What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-09-21 compared with 2022-09-22 · 229 added, 297 removed, 1243 unchanged (30% of the section changed)

18 unchanged sentences

Financial Instruments

Variable Interest Entity

Fair Value Measurements

3 unchanged sentences

Supplemental Financial Statement Data

Subsequent Event

Management’s Report on Internal Control Over Financial Reporting

4 unchanged sentences

2023 2022 2021

52 weeks 52 weeks 53 weeks

Net sales $ 9,357 $ 8,562 $ 8,476

13 unchanged sentences

Earnings from continuing operations 858 757 1,008

Earnings (loss) from discontinued operations — ( 6 ) 1,036

Loss from discontinued operations — — ( 6 )

Net earnings 858 757 1,002

3 unchanged sentences

Earnings from continuing operations attributable to Campbell Soup Company $ 2.87 $ 2.51 $ 3.33

Earnings (loss) from discontinued operations — ( .02 ) 3.43

Loss from discontinued operations — — ( .02 )

Net earnings attributable to Campbell Soup Company $ 2.87 $ 2.51 $ 3.31

2 unchanged sentences

Earnings from continuing operations attributable to Campbell Soup Company $ 2.85 $ 2.51 $ 3.30

Earnings (loss) from discontinued operations — ( .02 ) 3.41

Loss from discontinued operations — — ( .02 )

Net earnings attributable to Campbell Soup Company (1)

6 unchanged sentences

2023 2022 2021

52 weeks 52 weeks 53 weeks

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

3 unchanged sentences

Foreign currency translation adjustments $ ( 1 ) $ — ( 1 ) $ ( 6 ) $ — ( 6 ) $ 12 $ — 12

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

Cash-flow hedges:

Unrealized gains (losses) arising during period 17 ( 3 ) 14 ( 5 ) 1 ( 4 ) 3 ( 1 ) 2

Unrealized gains (losses) arising during the period 5 ( 1 ) 4 17 ( 3 ) 14 ( 5 ) 1 ( 4 )

Reclassification adjustment for losses (gains) included in net earnings ( 10 ) 2 ( 8 ) ( 12 ) 2 ( 10 ) 8 ( 1 ) 7

9 unchanged sentences

(millions, except per share amounts)

2022 August 1,

2023 July 31,

Current assets

11 unchanged sentences

Short-term borrowings $ 191 $ 814

Payable to suppliers and others 1,334 1,070

Accounts payable 1,306 1,334

Accrued liabilities 592 621

25 unchanged sentences

2023 2022 2021

52 weeks 52 weeks 53 weeks

Cash flows from operating activities:

6 unchanged sentences

Deferred income taxes ( 5 ) 21 137

Net loss (gain) on sales of businesses — 11 ( 975 )

Net loss on sales of businesses 13 — 11

Loss on extinguishment of debt — 4 —

Investment losses — — 49

Other 100 88 86

10 unchanged sentences

Sales of route businesses 1 2 10

Sales of businesses, net of cash divested — 101 2,537

Proceeds from sale of investment — — 30

Net cash provided by (used in) investing activities ( 230 ) ( 158 ) 2,272

Sales of businesses 41 — 101

Net cash used in investing activities ( 340 ) ( 230 ) ( 158 )

Cash flows from financing activities:

Short-term borrowings, including commercial paper and revolving line of credit 1,173 320 5,617

Short-term repayments, including commercial paper and revolving line of credit ( 997 ) ( 580 ) ( 6,909 )

Short-term borrowings, including commercial paper 3,677 1,173 320

Short-term repayments, including commercial paper ( 3,749 ) ( 997 ) ( 580 )

Long-term borrowings 500 — —

5 unchanged sentences

Payments related to extinguishment of debt — ( 453 ) —

Payments of debt issuance costs — — ( 12 )

Net cash used in financing activities ( 723 ) ( 910 ) ( 1,669 )

15 unchanged sentences

Shares Amount Shares Amount

Balance at July 28, 2019

Balance at August 2, 2020

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

Net earnings (loss) 1,002 — 1,002

Divestiture ( 4 ) ( 4 )

Other comprehensive income (loss) 15 ( 4 ) 11

11 unchanged sentences

Treasury stock issued under management incentive and stock option plans 1 50 1 ( 8 ) 43

Balance at August 1, 2021

Balance at July 31, 2022

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

12 unchanged sentences

We are a manufacturer and marketer of high-quality, branded food and beverage products.

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

Basis of Presentation — The consolidated financial statements include our accounts and entities in which we maintain a controlling financial interest.

Intercompany transactions are eliminated in consolidation.

Our fiscal year ends on the Sunday nearest July 31.

There were 52 weeks in 2022 and 2021, and 53 weeks in 2020.

There were 52 weeks in 2023, 2022, and 2021.

Discontinued Operations — We present discontinued operations when there is a disposal of a component or a group of components that in our judgment represents a strategic shift that will have a major effect on our operations and financial results.

23 unchanged sentences

Repairs and maintenance are charged to expense as incurred.

Goodwill and Intangible Assets — Goodwill and intangible assets deemed to have indefinite lives are not amortized but rather are tested at least annually in the fourth quarter for impairment, or more often if events or changes in circumstances indicate that more likely than not the carrying amount of the asset may not be recoverable.

Goodwill is tested for impairment at the reporting unit level.

13 unchanged sentences

Leases — We determine if an agreement is or contains a lease at inception by evaluating if an identified asset exists that we control for a period of time.

When a lease exists, we record a right-of-use (ROU) asset and a corresponding lease liability on our Consolidated Balance Sheet.

When a lease exists, we record a right-of-use (ROU) asset and a corresponding lease liability on our Consolidated Balance Sheets.

ROU assets represent our right to use an underlying asset for the lease term and the corresponding liabilities represent an obligation to make lease payments during the term.

We have elected not to record leases with a term of 12 months or less on our Consolidated Balance Sheet.

ROU assets are recorded on our Consolidated Balance Sheet at lease commencement based on the present value of the corresponding liabilities and are adjusted for any prepayments, lease incentives received, or initial direct costs incurred.

We have elected not to record leases with a term of 12 months or less on our Consolidated Balance Sheets.

ROU assets are recorded on our Consolidated Balance Sheets at lease commencement based on the present value of the corresponding liabilities and are adjusted for any prepayments, lease incentives received, or initial direct costs incurred.

To calculate the present value of our lease liabilities, we use a country-specific collateralized incremental borrowing rate based on the lease term at commencement.

25 unchanged sentences

Cash flows from derivative contracts are included in Net cash provided by operating activities.

Supplier Finance Program Obligations — To manage our cash flow and related liquidity, we work with our suppliers to optimize our terms and conditions, including the extension of payment terms.

Our current payment terms with our suppliers, which we deem to be commercially reasonable, generally range from 0 to 120 days.

We also maintain agreements with third-party administrators that allow participating suppliers to track payment obligations from us, and, at the sole discretion of the supplier, sell those payment obligations to participating financial institutions.

Our obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted.

Supplier participation in these agreements is voluntary.

We have no economic interest in a supplier’s decision to enter into these agreements and no direct financial relationship with the financial institutions.

We have not pledged assets as security or provided any guarantees in connection with these arrangements.

The payment of these obligations is included in cash provided by operating activities in the Consolidated Statements of Cash Flows.

Amounts outstanding under these programs, which are included in Accounts payable on the Consolidated Balance Sheets, were $ 258 million at July 30, 2023, and $ 262 million at July 31, 2022.

Advertising Production Costs — Advertising production costs are expensed in the period that the advertisement first takes place or when a decision is made not to use an advertisement.

8 unchanged sentences

Recently Adopted

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

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

We adopted the guidance in the first quarter of 2021.

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

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

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

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

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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.

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

In September 2022, the 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 adopted the guidance in the fourth quarter of 2023, with the exception of the rollforward information.

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

Discontinued Operations

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

We also completed the sale of our Arnott’s business and certain other international operations, including the simple meals and shelf-stable beverages businesses in Australia and Asia Pacific (the Arnott's and other international operations), on December 23, 2019, for $ 2.286 billion.

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

Beginning in the fourth quarter of 2019, we have reflected the results of operations of the Kelsen business and the Arnott’s and other international operations (collectively referred to as Campbell International) as discontinued operations in the Consolidated Statements of Earnings for all periods presented.

These businesses were historically included in the Snacks reportable segment.

Results of discontinued operations were as follows:

(Millions) 2020

Net sales $ 359

Earnings before taxes from operations $ 53

Taxes on earnings from operations 17

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

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

Earnings from discontinued operations $ 1,036

In addition, in the third quarter of 2021, we recognized a $ 6 million loss due to tax expense from return-to-provision adjustments related to the sale of Campbell International.

The sale of the Arnott's and other international operations resulted in a substantial capital gain for tax purposes.

We were able to utilize capital losses in 2020, which were offset with valuation allowances as of July 28, 2019, to offset the capital gain.

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

We completed the sale of our Kelsen business on September 23, 2019, and the sale of our Arnott’s business and certain other international operations on December 23, 2019.

In the third quarter of 2021, we recognized a $ 6 million loss due to tax expense from return-to-provision adjustments related to the sale of these businesses.

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

We provided certain transition services to support the divested businesses.

The significant operating non-cash items, capital expenditures and sale proceeds of discontinued operations were as follows:

(Millions) 2020

Cash flows from discontinued operating activities:

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

Cash flows from discontinued investing activities:

Capital expenditures $ 30

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

Other Divestitures

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

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

For tax purposes, we were able to use the capital loss on this sale to offset a portion of the capital gain from the sale of the Arnott's and other international operations.

The after-tax loss was $ 37 million .

The European chips business had net sales of $ 25 million in 2020.

Earnings from the business were not material.

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

On May 30, 2023, we completed the sale of our Emerald nuts business for $ 41 million.

We recognized a pre- and after-tax loss on the sale of $ 13 million.

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

The business had net sales of $ 51 million in 2023, $ 66 million in 2022, and $ 75 million in 2021.

Earnings were not material in the periods.

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

On May 3, 2021, we completed the sale of our Plum baby food and snacks business for $ 101 million.

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

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

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

We recognized a pre-tax loss of $ 11 million and an after-tax gain on the sale of $ 3 million.

The business had net sales of $ 68 million in 2021 and $ 104 million in 2020.

Earnings were not material in the periods.

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

The business had net sales of $ 68 million in 2021.

Earnings were not material.

The results of the business through the date of sale were reflected within the Meals & Beverages reportable segment.

Accumulated Other Comprehensive Income (Loss)

4 unchanged sentences

Total Accumulated Comprehensive Income (Loss)

Balance at July 28, 2019

Balance at August 2, 2020

$ ( 10 ) $ ( 7 ) $ 7 $ ( 10 )

1 unchanged sentence

Losses (gains) reclassified from accumulated other comprehensive income (loss) — 7 ( 4 ) 3

210 — ( 22 ) 188

Net current-period other comprehensive income (loss) 16 3 ( 4 ) 15

4 unchanged sentences

Net current-period other comprehensive income (loss) ( 6 ) 4 ( 1 ) ( 3 )

Balance at August 1, 2021

Balance at July 31, 2022

$ — $ — $ 2 $ 2

6 unchanged sentences

_____________________________________

(1) Included no tax as of July 31, 2022, August 1, 2021, and August 2, 2020, and a tax expense of $ 4 million as of July 28, 2019.

(2) Included no tax as of July 31, 2022, and a tax benefit of $ 1 million as of August 1, 2021 and August 2, 2020, and $ 2 million as of July 28, 2019.

(3) Included a tax expense of $ 1 million as of July 31, 2022 and August 1, 2021, $ 2 million as of August 2, 2020, and $ 8 million as of July 28, 2019.

(4) Reflects the reclassification from sale of businesses.

See Note 3 for additional information.

(1) Included no tax as of July 30, 2023, July 31, 2022, August 1, 2021, and August 2, 2020.

(2) Included a tax benefit of $ 1 million as of July 30, 2023, no tax as of July 31, 2022, and a tax benefit of $ 1 million as of August 1, 2021 and August 2, 2020.

(3) Included tax expense of $ 1 million as of as of July 30, 2023, July 31, 2022 and August 1, 2021, and $ 2 million as of August 2, 2020.

Amounts related to noncontrolling interests were not material.

1 unchanged sentence

(Millions) 2023 2022 2021 Location of Loss (Gain) Recognized in Earnings

Foreign currency translation adjustments:

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

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

Total before tax — — 206

Tax expense (benefit) — — 4

Loss (gain), net of tax $ — $ — $ 210

Losses (gains) on cash-flow hedges:

2 unchanged sentences

Foreign exchange forward contracts — — 1 Other expenses / (income)

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

Forward starting interest rate swaps 1 1 1 Interest expense

11 unchanged sentences

$ 970 $ 3,011 $ 3,981

Divestiture (1)

( 12 ) — ( 12 )

Amounts reclassified due to segment change (1)

Foreign currency translation adjustment ( 2 ) — ( 2 )

Net balance at August 1, 2021

Net balance at July 31, 2022

$ 993 $ 2,986 $ 3,979

Amounts reclassified due to segment change (2)

Divestiture (2)

— ( 11 ) ( 11 )

Foreign currency translation adjustment ( 3 ) — ( 3 )

2 unchanged sentences

_____________________________________

(1) See Note 3 for additional information on the sale of the Plum baby and snack foods business .

(1) See Note 6 for additional information.

(2) See Note 3 for additional information on the sale of the Emerald nuts business.

Intangible Assets

3 unchanged sentences

Customer relationships $ 830 $ ( 229 ) $ 601 $ 830 $ ( 181 ) $ 649

Non-amortizable intangible assets

Trademarks 2,549 2,549

Total net intangible assets $ 3,198 $ 3,239

Amortization of intangible assets in Earnings from continuing operations was $ 41 million for 2022, $ 42 million for 2021 and $ 43 million for 2020.

As of July 31, 2022, amortizable intangible assets had a weighted-average remaining useful life of 16 years.

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

The carrying values of indefinite-lived trademarks as of July 31, 2022 and August 1, 2021, are detailed below:

Indefinite-lived trademarks

Snyder's of Hanover $ 620 $ 620

Lance 350 350

Kettle Brand 318 318

Pacific Foods 280 280

Cape Cod 187 187

Various other Snacks (1),(2)

Total $ 2,549

Total indefinite-lived trademarks $ 2,541 $ 2,549

Total net intangible assets $ 3,142 $ 3,198

_____________________________________

1 unchanged sentence

(Snyder's-Lance).

As of the 2022 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.

(2) An $ 8 million trademark was divested with the sale of the Emerald nuts business in 2023.

See Note 3 for additional information .

Amortization expense was $ 48 million for 2023, $ 41 million for 2022 and $ 42 million for 2021.

The increase in amortization expense in 2023 was a result of $ 7 million of accelerated amortization expense on customer relationships in the fourth quarter due to the loss of certain contract manufacturing customers.

As of July 30, 2023, amortizable intangible assets had a weighted-average remaining useful life of 15 years.

Amortization expense is estimated to be approximately $ 68 million in 2024, $ 59 million in 2025 and $ 34 million per year for the following three years.

As of the 2023 annual impairment testing, indefinite-lived trademarks with approximately 10% or less of excess coverage of fair value over carrying value had an aggregate carrying value of $ 434 million and included the 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.

16 unchanged sentences

The segment included the results of 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.

Beginning in 2022, we refer to the * brands as our "power brands." The segment includes the retail business in Latin America.

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

We refer to the * 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.

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

1 unchanged sentence

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

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

Unrealized gains and losses on outstanding undesignated commodity hedging activities are excluded from segment

operating earnings and are recorded in Corporate as these open positions represent hedges of future purchases.

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

3 unchanged sentences

Our largest customer, Wal-Mart Stores, Inc.

and its affiliates, accounted for approximately 22 % of consolidated net sales from continuing operations in 2022, and 21 % in 2021 and 2020.

and its affiliates, accounted for approximately 22 % of consolidated net sales in 2023 and 2022 and 21 % in 2021.

Both of our reportable segments sold products to Wal-Mart Stores, Inc.

24 unchanged sentences

Corporate (3)

Discontinued operations — — 30

Total $ 370 $ 242 $ 275

2 unchanged sentences

Pension and postretirement actuarial gains and losses are included in Corporate.

There were actuarial losses of $ 44 million in 2022, gains of $ 203 million in 2021, and losses of $ 164 million in 2020, respectively.

There were actuarial gains of $ 15 million in 2023, losses of $ 44 million in 2022, and gains of $ 203 million in 2021.

Costs related to the cost savings initiatives were $ 50 million, $ 26 million and $ 32 million in 2023, 2022 and 2021, respectively.

Unrealized mark-to-market adjustments on outstanding undesignated commodity hedges were losses of $ 59 million in 2022, gains of $ 50 million in 2021, and gains of $ 2 million in 2020, respectively.

A loss of $ 11 million on the sale of the Plum baby food and snacks business was included in 2021.

A loss of $ 64 million on the sale of our European chips business was included in 2020.

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

(Acre) was included in 2020.

See Note 14 for additional information on Acre.

Unrealized mark-to-market adjustments on outstanding undesignated commodity hedges were gains of $ 21 million in 2023, losses of $ 59 million in 2022, and gains of $ 50 million in 2021.

Accelerated amortization expense related to customer relationship intangible assets was $ 7 million in 2023.

A loss of $ 13 million on the sale of our Emerald nuts business was included in 2023.

Transaction costs of $ 5 million associated with the pending acquisition of Sovos Brands, Inc.

(Sovos Brands) was included in 2023.

A loss of $ 11 million on the sale of our Plum baby food and snacks business was included in 2021.

(2) See Note 7 for additional information.

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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.

2 unchanged sentences

In 2022, we expanded these initiatives as we continue to pursue cost savings by further optimizing our supply chain and manufacturing network and through effective cost management.

In the second quarter of 2023, we announced plans to consolidate our Snacks offices in Charlotte, North Carolina, and Norwalk, Connecticut, into our headquarters in Camden, New Jersey.

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:

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

(Millions) 2023 2022 2021 Recognized as of July 30, 2023

5 unchanged sentences

Total pre-tax charges $ 66 $ 31 $ 53 $ 791

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

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

(Millions) Recognized as of

3 unchanged sentences

Implementation costs and other related costs

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

The total estimated pre-tax costs for actions that have been identified are approximately $ 885 million to $ 905 million and we expect to incur the costs through 2025.

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:

approximately $ 230 million in severance pay and benefits;

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

approximately $ 245 million to $ 250 million in severance pay and benefits;

approximately $ 140 million in asset impairment and accelerated depreciation;

4 unchanged sentences

and Corporate - approximately 25 %.

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

Of the aggregate $ 885 million to $ 905 million of pre-tax costs identified to date, we expect approximately $ 705 million to $ 725 million will be cash expenditures.

In addition, we expect to invest approximately $ 620 million in capital expenditures through 2025, of which we invested $ 467 million as of July 30, 2023.

The capital expenditures primarily relate to a U.S.

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

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 July 31, 2022, is as follows:

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, 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 July 30, 2023, is as follows:

(Millions) Severance Pay and Benefits Implementation Costs and Other Related Costs (3)

4 unchanged sentences

2022 cash payments

Accrued balance at August 1, 2021 (2)

Accrued balance at July 31, 2022

13 26 24 3 $ 66

4 unchanged sentences

(2) Includes $ 7 million of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.

(3) 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, Cost of products sold and Marketing and selling expenses in the Consolidated Statements of Earnings.

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

(3) Includes other costs recognized as incurred that are not reflected in the restructuring reserves in the Consolidated Balance Sheets.

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

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

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:

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

(Millions) 2023 Costs Incurred to Date

6 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 2023 excludes less than 1 million stock options that would have been antidilutive.

The earnings per share calculation for 2022 and 2021 excludes approximately 1 million stock options that would have been antidilutive.

11 unchanged sentences

All collective bargaining units adopted this amendment by December 31, 2011.

In June 2023, we settled $ 245 million of our pension benefit obligations associated with approximately 6,000 retired participants currently receiving benefits within our U.S.

defined benefit pension plans.

A group annuity contract was purchased on behalf of these participants with a third-party insurance provider and funded directly by $ 241 million from the assets of our pension plans, resulting in an actuarial gain of $ 4 million.

Postretirement Benefits — We provide postretirement benefits, including health care and life insurance to eligible retired U.S.

6 unchanged sentences

We also provide postretirement life insurance to all eligible U.S.

employees who retired prior to January 1, 2018, as well as certain eligible retired employees covered by one of our collective bargaining agreements.

employees who retired prior to January 1, 2018, as well as certain eligible retired employees covered by one of our collective bargaining agreements who retired prior to January 1, 2023.

Determining net periodic benefit expense (income) is dependent on various actuarial assumptions, including discount rates, expected return on plan assets, compensation increases, turnover rates and health care trend rates.

2 unchanged sentences

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

Pension Postretirement

(Millions) 2023 2022 2021 2023 2022 2021

2 unchanged sentences

Expected return on plan assets ( 100 ) ( 118 ) ( 122 ) — — —

Amortization of prior service cost — — —

Actuarial losses (gains) 80 ( 197 ) 141

Net periodic benefit expense (income) $ 27 $ ( 260 ) $ 91

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

The actuarial losses recognized in 2022 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 in 2021 were primarily due to higher than anticipated investment gains on plan assets and increases in discount rates used to determine the benefit obligation.

The actuarial losses recognized in 2020 were primarily due to decreases in discount rates used to determine the benefit obligation, partially offset by higher than anticipated investment gains on plan assets.

Net periodic benefit expense (income) associated with discontinued operations was not material in 2020.

Postretirement

(Millions) 2022 2021 2020

Service cost $ — $ — $ 1

Interest cost 3 4 6

Amortization of prior service credit 1 — — ( 1 ) ( 1 ) ( 5 )

1 unchanged sentence

Net periodic benefit expense (income) $ ( 19 ) $ 27 $ ( 260 ) $ ( 3 ) $ ( 34 ) $ ( 7 )

The actuarial gains recognized in 2022 and 2021 were primarily due to increases in discount rates used to determine the benefit obligation.

The actuarial losses recognized in 2020 were primarily due to decreases in discount rates used to determine the benefit obligation.

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

The pension actuarial gains recognized in 2023 were primarily due to increases in discount rates used to determine the benefit obligation and the gain from the annuity settlement, partially offset by losses on plan assets and plan experience.

The pension actuarial losses recognized in 2022 were primarily due to losses on plan assets, partially offset by increases in discount rates used to determine the benefit obligation.

The pension actuarial gains recognized in 2021 were primarily due to higher than anticipated investment gains on plan assets and increases in discount rates used to determine the benefit obligation.

The postretirement actuarial gains recognized in 2023, 2022 and 2021 were primarily due to increases in discount rates used to determine the benefit obligation.

Change in benefit obligation:

4 unchanged sentences

Interest cost 73 49 7 3

Actuarial loss (gain) ( 310 ) ( 43 ) ( 36 ) ( 6 )

Actuarial losses (gains) ( 108 ) ( 310 ) ( 9 ) ( 36 )

Benefits paid ( 104 ) ( 106 ) ( 17 ) ( 17 )

29 unchanged sentences

Fair value of plan assets $ — $ —

The accumulated benefit obligation for all pension plans was $ 1.716 billion at July 31, 2022, and $ 2.159 billion at August 1, 2021.

The accumulated benefit obligation for all pension plans was $ 1.24 billion at July 30, 2023, and $ 1.716 billion at July 31, 2022.

Weighted-average assumptions used to determine benefit obligations at the end of the year:

44 unchanged sentences

Unobservable inputs, which are valued based on our estimates of assumptions that market participants would use in pricing the asset or liability.

The following table presents our pension plan assets by asset category at July 31, 2022, and August 1, 2021:

The following table presents our pension plan assets by asset category at July 30, 2023, and July 31, 2022:

July 30, 2023

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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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Short-term investments — Investments include cash and cash equivalents, and various short-term debt instruments and short-term investment funds.

Institutional short-term investment vehicles valued daily are classified as Level 1 at cost which approximates market value.

Institutional short-term investment vehicles valued daily are classified as Level 1 at cost which

approximates market value.

Short-term debt instruments are classified at Level 2 and are valued based on bid quotations and recent trade data for identical or similar obligations.

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Other items to reconcile to fair value of plan assets included amounts due for securities sold, amounts payable for securities purchased and other payables.

The following table summarizes the changes in fair value of Level 3 investments for the years ended July 31, 2022, and August 1, 2021:

The following table summarizes the changes in fair value of Level 3 investments for the years ended July 30, 2023, and July 31, 2022:

(Millions) Real Estate Hedge Funds Total

Fair value at August 1, 2021

Fair value at July 31, 2022

$ 2 $ 11 $ 13

3 unchanged sentences

Fair value at July 30, 2023

$ 2 $ 11 $ 13

(Millions) Real Estate Hedge Funds Total

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Transfers out of Level 3 — — —

Fair value at August 1, 2021

Fair value at July 31, 2022

$ 2 $ 11 $ 13

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employees and provide a matching contribution of 100 % of employee contributions up to 4 % of eligible compensation.

In addition, for

employees not eligible to participate in defined benefit plans that we sponsor, we provide a contribution equal to 3 % of eligible compensation regardless of their participation in the 401(k) Retirement Plan.

Through December 31, 2019, all Snyder's-Lance U.S.

employees were eligible to participate in a 401(k) retirement plan sponsored by Snyder's-Lance that provided participants with matching contributions equal to 100 % of the first 4 % and 50 % of the next 1 % of eligible compensation.

As of January 1, 2020, Snyder's-Lance employees were transitioned to the 401(k) Retirement Plan and receive the same contributions under the 401(k) Retirement Plan noted above.

Amounts charged to Costs and expenses of continuing operations were $ 69 million in 2022, $ 64 million in 2021 and $ 62 million in 2020.

In addition, for employees not eligible to participate in defined benefit plans that we sponsor, we provide a contribution equal to 3 % of eligible compensation regardless of their participation in the 401(k) Retirement Plan.

Amounts charged to Costs and expenses were $ 73 million in 2023, $ 69 million in 2022 and $ 64 million in 2021.

We lease warehouse and distribution facilities, office space, manufacturing facilities, equipment and vehicles, primarily through operating leases.

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Sublease income

— ( 2 ) ( 3 )

$ 354 $ 333 $ 291

Total $ 373 $ 354 $ 333

__________________________________________

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

(2) Total lease cost in 2020 included $ 4 million related to discontinued operations .

The following table summarizes the lease amounts recorded in the Consolidated Balance Sheets:

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Weighted-average lease terms and discount rates were as follows:

July 31, 2022 August 1, 2021

July 30, 2023 July 31, 2022

Operating Finance Operating Finance

43 unchanged sentences

Capital loss valuation allowance on the sale of the Plum baby food and snacks business — — 1.3

Benefit on sale of the European chips business — — ( 1.3 )

Other ( 0.1 ) ( 0.5 ) ( 0.2 )

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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.

On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law.

The IRA introduces a corporate alternative minimum tax beginning in 2024, a 1% excise tax on share repurchases in excess of issuances after January 1, 2023, and several tax incentives to promote clean energy.

Any excise tax incurred is recognized as part of the cost basis of the shares acquired in the Consolidated Statements of Equity.

We do not expect the provisions of the IRA to have a material impact on our consolidated financial statements.

Deferred tax liabilities and assets are comprised of the following:

10 unchanged sentences

Operating lease liabilities 69 54

Capitalized research and development 15 —

Gross deferred tax assets 401 381

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subsidiaries had capital loss carryforwards of approximately $ 474 million, all of which were offset by valuation allowances.

Of these capital loss carryforwards, $ 349 million expire in 2024, $ 77 million expire in 2026, and $ 48 million may be carried forward indefinitely.

The net change in the deferred tax asset valuation allowance in 2023 was a decrease of $ 2 million.

The decrease was primarily due to liquidation of an inactive subsidiary.

The net change in the deferred tax asset valuation allowance in 2021 was an increase of $ 20 million.

The increase was primarily due to the sale of the the Plum baby food and snacks business.

The decrease was primarily due to state tax loss carryforwards.

The net change in the deferred tax asset valuation allowance in 2022 was a decrease of $ 11 million.

The decrease was primarily due to the sale of the Arnott's and other international operations.

As of July 31, 2022, and August 1, 2021, other deferred tax assets included $ 13 million of state tax credit carryforwards related to various states that expire between 2023 and 2025.

As of July 31, 2022, and August 1, 2021, deferred tax asset valuation allowances have been established to offset the $ 13 million of state credit carryforwards.

The decrease was primarily due to the liquidation of an inactive subsidiary.

The net change in the deferred tax asset valuation allowance in 2021 was an increase of $ 20 million.

The increase was primarily due to the sale of the Plum baby food and snacks business.

As of July 30, 2023, other deferred tax assets included $ 12 million of state tax credit carryforwards related to various states that expire in 2025.

As of July 31, 2022, other deferred tax assets included $ 13 million of state tax credit carryforwards.

As of July 30, 2023, and July 31, 2022, deferred tax asset valuation allowances have been established to offset the state tax credit carryforwards.

As of July 30, 2023, we had approximately $ 11 million of undistributed earnings of foreign subsidiaries which are deemed to be permanently reinvested and for which we have not recognized a deferred tax liability.

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Balance at end of year $ 15 $ 14 $ 22

The decrease of unrecognized tax benefits was primarily due to audit settlements.

The amount of unrecognized tax benefits that, if recognized, would impact the annual effective tax rate was $ 12 million as of July 31, 2022, and $ 18 million as of August 1, 2021 and August 2, 2020.

The increase of unrecognized tax benefits was primarily due current-year tax positions.

The amount of unrecognized tax benefits that, if recognized, would impact the annual effective tax rate was $ 12 million as of July 30, 2023, and July 31, 2022, and $ 18 million as of August 1, 2021.

The total amount of unrecognized tax benefits can change due to audit settlements, tax examination activities, statute expirations and the recognition and measurement criteria under accounting for uncertainty in income taxes.

1 unchanged sentence

The total amount of interest and penalties recognized in the Consolidated Statements of Earnings was not material in 2023, 2022, and 2021.

The total amount of interest and penalties recognized in the Consolidated Balance Sheets in Other liabilities was $ 4 million as of July 31, 2022, and as of August 1, 2021.

The total amount of interest and penalties recognized in the Consolidated Balance Sheets in Other liabilities was $ 5 million as of July 30, 2023, and $ 4 million as of July 31, 2022.

We file income tax returns in the U.S.

14 unchanged sentences

The weighted-average interest rate of commercial paper, which consisted of U.S.

borrowings, was 2.63 % as of July 31, 2022, and 0.22 % as of August 1, 2021.

borrowings, was 5.43 % as of July 30, 2023, and 2.63 % as of July 31, 2022.

As of July 30, 2023, we issued $ 29 million of standby letters of credit.

On November 2, 2020, we entered into a committed revolving credit facility totaling $ 1.85 billion scheduled to mature on November 2, 2023 .

On September 27, 2021, we replaced the facility with a new $ 1.85 billion committed revolving facility that matures on September 27, 2026 .

On September 27, 2021, we entered into a committed revolving credit facility totaling $ 1.85 billion scheduled to mature on September 27, 2026 .

This facility remained unused at July 30, 2023, except for $ 1 million of standby letters of credit that we issued under it.

2 unchanged sentences

The facility supports our commercial paper program and other general corporate purposes.

In March 2020, we borrowed $ 300 million under our previous revolving credit facility and on May 1, 2020, we repaid the borrowings.

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.

Long-term debt consists of the following:

(Millions) 2023 2022

2.50 % Notes due August 2, 2022

3.65 % Notes due March 15, 2023

1 unchanged sentence

3.30 % Notes due March 19, 2025

Variable-rate term loan due November 15, 2025

4.15 % Notes due March 15, 2028

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

On January 22, 2020, we completed the redemption of all $ 500 million outstanding aggregate principal amount of our 4.25 % Senior Notes due 2021.

On January 24, 2020, we settled tender offers to purchase $ 1.2 billion in aggregate principal amount of certain senior unsecured debt, comprising $ 329 million of 3.30 % Senior Notes due 2021, $ 634 million of 3.65 % Senior Notes due 2023, and $ 237 million of 3.80 % Senior Notes due 2043.

The consideration for the redemption and the tender offers was $ 1.765 billion, including $ 65 million of premium.

We recognized a loss of $ 75 million (including $ 65 million of premium, fees and other costs paid with the tender offers and unamortized debt issuance costs), which was recorded in Interest expense in the Consolidated Statement of Earnings.

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

Debt Repayments

In March 2023, we repaid our 3.65 % $ 566 million Notes.

In March 2021, we repaid our 3.30 % $ 321 million Notes and floating rate $ 400 million Notes, and in May 2021, we repaid our 8.875 % $ 200 million Notes.

In 2020, we also repaid our $ 499 million Senior Term Loan due 2021.

Debt Issuances

On April 24, 2020, we issued senior notes in an aggregate principal amount of $ 1 billion, consisting of $ 500 million aggregate principal amount of notes bearing interest at a fixed rate of 2.375 % per annum, due April 24, 2030, and $ 500 million aggregate principal amount of notes bearing interest at a fixed rate of 3.125 % per annum, due April 24, 2050.

On May 1, 2020, we used $ 300 million of the net proceeds to repay $ 300 million of borrowings outstanding under a revolving credit facility.

2.375 % Senior Notes due 2030 and the 3.125 % Senior Notes due 2050 may each be redeemed at the applicable redemption price, in whole or in part, at our option at any time and from time to time prior to January 24, 2030, and October 24, 2049, respectively.

Interest on each of the notes is due semi-annually on April 24 and October 24, commencing on October 24, 2020.

The notes contain customary covenants and events of default.

If a change of control triggering event occurs, we will be required to offer to purchase the notes at a purchase price equal to 101 % of the principal amount plus accrued and unpaid interest, if any, to the purchase date.

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 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 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 .

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 July 31, 2022, or August 1, 2021.

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

We are also exposed to credit risk from our customers.

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

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

During 2023, 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 2023.

We closely monitor credit risk associated with counterparties and customers.

Foreign Currency Exchange Risk

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

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 $ 140 million as of July 31, 2022, and $ 134 million as of August 1, 2021.

The notional amount of foreign exchange forward contracts accounted for as cash-flow hedges was $ 125 million as of

July 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.

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 $ 13 million as of July 31, 2022, and as of August 1, 2021.

The notional amount of foreign exchange forward contracts that are not designated as accounting hedges was $ 15 million as of July 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 we may utilize interest rate swaps in order to maintain our variable-to-total debt ratio within targeted guidelines.

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

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

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

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

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

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

There were no interest rate swaps outstanding as of July 31, 2022, or August 1, 2021.

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 July 30, 2023, or July 31, 2022.

Commodity Price Risk

3 unchanged sentences

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

The notional amount of commodity contracts designated as cash flow hedges was $ 3 million as of July 31, 2022, and $ 18 million as of August 1, 2021.

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

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

The notional amount of commodity contracts not designated as accounting hedges was $ 254 million as of July 31, 2022, and $ 190 million as of August 1, 2021.

The notional amount of commodity contracts not designated as accounting hedges was $ 194 million as of July 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 approximately $ 39 million as of July 31, 2022, and $ 38 million as of August 1, 2021.

The notional amount was approximately $ 47 million as of July 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.

Equity Price Risk

We enter into swap contracts which hedge a portion of exposures relating to certain deferred compensation obligations linked to the total return of the Vanguard 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 July 31, 2022, and August 1, 2021, we no longer hedge our exposure linked to the total return of our capital stock.

Deferred Compensation Obligation Price Risk

We enter into swap contracts which hedge a portion of exposures relating to the total return of certain deferred compensation obligations.

These contracts are not designated as hedges for accounting purposes.

1 unchanged sentence

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

The notional amounts of the contracts as of July 31, 2022, and August 1, 2021, were $ 50 million and $ 29 million, respectively.

The following tables summarize the fair value of derivative instruments on a gross basis as recorded in the Consolidated Balance Sheets as of July 31, 2022, and August 1, 2021:

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

The following tables summarize the fair value of derivative instruments on a gross basis as recorded in the Consolidated Balance Sheets as of July 30, 2023, and July 31, 2022:

(Millions) Balance Sheet Classification 2023 2022

7 unchanged sentences

Deferred compensation contracts Other current assets 4 —

Commodity contracts Other assets 1 —

Total derivatives not designated as hedges $ 20 $ 20

11 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 July 31, 2022, and August 1, 2021, would be adjusted as detailed in the following table:

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

(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.

A cash margin asset balance of $ 8 million at July 31, 2022, and a liability balance of $ 14 million at August 1, 2021, were included in Other current assets and Accrued liabilities, respectively, in the Consolidated Balance Sheets.

The following tables show the effect of our derivative instruments designated as cash-flow hedges for the years ended July 31, 2022, August 1, 2021, and August 2, 2020 in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

A cash margin asset balance of $ 2 million at July 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 years ended July 30, 2023, July 31, 2022, and August 1, 2021 in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

Total Cash-Flow Hedge

9 unchanged sentences

Foreign exchange forward contracts Other expenses / (income) — — 1

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

Forward starting interest rate swaps Interest expense 1 1 1

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

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

Based on current valuations, the amount expected to be reclassified from OCI into earnings within the next 12 months is a loss of $ 2 million.

The following table shows the total amounts of line items presented in the Consolidated Statements of Earnings for the years ended 2023, 2022, and 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:

2023 2022 2021

(Millions) Cost of products sold Interest expense Cost of products sold Other expenses / (income) Interest expense Cost of products sold Interest expense Earnings (loss) from discontinued operations

(Millions) Cost of products sold Interest expense Cost of products sold Interest expense Cost of products sold Other expenses / (income) Interest expense

Consolidated Statements of Earnings:

7 unchanged sentences

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

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

Commodity contracts Cost of products sold ( 27 ) 8 ( 55 )

Deferred compensation contracts Administrative expenses ( 4 ) 3 ( 8 )

Treasury rate lock contracts Interest expense — — ( 3 )

Total $ ( 31 ) $ 11 $ ( 61 )

Variable Interest Entity

In February 2016, we agreed to make a capital commitment subject to certain qualifications of up to $ 125 million to Acre, a limited partnership formed to make venture capital investments in innovative new companies in food and food-related industries.

Acre was managed by its general partner, Acre Ventures GP, LLC, which was independent of us.

We were the sole limited partner of Acre and owned a 99.8 % interest.

Acre was a VIE.

We entered into an agreement to sell our interest in Acre on April 26, 2020, and completed the sale on May 8, 2020, for $ 30 million resulting in a loss of $ 45 million recognized in the third quarter of 2020 as a result of the pending sale.

We consolidated Acre and accounted for the third party ownership as a noncontrolling interest.

Through the date of the sale, we funded $ 86 million of the capital commitment.

Acre elected the fair value option to account for qualifying investments to more appropriately reflect the value of the investments in the financial statements.

Changes in the fair values of investments for which the fair value option was elected were included in Other expenses / (income) on the Consolidated Statements of Earnings.

Fair Value Measurements

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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 July 31, 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 July 30, 2023, and July 31, 2022, consistent with the fair value hierarchy:

July 30, 2023 Fair Value Measurements at

1 unchanged sentence

Fair Value Hierarchy Fair Value

2021 Fair Value Measurements at

August 1, 2021 Using

July 31, 2022 Fair Value Measurements at

July 31, 2022 Using

Fair Value Hierarchy

12 unchanged sentences

Fair Value Hierarchy Fair Value

2021 Fair Value Measurements at

August 1, 2021 Using

July 31, 2022 Fair Value Measurements at

July 31, 2022 Using

Fair Value Hierarchy

15 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 for the years ended July 31, 2022, and August 1, 2021:

The following table summarizes the changes in fair value of Level 3 assets for the years ended July 30, 2023, and July 31, 2022:

(Millions) 2023 2022

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

There were cash equivalents of $ 27 million at July 31, 2022, and none at August 1, 2021.

There were no cash equivalents at July 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 $ 4.637 billion at July 31, 2022, and $ 5.613 billion at August 1, 2021.

The carrying value was $ 4.81 billion at July 31, 2022, and $ 5.058 billion at August 1, 2021.

The fair value of short- and long-term debt was $ 4.293 billion at July 30, 2023, and $ 4.637 billion at July 31, 2022.

The carrying value was $ 4.689 billion at July 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.

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

In 2022, we repurchased 3.8 million shares at a cost of $ 167 million.

In 2021, we repurchased approximately 1 million shares at a cost of $ 36 million.

4 unchanged sentences

Approximately 6 million of these shares were shares that were currently available under the 2005 plan and were incorporated into the 2015 Plan upon approval by shareholders.

In 2022, shareholders approved the 2022 Long-Term Incentive Plan, which authorized the issuance of 12 million shares to satisfy awards of stock options, stock appreciation rights, unrestricted stock, restricted stock/units (including performance restricted stock) and performance units.

The 2022 Long-Term Incentive Plan replaced the 2015 Long-Term Incentive Plan and no new awards can be granted under the 2015 Long-Term Incentive Plan and none of the shares that remain available under the 2015 Long-Term Incentive Plan are available for issuance under the 2022 Long-Term Incentive Plan.

Awards under Long-Term Incentive Plans may be granted to employees and directors.

1 unchanged sentence

Under the program, awards of TSR performance restricted stock/units will be earned by comparing our total shareholder return during a three-year period to the respective total shareholder returns of companies in a performance peer group.

Based upon our ranking in the performance peer group after the relevant three-year performance period, a recipient of TSR performance restricted stock/units may earn a total award ranging from 0 % to 200 % of the initial grant.

Awards of EPS performance restricted stock/units granted in 2022 will be earned upon the achievement of our adjusted EPS compound annual growth rate goal (EPS CAGR performance restricted stock/units), measured over a three-year period.

Based upon our ranking in the performance peer group after the relevant three-year performance period, a recipient

of TSR performance restricted stock/units may earn a total award ranging from 0 % to 200 % of the initial grant.

Awards of EPS performance restricted stock/units granted beginning in 2022 will be earned upon the achievement of our adjusted EPS compound annual growth rate goal (EPS CAGR performance restricted stock/units), measured over a three-year period.

A recipient of EPS CAGR performance restricted stock/units may earn a total award ranging from 0 % to 200 % of the initial grant.

Awards of EPS

performance restricted stock/units granted prior to 2022 were earned based upon our achievement of annual earnings per share goals and vested over the relevant three-year period.

Awards of EPS performance restricted stock/units granted prior to 2022 were earned based upon our achievement of annual earnings per share goals and vested over the relevant three-year period.

During the three-year vesting period, a recipient of EPS performance restricted stock/units earned a total award of either 0 % or 100 % of the initial grant.

17 unchanged sentences

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:

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

(Millions) 2023 2022 2021

1 unchanged sentence

Tax-related benefits $ 12 $ 10 $ 12

In 2020, total pre-tax stock-based compensation expense recognized in Earnings (loss) from discontinued operations was $ 2 million.

The tax-related benefits were not material.

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

2 unchanged sentences

Life Aggregate

thousands) (In years)

Outstanding at August 1, 2021

(In thousands) (In years) (Millions)

Outstanding at July 31, 2022

1,297 $ 46.04

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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 CAGR performance restricted stock units and FCF performance restricted stock units as of July 31, 2022:

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

Units Weighted-

(Restricted stock

units in thousands)

Nonvested at August 1, 2021

(In thousands)

Nonvested at July 31, 2022

1,946 $ 43.88

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Units Weighted-

(Restricted stock

units in thousands)

Nonvested at August 1, 2021

(In thousands)

Nonvested at July 31, 2022

1,153 $ 55.63

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Nonvested at July 30, 2023

1,153 $ 55.63

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

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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 July 31, 2022, total remaining unearned compensation

related to TSR performance restricted stock units was $ 15 million, which will be amortized over the weighted-average remaining service period of 1.5 years.

As of July 30, 2023, total remaining unearned compensation related to TSR performance restricted stock units was $ 13 million, which will be amortized over the weighted-average

remaining service period of 1.6 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.

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

The fair value of TSR performance restricted stock units vested during 2022 and 2021 was $ 8 million and $ 11 million, respectively.

The grant-date fair value of the TSR performance restricted stock units granted during 2021 and 2020 was $ 54.93 and $ 63.06 , respectively.

The fair value of TSR performance restricted stock units vested during 2023, 2022, and 2021 was $ 21 million, $ 8 million and $ 11 million, respectively.

The weighted-average grant-date fair value of the TSR performance restricted stock units granted during 2022 and 2021 was $ 45.54 and $ 54.93 , respectively.

In the first quarter of 2024, recipients of TSR performance restricted stock units will receive a 75 % payout based upon our TSR ranking in a performance peer group during a three-year period ended July 28, 2023.

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

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

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

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

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

The amended consolidated complaint alleges that, in public statements between July 19, 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 amended consolidated complaint seeks unspecified monetary damages and other relief.

On April 30, 2019, the defendants filed a motion to dismiss the amended consolidated complaint, which the Court granted on November 30, 2020, with leave to amend the complaint.

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.

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.

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We do not expect that we will be required to make material guarantee payments as a result of defaults on the bank loans guaranteed.

The amounts recognized as of July 31, 2022, and August 1, 2021, were not material.

We have provided certain standard indemnifications in connection with divestitures, contracts and other transactions.

The amounts recognized as of July 30, 2023, and July 31, 2022, were not material.

We have provided certain indemnifications in connection with divestitures, contracts and other transactions.

Certain indemnifications have finite expiration dates.

Liabilities recognized based on known exposures related to such matters were not material at July 31, 2022, and August 1, 2021.

Liabilities recognized based on known exposures related to such matters were not material at July 30, 2023, and July 31, 2022.

Supplemental Financial Statement Data

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Unrecognized tax benefits 11 15

Restructuring 7 —

Statements of Earnings

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Amortization of intangible assets (1)

Net periodic benefit expense (income) other than the service cost ( 23 ) ( 285 ) 73

Investment losses (1)

$ 48 $ 41 $ 42

Net periodic benefit income other than the service cost ( 35 ) ( 23 ) ( 285 )

Loss on sales of businesses (2)

Transaction costs (3)

Transition services fees ( 1 ) — ( 27 )

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____________________________________

(1) 2020 includes a loss of $ 45 million related to Acre.

See Note 14 for additional information.

(2) In 2021, we recognized a loss of $ 11 million on the sale of the Plum baby food and snacks business.

In 2020, we recognized a loss of $ 64 million on the sale of the European chips business.

(1) In 2023, we recognized accelerated amortization expense of $ 7 million related to customer relationship intangible assets.

(2) In 2023, we recognized a loss of $ 13 million on the sale of our Emerald nuts business.

In 2021, we recognized a loss of $ 11 million on the sale of our Plum baby food and snacks business.

See Note 3 for additional information.

(3) In 2023, we recognized transaction costs of $ 5 million related to the pending acquisition of Sovos Brands.

(4) Included in Marketing and selling expenses.

(5) In 2022, we recognized a loss of $ 4 million (including $ 3 million of premium and other costs) on the extinguishment of debt.

In 2020, we recognized a loss of $ 75 million (including $ 65 million of premium, fees and other costs paid with the tender offers and unamortized debt issuance costs).

See Note 12 for additional information.

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Income taxes paid $ 268 $ 196 $ 212

Subsequent Event

On August 7, 2023 , we entered into a merger agreement to acquire Sovos Brands for $ 23.00 per share in cash, representing a total enterprise value of approximately $ 2.7 billion.

The closing of the Sovos Brands acquisition is subject to certain customary mutual conditions, including (i) the absence of any injunction or other order issued by a court of competent jurisdiction in the United States or applicable law or legal prohibition in the United States that prohibits or makes illegal the consummation of the merger, (ii) the approval of Sovos Brands' shareholders holding at least a majority of the outstanding shares of Sovos Brands common stock entitled to vote on the adoption of the merger agreement and (iii) the expiration or termination of any waiting period (and any extension thereof) applicable to the consummation of the merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

There are also several pending lawsuits filed by purported shareholders of Sovos Brands seeking, among other things, to enjoin the acquisition.

If any condition to the acquisition is not satisfied or waived, the completion of the acquisition could be significantly delayed or not occur at all.

Management’s Report on Internal Control Over Financial Reporting

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President and Chief Executive Officer

/s/ Carrie L.

Executive Vice President and Chief Financial Officer

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Campbell Soup Company and its subsidiaries (the "Company") as of July 31, 2022 and August 1, 2021, and the related consolidated statements of earnings, of comprehensive income, of equity, and of cash flows for each of the three years in the period ended July 31, 2022, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended July 31, 2022 appearing on page 84 (collectively referred to as the "consolidated financial statements").

We have audited the accompanying consolidated balance sheets of Campbell Soup Company and its subsidiaries (the "Company") as of July 30, 2023 and July 31, 2022, and the related consolidated statements of earnings, of comprehensive income, of equity and of cash flows for each of the three years in the period ended July 30, 2023, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended July 30, 2023 appearing on page 80 (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of July 30, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 31, 2022 and August 1, 2021, and the results of its operations and its cash flows for each of the three years in the period ended July 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 30, 2023 and July 31, 2022, and the results of its operations and its cash flows for each of the three years in the period ended July 30, 2023 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July 30, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

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As described in Notes 1 and 5 to the consolidated financial statements, the Company’s indefinite-lived intangible assets (trademarks) were $2.541 billion as of July 30, 2023.

Of the carrying value of all indefinite-lived trademarks, $350 million related to the Lance trademark, $318 million related to the Kettle Brand trademark, $292 million related to the Pace trademark, and $280 million related to the Pacific Foods trademark.

Management conducts a test at least annually for impairment, or when circumstances indicate that the carrying amount of the asset may not be recoverable.

Of the carrying value of all indefinite-lived trademarks, $620 million related to the Snyder's of Hanover trademark, $350 million related to the Lance trademark, $318 million related to the Kettle Brand trademark, $280 million related to the Pacific Foods trademark, and $187 million related to the Cape Cod trademark.

Management conducts a test at least annually in the fourth quarter for impairment, or more often if events or changes in circumstances indicate that the carrying amount of the asset may be impaired.

Indefinite-lived intangible assets are tested for impairment by comparing the fair value of the asset to the carrying value.

Management determines fair value based on discounted cash flow analyses that include significant management assumptions such as revenue growth rates, weighted average costs of capital, and assumed royalty rates.

The principal considerations for our determination that performing procedures relating to the indefinite-lived intangible assets impairment test for certain trademarks is a critical audit matter are (i) the high degree of auditor judgment and subjectivity involved in applying procedures relating to the fair value estimates of certain trademarks due to the significant judgment by management when developing these estimates, (ii) the significant audit effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, weighted average costs of capital, and assumed royalty rates for the Pace and Pacific Foods trademarks and the weighted average costs of capital and assumed royalty rates for the Kettle Brand and Lance trademarks, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Fair value is determined using a relief from royalty valuation method based on discounted cash flow analyses that include significant management assumptions such as revenue growth rates, weighted average costs of capital and assumed royalty rates.

If the carrying value exceeds fair value, an impairment charge will be recorded to reduce the asset to fair value.

The principal considerations for our determination that performing procedures relating to the indefinite-lived intangible assets impairment test for certain trademarks is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of certain trademarks, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the weighted average costs of capital and assumed royalty rates for the Snyder's of Hanover, Lance, Kettle Brand, Pacific Foods, and Cape Cod trademarks, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s trademark impairment test.

These procedures also included, among others (i) testing management’s process for developing the fair value estimates, (ii) evaluating the appropriateness of the discounted cash flow analyses, (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow analyses, and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, weighted average costs of capital, and assumed royalty rates for the Pace and Pacific Foods trademarks and the weighted average costs of capital and assumed royalty rates for the Kettle Brand and Lance trademarks.

Evaluating management’s assumptions related to revenue growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance associated with the trademarks, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the Company’s discounted cash flow analyses and evaluating the reasonableness of the weighted average costs of capital and royalty rates significant assumptions.

These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible assets impairment test for trademarks.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of certain trademarks, (ii) evaluating the appropriateness of the relief from royalty valuation method, (iii) testing the completeness and accuracy of underlying data used in the relief from royalty valuation method, and (iv) evaluating the reasonableness of the significant assumptions used by management related to the weighted average costs of capital and assumed royalty rates for the Snyder's of Hanover, Lance, Kettle Brand, Pacific Foods, and Cape Cod trademarks.

Evaluating management’s assumption related to the assumed royalty rates involved evaluating whether the assumption used by management was reasonable considering (i) the current and past profitability of certain trademarks, (ii) the consistency with external market and industry data, and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the relief from royalty valuation method and the reasonableness of the weighted average cost of capital and assumed royalty rate assumptions.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania

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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-K

Item 8. Financial Statements and Supplementary Data