Filed Pursuant to Rule 424(b)(2)
Registration No. 333-219217

 

This preliminary prospectus supplement and the accompanying prospectus relate to an effective registration statement under the Securities Act of 1933, as amended, but are not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 12, 2018

Preliminary Prospectus Supplement
(To Prospectus Dated July 10, 2017)

$                                      

 

Campbell Soup Company (“Campbell” or “we”) is offering floating rate notes due 2020 (the “2020 floating rate notes”), floating rate notes due 2021 (the “2021 floating rate notes” and, together with the 2020 floating rate notes, the “floating rate notes”),     % notes due 2021 (the “2021 notes”),     % notes due 2023 (the “2023 notes”),        % notes due 2025 (the “2025 notes”),       % notes due 2028 (the “2028 notes”) and       % notes due 2048 (the “2048 notes” and, together with the 2021 notes, the 2023 notes, the 2025 notes and the 2028 notes, the “fixed rate notes”), in each case in the aggregate principal amount as set forth above.  The floating rate notes and the fixed rate notes are collectively referred to herein as the “notes.” 

 The 2020 floating rate notes will bear interest at a floating rate equal to three-month LIBOR plus      basis points per annum and the 2021 floating rate notes will bear interest at a floating rate equal to three-month LIBOR plus      basis points per annum. Interest on the floating rate notes of each series is payable quarterly on each      ,     ,       and       of each year, commencing        , 2018. 

Interest will accrue on the fixed rate notes of each series from                , 2018 and will be payable semi-annually on each                     and                 , commencing                   , 2018. 

On December 18, 2017, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among us, Twist Merger Sub, Inc., an indirect, wholly-owned subsidiary of ours (“Merger Sub”), and Snyder’s-Lance, Inc. (“Snyder’s-Lance”) pursuant to which, among other things and subject to the satisfaction or waiver of specified conditions, Merger Sub will merge with and into Snyder’s-Lance (the “Merger”), with Snyder’s-Lance surviving the Merger as a wholly-owned subsidiary of ours.  The net proceeds from the offering of the notes, in part, will be used to fund a portion of the cash consideration and other amounts payable under the Merger Agreement, and to pay fees and expenses associated with the foregoing. We intend to use any remaining proceeds for general corporate purposes, which may include the repayment of commercial paper.  This offering is not contingent on the consummation of the Snyder’s-Lance acquisition. 

If we do not complete the Snyder’s-Lance acquisition on or before September 18, 2018 (the “termination date” of the Merger Agreement, referred to herein as the “special redemption deadline”), or if, prior to the special redemption deadline, the Merger Agreement is terminated, we must redeem all of the outstanding notes at a special redemption price of 101% of the aggregate principal amount thereof, plus accrued and unpaid interest from and including the date of initial issuance (or the most recent interest payment date on which interest was paid) to but excluding the special redemption date. We refer to such redemption as a “Special Redemption.” There is no escrow account for or security interest in the proceeds of this offering for the benefit of holders of the notes. See “Description of the Notes—Special Mandatory Redemption of the Notes.” In addition to this Special Redemption provision, we may redeem the fixed rate notes in whole or in part at any time at the respective redemption prices described under “Description of the Notes—Optional Redemption of the Fixed Rate Notes.” If a Change of Control Triggering Event occurs as described in this prospectus supplement, unless we have exercised our right of redemption, we will be required to offer to purchase the notes at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the purchase date. See “Description of the Notes—Offer to Purchase Upon a Change of Control Triggering Event.” 

The notes will be our unsecured senior obligations and will rank equally with all of our other existing and future unsecured senior indebtedness.  The notes will not be listed on any securities exchange.  Currently, there is no public market for the notes.

Investing in the notes involves risk. See “Risk Factors” beginning on page S-13.

 

 

(1)Plus accrued interest, if any, from                , 2018 if settlement occurs after that date.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or determined that this prospectus supplement or the accompanying prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the notes to investors through the book-entry delivery systems of The Depository Trust Company, Euroclear Bank S.A./N.V., as operator of the Euroclear System or Clearstream Banking, société anonyme, as the case may be, on or about , 2018 against payment thereafter in immediately available funds.

 

Joint Book-Running Managers

No person is authorized to give any information or to make any representations other than those contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free writing prospectus filed by us with the Securities and Exchange Commission (the “SEC”).  We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you.  This prospectus supplement, the accompanying prospectus and any such free writing prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities described in this prospectus supplement or an offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful.  Neither the delivery of this prospectus supplement, the accompanying prospectus or any such free writing prospectus, nor any sale made hereunder and thereunder shall under any circumstances, create any implication that there has been no change in the affairs of Campbell Soup Company since the date of this prospectus supplement, the accompanying prospectus or any such free writing prospectus, or that the information contained or incorporated by reference herein or therein is correct as of any time subsequent to the date of such information.

TABLE OF CONTENTS

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Prospectus Supplement

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Prospectus

 

ABOUT THIS PROSPECTUS SUPPLEMENT

This prospectus supplement contains the terms of this offering of notes.  This prospectus supplement, or the information incorporated by reference in this prospectus supplement, may add, update or change information in the accompanying prospectus.  If information in this prospectus supplement, or the information incorporated by reference in this prospectus supplement, is inconsistent with the accompanying prospectus, this prospectus supplement, or the information incorporated by reference in this prospectus supplement, will apply and will supersede that information in the accompanying prospectus.

It is important for you to read and consider all information contained in this prospectus supplement and the accompanying prospectus in making your investment decision.  You should also read and consider the information in the documents we have referred you to in “Where You Can Find More Information” below.

In this prospectus supplement, unless otherwise stated or the context otherwise requires, the terms “we,” “us” and “our” refer to Campbell Soup Company and our consolidated subsidiaries.  Unless we specifically state otherwise, the information contained in this prospectus supplement, the accompanying prospectus and any free writing prospectus filed by us with the SEC relating to this offering does not give effect to the Merger or the issuance of the notes.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus supplement contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements reflect our current expectations regarding our future results of operations, economic performance, financial condition and achievements.  These forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “will,” “goal,” and similar expressions.  One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts.  These statements reflect our current plans and expectations, and our assumptions regarding the combined company after the completion of the Merger, our business, industry and other future conditions, and are based on information currently available to us. They rely on several assumptions regarding future events and estimates which could be inaccurate and which are inherently subject to risks and uncertainties.

Forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.  Our actual results may differ materially from those contemplated by the forward-looking statements.  The following important factors could affect our actual results and could cause such results to vary materially from those in the forward-looking statements made by or on behalf of us: changes in consumer demand for our products and favorable perception of our brands; the risks associated with trade and consumer acceptance of product improvements, shelving initiatives, new products and pricing and promotional strategies; the impact of strong competitive responses to our efforts to leverage our brand power with product innovation, promotional programs and new advertising; changing inventory management practices by certain of our key customers; a changing customer landscape, with value and e-commerce retailers expanding their market presence, while certain of our key customers continue to increase their significance to our business; our ability to realize projected cost savings and benefits from our efficiency and/or restructuring initiatives; our ability to manage changes to our organizational structure and/or business processes, including our selling, distribution, manufacturing and information management systems or processes; product quality and safety issues, including recalls and product liabilities; the ability to complete and to realize the projected benefits of acquisitions, divestitures and other business portfolio changes; the conditions to the completion of the Snyder’s-Lance acquisition, including obtaining Snyder’s-Lance shareholder approval, may not be satisfied; long-term financing for the Snyder’s-Lance acquisition may not be available on favorable terms, or at all; closing of the Snyder’s-Lance acquisition may not occur or may be delayed, either as a result of litigation related to the acquisition or otherwise; we may be unable to achieve the anticipated benefits of the Snyder’s-Lance acquisition; completing the Snyder’s-Lance acquisition may distract our management from other important matters; the risk our pro forma combined financial data differs materially from our actual financial position after the Merger; disruptions to our supply chain, including fluctuations in the supply of and inflation in energy and raw and packaging materials cost; the uncertainties of litigation and regulatory actions against us; the possible disruption to the independent contractor distribution models used by certain of our businesses, including as a result of litigation or regulatory actions affecting their independent contractor classification; the impact of non-U.S. operations, including export and import restrictions, public corruption and compliance with foreign laws and regulations; impairment to goodwill or other intangible assets; our ability to protect our intellectual property rights; increased liabilities and costs related to

our defined benefit pension plans; a material failure in or breach of our information technology systems; our ability to attract and retain key talent; changes in currency exchange rates, tax rates, interest rates, debt and equity markets, inflation rates, economic conditions, law, regulation and other external factors; unforeseen business disruptions in one or more of our markets due to political instability, civil disobedience, terrorism, armed hostilities, extreme weather conditions, natural disasters or other calamities, and the other factors described under “Risk Factors” in this prospectus supplement and in our most recent Annual Report on Form 10-K and subsequent SEC filings.  The discussion of uncertainties is by no means exhaustive but is designed to highlight important factors that may impact our outlook. We disclaim any obligation or intent to update forward-looking statements to reflect new information, events or circumstances after the date they are made.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC.  You may read and copy any document that we file at the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549.  You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  In addition, the SEC maintains an Internet site at http://www.sec.gov, from which interested persons can electronically access our public filings.  You may also electronically access these documents through our website, www.campbellsoupcompany.com, under the “Investor Center—Financial Information—SEC Filings” caption.  We are not incorporating the contents of the website into this prospectus supplement.

The SEC allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents.  The information incorporated by reference is an important part of this prospectus supplement, and information that we file later with the SEC will automatically update and supersede this information.  We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with SEC rules), on or after the date of this prospectus supplement until we sell all of the securities covered by this prospectus supplement:

•Our Annual Report on Form 10-K for the fiscal year ended July 30, 2017;

•Our Quarterly Reports on Form 10-Q for the quarters ended October 29, 2017 and January 28, 2018;

•Our Definitive Proxy Statement on Schedule 14A filed with the SEC on October 6, 2017; and

•Our Current Reports on Form 8-K filed with the SEC on September 26, 2017, October 13, 2017, November 17, 2017, December 18, 2017, December 29, 2017, January 24, 2018 and March 5, 2018.

You may request a copy of these filings, at no cost, by writing to or telephoning us at the following address:

Corporate Secretary
Campbell Soup Company
One Campbell Place
Camden, New Jersey 08103-1799
(856) 342-6122

 

SUMMARY

This summary highlights selected information about our company and the offering and may not contain all of the information that is important to you.  To better understand this offering, you should read the entire prospectus supplement and the accompanying prospectus carefully, as well as those additional documents to which we refer you.  See “Where You Can Find More Information.”

Campbell Soup Company

We are a manufacturer and marketer of high-quality, branded food and beverage products.  We incorporated as a business organization under the laws of New Jersey on November 23, 1922; however, through predecessor organizations, our beginnings in the food business can be traced back to 1869.

We manage our businesses in three segments focused mainly on product categories.  The segments are:

•The Americas Simple Meals and Beverages segment, which includes the retail and food service businesses in the U.S. and Canada.  The 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; Plum food and snacks; V8 juices and beverages; and Campbell’s tomato juice; and as of December 12, 2017, Pacific Foods broth, soups, non-dairy beverages and other simple meals;

•The Global Biscuits and Snacks segment, which includes:  Pepperidge Farm cookies, crackers, bakery and frozen products in U.S. retail; Arnott’s biscuits in Australia and Asia Pacific; and Kelsen cookies globally.  The segment also includes the simple meals and shelf-stable beverages business in Australia and Asia Pacific, and beginning in fiscal 2018, the business in Latin America; and

•The Campbell Fresh segment, which includes:  Bolthouse Farms fresh carrots, carrot ingredients, refrigerated beverages and refrigerated salad dressings; Garden Fresh Gourmet salsa, hummus, dips and tortilla chips; and the U.S. refrigerated soup business.

Pending Acquisition of Snyder’s-Lance

On December 18, 2017, we entered into the Merger Agreement, by and among, us, Merger Sub, and Snyder’s-Lance, pursuant to which, among other things and subject to the satisfaction or waiver of specified conditions, the Merger will be consummated, with Snyder’s-Lance surviving the Merger as a wholly-owned subsidiary of ours.  Pursuant to the Merger Agreement, at the effective time of the Merger, each of Snyder’s-Lance’s issued and outstanding shares of common stock, par value $0.83-1/3 per share (other than any shares held directly by either us or Merger Sub or shares owned by any direct or indirect subsidiary of Snyder’s-Lance) will be cancelled and extinguished and converted into the right to receive $50.00 in cash, without interest, less any required withholding taxes. The total consideration and other amounts payable by us under the terms of the Merger Agreement, including approximately $1.1 billion of outstanding indebtedness of Snyder’s-Lance payable in connection with the consummation of the acquisition, will be approximately $6.1 billion.

Each party’s obligation to consummate the Merger is subject to certain conditions, including, among others: (i) obtaining the affirmative vote of the holders of 75% of Snyder’s-Lance’s outstanding shares of common stock to approve the Merger Agreement and consummate the Merger; (ii) expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”); and (iii) the absence of any order or legal requirement issued or enacted by any court or other governmental authority, which is in effect and prevents the consummation of the Merger. The applicable waiting periods under the HSR Act have terminated. The obligation of Campbell and Snyder’s-Lance is also subject to customary conditions to close relating to the accuracy of the other party’s representations and warranties and the performance, in all material respects, by the other party of its obligations under the Merger Agreement.  We expect that the acquisition will close by the end of the first quarter of calendar 2018, although there can be no assurance that the transaction will occur within the expected time period or at all.

We expect to fund the Merger consideration and related fees and expenses with new debt as described under “—Financing Transactions” below. The net proceeds from this offering of the notes, in part, will be used to fund a portion of the cash consideration and other amounts payable under the Merger Agreement, and to pay fees and expenses associated with the foregoing.  We intend to use any remaining proceeds, for general corporate purposes, which may include the repayment of commercial paper.  This offering is not contingent on the consummation of the Snyder’s-Lance acquisition.

Snyder’s-Lance, a North Carolina corporation incorporated in 1926, is a branded snack food company with operations in North America and Europe.  Snyder’s-Lance’s brands include Snyder’s of Hanover and Lance, as well as Cape Cod kettle cooked chips and Kettle Brand potato chips.  In addition, Snyder’s-Lance other brands include Snack Factory, Pretzel Crisps, Pop Secret and Late July, a maker of organic and non-genetically modified organism tortilla chips.

We believe that the Merger will provide us with several strategic and financial benefits including:

•strengthening our core and expanding our macro snacking business, particularly in better-for-you snacks;

•complementing our existing Pepperidge Farm business;

•resulting in a more diversified and balanced portfolio with leading differentiated brands;

•advancing access to faster-growing distribution channels; and

•providing significant value creation through synergies and operational excellence.

We caution you that we may not realize the anticipated benefits of the acquisition. See “Risk Factors—Risks Relating to the Merger.” Additionally, Snyder’s-Lance business is subject to risks, including those described under “Risk Factors—Selected Snyder’s-Lance Risk Factors.”

Financing Transactions

We intend to fund the cash consideration and other amounts payable under the terms of the Merger Agreement including the repayment of approximately $1.1 billion of outstanding indebtedness of Snyder’s-Lance in connection with the consummation of the acquisition, and to pay fees and expenses associated with the foregoing, with a portion of the net proceeds from the issuance of the notes offered hereby together with the proceeds from borrowings under our new term loan credit agreement described below.  We intend to use any remaining proceeds from the issuance of the notes offered hereby for general corporate purposes, including commercial paper repayment.

On December 29, 2017, we entered into a $1.2 billion three-year term loan credit agreement (the “New Credit Agreement”), which allows us to make a single draw on the closing date of the Merger of up to an aggregate principal amount of $1.2 billion with Credit Suisse AG, Cayman Islands Branch, as administrative agent, and the other lenders named therein. The proceeds of the loans under the New Credit Agreement can only be used in connection with the Snyder’s-Lance acquisition and to pay fees and expenses in connection therewith and with respect to the New Credit Agreement. Based on current expectations, we intend to make a single draw of $900 million pursuant to the New Credit Agreement in connection with consummation of the Snyder’s-Lance acquisition. However, our expectations may change and we may draw the entire facility if necessary to fund the acquisition of Snyder’s-Lance.

The consummation of the Merger, the issuance of the notes offered hereby and the use of proceeds therefrom and our anticipated borrowings under the New Credit Agreement in connection with the Snyder’s-Lance acquisition are herein referred to as the “Transactions.”  This offering is not conditioned on the completion of the Merger or such borrowings under the New Credit Agreement.  However, if we do not consummate the Merger on or prior to the special redemption deadline, or, if prior to such date, the Merger Agreement is terminated, we must redeem all of the outstanding notes at a special redemption price of 101% of the aggregate principal amount thereof, plus accrued and unpaid interest from and including the date of initial issuance (or the most recent payment date on which interest was paid) to but excluding the special redemption date. See “Description of the Notes—Special Mandatory Redemption of the Notes.”

In connection with entering into the Merger Agreement, on December 18, 2017, we entered into a Bridge Commitment Letter, by and among Campbell, Credit Suisse Securities (USA) LLC and Credit Suisse AG (the “Debt Commitment Letter”). Pursuant to the Debt Commitment Letter, the lenders party thereto have committed to provide a 364-day senior unsecured bridge term loan credit facility in an aggregate principal amount of up to $6.2 billion. The commitments under the Debt Commitment Letter will expire on 11:59 p.m., New York City time, September 18, 2018. Any loan under the Debt Commitment Letter would bear interest at (i) adjusted LIBOR plus a margin ranging from 1.000% to 2.250% or (ii) the adjusted base rate plus the greater of (x) 0.000% and (y) the applicable adjusted LIBOR margin minus 1.000%. The initial maturity date for the bridge facility is 364 days after the drawdown date.  The commitments under the Debt Commitment Letter were permanently reduced by $1.2 billion (to an aggregate principal amount of $5.0 billion) on December 29, 2017 when we entered into the New Credit Agreement. The commitments under the Debt Commitment Letter will be further reduced by the net cash proceeds of the notes offered hereby.

 

Corporate Information

Campbell Soup Company was incorporated in New Jersey in 1922.  Our principal executive offices are located at One Campbell Place, Camden, New Jersey 08103, and our telephone number is (800) 257-8443.  Our website is www.campbellsoupcompany.com. The reference to our website address does not constitute incorporation by reference of the information contained on the website, which should not be considered part of this prospectus supplement.  Our common stock is listed on the New York Stock Exchange under the symbol “CPB.”

 

THE OFFERING

The following summary contains basic information about the notes and is not intended to be complete.  It does not contain all of the information that is important to you.  For a more complete understanding of the notes, please refer to the section of this prospectus supplement entitled “Description of the Notes” and the section of the accompanying prospectus entitled “Description of Debt Securities.”

 

Summary Historical Consolidated and Unaudited Pro Forma Combined Financial Information of Campbell

In the tables below, we provide you with summary historical consolidated and unaudited pro forma combined financial information of Campbell.  The summary historical consolidated statement of earnings information for the fiscal years ended 2017, 2016 and 2015 and the summary historical consolidated balance sheet information as of July 30, 2017 and July 31, 2016 are derived from our historical consolidated financial statements incorporated by reference into this prospectus supplement.  The historical consolidated balance sheet information as of August 2, 2015 is derived from our historical consolidated financial information not incorporated by reference in this prospectus supplement. Historical results are not necessarily indicative of the results that may be expected in the future, and the results for the six months ended January 28, 2018 are not necessarily indicative of the results that may be expected for the full fiscal year or any other period.

The summary unaudited pro forma combined financial information is derived from the unaudited pro forma combined financial statements included in this prospectus supplement.  The summary unaudited pro forma combined statement of earnings information gives effect to the Transactions as if they occurred on August 1, 2016, the first day of our fiscal 2017.  The summary unaudited pro forma combined balance sheet information gives effect to the Transactions as if they occurred on January 28, 2018, the end of the second quarter of our fiscal 2018.  The summary unaudited pro forma combined financial information presented should be read together with the unaudited pro forma combined financial statements and the related notes thereto included in this prospectus supplement.

The summary unaudited pro forma combined financial information is provided for informational purposes only.  The summary unaudited pro forma combined statement of earnings information is not necessarily indicative of operating results that would have been achieved had the Transactions occurred on August 1, 2016 and does not intend to project our future financial results after the Transactions.  The summary unaudited pro forma combined balance sheet information does not purport to reflect what our financial condition would have been had the Transactions occurred on January 28, 2018 or for any future or historical period.  The summary unaudited pro forma combined statement of earnings and balance sheet information is based on certain assumptions, which management believes are reasonable and do not reflect the cost of any integration activities or the benefits from the Merger and synergies that may be derived from any integration activities.

You should read our summary historical consolidated and unaudited pro forma combined financial information together with the unaudited pro forma combined financial statements and the related notes thereto included in this prospectus supplement, and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our and Snyder’s-Lance’s historical consolidated and audited and unaudited financial statements and the related notes thereto, in each case, incorporated by reference into this prospectus supplement.  See “Where You Can Find More Information” in this prospectus supplement.

 

 

Summary Historical Consolidated Financial Information of Snyder’s-Lance

In the tables below, we provide you with summary historical consolidated financial information of Snyder’s-Lance. Snyder’s-Lance’s summary historical consolidated income statement data for the fiscal years ended December 30, 2017, December 31, 2016 and January 2, 2016 and summary historical consolidated balance sheet data as of December 30, 2017 and December 31, 2016 are derived from the historical consolidated financial statements of Snyder’s-Lance incorporated by reference into this prospectus supplement.  Snyder’s-Lance’s historical consolidated balance sheet data as of January 2, 2016 is derived from historical consolidated financial information of Snyder’s-Lance not incorporated by reference in this prospectus supplement.  You should read the summary historical consolidated financial information of Snyder’s-Lance together with Snyder’s-Lance’s historical consolidated financial statements and the related notes thereto incorporated by reference into this prospectus supplement.  See “Where You Can Find More Information” in this prospectus supplement. Historical results are not necessarily indicative of the results that may be expected in the future.

 

Unaudited Non-GAAP Pro Forma Combined Financial Information of Campbell

We use (and incorporate by reference) certain non-GAAP financial measures as defined by the SEC in this prospectus supplement and the accompanying prospectus. These non-GAAP financial measures are measures of performance not defined by accounting principles generally accepted in the United States and should be considered in addition to, not in lieu of, measures reported in accordance with generally accepted accounting principles in the U.S. (“GAAP”). We believe that also presenting certain non-GAAP financial measures provides additional information to facilitate comparison of our historical operating results and trends in our underlying operating results, and provides transparency on how we evaluate our business. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating our performance.

Items Impacting Earnings

We believe that financial information excluding certain items that are not considered to be part of the ongoing operating results, such as those listed below, improves the comparability of year-to-year results. Consequently, we believe that investors may be able to better understand our results excluding these items.

Set forth below is a reconciliation of our and Snyder’s-Lance’s unaudited pro forma combined financial information, presented in accordance with GAAP and Article 11 of Regulation S-X, to adjusted pro forma combined financial information excluding certain items, for the six months ended January 28, 2018 and the year ended July 30, 2017.

This information should be read in conjunction with the unaudited pro forma combined financial information together with the unaudited pro forma combined financial statements and the related notes thereto included elsewhere in this prospectus supplement under the caption “Unaudited Pro Forma Combined Financial Information”. The unaudited pro forma combined statements of earnings give effect to the Transactions as if the Transactions occurred on August 1, 2016 for statement of earnings purposes.

 

 

The following items impacted earnings:

(1)Reflects gains associated with mark-to-market adjustments on our defined benefit pension and postretirement plans.

(2)Reflects the following:

a.Costs associated with our initiatives to reduce costs and to streamline the organizational structure.

b.Costs associated with Snyder’s-Lance’s transformation initiative.

(3)Reflects an adjustment to exclude the one-time net income tax benefit recorded due to the enactment of the Tax Cuts and Jobs Act, which was signed into law in December 2017.

(4)Reflects the following:

a.Our non-cash impairment charges related to the intangible assets of the Bolthouse Farms carrot and carrot ingredients reporting unit and the Garden Fresh Gourmet reporting unit.

b.Snyder’s-Lance’s non-cash impairment charges related to its European reporting unit goodwill, the KETTLE Chips trademark in the United Kingdom and the Pop Secret trademark.

(5)Reflects the transaction and integration costs associated with the acquisitions by Snyder’s-Lance of Diamond Foods, Inc. and Metcalfe’s Skinny Limited. The expenses mainly consist of professional fees, severance and retention costs.

(6)Reflects Snyder’s-Lance costs associated with the relocation of Emerald production from Stockton, CA to Charlotte, NC.

(7)Reflects primarily Snyder’s-Lance proceeds from class action insurance settlement, tax restructuring expense and reductions of accruals associated with certain litigation.

(8)Reflects an adjustment to exclude the income tax benefit primarily related to the sale of intercompany notes receivable to a financial institution, which resulted in the recognition of foreign exchange losses on the notes for tax purposes and the reduction of interest expense related to premiums and fees received on the sale of the notes.

 

RISK FACTORS

An investment in the notes involves various risks. In making an investment decision, you should carefully consider the risks and uncertainties described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended July 30, 2017 and our Quarterly Report on Form 10-Q for the period ended January 28, 2018 and subsequent SEC filings as well as the risk factors below.  In addition, the following risks and uncertainties could materially adversely affect our business, financial condition and results of operations.  Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations and financial condition.

Risks Relating to the Merger

The Snyder’s-Lance acquisition is subject to certain closing conditions that, if not satisfied or waived, could delay closing or prevent it from occurring at all.

The Snyder’s-Lance acquisition is subject to closing conditions, including approval of the transaction by the affirmative vote of the holders of at least 75% of the outstanding shares of the common stock of Snyder’s-Lance.  If any condition to the acquisition is not satisfied or waived, the completion of the acquisition could be significantly delayed, or may not occur at all.  We and Snyder’s-Lance may also terminate the Merger Agreement under certain circumstances, and we may be required to pay a termination fee of $198.6 million. For additional information, see our Form 8-K filed with the SEC on December 18, 2017. There are also several pending lawsuits seeking, among other things, to enjoin the acquisition. See Note 16 to the Consolidated Financial Statements in our Quarterly Report on Form 10-Q for the period ended January 28, 2018 for additional information on these lawsuits. If we do not complete the acquisition, or if the closing is significantly delayed, our business or financial results may be adversely affected.

The anticipated benefits of acquiring Snyder’s-Lance may not be fully realized.

We expect that the acquisition of Snyder’s-Lance will result in various benefits including, among other things, cost savings, cost synergies, a strengthened market position and revenue opportunities.  Achieving these anticipated benefits is subject to uncertainties, including whether we integrate in an efficient and effective manner, and general competitive factors in the marketplace.  Integrating Snyder’s-Lance will be a complex, time-consuming and expensive process.  We may experience unanticipated difficulties or expenses related to the integration, including:

•diversion of management’s attention from ongoing business concerns;

•managing a larger combined business;

•finalizing the integration of Snyder’s-Lance’s past acquisitions to the extent not yet completed;

•perceived adverse changes in product offerings to consumers, whether or not these changes actually occur;

•assumption of unknown risks and liabilities;

•the retention of key suppliers and customers of Snyder’s-Lance;

•attracting new business and operational relationships;

•retaining and integrating key employees and maintaining employee morale; and

•unforeseen expenses or delays.

After the acquisition, we may seek to combine certain operations, functions, systems and processes, which we may be unsuccessful or delayed in implementing.  While we have assumed that a certain level of expense would be incurred in connection with the Snyder’s-Lance acquisition, transaction costs, acquisition-related costs, costs for synergies and integration costs may be more than anticipated. In addition, there are many factors beyond our control and the control of Snyder’s-Lance that could affect the total amount or the timing of these expenses. Although we expect that the elimination of duplicative costs and realization of other efficiencies related to the integration of the businesses will offset incremental costs over time, any net benefit may not be achieved in the near term or at all.  The failure to effectively address any of these risks, or any other risks related to the integration of the Snyder’s-Lance acquisition, may adversely affect our business or financial results.

We will incur substantial indebtedness to finance the acquisition of Snyder’s-Lance.

In connection with the closing of the acquisition of Snyder’s-Lance and the payoff of Snyder’s-Lance indebtedness, we expect to incur approximately $6.2 billion of indebtedness through a combination of senior unsecured notes and senior unsecured term loans. This substantial level of indebtedness may have important consequences to our business, including, but not limited to:

•increasing our debt service obligations, making it more difficult for us to satisfy our obligations;

•increasing our exposure to fluctuations in interest rates;

•subjecting us to financial and other covenants, the non-compliance with which could result in an event of default;

•increasing our vulnerability to, and reducing our flexibility to respond to, general adverse economic and industry conditions;

•limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, including undertaking significant capital projects;

•placing us at a competitive disadvantage as compared to our competitors, to the extent that they are not as highly leveraged; and

•restricting us from pursuing certain business opportunities, including other acquisitions.

In addition, we regularly access the commercial paper markets for working capital needs and other general corporate purposes. We expect our credit ratings to be downgraded following our acquisition of Snyder’s-Lance. A downgrade in our credit ratings may increase our borrowing costs and adversely affect our ability to issue commercial paper. If our credit ratings are further downgraded or put on watch for a potential downgrade beyond what we expect in connection with the acquisition, we may not be able to sell additional debt securities or borrow money in the amounts and on the terms that might be available if our credit ratings were maintained. Disruptions in the commercial paper market or other effects of volatile economic conditions on the credit markets may also reduce the amount of commercial paper that we can issue and raise our borrowing costs for both short- and long-term debt offerings. There can be no assurance that we will have access to the capital markets on terms we find acceptable. Limitations on our ability to access the capital markets, a reduction in our liquidity or an increase in our borrowing costs may adversely affect our business or financial results.

Both Snyder’s-Lance’s and our financial information is inherently subject to uncertainties, our unaudited pro forma combined financial data included and incorporated by reference into this prospectus supplement is preliminary. Our actual financial position and operations after the Merger may differ materially from these estimates and the unaudited pro forma combined financial data included and incorporated by reference in this prospectus supplement.

Our unaudited pro forma combined financial statements included and incorporated by reference in this prospectus supplement are presented for illustrative purposes only, contain a variety of adjustments, assumptions and preliminary estimates and are not necessarily indicative of what our actual financial position or results of operations would have been had the Merger been completed on the dates indicated.  Our actual results and financial position after the Merger may differ materially and adversely from the unaudited pro forma combined financial data included and incorporated by reference in this prospectus supplement.

The unaudited pro forma financial information has been derived from the audited and unaudited historical financial statements of us and Snyder’s-Lance, and reflects assumptions and adjustments that are based upon preliminary estimates and our successful completion of the Merger and this notes offering.  The assets and liabilities of Snyder’s-Lance have been measured at fair value based on various preliminary estimates using assumptions that our management believes are reasonable utilizing information currently available.  The process for estimating the fair value of acquired assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates.  These estimates may be revised as additional information becomes available and as additional analyses are performed.  Accordingly, the final acquisition accounting adjustments may differ materially

from the pro forma adjustments reflected herein.  In addition, the assumptions used in preparing the unaudited pro forma financial information, including assumptions as to the successful completion of the Merger and this notes offering may not prove to be accurate, and other factors may adversely affect our financial condition or results of operations following the closing of the Snyder’s-Lance acquisition and negatively impact the price of our securities, including the notes.

We may amend the Merger Agreement in a manner that may be adverse to holders of the notes.

The senior indenture governing the notes does not restrict Snyder’s-Lance and us from amending the Merger Agreement, and any such amendment could be materially adverse to the interests of holders of the notes. Amendments will not be subject to approval of the holders of the notes and will not require us to redeem your notes.

Risks Relating to the Notes and the Offering

The notes will be effectively subordinated to any secured debt we may incur and to the debt of our subsidiaries, which may limit your recovery.

The notes are our unsecured obligations, and will rank equally in right of payment with all of our other existing and future unsecured, senior obligations and are structurally subordinated to the existing and future indebtedness and other liabilities of our subsidiaries.  The notes are not secured by any of our assets, and will not be secured by the assets of Snyder’s-Lance.  Any future claims of secured lenders with respect to assets securing their loans will be prior to any claim of the holders of the notes with respect to those assets.  At January 28, 2018, we did not have any secured debt outstanding.

Our subsidiaries are separate and distinct legal entities.  Our subsidiaries do not guarantee the notes and will have no obligation to pay any amounts due pursuant to the notes or otherwise to make any funds available to us to repay our obligations, whether by dividends, loans or other payments.  The notes are structurally subordinated to indebtedness and other liabilities of our subsidiaries.  Our rights to receive the assets of any subsidiary upon its liquidation or reorganization, and the ability of holders of the notes to benefit indirectly therefrom, will be effectively subordinated to the claims of creditors of that subsidiary, including trade creditors.  Our pro forma indebtedness as of January 28, 2018, after giving effect to the Transactions, would be approximately $10.1 billion, approximately $501 million of which would be subsidiary indebtedness that is structurally senior to the notes.

There is no established public trading market for the notes.

Each series of notes will constitute a new issue of securities with no established trading market.  If a trading market does not develop or is not maintained, holders of a series of notes may find it difficult or impossible to resell their notes.  If a trading market were to develop, the notes of a series may trade at prices that are higher or lower than their initial offering price, depending on many factors, including prevailing interest rates, our operating results and financial condition and the market for similar securities.  The underwriters are not obligated to make a market in any series of notes, and if they do so they may discontinue any market-making activity at any time without notice.  Accordingly, there can be no assurance regarding any future development of a trading market for any series of notes or the ability of holders of the notes to sell their notes at all or the price at which such holders may be able to sell their notes.

Changes in our credit ratings or the financial and credit markets could adversely affect the market price of the notes.

The market price of the notes will be based on a number of factors, including:

•our ratings with major credit rating agencies, including with respect to each series of notes;

•the prevailing interest rates being paid by companies similar to us;

•our operating results, financial condition, financial performance and future prospects; and

•the overall condition of the financial and credit markets.

Credit rating agencies continually review their ratings for the companies that they follow, including us, and revise those ratings as warranted.  The credit rating agencies also evaluate the food and beverage industry as a whole and may change their credit rating for us based on their overall view of our businesses and the industry. We expect our credit ratings to be downgraded following our acquisition of Snyder’s-Lance. A negative change in our credit ratings could have an adverse effect on the price of the notes. In addition, the condition of the financial and credit markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future.  In the past, there have been significant disruptions in the global economy, including volatile credit and capital market conditions.  Fluctuations in these factors or a worsening of market conditions could have an adverse effect on the price of the notes. In particular, the U.S. Federal Reserve or other central banks may raise interest rates or expectations regarding an interest rate increase could change.  Increases in prevailing interest rates or interest rate expectations could significantly affect the price of the notes.

Despite our current debt levels and the indebtedness we expect to incur in connection with the Merger, we may still incur more debt.

The notes and the senior indenture under which the notes will be issued do not place any limitation on the amount of debt that may be incurred by us. Our incurrence of additional debt may have important consequences for you as a holder of the notes, including making it more difficult for us to satisfy our obligations with respect to the notes, a loss in the market value of your notes and a risk that the credit rating of the notes is lowered or withdrawn.

There are limited covenants in the senior indenture governing the notes.

The senior indenture governing the notes contains limited covenants, including those restricting our ability and certain of our subsidiaries’ ability to incur certain debt secured by mortgages, pledges or liens, engage in sale/leaseback transactions or merge or consolidate with another entity.  The limitations on incurring debt secured by mortgages, pledges or liens and sale/leaseback transactions contain certain exceptions.  The covenants in the senior indenture do not limit the amount of additional debt we may incur and do not require us to maintain any financial ratios or specific levels of net worth, revenue, income, cash flows or liquidity.  See “Description of Debt Securities” in the accompanying prospectus.  In light of these exceptions, holders of the notes may be effectively subordinated to any new debt we may incur.

Upon the occurrence of a Special Redemption, we must redeem all of the outstanding aggregate principal amount of the notes. If we are required to redeem such notes at such time, you may not obtain your expected return on the notes.

Upon the occurrence of a Special R