Discontinued Operations

On August 30, 2018, we announced plans to pursue the divestiture of businesses within two operating segments: our international biscuits and snacks operating segment, which includes Arnott’s, Kelsen and our operations in Indonesia, Malaysia, Hong Kong and Japan; and the Campbell Fresh operating segment, which includes Bolthouse Farms, Garden Fresh Gourmet and the U.S. refrigerated soup business.

We completed the sale of the Campbell Fresh operating segment in 2019. Within Campbell Fresh, on February 25, 2019, we sold our U.S. refrigerated soup business, and on April 25, 2019, we sold our Garden Fresh Gourmet business. Proceeds were approximately $55, subject to customary purchase price adjustments. On June 16, 2019, we sold our Bolthouse Farms business. Proceeds were approximately $500, subject to customary purchase price adjustments. Beginning in the third quarter of 2019, we have reflected the results of these businesses as discontinued operations in the Consolidated Statements of Earnings for all periods presented.

Within our international biscuits and snacks operating segment, we signed a definitive agreement for the sale of our Kelsen business on July 12, 2019, and completed the sale on September 23, 2019, for approximately $300, subject to customary purchase price adjustments. We also signed a definitive agreement on August 1, 2019, for the sale of our Arnott’s business and certain other international operations, including the simple meals and shelf-stable beverages businesses in Australia and Asia Pacific (the Arnott's and international operations), for $2,200, subject to customary purchase price adjustments. We expect to complete the sale in the first half of 2020. Beginning in the fourth quarter of 2019, we have reflected the results of operations of the Kelsen business and the Arnott’s and international operations (collectively referred to as Campbell International) as discontinued operations in the Consolidated Statements of Earnings for all periods presented. These businesses were historically included in the Global Biscuits and Snacks reportable segment.

Results of discontinued operations were as follows:



	Campbell Fresh									Campbell International
	2019			2018			2017			2019			2018		2017
Net sales	$	756		$	950		$	947		$	1,046		$	1,120	$	1,106

Impairment charges	$	360		$	694		$	212		$	17		$	—	$	—

Earnings (loss) before taxes from operations	$	(359	)	$	(721	)	$	(221	)	$	120		$	163	$	198
Taxes on earnings (loss) from operations	(78		)	(142		)	(34		)	41			47		48
Loss on sales of businesses / costs associated with selling the businesses	(32		)	—			—			(12		)	—		—
Tax expense (benefit) of loss on sales / costs associated with selling the businesses	19			—			—			(2		)	—		—
Earnings (loss) from discontinued operations	$	(332	)	$	(579	)	$	(187	)	$	69		$	116	$	150

In the second quarter of 2019, we performed interim impairment assessments on the intangible and tangible assets of the Campbell Fresh businesses. We revised our future outlook for earnings and cash flows for each of these businesses as the divestiture process progressed and we received initial indications of value. In Bolthouse Farms carrot and carrot ingredients, we recorded impairment charges of $18 on the trademark, $40 on customer relationships, $15 on technology and $104 on plant assets. In Bolthouse Farms refrigerated beverages and salad dressings, we recorded impairment charges of $74 on the trademark, $22 on customer relationships, and $9 on plant assets. In Garden Fresh Gourmet, we recorded impairment charges of $23 on the trademark, $39 on customer relationships, and $2 on plant assets. In the first quarter of 2019, we recorded an impairment charge of $14 on the U.S refrigerated soup plant assets.

In 2019, we incurred pre-tax expenses of $32 associated with the sale process of the Campbell Fresh businesses, including transaction costs. In addition, we recorded tax expense of $29 in 2019, as deferred tax assets were not realizable.

In the fourth quarter of 2019, as part of our annual review of intangible assets, we recognized an impairment charge of $7 on a trademark and $10 on goodwill in Kelsen due to a lower long-term outlook for sales and the pending sale of the business.

In 2019, we incurred pre-tax expenses of $12 associated with the sale process of Campbell International.

We will provide certain transition services to support the divested businesses.

The assets and liabilities of these businesses have been reflected as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of July 28, 2019, and July 29, 2018.



	Campbell International		Campbell Fresh			Campbell International		Total
	July 28, 2019		July 29, 2018			July 29, 2018		July 29, 2018
Cash and cash equivalents	$	148	$	8		$	169	$	177
Accounts receivable, net	135		84			138		222
Inventories	135		161			151		312
Other current assets	10		3			12		15
Current assets	$	428	$	256		$	470	$	726

Plant assets, net of depreciation	$	340	$	413		$	354	$	767
Goodwill	661		—			716		716
Other intangible assets, net of amortization	135		381			151		532
Other assets	31		4			31		35
Total assets	$	1,595	$	1,054		$	1,722	$	2,776

Short-term borrowings	$	232	$	—		$	371	$	371
Payable to suppliers and others	109		79			109		188
Accrued liabilities	114		39			121		160
Accrued income taxes	14		—			12		12
Current liabilities	$	469	$	118		$	613	$	731

Long-term debt	$	6	$	—		$	7	$	7
Deferred taxes	32		(1		)	36		35
Other liabilities	27		5			17		22
Total liabilities	$	534	$	122		$	673	$	795

The depreciation and amortization, capital expenditures, sale proceeds and significant operating noncash items of Campbell Fresh and Campbell International were as follows:



	2019		2018		2017
Cash flows from discontinued operating activities:
Impairment charges	$	377	$	694	$	212
Depreciation and amortization	83		115		125
Losses on sales of discontinued operations businesses	32		—		—

Cash flows from discontinued investing activities:
Capital expenditures	$	59	$	88	$	99
Sales of discontinued operations businesses, net of cash divested	539		—		—