caret-down

Campbell Reports Third Quarter Earnings Per Share of $.40 and Expects to Exceed Previous Full-Year Guidance; Net Sales Increase 6 Percent; U.S. Soup Sales Rise 15 Percent

CAMDEN, N.J., May 22, 2006 (BUSINESS WIRE) — Campbell Soup Company (NYSE:CPB) today reported net
earnings increased to $166 million in the third quarter ended April
30, 2006 from $146 million in the prior year. Diluted earnings per
share for the quarter were $.40, compared with $.35 in the year-ago
period. Beginning in fiscal year 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 $138
million and diluted earnings per share would have been $.33. After
factoring in this item, for the third quarter net earnings increased
20 percent and earnings per share increased 21 percent.

For the third quarter, net sales rose 6 percent to $1,836 million,
reflecting the following factors:

— Volume and mix added 4 percent

— Price and sales allowances added 3 percent

— Reduced promotional spending added 1 percent

— Currency subtracted 2 percent

Net sales were $6,227 million for the first nine months of fiscal
year 2006, an increase of 3 percent compared with the year-ago period,
reflecting the following factors:

— Price and sales allowances added 4 percent

— Currency subtracted 1 percent

For the first nine months of fiscal year 2006, the company
reported net earnings of $722 million versus $611 million a year
earlier and earnings per share of $1.74 versus $1.48 reported in the
year-ago period.

The comparability of net earnings and earnings per share for the
first nine months was impacted by the following items:

— During the first quarter, the company recorded a non-cash tax
benefit resulting from the favorable resolution of a U.S. tax
contingency related to transactions involving government
securities in a prior period. The aggregate non-cash benefit
of the settlement on net earnings was $60 million, or $.14 per
share.

— During the first quarter, 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.

— During the first quarter, 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 recorded
in the first quarter was a $13 million pre-tax gain. The
impact on net earnings was $8 million, or $.02 per share.

— For the first nine months of the prior year, earnings would
have been $22 million, or $.05 per share lower, had all
stock-based compensation been expensed.

After factoring in these items for the first nine months, adjusted
net earnings would be $662 million compared with $589 million in the
prior year, an increase of 12 percent, and adjusted earnings per share
would be $1.60 compared with $1.42 in the prior year, an increase of
13 percent.

Cash flow from operations for the first nine months of fiscal year
2006 was $977 million versus $772 million in the year-ago period, an
increase of 27 percent.

Douglas R. Conant, Campbell’s President and Chief Executive
Officer, said, “We delivered an outstanding quarter. Our U.S. soup
business was exceptionally strong on both the top and bottom line. Our
strategy to direct our marketing spending toward better communicating
the quality, convenience and value of our soups and away from heavy
promotional activity worked very well for the quarter and year to
date. Our continued emphasis on innovation and more effective
marketing programs, including advertising, is working. As we look
ahead to next soup season with our strategic initiatives to introduce
lower sodium soups and expand our premium soup offerings, we plan to
increase our investment to leverage this year’s momentum.

“Beyond U.S. soup, we also delivered strong results in our U.S.
sauce and beverage businesses, as well as Pepperidge Farm and Canada.
While we are pleased with the overall performance of our North
American business, our international business is performing below our
growth expectations. We are taking actions to improve the overall
performance of our international portfolio.”

Conant continued, “Previously, we provided guidance that we
expected our fiscal 2006 earnings per share to increase between 5 and
7 percent from the adjusted fiscal year 2005 base of $1.64. Based on
our strong year-to-date performance, we now expect that our fiscal
2006 earnings per share will increase between 9 and 10 percent from
this adjusted base.”

Summary of Fiscal 2006 Third Quarter and Nine Month Results by
Segment

U.S. Soup, Sauces and Beverages

Sales for U.S. Soup, Sauces and Beverages were $713 million, a 14
percent increase compared with a year ago. The change in sales
reflects the following factors:

— Volume and mix added 8 percent

— Price and sales allowances added 6 percent

Operating earnings were $171 million compared to $152 million in
the year-ago period. Operating earnings in the prior year would have
been $1 million lower had all stock-based compensation been expensed.
The increase in earnings was due to higher volume and selling prices
and productivity improvements, which more than offset cost inflation
and increased marketing expenses.

U.S. soup sales for the quarter increased 15 percent compared with
a year ago, with condensed soup sales up 11 percent, ready-to-serve
soup sales up 17 percent, and broth sales up 30 percent. For the first
nine months of fiscal 2006, total U.S. soup sales increased 4 percent,
with condensed sales up 5 percent, ready-to-serve sales flat, and
broth sales up 12 percent.

Further details of sales results for the quarter include the
following:

— Both condensed eating soups and condensed cooking soups showed
strong sales growth driven by significantly increased
advertising and effective merchandising. The condensed soup
business benefited from additional installations of
gravity-feed shelving systems, which are now installed in more
than 15,200 stores compared with 12,800 stores at this time
last year.

— Ready-to-serve soup sales were driven by the strong
performance of “Campbell’s Select” soups, which benefited from
the introduction of “Campbell’s Select Gold Label” soups in
aseptic packaging. Sales of ready-to-serve soups were
adversely impacted by the discontinuation of “Campbell’s
Kitchen Classics” soups.

— The ready-to-serve convenience soup platform delivered robust
growth led by the successful introduction of new classic
“Campbell’s” varieties in microwaveable bowls and sales gains
of “Campbell’s Chunky” and “Campbell’s Select” microwaveable
bowls. A gravity-feed shelving system designed for
microwaveable cups and bowls is now in over 1,300 stores.
Preliminary results indicate this unit has been effective in
stimulating additional sales of microwaveable soups.

— “Swanson” broth sales were up significantly driven by
increased marketing spending and effective promotional
activity around the Easter holiday.

Highlights of this segment’s other businesses include:

— Beverage sales rose double-digits driven by “V8” vegetable
juice which had strong volume growth in the grocery channel
and continued to benefit from increased distribution in club
stores and the growth of single-serve varieties. The
introduction of “V8 V-Fusion,” a 100 percent juice beverage,
also contributed to the beverage sales growth. “V8 Splash”
juice beverage sales declined for the quarter.

— Both “Prego” pasta sauces and “Pace” Mexican sauces achieved
double-digit sales growth driven primarily by increased
marketing spending.

For the first nine months of fiscal 2006, sales increased 5
percent to $2,701 million. Operating earnings were $701 million
compared to $643 million in the year-ago period. Operating earnings in
the prior year would have been $3 million lower had all stock-based
compensation been expensed. Earnings for the first nine months of this
fiscal year included an $8 million benefit from a change in the method
of accounting for inventory. The higher operating earnings were driven
by higher selling prices and productivity gains, which were partially
offset by cost inflation.

Baking and Snacking

Sales for Baking and Snacking were $422 million versus $421
million in the year- ago period.

A breakdown of the change in sales follows:

— Price and sales allowances added 3 percent

— Currency subtracted 3 percent

Operating earnings were $35 million compared with $36 million in
the year-ago quarter. Operating earnings in the prior year would have
been $2 million lower had all stock-based compensation been expensed.
Higher operating earnings at Pepperidge Farm were partially offset by
expenses associated with an organizational realignment in Australia
designed to improve the cost structure of the business, lower earnings
in Indonesia, and the unfavorable impact of currency.

Further details of sales results include the following:

— Pepperidge Farm sales grew 11 percent on 6 percent volume
growth, with all three businesses — bakery, cookies and
crackers, and frozen — contributing to this sales increase.

— Bakery performance was ahead of the year-ago period, as
consumer demand for “Pepperidge Farm” whole grain breads
continued to grow.

— Sales of “Pepperidge Farm” cookies and crackers increased,
propelled by double-digit growth of “Goldfish” crackers, which
benefited from the successful introduction of 100-calorie
packs. New “Pepperidge Farm” Chocolate Delight cookies
achieved good consumer acceptance, and both “Milano” and
Chocolate Chunk varieties contributed to growth.

— Sales of “Pepperidge Farm” frozen products increased led by
gains from Texas Toast varieties.

— Arnott’s sales declined due to the unfavorable impact of
currency and weakness in its snack foods business.

— Biscuit sales in Indonesia declined due to the challenging
economic environment in that region.

For the first nine months of fiscal 2006, sales were $1,309
million versus $1,303 million in the year-ago period. Operating
earnings were $125 million compared to $129 million in the year-ago
period. Operating earnings in the prior year would have been $6
million lower had all stock-based compensation been expensed. Earnings
for the first nine months of this fiscal year included a $5 million
benefit from a change in the method of accounting for inventory.
Operating earnings results were driven by declines in the Indonesian
and the Arnott’s snack foods businesses, and the unfavorable impact of
currency, partially offset by higher earnings at Pepperidge Farm.

International Soup and Sauces

Sales for International Soup and Sauces were $430 million, a 1
percent decline compared with a year ago.

A breakdown of the change in sales follows:

— Volume and mix added 1 percent

— Reduced promotional spending added 2 percent

— Currency subtracted 4 percent

Operating earnings were $70 million compared to $59 million in the
year-ago period. Operating earnings in the prior year would have been
$1 million lower had all stock-based compensation been expensed. The
higher level of earnings was due to strong market performance in
Canada and lower marketing spending in the U.K., partially offset by
the unfavorable impact of currency.

Further details of sales results include the following:

— Sales in Europe declined 8 percent. Excluding the unfavorable
impact of currency, sales in Europe were flat, with declines
in the U.K. and France offset by gains in Germany and Belgium.
In March, the company announced that it was exploring
strategic alternatives for its U.K. and Irish businesses.

— In Canada, double-digit sales gains were driven by growth in
both condensed and ready-to-serve soups, including aseptic
soups, and the positive impact of currency.

— In Asia Pacific, sales gains were driven by ready-to-serve
soup, broth and beverages in Australia, partially offset by
the unfavorable impact of currency.

For the first nine months of fiscal 2006, sales declined 1 percent
to $1,333 million. Operating earnings were $206 million compared to
$184 million in the prior-year period. Operating earnings in the prior
year would have been $3 million lower had all stock-based compensation
been expensed. Operating earnings increased due to sales gains in
Canada and lower marketing spending in Europe, partially offset by the
unfavorable impact of currency.

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 7 percent to $271 million compared with the same period
a year ago.

A breakdown of the change in sales follows:

— Volume and mix added 7 percent

— Price and sales allowances added 2 percent

— Increased promotional spending subtracted 1 percent

— Currency subtracted 1 percent

Operating earnings of $27 million were even versus the prior-year
period. Operating earnings in the prior year would have been $2
million lower had all stock-based compensation been expensed.

Further details include the following:

— Godiva Chocolatier sales increased, primarily due to strong
performance in the North American market, which benefited from
higher retail comparable store sales and higher wholesale
shipments. Strong holiday sales in Asia and gains in Europe
also contributed to growth.

— Away From Home sales grew, driven by strong performance of
refrigerated and frozen soups in the U.S. The Away From Home
business in Canada also delivered a strong performance, led by
sales of ready-to-serve and condensed soups, as well as
bakery.

For the first nine months of fiscal 2006, sales increased 8
percent to $884 million. Operating earnings were $122 million compared
to $121 million in the prior-year period. Operating earnings in the
prior year would have been $5 million lower had all stock-based
compensation been expensed. Operating earnings were driven by higher
sales in Away From Home, partially offset by the unfavorable impact of
currency.

Non-GAAP Financial Information

A reconciliation of the adjusted fiscal 2006 and 2005 financial
information to the reported 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 May 22 at 10:00 a.m. Eastern Standard Time. U.S. participants may
access the call at 1-888-395-6878 and non-U.S. participants at
1-210-234-0002. 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 May 26, 2006 at 1-866-470-8797 or 1-203-369-1497.

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, quality improvements, and
portfolio strategies 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, soups, 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
                                                ------------------
                                               April 30,      May 1,
                                                 2006          2005
                                             -------------  ----------

Net sales                                    $      1,836   $   1,736
                                             -------------  ----------

Costs and expenses
    Cost of products sold                           1,089       1,035
    Marketing and selling expenses                    285         275
    Administrative expenses                           160         145
    Research and development
     expenses                                          25          24
    Other expenses / (income)                           2          (2)
                                             -------------  ----------
Total costs and expenses                            1,561       1,477
                                             -------------  ----------

Earnings before interest and taxes                    275         259
Interest, net                                          41          45
                                             -------------  ----------
Earnings before taxes                                 234         214

Taxes on earnings                                      68          68
                                             -------------  ----------
Net earnings                                 $        166   $     146
                                             =============  ==========

Per share - basic
   Net earnings                              $        .41   $     .36
                                             =============  ==========

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

Weighted average shares outstanding -
 basic                                                406         409
                                             =============  ==========


Per share - assuming dilution
   Net earnings                              $        .40   $     .35
                                             =============  ==========

Weighted average shares outstanding
  - assuming dilution                                 413         414
                                             =============  ==========


The company adopted SFAS 123R in the first quarter of 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 $13 would have
been recognized. Net earnings would have been $138 and diluted
earnings per share would have been $.33. 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 - $8; and Research and
development - $1.





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


                                              NINE MONTHS ENDED
                                              -----------------
                                            April 30,        May 1,
                                              2006            2005
                                         ---------------  ------------

Net sales                                $        6,227   $     6,050
                                         ---------------  ------------

Costs and expenses
    Cost of products sold                         3,651         3,601
    Marketing and selling expenses                  969           951
    Administrative expenses                         454           403
    Research and development expenses                73            68
    Other expenses / (income)                         1            (2)
                                         ---------------  ------------
Total costs and expenses                          5,148         5,021
                                         ---------------  ------------

Earnings before interest and taxes                1,079         1,029
Interest, net                                       110           134
                                         ---------------  ------------
Earnings before taxes                               969           895

Taxes on earnings                                   247           284
                                         ---------------  ------------
Net earnings                             $          722   $       611
                                         ===============  ============

Per share - basic
   Net earnings                          $         1.77   $      1.49
                                         ===============  ============

   Dividends                             $          .54   $       .51
                                         ===============  ============

Weighted average shares outstanding -
 basic                                              408           409
                                          ==============  ============


Per share - assuming dilution
   Net earnings                          $         1.74   $      1.48
                                         ===============  ============

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


The company adopted SFAS 123R in the first quarter of 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 $35 would have
been recognized. Net earnings would have been $589 and diluted
earnings per share would have been $1.42. The 2005 pre-tax incremental
compensation expense would have been recognized as follows on the
Consolidated Statements of Earnings: Cost of products sold - $3;
Marketing and selling - $9; Administrative - $20; and Research and
development - $3.

In the first quarter of 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 the first quarter of 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.

In the first quarter of fiscal 2006, 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
                                         ------------------
                                         April 30,    May 1,   Percent
Sales                                      2006        2005    Change
-----                                   -----------  --------  -------
Contributions:
   U.S. Soup, Sauces and Beverages      $      713   $   627       14%
   Baking and Snacking                         422       421        0%
   International Soup and Sauces               430       435       -1%
   Other                                       271       253        7%
                                        -----------  --------
Total sales                             $    1,836   $ 1,736        6%
                                        ===========  ========





Earnings
--------
Contributions:
   U.S. Soup, Sauces and Beverages      $      171   $   152       13%
   Baking and Snacking                          35        36       -3%
   International Soup and Sauces                70        59       19%
   Other                                        27        27        0%
                                        -----------  --------
Total operating earnings                       303       274       11%
Unallocated corporate expenses                 (28)      (15)
                                        -----------  --------

Earnings before interest and taxes             275       259        6%
Interest, net                                  (41)      (45)
Taxes on earnings                              (68)      (68)
                                        -----------  --------
Net earnings                            $      166   $   146       14%
                                        ===========  ========

Net earnings per share - assuming
 dilution                               $      .40   $   .35       14%
                                        ===========  ========



The company adopted SFAS 123R in the first quarter of 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 $13 would have
been recognized. Net earnings would have been $138 and diluted
earnings per share would have been $.33. 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 - $2; and Unallocated Corporate - $7.






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



                                        NINE MONTHS ENDED
                                        -----------------
                                      April 30,      May 1,    Percent
Sales                                   2006          2005     Change
-----                               -------------  ----------  -------
Contributions:
   U.S. Soup, Sauces and Beverages  $      2,701   $   2,577        5%
   Baking and Snacking                     1,309       1,303        0%
   International Soup and Sauces           1,333       1,353       -1%
   Other                                     884         817        8%
                                    -------------  ----------
Total sales                         $      6,227   $   6,050        3%
                                    =============  ==========





Earnings
--------
Contributions:
   U.S. Soup, Sauces and Beverages  $        701   $     643        9%
   Baking and Snacking                       125         129       -3%
   International Soup and Sauces             206         184       12%
   Other                                     122         121        1%
                                    -------------  ----------
Total operating earnings                   1,154       1,077        7%
Unallocated corporate expenses               (75)        (48)
                                    -------------  ----------

Earnings before interest and taxes         1,079       1,029        5%
Interest, net                               (110)       (134)
Taxes on earnings                           (247)       (284)
                                    -------------  ----------
Net earnings                        $        722   $     611       18%
                                    =============  ==========

Net earnings per share - assuming
 dilution                           $       1.74   $    1.48       18%
                                    =============  ==========



The company adopted SFAS 123R in the first quarter of 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 $35 would have
been recognized. Net earnings would have been $589 and diluted
earnings per share would have been $1.42. The 2005 pre-tax incremental
compensation expense would have been recognized as follows: U.S. Soup,
Sauces and Beverages - $3; Baking and Snacking - $6; International
Soup and Sauces - $3; Other - $5; and Unallocated Corporate - $18.

In the first quarter of 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 the first quarter of 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.

In the first quarter of fiscal 2006, an incremental tax expense of
$8 million (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)



                                               April 30,      May 1,
                                                 2006          2005
                                             -------------  ----------

Current assets                               $      1,922   $   1,384

Plant assets, net                                   1,944       1,911

Intangible assets, net                              3,085       3,153

Other assets                                          301         355
                                             -------------  ----------

     Total assets                            $      7,252   $   6,803
                                             =============  ==========


Current liabilities                          $      2,626   $   1,890

Long-term debt                                      1,904       2,541

Nonpension postretirement  benefits                   276         290

Other liabilities                                     666         714

Shareowners' equity                                 1,780       1,368
                                             -------------  ----------

     Total liabilities and shareowners'
      equity                                 $      7,252   $   6,803
                                             =============  ==========


Total debt                                   $      2,947   $   2,988
                                             =============  ==========

Cash and cash equivalents                    $        530   $      32
                                             =============  ==========

Net debt                                     $      2,417   $   2,956
                                             =============  ==========


Certain reclassifications were made to prior year financial
statements.

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
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 the first quarter of 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 the first quarter of 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 the first quarter of 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 the first quarter of 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:

                                          Third Quarter           %
                                   ----------------------------
                                   April 30, 2006  May 1, 2005  Change
                                   -------------- ------------- ------

Earnings before interest and taxes,
 as reported                       $         275  $        259
  Deduct:  Impact had all stock-
   based awards been expensed under
   SFAS 123R (2)                               -           (13)
                                   -------------- -------------
Adjusted Earnings before interest
 and taxes                         $         275  $        246     12%
                                   -------------- -------------

Interest, net, as reported         $          41  $         45

                                   -------------- -------------
Adjusted Earnings before taxes     $         234  $        201     16%
                                   -------------- -------------

Taxes on earnings, as reported     $          68  $         68
  Deduct:  Tax impact had all
   stock-based awards been expensed
   under SFAS 123R (2)                         -            (5)
                                   -------------- -------------
Adjusted Taxes on earnings         $          68  $         63
                                   -------------- -------------

Adjusted effective income tax rate          29.1%         31.3%

Net earnings, as reported          $         166  $        146
  Deduct:  Impact had all stock-
   based awards been expensed under
   SFAS 123R (2)                               -            (8)
                                   -------------- -------------
Adjusted Net earnings              $         166  $        138     20%
                                   ============== =============

Earnings per share, as reported    $        0.40  $       0.35
  Deduct:  Impact had all stock-
   based awards been expensed under
   SFAS 123R (2)                               -         (0.02)
                                   -------------- -------------

Adjusted Earnings per share        $        0.40  $       0.33     21%
                                   ============== =============


                                           Year-to-Date              %
                                   ----------------------------
                                   April 30, 2006  May 1, 2005  Change
                                   ---------------------------- ------

Earnings before interest and
 taxes, as reported                $        1,079  $     1,029
  Deduct:  Impact of change in
   inventory accounting method (1)            (13)           -
  Deduct:  Impact had all stock-
   based awards been expensed under
   SFAS 123R (2)                                -          (35)
                                   ----------------------------
Adjusted Earnings before interest
 and taxes                         $        1,066  $       994      7%
                                   ----------------------------

 Interest, net, as reported        $          110  $       134
   Add:  Reduction in interest
    expense related to the
    favorable resolution of tax
    contingency (3)                            21            -
                                   ----------------------------
Adjusted Interest, net             $          131  $       134
                                   ----------------------------

Adjusted Earnings before taxes     $          935  $       860      9%
                                   ----------------------------

Taxes on earnings, as reported     $          247  $       284
  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)                          -          (13)
  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         $          273  $       271
                                   ----------------------------
Adjusted effective income tax rate           29.2%        31.5%

Net earnings, as reported          $          722  $       611
  Deduct:  Impact of change in
   inventory accounting method (1)             (8)           -
  Deduct:  Impact had all stock-
   based awards been expensed under
   SFAS 123R (2)                                -          (22)
  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              $          662  $       589     12%
                                   ============================

Earnings per share, as reported    $         1.74  $      1.48
  Deduct:  Impact of change in
   inventory accounting method (1)          (0.02)           -
  Deduct:  Impact had all stock-
   based awards been expensed under
   SFAS 123R (2)                                -        (0.05)
  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*       $         1.60  $      1.42     13%
                                   ============================

* 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.

The table below summarizes information on total debt and cash and
cash equivalents:

                                        April 30, 2006   May 1, 2005
                                        --------------  --------------

Current notes payable                   $       1,043   $         447
Long-term debt                                  1,904           2,541
                                        --------------  --------------
     Total debt                         $       2,947   $       2,988

Less:  Cash and cash equivalents                 (530)            (32)
                                        --------------  --------------
     Net Debt                           $       2,417   $       2,956
                                        ==============  ==============

The company believes that net debt is a non-GAAP measure that
provides additional meaningful comparisons between current results and
prior period results and a useful perspective on the financial
condition of the business. Interest income earned on cash and cash
equivalents partially offsets interest expense on debt. Cash and cash
equivalents are available to repay outstanding debt upon maturity.

SOURCE: Campbell Soup Company

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