<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED COMMISSION FILE NUMBER
JANUARY 31, 1999 1-3822
CAMPBELL SOUP COMPANY
NEW JERSEY 21-0419870
STATE OF INCORPORATION I.R.S. EMPLOYER IDENTIFICATION NO.
CAMPBELL PLACE
CAMDEN, NEW JERSEY 08103-1799
PRINCIPAL EXECUTIVE OFFICES
TELEPHONE NUMBER: (609) 342-4800
INDICATE BY CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [ ].
THERE WERE 436,187,108 SHARES OF CAPITAL STOCK OUTSTANDING AS OF MARCH 9,
1999.
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1
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PART I. FINANCIAL INFORMATION
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS
(unaudited)
(millions, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------------------------------------------
January February January February
31, 1999 1, 1998 31, 1999 1, 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $1,832 $2,012 $3,636 $3,825
- ----------------------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of products sold 856 955 1,686 1,848
Marketing and selling expenses 511 459 931 829
Administrative expenses 74 80 152 160
Research and development expenses 17 16 33 34
Other expenses 3 16 16 41
- ----------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,461 1,526 2,818 2,912
- ----------------------------------------------------------------------------------------------------------------------
Earnings before interest and taxes 371 486 818 913
Interest, net 42 43 86 86
- ----------------------------------------------------------------------------------------------------------------------
Earnings before taxes 329 443 732 827
Taxes on earnings 110 152 249 284
- ----------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations 219 291 483 543
Earnings from discontinued operations -- 20 -- 35
Cumulative effect of change in accounting principle -- (11) -- (11)
- ----------------------------------------------------------------------------------------------------------------------
Net earnings $ 219 $ 300 $ 483 $ 567
======================================================================================================================
Per share - basic
Earnings from continuing operations $ .49 $ .64 $ 1.08 $ 1.19
Earnings from discontinued operations -- .04 -- .07
Cumulative effect of change in accounting principle -- (.02) -- (.02)
- ----------------------------------------------------------------------------------------------------------------------
Net earnings $ .49 $ .66 $ 1.08 $ 1.24
======================================================================================================================
Dividends $ .225 $ .210 $ .435 $ .403
======================================================================================================================
Weighted average shares outstanding - basic 444 457 446 457
======================================================================================================================
Per share - assuming dilution
Earnings from continuing operations $ .49 $ .63 $ 1.07 $ 1.18
Earnings from discontinued operations -- .04 -- .07
Cumulative effect of change in accounting principle -- (.02) -- (.02)
- ----------------------------------------------------------------------------------------------------------------------
Net earnings $ .49 $ .65 $ 1.07 $ 1.23
======================================================================================================================
Weighted average shares outstanding - assuming dilution 449 462 451 463
======================================================================================================================
</TABLE>
See Notes to Financial Statements
2
<PAGE> 3
CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS
(unaudited)
(millions)
<TABLE>
<CAPTION>
JANUARY August
31, 1999 2, 1998
-------- -------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 30 $ 16
Accounts receivable 705 656
Inventories 621 564
Other current assets 217 204
- --------------------------------------------------------------------------
Total current assets 1,573 1,440
- --------------------------------------------------------------------------
Plant assets, net of depreciation 1,719 1,723
Intangible assets, net of amortization 2,001 1,904
Other assets 581 566
- --------------------------------------------------------------------------
Total assets $ 5,874 $ 5,633
==========================================================================
Current liabilities
Notes payable $ 1,721 $ 1,401
Payable to suppliers and others 468 506
Accrued liabilities 518 638
Dividend payable 100 95
Accrued income taxes 217 163
- --------------------------------------------------------------------------
Total current liabilities 3,024 2,803
- --------------------------------------------------------------------------
Long-term debt 1,338 1,169
Nonpension postretirement benefits 401 405
Other liabilities, including deferred
income taxes of $245 and $246 420 382
- --------------------------------------------------------------------------
Total liabilities 5,183 4,759
- --------------------------------------------------------------------------
Shareowners' equity
Preferred stock; authorized 40 shares;
None issued -- --
Capital stock, $.0375 par value; authorized
560 shares; issued 542 shares 20 20
Capital surplus 386 395
Earnings retained in the business 3,996 3,706
Capital stock in treasury, at cost (3,541) (3,083)
Accumulated other comprehensive income (170) (164)
- --------------------------------------------------------------------------
Total shareowners' equity 691 874
- --------------------------------------------------------------------------
Total liabilities and shareowners' equity $ 5,874 $ 5,633
==========================================================================
</TABLE>
See Notes to Financial Statements
3
<PAGE> 4
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
(millions)
<TABLE>
<CAPTION>
Six Months Ended
----------------
JANUARY February
31, 1999 1, 1998
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings, excluding discontinued operations $ 483 $ 532
Non-cash charges to net earnings
Cumulative effect of accounting change -- 11
Depreciation and amortization 123 133
Deferred income taxes (3) 7
Other, net (1) 20
Changes in working capital
Accounts receivable (47) (223)
Inventories (62) 39
Other current assets and liabilities (104) (5)
- ----------------------------------------------------------------------------------------------------
Net cash provided by operating activities 389 514
- ----------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchases of plant assets (126) (90)
Sales of plant assets 8 9
Businesses acquired (105) (472)
Sale of businesses -- 21
Other, net (8) (5)
- ----------------------------------------------------------------------------------------------------
Net cash used in investing activities (231) (537)
- ----------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Long-term borrowings 325 370
Repayments of long-term borrowings (2) (16)
Short-term borrowings 737 1,054
Repayments of short-term borrowings (588) (716)
Dividends paid (188) (272)
Treasury stock purchases (489) (304)
Treasury stock issuances 64 49
- ----------------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities (141) 165
- ----------------------------------------------------------------------------------------------------
Net cash used in discontinued operations -- (50)
- ----------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash (3) (11)
- ----------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents 14 81
Cash and cash equivalents - beginning of period 16 17
- ----------------------------------------------------------------------------------------------------
Cash and cash equivalents - end of period $ 30 $ 98
====================================================================================================
</TABLE>
See Notes to Financial Statements
4
<PAGE> 5
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF SHAREOWNERS' EQUITY
(unaudited)
(millions, except per share amounts)
<TABLE>
<CAPTION>
Capital stock
---------------------------------
Issued In treasury Earnings Accumulated
--------------- --------------- retained other Total
Capital in the comprehensive shareowners'
Shares Amount Shares Amount surplus business income equity
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at August 3, 1997 542 $20 (84) ($2,459) $338 $3,571 ($50) $1,420
Comprehensive income
Net earnings 567 567
Foreign currency translation adjustments (62) (62)
Dividends ($.403 per share) (183) (183)
Treasury stock purchased (6) (304) (304)
Treasury stock issued under
management incentive and
stock option plans 2 14 32 46
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at February 1, 1998 542 $20 (88) ($2,749) $370 $3,955 ($112) $1,484
===================================================================================================================================
Balance at August 2, 1998 542 $20 (94) ($3,083) $395 $3,706 ($164) $874
Comprehensive income
Net earnings 483 483
Foreign currency translation adjustments (6) (6)
Dividends ($.435 per share) (193) (193)
Treasury stock purchased (9) (489) (489)
Treasury stock issued under
management incentive and
stock option plans 2 31 (9) 22
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at January 31, 1999 542 $20 (101) ($3,541) $386 $3,996 ($170) $691
===================================================================================================================================
</TABLE>
See Notes to Financial Statements
5
<PAGE> 6
CAMPBELL SOUP COMPANY CONSOLIDATED
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(millions)
(a) The financial statements reflect all adjustments which are, in the opinion
of management, necessary for a fair presentation of the results for the
indicated periods. All such adjustments are of a normal recurring nature.
Certain reclassifications were made to the prior year amounts to conform
with current presentation, including classifying the Specialty Foods
segment as a discontinued operation.
(b) New Accounting Pronouncement
As of August 3, 1998, the company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income",
issued in June 1997. SFAS 130 establishes a standard for reporting of
comprehensive income, which is comprised of net income and "other"
comprehensive income items, in the financial statements. "Other"
comprehensive income includes items recorded in shareowners' equity that
are not the result of transactions with shareowners, such as foreign
currency translation adjustments. Prior year financial statements have
been reclassified to conform to SFAS 130.
The components of comprehensive income are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January February January February
31, 1999 1, 1998 31, 1999 1, 1998
-------- ------- -------- --------
<S> <C> <C> <C> <C>
Net earnings $ 219 $ 300 $ 483 $ 567
Foreign currency
translation adjustments (14) (61) (6) (62)
----- ----- ----- -----
Comprehensive income $ 205 $ 239 $ 477 $ 505
===== ===== ===== =====
</TABLE>
As of January 31, 1999 and February 1, 1998, accumulated other
comprehensive income is comprised entirely of the cumulative translation
adjustment.
(c) Discontinued Operations
Effective March 30, 1998, the company spun off the Specialty Foods segment
to its shareowners as an independent publicly-traded company. The spin-off
qualified as a tax-free distribution to U.S. shareholders. Shareowners of
record as of March 9, 1998 received one share of the common stock of the
new company, Vlasic Foods International Inc. (Vlasic), for every ten
shares of Campbell Soup Company capital stock.
6
<PAGE> 7
Results of discontinued operations were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
February 1, 1998 February 1, 1998
---------------- ----------------
<S> <C> <C>
Net sales $ 330 $ 637
===== =====
Earnings before taxes $ 32 $ 56
Taxes on earnings $ (12) $ (21)
----- -----
Earnings from discontinued operations $ 20 $ 35
===== =====
</TABLE>
(d) Restructuring Charge
A restructuring charge included in earnings from continuing operations of
$262 million ($193 million after-tax or $.42 per share), was recorded in
the third quarter fiscal 1998. This charge relates to the rationalization
of certain U.S., European and Australian production and administrative
facilities and anticipated losses on the divestitures of non-strategic
businesses with annual sales of approximately $170 million. The
restructuring program includes the elimination of approximately 750
employee positions.
The restructuring charge includes approximately $78 million in cash
charges primarily related to severance, employee benefit costs and lease
termination fees. The balance relates to non-cash charges for estimated
losses on the disposition of plant assets and divestitures of businesses.
The company expects to complete the restructuring program by the fourth
quarter fiscal 1999.
A summary of the original reserve and related activity through January 31,
1999 is as follows:
<TABLE>
<CAPTION>
Balance at Balance at
Original August January
Reserves Activity 2, 1998 Activity 31, 1999
<S> <C> <C> <C> <C> <C>
Loss on asset dispositions and
divestitures $ 209 $ (58) $ 151 $ (49) $ 102
Severance and benefits 41 (9) 32 (7) 25
Other 12 (2) 10 (6) 4
---------------------------------------------------------------------------------------------------------------------
TOTAL $ 262 $ (69) $ 193 $ (62) $ 131
====================================================================================================================
</TABLE>
(e) Earnings Per Share
The company adopted the provisions of SFAS No. 128, "Earnings per
Share"("EPS") as of the second quarter fiscal 1998. For the periods
presented in the Statements of Earnings, the calculations of basic EPS and
EPS assuming dilution vary in that the weighted average shares outstanding
assuming dilution includes the incremental effect of stock options.
7
<PAGE> 8
(f) Cumulative Effect of Change In Accounting Principle
In the second quarter fiscal 1998, the company adopted the provisions of
the Emerging Issues Task Force (EITF) consensus ruling on Issue 97-13,
"Accounting for Costs Incurred in Connection with a Consulting Contract
that Combines Business Process Reengineering and Information Technology
Transformation." The unamortized balance of previously capitalized
business process reengineering costs was written off as a cumulative
effect of change in accounting principle of $11 million or $.02 per share,
net of an income tax benefit of approximately $7 million.
(g) Segment Information
The company operates in three business segments: Soup and Sauces, Biscuits
and Confectionery, and Away From Home. The segments are managed as
strategic units due to their distinct manufacturing processes, marketing
strategies and distribution channels.
The Soup and Sauces segment includes the worldwide soup businesses, Prego
spaghetti sauces, Pace Mexican sauces, Franco-American pastas and gravies,
Swanson broths, and V8 beverages. The Biscuits and Confectionery segment
includes the Godiva Chocolatier, Pepperidge Farm, Arnotts Limited and
Delacre businesses. The Delacre business was sold in June 1998. Away From
Home represents products, including Campbell's Soups and Campbell's
Specialty Kitchen entrees, which are distributed to the food service and
home meal replacement markets. See Note (c) regarding the Specialty Foods
segment, which has been reclassified as a discontinued operation.
Accounting policies for measuring segment assets and earnings before
interest and taxes are substantially consistent with those described in
the summary of significant accounting policies included in the fiscal 1998
Annual Report. The company evaluates segment performance based on earnings
before interest and taxes, excluding certain non-recurring charges. Away
From Home products are principally produced by the tangible assets of the
company's other segments. Accordingly, tangible assets have not been
allocated to the Away From Home segment. Depreciation and amortization are
allocated to Away From Home based on budgeted production hours. Transfers
between segments are recorded at cost plus mark-up or at market.
8
<PAGE> 9
JANUARY 31, 1999
<TABLE>
<CAPTION>
Away Corporate
Soup and Biscuits and From and
THREE MONTHS ENDED Sauces Confectionery Home Other(1) Eliminations(2) Total
- ------------------ ------ ------------- ---- -------- --------------- -----
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 1,278 407 135 36 (24) $ 1,832
Earnings before
interest and taxes $ 291 71 16 4 (11) $ 371
Depreciation and
amortization $ 33 21 3 2 5 $ 64
Capital expenditures $ 53 14 - 6 6 $ 79
</TABLE>
<TABLE>
<CAPTION>
Away Corporate
SIX MONTHS ENDED Soup and Biscuits and From and
- ---------------- Sauces Confectionery Home Other(1) Eliminations(2) Total
------ ------------- ---- -------- --------------- -----
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 2,567 769 262 75 (37) $ 3,636
Earnings before
interest and taxes $ 681 129 32 7 (31) $ 818
Depreciation and
amortization $ 64 41 6 4 8 $ 123
Capital expenditures $ 80 27 - 9 10 $ 126
Segment assets $ 3,210 1,466 318 172 708 $ 5,874
</TABLE>
(1) Represents financial information of certain prepared convenience food
businesses not categorized as reportable segments.
(2) Represents elimination of intersegment sales, unallocated corporate
expenses, and unallocated assets, including corporate offices, deferred
income taxes and prepaid pension assets.
9
<PAGE> 10
FEBRUARY 1, 1998
<TABLE>
<CAPTION>
Away Corporate
Soup and Biscuits and From and
Three Months Ended Sauces Confectionery Home Other(1) Eliminations(2) Total
- ------------------ ------ ------------- ---- -------- --------------- -----
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 1,383 428 118 103 (20) $ 2,012
Earnings before
interest and taxes $ 396 76 16 5 (7) $ 486
Depreciation and
amortization $ 30 22 2 5 5 $ 64
Capital expenditures $ 25 14 - 3 4 $ 46
</TABLE>
<TABLE>
<CAPTION>
Away Corporate
Six Months Ended Soup and Biscuits and From and
- ----------------- Sauces Confectionery Home Other(1) Eliminations(2) Total
------ ------------- ---- -------- --------------- -----
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 2,598 837 225 207 (42) $ 3,825
Earnings before
interest and taxes $ 767 135 31 6 (26) $ 913
Depreciation and
amortization $ 66 44 4 9 10 $ 133
Capital expenditures $ 45 30 - 8 7 $ 90
Segment assets(3) $ 3,047 1,725 220 382 696 $ 6,070
</TABLE>
(1) Represents financial information of certain prepared convenience food
businesses not categorized as reportable segments.
(2) Represents elimination of intersegment sales, unallocated corporate
expenses and unallocated assets, including corporate offices, deferred
income taxes and prepaid pension assets.
(3) Segment assets as of February 1, 1998 exclude net assets of discontinued
operations of $720.
10
<PAGE> 11
(h) Inventories
<TABLE>
<CAPTION>
JANUARY August
31, 1999 2, 1998
-------- -------
<S> <C> <C>
Raw materials, containers and supplies $ 215 $ 205
Finished products 406 359
- ---------------------------------------------------------------------------
$ 621 $ 564
===========================================================================
</TABLE>
Approximately 70% of inventory is accounted for on the last in, first out
(LIFO) method of determining cost. If the first in, first out inventory
valuation method had been used exclusively, inventories would not differ
materially from the amounts reported at January 31, 1999 and August 2,
1998.
(i) Notes Payable and Long-Term Debt
In October 1998, the company issued $300 million of notes due October 2003
bearing interest at 4.75%. The issuance was the third draw down on the
company's $1 billion shelf registration filed with the Securities and
Exchange Commission in fiscal 1997. As of February 1, 1999, $100 million
remains available for issuance under the shelf registration.
(j) Forward Stock Purchase Program
In October 1998, the company entered into a forward stock purchase
contract to partially hedge the company's equity exposure from its stock
option program. The contract, which matures in fiscal 2004, allows the
company to repurchase approximately 8 million shares at an average price
of approximately $49 per share. The company may elect to settle the
contract on a net share basis in lieu of physical settlement. The contract
permits early settlement and may be extended for an additional five-year
term.
11
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
CAMPBELL SOUP COMPANY
RESULTS OF CONTINUING OPERATIONS
OVERVIEW
The company's sales and earnings from continuing operations declined in the
second quarter ended January 31, 1999 due to lower shipments of U.S. wet soup
and increased marketing investment across the portfolio. On January 11, 1999 the
company announced major cost savings initiatives in its supply chain operations.
The immediate effect of these initiatives was lower U.S. wet soup shipments.
Going forward these initiatives should result in the pattern of shipments across
the year being more level than in the past with resulting efficiencies in supply
chain operations which are expected to generate $100 million in annualized cost
savings. These savings are expected to be realized through reduced trade
spending and lower costs of procurement, manufacturing, shipping and storage of
products. Net sales, as reported, declined 9%, while sales excluding currency
and divestitures declined 4%. Earnings from continuing operations and diluted
earnings per share from continuing operations were down 25% and 22%,
respectively.
In the second quarter ended February 1, 1998, the company adopted Emerging
Issues Task Force Consensus No. 97-13, "Accounting for Costs Incurred in
Connection with a Consulting Contract that Combines Business Process
Reengineering and Information Technology Transformation." The impact of this
required accounting change was $11 million after-tax or $.02.
For the six months ended January 31, 1999, sales and earnings declined due to
lower shipments of U.S. wet soup and increased marketing spending. Net sales, as
reported, declined 5%, however, excluding currency and divestitures, sales from
ongoing businesses increased 2%. Earnings from continuing operations and diluted
earnings per share from continuing operations declined 11% and 9%, respectively.
SECOND QUARTER
SALES
Sales in the quarter declined 9% to $1.83 billion from $2.01 billion last year.
The change in sales was due to an 8% decrease from volume and mix, a 5% decline
due to divestitures, offset by 2% from higher selling prices and 2% from
acquisitions.
12
<PAGE> 13
An analysis of net sales by segment follows:
<TABLE>
<CAPTION>
(millions) 1999 1998 % CHANGE
- ---------- ---- ---- --------
<S> <C> <C> <C>
Soup and Sauces $1,278 $1,383 (8)
Biscuits and Confectionery 407 428 (5)
Away From Home 135 118 14
- -----------------------------------------------------------------------------
Subtotal 1,820 1,929 (6)
Other 36 103 (65)
Intersegment (24) (20)
- -----------------------------------------------------------------------------
$1,832 $2,012 (9)
=============================================================================
</TABLE>
The Soup and Sauces decrease was due to worldwide wet soup volume decline of
15%, including a U.S. wet soup volume decline of 20%. As previously discussed,
the U.S. wet soup volume decline was a result of the company's decision to
implement changes to its supply chain operations which primarily impacted
shipments of condensed soup. This worldwide wet soup volume decline was in
contrast to increased consumer demand for U.S. soups driven by ready-to-serve
products including Chunky and Simply Home, and Swanson broths.
Outside the U.S., Canada delivered strong wet soup sales. In Europe, Erasco
soups in Germany and Liebig soups in France, acquired in December 1997,
contributed to sales growth. In Asia-Pacific, soup sales were up due primarily
to strong gains in Australia where we are increasing our market leadership and
Cheong Chan in Malaysia.
In beverages, V8 Splash continued its stellar top-line performance.
Biscuits and Confectionery reported a decline in sales compared to second
quarter 1998. The decline was primarily due to the divestiture of Delacre, the
company's European biscuit business, and adverse currency translation impact in
Australia. Excluding the impact of the divestiture and currency, sales increased
approximately 7%. This increase was led by Pepperidge Farm Goldfish crackers,
Chocolate Chunk classic cookies and Swirl bread. Godiva Chocolatier contributed
double-digit sales growth through expansion of its North American, European and
Japanese retail outlets. Arnotts Limited (Arnotts) reported increased sales led
by strong performance from TimTams biscuits and Kettle chips. In addition,
Arnotts' introduction of Goldfish crackers in the Australian market earlier in
the fiscal year continued to exceed expectations.
Away From Home sales increased by 14% primarily due to Stockpot, a premium
refrigerated soup brand acquired in the first quarter of fiscal 1999. In
addition, U.S. foodservice sales increased due to growth in soup and V8 Splash.
New Campbell soup kettles, which provide Campbell's branded soup in university
cafeterias, convenience stores and other outlets, continued to build volume.
13
<PAGE> 14
GROSS MARGIN
Gross margin, defined as net sales less cost of products sold, decreased $81
million in the quarter. As a percent of sales, gross margin was 53.3% compared
to 52.5% last year. The improvement in margin percentage was principally due to
higher selling prices, cost savings generated from global procurement
initiatives and continued productivity gains in manufacturing facilities.
MARKETING AND SELLING EXPENSES
Marketing and selling expenses as a percent of sales increased to 27.9% from
22.8% last year. The increase is attributable to a double-digit increase in
trade marketing spending driven by increased investment in the U.S. retail wet
soup business and competitive pressures on the Pepperidge Farm frozen business
and Arnotts' biscuits business in Australia.
ADMINISTRATIVE EXPENSES
Administrative expenses were flat as a percent of sales compared to last year.
OTHER EXPENSES
Other expenses declined as compared to last year primarily due to lower
long-term incentive plan costs.
OPERATING EARNINGS
Segment operating earnings decreased 23% for the second quarter versus the prior
year.
An analysis of operating earnings by segment follows:
<TABLE>
<CAPTION>
(millions) 1999 1998 % CHANGE
- ---------- ---- ----- --------
<S> <C> <C> <C>
Soup and Sauces $ 291 $ 396 (27)
Biscuits and Confectionery 71 76 (7)
Away From Home 16 16 --
- ---------------------------------------------------------------------------------------
Subtotal 378 488 (23)
Other 4 5
- ---------------------------------------------------------------------------------------
382 493 (23)
Corporate (11) (7)
- ---------------------------------------------------------------------------------------
$ 371 $ 486
- ---------------------------------------------------------------------------------------
</TABLE>
Soup and Sauces earnings were down 27% due to lower U.S. condensed soup
shipments and increased marketing spending. This earnings shortfall was slightly
offset by strong earnings performance by U.S. ready-to-serve soups and several
international wet soup businesses including Erasco in Germany, Campbell's in
Australia, Cheong Chan in Malaysia and the contribution of Liebig in France,
which was acquired in December 1997.
14
<PAGE> 15
Biscuits and Confectionery earnings declined to $71 million due to the
divestiture of Delacre in June 1998 and heavy trade spending in Pepperidge
Farm's frozen business and Arnotts' biscuits business in Australia. This decline
was slightly mitigated by Pepperidge Farm's Goldfish crackers and Chocolate
Chunk classic cookies earnings performance and Godiva's double-digit earnings
growth.
Away From Home earnings were flat versus last year.
NON-OPERATING ITEMS
Net interest expense was flat versus prior year.
The effective tax rate was 33.4% compared to 34.3% last year due to a shift in
the mix of earnings to lower tax jurisdictions.
SIX MONTHS
SALES
Sales for the six months declined 5% to $3.64 billion from $3.83 billion last
year. The change in sales was due to a 1% decrease from volume and mix, a 7%
decline due to divestitures and currency, offset by 2% from higher selling
prices and 1% from acquisitions.
An analysis of net sales by segment follows:
<TABLE>
<CAPTION>
(millions) 1999 1998 % CHANGE
- ---------- ---- ---- --------
<S> <C> <C> <C>
Soup and Sauces $2,567 $2,598 (1)
Biscuits and Confectionery 769 837 (8)
Away From Home 262 225 16
- -------------------------------------------------------------------------------
Subtotal 3,598 3,660 (2)
Other 75 207 (64)
Intersegment (37) (42)
- -------------------------------------------------------------------------------
$3,636 $3,825 (5)
================================================================================
</TABLE>
The Soup and Sauces decline was due to worldwide wet soup volume decline of 5%,
including U.S. wet soup volume decrease of 9%. This worldwide wet soup volume
decline was offset by continued strong consumer demand for U.S. ready-to-serve
soups including Chunky and Simply Home and Swanson broths.
Outside the U.S., Liebig soups in France contributed to European sales growth
and Cheong Chan in Malaysia led sales growth in Asia-Pacific.
V8 Splash also continued its strong sales performance.
15
<PAGE> 16
Biscuits and Confectionery reported a decline in sales compared to 1998. The
decline was primarily due to the divestiture of Delacre and adverse currency
translation impact in Australia. Excluding the impact of the divestiture and
currency, sales increased approximately 8%. This increase was led by Pepperidge
Farm Goldfish crackers, Chocolate Chunk classic cookies and Swirl bread. Godiva
Chocolatier contributed double-digit sales growth through expansion of its North
American, European and Japanese retail outlets. Arnotts Limited reported
increased sales, before the impact of currency, led by strong performance from
its TimTams biscuits.
Away From Home sales increased by 16% primarily due to Stockpot, a premium
refrigerated soup brand acquired during the first quarter of fiscal 1999. In
addition, U.S. foodservice sales increased due to growth in soup and V8 Splash.
New Campbell soup kettles increased branded soup sales in university cafeterias,
convenience stores and other outlets, and continue to expand the Campbell's
brand presence in the away-from-home market.
GROSS MARGIN
Gross margin, defined as net sales less cost of products sold, decreased $27
million year-to-date. As a percent of sales, gross margin was 53.6% compared to
51.7% last year. The improvement in margin percentage was principally due to
selling price increases, cost savings generated from global procurement
initiatives and continued productivity gains in manufacturing facilities.
MARKETING AND SELLING EXPENSE
Marketing and selling expenses as a percent of sales increased to 25.6% from
21.7% last year. The increase is attributable to a double-digit increase in
trade marketing spending driven by increased investment in the U.S. retail wet
soup business and competitive pressures on the Pepperidge Farm and Arnotts'
businesses.
ADMINISTRATIVE EXPENSES
Administrative expenses were flat as a percent of sales compared to last year.
OTHER EXPENSES
Other expenses declined as compared to last year primarily due to lower minority
interest expense, reflecting the buy-out of Arnotts Limited in fiscal 1998, and
lower long-term incentive plan costs.
OPERATING EARNINGS
Segment operating earnings decreased 10% versus the prior year. Excluding the
impact of currency, operating earnings in ongoing businesses decreased 8%.
16
<PAGE> 17
An analysis of operating earnings by segment follows:
<TABLE>
<CAPTION>
(millions) 1999 1998 % CHANGE
- ---------- ---- ---- --------
<S> <C> <C> <C>
Soup and Sauces $ 681 $ 767 (11)
Biscuits and Confectionery 129 135 (4)
Away From Home 32 31 3
- -------------------------------------------------------------------
Subtotal 842 933 (10)
Other 7 6
- -------------------------------------------------------------------
849 939 (10)
Corporate (31) (26)
- -------------------------------------------------------------------
$ 818 $ 913
- -------------------------------------------------------------------
</TABLE>
Soup and Sauces earnings were down 11% due to lower U.S. condensed soup
shipments and increased marketing spending. This earnings shortfall was slightly
offset by strong earnings performance by U.S. ready-to-serve soups and several
international wet soup businesses including Erasco, Liebig, Campbell's in
Australia and Cheong Chan in Malaysia. In addition, V8 Splash continues to
deliver exceptional year-to-date earnings growth.
Biscuits and Confectionery earnings declined to $129 million due to the
divestiture of Delacre in June 1998 and adverse currency impact in Australia.
Excluding the impact of the divestiture and currency, earnings increased 4%.
Pepperidge Farm's Goldfish crackers and Chocolate Chunk classic cookies
delivered outstanding earnings performance and Godiva posted double-digit
earnings growth.
Away From Home reported earnings growth to $32 million versus last year. Wet
soup and V8 Splash in the U.S. foodservice channel were the primary contributors
to the earnings growth.
NON-OPERATING ITEMS
Net interest expense was flat at $86 million versus prior year.
The effective tax rate was 34.0% compared to 34.3% last year.
DISCONTINUED OPERATIONS
On September 9, 1997, the company announced its intention to spin off the
Specialty Foods segment to its shareowners as an independent publicly-traded
company. The spin-off, which qualified as a tax-free distribution to U.S.
shareholders, was effective March 30, 1998. On this date, shareowners of record
as of March 9, 1998 received one share of the common stock of the new company,
Vlasic Foods International Inc. (Vlasic), for every ten shares of Campbell Soup
Company capital stock.
17
<PAGE> 18
In March 1998, the company entered into a revolving credit facility and borrowed
$500 million. In connection with the spin-off, the revolving credit facility and
outstanding obligation of $500 million were assumed by Vlasic. In addition, the
company received approximately $75 million from subsidiaries of Vlasic for
repayment of certain advances. See Note (c) of the Notes to Financial Statements
for further discussion of the discontinued operations.
RESTRUCTURING CHARGE
A restructuring charge included in earnings from continuing operations of $262
million ($193 million after-tax or $.42 per share), was recorded in the third
quarter fiscal 1998. This charge relates to the rationalization of certain U.S.,
European and Australian production and administrative facilities and anticipated
losses on the divestitures of non-strategic businesses with annual sales of
approximately $170 million. The restructuring program includes the elimination
of approximately 750 positions.
The restructuring charge includes $78 million in cash charges primarily related
to severance, employee benefit costs and lease termination fees. The balance
relates to non-cash charges for estimated losses on the disposition of plant
assets and divestitures of businesses. The company expects to realize
approximately $74 million of ongoing annual pre-tax savings from this plan.
Expected annual savings are not necessarily indicative of future incremental
earnings due to management's commitment to fund investments to grow brands and
drive volume growth. The company expects to complete the restructuring program
by the fourth quarter fiscal 1999. See Note (d) of the Notes to Financial
Statements for further discussion of the program and the related activity
analysis.
LIQUIDITY AND CAPITAL RESOURCES
The company generated cash from operations of $389 million compared to $514
million last year. This decline is primarily due to lower earnings and changes
in working capital, including an increase in inventories due to lower U.S. wet
soup shipments and spending on restructuring programs.
Capital expenditures were $126 million, an increase from $90 million last year.
The company continues to aggressively manage its capital outlays and expects
total expenditures to approximate $325 million in fiscal 1999.
In the first quarter, the company acquired Stockpot, a premium refrigerated soup
brand, for approximately $105 million.
In October 1998, the company issued $300 million of notes due October 2003 and
bearing interest of 4.75%.
In the first six months, the company repurchased 9.3 million shares versus 5.7
million last year. By repurchasing shares, the company expects to utilize
existing cash and debt capacity to lower its cost of capital and increase
returns to shareowners. The company's long-term strategy is to repurchase
approximately two percent of its outstanding shares annually.
In October 1998, the company entered into a forward stock purchase contract to
partially hedge the company's equity exposure from its stock option program. See
Note (j) of the Notes to Financial Statements for further discussion of the
contract.
18
<PAGE> 19
YEAR 2000
Historically, certain computer programs were written using two digits rather
than four to define the applicable year. Accordingly, the company's software may
recognize a date using "00" as 1900 rather than the year 2000, which could
result in computer systems failures or miscalculations, commonly referred to as
the Year 2000 ("Y2K") issue. The Y2K issue can arise at any point in the
company's supply, manufacturing, processing, distribution and financial chains.
Incomplete or untimely resolution of the Y2K issue by the company, key
suppliers, customers and other parties could have a material adverse effect on
the company's results of operations, financial condition and cash flows. To
address the Y2K issue, the company has established a Worldwide Year 2000
Business Action Council, led by an Executive Steering Committee of the company's
senior management, including representatives of each of the company's business
segments and corporate functions, to oversee and regularly review the status of
the readiness plan discussed below. In addition, the company has established a
Worldwide Project Office responsible for the day-to-day oversight and
coordination of the Y2K remediation, replacement and testing of business
systems. This project office reports to the company's Chief Information Officer.
The company's plan for addressing the Y2K issue is divided into three major
phases: Business Systems Inventory and Assessment, Remediation and Replacement
and Testing.
- - Business Systems Inventory and Assessment - The internal inventory portion
of this phase, which commenced in 1997, was designed to identify internal
business systems that were susceptible to system failure or processing
errors as a result of the Y2K issue. This phase is complete. Approximately
700 worldwide information technology business systems (IT) were
inventoried and approximately 200 were Y2K compliant and 500 were
identified as non-compliant. It was determined that approximately 400 of
the non-compliant systems require remediation and the remaining 100
systems will be retired or replaced. In addition, the company has
completed the inventory and assessment of its non-information technology
systems (Non-IT). The remediation and replacement of these systems, which
include manufacturing production lines and equipment, elevators, heating,
ventilation and air conditioning systems and water treatment systems, is
included in the remediation and replacement plan discussed below. As part
of this phase, significant service providers, vendors, suppliers,
customers and governmental entities that are believed to be critical to
business operations after January 1, 2000, were being identified and steps
undertaken to ascertain their stage of Y2K readiness through
questionnaires, interviews, on-site visits and other available means.
- - Remediation and Replacement - The company has developed and is in the
process of implementing its remediation and replacement plan for all
affected systems including IT and Non-IT systems. This phase, which
commenced in 1998, is approximately 69% complete. The company's plan
established priorities for remediation or replacement. The business
systems considered most critical to ongoing operations are being given the
highest priority. The company has prioritized its business systems into
"Mission Critical" and "All Other". "Mission Critical" systems are defined
as business systems such as Business Planning and Control Process
manufacturing, Sales Order Billing and Warehouse Management systems, that,
if shut down or interrupted, could have a material adverse effect on the
company's results of operations, financial condition and cash flows. "All
Other" systems are defined as business systems such as Data Warehouse and
Job Bidding systems that, if shut down or interrupted, may have an adverse
impact on the company. The company is utilizing internal and
19
<PAGE> 20
external resources to execute the plan and expects to substantially
complete all remediation and replacement of "Mission Critical" systems by
third quarter fiscal 1999 and "All Other" systems by fourth quarter fiscal
1999. The company is on schedule to meet these objectives.
- - Testing - This phase is ongoing as systems are remediated and replaced.
The company's efforts in this phase include testing by users and approval
by appropriate local and Y2K project management that the remediated or
replaced systems are Y2K compliant. The company expects to substantially
complete testing of "Mission Critical" systems by third quarter fiscal
1999 and "All Other" systems by first quarter fiscal 2000.
Because the company's Y2K compliance is dependent upon key third parties also
being Y2K compliant on a timely basis, there can be no guarantee that the
company's efforts will prevent a material adverse impact on its results of
operations, financial condition and cash flows. The possible consequences to the
company or its business partners not being fully Y2K compliant include temporary
plant closings, delays in the delivery of finished products, delays in the
receipt of key ingredients, containers and packaging supplies, invoice and
collection errors and inventory and supply obsolescence. These consequences
could have a material adverse effect on the company's results of operations,
financial condition and cash flows if the company is unable to conduct its
business in the ordinary course as a result of the Y2K issue. The company
believes that its readiness program, including the contingency plans discussed
below, should significantly reduce the adverse effect any such disruptions may
have.
The company is developing contingency plans to mitigate the potential
disruptions that may result from the Y2K issue. These plans may include
identifying and securing alternate suppliers of ingredients, containers,
packaging materials and utilities, adjusting manufacturing facility production,
shutdown and start-up schedules, stockpiling of finished product inventories and
other measures considered appropriate by management. Once developed and
approved, contingency plans, and the related cost estimates, will be continually
refined, as additional information becomes available.
The company currently estimates that the aggregate cost of its Y2K efforts will
be approximately $50 million, of which $24 million has been incurred to date.
These costs, except for capital costs of approximately $4 million, are being
expensed as incurred and are being funded through operating cash flows. The
company expects to incur Y2K costs of approximately $30-35 million in fiscal
1999.
(millions)
<TABLE>
<CAPTION>
Current Costs Estimated Costs
Components Estimates Incurred to Complete
- ---------- --------- -------- -----------
<S> <C> <C> <C>
External Consulting $ 27 (14) $ 13
Hardware/Software Upgrades 17 (10) 7
Other 6 -- 6
---- ---- ----
$ 50 (24) $ 26
==== ==== ====
</TABLE>
The company believes that such costs will not have a material impact on the
company's results of operations, financial condition or cash flows.
20
<PAGE> 21
RECENT DEVELOPMENTS
In June 1998, Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities", was issued. This standard,
effective for fiscal years beginning after June 15, 1999, requires that all
derivative instruments be recorded on the balance sheet at fair value. Changes
in the fair value of derivatives are recorded in earnings or other comprehensive
income, based on whether the instrument is designated as part of a hedge
transaction and, if so, the type of hedge transaction. The company is currently
assessing the impact of the adoption on the company's financial statements.
Based on the company's current portfolio, it is not expected that adoption of
this statement will have a material effect on the company's results of
operations, financial condition or cash flows.
The existing currencies of certain member countries of the European Union are
being phased out and have been effectively replaced with the European Union's
common currency, the Euro, as of January 1, 1999. On this date, a fixed
conversion rate was established between the existing currencies and the Euro.
National currencies will be eliminated over a period ending January 1, 2002. The
company does not believe that the conversion to the Euro will have a material
impact on its financial condition.
21
<PAGE> 22
FORWARD-LOOKING STATEMENTS
This quarterly report contains certain statements which reflect the company's
current expectations regarding future results of operations, economic
performance, financial condition and achievements of the company. The company
has tried, wherever possible, to identify these forward looking statements by
using words such as "anticipate," "believe," "estimate," "expect" and similar
expressions. These statements reflect the company's current plans and
expectations and are based on information currently available to it. They rely
on a number of assumptions and estimates which could be inaccurate and which are
subject to risks and uncertainties.
The company wishes to caution the reader that the following important factors
and those important factors described elsewhere in the commentary, or in other
Securities and Exchange Commission filings of the company, could affect the
company's actual results and could cause such results to vary materially from
those expressed in any forward looking statements made by, or on behalf of, the
company:
- the impact of strong competitive response to the company's efforts
to leverage its brand power with product innovation and new
advertising;
- the inherent risks in the marketplace associated with new product
introductions, including uncertainties about trade and consumer
acceptance;
- the company's ability to achieve sales and earnings forecasts, which
are based on assumptions about sales volume;
- the continuation of the company's successful record of integrating
acquisitions into its existing operations and the availability of
new acquisition and alliance opportunities that build shareowner
wealth;
- the company's ability to achieve its cost savings and capacity
utilization objectives;
- the impact of unforeseen economic and political changes in
international markets where the company competes such as currency
exchange rates, inflation rates, recession, foreign ownership
restrictions and other external factors over which the company has
no control; and
- the ability of the company and its key service providers, vendors,
suppliers, customers and governmental entities to replace, modify or
upgrade computer systems in ways that adequately address the Y2K
issue. Specific factors that might cause actual results to vary
materially from the results anticipated include the ability to
identify and correct all relevant computer codes and embedded chips,
unanticipated difficulties or delays in the implementation of the
company's remediation plans and the ability of third parties to
adequately address their own Y2K issues.
This discussion of uncertainties is by no means exhaustive but is designed to
highlight important factors that may impact the company's outlook.
22
<PAGE> 23
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
For information regarding the company's exposure to certain market risks, see
Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in the
Annual Report on Form 10-K for fiscal 1998. Except as described in Note (j) of
the Notes to Financial Statements, there have been no significant changes in the
company's portfolio of financial instruments or market risk exposures which have
occurred since year-end.
23
<PAGE> 24
PART II
ITEM 1. LEGAL PROCEEDINGS
In management's opinion, there are no pending claims or litigation, the outcome
of which would have a material effect on the consolidated results of operations,
financial position or cash flows of the company.
As previously reported, in October 1995, at the request of the Environmental
Protection Agency (EPA), the United States of America (USA) instituted an action
in the United States District Court for the Eastern District of California,
alleging, inter alia, that the company violated the Clean Air Act by operating
certain can manufacturing equipment at its Sacramento, California facility
without a valid permit and by failing to apply control technology to reduce air
emissions. In August 1997, at the request of the EPA, the USA filed a second
complaint alleging that the company violated the Clean Air Act by modifying
certain can manufacturing equipment at the same facility without a permit, and
without installing control technology. The second complaint also alleged that
the company exceeded certain daily and quarterly emission limits. The USA
asserted in its complaints that it was seeking the imposition of civil
penalties, calculated on a per diem/per violation basis, for each of the alleged
violations. The company disputed liability for any and all of the violations
alleged and also disputed the application of the maximum statutory penalty to
any of the alleged violations and the USA's method of calculating applicable
penalties, if any. In or about late October 1998, the company, EPA and the
Department of Justice agreed to resolve the two cases amicably under the terms
of a consent decree, which was published in the Federal Register on November 13,
1998. The District Court for the Eastern District of California approved the
consent decree on February 4, 1999. Under the terms of the consent decree, the
company admits no liability. The consent decree also provides that the company
will pay a civil penalty of $1,215,000, the three-piece can line at the
Sacramento facility will be shut down by August 1, 2000 and the company will
transfer certain emission reduction credits to the Environmental Resource Trust,
a non-profit organization. The company paid the civil penalty on February 22,
1999. The consent decree is not expected to have a material effect on the
consolidated results of operations, financial position or cash flows of the
company.
Communities for a Better Environment (CBE) sent a Clean Air Act Notice of Intent
to Sue letter dated April 6, 1998 to the company. CBE claimed that the company's
Sacramento facility has used certain solvents allegedly in violation of emission
limitations set by the Sacramento Metropolitan Air Quality Management District's
(Air District) Rules and has not complied with certain record-keeping
requirements. These are the same issues that were raised in notices of violation
issued to the company by the Air District which were settled in October 1997,
without admitting liability. CBE contends, however, that the settlement with the
Air District did not resolve the alleged violation arising from the use of
certain solvents on the grounds that the Air District's method of settling the
issue is not federally approved. The company disputes the alleged violation and
denies liability. The company and CBE have agreed to settle CBE's claim under
the terms of a consent decree, which was approved by the District Court for the
Eastern District of California on February 16, 1999. Under the consent decree,
in which the company admits no liability, certain equipment which used solvents
that were the subject of CBE's claim will be shut down at the Sacramento,
California facility by August 1, 2000. Other significant provisions of the
proposed consent decree are that the company will donate certain emission
reduction credits to the Air District and will donate the total amount of
$85,000 to two non-profit organizations, in
24
<PAGE> 25
lieu of paying any civil penalty or CBE attorney's fee. The terms of the consent
decree are not expected to have a material effect on the consolidated results of
operations, financial position or cash flows of the company.
The company has also been named as a potentially responsible party in a number
of proceedings brought under the Comprehensive Environmental Response,
Compensation and Liability Act, commonly known as Superfund. Although the impact
on these proceedings cannot be predicted at this time due to the large number of
other potentially responsible parties and the speculative nature of clean-up
cost estimates, the ultimate disposition is not expected to have a material
effect on the consolidated results of operations, financial position, or cash
flows of the company.
25
<PAGE> 26
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Campbell's Annual Meeting of Shareowners was held on November 19, 1998.
(c) The matters voted upon and the results of the vote are as follows:
Election of Directors
<TABLE>
<CAPTION>
======================================================================
Number of Shares
======================================================================
Name For Withheld
======================================================================
<S> <C> <C>
Alva A. App 396,426,644 1,008,546
======================================================================
Edmund M. Carpenter 396,523,897 911,293
======================================================================
Bennett Dorrance 396,511,291 923,899
======================================================================
Thomas W. Field, Jr. 396,521,735 913,455
======================================================================
Kent B. Foster 396,328,454 1,106,736
======================================================================
Harvey Golub 370,238,758 27,196,432
======================================================================
David W. Johnson 396,451,465 983,725
======================================================================
David K. P. Li 367,688,676 29,746,514
======================================================================
Philip E. Lippincott 396,491,909 943,281
======================================================================
Mary Alice Malone 396,505,760 929,430
======================================================================
Dale F. Morrison 396,515,322 919,868
======================================================================
Charles H. Mott 396,505,557 929,633
======================================================================
George M. Sherman 396,510,092 925,098
======================================================================
Donald M. Stewart 396,509,293 925,897
======================================================================
George Strawbridge, Jr. 396,497,687 937,503
======================================================================
Charlotte C. Weber 396,501,722 933,468
======================================================================
</TABLE>
Ratification of Appointment of Independent Accountants
<TABLE>
<CAPTION>
======================================================================================================
Broker Non-
For Against Abstentions Votes
======================================================================================================
<S> <C> <C> <C> <C>
Ratification of Appointment of 396,152,199 473,475 809,516 -0-
Accountants
======================================================================================================
</TABLE>
Shareowner Proposal Concerning Proxy Format
<TABLE>
<CAPTION>
======================================================================================================
Broker Non-
For Against Abstentions Votes
======================================================================================================
<S> <C> <C> <C> <C>
Shareowner Proposal Concerning 6,578,210 356,595,840 10,725,171 23,535,969
Proxy Format
======================================================================================================
</TABLE>
26
<PAGE> 27
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
No.
4 There is no instrument with respect to long-term debt of the company
that involves indebtedness or securities authorized thereunder
exceeding 10 percent of the total assets of the company and its
subsidiaries on a consolidated basis. The company agrees to file a
copy of any instrument or agreement defining the rights of holders
of long-term debt of the company upon request of the Securities and
Exchange Commission.
27 Financial Data Schedules.
b. Reports on Form 8-K
There were no reports on Form 8-K filed by the company during the
second quarter of fiscal 1999.
27
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAMPBELL SOUP COMPANY
Date: March 17, 1999 By: /s/ Basil Anderson
--------------------------------
Basil Anderson
Executive Vice President and
Chief Financial Officer
By: /s/ Ellen Oran Kaden
--------------------------------
Ellen Oran Kaden
Senior Vice President
Law and Government Affairs
28
<PAGE> 29
INDEX TO EXHIBITS
Exhibit Number
- --------------
<TABLE>
<CAPTION>
<S> <C>
27 Financial Data Schedule.
27.1 Financial Data Schedule.
</TABLE>
29
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-01-1999
<PERIOD-START> AUG-03-1998
<PERIOD-END> JAN-31-1999
<CASH> 30
<SECURITIES> 0
<RECEIVABLES> 745
<ALLOWANCES> 40
<INVENTORY> 621
<CURRENT-ASSETS> 1,573
<PP&E> 3,238
<DEPRECIATION> 1,519
<TOTAL-ASSETS> 5,874
<CURRENT-LIABILITIES> 3,024
<BONDS> 1,338
0
0
<COMMON> 20
<OTHER-SE> 671
<TOTAL-LIABILITY-AND-EQUITY> 5,874
<SALES> 3,636
<TOTAL-REVENUES> 3,636
<CGS> 1,686
<TOTAL-COSTS> 1,686
<OTHER-EXPENSES> 16
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 92
<INCOME-PRETAX> 732
<INCOME-TAX> 249
<INCOME-CONTINUING> 483
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 483
<EPS-PRIMARY> 1.08
<EPS-DILUTED> 1.07
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-02-1998
<PERIOD-START> AUG-04-1997
<PERIOD-END> FEB-01-1998
<CASH> 98
<SECURITIES> 0
<RECEIVABLES> 956
<ALLOWANCES> 46
<INVENTORY> 558
<CURRENT-ASSETS> 1,565
<PP&E> 3,548
<DEPRECIATION> 1,607
<TOTAL-ASSETS> 6,790
<CURRENT-LIABILITIES> 3,272
<BONDS> 1,261
0
0
<COMMON> 20
<OTHER-SE> 1,464
<TOTAL-LIABILITY-AND-EQUITY> 6,790
<SALES> 3,825
<TOTAL-REVENUES> 3,825
<CGS> 1,848
<TOTAL-COSTS> 1,848
<OTHER-EXPENSES> 41
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 92
<INCOME-PRETAX> 827
<INCOME-TAX> 284
<INCOME-CONTINUING> 543
<DISCONTINUED> 35
<EXTRAORDINARY> 0
<CHANGES> 11
<NET-INCOME> 567
<EPS-PRIMARY> 1.24
<EPS-DILUTED> 1.23
</TABLE>
