Exhibit 99.1
Campbell Soup Company
Unaudited Pro Forma Condensed Consolidated Financial Information
On June 16, 2019, Pepperidge Farm, Incorporated, a wholly-owned subsidiary of Campbell Soup Company (“Campbell”), completed the previously announced sale (the “Transaction”) of Wm. Bolthouse Farms, Inc. (“Bolthouse Farms”) for $500 million pursuant to the terms of a Stock Purchase Agreement, dated as of April 12, 2019. The Transaction is considered a significant disposition for purposes of Item 2.01 of Form 8-K. The unaudited pro forma condensed consolidated financial statements present financial information to give effect to the sale of Bolthouse Farms accounted for as a discontinued operation. The unaudited pro forma condensed consolidated statements of earnings present the consolidated results of continuing operations, assuming the sale occurred on August 3, 2015. The unaudited pro forma condensed consolidated balance sheet as of April 28, 2019, presents the consolidated financial position of Campbell, assuming the sale occurred on that date. The estimated gain is reflected in the unaudited pro forma condensed consolidated balance sheet within earnings retained in the business. The estimated gain on the sale is not reflected in the unaudited pro forma condensed consolidated statements of earnings as there is no continuing impact of the gain on Campbell results. Beginning with the third quarter ended April 28, 2019, Campbell reported the results of Bolthouse Farms as discontinued operations in accordance with Financial Accounting Standards Board Accounting Standards Codification 205, "Presentation of Financial Statements" ("ASC 205"). As of April 28, 2019, the assets and liabilities of Bolthouse Farms were classified as assets and liabilities of discontinued operations.
The unaudited pro forma condensed consolidated financial information is subject to the assumptions and adjustments described in the accompanying notes. The assumptions and adjustments are based on information presently available. Actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial information and accompanying notes should be read in connection with the historical financial statements of Campbell included in its Annual Report on Form 10-K for the year ended July 29, 2018, and its Quarterly Report on Form 10-Q for the period ended April 28, 2019.
The unaudited pro forma condensed consolidated financial information presented is for informational purposes only. It is not intended to represent or be indicative of the consolidated results of operations or financial condition that would have occurred had the sale been completed as of the dates presented, nor is it intended to purport to project future results of operations or financial condition.
On February 25, 2019, Campbell sold its U.S. refrigerated soup business and on April 25, 2019, sold the Garden Fresh Gourmet business. These businesses, along with Bolthouse Farms, were included in the Campbell Fresh operating segment. Beginning with the third quarter ended April 28, 2019, Campbell reported the results of these businesses as discontinued operations in accordance with ASC 205. Therefore, for additional information, the unaudited pro forma condensed consolidated statements of earnings also include additional columns to present the consolidated results of continuing operations assuming the sales of these businesses occurred on August 3, 2015.
CAMPBELL SOUP COMPANY
Unaudited Pro Forma Condensed Consolidated Statement of Earnings
For the Year Ended July 29, 2018
(millions, except per share amounts)
|
| | | | | | | | | | | | | | | | | | | | |
| | | As Reported | | Less Discontinued Operations of Bolthouse Farms (a) | | Subtotal Pro Forma Continuing Operations | | Less Additional Discontinued Operations (e) | | Pro Forma Continuing Operations |
| Net sales | | $ | 8,685 |
| | $ | 727 |
| | $ | 7,958 |
| | $ | 223 |
| | $ | 7,735 |
|
| Costs and expenses | | | | | | | | | | |
| Cost of products sold | | 5,869 |
| | 672 |
| | 5,197 |
| | 205 |
| | 4,992 |
|
| Marketing and selling expenses | | 902 |
| | 44 |
| | 858 |
| | 5 |
| | 853 |
|
| Administrative expenses | | 654 |
| | 36 |
| | 618 |
| | 3 |
| | 615 |
|
| Research and development expenses | | 110 |
| | 4 |
| | 106 |
| | 4 |
| | 102 |
|
| Other expenses / (income) | | 619 |
| | 600 |
| | 19 |
| | 97 |
| | (78 | ) |
| Restructuring charges | | 62 |
| | 1 |
| | 61 |
| | — |
| | 61 |
|
| Total costs and expenses | | 8,216 |
| | 1,357 |
| | 6,859 |
| | 314 |
| | 6,545 |
|
| Earnings (loss) before interest and taxes | | 469 |
| | (630 | ) | | 1,099 |
| | (91 | ) | | 1,190 |
|
| Interest expense | | 201 |
| | — |
| | 201 |
| | — |
| | 201 |
|
| Interest income | | 4 |
| | — |
| | 4 |
| | — |
| | 4 |
|
| Earnings (loss) before taxes | | 272 |
| | (630 | ) | | 902 |
| | (91 | ) | | 993 |
|
| Taxes on earnings | | 11 |
| | (121 | ) | | 132 |
| | (21 | ) | | 153 |
|
| Net earnings (loss) | | 261 |
| | (509 | ) | | 770 |
| | (70 | ) | | 840 |
|
| Less: Net earnings (loss) attributable to noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
|
| Net earnings (loss) attributable to Campbell Soup Company | | $ | 261 |
| | $ | (509 | ) | | $ | 770 |
| | $ | (70 | ) | | $ | 840 |
|
| Per Share — Basic | | | | | | | | | | |
| Net earnings (loss) attributable to Campbell Soup Company | | $ | .87 |
| |
|
| | $ | 2.56 |
| |
|
| | $ | 2.79 |
|
| Weighted average shares outstanding — basic | | 301 |
| |
|
| | 301 |
| |
|
| | 301 |
|
| Per Share — Assuming Dilution | | | | | | | | | | |
| Net earnings (loss) attributable to Campbell Soup Company | | $ | .86 |
| |
|
| | $ | 2.55 |
| |
|
| | $ | 2.78 |
|
| Weighted average shares outstanding — assuming dilution | | 302 |
| |
|
| | 302 |
| |
|
| | 302 |
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
CAMPBELL SOUP COMPANY
Unaudited Pro Forma Condensed Consolidated Statement of Earnings
For the Year Ended July 30, 2017
(millions, except per share amounts)
|
| | | | | | | | | | | | | | | | | | | | |
| | | As Reported | | Less Discontinued Operations of Bolthouse Farms (a) | | Subtotal Pro Forma Continuing Operations | | Less Additional Discontinued Operations (e) | | Pro Forma Continuing Operations |
| Net sales | | $ | 7,890 |
| | $ | 727 |
| | $ | 7,163 |
| | $ | 220 |
| | $ | 6,943 |
|
| Costs and expenses | | | | | | | | | | |
| Cost of products sold | | 4,965 |
| | 650 |
| | 4,315 |
| | 183 |
| | 4,132 |
|
| Marketing and selling expenses | | 855 |
| | 40 |
| | 815 |
| | 13 |
| | 802 |
|
| Administrative expenses | | 550 |
| | 41 |
| | 509 |
| | 4 |
| | 505 |
|
| Research and development expenses | | 111 |
| | 4 |
| | 107 |
| | 3 |
| | 104 |
|
| Other expenses / (income) | | (9 | ) | | 161 |
| | (170 | ) | | 67 |
| | (237 | ) |
| Restructuring charges | | 18 |
| | 2 |
| | 16 |
| | — |
| | 16 |
|
| Total costs and expenses | | 6,490 |
| | 898 |
| | 5,592 |
| | 270 |
| | 5,322 |
|
| Earnings (loss) before interest and taxes | | 1,400 |
| | (171 | ) | | 1,571 |
| | (50 | ) | | 1,621 |
|
| Interest expense | | 112 |
| | — |
| | 112 |
| | — |
| | 112 |
|
| Interest income | | 5 |
| | — |
| | 5 |
| | — |
| | 5 |
|
| Earnings (loss) before taxes | | 1,293 |
| | (171 | ) | | 1,464 |
| | (50 | ) | | 1,514 |
|
| Taxes on earnings | | 406 |
| | (16 | ) | | 422 |
| | (18 | ) | | 440 |
|
| Net earnings (loss) | | 887 |
| | (155 | ) | | 1,042 |
| | (32 | ) | | 1,074 |
|
| Less: Net earnings (loss) attributable to noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
|
| Net earnings (loss) attributable to Campbell Soup Company | | $ | 887 |
| | $ | (155 | ) | | $ | 1,042 |
| | $ | (32 | ) | | $ | 1,074 |
|
| Per Share — Basic | | | | | | | | | | |
| Net earnings (loss) attributable to Campbell Soup Company | | $ | 2.91 |
| |
|
| | $ | 3.42 |
| |
|
| | $ | 3.52 |
|
| Weighted average shares outstanding — basic | | 305 |
| |
|
| | 305 |
| |
|
| | 305 |
|
| Per Share — Assuming Dilution | | | | | | | | | | |
| Net earnings (loss) attributable to Campbell Soup Company | | $ | 2.89 |
| |
|
| | $ | 3.39 |
| |
|
| | $ | 3.50 |
|
| Weighted average shares outstanding — assuming dilution | | 307 |
| |
|
| | 307 |
| |
|
| | 307 |
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
CAMPBELL SOUP COMPANY
Unaudited Pro Forma Condensed Consolidated Statement of Earnings
For the Year Ended July 31, 2016
(millions, except per share amounts)
|
| | | | | | | | | | | | | | | | | | | | |
| | | As Reported | | Less Discontinued Operations of Bolthouse Farms (a) | | Subtotal Pro Forma Continuing Operations | | Less Additional Discontinued Operations (e) | | Pro Forma Continuing Operations |
| Net sales | | $ | 7,961 |
| | $ | 783 |
| | $ | 7,178 |
| | $ | 217 |
| | $ | 6,961 |
|
| Costs and expenses | | | | | | | | | | |
| Cost of products sold | | 5,033 |
| | 656 |
| | 4,377 |
| | 174 |
| | 4,203 |
|
| Marketing and selling expenses | | 852 |
| | 35 |
| | 817 |
| | 9 |
| | 808 |
|
| Administrative expenses | | 575 |
| | 32 |
| | 543 |
| | 5 |
| | 538 |
|
| Research and development expenses | | 105 |
| | 3 |
| | 102 |
| | 2 |
| | 100 |
|
| Other expenses / (income) | | 405 |
| | 156 |
| | 249 |
| | 2 |
| | 247 |
|
| Restructuring charges | | 31 |
| | — |
| | 31 |
| | — |
| | 31 |
|
| Total costs and expenses | | 7,001 |
| | 882 |
| | 6,119 |
| | 192 |
| | 5,927 |
|
| Earnings (loss) before interest and taxes | | 960 |
| | (99 | ) | | 1,059 |
| | 25 |
| | 1,034 |
|
| Interest expense | | 115 |
| | — |
| | 115 |
| | — |
| | 115 |
|
| Interest income | | 4 |
| | — |
| | 4 |
| | — |
| | 4 |
|
| Earnings (loss) before taxes | | 849 |
| | (99 | ) | | 948 |
| | 25 |
| | 923 |
|
| Taxes on earnings | | 286 |
| | 2 |
| | 284 |
| | 9 |
| | 275 |
|
| Net earnings (loss) | | 563 |
| | (101 | ) | | 664 |
| | 16 |
| | 648 |
|
| Less: Net earnings (loss) attributable to noncontrolling interests | | — |
| | — |
| | — |
| | — |
| | — |
|
| Net earnings (loss) attributable to Campbell Soup Company | | $ | 563 |
| | $ | (101 | ) | | $ | 664 |
| | $ | 16 |
| | $ | 648 |
|
| Per Share — Basic | | | | | | | | | | |
| Net earnings (loss) attributable to Campbell Soup Company | | $ | 1.82 |
| |
|
| | $ | 2.15 |
| |
|
| | $ | 2.10 |
|
| Weighted average shares outstanding — basic | | 309 |
| |
|
| | 309 |
| |
|
| | 309 |
|
| Per Share — Assuming Dilution | | | | | | | | | | |
| Net earnings (loss) attributable to Campbell Soup Company | | $ | 1.81 |
| |
|
| | $ | 2.14 |
| |
|
| | $ | 2.08 |
|
| Weighted average shares outstanding — assuming dilution | | 311 |
| |
|
| | 311 |
| |
|
| | 311 |
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
CAMPBELL SOUP COMPANY
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of April 28, 2019
(millions, except per share amounts)
|
| | | | | | | | | | | | | | |
| | | As Reported | | Pro Forma Adjustments | | Notes | | Pro Forma |
| Current assets | | | | | | | | |
| Cash and cash equivalents | | $ | 202 |
| | $ | 483 |
| | (b) | | $ | 685 |
|
| Accounts receivable, net | | 753 |
| | | | | | 753 |
|
| Inventories | | 884 |
| | | | | | 884 |
|
| Other current assets | | 102 |
| | | | | | 102 |
|
| Current assets of discontinued operations | | 220 |
| | (220 | ) | | (c) | | — |
|
| Total current assets | | 2,161 |
| | 263 |
| | | | 2,424 |
|
| Plant assets, net of depreciation | | 2,769 |
| | | | | | 2,769 |
|
| Goodwill | | 4,702 |
| | | | | | 4,702 |
|
| Other intangible assets, net of amortization | | 3,587 |
| | | | | | 3,587 |
|
| Other assets ($78 attributable to variable interest entity) | | 203 |
| | | | | | 203 |
|
| Noncurrent assets of discontinued operations | | 346 |
| | (346 | ) | | (c) | | — |
|
| Total assets | | $ | 13,768 |
| | $ | (83 | ) | | | | $ | 13,685 |
|
| Current liabilities | | | | | | | | |
| Short-term borrowings | | $ | 1,773 |
| | | | | | $ | 1,773 |
|
| Payable to suppliers and others | | 841 |
| | | | | | 841 |
|
| Accrued liabilities | | 672 |
| | | | | | 672 |
|
| Dividends payable | | 107 |
| | | | | | 107 |
|
| Accrued income taxes | | 18 |
| | | | | | 18 |
|
| Current liabilities of discontinued operations | | 100 |
| | (100 | ) | | (c) | | — |
|
| Total current liabilities | | 3,511 |
| | (100 | ) | | | | 3,411 |
|
| Long-term debt | | 7,507 |
| | | | | | 7,507 |
|
| Deferred taxes | | 990 |
| | | | | | 990 |
|
| Other liabilities | | 519 |
| | | | | | 519 |
|
| Noncurrent liabilities of discontinued operations | | 4 |
| | (4 | ) | | (c) | | — |
|
| Total liabilities | | 12,531 |
| | (104 | ) |
| | | 12,427 |
|
| Commitment and contingencies | | | | | | | | |
| Campbell Soup Company shareholders' equity | | | | | | | | |
| Preferred stock; authorized 40 shares; none issued | | — |
| | — |
| | | | — |
|
| Capital stock, $.0375 par value; authorized 560 shares; issued 323 shares | | 12 |
| | — |
| | | | 12 |
|
| Additional paid-in capital | | 360 |
| | — |
| | | | 360 |
|
| Earnings retained in the business | | 2,107 |
| | 19 |
| | (d) | | 2,126 |
|
| Capital stock in treasury, at cost | | (1,077 | ) | | — |
| | | | (1,077 | ) |
| Accumulated other comprehensive income (loss) | | (174 | ) | | 2 |
| | (c) | | (172 | ) |
| Total Campbell Soup Company shareholders' equity | | 1,228 |
| | 21 |
| | | | 1,249 |
|
| Noncontrolling interests | | 9 |
| | | | | | 9 |
|
| Total equity | | 1,237 |
| | 21 |
| | | | 1,258 |
|
| Total liabilities and equity | | $ | 13,768 |
| | $ | (83 | ) | | | | $ | 13,685 |
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
The following items resulted in adjustments reflected in the unaudited pro forma condensed consolidated financial information:
| |
| (a) | The Discontinued Operations of Bolthouse Farms columns in the unaudited pro forma condensed consolidated financial information represent the historical financial results directly attributable to Bolthouse Farms in accordance with ASC 205. |
| |
| (b) | The pro forma adjustment represents proceeds from the sale of $500 million, less $17 million of transaction costs and expenses associated with selling the business. The purchase price is subject to certain post-closing adjustments. |
| |
| (c) | The pro forma adjustments represent the elimination of the assets and liabilities of Bolthouse Farms classified as assets and liabilities of discontinued operations, as well as the accumulated other comprehensive loss of Bolthouse Farms. |
| |
| (d) | The estimated gain of approximately $19 million is reflected as an adjustment to retained earnings. There is no tax impact associated with the gain. This estimate is based on the historical information as of April 28, 2019. The actual amount will be based on balances as of closing, and may differ from the information presented. |
Additional Information
| |
| (e) | On February 25, 2019, Campbell sold its U.S. refrigerated soup business and on April 25, 2019, sold the Garden Fresh Gourmet business. These businesses, along with Bolthouse Farms, were included in the Campbell Fresh operating segment. Beginning with the third quarter ended April 28, 2019, Campbell reported the results of these businesses as discontinued operations in accordance with ASC 205. Therefore, for additional information, the unaudited pro forma condensed consolidated statements of earnings also include additional columns to present the consolidated results of continuing operations assuming the sales of these businesses occurred on August 3, 2015. |
