10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 1, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-16247

FLOWERS FOODS, INC.

(Exact name of registrant as specified in its charter)

Georgia	58-2582379
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
1919 Flowers Circle Thomasville, Georgia	31757
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(229) 226-9110

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	FLO	NYSE

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price of the shares of common stock on the New York Stock Exchange on July 17, 2021, was $4,982,859,803.

The number of shares of the registrant’s Common Stock outstanding as of February 17, 2022 was 211,536,622.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for the 2022 Annual Meeting of Shareholders to be held May 26, 2022, which is expected to be filed with the Securities and Exchange Commission on or about April 12, 2022, have been incorporated by reference into Part III, Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K.

Auditor Firm Id: 238 Auditor Name: PricewaterhouseCoopers LLP Auditor Location: Atlanta, Georgia

FORM 10-K REPORT

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Business	4
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	21
Item 2.	Properties	21
Item 3.	Legal Proceedings	21
Item 4.	Mine Safety Disclosures	21
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	22
Item 6.	[Reserved]	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 8.	Financial Statements and Supplementary Data	42
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	42
Item 9A.	Controls and Procedures	42
Item 9B.	Other Information	43
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	43
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	44
Item 11.	Executive Compensation	44
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	44
Item 13.	Certain Relationships and Related Transactions, and Director Independence	45
Item 14.	Principal Accounting Fees and Services	45
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	46
Item 16.	Form 10-K Summary	50
	Signatures	51

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Forward-Looking Statements

Statements contained in this filing and certain other written or oral statements made from time to time by Flowers Foods, Inc. (the “company”, “Flowers Foods”, “Flowers”, “us”, “we”, or “our”) and its representatives that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to current expectations regarding our future financial condition and results of operations and the ultimate impact of the novel strain of coronavirus (“COVID-19”) on our business, results of operations and financial condition and are often identified by the use of words and phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “would,” “is likely to,” “is expected to” or “will continue,” or the negative of these terms or other comparable terminology. These forward-looking statements are based upon assumptions we believe are reasonable.

Forward-looking statements are based on current information and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected. Certain factors that may cause actual results, performance, liquidity, and achievements to differ materially from those projected are discussed in this Annual Report on Form 10-K (the “Form 10-K”) and may include, but are not limited to:

• unexpected changes in any of the following: (i) general economic and business conditions; (ii) the competitive setting in which we operate, including advertising or promotional strategies by us or our competitors, as well as changes in consumer demand; (iii) interest rates and other terms available to us on our borrowings; (iv) energy and raw materials costs and availability and hedging counter-party risks; (v) relationships with or increased costs related to our employees and third-party service providers; (vi) laws and regulations (including environmental and health-related issues); and (vii) accounting standards or tax rates in the markets in which we operate;

• the ultimate impact of the COVID-19 pandemic and future responses and/or measures taken in response thereto, including, but not limited to, new and emerging variants of the virus and the efficacy and distribution of vaccines, which are highly uncertain and are difficult to predict;

• the loss or financial instability of any significant customer(s), including as a result of product recalls or safety concerns related to our products;

• changes in consumer behavior, trends and preferences, including health and whole grain trends, and the movement toward more inexpensive store branded products;

• the level of success we achieve in developing and introducing new products and entering new markets;

• our ability to implement new technology and customer requirements as required;

• our ability to operate existing, and any new, manufacturing lines according to schedule;

• our ability to implement and achieve our environmental, social, and governance goals in accordance with suppliers, regulations, and customers;

• our ability to execute our business strategies which may involve, among other things, (i) the integration of acquisitions or the acquisition or disposition of assets at presently targeted values, (ii) the deployment of new systems and technology, and (iii) an enhanced organizational structure;

• consolidation within the baking industry and related industries;

• changes in pricing, customer and consumer reaction to pricing actions (including decreased volumes), and the pricing environment among competitors within the industry;

• our ability to adjust pricing to offset, or partially offset, inflationary pressure on the cost of our products;

• disruptions in our direct-store-delivery distribution model, including litigation or an adverse ruling by a court or regulatory or governmental body that could affect the independent contractor classifications of the independent distributor partners;

• increasing legal complexity and legal proceedings that we are or may become subject to;

• labor shortages and turnover or increases in employee and employee-related costs;

• the credit, business, and legal risks associated with independent distributor partners and customers, which operate in the highly competitive retail food and foodservice industries;

• any business disruptions due to political instability, pandemics, armed hostilities, incidents of terrorism, natural disasters, labor strikes or work stoppages, technological breakdowns, product contamination, product recalls or safety concerns

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related to our products, or the responses to or repercussions from any of these or similar events or conditions and our ability to insure against such events;

• the failure of our information technology (“IT”) systems to perform adequately, including any interruptions, intrusions or security breaches of such systems or risks associated with the planned implementation of the upgrade of our enterprise resource planning (“ERP”) system; and

• the potential impact of climate change on the company, including physical and transition risks, higher regulatory and compliance costs, reputational risks, and availability of capital on attractive terms.

The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other disclosures made by the company (such as in our other filings with the Securities and Exchange Commission (“SEC”) or in company press releases) for other factors that may cause actual results to differ materially from those projected by the company. Refer to Part I, Item 1A., Risk Factors, of this Form 10-K for additional information regarding factors that could affect the company’s results of operations, financial condition and liquidity.

We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law. You are advised, however, to consult any further public disclosures by the company (such as in our filings with the SEC or in company press releases) on related subjects.

We own or have rights to trademarks or trade names that we use in connection with the operation of our business, including our corporate names, logos and website names. In addition, we own or have the rights to copyrights, trade secrets and other proprietary rights that protect the content of our products and the formulations for such products. Solely for convenience, some of the trademarks, trade names and copyrights referred to in this Form 10-K are listed without the ^©, ^® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, trade names and copyrights.

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PART I

Item 1. Business

The Company

Flowers Foods, Inc. (which we reference to herein as “we,” “our,” “us,” the “company,” “Flowers” or “Flowers Foods”), founded in 1919 as a Georgia corporation and headquartered in Thomasville, Georgia, is currently the second-largest producer and marketer of packaged bakery foods in the United States (“U.S.”).  Our principal products include breads, buns, rolls, snack cakes, and tortillas and are sold under a variety of brand names, including Nature’s Own, Dave’s Killer Bread (“DKB”), Wonder, Canyon Bakehouse, Tastykake, and Mrs. Freshley’s.  Our brands are among the best known in the baking industry. Many of our brands have a major presence in the product categories in which they compete.

Flowers’ strategic priorities include developing our team, focusing on our brands, prioritizing our margins, and proactively seeking out smart, disciplined acquisitions and are described further in the following section.  We believe executing on our strategic priorities will drive future growth and margin expansion and deliver meaningful shareholder value over time.  

COVID-19

We continue to monitor the impact of the ongoing COVID-19 pandemic on our business operations, results of operations, and liquidity. Our operations may continue to experience disruption due to the continued uncertainty caused by the pandemic, including but not limited to additional variants of the COVID-19 virus, new geographic hotspots, changes in the number of COVID-19 cases, the rate of vaccination within the U.S. population and the efficacy of the vaccines, changes in the global and U.S. economic environment, and changes in pandemic safety policies.  

In recognition and support of our frontline workers, we paid a total of $5.2 million and $12.3 million in appreciation bonuses to eligible hourly and non-exempt employees, leased labor, and contract workers in Fiscal 2021 and 2020, respectively.  These appreciation bonuses are in addition to the company’s annual performance-based cash incentive plan, in which all Flowers employees participate.  

Our Fiscal 2021 sales declined compared to Fiscal 2020 primarily due to the additional week in the prior year.  Fiscal 2020 benefitted from the significant rise in demand for our branded retail products at the beginning of the COVID-19 pandemic, as well as positive shifts in mix throughout the year and the additional week. Comparatively, Fiscal 2021 benefitted from favorable pricing, a continued positive shift in mix from store branded retail to branded retail products, and a partial recovery in non-retail sales. As steps to mitigate the pandemic have waned, including the easing of mandatory shutdowns and restaurant closures, our non-retail sales have been recovering.  Compared to our historical pre-pandemic sales, our Fiscal 2021 sales were elevated as we continued to benefit from the positive mix shift to branded retail products and favorable pricing, partially offset by volume declines.  The unpredictability of the pandemic makes forecasting this recovery in non-retail sales difficult, but such a recovery or a significant shift in mix from branded retail to store branded retail products could negatively impact our results of operations, including our net sales, earnings, and cash flows.  For additional discussion on the impact of the pandemic on our results of operations, refer to Part II, Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Form 10-K.

We believe we have sufficient liquidity to satisfy our cash needs and we continue to take steps to preserve adequate liquidity during the ongoing pandemic as further discussed in Part II, Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Form 10-K.  As discussed further in the “Transformation Strategy Initiatives” section below, we are continuing to move forward with the ERP system upgrade and our digital strategy initiatives and do not anticipate the pandemic to materially alter the timing of these initiatives.

Our main focus throughout the pandemic has been and continues to be the health and safety of our team members and independent distributor partners. From the start of the pandemic, we have followed the guidance of the U.S. Centers for Disease Control and Prevention (CDC), taking a number of recommended steps to safeguard those in our facilities. These steps included, but are not limited to, monitoring the symptoms of everyone entering our facilities, requiring face coverings, maintaining (where possible) social distancing of six feet, conducting enhanced cleaning and sanitizing of common areas and frequently touched surfaces, performing decontamination of work areas and equipment when there is a confirmed or presumptive case of COVID-19 at a facility, and contact tracing. Company-wide bans on non-essential travel and non-essential visitors at all locations were put into place, corporate offices were closed, and office staff were directed to work remotely. In addition, the company issued regular communications about COVID-19 prevention steps. When COVID-19 vaccinations became available, we shared educational information with our team members and encouraged vaccination for those eligible.  

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We have followed the guidance issued by the CDC and the U.S. Occupational Safety and Health Administration (OSHA) and modified our face mask and wellness screening policies to align with local, state, and workplace safety regulations. We remain vigilant in reporting COVID-19 cases in our facilities and continue to evaluate our pandemic safety measures as the pandemic evolves. The majority of employees in non-production roles continue to work remotely. We intend to implement a work policy in 2022 addressing guidelines for three distinct work personas: full-time remote, full-time in office, or flex, a combination of the two. These plans may be impacted by, among other things, consideration of pandemic safety measures, the rate of vaccinations and the efficacy of the vaccines, the threat of additional COVID-19 variants, and the ability of office staff to work effectively from remote locations. Although the impact of these measures, or any other measures adopted by governmental authorities, on our business and workforce is uncertain, these requirements may result in increased costs and could have an adverse effect on our business, results of operations, and financial condition.

While we have had no temporary production interruptions in Fiscal 2021 due to COVID-19, such interruptions are possible in the future due to the uncertainty of the pandemic. The potential closure of several of our bakeries across the country at the same time – or in close succession – could negatively affect our ability to meet our production requirements, even if the interruption is temporary. Additionally, unforeseen disruptions in other areas of our operations, including but not limited to procurement of raw materials, transport of our products, or recovery by our foodservice customers, could negatively impact our operations, results of operations, cash flows, and liquidity.

During Fiscal 2021, we have experienced labor shortages at some of our bakeries. A number of factors may continue to adversely affect the labor force available to us, including high employment and government regulations. Other factors that may negatively affect our ability to efficiently operate our production lines or run at full capacity might include, but are not limited to, a labor shortage or increased turnover rates within our workforce that could lead to increased labor costs, including additional overtime to meet demand and higher wage rates to attract and retain workers. An overall labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on the company’s operations, results of operations, liquidity, or cash flows.

Strategic Initiatives

We are a brand-focused company dedicated to the consumer and committed to growing our most profitable brands through innovation, market expansion, and prudent mergers and acquisitions (“M&A”).  Our strategic priorities and our long-term goals are as follows:

Strategic Priorities:

• Develop team: Capabilities to build brands and create value.

• Focus on brands: Enhance relevancy and expand presence. Invest in our brands to align with consumers to maximize our return on investment.  

• Prioritize margins: Optimize the portfolio and supply chain.

• Smart M&A: Disciplined approach to acquisitions in the grain-based foods arena that enhance our branded portfolio and margin profile.

Long-term Goals:

• Grow sales by 1% to 2% annually (excluding any future acquisitions).

• Grow EBITDA by 4% to 6% annually (excluding any future acquisitions) (The company defines EBITDA as earnings before interest, taxes, depreciation and amortization.).

• Grow earnings per share by 7% to 9% annually.

The key to our success in achieving our goals is our talented and dedicated team.  We recognize the importance of investing in our people as further discussed in the “Human Capital Resources” section below, which details how we attract, retain, and develop our team.  Additionally, we recognize the importance of realigning people and responsibilities in successfully implementing our long-term strategies.  This realignment can take the form of organizational changes or providing crucial tools, including investments in our information systems.  During Fiscal 2020, we implemented organizational changes to better align the team to our new strategies, hired new team members with unique expertise and insight, and created the transformation office.  The transformation office is a cross-functional team responsible for over-overseeing the implementation of our strategic priorities, including our digital and ERP initiatives, which are discussed in more detail under the “Transformation Strategy Initiatives” section below.  

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A major focus of our long-term strategy is to evolve our sales portfolio to higher margin, value-added branded retail products that we expect will generate top line growth and improve overall profitability. We expect an optimized portfolio will drive share gains by targeting growth segments with new, innovative products.  We have established clear roles for the brands and product lines within our portfolio to enable more targeted decision-making on brand investment.  Over the past several years, we have completed brand rationalization initiatives resulting in a more streamlined brand and product assortment, reduced brand portfolio complexity, and increased efficiency.  In Fiscal 2020, our sales mix shifted to more profitable branded retail products due to increases in at-home dining resulting from COVID-19, which led to increased sales and operating income, further illustrating the potential of an optimized portfolio.  In Fiscal 2021, we have continued to benefit from this positive shift in sales mix.

As we implement our targeted sales portfolio strategy, the flexibility of our production and distribution systems allows us to pivot capacity to meet this changing demand.  As an example, in Fiscal 2020, we repurposed bakery assets at our Lynchburg, Virginia facility, converting it to an all-organic bakery to meet rising demand for our DKB products and to better serve east coast markets with fresher product and reduce distribution costs.  Also, we believe our flexible bakery system has been crucial in navigating demand changes caused by the pandemic as we have been able to quickly shift production to high demand products and adjust distribution where needed. We are continuing to optimize our distribution system by reducing network complexity through depot consolidation and reducing transport miles.

M&A has always been, and we expect will continue to be, an important part of our long-term growth strategy.  We employ a disciplined approach to M&A, seeking out candidates primarily in the grain-based foods arena that will enhance our branded portfolio, extend our geographic presence, are a strong cultural fit, and add enhanced capabilities to our company.  We believe our strong balance sheet and cash flow generation will enable us to execute our M&A strategy.  

Transformation Strategy Initiatives

In the second half of Fiscal 2020, we launched initiatives to transform how we operate our business.  The primary goals of these new initiatives are: (1) enable a more agile business model, empowering the organization by fundamentally redesigning core business processes and our ways of working; (2) embed digital capabilities and transform the way we engage with our consumers, customers and employees; and (3) modernize and simplify our application and technology infrastructure landscape, inclusive of the upgrade of our ERP system.  We completed the initial planning and road mapping phase of these multi-year transformation initiatives at the end of Fiscal 2020 and transitioned into the design phase in early Fiscal 2021.  

Digital Strategy Initiatives

Our digital strategy initiatives include investments in digital domains of e-commerce, autonomous planning, and bakery of the future.  In e-commerce, we strive to become a category and market share leader, engage with the consumer through digital platforms and marketplaces, and support our retail partners’ omnichannel strategies.  The autonomous planning domain encompasses predictive ordering, cost-to-serve modeling, integrated business planning, and supply and demand forecasting, among other areas.  Bakery of the future involves transforming our current manufacturing processes and operational visibility to apply industry-leading digital manufacturing tools, such as real-time performance management and visibility, automation of repetitive processes, standardization of processes and procedures, and sensor-based quality monitoring tools to improve consistency and quality.  

Combined, these digital domains are expected to improve data visibility and efficiencies while automating many of our processes.  When fully implemented, we expect this work will further our brand efforts, bring us ever closer to the consumer, increase operational efficiencies, and deliver higher-quality, real-time insights, which will in turn enable more predictive business decision-making. We transitioned into the implementation phase for the e-commerce, autonomous planning, and bakery of the future domains and selected two bakeries for the pilot program for bakery of the future and autonomous planning in Fiscal 2021.  

ERP Upgrade

This initiative includes upgrading our information system to a more robust platform and is expected to improve data management and efficiencies while automating many of our processes.  During the first quarter of Fiscal 2021, we engaged a leading, global consulting firm to assist us in planning and implementing the upgrade of our ERP platform and serve as the system integrator for the project.  We transitioned into the build phase of the project in the beginning of Fiscal 2022.

We expect this initiative will require significant capital investment and expense over the next several years.  See Item 1A., Risk Factors, “We may experience difficulties in designing and implementing the upgrade of our ERP system.”

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Segment

Since the beginning of Fiscal 2019, we have managed our business as one operating segment.  The company concluded it has one operating segment based on the nature of the products the company sells, its intertwined production and distribution model, the internal management structure and information that is regularly reviewed by the chief executive officer (“CEO”), who is the chief operating decision maker, for the purpose of assessing performance and allocating resources.  Beginning with the first quarter of Fiscal 2019, the comparative periods have been presented on a consolidated basis due to the change to a single operating segment.  See Note 2, Summary of Significant Accounting Policies, of Notes to Consolidated Financial Statements of this Form 10-K for detailed financial information about our operating segment.

Brands & Products

We report our sales as branded retail, store branded retail, or non-retail and other.  The non-retail and other category includes foodservice, restaurant, institutional, vending, thrift stores, and contract manufacturing.  The chart below presents our Fiscal 2021 sales by sales category (source:  internal sales data warehouse (“SDW”); amounts may not compute due to rounding).

Our brands are some of the best-known in the U.S. fresh packaged bread industry and many of them hold leading market positions in the categories in which they compete.  We believe having a well-diversified portfolio of brands allows us to be more competitive in the marketplace and appeal to a broader range of consumers. Our principal products are breads, buns, rolls, snack cakes, and tortillas.  The table below presents the major brands within our diversified brand portfolio:

Strategic Positioning	Key Brands
Mainstream	Nature's Own, Wonder, Tastykake
Organic	Dave's Killer Bread
Gluten Free	Canyon Bakehouse

Brand Highlights

• Nature’s Own is the best-selling loaf bread in the U.S.  Nature’s Own’s sales, at retail, were $1.3 billion for Fiscal 2021.

• Nature’s Own Honey Wheat is the #1 Universal Product Code (“UPC”) in the U.S. Fresh Packaged Bread category based on dollars and units.  Nature’s Own Butterbread is the #2 UPC in the loaf category based on dollars and units. (Source: IRI Total US MultiOutlet+C-Store L52 Weeks Ending 12/26/21)

• DKB is the #1 selling organic brand in the U.S. and the company’s #2 brand, with the top-selling organic brand in four different segments (Loaf, Bagels, Breakfast Bread, and English Muffins). (Source: IRI Total US MultiOutlet+C-Store L52 Weeks Ending 12/26/21) DKB’s sales, at retail, were $875 million for Fiscal 2021.

• Canyon Bakehouse, acquired at the end of Fiscal 2018, is the #1 selling gluten-free bread brand in the U.S. (Source: IRI Total US MultiOutlet+C-Store L52 Weeks Ending 12/26/21) Canyon Bakehouse’s sales, at retail, were $137 million for Fiscal 2021.

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• Wonder, over 100 years old, enjoys 98% brand awareness (Source: Kantar Brand Health Tracking Study - Q4 2020). Wonder’s Classic White loaf is the #2 UPC in the white loaf segment based on dollars and units in the U.S.  Wonder’s sales, at retail, were $438 million for Fiscal 2021 (Source: IRI Total US MultiOutlet+C-Store L52 Weeks Ending 12/26/21)

Our brands and products are sold through various channels throughout the U.S.  The table below presents our sales by channel for Fiscal 2021 (source:  internal SDW; amounts may not compute due to rounding).

* All Other includes thrift store, vending, and retail distributor sales.

Marketing

We support our key brands with an advertising and marketing effort that targets consumers through electronic and in-store coupons, social media (such as Facebook and Twitter), digital media (including e-newsletters to consumers), websites (our brand sites and third-party sites), event and sports marketing, on-package promotional offers and sweepstakes, and print advertising. When appropriate, we may join other sponsors with promotional tie-ins. We often focus our marketing efforts on specific products and holidays, such as hamburger and hot dog bun sales during Memorial Day, the Fourth of July, and Labor Day, and snack cakes for specific seasons.  Additionally, we have made and are continuing to make marketing investments to target e-commerce sales as consumers shift to more online shopping alternatives, such as grocery delivery sites, retailer websites and apps, among others.  

Customers

Our top 10 customers in Fiscal 2021 accounted for 53.7% of sales. During Fiscal 2021, our largest customer, Walmart/Sam’s Club, represented 21.2% of the company’s sales. The loss of, or a material negative change in our relationship with, Walmart/Sam’s Club or any other major customer could have a material adverse effect on our business. Walmart/Sam’s Club was the only customer to account for 10% or more of our sales during Fiscal 2021, 2020, and 2019.  

Fresh baked foods’ customers include mass merchandisers, supermarkets and other retailers, restaurants, quick-serve chains, food wholesalers, institutions, dollar stores, and vending companies. We also sell returned and surplus product through a system of thrift stores. The company currently operates 243 such stores and reported sales of $60.3 million during Fiscal 2021 from these outlets.

We also (1) supply national and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries with breads and rolls; (2) sell packaged bakery products to wholesale distributors for ultimate sale to a wide variety of food outlets; and (3) sell packaged snack cakes primarily to customers who distribute them nationwide through multiple channels of distribution, including mass merchandisers, supermarkets, vending outlets and convenience stores. In certain circumstances, we enter into co-packing arrangements with retail customers or other food companies, some of which are competitors.  Although we service public health care, military commissaries, and prisons, among other governmental institutions, we do not have any material government contracts.

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Distribution

We distribute our products through a direct-store-delivery (“DSD”) distribution system and a warehouse delivery system.  The DSD distribution system involves aggregating order levels and delivering products from bakeries to independent distributors for sale and direct delivery to customer stores. The independent distributors are responsible for ordering products, stocking shelves, maintaining special displays, and developing and maintaining good customer relations to ensure adequate inventory and removing unsold goods.  The warehouse delivery system involves primarily delivering our products to customers’ warehouses.

The company has sold the majority of the distribution rights for territories to independent distributors under long-term financing arrangements. Independent distributors, highly motivated by financial incentives from their distribution rights ownership, strive to increase sales by offering outstanding service and merchandising. Independent distributors have the opportunity to benefit directly from the enhanced value of their distribution rights resulting from higher branded sales volume.

Our DSD distribution system is comprised of three types of territories: (1) independent distributor-owned and operated territories (independent distributors own the rights to distribute certain brands of our fresh packaged bakery foods in defined geographic markets); (2) distribution rights that are classified as available for sale in the Consolidated Balance Sheets; and (3) other company operated territories.  The table below presents the approximate number of territories used by the company as of January 1, 2022:

Type of territory	Number of territories
Independent distributor-owned and operated territories		5,340
Territories classified as available for sale		432
Other company operated territories		80
Total territories		5,852

Our warehouse distribution system delivers a portion of our packaged bakery snack products from a central distribution facility located near our Crossville, Tennessee snack cake bakery. We believe this centralized distribution system allows us to achieve both production and distribution efficiencies. Products coming from different bakeries are then cross-docked and shipped directly to customers’ warehouses nationwide. Our frozen bread and roll products are shipped to various outside freezer facilities for distribution to our customers.

Intellectual Property

We own a number of trademarks, trade names, patents, and licenses. The company also sells products under franchised and licensed trademarks and trade names which we do not own pursuant to contractual arrangements.  We consider all of our trademarks and trade names important to our business since we use them to build strong brand awareness and consumer loyalty.

Raw Materials

Our primary baking ingredients are flour, sweeteners, shortening, yeast and water. We also purchase organic and gluten-free ingredients.  We also use paper products, such as corrugated containers, folding cartons, films and plastics to package our bakery foods. We strive to maintain diversified sources for all of our baking ingredients and packaging products.  In addition, we are dependent on natural gas or propane as fuel for firing our ovens.

Commodities, such as our baking ingredients, periodically experience price fluctuations. The cost of these inputs may fluctuate widely due to government policy and regulation, weather conditions, domestic and international supply and demand, global logistics dynamics, or other unforeseen circumstances. We enter into forward purchase agreements and other derivative financial instruments in an effort to manage the impact of such volatility in raw material prices, but some organic and specialty ingredients do not offer the same hedging opportunities to reduce the impact of price volatility.  Any decrease in the supply available under these agreements and instruments could increase the effective price of these raw materials to us and significantly impact our earnings.

Regulations

As a producer and marketer of food items, our operations are subject to regulation by various federal governmental agencies, including the U.S. Food and Drug Administration, the U.S. Department of Agriculture, the U.S. Federal Trade Commission, the U.S. Environmental Protection Agency, the U.S. Department of Commerce, and the U.S. Department of Labor (the “DOL”).  We also are subject to the regulations of various state agencies, with respect to production processes, product quality, packaging, labeling, storage, distribution, labor, and local regulations regarding the licensing of bakeries and the enforcement of state standards and facility

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inspections.  Under various statutes and regulations, these federal and state agencies prescribe requirements and establish standards for quality, purity, and labeling.  Failure to comply with one or more regulatory requirements could result in a variety of sanctions, including monetary fines or compulsory withdrawal of products from store shelves.  

Advertising of our brands is subject to regulation by the Federal Trade Commission, and we are subject to certain health and safety regulations, including those issued under the Occupational Safety and Health Act.

The cost of compliance with such laws and regulations has not had a material adverse effect on the company’s business.  We believe we are currently in substantial compliance with all material federal, state and local laws and regulations affecting the company and its properties.  

Our operations, like those of similar businesses, are subject to various federal, state and local laws and regulations with respect to environmental matters, including air and water quality and underground fuel storage tanks, as well as other regulations intended to protect public health and the environment.  The company is not a party to any material proceedings arising under these laws and regulations.  We believe compliance with existing environmental laws and regulations will not materially affect the Consolidated Financial Statements or the competitive position of the company.  The company is currently in substantial compliance with all material environmental laws and regulations affecting the company and its properties.

Competitive Overview

The U.S. market for fresh and frozen bakery products is estimated at $43.2 billion at retail. This category is intensely competitive and has continued to experience consolidation. Flowers Foods is currently the second-largest company in the U.S. fresh baking industry based on market share as presented in the following chart (amounts may not compute due to rounding). (Source:  IRI Flowers custom database, 52 weeks ending 12-26-21; Flowers private label sales from SDW):

The current competitive landscape for breads and rolls in the U.S. baking industry consists of Bimbo Bakeries USA (BBU), Flowers Foods, and Campbell Soup Company, under the Pepperidge Farm brand, along with a number of smaller independent regional bakers, local bakeries, and retailer-owned bakeries.

Some of these smaller regional bakers do not enjoy the competitive advantages of larger operations, including greater brand awareness and economies of scale in purchasing, distribution, production, IT, advertising and marketing. However, size alone is not sufficient to ensure success in our industry. The company faces significant competition from regional and independent bakeries in certain geographic areas.

Competition in the baking industry continues to be driven by a number of factors, including the ability to serve retail and foodservice customers, generational changes in family-owned businesses, and competitors’ promotional efforts on branded bread and

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store brands. Competition typically is based on the ability to target changing consumer preferences, product availability (including through e-commerce channels), product quality, brand loyalty, price, and effective promotions. Customer service, including frequent deliveries to keep store shelves well-stocked, is also a competitive factor.

The company also faces competition from store brands that are produced either by us or our competitors. Store brands (also known as “private label”) have been offered by food retailers for decades. With the growth of mass merchandisers like Walmart and the ongoing consolidation of regional supermarkets into larger operations, store brands have become a significant competitor to the company in those areas where the company does not have the contract to produce the store brand. The store brand share of retail fresh packaged bread in the U.S. accounts for approximately 19% of the dollar sales and approximately 30% of unit sales, though its share has steadily declined over the past seven years, in particular, the last two years.  

Human Capital Resources

As of January 1, 2022 Flowers and its subsidiaries had approximately 8,900 employees located throughout the U.S. and approximately 4,300 long-term leased employees. Approximately 970 employees are covered by collective bargaining agreements and there are no material outstanding labor disputes.

Our legacy of excellence is built on 100+ years of hard work by thousands of Flowers team members. As W.H. Flowers, Jr. said, “The key to any enterprise or goal is people. People of character, people of integrity, people who don’t mind working and taking advantage of their opportunity.” We continue to strive toward a people-centric legacy by implementing initiatives that enhance the lives of each and every employee—current and prospective.

Flowers aims to attract a qualified workforce through an inclusive and accessible recruiting process that utilizes online recruiting platforms, campus outreach, apprenticeships, internships, and job fairs. In 2022, we plan to advance our partnership with the Thurgood Marshall College Fund by leveraging its Talent Sourcing program in our recruiting efforts.

Flowers is also a proud second chance employer, furthering the commitment started by its DKB brand. Established in 2015, the Dave’s Killer Bread Foundation helps businesses create meaningful and sustainable employment opportunities for individuals impacted by the criminal justice system. At Flowers, we have implemented recruitment initiatives at our bakeries to attract and retain ex-offenders.

In addition, Flowers is a long-time supporter of causes that support U.S. veterans and their families. Presently, Flowers employs more than 550 veterans.

For current Flowers team members, the company offers competitive wages, benefits, and training opportunities, while also promoting a safe and healthy workplace. The company provides its employees with resources to enhance their skills and careers, including:

• Elevating the long-term impact of learning and development in the Flowers organization by investing in a new Learning Management System in Fiscal 2022.

• Providing a range of formal and informal learning programs, which are designed to help employees continuously grow throughout their careers. Programs include Skillsoft online learning and a Mentor Up Mentoring Program which are both available at our bakeries.

• Offering a variety of programs that contribute to our leadership, training and development goals, including internal programs such as the “Flowers Front-Line Leadership Program,” “Lead Now” for leaders at all levels, and “Leading The Flowers Way” for our high potential leaders.

• Encouraging employees to discuss their professional development during annual performance reviews with their supervisors.

• Offering Career Conversations training for supervisory employees to discuss career pathing and employee development.

To foster a greater culture of inclusion, in Fiscal 2021, the entire Flowers senior leadership team participated in unconscious bias training. In Fiscal 2022, Flowers intends to continue its development of diversity, equity, and inclusion (DE&I) training for its workforce. The company’s board of directors (the “Board” or “Board of Directors”) receives regular updates from management on our inclusion and diversity efforts.  We are currently developing a standard set of metrics to be included in these updates to the Board to evaluate our progress on these efforts. These metrics could include statistics pertaining to retention, attrition, and promotion and statistics on DEI trainings administered, among others.  

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Additionally, we regularly conduct anonymous surveys to capture feedback from our team members on a variety of topics, including, but not limited to, confidence in company leadership, competitiveness of our compensation and benefits package, career growth opportunities and how we can make our company an employer of choice. The results are shared with our team members and reviewed by senior leadership, who seek to analyze areas of opportunity and prioritize actions and activities in response to the feedback to drive meaningful change in our overall employee experience. As an example, our leadership team approved the implementation of a self-managed time-off policy for those at the director and above level as a result of survey feedback.

Total Rewards

We have a demonstrated history of investing in our workforce by providing competitive wages and benefits. Our benefits package includes:

• comprehensive health insurance coverage to employees working 30 hours or more each week;

• parental leave to all new parents for birth, adoption or foster placement;

• short-term disability to provide wage protection for up to six months;

• a tuition reimbursement program; and

• a 401(k) plan with generous company match.

We believe that because employees drive our success, they should share in that success. In addition to competitive wages and benefits, when annual company goals are met, eligible team members at all levels are rewarded with a bonus. Furthermore, in recognition and support of our frontline workers, we paid a total of $5.2 million and $12.3 million in appreciation bonuses to eligible hourly and non-exempt employees, leased labor, and contract workers in Fiscal 2021 and 2020, respectively. These appreciation bonuses are in addition to the company’s annual performance-based cash incentive plan, in which all Flowers employees participate.

Environmental, Social and Governance Objectives

We are developing a process to integrate environmental, social and governance objectives into our decision-making to deliver long-term value. In doing so, we intend to consider guidance by our stakeholders and third-party frameworks, including the Sustainability Accounting Standards Board (SASB). To learn more about our sustainability goals, programs, and initiatives, you can access the social responsibility section of our website at https://www.flowersfoods.com/company/social-responsibility, which includes a link to our latest Sustainability Report.  

Sustainability is core to our strategy and how we connect with consumers and grow our company. Our leading brands and delicious bakery foods are made with a commitment to operating efficiently, reducing waste, and sourcing ingredients responsibly.

As part of that strategy, we recognize our responsibility to uphold the company’s founding values, which for more than 100 years, have centered on working ethically, responsibly, and with integrity. We also look for ways to make a positive difference at work and in our communities. By collaborating with stakeholders, including team members, business partners, suppliers, and customers, we are working to become a more sustainable company.

Other Available Information

Throughout this Form 10-K, we incorporate by reference information from parts of other documents filed with the SEC. The SEC allows us to disclose important information by referring to it in this manner, and you should review this information in addition to the information contained in this report.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy statement for the annual shareholders’ meeting, as well as any amendments to those reports, are available free of charge through our website as soon as reasonably practicable after we file them with the SEC. You can learn more about us by reviewing our SEC filings on our website at www.flowersfoods.com in the “REPORTS & FILINGS” section of the “INVESTORS” tab. The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information about SEC registrants, including the company. Except as otherwise expressly set forth herein, the information contained on our website is neither included nor incorporated by reference herein.

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The following corporate governance documents may be obtained free of charge through our website in the “CORPORATE GOVERNANCE” section of the “INVESTORS” tab or by sending a written request to Flowers Foods, Inc., 1919 Flowers Circle, Thomasville, GA 31757, Attention: Investor Relations.

• Finance Committee Charter

• Audit Committee Charter

• Nominating/Corporate Governance Committee Charter

• Compensation Committee Charter

• Flowers Foods, Inc. Employee Code of Conduct

• Code of Business Conduct and Ethics for Officers and Members of the Board of Directors

• Disclosure Policy

• Stock Ownership Guidelines

• Corporate Governance Guidelines

Item 1A. Risk Factors

You should carefully consider the risks described below, together with all of the other information included in this report, in considering our business and prospects. The risks and uncertainties described below are not the only ones facing us. These risk factors are not listed in any order of significance. Additional risks and uncertainties not presently known to us, or that we currently deem insignificant, may also impair our business operations. The occurrence of any of the following risks could harm our business, financial condition, liquidity, or results of operations.

Operational Risks

The extent to which the outbreak of the novel strain of coronavirus (“COVID-19”) and measures taken in response thereto, including any new and emerging variants of the virus and the efficacy and distribution of vaccines, may impact our business, results of operations and financial condition will depend on future developments, which are highly uncertain and are difficult to predict.

COVID-19 has spread throughout the world, including the U.S., and has resulted in governmental and other regulatory authorities throughout the U.S. implementing numerous measures to try to contain the virus and any variants of the virus, such as travel bans and restrictions, quarantines, shelter-in-place orders, business limitations, and shutdowns. These measures have impacted and may further impact the consumer, our workforce and operations, as well as the workforce, operations and financial prospects of our customers, vendors and suppliers. There is considerable uncertainty regarding such measures and potential future measures, such as restrictions on our access to our manufacturing facilities or on our support operations or workforce, or similar limitations for our customers, vendors and suppliers. The spread of COVID-19 has caused us to modify our business practices (including temporary bakery closures and restricting production at certain bakeries, restricting employee travel, developing social distancing plans for our employees, and cancelling physical participation in meetings, events and conferences), and we may take further actions as may be required by governmental and other regulatory authorities or as we determine are in the best interests of our employees, customers, vendors and suppliers. We can provide no assurance that such measures will be sufficient to mitigate the risks posed by the virus or will otherwise be satisfactory to governmental authorities.

COVID-19 has had, and will continue to have, a widespread and broad-reaching effect on the economy and our business. Some of the impacts our business has experienced, is experiencing or may experience as a result of COVID-19 include, but are not limited to, the following:

• We experienced a favorable shift in sales mix to our branded retail products due to the change in consumer buying patterns as a result of COVID-19 during Fiscal 2021 and 2020, which positively impacted our business operations, including our sales, operating income and cash flows;

• Many of our foodservice customers have periodically closed or restricted operations, which has adversely impacted our revenues from these customers, and has impacted, and could continue to impact, our ability to collect payment from these customers;

• Consumer fears about contracting the disease have altered preferences and spending habits, including significant increases in purchases of fresh and frozen breads during the pendency of quarantines, shelter-in-place orders and other

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shutdowns; and these trends have moderated in recent periods, which could negatively affect our performance in future periods as compared to prior periods if consumers were to purchase fewer products from us;

• We have experienced, and may experience in the future, temporary facility closures or partial shutdowns in response to government mandates in certain jurisdictions in which we operate and in response to positive diagnoses for COVID-19 in certain facilities for the safety of our employees;

• Our distribution networks, including our DSD distribution system and our warehouse delivery system, where we manage our inventory, or the operations of our logistics and other service providers may be disrupted, temporarily closed or experience worker shortages;

• Disruptions to our suppliers that supply our ingredients, packaging, and other materials necessary to produce, distribute, and sell our products may affect the ability of our suppliers to fulfill their obligations to us and may cause disruptions to our operations; and

• We also implemented a work from home policy for many of our corporate employees, which may negatively impact productivity and cause other disruptions to our business.

The extent to which the spread of COVID-19 impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and spread of the outbreak and the emergence of any new or worsening variants, its severity, the actions to contain the virus or treat its impact, including the distribution and efficacy of vaccines, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak has subsided, we may continue to experience materially adverse impacts to our business as a result of COVID-19’s global economic impact, including the availability of credit, adverse impacts on our liquidity and any recession that has occurred or may occur in the future. Any of these events could exacerbate the other risks and uncertainties described herein, or in other reports filed with the SEC from time to time, and could materially adversely affect our business, results of operations and financial condition.

Economic conditions may negatively impact demand for our products, which could adversely impact our sales and operating profit.

The willingness of our customers and consumers to purchase our products may depend in part on economic conditions. Worsening economic conditions or future challenges to economic growth could have a negative impact on consumer demand, which could adversely affect our business. Deterioration of national and global economic conditions could cause consumers to shift purchases to more generic, lower-priced, or other value offerings, or consumers may forego certain purchases altogether during economic downturns and could result in decreased demand in the foodservice business. This economic uncertainty may increase pressure to reduce the prices of some of our products, limit our ability to increase or maintain prices, and reduce sales of higher margin products or shift our product mix to low-margin products.

In addition, changes in tax or interest rates, whether due to recession, efforts to combat inflation, financial and credit market disruptions or other reasons, could negatively impact us.

A disruption in the operation of our DSD distribution system could negatively affect our results of operations, financial condition and cash flows.

A material negative change in our relationship with the independent distributor partners could negatively affect our business. Such changes could result from litigation or one or more adverse rulings by courts or regulatory or governmental bodies in any of the jurisdictions in which we operate regarding our independent distributorship model, including actions or decisions that could affect the independent contractor classifications of the independent distributor partners, or an adverse judgment against the company for actions taken by the independent distributor partners. In addition, these changes could result from regulatory developments based on the manner in which the U.S. Department of Labor applies the Fair Labor Standards Act. Any of these developments could materially and negatively affect our financial condition, results of operations and cash flows.

Labor shortages and increased turnover or increases in employee and employee-related costs could have adverse effects on our profitability.

We have recently experienced labor shortages at some of our bakeries. A number of factors may adversely affect the labor force available to us, including high employment levels, federal unemployment subsidies, including unemployment benefits offered in response to the COVID-19 pandemic, and other government regulations, which include laws and regulations related to workers’ health and safety, wage and hour practices, and immigration. A labor shortage or increased turnover rates within our employee base could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our bakeries and bread lines or otherwise operate at full capacity. An overall labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on the company’s operations, results of operations, liquidity or cash flows.  

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Additionally, health care, workers’ compensation, postretirement welfare, and pension costs are increasing and will likely continue to do so. Any substantial increase in these costs may have an adverse impact on our profitability. The company records the liabilities related to its benefit plans based on actuarial valuations, which include key assumptions determined by management. Material changes in benefit plan liabilities may occur in the future due to changes in these assumptions. Future annual amounts could be impacted by various factors, such as changes in the number of plan participants, changes in the discount rate, changes in the expected long-term rate of return, changes in the level of contributions to the plan, and other factors. In addition, legislation or regulations involving labor and employment and employee benefit plans (including employee health care benefits and costs) may impact our operational results.

The costs of maintaining and enhancing the value and awareness of our brands are increasing, which could have an adverse impact on our revenues and profitability.

We rely on the success of our well-recognized brand names and we intend to maintain our strong brand recognition by continuing to devote resources to advertising, marketing and other brand building efforts. Brand value could diminish significantly due to several factors, including consumer perception that we have acted in an irresponsible manner, adverse publicity about our products (whether or not valid), our failure to maintain the quality of our products, the failure of our products to deliver consistently positive consumer experiences, or the products becoming unavailable to consumers. In addition, failure to comply with local or other laws and regulations could also hurt our reputation. Our marketing investments may not prove successful in maintaining or increasing our market share. If we are not able to successfully maintain our brand recognition or were to suffer damage to our reputation or loss of consumer confidence in our products for any of these reasons, our revenues and profitability could be adversely affected.

We rely on several large customers for a significant portion of sales and the loss of one of our large customers could adversely affect our business, financial condition or results of operations.

We have several large customers that account for a significant portion of sales, and the loss of one of our large customers could adversely affect our financial condition and results of operations. Our top ten customers accounted for 53.7% of sales during Fiscal 2021. Our largest customer, Walmart/Sam’s Club, accounted for 21.2% of sales during this period. These customers do not typically enter long-term sales contracts, and instead make purchase decisions based on a combination of price, product quality, consumer demand, and customer service performance. At any time, they may use more of their shelf space, including space currently used for our products, for store branded products or for products from other suppliers. Additionally, our customers may face financial or other difficulties that may impact their operations and their purchases from us. Disputes with significant suppliers could also adversely affect our ability to supply products to our customers. If our sales to one or more of these customers are reduced, this reduction may adversely affect our business, financial condition or results of operations.

Our inability to execute our business strategy could adversely affect our business.

We employ various operating strategies to maintain our position as one of the nation’s leading producers and marketers of bakery products available to customers through multiple channels of distribution. In particular, we initiated under Project Centennial, among other things, (i) the integration of acquisitions or the acquisition or disposition of assets at presently targeted values, (ii) the deployment of new systems and technology, and (iii) an enhanced organizational structure. Our focus on our long-term goals of being consumer-focused and committed to growing our most profitable brands is dependent on our success in achieving our strategic priorities: (i) develop team; (ii) brands focus; (iii) prioritize margins; and (iv) smart M&A activity. These and related demands on our resources may divert the organization’s attention from other business issues. Our success is partly dependent upon properly executing, and realizing cost savings or other benefits from, these often-complex initiatives. Any failure to implement our initiatives could adversely affect our ability to grow margins. If we are unsuccessful in implementing or executing one or more of our business strategies, our business could be adversely affected.

We may be adversely impacted by the failure to successfully execute acquisitions and divestitures and integrate acquired operations.

From time to time, the company undertakes acquisitions or divestitures. The success of any acquisition or divestiture depends on the company’s ability to identify opportunities that help the company meet its strategic objectives, consummate a transaction on favorable contractual terms, and achieve expected returns and other financial benefits.

Acquisitions, including future acquisitions, require us to efficiently integrate the acquired business or businesses, which involves a significant degree of difficulty, including the following:

• integrating the operations and business cultures of the acquired businesses while carrying on the ongoing operations of the businesses we operated prior to the acquisitions;

• managing a significantly larger company than before consummation of the acquisitions;

• the possibility of faulty assumptions underlying our expectations regarding the prospects of the acquired businesses;

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• coordinating a greater number of diverse businesses and businesses located in a greater number of geographic locations;

• attracting and retaining the necessary personnel associated with the acquisitions;

• creating uniform standards, controls, procedures, policies and information systems and controlling the costs associated with such matters; and

• expectations about the performance of acquired trademarks and brands and the fair value of such trademarks and brands.

Divestitures have operational risks that may include impairment charges. Divestitures also present unique financial and operational risks, including diverting management attention from the existing core business, separating personnel and financial data and other systems, and adversely affecting existing business relationships with suppliers and customers.

In situations where acquisitions or divestitures are not successfully implemented or completed, or the expected benefits of such acquisitions or divestitures are not otherwise realized, the company’s business or financial results could be negatively impacted.

Disruption in our supply chain or distribution capabilities from political instability, armed hostilities, incidents of terrorism, natural disasters, weather, inferior product or ingredient supply, or labor strikes could have an adverse effect on our business, financial condition and results of operations.

Our ability to make, move and sell products is critical to our success. Damage or disruption to our manufacturing or distribution capabilities, or the manufacturing or distribution capabilities of our suppliers, due to weather, natural disaster, fire or explosion, terrorism, pandemics, inferior product or ingredient supply, labor strikes or work stoppages, or adverse outcomes in litigation involving our independent distributor model, could impair our ability to make, move or sell our products. Moreover, terrorist activity, armed conflict or political instability, including any escalation of hostility arising out of the conflict between Russia and the Ukraine, or natural disasters that may occur within or outside the U.S. may disrupt manufacturing, labor, and other business operations. Failure to take adequate steps to mitigate the likelihood or potential impact of such events and disruption to our manufacturing or distribution capabilities, or to effectively manage such events if they occur, could adversely affect our business, financial conditions and results of operations.

The third-party vendor management processes may not be appropriately designed to reduce risks related to the delivery of goods, supplies and services.

As part of a concerted effort to achieve cost savings and efficiencies, we have entered into agreements with third-party vendors for the delivery of goods, supplies and services, including IT services. If we do not select quality vendors, appropriately review vendor contracts and monitor these vendors’ performance (including their ability to protect our customer, consumer or other confidential data), or if any of these third-parties do not perform according to the terms of the agreements, we may not be able to achieve the expected cost savings, we may have to incur additional costs to correct errors made by such third-party vendors or our reputation could be harmed by any failure to perform.

Technology Risks

We may be adversely impacted if our IT systems fail to perform adequately, including with respect to cybersecurity issues.

The efficient operation of our business depends on our IT systems. We rely on our IT systems to effectively manage our business data, communications, supply chain, order entry and fulfillment, and other business processes. The failure of our IT systems (including those provided to us by third-parties) to perform as we anticipate could disrupt our business and could result in billing, collecting and ordering errors, processing inefficiencies, and the loss of sales and customers, causing our business and results of operations to suffer.

In addition, our IT systems (including those provided to us by third parties) may be vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, systems failures, security breaches or intrusions (including theft of customer, consumer or other confidential data), and viruses. If we are unable to prevent physical and electronic break-ins, cyber-attacks and other information security breaches, we may suffer financial and reputational damage, be subject to litigation or incur remediation costs or penalties because of the unauthorized disclosure of confidential information belonging to us or to our partners, customers, suppliers or employees.

We may experience difficulties in designing and implementing the upgrade of our ERP system.

We are in the midst of implementing an upgrade to our ERP system to a more robust platform. The upgrade of the ERP system will be designed to accurately maintain our financial records, enhance our operational functionality and provide timely information to our management team related to the operations of the business. The design and implementation of the upgrade to the ERP system

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requires an investment of significant personnel and financial resources, including substantial expenditures for outside consultants, system hardware and software in addition to other expenses in connection with the transformation of our financial and operating processes. We may not be able to implement the ERP system upgrade successfully without experiencing delays, increased costs and other difficulties, including potential design defects, miscalculations, testing requirements, and the diversion of management’s attention from day-to-day business operations. If we are unable to implement the ERP system upgrade as planned, the effectiveness of our internal control over financial reporting could be adversely affected, our ability to assess those controls adequately could be delayed, and our financial condition, results of operations and cash flows could be negatively impacted.

Industry Risks

Increases in costs and/or shortages of raw materials, fuels and utilities could adversely impact our profitability.

Raw materials, such as flour, sweeteners, shortening, yeast, and water, which are used in our bakery products, are subject to price fluctuations. The cost of these inputs may fluctuate widely due to foreign and domestic government policies and regulations, weather conditions, domestic and international demand and supply, armed conflict or political instability, including any escalation of hostility arising out of the conflict between Russia and the Ukraine, or other unforeseen circumstances. Any substantial change in the prices or availability of raw materials may have an adverse impact on our profitability. We enter into forward purchase agreements and other derivative financial instruments from time to time to manage the impact of such volatility in raw materials prices; however, these strategies may not be adequate to overcome increases in market prices or availability. Our failure to enter into hedging or fixed price arrangements or any decrease in the availability or increase in the cost of these agreements and instruments could increase the price of these raw materials and significantly affect our earnings.

In addition, we are dependent upon natural gas or propane for firing ovens. The independent distributors and third-party transportation companies are dependent upon gasoline and diesel for their vehicles. The cost of fuel may fluctuate widely due to economic and political conditions, government policy and regulation, war, or other unforeseen circumstances. Substantial future increases in prices for, or shortages of, these fuels could have a material adverse effect on our profitability, financial condition or results of operations. There can be no assurance that we can cover these potential cost increases through future pricing actions. Also, as a result of these pricing actions, consumers could purchase less or move from purchasing higher-margin products to lower-margin products.

Inflation may adversely affect us by increasing our costs of production, materials, and labor.  In an inflationary environment, such as the current economic environment, depending on the market conditions of the baking industry and the expected raising of interest rate by the United States Federal Reserve, we may be unable to raise the prices of our products enough to keep up with the rate of inflation, which would reduce our profit margins, and continued inflationary pressures could impact our business, financial condition, and results of operations.

Competition could adversely impact revenues and profitability.

The U.S. bakery industry is highly competitive. Our principal competitors in these categories all have substantial financial, marketing, and other resources. In most product categories, we compete not only with other widely advertised branded products, but also with store branded products that are generally sold at lower prices. Competition is based on product availability, product quality, price, effective promotions, and the ability to target changing consumer preferences. Substantial growth in e-commerce has encouraged the entry of new competitors and business models, intensifying competition by simplifying distribution and lowering barriers to entry. The expanding presence of e-commerce retailers has impacted, and may continue to impact, consumer preferences and market dynamics, which in turn may negatively affect our sales or profits. We experience price pressure from time to time due to competitors’ promotional activity and other pricing efforts. This pricing pressure is particularly strong during adverse economic periods and periods of high inflation. Increased competition could result in reduced sales, margins, profits and market share.

Product removals, damaged product or safety concerns could adversely impact our results of operations.

We may be required to recall certain of our products should they be mislabeled, contaminated, spoiled, tampered with or damaged. We may become involved in lawsuits and legal proceedings alleging that the consumption of any of our products causes or caused injury, illness or death. Any such product removal, damaged product or an adverse result in any litigation related to such a product removal or damaged product could have a material adverse effect on our operating and financial results in future periods, depending on the costs of the product removal from the market, the destruction of product inventory, diversion of management time and attention, contractual and other claims made by customers that we supply, loss of key customers, competitive reaction and consumer attitudes. Even if a product liability, consumer fraud or other claim is unsuccessful or without merit, the negative publicity surrounding such assertions regarding our products could adversely affect our reputation and brand image. We also could be adversely affected if our customers or consumers in our principal markets lose confidence in the safety and quality of our products.

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During fiscal years 2018 through 2021, we have been required, and may be required in future periods, to remove certain of our products from the market should they be mislabeled, contaminated, spoiled, tampered with or damaged, including as a result of inferior ingredients provided by any of our suppliers.

Consolidation in the retail and foodservice industries could adversely affect our sales and profitability.

We expect consolidations among our retail and foodservice customers to continue. If this trend continues and our retail and foodservice customers continue to grow larger due to consolidation in their respective industries, they may demand lower pricing and increased promotional programs. In addition, these pressures may restrict our ability to increase prices, including in response to commodity and other cost increases. Our margins and profits could decrease if a reduction in prices or increased costs are not counterbalanced with increased sales volume.

Inability to anticipate or respond to changes in consumer preferences may result in decreased demand for our products, which could have an adverse impact on our future growth and operating results.

Our success depends in part on our ability to respond to current market trends and to anticipate the tastes and dietary habits of consumers, including concerns of consumers regarding health and wellness, obesity, product attributes, ingredients, and packaging. Similarly, demand for our products could be negatively affected by consumer concerns or perceptions regarding the health effects of specific ingredients such as, but not limited to, sodium, trans fats, sugar, processed wheat, or other product ingredients or attributes. Introduction of new products and product extensions requires significant development and marketing investment. If we fail to anticipate, identify, or react to changes in consumer preferences, or if we fail to introduce new and improved products on a timely basis, we could experience reduced demand for our products, which could cause our sales, profitability, and our operating results to suffer.

Our large customers may impose requirements on us that may adversely affect our results of operations.

From time to time, our large customers may re-evaluate or refine their business practices and impose new or revised requirements on us, the distributors, and the customers’ other suppliers. The growth of large mass merchandisers, supercenters and dollar stores, together with changes in consumer shopping patterns, have produced large, sophisticated customers with increased buying power and negotiating strength. Current trends among retailers and foodservice customers include fostering high levels of competition among suppliers, demanding new products or increased promotional programs, requiring suppliers to maintain or reduce product prices, reducing shelf space for our products, and requiring product delivery with shorter lead times. These business changes may involve inventory practices, logistics, or other aspects of the customer-supplier relationship. Compliance with requirements imposed by large customers may be costly and may have an adverse effect on our margins and profitability. However, if we fail to meet a large customer’s demands, we could lose that customer’s business, which also could adversely affect our sales and results of operations.

Legal and Regulatory Risks

Government regulation could adversely impact our results of operations and financial condition.

As a producer and marketer of food items, our production processes, product quality, packaging, labeling, storage, and distribution, and the safety of food products and the health and safety of our employees, are subject to regulation by various federal, state and local government entities and agencies. In addition, the marketing and labeling of food products has come under increased scrutiny in recent years, and the food industry has been subject to an increasing number of legal proceedings and claims relating to alleged false or deceptive marketing and labeling under federal, state or local laws or regulations. Uncertainty regarding labeling standards has led to customer confusions and legal challenges.

In addition, our operations are subject to extensive and increasingly stringent regulations administered by the Environmental Protection Agency related to the discharge of materials into the environment and the handling and disposition of wastes. Failure to comply with these regulations can have serious consequences, including civil and administrative penalties and negative publicity. Changes in applicable laws or regulations or evolving interpretations thereof, including increased government regulations to limit carbon dioxide and other greenhouse gas emissions as a result of concern over climate change, may result in increased compliance costs, capital expenditures, and other financial obligations for us, which could affect our profitability or impede the production or distribution of our products, and affect our sales.

Compliance with federal, state and local laws and regulations is costly and time consuming. Failure to comply with, or violations of, applicable laws and the regulatory requirements of one or more of these entities and agencies could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions, any of which could result in

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increased operating costs and adversely affect our results of operations and financial condition. Legal proceedings or claims related to our marketing could damage our reputation and/or adversely affect our business or financial results.

Climate change, or legal, regulatory, or market measures to address climate change, may negatively affect our business and operations.

There is growing concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. In the event that such climate change has a negative effect on agricultural productivity, we may be subject to decreased availability or less favorable pricing for certain commodities that are necessary for our products, such as corn and wheat. Adverse weather conditions and natural disasters can reduce crop size and crop quality, which in turn could reduce our supplies of raw materials, lower recoveries of usable raw materials, increase the prices of our raw materials, increase our cost of transporting and storing raw materials, or disrupt our production schedules.

We may also be subjected to decreased availability or less favorable pricing for water as a result of climate change, which could impact our production and distribution operations. In addition, natural disasters and extreme weather conditions may disrupt the productivity of our facilities or the operation of our supply chain. The increasing concern over climate change also may result in more regional, federal, and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases. In the event that such regulation is enacted and is more aggressive than the sustainability measures that we are currently undertaking to monitor our emissions and improve our energy efficiency, we may experience significant increases in our costs of operation and delivery. In particular, increasing regulation of fuel emissions could substantially increase the distribution and supply chain costs associated with our products. As a result, climate change could negatively affect our business and operations.

We are subject to increasing legal complexity and could be party to litigation that may adversely affect our business.

Increasing legal complexity may continue to affect our operations and results in material ways. We are or could be subject to legal proceedings that may adversely affect our business, including class actions, administrative proceedings, government investigations, securities laws, employment and personal injury claims, disputes with current or former suppliers, claims by current or former distributors, and intellectual property claims (including claims that we infringed another party’s trademarks, copyrights, or patents). Inconsistent standards imposed by governmental authorities can adversely affect our business and increase our exposure to litigation. Litigation involving our independent distributor model and the independent contractor classification of the independent distributors, as well as litigation related to disclosure made by us in connection therewith, if determined adversely, could increase costs, negatively impact our business prospects and the business prospects of our distributors and subject us to incremental liability for their actions. We are also subject to the legal and compliance risks associated with privacy, data collection, protection and management, in particular as it relates to information we collect when we provide products to customers.

Executive Offices

The address and telephone number of our principal executive offices are 1919 Flowers Circle, Thomasville, Georgia 31757, (229) 226-9110.

Information about our Executive Officers

The following table sets forth certain information regarding the persons who currently serve as the executive officers of Flowers Foods.

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EXECUTIVE OFFICERS

Name, Age and Office	Business Experience
A.Ryals McMullian Age 52 President and Chief Executive Officer	Mr. McMullian was elected CEO in May 2019.  Previously, he served as COO from July 2018 until May 2019.  Mr. McMullian served as chief strategy officer from May 2017 to July 2018, and as vice president of mergers and acquisitions and deputy general counsel from 2015 until 2017. Mr. McMullian served as vice president and associate general counsel from 2011 until 2015 and as associate general counsel from 2003, when he joined the company, until 2011.
R. Steve Kinsey Age 61 Chief Financial Officer and Chief Accounting Officer	Mr. Kinsey was named chief financial officer (“CFO”) and chief accounting officer (“CAO”) in April 2020.  Previously, he served as executive vice president and CFO and chief administrative officer from May 2017 to April 2020. Mr. Kinsey served as executive vice president and CFO from 2008 until 2017, and as senior vice president and CFO from 2007 to 2008. Prior to those appointments, Mr. Kinsey served in various accounting roles since joining the company in 1989.
Bradley K. Alexander Age 63 Chief Operating Officer	Mr. Alexander was named COO in May 2019.  Previously, he served as president of the Fresh Packaged Bread Business Unit from May 2017 to May 2019, as executive vice president and COO of Flowers Foods from July 2014 to May 2017, and as president of Flowers Bakeries from July 2008 to July 2014. Mr. Alexander joined the company in 1981.
Robert L. Benton, Jr. Age 64      Executive Vice President of      Network Optimization	Mr. Benton was named executive vice president of network optimization in November 2019. He previously served as chief supply chain officer from May 2017 until November 2019.  Mr. Benton served as senior vice president and chief manufacturing officer from January 2015 to May 2017 and as senior vice president of manufacturing and operations support from March 2011 until January 2015.  Prior to that, he held various manufacturing positions since joining the company in 1980.
Mark Chaffin Age 51 Chief Information Officer	Mr. Chaffin was named chief information officer (“CIO”) in February 2020 after serving four months in an interim capacity. Prior to joining Flowers, Mr. Chaffin was a partner in the Southeast practice of Fortium Partners, a provider of technology leadership services, from 2019 until joining Flowers. He also served as CIO at sgsco, a global package and brand design and marketing company, from 2015 to 2019 and as CIO for Acosta Sales and Marketing from 2007 to 2015.
H. Mark Courtney Age 61 Chief Brand Officer	Mr. Courtney was named chief brand officer in July 2020.  He previously served as president of the Fresh Packaged Bread Business Unit from May 2019 to July 2020, senior vice president of retail accounts from May 2017 to May 2019, and senior vice president of sales from June 2008 to May 2017.  Prior to that, Mr. Courtney served in various sales positions since joining the company in 1983.
Debo Mukherjee Age 54 Chief Marketing Officer	Mr. Mukherjee joined Flowers as chief marketing officer in October 2017. Before joining Flowers, Mr. Mukherjee was founder and owner of Intacta Consulting Group, LLC, a marketing consulting firm, from 2015 to 2019. Prior to that, he served as CEO of Redco Foods, Inc. from 2011 to 2015. He also held marketing roles at Mars Inc., Unilever, H.J. Heinz Co. and The Hershey Company.
David M. Roach Age 52 President, Cake Operations	Mr. Roach was named president of cake operations in July 2020. He previously served as president of the Snacking/Specialty Business Unit from May 2017 to July 2020 and as senior vice president of organics from September 2015 until May 2017. Mr. Roach served in various sales and management positions since joining the company in 1992.
Tonja Taylor Age 62 Chief Human Resources Officer	Ms. Taylor was named chief human resources officer in May 2017. She served as senior vice president of human resources from September 2013 until May 2017 and as vice president of human resources from June 2008 until September 2013. Prior to these appointments, Ms. Taylor held various human resources positions since joining the company in 1999.
Stephanie B. Tillman Age 51 Chief Legal Counsel	Ms. Tillman was named chief legal counsel effective January 2020. Previously, she served as vice president, chief compliance officer, and deputy general counsel from April 2011 to January 2020. Prior to that, Ms. Tillman served in various roles in the legal department since joining the company in 1995.
Heeth Varnedoe IV Age 55      Chief Transformation Officer	Mr. Varnedoe was named chief transformation officer in December 2020. Previously, he served as senior vice president of DSD Regions/Sales from 2017 until 2020, as president of Flowers’ Phoenix, Arizona bakery from 2016 to 2017, as vice president of national accounts from 2013 to 2016, and as director of DSD cake sales in 2012. Mr. Varnedoe joined Flowers in 1990 and held a number of positions before leaving the company in 2000 to pursue other business interests.  He rejoined Flowers in 2012.

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Name, Age and Office	Business Experience
D. Keith Wheeler Age 58 Chief Sales Officer	Mr. Wheeler was named chief sales officer in May 2017. Previously, he served as president of Flowers Bakeries from July 2014 until May 2017. Prior to that, Mr. Wheeler served in various leadership roles, including regional senior vice president, regional controller, and bakery president. He joined the company in 1988.

Item 1B. Unresolved Staff Comments.

None

Item 2. Properties

The company currently operates 46 bakeries, of which 44 are owned and two are leased. We believe our properties are in good condition, well maintained, and sufficient for our present operations. Our production plant locations are:

State	City	State	City
Alabama	Birmingham	Kentucky	London
Alabama	Montgomery	Louisiana	Baton Rouge
Alabama	Tuscaloosa	Louisiana	Lafayette
Arizona	Mesa	Louisiana	New Orleans
Arizona	Phoenix	Maine	Lewiston (2 locations)
Arizona	Tolleson	Nevada	Henderson
Arkansas	Batesville	North Carolina	Goldsboro
Arkansas	Texarkana	North Carolina	Jamestown
California	Modesto (Leased)	North Carolina	Newton
Colorado	Johnstown	Oregon	Milwaukie
Florida	Bradenton	Pennsylvania	Oxford
Florida	Jacksonville	Pennsylvania	Philadelphia (Leased)
Florida	Lakeland	Tennessee	Cleveland
Florida	Miami	Tennessee	Crossville
Georgia	Atlanta	Tennessee	Knoxville
Georgia	Savannah	Texas	Denton
Georgia	Suwanee	Texas	El Paso
Georgia	Thomasville	Texas	Houston (2 locations)
Georgia	Tucker	Texas	San Antonio
Georgia	Villa Rica	Texas	Tyler
Kansas	Lenexa	Virginia	Lynchburg
Kentucky	Bardstown	Virginia	Norfolk

In Thomasville, Georgia, the company leases properties that house shared services functions and our IT group and owns several properties for our corporate offices.  The company also houses an additional shared services center at its Phoenix, Arizona bakery.  

Item 3. Legal Proceedings

For a description of all material pending legal proceedings, See Note 22, Commitments and Contingencies, of Notes to Consolidated Financial Statements of this Form 10-K.

Item 4. Mine Safety Disclosures

Not Applicable

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PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Shares of the company’s common stock are quoted on the New York Stock Exchange (the “NYSE”) under the symbol “FLO.” 

Holders

As of February 17, 2022, there were approximately 3,307 holders of record of the company’s common stock.

Dividends

The payment of dividends is subject to the discretion of the company’s Board. The Board bases its decisions regarding dividends on, among other things, general business conditions, our financial results, contractual, legal and regulatory restrictions regarding dividend payments and any other factors the Board may consider relevant.

Purchases of Equity Securities by the Issuer

The company did not purchase any shares of its common stock during the fourth quarter of Fiscal 2021.

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Stock Performance Graph

The chart below is a comparison of the cumulative total return (assuming the reinvestment of all dividends paid) of our common stock, Standard & Poor’s 500 Index, Standard & Poor’s 500 Packaged Foods and Meats Index, and Standard & Poor’s MidCap 400 Index for the period December 31, 2016 through January 1, 2022 the last day of our 2021 fiscal year.

	December 31, 2016		December 30, 2017		December 29, 2018		December 28, 2019		January 2, 2021		January 1, 2022
FLOWERS FOODS INC		100.00		100.22		98.33		120.94		130.29		163.68
S&P 500 INDEX		100.00		121.83		115.49		153.58		181.35		233.41
S&P 500 PACKAGED FOODS &    MEATS INDEX		100.00		101.35		82.14		107.52		112.54		127.26
S&P MIDCAP 400 INDEX		100.00		116.24		102.31		130.36		148.26		184.97

Companies in the S&P 500 Index, the S&P 500 Packaged Foods and Meats Index, and the S&P MidCap 400 Index are weighted by market capitalization and indexed to $100 at December 31, 2016. Flowers Foods’ share price is also indexed to $100 at December 31, 2016.

Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Item 1., Business, and the Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements included in this Form 10-K. The following information contains forward-looking statements which involve certain risks and uncertainties. See Forward-Looking Statements at the beginning of this Form 10-K.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is segregated into four sections, including:

• Executive overview — provides a summary of our operating performance and cash flows, industry trends, and our strategic initiatives.

• Critical accounting estimates — describes the accounting areas where management makes critical estimates to report our financial condition and results of operations.

• Results of operations — an analysis of the company’s consolidated results of operations for Fiscal 2021 compared to Fiscal 2020 as presented in the Consolidated Financial Statements. Refer to the Annual Report on Form 10-K for the fiscal year ended January 2, 2021 for a discussion of the results of operations for Fiscal 2020 compared to Fiscal 2019.

• Liquidity, capital resources and financial position — an analysis of cash flow, contractual obligations, and certain other matters affecting the company’s financial position.

MATTERS AFFECTING COMPARABILITY

Detailed below are expense (recovery) items affecting comparability that will provide additional context while reading this discussion:

	Fiscal 2021			Fiscal 2020			Footnote
	52 weeks			53 weeks			Disclosure
	(Amounts in thousands)
Business process improvement consulting costs	$	31,293		$	—		Note 2
Project Centennial consulting costs		—			15,548		Note 5
ERP Road Mapping consulting costs		—			4,363		Note 2
Restructuring and related impairment charges		—			35,483		Note 5
Loss on inferior ingredients		944			107		Note 4
Non-restructuring lease termination gain		(2,644	)		(4,066	)	Note 13, 2
Pension plan settlement and curtailment loss		403			108,757		Note 20
Acquisition consideration adjustment		3,400			—		Note 12
Legal settlements and related costs		23,089			7,250		Note 22
Loss on extinguishment of debt		16,149			—		Note 14
Other pension plan termination costs		—			133
Multi-employer pension plan withdrawal costs		3,300			—		Note 20
	$	75,934		$	167,575

Business process improvement consulting costs related to the transformation strategy initiatives.  In the second half of Fiscal 2020, we launched initiatives to transform how we operate our business, which includes upgrading our information system to a more robust platform, as well as investments in e-commerce, autonomous planning, and our “bakery of the future” initiative.  These transformation strategy initiatives are further discussed in Item 1., Business, of this Form 10-K.  In Fiscal 2022, we currently expect costs for the upgrade of our ERP system (a portion of which may be expensed as incurred, capitalized, recognized as a cloud computing arrangement, or recognized as a prepaid service contract) to be approximately $85 million to $95 million. Costs related to our digital strategy initiatives are anticipated in Fiscal 2022, but these amounts cannot currently be estimated. The expensed portion of the consulting costs related to both the ERP upgrade and digital strategy initiatives incurred in Fiscal 2021 was $31.3 million and is reflected in the selling, distribution, and administrative expenses line item of the Consolidated Statements of Income. Initial road mapping costs for these initiatives were incurred in Fiscal 2020 and are included in the “ERP Road Mapping consulting costs” in the table above.  

Project Centennial consulting costs.  During the second quarter of Fiscal 2016, we launched Project Centennial, an enterprise-wide business and operational review.  Key initiatives of the project were to enhance revenue growth, improve efficiencies, streamline operations, and make investments to strengthen our competitive position and improve margins over the long-term.   The project was completed at the end of Fiscal 2020.  Consulting costs associated with the project in Fiscal 2020 were $15.5 million and primarily related to further refining our organizational structure, portfolio and supply chain optimization initiatives, and improving our cake

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operations. These consulting costs are reflected in the selling, distribution and administrative expenses line item of the Consolidated Statements of Income.  

Consulting costs for planning the upgrade of our ERP platform and the broader digital strategy initiative.  As discussed above and in Item 1., Business, of this Form 10-K, we began planning for the upgrade of our ERP platform and other system related enhancements (the “ERP road mapping”) during the third quarter of Fiscal 2020.  We incurred consulting costs associated with these activities of $4.4 million and these costs are reflected in the selling, distribution and administrative expenses line item of the Consolidated Statements of Income. We completed the initial road mapping activities in the fourth quarter of Fiscal 2020 and transitioned to the design phase of the project.  

Restructuring and related impairment charges associated with Project Centennial.  The following table details charges recorded in Fiscal 2020 (amounts in thousands):

	Fiscal 2020
Employee termination benefits and other cash charges	$	7,779
Property, plant, equipment and spare parts impairments		7,110
Lease termination and lease impairment charges		13,474
Brand rationalization impairments		7,120
	$	35,483

In Fiscal 2020, the company reevaluated its organizational structure in an effort to increase its focus on brand growth and product innovation and to improve underperforming bakeries.  The organizational structure changes resulted in employee termination benefits charges in Fiscal 2020 related to a voluntary employee separation plan (the “VSIP”) of $2.6 million and an involuntary reduction-in-force plan of $5.3 million. The VSIP and reduction-in-force plans together eliminated approximately 250 positions across different departments and job levels and all remaining payments related to the plans were paid in early Fiscal 2021.  

During Fiscal 2020, the company sold three closed bakeries that were included in assets held for sale and certain idle equipment at other bakeries, resulting in the recognition of $5.7 million of impairment charges.  Additionally, the company recognized property, plant, and equipment impairment charges of $0.6 million for manufacturing line and distribution depot closures and an office building the company decided to sell, and $0.7 million for spare parts related to equipment the company no longer intended to use.    

In order to optimize our distribution network, we vacated certain distribution depots during the third quarter of Fiscal 2020, some of which are owned and others that are leased.  These actions resulted in the recognition of lease termination charges and lease impairment charges totaling $13.5 million.    

Additionally, in order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley brand, a finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of Fiscal 2020.  The company decided to cease using one of its regional brands and recognized a $1.3 million impairment charge in the fourth quarter of Fiscal 2020.  Ingredient and packaging impairments of $1.2 million were also recognized as a result of brand rationalization initiatives.         

Loss on inferior ingredients. In the fourth quarter of Fiscal 2021, the company issued a voluntary recall on certain Tastykake multi-pack cupcakes sold in eight states and certain Tastykake Krimpets distributed to retail customers throughout the U.S. due to the potential presence of tiny fragments of metal mesh wire.  The recall was initiated following notification by a vendor of the possible contamination in a supplied ingredient.  The company incurred costs of $1.8 million related to the recall in Fiscal 2021 and these costs are recorded in our Consolidated Statements of Income.  The company is seeking recovery of these losses.

In Fiscal 2020, we incurred costs of $1.0 million related to receiving inferior ingredients used in the production of certain of our gluten-free products.  In the first quarter of Fiscal 2021, we incurred an additional $0.1 million of costs related to the inferior gluten-free ingredients and in the third quarter of Fiscal 2021, we received reimbursements of approximately $1.0 million for these previously incurred costs.  These costs and reimbursements are recorded in the loss on inferior ingredients line item of the Consolidated Statements of Income.

In Fiscal 2020, in addition to the costs related to inferior gluten-free ingredients, we recognized an adjustment of $0.2 million related to previously recorded inferior yeast costs and received a $1.2 million reimbursement for the direct costs associated with receiving inferior yeast in a prior year. These direct costs and reimbursements of direct costs are included in our Consolidated Income Statements.  We also received a reimbursement of $3.9 million for indirect losses associated with receiving inferior yeast in a prior

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year and this amount is included in the selling, distribution, and administrative expenses line item of the Consolidated Statements of Income.

Non-restructuring lease termination gain.  In Fiscal 2021, the company purchased twenty-seven warehouses that were included in the company’s operating leased assets.  Two of the purchased properties were fully impaired in Fiscal 2020, resulting in the recognition of a $2.6 million gain upon completion of the purchase of these assets and this amount is included in the selling, distribution, and administrative expenses line item of the Consolidated Statements of Income.

In Fiscal 2020, due to a change in the contractual terms with a transportation entity that transports a significant portion of our fresh bakery products to allow for substitution of assets, among other changes to the terms, a reassessment of the embedded lease accounting treatment was triggered.  Based our analysis, we determined the contracts associated with the transportation entity no longer qualify for embedded lease treatment and, in unwinding these leases, the company recognized a noncash gain of $4.1 million in the selling, distribution and administrative expenses line item of the Consolidated Statements of Income.  

Pension plan settlement and curtailment loss.  In the company-sponsored defined benefit pension plan for union employees (“Plan No. 2”), retired and terminated vested pension plan participants not yet receiving their benefit payments have the option to elect to receive their benefit as a single lump sum payment.  In the fourth quarter of Fiscal 2021, a settlement charge of $0.4 million was triggered as a result of lump sum distributions paid in Fiscal 2021.

On September 28, 2018, the Board approved a resolution to terminate the Flowers Foods, Inc. Retirement Plan No. 1 (“Plan No. 1”), effective December 31, 2018.  In the first quarter of Fiscal 2020, the company distributed a portion of the pension plan assets to participants as lump sum payments and transferred the remaining obligations and assets to an insurance company in the form of a nonparticipating group annuity contract.  No cash contributions were required in Fiscal 2020 to support this transaction.  In Fiscal 2020, the company recognized $108.8 million of non-cash pension termination charges, comprised of a settlement charge of $104.5 million and a curtailment loss of $4.3 million, and an additional $0.1 million of cash charges for other pension termination charges in our Consolidated Statements of Income.

Acquisition consideration adjustment.  In connection with an acquisition completed in Fiscal 2012, the company agreed to make the selling shareholders whole for certain taxes incurred by the stakeholders on the sale.  There was recently a tax determination that the selling shareholders owed additional taxes.  Unless there is a successful appeal which overturns the determination, the company estimates that it will owe the shareholders approximately $3.4 million, and the Company has recorded this cost in the selling, distribution, and administrative expenses line item of the Consolidated Statements of Income in Fiscal 2021.

Legal settlements and related costs.  In Fiscal 2021, we reached an agreement to settle certain distributor-related litigation for a settlement payment, inclusive of plaintiffs’ attorney fees, of $16.5 million.  The settlement also requires a phased repurchase of approximately 75 distribution rights and the company estimates this cost to be approximately $6.6 million.  The terms of the settlement require court approval.  In Fiscal 2020, we reached agreements to settle distributor-related litigation in the aggregate amount of $7.3 million, including plaintiffs’ attorney fees and the company’s FICA obligations.  All amounts related to legal settlements and related costs are recorded in the selling, distribution and administrative expenses line item of the Consolidated Statements of Income.  At January 1, 2022, $23.1 million of settlements were accrued (inclusive of obligations for repurchase of distribution rights).

Loss on extinguishment of debt. On April 8, 2021, we completed the early redemption of the Company’s $400.0 million of 4.375% senior notes due 2022 (the “2022 notes”) with proceeds received from the issuance of the Company’s $500.0 million of 2.400% senior notes due 2031 (the “2031 notes”) on March 9, 2021.  We recognized a loss on extinguishment of debt of $16.1 million comprised of a make-whole cash payment of $15.4 million and the write-off of unamortized debt discount and debt issuance costs totaling $0.7 million.

Multi-employer pension plan withdrawal costs.  On September 22, 2021, the union participants of the Retail, Wholesale and Department Store Union Fund (the “Fund”) at our Birmingham, Alabama plant voted to withdraw from the Fund in the most recent collective bargaining agreement.  The withdrawal was effective, and the union participants became eligible to participate in the Flowers Foods, Inc. 401(k) Retirement Savings Plan, on December 1, 2021.  This resulted in the recognition of a pension plan withdrawal liability of $3.3 million (including transition payments) in our Consolidated Statements of Income.  The transition payments were paid in December 2021 and the withdrawal liability is anticipated to be paid in the first half of Fiscal 2022.  While this is our best estimate of the ultimate cost of the withdrawal from this Fund, additional withdrawal liability may be incurred based on the final Fund assessment or in the event of a mass withdrawal as defined by statute, occurring any time within the next three years following our complete withdrawal.

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Additional Items Impacting Comparability

Reporting Periods.    The company operates on a 52-53 week fiscal year ending the Saturday nearest December 31. Fiscal 2021 consisted of 52 weeks and Fiscal 2020 consisted of 53 weeks.  Fiscal 2022 will consist of 52 weeks.  

COVID-19.  On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide, which led to adverse impacts on the U.S. and global economies. Due to the drastic change in consumer buying patterns as a result of the COVID-19 pandemic, we experienced a favorable shift in sales mix to our branded retail products as consumers increased at-home consumption of food products resulting in significant growth in income from operations in Fiscal 2021 and 2020 as compared to Fiscal 2019.  As shutdowns and capacity restrictions imposed at the onset of the pandemic have eased, our sales volumes have declined in Fiscal 2021 as compared to the prior year, which included the peak period of demand for our branded retail products and an additional week.  Improved price/mix in Fiscal 2021 resulting from favorable pricing we have implemented and the continued favorable shift in mix from store branded retail to branded retail sales partially offset the volume declines.  For additional details on the impact of the COVID-19 pandemic to our business operations and results of operations, see the “Executive Overview – Impact of COVID-19 on Our Business,” “Results of Operations” and “Liquidity and Capital Resources” sections below.

Conversion of our Lynchburg, Virginia bakery to organic production. During Fiscal 2020, we converted our Lynchburg, Virginia bakery to an all-organic production facility.  The converted facility has increased production capacity for our DKB products, allowing the company to better serve east coast markets with fresher product and reduce distribution costs.  We incurred start-up costs related to the conversion of approximately $5.1 million in Fiscal 2020 and these costs are included in materials, supplies, labor and other production costs in our Consolidated Statements of Income.  The bakery resumed production at the end of the third quarter of Fiscal 2020.

EXECUTIVE OVERVIEW

We are the second-largest producer and marketer of packaged bakery foods in the U.S. with Fiscal 2021 sales of $4.3 billion.  We operate in the highly competitive fresh bakery market.  Our product offerings include a wide range of fresh breads, buns, rolls, snack cakes and tortillas, as well as frozen breads and rolls, which we produce at 46 plants in 18 states. Our products are sold under leading brands such as Nature’s Own, Dave’s Killer Bread, Canyon Bakehouse, Tastykake, Mrs. Freshley’s, and Wonder.  See Item 1., Business, of this Form 10-K for additional information regarding our customers and brands, business strategies, strengths and core competencies, and competition and risks.  

Impact of COVID-19 on Our Business:

The COVID-19 pandemic has significantly impacted our business operations and results of operations during Fiscal 2021 and 2020, as further described under “Results of Operations” and “Liquidity and Capital Resources” below.  The resulting dramatic changes in consumer buying patterns has led to a significant rise in demand for our branded retail products due to increases in at-home dining.  Sales through our non-retail category, which includes foodservice, restaurant, institutional, vending, thrift stores, and contract manufacturing, declined substantially at the onset of the pandemic in March of Fiscal 2020, but as the pandemic has progressed and mandatory shutdowns and restaurant closures across the U.S. have eased, our non-retail sales have been recovering. Fiscal 2021 sales declined 1.3% mostly due to the additional week in the prior year which negatively impacted Fiscal 2021 sales 1.7%.  Although the prior year benefitted from the significant rise in demand for our branded retail products at the beginning of the COVID-19 pandemic, as well as positive shifts in mix throughout the year and the additional week, Fiscal 2021 benefitted from favorable pricing, a continued positive shift in mix from store branded retail to branded retail products, and a partial recovery in non-retail sales. Fiscal 2021 sales remained elevated compared to pre-pandemic levels as we continued to benefit from the positive mix shift to branded retail products during the ongoing pandemic and favorable pricing, partially offset by volume declines.  

In recognition and support of our frontline workers, in Fiscal 2021 and 2020, we paid $5.2 million and $12.3 million, respectively, in appreciation bonuses to eligible hourly and non-exempt employees, leased labor, and contract workers.  These appreciation bonuses are in addition to the company’s annual performance-based cash incentive plan, in which all Flowers employees participate. Although our branded retail sales volumes have moderated as the pandemic has continued, we cannot currently estimate when or if they will return to pre-pandemic levels.

On April 14, 2020, we temporarily ceased production at our Tucker, Georgia bakery and on July 9, 2020, we temporarily ceased production at our Savannah, Georgia bakery.  Both closures were due to an increase in the number of confirmed COVID-19 cases at these bakeries and the related increase in number of workers self-quarantining.  Production resumed at the Tucker bakery on April 27, 2020 and at the Savannah Bakery on July 17, 2020.  Although our other bakeries were able to assist with meeting production needs in these instances, the potential closure of several of our bakeries across the country at the same time – or in close succession – could negatively affect our ability to meet our production requirements, even if the interruption is temporary.  While we have had no

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temporary production interruptions in Fiscal 2021 due to COVID-19, such interruptions are possible due to the uncertainty of the pandemic.  Additionally, unforeseen disruptions in other areas of our operations, including but not limited to procurement of raw materials, transport of our products, or recovery by our foodservice customers, could negatively impact our operations, results of operations, cash flows, and liquidity.

We believe we have sufficient liquidity to satisfy our cash needs and we continue to take steps to preserve adequate liquidity during the ongoing pandemic as further discussed in the “Liquidity and Capital Resources” section below.  As discussed further in Item 1., Business, of this Form 10-K, we are continuing to move forward with the upgrade of our ERP system and other transformation strategy initiatives and do not anticipate the pandemic to materially alter the timing of these initiatives.

We continue to monitor the impact of the ongoing COVID-19 pandemic on our business operations, results of operations, and liquidity. Our operations may continue to experience disruption due to the continued uncertainty caused by the pandemic, including but not limited to additional variants of the COVID-19 virus, new geographic hotspots, changes in the number of COVID-19 cases, the rate of vaccination within the U.S. population and the efficacy of the vaccines, changes in the global and U.S. economic environment, and changes in pandemic safety policies.  Additionally, if there is a significant shift in mix from branded retail to store branded retail products, we expect that our results of operations, including our net sales, earnings, and cash flows, could be negatively impacted.  

Our main focus throughout the pandemic has been and continues to be the health and safety of our team members and independent distributor partners. From the start of the pandemic, we have followed the guidance of the U.S. Centers for Disease Control and Prevention (CDC), taking a number of recommended steps to safeguard those in our facilities. These steps included, but are not limited to, monitoring the symptoms of everyone entering our facilities, requiring face coverings, maintaining (where possible) social distancing of six feet, conducting enhanced cleaning and sanitizing of common areas and frequently touched surfaces, performing decontamination of work areas and equipment when there is a confirmed or presumptive case of COVID-19 at a facility, and contact tracing. Company-wide bans on non-essential travel and non-essential visitors at all locations were put into place, corporate offices were closed, and office staff were directed to work remotely. In addition, the company issued regular communications about COVID-19 prevention steps. When COVID-19 vaccinations became available, we shared educational information with our team members and encouraged vaccination for those eligible.  

We have followed the guidance issued by the CDC and the U.S. Occupational Safety and Health Administration (OSHA) and modified our face mask and wellness screening policies to align with local, state, and workplace safety regulations. We remain vigilant in reporting COVID-19 cases in our facilities and continue to evaluate our pandemic safety measures as the pandemic evolves. The majority of employees in non-production roles continue to work remotely. We intend to implement a work policy in 2022 addressing guidelines for three distinct work personas: full-time remote, full-time in office, or flex, a combination of the two. These plans may be impacted by, among other things, consideration of pandemic safety measures, the rate of vaccinations and the efficacy of the vaccines, the threat of additional COVID-19 variants, and the ability of office staff to work effectively from remote locations. Although the impact of these measures, or any other measures adopted by governmental authorities, on our business and workforce is uncertain, these requirements may result in increased costs and could have an adverse effect on our business, results of operations, and financial condition.

During Fiscal 2021, we experienced labor shortages at some of our bakeries. A number of factors may continue to adversely affect the labor force available to us, including high employment and government regulations. In addition, there also are factors that may negatively affect our ability to efficiently operate our production lines or run at full capacity. These might include, but are not limited to, a labor shortage or increased turnover rates within our workforce that could lead to increased labor costs, including additional overtime to meet demand and higher wage rates to attract and retain workers. An overall labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on the company’s operations, results of operations, liquidity, or cash flows.

Summary of Operating Results, Cash Flows and Financial Condition:

Sales decreased 1.3% in Fiscal 2021 compared to Fiscal 2020 mostly due to the additional week in the prior year.  Although the prior year benefitted from the significant rise in demand for our branded retail products at the beginning of the COVID-19 pandemic and the additional week, Fiscal 2021 benefitted from positive pricing and a continued positive shift in mix from store branded retail to branded retail products and a partial recovery in non-retail sales.  

Income from operations for Fiscal 2021 was $294.9 million compared to $321.5 million in the prior year.  The decrease resulted from sales declines, input cost inflation, higher consulting costs and legal settlements, and greater investments in marketing in the current year, partially offset by prior year restructuring and related impairment charges, and higher short-term incentive compensation paid for appreciation bonuses and workforce-related performance-based cash incentive plans in the prior year.  

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Net income was $206.2 million for Fiscal 2021, an increase of 35.4% as compared to the prior year.  The improvement in the current year resulted primarily from the $108.8 million non-cash pension plan settlement and curtailment loss ($81.6 million net of tax) in the prior year in connection with the termination of Plan No. 1, partially offset by the $16.1 million loss on extinguishment of debt ($12.1 million net of tax) recognized in the current year and decreased income from operations year over year.

In Fiscal 2021, we generated net cash flows from operations of $344.6 million, invested $136.0 million in capital expenditures, and purchased a portfolio of leased warehouses for $64.7 million.  Additionally, we paid $175.9 million in dividends to our shareholders and decreased our total indebtedness by $81.9 million.  On March 9, 2021, we issued the 2031 notes and used the net proceeds from the offering to complete the early redemption of our outstanding 2022 notes and for other debt repayments. Throughout Fiscal 2021, we continued to maintain higher levels of cash on hand compared to pre-pandemic levels in order to ensure future liquidity, although we do not have any presently anticipated need for this additional liquidity. Our cash and cash equivalents balance as of January 1, 2022 was $185.9 million.  In Fiscal 2021, we amended senior unsecured revolving credit facility (the “credit facility”) and our accounts receivable securitization facility (the “AR facility”) to, among other things, extend the maturity dates to July 30, 2026 and September 27, 2023, respectively.

In Fiscal 2020, we generated net cash flows from operations of $454.5 million and invested $97.9 million in capital expenditures.  We increased our total indebtedness by $92.5 million and paid $167.3 million in dividends to our shareholders in Fiscal 2020.  During the first quarter of Fiscal 2020, we borrowed an additional amount under the credit facility in order to ensure future liquidity in response to the uncertainty caused by the pandemic and cash and cash equivalents at January 2, 2021 were $307.5 million.

Critical Accounting Estimates

The company’s discussion and analysis of its results of operations and financial condition are based upon the Consolidated Financial Statements of the company, which have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of these financial statements requires the company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of the revenues, expenses, and cash flows during the reporting period. On an ongoing basis, the company evaluates its estimates, including those related to customer programs and incentives, bad debts, raw materials, inventories, long-lived assets, leased assets, intangible assets, income taxes, restructuring, pensions and other post-retirement benefits, and contingencies and litigation. The company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The selection and disclosure of the company’s critical accounting estimates have been discussed with the company’s audit committee. Note 2, Summary of Significant Accounting Policies, of Notes to Consolidated Financial Statements of this Form 10-K includes a summary of the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements.  The following table lists, in no particular order of importance, areas of critical assumptions and estimates used in the preparation of the Consolidated Financial Statements.  Additional detail can be found in the following notes:  

Critical Accounting Estimate	Note
Revenue recognition		—
Derivative financial instruments		10
Long-lived assets		—
Goodwill and other intangible assets		9
Leases		13
Self-insurance reserves		22
Income tax expense and accruals		21
Postretirement plans		20
Stock-based compensation		18
Commitments and contingencies		22

Revenue Recognition.    Revenue is recognized when obligations under the terms of a contract with our customers are satisfied. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.  The company records both direct and estimated reductions to gross revenue for customer programs and incentive offerings at the time the incentive is offered or at the time of revenue recognition for the underlying transaction that results in progress by the customer towards earning the incentive. These allowances include price promotion discounts, coupons, customer rebates, cooperative advertising, and product returns. Consideration payable to a customer is recognized at the time control transfers and is a reduction to revenue.   The recognition of costs for promotion programs involves the use of judgment related to performance and redemption

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estimates. Estimates are made based on historical experience and other factors. Price promotion discount expense is recorded as a reduction to gross sales when the discounted product is sold to the customer.

Derivative Financial Instruments.    The company’s cost of primary raw materials is highly correlated to certain commodities markets. Raw materials, such as our baking ingredients, experience price fluctuations. If actual market conditions become significantly different than those anticipated, raw material prices could increase significantly, adversely affecting our results of operations. We enter into forward purchase agreements and other derivative financial instruments qualifying for hedge accounting to manage the impact of volatility in raw material prices. The company measures the fair value of its derivative portfolio using fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal market for that asset or liability. When quoted market prices for identical assets or liabilities are not available, the company bases fair value on internally developed models that use current market observable inputs, such as exchange-quoted futures prices and yield curves. Refer to Item 7A., Quantitative and Qualitative Disclosures About Market Risk, of this Form 10-K for additional information about our derivative financial instruments, including a sensitivity analysis of the company’s potential exposure to commodity price risk.

Valuation of Long-Lived Assets, Goodwill and Other Intangible Assets.    The company records an impairment charge to property, plant and equipment, goodwill and intangible assets in accordance with applicable accounting standards when, based on certain indicators of impairment, it believes such assets have experienced a decline in value that is other than temporary. Future adverse changes in market conditions or poor operating results of these underlying assets could result in losses or an inability to recover the carrying value of the asset that may not be reflected in the asset’s current carrying value, thereby possibly requiring impairment charges in the future. Impairment charges recorded in Fiscal 2020 are discussed above in the “Matters Affecting Comparability” section.

Flowers has concluded it has one operating segment based on the nature of products that Flowers sells, an intertwined production and distribution model, the internal management structure and information that is regularly reviewed by the CEO, who is the chief operating decision maker, for the purpose of assessing performance and allocating resources. The company also determined we have one reporting unit.  

The company evaluates the recoverability of the carrying value of its goodwill on an annual basis or at a time when events occur that indicate the carrying value of the goodwill may be impaired. We have elected not to perform the qualitative approach, but instead perform a quantitative analysis by comparing the fair value of the reporting unit with which the goodwill is associated to the carrying amount of the reporting unit.  If the fair value is less than the carrying value, the goodwill is written down to the extent the carrying amount exceeds the fair value.

Our annual evaluation of goodwill impairment requires management judgment and the use of estimates and assumptions to determine the fair value of our reporting unit. Fair value is estimated using standard valuation methodologies incorporating market participant considerations and management’s assumptions on revenue, revenue growth rates, operating margins, discount rates, and EBITDA (defined as earnings before interest, taxes, depreciation and amortization). Our estimates can significantly affect the outcome of the test. We perform the fair value assessment using the income and market approach. Changes in our forecasted operating results and other assumptions could materially affect these estimates. This test is performed in the fourth quarter of each fiscal year unless circumstances require this analysis to be completed sooner. The income approach is tested using a sensitivity analysis to changes in the discount rate and yield a sufficient buffer to significant variances in our estimates.  The estimated fair value of our reporting unit exceeded its carrying value in excess of $4.0 billion in Fiscal 2021. A 1% decrease in the discount rate would increase the fair value of the reporting unit by $1.1 billion and a 1% increase in the discount rate would decrease the fair value by $0.8 billion. Based on management’s evaluation, no impairment charges relating to goodwill were recorded for Fiscal 2021 or 2020.

In connection with acquisitions, the company has acquired trademarks, customer lists, and non-compete agreements, a portion of which are amortizable. The company evaluates these assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The undiscounted future cash flows of each intangible asset are compared to the carrying amount, and if less than the carrying value, the intangible asset is written down to the extent the carrying amount exceeds the fair value. The fair value is computed using the same approach described above for goodwill and includes the same risks and estimates. The fair value of the trademarks could be less than our carrying value if any of our four material assumptions in our fair value analysis: (a) weighted average cost of capital; (b) long-term sales growth rates; (c) forecasted operating margins; and (d) market multiples do not meet our expectations, thereby requiring us to record an asset impairment. We use the multi-period excess earnings and relief from royalty methods to value these intangibles. The method used for impairment testing purposes is consistent with the valuation method employed at acquisition of the intangible asset.  No impairment charges related to amortizing intangible assets were recorded in Fiscal 2021.  Impairment charges recorded in Fiscal 2020 related to amortizable intangible assets totaled $5.9 million and are discussed above in the “Matters Affecting Comparability” section.  

As of January 1, 2022, the company also owns a trademark acquired through an acquisition with a carrying value of $127.1 million that is an indefinite-lived intangible asset not subject to amortization. The company evaluates the recoverability of intangible assets not subject to amortization by comparing the fair value to the carrying value on an annual basis or at a time when events occur that indicate the carrying value may be impaired. In addition, the assets are evaluated to determine whether events and circumstances continue to support an indefinite life. The fair value is compared to the carrying value of the intangible asset, and if less than the carrying value, the intangible asset is written down to fair value. There are certain inherent risks included in our expectations about the

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performance of acquired trademarks and brands. If we are unable to implement our growth strategies for these acquired intangible assets as expected, it could adversely impact the carrying value of the brands. The fair value of the trademarks could be less than our carrying value if any of our four material assumptions in our fair value analysis: (a) weighted average cost of capital; (b) long-term sales growth rates; (c) forecasted operating margins; and (d) market multiples do not meet our expectations, thereby requiring us to record an asset impairment.  

Leases.    The company’s leases consist of the following types of assets: two bakeries, corporate office space, warehouses, bakery equipment, transportation, and IT equipment. The company uses the applicable incremental borrowing rate at lease commencement to perform the lease classification tests on lease components and to measure the lease liabilities and right-of-use assets in situations when discount rates implicit in leases cannot be readily determined.

Self-Insurance Reserves.    We are self-insured for various levels of general liability, auto liability, workers’ compensation, and employee medical and dental coverage. Insurance reserves are calculated on a combination of an undiscounted basis based on actual claims data and estimates of incurred but not reported claims developed utilizing historical claims trends.  Projected settlements of incurred but not reported claims are estimated based on pending claims, historical trends, industry trends related to expected losses and actual reported losses, and key assumptions, including loss development factors and expected loss rates. Though the company does not expect them to do so, actual settlements and claims could differ materially from those estimated. Material differences in actual settlements and claims could have an adverse effect on our financial condition and results of operations.  

A sensitivity analysis has been prepared to quantify the impact of changes in claim severity and frequency on the estimated unpaid losses on the company’s workers’ compensation liabilities.  We estimate a 1% change in the claim severity and frequency would result in immaterial changes in the workers’ compensation liability.

Income Tax Expense and Accruals.    The annual tax rate is based on our income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate. Changes in statutory rates and tax laws in jurisdictions in which we operate may have a material effect on the annual tax rate. The effect of these changes, if any, would be recognized as a discrete item upon enactment.

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenues and expenses. Deferred tax assets and liabilities are measured based on the enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid.

Our income tax expense, deferred tax assets and liabilities, and reserve for uncertain tax benefits reflect our best assessment of future taxes to be paid in the jurisdictions in which we operate. The company records a valuation allowance to reduce its deferred tax assets if we believe it is more likely than not that some or all of the deferred assets will not be realized. While the company considers future taxable income and ongoing prudent and feasible tax strategies in assessing the need for a valuation allowance, if these estimates and assumptions change in the future, the company may be required to adjust its valuation allowance, which could result in a charge to, or an increase in, income in the period such determination is made.  

Periodically, we face audits from federal and state tax authorities, which can result in challenges regarding the timing and amount of income or deductions. We provide reserves for potential exposures when we consider it more likely than not that a taxing authority may take a sustainable position on a matter contrary to our position. We evaluate these reserves on a quarterly basis to ensure that they have been appropriately adjusted for events, including audit settlements that may impact the ultimate payment of such potential exposures. While the ultimate outcome of audits cannot be predicted with certainty, we do not currently believe that current or future audits will have a material adverse effect on our consolidated financial condition or results of operations. The company is no longer subject to federal examination for years prior to Fiscal 2018.  

Postretirement Plans.    The company records pension costs and benefit obligations related to its defined benefit plans based on actuarial valuations. These valuations reflect key assumptions determined by management, including the discount rate, expected long-term rate of return on plan assets and mortality. Material changes in pension costs and in benefit obligations may occur in the future due to experience that is different than assumed and changes in these assumptions.  A sensitivity analysis of pension costs has been prepared to quantify the impact of changes in the discount rate.  We estimate a 0.25% change in the discount rate would result in approximately $0.1 million change in pension costs on a pre-tax basis.    

The company sponsors a defined benefit pension plan for union employees, Plan No. 2, and a frozen nonqualified plan covering former Tasty executives.

We use a spot rate approach (“granular method”) to estimate the service cost and interest cost components of benefit cost by applying the specific spot rates along the yield curve to the relevant projected cash flows, as we believe this provides the best estimate of service and interest costs.  

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The pension plan’s investment committee, which consists of certain members of management, establishes investment guidelines and regularly monitors the performance of the plan’s assets.  The investment committee is responsible for executing these strategies and investing the pension assets in accordance with ERISA and fiduciary standards.  The investment objective of the pension plan is to preserve the plan’s capital and maximize investment earnings within acceptable levels of risk and volatility.  The investment committee meets on a regular basis with its investment advisors to review the performance of the plan’s assets.  Based upon performance and other measures and recommendations from its investment advisors, the investment committee rebalances the plan’s assets to the targeted allocation when considered appropriate.  The asset allocation for Plan No. 2 as of December 31, 2021 is equal to 0-80% equity securities, 20-100% fixed-income securities, and 0-10% short-term investments and cash. For the details of our pension plan assets, see Note 20, Postretirement Plans, of Notes to Consolidated Financial Statements of this Form 10-K.

In developing the expected long-term rate of return on plan assets at each measurement date, the company considers the plan assets’ historical actual returns, targeted asset allocations, and the anticipated future economic environment and long-term performance of the individual asset classes, based on the company’s investment strategy.  While appropriate consideration is given to recent and historical investment performance, the assumption represents management’s best estimate of the long-term prospective return.  Further, pension costs do not include an explicit expense assumption, and therefore the return on assets rate reflects the long-term expected return, net of expenses.  Based on these factors, the long-term rate of return assumption for Plan No. 2 was set at 5.7% for Fiscal 2021 and 5.9% for Fiscal 2022.  

The company utilizes the Society of Actuaries’ (“SOA”) published mortality tables and improvement scales in developing their best estimates of mortality. In October 2019, the SOA published its final report on their “standard” mortality table (“Pri-2012”).  For purposes of measuring pension benefit obligations of Plan No. 2, the company used a blue color adjustment to the Pri-2012 base table and a projection scale of MP-2020.  No other collar adjustments are applied for any other plans.  In addition, contingent annuitant mortality rates are applied for surviving spouses after the death of the original retiree.

The company determines the fair value of substantially all of its plans’ assets utilizing market quotes rather than developing “smoothed” values, “market related” values, or other modeling techniques.  Plan asset gains or losses in a given year are included with other actuarial gains and losses due to remeasurement of the plans’ projected benefit obligations (“PBO”). If the total unrecognized gain or loss exceeds 10% of the larger of (i) the PBO or (ii) the market value of plan assets, the excess of the total unrecognized gain or loss is amortized over the expected average remaining service period of active covered employees (or average future lifetime of participants if the plan is inactive or frozen).  Prior service cost or credit, which represents the effect on plan liabilities due to plan amendments, is amortized over the average remaining service period of active covered employees (or average future lifetime if the plan is inactive or frozen).

In Fiscal 2022, the company expects to make a $1.0 million voluntary cash contribution to Plan No. 2 and expects to pay $0.3 million in nonqualified pension benefits from corporate assets.  

Stock-based compensation.    Stock-based compensation expense for all share-based payment awards granted is determined based on the grant date fair value. The company recognizes these compensation costs net of an estimated forfeiture rate, and recognizes compensation cost only for those shares expected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based payment award.

We grant performance stock awards that separately have a market and performance condition. The expense computed for the total shareholder return shares (“TSR”) is fixed and recognized on a straight-line basis over the vesting period. The expense computed for the return on invested capital (“ROIC”) shares can change depending on the expected attainment of performance condition goals. The expense for the ROIC shares can be within a range of 0% to 125% of the target. There is a possibility that this expense component will change in subsequent quarters depending on how the company performs relative to the ROIC target. Additionally, there are time-based stock awards that vest over a period of three years.  See Note 18, Stock-Based Compensation, of Notes to Consolidated Financial Statements of this Form 10-K for additional information.  In early Fiscal 2022, the company granted stock awards to certain employees and stock-based compensation expense is expected to increase approximately $2 million to $3 million as compared to Fiscal 2021. In addition, the payout for the Fiscal 2020 grant is currently trending at 125% of target and as a result, we anticipate an additional $1.7 million of expense will be recognized in the first quarter of Fiscal 2022.

Commitments and contingencies.  The company and its subsidiaries from time to time are parties to, or targets of, lawsuits, claims, investigations and proceedings, including personal injury, commercial, contract, environmental, antitrust, product liability, health and safety and employment matters, including lawsuits related to the independent distributors, which are being handled and defended in the ordinary course of business.  Loss contingencies are recorded at the time it is probable an asset is impaired or a liability has been incurred and the amount can be reasonably estimated.  For litigation claims, the company considers the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the loss.  Losses are recorded in the selling, distribution and administrative expenses line item of the Consolidated Statements of Income.

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Results of Operations

Consolidated Results - Fiscal 2021 compared to Fiscal 2020

The company’s results of operations, expressed as a percentage of sales, are set forth below for Fiscal 2021 and Fiscal 2020:

							Percentage of Sales						Increase (Decrease)
	Fiscal 2021			Fiscal 2020			Fiscal 2021			Fiscal 2020			Dollars			%
	52 weeks			53 weeks			52 weeks			53 weeks
	(Amounts in thousands, except percentages)
Sales	$	4,330,767		$	4,387,991			100.0			100.0		$	(57,224	)		(1.3	)
Materials, supplies, labor and other production    costs (exclusive of depreciation and    amortization shown separately below)		2,175,247			2,196,142			50.2			50.0			(20,895	)		(1.0	)
Selling, distribution and administrative    expenses		1,719,797			1,693,387			39.7			38.6			26,410			1.6
Loss on inferior ingredients		944			107			0.0			0.0			837		NM
Restructuring and related impairment charges		—			35,483			—			0.8			(35,483	)	NM
Multi-employer pension plan withdrawal costs		3,300			—			0.1			—			3,300		NM
Depreciation and amortization		136,559			141,384			3.2			3.2			(4,825	)		(3.4	)
Income from operations		294,920			321,488			6.8			7.3			(26,568	)		(8.3	)
Other components of net periodic pension and    postretirement benefits credit		(405	)		(74	)		(0.0	)		(0.0	)		(331	)	NM
Pension plan settlement and curtailment loss		403			108,757			0.0			2.5			(108,354	)	NM
Interest expense, net		8,001			12,094			0.2			0.3			(4,093	)		(33.8	)
Loss on extinguishment of debt		16,149			—			0.4			—			16,149		NM
Income before income taxes		270,772			200,711			6.3			4.6			70,061			34.9
Income tax expense		64,585			48,393			1.5			1.1			16,192			33.5
Net income	$	206,187		$	152,318			4.8			3.5		$	53,869			35.4
Comprehensive income	$	202,350		$	264,762			4.7			6.0		$	(62,412	)		(23.6	)

NM – the computation is not meaningful

Percentages may not add due to rounding.

Sales

	Fiscal 2021				Fiscal 2020
	52 weeks				53 weeks
	$		%		$		%		% Change
	(Amounts in thousands)				(Amounts in thousands)
Branded retail	$	2,875,418		66.4	$	2,914,072		66.4		(1.3	)
Store branded retail		534,794		12.3		607,741		13.9		(12.0	)
Non-retail and other		920,555		21.3		866,178		19.7		6.3
Total	$	4,330,767		100.0	$	4,387,991		100.0		(1.3	)

(The table above presents certain sales by category that have been reclassified from amounts previously reported to conform to the current period presentation.)

The change in sales was attributable to the following:

Percentage point change in sales attributed to:	Favorable (Unfavorable)
Pricing/mix		4.6
Volume		(4.2	)
Impact of 53rd week in Fiscal 2020		(1.7	)
Total percentage change in sales		(1.3	)

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Sales decreased year over year primarily due to the additional week in the prior year and significant declines in store branded retail sales, partially offset by positive pricing implemented during Fiscal 2021 across all sales categories and recovery of non-retail and other sales.  In Fiscal 2021, the company has experienced a favorable sales mix of branded retail sales even as away-from-home dining returned to more normal levels.  The mix of branded retail sales to total sales remained consistent with Fiscal 2020 which benefitted from increased demand for our branded retail products as consumers shifted to greater at-home consumption due to the pandemic.  In Fiscal 2019, branded retail sales comprised 60.1% of total sales which is significantly lower than 66.4% for Fiscal 2021 and 2020.  We continued to invest in our brands in Fiscal 2021, including targeting the e-commerce channel which has experienced significant growth during the ongoing pandemic.  Improved promotional efficiency (measurement of a promotion’s impact on operating performance) in the current year also mitigated the sales decrease.  The promotional environment remained relatively stable during Fiscal 2021, however the sustainability of this trend is uncertain.      

Branded retail sales declined year over year primarily due to the additional week in the prior year.  Positive pricing actions and favorable mix shifts in Fiscal 2021 mostly offset volume declines.  We experienced a significant increase in prior year volumes as a result of the onset of the pandemic and the impact of the additional week.  Sales of our branded traditional loaf breads experienced the largest declines as we focused production on these items in the prior year to quickly meet heightened customer demand caused by the shift to mostly at-home consumption at the onset of the pandemic.  Both our DKB organic products and Canyon Bakehouse gluten-free products continued to experience volume growth in Fiscal 2021 which partially offset the branded retail sales decline. Fiscal 2021 volumes were still significantly higher than our historical pre-pandemic levels.

Store branded retail sales declined significantly due to decreased volume for store branded breads, buns and rolls as consumers continued to shift to branded retail products and the impact of the additional week in the prior year.  These decreases were partially offset by increased sales of store branded cake and gluten-free products.  Sales of our store branded retail products had been declining prior to the pandemic and we have experienced an acceleration of this trend during the pandemic, partly due to executing on our strategy to prioritize a more favorable sales mix of branded retail sales.  

As discussed above, our non-retail sales recovered during Fiscal 2021 compared to the significant declines experienced in the prior year period due to restaurant and school closures and shutdowns but have not returned to pre-pandemic levels.  Increased foodservice volumes and to a lesser extent, positive price/mix drove the increase, partially offset by the impact of the additional week in the prior year and declines in sales of unsold products through our outlet stores.  

We anticipate our Fiscal 2022 sales will be positively impacted by the benefit of price increases implemented during Fiscal 2021 and at the beginning of Fiscal 2022, however, this could potentially be offset to some extent by changes in consumer buying patterns which are unpredictable.

Materials, Supplies, Labor, and Other Production Costs (exclusive of depreciation and amortization shown separately; as a percent of sales)

Line item component	Fiscal 2021 % of sales		Fiscal 2020 % of sales		Change as a % of sales
Ingredients and packaging		28.1		27.4		0.7
Workforce-related costs		14.9		15.1		(0.2	)
Other		7.2		7.5		(0.3	)
Total		50.2		50.0		0.2

Overall, input cost inflation was mostly mitigated by pricing actions implemented in Fiscal 2021 and the continued shift in mix away from lower margin store branded retail products to higher margin branded retail products.  The positive shift in mix resulted from the ongoing COVID-19 pandemic and executing on our strategy to be a more brand-focused company.  Additionally, we realized improvement in our cake operations. Ingredient and packaging costs were significantly higher as percent of sales due to higher input prices, mostly notably for non-organic flour, oils, bread bags, and corrugated packaging.  Reduced outside purchases of product (sales with no associated ingredient costs) also contributed to the increase in ingredient and packaging costs and these are reflected in the Other line item in the table above.  Workforce-related costs decreased as a percent of sales due to lower incentive compensation costs in Fiscal 2021, partly due to decreases in appreciation bonuses for frontline workers of $4.5 million, and the prior year included $5.1 million of start-up costs incurred for the conversion of our Lynchburg, Virginia plant to an organic bakery. These start-up costs were largely workforce-related.  The conversion began in the first quarter of Fiscal 2020 and the bakery resumed production at the end of the third quarter.  As discussed above, the labor market is highly competitive and the company continues to face labor shortages. We anticipate this trend to continue in Fiscal 2022.

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Raw materials, such as our baking ingredients, periodically experience price fluctuations. The cost of these inputs may fluctuate significantly due to government policy and regulation, weather conditions, domestic and international demand and supply, or other unforeseen circumstances. We enter into forward purchase agreements and other derivative financial instruments in an effort to manage the impact of such volatility in raw material prices, but some organic and specialty ingredients do not offer the same hedging opportunities to reduce the impact of price volatility. Any decrease in the availability of these agreements could increase the effective price of these raw materials to us and significantly affect our earnings. We currently anticipate ingredient costs to be significantly higher in Fiscal 2022 relative to Fiscal 2021.

Selling, Distribution and Administrative Expenses (as a percent of sales)   

Line item component	Fiscal 2021 % of sales		Fiscal 2020 % of sales		Change as a % of sales
Workforce-related costs		11.4		11.5		(0.1	)
Distributor distribution fees		14.9		15.3		(0.4	)
Other		13.4		11.8		1.6
Total		39.7		38.6		1.1

Workforce-related costs decreased slightly as a percent of sales compared to the prior year primarily due to lower workforce-related incentive costs, including a $2.6 million decrease in appreciation bonuses paid to frontline workers, mostly offset by wage inflation and a competitive labor market.  The appreciation bonuses are in addition to the company’s annual performance-based cash incentive plan in which all Flowers employees participate. Stock-based compensation expense increased in Fiscal 2021 due to an increase in the number of awards outstanding as compared to Fiscal 2020 and partially offset the overall decrease in workforce-related costs.

Distributor distribution fees decreased as a percent of sales due to the shift in sales mix to include a larger percentage of non-retail and other sales resulting in a smaller portion of our sales being made through IDPs.  Non-retail and other sales experienced a partial recovery in Fiscal 2021 after the significant decline in Fiscal 2020 due to the pandemic.  The decrease in distributor distribution fees was offset by higher transportation costs which are reflected in the Other line item in the table above.

Increases in marketing investments, higher consulting costs, legal settlements, and transportation costs, and the prior year reimbursement of indirect losses for inferior yeast of $3.9 million primarily resulted in the increase in the Other line item in the table above.  We continued to invest in our brands through our marketing efforts, including through broadcast advertising and e-commerce investments, among others.  We incurred $31.3 million of business process improvement consulting costs during Fiscal 2021 associated with ongoing transformation strategy initiatives compared to $15.5 million of Project Centennial consulting costs and $4.4 million of ERP Road Mapping consulting costs both incurred in the prior year.  For additional details regarding these consulting costs and the reimbursement related to inferior ingredients, see the “Matters Affecting Comparability” section above.  In the current year, we incurred $23.1 million of legal settlement and related charges and $3.4 million for the acquisition consideration adjustment compared to $7.3 million of legal settlements in the prior year, as discussed in the “Matters Affecting Comparability” section above.  Additionally, See Note 22, Commitments and Contingencies, of Notes to Consolidated Financial Statements of this Form 10-K for additional information regarding legal settlements.  Higher prices for scrap dough sales in the current year partially offset the overall increase in costs.

Loss on Inferior Ingredients, Restructuring and Related Impairment Charges, and Multi-Employer Pension Plan Withdrawal Costs

Refer to the discussion in the “Matters Affecting Comparability” section above regarding these items.

Depreciation and Amortization Expense

Depreciation and amortization expense was lower in dollars and unchanged as a percent of sales primarily due to a change in the contractual terms with a transportation entity that transports a significant portion of our fresh bakery products no longer qualifying for treatment as an embedded lease as of the end of Fiscal 2020.

Income from Operations

The decrease in income from operations year over year in dollars and as a percent of sales resulted from sales declines, input cost inflation, higher selling, distribution, and administrative expenses, and current year multi-employer pension plan withdrawal costs, as discussed above.  The decrease was partially offset by the prior year restructuring and related impairment charges.  

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Pension Plan Settlement and Curtailment Loss

As discussed in the “Matters Affecting Comparability” section above, we recognized $0.4 million of non-cash pension plan settlement charges in Fiscal 2021 associated with Plan No. 2 and $108.8 million of non-cash pension plan settlement and curtailment charges in Fiscal 2020 composed of a settlement charge of $104.5 million and a curtailment loss of $4.3 million associated with Plan No. 1.  

Net Interest Expense

Year over year, net interest expense (exclusive of the portion related to the loss on extinguishment of debt discussed below) decreased in dollars and as a percent of sales primarily due to the lower interest rate on the 2031 notes as compared to the 2022 notes which were redeemed in the first quarter of Fiscal 2021 and, to a lesser extent, lower average amounts outstanding under our borrowing arrangements, partially offset by a decrease in interest income.  

Loss on Extinguishment of Debt

In the first quarter of Fiscal 2021, we completed the redemption of the outstanding 2022 notes and incurred a loss of $16.1 million due to the make-whole provision of $15.4 million and the write-off of unamortized debt discount and debt issuance costs totaling $0.7 million as further discussed in the “Matters Affecting Comparability” section above.  

Income Tax Expense

The effective tax rate for Fiscal 2021 was 23.9% compared to 24.1% in the prior year.  The decrease in the rate year over year was primarily due to state income taxes.  

For the current year and prior year, the primary differences in the effective rate and statutory rate related to state income taxes. The Consolidated Appropriations Act, 2021 (CAA Act), American Rescue Plan Act (“ARPA”), and Infrastructure Investment and Jobs Act (“IIJA”) did not have a material impact on the effective tax rate for Fiscal 2021 and there is no anticipated material impact on the effective tax rate in future periods.  

Comprehensive Income

The decrease in comprehensive income year over year resulted primarily from recognizing the pension plan settlement and curtailment loss in earnings in the prior year in conjunction with the termination of Plan No. 1 and changes in the fair value of derivatives, net of the increase in net earnings.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION

Strategy

We believe our ability to consistently generate cash flows from operating activities to meet our liquidity needs is one of our key financial strengths.  Furthermore, we strive to maintain a conservative financial position as we believe it allows us flexibility to make investments and acquisitions and is a strategic competitive advantage.  Currently, our liquidity needs arise primarily from working capital requirements, capital expenditures, and obligated debt repayments.  We believe we currently have access to available funds and financing sources to meet our short and long-term capital requirements.  The company’s strategy for use of its excess cash flows includes:

• implementing our strategic priorities, including our transformation strategy initiatives;

• paying dividends to our shareholders;

• maintaining a conservative financial position;

• making strategic acquisitions; and

• repurchasing shares of our common stock.

Although there has been no material adverse impact on the company’s results of operations, liquidity or cash flows in Fiscal 2021, the COVID-19 pandemic could significantly impact our ability to generate future cash flows and we continue to evaluate various potential COVID-19-related business risks.  Those potential risks include the possibility of future economic downturns which could result in a significant shift away from our branded retail products to store branded products, foodservice business continuity as customers have experienced disruptions that negatively impacted their sales and could affect their ability to meet their obligations,

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including to the company, an extension of days of sales outstanding as customers shift to work-from-home operations, and possible further impacts to production, among other risks.

In light of the potential risks associated with the ongoing pandemic, the company has taken actions to safeguard its capital position.  We continue to maintain higher levels of cash on hand compared to pre-pandemic levels and, in the first quarter of Fiscal 2021, we issued the 2031 notes and used the net proceeds from the offering to redeem in full the outstanding 2022 notes, extending the earliest maturity date of our non-revolving debt to 2026.  Additionally, we repaid the outstanding balances on both the AR facility and the credit facility with proceeds from the issuance of the 2031 notes and from cash flows from operations.  The ongoing COVID-19 pandemic remains fluid and its future impact on the company’s business, results of operations, liquidity or capital resources cannot be reasonably estimated with any degree of certainty.  If the company experienced a significant reduction in revenues, the company would have additional alternatives to maintain liquidity, including amounts available on our debt facilities, capital expenditure reductions, adjustments to its capital allocation policy, and cost reductions. Although we do not currently anticipate a need, we also believe that we could access the capital markets to raise additional funds. We believe the fundamentals of the company remain strong and that we have sufficient liquidity on hand to continue business operations during the pandemic. The company had total available liquidity of $872.0 million as of January 1, 2022, consisting of cash on hand and the available balances under the credit facility and the AR facility.  

We expect the transformation strategy initiatives will require significant capital investment and expense over the next several years.  We currently anticipate the upgrade of our ERP system will cost approximately $275 million (of which approximately 40% is expected to be capitalized) and anticipate the upgrade to be completed in 2026.  As of January 1, 2022, we had incurred costs related to the project of approximately $47 million. Costs related to the digital initiatives are more fluid and cannot currently be estimated.

The company leases certain property and equipment under various financing and operating lease arrangements. Most of the operating leases provide the company with the option, after the initial lease term, to purchase the property at the then fair value, renew the lease at the then fair value, or return the property. The financing leases provide the company with the option to purchase the property at a fixed price at the end of the lease term. The company believes the use of leases as a financing alternative places the company in a more favorable position to fulfill its long-term strategy for the use of its cash flow. See Note 13, Leases, of Notes to Consolidated Financial Statements of this Form 10-K for detailed financial information regarding the company’s lease arrangements.

Key items impacting our liquidity, capital resources and financial position in Fiscal 2021 and 2020:

Fiscal 2021:

• We generated $344.6 million of net cash from operating activities.

• We paid dividends to our shareholders of $175.9 million.

• We decreased our total debt outstanding $81.9 million.

• We invested in our business through capital expenditures of $136.0 million (inclusive of $23.0 million of capital expenditures (including amounts recognized in accounts payable at year end) for the ERP upgrade) and purchase of leased warehouses of $64.7 million.

• We paid $1.5 million in restructuring cash payments, all of which had been accrued for in the prior year.

• We incurred business process improvement consulting costs of $31.3 million related to the ongoing transformation strategy initiatives (exclusive of capitalized or deferred costs).

Fiscal 2020:

• We generated $454.5 million of net cash from operating activities.

• We paid dividends to our shareholders of $167.3 million.

• We increased our total debt outstanding $92.5 million.

• We invested in our business through capital expenditures of $97.9 million.

• We incurred Project Centennial implementation costs, including restructuring cash payments of $12.0 million and non-restructuring consulting costs of $15.5 million.

• We incurred ERP Road Mapping costs of $4.4 million.

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Liquidity Discussion

Flowers Foods’ cash and cash equivalents were $185.9 million at January 1, 2022 and $307.5 million at January 2, 2021. The cash and cash equivalents were derived from the activities presented in the table below (amounts in thousands):

Cash flow component	Fiscal 2021			Fiscal 2020
Cash flows provided by operating activities	$	344,610		$	454,464
Cash disbursed for investing activities		(191,438	)		(73,992	)
Cash disbursed for financing activities		(274,777	)		(84,040	)
Total change in cash	$	(121,605	)	$	296,432

Cash Flows Provided by Operating Activities.  Net cash provided by operating activities included the following items for non-cash adjustments to net income (amounts in thousands):

	Fiscal 2021		Fiscal 2020
Depreciation and amortization	$	136,559	$	141,384
Restructuring and related impairment charges		—		23,627
Stock-based compensation		21,343		12,855
Deferred income taxes		6,777		(31,154	)
Pension and postretirement plans expense (including    settlement and curtailment losses)		1,306		109,823
Other non-cash		6,445		16,696
Net non-cash adjustment to net income	$	172,430	$	273,231

• Refer to the Restructuring and related impairment charges discussion in the “Matters Affecting Comparability” section above regarding this item.

• The change in stock-based compensation from Fiscal 2020 to Fiscal 2021 was primarily due to an increase in the number of awards outstanding in the current year as compared to the prior year.

• For Fiscal 2021 deferred income taxes changed due to changes in temporary differences.  For Fiscal 2020, the change in deferred income taxes resulted from changes in temporary differences year over year, including the impact of the termination of Plan No. 1.

• Changes in pension and postretirement plan (benefit) expense were primarily due to the settlement and curtailment loss of $108.8 million recognized in Fiscal 2020 in conjunction with the termination of Plan No. 1.  

• Other non-cash items include non-cash interest expense for the amortization of debt discounts and deferred financing costs, activity in allowances for accounts receivable and inventory obsolescence, and gains or losses on the sale of assets.

Net cash for working capital requirements and pension plan contributions included the following items (amounts in thousands):

	Fiscal 2021			Fiscal 2020
Changes in accounts receivable, net	$	(10,600	)	$	(25,021	)
Changes in inventories, net		(9,767	)		(1,771	)
Changes in hedging activities, net		(4,967	)		15,829
Changes in other assets and accrued liabilities, net		(46,749	)		53,250
Changes in accounts payable		38,076			(5,772	)
Qualified pension plan contributions		—			(7,600	)
Net changes in working capital and pension plan contributions	$	(34,007	)	$	28,915

• The change in accounts receivable, inventories, and accounts payable resulted primarily from changes in sales and increases in ingredient and packaging costs year over year.

• Hedging activities change from market movements that affect the fair value and required collateral of positions and the timing and recognition of deferred gains or losses. These changes will occur as part of our hedging program.

• The change in other assets and accrued liabilities primarily resulted from changes in employee compensation accruals, cloud-computing arrangement service contracts, legal settlement accruals, income tax receivable balances, hedge margin, and payroll tax deferrals under the CARES Act. In Fiscal 2021 and 2020, we paid $1.5 million and $12.0 million, respectively, of restructuring-related cash charges.  In Fiscal 2021, we accrued $23.1 million of legal settlements and paid

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$11.9 million, all of which had been accrued for in prior years.  In Fiscal 2020, we accrued $7.3 million and paid $24.5 million in Fiscal 2020, of which $20.9 million had been accrued for in prior years.  We anticipate making payments of approximately $38.2 million, including our share of employment taxes, in performance-based cash awards under our cash incentive plans in the first quarter of Fiscal 2022.  During Fiscal 2021 and 2020, the company paid $64.6 million and $18.6 million, respectively, including our share of employment taxes, in performance-based cash awards under the company’s incentive plan.  The increase in performance-based cash awards paid in Fiscal 2021 resulted from improved financial performance in Fiscal 2020.  An additional $0.4 million and $0.2 million was paid during Fiscal 2021 and 2020, respectively, for our share of employment taxes on the vesting of the performance-contingent restricted stock awards in each respective year.  Under the CARES Act, the company deferred approximately $30.0 million of the employer share of Social Security tax for the period from the beginning of the second quarter of Fiscal 2020 through December 31, 2020 and paid approximately $15.0 million in December 2021 with the remaining amount to be paid by December 31, 2022.  

• During Fiscal 2020, we made voluntary contributions to our qualified defined benefit pension plans of $7.6 million.  We did not make any contributions to our qualified defined benefit pension plans in Fiscal 2021. We expect to make $1.0 million of voluntary cash contributions to our pension plans in Fiscal 2022 and expect to pay $0.3 million in nonqualified pension benefits from corporate assets.  The company believes its cash flow and balance sheet will allow it to fund future pension needs without adversely affecting the business strategy of the company.

Cash Flows Disbursed for Investing Activities.    The table below presents net cash disbursed for investing activities for Fiscal 2021 and 2020 (amounts in thousands):

	Fiscal 2021			Fiscal 2020
Purchase of property, plant, and equipment	$	(135,964	)	$	(97,929	)
Purchase of leased portfolio		(64,689	)		—
Principal payments from notes receivable, net of    repurchases of independent distributor territories		15,276			18,379
Acquisition of trademarks		(10,200	)		—
Proceeds from sale of property, plant and equipment		2,995			5,368
Other		1,144			190
Net cash disbursed for investing activities	$	(191,438	)	$	(73,992	)

• The company currently estimates capital expenditures of approximately $175.0 million to $185.0 million (inclusive of expenditures for the ERP upgrade of $65.0 million to $75.0 million) in Fiscal 2022.

Cash Flows Disbursed for Financing Activities.    The table below presents net cash disbursed for financing activities for Fiscal 2021 and 2020 (amounts in thousands):

	Fiscal 2021			Fiscal 2020
Dividends paid, including dividends on share-based    payment awards	$	(175,903	)	$	(167,270	)
Payment of contingent consideration		—			(4,700	)
Payment of financing fees		(6,022	)		(206	)
Stock repurchases		(9,510	)		(783	)
Change in bank overdrafts		261			3,134
Net change in debt obligations		(81,858	)		92,500
Payments on financing leases		(1,745	)		(6,715	)
Net cash disbursed for financing activities	$	(274,777	)	$	(84,040	)

• Our annual dividend rate increased from $0.80 per share in Fiscal 2020 to $0.84 per share in Fiscal 2021.  While there are no requirements to increase our dividend rate, we have shown a recent historical trend to do so. We anticipate funding future dividend payments from cash flows from operations.

• The payment for contingent consideration was made to satisfy the contingent consideration liability recorded in the Canyon Bakehouse LLC acquisition.

• We paid financing costs associated with the issuance of the 2031 notes in the first quarter of Fiscal 2021 and for the amendments of the AR facility and credit facility in the third quarter of Fiscal 2021.

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• Stock repurchase decisions are made based on our stock price, our belief of relative value, and our cash projections at any given time.  See Note 17, Stockholders’ Equity, of Notes to Consolidated Financial Statements of this Form 10-K for additional information.  A portion of these shares were acquired to satisfy employees’ tax withholding and payment obligations in connection with the vesting of restricted stock awards, which are repurchased by the company based on the fair market value on the vesting date.

• See the discussion below under the “Capital Structure” section regarding changes in debt obligations.

Capital Structure

Long-term debt and right-of-use lease obligations and stockholders’ equity were as follows at January 1, 2022 and January 2, 2021. For a detailed description of our debt and right-of-use lease obligations and information regarding our distributor arrangements, deferred compensation, and guarantees and indemnification obligations, see Note 13, Leases, and Note 14, Debt and Other Commitments, of Notes to Consolidated Financial Statements of this Form 10-K:

	Interest Rate at	Final	Balance at						Fixed or
	January 1, 2022	Maturity	January 1, 2022			January 2, 2021			Variable Rate
			(Amounts in thousands)
2031 notes	2.40%	2031	$	493,333		$	—		Fixed Rate
2026 notes	3.50%	2026		397,276			396,705		Fixed Rate
2022 notes	4.38%	2022		—			399,398		Fixed Rate
Credit facility	1.02%	2026		—			50,000		Variable Rate
AR facility	1.00%	2023		—			114,000		Variable Rate
Right-of-use lease obligations		2036		300,522			345,762
				1,191,131			1,305,865
Less:  Current maturities of long-term debt    and right-of-use lease obligations				(47,974	)		(51,908	)
Long-term debt and right-of-use lease    obligations			$	1,143,157		$	1,253,957

Total stockholders’ equity was as follows at January 1, 2022 and January 2, 2021:

	Balance at
	January 1, 2022		January 2, 2021
	(Amounts in thousands)
Total stockholders' equity	$	1,411,274	$	1,372,994

On March 9, 2021, the company issued $500.0 million of senior notes with a maturity date of March 15, 2031.  The company pays semiannual interest on the 2031 notes on each March 15 and September 15 and the notes bear interest at 2.400% per annum.  The net proceeds received of $494.3 million (before expenses and net of debt discount at issuance of $2.4 million and underwriting discount of $3.3 million) from the issuance of the 2031 notes were used for the early redemption of the outstanding 2022 notes and repayments on the AR facility and the credit facility. The early redemption of the 2022 notes resulted in cash payments of $415.4 million (inclusive of a make-whole amount of $15.4 million) which is classified as a financing cash outflow in the Consolidated Statement of Cash Flows.  We recognized a loss on extinguishment of debt of $16.1 million comprised of the make-whole cash payment of $15.4 million and non-cash charges of $0.7 million for the write-off of unamortized debt discount and debt issuance costs.

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The credit facility and AR facility are generally used for short term liquidity needs. The company has historically entered into amendments and extensions approximately one year prior to the maturity of these facilities.  During the third quarter of Fiscal 2021, we amended the credit facility to, among other things, extend the maturity date to July 30, 2026 and amended the AR facility to, among other things, extend the maturity date to September 27, 2023.  The following table details the amounts available under the AR facility and credit facility and the highest and lowest balances outstanding under these arrangements during Fiscal 2021:

	Amount Available		Highest		Lowest
	for Withdrawal at		Balance in		Balance in
Facility	January 1, 2022		Fiscal 2021		Fiscal 2021
	(Amounts in thousands)
AR facility	$	194,500	$	114,000	$	—
Credit facility (1)		491,600	$	50,000	$	—
	$	686,100

(1) Amount excludes a provision in the agreement which allows the company to request an additional $200.0 million in additional revolving commitments.

Amounts outstanding under the credit facility can vary daily.  Changes in the gross borrowings and repayments can be caused by cash flow activity from operations, capital expenditures, acquisitions, dividends, share repurchases, and tax payments, as well as derivative transactions which are part of the company’s overall risk management strategy as discussed in Note 10, Derivative Financial Instruments, of Notes to Consolidated Financial Statements of this Form 10-K.  During Fiscal 2021, the company borrowed $10.0 million in revolving borrowings under the credit facility and repaid $60.0 million in revolving borrowings. The amount available under the credit facility is reduced by $8.4 million for letters of credit.

The AR facility and the credit facility are variable rate debt. In periods of rising interest rates, the cost of using these facilities will become more expensive and increase our interest expense.  Therefore, borrowings under these facilities provide us the greatest direct exposure to rising rates. In addition, if interest rates do increase, it will make the cost of funds more expensive.

Restrictive financial covenants for our borrowings include such ratios as a minimum interest coverage ratio and a maximum leverage ratio. Our debt may also contain certain customary representations and warranties, affirmative and negative covenants, and events of default.  The company believes that, given its current cash position, its cash flow from operating activities and its available credit capacity, it can comply with the current terms of the debt agreements and can meet its presently foreseeable financial requirements. As of January 1, 2022 and January 2, 2021, the company was in compliance with all restrictive covenants under our debt agreements.

The company has debt exposure to LIBOR and sufficient LIBOR successor rate provisions to cover the discontinuance of LIBOR.  The company continues to monitor the progression of LIBOR discontinuation and the recommendation for an alternative interest rate benchmark.  

Special Purpose Entities.  At January 1, 2022 and January 2, 2021, the company did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which are established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes.

Guarantees.  In the event the company ceases to utilize the independent distribution form of doing business or exits a geographic market, the company is contractually required to purchase the distribution rights from the independent distributor.  

Stock Repurchase Plan.    The Board has approved a plan that currently authorizes share repurchases of up to 74.6 million shares of the company’s common stock. At the close of the company’s fourth quarter on January 1, 2022, 5.8 million shares remained under the existing authorization. Under the plan, the company may repurchase its common stock in open market or privately negotiated transactions or under an accelerated repurchase program at such times and at such prices as determined to be in the company’s best interest. These purchases may be commenced or suspended without prior notice depending on then-existing business or market conditions and other factors.  During Fiscal 2021, 0.41 million shares of the company’s common stock were repurchased under the plan at a cost of $9.5 million and during Fiscal 2020, 0.04 million shares were repurchased under the plan at a cost of $0.8 million. From the inception of the plan through January 1, 2022, 68.8 million shares, at a cost of $652.9 million, have been repurchased.  There were no repurchases of the company’s common stock during the fourth quarter of Fiscal 2021.  

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New Accounting Pronouncements Not Yet Adopted

See Note 3, Recent Accounting Pronouncements, of Notes to Consolidated Financial Statements of this Form 10-K regarding this information.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The company uses derivative financial instruments as part of an overall strategy to manage market risk. The company uses forwards, futures, swaps, and option contracts to hedge existing or future exposure to changes in interest rates and commodity prices. The company does not enter into these derivative financial instruments for trading or speculative purposes. If actual market conditions are less favorable than those anticipated, interest rates and commodity prices could increase significantly, adversely affecting our interest costs and the margins from the sale of our products.

Commodity Price Risk

The company enters into commodity forward, futures, option, and swap contracts for wheat and, to a lesser extent, other commodities in an effort to provide a predictable and consistent commodity price and thereby reduce the impact of market volatility in its raw material and packaging prices. As of January 1, 2022, the company’s hedge portfolio contained commodity derivatives with a fair value (liability) of $3.7 million and is based on quoted market prices.  The total amount relates to instruments that will be utilized in Fiscal 2022.

A sensitivity analysis has been prepared to quantify the company’s potential exposure to commodity price risk with respect to its derivative portfolio. Based on the company’s derivative portfolio as of January 1, 2022, a hypothetical ten percent change in commodity prices would increase or decrease the fair value of the derivative portfolio by $4.8 million. The analysis disregards changes in the exposures inherent in the underlying hedged items; however, the company expects that any increase or decrease in the fair value of the portfolio would be substantially offset by increases or decreases in raw material and packaging prices.

Item 8. Financial Statements and Supplementary Data

Refer to the Index to Consolidated Financial Statements and the Financial Statement Schedule for the required information.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures:

We have established and maintain a system of disclosure controls and procedures that are designed to ensure that material information relating to the company, which is required to be timely disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 (“Exchange Act”), is accumulated and communicated to management in a timely fashion and is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) was performed as of the end of the period covered by this annual report. This evaluation was performed under the supervision and with the participation of management, including both our CEO and our CFO and CAO.

Based upon that evaluation, both our CEO and our CFO and CAO have concluded that these disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Management’s Report on Internal Control Over Financial Reporting:

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our CEO and our CFO and CAO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation our management concluded that our internal control over financial reporting was effective as of January 1, 2022.

The effectiveness of our internal control over financial reporting as of January 1, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report which is included herein.

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Changes in Internal Control Over Financial Reporting:

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item with respect to directors of the company is incorporated herein by reference to the information set forth under the captions “Proposal I Election of Directors”, “Directors and Corporate Governance — Directors”, “Directors and Corporate Governance — Corporate Governance — The Board of Directors and Committees of the Board of Directors”, “Directors and Corporate Governance — Corporate Governance — Relationships Among Certain Directors”, “Audit Committee Report” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the company’s definitive proxy statement for the 2022 Annual Meeting of Shareholders expected to be filed with the SEC in April (the “proxy”). The information required by this item with respect to executive officers of the company is set forth in Part I of this Form 10-K.

We have adopted the Flowers Foods, Inc. Code of Business Conduct and Ethics for Officers and Members of the Board of Directors (the “Code of Business Conduct and Ethics”), which applies to all of our directors and executive officers. The Code of Business Conduct and Ethics is publicly available on our website at www.flowersfoods.com in the “CORPORATE GOVERNANCE” section of the “INVESTORS” tab. If we make any substantive amendments to our Code of Business Conduct and Ethics or we grant any waiver, including any implicit waiver, from a provision of the Code of Business Conduct and Ethics, that applies to any of our directors or executive officers, including our principal executive officer and our principal financial officer and principal accounting officer, we intend to disclose the nature of the amendment or waiver on our website at the same location. Alternatively, we may elect to disclose the amendment or waiver in a current report on Form 8-K filed with the SEC.

Our President and CEO certified to the NYSE on June 23, 2021 pursuant to Section 303A.12 of the NYSE’s listing standards, that he was not aware of any violation by Flowers Foods of the NYSE’s corporate governance listing standards as of that date.

Item 11. Executive Compensation

The information required by this item is incorporated herein by reference to the information set forth under the caption “Executive Compensation” in the proxy.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following chart sets forth the amounts of securities authorized for issuance under the company’s compensation plans as of January 1, 2022.

	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a))
Plan Category	(a)		(b)		(c)
Equity compensation plans approved by    security holders		—	$	—		3,208,452
Equity compensation plans not approved by    security holders		—		—		—
Total		—	$	—		3,208,452

Under the company’s 2014 Omnibus Equity and Incentive Compensation Plan (the “Omnibus Plan”), the Board is authorized to grant a variety of stock-based awards, including stock options, restricted stock and deferred stock, to its directors and certain of its employees. The number of securities set forth in column (c) above reflects securities available for issuance as stock options, restricted stock and deferred stock under the company’s compensation plans. The number of shares originally available under the Omnibus Plan is 8,000,000 shares. The Omnibus Plan replaced the Flowers Foods’ 2001 Equity and Performance Incentive Plan, as amended and restated as of April 1, 2009 (“EPIP”), the Stock Appreciation Rights Plan, and the Annual Executive Bonus Plan. As a result, no additional shares will be issued under the EPIP. There are 89,949 deferred shares outstanding under the EPIP that will be issued at the end of the deferral period. See Note 18, Stock-Based Compensation, of Notes to Consolidated Financial Statements of this Form 10-K for additional information on equity compensation plans.

The remaining information required by this item is incorporated herein by reference to the information set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in the proxy.

44

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated herein by reference to the information set forth under the caption “Directors and Corporate Governance — Corporate Governance — Determination of Independence” and “Transactions with Management and Others” in the proxy.

Item 14. Principal Accounting Fees and Services

The information required by this item is incorporated herein by reference to the information set forth under the caption “Proposal III Ratification of Appointment of Independent Registered Public Accounting Firm — Fiscal 2021 and Fiscal 2020 Audit Firm Fee Summary” in the proxy.

45

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) List of documents filed as part of this report.

1. Financial Statements of the Registrant

Report of Independent Registered Public Accounting Firm.

Consolidated Balance Sheets at January 1, 2022 and January 2, 2021.

Consolidated Statements of Income for Fiscal 2021, Fiscal 2020, and Fiscal 2019.

Consolidated Statements of Comprehensive Income for Fiscal 2021, Fiscal 2020, and Fiscal 2019.

Consolidated Statements of Changes in Stockholders’ Equity for Fiscal 2021, Fiscal 2020, and Fiscal 2019.

Consolidated Statements of Cash Flows for Fiscal 2021, Fiscal 2020, and Fiscal 2019.

Notes to Consolidated Financial Statements.

2. Exhibits. The following documents are filed as exhibits hereto:

46

EXHIBIT INDEX

Exhibit
No			Name of Exhibit
2.1		—	Distribution Agreement, dated as of October 26, 2000, by and between Flowers Industries, Inc. and Flowers Foods, Inc. (Incorporated by reference to Exhibit 2.1 to Flowers Foods’ Registration Statement on Form 10, dated December 1, 2000, File No. 1-16247).
2.2		—	Amendment No. 1 to Distribution Agreement, dated as of March 12, 2001, by and between Flowers Industries, Inc. and Flowers Foods, Inc. (Incorporated by reference to Exhibit 2.2 to Flowers Foods’ Annual Report on Form 10-K, dated March 30, 2001, File No. 1-16247).
2.3		—	Acquisition Agreement, dated as of May 31, 2012, by and among Flowers Foods, Inc., Lobsterco I, LLC, Lepage Bakeries, Inc., RAL, Inc., Bakeast Company, Bakeast Holdings, Inc., and the equityholders named therein (Incorporated by reference to Exhibit 2.1 to Flowers Foods’ Current Report on Form 8-K, dated June 1, 2012, File No. 1-16247).
2.4		—	Agreement and Plan of Merger, dated as of May 31, 2012, by and among Flowers Foods, Inc., Lobsterco II, LLC, Aarow Leasing, Inc., The Everest Company, Incorporated and the shareholders named therein (Incorporated by reference to Exhibit 2.2 to Flowers Foods’ Current Report on Form 8-K, dated June 1, 2012, File No. 1-16247).
2.5		—	Asset Purchase Agreement, dated as of January 11, 2013, by and among Hostess Brands, Inc., Interstate Brands Corporation, IBC Sales Corporation, Flowers Foods, Inc. and FBC Georgia, LLC (Incorporated by reference to Exhibit 2.1 to Flowers Foods’ Current Report on Form 8-K, dated January 14, 2013, File No. 1-16247).
2.6		—	Stock Purchase Agreement, dated as of August 12, 2015, by and among AVB, Inc., Goode Seed Holdings, LLC, Goode Seed Co-Invest, LLC, Glenn Dahl, trustee of the Glenn Dahl Family Trust, U/A/D November 28, 2012, David J. Dahl, trustee of the David Dahl Family Trust, U/A/D May 1, 2012, Shobi L. Dahl, trustee of the Shobi Dahl Family Trust, U/A/D, December 16, 2011, Flowers Bakeries, LLC, Flowers Foods, Inc., and Goode Seed Holdings, LLC, as shareholders’ representative (Incorporated by reference to Exhibit 2.6 to Flowers Foods’ Quarterly Report on Form 10-Q, dated August 6, 2020, File No. 1-16247).
3.1		—	Amended and Restated Articles of Incorporation of Flowers Foods, Inc., as amended through May 21, 2020 (Incorporated by reference to Exhibit 3.1 to Flowers Foods’ Current Report on Form 8-K, dated May 28, 2020, File No. 1-16247).
3.2		—	Amended and Restated Bylaws of Flowers Foods, Inc., as amended through May 21, 2020 (Incorporated by reference to Exhibit 3.2 to Flowers Foods’ Current Report on Form 8-K, dated May 28, 2020, File No. 1-16247).
4.1		—	Form of Share Certificate of Common Stock of Flowers Foods, Inc. (Incorporated by reference to Exhibit 4.1 to Flowers Foods’ Annual Report on Form 10-K, dated February 29, 2012, File No. 1-16247).
4.2		—	Indenture, dated as of April 3, 2012, by and between Flowers Foods, Inc. and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to Flowers Foods’ Current Report on Form 8-K, dated April 3, 2012, File No. 1-16247).
4.3		—	Officer’s Certificate pursuant to Section 2.02 of the Indenture (Incorporated by reference to Exhibit 4.2 to Flowers Foods’ Current Report on Form 8-K, dated April 3, 2012, File No. 1-16247).
4.4		—	Form of 4.375% Senior Notes due 2022 (Incorporated by reference to Exhibit 4.3 to Flowers Foods’ Current Report on Form 8-K, dated April 3, 2012, File No. 1-16247).
4.5		—	Flowers Foods, Inc. 401(k) Retirement Savings Plan, as amended through December 17, 2013 (Incorporated by reference to Exhibit 4.1 to Flowers Foods’ Registration Statement on Form S-8, dated May 21, 2014, File No. 333-196125).
4.6		—	Officer’s Certificate pursuant to Section 2.02 of the Indenture (Incorporated by reference to Exhibit 4.2 to Flowers Foods’ Current Report on Form 8-K, dated September 28, 2016, File No. 1-16247).
4.7		—	Form of 3.500% Senior Notes due 2026 (Incorporated by reference to Exhibit 4.3 to Flowers Foods’ Current Report on Form 8-K, dated September 28, 2016, File No. 1-16247).
4.8	*	—	Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
4.9		—	Officer’s Certificate pursuant to Section 2.02 of the Indenture (Incorporated by reference to Exhibit 4.2 to Flowers Foods’ Current Report on Form 8-K, dated March 9, 2021. File No. 1-16247).
4.10		—	Form of 2.400% Senior Notes due 2031 (Incorporated by reference to Exhibit 4.3 to Flowers Foods’ Current Report on Form 8-K, dated March 9, 2021. File No. 1-16247).
10.01		—	Amended and Restated Credit Agreement, dated as of May 20, 2011, by and among, Flowers Foods, Inc., the Lenders party thereto from time to time, Cooperative Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, Branch Banking and Trust Company, and Regions Bank, as co-documentation agents, Bank of America, N.A., as syndication agent, and Deutsche Bank AG New York Branch, as administrative agent (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Current Report on Form 8-K, dated May 26, 2011, File No. 1-16247).

47

Exhibit
No		Name of Exhibit
10.02	—	First Amendment to Amended and Restated Credit Agreement, dated as of November 16, 2012, by and among Flowers Foods, Inc., the Lenders party thereto and Deutsche Bank AG, New York Branch, as administrative agent, swingline lender and issuing lender (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Current Report on Form 8-K, dated November 21, 2012, File No. 1-16247).
10.03	—	Second Amendment to Amended and Restated Credit Agreement, dated as of April 5, 2013, by and among Flowers Foods, Inc., the Lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent, swingline lender and issuing lender (Incorporated by reference to Exhibit 10.3 to Flowers Foods’ Current Report on Form 8-K, dated April 10, 2013, File No. 1-16247).
10.04	—	Third Amendment to Amended and Restated Credit Agreement, dated as of February 14, 2014, by and among Flowers Foods, Inc., the Lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent, swingline lender and issuing lender (Incorporated by reference to Exhibit 10.2 to Flowers Foods’ Current Report on Form 8-K, dated February 18, 2014, File No. 1-16247).
10.05	—	Fourth Amendment to Amended and Restated Credit Agreement, dated as of April 21, 2015, by and among Flowers Foods, Inc., the Lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent, the swingline lender and issuing lender (Incorporated by reference to Exhibit 10.5 to Flowers Foods’ Quarterly Report on Form 10-Q, dated May 28, 2015, File No. 1-16247).
10.06	—	Fifth Amendment to Amended and Restated Credit Agreement, dated as of April 19, 2016, among Flowers Foods, Inc., the Lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent, the swingline lender and issuing lender (Incorporated by reference to Exhibit 10.3 to Flowers Foods’ Current Report on Form 8-K, dated April 22, 2016, File No. 1-16247).
10.07	—	Sixth Amendment to Amended and Restated Credit Agreement, dated as of November 29, 2017, among Flowers Foods, Inc., the Lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent, the swingline lender and issuing lender (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Current Report on Form 8-K, dated November 30, 2017, File No. 1-16247).
10.08	—	Seventh Amendment to Amended and Restated Credit Agreement, dated as of July 30, 2021, among Flowers Foods, Inc., the Lenders party thereto and Deutsche Bank AG New York Branch, as existing administrative agent, the swingline lender and issuing lender, and Deutsche Bank Trust Company Americas, as successor administrative agent (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Current Report on Form 8-K, dated August 2, 2021, File No. 1-16247).
10.09	—	Receivables Loan, Security and Servicing Agreement, dated as of July 17, 2013, by and among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland,” New York Branch, as facility agent and as a committed lender, certain financial institutions party thereto from time to time, and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as administrative agent  (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Current Report on Form 8-K, dated July 22, 2013, File No. 1-16247).
10.10	—	First Amendment to Receivables Loan, Security and Servicing Agreement, dated as of August 7, 2014, by and among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland,” New York Branch, as facility agent and as a committed lender, and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as administrative agent  (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Current Report on Form 8-K, dated August 12, 2014, File No. 1-16247).
10.11	—	Second Amendment to Receivables Loan, Security and Servicing Agreement, dated as of December 17, 2014, by and among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank,” New York Branch, as facility agent and as a committed lender, and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank”, New York Branch, as administrative agent (Incorporated by reference to Exhibit 10.9 to Flowers Foods’ Annual Report on Form 10-K, dated February 25, 2015, File No. 1-16247).
10.12	—	Third Amendment and Waiver to Receivables Loan, Security and Servicing Agreement, dated as of August 20, 2015, by and among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation B.V., Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank”, New York Branch, as facility agent and as a committed lender, PNC Bank, National Association, as facility agent and as a committed lender, and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank,” New York Branch, as administrative agent (Incorporated by reference to Exhibit 10.11 to Flowers Foods’ Quarterly Report on Form 10-Q, dated November 12, 2015, File No. 1-16247).
10.13	—	Fourth Amendment to Receivables Loan, Security and Servicing Agreement, dated as of September 30, 2016, by and among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation B.V., Coöperatieve Rabobank U.A., as facility agent and as a committed lender, PNC Bank, National Association, as facility agent and as a committed lender, and Coöperatieve Rabobank U.A., New York Branch, as administrative agent (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Current Report on Form 8-K, dated October 3, 2016, File No. 1-16247).

48

Exhibit
No			Name of Exhibit
10.14		—	Fifth Amendment to Receivables Loan, Security and Servicing Agreement, dated as of September 28, 2017, among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation B.V., Coöperatieve Rabobank U.A., as facility agent and as a committed lender, PNC Bank, National Association, as facility agent and as a committed lender, and Coöperatieve Rabobank U.A., New York Branch, as administrative agent (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Quarterly Report on Form 10-Q, dated November 8, 2017, File No. 1-16247).
10.15		—	Sixth Amendment to Receivables Loan, Security and Servicing Agreement, dated as of September 27, 2018, among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation B.U., Coöperatieve Rabobank U.A. (f/k/a Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.), as facility agent and committed lender, PNC Bank, National Association, as facility agent and committed lender, and Coöperatieve Rabobank U.A., New York Branch (f/k/a Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., New York Branch), as administrative agent (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Quarterly Report on Form 10-Q, dated November 7, 2018, File No. 1-16247).
10.16		—	Seventh Amendment to Receivables Loan, Security and Servicing Agreement, dated as of September 27, 2019, among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation B.U., Coöperatieve Rabobank U.A. (f/k/a Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.), as facility agent and committed lender, PNC Bank, National Association, as facility agent and committed lender, and Coöperatieve Rabobank U.A., New York Branch (f/k/a Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., New York Branch), as administrative agent (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Quarterly Report on Form 10-Q, dated November 6, 2019, File No. 1-16247).
10.17		—	Eighth Amendment to Receivables Loan, Security and Servicing Agreement, dated as of September 23, 2020, among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation B.V., Coӧperatieve Rabobank U.A. (f/k/a Coӧperatieve Centrale Raiffeisen-Boerenleenbank B.A.), as facility agent for the Nieuw Amsterdam Lender Group and as a committed lender, Regions Bank, as facility agent for the Regions Bank Lender Group and as a committed lender, and Coӧperatieve Rabobank U.A., New York Branch (f/k/a Coӧperatieve Centrale Raiffeisen-Boerenleenbank B.A., New York Branch), as administrative agent (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Quarterly Report on Form 10-Q, dated November 5, 2020, File No. 1-16247).
10.18		—	Ninth Amendment to Receivables Loan, Security and Servicing Agreement, dated as of September 23, 2021, among Flowers Finance II, LLC, Flowers Foods, Inc., Nieuw Amsterdam Receivables Corporation B.V., Coӧperatieve Rabobank U.A. (f/k/a Coӧperatieve Centrale Raiffeisen-Boerenleenbank B.A.), as facility agent for the Nieuw Amsterdam Lender Group and as a committed lender, Regions Bank, as facility agent for the Regions Bank Lender Group and as a committed lender, and Coӧperatieve Rabobank U.A., New York Branch (f/k/a Coӧperatieve Centrale Raiffeisen-Boerenleenbank B.A., New York Branch), as administrative agent (Incorporated by reference to Exhibit 10.2 to Flowers Foods’ Quarterly Report on Form 10-Q, dated November 12, 2021. File No. 1-16247).
10.19	+	—	Flowers Foods, Inc. 2001 Equity and Performance Incentive Plan, as amended and restated effective as of April 1, 2009 (Incorporated by reference to Annex A to Flowers Foods’ Proxy Statement on Schedule 14A, dated April 24, 2009, File No. 1-16247).
10.20	+	—	Flowers Foods, Inc. Stock Appreciation Rights Plan (Incorporated by reference to Exhibit 10.8 to Flowers Foods’ Annual Report on Form 10-K, dated March 29, 2002, File No. 1-16247).
10.21	+	—	Flowers Foods, Inc. Annual Executive Bonus Plan (Incorporated by reference to Annex B to Flowers Foods’ Proxy Statement on Schedule 14A, dated April 24, 2009, File No. 1-16247).
10.22	+	—	Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Current Report on Form 8-K, dated May 27, 2014, File No. 1-16247).
10.23	+	—	Flowers Foods, Inc. Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.10 to Flowers Foods’ Annual Report on Form 10-K, dated March 29, 2002, File No. 1-16247).
10.24	+	—	Form of Indemnification Agreement, by and between Flowers Foods, Inc., certain executive officers and the directors of Flowers Foods, Inc. (Incorporated by reference to Exhibit 10.14 to Flowers Foods’ Annual Report on Form 10-K, dated March 28, 2003, File No. 1-16247).
10.25	+	—	Flowers Foods, Inc. 2005 Executive Deferred Compensation Plan, effective as of January 1, 2005 (Incorporated by reference to Exhibit 4.7 of Flowers Foods’ Registration Statement on Form S-8, dated December 29, 2008, File No. 333-156471).
10.26	+	—	Flowers Foods, Inc. Change of Control Plan, effective as of February 23, 2012 (Incorporated by reference to Exhibit 10.1 to Flowers Foods’ Current Report on Form 8-K, dated February 29, 2012, File No. 1-16247).
10.27	+	—	Form of 2019 Performance Stock Agreement, by and between Flowers Foods, Inc. and certain executive officers of Flowers Foods, Inc. (Incorporated by reference to Exhibit 10.27 to Flowers Foods’ Annual Report on Form 10-K, dated February 20, 2019, File No. 1-16247).

49

Exhibit
No			Name of Exhibit
10.28	+	—	Form of 2019 Time Based Restricted Stock Agreement, by and between Flowers Foods, Inc. and certain executive officers of Flowers Foods, Inc. (Incorporated by reference to Exhibit 10.28 to Flowers Foods’ Annual Report on Form 10-K, dated February 20, 2019, File No. 1-16247).
10.29	+	—	Form of 2020 Performance Stock Agreement, by and between Flowers Foods, Inc. and certain executive officers of Flowers Foods, Inc. (Incorporated by reference to Exhibit 10.30 to Flowers Foods’ Annual Report on Form 10-K, dated February 19, 2020, File No. 1-16247).
10.30	+	—	Form of 2020 Time Based Restricted Stock Agreement, by and between Flowers Foods, Inc. and certain executive officers of Flowers Foods, Inc. (Incorporated by reference to Exhibit 10.31 to Flowers Foods’ Annual Report on Form 10-K, dated February 19, 2020, File No. 1-16247).
10.31	+	—	Form of 2021 Performance Stock Agreement, by and between Flowers Foods, Inc. and certain executive officers of Flowers Foods, Inc. (Incorporated by reference to Exhibit 10.29 to Flowers Foods’ Annual Report on Form 10-K, dated February 24, 2021, File No. 1-16247).
10.32	+	—	Form of 2021 Time Based Restricted Stock Agreement, by and between Flowers Foods, Inc. and certain executive officers of Flowers Foods, Inc. (Incorporated by reference to Exhibit 10.30 to Flowers Foods’ Annual Report on Form 10-K, dated February 24, 2021, File No. 1-16247).
10.33	+*	—	Form of 2022 Performance Stock Agreement, by and between Flowers Foods, Inc. and certain executive officers of Flowers Foods, Inc.
10.34	+*	—	Form of 2022 Time Based Restricted Stock Agreement, by and between Flowers Foods, Inc. and certain executive officers of Flowers Foods, Inc.
21	*	—	Subsidiaries of Flowers Foods, Inc.
23	*	—	Consent of Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP
31.1	*	—	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	*	—	Certification of Chief Financial Officer and Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	*	—	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by A. Ryals McMullian, President and Chief Executive Officer, R. Steve Kinsey, Chief Financial Officer and Chief Accounting Officer for the fiscal year ended January 1, 2022.
101.INS	*	—	Inline XBRL Instance Document.
101.SCH	*	—	Inline XBRL Taxonomy Extension Schema Linkbase.
101.CAL	*	—	Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	*	—	Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB	*	—	Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE	*	—	Inline XBRL Taxonomy Extension Presentation Linkbase.
104		—	The cover page from Flowers Foods’ Annual Report on Form 10-K for the fiscal year ended January 1, 2022 has been formatted in Inline XBRL.

* Filed herewith

+ Management contract or compensatory plan or arrangement

Item 16. Form 10-K Summary

The company has elected not to provide summary information.

50

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Flowers Foods, Inc. has duly caused this Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on this 23rd day of February, 2022.

FLOWERS FOODS, INC.

/s/    A. RYALS MCMULLIAN

A.    Ryals McMullian

President and

Chief Executive Officer

/s/    R. STEVE KINSEY

R. Steve Kinsey

Chief Financial Officer and

Chief Accounting Officer

51

Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed below by the following persons on behalf of Flowers Foods, Inc. and in the capacities and on the dates indicated.

Signature	Title	Date
/s/    A. RYALS MCMULLIAN	President and Chief Executive Officer and Director	February 23, 2022
A. Ryals McMullian
/s/    R. STEVE KINSEY	Chief Financial Officer and Chief Accounting Officer	February 23, 2022
R. Steve Kinsey
/s/    GEORGE E. DEESE	Chairman	February 23, 2022
George E. Deese
/s/    EDWARD J. CASEY, JR	Director	February 23, 2022
Edward J. Casey, Jr.
/s/    THOMAS C. CHUBB III	Director	February 23, 2022
Thomas C. Chubb III
/s/    RHONDA O. GASS	Director	February 23, 2022
Rhonda O. Gass
/s/    BENJAMIN H. GRISWOLD IV	Director	February 23, 2022
Benjamin H. Griswold IV
/s/    MARGARET G. LEWIS	Director	February 23, 2022
Margaret G. Lewis
/s/    W. JAMESON MCFADDEN	Director	February 23, 2022
W. Jameson McFadden
/s/    JAMES T. SPEAR	Director	February 23, 2022
James T. Spear
/s/    MELVIN T. STITH, PH.D.	Director	February 23, 2022
Melvin T. Stith, Ph.D.
/s/   TERRY S. THOMAS	Director	February 23, 2022
Terry S. Thomas
/s/    C. MARTIN WOOD III	Director	February 23, 2022
C. Martin Wood III

52

FLOWERS FOODS, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets at January 1, 2022 and January 2, 2021	F-4
Consolidated Statements of Income for Fiscal 2021, Fiscal 2020, and Fiscal 2019	F-5
Consolidated Statements of Comprehensive Income for Fiscal 2021, Fiscal 2020, and Fiscal 2019	F-6
Consolidated Statements of Changes in Stockholders’ Equity for Fiscal 2021, Fiscal 2020, and Fiscal 2019	F-7
Consolidated Statements of Cash Flows for Fiscal 2021, Fiscal 2020, and Fiscal 2019	F-8
Notes to Consolidated Financial Statements	F-9

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Flowers Foods, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Flowers Foods, Inc. and its subsidiaries (the “Company”) as of January 1, 2022 and January 2, 2021, and the related consolidated statements of income, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended January 1, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of January 1, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 1, 2022 and January 2, 2021, and the results of its operations and its cash flows for each of the three years in the period ended January 1, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 1, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-2

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Workers’ Compensation Reserves

As described in Note 2 to the consolidated financial statements, the Company is self-insured for various levels of general liability, including workers’ compensation. As of January 1, 2022, self- insurance reserves totaled approximately $28.9 million, of which workers’ compensation reserves represent a portion of the total balance. Management estimates workers’ compensation reserves based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends, and projected settlements of incurred but not reported claims are estimated based on pending claims, historical trends and industry trends related to expected losses and actual reported losses and key assumptions, including loss development factors and expected loss rates.

The principal considerations for our determination that performing procedures relating to workers’ compensation reserves is a critical audit matter are (i) the significant judgment by management when developing the estimated workers’ compensation

reserves; (ii) a high degree of auditor judgment and subjectivity in performing procedures and in evaluating audit evidence relating to the estimated workers’ compensation reserves and management’s significant assumptions related to loss development factors and expected loss rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.  

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s estimate of workers’ compensation reserves, including controls over the development of significant assumptions related to the determination of the loss development factors and expected loss rates. These procedures also included, among others, obtaining and evaluating the Company’s workers’ compensation plan documents and testing management’s process for estimating the workers’ compensation reserves. Testing management’s process included (i) evaluating the reasonableness of significant assumptions, including the loss development factors and expected loss rates used by management to estimate workers’ compensation reserves, (ii) testing the completeness and accuracy of incurred and paid claims data used in management’s workers’ compensation reserves and (iii) using professionals with specialized skill and knowledge to assist in evaluating the appropriateness of the actuarial valuation methods and the reasonableness of loss development factors and expected loss rates.

/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia

February 23, 2022

We have served as the Company’s auditor since at least 1969. We have not been able to determine the specific year we began serving as auditor of the Company.

F-3

FLOWERS FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	January 1, 2022			January 2, 2021
	(Amounts in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	185,871		$	307,476
Accounts and notes receivable, net of allowances of $15,398 and $15,162, respectively		305,196			300,001
Inventories:
Raw materials		54,458			48,977
Packaging materials		24,580			20,744
Finished goods		55,942			55,508
		134,980			125,229
Spare parts and supplies		68,479			68,108
Other		51,592			37,389
Total current assets		746,118			838,203
Property, plant and equipment:
Land		112,729			93,037
Buildings		550,947			484,805
Machinery and equipment		1,256,821			1,226,403
Furniture, fixtures and transportation equipment		184,528			170,150
Construction in progress		87,367			59,137
		2,192,392			2,033,532
Less: accumulated depreciation		(1,393,664	)		(1,334,139	)
		798,728			699,393
Financing lease right-of-use assets		3,476			5,419
Operating lease right-of-use assets		289,013			328,712
Notes receivable from independent distributor partners		154,310			176,412
Assets held for sale		11,369			5,641
Other assets		9,623			9,081
Goodwill		545,244			545,244
Other intangible assets, net		695,432			714,918
Total assets	$	3,253,313		$	3,323,023
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	—		$	—
Current maturities of financing leases		1,584			1,769
Current maturities of operating leases		46,390			50,139
Accounts payable		268,500			225,918
Other accrued liabilities		203,443			226,279
Total current liabilities		519,917			504,105
Long-term debt and right-of-use lease liabilities:
Noncurrent long-term debt		890,609			960,103
Noncurrent financing lease obligations		1,910			3,590
Noncurrent operating lease obligations		250,638			290,264
Total long-term debt and right-of-use lease liabilities		1,143,157			1,253,957
Other liabilities:
Post-retirement/post-employment obligations		7,249			10,049
Deferred taxes		133,757			128,259
Other long-term liabilities		37,959			53,659
Total other long-term liabilities		178,965			191,967
Commitments and contingencies
Stockholders’ equity:
Preferred stock — $100 stated par value, 200,000 authorized and none issued		—			—
Preferred stock — $.01 stated par value, 800,000 authorized and none issued		—			—
Common stock — $.01 stated par value and $.001 current par value;    500,000,000 authorized shares; 228,729,585 issued shares		199			199
Treasury stock — 17,334,804 and 17,126,261 shares, respectively		(232,304	)		(225,405	)
Capital in excess of par value		678,414			659,682
Retained earnings		962,378			932,094
Accumulated other comprehensive income		2,587			6,424
Total stockholders’ equity		1,411,274			1,372,994
Total liabilities and stockholders’ equity	$	3,253,313		$	3,323,023

See Accompanying Notes to Consolidated Financial Statements

F-4

FLOWERS FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	Fiscal 2021			Fiscal 2020			Fiscal 2019
	52 weeks			53 weeks			52 weeks
	(Amounts in thousands, except per share data)
Sales	$	4,330,767		$	4,387,991		$	4,123,974
Materials, supplies, labor and other production costs (exclusive of    depreciation and amortization shown separately below)		2,175,247			2,196,142			2,155,709
Selling, distribution and administrative expenses		1,719,797			1,693,387			1,575,122
Depreciation and amortization		136,559			141,384			144,228
Restructuring and related impairment charges		—			35,483			23,524
Loss (recovery) on inferior ingredients		944			107			(37	)
Multi-employer pension plan withdrawal costs		3,300			—			—
Income from operations		294,920			321,488			225,428
Interest expense		31,534			38,790			38,847
Interest income		(23,533	)		(26,696	)		(27,750	)
Loss on extinguishment of debt		16,149			—			—
Pension plan settlement and curtailment loss		403			108,757			—
Other components of net periodic pension and postretirement benefits    (credit) expense		(405	)		(74	)		2,248
Income before income taxes		270,772			200,711			212,083
Income tax expense		64,585			48,393			47,545
Net income	$	206,187		$	152,318		$	164,538
Net income per common share:
Basic:
Net income per common share	$	0.97		$	0.72		$	0.78
Weighted average shares outstanding		211,840			211,782			211,606
Diluted:
Net income per common share	$	0.97		$	0.72		$	0.78
Weighted average shares outstanding		213,033			212,345			211,974
Cash dividends paid per common share	$	0.8300		$	0.7900		$	0.7500

See Accompanying Notes to Consolidated Financial Statements

F-5

FLOWERS FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Fiscal 2021			Fiscal 2020		Fiscal 2019
	52 weeks			53 weeks		52 weeks
	(Amounts in thousands)
Net income	$	206,187		$	152,318	$	164,538
Other comprehensive income, net of tax:
Pension and postretirement plans:
Settlement and curtailment loss		302			81,277		—
Net actuarial gain (loss) for the period		788			18,588		(8,000	)
Current year prior service credit		1,661			—		—
Amortization of prior service cost included in net income		41			83		259
Amortization of actuarial loss included in net income		400			1,082		5,099
Pension and postretirement plans, net of tax		3,192			101,030		(2,642	)
Derivative instruments:
(Loss) gain on effective portion of derivatives		(5,348	)		9,298		8,457
(Gain) loss reclassified to net income		(1,681	)		2,116		(2,664	)
Derivative instruments, net of tax		(7,029	)		11,414		5,793
Other comprehensive (loss) income, net of tax		(3,837	)		112,444		3,151
Comprehensive income	$	202,350		$	264,762	$	167,689

See Accompanying Notes to Consolidated Financial Statements

F-6

FLOWERS FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common Stock				Capital						Accumulated Other			Treasury Stock
	Number of Shares Issued		Par Value		in Excess of Par Value			Retained Earnings			Comprehensive Loss			Number of Shares			Cost			Total
	(Amounts in thousands, except share data)
Balances at December 29, 2018		228,729,585	$	199	$	653,477		$	945,410		$	(109,171	)		(17,834,378	)	$	(231,648	)		1,258,267
Net income									164,538												164,538
Derivative instruments, net of tax (Note 10)												5,793									5,793
Pension and postretirement plans, net of tax (Note 20)												(2,642	)								(2,642	)
Stock repurchases															(336,088	)		(7,054	)		(7,054	)
Issuance of deferred stock awards						(911	)								69,377			911			—
Amortization of share-based compensation awards						7,430															7,430
Performance-contingent restricted stock awards issued (Note 18)						(11,498	)								885,123			11,498			—
Issuance of deferred compensation						(6	)								452			6			—
Cumulative effect adjustment for adoption of lease standard, net    of tax									(2,915	)											(2,915	)
Dividends paid on vested performance-contingent restricted stock    and deferred share awards									(1,361	)											(1,361	)
Dividends paid — $0.7500 per common share									(158,626	)											(158,626	)
Balances at December 28, 2019		228,729,585	$	199	$	648,492		$	947,046		$	(106,020	)	$	(17,215,514	)	$	(226,287	)	$	1,263,430
Net income									152,318												152,318
Derivative instruments, net of tax (Note 10)												11,414									11,414
Pension and postretirement plans, net of tax (Note 20)												101,030									101,030
Stock repurchases															(37,433	)		(783	)		(783	)
Issuance of deferred stock awards						(651	)								49,539			651			—
Amortization of share-based compensation awards						12,855															12,855
Time-based restricted stock awards issued (Note 18)						(975	)								74,204			975			—
Issuance of deferred compensation						(39	)								2,943			39			—
Dividends paid on vested share-based payments awards									(109	)											(109	)
Dividends paid — $0.7900 per common share									(167,161	)											(167,161	)
Balances at January 2, 2021		228,729,585	$	199	$	659,682		$	932,094		$	6,424			(17,126,261	)	$	(225,405	)	$	1,372,994
Net income									206,187												206,187
Derivative instruments, net of tax (Note 10)												(7,029	)								(7,029	)
Pension and postretirement plans, net of tax (Note 20)												3,192									3,192
Stock repurchases															(406,840	)		(9,510	)		(9,510	)
Issuance of deferred stock awards						(636	)								48,231			636			—
Amortization of share-based compensation awards						21,343															21,343
Time-based restricted stock awards issued (Note 18)						(1,798	)								136,652			1,798			—
Issuance of deferred compensation						(177	)								13,414			177			—
Dividends paid on vested share-based payments awards									(234	)											(234	)
Dividends paid — $.8300 per common share									(175,669	)											(175,669	)
Balances at January 1, 2022		228,729,585	$	199	$	678,414		$	962,378		$	2,587			(17,334,804	)	$	(232,304	)	$	1,411,274

See Accompanying Notes to Consolidated Financial Statements

F-7

FLOWERS FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Fiscal 2021			Fiscal 2020			Fiscal 2019
	52 weeks			53 weeks			52 weeks
	(Amounts in thousands)
Cash flows provided by (disbursed for) operating activities:
Net income	$	206,187		$	152,318		$	164,538
Adjustments to reconcile net income to net cash provided by operating activities:
Restructuring and related impairment charges		—			23,627			21,062
Depreciation and amortization		136,559			141,384			144,228
Stock-based compensation		21,343			12,855			7,430
(Gain) loss reclassified from accumulated other comprehensive income to net income		(2,115	)		2,675			(3,707	)
Deferred income taxes		6,777			(31,154	)		18,609
Provision for inventory obsolescence		16			3,601			337
Allowances for accounts receivable		6,071			11,344			11,034
Pension and postretirement plans expense		1,306			109,823			3,234
Other		2,473			(924	)		1,579
Qualified pension plan contributions		—			(7,600	)		(2,500	)
Changes in operating assets and liabilities, net of acquisitions and disposals:
Accounts receivable, net		(10,600	)		(25,021	)		(7,809	)
Inventories, net		(9,767	)		(1,771	)		(4,774	)
Hedging activities, net		(4,967	)		15,829			10,289
Accounts payable		38,076			(5,772	)		(14,155	)
Other assets and accrued liabilities		(46,749	)		53,250			17,557
Net cash provided by operating activities		344,610			454,464			366,952
Cash flows provided by (disbursed for) investing activities:
Purchases of property, plant and equipment		(135,964	)		(97,929	)		(103,685	)
Repurchase of independent distributor territories		(4,585	)		(3,114	)		(2,705	)
Cash paid at issuance of notes receivable		(12,135	)		(10,660	)		(22,644	)
Principal payments from notes receivable		31,996			32,153			29,173
Acquisition of trademark		(10,200	)		—			—
Proceeds from sales of property, plant and equipment		2,995			5,368			2,649
Purchase of leased warehouses		(64,689	)		—			—
Other investing activities		1,144			190			119
Net cash disbursed for investing activities		(191,438	)		(73,992	)		(97,093	)
Cash flows provided by (disbursed for) financing activities:
Dividends paid, including dividends on share-based payment awards		(175,903	)		(167,270	)		(159,987	)
Contingent consideration		—			(4,700	)		—
Payments for debt issuance costs		(6,022	)		(206	)		(110	)
Stock repurchases		(9,510	)		(783	)		(7,054	)
Change in bank overdrafts		261			3,134			3,217
Proceeds from debt borrowings		497,570			484,900			609,250
Debt obligation payments		(579,428	)		(392,400	)		(723,500	)
Payments on financing leases		(1,745	)		(6,715	)		(5,937	)
Net cash disbursed for financing activities		(274,777	)		(84,040	)		(284,121	)
Net (decrease) increase in cash and cash equivalents		(121,605	)		296,432			(14,262	)
Cash and cash equivalents at beginning of period		307,476			11,044			25,306
Cash and cash equivalents at end of period	$	185,871		$	307,476		$	11,044
Schedule of non-cash investing and financing activities:
Issuance of executive deferred compensation plan common stock	$	177		$	39		$	6
Right-of-use assets obtained in exchange for new financing lease liabilities	$	37		$	79		$	9,854
Right-of-use assets obtained in exchange for new operating lease liabilities	$	55,869		$	16,022		$	44,585
Issuance of notes receivable on new distribution territories, net	$	21,008		$	25,029		$	50,532
Distributor routes sold with deferred gains, net	$	241		$	207		$	241
Purchase of property, plant and equipment included in accounts payable	$	9,124		$	4,662		$	5,983
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	52,620		$	35,920		$	36,430
Income taxes paid, net of refunds of $305, $917 and $460, respectively	$	69,401		$	68,758		$	39,121

See Accompanying Notes to Consolidated Financial Statements

F-8

FLOWERS FOODS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

General.    The accompanying Consolidated Financial Statements of Flowers Foods, Inc. (the “company”, “Flowers Foods”, “Flowers”, “us”, “we”, or “our”) have been prepared by the company’s management in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Reporting Segment.  The company has one operating segment based on the nature of products the company sells, intertwined production and distribution model, the internal management structure and information that is regularly reviewed by the chief executive officer (“CEO”), who is the chief operating decision maker, for the purpose of assessing performance and allocating resources.

Note 2. Summary of Significant Accounting Policies

Basis of Consolidation.    The Consolidated Financial Statements include the accounts of the company and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation.

Use of Estimates.    The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fiscal Year End.    The company operates on a 52-53 week fiscal year ending the Saturday nearest December 31. Fiscal 2021 consisted of 52 weeks, Fiscal 2020 consisted of 53 weeks, and Fiscal 2019 consisted of 52 weeks.

Revenue Recognition.    Revenue is recognized when obligations under the terms of a contract with our customers are satisfied. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.  The company records both direct and estimated reductions to gross revenue for customer programs and incentive offerings at the time the incentive is offered or at the time of revenue recognition for the underlying transaction that results in progress by the customer towards earning the incentive. These allowances include price promotion discounts, coupons, customer rebates, cooperative advertising, and product returns. Consideration payable to a customer is recognized at the time control transfers and is a reduction to revenue.   The recognition of costs for promotion programs involves the use of judgment related to performance and redemption estimates. Estimates are made based on historical experience and other factors. Price promotion discount expense is recorded as a reduction to gross sales when the discounted product is sold to the customer.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in our selling, distribution, and administrative expenses line item on the Consolidated Statements of Income.

The company’s production facilities deliver products to independent distributor partners (“IDP” or “IDPs”), who sell and deliver those products to outlets of retail accounts that are within the IDPs’ defined geographic territory. The IDPs sell products using either scan-based trading (“SBT”) technology, authorized charge tickets, or cash sales.  

SBT technology allows the retailer to take ownership of our products when the consumer purchases the products rather than at the time they are delivered to the retailer. Control of the inventory does not transfer upon delivery to the retailer because the company controls the risks and rights until the product is scanned at the reseller’s register.  Each of the company’s products is considered distinct because the resellers expect each item to be a performance obligation.  The company’s performance obligations are satisfied at the point in time when the end consumer purchases the product because each product is considered a separate performance obligation. Consequently, revenue is recognized at a point in time for each scanned item.  The company has concluded that we are the principal.

In Fiscal 2021, 2020, and 2019, the company recorded $2.2 billion, $2.3 billion, and $1.9 billion, respectively, in sales through SBT.

SBT is utilized primarily in certain national and regional retail accounts (“SBT Outlet”). Generally, revenue is not recognized by the company upon delivery of our products by the company to the IDP or upon delivery of our products by the IDP to an SBT Outlet, but when our products are purchased by the end consumer. Product inventory in the SBT Outlet is reflected as inventory on the Consolidated Balance Sheets.

F-9

The IDP performs a physical inventory of products at each SBT Outlet weekly and reports the results to the company. The inventory data submitted by the IDP for each SBT Outlet is compared with the product delivery data. Product delivered to a SBT Outlet that is not recorded as inventory in the product delivery data has been purchased by the consumer/customer of the SBT Outlet and is recorded as sales revenue by the company. 

Non-SBT sales are classified as either authorized charge sales or cash sales.  The company provides marketing support to the IDP for authorized charge sales but does not provide marketing support to the IDP for cash sales.  Marketing support includes providing a dedicated account representative, resolving complaints, and accepting responsibility for product quality which collectively define how to manage the relationship.  Revenue is recognized at a point in time for non-SBT sales.  

The company retains inventory risk, establishes negotiated special pricing, and fulfills the contractual obligations for authorized charge sales.  The company is the principal, the IDP is the agent, and the reseller is the customer.  Revenue is recognized for authorized charge sales when the product is delivered to the customer because the company has satisfied its performance obligations.

Cash sales occur when the IDP is the end customer.  The IDP maintains accounts receivable, inventory and fulfillment risk for cash sales.  The IDP also controls pricing for the resale of cash sale products.  The company is the principal and the IDP is the customer, and an agent relationship does not exist.  The discount paid to the IDP for cash sales is recorded as a reduction to revenue.  Revenue is recognized for cash sales when the company’s products are delivered to the IDP because the company has satisfied its performance obligations.  

Certain sales are under contracts and include a formal ordering system.  Orders are placed primarily using purchase orders (“PO”) or electronic data interchange information.  Each PO, together with the applicable master supply agreement, is determined to be a separate contract.  Product is delivered via contract carriers engaged by either the company or the customer with shipping terms provided in the PO.

Each unit sold, for all product categories, is a separate performance obligation.  Each unit is considered distinct because the customer can benefit from each unit by selling each one separately to the end consumer.  Additionally, each unit is separately identifiable in the PO.  Products are delivered either freight-on-board (“FOB”) shipping or destination.  The company’s right to payment is at the time our products are obtained from our warehouse for FOB shipping deliveries.  The right to payment for FOB destination deliveries occurs after the products are delivered to the customer.  Revenue is recognized at a point in time when control transfers.  The company pays commissions to brokers who obtain contracts with customers.  Commissions are paid on the total value of the contract, which is determined at contract inception and is based on expected future activity.  Broker commissions will not extend beyond a one-year term because each product is considered a separate order in the PO.

The company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the company otherwise would have recognized is one year or less. These costs are included in our selling, distribution, and administrative expenses line item on the Consolidated Statements of Income.

The company disaggregates revenue by sales channel.  Our sales channels are branded retail, store branded retail, and non-retail and other.  The non-retail and other channel includes foodservice, restaurants, institutional, vending, thrift stores, and contract manufacturing.  The company does not disaggregate revenue by geographic region, customer type, or contract type.  All revenues are recognized at a point in time.  Sales by sales channel category are as follows for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Branded retail	$	2,875,418	$	2,914,072	$	2,478,669
Store branded retail		534,794		607,741		647,056
Non-retail and other		920,555		866,178		998,249
Total	$	4,330,767	$	4,387,991	$	4,123,974

Cash and Cash Equivalents.    The company considers deposits in banks, certificates of deposits, and short-term investments with original maturities of three months or less, and highly liquid investments that are readily convertible to known amounts of cash to be cash and cash equivalents.

F-10

Accounts and Notes Receivable.    Accounts and notes receivable consist of trade receivables, current portions of distributor notes receivable, and miscellaneous receivables. The company recognizes an allowance for credit losses related to its accounts and notes receivable to present the net amount expected to be collected as of the balance sheet date. The company estimates this allowance based on historical data such as days sales outstanding trends, previous write-offs of balances, and weekly reviews of aged trial balances, among others. Accounts and notes receivable balances are written off when deemed uncollectible and are recognized as a deduction from the allowance for credit losses. Expected recoveries, not to exceed the amount previously written off, are considered in determining the reserve balance at the balance sheet date. Activity in the allowance for doubtful accounts is as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other		Ending Balance
Fiscal 2021	$	15,162	$	6,071	$	5,835	$	15,398
Fiscal 2020	$	9,473	$	11,344	$	5,655	$	15,162
Fiscal 2019	$	5,751	$	11,034	$	7,312	$	9,473

Activity in the allowance for trade accounts receivable credit losses for Fiscal 2021 and 2020 was as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other			Recoveries and other			Ending Balance
Fiscal 2021	$	4,901	$	596	$	(1,018	)	$	(1,927	)	$	2,552
Fiscal 2020	$	2,089	$	2,875	$	(2,319	)	$	2,256		$	4,901

The amounts charged to expense for bad debts in the table above, along with other non-trade accounts receivable amounts, are reported as adjustments to reconcile net income to net cash provided by operating activities in the Consolidated Statements of Cash Flows. The write-offs represent the amounts that are used to reduce the gross accounts and notes receivable at the time the balance due from the customer is written-off.  Walmart/Sam’s Club is our only customer with a balance greater than 10% of outstanding trade receivables.  Their percentage of trade receivables was 19.8% and 18.8%, on a consolidated basis, as of January 1, 2022 and January 2, 2021, respectively.  No other customer accounted for greater than 10% of the company’s outstanding receivables.

Concentration of Credit Risk.    The company performs periodic credit evaluations and grants credit to customers, who are primarily in the grocery and foodservice markets, and generally does not require collateral. Our top 10 customers in Fiscal 2021, 2020, and 2019 accounted for 53.7%, 53.6% and 51.0% of sales, respectively. Our largest customer’s, Walmart/Sam’s Club, weighted percent of sales for Fiscal 2021, 2020, and 2019 was as follows:

	Percent of Sales
Fiscal 2021		21.2	%
Fiscal 2020		21.2	%
Fiscal 2019		21.1	%

Walmart/Sam’s Club is the only customer to account for greater than 10% of the company’s sales.

Inventories.    Inventories at January 1, 2022 and January 2, 2021 are valued at net realizable value. Costs for raw materials and packaging are recorded at moving average cost. Finished goods inventories are valued at average costs.

The company will write down inventory to net realizable value for estimated unmarketable inventory equal to the difference between the cost of the inventory and the estimated net realizable value for situations when the inventory is impaired by damage, deterioration, or obsolescence.

Activity in the inventory reserve allowance is as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other		Ending Balance
Fiscal 2021	$	1,920	$	16	$	1,652	$	284
Fiscal 2020	$	161	$	3,601	$	1,842	$	1,920
Fiscal 2019	$	143	$	337	$	319	$	161

F-11

The amounts charged to expense for inventory loss in the table above are reported as adjustments to reconcile net income to net cash provided by operating activities in the Consolidated Statements of Cash Flows. The write-offs and other column represents the amounts that are used to reduce gross inventories.

Shipping Costs.    Shipping costs are included in the selling, distribution and administrative line item of the Consolidated Statements of Income. For Fiscal 2021, 2020, and 2019, shipping costs were $1,063.6 million, $1,075.8 million, and $1,010.5 million, respectively, including the costs paid to IDPs.

Spare Parts and Supplies.    The company maintains inventories of spare parts and supplies, which are used for repairs and maintenance of its machinery and equipment. These spare parts and supplies allow the company to react quickly in the event of a mechanical breakdown. These parts are valued using the moving average method and are expensed as the part is used. Periodic physical inventories of the parts are performed, and the value of the parts is adjusted for any obsolescence or difference from the physical inventory count.

Assets Held for Sale.  Assets to be sold are classified as held for sale in the period all the required criteria are met.  The company generally has three types of assets classified as held for sale.  These include distribution rights, plants and depots/warehouses, and other equipment.  See Note 8, Assets Held for Sale, for these amounts by classification.  

Though under no obligation to do so, the company repurchases distribution rights from and sells distribution rights to IDPs from time to time. At the time the company purchases distribution rights from an IDP, the fair value purchase price of the distribution right is recorded as “Assets Held for Sale”. Upon the sale of the distribution rights to a new IDP, the new distributor franchisee/owner may choose how he/she desires to finance the purchase of the business.  If the new distributor chooses to use optional financing via a company-related entity, a note receivable of up to ten years is recorded for the financed amount with a corresponding credit to assets held for sale to relieve the carrying amount of the territory. Any difference between the selling price of the business and the distribution rights’ carrying value, if any, is recorded as a gain or a loss in selling, distribution and administrative expenses because the company considers the IDP activity a cost of distribution. This gain is recognized over the term of the outstanding notes receivable as payments are received from the IDP.  In instances where a distribution right is sold for less than its carrying value, a loss is recorded at the date of sale and any impairment of a distribution right held for sale is recorded at such time when the impairment occurs. The deferred gains were $19.7 million and $23.9 million at January 1, 2022 and January 2, 2021, respectively, and are recorded in other short and long-term liabilities on the Consolidated Balance Sheets. The company recorded net gains of $1.6 million during Fiscal 2021, $5.1 million during Fiscal 2020 and $4.1 million during Fiscal 2019 related to the sale of distribution rights as a component of selling, distribution and administrative expenses.  The gains recorded during Fiscal 2021 included a loss of $4.7 million of repurchase obligations of distribution rights related to a legal settlement.  See Note 22, Commitments and Contingencies, for details on this settlement.

Property, Plant and Equipment and Depreciation.    Property, plant and equipment is recognized at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the depreciable assets.

The table below presents the range of estimated useful lives by property, plant and equipment class.

	Useful life term (years)
Asset Class	Low	High
Buildings	10	40
Machinery and equipment	3	25
Furniture, fixtures and transportation equipment	3	15

Property recorded as leasehold improvements is amortized over the shorter of the lease term or the estimated useful life of the leased property.

Depreciation expense, excluding amortization of right-of-use financing leases, for Fiscal 2021, 2020, and 2019 was as follows (amounts in thousands):

	Depreciation expense
Fiscal 2021	$	103,949
Fiscal 2020	$	103,490
Fiscal 2019	$	107,891

F-12

The company had no capitalized interest during Fiscal 2021, 2020, and 2019. The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and accumulated depreciation of assets are eliminated from the respective accounts. Any gain or loss is reflected in the company’s Consolidated Statements of Income and is included in adjustments to reconcile net income to net cash provided by operating activities in the Consolidated Statements of Cash Flows.

Leases.  At the beginning of our Fiscal 2019, the company adopted the new standard using the modified retrospective transition method, which required companies to recognize lease liabilities and a right of use asset for virtually all leases on the balance sheet.  The impact at adoption was an increase to assets of $387.3 million and an increase to liabilities of $391.9 million at the beginning of our Fiscal 2019.

The company’s leases consist of the following types of assets: bakeries, corporate office space, warehouses, bakery equipment, transportation equipment, and IT equipment (debt is discussed separately in Note 14, Debt and Other Commitments).      

Real estate and equipment contracts occasionally contain multiple lease and non-lease components. Generally, non-lease components represent maintenance and utility related charges, and are primarily minor to the overall value of applicable contracts. These contracts also contain fixed payments with stated rent escalation clauses or fixed payments based on an index such as CPI. Additionally, some contracts contain tenant improvement allowances, rent holidays, lease premiums, and contingent rent provisions (which are treated as variable lease payments). Building and/or office space leases generally require the company to pay for common area maintenance (CAM), insurance, and taxes that are not included in the base rental payments, with the majority of these leases treated as net leases, and the remainder treated as gross or modified gross leases.

The lease term for real estate leases primarily ranges from one to 22 years, with a few leases that are month to month, and accounted for as short-term leases. See discussion on short-term leases below. The term of bakery equipment leases primarily ranges from less than a year up to seven years. Transportation equipment generally has terms of less than one year up to seven years.  IT equipment is typically leased from less than a year up to five years. Certain equipment (i.e., equipment subject to management contracts) and IT equipment leases have terms shorter than a year and are accounted for as short-term leases. See discussion on short-term leases below.

These contracts may contain renewal options for periods of one month up to 10 years at fixed percentages of market pricing, with some that are reasonably certain of exercise. For those contracts that contain leases, the company recognizes renewal options as part of right-of-use assets and lease liabilities. All other renewal and termination options are not reasonably certain of exercise or occurrence as of January 1, 2022.

These contracts may also contain right of first offer purchase options, along with expansion options that are not reasonably certain of exercise. Additionally, these contracts do not contain residual value guarantees, and there are no other restrictions or covenants in the contracts.

For these real estate contracts, the company’s exclusive use of specified real estate for a specific term and for consideration resulted in the company treating these contracts as leases under the new standard.

For those contracts that contain leases of buildings and land, the company has elected to not separate land components from leases of specified property, plant, and equipment, as it was determined to have no effect on lease classification for any lease component, and the amounts recognized for the land lease components would have been immaterial.

These contracts may also contain end-term purchase options, whereby, the company may purchase the assets for stated pricing at the lesser of fair market value or a percentage of original asset cost. Yet, these purchase options were determined to not be reasonably certain of exercise or occurrence as of January 1, 2022. Additionally, these contracts do not contain residual value guarantees, and there are no other restrictions or covenants in the contracts.

The company’s ability to make those decisions that most effect the economic benefits derived from the use of the equipment, accompanied by receiving substantially all outputs and utility from the use of the equipment resulted in the company accounting for these contracts as leases.

These leases are classified as operating leases under the new standard because real estate leases do not transfer ownership at the end of the lease term, assets are not of such a specialized nature that real estate would not have alternative uses to lessors at the end of the lease term, lease terms do not represent a major part of the total useful life of real estate, and the present value of lease payments do not represent substantially all the fair value of leased assets at commencement.

F-13

Short-term leases

The company has also entered into short-term leases of certain real estate assets, along with IT equipment, and various equipment used for short-term bakery needs through equipment placement or service contracts that require purchase of consumables. These leases extend for periods of one to 12 months. Lease term and amounts of payments are generally fixed. There are no purchase options present, however, there generally are renewals that could extend lease terms for additional periods. Generally, renewal options, as they cannot be unilaterally exercised, are not reasonably certain of exercise, do not contain residual value guarantees, and there are no other restrictions or covenants in the leases.

Therefore, the company recognizes lease payments from these short-term leases and variable payments on the Consolidated Statements of Income in the period in which obligation for those payments have been incurred.

Modifications and reassessments

During Fiscal 2021 and 2020, the company elected certain renewal options that were not previously certain of exercise. Election of these renewal options resulted in reassessment of lease terms for the applicable leases.

The company included the renewal periods in measurement of lease terms for the applicable leases. Given that rental payments in the renewal periods were fixed, the company also remeasured the lease payments, and reallocated remaining contract consideration to the lease components within the applicable real estate leases. Although the triggering events did not result in changes to lease classification (i.e., all remained operating leases), they did affect the measurement of lease liabilities, right-of-use assets (“ROU assets”), and amounts recognized as lease expense for the applicable real estate leases.

Other significant judgments and assumptions

For all classes of assets, the company primarily used our incremental borrowing rates (“IBR”) to perform lease classification tests and measure lease liabilities because discount rates implicit in the company’s leases were not readily determinable.

Embedded leases

The company maintains a transportation agreement with an entity that transports a portion of the company’s fresh bakery products from the company’s production facilities to outlying distribution centers. The company concluded that this agreement contained embedded leases for the trucks and trailers used to satisfy the service provider’s obligations to the company through December 31, 2020.  On December 31, 2020, a re-measurement event occurred, and a conclusion was reached that these no longer met the requirements of an embedded lease due to a change in the contractual terms to allow for the substitution of assets, among other changes to the terms.  As a result, on January 2, 2021, there were no ROU assets or liabilities associated with the transportation agreement.  The gain on the termination of these embedded leases was $4.1 million.  

During Fiscal 2020 and Fiscal 2019, the company entered into embedded leases for IT equipment that, as of January 1, 2022, were $3.0 million of financing ROU assets and financing ROU liabilities.  As of January 2, 2021, the embedded leases were $4.6 million of financing ROU assets and financing ROU liabilities.  The company did not enter into any embedded leases during Fiscal 2021.

See Note 13, Leases, for our lease quantitative disclosures.

Segment.    The company has one operating segment based on the nature of products the company sells, intertwined production and distribution model, the internal management structure and information that is regularly reviewed by the CEO, who is the chief operating decision maker, for the purpose of assessing performance and allocating resources.

Impairment of Long-Lived Held and Used Assets.    The company determines whether there has been an impairment of long-lived held and used assets when indicators of potential impairment are present. We consider historical performance and future estimated results in our evaluation of impairment. If facts and circumstances indicate that the cost of any long-lived held and used assets may be impaired, an evaluation of recoverability would be performed. If an estimate of the asset’s fair value is required in order to determine if an impairment should be recorded, the estimated future gross, undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount and if lower than the carrying value, a write-down to market value is required.

F-14

There were no restructuring and related impairment charges during Fiscal 2021.  Total impairments (inclusive of property, plant and equipment, notes receivable, spare parts, and ROU assets) for Fiscal 2020 and 2019, and the line item to which each item is recorded in our Consolidated Statements of Income, are presented below (amounts in thousands):

Restructuring and related impairment charges line item	Fiscal 2020		Fiscal 2019
Plant closings	$	5,747	$	5,133
Line and distribution depot closings		629		356
Spare parts		734		174
Lease impairment charges		9,397		—
Impairment of assets	$	16,507	$	5,663

Fiscal 2020

During Fiscal 2020, the company sold three closed bakeries included in assets held for sale and certain idle equipment at other bakeries included in property, plant, and equipment, resulting in the recognition of $5.7 million of impairment charges.  Additionally, the company recognized property, plant, and equipment impairment charges of $0.6 million for line and distribution depot closures and an office building it decided to sell, and $0.7 million for spare parts related to equipment it no longer intended to use.

Additionally, in order to optimize our distribution network, we vacated certain distribution depots during Fiscal 2020, some of which are owned and others that were leased.  

Fiscal 2019

The company recognized impairment charges during the first quarter of Fiscal 2019 related to manufacturing line closures of $0.4 million.  During the second quarter of Fiscal 2019, an impairment charge of $1.3 million was recognized for the Winston-Salem, North Carolina closed plant recorded in assets held for sale.  The company also recognized an impairment charge of $3.9 million during the third quarter of Fiscal 2019 for the Opelika, Alabama plant closure costs.

The company sold the closed plant in Winston-Salem, North Carolina during the third quarter of Fiscal 2019, at which time an additional $0.2 million of spare parts write-offs were recognized.  The company received $1.9 million and recognized a gain of $0.8 million at the time of sale.  The impairment charges and the gain recognized are recorded in the restructuring and related impairment charges line item on our Consolidated Statements of Income.  

See Note 5, Restructuring Activities, for details.

Impairment of Other Intangible Assets.    The company accounts for other intangible assets at fair value. These intangible assets can be either finite or indefinite-lived depending on the facts and circumstances at acquisition.

Finite-lived intangible assets are reviewed for impairment when facts and circumstances indicate that the cost of any finite-lived intangible asset may be impaired. This recoverability test is based on an undiscounted cash flows expected to result from the company’s use and eventual disposition of the asset.  If these cash flows are sufficient to recover the carrying value over the useful life there is no impairment.  Amortization of finite-lived intangible assets occurs over their estimated useful lives. The amortization periods, at origination, range from two years to forty years for these assets. The attribution methods we primarily use are the sum-of-the-year digits for customer relationships and straight-line for other intangible assets.  These finite-lived intangible assets generally include trademarks, customer relationships, non-compete agreements, distributor relationships, and supply agreements.

Identifiable intangible assets that are determined to have an indefinite useful economic life are not amortized. Indefinite-lived intangible assets are tested for impairment, at least annually, using a one-step fair value-based approach or when certain indicators of potential impairment are present. We have elected not to perform the qualitative approach. We also reassess the indefinite-lived classification to determine if it is appropriate to reclassify these assets as finite-lived assets that will require amortization. We consider historical performance and future estimated results in our evaluation of impairment. If facts and circumstances indicate that the cost of any indefinite-lived intangible assets may be impaired, an evaluation of the fair value of the asset is compared to its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recorded for the difference.

F-15

We use the multi-period excess earnings and relief from royalty methods to value these indefinite-lived intangible assets. Fair value is estimated using the future gross, discounted cash flows associated with the asset using the following five material assumptions: (a) discount rate; (b) long-term sales growth rates; (c) forecasted operating margins (not applicable to the relief from royalty method), (d) assumed royalty rate; and (e) market multiples. The method used for impairment testing purposes is consistent with the valuation method employed at acquisition of the intangible asset. These indefinite-lived intangible assets are trademarks acquired in a purchase business combination.

In order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of 2020.  In the fourth quarter of Fiscal 2020, an additional $1.3 million impairment charge was recognized at the time the company decided to cease using one of its regional brands.  These costs are recorded in the restructuring and related impairment charges line item on our Consolidated Statements of Income.

During Fiscal 2019, the company recorded impairment charges of $15.4 million for trademarks impacted by a brand rationalization study which resulted in changing our focus in certain markets from regional brands to national brands to maximize our marketing and advertising campaigns.  See Note 5, Restructuring Activities, for details on these impairments.  Impairments relating to restructuring charges are recorded in the restructuring and related impairment charges line item in our Consolidated Statements of Income.  

The company evaluates useful lives for finite-lived intangible assets to determine if facts or circumstances arise that may impact the estimates of useful lives assigned and the remaining amortization duration.  Indefinite-lived intangible assets that are determined to have a finite useful life are tested for impairment as an indefinite-lived intangible asset prior to commencing amortization.  We determined that an indefinite-lived asset should be reclassified to finite-lived with an attribution period covering our estimate of the assets’ useful life.  These intangible assets were assigned a useful life ranging from 5 years to 40 years.

Future adverse changes in market conditions or poor operating results of underlying intangible assets could result in losses or an inability to recover the carrying value of the intangible assets that may not be reflected in the assets’ current carrying values, thereby possibly requiring an impairment charge in the future.  See Note 9, Goodwill and Other Intangible Assets, for additional disclosure.

Goodwill.    The company accounts for goodwill in a purchase business combination as the excess of the cost over the fair value of net assets acquired. The company tests goodwill for impairment on an annual basis (or an interim basis if a triggering event occurs that indicates the fair value of our single reporting unit may be below its carrying value) using a one-step method. We have elected not to perform the qualitative approach. The company conducts this review during the fourth quarter of each Fiscal year absent any triggering events. We use the following four material assumptions in our fair value analysis: (a) weighted average cost of capital; (b) long-term sales growth rates; (c) forecasted operating margins; and (d) market multiples. No impairment resulted from the annual review performed in Fiscal 2021, 2020, or 2019. See Note 9, Goodwill and Other Intangible Assets, for additional disclosure.

Derivative Financial Instruments.    The disclosure requirements for derivatives and hedging provide investors with an enhanced understanding of: (a) how and why an entity uses derivative instruments and related hedged items, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the company’s objectives and strategies for using derivative instruments and related hedged items, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments and related hedged items, and disclosures about credit-risk-related contingent features in derivative instruments and related hedged items.

The company’s objectives in using commodity derivatives are to add stability to materials, supplies, labor, and other production costs and to manage its exposure to certain commodity price movements. To accomplish this objective, the company uses commodity futures as part of its commodity risk management strategy.  The company’s commodity risk management programs include hedging price risk for wheat, soybean oil, corn, and natural gas primarily using futures contracts.  Commodity futures designated as cash flow hedges involve fixing the price on a fixed volume of a commodity on a specified date. The commodity futures are given up to third parties near maturity to price the physical goods (e.g. flour, sweetener, corn, etc.) required as part of the company’s production.

As required, the company records all derivatives on the Consolidated Balance Sheets at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedged item with the earnings effect of the hedged forecasted transactions in a cash flow hedge.  The company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply, or the company elects not to apply hedge accounting.

F-16

For derivatives designated and that qualify as cash flow hedges of commodity price risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) (“AOCI”) and subsequently reclassified in the period during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. All our commodity derivatives at January 1, 2022 qualified for hedge accounting.  See Note 10, Derivative Financial Instruments, for additional disclosure.

The company routinely transfers amounts from AOCI to earnings as transactions for which cash flow hedges were held occur and impact earnings.  Amounts reclassified out of AOCI to net income that relate to commodity contracts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.   Significant situations which do not routinely occur that could cause transfers from AOCI to earnings are the cancellation of a forecasted transaction for which a derivative was held as a hedge or a significant and material reduction in volume used of a hedged ingredient such that the company is over hedged and must discontinue hedge accounting. During Fiscal 2021, 2020, and 2019 there were no discontinued hedge positions.

The impact to earnings is included in our materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) line item. Changes in the fair value of the asset or liability are recorded as either a current or long-term asset or liability depending on the underlying fair value. Amounts reclassified to earnings for the commodity cash flow hedges are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows. See Note 10, Derivative Financial Instruments, for additional disclosure.

Treasury Stock.    The company records acquisitions of its common stock for treasury at cost. Differences between the proceeds for reissuances of treasury stock and average cost are credited or charged to capital in excess of par value to the extent of prior credits and thereafter to retained earnings. See Note 17, Stockholders’ Equity, for additional disclosure.

Advertising and Marketing Costs.    Advertising and marketing costs are expensed the first time the advertising takes place. Advertising and marketing costs were $77.7 million, $60.4 million, and $48.2 million for Fiscal years 2021, 2020, and 2019, respectively. Advertising and marketing costs are recorded in the selling, distribution and administrative expense line item in our Consolidated Statements of Income.

Stock-Based Compensation.    Stock-based compensation expense for all share-based payment awards granted is determined based on the grant date fair value. The company recognizes compensation costs only for those shares expected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based payment award. The shares issued for exercises and at vesting of the awards are issued from treasury stock. Forfeitures are recognized as they occur.  Shares issued at vesting are recorded as reissuances of treasury stock.  See Note 18, Stock-Based Compensation, for additional disclosure.  Stock-based compensation expense is primarily included in selling, distribution and administrative expense in the Consolidated Statements of Income.

Cloud computing arrangements (“CCA”).  If a CCA includes a software license, the arrangement is within the scope of the internal-use software guidance.  If the CCA does not include a software license (i.e. is hosted), the arrangement is a service contract and the fees for the CCA are recorded as an operating expense.  Capitalized implementation costs are amortized over the term of the associated hosted CCA service on a straight-line basis.  Amortization begins at the time any component of the hosted CCA service is ready for use.  Capitalized implementation costs are presented on the Consolidated Balance Sheets as an other asset.  Amortization charges are presented in the selling, distribution, and administrative expenses line on the Consolidated Statements of Income.

Software Development Costs.    The company expenses internal and external software development costs incurred in the preliminary project stage, and, thereafter, capitalizes costs incurred in developing or obtaining internally used software. Certain costs, such as maintenance and training, are expensed as incurred. Capitalized costs are amortized over a period of three to eight years and are subject to impairment evaluation. An impairment could be triggered if the company determines that the underlying software under review will no longer be used.  The net balance of capitalized software development costs included in plant, property and equipment was $21.1 million and $21.9 million at January 1, 2022 and January 2, 2021, respectively. Amortization expense of capitalized software development costs, which is included in depreciation and amortization expense in the Consolidated Statements of Income, was $9.9 million, $9.3 million, and $10.2 million in Fiscal 2021, 2020, and 2019, respectively.

Income Taxes.    The company accounts for income taxes using the asset and liability method and recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income as a discrete item in the period that includes the enactment date.

F-17

The company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. The company has considered carryback, future taxable income, and prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event the company was to determine that it would be more likely than not able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the valuation allowance would increase income in the period such a determination was made. Likewise, should the company determine that it would not more likely than not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the valuation allowance would decrease income in the period such determination was made.

The company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation process. Interest related to unrecognized tax benefits is recorded within the interest expense line in the accompanying Consolidated Statements of Income. See Note 21, Income Taxes, for additional disclosure.

The deductions column in the table below presents the amounts reduced in the deferred tax asset valuation allowance that were recorded to, and included as part of, deferred tax expense. The additions column represents amounts that increased the allowance.

Activity in the deferred tax asset valuation allowance is as follows (amounts in thousands):

	Beginning Balance		Deductions		Additions		Ending Balance
Fiscal 2021	$	1,030	$	—	$	—	$	1,030
Fiscal 2020	$	703	$	—	$	327	$	1,030
Fiscal 2019	$	364	$	—	$	339	$	703

Self-Insurance Reserves.    The company is self-insured for various levels of general liability, auto liability, workers’ compensation, and employee medical and dental coverage. Insurance reserves are calculated based on a combination of an undiscounted basis based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends.  Projected settlements of incurred but not reported claims are estimated based on pending claims, historical trends and industry trends related to expected losses and actual reported losses, and key assumptions, including loss development factors and expected loss rates.

Loss Contingencies.  Loss contingencies are recorded at the time it is probable an asset is impaired, or a liability has been incurred and the amount can be reasonably estimated.  For litigation claims the company considers the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the loss.  Losses are recorded in selling, distribution, and administrative expense in our Consolidated Statements of Income.  

Net Income Per Common Share.    Basic net income per share is computed by dividing net income by the weighted average common shares outstanding for the period. Diluted net income per share is computed by dividing net income by the weighted average common and common equivalent shares outstanding for the period. Common stock equivalents consist of the incremental shares associated with the company’s stock compensation plans, as determined under the treasury stock method. The performance contingent restricted stock awards do not contain a non-forfeitable right to dividend equivalents and are included in the computation for diluted net income per share. Fully vested shares which have a deferral period extending beyond the vesting date are included in the computation for basic net income per share.  See Note 19, Earnings Per Share, for additional disclosure.

Variable Interest Entities.    The incorporated IDPs are not voting interest entities since the company has no direct interest in each entity; however, they qualify as variable interest entities (“VIEs”). The IDPs who are formed as sole proprietorships are excluded from the VIE accounting analysis because sole proprietorships are not within scope for determination of VIE status.  The company typically finances the incorporated IDP and enters into a contract with the incorporated IDP to supply product at a discount for distribution in the IDP’s territory. The combination of the company’s loans to the incorporated IDP and the ongoing supply arrangements with the incorporated IDP provides a level of protection to the equity owners of the various distributorships that would not otherwise be available. However, the company is not considered to be the primary beneficiary of the VIEs.  See Note 15, Variable Interest Entities, for additional disclosure of these VIEs.  

The company also maintains a transportation agreement with an entity that transports a significant portion of the company’s fresh bakery products from the company’s production facilities to outlying distribution centers. The company represents a significant portion of the entity’s revenue. The company reconsidered its relationship with the entity because the entity was sold, and the company has concluded the entity no longer qualifies as a VIE beginning in the second quarter of Fiscal 2019.  Previously, this entity qualified as a VIE, but the company determined it was not the primary beneficiary of the VIE. See Note 15, Variable Interest Entities, for additional disclosure of these VIEs.

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Postretirement Plans.    The company records pension costs and benefit obligations related to its defined benefit plans based on actuarial valuations. These valuations reflect key assumptions determined by management, including the discount rate, expected long-term rate of return on plan assets and mortality. Material changes in pension costs and in benefit obligations may occur in the future due to experience that is different than assumed and changes in these assumptions.  See Note 20, Postretirement Plans, for additional disclosure.

Pension Plan Assets.    The finance committee of the Board of Directors delegated its fiduciary and other responsibilities with respect to the Company’s retirement plans’ investment strategies to the investment committee. The investment committee, which consists of certain members of management, establishes investment guidelines and strategies and regularly monitors the performance of the plans’ assets. The investment committee is responsible for executing these strategies and investing the pension assets in accordance with ERISA and fiduciary standards. The investment objective of the pension plans is to preserve the plans’ capital and maximize investment earnings within acceptable levels of risk and volatility. The investment committee meets on a regular basis with its investment advisors to review the performance of the plans’ assets. Based upon performance and other measures and recommendations from its investment advisors, the investment committee rebalances the plans’ assets to the targeted allocation when considered appropriate.

Fair Value of Financial Instruments.    On March 9, 2021 and September 28, 2016, the company issued $500.0 million of senior notes (the “2031 notes”) and $400.0 million of senior notes (the “2026 notes”), respectively.  On April 3, 2012, the company issued $400.0 million of senior notes (the “2022 notes”) which the company later redeemed on April 8, 2021. These notes are recorded in our financial statements at carrying value, net of debt discount and issuance costs. The debt discount and issuance costs are being amortized over the ten-year term of the note to interest expense. In addition, and for disclosure purposes, the fair value of the notes is estimated using yields obtained from independent pricing sources for similar types of borrowing arrangements and is considered a Level 2 valuation. Additional details are included in Note 16, Fair Value of Financial Instruments.

Research and Development Costs.  The company recorded research and development costs of $5.6 million, $4.0 million, and $4.3 million for Fiscal 2021, 2020, and 2019, respectively.  These costs are recorded as selling, distribution and administrative expenses in our Consolidated Statements of Income.

Other Comprehensive Income (Loss)(“OCI”).    The company reports comprehensive income in two separate but consecutive financial statements. See Note 6, Accumulated Other Comprehensive Income (Loss), for additional required disclosures.

Business Process Improvement Costs .  In the second half of Fiscal 2020, we launched initiatives to transform how we operate our business, which includes upgrading our information system to a more robust platform, as well as investments in e-commerce, autonomous planning, and our “bakery of the future” initiative.  These costs may be expensed as incurred, capitalized, recognized as a cloud computing arrangement, or recognized as a prepaid service contract.  The expensed portion of the consulting costs related to the transformation strategy initiatives incurred in Fiscal 2021 was $31.3 million.  We began planning for the upgrade of our ERP platform and other system related enhancements (the “ERP road mapping”) during the third quarter of Fiscal 2020.  We incurred consulting costs associated with these activities of $4.4 million.  These costs are reflected in the selling, distribution and administrative expenses line item of the Consolidated Statements of Income.

Note 3. Recent Accounting Pronouncements

Pronouncements adopted during Fiscal 2021

In December 2019, the FASB issued guidance which removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes.  The company adopted the new standard as of January 3, 2021, the beginning of our Fiscal 2021. Accounting for franchise taxes required adoption on a retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other applicable provisions were adopted on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements and disclosures.  

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848).” This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives, and other contracts, and the optional expedients can be applied to contract modifications made until December 31, 2022 and elected during this period when rate reform activities occur.  During the first quarter of Fiscal 2021, we adopted relevant hedge accounting expedients related to probability and the ongoing assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives, which would then result in the use of a replacement rate for this analysis.  We anticipate applying these expedients to hedges impacted by rate reform in the future.  Application of these expedients will preserve the presentation of derivatives consistent with past presentation, and as a result, we expect the adoption of

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this portion of the ASU, when such rate reform activities occur, will not have a material impact to our consolidated financial statements. We will continue to evaluate the impact of the guidance and may apply other elections, as applicable, if additional contract modifications or reform activities occur.

Accounting pronouncements not yet adopted

We have reviewed other recently issued accounting pronouncements and concluded that either they are not applicable to our business or no material effect is expected upon future adoption.

Note 4. Product Recall and Loss (Recovery) on Inferior Ingredients

Product Recall

On July 9, 2019, the company issued a voluntary product recall for certain hamburger and hot dog buns and other bakery products due to the potential presence of small pieces of hard plastic that may have been introduced during production.  The products recalled were distributed to retail customers under a variety of brand names in 18 states.  The costs for the product recall were $0.8 million for Fiscal 2019. Costs associated with the product recall were reclassified from material, supplies, labor and other production costs and selling, distribution and administrative expenses to the ‘loss (recovery) on inferior ingredients’ line item in our Consolidated Statements of Income.

Loss (Recovery) on Inferior Ingredients

During Fiscal 2021, the company issued a voluntary recall on certain Tastykake multi-pack cupcakes sold in eight states and certain Tastykake Krimpets distributed to retail customers throughout the U.S. due to the potential presence of tiny fragments of metal mesh wire.  The recall was initiated following notification by a vendor of the possible contamination in a supplied ingredient.  We incurred costs of $1.8 million related to the recall.  Additionally, the company incurred costs of $0.1 million and received reimbursements of approximately $1.0 million during Fiscal 2021 related to the recall of gluten-free products during Fiscal 2020 discussed below.

During Fiscal 2020, the company received ingredient shipments containing gluten which were used to produce our gluten-free products.  The company issued a voluntary product recall due to the potential presence of gluten in certain products.  The products recalled were distributed to retail customers in 14 states. The recall was initiated after finished product testing revealed the possible presence of gluten.  The cause was gluten present in ingredients from a supplier that should not have contained gluten.  We incurred costs of $1.3 million related to the recall of gluten-free products and an adjustment to previously recorded inferior yeast costs discussed below.

In June 2018, the company received from a supplier several shipments of inferior yeast, which reduced product quality and disrupted production and distribution of foodservice and retail bread and buns at several of the company’s bakeries during the second quarter. While the supplier confirmed that the inferior yeast used in the baking process was safe for consumption, customers and consumers reported instances of unsatisfactory product attributes, primarily involving smell and taste.  

In addition, the company incurred costs associated with inferior whey during the third quarter of Fiscal 2018.  A voluntary recall was issued on July 18, 2018 due to the potential of tainted whey.  Costs associated with inferior whey were reclassified from material, supplies, labor and other production costs to the ‘Loss (recovery) on inferior ingredients’ line item in our Consolidated Statements of Income.

During the fourth quarter of Fiscal 2020, the company received a $1.2 million reimbursement from the supplier for the direct costs associated with the inferior yeast.  We also received a reimbursement of $3.9 million for indirect losses associated with the inferior yeast, and this amount is included in the selling, distribution, and administrative expenses line item of the Consolidated Statements of Income. During Fiscal 2019, the company received an additional $1.8 million for the reimbursement of costs associated with receiving inferior ingredients.  Unless otherwise noted, the costs and reimbursements related to these inferior ingredients are included in the ‘Loss (recovery) on inferior ingredients’ line item in our Consolidated Statements of Income.  

The table below presents the total costs and recoveries during Fiscal 2021, 2020 and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Expense recognized	$	1,894		$	1,257		$	1,785
Recoveries recognized		(950	)		(1,150	)		(1,822	)
Total loss (recovery) on inferior ingredients	$	944		$	107		$	(37	)

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Note 5. Restructuring Activities

In Fiscal 2016, we announced the launch of Project Centennial, a comprehensive business and operational review.  We identified opportunities to enhance revenue growth, streamline operations, improve efficiencies, and make investments that strengthen our competitive position and improve margins over the long term.  We began Project Centennial with an evaluation of our brands, product mix, and organizational structure.  Most importantly, Project Centennial marked a significant shift in mindset from a sales and operations focused enterprise to a brand focused, consumer focused packaged foods company.  Strategic priorities developed as part of Project Centennial were designed to improve margins and profitably grow revenue over time.  These priorities included: reducing costs to fuel growth, developing leading capabilities, reinvigorating core business, and capitalizing on product adjacencies.

The company operated under an organizational structure established with two business units (“BUs”), Fresh Bakery and Snacking/Specialty since May of 2017, and realigned key leadership roles.  This structure also provided for centralized marketing, sales, supply chain, shared-services/administrative, and corporate strategy functions, each with more clearly defined roles and responsibilities.  On July 17, 2020, the company implemented additional organizational structure changes designed to increase focus on brand growth, product innovation, and improving underperforming bakeries.  Elimination of the BUs and adoption of a brand focused organizational structure was completed in the third quarter of Fiscal 2020 and the company continues to report our financial results in one operating segment.  Project Centennial was completed in Fiscal 2020 and there were no additional costs recognized in Fiscal 2021.  See Note 1, Basis of Presentation, for a description of our segment presentation.  

Unless otherwise noted, restructuring related costs are recorded in the restructuring and related impairments line item on our Consolidated Statements of Income.

The table below presents the components of costs associated with Project Centennial in Fiscal 2020 and 2019 (amounts in thousands):

	Fiscal 2020		Fiscal 2019
Restructuring and related impairment charges:
Reorganization costs	$	—	$	253
Lease termination charges		4,077		—
Impairment charges, net of gain on sale		23,627		20,229
Employee termination benefits		7,779		3,042
Restructuring and related impairment charges (1)		35,483		23,524
Project Centennial implementation costs (2)		15,548		784
Total Project Centennial restructuring and implementation costs	$	51,031	$	24,308

(1) Presented on our Consolidated Statements of Income.

(2) Represents non-restructuring costs and are recorded in the selling, distribution, and administrative expenses line item of our Consolidated Statements of Income.

The table below details the restructuring impairments (inclusive of property, plant and equipment, ingredient and packaging, and spare parts and intangible assets) that were recognized during Fiscal 2020 and 2019 (amounts in thousands):

	Fiscal 2020		Fiscal 2019
Plant closure costs	$	5,747	$	5,133
Line and distribution depot closure costs		629		356
Spare parts		734		174
Brand rationalization study impairments		7,120		15,399
Lease impairment charges		9,397		—
Gain on sale		—		(833	)
Total restructuring impairment of assets	$	23,627	$	20,229

Fiscal 2020

In order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of Fiscal 2020.  In the fourth quarter of Fiscal 2020, the company decided to cease using one of its regional brands and recognized an additional $1.3 million impairment charge.  Additionally, we recognized $1.2 million of ingredient and packaging impairments as a result of brand and product rationalization initiatives.  

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During Fiscal 2020, the company sold three closed bakeries that were included in assets held for sale and certain idle equipment at other bakeries that were included in property, plant, and equipment, resulting in the recognition of $5.7 million of impairment charges.  Additionally, the company recognized property, plant, and equipment impairment charges of $0.6 million for manufacturing line and distribution depot closures and an office building it has decided to sell, and $0.7 million for spare parts related to equipment the company no longer intends to use.

In order to optimize our distribution network, we vacated certain distribution depots during Fiscal 2020, some of which are owned and others that were leased.  This resulted in the recognition of lease impairment charges totaling $9.4 million and lease termination charges of $4.1 million.

During Fiscal 2020, the company incurred $2.6 million of employee termination benefits charges related to a voluntary employee separation incentive plan (the “VSIP”). Additionally, the company announced an involuntary reduction-in-force plan (the “RIF”) and recognized charges of $5.3 million during Fiscal 2020.  These charges consisted primarily of employee severance and benefits-related costs.  All remaining payments related to the plans were paid in early Fiscal 2021.

Fiscal 2019

We began relocating certain employees during the third quarter of Fiscal 2017 as we transition to the enhanced organizational structure.  Reorganization costs of $0.3 million for Fiscal 2019 for relocating employees were incurred.  Additionally, a brand rationalization study which identified certain regional brand products that transitioned to national brands resulted in an additional impairment charge of $15.4 million on certain finite-lived intangible assets.  

The company recognized an impairment charge of $3.9 million and severance costs of $1.5 million during the third quarter of Fiscal 2019 for the Opelika, Alabama plant closure costs. The company recognized impairment charges during the first quarter of Fiscal 2019 related to manufacturing line closures of $0.4 million.  During the second quarter of Fiscal 2019, an impairment charge of $1.3 million was recognized for a closed plant recorded in assets held for sale.

The table below presents the components of, and changes in, our restructuring accruals (amounts in thousands):

	VSIP			RIF			Employee termination benefits(1)			Reorganization costs(2)			Distribution Network Optimization			Total
Liability balance at December 29, 2018	$	174		$	—		$	227		$	—		$	—		$	401
Charges		—			—			3,042			253			—			3,295
Cash payments		—			—			(1,819	)		(253	)		—			(2,072	)
Liability balance (3) at December 28, 2019	$	174		$	—		$	1,450		$	—		$	—		$	1,624
Charges		2,639			5,289			(149	)		—			4,077			11,856
Cash payments		(1,777	)		(4,817	)		(1,301	)		—			(4,077	)		(11,972	)
Liability balance (3) at January 2, 2021	$	1,036		$	472		$	—		$	—		$	—		$	1,508
Charges		—			—			—			—			—			—
Cash payments		(1,036	)		(472	)		—			—			—			(1,508	)
Liability balance (3) at January 1, 2022	$	—		$	—		$	—		$	—		$	—		$	—

(1) Employee termination benefits not related to the VSIP.

(2) Reorganization costs include employee relocation expenses.

(3) Recorded in the other accrued current liabilities line item of our Consolidated Balance Sheets.

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Note 6. Accumulated Other Comprehensive Income (Loss)

The company’s total comprehensive loss presently consists of net income, adjustments for our derivative financial instruments accounted for as cash flow hedges, and various pension and other postretirement benefit related items.

During Fiscal 2021, 2020, and 2019, reclassifications out of AOCI were as follows (amounts in thousands):

	Amount Reclassified from AOCI									Affected Line Item in the Statement
Details about AOCI Components (Note 2)	Fiscal 2021			Fiscal 2020			Fiscal 2019			Where Net Income is Presented
Derivative instruments:
Interest rate contracts	$	126		$	(145	)	$	(142	)	Interest expense
Commodity contracts		2,115			(2,675	)		3,707		Cost of sales, Note 3, below
Total before tax	$	2,241		$	(2,820	)	$	3,565		Total before tax
Tax (expense) benefit		(560	)		704			(901	)	Tax expense
Total net of tax	$	1,681		$	(2,116	)	$	2,664		Net of tax
Pension and postretirement plans:
Prior-service credits	$	(55	)	$	(111	)	$	(346	)	Note 1, below
Settlement loss		(403	)		(108,757	)		—		Note 1, below
Actuarial losses		(532	)		(1,447	)		(6,822	)	Note 1, below
Total before tax	$	(990	)	$	(110,315	)	$	(7,168	)	Total before tax
Tax benefit		247			27,873			1,810		Tax benefit
Total net of tax	$	(743	)	$	(82,442	)	$	(5,358	)	Net of tax benefit
Total reclassifications from AOCI	$	938		$	(84,558	)	$	(2,694	)	Net of tax benefit

Note 1: These items are included in the computation of net periodic pension cost. See Note 20, Postretirement Plans, for additional information.

Note 2: Amounts in parentheses indicate debits to determine net income.

Note 3: Amounts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.

During Fiscal 2021, 2020, and 2019, amounts recognized in AOCI, exclusive of reclassifications, were as follows (amounts in thousands):

	Amount of Gain (Loss) Recognized in AOCI
AOCI component	Fiscal 2021			Fiscal 2020			Fiscal 2019
Derivative instruments:
Interest rate contracts	$	3,902			—			—
Commodity contracts		(11,030	)	$	12,395		$	11,313
Total before tax	$	(7,128	)	$	12,395		$	11,313
Tax benefit (expense)		1,780			(3,097	)		(2,856	)
Total net of tax	$	(5,348	)	$	9,298		$	8,457
Pension and postretirement plans:
Current year actuarial loss (gain)	$	1,050		$	24,872		$	(10,702	)
Current year prior service credit		2,214			—			—
Total before tax	$	3,264		$	24,872		$	(10,702	)
Tax (expense) benefit		(815	)		(6,284	)		2,702
Total net of tax	$	2,449		$	18,588		$	(8,000	)
Total recognized in AOCI	$	(2,899	)	$	27,886		$	457

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During Fiscal 2021, changes to AOCI, net of income tax, by component were as follows (amounts in thousands):

	Cash Flow Hedge Items			Defined Benefit Pension Plan Items			Total
AOCI at January 2, 2021	$	13,072		$	(6,648	)	$	6,424
Other comprehensive gain before reclassifications		(5,348	)		2,449			(2,899	)
Reclassified to earnings from AOCI		(1,681	)		743			(938	)
AOCI at January 1, 2022	$	6,043		$	(3,456	)	$	2,587

During Fiscal 2020, changes to AOCI, net of income tax, by component were as follows (amounts in thousands):

	Cash Flow Hedge Items		Defined Benefit Pension Plan Items			Total
AOCI at December 28, 2019	$	1,658	$	(107,678	)	$	(106,020	)
Other comprehensive loss (gain) before reclassifications		9,298		18,588			27,886
Reclassified to earnings from AOCI		2,116		82,442			84,558
AOCI at January 2, 2021	$	13,072	$	(6,648	)	$	6,424

Amounts reclassified out of AOCI to net income that relate to commodity contracts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows. The following table presents the net of tax amount of the loss reclassified from AOCI for our commodity contracts (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Gross gain (loss) reclassified from AOCI into income	$	2,115		$	(2,675	)	$	3,707
Tax (expense) benefit		(529	)		668			(936	)
Net of tax	$	1,586		$	(2,007	)	$	2,771

Note 7. Notes Receivable from IDPs

The company provides direct financing to certain IDPs for the purchase of the IDPs’ distribution rights and records the notes receivable on the Consolidated Balance Sheets. The distribution rights are financed for up to ten years. During Fiscal 2021, 2020, and 2019 the following amounts were recorded as interest income, the majority of which relates to these notes receivable (amounts in thousands):

	Interest income
Fiscal 2021	$	23,533
Fiscal 2020	$	26,696
Fiscal 2019	$	27,750

The notes receivable are collateralized by the IDPs’ distribution rights. Additional details are included in Note 16, Fair Value of Financial Instruments.

Note 8. Assets Held for Sale

The company repurchases distribution rights from IDPs in circumstances when the company decides to exit a territory or, in some cases, when the IDP elects to terminate its relationship with the company. In most distributor agreements, if the company decides to exit a territory or stop using the independent distribution model in a territory, the company is contractually required to purchase the distribution rights from the IDP. In the event an IDP terminates its relationship with the company, the company, although not legally obligated, may repurchase and operate those distribution rights as a company-owned territory. The IDPs may also sell their distribution rights to another person or entity. Distribution rights purchased from IDPs and operated as company-owned territories are recorded on the Consolidated Balance Sheets in the line item “Assets Held for Sale” while the company actively seeks another IDP to purchase the distribution rights for the territory.  Distribution rights held for sale and operated by the company are sold to IDPs at fair market value pursuant to the terms of a distributor agreement. There are multiple versions of the distributor agreement in place at any given time and the terms of such distributor agreements vary.  

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During Fiscal 2021, the company sold an office building and certain distribution depots included in assets held for sale at January 2, 2021.  The company received net proceeds of $2.2 million and recognized a gain of $0.9 million at the time of sale.  Also during Fiscal 2021, the company acquired and classified $1.6 million and $4.3 million of equipment and property, respectively, as held for sale.

During the first quarter of Fiscal 2020, two closed bakeries were reclassified as held for sale. During the second quarter of Fiscal 2020, the company entered into a contract to sell these two closed bakeries and an additional bakery previously recorded as held for sale, resulting in the recognition of $4.2 million of impairment charges.   The company recognized a net loss on sale of these assets during the fourth quarter of Fiscal 2020 of $1.4 million recognized in the restructuring and related impairment charges line item on the Consolidated Statements of Income.

The company sold a closed plant in Winston-Salem, North Carolina, which was reclassified to assets held for sale in Fiscal 2017, during the third quarter of Fiscal 2019.  The company received $1.9 million and recognized a gain of $0.8 million at the time of sale.   The gain on sale is recognized in the restructuring and related impairment charges line item on the Consolidated Statements of Income.

Additional assets recorded in assets held for sale are for property, plant and equipment. The carrying values of assets held for sale are not amortized and are evaluated for impairment as required. The table below presents the assets held for sale as of January 1, 2022 and January 2, 2021, respectively (amounts in thousands):

	January 1, 2022		January 2, 2021
Distribution rights	$	5,147	$	3,707
Property, plant and equipment		6,222		1,934
Total assets held for sale	$	11,369	$	5,641

Note 9. Goodwill and Other Intangible Assets

The table below summarizes our goodwill and other intangible assets at January 1, 2022 and January 2, 2021, respectively, each of which is explained in additional detail below (amounts in thousands):

	January 1, 2022		January 2, 2021
Goodwill	$	545,244	$	545,244
Amortizable intangible assets, net of amortization		568,332		587,818
Indefinite-lived intangible assets		127,100		127,100
Total goodwill and other intangible assets	$	1,240,676	$	1,260,162

Goodwill was not impaired in Fiscal 2021, 2020, or 2019.

As of January 1, 2022 and January 2, 2021, the company had the following amounts related to amortizable intangible assets (amounts in thousands):

	January 1, 2022						January 2, 2021
Asset	Cost		Accumulated Amortization		Net Value		Cost		Accumulated Amortization		Net Value
Trademarks	$	477,115	$	78,124	$	398,991	$	466,915	$	64,426	$	402,489
Customer relationships		318,021		151,496		166,525		318,021		135,068		182,953
Non-compete agreements		5,154		5,074		80		5,154		5,034		120
Distributor relationships		4,123		3,398		725		4,123		3,123		1,000
Distributor routes held and used		2,548		537		2,011		1,377		121		1,256
Total	$	806,961	$	238,629	$	568,332	$	795,590	$	207,772	$	587,818

The company acquired trademarks for $10.2 million during the second quarter of Fiscal 2021.  These trademarks are being amortized over their estimated useful life.

As of January 1, 2022 and January 2, 2021, there was $127.1 million of indefinite-lived intangible trademark assets separately identified from goodwill. These trademarks are classified as indefinite-lived because there is no foreseeable limit to the period over which the asset is expected to contribute to our cash flows.  They are well established brands with a long history and well-defined

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markets. In addition, we are continuing to use these brands both in their original markets and throughout our expansion territories. We believe these factors support an indefinite-life assignment with an annual impairment analysis to determine if the trademarks are realizing their expected economic benefits.

Fiscal 2020 restructuring and related impairment charges

In order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of Fiscal 2020.  In the fourth quarter of Fiscal 2020, an additional $1.3 million impairment charge was recognized at the time the company decided to cease using another one of its regional brands.  These costs are recorded in the restructuring and related impairment charges line item on our Consolidated Statements of Income.

Fiscal 2019 restructuring and related impairment charges

During Fiscal 2019, the company recognized intangible asset impairments of $15.4 million that are recorded in the restructuring and related impairment charges line item of our Consolidated Statements of Income.  The impairments are a result of a brand rationalization study that impacted certain trademarks’ future use.  The study concluded that certain products of our regional brands were to be discontinued or converted to one of our national brands.  As a result of these actions, a triggering event occurred, and we examined several trademarks for potential impairment.  One of the trademarks was an indefinite-lived trademark asset and was tested by comparing the fair value of the brand to its carrying value.  Based on this analysis the indefinite-lived trademark was not impaired, however, the company has evaluated the classification of this asset and determined that it should be recognized as finite-lived as of December 28, 2019 with an estimated useful life of 33 years that began amortizing at the beginning of Fiscal 2020.  

Three finite-lived trademark assets were tested using an undiscounted cash flow test.  As a result of this test, the projected cash flows for two of the finite-lived brands did not exceed the carrying value.  One of the finite-lived brands was not considered impaired using the undiscounted cash flow test.  The second step of the test determined the fair value of the asset and the difference between the fair value and the carrying value was recorded as an impairment for the two finite-lived trademark assets that failed step one.  The impairment charge also consisted of one brand that has limited future benefits to the company and was fully impaired.  All of these impairments were attributed to regional brands.  

Amortization expense

Amortization expense for Fiscal 2021, 2020, and 2019 was as follows (amounts in thousands):

	Amortization expense
Fiscal 2021	$	30,857
Fiscal 2020	$	30,704
Fiscal 2019	$	29,323

Estimated amortization of intangibles for Fiscal 2022 and the next four years thereafter is as follows (amounts in thousands):

Fiscal year	Amortization of Intangibles
2022	$	31,535
2023	$	30,654
2024	$	29,959
2025	$	29,247
2026	$	27,173

F-26

Note 10. Derivative Financial Instruments

The company measures the fair value of its derivative portfolio by using the price that would be received to sell an asset or paid to transfer a liability in the principal market for that asset or liability. These measurements are classified into a hierarchy by the inputs used to perform the fair value calculation as follows:

Level 1: Fair value based on unadjusted quoted prices for identical assets or liabilities at the measurement date

Level 2: Modeled fair value with model inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: Modeled fair value with unobservable model inputs that are used to estimate the fair value of the asset or liability

Commodity Price Risk

The company enters into commodity derivatives, designated as cash-flow hedges of existing or future exposure to changes in commodity prices. The company’s primary raw materials are flour, sweeteners, yeast, and shortening, along with pulp, paper, and petroleum-based packaging products. Natural gas, which is used as oven fuel, is also an important commodity used for production.

As of January 1, 2022, the company’s commodity hedge portfolio contained derivatives which are recorded in the following accounts with fair values measured as indicated (amounts in thousands):

	Level 1			Level 2		Level 3		Total
Assets:
Other current assets	$	3,955		$	—	$	—	$	3,955
Other long-term assets		—			—		—		—
Total	$	3,955		$	—	$	—	$	3,955
Liabilities:
Other current liabilities	$	(220	)	$	—	$	—	$	(220	)
Other long-term liabilities		—			—		—		—
Total	$	(220	)	$	—	$	—	$	(220	)
Net Fair Value	$	3,735		$	—	$	—	$	3,735

As of January 2, 2021, the company’s commodity hedge portfolio contained derivatives which are recorded in the following accounts with fair values measured as indicated (amounts in thousands):

	Level 1			Level 2		Level 3		Total
Assets:
Other current assets	$	16,684		$	—	$	—	$	16,684
Other long-term assets		731			—		—		731
Total	$	17,415		$	—	$	—	$	17,415
Liabilities:
Other current liabilities	$	(5	)	$	—	$	—	$	(5	)
Other long-term liabilities		(83	)		—		—		(83	)
Total		(88	)		—		—		(88	)
Net Fair Value	$	17,327		$	—	$	—	$	17,327

The positions held in the portfolio are used to hedge economic exposure to changes in various raw materials and production input prices and effectively fixes the price, or limits increases in prices, during Fiscal 2022. These instruments are designated as cash-flow hedges. See Note 2, Summary of Significant Accounting Policies, for the accounting treatment of these hedged transactions.

Interest Rate Risk

During the first quarter of Fiscal 2021, the company entered into treasury locks to fix the interest rate for the 2031 notes issued on March 9, 2021.  The derivative positions were closed when the debt was priced on March 2, 2021 with a cash settlement net receipt of $3.9 million that offset changes in the benchmark treasury rate between execution of the treasury rate locks and the debt pricing date.  These rate locks were designated as a cash flow hedge and the deferred amount reported in AOCI is being reclassified to interest expense as interest payments are made on the notes through the maturity date.

F-27

The company previously entered into treasury rate locks at the time we executed the 2026 notes.  These rate locks were designated as a cash flow hedge and the fair value at termination was deferred in AOCI.  The deferred amount reported in AOCI is being reclassified to interest expense as interest payments are made on the related notes through the maturity date.

Derivative Assets and Liabilities

The company had the following derivative instruments recorded on the Consolidated Balance Sheets, all of which are utilized for the risk management purposes detailed above (amounts in thousands):

	Derivative Assets
	January 1, 2022			January 2, 2021
Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current assets	$	3,955	Other current assets	$	16,684
Commodity contracts	Other long-term assets		—	Other long-term assets		731
Total		$	3,955		$	17,415

	Derivative Liabilities
	January 1, 2022			January 2, 2021
Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current liabilities	$	220	Other current liabilities	$	5
Commodity contracts	Other long-term liabilities		—	Other long-term liabilities		83
Total		$	220		$	88

Derivative AOCI transactions

The company had the following derivative instruments for deferred gains and (losses) on closed contracts and the effective portion for changes in fair value recorded in AOCI (no amounts were excluded from the effectiveness test), all of which are utilized for the risk management purposes detailed above (amounts in thousands and net of tax):

	Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) (Net of tax)
Derivatives in Cash Flow Hedging Relationships	Fiscal 2021			Fiscal 2020		Fiscal 2019
Interest rate contracts	$	2,926		$	—	$	—
Commodity contracts	$	(8,274	)	$	9,298	$	8,457
Total	$	(5,348	)	$	9,298	$	8,457

	Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)(Net of tax)								Location of Gain or (Loss) Reclassified from AOCI into Income
Derivatives in Cash Flow Hedging Relationships	Fiscal 2021		Fiscal 2020			Fiscal 2019			(Effective Portion)
Interest rate contracts	$	95	$	(109	)	$	(107	)	Interest income (expense)
Commodity contracts		1,586		(2,007	)		2,771		Production costs (1)
Total	$	1,681	$	(2,116	)	$	2,664

1. Included in Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately).

The balance (credit or (debit) balance) in AOCI related to commodity price risk and interest rate risk derivative transactions that are closed or will expire over the next three years are as follows (amounts in thousands and net of tax) at January 1, 2022:

	Commodity Price Risk Derivatives		Interest Rate Risk Derivatives		Totals
Closed contracts	$	179	$	3,063	$	3,242
Expiring in 2022		2,801		—		2,801
Total	$	2,980	$	3,063	$	6,043

See Note 2, Summary of Significant Accounting Policies, for the accounting treatment of OCI for these hedged transactions.

F-28

Derivative transactions notional amounts

As of January 1, 2022, the company had entered into the following financial contracts to hedge commodity risks (amounts in thousands):

Derivatives in Cash Flow Hedging Relationships	Notional amount
Wheat contracts	$	32,731
Soybean oil contracts		7,088
Natural gas contracts		3,663
Corn contracts		342
Total	$	43,824

The company’s derivative instruments contained no credit-risk-related contingent features at January 1, 2022. As of January 1, 2022 and January 2, 2021, the company had $2.0 million and $1.2 million, respectively, recorded in other current assets representing collateral to counterparties for hedged positions.  As of January 1, 2022 and January 2, 2021, the company had $3.4 million and $14.0 million, respectively, recorded in other accrued liabilities representing collateral from counterparties for hedged positions.

Note 11. Other Current and Non-Current Assets

Other current assets consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Prepaid assets	$	12,576	$	8,140
Service contracts		19,884		7,911
Fair value of derivative instruments		3,955		16,684
Collateral to counterparties for derivative positions		2,039		1,229
Income taxes receivable		13,001		2,211
Other		137		1,214
Total	$	51,592	$	37,389

Other non-current assets consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Unamortized financing fees	$	1,574	$	836
Investments		3,145		3,242
Fair value of derivative instruments		—		731
Deposits		2,202		2,092
Unamortized cloud computing arrangement costs		1,215		2,059
Noncurrent pension asset		1,281		—
Other		206		121
Total	$	9,623	$	9,081

F-29

Note 12. Other Accrued Liabilities and Other Long-Term Liabilities

Other accrued liabilities consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Employee compensation	$	25,505	$	28,826
VSIP and RIF liabilities		—		1,508
Employee vacation		15,782		16,216
Employee bonus		33,413		57,394
Fair value of derivative instruments		220		5
Self-insurance reserves		29,828		29,367
Bank overdraft		17,161		16,900
Accrued interest		7,202		8,241
Accrued taxes		23,911		22,773
Accrued legal costs		1,746		1,644
Accrued advertising		4,294		3,610
Accrued legal settlements		16,500		11,869
Accrued short term deferred income		4,040		4,760
Accrued utilities		6,741		6,070
Acquisition consideration adjustment		3,400		—
Collateral from counterparties for derivative positions		3,377		13,997
Multi-employer pension plan withdrawal liability		2,100		—
Repurchase obligations of distribution rights		4,743		—
Other		3,480		3,099
Total	$	203,443	$	226,279

In connection with an acquisition completed in Fiscal 2012, the company agreed to make the selling shareholders whole for certain taxes incurred by the stakeholders on the sale.  There was recently a tax determination that the selling shareholders owed additional taxes.  Unless there is a successful appeal which overturns the determination, the company estimates that it will owe the shareholders approximately $3.4 million and the company has recorded this cost in the selling, distribution and administrative expenses line item of the Consolidated Statements of Income.

The repurchase of distribution rights is part of a legal settlement which requires a phased repurchase of approximately 75 distribution rights.  See Note 22, Commitments and Contingencies, for details on this settlement.

Other long-term liabilities consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Deferred income	$	15,676	$	19,153
Deferred compensation		20,188		16,674
Fair value of derivative instruments		—		83
Other deferred credits		720		1,502
Deferred payroll taxes under the CARES Act		—		14,992
Other		1,375		1,255
Total	$	37,959	$	53,659

F-30

Note 13. Leases

Qualitative disclosures about our leases, including the significant policy elections, can be found in Note 2, Summary of Significant Accounting Policies.  The quantitative disclosures are presented below.

Lease costs incurred by lease type, and/or type of payment for Fiscal 2021, 2020 and 2019 were as follows (in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Lease cost:
Amortization of right-of-use assets	$	1,751	$	7,190	$	7,014
Interest on lease liabilities		154		846		994
Operating lease cost		68,927		69,926		69,525
Short-term lease cost		3,075		3,058		2,630
Variable lease cost		27,120		24,815		26,359
Total lease cost	$	101,027	$	105,835	$	106,522

Other supplemental quantitative disclosures as of, and for, Fiscal 2021 and Fiscal 2020 were as follows (in thousands):

	Fiscal 2021		Fiscal 2020
Cash paid for amounts included in the measurement    of lease liabilities:
Operating cash flows from financing leases	$	154	$	846
Operating cash flows from operating leases	$	68,802	$	74,226
Financing cash flows from financing leases	$	1,745	$	6,715
Right-of-use assets obtained in exchange for new    financing lease liabilities	$	37	$	79
Right-of-use assets obtained in exchange for new    operating lease liabilities	$	55,869	$	16,022
Weighted-average remaining lease term (years):
Financing leases		2.1		3.1
Operating leases		8.3		9.4
Weighted-average IBR (percentage):
Financing leases		3.5		3.5
Operating leases		3.8		4.1

Estimated undiscounted future lease payments under non-cancelable operating leases and financing leases, along with a reconciliation of the undiscounted cash flows to operating and financing lease liabilities, respectively, as of January 1, 2022 (in thousands) were as follows:

	Operating lease liabilities			Financing lease liabilities
2022	$	56,925		$	1,691
2023		53,900			1,828
2024		45,269			101
2025		42,386			—
2026		28,591			—
Thereafter		127,734			—
Total minimum lease payments		354,805			3,620
Less: amount of lease payments representing interest		(57,777	)		(126	)
Present value of future minimum lease payments		297,028			3,494
Less: current obligations under leases		(46,390	)		(1,584	)
Long-term lease obligations	$	250,638		$	1,910

F-31

The following table details lease modifications and renewals and lease impairments (amounts in thousands):

	Fiscal 2021		Fiscal 2020
Lease modifications and renewals	$	46,790	$	13,818
Lease impairments		—	$	11,400
Lease terminations	$	41,610	$	14,817

During Fiscal 2021, the company purchased twenty-seven warehouses that were included in the company’s operating leased assets for $64.7 million.  Two of the purchased properties were fully impaired in Fiscal 2020, resulting in the recognition of a $2.6 million gain upon completion of the purchase of these assets and this amount is included in the selling, distribution, and administrative expenses line items of the Consolidated Statements of Income.  The carrying values for the remaining twenty-five leases, totaling $35.4 million, are included in the ‘Lease terminations’ line above.  

Note 14. Debt and Other Commitments

Long-term debt, including capital lease obligations, consisted of the following at January 1, 2022 and January 2, 2021:

	Interest Rate at January 1, 2022	Final Maturity	January 1, 2022		January 2, 2021
			(Amounts in thousands)
Unsecured credit facility	1.02%	2026	$	—	$	50,000
2031 notes	2.40%	2031		493,333		—
2026 notes	3.50%	2026		397,276		396,705
2022 notes	4.38%	2022		—		399,398
Accounts receivable securitization facility	1.00%	2023		—		114,000
				890,609		960,103
Current maturities of long-term debt				—		—
Long-term debt			$	890,609	$	960,103

Bank overdrafts occur when checks have been issued but have not been presented to the bank for payment. Certain of our banks allow us to delay funding of issued checks until the checks are presented for payment. The delay in funding results in a temporary source of financing from the bank. The activity related to bank overdrafts is shown as a financing activity in our Consolidated Statements of Cash Flows. Bank overdrafts are included in other current liabilities on our Consolidated Balance Sheets. As of January 1, 2022 and January 2, 2021, the bank overdraft balance was $17.2 million and $16.9 million, respectively.

The company also had standby letters of credit (“LOCs”) outstanding of $8.4 million at January 1, 2022 and January 2, 2021, which reduce the availability of funds under the credit facility. The outstanding LOCs are for the benefit of certain insurance companies and lessors. None of the LOCs are recorded as a liability on the Consolidated Balance Sheets.

2031 Notes, 2026 Notes, Accounts Receivable Securitization Facility, 2022 Notes, and Credit Facility

2031 Notes. On March 9, 2021, the company issued $500.0 million of senior notes.  The company will pay semiannual interest on the 2031 notes on each March 15 and September 15 and the 2031 notes will mature on March 15, 2031.  The notes bear interest at 2.400% per annum.  On any date prior to December 15, 2030, the company may redeem some or all of the notes at a price equal to the greater of (1) 100% of the principal amount of the notes redeemed and (2) a “make-whole” amount plus, in each case, accrued and unpaid interest. The make-whole amount is equal to the sum of the present values of the remaining scheduled payments of principal and interest on the 2031 notes to be redeemed that would be due if such notes matured December 15, 2030 (exclusive of interest accrued to, but not including, the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of the applicable treasury rate (as defined in the indenture governing the notes), plus 20 basis points, plus, in each case, accrued and unpaid interest. At any time on or after December 15, 2030, the company may redeem some or all of the 2031 notes at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. If the company experiences a “change of control triggering event” (which involves a change of control of the company and the related rating of the notes below investment grade), it is required to offer to purchase the notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest thereon unless the company has exercised its option to redeem the notes in whole.  The 2031 notes are also subject to customary restrictive covenants for investment grade debt, including certain limitations on liens and sale and leaseback transactions.

The face value of the 2031 notes is $500.0 million.  There was a debt discount representing the difference between the net proceeds, after expenses, received upon issuance of debt and the amount repayable at its maturity. The company also accrued issuance

F-32

costs (including underwriting fees and other fees) on the 2031 notes. Debt issuance costs and the debt discount are being amortized to interest expense over the term of the 2031 notes. As of January 1, 2022, the company was in compliance with all restrictive covenants under the indenture governing the 2031 notes.  The table below presents the debt discount, underwriting fees and other fees for issuing the 2031 notes (amounts in thousands):

Total fees for 2031 notes	Amount at Issuance
Debt discount	$	2,430
Underwriting, legal, and other fees		4,829
Total fees	$	7,259

2026 Notes. On September 28, 2016, the company issued $400.0 million of senior notes (the “2026 notes”). The company will pay semiannual interest on the 2026 notes on each April 1 and October 1, beginning on April 1, 2017, and the 2026 notes will mature on October 1, 2026. The notes bear interest at 3.500% per annum. The 2026 notes are subject to interest rate adjustments if either Moody’s or S&P downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the 2026 notes.  On any date prior to July 1, 2026, the company may redeem some or all of the notes at a price equal to the greater of (1) 100% of the principal amount of the notes redeemed and (2) a “make-whole” amount plus, in each case, accrued and unpaid interest. The make-whole amount is equal to the sum of the present values of the remaining scheduled payments of principal and interest on the 2026 notes to be redeemed that would be due if such notes matured July 1, 2026 (exclusive of interest accrued to, but not including, the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate (as defined in the indenture governing the notes), plus 30 basis points, plus in each case accrued and unpaid interest. At any time on or after July 1, 2026, the company may redeem some or all of the 2026 notes at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. If the company experiences a “change of control triggering event” (which involves a change of control of the company and related rating of the notes below investment grade), it is required to offer to purchase the notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest thereon unless the company exercised its option to redeem the notes in whole.  The 2026 notes are also subject to customary restrictive covenants, including certain limitations on liens and sale and leaseback transactions.

The face value of the 2026 notes is $400.0 million.  There was a debt discount representing the difference between the net proceeds, after expenses, received upon issuance of debt and the amount repayable at its maturity. The company also paid issuance costs (including underwriting fees and legal fees) on the 2026 notes. Debt issuance costs and the debt discount are being amortized to interest expense over the term of the 2026 notes. As of January 1, 2022, the company was in compliance with all restrictive covenants under the indenture governing the 2026 notes.  The table below presents the debt discount, underwriting fees and the legal and other fees for issuing the 2026 notes (amounts in thousands):  

Total fees for 2026 notes	Amount at Issuance
Debt discount	$	2,108
Underwriting, legal, and other fees		3,634
Total fees	$	5,742

Accounts Receivable Securitization Facility. On July 17, 2013, the company entered into an accounts receivable securitization facility (the “AR facility”). The company has amended the AR facility nine times since execution, most recently on September 23, 2021.  These amendments include provisions which (i) increased the revolving commitments under the AR facility to $200.0 million from $150.0 million, (ii) added a leverage pricing grid, (iii) added an additional bank to the lending group, (iv) made certain other conforming changes, (v) removed a bank from the lending group, and (vi) most recently, extended the term by one additional year to September 27, 2023. The amendment that added the additional bank was accounted for as an extinguishment of the debt.  The remaining amendments were accounted for as modifications.

Under the AR facility, a wholly-owned, bankruptcy-remote subsidiary purchases, on an ongoing basis, substantially all trade receivables. As borrowings are made under the AR facility, the subsidiary pledges the receivables as collateral. In the event of liquidation of the subsidiary, its creditors would be entitled to satisfy their claims from the subsidiary’s pledged receivables prior to distributions of collections to the company. We include the subsidiary in our Consolidated Financial Statements. The AR facility contains certain customary representations and warranties, affirmative and negative covenants, and events of default. Restrictive covenants require adherence to company credit and collections policies, depository account control agreements, and certain other customary restrictions including limitations to consolidations, mergers, and liens.  As of January 1, 2022 and January 2, 2021, respectively, the company was in compliance with all restrictive covenants under the AR facility.  Amounts available for withdrawal under the AR facility are determined as the lesser of the total commitments and a formula derived amount based on qualifying trade receivables.

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Optional principal repayments may be made at any time without premium or penalty. Interest is due two days after our reporting periods end in arrears on the outstanding borrowings and is computed as the cost of funds rate plus an applicable margin of 85 basis points. An unused fee of 35 basis points is applicable on the unused commitment at each reporting period. Financing costs paid at inception of the AR facility and at the time amendments are executed are being amortized over the life of the AR facility.  The company incurred $0.2 million in financing costs during the third quarter of Fiscal 2021 for the ninth amendment.  The balance of unamortized financing costs was $0.3 million on January 1, 2022 and $0.3 million on January 2, 2021 and are recorded in other assets on the Consolidated Balance Sheets.

The table below presents the borrowings and repayments under the AR facility during Fiscal 2021:

	Amount (thousands)
Balance as of January 2, 2021	$	114,000
Borrowings		—
Payments		(114,000	)
Balance as of January 1, 2022	$	—

The table below presents the net amount available for working capital and general corporate purposes under the AR facility as of January 1, 2022:

	Amount (thousands)
Gross amount available	$	194,500
Outstanding		—
Available for withdrawal	$	194,500

Amounts available for withdrawal under the AR facility are determined as the lesser of the total commitments and a formula derived amount based on qualifying trade receivables.  The table below presents the highest and lowest outstanding balance under the AR facility during Fiscal 2021:

	Amount (thousands)
High balance	$	114,000
Low balance	$	—

2022 Notes. On April 3, 2012, the company issued $400.0 million of senior notes (the “2022 notes”).  Prior to the early redemption discussed below, the company paid semiannual interest on the notes on each April 1 and October 1, beginning on October 1, 2012, and the notes would have matured on April 1, 2022. The notes beared interest at 4.375% per annum. On any date prior to January 1, 2022, the company could have redeemed some or all of the notes at a price equal to the greater of (1) 100% of the principal amount of the notes redeemed and (2) a “make-whole” amount plus, in each case, accrued and unpaid interest. The make-whole amount is equal to the sum of the present values of the remaining scheduled payments of principal thereof (not including any interest accrued thereon to, but not including, the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate (as defined in the indenture governing the notes), plus 35 basis points, plus in each case, unpaid interest accrued thereon to, but not including, the date of redemption. At any time on or after January 1, 2022, the company could have redeemed some or all of the notes at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. If the company experienced a “change of control triggering event” (which involves a change of control of the company and related rating of the notes below investment grade), it was required to offer to purchase the notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest thereon unless the company exercised its option to redeem the notes in whole. The notes were also subject to customary restrictive covenants, including certain limitations on liens and sale and leaseback transactions.

On April 8, 2021, the company completed the early redemption of the 2022 notes with proceeds received from the issuance of the 2031 notes on March 9, 2021.  We recognized a loss on extinguishment of debt of $16.1 million comprised of a make-whole cash payment of $15.4 million and the write-off of unamortized debt discount and debt issuance costs of $0.7 million.

The face value of the 2022 notes was $400.0 million and the debt discount on the 2022 notes at issuance was $1.0 million.  The company paid issuance costs (including underwriting fees and legal fees) on the 2022 notes of $3.9 million.  The issuance costs and the debt discount were amortized to interest expense over the term of the 2022 notes.

Credit Facility. The company is party to an amended and restated credit agreement, dated as of October 24, 2003, with the lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent, the swingline lender and issuing lender (as amended, restated, modified or supplemented from time to time, the “amended and restated credit agreement”). The company has

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amended the amended and restated credit agreement seven times since execution, most recently on July 30, 2021 (the “seventh amendment”).  Under the amended and restated credit agreement, our credit facility is a five-year, $500.0 million senior unsecured revolving loan facility with the following terms and conditions: (i) a maturity date of July 30, 2026; (ii) an applicable margin for revolving loans maintained as (1) base rate loans and swingline loans with a range of 0.00% to 0.525% and (2) Eurodollar loans with a range of 0.815% to 1.525%, in each case, based on the more favorable (to the company) of (x) the leverage ratio of the company and its subsidiaries and (y) the company’s debt rating; (iii) an applicable facility fee with a range of 0.06% to 0.225%, due quarterly on all commitments under the amended and restated credit agreement, based on the more favorable (to the company) of (x) the leverage ratio of the company and its subsidiaries and (y) the company’s debt rating; and (iv) a maximum leverage ratio covenant to permit the company, at its option, in connection with certain acquisitions and investments and subject to the terms and conditions provided in the amended and restated credit agreement, to increase the maximum ratio permitted thereunder on one or more occasions to 4.00 to 1.00 for a period of four consecutive fiscal quarters, including and/or immediately following the fiscal quarter in which such acquisitions or investments were completed (the “covenant holiday”), provided that each additional covenant holiday will not be available to the company until it has achieved and maintained a leverage ratio of at least 3.75 to 1.00 and has been complied with for at least two fiscal quarters. Additionally, the seventh amendment to the amended and restated credit agreement appointed Deutsche Bank Trust Company Americas as successor administrative agent to Deutsche Bank AG New York Branch and added provisions to address LIBOR transition.

In addition, the credit facility contains a provision that permits the company to request up to $200.0 million in additional revolving commitments, for a total of up to $700.0 million, subject to the satisfaction of certain conditions. Proceeds from the credit facility may be used for working capital and general corporate purposes, including capital expenditures, acquisition financing, refinancing of indebtedness, dividends and share repurchases. The credit facility includes certain customary restrictions, which, among other things, require maintenance of financial covenants and limit encumbrance of assets and creation of indebtedness. Restrictive financial covenants include such ratios as a minimum interest coverage ratio and a maximum leverage ratio. The company believes that, given its current cash position, its cash flow from operating activities and its available credit capacity, it can comply with the current terms of the amended credit facility and can meet its presently foreseeable financial requirements.  As of January 1, 2022 and January 2, 2021, respectively, the company was in compliance with all restrictive covenants under the credit facility.

Financing costs paid at inception of the credit facility and at the time amendments are executed are being amortized over the life of the credit facility.  The company incurred $1.1 million in financing costs during the third quarter of Fiscal 2021 for the seventh amendment.

Amounts outstanding under the credit facility vary daily.  Changes in the gross borrowings and repayments can be caused by cash flow activity from operations, capital expenditures, acquisitions, dividends, share repurchases, and tax payments, as well as derivative transactions which are part of the company’s overall risk management strategy as discussed in Note 10, Derivative Financial Instruments.  The table below presents the borrowings and repayments under the credit facility during Fiscal 2021:

	Amount (thousands)
Balance as of January 2, 2021	$	50,000
Borrowings		10,000
Payments		(60,000	)
Balance as of January 1, 2022	$	—

The table below presents the net amount available under the credit facility as of January 1, 2022:  

	Amount (thousands)
Gross amount available	$	500,000
Outstanding		—
Letters of credit		(8,400	)
Available for withdrawal	$	491,600

The table below presents the highest and lowest outstanding balance under the credit facility during Fiscal 2021:

	Amount (thousands)
High balance	$	50,000
Low balance	$	—

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Aggregate debt maturities.  Aggregate maturities of debt outstanding as of January 1, 2022, are as follows (excluding unamortized debt discount and issuance costs) (amounts in thousands):

2022	$	—
2023		—
2024		—
2025		—
2026		400,000
Thereafter		500,000
Total	$	900,000

Debt issuance costs and debt discount.  The table below reconciles the debt issuance costs and debt discounts to the net carrying value of each of our debt obligations (excluding line-of-credit arrangements) at January 1, 2022 (amounts in thousands):

	Face Value		Debt issuance costs and debt discount		Net carrying value
2031 notes	$	500,000	$	6,667	$	493,333
2026 notes		400,000		2,724		397,276
Total	$	900,000	$	9,391	$	890,609

The table below reconciles the debt issuance costs and debt discounts to the net carrying value of each of our debt obligations (excluding line-of-credit arrangements) at January 2, 2021 (amounts in thousands):

	Face Value		Debt issuance costs and debt discount		Net carrying value
2026 notes	$	400,000	$	3,295	$	396,705
2022 notes		400,000		602		399,398
Total	$	800,000	$	3,897	$	796,103

Deferred Compensation

The Executive Deferred Compensation Plan (“EDCP”) consists of unsecured general obligations of the company to pay the deferred compensation of, and our contributions to, participants in the EDCP. The obligations will rank equally with our other unsecured and unsubordinated indebtedness payable from the company’s general assets.

The company’s directors and certain key members of management are eligible to participate in the EDCP. Directors may elect to defer all or any portion of their annual retainer fee and meeting fees. Deferral elections by directors must be made prior to the beginning of each year and are thereafter irrevocable. Eligible employees may elect to defer up to 75% of their base salaries, and up to 100% of any cash bonuses and other compensation through December 31, 2015.  Effective January 1, 2016, employees may elect to defer up to 75% of their base salaries, any cash bonuses, and other compensation.  Deferral elections by eligible executives must be made prior to the beginning of each year and are thereafter irrevocable during that year. The portion of the participant’s compensation that is deferred depends on the participant’s election in effect with respect to his or her elective contributions under the EDCP.

The amounts outstanding at January 1, 2022 and January 2, 2021 were as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Deferral elections outstanding	$	21,319		$	18,308
Current portion of deferral elections		(1,131	)		(1,634	)
Long-term portion of deferral elections	$	20,188		$	16,674

Guarantees and Indemnification Obligations

The company has provided various representations, warranties, and other standard indemnifications in various agreements with customers, suppliers, and other parties as well as in agreements to sell business assets or lease facilities. In general, these provisions indemnify the counterparty for matters such as breaches of representations and warranties, certain environmental conditions and tax matters, and, in the context of sales of business assets, any liabilities arising prior to the closing of the transactions. Non-performance

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under a contract could trigger an obligation of the company. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of any potential claims.

No material guarantees or indemnifications have been entered into by the company through January 1, 2022.

Note 15. Variable Interest Entities

Distribution rights agreement VIE analysis

The incorporated IDPs qualify as VIEs. The IDPs who are formed as sole proprietorships are excluded from the following VIE accounting analysis and discussion.  

Incorporated IDPs acquire distribution rights and enter into a contract with the company to sell the company’s products in the IDPs’ defined geographic territory.  The incorporated IDPs have the option to finance the acquisition of their distribution rights with the company.  They can also pay cash or obtain external financing at the time they acquire the distribution rights.  The combination of the company’s loans to the incorporated IDPs and the ongoing distributor arrangements with the incorporated IDPs provide a level of funding to the equity owners of the various incorporated IDPs that would not otherwise be available. As of January 1, 2022 and January 2, 2021, there was $159.5 million and $171.1 million, respectively, in gross distribution rights notes receivable outstanding from incorporated IDPs.

The company is not considered to be the primary beneficiary of the VIEs because the company does not (i) have the ability to direct the significant activities of the VIEs that would affect their ability to operate their respective businesses and (ii) provide any implicit or explicit guarantees or other financial support to the VIEs, other than the financing described above, for specific return or performance benchmarks. The activities controlled by the incorporated IDPs that are deemed to most significantly impact the ultimate success of the incorporated IDP entities relate to those decisions inherent in operating the distribution business in the territory, including acquiring trucks and trailers, managing fuel costs, employee matters and other strategic decisions. In addition, we do not provide, nor do we intend to provide, financial or other support to the IDP. The IDPs are responsible for the operations of their respective territories.

The company’s maximum contractual exposure to loss for the incorporated IDP relates to the distributor rights note receivable for the portion of the territory the incorporated IDPs financed at the time they acquired the distribution rights. The incorporated IDPs remit payment on their distributor rights note receivable each week during the settlement process of their weekly activity.  The company will operate a territory on behalf of an incorporated IDP in situations where the IDP has abandoned its distribution rights.  Any remaining balance outstanding on the distribution rights notes receivable is relieved once the distribution rights have been sold on the IDPs behalf.  The company’s collateral from the territory distribution rights mitigates the potential losses.

Note 16. Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts receivable, and short-term debt approximates fair value because of the short-term maturity of the instruments. Notes receivable are entered into in connection with the purchase of distribution rights by IDPs. These notes receivable are recorded in the Consolidated Balance Sheets at carrying value, which represents the closest approximation of fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As a result, the appropriate interest rate that should be used to estimate the fair value of the distribution rights notes is the prevailing market rate at which similar loans would be made to IDPs with similar credit ratings and for the same maturities. However, the company financed approximately 3,700 and 4,000 IDPs’ distribution rights as of January 1, 2022 and January 2, 2021, respectively, all with varied financial histories and credit risks. Considering the diversity of credit risks among the IDPs, the company has no method to accurately determine a market interest rate to apply to the notes. The distribution rights are generally financed for up to ten years and the distribution rights notes are collateralized by the IDPs’ distribution rights. The company maintains a wholly-owned subsidiary to assist in financing the distribution rights purchase activities if requested by new IDPs, using the distribution rights and certain associated assets as collateral. These notes receivable earn interest at a fixed rate.

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At January 1, 2022 and January 2, 2021, respectively, the carrying value of the distribution rights notes receivable was as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Distribution rights notes receivable	$	183,403		$	204,839
Current portion recorded in accounts and    notes receivable, net		(29,093	)		(28,427	)
Long-term portion of distribution rights    notes receivable	$	154,310		$	176,412

During Fiscal 2021, the company recorded a reserve of $1.9 million for the distributor notes receivable related to a legal settlement.  See Note 22, Commitments and contingencies, of Notes to Consolidated Financial Statements of this Form 10-K for additional information. At January 2, 2021, the company evaluated the collectability of the distribution rights notes receivable and determined that a reserve was not necessary. Payments on these notes are collected by the company weekly in conjunction with the IDP settlement process.

The fair value of the company’s variable rate debt at January 1, 2022 approximates the recorded value. The fair value of the company’s notes, as discussed in Note 14, Debt and Other Commitments, are estimated using yields obtained from independent pricing sources for similar types of borrowing arrangements and are considered a Level 2 valuation.  The fair value of the notes are presented in the table below (amounts in thousands, except level classification):

	Carrying Value		Fair Value		Level
2031 notes	$	493,333	$	494,200	2
2026 notes	$	397,276	$	429,216	2

For fair value disclosure information about our derivative assets and liabilities see Note 10, Derivative Financial Instruments. For fair value disclosure information about our pension plan net assets see Note 20, Postretirement Plans.

Note 17. Stockholders’ Equity

Flowers Foods’ articles of incorporation provide that its authorized capital consist of 500,000,000 shares of common stock having a par value of $0.01 per share and 1,000,000 shares of preferred stock. The preferred stock of which (a) 200,000 shares have been designated by the Board of Directors as Series A Junior Participating Preferred Stock, having a par value per share of $100 and (b) 800,000 shares of preferred stock, having a par value per share of $0.01, have not been designated by the Board of Directors. No shares of preferred stock have been issued by Flowers Foods.

Common Stock

The holders of Flowers Foods common stock are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. Subject to preferential rights of any issued and outstanding preferred stock, including the Series A Preferred Stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors of the company out of funds legally available. In the event of a liquidation, dissolution, or winding-up of the company, holders of common stock are entitled to share ratably in all assets of the company, if any, remaining after payment of liabilities and the liquidation preferences of any issued and outstanding preferred stock, including the Series A Preferred Stock. Holders of common stock have no preemptive rights, no cumulative voting rights, and no rights to convert their shares of common stock into any other securities of the company or any other person.

Preferred Stock

The Board of Directors has the authority to issue up to 1,000,000 shares of preferred stock in one or more series and to fix the designations, relative powers, preferences, rights, qualifications, limitations, and restrictions of all shares of each such series, including without limitation, dividend rates, conversion rights, voting rights, redemption and sinking fund provisions, liquidation preferences, and the number of shares constituting each such series, without any further vote or action by the holders of our common stock. Although the Board of Directors does not presently intend to do so, it could issue shares of preferred stock, with rights that could adversely affect the voting power and other rights of holders of our common stock without obtaining the approval of our shareholders. In addition, the issuance of preferred shares could delay or prevent a change in control of the company without further action by our shareholders.

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Stock Repurchase Plan

Our Board of Directors has approved a plan (on December 19, 2002) that currently authorizes share repurchases of up to 74.6 million shares of the company’s common stock. As of January 1, 2022, 5.8 million shares remained available for repurchase under the existing authorization. Under the plan, the company may repurchase its common stock in open market or privately negotiated transactions or under an accelerated repurchase program at such times and at such prices as determined to be in the company’s best interest.

The table below presents the shares repurchased under the Stock Repurchase Plan during our Fiscal 2021 (amounts in thousands except shares purchased):

Fiscal 2021 Quarter	Total Number of Shares Purchased		Total Cost of Shares Purchased
For the quarter ended April 24, 2021		46,618	$	1,058
For the quarter ended July 17, 2021		—	$	—
For the quarter ended October 9, 2021		360,222	$	8,452
For the quarter ended January 1, 2022		—	$	—
Total		406,840	$	9,510

As of January 1, 2022, 68.8 million shares at a cost of $652.9 million have been purchased since the inception of this plan.

Dividends

During Fiscal 2021, 2020, and 2019, the company paid the following dividends, excluding dividends on vested stock-based compensation awards discussed in Note 18, Stock-Based Compensation, below (amounts in thousands except per share data):

	Dividends paid		Dividends paid per share
Fiscal 2021	$	175,669	$	0.8300
Fiscal 2020	$	167,161	$	0.7900
Fiscal 2019	$	158,626	$	0.7500

Note 18. Stock-Based Compensation

On March 5, 2014, our Board of Directors approved and adopted the 2014 Omnibus Equity and Incentive Compensation Plan (“Omnibus Plan”). The Omnibus Plan was approved by our shareholders on May 21, 2014. The Omnibus Plan authorizes the compensation committee of the Board of Directors to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, dividend equivalents and other awards for the purpose of providing our officers, key employees, and non-employee directors’ incentives and rewards for performance. The Omnibus Plan replaced the Flowers Foods’ 2001 Equity and Performance Incentive Plan, as amended and restated as of April 1, 2009 (“EPIP”), the Stock Appreciation Rights Plan, and the Annual Executive Bonus Plan. All outstanding equity awards that were made under the EPIP will continue to be governed by the EPIP; however, all equity awards granted after May 21, 2014 are governed by the Omnibus Plan. No additional awards will be issued under the EPIP. Awards granted under the Omnibus Plan are limited to the authorized amount of 8,000,000 shares.

The following is a summary of stock options, restricted stock, and deferred stock outstanding under the plans described above. Information relating to the company’s stock appreciation rights, which were issued under a separate stock appreciation right plan, is also described below.

Performance-Contingent Restricted Stock Awards

Performance-Contingent Total Shareholder Return Shares (“TSR Shares”)

Since 2012, certain key employees have been granted performance-contingent restricted stock under the EPIP and the Omnibus Plan in the form of TSR Shares. Awards granted prior to Fiscal 2019 vested approximately two years from the date of grant (after the filing of the company’s Annual Report on Form 10-K) while the awards granted during Fiscal 2019, 2020 and 2021 vest approximately three years from the date of grant.  These shares become non-forfeitable if, and to the extent that, on that date the vesting conditions are satisfied. The total shareholder return (“TSR”) is the percent change in the company’s stock price over the measurement period plus the dividends paid to shareholders. The performance payout is calculated at the end of each of the last four quarters (averaged) in the measurement period. Once the TSR is determined for the company (“Company TSR”), it is compared to the

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TSR of our food company peers (“Peer Group TSR”). The Company TSR compared to the Peer Group TSR will determine the payout as set forth below (the “TSR Modifier”):

Percentile	Payout as % of Target
90th		200	%
70th		150	%
50th		100	%
30th		50	%
Below 30th		0	%

For performance between the levels described above, the degree of vesting is interpolated on a linear basis. The table below presents the payout percentage for each of the TSR awards:

Award	Fiscal year vested	Payout (%)
2017 award	Fiscal 2019	153.0

The TSR shares vest immediately if the grantee dies or becomes disabled. However, if the grantee retires at age 65 (or age 55 with at least 10 years of service with the company) or later, on the normal vesting date the grantee will receive a pro-rated number of shares based upon the retirement date and measured at the actual performance for the entire performance period. In addition, if the company undergoes a change in control, the TSR shares will immediately vest at the target level, provided that if 12 months of the performance period have been completed, vesting will be determined based on Company TSR as of the date of the change in control without application of four-quarter averaging. During the vesting period, the grantee has none of the rights of a shareholder. Dividends declared during the vesting period will accrue and will be paid at vesting on the shares that ultimately vest. The fair value estimate was determined using a Monte Carlo simulation model, which utilizes multiple input variables to estimate the probability of the company achieving the market condition discussed above. Inputs into the model included the following for the company and comparator companies: (i) TSR from the beginning of the performance cycle through the measurement date; (ii) volatility; (iii) risk-free interest rates; and (iv) the correlation of the comparator companies’ TSR. The inputs are based on historical capital market data.  The 2019 TSR award is expected to payout at 137%.

On May 23, 2019, the company’s CEO received an award of TSR Shares that brings his total grant equal to the CEO’s target award (“promotion award”).  This grant is measured under the same guidelines as the December 30, 2018 grant of TSR Shares described above.  The company’s former CEO forfeited 112,840 TSR shares at his retirement on May 23, 2019.

The following performance-contingent TSR Shares have been granted under the Omnibus Plan and have service period remaining (amounts in thousands, except price data):

Grant Date	Shares Granted		Vesting Date	Fair Value per Share
12/30/2018		440	3/1/2022	$	21.58
5/23/2019		11	3/1/2022	$	27.23
7/14/2019		5	3/1/2022	$	23.32
10/6/2019		2	3/1/2022	$	22.52
12/29/2019		331	2/28/2023	$	25.00
4/19/2020		8	2/28/2023	$	23.14
07/12/2020		2	2/28/2023	$	21.97
10/4/2020		5	2/28/2023	$	24.63
01/03/2021		365	3/1/2024	$	26.75
10/10/2021		18	3/1/2024	$	24.47

As of January 1, 2022, there was $10.0 million of total unrecognized compensation cost related to nonvested TSR Shares granted under the Omnibus Plan. That cost is expected to be recognized over a weighted-average period of 1.81 years.

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Performance-Contingent Return on Invested Capital Shares (“ROIC Shares”)

Since 2012, certain key employees have been granted performance-contingent restricted stock under the EPIP and the Omnibus Plan in the form of ROIC Shares. Awards granted prior to Fiscal 2019 vested approximately two years from the date of grant (after the filing of the company’s Annual Report on Form 10-K) while the awards granted during Fiscal 2019, 2020 and 2021 vest approximately three years from the date of grant.  These shares become non-forfeitable if, and to the extent that, on that date the vesting conditions are satisfied.  Return on Invested Capital is calculated by dividing our profit, as defined, by the invested capital (“ROIC”). Generally, the performance condition requires the company’s average ROIC to exceed its average weighted cost of capital (“WACC”) by between 1.75 to 4.75 percentage points (the “ROI Target”) over the three fiscal year performance period. If the lowest ROI Target is not met, the awards are forfeited. The shares can be earned based on a range from 0% to 125% of target as defined below (the “ROIC Modifier”):

• 0% payout if ROIC exceeds WACC by less than 1.75 percentage points;

• ROIC above WACC by 1.75 percentage points pays 50% of ROI Target; or

• ROIC above WACC by 3.75 percentage points pays 100% of ROI Target; or

• ROIC above WACC by 4.75 percentage points pays 125% of ROI Target.

For performance between the levels described above, the degree of vesting is interpolated on a linear basis. The table below presents the payout percentage for each of the ROIC awards:

Award	Fiscal year vested	Payout (%)
2017 award	Fiscal 2019		75

The ROIC Shares vest immediately if the grantee dies or becomes disabled. However, if the grantee retires at age 65 (or age 55 with at least 10 years of service with the company) or later, on the normal vesting date the grantee will receive a pro-rated number of shares based upon the retirement date and actual performance for the entire performance period. In addition, if the company undergoes a change in control, the ROIC Shares will immediately vest at the target level. During the vesting period, the grantee has none of the rights of a shareholder. Dividends declared during the vesting period will accrue and will be paid at vesting on the shares that ultimately vest. The fair value of this type of award is equal to the stock price on the grant date. Since these awards have a performance condition feature the expense associated with these awards may change depending on the expected ROI Target attained at each reporting period.  The 2019 award is being expensed at our current estimated payout percentage of 125% of the ROI target, and the 2020 and 2021 awards are being expensed at 100% of the ROI target.

On May 23, 2019, the company’s CEO received a promotion award of ROIC Shares.  This grant is measured under the same guidelines as the December 30, 2018 grant of ROIC Shares described above. The company’s former CEO forfeited 112,840 ROIC shares at his retirement on May 23, 2019.

The following performance-contingent ROIC Shares have been granted under the Omnibus Plan and have service period remaining (amounts in thousands, except price data):

Grant Date	Shares Granted		Vesting Date	Fair Value per Share
12/30/2018		440	3/1/2022	$	18.29
5/23/2019		11	3/1/2022	$	23.08
7/14/2019		5	3/1/2022	$	23.32
10/6/2019		2	3/1/2022	$	22.52
12/29/2019		331	2/28/2023	$	21.74
4/19/2020		8	2/28/2023	$	23.14
07/12/2020		2	2/28/2023	$	21.97
10/4/2020		5	2/28/2023	$	24.63
01/03/2021		365	3/1/2024	$	22.63
10/10/2021		18	3/1/2024	$	24.47

As of January 1, 2022, there was $8.7 million of total unrecognized compensation cost related to nonvested ROIC Shares granted under the Omnibus Plan. This cost is expected to be recognized over a weighted-average period of 1.79 years.

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Performance-Contingent Restricted Stock Summary

The table below presents the TSR Modifier share adjustment, ROIC Modifier share adjustment, accumulated dividends on vested shares, and the tax windfall/shortfall at vesting of the performance-contingent restricted stock awards (amounts in thousands except for share data):

Award granted	Fiscal year vested	TSR Modifier increase shares		ROIC Modifier (decrease) shares			Dividends at vesting (thousands)		Tax benefit		Fair value at vesting
2017	2019		205,686		(97,131	)	$	1,219	$	936	$	18,570

A summary of the status of all of the company’s nonvested shares for performance-contingent restricted stock (including the TSR Shares and the ROIC Shares) for Fiscal 2021, 2020, and 2019 is set forth below (amounts in thousands, except price data):

	Fiscal 2021					Fiscal 2020					Fiscal 2019
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Balance at beginning of year		1,264		$	21.85		662		$	20.16		779		$	21.64
Initial grant		766		$	24.66		693		$	23.37		917		$	20.10
Vested		—		$	—		—		$	—		(885	)	$	22.21
Grant reduction for not achieving the ROIC modifier		—		$	—		—		$	—		(97	)	$	19.97
Grant increase (reduction) for not achieving the TSR    modifier		—		$	—		—		$	—		206		$	23.31
Forfeitures		(58	)	$	23.27		(91	)	$	21.26		(258	)	$	20.18
Balance at end of year		1,972		$	22.89		1,264		$	21.85		662		$	20.16

As of January 1, 2022, there was $18.7 million of total unrecognized compensation cost related to nonvested restricted stock granted under the Omnibus Plan. This cost is expected to be recognized over a weighted-average period of 1.80 years.

Time-Based Restricted Stock Units

Certain key employees have been granted time-based restricted stock units (“TBRSU Shares”).  These awards vest on the fifth of January each year in equal installments over a three-year period beginning in Fiscal 2020.  Dividends earned on shares are held by the company during the vesting period and paid in cash when the awards vest and shares are distributed.  

On May 23, 2019, the company’s CEO was granted TBRSU Shares of approximately $1.0 million pursuant to the Omnibus Plan.  This award will vest 100% on the fourth anniversary of the date of grant provided the CEO remains employed by the company during this period.  Vesting will also occur in the event of the CEO’s death or disability, but not his retirement if prior to the fourth anniversary of the grant date.  Dividends will accrue on the award and will be paid to the CEO on the vesting date for all shares that vest.  There were 43,330 shares issued for this award at a fair value of $23.08 per share.

The following TBRSU Shares have been granted under the Omnibus Plan and have service periods remaining (amounts in thousands, except price data):

Grant Date	Shares Granted		Vesting Date	Fair Value per Share
12/30/2018		244	Equally over 3 years	$	18.29
5/23/2019		43	5/23/2023	$	23.08
12/29/2019		220	Equally over 3 years	$	21.74
1/03/2021		256	Equally over 3 years	$	22.63
10/10/2021		6	Equally over 3 years	$	24.79

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The TBRSU Shares activity for Fiscal 2021, 2020 and Fiscal 2019 is set forth below (amounts in thousands, except price data):  

	Fiscal 2021					Fiscal 2020					Fiscal 2019
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Nonvested shares at beginning of year		387		$	20.64		270		$	19.06		—		$	—
Granted		262		$	22.68		220		$	21.74		288		$	19.01
Vested		(137	)	$	19.98		(74	)	$	18.29
Forfeitures		(20	)	$	21.56		(29	)	$	20.14		(18	)	$	18.29
Nonvested shares at end of year		492		$	21.87		387		$	20.64		270		$	19.06

Deferred Stock

Non-employee directors may convert their annual board retainers into deferred stock equal in value to 100% of the cash payments directors would otherwise receive and the vesting period is a one-year period to match the period of time that cash would have been received if no conversion existed. Accumulated dividends are paid upon delivery of the shares.  During Fiscal 2021, non-employee directors elected to receive, and were granted, an aggregate grant of 2,209 common shares for board retainer deferrals pursuant to the Omnibus Plan which vested during the fourth quarter of Fiscal 2021.

Non-employee directors also receive annual grants of deferred stock. This deferred stock vests over one year from the grant date. During Fiscal 2020, non-employee directors were granted an aggregate of 51,840 shares, of which 17,100 shares were deferred, for their annual grant pursuant to the Omnibus Plan that vested during Fiscal 2021. During the second quarter of Fiscal 2021, non-employee directors received 66,550 shares for their annual grant pursuant to the Omnibus Plan.  Additionally, during Fiscal 2021, non-employee directors received 13,491 shares of previously deferred award grants.  The deferred stock will be distributed to the grantee at a time designated by the grantee at the date of grant.

Compensation expense is recorded on deferred stock over the vesting period.

The deferred and restricted stock activity for Fiscal 2021, 2020, and 2019 is set forth below (amounts in thousands, except price data):

	Fiscal 2021					Fiscal 2020					Fiscal 2019
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Nonvested shares at beginning of year		52		$	23.21		49		$	22.31		66		$	19.93
Granted		69		$	23.96		54		$	23.15		49		$	22.31
Vested		(54	)	$	23.19		(51	)	$	22.28		(66	)	$	19.93
Nonvested shares at end of year		67		$	24.00		52		$	23.21		49		$	22.31
Vested and deferred shares at end of year (1)		206					198					197

(1) The vested and deferred shares at the end of the year include 89,949 shares granted and deferred under the EPIP for Fiscal 2021, 2020 and 2019.

As of January 1, 2022, there was $0.6 million of total unrecognized compensation cost related to deferred and restricted stock awards. This cost is expected to be recognized over a weighted-average period of 0.40 years. The intrinsic value of deferred stock awards that vested during Fiscal 2021 was $1.5 million. There was an immaterial tax windfall on the exercise of deferred share awards during fiscal 2021.

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Share-Based Payments Compensation Expense Summary

The following table summarizes the company’s stock-based compensation expense, all of which was recognized in selling, distribution, and administrative expense, for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Performance-contingent restricted stock awards	$	15,061	$	8,656	$	4,767
TBRSU shares		4,747		3,039		1,520
Deferred stock awards		1,535		1,160		1,143
Total stock-based compensation expense	$	21,343	$	12,855	$	7,430

Note 19. Earnings Per Share

The following is a reconciliation of net income and weighted average shares for calculating basic and diluted earnings per common share for Fiscal 2021, 2020, and 2019 (amounts in thousands, except per share data):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Net income	$	206,187	$	152,318	$	164,538
Basic Earnings Per Common Share:
Basic weighted average shares outstanding per common share		211,840		211,782		211,606
Basic earnings per common share	$	0.97	$	0.72	$	0.78
Diluted Earnings Per Common Share:
Basic weighted average shares outstanding per common share		211,840		211,782		211,606
Add: Shares of common stock assumed issued upon exercise of stock    options, vesting of performance-contingent restricted stock    and deferred stock		1,193		563		368
Diluted weighted average shares outstanding per common share		213,033		212,345		211,974
Diluted earnings per common share	$	0.97	$	0.72	$	0.78

There were no anti-dilutive shares during Fiscal 2021 and 6,234 anti-dilutive shares during Fiscal 2020.  There were 11,030 anti-dilutive shares for Fiscal 2019.  

Note 20. Postretirement Plans

The following summarizes the company’s balance sheet related pension and other postretirement benefit plan accounts at January 1, 2022 and January 2, 2021 (amounts in thousands):

	January 1, 2022			January 2, 2021
Noncurrent benefit asset	$	1,281		$	—
Current benefit liability	$	804		$	874
Noncurrent benefit liability	$	7,249		$	10,049
AOCI, net of tax	$	(3,456	)	$	(6,648	)

The company made a contribution of $2.5 million and $7.6 million to the Flowers Foods, Inc. Retirement Plan No. 2 (“Plan No. 2”) during the third quarter of Fiscal 2019 and Fiscal 2020, respectively.  There were no contributions to the Flowers Foods, Inc. Plan No. 1 (“Plan No. 1”) during Fiscal 2019 or Fiscal 2020, and there were no contributions made by the company to any plan during Fiscal 2021.

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Pension Plans

The company maintains a trusted, noncontributory defined benefit pension plan that covers a small number of certain union employees.  The benefits in this plan are based on years of service and the employee’s career earnings.  This qualified plan is funded at amounts deductible for income tax purposes but not less than the minimum funding required by the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Pension Protection Act of 2006 (“PPA”).  Benefits under the company’s largest pension plan were fully terminated and transferred to an insurance company in the form of a nonparticipating group annuity contract during the first quarter of Fiscal 2020.  No cash contributions were required to support the transaction, but the company recorded non-cash settlement and curtailment charges of $108.8 million in Fiscal 2020.

The company recognizes settlement accounting charges, which accelerates recognition of a plan’s unrecognized net gain or loss, when the ongoing lump sum payments from the plan exceed the sum of the plan’s service cost and interest cost.  During the fourth quarter of Fiscal 2021, the company determined it was probable a settlement would occur and paid lump sums that exceeded that threshold and, as a result, the company recorded a settlement charge of $0.4 million in the fourth quarter of Fiscal 2021.

The company uses a calendar year end for the measurement date since the plans are based on a calendar year and because it approximates the company’s fiscal year end. As of December 31, 2021 and December 31, 2020, the assets of the qualified plans included certificates of deposit, marketable equity securities, mutual funds, corporate and government debt securities, other diversifying strategies and annuity contracts. The company expects pension cost of approximately $0.7 million for Fiscal 2022.

The net periodic pension cost (income) for the company’s pension plans includes the following components for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Service cost	$	971		$	854		$	703
Interest cost		758			2,108			11,930
Expected return on plan assets		(1,867	)		(3,933	)		(17,147	)
Settlement loss		403			104,473			—
Curtailment loss		—			4,284			—
Amortization:
Prior service cost		57			115			387
Actuarial loss		742			1,747			7,098
Net periodic pension cost (income)		1,064			109,648			2,971
Other changes in plan assets and benefit obligations recognized in OCI:
Current year actuarial (gain) loss		(1,288	)		(25,515	)		11,277
Settlement loss		(403	)		(104,473	)		—
Curtailment loss		—			(4,284	)		—
Amortization of prior service cost		(57	)		(115	)		(387	)
Amortization of actuarial loss		(742	)		(1,747	)		(7,098	)
Total recognized in OCI		(2,490	)		(136,134	)		3,792
Total recognized in net periodic (benefit) cost and OCI	$	(1,426	)	$	(26,486	)	$	6,763

Actual return on plan assets for Fiscal 2021, 2020, and 2019 was $1.9 million, $15.8 million, and $51.8 million, respectively.

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The funded status and the amounts recognized in the Consolidated Balance Sheets for the company’s pension plans are as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	37,650		$	396,906
Service cost		971			854
Interest cost		758			2,108
Actuarial gain		(1,228	)		(13,657	)
Benefits paid		(1,662	)		(7,762	)
Settlements		(1,699	)		(340,799	)
Benefit obligation at end of year	$	34,790		$	37,650
Change in plan assets:
Fair value of plan assets at beginning of year	$	34,750		$	360,675
Actual return on plan assets		1,929			15,790
Employer contribution		271			7,871
Benefits paid		(1,662	)		(7,762	)
Transfer payments		—			(1,025	)
Settlements		(1,699	)		(340,799	)
Fair value of plan assets at end of year	$	33,589		$	34,750
Funded status, end of year:
Fair value of plan assets	$	33,589		$	34,750
Benefit obligations		(34,790	)		(37,650	)
Unfunded status and amount recognized at end of year	$	(1,201	)	$	(2,900	)
Amounts recognized in the balance sheet:
Noncurrent asset	$	1,281		$	—
Current liability		(258	)		(259	)
Noncurrent liability		(2,224	)		(2,641	)
Amount recognized at end of year	$	(1,201	)	$	(2,900	)
Amounts recognized in AOCI:
Net actuarial loss before taxes	$	7,913		$	10,347
Prior service cost before taxes		198			255
Amount recognized at end of year	$	8,111		$	10,602
Accumulated benefit obligation at end of year	$	32,950		$	36,104

The actuarial gain/(loss) on defined benefit obligations of the employer due to experience, including any assumption changes, different from assumed, and the reasons for such (gain)/loss, can be found in the table below for Fiscal 2021, 2020 and 2019 (amounts in thousands).  

	Amount of (Gain)/Loss on Defined Benefit Obligation			Reasons for (Gain)/Loss
Fiscal 2021 (1)	$	(1,228	)	Gain from increase in general level of interest rates used to measure defined benefit plan obligations (approximately 30 basis points); Loss from change in mortality assumption scale from MP-2020 to MP-2021.
Fiscal 2020 (1)	$	3,718		Loss from decrease in general level of interest rates used to measure defined benefit plan obligations (approximately 60 basis points); Gain from change in mortality assumption scale from MP-2019 to MP-2020.
Fiscal 2019	$	45,979		Loss from decrease in general level of interest rates used to measure defined benefit plan obligations (approximately 90 basis points); Gain from change in mortality assumption to use PRI-2012 Mortality Tables and projection scale MP-2019, from the RP-2018 Mortality tables and projection scale MP-2018.

(1) Includes only losses from plans remaining on or after December 31, 2020.

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Assumptions used in accounting for the company’s pension plans at each of the respective fiscal years ending are as follows:

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Weighted average assumptions used to determine benefit obligations:
Measurement date	12/31/2021			12/31/2020			12/31/2019
Discount rate		3.06	%		2.78	%		2.54	%
Rate of compensation increase		3.00	%		3.00	%		3.00	%
Weighted average assumptions used to determine net periodic benefit    cost/(income):
Measurement date	1/1/2021			1/1/2020			1/1/2019
Discount rate		2.78	%		2.54	%		3.41	%
Expected return on plan assets		5.70	%		4.97	%		5.34	%
Rate of compensation increase		3.00	%		3.00	%		3.00	%

In developing the expected long-term rate of return on plan assets at each measurement date, the company considers the plan assets’ historical actual returns, targeted asset allocations, and the anticipated future economic environment and long-term performance of individual asset classes, based on the company’s investment strategy. While appropriate consideration is given to recent and historical investment performance, the assumption represents management’s best estimate of the long-term prospective return. Further, pension costs do not include an explicit expense assumption, and therefore the return on assets rate reflects the long-term expected return, net of expenses.  

Based on these factors the expected long-term rate of return assumption for Plan No. 2 was set at 5.9% for Fiscal 2022.  The average annual return on the plan assets over the last 15 years (while the assets were collectively managed) was approximately 6.3% (net of expenses).

Plan Assets

The investment committee, which consists of certain members of management, establishes investment guidelines and strategies and regularly monitors the performance of the plans’ assets. The investment committee is responsible for executing these strategies and investing the pension assets in accordance with ERISA and fiduciary standards. The investment objective of the pension plans is to preserve the plans’ capital and maximize investment earnings within acceptable levels of risk and volatility. The investment committee meets on a regular basis with its investment advisors to review the performance of the plans’ assets. Based upon performance and other measures and recommendations from its investment advisors, the investment committee rebalances the plans’ assets to the targeted allocation when considered appropriate. The fair values of all of the company pension plan assets at December 31, 2021 and December 31, 2020, by asset class are as follows (amounts in thousands):

	Fair value of Pension Plan Assets as of December 31, 2021
Asset Class	Quoted prices in active markets for identical assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Short term investments and cash	$	453	$	—	$	—	$	453
Common stocks:
International common stocks		4,708		—		—		4,708
U.S. common stocks		8,177		—		—		8,177
Fixed income securities:
U.S. government bonds		13,514		—		—		13,514
U.S. government agency bonds		—		—		—		—
U.S. corporate bonds		6,737		—		—		6,737
Pending transactions(*)		—		—		—		—
Accrued (expenses) income(*)		—		—		—		—
Total	$	33,589	$	—	$	—	$	33,589

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	Fair value of Pension Plan Assets as of December 31, 2020
Asset Class	Quoted prices in active markets for identical assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Short term investments and cash	$	546	$	—	$	—	$	546
Common stocks:
International common stocks		5,223		—		—		5,223
U.S. common stocks		8,587		—		—		8,587
Fixed income securities:
U.S. government bonds		14,577		—		—		14,577
U.S. government agency bonds		—		—		—		—
U.S. corporate bonds		5,877		—		—		5,877
International corporate bonds		—		—		—		—
Pending transactions(*)		—		—		—		—
Other assets and (liabilities)(*)		—		—		—		(35	)
Accrued (expenses) income(*)		—		—		—		(25	)
Total	$	34,810	$	—	$	—	$	34,750

(*) This class includes accrued interest, dividends, and amounts receivable from asset sales and amounts payable for asset purchases.   

The company’s investment policy includes various guidelines and procedures designed to ensure the plan’s assets are invested in a manner necessary to meet expected future benefits earned by participants. The investment guidelines consider a broad range of economic conditions.   

The plan asset allocation as of the measurement dates December 31, 2021 and December 31, 2020, and target asset allocations for Fiscal 2022 are as follows for Plan No. 2:

	Target Allocation	Percentage of Plan Assets at the Measurement Date (As percent)
Asset Category	2022	2021		2020
Equity securities	0-80%		38.0		40.0
Fixed income securities	20-100%		60.0		59.0
Short term investments and cash	0-10%		2.0		1.0
Total			100.0		100.0

The objectives of the target allocations are to maintain investment portfolios that diversify risk through prudent asset allocation parameters, achieve asset returns that meet or exceed the plans’ actuarial assumptions, and achieve asset returns that are competitive with like institutions employing similar investment strategies.

Cash Flows

Company contributions to qualified and nonqualified plans are as follows (amounts in thousands):

Year	Required		Discretionary		Total
2021	$	271	$	—	$	271
2020	$	271	$	7,600	$	7,871
2019	$	1,040	$	1,731	$	2,771

All contributions are made in cash. The required contributions made during Fiscal 2021 include $0.3 million in nonqualified pension benefits paid from corporate assets. There were no contributions made to the qualified plans during Fiscal 2021.  During Fiscal 2022, the company expects to pay $0.3 million in nonqualified pension benefits from corporate assets. There are no expected contributions to Plan No. 2 that are required under ERISA and the PPA during Fiscal 2022; however, the company expects to make a $1.0 million discretionary contribution to Plan No. 2 in Fiscal 2022.  These amounts represent estimates that are based on assumptions that are subject to change.

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Benefit Payments

The following are benefits paid under the plans (including settlements) during Fiscal 2021, 2020, and 2019 and expected to be paid from Fiscal 2022 through Fiscal 2031. Estimated future payments include qualified pension benefits that will be paid from the plans’ assets and nonqualified pension benefits that will be paid from corporate assets (amounts in thousands):

Year	Pension Benefits
2019	$	29,484	*
2020	$	348,561	^
2021	$	3,361	+
Estimated Future Payments:
2022	$	4,534
2023	$	3,027
2024	$	2,814
2025	$	2,404
2026	$	2,150
2027 – 2031	$	9,423

* Includes $7.0 million and $0.7 million from Plan No. 1 and Plan No. 2, respectively, paid as lump sums.

^ Includes $104.5 million and $0.4 million from Plan No. 1 and Plan No. 2, respectively, paid as lump sums.

+ Includes $1.7 million from Plan No. 2 paid as lump sums.

Postretirement Benefit Plans

The company sponsors postretirement benefit plans that provide health care and life insurance benefits to retirees who meet certain eligibility requirements. Generally, this includes employees with at least 10 years of service who have reached age 60 and participate in a Flowers retirement plan. Retiree medical coverage is provided for a period of three to five years, depending on the participant’s age and service at retirement. Participant premiums are determined using COBRA premium levels. Retiree life insurance benefits are offered to a closed group of retirees.   The company also sponsors a medical, dental, and life insurance benefits plan to a limited and closed group of participants.

The company delivers retiree medical and dental benefits for Medicare eligible retirees through a health-care reimbursement account. The company no longer sponsors a medical plan for Medicare eligible retirees and does not file for a Medicare Part D subsidy. 

The net periodic benefit (income) cost for the company’s postretirement benefit plans includes the following components for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Service cost	$	337		$	285		$	283
Interest cost		119			194			297
Amortization:
Prior service credit		(3	)		(4	)		(41	)
Actuarial gain		(211	)		(300	)		(276	)
Total net periodic benefit cost (income)		242			175			263
Other changes in plan assets and benefit obligations recognized in OCI:
Current year actuarial loss (gain)		238			643			(575	)
Current year prior service credit		(2,214	)		—			—
Amortization of actuarial gain		211			300			276
Amortization of prior service credit		3			4			41
Total recognized in OCI		(1,762	)		947			(258	)
Total recognized in net periodic benefit cost and OCI	$	(1,520	)	$	1,122		$	5

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The unfunded status and the amounts recognized in the Consolidated Balance Sheets for the company’s postretirement benefit plans are as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	8,023		$	7,477
Service cost		337			285
Interest cost		119			194
Participant contributions		453			573
Actuarial loss		238			642
Plan amendments		(2,214	)		—
Benefits paid		(1,384	)		(1,148	)
Benefit obligation at end of year	$	5,572		$	8,023
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer contributions		931			575
Participant contributions		453			573
Benefits paid		(1,384	)		(1,148	)
Fair value of plan assets at end of year	$	—		$	—
Funded status, end of year:
Fair value of plan assets	$	—		$	—
Benefit obligations		(5,572	)		(8,023	)
Unfunded status and amount recognized at end of year	$	(5,572	)	$	(8,023	)
Amounts recognized in the balance sheet:
Current liability	$	(547	)	$	(615	)
Noncurrent liability		(5,025	)		(7,408	)
Amount recognized at end of year	$	(5,572	)	$	(8,023	)
Amounts recognized in AOCI:
Net actuarial gain before taxes	$	(1,286	)	$	(1,735	)
Prior service credit before taxes		(2,216	)		(5	)
Amounts recognized in AOCI	$	(3,502	)	$	(1,740	)

Assumptions used in accounting for the company’s postretirement benefit plans at each of the respective fiscal years ending are as follows:  

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Weighted average assumptions used to determine benefit obligations:
Measurement date	12/31/2021			12/31/2020			12/31/2019
Discount rate		2.60	%		2.11	%		3.01	%
Health care cost trend rate used to determine benefit obligations:
Initial rate		6.25	%		6.50	%		6.50	%
Ultimate rate		5.00	%		5.00	%		5.00	%
Year trend reaches the ultimate rate	2027			2027			2026
Weighted average assumptions used to determine net periodic cost:
Measurement date	1/1/21			1/1/20			1/1/19
Discount rate		2.11	%		3.01	%		4.07	%
Health care cost trend rate used to determine net periodic cost:
Initial rate		6.50	%		6.50	%		6.50	%
Ultimate rate		5.00	%		5.00	%		5.00	%
Year trend reaches the ultimate rate	2027			2026			2025

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Cash Flows

Company contributions to postretirement plans are as follows (amounts in thousands):

Year	Employer Net Contribution
2019	$	722
2020	$	575
2021	$	931
2022 (Expected)	$	548

The table above reflects only the company’s share of the benefit cost. Since the company no longer receives reimbursement for Medicare Part D subsidies, the entire $0.5 million expected funding for postretirement benefit plans during 2022 will be required to pay for benefits. Contributions by participants to postretirement benefits were $0.5 million, $0.6 million, and $0.7 million for Fiscal 2021, 2020, and 2019, respectively.

Benefit Payments

The following are benefits paid by the company during Fiscal 2021, 2020, and 2019 and expected to be paid from Fiscal 2022 through Fiscal 2031. All benefits are expected to be paid from the company’s assets (amounts in thousands):

	Postretirement benefits
Year	Employer gross contribution
2019	$	722
2020	$	575
2021	$	931
Estimated Future Payments:
2022	$	548
2023	$	507
2024	$	465
2025	$	486
2026	$	505
2027 – 2031	$	2,355

Multiemployer Plans

The company contributes to various multiemployer pension plans. Benefits provided under the multiemployer pension plans are generally based on years of service and employee age. Expense under these plans was $1.0 million for Fiscal 2021, $1.2 million for Fiscal 2020, and $1.1 million for Fiscal 2019.

The company contributes to several multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover various union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If we choose to stop participating in some of these multiemployer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. None of the contributions to the pension funds was in excess of 5% or more of the total contributions for plan years 2021, 2020, and 2019. There are no contractually required minimum contributions to the plans as of January 1, 2022.

On September 22, 2021, the union participants of the Retail, Wholesale and Department Store Union Fund (the “Fund”) at our Birmingham, Alabama plant voted to withdraw from the Fund in the most recent collective bargaining agreement.  The withdrawal was effective, and the union participants were eligible to participate in the 401(k) plan, on December 1, 2021.  During the third quarter of Fiscal 2021, the company recorded a liability of $2.1 million related to the withdrawal from the Fund.  The withdrawal liability was computed as the net present value of 20 years of monthly payments derived from the company’s share of unfunded vested benefits.  While this is our best estimate of the ultimate cost of the withdrawal from this Fund, additional withdrawal liability may be incurred based on the final Fund assessment or in the event of a mass withdrawal, as defined by statute, occurring anytime within the next three years following our complete withdrawal.  Additionally, the company recorded a liability of $1.2 million related to

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transition payments, including related tax payments, for the benefit of union participants as part of the collective bargaining agreement.  The withdrawal liability charge and the transition payments are recorded in the multi-employer pension plan withdrawal costs line item on our Consolidated Statements of Income.  The transition payments were paid during the fourth quarter of Fiscal 2021.  The remaining liability associated with the withdrawal is recorded in other accrued current liabilities on the Consolidated Balance Sheets.

The company’s participation in these multiemployer plans for Fiscal 2021 is outlined in the table below. The EIN/Pension Plan Number column provides the Employer Identification Number (“EIN”) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent PPA zone status available in 2021 and 2020 is for the plan’s year-end at December 31, 2021 and December 31, 2020, respectively. The zone status is based on information that the company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The FIP/RP Status Pending/Implemented column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreements to which the plans are subject. Finally, there have been no significant changes that affect the comparability of contributions.

In December 2014, the Consolidated and Further Continuing Appropriations Act of 2015 (the “2015 Appropriations Act”) was signed into law and materially amended the PPA funding rules. In general, the PPA funding rules were made more flexible in order to make more manageable the steps necessary for multi-employer plans to become or remain economically viable in the future. While in previous years we have been informed that several of the multi-employer pension plans to which our subsidiaries contribute have been labeled with a “critical” or “endangered” status as defined by the PPA, the changes made by the 2015 Appropriations Act will materially impact, on a going forward basis, these prior funding status assessments. In any event, it is unclear at this time what impact, if any, the 2015 Appropriations Act will have on our future obligations to the multi-employer pension plans in which we participate.

				Pension Protection Act			Contributions (Amounts in
				Zone Status			thousands)							Expiration Date of
		Pension				FIP/RP Status	2021		2020		2019		Surcharge	Collective Bargaining
Pension Fund	EIN	Plan No.		2021	2020	Pending/Implemented	($)		($)		($)		Imposed	Agreement
IAM National Pension Fund	51-6031295		002	Red	Red	Yes		136		153		111	Yes	4/29/2022
Retail, Wholesale and Department    Store International Union and    Industry Pension Fund	63-0708442		001	Red	Red	Yes		211		157		160	No	*
Western Conference of Teamsters    Pension Trust ^	91-6145047		001	Green	Green	No		266		349		244	No	2/4/2022

* The union employees withdrew from the fund effective December 1, 2021.

          ^ The collective bargaining agreement is currently under negotiation.

401(k) Retirement Savings Plans

The Flowers Foods 401(k) Retirement Savings Plan covers substantially all of the company’s employees who have completed certain service requirements. During Fiscal 2021, 2020, and 2019, the total cost and employer contributions were as follows (amounts in thousands):

Contributions by fiscal year	Defined contribution plans expense
Fiscal 2021	$	28,081
Fiscal 2020	$	27,995
Fiscal 2019	$	27,336

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Note 21. Income Taxes

The company’s provision for income tax expense (benefit) consists of the following for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Current Taxes:
Federal	$	46,018		$	64,113		$	23,397
State		11,790			15,434			5,539
		57,808			79,547			28,936
Deferred Taxes:
Federal		6,946			(26,112	)		17,335
State		(169	)		(5,042	)		1,274
		6,777			(31,154	)		18,609
Income tax expense	$	64,585		$	48,393		$	47,545

Fiscal 2020 deferred income taxes included the impact of the termination of Plan No.1.  See Footnote 20, Postretirement Plans, for a description of the termination of Plan No. 1.

Income tax expense (benefit) differs from the amount computed by applying the applicable U.S. federal income tax rate of 21% because of the effect of the following items for Fiscal 2021, 2020 and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Tax at U.S. federal income tax rate	$	56,862		$	42,149		$	44,538
State income taxes, net of federal income tax benefit		9,181			8,209			5,384
Net share-based payments (windfalls)		(104	)		(80	)		(828	)
Other		(1,354	)		(1,885	)		(1,549	)
Income tax expense	$	64,585		$	48,393		$	47,545

In Fiscal 2021, 2020 and 2019, the most significant difference in the effective rate and the statutory rate was state income taxes.

Deferred tax assets (liabilities) are comprised of the following (amounts in thousands):

	January 1, 2022			January 2, 2021
Self-insurance	$	5,502		$	4,806
Compensation and employee benefits		8,816			7,698
Deferred income		4,948			5,988
Loss and credit carryforwards		12,990			13,026
Equity-based compensation		6,797			3,977
Legal accrual		6,514			2,867
Deferred payroll tax under CARES act		4,100			7,525
Pension and postretirement benefits		1,722			2,390
Financing and operating lease right-of-use liabilities		77,422			88,816
Other		6,642			7,028
Valuation allowance		(1,030	)		(1,030	)
Deferred tax assets		134,423			143,091
Depreciation		(71,041	)		(69,056	)
Intangibles		(114,882	)		(109,824	)
Financing and operating lease right-of-use assets		(75,233	)		(85,720	)
Hedging		(2,015	)		(4,357	)
Other		(5,009	)		(2,393	)
Deferred tax liabilities		(268,180	)		(271,350	)
Net deferred tax liability	$	(133,757	)	$	(128,259	)

F-53

The company has a deferred tax asset of $2.8 million related to a federal net operating loss carryforward which we expect to fully utilize before expiration. Additionally, the company and various subsidiaries have a net deferred tax asset of $4.8 million related to state net operating loss carryforwards, and $5.4 million for credit carryforwards with expiration dates through Fiscal 2041. The utilization of a portion of these state carryforwards could be limited in the future; therefore, a valuation allowance has been recorded. Should the company determine at a later date that certain of these losses which have been reserved for may be utilized, a benefit may be recognized in the Consolidated Statements of Income. Likewise, should the company determine at a later date that certain of these net operating losses for which a deferred tax asset has been recorded may not be utilized, a charge to the Consolidated Statements of Income may be necessary.  See Note 2, Summary of Significant Accounting Policies, for the deferred tax asset valuation allowance analysis.

There are no unrecognized gross tax benefits as of January 1, 2022.  These amounts would be presented exclusive of interest accrued and recorded in other long-term liabilities on the Consolidated Balance Sheets.

The company accrues interest expense and penalties related to income tax liabilities as a component of income before taxes. No accrual of penalties is reflected on the company’s balance sheet as the company believes the accrual of penalties is not necessary based upon the merits of its income tax positions. The company had no accrued interest balance at January 1, 2022 and January 2, 2021.

The company defines the federal jurisdiction as well as various state jurisdictions as “major” jurisdictions. The company is no longer subject to federal examinations for years prior to 2018, and with limited exceptions, for years prior to 2017 in state jurisdictions.

The following is a reconciliation of the total amounts of unrecognized tax benefits for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020			Fiscal 2019
Unrecognized tax benefit at beginning of fiscal year	$	—	$	306		$	750
Lapses of statutes of limitations		—		(306	)		(444	)
Unrecognized tax benefit at end of fiscal year	$	—	$	—		$	306

At this time, we do not anticipate significant changes to the amount of gross unrecognized tax benefits over the next twelve months.

Note 22. Commitments and Contingencies

Self-insurance reserves and other commitments and contingencies

The company has recorded current liabilities of $29.8 million and $29.4 million related to self-insurance reserves at January 1, 2022 and January 2, 2021, respectively. The reserves include an estimate of expected settlements on pending claims, defense costs and a provision for claims incurred but not reported. These estimates are based on the company’s assessment of potential liability using an analysis of available information with respect to pending claims, historical experience and current cost trends.

In the event the company ceases to utilize the independent distributor model or exits a geographic market, the company is contractually required in some situations to purchase the distribution rights from the independent distributor.  The company expects to continue operating under this model and has concluded that the possibility of a loss is remote.

The company’s facilities are subject to various federal, state and local laws and regulations regarding the discharge of material into the environment and the protection of the environment in other ways. The company is not a party to any material proceedings arising under these regulations. The company believes that compliance with existing environmental laws and regulations will not materially affect the consolidated financial condition, results of operations, cash flows or the competitive position of the company. The company believes it is currently in substantial compliance with all material environmental regulations affecting the company and its properties.  

Litigation

The company and its subsidiaries from time to time are parties to, or targets of, lawsuits, claims, investigations and proceedings, including personal injury, commercial, contract, environmental, antitrust, product liability, health and safety and employment matters, which are being handled and defended in the ordinary course of business. While the company is unable to predict the outcome of these matters, it believes, based upon currently available facts, that it is remote that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations or cash flows in the future. However, adverse developments could negatively impact earnings in a particular future fiscal period.

F-54

At this time, the company is defending twenty-four complaints filed by IDPs alleging that they were misclassified as independent contractors.  Eight of these lawsuits seek class and/or collective action treatment. The remaining sixteen cases either allege individual claims or do not seek class or collective action treatment or, in cases in which class treatment was sought, the court denied class certification. The respective courts have ruled on plaintiffs’ motions for class certification in four of the pending cases, each of which is discussed below.  Unless otherwise noted, a class was conditionally certified under the FLSA in each of the cases described below, although the company has the ability to petition the court to decertify that class at a later date:

Case Name	Case No.	Venue	Date Filed	Status
Noll v. Flowers Foods, Inc., Lepage Bakeries Park Street, LLC, and CK Sales Co., LLC	1:15-cv-00493	U.S. District Court District of Maine	12/3/2015	On October 21, 2021, Flowers Foods, Inc., Lepage Bakeries Park Street, LLC and CK Sales Co., LLC reached an agreement to settle this and two other lawsuits pending in the U.S. District Court for the District of Maine – Bowen et al. v. Flowers Foods, Inc. et al. (No. 1:20-cv-00411); and Aucoin et al. v. Flowers Foods, Inc. et al (No. 1:20-cv-00410).  The settlement provides for a payment of $16.5 million, comprised of up to $9 million in settlement funds and $7.5 million in attorneys’ fees.  The settlement also requires a phased repurchase of approximately 75 distribution territories in Maine, which, once completed, the company will service its Maine market using company sales employees.  The company estimates this cost to be $6.6 million (of which $4.7 million is included in other accrued liabilities and the remainder as a contra account to notes receivable).  These amounts were recorded in the selling, distribution, and administrative expenses line item of the Consolidated Statements of Income.  The terms of the settlement require court approval.  The company remains committed to our IDP program.
Richard et al. v. Flowers Foods, Inc., Flowers Baking Co. of Lafayette, LLC, Flowers Baking Co. of Baton Rouge, LLC, Flowers Baking Co. of Tyler, LLC and Flowers Baking Co. of New Orleans, LLC	6:15-cv-02557	U.S. District Court Western District of Louisiana	10/21/2015	On April 9, 2021, the court decertified the FLSA collective action and denied plaintiffs' motion to certify under Federal Rule of Civil Procedure 23 a state law class of distributors who operated in the state of Louisiana.
Coronado v. Flowers Foods, Inc. and Flowers Baking Co. of El Paso, LLC	1:16-cv-00350	U.S. District Court District of New Mexico	4/27/2016	On August 2, 2021, the court denied defendants' motion to decertify the FLSA collective action.
Martins v. Flowers Foods, Inc., Flowers Baking Co. of Bradenton, LLC and Flowers Baking Co. of Villa Rica, LLC	8:16-cv-03145	U.S. District Court Middle District of Florida	11/8/2016

The company and/or its respective subsidiaries contests the allegations and are vigorously defending all of these lawsuits. Given the stage of the complaints and the claims and issues presented, except for lawsuits disclosed herein that have reached a settlement or agreement in principle, the company cannot reasonably estimate at this time the possible loss or range of loss that may arise from the unresolved lawsuits.

F-55

During the last three fiscal years, the company has settled, and the appropriate court has approved, the following collective and/or class action lawsuits filed by distributors alleging that such distributors were misclassified as independent contractors. In each of these settlements, in addition to the monetary terms noted below, the settlements also included certain non-economic terms intended to strengthen and enhance the independent contractor model:

Case Name	Case No.	Venue	Date Filed	Comments
Caddick et al. v. Tasty Baking Co.	2:19-cv-02106	U.S. District Court Eastern District of Pennsylvania	5/15/2019	On October 27, 2021, the Court dismissed this lawsuit and approved an agreement to settle this and a companion case (Bertino v. Tasty Baking Co., No. 2:20-cv-05823) for a payment of $3.15 million, inclusive of attorneys’ fees and cost, service awards and consideration for class members who are active distributors to enter into an amendment to their distributor agreements. This settlement charge was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the third quarter of Fiscal 2020.  The settlement was paid in early November 2021.
Rosinbaum et al. v. Flowers Foods, Inc. and Franklin Baking Co., LLC	7:16-cv-00233	U.S. District Court Eastern District of North Carolina	12/1/2015	On December 29, 2020, the Court dismissed this lawsuit and approved an agreement to settle this matter for $8.3 million, inclusive of attorneys’ fees and costs, service awards, and incentives for class members who are active distributors to enter into an amendment to their distributor agreements.  This settlement charge was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the fourth quarter of fiscal 2019 and was paid during the first quarter of Fiscal 2021.
Carr et al. v. Flowers Foods, Inc. and Flowers Baking Co. of Oxford, Inc.	2:15-cv-06391	U.S. District Court Eastern District of Pennsylvania	12/1/2015	On September 29, 2020,  the Court dismissed this lawsuit and approved an agreement to settle this matter and the Boulange matter (see below) for a payment of $13.25 million, inclusive of attorneys’ fees and costs, service awards, and incentives for class members who are active distributors to enter into an amendment to their distributor agreements.  This settlement charge was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the fourth quarter of fiscal 2019 and was paid during the fourth quarter of Fiscal 2020.
Boulange v. Flowers Foods, Inc. and Flowers Baking Co. of Oxford, Inc.	2:16-cv-02581	U.S. District Court Eastern District of Pennsylvania	3/25/2016	This matter was consolidated with the Carr litigation described immediately above.

F-56

Neff et al. v. Flowers Foods, Inc., Lepage Bakeries Park Street, LLC, and CK Sales Co., LLC	5:15-cv-00254	U.S. District Court District of Vermont	12/2/2015	On November 13, 2020, the court dismissed this lawsuit following a October 22, 2020 order approving an agreement to settle this matter for a payment of $7.6 million, inclusive of attorneys’ fees and costs, service awards, and incentives for class members who are active distributors to enter into an amendment to their distributor agreements.   This settlement charge was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the fourth quarter of Fiscal 2019 and paid during the fourth quarter of Fiscal 2020.
Green et al. v. Flowers Foods, Inc. et al.	1:19-cv-01021	U.S. District Court Western District of Tennessee	2/1/2019	*

*On September 7, 2018, the company negotiated a global settlement to resolve 12 pending collective action lawsuits against the company for a payment in the amount of $9.0 million, comprised of $5.4 million in settlement funds and $3.6 million in attorneys’ fees. The proposed settlement class consisted of approximately 900 members.  The settlement also contained certain non-economic terms intended to strengthen and enhance the independent contractor model, which remains in place.  On February 1, 2019, plaintiffs’ counsel filed a consolidated complaint with the United States District Court for the Western District of Tennessee to obtain judicial approval of the parties’ global settlement.  The court approved the global settlement on February 27, 2019.  Thereafter, the parties moved to dismiss the 12 settled lawsuits with prejudice. This settlement was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the third quarter of Fiscal 2018.  A total of $4.2 million was paid in March 2019, and a second payment of $3.5 million was made in June 2019.  The remainder of the settlement funds ($1.3 million) reverted to Flowers during the second quarter of Fiscal 2019 per the terms of the settlement, and was recorded as a reduction of selling, distribution and administrative expense in our Consolidated Statements of Income.

See Note 14, Debt and Other Commitments, for additional information on the company’s commitments.

Note 23. Unaudited Quarterly Financial Information

Results of operations for each of the four quarters in the respective fiscal years are as follows. For Fiscal 2021, each quarter represents a period of twelve weeks, except the first quarter, which includes sixteen weeks.  For Fiscal 2020, first quarter consisted of sixteen weeks, second and third quarters twelve weeks, and fourth quarter thirteen weeks. (amounts in thousands, except per share data):

		First Quarter			Second Quarter		Third Quarter		Fourth Quarter
Sales	2021	$	1,302,168		$	1,017,309	$	1,027,800	$	983,490
	2020	$	1,349,444		$	1,025,861	$	989,650	$	1,023,036
Materials, supplies, labor and other production costs    (exclusive of depreciation and amortization    shown separately)*	2021	$	643,576		$	504,062	$	515,078	$	512,531
	2020	$	670,873		$	506,033	$	497,659	$	521,577
Net income (loss)	2021	$	71,655		$	56,358	$	38,852	$	39,322
	2020	$	(5,772	)	$	57,919	$	44,347	$	55,824
Basic net income (loss) per share	2021	$	0.34		$	0.27	$	0.18	$	0.19
	2020	$	(0.03	)	$	0.27	$	0.21	$	0.26
Diluted net income (loss) per share	2021	$	0.34		$	0.26	$	0.18	$	0.18
	2020	$	(0.03	)	$	0.27	$	0.21	$	0.26

*

F-57

The company does not report gross margin.  This line item presents our material, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) under an alternative presentation.

The table below presents financial results that impact comparability, by quarter, for Fiscal 2021 (amounts in thousands):

Items presented separately on the Consolidated Statements of Income	First Quarter		Second Quarter		Third Quarter			Fourth Quarter		Fiscal 2021		Footnote
Loss (recovery) on inferior ingredients	$	122	$	—	$	(950	)	$	1,772	$	944	Note 4
Multi-employer pension plan withdrawal costs	$	—	$	—	$	3,300		$	—	$	3,300	Note 20
Pension plan settlement loss	$	—	$	—	$	—		$	403	$	403	Note 20

The table below presents financial results that impact comparability, by quarter, for Fiscal 2020 (amounts in thousands):

Items presented separately on the Consolidated Statements of Income	First Quarter		Second Quarter		Third Quarter			Fourth Quarter			Fiscal 2020		Footnote
Loss on inferior ingredients	$	—	$	—	$	—		$	107		$	107	Note 4
Restructuring and related impairment charges	$	—	$	10,535	$	20,100		$	4,848		$	35,483	Note 5
Pension plan settlement and curtailment    loss (gain)	$	116,207	$	—	$	(7,153	)	$	(297	)	$	108,757	Note 20

Note 24. Subsequent Events

The company has evaluated subsequent events since January 1, 2022, the date of these financial statements.  We believe there were no material events or transactions discovered during this evaluation that requires recognition or disclosure in the financial statements other than the items discussed below.

Dividend.    On February 18, 2022, the Board of Directors declared a dividend of $0.21 per share on the company’s common stock to be paid on March 18, 2022 to shareholders of record on March 4, 2022.

F-58

EX-4.8

Exhibit 4.8

DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED

PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

As of February [●], 2022, Flowers Foods, Inc. (the “company,” “Flowers Foods,” “us,” “we,” or “our”) has one class of securities, our common stock, registered under Section 12 of the Securities Exchange Act of 1934, as amended.

DESCRIPTION OF COMMON STOCK

The following description of our common stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Amended and Restated Articles of Incorporation (the “Articles of Incorporation”) and our Amended and Restated Bylaws (the “Bylaws”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.8 is a part. We encourage you to read our Articles of Incorporation, our Bylaws and the applicable provisions of the Georgia Business Corporation Code (“GBCC”) for additional information.

Authorized Shares of Capital Stock

Flowers Foods’ authorized capital stock consists of 500,000,000 shares of common stock having a par value of $0.01 per share and 1,000,000 shares of preferred stock. The preferred stock of which (a) 200,000 shares have been designated by the Board of Directors as Series A Junior Participating Preferred Stock, having a par value per share of $100 and (b) 800,000 shares of preferred stock, having a par value per share of $0.01, have not been designated by the Board of Directors. No shares of preferred stock have been issued by Flowers Foods.

Voting Rights

Holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders and do not have preemptive rights or cumulative voting rights.

Dividends

Subject to preferential rights of any issued and outstanding preferred stock, including the Series A Junior Participating Preferred Stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors of the company out of funds legally available.

Liquidation Rights

In the event of a liquidation, dissolution, or winding-up of the company, holders of common stock are entitled to share ratably in all assets of the company, if any, remaining after payment of liabilities and the liquidation preferences of any issued and outstanding preferred stock, including the Series A Junior Participating Preferred Stock.

Listing

Our common stock is listed on the New York Stock Exchange (NYSE) under the trading symbol “FLO.”

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Computershare Trust Company.

Certain Provisions of the Articles of Incorporation, the Bylaws and Georgia Law

Advance Notice of Proposals and Nominations

The Bylaws establish an advance notice procedure for shareholder proposals to be brought before a meeting of shareholders and for nominations by shareholders of candidates for election as directors at an annual meeting or a

special meeting at which directors are to be elected. As described more fully in the Bylaws, only such business may be conducted at a meeting of shareholders as has been brought before the meeting by, or at the direction of, our Board of Directors, or by a shareholder who has given to the Corporate Secretary timely written notice, in proper form, of the shareholder’s intention to bring that business before the meeting. The presiding officer at a shareholders meeting has the authority to make these determinations. Only persons who are nominated by, or at the direction of, our Board of Directors, or who are nominated by a shareholder who has given timely written notice, in proper form, to the Corporate Secretary prior to a meeting at which directors are to be elected will be eligible for election as our directors.

Shareholder Action by Written Consent

Our Articles of Incorporation provides that any shareholder action by written consent must be effected by holders of at least 75% of the voting power of our then outstanding common stock.

Preferred Stock

As discussed above, our Articles of Incorporation authorize the issuance of preferred stock in one or more series. Undesignated preferred stock may enable our Board of Directors to render more difficult or to discourage an attempt to obtain control of us by means of a tender offer, proxy contest, merger or otherwise, and to thereby protect the continuity of our management. The issuance of shares of preferred stock may adversely affect the rights of the holders of our common stock. For example, any preferred stock issued may rank prior to our common stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of common stock. As a result, the issuance of shares of preferred stock may discourage bids for our common stock or may otherwise adversely affect the market price of our common stock or any existing preferred stock. In some instances, the preferred stock could be issued and have the effect of preventing a merger, tender offer or other takeover attempt that the Board of Directors opposes.

Anti-Takeover Effects of Georgia Law

We have elected in our Bylaws to be subject to the Fair Price and Business Combination provisions of the GBCC.

Under the Fair Price provision, in addition to any vote required by law or by our Articles of Incorporation, “business combinations” with an “interested shareholder” must be:

• unanimously approved by “continuing directors,” if such continuing directors constitute at least three members of the Board of Directors at the time of the approval, or

• recommended by at least two-thirds of the continuing directors and approved by a majority of the votes entitled to be cast by holders of voting shares, other than voting shares beneficially owned by the “interested shareholder,” who is, or whose affiliate is, a party to the business combination.

Under the Business Combinations provision, we are generally prohibited from entering into business combination transactions with any “interested shareholder” for a five-year period following the time that such shareholder became an interested shareholder unless:

• prior to such time, the Board of Directors approved either the business combination or the transaction in which the shareholder became an interested shareholder;

• in the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder became the beneficial owner of at least 90% of the outstanding voting stock of the corporation which was not held by directors, officers, their affiliates or associates, subsidiaries or specified employee stock plans of the corporation; or

• after becoming an interested shareholder, that shareholder acquired additional shares resulting in that shareholder owning at least 90% of the outstanding voting stock of the corporation, excluding shares held by directors, officers, their affiliates or associates, subsidiaries or specified employee stock plans of the corporation, and the business combination was approved by a majority of voting stock not held by the interested shareholder, directors, officers, their affiliates or associates, subsidiaries or specified employee stock plans of the corporation.

Under the GBCC, repeal of the bylaws subjecting us to these provisions requires the affirmative vote of (i) at least 2/3 of the continuing directors, (ii) a majority of the shares of Flowers Foods other than shares beneficially owned by any interested shareholder and affiliates and associates of any interested shareholder, and (iii) 66 2/3% of the voting power of the then outstanding shares of Flowers Foods common stock and preferred stock voting together, to the extent shares of preferred stock have been afforded voting rights. A “continuing director” means (i) any director who is not an affiliate or associate of an interested shareholder or its affiliates other than Flowers Foods or our subsidiaries and who was a director prior to the date the shareholder became an interested shareholder, and (ii) any successor to that director who is not an affiliate or associate of an interested shareholder or its affiliates other than Flowers Foods or our subsidiaries and who is recommended or elected by a majority of all the continuing directors. An “interested shareholder” includes any person other than Flowers Foods or our subsidiaries that (i) with its affiliates, beneficially owns or has the right to own 10% or more of the outstanding voting power of Flowers Foods, or (ii) is an affiliate of Flowers Foods and has, at any time within the preceding two-year period, been the beneficial owner of 10% or more of the voting power of Flowers Foods.

EX-10.33

Exhibit 10.33

FLOWERS FOODS, INC.
2014 OMNIBUS EQUITY AND INCENTIVE COMPENSATION PLAN

2022 Performance Share Agreement

WHEREAS, [[FIRSTNAME]] [[LASTNAME]] (the “Grantee”) is a Participant in the Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan (the “Plan”) and is an employee of Flowers Foods, Inc. (the “Company”) or a Subsidiary; and

WHEREAS, a grant of Performance Shares to the Grantee has been duly authorized by a resolution of theCommittee as effective on January 2, 2022 (the “Date of Grant”).

NOW, THEREFORE, pursuant to the Plan, the Company hereby memorializes a grant to the Grantee, as of the Date of Grant, pursuant to this 2022 Performance Share Agreement (this “Agreement”) of (a) a Target of [[SHARESGRANTED]] Performance Shares, designated as “ROIC Shares” and (b) a Target of [[SHARESGRANTED]] Performance Shares, designated as “TSR Shares,” both of which are described in Sections 1(b) and (c), respectively (collectively, the “Stock Award”).

1.Vesting of Performance Shares.  

(a)Normal Vesting.  On the Vesting Date, the Performance Shares shall become non-forfeitable to the extent that the Performance Criteria listed in sub-sections (b) and/or (c) below have been met as of the Vesting Date, subject to the Grantee having remained in the continuous employ of the Company and/or Subsidiary until (i) the Vesting Date or (ii) December 31, 2024, if during the period beginning on December 31, 2024 and ending on the Vesting Date, one of the following occurs: (A) the Grantee’s employment with the Company terminates because of Retirement, (B) any of the occurrences specified in Section 3(d)(i), or (C) the Grantee dies or incurs a Disability.

(b)Vesting of ROIC Shares.

(i)In order for any portion of the ROIC Shares to become non-forfeitable as of the Vesting Date, the following Performance Criteria must be achieved during the period commencing January 2, 2022 and ending December 28, 2024 (the “ROIC Performance Period”):  the Company’s ROIC must exceed its WACC by 175 basis points for said period.

(ii)In the event that the requirement of subparagraph (b)(i) above is satisfied, the grant of ROIC Shares shall become non-forfeitable as indicated below.  For this purpose, the ROIC Performance Period is the twelve fiscal quarters occurring in the Company’s fiscal years 2022, 2023, and 2024.

- 1 -

Difference (or “Spread”) ROIC minus WACC	Non-Forfeitable Percentage (% of Target)
Less than 175 basis points	0%
175 basis points	50%
375 basis points	100%
475 basis points or above	125%
Straight-line interpolation between points

(c)Vesting of TSR Shares.  In order for any portion of the TSR Shares to become non-forfeitable as of the Vesting Date, the following Performance Criteria must be achieved: the relative performance of the Flowers TSR determined for the period commencing January 1, 2022 and ending December 31, 2024 (the “TSR Performance Period”) compared to the Peer Group TSRs for the same period equals or exceeds the thirtieth Percentile (30%), calculated as follows:

The final four hypothetical payouts relating to Flowers TSR, based on the table below, from January 1, 2022 through the calendar quarter ending prices for March 31, 2024, June 30, 2024, September 30, 2024 and December 31, 2024 (the “TSR Measurement Periods”) will be averaged to determine the final percent of TSR Shares that become non-forfeitable.

Percentile Flowers TSR vs. Peer Group TSRs	Non-Forfeitable Percentage (% of Target)
Less than 30th	0%
30th	50%
50th	100%
70th	150%
90th or above	200%
Straight-line interpolation between points

2.Distribution.  ROIC Shares and TSR Shares that become non-forfeitable under Section 1 shall be distributed as soon as practicable after the Vesting Date, but notwithstanding anything to the contrary, in all events within the “short-term deferral” period determined under Treasury Regulation Section 1.409A-1(b)(4).

3.Continuous Employment; Early Termination of Employment.

(a)Continuous Employment.  For purposes of this Agreement, the Grantee’s employment with the Company or Subsidiary will be deemed to have ceased as of the last day worked.  In the case of a Grantee having received short term disability benefits, employment will be deemed to have ceased on the last day for which such short term benefits are paid, unless the Grantee immediately returns to active employment.  For the purposes of this Agreement, the continuous employment of the Grantee with the Company or a Subsidiary will not be deemed to have been interrupted, and the Grantee will not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (i)

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the termination of his employment by the Company or a Subsidiary and immediate rehire by the Company (if the Company was not the original employer) or by another Subsidiary or (ii) an approved leave of absence.

(b)Vesting Upon Retirement.  In the event that the Grantee’s employment with the Company shall terminate prior to December 31, 2024 because of Retirement in the absence of Cause, a pro rata portion of the ROIC Shares and the TSR Shares shall become non-forfeitable on the Vesting Date based on the actual performance achieved under Section 1(b) and (c) whereby the pro rata portion shall be determined by dividing the number of complete calendar quarters in the applicable performance period until Retirement by twelve (12).  The distribution of the non-forfeitable ROIC Shares and TSR Shares under this Section 3(b) shall be made at the same time as the distribution of the Performance Shares that would have been made under Section 2.

(c)Vesting Upon Disability or Death.  Notwithstanding the provisions of Sections 1, 2 and 3(b), in the event of the Grantee’s death or Disability prior to December 31, 2024, the ROIC Shares and TSR Shares shall become non-forfeitable at Target and such vested Stock Award shall be distributed within ten (10) business days of the applicable occurrence, but notwithstanding anything to the contrary, in all events within the “short-term deferral” period determined under Treasury Regulation Section 1.409A-1(b)(4).

(d)Vesting Upon Change in Control.  Notwithstanding the provisions of Sections 1, 2 and 3(b), in the event of either:

(i)a termination of employment prior to December 31, 2024, either within two (2) years after a Change in Control (in which case the occurrence shall be the termination of employment) or during the six (6) month period prior to a Change in Control (in which case vesting is contingent on the occurrence of the Change in Control and the occurrence shall be the Change in Control), where either the Grantee is involuntarily terminated from employment for reasons other than for Cause, or the Grantee terminates his or her employment for Good Reason, or

(ii)a Change in Control prior to December 31, 2024 where the Stock Award is not assumed or converted into replacement awards in connection with the Change in Control,

then (1) ROIC Shares shall become non-forfeitable at Target, and (2) TSR Shares shall become non-forfeitable as follows:  (x) if at least twelve (12) months of the TSR Performance Period have been completed as of the date of the occurrence, non-forfeitability is based on TSR as of the date of occurrence without application of 4-quarter averaging, or (y) if at least twelve (12) months of the TSR Performance Period have not been completed, non-forfeitability is at Target.  Such vested Stock Award shall be distributed within ten (10) business days of the applicable occurrence, but notwithstanding anything to the contrary, in all events within the “short-term deferral” period determined under Treasury Regulation Section 1.409A-1(b)(4).

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4.Vesting Definitions.

(i)“Retirement” means termination of employment after either (A) attainment of age sixty-five (65), or (B) attainment of age fifty-five (55) provided the Grantee has accrued ten (10) years of service.

(ii)“Vesting Date” means the date that the Company files its Annual Report on Form 10‑K with the Securities and Exchange Commission reflecting the certification of the Performance Criteria set forth in Section 1, or if earlier March 14, 2025.

(iii)“Flowers TSR” means (A) the Company’s Common Stock price change plus dividends (which are assumed to be reinvested as paid out to shareholders) compared to (B) the price of a share of Common Stock determined on the trading day immediately preceding the commencement of the TSR Performance Period.

(iv)“ROIC” means the time-weighted quarterly average during the ROIC Performance Period of the sum of net income and after-tax interest expense divided by the sum of the time-weighted two-point average quarterly book value of the Company’s debt and the time-weighted two-point average quarterly book value of the Company’s equity capital.  GAAP amounts used in the calculation of ROIC shall be adjusted for items that in the Committee’s judgment affect comparability during the ROIC Performance Period and/or between the numerator and denominator.  An example calculation is set forth on Attachment A.

(v)“Peer Group TSRs” mean the total shareholder returns (“TSR”) calculated as described in the definition of Flowers TSR but determined for each of the following seventeen (17) peer group companies:  B&G Foods, Inc., Campbell Soup Company, ConAgra Brands, Inc., General Mills, Inc., The Hain Celestial Group, Inc., The Hershey Company, Hormel Foods Corp., Hostess Brands, Inc., J & J Snack Foods Corp., Kellogg Company, The Kraft Heinz Company, Lancaster Colony Corp., McCormick & Company, Inc., Mondelez International, Inc., Post Holdings, Inc., The J.M. Smucker Company, and TreeHouse Foods, Inc.  The Peer Group TSRs shall be adjusted as follows for the following events:  (x) peer group companies filing for bankruptcy during the TSR Measurement Period will be considered to have negative one hundred percent (-100%) TSR and (y) peer group companies that are acquired during the TSR Measurement Period shall (1) be excluded if they enter into a definitive agreement to be acquired during the first year of the TSR Performance Period and (2) be positioned relative to the Flowers TSR based on both companies’ TSRs through the trading day which is twenty (20) trading days before the acquired company announces the transaction if they enter into a definitive agreement to be acquired after the first year of the TSR Performance Period.  If a peer group company is subsumed by merger (i.e., no longer exists after the merger is consummated), it will be eliminated for that TSR Measurement Period and any subsequent TSR Measurement Periods.

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(vi)“Percentile” means the rank order from the bottom of the Flowers TSR vs. the Peer Group TSRs on a scale of 100, as calculated by Microsoft Excel®, with the Company included in the group for this purpose.

(vii)“ROIC Performance Period” means January 2, 2022 through December 28, 2024.

(viii)“TSR Performance Period” means January 1, 2022 through December 31, 2024.

(ix)“TSR Measurement Periods” means January 1, 2022 through each respective calendar quarter ending March 31, June 30, September 30 and December 31, 2024.

(x)“Performance Criteria” means the Management Objectives approved by the Committee which set forth the performance standards applicable to each of the ROIC Shares and the TSR Shares.

(xi)“Target” means the payment percentage equaling 100% relative to a designated level of achievement of the applicable Performance Criteria set forth in the table providing the range of potential payment opportunities for each of the ROIC Shares and the TSR Shares.

(xii)“WACC” means the time-weighted quarterly average during the ROIC Performance Period of D times R_d multiplied by D/V, and E times R_e multiplied by E/V, where:

(A) “D” equals the time-weighted average quarterly book value of the Company’s interest-bearing debt obligations;

(B) “R_d” equals the time-weighted average quarterly value of the Company’s after-tax cost of debt, as determined by the Committee’s business judgment and considering market conditions;

(C) “E” equals the time-weighted average quarterly market value of the Company’s equity capital;

(D) “R_e” equals the time-weighted average quarterly value of the Company’s cost of equity, as determined by the Committee’s business judgment and considering market conditions, with the value for the measure of the stock’s volatility (beta) fixed at the beginning of the ROIC Performance Period;

(E) “V” equals the sum of the time-weighted average quarterly book value of the Company’s interest-bearing obligations and the time-weighted average quarterly market value of the Company’s equity capital.

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GAAP and other amounts used in the calculation of WACC shall be adjusted for items that in the Committee’s judgement, and as agreed to by the Company’s external auditors, affect comparability during the measurement period.  An example calculation is set forth on Attachment A.

(xiii)“Cause” means:

(A) any willful or negligent material violation of any applicable securities laws (including the Sarbanes-Oxley Act of 2002);

(B) any act of fraud, intentional misrepresentation, embezzlement, dishonesty, misappropriation or conversion of any asset or business opportunity of the Company;

(C) conviction of, or entering into a plea of nolo contendere to, a felony;

(D) an intentional, repeated or continuing violation of any of the Company’s policies or procedures that occurs or continues after the Company has given notice to the Grantee that he or she has materially violated a Company policy or procedure;

(E) any breach of a written covenant or agreement with the Company, including the terms of this Plan (other than a failure to perform Grantee’s duties with the Company resulting from the Grantee’s incapacity due to physical or mental illness or from the assignment to the Grantee of duties that would constitute Good Reason), which is material and which is not cured within thirty (30) days after written notice thereof from the Company to the Grantee;

(F) abuse of alcohol or drugs; or

(G) failure to reasonably cooperate in a governmental or Board investigation.

(xiv)“Good Reason” means a timely termination of employment for any of the reasons set forth in (A) through (H) below, but only if (I) is satisfied:

(A) a material diminution in the Grantee’s duties, responsibilities or authority (for the avoidance of doubt, a change in title or reporting alone does not constitute “Good Reason” under this subsection (A).);

(B) a material reduction by the Company of the Grantee’s base salary;

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(C) a material reduction by the Company of the Grantee’s target bonus opportunity;

(D) a material reduction in long-term incentives from the year prior to the Change in Control, as measured by grant date economic values determined by a third-party compensation firm chosen by the Company and using generally accepted methodologies, which may include annualizing prior year long-term incentive grants over more than one year and ignoring prior special retention or sign-on grants;

(E) a material failure of the successor entity to cover the Grantee under the savings and retirement plans provided to similarly situated executives;

(F) the relocation of the Company’s principal executive offices more than fifty (50) miles from their current location, if at the time of a Change in Control the Grantee is based at the Company’s principal executive offices, or the requirement of the Grantee to be based at a location more than fifty (50) miles from the Grantee’s location as of the Change of Control;

(G) any purported termination by the Company of the Grantee’s employment upon the occurrence of a Change in Control except for Cause; or

(H) any failure by a successor company to assume on behalf of its participants the Flowers Foods Inc., Change of Control Plan (the “COC Severance Plan”), or any action by the successor company to amend such COC Severance Plan in violation of its terms;¹

but provided that,

(I) the Grantee gives the Company timely notice of the “Good Reason” event and a reasonable amount of time to cure such “Good Reason” event.

For purposes of subsection (I) above, before a termination by a Grantee will constitute termination for Good Reason, the Grantee must give the Company a notice of termination of employment within ninety (90) calendar days following the occurrence of the event that constitutes Good Reason.  For a Grantee who terminates prior to and in anticipation of a Change in Control during the period that is six (6) months preceding the Change in Control date, the period in which the Grantee must give the Company a notice of termination of employment is the later of (x) ninety (90) calendar days following the occurrence of the event that constitutes Good Reason and (y) the Change in Control.²  Failure to provide such notice of termination of employment within such applicable period shall be conclusive proof that the Grantee shall not have Good Reason to terminate employment.

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Good Reason shall exist only if (i) the Company fails to remedy the event or events constituting Good Reason within thirty (30) calendar days after receipt of the notice of termination of employment from the Grantee and (ii) the Grantee terminates his or her employment within one hundred eighty (180) days after the date that the Grantee first has knowledge of the existence of any event or condition described in clauses (A) through (H) above.

Forfeiture of Stock Award.

(a) If the Grantee ceases to be continuously employed by the Company and/or Subsidiary at any time prior to the Vesting Date, any portion of the Stock Award that has not theretofore become non-forfeitable in accordance with the terms of Sections 1 and 2 shall be forfeited, except as provided in Section 3.

(b)In any event, if, prior to the entire Stock Award becoming non-forfeitable, the Grantee is demoted due to Cause or poor performance from the position of employment held by the Grantee on the Date of Grant to a position which would not have been eligible for a grant of Performance Shares pursuant to the Committee’s guidelines as of the Date of Grant, then the Grantee shall forfeit a fraction of the Stock Award, but shall, subject to the provisions of this Agreement, be entitled to retain the remaining fraction of the initial Stock Award.  The fraction of the Stock Award that the Grantee is entitled to retain is a fraction that is equal to the number of the Company’s complete fiscal quarters of the applicable performance period in which the Grantee is employed in the position held by the Grantee on the Date of Grant (beginning with January 2, 2022 and terminating with the quarter in which or with which demotion occurs) divided by twelve (12).  Notwithstanding the foregoing, solely for purposes of this Agreement, the Committee may determine in its sole discretion that an apparent demotion (meaning not due to Cause or poor performance, as opposed to an actual demotion) shall not cause a forfeiture.

6.Dividend, Voting and Other Rights.  Except as otherwise provided in this Section 6, the Grantee shall have none of the rights of a stockholder with respect to the Stock Award.  A notional cash account for the Grantee shall be credited with an amount equal to any cash dividends paid by the Company on its Common Stock during the full or partial performance period as determined under Sections 1 through 5.  Such notional cash dividends shall become non-forfeitable only with respect to the corresponding portion of the Stock Award that ultimately vests in accordance with Sections 1 through 5.  Non-forfeitable notional cash dividends will be distributed in cash, without interest, when the corresponding vested portion of the Stock Award is paid out as set forth in Sections 2 and 3.

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7.Settlement.  The shares of Common Stock underlying the Stock Award ultimately earned and vested shall not be issued or delivered to the Grantee until payout.  The Company may deliver the Common Stock by delivery of physical certificates or by certificate-less book-entry issuance.

8.Restrictions on Transfer of Stock Award.  The Stock Award and the shares underlying it may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by the Grantee, except to the Company, until such shares underlying the Stock Award have been paid out.  Any purported transfer, encumbrance or other disposition of the Stock Award or the shares underlying it that is in violation of this Section 8 shall be null and void, and the other party to any such purported transaction shall not obtain any rights to or interest in the Stock Award or such shares.

9.Compliance with Law.  The Company will make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any restricted or non-restricted shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law.  Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement prevents the Grantee from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity the Grantee is not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.³

10.Adjustments.  The Committee will make such adjustments in the number and kind of shares of stock or other securities covered by this Agreement as provided for in Section 11 of the Plan.

11.Taxes and Withholding.  To the extent that the Company or Subsidiary is required to withhold any federal, state, local or foreign tax in connection with the issuance or vesting of any portion of the Stock Award or other amounts pursuant to this Agreement, and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the delivery of the shares to the Grantee that the Grantee shall pay the tax in cash or make provisions that are satisfactory to the Company for the payment thereof.

12.No Right to Future Awards or Employment.  The grant of the Stock Award under this Agreement to the Grantee is a voluntary, discretionary award being made on a one-time basis and it does not constitute a commitment to make any future awards.  The grant of the Stock Award and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law.   The Plan and this Agreement will not confer upon the Grantee any right with respect to the continuance of employment or other service with the Company or any Subsidiary and will not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any employment or other service of the Grantee at any time.

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13.Relation to Other Benefits.  Any economic or other benefit to the Grantee under this Agreement will not be taken into account in determining any benefits to which the Grantee may be entitled under any profit‑sharing, retirement, or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or any Subsidiary, unless provided otherwise in any such plan.

14.Agreement Subject to the Plan.  The Stock Award granted under this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan.  Capitalized terms in this Agreement may be defined herein, defined in the Plan, or defined in both places.  In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan will govern.  The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the Stock Award or its vesting.

15.Recoupment.  In the event the Board has reliable evidence of knowing misconduct by the Grantee that resulted in the incorrect overstatement of the Company’s earnings or other financial measurements which were taken into consideration with respect to Management Objectives, and the Grantee either received an award of Option Rights, Restricted Stock, Performance Shares, Performance Units or any other award granted under the Plan, or such awards vested or became non-forfeitable as a result of such overstatement, the Board shall require that the Grantee reimburse the Company or forfeit, as applicable, the full amount of any awards granted pursuant to the Plan that resulted from such overstatement.  The remedy specified in this Section 15 shall not be exclusive, and shall be in addition to every other right or remedy at law or in equity that may be available to the Company.

In addition, and notwithstanding anything in this Agreement to the contrary, the Grantee acknowledges and agrees that this Agreement and the award described herein are subject to the terms and conditions of the Company’s Clawback Policy, as it may be amended from time, or any other applicable recoupment, recapture, clawback, or recovery policy of the Company as adopted by the Board or the Committee and in effect from time to time (the “Compensation Recovery Policy”), and that applicable provisions of this Agreement shall be deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date hereof.  A copy of the Compensation Recovery Policy is available upon request.

16.Amendments.  Subject to the terms of Section 17 of the Plan, any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment will materially and adversely affect the rights of the Grantee under this Agreement without the Grantee’s consent, except that the Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act.

17.Severability.  In the event that one or more of the provisions of this Agreement is invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.

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18.Successors and Assigns.  Without limiting Section 8 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

19.Governing Law.  This Agreement will be governed by and construed in accordance with the internal substantive laws of the State of Georgia.

20.Notices.  Any notice to the Company provided for herein shall be in writing to the Company at the principal executive office of the Company, marked Attention:  Corporate Secretary, and any notice to the Grantee shall be addressed to said Grantee at his or her address then currently on file with the Company.  Except as otherwise provided herein, any written notice shall be deemed to be duly given if and when delivered personally or deposited in the United States mail, first class registered mail, postage and fees prepaid, and addressed as aforesaid.  Any party may change the address to which notices are to be given hereunder by written notice to the other party as herein specified (provided that for this purpose, any mailed notice shall be deemed given on the third business day following deposit of the same in the United States mail).

21.Certain Additional Defined Terms.  In addition to the following defined terms and terms defined elsewhere herein, when used in the Agreement, terms with initial capital letters have the meaning given such term under the Plan, as in effect from time to time.

(a)“Board” means the Board of Directors of the Company.

(b)“Change in Control” shall mean the consummation of any Change in Control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, as determined by the Board, in its sole discretion; provided that, without limitation, such a Change in Control shall be deemed to have occurred if:

(i)any Person (as such term is defined in Sections 13(d) or 14(d)(2) of the Exchange Act; hereafter, a “Person”) is on the date hereof or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 35% or more of the Voting Power; provided, however, that for purposes of this Section 21(b), the following rules shall apply:

(A) (1) a Change in Control will not be deemed to have occurred in the case of any acquisition of Voting Power directly from the Company that is approved by a majority of those persons serving as directors of the Company on the date of this Plan (the “Original Directors”) or their Successors (as defined below), (2) any acquisition of Voting Power by the Company, or any Subsidiary, and (3) any acquisition of Voting Power by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary (the term “Successors” shall mean those directors whose election or nomination for election by stockholders has been approved by the vote of at least two-thirds of the Original Directors and previously

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qualified Successors serving as directors of the Company, as the case may be, at the time of such election or nomination for election);

(B) if any Person is or becomes the beneficial owner of 35% or more of the Voting Power as a result of a transaction described in clause (A) of this Section 21(b)(i) above and such Person thereafter becomes the beneficial owner of any additional shares of Voting Power representing 1% or more of the then-outstanding Voting Power other than in an acquisition directly from the Company that is approved by a majority of the Original Directors or their Successors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Power are treated equally, such subsequent acquisition shall be treated as a Change in Control;

(C) a Change in Control will not be deemed to have occurred if a Person is or becomes the beneficial owner of 35% or more of the Voting Power as a result of a reduction in the number of shares of Voting Power outstanding pursuant to a transaction or series of transactions that is approved by a majority of the Original Directors or their Successors unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Power representing 1% or more of the then-outstanding Voting Power other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Power are treated equally; or

(D) if at least a majority of the Original Directors or their Successors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Power inadvertently, and such Person divests as promptly as practicable but no later than the date, if any, set by the Original Directors or their Successors a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Power, then no Change in Control shall have occurred as a result of such Person’s acquisition.

(ii)The Company consummates a merger or consolidation in which stockholders of the Company immediately prior to entering into such agreement will beneficially own, immediately after the effective time of the merger or consolidation, securities of the Company or any surviving or new corporation, as the case may be, having less than 60% of the Voting Power of any surviving or new corporation, as the case may be, including Voting Power exercisable on a contingent or deferred basis as well as immediately exercisable Voting Power, excluding any merger or combination of a wholly owned Subsidiary into the Company, or the Company into a wholly owned Subsidiary; or

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(iii)The Company consummates a sale, lease, exchange or other transfer or disposition of all or substantially all of its assets to any Person other than to a wholly owned Subsidiary, but not including (A) a mortgage or pledge of assets granted in connection with a financing or (B) a spin-off or sale of assets if the Company continues in existence and its common shares are listed on a  national securities exchange, quoted on the automated quotation system of a national securities association or traded in the over-the-counter market; or

(iv)the Original Directors and/or their Successors as defined above in Section 21(b)(i)(A) of this definition do not constitute a majority of the whole Board as the case may be; or

(v)approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, as the case may be.

(c)“Subsidiary” means a corporation, company or other entity (i) more than fifty percent (50%) of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than fifty percent (50%) of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.

(d)“Voting Power” means, at any time, the combined voting power of the then outstanding securities entitled to vote generally in the election of Directors in the case of the Company, or the members of the board of directors or similar body in the case of another entity.

22.Compliance with Section 409A of the Code.  To the extent applicable, it is intended that this Agreement and the Plan comply with, or be exempt from, the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) do not apply to the Grantee.  This Agreement in conjunction with the terms of the Plan shall be administered in a manner consistent with this intent.  Any amendments made to comply with Section 409A of the Code may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee.  In any case, the Grantee shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed in connection with this Agreement (including any taxes and penalties under Section 409A of the Code), and the Company shall not have any obligation to indemnify or otherwise hold the Grantee harmless from any or all of such taxes or penalties.

23.Electronic Delivery.  The Company may, in its sole discretion, deliver any documents related to the Stock Award and the Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee’s consent to participate in the Plan by electronic means.  The Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

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24.Acknowledgement.  The Grantee acknowledges that the Grantee (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

25.Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

26.Data Protection.  By signing below, the Grantee consents that the Company may process the Grantee’s personal data, including name, Social Security number, address and number of shares of the Stock Award (“Data”), exclusively for the purpose of performing this Agreement, in particular in connection with the Stock Award awarded to the Grantee.  For this purpose, the Data may also be disclosed to and processed by companies outside the Company, e.g., banks involved.

(Signature follows on the next page)

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer as of the day and year first above written.

FLOWERS FOODS, INC.
By:	/s/ R. Steve Kinsey

R. Steve Kinsey
Chief Financial & Accounting Officer

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EX-10.34

Exhibit 10.34

FLOWERS FOODS, INC.

2014 OMNIBUS EQUITY AND INCENTIVE COMPENSATION PLAN

2022 Time Based Restricted Stock Unit Agreement

WHEREAS, [[FIRSTNAME]] [[LASTNAME]] (the “Grantee”) is a Participant in the Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan (the “Plan”) and is an employee of Flowers Foods, Inc. (the “Company”) or a Subsidiary; and

WHEREAS, a grant of Restricted Stock Units to the Grantee has been duly authorized by a resolution of theCommittee as effective on January 2, 2022 (the “Date of Grant”).

NOW, THEREFORE, pursuant to the Plan, the Company hereby memorializes a grant to the Grantee, as of the Date of Grant, pursuant to this 2022 Time Based Restricted Stock Unit Agreement (this “Agreement”) of [[SHARESGRANTED]] time based Restricted Stock Units (the “TBRSUs”).

1.Vesting of Restricted Stock Units.  The TBRSUs will become non-forfeitable over the period running through January 5, 2025, with approximately one-third (1/3) of the TBRSUs becoming non-forfeitable on each of (a) January 5, 2023, (ii) January 5, 2024, and (c) January 5, 2025, subject to the Grantee having remained in the continuous employ of the Company and/or Subsidiary until said date.

2.Distribution.  Shares underlying TBRSUs that become non-forfeitable under Section 1 shall be distributed as soon as practicable after the applicable date upon which such TBRSUs become non-forfeitable, but notwithstanding anything to the contrary, in all events within the “short-term deferral” period determined under Treasury Regulation Section 1.409A-1(b)(4).

3.Continuous Employment; Early Termination of Employment.

(a)Continuous Employment.  For purposes of this Agreement, the Grantee’s employment with the Company or Subsidiary will be deemed to have ceased as of the last day worked.  In the case of a Grantee having received short term disability benefits, employment will be deemed to have ceased on the last day for which such short term benefits are paid, unless the Grantee immediately returns to active employment.  For the purposes of this Agreement, the continuous employment of the Grantee with the Company or a Subsidiary will not be deemed to have been interrupted, and the Grantee will not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (i) the termination of his employment by the Company or a Subsidiary and immediate rehire by the Company (if the Company was not the original employer) or by another Subsidiary or (ii) an approved leave of absence.

(b)Vesting Upon Retirement.  In the event that the Grantee’s employment with the Company shall terminate prior to January 5, 2025 because of Retirement in the absence of Cause, a portion of any TBRSUs which are forfeitable as of such date shall become non-forfeitable, with such portion being equal to (i) the total number of TBRSUs granted hereunder, multiplied by a fraction, the numerator of which is the number of complete

1

calendar quarters which have elapsed from the Date of Grant to the date of Retirement, and the denominator of which is twelve (12), less (ii)  the number of TBRSUs granted hereunder that have already become non-forfeitable hereunder.  The distribution of shares underlying the TBRSUs which become non-forfeitable under this Section 3(b) shall be made within thirty (30) days after the end of the calendar year of the Retirement, but notwithstanding anything to the contrary, in all events within the “short-term deferral” period determined under Treasury Regulation Section 1.409A-1(b)(4).

(c)Vesting Upon Disability or Death.  Notwithstanding the provisions of Sections 1, 2 and 3(b), in the event of the Grantee’s death or Disability prior to January 5, 2025, then all of Grantee’s forfeitable TBRSUs shall immediately become non-forfeitable and shares underlying such TBRSUs shall be distributed within ten (10) business days of the applicable occurrence, but notwithstanding anything to the contrary, in all events within the “short-term deferral” period determined under Treasury Regulation Section 1.409A-1(b)(4).

(d)Vesting Upon Change in Control.  Notwithstanding the provisions of Sections 1, 2 and 3(b), in the event of either:

(i)a termination of employment prior to January 5, 2025, either within two (2) years after a Change in Control (in which case the occurrence shall be the termination of employment) or during the six (6) month period prior to a Change in Control (in which case vesting is contingent on the occurrence of the Change in Control and the occurrence shall be the Change in Control), where either the Grantee is involuntarily terminated from employment for reasons other than for Cause, or the Grantee terminates his or her employment for Good Reason, or

(ii)a Change in Control prior to January 5, 2025 where the TBRSUs are not assumed or converted into replacement awards in connection with the Change in Control, then all of Grantee’s forfeitable TBRSUs shall immediately become non-forfeitable and shares underlying such TBRSUs shall be distributed within ten (10) business days of the applicable occurrence, but notwithstanding anything to the contrary, in all events within the “short-term deferral” period determined under Treasury Regulation Section 1.409A-1(b)(4).

4.Vesting Definitions.

(i)“Retirement” means termination of employment after either (A) attainment of age sixty-five (65), or (B) attainment of age fifty-five (55) provided the Grantee has accrued ten (10) years of service.

(ii)“Cause” means:

(A) any willful or negligent material violation of any applicable securities laws (including the Sarbanes-Oxley Act of 2002);

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(B) any act of fraud, intentional misrepresentation, embezzlement, dishonesty, misappropriation or conversion of any asset or business opportunity of the Company;

(C) conviction of, or entering into a plea of nolo contendere to, a felony;

(D) an intentional, repeated or continuing violation of any of the Company’s policies or procedures that occurs or continues after the Company has given notice to the Grantee that he or she has materially violated a Company policy or procedure;

(E) any breach of a written covenant or agreement with the Company, including the terms of this Plan (other than a failure to perform Grantee’s duties with the Company resulting from the Grantee’s incapacity due to physical or mental illness or from the assignment to the Grantee of duties that would constitute Good Reason), which is material and which is not cured within thirty (30) days after written notice thereof from the Company to the Grantee;

(F) abuse of alcohol or drugs; or

(G) failure to reasonably cooperate in a governmental or Board investigation.

(iii)“Good Reason” means a timely termination of employment for any of the reasons set forth in (A) through (H) below, but only if (I) is satisfied:

(A) a material diminution in the Grantee’s duties, responsibilities or authority (for the avoidance of doubt, a change in title or reporting alone does not constitute “Good Reason” under this subsection (A).);

(B) a material reduction by the Company of the Grantee’s base salary;

(C) a material reduction by the Company of the Grantee’s target bonus opportunity;

(D) a material reduction in long-term incentives from the year prior to the Change in Control, as measured by grant date economic values determined by a third-party compensation firm chosen by the Company and using generally accepted methodologies, which may include annualizing prior year long-term incentive grants over more than one year and ignoring prior special retention or sign-on grants;

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(E) a material failure of the successor entity to cover the Grantee under the savings and retirement plans provided to similarly situated executives;

(F) the relocation of the Company’s principal executive offices more than fifty (50) miles from their current location, if at the time of a Change in Control the Grantee is based at the Company’s principal executive offices, or the requirement of the Grantee to be based at a location more than fifty (50) miles from the Grantee’s location as of the Change of Control;

(G) any purported termination by the Company of the Grantee’s employment upon the occurrence of a Change in Control except for Cause; or

(H) any failure by a successor company to assume on behalf of its participants the Flowers Foods Inc., Change of Control Plan (the “COC Severance Plan”), or any action by such successor company to amend the COC Severance Plan in violation of its terms;¹ but provided that,

(I) the Grantee gives the Company timely notice of the “Good Reason” event and a reasonable amount of time to cure such “Good Reason” event.

For purposes of subsection (I) above, before a termination by a Grantee will constitute termination for Good Reason, the Grantee must give the Company a notice of termination of employment within ninety (90) calendar days following the occurrence of the event that constitutes Good Reason.  For a Grantee who terminates prior to and in anticipation of a Change in Control during the period that is six (6) months preceding the Change in Control date, the period in which the Grantee must give the Company a notice of termination of employment is the later of (x) ninety (90) calendar days following the occurrence of the event that constitutes Good Reason and (y) the Change in Control.²  Failure to provide such notice of termination of employment within such applicable period shall be conclusive proof that the Grantee shall not have Good Reason to terminate employment.

Good Reason shall exist only if (i) the Company fails to remedy the event or events constituting Good Reason within thirty (30) calendar days after receipt of the notice of termination of employment from the Grantee and (ii) the Grantee terminates his or her employment within one hundred eighty (180) days after the date that the Grantee first has knowledge of the existence of any event or condition described in clauses (A) through (H) above.

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5.Forfeiture of TBRSUs.

(a)If the Grantee ceases to be continuously employed by the Company and/or Subsidiary at any time prior to all of the TBRSUs becoming non-forfeitable, any portion of the TBRSUs that has not theretofore become non-forfeitable in accordance with the terms of Sections 1 and 2 shall be forfeited, except as provided in Section 3.

(b)In any event, if, prior to all of the TBRSUs becoming non-forfeitable, the Grantee is demoted due to Cause or poor performance from the position of employment held by the Grantee on the Date of Grant to a position which would not have been eligible for a grant of TBRSUs pursuant to the Committee’s guidelines as of the Date of Grant, then the Grantee shall forfeit a fraction of the forfeitable TBRSUs, but shall be entitled to retain the remaining fraction of the forfeitable TBRSUs, subject to the provisions of this Agreement.  The fraction of the forfeitable TBRSUs that the Grantee is entitled to retain is a fraction that is equal to the number of forfeitable TBRSUs as of the date of the demotion, multiplied by a fraction, the numerator of which is the number of days that have elapsed from January 1, 2022 to the date of the demotion, and the denominator of which is 1,095.  Notwithstanding the foregoing, solely for purposes of this Agreement, the Committee may determine in its sole discretion that an apparent demotion (meaning not due to Cause or poor performance, as opposed to an actual demotion) shall not cause a forfeiture.

6.Dividend, Voting and Other Rights.  Except as otherwise provided in this Section 6, the Grantee shall have none of the rights of a stockholder with respect to the TBRSUs.  A notional cash account for the Grantee shall be credited with an amount equal to any cash dividends paid by the Company on its Common Stock during the full or partial vesting period as determined under Sections 1 through 5.  Such notional cash dividends shall become non-forfeitable only with respect to the corresponding portion of the TBRSUs that ultimately becomes non-forfeitable in accordance with Sections 1 through 5.  Non-forfeitable notional cash dividends will be distributed in cash, without interest, when the corresponding shares underlying the nonforfeitable TBRSUs are paid out as set forth in Sections 2 and 3.

7.Settlement.  Non-forfeitable TBRSUs shall be settled in accordance with Sections 2 and 3 above by delivering to you a number of shares of Common Stock equal to the number of non-forfeitable TBRSUs.  The Company may deliver the Common Stock by delivery of physical certificates or by certificate-less book-entry issuance.

8.Restrictions on Transfer of TBRSUs.  The TBRSUs and the shares underlying them may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by the Grantee, except to the Company, until shares underlying the TBRSUs have been paid out.  Any purported transfer, encumbrance or other disposition of the TBRSUs or the shares underlying them that is in violation of this Section 8 shall be null and void, and the other party to any such purported transaction shall not obtain any rights to or interest in the TBRSUs or such shares.

9.Compliance with Law.  The Company will make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any restricted or non-restricted shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law.  Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement prevents the Grantee from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations

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or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity the Grantee is not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.³

10.Adjustments.  The Committee will make such adjustments in the number and kind of shares of stock or other securities covered by this Agreement as provided for in Section 11 of the Plan.

11.Taxes and Withholding.  To the extent that the Company or Subsidiary is required to withhold any federal, state, local or foreign tax in connection with the issuance or vesting of any portion of the TBRSUs or other amounts pursuant to this Agreement, and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the delivery of the shares to the Grantee that the Grantee shall pay the tax in cash or make provisions that are satisfactory to the Company for the payment thereof.

12.No Right to Future Awards or Employment.  The grant of the TBRSUs under this Agreement to the Grantee is a voluntary, discretionary award being made on a one-time basis and it does not constitute a commitment to make any future awards.  The grant of the TBRSUs and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law.  The Plan and this Agreement will not confer upon the Grantee any right with respect to the continuance of employment or other service with the Company or any Subsidiary and will not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any employment or other service of the Grantee at any time.

13.Relation to Other Benefits.  Any economic or other benefit to the Grantee under this Agreement will not be taken into account in determining any benefits to which the Grantee may be entitled under any profit‑sharing, retirement, or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or any Subsidiary, unless provided otherwise in any such plan.

14.Agreement Subject to the Plan.  The TBRSUs granted under this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan.  Capitalized terms in this Agreement may be defined herein, defined in the Plan, or defined in both places.  In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan will govern.  The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the TBRSUs or its vesting.

15.Amendments.  Subject to the terms of Section 17 of the Plan, any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment will materially and adversely affect

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the rights of the Grantee under this Agreement without the Grantee’s consent, except that the Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act.

16.Severability.  In the event that one or more of the provisions of this Agreement is invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.

17.Successors and Assigns.  Without limiting Section 8 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

18.Governing Law.  This Agreement will be governed by and construed in accordance with the internal substantive laws of the State of Georgia.

19.Notices.  Any notice to the Company provided for herein shall be in writing to the Company at the principal executive office of the Company, marked Attention:  Corporate Secretary, and any notice to the Grantee shall be addressed to said Grantee at his or her address then currently on file with the Company.  Except as otherwise provided herein, any written notice shall be deemed to be duly given if and when delivered personally or deposited in the United States mail, first class registered mail, postage and fees prepaid, and addressed as aforesaid.  Any party may change the address to which notices are to be given hereunder by written notice to the other party as herein specified (provided that for this purpose, any mailed notice shall be deemed given on the third business day following deposit of the same in the United States mail).

20.Certain Additional Defined Terms.  In addition to the following defined terms and terms defined elsewhere herein, when used in the Agreement, terms with initial capital letters have the meaning given such term under the Plan, as in effect from time to time.

(a)“Board” means the Board of Directors of the Company.

(b)“Change in Control” shall mean the consummation of any Change in Control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, as determined by the Board, in its sole discretion; provided that, without limitation, such a Change in Control shall be deemed to have occurred if:

(i)any Person (as such term is defined in Sections 13(d) or 14(d)(2) of the Exchange Act; hereafter, a “Person”) is on the date hereof or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 35% or more of the Voting Power; provided, however, that for purposes of this Section 20(b), the following rules shall apply:

(A) (1) a Change in Control will not be deemed to have occurred in the case of any acquisition of Voting Power directly from the Company that is approved by a majority of those persons serving as directors of the Company on the date of this Plan (the “Original Directors”) or their Successors (as defined below), (2) any acquisition of Voting Power by the Company, or any

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Subsidiary, and (3) any acquisition of Voting Power by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary (the term “Successors” shall mean those directors whose election or nomination for election by stockholders has been approved by the vote of at least two-thirds of the Original Directors and previously qualified Successors serving as directors of the Company, as the case may be, at the time of such election or nomination for election);

(B) if any Person is or becomes the beneficial owner of 35% or more of the Voting Power as a result of a transaction described in clause (A) of this Section 20(b)(i) above and such Person thereafter becomes the beneficial owner of any additional shares of Voting Power representing 1% or more of the then-outstanding Voting Power other than in an acquisition directly from the Company that is approved by a majority of the Original Directors or their Successors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Power are treated equally, such subsequent acquisition shall be treated as a Change in Control;

(C) a Change in Control will not be deemed to have occurred if a Person is or becomes the beneficial owner of 35% or more of the Voting Power as a result of a reduction in the number of shares of Voting Power outstanding pursuant to a transaction or series of transactions that is approved by a majority of the Original Directors or their Successors unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Power representing 1% or more of the then-outstanding Voting Power other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Power are treated equally; or

(D) if at least a majority of the Original Directors or their Successors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Power inadvertently, and such Person divests as promptly as practicable but no later than the date, if any, set by the Original Directors or their Successors a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Power, then no Change in Control shall have occurred as a result of such Person’s acquisition.

(ii)The Company consummates a merger or consolidation in which stockholders of the Company immediately prior to entering into such agreement

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will beneficially own, immediately after the effective time of the merger or consolidation, securities of the Company or any surviving or new corporation, as the case may be, having less than 60% of the Voting Power of any surviving or new corporation, as the case may be, including Voting Power exercisable on a contingent or deferred basis as well as immediately exercisable Voting Power, excluding any merger or combination of a wholly owned Subsidiary into the Company, or the Company into a wholly owned Subsidiary; or

(iii)The Company consummates a sale, lease, exchange or other transfer or disposition of all or substantially all of its assets to any Person other than to a wholly owned Subsidiary, but not including (A) a mortgage or pledge of assets granted in connection with a financing or (B) a spin-off or sale of assets if the Company continues in existence and its common shares are listed on a  national securities exchange, quoted on the automated quotation system of a national securities association or traded in the over-the-counter market; or

(iv)the Original Directors and/or their Successors as defined above in Section 20(b)(i)(A) of this definition do not constitute a majority of the whole Board as the case may be; or

(v)approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, as the case may be.

(c)“Subsidiary” means a corporation, company or other entity (i) more than fifty percent (50%) of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than fifty percent (50%) of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.

(d)“Voting Power” means, at any time, the combined voting power of the then outstanding securities entitled to vote generally in the election of Directors in the case of the Company, or the members of the board of directors or similar body in the case of another entity.

21.Compliance with Section 409A of the Code.  To the extent applicable, it is intended that this Agreement and the Plan comply with, or be exempt from, the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) do not apply to the Grantee.  This Agreement in conjunction with the terms of the Plan shall be administered in a manner consistent with this intent.  Any amendments made to comply with Section 409A of the Code may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee.  In any case, the Grantee shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed in connection with this Agreement (including any taxes and penalties under Section 409A of the Code), and the Company shall not have any obligation to indemnify or otherwise hold the Grantee harmless from any or all of such taxes or penalties.

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22.Electronic Delivery.  The Company may, in its sole discretion, deliver any documents related to the TBRSUs and the Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee’s consent to participate in the Plan by electronic means.  The Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

23.Acknowledgement.  The Grantee acknowledges that the Grantee (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

24.Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

25.Data Protection.  By signing below, the Grantee consents that the Company may process the Grantee’s personal data, including name, Social Security number, address and number of TBRSUs (“Data”), exclusively for the purpose of performing this Agreement, in particular in connection with the TBRSUs awarded to the Grantee.  For this purpose, the Data may also be disclosed to and processed by companies outside the Company, e.g., banks involved.

(Signature follows on the next page)

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer as of the day and year first above written.

FLOWERS FOODS, INC.
By:	/s/     R. Steve Kinsey
	R. Steve Kinsey
	Chief Financial & Accounting Officer

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EX-21

Exhibit 21

SUBSIDIARIES OF FLOWERS FOODS, INC.

Name of Subsidiary	Jurisdiction of Incorporation or Organization
14th Street Baking Co. of Birmingham, LLC	Alabama
Bailey Street Bakery, LLC	Alabama
Flowers Bakery of Montgomery, LLC	Alabama
Flowers Baking Co. of Birmingham, LLC	Alabama
Flowers Baking Co. of Opelika, LLC	Alabama
Tuscaloosa Organic Baking Co., LLC	Alabama
Holsum Bakery of Tolleson, LLC	Arizona
Holsum Bakery, Inc.	Arizona
Holsum Holdings, LLC	Arizona
Mesa Organic Baking Co., Inc.	Arizona
Flowers Bakery of Texarkana, LLC	Arkansas
Flowers Baking Co. of Batesville, LLC	Arkansas
Flowers Baking Co. of Pine Bluff, LLC	Arkansas
Fort Smith Baking Co., LLC	Arkansas
Flowers Baking Co. of California, LLC	California
Flowers Baking Co. of Modesto, LLC	California
Flowers Baking Co. of Sacramento, LLC	California
Flowers Baking Co. of Stockton, LLC	California
Canyon Bakehouse, LLC	Colorado
Flowers Baking Co. of Denver, LLC	Colorado
C&G Holdings, Inc.	Delaware
CK Sales Co., LLC	Delaware
Flowers Bakeries Brands, LLC	Delaware
Flowers Baking Co. of Lakeland, Inc.	Delaware
Flowers Finance II, LLC	Delaware
Flowers Finance, LLC	Delaware
KKB Acquisition, LLC	Delaware
Busch Drive Baking Co. of Jacksonville, LLC	Florida
Flowers Baking Co. of Bradenton, LLC	Florida
Flowers Baking Co. of Florida, LLC	Florida
Flowers Baking Co. of Jacksonville, LLC	Florida
Flowers Baking Co. of Miami, LLC	Florida
Flowers Baking Co. of Orlando, LLC	Florida
Derst Baking Company, LLC	Georgia
FBC Georgia, LLC	Georgia
Flowers Bakeries, LLC	Georgia
Flowers Bakery of Suwanee, LLC	Georgia
Flowers Baking Co. of Thomasville, LLC	Georgia
Flowers Baking Co. of Tucker, LLC	Georgia
Flowers Baking Co. of Tyler, LLC	Georgia
Flowers Baking Co. of Villa Rica, LLC	Georgia
Flowers Foods Specialty Group, LLC	Georgia
FLOWERS FOODS, INC.	Georgia
Flowers Specialty Foodservice Sales, LLC	Georgia
Flowers Baking Co. of Hodgkins, LLC	Illinois
Flowers Baking Co. of Peoria, LLC	Illinois
Flowers Baking Co. of Columbus, LLC	Indiana
Flowers Baking Co. of Waterloo, LLC	Iowa
Flowers Baking Co. of Lenexa, LLC	Kansas

Flowers Bakery of London, LLC	Kentucky
Flowers Baking Co. of Bardstown, LLC	Kentucky
Flowers Baking Co. of Alexandria, LLC	Louisiana
Flowers Baking Co. of Baton Rouge, LLC	Louisiana
Flowers Baking Co. of Lafayette, LLC	Louisiana
Flowers Baking Co. of New Orleans, LLC	Louisiana
Flowers Baking Co. of Biddeford, LLC	Maine
Lepage Bakeries Cedar Street, LLC	Maine
Lepage Bakeries Park Street, LLC	Maine
Lepage Leasing, LLC	Maine
El Paso Baking Co. de Mexico, S.A.de C.V.	Mexico
Flowers Baking Co. of Booneville, LLC	Missouri
Flowers Baking Co. of Henderson, LLC	Nevada
Flowers Baking Co. of Jamestown, LLC	North Carolina
Flowers Baking Co. of Newton, LLC	North Carolina
Flowers Baking Co. of Rocky Mount, LLC	North Carolina
Franklin Baking Company, LLC	North Carolina
Flowers Baking Co. of Ohio, LLC	Ohio
Flowers Baking Co. of Tulsa, LLC	Oklahoma
Dave's Killer Bread, Inc.	Oregon
DKB Organic Bakeries, LLC	Oregon
Flowers Baking Co. of Portland, LLC	Oregon
Flowers Baking Co. of Oxford, Inc.	Pennsylvania
Tasty Baking Company	Pennsylvania
TBC Financial Services, Inc.	Pennsylvania
Flowers Specialty Brands, LLC	South Carolina
Flowers Bakery of Cleveland, LLC	Tennessee
Flowers Bakery of Crossville, LLC	Tennessee
Flowers Baking Co. of Knoxville, LLC	Tennessee
Flowers Baking Co. of Memphis, LLC	Tennessee
Flowers Baking Co. of Morristown, LLC	Tennessee
Flowers Baking Co. of Nashville, LLC	Tennessee
Flowers Specialty Snack Sales, Inc.	Tennessee
Monroe Avenue Baking Co. of Memphis, LLC	Tennessee
Flowers Baking Co. of Denton, LLC	Texas
Flowers Baking Co. of El Paso, LLC	Texas
Flowers Baking Co. of Houston, LLC	Texas
Flowers Baking Co. of San Antonio, LLC	Texas
Flowers Baking Co. of Texas, LLC	Texas
Leeland Baking Co., LLC	Texas
Flowers Baking Co. of Ogden, LLC	Utah
Lepage Bakeries Brattleboro, LLC	Vermont
Flowers Baking Co. of Norfolk, LLC	Virginia
Lynchburg Organic Baking Co., LLC	Virginia
Flowers Baking Co. of West Virginia, LLC	West Virginia

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333- 248233) and Form S-8 (Nos. 333-132293, 333-58320, 333-59354, 333-156471, 333-151746, 333-159814, 333-196124 and 333-196125) of Flowers Foods, Inc. of our report dated February 23, 2022 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia

February 23, 2022

EX-31.1

Exhibit 31.1

I, A. Ryals McMullian, certify that:

1. I have reviewed this Annual Report on Form 10-K of Flowers Foods, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/    A. RYALS MCMULLIAN

A. Ryals McMullian

President and Chief Executive Officer

Date: February 23, 2022

EX-31.2

Exhibit 31.2

I, R. Steve Kinsey, certify that:

1. I have reviewed this Annual Report on Form 10-K of Flowers Foods, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/    R. STEVE KINSEY

R. Steve Kinsey

Chief Financial Officer and

Chief Accounting Officer

Date: February 23, 2022

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Flowers Foods, Inc. (the “company”) on Form 10-K for the period ended January 1, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company as of the dates and for the periods expressed in the Report.

/s/     A. RYALS MCMULLIAN

A. Ryals McMullian

President and

Chief Executive Officer

/s/     R. STEVE KINSEY

R. Steve Kinsey

Chief Financial Officer and

Chief Accounting Officer

Date: February 23, 2022

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

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Document and Entity Information - USD ($)	12 Months Ended
	Jan. 01, 2022	Feb. 17, 2022	Jul. 17, 2021
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Jan. 01, 2022
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Trading Symbol	FLO
Title of 12(b) Security	Common Stock
Security Exchange Name	NYSE
Entity Registrant Name	FLOWERS FOODS, INC
Entity Central Index Key	0001128928
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Interactive Data Current	Yes
Document Annual Report	true
Document Transition Report	false
Entity File Number	1-16247
Entity Tax Identification Number	58-2582379
Entity Address, Address Line One	1919 Flowers Circle
Entity Address, City or Town	Thomasville
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	31757
City Area Code	229
Local Phone Number	226-9110
Entity Incorporation, State or Country Code	2Q
Current Fiscal Year End Date	--01-01
Entity Filer Category	Large Accelerated Filer
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Common Stock, Shares Outstanding		211,536,622
Entity Public Float			$ 4,982,859,803
Auditor Name	PricewaterhouseCoopers LLP
Auditor Location	Atlanta, Georgia
Auditor Firm ID	238
Documents Incorporated by Reference	Portions of the registrant’s Proxy Statement for the 2022 Annual Meeting of Shareholders to be held May 26, 2022, which is expected to be filed with the Securities and Exchange Commission on or about April 12, 2022, have been incorporated by reference into Part III, Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K.

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Consolidated Balance Sheets - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Current assets:
Cash and cash equivalents	$ 185,871	$ 307,476
Accounts and notes receivable, net of allowances of $15,398 and $15,162, respectively	305,196	300,001
Inventories:
Raw materials	54,458	48,977
Packaging materials	24,580	20,744
Finished goods	55,942	55,508
Inventories, net	134,980	125,229
Spare parts and supplies	68,479	68,108
Other	51,592	37,389
Total current assets	746,118	838,203
Property, plant and equipment:
Land	112,729	93,037
Buildings	550,947	484,805
Machinery and equipment	1,256,821	1,226,403
Furniture, fixtures and transportation equipment	184,528	170,150
Construction in progress	87,367	59,137
Property, plant and equipment, gross	2,192,392	2,033,532
Less: accumulated depreciation	(1,393,664)	(1,334,139)
Property, plant and equipment, net	798,728	699,393
Financing lease right-of-use assets	3,476	5,419
Operating lease right-of-use assets	289,013	328,712
Notes receivable from independent distributor partners	154,310	176,412
Assets held for sale	11,369	5,641
Other assets	9,623	9,081
Goodwill	545,244	545,244
Other intangible assets, net	695,432	714,918
Total assets	3,253,313	3,323,023
Current liabilities:
Current maturities of financing leases	1,584	1,769
Current maturities of operating leases	46,390	50,139
Accounts payable	268,500	225,918
Other accrued liabilities	203,443	226,279
Total current liabilities	519,917	504,105
Long-term debt and right-of-use lease liabilities:
Noncurrent long-term debt	890,609	960,103
Noncurrent financing lease obligations	1,910	3,590
Noncurrent operating lease obligations	250,638	290,264
Total long-term debt and right-of-use lease liabilities	1,143,157	1,253,957
Other liabilities:
Post-retirement/post-employment obligations	7,249	10,049
Deferred taxes	133,757	128,259
Other long-term liabilities	37,959	53,659
Total other long-term liabilities	178,965	191,967
Commitments and contingencies
Stockholders’ equity:
Common stock — $.01 stated par value and $.001 current par value; 500,000,000 authorized shares; 228,729,585 issued shares	199	199
Treasury stock — 17,334,804 and 17,126,261 shares, respectively	(232,304)	(225,405)
Capital in excess of par value	678,414	659,682
Retained earnings	962,378	932,094
Accumulated other comprehensive income	2,587	6,424
Total stockholders’ equity	1,411,274	1,372,994
Total liabilities and stockholders’ equity	3,253,313	3,323,023
Series A Preferred Stock
Stockholders’ equity:
Preferred Stock, value
Series B Preferred Stock
Stockholders’ equity:
Preferred Stock, value

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Accounts and notes receivable, allowances	$ 15,398	$ 15,162
Preferred stock, shares authorized	1,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, current par value	$ 0.001	$ 0.001
Common stock, authorized shares	500,000,000	500,000,000
Common stock, shares issued	228,729,585	228,729,585
Treasury stock, shares	17,334,804	17,126,261
Series A Preferred Stock
Preferred stock, par value	$ 100	$ 100
Preferred stock, shares authorized	200,000	200,000
Preferred stock, shares issued	0	0
Series B Preferred Stock
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	800,000	800,000
Preferred stock, shares issued	0	0

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Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Income Statement [Abstract]
Sales	$ 4,330,767	$ 4,387,991	$ 4,123,974
Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately below)	2,175,247	2,196,142	2,155,709
Selling, distribution and administrative expenses	1,719,797	1,693,387	1,575,122
Depreciation and amortization	136,559	141,384	144,228
Restructuring and related impairment charges		35,483	23,524
Loss (recovery) on inferior ingredients	944	107	(37)
Multi-employer pension plan withdrawal costs	3,300
Income from operations	294,920	321,488	225,428
Interest expense	31,534	38,790	38,847
Interest income	(23,533)	(26,696)	(27,750)
Loss on extinguishment of debt	16,149
Pension plan settlement and curtailment loss	403	108,757
Other components of net periodic pension and postretirement benefits (credit) expense	(405)	(74)	2,248
Income before income taxes	270,772	200,711	212,083
Income tax expense	64,585	48,393	47,545
Net income	$ 206,187	$ 152,318	$ 164,538
Basic:
Net income per common share	$ 0.97	$ 0.72	$ 0.78
Weighted average shares outstanding	211,840	211,782	211,606
Diluted:
Net income per common share	$ 0.97	$ 0.72	$ 0.78
Weighted average shares outstanding	213,033	212,345	211,974
Cash dividends paid per common share	$ 0.8300	$ 0.7900	$ 0.7500

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 206,187	$ 152,318	$ 164,538
Pension and postretirement plans:
Settlement and curtailment loss	302	81,277
Net actuarial gain (loss) for the period	788	18,588	(8,000)
Current year prior service credit	1,661
Amortization of prior service cost included in net income	41	83	259
Amortization of actuarial loss included in net income	400	1,082	5,099
Pension and postretirement plans, net of tax	3,192	101,030	(2,642)
Derivative instruments:
(Loss) gain on effective portion of derivatives	(5,348)	9,298	8,457
(Gain) loss reclassified to net income	(1,681)	2,116	(2,664)
Derivative instruments, net of tax	(7,029)	11,414	5,793
Other comprehensive (loss) income, net of tax	(3,837)	112,444	3,151
Comprehensive income	$ 202,350	$ 264,762	$ 167,689

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Capital in Excess of Par Value	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Treasury Stock Cumulative Effect, Period of Adoption, Adjustment
Balances at Dec. 29, 2018	$ 1,258,267	$ (2,915)	$ 199	$ 653,477	$ 945,410	$ (2,915)	$ (109,171)	$ (231,648)
Balances (in shares) at Dec. 29, 2018			228,729,585
Balances, treasury shares at Dec. 29, 2018								(17,834,378)
Net income	164,538				164,538
Derivative instruments, net of tax (Note 10)	5,793						5,793
Pension and postretirement plans, net of tax (Note 20)	(2,642)						(2,642)
Stock repurchases	(7,054)							$ (7,054)
Stock repurchases (in shares)								(336,088)
Issuance of deferred stock awards				(911)				$ 911
Issuance of deferred stock awards (in shares)								69,377
Amortization of share-based compensation awards	7,430			7,430
Performance-contingent and time-based restricted stock awards issued (Note 19)				(11,498)				$ 11,498
Performance-contingent and time-based restricted stock awards issued (in shares)								885,123
Issuance of deferred compensation				(6)				$ 6
Issuance of deferred compensation (in shares)								452
Dividends paid on vested performance-contingent restricted stock and deferred share awards and share-based payments awards	(1,361)				(1,361)
Dividends paid	(158,626)				(158,626)
Balances at Dec. 28, 2019	1,263,430		$ 199	648,492	947,046		(106,020)	$ (226,287)
Accounting Standards Update [Extensible Enumeration]		us-gaap:AccountingStandardsUpdate201602Member							us-gaap:AccountingStandardsUpdate201602Member
Balances (in shares) at Dec. 28, 2019			228,729,585
Balances, treasury shares at Dec. 28, 2019								(17,215,514)
Net income	152,318				152,318
Derivative instruments, net of tax (Note 10)	11,414						11,414
Pension and postretirement plans, net of tax (Note 20)	101,030						101,030
Stock repurchases	(783)							$ (783)
Stock repurchases (in shares)								(37,433)
Issuance of deferred stock awards				(651)				$ 651
Issuance of deferred stock awards (in shares)								49,539
Amortization of share-based compensation awards	12,855			12,855
Performance-contingent and time-based restricted stock awards issued (Note 19)				(975)				$ 975
Performance-contingent and time-based restricted stock awards issued (in shares)								74,204
Issuance of deferred compensation				(39)				$ 39
Issuance of deferred compensation (in shares)								2,943
Dividends paid on vested performance-contingent restricted stock and deferred share awards and share-based payments awards	(109)				(109)
Dividends paid	(167,161)				(167,161)
Balances at Jan. 02, 2021	$ 1,372,994		$ 199	659,682	932,094		6,424	$ (225,405)
Balances (in shares) at Jan. 02, 2021			228,729,585
Balances, treasury shares at Jan. 02, 2021	(17,126,261)							(17,126,261)
Net income	$ 206,187				206,187
Derivative instruments, net of tax (Note 10)	(7,029)						(7,029)
Pension and postretirement plans, net of tax (Note 20)	3,192						3,192
Stock repurchases	$ (9,510)							$ (9,510)
Stock repurchases (in shares)	(406,840)							(406,840)
Issuance of deferred stock awards				(636)				$ 636
Issuance of deferred stock awards (in shares)								48,231
Amortization of share-based compensation awards	$ 21,343			21,343
Performance-contingent and time-based restricted stock awards issued (Note 19)				(1,798)				$ 1,798
Performance-contingent and time-based restricted stock awards issued (in shares)								136,652
Issuance of deferred compensation				(177)				$ 177
Issuance of deferred compensation (in shares)								13,414
Dividends paid on vested performance-contingent restricted stock and deferred share awards and share-based payments awards	(234)				(234)
Dividends paid	(175,669)				(175,669)
Balances at Jan. 01, 2022	$ 1,411,274		$ 199	$ 678,414	$ 962,378		$ 2,587	$ (232,304)
Balances (in shares) at Jan. 01, 2022			228,729,585
Balances, treasury shares at Jan. 01, 2022	(17,334,804)							(17,334,804)

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Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Statement Of Stockholders Equity [Abstract]
Cash dividends paid per common share	$ 0.8300	$ 0.7900	$ 0.7500

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Cash flows provided by (disbursed for) operating activities:
Net income	$ 206,187	$ 152,318	$ 164,538
Adjustments to reconcile net income to net cash provided by operating activities:
Restructuring and related impairment charges		23,627	21,062
Depreciation and amortization	136,559	141,384	144,228
Stock-based compensation	21,343	12,855	7,430
(Gain) loss reclassified from accumulated other comprehensive income to net income	(2,115)	2,675	(3,707)
Deferred income taxes	6,777	(31,154)	18,609
Provision for inventory obsolescence	16	3,601	337
Allowances for accounts receivable	6,071	11,344	11,034
Pension and postretirement plans expense	1,306	109,823	3,234
Other	2,473	(924)	1,579
Qualified pension plan contributions		(7,600)	(2,500)
Changes in operating assets and liabilities, net of acquisitions and disposals:
Accounts receivable, net	(10,600)	(25,021)	(7,809)
Inventories, net	(9,767)	(1,771)	(4,774)
Hedging activities, net	(4,967)	15,829	10,289
Accounts payable	38,076	(5,772)	(14,155)
Other assets and accrued liabilities	(46,749)	53,250	17,557
Net cash provided by operating activities	344,610	454,464	366,952
Cash flows provided by (disbursed for) investing activities:
Purchases of property, plant and equipment	(135,964)	(97,929)	(103,685)
Repurchase of independent distributor territories	(4,585)	(3,114)	(2,705)
Cash paid at issuance of notes receivable	(12,135)	(10,660)	(22,644)
Principal payments from notes receivable	31,996	32,153	29,173
Acquisition of trademark	(10,200)
Proceeds from sales of property, plant and equipment	2,995	5,368	2,649
Purchase of leased warehouses	(64,689)
Other investing activities	1,144	190	119
Net cash disbursed for investing activities	(191,438)	(73,992)	(97,093)
Cash flows provided by (disbursed for) financing activities:
Dividends paid, including dividends on share-based payment awards	(175,903)	(167,270)	(159,987)
Contingent consideration		(4,700)
Payments for debt issuance costs	(6,022)	(206)	(110)
Stock repurchases	(9,510)	(783)	(7,054)
Change in bank overdrafts	261	3,134	3,217
Proceeds from debt borrowings	497,570	484,900	609,250
Debt obligation payments	(579,428)	(392,400)	(723,500)
Payments on financing leases	(1,745)	(6,715)	(5,937)
Net cash disbursed for financing activities	(274,777)	(84,040)	(284,121)
Net (decrease) increase in cash and cash equivalents	(121,605)	296,432	(14,262)
Cash and cash equivalents at beginning of period	307,476	11,044	25,306
Cash and cash equivalents at end of period	185,871	307,476	11,044
Schedule of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new financing lease liabilities	37	79	9,854
Right-of-use assets obtained in exchange for new operating lease liabilities	55,869	16,022	44,585
Distributor routes sold with deferred gains, net	241	207	241
Purchase of property, plant and equipment included in accounts payable	9,124	4,662	5,983
Cash paid during the period for:
Interest	52,620	35,920	36,430
Income taxes paid, net of refunds of $305, $917 and $460, respectively	69,401	68,758	39,121
Executive Deferred Compensation Plan
Schedule of non-cash investing and financing activities:
Issuance of executive deferred compensation plan common stock	177	39	6
Distributor Notes Receivable
Schedule of non-cash investing and financing activities:
Issuance of notes receivable on new distribution territories, net	$ 21,008	$ 25,029	$ 50,532

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Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Statement Of Cash Flows [Abstract]
Income tax refunds	$ 305	$ 917	$ 460

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Basis of Presentation

12 Months Ended

Jan. 01, 2022

Accounting Policies [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

General.    The accompanying Consolidated Financial Statements of Flowers Foods, Inc. (the “company”, “Flowers Foods”, “Flowers”, “us”, “we”, or “our”) have been prepared by the company’s management in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Reporting Segment.  The company has one operating segment based on the nature of products the company sells, intertwined production and distribution model, the internal management structure and information that is regularly reviewed by the chief executive officer (“CEO”), who is the chief operating decision maker, for the purpose of assessing performance and allocating resources.

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Summary of Significant Accounting Policies

12 Months Ended

Jan. 01, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Consolidation.    The Consolidated Financial Statements include the accounts of the company and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation.

Use of Estimates.    The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fiscal Year End.    The company operates on a 52-53 week fiscal year ending the Saturday nearest December 31. Fiscal 2021 consisted of 52 weeks, Fiscal 2020 consisted of 53 weeks, and Fiscal 2019 consisted of 52 weeks.

Revenue Recognition.    Revenue is recognized when obligations under the terms of a contract with our customers are satisfied. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.  The company records both direct and estimated reductions to gross revenue for customer programs and incentive offerings at the time the incentive is offered or at the time of revenue recognition for the underlying transaction that results in progress by the customer towards earning the incentive. These allowances include price promotion discounts, coupons, customer rebates, cooperative advertising, and product returns. Consideration payable to a customer is recognized at the time control transfers and is a reduction to revenue.   The recognition of costs for promotion programs involves the use of judgment related to performance and redemption estimates. Estimates are made based on historical experience and other factors. Price promotion discount expense is recorded as a reduction to gross sales when the discounted product is sold to the customer.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in our selling, distribution, and administrative expenses line item on the Consolidated Statements of Income.

The company’s production facilities deliver products to independent distributor partners (“IDP” or “IDPs”), who sell and deliver those products to outlets of retail accounts that are within the IDPs’ defined geographic territory. The IDPs sell products using either scan-based trading (“SBT”) technology, authorized charge tickets, or cash sales.  

SBT technology allows the retailer to take ownership of our products when the consumer purchases the products rather than at the time they are delivered to the retailer. Control of the inventory does not transfer upon delivery to the retailer because the company controls the risks and rights until the product is scanned at the reseller’s register.  Each of the company’s products is considered distinct because the resellers expect each item to be a performance obligation.  The company’s performance obligations are satisfied at the point in time when the end consumer purchases the product because each product is considered a separate performance obligation. Consequently, revenue is recognized at a point in time for each scanned item.  The company has concluded that we are the principal.

In Fiscal 2021, 2020, and 2019, the company recorded $2.2 billion, $2.3 billion, and $1.9 billion, respectively, in sales through SBT.

SBT is utilized primarily in certain national and regional retail accounts (“SBT Outlet”). Generally, revenue is not recognized by the company upon delivery of our products by the company to the IDP or upon delivery of our products by the IDP to an SBT Outlet, but when our products are purchased by the end consumer. Product inventory in the SBT Outlet is reflected as inventory on the Consolidated Balance Sheets.

The IDP performs a physical inventory of products at each SBT Outlet weekly and reports the results to the company. The inventory data submitted by the IDP for each SBT Outlet is compared with the product delivery data. Product delivered to a SBT Outlet that is not recorded as inventory in the product delivery data has been purchased by the consumer/customer of the SBT Outlet and is recorded as sales revenue by the company. 

Non-SBT sales are classified as either authorized charge sales or cash sales.  The company provides marketing support to the IDP for authorized charge sales but does not provide marketing support to the IDP for cash sales.  Marketing support includes providing a dedicated account representative, resolving complaints, and accepting responsibility for product quality which collectively define how to manage the relationship.  Revenue is recognized at a point in time for non-SBT sales.  

The company retains inventory risk, establishes negotiated special pricing, and fulfills the contractual obligations for authorized charge sales.  The company is the principal, the IDP is the agent, and the reseller is the customer.  Revenue is recognized for authorized charge sales when the product is delivered to the customer because the company has satisfied its performance obligations.

Cash sales occur when the IDP is the end customer.  The IDP maintains accounts receivable, inventory and fulfillment risk for cash sales.  The IDP also controls pricing for the resale of cash sale products.  The company is the principal and the IDP is the customer, and an agent relationship does not exist.  The discount paid to the IDP for cash sales is recorded as a reduction to revenue.  Revenue is recognized for cash sales when the company’s products are delivered to the IDP because the company has satisfied its performance obligations.  

Certain sales are under contracts and include a formal ordering system.  Orders are placed primarily using purchase orders (“PO”) or electronic data interchange information.  Each PO, together with the applicable master supply agreement, is determined to be a separate contract.  Product is delivered via contract carriers engaged by either the company or the customer with shipping terms provided in the PO.

Each unit sold, for all product categories, is a separate performance obligation.  Each unit is considered distinct because the customer can benefit from each unit by selling each one separately to the end consumer.  Additionally, each unit is separately identifiable in the PO.  Products are delivered either freight-on-board (“FOB”) shipping or destination.  The company’s right to payment is at the time our products are obtained from our warehouse for FOB shipping deliveries.  The right to payment for FOB destination deliveries occurs after the products are delivered to the customer.  Revenue is recognized at a point in time when control transfers.  The company pays commissions to brokers who obtain contracts with customers.  Commissions are paid on the total value of the contract, which is determined at contract inception and is based on expected future activity.  Broker commissions will not extend beyond a one-year term because each product is considered a separate order in the PO.

The company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the company otherwise would have recognized is one year or less. These costs are included in our selling, distribution, and administrative expenses line item on the Consolidated Statements of Income.

The company disaggregates revenue by sales channel.  Our sales channels are branded retail, store branded retail, and non-retail and other.  The non-retail and other channel includes foodservice, restaurants, institutional, vending, thrift stores, and contract manufacturing.  The company does not disaggregate revenue by geographic region, customer type, or contract type.  All revenues are recognized at a point in time.  Sales by sales channel category are as follows for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Branded retail	$	2,875,418	$	2,914,072	$	2,478,669
Store branded retail		534,794		607,741		647,056
Non-retail and other		920,555		866,178		998,249
Total	$	4,330,767	$	4,387,991	$	4,123,974

Cash and Cash Equivalents.    The company considers deposits in banks, certificates of deposits, and short-term investments with original maturities of three months or less, and highly liquid investments that are readily convertible to known amounts of cash to be cash and cash equivalents.

Accounts and Notes Receivable.    Accounts and notes receivable consist of trade receivables, current portions of distributor notes receivable, and miscellaneous receivables. The company recognizes an allowance for credit losses related to its accounts and notes receivable to present the net amount expected to be collected as of the balance sheet date. The company estimates this allowance based on historical data such as days sales outstanding trends, previous write-offs of balances, and weekly reviews of aged trial balances, among others. Accounts and notes receivable balances are written off when deemed uncollectible and are recognized as a deduction from the allowance for credit losses. Expected recoveries, not to exceed the amount previously written off, are considered in determining the reserve balance at the balance sheet date. Activity in the allowance for doubtful accounts is as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other		Ending Balance
Fiscal 2021	$	15,162	$	6,071	$	5,835	$	15,398
Fiscal 2020	$	9,473	$	11,344	$	5,655	$	15,162
Fiscal 2019	$	5,751	$	11,034	$	7,312	$	9,473

Activity in the allowance for trade accounts receivable credit losses for Fiscal 2021 and 2020 was as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other			Recoveries and other			Ending Balance
Fiscal 2021	$	4,901	$	596	$	(1,018	)	$	(1,927	)	$	2,552
Fiscal 2020	$	2,089	$	2,875	$	(2,319	)	$	2,256		$	4,901

The amounts charged to expense for bad debts in the table above, along with other non-trade accounts receivable amounts, are reported as adjustments to reconcile net income to net cash provided by operating activities in the Consolidated Statements of Cash Flows. The write-offs represent the amounts that are used to reduce the gross accounts and notes receivable at the time the balance due from the customer is written-off.  Walmart/Sam’s Club is our only customer with a balance greater than 10% of outstanding trade receivables.  Their percentage of trade receivables was 19.8% and 18.8%, on a consolidated basis, as of January 1, 2022 and January 2, 2021, respectively.  No other customer accounted for greater than 10% of the company’s outstanding receivables.

Concentration of Credit Risk.    The company performs periodic credit evaluations and grants credit to customers, who are primarily in the grocery and foodservice markets, and generally does not require collateral. Our top 10 customers in Fiscal 2021, 2020, and 2019 accounted for 53.7%, 53.6% and 51.0% of sales, respectively. Our largest customer’s, Walmart/Sam’s Club, weighted percent of sales for Fiscal 2021, 2020, and 2019 was as follows:

	Percent of Sales
Fiscal 2021		21.2	%
Fiscal 2020		21.2	%
Fiscal 2019		21.1	%

Walmart/Sam’s Club is the only customer to account for greater than 10% of the company’s sales.

Inventories.    Inventories at January 1, 2022 and January 2, 2021 are valued at net realizable value. Costs for raw materials and packaging are recorded at moving average cost. Finished goods inventories are valued at average costs.

The company will write down inventory to net realizable value for estimated unmarketable inventory equal to the difference between the cost of the inventory and the estimated net realizable value for situations when the inventory is impaired by damage, deterioration, or obsolescence.

Activity in the inventory reserve allowance is as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other		Ending Balance
Fiscal 2021	$	1,920	$	16	$	1,652	$	284
Fiscal 2020	$	161	$	3,601	$	1,842	$	1,920
Fiscal 2019	$	143	$	337	$	319	$	161

The amounts charged to expense for inventory loss in the table above are reported as adjustments to reconcile net income to net cash provided by operating activities in the Consolidated Statements of Cash Flows. The write-offs and other column represents the amounts that are used to reduce gross inventories.

Shipping Costs.    Shipping costs are included in the selling, distribution and administrative line item of the Consolidated Statements of Income. For Fiscal 2021, 2020, and 2019, shipping costs were $1,063.6 million, $1,075.8 million, and $1,010.5 million, respectively, including the costs paid to IDPs.

Spare Parts and Supplies.    The company maintains inventories of spare parts and supplies, which are used for repairs and maintenance of its machinery and equipment. These spare parts and supplies allow the company to react quickly in the event of a mechanical breakdown. These parts are valued using the moving average method and are expensed as the part is used. Periodic physical inventories of the parts are performed, and the value of the parts is adjusted for any obsolescence or difference from the physical inventory count.

Assets Held for Sale.  Assets to be sold are classified as held for sale in the period all the required criteria are met.  The company generally has three types of assets classified as held for sale.  These include distribution rights, plants and depots/warehouses, and other equipment.  See Note 8, Assets Held for Sale, for these amounts by classification.  

Though under no obligation to do so, the company repurchases distribution rights from and sells distribution rights to IDPs from time to time. At the time the company purchases distribution rights from an IDP, the fair value purchase price of the distribution right is recorded as “Assets Held for Sale”. Upon the sale of the distribution rights to a new IDP, the new distributor franchisee/owner may choose how he/she desires to finance the purchase of the business.  If the new distributor chooses to use optional financing via a company-related entity, a note receivable of up to ten years is recorded for the financed amount with a corresponding credit to assets held for sale to relieve the carrying amount of the territory. Any difference between the selling price of the business and the distribution rights’ carrying value, if any, is recorded as a gain or a loss in selling, distribution and administrative expenses because the company considers the IDP activity a cost of distribution. This gain is recognized over the term of the outstanding notes receivable as payments are received from the IDP.  In instances where a distribution right is sold for less than its carrying value, a loss is recorded at the date of sale and any impairment of a distribution right held for sale is recorded at such time when the impairment occurs. The deferred gains were $19.7 million and $23.9 million at January 1, 2022 and January 2, 2021, respectively, and are recorded in other short and long-term liabilities on the Consolidated Balance Sheets. The company recorded net gains of $1.6 million during Fiscal 2021, $5.1 million during Fiscal 2020 and $4.1 million during Fiscal 2019 related to the sale of distribution rights as a component of selling, distribution and administrative expenses.  The gains recorded during Fiscal 2021 included a loss of $4.7 million of repurchase obligations of distribution rights related to a legal settlement.  See Note 22, Commitments and Contingencies, for details on this settlement.

Property, Plant and Equipment and Depreciation.    Property, plant and equipment is recognized at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the depreciable assets.

The table below presents the range of estimated useful lives by property, plant and equipment class.

	Useful life term (years)
Asset Class	Low	High
Buildings	10	40
Machinery and equipment	3	25
Furniture, fixtures and transportation equipment	3	15

Property recorded as leasehold improvements is amortized over the shorter of the lease term or the estimated useful life of the leased property.

Depreciation expense, excluding amortization of right-of-use financing leases, for Fiscal 2021, 2020, and 2019 was as follows (amounts in thousands):

	Depreciation expense
Fiscal 2021	$	103,949
Fiscal 2020	$	103,490
Fiscal 2019	$	107,891

The company had no capitalized interest during Fiscal 2021, 2020, and 2019. The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and accumulated depreciation of assets are eliminated from the respective accounts. Any gain or loss is reflected in the company’s Consolidated Statements of Income and is included in adjustments to reconcile net income to net cash provided by operating activities in the Consolidated Statements of Cash Flows.

Leases.  At the beginning of our Fiscal 2019, the company adopted the new standard using the modified retrospective transition method, which required companies to recognize lease liabilities and a right of use asset for virtually all leases on the balance sheet.  The impact at adoption was an increase to assets of $387.3 million and an increase to liabilities of $391.9 million at the beginning of our Fiscal 2019.

The company’s leases consist of the following types of assets: bakeries, corporate office space, warehouses, bakery equipment, transportation equipment, and IT equipment (debt is discussed separately in Note 14, Debt and Other Commitments).      

Real estate and equipment contracts occasionally contain multiple lease and non-lease components. Generally, non-lease components represent maintenance and utility related charges, and are primarily minor to the overall value of applicable contracts. These contracts also contain fixed payments with stated rent escalation clauses or fixed payments based on an index such as CPI. Additionally, some contracts contain tenant improvement allowances, rent holidays, lease premiums, and contingent rent provisions (which are treated as variable lease payments). Building and/or office space leases generally require the company to pay for common area maintenance (CAM), insurance, and taxes that are not included in the base rental payments, with the majority of these leases treated as net leases, and the remainder treated as gross or modified gross leases.

The lease term for real estate leases primarily ranges from one to 22 years, with a few leases that are month to month, and accounted for as short-term leases. See discussion on short-term leases below. The term of bakery equipment leases primarily ranges from less than a year up to seven years. Transportation equipment generally has terms of less than one year up to seven years.  IT equipment is typically leased from less than a year up to five years. Certain equipment (i.e., equipment subject to management contracts) and IT equipment leases have terms shorter than a year and are accounted for as short-term leases. See discussion on short-term leases below.

These contracts may contain renewal options for periods of one month up to 10 years at fixed percentages of market pricing, with some that are reasonably certain of exercise. For those contracts that contain leases, the company recognizes renewal options as part of right-of-use assets and lease liabilities. All other renewal and termination options are not reasonably certain of exercise or occurrence as of January 1, 2022.

These contracts may also contain right of first offer purchase options, along with expansion options that are not reasonably certain of exercise. Additionally, these contracts do not contain residual value guarantees, and there are no other restrictions or covenants in the contracts.

For these real estate contracts, the company’s exclusive use of specified real estate for a specific term and for consideration resulted in the company treating these contracts as leases under the new standard.

For those contracts that contain leases of buildings and land, the company has elected to not separate land components from leases of specified property, plant, and equipment, as it was determined to have no effect on lease classification for any lease component, and the amounts recognized for the land lease components would have been immaterial.

These contracts may also contain end-term purchase options, whereby, the company may purchase the assets for stated pricing at the lesser of fair market value or a percentage of original asset cost. Yet, these purchase options were determined to not be reasonably certain of exercise or occurrence as of January 1, 2022. Additionally, these contracts do not contain residual value guarantees, and there are no other restrictions or covenants in the contracts.

The company’s ability to make those decisions that most effect the economic benefits derived from the use of the equipment, accompanied by receiving substantially all outputs and utility from the use of the equipment resulted in the company accounting for these contracts as leases.

These leases are classified as operating leases under the new standard because real estate leases do not transfer ownership at the end of the lease term, assets are not of such a specialized nature that real estate would not have alternative uses to lessors at the end of the lease term, lease terms do not represent a major part of the total useful life of real estate, and the present value of lease payments do not represent substantially all the fair value of leased assets at commencement.

Short-term leases

The company has also entered into short-term leases of certain real estate assets, along with IT equipment, and various equipment used for short-term bakery needs through equipment placement or service contracts that require purchase of consumables. These leases extend for periods of one to 12 months. Lease term and amounts of payments are generally fixed. There are no purchase options present, however, there generally are renewals that could extend lease terms for additional periods. Generally, renewal options, as they cannot be unilaterally exercised, are not reasonably certain of exercise, do not contain residual value guarantees, and there are no other restrictions or covenants in the leases.

Therefore, the company recognizes lease payments from these short-term leases and variable payments on the Consolidated Statements of Income in the period in which obligation for those payments have been incurred.

Modifications and reassessments

During Fiscal 2021 and 2020, the company elected certain renewal options that were not previously certain of exercise. Election of these renewal options resulted in reassessment of lease terms for the applicable leases.

The company included the renewal periods in measurement of lease terms for the applicable leases. Given that rental payments in the renewal periods were fixed, the company also remeasured the lease payments, and reallocated remaining contract consideration to the lease components within the applicable real estate leases. Although the triggering events did not result in changes to lease classification (i.e., all remained operating leases), they did affect the measurement of lease liabilities, right-of-use assets (“ROU assets”), and amounts recognized as lease expense for the applicable real estate leases.

Other significant judgments and assumptions

For all classes of assets, the company primarily used our incremental borrowing rates (“IBR”) to perform lease classification tests and measure lease liabilities because discount rates implicit in the company’s leases were not readily determinable.

Embedded leases

The company maintains a transportation agreement with an entity that transports a portion of the company’s fresh bakery products from the company’s production facilities to outlying distribution centers. The company concluded that this agreement contained embedded leases for the trucks and trailers used to satisfy the service provider’s obligations to the company through December 31, 2020.  On December 31, 2020, a re-measurement event occurred, and a conclusion was reached that these no longer met the requirements of an embedded lease due to a change in the contractual terms to allow for the substitution of assets, among other changes to the terms.  As a result, on January 2, 2021, there were no ROU assets or liabilities associated with the transportation agreement.  The gain on the termination of these embedded leases was $4.1 million.  

During Fiscal 2020 and Fiscal 2019, the company entered into embedded leases for IT equipment that, as of January 1, 2022, were $3.0 million of financing ROU assets and financing ROU liabilities.  As of January 2, 2021, the embedded leases were $4.6 million of financing ROU assets and financing ROU liabilities.  The company did not enter into any embedded leases during Fiscal 2021.

See Note 13, Leases, for our lease quantitative disclosures.

Segment.    The company has one operating segment based on the nature of products the company sells, intertwined production and distribution model, the internal management structure and information that is regularly reviewed by the CEO, who is the chief operating decision maker, for the purpose of assessing performance and allocating resources.

Impairment of Long-Lived Held and Used Assets.    The company determines whether there has been an impairment of long-lived held and used assets when indicators of potential impairment are present. We consider historical performance and future estimated results in our evaluation of impairment. If facts and circumstances indicate that the cost of any long-lived held and used assets may be impaired, an evaluation of recoverability would be performed. If an estimate of the asset’s fair value is required in order to determine if an impairment should be recorded, the estimated future gross, undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount and if lower than the carrying value, a write-down to market value is required.

There were no restructuring and related impairment charges during Fiscal 2021.  Total impairments (inclusive of property, plant and equipment, notes receivable, spare parts, and ROU assets) for Fiscal 2020 and 2019, and the line item to which each item is recorded in our Consolidated Statements of Income, are presented below (amounts in thousands):

Restructuring and related impairment charges line item	Fiscal 2020		Fiscal 2019
Plant closings	$	5,747	$	5,133
Line and distribution depot closings		629		356
Spare parts		734		174
Lease impairment charges		9,397		—
Impairment of assets	$	16,507	$	5,663

Fiscal 2020

During Fiscal 2020, the company sold three closed bakeries included in assets held for sale and certain idle equipment at other bakeries included in property, plant, and equipment, resulting in the recognition of $5.7 million of impairment charges.  Additionally, the company recognized property, plant, and equipment impairment charges of $0.6 million for line and distribution depot closures and an office building it decided to sell, and $0.7 million for spare parts related to equipment it no longer intended to use.

Additionally, in order to optimize our distribution network, we vacated certain distribution depots during Fiscal 2020, some of which are owned and others that were leased.  

Fiscal 2019

The company recognized impairment charges during the first quarter of Fiscal 2019 related to manufacturing line closures of $0.4 million.  During the second quarter of Fiscal 2019, an impairment charge of $1.3 million was recognized for the Winston-Salem, North Carolina closed plant recorded in assets held for sale.  The company also recognized an impairment charge of $3.9 million during the third quarter of Fiscal 2019 for the Opelika, Alabama plant closure costs.

The company sold the closed plant in Winston-Salem, North Carolina during the third quarter of Fiscal 2019, at which time an additional $0.2 million of spare parts write-offs were recognized.  The company received $1.9 million and recognized a gain of $0.8 million at the time of sale.  The impairment charges and the gain recognized are recorded in the restructuring and related impairment charges line item on our Consolidated Statements of Income.  

See Note 5, Restructuring Activities, for details.

Impairment of Other Intangible Assets.    The company accounts for other intangible assets at fair value. These intangible assets can be either finite or indefinite-lived depending on the facts and circumstances at acquisition.

Finite-lived intangible assets are reviewed for impairment when facts and circumstances indicate that the cost of any finite-lived intangible asset may be impaired. This recoverability test is based on an undiscounted cash flows expected to result from the company’s use and eventual disposition of the asset.  If these cash flows are sufficient to recover the carrying value over the useful life there is no impairment.  Amortization of finite-lived intangible assets occurs over their estimated useful lives. The amortization periods, at origination, range from two years to forty years for these assets. The attribution methods we primarily use are the sum-of-the-year digits for customer relationships and straight-line for other intangible assets.  These finite-lived intangible assets generally include trademarks, customer relationships, non-compete agreements, distributor relationships, and supply agreements.

Identifiable intangible assets that are determined to have an indefinite useful economic life are not amortized. Indefinite-lived intangible assets are tested for impairment, at least annually, using a one-step fair value-based approach or when certain indicators of potential impairment are present. We have elected not to perform the qualitative approach. We also reassess the indefinite-lived classification to determine if it is appropriate to reclassify these assets as finite-lived assets that will require amortization. We consider historical performance and future estimated results in our evaluation of impairment. If facts and circumstances indicate that the cost of any indefinite-lived intangible assets may be impaired, an evaluation of the fair value of the asset is compared to its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recorded for the difference.

We use the multi-period excess earnings and relief from royalty methods to value these indefinite-lived intangible assets. Fair value is estimated using the future gross, discounted cash flows associated with the asset using the following five material assumptions: (a) discount rate; (b) long-term sales growth rates; (c) forecasted operating margins (not applicable to the relief from royalty method), (d) assumed royalty rate; and (e) market multiples. The method used for impairment testing purposes is consistent with the valuation method employed at acquisition of the intangible asset. These indefinite-lived intangible assets are trademarks acquired in a purchase business combination.

In order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of 2020.  In the fourth quarter of Fiscal 2020, an additional $1.3 million impairment charge was recognized at the time the company decided to cease using one of its regional brands.  These costs are recorded in the restructuring and related impairment charges line item on our Consolidated Statements of Income.

During Fiscal 2019, the company recorded impairment charges of $15.4 million for trademarks impacted by a brand rationalization study which resulted in changing our focus in certain markets from regional brands to national brands to maximize our marketing and advertising campaigns.  See Note 5, Restructuring Activities, for details on these impairments.  Impairments relating to restructuring charges are recorded in the restructuring and related impairment charges line item in our Consolidated Statements of Income.  

The company evaluates useful lives for finite-lived intangible assets to determine if facts or circumstances arise that may impact the estimates of useful lives assigned and the remaining amortization duration.  Indefinite-lived intangible assets that are determined to have a finite useful life are tested for impairment as an indefinite-lived intangible asset prior to commencing amortization.  We determined that an indefinite-lived asset should be reclassified to finite-lived with an attribution period covering our estimate of the assets’ useful life.  These intangible assets were assigned a useful life ranging from 5 years to 40 years.

Future adverse changes in market conditions or poor operating results of underlying intangible assets could result in losses or an inability to recover the carrying value of the intangible assets that may not be reflected in the assets’ current carrying values, thereby possibly requiring an impairment charge in the future.  See Note 9, Goodwill and Other Intangible Assets, for additional disclosure.

Goodwill.    The company accounts for goodwill in a purchase business combination as the excess of the cost over the fair value of net assets acquired. The company tests goodwill for impairment on an annual basis (or an interim basis if a triggering event occurs that indicates the fair value of our single reporting unit may be below its carrying value) using a one-step method. We have elected not to perform the qualitative approach. The company conducts this review during the fourth quarter of each Fiscal year absent any triggering events. We use the following four material assumptions in our fair value analysis: (a) weighted average cost of capital; (b) long-term sales growth rates; (c) forecasted operating margins; and (d) market multiples. No impairment resulted from the annual review performed in Fiscal 2021, 2020, or 2019. See Note 9, Goodwill and Other Intangible Assets, for additional disclosure.

Derivative Financial Instruments.    The disclosure requirements for derivatives and hedging provide investors with an enhanced understanding of: (a) how and why an entity uses derivative instruments and related hedged items, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the company’s objectives and strategies for using derivative instruments and related hedged items, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments and related hedged items, and disclosures about credit-risk-related contingent features in derivative instruments and related hedged items.

The company’s objectives in using commodity derivatives are to add stability to materials, supplies, labor, and other production costs and to manage its exposure to certain commodity price movements. To accomplish this objective, the company uses commodity futures as part of its commodity risk management strategy.  The company’s commodity risk management programs include hedging price risk for wheat, soybean oil, corn, and natural gas primarily using futures contracts.  Commodity futures designated as cash flow hedges involve fixing the price on a fixed volume of a commodity on a specified date. The commodity futures are given up to third parties near maturity to price the physical goods (e.g. flour, sweetener, corn, etc.) required as part of the company’s production.

As required, the company records all derivatives on the Consolidated Balance Sheets at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedged item with the earnings effect of the hedged forecasted transactions in a cash flow hedge.  The company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply, or the company elects not to apply hedge accounting.

For derivatives designated and that qualify as cash flow hedges of commodity price risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) (“AOCI”) and subsequently reclassified in the period during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. All our commodity derivatives at January 1, 2022 qualified for hedge accounting.  See Note 10, Derivative Financial Instruments, for additional disclosure.

The company routinely transfers amounts from AOCI to earnings as transactions for which cash flow hedges were held occur and impact earnings.  Amounts reclassified out of AOCI to net income that relate to commodity contracts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.   Significant situations which do not routinely occur that could cause transfers from AOCI to earnings are the cancellation of a forecasted transaction for which a derivative was held as a hedge or a significant and material reduction in volume used of a hedged ingredient such that the company is over hedged and must discontinue hedge accounting. During Fiscal 2021, 2020, and 2019 there were no discontinued hedge positions.

The impact to earnings is included in our materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) line item. Changes in the fair value of the asset or liability are recorded as either a current or long-term asset or liability depending on the underlying fair value. Amounts reclassified to earnings for the commodity cash flow hedges are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows. See Note 10, Derivative Financial Instruments, for additional disclosure.

Treasury Stock.    The company records acquisitions of its common stock for treasury at cost. Differences between the proceeds for reissuances of treasury stock and average cost are credited or charged to capital in excess of par value to the extent of prior credits and thereafter to retained earnings. See Note 17, Stockholders’ Equity, for additional disclosure.

Advertising and Marketing Costs.    Advertising and marketing costs are expensed the first time the advertising takes place. Advertising and marketing costs were $77.7 million, $60.4 million, and $48.2 million for Fiscal years 2021, 2020, and 2019, respectively. Advertising and marketing costs are recorded in the selling, distribution and administrative expense line item in our Consolidated Statements of Income.

Stock-Based Compensation.    Stock-based compensation expense for all share-based payment awards granted is determined based on the grant date fair value. The company recognizes compensation costs only for those shares expected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based payment award. The shares issued for exercises and at vesting of the awards are issued from treasury stock. Forfeitures are recognized as they occur.  Shares issued at vesting are recorded as reissuances of treasury stock.  See Note 18, Stock-Based Compensation, for additional disclosure.  Stock-based compensation expense is primarily included in selling, distribution and administrative expense in the Consolidated Statements of Income.

Cloud computing arrangements (“CCA”).  If a CCA includes a software license, the arrangement is within the scope of the internal-use software guidance.  If the CCA does not include a software license (i.e. is hosted), the arrangement is a service contract and the fees for the CCA are recorded as an operating expense.  Capitalized implementation costs are amortized over the term of the associated hosted CCA service on a straight-line basis.  Amortization begins at the time any component of the hosted CCA service is ready for use.  Capitalized implementation costs are presented on the Consolidated Balance Sheets as an other asset.  Amortization charges are presented in the selling, distribution, and administrative expenses line on the Consolidated Statements of Income.

Software Development Costs.    The company expenses internal and external software development costs incurred in the preliminary project stage, and, thereafter, capitalizes costs incurred in developing or obtaining internally used software. Certain costs, such as maintenance and training, are expensed as incurred. Capitalized costs are amortized over a period of three to eight years and are subject to impairment evaluation. An impairment could be triggered if the company determines that the underlying software under review will no longer be used.  The net balance of capitalized software development costs included in plant, property and equipment was $21.1 million and $21.9 million at January 1, 2022 and January 2, 2021, respectively. Amortization expense of capitalized software development costs, which is included in depreciation and amortization expense in the Consolidated Statements of Income, was $9.9 million, $9.3 million, and $10.2 million in Fiscal 2021, 2020, and 2019, respectively.

Income Taxes.    The company accounts for income taxes using the asset and liability method and recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income as a discrete item in the period that includes the enactment date.

The company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. The company has considered carryback, future taxable income, and prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event the company was to determine that it would be more likely than not able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the valuation allowance would increase income in the period such a determination was made. Likewise, should the company determine that it would not more likely than not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the valuation allowance would decrease income in the period such determination was made.

The company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation process. Interest related to unrecognized tax benefits is recorded within the interest expense line in the accompanying Consolidated Statements of Income. See Note 21, Income Taxes, for additional disclosure.

The deductions column in the table below presents the amounts reduced in the deferred tax asset valuation allowance that were recorded to, and included as part of, deferred tax expense. The additions column represents amounts that increased the allowance.

Activity in the deferred tax asset valuation allowance is as follows (amounts in thousands):

	Beginning Balance		Deductions		Additions		Ending Balance
Fiscal 2021	$	1,030	$	—	$	—	$	1,030
Fiscal 2020	$	703	$	—	$	327	$	1,030
Fiscal 2019	$	364	$	—	$	339	$	703

Self-Insurance Reserves.    The company is self-insured for various levels of general liability, auto liability, workers’ compensation, and employee medical and dental coverage. Insurance reserves are calculated based on a combination of an undiscounted basis based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends.  Projected settlements of incurred but not reported claims are estimated based on pending claims, historical trends and industry trends related to expected losses and actual reported losses, and key assumptions, including loss development factors and expected loss rates.

Loss Contingencies.  Loss contingencies are recorded at the time it is probable an asset is impaired, or a liability has been incurred and the amount can be reasonably estimated.  For litigation claims the company considers the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the loss.  Losses are recorded in selling, distribution, and administrative expense in our Consolidated Statements of Income.  

Net Income Per Common Share.    Basic net income per share is computed by dividing net income by the weighted average common shares outstanding for the period. Diluted net income per share is computed by dividing net income by the weighted average common and common equivalent shares outstanding for the period. Common stock equivalents consist of the incremental shares associated with the company’s stock compensation plans, as determined under the treasury stock method. The performance contingent restricted stock awards do not contain a non-forfeitable right to dividend equivalents and are included in the computation for diluted net income per share. Fully vested shares which have a deferral period extending beyond the vesting date are included in the computation for basic net income per share.  See Note 19, Earnings Per Share, for additional disclosure.

Variable Interest Entities.    The incorporated IDPs are not voting interest entities since the company has no direct interest in each entity; however, they qualify as variable interest entities (“VIEs”). The IDPs who are formed as sole proprietorships are excluded from the VIE accounting analysis because sole proprietorships are not within scope for determination of VIE status.  The company typically finances the incorporated IDP and enters into a contract with the incorporated IDP to supply product at a discount for distribution in the IDP’s territory. The combination of the company’s loans to the incorporated IDP and the ongoing supply arrangements with the incorporated IDP provides a level of protection to the equity owners of the various distributorships that would not otherwise be available. However, the company is not considered to be the primary beneficiary of the VIEs.  See Note 15, Variable Interest Entities, for additional disclosure of these VIEs.  

The company also maintains a transportation agreement with an entity that transports a significant portion of the company’s fresh bakery products from the company’s production facilities to outlying distribution centers. The company represents a significant portion of the entity’s revenue. The company reconsidered its relationship with the entity because the entity was sold, and the company has concluded the entity no longer qualifies as a VIE beginning in the second quarter of Fiscal 2019.  Previously, this entity qualified as a VIE, but the company determined it was not the primary beneficiary of the VIE. See Note 15, Variable Interest Entities, for additional disclosure of these VIEs.

Postretirement Plans.    The company records pension costs and benefit obligations related to its defined benefit plans based on actuarial valuations. These valuations reflect key assumptions determined by management, including the discount rate, expected long-term rate of return on plan assets and mortality. Material changes in pension costs and in benefit obligations may occur in the future due to experience that is different than assumed and changes in these assumptions.  See Note 20, Postretirement Plans, for additional disclosure.

Pension Plan Assets.    The finance committee of the Board of Directors delegated its fiduciary and other responsibilities with respect to the Company’s retirement plans’ investment strategies to the investment committee. The investment committee, which consists of certain members of management, establishes investment guidelines and strategies and regularly monitors the performance of the plans’ assets. The investment committee is responsible for executing these strategies and investing the pension assets in accordance with ERISA and fiduciary standards. The investment objective of the pension plans is to preserve the plans’ capital and maximize investment earnings within acceptable levels of risk and volatility. The investment committee meets on a regular basis with its investment advisors to review the performance of the plans’ assets. Based upon performance and other measures and recommendations from its investment advisors, the investment committee rebalances the plans’ assets to the targeted allocation when considered appropriate.

Fair Value of Financial Instruments.    On March 9, 2021 and September 28, 2016, the company issued $500.0 million of senior notes (the “2031 notes”) and $400.0 million of senior notes (the “2026 notes”), respectively.  On April 3, 2012, the company issued $400.0 million of senior notes (the “2022 notes”) which the company later redeemed on April 8, 2021. These notes are recorded in our financial statements at carrying value, net of debt discount and issuance costs. The debt discount and issuance costs are being amortized over the ten-year term of the note to interest expense. In addition, and for disclosure purposes, the fair value of the notes is estimated using yields obtained from independent pricing sources for similar types of borrowing arrangements and is considered a Level 2 valuation. Additional details are included in Note 16, Fair Value of Financial Instruments.

Research and Development Costs.  The company recorded research and development costs of $5.6 million, $4.0 million, and $4.3 million for Fiscal 2021, 2020, and 2019, respectively.  These costs are recorded as selling, distribution and administrative expenses in our Consolidated Statements of Income.

Other Comprehensive Income (Loss)(“OCI”).    The company reports comprehensive income in two separate but consecutive financial statements. See Note 6, Accumulated Other Comprehensive Income (Loss), for additional required disclosures.

Business Process Improvement Costs .  In the second half of Fiscal 2020, we launched initiatives to transform how we operate our business, which includes upgrading our information system to a more robust platform, as well as investments in e-commerce, autonomous planning, and our “bakery of the future” initiative.  These costs may be expensed as incurred, capitalized, recognized as a cloud computing arrangement, or recognized as a prepaid service contract.  The expensed portion of the consulting costs related to the transformation strategy initiatives incurred in Fiscal 2021 was $31.3 million.  We began planning for the upgrade of our ERP platform and other system related enhancements (the “ERP road mapping”) during the third quarter of Fiscal 2020.  We incurred consulting costs associated with these activities of $4.4 million.  These costs are reflected in the selling, distribution and administrative expenses line item of the Consolidated Statements of Income.

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Recent Accounting Pronouncements

12 Months Ended

Jan. 01, 2022

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 3. Recent Accounting Pronouncements

Pronouncements adopted during Fiscal 2021

In December 2019, the FASB issued guidance which removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes.  The company adopted the new standard as of January 3, 2021, the beginning of our Fiscal 2021. Accounting for franchise taxes required adoption on a retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other applicable provisions were adopted on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements and disclosures.  

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848).” This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives, and other contracts, and the optional expedients can be applied to contract modifications made until December 31, 2022 and elected during this period when rate reform activities occur.  During the first quarter of Fiscal 2021, we adopted relevant hedge accounting expedients related to probability and the ongoing assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives, which would then result in the use of a replacement rate for this analysis.  We anticipate applying these expedients to hedges impacted by rate reform in the future.  Application of these expedients will preserve the presentation of derivatives consistent with past presentation, and as a result, we expect the adoption of

this portion of the ASU, when such rate reform activities occur, will not have a material impact to our consolidated financial statements. We will continue to evaluate the impact of the guidance and may apply other elections, as applicable, if additional contract modifications or reform activities occur.

Accounting pronouncements not yet adopted

We have reviewed other recently issued accounting pronouncements and concluded that either they are not applicable to our business or no material effect is expected upon future adoption.

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Product Recall and Loss (Recovery) on Inferior Ingredients

12 Months Ended

Jan. 01, 2022

Product Recall And Recovery Loss On Inferior Ingredients [Abstract]

Product Recall and Loss (Recovery) on Inferior Ingredients

Note 4. Product Recall and Loss (Recovery) on Inferior Ingredients

Product Recall

On July 9, 2019, the company issued a voluntary product recall for certain hamburger and hot dog buns and other bakery products due to the potential presence of small pieces of hard plastic that may have been introduced during production.  The products recalled were distributed to retail customers under a variety of brand names in 18 states.  The costs for the product recall were $0.8 million for Fiscal 2019. Costs associated with the product recall were reclassified from material, supplies, labor and other production costs and selling, distribution and administrative expenses to the ‘loss (recovery) on inferior ingredients’ line item in our Consolidated Statements of Income.

Loss (Recovery) on Inferior Ingredients

During Fiscal 2021, the company issued a voluntary recall on certain Tastykake multi-pack cupcakes sold in eight states and certain Tastykake Krimpets distributed to retail customers throughout the U.S. due to the potential presence of tiny fragments of metal mesh wire.  The recall was initiated following notification by a vendor of the possible contamination in a supplied ingredient.  We incurred costs of $1.8 million related to the recall.  Additionally, the company incurred costs of $0.1 million and received reimbursements of approximately $1.0 million during Fiscal 2021 related to the recall of gluten-free products during Fiscal 2020 discussed below.

During Fiscal 2020, the company received ingredient shipments containing gluten which were used to produce our gluten-free products.  The company issued a voluntary product recall due to the potential presence of gluten in certain products.  The products recalled were distributed to retail customers in 14 states. The recall was initiated after finished product testing revealed the possible presence of gluten.  The cause was gluten present in ingredients from a supplier that should not have contained gluten.  We incurred costs of $1.3 million related to the recall of gluten-free products and an adjustment to previously recorded inferior yeast costs discussed below.

In June 2018, the company received from a supplier several shipments of inferior yeast, which reduced product quality and disrupted production and distribution of foodservice and retail bread and buns at several of the company’s bakeries during the second quarter. While the supplier confirmed that the inferior yeast used in the baking process was safe for consumption, customers and consumers reported instances of unsatisfactory product attributes, primarily involving smell and taste.  

In addition, the company incurred costs associated with inferior whey during the third quarter of Fiscal 2018.  A voluntary recall was issued on July 18, 2018 due to the potential of tainted whey.  Costs associated with inferior whey were reclassified from material, supplies, labor and other production costs to the ‘Loss (recovery) on inferior ingredients’ line item in our Consolidated Statements of Income.

During the fourth quarter of Fiscal 2020, the company received a $1.2 million reimbursement from the supplier for the direct costs associated with the inferior yeast.  We also received a reimbursement of $3.9 million for indirect losses associated with the inferior yeast, and this amount is included in the selling, distribution, and administrative expenses line item of the Consolidated Statements of Income. During Fiscal 2019, the company received an additional $1.8 million for the reimbursement of costs associated with receiving inferior ingredients.  Unless otherwise noted, the costs and reimbursements related to these inferior ingredients are included in the ‘Loss (recovery) on inferior ingredients’ line item in our Consolidated Statements of Income.  

The table below presents the total costs and recoveries during Fiscal 2021, 2020 and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Expense recognized	$	1,894		$	1,257		$	1,785
Recoveries recognized		(950	)		(1,150	)		(1,822	)
Total loss (recovery) on inferior ingredients	$	944		$	107		$	(37	)

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Restructuring Activities

12 Months Ended

Jan. 01, 2022

Restructuring And Related Activities [Abstract]

Restructuring Activities

Note 5. Restructuring Activities

In Fiscal 2016, we announced the launch of Project Centennial, a comprehensive business and operational review.  We identified opportunities to enhance revenue growth, streamline operations, improve efficiencies, and make investments that strengthen our competitive position and improve margins over the long term.  We began Project Centennial with an evaluation of our brands, product mix, and organizational structure.  Most importantly, Project Centennial marked a significant shift in mindset from a sales and operations focused enterprise to a brand focused, consumer focused packaged foods company.  Strategic priorities developed as part of Project Centennial were designed to improve margins and profitably grow revenue over time.  These priorities included: reducing costs to fuel growth, developing leading capabilities, reinvigorating core business, and capitalizing on product adjacencies.

The company operated under an organizational structure established with two business units (“BUs”), Fresh Bakery and Snacking/Specialty since May of 2017, and realigned key leadership roles.  This structure also provided for centralized marketing, sales, supply chain, shared-services/administrative, and corporate strategy functions, each with more clearly defined roles and responsibilities.  On July 17, 2020, the company implemented additional organizational structure changes designed to increase focus on brand growth, product innovation, and improving underperforming bakeries.  Elimination of the BUs and adoption of a brand focused organizational structure was completed in the third quarter of Fiscal 2020 and the company continues to report our financial results in one operating segment.  Project Centennial was completed in Fiscal 2020 and there were no additional costs recognized in Fiscal 2021.  See Note 1, Basis of Presentation, for a description of our segment presentation.  

Unless otherwise noted, restructuring related costs are recorded in the restructuring and related impairments line item on our Consolidated Statements of Income.

The table below presents the components of costs associated with Project Centennial in Fiscal 2020 and 2019 (amounts in thousands):

	Fiscal 2020		Fiscal 2019
Restructuring and related impairment charges:
Reorganization costs	$	—	$	253
Lease termination charges		4,077		—
Impairment charges, net of gain on sale		23,627		20,229
Employee termination benefits		7,779		3,042
Restructuring and related impairment charges (1)		35,483		23,524
Project Centennial implementation costs (2)		15,548		784
Total Project Centennial restructuring and implementation costs	$	51,031	$	24,308

(1) Presented on our Consolidated Statements of Income.

(2) Represents non-restructuring costs and are recorded in the selling, distribution, and administrative expenses line item of our Consolidated Statements of Income.

The table below details the restructuring impairments (inclusive of property, plant and equipment, ingredient and packaging, and spare parts and intangible assets) that were recognized during Fiscal 2020 and 2019 (amounts in thousands):

	Fiscal 2020		Fiscal 2019
Plant closure costs	$	5,747	$	5,133
Line and distribution depot closure costs		629		356
Spare parts		734		174
Brand rationalization study impairments		7,120		15,399
Lease impairment charges		9,397		—
Gain on sale		—		(833	)
Total restructuring impairment of assets	$	23,627	$	20,229

Fiscal 2020

In order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of Fiscal 2020.  In the fourth quarter of Fiscal 2020, the company decided to cease using one of its regional brands and recognized an additional $1.3 million impairment charge.  Additionally, we recognized $1.2 million of ingredient and packaging impairments as a result of brand and product rationalization initiatives.  

During Fiscal 2020, the company sold three closed bakeries that were included in assets held for sale and certain idle equipment at other bakeries that were included in property, plant, and equipment, resulting in the recognition of $5.7 million of impairment charges.  Additionally, the company recognized property, plant, and equipment impairment charges of $0.6 million for manufacturing line and distribution depot closures and an office building it has decided to sell, and $0.7 million for spare parts related to equipment the company no longer intends to use.

In order to optimize our distribution network, we vacated certain distribution depots during Fiscal 2020, some of which are owned and others that were leased.  This resulted in the recognition of lease impairment charges totaling $9.4 million and lease termination charges of $4.1 million.

During Fiscal 2020, the company incurred $2.6 million of employee termination benefits charges related to a voluntary employee separation incentive plan (the “VSIP”). Additionally, the company announced an involuntary reduction-in-force plan (the “RIF”) and recognized charges of $5.3 million during Fiscal 2020.  These charges consisted primarily of employee severance and benefits-related costs.  All remaining payments related to the plans were paid in early Fiscal 2021.

Fiscal 2019

We began relocating certain employees during the third quarter of Fiscal 2017 as we transition to the enhanced organizational structure.  Reorganization costs of $0.3 million for Fiscal 2019 for relocating employees were incurred.  Additionally, a brand rationalization study which identified certain regional brand products that transitioned to national brands resulted in an additional impairment charge of $15.4 million on certain finite-lived intangible assets.  

The company recognized an impairment charge of $3.9 million and severance costs of $1.5 million during the third quarter of Fiscal 2019 for the Opelika, Alabama plant closure costs. The company recognized impairment charges during the first quarter of Fiscal 2019 related to manufacturing line closures of $0.4 million.  During the second quarter of Fiscal 2019, an impairment charge of $1.3 million was recognized for a closed plant recorded in assets held for sale.

The table below presents the components of, and changes in, our restructuring accruals (amounts in thousands):

	VSIP			RIF			Employee termination benefits(1)			Reorganization costs(2)			Distribution Network Optimization			Total
Liability balance at December 29, 2018	$	174		$	—		$	227		$	—		$	—		$	401
Charges		—			—			3,042			253			—			3,295
Cash payments		—			—			(1,819	)		(253	)		—			(2,072	)
Liability balance (3) at December 28, 2019	$	174		$	—		$	1,450		$	—		$	—		$	1,624
Charges		2,639			5,289			(149	)		—			4,077			11,856
Cash payments		(1,777	)		(4,817	)		(1,301	)		—			(4,077	)		(11,972	)
Liability balance (3) at January 2, 2021	$	1,036		$	472		$	—		$	—		$	—		$	1,508
Charges		—			—			—			—			—			—
Cash payments		(1,036	)		(472	)		—			—			—			(1,508	)
Liability balance (3) at January 1, 2022	$	—		$	—		$	—		$	—		$	—		$	—

(1) Employee termination benefits not related to the VSIP.

(2) Reorganization costs include employee relocation expenses.

(3) Recorded in the other accrued current liabilities line item of our Consolidated Balance Sheets.

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Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Jan. 01, 2022

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 6. Accumulated Other Comprehensive Income (Loss)

The company’s total comprehensive loss presently consists of net income, adjustments for our derivative financial instruments accounted for as cash flow hedges, and various pension and other postretirement benefit related items.

During Fiscal 2021, 2020, and 2019, reclassifications out of AOCI were as follows (amounts in thousands):

	Amount Reclassified from AOCI									Affected Line Item in the Statement
Details about AOCI Components (Note 2)	Fiscal 2021			Fiscal 2020			Fiscal 2019			Where Net Income is Presented
Derivative instruments:
Interest rate contracts	$	126		$	(145	)	$	(142	)	Interest expense
Commodity contracts		2,115			(2,675	)		3,707		Cost of sales, Note 3, below
Total before tax	$	2,241		$	(2,820	)	$	3,565		Total before tax
Tax (expense) benefit		(560	)		704			(901	)	Tax expense
Total net of tax	$	1,681		$	(2,116	)	$	2,664		Net of tax
Pension and postretirement plans:
Prior-service credits	$	(55	)	$	(111	)	$	(346	)	Note 1, below
Settlement loss		(403	)		(108,757	)		—		Note 1, below
Actuarial losses		(532	)		(1,447	)		(6,822	)	Note 1, below
Total before tax	$	(990	)	$	(110,315	)	$	(7,168	)	Total before tax
Tax benefit		247			27,873			1,810		Tax benefit
Total net of tax	$	(743	)	$	(82,442	)	$	(5,358	)	Net of tax benefit
Total reclassifications from AOCI	$	938		$	(84,558	)	$	(2,694	)	Net of tax benefit

Note 1: These items are included in the computation of net periodic pension cost. See Note 20, Postretirement Plans, for additional information.

Note 2: Amounts in parentheses indicate debits to determine net income.

Note 3: Amounts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.

During Fiscal 2021, 2020, and 2019, amounts recognized in AOCI, exclusive of reclassifications, were as follows (amounts in thousands):

	Amount of Gain (Loss) Recognized in AOCI
AOCI component	Fiscal 2021			Fiscal 2020			Fiscal 2019
Derivative instruments:
Interest rate contracts	$	3,902			—			—
Commodity contracts		(11,030	)	$	12,395		$	11,313
Total before tax	$	(7,128	)	$	12,395		$	11,313
Tax benefit (expense)		1,780			(3,097	)		(2,856	)
Total net of tax	$	(5,348	)	$	9,298		$	8,457
Pension and postretirement plans:
Current year actuarial loss (gain)	$	1,050		$	24,872		$	(10,702	)
Current year prior service credit		2,214			—			—
Total before tax	$	3,264		$	24,872		$	(10,702	)
Tax (expense) benefit		(815	)		(6,284	)		2,702
Total net of tax	$	2,449		$	18,588		$	(8,000	)
Total recognized in AOCI	$	(2,899	)	$	27,886		$	457

During Fiscal 2021, changes to AOCI, net of income tax, by component were as follows (amounts in thousands):

	Cash Flow Hedge Items			Defined Benefit Pension Plan Items			Total
AOCI at January 2, 2021	$	13,072		$	(6,648	)	$	6,424
Other comprehensive gain before reclassifications		(5,348	)		2,449			(2,899	)
Reclassified to earnings from AOCI		(1,681	)		743			(938	)
AOCI at January 1, 2022	$	6,043		$	(3,456	)	$	2,587

During Fiscal 2020, changes to AOCI, net of income tax, by component were as follows (amounts in thousands):

	Cash Flow Hedge Items		Defined Benefit Pension Plan Items			Total
AOCI at December 28, 2019	$	1,658	$	(107,678	)	$	(106,020	)
Other comprehensive loss (gain) before reclassifications		9,298		18,588			27,886
Reclassified to earnings from AOCI		2,116		82,442			84,558
AOCI at January 2, 2021	$	13,072	$	(6,648	)	$	6,424

Amounts reclassified out of AOCI to net income that relate to commodity contracts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows. The following table presents the net of tax amount of the loss reclassified from AOCI for our commodity contracts (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Gross gain (loss) reclassified from AOCI into income	$	2,115		$	(2,675	)	$	3,707
Tax (expense) benefit		(529	)		668			(936	)
Net of tax	$	1,586		$	(2,007	)	$	2,771

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Notes Receivable

12 Months Ended

Jan. 01, 2022

Receivables [Abstract]

Notes Receivable from IDPs

Note 7. Notes Receivable from IDPs

The company provides direct financing to certain IDPs for the purchase of the IDPs’ distribution rights and records the notes receivable on the Consolidated Balance Sheets. The distribution rights are financed for up to ten years. During Fiscal 2021, 2020, and 2019 the following amounts were recorded as interest income, the majority of which relates to these notes receivable (amounts in thousands):

	Interest income
Fiscal 2021	$	23,533
Fiscal 2020	$	26,696
Fiscal 2019	$	27,750

The notes receivable are collateralized by the IDPs’ distribution rights. Additional details are included in Note 16, Fair Value of Financial Instruments.

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Assets Held for Sale

12 Months Ended

Jan. 01, 2022

Property Plant And Equipment Assets Held For Sale Disclosure [Abstract]

Assets Held for Sale

Note 8. Assets Held for Sale

The company repurchases distribution rights from IDPs in circumstances when the company decides to exit a territory or, in some cases, when the IDP elects to terminate its relationship with the company. In most distributor agreements, if the company decides to exit a territory or stop using the independent distribution model in a territory, the company is contractually required to purchase the distribution rights from the IDP. In the event an IDP terminates its relationship with the company, the company, although not legally obligated, may repurchase and operate those distribution rights as a company-owned territory. The IDPs may also sell their distribution rights to another person or entity. Distribution rights purchased from IDPs and operated as company-owned territories are recorded on the Consolidated Balance Sheets in the line item “Assets Held for Sale” while the company actively seeks another IDP to purchase the distribution rights for the territory.  Distribution rights held for sale and operated by the company are sold to IDPs at fair market value pursuant to the terms of a distributor agreement. There are multiple versions of the distributor agreement in place at any given time and the terms of such distributor agreements vary.  

During Fiscal 2021, the company sold an office building and certain distribution depots included in assets held for sale at January 2, 2021.  The company received net proceeds of $2.2 million and recognized a gain of $0.9 million at the time of sale.  Also during Fiscal 2021, the company acquired and classified $1.6 million and $4.3 million of equipment and property, respectively, as held for sale.

During the first quarter of Fiscal 2020, two closed bakeries were reclassified as held for sale. During the second quarter of Fiscal 2020, the company entered into a contract to sell these two closed bakeries and an additional bakery previously recorded as held for sale, resulting in the recognition of $4.2 million of impairment charges.   The company recognized a net loss on sale of these assets during the fourth quarter of Fiscal 2020 of $1.4 million recognized in the restructuring and related impairment charges line item on the Consolidated Statements of Income.

The company sold a closed plant in Winston-Salem, North Carolina, which was reclassified to assets held for sale in Fiscal 2017, during the third quarter of Fiscal 2019.  The company received $1.9 million and recognized a gain of $0.8 million at the time of sale.   The gain on sale is recognized in the restructuring and related impairment charges line item on the Consolidated Statements of Income.

Additional assets recorded in assets held for sale are for property, plant and equipment. The carrying values of assets held for sale are not amortized and are evaluated for impairment as required. The table below presents the assets held for sale as of January 1, 2022 and January 2, 2021, respectively (amounts in thousands):

	January 1, 2022		January 2, 2021
Distribution rights	$	5,147	$	3,707
Property, plant and equipment		6,222		1,934
Total assets held for sale	$	11,369	$	5,641

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Goodwill and Other Intangible Assets

12 Months Ended

Jan. 01, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 9. Goodwill and Other Intangible Assets

The table below summarizes our goodwill and other intangible assets at January 1, 2022 and January 2, 2021, respectively, each of which is explained in additional detail below (amounts in thousands):

	January 1, 2022		January 2, 2021
Goodwill	$	545,244	$	545,244
Amortizable intangible assets, net of amortization		568,332		587,818
Indefinite-lived intangible assets		127,100		127,100
Total goodwill and other intangible assets	$	1,240,676	$	1,260,162

Goodwill was not impaired in Fiscal 2021, 2020, or 2019.

As of January 1, 2022 and January 2, 2021, the company had the following amounts related to amortizable intangible assets (amounts in thousands):

	January 1, 2022						January 2, 2021
Asset	Cost		Accumulated Amortization		Net Value		Cost		Accumulated Amortization		Net Value
Trademarks	$	477,115	$	78,124	$	398,991	$	466,915	$	64,426	$	402,489
Customer relationships		318,021		151,496		166,525		318,021		135,068		182,953
Non-compete agreements		5,154		5,074		80		5,154		5,034		120
Distributor relationships		4,123		3,398		725		4,123		3,123		1,000
Distributor routes held and used		2,548		537		2,011		1,377		121		1,256
Total	$	806,961	$	238,629	$	568,332	$	795,590	$	207,772	$	587,818

The company acquired trademarks for $10.2 million during the second quarter of Fiscal 2021.  These trademarks are being amortized over their estimated useful life.

As of January 1, 2022 and January 2, 2021, there was $127.1 million of indefinite-lived intangible trademark assets separately identified from goodwill. These trademarks are classified as indefinite-lived because there is no foreseeable limit to the period over which the asset is expected to contribute to our cash flows.  They are well established brands with a long history and well-defined

markets. In addition, we are continuing to use these brands both in their original markets and throughout our expansion territories. We believe these factors support an indefinite-life assignment with an annual impairment analysis to determine if the trademarks are realizing their expected economic benefits.

Fiscal 2020 restructuring and related impairment charges

In order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of Fiscal 2020.  In the fourth quarter of Fiscal 2020, an additional $1.3 million impairment charge was recognized at the time the company decided to cease using another one of its regional brands.  These costs are recorded in the restructuring and related impairment charges line item on our Consolidated Statements of Income.

Fiscal 2019 restructuring and related impairment charges

During Fiscal 2019, the company recognized intangible asset impairments of $15.4 million that are recorded in the restructuring and related impairment charges line item of our Consolidated Statements of Income.  The impairments are a result of a brand rationalization study that impacted certain trademarks’ future use.  The study concluded that certain products of our regional brands were to be discontinued or converted to one of our national brands.  As a result of these actions, a triggering event occurred, and we examined several trademarks for potential impairment.  One of the trademarks was an indefinite-lived trademark asset and was tested by comparing the fair value of the brand to its carrying value.  Based on this analysis the indefinite-lived trademark was not impaired, however, the company has evaluated the classification of this asset and determined that it should be recognized as finite-lived as of December 28, 2019 with an estimated useful life of 33 years that began amortizing at the beginning of Fiscal 2020.  

Three finite-lived trademark assets were tested using an undiscounted cash flow test.  As a result of this test, the projected cash flows for two of the finite-lived brands did not exceed the carrying value.  One of the finite-lived brands was not considered impaired using the undiscounted cash flow test.  The second step of the test determined the fair value of the asset and the difference between the fair value and the carrying value was recorded as an impairment for the two finite-lived trademark assets that failed step one.  The impairment charge also consisted of one brand that has limited future benefits to the company and was fully impaired.  All of these impairments were attributed to regional brands.  

Amortization expense

Amortization expense for Fiscal 2021, 2020, and 2019 was as follows (amounts in thousands):

	Amortization expense
Fiscal 2021	$	30,857
Fiscal 2020	$	30,704
Fiscal 2019	$	29,323

Estimated amortization of intangibles for Fiscal 2022 and the next four years thereafter is as follows (amounts in thousands):

Fiscal year	Amortization of Intangibles
2022	$	31,535
2023	$	30,654
2024	$	29,959
2025	$	29,247
2026	$	27,173

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Derivative Financial Instruments

12 Months Ended

Jan. 01, 2022

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 10. Derivative Financial Instruments

The company measures the fair value of its derivative portfolio by using the price that would be received to sell an asset or paid to transfer a liability in the principal market for that asset or liability. These measurements are classified into a hierarchy by the inputs used to perform the fair value calculation as follows:

Level 1: Fair value based on unadjusted quoted prices for identical assets or liabilities at the measurement date

Level 2: Modeled fair value with model inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: Modeled fair value with unobservable model inputs that are used to estimate the fair value of the asset or liability

Commodity Price Risk

The company enters into commodity derivatives, designated as cash-flow hedges of existing or future exposure to changes in commodity prices. The company’s primary raw materials are flour, sweeteners, yeast, and shortening, along with pulp, paper, and petroleum-based packaging products. Natural gas, which is used as oven fuel, is also an important commodity used for production.

As of January 1, 2022, the company’s commodity hedge portfolio contained derivatives which are recorded in the following accounts with fair values measured as indicated (amounts in thousands):

	Level 1			Level 2		Level 3		Total
Assets:
Other current assets	$	3,955		$	—	$	—	$	3,955
Other long-term assets		—			—		—		—
Total	$	3,955		$	—	$	—	$	3,955
Liabilities:
Other current liabilities	$	(220	)	$	—	$	—	$	(220	)
Other long-term liabilities		—			—		—		—
Total	$	(220	)	$	—	$	—	$	(220	)
Net Fair Value	$	3,735		$	—	$	—	$	3,735

As of January 2, 2021, the company’s commodity hedge portfolio contained derivatives which are recorded in the following accounts with fair values measured as indicated (amounts in thousands):

	Level 1			Level 2		Level 3		Total
Assets:
Other current assets	$	16,684		$	—	$	—	$	16,684
Other long-term assets		731			—		—		731
Total	$	17,415		$	—	$	—	$	17,415
Liabilities:
Other current liabilities	$	(5	)	$	—	$	—	$	(5	)
Other long-term liabilities		(83	)		—		—		(83	)
Total		(88	)		—		—		(88	)
Net Fair Value	$	17,327		$	—	$	—	$	17,327

The positions held in the portfolio are used to hedge economic exposure to changes in various raw materials and production input prices and effectively fixes the price, or limits increases in prices, during Fiscal 2022. These instruments are designated as cash-flow hedges. See Note 2, Summary of Significant Accounting Policies, for the accounting treatment of these hedged transactions.

Interest Rate Risk

During the first quarter of Fiscal 2021, the company entered into treasury locks to fix the interest rate for the 2031 notes issued on March 9, 2021.  The derivative positions were closed when the debt was priced on March 2, 2021 with a cash settlement net receipt of $3.9 million that offset changes in the benchmark treasury rate between execution of the treasury rate locks and the debt pricing date.  These rate locks were designated as a cash flow hedge and the deferred amount reported in AOCI is being reclassified to interest expense as interest payments are made on the notes through the maturity date.

The company previously entered into treasury rate locks at the time we executed the 2026 notes.  These rate locks were designated as a cash flow hedge and the fair value at termination was deferred in AOCI.  The deferred amount reported in AOCI is being reclassified to interest expense as interest payments are made on the related notes through the maturity date.

Derivative Assets and Liabilities

The company had the following derivative instruments recorded on the Consolidated Balance Sheets, all of which are utilized for the risk management purposes detailed above (amounts in thousands):

	Derivative Assets
	January 1, 2022			January 2, 2021
Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current assets	$	3,955	Other current assets	$	16,684
Commodity contracts	Other long-term assets		—	Other long-term assets		731
Total		$	3,955		$	17,415

	Derivative Liabilities
	January 1, 2022			January 2, 2021
Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current liabilities	$	220	Other current liabilities	$	5
Commodity contracts	Other long-term liabilities		—	Other long-term liabilities		83
Total		$	220		$	88

Derivative AOCI transactions

The company had the following derivative instruments for deferred gains and (losses) on closed contracts and the effective portion for changes in fair value recorded in AOCI (no amounts were excluded from the effectiveness test), all of which are utilized for the risk management purposes detailed above (amounts in thousands and net of tax):

	Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) (Net of tax)
Derivatives in Cash Flow Hedging Relationships	Fiscal 2021			Fiscal 2020		Fiscal 2019
Interest rate contracts	$	2,926		$	—	$	—
Commodity contracts	$	(8,274	)	$	9,298	$	8,457
Total	$	(5,348	)	$	9,298	$	8,457

	Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)(Net of tax)								Location of Gain or (Loss) Reclassified from AOCI into Income
Derivatives in Cash Flow Hedging Relationships	Fiscal 2021		Fiscal 2020			Fiscal 2019			(Effective Portion)
Interest rate contracts	$	95	$	(109	)	$	(107	)	Interest income (expense)
Commodity contracts		1,586		(2,007	)		2,771		Production costs (1)
Total	$	1,681	$	(2,116	)	$	2,664

1. Included in Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately).

The balance (credit or (debit) balance) in AOCI related to commodity price risk and interest rate risk derivative transactions that are closed or will expire over the next three years are as follows (amounts in thousands and net of tax) at January 1, 2022:

	Commodity Price Risk Derivatives		Interest Rate Risk Derivatives		Totals
Closed contracts	$	179	$	3,063	$	3,242
Expiring in 2022		2,801		—		2,801
Total	$	2,980	$	3,063	$	6,043

See Note 2, Summary of Significant Accounting Policies, for the accounting treatment of OCI for these hedged transactions.

Derivative transactions notional amounts

As of January 1, 2022, the company had entered into the following financial contracts to hedge commodity risks (amounts in thousands):

Derivatives in Cash Flow Hedging Relationships	Notional amount
Wheat contracts	$	32,731
Soybean oil contracts		7,088
Natural gas contracts		3,663
Corn contracts		342
Total	$	43,824

The company’s derivative instruments contained no credit-risk-related contingent features at January 1, 2022. As of January 1, 2022 and January 2, 2021, the company had $2.0 million and $1.2 million, respectively, recorded in other current assets representing collateral to counterparties for hedged positions.  As of January 1, 2022 and January 2, 2021, the company had $3.4 million and $14.0 million, respectively, recorded in other accrued liabilities representing collateral from counterparties for hedged positions.

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Other Current and Non-Current Assets

12 Months Ended

Jan. 01, 2022

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Other Current and Non-Current Assets

Note 11. Other Current and Non-Current Assets

Other current assets consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Prepaid assets	$	12,576	$	8,140
Service contracts		19,884		7,911
Fair value of derivative instruments		3,955		16,684
Collateral to counterparties for derivative positions		2,039		1,229
Income taxes receivable		13,001		2,211
Other		137		1,214
Total	$	51,592	$	37,389

Other non-current assets consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Unamortized financing fees	$	1,574	$	836
Investments		3,145		3,242
Fair value of derivative instruments		—		731
Deposits		2,202		2,092
Unamortized cloud computing arrangement costs		1,215		2,059
Noncurrent pension asset		1,281		—
Other		206		121
Total	$	9,623	$	9,081

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Other Accrued Liabilities and Other Long-Term Liabilities

12 Months Ended

Jan. 01, 2022

Other Liabilities Disclosure [Abstract]

Other Accrued Liabilities and Other Long-Term Liabilities

Note 12. Other Accrued Liabilities and Other Long-Term Liabilities

Other accrued liabilities consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Employee compensation	$	25,505	$	28,826
VSIP and RIF liabilities		—		1,508
Employee vacation		15,782		16,216
Employee bonus		33,413		57,394
Fair value of derivative instruments		220		5
Self-insurance reserves		29,828		29,367
Bank overdraft		17,161		16,900
Accrued interest		7,202		8,241
Accrued taxes		23,911		22,773
Accrued legal costs		1,746		1,644
Accrued advertising		4,294		3,610
Accrued legal settlements		16,500		11,869
Accrued short term deferred income		4,040		4,760
Accrued utilities		6,741		6,070
Acquisition consideration adjustment		3,400		—
Collateral from counterparties for derivative positions		3,377		13,997
Multi-employer pension plan withdrawal liability		2,100		—
Repurchase obligations of distribution rights		4,743		—
Other		3,480		3,099
Total	$	203,443	$	226,279

In connection with an acquisition completed in Fiscal 2012, the company agreed to make the selling shareholders whole for certain taxes incurred by the stakeholders on the sale.  There was recently a tax determination that the selling shareholders owed additional taxes.  Unless there is a successful appeal which overturns the determination, the company estimates that it will owe the shareholders approximately $3.4 million and the company has recorded this cost in the selling, distribution and administrative expenses line item of the Consolidated Statements of Income.

The repurchase of distribution rights is part of a legal settlement which requires a phased repurchase of approximately 75 distribution rights.  See Note 22, Commitments and Contingencies, for details on this settlement.

Other long-term liabilities consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Deferred income	$	15,676	$	19,153
Deferred compensation		20,188		16,674
Fair value of derivative instruments		—		83
Other deferred credits		720		1,502
Deferred payroll taxes under the CARES Act		—		14,992
Other		1,375		1,255
Total	$	37,959	$	53,659

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Leases

12 Months Ended

Jan. 01, 2022

Leases [Abstract]

Leases

Note 13. Leases

Qualitative disclosures about our leases, including the significant policy elections, can be found in Note 2, Summary of Significant Accounting Policies.  The quantitative disclosures are presented below.

Lease costs incurred by lease type, and/or type of payment for Fiscal 2021, 2020 and 2019 were as follows (in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Lease cost:
Amortization of right-of-use assets	$	1,751	$	7,190	$	7,014
Interest on lease liabilities		154		846		994
Operating lease cost		68,927		69,926		69,525
Short-term lease cost		3,075		3,058		2,630
Variable lease cost		27,120		24,815		26,359
Total lease cost	$	101,027	$	105,835	$	106,522

Other supplemental quantitative disclosures as of, and for, Fiscal 2021 and Fiscal 2020 were as follows (in thousands):

	Fiscal 2021		Fiscal 2020
Cash paid for amounts included in the measurement    of lease liabilities:
Operating cash flows from financing leases	$	154	$	846
Operating cash flows from operating leases	$	68,802	$	74,226
Financing cash flows from financing leases	$	1,745	$	6,715
Right-of-use assets obtained in exchange for new    financing lease liabilities	$	37	$	79
Right-of-use assets obtained in exchange for new    operating lease liabilities	$	55,869	$	16,022
Weighted-average remaining lease term (years):
Financing leases		2.1		3.1
Operating leases		8.3		9.4
Weighted-average IBR (percentage):
Financing leases		3.5		3.5
Operating leases		3.8		4.1

Estimated undiscounted future lease payments under non-cancelable operating leases and financing leases, along with a reconciliation of the undiscounted cash flows to operating and financing lease liabilities, respectively, as of January 1, 2022 (in thousands) were as follows:

	Operating lease liabilities			Financing lease liabilities
2022	$	56,925		$	1,691
2023		53,900			1,828
2024		45,269			101
2025		42,386			—
2026		28,591			—
Thereafter		127,734			—
Total minimum lease payments		354,805			3,620
Less: amount of lease payments representing interest		(57,777	)		(126	)
Present value of future minimum lease payments		297,028			3,494
Less: current obligations under leases		(46,390	)		(1,584	)
Long-term lease obligations	$	250,638		$	1,910

The following table details lease modifications and renewals and lease impairments (amounts in thousands):

	Fiscal 2021		Fiscal 2020
Lease modifications and renewals	$	46,790	$	13,818
Lease impairments		—	$	11,400
Lease terminations	$	41,610	$	14,817

During Fiscal 2021, the company purchased twenty-seven warehouses that were included in the company’s operating leased assets for $64.7 million.  Two of the purchased properties were fully impaired in Fiscal 2020, resulting in the recognition of a $2.6 million gain upon completion of the purchase of these assets and this amount is included in the selling, distribution, and administrative expenses line items of the Consolidated Statements of Income.  The carrying values for the remaining twenty-five leases, totaling $35.4 million, are included in the ‘Lease terminations’ line above.  

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Debt and Other Commitments

12 Months Ended

Jan. 01, 2022

Debt Disclosure [Abstract]

Debt and Other Commitments

Note 14. Debt and Other Commitments

Long-term debt, including capital lease obligations, consisted of the following at January 1, 2022 and January 2, 2021:

	Interest Rate at January 1, 2022	Final Maturity	January 1, 2022		January 2, 2021
			(Amounts in thousands)
Unsecured credit facility	1.02%	2026	$	—	$	50,000
2031 notes	2.40%	2031		493,333		—
2026 notes	3.50%	2026		397,276		396,705
2022 notes	4.38%	2022		—		399,398
Accounts receivable securitization facility	1.00%	2023		—		114,000
				890,609		960,103
Current maturities of long-term debt				—		—
Long-term debt			$	890,609	$	960,103

Bank overdrafts occur when checks have been issued but have not been presented to the bank for payment. Certain of our banks allow us to delay funding of issued checks until the checks are presented for payment. The delay in funding results in a temporary source of financing from the bank. The activity related to bank overdrafts is shown as a financing activity in our Consolidated Statements of Cash Flows. Bank overdrafts are included in other current liabilities on our Consolidated Balance Sheets. As of January 1, 2022 and January 2, 2021, the bank overdraft balance was $17.2 million and $16.9 million, respectively.

The company also had standby letters of credit (“LOCs”) outstanding of $8.4 million at January 1, 2022 and January 2, 2021, which reduce the availability of funds under the credit facility. The outstanding LOCs are for the benefit of certain insurance companies and lessors. None of the LOCs are recorded as a liability on the Consolidated Balance Sheets.

2031 Notes, 2026 Notes, Accounts Receivable Securitization Facility, 2022 Notes, and Credit Facility

2031 Notes. On March 9, 2021, the company issued $500.0 million of senior notes.  The company will pay semiannual interest on the 2031 notes on each March 15 and September 15 and the 2031 notes will mature on March 15, 2031.  The notes bear interest at 2.400% per annum.  On any date prior to December 15, 2030, the company may redeem some or all of the notes at a price equal to the greater of (1) 100% of the principal amount of the notes redeemed and (2) a “make-whole” amount plus, in each case, accrued and unpaid interest. The make-whole amount is equal to the sum of the present values of the remaining scheduled payments of principal and interest on the 2031 notes to be redeemed that would be due if such notes matured December 15, 2030 (exclusive of interest accrued to, but not including, the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of the applicable treasury rate (as defined in the indenture governing the notes), plus 20 basis points, plus, in each case, accrued and unpaid interest. At any time on or after December 15, 2030, the company may redeem some or all of the 2031 notes at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. If the company experiences a “change of control triggering event” (which involves a change of control of the company and the related rating of the notes below investment grade), it is required to offer to purchase the notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest thereon unless the company has exercised its option to redeem the notes in whole.  The 2031 notes are also subject to customary restrictive covenants for investment grade debt, including certain limitations on liens and sale and leaseback transactions.

The face value of the 2031 notes is $500.0 million.  There was a debt discount representing the difference between the net proceeds, after expenses, received upon issuance of debt and the amount repayable at its maturity. The company also accrued issuance

costs (including underwriting fees and other fees) on the 2031 notes. Debt issuance costs and the debt discount are being amortized to interest expense over the term of the 2031 notes. As of January 1, 2022, the company was in compliance with all restrictive covenants under the indenture governing the 2031 notes.  The table below presents the debt discount, underwriting fees and other fees for issuing the 2031 notes (amounts in thousands):

Total fees for 2031 notes	Amount at Issuance
Debt discount	$	2,430
Underwriting, legal, and other fees		4,829
Total fees	$	7,259

2026 Notes. On September 28, 2016, the company issued $400.0 million of senior notes (the “2026 notes”). The company will pay semiannual interest on the 2026 notes on each April 1 and October 1, beginning on April 1, 2017, and the 2026 notes will mature on October 1, 2026. The notes bear interest at 3.500% per annum. The 2026 notes are subject to interest rate adjustments if either Moody’s or S&P downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the 2026 notes.  On any date prior to July 1, 2026, the company may redeem some or all of the notes at a price equal to the greater of (1) 100% of the principal amount of the notes redeemed and (2) a “make-whole” amount plus, in each case, accrued and unpaid interest. The make-whole amount is equal to the sum of the present values of the remaining scheduled payments of principal and interest on the 2026 notes to be redeemed that would be due if such notes matured July 1, 2026 (exclusive of interest accrued to, but not including, the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate (as defined in the indenture governing the notes), plus 30 basis points, plus in each case accrued and unpaid interest. At any time on or after July 1, 2026, the company may redeem some or all of the 2026 notes at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. If the company experiences a “change of control triggering event” (which involves a change of control of the company and related rating of the notes below investment grade), it is required to offer to purchase the notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest thereon unless the company exercised its option to redeem the notes in whole.  The 2026 notes are also subject to customary restrictive covenants, including certain limitations on liens and sale and leaseback transactions.

The face value of the 2026 notes is $400.0 million.  There was a debt discount representing the difference between the net proceeds, after expenses, received upon issuance of debt and the amount repayable at its maturity. The company also paid issuance costs (including underwriting fees and legal fees) on the 2026 notes. Debt issuance costs and the debt discount are being amortized to interest expense over the term of the 2026 notes. As of January 1, 2022, the company was in compliance with all restrictive covenants under the indenture governing the 2026 notes.  The table below presents the debt discount, underwriting fees and the legal and other fees for issuing the 2026 notes (amounts in thousands):  

Total fees for 2026 notes	Amount at Issuance
Debt discount	$	2,108
Underwriting, legal, and other fees		3,634
Total fees	$	5,742

Accounts Receivable Securitization Facility. On July 17, 2013, the company entered into an accounts receivable securitization facility (the “AR facility”). The company has amended the AR facility nine times since execution, most recently on September 23, 2021.  These amendments include provisions which (i) increased the revolving commitments under the AR facility to $200.0 million from $150.0 million, (ii) added a leverage pricing grid, (iii) added an additional bank to the lending group, (iv) made certain other conforming changes, (v) removed a bank from the lending group, and (vi) most recently, extended the term by one additional year to September 27, 2023. The amendment that added the additional bank was accounted for as an extinguishment of the debt.  The remaining amendments were accounted for as modifications.

Under the AR facility, a wholly-owned, bankruptcy-remote subsidiary purchases, on an ongoing basis, substantially all trade receivables. As borrowings are made under the AR facility, the subsidiary pledges the receivables as collateral. In the event of liquidation of the subsidiary, its creditors would be entitled to satisfy their claims from the subsidiary’s pledged receivables prior to distributions of collections to the company. We include the subsidiary in our Consolidated Financial Statements. The AR facility contains certain customary representations and warranties, affirmative and negative covenants, and events of default. Restrictive covenants require adherence to company credit and collections policies, depository account control agreements, and certain other customary restrictions including limitations to consolidations, mergers, and liens.  As of January 1, 2022 and January 2, 2021, respectively, the company was in compliance with all restrictive covenants under the AR facility.  Amounts available for withdrawal under the AR facility are determined as the lesser of the total commitments and a formula derived amount based on qualifying trade receivables.

Optional principal repayments may be made at any time without premium or penalty. Interest is due two days after our reporting periods end in arrears on the outstanding borrowings and is computed as the cost of funds rate plus an applicable margin of 85 basis points. An unused fee of 35 basis points is applicable on the unused commitment at each reporting period. Financing costs paid at inception of the AR facility and at the time amendments are executed are being amortized over the life of the AR facility.  The company incurred $0.2 million in financing costs during the third quarter of Fiscal 2021 for the ninth amendment.  The balance of unamortized financing costs was $0.3 million on January 1, 2022 and $0.3 million on January 2, 2021 and are recorded in other assets on the Consolidated Balance Sheets.

The table below presents the borrowings and repayments under the AR facility during Fiscal 2021:

	Amount (thousands)
Balance as of January 2, 2021	$	114,000
Borrowings		—
Payments		(114,000	)
Balance as of January 1, 2022	$	—

The table below presents the net amount available for working capital and general corporate purposes under the AR facility as of January 1, 2022:

	Amount (thousands)
Gross amount available	$	194,500
Outstanding		—
Available for withdrawal	$	194,500

Amounts available for withdrawal under the AR facility are determined as the lesser of the total commitments and a formula derived amount based on qualifying trade receivables.  The table below presents the highest and lowest outstanding balance under the AR facility during Fiscal 2021:

	Amount (thousands)
High balance	$	114,000
Low balance	$	—

2022 Notes. On April 3, 2012, the company issued $400.0 million of senior notes (the “2022 notes”).  Prior to the early redemption discussed below, the company paid semiannual interest on the notes on each April 1 and October 1, beginning on October 1, 2012, and the notes would have matured on April 1, 2022. The notes beared interest at 4.375% per annum. On any date prior to January 1, 2022, the company could have redeemed some or all of the notes at a price equal to the greater of (1) 100% of the principal amount of the notes redeemed and (2) a “make-whole” amount plus, in each case, accrued and unpaid interest. The make-whole amount is equal to the sum of the present values of the remaining scheduled payments of principal thereof (not including any interest accrued thereon to, but not including, the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate (as defined in the indenture governing the notes), plus 35 basis points, plus in each case, unpaid interest accrued thereon to, but not including, the date of redemption. At any time on or after January 1, 2022, the company could have redeemed some or all of the notes at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. If the company experienced a “change of control triggering event” (which involves a change of control of the company and related rating of the notes below investment grade), it was required to offer to purchase the notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest thereon unless the company exercised its option to redeem the notes in whole. The notes were also subject to customary restrictive covenants, including certain limitations on liens and sale and leaseback transactions.

On April 8, 2021, the company completed the early redemption of the 2022 notes with proceeds received from the issuance of the 2031 notes on March 9, 2021.  We recognized a loss on extinguishment of debt of $16.1 million comprised of a make-whole cash payment of $15.4 million and the write-off of unamortized debt discount and debt issuance costs of $0.7 million.

The face value of the 2022 notes was $400.0 million and the debt discount on the 2022 notes at issuance was $1.0 million.  The company paid issuance costs (including underwriting fees and legal fees) on the 2022 notes of $3.9 million.  The issuance costs and the debt discount were amortized to interest expense over the term of the 2022 notes.

Credit Facility. The company is party to an amended and restated credit agreement, dated as of October 24, 2003, with the lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent, the swingline lender and issuing lender (as amended, restated, modified or supplemented from time to time, the “amended and restated credit agreement”). The company has

amended the amended and restated credit agreement seven times since execution, most recently on July 30, 2021 (the “seventh amendment”).  Under the amended and restated credit agreement, our credit facility is a five-year, $500.0 million senior unsecured revolving loan facility with the following terms and conditions: (i) a maturity date of July 30, 2026; (ii) an applicable margin for revolving loans maintained as (1) base rate loans and swingline loans with a range of 0.00% to 0.525% and (2) Eurodollar loans with a range of 0.815% to 1.525%, in each case, based on the more favorable (to the company) of (x) the leverage ratio of the company and its subsidiaries and (y) the company’s debt rating; (iii) an applicable facility fee with a range of 0.06% to 0.225%, due quarterly on all commitments under the amended and restated credit agreement, based on the more favorable (to the company) of (x) the leverage ratio of the company and its subsidiaries and (y) the company’s debt rating; and (iv) a maximum leverage ratio covenant to permit the company, at its option, in connection with certain acquisitions and investments and subject to the terms and conditions provided in the amended and restated credit agreement, to increase the maximum ratio permitted thereunder on one or more occasions to 4.00 to 1.00 for a period of four consecutive fiscal quarters, including and/or immediately following the fiscal quarter in which such acquisitions or investments were completed (the “covenant holiday”), provided that each additional covenant holiday will not be available to the company until it has achieved and maintained a leverage ratio of at least 3.75 to 1.00 and has been complied with for at least two fiscal quarters. Additionally, the seventh amendment to the amended and restated credit agreement appointed Deutsche Bank Trust Company Americas as successor administrative agent to Deutsche Bank AG New York Branch and added provisions to address LIBOR transition.

In addition, the credit facility contains a provision that permits the company to request up to $200.0 million in additional revolving commitments, for a total of up to $700.0 million, subject to the satisfaction of certain conditions. Proceeds from the credit facility may be used for working capital and general corporate purposes, including capital expenditures, acquisition financing, refinancing of indebtedness, dividends and share repurchases. The credit facility includes certain customary restrictions, which, among other things, require maintenance of financial covenants and limit encumbrance of assets and creation of indebtedness. Restrictive financial covenants include such ratios as a minimum interest coverage ratio and a maximum leverage ratio. The company believes that, given its current cash position, its cash flow from operating activities and its available credit capacity, it can comply with the current terms of the amended credit facility and can meet its presently foreseeable financial requirements.  As of January 1, 2022 and January 2, 2021, respectively, the company was in compliance with all restrictive covenants under the credit facility.

Financing costs paid at inception of the credit facility and at the time amendments are executed are being amortized over the life of the credit facility.  The company incurred $1.1 million in financing costs during the third quarter of Fiscal 2021 for the seventh amendment.

Amounts outstanding under the credit facility vary daily.  Changes in the gross borrowings and repayments can be caused by cash flow activity from operations, capital expenditures, acquisitions, dividends, share repurchases, and tax payments, as well as derivative transactions which are part of the company’s overall risk management strategy as discussed in Note 10, Derivative Financial Instruments.  The table below presents the borrowings and repayments under the credit facility during Fiscal 2021:

	Amount (thousands)
Balance as of January 2, 2021	$	50,000
Borrowings		10,000
Payments		(60,000	)
Balance as of January 1, 2022	$	—

The table below presents the net amount available under the credit facility as of January 1, 2022:  

	Amount (thousands)
Gross amount available	$	500,000
Outstanding		—
Letters of credit		(8,400	)
Available for withdrawal	$	491,600

The table below presents the highest and lowest outstanding balance under the credit facility during Fiscal 2021:

	Amount (thousands)
High balance	$	50,000
Low balance	$	—

Aggregate debt maturities.  Aggregate maturities of debt outstanding as of January 1, 2022, are as follows (excluding unamortized debt discount and issuance costs) (amounts in thousands):

2022	$	—
2023		—
2024		—
2025		—
2026		400,000
Thereafter		500,000
Total	$	900,000

Debt issuance costs and debt discount.  The table below reconciles the debt issuance costs and debt discounts to the net carrying value of each of our debt obligations (excluding line-of-credit arrangements) at January 1, 2022 (amounts in thousands):

	Face Value		Debt issuance costs and debt discount		Net carrying value
2031 notes	$	500,000	$	6,667	$	493,333
2026 notes		400,000		2,724		397,276
Total	$	900,000	$	9,391	$	890,609

The table below reconciles the debt issuance costs and debt discounts to the net carrying value of each of our debt obligations (excluding line-of-credit arrangements) at January 2, 2021 (amounts in thousands):

	Face Value		Debt issuance costs and debt discount		Net carrying value
2026 notes	$	400,000	$	3,295	$	396,705
2022 notes		400,000		602		399,398
Total	$	800,000	$	3,897	$	796,103

Deferred Compensation

The Executive Deferred Compensation Plan (“EDCP”) consists of unsecured general obligations of the company to pay the deferred compensation of, and our contributions to, participants in the EDCP. The obligations will rank equally with our other unsecured and unsubordinated indebtedness payable from the company’s general assets.

The company’s directors and certain key members of management are eligible to participate in the EDCP. Directors may elect to defer all or any portion of their annual retainer fee and meeting fees. Deferral elections by directors must be made prior to the beginning of each year and are thereafter irrevocable. Eligible employees may elect to defer up to 75% of their base salaries, and up to 100% of any cash bonuses and other compensation through December 31, 2015.  Effective January 1, 2016, employees may elect to defer up to 75% of their base salaries, any cash bonuses, and other compensation.  Deferral elections by eligible executives must be made prior to the beginning of each year and are thereafter irrevocable during that year. The portion of the participant’s compensation that is deferred depends on the participant’s election in effect with respect to his or her elective contributions under the EDCP.

The amounts outstanding at January 1, 2022 and January 2, 2021 were as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Deferral elections outstanding	$	21,319		$	18,308
Current portion of deferral elections		(1,131	)		(1,634	)
Long-term portion of deferral elections	$	20,188		$	16,674

Guarantees and Indemnification Obligations

The company has provided various representations, warranties, and other standard indemnifications in various agreements with customers, suppliers, and other parties as well as in agreements to sell business assets or lease facilities. In general, these provisions indemnify the counterparty for matters such as breaches of representations and warranties, certain environmental conditions and tax matters, and, in the context of sales of business assets, any liabilities arising prior to the closing of the transactions. Non-performance

under a contract could trigger an obligation of the company. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of any potential claims.

No material guarantees or indemnifications have been entered into by the company through January 1, 2022.

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Variable Interest Entities

12 Months Ended

Jan. 01, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Variable Interest Entities

Note 15. Variable Interest Entities

Distribution rights agreement VIE analysis

The incorporated IDPs qualify as VIEs. The IDPs who are formed as sole proprietorships are excluded from the following VIE accounting analysis and discussion.  

Incorporated IDPs acquire distribution rights and enter into a contract with the company to sell the company’s products in the IDPs’ defined geographic territory.  The incorporated IDPs have the option to finance the acquisition of their distribution rights with the company.  They can also pay cash or obtain external financing at the time they acquire the distribution rights.  The combination of the company’s loans to the incorporated IDPs and the ongoing distributor arrangements with the incorporated IDPs provide a level of funding to the equity owners of the various incorporated IDPs that would not otherwise be available. As of January 1, 2022 and January 2, 2021, there was $159.5 million and $171.1 million, respectively, in gross distribution rights notes receivable outstanding from incorporated IDPs.

The company is not considered to be the primary beneficiary of the VIEs because the company does not (i) have the ability to direct the significant activities of the VIEs that would affect their ability to operate their respective businesses and (ii) provide any implicit or explicit guarantees or other financial support to the VIEs, other than the financing described above, for specific return or performance benchmarks. The activities controlled by the incorporated IDPs that are deemed to most significantly impact the ultimate success of the incorporated IDP entities relate to those decisions inherent in operating the distribution business in the territory, including acquiring trucks and trailers, managing fuel costs, employee matters and other strategic decisions. In addition, we do not provide, nor do we intend to provide, financial or other support to the IDP. The IDPs are responsible for the operations of their respective territories.

The company’s maximum contractual exposure to loss for the incorporated IDP relates to the distributor rights note receivable for the portion of the territory the incorporated IDPs financed at the time they acquired the distribution rights. The incorporated IDPs remit payment on their distributor rights note receivable each week during the settlement process of their weekly activity.  The company will operate a territory on behalf of an incorporated IDP in situations where the IDP has abandoned its distribution rights.  Any remaining balance outstanding on the distribution rights notes receivable is relieved once the distribution rights have been sold on the IDPs behalf.  The company’s collateral from the territory distribution rights mitigates the potential losses.

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Fair Value of Financial Instruments

12 Months Ended

Jan. 01, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 16. Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts receivable, and short-term debt approximates fair value because of the short-term maturity of the instruments. Notes receivable are entered into in connection with the purchase of distribution rights by IDPs. These notes receivable are recorded in the Consolidated Balance Sheets at carrying value, which represents the closest approximation of fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As a result, the appropriate interest rate that should be used to estimate the fair value of the distribution rights notes is the prevailing market rate at which similar loans would be made to IDPs with similar credit ratings and for the same maturities. However, the company financed approximately 3,700 and 4,000 IDPs’ distribution rights as of January 1, 2022 and January 2, 2021, respectively, all with varied financial histories and credit risks. Considering the diversity of credit risks among the IDPs, the company has no method to accurately determine a market interest rate to apply to the notes. The distribution rights are generally financed for up to ten years and the distribution rights notes are collateralized by the IDPs’ distribution rights. The company maintains a wholly-owned subsidiary to assist in financing the distribution rights purchase activities if requested by new IDPs, using the distribution rights and certain associated assets as collateral. These notes receivable earn interest at a fixed rate.

At January 1, 2022 and January 2, 2021, respectively, the carrying value of the distribution rights notes receivable was as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Distribution rights notes receivable	$	183,403		$	204,839
Current portion recorded in accounts and    notes receivable, net		(29,093	)		(28,427	)
Long-term portion of distribution rights    notes receivable	$	154,310		$	176,412

During Fiscal 2021, the company recorded a reserve of $1.9 million for the distributor notes receivable related to a legal settlement.  See Note 22, Commitments and contingencies, of Notes to Consolidated Financial Statements of this Form 10-K for additional information. At January 2, 2021, the company evaluated the collectability of the distribution rights notes receivable and determined that a reserve was not necessary. Payments on these notes are collected by the company weekly in conjunction with the IDP settlement process.

The fair value of the company’s variable rate debt at January 1, 2022 approximates the recorded value. The fair value of the company’s notes, as discussed in Note 14, Debt and Other Commitments, are estimated using yields obtained from independent pricing sources for similar types of borrowing arrangements and are considered a Level 2 valuation.  The fair value of the notes are presented in the table below (amounts in thousands, except level classification):

	Carrying Value		Fair Value		Level
2031 notes	$	493,333	$	494,200	2
2026 notes	$	397,276	$	429,216	2

For fair value disclosure information about our derivative assets and liabilities see Note 10, Derivative Financial Instruments. For fair value disclosure information about our pension plan net assets see Note 20, Postretirement Plans.

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Stockholders' Equity

12 Months Ended

Jan. 01, 2022

Equity [Abstract]

Stockholders' Equity

Note 17. Stockholders’ Equity

Flowers Foods’ articles of incorporation provide that its authorized capital consist of 500,000,000 shares of common stock having a par value of $0.01 per share and 1,000,000 shares of preferred stock. The preferred stock of which (a) 200,000 shares have been designated by the Board of Directors as Series A Junior Participating Preferred Stock, having a par value per share of $100 and (b) 800,000 shares of preferred stock, having a par value per share of $0.01, have not been designated by the Board of Directors. No shares of preferred stock have been issued by Flowers Foods.

Common Stock

The holders of Flowers Foods common stock are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. Subject to preferential rights of any issued and outstanding preferred stock, including the Series A Preferred Stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors of the company out of funds legally available. In the event of a liquidation, dissolution, or winding-up of the company, holders of common stock are entitled to share ratably in all assets of the company, if any, remaining after payment of liabilities and the liquidation preferences of any issued and outstanding preferred stock, including the Series A Preferred Stock. Holders of common stock have no preemptive rights, no cumulative voting rights, and no rights to convert their shares of common stock into any other securities of the company or any other person.

Preferred Stock

The Board of Directors has the authority to issue up to 1,000,000 shares of preferred stock in one or more series and to fix the designations, relative powers, preferences, rights, qualifications, limitations, and restrictions of all shares of each such series, including without limitation, dividend rates, conversion rights, voting rights, redemption and sinking fund provisions, liquidation preferences, and the number of shares constituting each such series, without any further vote or action by the holders of our common stock. Although the Board of Directors does not presently intend to do so, it could issue shares of preferred stock, with rights that could adversely affect the voting power and other rights of holders of our common stock without obtaining the approval of our shareholders. In addition, the issuance of preferred shares could delay or prevent a change in control of the company without further action by our shareholders.

Stock Repurchase Plan

Our Board of Directors has approved a plan (on December 19, 2002) that currently authorizes share repurchases of up to 74.6 million shares of the company’s common stock. As of January 1, 2022, 5.8 million shares remained available for repurchase under the existing authorization. Under the plan, the company may repurchase its common stock in open market or privately negotiated transactions or under an accelerated repurchase program at such times and at such prices as determined to be in the company’s best interest.

The table below presents the shares repurchased under the Stock Repurchase Plan during our Fiscal 2021 (amounts in thousands except shares purchased):

Fiscal 2021 Quarter	Total Number of Shares Purchased		Total Cost of Shares Purchased
For the quarter ended April 24, 2021		46,618	$	1,058
For the quarter ended July 17, 2021		—	$	—
For the quarter ended October 9, 2021		360,222	$	8,452
For the quarter ended January 1, 2022		—	$	—
Total		406,840	$	9,510

As of January 1, 2022, 68.8 million shares at a cost of $652.9 million have been purchased since the inception of this plan.

Dividends

During Fiscal 2021, 2020, and 2019, the company paid the following dividends, excluding dividends on vested stock-based compensation awards discussed in Note 18, Stock-Based Compensation, below (amounts in thousands except per share data):

	Dividends paid		Dividends paid per share
Fiscal 2021	$	175,669	$	0.8300
Fiscal 2020	$	167,161	$	0.7900
Fiscal 2019	$	158,626	$	0.7500

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Stock-Based Compensation

12 Months Ended

Jan. 01, 2022

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

Note 18. Stock-Based Compensation

On March 5, 2014, our Board of Directors approved and adopted the 2014 Omnibus Equity and Incentive Compensation Plan (“Omnibus Plan”). The Omnibus Plan was approved by our shareholders on May 21, 2014. The Omnibus Plan authorizes the compensation committee of the Board of Directors to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, dividend equivalents and other awards for the purpose of providing our officers, key employees, and non-employee directors’ incentives and rewards for performance. The Omnibus Plan replaced the Flowers Foods’ 2001 Equity and Performance Incentive Plan, as amended and restated as of April 1, 2009 (“EPIP”), the Stock Appreciation Rights Plan, and the Annual Executive Bonus Plan. All outstanding equity awards that were made under the EPIP will continue to be governed by the EPIP; however, all equity awards granted after May 21, 2014 are governed by the Omnibus Plan. No additional awards will be issued under the EPIP. Awards granted under the Omnibus Plan are limited to the authorized amount of 8,000,000 shares.

The following is a summary of stock options, restricted stock, and deferred stock outstanding under the plans described above. Information relating to the company’s stock appreciation rights, which were issued under a separate stock appreciation right plan, is also described below.

Performance-Contingent Restricted Stock Awards

Performance-Contingent Total Shareholder Return Shares (“TSR Shares”)

Since 2012, certain key employees have been granted performance-contingent restricted stock under the EPIP and the Omnibus Plan in the form of TSR Shares. Awards granted prior to Fiscal 2019 vested approximately two years from the date of grant (after the filing of the company’s Annual Report on Form 10-K) while the awards granted during Fiscal 2019, 2020 and 2021 vest approximately three years from the date of grant.  These shares become non-forfeitable if, and to the extent that, on that date the vesting conditions are satisfied. The total shareholder return (“TSR”) is the percent change in the company’s stock price over the measurement period plus the dividends paid to shareholders. The performance payout is calculated at the end of each of the last four quarters (averaged) in the measurement period. Once the TSR is determined for the company (“Company TSR”), it is compared to the

TSR of our food company peers (“Peer Group TSR”). The Company TSR compared to the Peer Group TSR will determine the payout as set forth below (the “TSR Modifier”):

Percentile	Payout as % of Target
90th		200	%
70th		150	%
50th		100	%
30th		50	%
Below 30th		0	%

For performance between the levels described above, the degree of vesting is interpolated on a linear basis. The table below presents the payout percentage for each of the TSR awards:

Award	Fiscal year vested	Payout (%)
2017 award	Fiscal 2019	153.0

The TSR shares vest immediately if the grantee dies or becomes disabled. However, if the grantee retires at age 65 (or age 55 with at least 10 years of service with the company) or later, on the normal vesting date the grantee will receive a pro-rated number of shares based upon the retirement date and measured at the actual performance for the entire performance period. In addition, if the company undergoes a change in control, the TSR shares will immediately vest at the target level, provided that if 12 months of the performance period have been completed, vesting will be determined based on Company TSR as of the date of the change in control without application of four-quarter averaging. During the vesting period, the grantee has none of the rights of a shareholder. Dividends declared during the vesting period will accrue and will be paid at vesting on the shares that ultimately vest. The fair value estimate was determined using a Monte Carlo simulation model, which utilizes multiple input variables to estimate the probability of the company achieving the market condition discussed above. Inputs into the model included the following for the company and comparator companies: (i) TSR from the beginning of the performance cycle through the measurement date; (ii) volatility; (iii) risk-free interest rates; and (iv) the correlation of the comparator companies’ TSR. The inputs are based on historical capital market data.  The 2019 TSR award is expected to payout at 137%.

On May 23, 2019, the company’s CEO received an award of TSR Shares that brings his total grant equal to the CEO’s target award (“promotion award”).  This grant is measured under the same guidelines as the December 30, 2018 grant of TSR Shares described above.  The company’s former CEO forfeited 112,840 TSR shares at his retirement on May 23, 2019.

The following performance-contingent TSR Shares have been granted under the Omnibus Plan and have service period remaining (amounts in thousands, except price data):

Grant Date	Shares Granted		Vesting Date	Fair Value per Share
12/30/2018		440	3/1/2022	$	21.58
5/23/2019		11	3/1/2022	$	27.23
7/14/2019		5	3/1/2022	$	23.32
10/6/2019		2	3/1/2022	$	22.52
12/29/2019		331	2/28/2023	$	25.00
4/19/2020		8	2/28/2023	$	23.14
07/12/2020		2	2/28/2023	$	21.97
10/4/2020		5	2/28/2023	$	24.63
01/03/2021		365	3/1/2024	$	26.75
10/10/2021		18	3/1/2024	$	24.47

As of January 1, 2022, there was $10.0 million of total unrecognized compensation cost related to nonvested TSR Shares granted under the Omnibus Plan. That cost is expected to be recognized over a weighted-average period of 1.81 years.

Performance-Contingent Return on Invested Capital Shares (“ROIC Shares”)

Since 2012, certain key employees have been granted performance-contingent restricted stock under the EPIP and the Omnibus Plan in the form of ROIC Shares. Awards granted prior to Fiscal 2019 vested approximately two years from the date of grant (after the filing of the company’s Annual Report on Form 10-K) while the awards granted during Fiscal 2019, 2020 and 2021 vest approximately three years from the date of grant.  These shares become non-forfeitable if, and to the extent that, on that date the vesting conditions are satisfied.  Return on Invested Capital is calculated by dividing our profit, as defined, by the invested capital (“ROIC”). Generally, the performance condition requires the company’s average ROIC to exceed its average weighted cost of capital (“WACC”) by between 1.75 to 4.75 percentage points (the “ROI Target”) over the three fiscal year performance period. If the lowest ROI Target is not met, the awards are forfeited. The shares can be earned based on a range from 0% to 125% of target as defined below (the “ROIC Modifier”):

• 0% payout if ROIC exceeds WACC by less than 1.75 percentage points;

• ROIC above WACC by 1.75 percentage points pays 50% of ROI Target; or

• ROIC above WACC by 3.75 percentage points pays 100% of ROI Target; or

• ROIC above WACC by 4.75 percentage points pays 125% of ROI Target.

For performance between the levels described above, the degree of vesting is interpolated on a linear basis. The table below presents the payout percentage for each of the ROIC awards:

Award	Fiscal year vested	Payout (%)
2017 award	Fiscal 2019		75

The ROIC Shares vest immediately if the grantee dies or becomes disabled. However, if the grantee retires at age 65 (or age 55 with at least 10 years of service with the company) or later, on the normal vesting date the grantee will receive a pro-rated number of shares based upon the retirement date and actual performance for the entire performance period. In addition, if the company undergoes a change in control, the ROIC Shares will immediately vest at the target level. During the vesting period, the grantee has none of the rights of a shareholder. Dividends declared during the vesting period will accrue and will be paid at vesting on the shares that ultimately vest. The fair value of this type of award is equal to the stock price on the grant date. Since these awards have a performance condition feature the expense associated with these awards may change depending on the expected ROI Target attained at each reporting period.  The 2019 award is being expensed at our current estimated payout percentage of 125% of the ROI target, and the 2020 and 2021 awards are being expensed at 100% of the ROI target.

On May 23, 2019, the company’s CEO received a promotion award of ROIC Shares.  This grant is measured under the same guidelines as the December 30, 2018 grant of ROIC Shares described above. The company’s former CEO forfeited 112,840 ROIC shares at his retirement on May 23, 2019.

The following performance-contingent ROIC Shares have been granted under the Omnibus Plan and have service period remaining (amounts in thousands, except price data):

Grant Date	Shares Granted		Vesting Date	Fair Value per Share
12/30/2018		440	3/1/2022	$	18.29
5/23/2019		11	3/1/2022	$	23.08
7/14/2019		5	3/1/2022	$	23.32
10/6/2019		2	3/1/2022	$	22.52
12/29/2019		331	2/28/2023	$	21.74
4/19/2020		8	2/28/2023	$	23.14
07/12/2020		2	2/28/2023	$	21.97
10/4/2020		5	2/28/2023	$	24.63
01/03/2021		365	3/1/2024	$	22.63
10/10/2021		18	3/1/2024	$	24.47

As of January 1, 2022, there was $8.7 million of total unrecognized compensation cost related to nonvested ROIC Shares granted under the Omnibus Plan. This cost is expected to be recognized over a weighted-average period of 1.79 years.

Performance-Contingent Restricted Stock Summary

The table below presents the TSR Modifier share adjustment, ROIC Modifier share adjustment, accumulated dividends on vested shares, and the tax windfall/shortfall at vesting of the performance-contingent restricted stock awards (amounts in thousands except for share data):

Award granted	Fiscal year vested	TSR Modifier increase shares		ROIC Modifier (decrease) shares			Dividends at vesting (thousands)		Tax benefit		Fair value at vesting
2017	2019		205,686		(97,131	)	$	1,219	$	936	$	18,570

A summary of the status of all of the company’s nonvested shares for performance-contingent restricted stock (including the TSR Shares and the ROIC Shares) for Fiscal 2021, 2020, and 2019 is set forth below (amounts in thousands, except price data):

	Fiscal 2021					Fiscal 2020					Fiscal 2019
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Balance at beginning of year		1,264		$	21.85		662		$	20.16		779		$	21.64
Initial grant		766		$	24.66		693		$	23.37		917		$	20.10
Vested		—		$	—		—		$	—		(885	)	$	22.21
Grant reduction for not achieving the ROIC modifier		—		$	—		—		$	—		(97	)	$	19.97
Grant increase (reduction) for not achieving the TSR    modifier		—		$	—		—		$	—		206		$	23.31
Forfeitures		(58	)	$	23.27		(91	)	$	21.26		(258	)	$	20.18
Balance at end of year		1,972		$	22.89		1,264		$	21.85		662		$	20.16

As of January 1, 2022, there was $18.7 million of total unrecognized compensation cost related to nonvested restricted stock granted under the Omnibus Plan. This cost is expected to be recognized over a weighted-average period of 1.80 years.

Time-Based Restricted Stock Units

Certain key employees have been granted time-based restricted stock units (“TBRSU Shares”).  These awards vest on the fifth of January each year in equal installments over a three-year period beginning in Fiscal 2020.  Dividends earned on shares are held by the company during the vesting period and paid in cash when the awards vest and shares are distributed.  

On May 23, 2019, the company’s CEO was granted TBRSU Shares of approximately $1.0 million pursuant to the Omnibus Plan.  This award will vest 100% on the fourth anniversary of the date of grant provided the CEO remains employed by the company during this period.  Vesting will also occur in the event of the CEO’s death or disability, but not his retirement if prior to the fourth anniversary of the grant date.  Dividends will accrue on the award and will be paid to the CEO on the vesting date for all shares that vest.  There were 43,330 shares issued for this award at a fair value of $23.08 per share.

The following TBRSU Shares have been granted under the Omnibus Plan and have service periods remaining (amounts in thousands, except price data):

Grant Date	Shares Granted		Vesting Date	Fair Value per Share
12/30/2018		244	Equally over 3 years	$	18.29
5/23/2019		43	5/23/2023	$	23.08
12/29/2019		220	Equally over 3 years	$	21.74
1/03/2021		256	Equally over 3 years	$	22.63
10/10/2021		6	Equally over 3 years	$	24.79

The TBRSU Shares activity for Fiscal 2021, 2020 and Fiscal 2019 is set forth below (amounts in thousands, except price data):  

	Fiscal 2021					Fiscal 2020					Fiscal 2019
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Nonvested shares at beginning of year		387		$	20.64		270		$	19.06		—		$	—
Granted		262		$	22.68		220		$	21.74		288		$	19.01
Vested		(137	)	$	19.98		(74	)	$	18.29
Forfeitures		(20	)	$	21.56		(29	)	$	20.14		(18	)	$	18.29
Nonvested shares at end of year		492		$	21.87		387		$	20.64		270		$	19.06

Deferred Stock

Non-employee directors may convert their annual board retainers into deferred stock equal in value to 100% of the cash payments directors would otherwise receive and the vesting period is a one-year period to match the period of time that cash would have been received if no conversion existed. Accumulated dividends are paid upon delivery of the shares.  During Fiscal 2021, non-employee directors elected to receive, and were granted, an aggregate grant of 2,209 common shares for board retainer deferrals pursuant to the Omnibus Plan which vested during the fourth quarter of Fiscal 2021.

Non-employee directors also receive annual grants of deferred stock. This deferred stock vests over one year from the grant date. During Fiscal 2020, non-employee directors were granted an aggregate of 51,840 shares, of which 17,100 shares were deferred, for their annual grant pursuant to the Omnibus Plan that vested during Fiscal 2021. During the second quarter of Fiscal 2021, non-employee directors received 66,550 shares for their annual grant pursuant to the Omnibus Plan.  Additionally, during Fiscal 2021, non-employee directors received 13,491 shares of previously deferred award grants.  The deferred stock will be distributed to the grantee at a time designated by the grantee at the date of grant.

Compensation expense is recorded on deferred stock over the vesting period.

The deferred and restricted stock activity for Fiscal 2021, 2020, and 2019 is set forth below (amounts in thousands, except price data):

	Fiscal 2021					Fiscal 2020					Fiscal 2019
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Nonvested shares at beginning of year		52		$	23.21		49		$	22.31		66		$	19.93
Granted		69		$	23.96		54		$	23.15		49		$	22.31
Vested		(54	)	$	23.19		(51	)	$	22.28		(66	)	$	19.93
Nonvested shares at end of year		67		$	24.00		52		$	23.21		49		$	22.31
Vested and deferred shares at end of year (1)		206					198					197

(1) The vested and deferred shares at the end of the year include 89,949 shares granted and deferred under the EPIP for Fiscal 2021, 2020 and 2019.

As of January 1, 2022, there was $0.6 million of total unrecognized compensation cost related to deferred and restricted stock awards. This cost is expected to be recognized over a weighted-average period of 0.40 years. The intrinsic value of deferred stock awards that vested during Fiscal 2021 was $1.5 million. There was an immaterial tax windfall on the exercise of deferred share awards during fiscal 2021.

Share-Based Payments Compensation Expense Summary

The following table summarizes the company’s stock-based compensation expense, all of which was recognized in selling, distribution, and administrative expense, for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Performance-contingent restricted stock awards	$	15,061	$	8,656	$	4,767
TBRSU shares		4,747		3,039		1,520
Deferred stock awards		1,535		1,160		1,143
Total stock-based compensation expense	$	21,343	$	12,855	$	7,430

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Earnings Per Share

12 Months Ended

Jan. 01, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Note 19. Earnings Per Share

The following is a reconciliation of net income and weighted average shares for calculating basic and diluted earnings per common share for Fiscal 2021, 2020, and 2019 (amounts in thousands, except per share data):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Net income	$	206,187	$	152,318	$	164,538
Basic Earnings Per Common Share:
Basic weighted average shares outstanding per common share		211,840		211,782		211,606
Basic earnings per common share	$	0.97	$	0.72	$	0.78
Diluted Earnings Per Common Share:
Basic weighted average shares outstanding per common share		211,840		211,782		211,606
Add: Shares of common stock assumed issued upon exercise of stock    options, vesting of performance-contingent restricted stock    and deferred stock		1,193		563		368
Diluted weighted average shares outstanding per common share		213,033		212,345		211,974
Diluted earnings per common share	$	0.97	$	0.72	$	0.78

There were no anti-dilutive shares during Fiscal 2021 and 6,234 anti-dilutive shares during Fiscal 2020.  There were 11,030 anti-dilutive shares for Fiscal 2019.  

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Postretirement Plans

12 Months Ended

Jan. 01, 2022

Compensation And Retirement Disclosure [Abstract]

Postretirement Plans

Note 20. Postretirement Plans

The following summarizes the company’s balance sheet related pension and other postretirement benefit plan accounts at January 1, 2022 and January 2, 2021 (amounts in thousands):

	January 1, 2022			January 2, 2021
Noncurrent benefit asset	$	1,281		$	—
Current benefit liability	$	804		$	874
Noncurrent benefit liability	$	7,249		$	10,049
AOCI, net of tax	$	(3,456	)	$	(6,648	)

The company made a contribution of $2.5 million and $7.6 million to the Flowers Foods, Inc. Retirement Plan No. 2 (“Plan No. 2”) during the third quarter of Fiscal 2019 and Fiscal 2020, respectively.  There were no contributions to the Flowers Foods, Inc. Plan No. 1 (“Plan No. 1”) during Fiscal 2019 or Fiscal 2020, and there were no contributions made by the company to any plan during Fiscal 2021.

Pension Plans

The company maintains a trusted, noncontributory defined benefit pension plan that covers a small number of certain union employees.  The benefits in this plan are based on years of service and the employee’s career earnings.  This qualified plan is funded at amounts deductible for income tax purposes but not less than the minimum funding required by the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Pension Protection Act of 2006 (“PPA”).  Benefits under the company’s largest pension plan were fully terminated and transferred to an insurance company in the form of a nonparticipating group annuity contract during the first quarter of Fiscal 2020.  No cash contributions were required to support the transaction, but the company recorded non-cash settlement and curtailment charges of $108.8 million in Fiscal 2020.

The company recognizes settlement accounting charges, which accelerates recognition of a plan’s unrecognized net gain or loss, when the ongoing lump sum payments from the plan exceed the sum of the plan’s service cost and interest cost.  During the fourth quarter of Fiscal 2021, the company determined it was probable a settlement would occur and paid lump sums that exceeded that threshold and, as a result, the company recorded a settlement charge of $0.4 million in the fourth quarter of Fiscal 2021.

The company uses a calendar year end for the measurement date since the plans are based on a calendar year and because it approximates the company’s fiscal year end. As of December 31, 2021 and December 31, 2020, the assets of the qualified plans included certificates of deposit, marketable equity securities, mutual funds, corporate and government debt securities, other diversifying strategies and annuity contracts. The company expects pension cost of approximately $0.7 million for Fiscal 2022.

The net periodic pension cost (income) for the company’s pension plans includes the following components for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Service cost	$	971		$	854		$	703
Interest cost		758			2,108			11,930
Expected return on plan assets		(1,867	)		(3,933	)		(17,147	)
Settlement loss		403			104,473			—
Curtailment loss		—			4,284			—
Amortization:
Prior service cost		57			115			387
Actuarial loss		742			1,747			7,098
Net periodic pension cost (income)		1,064			109,648			2,971
Other changes in plan assets and benefit obligations recognized in OCI:
Current year actuarial (gain) loss		(1,288	)		(25,515	)		11,277
Settlement loss		(403	)		(104,473	)		—
Curtailment loss		—			(4,284	)		—
Amortization of prior service cost		(57	)		(115	)		(387	)
Amortization of actuarial loss		(742	)		(1,747	)		(7,098	)
Total recognized in OCI		(2,490	)		(136,134	)		3,792
Total recognized in net periodic (benefit) cost and OCI	$	(1,426	)	$	(26,486	)	$	6,763

Actual return on plan assets for Fiscal 2021, 2020, and 2019 was $1.9 million, $15.8 million, and $51.8 million, respectively.

The funded status and the amounts recognized in the Consolidated Balance Sheets for the company’s pension plans are as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	37,650		$	396,906
Service cost		971			854
Interest cost		758			2,108
Actuarial gain		(1,228	)		(13,657	)
Benefits paid		(1,662	)		(7,762	)
Settlements		(1,699	)		(340,799	)
Benefit obligation at end of year	$	34,790		$	37,650
Change in plan assets:
Fair value of plan assets at beginning of year	$	34,750		$	360,675
Actual return on plan assets		1,929			15,790
Employer contribution		271			7,871
Benefits paid		(1,662	)		(7,762	)
Transfer payments		—			(1,025	)
Settlements		(1,699	)		(340,799	)
Fair value of plan assets at end of year	$	33,589		$	34,750
Funded status, end of year:
Fair value of plan assets	$	33,589		$	34,750
Benefit obligations		(34,790	)		(37,650	)
Unfunded status and amount recognized at end of year	$	(1,201	)	$	(2,900	)
Amounts recognized in the balance sheet:
Noncurrent asset	$	1,281		$	—
Current liability		(258	)		(259	)
Noncurrent liability		(2,224	)		(2,641	)
Amount recognized at end of year	$	(1,201	)	$	(2,900	)
Amounts recognized in AOCI:
Net actuarial loss before taxes	$	7,913		$	10,347
Prior service cost before taxes		198			255
Amount recognized at end of year	$	8,111		$	10,602
Accumulated benefit obligation at end of year	$	32,950		$	36,104

The actuarial gain/(loss) on defined benefit obligations of the employer due to experience, including any assumption changes, different from assumed, and the reasons for such (gain)/loss, can be found in the table below for Fiscal 2021, 2020 and 2019 (amounts in thousands).  

	Amount of (Gain)/Loss on Defined Benefit Obligation			Reasons for (Gain)/Loss
Fiscal 2021 (1)	$	(1,228	)	Gain from increase in general level of interest rates used to measure defined benefit plan obligations (approximately 30 basis points); Loss from change in mortality assumption scale from MP-2020 to MP-2021.
Fiscal 2020 (1)	$	3,718		Loss from decrease in general level of interest rates used to measure defined benefit plan obligations (approximately 60 basis points); Gain from change in mortality assumption scale from MP-2019 to MP-2020.
Fiscal 2019	$	45,979		Loss from decrease in general level of interest rates used to measure defined benefit plan obligations (approximately 90 basis points); Gain from change in mortality assumption to use PRI-2012 Mortality Tables and projection scale MP-2019, from the RP-2018 Mortality tables and projection scale MP-2018.

(1) Includes only losses from plans remaining on or after December 31, 2020.

Assumptions used in accounting for the company’s pension plans at each of the respective fiscal years ending are as follows:

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Weighted average assumptions used to determine benefit obligations:
Measurement date	12/31/2021			12/31/2020			12/31/2019
Discount rate		3.06	%		2.78	%		2.54	%
Rate of compensation increase		3.00	%		3.00	%		3.00	%
Weighted average assumptions used to determine net periodic benefit    cost/(income):
Measurement date	1/1/2021			1/1/2020			1/1/2019
Discount rate		2.78	%		2.54	%		3.41	%
Expected return on plan assets		5.70	%		4.97	%		5.34	%
Rate of compensation increase		3.00	%		3.00	%		3.00	%

In developing the expected long-term rate of return on plan assets at each measurement date, the company considers the plan assets’ historical actual returns, targeted asset allocations, and the anticipated future economic environment and long-term performance of individual asset classes, based on the company’s investment strategy. While appropriate consideration is given to recent and historical investment performance, the assumption represents management’s best estimate of the long-term prospective return. Further, pension costs do not include an explicit expense assumption, and therefore the return on assets rate reflects the long-term expected return, net of expenses.  

Based on these factors the expected long-term rate of return assumption for Plan No. 2 was set at 5.9% for Fiscal 2022.  The average annual return on the plan assets over the last 15 years (while the assets were collectively managed) was approximately 6.3% (net of expenses).

Plan Assets

The investment committee, which consists of certain members of management, establishes investment guidelines and strategies and regularly monitors the performance of the plans’ assets. The investment committee is responsible for executing these strategies and investing the pension assets in accordance with ERISA and fiduciary standards. The investment objective of the pension plans is to preserve the plans’ capital and maximize investment earnings within acceptable levels of risk and volatility. The investment committee meets on a regular basis with its investment advisors to review the performance of the plans’ assets. Based upon performance and other measures and recommendations from its investment advisors, the investment committee rebalances the plans’ assets to the targeted allocation when considered appropriate. The fair values of all of the company pension plan assets at December 31, 2021 and December 31, 2020, by asset class are as follows (amounts in thousands):

	Fair value of Pension Plan Assets as of December 31, 2021
Asset Class	Quoted prices in active markets for identical assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Short term investments and cash	$	453	$	—	$	—	$	453
Common stocks:
International common stocks		4,708		—		—		4,708
U.S. common stocks		8,177		—		—		8,177
Fixed income securities:
U.S. government bonds		13,514		—		—		13,514
U.S. government agency bonds		—		—		—		—
U.S. corporate bonds		6,737		—		—		6,737
Pending transactions(*)		—		—		—		—
Accrued (expenses) income(*)		—		—		—		—
Total	$	33,589	$	—	$	—	$	33,589

	Fair value of Pension Plan Assets as of December 31, 2020
Asset Class	Quoted prices in active markets for identical assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Short term investments and cash	$	546	$	—	$	—	$	546
Common stocks:
International common stocks		5,223		—		—		5,223
U.S. common stocks		8,587		—		—		8,587
Fixed income securities:
U.S. government bonds		14,577		—		—		14,577
U.S. government agency bonds		—		—		—		—
U.S. corporate bonds		5,877		—		—		5,877
International corporate bonds		—		—		—		—
Pending transactions(*)		—		—		—		—
Other assets and (liabilities)(*)		—		—		—		(35	)
Accrued (expenses) income(*)		—		—		—		(25	)
Total	$	34,810	$	—	$	—	$	34,750

(*) This class includes accrued interest, dividends, and amounts receivable from asset sales and amounts payable for asset purchases.   

The company’s investment policy includes various guidelines and procedures designed to ensure the plan’s assets are invested in a manner necessary to meet expected future benefits earned by participants. The investment guidelines consider a broad range of economic conditions.   

The plan asset allocation as of the measurement dates December 31, 2021 and December 31, 2020, and target asset allocations for Fiscal 2022 are as follows for Plan No. 2:

	Target Allocation	Percentage of Plan Assets at the Measurement Date (As percent)
Asset Category	2022	2021		2020
Equity securities	0-80%		38.0		40.0
Fixed income securities	20-100%		60.0		59.0
Short term investments and cash	0-10%		2.0		1.0
Total			100.0		100.0

The objectives of the target allocations are to maintain investment portfolios that diversify risk through prudent asset allocation parameters, achieve asset returns that meet or exceed the plans’ actuarial assumptions, and achieve asset returns that are competitive with like institutions employing similar investment strategies.

Cash Flows

Company contributions to qualified and nonqualified plans are as follows (amounts in thousands):

Year	Required		Discretionary		Total
2021	$	271	$	—	$	271
2020	$	271	$	7,600	$	7,871
2019	$	1,040	$	1,731	$	2,771

All contributions are made in cash. The required contributions made during Fiscal 2021 include $0.3 million in nonqualified pension benefits paid from corporate assets. There were no contributions made to the qualified plans during Fiscal 2021.  During Fiscal 2022, the company expects to pay $0.3 million in nonqualified pension benefits from corporate assets. There are no expected contributions to Plan No. 2 that are required under ERISA and the PPA during Fiscal 2022; however, the company expects to make a $1.0 million discretionary contribution to Plan No. 2 in Fiscal 2022.  These amounts represent estimates that are based on assumptions that are subject to change.

Benefit Payments

The following are benefits paid under the plans (including settlements) during Fiscal 2021, 2020, and 2019 and expected to be paid from Fiscal 2022 through Fiscal 2031. Estimated future payments include qualified pension benefits that will be paid from the plans’ assets and nonqualified pension benefits that will be paid from corporate assets (amounts in thousands):

Year	Pension Benefits
2019	$	29,484	*
2020	$	348,561	^
2021	$	3,361	+
Estimated Future Payments:
2022	$	4,534
2023	$	3,027
2024	$	2,814
2025	$	2,404
2026	$	2,150
2027 – 2031	$	9,423

* Includes $7.0 million and $0.7 million from Plan No. 1 and Plan No. 2, respectively, paid as lump sums.

^ Includes $104.5 million and $0.4 million from Plan No. 1 and Plan No. 2, respectively, paid as lump sums.

+ Includes $1.7 million from Plan No. 2 paid as lump sums.

Postretirement Benefit Plans

The company sponsors postretirement benefit plans that provide health care and life insurance benefits to retirees who meet certain eligibility requirements. Generally, this includes employees with at least 10 years of service who have reached age 60 and participate in a Flowers retirement plan. Retiree medical coverage is provided for a period of three to five years, depending on the participant’s age and service at retirement. Participant premiums are determined using COBRA premium levels. Retiree life insurance benefits are offered to a closed group of retirees.   The company also sponsors a medical, dental, and life insurance benefits plan to a limited and closed group of participants.

The company delivers retiree medical and dental benefits for Medicare eligible retirees through a health-care reimbursement account. The company no longer sponsors a medical plan for Medicare eligible retirees and does not file for a Medicare Part D subsidy. 

The net periodic benefit (income) cost for the company’s postretirement benefit plans includes the following components for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Service cost	$	337		$	285		$	283
Interest cost		119			194			297
Amortization:
Prior service credit		(3	)		(4	)		(41	)
Actuarial gain		(211	)		(300	)		(276	)
Total net periodic benefit cost (income)		242			175			263
Other changes in plan assets and benefit obligations recognized in OCI:
Current year actuarial loss (gain)		238			643			(575	)
Current year prior service credit		(2,214	)		—			—
Amortization of actuarial gain		211			300			276
Amortization of prior service credit		3			4			41
Total recognized in OCI		(1,762	)		947			(258	)
Total recognized in net periodic benefit cost and OCI	$	(1,520	)	$	1,122		$	5

The unfunded status and the amounts recognized in the Consolidated Balance Sheets for the company’s postretirement benefit plans are as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	8,023		$	7,477
Service cost		337			285
Interest cost		119			194
Participant contributions		453			573
Actuarial loss		238			642
Plan amendments		(2,214	)		—
Benefits paid		(1,384	)		(1,148	)
Benefit obligation at end of year	$	5,572		$	8,023
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer contributions		931			575
Participant contributions		453			573
Benefits paid		(1,384	)		(1,148	)
Fair value of plan assets at end of year	$	—		$	—
Funded status, end of year:
Fair value of plan assets	$	—		$	—
Benefit obligations		(5,572	)		(8,023	)
Unfunded status and amount recognized at end of year	$	(5,572	)	$	(8,023	)
Amounts recognized in the balance sheet:
Current liability	$	(547	)	$	(615	)
Noncurrent liability		(5,025	)		(7,408	)
Amount recognized at end of year	$	(5,572	)	$	(8,023	)
Amounts recognized in AOCI:
Net actuarial gain before taxes	$	(1,286	)	$	(1,735	)
Prior service credit before taxes		(2,216	)		(5	)
Amounts recognized in AOCI	$	(3,502	)	$	(1,740	)

Assumptions used in accounting for the company’s postretirement benefit plans at each of the respective fiscal years ending are as follows:  

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Weighted average assumptions used to determine benefit obligations:
Measurement date	12/31/2021			12/31/2020			12/31/2019
Discount rate		2.60	%		2.11	%		3.01	%
Health care cost trend rate used to determine benefit obligations:
Initial rate		6.25	%		6.50	%		6.50	%
Ultimate rate		5.00	%		5.00	%		5.00	%
Year trend reaches the ultimate rate	2027			2027			2026
Weighted average assumptions used to determine net periodic cost:
Measurement date	1/1/21			1/1/20			1/1/19
Discount rate		2.11	%		3.01	%		4.07	%
Health care cost trend rate used to determine net periodic cost:
Initial rate		6.50	%		6.50	%		6.50	%
Ultimate rate		5.00	%		5.00	%		5.00	%
Year trend reaches the ultimate rate	2027			2026			2025

Cash Flows

Company contributions to postretirement plans are as follows (amounts in thousands):

Year	Employer Net Contribution
2019	$	722
2020	$	575
2021	$	931
2022 (Expected)	$	548

The table above reflects only the company’s share of the benefit cost. Since the company no longer receives reimbursement for Medicare Part D subsidies, the entire $0.5 million expected funding for postretirement benefit plans during 2022 will be required to pay for benefits. Contributions by participants to postretirement benefits were $0.5 million, $0.6 million, and $0.7 million for Fiscal 2021, 2020, and 2019, respectively.

Benefit Payments

The following are benefits paid by the company during Fiscal 2021, 2020, and 2019 and expected to be paid from Fiscal 2022 through Fiscal 2031. All benefits are expected to be paid from the company’s assets (amounts in thousands):

	Postretirement benefits
Year	Employer gross contribution
2019	$	722
2020	$	575
2021	$	931
Estimated Future Payments:
2022	$	548
2023	$	507
2024	$	465
2025	$	486
2026	$	505
2027 – 2031	$	2,355

Multiemployer Plans

The company contributes to various multiemployer pension plans. Benefits provided under the multiemployer pension plans are generally based on years of service and employee age. Expense under these plans was $1.0 million for Fiscal 2021, $1.2 million for Fiscal 2020, and $1.1 million for Fiscal 2019.

The company contributes to several multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover various union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If we choose to stop participating in some of these multiemployer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. None of the contributions to the pension funds was in excess of 5% or more of the total contributions for plan years 2021, 2020, and 2019. There are no contractually required minimum contributions to the plans as of January 1, 2022.

On September 22, 2021, the union participants of the Retail, Wholesale and Department Store Union Fund (the “Fund”) at our Birmingham, Alabama plant voted to withdraw from the Fund in the most recent collective bargaining agreement.  The withdrawal was effective, and the union participants were eligible to participate in the 401(k) plan, on December 1, 2021.  During the third quarter of Fiscal 2021, the company recorded a liability of $2.1 million related to the withdrawal from the Fund.  The withdrawal liability was computed as the net present value of 20 years of monthly payments derived from the company’s share of unfunded vested benefits.  While this is our best estimate of the ultimate cost of the withdrawal from this Fund, additional withdrawal liability may be incurred based on the final Fund assessment or in the event of a mass withdrawal, as defined by statute, occurring anytime within the next three years following our complete withdrawal.  Additionally, the company recorded a liability of $1.2 million related to

transition payments, including related tax payments, for the benefit of union participants as part of the collective bargaining agreement.  The withdrawal liability charge and the transition payments are recorded in the multi-employer pension plan withdrawal costs line item on our Consolidated Statements of Income.  The transition payments were paid during the fourth quarter of Fiscal 2021.  The remaining liability associated with the withdrawal is recorded in other accrued current liabilities on the Consolidated Balance Sheets.

The company’s participation in these multiemployer plans for Fiscal 2021 is outlined in the table below. The EIN/Pension Plan Number column provides the Employer Identification Number (“EIN”) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent PPA zone status available in 2021 and 2020 is for the plan’s year-end at December 31, 2021 and December 31, 2020, respectively. The zone status is based on information that the company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The FIP/RP Status Pending/Implemented column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreements to which the plans are subject. Finally, there have been no significant changes that affect the comparability of contributions.

In December 2014, the Consolidated and Further Continuing Appropriations Act of 2015 (the “2015 Appropriations Act”) was signed into law and materially amended the PPA funding rules. In general, the PPA funding rules were made more flexible in order to make more manageable the steps necessary for multi-employer plans to become or remain economically viable in the future. While in previous years we have been informed that several of the multi-employer pension plans to which our subsidiaries contribute have been labeled with a “critical” or “endangered” status as defined by the PPA, the changes made by the 2015 Appropriations Act will materially impact, on a going forward basis, these prior funding status assessments. In any event, it is unclear at this time what impact, if any, the 2015 Appropriations Act will have on our future obligations to the multi-employer pension plans in which we participate.

				Pension Protection Act			Contributions (Amounts in
				Zone Status			thousands)							Expiration Date of
		Pension				FIP/RP Status	2021		2020		2019		Surcharge	Collective Bargaining
Pension Fund	EIN	Plan No.		2021	2020	Pending/Implemented	($)		($)		($)		Imposed	Agreement
IAM National Pension Fund	51-6031295		002	Red	Red	Yes		136		153		111	Yes	4/29/2022
Retail, Wholesale and Department    Store International Union and    Industry Pension Fund	63-0708442		001	Red	Red	Yes		211		157		160	No	*
Western Conference of Teamsters    Pension Trust ^	91-6145047		001	Green	Green	No		266		349		244	No	2/4/2022

* The union employees withdrew from the fund effective December 1, 2021.

          ^ The collective bargaining agreement is currently under negotiation.

401(k) Retirement Savings Plans

The Flowers Foods 401(k) Retirement Savings Plan covers substantially all of the company’s employees who have completed certain service requirements. During Fiscal 2021, 2020, and 2019, the total cost and employer contributions were as follows (amounts in thousands):

Contributions by fiscal year	Defined contribution plans expense
Fiscal 2021	$	28,081
Fiscal 2020	$	27,995
Fiscal 2019	$	27,336

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Income Taxes

12 Months Ended

Jan. 01, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 21. Income Taxes

The company’s provision for income tax expense (benefit) consists of the following for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Current Taxes:
Federal	$	46,018		$	64,113		$	23,397
State		11,790			15,434			5,539
		57,808			79,547			28,936
Deferred Taxes:
Federal		6,946			(26,112	)		17,335
State		(169	)		(5,042	)		1,274
		6,777			(31,154	)		18,609
Income tax expense	$	64,585		$	48,393		$	47,545

Fiscal 2020 deferred income taxes included the impact of the termination of Plan No.1.  See Footnote 20, Postretirement Plans, for a description of the termination of Plan No. 1.

Income tax expense (benefit) differs from the amount computed by applying the applicable U.S. federal income tax rate of 21% because of the effect of the following items for Fiscal 2021, 2020 and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Tax at U.S. federal income tax rate	$	56,862		$	42,149		$	44,538
State income taxes, net of federal income tax benefit		9,181			8,209			5,384
Net share-based payments (windfalls)		(104	)		(80	)		(828	)
Other		(1,354	)		(1,885	)		(1,549	)
Income tax expense	$	64,585		$	48,393		$	47,545

In Fiscal 2021, 2020 and 2019, the most significant difference in the effective rate and the statutory rate was state income taxes.

Deferred tax assets (liabilities) are comprised of the following (amounts in thousands):

	January 1, 2022			January 2, 2021
Self-insurance	$	5,502		$	4,806
Compensation and employee benefits		8,816			7,698
Deferred income		4,948			5,988
Loss and credit carryforwards		12,990			13,026
Equity-based compensation		6,797			3,977
Legal accrual		6,514			2,867
Deferred payroll tax under CARES act		4,100			7,525
Pension and postretirement benefits		1,722			2,390
Financing and operating lease right-of-use liabilities		77,422			88,816
Other		6,642			7,028
Valuation allowance		(1,030	)		(1,030	)
Deferred tax assets		134,423			143,091
Depreciation		(71,041	)		(69,056	)
Intangibles		(114,882	)		(109,824	)
Financing and operating lease right-of-use assets		(75,233	)		(85,720	)
Hedging		(2,015	)		(4,357	)
Other		(5,009	)		(2,393	)
Deferred tax liabilities		(268,180	)		(271,350	)
Net deferred tax liability	$	(133,757	)	$	(128,259	)

The company has a deferred tax asset of $2.8 million related to a federal net operating loss carryforward which we expect to fully utilize before expiration. Additionally, the company and various subsidiaries have a net deferred tax asset of $4.8 million related to state net operating loss carryforwards, and $5.4 million for credit carryforwards with expiration dates through Fiscal 2041. The utilization of a portion of these state carryforwards could be limited in the future; therefore, a valuation allowance has been recorded. Should the company determine at a later date that certain of these losses which have been reserved for may be utilized, a benefit may be recognized in the Consolidated Statements of Income. Likewise, should the company determine at a later date that certain of these net operating losses for which a deferred tax asset has been recorded may not be utilized, a charge to the Consolidated Statements of Income may be necessary.  See Note 2, Summary of Significant Accounting Policies, for the deferred tax asset valuation allowance analysis.

There are no unrecognized gross tax benefits as of January 1, 2022.  These amounts would be presented exclusive of interest accrued and recorded in other long-term liabilities on the Consolidated Balance Sheets.

The company accrues interest expense and penalties related to income tax liabilities as a component of income before taxes. No accrual of penalties is reflected on the company’s balance sheet as the company believes the accrual of penalties is not necessary based upon the merits of its income tax positions. The company had no accrued interest balance at January 1, 2022 and January 2, 2021.

The company defines the federal jurisdiction as well as various state jurisdictions as “major” jurisdictions. The company is no longer subject to federal examinations for years prior to 2018, and with limited exceptions, for years prior to 2017 in state jurisdictions.

The following is a reconciliation of the total amounts of unrecognized tax benefits for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020			Fiscal 2019
Unrecognized tax benefit at beginning of fiscal year	$	—	$	306		$	750
Lapses of statutes of limitations		—		(306	)		(444	)
Unrecognized tax benefit at end of fiscal year	$	—	$	—		$	306

At this time, we do not anticipate significant changes to the amount of gross unrecognized tax benefits over the next twelve months.

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Commitments and Contingencies

12 Months Ended

Jan. 01, 2022

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 22. Commitments and Contingencies

Self-insurance reserves and other commitments and contingencies

The company has recorded current liabilities of $29.8 million and $29.4 million related to self-insurance reserves at January 1, 2022 and January 2, 2021, respectively. The reserves include an estimate of expected settlements on pending claims, defense costs and a provision for claims incurred but not reported. These estimates are based on the company’s assessment of potential liability using an analysis of available information with respect to pending claims, historical experience and current cost trends.

In the event the company ceases to utilize the independent distributor model or exits a geographic market, the company is contractually required in some situations to purchase the distribution rights from the independent distributor.  The company expects to continue operating under this model and has concluded that the possibility of a loss is remote.

The company’s facilities are subject to various federal, state and local laws and regulations regarding the discharge of material into the environment and the protection of the environment in other ways. The company is not a party to any material proceedings arising under these regulations. The company believes that compliance with existing environmental laws and regulations will not materially affect the consolidated financial condition, results of operations, cash flows or the competitive position of the company. The company believes it is currently in substantial compliance with all material environmental regulations affecting the company and its properties.  

Litigation

The company and its subsidiaries from time to time are parties to, or targets of, lawsuits, claims, investigations and proceedings, including personal injury, commercial, contract, environmental, antitrust, product liability, health and safety and employment matters, which are being handled and defended in the ordinary course of business. While the company is unable to predict the outcome of these matters, it believes, based upon currently available facts, that it is remote that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations or cash flows in the future. However, adverse developments could negatively impact earnings in a particular future fiscal period.

At this time, the company is defending twenty-four complaints filed by IDPs alleging that they were misclassified as independent contractors.  Eight of these lawsuits seek class and/or collective action treatment. The remaining sixteen cases either allege individual claims or do not seek class or collective action treatment or, in cases in which class treatment was sought, the court denied class certification. The respective courts have ruled on plaintiffs’ motions for class certification in four of the pending cases, each of which is discussed below.  Unless otherwise noted, a class was conditionally certified under the FLSA in each of the cases described below, although the company has the ability to petition the court to decertify that class at a later date:

Case Name	Case No.	Venue	Date Filed	Status
Noll v. Flowers Foods, Inc., Lepage Bakeries Park Street, LLC, and CK Sales Co., LLC	1:15-cv-00493	U.S. District Court District of Maine	12/3/2015	On October 21, 2021, Flowers Foods, Inc., Lepage Bakeries Park Street, LLC and CK Sales Co., LLC reached an agreement to settle this and two other lawsuits pending in the U.S. District Court for the District of Maine – Bowen et al. v. Flowers Foods, Inc. et al. (No. 1:20-cv-00411); and Aucoin et al. v. Flowers Foods, Inc. et al (No. 1:20-cv-00410).  The settlement provides for a payment of $16.5 million, comprised of up to $9 million in settlement funds and $7.5 million in attorneys’ fees.  The settlement also requires a phased repurchase of approximately 75 distribution territories in Maine, which, once completed, the company will service its Maine market using company sales employees.  The company estimates this cost to be $6.6 million (of which $4.7 million is included in other accrued liabilities and the remainder as a contra account to notes receivable).  These amounts were recorded in the selling, distribution, and administrative expenses line item of the Consolidated Statements of Income.  The terms of the settlement require court approval.  The company remains committed to our IDP program.
Richard et al. v. Flowers Foods, Inc., Flowers Baking Co. of Lafayette, LLC, Flowers Baking Co. of Baton Rouge, LLC, Flowers Baking Co. of Tyler, LLC and Flowers Baking Co. of New Orleans, LLC	6:15-cv-02557	U.S. District Court Western District of Louisiana	10/21/2015	On April 9, 2021, the court decertified the FLSA collective action and denied plaintiffs' motion to certify under Federal Rule of Civil Procedure 23 a state law class of distributors who operated in the state of Louisiana.
Coronado v. Flowers Foods, Inc. and Flowers Baking Co. of El Paso, LLC	1:16-cv-00350	U.S. District Court District of New Mexico	4/27/2016	On August 2, 2021, the court denied defendants' motion to decertify the FLSA collective action.
Martins v. Flowers Foods, Inc., Flowers Baking Co. of Bradenton, LLC and Flowers Baking Co. of Villa Rica, LLC	8:16-cv-03145	U.S. District Court Middle District of Florida	11/8/2016

The company and/or its respective subsidiaries contests the allegations and are vigorously defending all of these lawsuits. Given the stage of the complaints and the claims and issues presented, except for lawsuits disclosed herein that have reached a settlement or agreement in principle, the company cannot reasonably estimate at this time the possible loss or range of loss that may arise from the unresolved lawsuits.

During the last three fiscal years, the company has settled, and the appropriate court has approved, the following collective and/or class action lawsuits filed by distributors alleging that such distributors were misclassified as independent contractors. In each of these settlements, in addition to the monetary terms noted below, the settlements also included certain non-economic terms intended to strengthen and enhance the independent contractor model:

Case Name	Case No.	Venue	Date Filed	Comments
Caddick et al. v. Tasty Baking Co.	2:19-cv-02106	U.S. District Court Eastern District of Pennsylvania	5/15/2019	On October 27, 2021, the Court dismissed this lawsuit and approved an agreement to settle this and a companion case (Bertino v. Tasty Baking Co., No. 2:20-cv-05823) for a payment of $3.15 million, inclusive of attorneys’ fees and cost, service awards and consideration for class members who are active distributors to enter into an amendment to their distributor agreements. This settlement charge was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the third quarter of Fiscal 2020.  The settlement was paid in early November 2021.
Rosinbaum et al. v. Flowers Foods, Inc. and Franklin Baking Co., LLC	7:16-cv-00233	U.S. District Court Eastern District of North Carolina	12/1/2015	On December 29, 2020, the Court dismissed this lawsuit and approved an agreement to settle this matter for $8.3 million, inclusive of attorneys’ fees and costs, service awards, and incentives for class members who are active distributors to enter into an amendment to their distributor agreements.  This settlement charge was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the fourth quarter of fiscal 2019 and was paid during the first quarter of Fiscal 2021.
Carr et al. v. Flowers Foods, Inc. and Flowers Baking Co. of Oxford, Inc.	2:15-cv-06391	U.S. District Court Eastern District of Pennsylvania	12/1/2015	On September 29, 2020,  the Court dismissed this lawsuit and approved an agreement to settle this matter and the Boulange matter (see below) for a payment of $13.25 million, inclusive of attorneys’ fees and costs, service awards, and incentives for class members who are active distributors to enter into an amendment to their distributor agreements.  This settlement charge was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the fourth quarter of fiscal 2019 and was paid during the fourth quarter of Fiscal 2020.
Boulange v. Flowers Foods, Inc. and Flowers Baking Co. of Oxford, Inc.	2:16-cv-02581	U.S. District Court Eastern District of Pennsylvania	3/25/2016	This matter was consolidated with the Carr litigation described immediately above.

Neff et al. v. Flowers Foods, Inc., Lepage Bakeries Park Street, LLC, and CK Sales Co., LLC	5:15-cv-00254	U.S. District Court District of Vermont	12/2/2015	On November 13, 2020, the court dismissed this lawsuit following a October 22, 2020 order approving an agreement to settle this matter for a payment of $7.6 million, inclusive of attorneys’ fees and costs, service awards, and incentives for class members who are active distributors to enter into an amendment to their distributor agreements.   This settlement charge was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the fourth quarter of Fiscal 2019 and paid during the fourth quarter of Fiscal 2020.
Green et al. v. Flowers Foods, Inc. et al.	1:19-cv-01021	U.S. District Court Western District of Tennessee	2/1/2019	*

*On September 7, 2018, the company negotiated a global settlement to resolve 12 pending collective action lawsuits against the company for a payment in the amount of $9.0 million, comprised of $5.4 million in settlement funds and $3.6 million in attorneys’ fees. The proposed settlement class consisted of approximately 900 members.  The settlement also contained certain non-economic terms intended to strengthen and enhance the independent contractor model, which remains in place.  On February 1, 2019, plaintiffs’ counsel filed a consolidated complaint with the United States District Court for the Western District of Tennessee to obtain judicial approval of the parties’ global settlement.  The court approved the global settlement on February 27, 2019.  Thereafter, the parties moved to dismiss the 12 settled lawsuits with prejudice. This settlement was recorded as a selling, distribution and administrative expense in our Consolidated Statements of Income during the third quarter of Fiscal 2018.  A total of $4.2 million was paid in March 2019, and a second payment of $3.5 million was made in June 2019.  The remainder of the settlement funds ($1.3 million) reverted to Flowers during the second quarter of Fiscal 2019 per the terms of the settlement, and was recorded as a reduction of selling, distribution and administrative expense in our Consolidated Statements of Income.

See Note 14, Debt and Other Commitments, for additional information on the company’s commitments.

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Unaudited Quarterly Financial Information

12 Months Ended

Jan. 01, 2022

Quarterly Financial Information Disclosure [Abstract]

Unaudited Quarterly Financial Information

Note 23. Unaudited Quarterly Financial Information

Results of operations for each of the four quarters in the respective fiscal years are as follows. For Fiscal 2021, each quarter represents a period of twelve weeks, except the first quarter, which includes sixteen weeks.  For Fiscal 2020, first quarter consisted of sixteen weeks, second and third quarters twelve weeks, and fourth quarter thirteen weeks. (amounts in thousands, except per share data):

		First Quarter			Second Quarter		Third Quarter		Fourth Quarter
Sales	2021	$	1,302,168		$	1,017,309	$	1,027,800	$	983,490
	2020	$	1,349,444		$	1,025,861	$	989,650	$	1,023,036
Materials, supplies, labor and other production costs    (exclusive of depreciation and amortization    shown separately)*	2021	$	643,576		$	504,062	$	515,078	$	512,531
	2020	$	670,873		$	506,033	$	497,659	$	521,577
Net income (loss)	2021	$	71,655		$	56,358	$	38,852	$	39,322
	2020	$	(5,772	)	$	57,919	$	44,347	$	55,824
Basic net income (loss) per share	2021	$	0.34		$	0.27	$	0.18	$	0.19
	2020	$	(0.03	)	$	0.27	$	0.21	$	0.26
Diluted net income (loss) per share	2021	$	0.34		$	0.26	$	0.18	$	0.18
	2020	$	(0.03	)	$	0.27	$	0.21	$	0.26

*

The company does not report gross margin.  This line item presents our material, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) under an alternative presentation.

The table below presents financial results that impact comparability, by quarter, for Fiscal 2021 (amounts in thousands):

Items presented separately on the Consolidated Statements of Income	First Quarter		Second Quarter		Third Quarter			Fourth Quarter		Fiscal 2021		Footnote
Loss (recovery) on inferior ingredients	$	122	$	—	$	(950	)	$	1,772	$	944	Note 4
Multi-employer pension plan withdrawal costs	$	—	$	—	$	3,300		$	—	$	3,300	Note 20
Pension plan settlement loss	$	—	$	—	$	—		$	403	$	403	Note 20

The table below presents financial results that impact comparability, by quarter, for Fiscal 2020 (amounts in thousands):

Items presented separately on the Consolidated Statements of Income	First Quarter		Second Quarter		Third Quarter			Fourth Quarter			Fiscal 2020		Footnote
Loss on inferior ingredients	$	—	$	—	$	—		$	107		$	107	Note 4
Restructuring and related impairment charges	$	—	$	10,535	$	20,100		$	4,848		$	35,483	Note 5
Pension plan settlement and curtailment    loss (gain)	$	116,207	$	—	$	(7,153	)	$	(297	)	$	108,757	Note 20

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Subsequent Events

12 Months Ended

Jan. 01, 2022

Subsequent Events [Abstract]

Subsequent Events

Note 24. Subsequent Events

The company has evaluated subsequent events since January 1, 2022, the date of these financial statements.  We believe there were no material events or transactions discovered during this evaluation that requires recognition or disclosure in the financial statements other than the items discussed below.

Dividend.    On February 18, 2022, the Board of Directors declared a dividend of $0.21 per share on the company’s common stock to be paid on March 18, 2022 to shareholders of record on March 4, 2022.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jan. 01, 2022

Accounting Policies [Abstract]

Basis of Consolidation

Basis of Consolidation.    The Consolidated Financial Statements include the accounts of the company and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation.

Use of Estimates

Use of Estimates.    The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fiscal Year End

Fiscal Year End.    The company operates on a 52-53 week fiscal year ending the Saturday nearest December 31. Fiscal 2021 consisted of 52 weeks, Fiscal 2020 consisted of 53 weeks, and Fiscal 2019 consisted of 52 weeks.

Revenue Recognition

Revenue Recognition.    Revenue is recognized when obligations under the terms of a contract with our customers are satisfied. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.  The company records both direct and estimated reductions to gross revenue for customer programs and incentive offerings at the time the incentive is offered or at the time of revenue recognition for the underlying transaction that results in progress by the customer towards earning the incentive. These allowances include price promotion discounts, coupons, customer rebates, cooperative advertising, and product returns. Consideration payable to a customer is recognized at the time control transfers and is a reduction to revenue.   The recognition of costs for promotion programs involves the use of judgment related to performance and redemption estimates. Estimates are made based on historical experience and other factors. Price promotion discount expense is recorded as a reduction to gross sales when the discounted product is sold to the customer.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in our selling, distribution, and administrative expenses line item on the Consolidated Statements of Income.

The company’s production facilities deliver products to independent distributor partners (“IDP” or “IDPs”), who sell and deliver those products to outlets of retail accounts that are within the IDPs’ defined geographic territory. The IDPs sell products using either scan-based trading (“SBT”) technology, authorized charge tickets, or cash sales.  

SBT technology allows the retailer to take ownership of our products when the consumer purchases the products rather than at the time they are delivered to the retailer. Control of the inventory does not transfer upon delivery to the retailer because the company controls the risks and rights until the product is scanned at the reseller’s register.  Each of the company’s products is considered distinct because the resellers expect each item to be a performance obligation.  The company’s performance obligations are satisfied at the point in time when the end consumer purchases the product because each product is considered a separate performance obligation. Consequently, revenue is recognized at a point in time for each scanned item.  The company has concluded that we are the principal.

In Fiscal 2021, 2020, and 2019, the company recorded $2.2 billion, $2.3 billion, and $1.9 billion, respectively, in sales through SBT.

SBT is utilized primarily in certain national and regional retail accounts (“SBT Outlet”). Generally, revenue is not recognized by the company upon delivery of our products by the company to the IDP or upon delivery of our products by the IDP to an SBT Outlet, but when our products are purchased by the end consumer. Product inventory in the SBT Outlet is reflected as inventory on the Consolidated Balance Sheets.

The IDP performs a physical inventory of products at each SBT Outlet weekly and reports the results to the company. The inventory data submitted by the IDP for each SBT Outlet is compared with the product delivery data. Product delivered to a SBT Outlet that is not recorded as inventory in the product delivery data has been purchased by the consumer/customer of the SBT Outlet and is recorded as sales revenue by the company. 

Non-SBT sales are classified as either authorized charge sales or cash sales.  The company provides marketing support to the IDP for authorized charge sales but does not provide marketing support to the IDP for cash sales.  Marketing support includes providing a dedicated account representative, resolving complaints, and accepting responsibility for product quality which collectively define how to manage the relationship.  Revenue is recognized at a point in time for non-SBT sales.  

The company retains inventory risk, establishes negotiated special pricing, and fulfills the contractual obligations for authorized charge sales.  The company is the principal, the IDP is the agent, and the reseller is the customer.  Revenue is recognized for authorized charge sales when the product is delivered to the customer because the company has satisfied its performance obligations.

Cash sales occur when the IDP is the end customer.  The IDP maintains accounts receivable, inventory and fulfillment risk for cash sales.  The IDP also controls pricing for the resale of cash sale products.  The company is the principal and the IDP is the customer, and an agent relationship does not exist.  The discount paid to the IDP for cash sales is recorded as a reduction to revenue.  Revenue is recognized for cash sales when the company’s products are delivered to the IDP because the company has satisfied its performance obligations.  

Certain sales are under contracts and include a formal ordering system.  Orders are placed primarily using purchase orders (“PO”) or electronic data interchange information.  Each PO, together with the applicable master supply agreement, is determined to be a separate contract.  Product is delivered via contract carriers engaged by either the company or the customer with shipping terms provided in the PO.

Each unit sold, for all product categories, is a separate performance obligation.  Each unit is considered distinct because the customer can benefit from each unit by selling each one separately to the end consumer.  Additionally, each unit is separately identifiable in the PO.  Products are delivered either freight-on-board (“FOB”) shipping or destination.  The company’s right to payment is at the time our products are obtained from our warehouse for FOB shipping deliveries.  The right to payment for FOB destination deliveries occurs after the products are delivered to the customer.  Revenue is recognized at a point in time when control transfers.  The company pays commissions to brokers who obtain contracts with customers.  Commissions are paid on the total value of the contract, which is determined at contract inception and is based on expected future activity.  Broker commissions will not extend beyond a one-year term because each product is considered a separate order in the PO.

The company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the company otherwise would have recognized is one year or less. These costs are included in our selling, distribution, and administrative expenses line item on the Consolidated Statements of Income.

The company disaggregates revenue by sales channel.  Our sales channels are branded retail, store branded retail, and non-retail and other.  The non-retail and other channel includes foodservice, restaurants, institutional, vending, thrift stores, and contract manufacturing.  The company does not disaggregate revenue by geographic region, customer type, or contract type.  All revenues are recognized at a point in time.  Sales by sales channel category are as follows for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Branded retail	$	2,875,418	$	2,914,072	$	2,478,669
Store branded retail		534,794		607,741		647,056
Non-retail and other		920,555		866,178		998,249
Total	$	4,330,767	$	4,387,991	$	4,123,974

Cash and Cash Equivalents

Cash and Cash Equivalents.    The company considers deposits in banks, certificates of deposits, and short-term investments with original maturities of three months or less, and highly liquid investments that are readily convertible to known amounts of cash to be cash and cash equivalents.

Accounts and Notes Receivable

Accounts and Notes Receivable.    Accounts and notes receivable consist of trade receivables, current portions of distributor notes receivable, and miscellaneous receivables. The company recognizes an allowance for credit losses related to its accounts and notes receivable to present the net amount expected to be collected as of the balance sheet date. The company estimates this allowance based on historical data such as days sales outstanding trends, previous write-offs of balances, and weekly reviews of aged trial balances, among others. Accounts and notes receivable balances are written off when deemed uncollectible and are recognized as a deduction from the allowance for credit losses. Expected recoveries, not to exceed the amount previously written off, are considered in determining the reserve balance at the balance sheet date. Activity in the allowance for doubtful accounts is as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other		Ending Balance
Fiscal 2021	$	15,162	$	6,071	$	5,835	$	15,398
Fiscal 2020	$	9,473	$	11,344	$	5,655	$	15,162
Fiscal 2019	$	5,751	$	11,034	$	7,312	$	9,473

Activity in the allowance for trade accounts receivable credit losses for Fiscal 2021 and 2020 was as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other			Recoveries and other			Ending Balance
Fiscal 2021	$	4,901	$	596	$	(1,018	)	$	(1,927	)	$	2,552
Fiscal 2020	$	2,089	$	2,875	$	(2,319	)	$	2,256		$	4,901

The amounts charged to expense for bad debts in the table above, along with other non-trade accounts receivable amounts, are reported as adjustments to reconcile net income to net cash provided by operating activities in the Consolidated Statements of Cash Flows. The write-offs represent the amounts that are used to reduce the gross accounts and notes receivable at the time the balance due from the customer is written-off.  Walmart/Sam’s Club is our only customer with a balance greater than 10% of outstanding trade receivables.  Their percentage of trade receivables was 19.8% and 18.8%, on a consolidated basis, as of January 1, 2022 and January 2, 2021, respectively.  No other customer accounted for greater than 10% of the company’s outstanding receivables.

Concentration of Credit Risk

Concentration of Credit Risk.    The company performs periodic credit evaluations and grants credit to customers, who are primarily in the grocery and foodservice markets, and generally does not require collateral. Our top 10 customers in Fiscal 2021, 2020, and 2019 accounted for 53.7%, 53.6% and 51.0% of sales, respectively. Our largest customer’s, Walmart/Sam’s Club, weighted percent of sales for Fiscal 2021, 2020, and 2019 was as follows:

	Percent of Sales
Fiscal 2021		21.2	%
Fiscal 2020		21.2	%
Fiscal 2019		21.1	%

Walmart/Sam’s Club is the only customer to account for greater than 10% of the company’s sales.

Inventories

Inventories.    Inventories at January 1, 2022 and January 2, 2021 are valued at net realizable value. Costs for raw materials and packaging are recorded at moving average cost. Finished goods inventories are valued at average costs.

The company will write down inventory to net realizable value for estimated unmarketable inventory equal to the difference between the cost of the inventory and the estimated net realizable value for situations when the inventory is impaired by damage, deterioration, or obsolescence.

Activity in the inventory reserve allowance is as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other		Ending Balance
Fiscal 2021	$	1,920	$	16	$	1,652	$	284
Fiscal 2020	$	161	$	3,601	$	1,842	$	1,920
Fiscal 2019	$	143	$	337	$	319	$	161

The amounts charged to expense for inventory loss in the table above are reported as adjustments to reconcile net income to net cash provided by operating activities in the Consolidated Statements of Cash Flows. The write-offs and other column represents the amounts that are used to reduce gross inventories.

Shipping Costs

Shipping Costs.    Shipping costs are included in the selling, distribution and administrative line item of the Consolidated Statements of Income. For Fiscal 2021, 2020, and 2019, shipping costs were $1,063.6 million, $1,075.8 million, and $1,010.5 million, respectively, including the costs paid to IDPs.

Spare Parts and Supplies

Spare Parts and Supplies.    The company maintains inventories of spare parts and supplies, which are used for repairs and maintenance of its machinery and equipment. These spare parts and supplies allow the company to react quickly in the event of a mechanical breakdown. These parts are valued using the moving average method and are expensed as the part is used. Periodic physical inventories of the parts are performed, and the value of the parts is adjusted for any obsolescence or difference from the physical inventory count.

Assets Held for Sale

Assets Held for Sale.  Assets to be sold are classified as held for sale in the period all the required criteria are met.  The company generally has three types of assets classified as held for sale.  These include distribution rights, plants and depots/warehouses, and other equipment.  See Note 8, Assets Held for Sale, for these amounts by classification.  

Though under no obligation to do so, the company repurchases distribution rights from and sells distribution rights to IDPs from time to time. At the time the company purchases distribution rights from an IDP, the fair value purchase price of the distribution right is recorded as “Assets Held for Sale”. Upon the sale of the distribution rights to a new IDP, the new distributor franchisee/owner may choose how he/she desires to finance the purchase of the business.  If the new distributor chooses to use optional financing via a company-related entity, a note receivable of up to ten years is recorded for the financed amount with a corresponding credit to assets held for sale to relieve the carrying amount of the territory. Any difference between the selling price of the business and the distribution rights’ carrying value, if any, is recorded as a gain or a loss in selling, distribution and administrative expenses because the company considers the IDP activity a cost of distribution. This gain is recognized over the term of the outstanding notes receivable as payments are received from the IDP.  In instances where a distribution right is sold for less than its carrying value, a loss is recorded at the date of sale and any impairment of a distribution right held for sale is recorded at such time when the impairment occurs. The deferred gains were $19.7 million and $23.9 million at January 1, 2022 and January 2, 2021, respectively, and are recorded in other short and long-term liabilities on the Consolidated Balance Sheets. The company recorded net gains of $1.6 million during Fiscal 2021, $5.1 million during Fiscal 2020 and $4.1 million during Fiscal 2019 related to the sale of distribution rights as a component of selling, distribution and administrative expenses.  The gains recorded during Fiscal 2021 included a loss of $4.7 million of repurchase obligations of distribution rights related to a legal settlement.  See Note 22, Commitments and Contingencies, for details on this settlement.

Property, Plant and Equipment and Depreciation

Property, Plant and Equipment and Depreciation.    Property, plant and equipment is recognized at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the depreciable assets.

The table below presents the range of estimated useful lives by property, plant and equipment class.

	Useful life term (years)
Asset Class	Low	High
Buildings	10	40
Machinery and equipment	3	25
Furniture, fixtures and transportation equipment	3	15

Property recorded as leasehold improvements is amortized over the shorter of the lease term or the estimated useful life of the leased property.

Depreciation expense, excluding amortization of right-of-use financing leases, for Fiscal 2021, 2020, and 2019 was as follows (amounts in thousands):

	Depreciation expense
Fiscal 2021	$	103,949
Fiscal 2020	$	103,490
Fiscal 2019	$	107,891

The company had no capitalized interest during Fiscal 2021, 2020, and 2019. The cost of maintenance and repairs is charged to expense as incurred. Upon disposal or retirement, the cost and accumulated depreciation of assets are eliminated from the respective accounts. Any gain or loss is reflected in the company’s Consolidated Statements of Income and is included in adjustments to reconcile net income to net cash provided by operating activities in the Consolidated Statements of Cash Flows.

Leases

Leases.  At the beginning of our Fiscal 2019, the company adopted the new standard using the modified retrospective transition method, which required companies to recognize lease liabilities and a right of use asset for virtually all leases on the balance sheet.  The impact at adoption was an increase to assets of $387.3 million and an increase to liabilities of $391.9 million at the beginning of our Fiscal 2019.

The company’s leases consist of the following types of assets: bakeries, corporate office space, warehouses, bakery equipment, transportation equipment, and IT equipment (debt is discussed separately in Note 14, Debt and Other Commitments).      

Real estate and equipment contracts occasionally contain multiple lease and non-lease components. Generally, non-lease components represent maintenance and utility related charges, and are primarily minor to the overall value of applicable contracts. These contracts also contain fixed payments with stated rent escalation clauses or fixed payments based on an index such as CPI. Additionally, some contracts contain tenant improvement allowances, rent holidays, lease premiums, and contingent rent provisions (which are treated as variable lease payments). Building and/or office space leases generally require the company to pay for common area maintenance (CAM), insurance, and taxes that are not included in the base rental payments, with the majority of these leases treated as net leases, and the remainder treated as gross or modified gross leases.

The lease term for real estate leases primarily ranges from one to 22 years, with a few leases that are month to month, and accounted for as short-term leases. See discussion on short-term leases below. The term of bakery equipment leases primarily ranges from less than a year up to seven years. Transportation equipment generally has terms of less than one year up to seven years.  IT equipment is typically leased from less than a year up to five years. Certain equipment (i.e., equipment subject to management contracts) and IT equipment leases have terms shorter than a year and are accounted for as short-term leases. See discussion on short-term leases below.

These contracts may contain renewal options for periods of one month up to 10 years at fixed percentages of market pricing, with some that are reasonably certain of exercise. For those contracts that contain leases, the company recognizes renewal options as part of right-of-use assets and lease liabilities. All other renewal and termination options are not reasonably certain of exercise or occurrence as of January 1, 2022.

These contracts may also contain right of first offer purchase options, along with expansion options that are not reasonably certain of exercise. Additionally, these contracts do not contain residual value guarantees, and there are no other restrictions or covenants in the contracts.

For these real estate contracts, the company’s exclusive use of specified real estate for a specific term and for consideration resulted in the company treating these contracts as leases under the new standard.

For those contracts that contain leases of buildings and land, the company has elected to not separate land components from leases of specified property, plant, and equipment, as it was determined to have no effect on lease classification for any lease component, and the amounts recognized for the land lease components would have been immaterial.

These contracts may also contain end-term purchase options, whereby, the company may purchase the assets for stated pricing at the lesser of fair market value or a percentage of original asset cost. Yet, these purchase options were determined to not be reasonably certain of exercise or occurrence as of January 1, 2022. Additionally, these contracts do not contain residual value guarantees, and there are no other restrictions or covenants in the contracts.

The company’s ability to make those decisions that most effect the economic benefits derived from the use of the equipment, accompanied by receiving substantially all outputs and utility from the use of the equipment resulted in the company accounting for these contracts as leases.

These leases are classified as operating leases under the new standard because real estate leases do not transfer ownership at the end of the lease term, assets are not of such a specialized nature that real estate would not have alternative uses to lessors at the end of the lease term, lease terms do not represent a major part of the total useful life of real estate, and the present value of lease payments do not represent substantially all the fair value of leased assets at commencement.

Short-term leases

The company has also entered into short-term leases of certain real estate assets, along with IT equipment, and various equipment used for short-term bakery needs through equipment placement or service contracts that require purchase of consumables. These leases extend for periods of one to 12 months. Lease term and amounts of payments are generally fixed. There are no purchase options present, however, there generally are renewals that could extend lease terms for additional periods. Generally, renewal options, as they cannot be unilaterally exercised, are not reasonably certain of exercise, do not contain residual value guarantees, and there are no other restrictions or covenants in the leases.

Therefore, the company recognizes lease payments from these short-term leases and variable payments on the Consolidated Statements of Income in the period in which obligation for those payments have been incurred.

Modifications and reassessments

During Fiscal 2021 and 2020, the company elected certain renewal options that were not previously certain of exercise. Election of these renewal options resulted in reassessment of lease terms for the applicable leases.

The company included the renewal periods in measurement of lease terms for the applicable leases. Given that rental payments in the renewal periods were fixed, the company also remeasured the lease payments, and reallocated remaining contract consideration to the lease components within the applicable real estate leases. Although the triggering events did not result in changes to lease classification (i.e., all remained operating leases), they did affect the measurement of lease liabilities, right-of-use assets (“ROU assets”), and amounts recognized as lease expense for the applicable real estate leases.

Other significant judgments and assumptions

For all classes of assets, the company primarily used our incremental borrowing rates (“IBR”) to perform lease classification tests and measure lease liabilities because discount rates implicit in the company’s leases were not readily determinable.

Embedded leases

The company maintains a transportation agreement with an entity that transports a portion of the company’s fresh bakery products from the company’s production facilities to outlying distribution centers. The company concluded that this agreement contained embedded leases for the trucks and trailers used to satisfy the service provider’s obligations to the company through December 31, 2020.  On December 31, 2020, a re-measurement event occurred, and a conclusion was reached that these no longer met the requirements of an embedded lease due to a change in the contractual terms to allow for the substitution of assets, among other changes to the terms.  As a result, on January 2, 2021, there were no ROU assets or liabilities associated with the transportation agreement.  The gain on the termination of these embedded leases was $4.1 million.  

During Fiscal 2020 and Fiscal 2019, the company entered into embedded leases for IT equipment that, as of January 1, 2022, were $3.0 million of financing ROU assets and financing ROU liabilities.  As of January 2, 2021, the embedded leases were $4.6 million of financing ROU assets and financing ROU liabilities.  The company did not enter into any embedded leases during Fiscal 2021.

See Note 13, Leases, for our lease quantitative disclosures.

Segments

Segment.    The company has one operating segment based on the nature of products the company sells, intertwined production and distribution model, the internal management structure and information that is regularly reviewed by the CEO, who is the chief operating decision maker, for the purpose of assessing performance and allocating resources.

Impairment of Long-Lived Held and Used Assets

Impairment of Long-Lived Held and Used Assets.    The company determines whether there has been an impairment of long-lived held and used assets when indicators of potential impairment are present. We consider historical performance and future estimated results in our evaluation of impairment. If facts and circumstances indicate that the cost of any long-lived held and used assets may be impaired, an evaluation of recoverability would be performed. If an estimate of the asset’s fair value is required in order to determine if an impairment should be recorded, the estimated future gross, undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount and if lower than the carrying value, a write-down to market value is required.

There were no restructuring and related impairment charges during Fiscal 2021.  Total impairments (inclusive of property, plant and equipment, notes receivable, spare parts, and ROU assets) for Fiscal 2020 and 2019, and the line item to which each item is recorded in our Consolidated Statements of Income, are presented below (amounts in thousands):

Restructuring and related impairment charges line item	Fiscal 2020		Fiscal 2019
Plant closings	$	5,747	$	5,133
Line and distribution depot closings		629		356
Spare parts		734		174
Lease impairment charges		9,397		—
Impairment of assets	$	16,507	$	5,663

Fiscal 2020

During Fiscal 2020, the company sold three closed bakeries included in assets held for sale and certain idle equipment at other bakeries included in property, plant, and equipment, resulting in the recognition of $5.7 million of impairment charges.  Additionally, the company recognized property, plant, and equipment impairment charges of $0.6 million for line and distribution depot closures and an office building it decided to sell, and $0.7 million for spare parts related to equipment it no longer intended to use.

Additionally, in order to optimize our distribution network, we vacated certain distribution depots during Fiscal 2020, some of which are owned and others that were leased.  

Fiscal 2019

The company recognized impairment charges during the first quarter of Fiscal 2019 related to manufacturing line closures of $0.4 million.  During the second quarter of Fiscal 2019, an impairment charge of $1.3 million was recognized for the Winston-Salem, North Carolina closed plant recorded in assets held for sale.  The company also recognized an impairment charge of $3.9 million during the third quarter of Fiscal 2019 for the Opelika, Alabama plant closure costs.

The company sold the closed plant in Winston-Salem, North Carolina during the third quarter of Fiscal 2019, at which time an additional $0.2 million of spare parts write-offs were recognized.  The company received $1.9 million and recognized a gain of $0.8 million at the time of sale.  The impairment charges and the gain recognized are recorded in the restructuring and related impairment charges line item on our Consolidated Statements of Income.  

See Note 5, Restructuring Activities, for details.

Impairment of Other Intangible Assets

Impairment of Other Intangible Assets.    The company accounts for other intangible assets at fair value. These intangible assets can be either finite or indefinite-lived depending on the facts and circumstances at acquisition.

Finite-lived intangible assets are reviewed for impairment when facts and circumstances indicate that the cost of any finite-lived intangible asset may be impaired. This recoverability test is based on an undiscounted cash flows expected to result from the company’s use and eventual disposition of the asset.  If these cash flows are sufficient to recover the carrying value over the useful life there is no impairment.  Amortization of finite-lived intangible assets occurs over their estimated useful lives. The amortization periods, at origination, range from two years to forty years for these assets. The attribution methods we primarily use are the sum-of-the-year digits for customer relationships and straight-line for other intangible assets.  These finite-lived intangible assets generally include trademarks, customer relationships, non-compete agreements, distributor relationships, and supply agreements.

Identifiable intangible assets that are determined to have an indefinite useful economic life are not amortized. Indefinite-lived intangible assets are tested for impairment, at least annually, using a one-step fair value-based approach or when certain indicators of potential impairment are present. We have elected not to perform the qualitative approach. We also reassess the indefinite-lived classification to determine if it is appropriate to reclassify these assets as finite-lived assets that will require amortization. We consider historical performance and future estimated results in our evaluation of impairment. If facts and circumstances indicate that the cost of any indefinite-lived intangible assets may be impaired, an evaluation of the fair value of the asset is compared to its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recorded for the difference.

We use the multi-period excess earnings and relief from royalty methods to value these indefinite-lived intangible assets. Fair value is estimated using the future gross, discounted cash flows associated with the asset using the following five material assumptions: (a) discount rate; (b) long-term sales growth rates; (c) forecasted operating margins (not applicable to the relief from royalty method), (d) assumed royalty rate; and (e) market multiples. The method used for impairment testing purposes is consistent with the valuation method employed at acquisition of the intangible asset. These indefinite-lived intangible assets are trademarks acquired in a purchase business combination.

In order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of 2020.  In the fourth quarter of Fiscal 2020, an additional $1.3 million impairment charge was recognized at the time the company decided to cease using one of its regional brands.  These costs are recorded in the restructuring and related impairment charges line item on our Consolidated Statements of Income.

During Fiscal 2019, the company recorded impairment charges of $15.4 million for trademarks impacted by a brand rationalization study which resulted in changing our focus in certain markets from regional brands to national brands to maximize our marketing and advertising campaigns.  See Note 5, Restructuring Activities, for details on these impairments.  Impairments relating to restructuring charges are recorded in the restructuring and related impairment charges line item in our Consolidated Statements of Income.  

The company evaluates useful lives for finite-lived intangible assets to determine if facts or circumstances arise that may impact the estimates of useful lives assigned and the remaining amortization duration.  Indefinite-lived intangible assets that are determined to have a finite useful life are tested for impairment as an indefinite-lived intangible asset prior to commencing amortization.  We determined that an indefinite-lived asset should be reclassified to finite-lived with an attribution period covering our estimate of the assets’ useful life.  These intangible assets were assigned a useful life ranging from 5 years to 40 years.

Future adverse changes in market conditions or poor operating results of underlying intangible assets could result in losses or an inability to recover the carrying value of the intangible assets that may not be reflected in the assets’ current carrying values, thereby possibly requiring an impairment charge in the future.  See Note 9, Goodwill and Other Intangible Assets, for additional disclosure.

Goodwill

Goodwill.    The company accounts for goodwill in a purchase business combination as the excess of the cost over the fair value of net assets acquired. The company tests goodwill for impairment on an annual basis (or an interim basis if a triggering event occurs that indicates the fair value of our single reporting unit may be below its carrying value) using a one-step method. We have elected not to perform the qualitative approach. The company conducts this review during the fourth quarter of each Fiscal year absent any triggering events. We use the following four material assumptions in our fair value analysis: (a) weighted average cost of capital; (b) long-term sales growth rates; (c) forecasted operating margins; and (d) market multiples. No impairment resulted from the annual review performed in Fiscal 2021, 2020, or 2019. See Note 9, Goodwill and Other Intangible Assets, for additional disclosure.

Derivative Financial Instruments

Derivative Financial Instruments.    The disclosure requirements for derivatives and hedging provide investors with an enhanced understanding of: (a) how and why an entity uses derivative instruments and related hedged items, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the company’s objectives and strategies for using derivative instruments and related hedged items, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments and related hedged items, and disclosures about credit-risk-related contingent features in derivative instruments and related hedged items.

The company’s objectives in using commodity derivatives are to add stability to materials, supplies, labor, and other production costs and to manage its exposure to certain commodity price movements. To accomplish this objective, the company uses commodity futures as part of its commodity risk management strategy.  The company’s commodity risk management programs include hedging price risk for wheat, soybean oil, corn, and natural gas primarily using futures contracts.  Commodity futures designated as cash flow hedges involve fixing the price on a fixed volume of a commodity on a specified date. The commodity futures are given up to third parties near maturity to price the physical goods (e.g. flour, sweetener, corn, etc.) required as part of the company’s production.

As required, the company records all derivatives on the Consolidated Balance Sheets at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedged item with the earnings effect of the hedged forecasted transactions in a cash flow hedge.  The company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply, or the company elects not to apply hedge accounting.

For derivatives designated and that qualify as cash flow hedges of commodity price risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) (“AOCI”) and subsequently reclassified in the period during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. All our commodity derivatives at January 1, 2022 qualified for hedge accounting.  See Note 10, Derivative Financial Instruments, for additional disclosure.

The company routinely transfers amounts from AOCI to earnings as transactions for which cash flow hedges were held occur and impact earnings.  Amounts reclassified out of AOCI to net income that relate to commodity contracts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.   Significant situations which do not routinely occur that could cause transfers from AOCI to earnings are the cancellation of a forecasted transaction for which a derivative was held as a hedge or a significant and material reduction in volume used of a hedged ingredient such that the company is over hedged and must discontinue hedge accounting. During Fiscal 2021, 2020, and 2019 there were no discontinued hedge positions.

The impact to earnings is included in our materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) line item. Changes in the fair value of the asset or liability are recorded as either a current or long-term asset or liability depending on the underlying fair value. Amounts reclassified to earnings for the commodity cash flow hedges are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows. See Note 10, Derivative Financial Instruments, for additional disclosure.

Treasury Stock

Treasury Stock.    The company records acquisitions of its common stock for treasury at cost. Differences between the proceeds for reissuances of treasury stock and average cost are credited or charged to capital in excess of par value to the extent of prior credits and thereafter to retained earnings. See Note 17, Stockholders’ Equity, for additional disclosure.

Advertising and Marketing Costs

Advertising and Marketing Costs.    Advertising and marketing costs are expensed the first time the advertising takes place. Advertising and marketing costs were $77.7 million, $60.4 million, and $48.2 million for Fiscal years 2021, 2020, and 2019, respectively. Advertising and marketing costs are recorded in the selling, distribution and administrative expense line item in our Consolidated Statements of Income.

Stock-Based Compensation

Stock-Based Compensation.    Stock-based compensation expense for all share-based payment awards granted is determined based on the grant date fair value. The company recognizes compensation costs only for those shares expected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based payment award. The shares issued for exercises and at vesting of the awards are issued from treasury stock. Forfeitures are recognized as they occur.  Shares issued at vesting are recorded as reissuances of treasury stock.  See Note 18, Stock-Based Compensation, for additional disclosure.  Stock-based compensation expense is primarily included in selling, distribution and administrative expense in the Consolidated Statements of Income.

Cloud Computing Arrangements

Cloud computing arrangements (“CCA”).  If a CCA includes a software license, the arrangement is within the scope of the internal-use software guidance.  If the CCA does not include a software license (i.e. is hosted), the arrangement is a service contract and the fees for the CCA are recorded as an operating expense.  Capitalized implementation costs are amortized over the term of the associated hosted CCA service on a straight-line basis.  Amortization begins at the time any component of the hosted CCA service is ready for use.  Capitalized implementation costs are presented on the Consolidated Balance Sheets as an other asset.  Amortization charges are presented in the selling, distribution, and administrative expenses line on the Consolidated Statements of Income.

Software Development Costs

Software Development Costs.    The company expenses internal and external software development costs incurred in the preliminary project stage, and, thereafter, capitalizes costs incurred in developing or obtaining internally used software. Certain costs, such as maintenance and training, are expensed as incurred. Capitalized costs are amortized over a period of three to eight years and are subject to impairment evaluation. An impairment could be triggered if the company determines that the underlying software under review will no longer be used.  The net balance of capitalized software development costs included in plant, property and equipment was $21.1 million and $21.9 million at January 1, 2022 and January 2, 2021, respectively. Amortization expense of capitalized software development costs, which is included in depreciation and amortization expense in the Consolidated Statements of Income, was $9.9 million, $9.3 million, and $10.2 million in Fiscal 2021, 2020, and 2019, respectively.

Income Taxes

Income Taxes.    The company accounts for income taxes using the asset and liability method and recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income as a discrete item in the period that includes the enactment date.

The company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. The company has considered carryback, future taxable income, and prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event the company was to determine that it would be more likely than not able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the valuation allowance would increase income in the period such a determination was made. Likewise, should the company determine that it would not more likely than not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the valuation allowance would decrease income in the period such determination was made.

The company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation process. Interest related to unrecognized tax benefits is recorded within the interest expense line in the accompanying Consolidated Statements of Income. See Note 21, Income Taxes, for additional disclosure.

The deductions column in the table below presents the amounts reduced in the deferred tax asset valuation allowance that were recorded to, and included as part of, deferred tax expense. The additions column represents amounts that increased the allowance.

Activity in the deferred tax asset valuation allowance is as follows (amounts in thousands):

	Beginning Balance		Deductions		Additions		Ending Balance
Fiscal 2021	$	1,030	$	—	$	—	$	1,030
Fiscal 2020	$	703	$	—	$	327	$	1,030
Fiscal 2019	$	364	$	—	$	339	$	703

Self-Insurance Reserves

Self-Insurance Reserves.    The company is self-insured for various levels of general liability, auto liability, workers’ compensation, and employee medical and dental coverage. Insurance reserves are calculated based on a combination of an undiscounted basis based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends.  Projected settlements of incurred but not reported claims are estimated based on pending claims, historical trends and industry trends related to expected losses and actual reported losses, and key assumptions, including loss development factors and expected loss rates.

Loss Contingencies

Loss Contingencies.  Loss contingencies are recorded at the time it is probable an asset is impaired, or a liability has been incurred and the amount can be reasonably estimated.  For litigation claims the company considers the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the loss.  Losses are recorded in selling, distribution, and administrative expense in our Consolidated Statements of Income.

Net Income Per Common Share

Net Income Per Common Share.    Basic net income per share is computed by dividing net income by the weighted average common shares outstanding for the period. Diluted net income per share is computed by dividing net income by the weighted average common and common equivalent shares outstanding for the period. Common stock equivalents consist of the incremental shares associated with the company’s stock compensation plans, as determined under the treasury stock method. The performance contingent restricted stock awards do not contain a non-forfeitable right to dividend equivalents and are included in the computation for diluted net income per share. Fully vested shares which have a deferral period extending beyond the vesting date are included in the computation for basic net income per share.  See Note 19, Earnings Per Share, for additional disclosure.

Variable Interest Entities

Variable Interest Entities.    The incorporated IDPs are not voting interest entities since the company has no direct interest in each entity; however, they qualify as variable interest entities (“VIEs”). The IDPs who are formed as sole proprietorships are excluded from the VIE accounting analysis because sole proprietorships are not within scope for determination of VIE status.  The company typically finances the incorporated IDP and enters into a contract with the incorporated IDP to supply product at a discount for distribution in the IDP’s territory. The combination of the company’s loans to the incorporated IDP and the ongoing supply arrangements with the incorporated IDP provides a level of protection to the equity owners of the various distributorships that would not otherwise be available. However, the company is not considered to be the primary beneficiary of the VIEs.  See Note 15, Variable Interest Entities, for additional disclosure of these VIEs.  

The company also maintains a transportation agreement with an entity that transports a significant portion of the company’s fresh bakery products from the company’s production facilities to outlying distribution centers. The company represents a significant portion of the entity’s revenue. The company reconsidered its relationship with the entity because the entity was sold, and the company has concluded the entity no longer qualifies as a VIE beginning in the second quarter of Fiscal 2019.  Previously, this entity qualified as a VIE, but the company determined it was not the primary beneficiary of the VIE. See Note 15, Variable Interest Entities, for additional disclosure of these VIEs.

Postretirement Plans

Postretirement Plans.    The company records pension costs and benefit obligations related to its defined benefit plans based on actuarial valuations. These valuations reflect key assumptions determined by management, including the discount rate, expected long-term rate of return on plan assets and mortality. Material changes in pension costs and in benefit obligations may occur in the future due to experience that is different than assumed and changes in these assumptions.  See Note 20, Postretirement Plans, for additional disclosure.

Pension Plan Assets

Pension Plan Assets.    The finance committee of the Board of Directors delegated its fiduciary and other responsibilities with respect to the Company’s retirement plans’ investment strategies to the investment committee. The investment committee, which consists of certain members of management, establishes investment guidelines and strategies and regularly monitors the performance of the plans’ assets. The investment committee is responsible for executing these strategies and investing the pension assets in accordance with ERISA and fiduciary standards. The investment objective of the pension plans is to preserve the plans’ capital and maximize investment earnings within acceptable levels of risk and volatility. The investment committee meets on a regular basis with its investment advisors to review the performance of the plans’ assets. Based upon performance and other measures and recommendations from its investment advisors, the investment committee rebalances the plans’ assets to the targeted allocation when considered appropriate.

Fair Value of Financial Instruments

Fair Value of Financial Instruments.    On March 9, 2021 and September 28, 2016, the company issued $500.0 million of senior notes (the “2031 notes”) and $400.0 million of senior notes (the “2026 notes”), respectively.  On April 3, 2012, the company issued $400.0 million of senior notes (the “2022 notes”) which the company later redeemed on April 8, 2021. These notes are recorded in our financial statements at carrying value, net of debt discount and issuance costs. The debt discount and issuance costs are being amortized over the ten-year term of the note to interest expense. In addition, and for disclosure purposes, the fair value of the notes is estimated using yields obtained from independent pricing sources for similar types of borrowing arrangements and is considered a Level 2 valuation. Additional details are included in Note 16, Fair Value of Financial Instruments.

Research and Development Costs

Research and Development Costs.  The company recorded research and development costs of $5.6 million, $4.0 million, and $4.3 million for Fiscal 2021, 2020, and 2019, respectively.  These costs are recorded as selling, distribution and administrative expenses in our Consolidated Statements of Income.

Other Comprehensive Income

Other Comprehensive Income (Loss)(“OCI”).    The company reports comprehensive income in two separate but consecutive financial statements. See Note 6, Accumulated Other Comprehensive Income (Loss), for additional required disclosures.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jan. 01, 2022

Sales by Sales Channel Category

Sales by sales channel category are as follows for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Branded retail	$	2,875,418	$	2,914,072	$	2,478,669
Store branded retail		534,794		607,741		647,056
Non-retail and other		920,555		866,178		998,249
Total	$	4,330,767	$	4,387,991	$	4,123,974

Allowance for Doubtful Accounts Activity

Activity in the allowance for doubtful accounts is as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other		Ending Balance
Fiscal 2021	$	15,162	$	6,071	$	5,835	$	15,398
Fiscal 2020	$	9,473	$	11,344	$	5,655	$	15,162
Fiscal 2019	$	5,751	$	11,034	$	7,312	$	9,473

Allowance for Trade Accounts Receivable Credit Losses Activity

Activity in the allowance for trade accounts receivable credit losses for Fiscal 2021 and 2020 was as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other			Recoveries and other			Ending Balance
Fiscal 2021	$	4,901	$	596	$	(1,018	)	$	(1,927	)	$	2,552
Fiscal 2020	$	2,089	$	2,875	$	(2,319	)	$	2,256		$	4,901

Weighted Percentage of Sales from Largest Customers

Our largest customer’s, Walmart/Sam’s Club, weighted percent of sales for Fiscal 2021, 2020, and 2019 was as follows:

	Percent of Sales
Fiscal 2021		21.2	%
Fiscal 2020		21.2	%
Fiscal 2019		21.1	%

Estimated Useful Lives by Property Plant and Equipment Class

The table below presents the range of estimated useful lives by property, plant and equipment class.

	Useful life term (years)
Asset Class	Low	High
Buildings	10	40
Machinery and equipment	3	25
Furniture, fixtures and transportation equipment	3	15

Schedule of Depreciation Expense

Depreciation expense, excluding amortization of right-of-use financing leases, for Fiscal 2021, 2020, and 2019 was as follows (amounts in thousands):

	Depreciation expense
Fiscal 2021	$	103,949
Fiscal 2020	$	103,490
Fiscal 2019	$	107,891

Schedule of Total Impairments (Inclusive of Property, Plant and Equipment, Notes Receivable, Spare Parts, and ROU Assets) and Line Item Recorded in Our Consolidated Statements of Income

Total impairments (inclusive of property, plant and equipment, notes receivable, spare parts, and ROU assets) for Fiscal 2020 and 2019, and the line item to which each item is recorded in our Consolidated Statements of Income, are presented below (amounts in thousands):

Restructuring and related impairment charges line item	Fiscal 2020		Fiscal 2019
Plant closings	$	5,747	$	5,133
Line and distribution depot closings		629		356
Spare parts		734		174
Lease impairment charges		9,397		—
Impairment of assets	$	16,507	$	5,663

Inventory Valuation Reserve

Summary of Valuation Allowance

Activity in the inventory reserve allowance is as follows (amounts in thousands):

	Beginning Balance		Charged to Expense		Write-Offs and Other		Ending Balance
Fiscal 2021	$	1,920	$	16	$	1,652	$	284
Fiscal 2020	$	161	$	3,601	$	1,842	$	1,920
Fiscal 2019	$	143	$	337	$	319	$	161

Valuation Allowance of Deferred Tax Assets

Summary of Valuation Allowance

The deductions column in the table below presents the amounts reduced in the deferred tax asset valuation allowance that were recorded to, and included as part of, deferred tax expense. The additions column represents amounts that increased the allowance.

Activity in the deferred tax asset valuation allowance is as follows (amounts in thousands):

	Beginning Balance		Deductions		Additions		Ending Balance
Fiscal 2021	$	1,030	$	—	$	—	$	1,030
Fiscal 2020	$	703	$	—	$	327	$	1,030
Fiscal 2019	$	364	$	—	$	339	$	703

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Product Recall and Loss (Recovery) on Inferior Ingredients (Tables)

12 Months Ended

Jan. 01, 2022

Accounting Policies [Abstract]

Summary of Total Costs and Recoveries

The table below presents the total costs and recoveries during Fiscal 2021, 2020 and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Expense recognized	$	1,894		$	1,257		$	1,785
Recoveries recognized		(950	)		(1,150	)		(1,822	)
Total loss (recovery) on inferior ingredients	$	944		$	107		$	(37	)

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Restructuring Activities (Tables)

12 Months Ended

Jan. 01, 2022

Restructuring And Related Activities [Abstract]

Components of Costs Associated with Project Centennial

The table below presents the components of costs associated with Project Centennial in Fiscal 2020 and 2019 (amounts in thousands):

	Fiscal 2020		Fiscal 2019
Restructuring and related impairment charges:
Reorganization costs	$	—	$	253
Lease termination charges		4,077		—
Impairment charges, net of gain on sale		23,627		20,229
Employee termination benefits		7,779		3,042
Restructuring and related impairment charges (1)		35,483		23,524
Project Centennial implementation costs (2)		15,548		784
Total Project Centennial restructuring and implementation costs	$	51,031	$	24,308

(1) Presented on our Consolidated Statements of Income.

(2) Represents non-restructuring costs and are recorded in the selling, distribution, and administrative expenses line item of our Consolidated Statements of Income.

Schedule of Restructuring Impairment Charges Recognized By Type of Cost

The table below details the restructuring impairments (inclusive of property, plant and equipment, ingredient and packaging, and spare parts and intangible assets) that were recognized during Fiscal 2020 and 2019 (amounts in thousands):

	Fiscal 2020		Fiscal 2019
Plant closure costs	$	5,747	$	5,133
Line and distribution depot closure costs		629		356
Spare parts		734		174
Brand rationalization study impairments		7,120		15,399
Lease impairment charges		9,397		—
Gain on sale		—		(833	)
Total restructuring impairment of assets	$	23,627	$	20,229

Components of, and Changes in Restructuring Accruals

The table below presents the components of, and changes in, our restructuring accruals (amounts in thousands):

	VSIP			RIF			Employee termination benefits(1)			Reorganization costs(2)			Distribution Network Optimization			Total
Liability balance at December 29, 2018	$	174		$	—		$	227		$	—		$	—		$	401
Charges		—			—			3,042			253			—			3,295
Cash payments		—			—			(1,819	)		(253	)		—			(2,072	)
Liability balance (3) at December 28, 2019	$	174		$	—		$	1,450		$	—		$	—		$	1,624
Charges		2,639			5,289			(149	)		—			4,077			11,856
Cash payments		(1,777	)		(4,817	)		(1,301	)		—			(4,077	)		(11,972	)
Liability balance (3) at January 2, 2021	$	1,036		$	472		$	—		$	—		$	—		$	1,508
Charges		—			—			—			—			—			—
Cash payments		(1,036	)		(472	)		—			—			—			(1,508	)
Liability balance (3) at January 1, 2022	$	—		$	—		$	—		$	—		$	—		$	—

(1) Employee termination benefits not related to the VSIP.

(2) Reorganization costs include employee relocation expenses.

(3) Recorded in the other accrued current liabilities line item of our Consolidated Balance Sheets.

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Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Jan. 01, 2022

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Summary of Reclassifications Out of AOCI

During Fiscal 2021, 2020, and 2019, reclassifications out of AOCI were as follows (amounts in thousands):

	Amount Reclassified from AOCI									Affected Line Item in the Statement
Details about AOCI Components (Note 2)	Fiscal 2021			Fiscal 2020			Fiscal 2019			Where Net Income is Presented
Derivative instruments:
Interest rate contracts	$	126		$	(145	)	$	(142	)	Interest expense
Commodity contracts		2,115			(2,675	)		3,707		Cost of sales, Note 3, below
Total before tax	$	2,241		$	(2,820	)	$	3,565		Total before tax
Tax (expense) benefit		(560	)		704			(901	)	Tax expense
Total net of tax	$	1,681		$	(2,116	)	$	2,664		Net of tax
Pension and postretirement plans:
Prior-service credits	$	(55	)	$	(111	)	$	(346	)	Note 1, below
Settlement loss		(403	)		(108,757	)		—		Note 1, below
Actuarial losses		(532	)		(1,447	)		(6,822	)	Note 1, below
Total before tax	$	(990	)	$	(110,315	)	$	(7,168	)	Total before tax
Tax benefit		247			27,873			1,810		Tax benefit
Total net of tax	$	(743	)	$	(82,442	)	$	(5,358	)	Net of tax benefit
Total reclassifications from AOCI	$	938		$	(84,558	)	$	(2,694	)	Net of tax benefit

Note 1: These items are included in the computation of net periodic pension cost. See Note 20, Postretirement Plans, for additional information.

Note 2: Amounts in parentheses indicate debits to determine net income.

Note 3: Amounts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.

Summary of AOCI Exclusive of Reclassification

During Fiscal 2021, 2020, and 2019, amounts recognized in AOCI, exclusive of reclassifications, were as follows (amounts in thousands):

	Amount of Gain (Loss) Recognized in AOCI
AOCI component	Fiscal 2021			Fiscal 2020			Fiscal 2019
Derivative instruments:
Interest rate contracts	$	3,902			—			—
Commodity contracts		(11,030	)	$	12,395		$	11,313
Total before tax	$	(7,128	)	$	12,395		$	11,313
Tax benefit (expense)		1,780			(3,097	)		(2,856	)
Total net of tax	$	(5,348	)	$	9,298		$	8,457
Pension and postretirement plans:
Current year actuarial loss (gain)	$	1,050		$	24,872		$	(10,702	)
Current year prior service credit		2,214			—			—
Total before tax	$	3,264		$	24,872		$	(10,702	)
Tax (expense) benefit		(815	)		(6,284	)		2,702
Total net of tax	$	2,449		$	18,588		$	(8,000	)
Total recognized in AOCI	$	(2,899	)	$	27,886		$	457

During Fiscal 2021, changes to AOCI, net of income tax, by component were as follows (amounts in thousands):

	Cash Flow Hedge Items			Defined Benefit Pension Plan Items			Total
AOCI at January 2, 2021	$	13,072		$	(6,648	)	$	6,424
Other comprehensive gain before reclassifications		(5,348	)		2,449			(2,899	)
Reclassified to earnings from AOCI		(1,681	)		743			(938	)
AOCI at January 1, 2022	$	6,043		$	(3,456	)	$	2,587

During Fiscal 2020, changes to AOCI, net of income tax, by component were as follows (amounts in thousands):

	Cash Flow Hedge Items		Defined Benefit Pension Plan Items			Total
AOCI at December 28, 2019	$	1,658	$	(107,678	)	$	(106,020	)
Other comprehensive loss (gain) before reclassifications		9,298		18,588			27,886
Reclassified to earnings from AOCI		2,116		82,442			84,558
AOCI at January 2, 2021	$	13,072	$	(6,648	)	$	6,424

Loss Reclassified From AOCI for Commodity Contracts

The following table presents the net of tax amount of the loss reclassified from AOCI for our commodity contracts (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Gross gain (loss) reclassified from AOCI into income	$	2,115		$	(2,675	)	$	3,707
Tax (expense) benefit		(529	)		668			(936	)
Net of tax	$	1,586		$	(2,007	)	$	2,771

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Notes Receivable from IDPs (Tables)

12 Months Ended

Jan. 01, 2022

Receivables [Abstract]

Interest Income Related to Notes Receivable

During Fiscal 2021, 2020, and 2019 the following amounts were recorded as interest income, the majority of which relates to these notes receivable (amounts in thousands):

	Interest income
Fiscal 2021	$	23,533
Fiscal 2020	$	26,696
Fiscal 2019	$	27,750

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Assets Held for Sale (Tables)

12 Months Ended

Jan. 01, 2022

Property Plant And Equipment Assets Held For Sale Disclosure [Abstract]

Assets Held for Sale

The table below presents the assets held for sale as of January 1, 2022 and January 2, 2021, respectively (amounts in thousands):

	January 1, 2022		January 2, 2021
Distribution rights	$	5,147	$	3,707
Property, plant and equipment		6,222		1,934
Total assets held for sale	$	11,369	$	5,641

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Jan. 01, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Goodwill and Other Intangible Assets

The table below summarizes our goodwill and other intangible assets at January 1, 2022 and January 2, 2021, respectively, each of which is explained in additional detail below (amounts in thousands):

	January 1, 2022		January 2, 2021
Goodwill	$	545,244	$	545,244
Amortizable intangible assets, net of amortization		568,332		587,818
Indefinite-lived intangible assets		127,100		127,100
Total goodwill and other intangible assets	$	1,240,676	$	1,260,162

Amortizable Intangible Assets

As of January 1, 2022 and January 2, 2021, the company had the following amounts related to amortizable intangible assets (amounts in thousands):

	January 1, 2022						January 2, 2021
Asset	Cost		Accumulated Amortization		Net Value		Cost		Accumulated Amortization		Net Value
Trademarks	$	477,115	$	78,124	$	398,991	$	466,915	$	64,426	$	402,489
Customer relationships		318,021		151,496		166,525		318,021		135,068		182,953
Non-compete agreements		5,154		5,074		80		5,154		5,034		120
Distributor relationships		4,123		3,398		725		4,123		3,123		1,000
Distributor routes held and used		2,548		537		2,011		1,377		121		1,256
Total	$	806,961	$	238,629	$	568,332	$	795,590	$	207,772	$	587,818

Amortization Expense

Amortization expense

Amortization expense for Fiscal 2021, 2020, and 2019 was as follows (amounts in thousands):

	Amortization expense
Fiscal 2021	$	30,857
Fiscal 2020	$	30,704
Fiscal 2019	$	29,323

Estimated Amortization of Intangibles

Estimated amortization of intangibles for Fiscal 2022 and the next four years thereafter is as follows (amounts in thousands):

Fiscal year	Amortization of Intangibles
2022	$	31,535
2023	$	30,654
2024	$	29,959
2025	$	29,247
2026	$	27,173

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Derivative Financial Instruments (Tables)

12 Months Ended

Jan. 01, 2022

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Net Fair Value of Commodity Price Risk

As of January 1, 2022, the company’s commodity hedge portfolio contained derivatives which are recorded in the following accounts with fair values measured as indicated (amounts in thousands):

	Level 1			Level 2		Level 3		Total
Assets:
Other current assets	$	3,955		$	—	$	—	$	3,955
Other long-term assets		—			—		—		—
Total	$	3,955		$	—	$	—	$	3,955
Liabilities:
Other current liabilities	$	(220	)	$	—	$	—	$	(220	)
Other long-term liabilities		—			—		—		—
Total	$	(220	)	$	—	$	—	$	(220	)
Net Fair Value	$	3,735		$	—	$	—	$	3,735

As of January 2, 2021, the company’s commodity hedge portfolio contained derivatives which are recorded in the following accounts with fair values measured as indicated (amounts in thousands):

	Level 1			Level 2		Level 3		Total
Assets:
Other current assets	$	16,684		$	—	$	—	$	16,684
Other long-term assets		731			—		—		731
Total	$	17,415		$	—	$	—	$	17,415
Liabilities:
Other current liabilities	$	(5	)	$	—	$	—	$	(5	)
Other long-term liabilities		(83	)		—		—		(83	)
Total		(88	)		—		—		(88	)
Net Fair Value	$	17,327		$	—	$	—	$	17,327

Derivative Instruments Recorded on Consolidated Balance Sheet

The company had the following derivative instruments recorded on the Consolidated Balance Sheets, all of which are utilized for the risk management purposes detailed above (amounts in thousands):

	Derivative Assets
	January 1, 2022			January 2, 2021
Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current assets	$	3,955	Other current assets	$	16,684
Commodity contracts	Other long-term assets		—	Other long-term assets		731
Total		$	3,955		$	17,415

	Derivative Liabilities
	January 1, 2022			January 2, 2021
Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current liabilities	$	220	Other current liabilities	$	5
Commodity contracts	Other long-term liabilities		—	Other long-term liabilities		83
Total		$	220		$	88

Effect of Derivative Instruments for Deferred Gains And (Losses) on Closed Contracts and Effective Portion in Fair Value on AOCI, Utilized for Risk Management Purposes (Detail)

The company had the following derivative instruments for deferred gains and (losses) on closed contracts and the effective portion for changes in fair value recorded in AOCI (no amounts were excluded from the effectiveness test), all of which are utilized for the risk management purposes detailed above (amounts in thousands and net of tax):

	Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) (Net of tax)
Derivatives in Cash Flow Hedging Relationships	Fiscal 2021			Fiscal 2020		Fiscal 2019
Interest rate contracts	$	2,926		$	—	$	—
Commodity contracts	$	(8,274	)	$	9,298	$	8,457
Total	$	(5,348	)	$	9,298	$	8,457

	Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)(Net of tax)								Location of Gain or (Loss) Reclassified from AOCI into Income
Derivatives in Cash Flow Hedging Relationships	Fiscal 2021		Fiscal 2020			Fiscal 2019			(Effective Portion)
Interest rate contracts	$	95	$	(109	)	$	(107	)	Interest income (expense)
Commodity contracts		1,586		(2,007	)		2,771		Production costs (1)
Total	$	1,681	$	(2,116	)	$	2,664

1. Included in Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately).

Accumulated Other Comprehensive Loss (Income) Related to Derivative Transactions

The balance (credit or (debit) balance) in AOCI related to commodity price risk and interest rate risk derivative transactions that are closed or will expire over the next three years are as follows (amounts in thousands and net of tax) at January 1, 2022:

	Commodity Price Risk Derivatives		Interest Rate Risk Derivatives		Totals
Closed contracts	$	179	$	3,063	$	3,242
Expiring in 2022		2,801		—		2,801
Total	$	2,980	$	3,063	$	6,043

Financial Contracts Hedging Commodity Risks

As of January 1, 2022, the company had entered into the following financial contracts to hedge commodity risks (amounts in thousands):

Derivatives in Cash Flow Hedging Relationships	Notional amount
Wheat contracts	$	32,731
Soybean oil contracts		7,088
Natural gas contracts		3,663
Corn contracts		342
Total	$	43,824

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Other Current and Non-Current Assets (Tables)

12 Months Ended

Jan. 01, 2022

Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]

Components of Other Current Assets

Other current assets consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Prepaid assets	$	12,576	$	8,140
Service contracts		19,884		7,911
Fair value of derivative instruments		3,955		16,684
Collateral to counterparties for derivative positions		2,039		1,229
Income taxes receivable		13,001		2,211
Other		137		1,214
Total	$	51,592	$	37,389

Components of Other Non-Current Assets

Other non-current assets consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Unamortized financing fees	$	1,574	$	836
Investments		3,145		3,242
Fair value of derivative instruments		—		731
Deposits		2,202		2,092
Unamortized cloud computing arrangement costs		1,215		2,059
Noncurrent pension asset		1,281		—
Other		206		121
Total	$	9,623	$	9,081

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Other Accrued Liabilities and Other Long-Term Liabilities (Tables)

12 Months Ended

Jan. 01, 2022

Other Liabilities Disclosure [Abstract]

Components of Other Accrued Liabilities

Other accrued liabilities consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Employee compensation	$	25,505	$	28,826
VSIP and RIF liabilities		—		1,508
Employee vacation		15,782		16,216
Employee bonus		33,413		57,394
Fair value of derivative instruments		220		5
Self-insurance reserves		29,828		29,367
Bank overdraft		17,161		16,900
Accrued interest		7,202		8,241
Accrued taxes		23,911		22,773
Accrued legal costs		1,746		1,644
Accrued advertising		4,294		3,610
Accrued legal settlements		16,500		11,869
Accrued short term deferred income		4,040		4,760
Accrued utilities		6,741		6,070
Acquisition consideration adjustment		3,400		—
Collateral from counterparties for derivative positions		3,377		13,997
Multi-employer pension plan withdrawal liability		2,100		—
Repurchase obligations of distribution rights		4,743		—
Other		3,480		3,099
Total	$	203,443	$	226,279

Components of Other Long Term Liabilities

Other long-term liabilities consist of (amounts in thousands):

	January 1, 2022		January 2, 2021
Deferred income	$	15,676	$	19,153
Deferred compensation		20,188		16,674
Fair value of derivative instruments		—		83
Other deferred credits		720		1,502
Deferred payroll taxes under the CARES Act		—		14,992
Other		1,375		1,255
Total	$	37,959	$	53,659

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Leases (Tables)

12 Months Ended

Jan. 01, 2022

Leases [Abstract]

Lease Costs Incurred By Lease Type, and/or Type Of Payment

Lease costs incurred by lease type, and/or type of payment for Fiscal 2021, 2020 and 2019 were as follows (in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Lease cost:
Amortization of right-of-use assets	$	1,751	$	7,190	$	7,014
Interest on lease liabilities		154		846		994
Operating lease cost		68,927		69,926		69,525
Short-term lease cost		3,075		3,058		2,630
Variable lease cost		27,120		24,815		26,359
Total lease cost	$	101,027	$	105,835	$	106,522

Other Supplemental Quantitative Disclosures

Other supplemental quantitative disclosures as of, and for, Fiscal 2021 and Fiscal 2020 were as follows (in thousands):

	Fiscal 2021		Fiscal 2020
Cash paid for amounts included in the measurement    of lease liabilities:
Operating cash flows from financing leases	$	154	$	846
Operating cash flows from operating leases	$	68,802	$	74,226
Financing cash flows from financing leases	$	1,745	$	6,715
Right-of-use assets obtained in exchange for new    financing lease liabilities	$	37	$	79
Right-of-use assets obtained in exchange for new    operating lease liabilities	$	55,869	$	16,022
Weighted-average remaining lease term (years):
Financing leases		2.1		3.1
Operating leases		8.3		9.4
Weighted-average IBR (percentage):
Financing leases		3.5		3.5
Operating leases		3.8		4.1

Estimated Undiscounted Future Lease Payments Under Non-Cancelable Operating Leases and Financing Leases with Reconciliation of Undiscounted Cash Flows

Estimated undiscounted future lease payments under non-cancelable operating leases and financing leases, along with a reconciliation of the undiscounted cash flows to operating and financing lease liabilities, respectively, as of January 1, 2022 (in thousands) were as follows:

	Operating lease liabilities			Financing lease liabilities
2022	$	56,925		$	1,691
2023		53,900			1,828
2024		45,269			101
2025		42,386			—
2026		28,591			—
Thereafter		127,734			—
Total minimum lease payments		354,805			3,620
Less: amount of lease payments representing interest		(57,777	)		(126	)
Present value of future minimum lease payments		297,028			3,494
Less: current obligations under leases		(46,390	)		(1,584	)
Long-term lease obligations	$	250,638		$	1,910

Lease Modifications and Renewals and Lease Impairments

The following table details lease modifications and renewals and lease impairments (amounts in thousands):

	Fiscal 2021		Fiscal 2020
Lease modifications and renewals	$	46,790	$	13,818
Lease impairments		—	$	11,400
Lease terminations	$	41,610	$	14,817

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Debt and Other Commitments (Tables)

12 Months Ended

Jan. 01, 2022

Long-Term Debt and Capital Leases

Long-term debt, including capital lease obligations, consisted of the following at January 1, 2022 and January 2, 2021:

	Interest Rate at January 1, 2022	Final Maturity	January 1, 2022		January 2, 2021
			(Amounts in thousands)
Unsecured credit facility	1.02%	2026	$	—	$	50,000
2031 notes	2.40%	2031		493,333		—
2026 notes	3.50%	2026		397,276		396,705
2022 notes	4.38%	2022		—		399,398
Accounts receivable securitization facility	1.00%	2023		—		114,000
				890,609		960,103
Current maturities of long-term debt				—		—
Long-term debt			$	890,609	$	960,103

Aggregate Maturities of Debt Outstanding

Aggregate maturities of debt outstanding as of January 1, 2022, are as follows (excluding unamortized debt discount and issuance costs) (amounts in thousands):

2022	$	—
2023		—
2024		—
2025		—
2026		400,000
Thereafter		500,000
Total	$	900,000

Reconciliation of Debt Issuance Costs and Debt Discounts to the Net Carrying Value for Each Debt Obligation (Excluding Line of Credit Arrangements)

The table below reconciles the debt issuance costs and debt discounts to the net carrying value of each of our debt obligations (excluding line-of-credit arrangements) at January 1, 2022 (amounts in thousands):

	Face Value		Debt issuance costs and debt discount		Net carrying value
2031 notes	$	500,000	$	6,667	$	493,333
2026 notes		400,000		2,724		397,276
Total	$	900,000	$	9,391	$	890,609

The table below reconciles the debt issuance costs and debt discounts to the net carrying value of each of our debt obligations (excluding line-of-credit arrangements) at January 2, 2021 (amounts in thousands):

	Face Value		Debt issuance costs and debt discount		Net carrying value
2026 notes	$	400,000	$	3,295	$	396,705
2022 notes		400,000		602		399,398
Total	$	800,000	$	3,897	$	796,103

Schedule of Deferred Compensation Amount Outstanding

The amounts outstanding at January 1, 2022 and January 2, 2021 were as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Deferral elections outstanding	$	21,319		$	18,308
Current portion of deferral elections		(1,131	)		(1,634	)
Long-term portion of deferral elections	$	20,188		$	16,674

Accounts Receivable Securitization Facility

Schedule of Borrowings and Repayments Under Credit Facility

The table below presents the borrowings and repayments under the AR facility during Fiscal 2021:

	Amount (thousands)
Balance as of January 2, 2021	$	114,000
Borrowings		—
Payments		(114,000	)
Balance as of January 1, 2022	$	—

Schedule of Net Amount Available Under Credit Facility

The table below presents the net amount available for working capital and general corporate purposes under the AR facility as of January 1, 2022:

	Amount (thousands)
Gross amount available	$	194,500
Outstanding		—
Available for withdrawal	$	194,500

Schedule of Highest and Lowest Outstanding Balance Under Credit Facility

The table below presents the highest and lowest outstanding balance under the AR facility during Fiscal 2021:

	Amount (thousands)
High balance	$	114,000
Low balance	$	—

Unsecured Credit Facility

Schedule of Borrowings and Repayments Under Credit Facility

The table below presents the borrowings and repayments under the credit facility during Fiscal 2021:

	Amount (thousands)
Balance as of January 2, 2021	$	50,000
Borrowings		10,000
Payments		(60,000	)
Balance as of January 1, 2022	$	—

Schedule of Net Amount Available Under Credit Facility

The table below presents the net amount available under the credit facility as of January 1, 2022:  

	Amount (thousands)
Gross amount available	$	500,000
Outstanding		—
Letters of credit		(8,400	)
Available for withdrawal	$	491,600

Schedule of Highest and Lowest Outstanding Balance Under Credit Facility

The table below presents the highest and lowest outstanding balance under the credit facility during Fiscal 2021:

	Amount (thousands)
High balance	$	50,000
Low balance	$	—

2031 Notes

Schedule of debt discount, underwriting fees and the legal and other fees

The table below presents the debt discount, underwriting fees and other fees for issuing the 2031 notes (amounts in thousands):

Total fees for 2031 notes	Amount at Issuance
Debt discount	$	2,430
Underwriting, legal, and other fees		4,829
Total fees	$	7,259

2026 Notes

Schedule of debt discount, underwriting fees and the legal and other fees

The table below presents the debt discount, underwriting fees and the legal and other fees for issuing the 2026 notes (amounts in thousands):

Total fees for 2026 notes	Amount at Issuance
Debt discount	$	2,108
Underwriting, legal, and other fees		3,634
Total fees	$	5,742

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Jan. 01, 2022

Fair Value Disclosures [Abstract]

Carrying Value of Distribution Rights Notes Receivable

At January 1, 2022 and January 2, 2021, respectively, the carrying value of the distribution rights notes receivable was as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Distribution rights notes receivable	$	183,403		$	204,839
Current portion recorded in accounts and    notes receivable, net		(29,093	)		(28,427	)
Long-term portion of distribution rights    notes receivable	$	154,310		$	176,412

Schedule of Fair Value of Notes

The fair value of the notes are presented in the table below (amounts in thousands, except level classification):

	Carrying Value		Fair Value		Level
2031 notes	$	493,333	$	494,200	2
2026 notes	$	397,276	$	429,216	2

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Stockholders' Equity (Tables)

12 Months Ended

Jan. 01, 2022

Equity [Abstract]

Shares Repurchased Under Stock Repurchase Plan

The table below presents the shares repurchased under the Stock Repurchase Plan during our Fiscal 2021 (amounts in thousands except shares purchased):

Fiscal 2021 Quarter	Total Number of Shares Purchased		Total Cost of Shares Purchased
For the quarter ended April 24, 2021		46,618	$	1,058
For the quarter ended July 17, 2021		—	$	—
For the quarter ended October 9, 2021		360,222	$	8,452
For the quarter ended January 1, 2022		—	$	—
Total		406,840	$	9,510

Summary of Dividends Excluding Dividends on Vested Stock-Based Compensation Awards

During Fiscal 2021, 2020, and 2019, the company paid the following dividends, excluding dividends on vested stock-based compensation awards discussed in Note 18, Stock-Based Compensation, below (amounts in thousands except per share data):

	Dividends paid		Dividends paid per share
Fiscal 2021	$	175,669	$	0.8300
Fiscal 2020	$	167,161	$	0.7900
Fiscal 2019	$	158,626	$	0.7500

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Stock-Based Compensation (Tables)

12 Months Ended

Jan. 01, 2022

Payout Determined from Total Shareholder Return Shares

The Company TSR compared to the Peer Group TSR will determine the payout as set forth below (the “TSR Modifier”):

Percentile	Payout as % of Target
90th		200	%
70th		150	%
50th		100	%
30th		50	%
Below 30th		0	%

Performance-Contingent Restricted Stock Awards

The table below presents the TSR Modifier share adjustment, ROIC Modifier share adjustment, accumulated dividends on vested shares, and the tax windfall/shortfall at vesting of the performance-contingent restricted stock awards (amounts in thousands except for share data):

Award granted	Fiscal year vested	TSR Modifier increase shares		ROIC Modifier (decrease) shares			Dividends at vesting (thousands)		Tax benefit		Fair value at vesting
2017	2019		205,686		(97,131	)	$	1,219	$	936	$	18,570

Performance-Contingent Restricted Stock Activity

A summary of the status of all of the company’s nonvested shares for performance-contingent restricted stock (including the TSR Shares and the ROIC Shares) for Fiscal 2021, 2020, and 2019 is set forth below (amounts in thousands, except price data):

	Fiscal 2021					Fiscal 2020					Fiscal 2019
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Balance at beginning of year		1,264		$	21.85		662		$	20.16		779		$	21.64
Initial grant		766		$	24.66		693		$	23.37		917		$	20.10
Vested		—		$	—		—		$	—		(885	)	$	22.21
Grant reduction for not achieving the ROIC modifier		—		$	—		—		$	—		(97	)	$	19.97
Grant increase (reduction) for not achieving the TSR    modifier		—		$	—		—		$	—		206		$	23.31
Forfeitures		(58	)	$	23.27		(91	)	$	21.26		(258	)	$	20.18
Balance at end of year		1,972		$	22.89		1,264		$	21.85		662		$	20.16

Time-Based Restricted Stock Units Awards

The following TBRSU Shares have been granted under the Omnibus Plan and have service periods remaining (amounts in thousands, except price data):

Grant Date	Shares Granted		Vesting Date	Fair Value per Share
12/30/2018		244	Equally over 3 years	$	18.29
5/23/2019		43	5/23/2023	$	23.08
12/29/2019		220	Equally over 3 years	$	21.74
1/03/2021		256	Equally over 3 years	$	22.63
10/10/2021		6	Equally over 3 years	$	24.79

Time-Based Restricted Stock Units Activity

The TBRSU Shares activity for Fiscal 2021, 2020 and Fiscal 2019 is set forth below (amounts in thousands, except price data):  

	Fiscal 2021					Fiscal 2020					Fiscal 2019
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Nonvested shares at beginning of year		387		$	20.64		270		$	19.06		—		$	—
Granted		262		$	22.68		220		$	21.74		288		$	19.01
Vested		(137	)	$	19.98		(74	)	$	18.29
Forfeitures		(20	)	$	21.56		(29	)	$	20.14		(18	)	$	18.29
Nonvested shares at end of year		492		$	21.87		387		$	20.64		270		$	19.06

Deferred and Restricted Stock Activity

The deferred and restricted stock activity for Fiscal 2021, 2020, and 2019 is set forth below (amounts in thousands, except price data):

	Fiscal 2021					Fiscal 2020					Fiscal 2019
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Nonvested shares at beginning of year		52		$	23.21		49		$	22.31		66		$	19.93
Granted		69		$	23.96		54		$	23.15		49		$	22.31
Vested		(54	)	$	23.19		(51	)	$	22.28		(66	)	$	19.93
Nonvested shares at end of year		67		$	24.00		52		$	23.21		49		$	22.31
Vested and deferred shares at end of year (1)		206					198					197

(1) The vested and deferred shares at the end of the year include 89,949 shares granted and deferred under the EPIP for Fiscal 2021, 2020 and 2019.

Summary of Company's Stock Based Compensation Expense

The following table summarizes the company’s stock-based compensation expense, all of which was recognized in selling, distribution, and administrative expense, for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Performance-contingent restricted stock awards	$	15,061	$	8,656	$	4,767
TBRSU shares		4,747		3,039		1,520
Deferred stock awards		1,535		1,160		1,143
Total stock-based compensation expense	$	21,343	$	12,855	$	7,430

Performance-Contingent Total Shareholder Return Shares

Performance Contingent TSR Shares, ROIC Shares and Restricted Stock Awards

The following performance-contingent TSR Shares have been granted under the Omnibus Plan and have service period remaining (amounts in thousands, except price data):

Grant Date	Shares Granted		Vesting Date	Fair Value per Share
12/30/2018		440	3/1/2022	$	21.58
5/23/2019		11	3/1/2022	$	27.23
7/14/2019		5	3/1/2022	$	23.32
10/6/2019		2	3/1/2022	$	22.52
12/29/2019		331	2/28/2023	$	25.00
4/19/2020		8	2/28/2023	$	23.14
07/12/2020		2	2/28/2023	$	21.97
10/4/2020		5	2/28/2023	$	24.63
01/03/2021		365	3/1/2024	$	26.75
10/10/2021		18	3/1/2024	$	24.47

Return On Invested Capital

Performance Contingent TSR Shares, ROIC Shares and Restricted Stock Awards

The following performance-contingent ROIC Shares have been granted under the Omnibus Plan and have service period remaining (amounts in thousands, except price data):

Grant Date	Shares Granted		Vesting Date	Fair Value per Share
12/30/2018		440	3/1/2022	$	18.29
5/23/2019		11	3/1/2022	$	23.08
7/14/2019		5	3/1/2022	$	23.32
10/6/2019		2	3/1/2022	$	22.52
12/29/2019		331	2/28/2023	$	21.74
4/19/2020		8	2/28/2023	$	23.14
07/12/2020		2	2/28/2023	$	21.97
10/4/2020		5	2/28/2023	$	24.63
01/03/2021		365	3/1/2024	$	22.63
10/10/2021		18	3/1/2024	$	24.47

Total Shareholders Return

Payout Percentage of Total Shareholder Return Shares

The table below presents the payout percentage for each of the TSR awards:

Award	Fiscal year vested	Payout (%)
2017 award	Fiscal 2019	153.0

Performance Contingent Return On Invested Capital Shares

Payout Percentage of Total Shareholder Return Shares

The table below presents the payout percentage for each of the ROIC awards:

Award	Fiscal year vested	Payout (%)
2017 award	Fiscal 2019		75

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Earnings Per Share (Tables)

12 Months Ended

Jan. 01, 2022

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Common Share

The following is a reconciliation of net income and weighted average shares for calculating basic and diluted earnings per common share for Fiscal 2021, 2020, and 2019 (amounts in thousands, except per share data):

	Fiscal 2021		Fiscal 2020		Fiscal 2019
Net income	$	206,187	$	152,318	$	164,538
Basic Earnings Per Common Share:
Basic weighted average shares outstanding per common share		211,840		211,782		211,606
Basic earnings per common share	$	0.97	$	0.72	$	0.78
Diluted Earnings Per Common Share:
Basic weighted average shares outstanding per common share		211,840		211,782		211,606
Add: Shares of common stock assumed issued upon exercise of stock    options, vesting of performance-contingent restricted stock    and deferred stock		1,193		563		368
Diluted weighted average shares outstanding per common share		213,033		212,345		211,974
Diluted earnings per common share	$	0.97	$	0.72	$	0.78

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Postretirement Plans (Tables)

12 Months Ended

Jan. 01, 2022

Summary of Company's Balance Sheet Related Pension and Other Postretirement Benefit Plan

The following summarizes the company’s balance sheet related pension and other postretirement benefit plan accounts at January 1, 2022 and January 2, 2021 (amounts in thousands):

	January 1, 2022			January 2, 2021
Noncurrent benefit asset	$	1,281		$	—
Current benefit liability	$	804		$	874
Noncurrent benefit liability	$	7,249		$	10,049
AOCI, net of tax	$	(3,456	)	$	(6,648	)

Fair Value of Plan Assets by Asset Class

The fair values of all of the company pension plan assets at December 31, 2021 and December 31, 2020, by asset class are as follows (amounts in thousands):

	Fair value of Pension Plan Assets as of December 31, 2021
Asset Class	Quoted prices in active markets for identical assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Short term investments and cash	$	453	$	—	$	—	$	453
Common stocks:
International common stocks		4,708		—		—		4,708
U.S. common stocks		8,177		—		—		8,177
Fixed income securities:
U.S. government bonds		13,514		—		—		13,514
U.S. government agency bonds		—		—		—		—
U.S. corporate bonds		6,737		—		—		6,737
Pending transactions(*)		—		—		—		—
Accrued (expenses) income(*)		—		—		—		—
Total	$	33,589	$	—	$	—	$	33,589

	Fair value of Pension Plan Assets as of December 31, 2020
Asset Class	Quoted prices in active markets for identical assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Short term investments and cash	$	546	$	—	$	—	$	546
Common stocks:
International common stocks		5,223		—		—		5,223
U.S. common stocks		8,587		—		—		8,587
Fixed income securities:
U.S. government bonds		14,577		—		—		14,577
U.S. government agency bonds		—		—		—		—
U.S. corporate bonds		5,877		—		—		5,877
International corporate bonds		—		—		—		—
Pending transactions(*)		—		—		—		—
Other assets and (liabilities)(*)		—		—		—		(35	)
Accrued (expenses) income(*)		—		—		—		(25	)
Total	$	34,810	$	—	$	—	$	34,750

(*) This class includes accrued interest, dividends, and amounts receivable from asset sales and amounts payable for asset purchases.   

Plan Asset and Target Allocation

The plan asset allocation as of the measurement dates December 31, 2021 and December 31, 2020, and target asset allocations for Fiscal 2022 are as follows for Plan No. 2:

	Target Allocation	Percentage of Plan Assets at the Measurement Date (As percent)
Asset Category	2022	2021		2020
Equity securities	0-80%		38.0		40.0
Fixed income securities	20-100%		60.0		59.0
Short term investments and cash	0-10%		2.0		1.0
Total			100.0		100.0

Multi Employer Plans

				Pension Protection Act			Contributions (Amounts in
				Zone Status			thousands)							Expiration Date of
		Pension				FIP/RP Status	2021		2020		2019		Surcharge	Collective Bargaining
Pension Fund	EIN	Plan No.		2021	2020	Pending/Implemented	($)		($)		($)		Imposed	Agreement
IAM National Pension Fund	51-6031295		002	Red	Red	Yes		136		153		111	Yes	4/29/2022
Retail, Wholesale and Department    Store International Union and    Industry Pension Fund	63-0708442		001	Red	Red	Yes		211		157		160	No	*
Western Conference of Teamsters    Pension Trust ^	91-6145047		001	Green	Green	No		266		349		244	No	2/4/2022

* The union employees withdrew from the fund effective December 1, 2021.

^ The collective bargaining agreement is currently under negotiation.

Summary of Total Cost and Employer Contributions

During Fiscal 2021, 2020, and 2019, the total cost and employer contributions were as follows (amounts in thousands):

Contributions by fiscal year	Defined contribution plans expense
Fiscal 2021	$	28,081
Fiscal 2020	$	27,995
Fiscal 2019	$	27,336

Pension plans

Components of Net Periodic Benefit / (Income) Cost

The net periodic pension cost (income) for the company’s pension plans includes the following components for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Service cost	$	971		$	854		$	703
Interest cost		758			2,108			11,930
Expected return on plan assets		(1,867	)		(3,933	)		(17,147	)
Settlement loss		403			104,473			—
Curtailment loss		—			4,284			—
Amortization:
Prior service cost		57			115			387
Actuarial loss		742			1,747			7,098
Net periodic pension cost (income)		1,064			109,648			2,971
Other changes in plan assets and benefit obligations recognized in OCI:
Current year actuarial (gain) loss		(1,288	)		(25,515	)		11,277
Settlement loss		(403	)		(104,473	)		—
Curtailment loss		—			(4,284	)		—
Amortization of prior service cost		(57	)		(115	)		(387	)
Amortization of actuarial loss		(742	)		(1,747	)		(7,098	)
Total recognized in OCI		(2,490	)		(136,134	)		3,792
Total recognized in net periodic (benefit) cost and OCI	$	(1,426	)	$	(26,486	)	$	6,763

Funded Status and Amounts Recognized in Consolidated Balance Sheets

The funded status and the amounts recognized in the Consolidated Balance Sheets for the company’s pension plans are as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	37,650		$	396,906
Service cost		971			854
Interest cost		758			2,108
Actuarial gain		(1,228	)		(13,657	)
Benefits paid		(1,662	)		(7,762	)
Settlements		(1,699	)		(340,799	)
Benefit obligation at end of year	$	34,790		$	37,650
Change in plan assets:
Fair value of plan assets at beginning of year	$	34,750		$	360,675
Actual return on plan assets		1,929			15,790
Employer contribution		271			7,871
Benefits paid		(1,662	)		(7,762	)
Transfer payments		—			(1,025	)
Settlements		(1,699	)		(340,799	)
Fair value of plan assets at end of year	$	33,589		$	34,750
Funded status, end of year:
Fair value of plan assets	$	33,589		$	34,750
Benefit obligations		(34,790	)		(37,650	)
Unfunded status and amount recognized at end of year	$	(1,201	)	$	(2,900	)
Amounts recognized in the balance sheet:
Noncurrent asset	$	1,281		$	—
Current liability		(258	)		(259	)
Noncurrent liability		(2,224	)		(2,641	)
Amount recognized at end of year	$	(1,201	)	$	(2,900	)
Amounts recognized in AOCI:
Net actuarial loss before taxes	$	7,913		$	10,347
Prior service cost before taxes		198			255
Amount recognized at end of year	$	8,111		$	10,602
Accumulated benefit obligation at end of year	$	32,950		$	36,104

Schedule of Actuarial Gain/(Loss) on Defined Benefit Obligations

The actuarial gain/(loss) on defined benefit obligations of the employer due to experience, including any assumption changes, different from assumed, and the reasons for such (gain)/loss, can be found in the table below for Fiscal 2021, 2020 and 2019 (amounts in thousands).  

	Amount of (Gain)/Loss on Defined Benefit Obligation			Reasons for (Gain)/Loss
Fiscal 2021 (1)	$	(1,228	)	Gain from increase in general level of interest rates used to measure defined benefit plan obligations (approximately 30 basis points); Loss from change in mortality assumption scale from MP-2020 to MP-2021.
Fiscal 2020 (1)	$	3,718		Loss from decrease in general level of interest rates used to measure defined benefit plan obligations (approximately 60 basis points); Gain from change in mortality assumption scale from MP-2019 to MP-2020.
Fiscal 2019	$	45,979		Loss from decrease in general level of interest rates used to measure defined benefit plan obligations (approximately 90 basis points); Gain from change in mortality assumption to use PRI-2012 Mortality Tables and projection scale MP-2019, from the RP-2018 Mortality tables and projection scale MP-2018.

(1) Includes only losses from plans remaining on or after December 31, 2020.

Weighted Average Assumptions Used

Assumptions used in accounting for the company’s pension plans at each of the respective fiscal years ending are as follows:

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Weighted average assumptions used to determine benefit obligations:
Measurement date	12/31/2021			12/31/2020			12/31/2019
Discount rate		3.06	%		2.78	%		2.54	%
Rate of compensation increase		3.00	%		3.00	%		3.00	%
Weighted average assumptions used to determine net periodic benefit    cost/(income):
Measurement date	1/1/2021			1/1/2020			1/1/2019
Discount rate		2.78	%		2.54	%		3.41	%
Expected return on plan assets		5.70	%		4.97	%		5.34	%
Rate of compensation increase		3.00	%		3.00	%		3.00	%

Company Contributions

Company contributions to qualified and nonqualified plans are as follows (amounts in thousands):

Year	Required		Discretionary		Total
2021	$	271	$	—	$	271
2020	$	271	$	7,600	$	7,871
2019	$	1,040	$	1,731	$	2,771

Benefits Expected to be Paid from Plans Assets

The following are benefits paid under the plans (including settlements) during Fiscal 2021, 2020, and 2019 and expected to be paid from Fiscal 2022 through Fiscal 2031. Estimated future payments include qualified pension benefits that will be paid from the plans’ assets and nonqualified pension benefits that will be paid from corporate assets (amounts in thousands):

Year	Pension Benefits
2019	$	29,484	*
2020	$	348,561	^
2021	$	3,361	+
Estimated Future Payments:
2022	$	4,534
2023	$	3,027
2024	$	2,814
2025	$	2,404
2026	$	2,150
2027 – 2031	$	9,423

* Includes $7.0 million and $0.7 million from Plan No. 1 and Plan No. 2, respectively, paid as lump sums.

^ Includes $104.5 million and $0.4 million from Plan No. 1 and Plan No. 2, respectively, paid as lump sums.

+ Includes $1.7 million from Plan No. 2 paid as lump sums.

Postretirement Benefit Plans

Components of Net Periodic Benefit / (Income) Cost

The net periodic benefit (income) cost for the company’s postretirement benefit plans includes the following components for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Service cost	$	337		$	285		$	283
Interest cost		119			194			297
Amortization:
Prior service credit		(3	)		(4	)		(41	)
Actuarial gain		(211	)		(300	)		(276	)
Total net periodic benefit cost (income)		242			175			263
Other changes in plan assets and benefit obligations recognized in OCI:
Current year actuarial loss (gain)		238			643			(575	)
Current year prior service credit		(2,214	)		—			—
Amortization of actuarial gain		211			300			276
Amortization of prior service credit		3			4			41
Total recognized in OCI		(1,762	)		947			(258	)
Total recognized in net periodic benefit cost and OCI	$	(1,520	)	$	1,122		$	5

Weighted Average Assumptions Used

Assumptions used in accounting for the company’s postretirement benefit plans at each of the respective fiscal years ending are as follows:  

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Weighted average assumptions used to determine benefit obligations:
Measurement date	12/31/2021			12/31/2020			12/31/2019
Discount rate		2.60	%		2.11	%		3.01	%
Health care cost trend rate used to determine benefit obligations:
Initial rate		6.25	%		6.50	%		6.50	%
Ultimate rate		5.00	%		5.00	%		5.00	%
Year trend reaches the ultimate rate	2027			2027			2026
Weighted average assumptions used to determine net periodic cost:
Measurement date	1/1/21			1/1/20			1/1/19
Discount rate		2.11	%		3.01	%		4.07	%
Health care cost trend rate used to determine net periodic cost:
Initial rate		6.50	%		6.50	%		6.50	%
Ultimate rate		5.00	%		5.00	%		5.00	%
Year trend reaches the ultimate rate	2027			2026			2025

Company Contributions

Company contributions to postretirement plans are as follows (amounts in thousands):

Year	Employer Net Contribution
2019	$	722
2020	$	575
2021	$	931
2022 (Expected)	$	548

Benefits Expected to be Paid from Plans Assets

The following are benefits paid by the company during Fiscal 2021, 2020, and 2019 and expected to be paid from Fiscal 2022 through Fiscal 2031. All benefits are expected to be paid from the company’s assets (amounts in thousands):

	Postretirement benefits
Year	Employer gross contribution
2019	$	722
2020	$	575
2021	$	931
Estimated Future Payments:
2022	$	548
2023	$	507
2024	$	465
2025	$	486
2026	$	505
2027 – 2031	$	2,355

Changes in Projected Benefit Obligations

The unfunded status and the amounts recognized in the Consolidated Balance Sheets for the company’s postretirement benefit plans are as follows (amounts in thousands):

	January 1, 2022			January 2, 2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	8,023		$	7,477
Service cost		337			285
Interest cost		119			194
Participant contributions		453			573
Actuarial loss		238			642
Plan amendments		(2,214	)		—
Benefits paid		(1,384	)		(1,148	)
Benefit obligation at end of year	$	5,572		$	8,023
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer contributions		931			575
Participant contributions		453			573
Benefits paid		(1,384	)		(1,148	)
Fair value of plan assets at end of year	$	—		$	—
Funded status, end of year:
Fair value of plan assets	$	—		$	—
Benefit obligations		(5,572	)		(8,023	)
Unfunded status and amount recognized at end of year	$	(5,572	)	$	(8,023	)
Amounts recognized in the balance sheet:
Current liability	$	(547	)	$	(615	)
Noncurrent liability		(5,025	)		(7,408	)
Amount recognized at end of year	$	(5,572	)	$	(8,023	)
Amounts recognized in AOCI:
Net actuarial gain before taxes	$	(1,286	)	$	(1,735	)
Prior service credit before taxes		(2,216	)		(5	)
Amounts recognized in AOCI	$	(3,502	)	$	(1,740	)

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Income Taxes (Tables)

12 Months Ended

Jan. 01, 2022

Income Tax Disclosure [Abstract]

Components of Income Tax Expense (Benefit)

The company’s provision for income tax expense (benefit) consists of the following for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Current Taxes:
Federal	$	46,018		$	64,113		$	23,397
State		11,790			15,434			5,539
		57,808			79,547			28,936
Deferred Taxes:
Federal		6,946			(26,112	)		17,335
State		(169	)		(5,042	)		1,274
		6,777			(31,154	)		18,609
Income tax expense	$	64,585		$	48,393		$	47,545

Reconciliation of Effective Tax Amount

Income tax expense (benefit) differs from the amount computed by applying the applicable U.S. federal income tax rate of 21% because of the effect of the following items for Fiscal 2021, 2020 and 2019 (amounts in thousands):

	Fiscal 2021			Fiscal 2020			Fiscal 2019
Tax at U.S. federal income tax rate	$	56,862		$	42,149		$	44,538
State income taxes, net of federal income tax benefit		9,181			8,209			5,384
Net share-based payments (windfalls)		(104	)		(80	)		(828	)
Other		(1,354	)		(1,885	)		(1,549	)
Income tax expense	$	64,585		$	48,393		$	47,545

Components of Deferred Tax Assets and (Liabilities)

Deferred tax assets (liabilities) are comprised of the following (amounts in thousands):

	January 1, 2022			January 2, 2021
Self-insurance	$	5,502		$	4,806
Compensation and employee benefits		8,816			7,698
Deferred income		4,948			5,988
Loss and credit carryforwards		12,990			13,026
Equity-based compensation		6,797			3,977
Legal accrual		6,514			2,867
Deferred payroll tax under CARES act		4,100			7,525
Pension and postretirement benefits		1,722			2,390
Financing and operating lease right-of-use liabilities		77,422			88,816
Other		6,642			7,028
Valuation allowance		(1,030	)		(1,030	)
Deferred tax assets		134,423			143,091
Depreciation		(71,041	)		(69,056	)
Intangibles		(114,882	)		(109,824	)
Financing and operating lease right-of-use assets		(75,233	)		(85,720	)
Hedging		(2,015	)		(4,357	)
Other		(5,009	)		(2,393	)
Deferred tax liabilities		(268,180	)		(271,350	)
Net deferred tax liability	$	(133,757	)	$	(128,259	)

Reconciliation of Total Amounts of Unrecognized Tax Benefits

The following is a reconciliation of the total amounts of unrecognized tax benefits for Fiscal 2021, 2020, and 2019 (amounts in thousands):

	Fiscal 2021		Fiscal 2020			Fiscal 2019
Unrecognized tax benefit at beginning of fiscal year	$	—	$	306		$	750
Lapses of statutes of limitations		—		(306	)		(444	)
Unrecognized tax benefit at end of fiscal year	$	—	$	—		$	306

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Unaudited Quarterly Financial Information (Tables)

12 Months Ended

Jan. 01, 2022

Quarterly Financial Information Disclosure [Abstract]

Results of Operations for Each Quarter

Results of operations for each of the four quarters in the respective fiscal years are as follows. For Fiscal 2021, each quarter represents a period of twelve weeks, except the first quarter, which includes sixteen weeks.  For Fiscal 2020, first quarter consisted of sixteen weeks, second and third quarters twelve weeks, and fourth quarter thirteen weeks. (amounts in thousands, except per share data):

		First Quarter			Second Quarter		Third Quarter		Fourth Quarter
Sales	2021	$	1,302,168		$	1,017,309	$	1,027,800	$	983,490
	2020	$	1,349,444		$	1,025,861	$	989,650	$	1,023,036
Materials, supplies, labor and other production costs    (exclusive of depreciation and amortization    shown separately)*	2021	$	643,576		$	504,062	$	515,078	$	512,531
	2020	$	670,873		$	506,033	$	497,659	$	521,577
Net income (loss)	2021	$	71,655		$	56,358	$	38,852	$	39,322
	2020	$	(5,772	)	$	57,919	$	44,347	$	55,824
Basic net income (loss) per share	2021	$	0.34		$	0.27	$	0.18	$	0.19
	2020	$	(0.03	)	$	0.27	$	0.21	$	0.26
Diluted net income (loss) per share	2021	$	0.34		$	0.26	$	0.18	$	0.18
	2020	$	(0.03	)	$	0.27	$	0.21	$	0.26

*

The company does not report gross margin.  This line item presents our material, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) under an alternative presentation.

The table below presents financial results that impact comparability, by quarter, for Fiscal 2021 (amounts in thousands):

Items presented separately on the Consolidated Statements of Income	First Quarter		Second Quarter		Third Quarter			Fourth Quarter		Fiscal 2021		Footnote
Loss (recovery) on inferior ingredients	$	122	$	—	$	(950	)	$	1,772	$	944	Note 4
Multi-employer pension plan withdrawal costs	$	—	$	—	$	3,300		$	—	$	3,300	Note 20
Pension plan settlement loss	$	—	$	—	$	—		$	403	$	403	Note 20

The table below presents financial results that impact comparability, by quarter, for Fiscal 2020 (amounts in thousands):

Items presented separately on the Consolidated Statements of Income	First Quarter		Second Quarter		Third Quarter			Fourth Quarter			Fiscal 2020		Footnote
Loss on inferior ingredients	$	—	$	—	$	—		$	107		$	107	Note 4
Restructuring and related impairment charges	$	—	$	10,535	$	20,100		$	4,848		$	35,483	Note 5
Pension plan settlement and curtailment    loss (gain)	$	116,207	$	—	$	(7,153	)	$	(297	)	$	108,757	Note 20

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Basis of Presentation - Additional Information (Detail)	12 Months Ended
	Jan. 01, 2022
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Segment reporting, description	The company has one operating segment based on the nature of products the company sells, intertwined production and distribution model, the internal management structure and information that is regularly reviewed by the chief executive officer (“CEO”), who is the chief operating decision maker, for the purpose of assessing performance and allocating resources.

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Summary Of Significant Accounting Policies - Additional Information (Detail)				3 Months Ended									4 Months Ended			12 Months Ended
	Mar. 09, 2021 USD ($)	Sep. 28, 2016 USD ($)	Apr. 03, 2012 USD ($)	Jan. 01, 2022 USD ($)	Oct. 09, 2021 USD ($)	Jul. 17, 2021 USD ($)	Jan. 02, 2021 USD ($)	Oct. 03, 2020 USD ($)	Jul. 11, 2020 USD ($) Bakery	Jul. 11, 2020 USD ($)	Oct. 05, 2019 USD ($)	Jul. 13, 2019 USD ($)	Apr. 24, 2021 USD ($)	Apr. 18, 2020 USD ($) Bakery	Apr. 20, 2019 USD ($)	Jan. 01, 2022 USD ($) Segment	Jan. 02, 2021 USD ($) Bakery	Dec. 28, 2019 USD ($)	Dec. 29, 2018 USD ($)
Significant Accounting Policies [Line Items]
Sales				$ 983,490,000	$ 1,027,800,000	$ 1,017,309,000	$ 1,023,036,000	$ 989,650,000		$ 1,025,861,000			$ 1,302,168,000	$ 1,349,444,000		$ 4,330,767,000	$ 4,387,991,000	$ 4,123,974,000
Deferred gain on sale of assets held for sale				19,700,000			23,900,000									19,700,000	23,900,000
Net gain on sale of distribution rights																1,600,000	5,100,000	4,100,000
Loss of repurchase obligations of distribution rights related to a legal settlement																4,700,000
Capitalized interest				0			0									$ 0	0	0
Increase to assets																			$ 387,300,000
Increase to liabilities																			$ 391,900,000
Lessee, operating lease, existence of residual value guarantees																false
Lessee, operating lease, residual value guarantees, description																Additionally, these contracts do not contain residual value guarantees, and there are no other restrictions or covenants in the contracts.
Financing ROU assets				3,476,000			5,419,000									$ 3,476,000	5,419,000
Financing right-of-use lease liabilities				3,494,000												3,494,000
Gain on termination of embedded leases																$ (41,610,000)	(14,817,000)
Number of operating segments | Segment																1
Restructuring and related impairment charges																$ 0	$ 23,627,000	20,229,000
Number of closed bakeries reclassified as held for sale | Bakery									3					2			3
Impairment charges assets held for sale							1,300,000		$ 4,200,000								$ 23,627,000	$ 21,062,000
Proceeds from sale of assets held for sale																2,200,000
Gain at time of sale							(1,400,000)									900,000
Finite-lived intangible asset amortization periods																		33 years
Goodwill impairment loss																0	0	$ 0
Advertising and marketing costs																77,700,000	60,400,000	48,200,000
Capitalized software development costs				21,100,000			21,900,000									21,100,000	21,900,000
Amortization expense of capitalized software development costs																9,900,000	9,300,000	10,200,000
Debt instrument face amount				900,000,000			800,000,000									900,000,000	800,000,000
Research and development costs																5,600,000	4,000,000.0	4,300,000
Consulting costs related to transformation strategy																31,300,000
Consulting costs related to ERP road mapping								$ 4,400,000
2031 Notes
Significant Accounting Policies [Line Items]
Debt instrument face amount	$ 500,000,000.0			500,000,000												500,000,000
Debt instrument discount and issuance cost amortization period	10 years
2026 Notes
Significant Accounting Policies [Line Items]
Debt instrument face amount		$ 400,000,000.0		400,000,000			400,000,000									400,000,000	400,000,000
Debt instrument discount and issuance cost amortization period		10 years
4.375% Senior Notes Due 2022
Significant Accounting Policies [Line Items]
Debt instrument face amount			$ 400,000,000.0	400,000,000.0			400,000,000									$ 400,000,000.0	400,000,000
Debt instrument discount and issuance cost amortization period			10 years
Trademarks
Significant Accounting Policies [Line Items]
Restructuring impairment charges of indefinite intangible assets																		15,400,000
Impairment of Trademark
Significant Accounting Policies [Line Items]
Impairment charge							1,300,000		4,600,000
Bakeries
Significant Accounting Policies [Line Items]
Impairment charges assets held for sale									5,700,000								5,700,000
Line Closures and Office Building
Significant Accounting Policies [Line Items]
Impairment charges assets held for sale																	600,000
Spare Parts
Significant Accounting Policies [Line Items]
Impairment charges assets held for sale									$ 700,000								700,000
Manufacturing Lines
Significant Accounting Policies [Line Items]
Impairment charges assets held for sale															$ 400,000
Closed Plant
Significant Accounting Policies [Line Items]
Proceeds from sale of assets held for sale											$ 1,900,000
Gain at time of sale											800,000
Closed Plant | Winston-Salem, North Carolina
Significant Accounting Policies [Line Items]
Impairment charges assets held for sale												$ 1,300,000
Additional impairment charge of spare parts write-offs											200,000
Closed Plant | Opelika, Alabama
Significant Accounting Policies [Line Items]
Impairment charges assets held for sale											$ 3,900,000	$ 1,300,000
Bakery Equipment
Significant Accounting Policies [Line Items]
Lessee, operating lease term																less than a year up to seven years
Transportation Equipment
Significant Accounting Policies [Line Items]
Lessee, operating lease term																less than one year up to seven years
IT Equipment
Significant Accounting Policies [Line Items]
Lessee, operating lease term																less than a year up to five years
Certain Equipment and IT Equipment
Significant Accounting Policies [Line Items]
Lessee, operating lease term																shorter than a year
Buildings and Land
Significant Accounting Policies [Line Items]
Lessee, operating lease, existence of residual value guarantees																false
Lessee, operating lease, residual value guarantees, description																Additionally, these contracts do not contain residual value guarantees, and there are no other restrictions or covenants in the contracts.
Short Term Leases
Significant Accounting Policies [Line Items]
Lessee, operating lease, existence of residual value guarantees																false
Lessee, operating lease, residual value guarantees, description																do not contain residual value guarantees, and there are no other restrictions or covenants in the leases.
Lessee, operating lease, purchase options																false
Lessee, operating lease, option to extend, description																There are no purchase options present, however, there generally are renewals that could extend lease terms for additional periods.
Embedded Financing Truck And Trailer Leases
Significant Accounting Policies [Line Items]
Financing ROU assets							0										0
Financing right-of-use lease liabilities							0										0
Gain on termination of embedded leases																	4,100,000
Embedded Financing I T Equipment
Significant Accounting Policies [Line Items]
Financing ROU assets				3,000,000.0			4,600,000									$ 3,000,000.0	4,600,000
Financing right-of-use lease liabilities				$ 3,000,000.0			$ 4,600,000									$ 3,000,000.0	4,600,000
Minimum
Significant Accounting Policies [Line Items]
Lessee, operating lease term				1 year												1 year
Lessee, operating lease renewal term				1 month												1 month
Finite-lived intangible asset amortization periods																2 years
Minimum | Trademarks
Significant Accounting Policies [Line Items]
Finite-lived intangible asset amortization periods																5 years
Minimum | Short Term Leases
Significant Accounting Policies [Line Items]
Lessee, operating lease term				1 month												1 month
Minimum | Capitalized Software Development Costs
Significant Accounting Policies [Line Items]
Estimated useful life, years																3 years
Maximum
Significant Accounting Policies [Line Items]
Lessee, operating lease term				22 years												22 years
Lessee, operating lease renewal term				10 years												10 years
Finite-lived intangible asset amortization periods																40 years
Maximum | Trademarks
Significant Accounting Policies [Line Items]
Finite-lived intangible asset amortization periods																40 years
Maximum | Bakery Equipment
Significant Accounting Policies [Line Items]
Lessee, operating lease term				7 years												7 years
Maximum | Transportation Equipment
Significant Accounting Policies [Line Items]
Lessee, operating lease term				7 years												7 years
Maximum | IT Equipment
Significant Accounting Policies [Line Items]
Lessee, operating lease term				5 years												5 years
Maximum | Short Term Leases
Significant Accounting Policies [Line Items]
Lessee, operating lease term				12 months												12 months
Maximum | Capitalized Software Development Costs
Significant Accounting Policies [Line Items]
Estimated useful life, years																8 years
Direct Financing To Distributor | Maximum
Significant Accounting Policies [Line Items]
Notes receivable maturity period																10 years
Shipping costs
Significant Accounting Policies [Line Items]
Shipping costs																$ 1,063,600,000	$ 1,075,800,000	$ 1,010,500,000
Customer Concentration Risk | Outstanding Trade Receivables | Wal-Mart/Sam's Club
Significant Accounting Policies [Line Items]
Concentration risk percentage																19.80%	18.80%
Customer Concentration Risk | Total year to date sales | Top 10 Customers
Significant Accounting Policies [Line Items]
Concentration risk percentage																53.70%	53.60%	51.00%
Customer Concentration Risk | Total year to date sales | Wal-Mart/Sam's Club
Significant Accounting Policies [Line Items]
Concentration risk percentage																21.20%	21.20%	21.10%
Scan-Based Trading
Significant Accounting Policies [Line Items]
Sales																$ 2,200,000,000	$ 2,300,000,000	$ 1,900,000,000

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Sales by Sales Channel Category (Detail) - USD ($) $ in Thousands	3 Months Ended						4 Months Ended		12 Months Ended
	Jan. 01, 2022	Oct. 09, 2021	Jul. 17, 2021	Jan. 02, 2021	Oct. 03, 2020	Jul. 11, 2020	Apr. 24, 2021	Apr. 18, 2020	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Segment Reporting Information [Line Items]
Sales	$ 983,490	$ 1,027,800	$ 1,017,309	$ 1,023,036	$ 989,650	$ 1,025,861	$ 1,302,168	$ 1,349,444	$ 4,330,767	$ 4,387,991	$ 4,123,974
Branded Retail
Segment Reporting Information [Line Items]
Sales									2,875,418	2,914,072	2,478,669
Store Branded Retail
Segment Reporting Information [Line Items]
Sales									534,794	607,741	647,056
Non-Retail and Other
Segment Reporting Information [Line Items]
Sales									$ 920,555	$ 866,178	$ 998,249

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Allowance for Doubtful Accounts Activity (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Financing Receivable, Allowance for Credit Losses [Line Items]
Charged to Expense	$ 6,071	$ 11,344	$ 11,034
Allowance for Doubtful Accounts, Current
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	15,162	9,473	5,751
Charged to Expense	6,071	11,344	11,034
Write-Offs and Other	5,835	5,655	7,312
Ending Balance	$ 15,398	$ 15,162	$ 9,473

XML

Allowance for Trade Accounts Receivable Credit Losses Activity (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balances at January 2, 2021	$ 4,901	$ 2,089
Amounts charged to expense	596	2,875
Write-offs	(1,018)	(2,319)
Recoveries and other	(1,927)	2,256
Balances at January 1, 2022	$ 2,552	$ 4,901

XML

Weighted Percentage of Sales from Largest Customers (Detail)	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Customer Concentration Risk | Total year to date sales | Wal-Mart/Sam's Club
Entity Wide Revenue Major Customer [Line Items]
Concentration risk percentage	21.20%	21.20%	21.10%

XML

Activity in Inventory Reserve Allowance (Detail) - Inventory Valuation Reserve - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Inventory [Line Items]
Beginning Balance	$ 1,920	$ 161	$ 143
Charged to Expense	16	3,601	337
Write-Offs and Other	1,652	1,842	319
Ending Balance	$ 284	$ 1,920	$ 161

XML

Estimated Useful Lives by Property Plant and Equipment Class (Detail)	12 Months Ended
	Jan. 01, 2022
Buildings | Minimum
Property Plant And Equipment [Line Items]
Useful life term (years)	10 years
Buildings | Maximum
Property Plant And Equipment [Line Items]
Useful life term (years)	40 years
Machinery and Equipment | Minimum
Property Plant And Equipment [Line Items]
Useful life term (years)	3 years
Machinery and Equipment | Maximum
Property Plant And Equipment [Line Items]
Useful life term (years)	25 years
Furniture, Fixtures and Transportation Equipment | Minimum
Property Plant And Equipment [Line Items]
Useful life term (years)	3 years
Furniture, Fixtures and Transportation Equipment | Maximum
Property Plant And Equipment [Line Items]
Useful life term (years)	15 years

XML

Schedule of Depreciation Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Depreciation [Abstract]
Depreciation expense	$ 103,949	$ 103,490	$ 107,891

XML

Schedule of Total Impairments (Inclusive of Property, Plant and Equipment, Notes Receivable, Spare Parts, and ROU Assets) and Line Item Recorded in Our Consolidated Statements of Income (Detail) - USD ($)	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Restructuring and related impairment charges line item
Restructuring and related impairment charges	$ 0	$ 23,627,000	$ 20,229,000
Property, Plant and Equipment
Restructuring and related impairment charges line item
Restructuring and related impairment charges		16,507,000	5,663,000
Property, Plant and Equipment | Spare Parts
Restructuring and related impairment charges line item
Restructuring and related impairment charges		734,000	174,000
Property, Plant and Equipment | Plant Closings
Restructuring and related impairment charges line item
Restructuring and related impairment charges		5,747,000	5,133,000
Property, Plant and Equipment | Line and Distribution Depot Closings
Restructuring and related impairment charges line item
Restructuring and related impairment charges		629,000	$ 356,000
Property, Plant and Equipment | Lease Impairment Charges
Restructuring and related impairment charges line item
Restructuring and related impairment charges		$ 9,397,000

XML

Activity in Deferred Tax Valuation Allowance (Detail) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Valuation Allowance [Line Items]
Beginning Balance	$ 1,030	$ 703	$ 364
Deductions	0	0	0
Charged to Expense	0	327	339
Ending Balance	$ 1,030	$ 1,030	$ 703

XML

Recent Accounting Pronouncements - Additional Information (Detail)	Jan. 01, 2022
Accounting Standards Update 2019-12
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in accounting principle accounting standards update adopted	true
Change in accounting principle accounting standards update adoption date	Jan. 03, 2021
Change in accounting principle accounting standards update immaterial effect	true
Accounting Standards Update 2020-04
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in accounting principle accounting standards update adopted	true
Change in accounting principle accounting standards update adoption date	Jan. 03, 2021
Change in accounting principle accounting standards update immaterial effect	true

XML

Product Recall and Loss (Recovery) on Inferior Ingredients - Additional Information (Detail) $ in Thousands	3 Months Ended	12 Months Ended
	Jan. 02, 2021 USD ($) State	Jan. 01, 2022 USD ($) State	Jan. 02, 2021 USD ($) State	Dec. 28, 2019 USD ($)	Oct. 06, 2018 State
Product Recall And Recovery Loss On Inferior Ingredients [Line Items]
Products recalled distributed to retail customers, number of states | State	14	8	14		18
Product recall costs				$ 800
Incurred costs related to recall of gluten-free products and adjustment to previously recorded inferior yeast costs		$ 1,800	$ 1,300
Additional cost incurred to recall of gluten-free products		100
Cash recovered from suppliers on disruption	$ 1,200	$ 950	$ 1,150	$ 1,822
Selling, General and Administrative Expenses
Product Recall And Recovery Loss On Inferior Ingredients [Line Items]
Cash recovered from suppliers on disruption	$ 3,900

XML

Summary of Total Costs and Recoveries (Detail) - USD ($) $ in Thousands	3 Months Ended			4 Months Ended	12 Months Ended
	Jan. 01, 2022	Oct. 09, 2021	Jan. 02, 2021	Apr. 24, 2021	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Product Recall And Recovery Loss On Inferior Ingredients [Abstract]
Expense recognized					$ 1,894	$ 1,257	$ 1,785
Recoveries recognized			$ (1,200)		(950)	(1,150)	(1,822)
Total loss (recovery) on inferior ingredients	$ 1,772	$ (950)	$ 107	$ 122	$ 944	$ 107	$ (37)

XML

Restructuring Activities - Additional Information (Detail)			3 Months Ended					4 Months Ended		12 Months Ended
	Jul. 02, 2018 Segment	May 03, 2017 BusinessUnit	Jan. 02, 2021 USD ($)	Jul. 11, 2020 USD ($) Bakery	Dec. 28, 2019 USD ($)	Oct. 05, 2019 USD ($)	Jul. 13, 2019 USD ($)	Apr. 18, 2020 Bakery	Apr. 20, 2019 USD ($)	Jan. 01, 2022 USD ($) Segment	Jan. 02, 2021 USD ($) Bakery		Dec. 28, 2019 USD ($)
Restructuring Cost And Reserve [Line Items]
Number of operating segments | Segment										1
Project centennial costs										$ 0	$ 15,548,000	[1]	$ 784,000	[1]
Impairment charges assets held for sale			$ 1,300,000	$ 4,200,000							$ 23,627,000		21,062,000
Number of closed bakeries reclassified as held for sale | Bakery				3				2			3
Restructuring and related impairment charges										$ 0	$ 23,627,000		20,229,000
RIF
Restructuring Cost And Reserve [Line Items]
Employee severance charges recognized											5,300,000
Bakeries
Restructuring Cost And Reserve [Line Items]
Impairment charges assets held for sale				$ 5,700,000							5,700,000
Spare Parts
Restructuring Cost And Reserve [Line Items]
Impairment charges assets held for sale				700,000							700,000
Closed Plant | Opelika, Alabama
Restructuring Cost And Reserve [Line Items]
Impairment charges assets held for sale						$ 3,900,000	$ 1,300,000
Employee severance charges recognized						$ 1,500,000
Manufacturing Lines
Restructuring Cost And Reserve [Line Items]
Impairment charges assets held for sale									$ 400,000
Impairment of Trademark
Restructuring Cost And Reserve [Line Items]
Impairment charge			1,300,000	4,600,000
Lease Impairment Charges
Restructuring Cost And Reserve [Line Items]
Restructuring and related impairment charges											9,397,000
Lease Termination Charges
Restructuring Cost And Reserve [Line Items]
Restructuring and related impairment charges											4,077,000
Reorganization Costs
Restructuring Cost And Reserve [Line Items]
Restructuring and related impairment charges													$ 253,000
Develop Leading Capabilities
Restructuring Cost And Reserve [Line Items]
Number of operating segments | Segment	1
Line and Distribution Depot Closings
Restructuring Cost And Reserve [Line Items]
Impairment charges assets held for sale				$ 600,000
Employee Severance | Voluntary Employee Separation Incentive Plan
Restructuring Cost And Reserve [Line Items]
Employee termination benefits											$ 2,600,000
Launch of Project Centennial
Restructuring Cost And Reserve [Line Items]
Ingredient and packaging impairments			$ 1,200,000
Additional impairment charge on certain finite-lived intangible assets					$ 15,400,000
Launch of Project Centennial | Develop Leading Capabilities
Restructuring Cost And Reserve [Line Items]
Number of new organizational structure business units established | BusinessUnit		2

[1] Represents non-restructuring costs and are recorded in the selling, distribution, and administrative expenses line item of our Consolidated Statements of Income.

XML

Components of Costs Associated with Project Centennial (Detail) - USD ($)		12 Months Ended
		Jan. 01, 2022	Jan. 02, 2021		Dec. 28, 2019
Restructuring and related impairment charges:
Restructuring and related impairment charges		$ 0	$ 23,627,000		$ 20,229,000
Employee termination benefits			7,779,000		3,042,000
Restructuring and related impairment charges	[1]		35,483,000		23,524,000
Project Centennial implementation costs		$ 0	15,548,000	[2]	784,000	[2]
Total Project Centennial restructuring and implementation costs			51,031,000		24,308,000
Reorganization Costs
Restructuring and related impairment charges:
Restructuring and related impairment charges					253,000
Lease Termination Charges
Restructuring and related impairment charges:
Restructuring and related impairment charges			4,077,000
Impairment Charges, Net of Gain on Sale
Restructuring and related impairment charges:
Restructuring and related impairment charges			$ 23,627,000		$ 20,229,000

[1] Presented on our Consolidated Statements of Income.

[2] Represents non-restructuring costs and are recorded in the selling, distribution, and administrative expenses line item of our Consolidated Statements of Income.

XML

Schedule of Restructuring Impairment Charges Recognized By Type of Cost (Detail) - USD ($)	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Restructuring Cost And Reserve [Line Items]
Total restructuring impairment of assets	$ 0	$ 23,627,000	$ 20,229,000
Lease Impairment Charges
Restructuring Cost And Reserve [Line Items]
Total restructuring impairment of assets		9,397,000
Gain on Sale
Restructuring Cost And Reserve [Line Items]
Total restructuring impairment of assets			(833,000)
Spare Parts | Impairment of Assets
Restructuring Cost And Reserve [Line Items]
Total restructuring impairment of assets		734,000	174,000
Plant Closure Costs | Impairment of Assets
Restructuring Cost And Reserve [Line Items]
Total restructuring impairment of assets		5,747,000	5,133,000
Line and Distribution Depot Closure Costs | Impairment of Assets
Restructuring Cost And Reserve [Line Items]
Total restructuring impairment of assets		629,000	356,000
Brand Rationalization Study Impairments | Impairment of Assets
Restructuring Cost And Reserve [Line Items]
Total restructuring impairment of assets		$ 7,120,000	$ 15,399,000

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Components of, and Changes in Restructuring Accruals (Detail) - USD ($) $ in Thousands		12 Months Ended
		Jan. 01, 2022		Jan. 02, 2021		Dec. 28, 2019
Restructuring Cost And Reserve [Line Items]
Liability balance, beginning balance		$ 1,508	[1]	$ 1,624	[1]	$ 401
Charges				11,856		3,295
Cash payments		(1,508)		(11,972)		(2,072)
Liability balance, ending balance	[1]			1,508		1,624
Reorganization Costs
Restructuring Cost And Reserve [Line Items]
Charges	[2]					253
Cash payments	[2]					(253)
Employee Termination Benefits
Restructuring Cost And Reserve [Line Items]
Liability balance, beginning balance	[3]			1,450	[1]	227
Charges	[3]			(149)		3,042
Cash payments	[3]			(1,301)		(1,819)
Liability balance, ending balance	[1],[3]					1,450
Distribution Network Optimization
Restructuring Cost And Reserve [Line Items]
Charges				4,077
Cash payments				(4,077)
VSIP
Restructuring Cost And Reserve [Line Items]
Liability balance, beginning balance		1,036	[1]	174	[1]	174
Charges				2,639
Cash payments		(1,036)		(1,777)
Liability balance, ending balance	[1]			1,036		$ 174
RIF
Restructuring Cost And Reserve [Line Items]
Liability balance, beginning balance	[1]	472
Charges				5,289
Cash payments		$ (472)		(4,817)
Liability balance, ending balance	[1]			$ 472

[1] Recorded in the other accrued current liabilities line item of our Consolidated Balance Sheets

[2] Reorganization costs include employee relocation expenses.

[3] Employee termination benefits not related to the VSIP.

XML

Summary of Reclassifications Out of AOCI (Detail) - USD ($) $ in Thousands		12 Months Ended
		Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification from AOCI, Gains and losses on derivative instruments net of tax		$ 1,681	$ (2,116)	$ 2,664
Reclassification From AOCI, Current Period Net Of Tax	[1]	938	(84,558)	(2,694)
Derivative Instruments
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification from AOCI, Gains and losses on cash flow hedges before tax	[1]	2,241	(2,820)	3,565
Reclassification from AOCI, Derivative instruments tax (expense) benefit	[1]	(560)	704	(901)
Reclassification from AOCI, Gains and losses on derivative instruments net of tax	[1]	1,681	(2,116)	2,664
Reclassification From AOCI, Current Period Net Of Tax		1,681	(2,116)
Pension and postretirement plans, prior service credits
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification from AOCI, Current Period, before Tax	[1],[2]	(55)	(111)	(346)
Pension and postretirement plans, Settlement losses
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification from AOCI, Current Period, before Tax	[1],[2]	(403)	(108,757)
Pension and postretirement plans, actuarial losses
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification from AOCI, Current Period, before Tax	[1],[2]	(532)	(1,447)	(6,822)
Accumulated Defined Benefit Plans Adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification from AOCI, Current Period, before Tax	[1]	(990)	(110,315)	(7,168)
Reclassification from AOCI, Current Period, Tax benefit	[1]	247	27,873	1,810
Reclassification From AOCI, Current Period Net Of Tax	[1]	(743)	(82,442)	(5,358)
Interest Rate Contracts | Derivative Instruments
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification from AOCI, Gains and losses on cash flow hedges before tax	[1]	126	(145)	(142)
Commodity Contract | Derivative Instruments
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification from AOCI, Gains and losses on cash flow hedges before tax	[1],[3]	2,115	(2,675)	3,707
Reclassification from AOCI, Derivative instruments tax (expense) benefit		(529)	668	(936)
Reclassification from AOCI, Gains and losses on derivative instruments net of tax		$ 1,586	$ (2,007)	$ 2,771

[1] Amounts in parentheses indicate debits to determine net income.

[2] These items are included in the computation of net periodic pension cost. See Note 20, Postretirement Plans, for additional information.

[3] Amounts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.

XML

Summary of AOCI Exclusive of Reclassification (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Accumulated Other Comprehensive Income Loss [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Derivative instruments net of tax	$ (5,348)	$ 9,298	$ 8,457
Amount of Gain (Loss) Recognized in AOCI, Current year, net of tax	(2,899)	27,886	457
Derivative Instruments
Accumulated Other Comprehensive Income Loss [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Derivative instruments before tax	(7,128)	12,395	11,313
Amount of Gain (Loss) Recognized in AOCI, Current year, tax benefit (expense)	1,780	(3,097)	(2,856)
Amount of Gain (Loss) Recognized in AOCI, Derivative instruments net of tax	(5,348)	9,298	8,457
Amount of Gain (Loss) Recognized in AOCI, Current year, net of tax	(5,348)	9,298
Current Year Actuarial Loss (gain)
Accumulated Other Comprehensive Income Loss [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Current year, before tax	1,050	24,872	(10,702)
Pension and postretirement plans, prior service credits
Accumulated Other Comprehensive Income Loss [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Current year, before tax	2,214
Accumulated Defined Benefit Plans Adjustment
Accumulated Other Comprehensive Income Loss [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Current year, before tax	3,264	24,872	(10,702)
Amount of Gain (Loss) Recognized in AOCI, Current year, tax (expense) benefit	(815)	(6,284)	2,702
Amount of Gain (Loss) Recognized in AOCI, Current year, net of tax	2,449	18,588	(8,000)
Interest Rate Contracts
Accumulated Other Comprehensive Income Loss [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Derivative instruments net of tax	2,926
Interest Rate Contracts | Derivative Instruments
Accumulated Other Comprehensive Income Loss [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Derivative instruments before tax	3,902
Commodity Contract
Accumulated Other Comprehensive Income Loss [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Derivative instruments net of tax	(8,274)	9,298	8,457
Commodity Contract | Derivative Instruments
Accumulated Other Comprehensive Income Loss [Line Items]
Amount of Gain (Loss) Recognized in AOCI, Derivative instruments before tax	$ (11,030)	$ 12,395	$ 11,313

XML

Changes to AOCI, Net of Income Tax, By Component (Detail) - USD ($) $ in Thousands		12 Months Ended
		Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Accumulated Other Comprehensive Income Loss [Line Items]
Balances		$ 1,372,994	$ 1,263,430	$ 1,258,267
Other comprehensive loss (gain) before reclassifications		(2,899)	27,886	457
Reclassified to earnings from AOCI	[1]	(938)	84,558	2,694
Balances		1,411,274	1,372,994	1,263,430
Cash Flow Hedge Items
Accumulated Other Comprehensive Income Loss [Line Items]
Balances		13,072	1,658
Other comprehensive loss (gain) before reclassifications		(5,348)	9,298
Reclassified to earnings from AOCI		(1,681)	2,116
Balances		6,043	13,072	1,658
Defined Benefit Pension Plan Items
Accumulated Other Comprehensive Income Loss [Line Items]
Balances		(6,648)	(107,678)
Other comprehensive loss (gain) before reclassifications		2,449	18,588	(8,000)
Reclassified to earnings from AOCI	[1]	743	82,442	5,358
Balances		(3,456)	(6,648)	(107,678)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income Loss [Line Items]
Balances		6,424	(106,020)	(109,171)
Other comprehensive loss (gain) before reclassifications		(2,899)	27,886
Reclassified to earnings from AOCI		(938)	84,558
Balances		$ 2,587	$ 6,424	$ (106,020)

[1] Amounts in parentheses indicate debits to determine net income.

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Loss Reclassified From AOCI for Commodity Contracts (Detail) - USD ($) $ in Thousands		12 Months Ended
		Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Accumulated Other Comprehensive Income Loss [Line Items]
Reclassification from AOCI, Gains and losses on derivative instruments net of tax		$ 1,681	$ (2,116)	$ 2,664
Derivative Instruments
Accumulated Other Comprehensive Income Loss [Line Items]
Reclassification from AOCI, Gains and losses on cash flow hedges before tax	[1]	2,241	(2,820)	3,565
Tax (expense) benefit	[1]	(560)	704	(901)
Reclassification from AOCI, Gains and losses on derivative instruments net of tax	[1]	1,681	(2,116)	2,664
Commodity Contract | Derivative Instruments
Accumulated Other Comprehensive Income Loss [Line Items]
Reclassification from AOCI, Gains and losses on cash flow hedges before tax	[1],[2]	2,115	(2,675)	3,707
Tax (expense) benefit		(529)	668	(936)
Reclassification from AOCI, Gains and losses on derivative instruments net of tax		$ 1,586	$ (2,007)	$ 2,771

[1] Amounts in parentheses indicate debits to determine net income.

[2] Amounts are presented as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows.

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Notes Receivable from IDPs - Additional Information (Detail)	12 Months Ended
	Jan. 01, 2022
Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing period of distribution rights, years	10 years

XML

Interest Income Related to Notes Receivable (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Receivables [Abstract]
Interest income	$ 23,533	$ 26,696	$ 27,750

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Assets Held for Sale - Additional Information (Detail) $ in Thousands	3 Months Ended			4 Months Ended	12 Months Ended
	Jan. 02, 2021 USD ($)	Jul. 11, 2020 USD ($) Bakery	Oct. 05, 2019 USD ($)	Apr. 18, 2020 Bakery	Jan. 01, 2022 USD ($)	Jan. 02, 2021 USD ($) Bakery	Dec. 28, 2019 USD ($)
Long Lived Assets Held For Sale [Line Items]
Proceeds from sale of assets held for sale					$ 2,200
Gain at time of sale	$ (1,400)				900
Payments to acquire equipment held-for-sale					1,600
Payments to acquire property held-for-sale					$ 4,300
Number of closed bakeries reclassified as held for sale | Bakery		3		2		3
Impairment charges assets held for sale	$ 1,300	$ 4,200				$ 23,627	$ 21,062
Closed Plant
Long Lived Assets Held For Sale [Line Items]
Proceeds from sale of assets held for sale			$ 1,900
Gain at time of sale			800
Tulsa, Oklahoma Plant | Closed Plant
Long Lived Assets Held For Sale [Line Items]
Proceeds from sale of assets held for sale			1,900
Gain at time of sale			$ 800

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Assets Held for Sale (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Long Lived Assets Held For Sale [Line Items]
Total assets held for sale	$ 11,369	$ 5,641
Property, Plant and Equipment
Long Lived Assets Held For Sale [Line Items]
Total assets held for sale	6,222	1,934
Distribution Rights
Long Lived Assets Held For Sale [Line Items]
Total assets held for sale	$ 5,147	$ 3,707

XML

Summary of Goodwill and Other Intangible Assets (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill	$ 545,244	$ 545,244
Amortizable intangible assets, net of amortization	568,332	587,818
Indefinite-lived intangible assets	127,100	127,100
Total goodwill and other intangible assets	$ 1,240,676	$ 1,260,162

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Goodwill and Other Intangible Assets - Additional Information (Detail)	3 Months Ended			12 Months Ended
	Jul. 17, 2021 USD ($)	Jan. 02, 2021 USD ($)	Jul. 11, 2020 USD ($)	Jan. 01, 2022 USD ($)	Jan. 02, 2021 USD ($)	Dec. 28, 2019 USD ($) BusinessUnit TradeMarkAsset
Goodwill And Intangible Assets Disclosure [Line Items]
Goodwill impaired				$ 0	$ 0	$ 0
Additional indefinite lived intangible assets separately identified from goodwill		$ 127,100,000		$ 127,100,000	127,100,000
Impairment charges assets held for sale		1,300,000	$ 4,200,000		$ 23,627,000	21,062,000
Recognized intangible asset impairments						$ 15,400,000
Number of brands impaired | BusinessUnit						1
Finite-lived intangible asset, estimated useful life						33 years
Impairment of Trademark
Goodwill And Intangible Assets Disclosure [Line Items]
Impairment charge		$ 1,300,000	$ 4,600,000
Indefinite-Lived Trademark Asset
Goodwill And Intangible Assets Disclosure [Line Items]
Number of indefinite-lived trademark assets compared by fair value of the brand and its carrying value | TradeMarkAsset						1
Finite-Lived Trademark Assets
Goodwill And Intangible Assets Disclosure [Line Items]
Number of finite-lived trademark assets tested using an undiscounted cash flow test | TradeMarkAsset						3
Trademarks
Goodwill And Intangible Assets Disclosure [Line Items]
Finite lived intangible assets acquired	$ 10,200,000

XML

Amortizable Intangible Assets (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Finite-Lived Intangible Assets [Line Items]
Cost	$ 806,961	$ 795,590
Accumulated Amortization	238,629	207,772
Net Value	568,332	587,818
Trademarks
Finite-Lived Intangible Assets [Line Items]
Cost	477,115	466,915
Accumulated Amortization	78,124	64,426
Net Value	398,991	402,489
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Cost	318,021	318,021
Accumulated Amortization	151,496	135,068
Net Value	166,525	182,953
Non-Compete Agreements
Finite-Lived Intangible Assets [Line Items]
Cost	5,154	5,154
Accumulated Amortization	5,074	5,034
Net Value	80	120
Distribution Rights
Finite-Lived Intangible Assets [Line Items]
Cost	4,123	4,123
Accumulated Amortization	3,398	3,123
Net Value	725	1,000
Distributor Routes Held and Used
Finite-Lived Intangible Assets [Line Items]
Cost	2,548	1,377
Accumulated Amortization	537	121
Net Value	$ 2,011	$ 1,256

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Amortization Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense	$ 30,857	$ 30,704	$ 29,323

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Estimated Net Amortization of Intangibles (Detail) $ in Thousands	Jan. 01, 2022 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2022	$ 31,535
2023	30,654
2024	29,959
2025	29,247
2026	$ 27,173

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Net Fair Value of Commodity Price Risk (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Assets	$ 3,955	$ 17,415
Liabilities	(220)	(88)
Net Fair Value	3,735	17,327
Level 1
Derivative Instruments, Gain (Loss) [Line Items]
Assets	3,955	17,415
Liabilities	(220)	(88)
Net Fair Value	3,735	17,327
Other Current Assets
Derivative Instruments, Gain (Loss) [Line Items]
Assets	3,955	16,684
Other Current Assets | Level 1
Derivative Instruments, Gain (Loss) [Line Items]
Assets	3,955	16,684
Other LongTerm Assets
Derivative Instruments, Gain (Loss) [Line Items]
Assets		731
Other LongTerm Assets | Level 1
Derivative Instruments, Gain (Loss) [Line Items]
Assets		731
Other Current Liabilities
Derivative Instruments, Gain (Loss) [Line Items]
Liabilities	(220)	(5)
Other Current Liabilities | Level 1
Derivative Instruments, Gain (Loss) [Line Items]
Liabilities	$ (220)	(5)
Other LongTerm Liabilities
Derivative Instruments, Gain (Loss) [Line Items]
Liabilities		(83)
Other LongTerm Liabilities | Level 1
Derivative Instruments, Gain (Loss) [Line Items]
Liabilities		$ (83)

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Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 02, 2021	Jan. 01, 2022	Jan. 02, 2021
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Derivative cash settlement net receipt of offset changes in benchmark treasury rate	$ 3,900
Derivative instrument, asset		$ 2,039	$ 1,229
Derivative instrument, liability		$ 3,400	$ 14,000

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Derivative Instruments Recorded on Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Assets	$ 3,955	$ 17,415
Derivative Liabilities	220	88
Commodity Contract | Other Current Assets
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Assets	3,955	16,684
Commodity Contract | Other LongTerm Assets
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Assets		731
Commodity Contract | Other Current Liabilities
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Liabilities	$ 220	5
Commodity Contract | Other LongTerm Liabilities
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Liabilities		$ 83

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Effect of Derivative Instruments for Deferred Gains And (Losses) on Closed Contracts and Effective Portion in Fair Value on AOCI, Utilized for Risk Management Purposes (Detail) - USD ($) $ in Thousands		3 Months Ended												4 Months Ended				12 Months Ended
		Jan. 01, 2022	[1]	Oct. 09, 2021	[1]	Jul. 17, 2021	[1]	Jan. 02, 2021	[1]	Oct. 03, 2020	[1]	Jul. 11, 2020	[1]	Apr. 24, 2021	[1]	Apr. 18, 2020	[1]	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) (Net of tax)																		$ (5,348)	$ 9,298	$ 8,457
Production costs		$ 512,531		$ 515,078		$ 504,062		$ 521,577		$ 497,659		$ 506,033		$ 643,576		$ 670,873		2,175,247	2,196,142	2,155,709
Income before income taxes																		270,772	200,711	212,083
Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Income before income taxes																		1,681	(2,116)	2,664
Interest Rate Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) (Net of tax)																		2,926
Interest Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Interest income (expense)																		95	(109)	(107)
Commodity Contract
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) (Net of tax)																		(8,274)	9,298	8,457
Commodity Contract | Reclassification out of Accumulated Other Comprehensive Income | Product
Derivative Instruments, Gain (Loss) [Line Items]
Production costs	[2]																	$ 1,586	$ (2,007)	$ 2,771

[1] The company does not report gross margin.  This line item presents our material, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) under an alternative presentation.

[2] Included in Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately).

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Accumulated Other Comprehensive Loss (Income) Related to Derivative Transactions (Detail) $ in Thousands	12 Months Ended
	Jan. 01, 2022 USD ($)
Closed Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Estimated amount of derivatives to be reclassified in income from AOCI	$ 3,242
Closed Contracts | Commodity price risk derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Estimated amount of derivatives to be reclassified in income from AOCI	179
Closed Contracts | Interest rate risk derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Estimated amount of derivatives to be reclassified in income from AOCI	3,063
Expiring in 2022
Derivative Instruments, Gain (Loss) [Line Items]
Estimated amount of derivatives to be reclassified in income from AOCI	2,801
Expiring in 2022 | Commodity price risk derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Estimated amount of derivatives to be reclassified in income from AOCI	2,801
Closed or Expiring Over Next Four Years
Derivative Instruments, Gain (Loss) [Line Items]
Estimated amount of derivatives to be reclassified in income from AOCI	6,043
Closed or Expiring Over Next Four Years | Commodity price risk derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Estimated amount of derivatives to be reclassified in income from AOCI	2,980
Closed or Expiring Over Next Four Years | Interest rate risk derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Estimated amount of derivatives to be reclassified in income from AOCI	$ 3,063

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Financial Contracts Hedging Commodity Risk (Detail) - Cash Flow Hedging $ in Thousands	Jan. 01, 2022 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate Notional Amount	$ 43,824
Wheat Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate Notional Amount	32,731
Soybean Oil Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate Notional Amount	7,088
Natural Gas Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate Notional Amount	3,663
Corn Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Aggregate Notional Amount	$ 342

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Components of Other Current Assets (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Prepaid assets	$ 12,576	$ 8,140
Service contracts	19,884	7,911
Fair value of derivative instruments	3,955	16,684
Collateral to counterparties for derivative positions	2,039	1,229
Income taxes receivable	13,001	2,211
Other	137	1,214
Total	$ 51,592	$ 37,389

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Components of Other Non-Current Assets (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Unamortized financing fees	$ 1,574	$ 836
Investments	3,145	3,242
Fair value of derivative instruments		731
Deposits	2,202	2,092
Unamortized cloud computing arrangement costs	1,215	2,059
Noncurrent pension asset	1,281
Other	206	121
Total	$ 9,623	$ 9,081

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Components of Other Accrued Liabilities (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Oct. 09, 2021	Jan. 02, 2021
Other Liabilities Disclosure [Abstract]
Employee compensation	$ 25,505		$ 28,826
VSIP and RIF liabilities			1,508
Employee vacation	15,782		16,216
Employee bonus	33,413		57,394
Fair value of derivative instruments	220		5
Self-insurance reserves	29,828		29,367
Bank overdraft	17,161		16,900
Accrued interest	7,202		8,241
Accrued taxes	23,911		22,773
Accrued legal costs	1,746		1,644
Accrued advertising	4,294		3,610
Accrued legal settlements	16,500		11,869
Accrued short term deferred income	4,040		4,760
Accrued utilities	6,741		6,070
Acquisition consideration adjustment	3,400
Collateral from counterparties for derivative positions	3,377		13,997
Multi-employer pension plan withdrawal liability	2,100	$ 2,100
Repurchase obligations of distribution rights	4,743
Other	3,480		3,099
Total	$ 203,443		$ 226,279

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Other Accrued Liabilities and Other Long-term Liabilities - Additional Information (Detail) $ in Millions	Jan. 01, 2022 USD ($) DistributionTerritory
Other Liabilities Disclosure [Abstract]
Business combination, estimated cost owed to shareholders | $	$ 3.4
Number of distribution territories repurchased | DistributionTerritory	75

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Components of Other Long-term Liabilities (Details) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Other Liabilities Disclosure [Line Items]
Deferred income	$ 15,676	$ 19,153
Deferred compensation	20,188	16,674
Fair value of derivative instruments		83
Other deferred credits	720	1,502
Other	1,375	1,255
Total	$ 37,959	53,659
CARES Act
Other Liabilities Disclosure [Line Items]
Deferred payroll taxes under the CARES Act		$ 14,992

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Leases - Lease Costs Incurred By Lease Type, and/or Type Of Payment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Lease cost:
Amortization of right-of-use assets	$ 1,751	$ 7,190	$ 7,014
Interest on lease liabilities	154	846	994
Operating lease cost	68,927	69,926	69,525
Short-term lease cost	3,075	3,058	2,630
Variable lease cost	27,120	24,815	26,359
Total lease cost	$ 101,027	$ 105,835	$ 106,522

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Leases - Other Supplemental Quantitative Disclosures (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from financing leases	$ 154	$ 846
Operating cash flows from operating leases	68,802	74,226
Financing cash flows from financing leases	1,745	6,715	$ 5,937
Right-of-use assets obtained in exchange for new financing lease liabilities	37	79	9,854
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 55,869	$ 16,022	$ 44,585
Financing leases, weighted-average remaining lease term	2 years 1 month 6 days	3 years 1 month 6 days
Operating leases, weighted-average remaining lease term	8 years 3 months 18 days	9 years 4 months 24 days
Financing leases, weighted-average incremental borrowing rate	3.50%	3.50%
Operating leases, weighted-average incremental borrowing rate	3.80%	4.10%

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Leases - Estimated Undiscounted Future Lease Payments Under Non-Cancelable Operating Leases and Financing Leases with Reconciliation of Undiscounted Cash Flows (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Operating lease liabilities
2022	$ 56,925
2023	53,900
2024	45,269
2025	42,386
2026	28,591
Thereafter	127,734
Total minimum lease payments	354,805
Less: amount of lease payments representing interest	(57,777)
Present value of future minimum lease payments	297,028
Less: current obligations under leases	(46,390)	$ (50,139)
Long-term lease obligations	250,638	290,264
Financing lease liabilities
2022	1,691
2023	1,828
2024	101
Total minimum lease payments	3,620
Less: amount of lease payments representing interest	(126)
Present value of future minimum lease payments	3,494
Less: current obligations under leases	(1,584)	(1,769)
Long-term lease obligations	$ 1,910	$ 3,590

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Lease Modifications and Renewals and Lease Impairments (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021
Leases [Abstract]
Lease modifications and renewals	$ 46,790	$ 13,818
Lease impairments		11,400
Lease terminations	$ 41,610	$ 14,817

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Leases - Additional Information (Detail) $ in Millions	12 Months Ended
	Jan. 01, 2022 USD ($) Warehouse	Jan. 02, 2021 USD ($) Warehouse
Leases [Abstract]
Number of leased warehouses purchased | Warehouse	27
Purchase of leased warehouses | $	$ 64.7
Number of purchased properties impaired | Warehouse		2
Number of remaining lease | Warehouse	25
Gain on purchase of lease | $		$ 2.6
Carrying values for remaining lease | $	$ 35.4

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Long Term Debt and Capital Leases (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021
Debt Instrument [Line Items]
Accounts receivable securitization facility		$ 114,000
Total debt	$ 890,609	960,103
Long-term debt	$ 890,609	960,103
Unsecured Credit Facility
Debt Instrument [Line Items]
Interest Rate	1.02%
Final Maturity	2026
Unsecured credit facility		50,000
2031 Notes
Debt Instrument [Line Items]
Interest Rate	2.40%
Final Maturity	2031
Senior notes	$ 493,333
2026 Notes
Debt Instrument [Line Items]
Interest Rate	3.50%
Final Maturity	2026
Senior notes	$ 397,276	396,705
2022 Notes
Debt Instrument [Line Items]
Interest Rate	4.38%
Final Maturity	2022
Senior notes		$ 399,398
Accounts Receivable Securitization Facility
Debt Instrument [Line Items]
Interest Rate	1.00%
Final Maturity	2023

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Long Term Debt and Capital Leases (Parenthetical) (Detail)	12 Months Ended
	Jan. 01, 2022
2031 Notes
Debt Instrument [Line Items]
Senior notes due year	2031
2026 Notes
Debt Instrument [Line Items]
Senior notes due year	2026
2022 Notes
Debt Instrument [Line Items]
Senior notes due year	2022

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Debt and Other Commitments - Additional Information (Detail) - USD ($)							3 Months Ended		12 Months Ended
	Jul. 30, 2021	Apr. 08, 2021	Mar. 09, 2021	Sep. 28, 2016	Jan. 01, 2016	Apr. 03, 2012	Oct. 09, 2021	Oct. 09, 2021	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019	Dec. 31, 2015	Sep. 23, 2021	Jul. 17, 2013
Debt Instrument [Line Items]
Bank overdraft									$ 17,161,000	$ 16,900,000
Debt instrument face amount									900,000,000	800,000,000
Payments for debt issuance costs									6,022,000	206,000	$ 110,000
Loss on extinguishment of debt									16,149,000
Cash payment of debt									579,428,000	392,400,000	$ 723,500,000
Deferred Salaries
Debt Instrument [Line Items]
Percentage of amount deferred, maximum					75.00%							75.00%
Deferred Bonus
Debt Instrument [Line Items]
Percentage of amount deferred, maximum												100.00%
2031 Notes
Debt Instrument [Line Items]
Debt instrument face amount			$ 500,000,000.0						$ 500,000,000
Notes due year									Mar. 15, 2031
Debt instrument interest rate			2.40%
Price to redeem notes as a percentage of principal			100.00%
Variable interest rate			0.20%
Change of control triggering event price to redeem notes as a percentage of principal									101.00%
Balance of unamortized financing costs									$ 7,259,000
Debt discount									2,430,000
2026 Notes
Debt Instrument [Line Items]
Debt instrument face amount				$ 400,000,000.0					$ 400,000,000	400,000,000
Notes due year									Oct. 01, 2026
Debt instrument interest rate				3.50%
Price to redeem notes as a percentage of principal				100.00%
Variable interest rate				0.30%
Change of control triggering event price to redeem notes as a percentage of principal									101.00%
Balance of unamortized financing costs									$ 5,742,000
Debt discount									2,108,000
2022 Notes
Debt Instrument [Line Items]
Debt instrument face amount						$ 400,000,000.0			$ 400,000,000.0	400,000,000
Notes due year									Apr. 01, 2022
Debt instrument interest rate						4.375%
Price to redeem notes as a percentage of principal						100.00%
Variable interest rate						0.35%
Change of control triggering event price to redeem notes as a percentage of principal									101.00%
Loss on extinguishment of debt		$ 16,100,000
Cash payment of debt		15,400,000
Write-off of unamortized debt discount and debt issuance costs		$ 700,000
Debt discount									$ 1,000,000.0
Payments of financing costs									3,900,000
Standby Letters Of Credit
Debt Instrument [Line Items]
Line of credit facility outstanding daily balance during period									8,400,000	8,400,000
Accounts Receivable Securitization Facility
Debt Instrument [Line Items]
Line of credit facility outstanding daily balance during period										114,000,000
Line of credit facility, maximum borrowing capacity									$ 194,500,000				$ 200,000,000.0	$ 150,000,000.0
Line of credit extended term									1 year
Line of credit facility, expiration date									Sep. 27, 2023
Debt instrument covenant compliance									As of January 1, 2022 and January 2, 2021, respectively, the company was in compliance with all restrictive covenants under the AR facility.
Basis spread on variable rate									0.85%
Unused borrowing fee									0.35%
Balance of unamortized financing costs									$ 300,000	300,000
Payments for debt issuance costs								$ 200,000
Accounts Receivable Securitization Facility | Maximum
Debt Instrument [Line Items]
Line of credit facility outstanding daily balance during period									114,000,000
Unsecured Credit Facility
Debt Instrument [Line Items]
Line of credit facility outstanding daily balance during period										$ 50,000,000
Line of credit facility, maximum borrowing capacity									500,000,000
Line of credit facility, expiration date	Jul. 30, 2026
Payments for debt issuance costs							$ 1,100,000
Line of credit facility, expiration period	5 years
Line of credit facility, amount available	$ 500,000,000.0
Line of credit facility, additional borrowing capacity	$ 200,000,000.0
Covenant, maximum leverage ratio	4.00
Minimum leverage ratio on covenant holiday	3.75
Unsecured Credit Facility | Unsecured Credit Facility Total Potential Commitment
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 700,000,000.0
Unsecured Credit Facility | Maximum
Debt Instrument [Line Items]
Line of credit facility outstanding daily balance during period									$ 50,000,000
Unsecured Credit Facility | Base Rate Loans | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.00%
Unsecured Credit Facility | Base Rate Loans | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	0.525%
Unsecured Credit Facility | Eurodollar Loans | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.815%
Unsecured Credit Facility | Eurodollar Loans | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	1.525%
Unsecured Credit Facility | Federal Funds Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.06%
Unsecured Credit Facility | Federal Funds Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	0.225%

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Debt Discount, Underwriting Fees and Legal and Other fees (Detail) $ in Thousands	Jan. 01, 2022 USD ($)
2031 Notes
Debt Instrument [Line Items]
Debt discount	$ 2,430
Underwriting, legal, and other fees	4,829
Total fees	7,259
2026 Notes
Debt Instrument [Line Items]
Debt discount	2,108
Underwriting, legal, and other fees	3,634
Total fees	$ 5,742

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Schedule of Borrowings and Repayments Under Facility (Detail) $ in Thousands	12 Months Ended
	Jan. 01, 2022 USD ($)
Accounts Receivable Securitization Facility
Debt Instrument [Line Items]
Balance as of January 2, 2021	$ 114,000
Payments	(114,000)
Unsecured Credit Facility
Debt Instrument [Line Items]
Balance as of January 2, 2021	50,000
Borrowings	10,000
Payments	$ (60,000)

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Schedule of Net Amount Available Under Facility (Detail) - USD ($)	Jan. 01, 2022	Sep. 23, 2021	Jan. 02, 2021	Jul. 17, 2013
Accounts Receivable Securitization Facility
Debt Instrument [Line Items]
Gross amount available	$ 194,500,000	$ 200,000,000.0		$ 150,000,000.0
Outstanding			$ (114,000,000)
Available for withdrawal	194,500,000
Unsecured Credit Facility
Debt Instrument [Line Items]
Gross amount available	500,000,000
Outstanding			$ (50,000,000)
Letters of credit	(8,400,000)
Available for withdrawal	$ 491,600,000

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Schedule of Highest and Lowest Outstanding Balance Under Facility (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Accounts Receivable Securitization Facility
Debt Instrument [Line Items]
Unsecured credit facility		$ 114,000
Accounts Receivable Securitization Facility | Maximum
Debt Instrument [Line Items]
Unsecured credit facility	$ 114,000
Unsecured Credit Facility
Debt Instrument [Line Items]
Unsecured credit facility		$ 50,000
Unsecured Credit Facility | Maximum
Debt Instrument [Line Items]
Unsecured credit facility	$ 50,000

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Aggregate Maturities of Debt Outstanding (Including Capital Leases) (Detail) $ in Thousands	Jan. 01, 2022 USD ($)
Debt Disclosure [Abstract]
2026	$ 400,000
Thereafter	500,000
Total	$ 900,000

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Reconciliation of Debt Issuance Costs and Debt Discounts to the Net Carrying Value for Each Debt Obligation (Excluding Line of Credit Arrangements) (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Mar. 09, 2021	Jan. 02, 2021	Sep. 28, 2016	Apr. 03, 2012
Debt Instrument [Line Items]
Face Value	$ 900,000		$ 800,000
Debt issuance costs and debt discount	9,391		3,897
Net carrying value	890,609		796,103
2031 Notes
Debt Instrument [Line Items]
Face Value	500,000	$ 500,000
Debt issuance costs and debt discount	6,667
Net carrying value	493,333
2026 Notes
Debt Instrument [Line Items]
Face Value	400,000		400,000	$ 400,000
Debt issuance costs and debt discount	2,724		3,295
Net carrying value	397,276		396,705
2022 Notes
Debt Instrument [Line Items]
Face Value	$ 400,000		400,000		$ 400,000
Debt issuance costs and debt discount			602
Net carrying value			$ 399,398

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Schedule of Deferred Compensation Amount Outstanding (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Debt Disclosure [Abstract]
Deferral elections outstanding	$ 21,319	$ 18,308
Current portion of deferral elections	(1,131)	(1,634)
Long-term portion of deferral elections	$ 20,188	$ 16,674

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Variable Interest Entities - Additional Information (Detail) - USD ($) $ in Millions	Jan. 01, 2022	Jan. 02, 2021
VIE
Variable Interest Entity [Line Items]
Gross distribution rights notes receivable	$ 159.5	$ 171.1

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Fair Value of Financial Instruments - Additional Information (Detail) $ in Millions	12 Months Ended
	Jan. 01, 2022 USD ($) Distributor	Jan. 02, 2021 Distributor
Fair Value Disclosures [Line Items]
Number of independent distributors | Distributor	3,700	4,000
Reserve for distributor notes receivable | $	$ 1.9
Maximum
Fair Value Disclosures [Line Items]
Financing period of distribution rights, years	10 years

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Carrying Value of Distribution Rights Notes Receivable (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract]
Distribution rights notes receivable	$ 183,403	$ 204,839
Current portion recorded in accounts and notes receivable, net	(29,093)	(28,427)
Long-term portion of distribution rights notes receivable	$ 154,310	$ 176,412

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Schedule of Fair Value of Notes (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
2031 Notes
Fair Value Disclosures [Line Items]
Carrying Value	$ 493,333
2031 Notes | Level 2 Inputs
Fair Value Disclosures [Line Items]
Fair Value	494,200
2026 Notes
Fair Value Disclosures [Line Items]
Carrying Value	397,276	$ 396,705
2026 Notes | Level 2 Inputs
Fair Value Disclosures [Line Items]
Fair Value	$ 429,216

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Schedule of Fair Value of Notes (Parenthetical) (Detail)	12 Months Ended
	Jan. 01, 2022
2026 Notes
Fair Value Disclosures [Line Items]
Senior notes due year	2026
2031 Notes
Fair Value Disclosures [Line Items]
Senior notes due year	2031

XML

Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	4 Months Ended	12 Months Ended			228 Months Ended
	Oct. 09, 2021	Apr. 24, 2021	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019	Jan. 01, 2022	Dec. 19, 2002
Class Of Stock [Line Items]
Common stock, shares authorized			500,000,000	500,000,000		500,000,000
Common stock, par value			$ 0.01	$ 0.01		$ 0.01
Preferred stock, shares authorized			1,000,000			1,000,000
Common stock, voting rights			one vote for each share
Stock repurchase plan, shares authorized							74,600,000
Current shares available for repurchase			5,800,000			5,800,000
Purchase of shares under accelerated share repurchase	360,222	46,618	406,840			68,800,000
Agreement to repurchase an aggregate of common stock	$ 8,452	$ 1,058	$ 9,510	$ 783	$ 7,054	$ 652,900
Series A Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares authorized			200,000	200,000		200,000
Preferred stock, par value			$ 100	$ 100		$ 100
Preferred stock, shares issued			0	0		0
Series B Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares authorized			800,000	800,000		800,000
Preferred stock, par value			$ 0.01	$ 0.01		$ 0.01
Preferred stock, shares issued			0	0		0

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Shares Repurchased Under Stock Repurchase Plan (Detail) - USD ($) $ in Thousands	3 Months Ended	4 Months Ended	12 Months Ended			228 Months Ended
	Oct. 09, 2021	Apr. 24, 2021	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019	Jan. 01, 2022
Equity [Abstract]
Total Number of Shares Purchased	360,222	46,618	406,840			68,800,000
Total Cost of Shares Purchased	$ 8,452	$ 1,058	$ 9,510	$ 783	$ 7,054	$ 652,900

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Summary of Dividends Excluding Dividends on Vested Stock-Based Compensation Awards (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Equity [Abstract]
Dividends paid	$ 175,669	$ 167,161	$ 158,626
Dividends paid per share	$ 0.8300	$ 0.7900	$ 0.7500

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Stock-Based Compensation - Additional Information (Detail) - Omnibus Plan	May 21, 2014 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional awards that will be issued under the EPIP	0
Awards granted, authorized amount	8,000,000

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Stock-Based Compensation (Performance-Contingent Total Shareholder Return Shares) - Additional Information (Detail) - USD ($) $ in Millions		12 Months Ended
	May 23, 2019	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019	Dec. 29, 2018
2019 Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares expected payout		137.00%
Performance Contingent Total Shareholders Return Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years	3 years	3 years	2 years
Shares, Forfeited	112,840
Total Shareholders Return
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment award, fair value assumptions, method used		Inputs into the model included the following for the company and comparator companies: (i) TSR from the beginning of the performance cycle through the measurement date; (ii) volatility; (iii) risk-free interest rates; and (iv) the correlation of the comparator companies’ TSR. The inputs are based on historical capital market data.
Total Shareholders Return | Omnibus Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to nonvested restricted stock granted by the EPIP		$ 10.0
Expected weighted-average period to recognize compensation cost (years)		1 year 9 months 21 days

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Performance Contingent Total Shareholder Return Shares (Detail) - Total Shareholders Return	12 Months Ended
	Jan. 01, 2022
90th Percentile
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Restricted Stock Units [Line Items]
Payout as % of Target	200.00%
Percentile	90.00%
70th Percentile
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Restricted Stock Units [Line Items]
Payout as % of Target	150.00%
Percentile	70.00%
50th Percentile
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Restricted Stock Units [Line Items]
Payout as % of Target	100.00%
Percentile	50.00%
30th Percentile
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Restricted Stock Units [Line Items]
Payout as % of Target	50.00%
Percentile	30.00%
Below 30th Percentile
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Restricted Stock Units [Line Items]
Payout as % of Target	0.00%
Percentile	30.00%

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Payout Percentage of Total Shareholder Return Shares (Detail)	12 Months Ended
	Jan. 01, 2022
Total Shareholders Return | 2017 Award | Fiscal 2019
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Restricted Stock Units [Line Items]
Payout percentage	153.00%

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Performance Contingent TSR Shares (Detail) - Total Shareholders Return - Omnibus Plan - $ / shares shares in Thousands				3 Months Ended		4 Months Ended	9 Months Ended	12 Months Ended
	Oct. 06, 2019	Jul. 14, 2019	May 23, 2019	Oct. 03, 2020	Jul. 11, 2020	Apr. 18, 2020	Oct. 09, 2021	Jan. 02, 2021	Dec. 28, 2019	Dec. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Granted	2	5	11	5	2	8	18	365	331	440
Vesting Date	Mar. 01, 2022	Mar. 01, 2022	Mar. 01, 2022	Feb. 28, 2023	Feb. 28, 2023	Feb. 28, 2023	Mar. 01, 2024	Mar. 01, 2024	Feb. 28, 2023	Mar. 01, 2022
Fair Value per Share	$ 22.52	$ 23.32	$ 27.23	$ 24.63	$ 21.97	$ 23.14	$ 24.47	$ 26.75	$ 25.00	$ 21.58

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Stock-Based Compensation (Performance-Contingent Return on Invested Capital Shares) - Additional Information (Detail) - USD ($) $ in Millions		12 Months Ended
	May 23, 2019	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019	Dec. 29, 2018
Return On Invested Capital
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of payout, ROIC above WACC		1.75%
Return On Invested Capital | Range One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of payout, ROIC above WACC		1.75%
Return On Invested Capital | Range Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of payout, ROIC above WACC		3.75%
Return On Invested Capital | Range Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of payout, ROIC above WACC		4.75%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Return on investment target over the three fiscal years immediately preceding the vesting date		1.75%
Percentage of shares that can be earned		0.00%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Return on investment target over the three fiscal years immediately preceding the vesting date		4.75%
Percentage of shares that can be earned		125.00%
Maximum | 2019 Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares being expensed current estimated payout		125.00%
Maximum | 2020 & 2021 Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares being expensed		100.00%
Weighted Average Cost of Capital
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of payout, ROIC above WACC		0.00%
Weighted Average Cost of Capital | Range One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of payout, ROIC above WACC		50.00%
Weighted Average Cost of Capital | Range Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of payout, ROIC above WACC		100.00%
Weighted Average Cost of Capital | Range Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of payout, ROIC above WACC		125.00%
Performance Contingent Return On Invested Capital Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years	3 years	3 years	2 years
Unrecognized compensation cost related to nonvested restricted stock granted by the omnibus plan		$ 8.7
Expected weighted-average period to recognize compensation cost (years)		1 year 9 months 14 days
Performance Contingent Total Shareholders Return Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Forfeited	112,840

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Payout Percentage of ROIC Awards (Detail)	12 Months Ended
	Jan. 01, 2022
Performance Contingent Return On Invested Capital Shares | 2017 Award | Fiscal 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payout percentage	75.00%

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Performance Contingent ROIC Shares (Detail) - Return On Invested Capital - 2019 Award - Omnibus Plan - $ / shares shares in Thousands				3 Months Ended		4 Months Ended	9 Months Ended	12 Months Ended
	Oct. 06, 2019	Jul. 14, 2019	May 23, 2019	Oct. 03, 2020	Jul. 11, 2020	Apr. 18, 2020	Oct. 09, 2021	Jan. 02, 2021	Dec. 28, 2019	Dec. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Granted	2	5	11	5	2	8	18	365	331	440
Vesting Date	Mar. 01, 2022	Mar. 01, 2022	Mar. 01, 2022	Feb. 28, 2023	Feb. 28, 2023	Feb. 28, 2023	Mar. 01, 2024	Mar. 01, 2024	Feb. 28, 2023	Mar. 01, 2022
Fair Value per Share	$ 22.52	$ 23.32	$ 23.08	$ 24.63	$ 21.97	$ 23.14	$ 24.47	$ 22.63	$ 21.74	$ 18.29

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Performance-Contingent Restricted Stock Awards (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividends at vesting	$ 234	$ 109	$ 1,361
Fiscal Year Vested 2019 | 2017 Award Granted
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividends at vesting	1,219
Income tax benefit/(expense) related to share-based payments	936
Fair value at vesting	$ 18,570
Total Shareholders Return | Fiscal Year Vested 2019 | 2017 Award Granted
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares increase/(decrease)	205,686
Return On Invested Capital | Fiscal Year Vested 2019 | 2017 Award Granted
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares increase/(decrease)	(97,131)

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Performance-Contingent Restricted Stock Activity (Detail) - Performance Contingent Restricted Stock - $ / shares shares in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Number of Shares
Number of Shares, Balance at beginning of period	1,264	662	779
Number of Shares, Initial grant	766	693	917
Number of Shares, Vested			(885)
Number of Shares, Forfeitures	(58)	(91)	(258)
Number of shares, Balance at end of period	1,972	1,264	662
Weighted Average Fair Value
Weighted Average Fair Value, Balance at beginning of period	$ 21.85	$ 20.16	$ 21.64
Weighted Average Fair Value, Initial grant	24.66	23.37	20.10
Weighted Average Fair Value, Vested			22.21
Weighted Average Fair Value, Forfeitures	23.27	21.26	20.18
Weighted Average Fair Value, Balance at end of period	$ 22.89	$ 21.85	$ 20.16
Performance Contingent Total Shareholders Return Shares
Number of Shares
Number of Shares, Grant reduction for not achieving the modifier			(206)
Number of Shares, Grant increase (reduction) for not achieving the modifier			206
Weighted Average Fair Value
Weighted Average Fair Value, Grant reduction for not achieving the modifier			$ 23.31
Performance Contingent Return On Invested Capital Shares
Number of Shares
Number of Shares, Grant reduction for not achieving the modifier			(97)
Number of Shares, Grant increase (reduction) for not achieving the modifier			97
Weighted Average Fair Value
Weighted Average Fair Value, Grant reduction for not achieving the modifier			$ 19.97

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Stock-Based Compensation (Performance-Contingent Restricted Stock) - Additional Information (Detail) - Performance Contingent Restricted Stock $ in Millions	12 Months Ended
	Jan. 01, 2022 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to nonvested restricted stock granted by the omnibus plan	$ 18.7
Expected weighted-average period to recognize compensation cost (years)	1 year 9 months 18 days

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Stock-Based Compensation (Time-Based Restricted Stock Units) - Additional Information (Detail) - Time-Based Restricted Stock Units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions		9 Months Ended	12 Months Ended
	May 23, 2019	Oct. 09, 2021	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019	Dec. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted shares issued			262	220	288
Omnibus Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting date			--01-05
Vesting period		3 years	3 years	3 years	3 years	3 years
Restricted shares issued	43	6		256	220	244
Fair Value per Share	$ 23.08	$ 24.79		$ 22.63	$ 21.74	$ 18.29
Omnibus Plan | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted	$ 1.0
Vesting term			This award will vest 100% on the fourth anniversary of the date of grant provided the CEO remains employed by the company during this period.  Vesting will also occur in the event of the CEO’s death or disability, but not his retirement if prior to the fourth anniversary of the grant date.
Restricted shares issued	43,330
Fair Value per Share	$ 23.08

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Time-Based Restricted Stock Units (Detail) - Time-Based Restricted Stock Units - $ / shares shares in Thousands		9 Months Ended	12 Months Ended
	May 23, 2019	Oct. 09, 2021	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019	Dec. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Granted			262	220	288
Omnibus Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Granted	43	6		256	220	244
Vesting Date	May 23, 2023
Vesting period		3 years	3 years	3 years	3 years	3 years
Fair Value per Share	$ 23.08	$ 24.79		$ 22.63	$ 21.74	$ 18.29

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Time-Based Restricted Stock Units Activity (Detail) - Time-Based Restricted Stock Units - $ / shares shares in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Balance at beginning of period	387	270
Shares Granted	262	220	288
Number of Shares, Vested	(137)	(74)
Shares Forfeitures	(20)	(29)	(18)
Number of shares, Balance at end of period	492	387	270
Weighted Average Fair Value, Balance at beginning of period	$ 20.64	$ 19.06
Weighted Average Fair Value, Granted	22.68	21.74	$ 19.01
Weighted Average Fair Value, Vested	19.98	18.29
Weighted Average Fair Value, Forfeitures	21.56	20.14	18.29
Weighted Average Fair Value, Balance at end of period	$ 21.87	$ 20.64	$ 19.06

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Stock-Based Compensation (Deferred Stock) - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Jul. 17, 2021	Jan. 01, 2022	Jan. 02, 2021
Deferred Stock | Non Employee Directors | Annual Grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate shares elected to receive	66,550	13,491	51,840
Issuance of deferred stock awards (in shares)			17,100
Deferred Stock | Non Employee Directors | Annual Grants | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			1 year
Deferred Stock Activity
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to nonvested restricted stock granted by the EPIP		$ 0.6
Expected weighted-average period to recognize compensation cost (years)		4 months 24 days
Total fair value of shares vested		$ 1.5
Retainer Conversion
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Retainers conversion into deferred shares		100.00%
Vesting period		1 year
Director Retainer Deferrals | Deferred Stock | Non Employee Directors | Omnibus Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate shares elected to receive		2,209

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Deferred and Restricted Stock Activity (Detail) - Deferred and restricted stock - $ / shares shares in Thousands		12 Months Ended
		Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Number of Shares
Number of Shares, Balance at beginning of period		52	49	66
Number of Shares, Granted		69	54	49
Number of Shares, Vested		(54)	(51)	(66)
Number of shares, Balance at end of period		67	52	49
Number of shares, Vested and deferred at end of period	[1]	206	198	197
Weighted Average Fair Value
Weighted Average Fair Value, Balance at beginning of period		$ 23.21	$ 22.31	$ 19.93
Weighted Average Fair Value, Granted		23.96	23.15	22.31
Weighted Average Fair Value, Vested		23.19	22.28	19.93
Weighted Average Fair Value, Balance at end of period		$ 24.00	$ 23.21	$ 22.31

[1] The vested and deferred shares at the end of the year include 89,949 shares granted and deferred under the EPIP for Fiscal 2021, 2020 and 2019.

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Deferred and Restricted Stock Activity (Parenthetical) (Detail) - Deferred Stock - EPIP - shares	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	89,949	89,949	89,949
Shares deferred	89,949	89,949	89,949

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Summary of Company's Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 21,343	$ 12,855	$ 7,430
Performance Contingent Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	15,061	8,656	4,767
Time-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	4,747	3,039	1,520
Deferred Stock
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 1,535	$ 1,160	$ 1,143

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Basic and Diluted Earnings per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						4 Months Ended		12 Months Ended
	Jan. 01, 2022	Oct. 09, 2021	Jul. 17, 2021	Jan. 02, 2021	Oct. 03, 2020	Jul. 11, 2020	Apr. 24, 2021	Apr. 18, 2020	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Earnings Per Share [Abstract]
Net income	$ 39,322	$ 38,852	$ 56,358	$ 55,824	$ 44,347	$ 57,919	$ 71,655	$ (5,772)	$ 206,187	$ 152,318	$ 164,538
Basic Earnings Per Common Share:
Basic weighted average shares outstanding per common share									211,840	211,782	211,606
Basic earnings per common share	$ 0.19	$ 0.18	$ 0.27	$ 0.26	$ 0.21	$ 0.27	$ 0.34	$ (0.03)	$ 0.97	$ 0.72	$ 0.78
Diluted Earnings Per Common Share:
Basic weighted average shares outstanding per common share									211,840	211,782	211,606
Add: Shares of common stock assumed issued upon exercise of stock options, vesting of performance-contingent restricted stock and deferred stock									1,193	563	368
Diluted weighted average shares outstanding per common share									213,033	212,345	211,974
Diluted earnings per common share	$ 0.18	$ 0.18	$ 0.26	$ 0.26	$ 0.21	$ 0.27	$ 0.34	$ (0.03)	$ 0.97	$ 0.72	$ 0.78

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Earnings Per Share - Additional Information (Detail) - shares	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Earnings Per Share [Abstract]
Antidilutive Shares excluded from Computation of Earnings Per Share	0	6,234	11,030

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Summary of Company's Balance Sheet Related Pension and Other Postretirement Benefit Plan (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Pension And Other Postretirement Benefit Expense [Abstract]
Noncurrent benefit asset	$ 1,281
Current benefit liability	804	$ 874
Noncurrent benefit liability	7,249	10,049
AOCI, net of tax	$ (3,456)	$ (6,648)

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Postretirement Plans - Additional Information (Detail) - USD ($)	3 Months Ended				12 Months Ended
	Jan. 01, 2022	Oct. 09, 2021	Oct. 03, 2020	Oct. 05, 2019	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Pension and Other Postretirement Benefits Disclosure [Line Items]
Voluntarily contributions made by an employer					$ 0
Cash contributions						$ 0
Non-cash settlement and curtailment charge						108,800,000
Settlement loss	$ 400,000
Expected pension cost for fiscal 2022	700,000				$ 700,000
Postretirement Benefits, minimum years of service for eligibility					10 years
Postretirement Benefits, minimum age for eligibility					60 years
Expected company contribution	548,000				$ 548,000
Expense under plans					$ 1,306,000	$ 109,823,000	$ 3,234,000
Contribution of pension fund in excess of total contribution					5.00%	5.00%	5.00%
Multiemployer plans, minimum contribution					$ 0
Multi-employer pension plan withdrawal liability	2,100,000	$ 2,100,000			$ 2,100,000
Multiemployer plan withdrawal liability of net present value monthly payments period		20 years
Multiemployer plans transition payments payable		$ 1,200,000
Multiemployer plan withdrawal liability estimate payment period		3 years
Minimum
Pension and Other Postretirement Benefits Disclosure [Line Items]
Retiree medical coverage provided					3 years
Maximum
Pension and Other Postretirement Benefits Disclosure [Line Items]
Retiree medical coverage provided					5 years
Pension plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Settlement loss					$ (403,000)	$ (104,473,000)
Actual return on plan assets					$ 1,929,000	$ 15,790,000	$ 51,800,000
Expected long-term rate of return and average annual return on plan assets					5.70%	4.97%	5.34%
Contribution of company to company pension plans					$ 271,000	$ 7,871,000	$ 2,771,000
Last Fifteen Years
Pension and Other Postretirement Benefits Disclosure [Line Items]
Expected long-term rate of return and average annual return on plan assets					6.30%
Non Qualified Pension Plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Expected company contribution	300,000				$ 300,000
Qualified Pension Plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Contribution of company to company pension plans					0
Postretirement Benefit Plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Contribution of company to company pension plans					931,000	575,000
Expected company contribution	500,000				500,000
Contributions by participants					453,000	573,000	700,000
Multiemployer Plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Expense under plans					$ 1,000,000.0	1,200,000	1,100,000
Red Zone
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of funded under multi employer plans					Less than 65 percent
Yellow Zone
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of funded under multi employer plans					Between 65 and less than 80 percent
Green Zone
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of funded under multi employer plans					At least 80 percent
Plan No. 2
Pension and Other Postretirement Benefits Disclosure [Line Items]
Voluntarily contributions made by an employer			$ 7,600,000	$ 2,500,000
Expected long-term rate of return and average annual return on plan assets					5.90%
Plan No. 1
Pension and Other Postretirement Benefits Disclosure [Line Items]
Voluntarily contributions made by an employer						0	0
Required | Pension plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Contribution of company to company pension plans					$ 271,000	271,000	1,040,000
Required | Non Qualified Pension Plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Contribution of company to company pension plans					300,000
Required | Plan No. 2
Pension and Other Postretirement Benefits Disclosure [Line Items]
Expected company contribution	0				0
Discretionary | Pension plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Contribution of company to company pension plans						$ 7,600,000	$ 1,731,000
Discretionary | Plan No. 2
Pension and Other Postretirement Benefits Disclosure [Line Items]
Expected company contribution	$ 1,000,000.0				$ 1,000,000.0

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Components of Net Periodic Benefit (Income) Cost (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jan. 01, 2022	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Defined Benefit Plan Disclosure [Line Items]
Settlement loss	$ (400)
Total recognized in net periodic (benefit) cost and OCI		$ (1,426)	$ (26,486)	$ 6,763
Pension plans
Defined Benefit Plan Disclosure [Line Items]
Service cost		971	854	703
Interest cost		758	2,108	11,930
Expected return on plan assets		(1,867)	(3,933)	(17,147)
Settlement loss		403	104,473
Curtailment loss			4,284
Amortization of prior service cost (credit)		57	115	387
Amortization of net (gain) loss		742	1,747	7,098
Net periodic pension cost (income)		1,064	109,648	2,971
Current year actuarial (gain) loss		(1,288)	(25,515)	11,277
Settlement loss		(403)	(104,473)
Curtailment loss			(4,284)
Amortization of prior service (cost) credit		(57)	(115)	(387)
Amortization of actuarial gain (loss)		(742)	(1,747)	(7,098)
Total recognized in OCI		(2,490)	(136,134)	3,792
Postretirement Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost		337	285	283
Interest cost		119	194	297
Amortization of prior service cost (credit)		(3)	(4)	(41)
Amortization of net (gain) loss		(211)	(300)	(276)
Net periodic pension cost (income)		242	175	263
Current year actuarial (gain) loss		238	643	(575)
Current year prior service credit		(2,214)
Amortization of prior service (cost) credit		3	4	41
Amortization of actuarial gain (loss)		211	300	276
Total recognized in OCI		(1,762)	947	(258)
Total recognized in net periodic (benefit) cost and OCI		$ (1,520)	$ 1,122	$ 5

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Funded Status and Amounts Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022		Jan. 02, 2021		Dec. 28, 2019
Change in benefit obligation:
Actuarial loss (gain)	$ 1,228	[1]	$ (3,718)	[1]	$ (45,979)
Change in plan assets:
Noncurrent asset	1,281
Current liability	(804)		(874)
Noncurrent liability	(7,249)		(10,049)
Pension plans
Change in benefit obligation:
Benefit obligation at beginning of year	37,650		396,906
Service cost	971		854		703
Interest cost	758		2,108		11,930
Actuarial loss (gain)	(1,228)		(13,657)
Benefits paid	(1,662)		(7,762)
Settlements	(1,699)		(340,799)
Benefit obligation at end of year	34,790		37,650		396,906
Change in plan assets:
Fair value of plan assets at beginning of year	34,750		360,675
Actual return on plan assets	1,929		15,790		51,800
Employer contribution	271		7,871		2,771
Benefits paid	(1,662)		(7,762)
Transfer payments			(1,025)
Settlements	(1,699)		(340,799)
Fair value of plan assets at end of year	33,589		34,750		360,675
Fair value of plan assets at end of year	33,589		34,750		360,675
Benefit obligation at end of year	34,790		37,650		396,906
Unfunded status and amount recognized at end of year	(1,201)		(2,900)
Noncurrent asset	1,281
Current liability	(258)		(259)
Noncurrent liability	(2,224)		(2,641)
Amount recognized at end of year	(1,201)		(2,900)
Net actuarial (gain) loss before taxes	7,913		10,347
Prior service cost before taxes	198		255
Amounts recognized in accumulated other comprehensive income (loss)	8,111		10,602
Accumulated benefit obligation at end of year	32,950		36,104
Postretirement Benefit Plans
Change in benefit obligation:
Benefit obligation at beginning of year	8,023		7,477
Service cost	337		285		283
Interest cost	119		194		297
Participant contributions	453		573		700
Actuarial loss (gain)	238		642
Plan amendments	(2,214)
Benefits paid	(1,384)		(1,148)
Benefit obligation at end of year	5,572		8,023		7,477
Change in plan assets:
Employer contribution	931		575
Benefits paid	(1,384)		(1,148)
Participant contributions	453		573		700
Benefit obligation at end of year	5,572		8,023		$ 7,477
Unfunded status and amount recognized at end of year	(5,572)		(8,023)
Current liability	(547)		(615)
Noncurrent liability	(5,025)		(7,408)
Amount recognized at end of year	(5,572)		(8,023)
Net actuarial (gain) loss before taxes	(1,286)		(1,735)
Prior service cost before taxes	(2,216)		(5)
Amounts recognized in accumulated other comprehensive income (loss)	$ (3,502)		$ (1,740)

[1] Includes only losses from plans remaining on or after December 31, 2020

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Schedule of Actuarial Gain/(loss) on Defined Benefit Obligations (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022		Jan. 02, 2021		Dec. 28, 2019
Compensation And Retirement Disclosure [Abstract]
Amount of (Gain)/Loss on Defined Benefit Obligation	$ (1,228)	[1]	$ 3,718	[1]	$ 45,979

[1] Includes only losses from plans remaining on or after December 31, 2020

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Schedule of Actuarial Gain/(loss) on Defined Benefit Obligations (Parenthetical) (Detail)	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Compensation And Retirement Disclosure [Abstract]
defined benefit plan obligations, interest rate basis points	30.00%	60.00%	90.00%

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Weighted Average Assumptions Used for Pension Plans (Detail)	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Pension plans
Defined Benefit Plan Disclosure [Line Items]
Weighted average assumptions used to determine Measurement date	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Weighted average assumptions used to determine benefit obligations, Discount rate	3.06%	2.78%	2.54%
Weighted average assumptions used to determine benefit obligations, Rate of compensation increase	3.00%	3.00%	3.00%
Weighted average assumptions used to determine Measurement date	Jan. 01, 2021	Jan. 01, 2020	Jan. 01, 2019
Weighted average assumptions used to determine net periodic benefit cost/(income), Discount rate	2.78%	2.54%	3.41%
Weighted average assumptions used to determine net periodic benefit cost/(income), Expected return on plan assets	5.70%	4.97%	5.34%
Weighted average assumptions used to determine net periodic benefit cost/(income), Rate of compensation increase	3.00%	3.00%	3.00%
Postretirement Benefit Plans | Benefit Obligations
Defined Benefit Plan Disclosure [Line Items]
Weighted average assumptions used to determine Measurement date	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Weighted average assumptions used to determine benefit obligations, Discount rate	2.60%	2.11%	3.01%
Health care cost trend rate, Initial rate	6.25%	6.50%	6.50%
Health care cost trend rate, Ultimate rate	5.00%	5.00%	5.00%
Health care cost trend rate, Year trend reaches the ultimate rate	2027	2027	2026
Postretirement Benefit Plans | Net Periodic Benefit Cost
Defined Benefit Plan Disclosure [Line Items]
Weighted average assumptions used to determine Measurement date	Jan. 01, 2021	Jan. 01, 2020	Jan. 01, 2019
Weighted average assumptions used to determine net periodic benefit cost/(income), Discount rate	2.11%	3.01%	4.07%
Health care cost trend rate, Initial rate	6.50%	6.50%	6.50%
Health care cost trend rate, Ultimate rate	5.00%	5.00%	5.00%
Health care cost trend rate, Year trend reaches the ultimate rate	2027	2026	2025

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Plans Fair Value of Plan Assets by Asset Class (Detail) - USD ($) $ in Thousands		Jan. 01, 2022	Dec. 31, 2021	Jan. 02, 2021	Dec. 31, 2020	Dec. 28, 2019
Pension plans
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets		$ 33,589	$ 33,589	$ 34,750	$ 34,750	$ 360,675
Short Term Investments And Cash
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			453		546
Common Stocks | International Common Stocks
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			4,708		5,223
Common Stocks | U.S. Common Stocks
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			8,177		8,587
Fixed Income Securities | US Treasury Securities
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			13,514		14,577
Fixed Income Securities | Domestic Corporate Debt Securities
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			6,737		5,877
Accrued (Expenses) Income
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets	[1]				(25)
Other Assets And Liabilities
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets and (liabilities)	[1]				(35)
Level 1 | Pension plans
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			33,589		34,810
Level 1 | Short Term Investments And Cash
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			453		546
Level 1 | Common Stocks | International Common Stocks
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			4,708		5,223
Level 1 | Common Stocks | U.S. Common Stocks
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			8,177		8,587
Level 1 | Fixed Income Securities | US Treasury Securities
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			13,514		14,577
Level 1 | Fixed Income Securities | Domestic Corporate Debt Securities
Schedule of Pension Plan Assets by Fair Value [Line Items]
Fair value of plan assets			$ 6,737		$ 5,877

[1] This class includes accrued interest, dividends, and amounts receivable from asset sales and amounts payable for asset purchases.

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Plan Asset and Target Asset Allocations (Detail) - Plan No. 2	Jan. 01, 2022	Jan. 02, 2021
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Percentage of Plan Assets at the Measurement Date	100.00%	100.00%
Equity Securities
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Percentage of Plan Assets at the Measurement Date	38.00%	40.00%
Equity Securities | Minimum
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Target Allocation 2021	0.00%
Equity Securities | Maximum
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Target Allocation 2021	80.00%
Fixed Income Securities
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Percentage of Plan Assets at the Measurement Date	60.00%	59.00%
Fixed Income Securities | Minimum
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Target Allocation 2021	20.00%
Fixed Income Securities | Maximum
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Target Allocation 2021	100.00%
Short Term Investments And Cash
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Percentage of Plan Assets at the Measurement Date	2.00%	1.00%
Short Term Investments And Cash | Minimum
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Target Allocation 2021	0.00%
Short Term Investments And Cash | Maximum
Schedule Of Defined Benefit Plan Asset Allocation Targets [Line Items]
Target Allocation 2021	10.00%

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Company Contributions (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Defined Contribution and Defined Benefit Plans [Line Items]
Expected company contribution	$ 548
Pension plans
Defined Contribution and Defined Benefit Plans [Line Items]
Contribution of company to company pension plans	271	$ 7,871	$ 2,771
401K (DC Plan)
Defined Contribution and Defined Benefit Plans [Line Items]
Contribution of company to company pension plans	931	575	722
Required | Pension plans
Defined Contribution and Defined Benefit Plans [Line Items]
Contribution of company to company pension plans	$ 271	271	1,040
Discretionary | Pension plans
Defined Contribution and Defined Benefit Plans [Line Items]
Contribution of company to company pension plans		$ 7,600	$ 1,731

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Benefits Expected to be Paid from Plans Assets (Detail) - USD ($) $ in Thousands		12 Months Ended
		Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Pension plans
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Benefits paid		$ 1,662	$ 7,762
2022		4,534
2023		3,027
2024		2,814
2025		2,404
2026		2,150
2027 – 2031		9,423
Pension plans | Includes Plan No 1 and No 2 Single Lump Sum
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Benefits paid	[1]			$ 29,484
Pension plans | Includes Plan No 1 and No 2 Single Lump Sum
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Benefits paid	[2]		348,561
Pension plans | Includes Plan No 1 and No 2 Single Lump Sum
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Benefits paid	[3]	3,361
Postretirement Benefit Plans
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Benefits paid		1,384	1,148
Postretirement Benefit Plans | Employer Gross Contribution
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Benefits paid		931	$ 575	$ 722
2022		548
2023		507
2024		465
2025		486
2026		505
2027 – 2031		$ 2,355

[1] Includes $7.0 million and $0.7 million from Plan No. 1 and Plan No. 2, respectively, paid as lump sums.

[2] Includes $104.5 million and $0.4 million from Plan No. 1 and Plan No. 2, respectively, paid as lump sums.

[3] Includes $1.7 million from Plan No. 2 paid as lump sums.

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Benefits Expected to be Paid from Plans Assets (Parenthetical) (Detail) - Includes Plan No 1 and No 2 Single Lump Sum - USD ($) $ in Millions	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Lump Sums Plan No. 1
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Distributions from existing plan assets			$ 7.0
Lump Sums Plan No. 1
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Distributions from existing plan assets		$ 104.5
Lump Sums Plan No. 2
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Distributions from existing plan assets			$ 0.7
Lump Sums Plan No. 2
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Distributions from existing plan assets		$ 0.4
Lump Sums Plan No. 2
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items]
Distributions from existing plan assets	$ 1.7

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Employer Contributions (Detail) - USD ($) $ in Thousands		12 Months Ended
		Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Defined Benefit Plan Disclosure [Line Items]
EIN		58-2582379
IAM National Pension Fund
Defined Benefit Plan Disclosure [Line Items]
EIN		51-6031295
Pension Plan No.		002
Pension Protection Act		Red	Red
FIP/RP Status Pending/ Implemented		Implemented
Contributions		$ 136	$ 153	$ 111
Surcharge Imposed		Yes
Expiration Date of Collective Bargaining Agreement		Apr. 29, 2022
Retail Wholesale And Department Store International Union And Industry Pension Fund
Defined Benefit Plan Disclosure [Line Items]
EIN		63-0708442
Pension Plan No.		001
Pension Protection Act		Red	Red
FIP/RP Status Pending/ Implemented		Implemented
Contributions		$ 211	$ 157	160
Surcharge Imposed		No
Western Conference Of Teamsters Pension Trust
Defined Benefit Plan Disclosure [Line Items]
EIN	[1]	91-6145047
Pension Plan No.	[1]	001
Pension Protection Act	[1]	Green	Green
FIP/RP Status Pending/ Implemented	[1]	No
Contributions	[1]	$ 266	$ 349	$ 244
Surcharge Imposed	[1]	No
Expiration Date of Collective Bargaining Agreement	[1]	Feb. 04, 2022

[1] The collective bargaining agreement is currently under negotiation.

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Summary of Total Cost and Employer Contributions (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2021	Dec. 28, 2019	Dec. 29, 2018
401(k) Retirement Savings Plans
Defined Benefit Plan Disclosure [Line Items]
Total cost and employer contributions	$ 28,081	$ 27,995	$ 27,336

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Components of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Income Tax Disclosure [Abstract]
Current Taxes: Federal	$ 46,018	$ 64,113	$ 23,397
Current Taxes: State	11,790	15,434	5,539
Current Taxes: Total	57,808	79,547	28,936
Deferred Taxes: Federal	6,946	(26,112)	17,335
Deferred Taxes: State	(169)	(5,042)	1,274
Deferred Income Taxes, Total	6,777	(31,154)	18,609
Income tax expense	$ 64,585	$ 48,393	$ 47,545

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Income Taxes - Additional Information (Detail) - USD ($)	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019	Dec. 29, 2018
Income Taxes [Line Items]
Corporate income tax rate	21.00%	21.00%	21.00%
Gross amount of unrecognized tax benefits	$ 0		$ 306,000	$ 750,000
Unrecognized tax benefit, accrued interest	0	$ 0
Domestic Tax Authority
Income Taxes [Line Items]
Federal net operating loss carryforwards	2,800,000
State and Local Jurisdiction
Income Taxes [Line Items]
State net operating loss carryforwards	4,800,000
Credit carryforwards	$ 5,400,000
Operating loss carryforwards expiration date		Dec. 31, 2041

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Reconciliation of Effective Tax Amount (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Income Tax Disclosure [Abstract]
Tax at U.S. federal income tax rate	$ 56,862	$ 42,149	$ 44,538
State income taxes, net of federal income tax benefit	9,181	8,209	5,384
Net share-based payments (windfalls)	(104)	(80)	(828)
Other	(1,354)	(1,885)	(1,549)
Income tax expense	$ 64,585	$ 48,393	$ 47,545

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Components of Deferred Tax Assets and (Liabilities) (Detail) - USD ($) $ in Thousands	Jan. 01, 2022	Jan. 02, 2021
Income Tax Disclosure [Abstract]
Self-insurance	$ 5,502	$ 4,806
Compensation and employee benefits	8,816	7,698
Deferred income	4,948	5,988
Loss and credit carryforwards	12,990	13,026
Equity-based compensation	6,797	3,977
Legal accrual	6,514	2,867
Deferred payroll tax under CARES act	4,100	7,525
Pension and postretirement benefits	1,722	2,390
Financing and operating lease right-of-use liabilities	77,422	88,816
Other	6,642	7,028
Valuation allowance	(1,030)	(1,030)
Deferred tax assets	134,423	143,091
Depreciation	(71,041)	(69,056)
Intangibles	(114,882)	(109,824)
Financing and operating lease right-of-use assets	(75,233)	(85,720)
Hedging	(2,015)	(4,357)
Other	(5,009)	(2,393)
Deferred tax liabilities	(268,180)	(271,350)
Net deferred tax liability	$ (133,757)	$ (128,259)

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Reconciliation of Total Amounts of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2021	Dec. 28, 2019
Income Tax Disclosure [Abstract]
Unrecognized tax benefit at beginning of fiscal year	$ 306	$ 750
Lapses of statutes of limitations	$ (306)	(444)
Unrecognized tax benefit at end of fiscal year		$ 306

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Commitments and Contingencies - Additional Information (Detail) $ in Thousands							1 Months Ended		12 Months Ended
	Oct. 27, 2021 USD ($)	Oct. 21, 2021 USD ($) DistributionTerritory	Dec. 29, 2020 USD ($)	Nov. 13, 2020 USD ($)	Sep. 29, 2020 USD ($)	Sep. 07, 2018 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jan. 01, 2022 USD ($) DistributionTerritory Lawsuits	Jan. 02, 2021 USD ($)	Jul. 13, 2019 USD ($)
Loss Contingencies [Line Items]
Self-insurance reserves, current liabilities									$ 29,828	$ 29,367
Alleged complaints | Lawsuits									24
Legal settlement						$ 9,000
Number of distribution territories repurchased | DistributionTerritory									75
Legal settlement, amount paid							$ 3,500	$ 4,200
Remainder of legal settlement funds											$ 1,300
Settlement Funds
Loss Contingencies [Line Items]
Legal settlement						5,400
Attorneys Fees
Loss Contingencies [Line Items]
Legal settlement						$ 3,600
Class and / or Collective action treatment
Loss Contingencies [Line Items]
Alleged complaints | Lawsuits									8
Individual claims or do not seek class or collective action treatment or, in cases class treatment was sought
Loss Contingencies [Line Items]
Alleged complaints | Lawsuits									16
Plaintiffs' motions for class certification
Loss Contingencies [Line Items]
Alleged complaints | Lawsuits									4
Noll Maine
Loss Contingencies [Line Items]
Lawsuit filing date									Dec. 03, 2015
Legal settlement		$ 16,500
Number of distribution territories repurchased | DistributionTerritory		75
Loss contingency, estimated cost		$ 6,600
Noll Maine | Other Accrued Liabilities
Loss Contingencies [Line Items]
Loss contingency, estimated cost		4,700
Noll Maine | Settlement Funds
Loss Contingencies [Line Items]
Legal settlement		9,000
Noll Maine | Attorneys Fees
Loss Contingencies [Line Items]
Legal settlement		$ 7,500
Noll Maine
Loss Contingencies [Line Items]
Lawsuit filing date									Oct. 21, 2015
Coronado Mexico
Loss Contingencies [Line Items]
Lawsuit filing date									Apr. 27, 2016
Martins Florida
Loss Contingencies [Line Items]
Lawsuit filing date									Nov. 08, 2016
Caddick - Pennsylvania
Loss Contingencies [Line Items]
Lawsuit filing date	May 15, 2019
Legal settlement	$ 3,150
Rosinbaum - NorthCarolina
Loss Contingencies [Line Items]
Lawsuit filing date			Dec. 01, 2015
Legal settlement			$ 8,300
Carr - Pennsylvania
Loss Contingencies [Line Items]
Lawsuit filing date					Dec. 01, 2015
Legal settlement					$ 13,250
Boulange Pennsylvania
Loss Contingencies [Line Items]
Lawsuit filing date									Mar. 25, 2016
Neff - Vermont
Loss Contingencies [Line Items]
Lawsuit filing date				Dec. 02, 2015
Legal settlement				$ 7,600
Green Tennessee
Loss Contingencies [Line Items]
Lawsuit filing date									Feb. 01, 2019

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Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												4 Months Ended				12 Months Ended
	Jan. 01, 2022		Oct. 09, 2021		Jul. 17, 2021		Jan. 02, 2021		Oct. 03, 2020		Jul. 11, 2020		Apr. 24, 2021		Apr. 18, 2020		Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Quarterly Financial Information Disclosure [Abstract]
Sales	$ 983,490		$ 1,027,800		$ 1,017,309		$ 1,023,036		$ 989,650		$ 1,025,861		$ 1,302,168		$ 1,349,444		$ 4,330,767	$ 4,387,991	$ 4,123,974
Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately below)	512,531	[1]	515,078	[1]	504,062	[1]	521,577	[1]	497,659	[1]	506,033	[1]	643,576	[1]	670,873	[1]	2,175,247	2,196,142	2,155,709
Net income (loss)	$ 39,322		$ 38,852		$ 56,358		$ 55,824		$ 44,347		$ 57,919		$ 71,655		$ (5,772)		$ 206,187	$ 152,318	$ 164,538
Basic net income (loss) per share	$ 0.19		$ 0.18		$ 0.27		$ 0.26		$ 0.21		$ 0.27		$ 0.34		$ (0.03)		$ 0.97	$ 0.72	$ 0.78
Diluted net income (loss) per share	$ 0.18		$ 0.18		$ 0.26		$ 0.26		$ 0.21		$ 0.27		$ 0.34		$ (0.03)		$ 0.97	$ 0.72	$ 0.78

[1] The company does not report gross margin.  This line item presents our material, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) under an alternative presentation.

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Financial Results that Impact Comparability by Quarter (Detail) - USD ($) $ in Thousands	3 Months Ended					4 Months Ended		12 Months Ended
	Jan. 01, 2022	Oct. 09, 2021	Jan. 02, 2021	Oct. 03, 2020	Jul. 11, 2020	Apr. 24, 2021	Apr. 18, 2020	Jan. 01, 2022	Jan. 02, 2021	Dec. 28, 2019
Quarterly Financial Information Disclosure [Abstract]
Loss (recovery) on inferior ingredients	$ 1,772	$ (950)	$ 107			$ 122		$ 944	$ 107	$ (37)
Multi-employer pension plan withdrawal costs		$ 3,300						3,300
Restructuring and related impairment charges			4,848	$ 20,100	$ 10,535				35,483	$ 23,524
Pension plan settlement and curtailment loss (gain)	$ 403		$ (297)	$ (7,153)			$ 116,207	$ 403	$ 108,757

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Subsequent Events - Additional Information (Detail) - Dividend Declared	Feb. 18, 2022 $ / shares
Subsequent Event [Line Items]
Dividend declaration date	Feb. 18, 2022
Dividend per share on common stock	$ 0.21
Dividend to be paid date	Mar. 18, 2022
Dividend record date	Mar. 04, 2022