CAMPBELL SOUP CO - 10-Q Quarterly Report

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, 2003		Commission File Number 1-3822

(Campbell Soup Company)


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

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.

Yes [X] No [ ].

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b - 2 of the Securities Exchange Act of 1934).

Yes [X] No [ ].

There were 410,521,764 shares of Capital Stock outstanding as of June 4, 2003.

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		April		April			April
			27, 2003		28, 2002		27, 2003			28, 2002

Net sales			$	1,600	$	1,371	$	5,223		$	4,910

Costs and expenses
	Cost of products sold			920		782		2,947			2,757
	Marketing and selling expenses			263		246		865			837
	Administrative expenses			137		94		364			299
	Research and development expenses			23		17		62			52
	Other expenses			22		42		35			108
	Restructuring charges			—		—		—			1

		Total costs and expenses		1,365		1,181		4,273			4,054

Earnings before interest and taxes				235		190		950			856
	Interest, net			45		44		136			142

Earnings before taxes				190		146		814			714
	Taxes on earnings			61		50		262			244

Earnings before cumulative effect of accounting change				129		96		552			470
Cumulative effect of change in accounting principle				—		—		(31	)		—

Net earnings			$	129	$	96	$	521		$	470

Per share - basic
	Earnings before cumulative effect of accounting change		$	.31	$	.23	$	1.34		$	1.14
	Cumulative effect of change in accounting principle			—		—		(.08	)		—

	Net earnings		$	.31	$	.23	$	1.26		$	1.14

	Dividends		$	.1575	$	.1575	$	.4725		$	.4725

	Weighted average shares outstanding - basic			411		410		411			410

Per share - assuming dilution
	Earnings before cumulative effect of accounting change		$	.31	$	.23	$	1.34		$	1.14
	Cumulative effect of change in accounting principle			—		—		(.08	)		—

	Net earnings		$	.31	$	.23	$	1.26		$	1.14

	Weighted average shares outstanding - assuming dilution			411		411		411			411

See Notes to Financial Statements

CAMPBELL SOUP COMPANY CONSOLIDATED

Balance Sheets

(unaudited)
(millions, except per share amounts)


			April			July
			27, 2003			28, 2002

Current assets
	Cash and cash equivalents		$	27		$	21
	Accounts receivable			511			417
	Inventories			608			638
	Other current assets			124			123

		Total current assets		1,270			1,199

Plant assets, net of depreciation				1,770			1,684
Goodwill				1,771			1,581
Other intangible assets, net of amortization				1,010			953
Other assets				294			304

Total assets			$	6,115		$	5,721

Current liabilities
	Notes payable		$	1,261		$	1,196
	Payable to suppliers and others			514			681
	Accrued liabilities			671			503
	Dividend payable			65			65
	Accrued income taxes			283			233

		Total current liabilities		2,794			2,678

Long-term debt				2,273			2,449
Nonpension postretirement benefits				310			319
Other liabilities, including deferred income taxes of $175 and $188				386			389

		Total liabilities		5,763			5,835

Shareowners’ equity (deficit)
	Preferred stock; authorized 40 shares; none issued			—			—
	Capital stock, $.0375 par value; authorized 560 shares; issued 542 shares			20			20
	Additional paid-in capital			296			320
	Earnings retained in the business			5,245			4,918
	Capital stock in treasury, at cost			(4,860	)		(4,891	)
	Accumulated other comprehensive loss			(349	)		(481	)

		Total shareowners’ equity (deficit)		352			(114	)

Total liabilities and shareowners’ equity (deficit)			$	6,115		$	5,721

See Notes to Financial Statements

CAMPBELL SOUP COMPANY CONSOLIDATED

Statements of Cash Flows
(unaudited)
(millions)


				Nine Months Ended

				April			April
				27, 2003			28, 2002

Cash flows from operating activities:
	Net earnings			$	521		$	470
	Non-cash charges to net earnings
		Cumulative effect of accounting change			31			—
		Depreciation and amortization			180			229
		Deferred income taxes			(1	)		(10	)
		Other, net			41			46
	Changes in working capital
		Accounts receivable			(24	)		16
		Inventories			61			68
		Prepaid assets			(1	)		15
		Accounts payable and accrued liabilities			(66	)		38
	Other				(36	)		(43	)

			Net cash provided by operating activities		706			829

Cash flows from investing activities:
		Purchases of plant assets			(158	)		(112	)
		Sales of plant assets			10			4
		Businesses acquired			(176	)		(15	)
		Sales of businesses			6			3
		Long-term investments			(4	)		(11	)

			Net cash used in investing activities		(322	)		(131	)

Cash flows from financing activities:
		Long-term borrowings			400			1,100
		Repayments of long-term borrowings			—			(628	)
		Short-term borrowings			730			618
		Repayments of short-term borrowings			(1,319	)		(1,567	)
		Dividends paid			(194	)		(221	)
		Treasury stock purchases			(13	)		—
		Treasury stock issuances			15			7
		Other, net			—			(1	)

			Net cash used in financing activities		(381	)		(692	)

Effect of exchange rate changes on cash					3			(3	)

Net change in cash and cash equivalents					6			3
Cash and cash equivalents - beginning of period					21			24

Cash and cash equivalents - end of period				$	27		$	27

See Notes to Financial Statements

CAMPBELL SOUP COMPANY CONSOLIDATED

Statements of Shareowners’ Equity (Deficit)

(unaudited)
(millions, except per share amounts)


		Capital stock
															Earnings			Accumulated
		Issued				In treasury						Additional			retained			other			Total
												paid-in			in the			comprehensive			shareowners’
		Shares		Amount		Shares			Amount			capital			business			income (loss)			equity (deficit)

Balance at July 29, 2001			542	$	20		(133	)	$	(4,908	)	$	314		$	4,651		$	(324	)	$	(247	)

Comprehensive income (loss)
	Net earnings															470						470
	Foreign currency translation adjustments																		31			31
	Cash-flow hedges, net of tax																		(3	)		(3	)

	Other comprehensive income																		28			28

Total Comprehensive income																						498

Dividends ($.4725 per share)																(194	)					(194	)
Treasury stock issued under management incentive and stock option plans							1			11			12									23

Balance at April 28, 2002			542	$	20		(132	)	$	(4,897	)	$	326		$	4,927		$	(296	)	$	80

Balance at July 28, 2002			542	$	20		(132	)	$	(4,891	)	$	320		$	4,918		$	(481	)	$	(114	)

Comprehensive income (loss)
	Net earnings															521						521
	Foreign currency translation adjustments																		133			133
	Cash-flow hedges, net of tax																		(1	)		(1	)

	Other comprehensive income																		132			132

Total Comprehensive income																						653

Dividends ($.4725 per share)																(194	)					(194	)
Treasury stock purchased							(1	)		(13	)											(13	)
Treasury stock issued under management incentive and stock option plans							1			44			(24	)								20

Balance at April 27, 2003			542	$	20		(132	)	$	(4,860	)	$	296		$	5,245		$	(349	)	$	352

See Notes to Financial Statements

CAMPBELL SOUP COMPANY CONSOLIDATED
Notes to Consolidated Financial Statements
(unaudited)
(dollars in millions, except per share amounts)

(a) Basis of Presentation

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. All such adjustments are of a normal recurring nature. 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, 2002, except as discussed below. Certain reclassifications were made to the prior year amounts to conform with current presentation. The results for the period are not necessarily indicative of the results to be expected for other interim periods or the full year.

(b) Accounting for Stock-Based Compensation

In December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure.” This standard amends the transition and disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation.” As permitted by SFAS No. 148, the company accounts for stock option grants and restricted stock awards in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. Accordingly, no compensation expense has been recognized for stock options since all options granted had an exercise price equal to the market value of the underlying stock on the grant date. Restricted stock awards are expensed. See also Note (l) of the Notes to Consolidated Financial Statements. The company currently does not intend to transition to the use of a fair value method for accounting for stock-based compensation. The following table illustrates the effect on net earnings and earnings per share if the company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.


		Three Months Ended						Nine Months Ended

		Apr. 27, 2003			Apr. 28, 2002			Apr. 27, 2003			Apr. 28, 2002

Net Earnings, as reported		$	129		$	96		$	521		$	470
Add: Stock-based employee compensation expense included in reported net earnings, net of related tax effects¹			3			4			11			16
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(10	)		(8	)		(30	)		(27	)

Pro forma net earnings		$	122		$	92		$	502		$	459

Earnings per share:
	Basic-as reported	$	.31		$	.23		$	1.26		$	1.14

	Basic-pro forma	$	.30		$	.22		$	1.22		$	1.12

	Diluted-as reported	$	.31		$	.23		$	1.26		$	1.14

	Diluted-pro forma	$	.30		$	.22		$	1.22		$	1.12

¹ Represents restricted stock expense

(c) Acquisitions

During the first quarter ended October 27, 2002, the company acquired two businesses for cash consideration of approximately $170 and assumed debt of approximately $20. The company acquired Snack Foods Limited, a leader in the Australian salty snack category, and Erin Foods, the number two dry soup manufacturer in Ireland. Snack Foods Limited is included in the Biscuits and Confectionery segment. Erin Foods is included in the International Soup and Sauces segment. The allocation of the purchase price of these businesses is based on preliminary estimates and assumptions and is subject to revision. The businesses have annual sales of approximately $160.

(d) Goodwill and Intangible Assets

On July 29, 2002 the company adopted SFAS No. 142 “Goodwill and Other Intangible Assets.” Under this standard, goodwill and intangible assets with indefinite useful lives are no longer amortized, but rather are to be tested at least annually for impairment. Intangible assets with finite lives should continue to be amortized over the estimated useful life and reviewed for impairment in accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-lived Assets.” In connection with the adoption of SFAS No. 142, the company was required to perform an impairment assessment on all goodwill and indefinite-lived intangible assets as of July 29, 2002. The assessment of the indefinite-lived intangible assets requires a comparison between the fair value and carrying value of the intangible asset. To the extent the carrying value exceeds the fair value, an impairment loss is recognized. The assessment of goodwill is a two-step process in which the first step identifies impairment by requiring a comparison of the fair value of each reporting unit to the carrying value, including goodwill allocated to the unit. If the carrying value exceeds the fair value,

goodwill is considered to be impaired. The amount of impairment is measured in a second step as the difference between the carrying value of goodwill and the “implied” fair value of goodwill, which is determined by calculating goodwill as if the reporting unit had just been acquired and accounted for as a business combination. Fair values were determined using discounted cash flow analyses. As a result of this evaluation, the company recorded a non-cash after-tax charge of $31 (net of a $17 tax benefit) for impaired goodwill associated with the Stockpot business, a foodservice business acquired in August 1998. Stockpot is a reporting unit in the North America Soup and Away From Home segment. This non-cash charge was recorded as a cumulative effect of a change in accounting principle. The impairment of Stockpot goodwill is the result of a reduction in actual sales attained and forecasted future sales growth relative to projections made at the time of the acquisition.

The provisions of SFAS No. 142 are to be applied on a prospective basis and prior year results are not to be restated. The following tables present a reconciliation of earnings before cumulative effect of accounting change, adjusted to exclude amortization of goodwill and indefinite-lived intangible assets:


		Three Months Ended		Three Months Ended
		April 27, 2003		April 28, 2002

Earnings before cumulative effect of accounting change, as reported		$	129	$	96
Add back: Goodwill Amortization			—		9
	Trademark Amortization		—		4

Adjusted earnings before cumulative effect of accounting change		$	129	$	109


		Three Months Ended		Three Months Ended
		April 27, 2003		April 28, 2002

Basic and diluted earnings per share before cumulative effect of accounting change, as reported		$	.31	$	.23
Add back: Goodwill Amortization			—		.02
	Trademark Amortization		—		.01

Adjusted basic and diluted earnings per share before cumulative effect of accounting change		$	.31	$	.27


		Nine Months Ended		Nine Months Ended
		April 27, 2003¹		April 28, 2002

Earnings before cumulative effect of accounting change, as reported		$	552	$	470
Add back: Goodwill Amortization			—		26
	Trademark Amortization		—		13

Adjusted earnings before cumulative effect of accounting change		$	552	$	509


		Nine Months Ended		Nine Months Ended
		April 27, 2003¹		April 28, 2002

Basic and diluted earnings per share before cumulative effect of accounting change, as reported		$	1.34	$	1.14
Add back: Goodwill Amortization			—		.06
	Trademark Amortization		—		.03

Adjusted basic and diluted earnings per share before cumulative effect of accounting change		$	1.34	$	1.24

¹ In the first quarter of 2003, the company recognized a $31 (net of a $17 tax benefit), or $.08 per share, cumulative effect of accounting change related to the adoption of SFAS No. 142.

The following table sets forth balance sheet information for intangible assets, excluding goodwill, subject to amortization and intangible assets not subject to amortization:


		April 27, 2003					July 28, 2002

		Carrying		Accumulated			Carrying		Accumulated
		Amount		Amortization			Amount		Amortization

Intangible assets subject to amortization¹:
	Trademarks	$	6	$	(2	)	$	5	$	(1	)
	Other		16		(7	)		15		(5	)

	Total	$	22	$	(9	)	$	20	$	(6	)

Intangible assets not subject to amortization²:
	Trademarks	$	964				$	908
	Pension		31					31
	Customer Relationships		2					—

	Total	$	997				$	939


¹	Amortization related to these assets was approximately $1 for the nine month period ended April 27, 2003 and April 28, 2002. The estimated aggregated amortization expense for each of the five succeeding fiscal years is less than $2 per year. Asset useful lives range from five to thirty-four years.

²	Total carrying amount is net of accumulated amortization through July 28, 2002.

Changes in the carrying amount for goodwill for the period ended April 27, 2003 are as follows:


	North America			North America
	Soup and			Sauces and		Biscuits and		International
	Away From Home			Beverages		Confectionery		Soup and Sauces		Total

Balance at July 28, 2002	$	336		$	365	$	339	$	541	$	1,581
Goodwill acquired		—			—		111		13		124
Impairment losses		(48	)		—		—		—		(48	)
Foreign currency translation adjustment		8			—		54		52		114

Balance at April 27, 2003	$	296		$	365	$	504	$	606	$	1,771

(e) Comprehensive Income

Total comprehensive income comprises net earnings, net foreign currency translation adjustments, minimum pension liability adjustments, and net unrealized gains (losses) on cash-flow hedges.

Total comprehensive income for the three months ended April 27, 2003 and April 28, 2002, was $175 and $141, respectively. Total comprehensive income for the nine months ended April 27, 2003 and April 28, 2002, was $653 and $498, respectively.

The components of Accumulated other comprehensive loss, as reflected in the Statements of Shareowners’ Equity (Deficit), consisted of the following:


	April 27,			April 28,
	2003			2002

Foreign currency translation adjustments	$	(142	)	$	(294	)
Cash-flow hedges, net of tax		1			(2	)
Minimum pension liability, net of tax¹		(208	)		—

Total Accumulated other comprehensive loss	$	(349	)	$	(296	)

¹ Includes a tax benefit of $119

(f) Earnings Per Share

For the periods presented in the Statements of Earnings, the calculations of basic EPS and EPS assuming dilution vary in that the weighted average shares outstanding assuming dilution included the incremental effect of stock options.

(g) Segment Information

Campbell Soup Company, together with its consolidated subsidiaries, is a global manufacturer and marketer of high quality, branded convenience food products. The company operates in four segments: North America Soup and Away From Home, North America Sauces and Beverages, Biscuits and Confectionery, and International Soup and Sauces.

The North America Soup and Away From Home segment comprises the retail soup and Away From Home businesses in the U.S. and Canada. The U.S. retail business includes the Campbell’s brand condensed and ready-to-serve soups and Swanson broths. The segment includes the company’s total business in Canada, which comprises the Habitant and Campbell’s soups, Prego pasta sauce and V8 juices. The Away From Home operations represent the distribution of products such as Campbell’s soups, Campbell’s specialty entrees, beverage products, other prepared foods and Pepperidge Farm products through various food service channels in North America. The North America Sauces and Beverages segment includes U.S. retail sales for Prego pasta sauces, Pace Mexican sauces, Franco-American canned pastas and gravies, V8 vegetable juices, V8 Splash juice beverages, and Campbell’s tomato juice, as well as the total of all businesses in Mexico and other Latin American countries. The Biscuits and Confectionery segment includes all retail sales of Pepperidge Farm cookies, crackers, breads and frozen products in North America, Arnott’s biscuits and crackers in Australia and Asia Pacific, Arnotts Snackfoods salty snacks in Australia, and Godiva chocolates worldwide. The International Soup and Sauces segment comprises operations outside of North America, including Erasco and Heisse Tasse soups in Germany, Liebig and Royco soups and Lesieur sauces in France, Campbell’s and Batchelors soups, Oxo stock cubes and Homepride sauces in the United Kingdom, Devos Lemmens mayonnaise and cold sauces and Campbell’s and Royco soups in Belgium, Blå Band soups in Sweden, and McDonnell’s and Erin soups and sauces in Ireland. In Asia Pacific, operations include Campbell’s soups and stock and Swanson broths across the region.

Accounting policies for measuring segment assets and earnings before interest and taxes are substantially consistent with those described in the company’s 2002 Annual Report on Form 10-K. The company evaluates segment performance before interest and taxes. The North America Soup and Away From Home and North America Sauces and Beverages segments operate under an integrated supply chain organization, sharing substantially all manufacturing, warehouse, distribution and sales activities. Accordingly, assets have been allocated between the two segments based on various measures, for example, budgeted production hours for fixed assets and depreciation. Segment financial information for the three and nine months ended April 27, 2003 reflects the adoption of SFAS No.

142 as discussed in Note (d). Operating segment results for the periods ended April 28, 2002 have been adjusted to reflect the pro forma impact of amortization eliminated under the standard. Amortization expense of $17 for the three month period and $51 for the nine month period has been eliminated from the prior period results.

April 27, 2003

Earnings Depreciation

Before Interest and Capital

Three Months Ended Net Sales and Taxes Amortization Expenditures

North America Soup and Away From Home
$ 600 $ 147 $ 17 $ 15

North America Sauces and Beverages
295 59 9 10

Biscuits and Confectionery
434 38 24 31

International Soup and Sauces
271 37 8 5

Corporate and Eliminations¹
— (46 ) 11 4

Total
$ 1,600 $ 235 $ 69 $ 65

Earnings Depreciation

Before Interest and Capital Segment

Nine Months Ended Net Sales and Taxes Amortization Expenditures Assets

North America Soup and Away From Home
$ 2,170 $ 561 $ 46 $ 38 $ 1,193

North America Sauces and Beverages
920 220 25 24 1,206

Biscuits and Confectionery
1,330 167 63 72 1,606

International Soup and Sauces
803 97 24 14 1,776

Corporate and Eliminations¹
— (95 ) 22 10 334

Total
$ 5,223 $ 950 $ 180 $ 158 $ 6,115

April 28, 2002

Earnings Depreciation

Before Interest and Capital

Three Months Ended Net Sales and Taxes Amortization Expenditures

North America Soup and Away From Home
$ 516 $ 111 $ 15 $ 18

North America Sauces and Beverages
276 61 8 11

Biscuits and Confectionery
357 42 22 15

International Soup and Sauces
222 26 8 4

Corporate and Eliminations¹
— (33 ) 12 3

Total
$ 1,371 $ 207 $ 65 $ 51

Earnings Depreciation

Before Interest and Capital Segment

Nine Months Ended Net Sales and Taxes Amortization Expenditures Assets

North America Soup and Away From Home
$ 2,134 $ 561 $ 42 $ 31 $ 1,179

North America Sauces and Beverages
908 195 24 19 1,195

Biscuits and Confectionery
1,164 158 66 44 1,250

International Soup and Sauces
704 90 21 12 1,526

Corporate and Eliminations¹
— (97 ) 25 6 639

Total
$ 4,910 $ 907 $ 178 $ 112 $ 5,789


¹	Represents elimination of intersegment sales, unallocated corporate expenses and unallocated assets, including corporate offices, deferred income taxes and prepaid pension assets.

(h) Inventories


	April 27, 2003		July 28, 2002

Raw materials, containers and supplies	$	206	$	231
Finished products		402		407

	$	608	$	638

Approximately 58% and 60% of inventory in 2003 and 2002, respectively, is accounted for on the last in, first out (LIFO) method of determining cost. If the first in, first out inventory valuation method had been used exclusively, inventories would not differ materially from the amounts reported at April 27, 2003 and July 28, 2002.

(i) Notes Payable and Long-Term Debt

On November 25, 2002, the company issued $400 ten-year 5% fixed-rate notes. The proceeds were used to retire $300 of 6.15% notes and to repay commercial paper borrowings.

(j) Accounting for Derivative Instruments

The company utilizes certain derivative financial instruments to enhance its ability to manage risks which exist as part of ongoing business operations, including interest rate, foreign currency, commodity and certain equity-linked employee compensation exposures. Derivative instruments are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The company does not enter into contracts for speculative purposes, nor is it a party to any leveraged derivative instrument.

All derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered into, the company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair-value hedge), (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge), (3) a foreign-currency fair-value or cash-flow hedge (foreign-currency hedge), or (4) a hedge of a net investment in a foreign operation. Some derivatives may also be considered natural hedging instruments (changes in fair value are recognized to act as economic offsets to changes in fair value of the underlying hedged item and do not qualify for hedge accounting under SFAS No. 133).

Interest Rate Swaps

The company finances a portion of its operations through debt instruments primarily consisting of commercial paper, notes, debentures and bank loans. The company periodically utilizes interest rate swap agreements, including forward-starting swaps, to minimize worldwide financing costs and to achieve a targeted ratio of variable versus fixed-rate debt.

In November 2002, the company terminated interest rate swap contracts with a notional value of $250 that converted fixed-rate debt (6.75% notes due 2011) to variable and received $37. Of this amount, $3 represented accrued interest earned on the swap prior to the termination date. The remainder will be amortized over the remaining life of the notes as a reduction to interest expense.

In connection with the $400 ten-year 5% fixed-rate notes due 2012 (referred to in Note (i)), the company entered into ten-year interest rate swaps that converted $300 of the fixed-rate debt to variable.

Variable-to-fixed interest rate swaps are accounted for as cash-flow hedges. Consequently, the effective portion of unrealized gains (losses) is deferred as a component of Accumulated other comprehensive income (loss) and is recognized in earnings at the time the hedged item affects earnings. The amounts paid or received on the hedge are recognized as adjustments to interest expense. The notional value of all outstanding cash-flow interest rate swaps at April 27, 2003 totaled $300 with a maximum maturity of October 2003. The fair value of these swaps was $(3) as of April 27, 2003.

Fixed-to-variable interest rate swaps are accounted for as fair-value hedges. Gains and losses on these instruments are recorded in earnings as adjustments to interest expense, offsetting gains and losses on the hedged item. The notional amounts of all outstanding fair-value interest rate swaps at April 27, 2003 totaled $475 with a maximum maturity date of December 2012. The fair value of such instruments was $25 as of April 27, 2003.

Foreign Currency Contracts

The company is exposed to foreign currency exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries. The company utilizes foreign currency forward purchase and sale contracts, options and cross-currency swaps in order to manage the volatility associated with foreign currency purchases and certain intercompany transactions in the normal course of business.

Qualifying forward exchange and cross-currency swap contracts are accounted for as cash-flow hedges when the hedged item is a forecasted transaction, or when future cash flows related to a recognized asset or liability are expected to be received or paid. The effective portion of the changes in fair value on these instruments is recorded in Accumulated other comprehensive income (loss) and is reclassified into the Statements of Earnings on the same line item and in the same period or periods in which the hedged transaction affects earnings. The assessment of effectiveness for contracts is based on changes in the spot rates. The fair value of these instruments was $(79) at April 27, 2003.

Qualifying forward exchange contracts are accounted for as fair-value hedges when the hedged item is a recognized asset, liability or firm commitment. The fair value of such contracts was not material at April 27, 2003.

The company also enters into certain foreign currency derivative instruments that are not designated as accounting hedges. These instruments are primarily intended to reduce volatility of certain intercompany financing transactions. Gains and losses on derivatives not designated as accounting hedges are typically recorded in Other expense, as an offset to gains (losses) on the underlying transaction. The fair value of such contracts was $(15) at April 27, 2003.

Foreign currency forward contracts typically have maturities of less than one year. Principal currencies include the Australian dollar, British pound, Canadian dollar, euro, Japanese yen and Swedish krona.

As of April 27, 2003, the accumulated derivative net income in other comprehensive income for cash-flow hedges, including the forward exchange and cross-currency contracts, variable-to-fixed interest rate swaps and forward starting swap contracts was $1, net of tax. At April 28, 2002, the accumulated derivative net loss in other comprehensive income was approximately $2, net of tax. Reclassifications from Accumulated other comprehensive income (loss) into the Statements of Earnings during the quarter ended April 27, 2003 were not material. Reclassifications during the remainder of fiscal year 2003 are not expected to be material. There were no discontinued cash-flow hedges during the quarter. At April 27, 2003, the maximum maturity date of any cash-flow hedge was approximately eight years.

Other Contracts

The company is exposed to equity price changes related to certain employee compensation obligations. Swap contracts are utilized to hedge exposures relating to certain employee compensation obligations linked to the total return of the Standard & Poor’s 500 Index and the total return of the company’s capital stock. The company pays a variable interest rate and receives the equity returns under these instruments. The notional value of the equity swap contracts, which mature in 2004, was $19 at April 27, 2003. These instruments are not designated as accounting hedges. Gains and losses are recorded in Other expense. The net asset recorded under these contracts at April 27, 2003 was approximately $1.

Other disclosures related to hedge ineffectiveness and gains (losses) excluded from the assessment of hedge effectiveness have been omitted due to the insignificance of these amounts.

(k) Restructuring Program

As a result of the reconfiguration of the manufacturing network of Arnotts in Australia, costs of approximately $1 in 2003 and $13 ($9 after tax) in 2002 were recorded as Cost of products sold, primarily representing accelerated depreciation on assets to be taken out of service. In addition, in the second quarter ended January 27, 2002, the company recorded a $1 restructuring charge related to planned severance activities under this program. These costs were related to a previously announced program designed to drive greater manufacturing efficiency resulting from the closure of the Melbourne plant. Approximately 550 jobs were eliminated due to the plant closure.

A summary of restructuring reserves at April 27, 2003 and related activity is as follows:


	Accrued					Accrued
	Balance at					Balance at
	July 28, 2002		Spending			April 27, 2003

Severance pay and benefits	$	4	$	(4	)	$	—

(l) Other Expenses

The company has historically recognized in Other expenses stock-based compensation expense and certain expense related to the deferred compensation plan. If such expenses had been allocated by function, the following financial statement line items would increase (decrease) by the amounts indicated:


	April 27, 2003			April 28, 2002

Three months ended
Cost of products sold	$	—		$	—
Marketing and selling expenses		1			1
Administrative expenses		6			7
Research and development expenses		—			—
Other expenses		(7	)		(8	)

Nine months ended
Cost of products sold	$	1		$	1
Marketing and selling expenses		2			4
Administrative expenses		14			25
Research and development expenses		1			1
Other expenses		(18	)		(31	)

(m) Contingencies

On March 30, 1998, the company effected a spinoff of several of its non-core businesses to Vlasic Foods International Inc. (“VFI”). VFI and several of its affiliates (collectively, “Vlasic”) commenced cases under Chapter 11 of the Bankruptcy Code on January 29, 2001 in the United States Bankruptcy Court for the District of Delaware. Vlasic’s Second Amended Joint Plan of Distribution under Chapter 11 (the “Plan”) was confirmed by an order of the Bankruptcy Court dated November 16, 2001, and became effective on or about November 29, 2001. The Plan provides for the assignment of various causes of action allegedly belonging to the Vlasic estates, including claims against the company allegedly arising from the spinoff, to VFB LLC, a limited liability company (“VFB”) whose membership interests are to be distributed under the Plan to Vlasic’s general unsecured creditors.

On February 19, 2002, VFB commenced a lawsuit against the company and several of its subsidiaries in the United States District Court for the District of Delaware alleging, among other things, fraudulent conveyance, illegal dividends and breaches of fiduciary duty by Vlasic directors alleged to be under the company’s control. The lawsuit seeks to hold the company liable in an amount necessary to satisfy all unpaid claims against Vlasic (which VFB estimates in the complaint to be $250), plus unspecified exemplary and punitive damages. While this case is still in the discovery stage and the ultimate disposition of complex litigation is inherently difficult to assess, the company believes the action is without merit and is defending the case vigorously.

The company received an Examination Report from the Internal Revenue Service on December 23, 2002, which included a challenge to the treatment of gains and interest deductions claimed in the company’s fiscal 1995 federal income tax return, relating to transactions involving government securities. If the proposed adjustment were upheld, it would require the company to pay a net amount of approximately $100 in taxes, accumulated interest to date, and penalties. Interest will continue to accrue until the matter is resolved. The company believes these transactions were properly reported on its federal income tax return in accordance with applicable tax laws and regulations in effect during the period involved and is challenging these adjustments vigorously. While the outcome of proceedings of this type cannot be predicted with certainty, the company believes that the ultimate outcome of this matter will not have a material impact on the consolidated financial condition or results of operation of the company.

(n) Litigation Settlement

Early in 2000, ten purported class action lawsuits were commenced against the company and two of its former executives in the United States District Court for the District of New Jersey. The lawsuits were subsequently consolidated, and an amended consolidated complaint was filed alleging, among other things, that the company and the former executives misrepresented the company’s financial condition between September 8, 1997 and January 8, 1999, by failing to disclose alleged shipping and revenue recognition practices in connection with the sale of certain company products at the end of the company’s fiscal quarters in violation of Section 10 (b) and 20 (a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. On February 6, 2003, the company announced it had reached an agreement in principle to settle this case. The district court’s order approving the settlement was issued on May 22, 2003; that order is subject to appeal until June 23, 2003. Pursuant to the court’s order, all claims have been dismissed and the litigation has been terminated in exchange for a payment of $35, which is expected to be made on June 23, 2003. The full amount of the payment will be covered by insurance. The company recorded a $35 liability for the amount due under the agreement and a $35 receivable from the anticipated insurance recovery as of January 26, 2003. The settlement does not constitute an admission of fault or liability by the company or any other defendant.

(o) Guarantees

In November 2002, FASB Interpretation No. 45 (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” was issued. FIN 45 clarifies the requirements relating to a guarantor’s accounting for, and disclosure of, the issuance of certain types of guarantees. FIN 45 requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. The initial recognition and measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002.

The company guarantees almost 1,200 bank loans made to Pepperidge Farm independent sales distributors for the purchase of distribution routes. The maximum potential amount of future payments the company could be required to make under the guarantees is approximately $80. The company’s guarantees are secured by the distribution routes. The company does not believe it is probable that it will be required to make guarantee payments as a result of defaults on the bank loans guaranteed. Prior to the adoption of FIN 45, no amounts were recognized on the Consolidated Balance Sheets related to these guarantees. The amount recognized as of April 27, 2003 is not material.

(p) Recently Issued Accounting Pronouncements

The company adopted SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” on July 29, 2002. This standard addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This standard supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions,” for the disposal of a segment of a business. Long-lived assets are tested for impairment if certain triggers occur. This standard is generally effective for the company on a prospective basis. The company does not expect the adoption of this standard to have a material impact on the financial statements.

In July 2002, the FASB issued SFAS No. 146 “Accounting for Exit or Disposal Activities.” The provisions of this standard are effective for disposal activities initiated after December 31, 2002, with early application encouraged. The company does not expect the adoption of this standard to have a material impact on the financial statements.

In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB 51.” This Interpretation addressed consolidation by business enterprises of certain variable interest entities (“VIEs”). The Interpretation is effective immediately for all enterprises with variable interests in VIEs created after January 31, 2003. For variable interests in VIEs created before February 1, 2003, the provisions of this Interpretation will be applicable no later than the beginning of the first interim or annual period beginning after June 15, 2003. Further, the disclosure requirements of the Interpretation are applicable for all financial statements initially issued after January 31, 2003, regardless of the date on which the VIE was created. The company is in the process of completing its evaluation of this Interpretation, but does not expect the adoption to have a material impact on the financial statements.

The Emerging Issues Task Force (EITF) reached a consensus on Issue No. 02-17, “Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination” which clarifies certain recognition requirements in SFAS No. 141, “Business Combinations.” The guidance in this Issue is to be applied to business combinations consummated and goodwill impairment tests performed after

October 25, 2002. The company does not expect its application to have a material impact on the financial statements.

In April 2003, the FASB issued SFAS No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This standard amends and clarifies financial accounting and reporting for derivative instruments and hedging activities, primarily as a result of decisions made by the FASB Derivatives Implementation Group subsequent to the original issuance of SFAS No. 133 and in connection with other FASB projects. This standard is generally effective prospectively for contracts and hedging relationships entered into or modified after June 30, 2003. The company is currently evaluating the impact of this standard.

In May 2003, the FASB issued SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” SFAS No. 150 changes the accounting for certain financial instruments that, under previous guidance, could be classified as equity or “mezzanine” equity, by now requiring those instruments to be classified as liabilities (or assets in some circumstances) in the statement of financial position. Further, SFAS No. 150 requires disclosure regarding the terms of those instruments and settlement alternatives. The guidance in SFAS No. 150 is generally effective for all financial instruments entered into or modified after May 31, 2003, and is otherwise effective at the beginning of the first interim period beginning after June 15, 2003. The company is in the process of evaluating this standard, but does not expect the adoption to have a material impact on the financial statements.

ITEM 2.

CAMPBELL SOUP COMPANY CONSOLIDATED
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Results of Operations

Overview

The company reported net earnings of $129 million for the third quarter ended April 27, 2003 versus $96 million in the comparable quarter a year ago. Earnings per share were $.31, compared to $.23 a year ago. (All earnings per share amounts included in Management’s Discussion and Analysis are presented on a diluted basis.) Comparisons to the prior year are impacted by the adoption of SFAS No. 142, “Goodwill and Other Intangible Assets,” as of the beginning of this fiscal year. In accordance with the provisions of this standard, the company discontinued amortization of goodwill and indefinite-lived intangible assets on a prospective basis from the date of adoption. Had such amortization been eliminated as of the beginning of the prior year, net earnings for the third quarter ended April 28, 2002 would have been $109 million, or $.27 per share. Net earnings for the third quarter of the prior year were impacted by costs of approximately $4 million (slightly less than $.01 per share) related to the Australian manufacturing reconfiguration. The increase in earnings was also due to higher sales during the quarter and a lower effective tax rate compared to the prior year, partially offset by higher administrative expenses and higher pension expense in 2003.

For the nine months ended April 27, 2003, earnings before the cumulative effect of accounting change were $552 million compared to $470 million in the year-ago period. Excluding amortization of $39 million eliminated under SFAS No. 142, net earnings for the nine months ended April 28, 2002 were $509 million. Earnings per share before the cumulative effect of accounting change rose to $1.34 from $1.14 as reported in 2002. Earnings per share for the year-ago period included amortization expense of approximately $.10 per share eliminated under SFAS No. 142. The increase over the prior year in net earnings before the cumulative effect of the accounting change is due to higher sales during the period, a reduction in costs related to the Australian manufacturing reconfiguration which were approximately $10 million in 2002 and $1 million in 2003, lower interest expense, and a reduction in the tax rate, partially offset by higher administrative expense and higher pension expense in 2003.

In connection with the adoption of SFAS No. 142, the company also recognized a one-time non-cash charge of $31 million (net of a $17 million tax benefit) in the first quarter of fiscal 2003, or $.08 per share, as a cumulative effect of accounting change. This charge relates to impaired goodwill associated with the Stockpot business, a foodservice business acquired in August 1998. See also Note (d) to the Consolidated Financial Statements.

Although SFAS No. 142 precludes restatement of prior period results, segment operating earnings have been adjusted to reflect the pro forma impact of amortization eliminated under the standard.

During the first quarter ended October 27, 2002, the company acquired two businesses for cash consideration of approximately $170 million and assumed debt of approximately $20 million. The company acquired Snack Foods Limited, a leader in the Australian salty snack category, and Erin Foods, the number two dry soup manufacturer in Ireland. Snack Foods Limited is included in the Biscuits and Confectionery segment. Erin Foods is included in the International Soup and Sauces segment. The allocation of the purchase price of these businesses is based on preliminary estimates and assumptions and is subject to revision. The businesses have annual sales of approximately $160 million.

THIRD QUARTER

Sales

Net sales in the quarter increased 17% to $1.60 billion from $1.37 billion last year. The change was attributed to a 6% increase in volume and mix, a 2% increase from higher selling prices, a 2% increase due to lower revenue reductions from trade promotion and consumer coupon redemption programs, a 3% increase from acquisitions and a 4% increase due to currency. Worldwide wet soup shipments increased 9% this quarter compared to last year. U.S. wet soup shipments increased 10%, while shipments outside the U.S. increased 8%.

An analysis of net sales by reportable segment follows:


	(millions)
	2003		2002		% Change

North America Soup and Away From Home	$	600	$	516		16	%
North America Sauces and Beverages		295		276		7
Biscuits and Confectionery		434		357		22
International Soup and Sauces		271		222		22

	$	1,600	$	1,371		17	%

The 16% increase in sales from North America Soup and Away From Home was due to an 8% increase in volume and mix, a 2% increase due to higher price realization, a 5% increase due to lower revenue reductions from trade promotion and consumer coupon redemption programs, and a 1% increase due to currency. The 10% increase in U.S. soup shipments was driven primarily by lower retailer inventory reductions in the quarter versus year ago and positive consumer takeaway as a result of new products, new shelving initiatives, and more productive trade promotion programs. Condensed soup

shipments increased 2% as the continued advertising of the improved vegetable soups was supplemented by consumer support for the expanded line of Fun Favorites soups for kids. Ready-to-serve shipments increased 17%, driven by the launch this year of Soup at Hand, a new convenient portable sipping soup, and by strong consumer takeaway gains in Select. Swanson broth also contributed to the segment sales increase, with a shipment increase of 38% over the prior year, behind the Easter holiday promotional activity and continued success of the cooking with broth marketing campaign. Canada reported sales growth versus last year driven by increased soup shipments, while Away From Home experienced increased soup shipments, offset by declines in frozen entrees and other product lines.

North America Sauces and Beverages reported a 7% increase in sales due to a 6% increase in volume and mix, a 1% increase from higher price realization, a 1% increase due to lower revenue reductions from trade promotion and consumer coupon redemption programs, offset by a 1% decline due to currency. Volume increases were reported across most product categories. Pace contributed to the volume growth behind strong base business growth. The successful launch of V8 Splash Smoothies drove volume growth in beverages. Franco-American canned pasta and gravies also reported volume growth. Prego pasta sauce volume was negatively impacted by significantly lower shipments of Prego pasta bake sauce, which was heavily promoted a year ago during its initial launch year. Latin America and Mexico reported strong volume gains.

Biscuits and Confectionery reported a 22% increase in sales due to an 11% increase from the acquisition of Snack Foods Limited in Australia, a 4% increase from volume and mix, a 4% increase from higher price realization, a 5% increase from currency, offset by a 2% increase in revenue reductions from higher trade promotion and consumer coupon redemption programs. The favorable currency impact principally reflects the strengthening of the Australian dollar. Pepperidge Farm reported volume increases across its portfolio due to gains in cookies, crackers, fresh bread and frozen products. Volume growth led to increased sales at Arnotts. Godiva Chocolatier’s worldwide sales increased due to growth in Asia, partially offset by continued weakness in same store sales in North America.

International Soup and Sauces reported an increase in sales of 22%. The favorable impact of currency accounted for a 17% increase, the acquisition of Erin Foods in Ireland added 3%, volume and mix added 3%, offset by a 1% decline due to lower price realization. Wet soup shipments in the Asia Pacific region increased double-digit during the period.

Gross Margin

Gross margin, defined as net sales less cost of products sold, increased $91 million. As a percent of sales, gross margin decreased from 43.0% in 2002 to 42.5% in 2003. The percentage decrease was due to product mix (approximately 0.8 percentage points) and costs associated with quality upgrades (approximately 1.4 percentage points), partially offset by benefits from cost productivity programs (approximately 1.3 percentage points) and costs incurred in 2002 related to the Australian manufacturing reconfiguration (approximately 0.4 percentage points).

Marketing and Selling Expenses

Marketing and selling expenses increased 7% in 2003 primarily as a result of the acquisitions and currency translation. As a percent of sales, Marketing and selling expenses were approximately 16% in 2003 and approximately 18% in 2002.

Administrative Expenses

Administrative expenses increased by approximately $43 million, or 46%. Currency and acquisitions accounted for 6 percentage points of the increase. The remaining increase was driven primarily by a number of items, including costs associated with ongoing litigation (approximately 10 percentage points), an increase in bad debt expense due to the bankruptcy of a major U.S. customer (approximately 4 percentage points), investments in information technology and supply chain to improve execution capabilities (approximately 6 percentage points), and an increase in employee benefit costs (approximately 7 percentage points).

Research and Development Expenses

Research and development expenses increased 35%, or $6 million, reflecting additional resources behind innovation initiatives and quality improvement programs.

Other Expenses

Other expenses declined $20 million from the prior year due primarily to the elimination of $17 million of amortization of goodwill and indefinite-lived intangible assets upon adoption of SFAS No. 142 as of the beginning of this fiscal year. In addition, stock-based incentive compensation costs declined as compared to the prior year as the company shifted elements of compensation programs in 2003 from stock-based toward a higher cash component. Cash compensation costs are classified by function on the Statements of Earnings. See also Note (l) of the Notes to Consolidated Financial Statements.

Operating Earnings

As previously noted, operating segment results for the period ended April 28, 2002 have been restated to reflect the pro forma impact of SFAS No. 142. Amortization expense of $17 million has been eliminated from the prior period results. Segment operating earnings, on a comparable basis, increased 17% from the prior year.

An analysis of operating earnings by reportable segment follows:


		(millions)
		2003			2002			% Change

North America Soup and Away From Home		$	147		$	111			32	%
North America Sauces and Beverages			59			61			(3	)
Biscuits and Confectionery			38			42			(10	)
International Soup and Sauces			37			26			42

	Subtotal		281			240			17
Corporate			(46	)		(33	)

		$	235		$	207			14	%

Earnings from North America Soup and Away From Home increased 32% primarily due to the increase in soup sales and lower marketing expenses.

Earnings from North America Sauces and Beverages decreased 3% due to increased marketing investments primarily behind the new product introduction of V8 Splash Smoothies.

Earnings from Biscuits and Confectionery decreased 10%, primarily due to increased advertising and promotional costs. Operating earnings in 2003 included $5 million of transitional expenses related to the planned closure of a Pepperidge Farm bakery in Norwalk, Connecticut and construction of a new bakery in Bloomfield, Connecticut. Operating earnings in 2002 included $6 million of costs related to the Australian manufacturing reconfiguration.

Earnings from International Soup and Sauces increased 42%. Currency translation contributed 19 percentage points of the increase. The remaining increase was driven by improved gross margin, reflecting volume growth in the higher margin dry soup business in Europe, and lower marketing spending.

Corporate expenses increased to $46 million from $33 million primarily due to costs associated with ongoing litigation.

Nonoperating Items

Interest expense increased to $45 million from $44 million in the prior year.

The effective tax rate was 32.1% for 2003 and 34.2% for 2002, as reported. The comparable tax rate for 2002 would be 33.1%, based on a pro forma adjustment for the adoption of SFAS No. 142. The reduction from the prior year reflects a number of factors which favorably impact foreign and U.S. rates.

NINE MONTHS

Sales

Sales for the nine months increased 6% to $5.22 billion from $4.91 billion last year. The change in net sales was attributed to a 1% increase from volume and mix, a 1% increase from higher selling prices, a 2% increase from acquisitions, and a 2% increase due to currency. Wet soup shipments increased 1% in the U.S. and 1% worldwide.

An analysis of net sales by reportable segment follows:


	(millions)
	2003		2002		% Change

North America Soup and Away From Home	$	2,170	$	2,134		2	%
North America Sauces and Beverages		920		908		1
Biscuits and Confectionery		1,330		1,164		14
International Soup and Sauces		803		704		14

	$	5,223	$	4,910		6	%

North America Soup and Away From Home reported a 2% increase in sales compared to the prior year. Volume and mix increased 1% coupled with a 1% increase due to higher price realization. U.S. shipments of condensed products declined 6%, while shipments of ready-to-serve products increased 5%. The ready-to-serve performance was driven primarily by the launch of Soup at Hand, the new portable sipping soup, and sales gains from Campbell’s Chunky and Select. Swanson broth shipments increased 12% over the prior year driven by strong holiday performance and the continued success of the cooking with broth marketing campaign. Canada reported sales growth over last year, while Away From Home sales declined slightly.

North America Sauces and Beverages reported a 1% increase in sales due to a 1% increase in volume and mix and a 1% increase from higher price realization, offset by a 1% decline due to currency translation related to the Mexican peso. Pace delivered double-digit volume growth. V8 Splash Smoothies, introduced in January, drove beverage volume gains. Franco-American canned pasta and gravies volumes declined during the period, while significantly lower volumes of Prego pasta bake sauce were reported relative to last year’s launch period.

Biscuits and Confectionery reported a 14% increase in sales due to a 7% increase from the Snack Foods acquisition, a 2% increase in volume and mix, a 3% increase from higher price realization, a 3% increase from currency, offset by a 1% decrease due to an increase in revenue reductions from trade promotion and consumer coupon redemption programs. Pepperidge Farm reported sales increases driven by biscuits, crackers and fresh bakery products due to product innovation, increased promotional activity, and

increased distribution. Godiva Chocolatier reported sales growth, primarily in Europe and Asia. Arnotts in Australia also contributed to the increase in sales.

The 14% increase in International Soup and Sauces sales was due to a 12% increase from currency, a 2% increase from the acquisition, and a 1% increase in volume and mix, offset by a 1% decline due to an increase in revenue reductions from trade promotion and consumer coupon redemption programs. The dry soup business in Europe delivered a positive sales performance, offset by declines in sales in wet soup and sauces in the United Kingdom and Germany.

Gross Margin

Gross margin, defined as net sales less cost of products sold, increased $123 million year-to-date. As a percent of sales, gross margin was 43.6% compared to 43.8% last year. The negative impact of product mix (approximately 0.1 percentage point) and costs associated with quality improvements (approximately 1.4 percentage points) was substantially offset by the benefits of cost productivity programs (approximately 1.1 percentage points) and comparison to a year ago which included higher costs related to the Australian manufacturing reconfiguration (approximately 0.2 percentage points).

Marketing and Selling Expense

Marketing and selling expenses increased from $837 million in 2002 to $865 million in 2003. The increase was due to the impact of currency translation and the acquisitions in Australia and Ireland. As a percent of sales, Marketing and selling expenses were approximately 17% in both 2003 and 2002.

Administrative Expenses

Administrative expenses increased by approximately 22%. Currency and acquisitions accounted for 6 percentage points of the increase. The remaining increase was driven primarily by a number of items, including increases in costs associated with ongoing litigation and bad debt expense (approximately 3 percentage points), investments in information technology and supply chain to improve execution capabilities (approximately 7 percentage points), and higher pension expense (approximately 2 percentage points).

Other Expenses

Other expenses declined from $108 million in 2002 to $35 million in 2003 due primarily to the elimination of $51 million of amortization upon adoption of SFAS No. 142 as of the beginning of this fiscal year. In 2003, Other expenses included a gain of approximately $8 million on the sale of the site of the recently closed facility in Australia. In addition, stock-based compensation costs declined as compared to the prior year as the company shifted elements of compensation programs in 2003 from stock-based toward a higher cash component. Cash compensation costs are classified by function on the Statements of Earnings. See also Note (l) of the Notes to Consolidated Financial Statements.

Operating Earnings

As previously noted, operating segment results for the period ended April 28, 2002 have been restated to reflect the pro forma impact of SFAS No. 142. Amortization expense of $51 million has been eliminated from prior period results. Segment operating earnings increased 4% versus the prior year. An analysis of operating earnings by segment follows:


		(millions)
		2003			2002			% Change

North America Soup and Away From Home		$	561		$	561			—	%
North America Sauces and Beverages			220			195			13
Biscuits and Confectionery			167			158			6
International Soup and Sauces			97			90			8

	Subtotal		1,045			1,004			4
Corporate			(95	)		(97	)

		$	950		$	907			5	%

Earnings from North America Soup and Away From Home were even with year ago as the benefits of sales growth and lower marketing expenditures were offset by increased costs associated with shelving and product development initiatives.

North America Sauces and Beverages reported a 13% increase in earnings due to favorable sales mix and manufacturing cost improvements.

Earnings from Biscuits and Confectionery increased 6%. Currency contributed approximately 3 percentage points of the increase. Operating earnings in 2002 included $14 million of costs associated with the Australian manufacturing reconfiguration. Operating earnings in 2003 were impacted by approximately $5 million of transitional expenses related to the closure of the Pepperidge Farm bakery in Norwalk, Connecticut and construction of a new bakery in Bloomfield, Connecticut, and $1 million of Australian reconfiguration costs.

Earnings from International Soup and Sauces increased 8% versus the year ago period. The increase was driven by favorable currency translation rates, partially offset by severance costs related to the closure of a dry soup plant in Ireland and costs related to a strategic procurement initiative in Europe.

Nonoperating Items

Net interest expense decreased to $136 million from $142 million in the prior year due to lower levels of debt and lower interest rates.

The effective tax rate was 32.2% for 2003 and 34.2% for 2002, as reported. The comparable tax rate for 2002 would be 33.5%, based on a pro forma adjustment for the adoption of SFAS No. 142. The reduction in the rate from the prior year reflects a number of factors which favorably impact foreign and U.S. tax rates.

Restructuring Programs

As a result of the reconfiguration of the manufacturing network of Arnotts in Australia, costs of approximately $1 million in 2003 and $13 million ($9 million after tax) in 2002 were recorded as Cost of products sold, primarily representing accelerated depreciation on assets to be taken out of service. In addition, in the second quarter ended January 27, 2002, the company recorded a $1 million restructuring charge related to planned severance activities under this program. These costs were related to a previously announced program designed to drive greater manufacturing efficiency resulting from the closure of the Melbourne plant. Approximately 550 jobs were eliminated due to the plant closure. As a result of this reconfiguration, the company expects annual pre-tax cost savings of approximately $10 million, most of which will be realized in 2004. See also Note (k) to the Consolidated Financial Statements.

Liquidity and Capital Resources

The company generated cash from operations of $706 million compared to $829 million last year. The decrease was primarily attributed to an increase in working capital during the period as compared to a decrease in working capital in the year ago period. The increase this year was a result of the very low level of working capital in place at the July 2002 fiscal year end.

Capital expenditures were $158 million compared to $112 million a year ago due to spending against the new Pepperidge Farm bakery and soup quality projects. As previously announced, capital expenditures are expected to be approximately $285 million in fiscal 2003 compared to $269 million in fiscal 2002. This increase was driven by the Pepperidge Farm bakery and soup quality projects partially offset by reduced spending in Australia on the manufacturing reconfiguration which was substantially completed in 2002.

Businesses acquired, as presented in the Statements of Cash Flows, primarily represents the acquisitions of Snack Foods Limited and Erin Foods in the first quarter of 2003 and a purchase price adjustment in 2002 related to the European dry soup and sauces acquisition.

The company purchased 432,000 shares in the quarter ended April 27, 2003 for approximately $9 million. In the first nine months, the company purchased 552,000 shares for approximately $13 million. The company did not repurchase shares in the nine month period last year. The company expects to repurchase sufficient shares over time to offset the impact of dilution from shares issued under incentive stock compensation plans.

In November 2002, the company terminated interest rate swap contracts with a notional value of $250 million that converted fixed-rate debt (6.75% notes due 2011) to variable and received $37 million. Of this amount, $3 million represented accrued interest earned on the swap prior to the termination date. The remainder will be amortized over the remaining life of the notes as a reduction to interest expense.

On November 25, 2002, the company issued $400 million of ten-year 5% fixed-rate notes due December 2012. The proceeds were used to retire $300 million of 6.15% notes and to repay commercial paper borrowings. In connection with this issuance, the company entered into ten-year interest rate swaps that converted $300 million of the fixed-rate debt to variable.

The company believes that foreseeable liquidity, including the resolution of the contingencies described in Note (m) to the Consolidated Financial Statements, and capital resource requirements can be met through anticipated cash flows from operations, management of working capital, long-term borrowings under its shelf registration, and short-term borrowings, including commercial paper. The company believes that its sources of financing are adequate to meet its liquidity and capital resource requirements. The cost and terms of any future financing arrangements depend on the market conditions and the company’s financial position at that time.

At April 27, 2003, the company had approximately $1.3 billion of notes payable due within one year and $38 million of standby letters of credit issued on behalf of the company. The company maintains $1.8 billion of committed revolving credit facilities, which remain unused at April 27, 2003, except for the $38 million of standby letters of credit issued on behalf of the company. The credit facilities support the company’s commercial paper program. The company is in compliance with the covenants contained in its revolving credit facilities and debt securities.

Significant Accounting Estimates

The consolidated financial statements of the company are prepared in conformity with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. The company’s accounting principles are described in the 2002 Annual Report on Form 10-K.

The following areas all require the use of subjective or complex judgments, estimates and assumptions:

Trade and consumer promotion programs – The company offers various sales incentive programs to customers and consumers, such as cooperative advertising programs, feature price discounts, in-store display incentives and coupons. The recognition of the costs for these programs, which are classified as a reduction of revenue, involves use of judgment related to performance and redemption estimates. Estimates are made based on

historical experience and other factors. Actual expenses may differ if the level of redemption rates and performance vary from estimates.

Valuation of long-lived assets – Long-lived assets, including fixed assets and intangibles, are reviewed for impairment as events or changes in circumstances occur, indicating that the carrying amount of the asset may not be recoverable. Discounted cash flow analyses are used to assess nonamortizable intangible asset impairment, while undiscounted cash flow analyses are used to assess long-lived asset impairment. The estimates of future cash flows involve considerable management judgment and are based upon assumptions about expected future operating performance. Assumptions used in these forecasts are consistent with internal planning. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance, and economic conditions.

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

The discount rate is established as of the company’s fiscal year-end measurement date based on high-quality, long-term debt securities. The estimated return on plan assets is a long-term assumption based upon historical experience and expected future performance, considering the company’s current and projected investment mix. Within any given fiscal period, significant differences may arise between the actual return and the estimated long-term return on plan assets. The value of plan assets, used in the calculation of pension expense, is determined on a calculated method that recognizes 20% of the difference between the actual fair value of assets and the expected calculated method.

The weighted-average discount rate as of July 28, 2002 was 6.90% and the weighted-average expected return on plan assets was 9.30%. Based on current economic conditions, both assumptions may be reduced as of the 2003 valuation date. This would result in an increase in pension expense and postretirement medical expense in fiscal 2004. In connection with the upcoming year-end valuation, the company may also recognize an additional minimum liability charge and resultant non-cash charge to equity if the declines in plan asset performance and discount rate continue. Contributions to the U.S. plans are not required in 2003. However, the likelihood of future pension contributions has increased as a result of the economic conditions previously noted.

The assumptions used in the year-end valuation will be finalized at the fiscal year end. Estimated sensitivities related to the U.S. pension plans are as follows: a 50 basis point reduction in the discount rate would increase expense by approximately $8 million; a 50 basis point reduction in the estimated return on assets would increase expense by approximately $7 million. Based on the plan asset performance fiscal year to date, it is very likely that pension expense will increase significantly next year as a result of

increased amortization of unrecognized losses, reduced return on asset assumptions and a reduced discount rate.

Income taxes - The effective tax rate and the tax bases of assets and liabilities reflect management’s estimate of the ultimate outcome of various tax audits and issues. In addition, valuation allowances are established for deferred tax assets where the amount of expected future taxable income from operations does not support the realization of the asset.

Recently Issued Accounting Pronouncements

The company adopted SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” on July 29, 2002. This standard addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This standard supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions,” for the disposal of a segment of a business. Long-lived assets are tested for impairment if certain triggers occur. This standard is generally effective for the company on a prospective basis. The company does not expect the adoption of this standard to have a material impact on the financial statements.

In July 2002, the FASB issued SFAS No. 146 “Accounting for Exit or Disposal Activities.” The provisions of this standard are effective for disposal activities initiated after December 31, 2002, with early application encouraged. The company does not expect the adoption of this standard to have a material impact on the financial statements.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure.” This standard amends the transition and disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation.” The increased disclosure requirements are applicable to the company’s interim and annual financial statements beginning in the third quarter of the current fiscal year. The required disclosures are included in Note (b) to the Consolidated Financial Statements. The company currently does not intend to transition to the use of a fair value method for accounting for stock-based compensation. As permitted by SFAS No. 148, the company accounts for stock option grants and restricted stock awards in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. Accordingly, no compensation expense has been recognized for stock options since all options granted had a exercise price equal to the market value of the underlying stock on the grant date.

In November 2002, FASB Interpretation No. 45 (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” was issued. FIN 45 clarifies the requirements relating to a guarantor’s accounting for, and disclosure of, the issuance of certain types of guarantees. FIN 45 requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. The initial recognition and

measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure provisions are included in Note (o) to the Consolidated Financial Statements.

In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB 51.” This Interpretation addressed consolidation by business enterprises of certain variable interest entities (“VIEs”). The Interpretation is effective immediately for all enterprises with variable interests in VIEs created after January 31, 2003. For variable interests in VIEs created before February 1, 2003, the provisions of this Interpretation will be applicable no later than the beginning of the first interim or annual period beginning after June 15, 2003. Further, the disclosure requirements of the Interpretation are applicable for all financial statements initially issued after January 31, 2003, regardless of the date on which the VIE was created. The company is in the process of completing its evaluation of this Interpretation, but does not expect the adoption to have a material impact on the financial statements.

The Emerging Issues Task Force (EITF) reached a consensus on Issue No. 02-17, “Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination” which clarifies certain recognition requirements in SFAS No. 141, “Business Combinations.” The guidance in this Issue is to be applied to business combinations consummated and goodwill impairments tests performed after October 25, 2002. The company does not expect its application to have a material impact on the financial statements.

In April 2003, the FASB issued SFAS No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This standard amends and clarifies financial accounting and reporting for derivative instruments and hedging activities, primarily as a result of decisions made by the FASB Derivatives Implementation Group subsequent to the original issuance of SFAS No. 133 and in connection with other FASB projects. This standard is generally effective prospectively for contracts and hedging relationships entered into or modified after June 30, 2003. The company is currently evaluating the impact of this standard.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” SFAS No. 150 changes the accounting for certain financial instruments that, under previous guidance, could be classified as equity or “mezzanine” equity, by now requiring those instruments to be classified as liabilities (or assets in some circumstances) in the statement of financial position. Further, SFAS No. 150 requires disclosure regarding the terms of those instruments and settlement alternatives. The guidance in SFAS No. 150 is generally effective for all financial instruments entered into or modified after May 31, 2003, and is otherwise effective at the beginning of the first interim period beginning after June 15, 2003. The company is in the process of evaluating this standard, but does not expect the adoption to have a material impact on the financial statements.

Recent Developments

On May 19, 2003, the company announced results for the third quarter 2003 and commented on the outlook for earnings per share for the year. In that announcement, the company provided a full year earnings estimate of approximately $1.49 to $1.51 per share, before the cumulative effect of the accounting change. This compares to $1.28 per share as reported in 2002, which included amortization expense of $.13 per share and costs of $.03 per share related to the Australian reconfiguration. For the fourth quarter of 2003, the company expects earnings per share to be in the range of $.15 to $.17. In addition, on May 19, 2003, the company announced several new soup initiatives and updates for 2004.

Forward-Looking Statements

This quarterly report contains certain statements which reflect the company’s current expectations regarding future results of operations, economic performance, financial condition and achievements of the company. The company tries, wherever possible, to identify these forward-looking statements by using words such as “anticipate,” “believe,” “estimate,” “expect,” “will” and similar expressions. These statements reflect the company’s current plans and expectations and are based on information currently available to it. They rely on a number of assumptions and estimates which could be inaccurate and which are subject to risks and uncertainties.

The company wishes to caution the reader that the following important factors, and those important factors described in other Securities and Exchange Commission filings of the company, or in the company’s 2002 Annual Report, could affect the company’s actual results and could cause such results to vary materially from those expressed in any forward-looking statements made by, or on behalf of, the company:

• the company’s ability to achieve the goals of its “transformation plan”;

• the impact of strong competitive response to the company’s efforts to leverage its brand power with product innovation, promotional programs and new advertising; and changes in consumer demand for the company’s products;

• the risks in the marketplace associated with trade and consumer acceptance of product improvements, shelving initiatives, and new product introductions;

• the company’s ability to achieve sales and earnings forecasts, which are based on assumptions about sales volume and product mix, and the impact of increased marketing investments;

• the company’s ability to realize forecasted cost savings, including the projected outcome of global supply chain management programs;

• the company’s ability to complete the successful post-acquisition integration of acquired businesses into existing operations;

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

• the difficulty of predicting the pattern of inventory movements by the company’s trade customers and of predicting changes in the policies of its customers, such as changes in customer inventory levels and access to shelf space;

• the impact of fluctuations in the supply and cost of raw materials;

• the impact of unforeseen economic changes in currency exchange rates, interest rates, tax rates, equity markets, inflation rates, recession, and other external factors over which the company has no control, including the possibility of increased pension expense and contributions resulting from continued decline in stock market returns; and

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

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For information regarding the company’s exposure to certain market risks, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in the Annual Report on Form 10-K for fiscal 2002. There have been no significant changes in the company’s portfolio of financial instruments or market risk exposures from the fiscal 2002 year-end except that in November 2002, the company terminated interest rate swap contracts with a notional value of $250 million that converted fixed-rate debt (6.75% notes due 2011) to variable and received $37 million. In November 2002, the company also entered into interest rate swaps that converted $300 million of the $400 million fixed-rate notes issued in November 2002 to variable. See the Liquidity and Capital Resources section of Management’s Discussion and Analysis of Results of Operations and Financial Condition for an additional discussion of these interest rate swap contracts.

ITEM 4. CONTROLS AND PROCEDURES

a. Evaluation of Disclosure Controls and Procedures

The company, under the supervision and with the participation of its management, including the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of the company’s disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”). Based on such evaluation, the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer have concluded that, as of the Evaluation Date, the company’s disclosure controls and procedures are effective, and ensure that all material information relating to the company (including its consolidated subsidiaries) required to be included in the company’s reports filed or submitted under the Exchange Act is made known to them on a timely basis.

b. Changes in Internal Controls

Since the Evaluation Date, there were no significant changes in the company’s internal controls or in other factors that could significantly affect such controls.

PART II

ITEM 1. LEGAL PROCEEDINGS

As previously reported, ten purported class action lawsuits were commenced against the company and two of its former executives in the United States District Court for the District of New Jersey. The lawsuits were subsequently consolidated, and an amended consolidated complaint was filed alleging, among other things, that the company and the former executives misrepresented the company’s financial condition between September 8, 1997 and January 8, 1999, by failing to disclose alleged shipping and revenue recognition practices in connection with the sale of certain company products at the end of the company’s fiscal quarters in violation of Section 10 (b) and 20 (a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. On February 6, 2003, the company announced it had reached an agreement in principle to settle this case. The district court’s order approving the settlement was issued on May 22, 2003; that order is subject to appeal until June 23, 2003. Pursuant to the court’s order, all claims have been dismissed and the litigation has been terminated in exchange for a payment of $35 million, which is expected to be made on June 23, 2003. The full amount of the payment will be covered by insurance. The settlement does not constitute an admission of fault or liability by the company or any other defendant.

As also previously reported, on March 30, 1998, the company effected a spinoff of several of its non-core businesses to Vlasic Foods International Inc. (“VFI”). VFI and several of its affiliates (collectively, “Vlasic”) commenced cases under Chapter 11 of the Bankruptcy Code on January 29, 2001 in the United States Bankruptcy Court for the District of Delaware. Vlasic’s Second Amended Joint Plan of Distribution under Chapter 11 (the “Plan”) was confirmed by an order of the Bankruptcy Court dated November 16, 2001, and became effective on or about November 29, 2001. The Plan provides for the assignment of various causes of action allegedly belonging to the Vlasic estates, including claims against the company allegedly arising from the spinoff, to VFB LLC, a limited liability company (“VFB”) whose membership interests are to be distributed under the Plan to Vlasic’s general unsecured creditors.

On February 19, 2002, VFB commenced a lawsuit against the company and several of its subsidiaries in the United States District Court for the District of Delaware alleging, among other things, fraudulent conveyance, illegal dividends and breaches of fiduciary duty by Vlasic directors alleged to be under the company’s control. The lawsuit seeks to hold the company liable in an amount necessary to satisfy all unpaid claims against Vlasic (which VFB estimates in the complaint to be $250 million), plus unspecified exemplary and punitive damages. While this case is still in the discovery stage and the ultimate disposition of complex litigation is inherently difficult to assess, the company believes the action is without merit and is defending the case vigorously.

As also previously reported, the company received an Examination Report from the Internal Revenue Service on December 23, 2002, which included a challenge to the treatment of gains and interest deductions claimed in the company’s fiscal 1995 federal income tax return, relating to transactions involving government securities. If the proposed adjustment were upheld, it would require the company to pay a net amount of

approximately $100 million in taxes, accumulated interest to date, and penalties. Interest will continue to accrue until the matter is resolved. The company believes these transactions were properly reported on its federal income tax return in accordance with applicable tax laws and regulations in effect during the period involved and is challenging these adjustments vigorously. While the outcome of proceedings of this type cannot be predicted with certainty, the company believes that the ultimate outcome of this matter will not have a material impact on the consolidated financial condition or results of operation of the company.

In April 2003, the company began discussions with the New Jersey Department of Environmental Protection (“NJDEP”) regarding certain air emissions from the company’s South Plainfield, New Jersey flavoring and spice mix plant. These emissions may exceed limits established pursuant to the New Jersey Air Pollution Control Act. The discussions are likely to result in the company installing air emission control equipment on an agreed upon schedule. The NJDEP may require additional expenditures, which can not be determined at this time. As of May 30, 2003, the company incurred costs of approximately $83 thousand related to the evaluation of this issue, and the company expects to spend up to $1 million (exclusive of any other amounts) on the installation of required air emissions control equipment. The company does not expect the cost of installing the emission control equipment or any other expenditures required by the NJDEP will have a material impact on the consolidated financial condition or results of operation of the company.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a. Exhibits

99 (i) Certification of Douglas R. Conant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99 (ii) Certification of Robert A. Schiffner pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b. Reports on Form 8-K

None.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CAMPBELL SOUP COMPANY

Date: June 10, 2003 By: /s/ Robert A. Schiffner

Robert A. Schiffner

Senior Vice President and

Chief Financial Officer

By: /s/ Ellen Oran Kaden

Ellen Oran Kaden

Senior Vice President –

Law and Government Affairs

CERTIFICATIONS

I, Douglas R. Conant, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Campbell Soup Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4 The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: June 10, 2003

By: /s/ Douglas R. Conant

Douglas R. Conant

President and Chief Executive

Officer

I, Robert A. Schiffner, certify that:

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: June 10, 2003

By: /s/ Robert A. Schiffner

Robert A. Schiffner

Senior Vice President and

Chief Financial Officer

INDEX TO EXHIBITS

Exhibits

99 (i) Certification of Douglas R. Conant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99 (ii) Certification of Robert A. Schiffner pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(a)		Basis of Presentation 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. All such adjustments are of a normal recurring nature. 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, 2002, except as discussed below. Certain reclassifications were made to the prior year amounts to conform with current presentation. The results for the period are not necessarily indicative of the results to be expected for other interim periods or the full year.

(b)		Accounting for Stock-Based Compensation In December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure.” This standard amends the transition and disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation.” As permitted by SFAS No. 148, the company accounts for stock option grants and restricted stock awards in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. Accordingly, no compensation expense has been recognized for stock options since all options granted had an exercise price equal to the market value of the underlying stock on the grant date. Restricted stock awards are expensed. See also Note (l) of the Notes to Consolidated Financial Statements. The company currently does not intend to transition to the use of a fair value method for accounting for stock-based compensation. The following table illustrates the effect on net earnings and earnings per share if the company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.

		¹ Represents restricted stock expense

(c)		Acquisitions During the first quarter ended October 27, 2002, the company acquired two businesses for cash consideration of approximately $170 and assumed debt of approximately $20. The company acquired Snack Foods Limited, a leader in the Australian salty snack category, and Erin Foods, the number two dry soup manufacturer in Ireland. Snack Foods Limited is included in the Biscuits and Confectionery segment. Erin Foods is included in the International Soup and Sauces segment. The allocation of the purchase price of these businesses is based on preliminary estimates and assumptions and is subject to revision. The businesses have annual sales of approximately $160.

(d)		Goodwill and Intangible Assets On July 29, 2002 the company adopted SFAS No. 142 “Goodwill and Other Intangible Assets.” Under this standard, goodwill and intangible assets with indefinite useful lives are no longer amortized, but rather are to be tested at least annually for impairment. Intangible assets with finite lives should continue to be amortized over the estimated useful life and reviewed for impairment in accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-lived Assets.” In connection with the adoption of SFAS No. 142, the company was required to perform an impairment assessment on all goodwill and indefinite-lived intangible assets as of July 29, 2002. The assessment of the indefinite-lived intangible assets requires a comparison between the fair value and carrying value of the intangible asset. To the extent the carrying value exceeds the fair value, an impairment loss is recognized. The assessment of goodwill is a two-step process in which the first step identifies impairment by requiring a comparison of the fair value of each reporting unit to the carrying value, including goodwill allocated to the unit. If the carrying value exceeds the fair value,

		goodwill is considered to be impaired. The amount of impairment is measured in a second step as the difference between the carrying value of goodwill and the “implied” fair value of goodwill, which is determined by calculating goodwill as if the reporting unit had just been acquired and accounted for as a business combination. Fair values were determined using discounted cash flow analyses. As a result of this evaluation, the company recorded a non-cash after-tax charge of $31 (net of a $17 tax benefit) for impaired goodwill associated with the Stockpot business, a foodservice business acquired in August 1998. Stockpot is a reporting unit in the North America Soup and Away From Home segment. This non-cash charge was recorded as a cumulative effect of a change in accounting principle. The impairment of Stockpot goodwill is the result of a reduction in actual sales attained and forecasted future sales growth relative to projections made at the time of the acquisition.

		The provisions of SFAS No. 142 are to be applied on a prospective basis and prior year results are not to be restated. The following tables present a reconciliation of earnings before cumulative effect of accounting change, adjusted to exclude amortization of goodwill and indefinite-lived intangible assets:

(e)		Comprehensive Income Total comprehensive income comprises net earnings, net foreign currency translation adjustments, minimum pension liability adjustments, and net unrealized gains (losses) on cash-flow hedges.

		Total comprehensive income for the three months ended April 27, 2003 and April 28, 2002, was $175 and $141, respectively. Total comprehensive income for the nine months ended April 27, 2003 and April 28, 2002, was $653 and $498, respectively.

		The components of Accumulated other comprehensive loss, as reflected in the Statements of Shareowners’ Equity (Deficit), consisted of the following:

(f)		Earnings Per Share For the periods presented in the Statements of Earnings, the calculations of basic EPS and EPS assuming dilution vary in that the weighted average shares outstanding assuming dilution included the incremental effect of stock options.

(g)		Segment Information Campbell Soup Company, together with its consolidated subsidiaries, is a global manufacturer and marketer of high quality, branded convenience food products. The company operates in four segments: North America Soup and Away From Home, North America Sauces and Beverages, Biscuits and Confectionery, and International Soup and Sauces.

		The North America Soup and Away From Home segment comprises the retail soup and Away From Home businesses in the U.S. and Canada. The U.S. retail business includes the Campbell’s brand condensed and ready-to-serve soups and Swanson broths. The segment includes the company’s total business in Canada, which comprises the Habitant and Campbell’s soups, Prego pasta sauce and V8 juices. The Away From Home operations represent the distribution of products such as Campbell’s soups, Campbell’s specialty entrees, beverage products, other prepared foods and Pepperidge Farm products through various food service channels in North America. The North America Sauces and Beverages segment includes U.S. retail sales for Prego pasta sauces, Pace Mexican sauces, Franco-American canned pastas and gravies, V8 vegetable juices, V8 Splash juice beverages, and Campbell’s tomato juice, as well as the total of all businesses in Mexico and other Latin American countries. The Biscuits and Confectionery segment includes all retail sales of Pepperidge Farm cookies, crackers, breads and frozen products in North America, Arnott’s biscuits and crackers in Australia and Asia Pacific, Arnotts Snackfoods salty snacks in Australia, and Godiva chocolates worldwide. The International Soup and Sauces segment comprises operations outside of North America, including Erasco and Heisse Tasse soups in Germany, Liebig and Royco soups and Lesieur sauces in France, Campbell’s and Batchelors soups, Oxo stock cubes and Homepride sauces in the United Kingdom, Devos Lemmens mayonnaise and cold sauces and Campbell’s and Royco soups in Belgium, Blå Band soups in Sweden, and McDonnell’s and Erin soups and sauces in Ireland. In Asia Pacific, operations include Campbell’s soups and stock and Swanson broths across the region.

		Accounting policies for measuring segment assets and earnings before interest and taxes are substantially consistent with those described in the company’s 2002 Annual Report on Form 10-K. The company evaluates segment performance before interest and taxes. The North America Soup and Away From Home and North America Sauces and Beverages segments operate under an integrated supply chain organization, sharing substantially all manufacturing, warehouse, distribution and sales activities. Accordingly, assets have been allocated between the two segments based on various measures, for example, budgeted production hours for fixed assets and depreciation. Segment financial information for the three and nine months ended April 27, 2003 reflects the adoption of SFAS No.


			Earnings			Depreciation
			Before Interest			and		Capital
Three Months Ended	Net Sales		and Taxes			Amortization		Expenditures

North America Soup and Away From Home	$	600	$	147		$	17	$	15
North America Sauces and Beverages		295		59			9		10
Biscuits and Confectionery		434		38			24		31
International Soup and Sauces		271		37			8		5
Corporate and Eliminations¹		—		(46	)		11		4

Total	$	1,600	$	235		$	69	$	65


			Earnings			Depreciation
			Before Interest			and		Capital		Segment
Nine Months Ended	Net Sales		and Taxes			Amortization		Expenditures		Assets

North America Soup and Away From Home	$	2,170	$	561		$	46	$	38	$	1,193
North America Sauces and Beverages		920		220			25		24		1,206
Biscuits and Confectionery		1,330		167			63		72		1,606
International Soup and Sauces		803		97			24		14		1,776
Corporate and Eliminations¹		—		(95	)		22		10		334

Total	$	5,223	$	950		$	180	$	158	$	6,115


			Earnings			Depreciation
			Before Interest			and		Capital
Three Months Ended	Net Sales		and Taxes			Amortization		Expenditures

North America Soup and Away From Home	$	516	$	111		$	15	$	18
North America Sauces and Beverages		276		61			8		11
Biscuits and Confectionery		357		42			22		15
International Soup and Sauces		222		26			8		4
Corporate and Eliminations¹		—		(33	)		12		3

Total	$	1,371	$	207		$	65	$	51


			Earnings			Depreciation
			Before Interest			and		Capital		Segment
Nine Months Ended	Net Sales		and Taxes			Amortization		Expenditures		Assets

North America Soup and Away From Home	$	2,134	$	561		$	42	$	31	$	1,179
North America Sauces and Beverages		908		195			24		19		1,195
Biscuits and Confectionery		1,164		158			66		44		1,250
International Soup and Sauces		704		90			21		12		1,526
Corporate and Eliminations¹		—		(97	)		25		6		639

Total	$	4,910	$	907		$	178	$	112	$	5,789

		Approximately 58% and 60% of inventory in 2003 and 2002, respectively, is accounted for on the last in, first out (LIFO) method of determining cost. If the first in, first out inventory valuation method had been used exclusively, inventories would not differ materially from the amounts reported at April 27, 2003 and July 28, 2002.

(i)		Notes Payable and Long-Term Debt On November 25, 2002, the company issued $400 ten-year 5% fixed-rate notes. The proceeds were used to retire $300 of 6.15% notes and to repay commercial paper borrowings.

(j)		Accounting for Derivative Instruments The company utilizes certain derivative financial instruments to enhance its ability to manage risks which exist as part of ongoing business operations, including interest rate, foreign currency, commodity and certain equity-linked employee compensation exposures. Derivative instruments are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The company does not enter into contracts for speculative purposes, nor is it a party to any leveraged derivative instrument.

		All derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered into, the company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair-value hedge), (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge), (3) a foreign-currency fair-value or cash-flow hedge (foreign-currency hedge), or (4) a hedge of a net investment in a foreign operation. Some derivatives may also be considered natural hedging instruments (changes in fair value are recognized to act as economic offsets to changes in fair value of the underlying hedged item and do not qualify for hedge accounting under SFAS No. 133).

		Interest Rate Swaps The company finances a portion of its operations through debt instruments primarily consisting of commercial paper, notes, debentures and bank loans. The company periodically utilizes interest rate swap agreements, including forward-starting swaps, to minimize worldwide financing costs and to achieve a targeted ratio of variable versus fixed-rate debt.

		In November 2002, the company terminated interest rate swap contracts with a notional value of $250 that converted fixed-rate debt (6.75% notes due 2011) to variable and received $37. Of this amount, $3 represented accrued interest earned on the swap prior to the termination date. The remainder will be amortized over the remaining life of the notes as a reduction to interest expense.

		In connection with the $400 ten-year 5% fixed-rate notes due 2012 (referred to in Note (i)), the company entered into ten-year interest rate swaps that converted $300 of the fixed-rate debt to variable.

		Variable-to-fixed interest rate swaps are accounted for as cash-flow hedges. Consequently, the effective portion of unrealized gains (losses) is deferred as a component of Accumulated other comprehensive income (loss) and is recognized in earnings at the time the hedged item affects earnings. The amounts paid or received on the hedge are recognized as adjustments to interest expense. The notional value of all outstanding cash-flow interest rate swaps at April 27, 2003 totaled $300 with a maximum maturity of October 2003. The fair value of these swaps was $(3) as of April 27, 2003.

		Fixed-to-variable interest rate swaps are accounted for as fair-value hedges. Gains and losses on these instruments are recorded in earnings as adjustments to interest expense, offsetting gains and losses on the hedged item. The notional amounts of all outstanding fair-value interest rate swaps at April 27, 2003 totaled $475 with a maximum maturity date of December 2012. The fair value of such instruments was $25 as of April 27, 2003.

		Foreign Currency Contracts The company is exposed to foreign currency exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries. The company utilizes foreign currency forward purchase and sale contracts, options and cross-currency swaps in order to manage the volatility associated with foreign currency purchases and certain intercompany transactions in the normal course of business.

		Qualifying forward exchange and cross-currency swap contracts are accounted for as cash-flow hedges when the hedged item is a forecasted transaction, or when future cash flows related to a recognized asset or liability are expected to be received or paid. The effective portion of the changes in fair value on these instruments is recorded in Accumulated other comprehensive income (loss) and is reclassified into the Statements of Earnings on the same line item and in the same period or periods in which the hedged transaction affects earnings. The assessment of effectiveness for contracts is based on changes in the spot rates. The fair value of these instruments was $(79) at April 27, 2003.

		Qualifying forward exchange contracts are accounted for as fair-value hedges when the hedged item is a recognized asset, liability or firm commitment. The fair value of such contracts was not material at April 27, 2003.

		The company also enters into certain foreign currency derivative instruments that are not designated as accounting hedges. These instruments are primarily intended to reduce volatility of certain intercompany financing transactions. Gains and losses on derivatives not designated as accounting hedges are typically recorded in Other expense, as an offset to gains (losses) on the underlying transaction. The fair value of such contracts was $(15) at April 27, 2003.

		Foreign currency forward contracts typically have maturities of less than one year. Principal currencies include the Australian dollar, British pound, Canadian dollar, euro, Japanese yen and Swedish krona.

		As of April 27, 2003, the accumulated derivative net income in other comprehensive income for cash-flow hedges, including the forward exchange and cross-currency contracts, variable-to-fixed interest rate swaps and forward starting swap contracts was $1, net of tax. At April 28, 2002, the accumulated derivative net loss in other comprehensive income was approximately $2, net of tax. Reclassifications from Accumulated other comprehensive income (loss) into the Statements of Earnings during the quarter ended April 27, 2003 were not material. Reclassifications during the remainder of fiscal year 2003 are not expected to be material. There were no discontinued cash-flow hedges during the quarter. At April 27, 2003, the maximum maturity date of any cash-flow hedge was approximately eight years.

		Other Contracts The company is exposed to equity price changes related to certain employee compensation obligations. Swap contracts are utilized to hedge exposures relating to certain employee compensation obligations linked to the total return of the Standard & Poor’s 500 Index and the total return of the company’s capital stock. The company pays a variable interest rate and receives the equity returns under these instruments. The notional value of the equity swap contracts, which mature in 2004, was $19 at April 27, 2003. These instruments are not designated as accounting hedges. Gains and losses are recorded in Other expense. The net asset recorded under these contracts at April 27, 2003 was approximately $1.

		Other disclosures related to hedge ineffectiveness and gains (losses) excluded from the assessment of hedge effectiveness have been omitted due to the insignificance of these amounts.

(k)		Restructuring Program As a result of the reconfiguration of the manufacturing network of Arnotts in Australia, costs of approximately $1 in 2003 and $13 ($9 after tax) in 2002 were recorded as Cost of products sold, primarily representing accelerated depreciation on assets to be taken out of service. In addition, in the second quarter ended January 27, 2002, the company recorded a $1 restructuring charge related to planned severance activities under this program. These costs were related to a previously announced program designed to drive greater manufacturing efficiency resulting from the closure of the Melbourne plant. Approximately 550 jobs were eliminated due to the plant closure.

		A summary of restructuring reserves at April 27, 2003 and related activity is as follows:

(m)		Contingencies On March 30, 1998, the company effected a spinoff of several of its non-core businesses to Vlasic Foods International Inc. (“VFI”). VFI and several of its affiliates (collectively, “Vlasic”) commenced cases under Chapter 11 of the Bankruptcy Code on January 29, 2001 in the United States Bankruptcy Court for the District of Delaware. Vlasic’s Second Amended Joint Plan of Distribution under Chapter 11 (the “Plan”) was confirmed by an order of the Bankruptcy Court dated November 16, 2001, and became effective on or about November 29, 2001. The Plan provides for the assignment of various causes of action allegedly belonging to the Vlasic estates, including claims against the company allegedly arising from the spinoff, to VFB LLC, a limited liability company (“VFB”) whose membership interests are to be distributed under the Plan to Vlasic’s general unsecured creditors.

		On February 19, 2002, VFB commenced a lawsuit against the company and several of its subsidiaries in the United States District Court for the District of Delaware alleging, among other things, fraudulent conveyance, illegal dividends and breaches of fiduciary duty by Vlasic directors alleged to be under the company’s control. The lawsuit seeks to hold the company liable in an amount necessary to satisfy all unpaid claims against Vlasic (which VFB estimates in the complaint to be $250), plus unspecified exemplary and punitive damages. While this case is still in the discovery stage and the ultimate disposition of complex litigation is inherently difficult to assess, the company believes the action is without merit and is defending the case vigorously.

		The company received an Examination Report from the Internal Revenue Service on December 23, 2002, which included a challenge to the treatment of gains and interest deductions claimed in the company’s fiscal 1995 federal income tax return, relating to transactions involving government securities. If the proposed adjustment were upheld, it would require the company to pay a net amount of approximately $100 in taxes, accumulated interest to date, and penalties. Interest will continue to accrue until the matter is resolved. The company believes these transactions were properly reported on its federal income tax return in accordance with applicable tax laws and regulations in effect during the period involved and is challenging these adjustments vigorously. While the outcome of proceedings of this type cannot be predicted with certainty, the company believes that the ultimate outcome of this matter will not have a material impact on the consolidated financial condition or results of operation of the company.

(n)		Litigation Settlement Early in 2000, ten purported class action lawsuits were commenced against the company and two of its former executives in the United States District Court for the District of New Jersey. The lawsuits were subsequently consolidated, and an amended consolidated complaint was filed alleging, among other things, that the company and the former executives misrepresented the company’s financial condition between September 8, 1997 and January 8, 1999, by failing to disclose alleged shipping and revenue recognition practices in connection with the sale of certain company products at the end of the company’s fiscal quarters in violation of Section 10 (b) and 20 (a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. On February 6, 2003, the company announced it had reached an agreement in principle to settle this case. The district court’s order approving the settlement was issued on May 22, 2003; that order is subject to appeal until June 23, 2003. Pursuant to the court’s order, all claims have been dismissed and the litigation has been terminated in exchange for a payment of $35, which is expected to be made on June 23, 2003. The full amount of the payment will be covered by insurance. The company recorded a $35 liability for the amount due under the agreement and a $35 receivable from the anticipated insurance recovery as of January 26, 2003. The settlement does not constitute an admission of fault or liability by the company or any other defendant.

(o)		Guarantees In November 2002, FASB Interpretation No. 45 (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” was issued. FIN 45 clarifies the requirements relating to a guarantor’s accounting for, and disclosure of, the issuance of certain types of guarantees. FIN 45 requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. The initial recognition and measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002.

		The company guarantees almost 1,200 bank loans made to Pepperidge Farm independent sales distributors for the purchase of distribution routes. The maximum potential amount of future payments the company could be required to make under the guarantees is approximately $80. The company’s guarantees are secured by the distribution routes. The company does not believe it is probable that it will be required to make guarantee payments as a result of defaults on the bank loans guaranteed. Prior to the adoption of FIN 45, no amounts were recognized on the Consolidated Balance Sheets related to these guarantees. The amount recognized as of April 27, 2003 is not material.

(p)		Recently Issued Accounting Pronouncements The company adopted SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” on July 29, 2002. This standard addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This standard supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions,” for the disposal of a segment of a business. Long-lived assets are tested for impairment if certain triggers occur. This standard is generally effective for the company on a prospective basis. The company does not expect the adoption of this standard to have a material impact on the financial statements.

		In July 2002, the FASB issued SFAS No. 146 “Accounting for Exit or Disposal Activities.” The provisions of this standard are effective for disposal activities initiated after December 31, 2002, with early application encouraged. The company does not expect the adoption of this standard to have a material impact on the financial statements.

		In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB 51.” This Interpretation addressed consolidation by business enterprises of certain variable interest entities (“VIEs”). The Interpretation is effective immediately for all enterprises with variable interests in VIEs created after January 31, 2003. For variable interests in VIEs created before February 1, 2003, the provisions of this Interpretation will be applicable no later than the beginning of the first interim or annual period beginning after June 15, 2003. Further, the disclosure requirements of the Interpretation are applicable for all financial statements initially issued after January 31, 2003, regardless of the date on which the VIE was created. The company is in the process of completing its evaluation of this Interpretation, but does not expect the adoption to have a material impact on the financial statements.

		The Emerging Issues Task Force (EITF) reached a consensus on Issue No. 02-17, “Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination” which clarifies certain recognition requirements in SFAS No. 141, “Business Combinations.” The guidance in this Issue is to be applied to business combinations consummated and goodwill impairment tests performed after

	•		the company’s ability to achieve the goals of its “transformation plan”;

	•		the impact of strong competitive response to the company’s efforts to leverage its brand power with product innovation, promotional programs and new advertising; and changes in consumer demand for the company’s products;

	•		the risks in the marketplace associated with trade and consumer acceptance of product improvements, shelving initiatives, and new product introductions;

	•		the company’s ability to achieve sales and earnings forecasts, which are based on assumptions about sales volume and product mix, and the impact of increased marketing investments;

	•		the company’s ability to realize forecasted cost savings, including the projected outcome of global supply chain management programs;

	•		the company’s ability to complete the successful post-acquisition integration of acquired businesses into existing operations;

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

	•		the difficulty of predicting the pattern of inventory movements by the company’s trade customers and of predicting changes in the policies of its customers, such as changes in customer inventory levels and access to shelf space;

	•		the impact of fluctuations in the supply and cost of raw materials;

	•		the impact of unforeseen economic changes in currency exchange rates, interest rates, tax rates, equity markets, inflation rates, recession, and other external factors over which the company has no control, including the possibility of increased pension expense and contributions resulting from continued decline in stock market returns; and

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

	a.		Evaluation of Disclosure Controls and Procedures

			The company, under the supervision and with the participation of its management, including the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of the company’s disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”). Based on such evaluation, the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer have concluded that, as of the Evaluation Date, the company’s disclosure controls and procedures are effective, and ensure that all material information relating to the company (including its consolidated subsidiaries) required to be included in the company’s reports filed or submitted under the Exchange Act is made known to them on a timely basis.

	b.		Changes in Internal Controls

			Since the Evaluation Date, there were no significant changes in the company’s internal controls or in other factors that could significantly affect such controls.


		99 (i)		Certification of Douglas R. Conant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

		99 (ii)		Certification of Robert A. Schiffner pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


	CAMPBELL SOUP COMPANY

Date: June 10, 2003	By:	/s/ Robert A. Schiffner


		Robert A. Schiffner
		Senior Vice President and
		Chief Financial Officer

	By:	/s/ Ellen Oran Kaden


		Ellen Oran Kaden
		Senior Vice President –
		Law and Government Affairs

1.		I have reviewed this quarterly report on Form 10-Q of Campbell Soup Company;

2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a)		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b)		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c)		presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


Date: June 10, 2003

	By:	/s/ Douglas R. Conant

		Douglas R. Conant
		President and Chief Executive
		Officer