Segment Information

6 Months Ended

Jan. 26, 2020

Business and Geographic Segment Information

Segment Information

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 & Beverages; U.S. snacking; international biscuits and snacks; and Campbell Fresh. The U.S. snacking operating segment was aggregated with the international biscuits and snacks operating segment to form the Global Biscuits and Snacks reportable segment. The operating segments were aggregated based on similar economic characteristics, products, production processes, types or classes of customers, distribution methods, and regulatory environment.

As discussed in Note 3, we sold our businesses in Campbell Fresh during 2019. 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. Prior periods have been adjusted to conform to the current presentation. A portion of the U.S. refrigerated soup business historically included in Campbell Fresh was retained, and is reported as part of foodservice in Meals & Beverages.

Within our international biscuits and snacks operating segment, we sold our Kelsen business on September 23, 2019, and the Arnott’s and other international operations on December 23, 2019. Beginning in the fourth quarter of 2019, we have reflected the results of operations of the Kelsen business and the Arnott’s and other international operations, or Campbell International, as discontinued operations in the Consolidated Statements of Earnings for all periods presented.

Our reportable segments are as follows:

•Meals & Beverages, which includes the retail and foodservice businesses in the U.S. and Canada. The segment includes the following products: Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Pacific Foods broth, soups and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans and dinner sauces; Swanson canned poultry; Plum baby food and snacks; V8 juices and beverages; and Campbell’s tomato juice; and

•Snacks, which consists of Pepperidge Farm cookies, crackers, fresh bakery and frozen products in U.S. retail, including Milano cookies and Goldfish crackers; and Snyder’s of Hanover pretzels, Lance sandwich crackers, Cape Cod and Kettle Brand potato chips, Late July snacks, Snack Factory Pretzel Crisps, Pop Secret popcorn, Emerald nuts, and other snacking products in the U.S. and Canada. The segment includes the retail business in Latin America. The segment also includes the results of our European chips business, which was sold on October 11, 2019.

Through the fourth quarter of 2019, our retail business in Latin America was managed as part of the Meals & Beverages segment. Beginning in 2020, it is managed as part of the Snacks 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						Six Months Ended
	January 26, 2020		January 27, 2019		January 26, 2020		January 27, 2019
Net sales
Meals & Beverages	$	1,224	$	1,222	$	2,418	$	2,451
Snacks	938		949		1,927		1,922
Corporate	—		1		—		1
Total	$	2,162	$	2,172	$	4,345	$	4,374


	Three Months Ended						Six Months Ended
	January 26, 2020		January 27, 2019		January 26, 2020		January 27, 2019
Earnings before interest and taxes
Meals & Beverages	$	242	$	253	$	524	$	543
Snacks	136		132		261		257
Corporate⁽¹⁾	(21)		(58)		(108)		(129)
Restructuring charges⁽²⁾	(7)		(2)		(10)		(20)
Total	$	350	$	325	$	667	$	651

_______________________________________

⁽¹⁾Represents unallocated items. Pension benefit settlement adjustments are include in Corporate. There were settlement gains of $11 in the three- and six-month periods ended January 26, 2020. Included in the six-month period ended January 26, 2020, was a loss on the sale of our European chips business of $64. Costs related to the cost savings initiatives were $18 and $22 in the three-month periods and $26 and $49 in the six-month periods ended January 26, 2020, and January 27, 2019, respectively.

⁽²⁾See Note 7 for additional information.

Our net sales based on product categories are as follows:


	Three Months Ended						Six Months Ended
	January 26, 2020		January 27, 2019		January 26, 2020		January 27, 2019
Net sales
Soup	$	755	$	757	$	1,463	$	1,492
Snacks	955		963		1,965		1,955
Other simple meals	279		272		562		559
Beverages	173		179		355		367
Other	—		1		—		1
Total	$	2,162	$	2,172	$	4,345	$	4,374

Soup includes various soup, broths and stock products. Snacks include cookies, pretzels, crackers, popcorn, nuts, potato chips, tortilla chips and other salty snacks and baked products. Other simple meals include sauces and Plum products.