XML 141 R9.htm IDEA: XBRL DOCUMENT v3.20.2
Divestitures
 12 Months Ended
Aug. 02, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] Divestitures
Discontinued Operations
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 $55. On June 16, 2019, we sold our Bolthouse Farms business. Proceeds were $500. 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. These businesses were historically included in the Campbell Fresh reportable segment.
We completed the sale of our Kelsen business on September 23, 2019, for $322. We also completed 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 other international operations), on December 23, 2019, for $2,286. The purchase price was subject to certain post-closing adjustments, which resulted in $4 of additional proceeds in the third quarter 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 other 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 Snacks reportable segment.
Results of discontinued operations were as follows:
Campbell InternationalCampbell Fresh
20202019201820192018
Net sales$359 $1,046 $1,120 $756 $950 
Impairment charges$— $17 $— $360 $694 
Earnings (loss) before taxes from operations$53 $120 $163 $(359)$(721)
Taxes on earnings (loss) from operations17 41 47 (78)(142)
Gain (loss) on sales of businesses / costs associated with selling the businesses1,039 (12)— (32)— 
Tax expense (benefit) on sales / costs associated with selling the businesses39 (2)— 19 — 
Earnings (loss) from discontinued operations$1,036 $69 $116 $(332)$(579)
The sale of the Arnott's and other international operations resulted in a substantial capital gain for tax purposes. We were able to utilize capital losses, which were offset with valuation allowances as of July 28, 2019, to offset the capital gain.
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 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 Campbell Fresh. In addition, we recorded tax expense of $29 in 2019, as deferred tax assets were not realizable.
Under the terms of the sale of the Arnott's and other international operations, we entered into a long-term licensing arrangement for the exclusive rights to certain Campbell brands in certain non-U.S. markets. We provide certain transition services to support the divested businesses.
The assets and liabilities of Campbell International have been reflected as assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of July 28, 2019. The assets and liabilities were as follows:
July 28,
2019
Cash and cash equivalents$148 
Accounts receivable, net135 
Inventories135 
Other current assets10 
Current assets$428 
Plant assets, net of depreciation$340 
Goodwill661 
Other intangible assets, net of amortization135 
Other assets31 
Total assets$1,595 
Short-term borrowings$232 
Payable to suppliers and others109 
Accrued liabilities114 
Accrued income taxes14 
Current liabilities$469 
Long-term debt$6 
Deferred taxes32 
Other liabilities27 
Total liabilities$534 
The depreciation and amortization, capital expenditures, sale proceeds and significant operating noncash items of Campbell Fresh and Campbell International were as follows:
202020192018
Cash flows from discontinued operating activities:
Impairment charges$— $377 $694 
Depreciation and amortization (1)
— 83 115 
Net (gain) loss on sales of discontinued operations businesses(1,039)32 — 
Cash flows from discontinued investing activities:
Capital expenditures$30 $59 $88 
Sales of discontinued operations businesses, net of cash divested2,466 539 — 
_____________________________________
(1)Depreciation and amortization are no longer recognized once businesses are classified as held for sale/discontinued operations.
Other Divestitures
On October 11, 2019, we completed the sale of our European chips business for £63, or $77. The pre-tax loss recognized in the first quarter of 2020 on the sale was $64, which included the impact of allocated goodwill and foreign currency translation adjustments. For tax purposes, we were able to use the capital loss on this sale to offset a portion of the capital gain from the sale of the Arnott's and other international operations. The European chips business had net sales of $25 in 2020, $129 in 2019, and $44 in 2018. Earnings from the business, which included a pre-tax impairment charge on intangible assets of $16 recognized in the fourth quarter of 2019, were not material. The results of the European chips business through the date of sale were reflected in continuing operations within the Snacks reportable segment