Document and Entity Information
Document and Entity Information | ||
9 Months Ended
May. 02, 2010 | Jun. 03, 2010
| |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | 2010-05-02 | |
Document Fiscal Year Focus | 2,010 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | CAMPBELL SOUP CO | |
Entity Central Index Key | 0000016732 | |
Current Fiscal Year End Date | --08-01 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 339,531,815 |
Consolidated Statements of Earn
Consolidated Statements of Earnings (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
May. 02, 2010 | 3 Months Ended
May. 03, 2009 | 9 Months Ended
May. 02, 2010 | 9 Months Ended
May. 03, 2009 |
Consolidated Statements of Earnings [Abstract] | ||||
Net sales | $1,802 | $1,686 | $6,158 | $6,058 |
Costs and expenses | ||||
Cost of products sold | 1,059 | 1,001 | 3,621 | 3,665 |
Marketing and selling expenses | 252 | 246 | 837 | 868 |
Administrative expenses | 156 | 129 | 438 | 407 |
Research and development expenses | 31 | 27 | 88 | 83 |
Other expenses / (income) | 0 | (3) | 1 | (5) |
Restructuring charges | 12 | 12 | ||
Total costs and expenses | 1,510 | 1,400 | 4,997 | 5,018 |
Earnings before interest and taxes | 292 | 286 | 1,161 | 1,040 |
Interest expense | 29 | 26 | 84 | 85 |
Interest income | 2 | 0 | 4 | 2 |
Earnings before taxes | 265 | 260 | 1,081 | 957 |
Taxes on earnings | 97 | 86 | 350 | 294 |
Earnings from continuing operations | 168 | 174 | 731 | 663 |
Earnings from discontinued operations | 4 | |||
Net earnings | $168 | $174 | $731 | $667 |
Per share - basic | ||||
Earnings from continuing operations | 0.49 | 0.49 | 2.11 | 1.84 |
Earnings from discontinued operations | 0.01 | |||
Net earnings | 0.49 | 0.49 | 2.11 | 1.85 |
Dividends | 0.275 | 0.25 | 0.8 | 0.75 |
Weighted average shares outstanding - basic | 339 | 350 | 341 | 354 |
Per share - assuming dilution | ||||
Earnings from continuing operations | 0.49 | 0.49 | 2.09 | 1.82 |
Earnings from discontinued operations | 0.01 | |||
Net earnings | 0.49 | 0.49 | 2.09 | 1.83 |
Weighted average shares outstanding - assuming dilution | 342 | 351 | 344 | 357 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | May. 02, 2010
| Aug. 02, 2009
|
Current assets | ||
Cash and cash equivalents | $80 | $51 |
Accounts receivable | 543 | 528 |
Inventories | 639 | 824 |
Other current assets | 169 | 148 |
Total current assets | 1,431 | 1,551 |
Plant assets, net of depreciation | 1,995 | 1,977 |
Goodwill | 1,945 | 1,901 |
Other intangible assets, net of amortization | 512 | 522 |
Other assets | 103 | 105 |
Total assets | 5,986 | 6,056 |
Current liabilities | ||
Short-term borrowings | 945 | 378 |
Payable to suppliers and others | 430 | 569 |
Accrued liabilities | 568 | 579 |
Dividend payable | 95 | 88 |
Accrued income taxes | 76 | 14 |
Total current liabilities | 2,114 | 1,628 |
Long-term debt | 1,542 | 2,246 |
Deferred taxes | 297 | 237 |
Other liabilities | 937 | 1,214 |
Total liabilities | 4,890 | 5,325 |
Campbell Soup Company shareowners' equity | ||
Preferred stock; authorized 40 shares; none issued | ||
Capital stock, $.0375 par value; authorized 560 shares; issued 542 shares | 20 | 20 |
Additional paid-in capital | 328 | 332 |
Earnings retained in the business | 8,742 | 8,288 |
Capital stock in treasury, at cost | (7,377) | (7,194) |
Accumulated other comprehensive loss | (620) | (718) |
Total Campbell Soup Company shareowners' equity | 1,093 | 728 |
Noncontrolling interest | 3 | 3 |
Total equity | 1,096 | 731 |
Total liabilities and equity | $5,986 | $6,056 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
Share data in Millions | May. 02, 2010
| Aug. 02, 2009
|
Consolidated Balance Sheets [Abstract] | ||
Preferred stock, shares, authorized | 40 | 40 |
Preferred stock, shares, issued | 0 | 0 |
Capital stock, par value | 0.0375 | 0.0375 |
Capital stock, shares, authorized | 560 | 560 |
Capital stock, shares, issued | 542 | 542 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | ||
In Millions | 9 Months Ended
May. 02, 2010 | 9 Months Ended
May. 03, 2009 |
Cash flows from operating activities: | ||
Net earnings | $731 | $667 |
Adjustments to reconcile net earnings to operating cash flow | ||
Restructuring charges | 12 | |
Stock-based compensation | 68 | 63 |
Depreciation and amortization | 185 | 195 |
Deferred income taxes | 44 | 137 |
Other, net | 76 | 38 |
Changes in working capital | ||
Accounts receivable | (6) | 10 |
Inventories | 193 | 67 |
Prepaid assets | 8 | 19 |
Accounts payable and accrued liabilities | (125) | (302) |
Pension fund contributions | (281) | (5) |
Receipts from (payments of) hedging activities | 10 | (50) |
Other | (56) | (33) |
Net cash provided by operating activities | 859 | 806 |
Cash flows from investing activities: | ||
Purchases of plant assets | (177) | (176) |
Sales of plant assets | 5 | 1 |
Sale of business, net of cash divested | 38 | |
Other, net | 3 | (6) |
Net cash used in investing activities | (169) | (143) |
Cash flows from financing activities: | ||
Net short-term repayments | (161) | (81) |
Long-term borrowings | 300 | |
Repayments of notes payable | (300) | |
Dividends paid | (270) | (261) |
Treasury stock purchases | (315) | (409) |
Treasury stock issuances | 75 | 69 |
Excess tax benefits on stock-based compensation | 6 | 18 |
Other, net | (5) | |
Net cash used in financing activities | (665) | (669) |
Effect of exchange rate changes on cash | 4 | (14) |
Net change in cash and cash equivalents | 29 | (20) |
Cash and cash equivalents - beginning of period | 51 | 81 |
Cash and cash equivalents - end of period | $80 | $61 |
Consolidated Statements of Equi
Consolidated Statements of Equity (USD $) | |||||||
In Millions | Capital Stock Issued
| Capital Stock in Treasury
| Additional Paid-in Capital
| Earnings Retained in the Business
| Accumulated Other Comprehensive Income (Loss)
| Noncontrolling Interest
| Total
|
Balance, Value at Aug. 03, 2008 | $20 | ($6,812) | $337 | $7,909 | ($136) | $3 | $1,321 |
Balance, Shares at Aug. 03, 2008 | 542 | (186) | |||||
Comprehensive income (loss) | |||||||
Net earnings | 667 | 0 | 667 | ||||
Foreign currency translation adjustments, net of tax | (303) | 0 | (303) | ||||
Cash-flow hedges, net of tax | (17) | (17) | |||||
Pension and postretirement benefits, net of tax | 22 | 22 | |||||
Other comprehensive income (loss) | (298) | 0 | (298) | ||||
Total comprehensive income (loss) | 369 | ||||||
Dividends | (269) | (269) | |||||
Treasury stock purchased - Value | (409) | (409) | |||||
Treasury stock purchased - Shares | (13) | ||||||
Treasury stock issued under management incentive and stock option plans - Value | 142 | (21) | 121 | ||||
Treasury stock issued under management incentive and stock option plans - Shares | 4 | ||||||
Balance, Value at May. 03, 2009 | 20 | (7,079) | 316 | 8,307 | (434) | 3 | 1,133 |
Balance, Shares at May. 03, 2009 | 542 | (195) | |||||
Balance, Value at Aug. 02, 2009 | 20 | (7,194) | 332 | 8,288 | (718) | 3 | 731 |
Balance, Shares at Aug. 02, 2009 | 542 | (199) | |||||
Comprehensive income (loss) | |||||||
Net earnings | 731 | 0 | 731 | ||||
Foreign currency translation adjustments, net of tax | 68 | 0 | 68 | ||||
Cash-flow hedges, net of tax | 4 | 4 | |||||
Pension and postretirement benefits, net of tax | 26 | 26 | |||||
Other comprehensive income (loss) | 98 | 0 | 98 | ||||
Total comprehensive income (loss) | 829 | ||||||
Dividends | (277) | (277) | |||||
Treasury stock purchased - Value | (315) | (315) | |||||
Treasury stock purchased - Shares | (9) | ||||||
Treasury stock issued under management incentive and stock option plans - Value | 132 | (4) | 128 | ||||
Treasury stock issued under management incentive and stock option plans - Shares | 4 | ||||||
Balance, Value at May. 02, 2010 | $20 | ($7,377) | $328 | $8,742 | ($620) | $3 | $1,096 |
Balance, Shares at May. 02, 2010 | 542 | (204) |
1_Consolidated Statements of Eq
Consolidated Statements of Equity (Parenthetical) (USD $) | ||||
3 Months Ended
May. 02, 2010 | 3 Months Ended
May. 03, 2009 | 9 Months Ended
May. 02, 2010 | 9 Months Ended
May. 03, 2009 | |
Consolidated Statements of Equity [Abstract] | ||||
Dividends per share | 0.275 | 0.25 | 0.8 | 0.75 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting | |
9 Months Ended
May. 02, 2010 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 1.Basis of Presentation and Significant Accounting Policies The financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the indicated periods. All such adjustments are of a normal recurring nature. The accounting policies used in preparing these financial statements are consistent with those applied in the Annual Report on Form 10-K for the year ended August2, 2009, except for the adoption of new financial accounting standards, as discussed in Note 2. Certain amounts in prior-year financial statements were reclassified to conform to the current-year presentation. The results for the period are not necessarily indicative of the results to be expected for other interim periods or the full year. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | |
9 Months Ended
May. 02, 2010 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 2.Recent Accounting Pronouncements In December 2007, the Financial Accounting Standards Board (FASB) issued authoritative guidance which establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It requires a noncontrolling interest in a subsidiary, which was formerly known as minority interest, to be classified as a separate component of total equity in the consolidated financial statements. The company retrospectively adopted the new noncontrolling interest guidance in the first quarter of fiscal 2010. The adoption did not have a material impact on the financial statements. See Note 9 for additional information. In December 2007, the FASB issued authoritative guidance for business combinations, which establishes the principles and requirements for how an acquirer recognizes the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date with limited exceptions. The guidance requires acquisition-related transaction costs to be expensed as incurred rather than capitalized as a component of the business combination. The provisions as revised were effective as of the first quarter of fiscal 2010 and will be applied to any business combinations entered into in fiscal 2010 and thereafter. In September 2006, the FASB issued authoritative guidance for fair value measurements, which establishes a definition of fair value, provides a framework for measuring fair value and expands the disclosure requirements about fair value measurements. This guidance does not require any new fair value measurements but rather applies to all other accounting pronouncements that require or permit fair value measurements. In February 2008, the FASB issued authoritative guidance which delayed by a year the effective date for certain nonfinancial assets and liabilities. The company adopted the provisions of the guidance for financial assets and liabilities in the first quarter of fiscal 2009. The adoption did not have a material impact on the consolidated financial statements. The company adopted the remaining provisions in the first quarter of fiscal 2010 for nonfinancial assets and liabilities, including goodwill and intangible assets. The adoption likewise did not have a material impact on the consolidated financial statements. See Note 13 for additional information. In January 2010, the FASB issued additional authoritative guidance related to fair value measurements and disclosures. The guidance requires disclosure of details of significant transfers in and out of Level 1 and Level 2 fair value measurements. Level 1 fair value measurements are based on unadjusted quoted market prices. Level 2 fair value measurements are based on significant inputs, other than Level 1, that are observable for the asset/liability through corroboration with observable market data. The guidance also clarifies the existing disclosure requirements for the level of disaggregation of fair value measurements and the disclosures on inputs and valuation techniques. The company adopted these pro |
Discontinued Operations
Discontinued Operations | |
9 Months Ended
May. 02, 2010 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | 3.Discontinued Operations On March 18, 2008, the company completed the sale of its Godiva Chocolatier business for $850. The purchase price was subject to certain post-closing adjustments, which resulted in an additional $20 of proceeds. The company reflected the results of this business as discontinued operations in the consolidated statements of earnings. The company used approximately $600 of the net proceeds to purchase company stock. The company recognized a $4 benefit in Earnings from discontinued operations during the three-month period ended February 1, 2009, as a result of an adjustment to the tax liability associated with the sale. |
Comprehensive Income
Comprehensive Income (Loss) | |
9 Months Ended
May. 02, 2010 | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income (Loss) | 4.Comprehensive Income (Loss) Total comprehensive income (loss) is comprised of net earnings, net foreign currency translation adjustments, net unamortized pension and postretirement benefits adjustments and net unrealized gains and losses on cash-flow hedges. Total comprehensive income for the three-month periods ended May 2, 2010, and May 3, 2009, was $203 and $275, respectively. Total comprehensive income for the nine-month periods ended May 2, 2010, and May 3, 2009, was $829 and $369, respectively. The components of Accumulated other comprehensive income (loss) consisted of the following: May2, August 2, 2010 2009 Foreign currency translation adjustments, net of tax (1) $ 161 $ 93 Cash-flow hedges, net of tax (2) (16) (20) Unamortized pension and postretirement benefits, net of tax (3): Net actuarial loss (762) (787) Prior service cost (3) (4) Total Accumulated other comprehensive income (loss) $ (620) $ (718) ____________ (1) Includes a tax expense of $3 as of May2, 2010, and $7 as of August 2, 2009. (2) Includes a tax benefit of $9 as of May2, 2010, and $11 as of August2, 2009. (3) Includes a tax benefit of $438 as of May2, 2010, and $442 as of August 2, 2009. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | |
9 Months Ended
May. 02, 2010 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 5.Goodwill and Intangible Assets The following table shows the changes in the carrying amount of goodwill by business segment: International U.S. Soup, Baking Soup, Sauces North Sauces and and and America Beverages Snacking Beverages Foodservice Total Balance at August2, 2009 $ 434 $ 700 $ 621 $ 146 $ 1,901 Foreign currency translation adjustment - 70 (26) - 44 Balance at May2, 2010 $ 434 $ 770 $ 595 $ 146 $ 1,945 The following table sets forth balance sheet information for intangible assets, excluding goodwill, subject to amortization and intangible assets not subject to amortization: May2, August2, 2010 2009 Intangible Assets: Non-amortizable intangible assets $ 498 $ 508 Amortizable intangible assets 21 21 519 529 Accumulated amortization (7) (7) Total net intangible assets $ 512 $ 522 Non-amortizable intangible assets consist of trademarks. Amortizable intangible assets consist substantially of process technology and customer intangibles. Amortization related to these assets was less than $1 for the nine-month periods ended May 2, 2010, and May 3, 2009. The estimated aggregated amortization expense for each of the five succeeding fiscal years is less than $1 per year. Asset useful lives range from 10 to 20 years. |
Business and Geographic Segment
Business and Geographic Segment Information | |
9 Months Ended
May. 02, 2010 | |
Business and Geographic Segment Information [Abstract] | |
Business and Geographic Segment Information | 6.Business and Geographic Segment Information Campbell Soup Company, together with its consolidated subsidiaries, is a global manufacturer and marketer of high-quality, branded convenience food products. The company manages and reports the results of operations in the following segments: U.S. Soup, Sauces and Beverages; Baking and Snacking; International Soup, Sauces and Beverages; and North America Foodservice. The U.S. Soup, Sauces and Beverages segment includes the following retail businesses: Campbell's condensed and ready-to-serve soups; Swanson broth, stocks and canned poultry; Prego pasta sauce; Pace Mexican sauce; Campbell's canned pasta, gravies, and beans; V8 juice and juice drinks; and Campbell's tomato juice. The Baking and Snacking segment includes the following businesses: Pepperidge Farm cookies, crackers, bakery and frozen products in U.S. retail; and Arnott's biscuits in Australia and Asia Pacific. The International Soup, Sauces and Beverages segment includes the soup, sauce and beverage businesses outside of the United States, including Europe, Latin America, the Asia Pacific region, as well as the emerging markets of Russia and China and the retail business in Canada. The North America Foodservice segment represents the distribution of products such as soup, specialty entrees, beverage products, other prepared foods and Pepperidge Farm products through various food service channels in the United States and Canada. Accounting policies for measuring segment assets and earnings before interest and taxes are substantially consistent with those described in the company's 2009 Annual Report on Form 10-K. The company evaluates segment performance before interest and taxes. North America Foodservice products are principally produced by the tangible assets of the company's other segments, except for refrigerated soups, which are produced in a separate facility, and certain other products, which are produced under contract manufacturing agreements. Tangible assets of the company's other segments are not allocated to the North America Foodservice operations. Depreciation, however, is allocated to North America Foodservice based on production hours. Three Months Ended Nine Months Ended May2, May3, May2, May3, 2010 2009 2010 2009 Net sales U.S. Soup, Sauces and Beverages $ 848 $ 808 $ 3,056 $ 3,134 Baking and Snacking 477 431 1,496 1,380 International Soup, Sauces and Beverages 331 297 1,142 1,068 North America Foodservice 146 150 464 476 Total $ 1,802 $ 1,686 $ 6,158 $ 6,058 Three Months Ended Nine Months Ended May2, May3, May2, May3, 2010 2009 2010 2009 Earnings before interest and taxes U.S. Soup, Sauces and Beverages $ 214 $ 195 $ 804 $ 779 Baking and Snacking(1) 76 57 249 193 International Soup, Sauces and Beverages 37 29 155 117 North America Foodservice(1) (3) 13 40 34 Corporate(2) (32) (8) (87) (83) Tot |
Restructuring Charges
Restructuring Charges | |
9 Months Ended
May. 02, 2010 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | 7.Restructuring Charges On April 28, 2008, the company announced a series of initiatives to improve operational efficiency and long-term profitability, including selling certain salty snack food brands and assets in Australia, closing certain production facilities in Australia and Canada, and streamlining the company's management structure. As a result of these initiatives, in 2008, the company recorded a restructuring charge of $175 ($102 after tax or $.27 per share). The charge consisted of a net loss of $120 ($64 after tax) on the sale of certain Australian salty snack food brands and assets; $45 ($31 after tax) of employee severance and benefit costs, including the estimated impact of curtailment and other pension charges; and $10 ($7 after tax) of property, plant and equipment impairment charges. In addition, approximately $7 ($5 after tax or $.01 per share) of costs related to these initiatives were recorded in Cost of products sold, primarily representing accelerated depreciation on property, plant and equipment. The aggregate after-tax impact of restructuring charges and related costs in 2008 was $107, or $.28 per share. In 2009, the company recorded approximately $22 ($15 after tax or $.04 per share) of costs related to the 2008 initiatives in Cost of products sold. Approximately $17 ($12 after tax) of the costs represented accelerated depreciation on property, plant and equipment; approximately $4 ($2 after tax) related to other exit costs; and approximately $1 related to employee severance and benefit costs, including other pension charges. Of the amount recorded in 2009, costs of $6 ($4 after tax or $.01 per share) were recorded in the third quarter, while costs of $21 ($14 after tax or $.04 per share) were recorded through the nine-month period ended May 3, 2009. Approximately $17 ($12 after tax) of the costs represented accelerated depreciation on property, plant and equipment, and approximately $4 ($2 after tax) related to other exit costs. In the third quarter of 2010, the company recorded a restructuring charge of $12 ($8 after tax or $.02 per share) for pension benefit costs, which represented the final costs associated with the 2008 initiatives. The pension benefit costs were included in the pension obligation on the Consolidated Balance Sheets. See Note 10 to the Consolidated Financial Statements. A summary of restructuring reserves at May 2, 2010, is as follows: Accrued Accrued Balance at Balance at August2, Cash May 2, 2009 Payments 2010 Severance pay and benefits $ 4 (3) $ 1 A summary of restructuring charges incurred in 2008 through 2010 by reportable segment is as follows: International U.S. Soup, Baking Soup, Sauces North Sauces and And And America Beverages Snacking Beverages Foodservice Total Severance pay and benefits $ $ 14 $ 9 $ 35 $ 58 Asset impairment/accelerated depreciation 131 23 154 Other exit costs 2 2 4 $ $ 147 $ 9 $ 60 $ 216 |
Earnings per Share
Earnings per Share | |
9 Months Ended
May. 02, 2010 | |
Earnings per Share [Abstract] | |
Earnings per Share | 8. Earnings per Share In June 2008, the FASB issued accounting guidance related to the calculation of earnings per share. The guidance provides that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The company adopted and retrospectively applied the new guidance in the first quarter of fiscal 2010. The retrospective application of the provisions resulted in a reduction of previously reported basic net earnings per share of $.01, for the three-month period ended May 3, 2009. There was no change to the previously reported diluted net earnings per share for the three-month period ended May 3, 2009. For the nine-month period ended May 3, 2009, the retrospective application resulted in a reduction of the previously reported basic earnings per share from continuing operations and net earnings of $.03 and of the previously reported diluted earnings per share from continuing operations and net earnings of $.02. There was no change to the previously reported basic and diluted earnings per share from discontinued operations for the nine-month period ended May 3, 2009. The computation of basic and diluted earnings per share attributable to common shareowners is as follows: Three Months Ended Nine Months Ended May2, May3, May2, May3, 2010 2009 2010 2009 Earnings from continuing operations $ 168 $ 174 $ 731 $ 663 Less: Allocation to participating securities (2) (3) (12) (12) Available to common shareowners $ 166 $ 171 $ 719 $ 651 Earnings from discontinued operations $ - $ - $ - $ 4 Less: Allocation to participating securities - - - - Available to common shareowners $ - $ - $ - $ 4 Net earnings $ 168 $ 174 $ 731 $ 667 Less: Allocation to participating securities (2) (3) (12) (12) Available to common shareowners $ 166 $ 171 $ 719 $ 655 Weighted average shares outstanding basic 339 350 341 354 Effect of dilutive securities: stock options 3 1 3 3 Weighted average shares outstanding diluted 342 351 344 357 Three Months Ended Nine Months Ended May2, May3, May2, May3, 2010 2009 2010 2009 Earnings from continuing operations per common share: Basic $ .49 $ .49 $ 2.11 $ 1.84 Diluted $ .49 $ .49 $ 2.09 $ 1.82 Earnings from discontinued operations per common share: Basic $ - $ - $ - $ .01 Diluted $ - $ - $ - $ .01 Net earnings per common share: Basic $ .49 $ .49 $ 2.11 |
Noncontrolling Interest
Noncontrolling Interest | |
9 Months Ended
May. 02, 2010 | |
Noncontrolling interest [Abstract] | |
Noncontrolling Interest | 9. Noncontrolling Interest The company owns a 70% controlling interest in a Malaysian manufacturing company. The noncontrolling interest in this entity is included in Total equity in the Consolidated Balance Sheets. The earnings attributable to the noncontrolling interest were less than $1 for the three- and nine-month periods ended May 2, 2010, and May 3, 2009, and were included in Other expenses/(income) in the Consolidated Statements of Earnings. |
Pension and Postretirement Bene
Pension and Postretirement Benefits | |
9 Months Ended
May. 02, 2010 | |
Pension and Postretirements Benefits [Abstract] | |
Pension and Postretirement Benefits | 10.Pension and Postretirement Benefits The company sponsors certain defined benefit plans and postretirement medical benefit plans for employees. Components of benefit expense were as follows: Three Months Ended Nine Months Ended Pension Postretirement Pension Postretirement May2, May3, May2, May3, May2, May3, May2, May3, 2010 2009 2010 2009 2010 2009 2010 2009 Service cost $ 14 $ 11 $ 1 $ 1 $ 41 $ 34 $ 3 $ 3 Interest cost 30 30 4 5 91 91 14 16 Expected return on plan assets (43) (40) (128) (122) Settlement costs 12 12 Amortization of prior service cost 1 1 2 2 Recognized net actuarial loss 12 4 1 36 13 1 Net periodic benefit expense $ 26 $ 6 $ 6 $ 6 $ 54 $ 18 $ 18 $ 19 The settlement costs in 2010 are related to the closure of a plant in Canada. The settlement costs are included in Restructuring charges in the Consolidated Statements of Earnings. See Note 7 for additional information. As of May 2, 2010, a contribution of $260 was made to a U.S. pension plan and contributions of $21 were made to non-U.S. pension plans. No additional U.S. pension plan contributions are expected this fiscal year. Contributions to non-U.S. pension plans are expected to be approximately $5 during the remainder of the fiscal year. |
Taxes on Earnings
Taxes on Earnings | |
9 Months Ended
May. 02, 2010 | |
Income Tax Expense (Benefit) [Abstract] | |
Taxes on Earnings | 11.Taxes on Earnings In the third quarter of 2010, the company recorded deferred tax expense of $10 due to the enactment of U.S. health care legislation in March 2010. The law changed the tax treatment of subsidies to companies that provide prescription drug benefits to retirees. Accordingly, the company recorded the non-cash charge to reduce the value of the deferred tax asset associated with the subsidy. |
Financial Instruments
Financial Instruments | |
9 Months Ended
May. 02, 2010 | |
Financial Instruments [Abstract] | |
Financial Instruments | 12.Financial Instruments The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value. The fair value of short-term borrowings and long-term debt as of May 2, 2010, was $979 and $1,661, respectively, and was based on quoted market prices or pricing models using current market rates. The principal market risks to which the company is exposed are changes in foreign currency exchange rates, interest rates, and commodity prices. In addition, the company is exposed to equity price changes related to certain deferred compensation obligations. In order to manage these exposures, the company follows established risk management policies and procedures, including the use of derivative contracts such as swaps, forwards, commodity futures and option contracts. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. The company's derivative programs include strategies that both qualify and do not qualify for hedge accounting treatment. The company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. The company minimizes the counterparty credit risk on these transactions by dealing only with leading, credit-worthy financial institutions having long-term credit ratings of "A" or better. In addition, the contracts are distributed among several financial institutions, thus minimizing credit-risk concentration. The company does not have credit-risk-related contingent features in its derivative instruments as of May 2, 2010. Foreign Currency Exchange Risk The company is exposed to foreign currency exchange risk related to its international operations, including non-functional currency, intercompany debt and net investments in subsidiaries. The company is also exposed to foreign exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries. The company utilizes foreign exchange forward purchase and sale contracts as well as cross-currency swaps to hedge these exposures. The contracts are designated as cash-flow hedging instruments or are undesignated. The company typically hedges portions of its forecasted foreign currency transaction exposure with foreign exchange forward contracts for up to 18 months. To hedge currency exposures related to intercompany debt, cross-currency swap contracts are entered into for periods consistent with the underlying debt. As of May 2, 2010, cross-currency swap contracts mature in 2010 through 2014. Principal currencies hedged include the Australian dollar, euro, Canadian dollar, Swedish krona, New Zealand dollar, British pound and Japanese yen. The notional amount of foreign exchange forward and cross-currency swap contracts accounted for as cash-flow hedges was $339 and $325 at May 2, 2010, and May 3, 2009, respectively. The effective portion of the changes in fair value on these instruments is recorded in other comp |
Fair Value Measurements
Fair Value Measurements | |
9 Months Ended
May. 02, 2010 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 13.Fair Value Measurements The company is required to categorize financial assets and liabilities based on the following fair value hierarchy: Level 1: Observable inputs that reflect quoted prices (unadjusted)for identical assets or liabilities in active markets. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with observable market data. Level 3: Unobservable inputs that reflect the reporting entity's own assumptions. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. When available, the company uses unadjusted quoted market prices to measure the fair value and classifies such items as Level 1. If quoted market prices are not available, the company bases fair value upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Items valued using internally generated models are classified according to the lowest level input or value driver that is significant to the calculation. The following table presents the company's financial assets and liabilities that are measured at fair value on a recurring basis at May 2, 2010, consistent with the fair value hierarchy: Fair Value Fair Value Measurements at as of May2, 2010 Using May 2, Fair Value Hierarchy 2010 Level 1 Level 2 Level 3 Assets Interest rate swaps (1) $ 41 $ $ 41 $ Foreign exchange forward contracts (2) 1 1 Cross-currency swap contracts (3) 11 11 Deferred compensation derivatives (4) 2 2 Commodity derivatives (5) 4 4 Total assets at fair value $ 59 $ 4 $ 55 $ Fair Value Fair Value Measurements at as of May 2, 2010 Using May2, Fair Value Hierarchy 2010 Level 1 Level 2 Level 3 Liabilities Interest rate swaps (1) $ 5 $ $ 5 $ Foreign exchange forward contracts (2) 7 7 Cross-currency swap contracts (3) 62 62 Commodity derivatives (5) 4 4 Deferred compensation obligation (6) 148 96 52 Total liabilities at fair value $ 226 $ 100 $ 126 $ ____________ (1) Based on LIBOR swap rates. (2) Based on observable market transactions of spot currency rates and forward rates. (3) Based on observable local benchmarks for currency and interest rates. (4) Based on LIBOR and equity index swap rates. (5) Based on quoted futures exchanges. (6) Based on the fair value of the participants' investments. |
Share Repurchase Programs
Share Repurchase Programs | |
9 Months Ended
May. 02, 2010 | |
Share Repurchase Programs [Abstract] | |
Share Repurchase Programs | 14.Share Repurchase Programs In June 2008, the company's Board of Directors authorized the purchase of up to $1,200 of company stock through fiscal 2011. This program began in fiscal 2009. In addition to this publicly announced program, the company repurchases shares to offset the impact of dilution from shares issued under the company's stock compensation plans. During the nine-month period ended May 2, 2010, the company repurchased 9 million shares at a cost of $315. Of this amount, $182 was used to repurchase shares pursuant to the company's June 2008 publicly announced share repurchase program. Approximately $618 remains available under this program as of May 2, 2010. During the nine-month period ended May 3, 2009, the company repurchased 13 million shares at a cost of $409. Of this amount, $291 was used to repurchase shares pursuant to the company's June 2008 publicly announced share repurchase program. |
Stock-based Compensation
Stock-based Compensation | |
9 Months Ended
May. 02, 2010 | |
Stock-based Compensation [Abstract] | |
Stock-based Compensation | 15. Stock-based Compensation The company provides compensation benefits by issuing unrestricted stock, restricted stock and restricted stock units (including EPS performance restricted stock/units and total shareowner return (TSR) performance restricted stock/units). In previous fiscal years, the company also issued stock options and stock appreciation rights to provide compensation benefits. Total pre-tax stock-based compensation recognized in Earnings from continuing operations was $23 and $19 for the three-month periods ended May 2, 2010, and May 3, 2009, respectively. Tax-related benefits of $8 and $7 were also recognized for the three-month periods ended May 2, 2010, and May 3, 2009, respectively. Total pre-tax stock-based compensation recognized in Earnings from continuing operations was $68 and $63 for the nine-month periods ended May 2, 2010, and May 3, 2009, respectively. Tax-related benefits of $25 and $23 were also recognized for the nine-month periods ended May 2, 2010, and May 3, 2009, respectively. Cash received from the exercise of stock options was $75 and $69 for the nine-month periods ended May 2, 2010, and May 3, 2009, respectively, and is reflected in cash flows from financing activities in the Consolidated Statements of Cash Flows. The following table summarizes stock option activity as of May 2, 2010: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life Value (Options in thousands) Outstanding at August2, 2009 17,552 $ 27.08 Granted $ Exercised (2,724) $ 27.93 Terminated (82) $ 34.02 Outstanding at May2, 2010 14,746 $ 26.84 2.8 $133 Exercisable at May2, 2010 14,746 $ 26.84 2.8 $133 The total intrinsic value of options exercised during the nine-month periods ended May 2, 2010, and May 3, 2009, was $17 and $30, respectively. As of January 2009, compensation related to stock options was fully expensed. The company measured the fair value of stock options using the Black-Scholes option pricing model. The following table summarizes time-lapse restricted stock/units and EPS performance restricted stock/units as of May 2, 2010: Weighted- Average Grant-Date Shares/Units Fair Value (Restricted stock/units in thousands) Nonvested at August2, 2009 2,073 $ 38.17 Granted 1,395 $ 32.21 Vested (955) $ 37.66 Forfeited (87) $ 35.43 Nonvested at May2, 2010 2,426 $ 35.04 The fair value of time-lapse restricted stock/units and EPS performance restricted stock/units is determined based on the number of shares granted and the quoted price of the company's stock at the date of grant. Time-lapse restricted stock/units granted in fiscal 2006 and forward are expensed on a straight-line basis over the vesting period, except for awards issued to retirement-eligible participants, which are expensed on an accelerated basis. EPS restricted stock/units are expensed on a graded-vesting basis, except for awards issued to retirement-e |
Inventories
Inventories | |
9 Months Ended
May. 02, 2010 | |
Inventories [Abstract] | |
Inventories | 16.Inventories May2, August 2, 2010 2009 Raw materials, containers and supplies $ 226 $ 324 Finished products 413 500 $ 639 $ 824 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | |
9 Months Ended
May. 02, 2010 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 17. Supplemental Cash Flow Information Other cash used in operating activities for the nine-month periods is comprised of the following: May2, May3, 2010 2009 Benefit related payments $ (47) $ (41) Other (9) 8 $ (56) $ (33) |