Unaudited Pro Forma Combined Financial Information

Exhibit 99.2

As previously announced, on December 18, 2017, Xxxxxxxx Soup Company (Campbell) entered into an Agreement and Plan of Merger (the Merger Agreement) by and among Campbell, Twist Merger Sub, Inc., an indirect, wholly-owned subsidiary of Campbell (Merger Sub), and Xxxxxx'x-Xxxxx, Inc. (Xxxxxx'x-Xxxxx) pursuant to which, among other things and subject to the satisfaction or waiver of specified conditions, Merger Sub will merge with and into Xxxxxx'x-Xxxxx (the Merger), with Xxxxxx'x-Xxxxx surviving the Merger as a wholly-owned subsidiary of Campbell.

The unaudited pro forma combined financial information was based on and should be read in conjunction with the (i) historical consolidated financial statements of Xxxxxxxx included in its Annual Report on Form 10-K for the year ended July 30, 2017 and its Quarterly Report on Form 10-Q for the six months ended January 28, 2018; and (ii) the audited consolidated financial statements of Xxxxxx’x-Xxxxx as of and for the year ended December 30, 2017 and its Quarterly Report on Form 10-Q for the six months ended July 1, 2017 (which is not included or incorporated by reference herein). The unaudited pro forma combined statements of earnings and balance sheet give effect to the acquisition of Xxxxxx’x-Xxxxx by Xxxxxxxx and related anticipated financing (together, the Transactions) as if the Transactions occurred on August 1, 2016 for statement of earnings purposes and on January 28, 2018 for balance sheet purposes.

Campbell's fiscal year ended on July 30, 2017 and Xxxxxx’x-Xxxxx fiscal year ended on December 30, 2017. The unaudited pro forma combined statement of earnings for the six months ended January 28, 2018 combines Campbell’s six months ended January 28, 2018 with Xxxxxx’x-Xxxxx’x six months ended December 30, 2017; the unaudited pro forma combined statement of earnings for the year ended July 30, 2017 combines Campbell’s year ended July 30, 2017 with Xxxxxx’x-Xxxxx’x twelve months ended July 1, 2017. The Xxxxxx’x-Xxxxx six months ended December 30, 2017 statement of earnings was derived from its year ended December 30, 2017 results, adjusted to exclude the six months ended July 1, 2017. The Xxxxxx’x-Xxxxx twelve months ended July 1, 2017 statement of earnings was derived from its year ended December 31, 2016 results, adjusted to include the six months ended July 1, 2017, and adjusted to exclude the six months ended July 2, 2016. The unaudited pro forma combined balance sheet information combines Campbell's interim unaudited January 28, 2018 balance sheet with Xxxxxx'x-Xxxxx year ended December 30, 2017 balance sheet.

The historical financial information has been adjusted to give effect to pro forma events that are directly attributable to the Transactions, are factually supportable and, for purposes of the pro forma statements of earnings, are expected to have a continuing impact on the combined results.

The unaudited pro forma combined financial information should be read in conjunction with the accompanying notes to the unaudited pro forma combined financial statements, and is not necessarily indicative of the combined results of operation or financial condition had the Transactions been completed as of the dates indicated. The unaudited pro forma combined financial information does not reflect any integration costs or savings that may be realized from the Transactions. The unaudited pro forma combined financial information does not purport to project the future results of operations or financial position of the combined company. The acquisition of Xxxxxx’x-Xxxxx will be accounted for as a business combination, and will reflect the application of acquisition accounting in accordance with Accounting Standards Codification (ASC) 805, Business Combinations. The pro forma adjustments are based on preliminary estimates of the fair values of assets acquired and liabilities assumed and information available as of the date of this Current Report on Form 8-K. Certain valuations and assessments, including valuations of the inventories, plant assets, other intangible assets as well as the assessment of the tax positions and rates of the combined business, are in process and will not be completed until subsequent to the close of the proposed acquisition. Additionally, the consideration for the transaction in the unaudited pro forma combined financial information is based on shares, equity awards and debt outstanding as of a date recent to this filing, which may differ from shares, equity awards, and debt outstanding at the date of the close of the acquisition of Xxxxxx’x-Xxxxx. The debt that is anticipated to be incurred to finance the acquisition of Xxxxxx’x-Xxxxx is included in the unaudited pro forma financial information reflecting the terms and rates Campbell expects to achieve based on current market rates. The actual financing and terms of the financing will be subject to market conditions. Actual adjustments may differ from the amounts reflected in the unaudited pro forma combined financial statements, and the differences may be material.

XXXXXXXX SOUP COMPANY

Unaudited Pro Forma Combined Statement of Earnings

For the Six Months Ended January 28, 2018

(millions, except per share amounts)



	Xxxxxxxx Soup Company		Xxxxxx'x-Xxxxx, Inc.
	Six Months Ended January 28, 2018		Six Months Ended December 30, 2017			Pro Forma Adjustments			Notes	Pro Forma Combined
Net sales	$	4,341	$	1,116		$	—			$	5,457
Costs and expenses
Cost of products sold	2,792		835			1			(a)	3,628
Marketing and selling expenses	447		113			—				560
Administrative expenses	314		52			—				366
Research and development expenses	57		3			—				60
Other expenses / (income)	41		117			(17		)	(b), (c)	141
Restructuring charges	35		3			—				38
Total costs and expenses	3,686		1,123			(16		)		4,793
Earnings (loss) before interest and taxes	655		(7		)	16				664
Interest expense	63		21			93			(d), (e)	177
Interest income	1		—			—				1
Earnings (loss) before taxes	593		(28		)	(77		)		488
Taxes on earnings	33		(159		)	(23		)	(f)	(149		)
Net earnings	560		131			(54		)		637
Less: Net earnings (loss) attributable to noncontrolling interests	—		—			—				—
Net earnings attributable to Xxxxxxxx Soup Company	$	560	$	131		$	(54	)		$	637
Per Share — Basic
Net earnings attributable to Xxxxxxxx Soup Company	$	1.86								$	2.12
Weighted average shares outstanding — basic	301									301
Per Share — Assuming Dilution
Net earnings attributable to Xxxxxxxx Soup Company	$	1.85								$	2.11
Weighted average shares outstanding — assuming dilution	302									302

See accompanying Notes to Unaudited Pro Forma Combined Financial Statements.

XXXXXXXX SOUP COMPANY

Unaudited Pro Forma Combined Statement of Earnings

For the Year Ended July 30, 2017

(millions, except per share amounts)



	Xxxxxxxx Soup Company								Xxxxxx'x-Xxxxx, Inc.
	As Reported		Adjustments			Recast
	Year Ended July 30, 2017		Reclassification of Benefit Costs			Year Ended July 30, 2017			Year Ended July 1, 2017		Pro Forma Adjustments			Notes	Pro Forma Combined
Net sales	$	7,890	$	—		$	7,890		$	2,211	$	—			$	10,101
Costs and expenses
Cost of products sold	4,831		134			4,965			1,640		2			(a)	6,607
Marketing and selling expenses	817		38			855			265		—				1,120
Administrative expenses	488		62			550			125		—				675
Research and development expenses	98		13			111			6		—				117
Other expenses / (income)	238		(247		)	(9		)	24		17			(b)	32
Restructuring charges	18		—			18			14		—				32
Total costs and expenses	6,490		—			6,490			2,074		19				8,583
Earnings before interest and taxes	1,400		—			1,400			137		(19		)		1,518
Interest expense	112		—			112			37		190			(d), (e)	339
Interest income	5		—			5			—		—				5
Earnings before taxes	1,293		—			1,293			100		(209		)		1,184
Taxes on earnings	406		—			406			39		(76		)	(f)	369
Net earnings	887		—			887			61		(133		)		815
Less: Net earnings (loss) attributable to noncontrolling interests	—		—			—			1		—				1
Net earnings attributable to Xxxxxxxx Soup Company	$	887	$	—		$	887		$	60	$	(133	)		$	814
Per Share — Basic
Net earnings attributable to Xxxxxxxx Soup Company	$	2.91				$	2.91								$	2.67
Weighted average shares outstanding — basic	305					305									305
Per Share — Assuming Dilution
Net earnings attributable to Xxxxxxxx Soup Company	$	2.89				$	2.89								$	2.65
Weighted average shares outstanding — assuming dilution	307					307									307

See accompanying Notes to Unaudited Pro Forma Combined Financial Statements.

XXXXXXXX SOUP COMPANY

Unaudited Pro Forma Combined Balance Sheet

As of January 28, 2018

(millions, except per share amounts)



	Xxxxxxxx Soup Company			Xxxxxx'x-Xxxxx, Inc.
	As of January 28, 2018			As of December 30, 2017		Pro Forma Adjustments			Notes	Pro Forma Combined
Current assets
Cash and cash equivalents	$	196		$	19	$	107		(g)	$	322
Accounts receivable, net	738			219		—				957
Inventories	869			190		45			(h)	1,104
Other current assets	125			55		(11		)	(i)	169
Total current assets	1,928			483		141				2,552
Plant assets, net of depreciation	2,518			495		190			(a)	3,203
Goodwill	2,259			1,282		1,630			(j)	5,171
Other intangible assets, net of amortization	1,485			1,299		1,647			(b)	4,431
Other assets ($70 attributable to variable interest entity)	146			59		(9		)	(k)	196
Total assets	$	8,336		$	3,618	$	3,599			$	15,553
Current liabilities
Short-term borrowings	$	1,659		$	50	$	(49	)	(d)	$	1,660
Payable to suppliers and others	707			112		—				819
Accrued liabilities	523			138		73			(l)	734
Dividends payable	106			—		—				106
Accrued income taxes	17			—		(3		)	(l)	14
Total current liabilities	3,012			300		21				3,333
Long-term debt	2,247			1,026		5,133			(d), (e)	8,406
Deferred taxes	383			235		463			(m)	1,081
Other liabilities	745			35		(4		)	(n)	776
Total liabilities	6,387			1,596		5,613				13,596
Commitment and contingencies
Xxxxxxxx Soup Company shareholders' equity
Preferred stock; authorized 40 shares; none issued	—			—		—				—
Capital stock	12			81		(81		)	(o)	12
Additional paid-in capital	321			1,637		(1,637		)	(o)	321
Earnings retained in the business	2,734			282		(306		)	(i), (l), (o)	2,710
Capital stock in treasury, at cost	(1,104		)	—		—				(1,104		)
Accumulated other comprehensive income (loss)	(21		)	2		(2		)	(o)	(21		)
Total Xxxxxxxx Soup Company shareholders' equity	1,942			2,002		(2,026		)		1,918
Noncontrolling interests	7			20		12			(p)	39
Total equity	1,949			2,022		(2,014		)		1,957
Total liabilities and equity	$	8,336		$	3,618	$	3,599			$	15,553

See accompanying Notes to Unaudited Pro Forma Combined Financial Statements.

XXXXXXXX SOUP COMPANY

Notes to Unaudited Pro Forma Combined Financial Statements

(millions, except per share amounts)

1. Basis of Presentation

During the first quarter of fiscal 2018, Xxxxxxxx adopted revised guidance issued by the Financial Accounting Standards Board that changes the presentation of net periodic pension cost and net periodic postretirement benefit cost. Under the revised guidance, the service cost component of benefit cost is classified in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost (such as interest expense, return on assets, amortization of prior service credit, actuarial gains and losses, settlements and curtailments) are required to be presented in the income statement separately from the service cost component. The retrospective impact of presenting net periodic benefit cost in accordance with the new guidance is shown in the reclassification of benefit costs column on the statement of earnings for the year ended July 30, 2017.

The unaudited pro forma combined financial information should be read in conjunction with the accompanying notes to the unaudited pro forma combined financial statements, and is not necessarily indicative of the combined results of operation or financial condition had the Transactions been completed as of the dates indicated. The unaudited pro forma combined financial information does not reflect any integration costs or savings that may be realized from the Transactions. The unaudited pro forma combined financial information does not purport to project the future results of operations or financial position of the combined company. The acquisition of Xxxxxx’x-Xxxxx will be accounted for as a business combination, and will reflect the application of acquisition accounting in accordance with ASC 805, Business Combinations. The pro forma adjustments are based on preliminary estimates of the fair values of assets acquired and liabilities assumed and information available as of the date of this Current Report on Form 8-K. Certain valuations and assessments, including valuations of the inventories, plant assets, other intangible assets as well as the assessment of the tax positions and rates of the combined business, are in process and will not be completed until subsequent to the close of the proposed acquisition. Additionally, the consideration for the transaction in the unaudited pro forma combined financial information is based on shares, equity awards and debt outstanding as of a date recent to this filing, which may differ from shares, equity awards, and debt outstanding at the date of the close of the acquisition of Xxxxxx’x-Xxxxx. The debt that is anticipated to be incurred to finance the acquisition of Xxxxxx’x-Xxxxx is included in the unaudited pro forma financial information reflecting the terms and rates Campbell expects to achieve based on current market rates. The actual financing and terms of the financing will be subject to market conditions. Actual adjustments may differ from the amounts reflected in the unaudited pro forma combined financial statements, and the differences may be material.

Campbell has not identified any differences between the accounting policies of Campbell and Xxxxxx’x-Xxxxx that would have a material impact on the pro forma financial information. A full assessment of such policy differences will not be completed until subsequent to the close of the Transactions, and actual policy differences may be material.

Certain amounts for Xxxxxx’x-Xxxxx have been reclassified to conform to the Campbell current financial statement presentation as further discussed in Note 3.

2. Transaction and Estimated Purchase Consideration

The acquisition of Xxxxxx’x-Xxxxx will be accounted for as a business combination, and will reflect the application of acquisition accounting in accordance with ASC 805, Business Combinations. The unaudited pro forma combined financial information reflects the acquisition of Xxxxxx’x-Xxxxx for an estimated purchase price of $6,067, which is derived as follows:



Cash consideration to be paid to Xxxxxx'x-Xxxxx shareholders (a)	$	4,904
Cash consideration to be paid to Xxxxxx'x-Xxxxx equity award holders (b)	79
Xxxxxx'x-Xxxxx debt to be repaid (c)	1,084
Total consideration	$	6,067


(a)	Cash consideration to be paid to Xxxxxx’x-Xxxxx shareholders reflects $50.00 per outstanding Xxxxxx’x-Xxxxx share based on 98,073,282 of outstanding shares as of February 15, 2018.


(b)	Cash consideration to be paid to Xxxxxx’x-Xxxxx equity award holders reflects the consideration for outstanding equity awards as of February 15, 2018, consisting of stock options, restricted stock and restricted stock units.


(c)	Reflects Xxxxxx’x-Xxxxx debt and related accrued interest outstanding as of December 30, 2017 that is expected to be paid in conjunction with the closing of the acquisition of Xxxxxx’x-Xxxxx.

The acquisition will be funded through the issuance of a senior unsecured term loan and senior unsecured notes described further in Note 5(d).

The estimated purchase price allocation is based on preliminary estimates of fair value as follows:



Current assets	$	528
Valuation of property, plant and equipment	685
Valuation of intangible assets	2,946
Residual goodwill	2,912
Other assets	63
Current liabilities	(306		)
Non-current liabilities	(729		)
Noncontrolling interests	(32		)
Total consideration	$	6,067

3. Derivation of Xxxxxx-Xxxxx Results

The Xxxxxx’x-Xxxxx results included in the unaudited pro forma combined statement of earnings reflect the results for the year ended July 1, 2017 and the six months ended December 30, 2017, calculated as follows:



	Year Ended December 31, 2016 (audited)			Six Months Ended July 1, 2017 (unaudited)			Six Months Ended July 2, 2016 (unaudited)			Year Ended July 1, 2017 (unaudited)			Year Ended December 30, 2017 (audited)			Six Months Ended December 30, 2017 (unaudited)
	(A)			(B)			(C)			(D = A+B-C)			(E)			(F = E-B)
Net revenue	$	2,109		$	1,111		$	1,009		$	2,211		$	2,227		$	1,116
Cost of sales	1,345			716			655			1,406			1,427			711
Gross profit	764			395			354			805			800			405

Xxxxxxx, general and administrative expenses	594			339			282			651			644			305
Transaction and integration related expenses	66			2			59			9			3			1
Impairment charges	4			8			1			11			115			107
Other operating expense/(income), net	(5		)	—			(2		)	(3		)	—			—
Other (income)/expense, net	—			(1		)	(1		)	—			(2		)	(1		)
Income before interest and income taxes	$	105		$	47		$	15		$	137		$	40		$	(7	)
Loss on early extinguishment of debt	5			—			5			—			—			—
Interest expense, net	33			18			14			37			39			21
Income/(loss) before income taxes	67			29			(4		)	100			1			(28		)
Income tax (benefit)/expense	25			13			(1		)	39			(146		)	(159		)
Income/(loss) from continuing operations	$	42		$	16		$	(3	)	$	61		$	147		$	131
(Loss)/income from discontinued operations, net of income tax	(27		)	—			(3		)	(24		)	2			2
Net income/(loss)	$	15		$	16		$	(6	)	$	37		$	149		$	133
Net income/(loss) attributable to non-controlling interests	—			1			—			1			1			—
Net income/(loss) attributable to Xxxxxx’x-Xxxxx	$	15		$	15		$	(6	)	$	36		$	148		$	133

4. Reclassification Adjustments

Certain reclassifications have been made to the historical presentation of earnings from continuing operations of Xxxxxx’x-Xxxxx to conform to the financial statement presentation of Xxxxxxxx.

Xxxxxx’x-Xxxxx reclassifications in the unaudited pro forma combined statement of earnings for the six months ended January 28, 2018 are as follows:



	Six Months Ended December 30, 2017
	Before Reclassification			Reclassification			Notes	After Reclassification
Net sales	$	1,116		$	—			$	1,116
Costs and expenses
Cost of products sold	711			124			(i), (ii)	835
Selling, general and administrative expenses	305			(305		)	(i)	—
Marketing and selling expenses				113			(i), (iii)	113
Transaction and integration related expenses	1			(1		)	(iii)	—
Administrative expenses				52			(i), (iii)	52
Impairment charges	107			(107		)	(iv)	—
Other operating expense/(income), net	—			—				—
Research and development expenses				3			(ii)	3
Other expenses / (income)				117			(i), (iv), (v)	117
Other (income)/expense, net	(1		)	1			(v)	—
Restructuring charges	—			3			(iii), (iv)	3
Total costs and expenses	1,123			—				1,123
Earnings (loss) before interest and taxes	(7		)	—				(7		)
Interest expense				21			(vi)	21
Interest income				—			(vi)	—
Interest expense, net	21			(21		)	(vi)	—
Earnings before taxes	(28		)	—				(28		)
Income tax (benefit)/expense	(159		)	159			(vii)	—
Taxes on earnings				(159		)	(vii)	(159		)
Earnings from continuing operations	131			—				131
Less: Net earnings (loss) attributable to noncontrolling interests	—			—				—
Net earnings attributable to Xxxxxxxx Soup Company	$	131		$	—			$	131

Xxxxxx’x-Xxxxx reclassifications in the unaudited pro forma combined statement of earnings for the year ended July 30, 2017 are as follows:



	Year Ended July 1, 2017
	Before Reclassification			Reclassification			Notes	After Reclassification
Net sales	$	2,211		$	—			$	2,211
Costs and expenses
Cost of products sold	1,406			234			(i), (ii)	1,640
Selling, general and administrative expenses	651			(651		)	(i)	—
Marketing and selling expenses				265			(i), (iii)	265
Transaction and integration related expenses	9			(9		)	(iii)	—
Administrative expenses				125			(i), (iii)	125
Impairment charges	11			(11		)	(iv)	—
Other operating expense/(income), net	(3		)	3			(v)	—
Research and development expenses				6			(ii)	6
Other expenses / (income)				24			(i), (iv), (v)	24
Other (income)/expense, net	—			—				—
Restructuring charges	—			14			(iii), (iv)	14
Total costs and expenses	2,074			—				2,074
Earnings before interest and taxes	137			—				137
Interest expense				37			(vi)	37
Interest income				—			(vi)	—
Interest expense, net	37			(37		)	(vi)	—
Earnings before taxes	100			—				100
Income tax (benefit)/expense	39			(39		)	(vii)	—
Taxes on earnings				39			(vii)	39
Earnings from continuing operations	61			—				61
Less: Net earnings (loss) attributable to noncontrolling interests	1			—				1
Net earnings attributable to Xxxxxxxx Soup Company	$	60		$	—			$	60

_____________________________________


(i)	Represents the reclassification of Xxxxxx’x-Xxxxx Xxxxxxx, general, and administrative expenses into Cost of products sold, Marketing and selling expenses, Administrative expenses, and Other expenses / (income) to conform to Campbell’s Statement of Earnings presentation.


(ii)	Represents the reclassification of Xxxxxx’x-Xxxxx expenses related to research and development from Cost of products sold into Research and development expenses to conform to Campbell’s Statement of Earnings presentation.


(iii)	Represents the reclassification of Xxxxxx’x-Xxxxx Transaction and integration related expenses into Marketing and selling expenses, Administrative expenses, and Restructuring charges to conform to Campbell’s Statement of Earnings presentation.


(iv)	Represents the reclassification of Xxxxxx’x-Xxxxx Impairment charges into Restructuring charges and Other expenses / (income) to conform to Campbell’s Statement of Earnings presentation.


(v)	Represents the reclassification of Xxxxxx’x-Xxxxx Other operating expense/(income), net and Other (income)/expense, net into Other expenses / (income) to conform to Campbell’s Statement of Earnings presentation.


(vi)	Represents the reclassification of Xxxxxx’x-Xxxxx Interest expense, net into Interest expense and Interest income to conform to Campbell’s Statement of Earnings presentation.


(vii)	Represents the reclassification of Xxxxxx’x-Xxxxx Income tax (benefit)/expense into Taxes on earnings to conform to Campbell’s Statement of Earnings presentation.

Xxxxxx’x-Xxxxx reclassifications in the unaudited pro forma combined balance sheet as of January 28, 2018 are as follows:



	As of December 30, 2017
	Before Reclassification		Reclassification			Notes	After Reclassification
Assets
Current assets:
Cash and cash equivalents	$	19	—				$	19
Restricted cash	—		—				—
Accounts receivable, net	219		—				219
Inventories, net	190		—				190
Prepaid income taxes and income taxes receivable	6		(6		)	(i)	—
Assets held for sale	19		(19		)	(i)	—
Prepaid expenses and other current assets	30		(30		)	(i)	—
Other current assets			55			(i)	55
Total current assets	483		—				483
Noncurrent assets:
Plant assets, net of depreciation	493		2			(ii)	495
Goodwill	1,282		—				1,282
Other intangible assets, net of amortization	1,301		(2		)	(ii)	1,299
Other assets	59		—				59
Total assets	$	3,618	$	—			$	3,618



	As of December 30, 2017
	Before Reclassification		Reclassification			Notes	After Reclassification
Liabilities and equity
Current liabilities:
Current portion of long-term debt	$	49	$	(49	)	(iii)	$	—
Accounts payable	112		(112		)	(iv)	—
Accrued compensation	32		(32		)	(v)	—
Accrued casualty insurance claims	3		(3		)	(vii)	—
Accrued marketing, selling and promotional costs	58		(58		)	(v)	—
Other payables and accrued liabilities	46		(46		)	(v), (vi)	—
Short-term borrowings			50			(iii), (vi)	50
Payable to suppliers and others			112			(iv)	112
Accrued liabilities			138			(v), (vii)	138
Dividends payable			—				—
Accrued income taxes			—				—
Total current liabilities	300		—				300
Long-term debt	1,026		—				1,026
Deferred taxes	235		—				235
Accrued casualty insurance claims	15		(15		)	(vii)	—
Other liabilities	20		15			(vii)	35
Total liabilities	1,596		—				1,596
Commitments and Contingencies
Stockholders' equity:
Preferred stock	—		—				—
Capital stock	81		—				81
Additional paid-in capital	1,637		—				1,637
Retained earnings	282		—				282
Capital stock in treasury, at cost	—		—				—
Accumulated other comprehensive income (loss)	2		—				2
Total stockholders' equity	2,002		—				2,002
Noncontrolling interests	20		—				20
Total equity	2,022		—				2,022
Total liabilities and equity	$	3,618	$	—			$	3,618

___________________________________________


(i)	Represents the reclassification of Xxxxxx’x-Xxxxx Prepaid income taxes and income taxes receivable, Assets held for sale, and Prepaid expenses and other current assets into Other current assets to conform to Campbell’s Balance Sheet presentation.


(ii)	Represents the reclassification of Xxxxxx’x-Xxxxx internally developed software from Other intangible assets, net of amortization into Plant assets, net of depreciation to conform to Campbell’s Balance Sheet presentation.


(iii)	Represents the reclassification of Xxxxxx’x-Xxxxx Current portion of long-term debt into Short-term borrowings to conform to Campbell’s Balance Sheet presentation.


(iv)	Represents the reclassification of Xxxxxx’x-Xxxxx Accounts payable into Payable to suppliers and others to conform to Campbell’s Balance Sheet presentation.


(v)	Represents the reclassification of Xxxxxx’x-Xxxxx Accrued compensation, Accrued marketing, selling and promotional costs, and Other payables and accrued liabilities into Accrued liabilities to conform to Campbell’s Balance Sheet presentation.


(vi)	Represents the reclassification of Xxxxxx’x-Xxxxx capital lease obligations from Other payables and accrued liabilities into Short-term borrowings to conform to Campbell’s Balance Sheet presentation.


(vii)	Represents the reclassification of Xxxxxx’x-Xxxxx current Accrued casualty insurance claims into Accrued liabilities, and

non-current Accrued casualty insurance claims into Other liabilities to conform to Campbell’s Balance Sheet presentation.

5. Pro Forma Adjustments

The following items resulted in adjustments reflected in the unaudited pro forma combined financial information:


(a)	Plant assets - Reflects adjustment to the fair value of plant assets to reflect the preliminary results of ongoing appraisals as follows:



	Useful Life	Fair Value
Land	N/A	$	55
Land improvements	2 - 19 Years	16
Leasehold interests	1 - 14 Years	11
Buildings	2 - 41 Years	216
Machinery and equipment	1 - 18 Years	370
Projects in progress	N/A	17
Total Plant assets		$	685

Historical depreciation expense of Xxxxxx'x-Xxxxx was $34 and $71 in the six months ended January 28, 2018 and in the year ended July 30, 2017, respectively. Depreciation expense on a straight-line basis using the asset lives reflected in the table above is $35 and $73 in the six months ended January 28, 2018 and in the year ended July 30, 2017, respectively. As a result, depreciation expense is increased by $1 and $2 (in Cost of products sold) in the six months ended January 28, 2018 and in the year ended July 30, 2017, respectively.


(b)	Other intangible assets - Reflects adjustment to the fair value of other intangible assets to reflect the preliminary results of ongoing appraisals as follows:



	Type	Useful Life	Fair Value
Trademarks	Non-amortizable	Indefinite	$	2,131
Customer relationships	Amortizable	15-22 Years	809
Non-compete agreement	Amortizable	1.5 Years	6
Total Intangible assets			$	2,946

Amortization expense, recorded in Other expenses / (income), is increased by $9 and $17 in the six months ended January 28, 2018 and the year ended July 30, 2017, respectively, to reflect amortization using the asset lives reflected in the table above.


(c)	Other expenses - Reflects adjustments to exclude $14 of acquisition costs recognized in the six months ended January 28, 2018 (of which $12 incurred by Campbell and $2 incurred by Xxxxxx'x-Xxxxx), and to exclude $12 of expenses incurred related to the bridge financing which is expected to remain undrawn, as such costs are not expected to have a continuing impact on our results.

(d)

Debt and interest expense - The purchase price is expected to be funded by the incurrence of new debt, including a three-year, $900 senior unsecured term loan with a variable rate and $5,300 of senior unsecured notes with a combination of fixed and variable interest rates and maturities ranging from 2 - 30 years. The weighted-average interest rate on the senior unsecured term loan and senior unsecured notes as of the issuance is expected to be 3.6%, based upon current market interest rates as of February 15, 2018 and results in $111 and $221 of stated interest expense in the six months ended January 28, 2018 and the year ended July 30, 2017, respectively. The actual financing and terms of the financing will be subject to market conditions. A 1/8% change in interest rates on the debt to be incurred as part of the Transactions would result in a change in interest expense of $8 annually.

Xxxxxx’x-Xxxxx outstanding debt, including its revolving credit facility and senior unsecured term loans, will be paid at the closing date for $1,084 (short- and long-term debt of $49 and $1,035, respectively) based on outstanding balances as of December 30, 2017. Accrued interest related to the Xxxxxx’x-Xxxxx outstanding debt is not material. Interest expense is reduced by $21 and $37 in the six months ended January 28, 2018 and the year ended July 30, 2017, respectively, to reflect the elimination of interest expense on Xxxxxx’x-Xxxxx debt.

(e)

Debt issuance costs - Underwriting and professional fees to be incurred in conjunction with the debt issuance to fund the acquisition are expected to be $41, of which $39 will be incurred and deferred at the time of debt issuance, and $2 was previously incurred and deferred in Other current assets. Deferred financing costs are reflected as a component of long-term debt. Amortization of $3 and $6 in the six months ended January 28, 2018 and the year ended July 30, 2017, respectively, is reflected in interest expense related to these costs. Additionally, purchase accounting adjustments include the write-off of $9 of deferred financing costs related to the Xxxxxx’x-Xxxxx debt that will be settled in conjunction with the close of the Transactions.

(f)

Income taxes - Represents the income tax effect of the pro forma adjustments related to the acquisition calculated using historical statutory tax rates by jurisdiction, resulting in blended statutory tax rates (inclusive of state taxes) of 29.87% for the six months ended January 28, 2018, and 36.36% for the year ended July 30, 2017. The income tax effects of the Tax Cuts and Jobs Act (the Act), which was enacted in the United States on December 22, 2017, are presented as recorded by the separate companies and have not been re-determined on a combined basis. The provisions of the Act are expected to reduce the U.S. federal statutory tax rate of the combined group to 27% for the fiscal year ending in 2018, and to 21% for the fiscal year ending in 2019 and thereafter. In addition,the state apportioned statutory tax rate could change for the group on a combined basis.


(g)	Cash and cash equivalents - Reflects consideration paid of $6,067, financed by a new debt incurred of $6,200 and the anticipated settlement of interest rate swaps of $13 associated with Xxxxxx'x-Xxxxx debt to be repaid, offset by financing costs on debt incurred of $39.


(h)	Inventories - Reflects adjustment to the fair value of acquired inventory. This adjustment is not reflected in the unaudited pro forma combined statements of earnings because it does not have a continuing impact based upon expected inventory turnover.


(i)	Other current assets - Reflects the write-off of the $9 prepaid loan commitment fee related to the bridge financing that is assumed to remain unused in the pro forma financial information, and the reclassification of the $2 senior unsecured term loan commitment fee to long-term debt.


(j)	Goodwill - Goodwill, representing the excess of the purchase price over the fair value of assets to be acquired, is $2,912. This allocation is based on preliminary estimates. The final allocation may differ materially from this estimate as changes to the initial valuation of assets and liabilities will be allocated to goodwill.


(k)	Other assets - Reflects the adjustment of certain equity method investments of $4 to fair value and the anticipated settlement of interest rate swaps of $13 associated with Xxxxxx'x-Xxxxx debt to be repaid.

(l)

Accrued liabilities - Reflects the accrual of acquisition expenses of $74 that will be incurred at the close of the Transactions, of which $18 (tax benefit of $3 reflected in Accrued income taxes and $15 after tax reflected in Earnings retained in the business) will be incurred by Xxxxxxxx and $56 will be assumed from Xxxxxx’x-Xxxxx, and the elimination of $1 of deferred rent as result of the application of acquisition accounting.

(m)

Deferred taxes - Reflects the preliminary adjustment to record deferred tax assets and liabilities in connection with the fair value adjustments to assets acquired and liabilities assumed. The estimated increase in deferred tax liabilities of $463 was primarily determined based on the excess of the fair values of the acquired assets and liabilities assumed as compared to the tax basis of the assets acquired and liabilities assumed. The historical statutory tax rates were applied, as appropriate, to each adjustment based on the jurisdiction to which the adjustment relates. This estimate of deferred tax assets and liabilities is preliminary and is subject to change based upon management’s final determination of the fair value of assets acquired and liabilities assumed by jurisdiction. Additional changes to deferred taxes may include, but are not limited to, changes in Campbell's assessment as to the realizability of deferred tax assets as a result of the combination, impacts to the statutory tax rates applied as a result of the combination, etc. Further, the deferred income tax effects of the Act are presented as recorded by the separate companies and have not been re-determined on a combined basis.


(n)	Other liabilities - Reflects the elimination of $4 of non-current deferred rent as a result of the application of acquisition accounting.


(o)	Xxxxxx’x-Xxxxx equity - Reflects elimination of historical equity and retained earnings accounts of Xxxxxx’x-Xxxxx.


(p)	Noncontrolling interests - Reflects the adjustment of noncontrolling interest to fair value.

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Unaudited Pro Forma Combined Financial Information

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