Business And Geographic Segment Information

9 Months Ended

Apr. 29, 2012

Business And Geographic Segment Information [Abstract]

Business and Geographic Segment Information

Business and Geographic Segment Information

The company reports the results of operations in the following reportable segments: U.S. Simple Meals; Global Baking and Snacking; International Simple Meals and Beverages; U.S. Beverages; and North America Foodservice. The company has eleven operating segments based on product type and geographic location and has aggregated the operating segments into the appropriate reportable segment based on similar economic characteristics; products; production processes; types or classes of customers; distribution methods; and regulatory environment. The segments are discussed in greater detail below.

The U.S. Simple Meals segment aggregates the following operating segments: U.S. Soup and U.S. Sauces. The U.S. Soup retail business includes the following products: Campbell’s condensed and ready-to-serve soups; and Swanson broth and stocks. The U.S. Sauces retail business includes the following products: Prego pasta sauce; Pace Mexican sauce; Campbell’s canned gravies, pasta and beans; and Swanson canned poultry.

The Global Baking and Snacking segment aggregates the following operating segments: Pepperidge Farm cookies, crackers, bakery and frozen products in U.S. retail; and Arnott’s biscuits in Australia and Asia Pacific.

The International Simple Meals and Beverages segment aggregates the simple meals and beverages operating segments outside of the United States, including Europe, the retail business in Canada, and the businesses in Asia Pacific, Latin America and China.

The U.S. Beverages segment represents the U.S. retail beverages business, including the following products: V8 juices and beverages; and Campbell’s tomato juice.

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.

The company’s accounting policies for measuring segment assets and earnings before interest and taxes are substantially consistent with those described in the company’s 2011 Annual Report on Form 10-K. The company evaluates segment performance before interest, taxes, and costs associated with restructuring activities. Beginning in 2012, unrealized gains and losses on commodity hedging activities are excluded from segment operating earnings and are recorded in Corporate expenses as these open positions represent hedges of future purchases. Upon closing of the contracts, the realized gain or loss is transferred to segment operating earnings, which allows the segments to reflect the economic effects of the hedge without exposure to quarterly volatility of unrealized gains and losses. In prior periods, unrealized gains and losses on commodity hedging activities were not material. The manufacturing, warehousing, distribution and selling activities of the company’s U.S. retail business are operated as an integrated platform in order to maximize efficiency and productivity. As a result, assets and capital expenditures of the U.S. Simple Meals and U.S. Beverages segments are not discretely maintained. Depreciation expense associated with the integrated operations, however, is allocated to the U.S. Simple Meals and U.S. Beverages segments based on production hours. 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
	April 29, 2012		May 1, 2011		April 29, 2012		May 1, 2011
Net sales
U.S. Simple Meals	$	567	$	580	$	2,265	$	2,320
Global Baking and Snacking	543		527		1,637		1,597
International Simple Meals and Beverages	349		354		1,110		1,147
U.S. Beverages	208		198		593		583
North America Foodservice	154		154		489		465
Total	$	1,821	$	1,813	$	6,094	$	6,112

	Three Months Ended						Nine Months Ended
	April 29, 2012			May 1, 2011			April 29, 2012			May 1, 2011
Earnings before interest and taxes
U.S. Simple Meals	$	120		$	139		$	554		$	556
Global Baking and Snacking	73			82			232			263
International Simple Meals and Beverages	37			41			138			161
U.S. Beverages	45			54			109			152
North America Foodservice	20			22			75			66
Corporate(1)	(27		)	(31		)	(90		)	(88		)
Restructuring charges(2)	(4		)	—			(9		)	—
Total	$	264		$	307		$	1,009		$	1,110

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(1) Represents unallocated corporate expenses.

(2) See Note 6 for additional information.

The company’s global net sales based on product categories are as follows:

	Three Months Ended				Nine Months Ended
	April 29, 2012		May 1, 2011		April 29, 2012		May 1, 2011
Net Sales
Simple Meals	$	985	$	991	$	3,618	$	3,657
Baked Snacks	576		569		1,735		1,723
Beverages	260		253		741		732
Total	$	1,821	$	1,813	$	6,094	$	6,112

Simple Meals include condensed and ready-to-serve soups, broths and sauces. Baked Snacks include cookies, crackers, biscuits, and other baked products.