For the Quarterly Period Ended
|
|
|
|
Commission File Number
|
January 27, 2019
|
|
|
|
1-3822
|
New Jersey
|
21-0419870
|
State of Incorporation
|
I.R.S. Employer Identification No.
|
Large accelerated filer
þ
|
Accelerated filer
☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
||||||||
Net sales
|
$
|
2,713
|
|
|
$
|
2,180
|
|
|
$
|
5,407
|
|
|
$
|
4,341
|
|
Costs and expenses
|
|
|
|
|
|
|
|
||||||||
Cost of products sold
|
1,999
|
|
|
1,414
|
|
|
3,869
|
|
|
2,792
|
|
||||
Marketing and selling expenses
|
264
|
|
|
228
|
|
|
512
|
|
|
447
|
|
||||
Administrative expenses
|
180
|
|
|
165
|
|
|
356
|
|
|
314
|
|
||||
Research and development expenses
|
23
|
|
|
27
|
|
|
50
|
|
|
57
|
|
||||
Other expenses / (income)
|
226
|
|
|
70
|
|
|
230
|
|
|
41
|
|
||||
Restructuring charges
|
2
|
|
|
33
|
|
|
21
|
|
|
35
|
|
||||
Total costs and expenses
|
2,694
|
|
|
1,937
|
|
|
5,038
|
|
|
3,686
|
|
||||
Earnings before interest and taxes
|
19
|
|
|
243
|
|
|
369
|
|
|
655
|
|
||||
Interest expense
|
93
|
|
|
32
|
|
|
187
|
|
|
63
|
|
||||
Interest income
|
1
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Earnings (loss) before taxes
|
(73
|
)
|
|
211
|
|
|
184
|
|
|
593
|
|
||||
Taxes on earnings
|
(14
|
)
|
|
(74
|
)
|
|
49
|
|
|
33
|
|
||||
Net earnings (loss)
|
(59
|
)
|
|
285
|
|
|
135
|
|
|
560
|
|
||||
Less: Net earnings (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net earnings (loss) attributable to Campbell Soup Company
|
$
|
(59
|
)
|
|
$
|
285
|
|
|
$
|
135
|
|
|
$
|
560
|
|
Per Share — Basic
|
|
|
|
|
|
|
|
||||||||
Net earnings (loss) attributable to Campbell Soup Company
|
$
|
(.20
|
)
|
|
$
|
.95
|
|
|
$
|
.45
|
|
|
$
|
1.86
|
|
Weighted average shares outstanding — basic
|
301
|
|
|
301
|
|
|
301
|
|
|
301
|
|
||||
Per Share — Assuming Dilution
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to Campbell Soup Company
|
$
|
(.20
|
)
|
|
$
|
.95
|
|
|
$
|
.45
|
|
|
$
|
1.85
|
|
Weighted average shares outstanding — assuming dilution
|
301
|
|
|
301
|
|
|
302
|
|
|
302
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
January 27, 2019
|
|
January 28, 2018
|
||||||||||||||||||||
|
Pre-tax amount
|
|
Tax (expense) benefit
|
|
After-tax amount
|
|
Pre-tax amount
|
|
Tax (expense) benefit
|
|
After-tax amount
|
||||||||||||
Net earnings (loss)
|
|
|
|
|
$
|
(59
|
)
|
|
|
|
|
|
$
|
285
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
$
|
20
|
|
|
$
|
—
|
|
|
20
|
|
|
$
|
66
|
|
|
$
|
—
|
|
|
66
|
|
||
Cash-flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gains (losses) arising during the period
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
||||||
Reclassification adjustment for (gains) losses included in net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service cost arising during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
1
|
|
|
(2
|
)
|
||||||
Reclassification of prior service credit included in net earnings
|
(7
|
)
|
|
1
|
|
|
(6
|
)
|
|
(6
|
)
|
|
2
|
|
|
(4
|
)
|
||||||
Other comprehensive income (loss)
|
$
|
12
|
|
|
$
|
1
|
|
|
13
|
|
|
$
|
62
|
|
|
$
|
1
|
|
|
63
|
|
||
Total comprehensive income (loss)
|
|
|
|
|
$
|
(46
|
)
|
|
|
|
|
|
$
|
348
|
|
||||||||
Total comprehensive income (loss) attributable to noncontrolling interests
|
|
|
|
|
—
|
|
|
|
|
|
|
(1
|
)
|
||||||||||
Total comprehensive income (loss) attributable to Campbell Soup Company
|
|
|
|
|
$
|
(46
|
)
|
|
|
|
|
|
$
|
349
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended
|
||||||||||||||||||||||
|
January 27, 2019
|
|
January 28, 2018
|
||||||||||||||||||||
|
Pre-tax amount
|
|
Tax (expense) benefit
|
|
After-tax amount
|
|
Pre-tax amount
|
|
Tax (expense) benefit
|
|
After-tax amount
|
||||||||||||
Net earnings
|
|
|
|
|
$
|
135
|
|
|
|
|
|
|
$
|
560
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
$
|
(23
|
)
|
|
$
|
—
|
|
|
(23
|
)
|
|
$
|
34
|
|
|
$
|
—
|
|
|
34
|
|
||
Cash-flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gains (losses) arising during the period
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
11
|
|
|
(4
|
)
|
|
7
|
|
||||||
Reclassification adjustment for (gains) losses included in net earnings
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service credit arising during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
1
|
|
|
(2
|
)
|
||||||
Reclassification of prior service credit included in net earnings
|
(14
|
)
|
|
3
|
|
|
(11
|
)
|
|
(13
|
)
|
|
4
|
|
|
(9
|
)
|
||||||
Other comprehensive income (loss)
|
$
|
(37
|
)
|
|
$
|
3
|
|
|
(34
|
)
|
|
$
|
30
|
|
|
$
|
1
|
|
|
31
|
|
||
Total comprehensive income (loss)
|
|
|
|
|
$
|
101
|
|
|
|
|
|
|
$
|
591
|
|
||||||||
Total comprehensive income (loss) attributable to noncontrolling interests
|
|
|
|
|
—
|
|
|
|
|
|
|
(1
|
)
|
||||||||||
Total comprehensive income (loss) attributable to Campbell Soup Company
|
|
|
|
|
$
|
101
|
|
|
|
|
|
|
$
|
592
|
|
|
January 27,
2019 |
|
July 29,
2018 |
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
203
|
|
|
$
|
226
|
|
Accounts receivable, net
|
927
|
|
|
785
|
|
||
Inventories
|
1,076
|
|
|
1,199
|
|
||
Other current assets
|
89
|
|
|
86
|
|
||
Total current assets
|
2,295
|
|
|
2,296
|
|
||
Plant assets, net of depreciation
|
3,036
|
|
|
3,233
|
|
||
Goodwill
|
4,721
|
|
|
4,580
|
|
||
Other intangible assets, net of amortization
|
3,752
|
|
|
4,196
|
|
||
Other assets ($70 as of 2019 and $77 as of 2018 attributable to variable interest entity)
|
220
|
|
|
224
|
|
||
Total assets
|
$
|
14,024
|
|
|
$
|
14,529
|
|
Current liabilities
|
|
|
|
||||
Short-term borrowings
|
$
|
1,454
|
|
|
$
|
1,896
|
|
Payable to suppliers and others
|
930
|
|
|
893
|
|
||
Accrued liabilities
|
784
|
|
|
676
|
|
||
Dividends payable
|
107
|
|
|
107
|
|
||
Accrued income taxes
|
24
|
|
|
22
|
|
||
Total current liabilities
|
3,299
|
|
|
3,594
|
|
||
Long-term debt
|
8,003
|
|
|
7,998
|
|
||
Deferred taxes
|
904
|
|
|
995
|
|
||
Other liabilities
|
540
|
|
|
569
|
|
||
Total liabilities
|
12,746
|
|
|
13,156
|
|
||
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
|
349
|
|
|
349
|
|
||
Earnings retained in the business
|
2,130
|
|
|
2,224
|
|
||
Capital stock in treasury, at cost
|
(1,079
|
)
|
|
(1,103
|
)
|
||
Accumulated other comprehensive loss
|
(143
|
)
|
|
(118
|
)
|
||
Total Campbell Soup Company shareholders' equity
|
1,269
|
|
|
1,364
|
|
||
Noncontrolling interests
|
9
|
|
|
9
|
|
||
Total equity
|
1,278
|
|
|
1,373
|
|
||
Total liabilities and equity
|
$
|
14,024
|
|
|
$
|
14,529
|
|
|
|||||||
|
Six Months Ended
|
||||||
|
January 27,
2019 |
|
January 28,
2018 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
135
|
|
|
$
|
560
|
|
Adjustments to reconcile net earnings to operating cash flow
|
|
|
|
||||
Impairment charges
|
360
|
|
|
75
|
|
||
Restructuring charges
|
21
|
|
|
35
|
|
||
Stock-based compensation
|
31
|
|
|
32
|
|
||
Noncurrent income taxes
|
—
|
|
|
52
|
|
||
Pension and postretirement benefit income
|
(29
|
)
|
|
(32
|
)
|
||
Depreciation and amortization
|
241
|
|
|
161
|
|
||
Deferred income taxes
|
(40
|
)
|
|
(106
|
)
|
||
Other, net
|
18
|
|
|
18
|
|
||
Changes in working capital, net of acquisition
|
|
|
|
||||
Accounts receivable
|
(150
|
)
|
|
(113
|
)
|
||
Inventories
|
122
|
|
|
84
|
|
||
Prepaid assets
|
(2
|
)
|
|
(25
|
)
|
||
Accounts payable and accrued liabilities
|
170
|
|
|
(10
|
)
|
||
Net payments of hedging activities
|
(5
|
)
|
|
(31
|
)
|
||
Other
|
(26
|
)
|
|
(40
|
)
|
||
Net cash provided by operating activities
|
846
|
|
|
660
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of plant assets
|
(198
|
)
|
|
(132
|
)
|
||
Purchases of route businesses
|
(23
|
)
|
|
—
|
|
||
Sales of route businesses
|
25
|
|
|
—
|
|
||
Businesses acquired, net of cash acquired
|
(18
|
)
|
|
(682
|
)
|
||
Other, net
|
11
|
|
|
(11
|
)
|
||
Net cash used in investing activities
|
(203
|
)
|
|
(825
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Short-term borrowings
|
2,831
|
|
|
5,052
|
|
||
Short-term repayments
|
(3,274
|
)
|
|
(4,673
|
)
|
||
Long-term repayments
|
—
|
|
|
(16
|
)
|
||
Dividends paid
|
(212
|
)
|
|
(216
|
)
|
||
Treasury stock purchases
|
—
|
|
|
(86
|
)
|
||
Payments related to tax withholding for stock-based compensation
|
(7
|
)
|
|
(23
|
)
|
||
Payments of debt issuance costs
|
(1
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
(663
|
)
|
|
38
|
|
||
Effect of exchange rate changes on cash
|
(3
|
)
|
|
4
|
|
||
Net change in cash and cash equivalents
|
(23
|
)
|
|
(123
|
)
|
||
Cash and cash equivalents — beginning of period
|
226
|
|
|
319
|
|
||
Cash and cash equivalents — end of period
|
$
|
203
|
|
|
$
|
196
|
|
|
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 October 29, 2017
|
323
|
|
|
$
|
12
|
|
|
(22
|
)
|
|
$
|
(1,106
|
)
|
|
$
|
305
|
|
|
$
|
2,555
|
|
|
$
|
(85
|
)
|
|
$
|
8
|
|
|
$
|
1,689
|
|
Net earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
285
|
|
|
|
|
—
|
|
|
285
|
|
|||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
64
|
|
|
(1
|
)
|
|
63
|
|
|||||||||||||
Dividends ($.35 per share)
|
|
|
|
|
|
|
|
|
|
|
(106
|
)
|
|
|
|
|
|
(106
|
)
|
||||||||||||||
Treasury stock purchased
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Treasury stock issued under management incentive and stock option plans
|
|
|
|
|
|
|
—
|
|
|
2
|
|
|
16
|
|
|
|
|
|
|
|
|
18
|
|
||||||||||
Balance at January 28, 2018
|
323
|
|
|
$
|
12
|
|
|
(22
|
)
|
|
$
|
(1,104
|
)
|
|
$
|
321
|
|
|
$
|
2,734
|
|
|
$
|
(21
|
)
|
|
$
|
7
|
|
|
$
|
1,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at July 30, 2017
|
323
|
|
|
$
|
12
|
|
|
(22
|
)
|
|
$
|
(1,066
|
)
|
|
$
|
359
|
|
|
$
|
2,385
|
|
|
$
|
(53
|
)
|
|
$
|
8
|
|
|
$
|
1,645
|
|
Net earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
560
|
|
|
|
|
—
|
|
|
560
|
|
|||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
(1
|
)
|
|
31
|
|
|||||||||||||
Dividends ($.70 per share)
|
|
|
|
|
|
|
|
|
|
|
(211
|
)
|
|
|
|
|
|
(211
|
)
|
||||||||||||||
Treasury stock purchased
|
|
|
|
|
(2
|
)
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|||||||||||||
Treasury stock issued under management incentive and stock option plans
|
|
|
|
|
2
|
|
|
48
|
|
|
(38
|
)
|
|
|
|
|
|
|
|
10
|
|
||||||||||||
Balance at January 28, 2018
|
323
|
|
|
$
|
12
|
|
|
(22
|
)
|
|
$
|
(1,104
|
)
|
|
$
|
321
|
|
|
$
|
2,734
|
|
|
$
|
(21
|
)
|
|
$
|
7
|
|
|
$
|
1,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at October 28, 2018
|
323
|
|
|
$
|
12
|
|
|
(22
|
)
|
|
$
|
(1,084
|
)
|
|
$
|
339
|
|
|
$
|
2,295
|
|
|
$
|
(156
|
)
|
|
$
|
9
|
|
|
$
|
1,415
|
|
Net earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
(59
|
)
|
|
|
|
—
|
|
|
(59
|
)
|
|||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||||||||||
Dividends ($.35 per share)
|
|
|
|
|
|
|
|
|
|
|
(106
|
)
|
|
|
|
|
|
(106
|
)
|
||||||||||||||
Treasury stock purchased
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Treasury stock issued under management incentive and stock option plans
|
|
|
|
|
—
|
|
|
5
|
|
|
10
|
|
|
|
|
|
|
|
|
15
|
|
||||||||||||
Balance at January 27, 2019
|
323
|
|
|
$
|
12
|
|
|
(22
|
)
|
|
$
|
(1,079
|
)
|
|
$
|
349
|
|
|
$
|
2,130
|
|
|
$
|
(143
|
)
|
|
$
|
9
|
|
|
$
|
1,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at July 29, 2018
|
323
|
|
|
$
|
12
|
|
|
(22
|
)
|
|
$
|
(1,103
|
)
|
|
$
|
349
|
|
|
$
|
2,224
|
|
|
$
|
(118
|
)
|
|
$
|
9
|
|
|
$
|
1,373
|
|
Cumulative effect of changes in accounting principle:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue
(1)
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
(8
|
)
|
||||||||||||||
Stranded tax effects
(1)
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
|
9
|
|
|
|
|
—
|
|
|||||||||||||
Net earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
135
|
|
|
|
|
—
|
|
|
135
|
|
|||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|||||||||||||
Dividends ($.70 per share)
|
|
|
|
|
|
|
|
|
|
|
(212
|
)
|
|
|
|
|
|
(212
|
)
|
||||||||||||||
Treasury stock purchased
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Treasury stock issued under management incentive and stock option plans
|
|
|
|
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
24
|
|
||||||||
Balance at January 27, 2019
|
323
|
|
|
$
|
12
|
|
|
(22
|
)
|
|
$
|
(1,079
|
)
|
|
$
|
349
|
|
|
$
|
2,130
|
|
|
$
|
(143
|
)
|
|
$
|
9
|
|
|
$
|
1,278
|
|
1.
|
Basis of Presentation and Significant Accounting Policies
|
2.
|
Recent Accounting Pronouncements
|
|
|
As Reported
|
|
Balances Without Adoption
|
|
Increase/(Decrease) Due to Adoption
|
||||||
Accounts receivable, net
|
|
$
|
927
|
|
|
$
|
926
|
|
|
$
|
1
|
|
Total current assets
|
|
2,295
|
|
|
2,294
|
|
|
1
|
|
|||
Total assets
|
|
14,024
|
|
|
14,023
|
|
|
1
|
|
|||
|
|
|
|
|
|
|
||||||
Payable to suppliers and others
|
|
$
|
930
|
|
|
$
|
929
|
|
|
$
|
1
|
|
Accrued liabilities
|
|
784
|
|
|
768
|
|
|
16
|
|
|||
Accrued income taxes
|
|
24
|
|
|
28
|
|
|
(4
|
)
|
|||
Total current liabilities
|
|
3,299
|
|
|
3,286
|
|
|
13
|
|
|||
Total liabilities
|
|
12,746
|
|
|
12,733
|
|
|
13
|
|
|||
|
|
|
|
|
|
|
||||||
Campbell Soup Company shareholders' equity
|
|
|
|
|
|
|
||||||
Earnings retained in the business
|
|
$
|
2,130
|
|
|
$
|
2,142
|
|
|
$
|
(12
|
)
|
Total Campbell Soup Company shareholders' equity
|
|
1,269
|
|
|
1,281
|
|
|
(12
|
)
|
|||
Total equity
|
|
1,278
|
|
|
1,290
|
|
|
(12
|
)
|
|||
Total liabilities and equity
|
|
14,024
|
|
|
14,023
|
|
|
1
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
|
January 27, 2019
|
|
January 27, 2019
|
||||||||||||||||||||
|
|
As Reported
|
|
Balances Without Adoption
|
|
Increase/(Decrease) Due to Adoption
|
|
As Reported
|
|
Balances Without Adoption
|
|
Increase/(Decrease) Due to Adoption
|
||||||||||||
Net sales
|
|
$
|
2,713
|
|
|
$
|
2,702
|
|
|
$
|
11
|
|
|
$
|
5,407
|
|
|
$
|
5,412
|
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings before interest and taxes
|
|
$
|
19
|
|
|
$
|
8
|
|
|
$
|
11
|
|
|
$
|
369
|
|
|
$
|
374
|
|
|
$
|
(5
|
)
|
Earnings (loss) before taxes
|
|
$
|
(73
|
)
|
|
$
|
(84
|
)
|
|
$
|
11
|
|
|
$
|
184
|
|
|
$
|
189
|
|
|
$
|
(5
|
)
|
Taxes on earnings
|
|
(14
|
)
|
|
(17
|
)
|
|
3
|
|
|
49
|
|
|
50
|
|
|
(1
|
)
|
||||||
Net earnings (loss) attributable to Campbell Soup Company
|
|
$
|
(59
|
)
|
|
$
|
(67
|
)
|
|
$
|
8
|
|
|
$
|
135
|
|
|
$
|
139
|
|
|
$
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Per Share — Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net earnings (loss) attributable to Campbell Soup Company
(1)
|
|
$
|
(.20
|
)
|
|
$
|
(.22
|
)
|
|
$
|
.03
|
|
|
$
|
.45
|
|
|
$
|
.46
|
|
|
$
|
(.01
|
)
|
Per Share — Assuming Dilution
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net earnings attributable to Campbell Soup Company
(1)
|
|
$
|
(.20
|
)
|
|
$
|
(.22
|
)
|
|
$
|
.03
|
|
|
$
|
.45
|
|
|
$
|
.46
|
|
|
$
|
(.01
|
)
|
(1)
|
The sum of individual per share amounts may not add due to rounding.
|
3.
|
Acquisitions
|
|
|
Snyder's-Lance
|
||
Cash
|
|
$
|
21
|
|
Accounts receivable
|
|
220
|
|
|
Inventories
|
|
219
|
|
|
Other current assets
|
|
32
|
|
|
Plant assets
|
|
696
|
|
|
Goodwill
|
|
3,006
|
|
|
Other intangible assets
|
|
2,761
|
|
|
Other assets
|
|
65
|
|
|
Short-term debt
|
|
(1
|
)
|
|
Accounts payable
|
|
(124
|
)
|
|
Accrued liabilities
|
|
(115
|
)
|
|
Deferred taxes
|
|
(597
|
)
|
|
Other liabilities
|
|
(24
|
)
|
|
Noncontrolling interest
|
|
(47
|
)
|
|
Total assets acquired and liabilities assumed
|
|
$
|
6,112
|
|
|
|
Type
|
|
Life in Years
|
|
Value
|
||||
Trademarks
|
|
Non-amortizable
|
|
Indefinite
|
|
$
|
1,997
|
|
||
Customer relationships
|
|
Amortizable
|
|
15
|
to
|
22
|
|
756
|
|
|
Other
|
|
Amortizable
|
|
1.5
|
|
8
|
|
|||
Total identifiable intangible assets
|
|
|
|
|
|
|
|
$
|
2,761
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
|
January 28,
2018 |
|
January 28,
2018 |
||||
Net sales
|
|
$
|
2,747
|
|
|
$
|
5,555
|
|
Net earnings attributable to Campbell Soup Company
|
|
$
|
451
|
|
|
$
|
640
|
|
Net earnings per share attributable to Campbell Soup Company - basic
|
|
$
|
1.50
|
|
|
$
|
2.13
|
|
Net earnings per share attributable to Campbell Soup Company - assuming dilution
|
|
$
|
1.50
|
|
|
$
|
2.12
|
|
4.
|
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 30, 2017
|
|
$
|
(84
|
)
|
|
$
|
(22
|
)
|
|
$
|
53
|
|
|
$
|
(53
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
35
|
|
|
7
|
|
|
(2
|
)
|
|
40
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
—
|
|
|
1
|
|
|
(9
|
)
|
|
(8
|
)
|
||||
Net current-period other comprehensive income (loss)
|
|
35
|
|
|
8
|
|
|
(11
|
)
|
|
32
|
|
||||
Balance at January 28, 2018
|
|
$
|
(49
|
)
|
|
$
|
(14
|
)
|
|
$
|
42
|
|
|
$
|
(21
|
)
|
Balance at July 29, 2018
|
|
$
|
(154
|
)
|
|
$
|
(4
|
)
|
|
$
|
40
|
|
|
$
|
(118
|
)
|
Cumulative effect of a change in accounting principle
(4)
|
|
2
|
|
|
(3
|
)
|
|
10
|
|
|
9
|
|
||||
Other comprehensive income (loss) before reclassifications
|
|
(23
|
)
|
|
(1
|
)
|
|
—
|
|
|
(24
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
—
|
|
|
1
|
|
|
(11
|
)
|
|
(10
|
)
|
||||
Net current-period other comprehensive income (loss)
|
|
(23
|
)
|
|
—
|
|
|
(11
|
)
|
|
(34
|
)
|
||||
Balance at January 27, 2019
|
|
$
|
(175
|
)
|
|
$
|
(7
|
)
|
|
$
|
39
|
|
|
$
|
(143
|
)
|
(1)
|
Included a tax expense of
$4
as of
January 27, 2019
, and
$6
as of
July 29, 2018
,
January 28, 2018
, and
July 30, 2017
.
|
(2)
|
Included a tax benefit of
$1
as of
January 27, 2019
,
$4
as of
July 29, 2018
,
$8
as of
January 28, 2018
, and
$12
as of
July 30, 2017
.
|
(3)
|
Included a tax expense of
$12
as of
January 27, 2019
,
$25
as of
July 29, 2018
, and
January 28, 2018
, and
$30
as of
July 30, 2017
.
|
(4)
|
Reflects the adoption of the FASB guidance on stranded tax effects. See Note 2 for additional information.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
||||||||||||
Details about Accumulated Other Comprehensive Income (Loss) Components
|
|
January 27, 2019
|
|
January 28, 2018
|
|
January 27, 2019
|
|
January 28, 2018
|
|
Location of (Gain) Loss Recognized in Earnings
|
||||||||
(Gains) losses on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cost of products sold
|
Forward starting interest rate swaps
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
Interest expense
|
||||
Total before tax
|
|
—
|
|
|
3
|
|
|
1
|
|
|
1
|
|
|
|
||||
Tax expense (benefit)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||
(Gain) loss, net of tax
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pension and postretirement benefit adjustments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Prior service credit
|
|
$
|
(7
|
)
|
|
$
|
(6
|
)
|
|
$
|
(14
|
)
|
|
$
|
(13
|
)
|
|
Other expenses / (income)
|
Tax expense (benefit)
|
|
1
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
|
||||
(Gain) loss, net of tax
|
|
$
|
(6
|
)
|
|
$
|
(4
|
)
|
|
$
|
(11
|
)
|
|
$
|
(9
|
)
|
|
|
5.
|
Goodwill and Intangible Assets
|
|
Meals and Beverages
|
|
Global
Biscuits and Snacks |
|
Campbell Fresh
(1)
|
|
Total
|
||||||||
Net balance at July 29, 2018
|
$
|
978
|
|
|
$
|
3,602
|
|
|
$
|
—
|
|
|
$
|
4,580
|
|
Changes in preliminary purchase price allocation
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
||||
Acquisition
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Foreign currency translation adjustment
|
(1
|
)
|
|
(19
|
)
|
|
—
|
|
|
(20
|
)
|
||||
Net balance at January 27, 2019
|
$
|
977
|
|
|
$
|
3,744
|
|
|
$
|
—
|
|
|
$
|
4,721
|
|
(1)
|
The balance of goodwill is reflected net of accumulated impairment charges of
$837
as of January 27, 2019 and July 29, 2018, respectively, related to the Bolthouse Farms carrot and carrot ingredients reporting unit, the deli reporting unit, and the Bolthouse Farms refrigerated beverages and salad dressings reporting unit.
|
Intangible Assets
|
|
January 27,
2019 |
|
July 29,
2018 |
||||
Amortizable intangible assets
|
|
|
|
|
||||
Customer relationships
|
|
$
|
917
|
|
|
$
|
1,116
|
|
Technology
|
|
10
|
|
|
40
|
|
||
Other
|
|
41
|
|
|
43
|
|
||
Total gross amortizable intangible assets
|
|
$
|
968
|
|
|
$
|
1,199
|
|
Accumulated amortization
|
|
(87
|
)
|
|
(126
|
)
|
||
Total net amortizable intangible assets
|
|
$
|
881
|
|
|
$
|
1,073
|
|
Non-amortizable intangible assets
|
|
|
|
|
||||
Trademarks
|
|
2,871
|
|
|
3,123
|
|
||
Total net intangible assets
|
|
$
|
3,752
|
|
|
$
|
4,196
|
|
6.
|
Segment Information
|
•
|
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
broth and stocks;
Prego
pasta sauces;
Pace
Mexican sauces;
Campbell’s
gravies, pasta, beans and dinner sauces;
Swanson
canned poultry;
Plum
food and snacks;
V8
juices and beverages;
Campbell’s
tomato juice; and as of December 12, 2017,
Pacific
broth, soups, non-dairy beverages and other simple meals;
|
•
|
Global Biscuits and Snacks segment represents an aggregation of the following operating segments: U.S. snacks operating segment, which includes Pepperidge Farm cookies, crackers, bakery and frozen products in U.S. retail, and Snyder’s-Lance pretzels, sandwich crackers, potato chips, tortilla chips and other snacking products in the U.S. and Europe; and the international biscuits and snacks operating segment, which includes Arnott’s biscuits in Australia and Asia Pacific, Kelsen cookies globally, and 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 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
||||||||
Net sales
|
|
|
|
|
|
|
|
|
||||||||
Meals and Beverages
|
|
$
|
1,230
|
|
|
$
|
1,214
|
|
|
$
|
2,474
|
|
|
$
|
2,453
|
|
Global Biscuits and Snacks
|
|
1,243
|
|
|
708
|
|
|
2,461
|
|
|
1,396
|
|
||||
Campbell Fresh
|
|
239
|
|
|
257
|
|
|
471
|
|
|
491
|
|
||||
Corporate
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Total
|
|
$
|
2,713
|
|
|
$
|
2,180
|
|
|
$
|
5,407
|
|
|
$
|
4,341
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
||||||||
Earnings before interest and taxes
|
|
|
|
|
|
|
|
|
||||||||
Meals and Beverages
|
|
$
|
255
|
|
|
$
|
284
|
|
|
$
|
549
|
|
|
$
|
615
|
|
Global Biscuits and Snacks
|
|
185
|
|
|
137
|
|
|
339
|
|
|
254
|
|
||||
Campbell Fresh
|
|
(14
|
)
|
|
(11
|
)
|
|
(17
|
)
|
|
(17
|
)
|
||||
Corporate
(1)
|
|
(405
|
)
|
|
(134
|
)
|
|
(481
|
)
|
|
(162
|
)
|
||||
Restructuring charges
(2)
|
|
(2
|
)
|
|
(33
|
)
|
|
(21
|
)
|
|
(35
|
)
|
||||
Total
|
|
$
|
19
|
|
|
$
|
243
|
|
|
$
|
369
|
|
|
$
|
655
|
|
(1)
|
Represents unallocated items. Pension and postretirement benefit mark-to-market adjustments are included in Corporate. There were gains of
$14
in the six-month period ended
January 28, 2018
. Costs related to cost savings initiatives were
$22
and
$27
for the three-month periods and
$49
and
$44
in the six-month periods ended
January 27, 2019
, and
January 28, 2018
, respectively. Costs of
$10
and
$12
associated with the planned divestitures were in the three- and six-month periods ended
January 27, 2019
. Impairment charges of plant assets and intangible assets were
$346
and
$360
in the three- and- six-month periods ended
January 27, 2019
, respectively. Impairment charges of intangible assets were
$75
in the three- and- six-month periods ended
January 28, 2018
. See Notes 5 and 13 for additional information. Transaction costs of
$24
associated with the acquisition of Snyder's-Lance were in the three- and six-month periods ended
January 28, 2018
.
|
(2)
|
See Note 7 for additional information.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
||||||||
Net sales
|
|
|
|
|
|
|
|
|
||||||||
Soup
|
|
$
|
815
|
|
|
$
|
814
|
|
|
$
|
1,604
|
|
|
$
|
1,621
|
|
Snacks
|
|
1,225
|
|
|
690
|
|
|
2,434
|
|
|
1,367
|
|
||||
Other simple meals
|
|
423
|
|
|
434
|
|
|
854
|
|
|
869
|
|
||||
Beverages
|
|
249
|
|
|
241
|
|
|
514
|
|
|
483
|
|
||||
Other
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Total
|
|
$
|
2,713
|
|
|
$
|
2,180
|
|
|
$
|
5,407
|
|
|
$
|
4,341
|
|
7.
|
Restructuring Charges and Cost Savings Initiatives
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
||||||||||||||
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
|
Recognized as of January 27, 2019
(1)
|
||||||||||
Restructuring charges
|
$
|
2
|
|
|
$
|
33
|
|
|
$
|
21
|
|
|
$
|
35
|
|
|
$
|
238
|
|
Administrative expenses
|
10
|
|
|
26
|
|
|
23
|
|
|
38
|
|
|
228
|
|
|||||
Cost of products sold
|
9
|
|
|
1
|
|
|
21
|
|
|
6
|
|
|
70
|
|
|||||
Marketing and selling expenses
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
7
|
|
|||||
Research and development expenses
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Total pre-tax charges
|
$
|
24
|
|
|
$
|
60
|
|
|
$
|
70
|
|
|
$
|
79
|
|
|
$
|
544
|
|
(1)
|
Includes
$13
of Restructuring charges and
$12
of Administrative expenses associated with the Snyder's-Lance cost transformation program and integration recognized in 2018.
|
|
Recognized as of
January 27, 2019 |
||
Severance pay and benefits
(1)
|
$
|
214
|
|
Asset impairment/accelerated depreciation
|
66
|
|
|
Implementation costs and other related costs
(2)
|
264
|
|
|
Total
|
$
|
544
|
|
(1)
|
Includes
$13
of charges associated with the Snyder's-Lance cost transformation program and integration recognized in 2018.
|
(2)
|
Includes
$12
of charges associated with the Snyder's-Lance cost transformation program and integration recognized in 2018.
|
|
|
Severance Pay and Benefits
|
|
Implementation Costs and Other Related Costs
(3)
|
|
Asset Impairment/Accelerated Depreciation
|
|
Total Charges
|
||||||
Accrued balance at July 29, 2018
(1)
|
|
$
|
46
|
|
|
|
|
|
|
|
||||
2019 charges
|
|
21
|
|
|
28
|
|
|
21
|
|
|
$
|
70
|
|
|
2019 cash payments
|
|
(17
|
)
|
|
|
|
|
|
|
|||||
Accrued balance at January 27, 2019
(2)
|
|
$
|
50
|
|
|
|
|
|
|
|
(1)
|
Includes
$24
of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet,
$1
of which is associated with the Snyder's-Lance cost transformation program and integration. Of total accrued balance,
$9
is associated with the Snyder's-Lance cost transformation program and integration.
|
(2)
|
Includes
$15
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 Sheets. The costs are included in Administrative expenses, Cost of products sold, Marketing and selling expenses, and Research and development expenses in the Consolidated Statements of Earnings.
|
|
January 27, 2019
|
||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
Costs Incurred to Date
(1)
|
||||||
Meals and Beverages
|
$
|
12
|
|
|
$
|
35
|
|
|
$
|
213
|
|
Global Biscuits and Snacks
|
7
|
|
|
16
|
|
|
192
|
|
|||
Campbell Fresh
|
—
|
|
|
3
|
|
|
14
|
|
|||
Corporate
|
5
|
|
|
16
|
|
|
125
|
|
|||
Total
|
$
|
24
|
|
|
$
|
70
|
|
|
$
|
544
|
|
(1)
|
Includes
$25
of pre-tax costs associated with the Global Biscuits and Snacks segment recognized in 2018 related to the Snyder's-Lance cost transformation program and integration.
|
8.
|
Earnings per Share (EPS)
|
9.
|
Noncontrolling Interests
|
10.
|
Pension and Postretirement Benefits
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||||
|
|
Pension
|
|
Postretirement
|
|
Pension
|
|
Postretirement
|
||||||||||||||||||||||||
|
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
||||||||||||||||
Service cost
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
20
|
|
|
18
|
|
|
2
|
|
|
2
|
|
|
41
|
|
|
37
|
|
|
4
|
|
|
4
|
|
||||||||
Expected return on plan assets
|
|
(35
|
)
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
(72
|
)
|
|
—
|
|
|
—
|
|
||||||||
Amortization of prior service credit
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(13
|
)
|
||||||||
Special termination benefits
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||||
Net periodic benefit income
|
|
$
|
(9
|
)
|
|
$
|
(10
|
)
|
|
$
|
(5
|
)
|
|
$
|
(4
|
)
|
|
$
|
(19
|
)
|
|
$
|
(21
|
)
|
|
$
|
(10
|
)
|
|
$
|
(9
|
)
|
11.
|
Financial Instruments
|
|
Balance Sheet Classification
|
|
January 27,
2019 |
|
July 29,
2018 |
||||
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
|
|
$
|
4
|
|
|
$
|
5
|
|
Deferred compensation derivative contracts
|
Other current assets
|
|
2
|
|
|
1
|
|
||
Foreign exchange forward contracts
|
Other current assets
|
|
3
|
|
|
3
|
|
||
Total derivatives not designated as hedges
|
|
|
$
|
9
|
|
|
$
|
9
|
|
Total asset derivatives
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
Balance Sheet Classification
|
|
January 27,
2019 |
|
July 29,
2018 |
||||
Liability Derivatives
|
|
|
|
|
|
||||
Derivatives designated as hedges:
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Accrued liabilities
|
|
$
|
2
|
|
|
$
|
2
|
|
Total derivatives designated as hedges
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Derivatives not designated as hedges:
|
|
|
|
|
|
||||
Commodity derivative contracts
|
Accrued liabilities
|
|
$
|
4
|
|
|
$
|
3
|
|
Foreign exchange forward contracts
|
Accrued liabilities
|
|
1
|
|
|
—
|
|
||
Commodity derivative contracts
|
Other liabilities
|
|
—
|
|
|
1
|
|
||
Total derivatives not designated as hedges
|
|
|
$
|
5
|
|
|
$
|
4
|
|
Total liability derivatives
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
|
January 27, 2019
|
|
July 29, 2018
|
||||||||||||||||||||
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
|
|
$
|
9
|
|
|
$
|
(5
|
)
|
|
$
|
4
|
|
|
$
|
10
|
|
|
$
|
(3
|
)
|
|
$
|
7
|
|
Total liability derivatives
|
|
$
|
7
|
|
|
$
|
(5
|
)
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
(3
|
)
|
|
$
|
3
|
|
|
|
|
Total Cash-Flow Hedge
OCI Activity
|
||||||
Derivatives Designated as Cash-Flow Hedges
|
|
|
January 27,
2019 |
|
January 28,
2018 |
||||
Three Months Ended
|
|
|
|
|
|
||||
OCI derivative gain (loss) at beginning of quarter
|
|
|
$
|
(7
|
)
|
|
$
|
(27
|
)
|
Effective portion of changes in fair value recognized in OCI:
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
|
|
(1
|
)
|
|
(5
|
)
|
||
Forward starting interest rate swaps
|
|
|
—
|
|
|
7
|
|
||
Amount of (gain) loss reclassified from OCI to earnings:
|
Location in Earnings
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Cost of products sold
|
|
—
|
|
|
2
|
|
||
Forward starting interest rate swaps
|
Interest expense
|
|
—
|
|
|
1
|
|
||
OCI derivative gain (loss) at end of quarter
|
|
|
$
|
(8
|
)
|
|
$
|
(22
|
)
|
|
|
|
|
|
|
||||
Six Months Ended
|
|
|
|
|
|
||||
OCI derivative gain (loss) at beginning of year
|
|
|
$
|
(8
|
)
|
|
$
|
(34
|
)
|
Effective portion of changes in fair value recognized in OCI:
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
|
|
(1
|
)
|
|
1
|
|
||
Forward starting interest rate swaps
|
|
|
—
|
|
|
10
|
|
||
Amount of (gain) loss reclassified from OCI to earnings:
|
Location in Earnings
|
|
|
|
|
||||
Forward starting interest rate swaps
|
Interest expense
|
|
1
|
|
|
1
|
|
||
OCI derivative gain (loss) at end of quarter
|
|
|
$
|
(8
|
)
|
|
$
|
(22
|
)
|
|
|
|
|
Amount of (Gain) Loss Recognized in Earnings on Derivatives
|
||||||||||||||
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Derivatives not Designated as Hedges
|
|
Location of (Gain) Loss
Recognized in Earnings |
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
||||||||
Foreign exchange forward contracts
|
|
Other expenses / (income)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Commodity derivative contracts
|
|
Cost of products sold
|
|
—
|
|
|
(2
|
)
|
|
1
|
|
|
—
|
|
||||
Deferred compensation derivative contracts
|
|
Administrative expenses
|
|
—
|
|
|
(4
|
)
|
|
3
|
|
|
(5
|
)
|
||||
Treasury rate lock contracts
|
|
Interest expense
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Total (gain) loss at end of quarter
|
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
4
|
|
|
$
|
(7
|
)
|
12.
|
Variable Interest Entity
|
13.
|
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 27, 2019 |
|
Fair Value Measurements at
January 27, 2019 Using Fair Value Hierarchy |
|
Fair Value
as of July 29, 2018 |
|
Fair Value Measurements at
July 29, 2018 Using Fair Value Hierarchy |
||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange forward contracts
(1)
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Commodity derivative contracts
(2)
|
4
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||||||
Deferred compensation derivative contracts
(3)
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||
Deferred compensation investments
(4)
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||||||
Fair value option investments
(5)
|
70
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
77
|
|
||||||||
Total assets at fair value
|
$
|
83
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
70
|
|
|
$
|
93
|
|
|
$
|
11
|
|
|
$
|
5
|
|
|
$
|
77
|
|
|
Fair Value
as of January 27, 2019 |
|
Fair Value Measurements at
January 27, 2019 Using Fair Value Hierarchy |
|
Fair Value
as of July 29, 2018 |
|
Fair Value Measurements at
July 29, 2018 Using Fair Value Hierarchy |
||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange forward contracts
(1)
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Commodity derivative contracts
(2)
|
4
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
3
|
|
|
1
|
|
|
—
|
|
||||||||
Deferred compensation obligation
(4)
|
105
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|
108
|
|
|
—
|
|
|
—
|
|
||||||||
Total liabilities at fair value
|
$
|
112
|
|
|
$
|
108
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
111
|
|
|
$
|
3
|
|
|
$
|
—
|
|
(1)
|
Based on observable market transactions of spot currency rates and forward rates.
|
(2)
|
Based on quoted futures exchanges and on observable prices of transactions in the marketplace.
|
(3)
|
Based on LIBOR and equity index swap rates.
|
(4)
|
Based on the fair value of the participants’ investments.
|
(5)
|
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 12 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.
|
|
|
Six Months Ended
|
||||||
|
|
January 27,
2019 |
|
January 28,
2018 |
||||
Fair value at beginning of year
|
|
$
|
77
|
|
|
$
|
49
|
|
Gains / (losses)
|
|
(7
|
)
|
|
9
|
|
||
Purchases
|
|
—
|
|
|
12
|
|
||
Fair value at end of quarter
|
|
$
|
70
|
|
|
$
|
70
|
|
|
|
Impairment Charges
|
|
Fair Value
|
||||||||||||||||||||||||||||
January 27, 2019
|
|
Plant Assets
|
|
Trademarks
|
|
Customer Relationships
|
|
Technology
|
|
Plant Assets
|
|
Trademarks
|
|
Customer Relationships
|
|
Technology
|
||||||||||||||||
Bolthouse Farms carrot and carrot ingredients
|
|
$
|
104
|
|
|
$
|
18
|
|
|
$
|
40
|
|
|
$
|
15
|
|
|
$
|
102
|
|
|
$
|
30
|
|
|
$
|
15
|
|
|
$
|
10
|
|
Bolthouse Farms refrigerated beverages and salad dressings
|
|
$
|
9
|
|
|
$
|
74
|
|
|
$
|
22
|
|
|
|
|
$
|
100
|
|
|
$
|
76
|
|
|
$
|
12
|
|
|
|
||||
Garden Fresh Gourmet
|
|
$
|
2
|
|
|
$
|
23
|
|
|
$
|
39
|
|
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
||||
October 28, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Refrigerated soup
|
|
$
|
14
|
|
|
|
|
|
|
|
|
$
|
38
|
|
|
|
|
|
|
|
14.
|
Share Repurchases
|
15.
|
Stock-based Compensation
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
||||||||
Total pre-tax stock-based compensation expense
|
$
|
17
|
|
|
$
|
18
|
|
|
$
|
31
|
|
|
$
|
32
|
|
Tax-related benefits
|
3
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
|
(Options in
thousands)
|
|
|
|
(In years)
|
|
|
|||||
Outstanding at July 29, 2018
|
1,537
|
|
|
$
|
50.36
|
|
|
|
|
|
||
Granted
|
596
|
|
|
$
|
35.74
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Terminated
|
(74
|
)
|
|
$
|
49.05
|
|
|
|
|
|
||
Outstanding at January 27, 2019
|
2,059
|
|
|
$
|
46.17
|
|
|
7.8
|
|
$
|
—
|
|
Exercisable at January 27, 2019
|
1,035
|
|
|
$
|
50.88
|
|
|
6.4
|
|
$
|
—
|
|
|
2019
|
|
2018
|
Risk-free interest rate
|
2.79%
|
|
2.06%
|
Expected dividend yield
|
3.84%
|
|
2.95%
|
Expected volatility
|
25.28%
|
|
19.60%
|
Expected term
|
6.1 years
|
|
6 years
|
Grant-date fair value
|
$6.27
|
|
$6.67
|
|
Units
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
|
(Restricted stock
units in thousands)
|
|
|
|||
Nonvested at July 29, 2018
|
1,652
|
|
|
$
|
47.01
|
|
Granted
|
1,171
|
|
|
$
|
36.35
|
|
Vested
|
(641
|
)
|
|
$
|
47.90
|
|
Forfeited
|
(188
|
)
|
|
$
|
41.50
|
|
Nonvested at January 27, 2019
|
1,994
|
|
|
$
|
40.98
|
|
|
Units
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
|
(Restricted stock
units in thousands)
|
|
|
|||
Nonvested at July 29, 2018
|
1,664
|
|
|
$
|
46.66
|
|
Granted
|
388
|
|
|
$
|
31.29
|
|
Vested
|
—
|
|
|
$
|
—
|
|
Forfeited
|
(689
|
)
|
|
$
|
56.57
|
|
Nonvested at January 27, 2019
|
1,363
|
|
|
$
|
37.28
|
|
|
2019
|
|
2018
|
Risk-free interest rate
|
2.80%
|
|
1.58%
|
Expected dividend yield
|
3.79%
|
|
2.95%
|
Expected volatility
|
24.50%
|
|
19.07%
|
Expected term
|
3 years
|
|
3 years
|
16.
|
Commitments and Contingencies
|
17.
|
Supplemental Financial Statement Data
|
|
January 27,
2019 |
|
July 29,
2018 |
||||
Inventories
|
|
|
|
||||
Raw materials, containers and supplies
|
$
|
465
|
|
|
$
|
478
|
|
Finished products
|
611
|
|
|
721
|
|
||
Total
|
$
|
1,076
|
|
|
$
|
1,199
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
||||||||
Other expenses / (income)
|
|
|
|
|
|
|
|
||||||||
Amortization of intangible assets
|
$
|
15
|
|
|
$
|
4
|
|
|
$
|
30
|
|
|
$
|
8
|
|
Impairment of intangible assets
(1)
|
231
|
|
|
75
|
|
|
231
|
|
|
75
|
|
||||
Net periodic benefit income other than the service cost
|
(20
|
)
|
|
(22
|
)
|
|
(40
|
)
|
|
(64
|
)
|
||||
Investment (gains) / losses
|
(2
|
)
|
|
(8
|
)
|
|
7
|
|
|
—
|
|
||||
Transaction costs
(2)
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
||||
Other
|
2
|
|
|
(3
|
)
|
|
2
|
|
|
(2
|
)
|
||||
Total
|
$
|
226
|
|
|
$
|
70
|
|
|
$
|
230
|
|
|
$
|
41
|
|
•
|
Net sales
increased
24%
in the current quarter to
$2.713 billion
, reflecting a
26
-point benefit from the acquisitions of Snyder's-Lance and Pacific Foods. Excluding the acquisitions, net sales declined due to the negative impact from currency translation and higher promotional spending.
|
•
|
Gross profit, as a percent of sales,
decreased
to
26.3%
from
35.1%
in the year-ago quarter. The decrease was primarily due to impairment charges in the current quarter on the plant assets of Campbell Fresh, cost inflation and higher supply chain costs, and the dilutive impact of acquisitions, partially offset by productivity improvements.
|
•
|
Marketing and selling expenses
increased
16%
to
$264 million
from
$228 million
in the year-ago quarter. The increase was primarily due to the impact of acquisitions, partially offset by lower marketing overhead spending.
|
•
|
Administrative expenses
increased
9%
to
$180 million
from
$165 million
in the year-ago quarter. The increase was primarily due to the impact of acquisitions and costs associated with planned divestitures in the current year, partially offset by lower costs associated with cost savings initiatives.
|
•
|
Other expenses / (income) increased to expense of
$226 million
in the current quarter from expense of
$70 million
in the year-ago quarter. The current quarter included non-cash impairment charges of $231 million on the intangible assets of Campbell Fresh. The year-ago quarter included a non-cash impairment charge of $75 million on the intangible assets of the Bolthouse Farms carrot and carrot ingredients reporting unit and transaction costs of $24 million associated with the acquisition of Snyder's-Lance. The remaining change was primarily due to higher amortization of intangible assets from the recent acquisitions in the current quarter and lower gains on investments.
|
•
|
Interest expense increased to
$93 million
in the current quarter from
$32 million
in the year-ago quarter primarily due to higher levels of debt associated with funding the acquisitions discussed above.
|
•
|
The effective tax rate was
19.2%
in the current quarter compared to negative
35.1%
in the year-ago quarter. The current quarter included a tax charge of $2 million on a transition tax on unremitted foreign earnings as a result of the enactment of the Tax Cuts and Jobs Act of 2017 (the Act). The year-ago quarter included a $124 million net tax benefit related to the remeasurement of deferred tax assets and liabilities and a transition tax on unremitted foreign earnings as a result of the Act. After adjusting for these amounts, the remaining increase was primarily due to the cumulative year-to-date benefit in the prior year of the lower U.S. federal tax rate resulting from the enactment of the Act in December 2017.
|
•
|
We reported a loss per share of
$.20
in the current quarter, compared to earnings of
$.95
in the year-ago quarter. The impact of the adoption new accounting guidance for revenue recognition was an increase of
$.03
per share in the current quarter. The current and prior-year quarter included expenses of
$.97
and
$.05
per share, respectively, from items impacting comparability as discussed below.
|
•
|
Cash flows from operations were
$846 million
in
2019
, compared to
$660 million
in
2018
. The
increase
was primarily due to lower working capital requirements, reflecting significant improvements in our working capital management efforts, and lapping payments on hedges associated with an anticipated debt issuance in the prior year, partially offset by lower cash earnings.
|
•
|
In 2015, we implemented initiatives to reduce costs and to streamline our organizational structure. In 2017, we expanded these cost savings initiatives by further optimizing our supply chain network, primarily in North America, continuing to evolve our operating model to drive efficiencies, and more fully integrating our recent acquisitions. In January 2018, as part of the expanded initiatives, we authorized additional costs to improve the operational efficiency of our thermal supply chain network in North America by closing our manufacturing facility in Toronto, Ontario, and to optimize our information technology infrastructure by migrating certain applications to the latest cloud technology platform. In August 2018, we announced that we will continue to streamline our organization, expand our zero-based budgeting efforts and optimize our manufacturing network. In 2019, we began to include costs associated with the Snyder's-Lance cost transformation program and integration with these initiatives. In the second quarter of 2019, we recorded a pre-tax restructuring charge of $2 million and implementation costs and other related costs of $10 million in Administrative expenses, $9 million in Cost of products sold, $2 million in Marketing and selling expenses, and $1 million in Research and development expenses (aggregate impact of $18 million after tax, or $.06 per share) related to these initiatives. Year-to-date in 2019, we recorded a pre-tax restructuring charge of $21 million and implementation costs and other related costs of $23 million in Administrative expenses, $21 million in Cost of products sold, $4 million in Marketing and selling expenses, and $1 million in Research and development expenses (aggregate impact of $53 million after tax, or $.18 per share) related to these initiatives. In the second quarter of 2018, we recorded a pre-tax restructuring charge of $33 million and implementation costs and other related costs of $26 million in Administrative expenses and $1 million in Cost of products sold (aggregate impact of $46 million after tax, or $.15 per share) related to these initiatives. Year-to-date in 2018, we recorded a pre-tax restructuring charge of $35 million and implementation costs and other related costs of $38 million in Administrative expenses and $6 million in Cost of products sold (aggregate impact of $58 million after tax, or $.19 per share) related to these initiatives. See Note 7 to the Consolidated Financial Statements and "Restructuring Charges and Cost Savings Initiatives" for additional information;
|
•
|
In the second quarter of 2019, interim impairment assessments were performed on the intangible and tangible assets within Campbell Fresh, which includes Garden Fresh Gourmet, Bolthouse Farms carrot and carrot ingredients and Bolthouse Farms refrigerated beverages and salad dressings, as we continue to pursue the divestiture of these businesses. We revised our future outlook for earnings and cash flows for each of these businesses as the divestiture process progressed. We recorded non-cash impairment charges of $104 million on the tangible assets and $73 million on the intangible assets of Bolthouse Farms carrot and carrot ingredients; $96 million on the intangible assets and $9 million on the tangible assets of Bolthouse Farms refrigerated beverages and salad dressings; and $62 million on the intangible assets and $2 million on the tangible assets of Garden Fresh Gourmet. The aggregate impact of the impairment charges was $346 million, of which $115 million was recorded in Cost of products sold and $231 million in Other expenses / (income), ($264 million after tax, or $.88 per share).
|
•
|
In the first quarter of 2019, we announced our intent to divest our Campbell International and Campbell Fresh businesses. In the second quarter of 2019, we incurred costs of
$10 million
in Administrative expenses ($8 million after tax, or $.03 per share) associated with the planned divestitures. Year-to-date in 2019, we incurred costs of
$12 million
in Administrative expenses ($9 million after tax, or $.03 per share) associated with the planned divestitures;
|
•
|
In the second quarter of 2019 and 2018, we reflected the impact on taxes of the enactment of the Act that was signed into law in December 2017. In the second quarter of 2019, we recorded a tax charge of $2 million ($.01 per share) related to a transition tax on unremitted foreign earnings. In the second quarter of 2018, we recorded a tax benefit of $183 million due to the remeasurement of deferred tax assets and liabilities, and a tax charge of $59 million related to a transition tax on unremitted foreign earnings. The net impact was a tax benefit of $124 million ($.41 per share);
|
•
|
In the second quarter of 2018, we announced our intent to acquire Snyder's-Lance and incurred transaction costs of $24 million in Other expenses / (income) ($19 million after tax, or $.06 per share); and
|
•
|
Year-to-date in 2018, we recognized gains of $14 million in Other expenses / (income) ($10 million after tax, or $.03 per share) associated with mark-to-market adjustments for defined benefit pension and postretirement plans.
|
|
Three Months Ended
|
||||||||||||||
|
January 27, 2019
|
|
January 28, 2018
|
||||||||||||
(Millions, except per share amounts)
|
Earnings
Impact
|
|
EPS
Impact
|
|
Earnings
Impact
|
|
EPS
Impact
|
||||||||
Net earnings (loss) attributable to Campbell Soup Company
|
$
|
(59
|
)
|
|
$
|
(.20
|
)
|
|
$
|
285
|
|
|
$
|
.95
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring charges, implementation costs and other related costs
|
$
|
(18
|
)
|
|
$
|
(.06
|
)
|
|
$
|
(46
|
)
|
|
$
|
(.15
|
)
|
Impairment charges
|
(264
|
)
|
|
(.88
|
)
|
|
(74
|
)
|
|
(.25
|
)
|
||||
Costs associated with planned divestitures
|
(8
|
)
|
|
(.03
|
)
|
|
—
|
|
|
—
|
|
||||
Tax reform
|
(2
|
)
|
|
(.01
|
)
|
|
124
|
|
|
.41
|
|
||||
Transaction costs
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(.06
|
)
|
||||
Impact of items on Net earnings (loss)
(1)
|
$
|
(292
|
)
|
|
$
|
(.97
|
)
|
|
$
|
(15
|
)
|
|
$
|
(.05
|
)
|
(1)
|
Sum of the individual amounts does not add due to rounding.
|
|
Six Months Ended
|
||||||||||||||
|
January 27, 2019
|
|
January 28, 2018
|
||||||||||||
(Millions, except per share amounts)
|
Earnings
Impact
|
|
EPS
Impact
|
|
Earnings
Impact
|
|
EPS
Impact
|
||||||||
Net earnings attributable to Campbell Soup Company
|
$
|
135
|
|
|
$
|
.45
|
|
|
$
|
560
|
|
|
$
|
1.85
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring charges, implementation costs and other related costs
|
$
|
(53
|
)
|
|
$
|
(.18
|
)
|
|
$
|
(58
|
)
|
|
$
|
(.19
|
)
|
Impairment charges
|
(275
|
)
|
|
(.91
|
)
|
|
(74
|
)
|
|
(.25
|
)
|
||||
Costs associated with planned divestitures
|
(9
|
)
|
|
(.03
|
)
|
|
—
|
|
|
—
|
|
||||
Tax reform
|
(2
|
)
|
|
(.01
|
)
|
|
124
|
|
|
.41
|
|
||||
Transaction costs
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(.06
|
)
|
||||
Pension and postretirement benefit mark-to-market adjustments
|
—
|
|
|
—
|
|
|
10
|
|
|
.03
|
|
||||
Impact of items on Net earnings
(1)
|
$
|
(339
|
)
|
|
$
|
(1.12
|
)
|
|
$
|
(17
|
)
|
|
$
|
(.06
|
)
|
(1)
|
Sum of the individual amounts does not add due to rounding.
|
|
Three Months Ended
|
|
|
||||||
(Millions)
|
January 27, 2019
|
|
January 28, 2018
|
|
% Change
|
||||
Meals and Beverages
|
$
|
1,230
|
|
|
$
|
1,214
|
|
|
1
|
Global Biscuits and Snacks
|
1,243
|
|
|
708
|
|
|
76
|
||
Campbell Fresh
|
239
|
|
|
257
|
|
|
(7)
|
||
Corporate
|
1
|
|
|
1
|
|
|
—
|
||
|
$
|
2,713
|
|
|
$
|
2,180
|
|
|
24
|
|
Meals and Beverages
|
|
Global Biscuits and Snacks
|
|
Campbell Fresh
|
|
Total
|
Volume and Mix
|
—%
|
|
3%
|
|
(7)%
|
|
—%
|
Price and Sales Allowances
|
—
|
|
1
|
|
—
|
|
—
|
Increased Promotional Spending
(1)
|
(1)
|
|
(1)
|
|
—
|
|
(1)
|
Currency
|
(1)
|
|
(2)
|
|
—
|
|
(1)
|
Acquisitions
|
3
|
|
75
|
|
—
|
|
26
|
|
1%
|
|
76%
|
|
(7)%
|
|
24%
|
(1)
|
Represents revenue reductions from trade promotion and consumer coupon redemption programs. The adoption of new accounting guidance for revenue recognition resulted in a reduction of promotional spending of 50 basis points on Net sales.
|
|
Margin Impact
|
Impairment charges on plant assets
|
(4.2)%
|
Cost inflation, supply chain costs and other factors
(1)
|
(3.4)
|
Impact of acquisitions
|
(2.0)
|
Higher level of promotional spending
|
(0.6)
|
Higher restructuring-related costs
|
(0.3)
|
Mix
|
0.2
|
Price and sales allowances
|
0.3
|
Productivity improvements
|
1.2
|
|
(8.8)%
|
(1)
|
Includes a positive margin impact of 0.8 from cost savings initiatives, which was more than offset by cost inflation and other factors, including higher than expected distribution costs associated with the startup of a new distribution facility in Findlay, Ohio, operated by a third-party logistics provider, and higher interplant freight to maintain customer service levels.
|
|
|
Three Months Ended
|
|
% Change
(2)
|
||||||
(Millions)
|
|
January 27, 2019
|
|
January 28, 2018
|
|
2019/2018
|
||||
Meals and Beverages
|
|
$
|
255
|
|
|
$
|
284
|
|
|
(10)
|
Global Biscuits and Snacks
|
|
185
|
|
|
137
|
|
|
35
|
||
Campbell Fresh
|
|
(14
|
)
|
|
(11
|
)
|
|
n/m
|
||
|
|
426
|
|
|
410
|
|
|
4
|
||
Corporate
|
|
(405
|
)
|
|
(134
|
)
|
|
|
||
Restructuring charges
(1)
|
|
(2
|
)
|
|
(33
|
)
|
|
|
||
Earnings before interest and taxes
|
|
$
|
19
|
|
|
$
|
243
|
|
|
|
(1)
|
See Note 7 to the Consolidated Financial Statements for additional information on restructuring charges.
|
(2)
|
n/m - Not meaningful.
|
•
|
In 2019, we recognized a $6 million tax benefit on $24 million of restructuring charges, implementation costs and other related costs. In 2018, we recognized a $14 million tax benefit on $60 million of restructuring charges, implementation costs and other related costs;
|
•
|
In 2019, we recognized an $82 million tax benefit on $346 million of impairment charges on the intangible and tangible assets of Campbell Fresh. In 2018, we recognized a $1 million tax benefit on the $75 million impairment charge on the intangible assets of the Bolthouse Farms carrot and carrot ingredients reporting unit;
|
•
|
In 2019, we recognized a $2 million tax benefit on $10 million of costs associated with our planned divestitures;
|
•
|
In 2019, we recognized a transition tax on unremitted foreign earnings of $2 million related to the enactment of the Act.
In 2018, we recognized a net tax benefit of $124 million related to the enactment of the Act on the remeasurement of deferred tax assets and liabilities and a transition tax on unremitted foreign earnings; and
|
•
|
In 2018, we recognized a $5 million tax benefit on $24 million of transaction costs associated with the acquisition of Snyder's-Lance.
|
|
Six Months Ended
|
|
|
||||||
(Millions)
|
January 27, 2019
|
|
January 28, 2018
|
|
% Change
|
||||
Meals and Beverages
|
$
|
2,474
|
|
|
$
|
2,453
|
|
|
1
|
Global Biscuits and Snacks
|
2,461
|
|
|
1,396
|
|
|
76
|
||
Campbell Fresh
|
471
|
|
|
491
|
|
|
(4)
|
||
Corporate
|
1
|
|
|
1
|
|
|
—
|
||
|
$
|
5,407
|
|
|
$
|
4,341
|
|
|
25
|
|
Meals and Beverages
|
|
Global Biscuits and Snacks
(2)
|
|
Campbell Fresh
|
|
Total
(2)
|
Volume and Mix
|
(1)%
|
|
1%
|
|
(4)%
|
|
(1)%
|
Price and Sales Allowances
|
—
|
|
1
|
|
—
|
|
—
|
Increased Promotional Spending
(1)
|
(2)
|
|
(1)
|
|
—
|
|
(1)
|
Currency
|
—
|
|
(2)
|
|
—
|
|
(1)
|
Acquisitions
|
4
|
|
78
|
|
—
|
|
27
|
|
1%
|
|
76%
|
|
(4)%
|
|
25%
|
(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
|
Cost inflation, supply chain costs and other factors
(1)
|
(3.2)%
|
Impairment charge on plant assets
|
(2.4)
|
Impact of acquisitions
|
(1.9)
|
Higher level of promotional spending
|
(1.0)
|
Higher restructuring-related costs
|
(0.3)
|
Price and sales allowances
|
0.3
|
Productivity improvements
|
1.2
|
|
(7.3)%
|
(1)
|
Includes a positive margin impact of 0.8 from cost savings initiatives, which was more than offset by cost inflation and other factors, including higher than expected distribution costs associated with the startup of a new distribution facility in Findlay, Ohio, operated by a third-party logistics provider, and higher interplant freight to maintain customer service levels.
|
|
|
Six Months Ended
|
|
% Change
|
||||||
(Millions)
|
|
January 27, 2019
|
|
January 28, 2018
|
|
2019/2018
|
||||
Meals and Beverages
|
|
$
|
549
|
|
|
$
|
615
|
|
|
(11)
|
Global Biscuits and Snacks
|
|
339
|
|
|
254
|
|
|
33
|
||
Campbell Fresh
|
|
(17
|
)
|
|
(17
|
)
|
|
—
|
||
|
|
871
|
|
|
852
|
|
|
2
|
||
Corporate
|
|
(481
|
)
|
|
(162
|
)
|
|
|
||
Restructuring charges
(1)
|
|
(21
|
)
|
|
(35
|
)
|
|
|
||
Earnings before interest and taxes
|
|
$
|
369
|
|
|
$
|
655
|
|
|
|
(1)
|
See Note 7 to the Consolidated Financial Statements for additional information on restructuring charges.
|
•
|
In 2019, we recognized a $17 million tax benefit on $70 million of restructuring charges, implementation costs and other related costs. In 2018, we recognized a $21 million tax benefit on $79 million of restructuring charges, implementation costs and other related costs;
|
•
|
In 2019, we recognized an $85 million tax benefit on $360 million of impairment charges on the intangible and tangible assets of Campbell Fresh. In 2018, we recognized a $1 million tax benefit on the $75 million impairment charges on the intangible assets of the Bolthouse Farms carrot and carrot ingredients reporting unit;
|
•
|
In 2019, we recognized a $3 million tax benefit on $12 million of costs associated with our planned divestitures;
|
•
|
In 2019, we recognized a transition tax on unremitted foreign earnings of $2 million related to the enactment of the Act.
In 2018, we recognized a net tax benefit of $124 million related to the enactment of the Act as described above;
|
•
|
In 2018, we recognized tax expense of $4 million on $14 million of pension and postretirement benefit mark-to-market gains; and
|
•
|
In 2018, we recognized a $5 million tax benefit on $24 million of transaction costs associated with the acquisition of Snyder's-Lance.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
||||||||||||||
(Millions, except per share amounts)
|
January 27,
2019 |
|
January 28,
2018 |
|
January 27,
2019 |
|
January 28,
2018 |
|
Recognized as of January 27, 2019
(1)
|
||||||||||
Restructuring charges
|
$
|
2
|
|
|
$
|
33
|
|
|
$
|
21
|
|
|
$
|
35
|
|
|
$
|
238
|
|
Administrative expenses
|
10
|
|
|
26
|
|
|
23
|
|
|
38
|
|
|
228
|
|
|||||
Cost of products sold
|
9
|
|
|
1
|
|
|
21
|
|
|
6
|
|
|
70
|
|
|||||
Marketing and selling expenses
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
7
|
|
|||||
Research and development expenses
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Total pre-tax charges
|
$
|
24
|
|
|
$
|
60
|
|
|
$
|
70
|
|
|
$
|
79
|
|
|
$
|
544
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Aggregate after-tax impact
|
$
|
18
|
|
|
$
|
46
|
|
|
$
|
53
|
|
|
$
|
58
|
|
|
|
||
Per share impact
|
$
|
.06
|
|
|
$
|
.15
|
|
|
$
|
.18
|
|
|
$
|
.19
|
|
|
|
(1)
|
Includes
$13
million of Restructuring charges and
$12
million of Administrative expenses associated with the Snyder's-Lance cost transformation program and integration recognized in 2018.
|
(Millions)
|
Recognized as of January 27, 2019
|
||
Severance pay and benefits
(1)
|
$
|
214
|
|
Asset impairment/accelerated depreciation
|
66
|
|
|
Implementation costs and other related costs
(2)
|
264
|
|
|
Total
|
$
|
544
|
|
(1)
|
Includes
$13
million of charges associated with the Snyder's-Lance cost transformation program and integration recognized in 2018.
|
(2)
|
Includes
$12
million of charges associated with the Snyder's-Lance cost transformation program and integration recognized in 2018.
|
|
Year Ended
|
||||||||||||||
(Millions)
|
July 29, 2018
|
|
July 30, 2017
|
|
July 31, 2016
|
|
August 2, 2015
|
||||||||
Total pre-tax savings
|
$
|
455
|
|
|
$
|
325
|
|
|
$
|
215
|
|
|
$
|
85
|
|
|
January 27, 2019
|
||||||||||
(Millions)
|
Three Months Ended
|
|
Six Months Ended
|
|
Costs Incurred to Date
(1)
|
||||||
Meals and Beverages
|
$
|
12
|
|
|
$
|
35
|
|
|
$
|
213
|
|
Global Biscuits and Snacks
|
7
|
|
|
16
|
|
|
192
|
|
|||
Campbell Fresh
|
—
|
|
|
3
|
|
|
14
|
|
|||
Corporate
|
5
|
|
|
16
|
|
|
125
|
|
|||
Total
|
$
|
24
|
|
|
$
|
70
|
|
|
$
|
544
|
|
(1)
|
Includes
$25
million of pre-tax costs associated with the Global Biscuits and Snacks segment recognized in 2018 related to the Snyder's-Lance cost transformation program and integration.
|
•
|
our ability to execute on and realize the expected benefits from the actions we intend to take as a result of our recent strategy and portfolio review;
|
•
|
our ability to differentiate our products and protect our category leading positions, especially in soup;
|
•
|
our ability to complete and to realize the projected benefits of planned divestitures and other business portfolio changes;
|
•
|
our ability to realize the projected benefits, including cost synergies, from the recent acquisitions of Snyder's-Lance and Pacific Foods;
|
•
|
our ability to realize projected cost savings and benefits from efficiency and/or restructuring initiatives;
|
•
|
our indebtedness and ability to pay such indebtedness;
|
•
|
disruptions to our supply chain, including fluctuations in the supply of and inflation in energy and raw and packaging materials cost;
|
•
|
our ability to manage changes to our organizational structure and/or business processes, including selling, distribution, manufacturing and information management systems or processes;
|
•
|
the impact of strong competitive responses to our efforts to leverage brand power with product innovation, promotional programs and new advertising;
|
•
|
the risks associated with trade and consumer acceptance of product improvements, shelving initiatives, new products and pricing and promotional strategies;
|
•
|
changes in consumer demand for our products and favorable perception of our brands;
|
•
|
changing inventory management practices by certain of our key customers;
|
•
|
a changing customer landscape, with value and e-commerce retailers expanding their market presence, while certain of our key customers maintain significance to our business;
|
•
|
product quality and safety issues, including recalls and product liabilities;
|
•
|
the costs, disruption and diversion of management’s attention associated with campaigns commenced by activist investors;
|
•
|
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;
|
•
|
the impact of non-U.S. operations, including trade restrictions, public corruption and compliance with foreign laws and regulations;
|
•
|
impairment to goodwill or other intangible assets;
|
•
|
our ability to protect our intellectual property rights;
|
•
|
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 talent;
|
•
|
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.
|
|
|
3
|
|
|
|
10(a)*
|
|
|
|
10(b)*
|
|
|
|
31(a)
|
|
|
|
31(b)
|
|
|
|
32(a)
|
|
|
|
32(b)
|
|
|
|
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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By:
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/s/ Stanley Polomski
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Stanley Polomski
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Vice President and Controller
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Campbell Investment Company
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Campbell Finance Corp. LLC
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Campbell Food Service Company
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Campbell Sales Company
|
Campbell Soup Supply Company LLC
|
Campbell Urban Renewal Corporation
|
CSC Brands LP
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CSC Insights, Inc.
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CSC Standards, Inc.
Ecce Panis, Inc.
Garden Fresh Gourmet Foods, Inc. (the legal entity formerly known as Stockpot, Inc.).
Joseph Campbell Company
|
Pepperidge Farm, Incorporated
|
January 1, 2014
Plum PBC
January 1, 2016
Kelsen, Inc.
January 1, 2017
Wm. Bolthouse Farms, Inc.
August 1, 2018
Baptista’s Bakery, LLC
S-L Distribution Company, LLC
S-L Snacks AZ, LLC
S-L Snacks GA, LLC
S-L Snacks IN, LLC
S-L Snacks Logistics, LLC
S-L Snacks MA, LLC
S-L Snacks National, LLC
S-L Snacks NC, LLC
S-L Snacks OH, LLC
S-L Snacks OR, LLC
S-L Snacks PA, LLC
S-L Snacks WI, LLC
Snyder’s-Lance, Inc.
January 1, 2019
Pacific Foods of Oregon, LLC
|
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By:
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/s/ Mark A. Clouse
|
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||
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Name:
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Mark A. Clouse
|
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Title:
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President and Chief Executive Officer
|
|
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By:
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/s/ Anthony P. DiSilvestro
|
|
||
|
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Name:
|
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Anthony P. DiSilvestro
|
|
|
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Title:
|
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Senior Vice President and Chief Financial
|
|
|
|
|
|
Officer
|
|
|
By:
|
/s/ Mark A. Clouse
|
|
||
|
|
Name:
|
|
Mark A. Clouse
|
|
|
|
Title:
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
By:
|
/s/ Anthony P. DiSilvestro
|
|
||
|
|
Name:
|
|
Anthony P. DiSilvestro
|
|
|
|
Title:
|
|
Senior Vice President and Chief Financial
|
|
|
|
|
|
Officer
|
|