What changed in this filing

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Item 1. Financial Statements

2022-06-08 compared with 2022-03-09 · 154 added, 138 removed, 650 unchanged (31% of the section changed)

3 unchanged sentences

(millions, except per share amounts)

Three Months Ended Six Months Ended

January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021

Three Months Ended Nine Months Ended

May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021

Net sales $ 2,130 $ 1,984 $ 6,575 $ 6,603

13 unchanged sentences

Earnings from continuing operations 188 166 661 720

Earnings (loss) from discontinued operations — — — —

Loss from discontinued operations — ( 6 ) — ( 6 )

Net earnings 188 160 661 714

3 unchanged sentences

Earnings from continuing operations attributable to Campbell Soup Company $ .62 $ .55 $ 2.19 $ 2.38

Earnings (loss) from discontinued operations — — — —

Loss from discontinued operations — ( .02 ) — ( .02 )

Net earnings attributable to Campbell Soup Company $ .62 $ .53 $ 2.19 $ 2.36

2 unchanged sentences

Earnings from continuing operations attributable to Campbell Soup Company $ .62 $ .54 $ 2.18 $ 2.36

Earnings (loss) from discontinued operations — — — —

Loss from discontinued operations — ( .02 ) — ( .02 )

Net earnings attributable to Campbell Soup Company $ .62 $ .52 $ 2.18 $ 2.34

4 unchanged sentences

Three Months Ended

January 30, 2022 January 31, 2021

May 1, 2022 May 2, 2021

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

12 unchanged sentences

Total comprehensive income (loss) attributable to Campbell Soup Company $ 190 $ 167

Six Months Ended

January 30, 2022 January 31, 2021

Nine Months Ended

May 1, 2022 May 2, 2021

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

16 unchanged sentences

(millions, except per share amounts)

January 30, 2022 August 1, 2021

May 1, 2022 August 1, 2021

Current assets

38 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended

January 30, 2022 January 31, 2021

Nine Months Ended

May 1, 2022 May 2, 2021

Cash flows from operating activities:

21 unchanged sentences

Short-term repayments, including commercial paper ( 700 ) ( 295 )

Long-term repayments — ( 721 )

Dividends paid ( 340 ) ( 327 )

2 unchanged sentences

Payments related to tax withholding for stock-based compensation ( 18 ) ( 15 )

Payments related to extinguishment of debt ( 453 ) —

Net cash used in financing activities ( 805 ) ( 1,356 )

14 unchanged sentences

Shares Amount Shares Amount

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

Balance at January 31, 2021

323 $ 12 ( 20 ) $ ( 990 ) $ 388 $ 3,517 $ ( 5 ) $ 3 $ 2,925

Net earnings (loss) 160 — 160

4 unchanged sentences

Treasury stock issued under management incentive and stock option plans — 4 13 — 17

Balance at January 31, 2021

Balance at May 2, 2021

323 $ 12 ( 20 ) $ ( 986 ) $ 401 $ 3,564 $ 2 $ 2 $ 2,995

Balance at August 2, 2020

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

Net earnings (loss) 714 — 714

4 unchanged sentences

Treasury stock issued under management incentive and stock option plans 1 37 7 ( 6 ) 38

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

Balance at January 30, 2022

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

323 $ 12 ( 21 ) $ ( 1,039 ) $ 388 $ 3,983 $ 6 $ 2 $ 3,352

Net earnings (loss) 188 — 188

4 unchanged sentences

Treasury stock issued under management incentive and stock option plans — 2 14 — 16

Balance at January 30, 2022

Balance at May 1, 2022

323 $ 12 ( 23 ) $ ( 1,088 ) $ 402 $ 4,059 $ 8 $ 2 $ 3,395

Balance at August 1, 2021

323 $ 12 ( 21 ) $ ( 1,021 ) $ 414 $ 3,742 $ 5 $ 2 $ 3,154

Net earnings (loss) 661 — 661

4 unchanged sentences

Treasury stock issued under management incentive and stock option plans 1 49 ( 12 ) ( 8 ) 29

Balance at January 30, 2022

Balance at May 1, 2022

323 $ 12 ( 23 ) $ ( 1,088 ) $ 402 $ 4,059 $ 8 $ 2 $ 3,395

28 unchanged sentences

Net current-period other comprehensive income (loss) 18 ( 3 ) ( 3 ) 12

Balance at January 31, 2021

Balance at May 2, 2021

$ 8 $ ( 10 ) $ 4 $ 2

4 unchanged sentences

Net current-period other comprehensive income (loss) ( 6 ) 10 ( 1 ) 3

Balance at January 30, 2022

Balance at May 1, 2022

$ — $ 6 $ 2 $ 8

_____________________________________

(1) Included no tax as of January 30, 2022, August 1, 2021, January 31, 2021 and August 2, 2020.

(2) Included tax expense of $ 1 million as of January 30, 2022, a tax benefit of $ 1 million as of August 1, 2021, $ 2 million as of January 31, 2021, and $ 1 million as of August 2, 2020.

(3) Included tax expense of $ 1 million as of January 30, 2022, and as of August 1, 2021, and $ 2 million as of January 31, 2021, and as of August 2, 2020.

(1) Included no tax as of May 1, 2022, August 1, 2021, May 2, 2021 and August 2, 2020.

(2) Included tax expense of $ 2 million as of May 1, 2022, a tax benefit of $ 1 million as of August 1, 2021, $ 2 million as of May 2, 2021, and $ 1 million as of August 2, 2020.

(3) Included tax expense of $ 1 million as of May 1, 2022, August 1, 2021 and May 2, 2021, and $ 2 million 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 Six Months Ended

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021 Location of Loss (Gain) Recognized in Earnings

Three Months Ended Nine Months Ended

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021 Location of Loss (Gain) Recognized in Earnings

Losses (gains) on cash-flow hedges:

15 unchanged sentences

Foreign currency translation adjustment ( 3 ) — ( 3 )

Net balance at January 30, 2022

Net balance at May 1, 2022

$ 992 $ 2,986 $ 3,978

3 unchanged sentences

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

January 30, 2022 August 1, 2021

May 1, 2022 August 1, 2021

(Millions) Cost Accumulated Amortization Net Cost Accumulated Amortization Net

4 unchanged sentences

Total net intangible assets $ 3,208 $ 3,239

The carrying values of trademarks as of January 30, 2022 and August 1, 2021 are detailed below:

The carrying values of trademarks as of May 1, 2022 and August 1, 2021 are detailed below:

Snyder's of Hanover $ 620

5 unchanged sentences

(Snyder's-Lance).

Amortization of intangible assets was $ 21 million for both the six-month periods ended January 30, 2022 and January 31, 2021.

As of January 30, 2022, amortizable intangible assets had a weighted-average remaining useful life of 17 years.

Amortization of intangible assets was $ 31 million for both the nine-month periods ended May 1, 2022 and May 2, 2021.

As of May 1, 2022, 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 million per year.

25 unchanged sentences

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

Three Months Ended Six Months Ended

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021

Three Months Ended Nine Months Ended

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021

Meals & Beverages $ 1,131 $ 1,062 $ 3,672 $ 3,743

1 unchanged sentence

Total $ 2,130 $ 1,984 $ 6,575 $ 6,603

Three Months Ended Six Months Ended

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021

Three Months Ended Nine Months Ended

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021

Earnings before interest and taxes

8 unchanged sentences

(1) Represents unallocated items.

There were pension actuarial gains of $ 10 million and $ 4 million in the three- and six-month periods ended January 30, 2022, and pension actuarial gains of $ 30 million and $ 34 million in the three- and six-month periods ended January 31, 2021, respectively.

Costs related to the cost savings initiatives were $ 5 million and $ 9 million in the three- and six-month periods ended January 30, 2022, and $ 4 million and $ 9 million in the three- and six-month periods ended January 31, 2021, respectively.

Unrealized mark-to-market adjustments on outstanding undesignated commodity hedges were losses of $ 3 million in the six-month period ended January 30, 2022, and gains of $ 11 million and $ 17 million in the three- and six-month periods ended January 31, 2021, respectively.

There were pension actuarial losses of $ 16 million and $ 12 million in the three- and nine-month periods ended May 1, 2022, and pension actuarial gains of $ 4 million and $ 38 million in the three- and nine-month periods ended May 2, 2021, respectively.

Costs related to the cost savings initiatives were $ 6 million and $ 15 million in the three- and nine-month periods ended May 1, 2022, and $ 13 million and $ 22 million in the three- and nine-month periods ended May 2, 2021, respectively.

Unrealized mark-to-market adjustments on outstanding undesignated commodity hedges were losses of $ 5 million and $ 8 million in the three- and nine-month periods ended May 1, 2022, and gains of $ 22 million and $ 39 million in the three- and nine-month periods ended May 2, 2021, respectively.

(2) See Note 6 for additional information.

Our net sales based on product categories are as follows:

Three Months Ended Six Months Ended

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021

Three Months Ended Nine Months Ended

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021

Soup $ 606 $ 544 $ 2,187 $ 2,164

17 unchanged sentences

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

Three Months Ended Six Months Ended

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021 Recognized as of January 30, 2022

Three Months Ended Nine Months Ended

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021 Recognized as of May 1, 2022

Restructuring charges $ — $ 2 $ — $ 21 $ 259

5 unchanged sentences

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

(Millions) Recognized as of January 30, 2022

(Millions) Recognized as of May 1, 2022

Severance pay and benefits

1 unchanged sentence

Implementation costs and other related costs

The total estimated pre-tax costs for actions associated with continuing operations that have been identified are approximately $ 715 million to $ 725 million and we expect to incur the costs through 2022.

The total estimated pre-tax costs for actions associated with continuing operations that have been identified are approximately $ 725 million to $ 735 million and we expect to incur substantially all of the costs through 2022.

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

8 unchanged sentences

Of the aggregate $ 725 million to $ 735 million of pre-tax costs associated with continuing operations identified to date, we expect approximately $ 625 million to $ 635 million will be cash expenditures.

In addition, we expect to invest approximately $ 445 million in capital expenditures through 2022, of which we invested $ 427 million as of January 30, 2022.

In addition, we expect to invest approximately $ 440 million in capital expenditures, of which we invested $ 433 million as of May 1, 2022.

We expect to invest in substantially all of the capital expenditures through 2022.

The capital expenditures primarily relate to a U.S.

1 unchanged sentence

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 January 30, 2022, is as follows:

A summary of the restructuring activity and related reserves associated with continuing operations at May 1, 2022, is as follows:

(Millions) Severance Pay and Benefits Implementation Costs and Other Related

2 unchanged sentences

2022 cash payments

Accrued balance at January 30, 2022

Accrued balance at May 1, 2022

__________________________________

4 unchanged sentences

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

January 30, 2022

(Millions) Three Months Ended Six Months Ended Costs Incurred to Date

(Millions) Three Months Ended Nine Months Ended Costs Incurred to Date

Meals & Beverages $ — $ 2 $ 225

5 unchanged sentences

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 six-month periods ended January 30, 2022, and January 31, 2021, excludes approximately 1 million stock options that would have been antidilutive.

The earnings per share calculation for the three- and nine-month periods ended May 1, 2022, and May 2, 2021, 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 Six Months Ended

Three Months Ended Nine Months Ended

Pension Postretirement Pension Postretirement

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021

Service cost $ 3 $ 5 $ — $ — $ 12 $ 14 $ — $ —

4 unchanged sentences

Net periodic benefit expense (income) $ 3 $ ( 20 ) $ 1 $ ( 1 ) $ ( 33 ) $ ( 86 ) $ 2 $ ( 1 )

Actuarial losses (gains) related to the remeasurements of U.S.

Actuarial losses (gains) were due to the remeasurements of U.S.

and Canadian pension plans.

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 gains recognized for the three- and six-month periods ended January 30, 2022 were primarily due to an increase in discount rates used to determine the benefit obligation, partially offset by lower than anticipated investment returns on plan assets.

The actuarial gains recognized for the three- and six-month periods ended January 31, 2021 were primarily due to higher than anticipated investment returns on plan assets.

The actuarial losses recognized for the three- and nine-month periods ended May 1, 2022 were primarily due to lower than anticipated investment returns on plan assets, partially offset by an increase in discount rates used to determine the benefit obligation.

The actuarial gains recognized for the three- and nine-month periods ended May 2, 2021 were primarily due to an increase in discount rates used to determine the benefit obligation, partially offset by lower than anticipated investment returns on plan assets.

The components of lease costs were as follows:

Three Months Ended Six Months Ended

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021

Three Months Ended Nine Months Ended

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021

Operating lease cost $ 19 $ 20 $ 58 $ 60

2 unchanged sentences

Variable lease cost (1)

49 45 150 137

Sublease income

— ( 1 ) — ( 2 )

Total $ 87 $ 76 $ 262 $ 230

3 unchanged sentences

Operating Leases

(Millions) Balance Sheet Classification January 30, 2022 August 1, 2021

(Millions) Balance Sheet Classification May 1, 2022 August 1, 2021

ROU assets, net Other assets $ 246 $ 235

2 unchanged sentences

Finance Leases

(Millions) Balance Sheet Classification January 30, 2022 August 1, 2021

(Millions) Balance Sheet Classification May 1, 2022 August 1, 2021

ROU assets, net Plant assets, net of depreciation $ 32 $ 29

2 unchanged sentences

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

Six Months Ended

(Millions) January 30, 2022 January 31, 2021

Nine Months Ended

(Millions) May 1, 2022 May 2, 2021

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

4 unchanged sentences

Finance leases

Debt Extinguishment

On March 4, 2022, we completed the redemption of all $ 450 million outstanding aggregate principal amount of our 2.50 % Senior Notes due August 2, 2022.

The consideration for the redemption was $ 453 million, including $ 3 million of premium.

We recognized a loss of $ 4 million (including the $ 3 million of premium and other costs), which was recorded in Interest expense in the Consolidated Statement of Earnings.

In addition, we paid accrued and unpaid interest on the redeemed notes through the date of settlement.

We used a combination of cash on hand and short-term debt to fund the redemption.

Financial Instruments

2 unchanged sentences

In order to manage these exposures, we follow established risk management policies and procedures, including the use of derivative contracts such as swaps, rate locks, options, forwards and commodity futures.

We enter into these derivative contracts for periods consistent with the related underlying exposures, and the contracts do not constitute positions independent of those exposures.

We enter into these derivative contracts for periods consistent with the related underlying exposures, and the contracts do not constitute positions independent

of those exposures.

We do not enter into derivative contracts for speculative purposes and do not use leveraged instruments.

3 unchanged sentences

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 January 30, 2022, or August 1, 2021.

We did not have credit risk-related contingent features in our derivative instruments as of May 1, 2022, or August 1, 2021.

We are also exposed to credit risk from our customers.

3 unchanged sentences

Foreign Currency Exchange Risk

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

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

Principal currencies hedged include the Canadian dollar.

2 unchanged sentences

We hedge portions of our forecasted foreign currency transaction exposure with foreign exchange forward contracts for periods typically up to 18 months.

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 $ 158 million as of January 30, 2022, and $ 134 million as of August 1, 2021.

The notional amount of foreign exchange forward contracts accounted for as cash-flow hedges was $ 176 million as of May 1, 2022, and $ 134 million 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.

1 unchanged sentence

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 $ 17 million as of January 30, 2022, and $ 13 million as of August 1, 2021.

The notional amount of foreign exchange forward contracts that are not designated as accounting hedges was $ 15 million as of May 1, 2022, and $ 13 million 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.

There were no interest rate swaps or treasury rate lock contracts outstanding as of January 30, 2022, or August 1, 2021.

There were no interest rate swaps or treasury rate lock contracts outstanding as of May 1, 2022, or August 1, 2021.

Commodity Price Risk

3 unchanged sentences

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 $ 14 million as of January 30, 2022, and $ 18 million as of August 1, 2021.

The notional amount of commodity contracts designated as cash-flow hedges was $ 9 million as of May 1, 2022, and $ 18 million as of August 1, 2021.

The notional amount of commodity contracts not designated as accounting hedges was $ 112 million as of January 30, 2022, and $ 190 million as of August 1, 2021.

The notional amount of commodity contracts not designated as accounting hedges was $ 184 million as of May 1, 2022, and $ 190 million as of August 1, 2021.

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

2 unchanged sentences

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

The notional amount was approximately $ 89 million as of January 30, 2022, and $ 38 million as of August 1, 2021.

The notional amount was approximately $ 63 million as of May 1, 2022, and $ 38 million 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 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 January 30, 2022, 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

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 Extended Market Index Plus Fund, the Vanguard Institutional Index Institutional Plus Fund, the Vanguard Short-Term Bond Index Fund, and the Vanguard Total International Stock Index Fund.

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 May 1, 2022, 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 $ 29 million as of January 30, 2022, 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 January 30, 2022, and August 1, 2021:

(Millions) Balance Sheet Classification January 30, 2022 August 1, 2021

The notional amounts of the contracts were $ 50 million as of May 1, 2022, and $ 29 million as of 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 May 1, 2022, and August 1, 2021:

(Millions) Balance Sheet Classification May 1, 2022 August 1, 2021

Asset Derivatives

2 unchanged sentences

Foreign exchange forward contracts Other current assets 3 1

Foreign exchange forward contracts Other assets 1 —

Total derivatives designated as hedges $ 13 $ 5

4 unchanged sentences

Total asset derivatives $ 56 $ 57

(Millions) Balance Sheet Classification January 30, 2022 August 1, 2021

(Millions) Balance Sheet Classification May 1, 2022 August 1, 2021

Liability Derivatives

2 unchanged sentences

Total derivatives designated as hedges $ — $ 3

Derivatives not designated as hedges:

Commodity contracts Accrued liabilities $ 2 $ —

Deferred compensation contracts Accrued liabilities 4 —

Total derivatives not designated as hedges $ 6 $ —

Total liability derivatives $ 6 $ 3

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 January 30, 2022, and August 1, 2021, would be adjusted as detailed in the following table:

January 30, 2022 August 1, 2021

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 1, 2022, and August 1, 2021, would be adjusted as detailed in the following table:

May 1, 2022 August 1, 2021

(Millions) 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

2 unchanged sentences

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

Cash margin liability balances of $ 5 million at January 30, 2022, and $ 14 million 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- and six-month periods ended January 30, 2022, and January 31, 2021, in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

Cash margin liability balances of $ 3 million at May 1, 2022, and $ 14 million 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- and nine-month periods ended May 1, 2022, and May 2, 2021, in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

Total Cash-Flow Hedge

(Millions) January 30, 2022 January 31, 2021

(Millions) May 1, 2022 May 2, 2021

Three Months Ended

7 unchanged sentences

Foreign exchange forward contracts Cost of products sold ( 1 ) 2

Forward starting interest rate swaps Interest expense 1 1

OCI derivative gain (loss) at end of quarter $ 8 $ ( 12 )

Six Months Ended

Nine Months Ended

OCI derivative gain (loss) at beginning of year $ ( 5 ) $ ( 8 )

9 unchanged sentences

Based on current valuations, the amount expected to be reclassified from OCI into earnings within the next 12 months is a gain of $ 13 million.

The following tables show the total amounts of line items presented in the Consolidated Statements of Earnings for the three- and six-month periods ended January 30, 2022, and January 31, 2021, in which the effects of derivative instruments designated as cash-flow hedges are recorded.

The following tables show the total amounts of line items presented in the Consolidated Statements of Earnings for the three- and nine-month periods ended May 1, 2022, and May 2, 2021, 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

January 30, 2022 January 31, 2021

May 1, 2022 May 2, 2021

(Millions) Cost of products sold Interest

5 unchanged sentences

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

Six Months Ended

January 30, 2022 January 31, 2021

Nine Months Ended

May 1, 2022 May 2, 2021

(Millions) Cost of products sold Interest

5 unchanged sentences

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 six-month periods ended January 30, 2022, and January 31, 2021, in the Consolidated Statements of Earnings:

Location of Loss (Gain) Recognized in Earnings Three Months Ended Six Months Ended

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021

The following table shows the effects of our derivative instruments not designated as hedges for the three- and nine-month periods ended May 1, 2022, and May 2, 2021, in the Consolidated Statements of Earnings:

Location of Loss (Gain) Recognized in Earnings Three Months Ended Nine Months Ended

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021

Foreign exchange forward contracts Cost of products sold $ — $ 1 $ — $ 2

Commodity contracts Cost of products sold ( 9 ) ( 24 ) ( 28 ) ( 39 )

Deferred compensation derivative contracts Administrative expenses 1 ( 3 ) — ( 3 )

Deferred compensation contracts Administrative expenses 3 ( 3 ) 3 ( 6 )

Total loss (gain) $ ( 6 ) $ ( 26 ) $ ( 25 ) $ ( 43 )

9 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis as of January 30, 2022, and August 1, 2021, consistent with the fair value hierarchy:

The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis as of May 1, 2022, and August 1, 2021, consistent with the fair value hierarchy:

Fair Value Measurements at

January 30, 2022 Using

Fair Value Hierarchy Fair Value

May 1, 2022 Using

Fair Value Hierarchy

August 1, 2021

Fair Value Measurements at

12 unchanged sentences

Fair Value Measurements at

January 30, 2022 Using

Fair Value Hierarchy Fair Value

May 1, 2022 Using

Fair Value Hierarchy

August 1, 2021

Fair Value Measurements at

4 unchanged sentences

$ — $ — $ — $ — $ 3 $ — $ 3 $ —

Commodity derivative contracts (2)

2 — 2 — — — — —

Deferred compensation derivative contracts (3)

4 — 4 — — — — —

Deferred compensation obligation (4)

5 unchanged sentences

Level 3 is based on unobservable inputs in which there is little or no market data, which requires management’s own assumptions within an internally developed model.

(3) Based on LIBOR and equity index swap rates.

(3) Based on equity index swap rates.

(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 six-month periods ended January 30, 2022, and January 31, 2021:

Six Months Ended

(Millions) January 30, 2022 January 31, 2021

The following table summarizes the changes in fair value of Level 3 assets and liabilities for the nine-month periods ended May 1, 2022, and May 2, 2021:

Nine Months Ended

(Millions) May 1, 2022 May 2, 2021

Fair value at beginning of year $ 1 $ 2

4 unchanged sentences

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

There were $ 70 million of cash equivalents at January 30, 2022, and none at August 1, 2021.

There were $ 39 million of cash equivalents at May 1, 2022, 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 $ 5,316 million at January 30, 2022, and $ 5,613 million at August 1, 2021.

The carrying value was $ 5,029 million at January 30, 2022, and $ 5,058 million at August 1, 2021.

The fair value of short- and long-term debt was $ 4,541 million at May 1, 2022, and $ 5,613 million at August 1, 2021.

The carrying value was $ 4,748 million at May 1, 2022, and $ 5,058 million 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.

3 unchanged sentences

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 million (September 2021 program).

In September 2021, the Board approved a strategic share repurchase program of up to $ 500 million (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 million program, which our Board approved in March 2017 and has been cancelled.

During the six-month period ended January 30, 2022, we repurchased approximately 1.5 million shares at a cost of $ 65 million.

During the nine-month period ended May 1, 2022, we repurchased approximately 2.7 million shares at a cost of $ 116 million.

Of this amount, $ 41 million was used to repurchase shares pursuant to our June 2021 program and $ 75 million was used to repurchase shares pursuant to our September 2021 program.

As of January 30, 2022, approximately $ 174 million remained available under the June 2021 program and approximately $ 475 million remained available under the September 2021 program.

As of May 1, 2022, approximately $ 173 million remained available under the June 2021 program and approximately $ 425 million remained available under the September 2021 program.

Stock-based Compensation

4 unchanged sentences

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

Three Months Ended Six Months Ended

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021

Three Months Ended Nine Months Ended

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021

Total pre-tax stock-based compensation expense $ 15 $ 17 $ 46 $ 51

Tax-related benefits $ 3 $ 3 $ 8 $ 9

The following table summarizes stock option activity as of January 30, 2022:

The following table summarizes stock option activity as of May 1, 2022:

Options Weighted-

7 unchanged sentences

Terminated — $ —

Outstanding at January 30, 2022

Outstanding at May 1, 2022

1,340 $ 45.83 5.1 $ 5

Exercisable at January 30, 2022

Exercisable at May 1, 2022

1,340 $ 45.83 5.1 $ 5

The total intrinsic value of options exercised during the six-month period ended January 30, 2022 was not material.

No options were exercised during the six-month period ended January 31, 2021.

The total intrinsic value of options exercised during the nine-month periods ended May 1, 2022 and May 2, 2021 was not material.

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

1 unchanged sentence

As of January 2022, compensation related to stock options was fully expensed.

The following table summarizes time-lapse restricted stock units, EPS performance restricted stock units and FCF performance restricted stock units as of January 30, 2022:

The following table summarizes time-lapse restricted stock units, EPS performance restricted stock units and FCF performance restricted stock units as of May 1, 2022:

Units Weighted-Average Grant-Date Fair Value

6 unchanged sentences

Forfeited ( 194 ) $ 44.60

Nonvested at January 30, 2022

Nonvested at May 1, 2022

1,985 $ 43.86

6 unchanged sentences

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

There were 319 thousand EPS performance target grants outstanding at January 30, 2022, with a weighted-average grant-date fair value of $ 41.51 .

There were 309 thousand EPS performance target grants outstanding at May 1, 2022, with a weighted-average grant-date fair value of $ 41.50 .

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.

8 unchanged sentences

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

As of January 30, 2022, total remaining unearned compensation related to nonvested time-lapse restricted stock units and EPS performance restricted stock units was $ 54 million, which will be amortized over the weighted-average remaining service period of 2.0 years.

The fair value of restricted stock units vested during the six-month periods ended January 30, 2022, and January 31, 2021, was $ 49 million, and $ 35 million, respectively.

The weighted-average grant-date fair value of the restricted stock units granted during the six-month period ended January 31, 2021 was $ 48.43 .

The following table summarizes TSR performance restricted stock units as of January 30, 2022:

As of May 1, 2022, total remaining unearned compensation related to nonvested time-lapse restricted stock units and EPS performance restricted stock units was $ 45 million, which will be amortized over the weighted-average remaining service period of 1.9 years.

The fair value of restricted stock units vested during the nine-month periods ended May 1, 2022, and May 2, 2021, was $ 50 million, and $ 38 million, respectively.

The weighted-average grant-date fair value of the restricted stock units granted during the nine-month period ended May 2, 2021 was $ 48.43 .

The following table summarizes TSR performance restricted stock units as of May 1, 2022:

Units Weighted-Average Grant-Date Fair Value

6 unchanged sentences

Forfeited ( 188 ) $ 48.00

Nonvested at January 30, 2022

Nonvested at May 1, 2022

1,187 $ 55.58

6 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 January 30, 2022, total remaining unearned compensation related to TSR performance restricted stock units was $ 26 million, which will be amortized over the weighted-average remaining service period of 1.7 years.

As of May 1, 2022, total remaining unearned compensation related to TSR performance restricted stock units was $ 20 million, which will be amortized over the weighted-average remaining service period of 1.6 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 six-month periods ended January 30, 2022 and January 31, 2021 was $ 8 million and $ 11 million, respectively.

The fair value of TSR performance restricted stock units vested during the nine-month periods ended May 1, 2022 and May 2, 2021 was $ 8 million and $ 11 million, 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 million in the six-month periods ended January 30, 2022, and January 31, 2021, 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 million for the six-month period ended January 30, 2022 and is reflected in cash flows from financing activities in the Consolidated Statements of Cash Flows.

The excess tax benefits of $ 1 million in the nine-month periods ended May 1, 2022, and May 2, 2021, 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 million and $ 2 million for the nine-month periods ended May 1, 2022, and May 2, 2021, respectively, and is reflected in cash flows from financing activities in the Consolidated Statements of Cash Flows.

Commitments and Contingencies

23 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 January 30, 2022.

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 1, 2022.

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 January 30, 2022.

Liabilities recognized based on known exposures related to such matters were not material at May 1, 2022.

Supplemental Financial Statement Data

(Millions) January 30, 2022 August 1,

(Millions) May 1, 2022 August 1, 2021

Balance Sheets

1 unchanged sentence

Finished products 663 612

Three Months Ended Six Months Ended

(Millions) January 30, 2022 January 31, 2021 January 30, 2022 January 31, 2021

$ 1,044 $ 933

Three Months Ended Nine Months Ended

(Millions) May 1, 2022 May 2, 2021 May 1, 2022 May 2, 2021

Statements of Earnings

5 unchanged sentences

$ 10 $ ( 23 ) $ ( 10 ) $ ( 86 )

Subsequent Event

On February 2, 2022, we issued a notice of redemption to holders of our 2.50 % Notes due August 2, 2022 (the Notes) for the redemption of all $ 450 million outstanding aggregate principal amount of the Notes.

The redemption date for the Notes was March 4, 2022.

The consideration for the redemption was $ 453 million, including $ 3 million of premium.

In addition, we paid accrued and unpaid interest on the redeemed notes through the date of settlement.

We used a combination of cash on hand and short-term debt to fund the redemption.

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