CPB-4.27.2014-10Q


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
_____________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Quarterly Period Ended
April 27, 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
_____________________________________________________
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 Date 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 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


There were 313,914,401 shares of capital stock outstanding as of May 29, 2014.






TABLE OF CONTENTS

 
 
 
 
 
 
 
 


2





PART I


ITEM 1. FINANCIAL INFORMATION
CAMPBELL SOUP COMPANY
Consolidated Statements of Earnings
(unaudited)
(millions, except per share amounts)
 
 
Three Months Ended
 
Nine Months Ended
 
April 27,
2014
 
April 28,
2013
 
April 27,
2014
 
April 28,
2013
Net sales
$
1,970

 
$
1,962

 
$
6,416

 
$
6,329

Costs and expenses
 
 
 
 
 
 
 
Cost of products sold
1,294

 
1,256

 
4,149

 
4,040

Marketing and selling expenses
217

 
245

 
746

 
756

Administrative expenses
134

 
164

 
424

 
482

Research and development expenses
30

 
35

 
88

 
94

Other expenses / (income)
2

 
4

 
16

 
24

Restructuring charges
1

 
1

 
35

 
31

Total costs and expenses
1,678

 
1,705

 
5,458

 
5,427

Earnings before interest and taxes
292

 
257

 
958

 
902

Interest expense
31

 
33

 
91

 
102

Interest income
1

 
2

 
2

 
7

Earnings before taxes
262

 
226

 
869

 
807

Taxes on earnings
79

 
59

 
278

 
242

Earnings from continuing operations
183

 
167

 
591

 
565

Earnings from discontinued operations
—

 
12

 
81

 
44

Net earnings
183

 
179

 
672

 
609

Less: Net earnings (loss) attributable to noncontrolling interests
(1
)
 
(2
)
 
(9
)
 
(7
)
Net earnings attributable to Campbell Soup Company
$
184

 
$
181

 
$
681

 
$
616

Per Share — Basic
 
 
 
 
 
 
 
Earnings from continuing operations attributable to Campbell Soup Company
$
.59

 
$
.54

 
$
1.91

 
$
1.82

Earnings from discontinued operations
—

 
.04

 
.26

 
.14

Net earnings attributable to Campbell Soup Company
$
.59

 
$
.58

 
$
2.17

 
$
1.96

Dividends
$
.312

 
$
—

 
$
.936

 
$
.87

Weighted average shares outstanding — basic
314

 
314

 
314

 
314

Per Share — Assuming Dilution
 
 
 
 
 
 
 
Earnings from continuing operations attributable to Campbell Soup Company
$
.58

 
$
.53

 
$
1.90

 
$
1.80

Earnings from discontinued operations
—

 
.04

 
.26

 
.14

Net earnings attributable to Campbell Soup Company
$
.58

 
$
.57

 
$
2.16

 
$
1.94

Weighted average shares outstanding — assuming dilution
316

 
317

 
316

 
317

See accompanying Notes to Consolidated Financial Statements.



3





CAMPBELL SOUP COMPANY
Consolidated Statements of Comprehensive Income
(unaudited)
(millions)
 
Three Months Ended
 
April 27, 2014
 
April 28, 2013
 
Pre-tax amount
 
Tax (expense) benefit
 
After-tax amount
 
Pre-tax amount
 
Tax (expense) benefit
 
After-tax amount
Net earnings
 
 
 
 
$
183

 
 
 
 
 
$
179

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
$
68

 
$
—

 
68

 
$
(32
)
 
$
5

 
(27
)
Cash-flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains (losses) arising during the period
(5
)
 
2

 
(3
)
 
(5
)
 
2

 
(3
)
Reclassification adjustment for (gains) losses included in net earnings
1

 
—

 
1

 
—

 
—

 
—

Pension and other postretirement benefits:
 
 
 
 
 
 
 
 
 
 
 
Net actuarial gain (loss) arising during the period
(1
)
 
—

 
(1
)
 
1

 
—

 
1

Reclassification of prior service credit included in net earnings
(1
)
 
—

 
(1
)
 
—

 
—

 
—

Reclassification of net actuarial loss included in net earnings
40

 
(14
)
 
26

 
31

 
(11
)
 
20

Other comprehensive income (loss)
$
102

 
$
(12
)
 
90

 
$
(5
)
 
$
(4
)
 
(9
)
Total comprehensive income (loss)
 
 
 
 
$
273

 
 
 
 
 
$
170

Total comprehensive income (loss) attributable to noncontrolling interests
 
 
 
 
—

 
 
 
 
 
(2
)
Total comprehensive income (loss) attributable to Campbell Soup Company
 
 
 
 
$
273

 
 
 
 
 
$
172

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
April 27, 2014
 
April 28, 2013
 
Pre-tax amount
 
Tax (expense) benefit
 
After-tax amount
 
Pre-tax amount
 
Tax (expense) benefit
 
After-tax amount
Net earnings
 
 
 
 
$
672

 
 
 
 
 
$
609

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
$
(1
)
 
$
(1
)
 
(2
)
 
$
6

 
$
1

 
7

Reclassification of currency translation adjustments realized upon disposal of business
(22
)
 
3

 
(19
)
 
—

 
—

 
—

Cash-flow hedges:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains (losses) arising during period
(4
)
 
2

 
(2
)
 
(1
)
 
—

 
(1
)
Reclassification adjustment for (gains) losses included in net earnings
1

 
—

 
1

 
1

 
—

 
1

Pension and other postretirement benefits:
 
 
 
 
 
 
 
 
 
 
 
Net actuarial gain (loss) arising during the period
7

 
(2
)
 
5

 
1

 
—

 
1

Reclassification of prior service credit included in net earnings
(2
)
 
—

 
(2
)
 
(2
)
 
—

 
(2
)
Reclassification of net actuarial loss included in net earnings
87

 
(30
)
 
57

 
93

 
(32
)
 
61

Other comprehensive income (loss)
$
66

 
$
(28
)
 
38

 
$
98

 
$
(31
)
 
67

Total comprehensive income (loss)
 
 
 
 
$
710

 
 
 
 
 
$
676

Total comprehensive income (loss) attributable to noncontrolling interests
 
 
 
 
(9
)
 
 
 
 
 
(7
)
Total comprehensive income (loss) attributable to Campbell Soup Company
 
 
 
 
$
719

 
 
 
 
 
$
683


See accompanying Notes to Consolidated Financial Statements.

4





CAMPBELL SOUP COMPANY
Consolidated Balance Sheets
(unaudited)
(millions, except per share amounts)
 
April 27,
2014
 
July 28,
2013
Current assets
 
 
 
Cash and cash equivalents
$
222

 
$
333

Accounts receivable, net
669

 
635

Inventories
858

 
925

Other current assets
198

 
135

Current assets of discontinued operations held for sale
—

 
193

Total current assets
1,947

 
2,221

Plant assets, net of depreciation
2,263

 
2,260

Goodwill
2,431

 
2,297

Other intangible assets, net of amortization
1,185

 
1,021

Other assets
138

 
131

Non-current assets of discontinued operations held for sale
—

 
393

Total assets
$
7,964

 
$
8,323

Current liabilities
 
 
 
Short-term borrowings
$
1,662

 
$
1,909

Payable to suppliers and others
501

 
523

Accrued liabilities
550

 
617

Dividend payable
101

 
100

Accrued income taxes
3

 
19

Current liabilities of discontinued operations held for sale
—

 
114

Total current liabilities
2,817

 
3,282

Long-term debt
2,247

 
2,544

Deferred taxes
581

 
489

Other liabilities
728

 
776

Non-current liabilities of discontinued operations held for sale
—

 
22

Total liabilities
6,373

 
7,113

Commitments and contingencies

 

Campbell Soup Company shareholders' equity
 
 
 
Preferred stock; authorized 40 shares; none issued
—

 
—

Capital stock, $.0375 par value; authorized 560 shares; issued 323 shares
12

 
12

Additional paid-in capital
322

 
362

Earnings retained in the business
2,159

 
1,772

Capital stock in treasury, at cost
(364
)
 
(364
)
Accumulated other comprehensive loss
(527
)
 
(565
)
Total Campbell Soup Company shareholders' equity
1,602

 
1,217

Noncontrolling interests
(11
)
 
(7
)
Total equity
1,591

 
1,210

Total liabilities and equity
$
7,964

 
$
8,323

See accompanying Notes to Consolidated Financial Statements.


5





CAMPBELL SOUP COMPANY
Consolidated Statements of Cash Flows
(unaudited)
(millions)
 
Nine Months Ended
 
April 27,
2014
 
April 28,
2013
Cash flows from operating activities:
 
 
 
Net earnings
$
672

 
$
609

Adjustments to reconcile net earnings to operating cash flow
 
 
 
Restructuring charges
35

 
31

Stock-based compensation
46

 
82

Depreciation and amortization
222

 
318

Deferred income taxes
20

 
(10
)
Gain on sale of business
(141
)
 
—

Other, net
90

 
114

Changes in working capital
 
 
 
Accounts receivable
(55
)
 
(40
)
Inventories
104

 
(52
)
Prepaid assets
(25
)
 
1

Accounts payable and accrued liabilities
(110
)
 
(82
)
Pension fund contributions
(45
)
 
(83
)
Receipts from (payments of) hedging activities
(6
)
 
20

Other
(44
)
 
(44
)
Net cash provided by operating activities
763

 
864

Cash flows from investing activities:
 
 
 
Purchases of plant assets
(198
)
 
(205
)
Sales of plant assets
19

 
4

Businesses acquired, net of cash acquired
(329
)
 
(1,558
)
Sale of business, net of cash divested
520

 
—

Other, net
(1
)
 
(15
)
Net cash provided by (used in) investing activities
11

 
(1,774
)
Cash flows from financing activities:
 
 
 
Net short-term borrowings (repayments)
(303
)
 
613

Long-term borrowings
—

 
1,250

Repayments of notes payable
(300
)
 
(400
)
Dividends paid
(293
)
 
(366
)
Treasury stock purchases
(76
)
 
(139
)
Treasury stock issuances
14

 
78

Excess tax benefits on stock-based compensation
11

 
9

Contributions from noncontrolling interest
5

 
3

Other, net
—

 
(17
)
Net cash provided by (used in) financing activities
(942
)
 
1,031

Effect of exchange rate changes on cash
(11
)
 
(3
)
Net change in cash and cash equivalents
(179
)
 
118

Cash and cash equivalents continuing operations — beginning of period
333

 
335

Cash and cash equivalents discontinued operations — beginning of period
68

 
—

Cash and cash equivalents discontinued operations — end of period
—

 
—

Cash and cash equivalents continuing operations — end of period
$
222

 
$
453

See accompanying Notes to Consolidated Financial Statements.

6





CAMPBELL SOUP COMPANY
Consolidated Statements of Equity
(unaudited)
(millions, except per share amounts)
 
Campbell Soup Company Shareholders’ Equity
 
 
 
 
 
Capital Stock
 
Additional Paid-in
Capital
 
Earnings Retained in the
Business
 
Accumulated Other Comprehensive
Income (Loss)
 
Noncontrolling
Interests
 
 
 
Issued
 
In Treasury
 
 
 
 
 
Total
Equity
  
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
Balance at July 29, 2012
542

 
$
20

 
(230
)
 
$
(8,259
)
 
$
329

 
$
9,584

 
$
(776
)
 
$
—

 
$
898

Contribution from noncontrolling interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3

 
3

Net earnings (loss)

 

 

 

 

 
616

 

 
(7
)
 
609

Other comprehensive income (loss)

 

 

 

 

 

 
67

 
—

 
67

Dividends ($.87 per share)

 

 

 

 

 
(279
)
 

 

 
(279
)
Treasury stock purchased

 

 
(4
)
 
(139
)
 

 

 

 

 
(139
)
Treasury stock retired
(219
)
 
(8
)
 
219

 
7,907

 
 
 
(7,899
)
 
 
 
 
 
—

Treasury stock issued under management incentive and stock option plans
 
 
 
 
4

 
126

 
28

 
 
 
 
 
 
 
154

Balance at April 28, 2013
323

 
$
12

 
(11
)
 
$
(365
)
 
$
357

 
$
2,022

 
$
(709
)
 
$
(4
)
 
$
1,313

Balance at July 28, 2013
323

 
$
12

 
(11
)
 
$
(364
)
 
$
362

 
$
1,772

 
$
(565
)
 
$
(7
)
 
$
1,210

Contribution from noncontrolling interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5

 
5

Net earnings (loss)

 

 

 

 

 
681

 

 
(9
)
 
672

Other comprehensive income (loss)

 

 

 

 

 

 
38

 
—

 
38

Dividends ($.936 per share)

 

 

 

 

 
(294
)
 

 

 
(294
)
Treasury stock purchased

 

 
(2
)
 
(76
)
 

 

 

 

 
(76
)
Treasury stock issued under management incentive and stock option plans


 


 
2

 
76

 
(40
)
 


 


 

 
36

Balance at April 27, 2014
323

 
$
12

 
(11
)
 
$
(364
)
 
$
322

 
$
2,159

 
$
(527
)
 
$
(11
)
 
$
1,591

See accompanying Notes to Consolidated Financial Statements.

7





Notes to Consolidated Financial Statements
(unaudited)
(currency in millions, except per share amounts)

1.
Basis of Presentation and Significant Accounting Policies
The financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the indicated periods. The accounting policies used in preparing these financial statements are consistent with those applied in the Annual Report on Form 10-K for the year ended July 28, 2013. The results for the period are not necessarily indicative of the results to be expected for other interim periods or the full year. Certain amounts in prior-year financial statements were reclassified to conform to the current-year presentation. The company's fiscal year ends on the Sunday nearest July 31. There were 52 weeks in 2013. There will be 53 weeks in 2014.
2.
Recent Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board (FASB) issued guidance related to disclosures about offsetting (netting) of assets and liabilities in the statement of financial position. The guidance requires entities to disclose gross information and net information about both instruments and transactions that are offset in the statement of financial position, and instruments and transactions subject to an agreement similar to a master netting arrangement. The scope includes financial instruments and derivative instruments. In January 2013, the FASB issued an amendment to the guidance to limit the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements, and securities lending transactions to the extent that they are offset in the financial statements or subject to an enforceable master netting arrangement or similar arrangement. The disclosures were required for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The company adopted the guidance in the first quarter of 2014. The adoption resulted in additional disclosures, but did not have an impact on the company’s consolidated financial statements. See Note 12.
In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets for impairment. The amendments will allow an entity first to assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity will no longer be required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative test unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments are effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The company does not expect the adoption to have a material impact on the company’s consolidated financial statements.
In February 2013, the FASB issued guidance for the recognition, measurement, and disclosure of certain obligations resulting from joint and several liability arrangements for which the total amount is fixed. Such obligations may include debt arrangements, legal settlements, and other contractual arrangements. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and should be applied retrospectively to all prior periods presented for those obligations within scope that existed as of the beginning of the fiscal year of adoption. Early adoption is permitted. The company is currently evaluating the guidance but does not expect the adoption to have a material impact on the company’s consolidated financial statements.
In March 2013, the FASB issued guidance on the accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The company will apply the guidance to applicable transactions.
In July 2013, the FASB issued guidance which permits an entity to designate the Fed Funds Effective Swap Rate, also referred to as the overnight index swap rate, as a benchmark interest rate in a hedge accounting relationship. In addition, the guidance removes the restriction on using different benchmark interest rates for similar hedges. The guidance was effective in July 2013. The company will apply the guidance to applicable transactions.
In July 2013, the FASB issued guidance on the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance requires the netting of unrecognized tax benefits (UTBs) against a deferred tax asset for a loss or other carryforward that would apply in settlement of uncertain tax positions. Under the new standard, UTBs will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the UTBs. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and should be applied prospectively to all UTBs that exist at the effective date. Retrospective application is permitted. The company is currently evaluating the new guidance but does not expect the adoption to have a material impact on the company’s consolidated financial statements.

8





In April 2014, the FASB issued revised guidance redefining discontinued operations, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The guidance is effective for fiscal years beginning on or after December 15, 2014, and interim periods within those years. Early adoption is permitted. The company will prospectively apply the guidance to applicable transactions.
In May 2014, the FASB issued revised guidance on the recognition of revenue from contracts with customers. The guidance is designed to create greater comparability for financial statement users across industries and jurisdictions. The guidance also requires enhanced disclosures. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is not permitted. The company is currently evaluating the new guidance.
3.
Acquisitions
On August 8, 2013, the company completed the acquisition of Kelsen Group A/S (Kelsen). The purchase price was $331. Kelsen is a producer of quality baked snacks that are sold in 85 countries around the world. Its primary brands include Kjeldsens and Royal Dansk. Kelsen has established distribution networks in markets in Asia, the U.S., Europe, the Middle East, South America and Africa.
The excess of the purchase price over the estimated fair values of the identifiable tangible and intangible assets was recorded as $136 of goodwill. The goodwill is not expected to be deductible for tax purposes. The goodwill was primarily attributable to future growth opportunities and any intangible assets that did not qualify for separate recognition. The goodwill is included in the Global Baking and Snacking segment.
The acquisition of Kelsen contributed $17 to Net sales and resulted in a Net loss of $4 for the three-month period ended April 27, 2014. The acquisition also contributed $161 to Net sales and $7 to Net earnings from August 8, 2013 to April 27, 2014.
On June 13, 2013, the company completed the acquisition of Plum, PBC (formerly Plum Inc.) for $249.
The acquisition of Plum contributed $24 to Net sales and resulted in a Net loss of $3 for the three-month period ended April 27, 2014. The acquisition also contributed $56 to Net sales and resulted in a Net loss of $15 for the nine-month period ended April 27, 2014. The Net loss for the nine-month period ended April 27, 2014 included $11 of after-tax costs incurred from a voluntary product recall (see Note 18 for additional details).
The acquired assets and assumed liabilities include the following:
 
 
Kelsen
 
Plum
Cash
 
$
2

 
$
1

Accounts receivable
 
20

 
15

Inventories
 
50

 
20

Other current assets
 
2

 
1

Plant assets
 
51

 
2

Goodwill
 
136

 
128

Other intangible assets
 
173

 
133

Short-term debt
 
(32
)
 
—

Accounts payable
 
(11
)
 
(12
)
Accrued liabilities
 
(11
)
 
(5
)
Long-term debt
 
(4
)
 
—

Deferred income taxes
 
(45
)
 
(34
)
Total of assets acquired and liabilities assumed
 
$
331

 
$
249

The purchase price allocation for Kelsen is preliminary and is subject to the finalization of tax balances.
The identifiable intangible assets of Kelsen consist of $147 in non-amortizable trademarks, $4 in amortizable trademarks to be amortized over 10 years, and $22 in customer relationships to be amortized over 10 to 15 years. The identifiable intangible assets of Plum consist of $115 in non-amortizable trademarks and $18 in customer relationships to be amortized over 15 years.
On August 6, 2012, the company completed the acquisition of BF Bolthouse Holdco LLC (Bolthouse Farms) from a fund managed by Madison Dearborn Partners, LLC, a private equity firm, for $1,550 in cash, subject to customary purchase price adjustments. On August 6, 2012, the preliminary purchase price adjustments resulted in an increase in the purchase price of $20. In the third quarter of 2013, the purchase price adjustments were finalized and reduced to $11. The company incurred transaction costs of $10 ($7 after tax) in the three-month period ended October 28, 2012 related to this acquisition. The costs were recorded in Other expenses/(income).

9





The following unaudited summary information is presented on a consolidated pro forma basis as if the Kelsen acquisition had occurred on July 30, 2012 and the Plum and Bolthouse acquisitions had occurred on August 1, 2011:
 
Three Months Ended
 
Nine Months Ended
 
April 27, 2014
 
April 28, 2013
 
April 27, 2014
 
April 28, 2013
Net sales
$
1,970

 
$
2,001

 
$
6,420

 
$
6,573

Earnings from continuing operations attributable to Campbell Soup Company
$
184

 
$
165

 
$
601

 
$
569

Earnings per share from continuing operations attributable to Campbell Soup Company
$
.58

 
$
.52

 
$
1.90

 
$
1.79

The pro forma amounts include additional interest expense on the debt issued to finance the purchases, amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets, plant assets, and related tax effects. The pro forma results are not necessarily indicative of the combined results had the Kelsen acquisition been completed on July 30, 2012, and the Plum and Bolthouse acquisitions been completed on August 1, 2011, nor are they indicative of future combined results.
4.
Discontinued Operations
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 approximately €400, or $548. The purchase price was subject to certain post-closing adjustments, which resulted in a $14 reduction of proceeds. The company recognized a pre-tax gain of $141 ($72 after tax or $.23 per share) in the nine-month period ended April 27, 2014. The European business included the Erasco and Heisse Tasse soups in Germany; Liebig and Royco soups in France; Devos Lemmens mayonnaise and cold sauces and Royco soups in Belgium; and Blå Band and Isomitta soups and sauces in Sweden. The company used the proceeds from the sale to pay taxes on the sale, reduce debt and for other general corporate purposes.
The company has reflected the results of the European simple meals business as discontinued operations in the Consolidated Statements of Earnings for all periods presented. The business was historically included in the International Simple Meals and Beverages segment.
Results of discontinued operations were as follows:
 
Three Months Ended
 
Nine Months Ended
 
April 27, 2014
 
April 28, 2013
 
April 27, 2014
 
April 28, 2013
Net sales
$
—

 
$
132

 
$
137

 
$
434

 
 
 
 
 
 
 
 
Earnings before taxes
$
—

 
$
15

 
$
14

 
$
56

Taxes on earnings
—

 
3

 
5

 
12

Gain on sale
—

 
—

 
141

 
—

Tax impact of gain on sale
—

 
—

 
69

 
—

Earnings from discontinued operations
$
—

 
$
12

 
$
81

 
$
44



10





The assets and liabilities of the business have been reflected in assets and liabilities held for sale in the Consolidated Balance Sheet as of July 28, 2013, and are comprised of the following:
 
 
July 28,
 2013
Cash
 
$
68

Accounts receivable
 
54

Inventories
 
68

Prepaid expenses
 
3

Current assets
 
$
193

 
 
 
Plant assets
 
$
98

Goodwill
 
110

Intangible assets
 
150

Other assets
 
35

Non-current assets
 
$
393

 
 
 
Accounts payable
 
$
60

Accrued liabilities
 
54

Current liabilities
 
$
114

 
 
 
Non-current pension obligation
 
$
11

Other liabilities
 
11

Non-current liabilities
 
$
22


5.
Accumulated Other Comprehensive Income (Loss)
The components of Accumulated other comprehensive income (loss) consisted of the following:
 
 
Foreign Currency Translation Adjustment (1)
 
Gains (Losses) on Cash Flow Hedges (2)
 
Pension and Postretirement Benefit Plan Adjustments (3)
 
Total Accumulated Comprehensive Income (Loss)
Balance at July 28, 2013
 
$
170

 
$
5

 
$
(740
)
 
$
(565
)
Other comprehensive income (loss) before reclassifications
 
(2
)
 
(2
)
 
5

 
1

Amounts reclassified from accumulated other comprehensive income (loss)
 
(19
)
 
1

 
55

 
37

Net current-period other comprehensive income (loss)
 
(21
)
 
(1
)
 
60

 
38

Balance at April 27, 2014
 
$
149

 
$
4

 
$
(680
)
 
$
(527
)
_____________________________________
(1) 
Included a tax expense of $7 as of April 27, 2014, and $9 as of July 28, 2013. The amount reclassified from other comprehensive income was related to the divestiture of the European simple meals business and was included in earnings from discontinued operations.
(2) 
Included a tax expense of $1 as of April 27, 2014, and $3 as of July 28, 2013.
(3) 
Included a tax benefit of $392 as of April 27, 2014, and $424 as of July 28, 2013. The amount reclassified from other comprehensive income included a pre-tax settlement charge of $18, or $11 after tax.

11





The amounts reclassified from Accumulated other comprehensive income (loss) consisted of the following:
 
 
Three Months Ended
 
Nine Months Ended
 
 
Details about Accumulated Other Comprehensive Income Components
 
April 27, 2014
 
April 28, 2013
 
April 27, 2014
 
April 28, 2013
 
Location of (Gain) Loss Recognized in Earnings
 
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
 
(Gains) losses on cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign exchange forward contracts
 
$
(1
)
 
$
(1
)
 
$
(2
)
 
$
(2
)
 
Cost of products sold
Foreign exchange forward contracts
 
1

 
—

 
—

 
—

 
Other expenses / (income)
Forward starting interest rate swaps
 
1

 
1

 
3

 
3

 
Interest expense
Total before tax
 
1

 
—

 
1

 
1

 
 
Tax expense (benefit)
 
—

 
—

 
—

 
—

 
 
(Gain) loss, net of tax
 
$
1

 
$
—

 
$
1

 
$
1

 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of pension and postretirement benefit adjustments:
 
 
 
 
 
 
 
 
 
 
Prior service credits
 
$
(1
)
 
$
—

 
$
(2
)
 
$
(2
)
 
(1) 
Net actuarial losses
 
40

 
31

 
87

 
93

 
(1) 
Total before tax
 
39

 
31

 
85

 
91

 
 
Tax expense (benefit)
 
(14
)
 
(11
)
 
(30
)
 
(32
)
 
 
(Gain) loss, net of tax
 
$
25

 
$
20

 
$
55

 
$
59

 
 
_____________________________________
(1) 
Net actuarial losses of $2 were recognized in earnings from discontinued operations as a result of the sale of the European simple meals business. Excluding the net actuarial losses related to the sale of the business, these items are included in the components of net periodic benefit costs (see Note 11 for additional details).

In the nine-month period ended April 27, 2014, a pre-tax loss of $22 ($19 after tax) on foreign currency translation adjustments was also reclassified from Accumulated other comprehensive income. The loss was related to the divestiture of the European simple meals business and was included in earnings from discontinued operations.
6.
Goodwill and Intangible Assets
The following table shows the changes in the carrying amount of goodwill by business segment:
 
U.S.    
Simple
Meals
 
Global
Baking
and
Snacking
 
International
Simple Meals
and
Beverages
 
U.S.
Beverages
 
Bolthouse and Foodservice
 
Total    
Balance at July 28, 2013
$
450

 
$
775

 
$
122

 
$
112

 
$
838

 
$
2,297

Acquisition
—

 
136

 
—

 
—

 
—

 
136

Foreign currency translation adjustment
—

 
6

 
(8
)
 
—

 
—

 
(2
)
Balance at April 27, 2014
$
450

 
$
917

 
$
114

 
$
112

 
$
838

 
$
2,431

In 2014, the company acquired Kelsen for $331 and goodwill related to the acquisition was $136. See Note 3.

12





The following table sets forth balance sheet information for intangible assets, excluding goodwill, subject to amortization and intangible assets not subject to amortization:
Intangible Assets
 
April 27,
2014
 
July 28,
2013
Non-amortizable intangible assets
 
 
 
 
Trademarks
 
$
961

 
$
810

Amortizable intangible assets
 
 
 
 
Customer relationships
 
$
179

 
$
156

Technology
 
40

 
40

Other
 
36

 
32

Total gross amortizable intangible assets
 
$
255

 
$
228

Accumulated amortization
 
(31
)
 
(17
)
Total net intangible assets
 
$
1,185

 
$
1,021

Non-amortizable intangible assets consist of trademarks, which include Bolthouse Farms, Pace, Plum Organics, Kjeldsens and Royal Dansk. Other amortizable intangible assets consist substantially of recipes, patents, trademarks and distributor relationships.
Amortization of intangible assets in Earnings from continuing operations was $13 and $11 for the nine-month periods ended April 27, 2014 and April 28, 2013, respectively. The estimated aggregated amortization expense is estimated to be $18 in each of the fiscal periods 2014 through 2017 and $14 in 2018. Asset useful lives range from 5 to 20 years.
7.
Business and Geographic Segment Information
The company manages operations through 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. The reportable segments are discussed in greater detail below.
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.
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.
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 also Note 4 for information on the sale of the simple meals business in Europe. This business was historically included in this segment. The results of operations of this business have been reflected as discontinued operations for the periods presented. Prior periods were reclassified to conform to the current presentation.
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 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.
The company evaluates segment performance before interest, taxes and costs associated with restructuring activities. Unrealized gains and losses on commodity hedging activities are excluded from segment operating earnings and are recorded in Corporate expenses as these open positions represent hedges of future purchases. Upon closing of the contracts, the realized gain or loss is transferred to segment operating earnings, which allows the segments to reflect the economic effects of the hedge without exposure to quarterly volatility of unrealized gains and losses. Certain manufacturing, warehousing and distribution activities of the segments are integrated in order to maximize efficiency and productivity. As a result, asset information by segment is not discretely maintained for internal reporting or used in evaluating performance.

13





 
 
Three Months Ended
 
Nine Months Ended
 
 
April 27,
2014
 
April 28,
2013
 
April 27,
2014
 
April 28,
2013
Net sales
 
 
 
 
 
 
 
 
U.S. Simple Meals
 
$
672

 
$
627

 
$
2,426

 
$
2,356

Global Baking and Snacking
 
564

 
568

 
1,812

 
1,703

International Simple Meals and Beverages
 
186

 
225

 
592

 
682

U.S. Beverages
 
190

 
198

 
539

 
569

Bolthouse and Foodservice
 
358

 
344

 
1,047

 
1,019

Total
 
$
1,970

 
$
1,962

 
$
6,416

 
$
6,329

 
 
Three Months Ended
 
Nine Months Ended
 
 
April 27,
2014
 
April 28,
2013
 
April 27,
2014
 
April 28,
2013
Earnings before interest and taxes
 
 
 
 
 
 
 
 
U.S. Simple Meals
 
$
175

 
$
156

 
$
600

 
$
621

Global Baking and Snacking
 
68

 
73

 
234

 
232

International Simple Meals and Beverages
 
27

 
28

 
85

 
94

U.S. Beverages
 
29

 
33

 
84

 
100

Bolthouse and Foodservice
 
23

 
27

 
88

 
91

Corporate(1)
 
(29
)
 
(59
)
 
(98
)
 
(205
)
Restructuring charges(2)
 
(1
)
 
(1
)
 
(35
)
 
(31
)
Total
 
$
292

 
$
257

 
$
958

 
$
902

_______________________________________
(1) 
Represents unallocated corporate expenses. A pension settlement charge of $18 associated with a U.S. pension plan was included in the three- and nine-month periods ended April 27, 2014. 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. Restructuring-related costs of $2 were included in the nine-month period ended April 27, 2014. In addition, a loss of $9 on foreign exchange forward contracts related to the sale of the European simple meals business was included in the nine-month period ended April 27, 2014. Restructuring-related costs of $20 and $81 were included in unallocated corporate expenses for the three- and nine-month periods ended April 28, 2013, respectively. Also, acquisition related costs of $10 were included in the nine-month period ended April 28, 2013.
(2) 
See Note 8 for additional information.

The company’s global net sales based on product categories are as follows:
 
 
Three Months Ended
 
Nine Months Ended
 
 
April 27,
2014
 
April 28,
2013
 
April 27,
2014
 
April 28,
2013
Net sales
 
 
 
 
 
 
 
 
Simple Meals
 
$
1,063

 
$
1,040

 
$
3,626

 
$
3,611

Baked Snacks
 
597

 
601

 
1,912

 
1,805

Beverages
 
310

 
321

 
878

 
913

Total
 
$
1,970

 
$
1,962

 
$
6,416

 
$
6,329

Simple Meals include condensed and ready-to-serve soups, broths, sauces, carrot products, refrigerated salad dressings and Plum foods and snacks for babies, toddlers and children. Baked Snacks include cookies, crackers, biscuits, and other baked products.


14





8.
Restructuring Charges
2014 Initiatives
In the second quarter of 2014, 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 110 positions will be eliminated. The company recorded a restructuring charge of $14 ($6 after tax or $.02 per share in earnings from continuing operations attributable to Campbell Soup Company) related to this initiative. The company does not expect additional charges.
A summary of the restructuring activity and related reserve associated with this initiative at April 27, 2014 is as follows:
 
 
 
 
Nine Months Ended
 
 
 
 
 
 
April 27, 2014
 
 
 
 
Accrued
Balance at
July 28, 2013
 
Charges
 
Cash
Payments
 
Accrued
Balance at
April 27, 2014
Severance pay and benefits
 
$
—

 
$
2

 
$
—

 
$
2

Other exit costs (1)
 
 
 
1

 
 
 
 
Asset impairment
 
 
 
11

 
 
 
 
Total charges
 
 
 
$
14

 
 
 
 
_______________________________________
(1)
Includes non-cash costs that are not reflected in the restructuring reserve in the Consolidated Balance Sheet.
These charges are associated with the International Simple Meals and Beverages segment. Segment operating results do not include restructuring charges as segment performance is evaluated excluding such charges.
In the first quarter of 2014, the company implemented initiatives to streamline its salaried workforce in North America and its workforce in the Asia Pacific region. Approximately 250 positions were eliminated. The actions were substantially completed in October 2013. The company recorded a restructuring charge of $20 ($13 after tax or $.04 per share) associated with this initiative for severance and benefit costs. The company does not expect additional charges. The company expects the total pre-tax costs of this initiative to represent cash expenditures, the majority of which will be spent in 2014.
A summary of the restructuring reserve associated with this workforce-related initiative at April 27, 2014 is as follows:
 
 
 
 
Nine Months Ended
 
 
 
 
 
 
April 27, 2014
 
 
 
 
Accrued
Balance at
July 28, 2013
 
Charges
 
Cash
Payments
 
Foreign
Currency
Translation Adjustment
 
Accrued
Balance at
April 27, 2014
Severance pay and benefits
 
$
—

 
$
20

 
$
(9
)
 
$
—

 
$
11

The total pre-tax costs of $20 associated with each segment are as follows: U.S. Simple Meals - $5; Global Baking and Snacking - $9; International Simple Meals and Beverages - $3; U.S. Beverages - $1; Bolthouse and Foodservice - $1; and Corporate - $1. 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:
•
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.

15





•
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 the nine-month period ended April 27, 2014, the company recorded a restructuring charge of $1 related to the 2013 initiatives. In addition, approximately $2 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 the nine-month period ended April 27, 2014 was $2, or $.01 per share. In 2013, the company recorded a restructuring charge of $51. In addition, approximately $91 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, or $.28 per share. Of the amounts recorded in 2013, $31 of restructuring charges were recorded in the nine-month period ended April 28, 2013, and approximately $81 of costs related to these initiatives were recorded 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 the nine-month period ended April 28, 2013 was $71, or $.22 per share. A summary of the pre-tax costs and remaining costs associated with the initiatives is as follows:
 
Total
Program
 
Recognized
as of
April 27, 2014
 
Remaining
Costs to be
Recognized
Severance pay and benefits
$
35

 
$
(35
)
 
$
—

Accelerated depreciation/asset impairment
99

 
(99
)
 
—

Other exit costs
14

 
(11
)
 
3

Total
$
148

 
$
(145
)
 
$
3

Of the aggregate $148 of pre-tax costs, the company expects approximately $46 will be cash expenditures. In addition, the company expects to invest approximately $31 in capital expenditures, primarily to relocate and refurbish a beverage filling and packaging line, and relocate bread production, of which approximately $26 has been invested as of April 27, 2014. The outstanding aspects of the 2013 initiatives are expected to be completed in 2014.
A summary of the restructuring activity and related reserves associated with the 2013 initiatives at April 27, 2014 is as follows:
 
 
 
 
Nine Months Ended
 
 
 
 
 
 
April 27, 2014
 
 
 
 
Accrued
Balance at
July 28, 2013
 
Charges
 
Cash
Payments
 
Accrued
Balance at
April 27, 2014
Severance pay and benefits
 
$
17

 
$
—

 
$
(12
)
 
$
5

Other exit costs (1)
 
 
 
3

 
 
 
 
Total charges
 
 
 
$
3

 
 
 
 
_______________________________________
(1) 
Includes non-cash costs and other exit costs recognized as incurred that are not reflected in the restructuring reserve in the Consolidated Balance Sheet.
A summary of restructuring charges and related costs incurred to date associated with segments is as follows:
 
U.S.
Simple
Meals
 
Global Baking and Snacking
 
International Simple Meals and Beverages
 
U.S.
Beverages
 
Bolthouse and Foodservice
 
Total
Severance pay and benefits
$
19

 
$
2

 
5

 
$
7

 
2

 
$
35

Accelerated depreciation/asset impairment
64

 
10

 
3

 
22

 
—

 
99

Other exit costs
7

 
1

 
1

 
2

 
—

 
11

 
$
90

 
$
13

 
$
9

 
$
31

 
$
2

 
$
145

The company expects to recognize additional pre-tax costs of approximately $3 in the Global Baking and Snacking segment. Segment operating results do not include restructuring charges as segment performance is evaluated excluding such charges.

16





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

Asset impairment/accelerated depreciation
 
23

Other exit costs
 
9

Total
 
$
73

As of January 26, 2014, the 2011 initiatives were substantially completed. Of the aggregate $73 of pre-tax costs, approximately $50 represented cash expenditures, the majority of which was spent in 2012. In addition, the company expects to invest approximately $45 in capital expenditures in connection with the actions, of which approximately $37 has been invested as of April 27, 2014.
A summary of the restructuring activity and related reserves associated with the 2011 initiatives at April 27, 2014 is as follows:
 
 
 
 
Nine Months Ended
 
 
 
 
 
 
April 27, 2014
 
 
 
 
Accrued
Balance at July 28, 2013
 
Charges
 
Cash Payments
 
Foreign  Currency
Translation Adjustment
 
Accrued
Balance at
April 27, 2014
Severance pay and benefits
 
$
3

 
$
—

 
$
(2
)
 
$
—

 
$
1

Other exit costs
 
1

 
—

 
—

 
—

 
1

 
 
$
4

 
$
—

 
$
(2
)
 
$
—

 
$
2

A summary of restructuring charges associated with each segment is as follows:
 
U.S.
Simple
Meals
 
Global
Baking
and
Snacking
 
International
Simple Meals
and
Beverages
 
U.S.
Beverages
 
Bolthouse and Foodservice
 
Corporate
 
Total
Severance pay and benefits
$
10

 
$
14

 
$
11

 
$
3

 
$
1

 
$
2

 
$
41

Asset impairment/accelerated depreciation
20

 
—

 
3

 
—

 
—

 
—

 
23

Other exit costs
2

 
—

 
3

 
—

 
—

 
4

 
9

 
$
32

 
$
14

 
$
17

 
$
3

 
$
1

 
$
6

 
$
73


Segment operating results do not include restructuring charges as segment performance is evaluated excluding such charges.

17






9.
Earnings per Share
For the periods presented in the Consolidated Statements of Earnings, the calculations of basic EPS and EPS assuming dilution vary in that the weighted average shares outstanding assuming dilution include the incremental effect of stock options and other share-based payment awards, except when such effect would be antidilutive. There were no antidilutive stock options for the three- and nine-month periods ended April 27, 2014 and April 28, 2013.
10.
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. In August 2013, the company and joint venture partner contributed additional cash of $7 and $5, respectively. 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 the three-month period ended January 26, 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. See also Note 8.
The company 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 the nine-month periods ended April 27, 2014 or April 28, 2013.
The noncontrolling interests in these entities were included in Total equity in the Consolidated Balance Sheets and Consolidated Statements of Equity.
11.
Pension and Postretirement Benefits
The company sponsors certain defined benefit pension plans and postretirement benefit plans for employees. Components of benefit expense were as follows:
 
Three Months Ended
 
Nine Months Ended
 
Pension
 
Postretirement
 
Pension
 
Postretirement
 
April 27,
2014
 
April 28,
2013
 
April 27,
2014
 
April 28,
2013
 
April 27,
2014
 
April 28,
2013
 
April 27,
2014
 
April 28,
2013
Service cost
$
11

 
$
15

 
$
1

 
$
1

 
$
32

 
$
43

 
$
2

 
$
3

Interest cost
29

 
27

 
4

 
3

 
87

 
81

 
13

 
11

Expected return on plan assets
(44
)
 
(44
)
 
—

 
—

 
(133
)
 
(133
)
 
—

 
—

Amortization of prior service credit
(1
)
 
—

 
—

 
—

 
(1
)
 
(1
)
 
(1
)
 
(1
)
Recognized net actuarial loss
20

 
27

 
2

 
4

 
58

 
81

 
9

 
11

Curtailment loss
—

 
—

 
—

 
—

 
—

 
3

 
—

 
—

Settlement charge
18

 
—

 
—

 
—

 
18

 
—

 
—

 
—