What changed in this filing

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Item 1. Financial Statements

2022-12-07 compared with 2022-06-08 · 184 added, 278 removed, 526 unchanged (47% of the section changed)

3 unchanged sentences

(millions, except per share amounts)

Three Months Ended Nine Months Ended

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

Three Months Ended

October 30, 2022 October 31, 2021

Net sales $ 2,575 $ 2,236

12 unchanged sentences

Taxes on earnings 93 68

Earnings from continuing operations 188 166 661 720

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

Net earnings 297 261

2 unchanged sentences

Per Share — Basic

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

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

Net earnings attributable to Campbell Soup Company $ .99 $ .86

1 unchanged sentence

Per Share — Assuming Dilution

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

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

Net earnings attributable to Campbell Soup Company $ .99 $ .86

4 unchanged sentences

Three Months Ended

May 1, 2022 May 2, 2021

October 30, 2022 October 31, 2021

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

6 unchanged sentences

Reclassification adjustment for losses (gains) included in net earnings ( 4 ) 1 ( 3 ) — — —

Pension and other postretirement benefits:

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

Other comprehensive income (loss) $ ( 5 ) $ ( 1 ) ( 6 ) $ 3 $ ( 1 ) 2

2 unchanged sentences

Total comprehensive income (loss) attributable to Campbell Soup Company $ 291 $ 263

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

Net earnings (loss) $ 661 $ 714

Other comprehensive income (loss):

Foreign currency translation:

Foreign currency translation adjustments $ ( 6 ) $ — ( 6 ) $ 14 $ — 14

Cash-flow hedges:

Unrealized gains (losses) arising during period 17 ( 4 ) 13 ( 9 ) 1 ( 8 )

Reclassification adjustment for losses (gains) included in net earnings ( 4 ) 1 ( 3 ) 5 — 5

Pension and other postretirement benefits:

Reclassification of prior service credit included in net earnings ( 1 ) — ( 1 ) ( 4 ) 1 ( 3 )

Other comprehensive income (loss) $ 6 $ ( 3 ) 3 $ 6 $ 2 8

Total comprehensive income (loss) $ 664 $ 722

Total comprehensive income (loss) attributable to noncontrolling interests — ( 4 )

Total comprehensive income (loss) attributable to Campbell Soup Company $ 664 $ 726

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(millions, except per share amounts)

May 1, 2022 August 1, 2021

October 30, 2022 July 31, 2022

Current assets

38 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

May 1, 2022 May 2, 2021

Three Months Ended

October 30, 2022 October 31, 2021

Cash flows from operating activities:

1 unchanged sentence

Adjustments to reconcile net earnings to operating cash flow

Restructuring charges — 21

Stock-based compensation 15 14

Pension and postretirement benefit income ( 31 ) ( 87 )

Pension and postretirement benefit expense (income) 11 ( 9 )

Depreciation and amortization 91 83

3 unchanged sentences

Inventories ( 118 ) ( 40 )

Prepaid assets ( 1 ) ( 23 )

Other current assets ( 10 ) ( 5 )

Accounts payable and accrued liabilities 123 87

9 unchanged sentences

Short-term repayments, including commercial paper ( 512 ) ( 395 )

Long-term repayments — ( 721 )

Dividends paid ( 115 ) ( 116 )

2 unchanged sentences

Payments related to tax withholding for stock-based compensation ( 18 ) ( 17 )

Payments related to extinguishment of debt ( 453 ) —

Other — ( 1 )

Net cash used in financing activities ( 127 ) ( 220 )

14 unchanged sentences

Shares Amount Shares Amount

Balance at January 31, 2021

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

Net earnings (loss) 160 — 160

Other comprehensive income (loss) 7 ( 1 ) 6

Dividends ($ .37 per share)

( 113 ) ( 113 )

Treasury stock purchased — — —

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

Balance at May 2, 2021

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

Balance at August 1, 2021

6 unchanged sentences

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 January 30, 2022

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

Net earnings (loss) 188 — 188

Other comprehensive income (loss) 2 — 2

Dividends ($ .37 per share)

( 112 ) ( 112 )

Treasury stock purchased ( 2 ) ( 51 ) ( 51 )

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

Balance at May 1, 2022

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

Balance at August 1, 2021

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

Balance at July 31, 2022

323 $ 12 ( 24 ) $ ( 1,138 ) $ 415 $ 4,040 $ 2 $ 2 $ 3,333

5 unchanged sentences

Treasury stock issued under management incentive and stock option plans 1 39 ( 40 ) — ( 1 )

Balance at May 1, 2022

Balance at October 30, 2022

323 $ 12 ( 24 ) $ ( 1,140 ) $ 375 $ 4,224 $ ( 4 ) $ 2 $ 3,469

4 unchanged sentences

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 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 July 31, 2022.

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

1 unchanged sentence

Recent Accounting Pronouncements

Recently Adopted

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.

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.

Optional expedients can be applied from March 12, 2020 through December 31, 2022.

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

In September 2022, the Financial Accounting Standards Board (FASB) issued guidance that enhances the transparency of supplier finance programs by requiring disclosure of the key terms of these programs and a related rollforward of these obligations to understand the effect on working capital, liquidity and cash flows.

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods in those fiscal years, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

We are currently evaluating the impact that the new guidance will have on our disclosures.

Accumulated Other Comprehensive Income (Loss)

5 unchanged sentences

Balance at August 1, 2021

$ 6 $ ( 4 ) $ 3 $ 5

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

1 unchanged sentence

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

Balance at May 2, 2021

Balance at October 31, 2021

$ 6 $ ( 2 ) $ 3 $ 7

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

Balance at July 31, 2022

$ — $ — $ 2 $ 2

Other comprehensive income (loss) before reclassifications ( 8 ) 5 — ( 3 )

2 unchanged sentences

Net current-period other comprehensive income (loss) ( 8 ) 2 — ( 6 )

Balance at May 1, 2022

Balance at October 30, 2022

$ ( 8 ) $ 2 $ 2 $ ( 4 )

_____________________________________

(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.

(1) Included no tax as of October 30, 2022, July 31, 2022, October 31, 2021 and August 1, 2021.

(2) Included tax expense of $ 1 million as of October 30, 2022, no tax as of July 31, 2022 and October 31, 2021, and a tax benefit of $ 1 million as of August 1, 2021.

(3) Included tax expense of $ 1 million as of October 30, 2022, July 31, 2022, October 31, 2021, and August 1, 2021.

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

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

Three Months Ended

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

Losses (gains) on cash-flow hedges:

1 unchanged sentence

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

Forward starting interest rate swaps — — 1 1 Interest expense

Total before tax ( 4 ) —

1 unchanged sentence

Loss (gain), net of tax $ ( 3 ) $ —

Pension and postretirement benefit adjustments:

Prior service credit $ — $ ( 2 ) $ ( 1 ) $ ( 4 ) Other expenses / (income)

Tax expense (benefit) — 1 — 1

Loss (gain), net of tax $ — $ ( 1 ) $ ( 1 ) $ ( 3 )

Goodwill and Intangible Assets

The following table shows the changes in the carrying amount of goodwill by business segment:

The following table shows the changes in the carrying amount of goodwill:

(Millions) Meals & Beverages Snacks Total

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

Amounts reclassified due to segment change (1)

Net balance at July 31, 2022 $ 993 $ 2,986 $ 3,979

Foreign currency translation adjustment ( 6 ) — ( 6 )

Net balance at May 1, 2022

$ 992 $ 2,986 $ 3,978

Net balance at October 30, 2022

$ 987 $ 2,986 $ 3,973

(1) See Note 5 for additional information.

Intangible Assets

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

May 1, 2022 August 1, 2021

The following table summarizes balance sheet information for intangible assets, excluding goodwill:

October 30, 2022 July 31, 2022

(Millions) Cost Accumulated Amortization Net Cost Accumulated Amortization Net

2 unchanged sentences

Non-amortizable intangible assets

Trademarks 2,549 2,549

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

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

Snyder's of Hanover $ 620 $ 620

Lance 350 350

Kettle Brand 318 318

Pacific Foods 280 280

Various Other (1)

Total $ 2,549

Various other Snacks (1)

Total trademarks $ 2,549 $ 2,549

Total net intangible assets $ 3,187 $ 3,198

____________________________________

1 unchanged sentence

(Snyder's-Lance).

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 of intangible assets was $ 11 million for both the three-month periods ended October 30, 2022 and October 31, 2021.

As of October 30, 2022, amortizable intangible assets had a weighted-average remaining useful life of 16 years.

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

As of our 2022 annual impairment testing, indefinite-lived trademarks with 10% or less of excess coverage of fair value over carrying value had an aggregate carrying value of $ 434 million and included Pacific Foods and certain other Snacks trademarks.

The estimates of future cash flows used in determining the fair value of goodwill and intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions and cost of capital.

Inherent in estimating the future cash flows are uncertainties beyond our control, such as

changes in capital markets.

The actual cash flows could differ materially from management’s estimates due to changes in business conditions, operating performance and economic conditions.

Segment Information

12 unchanged sentences

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 included 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 refer to the * brands as our "power brands." The segment also includes the retail business in Latin America.

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

4 unchanged sentences

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

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 30, 2022 October 31, 2021

Meals & Beverages $ 1,455 $ 1,266

1 unchanged sentence

Total $ 2,575 $ 2,236

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 30, 2022 October 31, 2021

Earnings before interest and taxes

4 unchanged sentences

Restructuring charges (2)

— ( 2 ) — ( 21 )

Total $ 436 $ 376

1 unchanged sentence

(1) Represents unallocated items.

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.

There were pension actuarial losses of $ 15 million and $ 6 million in the three-month periods ended October 30, 2022, and October 31, 2021, respectively.

Costs related to the cost savings initiatives were $ 3 million and $ 4 million in the three-month periods ended October 30, 2022, and October 31, 2021, respectively.

Unrealized mark-to-market adjustments on outstanding undesignated commodity hedges were gains of $ 5 million and losses of $ 3 million in the three-month periods ended October 30, 2022, and October 31, 2021, respectively.

(2) See Note 6 for additional information.

Our net sales based on product categories are as follows:

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 30, 2022 October 31, 2021

Soup $ 893 $ 797

3 unchanged sentences

Total $ 2,575 $ 2,236

Soup includes various soup, broth and stock products.

Soup includes various soup, broths 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, gravies, pasta, beans, canned poultry, and Plum products through May 3, 2021, when the business was sold.

Other simple meals include sauces, gravies, pasta, beans and canned poultry.

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

1 unchanged sentence

Multi-year Cost Savings Initiatives and Snyder's-Lance Cost Transformation Program and Integration

Continuing Operations

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

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

Over the years, we expanded these initiatives by continuing to optimize our supply chain and manufacturing networks, as well as our information technology infrastructure.

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

3 unchanged sentences

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

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

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

A summary of the pre-tax charges recognized in the Consolidated Statements of Earnings related to these initiatives is as follows:

Three Months Ended

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

Restructuring charges $ — $ — $ 264

4 unchanged sentences

Total pre-tax charges $ 3 $ 4 $ 728

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

(Millions) Recognized as of May 1, 2022

A summary of the pre-tax costs associated with the initiatives is as follows:

(Millions) Recognized as of October 30, 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 $ 725 million to $ 735 million and we expect to incur substantially all of the costs through 2022.

The total estimated pre-tax costs for actions that have been identified are approximately $ 735 million to $ 740 million and we expect to incur the costs through 2023.

These estimates will be updated as 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:

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

approximately $ 230 million in severance pay and benefits;

approximately $ 85 million in asset impairment and accelerated depreciation;

and approximately $ 415 million to $ 425 million in implementation costs and other related costs.

and approximately

$ 420 million to $ 425 million in implementation costs and other related costs.

We expect these pre-tax costs to be associated with our segments as follows:

2 unchanged sentences

and Corporate - approximately 26 %.

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 $ 440 million in capital expenditures, of which we invested $ 433 million as of May 1, 2022.

Of the aggregate $ 735 million to $ 740 million of pre-tax costs identified to date, we expect approximately $ 635 million to $ 640 million will be cash expenditures.

In addition, we expect to invest approximately $ 450 million in capital expenditures, of which we invested $ 440 million as of October 30, 2022.

We expect to invest in substantially all of the capital expenditures through 2023.

The capital expenditures primarily relate to a 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 1, 2022, is as follows:

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 within our Meals & Beverages manufacturing network, 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 at October 30, 2022, is as follows:

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

Total Charges

Accrued balance at August 1, 2021 (1)

Accrued balance at July 31, 2022

2023 cash payments

Accrued balance at May 1, 2022

Accrued balance at October 30, 2022

__________________________________

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

(1) 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.

The costs are included in Administrative expenses in the Consolidated Statements of Earnings.

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:

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

A summary of the pre-tax costs associated with segments is as follows:

October 30, 2022

(Millions) Three Months Ended Costs Incurred to Date

Meals & Beverages $ — $ 225

Snacks 4 11 310

Corporate 3 182

Total $ 3 $ 728

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

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 1, 2022, and May 2, 2021, excludes approximately 1 million stock options that would have been antidilutive.

The earnings per share calculation for the three-month periods ended October 30, 2022, and October 31, 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 Nine Months Ended

Pension Postretirement Pension Postretirement

(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

Three Months Ended

Pension Postretirement

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

Service cost $ 4 $ 4 $ — $ —

2 unchanged sentences

Amortization of prior service cost — — — —

Actuarial losses (gains) 16 ( 4 ) — — 12 ( 38 ) — —

Actuarial losses 15 6 — —

Net periodic benefit expense (income) $ 9 $ ( 10 ) $ 2 $ 1

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

and Canadian pension plans.

The actuarial losses resulted from the remeasurement of a U.S.

pension plan for the three-month period ended

October 30, 2022 and a U.S.

and a Canadian pension plan for the three-month period ended October 31, 2021.

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 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 actuarial losses recognized for the three-month periods ended October 30, 2022, and October 31, 2021, were primarily due to losses on plan assets, partially offset by increases in discount rates used to determine the benefit obligation.

The components of lease costs were as follows:

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 30, 2022 October 31, 2021

Operating lease cost $ 20 $ 19

2 unchanged sentences

Variable lease cost (1)

49 45 150 137

Sublease income

— ( 1 ) — ( 2 )

Total $ 91 $ 88

3 unchanged sentences

Operating Leases

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

(Millions) Balance Sheet Classification October 30, 2022 July 31, 2022

ROU assets, net Other assets $ 235 $ 239

2 unchanged sentences

Finance Leases

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

(Millions) Balance Sheet Classification October 30, 2022 July 31, 2022

ROU assets, net Plant assets, net of depreciation $ 24 $ 28

2 unchanged sentences

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

Nine Months Ended

(Millions) May 1, 2022 May 2, 2021

Three Months Ended

(Millions) October 30, 2022 October 31, 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

The principal market risks to which we are exposed are changes in foreign currency exchange rates, interest rates and commodity prices.

In addition, we are exposed to equity price changes related to certain deferred compensation obligations.

In addition, we are exposed to price changes related to certain deferred compensation obligations.

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.

Our derivative programs include instruments that qualify for hedge accounting treatment and instruments that are not designated as accounting hedges.

derivative programs include instruments that qualify for hedge accounting treatment and instruments that are not designated as accounting hedges.

Concentration of Credit Risk

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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 1, 2022, or August 1, 2021.

We did not have credit risk-related contingent features in our derivative instruments as of October 30, 2022, or July 31, 2022.

We are also exposed to credit risk from our customers.

During 2021, our largest customer accounted for approximately 21 % of consolidated net sales from continuing operations.

Our five largest customers accounted for approximately 46 % of our consolidated net sales from continuing operations in 2021.

During 2022, our largest customer accounted for approximately 22 % of consolidated net sales.

Our five largest customers accounted for approximately 47 % of our consolidated net sales in 2022.

We closely monitor credit risk associated with counterpartie s and customers.

Foreign Currency Exchange Risk

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

Principal currencies hedged include the Canadian dollar.

We are exposed to foreign currency exchange risk, primarily the Canadian dollar, related to intercompany transactions and third-party transactions.

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

1 unchanged sentence

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

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.

The notional amount of foreign exchange forward contracts accounted for as cash-flow hedges was $ 121 million as of October 30, 2022, and $ 140 million as of July 31, 2022.

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 $ 15 million as of May 1, 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 $ 18 million as of October 30, 2022, and $ 13 million as of July 31, 2022.

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 May 1, 2022, or August 1, 2021.

There were no interest rate swaps outstanding as of October 30, 2022, or July 31, 2022.

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, aluminum, cocoa, soybean meal, corn and butter.

We also enter into commodity futures, options and swap contracts to reduce the volatility of price fluctuations of wheat, diesel fuel, natural gas, soybean oil, aluminum, cocoa, corn, soybean meal 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 $ 9 million as of May 1, 2022, and $ 18 million as of August 1, 2021.

The notional amount of commodity contracts designated as cash-flow hedges was $ 3 million as of July 31, 2022.

There were no commodity contracts designated as cash-flow hedges as of October 30, 2022.

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 notional amount of commodity contracts not designated as accounting hedges was $ 281 million as of October 30, 2022, and $ 254 million as of July 31, 2022.

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

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

The notional amount was approximately $ 63 million as of May 1, 2022, and $ 38 million as of August 1, 2021.

The notional amount was approximately $ 15 million as of October 30, 2022, and $ 39 million as of July 31, 2022.

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

Equity Price Risk

Deferred Compensation Obligation 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 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.

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 $ 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

The notional amounts of the contracts were $ 50 million as of October 30, 2022, and July 31, 2022.

The following table summarizes the fair value of derivative instruments on a gross basis as recorded in the Consolidated Balance Sheets as of October 30, 2022, and July 31, 2022:

(Millions) Balance Sheet Classification October 30, 2022 July 31, 2022

Asset Derivatives

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Total asset derivatives $ 22 $ 25

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

(Millions) Balance Sheet Classification October 30, 2022 July 31, 2022

Liability Derivatives

Derivatives designated as hedges:

Foreign exchange forward contracts Accrued liabilities $ — $ 3

Total derivatives designated as hedges $ — $ 3

Derivatives not designated as hedges:

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

May 1, 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 October 30, 2022, and July 31, 2022, would be adjusted as detailed in the following table:

October 30, 2022 July 31, 2022

(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

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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.

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:

Cash margin asset balances of $ 11 million at October 30, 2022, and $ 8 million at July 31, 2022, were included in Other current assets in the Consolidated Balance Sheets.

The following table shows the effect of our derivative instruments designated as cash-flow hedges for the three-month periods ended October 30, 2022, and October 31, 2021, in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

Total Cash-Flow Hedge

(Millions) May 1, 2022 May 2, 2021

(Millions) October 30, 2022 October 31, 2021

Three Months Ended

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OCI derivative gain (loss) at end of quarter $ 3 $ ( 2 )

Nine Months Ended

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

Effective portion of changes in fair value recognized in OCI:

Commodity contracts 12 2

Foreign exchange forward contracts 5 ( 11 )

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

Location in Earnings

Commodity contracts Cost of products sold ( 6 ) —

Foreign exchange forward contracts Cost of products sold 1 4

Forward starting interest rate swaps Interest expense 1 1

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

Based on current valuations, the amount expected to be reclassified from OCI into earnings within the next 12 months is a gain of $ 7 million.

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:

The following table shows the total amounts of line items presented in the Consolidated Statements of Earnings for the three-month periods ended October 30, 2022, and October 31, 2021, in which the effects of derivative instruments designated as cash-flow hedges are recorded and the total effect of hedge activity on these line items are as follows:

Three Months Ended

May 1, 2022 May 2, 2021

(Millions) Cost of products sold Interest

Expense Cost of products sold Interest

Consolidated Statements of Earnings:

$ 1,465 $ 51 $ 1,356 $ 53

Loss (gain) on cash-flow hedges:

Amount of loss (gain) reclassified from OCI to earnings $ ( 4 ) $ — $ 2 $ —

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

Nine Months Ended

May 1, 2022 May 2, 2021

(Millions) Cost of products sold Interest

Expense Cost of products sold Interest

October 30, 2022 October 31, 2021

(Millions) Cost of products sold Cost of products sold

Consolidated Statements of Earnings:

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

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 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

The amount excluded from effectiveness testing recognized in each line item of earnings using an amortization approach was not material in all periods presented.

The following table shows the effects of our derivative instruments not designated as hedges in the Consolidated Statements of Earnings:

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

(Millions) October 30, 2022 October 31, 2021

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

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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 May 1, 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 October 30, 2022, and July 31, 2022, consistent with the fair value hierarchy:

October 30, 2022

Fair Value Measurements at

May 1, 2022 Using

October 30, 2022 Using

Fair Value Hierarchy

August 1, 2021

July 31, 2022

Fair Value Measurements at

August 1, 2021 Using

July 31, 2022 Using

Fair Value Hierarchy

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Total assets at fair value $ 23 $ 3 $ 18 $ 2 $ 27 $ 2 $ 21 $ 4

October 30, 2022

Fair Value Measurements at

May 1, 2022 Using

October 30, 2022 Using

Fair Value Hierarchy

August 1, 2021

July 31, 2022

Fair Value Measurements at

August 1, 2021 Using

July 31, 2022 Using

Fair Value Hierarchy

(Millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Foreign exchange forward contracts (1)

$ — $ — $ — $ — $ 3 $ — $ 3 $ —

Commodity derivative contracts (2)

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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 equity index swap rates.

(3) Based on 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 nine-month periods ended May 1, 2022, and May 2, 2021:

Nine Months Ended

(Millions) May 1, 2022 May 2, 2021

The following table summarizes the changes in fair value of Level 3 assets and liabilities for the three-month periods ended October 30, 2022, and October 31, 2021:

Three Months Ended

(Millions) October 30, 2022 October 31, 2021

Fair value at beginning of year $ 4 $ 1

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

There were $ 39 million of cash equivalents at May 1, 2022, and none at August 1, 2021.

There were $ 22 million of cash equivalents at October 30, 2022, and $ 27 million at July 31, 2022.

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 $ 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 short- and long-term debt was $ 4.352 billion at October 30, 2022, and $ 4.637 billion at July 31, 2022.

The carrying value was $ 4.852 billion at October 30, 2022, and $ 4.81 billion at July 31, 2022.

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.

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

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

During the three-month period ended October 30, 2022, we repurchased 859 thousand shares at a cost of $ 41 million pursuant to our June 2021 program.

As of October 30, 2022, approximately $ 131 million remained available under the June 2021 program and approximately $ 375 million remained available under the September 2021 program.

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

Stock-based Compensation

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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

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

Total pre-tax stock-based compensation expense and tax-related benefits recognized in the Consolidated Statements of Earnings were as follows:

Three Months Ended

(Millions) October 30, 2022 October 31, 2021

Total pre-tax stock-based compensation expense $ 15 $ 14

Tax-related benefits $ 3 $ 2

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

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

Options Weighted-

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thousands) (In years) (Millions)

Outstanding at August 1, 2021

Outstanding at July 31, 2022

1,297 $ 46.04

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Terminated — $ —

Outstanding at May 1, 2022

Outstanding at October 30, 2022

1,254 $ 46.22 4.6 $ 9

Exercisable at May 1, 2022

Exercisable at October 30, 2022

1,254 $ 46.22 4.6 $ 9

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

The total intrinsic value of options exercised during the three-month periods ended October 30, 2022 and October 31, 2021 was not material.

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

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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 May 1, 2022:

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

Units Weighted-Average Grant-Date Fair Value

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units in thousands)

Nonvested at August 1, 2021

Nonvested at July 31, 2022

1,946 $ 43.88

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Forfeited ( 17 ) $ 43.96

Nonvested at May 1, 2022

Nonvested at October 30, 2022

2,325 $ 44.99

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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.

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.

In 2023 and 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.

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

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

There were 590 thousand EPS performance target grants outstanding at October 30, 2022, with a weighted-average grant-date fair value of $ 44.32 .

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.

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

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

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

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:

As of October 30, 2022, total remaining unearned compensation related to nonvested time-lapse restricted stock units and EPS performance restricted stock units was $ 72 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 three-month periods ended October 30, 2022, and October 31, 2021, was $ 34 million, and $ 48 million, respectively.

The weighted-average grant-date fair value of the restricted stock units granted during the three-month period ended October 31, 2021 was $ 41.82 .

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

Units Weighted-Average Grant-Date Fair Value

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units in thousands)

Nonvested at August 1, 2021

Nonvested at July 31, 2022

1,153 $ 55.63

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Forfeited ( 7 ) $ 51.16

Nonvested at May 1, 2022

1,187 $ 55.58

Nonvested at October 30, 2022

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

Weighted-average assumptions used in the Monte Carlo simulation were as follows:

Assumptions used in the Monte Carlo simulation were as follows:

Risk-free interest rate 4.29 % 0.45 %

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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 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.

As of October 30, 2022, total remaining unearned compensation related to TSR performance restricted stock units was $ 25 million, which will be amortized over the weighted-average remaining service period of 2.0 years.

In the first quarter of 2023, recipients of TSR performance restricted stock units earned 100 % of the initial grants based upon our TSR ranking in a performance peer group during a three-year period ended July 29, 2022.

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.

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 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.

The fair value of TSR performance restricted stock units vested during the three-month periods ended October 30, 2022, and October 31, 2021, was $ 21 million and $ 8 million, respectively.

The grant-date fair value of the TSR performance restricted stock units granted during three-month period ended October 31, 2021, was $ 45.65 .

The tax benefits on the exercise of stock options in the three-month periods ended October 30, 2022, and October 31, 2021 were not material.

Cash received from the exercise of stock options was $ 2 million and $ 1 million for the three-month periods ended October 30, 2022, and October 31, 2021, respectively, and is reflected in cash flows from financing activities in the Consolidated Statements of Cash Flows.

Commitments and Contingencies

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On January 15, 2021, the plaintiff filed its second amended consolidated complaint.

The second amended consolidated complaint again names as defendants the company and certain of its former officers and alleges that, in public statements between August 31, 2017 and May 17, 2018, the defendants made materially false and misleading statements and/or omitted material information about the company's business, operations, customer relationships, and prospects, specifically with regard to the Campbell Fresh segment.

The second amended consolidated complaint seeks unspecified monetary damages and other relief.

On March 10, 2021 the defendants filed a motion to dismiss the second amended consolidated complaint.

We are vigorously defending against the Action.

On October 11, 2022, the Court granted the defendants’ motion to dismiss the second amended consolidated complaint with prejudice.

The plaintiff did not appeal the Court's order dismissing the second amended consolidated complaint with prejudice, bringing this matter to a conclusion.

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 1, 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 October 30, 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.

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Certain indemnifications have finite expiration dates.

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

Liabilities recognized based on known exposures related to such matters were not material at October 30, 2022.

Supplemental Financial Statement Data

(Millions) May 1, 2022 August 1, 2021

(Millions) October 30, 2022 July 31,

Balance Sheets

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$ 1,361 $ 1,246

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 30, 2022 October 31, 2021

Statements of Earnings

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Net periodic benefit expense (income) other than the service cost 7 ( 13 )

Transition services fees — ( 8 ) — ( 20 )

Other ( 1 ) 1 2 4

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

Subsequent Event

On November 15, 2022, we entered into a delayed draw term loan credit agreement (the DDTL Credit Agreement) totaling up to $ 500 million scheduled to mature on November 15, 2025.

Loans under the DDTL Credit Agreement will bear interest at the rates specified in the DDTL Credit Agreement, which vary based on the type of loan and certain other conditions.

The DDTL Credit Agreement contains customary representations and warranties, affirmative and negative covenants, including a financial covenant with respect to a minimum consolidated interest coverage ratio of consolidated adjusted EBITDA to consolidated interest expense (as each is defined in the DDTL Credit Agreement) of not less than 3.25:1.00 , and events of default for credit facilities of this type.

We anticipate using any of the proceeds of the loans under the DDTL Credit Agreement to refinance our existing $ 566 million Notes with a maturity date of March 15, 2023 .

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