66%
Basic Earnings Per Share $5.84
Diluted Earnings Per Share $1.884M $5.83 $1.352M
COMMON SHARES
Basic Shares Outstanding 106.5M shares 107.9M shares 108.3M shares
Diluted Shares Outstanding 108.4M shares

Balance Sheet

Concept 2022 Q2 2022 2021 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $169.9M $169.9M $334.3M
YoY Change -49.18% -49.18% -14.5%
Cash & Equivalents $169.9M $169.9M $334.3M
Short-Term Investments
Other Short-Term Assets $226.2M $226.2M $113.8M
YoY Change 98.77% 98.77% -15.64%
Inventory $1.089B $1.089B $959.9M
Prepaid Expenses
Receivables $524.7M $524.7M $533.7M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $2.010B $2.010B $1.942B
YoY Change 3.52% 3.52% -1.57%
LONG-TERM ASSETS
Property, Plant & Equipment $2.132B $2.238B $2.002B
YoY Change 6.51% 4.42% 1.63%
Goodwill $6.016B $6.024B
YoY Change -0.13% -4.46%
Intangibles $5.652B $6.041B
YoY Change -6.44% -6.03%
Long-Term Investments $26.60M
YoY Change -14.19%
Other Assets $11.91B $112.1M $12.34B
YoY Change -3.47% 8.62% -5.28%
Total Long-Term Assets $14.04B $14.04B $14.34B
YoY Change -2.07% -2.07% -4.37%
TOTAL ASSETS
Total Short-Term Assets $2.010B $2.010B $1.942B
Total Long-Term Assets $14.04B $14.04B $14.34B
Total Assets $16.06B $16.06B $16.28B
YoY Change -1.41% -1.41% -4.04%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.193B $1.193B $1.034B
YoY Change 15.4% 15.4% 32.24%
Accrued Expenses $325.7M $325.7M $381.6M
YoY Change -14.65% -14.65% 25.53%
Deferred Revenue
YoY Change
Short-Term Debt $180.0M $180.0M $82.00M
YoY Change 119.51% 119.51% -66.94%
Long-Term Debt Due $0.00 $1.400M $1.153B
YoY Change -100.0% -99.88%
Total Short-Term Liabilities $1.953B $1.953B $2.868B
YoY Change -31.9% -31.9% 80.68%
LONG-TERM LIABILITIES
Long-Term Debt $4.311B $4.313B $3.517B
YoY Change 22.57% 22.56% -34.55%
Other Long-Term Liabilities $249.5M $323.2M $96.80M
YoY Change 157.75% -23.65% -1.43%
Total Long-Term Liabilities $5.962B $4.636B $5.292B
YoY Change 12.66% 17.59% -26.42%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.953B $1.953B $2.868B
Total Long-Term Liabilities $5.962B $4.636B $5.292B
Total Liabilities $7.915B $7.915B $8.159B
YoY Change -3.0% -3.0% -7.06%
SHAREHOLDERS EQUITY
Retained Earnings $2.893B $2.848B
YoY Change 1.6% 3.67%
Common Stock $5.458B $5.528B
YoY Change -1.26% -4.6%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares 40.00M shares 38.16M shares
Shareholders Equity $8.140B $8.140B $8.125B
YoY Change
Total Liabilities & Shareholders Equity $16.06B $16.06B $16.28B
YoY Change -1.41% -1.41% -4.04%

Cashflow Statement

Concept 2022 Q2 2022 2021 Q2
OPERATING ACTIVITIES
Net Income $202.1M $631.7M $147.0M
YoY Change 37.48% -27.91% -35.04%
Depreciation, Depletion And Amortization $114.1M $235.5M $114.7M
YoY Change -0.52% 7.29% 1.15%
Cash From Operating Activities $393.7M $1.136B $291.0M
YoY Change 35.29% -27.39% 1.15%
INVESTING ACTIVITIES
Capital Expenditures -$173.0M $417.5M -$108.0M
YoY Change 60.19% 36.13% 41.36%
Acquisitions $0.00
YoY Change
Other Investing Activities -$50.60M $68.00M $0.00
YoY Change -226.39% -100.0%
Cash From Investing Activities -$223.6M -$355.5M -$108.0M
YoY Change 107.04% -214.27% 15.02%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $270.4M
YoY Change -60.14%
Debt Paid & Issued, Net $1.157B
YoY Change 65.29%
Cash From Financing Activities -284.1M -$944.5M -353.3M
YoY Change -19.59% -51.41% -377.32%
NET CHANGE
Cash From Operating Activities 393.7M $1.136B 291.0M
Cash From Investing Activities -223.6M -$355.5M -108.0M
Cash From Financing Activities -284.1M -$944.5M -353.3M
Net Change In Cash -114.0M -$164.4M -170.3M
YoY Change -33.06% 189.44% -153.02%
FREE CASH FLOW
Cash From Operating Activities $393.7M $1.136B $291.0M
Capital Expenditures -$173.0M $417.5M -$108.0M
Free Cash Flow $566.7M $718.8M $399.0M
YoY Change 42.03% -42.88% 9.59%

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<span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Use of Estimates:</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> The preparation of consolidated financial statements in conformity with U.S. GAAP requires that we make certain estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates in these consolidated financial statements include, among others, estimates of future cash flows associated with assets, potential asset impairments, useful lives and residual values of long-lived assets used in determining depreciation and amortization, net realizable value of inventories, accruals for trade marketing and merchandising programs, income taxes, and discount rates and other assumptions used in determining defined benefit pension and other postretirement benefit expenses. Actual results could differ from these estimates.</span>
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2 Contract
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CY2022 sjm Net Mark To Market Valuation Of Certain Derivative Positions Recognized In Unallocated Derivative Gains Losses
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CY2022 sjm Cost Of Products Sold Special Project Costs
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CY2021 sjm Cost Of Products Sold Special Project Costs
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CY2021Q2 us-gaap Assets
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CY2020Q2 us-gaap Assets
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498900000 USD
CY2022 us-gaap Payments To Acquire Property Plant And Equipment
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CY2022Q2 us-gaap Assets
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LongLivedAssetsExcludingIntangibles
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CY2021 us-gaap Revenue From Contract With Customer Including Assessed Tax
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CY2020 us-gaap Revenue From Contract With Customer Including Assessed Tax
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222500000 USD
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CY2022Q2 sjm Percentage Of Principal Amount Thereof At Which Company Can Prepay
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CY2022 sjm Net Gain Loss On Derivative Positions Reclassified From Derivative Gains Losses To Segment Operating Profit
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CY2021 sjm Net Gain Loss On Derivative Positions Reclassified From Derivative Gains Losses To Segment Operating Profit
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CY2020 sjm Net Gain Loss On Derivative Positions Reclassified From Derivative Gains Losses To Segment Operating Profit
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CY2021 sjm Net Mark To Market Valuation Of Certain Derivative Positions Recognized In Unallocated Derivative Gains Losses
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93600000 USD
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CY2022 sjm Cumulative Net Mark To Market Valuation Of Certain Derivative Positions Recognized In Unallocated Derivative Gains Losses
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60700000 USD
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4300000 USD
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5500000 USD
CY2021Q2 us-gaap Finance Lease Right Of Use Asset
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2500000 USD
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CY2021Q2 us-gaap Finance Lease Liability
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4300000 USD
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CY2021 us-gaap Operating Lease Cost
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2400000 USD
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100000 USD
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200000 USD
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21600000 USD
CY2021 us-gaap Variable Lease Cost
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23200000 USD
CY2020 us-gaap Variable Lease Cost
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22900000 USD
CY2022 us-gaap Short Term Lease Cost
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CY2021 us-gaap Short Term Lease Cost
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37600000 USD
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35200000 USD
CY2022 us-gaap Sublease Income
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CY2021 us-gaap Sublease Income
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3700000 USD
CY2020 us-gaap Sublease Income
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4300000 USD
CY2022 us-gaap Lease Cost
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109500000 USD
CY2021 us-gaap Lease Cost
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105000000.0 USD
CY2020 us-gaap Lease Cost
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CY2022 us-gaap Operating Lease Payments
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45600000 USD
CY2021 us-gaap Operating Lease Payments
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45700000 USD
CY2020 us-gaap Operating Lease Payments
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50800000 USD
CY2022 us-gaap Finance Lease Interest Payment On Liability
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100000 USD
CY2021 us-gaap Finance Lease Interest Payment On Liability
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200000 USD
CY2020 us-gaap Finance Lease Interest Payment On Liability
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200000 USD
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2100000 USD
CY2021 us-gaap Finance Lease Principal Payments
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2600000 USD
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2800000 USD
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7200000 USD
CY2021 us-gaap Right Of Use Asset Obtained In Exchange For Operating Lease Liability
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34800000 USD
CY2020 us-gaap Right Of Use Asset Obtained In Exchange For Operating Lease Liability
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57000000.0 USD
CY2022 us-gaap Right Of Use Asset Obtained In Exchange For Finance Lease Liability
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1800000 USD
CY2021 us-gaap Right Of Use Asset Obtained In Exchange For Finance Lease Liability
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1100000 USD
CY2020 us-gaap Right Of Use Asset Obtained In Exchange For Finance Lease Liability
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2600000 USD
CY2022Q2 us-gaap Lessee Operating Lease Liability Payments Due Next Twelve Months
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42200000 USD
CY2022Q2 us-gaap Finance Lease Liability Payments Due Next Twelve Months
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1400000 USD
CY2022Q2 us-gaap Lessee Operating Lease Liability Payments Due Year Two
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30600000 USD
CY2022Q2 us-gaap Finance Lease Liability Payments Due Year Two
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1100000 USD
CY2022Q2 us-gaap Lessee Operating Lease Liability Payments Due Year Three
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21600000 USD
CY2022Q2 us-gaap Finance Lease Liability Payments Due Year Three
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800000 USD
CY2022Q2 us-gaap Lessee Operating Lease Liability Payments Due Year Four
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18900000 USD
CY2022Q2 us-gaap Finance Lease Liability Payments Due Year Four
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400000 USD
CY2022Q2 us-gaap Lessee Operating Lease Liability Payments Due Year Five
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5400000 USD
CY2022Q2 us-gaap Finance Lease Liability Payments Due Year Five
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100000 USD
CY2022Q2 us-gaap Lessee Operating Lease Liability Payments Due After Year Five
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2700000 USD
CY2022Q2 us-gaap Finance Lease Liability Payments Due After Year Five
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200000 USD
CY2022Q2 us-gaap Lessee Operating Lease Liability Payments Due
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121400000 USD
CY2022Q2 us-gaap Finance Lease Liability Payments Due
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<div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Note 15: Contingencies</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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, the significant majority of which were settled and paid during 2019 and 2020. 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 April 30, 2022. 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.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In addition to the legal proceedings discussed above, we are currently a defendant in CERT v. Brad Barry LLC, et al., which alleges that we, in addition to the other Defendants who manufacture, package, distribute, or sell packaged coffee, failed to provide warnings for our coffee products of exposure to the chemical acrylamide as required under Proposition 65. CERT sought equitable relief, including warnings to consumers, as well as civil penalties in the amount of the statutory maximum of $2,500 per day per violation of Proposition 65. In addition, CERT asserted that every consumed cup of coffee, absent a compliant warning, was equivalent to a violation under Proposition 65. In June 2019, the state agency responsible for administering the Proposition 65 program, 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 appealed the ruling in November 2020 to the California Court of Appeals for the Second Appellate District, which is currently pending. </span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We are also defendants in a series of putative class action lawsuits that were originally filed in federal courts in California, Florida, Illinois, Missouri, New York, Texas, Washington, and Washington D.C. but have been transferred to the United States District Court for the Western District of Missouri for coordinated pre-trial proceedings. The plaintiffs assert claims arising under various state laws for false advertising, consumer protection, deceptive and unfair trade practices, and similar statutes. Their claims are premised on allegations that we have misrepresented the number of servings that can be made from various canisters of </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Folgers</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> coffee on the packaging for those products.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">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 April 30, 2022, 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.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Product Recall: </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Subsequent to April 30, 2022, we initiated a voluntary recall of select </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> peanut butter products produced at our Lexington, Kentucky, facility and sold primarily in the U.S., due to potential salmonella contamination. At that time, we also suspended the manufacturing of </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">peanut butter products at the Lexington facility. No other products produced at our other facilities were affected by this recall. As a result, and in accordance with U.S. GAAP, we recorded reserves of $52.3 in our consolidated financial statements as of April 30, 2022, within our U.S. Retail Consumer Foods segment, which was inclusive of unsaleable inventory as of April 30, 2022, as well as estimated customer returns and consumer refunds related to net sales in 2022. We anticipate these costs will be recovered by insurance, and as a result, an insurance receivable of $49.8, net of the deductible, was also recorded as of April 30, 2022. </span></div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On June 10, 2022, we announced our plans to resume manufacturing </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> peanut butter products at our Lexington facility. Further, our Memphis, Tennessee, facility was not affected by the recall and has continued to manufacture </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">peanut butter products. However, we temporarily paused shipments from the Memphis facility to eliminate confusion while customers cleared their shelves of potentially impacted products manufactured at the Lexington facility. We will resume shipping from both the Lexington and Memphis facilities and are partnering with retailers to restock </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">peanut butter products as soon as possible. Based on progress to date, we believe this matter will be substantially resolved during the first quarter of 2023. Based on our best estimates, we anticipate an unfavorable pre-tax impact of approximately $125.0 in 2023, net of the remaining anticipated insurance recoveries, primarily related to the estimated impact of manufacturing downtime, customer returns and penalties, and unsaleable inventory, as well as other recall related costs. The recall will primarily impact our U.S. Retail Consumer Foods segment. Our ultimate loss from the </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">peanut butter</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%"> </span>recall could differ materially from these estimates, primarily dependent upon the magnitude of lost sales resulting from the unavailability of products for a longer period of time than anticipated, as well as any resulting adverse consumer reaction, including the loss of perceived value and any shift in consumer preferences.
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