Edgar Filing: CAMPBELL SOUP CO

CPB-8.3.2014-10K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

____________________________________________________________________________

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the Fiscal Year Ended August 3, 2014	Commission File Number 1-3822

CAMPBELL SOUP COMPANY



New Jersey	21-0419870
State of Incorporation	I.R.S. Employer Identification No.

1 Campbell Place

Camden, New Jersey 08103-1799

Principal Executive Offices

Telephone Number: (856) 342-4800

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class		Name of Each Exchange on Which Registered

Capital Stock, par value $.0375		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. R Yes o No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. o Yes R No

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. R Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). R Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. R

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes R No

As of January 24, 2014 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of capital stock held by non-affiliates of the registrant was approximately $7,711,154,033. There were 314,220,361 shares of capital stock outstanding as of September 15, 2014.

Portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on November 19, 2014, are incorporated by reference into Part III.

TABLE OF CONTENTS



PART I
	Item 1. Business	3
	Item 1A. Risk Factors	5
	Item 1B. Unresolved Staff Comments	9
	Item 2. Properties	10
	Item 3. Legal Proceedings	10
	Item 4. Mine Safety Disclosures	10
	Executive Officers of the Company	11
PART II
	Item 5. Market for Registrant’s Capital Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities	11
	Item 6. Selected Financial Data	13
	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 7A. Quantitative and Qualitative Disclosure about Market Risk	32
	Item 8. Financial Statements and Supplementary Data	33
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	79
	Item 9A. Controls and Procedures	79
	Item 9B. Other Information	79
PART III
	Item 10. Directors, Executive Officers and Corporate Governance	79
	Item 11. Executive Compensation	79
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	80
	Item 13. Certain Relationships and Related Transactions, and Director Independence	80
	Item 14. Principal Accounting Fees and Services	80
PART IV
	Item 15. Exhibits and Financial Statement Schedules	80
	Signatures	83

PART I

Item 1. Business

The Company

Campbell Soup Company, together with its consolidated subsidiaries (Campbell or the company), is a manufacturer and marketer of high-quality, branded convenience food products. Campbell was organized as a business corporation under the laws of New Jersey on November 23, 1922; however, through predecessor organizations, it traces its heritage in the food business back to 1869. The company’s principal executive offices are in Camden, New Jersey 08103-1799.

Background

On August 6, 2012, the company completed the acquisition of BF Bolthouse Holdco LLC (Bolthouse Farms). Based in Bakersfield, California, Bolthouse Farms is a vertically integrated food and beverage company focused on developing, manufacturing and marketing fresh carrots and proprietary, high value-added products. After taking into account customary purchase price adjustments, the final all-cash purchase price was $1.561 billion. For more information on the Bolthouse Farms acquisition, see Note 3 to the Consolidated Financial Statements.

On June 13, 2013, the company completed the acquisition of Plum, PBC (Plum). Based in Emeryville, California, Plum is a leading provider of premium, organic foods and snacks that serve the nutritional needs of babies, toddlers and children. The final all-cash purchase price was $249 million. For more information on the Plum acquisition, see Note 3 to the Consolidated Financial Statements.

On August 8, 2013, the company completed the acquisition of Kelsen Group A/S (Kelsen). Based in Nørre Snede, Denmark, Kelsen is a producer of quality baked snacks that are sold in 85 countries around the world. The final all-cash purchase price was $331 million. For more information on the Kelsen acquisition, see Note 3 to the Consolidated Financial Statements.

On October 28, 2013, the company completed the sale of its European simple meals business to Soppa Investments S.à r.l., an affiliate of CVC Capital Partners. The all-cash preliminary sale price was €400 million, or $548 million, and was subject to certain post-closing adjustments, which resulted in a $14 million reduction of proceeds. The company recognized a pre-tax gain of $141 million ($72 million after tax or $.23 per share) in 2014. The company has reflected the results of the European simple meals business as discontinued operations in the Consolidated Statements of Earnings for all years presented. The business was historically included in the International Simple Meals and Beverages segment. For more information on the sale of the European simple meals business, see Note 4 to the Consolidated Financial Statements.

Reportable Segments

The company reports the results of operations in the following reportable segments: U.S. Simple Meals; Global Baking and Snacking; International Simple Meals and Beverages; U.S. Beverages; and Bolthouse and Foodservice. The company has 10 operating segments based on product type and geographic location and has aggregated the operating segments into the appropriate reportable segment based on similar economic characteristics; products; production processes; types or classes of customers; distribution methods; and regulatory environment. See also Note 7 to the Consolidated Financial Statements. The reportable segments are discussed in greater detail below.

U.S. Simple Meals

The U.S. Simple Meals segment includes the following products: Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans and dinner sauces; Swanson canned poultry; and as of June 13, 2013, Plum Organics food and snacks.

Global Baking and Snacking

The Global Baking and Snacking segment aggregates the following operating segments: Pepperidge Farm cookies, crackers, bakery and frozen products in U.S. retail; Arnott’s biscuits in Australia and Asia Pacific; and as of August 8, 2013, Kelsen cookies globally.

International Simple Meals and Beverages

The International Simple Meals and Beverages segment aggregates the following operating segments: the retail business in Canada and the simple meals and beverages business in Asia Pacific, Latin America and China. See “Background” and Note 4 to the Consolidated Financial Statements for information on the sale of the European simple meals business, which was historically included in this segment. The results of operations of the European simple meals business have been reflected as discontinued operations for the years presented.

U.S. Beverages

The U.S. Beverages segment represents the U.S. retail beverages business, including the following products: V8 juices and beverages, and Campbell’s tomato juice.

Bolthouse and Foodservice

Bolthouse and Foodservice comprises the Bolthouse Farms carrot products operating segment, including fresh carrots, juice concentrate and fiber; the Bolthouse Farms super-premium refrigerated beverages and refrigerated salad dressings operating segment; and the North America Foodservice operating segment. The North America Foodservice operating segment represents the distribution of products such as soup, specialty entrées, beverage products, other prepared foods and Pepperidge Farm products through various food service channels in the U.S. and Canada. None of these operating segments meets the criteria for aggregation nor the thresholds for separate disclosure.

Ingredients and Packaging

The ingredient and packaging materials required for the manufacture of the company’s food products are purchased from various suppliers. These items are subject to fluctuations in price attributable to a number of factors, including changes in crop size, cattle cycles, product scarcity, demand for raw materials, energy costs, government-sponsored agricultural programs, import and export requirements and regional drought and other weather conditions (including the potential effects of climate change) during the growing and harvesting seasons. To help reduce some of this price volatility, the company uses a combination of purchase orders, short- and long-term contracts, inventory management practices and various commodity risk management tools for most of its ingredients and packaging. Ingredient inventories are at a peak during the late fall and decline during the winter and spring. Since many ingredients of suitable quality are available in sufficient quantities only at certain seasons, the company makes commitments for the purchase of such ingredients during their respective seasons. At this time, the company does not anticipate any material restrictions on availability or shortages of ingredients or packaging that would have a significant impact on the company’s businesses. For information on the impact of inflation on the company, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Customers

In most of the company’s markets, sales and merchandising activities are conducted through the company’s own sales force and its third-party broker and distributor partners. In the U.S., Canada and Latin America, the company’s products are generally resold to consumers in retail food chains, mass discounters, mass merchandisers, club stores, convenience stores, drug stores, dollar stores and other retail, commercial and non-commercial establishments. In the Asia Pacific region, the company’s products are generally resold to consumers through retail food chains, convenience stores and other retail, commercial and non-commercial establishments. The company makes shipments promptly after receipt and acceptance of orders.

The company's five largest customers accounted for approximately 35% of the company's consolidated net sales from continuing operations in 2014, 36% in 2013 and 37% in 2012. The company’s largest customer, Wal-Mart Stores, Inc. and its affiliates, accounted for approximately 19% of the company’s consolidated net sales in 2014, 2013 and 2012. All of the company’s reportable segments sold products to Wal-Mart Stores, Inc. or its affiliates. No other customer accounted for 10% or more of the company’s consolidated net sales.

Trademarks and Technology

As of September 15, 2014, the company owned over 3,700 trademark registrations and applications in over 160 countries. The company believes its trademarks are of material importance to its business. Although the laws vary by jurisdiction, trademarks generally are valid as long as they are in use and/or their registrations are properly maintained and have not been found to have become generic. Trademark registrations generally can be renewed indefinitely as long as the trademarks are in use. The company believes that its principal brands, including Arnott's, Bolthouse Farms, Campbell's, Goldfish, Kjeldsens, Pace, Pepperidge Farm, Plum Organics, Prego, Swanson and V8, are protected by trademark law in the major markets where they are used. In addition, some of the company's products are sold under brands that have been licensed from third parties.

Although the company owns a number of valuable patents, it does not regard any segment of its business as being dependent upon any single patent or group of related patents. In addition, the company owns copyrights, both registered and unregistered, and proprietary trade secrets, technology, know-how, processes, and other intellectual property rights that are not registered.

Competition

The company experiences worldwide competition in all of its principal products. This competition arises from numerous competitors of varying sizes across multiple food and beverage categories, and includes producers of generic and private label products, as well as other branded food and beverage manufacturers. All of these competitors vie for trade merchandising support and consumer dollars. The number of competitors cannot be reliably estimated. The principal areas of competition are brand recognition, taste, quality, price, advertising, promotion, convenience and service.

Working Capital

For information relating to the company’s cash and working capital items, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Capital Expenditures

During 2014, the company’s aggregate capital expenditures were $347 million. The company expects to spend approximately $400 million for capital projects in 2015. Major 2015 capital projects include a Bolthouse Farms beverage and salad dressing capacity expansion project, the ongoing implementation of a series of related initiatives to simplify and standardize the soup-making process in North America (also known as the soup common platform initiative), the ongoing Pepperidge Farm cracker capacity expansion project, the ongoing enhancement of the company's corporate headquarters in Camden, New Jersey, an ongoing Bolthouse Farms warehouse capacity expansion project and an Indonesian biscuit capacity expansion project.

Research and Development

During the last three fiscal years, the company’s expenditures on research and development activities relating to new products and the improvement and maintenance of existing products were $121 million in 2014, $128 million in 2013, and $116 million in 2012. The decrease from 2013 to 2014 was primarily due to lower incentive compensation costs and cost savings from restructuring initiatives, partially offset by the impact of acquisitions. The increase from 2012 to 2013 was primarily due to higher incentive compensation and benefit costs, the addition of Bolthouse Farms expenses and higher costs associated with product innovation in North America.

Environmental Matters

The company has requirements for the operation and design of its facilities that meet or exceed applicable environmental rules and regulations. Of the company’s $347 million in capital expenditures made during 2014, approximately $15 million was for compliance with environmental laws and regulations in the U.S. The company further estimates that approximately $16 million of the capital expenditures anticipated during 2015 will be for compliance with U.S. environmental laws and regulations. The company believes that continued compliance with existing environmental laws and regulations (both within the U.S. and elsewhere) will not have a material effect on capital expenditures, earnings or the competitive position of the company. In addition, the company continues to monitor pending environmental laws and regulations within the U.S. and elsewhere, including proposed regulations in the U.S. to limit carbon dioxide emissions from electric utilities, as well as other laws and regulations relating to climate change and greenhouse gas emissions. While the impact of these pending laws and regulations cannot be predicted with certainty, the company does not believe that compliance with these pending laws and regulations will have a material effect on capital expenditures, earnings or the competitive position of the company.

Seasonality

Demand for the company’s products is somewhat seasonal, with the fall and winter months usually accounting for the highest sales volume due primarily to demand for the company’s soup products. Sales of Kelsen products are also highest in the fall and winter months due primarily to holiday gift giving. Demand for the company’s other simple meal and baking and snacking products, as well as the company's beverage products, is generally evenly distributed throughout the year.

Employees

On August 3, 2014, there were approximately 19,400 employees of the company.

Financial Information

Financial information for the company’s reportable segments and geographic areas is found in Note 7 to the Consolidated Financial Statements. For risks attendant to the company’s foreign operations, see “Risk Factors.”

Company Website

The company’s primary corporate website can be found at www.campbellsoupcompany.com. The company makes available free of charge at this website (under the “Investor Center — Financial Information — SEC Filings” caption) all of its reports (including amendments) filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, including its annual report on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K. These reports are made available on the website as soon as reasonably practicable after their filing with, or furnishing to, the Securities and Exchange Commission.

Item 1A. Risk Factors

In addition to the factors discussed elsewhere in this Report, the following risks and uncertainties could materially adversely affect the company’s business, financial condition and results of operations. Additional risks and uncertainties not presently known to the company or that the company currently deems immaterial also may impair the company’s business operations and financial condition.

The company operates in a highly competitive industry

The company operates in the highly competitive food industry and experiences international competition in all of its principal products. The principal areas of competition are brand recognition, taste, quality, price, advertising, promotion, convenience and service. A number of the company's primary competitors have substantial financial, marketing and other resources. A strong competitive response from one or more of these competitors to the company's marketplace efforts, or a consumer shift towards private label offerings, could result in the company reducing pricing, increasing marketing or other expenditures, and/or losing market share.

The company's results are dependent on strengthening its established businesses while diversifying into higher-growth spaces

The company's strategy is focused on strengthening its established businesses while diversifying its portfolio into higher-growth spaces. Its established simple meals, snacks and healthy beverages businesses are concentrated in slower-growing center-store categories in traditional mass and grocery channels. Factors that may impact the company's success in strengthening these businesses and/or diversifying its portfolio into higher-growth spaces include:

•the company's ability to identify and capitalize on higher-growth spaces;


•	the company's ability to identify and capitalize on customer or consumer trends, including those related to new or improved products or packaging;

•the company's ability to design and implement effective retail execution plans;

•the company's ability to design and implement effective advertising and marketing programs;

•the company's ability to secure or maintain sufficient shelf space at retailers; and

•changes in underlying growth rates of the categories in which the company competes.

If the company is not successful in addressing theses factors, the company's strategy may not be successful and/or the company's business or financial results may be negatively impacted.

The company's results may be adversely affected by the failure to execute acquisitions and divestitures successfully

The company's ability to meet its objectives with respect to the acquisition of new businesses or the divestiture of existing businesses may depend in part on its ability to identify suitable buyers and sellers, negotiate favorable financial terms and other contractual terms, and obtain all necessary regulatory approvals. Potential risks of acquisitions also include:

•the inability to integrate acquired businesses efficiently into the company's existing operations;

•diversion of management's attention from other business concerns;

•potential loss of key employees and/or customers of acquired businesses;

•potential assumption of unknown liabilities;

•the inability to implement promptly an effective control environment;

•potential impairment charges if purchase assumptions are not achieved or market conditions decline; and

•the risks inherent in entering markets or lines of business with which the company has limited or no prior experience.

Acquisitions outside the U.S. may present unique challenges and increase the company's exposure to risks associated with foreign operations, including foreign currency risks and risks associated with local regulatory regimes. For divestitures, potential risks may also include the inability to separate divested businesses or business units from the company effectively and efficiently and to reduce or eliminate associated overhead costs. The company's business or financial results may be negatively affected if acquisitions or divestitures are not successfully implemented or completed.

Disruption to the company's supply chain could adversely affect its business

The company's ability to manufacture and/or sell its products may be impaired by damage or disruption to its manufacturing or distribution capabilities, or to the capabilities of its suppliers or contract manufacturers, due to factors that are hard to predict or beyond the company's control, such as adverse weather conditions, natural disasters, fire, terrorism, pandemics, strikes or other events. Production of the agricultural commodities used in the company's business may also be adversely affected by drought, water scarcity, temperature extremes, scarcity of suitable agricultural land, crop disease and/or crop pests. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, may adversely affect the company's business or financial results, particularly in circumstances where a product is sourced from a single supplier or location. Disputes with significant suppliers or contract manufacturers, including disputes regarding pricing or performance, may also adversely affect the company's ability to manufacture and/or sell its products, as well as its business or financial results.

The company's non-U.S. operations pose additional risks to the company's business

In 2014, approximately 22% of the company's consolidated net sales from continuing operations were generated outside of the U.S. Sales outside the U.S. are expected to continue to represent a significant portion of consolidated net sales. The company's business or financial performance may be adversely affected due to the risks of doing business in markets outside of the U.S., including but not limited to the following:

•unfavorable changes in tariffs, quotas, trade barriers or other export and import restrictions;


•	the difficulty and/or costs of complying with a wide variety of laws, treaties and regulations, including anti-corruption laws and regulations such as the U.S. Foreign Corrupt Practices Act;


•	the difficulty and/or costs of designing and implementing an effective control environment across diverse regions and employee bases;


•	the adverse impact of foreign tax treaties and policies;


•	political or economic instability, including the possibility of civil unrest, armed hostilities or terrorist acts;


•	the possible nationalization of operations;


•	the difficulty of enforcing remedies and protecting intellectual property in various jurisdictions; and


•	restrictions on the transfer of funds to and from countries outside of the U.S., including potentially negative tax consequences.

In addition, the company holds assets and incurs liabilities, generates revenue, and pays expenses in a variety of currencies other than the U.S. dollar, primarily the Australian dollar and the Canadian dollar. The company's consolidated financial statements are presented in U.S. dollars, and the company must translate its assets, liabilities, sales and expenses into U.S. dollars for external reporting purposes. As a result, changes in the value of the U.S. dollar due to fluctuations in currency exchange rates or currency exchange controls may materially and negatively affect the value of these items in the company's consolidated financial statements, even if their value has not changed in their local currency.

The company faces risks related to recession, financial and credit market disruptions and other economic conditions

Customer and consumer demand for the company's products may be impacted by weak economic conditions, recession, equity market volatility or other negative economic factors in the U.S. or other nations. Similarly, disruptions in financial and/or credit markets may impact the company's ability to manage normal commercial relationships with its customers, suppliers and creditors. In addition, changes in tax or interest rates in the U.S. or other nations, whether due to recession, financial and credit market disruptions or other reasons, could impact the company.

Increased regulation or regulatory-based claims could adversely affect the company's business or financial results

The manufacture and marketing of food products is extensively regulated. The primary areas of regulation include the processing, packaging, storage, distribution, marketing, advertising, labeling, quality and safety of the company's food products, as well as the health and safety of the company's employees and the protection of the environment. In the U.S., the company is subject to regulation by various government agencies, including the Food and Drug Administration, the U.S. Department of Agriculture, the Federal Trade Commission, the Occupational Safety and Health Administration and the Environmental Protection Agency, as well as various state and local agencies. The company is also regulated by similar agencies outside the U.S. Changes in regulatory requirements (such as proposed labeling requirements), or evolving interpretations of existing regulatory requirements, may result in increased compliance cost, capital expenditures and other financial obligations that could adversely affect the company's business or financial results. In addition, the marketing of food products has come under increased scrutiny in recent years, and the food industry has been subject to an increasing number of legal proceedings and claims relating to alleged false or deceptive marketing under federal, state and foreign laws or regulations. Legal proceedings or claims related to the company's marketing could damage the company's reputation and/or could adversely affect the company's business or financial results.

The company's results may be adversely impacted by increases in the price of raw and packaging materials

The raw and packaging materials used in the company's business include tomato paste, grains, beef, poultry, vegetables, steel, glass, paper and resin. Many of these materials are subject to price fluctuations from a number of factors, including product scarcity, demand for raw materials, commodity market speculation, energy costs, currency fluctuations, weather conditions, import and export requirements and changes in government-sponsored agricultural programs. To the extent any of these factors result in an increase in raw and packaging material prices, the company may not be able to offset such increases through productivity or price increases or through its commodity hedging activity.

Adverse changes in the global climate or extreme weather conditions could adversely affect the company's business or operations

The company's business or financial results could be adversely affected by changing global temperatures or weather patterns or by extreme or unusual weather conditions. Adverse changes in the global climate or extreme or unusual weather conditions could:


•	unfavorably impact the cost or availability of raw or packaging materials, especially if such events have a negative impact on agricultural productivity or on the supply of water;


•	disrupt the company's ability, or the ability of its suppliers or contract manufacturers, to manufacture or distribute the company's products;


•	disrupt the retail operations of the company's customers; or


•	unfavorably impact the demand for, or the consumer's ability to purchase, the company's products.

In addition, there is growing concern that the release of carbon dioxide and other greenhouse gases into the atmosphere may be impacting global temperatures and weather patterns and contributing to extreme or unusual weather conditions. This growing concern may result in more regional, federal, and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases. Adoption of such additional regulation may result in increased compliance costs, capital expenditures, and other financial obligations that could adversely affect the company's business or financial results.

Price increases may not be sufficient to cover increased costs, or may result in declines in sales volume due to pricing elasticity in the marketplace

The company intends to pass along to customers some or all cost increases in raw and packaging materials and other inputs through increases in the selling prices of, or decreases in the packaging sizes of, some of its products. Higher product prices or smaller packaging sizes may result in reductions in sales volume. To the extent the price increases or packaging size decreases are not sufficient to offset increased raw and packaging materials and other input costs, and/or if they result in significant decreases in sales volume, the company's business results and financial condition may be adversely affected.

The company may be adversely impacted by a changing customer landscape and the increased significance of some of its customers

The company's businesses are largely concentrated in the traditional retail grocery trade. In recent years, alternative retail grocery channels, such as dollar stores, drug stores, club stores and Internet-based retailers, have increased their market share. This trend towards alternative channels is expected to continue in the future. If the company is not successful in pursuing its strategy to expand sales in alternative retail grocery channels, its business or financial results may be adversely impacted. In addition, consolidations in the traditional retail grocery trade have produced large, sophisticated customers with increased buying power and negotiating strength who may seek lower prices or increased promotional programs funded by their suppliers. These customers may use more of their shelf space for their private label products. If the company is unable to use its scale, marketing expertise, product innovation and category leadership positions to respond to these customer dynamics, the company's business or financial results could be negatively impacted.

In 2014, the company's five largest customers accounted for approximately 35% of the company's consolidated net sales, with the largest customer, Wal-Mart Stores, Inc. and its affiliates, accounting for approximately 19% of the company's consolidated net sales. Disruption of sales to any of these customers, or to any of the company's other large customers, for an extended period of time could adversely affect the company's business or financial results.

If the company's food products become adulterated or are mislabeled, the company might need to recall those items, and may experience product liability claims if consumers are injured

The company may need to recall some of its products if they become adulterated or if they are mislabeled, and may also be liable if the consumption of any of its products causes injury to consumers. A widespread product recall could result in significant losses due to the costs of a recall, the destruction of product inventory, and lost sales due to the unavailability of product for a period of time. The company could also suffer losses from a significant adverse product liability judgment. A significant product recall or product liability claim could also result in adverse publicity, damage to the company's reputation, and a loss of consumer confidence in the safety and/or quality of its products, ingredients or packaging. Such a loss of confidence could occur even in the absence of a recall or a major product liability claim.

The company may be adversely impacted by inadequacies in, or security breaches of, its information technology systems

The company's information technology systems are critically important to the company's operations. The company relies on its information technology systems (some of which are outsourced to third parties) to manage the data, communications and business processes for all of its functions, including its marketing, sales, manufacturing, logistics, customer service, accounting and administrative functions. If the company does not allocate and effectively manage the resources necessary to build, sustain and protect an appropriate technology infrastructure, the company's business or financial results could be negatively impacted. Furthermore, the company's information technology systems may be vulnerable to material security breaches (including the access to or acquisition of customer, consumer or other confidential data), cyber-based attacks or other material system failures. If the company is unable to prevent material failures, the company's operations may be impacted, and the company may suffer other negative consequences such as reputational damage, litigation, remediation costs and/or penalties under various data privacy laws and regulations.

The company's results may be negatively impacted if consumers do not maintain their favorable perception of its brands

The company has a number of iconic brands with significant value. Maintaining and continually enhancing the value of these brands is critical to the success of the company's business. Brand value is based in large part on consumer perceptions. Success in promoting and enhancing brand value depends in large part on the company's ability to provide high-quality products. Brand value could diminish significantly due to a number of factors, including consumer perception that the company has acted in an irresponsible manner, adverse publicity about the company's products, packaging and/or ingredients (whether or not valid), the company's failure to maintain the quality of its products, the failure of the company's products to deliver consistently positive consumer experiences, or the products becoming unavailable to consumers. The growing use of social and digital media by consumers increases the speed and extent that information and opinions can be shared. Negative posts or comments about the company, its brands, products or packaging on social or digital media could seriously damage the company's brands and reputation. If the company does not maintain the favorable perception of its brands, the company's results could be negatively impacted.

The company may not properly execute, or realize anticipated cost savings or benefits from, its ongoing supply chain, information technology or other initiatives

The company's success is partly dependent upon properly executing, and realizing cost savings or other benefits from, its ongoing supply chain, information technology and other initiatives. These initiatives are primarily designed to make the company more efficient, which is necessary in the company's highly competitive industry. These initiatives are often complex, and a failure to implement them properly may, in addition to not meeting projected cost savings or benefits, result in an interruption to the company's sales, manufacturing, logistics, customer service or accounting functions.

The company may be adversely impacted by increased liabilities and costs related to its defined benefit pension plans

The company sponsors a number of defined benefit pension plans for employees in the U.S. and various non-U.S. locations. The major defined benefit pension plans are funded with trust assets invested in a globally diversified portfolio of securities and other investments. Changes in regulatory requirements or the market value of plan assets, investment returns, interest rates and mortality rates may affect the funded status of the company's defined benefit pension plans and cause volatility in the net periodic benefit cost, future funding requirements of the plans and the funded status as recorded on the balance sheet. A significant increase in the company's obligations or future funding requirements could have a material adverse effect on the financial results of the company.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The company's principal executive offices are company-owned and located in Camden, New Jersey. The following table sets forth the company's principal manufacturing facilities and the business segment that primarily uses each of the facilities:

Principal Manufacturing Facilities



Inside the U.S.
California	New Jersey	Texas
Bakersfield (BFS)	East Brunswick (GBS)	Paris (USSM/USB/ISMB/BFS)
Dixon (USSM/USB)	North Carolina	Utah
Stockton (USSM/USB)	Maxton (USSM/ISMB)	Richmond (GBS)
Connecticut	Ohio	Washington
Bloomfield (GBS)	Napoleon (USSM/USB/BFS/ISMB)	Everett (BFS)
Florida	Willard (GBS)	Prosser (BFS)
Lakeland (GBS)	Pennsylvania	Wisconsin
Illinois	Denver (GBS)	Milwaukee (USSM)
Downers Grove (GBS)	Downingtown (GBS/BFS)



Outside the U.S.
Australia	Canada	Indonesia
Huntingwood (GBS)	Toronto (USSM/ISMB/BFS)	Jawa Barat (GBS)
Marleston (GBS)	Denmark	Malaysia
Shepparton (ISMB)	Nørre Snede (GBS)	Selangor Darul Ehsan (ISMB)
Virginia (GBS)	Ribe (GBS)

____________________________________

USSM - U.S. Simple Meals

GBS - Global Baking and Snacking

ISMB - International Simple Meals and Beverages

USB - U.S. Beverages

BFS - Bolthouse and Foodservice

Each of the foregoing manufacturing facilities is company-owned, except the Selangor Darul Ehsan, Malaysia, and the East Brunswick, New Jersey, facilities are leased. The company also maintains executive offices in Norwalk, Connecticut; Bakersfield, California; Emeryville, California; Toronto, Canada; Nørre Snede, Denmark; and North Strathfield, Australia.

On October 28, 2013, the company completed the sale of its European simple meals business. The transaction included the sale of the facilities and executive offices in Puurs, Belgium; Le Pontet, France; Lubeck, Germany; and Kristianstadt, Sweden. The former Aiken, South Carolina, facility was closed in 2014. Manufacturing at the Villagran, Mexico, facility ceased in 2014.

In 2014, the company and its joint venture partner Swire Pacific Limited agreed to restructure manufacturing and streamline operations for the joint venture's soup and broth business in China. As a result of this restructuring, soup production by the joint venture at the Xiamen, China, facility ceased.

Management believes that the company's manufacturing and processing plants are well maintained and are generally adequate to support the current operations of the businesses.

Item 3. Legal Proceedings

None.

Item 4. Mine Safety Disclosures

Not applicable.

Executive Officers of the Company

The following list of executive officers as of September 15, 2014, is included as an item in Part III of this Form 10-K:



Name	Present Title	Age	Year First Appointed Executive Officer
Mark R. Alexander	Senior Vice President	50	2009
Carlos J. Barroso	Senior Vice President	55	2013
David B. Biegger	Senior Vice President	55	2014
Irene Chang Britt	Senior Vice President	51	2010
Anthony P. DiSilvestro	Senior Vice President - Chief Financial Officer	55	2004
Ellen Oran Kaden	Senior Vice President - Chief Legal and Public Affairs Officer	62	1998
Luca Mignini	Senior Vice President	52	2013
Denise M. Morrison	President and Chief Executive Officer	60	2003
Robert W. Morrissey	Senior Vice President and Chief Human Resources Officer	56	2012
Michael P. Senackerib	Senior Vice President - Chief Marketing Officer	49	2012

Carlos J. Barroso served as President and Founder of CJB and Associates, LLC, an R&D consulting firm (2009 - 2013), and Senior Vice President of R&D, Pepsico Global Foods (2008 - 2009), of PepsiCo, Inc. prior to joining the company in 2013. Luca Mignini served as Chief Executive Officer of the Findus Italy division of IGLO Group (2010 - 2012) and Senior Vice President, Europe, Japan and Australia and New Zealand (2007 - 2010), of SC Johnson & Son, Inc. prior to joining the company in 2013. Michael P. Senackerib served as Senior Vice President and Chief Marking Officer of Hertz Global Holdings, Inc. and The Hertz Corporation (2008 - 2011) prior to joining the company in 2012. The company has employed Mark R. Alexander, David B. Biegger, Irene Chang Britt, Anthony P. DiSilvestro, Ellen Oran Kaden, Denise M. Morrison and Robert W. Morrissey in an executive or managerial capacity for at least five years.

There is no family relationship among any of the company’s executive officers or between any such officer and any director that is first cousin or closer. All of the executive officers were elected at the November 2013 meeting of the Board of Directors, except David B. Biegger was appointed an executive officer at the March 2014 meeting with the appointment effective as of April 1, 2014. Anthony P. DiSilvestro's appointment as Senior Vice President - Chief Financial Officer was effective as of May 1, 2014.

PART II


Item 5.	Market for Registrant’s Capital Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities

Market for Registrant’s Capital Stock

The company’s capital stock is listed and principally traded on the New York Stock Exchange. On September 15, 2014, there were 22,147 holders of record of the company’s capital stock. Market price and dividend information with respect to the company’s capital stock are set forth in Note 21 to the Consolidated Financial Statements. Future dividends will be dependent upon future earnings, financial requirements and other factors.

Return to Shareholders^* Performance Graph

The following graph compares the cumulative total shareholder return (TSR) on the company’s stock with the cumulative total return of the Standard & Poor’s 500 Stock Index (the S&P 500) and the Standard & Poor’s Packaged Foods Index (the S&P Packaged Foods Group). The graph assumes that $100 was invested on July 31, 2009, in each of company stock, the S&P 500 and the S&P Packaged Foods Group, and that all dividends were reinvested. The total cumulative dollar returns shown on the graph represent the value that such investments would have had on August 1, 2014.

^*Stock appreciation plus dividend reinvestment.



	2009	2010	2011	2012	2013	2014
Campbell	100	119	114	118	173	159
S&P 500	100	114	136	149	186	217
S&P Packaged Foods Group	100	117	140	152	207	219

Issuer Purchases of Equity Securities



Period	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽¹⁾	Approximate Dollar Value of Shares that may yet be Purchased Under the Plans or Programs ($ in Millions) ⁽¹⁾
4/28/14 - 5/31/14	—	—	—	$750
6/1/14 - 6/30/14	—	—	—	$750
7/1/14 - 8/3/14	—	—	—	$750
Total	—	—	—	$750

____________________________________

⁽¹⁾

During the fourth quarter of 2014, the company had a publicly announced strategic share repurchase program. Under this program, which was announced on June 23, 2011, the company's Board of Directors authorized the purchase of up to $1 billion of company stock. The program has no expiration date. Purchases under the program were suspended from July 2012 through 2014. The company expects to resume purchases under the program in 2015. The company also expects to continue its longstanding practice, under separate authorization, of purchasing shares sufficient to offset shares issued under incentive compensation plans.

Item 6. Selected Financial Data

FIVE-YEAR REVIEW — CONSOLIDATED



Fiscal Year	2014⁽¹⁾		2013⁽²⁾			2012⁽³⁾		2011⁽⁴⁾		2010⁽⁵⁾
(Millions, except per share amounts)
Summary of Operations
Net sales	$	8,268	$	8,052		$	7,175	$	7,143	$	7,085
Earnings before interest and taxes	1,192		1,080			1,155		1,212		1,272
Earnings before taxes	1,073		955			1,049		1,100		1,166
Earnings from continuing operations	726		680			724		749		791
Earnings (loss) from discontinued operations	81		(231		)	40		53		53
Net earnings	807		449			764		802		844
Net earnings attributable to Campbell Soup Company	818		458			774		805		844
Financial Position
Plant assets - net	$	2,318	$	2,260		$	2,127	$	2,103	$	2,051
Total assets	8,113		8,323			6,530		6,862		6,276
Total debt	4,015		4,453			2,790		3,084		2,780
Total equity	1,603		1,210			898		1,096		929
Per Share Data
Earnings from continuing operations attributable to Campbell Soup Company - basic	$	2.35	$	2.19		$	2.30	$	2.28	$	2.29
Earnings from continuing operations attributable to Campbell Soup Company - assuming dilution	2.33		2.17			2.29		2.26		2.27
Net earnings attributable to Campbell Soup Company - basic	2.61		1.46			2.43		2.44		2.44
Net earnings attributable to Campbell Soup Company - assuming dilution	2.59		1.44			2.41		2.42		2.42
Dividends declared	1.248		1.16			1.16		1.145		1.075
Other Statistics
Capital expenditures	$	347	$	336		$	323	$	272	$	315
Weighted average shares outstanding - basic	314		314			317		326		340
Weighted average shares outstanding - assuming dilution	316		317			319		329		343

____________________________________

(All per share amounts below are on a diluted basis)

The 2014 fiscal year consisted of 53 weeks. All other periods had 52 weeks.

⁽¹⁾

The 2014 earnings from continuing operations attributable to Campbell Soup Company were impacted by the following: a restructuring charge and related costs of $36 million ($.11 per share) associated with restructuring initiatives in 2014 and 2013; pension settlement charges of $14 million ($.04 per share) associated with a U.S. pension plan; a loss of $6 million ($.02 per share) on foreign exchange forward contracts used to hedge the proceeds from the sale of the European simple meals business; and $7 million ($.02 per share) tax expense associated with the sale of the European simple meals business. Earnings from discontinued operations included a gain of $72 million ($.23 per share) on the sale of the European simple meals business.

⁽²⁾

The 2013 earnings from continuing operations attributable to Campbell Soup Company were impacted by the following: a restructuring charge and related costs of $90 million ($.28 per share) associated with restructuring initiatives in 2013 and $7 million ($.02 per share) of transaction costs related to the acquisition of Bolthouse Farms. Earnings from discontinued operations were impacted by an impairment charge on the intangible assets of the simple meals business in Europe of $263 million ($.83 per share) and tax expense of $18 million ($.06 per share) representing taxes on the difference between the book value and tax basis of the business.

⁽³⁾

The 2012 earnings from continuing operations attributable to Campbell Soup Company were impacted by the following: a restructuring charge of $4 million ($.01 per share) associated with the 2011 initiatives and $3 million ($.01 per share) of transaction costs related to the acquisition of Bolthouse Farms. Earnings from discontinued operations included a restructuring charge of $2 million ($.01 per share) associated with the 2011 initiatives.


⁽⁴⁾	The 2011 earnings from continuing operations attributable to Campbell Soup Company were impacted by a restructuring charge of $39 million ($.12 per share) associated with initiatives announced in June 2011. Earnings from discontinued operations included a restructuring charge of $2 million associated with the initiatives.


⁽⁵⁾	The 2010 earnings from continuing operations attributable to Campbell Soup Company were impacted by the following: a restructuring charge of $8 million ($.02 per share) for pension benefit costs associated with the 2008 initiatives and $10 million ($.03 per share) to reduce deferred tax assets as a result of the U.S. health care legislation enacted in March 2010.

Five-Year Review should be read in conjunction with the Notes to Consolidated Financial Statements.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

Description of the Company

Campbell Soup Company is a manufacturer and marketer of high-quality, branded convenience food products. The company reports the results of operations in the following reportable segments: U.S. Simple Meals; Global Baking and Snacking; International Simple Meals and Beverages; U.S. Beverages; and Bolthouse and Foodservice.

On August 6, 2012, the company completed the acquisition of Bolthouse Farms from a fund managed by Madison Dearborn Partners, LLC, a private equity firm. After taking into account customary purchase price adjustments, the final all-cash purchase price was $1.561 billion. See Note 3 to the Consolidated Financial Statements for more information on the acquisition.

On June 13, 2013, the company completed the acquisition of Plum. The final all-cash purchase price was $249 million. See Note 3 to the Consolidated Financial Statements for more information on the acquisition.

On August 8, 2013, the company completed the acquisition of Kelsen. The final all-cash purchase price was $331 million. See Note 3 to the Consolidated Financial Statements for more information on the acquisition.

On October 28, 2013, the company completed the sale of its European simple meals business to Soppa Investments S.à r.l., an affiliate of CVC Capital Partners. The all-cash preliminary sale price was €400 million, or $548 million, and was subject to certain post-closing adjustments, which resulted in a $14 million reduction of proceeds. The company has reflected the results of the European simple meals business as discontinued operations in the Consolidated Statements of Earnings for all years presented. See Note 4 to the Consolidated Financial Statements for additional information.

Key Strategies

Campbell's long-term goal is to build shareholder value by driving sustainable, profitable net sales growth. In its efforts to achieve this goal, the company is guided by its purpose - "Real Food That Matters For Life's Moments" - which it articulated in 2014 as an expression of its core beliefs and the foundation of its historic connection with consumers. With this purpose as its compass, the company is pursuing a strategy that is focused on strengthening its established simple meals, snacks and healthy beverages businesses while diversifying its portfolio into higher-growth spaces.

Campbell plans to take a number of steps in 2015 to strengthen its established businesses. In its North American soup and simple meals business, the company expects to improve performance by enhancing product quality and elevating its marketing and brand-building efforts. The company will also introduce new soup and simple meal products responsive to consumers’ desire for indulgent or premium foods; their increasing appetite for ethnic and regional cuisines; and their growing interest in quick and easy home-cooking solutions. For its shelf-stable beverage business, the company will target health-conscious adults with its V8 branded beverages and households with children with its V8 Splash branded beverages. Pepperidge Farm will remain focused on building the Goldfish cracker brand, maintaining the momentum of its fresh bakery portfolio, and revitalizing its adult savory crackers business. The company will also continue its efforts to reinvigorate its businesses in Australia, focusing on Arnott's biscuits.

Since 2013, Campbell has acquired three businesses - Bolthouse Farms, Plum and Kelsen - and divested its European simple meals business as part of its effort to diversify its portfolio into higher-growth spaces. This effort will continue in 2015, with a focus on four key growth platforms:


•	Accelerating breakthrough innovation, including through continued expansion of the company's dinner sauces platform and the introduction of V8 Protein shakes and bars.


•	Becoming a branded leader in packaged fresh foods. For example, in 2015 Bolthouse Farms will introduce its first kid-focused line of refrigerated snacks and beverages, building on its existing businesses in fresh carrots, super-premium beverages and salad dressings.


•	Expanding in developing markets in Asia and Latin America, where the company already has footholds in China, Indonesia, Malaysia and Mexico.


•	Increasing the availability of the company's products. Across its portfolio, Campbell plans to increase the availability of many of its products by focusing on higher growth alternative retail grocery channels, such as the convenience, club and e-commerce channels.

Executive Summary

This Executive Summary provides significant highlights from the discussion and analysis that follows.


•	There were 53 weeks in 2014. There were 52 weeks in 2013 and 2012.


•	Net sales increased 3% in 2014 to $8.268 billion. The Kelsen and Plum acquisitions contributed 3 points of growth and the 53^rd week contributed 2 points of growth.


•	Gross profit, as a percent of sales, decreased to 35.1% from 36.2% a year ago. The decrease was primarily due to cost inflation and increased supply chain costs, higher promotional spending and the impact of acquisitions, partly offset by productivity improvements and a reduction in restructuring-related costs.


•	Administrative expenses decreased 15% to $573 million from $677 million a year ago. The decline was primarily due to lower incentive compensation costs, cost savings from restructuring initiatives and lower pension expenses, partially offset by the impact of acquisitions.


•	Earnings per share from continuing operations were $2.33 in 2014, compared to $2.17 a year ago. The current and prior year included expenses of $.20 and $.31 per share, respectively, from items impacting comparability as discussed below.

Earnings from continuing operations attributable to Campbell Soup Company - 2014 Compared with 2013

The following items impacted the comparability of earnings and earnings per share:


•	In 2014, the company recognized pre-tax pension settlement charges in Cost of products sold of $22 million ($14 million after tax or $.04 per share) associated with a U.S. pension plan. The settlements resulted from the level of lump sum distributions from the plan's assets in 2014, primarily due to the closure of the facility in Sacramento, California;

•

On October 28, 2013, the company completed the sale of its simple meals business in Europe. In 2014, the company recorded a loss of $9 million ($6 million after tax or $.02 per share) on foreign exchange forward contracts used to hedge the proceeds from the sale of the European simple meals business. The loss was included in Other expenses. In addition, the company recorded tax expense of $7 million ($.02 per share) associated with the sale of the business;

•

In 2014, the company recorded a pre-tax restructuring charge of $54 million ($33 million after tax or $.10 per share) associated with initiatives to streamline its salaried workforce in North America and its workforce in the Asia Pacific region; restructure manufacturing and streamline operations for its soup and broth business in China; improve supply chain efficiency in Australia; and reduce overhead across the organization. See Note 8 to the Consolidated Financial Statements and "Restructuring Charges" for additional information;

•

In 2013, the company implemented several initiatives to improve its U.S. supply chain cost structure and increase asset utilization across its U.S. thermal plant network; expand access to manufacturing and distribution capabilities in Mexico; improve its Pepperidge Farm bakery supply chain cost structure; and reduce overhead in North America. In 2014, the company recorded a pre-tax restructuring charge of $1 million and restructuring-related costs of $3 million in Cost of products sold (aggregate impact of $3 million after tax or $.01 per share) related to the 2013 initiatives. In 2013, the company recorded a pre-tax restructuring charge of $51 million and restructuring-related costs of $91 million in Cost of products sold (aggregate impact of $90 million after tax or $.28 per share) related to the 2013 initiatives. See Note 8 to the Consolidated Financial Statements and "Restructuring Charges" for additional information; and


•	In 2013, the company incurred pre-tax transaction costs of $10 million ($7 million after tax or $.02 per share) associated with the acquisition of Bolthouse Farms, which closed on August 6, 2012. The costs were included in Other expenses.

The items impacting comparability are summarized below:



	2014						2013
(Millions, except per share amounts)	Earnings Impact			EPS Impact			Earnings Impact			EPS Impact
Earnings from continuing operations attributable to Campbell Soup Company	$	737		$	2.33		$	689		$	2.17

Restructuring charges and related costs	$	(36	)	$	(.11	)	$	(90	)	$	(.28	)
Pension settlement charges	(14		)	(.04		)	—			—
Loss on foreign exchange forward contracts	(6		)	(.02		)	—			—
Tax expense associated with sale of business	(7		)	(.02		)	—			—
Acquisition transaction costs	—			—			(7		)	(.02		)
Impact of items on earnings from continuing operations⁽¹⁾	$	(63	)	$	(.20	)	$	(97	)	$	(.31	)

____________________________________


⁽¹⁾	The sum of the individual per share amounts may not add due to rounding.

Earnings from continuing operations were $737 million ($2.33 per share) in 2014, compared to $689 million ($2.17 per share) in 2013. After adjusting for items impacting comparability, earnings increased primarily due to lower administrative expenses, the benefit of the additional week and lower marketing expenses, partly offset by a lower gross margin percentage, lower sales (excluding the impact of acquisitions and the 53^rd week), and a higher effective tax rate. The additional week contributed approximately $.08 per share to earnings from continuing operations in 2014.

The company sold its European simple meals business on October 28, 2013. See "Discontinued Operations" for additional information.

Net earnings attributable to Campbell Soup Company - 2013 Compared with 2012

In addition to the 2013 items that impacted comparability of Earnings from continuing operations previously disclosed, the following items impacted the comparability of net earnings and net earnings per share:

Continuing Operations


•	In 2012, the company incurred pre-tax transaction costs of $5 million ($3 million after tax or $.01 per share) associated with the acquisition of Bolthouse Farms; and

•

In 2011, the company announced a series of initiatives to improve supply chain efficiency and reduce overhead costs across the organization to help fund plans to drive growth of the business. The company also announced its exit from the Russian market. In 2012, the company recorded a pre-tax restructuring charge of $7 million ($4 million after tax or $.01 per share) related to the initiatives. See Note 8 to the Consolidated Financial Statements and "Restructuring Charges" for additional information.

Discontinued Operations

•

In the fourth quarter of 2013, the company recorded an impairment charge on the intangible assets of the simple meals business in Europe of $396 million ($263 million after tax or $.83 per share). In addition, the company recorded $18 million in tax expense ($.06 per share) representing taxes on the difference between the book value and tax basis of the business. See Note 4 to the Consolidated Financial Statements for additional information; and


•	In 2012, the company recorded restructuring charges of $3 million ($2 million after tax or $.01 per share) associated with reducing overhead.

The items impacting comparability are summarized below:



	2013						2012
(Millions, except per share amounts)	Earnings Impact			EPS Impact			Earnings Impact			EPS Impact
Earnings from continuing operations attributable to Campbell Soup Company	$	689		$	2.17		$	734		$	2.29
Earnings (loss) from discontinued operations	$	(231	)	$	(.73	)	$	40		$	0.12
Net earnings attributable to Campbell Soup Company	$	458		$	1.44		$	774		$	2.41

Continuing operations:
Restructuring charges and related costs	$	(90	)	$	(.28	)	$	(4	)	$	(.01	)
Acquisition transaction costs	(7		)	(.02		)	(3		)	(.01		)
Impact of items on earnings from continuing operations⁽¹⁾	$	(97	)	$	(.31	)	$	(7	)	$	(.02	)

Discontinued operations:
Restructuring charges and related costs	$	—		$	—		$	(2	)	$	(.01	)
Impairment charge	(263		)	(.83		)	—			—
Tax expense on book and tax differences	(18		)	(.06		)	—			—
Impact of items on earnings (loss) from discontinued operations	$	(281	)	$	(.89	)	$	(2	)	$	(.01	)

_______________________________________


⁽¹⁾	The sum of the individual per share amounts may not add due to rounding.

Earnings from continuing operations were $689 million ($2.17 per share) in 2013, compared to $734 million ($2.29 per share) in 2012. After adjusting for items impacting comparability, earnings increased in 2013 from 2012. The increase was primarily due to sales growth, lower marketing expenses, the impact of the acquisition of Bolthouse Farms and a lower effective tax rate, partially offset by higher administrative expenses and higher selling expenses. Earnings per share benefited from a reduction in the weighted average diluted shares outstanding, reflecting the impact of the company’s strategic share repurchase program in 2012.

See "Discontinued Operations" for additional information.

Net earnings (loss) attributable to noncontrolling interests

The company owns a 60% controlling interest in a joint venture formed with Swire Pacific Limited to support the development of the company’s soup and broth business in China. The joint venture began operations on January 31, 2011. The noncontrolling interest’s share in the net loss was included in Net earnings (loss) attributable to noncontrolling interests in the Consolidated Statements of Earnings. In 2014, the company and its joint venture partner agreed to restructure manufacturing and streamline operations for its soup and broth business in China. The after-tax restructuring charge attributable to the noncontrolling interest was $5 million.

The company also owns a 70% controlling interest in a Malaysian food products manufacturing company. The noncontrolling interest’s share in the net earnings was included in Net earnings (loss) attributable to noncontrolling interests in the Consolidated Statements of Earnings and was not material in 2014, 2013, or 2012.

DISCUSSION AND ANALYSIS

Sales

An analysis of net sales by reportable segment follows:



							% Change
(Millions)	2014		2013		2012		2014/2013	2013/2012
U.S. Simple Meals	$	2,944	$	2,849	$	2,726	3%	5%
Global Baking and Snacking	2,440		2,273		2,193		7	4
International Simple Meals and Beverages	780		869		872		(10)	—
U.S. Beverages	723		742		774		(3)	(4)
Bolthouse and Foodservice	1,381		1,319		610		5	116
	$	8,268	$	8,052	$	7,175	3%	12%

An analysis of percent change of net sales by reportable segment follows:



2014 versus 2013	U.S. Simple Meals	Global Baking and Snacking	International Simple Meals and Beverages	U.S. Beverages ⁽³⁾	Bolthouse and Foodservice	Total
Volume and Mix	—%	1%	(2)%	(5)%	3%	—%
Price and Sales Allowances	2	2	(1)	—	—	1
Decreased/(Increased) Promotional Spending⁽¹⁾	(2)	(3)	—	1	(1)	(2)
Currency	—	(3)	(6)	—	—	(1)
Net Accounting⁽²⁾	—	—	(3)	—	—	—
Acquisitions	2	8	—	—	1	3
Estimated Impact of 53^rd week	1	2	2	2	2	2
	3%	7%	(10)%	(3)%	5%	3%



2013 versus 2012	U.S. Simple Meals	Global Baking and Snacking	International Simple Meals and Beverages	U.S. Beverages	Bolthouse and Foodservice	Total ⁽³⁾
Volume and Mix	3%	4%	—%	(3)%	(6)%	1%
Price and Sales Allowances	2	2	2	—	—	2
Increased Promotional Spending⁽¹⁾	(1)	(2)	(2)	(1)	(2)	(1)
Acquisitions	1	—	—	—	124	11
	5%	4%	—%	(4)%	116%	12%

__________________________________________


⁽¹⁾	Represents revenue reductions from trade promotion and consumer coupon redemption programs.


⁽²⁾	In 2014, revenue in Mexico is presented on a net accounting basis in connection with a new business model under which the cost of certain services provided by the company's suppliers is netted against revenue.


⁽³⁾	Sum of the individual amounts does not add due to rounding.

In 2014, U.S. Simple Meals sales increased 3%. U.S. soup sales decreased 1%. Excluding the benefit of the 53^rd week, U.S. soup sales decreased 2%. Further details of U.S. soup, excluding the benefit of the 53^rd week, include:


•	Sales of Campbell’s condensed soups decreased 3%, with declines in eating varieties partially offset by gains in cooking varieties. Lower volumes and increased promotional spending were partly offset by higher selling prices.


•	Sales of ready-to-serve soups decreased 6%, primarily due to declines in canned and microwavable soup varieties.


•	Broth sales increased 8%, primarily due to more effective marketing programs, innovation and distribution gains.

Sales of other simple meals increased 15%, primarily due to the acquisition of Plum in June 2013, which contributed 9 points of growth. Excluding the impact of the acquisition and the benefit of the 53^rd week, sales increased due to gains in Prego pasta sauces, which benefited from the launch of Alfredo sauces; and Campbell's dinner sauces, which benefited from the introduction in 2014 of Campbell's Slow Cooker Sauces; partially offset by declines in Campbell's canned gravy products.

In 2013, U.S. Simple Meals sales increased 5%, reflecting increases in U.S. soup and and other simple meals. U.S. soup sales increased 5%, benefiting from improved execution and the favorable impact of weather. Further details of U.S. soup include:


•	Sales of Campbell’s condensed soups increased 2%, with gains in both cooking and eating varieties.


•	Sales of ready-to-serve soups increased 9%, due to volume-driven gains in Campbell's Chunky canned soups, which benefited from new varieties, increased promotional spending and a return to NFL-themed advertising.


•	Broth sales increased 4%, primarily driven by double-digit gains in aseptically packaged broth, partially offset by lower sales of canned products and lower sales of Swanson Flavor Boost concentrated broth, which was introduced in 2012.

Sales of other simple meals increased 5% primarily due to the acquisition of Plum in June 2013, growth in Prego pasta sauces, the 2013 launch of Campbell's Skillet Sauces, and growth in Pace Mexican sauces, partially offset by lower sales in other simple meals products.

In 2014, Global Baking and Snacking sales increased 7%. The acquisition of Kelsen contributed $193 million to sales, or 8 points of growth. Excluding the impact of the acquisition and the benefit of the 53^rd week, sales decreased primarily due to the

impact of currency. Excluding the benefit of the 53^rd week, Pepperidge Farm sales increased slightly with growth in fresh bakery and Goldfish crackers, partially offset by declines in adult cracker varieties and frozen products. In fresh bakery, sales increased due to gains in sandwich bread and rolls. In Arnott's, sales decreased primarily due to the impact of currency and sales declines in Australia in savory and chocolate varieties, partially offset by strong gains in Indonesia and the benefit of the 53^rd week. The company increased trade spending in Arnott's and Pepperidge Farm to remain competitive.

In 2013, Global Baking and Snacking sales increased 4% with gains in both Pepperidge Farm and Arnott's. Pepperidge Farm sales increased primarily due to growth in fresh bakery products, Goldfish crackers and cookies. Sales of fresh bakery products benefited from improved marketplace performance and increased shelf space at retail outlets resulting from the bankruptcy of a competitor. Arnott’s sales increased primarily due to gains in Indonesia, partially offset by the impact of currency. Promotional spending was increased by Pepperidge Farm for competitive reasons and to capitalize on the opportunity to increase shelf space in the U.S. bread category and in Arnott's to remain competitive in the Australian marketplace.

In 2014, International Simple Meals and Beverages sales decreased 10%. In Canada, sales decreased due to the impact of currency and declines in beverages, partly offset by gains in snacks. In Latin America, sales declined due to the impact of presenting revenue on a net basis and lower selling prices in Mexico. In the Asia Pacific region, sales decreased primarily due to the impact of currency and declines in Australia, primarily in soup, partially offset by gains in Malaysia.

In 2013, International Simple Meals and Beverages sales were comparable to 2012. Sales declines in the Asia Pacific region, primarily due to currency and declines in exports, were partially offset by gains in China, Canada and Latin America. Promotional spending was increased, primarily to support the soup business in Canada, in response to more intense price competition in the marketplace.

In 2014, U.S. Beverages sales decreased 3%, primarily from declines in V8 V-Fusion multi-serve beverages and softness in single-serve beverages, due in part to the transition in 2014 to a new distribution network for the immediate consumption channel. U.S. Beverages continues to be under pressure from category weakness in shelf-stable juices, as well as from competition from specialty beverages and packaged fresh juices.

In 2013, U.S. Beverages sales decreased 4% due to declines in sales of V8 vegetable juice and V8 V-Fusion beverages, partially offset by an increase in V8 Splash beverages. Promotional spending was increased, primarily on V8 Splash beverages, in response to more price-based competition in the value segment.

In 2014, Bolthouse and Foodservice sales increased 5%. The increase was due in part to the benefit of the 53^rd week and the additional week of Bolthouse sales in 2014 as the business was acquired one week into 2013. Excluding the additional week of Bolthouse in 2014 and the benefit of the 53^rd week, segment sales increased as gains in Bolthouse beverages and salad dressings were partially offset by declines in North America Foodservice. The North America Foodservice decline was due to volume declines in fresh soup sold at retail perimeter and the impact of currency.

In 2013, Bolthouse and Foodservice sales increased due to the acquisition of Bolthouse Farms in 2013, which contributed $756 million to sales. North America Foodservice sales declined 8% primarily due to declines in frozen soup products, reflecting the loss of a major restaurant customer, and higher levels of trade spending to remain competitive.

Gross Profit

Gross profit, defined as Net sales less Cost of products sold, decreased by $14 million in 2014 from 2013 and increased by $102 million in 2013 from 2012. As a percent of sales, gross profit was 35.1% in 2014, 36.2% in 2013 and 39.2% in 2012.

The 1.1 and 3.0 percentage-point decreases in gross margin percentage in 2014 and 2013, respectively, were due to the following factors:



	2014	2013
Cost inflation, supply chain costs and other factors	(2.5)%	(1.9)%
Higher level of promotional spending	(1.1)	(0.7)
Impact of acquisitions (including Plum recall in 2014)	(0.6)	(1.7)
Mix	(0.4)	—
Pension settlement charges⁽¹⁾	(0.3)	—
Productivity improvements	2.0	1.6
Reduction (increase) in restructuring-related costs	1.1	(1.1)
Higher selling prices	0.7	0.8
	(1.1)%	(3.0)%

__________________________________________


⁽¹⁾	See Note 11 to the Consolidated Financial Statements for additional information on the pension settlement charges.

Marketing and Selling Expenses

Marketing and selling expenses as a percent of sales were 11.3% in 2014, 11.8% in 2013 and 13.1% in 2012. Marketing and selling expenses decreased 1% in 2014 from 2013. The decrease was primarily due to lower advertising and consumer promotion expenses (approximately 2 percentage points); the impact of currency (approximately 1 percentage point); lower marketing overhead expenses (approximately 1 percentage point); and lower selling expenses (approximately 1 percentage point), partially offset by the impact of acquisitions (approximately 4 percentage points). Marketing and selling expenses increased 1% in 2013 from 2012. The increase was primarily due to the impact of the Bolthouse Farms acquisition (approximately 3 percentage points); higher selling expenses (approximately 2 percentage points); and higher marketing expenses to support innovation efforts (approximately 2 percentage points), partially offset by lower advertising and consumer promotion expenses, primarily in the U.S. Soup business (approximately 6 percentage points).

Administrative Expenses

Administrative expenses as a percent of sales were 6.9% in 2014, 8.4% in 2013 and 8.1% in 2012. Administrative expenses decreased by 15% in 2014 from 2013. The decrease was primarily due to lower incentive compensation costs (approximately 13 percentage points); cost savings from restructuring initiatives (approximately 3 percentage points); and lower pension and other benefit expenses (approximately 2 percentage points), partially offset by the impact of acquisitions (approximately 3 percentage points). Administrative expenses increased by 17% in 2013 from 2012, primarily due to the impact of the Bolthouse Farms acquisition (approximately 10 percentage points) and higher incentive compensation costs (approximately 7 percentage points).

Research and Development Expenses

Research and development expenses decreased $7 million, or 5%, in 2014 from 2013. The decrease was primarily due to lower incentive compensation costs (approximately 4 percentage points) and cost savings from restructuring initiatives (approximately 3 percentage points), partially offset by the impact of acquisitions (approximately 3 percentage points). Research and development expenses increased $12 million, or 10%, in 2013 from 2012. The increase was primarily due to higher incentive compensation and benefit costs (approximately 7 percentage points); the impact of the Bolthouse Farms acquisition (approximately 2 percentage points); and higher costs associated with product innovation in North America (approximately 1 percentage point).

Other Expenses/(Income)

Other expenses in 2014 included a loss of $9 million on foreign exchange forward contracts used to hedge the proceeds from the sale of the European simple meals business and $18 million of amortization of intangible assets associated with the acquisition of Bolthouse Farms, Kelsen and Plum businesses. Other expenses in 2013 included $10 million of transaction costs and $14 million of amortization of intangible assets associated with the acquisition of Bolthouse Farms. Other expenses in 2012 included $5 million of transaction costs associated with the acquisition of Bolthouse Farms.

Operating Earnings

Segment operating earnings were comparable in 2014 and 2013. Segment operating earnings increased 7% in 2013 from 2012.

An analysis of operating earnings by segment follows:



										% Change
(Millions)	2014			2013			2012			2014/2013	2013/2012
U.S. Simple Meals	$	714		$	731		$	658		(2)%	11	%
Global Baking and Snacking	332			316			315			5	—
International Simple Meals and Beverages	106			108			106			(2)	2
U.S. Beverages	127			120			134			6	(10	)
Bolthouse and Foodservice	117			116			85			1	36
	1,396			1,391			1,298			—%	7	%
Unallocated corporate expenses	(149		)	(260		)	(136		)
Restructuring charges⁽¹⁾	(55		)	(51		)	(7		)
Earnings before interest and taxes	$	1,192		$	1,080		$	1,155

__________________________________________


⁽¹⁾	See Note 8 to the Consolidated Financial Statements for additional information on restructuring charges.

Earnings from U.S. Simple Meals decreased 2% in 2014 versus 2013. The decrease was primarily due to a lower gross margin percentage and expenses related to the Plum product recall in November 2013, partly offset by lower administrative expenses, lower marketing expenses and the benefit of the additional week.

Earnings from U.S. Simple Meals increased 11% in 2013 versus 2012. The improvement in operating earnings was primarily due to higher selling prices and productivity savings, partially offset by cost inflation.

Earnings from Global Baking and Snacking increased 5% in 2014 versus 2013. Operating earnings increased primarily due to lower administrative expenses, the Kelsen acquisition, lower marketing expenses and the benefit of the additional week, partially offset by a lower gross margin percentage and the impact of currency. The operating earnings increase reflected growth in Pepperidge Farm and the addition of Kelsen's operating results, partly offset by lower earnings in Arnott’s.

Earnings from Global Baking and Snacking increased $1 million in 2013, reflecting growth in Pepperidge Farm mostly offset by lower earnings in Arnott's.

Earnings from International Simple Meals and Beverages decreased 2% in 2014 versus 2013. The decrease in operating earnings was primarily due to lower sales volume and the impact of currency, partly offset by lower administrative expenses, a higher gross margin percentage and lower selling expenses.

Earnings from International Simple Meals and Beverages increased 2% in 2013 versus 2012. The increase was primarily due to lower losses in China, reflecting lower marketing expenses, partially offset by a lower gross margin percentage.

Earnings from U.S. Beverages increased 6% in 2014 versus 2013, primarily due to lower administrative and marketing expenses, partly offset by a lower gross margin percentage and sales volume declines.

Earnings from U.S. Beverages decreased 10% in 2013 versus 2012, primarily due to lower sales and a lower gross margin percentage, partially offset by reduced advertising expenses.

Earnings from Bolthouse and Foodservice increased 1% in 2014 versus 2013. The increase was primarily due to lower administrative expenses, the increase in sales and the benefit of the 53^rd week, partly offset by a lower gross margin percentage and increased marketing investment for Bolthouse Farms.

Earnings from Bolthouse and Foodservice increased $31 million in 2013 from 2012 due to the acquisition of Bolthouse Farms, which contributed $63 million, partially offset by lower earnings in North America Foodservice resulting from the decline in sales.

Unallocated corporate expenses in 2014 included pension settlement charges of $22 million associated with a U.S. pension plan. The settlement resulted from the level of lump sum distributions from the plan's assets in 2014, primarily due to the closure of the facility in Sacramento, California. The current year also included a $9 million loss on foreign exchange forward contracts related to the sale of the European simple meals business and $3 million of restructuring-related costs. Unallocated corporate expenses in 2013 included $91 million of restructuring-related costs and $10 million of transaction costs associated with the Bolthouse Farms acquisition. The remaining decrease in expenses was primarily due to lower incentive compensation costs and gains on foreign exchange transactions. Unallocated corporate expenses in 2012 included $5 million associated with the acquisition of Bolthouse Farms. The remaining increase in expenses in 2013 from 2012 was primarily due to higher incentive compensation costs.

Interest Expense/Income

Interest expense decreased to $122 million in 2014 from $135 million in 2013, reflecting lower interest rates on the debt portfolio. Interest income decreased to $3 million from $10 million in 2013, primarily due to lower levels of cash and cash equivalents.

Interest expense increased to $135 million in 2013 from $114 million in 2012, reflecting a higher debt level due to the Bolthouse Farms acquisition, partially offset by lower interest rates. Interest income increased to $10 million from $8 million in 2012, primarily due to higher levels of cash and cash equivalents.

Taxes on Earnings

The effective tax rate was 32.3% in 2014, 28.8% in 2013 and 31.0% in 2012. The current year included a tax benefit of $8 million on $22 million of pension settlement charges associated with a U.S. pension plan. The current year also included a tax benefit of $17 million on $58 million of restructuring charges and related costs, tax expense of $7 million associated with the sale of the European simple meals business, and a tax benefit of $3 million on a loss of $9 million on foreign exchange forward contracts used to hedge the proceeds from the sale of the business. The prior year included a tax benefit of $55 million on $152 million of restructuring charges and related costs and acquisition transaction costs. After adjusting for items impacting comparability, the remaining increase in the effective rate in 2014 was primarily due to the prior-year rate benefiting from lower taxes on foreign earnings and the favorable settlement of state tax matters.

The decline in the effective tax rate in 2013 from 2012 was primarily due to lower state taxes, including the favorable resolution of certain matters, and an increase in the U.S. manufacturing deduction.

Restructuring Charges

2014 Initiatives

In 2014, the company implemented the following initiatives to reduce overhead across the organization, restructure manufacturing and streamline operations for its soup and broth business in China and improve supply chain efficiency in Australia. Details of the 2014 initiatives include:


•	The company streamlined its salaried workforce in North America and its workforce in the Asia Pacific region. Approximately 250 positions were eliminated.


•	The company and its joint venture partner Swire Pacific Limited agreed to restructure manufacturing and streamline operations for its soup and broth business in China. As a result, certain assets were impaired, and approximately 100 positions were eliminated.


•	In Australia, the company implemented an initiative to improve supply chain efficiency by relocating production from its biscuit plant in Marleston to Huntingwood. The relocation will occur through the second quarter of 2016 and will result in the elimination of approximately 90 positions.


•	The company implemented an initiative to reduce overhead across the organization by approximately 85 positions. The actions will be completed in 2015.

In 2014, the company recorded a restructuring charge of $54 million ($33 million after tax or $.10 per share in earnings from continuing operations attributable to Campbell Soup Company) related to the 2014 initiatives.

A summary of the pre-tax costs and remaining costs associated with the initiatives is as follows:



(Millions)	Total Program		Recognized as of August 3, 2014			Remaining Costs to be Recognized
Severance pay and benefits	$	42	$	(41	)	$	1
Asset impairment	12		(12		)	—
Other exit costs	2		(1		)	1
Total	$	56	$	(54	)	$	2

Of the aggregate $56 million of pre-tax costs, the company expects approximately $43 million will be cash expenditures. In addition, the company expects to invest approximately $7 million in capital expenditures, primarily to relocate biscuit production and packaging capabilities. The remaining aspects of the 2014 initiatives are expected to be completed through 2016. The remaining cash outflows related to these restructuring initiatives are not expected to have a material adverse impact on the company’s liquidity.

The initiatives are expected to generate pre-tax savings of approximately $56 million in 2015, and once fully implemented, annual ongoing savings of approximately $65 million beginning in 2016. In 2014, pre-tax savings were $26 million.

The total pre-tax costs of $56 million associated with each segment are expected to be as follows: U.S. Simple Meals - $9 million; Global Baking and Snacking - $24 million; International Simple Meals and Beverages - $18 million; U.S. Beverages - $2 million; Bolthouse and Foodservice - $2 million; and Corporate - $1 million. Segment operating results do not include restructuring charges as segment performance is evaluated excluding such charges.

2013 Initiatives

In 2013, the company implemented the following initiatives to improve supply chain efficiency, expand access to manufacturing and distribution capabilities and reduce costs. Details of the 2013 initiatives include:

•

The company implemented initiatives to improve its U.S. supply chain cost structure and increase asset utilization across its U.S. thermal plant network, including closing its thermal plant in Sacramento, California, which produced soups, sauces and beverages. The closure resulted in the elimination of approximately 700 full-time positions and was completed in phases. Most of the positions were eliminated in 2013 and operations ceased in August 2013. The company shifted the majority of Sacramento's soup, sauce and beverage production to its thermal plants in Maxton, North Carolina; Napoleon, Ohio; and Paris, Texas. The company also closed its spice plant in South Plainfield, New Jersey, which resulted in the elimination of 27 positions. The company consolidated spice production at its Milwaukee, Wisconsin, plant in 2013.

•

In Mexico, the company entered into commercial arrangements with third-party providers to expand access to manufacturing and distribution capabilities. The third-party providers will produce and distribute the company's beverages, soups, broths and sauces throughout the Mexican market. As a result of these agreements, the company closed its plant in Villagrán, Mexico, and eliminated approximately 260 positions in the first quarter of 2014.


•	The company implemented an initiative to improve its Pepperidge Farm bakery supply chain cost structure by closing its plant in Aiken, South Carolina. The plant was closed in May 2014. The company shifted the majority of Aiken's bread production to its bakery plant in Lakeland, Florida. Approximately 110 positions were eliminated as a result of the plant closure.


•	The company streamlined its salaried workforce in U.S. Simple Meals, North America Foodservice and U.S. Beverages by approximately 70 positions. This action was substantially completed in August 2013.

In 2014, the company recorded a restructuring charge of $1 million related to the 2013 initiatives. In addition, approximately $3 million of costs related to the 2013 initiatives were recorded in Cost of products sold, representing other exit costs. The aggregate after-tax impact of restructuring charges and related costs recorded in 2014 was $3 million, or $.01 per share. In 2013, the company recorded a restructuring charge of $51 million. In addition, approximately $91 million of costs related to these initiatives were recorded in 2013 in Cost of products sold, representing accelerated depreciation and other exit costs. The aggregate after-tax impact of restructuring charges and related costs recorded in 2013 was $90 million, or $.28 per share.

A summary of the pre-tax costs and remaining costs associated with the initiatives is as follows:



(Millions)	Total Program		Recognized as of August 3, 2014			Remaining Costs to be Recognized
Severance pay and benefits	$	35	$	(35	)	$	—
Accelerated depreciation/asset impairment	99		(99		)	—
Other exit costs	14		(12		)	2
Total	$	148	$	(146	)	$	2

Of the aggregate $148 million of pre-tax costs, approximately $46 million are cash expenditures. In addition, the company expects to invest approximately $31 million in capital expenditures, primarily to relocate and refurbish a beverage filling and packaging line, and relocate bread production, of which approximately $28 million has been invested as of August 3, 2014. The remaining aspects of the 2013 initiatives are expected to be completed in 2015. The remaining cash outflows related to these restructuring initiatives are not expected to have a material adverse impact on the company’s liquidity.

The initiatives included in this program, once fully implemented, are expected to generate annual ongoing pre-tax savings of approximately $40 million beginning in 2015, with 2014 savings of approximately $30 million.

The total pre-tax costs of $148 million associated with segments are expected to be as follows: U.S. Simple Meals - $90 million; Global Baking and Snacking - $16 million; International Simple Meals and Beverages - $9 million; U.S. Beverages - $31 million; and Bolthouse and Foodservice - $2 million. Segment operating results do not include restructuring charges as segment performance is evaluated excluding such charges.

2011 Initiatives

In the fourth quarter of 2011, the company announced a series of initiatives to improve supply chain efficiency and reduce overhead costs across the organization to help fund plans to drive the growth of the business. The company also announced its exit from the Russian market. Details of the 2011 initiatives include:

•

In Australia, the company is investing in a new system to automate packing operations at its biscuit plant in Virginia. This investment continued through 2014 and resulted in the elimination of approximately 190 positions in 2014. The company expects to continue investing in the new system through 2015. Further, the company improved asset utilization in the U.S. by shifting production of ready-to-serve soups from Paris, Texas, to other facilities in 2012. In addition, the manufacturing facility in Marshall, Michigan, was closed in 2011, and manufacturing of Campbell’s Soup at Hand microwavable products was consolidated at the Maxton, North Carolina, plant in 2012.

•

The company streamlined its salaried workforce by approximately 510 positions around the world, including approximately 130 positions at its world headquarters in Camden, New Jersey. These actions were substantially completed in 2011. As part of this action, the company outsourced a larger portion of its U.S. retail merchandising activities to its retail sales agent, Acosta Sales and Marketing, and eliminated approximately 190 positions.


•	In connection with exiting the Russian market, the company eliminated approximately 50 positions. The exit process commenced in 2011 and was substantially completed in 2012.

In 2012, the company recorded a restructuring charge of $10 million ($6 million after tax or $.02 per share) related to the 2011 initiatives. Of the amount recorded in 2012, $3 million related to discontinued operations. In the fourth quarter of 2011, the company recorded a restructuring charge of $63 million ($41 million after tax or $.12 per share). Of the amount recorded in 2011, $3 million related to discontinued operations. A summary of the pre-tax charges recognized is as follows:



(Millions)	Total Program
Severance pay and benefits	$	41
Asset impairment/accelerated depreciation	23
Other exit costs	9
Total	$	73

As of the second quarter of 2014, the 2011 initiatives were substantially completed. Of the aggregate $73 million of pre-tax costs, approximately $50 million represented cash expenditures, the majority of which was spent in 2012. In addition, the company expects to invest approximately $45 million in capital expenditures in connection with the actions, of which approximately $41 million has been invested as of August 3, 2014. The remaining cash outflows related to these programs are not expected to have a material adverse impact on the company’s liquidity.

The initiatives included in this program are expected to generate annual pre-tax cash savings of approximately $60 million beginning in 2012 and increasing to approximately $70 million in 2014.

The total pre-tax costs of $73 million associated with each segment were as follows: U.S. Simple Meals - $32 million; Global Baking and Snacking - $14 million; International Simple Meals and Beverages - $17 million; U.S. Beverages - $3 million; Bolthouse and Foodservice - $1 million; and Corporate - $6 million. Segment operating results do not include restructuring charges as segment performance is evaluated excluding such charges.

See Note 8 to the Consolidated Financial Statements for additional information.

Discontinued Operations

The company has reflected the results of the European simple meals business as discontinued operations in the Consolidated Statements of Earnings for all years presented. The business was historically included in the International Simple Meals and Beverages segment.

Results of discontinued operations were as follows:



(Millions)	2014			2013			2012
Net sales	$	137		$	532		$	532

Gain on sale of the European simple meals business	$	141		$	—		$	—
Impairment on the European simple meals business	—			(396		)	—
Earnings from operations, before taxes	14			65			57
Earnings (loss) before taxes	$	155		$	(331	)	$	57
Taxes on earnings	(74		)	100			(17		)
Earnings (loss) from discontinued operations	$	81		$	(231	)	$	40

In the fourth quarter of 2013, the company recorded an impairment charge on the intangible assets of this business of $396 million ($263 million after tax or $.83 per share). In addition, the company recorded $18 million in tax expense ($.06 per share) representing taxes on the difference between the book value and tax basis of the business. See also Notes 4 and 6 to the Consolidated Financial Statements for additional information.

In 2013, sales were comparable to 2012 as gains in France, Belgium and the Nordic region were offset by declines in Germany and export sales. Excluding the impairment charge and the tax charge, earnings increased in 2013 due primarily to lower marketing spending and administrative costs.

LIQUIDITY AND CAPITAL RESOURCES

The company expects that foreseeable liquidity and capital resource requirements, including cash outflows to repay debt, pay dividends and repurchase shares, will be met through anticipated cash flows from operations; long-term borrowings under its shelf registration statement; short-term borrowings, including commercial paper; and cash and cash equivalents. The company believes that its sources of financing will be adequate to meet its future liquidity and capital resource requirements.

The company generated cash from operations of $899 million in 2014, compared to $1.019 billion in 2013. The decrease in 2014 was primarily due to lower cash earnings and taxes paid on the divestiture of the European simple meals business, partly offset by lower working capital requirements.

The company generated cash from operations of $1.019 billion in 2013, compared to $1.120 billion in 2012. The decrease in 2013 was primarily due to higher working capital requirements, partly offset by higher cash earnings.

Capital expenditures were $347 million in 2014, $336 million in 2013 and $323 million in 2012. Capital expenditures are expected to total approximately $400 million in 2015. Capital expenditures in 2014 included capacity expansion at Pepperidge Farm (approximately $48 million); the ongoing initiative to simplify the soup-making process in North America (also known as the soup common platform initiative) (approximately $22 million); broth capacity expansion (approximately $15 million); continued enhancement of the company's corporate headquarters (approximately $12 million); a flexible beverage production line for Bolthouse Farms (approximately $11 million); the refurbishment of a beverage filling and packaging line for the U.S. Beverages business (approximately $10 million); the packing automation and capacity expansion projects at one of the company’s Australian biscuit plants (approximately $10 million); and an advanced planning system in North America (approximately $4 million). Capital expenditures in 2013 included the soup capacity expansion project for the North America Foodservice business (approximately $42 million); capacity expansion at Pepperidge Farm (approximately $38 million); the ongoing soup common platform initiative in North America (approximately $20 million); the packing automation and capacity expansion projects at one of the company’s Australian biscuit plants (approximately $19 million); and an advanced planning system in North America (approximately $11 million). Capital expenditures in 2012 included the packing automation and capacity expansion projects at one of the company’s Australian biscuit plants (approximately $32 million), Pepperidge Farm's 34,000-square-foot innovation center (approximately $20 million), capacity expansion at Pepperidge Farm (approximately $18 million), the ongoing soup common platform initiative in North America (approximately $17 million), an advanced planning system in North America (approximately $14 million), and continued enhancement of the company’s corporate headquarters (approximately $11 million).

On August 8, 2013, the company completed the acquisition of Kelsen. The final all-cash purchase price was $331 million and was funded through the issuance of commercial paper.

On June 13, 2013, the company completed the acquisition of Plum. The final all-cash purchase price was $249 million and was funded through the issuance of commercial paper.

Long-term borrowings in 2013 included:


•	$400 million floating rate notes that matured on August 1, 2014. Interest on the notes was based on 3-month U.S. dollar LIBOR plus 0.30%. Interest was payable quarterly and commenced on November 1, 2012;


•	$450 million of 2.50% notes that mature on August 2, 2022. Interest is payable semi-annually and commenced on February 2, 2013. The company may redeem the notes in whole or in part at any time at a redemption price of 100% of the principal amount plus accrued interest or an amount designed to ensure that the note holders are not penalized by the early redemption; and


•	$400 million of 3.80% notes that mature on August 2, 2042. Interest is payable semi-annually and commenced on February 2, 2013. The company may redeem the notes in whole or in part at any time at a redemption price of 100% of the principal amount plus accrued interest or an amount designed to ensure that the note holders are not penalized by the early redemption.

The net proceeds from these issuances were used to fund the acquisition of Bolthouse Farms in 2013 for $1.561 billion. The balance of the purchase price was funded through the issuance of commercial paper.

Dividend payments were $391 million in 2014, $367 million in 2013 and $373 million in 2012. Annual dividends declared were $1.248 per share in 2014 and $1.16 per share in 2013 and 2012. The 2014 fourth quarter rate was $.312 per share.

Excluding shares owned and tendered by employees to satisfy stock option exercises, the company repurchased approximately 2 million shares at a cost of $76 million in 2014, approximately 4 million shares at a cost of $153 million in 2013, and approximately 13 million shares at a cost of $412 million in 2012. In June 2011, the company's Board of Directors authorized the purchase of up to $1 billion of company stock. In 2012, approximately $250 million was used to repurchase shares pursuant to the company's June 2011 publicly announced share repurchase program. Approximately $750 million remained available to repurchase shares under the company's June 2011 repurchase program as of August 3, 2014. The program has no expiration date. Purchases under the program were suspended from July 2012 through 2014. The company expects to resume purchases under the program in 2015.

The company also expects to continue its longstanding practice, under separate authorization, of purchasing shares sufficient to offset shares issued under incentive compensation plans. See “Market for Registrant's Capital Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities” for more information.

At August 3, 2014, the company had $1.771 billion of short-term borrowings due within one year, of which $1.406 billion was comprised of commercial paper borrowings. As of August 3, 2014, $49 million of standby letters of credit were issued on behalf of the company. In December 2013, the company renewed its committed revolving credit facilities, combining two previous facilities totaling $2.0 billion into a new five-year facility totaling $2.2 billion. The new facility matures in December 2018. This facility remained unused at August 3, 2014, except for $3 million of standby letters of credit issued on behalf of the company. This revolving credit facility supports the company’s commercial paper programs and other general corporate purposes. The company may also increase the commitment under the credit facility up to an additional $500 million, upon the agreement of either existing lenders or of additional banks not currently parties to the existing credit agreements.

On October 28, 2013, the company completed the sale of its European simple meals business to Soppa Investments S.à r.l., an affiliate of CVC Capital Partners, for €400 million, or $548 million. The sale price was subject to certain post-closing adjustments, which resulted in a $14 million reduction of proceeds. The company used the proceeds from the sale to pay taxes on the sale, reduce debt and for other general corporate purposes.

In November 2011, the company filed a registration statement with the Securities and Exchange Commission that registered an indeterminate amount of debt securities. Under the registration statement, the company may issue debt securities, depending on market conditions.

The company is in compliance with the covenants contained in its revolving credit facilities and debt securities.

CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS

Contractual Obligations

The following table summarizes the company’s obligations and commitments to make future payments under certain contractual obligations as of August 3, 2014. For additional information on debt, see Note 13 to the Consolidated Financial Statements. Operating leases are primarily entered into for warehouse and office facilities and certain equipment. Purchase commitments represent purchase orders and long-term purchase arrangements related to the procurement of ingredients, supplies, machinery, equipment and services. These commitments are not expected to have a material impact on liquidity. Other long-term liabilities primarily represent payments related to deferred compensation obligations. For additional information on other long-term liabilities, see Note 19 to the Consolidated Financial Statements.



	Contractual Payments Due by Fiscal Year
(Millions)	Total		2015		2016 - 2017		2018 - 2019		Thereafter
Debt obligations⁽¹⁾	$	4,024	$	1,771	$	402	$	301	$	1,550
Interest payments⁽²⁾	850		92		182		152		424
Derivative payments⁽³⁾	22		16		6		—		—
Purchase commitments	1,037		689		173		84		91
Operating leases	194		38		58		40		58
Other long-term payments⁽⁴⁾	166		—		46		41		79
Total long-term cash obligations	$	6,293	$	2,606	$	867	$	618	$	2,202

_______________________________________


⁽¹⁾	Excludes unamortized net discount/premium on debt issuances. For additional information on debt obligations, see Note 13 to the Consolidated Financial Statements.


⁽²⁾	Interest payments for short-term borrowings are calculated based on par values and rates of contractually obligated issuances at fiscal year end. Interest payments on long-term debt are based on principal amounts and fixed coupon rates at fiscal year end.


⁽³⁾	Represents payments of cross-currency swaps, forward exchange contracts, commodity contracts, and deferred compensation hedges. Contractual payments for cross-currency swaps represent future discounted cash payments based on forward interest and spot foreign exchange rates.


⁽⁴⁾	Represents other long-term liabilities, excluding unrecognized tax benefits, postretirement benefits and payments related to pension plans. For additional information on pension and postretirement benefits, see Note 11 to the Consolidated Financial Statements. For additional information on unrecognized tax benefits, see Note 12 to the Consolidated Financial Statements.

Off-Balance Sheet Arrangements and Other Commitments

The company guarantees approximately 2,000 bank loans to Pepperidge Farm independent sales distributors by third-party financial institutions used to purchase distribution routes. The maximum potential amount of the future payments under existing guarantees the company could be required to make is $179 million. The company’s guarantees are indirectly secured by the distribution routes. The company does not believe that it is probable that it will be required to make guarantee payments as a result of defaults on the bank loans guaranteed. See also Note 18 to the Consolidated Financial Statements for information on off-balance sheet arrangements.

INFLATION

In 2014, inflation in cost of products sold was higher than 2013. In 2013, inflation in cost of products sold was lower than 2012. The company continues to use a number of strategies to mitigate the effects of cost inflation including increasing prices, commodity hedging and pursuing cost productivity initiatives such as global procurement strategies and capital investments that improve the efficiency of operations.

MARKET RISK SENSITIVITY

The principal market risks to which the company is exposed are changes in foreign currency exchange rates, interest rates and commodity prices. In addition, the company is exposed to equity price changes related to certain deferred compensation obligations. The company manages its exposure to changes in interest rates by optimizing the use of variable-rate and fixed-rate debt and by utilizing interest rate swaps in order to maintain its variable-to-total debt ratio within targeted guidelines. International operations, which accounted for 22% of 2014 net sales from continuing operations, are concentrated principally in Australia and Canada. The company manages its foreign currency exposures by borrowing in various foreign currencies and utilizing cross-currency swaps and forward contracts. Cross-currency swaps and forward contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The company does not enter into contracts for speculative purposes and does not use leveraged instruments.

The company principally uses a combination of purchase orders and various short- and long-term supply arrangements in connection with the purchase of raw materials, including certain commodities and agricultural products. The company also enters into commodity futures, options and swap contracts to reduce the volatility of price fluctuations of diesel fuel, soybean oil, wheat, aluminum, natural gas, cocoa and corn, which impact the cost of raw materials.

The information below summarizes the company’s market risks associated with debt obligations and other significant financial instruments as of August 3, 2014. Fair values included herein have been determined based on quoted market prices or pricing models using current market rates. The information presented below should be read in conjunction with Notes 13 through 15 to the Consolidated Financial Statements.

The table below presents principal cash flows and related interest rates by fiscal year of maturity for debt obligations. Interest rates disclosed on variable-rate debt represent the weighted-average rates at August 3, 2014. Notional amounts and related interest rates of interest rate swaps are presented by fiscal year of maturity. For the swaps, variable rates are the weighted-average forward rates for the term of each contract.



	Expected Fiscal Year of Maturity
(Millions)	2015			2016			2017			2018			2019			Thereafter			Total			Fair Value
Debt⁽¹⁾
Fixed rate	$	318		$	1		$	401		$	1		$	300		$	1,550		$	2,571		$	2,647
Weighted-average interest rate	3.19		%	1.14		%	3.05		%	1.48		%	4.50		%	4.22		%	3.94		%
Variable rate⁽²⁾	$	1,453																	$	1,453		$	1,453
Weighted-average interest rate	0.42		%																0.42		%
Interest Rate Swaps
Cash-flow swaps
Variable to fixed	$	250																	$	250		$	11
Average pay rate	2.18		%																2.18		%
Average receive rate	2.73		%																2.73		%

_______________________________________


⁽¹⁾	Excludes unamortized net premium/discount on debt issuances.


⁽²⁾	Represents $1.406 billion of USD borrowings and $47 million equivalent of borrowings in other currencies.

As of July 28, 2013, fixed-rate debt of approximately $2.9 billion with an average interest rate of 4.07% and variable-rate debt of approximately $1.6 billion with an average interest rate of 0.45% were outstanding. As of July 28, 2013, the company had swapped $200 million of fixed-rate debt to variable. The average rate to be received on these swaps was 4.88%, and the average rate to be paid was estimated to be 0.67% over the remaining life of the swaps. The swaps matured in 2014. The cash-flow swaps of $250 million included in the table were also outstanding as of July 28, 2013.

The company is exposed to foreign exchange risk related to its international operations, including non-functional currency intercompany debt and net investments in subsidiaries. The following table summarizes the cross-currency swaps outstanding as of August 3, 2014, which hedge such exposures. The notional amount of each currency and the related weighted-average forward interest rate are presented in the Cross-Currency Swaps table.

Cross-Currency Swaps



(Millions)	Fiscal Year of Expiration	Interest Rate	Notional Value		Fair Value
Pay variable AUD	2015	3.15%	$	14	$	—
Receive variable USD		0.62%
Pay variable CAD	2015	1.39%	$	32	$	(1	)
Receive variable USD		0.48%
Pay variable CAD	2016	1.65%	$	32	$	(1	)
Receive variable USD		0.96%
Pay variable CAD	2016	1.66%	$	64	$	(1	)
Receive variable USD		0.96%
Pay variable AUD	2016	3.50%	$	72	$	(1	)
Receive variable USD		1.18%
Pay variable CAD	2017	1.99%	$	73	$	(1	)
Receive variable USD		1.50%
Pay variable CAD	2017	1.98%	$	72	$	(1	)
Receive variable USD		1.50%
Total			$	359	$	(6	)

The cross-currency swap contracts outstanding at July 28, 2013, represented one pay fixed CAD/receive fixed USD swap with a notional value totaling $60 million, three pay variable AUD/receive variable USD swaps with notional values totaling $164 million, and three pay variable CAD/receive variable USD swaps with notional values totaling $159 million. The aggregate notional value of these swap contracts was $383 million as of July 28, 2013, and the aggregate fair value of these swap contracts was a loss of $24 million as of July 28, 2013.

The company is also exposed to foreign exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries, including subsidiary debt. The company utilizes foreign exchange forward purchase and sale contracts to hedge these exposures. The following table summarizes the foreign exchange forward contracts outstanding and the related weighted-average contract exchange rates as of August 3, 2014.

Forward Exchange Contracts



(Millions)	Contract Amount		Average Contractual Exchange Rate (currency paid/ currency received)
Receive USD/Pay CAD	$	144	1.1083
Receive DKK/Pay USD	$	48	0.1807
Receive AUD/Pay NZD	$	27	1.0864
Receive USD/Pay EUR	$	19	0.7379
Receive USD/Pay AUD	$	12	1.1057

The company had an additional $10 million in a number of smaller contracts to purchase or sell various other currencies as of August 3, 2014. The aggregate fair value of all contracts was a loss of $1 million as of August 3, 2014. The total forward exchange contracts outstanding were $641 million, and the aggregate fair value was a loss of $2 million as of July 28, 2013.

The company enters into commodity futures and options contracts to reduce the volatility of price fluctuations for commodities. The notional value of these contracts was $146 million, and the aggregate fair value of these contracts was a loss of $9 million as of August 3, 2014. The notional value of these contracts was $105 million, and the aggregate fair value of these contracts was a loss of $4 million as of July 28, 2013.

The company enters into swap contracts which hedge a portion of exposures relating to certain deferred compensation obligations linked to the total return of the company’s capital stock, the total return of the Vanguard Institutional Index, and the total return of the Vanguard Total International Stock Index. Under these contracts, the company pays variable interest rates and receives from the counterparty either the total return on company capital stock; the total return of the Standard & Poor's 500 Index, which is expected to approximate the total return of the Vanguard Institutional Index; or the total return of the iShares MSCI EAFE Index, which is expected to approximate the total return of the Vanguard Total International Stock Index. The notional value of the contract that is linked to the total return on company capital stock was $25 million at August 3, 2014 and $26 million at July 28, 2013. The average forward interest rate applicable to this contract, which expires in 2015, was 0.61% at August 3, 2014. The notional value of the contract that is linked to the return on the Standard & Poor's 500 Index was $22 million at August 3, 2014 and $19 million at July 28, 2013. The average forward interest rate applicable to this contract, which expires in 2015, was 0.61% at August 3, 2014. The notional value of the contract that is linked to the total return of the iShares MSCI EAFE Index was $9 million at August 3, 2014 and $5 million at July 28, 2013. The average forward interest rate applicable to this contract, which expires in 2015, was 0.56% at August 3, 2014. The fair value of these contracts was a $3 million loss at August 3, 2014 and a $2 million gain at July 28, 2013.

The company’s utilization of financial instruments in managing market risk exposures described above is consistent with the prior year. Changes in the portfolio of financial instruments are a function of the results of operations, debt repayment and debt issuances, market effects on debt and foreign currency, and the company’s acquisition and divestiture activities.

SIGNIFICANT ACCOUNTING ESTIMATES

The consolidated financial statements of the company are prepared in conformity with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. See Note 1 to the Consolidated Financial Statements for a discussion of significant accounting policies. The following areas all require the use of subjective or complex judgments, estimates and assumptions:

Trade and consumer promotion programs — The company offers various sales incentive programs to customers and consumers, such as feature price discounts, in-store display incentives, cooperative advertising programs, new product introduction fees, and coupons. The mix between promotion programs, which are classified as reductions in revenue, and advertising or other marketing activities, which are classified as marketing and selling expenses, fluctuates between periods based on the company’s overall marketing plans, and such fluctuations have an impact on revenues. The measurement and recognition of the costs for trade and consumer promotion programs involves the use of judgment related to performance and redemption estimates. Estimates are made based on historical experience and other factors. Typically, programs that are offered have a very short duration. Historically, the difference between actual experience compared to estimated redemptions and performance has not been significant to the quarterly or annual financial statements. However, actual expenses may differ if the level of redemption rates and performance were to vary from estimates.

Valuation of long-lived assets — Fixed assets and amortizable intangible assets are reviewed for impairment as events or changes in circumstances occur indicating that the carrying value of the asset may not be recoverable. Undiscounted cash flow analyses are used to determine if impairment exists. If impairment is determined to exist, the loss is calculated based on estimated fair value.

Goodwill and intangible assets deemed to have indefinite lives are not amortized but rather are tested at least annually for impairment, or more often if events or changes in circumstances indicate that more likely than not the carrying amount of the asset may not be recoverable. Goodwill is tested for impairment at the reporting unit level. A reporting unit represents an operating segment or a component of an operating segment. Goodwill is tested for impairment by either performing a qualitative evaluation or a two-step quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The company may elect not to perform the qualitative assessment for some or all reporting units and perform a two-step quantitative impairment test. Fair value is determined based on discounted cash flow analyses. The discounted estimates of future cash flows include significant management assumptions such as revenue growth rates, operating margins, weighted average cost of capital, and future economic and market conditions. If the carrying value of the reporting unit exceeds fair value, goodwill is considered impaired. The amount of the impairment is the difference between the carrying value of the goodwill and the “implied” fair value, which is calculated as if the reporting unit had just been acquired and accounted for as a business combination.

Indefinite-lived intangible assets are tested for impairment by comparing the fair value of the asset to the carrying value. Fair value is determined based on discounted cash flow analyses that include significant management assumptions such as revenue growth rates, weighted average cost of capital, and assumed royalty rates. If the fair value is less than the carrying value, the asset is reduced to fair value.

As of August 3, 2014, the carrying value of goodwill was $2,433 million. As of August 3, 2014, goodwill related to the acquisitions in 2013 and 2014 was as follows: Bolthouse Farms - $692 million, Plum - $128 million and Kelsen - $140 million. As of the 2014 measurement, the estimated fair value of each reporting unit significantly exceeded the carrying value, excluding the 2013 and 2014 acquisitions. Holding all other assumptions used in the 2014 fair value measurement constant, a 100-basis-point increase in the weighted average cost of capital would not result in the carrying value of any reporting unit, excluding the 2013 and 2014 acquisitions, to be in excess of the fair value. Within the acquisitions, the fair value exceeded the carrying value of reporting units by at least 4% and as a result, holding all other assumptions used in the 2014 fair value measurement constant, a 100-basis-point increase in the weighted average cost of capital would result in the carrying value to be in excess of the fair value. The fair value was based on significant management assumptions. If assumptions are not achieved or market conditions decline, potential impairment charges could result.

As of August 3, 2014, the carrying value of indefinite-lived trademarks was $957 million. As of August 3, 2014, trademarks related to the acquisitions in 2013 and 2014 were as follows: Bolthouse Farms - $383 million, Plum - $115 million and Kelsen - $147 million. Holding all other assumptions used in the 2014 measurement constant, a 100-basis-point increase in the weighted average cost of capital would reduce the fair value of trademarks, and result in an impairment charge of approximately $25 million.

In the fourth quarter of 2013, as part of the company's annual review of intangible assets, an impairment charge of $360 million was recorded on goodwill and $36 million on trademarks for the simple meals business in Europe. The impairment was attributable to a combination of factors, including the existence of a firm offer to purchase the business; a revised future outlook for the business, with reduced expectations for future sales and discounted cash flows, given the economic uncertainty in the region; future investments required to maintain performance; and management's assumptions on the weighted average cost of capital. On August 12, 2013, the company announced that it was in final and exclusive negotiations for the potential sale of this business. The company has reflected the results of the business as discontinued operations in the Consolidated Statements of Earnings for all years presented. The business was historically included in the International Simple Meals and Beverages segment. The assets and liabilities have been reflected in assets and liabilities held for sale in the Consolidated Balance Sheet as of July 28, 2013. On October 28, 2013, the company completed the sale of its European simple meals business. See Note 4 to the Consolidated Financial Statements for additional information on discontinued operations.

In 2012, as part of the company’s annual review of intangible assets, an impairment charge of $3 million was recognized related to a trademark used in the European simple meals business, formerly included in the International Simple Meals and Beverages segment. The trademark was determined to be impaired as a result of a decrease in the fair value of the brand, resulting from reduced expectations for future sales and discounted cash flows in comparison to the prior year.

The estimates of future cash flows involve considerable management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions, and cost of capital. Inherent in estimating the future cash flows are uncertainties beyond the company’s control, such as capital markets. The actual cash flows could differ materially from management’s estimates due to changes in business conditions, operating performance, and economic conditions.

See also Note 6 to the Consolidated Financial Statements for additional information on goodwill and intangible assets.

Pension and postretirement benefits — The company provides certain pension and postretirement benefits to employees and retirees. Determining the cost associated with such benefits is dependent on various actuarial assumptions, including discount rates, expected return on plan assets, compensation increases, turnover rates and health care trend rates. Independent actuaries, in accordance with accounting principles generally accepted in the United States, perform the required calculations to determine expense. Actual results that differ from the actuarial assumptions are generally accumulated and amortized over future periods.

The discount rate is established as of the company’s fiscal year-end measurement date. In establishing the discount rate, the company reviews published market indices of high-quality debt securities, adjusted as appropriate for duration. In addition, independent actuaries apply high-quality bond yield curves to the expected benefit payments of the plans. The expected return on plan assets is a long-term assumption based upon historical experience and expected future performance, considering the company’s current and projected investment mix. This estimate is based on an estimate of future inflation, long-term projected real returns for each asset class, and a premium for active management. Within any given fiscal period, significant differences may arise between the actual return and the expected return on plan assets. The value of plan assets, used in the calculation of pension expense, is determined on a calculated method that recognizes 20% of the difference between the actual fair value of assets and the expected calculated method. Gains and losses resulting from differences between actual experience and the assumptions are determined at each measurement date. If the net gain or loss exceeds 10% of the greater of plan assets or liabilities, a portion is amortized into earnings in the following year.

Net periodic pension and postretirement expense was $109 million in 2014, $130 million in 2013 and $102 million in 2012.

Significant weighted-average assumptions as of the end of the year were as follows:



	2014	2013	2012
Pension
Discount rate for benefit obligations	4.33%	4.82%	4.05%
Expected return on plan assets	7.62%	7.62%	7.65%
Postretirement
Discount rate for obligations	4.00%	4.50%	3.75%
Initial health care trend rate	8.25%	8.25%	8.25%
Ultimate health care trend rate	4.50%	4.50%	4.50%

Estimated sensitivities to annual net periodic pension cost are as follows: a 50-basis-point reduction in the discount rate would increase expense by approximately $12 million; a 50-basis-point reduction in the estimated return on assets assumption would increase expense by approximately $12 million. A one-percentage-point increase in assumed health care costs would increase postretirement service and interest cost by approximately $1 million.

Net periodic pension and postretirement expense is expected to decrease to approximately $75 million in 2015. The reduction is primarily due to pension settlement charges of $22 million recognized in 2014 associated with a U.S. pension plan. The settlements resulted from the level of lump sum distributions from the plan's assets in 2014, primarily due to the closure of the facility in Sacramento, California.

The company contributed $35 million, $75 million and $55 million, respectively, to U.S. pension plans in 2014, 2013 and 2012. Contributions to non-U.S. plans were $12 million in 2014 and 2013, and $16 million in 2012. The company does not expect to contribute to the U.S. pension plans in 2015. Contributions to non-U.S. plans are expected to be approximately $6 million in 2015.

See also Note 11 to the Consolidated Financial Statements for additional information on pension and postretirement expenses.

Income taxes — The effective tax rate reflects statutory tax rates, tax planning opportunities available in the various jurisdictions in which the company operates and management’s estimate of the ultimate outcome of various tax audits and issues. Significant judgment is required in determining the effective tax rate and in evaluating tax positions. Income taxes are recorded based on amounts refundable or payable in the current year and include the effect of deferred taxes. Deferred tax assets and liabilities are recognized for the future impact of differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. Valuation allowances are established for deferred tax assets when it is more likely than not that a tax benefit will not be realized.

See also Notes 1 and 12 to the Consolidated Financial Statements for further discussion on income taxes.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 2 to the Consolidated Financial Statements for information on recent accounting pronouncements.

CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS

This Report contains “forward-looking” statements that reflect the company’s current expectations regarding future results of operations, economic performance, financial condition and achievements of the company. The company tries, wherever possible, to identify these forward-looking statements by using words such as “anticipate,” “believe,” “estimate,” “expect,” “will” and similar expressions. One can also identify them by the fact that they do not relate strictly to historical or current facts. 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 regarding future events and estimates which could be inaccurate and which are inherently subject to risks and uncertainties.

The company wishes to caution the reader that the following important factors and those important factors described in Part 1, Item 1A and elsewhere in this Report, 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, promotional programs and new advertising;


•	the impact of changes in consumer demand for the company’s products;


•	the risks in the marketplace associated with trade and consumer acceptance of product improvements, shelving initiatives, new products, and pricing and promotional strategies;


•	the company’s ability to achieve sales and earnings guidance, which is based on assumptions about sales volume, product mix, the development and success of new products, the impact of marketing, promotional and pricing actions, product costs and currency;


•	the company’s ability to realize projected cost savings and benefits, including restructuring initiatives;


•	the company’s ability to successfully manage changes to its business processes, including selling, distribution, manufacturing and information management systems;


•	the practices and increased significance of certain of the company’s key customers;


•	the impact of new or changing inventory management practices by the company’s customers;


•	the impact of fluctuations in the supply of and inflation in energy, raw and packaging materials cost;


•	the impact of completing and integrating acquisitions, divestitures and other portfolio changes;


•	the uncertainties of litigation described from time to time in the company’s Securities and Exchange Commission filings;


•	the impact of changes in currency exchange rates, tax rates, interest rates, debt and equity markets, inflation rates, economic conditions and other external factors; and


•	the impact of unforeseen business disruptions in one or more of the company’s markets due to political instability, civil disobedience, armed hostilities, natural disasters or other calamities.

This discussion of uncertainties is by no means exhaustive but is designed to highlight important factors that may impact the company’s outlook. The company disclaims any obligation or intent to update forward-looking statements made by the company in order to reflect new information, events or circumstances after the date they are made.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

The information presented in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Market Risk Sensitivity” is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data

CAMPBELL SOUP COMPANY

Consolidated Statements of Earnings

(millions, except per share amounts)



	2014			2013			2012
	53 weeks			52 weeks			52 weeks
Net sales	$	8,268		$	8,052		$	7,175
Costs and expenses
Cost of products sold	5,370			5,140			4,365
Marketing and selling expenses	935			947			941
Administrative expenses	573			677			580
Research and development expenses	121			128			116
Other expenses / (income)	22			29			11
Restructuring charges	55			51			7
Total costs and expenses	7,076			6,972			6,020
Earnings before interest and taxes	1,192			1,080			1,155
Interest expense	122			135			114
Interest income	3			10			8
Earnings before taxes	1,073			955			1,049
Taxes on earnings	347			275			325
Earnings from continuing operations	726			680			724
Earnings (loss) from discontinued operations	81			(231		)	40
Net earnings	807			449			764
Less: Net earnings (loss) attributable to noncontrolling interests	(11		)	(9		)	(10		)
Net earnings attributable to Campbell Soup Company	$	818		$	458		$	774
Per Share — Basic
Earnings from continuing operations attributable to Campbell Soup Company	$	2.35		$	2.19		$	2.30
Earnings (loss) from discontinued operations	.26			(.74		)	.12
Net earnings attributable to Campbell Soup Company	$	2.61		$	1.46		$	2.43
Weighted average shares outstanding — basic	314			314			317
Per Share — Assuming Dilution
Earnings from continuing operations attributable to Campbell Soup Company	$	2.33		$	2.17		$	2.29
Earnings (loss) from discontinued operations	.26			(.73		)	.12
Net earnings attributable to Campbell Soup Company	$	2.59		$	1.44		$	2.41
Weighted average shares outstanding — assuming dilution	316			317			319

The sum of the individual per share amounts may not add due to rounding.

See accompanying Notes to Consolidated Financial Statements.

CAMPBELL SOUP COMPANY

Consolidated Statements of Comprehensive Income

(millions)



	2014									2013									2012
	Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount
Net earnings							$	807								$	449								$	764
Other comprehensive income (loss):
Foreign currency translation:
Foreign currency translation adjustments	$	(12	)	$	(1	)	(13		)	$	(95	)	$	3		(92		)	$	(127	)	$	(8	)	(135		)
Reclassification of currency translation adjustments realized upon disposal of business	(22		)	3			(19		)	—			—			—			—			—			—
Cash-flow hedges:
Unrealized gains (losses) arising during period	(12		)	4			(8		)	20			(8		)	12			15			(5		)	10
Reclassification adjustment for (gains) losses included in net earnings	—			—			—			4			(1		)	3			—			—			—
Pension and other postretirement benefits:
Net actuarial gain (loss) arising during the period	(55		)	20			(35		)	322			(103		)	219			(428		)	151			(277		)
Reclassification of prior service credit included in net earnings	(2		)	—			(2		)	(2		)	—			(2		)	(1		)	—			(1		)
Reclassification of net actuarial loss included in net earnings	113			(39		)	74			124			(54		)	70			83			(29		)	54
Other comprehensive income (loss)	$	10		$	(13	)	(3		)	$	373		$	(163	)	210			$	(458	)	$	109		(349		)
Total comprehensive income (loss)							$	804								$	659								$	415
Total comprehensive income (loss) attributable to noncontrolling interests</