|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
47-0248710
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
222 Merchandise Mart Plaza, Suite 1300
Chicago, Illinois
|
|
60654
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Item 1
|
||
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||
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||
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||
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Item 2
|
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Item 3
|
||
Item 4
|
||
Item 1
|
||
Item 1A
|
||
Item 2
|
||
Item 6
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||
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|
||
Exhibit 101
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 26,
2017 |
|
November 27,
2016 |
|
November 26,
2017 |
|
November 27,
2016 |
||||||||
Net sales
|
$
|
2,173.4
|
|
|
$
|
2,088.4
|
|
|
$
|
3,977.6
|
|
|
$
|
3,984.0
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
1,515.1
|
|
|
1,440.9
|
|
|
2,800.3
|
|
|
2,791.9
|
|
||||
Selling, general and administrative expenses
|
307.3
|
|
|
417.9
|
|
|
546.3
|
|
|
649.6
|
|
||||
Interest expense, net
|
38.0
|
|
|
54.1
|
|
|
74.4
|
|
|
112.3
|
|
||||
Income from continuing operations before income taxes and equity method investment earnings
|
313.0
|
|
|
175.5
|
|
|
556.6
|
|
|
430.2
|
|
||||
Income tax expense
|
109.5
|
|
|
78.4
|
|
|
229.5
|
|
|
247.6
|
|
||||
Equity method investment earnings
|
20.6
|
|
|
17.2
|
|
|
50.6
|
|
|
30.3
|
|
||||
Income from continuing operations
|
224.1
|
|
|
114.3
|
|
|
377.7
|
|
|
212.9
|
|
||||
Income from discontinued operations, net of tax
|
0.4
|
|
|
11.6
|
|
|
0.1
|
|
|
103.0
|
|
||||
Net income
|
$
|
224.5
|
|
|
$
|
125.9
|
|
|
$
|
377.8
|
|
|
$
|
315.9
|
|
Less: Net income attributable to noncontrolling interests
|
1.0
|
|
|
3.8
|
|
|
1.8
|
|
|
7.6
|
|
||||
Net income attributable to Conagra Brands, Inc.
|
$
|
223.5
|
|
|
$
|
122.1
|
|
|
$
|
376.0
|
|
|
$
|
308.3
|
|
Earnings per share — basic
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.55
|
|
|
$
|
0.26
|
|
|
$
|
0.91
|
|
|
$
|
0.48
|
|
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.22
|
|
||||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.55
|
|
|
$
|
0.28
|
|
|
$
|
0.91
|
|
|
$
|
0.70
|
|
Earnings per share — diluted
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.54
|
|
|
$
|
0.26
|
|
|
$
|
0.91
|
|
|
$
|
0.48
|
|
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.22
|
|
||||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.54
|
|
|
$
|
0.28
|
|
|
$
|
0.91
|
|
|
$
|
0.70
|
|
Cash dividends declared per common share
|
$
|
0.2125
|
|
|
$
|
0.25
|
|
|
$
|
0.425
|
|
|
$
|
0.50
|
|
|
Thirteen weeks ended
|
||||||||||||||||||
|
November 26, 2017
|
|
November 27, 2016
|
||||||||||||||||
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
||||||||||||
Net income
|
$
|
334.0
|
|
$
|
(109.5
|
)
|
$
|
224.5
|
|
|
$
|
243.2
|
|
$
|
(117.3
|
)
|
$
|
125.9
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||||||
Derivative adjustments:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized derivative adjustments
|
1.0
|
|
(0.4
|
)
|
0.6
|
|
|
2.2
|
|
(0.9
|
)
|
1.3
|
|
||||||
Reclassification for derivative adjustments included in net income
|
0.1
|
|
—
|
|
0.1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Unrealized gains on available-for-sale securities
|
0.4
|
|
(0.2
|
)
|
0.2
|
|
|
0.2
|
|
—
|
|
0.2
|
|
||||||
Unrealized currency translation losses
|
(12.7
|
)
|
0.1
|
|
(12.6
|
)
|
|
(14.1
|
)
|
—
|
|
(14.1
|
)
|
||||||
Pension and post-employment benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized pension and post-employment benefit obligations
|
43.4
|
|
(16.6
|
)
|
26.8
|
|
|
66.8
|
|
(25.6
|
)
|
41.2
|
|
||||||
Reclassification for pension and post-employment benefit obligations included in net income
|
(0.2
|
)
|
0.1
|
|
(0.1
|
)
|
|
(0.9
|
)
|
0.4
|
|
(0.5
|
)
|
||||||
Comprehensive income
|
366.0
|
|
(126.5
|
)
|
239.5
|
|
|
297.4
|
|
(143.4
|
)
|
154.0
|
|
||||||
Comprehensive income attributable to noncontrolling interests
|
0.4
|
|
(0.4
|
)
|
—
|
|
|
2.2
|
|
(0.1
|
)
|
2.1
|
|
||||||
Comprehensive income attributable to Conagra Brands, Inc.
|
$
|
365.6
|
|
$
|
(126.1
|
)
|
$
|
239.5
|
|
|
$
|
295.2
|
|
$
|
(143.3
|
)
|
$
|
151.9
|
|
|
Twenty-six weeks ended
|
||||||||||||||||||
|
November 26, 2017
|
|
November 27, 2016
|
||||||||||||||||
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
||||||||||||
Net income
|
$
|
607.4
|
|
$
|
(229.6
|
)
|
$
|
377.8
|
|
|
$
|
651.2
|
|
$
|
(335.3
|
)
|
$
|
315.9
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||||||
Derivative adjustments:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized derivative adjustments
|
1.0
|
|
(0.4
|
)
|
0.6
|
|
|
(5.8
|
)
|
2.2
|
|
(3.6
|
)
|
||||||
Reclassification for derivative adjustments included in net income
|
0.1
|
|
—
|
|
0.1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Unrealized gains on available-for-sale securities
|
0.7
|
|
(0.3
|
)
|
0.4
|
|
|
0.4
|
|
(0.1
|
)
|
0.3
|
|
||||||
Unrealized currency translation gains (losses)
|
19.9
|
|
—
|
|
19.9
|
|
|
(26.0
|
)
|
0.2
|
|
(25.8
|
)
|
||||||
Pension and post-employment benefit obligations:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized pension and post-employment benefit obligations
|
43.5
|
|
(16.6
|
)
|
26.9
|
|
|
64.7
|
|
(25.5
|
)
|
39.2
|
|
||||||
Reclassification for pension and post-employment benefit obligations included in net income
|
(0.3
|
)
|
0.1
|
|
(0.2
|
)
|
|
(1.8
|
)
|
0.7
|
|
(1.1
|
)
|
||||||
Comprehensive income
|
672.3
|
|
(246.8
|
)
|
425.5
|
|
|
682.7
|
|
(357.8
|
)
|
324.9
|
|
||||||
Comprehensive income attributable to noncontrolling interests
|
2.4
|
|
(0.6
|
)
|
1.8
|
|
|
6.0
|
|
(0.2
|
)
|
5.8
|
|
||||||
Comprehensive income attributable to Conagra Brands, Inc.
|
$
|
669.9
|
|
$
|
(246.2
|
)
|
$
|
423.7
|
|
|
$
|
676.7
|
|
$
|
(357.6
|
)
|
$
|
319.1
|
|
|
November 26,
2017 |
|
May 28,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
84.0
|
|
|
$
|
251.4
|
|
Receivables, less allowance for doubtful accounts of $3.4 and $3.1
|
683.8
|
|
|
563.4
|
|
||
Inventories
|
1,059.2
|
|
|
934.2
|
|
||
Prepaid expenses and other current assets
|
183.5
|
|
|
228.7
|
|
||
Current assets held for sale
|
45.8
|
|
|
35.5
|
|
||
Total current assets
|
2,056.3
|
|
|
2,013.2
|
|
||
Property, plant and equipment
|
4,236.8
|
|
|
4,261.9
|
|
||
Less accumulated depreciation
|
(2,594.8
|
)
|
|
(2,606.9
|
)
|
||
Property, plant and equipment, net
|
1,642.0
|
|
|
1,655.0
|
|
||
Goodwill
|
4,457.0
|
|
|
4,301.1
|
|
||
Brands, trademarks and other intangibles, net
|
1,298.2
|
|
|
1,229.3
|
|
||
Other assets
|
846.1
|
|
|
790.6
|
|
||
Noncurrent assets held for sale
|
100.5
|
|
|
107.1
|
|
||
|
$
|
10,400.1
|
|
|
$
|
10,096.3
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable
|
$
|
67.1
|
|
|
$
|
28.2
|
|
Current installments of long-term debt
|
198.8
|
|
|
199.0
|
|
||
Accounts payable
|
886.7
|
|
|
773.1
|
|
||
Accrued payroll
|
131.9
|
|
|
167.6
|
|
||
Other accrued liabilities
|
565.8
|
|
|
552.6
|
|
||
Total current liabilities
|
1,850.3
|
|
|
1,720.5
|
|
||
Senior long-term debt, excluding current installments
|
3,065.9
|
|
|
2,573.3
|
|
||
Subordinated debt
|
195.9
|
|
|
195.9
|
|
||
Other noncurrent liabilities
|
1,501.5
|
|
|
1,528.8
|
|
||
Total liabilities
|
6,613.6
|
|
|
6,018.5
|
|
||
Common stockholders' equity
|
|
|
|
||||
Common stock of $5 par value, authorized 1,200,000,000 shares; issued 567,907,172
|
2,839.7
|
|
|
2,839.7
|
|
||
Additional paid-in capital
|
1,166.8
|
|
|
1,171.9
|
|
||
Retained earnings
|
4,464.3
|
|
|
4,247.0
|
|
||
Accumulated other comprehensive loss
|
(165.2
|
)
|
|
(212.9
|
)
|
||
Less treasury stock, at cost, 167,246,324 and 151,387,209 common shares
|
(4,607.9
|
)
|
|
(4,054.9
|
)
|
||
Total Conagra Brands, Inc. common stockholders' equity
|
3,697.7
|
|
|
3,990.8
|
|
||
Noncontrolling interests
|
88.8
|
|
|
87.0
|
|
||
Total stockholders' equity
|
3,786.5
|
|
|
4,077.8
|
|
||
|
$
|
10,400.1
|
|
|
$
|
10,096.3
|
|
|
Twenty-six weeks ended
|
||||||
|
November 26,
2017 |
|
November 27,
2016 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
377.8
|
|
|
$
|
315.9
|
|
Income from discontinued operations
|
0.1
|
|
|
103.0
|
|
||
Income from continuing operations
|
377.7
|
|
|
212.9
|
|
||
Adjustments to reconcile income from continuing operations to net cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
129.0
|
|
|
133.5
|
|
||
Asset impairment charges
|
8.8
|
|
|
211.9
|
|
||
Gain on divestitures
|
—
|
|
|
(197.5
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
60.6
|
|
||
Earnings of affiliates in excess of distributions
|
(50.6
|
)
|
|
(23.4
|
)
|
||
Stock-settled share-based payments expense
|
17.7
|
|
|
18.3
|
|
||
Contributions to pension plans
|
(6.1
|
)
|
|
(5.9
|
)
|
||
Pension benefit
|
(21.5
|
)
|
|
(20.6
|
)
|
||
Other items
|
3.8
|
|
|
23.9
|
|
||
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions:
|
|
|
|
||||
Receivables
|
(109.8
|
)
|
|
(49.2
|
)
|
||
Inventories
|
(130.5
|
)
|
|
(32.2
|
)
|
||
Deferred income taxes and income taxes payable, net
|
95.3
|
|
|
183.5
|
|
||
Prepaid expenses and other current assets
|
0.1
|
|
|
0.2
|
|
||
Accounts payable
|
132.3
|
|
|
71.7
|
|
||
Accrued payroll
|
(39.7
|
)
|
|
(95.5
|
)
|
||
Other accrued liabilities
|
(1.8
|
)
|
|
(31.6
|
)
|
||
Net cash flows from operating activities — continuing operations
|
404.7
|
|
|
460.6
|
|
||
Net cash flows from operating activities — discontinued operations
|
16.0
|
|
|
81.6
|
|
||
Net cash flows from operating activities
|
420.7
|
|
|
542.2
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(123.4
|
)
|
|
(118.3
|
)
|
||
Sale of property, plant and equipment
|
6.9
|
|
|
11.3
|
|
||
Proceeds from divestitures
|
—
|
|
|
489.1
|
|
||
Purchase of businesses
|
(249.6
|
)
|
|
(108.2
|
)
|
||
Net cash flows from investing activities — continuing operations
|
(366.1
|
)
|
|
273.9
|
|
||
Net cash flows from investing activities — discontinued operations
|
—
|
|
|
(123.7
|
)
|
||
Net cash flows from investing activities
|
(366.1
|
)
|
|
150.2
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net short-term borrowings
|
38.9
|
|
|
(7.2
|
)
|
||
Issuance of long-term debt, net of debt issuance costs
|
497.4
|
|
|
—
|
|
||
Repayment of long-term debt
|
(4.8
|
)
|
|
(555.8
|
)
|
||
Payment of intangible asset financing arrangement
|
(14.4
|
)
|
|
(14.9
|
)
|
||
Repurchase of Conagra Brands, Inc. common shares
|
(580.0
|
)
|
|
(170.1
|
)
|
||
Cash dividends paid
|
(171.6
|
)
|
|
(219.4
|
)
|
||
Exercise of stock options and issuance of other stock awards, including tax withholdings
|
4.0
|
|
|
47.4
|
|
||
Net cash flows from financing activities — continuing operations
|
(230.5
|
)
|
|
(920.0
|
)
|
||
Net cash flows from financing activities — discontinued operations
|
—
|
|
|
839.1
|
|
||
Net cash flows from financing activities
|
(230.5
|
)
|
|
(80.9
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
8.5
|
|
|
(3.5
|
)
|
||
Net change in cash and cash equivalents
|
(167.4
|
)
|
|
608.0
|
|
||
Add: Cash balance included in assets held for sale and discontinued operations at beginning of period
|
—
|
|
|
36.4
|
|
||
Less: Cash balance included in assets held for sale and discontinued operations at end of period
|
—
|
|
|
—
|
|
||
Cash and cash equivalents at beginning of period
|
251.4
|
|
|
798.1
|
|
||
Cash and cash equivalents at end of period
|
$
|
84.0
|
|
|
$
|
1,442.5
|
|
|
November 26, 2017
|
|
May 28, 2017
|
||||
Currency translation losses, net of reclassification adjustments
|
$
|
(78.7
|
)
|
|
$
|
(98.6
|
)
|
Derivative adjustments, net of reclassification adjustments
|
(0.4
|
)
|
|
(1.1
|
)
|
||
Unrealized gains (losses) on available-for-sale securities
|
0.1
|
|
|
(0.3
|
)
|
||
Pension and post-employment benefit obligations, net of reclassification adjustments
|
(86.2
|
)
|
|
(112.9
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(165.2
|
)
|
|
$
|
(212.9
|
)
|
|
|
Thirteen weeks ended
|
|
Affected Line Item in the Condensed Consolidated Statement of Earnings
1
|
||||||
|
|
November 26, 2017
|
|
November 27, 2016
|
|
|
||||
Net derivative adjustment, net of tax:
|
|
|
|
|
|
|
||||
Cash flow hedges
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
Interest expense, net
|
|
|
0.1
|
|
|
—
|
|
|
Total before tax
|
||
|
|
—
|
|
|
—
|
|
|
Income tax expense
|
||
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
Net of tax
|
Pension and postretirement liabilities:
|
|
|
|
|
|
|
||||
Net prior service benefit
|
|
$
|
(0.2
|
)
|
|
$
|
(0.9
|
)
|
|
Selling, general and administrative expenses
|
|
|
(0.2
|
)
|
|
(0.9
|
)
|
|
Total before tax
|
||
|
|
0.1
|
|
|
0.4
|
|
|
Income tax expense
|
||
|
|
$
|
(0.1
|
)
|
|
$
|
(0.5
|
)
|
|
Net of tax
|
|
|
Twenty-six weeks ended
|
|
Affected Line Item in the Condensed Consolidated Statement of Earnings
1
|
||||||
|
|
November 26, 2017
|
|
November 27, 2016
|
|
|
||||
Net derivative adjustment, net of tax:
|
|
|
|
|
|
|
||||
Cash flow hedges
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
Interest expense, net
|
|
|
0.1
|
|
|
—
|
|
|
Total before tax
|
||
|
|
—
|
|
|
—
|
|
|
Income tax expense
|
||
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
Net of tax
|
Pension and postretirement liabilities:
|
|
|
|
|
|
|
||||
Net prior service benefit
|
|
$
|
(0.3
|
)
|
|
$
|
(1.8
|
)
|
|
Selling, general and administrative expenses
|
|
|
(0.3
|
)
|
|
(1.8
|
)
|
|
Total before tax
|
||
|
|
0.1
|
|
|
0.7
|
|
|
Income tax expense
|
||
|
|
$
|
(0.2
|
)
|
|
$
|
(1.1
|
)
|
|
Net of tax
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 26, 2017
|
|
November 27, 2016
|
|
November 26, 2017
|
|
November 27, 2016
|
||||||||
Net sales
|
$
|
—
|
|
|
$
|
636.0
|
|
|
$
|
—
|
|
|
$
|
1,407.9
|
|
Income (loss) from discontinued operations before income taxes and equity method investment earnings
|
$
|
—
|
|
|
$
|
46.3
|
|
|
$
|
(0.3
|
)
|
|
$
|
175.1
|
|
Income (loss) before income taxes and equity method investment earnings
|
—
|
|
|
46.3
|
|
|
(0.3
|
)
|
|
175.1
|
|
||||
Income tax expense (benefit)
|
—
|
|
|
39.1
|
|
|
(0.1
|
)
|
|
88.6
|
|
||||
Equity method investment earnings
|
—
|
|
|
5.3
|
|
|
—
|
|
|
15.9
|
|
||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
12.5
|
|
|
(0.2
|
)
|
|
102.4
|
|
||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
3.2
|
|
|
—
|
|
|
6.8
|
|
||||
Net income (loss) from discontinued operations attributable to Conagra Brands, Inc.
|
$
|
—
|
|
|
$
|
9.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
95.6
|
|
|
November 26, 2017
|
|
May 28, 2017
|
||||
Current assets
|
$
|
45.8
|
|
|
$
|
35.5
|
|
Noncurrent assets (including goodwill of $74.5 million)
|
95.5
|
|
|
95.5
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Pension costs
|
$
|
32.9
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34.4
|
|
Accelerated depreciation
|
32.2
|
|
|
18.6
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
52.0
|
|
||||||
Other cost of goods sold
|
10.0
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.1
|
|
||||||
Total cost of goods sold
|
75.1
|
|
|
22.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
98.5
|
|
||||||
Severance and related costs, net
|
26.0
|
|
|
10.3
|
|
|
3.4
|
|
|
7.9
|
|
|
103.4
|
|
|
151.0
|
|
||||||
Fixed asset impairment (net of gains on disposal)
|
5.9
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|
24.0
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
4.7
|
|
||||||
Contract/lease cancellation expenses
|
0.9
|
|
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|
86.2
|
|
|
88.3
|
|
||||||
Consulting/professional fees
|
1.1
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
54.1
|
|
|
55.7
|
|
||||||
Other selling, general and administrative expenses
|
16.1
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
23.3
|
|
|
42.6
|
|
||||||
Total selling, general and administrative expenses
|
50.0
|
|
|
21.4
|
|
|
4.1
|
|
|
7.9
|
|
|
282.9
|
|
|
366.3
|
|
||||||
Consolidated total
|
$
|
125.1
|
|
|
$
|
43.6
|
|
|
$
|
4.1
|
|
|
$
|
7.9
|
|
|
$
|
284.1
|
|
|
$
|
464.8
|
|
|
Grocery & Snacks
|
|
International
|
|
Corporate
|
|
Total
|
||||||||
Pension costs
|
$
|
2.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
Other cost of goods sold
|
1.3
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
||||
Total cost of goods sold
|
3.4
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
||||
Severance and related costs, net
|
(0.2
|
)
|
|
0.9
|
|
|
0.6
|
|
|
1.3
|
|
||||
Fixed asset impairment (net of gains on disposal)
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
0.7
|
|
|
0.7
|
|
||||
Contract/lease cancellation expenses
|
0.1
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
||||
Consulting/professional fees
|
0.1
|
|
|
—
|
|
|
0.4
|
|
|
0.5
|
|
||||
Other selling, general and administrative expenses
|
2.1
|
|
|
—
|
|
|
0.6
|
|
|
2.7
|
|
||||
Total selling, general and administrative expenses
|
0.6
|
|
|
0.9
|
|
|
2.2
|
|
|
3.7
|
|
||||
Consolidated total
|
$
|
4.0
|
|
|
$
|
0.9
|
|
|
$
|
2.2
|
|
|
$
|
7.1
|
|
|
Grocery & Snacks
|
|
International
|
|
Corporate
|
|
Total
|
||||||||
Pension costs
|
$
|
2.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
Accelerated depreciation
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
||||
Other cost of goods sold
|
2.4
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
||||
Total cost of goods sold
|
5.7
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
||||
Severance and related costs, net
|
1.8
|
|
|
0.9
|
|
|
0.6
|
|
|
3.3
|
|
||||
Fixed asset impairment (net of gains on disposal)
|
(1.4
|
)
|
|
—
|
|
|
4.4
|
|
|
3.0
|
|
||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
1.3
|
|
|
1.3
|
|
||||
Contract/lease cancellation expenses
|
0.1
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
||||
Consulting/professional fees
|
0.1
|
|
|
—
|
|
|
0.6
|
|
|
0.7
|
|
||||
Other selling, general and administrative expenses
|
3.9
|
|
|
—
|
|
|
0.6
|
|
|
4.5
|
|
||||
Total selling, general and administrative expenses
|
4.5
|
|
|
0.9
|
|
|
7.4
|
|
|
12.8
|
|
||||
Consolidated total
|
$
|
10.2
|
|
|
$
|
0.9
|
|
|
$
|
7.4
|
|
|
$
|
18.5
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Pension costs
|
$
|
35.0
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36.5
|
|
Accelerated depreciation
|
32.2
|
|
|
18.6
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
52.0
|
|
||||||
Other cost of goods sold
|
7.4
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.5
|
|
||||||
Total cost of goods sold
|
74.6
|
|
|
22.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
98.0
|
|
||||||
Severance and related costs, net
|
25.7
|
|
|
10.3
|
|
|
3.4
|
|
|
7.9
|
|
|
102.1
|
|
|
149.4
|
|
||||||
Fixed asset impairment (net of gains on disposal)
|
5.9
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|
24.0
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|
3.9
|
|
||||||
Contract/lease cancellation expenses
|
0.9
|
|
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|
71.2
|
|
|
73.3
|
|
||||||
Consulting/professional fees
|
1.0
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
51.8
|
|
|
53.3
|
|
||||||
Other selling, general and administrative expenses
|
15.1
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
20.6
|
|
|
38.9
|
|
||||||
Total selling, general and administrative expenses
|
48.6
|
|
|
21.4
|
|
|
4.1
|
|
|
7.9
|
|
|
260.8
|
|
|
342.8
|
|
||||||
Consolidated total
|
$
|
123.2
|
|
|
$
|
43.6
|
|
|
$
|
4.1
|
|
|
$
|
7.9
|
|
|
$
|
262.0
|
|
|
$
|
440.8
|
|
|
Balance at May 28, 2017
|
|
Costs Incurred
and Charged
to Expense
|
|
Costs Paid
or Otherwise Settled
|
|
Changes in Estimates
|
|
Balance at November 26, 2017
|
||||||||||
Pension costs
|
$
|
31.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
$
|
33.9
|
|
Severance and related costs
|
13.8
|
|
|
4.0
|
|
|
(7.9
|
)
|
|
(0.7
|
)
|
|
9.2
|
|
|||||
Consulting/professional fees
|
0.6
|
|
|
0.7
|
|
|
(1.1
|
)
|
|
—
|
|
|
0.2
|
|
|||||
Contract/lease cancellation
|
11.6
|
|
|
0.3
|
|
|
(3.6
|
)
|
|
(0.3
|
)
|
|
8.0
|
|
|||||
Other costs
|
1.9
|
|
|
6.5
|
|
|
(6.9
|
)
|
|
—
|
|
|
1.5
|
|
|||||
Total
|
$
|
59.7
|
|
|
$
|
11.5
|
|
|
$
|
(19.5
|
)
|
|
$
|
1.1
|
|
|
$
|
52.8
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 26,
2017 |
|
November 27,
2016 |
|
November 26,
2017 |
|
November 27,
2016 |
||||||||
Long-term debt
|
$
|
39.4
|
|
|
$
|
56.6
|
|
|
$
|
77.5
|
|
|
$
|
117.5
|
|
Short-term debt
|
0.7
|
|
|
0.2
|
|
|
1.1
|
|
|
0.4
|
|
||||
Interest income
|
(1.1
|
)
|
|
(0.8
|
)
|
|
(2.0
|
)
|
|
(1.5
|
)
|
||||
Interest capitalized
|
(1.0
|
)
|
|
(1.9
|
)
|
|
(2.2
|
)
|
|
(4.1
|
)
|
||||
|
$
|
38.0
|
|
|
$
|
54.1
|
|
|
$
|
74.4
|
|
|
$
|
112.3
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Total
|
||||||||||
Balance as of May 28, 2017
|
$
|
2,439.1
|
|
|
$
|
1,037.3
|
|
|
$
|
253.6
|
|
|
$
|
571.1
|
|
|
$
|
4,301.1
|
|
Acquisitions
|
156.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
156.5
|
|
|||||
Purchase accounting adjustments
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|||||
Currency translation
|
—
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|||||
Balance as of November 26, 2017
|
$
|
2,594.1
|
|
|
$
|
1,038.2
|
|
|
$
|
253.6
|
|
|
$
|
571.1
|
|
|
$
|
4,457.0
|
|
|
November 26, 2017
|
|
May 28, 2017
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Non-amortizing intangible assets
|
$
|
908.8
|
|
|
$
|
—
|
|
|
$
|
834.1
|
|
|
$
|
—
|
|
Amortizing intangible assets
|
587.3
|
|
|
197.9
|
|
|
575.4
|
|
|
180.2
|
|
||||
|
$
|
1,496.1
|
|
|
$
|
197.9
|
|
|
$
|
1,409.5
|
|
|
$
|
180.2
|
|
|
November 26,
2017 |
|
May 28,
2017 |
||||
Prepaid expenses and other current assets
|
$
|
4.2
|
|
|
$
|
2.3
|
|
Other accrued liabilities
|
2.0
|
|
|
1.3
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
$
|
3.5
|
|
|
Other accrued liabilities
|
|
$
|
1.0
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
0.8
|
|
|
Other accrued liabilities
|
|
1.9
|
|
||
Other
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Other accrued liabilities
|
|
0.1
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
4.3
|
|
|
|
|
$
|
3.0
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
$
|
2.6
|
|
|
Other accrued liabilities
|
|
$
|
1.4
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
0.2
|
|
|
Other accrued liabilities
|
|
1.1
|
|
||
Other
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Other accrued liabilities
|
|
0.2
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
2.8
|
|
|
|
|
$
|
2.7
|
|
Derivatives Not Designated as Hedging Instruments
|
|
Location in Condensed Consolidated Statement of Earnings of Gains Recognized on Derivatives
|
|
Gains Recognized on Derivatives in Condensed Consolidated Statement of Earnings for the Thirteen Weeks Ended
|
||||||
November 26, 2017
|
|
November 27, 2016
|
||||||||
Commodity contracts
|
|
Cost of goods sold
|
|
$
|
0.8
|
|
|
$
|
1.6
|
|
Foreign exchange contracts
|
|
Cost of goods sold
|
|
2.2
|
|
|
1.4
|
|
||
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
—
|
|
|
2.5
|
|
||
Total gains from derivative instruments not designated as hedging instruments
|
|
|
|
$
|
3.0
|
|
|
$
|
5.5
|
|
Derivatives Not Designated as Hedging Instruments
|
|
Location in Condensed Consolidated Statement of Earnings of Gains (Losses) Recognized on Derivatives
|
|
Gains (Losses) Recognized on Derivatives in Condensed Consolidated Statement of Earnings for
the Twenty-six Weeks Ended |
||||||
November 26, 2017
|
|
November 27, 2016
|
||||||||
Commodity contracts
|
|
Cost of goods sold
|
|
$
|
1.4
|
|
|
$
|
1.2
|
|
Foreign exchange contracts
|
|
Cost of goods sold
|
|
(5.8
|
)
|
|
1.5
|
|
||
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
0.3
|
|
|
1.3
|
|
||
Total gains (losses) from derivative instruments not designated as hedging instruments
|
|
|
|
$
|
(4.1
|
)
|
|
$
|
4.0
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 26,
2017 |
|
November 27,
2016 |
|
November 26,
2017 |
|
November 27,
2016 |
||||||||
Net income available to Conagra Brands, Inc. common stockholders:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
223.1
|
|
|
$
|
113.7
|
|
|
$
|
375.9
|
|
|
$
|
212.1
|
|
Income from discontinued operations, net of tax, attributable to Conagra Brands, Inc. common stockholders
|
0.4
|
|
|
8.4
|
|
|
0.1
|
|
|
96.2
|
|
||||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
223.5
|
|
|
$
|
122.1
|
|
|
$
|
376.0
|
|
|
$
|
308.3
|
|
Less: Increase in redemption value of noncontrolling interests in excess of earnings allocated
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.8
|
|
||||
Net income available to Conagra Brands, Inc. common stockholders
|
$
|
223.5
|
|
|
$
|
121.8
|
|
|
$
|
376.0
|
|
|
$
|
307.5
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
406.5
|
|
|
437.7
|
|
|
411.1
|
|
|
438.4
|
|
||||
Add: Dilutive effect of stock options, restricted stock unit awards, and other dilutive securities
|
3.9
|
|
|
3.6
|
|
|
4.0
|
|
|
3.7
|
|
||||
Diluted weighted average shares outstanding
|
410.4
|
|
|
441.3
|
|
|
415.1
|
|
|
442.1
|
|
|
November 26,
2017 |
|
May 28,
2017 |
||||
Raw materials and packaging
|
$
|
204.2
|
|
|
$
|
182.1
|
|
Work in process
|
124.9
|
|
|
91.9
|
|
||
Finished goods
|
682.2
|
|
|
612.9
|
|
||
Supplies and other
|
47.9
|
|
|
47.3
|
|
||
Total
|
$
|
1,059.2
|
|
|
$
|
934.2
|
|
•
|
an income tax benefit allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant,
|
•
|
additional income tax expense related to state taxes, and
|
•
|
an income tax benefit related to a change in estimate of the income tax effect of undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made.
|
•
|
an income tax benefit allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant,
|
•
|
additional tax expense associated with a change in estimate regarding the tax basis of the Spicetec business that was sold in the first quarter of fiscal 2017, and
|
•
|
additional tax expense associated with non-deductible goodwill in our Mexican business, for which an impairment charge was recognized.
|
•
|
additional tax expense associated with non-deductible goodwill sold in connection with the dispositions of the Spicetec and JM Swank businesses,
|
•
|
additional tax expense associated with non-deductible goodwill in our Canadian business, for which an impairment charge was recognized,
|
•
|
an income tax benefit for excess tax benefits allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant, and
|
•
|
an income tax benefit associated with a tax planning strategy that allowed us to utilize certain state tax attributes.
|
|
Pension Benefits
|
||||||||||||||
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 26,
2017 |
|
November 27,
2016 |
|
November 26,
2017 |
|
November 27,
2016 |
||||||||
Service cost
|
$
|
13.2
|
|
|
$
|
15.9
|
|
|
$
|
25.9
|
|
|
$
|
32.6
|
|
Interest cost
|
27.7
|
|
|
29.9
|
|
|
55.9
|
|
|
59.9
|
|
||||
Expected return on plan assets
|
(54.6
|
)
|
|
(53.9
|
)
|
|
(108.8
|
)
|
|
(107.7
|
)
|
||||
Amortization of prior service cost
|
0.7
|
|
|
0.7
|
|
|
1.4
|
|
|
1.3
|
|
||||
Recognized net actuarial loss
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
||||
Special termination benefits
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
||||
Curtailment loss
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
||||
Benefit cost (benefit) — Company plans
|
(8.9
|
)
|
|
(5.9
|
)
|
|
(21.5
|
)
|
|
(12.4
|
)
|
||||
Pension benefit cost — multi-employer plans
|
4.2
|
|
|
2.8
|
|
|
5.7
|
|
|
5.1
|
|
||||
Total benefit cost (benefit)
|
$
|
(4.7
|
)
|
|
$
|
(3.1
|
)
|
|
$
|
(15.8
|
)
|
|
$
|
(7.3
|
)
|
|
Postretirement Benefits
|
||||||||||||||
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 26,
2017 |
|
November 27,
2016 |
|
November 26,
2017 |
|
November 27,
2016 |
||||||||
Service cost
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest cost
|
0.9
|
|
|
1.0
|
|
|
1.8
|
|
|
2.1
|
|
||||
Amortization of prior service benefit
|
(0.8
|
)
|
|
(1.6
|
)
|
|
(1.6
|
)
|
|
(3.3
|
)
|
||||
Recognized net actuarial loss
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
||||
Total cost (benefit)
|
$
|
0.1
|
|
|
$
|
(0.4
|
)
|
|
$
|
0.2
|
|
|
$
|
(0.9
|
)
|
|
Conagra Brands, Inc. Stockholders' Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
Common
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|||||||||||||||
Balance at May 28, 2017
|
567.9
|
|
|
$
|
2,839.7
|
|
|
$
|
1,171.9
|
|
|
$
|
4,247.0
|
|
|
$
|
(212.9
|
)
|
|
$
|
(4,054.9
|
)
|
|
$
|
87.0
|
|
|
$
|
4,077.8
|
|
Stock option and incentive plans
|
|
|
|
|
(5.1
|
)
|
|
0.2
|
|
|
|
|
27.0
|
|
|
|
|
22.1
|
|
|||||||||||
Spinoff of Lamb Weston
|
|
|
|
|
|
|
15.5
|
|
|
|
|
|
|
|
|
15.5
|
|
|||||||||||||
Currency translation adjustment, net
|
|
|
|
|
|
|
|
|
19.9
|
|
|
|
|
|
|
|
19.9
|
|
||||||||||||
Repurchase of common shares
|
|
|
|
|
|
|
|
|
|
|
(580.0
|
)
|
|
|
|
(580.0
|
)
|
|||||||||||||
Unrealized gain on securities
|
|
|
|
|
|
|
|
|
0.4
|
|
|
|
|
|
|
0.4
|
|
|||||||||||||
Derivative adjustment, net
|
|
|
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
0.7
|
|
|||||||||||||
Activities of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
1.8
|
|
|
1.8
|
|
|||||||||||||
Pension and postretirement healthcare benefits
|
|
|
|
|
|
|
|
|
26.7
|
|
|
|
|
|
|
26.7
|
|
|||||||||||||
Dividends declared on common stock; $0.425 per share
|
|
|
|
|
|
|
(174.4
|
)
|
|
|
|
|
|
|
|
(174.4
|
)
|
|||||||||||||
Net income attributable to Conagra Brands, Inc.
|
|
|
|
|
|
|
376.0
|
|
|
|
|
|
|
|
|
376.0
|
|
|||||||||||||
Balance at November 26, 2017
|
567.9
|
|
|
$
|
2,839.7
|
|
|
$
|
1,166.8
|
|
|
$
|
4,464.3
|
|
|
$
|
(165.2
|
)
|
|
$
|
(4,607.9
|
)
|
|
$
|
88.8
|
|
|
$
|
3,786.5
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
3.3
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
Available-for-sale securities
|
4.3
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
||||
Total assets
|
$
|
7.6
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
8.5
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
Deferred compensation liabilities
|
53.7
|
|
|
—
|
|
|
—
|
|
|
53.7
|
|
||||
Total liabilities
|
$
|
53.7
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
55.7
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
2.0
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
Available-for-sale securities
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
||||
Total assets
|
$
|
5.5
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
5.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
Deferred compensation liabilities
|
47.2
|
|
|
—
|
|
|
—
|
|
|
47.2
|
|
||||
Total liabilities
|
$
|
47.2
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
48.5
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 26,
2017 |
|
November 27,
2016 |
|
November 26,
2017 |
|
November 27,
2016 |
||||||||
Net sales
|
|
|
|
|
|
|
|
||||||||
Grocery & Snacks
|
$
|
900.4
|
|
|
$
|
853.2
|
|
|
$
|
1,646.2
|
|
|
$
|
1,610.4
|
|
Refrigerated & Frozen
|
758.1
|
|
|
740.7
|
|
|
1,373.8
|
|
|
1,345.3
|
|
||||
International
|
220.3
|
|
|
211.4
|
|
|
411.2
|
|
|
406.1
|
|
||||
Foodservice
|
294.6
|
|
|
283.1
|
|
|
546.4
|
|
|
551.1
|
|
||||
Commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
71.1
|
|
||||
Total net sales
|
$
|
2,173.4
|
|
|
$
|
2,088.4
|
|
|
$
|
3,977.6
|
|
|
$
|
3,984.0
|
|
Operating profit
|
|
|
|
|
|
|
|
||||||||
Grocery & Snacks
|
$
|
199.8
|
|
|
$
|
220.2
|
|
|
$
|
376.0
|
|
|
$
|
400.7
|
|
Refrigerated & Frozen
|
128.5
|
|
|
118.0
|
|
|
230.4
|
|
|
210.2
|
|
||||
International
|
20.2
|
|
|
(26.7
|
)
|
|
39.1
|
|
|
(175.9
|
)
|
||||
Foodservice
|
47.4
|
|
|
31.9
|
|
|
70.6
|
|
|
53.6
|
|
||||
Commercial
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
202.8
|
|
||||
Total operating profit
|
$
|
395.9
|
|
|
$
|
342.9
|
|
|
$
|
716.1
|
|
|
$
|
691.4
|
|
Equity method investment earnings
|
20.6
|
|
|
17.2
|
|
|
50.6
|
|
|
30.3
|
|
||||
General corporate expense
|
44.9
|
|
|
113.3
|
|
|
85.1
|
|
|
148.9
|
|
||||
Interest expense, net
|
38.0
|
|
|
54.1
|
|
|
74.4
|
|
|
112.3
|
|
||||
Income tax expense
|
109.5
|
|
|
78.4
|
|
|
229.5
|
|
|
247.6
|
|
||||
Income from continuing operations
|
$
|
224.1
|
|
|
$
|
114.3
|
|
|
$
|
377.7
|
|
|
$
|
212.9
|
|
Less: Net income attributable to noncontrolling interests of continuing operations
|
1.0
|
|
|
0.6
|
|
|
1.8
|
|
|
0.8
|
|
||||
Income from continuing operations attributable to Conagra Brands, Inc.
|
$
|
223.1
|
|
|
$
|
113.7
|
|
|
$
|
375.9
|
|
|
$
|
212.1
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 26,
2017 |
|
November 27,
2016 |
|
November 26,
2017 |
|
November 27,
2016 |
||||||||
Net derivative gains (losses) incurred
|
$
|
3.0
|
|
|
$
|
3.0
|
|
|
$
|
(4.4
|
)
|
|
$
|
2.7
|
|
Less: Net derivative gains (losses) allocated to reporting segments
|
(4.1
|
)
|
|
3.8
|
|
|
(5.5
|
)
|
|
2.8
|
|
||||
Net derivative gains (losses) recognized in general corporate expenses
|
$
|
7.1
|
|
|
$
|
(0.8
|
)
|
|
$
|
1.1
|
|
|
$
|
(0.1
|
)
|
Net derivative gains (losses) allocated to Grocery & Snacks
|
$
|
(0.4
|
)
|
|
$
|
2.4
|
|
|
$
|
(1.0
|
)
|
|
$
|
2.0
|
|
Net derivative gains allocated to Refrigerated & Frozen
|
0.1
|
|
|
0.7
|
|
|
0.1
|
|
|
0.5
|
|
||||
Net derivative gains (losses) allocated to International
|
(3.7
|
)
|
|
0.2
|
|
|
(4.4
|
)
|
|
0.2
|
|
||||
Net derivative gains (losses) allocated to Foodservice
|
(0.1
|
)
|
|
0.5
|
|
|
(0.2
|
)
|
|
0.2
|
|
||||
Net derivative losses allocated to Commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Net derivative gains (losses) included in segment operating profit
|
$
|
(4.1
|
)
|
|
$
|
3.8
|
|
|
$
|
(5.5
|
)
|
|
$
|
2.8
|
|
•
|
charges totaling $7.1 million ($4.6 million after-tax) in connection with our SCAE Plan (as defined below),
|
•
|
charges totaling $7.8 million ($5.0 million after-tax) associated with costs incurred for acquisitions and planned divestitures,
|
•
|
charges totaling $4.1 million ($2.5 million after-tax) related to a remeasurement of our salaried and non-qualified pension plan liability, and
|
•
|
an income tax benefit of $5.3 million related to an adjustment to the estimated tax expense resulting from the repatriation of cash during the second quarter from foreign subsidiaries and the tax expense related to the earnings of foreign subsidiaries previously deemed to be permanently invested.
|
•
|
charges totaling $60.6 million ($39.2 million after-tax) related to the early retirement of debt,
|
•
|
charges totaling $43.9 million ($40.7 million after-tax) related to the impairment of goodwill in our International segment,
|
•
|
charges totaling $19.8 million ($12.9 million after-tax) in connection with our SCAE Plan, and
|
•
|
an income tax expense of $7.4 million associated with a change in a valuation allowance on a deferred tax asset due to a change in the estimated capital gain on the Spicetec divestiture.
|
•
|
charges totaling $18.5 million ($12.0 million after-tax) in connection with our SCAE Plan,
|
•
|
charges totaling $8.6 million ($5.5 million after-tax) associated with costs incurred for acquisitions and planned divestitures,
|
•
|
charges totaling $4.1 million ($2.5 million after-tax) related to the pension remeasurement, and
|
•
|
an income tax charge of $22.5 million associated with the repatriation of cash during the second quarter from foreign subsidiaries and the tax expense related to the earnings of foreign subsidiaries previously deemed to be permanently invested.
|
•
|
charges totaling $207.5 million ($190.2 million after-tax) related to the impairment of goodwill and other intangible assets in our International segment,
|
•
|
gains totaling $197.7 million ($67.6 million after-tax) from the divestiture of the Spicetec and JM Swank businesses,
|
•
|
charges totaling $60.6 million ($39.2 million after-tax) related to the early retirement of debt,
|
•
|
charges totaling $33.9 million ($22.0 million after-tax) in connection with our SCAE Plan, and
|
•
|
an income tax benefit of $7.5 million associated with a tax planning strategy that allowed us to utilize certain state tax attributes.
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
($ in millions)
|
November 26,
2017 |
|
November 27,
2016 |
|
November 26,
2017 |
|
November 27,
2016 |
||||||||
Net derivative gains (losses) incurred
|
$
|
3.0
|
|
|
$
|
3.0
|
|
|
$
|
(4.4
|
)
|
|
$
|
2.7
|
|
Less: Net derivative gains (losses) allocated to reporting segments
|
(4.1
|
)
|
|
3.8
|
|
|
(5.5
|
)
|
|
2.8
|
|
||||
Net derivative gains (losses) recognized in general corporate expenses
|
$
|
7.1
|
|
|
$
|
(0.8
|
)
|
|
$
|
1.1
|
|
|
$
|
(0.1
|
)
|
Net derivative gains (losses) allocated to Grocery & Snacks
|
$
|
(0.4
|
)
|
|
$
|
2.4
|
|
|
$
|
(1.0
|
)
|
|
$
|
2.0
|
|
Net derivative gains allocated to Refrigerated & Frozen
|
0.1
|
|
|
0.7
|
|
|
0.1
|
|
|
0.5
|
|
||||
Net derivative gains (losses) allocated to International
|
(3.7
|
)
|
|
0.2
|
|
|
(4.4
|
)
|
|
0.2
|
|
||||
Net derivative gains (losses) allocated to Foodservice
|
(0.1
|
)
|
|
0.5
|
|
|
(0.2
|
)
|
|
0.2
|
|
||||
Net derivative losses allocated to Commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Net derivative gains (losses) included in segment operating profit
|
$
|
(4.1
|
)
|
|
$
|
3.8
|
|
|
$
|
(5.5
|
)
|
|
$
|
2.8
|
|
|
Net Sales
|
||||||||||||||||||||
($ in millions)
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||||||||
Reporting Segment
|
November 26,
2017 |
|
November 27,
2016 |
|
% Inc
(Dec)
|
|
November 26,
2017 |
|
November 27,
2016 |
|
% Inc
(Dec)
|
||||||||||
Grocery & Snacks
|
$
|
900.4
|
|
|
$
|
853.2
|
|
|
6
|
%
|
|
$
|
1,646.2
|
|
|
$
|
1,610.4
|
|
|
2
|
%
|
Refrigerated & Frozen
|
758.1
|
|
|
740.7
|
|
|
2
|
%
|
|
1,373.8
|
|
|
1,345.3
|
|
|
2
|
%
|
||||
International
|
220.3
|
|
|
211.4
|
|
|
4
|
%
|
|
411.2
|
|
|
406.1
|
|
|
1
|
%
|
||||
Foodservice
|
294.6
|
|
|
283.1
|
|
|
4
|
%
|
|
546.4
|
|
|
551.1
|
|
|
(1
|
)%
|
||||
Commercial
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
71.1
|
|
|
(100
|
)%
|
||||
Total
|
$
|
2,173.4
|
|
|
$
|
2,088.4
|
|
|
4
|
%
|
|
$
|
3,977.6
|
|
|
$
|
3,984.0
|
|
|
—
|
%
|
•
|
a charge of $7.8 million associated with costs incurred for acquisitions and planned divestitures,
|
•
|
a charge of $4.1 million related to a remeasurement of our salaried and non-qualified pension plan liability, and
|
•
|
expenses of $3.7 million in connection with our SCAE Plan.
|
•
|
a decrease in advertising and promotion spending of $11.4 million and
|
•
|
an increase in self-insured worker's compensation and product liability expense of $9.0 million.
|
•
|
charges totaling $60.6 million related to the early retirement of debt,
|
•
|
charges totaling $43.9 million related to the impairment of goodwill within our International segment, and
|
•
|
expenses of $18.0 million in connection with our SCAE plan.
|
•
|
expenses of $12.8 million in connection with our SCAE Plan,
|
•
|
a charge of $8.6 million associated with costs incurred for acquisitions and planned divestitures, and
|
•
|
a charge of $4.1 million related to the remeasurement of our salaried and non-qualified pension plan liability.
|
•
|
a decrease in advertising and promotion spending of $21.2 million,
|
•
|
a decrease in share-based payment expense of $9.4 million, and
|
•
|
an increase in self-insured worker's compensation and product liability expense of $8.0 million.
|
•
|
charges totaling $207.5 million related to the impairment of goodwill and other intangible assets within our International segment,
|
•
|
gains totaling $197.7 million from the divestiture of the Spicetec and JM Swank businesses,
|
•
|
charges totaling $60.6 million related to the early retirement of debt, and
|
•
|
expenses of $26.9 million in connection with our SCAE plan.
|
|
Operating Profit
|
||||||||||||||||||||
($ in millions)
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||||||||
Reporting Segment
|
November 26,
2017 |
|
November 27,
2016 |
|
% Inc
(Dec)
|
|
November 26,
2017 |
|
November 27,
2016 |
|
% Inc
(Dec)
|
||||||||||
Grocery & Snacks
|
$
|
199.8
|
|
|
$
|
220.2
|
|
|
(9
|
)%
|
|
$
|
376.0
|
|
|
$
|
400.7
|
|
|
(6
|
)%
|
Refrigerated & Frozen
|
128.5
|
|
|
118.0
|
|
|
9
|
%
|
|
230.4
|
|
|
210.2
|
|
|
10
|
%
|
||||
International
|
20.2
|
|
|
(26.7
|
)
|
|
N/A
|
|
|
39.1
|
|
|
(175.9
|
)
|
|
N/A
|
|
||||
Foodservice
|
47.4
|
|
|
31.9
|
|
|
48
|
%
|
|
70.6
|
|
|
53.6
|
|
|
32
|
%
|
||||
Commercial
|
—
|
|
|
(0.5
|
)
|
|
(100
|
)%
|
|
—
|
|
|
202.8
|
|
|
(100
|
)%
|
•
|
an income tax benefit allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant,
|
•
|
additional income tax expense related to state taxes, and
|
•
|
an income tax benefit related to a change in estimate of the income tax effect of undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made.
|
•
|
an income tax benefit allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant,
|
•
|
additional tax expense associated with a change in estimate regarding the tax basis of the Spicetec business that was sold in the first quarter of fiscal 2017, and
|
•
|
additional tax expense associated with non-deductible goodwill in our Mexican business, for which an impairment charge was recognized.
|
•
|
additional tax expense associated with non-deductible goodwill sold in connection with the dispositions of the Spicetec and JM Swank businesses,
|
•
|
additional tax expense associated with non-deductible goodwill in our Canadian business, for which an impairment charge was recognized,
|
•
|
an income tax benefit for excess tax benefits allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant, and
|
•
|
an income tax benefit associated with a tax planning strategy that allowed us to utilize certain state tax attributes.
|
|
Payments Due by Period
(in millions)
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5
Years
|
||||||||||
Long-term debt
|
$
|
3,321.3
|
|
|
$
|
189.7
|
|
|
$
|
626.7
|
|
|
$
|
445.9
|
|
|
$
|
2,059.0
|
|
Capital lease obligations
|
127.0
|
|
|
9.1
|
|
|
16.8
|
|
|
17.6
|
|
|
83.5
|
|
|||||
Operating lease obligations
|
216.5
|
|
|
39.9
|
|
|
50.0
|
|
|
34.0
|
|
|
92.6
|
|
|||||
Purchase obligations
1
and other contracts
|
1,038.2
|
|
|
856.9
|
|
|
114.3
|
|
|
65.3
|
|
|
1.7
|
|
|||||
Notes payable
|
67.1
|
|
|
67.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
4,770.1
|
|
|
$
|
1,162.7
|
|
|
$
|
807.8
|
|
|
$
|
562.8
|
|
|
$
|
2,236.8
|
|
|
Amount of Commitment Expiration Per Period
(in millions)
|
||||||||||||||||||
Other Commercial Commitments
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5
Years
|
||||||||||
Standby repurchase obligations
|
$
|
0.9
|
|
|
$
|
0.6
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other commitments
|
6.9
|
|
|
3.5
|
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
7.8
|
|
|
$
|
4.1
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Impact
|
||||||
In Millions
|
Average
During Twenty-six Weeks
Ended November 26, 2017
|
|
Average
During Twenty-six Weeks
Ended November 27, 2016
|
||||
Energy commodities
|
$
|
0.4
|
|
|
$
|
0.4
|
|
Agriculture commodities
|
0.4
|
|
|
0.7
|
|
||
Foreign exchange
|
0.6
|
|
|
0.3
|
|
Period
|
Total Number
of Shares (or
units)
Purchased
|
|
Average
Price Paid
per Share
(or unit)
|
|
Total Number of
Shares
Purchased as Part of
Publicly Announced
Plans or Programs
(1)
|
|
Approximate Dollar
Value of Maximum
Number of Shares that
may yet be Purchased
under the Program (1)
|
||||||
August 28 through September 24, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,081,967,000
|
|
September 25 through October 22, 2017
|
2,278,142
|
|
|
$
|
34.16
|
|
|
2,278,142
|
|
|
$
|
1,004,155,000
|
|
October 23 through November 26, 2017
|
5,904,526
|
|
|
$
|
34.24
|
|
|
5,904,526
|
|
|
$
|
801,968,000
|
|
Total Fiscal 2018 Second Quarter Activity
|
8,182,668
|
|
|
$
|
34.22
|
|
|
8,182,668
|
|
|
$
|
801,968,000
|
|
(1)
|
Pursuant to publicly announced share repurchase programs from December 2003, we have repurchased approximately 210.1 million shares at a cost of $5.75 billion through
November 26, 2017
. On October 11, 2016, we announced that our Board of Directors approved an increase of $1.25 billion to the share repurchase program. On June 29, 2017, we announced that in the fourth quarter of fiscal 2017, our Board of Directors approved a further increase of $1.0 billion to the share repurchase program. The share repurchase program is effective and has no expiration date.
|
|
CONAGRA BRANDS, INC.
|
|
|
|
|
|
By:
|
/s/ DAVID S. MARBERGER
|
|
|
David S. Marberger
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
By:
|
/s/ ROBERT G. WISE
|
|
|
Robert G. Wise
|
|
|
Senior Vice President and Corporate Controller
|
|
CONAGRA BRANDS, INC.
|
|
By:
/s/ Ryan Egan
_____________________
Vice President of Human Resources |
|
CONAGRA BRANDS, INC.
|
|
By:
/s/ Ryan Egan
______________________
Vice President of Human Resources |
|
222 W. MERCHANDISE MART PLAZA
SUITE 1300 CHICAGO, IL 60654
|
|
Twenty-six weeks ended
|
||
November 26, 2017
|
|||
Earnings:
|
|
||
Income from continuing operations before income taxes and equity method investment earnings
|
$
|
556.6
|
|
Add (deduct):
|
|
||
Fixed charges
|
89.1
|
|
|
Distributed income of equity method investees
|
—
|
|
|
Capitalized interest
|
(2.2
|
)
|
|
Earnings available for fixed charges (a)
|
$
|
643.5
|
|
|
|
||
Fixed charges:
|
|
||
Interest expense
|
$
|
76.3
|
|
Capitalized interest
|
2.2
|
|
|
One third of rental expense
(1)
|
10.6
|
|
|
Total fixed charges (b)
|
$
|
89.1
|
|
|
|
||
Ratio of earnings to fixed charges (a/b)
|
7.2
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended
November 26, 2017
of Conagra Brands, Inc.;
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2.
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Based on my knowledge, this 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 report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this 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 report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: January 4, 2018
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/s/ SEAN M. CONNOLLY
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Sean M. Connolly
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q for the quarter ended
November 26, 2017
of Conagra Brands, Inc.;
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2.
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Based on my knowledge, this 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 report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this 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 report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: January 4, 2018
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/s/ DAVID S. MARBERGER
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David S. Marberger
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Executive Vice President and Chief Financial Officer
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January 4, 2018
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/s/ SEAN M. CONNOLLY
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Sean M. Connolly
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Chief Executive Officer
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January 4, 2018
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/s/ DAVID S. MARBERGER
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David S. Marberger
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Executive Vice President and Chief Financial Officer
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