Executive Summary

Three Months Ended July 31,

-------------------------------

% Increase

2009__ 2008__ (Decrease)

------- ----------- ------------

(Dollars in millions, except per share data)

Net sales__ $1,051.5__ $663.7__ 58%

Operating income__ $168.6__ $71.8__ 135%

% of net sales__ 16.0%__ 10.8%

Net income:

Income__ $98.1__ $42.3__ 132%

Income per diluted share__ $0.83__ $0.77__ 8%

EBITDA__ $212.5__ $89.4__ 138%

-- Sales increased 58 percent with the addition of Folgers and on strong

volume gains across the U.S. retail businesses. Operating margins

expanded significantly, and as a result, net income growth substantially

exceeded net sales growth.

-- Merger and integration costs of $0.09 per diluted share are included in

the first quarter of 2010 while restructuring and merger and integration

costs of $0.05 per diluted share are included in the first quarter of

2009. Excluding these items, the Company's non-GAAP income per

diluted share was $0.92 and $0.82 for the first quarter of 2010 and

2009, respectively, an increase of 12 percent.

-- Amortization expense of $0.10 and $0.02 per diluted share is included in

the first quarter of 2010 and 2009, respectively.

"We are off to a strong start this year, with good results in our core Smucker business and the addition of Folgers, which continues its strong performance," commented Richard Smucker, Executive Chairman and Co-Chief Executive Officer. "As we enter the Fall Bake and Holiday period, we will have the first opportunity to offer multi-branding promotional events including Folgers(R). We support our brands with investments in product innovation and marketing, and believe we are well-positioned for continued long-term profitable growth."

"More than ever, we believe that owning number one brands provides a competitive advantage, and our recent results continue to demonstrate the success of this strategy," added Tim Smucker, Chairman of the Board and Co-Chief Executive Officer. "Our strong and growing portfolio of number one brands meets the needs of today's consumers, particularly as the 'eat at home' trend continues. We play an important role in these family moments, by offering trusted products and simple pleasures."

Net Sales

Three Months Ended July 31,

------------------------------------

Increase

2009__ 2008__ (Decrease)__ %

-------- --------__ ---------__ --

(Dollars in millions)

Net sales__ $1,051.5__ $663.7__ $387.8__ 58%

Adjust for noncomparable items:

Acquisitions:

Folgers__ $(399.1)__ $-__ $(399.1)

Other__ (1.9)__ -__ (1.9)

-------- --------__ ---------__ --

$(401.0)__ $-__ $(401.0)

Foreign exchange__ 9.0__ -__ 9.0

-------- --------__ ---------__ --

Net sales without acquisitions

and foreign exchange__ $659.5__ $663.7__ $(4.2) (1%)

======== ========__ =========__ ==

Net sales were up 58 percent in the first quarter of 2010 compared to 2009, primarily due to the addition of Folgers. Excluding Folgers, net volume increased 2 percent, led by Pillsbury(R) flour, baking mixes, and frostings, Crisco(R) oils, Jif(R) peanut butter, and Smucker's(R) fruit spreads which were partially offset by decreases in the special markets segment. Volume gains were more than offset by price declines taken in calendar 2009, primarily in the U.S. retail oils and baking segment, and higher promotional spending in certain categories. Excluding acquisitions and foreign exchange, net sales were down 1 percent in the first quarter of 2010, compared to 2009.

Margins

Three Months Ended

July 31,

-----------

2009__ 2008

----__ ----

(% of net sales)

Gross profit__ 38.6% 31.3%

Selling, distribution, and administrative expenses:

Marketing and selling__ 10.0% 10.2%

Distribution__ 3.5%__ 3.5%

General and administrative__ 5.6%__ 6.0%

----__ ----

19.1% 19.7%

====__ ====

Amortization__ 1.7%__ 0.2%

Restructuring and merger and integration costs__ 1.6%__ 0.6%

Other operating expense - net__ 0.2%__ 0.0%

----__ ----

Operating Income__ 16.0% 10.8%

====__ ====

Overall, gross profit increased $198.3 million in the first quarter of 2010 compared to 2009 with Folgers contributing over 90 percent of the increase. As a result, gross margin improved from 31.3 percent in the first quarter of 2009, to 38.6 percent in 2010. Folgers' gross margin was favorably impacted by its strong sales volume, favorable green coffee market conditions, and product sales mix. Gross profit on the Company's base business improved by approximately 4 percent, and increased 1.7 percent of net sales primarily attributable to lower costs.

Selling, distribution, and administrative ("SD&A") expenses increased 54 percent for the first quarter of 2010, compared to 2009, with the addition of Folgers accounting for the majority of the increase. As a percentage of net sales, SD&A decreased from 19.7 percent in the first quarter of 2009 to 19.1 percent in 2010. Consistent with the Company's strategy of long-term investment in its brands, marketing expense increased during the first quarter of 2010, compared to 2009, in support of the Company's brand equity initiatives, including new advertising. However, total marketing and selling expenses decreased as a percent of net sales, along with corporate administrative expenses, reflecting efficiencies realized upon integration of Folgers.

Amortization expense, a noncash item, increased $16.9 million to 1.7 percent of net sales in the first quarter of 2010, compared to 0.2 percent in the same period in 2009, reflecting the addition of intangible assets associated with the Folgers transaction.

Operating income more than doubled compared to the first quarter of 2009, and improved from 10.8 percent to 16.0 percent of net sales. Merger and integration costs were $13.1 million higher in the first quarter of 2010 compared to 2009, reducing operating margin by 1.6 percentage points, as integration activities related to Folgers continued. Excluding the impact of merger and integration costs in both years, and further excluding restructuring costs in 2009, operating income increased from 11.4 percent in 2009 to 17.6 percent of net sales in 2010.

Interest and Income Taxes

Interest expense increased $8.2 million during the first quarter of 2010, compared to 2009, as a result of an increase in 2009 in the Company's debt obligations associated with the Folgers transaction, offset slightly by the retirement of $75 million in debt on June 1, 2009.

Income tax expense increased $32.0 million during the first quarter of 2010 compared to 2009. The effective tax rate increased to 35.2 percent in the first quarter of 2010 compared to 33.3 percent in 2009, reflecting the higher effective tax rate associated with the Folgers business and the net favorable resolution of previously open tax positions in 2009 as compared to 2010.

Segment Performance

Three Months Ended July 31,

----------------------------

% Increase

2009__ 2008 (Decrease)

-------- ------ ----------

(Dollars in millions)

Net sales:

U.S. retail coffee market__ $366.2__ $-__ n/a

U.S. retail consumer market__ 291.0__ 274.0__ 6%

U.S. retail oils and baking market__ 194.4__ 198.2__ (2%)

Special markets__ 199.9__ 191.5__ 4%

Segment profit:

U.S. retail coffee market__ $127.3__ $-__ n/a

U.S. retail consumer market__ 67.0__ 59.8__ 12%

U.S. retail oils and baking market__ 28.6__ 28.1__ 2%

Special markets__ 28.2__ 20.7__ 36%

Segment profit margin:

U.S. retail coffee market__ 34.8%__ n/a

U.S. retail consumer market__ 23.0%__ 21.8%

U.S. retail oils and baking market__ 14.7%__ 14.2%

Special markets__ 14.1%__ 10.8%

U.S. Retail Coffee Market

The U.S. retail coffee market segment contributed $366.2 million to net sales in the first quarter of 2010. Compared to the same three-month period last year, prior to the transaction, volume increased approximately 9 percent. The continued expansion of the Dunkin' Donuts(R) brand in the gourmet category and strong growth in traditional roast and ground led to the growth compared to last year.

The U.S. retail coffee market segment added $127.3 million in segment profit for the first quarter of 2010, representing a 34.8 percent segment profit margin. Margins in the coffee segment were above expected long-term levels due to favorable commodity costs and volume related operating efficiencies.

U.S. Retail Consumer Market

U.S. retail consumer market segment net sales for the quarter were up 6 percent compared to the prior year, primarily due to a 7 percent volume gain led by Jif(R) peanut butter, Smucker's(R) fruit spreads, and Hungry Jack(R) pancakes and syrups. Smucker's Uncrustables(R) were down for the quarter.

U.S. retail consumer market profit increased 12 percent for the first quarter of 2010 compared to the same period in 2009, mainly due to sales growth, product mix, and supply chain efficiencies. Segment profit margin for the quarter improved from 21.8 percent of net sales in the first quarter of 2009 to 23.0 percent in 2010.

U.S. Retail Oils and Baking Market

Net sales in the U.S. retail oils and baking market segment were down 2 percent for the first quarter of 2010 compared to 2009, reflecting the impact of higher promotional spending and price declines in shortening, oils, flour, and canned milk. Total volume in the U.S. retail oils and baking market was up 8 percent, with double-digit gains in Crisco(R) oils and Pillsbury(R) flour, baking mixes, and frostings, offsetting declines in canned milk.

U.S. retail oils and baking market profit increased 2 percent for the first quarter of 2010, compared to the same period in 2009. Segment profit margin improved to 14.7 percent of net sales from 14.2 percent in 2009, due to lower commodity costs and supply chain efficiencies, which more than offset substantially higher marketing investments primarily in support of Crisco(R) olive oil and the Pillsbury(R) brand.