Dear Shareholder: This past year, the Flowers team made great strides in integrating the new business we have added over the past two years. We also WRRNVWHSVWRSRVLWLRQWKHFRPSDQ\IRUSUR¿WDEOHJURZWKDVZHPDQDJHGRSHUDWLQJH[SHQVHVDQGLPSURYHGPDQXIDFWXULQJHI¿FLHQFLHV DGGHGFDSDFLW\LQWURGXFHGLQQRYDWLYHSURGXFWVGHYHORSHGH[SDQVLRQPDUNHWVSDLGGRZQGHEWLQFUHDVHGWKHGLYLGHQGUDWHDQG repurchased shares. 2XUPDQXIDFWXULQJWHDPIRFXVHGRQHI¿FLHQFLHVUHGXFLQJGRZQWLPHDQGLPSURYLQJWKURXJKSXW$VDUHVXOWSURGXFWLRQPHWULFV improved over prior year and—combined with lower input cost—translated to improved gross margins. We invested in technology WKDWHQDEOHGXVWREHWWHUDQWLFLSDWHFRQVXPHUGHPDQGVXSSRUWRXUH[SDQGLQJGLUHFWVWRU\GHOLYHU\ '6' WHUULWRULHVDQGLPSURYHWKH freshness and quality of our products. 2XU'6'QHWZRUNZLWKVDOHVRIELOOLRQRURIWRWDOVDOHVKDVDFFHVVWRDSSUR[LPDWHO\RIWKH86SRSXODWLRQ:H KDYHRSSRUWXQLW\WRH[SDQGWKHUHDFKRIRXUIUHVKEDNHU\IRRGVLQWKHPDUNHWVZH¶YHPRVWUHFHQWO\HQWHUHGDQGWRJURZRXUVWURQJ PDUNHWVKDUHLQRXUFRUHPDUNHWVDVZHOHYHUDJHRXUH[LVWLQJEUDQGVDQGLQWURGXFHQHZSURGXFWV0HUJHUDQGDFTXLVLWLRQDFWLYLW\LQ WKHIRRGFDWHJRU\FRQWLQXHVDQGZHDUHPRQLWRULQJWKHODQGVFDSHIRURSSRUWXQLWLHVWKDWZLOOH[WHQGRXUJHRJUDSKLFUHDFKHQKDQFH our product offerings, and strengthen our company. Our warehouse distribution segment, with 2014 sales of $593.4 million, or 16% RIWRWDOVDOHVGHOLYHUVIUR]HQDQGVKHOIVWDEOHIUHVKSURGXFWVWRIRRGVHUYLFHYHQGLQJDQGUHWDLOFXVWRPHUV¶ZDUHKRXVHVQDWLRQZLGH ,QZHDGGHGDEXQOLQHDWRXUEDNHU\LQ+HQGHUVRQ1HYDQGRSHQHGDEUHDGOLQHDWRXU0RGHVWR&DOLIEDNHU\WRDGGQHHGHG FDSDFLW\LQRXUPRVWZHVWHUQPDUNHWV:HDOVRRSHQHGDEDNHU\LQ.QR[YLOOH7HQQUHGXFLQJWUDQVSRUWDWLRQFRVWVDQGLPSURYLQJ SURGXFWIUHVKQHVVLQQHDUE\H[SDQVLRQPDUNHWV,QWKHVXPPHUZHH[SDQGHGGLVWULEXWLRQLQWRQRUWKHUQ2KLRZKHUHWKHVWUHQJWKRI the Wonder brand opened doors for our Nature’s Own, Cobblestone Bread Co., and Tastykake brands to reach new consumers. We FRQWLQXHGWRPDNHVLJQL¿FDQWSURJUHVVZLWKWKHLQWHJUDWLRQRI/HSDJH%DNHULHVD1HZ(QJODQGEDNHUZHDFTXLUHGLQ Nature’s Own,RXUWRSEUDQGZLWKUHWDLOVDOHVRIELOOLRQGXULQJWKH\HDULVWKHEHVWVHOOLQJORDIEUHDGEUDQGLQWKH862WKHU top bread brands, including Wonder, Merita, and Home Pride,VXSSRUWHGJURZWKLQRXUH[SDQVLRQPDUNHWV7KURXJKRUJDQLFDQGFRUH market growth and future acquisitions, we intend to build our market share in fresh packaged breads. While our overall branded snack cakes sales were down this year due to the competitive environment, our Tastykake brand posted VOLJKWJURZWK:HDUHH[FLWHGDERXWWKHRSSRUWXQLW\IRUWKLVLFRQLFEUDQGZKLFKFHOHEUDWHGLWVWKDQQLYHUVDU\LQ,QZH H[SHFWWRLQWURGXFHTastykakeLQWRQHZ'6'PDUNHWVDQGODXQFKH[FLWLQJQHZYDULHWLHVRIEUDQGHGVQDFNFDNHV &RQVXPHUVH[SHFWLQQRYDWLRQIURPRXUEUDQGVDQGQHZSURGXFWVDUHDNH\WRGULYLQJJURZWK,QPLGZHODXQFKHGCobblestone Bread Co.DOLQHRISUHPLXPUHVWDXUDQWTXDOLW\EUHDGVDQGUROOVWDUJHWLQJPLOOHQQLDOVDQGIRRGHQWKXVLDVWV:HDUHSOHDVHGZLWKWKH EUDQG¶VSHUIRUPDQFHDQGLQWHQGWRLQWURGXFHQHZLWHPVLQ2QWKHVQDFNFDNHLQQRYDWLRQIURQWZHLQWURGXFHGDQHZORRNWRRXU Tastykake packaging, and had positive consumer response to limited edition Tastykake6DOWHG&DUDPHODQG5HG9HOYHW0LQL'RQXWV .H\UHVXOWVIRUWKHZHHN¿VFDOLQFOXGHVDOHVRIELOOLRQDQLQFUHDVHRIFRPSDUHGWRWKHZHHNSULRU\HDU adjusted net income of $192.1 million, and adjusted net earnings per share of $0.90.* During the year, the company paid down debt E\PLOOLRQSDLGGLYLGHQGVWRWDOLQJPLOOLRQDQGUHSXUFKDVHGVKDUHVRIFRPPRQVWRFNIRUPLOOLRQ :HDUHSURXGRIRXUDFFRPSOLVKPHQWVLQDQGORRNIRUZDUGWRH[SDQGLQJRXURYHUDOOPDUNHWVKDUHDQGRXU'6'WHUULWRU\ZKLOH JURZLQJRXUEUDQGV)RUWKHZHHN¿VFDODKHDGZHH[SHFWVDOHVWREHWRELOOLRQDQGHDUQLQJVSHUVKDUHWREH $0.96 to $1.01. $VDOZD\VZHUHPDLQIRFXVHGRQWKHORQJWHUPORRNLQJWRJURZVDOHVDQGUHZDUGRXUVKDUHKROGHUVE\OHYHUDJLQJFRQVXPHU DZDUHQHVVRIRXUEUDQGVDQGIXOO\GHYHORSLQJRXU'6'DQGRXUZDUHKRXVHGLVWULEXWLRQSODWIRUPV:HZLOOZRUNWR¿QGRSSRUWXQLWLHV WRJURZLQRXUFRUHDQGH[SDQVLRQPDUNHWVDVZHOHYHUDJHRXUEUDQGVWUHQJWKHI¿FLHQWEDNHULHVGLVWULEXWLRQQHWZRUNVFXVWRPHU UHODWLRQVKLSVDQGPRVWLPSRUWDQWO\RXUPRWLYDWHGDQGH[SHULHQFHGWHDP :HH[WHQGRXUWKDQNVWRWKH)ORZHUVWHDPIRUWKHLUHIIRUWVLQWRRXUERDUGRIGLUHFWRUVIRUWKHLURYHUVLJKWDQGJXLGDQFHDQGWR \RXRXUVKDUHKROGHUVIRU\RXUFRQWLQXHGFRQ¿GHQFHLQRXUFRPSDQ\ Allen L. Shiver George E. Deese President and CEO Chairman of the Board In keeping with the company’s management succession plan, Flowers Foods announced the retirement of George E. Deese as executive chairman of the board at the end of 2014. Mr. Deese, who has more than 50 years of service with the company, serves as non-executive chairman of the board. In July 2014, the company announced the appointment of Bradley K. Alexander as executive vice president and chief operating officer of Flowers Foods. Mr. Alexander has worked for the company since 1981 in sales, operations, and marketing and has served as president of Flowers Bakeries, the company’s largest business segment. * Adjusted net income and adjusted net earnings per share are non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the nearest comparable GAAP measure is included in the following pages. Flowers Foods’ Guiding Principles: Integrity, Service, Quality, Commitment NYSE: FLO www.flowersfoods.com Business: The second-largest producer and marketer of packaged bakery foods in the U.S. 2014* sales: $3.7 billion Products: Breads, buns, rolls, snack cakes, tortillas Top company brands: Nature’s Own, Wonder, Whitewheat, Cobblestone Bread Co., Tastykake, Mrs. Freshley’s Top regional/franchised brands: Sunbeam, Merita, Home Pride, Butternut, Bunny, Captain John Derst’s, Evangeline Maid, ButterKrust, Mary Jane, Betsy Ross, Roman Meal, Country Kitchen, Barowsky’s Organics Market: Retail and foodservice. Fresh bakery foods available to approximately 81% of the U.S. population in the Northeast, South, Southern Midwest, Southwest, and California through a network of independent distributors; ĨƌŽnjĞŶďĂŬĞƌLJŝƚĞŵƐĂŶĚƐŶĂĐŬĐĂŬĞƐĚĞůŝǀĞƌĞĚƚŽĐƵƐƚŽŵĞƌƐ͛ǁĂƌĞŚŽƵƐĞƐŶĂƚŝŽŶǁŝĚĞ Bakeries:ϰϲŚŝŐŚůLJĞĨĨŝĐŝĞŶƚďĂŬĞƌŝĞƐŝŶϭϲƐƚĂƚĞƐ 2014 Highlights: • KƉĞŶĞĚĂďƌĞĂĚůŝŶĞŝŶDŽĚĞƐƚŽ͕ĂůŝĨ͘ŝŶDĂƌĐŚϮϬϭϰƚŽƐĞƌǀĞƚŚĞEŽƌƚŚĞƌŶ California market with Nature’s Own, Wonder, Home Pride, and Sara Lee breads; Fresh/DSD added sales and distribution functions Frozen/Warehouse • KƉĞŶĞĚĂďƌĞĂĚůŝŶĞŝŶ<ŶŽdžǀŝůůĞ͕dĞŶŶ͘ŝŶDĂLJϮϬϭϰƚŽƉƌŽĚƵĐĞNature’s Own, Stars = bakery locations Wonder, and Merita bread for Tennessee, North and South Carolina, and Virginia markets Product mix 75% fresh bread, buns, rolls, tortillas; 18% fresh snack cakes, pastries; • KƉĞŶĞĚĂďƵŶůŝŶĞŝŶ,ĞŶĚĞƌƐŽŶ͕EĞǀĂĚĂŝŶ:ƵŶĞϮϬϭϰ ϲйĨƌŽnjĞŶďƌĞĂĚƐ͕ƌŽůůƐ͖ϭйŵŝdžĞƐ • Launched Cobblestone Bread Co., a brand of restaurant-quality specialty breads, buns, Sales channels 39% supermarket/drug; 28% and rolls targeted to millennials and food enthusiasts of all ages mass merchandiser/discount; 22% foodservice; ϲйĐŽŶǀĞŶŝĞŶĐĞƐƚŽƌĞƐ͖ϱйŽƚŚĞƌ DistributionϴϰйĚŝƌĞĐƚƐƚŽƌĞĚĞůŝǀĞƌLJ Financial highlights ;^^ĞŐŵĞŶƚͿ͖ϭϲйĚŝƌĞĐƚƚŽĐƵƐƚŽŵĞƌƐ͛ 000s omitted except per share data; for fiscal year ending ǁĂƌĞŚŽƵƐĞƐ;tĂƌĞŚŽƵƐĞ^ĞŐŵĞŶƚͿ Other facts Dec. 28,2013 Jan. 3, 2015* % change • &ƌŽŵϮϬϬϰͲϮϬϭϰ͕ƚŚĞ^^ĞŐŵĞŶƚĞdžƚĞŶĚĞĚ ƌĞĂĐŚƚŽĂŶĂĚĚŝƚŝŽŶĂůϭϰϯ͘ϰŵŝůůŝŽŶƉĞŽƉůĞ͘ ^ĂůĞƐ Ψϯ͕ϳϯϮ͕ϲϭϲ $3,748,973 Ϭ͘ϰй • Acquisitions account for $1.7 billion in Adjusted net income** $192,288 $192,101 ;Ϭ͘ϭͿй revenue over the past 10 years. Adjusted net income per diluted share** $0.91 $0.90 ;ϭ͘ϭͿй • Nature’s Own is the #1 ĂƐŚĚŝǀŝĚĞŶĚƐƉĞƌĐŽŵŵŽŶƐŚĂƌĞ ΨϬ͘ϰϰϰ $0.485 9.2% loaf bread brand in the U.S.†† *53-week year ΎΎdžĐůƵĚŝŶŐĂďĂƌŐĂŝŶƉƵƌĐŚĂƐĞĂĐĐŽƵŶƟŶŐŐĂŝŶĂŶĚĂĐƋƵŝƐŝƟŽŶͲƌĞůĂƚĞĚĐŽƐƚƐŝŶϮϬϭϯĂŶĚĂƉĞŶƐŝŽŶ Long-term growth objectives ƐĞƩůĞŵĞŶƚůŽƐƐ͕ĂƐƐĞƚŝŵƉĂŝƌŵĞŶƚ͕ĂŶĚƚŽƌƟůůĂĨĂĐŝůŝƚLJĚŝǀĞƐƟƚƵƌĞŝŶϮϬϭϰ͘^ĞĞŶŽŶͲ'WƌĞĐŽŶĐŝůŝĂƟŽŶƐ • Sales growth 5% - 10%** below and on next page. • EBITDA margin 11% - 13% • EPS double-digit growth Reconciliation of net income per diluted share • ROI 13% - 15% to adjusted net income per diluted share The FLOWERS WAY 2013 2014* • Grow sales Net income per diluted share $1.09 $0.82 • Invest wisely ƐƐĞƚŝŵƉĂŝƌŵĞŶƚͬĚŝǀĞƐƟƚƵƌĞ Ͷ $0.03 • Give extraordinary service ĐƋƵŝƐŝƟŽŶͲƌĞůĂƚĞĚĐŽƐƚƐ ΨϬ͘Ϭϲ — • Bake smart WĞŶƐŝŽŶƐĞƩůĞŵĞŶƚůŽƐƐ Ͷ $0.05 • Appreciate team ĂƌŐĂŝŶƉƵƌĐŚĂƐĞĂĐĐŽƵŶƟŶŐŐĂŝŶ ;ΨϬ͘ϮϰͿ — Adjusted net income per diluted share $0.91 $0.90 *53-week year ΎΎ/ŶĐůƵĚĞƐŽƌŐĂŶŝĐŐƌŽǁƚŚĂŶĚĨƵƚƵƌĞĂĐƋƵŝƐŝƟŽŶƐ -1.1% †IRi *53-week year 5-year performance ΎϱϯͲǁĞĞŬLJĞĂƌΎΎ^ĞĞŶŽŶͲ'WƌĞĐŽŶĐŝůŝĂƟŽŶďĞůŽǁ Sales (in billions) Adjusted net income** (in millions) ϮϬϭϬͲϮϬϭϰĐŽŵƉŽƵŶĚĂŶŶƵĂůŐƌŽǁƚŚƌĂƚĞ͗ϳ͘ϳй ϮϬϭϬͲϮϬϭϰĐŽŵƉŽƵŶĚĂŶŶƵĂůŐƌŽǁƚŚƌĂƚĞ͗ϴ͘ϲй $3.733 $3.749 $3.031 $192.3 $192.1 $2.759 $2.561 $142.4 $137.0 $131.0 -1.0% +7.8% +9.8% +23.1% +0.4% % of sales 5.3% 4.7% 4.7% 5.1% 5.1% 2010 2011 2012 2013 2014* 2010 2011 2012 2013 2014* DĂƌŬĞƚĐĂƉŝƚĂůŝnjĂƟŽŶ (in billions) Adjusted EBITDA** (in millions) ϮϬϭϬͲϮϬϭϰĐŽŵƉŽƵŶĚĂŶŶƵĂůŐƌŽǁƚŚƌĂƚĞ͗ϭϯ͘Ϭй ϮϬϭϬͲϮϬϭϰĐŽŵƉŽƵŶĚĂŶŶƵĂůŐƌŽǁƚŚƌĂƚĞ͗ϴ͘ϲй $4.449 $429.0 $4.007 $421.4 $3.172 $330.8 $291.0 $294.3 $2.439 $2.581 +12.3% +5.8% +22.9% +40.2% -9.9% % of sales 11.4% 10.7% 10.9% 11.3% 11.4% 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014* Reconciliation of net income to adjusted net income (in thousands) *53-week year 2010 2011 2012 2013 2014* EĞƚŝŶĐŽŵĞ Ψϭϯϳ͕Ϭϰϳ ΨϭϮϯ͕ϰϮϴ Ψϭϯϲ͕ϭϮϭ ΨϮϯϬ͕ϴϵϰ $175,739 ƐƐĞƚŝŵƉĂŝƌŵĞŶƚͬĚŝǀĞƐƟƚƵƌĞ Ͷ Ͷ Ͷ Ͷ $6,452 DĂŶƵĨĂĐƚƵƌŝŶŐĨĂĐŝůŝƚLJĐůŽƐƵƌĞĐŽƐƚƐ Ͷ Ψϯ͕Ϯϱϲ Ͷ Ͷ — WĞŶƐŝŽŶƐĞƩůĞŵĞŶƚůŽƐƐ Ͷ Ͷ Ͷ Ͷ $9,910 ĐƋƵŝƐŝƟŽŶͲƌĞůĂƚĞĚĐŽƐƚƐ Ͷ Ψϰ͕Ϯϴϯ Ψϲ͕ϮϰϮ Ψϭϭ͕ϰϲϱ — ĂƌŐĂŝŶƉƵƌĐŚĂƐĞĂĐĐŽƵŶƟŶŐŐĂŝŶ Ͷ Ͷ Ͷ ;ΨϱϬ͕ϬϳϭͿ — ĚũƵƐƚĞĚŶĞƚŝŶĐŽŵĞ Ψϭϯϳ͕Ϭϰϳ ΨϭϯϬ͕ϵϲϳ ΨϭϰϮ͕ϯϲϯ ΨϭϵϮ͕Ϯϴϴ $192,101 Reconciliation of net income to adjusted EBITDA (in thousands) *53-week year 2010 2011 2012 2013 2014* EĞƚŝŶĐŽŵĞ Ψϭϯϳ͕Ϭϰϳ ΨϭϮϯ͕ϰϮϴ Ψϭϯϲ͕ϭϮϭ ΨϮϯϬ͕ϴϵϰ $175,739 /ŶĐŽŵĞƚĂdžĞdžƉĞŶƐĞ Ψϳϯ͕ϯϯϯ Ψϲϴ͕ϱϯϴ ΨϳϮ͕ϲϱϭ Ψϵϭ͕ϰϳϵ $92,315 /ŶƚĞƌĞƐƚ;ŝŶĐŽŵĞͿĞdžƉĞŶƐĞ͕ŶĞƚ ;Ψϰ͕ϱϭϴͿ