What changed in this filing

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Item 1. Financial Statements

2023-06-07 compared with 2023-03-08 · 146 added, 134 removed, 639 unchanged (30% of the section changed)

3 unchanged sentences

(millions, except per share amounts)

Three Months Ended Six Months Ended

January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022

Three Months Ended Nine Months Ended

April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022

Net sales $ 2,229 $ 2,130 $ 7,289 $ 6,575

25 unchanged sentences

Three Months Ended

January 29, 2023 January 30, 2022

April 30, 2023 May 1, 2022

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 $ 158 $ 190

Six Months Ended

January 29, 2023 January 30, 2022

Nine Months Ended

April 30, 2023 May 1, 2022

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 29, 2023 July 31, 2022

April 30, 2023 July 31, 2022

Current assets

38 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended

January 29, 2023 January 30, 2022

Nine Months Ended

April 30, 2023 May 1, 2022

Cash flows from operating activities:

21 unchanged sentences

Short-term repayments, including commercial paper ( 2,473 ) ( 700 )

Long-term borrowings 500 —

Long-term repayments ( 566 ) —

Dividends paid ( 336 ) ( 340 )

2 unchanged sentences

Payments related to tax withholding for stock-based compensation ( 19 ) ( 18 )

Payments related to extinguishment of debt — ( 453 )

Other ( 1 ) —

Net cash used in financing activities ( 535 ) ( 805 )

14 unchanged sentences

Shares Amount Shares Amount

Balance at October 31, 2021

Balance at January 30, 2022

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

5 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

7 unchanged sentences

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

Balance at May 1, 2022 323 $ 12 ( 23 ) $ ( 1,088 ) $ 402 $ 4,059 $ 8 $ 2 $ 3,395

Balance at January 29, 2023

Balance at October 30, 2022

323 $ 12 ( 24 ) $ ( 1,144 ) $ 391 $ 4,344 $ ( 4 ) $ 2 $ 3,601

5 unchanged sentences

Treasury stock issued under management incentive and stock option plans 1 — 16 — 16

Balance at January 29, 2023

Balance at April 30, 2023

323 $ 12 ( 25 ) $ ( 1,219 ) $ 407 $ 4,392 $ ( 6 ) $ 2 $ 3,588

7 unchanged sentences

Treasury stock issued under management incentive and stock option plans 2 60 ( 8 ) — 52

Balance at January 29, 2023

Balance at April 30, 2023

323 $ 12 ( 25 ) $ ( 1,219 ) $ 407 $ 4,392 $ ( 6 ) $ 2 $ 3,588

24 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

5 unchanged sentences

Net current-period other comprehensive income (loss) ( 7 ) ( 1 ) — ( 8 )

Balance at January 29, 2023

Balance at April 30, 2023

$ ( 7 ) $ ( 1 ) $ 2 $ ( 6 )

_____________________________________

(1) Included no tax as of January 29, 2023, July 31, 2022, January 30, 2022 and August 1, 2021.

(2) Included no tax as of January 29, 2023 and July 31, 2022, tax expense of $ 1 million as of January 30, 2022, and a tax benefit of $ 1 million as of August 1, 2021.

(3) Included tax expense of $ 1 million as of January 29, 2023, July 31, 2022, January 30, 2022, and August 1, 2021.

(1) Included no tax as of April 30, 2023, July 31, 2022, May 1, 2022 and August 1, 2021.

(2) Included no tax as of April 30, 2023 and July 31, 2022, tax expense of $ 2 million as of May 1, 2022, and a tax benefit of $ 1 million as of August 1, 2021.

(3) Included tax expense of $ 1 million as of April 30, 2023, July 31, 2022, May 1, 2022, 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 Six Months Ended

(Millions) January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022 Location of Loss (Gain) Recognized in Earnings

Three Months Ended Nine Months Ended

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022 Location of Loss (Gain) Recognized in Earnings

Losses (gains) on cash-flow hedges:

14 unchanged sentences

Foreign currency translation adjustment ( 6 ) — ( 6 )

Net balance at January 29, 2023

Net balance at April 30, 2023

$ 987 $ 2,986 $ 3,973

1 unchanged sentence

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

January 29, 2023 July 31, 2022

April 30, 2023 July 31, 2022

(Millions) Cost Accumulated Amortization Net Cost Accumulated Amortization Net

12 unchanged sentences

(Snyder's-Lance).

Amortization of intangible assets was $ 21 million for both the six-month periods ended January 29, 2023 and January 30, 2022.

As of January 29, 2023, amortizable intangible assets had a weighted-average remaining useful life of 16 years.

Amortization of intangible assets was $ 31 million for both the nine-month periods ended April 30, 2023 and May 1, 2022.

As of April 30, 2023, 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.

17 unchanged sentences

The segment also includes snacking products in foodservice and Canada;

• 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.

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

The segment included the results of our Emerald nuts business, which was sold on May 30, 2023.

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 Six Months Ended

(Millions) January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022

Three Months Ended Nine Months Ended

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022

Meals & Beverages $ 1,108 $ 1,131 $ 3,971 $ 3,672

1 unchanged sentence

Total $ 2,229 $ 2,130 $ 7,289 $ 6,575

Three Months Ended Six Months Ended

(Millions) January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022

Three Months Ended Nine Months Ended

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022

Earnings before interest and taxes

8 unchanged sentences

(1) Represents unallocated items.

There were pension actuarial gains of $ 6 million and losses of $ 9 million in the three- and six-month periods ended January 29, 2023, and pension actuarial gains of $ 10 million and $ 4 million in the three- and six-month periods ended January 30, 2022, respectively.

Costs related to the cost savings initiatives were $ 5 million and $ 8 million in the three- and six-month periods ended January 29, 2023, and $ 5 million and $ 9 million in the three- and six-month periods ended January 30, 2022, respectively.

Unrealized mark-to-market adjustments on outstanding undesignated

commodity hedges were losses of $ 4 million in the three-month period ended January 29, 2023, and losses of $ 3 million in the six-month period ended January 30, 2022.

There were pension actuarial losses of $ 17 million and $ 26 million in the three- and nine-month periods ended April 30, 2023, and pension actuarial losses of $ 16 million and $ 12 million in the three- and nine-month periods ended May 1, 2022, respectively.

Costs related to the cost savings initiatives were $ 27 million and $ 35 million in the three- and nine-month periods ended April 30, 2023, and $ 6 million and $ 15 million in the three- and nine-month periods ended May 1, 2022, respectively.

Unrealized mark-to-market adjustments on outstanding undesignated commodity hedges were losses of $ 9 million in the three- and nine-month periods ended April 30, 2023, and losses of $ 5 million and $ 8 million in the three- and nine-month periods ended May 1, 2022, 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 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022

Three Months Ended Nine Months Ended

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022

Soup $ 571 $ 606 $ 2,316 $ 2,187

19 unchanged sentences

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

Three Months Ended Six Months Ended

(Millions) January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022 Recognized as of January 29, 2023

Three Months Ended Nine Months Ended

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022 Recognized as of April 30, 2023

Restructuring charges $ 6 $ — $ 15 $ — $ 279

5 unchanged sentences

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

(Millions) Recognized as of January 29, 2023

(Millions) Recognized as of April 30, 2023

Severance pay and benefits

6 unchanged sentences

approximately $ 140 million in asset impairment and accelerated depreciation;

and approximately $ 485 million to $ 500 million in implementation costs and other related costs.

approximately $ 495 million to $ 510 million in implementation costs and other related costs.

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

3 unchanged sentences

Of the aggregate $ 880 million to $ 900 million of pre-tax costs identified to date, we expect approximately $ 700 million to $ 720 million will be cash expenditures.

In addition, we expect to invest approximately $ 600 million in capital expenditures through 2025, of which we invested $ 441 million as of January 29, 2023.

In addition, we expect to invest approximately $ 620 million in capital expenditures through 2025, of which we invested $ 455 million as of April 30, 2023.

The capital expenditures primarily relate to optimization of production within our Meals & Beverages manufacturing network, a U.S.

warehouse optimization project, improvement of quality, safety and cost structure across the Snyder’s-Lance manufacturing network, implementation of our existing SAP enterprise-resource planning system for Snyder's-Lance, enhancements to our headquarters in Camden, New Jersey, 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 January 29, 2023, is as follows:

warehouse optimization project, improvement of quality, safety and cost structure across the Snyder’s-Lance manufacturing network, optimization of information technology infrastructure and applications, implementation of our existing SAP enterprise-resource planning system for Snyder's-Lance, enhancements to our headquarters in Camden, New Jersey, and optimization of the Snyder’s-Lance warehouse and distribution network.

A summary of the restructuring activity and related reserves at April 30, 2023, is as follows:

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

Asset Impairment/Accelerated Depreciation Other Non-Cash Exit Costs (3)

Total Charges

Accrued balance at July 31, 2022

12 18 17 3 $ 50

2023 cash payments

Accrued balance at January 29, 2023 (1)

Accrued balance at April 30, 2023 (1)

__________________________________

1 unchanged sentence

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

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

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

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

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

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

January 29, 2023

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

April 30, 2023

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

Meals & Beverages $ 19 $ 19 $ 244

4 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 29, 2023, excludes less than 1 million stock options that would have been antidilutive.

The earnings per share calculation for the three- and six-month periods ended January 30, 2022, excludes approximately 1 million stock options that would have been antidilutive.

The earnings per share calculation for the three- and nine-month periods ended April 30, 2023, excludes less than 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, 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

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

Three Months Ended Nine Months Ended

Pension Postretirement Pension Postretirement

(Millions) January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022

Service cost $ 3 $ 3 $ — $ — $ 10 $ 12 $ — $ —

4 unchanged sentences

Net periodic benefit expense (income) $ 15 $ 3 $ 2 $ 1 $ 15 $ ( 33 ) $ 5 $ 2

The actuarial gains and losses resulted from the remeasurement of pension plans 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-month period ended January 29, 2023 were primarily due to increases in discount rates used to determine the benefit obligation, partially offset by losses on plan assets.

The actuarial losses recognized for the six-month period ended January 29, 2023 were primarily due to losses on plan assets, partially offset by increases in discount rates used to determine the benefit obligation.

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

The actuarial losses resulted from the remeasurement of pension plans 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-month period ended April 30, 2023 were primarily due to decreases in discount rates used to determine the benefit obligation and plan experience, partially offset by gains on plan assets.

The actuarial losses recognized for the nine-month period ended April 30, 2023 were primarily due to losses on plan assets and plan experience, partially offset by increases in discount rates used to determine the benefit obligation.

The actuarial losses recognized for the three- and nine-month periods ended May 1, 2022 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 Six Months Ended

(Millions) January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022

Three Months Ended Nine Months Ended

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022

Operating lease cost $ 23 $ 19 $ 63 $ 58

8 unchanged sentences

Operating Leases

(Millions) Balance Sheet Classification January 29, 2023 July 31, 2022

(Millions) Balance Sheet Classification April 30, 2023 July 31, 2022

ROU assets, net Other assets $ 284 $ 239

2 unchanged sentences

Finance Leases

(Millions) Balance Sheet Classification January 29, 2023 July 31, 2022

(Millions) Balance Sheet Classification April 30, 2023 July 31, 2022

ROU assets, net Plant assets, net of depreciation $ 26 $ 28

2 unchanged sentences

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

Six Months Ended

(Millions) January 29, 2023 January 30, 2022

Nine Months Ended

(Millions) April 30, 2023 May 1, 2022

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

6 unchanged sentences

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.

Loans under the DDTL Credit Agreement 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 $ 500 million 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 .

We borrowed $ 500 million under the DDTL Credit Agreement on March 13, 2023, and used the proceeds and cash on hand to repay the 3.65 % $ 566 million Notes that matured on March 15, 2023 .

On April 4, 2023, we entered into an amendment to our existing revolving credit facility to replace remaining LIBOR-based benchmark rates applicable to borrowings under the revolving credit facility with SOFR-based benchmark rates, in advance of the cessation of LIBOR occurring on June 30, 2023.

Financial Instruments

8 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 29, 2023, or July 31, 2022.

We did not have credit risk-related contingent features in our derivative instruments as of April 30, 2023, or July 31, 2022.

We are also exposed to credit risk from our customers.

7 unchanged sentences

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 $ 128 million as of January 29, 2023, and $ 140 million as of July 31, 2022.

The notional amount of foreign exchange forward contracts accounted for as cash-flow hedges was $ 139 million as of April 30, 2023, 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.

For derivatives that are designated and qualify as hedging instruments, the initial fair value of hedge components excluded from the assessment of effectiveness is recognized in earnings under a systematic and rational method over the life of the hedging instrument and is presented in the same statement of earnings line item as the earnings effect of the hedged item.

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

The notional amount of foreign exchange forward contracts that are not designated as accounting hedges was $ 17 million as of January 29, 2023, and $ 13 million as of July 31, 2022.

earnings effect of the hedged item.

The notional amount of foreign exchange forward contracts that are not designated as accounting hedges was $ 18 million as of April 30, 2023, 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 outstanding as of January 29, 2023, or July 31, 2022.

There were no interest rate swaps outstanding as of April 30, 2023, or July 31, 2022.

Commodity Price Risk

4 unchanged sentences

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 January 29, 2023.

There were no commodity contracts designated as cash-flow hedges as of April 30, 2023.

The notional amount of commodity contracts not designated as accounting hedges was $ 246 million as of January 29, 2023, and $ 254 million as of July 31, 2022.

The notional amount of commodity contracts not designated as accounting hedges was $ 250 million as of April 30, 2023, and $ 254 million as of July 31, 2022.

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 $ 106 million as of January 29, 2023, and $ 39 million as of July 31, 2022.

The notional amount was $ 77 million as of April 30, 2023, and $ 39 million as of July 31, 2022.

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

4 unchanged sentences

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

The notional amounts of the contracts were $ 50 million as of January 29, 2023, 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 January 29, 2023, and July 31, 2022:

(Millions) Balance Sheet Classification January 29, 2023 July 31, 2022

The notional amounts of the contracts were $ 42 million as of April 30, 2023, and $ 50 million as of 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 April 30, 2023, and July 31, 2022:

(Millions) Balance Sheet Classification April 30, 2023 July 31, 2022

Asset Derivatives

8 unchanged sentences

Total asset derivatives $ 8 $ 25

(Millions) Balance Sheet Classification January 29, 2023 July 31, 2022

(Millions) Balance Sheet Classification April 30, 2023 July 31, 2022

Liability Derivatives

Derivatives designated as hedges:

Foreign exchange forward contracts Accrued liabilities $ 1 $ —

Total derivatives designated as hedges $ 1 $ —

Derivatives not designated as hedges:

4 unchanged sentences

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 29, 2023, and July 31, 2022, would be adjusted as detailed in the following table:

January 29, 2023 July 31, 2022

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 April 30, 2023, and July 31, 2022, would be adjusted as detailed in the following table:

April 30, 2023 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

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 asset balances of $ 17 million at January 29, 2023, and $ 8 million at July 31, 2022, were included in Other current assets 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 29, 2023, and January 30, 2022, in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

Cash margin asset balances of $ 24 million at April 30, 2023, and $ 8 million at July 31, 2022, were included in Other current assets 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 April 30, 2023, and May 1, 2022, in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

Total Cash-Flow Hedge

(Millions) January 29, 2023 January 30, 2022

(Millions) April 30, 2023 May 1, 2022

Three Months Ended

7 unchanged sentences

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

Forward starting interest rate swaps Interest expense 1 1

OCI derivative gain (loss) at end of quarter $ ( 1 ) $ 8

Six Months Ended

Nine Months Ended

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

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 $ 2 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 29, 2023, and January 30, 2022, 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:

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 April 30, 2023, and May 1, 2022, 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

January 29, 2023 January 30, 2022

April 30, 2023 May 1, 2022

(Millions) Cost of products sold Interest

4 unchanged sentences

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

Six Months Ended

January 29, 2023 January 30, 2022

Nine Months Ended

April 30, 2023 May 1, 2022

(Millions) Cost of products sold Interest

6 unchanged sentences

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 Six Months Ended

(Millions) January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022

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

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022

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

12 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 29, 2023, and July 31, 2022, consistent with the fair value hierarchy:

January 29, 2023

The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis as of April 30, 2023, and July 31, 2022, consistent with the fair value hierarchy:

April 30, 2023

Fair Value Measurements at

January 29, 2023 Using

April 30, 2023 Using

Fair Value Hierarchy

13 unchanged sentences

Total assets at fair value $ 9 $ 1 $ 4 $ 4 $ 27 $ 2 $ 21 $ 4

January 29, 2023

April 30, 2023

Fair Value Measurements at

January 29, 2023 Using

April 30, 2023 Using

Fair Value Hierarchy

4 unchanged sentences

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

Foreign exchange forward contracts (1)

$ 1 $ — $ 1 $ — $ — $ — $ — $ —

Commodity derivative contracts (2)

11 unchanged sentences

(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 29, 2023, and January 30, 2022:

Six Months Ended

(Millions) January 29, 2023 January 30, 2022

The following table summarizes the changes in fair value of Level 3 assets and liabilities for the nine-month periods ended April 30, 2023, and May 1, 2022:

Nine Months Ended

(Millions) April 30, 2023 May 1, 2022

Fair value at beginning of year $ 4 $ 1

4 unchanged sentences

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

There were $ 26 million of cash equivalents at January 29, 2023, and $ 27 million at July 31, 2022.

There were $ 9 million of cash equivalents at April 30, 2023, 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 $ 4.29 billion at January 29, 2023, and $ 4.637 billion at July 31, 2022.

The carrying value was $ 4.57 billion at January 29, 2023, and $ 4.81 billion at July 31, 2022.

The fair value of short- and long-term debt was $ 4.459 billion at April 30, 2023, and $ 4.637 billion at July 31, 2022.

The carrying value was $ 4.759 billion at April 30, 2023, 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.

6 unchanged sentences

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

During the six-month period ended January 29, 2023, we repurchased 1.298 million shares at a cost of $ 66 million pursuant to our June 2021 program.

As of January 29, 2023, approximately $ 106 million remained available under the June 2021 program and approximately $ 375 million remained available under the September 2021 program.

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 April 30, 2023, we repurchased 2.692 million shares at a cost of $ 141 million.

Of this amount, $ 67 million was used to repurchase shares pursuant to our June 2021 program and $ 74 million was used to repurchase shares pursuant to our September 2021 program.

As of April 30, 2023, approximately $ 104 million remained available under the June 2021 program and approximately $ 301 million remained available under the September 2021 program.

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

Stock-based Compensation

4 unchanged sentences

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

Three Months Ended Six Months Ended

(Millions) January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022

Three Months Ended Nine Months Ended

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022

Total pre-tax stock-based compensation expense $ 17 $ 15 $ 48 $ 46

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

The following table summarizes stock option activity as of January 29, 2023:

The following table summarizes stock option activity as of April 30, 2023:

Options Weighted-

7 unchanged sentences

Terminated — $ —

Outstanding at January 29, 2023

Outstanding at April 30, 2023

833 $ 44.77 4.5 $ 8

Exercisable at January 29, 2023

Exercisable at April 30, 2023

833 $ 44.77 4.5 $ 8

The total intrinsic value of options exercised during the six-month period ended January 29, 2023 was $ 3 million.

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

The total intrinsic value of options exercised during the nine-month period ended April 30, 2023 was $ 3 million.

The total intrinsic value of options exercised during the nine-month period ended May 1, 2022 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 and EPS performance restricted stock units as of January 29, 2023:

The following table summarizes time-lapse restricted stock units and EPS performance restricted stock units as of April 30, 2023:

Units Weighted-Average Grant-Date Fair Value

6 unchanged sentences

Forfeited ( 111 ) $ 44.91

Nonvested at January 29, 2023

Nonvested at April 30, 2023

2,270 $ 45.31

6 unchanged sentences

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

There were 564 thousand EPS performance target grants outstanding at January 29, 2023, with a weighted-average grant-date fair value of $ 44.33 .

There were 563 thousand EPS performance target grants outstanding at April 30, 2023, with a weighted-average grant-date fair value of $ 44.33 .

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 29, 2023, total remaining unearned compensation related to nonvested time-lapse restricted stock units and EPS performance restricted stock units was $ 60 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 six-month periods ended January 29, 2023, and January 30, 2022, was $ 35 million and $ 49 million, respectively.

The weighted-average grant-date fair value of the restricted stock units granted during the six-month period ended January 30, 2022 was $ 41.79 .

The following table summarizes TSR performance restricted stock units as of January 29, 2023:

As of April 30, 2023, total remaining unearned compensation related to nonvested time-lapse restricted stock units and EPS performance restricted stock units was $ 51 million, which will be amortized over the weighted-average remaining service period of 1.8 years.

The fair value of restricted stock units vested during the nine-month periods ended April 30, 2023, and May 1, 2022, was $ 36 million and $ 50 million, respectively.

The weighted-average grant-date fair value of the restricted stock units granted during the nine-month period ended May 1, 2022 was $ 41.94 .

The following table summarizes TSR performance restricted stock units as of April 30, 2023:

Units Weighted-Average Grant-Date Fair Value

6 unchanged sentences

Forfeited ( 54 ) $ 51.69

Nonvested at January 29, 2023

Nonvested at April 30, 2023

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

5 unchanged sentences

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

As of January 29, 2023, 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 1.8 years.

As of April 30, 2023, total remaining unearned compensation related to TSR performance restricted stock units was $ 16 million, which will be amortized over the weighted-average remaining service period of 1.7 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 six-month periods ended January 29, 2023, and January 30, 2022, was $ 21 million and $ 8 million, respectively.

The weighted-average grant-date fair value of the TSR performance restricted stock units granted during the six-month period ended January 30, 2022, was $ 45.54 .

The tax benefits on the exercise of stock options in the six-month period ended January 29, 2023 were $ 1 million.

The tax benefits on the exercise of stock options in the six-month period ended January 30, 2022 were not material.

Cash received from the exercise of stock options was $ 22 million and $ 1 million for the six-month periods ended January 29, 2023, and January 30, 2022, 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 nine-month periods ended April 30, 2023, and May 1, 2022, was $ 21 million and $ 8 million, respectively.

The weighted-average grant-date fair value of the TSR performance restricted stock units granted during the nine-month period ended May 1, 2022, was $ 45.54 .

The tax benefits on the exercise of stock options in the nine-month period ended April 30, 2023 were $ 1 million.

The tax benefits on the exercise of stock options in the nine-month period ended May 1, 2022 were not material.

Cash received from the exercise of stock options was $ 22 million and $ 1 million for the nine-month periods ended April 30, 2023, and May 1, 2022, respectively, and is reflected in cash flows from financing activities in the Consolidated Statements of Cash Flows.

Commitments and Contingencies

11 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 29, 2023.

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 April 30, 2023.

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 29, 2023.

Liabilities recognized based on known exposures related to such matters were not material at April 30, 2023.

Supplemental Financial Statement Data

(Millions) January 29, 2023 July 31,

(Millions) April 30, 2023 July 31, 2022

Balance Sheets

2 unchanged sentences

$ 1,280 $ 1,246

Three Months Ended Six Months Ended

(Millions) January 29, 2023 January 30, 2022 January 29, 2023 January 30, 2022

Three Months Ended Nine Months Ended

(Millions) April 30, 2023 May 1, 2022 April 30, 2023 May 1, 2022

Statements of Earnings

4 unchanged sentences

$ 23 $ 10 $ 41 $ ( 10 )

Subsequent Event

On May 30, 2023, we sold our Emerald nuts business for $ 40 million, subject to certain post-closing adjustments.

We expect to recognize an after-tax loss on the sale of approximately $ 15 million as the carrying value of the disposal group will include allocated goodwill.

In connection with the sale, we will provide certain transition services to support the business.

The business had net sales of $ 16 million and $ 46 million for the three- and nine-month periods ended April 30, 2023, and $ 17 million and $ 49 million for the three- and nine-month periods ended May 1, 2022, respectively.

The business had net sales of $ 66 million for the year ended July 31, 2022.

Earnings were not material in the periods.

The results of the business through the date of sale are reflected within the Snacks reportable segment.

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