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. Through the second quarter of 2019, we had four operating segments based primarily on product type, and three reportable segments. The operating segments were Meals and Beverages; U.S. snacking; international biscuits and snacks; and Campbell Fresh. 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.

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.

On February 25, 2019, we sold our U.S refrigerated soup business. On April 25, 2019, we sold our Garden Fresh Gourmet business. On April 12, 2019, we signed a definitive agreement for the sale of Bolthouse Farms to an affiliate of Butterfly Equity. These businesses were historically included in the Campbell Fresh segment. Beginning in the third quarter of 2019, the results of these businesses are reported as discontinued operations for the periods presented. A portion of the U.S. refrigerated soup business historically included in Campbell Fresh was retained, and is now reported in Meals and Beverages. Prior periods have been adjusted to conform to the current presentation. 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; and

•

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.

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.

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				Nine Months Ended
	April 28, 2019		April 29, 2018		April 28, 2019		April 29, 2018
Net sales
Meals and Beverages	$	1,024	$	1,033	$	3,513	$	3,501
Global Biscuits and Snacks	1,154		843		3,615		2,239
Corporate	—		2		1		3
Total	$	2,178	$	1,878	$	7,129	$	5,743



	Three Months Ended						Nine Months Ended
	April 28, 2019			April 29, 2018			April 28, 2019			April 29, 2018
Earnings before interest and taxes
Meals and Beverages	$	207		$	218		$	753		$	832
Global Biscuits and Snacks	139			121			478			375
Corporate⁽¹⁾	(79		)	(157		)	(200		)	(249		)
Restructuring charges⁽²⁾	(1		)	(24		)	(21		)	(58		)
Total	$	266		$	158		$	1,010		$	900

_______________________________________

⁽¹⁾

Represents unallocated items. Pension and postretirement benefit settlement and mark-to-market adjustments are included in Corporate. There were settlement charges of $28 in the three- and nine-month periods ended April 28, 2019, and mark-to-market gains of $14 in the nine-month period ended April 29, 2018. Costs related to cost savings initiatives were $19 and $45 for the three-month periods and $68 and $89 in the nine-month periods ended April 28, 2019, and April 29, 2018, respectively. Costs of $2 and $7 associated with the planned divestiture of our international biscuits and snacks operating segment were in the three- and nine-month periods ended April 28, 2019, respectively. Transaction and integration costs associated with the acquisition of Snyder's-Lance were $72 and $96 in the three- and nine-month periods ended April 29, 2018, respectively. A charge of $22 related to the settlement of a legal claim was included in the three- and nine-month periods ended April 29, 2018.


⁽²⁾	See Note 8 for additional information.

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



	Three Months Ended				Nine Months Ended
	April 28, 2019		April 29, 2018		April 28, 2019		April 29, 2018
Net sales
Soup	$	560	$	564	$	2,108	$	2,113
Snacks	1,138		818		3,567		2,180
Other simple meals	286		293		879		903
Beverages	194		203		574		545
Other	—		—		1		2
Total	$	2,178	$	1,878	$	7,129	$	5,743

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 and Plum products.