caret-down

Campbell Reports Third-Quarter Results

  • Net Earnings Per Share (EPS) of $0.28; Adjusted Net EPS of $0.56
  • Net Sales from Continuing Operations Increased 16 Percent; Total
    Combined Net Sales of $2.388 Billion; Organic Sales from Continuing
    Operations Comparable to the Prior Year
  • Campbell Fresh Segment Reported as Discontinued Operations
  • Campbell Updates Fiscal 2019 Guidance to Reflect Improved EPS Outlook
    and Divestitures
  • Campbell to Host an Investor Day on June 13, 2019

CAMDEN, N.J.–(BUSINESS WIRE)–Jun. 5, 2019–
Campbell Soup Company (NYSE:CPB) today reported its third-quarter
results for fiscal 2019.

CEO Comments

Mark Clouse, Campbell’s President and CEO stated, “Our results this
quarter were ahead of our expectations, making it the third consecutive
quarter that we met or exceeded our outlook. I am also pleased to see
profitability trends are improving, driven by sequential gross margin
improvement.

“In the quarter, we continued to drive sales growth in Global Biscuits
and Snacks, fueled by our U.S. Snacks portfolio. The business continues
its growth trends on Pepperidge Farm, coupled with improvements in the
Snyder’s-Lance portfolio. In the Meals and Beverages segment, although
there is more to do, we are making steady improvements on gross margin
and profit and this business is showing signs of stabilization.”

Background on the Presentation of Results

On April 12, 2019, the company announced that it had entered into an
agreement to sell its Bolthouse Farms business. As a result of this, and
along with the recently completed divestitures of the U.S. refrigerated
soup and Garden Fresh Gourmet businesses in the third quarter of fiscal
2019, Campbell Fresh is now reported as discontinued operations. The
following table is a summary of the third-quarter results for sales,
earnings before interest and taxes (EBIT) and EPS for continuing
operations, discontinued operations and on a total combined basis.
Prior-year results have been adjusted to conform to the current-year
presentation. A detailed reconciliation of the reported (GAAP) financial
information to the non-GAAP information is included at the end of this
news release.

Three Months Ended

($ in millions, except per share) Apr. 28, 2019 Apr. 29, 2018 % Change

Continuing Operations

Net Sales as Reported (GAAP) $2,178 $1,878 16%
Organic -%
EBIT as Reported (GAAP) $266 $158 68%
Adjusted EBIT $316 $321 (2)%
Diluted EPS as Reported (GAAP) $0.43 $0.24 79%
Adjusted Diluted EPS $0.56 $0.59 (5)%

Discontinued Operations

Net Sales $210 $247 (15)%
EBIT (Loss) $(17) $(633) n/m
Adjusted EBIT (Loss) $7 $(13) n/m
Diluted Loss Per Share as Reported (GAAP) $(0.16) $(1.55) n/m
Adjusted Diluted EPS $- $0.10 n/m

Total Combined Company

Combined Net Sales $2,388 $2,125 12%
Combined EBIT (Loss) $249 $(475) n/m
Adjusted Combined EBIT $323 $308 5%
Diluted Net EPS as Reported (GAAP) $0.28 $(1.31) n/m
Adjusted Diluted Net EPS $0.56 $0.70 (20)%
n/m – not meaningful

Third-Quarter Results

Continuing Operations

Sales increased 16 percent to $2.2 billion reflecting a 17-point benefit
from the acquisition of Snyder’s-Lance, which was completed on March 26,
2018, partly offset by a 1-point negative impact from currency
translation. Organic sales were comparable to the prior year as gains in
Global Biscuits and Snacks were offset by declines in Meals and
Beverages. Sales in the quarter benefited by approximately 30 basis
points from the change in the new revenue recognition standard adopted
in fiscal 2019, which impacts the timing of expense related to
promotional programs. The annual impact is not expected to be material.

Gross margin increased from 32.7 percent to 33.2 percent. Excluding
items impacting comparability, adjusted gross margin decreased 2.1
percentage points to 33.4 percent, including a 170-basis-point dilutive
mix impact from the acquisition of Snyder’s-Lance. The remaining decline
in adjusted gross margin was driven primarily by cost inflation mostly
offset by supply chain productivity improvements, lower promotional
spending, the benefit from pricing actions and the benefits from cost
savings initiatives.

Marketing and selling expenses increased 11 percent to $245 million
reflecting a 14-point increase from the inclusion of the Snyder’s-Lance
acquisition. Excluding items impacting comparability and the impact of
the acquisition, adjusted marketing and selling expenses decreased
driven primarily by lower marketing overhead and selling expenses,
including the benefits from cost savings initiatives, partly offset by
higher incentive compensation. Administrative expenses increased 8
percent to $165 million. Excluding items impacting comparability,
adjusted administrative expenses increased 28 percent to $151 million
primarily due to higher incentive compensation expense and the inclusion
of the Snyder’s-Lance acquisition. The incentive compensation headwinds
were due to lapping below-target levels in the prior-year quarter and
improved performance in fiscal 2019.

Other expenses were $20 million as compared to $35 million in the prior
year. Excluding items impacting comparability, other income decreased
from $16 million in the prior year to $8 million reflecting amortization
of intangible assets associated with acquisition of Snyder’s-Lance.

As reported EBIT was $266 million. Excluding items impacting
comparability, adjusted EBIT decreased 2 percent to $316 million driven
by declines in the base business reflecting higher adjusted
administrative costs and gross margin pressure, offset mostly by
incremental earnings from the acquisition of Snyder’s-Lance. The change
in revenue recognition had a favorable 2-point impact in the quarter.

Net interest expense was $91 million compared to $42 million in the
prior year. Excluding items impacting comparability in the prior year,
adjusted net interest expense increased $31 million reflecting the debt
associated with the acquisitions of Snyder’s-Lance and Pacific Foods, as
well as higher short-term interest rates. The tax rate was 25.1 percent
as compared to 37.1 percent in the prior year. Excluding items impacting
comparability, the adjusted tax rate decreased 6.5 percentage points
from 31.4 percent to 24.9 percent reflecting a lower U.S. federal tax
rate.

The company reported EPS from continuing operations of $0.43 per share.
Excluding items impacting comparability, adjusted EPS from continuing
operations decreased 5 percent to $0.56 per share reflecting higher
adjusted net interest expense, partly offset by a lower adjusted tax
rate. The change in revenue recognition had a favorable $0.01 per share
impact in the quarter.

Discontinued Operations

Sales decreased 15 percent to $210 million driven primarily by declines
in refrigerated soup reflecting the previously announced plans of
certain major private label customers to insource production in 2019.
Adjusted EBIT was $7 million compared to a loss of $13 million in the
prior-year quarter reflecting improved operational efficiency, including
the benefit from cost saving initiatives. The company reported a loss
from discontinued operations of $0.16 per share. Excluding items
impacting comparability, adjusted EPS from discontinued operations was
breakeven, compared to $0.10 per share in the prior year.

Total Combined Results

Total combined sales from continuing and discontinued operations
increased 12 percent to $2.4 billion reflecting a 15-point benefit from
the acquisition of Snyder’s-Lance. Adjusted combined gross margin
decreased 0.4 percentage points to 31.6 percent. Adjusted combined EBIT
increased 5 percent to $323 million reflecting incremental earnings from
the acquisition, partly offset by declines on the base business.
Adjusted net EPS was $0.56 per share compared to $0.70 per share in the
prior year.

Nine-Month Results

The following table is a summary of the nine-month results for sales,
EBIT and EPS for continuing operations, discontinued operations and on a
total combined basis.

Nine Months Ended

($ in millions, except per share) Apr. 28, 2019 Apr. 29, 2018 % Change

Continuing Operations

Net Sales as Reported (GAAP) $7,129 $5,743 24%
Organic (1)%
EBIT as Reported (GAAP) $1,010 $900 12%
Adjusted EBIT $1,134 $1,151 (1)%
Diluted EPS as Reported (GAAP) $1.82 $2.28 (20)%
Adjusted Diluted EPS $2.14 $2.46 (13)%

Discontinued Operations

Net Sales $666 $723 (8)%
EBIT (Loss) $(392) $(720) n/m
Adjusted EBIT (Loss) $- $(24) n/m
Diluted Loss Per Share as Reported (GAAP) $(1.10) $(1.73) n/m
Adjusted Diluted Earnings (Loss) per Share $(0.01) $0.16 n/m

Total Combined Company

Combined Net Sales $7,795 $6,466 21%
Combined EBIT $618 $180 n/m
Adjusted Combined EBIT $1,134 $1,127 1%
Diluted Net EPS as Reported (GAAP) $0.73 $0.55 33%
Adjusted Diluted Net EPS $2.13 $2.62 (19)%
n/m – not meaningful

Nine-Month Results

Continuing Operations

Sales increased 24 percent to $7.1 billion reflecting a 26-point benefit
from the acquisitions of Snyder’s-Lance and Pacific Foods. Organic sales
declined 1 percent.

As reported EBIT increased 12 percent to $1.0 billion. Excluding items
impacting comparability, adjusted EBIT decreased 1 percent to $1.1
billion reflecting declines in the base business offset mostly by
incremental earnings from the acquisitions.

The company reported EPS from continuing operations of $1.82 per share.
Excluding items impacting comparability, adjusted EPS from continuing
operations decreased 13 percent to $2.14 per share reflecting higher
adjusted net interest expense, partly offset by a lower adjusted tax
rate. The change in revenue recognition had no impact on a year-to-date
basis.

Discontinued Operations

Sales decreased 8 percent to $666 million. Adjusted EBIT was breakeven.
The company reported a loss from discontinued operations of $1.10 per
share. Excluding items impacting comparability, adjusted loss from
discontinued operations was $0.01 per share, compared to earnings of
$0.16 per share in the prior year.

Total Combined Results

Total combined sales from continuing and discontinued operations
increased 21 percent to $7.8 billion reflecting a 23-point benefit from
the acquisitions of Snyder’s-Lance and Pacific Foods. Adjusted combined
EBIT increased 1 percent to $1.1 billion. Adjusted net EPS declined 19
percent to $2.13 per share.

Cash flow from operations increased to $1.1 billion from $1.0 billion a
year ago due primarily to significant improvements from the company’s
working capital management efforts, partly offset by lower cash
earnings. In line with the company’s commitment to returning value to
shareholders, during the first nine months of fiscal 2019, the company
paid $318 million of cash dividends reflecting the quarterly dividend
rate of $0.35 per share.

Campbell Updates Fiscal 2019 Guidance

Based on the company’s improved earnings outlook for fiscal 2019 and the
impact of the Campbell Fresh divestitures, Campbell has updated its
guidance as shown in the table below. This fiscal 2019 guidance includes
an estimated 1 percentage-point negative impact from currency
translation. As mentioned earlier in this release, Campbell Fresh is now
reported as a discontinued operation and prior-year results have been
adjusted to conform to the current-year presentation.

($ in millions, except per share)
As Previously Disclosed Updated Results and Guidance

2018
Results*

Previous 2019
Guidance

2018
Results

Revised 2019
Guidance

Net Sales $8,685 $9,975 to $10,100 $7,735 $9,075 to $9,125
Adjusted EBIT $1,408** $1,370 to $1,410 $1,433** $1,390 to $1,410
Adjusted EPS from continuing operations n/a n/a $2.90** $2.50 to $2.55
Adjusted Net EPS $2.87** $2.45 to $2.53 $2.87** $2.50 to $2.55
n/a – not applicable
* Amounts represent 2018 results as previously disclosed prior to
the presentation change for discontinued operations.
** Adjusted – refer to the detailed reconciliation of the reported
(GAAP) financial information to the adjusted financial information
at the end of this news release.
Note: A non-GAAP reconciliation is not provided for 2019 guidance as
certain amounts are not estimable, such as pension and
postretirement mark-to-market adjustments, and these items are not
considered to reflect the company’s ongoing business results.

Cost Savings Program

In the third quarter of fiscal 2019, Campbell achieved $55 million in
savings under its multi-year cost savings program, inclusive of
Snyder’s-Lance synergies, bringing total program-to-date savings to $605
million. Year-to-date savings were $150 million through the first nine
months of fiscal 2019, benefiting both continuing and discontinued
operations. The previously announced cost savings target of $945 million
included $95 million of savings related to Campbell Fresh, which is now
reported as discontinued operations. For continuing operations, Campbell
is targeting cumulative annualized savings of $850 million by the end of
fiscal 2022, of which $535 million has been achieved program-to-date.

Segment Operating Review

An analysis of net sales and operating earnings by reportable segment
follows:

Three Months Ended Apr. 28, 2019
($
in millions)

Meals and
Beverages

Global Biscuits
and Snacks

Total
Net Sales, as Reported $1,024 $1,154 $2,178

Volume and Mix (3)% 1% (1)%
Price and Sales Allowances 1% (1)% -%
Promotional Spending 1% 1% 1%
Organic Net Sales -%* 1% -%
Currency -% (2)% (1)%
Acquisition -% 38% 17%
% Change vs. Prior Year (1)%* 37% 16%
Segment Operating Earnings $207 $139
% Change vs. Prior Year (5)% 15%
* Numbers do not add due to rounding.
Note: A detailed reconciliation of the reported (GAAP) net sales to
organic net sales is included at the end of this news release.

Nine Months Ended Apr. 28, 2019
($
in millions)

Meals and
Beverages

Global Biscuits
and Snacks

Total
Net Sales, as Reported $3,513 $3,615 $7,129**

Volume and Mix (1)% 1% (1)%
Price and Sales Allowances -% 1% -%
Promotional Spending (1)% -% (1)%
Organic Net Sales (2)% 1%* (1)%*
Currency -% (2)% (1)%
Acquisitions 3% 63% 26%
% Change vs. Prior Year -%* 61%* 24%
Segment Operating Earnings $753 $478
% Change vs. Prior Year (9)% 27%
* Numbers do not add due to rounding.
** Includes Corporate
Note: A detailed reconciliation of the reported (GAAP) net sales to
organic net sales is included at the end of this news release.

Meals and Beverages

Sales in the quarter decreased 1 percent to $1.024 billion. Organic
sales were comparable to the prior year reflecting mixed results, as
solid performance in Canada was offset by decreases in V8
beverages and Prego pasta sauces in the U.S. The adoption of new
accounting guidance for revenue recognition resulted in a positive
1-point impact on sales. Sales of U.S. soup were comparable to the prior
year as gains in broth were offset by moderating declines in condensed
and ready-to-serve soups.

Segment operating earnings in the quarter decreased 5 percent to $207
million. The decrease was driven primarily by cost inflation and higher
administrative expenses, partly offset by supply chain productivity
programs, lower promotional spending and the benefit of recent pricing
actions.

Global Biscuits and Snacks

Sales in the quarter increased 37 percent to $1.154 billion. Excluding
the benefit from the acquisition of Snyder’s-Lance and the negative
impact of currency translation, organic sales increased 1 percent. This
performance reflects continued solid growth in Pepperidge Farm, driven
by consumption gains in Pepperidge Farm fresh bakery products and Goldfish
crackers, offset partly by declines in the international biscuits and
snacks operating segment.

Segment operating earnings in the quarter increased 15 percent to $139
million, reflecting a 21-point benefit from the acquisition of
Snyder’s-Lance. Excluding the impact of the acquisition, segment
operating earnings decreased driven primarily by cost inflation and
higher administrative expenses, partly offset by supply chain
productivity programs.

Corporate

Corporate in the third quarter of fiscal 2019 included a pension
settlement charge of $28 million associated with a U.S. pension plan,
charges related to cost savings initiatives of $19 million, and costs of
$2 million associated with the planned divestiture of the company’s
international biscuits and snacks operating segment. Corporate in the
third quarter of fiscal 2018 included transaction and integration costs
of $72 million related to the acquisition of Snyder’s-Lance, charges
related to cost savings initiatives of $45 million, and a charge of $22
million related to the settlement of a legal claim. The remaining
increase in expenses primarily reflects losses on open commodity
contracts and higher administrative expenses.

Conference Call and Webcast

Campbell will host a conference call to discuss these results today at
8:30 a.m. Eastern Time. To join, dial +1 (409) 350-3941. The access code
is 2279106. Access to a live webcast of the call with accompanying
slides, as well as a replay of the call, will be available at investor.campbellsoupcompany.com.
A recording of the call will also be available until midnight on Jun.
19, 2019, at +1 (404) 537-3406. The access code for the replay is
2279106.

Reportable Segments

Campbell Soup Company earnings results are reported as follows:

Meals and Beverages includes the retail and food service
businesses in the U.S. and Canada. The segment includes the following
products: Campbell’s condensed and ready-to-serve soups; Swanson
broth and stocks; Pacific broth, soups, non-dairy beverages and
other simple meals; 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; and, Campbell’s tomato juice. Beginning in fiscal
2019, the segment also includes the simple meals and shelf-stable
beverages business in Latin America. Prior to fiscal 2019, the business
in Latin America was managed as part of the Global Biscuits and Snacks
segment. Beginning in the third quarter of fiscal 2019, the segment also
includes a portion of the U.S. refrigerated soup business that was
previously managed as part of the Campbell Fresh segment. Prior-period
segment results have been adjusted retroactively to reflect these
changes.

Global Biscuits and Snacks includes the U.S. snacks portfolio
consisting of 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. The segment
also 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.

About Campbell Soup Company

Campbell (NYSE:CPB) is driven and inspired by our Purpose, “Real food
that matters for life’s moments.” For generations, people have trusted
Campbell to provide authentic, flavorful and affordable snacks, soups
and simple meals, and beverages. Founded in 1869, Campbell has a
heritage of giving back and acting as a good steward of the planet’s
natural resources. The company is a member of the Standard and Poor’s
500 and the Dow Jones Sustainability Indexes. For more information,
visit www.campbellsoupcompany.com
or follow company news on Twitter via @CampbellSoupCo.
To learn more about how we make our food and the choices behind the
ingredients we use, visit www.whatsinmyfood.com.

Forward-Looking Statements

This release contains “forward-looking statements” that reflect the
company’s current expectations about the impact of its future plans and
performance on the company’s business or financial results. These
forward-looking statements, including any statements made regarding
sales, EBIT and EPS guidance, rely on a number of assumptions and
estimates that could be inaccurate and which are subject to risks and
uncertainties. The factors that could cause the company’s actual results
to vary materially from those anticipated or expressed in any
forward-looking statement include: (1) the company’s ability to execute
on and realize the expected benefits from the actions it intends to take
as a result of its recent strategy and portfolio review; (2) the ability
to differentiate its products and protect its category leading
positions, especially in soup; (3) the ability to complete and to
realize the projected benefits of planned divestitures and other
business portfolio changes; (4) the ability to realize the projected
benefits, including cost synergies, from the recent acquisitions of
Snyder’s-Lance and Pacific Foods; (5) the ability to realize projected
cost savings and benefits from its efficiency and/or restructuring
initiatives; (6) the company’s indebtedness and ability to pay such
indebtedness; (7) disruptions to the company’s supply chain, including
fluctuations in the supply of and inflation in energy and raw and
packaging materials cost; (8) the company’s ability to manage changes to
its organizational structure and/or business processes, including
selling, distribution, manufacturing and information management systems
or processes; (9) the impact of strong competitive responses to the
company’s efforts to leverage its brand power with product innovation,
promotional programs and new advertising; (10) the risks associated with
trade and consumer acceptance of product improvements, shelving
initiatives, new products and pricing and promotional strategies; (11)
changes in consumer demand for the company’s products and favorable
perception of the company’s brands; (12) changing inventory management
practices by certain of the company’s key customers; (13) a changing
customer landscape, with value and e-commerce retailers expanding their
market presence, while certain of the company’s key customers maintain
significance to the company’s business; (14) product quality and safety
issues, including recalls and product liabilities; (15) the costs,
disruption and diversion of management’s attention associated with
activist investors; (16) the uncertainties of litigation and regulatory
actions against the company; (17) the possible disruption to the
independent contractor distribution models used by certain of the
company’s businesses, including as a result of litigation or regulatory
actions affecting their independent contractor classification; (18) the
impact of non-U.S. operations, including trade restrictions, public
corruption and compliance with foreign laws and regulations; (19)
impairment to goodwill or other intangible assets; (20) the company’s
ability to protect its intellectual property rights; (21) increased
liabilities and costs related to the company’s defined benefit pension
plans; (22) a material failure in or breach of the company’s information
technology systems; (23) the company’s ability to attract and retain key
talent; (24) changes in currency exchange rates, tax rates, interest
rates, debt and equity markets, inflation rates, economic conditions,
law, regulation and other external factors; (25) unforeseen business
disruptions in one or more of the company’s markets due to political
instability, civil disobedience, terrorism, armed hostilities, extreme
weather conditions, natural disasters or other calamities; and (26)
other factors described in the company’s most recent Form 10-K and
subsequent Securities and Exchange Commission filings. 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.

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

Three Months Ended
April 28, 2019 April 29, 2018
Net sales $ 2,178 $ 1,878
Costs and expenses
Cost of products sold 1,455 1,263
Marketing and selling expenses 245 220
Administrative expenses 165 153
Research and development expenses 26 25
Other expenses / (income) 20 35
Restructuring charges 1 24
Total costs and expenses 1,912 1,720
Earnings before interest and taxes 266 158
Interest, net 91 42
Earnings before taxes 175 116
Taxes on earnings 44 43
Earnings from continuing operations 131 73
Loss from discontinued operations (47 ) (466 )
Net earnings (loss) 84 (393 )
Net loss attributable to noncontrolling interests
Net earnings (loss) attributable to Campbell Soup Company $ 84 $ (393 )
Per share – basic
Earnings from continuing operations attributable to Campbell Soup
Company
$ .44 $ .24
Loss from discontinued operations (.16 ) (1.55 )
Net earnings (loss) attributable to Campbell Soup Company $ .28 $ (1.31 )
Dividends $ .35 $ .35
Weighted average shares outstanding – basic 301 301
Per share – assuming dilution
Earnings from continuing operations attributable to Campbell Soup
Company
$ .43 $ .24
Loss from discontinued operations (.16 ) (1.55 )
Net earnings (loss) attributable to Campbell Soup Company* $ .28 $ (1.31 )
Weighted average shares outstanding – assuming dilution 302 301

*The sum of the individual per share amounts may not add due to
rounding.

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

Nine Months Ended
April 28, 2019 April 29, 2018
Net sales $ 7,129 $ 5,743
Costs and expenses
Cost of products sold 4,781 3,624
Marketing and selling expenses 738 645
Administrative expenses 492 444
Research and development expenses 74 79
Other expenses / (income) 13 (7 )
Restructuring charges 21 58
Total costs and expenses 6,119 4,843
Earnings before interest and taxes 1,010 900
Interest, net 276 104
Earnings before taxes 734 796
Taxes on earnings 184 106
Earnings from continuing operations 550 690
Loss from discontinued operations (331 ) (523 )
Net earnings 219 167
Net loss attributable to noncontrolling interests
Net earnings attributable to Campbell Soup Company $ 219 $ 167
Per share – basic
Earnings from continuing operations attributable to Campbell Soup
Company
$ 1.83 $ 2.29
Loss from discontinued operations (1.10 ) (1.74 )
Net earnings attributable to Campbell Soup Company $ .73 $ .55
Dividends $ 1.05 $ 1.05
Weighted average shares outstanding – basic 301 301
Per share – assuming dilution
Earnings from continuing operations attributable to Campbell Soup
Company
$ 1.82 $ 2.28
Loss from discontinued operations (1.10 ) (1.73 )
Net earnings attributable to Campbell Soup Company* $ .73 $ .55
Weighted average shares outstanding – assuming dilution 302 302

*The sum of the individual per share amounts may not add due to
rounding.

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

Three Months Ended
April 28, 2019 April 29, 2018

Percent
Change

Sales

Contributions:
Meals and Beverages $ 1,024 $ 1,033 (1)%
Global Biscuits and Snacks 1,154 843 37%
Corporate 2 n/m
Total sales $ 2,178 $ 1,878 16%

Earnings

Contributions:
Meals and Beverages $ 207 $ 218 (5)%
Global Biscuits and Snacks 139 121 15%
Total operating earnings 346 339 2%
Corporate (79 ) (157 )
Restructuring charges (1 ) (24 )
Earnings before interest and taxes 266 158 68%
Interest, net 91 42
Taxes on earnings 44 43
Earnings from continuing operations 131 73
Loss from discontinued operations (47 ) (466 )
Net earnings (loss) 84 (393 ) 121%
Net loss attributable to noncontrolling interests
Net earnings (loss) attributable to Campbell Soup Company $ 84 $ (393 ) 121%
Per share – assuming dilution
Earnings from continuing operations attributable to Campbell Soup
Company
$ .43 $ .24
Loss from discontinued operations (.16 ) (1.55 )
Net earnings (loss) attributable to Campbell Soup Company* $ .28 $ (1.31 ) 121%

*The sum of the individual per share amounts may not add due to
rounding.

n/m – not meaningful

Beginning in fiscal 2019, the business in Latin America is managed as
part of the Meals and Beverages segment. In fiscal 2018, the business in
Latin America was managed as part of the Global Biscuits and Snacks
segment. On April 12, 2019, the company announced it had signed a
definitive agreement for the sale of Bolthouse Farms. In the third
quarter of fiscal 2019, the company also sold its refrigerated soup
plant and its Garden Fresh Gourmet business. Beginning in the third
quarter of fiscal 2019, the results of these businesses were reported as
discontinued operations. The businesses were historically included in
the Campbell Fresh segment. A portion of the U.S. refrigerated soup
business was retained and is now reported in Meals and Beverages. Prior
periods have been adjusted retrospectively to reflect these changes.

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

Nine Months Ended

April 28, 2019 April 29, 2018

Percent
Change

Sales

Contributions:
Meals and Beverages $ 3,513 $ 3,501 —%
Global Biscuits and Snacks 3,615 2,239 61%
Corporate 1 3 n/m
Total sales $ 7,129 $ 5,743 24%

Earnings

Contributions:
Meals and Beverages $ 753 $ 832 (9)%
Global Biscuits and Snacks 478 375 27%
Total operating earnings 1,231 1,207 2%
Corporate (200 ) (249 )
Restructuring charges (21 ) (58 )
Earnings before interest and taxes 1,010 900 12%
Interest, net 276 104
Taxes on earnings 184 106
Earnings from continuing operations 550 690
Loss from discontinued operations (331 ) (523 )
Net earnings 219 167 31%
Net loss attributable to noncontrolling interests
Net earnings attributable to Campbell Soup Company $ 219 $ 167 31%
Per share – assuming dilution
Earnings from continuing operations attributable to Campbell Soup
Company
$ 1.82 $ 2.28
Loss from discontinued operations (1.10 ) (1.73 )
Net earnings attributable to Campbell Soup Company* $ .73 $ .55 33%

*The sum of the individual per share amounts may not add due to
rounding.

n/m – not meaningful

Beginning in fiscal 2019, the business in Latin America is managed as
part of the Meals and Beverages segment. In fiscal 2018, the business in
Latin America was managed as part of the Global Biscuits and Snacks
segment. On April 12, 2019, the company announced it had signed a
definitive agreement for the sale of Bolthouse Farms. In the third
quarter of fiscal 2019, the company also sold its refrigerated soup
plant and its Garden Fresh Gourmet business. Beginning in the third
quarter of fiscal 2019, the results of these businesses were reported as
discontinued operations. The businesses were historically included in
the Campbell Fresh segment. A portion of the U.S. refrigerated soup
business was retained and is now reported in Meals and Beverages. Prior
periods have been adjusted retrospectively to reflect these changes.

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

April 28, 2019 April 29, 2018
Current assets $ 1,941 $ 2,076
Current assets of discontinued operations 220 253
Plant assets, net 2,769 2,765
Intangible assets, net 8,289 8,497
Other assets 203 178
Noncurrent assets of discontinued operations 346 797
Total assets $ 13,768 $ 14,566
Current liabilities $ 3,411 $ 3,276
Current liabilities of discontinued operations 100 127
Long-term debt 7,507 8,080
Other liabilities 1,509 1,668
Noncurrent liabilities of discontinued operations 4 4
Total equity 1,237 1,411
Total liabilities and equity $ 13,768 $ 14,566
Total debt $ 9,280 $ 9,843
Cash and cash equivalents $ 202 $ 195

On April 12, 2019, the company announced it had signed a definitive
agreement for the sale of Bolthouse Farms. The assets and liabilities of
the business were reported as assets and liabilities of discontinued
operations as of April 28, 2019 and April 29, 2018. In the third quarter
of fiscal 2019, the company also sold its refrigerated soup plant and
its Garden Fresh Gourmet business. The assets and liabilities of these
businesses were reported as assets and liabilities of discontinued
operations as of April 29, 2018.

CAMPBELL SOUP COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(millions)

Nine Months Ended
April 28, 2019 April 29, 2018
Cash flows from operating activities:
Net earnings $ 219 $ 167
Adjustments to reconcile net earnings to operating cash flow
Impairment charges 360 694
Restructuring charges 22 59
Stock-based compensation 45 48
Noncurrent income taxes 52
Amortization of inventory fair value adjustment from acquisition 37
Pension and postretirement benefit income (16 ) (48 )
Depreciation and amortization 349 266
Deferred income taxes 50 (192 )
Losses on sales of discontinued operations businesses 18
Other, net 21 10
Changes in working capital, net of acquisitions and divestitures
Accounts receivable (63 ) (18 )
Inventories 156 50
Prepaid assets (19 ) (84 )
Accounts payable and accrued liabilities 60 26
Other (54 ) (43 )
Net cash provided by operating activities 1,148 1,024
Cash flows from investing activities:
Purchases of plant assets (274 ) (223 )
Purchases of route businesses (27 ) (5 )
Sales of route businesses 29 5
Businesses acquired, net of cash acquired (18 ) (6,773 )
Sales of discontinued operations businesses, net of cash divested 54
Other, net 14 (12 )
Net cash used in investing activities (222 ) (7,008 )
Cash flows from financing activities:
Short-term borrowings 4,681 7,811
Short-term repayments (4,995 ) (7,577 )
Long-term borrowings 6,200
Long-term repayments (300 ) (43 )
Dividends paid (318 ) (321 )
Treasury stock purchases (86 )
Payments related to tax withholding for stock-based compensation (8 ) (23 )
Repurchase of noncontrolling interest (47 )
Payments of debt issuance costs (1 ) (49 )
Net cash provided by (used in) financing activities (941 ) 5,865
Effect of exchange rate changes on cash (5 ) (1 )
Net change in cash and cash equivalents (20 ) (120 )
Cash and cash equivalents — beginning of period 218 314
Cash balance of discontinued operations — beginning of period 8 5
Cash balance of discontinued operations — end of period (4 ) (4 )
Cash and cash equivalents — end of period $ 202 $ 195

Reconciliation of GAAP to Non-GAAP Financial Measures
Third
Quarter Ended April 28, 2019

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. Management believes that also presenting
certain non-GAAP financial measures provides additional information to
facilitate comparison of the company’s historical operating results and
trends in its underlying operating results, and provides transparency on
how the company evaluates its business. Management uses these non-GAAP
financial measures in making financial, operating and planning decisions
and in evaluating the company’s performance. In the third quarter of
fiscal 2019, the results of the Campbell Fresh segment are reported as
discontinued operations. As this is the first quarter presenting the
segment as discontinued operations, we have provided certain combined
financial measures of continuing operations and discontinued operations
to facilitate comparison of the company’s historical operating results.

Organic Net Sales

Organic net sales are net sales excluding the impact of currency and
acquisitions. Management believes that excluding these items, which are
not part of the ongoing business, improves the comparability of
year-to-year results. A reconciliation of net sales as reported to
organic net sales and combined net sales follows.

Three Months Ended
April 28, 2019

April 29,
2018

% Change
(millions)

Net Sales,
as
Reported

Impact of
Currency

Impact of
Acquisitions

Organic
Net Sales

Net Sales,
as
Reported

Net Sales,
as
Reported

Organic
Net Sales

Meals and Beverages $ 1,024 $ 5 $ $ 1,029 $ 1,033 (1)% —%
Global Biscuits and Snacks 1,154 18 (318 ) 854 843 37% 1%
Corporate 2 n/m n/m
Total Net Sales $ 2,178 $ 23 $ (318 ) $ 1,883 $ 1,878 16% —%
Net Sales included in discontinued operations $ 210 $ 247
Combined Net Sales $ 2,388 $ 2,125 12%
Nine Months Ended
April 28, 2019

April 29,
2018

% Change
(millions)

Net Sales,
as
Reported

Impact of
Currency

Impact of
Acquisitions

Organic
Net Sales

Net Sales,
as
Reported

Net Sales,
as
Reported

Organic
Net Sales

Meals and Beverages $ 3,513 $ 17 $ (100 ) $ 3,430 $ 3,501 —% (2)%
Global Biscuits and Snacks 3,615 50 (1,401 ) 2,264 2,239 61% 1%
Corporate 1 1 3 n/m n/m
Total Net Sales $ 7,129 $ 67 $ (1,501 ) $ 5,695 $ 5,743 24% (1)%
Net Sales included in discontinued operations $ 666 $ 723
Combined Net Sales $ 7,795 $ 6,466 21%

n/m – not meaningful

Items Impacting Earnings

The company believes that financial information excluding certain items
that are not considered to reflect the ongoing operating results, such
as those listed below, improves the comparability of year-to-year
results. Consequently, the company believes that investors may be able
to better understand its results excluding these items.

The following items impacted earnings:

(1)

In fiscal 2015, the company implemented initiatives to reduce
costs and to streamline its organizational structure. In fiscal
2017, the company expanded these cost savings initiatives by
further optimizing its supply chain network, primarily in North
America, continuing to evolve its operating model to drive
efficiencies, and more fully integrating its recent acquisitions.
In January 2018, as part of the expanded initiatives, the company
authorized additional costs to improve the operational efficiency
of its thermal supply chain network in North America by closing
its manufacturing facility in Toronto, Ontario, and to optimize
its information technology infrastructure by migrating certain
applications to the latest cloud technology platform. In August
2018, the company announced that it will continue to streamline
its organization, expand its zero-based budgeting efforts and
optimize its manufacturing network. In fiscal 2019, the company
began to include costs associated with the Snyder’s-Lance cost
transformation program and integration with these initiatives.

In the third quarter of fiscal 2019, the company recorded
Restructuring charges of $1 million and implementation costs and
other related costs of $12 million in Administrative expenses, $4
million in Cost of products sold, $2 million in Marketing and
selling expenses, and $1 million in Research and development
expenses (aggregate impact of $15 million after tax, or $.05 per
share) in Earnings from continuing operations related to these
initiatives. In the nine-month period of fiscal 2019, the company
recorded Restructuring charges of $21 million and implementation
costs and other related costs of $35 million in Administrative
expenses, $25 million in Cost of products sold, $6 million in
Marketing and selling expenses, and $2 million in Research and
development expenses (aggregate impact of $67 million after tax, or
$.22 per share) in Earnings from continuing operations related to
these initiatives. The company also recorded a $1 million pre-tax
and after-tax charge in Earnings from discontinued operations
related to these initiatives. In the third quarter of fiscal 2018,
the company recorded Restructuring charges of $14 million and
implementation costs and other related costs of $29 million in
Administrative expenses, $14 million in Cost of products sold, and
$2 million in Marketing and selling expenses (aggregate impact of
$45 million after tax, or $.15 per share) in Earnings from
continuing operations related to these initiatives. The company also
recorded a $1 million pre-tax charge in Earnings from discontinued
operations related to these initiatives. In the nine-month period of
fiscal 2018, the company recorded Restructuring charges of $48
million and implementation costs and other related costs of $67
million in Administrative expenses, $20 million in Cost of products
sold, and $2 million in Marketing and selling expenses (aggregate
impact of $102 million after tax, or $.34 per share) in Earnings
from continuing operations related to these initiatives. The company
also recorded a $2 million charge ($1 million after tax) in Earnings
from discontinued operations related to these initiatives. For the
year ended July 29, 2018, the company recorded Restructuring charges
of $48 million and implementation costs and other related costs of
$87 million in Administrative expenses, $45 million in Cost of
products sold, and $3 million in Marketing and selling expenses
(aggregate impact of $135 million after tax, or $.45 per share) in
Earnings from continuing operations related to these initiatives.
The company also recorded a $2 million charge ($1 million after tax)
in Earnings from discontinued operations related to these
initiatives.

(2)

In the second quarter of fiscal 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 the company
continued to pursue the divestiture of these businesses. The
company revised its future outlook for earnings and cash flows for
each of these businesses as the divestiture process progressed.

The company 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
fiscal 2019, the company recorded a non-cash impairment charge of
$14 million in Cost of products sold ($11 million after tax, or $.04
per share) on its U.S. refrigerated soup plant assets. For the
nine-month period of fiscal 2019, the total non-cash impairment
charges recorded were $360 million, of which $129 million was
recorded in Cost of products sold and $231 million in Other expenses
/ (income), ($275 million after tax, or $.91 per share).
In the third quarter of fiscal 2018, the company performed interim
impairment assessments within Campbell Fresh on the deli reporting
unit, which includes Garden Fresh Gourmet and the U.S. refrigerated
soup business, and the Bolthouse Farms refrigerated beverages and
salad dressings reporting unit. Within the deli unit, the company
revised its long-term outlook due to the anticipated loss of
refrigerated soup business with certain private label customers, as
well as the performance of the business. In addition, the operating
performance of the Bolthouse Farms refrigerated beverages and salad
dressings reporting unit was below expectations. The company revised
its long-term outlook for future earnings and cash flows for each of
these reporting units. The company recorded a non-cash impairment
charge of $11 million on the tangible assets and $94 million on the
intangible assets ($80 million after tax, or $.27 per share) of the
deli reporting unit, and a non-cash impairment charge of $514
million ($417 million after tax, or $1.39 per share) related to the
intangible assets of the Bolthouse Farms refrigerated beverages and
salad dressings reporting unit. The aggregate impact of the
impairment charges was $619 million, of which $11 million was
recorded in Cost of products sold and $608 million in Other expenses
/ (income), ($497 million after tax, or $1.65 per share).
In the second quarter of fiscal 2018, the company performed an
interim impairment assessment on the intangible assets of the
Bolthouse Farms carrot and carrot ingredients reporting unit as
operating performance was below expectations. The company revised
its outlook for future earnings and cash flows and recorded a
non-cash impairment charge of $75 million in Other expenses /
(income) ($74 million after tax, or $.25 per share).
In the nine-month period of fiscal 2018 and for the year ended July
29, 2018, the total non-cash impairment charges recorded were $694
million, of which $11 million was recorded in Cost of products sold
and $683 million in Other expenses / (income), ($571 million after
tax, or $1.89 per share).
These impairment charges were all recorded in Earnings from
discontinued operations.
In the fourth quarter of fiscal 2018, the company performed an
impairment assessment on the Plum trademark. In fiscal 2018, sales
and operating performance were well below expectations due in part
to competitive pressure and reduced margins. In the fourth quarter
of fiscal 2018, as part of a strategic review initiated by a new
leadership team and based on recent performance, the company lowered
its long-term outlook for future sales. The company recorded a
non-cash impairment charge of $54 million ($41 million after tax, or
$.14 per share) in Earnings from continuing operations in Other
expenses / (income).

(3)

In the first quarter of fiscal 2019, the company announced its
intent to divest its international biscuits and snacks operating
segment and Campbell Fresh operating segment. In the third quarter
of fiscal 2019, the company incurred costs of $2 million recorded
in Administrative expenses ($1 million after tax) in Earnings from
continuing operations associated with the planned divestiture of
the international biscuits and snacks operating segment. The
company also recorded pre-tax expenses of $24 million associated
with the sale process of the businesses in Campbell Fresh,
including losses on the sale of its U.S. refrigerated soup
business and Garden Fresh Gourmet. In addition, due to the pending
sale of Bolthouse Farms, the company recorded tax expense of $29
million as deferred tax assets are not realizable. The aggregate
impact was $47 million after tax, or $.16 per share, in Earnings
from discontinued operations. In the nine-month period of fiscal
2019, the company incurred costs of $7 million recorded in
Administrative expenses ($5 million after tax, or $.02 per share)
in Earnings from continuing operations associated with the planned
divestiture of the international biscuits and snacks operating
segment. The company also recorded pre-tax expenses of $31 million
associated with the sale process of the businesses in Campbell
Fresh, including losses on the sale of its U.S. refrigerated soup
business and Garden Fresh Gourmet. In addition, due to the pending
sale of Bolthouse Farms, the company recorded tax expense of $29
million as deferred tax assets are not realizable. The aggregate
impact was $52 million after tax, or $.17 per share, in Earnings
from discontinued operations.

(4)

In the third quarter of fiscal 2019, the company recognized a
pre-tax pension settlement charge in Other expenses / (income) of
$28 million ($22 million after tax, or $.07 per share) in Earnings
from continuing operations associated with a U.S. pension plan.
The settlement resulted from the level of lump sum distributions
from the plan’s assets in 2019.

(5)

In fiscal 2018 and 2019, the company reflected the impact of taxes
on the enactment of the Tax Cuts and Jobs Act that was signed into
law in December 2017. In the nine-month period of fiscal 2019, the
company recorded a tax charge of $2 million ($.01 per share)
related to a transition tax on unremitted foreign earnings. In the
nine-month period of fiscal 2018, the company recorded a tax
benefit of $179 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 $120 million ($.40 per share). For the year
ended July 29, 2018, the company recorded a tax benefit of $179
million due to the remeasurement of deferred tax assets and
liabilities, and a tax charge of $53 million related to the
transition tax on unremitted foreign earnings. The net impact was
a tax benefit of $126 million ($.42 per share). These charges and
benefits were all recorded in Earnings from continuing operations.

(6)

In the nine-month period of fiscal 2018, the company incurred
gains of $14 million in Other expenses / (income) ($10 million
after tax, or $.03 per share) in Earnings from continuing
operations associated with mark-to-market adjustments for defined
benefit pension and postretirement plans. For the year ended July
29, 2018, the company incurred gains of $136 million in Other
expenses / (income) ($103 million after tax, or $.34 per share) in
Earnings from continuing operations associated with mark-to-market
and curtailment adjustments for defined benefit pension and
postretirement plans.

(7)

In the second quarter of fiscal 2018, the company announced its
intent to acquire Snyder’s-Lance, Inc. and on March 26, 2018, the
acquisition closed. In the third quarter of fiscal 2018, the
company incurred transaction costs of $29 million recorded in
Other expenses / (income), $37 million in Cost of products sold
associated with an acquisition date fair value adjustment for
inventory, and recorded a gain in Interest expense of $18 million
on treasury rate lock contracts used to hedge the planned
financing of the acquisition. The company also incurred
integration costs in association with its cost savings
initiatives, of which $10 million was recorded in Restructuring
charges and $6 million in Administrative expenses. The aggregate
impact was $64 million, $46 million after tax, or $.15 per share.
In the nine-month period of fiscal 2018, the company incurred
transaction costs of $53 million in Other expenses / (income), $37
million in Cost of products sold and a gain in Interest expense of
$18 million on the treasury rate lock contracts. The company also
incurred integration costs in association with its cost savings
initiatives, of which $10 million was recorded in Restructuring
charges and $6 million in Administrative expenses. The aggregate
impact was $88 million, $65 million after tax, or $.22 per share.
For the year ended July 29, 2018, the company incurred transaction
costs of $53 million recorded in Other expenses / (income), $42
million in Cost of products sold and a gain in Interest expense of
$18 million on the treasury rate lock contracts. The company also
incurred integration costs in association with its cost savings
initiatives, of which $13 million was recorded in Restructuring
charges and $12 million in Administrative expenses. The aggregate
impact was $102 million, $73 million after tax, or $.24 per share.
These costs were all recorded in Earnings from continuing
operations.

(8)

In the third quarter of fiscal 2018, the company recorded a loss
of $22 million in Other expenses / (income) ($15 million after
tax, or $.05 per share) in Earnings from continuing operations
from a settlement of a legal claim.

The following tables reconcile financial information, presented in
accordance with GAAP, to financial information excluding certain items:

Three Months Ended
April 28, 2019 April 29, 2018
(millions, except per share amounts)

As
reported

Adjustments(a) Adjusted

As
reported

Adjustments(a) Adjusted

Adjusted
Percent
Change

Gross margin $ 723 $ 4 $ 727 $ 615 $ 51 $ 666 9%
Gross margin percentage 33.2 % 33.4 % 32.7 % 35.5 %
Marketing and selling expenses 245 (2 ) 243 220 (2 ) 218
Administrative expenses 165 (14 ) 151 153 (35 ) 118
Research and development expenses 26 (1 ) 25 25 25
Other expenses / (income) 20 (28 ) (8 ) 35 (51 ) (16 )
Restructuring charges 1 (1 ) 24 (24 )
Earnings before interest and taxes $ 266 $ 50 $ 316 $ 158 $ 163 $ 321 (2)%
Interest, net 91 91 42 18 60
Earnings before taxes $ 175 $ 50 $ 225 $ 116 $ 145 $ 261
Taxes 44 12 56 43 39 82
Effective income tax rate 25.1 % 24.9 % 37.1 % 31.4 %
Earnings from continuing operations $ 131 $ 38 $ 169 $ 73 $ 106 $ 179 (6)%
Earnings (loss) from discontinued operations (47 ) 47 (466 ) 497 31 n/m
Net earnings (loss) attributable to Campbell Soup Company $ 84 $ 85 $ 169 $ (393 ) $ 603 $ 210 (20)%
Diluted earnings per share – continuing operations attributable to
Campbell Soup Company
$ .43 $ .13 $ .56 $ .24 $ .35 $ .59 (5)%
Diluted earnings (loss) per share – discontinued operations (.16 ) .16 (1.55 ) 1.65 .10 n/m
Diluted net earnings (loss) per share attributable to Campbell Soup
Company*
$ .28 $ .28 $ .56 $ (1.31 ) $ 2.00 $ .70 (20)%
(a)See following tables for additional information.
*The sum of individual per share amounts may not add due to rounding.
n/m – not meaningful
Three Months Ended
April 28, 2019
(millions, except per share amounts)

Restructuring
charges,
implementation
costs
and other

related costs
(1)

Costs
associated
with planned
divestitures
(3)

Pension
settlement
(4)

Adjustments
Gross margin $ 4 $ $ $ 4
Marketing and selling expenses (2 ) (2 )
Administrative expenses (12 ) (2 ) (14 )
Research and development expenses (1 ) (1 )
Other expenses / (income) (28 ) (28 )
Restructuring charges (1 ) (1 )
Earnings before interest and taxes $ 20 $ 2 $ 28 $ 50
Interest, net
Earnings before taxes $ 20 $ 2 $ 28 $ 50
Taxes 5 1 6 12
Earnings from continuing operations $ 15 $ 1 $ 22 $ 38
Earnings from discontinued operations 47 47
Net earnings attributable to Campbell Soup Company $ 15 $ 48 $ 22 $ 85
Diluted earnings per share – continuing operations attributable to
Campbell Soup Company*
$ .05 $ $ .07 $ .13
Diluted earnings per share – discontinued operations .16 .16
Diluted net earnings per share attributable to Campbell Soup Company* $ .05 $ .16 $ .07 $ .28
*The sum of individual per share amounts may not add due to rounding.
Three Months Ended
April 29, 2018
(millions, except per share amounts)

Restructuring
charges,
implementation
costs
and other

related costs
(1)

Impairment
charges
(2)

Transaction
and
integration
costs
(7)

Claim
settlement
(8)

Adjustments
Gross margin $ 14 $ $ 37 $ $ 51
Marketing and selling expenses (2 ) (2 )
Administrative expenses (29 ) (6 ) (35 )
Other expenses / (income) (29 ) (22 ) (51 )
Restructuring charges (14 ) (10 ) (24 )
Earnings before interest and taxes $ 59 $ $ 82 $ 22 $ 163
Interest, net 18 18
Earnings before taxes $ 59 $ $ 64 $ 22 $ 145
Taxes 14 18 7 39
Earnings from continuing operations $ 45 $ $ 46 $ 15 $ 106
Earnings from discontinued operations 497 497
Net earnings attributable to Campbell Soup Company $ 45 $ 497 $ 46 $ 15 $ 603
Diluted earnings per share – continuing operations attributable to
Campbell Soup Company
$ .15 $ $ .15 $ .05 $ .35
Diluted earnings per share – discontinued operations 1.65 1.65
Diluted net earnings per share attributable to Campbell Soup Company $ .15 $ 1.65 $ .15 $ .05 $ 2.00
Nine Months Ended
April 28, 2019 April 29, 2018
(millions, except per share amounts)

As
reported

Adjustments(a) Adjusted

As
reported

Adjustments(a) Adjusted

Adjusted
Percent
Change

Gross margin $ 2,348 $ 25 $ 2,373 $ 2,119 $ 57 $ 2,176 9%
Gross margin percentage 32.9 % 33.3 % 36.9 % 37.9 %
Marketing and selling expenses 738 (6 ) 732 645 (2 ) 643
Administrative expenses 492 (42 ) 450 444 (73 ) 371
Research and development expenses 74 (2 ) 72 79 79
Other expenses / (income) 13 (28 ) (15 ) (7 ) (61 ) (68 )
Restructuring charges 21 (21 ) 58 (58 )
Earnings before interest and taxes $ 1,010 $ 124 $ 1,134 $ 900 $ 251 $ 1,151 (1)%
Interest, net 276 276 104 18 122
Earnings before taxes $ 734 $ 124 $ 858 $ 796 $ 233 $ 1,029
Taxes 184 28 212 106 181 287
Effective income tax rate 25.1 % 24.7 % 13.3 % 27.9 %
Earnings from continuing operations $ 550 $ 96 $ 646 $ 690 $ 52 $ 742 (13)%
Earnings (loss) from discontinued operations (331 ) 328 (3 ) (523 ) 572 49 n/m
Net earnings attributable to Campbell Soup Company $ 219 $ 424 $ 643 $ 167 $ 624 $ 791 (19)%
Diluted earnings per share – continuing operations attributable to
Campbell Soup Company*
$ 1.82 $ .32 $ 2.14 $ 2.28 $ .17 $ 2.46 (13)%
Diluted earnings (loss) per share – discontinued operations (1.10 ) 1.09 (.01 ) (1.73 ) 1.89 .16 n/m
Diluted net earnings per share attributable to Campbell Soup Company* $ .73 $ 1.40 $ 2.13 $ .55 $ 2.07 $ 2.62 (19)%
(a)See following tables for additional information.
*The sum of individual per share amounts may not add due to rounding.
n/m – not meaningful
Nine Months Ended
April 28, 2019
(millions, except per share amounts)

Restructuring
charges,
implementation
costs
and other

related costs
(1)

Impairment
charges
(2)

Costs
associated
with
planned
divestitures
(3)

Pension
settlement
(4)

Tax
reform
(5)

Adjustments
Gross margin $ 25 $ $ $ $ $ 25
Marketing and selling expenses (6 ) (6 )
Administrative expenses (35 ) (7 ) (42 )
Research and development expenses (2 ) (2 )
Other expenses / (income) (28 ) (28 )
Restructuring charges (21 ) (21 )
Earnings before interest and taxes $ 89 $ $ 7 $ 28 $ $ 124
Interest, net
Earnings before taxes $ 89 $ $ 7 $ 28 $ $ 124
Taxes 22 2 6 (2 ) 28
Earnings from continuing operations $ 67 $ $ 5 $ 22 $ 2 $ 96
Earnings from discontinued operations 1 275 52 328
Net earnings attributable to Campbell Soup Company $ 68 $ 275 $ 57 $ 22 $ 2 $ 424
Diluted earnings per share – continuing operations attributable to
Campbell Soup Company
$ .22 $ $ .02 $ .07 $ .01 $ .32
Diluted earnings per share – discontinued operations* .91 .17 1.09
Diluted net earnings per share attributable to Campbell Soup Company* $ .23 $ .91 $ .19 $ .07 $ .01 $ 1.40
*The sum of individual per share amounts may not add due to rounding.
Nine Months Ended
April 29, 2018
(millions, except per share amounts)

Restructuring
charges,
implementation
costs
and other

related costs
(1)

Impairment
charges
(2)

Tax
reform
(5)

Mark-
to-
market

(6)

Transaction
and
integration
costs
(7)

Claim
settlement
(8)

Adjustments
Gross margin $ 20 $ $ $ $ 37 $ $ 57
Marketing and selling expenses (2 ) (2 )
Administrative expenses (67 ) (6 ) (73 )
Other expenses / (income) 14 (53 ) (22 ) (61 )
Restructuring charges (48 ) (10 ) (58 )
Earnings before interest and taxes $ 137 $ $ $ (14 ) $ 106 $ 22 $ 251
Interest, net 18 18
Earnings before taxes $ 137 $ $ $ (14 ) $ 88 $ 22 $ 233
Taxes 35 120 (4 ) 23 7 181
Earnings from continuing operations $ 102 $ $ (120 ) $ (10 ) $ 65 $ 15 $ 52
Earnings from discontinued operations 1 571 572
Net earnings attributable to Campbell Soup Company $ 103 $ 571 $ (120 ) $ (10 ) $ 65 $ 15 $ 624
Diluted earnings per share – continuing operations attributable to
Campbell Soup Company*
$ .34 $ $ (.40 ) $ (.03 ) $ .22 $ .05 $ .17
Diluted earnings per share – discontinued operations 1.89 1.89
Diluted net earnings per share attributable to Campbell Soup Company* $ .34 $ 1.89 $ (.40 ) $ (.03 ) $ .22 $ .05 $ 2.07
*The sum of individual per share amounts may not add due to rounding.
Year Ended
(millions, except per share amounts) July 29, 2018
Gross margin $ 2,743
Add: Restructuring charges, implementation costs and other related
costs (1)
45
Add: Transaction and integration costs (7) 42
Adjusted Gross margin $ 2,830
Adjusted Gross margin percentage 36.6 %
Earnings before interest and taxes, as reported $ 1,190
Add: Restructuring charges, implementation costs and other related
costs (1)
183
Add: Impairment charges (2) 54
Deduct: Total pension and postretirement benefit mark-to-market and
curtailment adjustments (6)
(136 )
Add: Transaction and integration costs (7) 120
Add: Claim settlement (8) 22
Adjusted Earnings before interest and taxes $ 1,433
Interest, net, as reported $ 197
Add: Transaction and integration costs (7) 18
Adjusted Interest, net $ 215
Adjusted Earnings before taxes $ 1,218
Taxes on earnings, as reported $ 153
Add: Tax benefit from restructuring charges, implementation costs
and other related costs (1)
48
Add: Tax benefit from impairment charges (2) 13
Add: Tax benefit from tax reform (5) 126
Deduct: Tax expense from total pension and postretirement benefit
mark-to-market and curtailment adjustments (6)
(33 )
Add: Tax benefit from transaction and integration costs (7) 29
Add: Tax benefit from claim settlement (8) 7
Adjusted Taxes on earnings $ 343
Adjusted effective income tax rate 28.2 %
Earnings from continuing operations, as reported $ 840
Add: Net adjustment from restructuring charges, implementation costs
and other related costs (1)
135
Add: Net adjustment from impairment charges (2) 41
Deduct: Net adjustment from tax reform (5) (126 )
Deduct: Net adjustment from total pension and postretirement benefit
mark-to-market and curtailment adjustments (6)
(103 )
Add: Net adjustment from transaction and integration costs (7) 73
Add: Net adjustment from claim settlement (8) 15
Adjusted Earnings from continuing operations $ 875
Loss from discontinued operations, as reported $ (579 )
Add: Net adjustment from restructuring charges, implementation costs
and other related costs (1)
1
Add: Net adjustment from impairment charges (2) 571
Adjusted Loss from discontinued operations $ (7 )
Adjusted Net earnings attributable to Campbell Soup Company $ 868
Diluted earnings per share – continuing operations attributable
to Campbell Soup Company, as reported
$ 2.78
Add: Net adjustment from restructuring charges, implementation costs
and other related costs (1)
.45
Add: Net adjustment from impairment charges (2) .14
Deduct: Net adjustment from tax reform (5) (.42 )
Deduct: Net adjustment from total pension and postretirement benefit
mark-to-market and curtailment adjustments (6)
(.34 )
Add: Net adjustment from transaction and integration costs (7) .24
Add: Net adjustment from claim settlement (8) .05
Adjusted Diluted earnings per share – continuing operations
attributable to Campbell Soup Company
$ 2.90
Diluted loss per share – discontinued operations, as reported $ (1.92 )
Add: Net adjustment from restructuring charges, implementation costs
and other related costs (1)
Add: Net adjustment from impairment charges (2) 1.89
Adjusted Diluted loss per share – discontinued operations* $ (.02 )
Diluted net earnings per share attributable to Campbell Soup
Company, as reported
$ .86
Add: Net adjustment from restructuring charges, implementation costs
and other related costs (1)
.45
Add: Net adjustment from impairment charges (2) 2.03
Deduct: Net adjustment from tax reform (5) (.42 )
Deduct: Net adjustment from total pension and postretirement benefit
mark-to-market and curtailment adjustments (6)
(.34 )
Add: Net adjustment from transaction and integration costs (7) .24
Add: Net adjustment from claim settlement (8) .05
Adjusted Diluted net earnings per share attributable to Campbell
Soup Company*
$ 2.87

*The sum of individual per share amounts may not add due to
rounding.

Adjusted Gross Margin on a Combined Basis
(Continuing Operations and Discontinued Operations)

Three Months Ended
(millions)

April 28,
2019

April 29,
2018

Adjusted Gross margin – continuing operations $ 727 $ 666
Gross margin – discontinued operations $ 28 $ 3
Add: Impairment charges (2) 11
Adjusted Gross margin – discontinued operations $ 28 $ 14
Adjusted Combined Gross margin $ 755 $ 680
Adjusted Combined Gross margin percentage 31.6 % 32.0 %

Adjusted Earnings Before Interest and
Taxes on a Combined Basis (Continuing Operations and Discontinued
Operations)

Three Months Ended
April 28, 2019 April 29, 2018
(millions)

As
reported

Costs
associated
with
planned
divestitures
(3)

Adjusted

As
reported

Restructuring
charges,
implementation
costs
and other

related costs
(1)

Impairment
charges
(2)

Adjusted

Adjusted
Percent
Change

Earnings (loss) from discontinued operations $ (47 ) $ 47 $ $ (466 ) $ $ 497 $ 31
Add (Deduct): Taxes on earnings (loss) from discontinued operations 30 (23 ) 7 (167 ) 1 122 (44 )
Add: Interest, net
Earnings (loss) before interest and taxes – discontinued
operations
$ (17 ) $ 24 $ 7 $ (633 ) $ 1 $ 619 $ (13 )
Earnings before interest and taxes – continuing operations 266 316 158 321
Combined Earnings before interest and taxes $ 249 $ 323 $ (475 ) $ 308 5

%

Nine Months Ended
April 28, 2019
(millions)

As
reported

Restructuring
charges,
implementation
costs
and other

related costs
(1)

Impairment
charges
(2)

Costs
associated
with
planned
divestitures
(3)

Adjusted

Earnings (loss) from discontinued operations $ (331 ) $ 1 $ 275 $ 52 $ (3 )
Add (Deduct): Taxes on earnings (loss) from discontinued operations (61 ) 85 (21 ) 3
Add: Interest, net
Earnings (loss) before interest and taxes – discontinued
operations
$ (392 ) $ 1 $ 360 $ 31 $
Earnings before interest and taxes – continuing operations 1,010 1,134
Combined Earnings before interest and taxes $ 618 $ 1,134
Nine Months Ended
April 29, 2018
(millions)

As
reported

Restructuring
charges,
implementation
costs
and other

related costs
(1)

Impairment
charges
(2)

Adjusted
Earnings (loss) from discontinued operations $ (523 ) $ 1 $ 571 $ 49
Add (Deduct): Taxes on earnings (loss) from discontinued operations (197 ) 1 123 (73 )
Add: Interest, net
Earnings (loss) before interest and taxes – discontinued
operations
$ (720 ) $ 2 $ 694 $ (24 )
Earnings before interest and taxes – continuing operations 900 1,151
Combined Earnings before interest and taxes $ 180 $ 1,127
Adjusted Combined EBIT percentage change Nine Months Ended
2019/2018
1 %
Year Ended
July 29, 2018
(millions)

As
reported

Restructuring
charges,
implementation
costs
and other

related costs
(1)

Impairment
charges
(2)

Adjusted
Earnings (loss) from discontinued operations $ (579 ) $ 1 $ 571 $ (7 )
Add (Deduct): Taxes on earnings (loss) from discontinued operations (142 ) 1 123 (18 )
Add: Interest, net
Earnings (loss) before interest and taxes – discontinued
operations
$ (721 ) $ 2 $ 694 $ (25 )
Earnings before interest and taxes – continuing operations 1,190 1,433
Combined Earnings before interest and taxes $ 469 $ 1,408

Source: Campbell Soup Company

INVESTOR CONTACT:
Ken Gosnell
(856)
342-6081
ken_gosnell@campbellsoup.com

MEDIA CONTACT:
Thomas Hushen
(856)
342-5227
thomas_hushen@campbellsoup.com