Segment Information

Commencing in the third quarter of 2018 with the acquisition of Snyder's-Lance, we formed a new U.S. snacking unit, which combines Snyder's-Lance and Pepperidge Farm, and is an operating segment. As of the third quarter of 2018, we have four operating segments based primarily on product type, and three reportable segments. The U.S. snacking operating segment is aggregated with the international biscuits and snacks operating segment to form the Global Biscuits and Snacks reportable segment. The operating segments are aggregated based on similar economic characteristics, products, production processes, types or classes of customers, distribution methods, and regulatory environment. Our reportable segments are as follows:

•

Meals and Beverages segment includes the retail and food service businesses in the U.S., Canada and Latin America. The segment includes the following products: Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans and dinner sauces; Swanson canned poultry; Plum food and snacks; V8 juices and beverages; Campbell’s tomato juice; and as of December 12, 2017, Pacific broth, soups, non-dairy beverages and other simple meals;

•

Global Biscuits and Snacks segment represents an aggregation of the following operating segments: U.S. snacks operating segment, which includes Pepperidge Farm cookies, crackers, bakery and frozen products in U.S. retail, and Snyder’s-Lance pretzels, sandwich crackers, potato chips, tortilla chips and other snacking products in the U.S. and Europe; and the international biscuits and snacks operating segment, which includes Arnott’s biscuits in Australia and Asia Pacific, Kelsen cookies globally, and the simple meals and shelf-stable beverages business in Australia and Asia Pacific; and


•	Campbell Fresh segment includes Bolthouse Farms fresh carrots, carrot ingredients, refrigerated beverages and refrigerated salad dressings; Garden Fresh Gourmet salsa, hummus, dips and tortilla chips; and the U.S. refrigerated soup business.

Through the fourth quarter of 2018, our simple meals and shelf-stable beverage business in Latin America was managed as part of the Global Biscuits and Snacks segment. Beginning in 2019, our business in Latin America is managed as part of the Meals and Beverages segment. Segment results have been adjusted retrospectively to reflect this change.

On August 30, 2018, we announced plans to pursue the divestiture of our international biscuits and snacks operating segment, and the Campbell Fresh segment. The international biscuits and snacks operating segment and the Campbell Fresh segment combined represent approximately $2,100 in net sales in 2018.

We evaluate segment performance before interest, taxes and costs associated with restructuring activities and impairment charges. Unrealized gains and losses on commodity hedging activities are excluded from segment operating earnings and are recorded in Corporate as these open positions represent hedges of future purchases. Upon closing of the contracts, the realized gain or loss is transferred to segment operating earnings, which allows the segments to reflect the economic effects of the hedge without exposure to quarterly volatility of unrealized gains and losses. Only the service cost component of pension and postretirement expense is allocated to segments. All other components of expense, including interest cost, expected return on assets, amortization of prior service credits and recognized actuarial gains and losses are reflected in Corporate and not included in segment operating results. Asset information by segment is not discretely maintained for internal reporting or used in evaluating performance.



	Three Months Ended				Six Months Ended
	January 27, 2019		January 28, 2018		January 27, 2019		January 28, 2018
Net sales
Meals and Beverages	$	1,230	$	1,214	$	2,474	$	2,453
Global Biscuits and Snacks	1,243		708		2,461		1,396
Campbell Fresh	239		257		471		491
Corporate	1		1		1		1
Total	$	2,713	$	2,180	$	5,407	$	4,341



	Three Months Ended						Six Months Ended
	January 27, 2019			January 28, 2018			January 27, 2019			January 28, 2018
Earnings before interest and taxes
Meals and Beverages	$	255		$	284		$	549		$	615
Global Biscuits and Snacks	185			137			339			254
Campbell Fresh	(14		)	(11		)	(17		)	(17		)
Corporate⁽¹⁾	(405		)	(134		)	(481		)	(162		)
Restructuring charges⁽²⁾	(2		)	(33		)	(21		)	(35		)
Total	$	19		$	243		$	369		$	655

_______________________________________

⁽¹⁾

Represents unallocated items. Pension and postretirement benefit mark-to-market adjustments are included in Corporate. There were gains of $14 in the six-month period ended January 28, 2018. Costs related to cost savings initiatives were $22 and $27 for the three-month periods and $49 and $44 in the six-month periods ended January 27, 2019, and January 28, 2018, respectively. Costs of $10 and $12 associated with the planned divestitures were in the three- and six-month periods ended January 27, 2019. Impairment charges of plant assets and intangible assets were $346 and $360 in the three- and- six-month periods ended January 27, 2019, respectively. Impairment charges of intangible assets were $75 in the three- and- six-month periods ended January 28, 2018. See Notes 5 and 13 for additional information. Transaction costs of $24 associated with the acquisition of Snyder's-Lance were in the three- and six-month periods ended January 28, 2018.


⁽²⁾	See Note 7 for additional information.

Our global net sales based on product categories are as follows:



	Three Months Ended				Six Months Ended
	January 27, 2019		January 28, 2018		January 27, 2019		January 28, 2018
Net sales
Soup	$	815	$	814	$	1,604	$	1,621
Snacks	1,225		690		2,434		1,367
Other simple meals	423		434		854		869
Beverages	249		241		514		483
Other	1		1		1		1
Total	$	2,713	$	2,180	$	5,407	$	4,341

Soup includes various soup, broths and stock products. Snacks include cookies, pretzels, crackers, biscuits, popcorn, nuts, potato chips, tortilla chips and other salty snacks and baked products. Other simple meals include sauces, carrot products, refrigerated salad dressings, refrigerated salsa, hummus, dips and Plum foods and snacks.