What changed in this filing

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Item 1. Financial Statements

2023-12-06 compared with 2023-06-07 · 199 added, 245 removed, 540 unchanged (45% of the section changed)

3 unchanged sentences

(millions, except per share amounts)

Three Months Ended Nine Months Ended

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

Three Months Ended

October 29, 2023 October 30, 2022

Net sales $ 2,518 $ 2,575

25 unchanged sentences

Three Months Ended

April 30, 2023 May 1, 2022

October 29, 2023 October 30, 2022

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

6 unchanged sentences

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

Pension and other postretirement benefits:

Reclassification of prior service credit included in net earnings — — — — — —

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

2 unchanged sentences

Total comprehensive income (loss) attributable to Campbell Soup Company $ 231 $ 291

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

Net earnings (loss) $ 689 $ 661

Other comprehensive income (loss):

Foreign currency translation:

Foreign currency translation adjustments $ ( 7 ) $ — ( 7 ) $ ( 6 ) $ — ( 6 )

Cash-flow hedges:

Unrealized gains (losses) arising during period 7 ( 2 ) 5 17 ( 4 ) 13

Reclassification adjustment for losses (gains) included in net earnings ( 8 ) 2 ( 6 ) ( 4 ) 1 ( 3 )

Pension and other postretirement benefits:

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

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

Total comprehensive income (loss) $ 681 $ 664

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

Total comprehensive income (loss) attributable to Campbell Soup Company $ 681 $ 664

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

(millions, except per share amounts)

April 30, 2023 July 31, 2022

October 29, 2023 July 30, 2023

Current assets

11 unchanged sentences

Short-term borrowings $ 206 $ 191

Payable to suppliers and others 1,353 1,334

Accounts payable 1,368 1,306

Accrued liabilities 541 592

24 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

April 30, 2023 May 1, 2022

Three Months Ended

October 29, 2023 October 30, 2022

Cash flows from operating activities:

1 unchanged sentence

Adjustments to reconcile net earnings to operating cash flow

Restructuring charges 15 —

Stock-based compensation 17 15

17 unchanged sentences

Short-term repayments, including commercial paper ( 1,081 ) ( 512 )

Long-term borrowings 500 —

Long-term repayments ( 566 ) —

Dividends paid ( 114 ) ( 115 )

2 unchanged sentences

Payments related to tax withholding for stock-based compensation ( 14 ) ( 18 )

Payments related to extinguishment of debt — ( 453 )

Other ( 1 ) —

15 unchanged sentences

Shares Amount Shares Amount

Balance at January 30, 2022

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

Net earnings (loss) 188 — 188

Other comprehensive income (loss) 2 — 2

Dividends ($ .37 per share)

( 112 ) ( 112 )

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

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

Balance at May 1, 2022

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

Balance at August 1, 2021

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

Net earnings (loss) 661 — 661

Other comprehensive income (loss) 3 — 3

Dividends ($ 1.11 per share)

( 336 ) ( 336 )

Treasury stock purchased ( 3 ) ( 116 ) ( 116 )

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 July 31, 2022

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

5 unchanged sentences

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

Balance at April 30, 2023

Balance at October 30, 2022

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

7 unchanged sentences

Treasury stock issued under management incentive and stock option plans 1 35 ( 32 ) — 3

Balance at April 30, 2023

Balance at October 29, 2023

323 $ 12 ( 25 ) $ ( 1,212 ) $ 388 $ 4,573 $ ( 6 ) $ 2 $ 3,757

8 unchanged sentences

Recent Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

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

1 unchanged sentence

Early adoption is permitted.

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

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.

See Note 16 for additional information.

In November 2023, the FASB issued guidance to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment and contains other disclosure requirements.

The purpose of the guidance is to enable investors to better understand an entity’s overall performance and assess potential future cash flows.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

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

Accumulated Other Comprehensive Income (Loss)

4 unchanged sentences

Total Accumulated Comprehensive Income (Loss)

Balance at August 1, 2021

Balance at July 31, 2022

$ — $ — $ 2 $ 2

2 unchanged sentences

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

Balance at May 1, 2022

Balance at October 30, 2022

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

3 unchanged sentences

Losses (gains) reclassified from accumulated other comprehensive income (loss)

— ( 6 ) — ( 6 )

Net current-period other comprehensive income (loss) ( 9 ) 6 — ( 3 )

Balance at April 30, 2023

Balance at October 29, 2023

$ ( 10 ) $ 2 $ 2 $ ( 6 )

_____________________________________

(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.

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

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

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

Amounts related to noncontrolling interests were not material.

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

Three Months Ended Nine Months Ended

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

Three Months Ended

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

Losses (gains) on cash-flow hedges:

1 unchanged sentence

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

Forward starting interest rate swaps — — 1 1 Interest expense

Total before tax — ( 4 )

1 unchanged sentence

Loss (gain), net of tax $ — $ ( 3 )

Pension and postretirement benefit adjustments:

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

Tax expense (benefit) — — — —

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

Goodwill and Intangible Assets

2 unchanged sentences

Net balance at July 30, 2023

$ 990 $ 2,975 $ 3,965

Foreign currency translation adjustment ( 5 ) — ( 5 )

Net balance at April 30, 2023

Net balance at October 29, 2023

$ 985 $ 2,975 $ 3,960

1 unchanged sentence

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

April 30, 2023 July 31, 2022

October 29, 2023 July 30, 2023

(Millions) Cost Accumulated Amortization Net Cost Accumulated Amortization Net

1 unchanged sentence

Customer relationships $ 830 $ ( 246 ) $ 584 $ 830 $ ( 229 ) $ 601

Non-amortizable intangible assets

Indefinite-lived trademarks

Snyder's of Hanover $ 620 $ 620

2 unchanged sentences

Pacific Foods 280 280

Cape Cod 187 187

Various other Snacks (1)

Total trademarks $ 2,549 $ 2,549

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

Total net intangible assets $ 3,125 $ 3,142

2 unchanged sentences

(Snyder's-Lance).

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.

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

Amortization expense was $ 17 million for the three-month period ended October 29, 2023, and $ 11 million for the three-month period ended October 30, 2022.

The increase in amortization expense in 2024 includes $ 7 million of accelerated amortization expense on customer relationships beginning in the fourth quarter of 2023 due to the loss of certain contract

manufacturing customers.

As of October 29, 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 our 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 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.

24 unchanged sentences

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

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 29, 2023 October 30, 2022

Meals & Beverages $ 1,404 $ 1,455

1 unchanged sentence

Total $ 2,518 $ 2,575

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 29, 2023 October 30, 2022

Earnings before interest and taxes

4 unchanged sentences

Restructuring charges (2)

( 6 ) — ( 15 ) —

Total $ 358 $ 436

1 unchanged sentence

(1) Represents unallocated items.

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.

Costs related to the cost savings initiatives were $ 11 million and $ 3 million in the three-month periods ended October 29, 2023, and October 30, 2022, respectively.

Unrealized mark-to-market adjustments on outstanding undesignated commodity hedges were losses of $ 15 million and gains of $ 5 million in the three-month periods

ended October 29, 2023, and October 30, 2022, respectively.

Accelerated amortization expense related to customer relationship intangible assets was $ 7 million in the three-month period ended October 29, 2023.

Costs of $ 9 million associated with the pending acquisition of Sovos Brands, Inc.

(Sovos Brands) were included in the three-month period ended October 29, 2023.

Costs of $ 3 million related to a cybersecurity incident were included in the three-month period ended October 29, 2023.

Litigation expenses related to the Plum baby food and snacks business of $ 2 million were included in the three-month period ended October 29, 2023.

There was a pension actuarial loss of $ 15 million in the three-month period ended October 30, 2022.

(2) See Note 6 for additional information.

Our net sales based on product categories are as follows:

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 29, 2023 October 30, 2022

Soup $ 860 $ 893

4 unchanged sentences

Soup includes various soup, broths and stock products.

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

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

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

12 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 Nine Months Ended

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

Three Months Ended

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

Restructuring charges $ 2 $ — $ 282

5 unchanged sentences

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

(Millions) Recognized as of April 30, 2023

(Millions) Recognized as of October 29, 2023

Severance pay and benefits

1 unchanged sentence

Implementation costs and other related costs

The total estimated pre-tax costs for actions that have been identified are approximately $ 880 million to $ 900 million and we expect to incur the costs through 2025.

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

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

2 unchanged sentences

approximately $ 135 million in asset impairment and accelerated depreciation;

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

and approximately $ 505 million to $ 520 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 $ 885 million to $ 905 million of pre-tax costs identified to date, we expect approximately $ 710 million to $ 730 million will be cash expenditures.

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.

In addition, we expect to invest approximately $ 620 million in capital expenditures, of which we invested $ 482 million as of October 29, 2023.

We expect to invest in substantially all of the capital expenditures through 2025.

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 April 30, 2023, is as follows:

A summary of the restructuring activity and related reserves at October 29, 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

Asset Impairment/Accelerated Depreciation Total Charges

Accrued balance at July 30, 2023 (1)

12 18 17 3 $ 50

2024 cash payments

Accrued balance at April 30, 2023 (1)

Accrued balance at October 29, 2023 (2)

__________________________________

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

(2) Includes $ 5 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 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.

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.

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:

April 30, 2023

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

October 29, 2023

(Millions) Three Months Ended Costs Incurred to Date

Meals & Beverages $ 4 $ 255

Snacks 9 19 340

Corporate 3 198

2 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 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.

The earnings per share calculation for the three-month period ended October 29, 2023, excludes less than 1 million stock options that would have been antidilutive.

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

Pension and Postretirement Benefits

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

Three Months Ended Nine Months Ended

Pension Postretirement Pension Postretirement

(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

Three Months Ended

Pension Postretirement

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

Service cost $ 3 $ 4 $ — $ —

1 unchanged sentence

Expected return on plan assets ( 20 ) ( 27 ) — —

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

Actuarial losses (gains) — 15 — —

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

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 actuarial loss for the three-month period ended October 30, 2022 resulted from the remeasurement of a U.S.

pension plan due to lump sum distributions that were expected to exceed service and interest costs resulting in settlement accounting for this plan.

The actuarial loss recognized for the three-month period ended October 30, 2022 was primarily due to losses on plan assets, partially offset by increases in discount rates used to determine the benefit obligation.

The components of lease costs were as follows:

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 29, 2023 October 30, 2022

Operating lease cost $ 24 $ 20

2 unchanged sentences

Variable lease cost (1)

52 49 155 150

Total $ 100 $ 91

3 unchanged sentences

Operating Leases

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

(Millions) Balance Sheet Classification October 29, 2023 July 30,

ROU assets, net Other assets $ 288 $ 275

2 unchanged sentences

Finance Leases

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

(Millions) Balance Sheet Classification October 29, 2023 July 30,

ROU assets, net Plant assets, net of depreciation $ 26 $ 27

2 unchanged sentences

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

Nine Months Ended

(Millions) April 30, 2023 May 1, 2022

Three Months Ended

(Millions) October 29, 2023 October 30, 2022

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

5 unchanged sentences

Short-term Borrowings and Long-term Debt

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.

On October 10, 2023 , we entered into a delayed single draw term loan credit agreement (the 2024 DDTL Credit Agreement) totaling up to $ 2 billion scheduled to mature on October 8, 2024 .

Loans under the 2024 DDTL Credit Agreement bear interest at the rates specified in the 2024 DDTL Credit Agreement, which vary based on the type of loan and certain other conditions.

The 2024 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 2024 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 .

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.

The proceeds of the loans under the 2024 DDTL Credit Agreement can only be used in connection with the acquisition of Sovos Brands.

The 2024 DDTL Credit Agreement remained unused at October 29, 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 April 30, 2023, or July 31, 2022.

We did not have credit risk-related contingent features in our derivative instruments as of October 29, 2023, or July 30, 2023.

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 $ 139 million as of April 30, 2023, and $ 140 million as of July 31, 2022.

The notional amount of foreign exchange forward contracts accounted for as cash-flow hedges was $ 83 million as of October 29, 2023, and $ 125 million as of July 30, 2023.

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 (loss).

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.

income (loss).

The notional amount of foreign exchange forward contracts that are not designated as accounting hedges was $ 17 million as of October 29, 2023, and $ 15 million as of July 30, 2023.

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 April 30, 2023, or July 31, 2022.

We manage our exposure to changes in interest rates by optimizin g the use of variable-rate and fixed-rate debt.

From time to time, we may use interest rate swaps in order to maintain our variable-to-total debt ratio within targeted guidelines.

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

The forward starting interest rate swaps or treasury lock contracts are either designated as cash-flow hedging instruments or are undesignated.

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

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

The notional amount of forward starting interest rate swaps accounted for as cash-flow hedges was $ 525 million as of October 29, 2023.

These forward starting interest rate swaps related to an anticipated debt issuance and mature in January 2025.

There were no forward starting interest rate swaps or treasury lock contracts outstanding as of July 30, 2023.

Since October 29, 2023, we have entered into additional forward starting interest rate swaps accounted for as cash-flow hedges with a notional value of $ 450 million.

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.

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 $ 250 million as of April 30, 2023, and $ 254 million as of July 31, 2022.

There were no commodity contracts designated as cash-flow hedges as of October 29, 2023, or July 30, 2023.

The notional amount of commodity contracts not designated as accounting hedges was $ 197 million as of October 29, 2023, and $ 194 million as of July 30, 2023.

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 $ 77 million as of April 30, 2023, and $ 39 million as of July 31, 2022.

The notional amount was $ 18 million as of October 29, 2023, and $ 47 million as of July 30, 2023.

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 $ 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

The notional amounts of the contracts were $ 42 million as of October 29, 2023, and July 30, 2023.

The following table summarizes the fair value of derivative instruments on a gross basis as recorded in the Consolidated Balance Sheets as of October 29, 2023, and July 30, 2023:

(Millions) Balance Sheet Classification October 29, 2023 July 30,

Asset Derivatives

Derivatives designated as hedges:

Commodity contracts Other current assets $ — $ 3

Foreign exchange forward contracts Other current assets $ 3 $ —

Forward starting interest rate swaps Other assets 3 —

Total derivatives designated as hedges $ 6 $ —

2 unchanged sentences

Deferred compensation contracts Other current assets — 4

Commodity contracts Other assets — 1

Total derivatives not designated as hedges $ 8 $ 20

Total asset derivatives $ 14 $ 20

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

(Millions) Balance Sheet Classification October 29, 2023 July 30,

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

April 30, 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 October 29, 2023, and July 30, 2023, would be adjusted as detailed in the following table:

October 29, 2023 July 30, 2023

(Millions) Gross Amounts Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting Agreements Net Amount Gross Amounts Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting Agreements Net Amount

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

Cash margin 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:

Cash margin asset balances of $ 18 million at October 29, 2023, and $ 2 million at July 30, 2023, were included in Other current assets in the Consolidated Balance Sheets.

The following table shows the effect of our derivative instruments designated as cash-flow hedges for the three-month periods ended October 29, 2023, and October 30, 2022, in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

Total Cash-Flow Hedge

(Millions) April 30, 2023 May 1, 2022

(Millions) October 29, 2023 October 30, 2022

Three Months Ended

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Effective portion of changes in fair value recognized in OCI:

Commodity contracts — 8

Foreign exchange forward contracts 5 7

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

Location in Earnings

Commodity contracts Cost of products sold — ( 3 )

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

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

Nine Months Ended

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

Effective portion of changes in fair value recognized in OCI:

Commodity contracts — 12

Foreign exchange forward contracts 7 5

Forward starting interest rate swaps 3 —

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

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

Forward starting interest rate swaps Interest expense 1 1

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

Based on current valuations, the amount expected to be reclassified from OCI into earnings within the next 12 months is a gain of $ 3 million.

The following tables show the total amounts of line items presented in the Consolidated Statements of Earnings for the three- and nine-month periods ended 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:

The following table shows the total amounts of line items presented in the Consolidated Statements of Earnings for the three-month periods ended October 29, 2023, and October 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:

Three Months Ended

April 30, 2023 May 1, 2022

(Millions) Cost of products sold Interest

expense Cost of products sold Interest

Consolidated Statements of Earnings:

$ 1,561 $ 47 $ 1,465 $ 51

Loss (gain) on cash-flow hedges:

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

Nine Months Ended

April 30, 2023 May 1, 2022

(Millions) Cost of products sold Interest

expense Cost of products sold Interest

October 29, 2023 October 30, 2022

(Millions) Cost of products sold Cost of products sold

Consolidated Statements of Earnings:

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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 Nine Months Ended

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

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

(Millions) October 29, 2023 October 30, 2022

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

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

April 30, 2023

The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis as of October 29, 2023, and July 30, 2023, consistent with the fair value hierarchy:

October 29, 2023

Fair Value Measurements at

April 30, 2023 Using

October 29, 2023 Using

Fair Value Hierarchy

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1 1 — — 1 1 — —

Forward starting interest rate swaps (5)

3 — 3 — — — — —

Total assets at fair value $ 15 $ 3 $ 10 $ 2 $ 21 $ 12 $ 7 $ 2

April 30, 2023

October 29, 2023

Fair Value Measurements at

April 30, 2023 Using

October 29, 2023 Using

Fair Value Hierarchy

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

Foreign exchange forward contracts (1)

$ — $ — $ — $ — $ 1 $ — $ 1 $ —

Commodity derivative contracts (2)

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

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

Nine Months Ended

(Millions) April 30, 2023 May 1, 2022

(5) Based on SOFR swap rates.

The following table summarizes the changes in fair value of Level 3 assets and liabilities for the three-month periods ended October 29, 2023, and October 30, 2022:

Three Months Ended

(Millions) October 29, 2023 October 30, 2022

Fair value at beginning of year $ 2 $ 4

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

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 $ 4.459 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.

There were no cash equivalents at October 29, 2023 or July 30, 2023.

The fair value of short- and long-term debt was $ 4.108 billion at October 29, 2023, and $ 4.293 billion at July 30, 2023.

The carrying value was $ 4.706 billion at October 29, 2023, and $ 4.689 billion at July 30, 2023.

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

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

During the nine-month period ended 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.

During the three-month period ended October 29, 2023, we repurchased 679 thousand shares at a cost of $ 28 million pursuant to our June 2021 program.

As of October 29, 2023, approximately $ 76 million remained available under the June 2021 program and approximately $ 301 million remained available under the September 2021 program.

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

Stock-based Compensation

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

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 29, 2023 October 30, 2022

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

Tax-related benefits $ 2 $ 3

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

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

Options Weighted-

1 unchanged sentence

Life Aggregate

thousands) (In years) (Millions)

(In thousands) (In years) (Millions)

Outstanding at July 30, 2023

1,297 $ 46.04

Granted — $ —

1 unchanged sentence

Terminated — $ —

Outstanding at April 30, 2023

Outstanding at October 29, 2023

833 $ 44.77 4.0 $ 2

Exercisable at April 30, 2023

Exercisable at October 29, 2023

833 $ 44.77 4.0 $ 2

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.

The total intrinsic value of options exercised during the three-month period ended October 30, 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 April 30, 2023:

The following table summarizes time-lapse restricted stock units and EPS performance restricted stock units as of October 29, 2023:

Units Weighted-Average Grant-Date Fair Value

(Restricted stock

units in thousands)

(In thousands)

Nonvested at July 30, 2023

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Forfeited ( 44 ) $ 44.77

Nonvested at April 30, 2023

Nonvested at October 29, 2023

3,008 $ 43.26

1 unchanged sentence

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

In 2023 and 2022, we granted EPS performance restricted stock units that will be earned upon the achievement of our adjusted EPS compound annual growth rate goal, measured over a three-year period.

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

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

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

There were 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.

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

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

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

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

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

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

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

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

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

As of 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:

There were 936 thousand EPS performance target grants outstanding at October 29, 2023, with a weighted-average grant-date fair value of $ 42.99 .

As of October 29, 2023, total remaining unearned compensation related to nonvested time-lapse restricted stock units and EPS performance restricted stock units was $ 83 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 three-month periods ended October 29, 2023, and October 30, 2022, was $ 30 million and $ 34 million, respectively.

The weighted-average grant-date fair value of the restricted stock units granted during the three-month period ended October 30, 2022 was $ 47.12 .

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

Units Weighted-Average Grant-Date Fair Value

(Restricted stock

units in thousands)

(In thousands)

Nonvested at July 30, 2023

1,153 $ 55.63

Granted 387 $ 44.18

1 unchanged sentence

Forfeited ( 110 ) $ 54.35

Nonvested at April 30, 2023

Nonvested at October 29, 2023

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

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

Assumptions used in the Monte Carlo simulation were as follows:

Risk-free interest rate 4.84 % 4.29 %

3 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 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.

As of October 29, 2023, total remaining unearned compensation related to TSR performance restricted stock units was $ 24 million, which will be amortized over the weighted-average remaining service period of 2.0 years.

In the first quarter of 2024, 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 28, 2023.

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.

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.

The fair value of TSR performance restricted stock units vested during the three-month periods ended October 29, 2023, and October 30, 2022, was $ 12 million and $ 21 million, respectively.

The weighted-average grant-date fair value of the TSR performance restricted stock units granted during the three-month period ended October 30, 2022, was $ 53.74 .

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

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

Commitments and Contingencies

8 unchanged sentences

Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal.

Disposition valuations are

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

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

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 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.

It is possible that some matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably estimated as of October 29, 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.

Other Contingencies

1 unchanged sentence

Certain indemnifications have finite expiration dates.

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

Liabilities recognized based on known exposures related to such matters were not material at October 29, 2023.

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 $ 277 million at October 29, 2023, and $ 258 million at July 30, 2023.

Supplemental Financial Statement Data

(Millions) April 30, 2023 July 31, 2022

(Millions) October 29, 2023 July 30,

Balance Sheets

2 unchanged sentences

$ 1,340 $ 1,291

Three Months Ended Nine Months Ended

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

Three Months Ended

(Millions) October 29, 2023 October 30, 2022

Statements of Earnings

2 unchanged sentences

Net periodic benefit expense (income) other than the service cost ( 2 ) 7

Other ( 1 ) ( 1 ) — 2

Costs associated with pending acquisition (2)

Transition services fees

_______________________________________

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.

(1) Includes accelerated amortization expense of $ 7 million related to customer relationship intangible assets in the three-month period ended October 29, 2023.

(2) Related to the pending acquisition of Sovos Brands.

See Note 18 for additional information.

Pending Acquisition

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 among other things the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act).

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.

On October 23, 2023, we and Sovos Brands each received a request for additional information (the Second Request) from the U.S.

Federal Trade Commission (the FTC) in connection with the FTC’s review of the transaction contemplated by the merger agreement.

Issuance of the Second Request extends the waiting period under the HSR Act until 30 days after both we and Sovos Brands substantially comply with the Second Request, unless the waiting period is extended voluntarily by the parties or terminated earlier by the FTC.

We now expect that the merger will close in calendar 2024, and we will continue to engage with the FTC on its review with the objective of closing the transaction in mid-calendar 2024.

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