EX-99.1 2 w24452exv99w1.htm CAMPBELL SOUP COMPANY UNAUDITED PRO FORMA FINANCIAL INFORMATION exv99w1
 

EXHIBIT 99.1
Campbell Soup Company
Unaudited Pro Forma Condensed Consolidated Financial Statements
    The unaudited pro forma condensed consolidated financial statements present financial information to give effect to the sale of the United Kingdom and Irish businesses to be accounted for in accordance with Statement of Financial Accounting Standard No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets.” The unaudited pro forma condensed consolidated statements of earnings present the consolidated results of continuing operations of the Company, assuming the sale occurred as of July 29, 2002. The unaudited pro forma condensed consolidated balance sheet as of April 30, 2006 presents the consolidated financial position of the company, assuming the sale occurred on that date. The unaudited financial information is subject to the assumptions and adjustments in the notes accompanying the unaudited pro forma condensed consolidated financial statements.
 
    The unaudited pro forma condensed consolidated financial statements include specific assumptions and adjustments related to the sale of the businesses. The adjustments are based upon presently available information and assumptions that management believes are reasonable under the circumstances as of the date of this filing. However, actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial statements, including notes thereto, should be read in conjunction with the historical financial statements of the Company included in its Annual Report on Form 10-K for the year ended July 31, 2005 and the unaudited financial statements filed in its Quarterly Report on Form 10-Q for the three and nine months ended April 30, 2006.
 
    The unaudited pro forma condensed consolidated financial information presented is for informational purposes only. It is not intended to represent or be indicative of the consolidated results of operations or financial position that would have occurred had the sale been completed as of the dates presented nor is it intended to be indicative of future results of operations or financial position.

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CAMPBELL SOUP COMPANY CONSOLIDATED
Pro Forma Consolidated Statement of Earnings
(unaudited)
(millions, except per share amounts)
                                         
    Nine Months Ended April 30, 2006
            Less   Adjusted        
            Discontinued   Continuing   Pro Forma   Pro Forma
    As Reported   Operations (A)   Operations   Adjustments (B)   Adjusted
Net sales
   $ 6,227     $ (338 )   $ 5,889             $ 5,889  
 
 
                                        
Costs and expenses
                                        
Cost of products sold
     3,651       (226 )     3,425               3,425  
Marketing and selling expenses
     969       (28 )     941               941  
Administrative expenses
     454       (14 )     440               440  
Research and development expenses
     73       (3 )     70               70  
Other expenses
     1       —       1               1  
 
Total costs and expenses
     5,148       (271 )     4,877               4,877  
 
Earnings before interest and taxes
     1,079       (67 )     1,012               1,012  
Interest, net
     110       (1 )     109               109  
 
Earnings before taxes
     969       (66 )     903               903  
Taxes on earnings
     247       (15 )     232               232  
 
 
                                        
Earnings from continuing operations
   $ 722     $ (51 )   $ 671             $ 671  
 
 
                                        
Per share — basic
                                        
 
                                        
Earnings from continuing operations
   $ 1.77     $ (.13 )   $ 1.64             $ 1.71  
 
 
                                        
Weighted average shares outstanding — basic
     408               408       (16 )     392  
 
 
Per share — assuming dilution
                                        
 
                                        
Earnings from continuing operations
   $ 1.74     $ (.13 )   $ 1.62             $ 1.69  
 
 
                                        
Weighted average shares outstanding — assuming dilution
     414               414       (16 )     398  
 
See Notes to Pro Forma Consolidated Financial Statements.
The sum of the individual per share amounts does not equal due to rounding.

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CAMPBELL SOUP COMPANY CONSOLIDATED
Pro Forma Consolidated Statement of Earnings
(unaudited)
(millions, except per share amounts)
                                         
    Year Ended July 31, 2005
            Less   Adjusted        
            Discontinued   Continuing   Pro Forma   Pro Forma
    As Reported   Operations (A)   Operations   Adjustments (B)   Adjusted
Net sales
   $ 7,548     $ (476 )   $ 7,072             $ 7,072  
 
 
                                        
Costs and expenses
                                        
Cost of products sold
     4,491       (316 )     4,175               4,175  
Marketing and selling expenses
     1,185       (54 )     1,131               1,131  
Administrative expenses
     571       (22 )     549               549  
Research and development expenses
     95       (5 )     90               90  
Other income
     (4 )     (1 )     (5 )             (5 )
 
Total costs and expenses
     6,338       (398 )     5,940               5,940  
 
Earnings before interest and taxes
     1,210       (78 )     1,132               1,132  
Interest expense
     184       —       184               184  
Interest income
     4       —       4               4  
 
Earnings before taxes
     1,030       (78 )     952               952  
Taxes on earnings
     323       (15 )     308               308  
 
 
                                        
Earnings from continuing operations
   $ 707     $ (63 )   $ 644             $ 644  
 
 
                                        
Per share — basic
                                        
 
                                        
Earnings from continuing operations
   $ 1.73     $ (.15 )   $ 1.57             $ 1.64  
 
 
                                        
Weighted average shares outstanding — basic
     409               409       (16 )     393  
 
 
                                        
Per share — assuming dilution
                                        
 
                                        
Earnings from continuing operations
   $ 1.71     $ (.15 )   $ 1.56             $ 1.62  
 
 
                                        
Weighted average shares outstanding — assuming dilution
     413               413       (16 )     397  
 
See Notes to Pro Forma Consolidated Financial Statements.
The sum of the individual per share amounts does not equal due to rounding.

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CAMPBELL SOUP COMPANY CONSOLIDATED
Pro Forma Consolidated Statement of Earnings
(unaudited)
(millions, except per share amounts)
                         
    Year Ended August 1, 2004
            Less   Adjusted
            Discontinued   Continuing
    As Reported   Operations (A)   Operations
Net sales
   $ 7,109     $ (449 )   $ 6,660  
 
 
                        
Costs and expenses
                        
Cost of products sold
     4,187       (285 )     3,902  
Marketing and selling expenses
     1,153       (56 )     1,097  
Administrative expenses
     542       (20 )     522  
Research and development expenses
     93       (5 )     88  
Other income
     (13 )     —       (13 )
Restructuring charge
     32       (6 )     26  
 
Total costs and expenses
     5,994       (372 )     5,622  
 
Earnings before interest and taxes
     1,115       (77 )     1,038  
Interest expense
     174       —       174  
Interest income
     6       —       6  
 
Earnings before taxes
     947       (77 )     870  
Taxes on earnings
     300       (12 )     288  
 
 
                        
Earnings from continuing operations
   $ 647     $ (65 )   $ 582  
 
 
                        
Per share — basic
                        
 
                        
Earnings from continuing operations
   $ 1.58     $ (.16 )   $ 1.42  
 
 
                        
Weighted average shares outstanding — basic
     409               409  
 
 
                        
Per share — assuming dilution
                        
 
                        
Earnings from continuing operations
   $ 1.57     $ (.16 )   $ 1.41  
 
 
                        
Weighted average shares outstanding — assuming dilution
     412               412  
 
See Notes to Pro Forma Consolidated Financial Statements.

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CAMPBELL SOUP COMPANY CONSOLIDATED
Pro Forma Consolidated Statement of Earnings
(unaudited)
(millions, except per share amounts)
                         
    Year Ended August 3, 2003
            Less   Adjusted
            Discontinued   Continuing
    As Reported   Operations (A)   Operations
Net sales
   $ 6,678     $ (407 )   $ 6,271  
 
 
                        
Costs and expenses
                        
Cost of products sold
     3,805       (265 )     3,540  
Marketing and selling expenses
     1,145       (48 )     1,097  
Administrative expenses
     507       (20 )     487  
Research and development expenses
     88       (5 )     83  
Other expenses
     28       6       34  
 
Total costs and expenses
     5,573       (332 )     5,241  
 
Earnings before interest and taxes
     1,105       (75 )     1,030  
Interest expense
     186       —       186  
Interest income
     5       —       5  
 
Earnings before taxes
     924       (75 )     849  
Taxes on earnings
     298       (17 )     281  
 
 
                        
Earnings from continuing operations
   $ 626     $ (58 )   $ 568  
 
 
                        
Per share — basic
                        
 
                        
Earnings from continuing operations
   $ 1.52     $ (.14 )   $ 1.38  
 
 
                        
Weighted average shares outstanding — basic
     411               411  
 
 
                        
Per share — assuming dilution
                        
 
                        
Earnings from continuing operations
   $ 1.52     $ (.14 )   $ 1.38  
 
 
                        
Weighted average shares outstanding — assuming dilution
     411               411  
 
See Notes to Pro Forma Consolidated Financial Statements.

9

 

CAMPBELL SOUP COMPANY CONSOLIDATED
Pro Forma Consolidated Balance Sheet
April 30, 2006
(unaudited)
(millions, except per share amounts)
                         
            Pro Forma   Pro Forma
    As Reported   Adjustments   Adjusted
     
Current assets
                        
Cash and cash equivalents
   $ 530     $ 200
(C)
   $ 730  
Accounts receivable
     579       (58 ) (D)     521  
Inventories
     650       (45 ) (D)     605  
Other current assets
     163       (3 ) (D)     160  
 
Total current assets
     1,922       94       2,016  
 
Plant assets, net of depreciation
     1,944       (90 ) (D)     1,854  
Goodwill
     1,997       (240 ) (D)     1,757  
Other intangible assets, net of amortization
     1,088       (494 ) (D)     594  
Other assets
     301       30
(D)
     331  
 
Total assets
   $ 7,252     $ (700 )   $ 6,552  
 
 
                        
Current liabilities
                        
Notes payable
   $ 1,043       —     $ 1,043  
Payable to suppliers and others
     546       (60 ) (D)     486  
Accrued liabilities
     713       (15 ) (D)     698  
Dividend payable
     74       —       74  
Accrued income taxes
     250       65
(E)
     315  
 
Total current liabilities
     2,626       (10 )     2,616  
 
 
                        
Long-term debt
     1,904       —       1,904  
Nonpension postretirement benefits
     276       —       276  
Other liabilities
     666       —       666  
 
Total liabilities
     5,472       (10 )     5,462  
 
Shareowners’ equity
                        
Preferred stock; authorized 40 shares; none issued
     —       —       —  
Capital stock, $.0375 par value; authorized 560 shares; issued 542 shares
     20       —       20  
Additional paid-in capital
     344       —       344  
Earnings retained in the business
     6,569       (56 ) (F)     6,513  
Capital stock in treasury, at cost
     (4,973 )     (620 ) (C)     (5,593 )
Accumulated other comprehensive loss
     (180 )     (14 ) (D)     (194 )
 
Total shareowners’ equity
     1,780       (690 )     1,090  
 
Total liabilities and shareowners’ equity
   $ 7,252     $ (700 )   $ 6,552  
 
See Notes to Pro Forma Consolidated Financial Statements.

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Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
    The unaudited pro forma condensed consolidated financial statements give effect to the sale of the United Kingdom and Irish businesses to be accounted for as a discontinued operation. The unaudited pro forma condensed consolidated statements of earnings are presented as if the sale occurred as of July 29, 2002. The anticipated nonrecurring after-tax loss on the sale is not reflected in the pro forma condensed consolidated statements of earnings. The impact of the anticipated use of proceeds to repurchase shares is included in the unaudited pro forma condensed consolidated statements of earnings for the nine-month period ended April 30, 2006 and the year ended July 31, 2005. The unaudited pro forma condensed consolidated balance sheet is presented as if the sale occurred on April 30, 2006 and is based on the historical balance sheet as of that date. The nonrecurring after-tax loss is reflected in the pro forma balance sheet.
(A)   The Discontinued Operations columns in the unaudited pro forma information represent the historical financial results of the Company’s United Kingdom and Irish businesses.
 
(B)   The Company expects to use approximately $620 million of the net proceeds from the sale to repurchase shares. The Pro Forma adjustments represent the impact of utilizing $620 million of proceeds to repurchase shares at an estimated price of $38.11 per share, the closing stock price as of August 15, 2006. Therefore, 16 million shares are assumed to be repurchased and eliminated from shares outstanding in the earnings per share calculation for the nine months ended April 30, 2006 and the year ended July 31, 2005.
 
(C)   The Pro Forma adjustment represents anticipated net cash proceeds from the sale based on currency exchange rates as of April 30, 2006 of $820 million, net of approximately $20 million of cash divested and transaction costs and expenses associated with selling the business. The $620 million of net proceeds expected to be used to repurchase shares is reflected as an adjustment to treasury stock. The remaining net proceeds will be used to pay income taxes associated with the sale, to settle foreign currency hedging contracts associated with intercompany financing transactions of the discontinued businesses, and to repay debt.
 
(D)   The Pro Forma adjustments represent the elimination of the assets and liabilities of the discontinued operations.
 
(E)   The Pro Forma adjustment represents the estimated tax expense associated with the sale of $68 million and the elimination of $3 million of accrued income taxes of the discontinued operations.
 
(F)   The estimated after-tax loss of approximately $56 million is reflected as an adjustment to retained earnings. The after-tax loss includes the tax impact described in note (E), which primarily represents the recognition of certain book and tax basis differences in accordance with EITF Issue No. 93-17, “Recognition of Deferred Tax Assets for a Parent Company’s Excess Tax Basis in the Stock of a Subsidiary That Is Accounted for as a Discontinued Operation.” This estimate is based on the historical information as of April 30, 2006. Actual adjustments may differ from the information presented.

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