caret-down

Campbell Reports First Quarter Results: Earnings Per Share of $.73 Includes $.14 Gain from Tax Settlement; Adjusted Earnings Per Share Increase 7 Percent; Company Announces $600 Million Share Repurchase Plan

CAMDEN, N.J.–(BUSINESS WIRE)–Nov. 21, 2005–Campbell Soup
Company (NYSE:CPB) today reported net earnings increased to $302
million in the first quarter ended October 30, 2005 versus $230
million in the prior year. Diluted earnings per share for the quarter
were $.73, compared with $.56 in the year-ago period. These results
included several items that impact the comparability of results this
quarter with a year ago.

The company also announced that its Board of Directors has
authorized the purchase of up to $600 million of company stock on the
open market or through privately negotiated transactions through the
end of fiscal 2008. In addition, the company will continue to purchase
shares, under separate authorization, as part of its practice of
buying back shares sufficient to offset shares issued under incentive
compensation plans.

Beginning in fiscal 2006, the company adopted a new accounting
standard (SFAS 123R) that requires all stock-based compensation to be
expensed. Had all stock-based compensation been expensed in the
year-ago quarter, net earnings would have been $224 million and
diluted earnings per share would have been $.54. For the full fiscal
year 2005, diluted earnings per share would have been $1.64.

Net earnings and earnings per share in the first quarter of fiscal
2006 were impacted by the following items:

    --  The company recorded a non-cash tax benefit of $47 million
        resulting from the favorable resolution of a U.S. tax
        contingency related to transactions involving government
        securities in a prior period. In addition, the company reduced
        interest expense and accrued interest payable by $21 million
        and adjusted deferred tax expense by $8 million ($13 million
        after tax). The aggregate non-cash impact of the settlement on
        net earnings was $60 million, or $.14 per share.

    --  The company finalized its plan to repatriate earnings from
        non-U.S. subsidiaries under the provisions of the American
        Jobs Creation Act, and as a result, recorded incremental tax
        expense of $8 million, or $.02 per share, associated with
        one-time incremental dividends of $225 million. This
        incremental dividend is in addition to $200 million that was
        provided for in fiscal year 2005, raising the total dividends
        to be repatriated under the American Jobs Creation Act to $425
        million.

    --  The company changed the method of accounting for certain U.S.
        inventories from the LIFO method to the average cost method.
        The impact of the change to this preferable method of
        accounting resulted in a $13 million pre-tax gain. The impact
        on net earnings was $8 million, or $.02 per share. Prior
        periods were not restated since the impact of the change on
        previously issued financial statements was not considered
        material.

After adjusting for these items, net earnings would have been $242
million in the first quarter of fiscal 2006 and $224 million in the
year-ago period, an increase of 8 percent. Earnings per share would
have been $.58 in the first quarter of fiscal 2006 and $.54 in the
year-ago period, an increase of 7 percent.

For the first quarter, sales rose 1 percent to $2,110 million,
following a strong year-ago quarter when sales increased 10 percent.
Sales for the quarter reflect the following factors:

    --  Volume and mix subtracted 3 percent

    --  Price and sales allowances added 4 percent

    --  Increased promotional spending subtracted 1 percent

    --  Currency added 1 percent

Douglas R. Conant, Campbell’s President and Chief Executive
Officer, said, “Our plan to drive quality growth is on track. This
quarter, although our ready-to-serve soup sales were significantly
weaker due to a change in our pricing and promotional activity from a
year ago, we continued to improve our profit margin while laying the
foundation for driving top-line growth for the balance of the year,
consistent with our goal. I am confident in the plans we have in place
to drive growth across our portfolio, including U.S. Soup. The $600
million share repurchase program we announced today leverages our
strong cash flow generation and reflects the confidence we have in our
long-term growth prospects.”

Excluding the gain of $.14 related to the favorable tax
settlement, and other items affecting comparability, the company
confirmed its fiscal 2006 guidance for earnings per share to increase
between 5 and 7 percent from the adjusted fiscal year 2005 base of
$1.64.

    Summary of Fiscal 2006 First Quarter Results by Segment

    U.S. Soup, Sauces and Beverages

Sales for U.S. Soup, Sauces and Beverages were $970 million, a 2
percent decrease compared with a year ago. The change in sales
reflects the following factors:

    --  Volume and mix subtracted 7 percent

    --  Price and sales allowances added 5 percent

Operating earnings were $288 million compared with $275 million in
the prior-year period. Earnings for the first quarter of this year
included an $8 million benefit from the change in the method of
accounting for inventory. Prior-year earnings would have been $1
million lower had all stock-based compensation been expensed.
Operating earnings were driven by higher selling prices and
productivity gains, which more than offset the impact of lower sales
and cost inflation.

Soup sales for the quarter declined 6 percent, driven by the
following:

    --  Sales of "Campbell's" condensed soups increased 1 percent
        following a strong year-ago quarter that delivered 10 percent
        growth. Both eating and cooking varieties delivered gains in
        this year's quarter. The condensed soup segment continues to
        benefit from the gravity-feed shelving systems which are now
        installed in more than 14,000 grocery stores and the
        continuation of more effective advertising.

    --  Sales of ready-to-serve soups declined 17 percent for the
        quarter versus year ago when sales were up 18 percent.
        "Campbell's Chunky" soups in cans were a primary driver of the
        decline as the business was adversely affected by a change in
        promotional activity in comparison to the year-ago period in
        which aggressive discounting drove significantly higher
        volume. In addition, the discontinuance of "Campbell's Kitchen
        Classics" soups contributed to the declines in ready-to-serve
        soups. "Campbell's Select" soup sales increased in the quarter
        driven by the introduction of "Campbell's Select Gold Label"
        soups, which use aseptic technology.

    --  Sales of microwaveable soups increased in the quarter driven
        by the introduction of "Campbell's" Red and White
        ready-to-serve Chicken Noodle, Tomato, and Vegetable soups in
        bowls.

    --  Sales of "Swanson" broth increased 9 percent for the quarter.
        Volume gains were achieved behind the continued growth in
        cooking usage and consumers' growing preference for
        aseptically-packaged broth.

    Highlights of this segment's other businesses include:

    --  "V8" vegetable juice recorded a double-digit sales increase as
        the business benefited from new and more effective
        advertising. "Campbell's" tomato juice sales also increased,
        while sales of "V8 Splash" juice beverages declined.

    --  "Campbell's Chunky" chili canned sales declined in comparison
        to a year ago when the product line was introduced. This was
        partially offset by sales from the launch of new microwaveable
        bowls.

    --  "Campbell's SpaghettiOs" pasta sales increased as consumers
        continue to respond positively to the transition from the
        "Franco-American" brand to the "Campbell's" brand supported by
        new advertising.

    --  "Prego" pasta sauce sales declined for the quarter due to high
        levels of competitive activity in the category.

    --  Sales of "Pace" Mexican sauces increased for the quarter
        driven by a new and more effective advertising campaign.

    Baking and Snacking

Sales for Baking and Snacking were $458 million, a 2 percent
increase compared with a year ago.

    A breakdown of the change in sales follows:

    --  Volume and mix subtracted 2 percent

    --  Price and sales allowances added 3 percent

    --  Increased promotional spending subtracted 1 percent

    --  Currency added 2 percent

Operating earnings were $50 million compared with $46 million in
the prior-year period. Earnings for the first quarter of this year
included a $5 million benefit from the change in the method of
accounting for inventory. Prior-year earnings would have been $2
million lower had all stock-based compensation been expensed.
Operating earnings for the quarter were also driven by higher earnings
at Arnott’s and favorable currency, which were partially offset by
declines at Pepperidge Farm due to a higher level of marketing
expenses in support of the launch of the new “Pepperidge Farm Whims”
poppable snacks.

    Further details of sales results include the following:

    --  Pepperidge Farm sales grew as fresh bakery and cookies and
        cracker sales increased, more than offsetting declines in its
        frozen business.

    --  Sales growth of "Pepperidge Farm" fresh bread and bakery
        products was driven by breakfast and sandwich items,
        highlighted by the continued success of English muffins, whole
        grain and "Farmhouse" breads, and sandwich rolls.

    --  "Pepperidge Farm" cookies and cracker sales increased,
        primarily due to solid performance of "Pepperidge Farm"
        Chocolate Chunk cookies, as well as gains in distinctive
        crackers. Sales of "Pepperidge Farm Goldfish" snack crackers
        were up slightly in the quarter.

    --  Arnott's sales increased versus a year ago due to favorable
        currency and gains on Arnott's two biggest icon brands,
        "Shapes" and "Tim Tams," which was aided by the strong
        performance of new "Tim Tam" Balls.

    International Soup and Sauces

Sales for International Soup and Sauces were $420 million, a 1
percent increase compared with the year-ago period, due to currency.

Operating earnings were flat at $55 million. Prior year earnings
would have been $1 million lower had all stock-based compensation been
expensed. Operating earnings growth in Canada and currency gains were
offset by declines in Europe and Latin America.

    Further details of sales results include the following:

    --  Sales in Europe declined during the first quarter due to
        weakness in the U.K. business and the unfavorable impact of
        currency.

    --  In Asia Pacific, sales increased significantly driven by
        continued growth in soup and beverages in Australia.
        Highlights for the quarter include the launch of "V8 Plus"
        beverages and expanded distribution of microwaveable soups.

    --  The Canadian business delivered strong sales results driven by
        gains across condensed and ready-to-serve soups and broth.
        "Campbell's Soup at Hand" was successfully introduced in the
        quarter. Favorable currency also contributed to sales gains.

    Other

The balance of the portfolio includes the Godiva Chocolatier
business worldwide and the Away From Home business in the U.S. and
Canada.

Sales grew 13 percent to $262 million compared with the same
period a year ago.

    A breakdown of the change in sales follows:

    --  Volume and mix added 10 percent

    --  Price and sales allowances added 3 percent

Operating earnings were $26 million compared with $22 million in
the prior-year period. Prior year earnings would have been $1 million
lower had all stock-based compensation been expensed. Operating
earnings growth was also driven by strong sales growth and margin
improvements in the Away From Home business.

    Further details include the following:

    --  Godiva Chocolatier sales grew at a double-digit rate, driven
        by solid performance in both the U.S. and international
        markets. North America same-store retail sales increased 10
        percent in the quarter. In the U.S., new "Chocolixir"
        beverages and "Godiva Platinum," a new chocolate collection,
        delivered strong results. In Japan, the introduction of
        "Godiva Platinum" and refurbished boutique stores contributed
        to sales gains.

    --  Away From Home sales continued to grow, driven by double-digit
        growth in refrigerated soups marketed through retail deli
        programs. Solid gains in both frozen and canned soups and
        bakery products sold through the Away From Home channels also
        contributed to growth.

    Non-GAAP Financial Information

A reconciliation of the adjusted fiscal 2006 and 2005 financial
information to the reported financial information is attached to this
release and can also be found on the company’s website at
www.campbellsoupcompany.com in the “Investor Center” section.

Conference Call

The company will host a conference call to discuss these results
on November 21 at 10:00 a.m. Eastern Standard Time. U.S. participants
may access the call at 1-888-791-1856 and non-U.S. participants at
1-773-756-4600. Participants should call at least five minutes prior
to the starting time. The passcode is “Campbell Soup” and the
conference leader is Len Griehs. The call will also be broadcast live
over the Internet at www.campbellsoupcompany.com and can be accessed
by clicking on the “Webcast” banner. A recording of the call will be
available approximately two hours after it is completed through
midnight November 25, 2005 at 1-866-428-3803 or 1-203-369-0904.

Forward-Looking Statements

This release contains “forward-looking statements” which reflect
the company’s current expectations about its future plans and
performance, including statements concerning the impact of marketing
investments and strategies, pricing, new product introductions and
innovation, cost-saving initiatives and quality improvement on sales,
earnings and margins. These forward-looking statements rely on a
number of assumptions and estimates which could be inaccurate and
which are subject to risks and uncertainties. Actual results could
vary materially from those anticipated or expressed in any
forward-looking statement made by the company. Please refer to the
company’s most recent Form 10-K and subsequent filings for a further
discussion of these risks and uncertainties. The company disclaims any
obligation or intent to update the forward-looking statements in order
to reflect events or circumstances after the date of this release.

Reporting Segments

Beginning in fiscal year 2005, Campbell Soup Company earnings
results are reported for the following segments:

U.S. Soup, Sauces and Beverages includes the following retail
businesses: “Campbell’s” brand condensed and ready-to-serve soups,
“Swanson” broth and canned poultry businesses, “Prego” pasta sauce,
“Pace” Mexican sauce, “Campbell’s Chunky” chili, “Campbell’s” canned
pasta, gravies and beans, “Campbell’s Supper Bakes” meal kits, “V8”
vegetable juices, “V8 Splash” juice beverages, and “Campbell’s” tomato
juice.

Baking and Snacking includes the following businesses: “Pepperidge
Farm” cookies, crackers, breads and frozen products in U.S. retail,
“Arnott’s” biscuits in Australia and Asia Pacific, and “Arnott’s”
salty snacks in Australia.

International Soup and Sauces includes the soup, sauce and
beverage businesses outside of the United States, including Canada,
Europe, Mexico, Latin America, and the Asia Pacific region.

Other includes the Godiva Chocolatier business worldwide and the
Away From Home business in the U.S. and Canada.

About Campbell Soup Company

Campbell Soup Company is a global manufacturer and marketer of
high quality simple meals, including soup, baked snacks,
vegetable-based beverages, and premium chocolate products.

Founded in 1869, the company has a portfolio of more than 20
market-leading brands, including “Campbell’s,” “Pepperidge Farm,”
“Arnott’s,” “V8,” and “Godiva.” For more information on the company,
visit Campbell’s website at www.campbellsoupcompany.com.


                  CAMPBELL SOUP COMPANY CONSOLIDATED
                  STATEMENTS OF EARNINGS (unaudited)
                 (millions, except per share amounts)


                                                THREE MONTHS ENDED
                                                ------------------
                                              October       October
                                              30, 2005      31, 2004
                                            ------------  ------------

Net sales                                    $    2,110    $    2,091
                                            ------------  ------------

Costs and expenses
    Cost of products sold                         1,228         1,245
    Marketing and selling expenses                  320           314
    Administrative expenses                         138           129
    Research and development expenses                24            20
    Other expenses / (income)                        (1)            2
                                            ------------  ------------
Total costs and expenses                          1,709         1,710
                                            ------------  ------------

Earnings before interest and taxes                  401           381
Interest, net                                        26            44
                                            ------------  ------------
Earnings before taxes                               375           337
Taxes on earnings                                    73           107
                                            ------------  ------------
Net earnings                                 $      302    $      230
                                            ============  ============

Per share - basic
   Net earnings                              $      .74    $      .56
                                            ============  ============

   Dividends                                 $      .18    $      .17
                                            ============  ============

Weighted average shares outstanding - basic         409           409
                                            ============  ============


Per share - assuming dilution
   Net earnings                              $      .73    $      .56
                                            ============  ============

Weighted average shares outstanding
  - assuming dilution                               414           412
                                            ============  ============




The company adopted SFAS 123R in fiscal 2006 which requires that
all stock-based awards be expensed. Had compensation expense been
recognized in fiscal 2005 for all stock-based awards, an additional
pre-tax expense of $10 would have been recognized. Net earnings would
have been $224 and diluted earnings per share would have been $.54.
The 2005 pre-tax incremental compensation expense would have been
recognized as follows on the Consolidated Statements of Earnings: Cost
of products sold - $1; Marketing and selling - $3; Administrative -
$5; and Research and development - $1.

In fiscal 2006, the company changed the method of accounting for
certain U.S. inventories from the LIFO method to the average cost
method. The impact of the change was reflected as a one-time non-cash
pre-tax benefit of $13 ($8 after tax or $.02 per share).

In fiscal 2006, the company recorded a non-cash tax benefit of $47
resulting from the favorable resolution of a U.S. tax contingency
related to a prior period. In addition, the company reduced interest
expense and accrued interest payable by $21 and adjusted deferred tax
expense by $8 ($13 after tax). The aggregate non-cash impact of the
settlement on net earnings was $60, or $.14 per share.

During the quarter, an incremental tax expense of $8 (or $.02 per
share) was recorded related to repatriated earnings from non-U.S.
subsidiaries under the provision of the American Jobs Creation Act.





                  CAMPBELL SOUP COMPANY CONSOLIDATED
        SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited)
                 (millions, except per share amounts)



                                           THREE MONTHS ENDED
                                           ------------------

                                           October   October   Percent
Sales                                      30, 2005  31, 2004  Change
-----                                      --------  --------  -------
Contributions:
   U.S. Soup, Sauces and
    Beverages                              $   970   $   994       -2%
   Baking and Snacking                         458       449        2%
   International Soup and
    Sauces                                     420       416        1%
   Other                                       262       232       13%
                                           --------  --------
Total sales                                $ 2,110   $ 2,091        1%
                                           ========  ========





Earnings
--------
Contributions:
   U.S. Soup, Sauces and
    Beverages                              $   288   $   275        5%
   Baking and Snacking                          50        46        9%
   International Soup and
    Sauces                                      55        55        0%
   Other                                        26        22       18%
                                           --------  --------
Total operating earnings                       419       398        5%
Unallocated corporate expenses                 (18)      (17)
                                           --------  --------

Earnings before interest and
 taxes                                         401       381        5%
Interest, net                                  (26)      (44)
Taxes on earnings                              (73)     (107)
                                           --------  --------
Net earnings                               $   302   $   230       31%
                                           ========  ========

Net earnings per share -
 assuming dilution                         $   .73   $   .56       30%
                                           ========  ========




The company adopted SFAS 123R in fiscal 2006 which requires that
all stock-based awards be expensed. Had compensation expense been
recognized in fiscal 2005 for all stock-based awards, an additional
pre-tax expense of $10 would have been recognized. Net earnings would
have been $224 and diluted earnings per share would have been $.54.
The 2005 pre-tax incremental compensation expense would have been
recognized as follows: U.S. Soup, Sauces and Beverages - $1; Baking
and Snacking - $2; International Soup and Sauces - $1; Other - $1; and
Unallocated Corporate - $5.

In fiscal 2006, the company changed the method of accounting for
certain U.S. inventories from the LIFO method to the average cost
method. The impact of the change was reflected as a one-time non-cash
pre-tax benefit of $13 ($8 after tax or $.02 per share). The pre-tax
benefit is reflected as follows: U.S. Soup, Sauces and Beverages - $8
and Baking and Snacking - $5.

In fiscal 2006, the company recorded a non-cash tax benefit of $47
resulting from the favorable resolution of a U.S. tax contingency
related to a prior period. In addition, the company reduced interest
expense and accrued interest payable by $21 and adjusted deferred tax
expense by $8 ($13 after tax). The aggregate non-cash impact of the
settlement on net earnings was $60, or $.14 per share.

During the quarter, an incremental tax expense of $8 (or $.02 per
share) was recorded related to repatriated earnings from non-U.S.
subsidiaries under the provision of the American Jobs Creation Act.





                 CAMPBELL SOUP COMPANY CONSOLIDATED
                     BALANCE SHEETS (unaudited)
                             (millions)



                                                 October     October
                                                 30, 2005    31, 2004
                                                ----------  ----------

Current assets                                  $   1,910   $   1,857

Plant assets, net                                   1,957       1,916

Intangible assets, net                              3,006       3,103

Other assets                                          291         340
                                                ----------  ----------
     Total assets                               $   7,164   $   7,216
                                                ==========  ==========


Current liabilities                             $   2,438   $   2,590

Long-term debt                                      2,225       2,565

Nonpension postretirement benefits                    278         295

Other liabilities                                     710         649

Shareowners' equity                                 1,513       1,117
                                                ----------  ----------

     Total liabilities and shareowners' equity  $   7,164   $   7,216
                                                ==========  ==========


Total debt                                      $   2,976   $   3,457
                                                ==========  ==========

Cash and cash equivalents                       $      45   $      44
                                                ==========  ==========

Reconciliation of GAAP and Non-GAAP Financial Measures

Campbell Soup Company uses certain “non-GAAP” financial measures
as defined by the Securities and Exchange Commission in certain
communications. These “non-GAAP” financial measures are measures of
performance not defined by accounting principles generally accepted in
the United States and should be considered in addition to, not in lieu
of, GAAP reported measures.

The impact of changes in accounting methods and certain tax
matters on financial information are as follows:


    (1) In fiscal 2006, the company changed the method of determining
        the cost of certain U.S. inventories from the LIFO method to
        the average cost method. As a result, the company recorded a
        $13 million pre-tax, $8 million after tax, benefit from the
        change in accounting method. Prior periods were not restated
        since the impact on previously issued financial statements was
        not considered material.

    (2) In fiscal 2006, the company adopted SFAS 123R which requires
        that all stock-based compensation be expensed based on the
        fair value of the awards. In fiscal 2005, the company did not
        recognize compensation expense for stock options under
        previous accounting guidelines. This adjustment reflects the
        pro forma impact had all stock-based awards been expensed.

    (3) In fiscal 2006, the company recorded a non-cash tax benefit of
        $47 million resulting from the favorable resolution of a U.S.
        tax contingency related to a prior period. In addition, the
        company reduced interest expense and accrued interest payable
        by $21 million and adjusted deferred tax expense by $8 million
        ($13 million after tax). The aggregate non-cash impact of the
        settlement on net earnings was $60 million, or $.14 per share.

    (4) In fiscal 2006, the company recorded incremental tax expense
        of $8 million associated with the repatriation of earnings
        under the American Jobs Creation Act.

The table below reconciles financial information, presented in
accordance with GAAP, to financial information excluding the impact of
changes in accounting methods and certain tax matters:


                                                First Quarter
                                              -----------------
                                              Oct. 30, Oct. 31,    %
                                              2005     2004     Change
                                              -------- -------- ------

Earnings before interest and taxes, as
 reported                                    $    401  $   381
 Deduct:  Impact of change in inventory
  accounting method (1)                           (13)       -
 Deduct:  Impact had all stock-based awards
  been expensed under SFAS 123R (2)                 -      (10)
                                             --------- --------
Adjusted Earnings before interest and taxes  $    388  $   371
                                             --------- --------

Interest, net,  as reported                  $     26  $    44
 Add: Reduction in interest expense related
  to the favorable resolution of tax
  contingency (3)                                  21        -
                                             --------- --------
Adjusted Interest, net                       $     47  $    44
                                             --------- --------

Adjusted Earnings before taxes               $    341  $   327      4%
                                             --------- --------

Taxes on earnings, as reported               $     73  $   107
 Deduct:  Tax impact of change in inventory
  accounting method (1)                            (5)       -
 Deduct:  Tax impact had all stock-based
  awards been expensed under SFAS 123R (2)          -       (4)
 Add: Adjustment to tax expense related to
  the favorable resolution of tax
  contingency (3)                                  39        -
 Deduct: Incremental tax recorded for
  earnings to be repatriated under the
  American Jobs Creation Act (4)                   (8)       -
                                             --------- --------
Adjusted Taxes on earnings                   $     99  $   103
                                             --------- --------
Adjusted effective income tax rate               29.0%    31.5%

Net earnings, as reported                    $    302  $   230
 Deduct: Impact of change in inventory
  accounting method (1)                            (8)       -
 Deduct: Impact had all stock-based awards
  been expensed under SFAS 123R (2)                 -       (6)
 Deduct: Net adjustment to taxes and
  interest expense related to the favorable
  resolution of  tax contingency (3)              (60)       -
 Add: Incremental tax recorded for earnings
  to be repatriated under the American Jobs
  Creation Act (4)                                  8        -
                                             --------- --------
Adjusted Net earnings                        $    242  $   224      8%
                                             ========= ========

Earnings per share, as reported              $   0.73  $  0.56
 Deduct: Impact of change in inventory
  accounting method (1)                         (0.02)       -
 Deduct: Impact had all stock-based awards
  been expensed under SFAS 123R (2)                 -    (0.02)
 Deduct:  Net adjustment to taxes and
  interest expense related to the favorable
  resolution of tax contingency (3)             (0.14)       -
 Add: Incremental tax recorded for
  earnings to be repatriated under the
  American Jobs Creation Act (4)                 0.02        -
                                             --------- --------
Adjusted Earnings per share*                 $   0.58  $  0.54      7%
                                             ========= ========


* The sum of the individual per share amounts does not equal net
earnings per share due to rounding.

The company believes that financial information excluding certain
changes in accounting methods and certain other transactions not
considered to be part of the ongoing business improves the
comparability of year-to-year results. Consequently, the company
believes that investors may be able to better understand its earnings
results if these transactions are excluded from the results.

    CONTACT: Campbell Soup Company
             Jerry S. Buckley (Media)
             (856) 342-6007
                 or
             Leonard F. Griehs (Analysts)
             (856) 342-6428

    SOURCE: Campbell Soup Company