For the Quarterly Period Ended
|
|
|
|
Commission File Number
|
January 29, 2017
|
|
|
|
1-3822
|
New Jersey
|
21-0419870
|
State of Incorporation
|
I.R.S. Employer Identification No.
|
Large accelerated filer
þ
|
Accelerated filer
☐
|
Non-accelerated filer
☐
(Do not check if a smaller reporting company)
|
Smaller reporting company
☐
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
||||||||
Net sales
|
$
|
2,171
|
|
|
$
|
2,201
|
|
|
$
|
4,373
|
|
|
$
|
4,404
|
|
Costs and expenses
|
|
|
|
|
|
|
|
||||||||
Cost of products sold
|
1,346
|
|
|
1,382
|
|
|
2,707
|
|
|
2,830
|
|
||||
Marketing and selling expenses
|
237
|
|
|
223
|
|
|
465
|
|
|
449
|
|
||||
Administrative expenses
|
139
|
|
|
146
|
|
|
262
|
|
|
302
|
|
||||
Research and development expenses
|
25
|
|
|
23
|
|
|
51
|
|
|
55
|
|
||||
Other expenses / (income)
|
220
|
|
|
4
|
|
|
226
|
|
|
9
|
|
||||
Restructuring charges
|
(1
|
)
|
|
9
|
|
|
—
|
|
|
30
|
|
||||
Total costs and expenses
|
1,966
|
|
|
1,787
|
|
|
3,711
|
|
|
3,675
|
|
||||
Earnings before interest and taxes
|
205
|
|
|
414
|
|
|
662
|
|
|
729
|
|
||||
Interest expense
|
29
|
|
|
28
|
|
|
58
|
|
|
57
|
|
||||
Interest income
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Earnings before taxes
|
177
|
|
|
387
|
|
|
606
|
|
|
674
|
|
||||
Taxes on earnings
|
76
|
|
|
122
|
|
|
213
|
|
|
215
|
|
||||
Net earnings
|
101
|
|
|
265
|
|
|
393
|
|
|
459
|
|
||||
Less: Net earnings (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net earnings attributable to Campbell Soup Company
|
$
|
101
|
|
|
$
|
265
|
|
|
$
|
393
|
|
|
$
|
459
|
|
Per Share — Basic
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to Campbell Soup Company
|
$
|
.33
|
|
|
$
|
.85
|
|
|
$
|
1.28
|
|
|
$
|
1.48
|
|
Dividends
|
$
|
.35
|
|
|
$
|
.312
|
|
|
$
|
.70
|
|
|
$
|
.624
|
|
Weighted average shares outstanding — basic
|
306
|
|
|
310
|
|
|
307
|
|
|
310
|
|
||||
Per Share — Assuming Dilution
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to Campbell Soup Company
|
$
|
.33
|
|
|
$
|
.85
|
|
|
$
|
1.27
|
|
|
$
|
1.47
|
|
Weighted average shares outstanding — assuming dilution
|
309
|
|
|
312
|
|
|
309
|
|
|
312
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
January 29, 2017
|
|
January 31, 2016
|
||||||||||||||||||||
|
Pre-tax amount
|
|
Tax (expense) benefit
|
|
After-tax amount
|
|
Pre-tax amount
|
|
Tax (expense) benefit
|
|
After-tax amount
|
||||||||||||
Net earnings
|
|
|
|
|
$
|
101
|
|
|
|
|
|
|
$
|
265
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
$
|
(16
|
)
|
|
$
|
—
|
|
|
(16
|
)
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
(17
|
)
|
||
Cash-flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gains (losses) arising during the period
|
17
|
|
|
(6
|
)
|
|
11
|
|
|
(2
|
)
|
|
1
|
|
|
(1
|
)
|
||||||
Reclassification adjustment for (gains) losses included in net earnings
|
5
|
|
|
(2
|
)
|
|
3
|
|
|
(4
|
)
|
|
2
|
|
|
(2
|
)
|
||||||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassification of prior service credit included in net earnings
|
(7
|
)
|
|
3
|
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
Other comprehensive income (loss)
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
(6
|
)
|
|
$
|
(24
|
)
|
|
$
|
3
|
|
|
(21
|
)
|
||
Total comprehensive income (loss)
|
|
|
|
|
$
|
95
|
|
|
|
|
|
|
$
|
244
|
|
||||||||
Total comprehensive income (loss) attributable to noncontrolling interests
|
|
|
|
|
—
|
|
|
|
|
|
|
2
|
|
||||||||||
Total comprehensive income (loss) attributable to Campbell Soup Company
|
|
|
|
|
$
|
95
|
|
|
|
|
|
|
$
|
242
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended
|
||||||||||||||||||||||
|
January 29, 2017
|
|
January 31, 2016
|
||||||||||||||||||||
|
Pre-tax amount
|
|
Tax (expense) benefit
|
|
After-tax amount
|
|
Pre-tax amount
|
|
Tax (expense) benefit
|
|
After-tax amount
|
||||||||||||
Net earnings
|
|
|
|
|
$
|
393
|
|
|
|
|
|
|
$
|
459
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
$
|
(24
|
)
|
|
$
|
—
|
|
|
(24
|
)
|
|
$
|
(43
|
)
|
|
$
|
1
|
|
|
(42
|
)
|
||
Cash-flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gains (losses) arising during the period
|
30
|
|
|
(11
|
)
|
|
19
|
|
|
(10
|
)
|
|
4
|
|
|
(6
|
)
|
||||||
Reclassification adjustment for (gains) losses included in net earnings
|
7
|
|
|
(2
|
)
|
|
5
|
|
|
(6
|
)
|
|
2
|
|
|
(4
|
)
|
||||||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassification of prior service credit included in net earnings
|
(13
|
)
|
|
5
|
|
|
(8
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
Other comprehensive income (loss)
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
(8
|
)
|
|
$
|
(60
|
)
|
|
$
|
7
|
|
|
(53
|
)
|
||
Total comprehensive income (loss)
|
|
|
|
|
$
|
385
|
|
|
|
|
|
|
$
|
406
|
|
||||||||
Total comprehensive income (loss) attributable to noncontrolling interests
|
|
|
|
|
1
|
|
|
|
|
|
|
2
|
|
||||||||||
Total comprehensive income (loss) attributable to Campbell Soup Company
|
|
|
|
|
$
|
384
|
|
|
|
|
|
|
$
|
404
|
|
|
January 29,
2017 |
|
July 31,
2016 |
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
309
|
|
|
$
|
296
|
|
Accounts receivable, net
|
714
|
|
|
626
|
|
||
Inventories
|
820
|
|
|
940
|
|
||
Other current assets
|
53
|
|
|
46
|
|
||
Total current assets
|
1,896
|
|
|
1,908
|
|
||
Plant assets, net of depreciation
|
2,375
|
|
|
2,407
|
|
||
Goodwill
|
2,064
|
|
|
2,263
|
|
||
Other intangible assets, net of amortization
|
1,115
|
|
|
1,152
|
|
||
Other assets ($47 and $34 attributable to variable interest entity)
|
120
|
|
|
107
|
|
||
Total assets
|
$
|
7,570
|
|
|
$
|
7,837
|
|
Current liabilities
|
|
|
|
||||
Short-term borrowings
|
$
|
1,185
|
|
|
$
|
1,219
|
|
Payable to suppliers and others
|
564
|
|
|
610
|
|
||
Accrued liabilities
|
559
|
|
|
604
|
|
||
Dividend payable
|
112
|
|
|
100
|
|
||
Accrued income taxes
|
16
|
|
|
22
|
|
||
Total current liabilities
|
2,436
|
|
|
2,555
|
|
||
Long-term debt
|
2,293
|
|
|
2,314
|
|
||
Deferred taxes
|
402
|
|
|
396
|
|
||
Other liabilities
|
960
|
|
|
1,039
|
|
||
Total liabilities
|
6,091
|
|
|
6,304
|
|
||
Commitments and contingencies
|
|
|
|
||||
Campbell Soup Company shareholders' equity
|
|
|
|
||||
Preferred stock; authorized 40 shares; none issued
|
—
|
|
|
—
|
|
||
Capital stock, $.0375 par value; authorized 560 shares; issued 323 shares
|
12
|
|
|
12
|
|
||
Additional paid-in capital
|
334
|
|
|
354
|
|
||
Earnings retained in the business
|
2,102
|
|
|
1,927
|
|
||
Capital stock in treasury, at cost
|
(865
|
)
|
|
(664
|
)
|
||
Accumulated other comprehensive loss
|
(113
|
)
|
|
(104
|
)
|
||
Total Campbell Soup Company shareholders' equity
|
1,470
|
|
|
1,525
|
|
||
Noncontrolling interests
|
9
|
|
|
8
|
|
||
Total equity
|
1,479
|
|
|
1,533
|
|
||
Total liabilities and equity
|
$
|
7,570
|
|
|
$
|
7,837
|
|
|
Six Months Ended
|
||||||
|
January 29,
2017 |
|
January 31,
2016 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
393
|
|
|
$
|
459
|
|
Adjustments to reconcile net earnings to operating cash flow
|
|
|
|
||||
Impairment charges
|
212
|
|
|
—
|
|
||
Restructuring charges
|
—
|
|
|
30
|
|
||
Stock-based compensation
|
32
|
|
|
34
|
|
||
Pension and postretirement benefit expense (income)
|
(23
|
)
|
|
109
|
|
||
Depreciation and amortization
|
154
|
|
|
152
|
|
||
Deferred income taxes
|
—
|
|
|
(14
|
)
|
||
Other, net
|
6
|
|
|
4
|
|
||
Changes in working capital
|
|
|
|
||||
Accounts receivable
|
(95
|
)
|
|
(130
|
)
|
||
Inventories
|
117
|
|
|
133
|
|
||
Prepaid assets
|
(9
|
)
|
|
(2
|
)
|
||
Accounts payable and accrued liabilities
|
(100
|
)
|
|
(3
|
)
|
||
Receipts from hedging activities
|
1
|
|
|
—
|
|
||
Other
|
(21
|
)
|
|
(18
|
)
|
||
Net cash provided by operating activities
|
667
|
|
|
754
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of plant assets
|
(119
|
)
|
|
(153
|
)
|
||
Sales of plant assets
|
—
|
|
|
4
|
|
||
Other, net
|
(13
|
)
|
|
10
|
|
||
Net cash used in investing activities
|
(132
|
)
|
|
(139
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net short-term borrowings (repayments)
|
2
|
|
|
(252
|
)
|
||
Long-term repayments
|
(61
|
)
|
|
—
|
|
||
Dividends paid
|
(207
|
)
|
|
(197
|
)
|
||
Treasury stock purchases
|
(234
|
)
|
|
(86
|
)
|
||
Treasury stock issuances
|
2
|
|
|
2
|
|
||
Payments related to tax withholding for stock-based compensation
|
(20
|
)
|
|
(20
|
)
|
||
Net cash used in financing activities
|
(518
|
)
|
|
(553
|
)
|
||
Effect of exchange rate changes on cash
|
(4
|
)
|
|
(9
|
)
|
||
Net change in cash and cash equivalents
|
13
|
|
|
53
|
|
||
Cash and cash equivalents — beginning of period
|
296
|
|
|
253
|
|
||
Cash and cash equivalents — end of period
|
$
|
309
|
|
|
$
|
306
|
|
|
Campbell Soup Company Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||||||||||||
|
Capital Stock
|
|
Additional Paid-in
Capital |
|
Earnings Retained in the
Business |
|
Accumulated Other Comprehensive
Income (Loss) |
|
Noncontrolling
Interests
|
|
|
||||||||||||||||||||||
|
Issued
|
|
In Treasury
|
|
|
|
|
|
Total
Equity
|
||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
Balance at August 2, 2015
|
323
|
|
|
$
|
12
|
|
|
(13
|
)
|
|
$
|
(556
|
)
|
|
$
|
339
|
|
|
$
|
1,754
|
|
|
$
|
(168
|
)
|
|
$
|
(4
|
)
|
|
$
|
1,377
|
|
Net earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
459
|
|
|
|
|
—
|
|
|
459
|
|
|||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(55
|
)
|
|
2
|
|
|
(53
|
)
|
|||||||||||||
Dividends ($.624 per share)
|
|
|
|
|
|
|
|
|
|
|
(196
|
)
|
|
|
|
|
|
(196
|
)
|
||||||||||||||
Treasury stock purchased
|
|
|
|
|
(2
|
)
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|||||||||||||
Treasury stock issued under management incentive and stock option plans
|
|
|
|
|
1
|
|
|
34
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
23
|
|
||||||||||||
Balance at January 31, 2016
|
323
|
|
|
$
|
12
|
|
|
(14
|
)
|
|
$
|
(608
|
)
|
|
$
|
328
|
|
|
$
|
2,017
|
|
|
$
|
(223
|
)
|
|
$
|
(2
|
)
|
|
$
|
1,524
|
|
Balance at July 31, 2016
|
323
|
|
|
$
|
12
|
|
|
(15
|
)
|
|
$
|
(664
|
)
|
|
$
|
354
|
|
|
$
|
1,927
|
|
|
$
|
(104
|
)
|
|
$
|
8
|
|
|
$
|
1,533
|
|
Net earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
393
|
|
|
|
|
—
|
|
|
393
|
|
|||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
|
1
|
|
|
(8
|
)
|
|||||||||||||
Dividends ($.70 per share)
|
|
|
|
|
|
|
|
|
|
|
(218
|
)
|
|
|
|
|
|
(218
|
)
|
||||||||||||||
Treasury stock purchased
|
|
|
|
|
(4
|
)
|
|
(234
|
)
|
|
|
|
|
|
|
|
|
|
(234
|
)
|
|||||||||||||
Treasury stock issued under management incentive and stock option plans
|
|
|
|
|
|
|
1
|
|
|
33
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
13
|
|
||||||||
Balance at January 29, 2017
|
323
|
|
|
$
|
12
|
|
|
(18
|
)
|
|
$
|
(865
|
)
|
|
$
|
334
|
|
|
$
|
2,102
|
|
|
$
|
(113
|
)
|
|
$
|
9
|
|
|
$
|
1,479
|
|
1.
|
Basis of Presentation and Significant Accounting Policies
|
2.
|
Recent Accounting Pronouncements
|
3.
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
Foreign Currency Translation Adjustments
(1)
|
|
Gains (Losses) on Cash Flow Hedges
(2)
|
|
Pension and Postretirement Benefit Plan Adjustments
(3)
|
|
Total Accumulated Comprehensive Income (Loss)
|
||||||||
Balance at July 31, 2016
|
|
$
|
(124
|
)
|
|
$
|
(41
|
)
|
|
$
|
61
|
|
|
$
|
(104
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(25
|
)
|
|
19
|
|
|
—
|
|
|
(6
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
—
|
|
|
5
|
|
|
(8
|
)
|
|
(3
|
)
|
||||
Net current-period other comprehensive income (loss)
|
|
(25
|
)
|
|
24
|
|
|
(8
|
)
|
|
(9
|
)
|
||||
Balance at January 29, 2017
|
|
$
|
(149
|
)
|
|
$
|
(17
|
)
|
|
$
|
53
|
|
|
$
|
(113
|
)
|
(1)
|
Included a tax expense of
$6
as of
January 29, 2017
, and
July 31, 2016
.
|
(2)
|
Included a tax benefit of
$10
as of
January 29, 2017
, and
$23
as of
July 31, 2016
.
|
(3)
|
Included a tax expense of
$30
as of
January 29, 2017
, and
$35
as of
July 31, 2016
.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
||||||||||||
Details about Accumulated Other Comprehensive Income (Loss) Components
|
|
January 29, 2017
|
|
January 31, 2016
|
|
January 29, 2017
|
|
January 31, 2016
|
|
Location of (Gain) Loss Recognized in Earnings
|
||||||||
(Gains) losses on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
|
$
|
3
|
|
|
$
|
(4
|
)
|
|
$
|
4
|
|
|
$
|
(6
|
)
|
|
Cost of products sold
|
Foreign exchange forward contracts
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
Other expenses / (income)
|
||||
Forward starting interest rate swaps
|
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
Interest expense
|
||||
Total before tax
|
|
5
|
|
|
(4
|
)
|
|
7
|
|
|
(6
|
)
|
|
|
||||
Tax expense (benefit)
|
|
(2
|
)
|
|
2
|
|
|
(2
|
)
|
|
2
|
|
|
|
||||
(Gain) loss, net of tax
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
5
|
|
|
$
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pension and postretirement benefit adjustments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Prior service credit
|
|
$
|
(7
|
)
|
|
$
|
(1
|
)
|
|
$
|
(13
|
)
|
|
$
|
(1
|
)
|
|
(1)
|
Tax expense (benefit)
|
|
3
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
|
||||
(Gain) loss, net of tax
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
(8
|
)
|
|
$
|
(1
|
)
|
|
|
(1)
|
This is included in the components of net periodic benefit costs (see Note 8 for additional details).
|
4.
|
Goodwill and Intangible Assets
|
|
Americas
Simple Meals and Beverages |
|
Global
Biscuits and Snacks |
|
Campbell Fresh
|
|
Total
|
||||||||
Gross balance at July 31, 2016
|
$
|
775
|
|
|
$
|
757
|
|
|
$
|
837
|
|
|
$
|
2,369
|
|
Accumulated impairment charges
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
(106
|
)
|
||||
Net balance at July 31, 2016
|
$
|
775
|
|
|
$
|
757
|
|
|
$
|
731
|
|
|
$
|
2,263
|
|
Impairment
|
—
|
|
|
—
|
|
|
(191
|
)
|
|
(191
|
)
|
||||
Foreign currency translation adjustment
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
||||
Balance at January 29, 2017
|
$
|
775
|
|
|
$
|
749
|
|
|
$
|
540
|
|
|
$
|
2,064
|
|
Intangible Assets
|
|
January 29,
2017 |
|
July 31,
2016 |
||||
Amortizable intangible assets
|
|
|
|
|
||||
Customer relationships
|
|
$
|
221
|
|
|
$
|
222
|
|
Technology
|
|
40
|
|
|
40
|
|
||
Other
|
|
35
|
|
|
35
|
|
||
Total gross amortizable intangible assets
|
|
$
|
296
|
|
|
$
|
297
|
|
Accumulated amortization
|
|
(81
|
)
|
|
(72
|
)
|
||
Total net amortizable intangible assets
|
|
$
|
215
|
|
|
$
|
225
|
|
Non-amortizable intangible assets
|
|
|
|
|
||||
Trademarks
|
|
900
|
|
|
927
|
|
||
Total net intangible assets
|
|
$
|
1,115
|
|
|
$
|
1,152
|
|
5.
|
Business and Geographic Segment Information
|
•
|
Americas Simple Meals and Beverages segment includes the retail and food service businesses in the U.S., Canada and Latin America. The segment includes the following products:
Campbell’s
condensed and ready-to-serve soups;
Swanson
|
•
|
Global Biscuits and Snacks segment includes Pepperidge Farm cookies, crackers, bakery and frozen products in U.S. retail; Arnott’s biscuits in Australia and Asia Pacific; and Kelsen cookies globally. The segment also includes the simple meals and shelf-stable beverages business in Australia and Asia Pacific; and
|
•
|
Campbell Fresh segment includes Bolthouse Farms fresh carrots, carrot ingredients, refrigerated beverages and refrigerated salad dressings; Garden Fresh Gourmet salsa, hummus, dips and tortilla chips; and the U.S. refrigerated soup business.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
||||||||
Net sales
|
|
|
|
|
|
|
|
|
||||||||
Americas Simple Meals and Beverages
|
|
$
|
1,231
|
|
|
$
|
1,237
|
|
|
$
|
2,528
|
|
|
$
|
2,539
|
|
Global Biscuits and Snacks
|
|
680
|
|
|
682
|
|
|
1,351
|
|
|
1,334
|
|
||||
Campbell Fresh
|
|
260
|
|
|
282
|
|
|
494
|
|
|
531
|
|
||||
Total
|
|
$
|
2,171
|
|
|
$
|
2,201
|
|
|
$
|
4,373
|
|
|
$
|
4,404
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
||||||||
Earnings before interest and taxes
|
|
|
|
|
|
|
|
|
||||||||
Americas Simple Meals and Beverages
|
|
$
|
313
|
|
|
$
|
290
|
|
|
$
|
696
|
|
|
$
|
653
|
|
Global Biscuits and Snacks
|
|
135
|
|
|
141
|
|
|
247
|
|
|
255
|
|
||||
Campbell Fresh
|
|
(3
|
)
|
|
21
|
|
|
(2
|
)
|
|
39
|
|
||||
Corporate
(1)
|
|
(241
|
)
|
|
(29
|
)
|
|
(279
|
)
|
|
(188
|
)
|
||||
Restructuring charges
(2)
|
|
1
|
|
|
(9
|
)
|
|
—
|
|
|
(30
|
)
|
||||
Total
|
|
$
|
205
|
|
|
$
|
414
|
|
|
$
|
662
|
|
|
$
|
729
|
|
(1)
|
Represents unallocated items. Pension and postretirement benefit mark-to-market adjustments are included in Corporate. Gains were
$7
in the
three-month
period ended
January 31, 2016
, and losses were
$20
and
$121
in the
six-month
periods ended
January 29, 2017
, and
January 31, 2016
, respectively. Costs related to the implementation of our new organizational structure and cost savings initiatives were
$7
in the
three-month
period ended
January 31, 2016
, and
$11
and
$22
in the
six-month
periods ended
January 29, 2017
, and
January 31, 2016
, respectively. Impairment charges of
$212
on the intangible assets of the Bolthouse Farms carrot and carrot ingredients reporting unit and the Garden Fresh Gourmet reporting unit were also included in the three- and six-month periods ended in January 29, 2017. See Note 4 for additional information.
|
(2)
|
See Note 6 for additional information.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
||||||||
Net sales
|
|
|
|
|
|
|
|
|
||||||||
Soup
|
|
$
|
831
|
|
|
$
|
821
|
|
|
$
|
1,694
|
|
|
$
|
1,678
|
|
Baked snacks
|
|
661
|
|
|
664
|
|
|
1,314
|
|
|
1,302
|
|
||||
Other simple meals
|
|
436
|
|
|
447
|
|
|
865
|
|
|
876
|
|
||||
Beverages
|
|
243
|
|
|
269
|
|
|
500
|
|
|
548
|
|
||||
Total
|
|
$
|
2,171
|
|
|
$
|
2,201
|
|
|
$
|
4,373
|
|
|
$
|
4,404
|
|
6.
|
Restructuring Charges and Cost Savings Initiatives
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||||||||||
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
|
July 31,
2016 |
|
August 2,
2015 |
||||||||||||
Restructuring charges
|
$
|
(1
|
)
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
35
|
|
|
$
|
102
|
|
Administrative expenses
|
3
|
|
|
7
|
|
|
11
|
|
|
22
|
|
|
47
|
|
|
22
|
|
||||||
Total pre-tax charges
|
$
|
2
|
|
|
$
|
19
|
|
|
$
|
11
|
|
|
$
|
55
|
|
|
$
|
82
|
|
|
$
|
124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Aggregate after-tax impact
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
35
|
|
|
$
|
52
|
|
|
$
|
78
|
|
Per share impact
|
$
|
—
|
|
|
$
|
.04
|
|
|
$
|
.02
|
|
|
$
|
.11
|
|
|
$
|
.17
|
|
|
$
|
.25
|
|
|
Recognized as of
January 29, 2017 |
||
Severance pay and benefits
|
$
|
128
|
|
Implementation costs and other related costs
|
89
|
|
|
Total
|
$
|
217
|
|
|
|
Severance Pay and Benefits
|
|
Implementation Costs and Other Related Costs
(3)
|
|
Total Charges
|
|||||
Accrued balance at July 31, 2016
(1)
|
|
$
|
73
|
|
|
|
|
|
|||
2017 charges
|
|
—
|
|
|
11
|
|
|
$
|
11
|
|
|
2017 cash payments
|
|
(29
|
)
|
|
|
|
|
||||
Accrued balance at January 29, 2017
(2)
|
|
$
|
44
|
|
|
|
|
|
(1)
|
Includes
$17
of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.
|
(2)
|
Includes
$6
of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.
|
(3)
|
Includes other costs recognized as incurred that are not reflected in the restructuring reserve in the Consolidated Balance Sheet. The costs are included in Administrative expenses in the Consolidated Statements of Earnings.
|
|
January 29, 2017
|
||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
Costs Incurred to Date
|
||||||
Americas Simple Meals and Beverages
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71
|
|
Global Biscuits and Snacks
|
(1
|
)
|
|
2
|
|
|
68
|
|
|||
Campbell Fresh
|
—
|
|
|
—
|
|
|
2
|
|
|||
Corporate
|
3
|
|
|
9
|
|
|
76
|
|
|||
Total
|
$
|
2
|
|
|
$
|
11
|
|
|
$
|
217
|
|
|
Total Program
(1)
|
|
Change in Estimate
|
|
Recognized as of July 31, 2016
|
||||||
Severance pay and benefits
|
$
|
41
|
|
|
$
|
(4
|
)
|
|
$
|
37
|
|
Asset impairment
|
12
|
|
|
—
|
|
|
12
|
|
|||
Other exit costs
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total
|
$
|
54
|
|
|
$
|
(4
|
)
|
|
$
|
50
|
|
(1)
|
Recognized as of August 2, 2015.
|
7.
|
Earnings per Share
|
8.
|
Pension and Postretirement Benefits
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||||
|
Pension
|
|
Postretirement
|
|
Pension
|
|
Postretirement
|
||||||||||||||||||||||||
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
||||||||||||||||
Service cost
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
21
|
|
|
25
|
|
|
2
|
|
|
4
|
|
|
43
|
|
|
50
|
|
|
5
|
|
|
8
|
|
||||||||
Expected return on plan assets
|
(36
|
)
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|
(75
|
)
|
|
—
|
|
|
—
|
|
||||||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(1
|
)
|
||||||||
Recognized net actuarial (gain)/loss
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
—
|
|
|
—
|
|
||||||||
Net periodic benefit (income) / expense
|
$
|
(8
|
)
|
|
$
|
(28
|
)
|
|
$
|
(4
|
)
|
|
$
|
4
|
|
|
$
|
(16
|
)
|
|
$
|
101
|
|
|
$
|
(7
|
)
|
|
$
|
8
|
|
9.
|
Financial Instruments
|
|
Balance Sheet Classification
|
|
January 29,
2017 |
|
July 31,
2016 |
||||
Asset Derivatives
|
|
|
|
|
|
||||
Derivatives designated as hedges:
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Other current assets
|
|
$
|
—
|
|
|
$
|
1
|
|
Total derivatives designated as hedges
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Derivatives not designated as hedges:
|
|
|
|
|
|
||||
Commodity derivative contracts
|
Other current assets
|
|
$
|
5
|
|
|
$
|
3
|
|
Deferred compensation derivative contracts
|
Other current assets
|
|
1
|
|
|
1
|
|
||
Total derivatives not designated as hedges
|
|
|
$
|
6
|
|
|
$
|
4
|
|
Total asset derivatives
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
Balance Sheet Classification
|
|
January 29,
2017 |
|
July 31,
2016 |
||||
Liability Derivatives
|
|
|
|
|
|
||||
Derivatives designated as hedges:
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Accrued liabilities
|
|
$
|
2
|
|
|
$
|
4
|
|
Forward starting interest rate swaps
|
Accrued liabilities
|
|
15
|
|
|
—
|
|
||
Forward starting interest rate swaps
|
Other liabilities
|
|
—
|
|
|
44
|
|
||
Total derivatives designated as hedges
|
|
|
$
|
17
|
|
|
$
|
48
|
|
Derivatives not designated as hedges:
|
|
|
|
|
|
||||
Commodity derivative contracts
|
Accrued liabilities
|
|
$
|
3
|
|
|
$
|
4
|
|
Deferred compensation derivative contracts
|
Accrued liabilities
|
|
—
|
|
|
1
|
|
||
Foreign exchange forward contracts
|
Accrued liabilities
|
|
1
|
|
|
7
|
|
||
Total derivatives not designated as hedges
|
|
|
$
|
4
|
|
|
$
|
12
|
|
Total liability derivatives
|
|
|
$
|
21
|
|
|
$
|
60
|
|
|
|
January 29, 2017
|
|
July 31, 2016
|
||||||||||||||||||||
Derivative Instrument
|
|
Gross Amounts Presented in the Consolidated Balance Sheet
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting Agreements
|
|
Net Amount
|
|
Gross Amounts Presented in the Consolidated Balance Sheet
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting Agreements
|
|
Net Amount
|
||||||||||||
Total asset derivatives
|
|
$
|
6
|
|
|
$
|
(4
|
)
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
Total liability derivatives
|
|
$
|
21
|
|
|
$
|
(4
|
)
|
|
$
|
17
|
|
|
$
|
60
|
|
|
$
|
(4
|
)
|
|
$
|
56
|
|
|
|
|
Total
Cash-Flow Hedge
OCI Activity
|
||||||
Derivatives Designated as Cash-Flow Hedges
|
|
|
January 29, 2017
|
|
January 31, 2016
|
||||
Three Months Ended
|
|
|
|
|
|
||||
OCI derivative gain (loss) at beginning of quarter
|
|
|
$
|
(49
|
)
|
|
$
|
(20
|
)
|
Effective portion of changes in fair value recognized in OCI:
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
|
|
(2
|
)
|
|
8
|
|
||
Forward starting interest rate swaps
|
|
|
19
|
|
|
(10
|
)
|
||
Amount of (gain) loss reclassified from OCI to earnings:
|
Location in Earnings
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Cost of products sold
|
|
3
|
|
|
(4
|
)
|
||
Foreign exchange forward contracts
|
Other expenses / (income)
|
|
1
|
|
|
(1
|
)
|
||
Forward starting interest rate swaps
|
Interest expense
|
|
1
|
|
|
1
|
|
||
OCI derivative gain (loss) at end of quarter
|
|
|
$
|
(27
|
)
|
|
$
|
(26
|
)
|
|
|
|
|
|
|
||||
Six Months Ended
|
|
|
|
|
|
||||
OCI derivative gain (loss) at beginning of year
|
|
|
$
|
(64
|
)
|
|
$
|
(10
|
)
|
Effective portion of changes in fair value recognized in OCI:
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
|
|
1
|
|
|
8
|
|
||
Forward starting interest rate swaps
|
|
|
29
|
|
|
(18
|
)
|
||
Amount of (gain) loss reclassified from OCI to earnings:
|
Location in Earnings
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Cost of products sold
|
|
4
|
|
|
(6
|
)
|
||
Foreign exchange forward contracts
|
Other expenses / (income)
|
|
1
|
|
|
(2
|
)
|
||
Forward starting interest rate swaps
|
Interest expense
|
|
2
|
|
|
2
|
|
||
OCI derivative gain (loss) at end of quarter
|
|
|
$
|
(27
|
)
|
|
$
|
(26
|
)
|
|
|
|
|
|
|
|
|
|
|
Amount of (Gain) Loss Recognized in Earnings on Derivatives
|
||||||||||||||
Derivatives not Designated as Hedges
|
|
Location of (Gain) Loss
Recognized in Earnings |
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
January 29, 2017
|
|
January 31, 2016
|
|
January 29, 2017
|
|
January 31, 2016
|
||||||||||
Foreign exchange forward contracts
|
|
Cost of products sold
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
Foreign exchange forward contracts
|
|
Other expenses / (income)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Cross-currency swap contracts
|
|
Other expenses / (income)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
||||
Commodity derivative contracts
|
|
Cost of products sold
|
|
(2
|
)
|
|
7
|
|
|
(6
|
)
|
|
9
|
|
||||
Deferred compensation derivative contracts
|
|
Administrative expenses
|
|
(4
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Total
|
|
|
|
$
|
(7
|
)
|
|
$
|
(3
|
)
|
|
$
|
(9
|
)
|
|
$
|
(1
|
)
|
10.
|
Variable Interest Entity
|
11.
|
Fair Value Measurements
|
•
|
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with observable market data.
|
•
|
Level 3: Unobservable inputs, which are valued based on our estimates of assumptions that market participants would use in pricing the asset or liability.
|
|
Fair Value
as of January 29, 2017 |
|
Fair Value Measurements at
January 29, 2017 Using Fair Value Hierarchy |
|
Fair Value
as of July 31, 2016 |
|
Fair Value Measurements at
July 31, 2016 Using Fair Value Hierarchy |
||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange forward contracts
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Commodity derivative contracts
(2)
|
5
|
|
|
4
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
1
|
|
|
—
|
|
||||||||
Deferred compensation derivative contracts
(3)
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||
Fair value option investments
(4)
|
46
|
|
|
—
|
|
|
3
|
|
|
43
|
|
|
33
|
|
|
—
|
|
|
8
|
|
|
25
|
|
||||||||
Total assets at fair value
|
$
|
52
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
43
|
|
|
$
|
38
|
|
|
$
|
2
|
|
|
$
|
11
|
|
|
$
|
25
|
|
|
Fair Value
as of January 29, 2017 |
|
Fair Value Measurements at
January 29, 2017 Using Fair Value Hierarchy |
|
Fair Value
as of July 31, 2016 |
|
Fair Value Measurements at
July 31, 2016 Using Fair Value Hierarchy |
||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forward starting interest rate swaps
(5)
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
—
|
|
Foreign exchange forward contracts
(1)
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||||||
Commodity derivative contracts
(2)
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||||||
Deferred compensation derivative contracts
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||
Deferred compensation obligation
(6)
|
130
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
119
|
|
|
119
|
|
|
—
|
|
|
—
|
|
||||||||
Total liabilities at fair value
|
$
|
151
|
|
|
$
|
133
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
179
|
|
|
$
|
123
|
|
|
$
|
56
|
|
|
$
|
—
|
|
(1)
|
Based on observable market transactions of spot currency rates and forward rates.
|
(2)
|
Based on quoted futures exchanges and on observable prices of futures and options transactions in the marketplace.
|
(3)
|
Based on LIBOR and equity index swap rates.
|
(4)
|
Primarily represents investments in equity securities that are not readily marketable and are accounted for under the fair value option. The investments were funded by Acre. See Note 10 for additional information. Fair value is based on analyzing recent transactions and transactions of comparable companies, and the discounted cash flow method. In addition, allocation methods, including the option pricing method, are used in distributing fair value among various equity holders according to rights and preferences. Changes in the fair value of investments were not material through
January 29, 2017
.
|
(5)
|
Based on LIBOR swap rates.
|
(6)
|
Based on the fair value of the participants’ investments.
|
|
|
January 29, 2017
|
|
July 31, 2016
|
||||||||||||
|
|
Impairment Charges
|
|
Fair Value
|
|
Impairment Charges
|
|
Fair Value
|
||||||||
Bolthouse Farms Carrot and Carrot Ingredients
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
|
$
|
127
|
|
|
$
|
75
|
|
|
$
|
106
|
|
|
$
|
202
|
|
Trademark
|
|
$
|
20
|
|
|
$
|
48
|
|
|
$
|
35
|
|
|
$
|
68
|
|
Garden Fresh Gourmet
|
|
|
|
|
||||
Goodwill
|
|
$
|
64
|
|
|
$
|
52
|
|
Trademark
|
|
$
|
1
|
|
|
$
|
37
|
|
12.
|
Share Repurchases
|
13.
|
Stock-based Compensation
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
||||||||
Total pre-tax stock-based compensation expense
|
$
|
18
|
|
|
$
|
21
|
|
|
$
|
32
|
|
|
$
|
34
|
|
Tax-related benefits
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
12
|
|
|
$
|
13
|
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
|
(Options in
thousands)
|
|
|
|
(In years)
|
|
|
|||||
Outstanding at July 31, 2016
|
681
|
|
|
$
|
50.21
|
|
|
|
|
|
||
Granted
|
489
|
|
|
$
|
54.65
|
|
|
|
|
|
||
Exercised
|
(33
|
)
|
|
$
|
50.21
|
|
|
|
|
|
||
Terminated
|
(95
|
)
|
|
$
|
52.49
|
|
|
|
|
|
||
Outstanding at January 29, 2017
|
1,042
|
|
|
$
|
52.08
|
|
|
9.1
|
|
$
|
11
|
|
Exercisable at January 29, 2017
|
194
|
|
|
$
|
50.21
|
|
|
8.7
|
|
$
|
2
|
|
|
2017
|
|
2016
|
Risk-free interest rate
|
1.28%
|
|
1.68%
|
Expected dividend yield
|
2.26%
|
|
2.46%
|
Expected volatility
|
18.64%
|
|
18.35%
|
Expected term
|
6 years
|
|
6 years
|
Grant-date fair value
|
$7.51
|
|
$6.86
|
|
Units
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
|
(Restricted stock
units in thousands)
|
|
|
|||
Nonvested at July 31, 2016
|
2,004
|
|
|
$
|
45.08
|
|
Granted
|
557
|
|
|
$
|
54.73
|
|
Vested
|
(919
|
)
|
|
$
|
43.89
|
|
Forfeited
|
(343
|
)
|
|
$
|
43.04
|
|
Nonvested at January 29, 2017
|
1,299
|
|
|
$
|
50.61
|
|
|
Units
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
|
(Restricted stock
units in thousands)
|
|
|
|||
Nonvested at July 31, 2016
|
1,641
|
|
|
$
|
49.13
|
|
Granted
|
606
|
|
|
$
|
39.53
|
|
Vested
|
(251
|
)
|
|
$
|
36.26
|
|
Forfeited
|
(170
|
)
|
|
$
|
43.57
|
|
Nonvested at January 29, 2017
|
1,826
|
|
|
$
|
48.23
|
|
|
2017
|
|
2016
|
Risk-free interest rate
|
0.85%
|
|
0.92%
|
Expected dividend yield
|
2.26%
|
|
2.46%
|
Expected volatility
|
17.78%
|
|
17.25%
|
Expected term
|
3 years
|
|
3 years
|
14.
|
Commitments and Contingencies
|
15.
|
Inventories
|
|
January 29,
2017 |
|
July 31,
2016 |
||||
Raw materials, containers and supplies
|
$
|
373
|
|
|
$
|
391
|
|
Finished products
|
447
|
|
|
549
|
|
||
|
$
|
820
|
|
|
$
|
940
|
|
•
|
Net sales
decreased
1%
in the current quarter to
$2.171 billion
due to lower volume and an increase in promotional spending.
|
•
|
Gross profit, as a percent of sales,
increased
to
38.0%
from
37.2%
in the year-ago quarter. The increase was primarily due to productivity improvements and increased benefits from cost savings initiatives, partly offset by higher supply chain costs and cost inflation, as well as higher promotional spending. The increase reflects continued expansion in Americas Simple Meals and Beverages. The increase in supply chain costs was primarily due to higher carrot costs in the quarter due to the adverse impact on crop yields of heavy rains, and lower beverage operating efficiencies within Campbell Fresh.
|
•
|
Other expenses / (income) increased to
$220 million
from
$4 million
in the year-ago quarter, primarily due to non-cash impairment charges of $212 million on the intangible assets of the Bolthouse Farms carrot and carrot ingredients reporting unit and the Garden Fresh Gourmet reporting unit, as discussed below.
|
•
|
The effective tax rate was 42.9% in the current quarter, compared to 31.5% in the year-ago quarter. In the current quarter, we recognized a tax benefit of $32 million on $212 million of impairment charges. After adjusting for this item, the effective rate decreased as the timing of recognizing tax expense was favorably impacted by the impairment, which will reverse over the course of the second half of 2017.
|
•
|
Earnings per share were
$.33
in the current quarter, compared to
$.85
in the year-ago quarter. The current and prior-year quarter included expenses of
$.58
and
$.02
per share, respectively, from items impacting comparability as discussed below.
|
•
|
In the first quarter of 2017, we recognized losses of
$20 million
in Costs and expenses ($13 million after tax, or $.04 per share) associated with mark-to-market adjustments for defined benefit pension and postretirement plans. In the second quarter of 2016, we recognized a gain of
$7 million
in Costs and expenses ($4 million after tax, or $.01 per share) associated with mark-to-market adjustments for defined benefit pension and postretirement plans. Year-to-date in 2016, we recognized losses of
$121 million
in Costs and expenses ($76 million after tax, or $.24 per share) associated with mark-to-market adjustments for defined benefit pension and postretirement plans;
|
•
|
In 2015, we implemented a new enterprise design and initiatives to reduce costs and to streamline our organizational structure. Year-to-date in 2017, we recorded implementation costs and other related costs of $11 million in Administrative expenses ($7 million after tax, or $.02 per share) related to these initiatives. In the second quarter of 2016, we recorded a pre-tax restructuring charge of $12 million and implementation costs and other related costs of
$7 million
in Administrative expenses related to the 2015 initiatives. In the second quarter of 2016, we also recorded a reduction to pre-tax restructuring charges of $3 million related to the fiscal 2014 initiative to improve supply chain efficiency in Australia. The aggregate after-tax impact of restructuring charges, implementation costs and other related costs in the second quarter of 2016 was $10 million, or $.03 per share. Year-to-date in 2016, we recorded pre-tax restructuring charges, implementation costs and other related costs associated with the 2015 and 2014 initiatives of $52 million ($33 million after tax, or $.11 per share). See Note 6 to the Consolidated Financial Statements and "Restructuring Charges and Cost Savings Initiatives" for additional information; and
|
•
|
In the second quarter of 2017, we performed an interim impairment assessment on the intangible assets of the Bolthouse Farms carrot and carrot ingredients reporting unit and the Garden Fresh Gourmet reporting unit as operating performance was well below expectations and a new leadership team of the Campbell Fresh division initiated a strategic review which
|
|
Three Months Ended
|
||||||||||||||
|
January 29, 2017
|
|
January 31, 2016
|
||||||||||||
(Millions, except per share amounts)
|
Earnings
Impact
|
|
EPS
Impact
|
|
Earnings
Impact
|
|
EPS
Impact
|
||||||||
Net earnings attributable to Campbell Soup Company
|
$
|
101
|
|
|
$
|
.33
|
|
|
$
|
265
|
|
|
$
|
.85
|
|
|
|
|
|
|
|
|
|
||||||||
Pension and postretirement benefit mark-to-market adjustments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
.01
|
|
Restructuring charges, implementation costs and other related costs
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(.03
|
)
|
||||
Impairment charges
|
(180
|
)
|
|
(.58
|
)
|
|
—
|
|
|
—
|
|
||||
Impact of items on Net earnings
|
$
|
(180
|
)
|
|
$
|
(.58
|
)
|
|
$
|
(6
|
)
|
|
$
|
(.02
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
Six Months Ended
|
||||||||||||||
|
January 29, 2017
|
|
January 31, 2016
|
||||||||||||
(Millions, except per share amounts)
|
Earnings
Impact
|
|
EPS
Impact
|
|
Earnings
Impact
|
|
EPS
Impact
|
||||||||
Net earnings attributable to Campbell Soup Company
|
$
|
393
|
|
|
$
|
1.27
|
|
|
$
|
459
|
|
|
$
|
1.47
|
|
|
|
|
|
|
|
|
|
||||||||
Pension and postretirement benefit mark-to-market adjustments
|
$
|
(13
|
)
|
|
$
|
(.04
|
)
|
|
$
|
(76
|
)
|
|
$
|
(.24
|
)
|
Restructuring charges, implementation costs and other related costs
|
(7
|
)
|
|
(.02
|
)
|
|
(33
|
)
|
|
(.11
|
)
|
||||
Impairment charges
|
(180
|
)
|
|
(.58
|
)
|
|
—
|
|
|
—
|
|
||||
Impact of items on Net earnings
(1)
|
$
|
(200
|
)
|
|
$
|
(.65
|
)
|
|
$
|
(109
|
)
|
|
$
|
(.35
|
)
|
(1)
|
The sum of the individual per share amounts may not add due to rounding.
|
|
Three Months Ended
|
|
|
||||||
(Millions)
|
January 29, 2017
|
|
January 31, 2016
|
|
% Change
|
||||
Americas Simple Meals and Beverages
|
$
|
1,231
|
|
|
$
|
1,237
|
|
|
—%
|
Global Biscuits and Snacks
|
680
|
|
|
682
|
|
|
—
|
||
Campbell Fresh
|
260
|
|
|
282
|
|
|
(8)
|
||
|
$
|
2,171
|
|
|
$
|
2,201
|
|
|
(1)%
|
|
Americas Simple Meals and Beverages
(2)
|
|
Global Biscuits and Snacks
|
|
Campbell Fresh
|
|
Total
(2)
|
Volume and Mix
|
—%
|
|
—%
|
|
(8)%
|
|
(1)%
|
Increased Promotional Spending
(1)
|
(1)
|
|
(1)
|
|
—
|
|
(1)
|
Currency
|
—
|
|
1
|
|
—
|
|
—
|
|
—%
|
|
—%
|
|
(8)%
|
|
(1)%
|
(1)
|
Represents revenue reductions from trade promotion and consumer coupon redemption programs.
|
(2)
|
Sum of the individual amounts does not add due to rounding.
|
|
Margin Impact
|
Productivity improvements
|
1.8%
|
Mix
|
0.2
|
Pension and postretirement benefit mark-to-market adjustments
(1)
|
0.1
|
Higher selling prices
|
0.1
|
Higher level of promotional spending
|
(0.6)
|
Cost inflation, supply chain costs and other factors
(2)
|
(0.8)
|
|
0.8%
|
(1)
|
Mark-to-market losses were $2 million in 2016.
|
(2)
|
Includes a positive margin impact of 0.8 points from cost savings initiatives, which was more than offset by cost inflation and other factors, including a negative impact of 0.4 points on carrot costs due to heavy rains this year.
|
|
|
Three Months Ended
|
|
|
||||||
(Millions)
|
|
January 29, 2017
|
|
January 31, 2016
|
|
% Change
(2)
|
||||
Americas Simple Meals and Beverages
|
|
$
|
313
|
|
|
$
|
290
|
|
|
8%
|
Global Biscuits and Snacks
|
|
135
|
|
|
141
|
|
|
(4)
|
||
Campbell Fresh
|
|
(3
|
)
|
|
21
|
|
|
NM
|
||
|
|
445
|
|
|
452
|
|
|
(2)%
|
||
Corporate
|
|
(241
|
)
|
|
(29
|
)
|
|
|
||
Restructuring charges
(1)
|
|
1
|
|
|
(9
|
)
|
|
|
||
Earnings before interest and taxes
|
|
$
|
205
|
|
|
$
|
414
|
|
|
|
(1)
|
See Note 6 to the Consolidated Financial Statements for additional information on restructuring charges.
|
(2)
|
NM - not meaningful.
|
|
Six Months Ended
|
|
|
||||||
(Millions)
|
January 29, 2017
|
|
January 31, 2016
|
|
% Change
|
||||
Americas Simple Meals and Beverages
|
$
|
2,528
|
|
|
$
|
2,539
|
|
|
—%
|
Global Biscuits and Snacks
|
1,351
|
|
|
1,334
|
|
|
1
|
||
Campbell Fresh
|
494
|
|
|
531
|
|
|
(7)
|
||
|
$
|
4,373
|
|
|
$
|
4,404
|
|
|
(1)%
|
|
Americas Simple Meals and Beverages
(2)
|
|
Global Biscuits and Snacks
(2)
|
|
Campbell Fresh
|
|
Total
|
Volume and Mix
|
—%
|
|
1%
|
|
(7)%
|
|
(1)%
|
Increased Promotional Spending
(1)
|
(1)
|
|
(1)
|
|
—
|
|
(1)
|
Currency
|
—
|
|
2
|
|
—
|
|
1
|
|
—%
|
|
1%
|
|
(7)%
|
|
(1)%
|
(1)
|
Represents revenue reductions from trade promotion and consumer coupon redemption programs.
|
(2)
|
Sum of the individual amounts does not add due to rounding.
|
|
Margin Impact
|
Productivity improvements
|
1.7%
|
Pension and postretirement benefit mark-to-market adjustments
(1)
|
1.4
|
Mix
|
0.3
|
Higher selling prices
|
0.2
|
Higher level of promotional spending
|
(0.4)
|
Cost inflation, supply chain costs and other factors
(2)
|
(0.8)
|
|
2.4%
|
(1)
|
Mark-to-market losses were
$20 million
in
2017
and
$81 million
in
2016
.
|
(2)
|
Includes a positive margin impact of 0.9 points from cost savings initiatives, which was more than offset by cost inflation and other factors, including a negative impact of 0.2 points on carrot costs due to heavy rains in December and January this year.
|
|
|
Six Months Ended
|
|
|
||||||
(Millions)
|
|
January 29, 2017
|
|
January 31, 2016
|
|
% Change
(2)
|
||||
Americas Simple Meals and Beverages
|
|
$
|
696
|
|
|
$
|
653
|
|
|
7%
|
Global Biscuits and Snacks
|
|
247
|
|
|
255
|
|
|
(3)
|
||
Campbell Fresh
|
|
(2
|
)
|
|
39
|
|
|
NM
|
||
|
|
941
|
|
|
947
|
|
|
(1)%
|
||
Corporate
|
|
(279
|
)
|
|
(188
|
)
|
|
|
||
Restructuring charges
(1)
|
|
—
|
|
|
(30
|
)
|
|
|
||
Earnings before interest and taxes
|
|
$
|
662
|
|
|
$
|
729
|
|
|
|
(1)
|
See Note 6 to the Consolidated Financial Statements for additional information on restructuring charges.
|
(2)
|
NM - not meaningful.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||||||||||
(Millions, except per share amounts)
|
January 29,
2017 |
|
January 31,
2016 |
|
January 29,
2017 |
|
January 31,
2016 |
|
July 31,
2016 |
|
August 2,
2015 |
||||||||||||
Restructuring charges
|
$
|
(1
|
)
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
35
|
|
|
$
|
102
|
|
Administrative expenses
|
3
|
|
|
7
|
|
|
11
|
|
|
22
|
|
|
47
|
|
|
22
|
|
||||||
Total pre-tax charges
|
$
|
2
|
|
|
$
|
19
|
|
|
$
|
11
|
|
|
$
|
55
|
|
|
$
|
82
|
|
|
$
|
124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Aggregate after-tax impact
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
35
|
|
|
$
|
52
|
|
|
$
|
78
|
|
Per share impact
|
$
|
—
|
|
|
$
|
.04
|
|
|
$
|
.02
|
|
|
$
|
.11
|
|
|
$
|
.17
|
|
|
$
|
.25
|
|
(Millions)
|
Recognized as of
January 29, 2017 |
||
Severance pay and benefits
|
$
|
128
|
|
Implementation costs and other related costs
|
89
|
|
|
Total
|
$
|
217
|
|
|
Six Months Ended
|
|
Year Ended
|
||||||||
(Millions)
|
January 29, 2017
|
|
July 31, 2016
|
|
August 2, 2015
|
||||||
Total pre-tax savings
|
$
|
275
|
|
|
$
|
215
|
|
|
$
|
85
|
|
|
January 29, 2017
|
||||||||||
(Millions)
|
Three Months Ended
|
|
Six Months Ended
|
|
Costs Incurred to Date
|
||||||
Americas Simple Meals and Beverages
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71
|
|
Global Biscuits and Snacks
|
(1
|
)
|
|
2
|
|
|
68
|
|
|||
Campbell Fresh
|
—
|
|
|
—
|
|
|
2
|
|
|||
Corporate
|
3
|
|
|
9
|
|
|
76
|
|
|||
Total
|
$
|
2
|
|
|
$
|
11
|
|
|
$
|
217
|
|
(Millions)
|
Total Program
(1)
|
|
Change in Estimate
|
|
Recognized as of July 31, 2016
|
||||||
Severance pay and benefits
|
$
|
41
|
|
|
$
|
(4
|
)
|
|
$
|
37
|
|
Asset impairment
|
12
|
|
|
—
|
|
|
12
|
|
|||
Other exit costs
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total
|
$
|
54
|
|
|
$
|
(4
|
)
|
|
$
|
50
|
|
(1)
|
Recognized as of August 2, 2015.
|
(Millions)
|
|
Bolthouse Farms Carrot and Carrot Ingredients
|
|
Garden Fresh Gourmet
|
||||
1% increase in the weighted-average cost of capital
|
|
$
|
(65
|
)
|
|
$
|
(30
|
)
|
1% reduction in revenue growth
|
|
$
|
(30
|
)
|
|
$
|
(15
|
)
|
1% reduction in EBITDA
*
margin
|
|
$
|
(50
|
)
|
|
$
|
(15
|
)
|
*
|
Earnings before interest, taxes, depreciation and amortization.
|
(Millions)
|
|
Bolthouse Farms Carrot and Carrot Ingredients
|
|
Garden Fresh Gourmet
|
||||
1% increase in the weighted-average cost of capital
|
|
$
|
(5
|
)
|
|
$
|
(10
|
)
|
1% reduction in revenue growth
|
|
$
|
(5
|
)
|
|
$
|
(5
|
)
|
•
|
our ability to successfully manage changes to our organizational structure and/or business processes, including our selling, distribution, manufacturing and information management systems or processes;
|
•
|
our ability to realize projected cost savings and benefits from our efficiency and/or restructuring initiatives;
|
•
|
the impact of strong competitive response to our efforts to leverage our brand power with product innovation, promotional programs and new advertising;
|
•
|
changes in consumer demand for our products and favorable perception of our brands;
|
•
|
product quality and safety issues, including recalls and product liabilities;
|
•
|
the risks associated with trade and consumer acceptance of product improvements, shelving initiatives, new products and pricing and promotional strategies;
|
•
|
a changing customer landscape, including inventory management practices, and increased significance of certain of our key customers;
|
•
|
disruptions to our supply chain, including fluctuations in the supply of and inflation in energy and raw and packaging materials cost;
|
•
|
the impact of non-U.S. operations, including export and import restrictions, public corruption and compliance with foreign laws and regulations;
|
•
|
the ability to complete and integrate acquisitions, divestitures and other business portfolio changes;
|
•
|
the uncertainties of litigation and regulatory actions against us;
|
•
|
the possible disruption to the independent contractor distribution models used by certain of our businesses, including as a result of litigation or regulatory actions affecting their independent contractor classification;
|
•
|
our ability to protect our intellectual property rights;
|
•
|
impairment to goodwill or other intangible assets;
|
•
|
increased liabilities and costs related to our defined benefit pension plans;
|
•
|
a material failure in or breach of our information technology systems;
|
•
|
our ability to attract and retain key personnel;
|
•
|
changes in currency exchange rates, tax rates, interest rates, debt and equity markets, inflation rates, economic conditions, law, regulation and other external factors; and
|
•
|
unforeseen business disruptions in one or more of our markets due to political instability, civil disobedience, terrorism, armed hostilities, extreme weather conditions, natural disasters or other calamities.
|
a.
|
Evaluation of Disclosure Controls and Procedures
|
b.
|
Changes in Internal Controls
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Issuer Purchases of Equity Securities
|
Total Number
of Shares
Purchased
(1)
|
|
Average
Price Paid
Per Share
(2)
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs
(3)
|
|
Approximate
Dollar Value of
Shares that may yet
be Purchased
Under the Plans or
Programs
($ in Millions)
(3)
|
||
Period
|
|||||||||
10/31/16 - 11/30/16
|
202,500
|
|
(4)
|
$57.45
|
(4)
|
155,500
|
|
|
$341
|
12/1/16 - 12/30/16
|
1,685,631
|
|
(5)
|
$58.99
|
(5)
|
1,356,631
|
|
|
$261
|
1/3/17 - 1/27/17
|
179,437
|
|
|
$60.84
|
|
179,437
|
|
|
$250
|
Total
|
2,067,568
|
|
|
$59.00
|
|
1,691,568
|
|
|
$250
|
(1)
|
Shares purchased are as of the trade date. Includes 376,000 shares repurchased in open-market transactions primarily to offset the dilutive impact to existing shareholders of issuances under stock compensation plans.
|
(2)
|
Average price paid per share is calculated on a settlement basis and excludes commission.
|
(3)
|
During the second quarter of 2017, we had a publicly announced strategic share repurchase program. Under this program, which was announced on June 23, 2011, our Board of Directors authorized the purchase of up to $1 billion of our stock. The program has no expiration date. Pursuant to our longstanding practice, under a separate 2017 authorization, we expect to continue purchasing shares sufficient to offset shares issued under our incentive compensation plans.
|
(4)
|
Includes 47,000 shares repurchased in open-market transactions at a price of $57.47 primarily to offset the dilutive impact to existing shareholders of issuances under stock compensation plans.
|
(5)
|
Includes 329,000 shares repurchased in open-market transactions at an average price of $58.70 primarily to offset the dilutive impact to existing shareholders of issuances under stock compensation plans.
|
10
|
Five-Year Credit Agreement, dated December 9, 2016, by and among Campbell Soup Company, the eligible subsidiaries referred to therein, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders named therein, is incorporated by reference to Exhibit 10 to Campbell's Form 8-K (SEC file number 1-3822) filed with the SEC on December 12, 2016.
|
|
|
31(a)
|
Certification of Denise M. Morrison pursuant to Rule 13a-14(a).
|
|
|
31(b)
|
Certification of Anthony P. DiSilvestro pursuant to Rule 13a-14(a).
|
|
|
32(a)
|
Certification of Denise M. Morrison pursuant to 18 U.S.C. Section 1350.
|
|
|
32(b)
|
Certification of Anthony P. DiSilvestro pursuant to 18 U.S.C. Section 1350.
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Schema Document
|
|
|
101.CAL
|
XBRL Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Label Linkbase Document
|
|
|
101.PRE
|
XBRL Presentation Linkbase Document
|
|
|
CAMPBELL SOUP COMPANY
|
|
|
|
|
|
By: /s/ Anthony P. DiSilvestro
|
|
|
Anthony P. DiSilvestro
|
|
|
Senior Vice President and Chief Financial Officer
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||
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|
By: /s/ William J. O'Shea
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William J. O'Shea
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|
|
Vice President and Controller
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|
|
|
10
|
Five-Year Credit Agreement, dated December 9, 2016, by and among Campbell Soup Company, the eligible subsidiaries referred to therein, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders named therein, is incorporated by reference to Exhibit 10 to Campbell's Form 8-K (SEC file number 1-3822) filed with the SEC on December 12, 2016.
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|
|
31(a)
|
Certification of Denise M. Morrison pursuant to Rule 13a-14(a).
|
|
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31(b)
|
Certification of Anthony P. DiSilvestro pursuant to Rule 13a-14(a).
|
|
|
32(a)
|
Certification of Denise M. Morrison pursuant to 18 U.S.C. Section 1350.
|
|
|
32(b)
|
Certification of Anthony P. DiSilvestro pursuant to 18 U.S.C. Section 1350.
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Schema Document
|
|
|
101.CAL
|
XBRL Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Label Linkbase Document
|
|
|
101.PRE
|
XBRL Presentation Linkbase Document
|
|
By:
|
/s/ Denise M. Morrison
|
|
||
|
|
Name:
|
|
Denise M. Morrison
|
|
|
|
Title:
|
|
President and Chief Executive Officer
|
|
|
By:
|
/s/ Anthony P. DiSilvestro
|
|
||
|
|
Name:
|
|
Anthony P. DiSilvestro
|
|
|
|
Title:
|
|
Senior Vice President and Chief Financial
|
|
|
|
|
|
Officer
|
|
|
By:
|
/s/ Denise M. Morrison
|
|
||
|
|
Name:
|
|
Denise M. Morrison
|
|
|
|
Title:
|
|
President and Chief Executive Officer
|
|
|
By:
|
/s/ Anthony P. DiSilvestro
|
|
||
|
|
Name:
|
|
Anthony P. DiSilvestro
|
|
|
|
Title:
|
|
Senior Vice President and Chief Financial
|
|
|
|
|
|
Officer
|
|