Adjusted Net Earnings Per Share Increased 13 Percent

CAMDEN, N.J., May 24, 2010 (BUSINESS WIRE) –Campbell Soup Company (NYSE:CPB) today reported its fiscal 2010
third-quarter results.

Third-Quarter Summary

• Sales Increased 7 Percent to $1.802 Billion
• U.S. Soup Sales Increased 2 Percent on Volume Gains of 5 Percent;
  U.S. Beverages Sales Increased 13 Percent
• Continued Gross Margin Improvement Driven by Increased Productivity
• Campbell Expects Full-Year Adjusted Net Earnings Per Share Growth
  at the High End of Range of 9 to 11 Percent

Net earnings for the quarter ended May 2, 2010, were $168 million, or
$0.49 per share, compared with $174 million, or $0.49, in the prior
year. Excluding all items impacting comparability in both periods,
adjusted net earnings rose 9 percent to $186 million compared with $171
million in the prior year’s quarter, and adjusted net earnings per share
grew 13 percent to $0.54 in the current quarter compared with $0.48 in
the year-ago quarter. The current quarter’s reported net earnings
included adjustments related to the previously announced restructuring
program and a deferred tax expense related to the enactment of U.S.
health care legislation in March 2010. A detailed reconciliation of
current and prior-year adjusted financial information to the reported
information is included at the end of this news release.

Douglas R. Conant, Campbell’s President and CEO, said, “We delivered
another quarter of strong adjusted earnings growth, driven by an
improvement in volume trends, coupled with continued gains from
productivity and favorable currency. Our U.S. beverages and sauces
businesses had an outstanding quarter with strong top- and bottom-line
performance, led by ‘V8 V-Fusion’ juices and ‘Prego’ and ‘Pace’ sauces.
In addition, U.S. soup delivered strong volume gains, particularly in
ready-to-serve soups. The promotional plans we executed in the third
quarter drove volume growth in all formats–condensed, ready-to-serve and
broth. We also were pleased with the earnings growth of our Baking and
Snacking segment, led by Pepperidge Farm.

“Importantly, our products used to prepare meals at home continued to
resonate with consumers. Meal makers–which include condensed cooking
soups, broth and sauces–are crucial to how we will compete and win in
the simple meals category.”

Conant concluded, “Based on our third-quarter performance and outlook
for the remainder of the year, we expect adjusted net earnings per share
growth to be at the high end of our range.”

Fiscal 2010 Guidance

Campbell expects sales growth of 2.5 to 3.5 percent, adjusted earnings
growth before interest and taxes (EBIT) of 6 to 7 percent and adjusted
net earnings per share growth (EPS) at the high end of the 9- to
11-percent range from the fiscal 2009 adjusted base of $2.21. This
guidance includes the anticipated impact of currency translation.

Third-Quarter Results

For the third quarter, sales increased 7 percent to $1.802 billion. The
increase in sales reflected the following factors:

• Volume and mix added 4 percent
• Price and sales allowances added 1 percent
• Increased promotional spending subtracted 3 percent
• Currency added 5 percent

Third-Quarter Financial Details

• Gross margin was 41.2 percent, compared with 40.6 percent a year ago.
  The prior year included $6 million of costs related to initiatives to
  improve operational efficiency and long-term profitability, as well as
  a favorable net adjustment of $11 million related to commodity
  hedging. After adjusting for these items, the gross margin percentage
  for the prior-year quarter was 40.3 percent. The increase in gross
  margin percentage was primarily due to productivity improvements,
  partly offset by promotional spending.
• Marketing and selling expenses increased to $252 million compared with
  $246 million in the prior year, primarily due to the impact of
  currency and increased selling expenses, partially offset by lower
  advertising and consumer promotion costs. Lower advertising costs
  reflected a reduction in media rates and a shift of resources to trade
  promotion in many businesses compared with the year-ago quarter.
• Administrative expenses were $156 million versus $129 million in the
  prior-year quarter, primarily due to higher employee benefit costs,
  including equity-related benefit expenses and pension costs, and the
  impact of currency.
• EBIT was $292 million compared with $286 million in the prior-year
  quarter. Excluding items impacting comparability, adjusted EBIT was
  $304 million in the current quarter and $281 million in the prior-year
  quarter. Adjusted EBIT increased 8 percent primarily due to improved
  gross margin performance, higher sales and the impact of currency,
  partially offset by increased administrative expenses.

Nine-Month Results

Net earnings for the first nine months were $731 million, or $2.09 per
share, compared with $667 million, or $1.83 per share, in the year-ago
period. Excluding all items impacting comparability in both periods,
adjusted net earnings per share increased by 13 percent.

For the first nine months of fiscal 2010, sales were $6.158 billion, an
increase of 2 percent over the year-ago period. The change in sales for
the periodreflected the following factors:

• Volume and mix subtracted 1 percent
• Price and sales allowances added 2 percent
• Increased promotional spending subtracted 2 percent
• Currency added 3 percent

Year-to-Date Financial Details

• Gross margin was 41.2 percent, compared with 39.5 percent a year ago.
  The prior year included $21 million of costs related to initiatives to
  improve operational efficiency and long-term profitability and $14
  million of unrealized losses on commodity hedges. After adjusting for
  these items, the gross margin percentage for the prior year was 40.1
  percent. The increase in gross margin percentage was primarilydue
  to productivity improvements, partially offset by cost inflation.
• Marketing and selling expenses decreased $31 million to $837 million,
  primarily due to lower advertising and other marketing expenses,
  partially offset by the impact of currency.
• Administrative expenses were $438 million versus $407 million in the
  year-ago period, primarily due to higher benefit costs and the impact
  of currency.
• EBIT was $1.161 billion compared with $1.040 billion in the prior
  year. Excluding items impacting comparability in both years, adjusted
  EBIT was $1.173 billion in the current year versus $1.075 billion in
  the year-ago period. Adjusted EBIT increased 9 percent primarily due
  to improved gross margin performance, the impact of currency and lower
  advertising expenses, partially offset by lower sales volumes and
  increased administrative expenses.
• Cash flow from operations was $859 million compared with $806 million
  in the year-ago period. The current-year cash flow reflected
  improvements in working capital and higher earnings, partly offset by
  a $260 million contribution to Campbell’s U.S. pension plan.
• Year-to-date, Campbell repurchased 9 million shares for $315 million
  under its strategic share repurchase program announced in June 2008
  and the company’s ongoing practice of buying back shares sufficient to
  offset those issued under incentive compensation plans.

Summary of Fiscal 2010 Third-Quarter and Year-to-Date Results by
Segment

U.S. Soup, Sauces and Beverages

Sales for U.S. Soup, Sauces and Beverages were $848 million for the
third quarter, an increase of 5 percent compared with a year ago. The
change in sales reflected the following factors:

• Volume and mix added 8 percent
• Price and sales allowances added 1 percent
• Increasedpromotional spending subtracted 4 percent

Soup sales for the quarter increased 2 percent, as 5-percent volume
growth was partly offset by increased promotional spending.

• Sales of “Campbell’s” condensed cooking and eating soups decreased 1
  percent, as increased promotional spending more than offset volume
  gains.
• Sales of ready-to-serve soups increased 4 percent, an improvement from
  the first half of the fiscal year. Strong volume gains in “Chunky” and
  “Select Harvest” canned soups more than offset increased promotional
  spending and declines in microwavable varieties.
• Broth salesincreased 9 percent.

Beverage sales increased 13 percent driven by volume gains.

• “V8 V-Fusion” juice sales increased significantly due to increased
  advertising and promotional activity and successful new item launches.
• Sales of “V8” vegetable juice and “V8 Splash” juice drinks rose as
  both benefitted from increased promotional activity.

Sauces sales improved reflecting good gains in “Prego” pasta sauce and
double-digit growth in “Pace” Mexican sauce.

Operating earnings were $214 million, compared with $195 million in the
prior-year period. The increase in operating earnings was primarily due
to higher sales and improved gross margin performance.

For the first nine months, U.S. Soup, Sauces and Beverages sales
decreased 2 percent to $3.056 billion. A breakdown of the change in
sales follows:

• Volume and mix subtracted 2 percent
• Price and sales allowances added 2 percent
• Increased promotional spending subtracted 2 percent

For the first nine months, U.S. soup sales declined 4 percent due to a
10-percent decrease in ready-to-serve soups. Sales of condensed soup
fell 1 percent, with an increase in cooking varieties more than offset
by a decline in eating varieties. Broth sales increased 2 percent.

Operating earnings were $804 million, compared with $779 million in the
year-ago period. The increase in operating earnings was due to improved
gross margin performance and lower advertising expense, partially offset
by lower sales.

Baking and Snacking

Sales for Baking and Snacking were $477 million in the third quarter, an
increase of 11 percent from a year ago. A breakdown of the change in
sales follows:

• Volume and mix added 3 percent
• Price and sales allowances added 1 percent
• Increased promotional spending subtracted 3 percent
• Currency added 9 percent
• Acquisitions added 1 percent

Further details of sales results included the following:

• Sales of Pepperidge Farm increased primarily due to the acquisition of
  Ecce Panis, Inc. and gains in the cookies and crackers business.
  • Excluding the acquisition of Ecce Panis, sales from the bakery
    business were comparable to the prior year, as volume increases
    were mostly offset by increased promotional spending.
  • In the cookies and crackers business, sales increased, reflecting
    the continued solid growth of “Goldfish” snack crackers, partly
    offset by a decline in cookies.

• In Australia, sales increased due to currency and continued growth in
  Arnott’s, led by chocolate snacks, partially offset by declines in
  both savory and sweet biscuit products.

Operating earnings were $76 million, compared with $57 million in the
prior-year period. The prior-year quarter included $1 million in costs
related to the restructuring program. The increase in operating earnings
was due to the favorable impact of currency and margin growth in
Pepperidge Farm.

For the first nine months, sales increased 8 percent to $1.496 billion.
A breakdown of the change in sales follows:

• Volume and mix added 2 percent
• Price and sales allowances added 1 percent
• Increased promotional spending subtracted 3 percent
• Currency added 7 percent
• Acquisitions added 1 percent

Operating earnings were $249 million, compared with $193 million in the
year-ago period. The prior-year period included $3 million in costs
related to the restructuring program. The increase in operating earnings
was due to the favorable impact of currency and margin growth in both
Pepperidge Farm and Arnott’s.

International Soup, Sauces and Beverages

Sales for International Soup, Sauces and Beverages were $331 million for
the third quarter, an increase of 11 percent compared with a year ago.
The change in sales reflected the following factors:

• Volume and mix subtracted 2 percent
• Currency added 13 percent

Further details of sales results included the following:

• In Europe, sales increased primarily due to currency and higher sales
  in Germany, partly offset by lower sales in France.
• In Asia Pacific, sales increased primarily due to currency.
• In Canada, sales increased due to currency, partially offset by lower
  soup sales.

Operating earnings were $37 million, compared with $29 million in the
year-ago period. The increase in operating earnings was due to the
favorable impact of currency and margin growth in Europe, partly offset
by declines in Canada.

For the first nine months, sales increased 7 percent to $1.142 billion.
A breakdown of the change in sales follows:

• Volume and mix subtracted 2 percent
• Price and sales allowances added 3 percent
• Increased promotional spending subtracted 2 percent
• Currency added 9 percent
• Divestitures subtracted 1 percent

Excluding the impact of currency and divestitures, declines in Europe
and Canada were partly offset by gains in Asia Pacific.

Operating earnings were $155 million, compared with $117 million in the
year-ago period. The increase in operating earnings was primarily driven
by the favorable impact of currency and growth in Europe.

North America Foodservice

Sales were $146 million for the third quarter, a decrease of 3 percent
compared with a year ago. A breakdown of the change in sales follows:

• Volume and mix subtracted 5 percent
• Increased promotional spending subtracted 1 percent
• Currency added 3 percent

Sales declined primarily due to continued weakness in the food service
sector.

There was an operating loss of $3 million compared with a $13 million
gain in the prior-year quarter. The current quarter included a $12
million restructuring charge, while the prior-year quarter included $5
million in restructuring-related costs. The remaining decrease was
primarily due to lower sales.

For the first nine months, sales were $464 million compared with $476
million in the year-ago period. A breakdown of the change in sales
follows:

• Volume and mix subtracted 4 percent
• Increased promotional spending subtracted 1 percent
• Currency added 2 percent

Operating earnings were $40 million, compared with $34 million in the
prior period. The current year included a $12 million restructuring
charge, while the prior-year period included $18 million in
restructuring-related costs. Excluding these items, operating earnings
were comparable to a year ago.

Unallocated Corporate Expenses

Unallocated corporate expenses increased to $32 million in the current
quarter from $8 million a year ago. The prior year included a favorable
net adjustment of $11 million related to commodity hedging. The
remaining increase was primarily due to higher equity-related benefit
costs. Unallocated expenses for the first nine months were $87 million
versus $83 million in the prior year. The prior year included $14
million of unrealized losses on commodity hedges. The remaining increase
was primarily due to higher equity-related benefit costs.

Non-GAAP Financial Information

A reconciliation of the adjusted fiscal 2010 and 2009 financial
information to the reported financial information is attached to this
news release.

Conference Call

Campbell will host a conference call to discuss these results on May 24,
2010, at 10:00 a.m. Eastern Daylight Time. U.S. participants may access
the call at 1-866-238-1640 and non-U.S. participants at 1-703-639-1161.
Participants should call at least five minutes prior to the starting
time. The passcode is “Campbell Soup” and the conference leader is
Jennifer Driscoll. The call will also be broadcast live over the
Internet at investor.campbellsoupcompany.com
and can be accessed by clicking on the “News & Events” button. A
recording of the call will be available approximately two hours after it
is completed through midnight June 7, 2010, at 1-888-266-2081 or
1-703-925-2533. The access code is 1457585.

Reporting Segments

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, stock and canned poultry businesses, “Prego” pasta
sauce, “Pace” Mexican sauce, “Campbell’s” canned pasta, gravies and
beans, “V8” vegetable juices, “V8 V-Fusion” juices,“V8 Splash”
juice beverages, “Campbell’s” tomato juice, and“Wolfgang Puck”
soups, stocks and broths.

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

International Soup, Sauces and Beverages includes the soup, sauce
and beverage businesses outside of the United States, including Europe,
Mexico, Latin America, the Asia Pacific region,as well asthe
emerging markets of Russia and China,and the retail business in
Canada.

North America Foodservice includes the Away FromHome
business in the U.S. and Canada.

About Campbell Soup Company

Campbell Soup Company is a global manufacturer and marketer of
high-quality foods and simple meals, including soup and sauces, baked
snacks and healthy beverages. Founded in 1869, the company has a
portfolio of market-leading brands, including “Campbell’s,” “Pepperidge
Farm,” “Arnott’s” and “V8.” Through its corporate social responsibility
program, the company strives to make a positive impact in the workplace,
in the marketplace and in the communities in which it operates. Campbell
is a member of the Standard & Poor’s 500 and the Dow Jones
Sustainability Indexes. For more information, visit www.campbellsoup.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 sales, earnings, and margins. These forward-looking
statements 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 impact of strong competitive responses to the company’s efforts
to leverage its brand power in the market; (2) the risks associated with
trade and consumer acceptance of the company’s initiatives; (3) the
company’s ability to realize projected cost savings and benefits; (4)
the company’s ability to manage changes to its business processes; (5)
the increased significance of certain of the company’s key trade
customers; (6) the impact of fluctuations in the supply or costs of
energy and raw and packaging materials; (7) the risks associated with
portfolio changes; (8) the uncertainties of litigation; (9) the impact
of changes in currency exchange rates, tax rates, interest rates, debt
and equity markets, inflation rates, economic conditions and other
external factors; (10) the impact of unforeseen business disruptions in
one or more of the company’s markets due to political instability, civil
disobedience, armed hostilities, natural disasters or other calamities;
and (11) 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
		May 2,				May 3,
		2010				2009
Net sales		$	1,802			$	1,686
Costs and expenses
Cost of products sold			1,059				1,001
Marketing and selling expenses			252				246
Administrative expenses			156				129
Research and development expenses			31				27
Other expenses / (income)			–				(3	)
Restructuring charges			12				–
Total costs and expenses			1,510				1,400
Earnings before interest and taxes			292				286
Interest, net			27				26
Earnings before taxes			265				260
Taxes on earnings			97				86
Net earnings		$	168			$	174
Per share – basic
Net earnings		$	.49			$	.49
Dividends		$	.275			$	.25
Weighted average shares outstanding – basic			339				350
Per share – assuming dilution
Net earnings		$	.49			$	.49
Weighted average shares outstanding
– assuming dilution			342				351

In the first quarter of fiscal 2010, the company adopted and retrospectively applied new accounting guidance related to the calculation of earnings per share. The retrospective application of the provision resulted in a reduction of the previously reported basic net earnings per share of $.01 for the third quarter of fiscal 2009. There was no change to the previously reported diluted net earnings per share for the third quarter of fiscal 2009.

In fiscal 2010, the company recorded pre-tax restructuring charges of $12 ($8 after tax or $.02 per share) for pension benefit costs associated with the initiatives announced in April 2008 to improve operational efficiency. In fiscal 2009, the company recorded pre-tax restructuring-related costs in cost of products sold of $6 ($4 after tax or $.01 per share) related to the previously announced initiatives.

In fiscal 2010, the company recorded deferred tax expense of $10, or $.03 per share, due to the enactment of U.S. health care legislation in March 2010.

In fiscal 2009, the company recognized in cost of products sold an $11 ($7 after tax or $.02 per share) favorable net adjustment on commodity hedge positions.

CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS (unaudited)
(millions, except per share amounts)
		NINE MONTHS ENDED
		May 2,				May 3,
		2010				2009
Net sales		$	6,158			$	6,058
Costs and expenses
Cost of products sold			3,621				3,665
Marketing and selling expenses			837				868
Administrative expenses			438				407
Research and development expenses			88				83
Other expenses / (income)			1				(5	)
Restructuring charges			12				–
Total costs and expenses			4,997				5,018
Earnings before interest and taxes			1,161				1,040
Interest, net			80				83
Earnings before taxes			1,081				957
Taxes on earnings			350				294
Earnings from continuing operations			731				663
Earnings from discontinued operations			–				4
Net earnings		$	731			$	667
Per share – basic
Earnings from continuing operations		$	2.11			$	1.84
Earnings from discontinued operations			–				.01
Net earnings		$	2.11			$	1.85
Dividends		$	.80			$	.75
Weighted average shares outstanding – basic			341				354
Per share – assuming dilution
Earnings from continuing operations		$	2.09			$	1.82
Earnings from discontinued operations			–				.01
Net earnings		$	2.09			$	1.83
Weighted average shares outstanding
– assuming dilution			344				357

In the first quarter of fiscal 2010, the company adopted and retrospectively applied new accounting guidance related to the calculation of earnings per share. The retrospective application of the provision resulted in a reduction of the previously reported basic earnings per share from continuing operations and net earnings of $.03 and of the previously reported diluted earnings per share from continuing operations and net earnings of $.02 for the nine-month period ended May 3, 2009. There was no change to the basic and diluted earnings per share from discontinued operations for the nine-month period ended May 3, 2009.

In fiscal 2010, the company recorded pre-tax restructuring charges of $12 ($8 after tax or $.02 per share) for pension benefit costs associated with the initiatives announced in April 2008 to improve operational efficiency. In fiscal 2009, the company recorded pre-tax restructuring-related costs in cost of products sold of $21 ($14 after tax or $.04 per share) related to the previously announced initiatives.

In fiscal 2010, the company recorded deferred tax expense of $10, or $.03 per share, due to the enactment of U.S. health care legislation in March 2010.

In fiscal 2009, the company recognized expense of $14 ($9 after tax or $.03 per share) in cost of products sold related to unrealized losses on commodity hedges.

In fiscal 2009, the company recognized a $4 (or $.01 per share) tax benefit in discontinued operations related to the sale of the Godiva Chocolatier business.

CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share amounts)
		THREE MONTHS ENDED
		May 2,					May 3,					Percent
Sales		2010					2009					Change
Contributions:
U.S. Soup, Sauces and Beverages		$	848				$	808				5	%
Baking and Snacking			477					431				11	%
International Soup, Sauces and Beverages			331					297				11	%
North America Foodservice			146					150				(3	)%
Total sales		$	1,802				$	1,686				7	%
Earnings
Contributions:
U.S. Soup, Sauces and Beverages		$	214				$	195
Baking and Snacking			76					57
International Soup, Sauces and Beverages			37					29
North America Foodservice			(3	)				13
Total operating earnings			324					294
Unallocated corporate expenses			(32	)				(8	)
Earnings before interest and taxes			292					286
Interest, net			(27	)				(26	)
Taxes on earnings			(97	)				(86	)
Net earnings		$	168				$	174
Per share – assuming dilution
Net earnings		$	.49				$	.49

In the first quarter of fiscal 2010, the company adopted and retrospectively applied new accounting guidance related to the calculation of earnings per share. There was no change to the previously reported diluted net earnings per share for the third quarter of fiscal 2009.

In fiscal 2010, the company recorded pre-tax restructuring charges of $12 ($8 after tax or $.02 per share) for pension benefit costs associated with the initiatives announced in April 2008 to improve operational efficiency. The restructuring charges were recognized in the North America Foodservice segment. In fiscal 2009, the company recorded pre-tax restructuring-related costs in cost of products sold of $6 ($4 after tax or $.01 per share) related to the previously announced initiatives. The restructuring-related costs were recognized in the following segments: North America Foodservice – $5 and Baking and Snacking – $1.

In fiscal 2010, the company recorded deferred tax expense of $10, or $.03 per share, due to the enactment of U.S. health care legislation in March 2010.

In fiscal 2009, the company recognized in cost of products sold an $11 ($7 after tax or $.02 per share) favorable net adjustment on commodity hedge positions. The favorable net adjustment is included in Unallocated corporate expenses.

CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share amounts)
		NINE MONTHS ENDED
		May 2,					May 3,					Percent
Sales		2010					2009					Change
Contributions:
U.S. Soup, Sauces and Beverages		$	3,056				$	3,134				(2	)%
Baking and Snacking			1,496					1,380				8	%
International Soup, Sauces and Beverages			1,142					1,068				7	%
North America Foodservice			464					476				(3	)%
Total sales		$	6,158				$	6,058				2	%
Earnings
Contributions:
U.S. Soup, Sauces and Beverages		$	804				$	779
Baking and Snacking			249					193
International Soup, Sauces and Beverages			155					117
North America Foodservice			40					34
Total operating earnings			1,248					1,123
Unallocated corporate expenses			(87	)				(83	)
Earnings before interest and taxes			1,161					1,040
Interest, net			(80	)				(83	)
Taxes on earnings			(350	)				(294	)
Earnings from continuing operations			731					663
Earnings from discontinued operations			–					4
Net earnings		$	731				$	667
Per share – assuming dilution
Earnings from continuing operations		$	2.09				$	1.82
Earnings from discontinued operations			–					.01
Net earnings		$	2.09				$	1.83

In the first quarter of fiscal 2010, the company adopted and retrospectively applied new accounting guidance related to the calculation of earnings per share. The retrospective application of the provision resulted in a reduction of the previously reported diluted earnings per share from continuing operations and net earnings of $.02 for the nine-month period ended May 3, 2009. There was no change to the diluted earnings per share from discontinued operations for the nine-month period ended May 3, 2009.

In fiscal 2010, the company recorded pre-tax restructuring charges of $12 ($8 after tax or $.02 per share) for pension benefit costs associated with the initiatives announced in April 2008 to improve operational efficiency. The restructuring charges were recognized in the North America Foodservice segment. In fiscal 2009, the company recorded pre-tax restructuring-related costs in cost of products sold of $21 ($14 after tax or $.04 per share) related to the previously announced initiatives. The restructuring-related costs were recognized in the following segments: North America Foodservice – $18 and Baking and Snacking – $3.

In fiscal 2010, the company recorded deferred tax expense of $10, or $.03 per share, due to the enactment of U.S. health care legislation in March 2010.

In fiscal 2009, the company recognized expense of $14 ($9 after tax or $.03 per share) in cost of products sold related to unrealized losses on commodity hedges. The losses are included in Unallocated corporate expenses.

In fiscal 2009, the company recognized a $4 (or $.01 per share) tax benefit in discontinued operations related to the sale of the Godiva Chocolatier business.

CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS (unaudited)
(millions)
			May 2,				May 3,
			2010				2009
Current assets			$	1,431			$	1,448
Plant assets, net				1,995				1,812
Intangible assets, net				2,457				2,292
Other assets				103				290
Total assets			$	5,986			$	5,842
Current liabilities			$	2,114			$	1,633
Long-term debt				1,542				1,954
Other liabilities				1,234				1,122
Total equity				1,096				1,133
Total liabilities and equity			$	5,986			$	5,842
Total debt			$	2,487			$	2,582
Cash and cash equivalents			$	80			$	61

Certain reclassifications were made to prior year amounts to conform with the current year presentation.

Reconciliation of GAAP and Non-GAAP Financial Measures

Third Quarter Ended May 2, 2010

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.

Items Impacting Gross Margin and Earnings

The company believes that financial information excluding certain 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 gross margin and earnings results if these transactions are excluded.

The following items impacted gross margin and/or earnings:

(1)		In fiscal 2008, the company announced initiatives to improve operational efficiency and long-term profitability, including selling certain salty snack food brands and assets in Australia, closing certain production facilities in Australia and Canada, and streamlining the company’s management structure. In the third quarter of fiscal 2010, the company recorded pre-tax restructuring charges of $12 million ($8 million after tax or $0.02 per share) for pension benefit costs related to these initiatives. In the third quarter of fiscal 2009, the company recorded expenses of $6 million ($4 million after tax or $0.01 per share) in cost of products sold. The year-to-date impact in fiscal 2009 was $21 million of expenses ($14 million after tax or $0.04 per share) recorded in cost of products sold. For the full year ended August 2, 2009, the expenses recorded in cost of products sold related to these initiatives were $22 million ($15 million after tax or $0.04 per share).
(2)		In the third quarter of fiscal 2010, the company recorded deferred tax expense of $10 million ($0.03 per share) due to the enactment of U.S. health care legislation in March 2010. The law changed the tax treatment of subsidies to companies that provide prescription drug benefits to retirees. Accordingly, the company recorded the non-cash charge to reduce the value of the deferred tax asset associated with the subsidy.
(3)		In the third quarter of fiscal 2009, the company recognized in cost of products sold an $11 million ($7 million after tax or $0.02 per share) favorable net adjustment on commodity hedge positions. The aggregate year-to-date impact in fiscal 2009 was $14 million ($9 million after tax or $0.03 per share) of unrealized losses. The aggregate full year fiscal 2009 impact from unrealized gains and losses on open commodity hedges was not material. During fiscal 2010, unrealized gains and losses on commodity hedging were not material.
(4)		In the second quarter of fiscal 2009, the company recorded a $4 million tax benefit ($0.01 per share) in discontinued operations related to the sale of the Godiva Chocolatier business.
(5)		In the fourth quarter of fiscal 2009, as part of the company’s annual review of intangible assets, a non-cash impairment charge of $67 million ($47 million after tax or $0.13 per share) was recorded in other expenses/(income) related to certain European trademarks, primarily in Germany and the Nordic region, used in the International Soup, Sauces and Beverages segment.
The tables below reconcile financial information, presented in accordance with GAAP, to financial information excluding certain transactions:

(millions, except per share amounts)
		Third Quarter
		May 2, 2010					May 3, 2009					% Change
Gross margin, as reported		$	743				$	685
Deduct: Net adjustment on commodity hedges (3)			–					(11	)
Add: Restructuring related costs (1)			–					6
Adjusted Gross margin		$	743				$	680				9	%
Adjusted Gross margin percentage			41.2	%				40.3	%
Earnings before interest and taxes, as reported		$	292				$	286
Deduct: Net adjustment on commodity hedges (3)			–					(11	)
Add: Restructuring charges and related costs (1)			12					6
Adjusted Earnings before interest and taxes		$	304				$	281				8	%
Interest, net, as reported		$	27				$	26
Adjusted Earnings before taxes		$	277				$	255
Taxes on earnings, as reported		$	97				$	86
Deduct: Tax expense from the net adjustment on commodity hedges (3)			–					(4	)
Add: Tax benefit from restructuring charges and related costs (1)			4					2
Deduct: Tax expense from health care legislation (2)			(10	)				–
Adjusted Taxes on earnings		$	91				$	84
Adjusted effective income tax rate			32.9	%				32.9	%
Net earnings, as reported		$	168				$	174
Deduct: Net adjustment on commodity hedges (3)			–					(7	)
Add: Net adjustment from restructuring charges and related costs (1)			8					4
Add: Tax expense from health care legislation (2)			10					–
Adjusted Net earnings		$	186				$	171				9	%
Diluted net earnings per share, as reported (a)		$	0.49				$	0.49
Deduct: Net adjustment on commodity hedges (3)			–					(0.02	)
Add: Net adjustment from restructuring charges and related costs (1)			0.02					0.01
Add: Tax expense from health care legislation (2)			0.03					–
Adjusted Diluted net earnings per share (a)		$	0.54				$	0.48				13	%

		(a)		In the first quarter of fiscal 2010, the company adopted and retrospectively applied new accounting guidance related to the calculation of earnings per share. There was no change to the previously reported or adjusted diluted net earnings per share for the third quarter of fiscal 2009.

(millions, except per share amounts)		Year-to-Date
		May 2, 2010					May 3, 2009					% Change
Gross margin, as reported		$	2,537				$	2,393
Add: Unrealized losses on commodity hedges (3)			–					14
Add: Restructuring related costs (1)			–					21
Adjusted Gross margin		$	2,537				$	2,428				4	%
Adjusted Gross margin percentage			41.2	%				40.1	%
Earnings before interest and taxes, as reported		$	1,161				$	1,040
Add: Unrealized losses on commodity hedges (3)			–					14
Add: Restructuring charges and related costs (1)			12					21
Adjusted Earnings before interest and taxes		$	1,173				$	1,075				9	%
Interest, net, as reported		$	80				$	83
Adjusted Earnings before taxes		$	1,093				$	992
Taxes on earnings, as reported		$	350				$	294
Add: Tax benefit from unrealized losses on commodity hedges (3)			–					5
Add: Tax benefit from restructuring charges and related costs (1)			4					7
Deduct: Tax expense from health care legislation (2)			(10	)				–
Adjusted Taxes on earnings		$	344				$	306
Adjusted effective income tax rate			31.5	%				30.8	%
Earnings from continuing operations, as reported		$	731				$	663
Add: Net adjustment from unrealized losses on commodity hedges (3)			–					9
Add: Net adjustment from restructuring charges and related costs (1)			8					14
Add: Tax expense from health care legislation (2)			10					–
Adjusted Earnings from continuing operations		$	749				$	686				9	%
Earnings from discontinued operations, as reported		$	–				$	4
Deduct: Tax benefit from the sale of the Godiva Chocolatier business (4)			–					(4	)
Adjusted Earnings from discontinued operations		$	–				$	–
Net earnings, as reported		$	731				$	667				10	%
Adjusted Net earnings		$	749				$	686				9	%
Diluted earnings per share – continuing operations, as reported (a)		$	2.09				$	1.82
Add: Net adjustment from unrealized losses on commodity hedges (3)			–					0.03
Add: Net adjustment from restructuring charges and related costs (1)			0.02					0.04
Add: Tax expense from health care legislation (2)			0.03					–
Adjusted Diluted earnings per share – continuing operations (a)		$	2.14				$	1.89				13	%
Diluted earnings per share – discontinued operations, as reported (a)		$	–				$	0.01
Deduct: Tax benefit from the sale of the Godiva Chocolatier business (4)			–					(0.01	)
Adjusted Diluted earnings per share – discontinued operations (a)		$	–				$	–
Adjusted Diluted net earnings per share (a)		$	2.14				$	1.89				13	%

		(a)		In the first quarter of fiscal 2010, the company adopted and retrospectively applied new accounting guidance related to the calculation of earnings per share. The retrospective application of the provision resulted in a reduction of the previously reported diluted earnings per share from continuing operations of $0.02 and of the previously reported adjusted diluted earnings per share from continuing operations and net earnings of $.01 for the nine months ended May 3, 2009. There was no change to the previously reported or adjusted diluted earnings per share from discontinued operations for the nine months ended May 3, 2009.

(millions, except per share amounts)
		Year Ended Aug. 2, 2009
Gross margin, as reported		$	3,028
Add: Restructuring related costs (1)			22
Adjusted Gross margin		$	3,050
Adjusted Gross margin percentage			40.2	%
Earnings before interest and taxes, as reported		$	1,185
Add: Non-cash impairment charge on intangible assets (5)			67
Add: Restructuring related costs (1)			22
Adjusted Earnings before interest and taxes		$	1,274
Interest, net, as reported		$	106
Adjusted Earnings before taxes		$	1,168
Taxes on earnings, as reported		$	347
Add: Tax benefit from non-cash impairment charge on intangible assets (5)			20
Add: Tax benefit from restructuring related costs (1)			7
Adjusted Taxes on earnings		$	374
Adjusted effective income tax rate			32.0	%
Earnings from continuing operations, as reported		$	732
Add: Net non-cash impairment charge on intangible assets (5)			47
Add: Net adjustment from restructuring related costs (1)			15
Adjusted Earnings from continuing operations		$	794
Earnings from discontinued operations, as reported		$	4
Deduct: Tax benefit from the sale of the Godiva Chocolatier business (4)			(4	)
Adjusted Earnings from discontinued operations		$	–
Net earnings, as reported		$	736
Adjusted Net earnings		$	794
Diluted earnings per share – continuing operations, as reported (a)		$	2.03
Add: Net non-cash impairment charge on intangible assets (5)			0.13
Add: Net adjustment from restructuring related costs (1)			0.04
Adjusted Diluted earnings per share – continuing operations (a) *		$	2.21
Diluted earnings per share – discontinued operations, as reported (a)		$	0.01
Deduct: Tax benefit from the sale of the Godiva Chocolatier business (4)			(0.01	)
Adjusted Diluted earnings per share – discontinued operations (a)		$	–
Adjusted Diluted net earnings per share (a)		$	2.21

		(a)		In the first quarter of fiscal 2010, the company adopted and retrospectively applied new accounting guidance related to the calculation of earnings per share. The retrospective application of the provision resulted in a reduction of previously reported and adjusted diluted earnings per share from continuing operations and net earnings of $0.01 for fiscal 2009. There was no change to the previously reported or adjusted diluted earnings per share from discontinued operations for fiscal 2009.
		*		The sum of the individual per share amounts does not add due to rounding.

SOURCE: Campbell Soup Company

Campbell Soup Company
Anthony Sanzio (Media)
856-968-4390
or
Jennifer Driscoll (Analysts)
856-342-6081