What changed in this filing

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Item 1. Financial Statements

2021-12-08 compared with 2021-06-09 · 210 added, 406 removed, 500 unchanged (55% of the section changed)

3 unchanged sentences

(millions, except per share amounts)

Three Months Ended Nine Months Ended

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020

Three Months Ended

October 31, 2021 November 1, 2020

Net sales $ 2,236 $ 2,340

26 unchanged sentences

Net earnings attributable to Campbell Soup Company $ .86 $ 1.02

$ .52 $ .55 $ 2.34 $ 5.07

Weighted average shares outstanding — assuming dilution 303 304

(1) Sum of the individual amounts may not add due to rounding .

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

Three Months Ended

May 2, 2021 April 26, 2020

October 31, 2021 November 1, 2020

Pre-tax amount Tax (expense) benefit After-tax amount Pre-tax amount Tax (expense) benefit After-tax amount

5 unchanged sentences

Unrealized gains (losses) arising during the period 3 ( 1 ) 2 ( 1 ) 1 —

Reclassification adjustment for (gains) losses included in net earnings 2 — 2 1 — 1

Pension and other postretirement benefits:

Reclassification of prior service credit included in net earnings ( 2 ) 1 ( 1 ) ( 7 ) 2 ( 5 )

Other comprehensive income (loss) $ 5 $ 1 6 $ ( 11 ) $ — ( 11 )

Total comprehensive income (loss) $ 166 $ 157

Total comprehensive income (loss) attributable to noncontrolling interests ( 1 ) 1

Total comprehensive income (loss) attributable to Campbell Soup Company $ 167 $ 156

Nine Months Ended

May 2, 2021 April 26, 2020

Pre-tax amount Tax (expense) benefit After-tax amount Pre-tax amount Tax (expense) benefit After-tax amount

Net earnings (loss) $ 714 $ 1,542

Other comprehensive income (loss):

Foreign currency translation:

Foreign currency translation adjustments $ 14 $ — 14 $ ( 10 ) $ — ( 10 )

Reclassification of currency translation adjustments realized upon disposal of businesses — — — 206 4 210

Cash-flow hedges:

Unrealized gains (losses) arising during period ( 9 ) 1 ( 8 ) 9 ( 2 ) 7

Reclassification adjustment for (gains) losses included in net earnings 5 — 5 2 ( 1 ) 1

Reclassification adjustment for losses (gains) included in net earnings — — — — — —

Pension and other postretirement benefits:

8 unchanged sentences

(millions, except per share amounts)

May 2, 2021 August 2, 2020

October 31, 2021 August 1, 2021

Current assets

3 unchanged sentences

Other current assets 102 98

Assets of business held for sale 122 —

Total current assets 1,876 1,695

10 unchanged sentences

Accrued income taxes 55 5

Liabilities of business held for sale 25 —

Total current liabilities 2,338 1,814

21 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

May 2, 2021 April 26, 2020

Three Months Ended

October 31, 2021 November 1, 2020

Cash flows from operating activities:

1 unchanged sentence

Adjustments to reconcile net earnings to operating cash flow

Restructuring charges 21 10

Stock-based compensation 14 16

2 unchanged sentences

Deferred income taxes 20 25

Net gain on sales of businesses — ( 975 )

Loss on extinguishment of debt — 75

Investment losses — 49

Changes in working capital, net of divestitures

Changes in working capital

Accounts receivable ( 137 ) ( 189 )

8 unchanged sentences

Sales of route businesses 1 3

Sales of businesses, net of cash divested — 2,537

Net cash provided by (used in) investing activities ( 177 ) 2,318

Net cash used in investing activities ( 68 ) ( 72 )

Cash flows from financing activities:

Short-term borrowings, including commercial paper and revolving line of credit — 5,610

Short-term borrowings, including commercial paper 371 —

Short-term repayments, including commercial paper ( 395 ) ( 123 )

Long-term borrowings — 1,000

Long-term repayments ( 721 ) ( 499 )

Dividends paid ( 116 ) ( 108 )

Treasury stock purchases ( 63 ) —

Treasury stock issuances 1 —

Payments related to tax withholding for stock-based compensation ( 17 ) ( 13 )

Payments related to extinguishment of debt — ( 1,768 )

Payments of debt issuance costs — ( 9 )

Other ( 1 ) ( 1 )

Net cash used in financing activities ( 220 ) ( 245 )

1 unchanged sentence

Net change in cash and cash equivalents — ( 137 )

Cash and cash equivalents — beginning of period (including discontinued operations) 859 179

Cash and cash equivalents discontinued operations — end of period — —

Cash and cash equivalents — beginning of period 69 859

Cash and cash equivalents — end of period $ 69 $ 722

10 unchanged sentences

Shares Amount Shares Amount

Balance at January 26, 2020 323 $ 12 ( 21 ) $ ( 1,048 ) $ 374 $ 3,151 $ 5 $ 5 $ 2,499

Net earnings (loss) 168 — 168

Other comprehensive income (loss) ( 12 ) 1 ( 11 )

Dividends ($ .35 per share)

( 107 ) ( 107 )

Treasury stock issued under management incentive and stock option plans — 20 12 — 32

Balance at April 26, 2020 323 $ 12 ( 21 ) $ ( 1,028 ) $ 386 $ 3,212 $ ( 7 ) $ 6 $ 2,581

Balance at July 28, 2019 323 $ 12 ( 22 ) $ ( 1,076 ) $ 372 $ 1,993 $ ( 198 ) $ 9 $ 1,112

Net earnings (loss) 1,542 — 1,542

Divestiture ( 4 ) ( 4 )

Other comprehensive income (loss) 191 1 192

Dividends ($ 1.05 per share)

( 321 ) ( 321 )

Treasury stock issued under management incentive and stock option plans 1 48 14 ( 2 ) 60

Balance at April 26, 2020 323 $ 12 ( 21 ) $ ( 1,028 ) $ 386 $ 3,212 $ ( 7 ) $ 6 $ 2,581

Balance at January 31, 2021 323 $ 12 ( 20 ) $ ( 990 ) $ 388 $ 3,517 $ ( 5 ) $ 3 $ 2,925

Balance at August 2, 2020 323 $ 12 ( 21 ) $ ( 1,023 ) $ 394 $ 3,190 $ ( 10 ) $ 6 $ 2,569

Net earnings (loss) 309 — 309

2 unchanged sentences

( 107 ) ( 107 )

Treasury stock purchased — — —

Treasury stock issued under management incentive and stock option plans 1 32 ( 24 ) ( 5 ) 3

Balance at May 2, 2021 323 $ 12 ( 20 ) $ ( 986 ) $ 401 $ 3,564 $ 2 $ 2 $ 2,995

Balance at November 1, 2020 323 $ 12 ( 20 ) $ ( 991 ) $ 370 $ 3,387 $ ( 9 ) $ 4 $ 2,773

Balance at August 1, 2021 323 $ 12 ( 21 ) $ ( 1,021 ) $ 414 $ 3,742 $ 5 $ 2 $ 3,154

3 unchanged sentences

( 113 ) ( 113 )

Treasury stock purchased ( 1 ) ( 63 ) ( 63 )

Treasury stock issued under management incentive and stock option plans 1 46 ( 42 ) ( 8 ) ( 4 )

Balance at May 2, 2021 323 $ 12 ( 20 ) $ ( 986 ) $ 401 $ 3,564 $ 2 $ 2 $ 2,995

Balance at October 31, 2021 323 $ 12 ( 21 ) $ ( 1,038 ) $ 372 $ 3,882 $ 7 $ 2 $ 3,237

See accompanying Notes to Consolidated Financial Statements.

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In this Form 10-Q, unless otherwise stated, the terms "we," "us," "our" and the "company" refer to Campbell Soup Company and its consolidated subsidiaries.

The consolidated financial statements include our accounts and entities in which we maintain a controlling financial interest and a variable interest entity (VIE) for which we were the primary beneficiary.

Intercompany transactions are eliminated in consolidation.

See Note 3 for a discussion of Discontinued Operations.

The financial statements reflect all adjustments which are, in our opinion, necessary for a fair statement of the results of operations, financial position, and cash flows for the indicated periods.

The accounting policies we used in preparing these financial statements are substantially consistent with those we applied in our Annual Report on Form 10-K for the year ended August 1, 2021.

Certain amounts in prior-year financial statements were reclassified to conform to the current-year presentation.

The results for the period are not necessarily indicative of the results to be expected for other interim periods or the full year.

Our fiscal year ends on the Sunday nearest July 31, which is August 1, 2021.

There are 52 weeks in 2021.

There were 53 weeks in 2020.

Our fiscal year ends on the Sunday nearest July 31, which is July 31, 2022.

Recent Accounting Pronouncements

Recently Adopted

In August 2018, the Financial Accounting Standards Board (FASB) issued guidance that eliminates, adds, and modifies certain disclosure requirements for fair value measurements.

The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those years.

We adopted the new guidance at the beginning of the first quarter of 2021.

The adoption did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued guidance on accounting for implementation costs incurred in a cloud computing arrangement that is a service contract.

The guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The guidance is effective for fiscal years beginning after December 15, 2019.

Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively.

Early adoption is permitted.

We adopted the new guidance on a prospective basis at the beginning of the first quarter of 2021.

The adoption did not have a material impact on our consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In August 2018, the FASB issued guidance that changes the disclosure requirements related to defined benefit pension and postretirement plans.

The guidance is effective for fiscal years ending after December 15, 2020.

The guidance is to be applied on a retrospective basis.

The adoption will not have a material impact on our consolidated financial statements.

In December 2019, the FASB issued guidance on simplifying the accounting for income taxes.

In December 2019, the Financial Accounting Standards Board (FASB) issued guidance on simplifying the accounting for income taxes.

The guidance removes certain exceptions to the general principles of accounting for income taxes and also improves consistent application of accounting by clarifying or amending existing guidance.

The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those years.

Early adoption is permitted.

The adoption is not expected to have a material impact on our consolidated financial statements.

We adopted the guidance in the first quarter of 2022.

The adoption did not have an impact on our consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued guidance that provides optional expedients and exceptions for a limited period of time for accounting for contracts, hedging relationships, and other transactions affected by the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued.

1 unchanged sentence

We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.

Discontinued Operations

We completed the sale of our Kelsen business on September 23, 2019, for $ 322 .

We also completed the sale of our Arnott’s business and certain other international operations, including the simple meals and shelf-stable beverages businesses in Australia and Asia Pacific (the Arnott's and other international operations), on December 23, 2019, for $ 2,286 .

The purchase price was subject to certain post-closing adjustments, which resulted in $ 4 of additional proceeds in the third quarter of 2020.

B eginning in the fourth quarter of 2019, we have reflected the results of operations of the Kelsen business and the Arnott’s and

other international operations (collectively referred to as Campbell International) as discontinued operations in the Consolidated Statements of Earnings for all periods presented.

These businesses were historically included in the Snacks reportable segment.

Results of Campbell International in 2020 were as follows:

Nine Months Ended

April 26, 2020

Net sales $ 359

Earnings before taxes from operations $ 53

Taxes on earnings from operations 17

Gain on sales of businesses / costs associated with selling the businesses 1,039

Tax expense on sales of businesses / costs associated with selling the businesses 39

Earnings from discontinued operations $ 1,036

In the third quarter of 2021, we recognized a $ 6 Loss from discontinued operations due to tax expense from return-to- provision adjustments related to the sales of the businesses.

Under the terms of the sale of the Arnott's and other international operations, we entered into a long-term licensing arrangement for the exclusive rights to certain Campbell brands in certain non-U.S.

We provide certain transition services to support the divested business.

Cash flow activity of Campbell International included the following:

Nine Months Ended

April 26, 2020

Cash flows from discontinued operating activities:

Net gain on sales of discontinued operations businesses $ 1,039

Cash flows from discontinued investing activities:

Capital expenditures $ 30

Sales of discontinued operations businesses, net of cash divested $ 2,466

Other Divestitures

On October 11, 2019, we completed the sale of our European chips business for £ 63 , or $ 77 .

The pre-tax loss recognized in the first quarter of 2020 on the sale was $ 64 , which included the impact of allocated goodwill and foreign currency translation adjustments.

For tax purposes, in the first quarter of 2020, the capital loss on the sale was offset by a valuation allowance.

In the second quarter of 2020, we recognized a $ 19 tax benefit in continuing operations as we were able to use the capital loss on this sale to offset a portion of the capital gain from the sale of the Arnott's and other international operations.

The European chips business had net sales of $ 25 for the nine-month period ended April 26, 2020.

Earnings were not material in the period.

The results of the European chips business through the date of sale were reflected in continuing operations within the Snacks reportable segment.

Pending Divestiture

Subsequent to the end of the quarter, on May 3, 2021, we completed the sale of our Plum baby food and snacks business for $ 101 , subject to certain post-closing adjustments.

The purchase agreement contained customary representations, warranties, indemnifications and other obligations between us and the buyer.

In addition, we have agreed to indemnify the buyer for certain claims against the Plum baby food and snacks business alleging the presence of heavy metals in the products manufactured or sold on or prior to May 2, 2021, that were pending at the time of closing of the transaction or are asserted within two years thereafter.

The after-tax gain on sale was not material.

The business had net sales of $ 22 and $ 68 for the three- and nine-month periods ended May 2, 2021, and $ 27 and $ 79 for the three- and nine-month periods ended April 26, 2020, respectively.

Earnings were not material in the periods.

The results of the business through the date of sale are reflected in continuing operations within the Meals & Beverages reportable segment.

The assets and liabilities of the business have been reflected as

current Assets of business held for sale and current Liabilities of business held for sale as of May 2, 2021.

The assets and liabilities were as follows:

Accounts receivable, net $ 1

Inventories 15

Plant assets, net of depreciation 24

Other intangible assets, net of amortization 70

Total assets $ 122

Payable to suppliers and others $ 10

Accrued liabilities 1

Deferred taxes 14

Total liabilities $ 25

Accumulated Other Comprehensive Income (Loss)

4 unchanged sentences

Total Accumulated Comprehensive Income (Loss)

Balance at July 28, 2019 $ ( 218 ) $ ( 9 ) $ 29 $ ( 198 )

Balance at August 2, 2020 $ ( 10 ) $ ( 7 ) $ 7 $ ( 10 )

Other comprehensive income (loss) before reclassifications 2 — — 2

Amounts reclassified from accumulated other comprehensive income (loss) — — ( 1 ) ( 1 )

210 1 ( 16 ) 195

Net current-period other comprehensive income (loss) 2 — ( 1 ) 1

Balance at April 26, 2020 $ ( 19 ) $ ( 1 ) $ 13 $ ( 7 )

Balance at November 1, 2020 $ ( 8 ) $ ( 7 ) $ 6 $ ( 9 )

Balance at August 1, 2021 $ 6 $ ( 4 ) $ 3 $ 5

2 unchanged sentences

Net current-period other comprehensive income (loss) — 2 — 2

Balance at May 2, 2021 $ 8 $ ( 10 ) $ 4 $ 2

Balance at October 31, 2021 $ 6 $ ( 2 ) $ 3 $ 7

_____________________________________

(1) Included no tax as of May 2, 2021, August 2, 2020, and April 26, 2020 and tax expense of $ 4 as of July 28, 2019.

(2) Included a tax benefit of $ 2 as of May 2, 2021, $ 1 as of August 2, 2020, tax expense of $ 1 as of April 26, 2020, and a tax benefit of $ 2 as of July 28, 2019.

(3) Included tax expense of $ 1 as of May 2, 2021, $ 2 as of August 2, 2020, $ 3 as of April 26, 2020, and $ 8 as of July 28, 2019.

(4) Reflects amounts reclassified from sales of businesses.

See Note 3 for additional information.

(1) Included no tax as of October 31, 2021, August 1, 2021, November 1, 2020 and August 2, 2020.

(2) Included no tax as of October 31, 2021, a tax benefit of $ 1 as of August 1, 2021, $ 2 as of November 1, 2020, and $ 1 as of August 2, 2020.

(3) Included tax expense of $ 1 as of October 31, 2021, and as of August 1, 2021, and $ 2 as of November 1, 2020, and as of August 2, 2020.

Amounts related to noncontrolling interests were not material.

The amounts reclassified from Accumulated other comprehensive income (loss) consisted of the following:

Three Months Ended Nine Months Ended

Details about Accumulated Other Comprehensive Income (Loss) Components May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020 Location of (Gain) Loss Recognized in Earnings

Foreign currency translation adjustments:

Currency translation (gains) losses realized upon disposal of businesses $ — $ — $ — $ 23 Other expenses / (income)

Currency translation (gains) losses realized upon disposal of businesses — — — 183 Earnings (loss) from discontinued operations

Total before tax — — — 206

Tax expense (benefit) — — — 4

(Gain) loss, net of tax $ — $ — $ — $ 210

(Gains) losses on cash flow hedges:

Three Months Ended

Details about Accumulated Other Comprehensive Income (Loss) Components October 31, 2021 November 1, 2020 Location of Loss (Gain) Recognized in Earnings

Losses (gains) on cash-flow hedges:

Commodity contracts $ ( 1 ) $ — Cost of products sold

Foreign exchange forward contracts 1 — Cost of products sold

Foreign exchange forward contracts — — — 1 Earnings (loss) from discontinued operations

Forward starting interest rate swaps — — 1 1 Interest expense

Total before tax — —

Tax expense (benefit) — —

(Gain) loss, net of tax $ 2 $ 1 $ 5 $ 1

Loss (gain), net of tax $ — $ —

Pension and postretirement benefit adjustments:

1 unchanged sentence

Tax expense (benefit) — —

(Gain) loss, net of tax $ ( 1 ) $ ( 5 ) $ ( 3 ) $ ( 16 )

Loss (gain), net of tax $ — $ ( 1 )

Goodwill and Intangible Assets

2 unchanged sentences

Net balance at August 1, 2021 $ 970 $ 3,011 $ 3,981

Amounts reclassified to Assets of business held for sale (1)

( 12 ) — ( 12 )

Amounts reclassified due to segment change (1)

Foreign currency translation adjustment 1 — 1

Net balance at May 2, 2021 $ 972 $ 3,011 $ 3,983

Net balance at October 31, 2021 $ 996 $ 2,986 $ 3,982

_____________________________________

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The following table summarizes balance sheet information for intangible assets, excluding goodwill, subject to amortization and intangible assets not subject to amortization:

May 2, 2021 August 2, 2020

October 31, 2021 August 1, 2021

Intangible Assets Cost Accumulated Amortization Net Cost Accumulated Amortization Net

3 unchanged sentences

Trademarks 2,549 2,549

Subtotal $ 3,319 $ 3,350

Amounts reclassified to Assets of business held for sale (1)

Total net intangible assets $ 3,228 $ 3,239

As of October 31, 2021, the carrying value of indefinite-lived trademarks is detailed below:

Various Other (1)

Snyder's of Hanover Lance Pace Pacific Foods

Carrying value $ 1,007 $ 620 $ 350 $ 292 $ 280

_____________________________________

(1) Customer relationships and Trademarks of $ 8 and $ 62 , respectively, were reclassified to Assets of business held for sale.

See Note 3 for additional information.

Non-amortizable intangible assets consist of trademarks.

As of May 2, 2021, trademarks primarily included $ 1,978 associated with Snyder's-Lance.

Of the carrying values of all indefinite-lived trademarks, $ 620 related to the Snyder's of Hanover trademark, $ 292 related to the Pace trademark, and $ 280 related to the Pacific Foods trademark.

Amortization of intangible assets in Earnings from continuing operations was $ 31 and $ 33 for the nine-month periods ended May 2, 2021, and April 26, 2020, respectively.

As of May 2, 2021, amortizable intangible assets had a weighted-average remaining useful life of 18 years.

(1) Associated with the acquisition of Snyder's-Lance, Inc.

(Snyder's-Lance).

Amortization of intangible assets was $ 11 and $ 10 for the three-month periods ended October 31, 2021, and November 1, 2020, respectively.

As of October 31, 2021, amortizable intangible assets had a weighted-average remaining useful life of 17 years.

Amortization expense for the next 5 years is estimated to be approximately $ 41 per year.

1 unchanged sentence

Our reportable segments are as follows:

• Meals & Beverages, which includes the retail and foodservice businesses in the U.S.

• Meals & Beverages, which consists of our soup, simple meals and beverages products in retail and foodservice in the U.S.

The segment includes the following products:

6 unchanged sentences

Swanson canned poultry;

Plum baby food and snacks;

V8 juices and beverages;

and Campbell’s tomato juice.

• Snacks, which consists of Pepperidge Farm cookies, crackers, fresh bakery and frozen products in U.S.

retail, including Pepperidge Farm Farmhouse * cookies and bakery products, Milano* cookies and Goldfish* crackers;

and Snyder’s of Hanover* pretzels, Lance* sandwich crackers, Cape Cod* and Kettle Brand* potato chips, Late July* snacks, Snack Factory Pretzel Crisps,* Pop Secret popcorn, Emerald nuts, and other snacking products in the U.S.

The segment includes the retail business in Latin America.

The segment also included the results of our European chips business, which was sold on October 11, 2019.

We refer to the * trademarks as our "power brands."

The segment also includes snacking products in foodservice and Canada.

The segment included our Plum baby food and snacks business, which was sold on May 3, 2021;

• Snacks, which consists of Pepperidge Farm cookies*, crackers, fresh bakery and frozen products, including Goldfish crackers*, Snyder’s of Hanover pretzels*, Lance sandwich crackers*, Cape Cod potato chips *, Kettle Brand potato chips * , Late July snacks * , Snack Factory pretzel crisps *, Pop Secret popcorn, Emerald nuts, and other snacking products in retail in the U.S.

The segment also includes the retail business in Latin America.

In 2022, we now refer to the * brands as our "power brands."

Beginning in 2022, the foodservice and Canadian business formerly in our Snacks segment is now managed as part of the Meals & Beverages segment.

Segment results have been adjusted retrospectively to reflect this change.

We evaluate segment performance before interest, taxes and costs associated with restructuring activities and impairment charges.

Unrealized gains and losses on undesignated commodity hedging activities are excluded from segment operating earnings and are recorded in Corporate as these open positions represent hedges of future purchases.

Unrealized gains and losses on outstanding undesignated commodity hedging activities are excluded from segment operating earnings and are recorded in Corporate as these open positions represent hedges of future purchases.

Upon closing of the contracts, the realized gain or loss is transferred to segment operating earnings, which allows the segments to reflect the economic effects of the hedge without exposure to quarterly volatility of unrealized gains and losses.

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Asset information by segment is not discretely maintained for internal reporting or used in evaluating performance.

Three Months Ended Nine Months Ended

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020

Three Months Ended

October 31, 2021 November 1, 2020

Meals & Beverages $ 1,266 $ 1,363

1 unchanged sentence

Total $ 2,236 $ 2,340

Three Months Ended Nine Months Ended

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020

Three Months Ended

October 31, 2021 November 1, 2020

Earnings before interest and taxes

1 unchanged sentence

Snacks 128 135

Corporate (1)

Corporate income (expense) (1)

( 32 ) ( 10 )

Restructuring charges (2)

( 2 ) — ( 21 ) ( 10 )

Total $ 376 $ 461

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(1) Represents unallocated items.

Pension benefit settlement adjustments are included in Corporate.

There were settlement gains of $ 4 and $ 38 in the three- and nine-month periods ended May 2, 2021, and charges of $ 54 and $ 43 in the three- and nine-month periods ended April 26, 2020, respectively.

A loss of $ 45 on Acre Venture Partners, L.P.

(Acre) was included in the three- and nine-month periods ended April 26, 2020.

A loss of $ 64 on the sale of our European chips business was included in the nine-month period ended April 26, 2020.

Costs related to the cost savings initiatives were $ 13 and $ 14 in the three-month periods and $ 22 and $ 40 in the nine-month periods ended May 2, 2021, and April 26, 2020, respectively.

In the three-month periods ended October 31, 2021, and November 1, 2020, there were pension actuarial losses of $ 6 and pension actuarial gains of $ 4 , respectively.

Costs related to the cost savings initiatives were $ 4 and $ 5 in the three-month periods ended October 31, 2021, and November 1, 2020, respectively.

Unrealized mark-to-market adjustments on outstanding undesignated commodity hedges were losses of $ 3 and gains of $ 6 in the three-month periods ended October 31, 2021, and November 1, 2020, respectively.

(2) See Note 6 for additional information.

Our net sales based on product categories are as follows:

Three Months Ended Nine Months Ended

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020

Three Months Ended

October 31, 2021 November 1, 2020

Soup $ 797 $ 826

3 unchanged sentences

Total $ 2,236 $ 2,340

Soup includes various soup, broths and stock products.

Soup includes various soup, broth and stock products.

Snacks include cookies, pretzels, crackers, popcorn, nuts, potato chips, tortilla chips and other salty snacks and baked products.

Other simple meals include sauces and Plum products.

Other simple meals include sauces, gravies, pasta, beans, canned poultry, and Plum products through May 3, 2021, when the business was sold.

Beverages include V8 juices and beverages, Campbell’s tomato juice and Pacific Foods non-dairy beverages.

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Beginning in fiscal 2015, we implemented initiatives to reduce costs and to streamline our organizational structure.

In recent years, we expanded these initiatives by further optimizing our supply chain and manufacturing networks, including closing our manufacturing facility in Toronto, Ontario, as well as our information technology infrastructure.

On March 26, 2018, we completed the acquisition of Snyder's-Lance, Inc.

(Snyder's-Lance).

Over the years, we expanded these initiatives by further optimizing our supply chain and manufacturing networks, including closing our manufacturing facility in Toronto, Ontario, as well as our information technology infrastructure.

On March 26, 2018, we completed the acquisition of Snyder's-Lance.

Prior to the acquisition, Snyder's-Lance launched a cost transformation program following a comprehensive review of its operations with the goal of significantly improving its financial performance.

We continue to implement this program.

In addition, we have identified opportunities for additional cost synergies as we integrate Snyder's-Lance.

Cost estimates, as well as timing for certain activities, are continuing to be developed.

We continued to implement this program and identified opportunities for additional cost synergies as we integrated Snyder's-Lance.

A summary of the pre-tax charges recorded in Earnings from continuing operations related to these initiatives is as follows:

Three Months Ended Nine Months Ended

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020 Recognized as of May 2, 2021

Three Months Ended

October 31, 2021 November 1, 2020 Recognized as of October 31, 2021

Restructuring charges $ — $ 1 $ 259

4 unchanged sentences

Total pre-tax charges $ 4 $ 6 $ 698

A summary of the pre-tax costs in Earnings from discontinued operations associated with these initiatives is as follows:

Recognized as of May 2, 2021

Severance pay and benefits

Implementation costs and other related costs

As of April 28, 2019, we incurred substantially all of the costs for actions associated with discontinued operations.

All of the costs were cash expenditures.

A summary of the pre-tax costs in Earnings from continuing operations associated with the initiatives is as follows:

Recognized as of May 2, 2021

Recognized as of October 31, 2021

Severance pay and benefits

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Implementation costs and other related costs

The total estimated pre-tax costs for actions associated with continuing operations that have been identified are approximately $ 700 to $ 730 and we expect to incur the costs through 2022.

This estimate will be updated as costs for the expanded initiatives are developed.

We expect the costs for actions associated with continuing operations that have been identified to date to consist of the following:

approximately $ 220 to $ 225 in severance pay and benefits;

The total estimated pre-tax costs for actions associated with continuing operations are approximately $ 715 to $ 730 .

The majority of the remaining costs will be incurred in 2022.

We expect the costs for actions associated with continuing operations to consist of the following:

approximately $ 225 in severance pay and benefits;

approximately $ 85 in asset impairment and accelerated depreciation;

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and Corporate - approximately 24 %.

Of the aggregate $ 700 to $ 730 of pre-tax costs associated with continuing operations identified to date, we expect approximately $ 600 to $ 630 will be cash expenditures.

In addition, we expect to invest approximately $ 430 in capital expenditures through 2022, of which we invested $ 382 as of May 2, 2021.

The capital expenditures primarily relate to a U.S.

warehouse optimization project, improvement of quality, safety and cost structure across the Snyder’s-Lance manufacturing network, implementation of our existing SAP enterprise-resource planning system for Snyder's-Lance, transition of production of the Toronto manufacturing facility to our U.S.

Of the aggregate $ 715 to $ 730 of pre-tax costs associated with continuing operations, we expect approximately $ 615 to $ 630 will be cash expenditures.

In addition, we expect to invest approximately $ 450 in capital expenditures through 2022, of which we invested $ 415 as of October 31, 2021.

The capital expenditures primarily relate to improvement of quality, safety and cost structure across the Snyder’s-Lance manufacturing network, a U.S.

warehouse optimization project, implementation of our existing SAP enterprise-resource planning system for Snyder's-Lance, transition of production of the Toronto manufacturing facility to our U.S.

thermal plants, optimization of information technology infrastructure and applications, and optimization of the Snyder’s-Lance warehouse and distribution network.

A summary of the restructuring activity and related reserves associated with continuing operations at May 2, 2021, is as follows:

A summary of the restructuring activity and related reserves associated with continuing operations at October 31, 2021, is as follows:

Severance Pay and Benefits Implementation Costs and Other Related

Asset Impairment/Accelerated Depreciation Other Non-Cash Exit Costs (4)

Total Charges

2 unchanged sentences

2022 cash payments ( 1 )

Accrued balance at May 2, 2021 (2)

Accrued balance at October 31, 2021 (1)

__________________________________

(1) Includes $ 1 of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.

(2) Includes $ 2 of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.

(2) Includes other costs recognized as incurred that are not reflected in the restructuring reserve in the Consolidated Balance Sheet.

The costs are included in Administrative expenses and Cost of products sold in the Consolidated Statements of Earnings.

(4) Includes non-cash costs that are not reflected in the restructuring reserve in the Consolidated Balance Sheet.

Segment operating results do not include restructuring charges, implementation costs and other related costs because we evaluate segment performance excluding such charges.

A summary of the pre-tax costs in Earnings from continuing operations associated with segments is as follows:

Three Months Ended Nine Months

October 31, 2021

Ended Costs Incurred to Date

Meals & Beverages $ 1 $ 224

Snacks 13 39 290

Corporate — 172

Total $ 4 $ 698

In addition, in the second quarter of 2021, we recorded a $ 19 deferred tax charge in connection with a legal entity reorganization as part of the continued integration of Snyder's-Lance.

Through April 28, 2019, we incurred pre-tax charges of $ 23 in Earnings from discontinued operations consisting of $ 19 of severance pay and benefits and $ 4 of implementation costs and other related costs.

All of the costs were cash expenditures.

Expanded Initiatives in 2022

We continue to pursue cost savings initiatives by further optimizing our supply chain and manufacturing network and through effective cost management.

Cost estimates will be updated as the expanded initiatives are developed.

Earnings per Share (EPS)

For the periods presented in the Consolidated Statements of Earnings, the calculations of basic EPS and EPS assuming dilution vary in that the weighted average shares outstanding assuming dilution include the incremental effect of stock options and other share-based payment awards, except when such effect would be antidilutive.

The earnings per share calculation for the three- and nine-month periods ended May 2, 2021, and April 26, 2020, excludes approximately 1 million stock options that would have been antidilutive.

The earnings per share calculation for the three-month periods ended October 31, 2021, and November 1, 2020, excludes approximately 1 million stock options that would have been antidilutive.

Pension and Postretirement Benefits

Components of net benefit expense (income) were as follows:

Three Months Ended Nine Months Ended

Pension Postretirement Pension Postretirement

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020

Three Months Ended

Pension Postretirement

October 31, 2021 November 1, 2020 October 31, 2021 November 1, 2020

Service cost $ 4 $ 5 $ — $ —

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Amortization of prior service cost — — — ( 1 )

Settlement charges (gains) ( 4 ) 54 — — ( 38 ) 43 — —

Actuarial loss (gain) 6 ( 4 ) — —

Net periodic benefit expense (income) $ ( 10 ) $ ( 20 ) $ 1 $ —

The components of net periodic benefit expense (income) other than the service cost component associated with continuing operations are included in Other expenses / (income) in the Consolidated Statements of Earnings.

The settlement charges (gains) resulted from the level of lump sum distributions associated with U.S.

and Canadian pension plans.

Net periodic pension benefit expense (income) associated with discontinued operations was not material for the nine-month period ended April 26, 2020.

The actuarial loss of $ 6 for the three-month period ended October 31, 2021 and the actuarial gain of $ 4 for the three-month period ended November 1, 2020 related to the remeasurement of a U.S.

and a Canadian pension plan.

These remeasurements were each due to lump sum distributions that exceeded or are expected to exceed service and interest costs resulting in settlement accounting for the plans.

The actuarial loss recognized for the three-month period ended October 31, 2021 was primarily due to less than anticipated investment returns on plan assets, partially offset by an increase in the discount rates.

The actuarial gain recognized for the three-month period ended November 1, 2020 was primarily due to an increase in the discount rates.

The components of lease costs were as follows:

Three Months Ended Nine Months Ended

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020

Three Months Ended

October 31, 2021 November 1, 2020

Operating lease cost $ 19 $ 20

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Variable lease cost (1)

45 43 137 129

Sublease income

( 1 ) ( 1 ) ( 2 ) ( 3 )

$ 76 $ 74 $ 230 $ 219

Total $ 88 $ 76

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(1) Includes labor and other overhead in our service contracts with embedded leases.

(2) Total lease cost of $ 4 for the nine-month period ended April 26, 2020, related to discontinued operations.

The following tables summarize the lease amounts recorded in the Consolidated Balance Sheets:

Operating Leases

Balance Sheet Location May 2, 2021 August 2, 2020

Balance Sheet Classification October 31, 2021 August 1, 2021

ROU assets, net Other assets $ 231 $ 235

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Finance Leases

Balance Sheet Location May 2, 2021 August 2, 2020

Balance Sheet Classification October 31, 2021 August 1, 2021

ROU assets, net Plant assets, net of depreciation $ 38 $ 29

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The following table summarizes cash flow and other information related to leases:

Nine Months Ended

May 2, 2021 April 26, 2020

Three Months Ended

October 31, 2021 November 1, 2020

Cash paid for amounts included in the measurement of lease liabilities:

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Finance leases

ROU assets divested with businesses sold:

Operating leases $ — $ 18

Finance leases

Financial Instruments

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To mitigate counterparty credit risk, we enter into contracts only with carefully selected, leading, credit-worthy financial institutions, and distribute contracts among several financial institutions to reduce the concentration of credit risk.

We did not have credit-risk-related contingent features in our derivative instruments as of May 2, 2021, or August 2, 2020.

We did not have credit-risk-related contingent features in our derivative instruments as of October 31, 2021, or August 1, 2021.

We are also exposed to credit risk from our customers.

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We are exposed to foreign currency exchange risk related to third-party transactions and intercompany transactions, including intercompany debt.

Principal currencies hedged include the Canadian dollar and, prior to the sale of Arnott's and other international operations, the Australian dollar.

Principal currencies hedged include the Canadian dollar.

We utilize foreign exchange forward purchase and sale contracts to hedge these exposures.

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To hedge currency exposures related to intercompany debt, we enter into foreign exchange forward purchase and sale contracts for periods consistent with the underlying debt.

The notional amount of foreign exchange forward contracts accounted for as cash-flow hedges was $ 128 as of May 2, 2021, and $ 164 as of August 2, 2020.

The notional amount of foreign exchange forward contracts accounted for as cash-flow hedges was $ 144 as of October 31, 2021, and $ 134 as of August 1, 2021.

Changes in the fair value on the portion of the derivative included in the assessment of hedge effectiveness of cash-flow hedges are recorded in other comprehensive income (loss), until earnings are affected by the variability of cash flows.

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Any difference between the change in the fair value of the hedge components excluded from the assessment of effectiveness and the amounts recognized in earnings is recorded as a component of other comprehensive income (loss).

The notional amount of foreign exchange forward contracts that are not designated as accounting hedges was $ 14 as of May 2, 2021, and $ 19 as of August 2, 2020.

The notional amount of foreign exchange forward contracts that are not designated as accounting hedges was $ 18 as of October 31, 2021, and $ 13 as of August 1, 2021.

Interest Rate Risk

We manage our exposure to changes in interest rates by optimizing the use of variable-rate and fixed-rate debt and by utilizing interest rate swaps in order to maintain our variable-to-total debt ratio within targeted guidelines.

Receive fixed rate/pay variable rate interest rate swaps are accounted for as fair-value hedges.

Changes in the fair value on the portion of the derivative included in the assessment of hedge effectiveness of a fair-value hedge, along with the gain or loss on the underlying hedged asset or liability, are recorded in current-period earnings.

We manage our exposure to interest rate volatility on future debt issuances by entering into forward starting interest rate swaps or treasury rate lock contracts to lock in the rate on the interest payments related to the anticipated debt issuances.

The contracts are either designated as cash-flow hedging instruments or are undesignated.

Changes in the fair value on the portion of the derivative included in the assessment of hedge effectiveness of cash-flow hedges are recorded in other comprehensive income (loss), and reclassified into interest expense over the life of the debt.

The change in fair value on undesignated instruments is recorded in interest expense.

There were no forward starting interest rate swaps or treasury rate lock contracts outstanding as of May 2, 2021, or August 2, 2020.

There were no interest rate swaps or treasury rate lock contracts outstanding as of October 31, 2021, or August 1, 2021.

Commodity Price Risk

We principally use a combination of purchase orders and various short- and long-term supply arrangements in connection with the purchase of raw materials, including certain commodities and agricultural products.

We also enter into commodity futures, options and swap contracts to reduce the volatility of price fluctuations of wheat, soybean oil, diesel fuel, natural gas, cocoa, aluminum, corn, soybean meal, and butter.

We also enter into commodity futures, options and swap contracts to reduce the volatility of price fluctuations of wheat, soybean oil, diesel fuel, natural gas, aluminum, cocoa, soybean meal, corn and butter.

Commodity futures, options, and swap contracts are either designated as cash-flow hedging instruments or are undesignated.

We hedge a portion of commodity requirements for periods typically up to 18 months.

The notional amount of commodity contracts designated as cash flow hedges was $ 18 as of May 2, 2021.

There were no commodity contracts designated as cash flow hedges as of August 2, 2020.

The notional amount of commodity contracts designated as cash-flow hedges was $ 19 as of October 31, 2021, and $ 18 as of August 1, 2021.

The notional amount of commodity contracts not designated as accounting hedges was $ 203 as of May 2, 2021, and $ 137 as of August 2, 2020.

The notional amount of commodity contracts not designated as accounting hedges was $ 174 as of October 31, 2021, and $ 190 as of August 1, 2021.

The change in fair value on undesignated instruments is recorded in Cost of products sold.

We have a supply contract under which prices for certain raw materials are established based on anticipated volume requirements over a twelve-month period.

Certain prices under the contract are based in part on certain component parts of the raw materials that are in excess of our needs or not required for our operations, thereby creating an embedded derivative

requiring bifurcation.

We net settle amounts due under the contract with our counterparty.

The notional value was approximately $ 61 as of May 2, 2021, and $ 34 as of August 2, 2020.

Unrealized gains (losses) and settlements are included in Cost of products sold in our Consolidated Statements of Earnings.

The notional amount was approximately $ 14 as of October 31, 2021, and $ 38 as of August 1, 2021.

The change in fair value on the embedded derivative is recorded in Cost of products sold.

Equity Price Risk

We enter into swap contracts which hedge a portion of exposures relating to certain deferred compensation obligations linked to the total return of our capital stock, the total return of the Vanguard Institutional Index Institutional Plus Shares, and the total return of the Vanguard Total International Stock Index.

Under these contracts, we pay variable interest rates and receive from the counterparty either:

the total return on our capital stock;

the total return of the Standard & Poor's 500 Index, which is expected to approximate the total return of the Vanguard Institutional Index Institutional Plus Shares;

or the total return of the iShares MSCI EAFE Index, which is expected to approximate the total return of the Vanguard Total International Stock Index.

These contracts were not designated as hedges for accounting purposes.

We enter into swap contracts which hedge a portion of exposures relating to certain deferred compensation obligations linked to the total return of the Vanguard Institutional Index Institutional Plus Shares and the total return of the Vanguard Total International Stock Index.

Prior to 2022, we had entered into swap contracts which hedged a portion of exposures linked to the total return of our capital stock.

As of October 31, 2021, and August 1, 2021, there were no swap contracts outstanding hedging our exposure linked to the total return of our capital stock.

These contracts are not designated as hedges for accounting purposes.

Unrealized gains (losses) and settlements are included in Administrative expenses in the Consolidated Statements of Earnings.

We enter into these contracts for periods typically not exceeding 12 months.

The notional amounts of the contracts were $ 35 as of May 2, 2021, and $ 22 as of August 2, 2020.

The following table summarizes the fair value of derivative instruments on a gross basis as recorded in the Consolidated Balance Sheets as of May 2, 2021, and August 2, 2020:

Balance Sheet Classification May 2, 2021 August 2, 2020

The notional amounts of the contracts were $ 29 as of October 31, 2021, and August 1, 2021.

The following table summarizes the fair value of derivative instruments on a gross basis as recorded in the Consolidated Balance Sheets as of October 31, 2021, and August 1, 2021:

Balance Sheet Classification October 31, 2021 August 1, 2021

Asset Derivatives

Derivatives designated as hedges:

Commodity derivative contracts Other current assets $ 2 $ —

Commodity contracts Other current assets $ 7 $ 4

Foreign exchange forward contracts Other current assets — 1

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Derivatives not designated as hedges:

Commodity derivative contracts Other current assets $ 35 $ 7

Deferred compensation derivative contracts Other current assets 2 4

Commodity derivative contracts Other assets 3 —

Commodity contracts Other current assets $ 47 $ 49

Deferred compensation contracts Other current assets 2 3

Total derivatives not designated as hedges $ 49 $ 52

Total asset derivatives $ 56 $ 57

Balance Sheet Classification May 2, 2021 August 2, 2020

Balance Sheet Classification October 31, 2021 August 1, 2021

Liability Derivatives

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Commodity derivative contracts Accrued liabilities $ 1 $ —

Foreign exchange forward contracts Accrued liabilities — —

Total derivatives not designated as hedges $ 1 $ —

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We do not offset the fair values of derivative assets and liabilities executed with the same counterparty that are generally subject to enforceable netting agreements.

However, if we were to offset and record the asset and liability balances of

derivatives on a net basis, the amounts presented in the Consolidated Balance Sheets as of May 2, 2021, and August 2, 2020, would be adjusted as detailed in the following table:

May 2, 2021 August 2, 2020

However, if we were to offset and record the asset and liability balances of derivatives on a net basis, the amounts presented in the Consolidated Balance Sheets as of October 31, 2021, and August 1, 2021, would be adjusted as detailed in the following table:

October 31, 2021 August 1, 2021

Derivative Instrument Gross Amounts Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting Agreements Net Amount Gross Amounts Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting Agreements Net Amount

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We are required to maintain cash margin accounts in connection with funding the settlement of open positions for exchange-traded commodity derivative instruments.

A cash margin liability balance of $ 11 at May 2, 2021, and an asset balance of $ 8 at August 2, 2020, were included in Accrued liabilities and Other current assets, respectively, in the Consolidated Balance Sheets.

The following tables show the effect of our derivative instruments designated as cash-flow hedges for the three- and nine-month periods ended May 2, 2021, and April 26, 2020, in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

Cash margin liability balances of $ 13 at October 31, 2021, and $ 14 at August 1, 2021, were included in Accrued liabilities in the Consolidated Balance Sheets.

The following tables show the effect of our derivative instruments designated as cash-flow hedges for the three-month periods ended October 31, 2021, and November 1, 2020, in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

Total Cash-Flow Hedge

Derivatives Designated as Cash-Flow Hedges May 2, 2021 April 26, 2020

Derivatives Designated as Cash-Flow Hedges October 31, 2021 November 1, 2020

Three Months Ended

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Foreign exchange forward contracts — ( 1 )

Amount of (gain) loss reclassified from OCI to earnings:

Location in Earnings

Foreign exchange forward contracts Cost of products sold 2 1

OCI derivative gain (loss) at end of quarter $ ( 12 ) $ —

Nine Months Ended

OCI derivative gain (loss) at beginning of year $ ( 8 ) $ ( 11 )

Effective portion of changes in fair value recognized in OCI:

Commodity contracts 2 —

Foreign exchange forward contracts ( 11 ) 9

Amount of (gain) loss reclassified from OCI to earnings:

Amount of loss (gain) reclassified from OCI to earnings:

Location in Earnings

Commodity contracts Cost of products sold ( 1 ) —

Foreign exchange forward contracts Cost of products sold 1 —

Foreign exchange forward contracts Earnings (loss) from discontinued operations — 1

Forward starting interest rate swaps Interest expense 1 1

OCI derivative gain (loss) at end of quarter $ ( 2 ) $ ( 9 )

Based on current valuations, the amount expected to be reclassified from OCI into earnings within the next 12 months is a loss of $ 6 .

The following tables show the effect of our derivative instruments designated as cash-flow hedges for the three- and nine-month periods ended May 2, 2021, and April 26, 2020, in the Consolidated Statements of Earnings:

Based on current valuations, the amount expected to be reclassified from OCI into earnings within the next 12 months is a gain of $ 4 .

The following table shows the total amounts of line items presented in the Consolidated Statements of Earnings for the three-month periods ended October 31, 2021, and November 1, 2020, in which the effects of derivative instruments designated as cash-flow hedges are recorded.

The total effect of hedge activity on these line items are as follows:

Three Months Ended

May 2, 2021 April 26, 2020

Cost of products sold Interest expense Cost of products sold Earnings from discontinued operations Interest expense

Consolidated Statements of Earnings:

$ 1,356 $ 53 $ 1,466 $ 2 $ 55

(Gain) loss on Cash Flow Hedges:

Amount of (gain) loss reclassified from OCI to earnings $ 2 $ — $ 1 $ — $ —

Amount excluded from effectiveness testing recognized in earnings using an amortization approach $ — $ — $ — $ — $ —

Nine Months Ended

May 2, 2021 April 26, 2020

Cost of products sold Interest

expense Cost of product sold Earnings from discontinued operations Interest

October 31, 2021 November 1, 2020

Cost of products sold Cost of products sold

Consolidated Statements of Earnings:

$ 1,514 $ 1,527

(Gain) loss on Cash Flow Hedges:

Amount of (gain) loss reclassified from OCI to earnings $ 4 $ 1 $ — $ 1 $ 1

Loss (gain) on cash-flow hedges:

Amount of loss (gain) reclassified from OCI to earnings $ — $ —

Amount excluded from effectiveness testing recognized in earnings using an amortization approach $ — $ —

The following table shows the effects of our derivative instruments not designated as hedges for the three- and nine-month periods ended May 2, 2021, and April 26, 2020, in the Consolidated Statements of Earnings:

Amount of (Gain) Loss Recognized in Earnings on Derivatives

Derivatives not Designated as Hedges Location of (Gain) Loss

Recognized in Earnings Three Months Ended Nine Months Ended

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020

The following table shows the effects of our derivative instruments not designated as hedges for the three-month periods ended October 31, 2021, and November 1, 2020, in the Consolidated Statements of Earnings:

Derivatives not Designated as Hedges Location of Loss (Gain) Recognized in Earnings Three Months Ended

October 31, 2021 November 1, 2020

Foreign exchange forward contracts Cost of products sold $ — $ 1

Foreign exchange forward contracts Other expenses / (income) — — — 2

Commodity derivative contracts Cost of products sold ( 24 ) 31 ( 39 ) 27

Commodity contracts Cost of products sold ( 9 ) ( 2 )

Deferred compensation derivative contracts Administrative expenses ( 1 ) —

Treasury rate lock contracts Interest expense — — — ( 3 )

Total (gain) loss at end of quarter $ ( 26 ) $ 35 $ ( 43 ) $ 26

Total loss (gain) at end of quarter $ ( 10 ) $ ( 1 )

Fair Value Measurements

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When available, we use unadjusted quoted market prices to measure the fair value and classify such items as Level 1.

If quoted market prices are not available, we base fair value upon internally developed models that use current market-based or independently sourced market parameters such as

interest rates and currency rates.

If quoted market prices are not available, we base fair value upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates.

Included in the fair value of derivative instruments is an adjustment for credit and nonperformance risk.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our financial assets and liabilities that are measured at fair value on a recurring basis as of May 2, 2021, and August 2, 2020, consistent with the fair value hierarchy:

The following table presents our financial assets and liabilities that are measured at fair value on a recurring basis as of October 31, 2021, and August 1, 2021, consistent with the fair value hierarchy:

2021 Fair Value Measurements at

May 2, 2021 Using

October 31, 2021 Using

Fair Value Hierarchy Fair Value

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2021 Fair Value Measurements at

May 2, 2021 Using

October 31, 2021 Using

Fair Value Hierarchy Fair Value

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(4) Based on the fair value of the participants’ investments.

The following table summarizes the changes in fair value of Level 3 assets and liabilities for the nine-month periods ended May 2, 2021, and April 26, 2020:

Nine Months Ended

May 2, 2021 April 26, 2020 (1)

Fair value at beginning of year $ 2 $ 76

Gains (losses) 2 ( 46 )

Purchases — 1

Settlements ( 3 ) ( 1 )

Fair value at end of quarter $ 1 $ 30

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(1) Primarily represented investments in equity securities that were not readily marketable and were accounted for under the fair value option.

The investments were funded by Acre, a limited partnership in which we were the sole limited partner.

Fair value was based on analyzing recent transactions and transactions of comparable companies, and the discounted cash flow method.

In addition, allocation methods, including the option pricing method, were used in distributing fair value among various equity holders according to rights and preferences.

We entered into an agreement to sell our interest in Acre on April 26, 2020, and completed the sale on May 8, 2020.

As a result of the pending sale, we adjusted the fair value as of April 26, 2020 based on the proceeds.

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value.

There were no cash equivalents at May 2, 2021, and $ 157 at August 2, 2020.

There were $ 32 of cash equivalents at October 31, 2021, and none at August 1, 2021.

Cash equivalents represent fair value as these highly liquid investments have an original maturity of three months or less.

Fair value of cash equivalents is based on Level 2 inputs.

The fair value of short- and long-term debt was $ 5,641 at May 2, 2021, and $ 6,995 at August 2, 2020.

The carrying value was $ 5,201 at May 2, 2021, and $ 6,196 at August 2, 2020.

The fair value of short- and long-term debt was $ 5,518 at October 31, 2021, and $ 5,613 at August 1, 2021.

The carrying value was $ 5,047 at October 31, 2021, and $ 5,058 at August 1, 2021.

The fair value of long-term debt is principally estimated using Level 2 inputs based on quoted market prices or pricing models using current market rates.

Share Repurchases

In March 2017, the Board authorized a strategic share repurchase program to purchase up to $ 1,500 (March 2017 program).

The March 2017 program has no expiration date, but it may be suspended or discontinued at any time.

In addition to the March 2017 program, we had a separate Board authorization to purchase shares to offset the impact of dilution from shares issued under our stock compensation programs (anti-dilutive program).

We suspended all of our share repurchases, including our anti-dilutive program, as of the second quarter of 2018.

Approximately $ 1,296 remained available under the March 2017 program as of May 2, 2021, which remains suspended.

In June 2021, the Board authorized a new anti-dilutive share repurchase program of up to $ 250 (June 2021 program) to offset the impact of dilution from shares issued under our stock compensation programs.

In June 2021, the Board authorized an anti-dilutive share repurchase program of up to $ 250 (June 2021 program) to offset the impact of dilution from shares issued under our stock compensation programs.

The June 2021 program has no expiration date, but it may be suspended or discontinued at any time.

Repurchases under the June 2021 program may be made in open-market or privately negotiated transactions.

In September 2021, the Board approved a new strategic share repurchase program of up to $ 500 (September 2021 program).

The September 2021 program has no expiration date, but it may be suspended or discontinued at any time.

Repurchases under the September 2021 program may be made in open-market or privately negotiated transactions.

The September 2021 program replaced the prior $ 1,500 program, which our Board approved in March 2017 and has been cancelled.

During the three-month period ended October 31, 2021, we repurchased approximately 1.5 million shares at a cost of $ 63 .

Of this amount, $ 38 was used to repurchase shares pursuant to our June 2021 program and $ 25 was used to repurchase shares pursuant to our September 2021 program.

As of October 31, 2021, approximately $ 176 remained available under the June 2021 program and approximately $ 475 remained available under the September 2021 program.

Stock-based Compensation

We provide compensation benefits by issuing stock options, unrestricted stock and restricted stock units (including time-lapse restricted stock units, EPS performance restricted stock units, total shareholder return (TSR) performance restricted stock units and free cash flow (FCF) performance restricted stock units).

In 2021, we issued time-lapse restricted stock units, unrestricted stock and TSR performance restricted stock units.

We have not issued stock options, FCF performance restricted stock units, or EPS performance restricted stock units in 2021.

In 2022, we issued time-lapse restricted stock units, unrestricted stock, TSR performance restricted stock units and EPS performance restricted stock units.

We last issued stock options and FCF performance restricted stock units in 2019.

In determining stock-based compensation expense, we estimate forfeitures expected to occur.

Total pre-tax stock-based compensation expense and tax-related benefits recognized in Earnings from continuing operations were as follows:

Three Months Ended Nine Months Ended

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020

Three Months Ended

October 31, 2021 November 1, 2020

Total pre-tax stock-based compensation expense $ 14 $ 16

Tax-related benefits $ 2 $ 3

In the nine-month period ended April 26, 2020, total pre-tax stock-based compensation expense recognized in Earnings from discontinued operations was $ 2 .

The tax-related benefits were no t material.

The following table summarizes stock option activity as of May 2, 2021:

The following table summarizes stock option activity as of October 31, 2021:

Options Weighted-

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Terminated — $ —

Outstanding at May 2, 2021 1,372 $ 45.61 6.2 $ 6

Exercisable at May 2, 2021 1,079 $ 48.36 5.8 $ 3

The total intrinsic value of options exercised during the nine-month period ended May 2, 2021 was no t material.

The total intrinsic value of options exercised during the nine-month period ended April 26, 2020 was $ 2 .

Outstanding at October 31, 2021 1,340 $ 45.83 5.6 $ 2

Exercisable at October 31, 2021 1,129 $ 47.84 5.3 $ 1

The total intrinsic value of options exercised during the three-month period ended October 31, 2021 was not material.

No options were exercised during the three-month period ended November 1, 2020.

We measured the fair value of stock options using the Black-Scholes option pricing model.

We expense stock options on a straight-line basis over the vesting period, except for awards issued to retirement eligible participants, which we expense on an accelerated basis.

As of May 2, 2021, total remaining unearned compensation related to nonvested stock options was $ 1 , which will be amortized over the weighted-average remaining service period of less than one year .

The following table summarizes time-lapse restricted stock units, EPS performance restricted stock units and FCF performance restricted stock units as of May 2, 2021:

As of October 31, 2021, total remaining unearned compensation related to nonvested stock options was less than $ 1 , which will be amortized over the weighted-average remaining service period of less than one year .

The following table summarizes time-lapse restricted stock units, EPS performance restricted stock units and FCF performance restricted stock units as of October 31, 2021:

Units Weighted-Average Grant-Date Fair Value

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Forfeited ( 63 ) $ 45.48

Nonvested at May 2, 2021 1,834 $ 45.64

We determine the fair value of time-lapse restricted stock units and EPS performance restricted stock units based on the quoted price of our stock at the date of grant.

Nonvested at October 31, 2021 2,015 $ 43.93

We determine the fair value of time-lapse restricted stock units based on the quoted price of our stock at the date of grant.

We expense time-lapse restricted stock units on a straight-line basis over the vesting period, except for awards issued to retirement-eligible participants, which we expense on an accelerated basis.

We expensed EPS performance restricted stock units on a graded-vesting basis, except for awards issued to retirement-eligible participants, which we expensed on an accelerated basis.

The actual number of EPS performance restricted stock units issued at the vesting date was either 0 % or 100 % of the initial grant, depending on actual performance achieved.

We estimated expense based on the number of awards expected to vest.

As of November 1, 2020, there were no EPS performance target grants outstanding.

In 2019, we issued approximately 388 thousand FCF performance restricted stock units for which vesting is contingent upon achievement of free cash flow (defined as Net cash provided by operating activities less capital expenditures and certain investing and financing activities) compared to annual operating plan objectives over a three-year period.

In 2022, we granted EPS performance restricted stock units that will be earned upon the achievement of our adjusted EPS compound annual growth rate goal, measured over a three-year period.

The actual number of EPS performance restricted stock units issued at the vesting date could range from 0 % to 200 % of the initial grant depending on actual performance achieved.

The fair value of EPS performance restricted stock units is based upon the quoted price of our stock at the date of grant.

We expense EPS performance restricted stock units on a straight-line basis over the service period, except for awards issued to retirement-eligible participants, which we expense on an accelerated basis.

We estimate expense based on the number of awards expected to vest.

There were 318 thousand EPS performance target grants outstanding at October 31, 2021, with a grant-date fair value of $ 41.53 .

In 2019, we issued approximately 388 thousand FCF performance restricted stock units for which vesting was contingent upon achievement of free cash flow (defined as Net cash provided by operating activities less capital expenditures and certain investing and financing activities) compared to annual operating plan objectives over a three-year period.

An annual objective was established each fiscal year for three consecutive years.

Performance against these objectives will be averaged at the end of the three-year period to determine the number of underlying units that will vest at the end of the three years .

Performance against these objectives was averaged at the end of the three-year period to determine the number of underlying units that would vest at the end of the three years .

The actual number of FCF performance restricted stock units issued at the vesting date could range from 0 % to 200 % of the initial grant depending on actual performance achieved.

The fair value of FCF performance restricted stock units is based upon the quoted price of our stock at the date of grant.

We expense FCF performance restricted stock units over the requisite service period of each objective.

As of November 1, 2020, we have granted all of the issued FCF performance restricted stock units, which are included in the table above.

There were 241 thousand FCF performance target grants outstanding at May 2, 2021, with a weighted-average grant-date fair value of $ 44.10 .

As of May 2, 2021, total remaining unearned compensation related to nonvested time-lapse restricted stock units and FCF performance restricted units was $ 38 , which will be amortized over the weighted-average remaining service period of 1.7 years.

The fair value of restricted stock units vested during the nine-month periods ended May 2, 2021, and April 26, 2020, was $ 38 ,

and $ 34 , respectively.

The weighted-average grant-date fair value of the restricted stock units granted during the nine-month period ended April 26, 2020 was $ 46.77 .

The following table summarizes TSR performance restricted stock units as of May 2, 2021:

The fair value of FCF performance restricted stock units was based upon the quoted price of our stock at the date of grant.

We expensed FCF performance restricted stock units over the requisite service period of each objective.

We estimated expense based on the number of awards expected to vest.

In the first quarter of 2022, recipients of FCF performance restricted stock units earned 167 % of the initial grants based upon the average of actual performance achieved during a three-year period ended August 1, 2021.

As a result, approximately 158 thousand additional shares were awarded.

As of October 31, 2021, there were no FCF performance target grants outstanding.

As of October 31, 2021, total remaining unearned compensation related to nonvested time-lapse restricted stock units and EPS performance restricted stock units was $ 64 , which will be amortized over the weighted-average remaining service period of 2.1 years.

The fair value of restricted stock units vested during the three-month periods ended October 31, 2021, and November 1, 2020, was $ 48 , and $ 34 , respectively.

The weighted-average grant-date fair value of the restricted stock units granted during the three-month period ended November 1, 2020 was $ 48.43 .

The following table summarizes TSR performance restricted stock units as of October 31, 2021:

Units Weighted-Average Grant-Date Fair Value

5 unchanged sentences

Forfeited ( 113 ) $ 43.12

Nonvested at May 2, 2021 1,243 $ 53.63

Nonvested at October 31, 2021 1,255 $ 55.65

We estimated the fair value of TSR performance restricted stock units at the grant date using a Monte Carlo simulation.

5 unchanged sentences

We recognize compensation expense on a straight-line basis over the service period, except for awards issued to retirement eligible participants, which we expense on an accelerated basis.

As of May 2, 2021, total remaining unearned compensation related to TSR performance restricted stock units was $ 30 , which will be amortized over the weighted-average remaining service period of 1.8 years.

As of October 31, 2021, total remaining unearned compensation related to TSR performance restricted stock units was $ 31 , which will be amortized over the weighted-average remaining service period of 1.9 years.

In the first quarter of 2022, recipients of TSR performance restricted stock units earned 75 % of the initial grants based upon our TSR ranking in a performance peer group during a three-year period ended July 30, 2021.

In the first quarter of 2021, recipients of TSR performance restricted stock units earned 50 % of the initial grants based upon our TSR ranking in a performance peer group during a three-year period ended July 31, 2020.

The fair value of TSR performance restricted stock units vested during the nine-month period ended May 2, 2021 was $ 11 .

The fair value of TSR performance restricted stock units vested during the three-month periods ended October 31, 2021 and November 1, 2020 was $ 8 and $ 11 , respectively.

The grant-date fair value of the TSR performance restricted stock units granted during 2021 was $ 54.93 .

The excess tax benefits of $ 1 in the nine-month periods ended May 2, 2021 and April 26, 2020, on the exercise of stock options and vested restricted stock were presented as cash flows from operating activities.

Cash received from the exercise of stock options was $ 2 and $ 23 for the nine-month periods ended May 2, 2021, and April 26, 2020, respectively, and is reflected in cash flows from financing activities in the Consolidated Statements of Cash Flows.

The excess tax benefits of $ 1 in the three-month periods ended October 31, 2021 and November 1, 2020 on the exercise of stock options and vested restricted stock were presented as cash flows from operating activities.

Cash received from the exercise of stock options was $ 1 for the three-month period ended October 31, 2021 and is reflected in cash flows from financing activities in the Consolidated Statements of Cash Flows.

Commitments and Contingencies

9 unchanged sentences

Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

On January 7, 2019, three purported shareholder class action lawsuits pending in the United States District Court for the District of New Jersey (the Court) were consolidated under the caption, In re Campbell Soup Company Securities Litigation ,

1:18-cv-14385-NLH-JS (the Action).

Oklahoma Firefighters Pension and Retirement System was appointed lead plaintiff in the Action and, on March 1, 2019, filed an amended consolidated complaint.

Oklahoma Firefighters Pension and Retirement System was appointed lead

plaintiff in the Action and, on March 1, 2019, filed an amended consolidated complaint.

The company, Denise Morrison (the company's former President and Chief Executive Officer), and Anthony DiSilvestro (the company's former Senior Vice President and Chief Financial Officer) are defendants in the Action.

8 unchanged sentences

We establish liabilities for litigation and regulatory loss contingencies when information related to the loss contingencies shows both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.

It is possible that some matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably estimated as of May 2, 2021.

It is possible that some matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably estimated as of October 31, 2021.

While the potential future charges could be material in a particular quarter or annual period, based on information currently known by us, we do not believe any such charges are likely to have a material adverse effect on our consolidated results of operations or financial condition.

2 unchanged sentences

Certain indemnifications have finite expiration dates.

Liabilities recognized based on known exposures related to such matters were not material at May 2, 2021.

Liabilities recognized based on known exposures related to such matters were not material at October 31, 2021.

Supplemental Financial Statement Data

Balance Sheets May 2, 2021 August 2, 2020

Balance Sheets October 31, 2021 August 1,

Raw materials, containers and supplies $ 425 $ 321

Finished products 549 612

Statements of Earnings Three Months Ended Nine Months Ended

May 2, 2021 April 26, 2020 May 2, 2021 April 26, 2020

Statements of Earnings Three Months Ended

October 31, 2021 November 1, 2020

Other expenses / (income)

1 unchanged sentence

Net periodic benefit income other than the service cost ( 19 ) ( 21 )

Pension settlement charges (gains) ( 4 ) 54 ( 38 ) 43

Investment losses — 45 — 49

Loss on sale of business (1)

Pension actuarial losses (gains) 6 ( 4 )

Transition services fees — ( 4 )

Other 1 ( 4 ) 4 ( 1 )

$ ( 1 ) $ ( 18 )

____________________________

(1) See Note 3 for additional information.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements